<PAGE>
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
X Quarterly report under Section 13 or 15(d) of the Securities Exchange Act
- - of 1934
For the quarterly period ended March 31, 1999 or
--------------
__ Transition report pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934
For the transition period from ________________ to ________________
Commission file number 0-19335
BUILDING MATERIALS HOLDING CORPORATION
(Parent of BMC West Corporation)
Delaware 91-1834269
(State of other jurisdiction of (IRS Employer
incorporation or organization) Identification No.)
Building Materials Holding Corporation
One Market Plaza, Steuart Tower, Ste 2650, San Francisco, CA 94105
Telephone: (208)331-4410 or (415)227-1650
Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 month (or for such shorter period that the registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days.
Yes X No
---- ----
<TABLE>
<CAPTION>
CLASS Shares Outstanding as
of May 1, 1999:
<S> <C>
Common stock $.001 par value 12,666,900
----------
</TABLE>
1
<PAGE>
BUILDING MATERIALS HOLDING CORPORATION
INDEX
<TABLE>
<CAPTION>
Page
Number
------
<S> <C>
PART I -- FINANCIAL INFORMATION
3
Item 1 - Financial Statements
Condensed Consolidated Statements of Income for the three months ended March 31, 1999
and 1998 4
Condensed Consolidated Balance Sheets as of March 31, 1999 and December 31, 1998
5
Condensed Consolidated Statements of Cash Flows for the three months ended March 31,
1999 and 1998 6
Notes to Condensed Consolidated Financial Statements 7
Item 2 - Management's Discussion and Analysis of Financial Condition and Results of
Operations 10
PART II -- OTHER INFORMATION
Item 1 - Legal Proceedings 16
Item 4 - Submission of Matters to a Vote of Security Holders
16
Item 5 - Other Information 17
Item 6 - Exhibits and Reports on Form 8-K 17
SIGNATURES 18
INDEX TO EXHIBITS 19
EXHIBITS 20
</TABLE>
2
<PAGE>
PART I - FINANCIAL INFORMATION
The condensed consolidated financial statements included herein have been
prepared by Building Materials Holding Corporation ("BMHC" or the "Company")on a
consolidated basis, without audit, pursuant to the rules and regulations of the
Securities and Exchange Commission. In the opinion of management, all
adjustments necessary to present fairly the results for the periods presented
have been included. The adjustments made were of a normal, recurring nature.
Certain information and footnote disclosures normally included in the
consolidated financial statements have been condensed or omitted pursuant to the
rules and regulations of the Securities and Exchange Commission, although the
Company believes that the disclosures are adequate to make the information
presented not misleading. It is recommended that these condensed consolidated
financial statements be read in conjunction with the audited consolidated
financial statements and notes thereto included in the Company's 1998 Annual
Report.
Due to the seasonal nature of BMHC's business, the condensed consolidated
results of operations and resulting cash flows for the periods presented are not
necessarily indicative of the results that might be expected for the fiscal
year.
3
<PAGE>
BUILDING MATERIALS HOLDING CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(UNAUDITED)
(Dollars in Thousands, Except per Share Data)
<TABLE>
<CAPTION>
Three Months Ended
March 31, March 31,
1999 1998
-------- --------
<S> <C> <C>
Net sales $215,625 $183,631
Cost of sales 161,514 139,666
-------- --------
Gross profit 54,111 43,965
Selling, general and 47,954 40,436
administrative expense
Other income, net 487 373
-------- --------
Income from operations 6,644 3,902
Interest expense 2,544 2,497
-------- --------
Income before income taxes 4,100 1,405
Income taxes 1,579 555
-------- --------
Net income $ 2,521 $ 850
-------- --------
-------- --------
Net income per common share:
Basic: $ 0.20 $ 0.07
-------- --------
-------- --------
Diluted: $ 0.20 $ 0.07
-------- --------
-------- --------
</TABLE>
The accompanying notes are an integral part of these
condensed consolidated financial statements.
4
<PAGE>
BUILDING MATERIALS HOLDING CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEETS
(Dollars in Thousands)
<TABLE>
<CAPTION>
(UNAUDITED)
March 31, December 31,
1999 1998
-------- --------
<S> <C> <C>
ASSETS
Current assets
Cash $ 8,403 $ 8,264
Receivables, net 101,920 92,113
Inventories 82,898 78,746
Deferred income tax benefit 2,488 2,488
Prepaid expenses 2,176 2,355
-------- --------
Total current assets 197,885 183,966
Property, plant and equipment, net 141,823 139,585
Deferred loan costs 845 914
Goodwill, net 43,756 43,903
Other 5,169 5,613
-------- --------
Total assets $389,478 $373,981
-------- --------
-------- --------
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities
Accounts payable $ 50,286 $ 45,509
Accrued compensation 5,948 8,937
Sales tax payable 4,561 3,734
Other accrued expenses 8,739 9,042
-------- --------
Total current liabilities 69,534 67,222
Long-term debt 128,262 117,805
Deferred income taxes 5,405 5,404
Other long-term liabilities 3,488 3,300
Shareholders' equity
Common stock, $.001 par value, 20,000,000
shares authorized; 12,656,109 and
12,652,298 shares outstanding at March 31,
1999 and December 31, 1998, respectively 13 13
Additional paid-in capital 108,272 108,256
Retained earnings 74,504 71,981
-------- --------
Total shareholders' equity 182,789 180,250
-------- --------
Total liabilities and shareholders' equity $389,478 $373,981
-------- --------
-------- --------
</TABLE>
The accompanying notes are an integral part of these
condensed consolidated financial statements.
5
<PAGE>
BUILDING MATERIALS HOLDING CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)
(Dollars in Thousands)
<TABLE>
<CAPTION>
Three Months Ended
-------------------------
March 31, March 31,
1999 1998
-------- -------
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES
Net income $ 2,521 $ 850
Adjustments to reconcile net income to cash
(used) provided by operating activities:
Depreciation and amortization 3,515 3,113
Gain on sale of assets (102) (29)
Stock option compensation -- 16
Changes in working capital items net of
effects of acquisitions and divestitures (11,338) 115
Changes in other long-term liabilities 188 (488)
Other 180 (295)
-------- -------
Net cash(used)provided by operating activities (5,036) 3,282
-------- -------
CASH FLOWS FROM INVESTING ACTIVITIES
Purchases of property and equipment (5,206) (3,458)
Payments for acquisitions (304) --
Sale of property and equipment 212 128
-------- -------
Net cash used in investing activities (5,298) (3,330)
-------- -------
CASH FLOWS FROM FINANCING ACTIVITIES
Repayment of note payable (5,023) --
Net borrowings(repayments)under revolving
credit agreement
15,480 (800)
Other 16 (23)
-------- -------
Net cash provided(used)by financing activities 10,473 (823)
-------- -------
Net increase(decrease)in cash 139 (871)
Cash, beginning of period 8,264 8,177
-------- -------
Cash, end of period $ 8,403 $ 7,306
-------- -------
-------- -------
SUPPLEMENTAL CASH FLOW INFORMATION:
Cash paid during the period for -
Interest $ 1,049 $ 768
Income taxes $ 3,470 --
</TABLE>
The accompanying notes are an integral part of these
condensed consolidated financial statements.
6
<PAGE>
BUILDING MATERIALS HOLDING CORPORATION
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
1. WORKING CAPITAL CHANGES
Changes in working capital items, net of acquisitions, for the three months
ended March 31, 1999 and 1998 are as follows (in thousands):
<TABLE>
<CAPTION>
1999 1998
-------- -------
<S> <C> <C>
(Increase)decrease in accounts receivable $ (9,710) $ 435
Increase in inventories (4,074) (2,369)
Decrease in prepaid expenses 179 2,324
Increase(decrease)in accounts payable and
accrued expenses
772 (2,004)
Increase in interest payable 1,495 1,729
-------- -------
$ 11,338 $ 115
-------- -------
-------- -------
</TABLE>
2. LONG-TERM DEBT
Long-term debt consisted of the following(in thousands):
<TABLE>
<CAPTION>
March 31, December 31,
1999 1998
-------- --------
<S> <C> <C>
Revolving credit agreement borrowings $ 57,895 $ 42,415
9.18% unsecured senior notes 50,000 50,000
8.10% unsecured senior notes 16,667 16,667
Other 3,700 8,723
-------- --------
$128,262 $117,805
-------- --------
-------- --------
</TABLE>
The Company is in compliance with all covenants and conditions related to the
above borrowings.
7
<PAGE>
3. EARNINGS PER SHARE
Net income per share was determined as follows (in thousands, except shares
and per share amounts)
<TABLE>
<CAPTION>
Three Months Ended
------------------------------
March 31, March 31,
1999 1998
----------- -----------
<S> <C> <C>
COMPUTATION OF BASIC EARNINGS PER SHARE
Net income available to
common shareholders $ 2,521 $ 850
----------- -----------
----------- -----------
Weighted average shares outstanding 12,655,281 12,333,405
----------- -----------
----------- -----------
BASIC EARNINGS PER SHARE $ 0.20 $ 0.07
----------- -----------
----------- -----------
COMPUTATION OF DILUTED EARNINGS PER SHARE
Net income available to
common shareholders $ 2,521 $ 850
----------- -----------
----------- -----------
Weighted average shares outstanding 12,655,281 12,333,405
Net effect of dilutive stock options
based on the treasury stock method
using average market price 125,202 139,057
----------- -----------
Weighted average diluted
shares outstanding 12,780,483 12,472,462
----------- -----------
----------- -----------
DILUTED EARNINGS PER SHARE $ 0.20 $ 0.07
----------- -----------
----------- -----------
</TABLE>
8
<PAGE>
4. AQCUISITIONS
In the first quarter of 1999, the Company completed one acquisition
consisting of a value-added facility located in Colorado that was
consolidated into an existing facility. The total consideration given was
approximately $350,000.
