As filed with the Securities and Exchange Commission on May 9, 2017

Registration No. 333-

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM S-1
REGISTRATION STATEMENT
UNDER THE
SECURITIES ACT OF 1933

US LBM Holdings, Inc.
(Exact name of registrant as specified in its charter)


Delaware (State or other jurisdiction of incorporation or organization)		5030 (Primary Standard Industrial Classification Code Number)		82-1332143 (I.R.S. Employer Identification Number)

1000 Corporate Grove Drive
Buffalo Grove, Illinois 60089
(847) 353-7800
(Address, including zip code, and telephone number, including area code, of registrant's principal executive offices)

Patrick McGuiness
Executive Vice President and Chief Financial Officer
US LBM Holdings, Inc.
1000 Corporate Grove Drive
Buffalo Grove, Illinois 60089
(847) 353-7800
(Name, address, including zip code, and telephone number, including area code, of agent for service)


with copies to:
Peter J. Loughran, Esq. Debevoise & Plimpton LLP 919 Third Avenue New York, NY 10022 (212) 909-6000		Dwight S. Yoo, Esq. Skadden, Arps, Slate, Meagher & Flom LLP 4 Times Square New York, NY 10036 (212) 735-3000

Approximate date of commencement of proposed sale of the securities to the public:
As soon as practicable after this registration statement becomes effective.

If any of the securities being registered on this Form are to be offered on a delayed or continuous basis pursuant to Rule 415 under the Securities Act of 1933, check the following box: o

If this Form is filed to register additional securities for an offering pursuant to Rule 462(b) under the Securities Act, please check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering: o

If this Form is a post-effective amendment filed pursuant to Rule 462(c) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. o

If this Form is a post-effective amendment filed pursuant to Rule 462(d) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. o

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company or an emerging growth company. See the definitions of "large accelerated filer," "accelerated filer," "smaller reporting company," and "emerging growth company" in Rule 12b-2 of the Exchange Act.


Large accelerated filer o		Accelerated filer o		Non-accelerated filer ý (Do not check if a smaller reporting company)		Smaller reporting company o Emerging growth company o

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 7(a)(2)(B) of the Securities Act. o

CALCULATION OF REGISTRATION FEE

Title of Each Class of Securities to be Registered	Proposed Maximum Aggregate Offering Price^1,2	Amount of Registration Fee




Class A common stock, par value $0.01 per share	$100,000,000	$11,590

¹: Estimated solely for the purpose of calculating the registration fee in accordance with Rule 457(o) under the Securities Act of 1933.
²: Includes shares of Class A common stock that may be sold upon exercise of the underwriters' option to purchase additional shares.

The registrant hereby amends this registration statement on such date or dates as may be necessary to delay its effective date until the registrant shall file a further amendment which specifically states that this registration statement shall thereafter become effective in accordance with Section 8(a) of the Securities Act of 1933 or until this registration statement shall become effective on such date as the Securities and Exchange Commission, acting pursuant to said Section 8(a), may determine.

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The information in this preliminary prospectus is not complete and may be changed. These securities may not be sold until the registration statement filed with the Securities and Exchange Commission is effective. This prospectus is not an offer to sell these securities and we are not soliciting offers to buy these securities in any jurisdiction where the offer or sale is not permitted.

SUBJECT TO COMPLETION, DATED MAY 9, 2017

Shares

US LBM Holdings, Inc.

Class A Common Stock

This is an initial public offering of shares of Class A common stock of US LBM Holdings, Inc. All of the shares of Class A common stock are being sold by us.

Prior to this offering, there has been no public market for the Class A common stock. We intend to apply to list our Class A common stock on under the symbol "LBM".

We anticipate that the initial public offering price will be between $ and $ per share of Class A common stock.

After the completion of this offering, we will be a "controlled company" within the meaning of the corporate governance standards of .

We will contribute the net proceeds that we receive from this offering to LBM Midco, LLC ("US LBM LLC") in exchange for newly-issued common membership interests of US LBM LLC (the "LLC Interests"). The amount contributed for the LLC Interests will be equal to the public offering price of our Class A common stock, less the underwriting discount referred to below. We intend to cause US LBM LLC to use the net proceeds it receives from us in connection with this offering as described under "Use of Proceeds." Although we will have a minority economic interest in US LBM LLC, because we will be the sole managing member of US LBM LLC, we will operate and control all of the business and affairs of US LBM LLC and, through US LBM LLC and its subsidiaries, conduct our business. See "The Reorganization Transactions."

We will have two classes of common stock outstanding after this offering: Class A common stock and Class B common stock. Each share of Class A common stock and Class B common stock entitles its holder to one vote on all matters presented to our stockholders generally.

Investing in our Class A common stock involves risks. See "Risk Factors" beginning on page 21 of this prospectus.

	Per Share	Total

Initial public offering price	$	$
Underwriting discounts and commissions¹	$	$
Proceeds, before expenses, to us	$	$

¹: We have agreed to reimburse the underwriters for certain expenses in connection with this offering. See "Underwriting (Conflicts of Interest)."

The underwriters also may purchase up to additional shares of Class A common stock from us at the initial offering price less the underwriting discounts and commissions, within 30 days from the date of this prospectus.

Neither the Securities and Exchange Commission nor any state securities commission has approved or disapproved of these securities or passed upon the adequacy or accuracy of this prospectus. Any representation to the contrary is a criminal offense.

The underwriters expect to deliver the shares to purchasers on or about , 2017.


Barclays		RBC Capital Markets		Credit Suisse

Prospectus dated , 2017

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Prospectus Summary		1
Risk Factors		21
Special Note Regarding Forward-Looking Statements		50
The Reorganization Transactions		52
Use of Proceeds		58
Dividend Policy		59
Capitalization		60
Dilution		61
Selected Consolidated Financial Data		64
Unaudited Pro Forma Combined Financial Statements		68
Management's Discussion and Analysis of Financial Condition and Results of Operations		72
Letter From L.T. Gibson, Our Founder, President and Chief Executive Officer		103
Business		105
Management		120
Executive Compensation		125
Principal Stockholders		146
Certain Relationships and Related Party Transactions		149
Description of Capital Stock		155
Shares Available for Future Sale		162
Description of Certain Indebtedness		164
Material U.S. Federal Tax Considerations for Non-U.S. Holders		172
Underwriting (Conflicts of Interest)		176
Validity of Class A Common Stock		183
Experts		183
Where You Can Find More Information		183
Index To Financial Statements		F-1

You should rely only on the information contained in this prospectus and any free writing prospectus we may authorize to be delivered to you. We have not, and the underwriters have not, authorized anyone to provide you with information different from, or in addition to, that contained in this prospectus and any related free writing prospectus. We and the underwriters take no responsibility for, and can provide no assurances as to the reliability of, any information that others may give you. This prospectus is an offer to sell only the shares offered hereby, but only under circumstances and in jurisdictions where it is lawful to do so. The information contained in this prospectus is only accurate as of the date of this prospectus, regardless of the time of delivery of this prospectus and any sale of shares of our Class A common stock.

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BASIS OF PRESENTATION

In connection with the closing of this offering, we will effect certain organizational transactions. Unless otherwise stated or the context otherwise requires, all information in this prospectus reflects the consummation of the organizational transactions, which we refer to collectively as the "Reorganization Transactions," and this offering. See "The Reorganization Transactions" for a description of the Reorganization Transactions and a diagram depicting our organizational structure after giving effect to the Reorganization Transactions and this offering.

As used in this prospectus, unless the context otherwise requires, references to:

•: "we," "us," "our," the "Company," and similar references refer: (i) following the consummation of the Reorganization Transactions and this offering, to US LBM Holdings, Inc. ("Holdings"), and, unless otherwise stated or the context otherwise requires, all of its subsidiaries, including US LBM LLC, and (ii) on or prior to the completion of the Reorganization Transactions and this offering, to US LBM LLC (or US LBM Holdings, LLC, the predecessor to US LBM LLC, for periods prior to the Acquisition (as defined below)) and, unless otherwise stated or the context otherwise requires, all of its subsidiaries.
•: "Continuing LLC Owner" refers to LBM Acquisition, LLC, the entity that will continue to own LLC Interests after the Reorganization Transactions and this offering and that will be entitled, following the consummation of this offering, to exchange its LLC Interests for shares of our Class A common stock as described in "Certain Relationships and Related Party Transactions—Related party agreements entered into in connection with this offering and the Reorganization Transactions—Amended and Restated LLC Agreement of US LBM LLC."
•: "Former LLC Owners" refer to those Original LLC Owners (as defined below) that have agreed to transfer their LLC Interests for shares of our Class A common stock in connection with the consummation of this offering.
•: "LLC Interests" refer to the single class of common membership interests of US LBM LLC.
•: "Original LLC Owners" refer to the direct and indirect owners of US LBM LLC prior to the Reorganization Transactions and this offering, including Continuing LLC Owner and the Former LLC Owners.

We will be a holding company and the sole managing member of US LBM LLC and, upon completion of this offering and the application of proceeds therefrom, our principal asset will be LLC Interests of US LBM LLC. US LBM LLC is the predecessor of the issuer, US LBM Holdings, Inc., for financial reporting purposes. US LBM Holdings, Inc. will be the financial reporting entity following this offering. Accordingly, this prospectus contains the following historical financial statements of the Company:

•: US LBM Holdings, Inc. Other than the inception balance sheet, dated as of April 27, 2017, the historical financial information of US LBM Holdings, Inc. has not been included in this prospectus as it is a newly incorporated entity, has no business transactions or activities to date and had no assets or liabilities during the periods presented in this prospectus.
•: LBM Midco, LLC. As we will have no other interest in any operations other than those of LBM Midco, LLC and its subsidiaries, the historical consolidated financial information included in this prospectus is that of LBM Midco, LLC and its subsidiaries. As a result of the Acquisition, the historical consolidated financial information included in this prospectus is presented in two periods: the period prior to the Acquisition ("Predecessor") and the period succeeding the Acquisition ("Successor").

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PROSPECTUS SUMMARY

The following summary highlights information contained elsewhere in this prospectus and does not contain all of the information that you should consider before investing in our Class A common stock. You should read this entire prospectus, including the sections entitled "Risk Factors," "Management's Discussion and Analysis of Financial Condition and Results of Operations" and "Unaudited Pro Forma Combined Financial Statements" and our consolidated financial statements and the related notes to those statements, before making an investment decision.

Our Company

We are one of the leading and fastest growing distributors of specialty building materials in the United States. We believe our differentiated operating model, technology capabilities and broad offering of specialty products enable us to distinguish ourselves from both local and national competitors within our industry. We serve as a critical link in the building materials supply chain, supplying more than 60,000 stock keeping units, or SKUs, for custom homebuilders and specialty contractors. Our comprehensive portfolio of building materials includes specialty products such as windows, doors, millwork, roofing, siding, cabinetry and wallboard, as well as wood products, with specialty products comprising approximately 75% of the overall mix in 2016. We believe that our business units hold leading market positions in many of the local markets we serve. We have designed our operating model to leverage our scale and national platform, together with local expertise and relationships, to outperform our competitors.

