Cameron Ashley Reports Record Fiscal 1999 Fourth Quarter and Year End Results.

DALLAS--(BUSINESS WIRE)--Dec. 15, 1999--

Cameron Ashley Building Products, Inc. (NYSE:CAB) today reported record results for both the fourth quarter and fiscal year ended October 31, 1999.

Net sales for the fourth quarter of fiscal 1999 increased 13.7% to $325.0 million from $285.9 million in the prior year period. During the quarter, same-store sales grew 2.6% overall, 1.8% in the Cameron division, and 7.1% in the Ashley division.

Net income for the fourth quarter of 1999 was $7.0 million, or $0.79 per share on a diluted basis, compared to $6.5 million, or $0.71 per diluted share in the fourth quarter of fiscal 1998. Fourth quarter results for the 1999 fiscal year included approximately $1,016,000 pre-tax, or $0.07 per diluted share after-tax, in expenses associated with the systems development and business process re-engineering project in the Cameron division. Results for the 1998 fourth quarter included approximately $322,000 in pre-tax system development expenses and about $343,000 in pre-tax costs associated with the termination of Cameron Ashley Financial Services (CAFS) U.S. operations. Together, these costs impacted the 1998 fourth quarter's net income per share by $0.05 on a diluted basis.

For the twelve months ending October 31, 1999, net sales increased 26.7% to a record $1.14 billion from $899.2 million in 1998. Same-store sales increased 6.4% overall, 6.6% in the Cameron division, and 5.6% in the Ashley division.

Net income for the twelve-month fiscal 1999 period was $17.1 million, or $1.94 per diluted share, compared to $15.3 million, or $1.61 per diluted share in the year-ago period. The twelve-month fiscal 1999 period included approximately $2.6 million pre-tax, or $0.18 per diluted share after-tax, in expenses associated with systems development project. Results for the same period in 1998 included approximately $1.5 million in pre-tax system development costs and the $2.5 million associated with pre-tax losses at CAFS, for a total after-tax impact of about $0.26 per diluted share.

Ronald R. Ross, Chairman and Chief Executive Officer, commented: "We are satisfied with our financial performance this quarter. In particular, we are encouraged by the continuing momentum in same store sales growth, especially in the Ashley division, which had its strongest performance of the year in the fourth quarter. While the Ashley division had the advantage of more favorable weather conditions compared to last year, the underlying sales performance was quite strong due to overall healthy economies in its markets. The Cameron U.S. division excluding APi Supply continues to post strong same store sales. Excluding APi Supply, which benefited from a major hailstorm in the second half of 1998, the U.S. division posted same store sales of 4.5% for the quarter and 9.2% for the year. Canada's performance continued to be impacted by residual softness in British Columbia, which resulted in a continued decline in same-store sales."

Mr. Ross continued: "While we are pleased by our sales growth overall, we are still not generating the sort of operating leverage we would like. Excluding the system conversion costs and other unusual items, income from operations as a percent of revenues was flat quarter-over-quarter as improved gross margins were partially offset by higher field expenses incurred during the deployment of the new information system. We continue to focus on controlling our expenses at the branch level, but our first priority remains satisfying customer orders and requests. With operating managers' compensation largely tied to branch performance, we expect to see improvement in our expense line in the latter half of 2000 as the efficiencies from the information system begin to be realized."

Commenting on the new computer system, Mr. Ross stated: "The U.S. deployment of the system is going as expected. We remain on schedule to complete the roll-out of the systems by early April. We are already realizing improvements in operating performance and productivity in a number of the branches where the new system has been installed. As operating practices between branches become standardized, we expect to capture greater operating leverage and efficiencies through shared services and improvements in the management of product selection, inventories and pricing."

Mr. Ross concluded: "Fiscal 1999 represents the year in which Cameron Ashley reached the $1 billion sales mark. In looking ahead, we are optimistic about our continued growth prospects due to the strength we are seeing in our local markets. Our focus will be on growing the operating leverage we believe exists through proactive utilization of our new system, once fully implemented."

