Stock Building Supply Announces 2013 Fourth Quarter and Full Year Results

Stock Building Supply Announces 2013 Fourth Quarter and Full Year Results

Fourth Quarter 2013 Net Income of $3.0 Million and Adjusted EBITDA of $9.6
Million

RALEIGH, N.C., Feb. 25, 2014 (GLOBE NEWSWIRE) -- Stock Building Supply
Holdings, Inc. (Nasdaq:STCK), a large, diversified lumber and building
materials distributor and solutions provider that sells primarily to new
construction and remodeling contractors, today reported its financial results
for the fourth quarter and year ended December 31, 2013.

Fourth Quarter 2013 Financial Highlights

  *Net sales of $305.2 million, up 21.0%, compared to $252.1 million for the
    fourth quarter of 2012
  *Operating income of $5.1 million, compared to operating loss of $5.2
    million for the fourth quarter of 2012
  *Net income of $3.0 million, compared to a net loss of $3.8 million for the
    fourth quarter of 2012
  *Adjusted EBITDA of $9.6 million, compared to $3.1 million for the fourth
    quarter of 2012

Full Year 2013 Financial Highlights

  *Net sales of $1,197.0 million, up 27.0%, compared to $942.4 million for
    full year 2012
  *Net loss of $4.6 million, including $10.0 million of initial public
    offering ("IPO") transaction-related costs, compared to net loss of $14.5
    million for full year 2012
  *Adjusted EBITDA of $27.8 million, compared to $2.0 million for full year
    2012

Commenting on the Company's results, Jeff Rea, Chief Executive Officer of
Stock Building Supply, stated, "During the fourth quarter of 2013, the U.S.
housing industry continued its recovery and our business delivered strong
revenue growth and profit improvement. Over the course of 2013, our net sales
to single-family homebuilders grew nearly 31% and our net sales to remodeling
contractors increased over 18%. This revenue growth, which outpaced the
underlying increase in US single-family housing starts of 15.5%, as reported
by the US Census Bureau, enabled us to expand our operating profit margins and
accelerate investments in our business."

Commenting on the fourth quarter and full year results, Jim Major, Executive
Vice President and Chief Financial Officer, stated, "During the past year, we
continued to implement our productivity initiatives in order to achieve margin
improvements from our net sales growth and operating cost structure. These
initiatives contributed to a reduction in our selling, general and
administrative expenses as a percentage of net sales to 21.3% for full year
2013, compared to 23.5% in 2012. We also increased our gross profit as a
percentage of net sales to 22.9% for full year 2013 as compared to 22.8% in
2012 and achieved sequential improvements in our gross margin percentage
during each of the last three quarters of 2013."

Mr. Major added, "In February 2014, we increased the size of our secured
revolving credit facility from $150.0 million to $200.0 million and extended
the maturity to December 31, 2017. We believe this amendment will further
enhance our ability to capitalize on future growth and productivity
opportunities and maintain an attractive overall cost of capital."

Fourth Quarter 2013 Financial Results Compared to Prior Year Period

Net sales for the fourth quarter of 2013 totaled $305.2 million, up $53.1
million, or 21.0%, compared to $252.1 million in the fourth quarter of 2012.
The Company estimates net sales increased 18.7% related to increased volume
and 2.3% due to increased selling prices. The increase in sales volume was
primarily driven by increased single-family housing starts and increased
demand arising from higher remodeling activity.

Gross profit in the fourth quarter of 2013 was $73.7 million, up $16.0
million, or 27.7%, compared to $57.7 million in the fourth quarter of 2012,
primarily as a result of increased sales volume. The gross margin percentage
for the fourth quarter of 2013 increased 130 basis points to 24.2% from 22.9%
in the fourth quarter of 2012, primarily as a result of structural components
and windows and other exterior products representing a higher percentage of
total net sales, improved gross margins on sales of lumber and lumber sheet
goods and increased consideration from suppliers due to higher purchase
volume.

