Slide 1: Builders FirstSource + BMC Stock Holdings
Builders FirstSource + BMC Stock Holdings Accelerating Growth, Building Value August 27, 2020
Slide 2: Safe Harbor & Non-GAAP Financial Measures
Safe Harbor & Non-GAAP Financial Measures Cautionary Notice This communication, in addition to historical information, contains “forward-looking statements” (as defined in the Securities Litigation Reform Act of 1995) regarding, among other things, future events or the future financial performance o
Slide 3: Safe Harbor & Non-GAAP Financial Measures: Additional Information
Safe Harbor & Non-GAAP Financial Measures Additional Information and Where to Find It In connection with the proposed business combination, Builders FirstSource intends to file with the SEC a registration statement on Form S-4 (the “Registration Statement”) that will include a prospectus with respec
Slide 4: Today's Presenters
Today’s Presenters Chad Crow David Flitman Peter Jackson Jim Major Builders FirstSource BMC Stock Holdings Builders FirstSource BMC Stock Holdings President & President & Chief Financial Officer Chief Financial Officer Chief Executive Officer Chief Executive Officer 8/27/2020 4
Slide 5: Highly Compelling Strategic Combination
Highly Compelling Strategic Combination Creates the Premier Supplier of Building Materials and Services Increased Geographic Reach to Meet the Needs of Customers in a Highly Fragmented Industry Enhanced and Expanded Suite of Value-Added Offerings Investment in Innovation to Accelerate Next Generatio
Slide 6: Creating the Nation's Premier Supplier of Building Materials and Services
Creating the Nation’s Premier Supplier of Building Materials and Services Combined • 134 Value-Added • 101 Value-Added • 235 Value-Added Operations Product Facilities(1) Product Facilities(1) Product Facilities(1) • 343 LBM Facilities(2) • 109 LBM Facilities(2) • 452 LBM Facilities(2) MSAs Served 20
Slide 7: Bringing Together Two Strong Track Records of M&A Integration and Value Creation
Bringing Together Two Strong Track Records of M&A Integration and Value Creation $110m run-rate synergies delivered 22 Total Acquisitions 6 acquisitions: 3 acquisitions: Completed Over the $75m(1)(2) $6.4bn(3) $120m(1) Last 10 Years $0.7bn $7.5bn Delivering Enhanced Value to Customers $11.2bn 17,500
Slide 8: Transaction Overview
Transaction Overview • All-stock merger transaction • Combined equity value of $5.5 billion and enterprise value of $6.9 billion(1)(2) Transaction Structure • BMC shareholders will receive 1.3125 Builders FirstSource shares for each BMC share • Ownership at transaction close: Builders FirstSource sh
Slide 9: Exceptional Scale and Diversity in a Fragmented Industry
Exceptional Scale and Diversity in a Fragmented Industry Depth and Diversity 1 Scale 2 excellence 3 and range Combined Net Sales by Product(1) Windows, doors & millwork • Exceptional geographic, Lumber & sheet goods • Expanded customer • Enhanced customer customer and end Value-Added 24% 30% reach n
Slide 10: Expansive Geographic Footprint and Deepened Local Relationships in High-Growth MSAs
Expansive Geographic Footprint and Deepened Local Relationships in High-Growth MSAs Regional Breakdown by Combined Net Sales(2) ⚫ ⚫ ⚫ ⚫⚫⚫ ⚫ ⚫⚫ All Other ⚫ ⚫⚫⚫ ⚫ ⚫ ⚫⚫ ⚫ ⚫ ⚫ ⚫ ⚫ ⚫⚫ ⚫ ⚫⚫ ⚫ ⚫ ⚫ ⚫ ⚫ ⚫ ⚫ ⚫ ⚫ ⚫⚫ ⚫ ⚫ ⚫ ⚫ ⚫⚫ ⚫ ⚫ ⚫ ⚫ ⚫ ⚫ ⚫⚫⚫⚫ ⚫ ⚫ ⚫ ⚫ ⚫ ⚫ ⚫ ⚫ ⚫ ⚫⚫ ⚫ ⚫ ⚫ ⚫ West ⚫⚫ ⚫ ⚫ ⚫⚫ ⚫ ⚫ ⚫ ⚫ ⚫⚫ ⚫ ⚫ ⚫ ⚫ ⚫ ⚫
Slide 11: Resilient Industry Dynamics and Record of Market Outperformance