Founded in 2009 as three business units with 16 locations, we have rapidly grown our business through acquisitions, market share gains and the opening of new "greenfield" locations. Since our founding, we have acquired over 40 companies and opened 19 new greenfield locations, expanding to 240 locations serving 29 states. Our founder-led management team continues to drive this multi-pronged growth strategy.

In fiscal year 2016, we generated $2.7 billion of net sales, $47.7 million of net loss and $187.9 million of Adjusted EBITDA. During the last five years, we have delivered significant above market sales growth, growing comparable location sales on average 704 basis points faster than our addressable market, and have grown total net sales at a compound annual growth rate, or CAGR, of 50.1%. In addition, our significant number of acquisitions during this period coupled with our differentiated operating model and focus on operational excellence have resulted in growth in Adjusted EBITDA at a CAGR of 91.6% since 2012, and an increase in our gross margin and Adjusted EBITDA margin of 206 and 439 basis points, respectively. For a discussion of our use of Adjusted EBITDA and Adjusted EBITDA margin, which are measures not presented in accordance with GAAP (as defined below), and a reconciliation to net income (loss), see "Prospectus Summary—Summary Historical Consolidated Financial and Other Data."

Our operating model combines the scale and operational advantages of a national platform with a local go-to-market strategy across a large portion of the United States. Our business units have been operating for an average of 70 years, forging strong local relationships with their local customer bases. We tailor our products and services to meet the needs of our local markets, while also taking advantage of the purchasing synergies, information technology infrastructure, operational improvements and product cross-selling opportunities provided by our national platform. Our organizational focus continually strives for effective change and operational improvement. We believe our differentiated operating model enables us to benefit from economies of scale while maintaining the high-quality customer service, strong local brand recognition and keen understanding of the local market, which allow our business units to cater to the distinct needs of our customers.

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remodel, or R&R, and commercial new construction end markets. We maintain key relationships with many of the largest manufacturers of building materials, allowing our local business units to take advantage of attractive pricing, rebates and other terms negotiated at the corporate level, while making the purchasing and inventory management decisions at the local level where product preferences can vary greatly by geography. Additionally, we facilitate purchasing relationships between our suppliers and our customers by transferring technical product knowledge, educating contractors on proper usage and installation techniques for new products, ensuring local product availability and extending trade credit vital to our local markets.

We offer a comprehensive line of building materials with a significant mix of specialty products. In 2013, we launched our Product Line Manager, or PLM, initiative which consists of product-dedicated managers focused on driving the expansion of specialty products across our locations. This initiative has delivered significant benefits across our roofing, cabinetry, decking, siding and fasteners product lines and we plan to implement the initiative across additional business units and product categories to drive profitable growth. From 2014 to 2016 our mix of specialty products increased as a percentage of net sales from approximately 69% to approximately 75%. The charts below summarize our 2016 net sales by product category, customer type and end market.

Note:: Note: Percentages may not foot due to rounding.

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The table below summarizes our major product categories:

	Wood Products	Windows, Doors & Millwork	Wallboard & Metal Studs	Roofing & Siding	Engineered Components	Cabinetry	Hardlines & Other Products & Services

Description	• Dimensional lumber used for on-site framing • Engineered wood	• Wood and synthetic door and trim products • New and replacement window materials	• Wallboard used for finishing interior walls and ceilings, metal studs, tracks, headers and related products	• Asphalt, metal, tile and wood shake roofing materials • Siding products	• Floor and roof trusses and wall panels	• Kitchen and bathroom cabinetry, countertops and related products	• Various other smaller product categories and installation services
2016 net sales	$656.5 million	$500.4 million	$446.0 million	$285.1 million	$232.1 million	$193.3 million	$350.6 million
% of 2016 net sales	24.6%	18.8%	16.7%	10.7%	8.7%	7.3%	13.2%
Estimated National Addressable Market Size¹	$15.7 billion	$28.3 billion	$4.1 billion	$24.0 billion	$5.3 billion	$23.3 billion	$8.1 billion
Estimated Addressable Market Share¹	~4%	~2%	~11%	~1%	~4%	~1%	~4%
Primary End Markets	• Residential new construction • R&R	• Residential new construction • R&R • Commercial new construction	• Residential new construction • R&R • Commercial new construction	• Residential new construction • R&R • Commercial new construction	• Residential new construction • R&R	• Residential new construction • R&R • Commercial new construction	• Residential new construction • R&R • Commercial new construction
Select Suppliers	• Boise Cascade • Weyerhaeuser • BlueLinx • Georgia Pacific	• Andersen • Jeld-Wen • Masonite • Marvin	• National Gypsum • American Gypsum • Georgia Pacific • Continental Building Products	• CertainTeed • GAF • Owens Corning	• Mitek • ITW (Alpine)	• MasterBrand • Legacy • Dura Supreme	• Do it Best • Simpson Strong-Tie • PrimeSource Building Products

¹: Estimated National Addressable Market Size and Estimated Market Share based on independent research of Principia Consulting, LLC, a third-party consulting firm ("Principia"), commissioned by us. Estimated National Addressable Market Size includes residential and commercial new construction as well as residential R&R.

Our Industry

The building materials distribution industry in the United States is highly fragmented, with a number of retailers and distributors offering a broad range of products and services. The main drivers for our products are residential new construction, R&R activity and commercial new construction. Historically, residential and commercial new construction have been cyclical, while the R&R drivers of our business have been more stable. Over the past several decades, the commercial construction cycle has typically lagged the residential construction cycle by approximately 12 to 24 months. We believe this lag, along with the more stable nature of the R&R market, helps mitigate a portion of the cyclicality in many of our individual end-markets. Further, we believe our geographic diversity helps to mitigate the impact of volatility in any of the regions in which our business units operate.

While single family starts, which account for approximately 48% of our net sales in 2016, have increased 82% from 2011 to 2016, they remain 25% below their long-term historical average of 1.04 million annual starts since 1970. Similarly, new commercial construction square footage put in place increased 34% to 0.9 billion from 2011 to 2016, but remains 25% below the long-term historical

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market average of 1.3 billion square feet annually (measured as the average from 1970 to 2016). We expect demand for our products to increase as the construction markets continue to grow.

Housing Starts

Peak¹	1,716	782	934	54.4	%
Long-Term Average²	1,038	782	256	24.7	%
Average Cyclical Low³	798	782	16	2.1	%

Source: U.S. Census Bureau.

¹: Prior peak occurred in 2005.
²: Average since 1970.
³: Prior downturn troughs include 1975, 1982, 1991.

Our Competitive Strengths

We believe that we will continue to benefit significantly from the following competitive strengths:

Market leader with significant scale advantages

We are one of the leading specialty building materials distributors in the United States, and we believe our business units hold leading market positions in many of the local markets we serve. We believe that our local go-to-market strategy and leading market positions enable us to drive local relationships and generate strong customer loyalty, while our scale and national platform provide us with significant advantages relative to local, independent distributors that are typically our main competitors, including:

•: broad specialty product offering designed to create a one-stop-shop for our customers;
•: advantageous purchasing and sourcing, capitalizing on economies of scale and significant investment in pricing and procurement analysis;
•: integrated and scalable technology platform combining a sophisticated enterprise resource planning system, or ERP, logistics and mobile capabilities, which enables us to streamline our operations, reduce cost and deliver superior service to enhance customer relationships;
•: substantial investment focused on continuous operational improvement, including through our US1 professional development programs, which utilize "Lean" and "Six Sigma" initiatives to further drive business efficiency and enhance customer satisfaction; and

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•: recruiting, training and retaining top talent through our specialized programs, such as our internal training program US LBM University, and strong financial incentives tied to operational performance.

Proven track record of market share gains

We believe that our success in driving above market sales growth is due to our local go-to-market strategy, management driven growth initiatives and increased utilization of technology to service our customers, which have enabled us to capture additional market share within our existing footprint:

•: Local go-to-market strategy. In addition to retaining local brands, our business units operate locally and tailor their product and service offerings to the local preferences of the markets they serve and leverage local relationships to generate strong customer loyalty. We believe this local go to market strategy enhances our ability to drive market share gains.
•: Product Line Manager initiative. In 2013, we launched our PLM initiative which focuses on driving the expansion of specialty product penetration in our existing locations. This initiative has delivered significant benefits across our roofing, cabinetry, decking, siding and fasteners product lines and we plan to implement the initiative across additional business units and product categories to drive profitable growth.
•: Customer focused technology platform. Our technology platform drives business generation and customer loyalty through improved reliability, enhanced service and tools to more efficiently order and monitor products and deliveries on a real-time basis. Further, our data-driven management allows us to identify and maximize growth opportunities across our locations and customer base.

Demonstrated ability to acquire and integrate businesses units

Our management has demonstrated a core strength in identifying, acquiring and successfully integrating leading business units, creating greater scale within our existing footprint and driving expansion into new markets. Since our founding, we have completed over 40 acquisitions and have successfully integrated the new business units through the implementation of operational improvements, upgraded technology systems and enhanced management training. We believe our success in acquiring local, independent distributors has been driven by our selective acquisition criteria including a focus on culture and strategic benefits. We aim to be the partner of choice for local, independent distributors whose owners may be seeking liquidity while maintaining the opportunity to continue operating their business in an entrepreneurial manner. A typical acquisition generally involves retaining the local brand and empowering the management team to make operational decisions at the local level. At the same time, we support our local teams with our national platform, supplier relationships, pricing and procurement programs and working capital management. We believe this approach provides us with a significant competitive advantage for attracting potential acquisition targets.

Integrated and scalable technology infrastructure

We focus on the use of technology to improve customer service and productivity. Our integrated ERP system enables us to coordinate activities within and across our business units, including purchasing, pricing, dispatch and delivery. We utilize cloud-based logistics technology systems to enhance our local teams' ability to manage operations by optimizing delivery schedules and providing fleet and inventory management. Our customized mobile platform provides our customers with a mobile application that allows them to access invoice information and receive delivery schedules, alerts when deliveries have been made to the job site and proof of delivery. We believe we are an early adopter of a customer mobile application in our industry, and we expect our mobile platform to be a

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key competitive advantage. We believe that our technology initiatives have increased our profitability, further strengthened customer loyalty and differentiate us from our competitors.

Strategic diversity across products, customers, suppliers and markets

We complement our diverse product mix of more than 60,000 SKUs across multiple major categories with superior customer service and value-added capabilities. We offer a comprehensive line of building materials that are used across residential new construction, R&R and commercial new construction projects. We also provide a full range of complementary services, such as design and engineering, job estimating, logistics solutions, structural components, millwork design and product selection and customization. We believe that the breadth of our products and services, together with our local market and customer focus, provides us with a competitive advantage and enables us to build and maintain stronger relationships with our core homebuilder and professional remodeler customers than both our national and local competitors. Further, we believe that the breadth and diversity of our products and services limits our exposure to pricing and volume fluctuations in any one category of products or services.

Our broad base of more than 30,000 customers is highly diversified with our top ten customers representing less than 10% of our net sales in 2016, with no single customer accounting for more than 2% of our net sales. We maintain relationships with over 2,000 suppliers and maintain multiple suppliers for many of our products, thereby limiting the risk of disruption and product shortages. Further, our diverse geographic footprint of 240 locations serving 29 states limits our dependence on any one region.