Selling, general and administrative expenses during the fourth quarter of 2013
were $66.5 million, up $8.9 million, or 15.4%, from $57.6 million in the
fourth quarter of 2012. This increase was primarily driven by variable costs
to serve higher sales volume, such as sales commissions, shipping and handling
costs and other variable compensation, which increased by $4.6 million. Other
salary, wage, benefit and taxation costs increased $3.8 million, primarily as
a result of headcount additions to serve increased sales volume and sales
opportunities arising from the improved residential construction market.

Operating income in the fourth quarter of 2013 was $5.1 million, compared to
an operating loss of $5.2 million in the fourth quarter of 2012. Net income
during the quarter totaled $3.0 million, or $0.11 per diluted share, compared
to a net loss of $3.8 million, or ($0.36) per diluted share, in the fourth
quarter of 2012.

Adjusted EBITDA in the fourth quarter of 2013 totaled $9.6 million, up $6.5
million, compared to $3.1 million in the fourth quarter of 2012. Adjusted
income from continuing operations for the fourth quarter of 2013 increased
$4.1 million to $3.6 million, compared to an adjusted net loss from continuing
operations of $0.5 million in the fourth quarter of 2012. A reconciliation of
non-GAAP (adjusted) financial measures to comparable GAAP financial measures
is provided as an appendix to this release.

Full Year 2013 Financial Results Compared to Full Year 2012

Net sales for 2013 totaled $1,197.0 million, up $254.6 million, or 27.0%,
compared to $942.4 million in 2012. The Company estimates net sales increased
19.6% related to increased volume and 7.4% due to increased selling prices.
The increase in sales volume was primarily driven by increased single-family
housing starts and increased demand arising from higher remodeling activity.

Gross profit in 2013 was $274.4 million, up $59.7 million, or 27.8%, compared
to $214.7 million in 2012, primarily as a result of increased sales volume.
The gross margin percentage increased 10 basis points to 22.9% from 22.8%.

Selling, general and administrative expenses for 2013 were $254.9 million, up
$33.7 million, or 15.3%, from $221.2 in 2012. This increase was primarily
driven by variable costs to serve higher sales volume, such as sales
commissions, shipping and handling costs and other variable compensation,
which increased by $18.9 million. Other salary, wage, benefit and taxation
costs increased $10.3 million, primarily as a result of headcount additions to
serve increased sales volume and sales opportunities arising from the improved
residential construction market.

Operating income for 2013 was $0.8 million compared to an operating loss of
$18.9 million in 2012. Net loss for 2013 was $4.6 million, or ($0.36) per
diluted share, compared to a net loss of $14.5 million, or ($1.83) per diluted
share, in 2012. During 2013, the Company's operating income and net loss were
impacted by $10.0 million of IPO transaction-related costs, which included a
$9.0 million fee for terminating our management services agreement with The
Gores Group, LLC.

Adjusted EBITDA in 2013 totaled $27.8 million, up $25.8 million, compared to
$2.0 million in 2012. Adjusted income from continuing operations in 2013
increased $16.3 million to $7.4 million, compared to an adjusted loss from
continuing operations of $8.9 million in 2012. A reconciliation of non-GAAP
(adjusted) financial measures to comparable GAAP financial measures is
provided as an appendix to this release.

Liquidity and Capital Resources

Total liquidity as of December 31, 2013 was approximately $72.1 million, which
includes cash and cash equivalents of $1.1 million and $71.0 million of
borrowing availability under our existing revolver.

Capital expenditures during the fourth quarter and full year 2013 totaled $4.9
million and $7.4 million, respectively, primarily to fund purchases of
delivery fleet and material handling equipment.

