Builders FirstSource (BFS), the No. 9 company on the ProSales 100, announced today it has amended one of its main credit lines so that it can borrow a larger share of a smaller total amount available, thus increasing its borrowing flexibility while reducing its commitment fees.
The changes to BFS' 2007 senior secured revolving credit facility enable BFS to increase its borrowing availability up to $25 million by reducing its minimum liquidity requirement, the Dallas-based company said in an SEC filing. It also cut the maximum borrowing capacity under the facility to $150 million from $250 million. As a result, BFS' will trim $400,000 from its annual interest expenses related to commitment fees.
"This is a significant improvement to our overall liquidity," Chad Crow, BFS' senior vice president and chief financial officer, said in a statement. He added that the change "should not limit our future borrowing capacity as we do not anticipate our borrowing base will support borrowings in excess of $150 million prior to the expiration of the facility in December 2012."
The increased borrowing availability was made possible by a drop in the minimum liquidity requirement. Before the amendment, there were terms in the facility that kicked in when BFS reached a minimum liquidity of $35 million. The amendment changes that to a sliding scale in which the minimum liquidity requirement can be as low as $10 million.
BFS serves new home builders--particularly production builders--in nine Southeastern states. It ranked 10th on the latest ProSales 100 with sales in 2009 of $785 million, 98% of it to pros. Since then, changes further up the chart have moved it into ninth place.
In October, BFS reported its loss from continuing operations deepened to $19.7 million in the third quarter from $15.9 million in the year-earlier period on a 4.5% drop in sales to $180.4 million. BFS also revealed then that it had temporarily idled four manufacturing facilities and two distribution centers. (Story)