Net loss for the first quarter of 2009 increased to
Commenting on first quarter results,
"We are working with our lenders toward a restructuring of our credit facility and balance sheet and we appreciate their continuing support. We are pleased to have obtained an extension of the waiver from our lenders that allows the Company to continue to borrow up to
"We also appreciate the continued hard work of our employees and ongoing support from our vendors during these unprecedented times. We greatly value the loyalty of our customers and look forward to continuing to provide them with high quality materials and services," concluded Mr. Mellor.
Extension of Waiver to Credit Facility
The Company obtained an extension of the waiver from its lenders that continues to waive the monthly Adjusted EBITDA, forecast and projection requirements of our credit agreement and continues to allow the Company to borrow up to
Operating Results (thousands) Three Months Ended March 31 % 2009 2008 Change Sales Building Products $99,174 $179,886 (45)% Construction Services 68,325 163,062 (58)% $167,499 $342,948 (51)% Loss from operations $(32,925) $(18,356) (79)%
For the quarter, sales declined 51% to
For the quarter, loss from continuing operations increased over the prior year's first quarter as a result of:
-- lower sales volume, particularly construction services, -- gross margin compression from competitive market conditions and -- deleveraging of selling, general and administrative (SG&A) expenses as fixed capacity costs combined with facility consolidation and closure costs of $4.9 million in the first quarter of 2009 resulted in SG&A increasing to 37.0% from 24.6% of sales in the prior year's first quarter. Excluding the $4.9 million of consolidation and closure costs, first quarter 2009 SG&A expenses were 34.1% of sales.
Interest Expense
For the quarter, interest expense was 4% or
-- higher interest rates, -- costs associated with interest rate swap contracts no longer accounted for as cash flow hedges and -- costs to obtain a limited waiver for our credit agreement.
Income Taxes
For the quarter, the significant change in our effective tax rate for continuing operations was the result of additional valuation allowance due to the uncertainty as to our ability to realize deferred tax assets.
About BMHC
BMHC is one of the largest providers of building materials and residential construction services in
BUSINESS RISKS AND FORWARD-LOOKING STATEMENTS
There are a number of business risks and uncertainties that affect our operations and therefore could cause future results to differ from past performance or expected results. Additional information regarding business risks and uncertainties is contained in Part II Item 1A of our most recent Form 10-Q. These risks and uncertainties may include, however are not limited to:
-- substantial doubt about our ability to continue as a going concern; -- our existing common equity may have no value; -- demand for and supply of single-family homes which are influenced by changes in the overall condition of the U.S. economy, including interest rates, consumer confidence, job formation, availability of credit and other important factors; -- our ability to maintain adequate liquidity, reduce operating costs and increase market share in an industry that has experienced and continues to experience a significant reduction in average annual housing starts; -- our liquidity is dependent on operating performance, an efficient cash conversion cycle and compliance with financial covenants; -- our ability to implement and maintain cost structures that align with sales trends and -- losses of customers as well as changes in the business models of our customers may limit our ability to provide building products and construction services; -- intense competition; -- availability of and our ability to attract, train and retain qualified individuals; -- fluctuations in our costs and availability of sourcing channels for commodity wood products, concrete, steel and other building materials; -- weather conditions including natural catastrophic events; -- exposure to product liability and construction defect claims as well as other legal proceedings; -- disruptions in our information systems; -- actual and perceived vulnerabilities as a result of widespread credit and liquidity concerns, terrorist activities and armed conflict; -- costs and/or restrictions associated with federal, state and other regulations and -- numerous other matters of a local and regional scale, including those of a political, economic, business, competitive or regulatory nature.
Risks related to our shares may include, however are not limited to:
-- price for our shares may fluctuate significantly; -- our shares may be less attractive as they are not traded on a large, more well-known exchange and -- anti-takeover defenses and certain provisions could prevent an acquisition of our company or limit share price.
