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© 2016 BMC. All Rights Reserved.
BMC STOCK HOLDINGS, INC.
INVESTOR PRESENTATION
November 2016
CLICK TO EDIT TITLEDISCLAIMER
2
Forward-Looking Statements
This document 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. Such forward-looking statements include, but are not limited to, statements about the benefits of the
recently completed merger (the “Merger”) of Stock Building Supply Holdings, Inc. (“SBS” or “Legacy SBS”) with Building Materials Holding Corporation (“Legacy BMC”),
including future financial and operating results, plans, objectives, expectations and intentions, and other statements that are not historical facts. 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. Important factors that could cause
actual results to differ materially from those indicated by such forward-looking statements include risks and uncertainties relating to: the risk that the Legacy SBS and
Legacy BMC businesses will not be integrated successfully or that such integration will take longer, be more difficult, time-consuming or costly to accomplish than expected;
the risk that the cost savings and any other synergies from the Merger may not be fully realized or may take longer to realize than expected; disruption from the Merger may
make it more difficult to maintain relationships with customers, employees or suppliers; the diversion of management time on Merger-related issues; general worldwide
economic conditions and related uncertainties; changes in the markets for BMC's business segments; unanticipated downturns in business relationships with customers;
competitive pressures on the Company's sales and pricing; increases in the cost of material, energy and other production costs, or unexpected costs that cannot be
recouped in product pricing; the introduction of competing technologies; unexpected technical or marketing difficulties; unexpected claims, charges, litigation or dispute
resolutions; the effect of changes in governmental regulations; 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 March 15, 2016, and our subsequent quarterly 10-Q filings with the SEC. 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.
Basis of Presentation
The Merger was accounted for as a “reverse acquisition” under the acquisition method of accounting, with Legacy SBS treated as the legal acquirer and Legacy BMC
treated as the acquirer for accounting purposes. As such, the Company has accounted for the Merger by using Legacy BMC historical information and accounting policies
and adding the assets and liabilities of Legacy SBS as of the completion date of the Merger at their estimated fair values. As a result, current year results reported pursuant
to U.S. generally accepted accounting principles (“GAAP”) are not comparable to prior periods.
CLICK TO EDIT TITLENON-GAAP (ADJUSTED) FINANCIAL MEASURES
3
Adjusted net sales, Adjusted gross profit, Adjusted EBITDA and Adjusted net income are intended as supplemental measures of the Company’s performance that are not
required by, or presented in accordance with, GAAP. The Company believes that Adjusted net sales, Adjusted gross profit, Adjusted EBITDA and Adjusted net income
provide useful information to management and investors regarding certain financial and business trends relating to the Company’s financial condition and operating results.
• Adjusted net sales is defined as BMC net sales plus pre-Merger SBS net sales.
• Adjusted gross profit is defined as BMC gross profit plus pre-Merger SBS gross profit and inventory step-up charges.
• Adjusted EBITDA is defined as BMC net income (loss) plus pre-Merger SBS income (loss) from continuing operations, interest expense, income tax expense (benefit),
depreciation and amortization, Merger and integration costs, restructuring expense, inventory step-up charges, non-cash stock compensation expense, Loss on Debt
Extinguishment, headquarters relocation expense, insurance deductible reserve adjustment and fire casualty loss, loss portfolio transfer, acquisition costs and other items
and impairment of assets.
• Adjusted EBITDA margin is defined as Adjusted EBITDA divided by net sales or Adjusted net sales.
• Adjusted net income is defined as BMC net income plus pre-Merger SBS income from continuing operations, impairment of assets, Merger-related costs, non-cash stock
compensation expense, Loss on Debt Extinguishment, headquarters relocation expense, insurance deductible reserve adjustment and other items, and after tax effecting
those items.
Company management uses Adjusted net sales, Adjusted gross profit, Adjusted EBITDA and Adjusted net income for trend analyses, for purposes of determining
management incentive compensation and for budgeting and planning purposes. Adjusted net sales, Adjusted gross profit and Adjusted EBITDA are used in monthly
financial reports prepared for management and the board of directors. The Company believes that the use of Adjusted net sales, Adjusted gross profit, Adjusted EBITDA
and Adjusted net income provide additional tools for investors to use in evaluating ongoing operating results and trends and in comparing the Company’s financial
measures with other distribution and retail companies, which may present similar non-GAAP financial measures to investors. However, the Company’s calculation of
Adjusted net sales, Adjusted gross profit, Adjusted EBITDA and Adjusted net income are not necessarily comparable to similarly titled measures reported by other
companies. Company management does not consider Adjusted net sales, Adjusted gross profit, Adjusted EBITDA and Adjusted net income in isolation or as alternatives to
financial measures determined in accordance with GAAP. The principal limitation of Adjusted EBITDA and Adjusted net income is that they exclude significant expenses
and income that are required by GAAP to be recorded in the Company’s financial statements. Some of these limitations are: (i) Adjusted EBITDA and Adjusted net income
do not reflect changes in, or cash requirements for, working capital needs; (ii) Adjusted EBITDA does not reflect interest expense, or the requirements necessary to service
interest or principal payments on debt; (iii) Adjusted EBITDA does not reflect income tax expenses or the cash requirements to pay taxes; (iv) Adjusted net income and
Adjusted EBITDA do not reflect historical cash expenditures or future requirements for capital expenditures or contractual commitments; (v) although depreciation and
amortization charges are non-cash charges, the assets being depreciated and amortized will often have to be replaced in the future and Adjusted EBITDA and Adjusted net
income do not reflect any cash requirements for such replacements and (vi) Adjusted net income and Adjusted EBITDA do not consider the potentially dilutive impact of
issuing non-cash stock-based compensation. In order to compensate for these limitations, management presents Adjusted net sales, Adjusted gross profit, Adjusted
EBITDA and Adjusted net income in conjunction with GAAP results. Readers should review the reconciliations of net sales to Adjusted net sales, gross profit to Adjusted
gross profit, net income (loss) to Adjusted EBITDA and Adjusted net income, included in the Appendix, and should not rely on any single financial measure to evaluate the
Company’s business.
