BMC Stock Holdings, Inc. Provides Business Update Regarding COVID-19
BMC Stock Holdings, Inc., (“BMC” or the “Company”), one of the leading providers of diversified building products, services and innovative solutions in the U.S. construction market, today announced business and financial updates in response to the coronavirus disease 2019 (“COVID-19”) pandemic.
“At BMC, we are focused on supporting our associates, customers, partners and communities during this unprecedented time,” said Dave Flitman, President and CEO of BMC. “Due to the rapidly evolving nature and continued uncertainty surrounding COVID-19, we are taking actions to maintain the safety of our associates and increase our Company’s financial flexibility, including borrowing on our revolving credit facility and temporarily suspending our share repurchase program, while actively reducing our operating expenses and capital expenditures. While we cannot predict how long the COVID-19 pandemic will last, I am confident that these actions, combined with our unwavering commitment to safety, our differentiated business model and our financial strength will position us to navigate through this challenging period.”
The safety of BMC’s associates and families is very important, and the Company has taken several steps to protect its associates, which include implementing detailed cleaning and disinfecting processes at BMC locations, adhering to social distancing protocols, suspending all air travel, and encouraging all associates to work from home when possible.
Additionally, the Company launched a dedicated COVID-19 resource intranet page to keep associates up-to-date on Company and health authority information, guidelines and policies, such as the guidelines set by the Centers for Disease Control and Prevention, which BMC associates are to follow as appropriate. The Company also enacted an Emergency Sick Pay Leave policy for associates unable to report to work because of a COVID-19 disruption.
While state, county, and other local municipalities have issued various and differing shelter in place orders, in many locations the Company’s products and services are classified as “essential business” and the Company’s facilities in those jurisdictions continue operations. However, due to certain COVID-19 related restrictions, the Company has significantly reduced operations in the State of Washington which represented approximately 5% of BMC’s 2019 net sales.
Liquidity and Capital Resources
As a precautionary measure to increase cash on hand and financial flexibility, the Company recently borrowed $144 million under its revolving credit facility. As a result of this draw, the Company had cash on hand of approximately $285 million on March 31, 2020 and approximately $215 million of remaining borrowing capacity under its revolver, resulting in total liquidity of approximately $500 million. Additionally, the Company has no significant long-term debt maturities until 2024.
The Company has also postponed future growth-related capital projects and share repurchases until further notice, but will continue to invest in safety and productivity-related capital expenditures. Additionally, the Company has taken steps to reduce operating expenses, including voluntary cash salary and retainer reductions by senior management and the Board of Directors, reductions in associate staffing levels and the elimination of certain discretionary spending.
Withdrawal of Full-Year 2020 Outlook
Considering the rapidly evolving COVID-19 situation, BMC is withdrawing its full-year 2020 outlook issued on February 27, 2020, as management anticipates that COVID-19 will have a negative impact on single-family housing starts and the Company’s financial results over the remaining months of the year. The company does not expect a significant impact to its first quarter 2020 results as compared to its original expectations, and expects to provide an update on business conditions and capital allocation during its first quarter earnings call, which is planned for early May.
Virtual Annual Meeting
Considering on-going developments related to COVID-19, the Company’s 2020 Annual Meeting of Stockholders will be a virtual-only meeting this year. The meeting will be held on Thursday, May 14, 2020, at 8:00 a.m. Eastern Time. Log-in begins at 7:45 a.m. To participate, go to www.virtualshareholdermeeting.com/BMCH2020 with your 16-digit control number.
About BMC Stock Holdings, Inc.
With $3.6 billion in 2019 net sales, BMC is a leading provider of diversified building products, services and innovative solutions to builders, contractors and professional remodelers in the U.S. construction market. Headquartered in Raleigh, North Carolina, the Company’s comprehensive portfolio of products and solutions spans building materials, including millwork and structural component manufacturing capabilities, consultative showrooms and design centers, value-added installation management services and an innovative eBusiness platform. BMC serves 45 metropolitan areas across 18 states, principally in the South and West regions.
Michael Neese – Investor Relations Contact – (919) 431-1796
Source: BMC Stock Holdings, Inc.