Outlook

"While we are pleased with the progress our business made over the past year,
we see many opportunities to expand and enhance our capabilities to serve our
customers," added Mr. Rea. "As we look ahead to 2014, we are encouraged by
macro-economic trends that generally support growth in residential new
construction and remodeling activity. While many of our customers and local
operations have been impacted by adverse weather events quarter-to-date, as we
look ahead to the balance of 2014, we remain optimistic. Additionally, we
intend to accelerate investment in our core product and service capabilities
in order to capture the growth opportunities that will be available to us as
the housing recovery continues."

Conference Call

Stock Building Supply will host a conference call on Tuesday, February 25,
2014 at 8:30 a.m. Eastern Time and will simultaneously broadcast it live over
the Internet. The conference call can be accessed by dialing 877-407-0784
(domestic) or 201-689-8560 (international). A telephonic replay will be
available approximately three hours after the call and can be accessed by
dialing 877-870-5176, or for international callers, 1-858-384-5517. The
passcode for the live call and the replay is 13575802. The telephonic replay
will be available until 11:59 pm (Eastern Time) on March 4, 2014. The live
webcast and archived replay can also be accessed on the Company's investor
relations website at ir.stocksupply.com. The online archive of the webcast
will be available for approximately 90 days.

About Stock Building Supply

Stock Building Supply operates in 21 metropolitan areas in 14 states primarily
in the South and West regions of the United States (as defined by the U.S.
Census Bureau). Today, we serve our customers from 69 strategically located
facilities. We offer approximately 39,000 stock keeping units, as well as a
broad range of customized products, including lumber and lumber sheet goods,
millwork, doors, flooring, windows, structural components, engineered wood
products, trusses, wall panels and other exterior products. Our customer base
includes production homebuilders, custom homebuilders and remodeling
contractors.

Non-GAAP Financial Measures

This press release presents Adjusted EBITDA and Adjusted income (loss) from
continuing operations, which are non-GAAP financial measures within the
meaning of applicable Securities and Exchange Commission rules and
regulations. For a reconciliation of Adjusted EBITDA and Adjusted income
(loss) from continuing operations under generally accepted accounting
principles and for a discussion of the reasons why the Company believes that
these non-GAAP financial measures provide information that is useful to
investors, see the tables below under "Reconciliation of GAAP to Non-GAAP
Measures."

Forward-Looking Statements

This press release contains forward-looking statements, which are subject to
substantial risks, uncertainties and assumptions. You should not place
reliance on these statements. These statements often include words such as
"believe," "expect," "anticipate," "intend," "plan," "estimate," "seek,"
"will," "may" or similar expressions. These risks include, but are not limited
to, the following: (i) the state of the homebuilding industry and repair and
remodeling activity; (ii) seasonality and cyclicality of the building products
supply and services industry; (iii) competitive industry pressures and
competitive pricing pressure from our customers; (iv) inflation or deflation
of commodity prices; (v) litigation or claims relating to our products and
services; (vi) our ability to maintain profitability; (vii) our ability to
attract and retain key employees and (viii) product shortages and
relationships with key suppliers. Further information regarding factors that
could impact our financial and other results can be found in the Risk Factors
section of our Quarterly Report on Form 10-Q, filed with the Securities and
Exchange Commission (the "SEC") on October 31, 2013, and subsequent filings
with the SEC. These statements are based on certain assumptions that we have
made in light of our experience in the industry as well as our perceptions of
expected future developments and other factors we believe are appropriate in
these circumstances. As you read and consider this press release, you should
understand that these statements are not guarantees of performance or results.
Many factors could affect our actual performance and results and could cause
actual results to differ materially from those expressed in the
forward-looking statements. All forward-looking statements attributable to us
or persons acting on our behalf are expressly qualified in their entirety by
the foregoing cautionary statements. All such statements speak only as of the
date made, and we undertake no obligation to update or revise publicly any
forward-looking statements, whether as a result of new information, future
events or otherwise.