© 2016 BMC. All Rights Reserved.
COMPANY OVERVIEW1
CLICK TO EDIT TITLEBMC COMPANY SNAPSHOT
NASDAQ LISTED: BMCH
5
LTM Q3 2016 Product & Service Mix (2) A leading national building solutions provider with $3.1
billion of Adjusted net sales(1) and $187.3 million of Adjusted
EBITDA(1) for the last twelve months (“LTM”) ended
September 2016
Locations in 17 states representing 63% of 2015 single-
family building permits
Significant market presence in 42 attractive metropolitan
areas
Focus on differentiated, value-added products and services
that meet critical industry needs
Proven growth track record (~29% Adjusted EBITDA CAGR
since 2013) with significant future opportunities as housing
market expands
Design
Services
Component
Manufacturing
Millwork
Manufacturing
Turnkey
Solutions
90 Distribution
Yards
34 Truss & Structures
Operations
47 Millwork
Operations
Installation
Services
Design Centers &
Showrooms
eBusiness
Platform
Logistics, Services
& eCommerce
Distribution
Services
Structural
Components,
15%
Lumber &
Sheet Goods,
30%
Millwork,
Windows
& Doors,
29%
Other Bldg.
Products &
Services,
26%
1. See Non-GAAP (Adjusted) Financial Measures page of this presentation for definition of Adjusted net sales and Adjusted EBITDA.
2. LTM Q3 2016 Product and Service Mix includes Adjusted net sales for Q4 2015.
CLICK TO EDIT TITLE
-
1,000
2,000
3,000
4,000
A MARKET LEADER WITH NATIONAL SCALE AND LOCAL
EXPERTISE IN A HIGHLY FRAGMENTED INDUSTRY
6
Lumber Yards &
Building Materials
Dealers
33%Home Centers
58%
Hardware
Stores
9%
($ millions)
BMC
Top 10 Pro Sales 2015
(2)Building Materials Industry Sales by Distribution
Channel
(1)
Approximately $290 billion of U.S. retail building
materials sales in 2015
Lumber and Building Materials (“LBM”) dealers
primarily serve professional contractors, homebuilders
and tradespersons
The median revenue for top 100 pro dealers is $114
million
BMC is a leading ‘Direct-to-Jobsite’ distributor and
solutions provider in the highly fragmented U.S. LBM
industry
6,0002
1. Source: U.S. Census Bureau 2012 NAICS Survey and 2015 NAICS Annual Retail Trade Report.
2. Source: 2016 ProSales 100 rankings of pro dealers with manufacturing capabilities; chart not to scale.
CLICK TO EDIT TITLESTRATEGIC FOOTPRINT IN HIGHLY ATTRACTIVE, LONG-TERM
GROWTH MARKETS
7
Mid & South
Atlantic
28%
West South
Central
33%
Mountain
19%
Pacific
20%
YTD Sales by U.S. Census DivisionCompany Footprint
FL
NM
TX
MT
COUT
ID
NV
WA
CA
PA
VA
AR
GA
90
Distribution locations
in 17 states
34
Truss and structures
operations
47
Millwork
operations
63%
of 2015 single-family
building permits
CLICK TO EDIT TITLE
Average
Cost
Share of
Cost
Building Permit Fees $3,601 1.2%
Impact Fee $1,742 0.6%
Water & Sewer Fees Inspections $4,191 1.4%
Architecture, Engineering $4,583 1.6%
Excavation, Foundation & Backfill $32,576 11.3%
Framing & Trusses $48,524 16.8%
Sheathings $1,238 0.5%
Siding $20,717 7.2%
Roofing $10,069 3.5%
Windows & Doors $12,127 4.2%
Plumbing $12,302 4.3%
Electrical $12,181 4.2%
HVAC $12,623 4.4%
Insulation $6,467 2.2%
Drywall $11,744 4.1%
Interior Trim, Doors & Hardware $12,409 4.3%
Painting $9,002 3.1%
Lighting $3,517 1.2%
Cabinets & Countertops $16,056 5.5%
Appliances $4,463 1.5%
Flooring $13,367 4.6%
Plumbing Fixtures $4,465 1.5%
Outdoor Structures (deck, patio) $4,349 1.5%
Landscaping $6,156 2.1%
Driveway $6,240 2.1%
Other $14,706 5.1%
Total $289,415 100.0%
Source: 2015 NAHB Cost of Construction Survey.