5. SUBSEQUENT EVENTS
On May 3, 1999, the Company completed the acquisition of a 49% interest in
Knipp Brothers Industries, LLC, a framing company with operations in
Phoenix and Tuscon, Arizona, and Las Vegas, Nevada. The total
consideration given was $28 million consisting of $25.8 million in cash
and $2.2 million from various assets of our Phoenix operation. BMHC has
the right to acquire the remaining 51% interest in Knipp Brothers. Larry
Knipp has a corresponding right to require BMHC to purchase Knipp Brothers
51% after five years.
On March 31, 1999, BMHC renegotiated its revolving credit agreement with
Wells Fargo Bank. The amendment to the amended and restated credit
agreement was effective March 31, 1999. The amendment extended the period
of availability for the $100 million revolver from March 31, 1999 to
August 31, 1999 and changed the rates at which interest and fees are
charged and the minimum net worth required. Borrowings under the agreement
now bear interest at prime plus 0% to 1.25%, or LIBOR plus 1.00% to 2.25%.
A fee of .25% to .50% per annum is charged on the unused portion of the
loan commitement. After August 31, 1999, the borrowing capacity will
return to $70 million until the revolving credit agreement's expiration.
On May 7, 1999, BMHC signed a Joinder Agreement with Bank of America to
become an Additional Bank providing an additional $25 million pursuant to
the above mentioned amendment to the revolving credit agreement. Bank of
America agreed to be bound by the revolving credit agreement as if it had
been an original party to the revolving credit agreement.
9
<PAGE>
BUILDING MATERIALS HOLDING CORPORATION
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
The following table sets forth for the periods indicated the percentage
relationship to net sales of certain costs, expenses and income items. The table
and subsequent discussion should be read in conjunction with the consolidated
financial statements and the notes thereto appearing elsewhere herein and in the
Company's Annual Report on Form 10-K for the year ended December 31, 1998.
<TABLE>
<CAPTION>
For The Three Months Ended
---------------------------
March 31, March 31,
1999 1998
--------- ---------
<S> <C> <C>
Net sales 100.0% 100.0%
Gross profit 25.1 23.9
Selling, general and
administrative expense 22.2 22.0
Other income, net 0.2 0.2
Income from operations 3.1 2.1
Interest expense 1.2 1.4
Income taxes 0.7 0.3
Net income 1.2 0.5
</TABLE>
FIRST QUARTER OF 1999 COMPARED TO THE FIRST QUARTER OF 1998
Net sales for the three months ended March 31, 1999 increased 17.4% to a record
$215.6 million from $183.6 million in the same period one year ago. The increase
resulted primarily from same-store sales (facilities that operated for at least
two months in both the first quarter of 1998 and the first quarter of 1999)
growth of 12.0%, as well as a 7.5% increase from acquisitons made during the
past year. Adjusting for product price inflation (primarily commodity wood
product prices) of approximately 3.4%, real same-store sales were 8.6% ahead of
the year-ago quarter.
Gross profit as a percentage of sales increased to 25.1% in the first quarter of
1999 from 23.9% in the first quarter of 1998, primarily as a result of on- going
efforts by the Company to improve margins through its increased focus on
value-added products, such as roof and floor trusses, pre-hung doors, millwork,
and pre-assembled windows.
10
<PAGE>
Selling, general and administrative (SG&A) expenses, were $48.0 million in the
first quarter of 1999 as compared to $40.4 million in 1998, and increased as a
percentage of net sales from 22.0% in 1998 to 22.2% in 1999. The Company
attributes this partially to increases in value-added sales that carry higher
SG&A expenses, higher sales which carry higher commissions and incentives, and
the cost of integrating new operating locations that were not included in the
comparable prior year period.
Interest expense of $2.5 million in the first quarter of 1999 was approximately
the same as the comparable prior year period.
Income taxes were provided at estimated annual effective tax rates of 38.5% and
39.5% for the periods ended March 31, 1999 and March 31, 1998, respectively.
As a result of the foregoing factors, net income increased by $1.7 million or
196.6% to $2.5 million or 1.2% of net sales in the first quarter of 1999, as
compared to $850,000, or 0.5% of net sales, in the first quarter of 1998.
LIQUIDITY AND CAPITAL RESOURCES
At March 31, 1999 the Company had $128.3 million of long-term debt outstanding,
consisting of $70.4 million of term borrowings under fixed rate notes, and $57.9
million of variable rate debt under the revolving credit agreement.
In the first three months of 1999, the Company used $5.0 million of cash in
operating activities. Working capital increased from $116.7 million at December
31, 1998 to $128.4 million at March 31, 1999, due primarily to seasonality and
favorable economic conditions.
Based on its ability to generate cash from operations and the available
borrowing capacity at March 31, 1999 of $42.1 million under the revolving credit
agreement (availability of which is subject to the satisfaction of
11
<PAGE>
certain customary borrowing conditions), the Company believes it will have
sufficient funds to meet its currently anticipated requirements.
YEAR 2000 SYSTEM ISSUE
As is the case with most other companies, the Year 2000 computer problem creates
risks for BMHC. However, the Company believes that the risks of the Year 2000
computer problem are not as severe for the building materials industry as
compared to other more technology dependent industries, because the building
materials industry, in general, and the Company and its professional contractor
customers, in particular, are not as heavily dependent upon computerized
systems. Except for millwork and truss operations, the Company is primarily a
distributor of building materials to its customers and is dependent upon rail
and truck transportation for timely receipt and delivery of inventory. The
Company could be affected if its transportation suppliers are materially and
adversely affected by Year 2000 related issues.
The following discussion summarizes management's present analyses and proposed
plans with respect to the anticipated material impacts of the Year 2000 computer
problem on the Company's primary operations. The discussion focuses on "mission
critical" systems, which management believes are important to the Company's day
to day functional operations. The Year 2000 problem may also impact systems that
are not mission critical or information technology related. These systems, which
may include telephone, electronic mail, elevators, heating and air conditioning
equipment, and security will be tested and any problems addressed on a
case-by-case basis, but none are expected to be material to the Company's
results of operations or financial condition. It is expected that assessment,
remediation and contingency planning activities will be on-going throughout 1999
with the goal of appropriately resolving all significant internal systems and
third party issues.
State of Readiness
BMHC has evaluated the impact of the Year 2000 computer problem on its mission
critical systems. The mission critical systems that have been identified are:
- - retail system software used in each of the operations for sales
transactions, inventory and in-store accounting
12
<PAGE>
- corporate financial and accounting system
- millwork configuration and order entry system
- truss production and engineering system
- payroll system, which is operated by a third party vendor
Each of the five mission critical systems is in the process of becoming
Year 2000 compliant, or management is verifying with the original vendor
that the existing systems are Year 2000 compliant. The current status of
the readiness effort with respect to the five mission critical systems is
as follows:
The retail system is being upgraded in a two-step process that involves
hardware and operating system improvements that were originally scheduled
for 1998. The first phase of the process has been successfully completed.
The final phase of the upgrade process is well underway, and the process is
well understood. The final software upgrade for Year 2000 compliance, as
warranteed by the vendor, has been received and is currently being tested
and is expected to be fully implemented in the summer of 1999.
The remainder of the year will be used to thoroughly test the system.
The corporate financial and accounting system has been upgraded to the Year
2000 compliant version as warranteed by the vendor. This upgrade was
successfully completed in December 1998, and the system is fully compliant.
Extensive testing to verify the vendor's level of compliance will occur in
the middle of 1999.
It has been determined that the current millwork software will not meet the
long term needs of the Company, and a decision to replace this software
package has been made. However, due to the complexity of implementing a new
system, it has also been decided to bring the current system to a Year 2000
compliant state. This project will be performed by the original vendor of
the software. The Year 2000 compliant version of the current software is
scheduled for delivery in the summer of 1999. Additionally, a replacement
software package has been identified that is warranteed by the vendor as
Year 2000 compliant. The new system is scheduled to come on-line in
13
<PAGE>
selected sites in July 1999. In both cases, testing of the software will
occur during the latter half of 1999.
The vendors for the truss production system and outsourced payroll system
have advised the Company that the systems are currently Year 2000
compliant. Verification and testing of these systems for compliance is
currently underway, and will be completed during the middle of 1999.
Cost to Address Year 2000 Issues
Much of the cost to address Year 2000 issues was budgeted and scheduled as
part of routine maintenance of the Company's systems. Since these costs
were identified and planned for in the budget cycle, the financial impact
on the Company is not expected to be material in any one year. However, it
is anticipated that the total cost of becoming Year 2000 compliant for all
systems currently in use by the Company will be approximately $1.5 million.