Superior financial performance

Our comparable location sales growth outpaced the relevant addressable market by an average of 704 basis points annually during the last five years, as illustrated in the chart below.

Note:: Reflects US LBM comparable location sales growth. See "Management's Discussion and Analysis of Financial Condition and Results of Operations—Factors and trends affecting our operating results—Key Business and Performance Metrics" for a discussion of how we define comparable location sales. Market growth is the combined growth of our product categories in the United States and based on independent research of Principia commissioned by us. Percentages may not foot due to rounding.

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Adjusted EBITDA margin by 206 and 439 basis points, respectively, resulting in gross margin and Adjusted EBITDA margin of 28.0% and 7.1%, respectively, for fiscal year 2016.

Our strong financial performance has generated strong operating cash flows that provide us with the financial flexibility to pursue our growth strategies through both investments in our existing businesses as well as strategic acquisitions. Our flexible cost structure allows us to adjust rapidly to changing industry dynamics and our low level of capital expenditures, which accounted for 1.6% of net sales in 2016, further enhances our total cash flow generation.

Experienced management team that is aligned with stockholders

Our senior management team has an average of over 20 years of relevant experience. Our Chief Executive Officer and founder, L.T. Gibson, has over 25 years of experience in the industry as does our Chief Operating Officer Jeff Umosella. Consistent themes across our management team are strong industry experience and a proven track record of financial and operational excellence, as well as a determined focus on team chemistry and operational efficiency. This management approach is centered on an active presence in the field and sharing of best practices across our business units. Since our founding, our management team has successfully acquired and integrated over 40 companies that have allowed us to grow net sales while expanding margins.

Further, through incentivized compensation structures and our employees' significant equity ownership in the Company, we have been able to retain top talent and ensure our local management teams are invested in the success of our company. Prior to this offering, our management and other key employees account for approximately 10.7% of our equity ownership (assuming conversion of all outstanding LLC Interests).

Our Strategy

Our objective is to strengthen our competitive position and increase stockholder value through the following key strategies:

Grow market share within our existing geographic markets

Since 2012, we have delivered significant above market organic net sales growth, growing on average 704 basis points faster than our served markets. We believe that our success in driving above market growth is due to our local go-to-market strategy, management driven growth initiatives and increased utilization of technology to service our customers. We also utilize financial incentives, training and technology to maximize the effectiveness of our salesforce as we work to provide tailored solutions for our customers in our local markets.

•: PLM Initiative. One of our core management growth initiatives is focused on cross-selling our diverse set of specialty products across our entire platform. Our PLM initiative consists of product-dedicated managers who assist local business units to coordinate purchasing, sales and marketing efforts in their respective product lines, which is designed to drive greater product penetration and profitable growth. Our current product categories with a designated PLM include roofing, cabinetry, decking, siding and fasteners, and in the near term we expect to add additional categories, including wallboard, to capitalize on extensive product knowledge and supplier relationships gained from recent acquisitions. We continue to demonstrate strong momentum in the locations that have fully implemented our PLM initiative, and we plan to continue to implement our PLM initiative across our business units and expand into additional product categories to drive profitable growth.
•: Technology Platform. We are also focused on leveraging our integrated technology platform to increase engagement across our customer base. Our new customer mobile application enables

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our customers to input orders and download billing statements, track orders and deliveries and receive 24/7 access to product availability. It also alerts our customers to new promotions and allows them to view, share and register for company sponsored events. We are focused on increasing customer utilization of our mobile platform which we believe will drive business generation and enhanced customer loyalty. We also plan to leverage our data-driven management to identify and capitalize on new growth opportunities.

Accelerate growth by selectively executing acquisitions and opening new greenfield locations

We believe that significant opportunities exist to expand our market share and geographic footprint by executing selective acquisitions and opening new greenfield locations.

•: Selective acquisitions. We will continue to selectively pursue strategic acquisitions to supplement our organic growth. Due to the large, highly fragmented nature of our industry, we believe we have a robust acquisition pipeline that our management is continually cultivating. We selectively pursue independent distributors that are culturally compatible and meet our growth and business model criteria. We typically target independent distributors that already hold leading market positions in the local markets they serve. We believe our industry reputation, our demonstrated ability to successfully integrate acquisitions, and our entrepreneurial culture allow us the opportunity to review a large percentage of acquisition opportunities that come to market and be selective on the acquisitions we do pursue.

Additionally, the breadth of our product offering enables us to evaluate and acquire acquisition targets across a wide range of building materials and services. As a result of our scale, pricing and procurement programs, technology infrastructure and ability to improve operations through implementing best practices, we believe we can achieve substantial cost saving synergies from our acquisitions. In addition, our diverse product offering and our ability to source and stock specialty building products at our new acquisitions presents significant cross-selling opportunities. For example, our acquisitions of Feldman Lumber Company, Wallboard Supply Company, and Rosen Materials have significantly enhanced our scale in the wallboard and metal studs product category, enabling us to secure improved wallboard pricing for many of our other business units. In addition, our broad product offering enables us to cross-sell additional products through acquired companies which such companies did not previously sell.

•: New greenfield locations. Our strategy for opening new greenfield locations is to further penetrate markets that are adjacent to our existing operations. Since our founding, we have opened 19 new greenfield locations. Typically, we have pre-existing customer relationships in these markets but need a new location to capitalize fully on those relationships and to facilitate further expansion of our customer base. Relative to our size and scale, the capital investment required to open a new facility is usually small, and new greenfield locations typically achieve positive EBITDA in their first year. Additionally, we strive to align the opening of new greenfield locations with our PLM initiative to accelerate growth in specialty product categories. For example, we opened three new greenfield locations after acquiring Hines Supply, which enabled us to leverage Hines' strong relationships in its local market and complement our strategy to drive significant net sales growth and gross margin expansion.

Achieve improved financial performance through implementation of operational initiatives

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category spending and realizing cost savings through optimizing our purchasing. We have also developed a pricing framework supported by an analytics-driven pricing model that is customized for each business unit to optimize price and margins based on customer profile and purchasing history. To date, our procurement and pricing initiatives have resulted in approximately $5 million of savings and we believe that these areas represent significant opportunities for the Company and that these initiatives will continue to strengthen our relationships with vendors and customers, enhance top-line growth and further improve our margin profile.

We also intend to drive improved financial performance by leveraging our leading technology platform and our dedicated focus on continuous improvement. Our technology platform provides benefits to our customers, reduces our logistics costs, and improves our fleet utilization. Our ERP system facilitates the collection of real-time inventory and performance tracking data, which enables our business units to monitor and constantly strive for improved performance metrics. Finally, we will continue to utilize "Lean" and "Six Sigma" training to regularly promote operational best practices across our business units to increase productivity while reducing costs.

Continue to invest in attracting, training and retaining top quality employees

We believe our growth will be driven by the quality of our employees and our ability to continuously develop talent. We spend considerable time and resources training our employees across all major functions of our operations. In addition to recruiting and training, we have developed an extensive leadership training program focused on promoting financial acumen, operational best practices and safety expertise. More than 3,500 associates have completed courses in our US1 "Lean" and "Six Sigma" programs to date, including over 100 "Six Sigma" certified "green belts" and five "black belts" (as described in "Business—Training and Development"). We believe the investment we make in developing talent is critical to supporting our growth strategy and fostering an entrepreneurial culture, resulting in many of our existing managers being promoted from within our organization. We also believe that our size, scale and ongoing growth provides employees with outstanding career advancement opportunities, which further enables us to recruit and retain top talent.

Risks Affecting our Business

We are subject to a number of risks, including risks that may prevent us from achieving our business objectives or that may adversely affect our business, financial condition, results of operations, cash flows and prospects. You should carefully consider the risks discussed in the section entitled "Risk Factors," including the following risks, before investing in our Class A common stock:

•: the state of the residential new construction, repair and remodel and commercial new construction markets;
•: general economic and financial conditions;
•: competitive industry pressures;
•: the fluctuation in prices of the products we distribute;
•: the consolidation of our industry;
•: product shortages and relationships with key suppliers;
•: product liability and other claims or legal proceedings related to our business;
•: our ability to attract highly qualified associates and other key personnel;
•: our current level of indebtedness; and
•: our organizational structure, including our obligations under the Tax Receivable Agreements.

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Our Structure

Our business is conducted through US LBM LLC and its subsidiaries. In connection with the Reorganization Transactions described under the heading "The Reorganization Transactions" elsewhere in this prospectus, Holdings will become the sole managing member of US LBM LLC.

In connection with the Reorganization Transactions, the indirect ownership interests in US LBM LLC held by the Former LLC Owners will be converted into shares of our Class A common stock. In addition, the limited liability company agreement of US LBM LLC will be amended and restated to, among other things, modify its capital structure to create and issue the LLC Interests to be held by Continuing LLC Owner and Holdings following this offering. Holdings will then issue to Continuing LLC Owner one share of its Class B common stock for each LLC Interest that Continuing LLC Owner holds. The shares of Class B common stock have no rights to dividends or distributions, whether in cash or stock, but entitle the holder to one vote per share on matters presented to the stockholders of Holdings. See "Description of Capital Stock." The principal investors in Continuing LLC Owner consist of the Kelso Affiliates (defined below), funds affiliated with BlackEagle Partners, LLC ("BlackEagle") and certain members of our management.

We and Continuing LLC Owner will also enter into an exchange agreement under which, beginning six months after the completion of this offering, Continuing LLC Owner (or its permitted transferees) will have the right, from time to time and subject to the terms of the exchange agreement, to exchange its LLC Interests, together with the cancellation of a corresponding number of shares of our Class B common stock, for shares of our Class A common stock on a one-for-one basis, subject to customary conversion rate adjustments for stock splits, stock dividends, reclassifications and other similar transactions.

Immediately following this offering, after giving effect to the Reorganization Transactions, we will be a holding company and our sole material asset will be an equity interest in US LBM LLC. As the sole managing member of US LBM LLC, we will operate and control the business and affairs of US LBM LLC and, through US LBM LLC and its subsidiaries, conduct our business. Accordingly, although we will have a minority economic interest in US LBM LLC, we will have the sole voting interest in, and control the management of, US LBM LLC. As a result, Holdings will consolidate US LBM LLC on its consolidated financial statements and will report a noncontrolling interest related to the LLC Interests held by Continuing LLC Owner in our consolidated financial statements.

See "The Reorganization Transactions" for a diagram depicting our organizational structure immediately following this offering, after giving effect to the Reorganization Transactions.

Ownership and Corporate Information

Equity Sponsor Overview

On July 24, 2015, investment funds (the "Kelso Affiliates") sponsored by, or affiliated with, Kelso & Company, L.P. ("Kelso") entered into a definitive agreement to purchase a majority of the equity interests in our indirect subsidiary US LBM Holdings, LLC (the "Acquisition"). The Acquisition was consummated on August 20, 2015. As a result of the Acquisition, our historical consolidated financial statements and other financial data are presented in two periods: the period prior to the Acquisition ("Predecessor") and the period succeeding the Acquisition ("Successor").

