 Record Net Income, Adjusted EBITDA1 and Adjusted EBITDA Margin1 Accelerating Productivity and Structural Cost Savings InitiativesStrong Operating Cash Flow Drives Liquidity Over 600 Million RALEIGH, N.C., Aug. 03, 2020 GLOBE NEWSWIRE -- BMC Stock Holdings, Inc. Nasdaq: BMCH BMC or the Company, one of the nations leading providers of diversified building materials and solutions to new construction builders and professional remodelers in the U.S., today announced its financial results for the second quarter ended June 30, 2020. Second Quarter 2020 Highlights Net sales increased 3.5 to 979.9 million Gross profit increased 2.9 to 252.8 million SGA expenses as a percent of net sales declined 150 basis points to 17.7 Net income increased 22.2 to 43.6 million Adjusted EBITDA1 improved by 23.2 to a record 90.3 million Adjusted EBITDA margin1 increased 150 basis points to a record 9.2 Diluted earnings per share EPS increased 22.6, or 0.12, to 0.65 Adjusted net income per diluted share1 increased 23.7, or 0.14, to 0.73 Total liquidity was approximately 615.7 million, which included 253.4 million of cash and 362.3 million of borrowing capacity under the revolver, with no debt maturities until 2024. The Company repaid its 144 million precautionary revolver borrowings.Our record second-quarter results exceeded our expectations and were driven by the steadfast execution of our strategy, accelerated productivity and structural cost savings across our business, coupled with a strong pipeline of construction activity, said Dave Flitman, President and CEO of BMC. These strong results are a testament to the determination of our associates, who remain focused on growing our business and providing outstanding customer service despite their personal sacrifice in this unprecedented environment. I couldnt be more proud of their efforts. Mr. Flitman added, Our top priority remains keeping our associates, suppliers and customers safe as the pandemic evolves. We continue to take any and all necessary steps to protect our team while simultaneously growing our value-added products, which remain in high demand from our customers. Mr. Flitman continued, We are pleased that our teams efforts enabled us to generate strong net sales growth in Millwork, Doors and Windows and our Pro Remodel and Multi-Family segments, as well as outperform the market in single-family starts which resulted in record net income, Adjusted EBITDA and Adjusted EBITDA margin in the quarter. We believe our solid first-half results and momentum, coupled with strong homebuyer demand, low housing inventories and record low interest rates will result in continued strength in our business in the second half of 2020. I believe we have the best talent on the field, the right business strategies, and as we remain focused on strengthening our execution, we will continue to transform our company into an operational powerhouse. I am confident that our efforts will enable our ability to sustainably outperform the market and deliver long-term shareholder value.1 Non-GAAP Financial MeasuresThis press release presents Adjusted EBITDA, Adjusted EBITDA margin, Adjusted net income and Adjusted net income per diluted share, which are non-GAAP financial measures within the meaning of applicable SEC rules and regulations. For a reconciliation of Adjusted EBITDA and Adjusted net income to the most comparable GAAP measures and a discussion of the reasons why the Company believes that these non-GAAP financial measures provide information that is useful to investors, see the discussion and tables included in this press release under Reconciliation of GAAP to Non-GAAP Measures.Second Quarter 2020 Summary of Financial Results During the three months ended June 30, 2020, the Company generated strong net income, diluted earnings per share and Adjusted EBITDA. Three Months Ended June 30, in thousands, except per share data2020 2019 Variance Net sales979,896 946,375 33,521 Net income and EPS Net income GAAP43,622 35,699 7,923 Diluted earnings per share GAAP0.65 0.53 0.12 Adjusted net income non-GAAP49,309 39,363 9,946 Adjusted net income per diluted share non-GAAP0.73 0.59 0.14 Adjusted EBITDA non-GAAP90,349 73,329 17,020 Adjusted EBITDA margin non-GAAP9.2 7.7 1.5 Net cash provided by operating activities136,101 51,553 84,548 Second Quarter 2020 Financial Results Compared to Prior Year Period Net sales increased 3.5 to 979.9 million, primarily driven by growth from acquisitions of 4.3, and 2.0 from price inflation. These increases were partially offset by a 2.2 decrease from other organic sales declines due to the impact of the COVID-19 pandemic and a closed location of 0.6. Gross profit increased 2.9 to 252.8 