Resilient Industry Dynamics and Record of Market Outperformance Combined Net Sales Growth(6) vs. Housing Starts Growth(7) Long-term Fundamentals Fully Intact (2015 – Q2 2020 CAGR) ~200 bps of +5.7m +5.9m 483k outperformance vs. the market Projected Projected 5.4% population growth 10-year average po
Slide 12: Enhanced Ability to Deliver Value-Added Offerings to Customers Nationwide
Enhanced Ability to Deliver Value-Added Offerings to Customers Nationwide Expands Value-Added Products Offering in the Top 20 Most Active MSAs(1) Combined TTM Q2 Combined 2020 Net Sales Combined Windows, (2) (2) (2) presence in $4.8 billion Doors & 69 48 117 17 of the top Facilities Facilities 62% F
Slide 13: Platform and Resources to Accelerate Innovation and Integrate Even Further with Customers
Platform and Resources to Accelerate Innovation and Integrate Even Further with Customers …To Innovate Future Technology- Foundational Automation and enabled Platforms and Capabilities Technology Capabilities Today… for Tomorrow Computerized Customer Integrated design, component pre-cut order select
Slide 14: Unified Mission and Purpose to Better Serve Customers and Communities
Unified Mission and Purpose to Better Serve Customers and Communities Preferred Supplier Safe, Diverse & Responsible Continue to Serve to Customers Inclusive Workforce Corporate Citizen Our Communities Environmental Stewardship is a Priority for the Combined Company ✓ Energy Efficient Products ✓ Res
Slide 15: Substantial Value Creation Through Targeted Synergies
Substantial Value Creation Through Targeted Synergies Breakdown of Synergy Opportunity Estimated Run-Rate Cost Savings of $130 - $150 million(1) ($ in millions) Distribution Network $130m - $150m Direct 20% Procurement 34% $100m - $120m Incremental Upside $130 - $150 Accelerating value- million(1) $
Slide 16: Strong Balance Sheet and Liquidity Provide Financial Flexibility
Strong Balance Sheet and Liquidity Provide Financial Flexibility Liquidity(1)(2) ~$1.1 billion • Current credit ratings: – Builders FirstSource: B1 / BB- Total Debt(2) $1.6 billion – BMC Stock Holdings: Ba3 / BB- • Amended and upsized revolving credit facility Net Leverage Ratio(2)(3) 1.4x expected
Slide 17: Attractive Combination for All Stakeholders
Attractive Combination for All Stakeholders Combination to create nation’s premier supplier of building materials and services Unified leadership team with proven record of integration success Complementary footprint with enhanced ability to service customers Scaled platform providing greater opport
Slide 18: Appendix
Appendix Xt Builders 8/27/2020 18
Slide 19: Reconciliation of Non-GAAP Financial Measures Builders FirstSource Adj. EBITDA
Reconciliation of Non-GAAP Financial Measures Builders FirstSource Adj. EBITDA Twelve months Three months ended Six months ended ended June 30, June 30, June 30, (in millions) 2020 2019 2020 2019 2020 Reconciliation to Adjusted EBITDA: GAAP Net Income $ 78.9 $ 66.6 $ 87.7 $ 102.3 $ 207.2 Acquisition
Slide 20: Reconciliation of Non-GAAP Financial Measures BMC Stock Holdings Adj. EBITDA
Reconciliation of Non-GAAP Financial Measures BMC Stock Holdings Adj. EBITDA Twelve months Three months ended Six months ended ended June 30, June 30, June 30, (in millions) 2020 2019 2020 2019 2020 Reconciliation to Adjusted EBITDA: Net income $ 43.6 $ 35.7 $ 65.7 $ 56.0 $ 119.4 Interest expense 6.
Slide 21: Reconciliation of Non-GAAP Financial Measures Free Cash Flow
Reconciliation of Non-GAAP Financial Measures Free Cash Flow Twelve months Three months ended ended September 30, December 31, March 31, June 30, June 30, (in millions) 2019 2019 2020 2020 2020 Free Cash Flow Operating activities $ 181 $ 144 $ (51) $ 221 $ 495 Less: Capital expenditures (33) (35) (2