After giving effect to this offering, Continuing LLC Owner will control approximately % of our voting power through Continuing LLC Owner's ownership of Class B common stock together with shares of our Class A common stock held by those Former LLC Owners that are expected to be party to the Stockholders Agreement (as defined below). As a result, we will be a "controlled company" within the meaning of the rules following completion of this offering. This election will allow us to rely on exemptions from certain governance requirements otherwise applicable to

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-listed companies. See "Risk Factors—Risks Related to Our Class A Common Stock and This Offering—We will be a "controlled company" within the meaning of the listing standards and, as a result, will qualify for, and intend to rely on, exemptions from certain corporate governance requirements. You will not have the same protections afforded to stockholders of companies that are subject to such requirements."

Kelso was founded in 1971 by Louis Kelso, commonly referred to as the inventor of the Employee Stock Ownership Plan, or ESOP. The tenets of Kelso's ESOP heritage, including a significant alignment of interest and history of partnership, have remained key components of the firm's strategy and differentiation. Kelso began investing in private equity in 1980, and has since raised a total of nine private equity funds, representing approximately $12 billion of capital, and has made 120 investments. Kelso benefits from a successful investment track record, a long-tenured and stable investing team, and a reputation as a preferred partner to management teams and corporates.

Market and Industry Data

This prospectus includes estimates regarding market and industry data and forecasts, which are based on publicly available information, industry publications and surveys, reports from government agencies and our own estimates based on our management's knowledge of, and experience in, the industry and markets in which we compete. Certain addressable market size data and our market share data included in this prospectus are based on independent research of Principia that was commissioned by us for inclusion herein. Principia is a leading research and consulting firm focused exclusively on the building materials and construction industry.

In presenting this information, we have made certain assumptions that we believe to be reasonable based on such data and other similar sources and on our knowledge of, and our experience to date in, the markets for the products we distribute. Market share data is subject to change and may be limited by the availability of raw data, the voluntary nature of the data gathering process and other limitations inherent in any statistical survey of market shares. In addition, customer preferences are subject to change. Accordingly, you are cautioned not to place undue reliance on such market share data. References herein to our being a leader in a market or product category refer to our belief that we have a leading market share position in each specified market based on sales dollars, unless the context otherwise requires.

Service Marks, Trademarks and Trade Names

This prospectus includes trademarks and service marks owned by us, including US LBM. This prospectus also contains trademarks, trade names and service marks of other companies, which are the property of their respective owners. Solely for convenience, trademarks, trade names and service marks referred to in this prospectus may appear without the ®, ^TM or ^SM symbols, but such references are not intended to indicate, in any way, that we will not assert, to the fullest extent under applicable law, our rights or the right of the applicable licensor to these trademarks, trade names and service marks. We do not intend our use or display of other parties' trademarks, trade names or service marks to imply, and such use or display should not be construed to imply, a relationship with, or endorsement or sponsorship of us by, these other parties.

* * * * *

Our principal executive offices are located at 1000 Corporate Grove Drive, Buffalo Grove, Illinois 60089. Our telephone number is (847) 353-7800.

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THE OFFERING


Issuer in this offering		US LBM Holdings, Inc.
Class A common stock offered in this offering		shares
Option to purchase additional shares of Class A common stock		The underwriters have a 30-day option to purchase up to an additional shares of Class A common stock from us at the initial public offering price, less underwriting discounts and commissions.
Class A common stock to be issued to the Former LLC Owners		shares
Class A common stock to be outstanding after this offering		shares (or shares if the underwriters exercise in full their option to purchase additional shares).
Class B common stock to be outstanding after this offering		shares, all of which will initially be owned by Continuing LLC Owner.
Voting Rights		Holders of our Class A common stock and Class B common stock will vote together as a single class on all matters presented to stockholders for their vote or approval, except as otherwise required by law. Each share of Class A common stock and Class B common stock will entitle its holder to one vote per share on all such matters.
Voting power held by purchasers in this offering		% (or %, if the underwriters exercise in full their option to purchase additional shares of Class A common stock).
Voting power held by the Former LLC Owners		% (or %, if the underwriters exercise in full their option to purchase additional shares of Class A common stock).
Voting power held by all holders of Class A common stock after giving effect to this offering		% (or %, if the underwriters exercise in full their option to purchase additional shares of Class A common stock).
Voting power held by Continuing LLC Owner as a holder of Class B common stock after giving effect to this offering		% (or %, if the underwriters exercise in full their option to purchase additional shares of Class A common stock).

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Ratio of shares of Class A common stock to LLC Interests		Our Amended and Restated Certificate of Incorporation and the Amended and Restated LLC Agreement of US LBM LLC will require that (i) we at all times maintain a ratio of one LLC Interest owned by us for each share of Class A common stock issued by us (subject to certain exceptions for treasury shares and shares underlying certain convertible or exchangeable securities), and (ii) US LBM LLC at all times maintains (x) a one-to-one ratio between the number of shares of Class A common stock issued by us and the number of LLC Interests owned by us and (y) a one-to-one ratio between the number of shares of Class B common stock owned by Continuing LLC Owner (or its permitted transferees) and the number of LLC Interests owned by Continuing LLC Owner (or its permitted transferees). This construct is intended to result in Continuing LLC Owner having a voting interest in Holdings that is identical to Continuing LLC Owner's percentage economic interest in US LBM LLC. Continuing LLC Owner will own all of our outstanding Class B common stock following the consummation of this offering.
Exchange rights of holders of LLC Interests		Continuing LLC Owner (or any of its permitted transferees) from time to time following the offering may exchange all or a portion of its LLC Interests for newly-issued shares of Class A common stock of Holdings on a one-for-one basis. Holdings' board of directors, which will include directors who are affiliated with Continuing LLC Owner, may, at its option, instead require Holdings to make a cash payment equal to the volume weighted average market price of one share of our Class A common stock for each LLC Interest redeemed (subject to customary adjustments, including for stock splits, stock dividends and reclassifications) in accordance with the terms of the Amended and Restated LLC Agreement. See "Certain Relationships and Related Party Transactions—Related party agreements entered into in connection with this offering and the Reorganization Transactions—Amended and Restated LLC Agreement of US LBM LLC." Shares of our Class B common stock will be cancelled on a one-for-one basis if Continuing LLC Owner (or any of its permitted transferees) exchanges or, at the election of Holdings' board of directors, we redeem LLC Interests of Continuing LLC Owner (or any of its permitted transferees) pursuant to the terms of the Exchange Agreement and the Amended and Restated LLC Agreement.

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Registration Rights Agreement		Pursuant to the Registration Rights Agreement, we will, subject to the terms and conditions thereof, agree to register the resale of the shares of our Class A common stock that are issuable to Continuing LLC Owner (or its permitted transferees) upon exchange of its LLC Interests and, at the request of Continuing LLC Owner, the shares of our Class A common stock that are issued to certain of the Former LLC Owners that are party to the Registration Rights Agreement. See "Certain Relationships and Related Party Transactions—Related party agreements entered into in connection with this offering and the Reorganization Transactions—Registration Rights Agreement."
Tax Receivable Agreements		We will enter into two tax receivable agreements in connection with this offering. First, we will enter into a tax receivable agreement with US LBM LLC and Continuing LLC Owner (the "Continuing LLC Owner Tax Receivable Agreement") that will provide for the payment by Holdings to the exchanging holders of LLC Interests of 85% of the amount of cash tax savings, if any, that Holdings actually realizes (or in some circumstances is deemed to realize) as a result of exchanges of LLC Interests for cash or shares of our Class A common stock. Second, we will enter into a tax receivable agreement with certain of the Former LLC Owners (the "Former LLC Owner Tax Receivable Agreement" and together with the Continuing LLC Owner Tax Receivable Agreement, the "Tax Receivable Agreements") that will provide for the payment by Holdings to certain of the Former LLC Owners or their permitted transferees of 85% of the amount of cash tax savings, if any, that Holdings actually realizes (or in some circumstances, is deemed to realize) as a result of the tax attributes of the LLC Interests we hold in respect of such Former LLC Owners' interest in us, which resulted from such Former LLC Owners' prior acquisition of indirect ownership interests in US LBM LLC. See "Certain Relationships and Related Party Transactions—Related party agreements entered into in connection with this offering and the Reorganization Transactions—Tax Receivable Agreements."
Use of proceeds		We estimate that the net proceeds to us from this offering, after deducting underwriting discounts and commissions and estimated offering expenses, will be approximately $ (or approximately $ if the underwriters exercise in full their option to purchase additional shares).

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		We intend to contribute net proceeds of this offering to US LBM LLC in exchange for LLC Interests (or LLC Interests if the underwriters exercise in full their option to purchase additional shares) of US LBM LLC at an amount contributed per LLC Interest equal to the initial public offering price per share of Class A common stock, less the underwriting discount. We expect that US LBM LLC and its subsidiaries will then use the net proceeds received from us to repay, redeem, repurchase or otherwise acquire or retire certain of our outstanding indebtedness, and for general corporate purposes. See "Use of Proceeds."
Conflicts of Interest		Affiliates of certain of the underwriters will each receive 5% or more of the net proceeds of this offering in connection with the repayment of our indebtedness. See "Use of Proceeds." Accordingly, this offering is being made in compliance with the requirements of Financial Industry Regulatory Authority, Inc., or FINRA, Rule 5121. This rule requires, among other things, that a "qualified independent underwriter" has participated in the preparation of, and has exercised the usual standards of "due diligence" with respect to, the registration statement. has agreed to act as qualified independent underwriter for this offering and to undertake the legal responsibilities and liabilities of an underwriter under the Securities Act. See "Underwriting (Conflicts of Interest)."
Dividend policy		We do not currently anticipate paying dividends on our Class A common stock for the foreseeable future. See "Dividend Policy."
Proposed trading symbol		"LBM"
Directed share program		The underwriters have reserved for sale at the initial public offering price up to shares of Class A common stock for employees, directors and affiliates who have expressed an interest in purchasing Class A common stock in the offering. See "Underwriting (Conflicts of Interest)."

The number of shares of our Class A common stock to be outstanding immediately following the Reorganization Transactions and this offering excludes:

•: shares of Class A common stock issuable upon exchange of LLC Interests, together with the cancellation of a corresponding number of shares of Class B common stock; and
•: shares of Class A common stock reserved for future issuance under our equity incentive plans.

Unless otherwise indicated, all information in this prospectus:

•: gives effect to the Reorganization Transactions;
•: gives effect to the issuance of shares of Class A common stock in this offering;
•: assumes no exercise by the underwriters of their option to purchase additional shares;
•: assumes that the initial public offering price of our Class A common stock will be $ per share (which is the midpoint of the price range set forth on the cover page of this prospectus); and
•: gives effect to amendments to our Amended and Restated Certificate of Incorporation and Amended and Restated By-laws to be adopted prior to the completion of this offering.