To date approximately $0.7 million has been spent in remediation of Year
2000 issues. These costs include consulting, hardware upgrades and employee
time.
Risks of Year 2000 Issues for BMHC
Even in a most likely worst case scenario for BMHC, the risks due to failure to
accomplish Year 2000 remediations are not expected to have a material adverse
effect on the results of operations or financial condition of the Company. Each
of the Company's operating locations currently has procedures in place to deal
with the failure of the retail system. In this instance, the increased amount of
hand processing of accounting and inventory tracking would result in higher
overtime and payroll expense. However, it is not anticipated that there will be
a material impact on the ability of the Company to deliver products to
customers. In order to reduce the risks of delays in transportation of inventory
either to the Company or its customers, the Company intends to monitor Year 2000
compliance by its transportation suppliers and will consider a build-up of
certain inventories in the fourth quarter of 1999, if appropriate. The Company
does not expect that the cost of a short-term increase in its inventory levels
to reduce Year 2000 risks will be material to the Company's financial condition
or operating results.
14
<PAGE>
Since each of the systems independently perform specified functions that are
well understood by staff personnel in the operating locations and at the
corporate office, complete failure of all of the systems could be worked around
to perform the necessary functions of the systems. It is extremely unlikely that
this would occur due to the independent nature of the systems architecture
employed at BMHC. However, steps to avoid this possibility are being taken.
Contingency Plans
The Company believes that temporary solutions to most failures are readily and
economically available. For example, the dates on the systems could be set to
dates prior to 2000 that have the same days of the week, such as the year 1972.
This would involve a data conversion and hand correcting of dates on printed
documents, but could be accomplished in just a few days. Also, personal
computers with spreadsheets could be used to maintain accounting and inventory
information as well as corporate financial data. Millwork configuration is
unaffected by the date change, but dates would need to be changed for order
tracking if the system were not capable of dealing with dates after December 31,
1999. Processing of payroll could be done with personal computers. Truss
engineering would need validation by the plate manufacturer to ensure structural
integrity. Finally, the Company can increase inventory levels to mitigate risks
of Year 2000 transportation problems. All of these plans could be put in place
in a short time frame, and would mitigate nearly all the material risks to the
Company. Further evaluation of contingency plans will be made, if necessary, as
test results from the various systems become available.
Summary
BMHC has proactively identified and is in the process of correcting the Year
2000 issues that it believes could have a material impact on the Company. It is
anticipated that all systems will be capable of functioning in a normal fashion
upon the change of the millennium. It is not anticipated that BMHC will suffer
any loss of revenue due to Year 2000 issues. The Company is also
15
<PAGE>
in the process of requesting from all of its significant vendors a statement
regarding their preparations for the Year 2000 date change. Since the Year 2000
issue was anticipated in the budget cycle over the last two years, no material
impact is expected on the results of operations or cash flows in any period or
on the overall financial condition of the Company. Also, no projects were
canceled or delayed as a result of Year 2000 remediation activities
Certain statements made in this Form 10-Q may 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, 1998. 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 Form 10-Q except
as required by law.
PART II -- OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
The Company is involved in litigation and other legal matters arising
in the normal course of business. In the opinion of management, the
Company's recovery or liability, if any, under any of these matters
will not have a material effect on the Company's financial position,
liquidity or results of operations.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
None
16
<PAGE>
ITEM 5. OTHER INFORMATION
None
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits
Exhibit 10-28 - Amendment No. 1 to the Third Amended and Restated
Credit Agreement between Wells Fargo Bank, National
Association and BMC West Corporation dated March 31,
1999.
Exhibit 10-29 - Joinder Agreement between Bank of America National
Trust and Savings Association and BMC West
Corporation dated May 7, 1999.
Exhibit 27 - Financial Data Schedule
(b) Reports on Form 8-K
None
17
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
BUILDING MATERIALS HOLDING CORPORATION
Date: May 7, 1999 /s/ Robert E. Mellor
-----------------------------------------------
Robert E. Mellor
President, Chief Executive Officer
and Director (Principal Executive Officer)
Date: May 7, 1998 /s/ Ellis C. Goebel
-----------------------------------------------
Ellis C. Goebel
Senior Vice President - Finance
and Treasurer
(Principal Financial Officer)
18
<PAGE>
INDEX TO EXHIBITS
BUILDING MATERIALS HOLDING CORPORATION
Quarterly Report on Form 10-Q
For the Quarter Ended March 31, 1999
<TABLE>
<CAPTION>
Page
Exhibit Description Number
- ------- ----------- ------
<S> <C> <C>
10.28 Amendment No. 1 to the Third Amended and
Restated Credit Ageement between Wells
Fargo Bank, National Association and
BMC West Corporation date March 31, 1999.
10.29 Joinder Agreement between Bank of America
National Trust and Savings Association and BMC West
Corporation dated May 7, 1999.
27 Financial Data Schedule
</TABLE>
19
<PAGE>
Exhibit 10.28
AMENDMENT NO. 1 TO
THIRD AMENDED AND RESTATED CREDIT AGREEMENT
THIS AMENDMENT NO. 1 TO THIRD AMENDED AND RESTATED CREDIT AGREEMENT
(this "AMENDMENT"), dated as of March 31, 1999, is entered into by and among:
(1) BMC WEST CORPORATION, a Delaware corporation ("BORROWER");
(2) Each of the financial institutions from time to time
listed in SCHEDULE I TO THE CREDIT AGREEMENT referred to in RECITAL A
below (collectively, the "BANKS"); and
(3) WELLS FARGO BANK, NATIONAL ASSOCIATION, a national banking
association organized and operating under the laws of the United
States, as agent for the Banks (in such capacity, "AGENT").
RECITALS
A. Borrower, the Banks and Agent are parties to a Third Amended and
Restated Credit Agreement, effective as of September 30, 1998 (the "CREDIT
AGREEMENT").
B. Borrower has requested the Banks and Agent to amend the Credit
Agreement in certain respects.
C. The Banks and Agent are willing so to amend the Credit Agreement
upon the terms and subject to the conditions set forth below.
AGREEMENT
NOW, THEREFORE, in consideration of the above recitals and for other
good and valuable consideration, the receipt and adequacy of which are hereby
acknowledged, Borrower, the Banks and Agent hereby agree as follows:
1. DEFINITIONS, INTERPRETATION. All capitalized terms defined above and
elsewhere in this Amendment shall be used herein as so defined. Unless otherwise
defined herein, all other capitalized terms used herein shall have the
respective meanings given to those terms in the Credit Agreement, as amended by
this Amendment. The rules of construction set forth in SECTION I OF THE CREDIT
AGREEMENT shall, to the extent not inconsistent with the terms of this
Amendment, apply to this Amendment and are hereby incorporated by reference.
<PAGE>
2. AMENDMENTS TO CREDIT AGREEMENT. Subject to the satisfaction of the
conditions set forth in PARAGRAPH 5 below, the Credit Agreement is hereby
amended as follows:
(a) PARAGRAPH 2.02 is hereby amended as follows:
(i) SUBPARAGRAPH 2.02(d)(i) is hereby amended to
substitute "Commitment On and After Scheduled Reduction Date" for
"Proportionate Share On and After Scheduled Reduction Date."
(ii) A new SUBPARAGRAPH 2.02(e) is hereby added as
follows:
"(e) ADMISSION OF ADDITIONAL BANKS. At the request of
Borrower, one or more banks or financial institutions may become
parties to this Agreement as Banks (each an "ADDITIONAL BANK") with
Commitments which do not exceed Twenty-Five Million Dollars
($25,000,000) in the aggregate; PROVIDED, that (i) Agent and the
Required Banks consent to each Additional Bank becoming a party to this
Agreement and (ii) each Additional Bank agrees to be bound by this
Agreement as it would have been if it had been an original Bank party
hereto and agrees to perform in accordance with their terms all of the
obligations which are required under the Credit Documents to be
performed by it as a Bank. On the date any Additional Bank becomes a
party to this Agreement, the Total Commitment shall be increased by the
Commitment of such Additional Bank and the Proportionate Shares of the
other Banks shall be ratably reduced. If on the date any Additional
Bank becomes a party to this Agreement any other Bank has Revolving
Loans and Drawing Payments outstanding which are greater than such
other Bank's Proportionate Share of all Revolving Loans and Drawing
Payments outstanding on such date, such other Bank shall assign to such
Additional Bank and such Additional Bank shall assume and pay to such
other Bank on such date the principal amount by which such other Bank's
Revolving Loans and Drawing Payments are greater than its Proportionate
Share of the aggregate principal amount of all Revolving Loans and
Drawing Payments outstanding on such date and accrued interest on the
amount of such Revolving Loans and Drawing Payments assigned and
assumed shall be allocated between such other Bank and such Additional
Bank as of the date such payment was made by such Additional Bank."