Certain statements in this news release including those related to our restructuring initiatives and cost cutting efforts, our liquidity and negotiations with our lenders are forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Statements that are not historical or current facts, including statements about our expectations, anticipated financial results and future business prospects are forward-looking statements. While these statements represent our current judgment on what the future may hold and we believe these judgments are reasonable, these statements involve risks and uncertainties that are important factors that could cause our actual results to differ materially from those in forward-looking statements. These factors include, however are not limited to the risks and uncertainties cited in the above paragraph, as well as our ability to timely and successfully implement our restructuring program and achieve the benefits that the program is designed to provide, including preserving value, enhancing our liquidity, generating tax refunds, reducing expenses and generating cash proceeds. Undue reliance should not be placed on such forward-looking statements, as such statements speak only as of the date of this news release. We undertake no obligation to update forward-looking statements.
(Tables Follow)
Building Materials Holding Corporation Consolidated Statements of Operations (thousands, except per share data) (unaudited) Three Months Ended Year Ended March 31 December 31 2009 2008 2008 Sales Building products $99,174 $179,886 $693,664 Construction services 68,325 163,062 631,015 Total sales 167,499 342,948 1,324,679 Costs and operating expenses Cost of goods sold Building products 77,267 130,683 514,222 Construction services 66,839 150,795 576,087 Impairment of assets 365 - 53,015 Selling, general and administrative expenses 61,952 84,256 349,417 Other income, net (5,999) (4,430) (5,059) Total costs and operating expenses 200,424 361,304 1,487,682 Loss from operations (32,925) (18,356) (163,003) Interest expense 12,155 11,638 52,925 (45,080) (29,994) (215,928) Loss from continuing operations before income taxes Income tax benefit (expense) 12 (3,849) 23,409 Loss from continuing operations (45,068) (33,843) (192,519) Loss from discontinued operations (152) (3,513) (12,680) Impairment of assets - - (7,813) Income tax benefit (expense) - 3,456 (1,860) Loss from discontinued operations (152) (57) (22,353) Net loss (45,220) (33,900) (214,872) Noncontrolling interests loss - 39 63 Net loss attributable to common shareholders $(45,220) $(33,861) $(214,809) Net loss per share: Continuing operations $(1.53) $(1.17) $(6.62) Discontinued operations - - (0.77) Basic $(1.53) $(1.17) $(7.39) Continuing operations $(1.53) $(1.17) $(6.62) Discontinued operations - - (0.77) Diluted $(1.53) $(1.17) $(7.39)
Building Materials Holding Corporation Consolidated Balance Sheets (thousands) (unaudited) March 31 December 31 2009 2008 Assets Cash and cash equivalents $6,323 $11,484 Receivables, net of allowances of $14,487 and $12,091 89,703 118,245 Inventory 70,605 78,676 Unbilled receivables 10,571 13,112 Income tax receivable 49,977 50,304 Deferred income taxes - - Prepaid expenses and other 4,940 4,864 Assets of discontinued operations 5,073 5,659 Current assets 237,192 282,344 Property and equipment Land 34,188 33,996 Buildings and improvements 120,727 120,814 Equipment 144,385 153,843 Construction in progress 3,444 3,440 Accumulated depreciation (144,460) (148,032) Assets held for sale 41,451 46,300 Deferred income taxes - - Deferred loan costs 4,100 4,485 Other long-term assets 20,696 23,303 Other intangibles, net 18,425 19,222 Goodwill - - $480,148 $539,715 March 31 December 31 2009 2008 Liabilities and (Deficit) Equity Accounts payable $26,189 $19,021 Accrued compensation 19,452 17,274 Insurance deductible reserves 16,788 17,527 Other accrued liabilities 24,524 26,981 Billings in excess of costs and estimated earnings 19,696 24,054 Current portion of long-term debt 316,309 39,443 Liabilities of discontinued operations 502 773 Current liabilities 423,460 145,073 Insurance deductible reserves 25,466 26,208 Long-term debt 381 287,009 Other long-term liabilities 32,007 37,163 Total liabilities 481,314 495,453 Commitments and contingent liabilities - - (Deficit) equity Common shares, $0.001 par value: authorized 50 million shares; issued and outstanding 29.7 and 29.7 million shares 29 29 Additional paid-in capital 168,545 169,146 Deferred compensation common shares obligation 80 878 Deferred compensation common shares held (80) (878) Accumulated deficit (165,547) (120,327) Accumulated other comprehensive loss, net (4,193) (4,586) Shareholders' (deficit) equity (1,166) 44,262 Noncontrolling interests - - Total (deficit) equity (1,166) 44,262 $480,148 $539,715