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SUMMARY HISTORICAL
CONSOLIDATED FINANCIAL AND OTHER DATA

The following tables set forth our summary historical consolidated financial and other data as of the dates and for the periods indicated. The summary historical consolidated financial data reflects the Company's historical accounting basis for the periods prior to the Acquisition (the Predecessor) and the Company's new accounting basis for the periods subsequent to the Acquisition (the Successor). The Predecessor periods of January 1, 2015 through August 19, 2015 and the year ended December 31, 2014 represent the prior ownership while the Successor periods of August 20, 2015 (Commencement of Operations) through December 31, 2015 and the year ended December 31, 2016 represent Kelso's ownership. The summary historical consolidated financial data as of December 31, 2016 and December 31, 2015 and for the Successor year ended December 31, 2016, the Successor period from August 20 through December 31, 2015, the Predecessor period from January 1 through August 19, 2015 and the Predecessor year ended December 31, 2014 has been derived from US LBM LLC's audited consolidated financial statements and the notes thereto included elsewhere in this prospectus. The summary historical financial and other data are qualified in their entirety by, and should be read in conjunction with, US LBM LLC's consolidated financial statements and related notes and "Management's Discussion and Analysis of Financial Condition and Results of Operations," "Selected Consolidated Financial Data" and "Unaudited Pro Forma Combined Financial Statements" included in this prospectus.

Due to the change in the basis of accounting resulting from the application of the purchase method of accounting, the Predecessor's consolidated financial statements and the Successor's consolidated financial statements are not necessarily comparable.

	Holdings	Successor						Predecessor

	Pro forma Year ended December 31, 2016¹	Year ended December 31, 2016			Period from August 20 through December 31, 2015			Period from January 1 through August 19, 2015			Year ended December 31, 2014
	(In thousands)
Statement of Operations Data:
Net sales		$	2,664,108		$	823,274		$	1,126,642		$	1,064,762
Cost of sales			1,918,720			613,984			824,474			792,031

Gross profit			745,388			209,290			302,168			272,731
Selling, general and administrative expenses			597,052			205,232			357,033			225,231
Depreciation and amortization			109,525			34,105			26,029			16,033

Income (loss) from operations			38,811			(30,047	)		(80,894	)		31,467

Interest expense			80,569			25,538			27,353			13,575
Loss on early extinguishment of debt			—			—			28,445			—
Other expense			5,605			1,943			2,938			2,732

Total other expenses, net			86,174			27,481			58,736			16,307
Income tax expense			343			614			281			121

Net income (loss)			(47,706	)		(58,142	)		(139,911	)		15,039
Net income attributable to redeemable noncontrolling interests			—			—			315			—

Net income (loss) attributable to the Company		$	(47,706	)	$	(58,142	)	$	(140,226	)	$	15,039

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	Successor						Predecessor

	Year ended December 31, 2016			Period from August 20 through December 31, 2015			Period from January 1 through August 19, 2015			Year ended December 31, 2014
	(In thousands)
Balance Sheet Data (at period end):
Cash and cash equivalents	$	3,455		$	10,888					$	15,196
Total assets		1,834,545			1,697,353						601,780
Total debt²		1,111,124			929,733						388,483
Total members' equity		473,245			516,445						68,374
Net working capital³		408,460			320,766					$	222,275
Other financial and operating data:
Comparable location sales growth⁴		8.2	%								8.3	%
Gross margin		28.0	%		25.4	%		26.8	%		25.6	%
Adjusted EBITDA⁵	$	187,856		$	58,672		$	67,128		$	60,967
Adjusted EBITDA margin⁵		7.1	%		7.1	%		6.0	%		5.7	%
Locations (at end of period)		228			222						124

¹: See "Unaudited Pro Forma Combined Financial Statements."
²: Total debt reflects current and long-term portion of debt, the balance outstanding on our ABL Facility (as defined below), capital lease obligations and sale-leaseback debt net of unamortized discount and deferred financing costs.
³: See "Management's Discussion and Analysis of Financial Condition and Results of Operations—Factors and trends affecting our operating results—Key Business and Performance Metrics" for a discussion of how we calculate net working capital.
⁴: See "Management's Discussion and Analysis of Financial Condition and Results of Operations—Factors and trends affecting our operating results—Key Business and Performance Metrics" for the definition of comparable location sales.
⁵: In addition to our results under accounting principles generally accepted in the United States of America ("GAAP"), we also present Adjusted EBITDA and Adjusted EBITDA margin which are non-GAAP financial measures and have been presented in this prospectus as supplemental measures of financial performance that are not required by, or presented in accordance with, GAAP. We calculate EBITDA as net income (loss) plus interest expense, net of interest income, including amortization of debt discounts and issuance costs, income tax expense (benefit), depreciation, and amortization. We calculate Adjusted EBITDA as EBITDA as further adjusted to add items such as loss on the early extinguishment of debt, equity-based compensation expense, IPO related expenses, acquisition expenses, management fees, goodwill impairment charge, change in LIFO (as defined below) reserve, and other non-cash and non-recurring items. Adjusted EBITDA margin represents Adjusted EBITDA as a percentage of net sales. Adjusted EBITDA and Adjusted EBITDA margin should not be considered in isolation or as a substitute for analyzing our results as reported under GAAP.

Adjusted EBITDA and Adjusted EBITDA margin are presented in this prospectus because they are important metrics used by management as one of the means by which our financial performance is assessed. We believe they assist investors and analysts in comparing our operating performance across periods on a consistent basis by excluding items that we do not believe are indicative of our core operating performance. Management believes Adjusted EBITDA is helpful in highlighting trends in our operating results, while other measures can differ significantly depending on long-term strategic decisions regarding capital structure and capital investments.

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Adjusted EBITDA and Adjusted EBITDA margin are also frequently used by analysts, investors and other interested parties to evaluate companies in our industry. We use Adjusted EBITDA and Adjusted EBITDA margin as supplements to GAAP measures of performance to evaluate the effectiveness of our business strategies, to make budgeting decisions, to allocate resources and to compare our performance relative to our peers.

Adjusted EBITDA should not be considered as an alternative to net income, earnings from operations or as measure of our liquidity or financial performance or any other performance measure derived in accordance with GAAP. Non-GAAP financial measures also should not be construed as an inference that our future results will be unaffected by unusual, non-recurring or other items for which these non-GAAP financial measures make adjustments. Additionally, Adjusted EBITDA and Adjusted EBITDA margin have certain limitations as an analytical tool such as:

•: they do not reflect interest expense, or the cash requirements necessary to service interest, or principal payments, on our indebtedness;
•: they do not reflect income tax expense or the cash requirements to pay income taxes;
•: non-cash compensation is and will remain a key element of our overall long-term incentive compensation package, although we exclude it as an expense when evaluating our ongoing operating performance for a particular period; and
•: although depreciation and amortization are non-cash charges, the assets being depreciated and amortized will often have to be replaced in the future, and these non-GAAP financial measures do not reflect cash requirements for such replacements.

: We compensate for these limitations by relying primarily on our GAAP results and using Adjusted EBITDA and Adjusted EBITDA margin only as supplemental information.
: As a result of the Acquisition, the financial information for the periods beginning on August 20, 2015 represents the consolidated financial statements of the Successor. Due to the change in the basis of accounting resulting from the application of the purchase method of accounting, the Predecessor's consolidated financial statements and the Successor's consolidated financial statements are not necessarily comparable.

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: The following table reconciles net income (loss) to Adjusted EBITDA for the periods presented:

	Successor						Predecessor

	Year ended December 31, 2016			Period from August 20 through December 31, 2015			Period from January 1 through August 19, 2015			Year ended December 31, 2014
	(In thousands)
Net income (loss)	$	(47,706	)	$	(58,142	)	$	(139,911	)	$	15,039
Interest expense		80,569			25,538			27,353			13,575
Depreciation and amortization^a		114,027			50,194			31,847			19,418
Income tax expense		343			614			281			121

EBITDA	$	147,233		$	18,204		$	(80,430	)	$	48,153
IPO related expenses^b		14,170			254			—			—
Acquisition expenses^c		4,774			21,583			8,207			7,193
Equity-based compensation and profit interests^d		6,116			14,817			110,192			—
Management fees^e		5,605			1,943			2,938			2,732
Goodwill impairment charge^f		2,304			—			—			—
Loss on early extinguishment of debt^g		—			—			28,445			—
Change in LIFO reserve^h		(38	)		—			(2,561	)		1,659
Consultant feesⁱ		7,149			337			—			—
Other expenses		543			1,534			337			1,230

Adjusted EBITDA	$	187,856		$	58,672		$	67,128		$	60,967



Adjusted EBITDA margin		7.1	%		7.1	%		6.0	%		5.7	%

^a: Includes depreciation and amortization from our consolidated statement of operations, acquired inventory step-up charges from our consolidated statement of cash flows and depreciation and amortization included within cost of sales from our consolidated statement of operations.
^b: Represents selling, general and administrative expenses incurred in connection with preparing the Company to transition to operate as a public company.
^c: Represents permissible adjustments under the credit agreements governing our indebtedness for selling, general and administrative expenses related to acquisitions, including fees to financial advisors, accountants, attorneys and other professionals, as well as changes in contingent consideration.
^d: Represents non-cash charges related to equity-based awards.
^e: During the Successor periods, represents management fees paid to Kelso and our other pre-IPO owners under the Advisory Services Agreement as well as fees paid under the Consulting Agreement. In connection with this offering, we will terminate the management fee under the Advisory Services Agreement and terminate the Consulting Agreement. See "Certain Relationships and Related Party Transactions." During the Predecessor periods, represents management fees paid to our pre-Acquisition owners under arrangements that were terminated in connection with the Acquisition.
^f: Represents non-cash charges related to the impairment of goodwill of one of the Company's reporting units.

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^g: Represents a non-recurring loss on the early extinguishment of debt in connection with the Acquisition.
^h: Represents non-cash charges recorded in cost of sales to recognize cost on a last-in-first-out, or LIFO, basis.
ⁱ: Represents consulting services in connection with operational efficiency initiatives. These costs are not expected to be incurred on an ongoing basis.

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RISK FACTORS

Investing in our Class A common stock involves a high degree of risk. Our reputation, business, financial position, results of operations and cash flows are subject to various risks. You should consider and read carefully all of the risks and uncertainties described below, as well as other information included in this prospectus, including our consolidated financial statements and related notes, before making an investment decision. The occurrence of any of the following risks or additional risks and uncertainties not presently known to us could materially and adversely affect our reputation, business, financial position, results of operations or cash flows. In such case, the trading price of our Class A common stock could decline, and you may lose all or part of your investment. This prospectus also contains forward-looking statements and estimates that involve risks and uncertainties. See "Special Note Regarding Forward-Looking Statements." Our actual results could differ materially from those anticipated in the forward-looking statements as a result of specific factors, including the risks and uncertainties described below.

Risks Related to Our Business

We have been, and may continue to be, adversely impacted by declines in the residential new construction market.

Our business units depend to a significant degree on the new residential construction market and, in particular, single family home construction. Residential new construction accounted for approximately 63% of our 2016 net sales. The homebuilding industry has undergone a significant decline from its peak in 2005. According to the U.S. Census Bureau, actual single family housing starts in the United States during 2016 increased 9.4% from 2015 levels, but remain 54.4% below their peak in 2005. The multi-year downturn in the homebuilding industry resulted in a substantial reduction in demand for the products we provide.

