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Revised Condensed Consolidated Financial Statements Of Builders Firstsource, Inc

The following excerpt is from the company's SEC filing.

Note: The information contained in this Item has been updated for the change to reportable segments discussed in the Notes to the Consolidated Financial Statements. This Item has not been updated for any other changes since the filing of the Quarterly Report on Form 10-Q for the quarterly period ended March 31, 2015.

Condensed Consolidated Statements of Operations and Comprehensive Loss (Unaudited) for the Three Months Ended March 31, 2015 and 2014

Condensed Consolidated Balance Sheets (Unaudited) as of March 31, 2015 and December 31, 2014

Condensed Consolidated Statements of Cash Flows (Unau dited) for the Three Months Ended March 31, 2015 and 2014

Notes to Condensed Consolidated Financial Statements (Unaudited)

ART I — FINANCIAL INFORMATION

Item 1.

Financial Statements (unaudited)

BUILDERS FIRSTSOURCE, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS

(In thousands, except per share amounts)

370,986

345,909

Cost of sales

287,253

270,994

Gross margin

83,733

74,915

Selling, general and administrative expenses

82,838

69,318

Facility closure costs

Income from operations

Interest expense, net

Loss from continuing operations before income taxes

(6,966

(3,394

Income tax expense (benefit)

(7,162

(3,312

Income (loss) from discontinued operations (net of income tax expense of $0 in 2015 and 2014)

Net Loss

(7,070

(3,384

Comprehensive Loss

Basic net loss per share:

Diluted loss per share:

Weighted average common shares:

98,204

97,617

98,624

The accompanying notes are an integral part of these condensed consolidated financial statements.

CONDENSED CONSOLIDATED BALANCE SHEETS

December 31,

ASSETS

Current assets:

Cash and cash equivalents

36,837

17,773

Accounts receivable, less allowance of $2,962 and $3,153 at March 31, 2015 and December 31, 2014, respectively

157,221

148,352

Inventories

146,824

138,156

Other current assets

24,215

27,259

Total current assets

365,097

331,540

Property, plant and equipment, net

84,734

75,679

Goodwill

141,090

139,774

Intangible assets, net

16,657

17,228

Other assets, net

17,878

18,844

Total assets

625,456

583,065

LIABILITIES AND STOCKHOLDERS' EQUITY

Current liabilities:

Accounts payable

90,737

75,868

Accrued liabilities

74,083

66,225

Current maturities of long-term debt

55,076

30,074

Total current liabilities

219,896

172,167

Long-term debt, net of current maturities

353,810

353,830

Other long-term liabilities

17,774

16,868

Total liabilities

591,480

542,865

Commitments and contingencies (Note 6)

Stockholders' equity:

Preferred stock, $0.01 par value, 10,000 shares authorized; zero shares issued and outstanding at March 31, 2015 and December 31, 2014, respectively

Common stock, $0.01 par value, 200,000 shares authorized; 98,537 and 98,226 shares issued and outstanding at March 31, 2015 and December 31, 2014, respectively

Additional paid-in capital

380,934

380,091

Accumulated deficit

(347,943

(340,873

Total stockholders' equity

33,976

40,200

Total liabilities and stockholders' equity

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

Three months ended

(In thousands)

Cash flows from operating activities:

Net loss

Adjustments to reconcile net loss to net cash provided by operating activities:

Depreciation and amortization

Amortization of deferred loan costs

Fair value adjustment of stock warrants

Deferred income taxes

Bad debt expense

Stock compensation expense

Net gain on sale of assets

Changes in assets and liabilities:

Receivables

(8,490

(4,531

(7,573

(12,977

Other assets and liabilities

14,868

21,622

Net cash provided by operating activities

13,760

Cash flows from investing activities:

Purchases of property, plant and equipment

(9,124

(5,304

Proceeds from sale of property, plant and equipment

Cash used for acquisitions, net

(5,797

Net cash used in investing activities

(14,861

(5,302

Cash flows from financing activities:

Borrowings under revolving credit facility

25,000

Payments of long-term debt and other loans

Exercise of stock options

Repurchase of common stock

(1,276

Net cash provided by (used in) financing activities

24,062

Net change in cash and cash equivalents

19,064

Cash and cash equivalents at beginning of period

54,696

Cash and cash equivalents at end of period

62,766

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(unaudited)

Basis of Presentation

Builders FirstSource, Inc., a Delaware corporation formed in 1998, is a leading supplier and manufacturer of structural and related building products for residential new construction in the United States. In this quarterly report, references to the “Company,” “we,” “our,” “ours” or “us” refer to Builders FirstSource, Inc. and its consolidated subsidiaries, unless otherwise stated or the context otherwise requires.

