BMHC Reports 23% Increase in Net Income for Fourth Quarter 2001.

Business Editors

SAN FRANCISCO--(BUSINESS WIRE)--Feb. 5, 2002

Sales of Construction Services and Manufactured Building Components

Increase to 54.6% of Total Sales for Fourth Quarter of 2001

Building Materials Holding Corporation (Nasdaq:BMHC) today announced net sales of $275.1 million for the fourth quarter of 2001, up 15.3% from $238.6 million for the fourth quarter of 2000. Net sales of construction services and manufactured building components -- which include framing, installation, millwork, wall panels and trusses -- increased to $150.2 million, or 54.6% of total net sales, for the fourth quarter of 2001, from $103.8 million, or 43.5% of total net sales, for the fourth quarter of 2000. BMHC acquired the remaining 51% of Knipp Brothers Industries and related companies (collectively "KBI") in July of 2001. Fourth quarter 2001 net sales include $50.0 million attributable to the consolidation of KBI results.

Net income for the quarter was $4.3 million, or $0.33 per diluted share, up 22.9% from net income of $3.5 million or $0.27 per diluted share prior to one-time charges in the fourth quarter of 2000 reflecting the sale of a business unit and other consolidation activities. Net income after the one-time charges was $1.4 million or $0.11 per diluted share in the fourth quarter of 2000.

Gross margin expanded to 29.0% from 28.1% in the fourth quarter last year. This increase reflects continued growth in sales of construction services and manufactured building components. Selling, general and administrative expenses were 25.5% of net sales compared with 24.8% a year ago due mainly to higher relative costs associated with construction services and manufactured components.

"We are very pleased with the growth in both sales and income during the fourth quarter," said Robert E. Mellor, President and Chief Executive Officer of Building Materials Holding Corporation. "Our framing business performed very well during the quarter, which contributed to sales and earnings above our expectations. BMHC continues to build on its leading position in the residential construction industry through our dedication to providing professional builders and contractors with a broad range of products and services. We will continue our strategy of marketing BMHC's installed services and manufactured components, which we believe makes it possible for us to increase our market share.

"In 2002, we plan to focus on increasing overall sales from construction services and manufactured building components. Another primary objective is to continue evaluating the efficiency of our business units, with a view toward improving margins and increasing our return on investment. We will continue to evaluate growth opportunities in new and existing markets, balancing acquisitions that complement BMHC's strategy and culture with expansion and construction of our own facilities."

For the year ended December 31, 2001, net sales totaled $1.1 billion compared with $1.0 billion in 2000. Gross margin expanded to 28.1% from 26.7% in 2000. Net sales of construction services and manufactured building components increased to $529.0 million or 48.4% of total net sales for 2001 compared with $410.1 million or 40.4% of total net sales for 2000. Net sales for 2001 include $100.5 million attributable to the consolidation of KBI results. Net income for 2001 was $20.8 million and earnings per diluted share were $1.60, compared with net income of $19.7 million and earnings per diluted share of $1.54 in 2000.

About BMHC

Building Materials Holding Corporation is a leader in the building materials and construction services industry. The Company specializes in providing high quality products, as well as engineering, manufacturing and installation services to professional residential builders and contractors. BMHC operates through its subsidiaries BMC West Corporation and BMC Framing Inc., with 137 facilities organized into 61 business units in 13 Western and Southern states. Keys to the Company's success include concentration on housing markets where growth outpaces national averages, and a strong management structure that keeps BMHC close to local market trends and to the service needs of its customers.

Business Risks and Forward-Looking Statements

Certain statements made in this news release 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 risks or uncertainties may include, but are not limited to changes in costs of materials sold; changes in selling prices; competition within the building materials and construction services industry; changes in economic conditions and interest rates; integration of acquired businesses; increases in raw materials and labor costs; retention of key management personnel; consumer confidence; household and job formation; government regulation; and general economic, business and competitive factors, all or each of which may cause actual results to differ from the statements made in this press release. These risks and uncertainties are discussed in detail in Building Materials Holding Corporation's Form 10-K for the fiscal year ended December 31, 2000. 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 news release.

                BUILDING MATERIALS HOLDING CORPORATION
             CONDENSED CONSOLIDATED STATEMENTS OF EARNINGS
                 (In Thousands, Except Per Share Data)

                      Three Months Ended       Twelve Months Ended
                    Dec. 31       Dec. 31     Dec. 31         Dec. 31
                     2001          2000         2001           2000

Net Sales        $  275,098    $  238,561   $1,092,867     $1,013,968
Cost of Sales       195,406       171,579      785,562        743,523
                 -----------   -----------  -----------    -----------
Gross Profit         79,692        66,982      307,305        270,445

Selling, General
 and
 Administrative
 Expenses            70,079        59,275      265,661        229,861
Other Income
(Expense)               425        (1,715)         985          1,952
                 -----------   -----------  -----------    -----------
Income from
 Operations          10,038         5,992       42,629         42,536

Equity in
 Earnings of
 Unconsolidated
 Subsidiaries,
 net of
 amortization            --         1,818        4,817          8,421
                 -----------   -----------  -----------    -----------
Interest Expense      3,019         4,342       13,553         17,722
                 -----------   -----------  -----------    -----------
Income Before
 Income Taxes         7,019         3,468       33,893         33,235

Income Taxes          2,703         2,063       13,049         13,523
                 -----------   -----------  -----------    -----------
Net Income       $    4,316    $    1,405   $   20,844     $   19,712
                 ===========   ===========  ===========    ===========
Net Income
 Per Diluted
 Common Share    $     0.33    $     0.11   $     1.60     $     1.54
                 ===========   ===========  ===========    ===========

Weighted Average
 Number of
 Diluted Common
 Shares              13,061        12,860       13,009         12,822