(b) SUBPARAGRAPH 5.01(i) is hereby amended to read in
full as follows:
"(i) NET WORTH. Borrower will maintain, at all times,
a Net Worth in an amount of not less than the sum of (i) 80% of
$180,250,000 (Borrower's Net Worth as of December 31, 1998) PLUS (ii)
seventy-five percent (75%) of the net cash proceeds of the issuance of
all capital stock of Borrower and all capital contributions from Parent
(whether or not stock is issued in connection with such contribution)
from and after December 31, 1998 through and including the date
immediately preceding the date on which such Net Worth is to be
determined, PLUS (iii) fifty percent (50%) of the cumulative Net
Incomes for all fiscal quarters from and after December 31, 1998
through and including the fiscal quarter immediately preceding the date
on which such Net Worth is to be determined; PROVIDED, HOWEVER, that in
calculating any amount under the
2
<PAGE>
preceding CLAUSE (III), any fiscal quarter for which Net Income was
negative shall be excluded."
(c) PARAGRAPH 8.05 of the Credit Agreement is hereby
amended as follows:
(i) The second and third sentences of SUBPARAGRAPH 8.05(c) are
hereby amended in their entirety as follows:
"Upon such execution, delivery, acceptance and recording of each
Assignment and Assumption Agreement, from and after the Assignment
Effective Date determined pursuant to such Assignment and Assumption
Agreement, (A) each Assignee Bank thereunder shall be a Bank hereunder
with a Commitment as set forth on ATTACHMENT 1 TO SUCH ASSIGNMENT AND
ASSUMPTION AGREEMENT and shall have the rights, duties and obligations
of such a Bank under this Agreement and the other Credit Documents, and
(B) the Assignor Bank thereunder shall be a Bank with a Commitment as
set forth on ATTACHMENT 1 TO SUCH ASSIGNMENT AND ASSUMPTION AGREEMENT,
or, if the Commitment of the Assignor Bank has been reduced to $0, the
Assignor Bank shall cease to be a Bank; PROVIDED, HOWEVER, that each
Assignor Bank shall nevertheless be entitled to the benefits of any
provision of this Agreement which by its terms survives termination of
this Agreement with respect to matters occurring before the Assignment
Effective Date. Each Assignment and Assumption Agreement shall be
deemed to amend SCHEDULE I to the extent, and only to the extent,
necessary to reflect the addition of each Assignee Bank, the deletion
of each Assignor Bank which reduces its Commitment to $0 and the
resulting adjustment of Commitments arising from the purchase by each
Assignee Bank of all or a portion of the rights and obligation of an
Assignor Bank under this Agreement and the other Credit Documents."
(ii) SUBPARAGRAPH 8.05(d) is hereby amended to add "and the
Commitments" after "the Proportionate Shares" where such phrase appears
in the first sentence.
(iii) SUBPARAGRAPH 8.05(e) is hereby amended to add "and
Commitments" after "Proportionate Shares" where such phrase appears in
the second sentence.
(d) SCHEDULE I to the Credit Agreement is hereby amended by
deleting the columns opposite each Bank's name entitled "Proportionate Share
Before Scheduled Reduction Date" and "Proportionate Share On and After Scheduled
Reduction Date" and substituting the following:
<TABLE>
<CAPTION>
COMMITMENT BEFORE SCHEDULED COMMITMENT ON AND AFTER SCHEDULED
BANK REDUCTION DATE REDUCTION DATE
- ---- ---------------------------- ---------------------------------
<S> <C> <C>
Wells Fargo Bank, National Association $35,000,000 $25,000,000
U.S. Bank National Association $35,000,000 $25,000,000
</TABLE>
3
<PAGE>
<TABLE>
<CAPTION>
<S> <C> <C>
KeyBank National Association $30,000,000 $20,000,000
</TABLE>
(e) SCHEDULE II to the Credit Agreement is hereby amended by
changing the definitions of the terms "APPLICABLE MARGIN," "COMMITMENT,"
"COMMITMENT MARGIN," "PROPORTIONATE SHARE," "SCHEDULED REDUCTION DATE" and
"TOTAL COMMITMENT" set forth therein to read in their entirety as follows:
"APPLICABLE MARGIN" shall mean for any Interest
Period on any Revolving LIBOR Loan or for any Revolving Base Rate Loan,
the per annum rate determined in accordance with the following
schedule:
<TABLE>
<CAPTION>
APPLICABLE
MARGIN APPLICABLE MARGIN
REVOLVING REVOLVING
EBITDA RATIO LIBOR LOAN BASE RATE LOAN
------------ ----------- -----------------
<S> <C> <C>
1. less than 2.00 to 1.00 1.000% 0%
2. 2.00 to 1.00 to 2.75 to 1.250% 0.250%
1.00
3. 2.76 to 1.00 to 3.00 to 1.625% 0.625%
1.00
4. 3.01 to 1.00 to 3.49 to 2.000% 1.000%
1.00
5. 3.50 to 1.00 or greater 2.250% 1.250%
</TABLE>
The EBITDA Ratio shall be calculated quarterly on a rolling four
quarters basis based upon Borrower's quarterly consolidated financial
statements delivered in accordance with SUBPARAGRAPH 5.01(c)(ii) of
this Agreement. Once the EBITDA Ratio has been determined, the
Applicable Margin corresponding to such EBITDA Ratio as set forth above
shall apply from and including the third (3rd) Business Day following
the delivery of the applicable quarterly financial statements from
which such EBITDA Ratio has been determined to but excluding the third
(3rd) Business Day following the delivery of the next quarterly
financial statements under SUBPARAGRAPH 5.01(c)(ii) of this Agreement
at which time such new EBITDA Ratio and related Applicable Margin shall
be determined and apply. With respect to any Revolving LIBOR Loan, the
Applicable Margin in effect (pursuant to the preceding sentence) on the
first day of any Interest Period shall apply during the entire Interest
Period. With respect to any Revolving Base Rate Loan, the Applicable
Margin shall change from time to time as determined pursuant to the
second preceding sentence.
"COMMITMENT" shall mean, with respect to each Bank,
(i) before the Scheduled Reduction Date, the Dollar amount set forth
under the caption "Commitment Before Scheduled Reduction Date" opposite
such Bank's name on SCHEDULE I, (ii) on or
4
<PAGE>
after the Scheduled Reduction Date, the Dollar amount set forth under
the caption "Commitment On and After the Scheduled Reduction Date"
opposite such Bank's name on SCHEDULE I, and (iii) if such Commitment
is changed, such Dollar amount as may be set forth for such Bank in the
Register.
"COMMITMENT MARGIN" shall mean, for any period, a per
annum rate determined in accordance with the following schedule:
<TABLE>
<CAPTION>
Commitment
EBITDA RATIO MARGIN
------------ ----------
<S> <C>
1. less than 2.00 to 1.00 0.250%
2. 2.00 to 1.00 0.250%
to 2.75 to 1.00
3. 2.76 to 1.00 0.375%
to 3.00 to 1.00
4. greater than 3.00 to 1.00 0.500%
</TABLE>
The EBITDA Ratio shall be calculated quarterly on a rolling four
quarters basis based upon Borrower's quarterly consolidated financial
statements delivered in accordance with SUBPARAGRAPH 5.01(c)(ii). Once
the EBITDA Ratio has been determined, the Commitment Margin
corresponding to such EBITDA Ratio as set forth above shall apply from
and including the third (3rd) Business Day following the delivery of
the applicable financial statements from which such EBITDA Ratio has
been determined to but excluding the third (3rd) Business Day following
the delivery of the next quarterly financial statements under
SUBPARAGRAPH 5.01(c)(ii) at which time such new EBITDA Ratio and
related Applicable Margin shall be determined and apply.
"PROPORTIONATE SHARE" shall mean, with respect to
any Bank:
(i) At any time prior to the termination of the
Commitments, the ratio (expressed as a percentage rounded to the eighth
digit to the right of the decimal point) of (x) such Bank's Commitment
at such time TO (y) the Total Commitment at such time; and
(ii) At any time after the termination of the
Commitments, the ratio (expressed as a percentage rounded to the eighth
digit to the right of the decimal point) of (x) the aggregate principal
amount of all of such Bank's Loans outstanding at such time TO (y) the
aggregate principal amount of all Banks' Loans outstanding at such
time.
"SCHEDULED REDUCTION DATE" shall mean August 31,
1999.
"TOTAL COMMITMENT" shall have the meaning given to
that term in SUBPARAGRAPH 2.02(a), subject to any reduction pursuant to
SUBPARAGRAPHS 2.02(c) AND 2.02(d) or any increase pursuant to
SUBPARAGRAPH 2.02(e).
(f) EXHIBIT F to the Credit Agreement is hereby amended as
follows:
(i) PARAGRAPH 2 is hereby amended to substitute "Commitment"
for
5
<PAGE>
"Proportionate Share" where such term appears in the last sentence
thereof.
(ii) ATTACHMENT 1 TO ASSIGNMENT AND ASSUMPTION AGREEMENT is
hereby amended to substitute "Commitments" for "Proportionate Shares"
where such term appears in the caption.