EXTENSIVE PRODUCT AND SERVICE OFFERING
PRODUCT PORTFOLIO REPRESENTS >50% OF COST FOR A TYPICAL NEW HOME
8
CLICK TO EDIT TITLEVALUE-ADDED SERVICES SUPPORT JOB SITE EXCELLENCE
ONE-STEP VALUE CHAIN – SHOWROOM TO JOB-SITE…CONTRACTOR TO CLIENT
9
Providing differentiated solutions and
proprietary services that support our
unique value proposition
Driving enhanced productivity and
customer satisfaction
One-step distributor for premier
building products manufacturers;
critical link in building supply chain
for customers
Keen understanding of unique
construction codes, regional product
preferences and local distribution
infrastructure
Design and
showroom
services
Project
planning
eBusiness
platform
Custom
millwork,
doors,
windows
Ready-Frame ©
and trusses
Job-site
distribution
services
Installation
management
Unique
Service
Platform
CLICK TO EDIT TITLE
Diverse base of customers ranging from well-
known national builders to small regional and
local players
No single customer greater than 5% of total
Adjusted net sales (1)
Enhanced capabilities to serve attractive
professional repair and remodeling contractor
segment
Select Customers
Multi-Family &
Commercial Contractors
11%
Repair & Remodel
Contractors
12%
Single-Family
Homebuilders
77%
National Homebuilders Regional Homebuilders Multi-family (millwork)
2015 Customer Mix (2)
1. See Non-GAAP (Adjusted) Financial Measures page of this presentation for definition of Adjusted net sales.
2. 2015 customer mix based on Adjusted net sales.
HIGHLY DIVERSIFIED AND GROWING CUSTOMER BASE
10
CLICK TO EDIT TITLE
BMC Provides Strategic Go-to-Market Options for Suppliers
Diverse base of leading building products manufacturers
One-step value-added distributor providing direct access to thousands of customers
DIVERSITY OF SUPPLIER BASE
STRATEGIC AGREEMENTS IN PLACE WITH LEADING BUILDING PRODUCT SUPPLIERS
11
CLICK TO EDIT TITLE
Combined executive leadership team and operating structure in place
$10 million annual savings from executive and other redundant positions;
implementation of casualty insurance and employee benefit programs
Limited branch overlap reduces risk of customer disruption / revenue loss
Incremental opportunities from best practices:
Millwork and components manufacturing
Ready-Frame
Logistics, design and eCommerce capabilities
Working capital optimization
$20 to $25 million of integration costs expected over 2016 / 2017, primarily
related to associate severance, retention and system integration costs
Synergy Category Description of Benefit
Q4 2017 Annual
Run-Rate Targets (1)
Sales, General &
Administrative and
Other Costs
Rationalization of corporate and branch support costs
Common casualty insurance and employee benefit programs
Fleet and indirect spend programs
Select consolidation of branches in overlapping markets
$18 to $22m
Sourcing and Supply
Chain (Cost of Goods
Sold)
Alignment of suppliers to optimize purchase quantities
Extend ‘one-step’ supplier sourcing relationships across combined company
Improve supplier rebates and discounts by leveraging combined larger purchase
volume
$22 to $28m
Total $40 to $50m
Targeted Run-Rate Cost Savings (1) Moving Quickly to Capture Value
Q3 16 Q4 17
$28m
$40 to $50m
1. Estimated run-rate cost savings represents annualized savings at the end of each period presented.
TIGHTLY MANAGED INTEGRATION PLAN
TO EXTRACT SYNERGIES AND LEVERAGE UNIQUE CAPABILITIES
12
© 2016 BMC. All Rights Reserved.
FOCUSED GROWTH STRATEGY2
CLICK TO EDIT TITLE
Favorable Foundational Industry Trends
Expand Value-Added Products & Services
Expand Wallet Share in Core Markets
Pursue Strategic Profitable Expansions
Merger Benefits
National scale
Service capabilities meeting
industry demands
Attractive geographies
Proven leadership & deep talent
pool
Solid financial position
Significant synergies
Creating a Best-in-Class Building Solutions Platform
LEVERAGING STRONG FOUNDATION AND CORE CAPABILITIES
TO ACCELERATE PROFITABLE GROWTH
14
CLICK TO EDIT TITLE
0
400
800
1,200
1,600
2,000
1959 1966 1973 1980 1987 1994 2001 2008 2015
U.S. Single-Family Starts
Significant Room to Recover from Today’s Levels
(ths)
U.S. S-F Starts Remain Well Below 50 Year Average (1) Poised to Benefit from the Housing Recovery
Adjusted Net Sales per U.S. S-F Housing Start (2)
Macro conditions support housing market growth
Population & employment growth
Consumer & builder confidence
Credit availability
Affordability
Government policy
50 year
average
$3,447 $3,419
$3,700
$3,864
$3,920
2011 2012 2013 2014 2015
1. Source: United States Census Bureau.
2. See Non-GAAP (Adjusted) Financial Measures page of this presentation for definition of Adjusted net sales; 2011 to 2014 Adjusted net sales per U.S. S-F Housing Starts calculated on a
constant-dollar basis using 2015 annual average commodity prices.
