Building Materials Holding Corporation Reports RecordFirst Quarter Net Income.

Business Editors

SAN FRANCISCO--(BUSINESS WIRE)--April 18, 2000

Building Materials Holding Corporation (Nasdaq: BMHC), a leading provider of building materials and services to professional contractors and builders, today announced for the first quarter ended March 31, 2000, a

net sales increase of 8.3% to $233.5 million from $215.6 million in the same period one year ago. This increase reflects same-store sales growth of 8.2% as well as a 4.7% increase from de novo expansion and acquisitions made during the past year. Prior to a one-time gain of approximately $1.4 million, net of tax, from the sale of the Company's real estate in Beaverton, Oregon, net income was $3.1 million and earnings per share were $0.24 per diluted common share. This is an increase of 23.5% over net income of $2.5 million and an increase of 20.0% over earnings per diluted common share of $0.20 in the first quarter of 1999. Net income including the one time gain was $4.5 million and earnings per share were $0.35 per diluted common share. Weighted average number of diluted common shares for the quarter were 12,793,329 compared to 12,780,483 one year ago.

Gross margin in the first quarter expanded to 25.7% from 25.1% in the corresponding quarter last year, primarily due to the Company's ongoing efforts to increase sales of value-added products including roof and floor trusses, wall panels, pre-hung doors and millwork. Selling, general and administrative expenses were up slightly in the first quarter of 2000 to 22.7% of net sales compared with 22.2% a year ago, reflecting the higher costs associated with value-added products as well as the cost of integrating acquired operations.

"During the quarter BMHC held the official opening for its Sherwood facility, a new full-service center built to serve the greater Portland, Oregon area," said Mr. Robert E. Mellor, President and Chief Executive Officer of Building Materials Holding Corporation. "The new facility enables BMHC to take advantage of the growth opportunities in this area. A central part of our growth strategy is to evaluate and optimize our operations to meet each market's needs. In preparation for the opening of Sherwood, certain facilities in the area were consolidated into the new location. Though we sold our real estate in Beaverton, we are maintaining a presence in that market at a smaller, leased property."

"In addition to the consolidation and de novo expansion that was completed during the quarter, our continued focus on increasing value-added products and services also contributed to our growth. Value-added products and services accounted for 40.4% of total sales during the quarter, compared to 36.2% in the same period last year. We remain confident that our strategy for growth through increasing value-added sales, as well as expansion through acquisitions and construction of new centers in strong, targeted building markets will bring value to our shareholders. As we recently announced, Knipp Brothers Industries, LLC, in which we hold a minority interest, is expanding its framing business to service the growing building market in Southern California."

Building Materials Holding Corporation, through its wholly-owned subsidiaries BMC West and BMHC Framing, is a leading provider of building materials and services to professional new residential, commercial and industrial contractors and builders as well as professional repair and remodel contractors. The Company currently operates 52 building materials centers in California, Colorado, Idaho, Montana, Nevada, Oregon, Texas, Utah, Washington, and Wyoming. In addition, BMHC Framing owns a minority interest in a framing and a distribution business in Arizona, California and Nevada. Additional information on Building Materials Holding Corporation can be found at its website, located at www.bmhc.com.

Certain statements made in this news release constitute "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. Such forward-looking statements involve known and unknown risks, uncertainties and other factors that may cause the actual results, performance or achievements of the Company, or industry results, to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements. Such factors are discussed in detail in Building Materials Holding Corporation's Form 10-K for the fiscal year ended December 31, 1999. Given these uncertainties, prospective investors are cautioned not to place undue reliance on such forward-looking statements. The Company disclaims any obligation to update any such factors or to publicly announce the results of any revisions to any of the forward-looking statements contained in the Annual Report on Form 10-K or this news release.

                BUILDING MATERIALS HOLDING CORPORATION
                  CONSOLIDATED STATEMENTS OF EARNINGS
             (Dollars in Thousands, Except Per Share Data)

                             Three Months Ended
                             ------------------
                            March 31     March 31
                              2000         1999
                           --------      -------

Net Sales                  $233,467     $215,625

Cost of Sales               173,466      161,514
                          ---------    ---------
Gross Profit                 60,001       54,111

Selling, General and
  Administrative Expense     52,905       47,954

Interest Expense              4,373        2,544

Other Income                  4,541          487
                          ---------    ---------
Income Before
  Income Taxes                7,264        4,100

Income Taxes                  2,797        1,579
                         ----------   ----------

Net Income                 $  4,467     $  2,521
                         ==========  ===========

Net Income Per
Diluted Common Share      $    0.35    $    0.20
                         ==========   ==========

Weighted Average Number
of Diluted Common Shares 12,793,329   12,780,483
                         ==========   ==========