3. CONSENT TO DISTRIBUTION. Subject to the satisfaction of the
conditions set forth in PARAGRAPH 5 below, the Banks hereby consent to (i) the
distribution by Borrower to Parent of inventory and equipment of Borrower
located at the Borrower's facility in Phoenix, Arizona and cash in the amount
necessary to enable Parent to acquire forty-nine percent (49%) of Knipp Brothers
Industries LLC ("KBI") notwithstanding SUBPARAGRAPH 5.02(e) of the Credit
Agreement; and (ii) the loan (the "Knipp Loan") by Borrower to Parent in an
amount not to exceed $5,000,000 notwithstanding SUBPARAGRAPH 5.02(f) of the
Credit Agreement PROVIDED, that (x) the total amount of such cash distribution
does not exceed $33,000,000, the fair value of such inventory and equipment
distribution does not exceed $3,000,000 and the principal amount Knipp Loan does
not exceed $5,000,000, (y) the Knipp Loan is evidenced by an unsubordinated note
of Parent bearing interest at market rates and payable in full on or before
October 31, 1999 and (z) proceeds of the Knipp Loan are used by Parent solely to
provide working capital funding to KBI.
4. REPRESENTATIONS AND WARRANTIES. Borrower hereby represents and
warrants to Agent and the Banks that the following are true and correct on the
date of this Amendment and that, after giving effect to the amendments set forth
in PARAGRAPH 2 above, the following are true and correct on the Effective Date
(as defined below):
(a) The representations and warranties of Borrower set forth
in PARAGRAPH 4.01 OF THE CREDIT AGREEMENT and in the other Credit
Documents are true and correct as of the Effective Date;
(b) No Event of Default or Default has occurred and is
continuing;
(c) The aggregate principal amount of the Outstanding Credit
on the Effective Date does not exceed the Borrowing Base; and
(d) Each of the Credit Documents remains in full force and
effect in accordance with its terms.
(Without limiting the scope of the term "Credit Documents," Borrower expressly
acknowledges in making the representations and warranties set forth in this
PARAGRAPH 4 that, on and after the date hereof, such term includes this
Amendment.)
5. EFFECTIVE DATE. The amendments effected by PARAGRAPH 2 above and the
consent given by PARAGRAPH 3 above shall become effective as of March 31, 1999
(the "EFFECTIVE DATE"), subject to receipt by Agent and the Banks of the
following before any distribution is made by Borrower to Parent in connection
with the acquisition by Parent of an interest in Knipp Brothers
6
<PAGE>
Industries LLC, each in form and substance satisfactory to Agent, the Banks and
their respective counsel:
(a) This Amendment duly executed by Borrower, each Bank and
Agent;
(b) Amendment No.1 to Continuing Guaranty, dated the Effective
Date and duly executed by Parent, each Bank and Agent;
(c) A Certificate of the Secretary of Borrower, certifying
that (i) the Certificate of Incorporation and Bylaws of Borrower, in
the form delivered to Agent in connection with the Credit Agreement,
are in full force and effect and have not been amended, supplemented,
revoked or repealed since September 30, 1998, and (ii) that attached
thereto are true and correct copies of resolutions duly adopted by the
Board of Directors of Borrower and continuing in effect, which
authorize the execution, delivery and performance by Borrower of this
Amendment and the consummation of the transactions contemplated hereby;
(d) Amendment fees paid to Agent for the benefit of each Bank
in an amount equal to 0.25% of the amount by which such Bank's
Commitment would have been reduced on March 31, 1999, if the Scheduled
Reduction Date had not been extended as provided in PARAGRAPH 2 of this
Amendment; and
(e) Such other evidence as Agent or any Bank may reasonably
request to establish the accuracy and completeness of the
representations and warranties and the compliance with the terms and
conditions contained in this Amendment and the other Credit Documents.
6. EFFECT OF THIS AMENDMENT. On and after the Effective Date, each
reference in the Credit Agreement and the other Credit Documents to the Credit
Agreement shall mean the Credit Agreement as amended hereby. Except as
specifically amended above, (a) the Credit Agreement and the other Credit
Documents shall remain in full force and effect and are hereby ratified and
confirmed and (b) the execution, delivery and effectiveness of this Amendment
shall not, except as expressly provided herein, operate as a waiver of any
right, power, or remedy of the Banks or Agent, nor constitute a waiver of any
provision of the Credit Agreement or any other Credit Document.
7. MISCELLANEOUS.
(a) COUNTERPARTS. This Amendment may be executed in any number
of identical counterparts, any set of which signed by all the parties
hereto shall be deemed to constitute a complete, executed original for
all purposes.
(b) HEADINGS. Headings in this Amendment are for convenience
of reference only and are not part of the substance hereof.
7
<PAGE>
(c) GOVERNING LAW. This Amendment shall be governed by and
construed in accordance with the laws of the State of California
without reference to conflicts of law rules.
(d) MARGINS. The parties acknowledge that as of December 31,
1998, the Borrower's EBITDA Ratio was between 2.00 to 1.00 and 2.75 to
1.00 and that therefore the Applicable Margin for Revolving LIBOR Loans
is 1.25%, the Applicable Margin for Revolving Base Rate Loans is 0.25%
and the Commitment Margin is 0.25%.
[Remainder of page left blank.]
8
<PAGE>
IN WITNESS WHEREOF, Borrower, Agent and the Banks have caused this
Amendment to be executed as of the day and year first above written.
BORROWER: BMC WEST CORPORATION
By: /s/ ELLIS C. GOEBEL
------------------------------------------
Name: ELLIS C. GOEBEL
Title: Senior VP - Finance & Treasurer
AGENT: WELLS FARGO BANK,
NATIONAL ASSOCIATION, as Agent
By: /s/ ALFRED ARTIS AND DONALD A. HARTMAN
------------------------------------------
Name: DONALD A. HARTMANN
Title: Senior Vice President
Name: ALFRED ARTIS
Title: Vice President
BANKS: WELLS FARGO BANK,
NATIONAL ASSOCIATION
By: /s/ ALFRED ARTIS AND DONALD A. HARTMAN
------------------------------------------
Name: DONALD A. HARTMANN
Title: Senior Vice President
Name: ALFRED ARTIS
Title: Vice President
KEYBANK NATIONAL ASSOCIATION
By: /s/ KEVIN P. MCBRIDE
------------------------------------------
Name: KEVIN P. MCBRIDE
Title: Vice President
U.S. BANK NATIONAL ASSOCIATION
By: /s/ JAMES W. HENKEN
------------------------------------------
Name: JAMES W. HENKEN
Title: Vice President
9
<PAGE>
EXHIBIT A
AMENDMENT NO. 1 TO
CONTINUING GUARANTY
THIS AMENDMENT NO. 1 TO CONTINUING GUARANTY (this "AMENDMENT"), dated
as of March 31, 1999, is entered into by and among:
(1) Building Materials Holding Corporation, a Delaware
corporation ("GUARANTOR");
(2) Each of the financial institutions from time to time
listed in SCHEDULE I TO THE CREDIT AGREEMENT referred to in RECITAL A
below (collectively, the "BANKS"); and
(3) WELLS FARGO BANK, NATIONAL ASSOCIATION, a national banking
association organized and operating under the laws of the United
States, as agent for the Banks (in such capacity, "AGENT").
RECITALS
A. BMC West Corporation, a Delaware corporation and a wholly owned
subsidiary of Guarantor ("Borrower"), the Banks and Agent are parties to a Third
Amended and Restated Credit Agreement, effective as of September 30, 1998, as
amended by Amendment No.1 thereto dated the date hereof (the "CREDIT AGREEMENT
AMENDMENT"), such Credit Agreement, as so amended being referred to as the
"CREDIT AGREEMENT".
B. Borrower and Guarantor have requested the Banks and Agent to amend
the Credit Agreement in certain respects and to consent to certain transactions
as described in the Credit Agreement Amendment
C. The Banks and Agent are willing so to amend the Credit Agreement and
to grant such consent provided that the Guaranty is amended upon the terms set
forth below.
AGREEMENT
NOW, THEREFORE, in consideration of the above recitals and for other
good and valuable consideration, the receipt and adequacy of which are hereby
acknowledged, Guarantor, the Banks and Agent hereby agree as follows:
1. DEFINITIONS, INTERPRETATION. All capitalized terms defined above and
elsewhere in this Amendment shall be used herein as so defined. Unless otherwise
defined herein, all other capitalized terms used herein shall have the
respective meanings given to those terms in the guaranty as amended by this
Amendment.
<PAGE>
2. AMENDMENTS TO GUARANTY. The guaranty is hereby amended as follows:
(a) Section 6(c) of the Guaranty is deleted.
(b) New Sections 6(c), (d), (e), (f) and (g) are added to the
Guaranty as follows:
(c) LIENS. Guarantor shall not, nor shall it permit any
Subsidiary to, create, incur, assume or permit to exist any Lien on or
with respect to its assets or property of any character, whether now
owned or hereafter acquired, except for the following permitted liens:
(i) Liens relating to precautionary Uniform Commercial Code filings
under true leases of equipment, PROVIDED, HOWEVER, that such Liens
shall not be extended to any other property of Guarantor; (ii)
carriers', warehousemen's, mechanics', landlords', materialmen's,
suppliers', tax, assessment, governmental and other like Liens and
charges arising in the ordinary course of business securing obligations
that are not incurred in connection with the obtaining of any advance
or credit and which are not overdue, or are being contested in good
faith by appropriate proceedings; provided that provision is made to
the satisfaction of Agent and the Banks for the eventual payment
thereof in the event it is found that such is payable by Guarantor or
any Subsidiary; (iii) Liens arising in connection with worker's
compensation, unemployment insurance, appeal and release bonds and
progress payments under government contracts; (iv) judgment Liens with
respect to which execution has been stayed or the payment of which is
covered in full by insurance; (v) encumbrances or claims affecting any
real property owned or leased by Guarantor or any Subsidiary which do
not alone or in the aggregate materially adversely affect the use or
value of such property (on a parcel by parcel basis); and (vi) with
respect to Liens incurred by Borrower, Permitted Liens.