BENEFITTING FROM FAVORABLE INDUSTRY TRENDS
15
CLICK TO EDIT TITLE
Other Bldg.
Products &
Services
26%
Lumber & Sheet
Goods
35%Millwork,
Doors &
Windows
25%
Structural
Components
14%
Structural
Components,
15%
Lumber & Sheet
Goods, 30%Millwork,
Doors &
Windows,
29%
Other
Bldg.
Products &
Services,
26%
Includes engineered wood products,
trusses and wall panels
Custom designed and built to reduce job-
site labor, waste and cycle times
Investing in equipment and automation to
improve manufacturing productivity
Capacity expansion in Atlanta, Austin,
Raleigh and Salt Lake City to capture
greater share of growing demand
Proprietary job-site framing solution for
constructing roof and floor trusses
Designed to reduce builder cycle time, labor
requirement and material waste
LTM Q3 2016 sales of ReadyFrame were
$91 million
Currently deployed in all of the company’s
25 major markets
Includes millwork, interior doors, cabinets
and flooring
Developing web-based catalogs and
configuration tools to showcase offerings
Acquired custom millwork manufacturer in
Atlanta with potential to leverage unique
capabilities across multiple markets
Investing in capacity, showrooms and sales
Ready-Frame® (1)Structural Components Windows, Doors & Millwork
Product & Service Mix Evolution LTM Q3 2016 Growth by Product Category
1. Ready-Frame® sales are divided between the Lumber & Sheet Goods and Structural Components product categories.
Relative GM %
Gro
w
th
Rat
e
Low Mid High
0%
4%
8%
12%
16%
20%
Structural
Components
Millwork, Doors
& Windows
Lumber & Sheet
Goods
Other Bldg.
Products &
Services
2013
LTM Q3 2016
EXPANSION OF PRODUCT & SERVICE OFFERING DRIVING SHARE
GAINS AND IMPROVED MIX
16
CLICK TO EDIT TITLEREADY-FRAME®
MEETING INDUSTRY NEEDS; FIRST-MOVER POSITION FOR FUTURE OF FRAMING
17
Proprietary job-site framing solution for constructing roof
and floor trusses
Designed to reduce builder cycle time, labor requirement
and material waste
Applicable to single-family, custom, multi-family, and
commercial construction
Enables customers to frame 20-30% more houses in same
time period as stick framing
Whole house, precision pre-cut package
One price per package
Smart bundled (top piece off delivery is first used for
framing)
No cutting lumber, no last minute orders, no errors and
no punch lists
Take off guaranteed to the 1/16”
Green solution with minimal to no on-site waste and
disposal costs
LTM Q316 sales have grown 38% to $91 million vs. LTM
Q315
55% of Seattle market LBM business after 3 years
Opportunity to transition commodity lumber sales to value-
added solutions and grow share
Less Risk. Less Labor. Less Cost.
READY-FRAME video:
https://www.youtube.com/watch?v=REv665u2QRI
CLICK TO EDIT TITLEREADY-FRAME®
PROVEN TRACK RECORD OF SHARE GAINS; POISED TO DRIVE FUTURE GROWTH
18
OpportunityHistorical Sales Trend
Proven ability to reduce builder cycle time, labor
requirement and material waste
No other market participant provides a comparable solution
Provides a truly differentiated offering that creates “sticky”
customer relationships
Building on success of offering in legacy markets, rolled out
Ready-Frame® in 9 new markets during 2016; Now
available in all 25 major markets
Ready-Frame® location
$29
$60
$70
$91
$0
$10
$20
$30
$40
$50
$60
$70
$80
$90
FY 2013 FY 2014 FY 2015 LTM Q3 2016
($m)
COUT
NV
WA
CA
Washington, DC
MT
ID
NM
TX
GA
NC
PA
CLICK TO EDIT TITLEBMC’S LEAN EBUSINESS EVOLUTION
BUILDING A TECHNOLOGY PLATFORM TO ENABLE AND LEVERAGE PROFITABLE
GROWTH
19
LEAN eBusiness Platform Driving Improved Operating Performance
2010 2015
6.6%
5.1%
2010 2015
Shipping & Handling Costs (% Net Sales) (2)On-Time In-Full Delivery Rates (2)
<75%
>92%
1. Reduced product costs from Photo Proof of Delivery, which has reduced Claims, including Returns, Damages and Missing Product