                                      

STOCK BUILDING SUPPLY HOLDINGS, INC. AND SUBSIDIARIES 
Condensed Consolidated Statements of Operations 
(unaudited)
                                                                
                          Three Months ended December Year ended December 31,
                           31,
                          2013          2012          2013         2012
(in thousands of dollars,
except share and per share                                       
amounts)
Net sales                  $ 305,190     $ 252,134     $ 1,197,037  $ 942,398
Cost of goods sold         231,468       194,407       922,634      727,670
Gross profit               73,722        57,727        274,403      214,728
Selling, general and       66,477        57,625        254,935      221,192
administrative expenses
Depreciation expense       1,174         1,857         5,890        7,759
Amortization expense       564           377           2,236        1,470
Impairment of assets held  432           361           432          361
for sale
IPO transaction-related    —             —             10,008       —
costs
Restructuring expense      11            2,687         141          2,853
                          68,658        62,907        273,642      233,635
Income (loss) from         5,064         (5,180)       761          (18,907)
operations
Other income (expense),                                          
net
Interest expense           (643)         (967)         (3,793)      (4,037)
Other income, net          274           242           870          278
Income (loss) from
continuing operations      4,695         (5,905)       (2,162)      (22,666)
before income taxes
Income tax benefit         (1,798)       2,134         (2,874)      8,084
(expense)
Income (loss) from         2,897         (3,771)       (5,036)      (14,582)
continuing operations
Income from discontinued
operations, net of tax     60            1             401          49
expense of $6, $27, $243
and $52, respectively
Net income (loss)          2,957         (3,770)       (4,635)      (14,533)
Redeemable Class B Senior
Preferred stock deemed     —             (1,114)       (1,836)      (4,480)
dividend
Accretion of beneficial
conversion feature on      —             —             —            (5,000)
Convertible Class C
Preferred stock
Income (loss) attributable $ 2,957       $ (4,884)     $ (6,471)    $ (24,013)
to common stockholders
Weighted average common                                          
shares outstanding
Basic                      25,586,462    13,440,380    18,205,892   13,153,446
Diluted                    26,194,684    13,440,380    18,205,892   13,153,446
                                                                
Basic income (loss) per                                          
share
Income (loss) from         $ 0.12        $ (0.36)      $ (0.38)     $ (1.83)
continuing operations
Income from discontinued   —             —             0.02         —
operations
Basic net income (loss)    $ 0.12        $ (0.36)      $ (0.36)     $ (1.83)
per share
                                                                
Diluted income (loss) per                                        
share
Income (loss) from         $ 0.11        $ (0.36)      $ (0.38)     $ (1.83)
continuing operations
Income from discontinued   —             —             0.02         —
operations
Diluted net income (loss)  $ 0.11        $ (0.36)      $ (0.36)     $ (1.83)
per share


STOCK BUILDING SUPPLY HOLDINGS, INC. AND SUBSIDIARIES
Condensed Consolidated Balance Sheets
(unaudited)
                                                                