In the opinion of management, the accompanying unaudited condensed consolidated financial statements include all recurring adjustments and normal accruals necessary for a fair statement of the Company’s financial position, results of operations and cash flows for the dates and periods presented. Results for interim periods are not necessarily indicative of the results to be expected during the remainder of the current year or for any future period. All significant intercompany accounts and transactions have been eliminated in consolidation.

The condensed consolidated balance sheet as of December 31, 2014 is derived from the audited consolidated financial statements but does not include all disclosures required by accounting principles generally accepted in the United States of America. This condensed consolidated balance sheet as of December 31, 2014 and the unaudited condensed consolidated financial statements included herein should be read in conjunction with the more detailed audited consolidated financial statements for the year ended December 31, 2014 included in our most recent annual report on Form 10-K. Accounting policies used in the preparation of these unaudited condensed consolidated financial statements are consistent with the accounting policies described in the Notes to Consolidated Financial Statements included in our Form 10-K.

Net Loss per Common Share

Net loss per common share (“EPS”) is calculated in accordance with the

Earnings per Share

topic of the Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“Codification”), which requires the presentation of basic and diluted EPS. Basic EPS is computed using the weighted average number of common shares outstanding during the period. Diluted EPS is computed using the weighted average number of common shares outstanding during the period, plus the dilutive effect of potential common shares.

Our restricted stock shares include rights to receive dividends that are not subject to the risk of forfeiture even if the underlying restricted stock shares on which the dividends were paid do not vest. In accordance with the

topic of the Codification, unvested share-based payment awards that contain non-forfeitable rights to dividends are deemed participating securities and should be considered in the calculation of basic EPS. Since the restricted stock shares do not include an obligation to share in losses, they will be included in our basic EPS calculation in periods of net income and excluded from our basic EPS calculation in periods of net loss. Accordingly, there were 27,000 and 82,000 restricted stock shares excluded from the computation of basic EPS for the three months ended March 31, 2015 and 2014, respectively, because we generated a net loss.

For the purpose of computing diluted EPS, weighted average shares outstanding have been adjusted for common shares underlying 0.7 million warrants for the three months ended March 31, 2015. In addition, $0.2 million of income due to fair value adjustments related to the warrants was excluded from our net loss in the computation of diluted EPS for the three months ended March 31, 2015. Warrants to purchase 0.7 million shares of common stock were not included in the computation of diluted EPS for the three months ended March 31, 2014, because their effect was anti-dilutive. Options to purchase 6.4 million and 6.5 million shares of common stock were not included in the computation of diluted EPS for the three months ended March 31, 2015 and 2014, respectively, because their effect was anti-dilutive. 1.5 million restricted stock units (“RSUs”) were not included in the computation of diluted EPS for the three months ended March 31, 2015 because their effect was anti-dilutive. There were no outstanding RSUs during the three months ending March 31, 2014.

The table below presents a reconciliation of weighted average common shares used in the calculation of basic and diluted EPS (in thousands):

Three Months Ended

Weighted average shares for basic EPS

Dilutive effect of warrants

Weighted average shares for diluted EPS

Long-term debt consisted of the following (in thousands):

2021 notes

350,000

2013 facility

55,000

30,000

Other long-term debt

408,886

383,904

Less: current portion of long-term debt

2013 Facility Borrowings

As of March 31, 2015, we have $55.0 million in borrowings outstanding under our $175.0 million senior secured revolving credit facility (the “2013 facility”) at a weighted average interest rate of 2.0%. Amounts borrowed under our 2013 facility have been and will continue to be used to fund working capital needs and potential future acquisitions.

Fair Value

The only financial instrument measured at fair value on a recurring basis was our outstanding warrants.

The table below presents the effect of our derivative financial instrument on the condensed consolidated statements of operations and comprehensive loss (in thousands):

Derivative Not Designated

as Hedging Instrument

Location of Gain (Loss) Recognized in Income

Amount of Gain (Loss)

Recognized in Income

Three Months Ended March 31,

(1,197

We use the income approach to value our warrants by using the Black-Scholes option-pricing model. Using this model, the risk-free interest rate is based on the U.S. Treasury yield curve in effect on the valuation date. The expected life is based on the period of time until the expiration of the warrants. Expected volatility is based on the historical volatility of our common stock over the most recent period equal to the expected life of the warrants. The expected dividend yield is based on our history of not paying regular dividends in the past and our current intention to not pay regular dividends in the foreseeable future.

These techniques incorporate Level 1 and Level 2 inputs. Significant inputs to the derivative valuation for the warrants are observable in the active markets and are classified as Level 2 in the hierarchy.

The following fair value hierarchy table presents information about our financial instrument measured at fair value on a recurring basis using significant other observable inputs (Le

vel 2) (in thousands):

Carrying Value

March 31,

Measurement as of

March 31, 2015

Warrants (included in Other long-term liabilities)

We have elected to...


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