2. Transactional capabilities available in 14 markets; rollout expected to continue following ERP conversions.
Single
ERP
Expected by
YE2017
Logistics Solutions
↑ Driver Productivity
↑ Customer Satisfaction
↑ Asset Utilization
↓ Product Costs1
E-Commerce
↑ Ease of Accessibility
↑ Customer Productivity
↑ Associate Productivity
↑ New Customer Leads
Installation Services
↑ Resource Management
↑ Communication & Document
Management
↑ Completion Performance
Integrating Value-Added Solutions Around a Single ERP
CLICK TO EDIT TITLE24X7 TRANSACTIONAL FRONT-END TO ERP
ENHANCES CUSTOMER EXPERIENCE / PRODUCTIVITY
20
Easy, Fast, Convenient
Intuitive interface
Accessible 24x7
Mobile based platform
Full breadth of products
Customer specific pricing
Product availability and lead
times
Professional Resources
Robust building science content:
articles, videos, project
management tools
“How-to” articles
Product search with photos,
specs, comparison tools
Idea gallery with room scenes
Interactive design tools
Work More Efficiently
Order Management Tools: place
orders, check order status, create
reorder lists
Account management Tools: Pay
invoices, assign users and admin
permissions, view history
Configure custom millwork
Manage business digitally
Introducing a Brand New Tool for our Customer’s Belt
CLICK TO EDIT TITLEPOSITIONED TO UTILIZE M&A TO DRIVE FUTURE GROWTH
FRAGMENTED MARKET COMBINED WITH PROVEN AND DISCIPLINED M&A PROCESS
Fragmentation Presents Significant Consolidation Opportunities
5.3x (2)
2.0x (2)
Disciplined targeting, negotiating and execution capability
has yielded highly successful acquisition track record
Expanded into new markets
Enhanced existing network density
Augmented product offering
Efficiently and effectively extracted synergies
Leverage profile provides financial flexibility to pursue
accretive M&A
Builders FirstSource 6%
BMC 3%
84 Lumber 3%
US LBM 3%
Carter Lumber 1%
Others 84%
$6,067
$2,801 $2,504 $2,401
$1,109
$417
($m)
M&A OpportunityLBM Dealer Market Fragmentation (1)
LBM Dealers 2015 Total Net Sales (1)
Average of Top
100 LBM Dealers
Public LBM Dealers Leverage (2) Profile
1. Source: 2015 ProSales 100 rankings of pro dealers with manufacturing capabilities and actual Adjusted net sales for BMC.
2. Leverage for BLDR is the ratio of Adjusted net debt at September 30, 2016 to Adjusted EBITDA for the twelve months ended September 30, 2016. BMC’s calculation of leverage is the
ratio of Long Term Debt to LTM Adjusted EBITDA at September 30, 2016. Neither method are necessarily comparable to similarly titled measures reported by other companies.
21
CLICK TO EDIT TITLEENTERING NEW MARKETS EFFICIENTLY
PROVEN ACQUISITION CAPABILITY
22
Serves central and coastal Georgia and the north
coast of Florida
7 lumberyards, 1 truss plant, and 1 millwork
manufacturing plant
Customer mix primarily single-family custom
homebuilders and professional remodeling
contractor
Net sales of $134.2 million for its fiscal year ended
March 31, 2015
Serves the greater Atlanta metropolitan area
Manufacturer and distributor of custom millwork
products
Serves various size customers including
production and custom builders and professional
remodeling contractors
Net sales of $77.9 million for its fiscal year ended
December 31, 2014
Adjacency of existing and acquired locations adds to
local scale and creates opportunity to leverage
capabilities and fixed costs
Rigorous integration process to capture value, with
over 70 bolt-on acquisitions completed
Industry remains extremely fragmented, allowing for
robust pipeline of opportunities
Acquired location
Existing location
VNS Corporation (VNS), May 2015
Robert Bowden, Inc. (RBI), September 2015
1. Net sales includes pre-acquisition results.
© 2016 BMC. All Rights Reserved.
FINANCIAL OVERVIEW3
CLICK TO EDIT TITLE
$93
$114
$130
$187
2013 2014 2015 LTM Q3 16
$2,407
$2,607
$2,801
$3,074
2013 2014 2015 LTM Q3 16
$531
$603
$670
$740
2013 2014 2015 LTM Q3 16
CAGR: 11.5%
PROVEN TRACK RECORD OF GROWTH
24
Adjusted net sales(1) CAGR(2) of 11.5%
from 2013 to Q3 2016 compared to
single-family starts CAGR of 7.9%
LTM Adjusted gross margin(1)
improvement of 200 basis points since
2013
Adjusted EBITDA(1) CAGR of 29.2%
from 2013 to Q3 2016 driven by
operating leverage and strategic growth
initiatives
Adjusted net sales (1) ($m)
Adjusted gross profit (1) ($m)
Adjusted EBITDA (1) ($m)
1. See Non-GAAP (Adjusted) Financial Measures page of this presentation for definition of Adjusted net sales, Adjusted gross profit and Adjusted EBITDA.
