BMC Stock Holdings, Inc. (Nasdaq: BMCH) (“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.”
Safety
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.
Operations
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.
Forward-Looking Statements
This press release contains "forward-looking
statements" within the meaning of the Private Securities Litigation
Reform Act of 1995. Forward-looking statements in this document may
include, without limitation, statements regarding sales growth,
price changes, earnings performance, strategic direction and the
demand for our products. Forward-looking statements are typically
identified by words or phrases such as "may," "might," "predict,"
"future," "seek to," "assume," "goal," "objective," "continue,"
"will," "could," "should," "would," "anticipate," "estimate,"
"expect," "project," "intend," "plan," "believe," "target,"
"prospects," "guidance," "possible," "predict," "propose,"
"potential" and "forecast," or the negative of such terms and other
words, terms and phrases of similar meaning. Forward-looking
statements involve estimates, expectations, projections, goals,
forecasts, assumptions, risks and uncertainties, many of which are
outside BMC's control. BMC cautions readers that any
forward-looking statement is not a guarantee of future performance
and that actual results could differ materially from those
contained in the forward-looking statement; therefore, investors
and shareholders should not place undue reliance on such statement.
There are a number of risks and uncertainties that could cause
actual results to differ materially from the forward-looking
statements included in this communication.
A number of important factors could cause actual
results to differ materially from those indicated by the
forward-looking statements. These factors include without
limitation:
- the state of the homebuilding industry and repair and
remodeling activity, the economy and the credit markets;
- fluctuation of commodity prices and prices of our products as a
result of national and international economic and other
conditions;
- the impact of potential changes in our customer or product
sales mix;
- our concentration of business in the Texas, California and
Georgia markets;
- the potential loss of significant customers or a reduction in
the quantity of products they purchase;
- seasonality and cyclicality of the building products supply and
services industry;
- competitive industry pressures and competitive pricing pressure
from our customers and competitors;
- our exposure to product liability, warranty, casualty,
construction defect, contract, tort, employment and other claims
and legal proceedings;
- our ability to maintain profitability and positive cash
flows;
- our ability to retain our key employees and to attract and
retain new qualified employees, while controlling our labor
costs;
- product shortages, loss of key suppliers or failure to develop
relationships with qualified suppliers, and our dependence on
third-party suppliers and manufacturers;
- the implementation of our supply chain and technology
initiatives;
- the impact of long-term non-cancelable leases at our
facilities;
- our ability to effectively manage inventory and working
capital;
- the credit risk from our customers;
- our ability to identify or respond effectively to consumer
needs, expectations, market conditions or trends;
- our ability to successfully implement our growth strategy;
- the impact of federal, state, local and other laws and
regulations;
- the impact of changes in legislation and government
policy;
- the impact of unexpected changes in our tax provisions and
adoption of new tax legislation;
- our ability to utilize our net operating loss
carryforwards;
- natural or man-made disruptions to our distribution and
manufacturing facilities;
- our exposure to environmental liabilities and subjection to
environmental laws and regulation;
- the impact of health and safety laws and regulations;
- the impact of the global outbreak of COVID-19;
- the impact of disruptions to our information technology
systems;
- cybersecurity risks;
- our exposure to losses if our insurance coverage is
insufficient;
- our ability to operate on multiple Enterprise Resource Planning
(“ERP”) information systems and convert multiple systems to a
single system;
- the impact of our indebtedness;
- the impact of the various financial covenants in our secured
credit agreement and senior secured notes indenture; and
- other factors discussed or referred to in the “Risk Factors”
section of BMC’s most recent Annual Report on Form 10-K filed with
the SEC on February 27, 2020.
All such factors are difficult to predict and
are beyond BMC’s control. All forward-looking statements
attributable to BMC or persons acting on BMC’s behalf are expressly
qualified in their entirety by the foregoing cautionary statements.
All such statements speak only as of the date made, and BMC
undertakes no obligation to update or revise publicly any
forward-looking statements, whether as a result of new information,
future events or otherwise, unless otherwise required by law.
Investor Relations ContactBMC Stock Holdings,
Inc.Michael Neese(919) 431-1796
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