                                                    December31, December31,
                                                     2013        2012
(in thousands of dollars, except share and per share             
amounts)
Assets                                                           
Current assets                                                   
Cash and cash equivalents                            $ 1,138      $ 2,691
Restricted assets                                    460          3,821
Accounts receivable, net                             111,285      90,297
Inventories, net                                     91,303       73,918
Costs in excess of billings on uncompleted contracts 7,921        5,176
Assets held for sale                                 2,363        6,198
Prepaid expenses and other current assets            9,332        8,682
Deferred income taxes                                3,332        3,562
Total current assets                                 227,134      194,345
Property and equipment, net of accumulated           56,039       55,076
depreciation
Intangible assets, net of accumulated amortization   24,789       25,865
Goodwill                                             7,186        6,511
Restricted assets                                    1,359        2,202
Other assets                                         2,033        2,013
Total assets                                         $ 318,540    $ 286,012
Liabilities and Stockholders' Equity                             
Current liabilities                                              
Accounts payable                                     $ 64,984     $ 74,231
Accrued expenses and other liabilities               30,528       25,277
Revolving line of credit                             —            72,218
Income taxes payable                                 2,989        2,939
Current portion of restructuring reserve             1,594        1,513
Current portion of capital lease obligation          1,240        1,329
Billings in excess of costs on uncompleted contracts 1,599        1,239
Total current liabilities                            102,934      178,746
Revolving line of credit                             59,072       —
Long-term portion of capital lease obligation        6,011        5,635
Deferred income taxes                                15,496       16,983
Other long-term liabilities                          7,346        9,007
Total liabilities                                    190,859      210,371
Commitments and contingencies                                    
Redeemable Class A Junior Preferred stock, $0.01 par
value, no shares authorized, issued and outstanding
at December 31, 2013, 10,000 shares authorized and   —            —
issued, 5,100 shares outstanding at December 31,
2012
Redeemable Class B Senior Preferred stock, $0.01 par
value, no shares authorized, issued and outstanding
at December 31, 2013, 500,000 shares authorized,     —            36,477
75,000 shares issued, 36,388 shares outstanding at
December 31, 2012
Convertible Class C Preferred stock, $0.01 par
value, no shares authorized, issued and outstanding  —            5,000
at December 31, 2013, 5,000 shares authorized,
issued and outstanding at December 31, 2012
Stockholders' equity                                             
Class A common stock, $0.01 par value, no shares
authorized, issued and outstanding at December 31,   —            116
2013, 22,725,500 shares authorized and issued,
11,590,005 shares outstanding at December 31, 2012
Class B common stock, $0.01 par value, no shares
authorized, issued and outstanding at December 31,   —            29
2013, 3,246,500 shares authorized, 2,870,712 shares
issued and outstanding at December 31, 2012
Preferred stock, $0.01 par value, 50,000,000 shares
authorized, no shares issued and outstanding at      —            —
December 31, 2013, no shares authorized, issued and
outstanding at December 31, 2012
Common stock, $0.01 par value, 300,000,000 shares
authorized, 26,112,007 shares issued and outstanding 261          —
at December 31, 2013, no shares authorized, issued
and outstanding at December 31, 2012
Additional paid-in capital                           144,570      46,534
Retained deficit                                     (17,150)     (12,515)
Total stockholders' equity                           127,681      34,164
Total liabilities and stockholders' equity           $ 318,540    $ 286,012


STOCK BUILDING SUPPLY HOLDINGS, INC. AND SUBSIDIARIES 
Condensed Consolidated Statements of Cash Flows 
(unaudited) 
                                                                 