2. Adjusted net sales CAGR calculated on a constant-dollar basis using 2015 annual average commodity prices.
Performance Highlights
CAGR: 12.8%
CAGR: 29.2%
CLICK TO EDIT TITLEQ3 2016 / YTD SEP 30, 2016 ADJUSTED NET SALES BRIDGE
25
Q3 16 Adjusted net sales (1) ($m) bridge
Q3 2016 Net sales up 6.0% compared to Q3 2015
Adjusted net sales(1)
Organic sales volume growth of 1.6%
RBI acquisition contributed growth of 2.0%
Commodity inflation increased growth rate by 2.4%
1. See Non-GAAP (Adjusted) Financial Measures page of this presentation for definition of Adjusted net sales.
YTD Q3 2016 Net sales up 13.2% compared to YTD
Q3 2015 Adjusted net sales(1)
Organic volume growth of 7.1% despite labor-
constrained construction markets
VNS and RBI acquisitions contributed growth of
5.7%
Commodity deflation increased growth rate by 0.4%
$821.2$775.0
$18.7
$11.7 $15.8
Q3 2015 Volume Acquisitions Inflation Q3 2016
$2,072.8
$147.3
$118.1 $8.0 $2,346.2
YTD Q3 2015 Volume Acquisitions Inflation YTD Q3 2016
YTD Adjusted net sales (1) ($m) bridge
CLICK TO EDIT TITLEQ3 2016 FINANCIA RESULTS
26
Q3 2016 Financial Performance Q3 2016 Commentary
Total Q3 2016 net sales growth of 6.0%, compared to Q3
2015 Adjusted net sales(1)
Millworks, Doors & Windows up 9.7%
Lumber and sheet good price inflation impacted sales by
2.4%
Q3 2016 Ready-Frame® sales growth of ~43% to
$28.6m, compared to Q3 2015
Primarily driven by increased penetration in the
company’s existing Ready-Frame® market footprint
Adjusted EBITDA(1) margin improvement of 180 basis points
to 7.1% compared to Q3 2015
Capex, including capital leases, of $6.6m primarily to fund
purchases of vehicles and equipment
Operating cash flow increased to $24.4m for Q3 2016 and to
$63.8m YTD
$28 million of annual run-rate synergies implemented; To
date, approximately 60% relates to SG&A cost reductions
and 40% relate to sourcing (cost of sales)
1. See Non-GAAP (Adjusted) Financial Measures pages of this presentation for definition of Adjusted Net Sales, Adjusted Gross Profit, Adjusted EBITDA , Adjusted Net Income and Adjusted EPS.
($ in millions except per share amounts)
(Unaudited) Q3 15 Q3 16 % Chg
Structural Components $119.9 $126.8 5.8%
Lumber & Lumber Sheet Goods 238.6 244.9 2.6%
Millwork, Doors & Windows 212.7 233.4 9.7%
Other Bldg Products & Services 203.8 216.1 6.0%
Total Adjusted Net Sales
(1)
$775.0 $821.2 6.0%
Adjusted Gross Profit
(1)
$186.2 $203.0 9.0%
% margin 24.0% 24.7%
Adjusted EBITDA
(1)
$41.0 $58.2 41.9%
% margin 5.3% 7.1%
Adjusted Net Income
(1)
$15.1 $21.3
Adjusted EPS $0.23 $0.32
CLICK TO EDIT TITLESTRONG BALANCE SHEET TO SUPPORT GROWTH
FLEXIBILITY FOR CONTINUED INVESTMENTS AND DISCIPLINED, ACCRETIVE M&A
27
1. See Non-GAAP (Adjusted) Financial Measures page of this presentation for definition of Adjusted EBITDA; includes pre-acquisition results for VNS and RBI.
2. With transactions completed in September 2016, these new 5.5% Senior Secured Notes due 2024 replaced the Company’s 9.0% Senior Secured Notes due 2018
Improving Adjusted EBITDA trends
Working capital usage ~12% of sales with improvement
opportunity through Merger
Full Year 2016 CAPEX expected to be $50 to $60
million
2016 depreciation expense expected to be $45 to $50
million
2016 amortization expense expected to be $20 to $22
million
Achieved significant interest expense savings from
September 2016 refinancing
Targeting $40 - $50 million of annual run rate cost
synergies by the end of 2017
Attractive Cash Flow Dynamics
9/30/2016 Long-Term Debt
$372.4 million
Long-Term Debt/ LTM 9/30/2016
Adjusted EBITDA (1)
2.0x
$375 million revolving ABL facility with extended
maturity; $27.0 million drawn at 9/30/16
$350 million 5.5% Senior Secured Notes
maturing 2024 (2)
Longer-term leverage target of 2.0x to 3.0x
with flexibility to make strategic investments
Balance Sheet Positioned to Invest
CLICK TO EDIT TITLESOLID BALANCE SHEET AND AMPLE LIQUIDITY SUPPORT
BUSINESS STRATEGY AND INITIATIVES
28
Selectively Pursue
Strategic Acquisitions
Ample Liquidity
Improve Growth and
Margin Profile
Increase Productivity and
Reduce Expenses
Conservative
Capital Structure
Grow scale and expand product and service offerings to drive
improved mix and margin expansion
Open new locations in selected markets, relocate facilities as
needed, and increase capacity at existing facilities
Use technology to improve customer service and reduce waste
Integrate and upgrade existing ERP platforms to standardize
processes
Continue to develop talent training program
Modest Total Leverage of 2.0x as of 9/30/20161
Longer-term Total Leverage target of 2.0x to 3.0x
Consider acquisition opportunities that enhance margin profile
and through the cycle performance
Previous acquisitions include Robert Bowden Inc. (September
2015) and VNS Corporation (May 2015)
$375 million ABL Revolving Credit Facility due 2020
$268 million of availability for seasonal working capital needs
1Total Leverage is calculated as the ratio of Long-Term Debt to LTM Adjusted EBITDA at 9/30/16
CLICK TO EDIT TITLEBMC INVESTMENT HIGHLIGHTS
A MARKET LEADER FOR GROWTH
29
Market leader with
national scale and
local expertise
Strategic footprint in
highly attractive
long-term growth
markets
Extensive value-
added product and
service capabilities
support share gains
Strong balance sheet
that supports growth
Significant synergies
being realized from
Legacy BMC and
SBS combination
Well positioned to
utilize M&A to drive
future growth
Highly fragmented
industry poised for
continued recovery
Low cost, high
service integrated
supply chain and
diverse customer
base
© 2016 BMC. All Rights Reserved.
