SOURCE: Building Materials Holding Corporation

Building Materials Holding Corporation

November 16, 2009 08:00 ET

BMHC Takes Steps to Prepare for Emergence From Chapter 11 With a Stronger Balance Sheet and Enhanced Liquidity

Company Files Supplements to Plan of Reorganization, Names Proposed Senior Management Team and New Board Members

BOISE, ID--(Marketwire - November 16, 2009) - Building Materials Holding Corporation, a leading provider of building materials and construction services to professional residential builders and contractors, today announced a number of actions to prepare the Company for its expected emergence from Chapter 11 later this year, including the filing of a transition plan for BMHC's senior management team and designation of the proposed members of the Company's Board of Directors. BMHC expects to emerge from the reorganization process with a stronger balance sheet, enhanced liquidity, and a streamlined, more efficient cost structure.

As previously announced, the U.S. Bankruptcy Court in Delaware has approved BMHC's Disclosure Statement and authorized the Company to begin soliciting approvals of the Company's Plan of Reorganization from the requisite creditor groups. The Plan, which is subject to Court approval, provides for BMHC's secured lenders to convert debt into equity, becoming majority owners of the Company upon emergence. Under the Plan, BMHC will reduce its outstanding indebtedness as of the filing date by approximately $150 million to $135 million upon emergence. The Company has obtained commitments for $103.5 million of exit financing to support its ongoing operations and future growth.

The deadline for ballots to be received by the voting agent is November 25, 2009. A court hearing to confirm the Plan is scheduled to be held on December 10, 2009. Provided that the Plan is confirmed at that time, BMHC expects to complete its financial restructuring and emerge from Chapter 11 by the end of 2009. In preparation for the upcoming confirmation hearing, BMHC today filed a number of supplements to its Disclosure Statement. These include a list of the proposed officers of the Company and a list of the proposed members of BMHC's new Board of Directors.

Senior Management Transition

Subject to confirmation of the Plan of Reorganization, BMHC expects to emerge from Chapter 11 with a seasoned senior management team consisting of company veterans. The designated senior officers are:

--  Paul S. Street will serve as Chief Executive Officer. He is currently
    Senior Vice President, Chief Administrative Officer, General Counsel and
    Corporate Secretary. Mr. Street joined the Company in 1999 as Senior Vice
    President, General Counsel and Corporate Secretary and has been Chief
    Administrative Officer since 2001. In his current role he is responsible
    for the legal affairs of the Company and administrative functions at its
    corporate office in Boise, Idaho. He previously served as BMHC's outside
    General Counsel & Secretary while a partner of the law firm of Moffatt,
    Thomas, Barrett, Rock & Fields.
--  Stanley M. Wilson will continue to serve as President and Chief
    Operating Officer. Mr. Wilson is a 40-year veteran of the building products
    industry, first at Boise Cascade and, since 1987, at BMC West and BMHC. He
    was elected President and Chief Operating Officer of BMHC in 2008 and
    President and CEO of BMC West in 2004. He was appointed a Senior Vice
    President in 2003. He was elected Vice President in 2000 and was General
    Manager of the Pacific Division of BMC West from 1993 to 2003.
--  Daniel (Danny) McQuary will serve as Chief Financial Officer. Mr.
    McQuary currently serves as Vice President -- Director of Finance for
    BMHC's operating brands, BMC West and SelectBuild. He previously served as
    Chief Financial Officer for Lone Star Plywood & Door Corporation from 1994
    until its acquisition by BMC West in 1997. He has held management positions
    in the building materials distribution industry for the past 15 years and
    has been involved in various jobs related to the homebuilding industry for
    most of his business career.

Current officers Robert E. Mellor, Chairman and Chief Executive Officer, William M. Smartt, Senior Vice President and Chief Financial Officer, and Mark R. Kailer, Vice President and Treasurer, all based in San Francisco, will leave the Company following its emergence from bankruptcy.

"With the groundwork in place for BMHC's emergence from Chapter 11 later this year with far less debt and an improved capital structure, we are turning our attention to the consolidation of administrative functions in Boise and implementation of a seamless transition in the senior leadership team," Mr. Mellor said.

Proposed Board of Directors

Subject to confirmation of the Plan of Reorganization by the Court, a new Board of Directors will take office on the effective date of the Plan. In addition to Mr. Street, the proposed Board will consist of six independent directors who will draw upon a wide range of skills and experience. The designated independent directors are:

--  Peter C. Alexander, past President and CEO of ORCO Construction
    Distribution, the largest independent building materials distributor in the
    Western United States. A business turnaround specialist, he previously
    served as President and CEO or COO of several other companies in the
    technology, retail/distribution and service industries.
--  Marc Chasman, President of Picerne Capital West, a real estate
    investment group. He previously served as President of the Northern
    California Region of Lennar Homes and earlier in his career held finance
    positions at KB Homes.
--  Dennis Downer, a 35-year veteran of the forest products industry. He
    is founder and chairman of Intermountain Orient, a lumber distributor in
    Boise, Idaho. He is also former president of the North American Wholesale
    Lumber Association.
--  Jay B. Hunt, a turnaround consultant based in Sacramento, CA. He is
    currently non-executive chairman of DDi Corp., Inc., a leading provider of
    time-critical, technologically advanced electronics manufacturing services
    for the electronics industry.
--  Michael A. Maidy, co-managing director and co-founder of Sherwood
    Partners, LLC, a financial services and crisis management consulting firm.
    Before founding Sherwood in 1992, he was managing partner of a national CPA
--  Carl R. Vertuca, Jr., President of The Vertuca Group, a venture
    capital and real estate investment company founded in 2000. He previously
    served as Executive Vice President and a Director of The Dii Group, a
    publicly held contract manufacturing company.

On June 16, 2009, BMHC and all of its subsidiaries voluntarily initiated reorganization cases in Delaware under Chapter 11 of the U.S. Bankruptcy Code. Pursuant to the bankruptcy plan, BMHC's existing common shares held by shareholders will be extinguished and these shareholders will not receive any distributions.

This press release is available on the Company's website at, along with additional information on the restructuring.

About BMHC

BMHC is one of the largest providers of building materials and residential construction services in the United States. We serve the homebuilding industry through two recognized brands: as BMC West, we distribute building materials and manufacture building components for professional builders and contractors in the western and southern states; as SelectBuild, we provide construction services to production homebuilders in key markets. To learn more about BMHC, visit our website at


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 if
    we do not successfully emerge from bankruptcy;
--  our existing common shares held by shareholders will be extinguished
    under our proposed plan of reorganization and these shareholders will not
    receive any distributions;
--  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;
--  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
--  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:

--  our existing common shares held by shareholders will be extinguished
    under our proposed plan of reorganization and these shareholders will not
    receive any distributions;
--  price for our shares may fluctuate significantly;
--  our shares may be less attractive as they are only traded on the "pink
    sheets" and are not traded on a large, more well-known exchange nor on the
    OTC Bulletin Board; 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 the impact of our restructuring initiatives, the approval of our plan of reorganization, our emergence from bankruptcy and our proposed management team and board of directors 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 obtain approval of our plan of reorganization from the bankruptcy court and emerge from bankruptcy. 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.

Contact Information

  • For More Information:

    Bill Smartt
    Senior Vice President and Chief Financial Officer

    Mark Kailer
    Vice President and Treasurer

    Lisa Laukkanen
    The Blueshirt Group for BMHC