                                                      Year ended December 31,
                                                      2013        2012
(in thousands of dollars)                                         
Cash flows from operating activities                              
Net loss                                               $ (4,635)   $ (14,533)
Adjustments to reconcile net loss to net cashused in             
operating activities
Depreciation expense                                   9,827       10,299
Amortization of intangible assets                      2,236       1,470
Amortization of debt issuance costs                    596         902
Deferred income taxes                                  (1,257)     (3,633)
Noncash stock compensation expense                     1,049       1,305
Impairment of assets held for sale                     432         481
(Loss) gain on sale of property, equipment and real    (60)        169
estate
Gain on reduction of earnout liability                 (195)       —
Bad debt expense                                       1,051       2,333
Change in assets and liabilities                                  
Accounts receivable                                    (21,008)    (27,026)
Inventories, net                                       (16,858)    (22,712)
Costs in excess of billings on uncompleted contracts   (2,745)     (1,288)
Prepaid expenses and other current assets              (650)       (784)
Current income taxes receivable/payable                50          12,110
Other assets                                           (13)        2,314
Accounts payable                                       (10,795)    24,821
Accrued expenses and other liabilities                 3,736       1,798
Restructuring reserve                                  (1,522)     1,125
Billings in excess of costs on uncompleted contracts   360         131
Other long-term liabilities                            137         (1,525)
Net cash used in operating activities                  (40,264)    (12,243)
Cash flows from investing activities                              
Change in restricted assets                            4,204       3,069
Purchase of business                                   (2,373)     (5,732)
Loan to seller of Total Building Services Group, LLC   —           (850)
Proceeds from sale of property, equipment and real     3,754       1,393
estate
Purchases of property and equipment                    (7,448)     (2,741)
Net cash used in investing activities                  (1,863)     (4,861)
Cash flows from financing activities                              
Proceeds from revolving line of credit                 1,301,290   1,042,850
Repayments of proceeds from revolving line of credit   (1,314,436) (1,004,482)
Redemption of Class B Preferred stock                  —           (12,372)
Proceeds from issuance of common stock, net of         55,225      —
offering costs
Loans from related parties                             401         11
Sale of Class B Preferred stock                        —           328
Dividends paid on Class B Preferred stock              —           (10,628)
Payments of debt issuance costs                        (298)       (555)
Payments on capital leases                             (1,610)     (1,311)
Secured borrowings                                     2           997
Net cash provided by financing activities              40,574      14,838
Net (decrease) increase in cash and cash equivalents   (1,553)     (2,266)
Cash and cash equivalents                                         
Beginning of period                                    2,691       4,957
End of period                                          $ 1,138     $ 2,691


STOCK BUILDING SUPPLY HOLDINGS, INC. AND SUBSIDIARIES
Sales by Product Category
(unaudited)
                                                                 
                      Three months ended December Three months ended 
                       31, 2013                    December 31, 2012
(in thousands of       Net Sales      % of Sales   Net Sales   % of   % Change
dollars)                                                       Sales
Structural components  $40,608      13.3%        $28,935   11.5%  40.3%
Millwork & other       57,979         19.0%        47,634      18.9%  21.7%
interior products
Lumber& lumber sheet  98,641         32.3%        93,231      37.0%  5.8%
goods
Windows & other        67,649         22.2%        52,114      20.7%  29.8%
exterior products
Other building         40,313         13.2%        30,220      11.9%  33.4%
products& services
Total net sales        $305,190     100.0%       $252,134  100.0% 21.0%
                                                                 
                      Year ended                  Year ended         
                      December 31, 2013           December 31, 2013  
(in thousands of       Net Sales      % of Sales   Net Sales   % of   % Change
dollars)                                                       Sales
Structural components  $157,975     13.2%        $106,745  11.3%  48.0%
Millwork & other       219,191        18.3%        178,449     18.9%  22.8%
interior products
Lumber& lumber sheet  428,384        35.8%        333,952     35.5%  28.3%
goods
Windows & other        249,711        20.9%        202,532     21.5%  23.3%
exterior products
Other building         141,776        11.8%        120,720     12.8%  17.4%
products& services
Total net sales        $1,197,037   100.0%       $942,398  100.0% 27.0%

            STOCK BUILDING SUPPLY HOLDINGS, INC. AND SUBSIDIARIES
                 Reconciliation of GAAP to Non-GAAP Measures
                                 (unaudited)