We cannot predict the duration of the current housing industry market conditions or the timing or strength of any continued recovery of housing activity in our markets. The homebuilding industry also may not recover to historical levels. Continued weakness in the new residential construction market would have a material adverse effect on our business, financial condition and operating results. Factors impacting the level of activity in the residential new construction markets include changes in interest rates, unemployment rates, high foreclosure rates and unsold/foreclosure inventory, availability of financing, labor costs, vacancy rates, local, state and federal government regulation and shifts in populations away from the markets that we serve. In addition, the mortgage markets continue to experience disruption and reduced availability of mortgages for potential homebuyers due to more restrictive standards to qualify for mortgages, including with respect to new home construction loans. Because of these factors, there may be fluctuations in our operating results, and the results for any historical period may not be indicative of results for any future period.

Residential repair and remodel activity levels may not return to historic levels, which may negatively impact our business, liquidity and results of operations.

Many of our business units rely on residential repair and remodel activity levels. Historically, residential repair and remodeling activity has decreased in slow economic periods. Elevated unemployment levels, mortgage delinquency and foreclosure rates, limitations in the availability of mortgage and home improvement financing and lower housing turnover may continue to limit consumers' spending, particularly on discretionary items, and affect their confidence level leading to continued reduced spending on home improvement projects.

Depressed activity levels in consumer spending for home improvement construction would adversely affect our business, liquidity, results of operations and financial position. Furthermore, continued economic weakness may cause unanticipated shifts in consumer preferences and purchasing practices and in the business models and strategies of our customers. Such shifts may alter the nature

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and prices of products demanded by the end consumer, and, in turn, our customers and could adversely affect our operating performance.

The commercial new construction market continues to experience a downturn, which could materially and adversely affect our business, liquidity and results of operations.

Many of our business units derive substantial net sales from the commercial new construction market. According to Dodge Data & Analytics (www.construction.com), actual commercial building construction put-in-place in the United States during 2016 decreased 4.4% from 2015 levels, and is 43.2% lower than 2007 levels. From time to time, our business units that serve the commercial building construction market have also been adversely affected in various parts of the country by declines in commercial new construction starts due to changes in tax laws affecting the real estate industry, high interest rates, the level of residential construction activity, labor costs, capital spending and commercial investment levels, corporate profitability, local, state and federal government regulation and other factors. Continued uncertainty about current economic conditions will continue to pose a risk to our business units that serve the commercial new construction market as participants in this industry may postpone spending in response to tighter credit, negative financial news or declines in income or asset values, which could have a continued material negative effect on the demand for our products and services.

Between 2007 and 2009, the U.S. construction markets we serve experienced the most unprecedented declines since the post-World War II era. We cannot predict the duration of the current market conditions or the timing or strength of any recovery of commercial new construction activity in our markets. Continued weakness in the commercial building construction market could have a material adverse effect on our business, financial condition and operating results. In addition, because of these factors, there may be fluctuations in our operating results, and the results for any historical period may not be indicative of results for any future period.

Our business is affected by general business, financial market and economic conditions, which could adversely affect our results of operations.

The markets in which we operate are sensitive to general business and economic conditions in the United States and worldwide, including availability of credit, interest rates, fluctuations in capital, credit and mortgage markets and business and consumer confidence. Adverse developments in global financial markets and general business and economic conditions, including through recession, downturn or otherwise, could have a material adverse effect on our business, financial condition, results of operations and cash flows, including our ability and the ability of our customers and suppliers to access capital. There was a significant decline in economic growth, both in the United States and worldwide, that began in the second half of 2007 and continued through 2011. In addition, volatility and disruption in the capital markets during that period reached unprecedented levels, with stock markets falling dramatically and credit becoming very expensive or unavailable to many companies without regard to those companies' underlying financial strength. As a result of these developments, many lenders and institutional investors reduced, and in some cases, ceased to provide funding to borrowers. Although there have been some indications of stabilization in the general economy and certain industries and markets in which we operate, there can be no guarantee that any improvement in these areas will continue or be sustained.

We may be unable to achieve our profitability goals.

We have set goals to improve our profitability over time by growing our net sales and comparable location sales, increasing our gross margin and reducing our expenses as a percentage of sales. For the year ended December 31, 2016, the Successor period from August 20 through December 31, 2015 and the Predecessor period from January 1 through August 19, 2015, we had net losses of $47.7 million,

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$58.1 million and $139.9 million, respectively. There can be no assurance that we will achieve our profitability goals. Factors that could materially adversely affect our efforts to achieve these goals include, but are not limited to, the failure to:

•: grow our revenue through organic growth or through acquisitions;
•: drive purchasing efficiencies or maintain or increase our rebates from vendors;
•: improve our gross margins through the utilization of improved pricing practices and increasing sales of high margin product categories;
•: maintain or reduce our overhead and support expenses as we grow, including as a result of becoming a publicly traded company;
•: effectively evaluate future inventory reserves;
•: maintain relationships with our significant customers; and
•: effectively and efficiently integrate any acquired business units.

Any of these failures or delays may adversely affect our ability to increase our profitability.

Future strategic transactions could impact our reputation, business, financial position, results of operations and cash flows, and we may not achieve the acquisition component of our growth strategy.

Our long-term business strategy depends in part on increasing our sales and growing our market share through acquisitions and opening new greenfield locations. If we fail to identify and acquire suitable acquisition targets on appropriate terms, our growth strategy may be materially and adversely affected. Further, if our operating results decline as a result of reduced activity in the residential new construction, repair and remodel, or commercial new construction markets, we may be unable to obtain the capital required to effect new acquisitions or open new greenfield locations.

We may not be able to integrate the operations of recently or future acquired businesses in an efficient and cost-effective manner or without significant disruption to our existing operations. We may also be required to incur additional debt in order to consummate acquisitions in the future, which debt may be substantial and may limit our flexibility in using our operating cash flows. Our failure to integrate future acquired businesses effectively or to manage other consequences of our acquisitions, including increased indebtedness, could prevent us from remaining competitive and, ultimately, could adversely affect our financial condition, operating results and cash flows.

Acquisitions involve a number of special risks, including:

•: problems implementing disclosure controls and procedures or unforeseen difficulties extending internal control over financial reporting at the newly acquired business;
•: potential adverse short-term effects on operating results through increased costs or otherwise;
•: diversion of management's attention and failure to recruit new, and retain existing, key personnel of the acquired business;
•: failure to successfully implement information technology, logistics and systems integration;
•: the possibility of our business growth outpacing the capability of our systems; and
•: the risks inherent in the systems of the acquired business and risks associated with unanticipated events or liabilities, any of which could have a material adverse effect on our business, financial condition and results of operations.

In addition, if we finance acquisitions by issuing our equity securities or securities convertible into our equity securities, our existing stockholders would be diluted, which, in turn, could adversely affect

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the market price of our Class A common stock. We could also finance an acquisition with debt, resulting in higher leverage and interest costs relating to the acquisition. As a result, if we fail to evaluate and execute acquisitions efficiently, we may not ultimately experience the anticipated benefits of the acquisitions, and we may incur costs that exceed our expectations.

We are subject to pricing pressures.

Large contractors and national homebuilders in both the residential and commercial new construction markets have historically been able to exert pressure on their outside suppliers and distributors to keep prices low in the highly fragmented building materials distribution industry. The recent construction industry downturn further increased the pricing pressures from homebuilders and other customers. In addition, continued consolidation in the residential and commercial construction markets and changes in builders' purchasing policies and payment practices could result in even further pricing pressure. A decline in the prices of the products we distribute could adversely impact our operating results. When the prices of the products we distribute decline, customer demand for lower prices could result in lower sales prices and, to the extent that our inventory at the time was purchased at higher costs, lower margins. Alternatively, in a rising price environment, our suppliers may increase prices or reduce discounts on the products we distribute and we may be unable to pass on any cost increase to our customers, thereby resulting in reduced margins and profits. Overall, these pricing pressures may adversely affect our operating results and cash flows.

The markets in which we operate are highly competitive and fragmented, and demand for our products could decrease if we are not able to compete effectively.

The markets in which we operate are fragmented and highly competitive. Our competition includes national and regional distributors of building materials as well as smaller, local distributors. Retailers of building materials, repair and remodel supplies and contractors' tools also compete with us. Competition varies depending on product line, customer classification and geographic area.

Competitors in one or more of our product categories may have substantially greater financial and other resources than us, which may allow them to offer higher levels of service or a broader selection of inventory than our business units can. We may be unable to respond effectively to such competitive pressures. Increased competition by existing and future competitors could result in reductions in volumes, prices, net sales and gross margins that could materially adversely affect our business, financial condition and results of operations. Furthermore, our success will depend, in part, on our ability to maintain our market share and gain market share from our competitors.

Our customers consider the performance of the products we distribute, our customer service and price when deciding whether to purchase the products we distribute. Excess industry capacity for certain products in several geographic markets could lead to increased price competition. We may be unable to maintain our operating costs or product prices at a level that is sufficiently low for us to compete effectively. If we are unable to compete effectively with our existing competitors or new competitors enter the markets in which we operate, our financial condition, operating results and cash flows may be adversely affected.

Our competitors continue to consolidate, which could cause markets to become more competitive and could negatively impact our business.

Our competitors continue to consolidate. This consolidation is being driven by customer needs and supplier capabilities, which could cause markets to become more competitive as greater economies of scale are achieved by distributors. Customers are increasingly aware of the total costs of fulfillment and of the need to have consistent sources of supply at multiple locations. We believe these customer needs could result in fewer distributors as the remaining distributors become larger and capable of being

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consistent sources of supply. There can be no assurance that we will be able to take advantage effectively of this trend toward consolidation. The trend in our industry toward consolidation could make it more difficult for us to maintain operating margins and could also increase competition for our potential acquisition targets and result in higher purchase price multiples.

A range of factors, including the effects of the weather and the seasonal nature of our business, may make our quarterly net sales and earnings variable.

We have historically experienced, and in the future expect to continue to experience, variability in sales and earnings on a quarterly basis. The factors expected to contribute to this variability include, among others: (i) the cyclical nature of some of the markets in which we operate, including the residential and commercial new construction markets, (ii) general economic conditions in the various local markets in which we operate, (iii) the pricing policies of our competitors and (iv) the production schedules of our customers.

Our business, financial condition and operating results depend on the operations of our local business units. These business units vary in size and financial condition, and certain of these business units bear a greater impact on our operating results than others. Any one or more of our business units may experience a decline in its own financial condition and operating results as a result of local market-specific factors, including weather patterns, unemployment rates, foreclosure rates and other general economic conditions in their markets. A decline at one or more of our most significant business units could have an adverse effect on our business, financial condition and operating results.

The markets in which we operate are seasonal. Although weather patterns affect our operating results throughout the year, the months of November through February have historically been, and are generally expected to continue to be, adversely affected by weather patterns in many of our markets, causing reduced residential and commercial construction activity. We experience seasonal variation as a result of our customers' dependence on suitable weather to engage in new construction and repair and remodel projects. For example, during the winter months, construction activity generally declines due to inclement weather and shorter daylight hours. In addition, to the extent that hurricanes, severe storms, earthquakes, floods, fires, other natural disasters or similar events occur in the markets in which we operate, our business may be adversely affected. As a result, our operating results have historically varied significantly between fiscal quarters, and we anticipate that we will continue to experience these quarterly fluctuations in the future.

These factors make it difficult to project our operating results on a consistent basis, which may affect the value of our Class A common stock.

