Building Material Holdings Corp (fka BLGM)

[hang ten]

BMHC Obtains Lender Authorization To Borrow Up To $20 Million Through June 1, 2009

BOISE, Idaho, April 14 /PRNewswire-FirstCall/ -- Building Materials Holding Corporation (OTC Bulletin Board: BLGM), a leading provider of building materials and construction services to professional residential builders and contractors, today announced that it has obtained a revised waiver from its lenders that authorizes the Company to borrow up to $20 million through June 1, 2009.


Robert E. Mellor, Chairman and Chief Executive Officer, said, 'We are in discussions with our lenders and appreciate their support. The focus of our discussions is on how to create the best capital structure to move the business forward and support our long-term strategic plan and business objectives. As these negotiations continue, we believe our ability to borrow up to $20 million under our revolver through June 1 should provide us with sufficient liquidity to continue to meet our ongoing business obligations to customers, suppliers and employees as we have always done. Our team remains as committed as ever to serving our customers with the same high quality materials and services they have come to expect from BMHC.'


BMHC's credit agreement provides a $200 million revolver subject to borrowing base limitations and a $340 million term note maturing in November 2011. As of April 13, 2009, there were $8.3 million in borrowings outstanding under the revolver and approximately $315 million outstanding under the term note.


As previously reported, BMHC's credit agreement requires monthly compliance with financial covenants including minimum liquidity and adjusted earnings before interest, taxes, depreciation and amortization (monthly Adjusted EBITDA) at least through 2010. Based on financial information for February 2009, the Company was not in compliance with the monthly Adjusted EBITDA requirement of its credit agreement. In March 2009, BMHC obtained a temporary waiver through April 15, 2009 for lack of compliance with this requirement. This waiver has now been extended through June 1. In addition, the lenders have agreed to waive a potential default that would otherwise arise under the current credit agreement if, as expected, BMHC's independent registered public accounting firm includes a going concern explanatory paragraph in their opinion as to the Company's financial statements for the year ended December 31, 2008. The waiver also requires BMHC to proceed with filing of tax returns, development of a business plan and includes a $0.5 million limitation on capital expenditures.


BMHC is in the process of finalizing its financial statements for the fourth quarter and full year 2008 and completing its year-end audit. The Company expects to file its Form 10-K annual report on or before April 15, 2009. BMHC also announced that it has filed its 2008 federal tax return that seeks a refund of approximately $56 million. Any refund obtained will be used by the Company to pay down existing obligations and will help de-lever its capital structure.