Building Materials Holding Corporation Consolidated Statements of Cash Flows (thousands) (unaudited) Three Months Ended Year Ended March 31 December 31 2009 2008 2008 Operating Activities Net loss attributable to common shareholders $(45,220) $(33,861) $(214,809) Noncontrolling interests loss, net - (39) (63) Net loss $(45,220) $(33,900) $(214,872) Items in net loss not using (providing) cash: Depreciation and amortization 6,141 10,522 37,611 Deferred loan cost amortization 385 2,739 1,621 Deferred loan cost write off - - 7,099 Amortization of unrealized loss related to interest rate swap contracts 384 - - previously accounted for as cash flow hedge Amortization of terminated interest rate swap contracts notional reduction 250 - 926 settlement payments Unrealized ineffective portion of interest rate swap contracts - - 3,022 Amortization of warrant discount 62 - 62 Impairment of assets 365 - 60,828 Share-based compensation 249 1,846 4,276 Gain on sale of assets, net (5,338) (3,435) (2,225) Realized gain on marketable securities - (186) (542) Deferred income tax (benefit) expense (241) 13,896 22,534 Changes in assets and liabilities, net of effects of acquisitions and divestitures of business units: Receivables, net 29,155 15,435 85,424 Inventory 8,042 7,670 38,190 Unbilled receivables 2,541 8,271 26,804 Income tax receivable 327 - (40,492) Prepaid expenses and other current assets (73) (7,276) 4,298 Accounts payable 6,951 4,909 (32,836) Accrued compensation (258) (3,306) (14,724) Insurance deductible reserves (739) (1,756) (10,961) Other accrued liabilities (1,852) (2,540) (8,028) Billings in excess of costs and estimated earnings (4,358) 1,434 275 Other long-term assets and liabilities (3,343) (2,610) 8,789 Other, net (241) (3,504) (205) Cash flows (used) provided by operating activities (6,811) 8,209 (23,126) Investing Activities Purchases of property and equipment (570) (7,176) (16,509) Acquisitions and investments in businesses, net of cash acquired - (2,450) (8,575) Proceeds from dispositions of property and equipment 10,828 5,187 14,871 Purchase of marketable securities - (13,854) (28,589) Proceeds from sales of marketable securities - 10,339 70,221 Other, net (26) (2,797) (2,123) Cash flows provided (used) by investing activities 10,232 (10,751) 29,296 Financing Activities Net borrowings under revolver 2,300 - - Principal payments on term notes (11,986) (3,522) (19,866) Interest rate swap contracts notional reduction settlement payments (1,220) - (3,835) Net payments on other notes (138) (418) (2,261) Increase (decrease) in book overdrafts 2,418 (4,413) (17,616) Proceeds from share options exercised - 9 8 Income tax benefit for share-based compensation - (731) - Dividends paid - (2,938) (2,938) Deferred financing costs - (4,927) (8,847) Other, net 44 - 82 Cash flows used by financing activities (8,582) (16,940) (55,273) Decrease in Cash and Cash Equivalents (5,161) (19,482) (49,103) Cash and cash equivalents, beginning of period 11,484 60,587 60,587 Cash and cash equivalents, end of period $6,323 $41,105 $11,484 Supplemental Disclosure of Cash Flow Information Cash paid for interest $8,407 $8,876 $41,863 Cash paid for income taxes $9 $78 $3,141 Supplemental Schedule of Investing Activities Liabilities of acquisitions (extinguished) $- $(2,450) $(8,525) Cash paid for acquisitions made this period $- $2,450 $8,525 Cash paid for acquisitions made in prior period $- $- $50 Supplemental Schedule of Financing Activities Fair value of warrants issued $- $- $782 Discount on term note for warrants issued $- $- $(782)
SOURCE Building Materials Holding Corp.