Building Materials: Chapman Requests Meeting To Discuss Costs

In an amended 13D filing after the close on Building Materials Holding Corp. (BLG), 8.1% holder Chapman Capital disclosed a letter to CFO William M. Smartt requesting a meeting with him and the two divisional presidents, BMC West's Stan Wilson and SelectBuild's Mike Mahre, to discuss the company's expense reduction and capital allocation plans.

In the letter, Chapman Capital's Managing Member, Robert L. Chapman, Jr., said:

As I noted when we spoke recently, Building Materials Holding Corporation's cost reduction and capital allocation strategies are of paramount importance to its short and medium term financial performance. Operating margin erosion is the natural result of the hyper-cyclical revenue declines hitting all residential building suppliers. However, it is my view, particularly after having discussions with various parties knowledgeable of Mr. Mellor's spending habits while in his current role at the Company, that your own focus on reversing some of the "boom years'" expense patterns is crucial to BMHC's expeditious path to profitability. Obviously, capital allocation becomes an even more important issue during periods of customer weakness and fiscal restraint.

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