EBITDA is defined as net income (loss) before interest expense, income tax
expense (benefit) and depreciation and amortization. Adjusted EBITDA is
defined as EBITDA plus impairment of assets held for sale, IPO
transaction-related costs, restructuring expense, discontinued operations, net
of taxes, management fees, non-cash compensation expense, acquisition costs,
severance and other expense related to store closures and business
optimization, other expense related to reduction of a tax indemnification
asset and other items. Adjusted income (loss) from continuing operations is
defined as net income as adjusted for the same items deducted from EBITDA in
calculating Adjusted EBITDA, and after tax effecting those items. EBITDA,
Adjusted EBITDA and Adjusted income (loss) from continuing operations are
intended as supplemental measures of our performance that are not required by,
or presented in accordance with, generally accepted accounting principles in
the United States ("GAAP"). We believe that EBITDA, Adjusted EBITDA and
Adjusted income (loss) from continuing operations provide useful information
to management and investors regarding certain financial and business trends
relating to our financial condition and operating results. Our management uses
EBITDA and Adjusted EBITDA to compare our performance to that of prior periods
for trend analyses, for purposes of determining management incentive
compensation and for budgeting and planning purposes. EBITDA and Adjusted
EBITDA are used in monthly financial reports prepared for management and our
board of directors. We believe that the use of EBITDA, Adjusted EBITDA and
Adjusted income (loss) from continuing operations provide additional tools for
investors to use in evaluating ongoing operating results and trends and in
comparing our financial measures with other distribution and retail companies,
which may present similar non-GAAP financial measures to investors. However,
our calculation of EBITDA, Adjusted EBITDA and Adjusted income (loss) from
continuing operations are not necessarily comparable to similarly titled
measures reported by other companies. Our management does not consider EBITDA,
Adjusted EBITDA or Adjusted income (loss) from continuing operations in
isolation or as alternatives to financial measures determined in accordance
with GAAP. The principal limitation of EBITDA, Adjusted EBITDA and Adjusted
income (loss) from operations is that they exclude significant expenses and
income that are required by GAAP to be recorded in the Company's financial
statements. Some of these limitations are: (i)EBITDA, Adjusted EBITDA and
Adjusted income (loss) from continuing operations do not reflect changes in,
or cash requirements for, our working capital needs; (ii)EBITDA and Adjusted
EBITDA do not reflect our interest expense, or the requirements necessary to
service interest or principal payments on our debt; (iii)EBITDA and Adjusted
EBITDA do not reflect our income tax expenses or the cash requirements to pay
our taxes; (iv)EBITDA, Adjusted EBITDA and Adjusted income (loss) from
continuing operations do not reflect historical cash expenditures or future
requirements for capital expenditures or contractual commitments and
(v)although depreciation and amortization charges are non-cash charges, the
assets being depreciated and amortized will often have to be replaced in the
future and EBITDA, Adjusted EBITDA and Adjusted income (loss) from continuing
operations do not reflect any cash requirements for such replacements. In
order to compensate for these limitations, management presents EBITDA,
Adjusted EBITDA and Adjusted income (loss) from continuing operations in
conjunction with GAAP results. You should review the reconciliations of net
income (loss) to EBITDA, Adjusted EBITDA and Adjusted income (loss) from
continuing operations below, and should not rely on any single financial
measure to evaluate our business.

STOCK BUILDING SUPPLY HOLDINGS, INC. AND SUBSIDIARIES 
Reconciliation of GAAP to Non-GAAP Measures (continued)
(unaudited) 
                                                                
The following is a reconciliation of net income (loss) to EBITDA and Adjusted
EBITDA.

                                                                
                                      Three months ended Year ended
                                       December 31,       December 31,
(in thousands of dollars)              2013     2012      2013      2012
Net income (loss)                      $ 2,957  $ (3,770) $ (4,635) $ (14,533)
Interest expense                       643      967       3,793     4,037
Income tax expense (benefit)           1,798    (2,134)   2,874     (8,084)
Depreciation and amortization          3,002    2,879     12,060    11,718
EBITDA                                 $ 8,400  $ (2,058) $ 14,092  $ (6,862)
Impairment of assets held for sale (a) 432      361       432       361
IPO transaction-related costs (b)      —        —         10,008    —
Restructuring expense                  11       2,687     141       2,853
Discontinued operations, net of taxes  (60)     (1)       (401)     (49)
Management fees (c)                    102      282       1,307     1,379
Non-cash compensation expense          476      236       1,049     1,305
Acquisition costs (d)                  —        238       257       284
Severance and other expense related to
store closures and business            392      1,340     1,113     2,375
optimization (e)
Reduction of tax indemnification asset —        —         —         347
(f)
Other items (g)                        (195)    —         (195)     —
Adjusted EBITDA                        $ 9,558  $ 3,085   $ 27,803  $ 1,993


