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Builders FirstSource Increases Liquidity By $93 Million To Support Sales Growth

Stocks in this article: BLDR

DALLAS, Dec. 18, 2012 (GLOBE NEWSWIRE) -- Builders FirstSource, Inc. (Nasdaq:BLDR), a leading supplier and manufacturer of structural and related building products for residential new construction in the United States, today announced it amended its first-lien term loan agreement (the "Term Loan") with affiliates of Highbridge Principal Strategies, LLC. The company amended the Term Loan to enhance its liquidity position to support both current and anticipated increases in sales volume.

Floyd Sherman, Builders FirstSource Chief Executive Officer said, "Our year-over-year sales growth exceeded 30% in each of the past four quarters, and we currently see no signs of our sales pace slowing. This strong growth prompted us to proactively seek additional liquidity to support our higher working capital requirements. We believe the $93 million of incremental liquidity to be provided by this transaction will enable us to continue growing market share and take further advantage of improving demand for housing."    

Material terms of the amendment include:

  • Increasing the principal amount by $65 million
  • The additional principal was issued at 95.5%, resulting in approximately $60 million of net cash received after fees and expenses, with no modifications to interest rate and maturity
  • Reducing the minimum cash requirement from $35 million to $15 million
  • Adding a separate $15 million letter of credit ("LC") commitment by SunTrust Bank, which is expected to reduce the company's current cash collateral requirement for LC's by approximately $13 million upon satisfaction of certain post-closing conditions
  • Increasing the minimum specified collateral value to $225 million, contingent upon maintaining certain levels of qualified cash

Commenting on the transaction, Builders FirstSource Senior Vice President and Chief Financial Officer Chad Crow said, "This transaction strengthens our cash and liquidity position, allowing us to continue growing our revenue and improving our free cash flow. This transaction also provides the company greater flexibility in the timing of improving our capital structure through a more comprehensive refinancing of the company. Net cash received from the additional principal of approximately $60 million, along with the $20 million reduction in the minimum cash requirement and the expected $13 million reduction in cash collateral on our LC's, will increase the company's net liquidity by approximately $93 million. We believe this increase in liquidity provides substantial room for growth and enhances our ability to create long-term shareholder value."

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