million. Gross profit as a percentage of sales gross margin was 25.8, compared to 26.0 for the second quarter of 2019. The 20 basis point decline in gross margin was driven by a decrease in the gross margin in the lumber and lumber sheet goods and structural components product categories, which benefited from unusually high commodity price-related gross margins during the prior year period, partially offset by an increase in the percent of net sales derived from our millwork, doors and windows product category, which often generates higher gross margins relative to other products. Selling, general and administrative SGA expenses decreased 4.4 or 8.0 million to 173.4 million. Excluding the 4.3 million impact of an out of period correction during the three months ended June 30, 2019, SGA expenses decreased 3.7 million. Other factors impacting SGA expenses were an approximately 10.0 million decrease in employee wages, benefits and other employee-related costs, which was partially offset by an increase of 9.0 million related to SGA expenses of recently acquired businesses. The remaining decrease was primarily related to lower fuel costs and a reduction in other costs. SGA expenses as a percent of net sales declined 150 basis points to 17.7 Depreciation expense, including the portion reported within cost of sales, increased 2.0 million to 15.3 million, compared to 13.3 million in the second quarter of 2019. Merger and integration costs decreased to 0.4 million, consisting primarily of system integration costs, compared to 1.4 million in the second quarter of 2019. Amortization expense was 5.0 million compared to 4.3 million in the second quarter of 2019. This increase was primarily due to the amortization of intangible assets at recently acquired businesses. Interest expense was 6.2 million compared to 5.6 million in the second quarter of 2019. Other income, net, which was derived primarily from state and local tax incentives, interest income and customer service charges, was 2.9 million compared to 3.7 million in the second quarter of 2019. Net income was 43.6 million, or 0.65 per diluted share for the quarter, compared to 35.7 million, or 0.53 per diluted share, in the second quarter of 2019. Adjusted net income1 increased to 49.3 million, or 0.73 per diluted share, compared to Adjusted net income1 of 39.4 million, or 0.59 per diluted share, in the second quarter of 2019. Adjusted EBITDA1 was 90.3 million, up 23.2 from the second quarter of 2019. Adjusted EBITDA margin1, defined as Adjusted EBITDA1 as a percentage of net sales, was a record 9.2, up 150 basis points from the prior year period. Cash provided by operating activities increased 84.5 million to 136.1 million primarily due to changes in working capital. COVID-19 UpdateAs one of the Companys core values, the safety of BMCs associates and families is of the utmost importance during these challenging times. Over the course of the past several months, the Company took numerous steps to protect our associates, suppliers, customers and the community. In mid-March, the Company created a cross-function task force, which continues to meet daily to ensure that the Company is responding with the development of the necessary processes, protocols, training and communications related to our response. The Company has implemented detailed cleaning and disinfecting processes at its facilities and is adhering to social distancing protocols. It also continues to suspend non-essential air travel and is encouraging employees to work from home when possible. To date, the Company and its customers businesses have generally been classified as essential business in most of the jurisdictions in which the Company operates. Liquidity and Capital ResourcesTotal liquidity as of June 30, 2020 was approximately 615.7 million, which included 253.4 million of cash and cash equivalents and 362.3 million of borrowing availability under the Companys asset-backed revolving credit facility. During the first quarter, the Company borrowed 144 million under its revolving credit facility as a precautionary measure. In June 2020, the Company repaid this amount and had no outstanding borrowings under its revolver as of June 30, 2020. In addition, the Company has no long-term debt maturities until 2024.Capital expenditures during the second quarter of 2020, net of proceeds from the sale of property, equipment and real estate, totaled 18.3 million which was down 10.4 million from the prior year period. These expenditures were primarily used to fund purchases of vehicles and equipment to replace aged assets and support increased sales volume and facility, technology and automation investments to support our operations. 