STOCK BUILDING SUPPLY HOLDINGS, INC. AND SUBSIDIARIES
Reconciliation of GAAP to Non-GAAP Measures (continued)
(unaudited)
                                                               
The following is a reconciliation of net income (loss) to Adjusted income
(loss) from continuing operations.
                                                               
                              Three months ended      Year ended
                               December 31,            December 31,
(in thousands of dollars)      2013       2012         2013        2012
Net income (loss)              $ 2,957    $ (3,770)    $ (4,635)   $ (14,533)
Impairment of assets held for  432        361          432         361
sale (a)
IPO transaction-related costs  —          —            10,008      —
(b)
Restructuring expense          11         2,687        141         2,853
Discontinued operations, net   (60)       (1)          (401)       (49)
of taxes
Management fees (c)            102        282          1,307       1,379
Non-cash compensation expense  476        236          1,049       1,305
Acquisition costs (d)          —          238          257         284
Severance and other expense
related to store closures and  392        1,340        1,113       2,375
business optimization (e)
Reduction of tax               —          —            —           347
indemnification asset (f)
Other items (g)                (195)      —            (195)       —
Tax effect of adjustments to   (472)      (1,860)      (1,690)     (3,183)
continuing operations (h)
Adjusted income (loss) from    $ 3,643    $ (487)      $ 7,386     $ (8,861)
continuing operations
                                                               
(a) Impairment of assets held for sale represents the write down of such
assets to the lower of depreciated cost or estimated fair value less expected
disposition costs.
(b) Represents a $9.0 million fee for terminating our management services
agreement with Gores and $1.0 million of other IPO transaction-related costs
for the year ended December 31, 2013.
(c) Represents the expense for management services provided by Gores through
August 2013 and professional services provided by an affiliate of Gores.
(d) Represents acquisition costs related to the acquisitions of Total Building
Services Group, LLC ("TBSG") and Chesapeake Structural Systems, Inc., Creative
Wood Products, LLC and Chestruc, LLC (collectively "Chesapeake").
(e) Represents (i) $0.0 million, $0.2 million, $0.2 million and $0.5 million
of severance expense for the three months ended December 31, 2013 and 2012 and
the years ended December 31, 2013 and 2012, respectively and (ii) $0.4
million, $1.1 million, $0.9 million and $1.8 million related to closed
locations, consisting of pre-tax losses incurred during closure and
post-closure activities, for the three months ended December 31, 2013 and 2012
and the years ended December 31, 2013 and 2012, respectively.
(f) Represents expense related to the reduction of a tax indemnification
asset, with a corresponding increase in income tax benefit, for the year ended
December 31, 2012. This indemnification asset corresponds to the long-term
liability related to uncertain tax positions for which Wolseley plc had
indemnified the Company, which was reduced upon the expiration of the statute
of limitations for certain tax periods.
(g) Represents a gain of $0.2 million for the three months and year ended
December 31, 2013 related to the reduction of an earnout liability associated
with the TBSG acquisition.
(h) The tax effect of adjustments to continuing operations, excluding
approximately $9.2 million of non-deductible IPO transaction-related costs for
the year ended December 31, 2013 and $0.3 million of a non-deductible
reduction of a tax indemnification asset for the year ended December 31, 2012,
was based on the respective transactions' income tax rate, which was 38.7%,
36.2%, 34.6% and 37.2% for the three months ended December 31, 2013 and 2012
and the years ended December 31, 2013 and 2012, respectively.

CONTACT: Investor Relations Contact
         Stock Building Supply Holdings, Inc.
         Mark Necaise
         (919) 431-1021

         or

         Solebury Communications Group LLC
         Richard Zubek
         (919) 431-1133

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