APPENDIX
BMC STOCK HOLDINGS REPORTED (GAAP) INCOME STATEMENT
($ths) FY 2013 FY 2014 Q1 15 Q2 15 Q3 15 Q4 15 FY 2015 Q1 16 Q2 16 Q3 16 LTM Q3 16
Net sales 1,210,156 1,311,498 292,826 357,287 416,471 510,162 1,576,746 727,418 797,547 821,204 2,856,331
Cost of sales 953,609 1,016,424 226,129 273,469 319,370 396,368 1,215,336 560,801 605,892 618,238 2,181,299
Gross profit 256,547 295,074 66,697 83,818 97,101 113,794 361,410 166,617 191,655 202,966 675,032
SG&A 200,588 229,316 62,861 67,503 76,436 100,043 306,843 141,781 139,897 149,498 531,219
Depreciation expense 9,168 11,492 3,444 3,262 3,549 5,445 15,700 8,792 9,290 9,784 33,311
Amortization expense 1,310 - - 264 735 2,627 3,626 5,245 5,288 5,349 18,509
Impairment of assets 73 134 - - 82 (82) - 11,883 - - 11,801
Merger and integration costs - - - 3,042 998 18,953 22,993 2,836 3,597 4,655 30,041
Income (loss) from operations 45,408 54,132 392 9,747 15,301 (13,192) 12,248 (3,920) 33,583 33,680 50,151
Interest expense (18,786) (27,090) (6,730) (6,730) (7,038) (7,054) (27,552) (8,231) (8,121) (7,668) (31,074)
Loss on debt extinguishment - - - - - - - - - (12,529) (12,529)
Other income (expense), net 1,306 1,413 669 347 (48) (184) 784 1,455 1,411 735 3,417
Income (loss) before income
taxes
27,928 28,455 (5,669) 3,364 8,215 (20,430) (14,520) (10,696) 26,873 14,218 9,965
Income tax expense (benefit) 6,273 (65,577) (2,108) 1,239 4,168 (12,988) (9,689) (3,940) 8,891 4,982 (3,055)
Net income (loss) 21,655 94,032 (3,561) 2,125 4,047 (7,442) (4,831) (6,756) 17,982 9,236 13,020 31
BMC STOCK HOLDINGS RECONCILIATION OF NON-GAAP ITEMS
ADJUSTED NET SALES, ADJUSTED GROSS PROFIT
($ths) FY 2013 FY 2014 Q1 15 Q2 15 Q3 15 Q4 15 FY 2015 Q1 16 Q2 16 Q3 16 LTM Q3 16
Net sales 1,210,156 1,311,498 292,826 357,287 416,471 510,162 1,576,746 727,418 797,547 821,204 2,856,331
Pre-merger SBS net sales 1,197,037 1,295,716 297,620 350,065 358,540 217,650 1,223,875 - - - 217,650
Adjusted net sales 2,407,193 2,607,214 590,446 707,352 775,011 727,812 2,800,621 727,418 797,547 821,204 3,073,981
Structural components 347,689 380,065 86,010 106,859 119,918 107,514 420,301 110,381 123,234 126,818 467,947
Lumber & sheet goods 848,202 875,725 192,297 224,703 238,580 208,899 864,479 209,302 238,463 244,885 901,549
Millwork, doors & windows 597,805 689,532 168,300 195,796 212,685 216,958 793,739 217,899 229,099 233,418 897,374
Other building prods & svcs 613,497 661,892 143,839 179,994 203,828 194,441 722,102 189,836 206,751 216,083 807,111
Adjusted net sales by product
category
2,407,193 2,607,214 590,446 707,352 775,011 727,812 2,800,621 727,418 797,547 821,204 3,073,981
Gross profit 256,547 295,074 66,697 83,818 97,101 113,794 361,410 166,617 191,655 202,966 675,032
Pre-merger SBS gross profit 274,403 307,654 71,321 86,411 89,139 51,522 298,393 - - - 51,522
Inventory step-up charges - - - - - 10,285 10,285 2,884 - - 13,169
Adjusted gross profit 530,950 602,728 138,018 170,229 186,240 175,601 670,088 169,501 191,655 202,966 739,723
Adjusted gross margin % 22.1% 23.1% 23.4% 24.1% 24.0% 24.1% 23.9% 23.3% 24.0% 24.7% 24.1%
32
BMC STOCK HOLDINGS RECONCILIATION OF NON-GAAP ITEMS
ADJUSTED EBITDA
($ths) FY 2013 FY 2014 Q1 15 Q2 15 Q3 15 Q4 15 FY 2015 Q1 16 Q2 16 Q3 16 LTM Q3 16
Net income (loss) 21,655 94,032 (3,561) 2,125 4,047 (7,442) (4,831) (6,756) 17,982 9,236 13,020