(d) DIVIDENDS. Guarantor shall not, directly or
indirectly, make or declare any dividend in cash, securities (other
than Guarantor's securities) or any other form of property on, or other
payment or distribution on account of, any shares of any of Guarantor's
or any Subsidiary's Equity Securities except that Guarantor may pay
dividends on Guarantor's common stock:
(i) In each fiscal year of Guarantor in an
amount not to exceed twenty-five percent (25%) of Guarantor's
Net Income (after giving effect to any item of extraordinary
losses) for the prior fiscal year, provided that at the time
of declaration no Default or Event of Default has occurred and
is continuing. In calculating the amount of dividends which
Guarantor is permitted to pay in any fiscal year pursuant to
this clause (i), (A) Net Income for the prior fiscal year
shall be based on the financial statements for such fiscal
year delivered to Agent and the Banks pursuant to Section
6(a)(ii) of the guaranty and (B) if the Net Income for the
prior fiscal year as determined under clause (A) is negative,
no dividends shall be permitted during the current fiscal
year.
(ii) If, immediately after giving effect
thereto, the aggregate amounts of all dividends pursuant to
this Section 6(d) subsequent to
11
<PAGE>
November 19, 1992, would not exceed the sum of $2 million,
PLUS 50% of the net cash proceeds received by the Guarantor on
account of any Equity Securities issued by Guarantor
subsequent to December 31, 1992, PLUS 50% of Cumulative
Consolidated Net Income or MINUS 100% of Cumulative
Consolidated Net Loss, as the case may be, subsequent to
December 31, 1992 (provided that such net income or net loss
shall exclude the cumulative prior years' effect of any
accounting changes required by generally accepted accounting
principles that have a non-cash effect).
(iii) For purposes of this Section 6(d), the
amount of any dividends payable in property shall be deemed to
be the fair market value of such property as determined in
good faith by the Board of Directors of Guarantor.
(iv) Notwithstanding the foregoing,
Guarantor shall not pay dividends which are payable more than
60 days after the date of declaration thereof.
(v) In calculating the amount of dividends
permitted hereunder, Guarantor shall include any amounts paid
to repurchase or redeem common stock of Guarantor as permitted
under Section 6(f).
(e) INVESTMENTS. Guarantor shall not, nor shall it
permit any Subsidiary to, make or permit to remain outstanding any
advances or loans or extensions of credit to, purchase or own any
stocks, bonds, notes, debentures or other securities of, make any
contribution of capital to or otherwise invest in, any Person
(including, without limitation, any Subsidiary), or acquire by purchase
of stock or by purchase of assets all or any substantial division or
portion of the assets and business of any Person, except (i)
investments in, and deposits with, commercial banks organized under the
laws of the United States or a state thereof having capital of at least
One Hundred Million Dollars ($100,000,000); (ii) investments in short
term marketable obligations of the United States or of any state
thereof or of any agency or instrumentality of the United States or any
state thereof; (iii) investments in open market commercial paper given
a rating of at least "A1" or "P1" or higher by a national credit agency
and maturing not more than one year from the creation thereof; (iv)
current advances to suppliers in the ordinary course of Guarantor's or
such Subsidiary's business; (v) endorsements of negotiable instruments
in the ordinary course of business; (vi) partnership or joint venture
interests permitted by Section 6(g) of the guaranty; (vii) deposits
with commercial banks other than those described in CLAUSE (I) provided
that no deposit exceeds at any time an amount equal to One Hundred
Thousand Dollars ($100,000); PROVIDED, that, in each case described in
CLAUSES (I) THROUGH (vii), such investment does not create or have the
effect of creating or acquiring any Subsidiary; (viii) Investments in
businesses directly related to the building supply industry, and if any
such Investment is for all or substantially all of the business or
assets of any Person, such acquisition shall have been approved by the
board of directors of such Person and, if required, the shareholders of
such Person and, if such Investment would exceed Fifteen Million
Dollars ($15,000,000), including any Debt
12
<PAGE>
assumed or for which the assets acquired are subject to Liens, such
acquisition shall have been approved by the Required Banks, and (z)
Parent shall have given the Agent a written description of the
Investment to be made with the loan proceeds prior to receiving such
proceeds; and (ix) with respect to Investments made by Borrower and its
subsidiaries, Investments permitted by the Credit Agreement.
(f) STOCK. Neither Guarantor nor any Subsidiary shall
redeem, purchase, retire or otherwise acquire for value any shares of
any class of capital stock of Guarantor or any Subsidiary or any
warrant, right or option pertaining thereto or other security
convertible into any of the foregoing except repurchases or redemptions
of common stock of Guarantor provided that (A) the amount of all such
repurchases or redemptions, together with all amounts paid in dividends
in each fiscal year, shall not exceed the limitations on dividends set
forth in Section 6(d), (B) the amount of any repurchase or redemption
payable in property shall be deemed to be the fair market value of such
property as determined in good faith by the Board of Directors of
Guarantor, and (C) Guarantor shall not make any repurchase which is
payable more than 60 days after the date of declaration thereof.
(g) PARTNERSHIPS. Neither Guarantor nor any
Subsidiary shall be a general or limited partner in any partnership or
a joint venturer in any joint venture, provided that Guarantor or a
subsidiary may become such a partner or joint venturer so long as (i)
the aggregate Investments in all such partnerships or ventures does not
exceed $5,000,000 (excluding the Investment in Knipp Brothers
Industries LLC ("KBI")); (ii) the liability (including any contingent
liability, whether arising by contract, tort, operation of law or
otherwise) of Guarantor or such subsidiary arising from entering into
or participating in such partnerships or joint ventures is limited
under all circumstances to not more than an aggregate of $5,000,000 and
prior to entering into such partnership or joint venture arrangement
(other than the Investment in KBI), Guarantor provides Agent and Banks
an opinion of counsel satisfactory to Agent and Banks to the effect
that Guarantor's liability is so limited; and (iii) the principal
business of such partnership or joint venture is directly related to
the building supply business.
(c) A new Section 14 is added to the Guaranty to read as follows:
14. DEFINITIONS.
(a) "CONSOLIDATED NET INCOME (NET LOSS)" shall mean the amount
of net income (loss) of the Guarantor and its consolidated Subsidiaries
determined in accordance with GAAP, excluding (a) any net income (loss)
of a Subsidiary for any period during which it was not a consolidated
Subsidiary, or (b) any net income (loss) of any businesses, properties,
or assets acquired or disposed of (by way of merger, consolidation,
purchase, sale or otherwise) by Guarantor or any consolidated
Subsidiary for any period prior to the acquisition thereof or
subsequent to the disposition thereof.
(b) "CUMULATIVE CONSOLIDATED NET INCOME" shall mean the
excess, if any, of:
(i) the sum of (A) Consolidated Net Income, if any,
for each
13
<PAGE>
completed fiscal year of Guarantor commencing on or after
December 31, 1992 and (B) Consolidated Net income, if any, for
any completed month ending after the end of the most recently
completed fiscal year of Guarantor; OVER
(ii) the sum of (a) Consolidated Net Loss, if any,
for each completed fiscal year of Guarantor commencing on or
after December 31, 1992 and (B) Consolidated Net Loss, if any,
for any completed month ending after the end of the most
recently completed fiscal year of Guarantor.
(c) "CUMULATIVE CONSOLIDATED NET LOSS" shall mean the excess,
if any, of:
(i) the sum of (A) Consolidated Net Loss, if any, for
each completed fiscal year of Guarantor commencing on or after
December 31, 1992 and (B) Consolidated Net Loss, if any, for
any completed month ending after the end of the most recently
completed fiscal year of Guarantor; OVER
(ii) the sum of (A) Consolidated Net Income, if any,
for each completed fiscal year of Guarantor commencing on or
after December 31, 1992 and (B) Consolidated Net Income, if
any, for any completed month ending after the end of the most
recently completed fiscal year of Guarantor.
(d) "DEBT" shall mean, WITH respect to Guarantor or any
Subsidiary, the aggregate amount of, without duplication, (i) all
obligations of such Person for borrowed money, (ii) all obligations of
such Person evidenced by bonds, debentures, notes or other similar
instruments, but excluding preferred stock, (iii) all obligations of
such Person to pay the deferred purchase price of property or services,
(iv) all capitalized lease obligations of such Person, (v) all
obligations or liabilities secured by a Lien on any asset of such
Person, whether or not such obligation or liability is assumed, (vi)
all obligations or liabilities of others guaranteed by such Person;
(vii) all obligations of Guarantor or any Subsidiary in respect of any
letter of credit, bankers' acceptance or other similar credit
facilities, to the extent not otherwise included in Debt or which
consists of accounts payable in the ordinary course of business; and
(viii) any other obligations or liabilities which are required by GAAP
to be shown as debt on the balance sheet of such Person. Unless
otherwise indicated, the term "Debt" shall include all Debt of
Guarantor and its Subsidiaries.