Certain of our products are commodities and fluctuations in prices of these commodities could affect our operating results.

Some of the building products we distribute, including lumber, plywood and particleboard, are commodities that are widely available from other manufacturers or distributors with prices and volumes determined frequently based on participants' perceptions of short-term supply and demand factors. A shortage of capacity or excess capacity in the industry can result in significant increases or declines in market prices for those products, often within a short period of time.

Prices of commodity products can also change as a result of national and international economic conditions, labor and freight costs, competition, market speculation, government regulation and trade policies, as well as from periodic delays in the delivery of lumber and other products. Short-term changes in the cost of these materials, some of which are subject to significant fluctuations, are sometimes passed on to our customers, but our pricing quotation periods and pricing pressure from our competitors may limit our ability to pass on such price changes. We may also be limited in our ability to pass on increases in freight costs on our products due to the price of fuel.

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Periods of generally increasing prices provide the opportunity for higher net sales and increased net income, while generally declining price environments may result in declines in net sales and net income. In particular, low market prices for wood products over a sustained period can adversely affect our financial condition, operating results and cash flows, as can excessive spikes in market prices. Our wood products product category represented approximately 24.6% of our net sales for 2016. If lumber or structural panel prices were to decline significantly from current levels, our net sales and net income would be negatively affected.

The loss of any of our significant customers could adversely affect our financial condition.

Our ten largest customers generated approximately 9% of our net sales for 2016. We cannot guarantee that we will maintain or improve our relationships with these customers or that we will continue to supply these customers at historical levels. In addition, consolidation among customers could also result in a loss of some of our present customers to our competitors. The loss of one or more of our significant customers, a significant customer's decision to purchase our products in significantly lower quantities than they have in the past or deterioration in our relationship with any of our significant customers could significantly affect our financial condition, operating results and cash flows. Generally, our customers are not required to purchase any minimum amount of products from us. We do not enter into contracts with most of our customers and thus supply products or services only when and if ordered by the customer. Should our customers purchase our products in significantly lower quantities than they have in the past, such decreased purchases could have a material adverse effect on our financial condition, operating results and cash flows.

A significant portion of our net sales are credit sales, which are made primarily to customers whose ability to pay depends on the creditworthiness of the customer, including the economic strength of the industry and geographic areas in which they operate, and the failure to collect or timely collect monies owed from customers could adversely affect our financial condition.

A significant portion of our net sales volume in 2016 was facilitated through the extension of credit to our customers whose ability to pay depends, in part, on the economic strength of the industry in the areas where they operate. Our business units offer credit to customers, either through unsecured credit that is based solely upon the creditworthiness of the customer, or secured credit for materials sold for a specific job where the security lies in lien rights associated with the materials going into the job. The type of credit offered depends both on the financial strength of the customer and the nature of the business in which the customer is involved. End users, resellers and other non-contractor customers generally purchase more on unsecured credit than secured credit. The inability of our customers to pay off their credit lines in a timely manner, or at all, would adversely affect our financial condition, operating results and cash flows. Furthermore, our collections efforts with respect to non-paying or slow-paying customers could negatively impact our customer relations going forward.

Because we depend on the creditworthiness of certain of our customers, if the financial condition of our customers declines, our credit risk could increase. Significant contraction in our markets, coupled with tightened credit availability and financial institution underwriting standards, would adversely affect certain of our customers. Should one or more of our larger customers declare bankruptcy, it could adversely affect the collectability of our accounts receivable and net income.

Interruptions in the proper functioning of information technology systems could disrupt operations and cause unanticipated increases in our costs or decreases in our revenues, or both.

Because we use our information technology ("IT") systems to, among other things, manage inventories and accounts receivable, make purchasing decisions and monitor our results of operations, the proper functioning of our IT systems is critical to the successful operation of our business. IT systems are vulnerable to natural disasters, power losses, unauthorized access, telecommunication

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failures and other problems. If critical IT systems fail, or are otherwise unavailable, our ability to process orders, track credit risk, identify business opportunities, maintain proper levels of inventories, collect accounts receivable, pay expenses and otherwise manage our business units would be adversely affected. Further, security breaches of our technology systems could expose us to litigation or reputational harm.

Third-party service providers are responsible for managing a significant portion of our information systems and roll out of our technology platform. Our business and results of operations may be materially adversely affected if any third-party service provider does not perform satisfactorily.

We may not be able to expand into new geographic markets, which may impact our ability to grow our business.

We intend to continue pursuing our growth strategy by expanding into new geographic markets for the foreseeable future. Our expansion into new geographic markets may present competitive, distribution and other challenges that differ from the challenges we currently face. In addition, we may be less familiar with the customers in these markets and may ultimately face different or additional risks, as well as increased or unexpected costs, compared to those we experience in our existing markets. Expansion into new geographic markets may also expose us to direct competition with companies with whom we have limited or no past experience as competitors. To the extent we rely upon expanding into new geographic markets and do not meet, or are unprepared for, any new challenges posed by such expansion, our future sales growth could be negatively impacted, our operating costs could increase, and our business operations and financial results could be negatively affected.

Our results also depend on the successful implementation of our strategic initiatives. We may not be able to implement these strategies successfully, on a timely basis, or at all.

Our ability to grow depends on a number of factors, including our ability to implement our strategic initiatives to retain and expand existing customer relationships, drive the expansion of specialty products across our locations, enhance our procurement practices and relationships with suppliers, optimize pricing and margins across our business units, fully roll out our technology platform and leverage our technology platform to increase engagement with our customers and adapt to changing industry trends. We may not be successful in implementing some or all of these operational initiatives and strategies. If we are unsuccessful in implementing our strategic initiatives, our business will be adversely affected. Further, even if successfully implemented, our business strategy may not ultimately produce positive financial results.

Our success depends on our ability to attract, train and retain highly qualified associates and other key personnel while controlling related labor costs.

To be successful, we must attract, train and retain a large number of highly qualified associates while controlling related labor costs. In many of our markets, highly qualified associates are in high demand and we compete with other businesses for these associates and invest significant resources in training and incentivizing them. There can be no assurance that we will be able to attract or retain highly qualified associates in the future, including, in particular, those employed by companies we acquire.

In certain of our markets, the lack of skilled labor is particularly significant during the summer months when the demand for our products increases. We have in the past and may in the future rely on foreign workers we hire temporarily pursuant to H-2B visas. If the availability of skilled labor, including temporary foreign workers, continues to decline, it may have a material adverse effect on our business.

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Our ability to control labor costs is subject to numerous external factors, including prevailing wage rates and health and other insurance costs. Historically, the effects of collective bargaining and other similar labor agreements on us have not been significant. However, if a larger number of our employees were to unionize, the effect on us may be negative.

In addition, our business results depend largely on our chief executive officer and senior management team as well as our branch managers and sales personnel and their experience, knowledge of local market dynamics and specifications and long-standing customer relationships. We customarily sign employment letters with key personnel of companies we acquire in order to maintain key customer relationships and manage the transition of the acquired business unit. In addition, many of our business unit leaders are nearing retirement age. Our inability to retain or hire qualified branch managers or sales personnel at reasonable compensation levels would restrict our ability to successfully operate and grow our business.

We are exposed to product liability, warranty, casualty, construction defect, contract, tort, employment and other claims and legal proceedings related to our business, the products we distribute, the services we provide and services provided for us by third parties, which may exceed the coverage of our insurance.

In the ordinary course of business, we are subject to various claims and litigation. Any such claims, whether with or without merit, could be time consuming and expensive to defend and could divert management's attention and resources. The building materials industry has been subject to personal injury and property damage claims arising from alleged exposure to raw materials contained in building products as well as claims for incidents of catastrophic loss, such as building fires. As a distributor of building materials, we face an inherent risk of exposure to product liability claims in the event that the use of the products we have distributed in the past or may in the future distribute is alleged to have resulted in economic loss, personal injury or property damage or violated environmental, health or safety or other laws. Such product liability claims may include allegations of defects in manufacturing, defects in design, a failure to warn of dangers inherent in the product, negligence, strict liability or a breach of warranties. We are also from time to time subject to casualty, contract, tort and other claims relating to our business, the products we have distributed in the past or may in the future distribute and the services we have provided in the past or may in the future provide, either directly or through third parties. Further, many of the contracts we enter into with our customers require us to indemnify our customers for claims arising out of the products we distribute. If any such claim were adversely determined, our financial condition, operating results and cash flows could be adversely affected if we were unable to seek indemnification for such claims or were not adequately insured for such claims. We rely on manufacturers and other suppliers to provide us with the products we sell or distribute. Since we do not have direct control over the quality of products that are manufactured or supplied to us by third parties, we are particularly vulnerable to risks relating to the quality of such products. In addition, we are exposed to potential claims arising from the conduct of our employees, builders and their subcontractors, and third-party installers for which we may be liable. We and they are subject to regulatory requirements and risks applicable to general contractors, which include management of licensing, permitting and quality of third-party installers. As they apply to our business, if we fail to manage these processes effectively or provide proper oversight of these services, we could suffer lost sales, fines and lawsuits, as well as damage to our reputation, which could adversely affect our business and the results of our operations.

Claims and investigations may arise related to distributor relationships, commercial contracts, antitrust or competition law requirements, employment matters, employee benefits issues and other compliance and regulatory matters, including anti-corruption and anti-bribery matters. We may also be subject to claims arising from the operations of our various businesses for periods prior to the dates we acquired them. We cannot predict or, in some cases, control the costs to defend or resolve such claims.

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There can be no assurance that we will be able to maintain suitable and adequate insurance on acceptable terms or that such insurance will provide adequate protection against potential liabilities, and the cost of any product liability, warranty, casualty, construction defect, contract, tort, employment or other litigation or other proceeding, even if resolved in our favor, could be substantial. Additionally, we do not carry insurance for all categories of risk that our business may encounter. Any significant uninsured liability may require us to pay substantial amounts. There can be no assurance that any current or future claims will not adversely affect our financial position, cash flows or results of operations.

Product shortages and the loss of key suppliers may impair our operating results.

Our ability to offer a wide variety of products to our customers depends on our ability to obtain adequate product supply from manufacturers or other suppliers. Generally, many of our products are obtainable from various sources and in sufficient quantities. However, the loss of, or substantial decrease in the availability of, products from our suppliers, or the loss of a key supplier, could adversely impact our financial condition, operating results and cash flows. In addition, supply interruptions could arise from shortages of raw materials, labor disputes or weather conditions affecting products or shipments, transportation disruptions or other factors beyond our control. Short- and long-term disruptions in our supply chain would result in a need to maintain higher inventory levels as we replace similar product, a higher cost of product and ultimately a decrease in our net sales and profitability. A disruption in the timely availability of our products by our key suppliers would result in a decrease in our revenues and profitability. We generally do not enter into long-term agreements with our suppliers. Failure by our suppliers to continue to supply us with products on commercially reasonable terms, or at all, would put pressure on our operating margins and have a material adverse effect on our financial condition, operating results and cash flows. Short-term changes in the cost of these materials, some of which are subject to significant fluctuations, are sometimes, but not always passed on to our customers. Our inability to pass on material price increases to our customers could adversely impact our financial condition, operating results and cash flows.