Pre-merger SBS income (loss)
from continuing operations
(5,036) 10,087 1,851 2,531 6,024 (3,564) 6,842 - - - (3,564)
Interest expense 22,579 29,774 7,441 7,407 7,783 7,558 30,189 8,231 8,121 7,668 31,578
Income tax expense (benefit) 9,147 (59,237) (5,699) 3,676 7,188 (15,139) (9,974) (3,940) 8,891 4,982 (5,206)
Depreciation and amortization 25,827 28,799 8,344 8,678 9,643 12,586 39,251 16,682 17,139 17,276 63,683
Merger and integration costs - - 207 6,304 2,181 29,306 37,998 2,836 3,597 4,655 40,394
Restructuring expense 141 73 192 205 (14) - 383 - - - -
Inventory step-up charges - - - - - 10,285 10,285 2,884 - - 13,169
Non-cash stock compensation
expense
3,474 6,079 1,518 1,529 1,524 881 5,452 1,889 1,804 1,851 6,425
Loss on debt extinguishment - - - - - - - - - 12,529 12,529
Headquarters relocation - 2,054 1,377 1,075 359 1,054 3,865 - - - 1,054
Insurance deductible reserve adj.
and fire casualty loss
1,772 669 378 (13) 694 1,967 3,026 - - - 1,967
Loss on portfolio transfer - - 2,826 - - - 2,826 - - - -
Acquisition costs and other items 12,995 1,828 711 1,601 1,578 326 4,216 - - - 326
Impairment of assets - - - - - - - 11,883 - - 11,883
Adjusted EBITDA 92,554 114,158 15,585 35,118 41,007 37,818 129,528 33,709 57,534 58,197 187,258
Adjusted EBITDA margin 3.8% 4.4% 2.6% 5.0% 5.3% 5.2% 4.6% 4.6% 7.2% 7.1% 6.1%
33
BMC STOCK HOLDINGS RECONCILIATION OF NON-GAAP ITEMS
ADJUSTED NET INCOME AND ADJUSTED EARNINGS PER SHARE
(in $ths, except per share amounts) Q3 2015 Q3 2016
Net income 4,047 9,236
Pre-merger SBS income from continuing operations 6,024 -
Impairment of Assets 82 -
Merger and integration costs 2,181 4,655
Non-cash stock compensation expense 1,524 1,851
Loss on debt extinguishment - 12,529
Headquarters relocation 359 -
Insurance deductible reserve adjustment 694 -
Other items 1,482 -
Tax effect of adjustments to net income (1,297) (6,927)
Adjusted net income 15,096 21,344
Diluted weighted avg. shares used to calculate Adjusted net income per diluted share 65,712 67,085
Adjusted net income per diluted share $0.23 $0.32
34
SUMMARY OF PRE-MERGER SBS INCOME STATEMENT
($ths) FY 2013 FY 2014 Q1 2015 Q2 2015 Q3 2015 Oct / Nov YTD Nov 2015
Net sales 1,197,037 1,295,716 297,620 350,065 358,540 217,650 1,223,875
Cost of sales 922,634 988,062 226,299 263,654 269,401 166,128 925,482
Gross profit 274,403 307,654 71,321 86,411 89,139 51,522 298,393
SG&A 254,935 279,717 69,925 74,655 75,286 44,456 264,322
Depreciation expense 5,890 6,731 2,075 2,243 2,493 1,684 8,495
Amortization expense 2,236 2,253 563 597 596 398 2,154
Impairment of assets held for sale 432 48 - - - - -
Merger and integration costs - - 207 3,262 1,183 10,353 15,005
Public offering transaction-related
costs
10,008 508 - - - - -
Restructuring expense 141 73 192 205 (14) - 383
Income (loss) from continuing
operations
761 18,324 (1,641) 5,449 9,595 (5,369) 8,034
Interest expense (3,793) (2,684) (711) (677) (745) (504) (2,637)
Other income, net 870 787 612 196 194 158 1,160
(Loss) income before income taxes (2,162) 16,427 (1,740) 4,968 9,044 (5,715) 6,557
Income tax expense (benefit) 2,874 6,340 (3,591) 2,437 3,020 (2,151) (285)
Income from discontinued
operations
401 332 8 39 7 - 54
Net (loss) income (4,635) 10,419 1,859 2,570 6,031 (3,564) 6,896
35