BOISE, Idaho, June 17 /PRNewswire-FirstCall/ -- Building Materials Holding Corporation (BULLETIN BOARD: BLGM) , a leading provider of building materials and construction services to professional residential builders and contractors, today announced that it has received interim authorization from the U.S. Bankruptcy Court in Delaware to, among other things, continue to meet its obligations to customers, including the fulfillment of contracts and the honoring of all warranties on normal terms in the ordinary course of business. The Company also has received Court approval to continue to meet its obligations to suppliers, employees and subcontractors.
At a hearing today in Wilmington, Delaware, the Court granted initial approval for BMHC to access a new $80 million in debtor-in-possession (DIP) financing facility from Wells Fargo Bank and certain of its other existing lenders. The Court authorized $40 million to be immediately available to the Company on an interim basis, with the full $80 million accessible upon final Court approval. The Company expects the new financing to provide ample liquidity to meet its ongoing obligations to employees, customers and suppliers during the reorganization process.
"We are very pleased that the Bankruptcy Court in Delaware has approved our First Day Motions and our DIP financing, which allow us to continue business as usual and to meet our obligations to our customers, suppliers and employees," said Robert E. Mellor, Chairman and Chief Executive Officer. "All of our operations are open, and we are continuing to serve our customers with the same focus and dedication as always. We appreciate the support we have seen from both our customers and suppliers as we move forward with this process to make BMHC financially stronger for the long term."
As previously announced, BMHC has reached agreement with members of its secured lender group on a plan to restructure the Company's balance sheet and provide greater financial flexibility to support its long-term business plan. Under the proposed restructuring plan, BMHC will significantly reduce its outstanding funded debt, establish a new revolving credit facility, and substantially lower annual interest expense upon consummation of the plan. In order to implement this "pre-negotiated" restructuring plan in an efficient and timely manner, on June 16, 2009, the Company and all of its subsidiaries voluntarily initiated reorganization proceedings under Chapter 11 of the U.S. Bankruptcy Code in Delaware and have filed a plan of reorganization to implement the restructuring.
BMHC will maintain normal operations and continue to pay employee wages, salaries and benefits in the usual manner. The Company intends to make payment for goods received and services provided to it on or after the filing date in the normal course of business and in accordance with the terms of existing supplier agreements. In addition, under its proposed Plan of Reorganization, the Company expects to pay in full suppliers of goods provided in the 20 days prior to filing and those with claims of under $5,000.
The company's "First Day Motions" were approved on either a final or interim basis at a hearing in Wilmington, Delaware on June 17th. A hearing at which the Company will seek final U.S. Court approval for the interim financing order has been scheduled for July 1st.
This press release is available on the Company's website at http://www.bmhc.com/, 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 high-volume production homebuilders in key markets across the country. To learn more about BMHC, visit our website at http://www.bmhc.com/.
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.
Building Materials Holding Corporation
CONTACT: Bill Smartt, Senior Vice President and Chief Financial Officer,
or Mark Kailer, Vice President, Treasurer and Investor Relations Officer, both
of BMHC, +1-415-627-9100; or Lisa Laukkanen of The Blueshirt Group for BMHC,
+1-415-217-4967, lisa@blueshirtgroup.com
Web Site: http://www.bmhc.com/
