Building Materials Holding Corp. (BMHC) announced today its lenders have agreed to extend through June 1 a waiver that lets America's fifth-biggest LBM operation continue to borrow up to $20 million.
The money "should provide us with sufficient liquidity to continue to meet our ongoing business obligations to customers, suppliers and employees," chairman and CEO Robert E. Mellor said in a statement. The $20 million is being used while BMHC negotiates with its lenders "how to create the best capital structure to move the business forward and support our long-term strategic plan and business objectives," Mellor said.
Boise, Idaho-based BMHC announced March 10 it incurred a net loss of $104 million in the fourth quarter of last year, pushing its net loss for all 2008 to $215 million. Sales fell 42% for the quarter to $233 million from $403 million in 2007's fourth quarter. For the year, BMHC sales decreased 39% to $1.3 billion from $2.2 billion. While severe, the fourth-quarter net loss was far lighter than the $331 million loss in the final three months of 2007. Likewise, the $215 million loss for the year was a sharp improvement from 2007's loss of $313 million.
BMHC has a two-part credit agreement, the first providing a $200 million revolver subject to borrowing base limitations and the second consisting of a $340 million term note maturing in November 2011. As of April 13, there were $8.3 million in borrowings outstanding under the revolver and approximately $315 million outstanding under the term note, BMHC said.
The credit agreement requires BMHC hew each month to several covenants, including provisions on maintaining minimum liquidity and minimum adjusted earnings before interest, taxes, depreciation and amortization (EBITDA). BMHC fell out of compliance with the EBITDA section as of February, so in March it got a temporary waiver through April 15. That waiver now will last through June 1.
BMHC also announced then its 2008 federal tax return seeks a $56 million refund, the proceeds of which would be used to pay down existing obligations and improve its capital structure.
BMHC--which consists of the BMC West building supply operation and the SelectBuild custom construction unit, has struggled over the past year to cut costs. In 2008, the company moved its headquarters from San Francisco to Boise, Idaho, closed 42 locations and consolidated 15 business units that were "deemed underperforming." BMHC also reduced its total headcount by 42% in its field operations and 12% in its administration department.
BMHC ranked fifth on the 2008 ProSales 100, with sales in 2007 of $2.23 billion.