(e) "NET INCOME" shall mean, for any period, the consolidated
gross revenues of Guarantor and its Subsidiaries, less all expenses and
other proper charges for such period, all as determined in accordance
with GAAP; PROVIDED, HOWEVER, that in determining Net Income of
Guarantor and its Subsidiaries, there shall not be included in gross
revenues any of the following items: (i) any extraordinary items; (ii)
if a corporation shall have become a Subsidiary, any earnings of such
corporation prior to the date it shall have become a Subsidiary or any
portion of the net income of a Subsidiary which for any reason is
available for the payment of dividends to Guarantor or another
Subsidiary; (iii) if Guarantor or a Subsidiary shall have acquired the
assets and business of any Person or any substantial part of the assets
and business of any Person, any earnings properly attributable to such
assets and business or part thereof prior to the date
14
<PAGE>
of such acquisition; (iv) any earnings of, and dividends payable to,
Guarantor or a Subsidiary in currencies which at the time are blocked
against conversion into Dollars; (v) any restoration to income of any
contingency reserve, except to the extent that provision for such
reserve was made out of income accrued during such period; (vi) any
deferred credit or amortization thereof from the acquisition of any
properties or assets of any Person; (vii) any gain during such period
arising from (A) the sale, exchange or other disposition of capital
assets (such term to include all fixed assets, whether tangible or
intangible, and all securities) to the extent the aggregate gains
from such transactions exceed losses during such period from such
transactions, (B) any reappraisal, revaluation or write-up of assets
subsequent to Guarantor's fiscal year ended December 31, 1994,
(C) the acquisition of any securities of Guarantor or any Subsidiary or
(D) the termination or any Plan; and (viii) the proceeds of any life
insurance policy, provided that there shall not be excluded from Net
Income by reason of this CLAUSE (viii) (A) net gains resulting from the
sale of capital assets (other than any Facility referred to below) to
the extent that such gains are treated in accordance with GAAP and the
Guarantor's usual practice prior to the date hereof as ordinary income,
or (B) net gains resulting from the sale of building materials outlets,
door shops or other operating sites or other real estate of the
Guarantor or any Subsidiaries (collectively, "FACILITIES") to the
extent that the amount of such gains resulting from the sale of any one
Facility shall not exceed $1,000,000 and the aggregate amount of such
gains from all sales of Facilities in any period of twelve months shall
not exceed $2,000,000.
(f) "SUBSIDIARY" shall mean any corporation at least the
majority of whose securities having ordinary voting power for the
election of directors (other than securities having such power only by
reason of the happening of a contingency) are at the time owned by
Guarantor and/or one or more Subsidiaries.
3. GUARANTOR CONSENT. Guarantor hereby consents to the Credit Agreement
Amendment. Guarantor expressly agrees that the term "Indebtedness" as used in
the Guaranty shall include the additional obligations owing by Guarantor to
Agent or the Banks under the Credit Agreement as amended by the Credit Agreement
Amendment and the rights, duties, and obligations of Guarantor, the Banks or
Agent under the Guaranty remain in full force and effect notwithstanding the
amendments contained in Credit Agreement. Guarantor's consent to the Credit
Agreement Amendment shall not be construed (i) to have been required by the
terms of the Guaranty or any other document, instrument or agreement relating
thereto or (ii) to require the consent of Guarantor in connection with any
future amendment of the Credit Agreement or any other Credit Document.
4. CONSENT TO Distribution. Subject to the satisfaction of the
conditions set forth in PARAGRAPH 5 of the Credit Agreement Amendment, the Banks
hereby consent to (i) Guarantor's acquisition, directly or indirectly, of
forty-nine percent (49%) of KBI and the loan (the "Knipp Loan") by Guarantor to
KBI in an amount not to exceed $5,000,000 notwithstanding Section 6(e) and
Section 6(g) of the Guaranty; PROVIDED, that (y) the total amount of such
Investment and Knipp Loan does not exceed Thirty-Three Million Dollars
($33,000,000), (z) the Knipp Loan is evidenced by an unsubordinated note of KBI
bearing interest at market rates and payable in full on or before October 31,
1999.
15
<PAGE>
5. REPRESENTATIONS AND WARRANTIES. Guarantor hereby represents and
warrants to Agent and the Banks that after giving effect to the consent set
forth in Section 4 above, the following are true and correct:
(a) The representations and warranties of Guarantor set forth
in Section 5 of the Guaranty are true and correct as of the date
hereof;
(b) The Guaranty remains in full force and effect in
accordance with its terms.
6. EFFECT OF THIS AMENDMENT. On and after the Effective date, as
defined on the Credit Agreement Amendment each reference in the Guaranty and the
other Credit Documents shall mean the Guaranty as amended by the Amendment. The
Guaranty shall remain in full force and effect and is hereby ratified and
confirmed and (b) the execution, delivery and effectiveness of this Amendment
shall not, except as expressly provided herein, operate as a waiver of any
right, power, or remedy of the Banks or Agent, nor constitute a waiver of any
provision of the Guaranty or any other Credit Document.
7. MISCELLANEOUS.
(a) COUNTERPARTS. This Amendment may be executed in any number
of identical counterparts, any set of which signed by all the parties
hereto shall be deemed to constitute a complete, executed original for
all purposes.
(b) HEADINGS. Headings in this Amendment are for convenience
of reference only and are not part of the substance hereof.
(c) GOVERNING LAW. This Amendment shall be governed by and
construed in accordance with the laws of the State of California
without reference to conflicts of law rules.
16
<PAGE>
IN WITNESS WHEREOF, Guarantor, Agent and the Banks have caused this
Amendment to be executed as of the day and year first above written.
GUARANTOR: BMC WEST CORPORATION
By: /s/ ELLIS C. GOEBEL
--------------------------------------------
Name: ELLIS C. GOEBEL
Title: Senior VP - Finance & Treasurer
AGENT: WELLS FARGO BANK,
NATIONAL ASSOCIATION, as Agent
By: /s/ ALFRED ARTIS AND DONALD A. HARTMAN
--------------------------------------------
Name: DONALD A. HARTMANN
Title: Senior Vice President
Name: ALFRED ARTIS
Title: Vice President
BANKS: WELLS FARGO BANK,
NATIONAL ASSOCIATION
By: /s/ ALFRED ARTIS AND DONALD A. HARTMAN
--------------------------------------------
Name: DONALD A. HARTMANN
Title: Senior Vice President
Name: ALFRED ARTIS
Title: Vice President
KEYBANK NATIONAL ASSOCIATION
By: /s/ KEVIN P. MCBRIDE
--------------------------------------------
Name: KEVIN P. MCBRIDE
Title: Vice President
U.S. BANK NATIONAL ASSOCIATION
By: /s/ JAMES W. HENKEN
--------------------------------------------
Name: JAMES W. HENKEN
Title: Vice President
17
<PAGE>
Exhibit 10.29
JOINDER AGREEMENT
THIS JOINDER AGREEMENT (this "AGREEMENT"), dated as of May 7, 1999, is
executed by BANK OF AMERICA NATIONAL TRUST AND SAVINGS ASSOCIATION, a national
banking association ("ADDITIONAL BANK"), in favor of the parties to the Credit
Agreement referred to in RECITAL A below.
RECITALS
A. Pursuant to a Third Amended and Restated Credit Agreement effective
as of September 30, 1998 and amended by Amendment No. 1 thereto dated as of
March 31, 1999 (as further amended, supplemented or restated from time to time,
the "CREDIT AGREEMENT"), among BMC West Corporation, a Delaware corporation
("BORROWER"), the financial institutions from time to time parties thereto
(collectively, the "BANKS"), and Wells Fargo Bank, National Association, as
agent for the Banks (in such capacity, "AGENT"), the Banks have agreed to extend
certain credit facilities to Borrower upon the terms and subject to the
conditions set forth therein.
B. Additional Bank will become a party to the Credit Agreement with
certain rights and obligations thereunder and under the other Credit Documents
upon the terms and subject to the conditions set forth in this Agreement.
NOW, THEREFORE, in consideration of the above recitals and for other
good and valuable consideration, the receipt and adequacy of which are hereby
acknowledged, Additional Bank hereby agrees as follows:
1. DEFINITIONS. Capitalized terms used but not defined in this
Agreement shall have the meanings set forth in the Credit Agreement.
2. AGREEMENT TO BE BOUND BY CREDIT AGREEMENT. Effective on the
Effective Date (as defined in SECTION 3 below), Additional Bank hereby (a)
accepts and assumes all rights and obligations under the Credit Documents of a
Bank with the Commitment set forth on ATTACHMENT 1 hereto, including the portion
of Revolving Loans and participations in the Letters of Credit outstanding on
the Effective Date and commitments to purchase participations in Letters of
Credit that are attributable to such Commitment (the "ASSUMED RIGHTS AND
Obligations"), (b) agrees to be bound by the Credit Agreement as it would have
been if it had been an original Bank party thereto, and (c) agrees to perform in
accordance with their terms all of the obligations which are required under the
Credit Documents to be performed by it as a Bank. Additional Bank appoints and
authorizes Agent to take such actions as agent on its behalf and to exercise
such powers under the Credit Documents as are delegated to Agent by the terms
thereof, together with such powers as are reasonably incidental thereto.
