More than $40 million and counting: That's the size of the net loss at Building Materials Holding Corp. (BMHC) during the first 3 1/2 months that America's sixth-biggest LBM company has operated under Chapter 11 protection from creditors. Its latest report to federal bankruptcy court, filed Oct. 30, reported an $8.6 million net loss in September. This marks an improvement from the $15.9 million loss it racked up in August, even though sales slipped to $61.1 million in September from $64.3 million the month before and the gross margin dropped to 18% from 19.4%.
As of Sept. 30, BMHC had $103.8 million in accounts receivable, of which $22.7 million, or 21.9%, were 91 or more days past due. That's slightly better than the 22.6% of the ARs 91+ days past due in August.
Earlier last month, a federal bankruptcy judge approved BMHC's disclosure statement, a key step in its bid to reorganize itself. In an Oct. 22 statement, BMHC said it "remains on track to complete its financial restructuring" and emerge from Chapter 11 by Dec. 31.
Also during October, Builders FirstSource (BFS) CEO Floyd Sherman revealed in a call to analysts that the company lost 8% of its market share during the third quarter. Sherman blamed an "extremely competitive pricing environment." The Dallas-based dealer incurred a net loss of $15.9 million for the third quarter on a 29% drop in net sales to $188.9 million.
BFS has announced it will seek a $205 million common stock rights offering that would be used in part to pay off senior priority debt notes due in 2012. But an investment fund that owns 14.9% of BFS' shares is crying foul, saying the idea will primarily benefit two other funds that hold the lion's share of those notes.