Cameron Ashley Building Products, Inc. is a distributor of a broad line of building products that are used principally in home improvement, remodeling and repair work and in new residential construction. The Company distributes its products to independent building material dealers, professional builders, large contractors and mass merchandisers through a network of 165 branches located throughout the United States and Canada. Product lines include roofing, millwork, pool and patio enclosure materials, insulation, siding, steel products, industrial metals and a variety of other building materials.

Certain statements in this release are "forward-looking statements" that are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Forward-looking statements may be indicated by phrases such as "believes", "anticipates", "expects", "intends", "foresees", "projects", "predicts", "forecasts" or similar words and are subject to known and unknown risks and uncertainties which may cause the Company's actual results in future periods to differ materially from forecasted results. Among the key factors that could cause results to differ materially are: (i) business and economic conditions in North America, (ii) business and economic conditions in the regional markets in which the Company operates, (iii) adverse homebuilding conditions including those related to weather and interest rates, (iv) the ability to make acquisitions at reasonable prices and achieve operating efficiencies upon integration, (v) reliable and cost-effective supply of products from manufacturers, and (vi) technology risks in implementing new and/or converting existing information systems. These risks are more fully described in the Company's filings with the Securities and Exchange Commission. The Company does not undertake any obligations to update the information contained herein, which speaks only as of this date.

Note: More information on Cameron Ashley Building Products can be found on the Wide World Web at http://www.cabp.com. -0-

             CAMERON ASHLEY BUILDING PRODUCTS, INC.
  (Unaudited.  Dollars in thousands, except per share amounts.)

               CONSOLIDATED STATEMENTS OF INCOME

                          For the Three Months  For the Twelve Months
                                 Ended                 Ended
                          10/31/99  10/31/98     10/31/99  10/31/98


   NET SALES              $324,999 $285,909    $1,139,511  $899,217
   COST OF SALES           260,343  230,247       912,722   721,300
   GROSS PROFIT             64,656   55,662       226,789   177,917
   OPERATING EXPENSES       46,276   40,437       172,439   134,734
   RE-ENGINEERING SYSTEM
   & CONVERSION COSTS        1,016      322         2,578     1,545
   EBITDA                   17,364   14,903        51,772    42,638
   DEPRECIATION
   & AMORTIZATION            3,362    2,548        12,511    10,101
   INCOME FROM OPERATIONS   14,002   12,355        39,261    32,537
   INTEREST EXPENSE         (3,002)  (2,432)      (11,664)   (8,019)
   MINORITY INTEREST            17        0           159         0
   INCOME BEFORE INCOME
   TAXES                    11,017    9,923        27,756    24,518
   PROVISION FOR INCOME
   TAXES                     4,043    3,382        10,690     9,224
   CONSOLIDATED NET INCOME $ 6,974  $ 6,541       $17,066   $15,294
   NET INCOME PER SHARE
      BASIC                $  0.80  $  0.73       $  1.97   $  1.65
      ASSUMING DILUTION    $  0.79  $  0.71       $  1.94   $  1.61

   WEIGHTED AVERAGE SHARES
   OUTSTANDING:
      BASIC                  8,681    8,976         8,661     9,250
      ASSUMING DILUTION      8,835    9,145         8,816     9,501


                     BALANCE SHEET DATA

                                 OCTOBER 31,  OCTOBER 31,
                                    1999         1998
                                 (Unaudited)   (Audited)

CURRENT ASSETS                   $  305,993   $ 257,610
TOTAL ASSETS                        437,859     361,733
CURRENT LIABILITIES                 139,529     107,348
LONG-TERM DEBT                      160,113     135,051
TOTAL LIABILITIES                   304,533     246,768
SHAREHOLDERS' EQUITY                133,326     114,965