3. EFFECTIVENESS. Subject to receipt by Agent of the payments described
in SECTION 4, this Agreement shall become effective on May 7, 1999 (the
"EFFECTIVE DATE").
4. PAYMENTS ON EFFECTIVE DATE. In consideration of the Assumed Rights
and Obligations, on the Effective Date Additional Bank shall pay to Agent for
distribution to each other Bank: (a) the principal amount of the Revolving Loans
made by such other Bank pursuant to the Credit Agreement and outstanding on the
Effective Date that are greater than such other
<PAGE>
Bank's Proportionate Share of all Revolving Loans as determined on the Effective
Date, and (b) the amount of all Drawing Payments for which such other Bank has
reimbursed Issuing Bank that are outstanding on the Effective Date and are
greater than such other Bank's Proportionate Share of all Drawing Payments as
determined on the Effective Date.
5. ALLOCATION AND PAYMENT OF INTEREST AND FEES. Agent shall pay to
Additional Bank all interest, commitment fees and other amounts that are paid by
or on behalf of Borrower pursuant to the Credit Documents and are attributable
to the Assumed Rights and Obligations, that accrue on and after the Effective
Date.
6. REPRESENTATIONS AND WARRANTIES. Additional Bank represents and
warrants to Agent and the other Banks as follows:
(a) It has full power and authority, and has taken all action
necessary, to execute and deliver this Agreement and to fulfill its
obligations under, and to consummate the transactions contemplated by,
this Agreement.
(b) The making and performance of this Agreement and all
documents required to be executed and delivered by it hereunder do not
and will not violate any law or regulation applicable to it.
(c) This Agreement has been duly executed and delivered by it
and constitutes its legal, valid and binding obligation, enforceable in
accordance with its terms.
(d) All approvals, authorizations or other actions by, or
filings with, any governmental authority necessary for the validity or
enforceability of its obligations under this Agreement have been made
or obtained.
(e) Additional Bank has made and shall continue to make its
own independent investigation of the financial condition, affairs and
creditworthiness of Borrower and any other Person obligated under the
Credit Documents (collectively, "CREDIT PARTIES"), and the value of any
collateral now or hereafter securing any of the obligations,
indebtedness, liabilities or undertakings under the Credit Documents
("COLLATERAL"), in connection with its assumption of the Assumed Rights
and Obligations.
(f) Additional Bank has received a copy of the Credit
Documents and such other documents, financial statements and
information as it has deemed appropriate to make its own credit
analysis and decision to enter into this Agreement.
2
<PAGE>
7. NO RESPONSIBILITY BY AGENT OR OTHER BANKS. Neither Agent nor any
other Bank makes any representation or warranty or assumes any responsibility to
Additional Bank for:
(a) the execution (by any party other than such party),
effectiveness, genuineness, validity, enforceability, collectibility or
sufficiency of the Credit Documents or for any representations,
warranties, recitals or statements made in the Credit Documents or in
any financial or other written or oral statement, instrument, report,
certificate or any other document made or furnished or made available
to Additional Bank by such party or by or on behalf of any Credit Party
in connection with the Credit Documents and the transactions
contemplated thereby;
(b) the performance or observance of any of the terms,
conditions, provisions, covenants or agreements contained in any of the
Credit Documents or as to the existence or possible existence of any
Default or Event of Default under the Credit Documents, but this shall
not relieve Agent of any obligation under the Credit Agreement to
deliver notice of such Default or Event of Default; or
(c) the accuracy or completeness of any information provided
to Additional Bank, whether by such party or by or on behalf of any
Credit Party.
Neither Agent nor any other Bank shall have any initial or continuing duty or
responsibility to make any investigation of the financial condition, affairs or
creditworthiness of any of the Credit Parties, or the value of any Collateral,
in connection with Additional Bank's assumption of the Assumed Rights and
Obligations or to provide Additional Bank with any credit or other information
with respect thereto, whether coming into its possession before the date hereof
or at any time or times thereafter, except as otherwise expressly provided in
the Credit Agreement.
8. FOREIGN WITHHOLDING. On or before the Effective Date, Additional
Bank shall comply with the provisions of SUBPARAGRAPH 2.10(b) OF THE CREDIT
AGREEMENT.
9. GENERAL.
(a) This Agreement constitutes the entire understanding with
respect to the subject matter hereof and supersedes all prior and
current understandings and agreements, whether written or oral.
(b) No term or provision of this Agreement may be amended,
waived or terminated orally, but only by an instrument signed by
Additional Bank, Borrower, Agent and Issuing Bank.
(c) This Agreement may be executed in one or more
counterparts. Each set of executed counterparts shall be an original.
Executed counterparts may be delivered by facsimile transmission.
(d) This Agreement shall be binding upon and inure to the
benefit of Additional Bank and the other parties to the Credit
Agreement and their respective successors and assigns. Additional Bank
may not assign or transfer any of its rights or obligations under this
Agreement without the prior written consent of Borrower, Agent,
3
<PAGE>
Issuing Bank and the Required Banks. The preceding sentence shall not
limit the right of Additional Bank to grant to others assignments of or
participations in all or part of the Assumed Rights and Obligations to
the extent permitted by the terms of the Credit Documents.
(e) All payments by or to Additional Bank hereunder shall be
made in United States Dollars, in immediately available funds. Payments
by Additional Bank hereunder shall be made to Agent to the address or
account specified in the Credit Agreement. Payments to Additional Bank
shall be made to the address or account specified on ATTACHMENT 1 to
this Agreement. The address of Additional Bank for notice purposes
under the Credit Agreement shall be as specified on ATTACHMENT 1 to
this Agreement.
(f) If any provision of this Agreement is held invalid,
illegal or unenforceable, the remaining provisions hereof will not be
affected or impaired in any way.
(g) Additional Bank shall bear its own expenses in connection
with the preparation and execution of this Agreement.
(h) This Agreement shall be governed by and construed in
accordance with the laws of the State of California.
4
<PAGE>
IN WITNESS WHEREOF, Additional Bank has executed this Agreement as of
the date first above written.
ADDITIONAL BANK: BANK OF AMERICA NATIONAL TRUST AND
SAVINGS ASSOCIATION
By: /s/ KEVIN LEADER
----------------------------------------
Printed Name: Kevin Leader
Title: Vice President
ACKNOWLEDGED AND AGREED:
BORROWER: BMC WEST CORPORATION
By: /s/ ELLIS C. GOEBEL
----------------------------------------
Printed Name: Ellis C. Goebel
Title: Senior VP - Finance and Treasurer
AGENT: WELLS FARGO BANK, NATIONAL
ASSOCIATION, as Agent
By: /s/ALFRED ARTIS AND DONALD. A. HARTMANN
----------------------------------------
Printed Name: Alfred Artis
Title: Vice President
Printed Name: Donald A. Hartmann
Title: Vice President
ISSUING BANK: WELLS FARGO BANK, NATIONAL
ASSOCIATION, as Issuing Bank
By: /s/ALFRED ARTIS AND DONALD. A. HARTMANN
----------------------------------------
Printed Name: Alfred Artis
Title: Vice President
Printed Name: Donald A. Hartmann
Title: Vice President
5
<PAGE>
ATTACHMENT 1 TO
JOINDER AGREEMENT
<TABLE>
<CAPTION>
BANK Commitment Commitment
Before On and After
Scheduled Scheduled
Reduction Date Reduction Date
-------------- --------------
<S> <C> <C>
D. Bank of America National Trust and Savings Association $25,000,000 $25,000,000
</TABLE>
Applicable Lending Office and Address for Notices:
Bank of America National Trust and Savings Association
555 California Street, 41st Floor
San Francisco, CA 94104
Attention: Kevin C. Leader
Telephone No.: (415) 622-8168
Telecopy No.: (415) 622-4585
Wiring Instructions:
Bank of America National Trust and Savings Association
1850 Gateway Boulevard
Concord, CA 94520
Attention: [ ]
Telephone No.: [ ]
Telecopy No.: [ ]
ABA # 121000358
Account No.: [ ]
Ref: BMC West
6
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1998
<PERIOD-END> MAR-31-1999
<CASH> 8,403
<SECURITIES> 0
<RECEIVABLES> 104,472
<ALLOWANCES> 2,552
<INVENTORY> 82,898
<CURRENT-ASSETS> 197,885
<PP&E> 187,710
<DEPRECIATION> 45,887
<TOTAL-ASSETS> 389,478
<CURRENT-LIABILITIES> 69,534
<BONDS> 128,262
0
0
<COMMON> 13
<OTHER-SE> 182,776
<TOTAL-LIABILITY-AND-EQUITY> 389,478
<SALES> 215,625
<TOTAL-REVENUES> 215,625
<CGS> 161,514
<TOTAL-COSTS> 209,468
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 2,544
<INCOME-PRETAX> 4,100
<INCOME-TAX> 1,579
<INCOME-CONTINUING> 2,521
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 2,521
<EPS-PRIMARY> 0.20
<EPS-DILUTED> 0.20
</TABLE>