A change in our product mix could adversely affect our results of operations.

Our results may be affected by a change in our product mix. Our outlook, budgeting and strategic planning assume a certain product mix of sales. If actual results vary from this projected product mix of sales, our financial results could be negatively impacted. Additionally, gross margins vary across our product lines. If the mix of products shifts from higher margin product categories to lower margin product categories, our overall gross margins and profitability may be adversely affected. Consequently, changes in our product mix could have a material adverse effect on our financial condition and operating results.

We may be unable to effectively manage our inventory and working capital as our sales volume increases or the prices of the products we distribute fluctuate, which could have a material adverse effect on our business, financial condition and operating results.

We purchase many of our products directly from manufacturers, which are then sold and distributed to customers. We must maintain, and have adequate working capital to purchase, sufficient inventory to meet customer demand. Due to the lead times required by our suppliers, we order products in advance of expected sales. As a result, we are required to forecast our sales and purchase accordingly. In periods characterized by significant changes in economic growth and activity in the residential and commercial building and home repair and remodel industries, it can be especially difficult to forecast our sales accurately. We must also manage our working capital to fund our inventory purchases. Such issues and risks can be magnified by the diversity of product mix our business units carry, with over 60,000 SKUs across multiple major product categories. Excessive

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increases in the market prices of certain building products can put negative pressure on our operating cash flows by requiring us to invest more in inventory. In the future, if we are unable to effectively manage our inventory and working capital as we attempt to expand our business, our cash flows may be negatively affected, which could have a material adverse effect on our business, financial condition and operating results.

We occupy most of our facilities under leases. We may be unable to renew leases on favorable terms or at all. Also, if we close a facility, we may remain obligated under the applicable lease.

Most of our facilities are located in leased premises. Our leased facilities typically have terms ranging from five to 10 years, with options to renew for specified periods of time. We believe that leases we enter into in the future will likely be long-term and non-cancelable and have similar renewal options. However, there can be no assurance that we will be able to renew our current or future leases on favorable terms or at all which could have an adverse effect on our ability to operate our business and on our results of operations. In addition, if we close or idle a facility, we generally remain committed to perform our obligations under the applicable lease, which include, among other things, payment of the base rent for the balance of the lease term.

In addition, at the end of the lease term and any renewal period for a facility, we may be unable to renew the lease without substantial additional cost, if at all. If we are unable to renew our facility leases, we may close or relocate a facility, which could subject us to construction and other costs and risks, which in turn could have a material adverse effect on our business and operating results. Further, we may not be able to secure a replacement facility in a location that is as commercially viable, including access to rail service, as the lease we are unable to renew. Having to close a facility, even briefly to relocate, would reduce the sales that such facility would have contributed to our revenues. Additionally, a relocated facility may generate less revenue and profit, if any, than the facility it was established to replace.

If petroleum prices increase, our results of operations could be adversely affected.

Petroleum prices have fluctuated significantly in recent years, including recent periods of historically low prices. Prices and availability of petroleum products are subject to political, economic and market factors that are outside our control. Political events in petroleum-producing regions as well as hurricanes and other weather-related events may cause the price of fuel to increase. Within our business units, we deliver products to our customers via our fleet of trucks. Our operating profit will be adversely affected if we are unable to obtain the fuel we require or to fully offset the anticipated impact of higher fuel prices through increased prices or fuel surcharges to our customers. Besides passing fuel costs on to customers, we have not entered into any hedging arrangements that protect against fuel price increases, and we do not have any long-term fuel purchase contracts. If shortages occur in the supply of necessary petroleum products and we are not able to pass along the full impact of increased petroleum prices to our customers, our results of operations would be adversely affected.

We may be adversely affected by any natural or man-made disruptions to our distribution and manufacturing facilities.

We currently maintain a broad network of distribution and manufacturing facilities throughout the United States. Any widespread disruption to our facilities resulting from fire, earthquake, weather-related events, an act of terrorism or any other cause could damage a significant portion of our inventory and could materially impair our ability to distribute our products to customers. We could incur significantly higher costs and longer lead times associated with distributing our products to our customers during the time that it takes for us to reopen or replace a damaged facility. In addition, any shortages of fuel or significant fuel cost increases could disrupt our ability to distribute products to our customers. Disruptions to the national or local transportation infrastructure systems including those

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related to a terrorist attack, strike or otherwise may also affect our ability to keep our operations and services functioning properly. If any of these events were to occur, our financial condition, operating results and cash flows could be materially adversely affected.

We may experience a failure in or breach of our operational or information security systems, or those of our third-party service providers, as a result of cyber-attacks or information security breaches.

Information security risks have generally increased in recent years because of the proliferation of new technologies and the increased sophistication and activities of perpetrators of cyber-attacks. A failure in or breach of our operational or information security systems, or those of our third-party service providers, as a result of cyber-attacks or information security breaches could disrupt our business, result in the disclosure or misuse of confidential or proprietary information, damage our reputation, increase our costs and/or cause losses. As a result, cyber-security and the continued development and enhancement of the controls and processes designed to protect our systems, computers, software, data and networks from attack, damage or unauthorized access remain a priority for us. As cyber-threats continue to evolve, we may be required to expend additional resources to continue to enhance our information security measures and/or to investigate and remediate any information security vulnerabilities.

We employ third-party and open source licensed software for use in our business, and the inability to maintain these licenses, errors in the software we license or the terms of open source licenses could result in increased costs, or reduced service levels, which would adversely affect our business.

Our business, including our mobile platform, relies on certain third-party software obtained under licenses from other companies. We anticipate that we will continue to rely on such third-party software in the future. Although we believe that there are commercially reasonable alternatives to the third-party software we currently license, this may not always be the case, or it may be difficult or costly to replace. In addition, integration of new third-party software may require significant work and require substantial investment of our time and resources. Our use of additional or alternative third-party software would require us to enter into license agreements with third parties, which may not be available on commercially reasonable terms or at all. Many of the risks associated with the use of third-party software cannot be eliminated, and these risks could negatively affect our business.

Federal, state, local and other regulations could impose substantial costs and restrictions on our operations that would reduce our net income.

We are subject to various federal, state, local and other laws and regulations, including, among other things, transportation regulations promulgated by the U.S. Department of Transportation (the "DOT"), work safety regulations promulgated by the Occupational Safety and Health Administration, employment regulations promulgated by the U.S. Equal Employment Opportunity Commission, regulations of the U.S. Department of Labor, accounting standards issued by the Financial Accounting Standards Board (the "FASB") or similar entities, and state and local zoning restrictions, building codes and contractors' licensing regulations. More burdensome regulatory requirements in these or other areas may increase our general and administrative costs and adversely affect our financial condition, operating results and cash flows. Moreover, failure to comply with the regulatory requirements applicable to our business could expose us to litigation and substantial fines and penalties that could adversely affect our financial condition, operating results and cash flows.

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Our transportation operations, upon which we depend to distribute products from our distribution centers, are subject to the regulatory jurisdiction of the DOT and the Federal Motor Carrier Safety Administration ("FMCSA"), which have broad administrative powers with respect to our transportation operations. Vehicle dimensions and driver hours of service also are subject to both federal and state regulation. More restrictive limitations on vehicle weight and size, trailer length and configuration, or driver hours of service would increase our costs, which, if we are unable to pass these cost increases on to our customers, may increase our selling, general and administrative expenses and adversely affect our financial condition, operating results and cash flows. If we fail to comply adequately with the DOT and FMCSA regulations or such regulations become more stringent, we could experience increased inspections, regulatory authorities could take remedial action, including imposing fines or shutting down our operations, or we could be subject to increased audit and compliance costs. If any of these events were to occur, our financial condition, operating results and cash flows would be adversely affected.

In addition, the residential and commercial construction industries are subject to various local, state and federal statutes, ordinances, codes, rules and regulations concerning zoning, building design and safety, construction, contractor licensing, energy conservation and similar matters, including regulations that impose restrictive zoning and density requirements on the residential new construction industry or that limit the number of homes or other buildings that can be built within the boundaries of a particular area. Regulatory restrictions may increase our operating expenses and limit the availability of suitable building lots for our customers, any of which could negatively affect our business, financial condition and results of operations.

Further changes in laws or regulations applicable to our business, such as the recently imposed countervailing duty rates levied against Canadian softwood lumber imports to the United States, could have a material impact on our financial performance.

We could incur significant costs to comply with environmental, health and safety laws or to satisfy any liability or obligation imposed under such laws.

We are subject to various federal, state and local environmental, health and safety laws and regulations, including laws and regulations governing the investigation and cleanup of contaminated properties, discharges of hazardous materials to the environment, product safety and the health and safety of our employees and customers. These laws and regulations impose a variety of requirements and restrictions on our operations and the products we distribute. Our failure to comply with these laws and regulations could result in fines, penalties, enforcement actions, third party claims, requirements to investigate or remediate contamination or to pay for the costs of investigation or cleanup, or regulatory or judicial orders requiring corrective measures and could negatively impact our reputation with customers. In addition, changes in, or new interpretations of, existing laws, regulations or enforcement policies, the discovery of previously unknown contamination, or the imposition of other environmental liabilities or obligations in the future, including obligations concerning any potential health hazards associated with our products, may lead to additional compliance or other costs that could have an adverse effect on our business, financial condition or results of operations.

An impairment of goodwill could have a material adverse effect on our results of operations.

Acquisitions frequently result in the recording of goodwill and other intangible assets. As of December 31, 2016, goodwill represented approximately 35% of our total assets. Goodwill is not amortized and is subject to impairment testing at least annually using a fair value based approach. The identification and measurement of goodwill impairment involves the estimation of the fair value of our reporting units. The estimates of fair value of reporting units are based on the best information available as of the date of the assessment and incorporate management assumptions about expected future cash flows and other valuation techniques. Future cash flows can be affected by changes in industry or market conditions, among other factors. The recoverability of goodwill is evaluated at least

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annually and when events or changes in circumstances indicate that the fair value of a reporting unit has more likely than not declined below its carrying value.

We cannot accurately predict the amount and timing of any impairment of assets, and, in the future, we may be required to take additional goodwill or other asset impairment charges relating to certain of our reporting units. Any such non-cash charges would have an adverse effect on our financial results.

Future changes in financial accounting standards may significantly change our reported results of operations.

GAAP is subject to interpretation by the Financial Accounting Standards Board, the American Institute of Certified Public Accountants, the Securities and Exchange Commission ("SEC") and various bodies formed to promulgate and interpret appropriate accounting principles. A change in these principles or interpretations could have a significant effect on our reported financial results and could affect the reporting of transactions completed before the announcement of a change.

Additionally, our assumptions, estimates and judgments related to complex accounting matters could significantly affect our financial results. GAAP and related accounting pronouncements, implementation guidelines and interpretations with regard to a wide range of matters that are relevant to our business, including, but not limited to, revenue recognition, impairment of long-lived assets, leases and related economic transactions, intangibles, self-insurance, income taxes, property and equipment, litigation and stock-based compensation are highly complex and involve many subjective assumptions, estimates and judgments by us. Changes in these rules or their interpretation or changes in underlying assumptions, estimates or judgments by us (i) could require us to make changes to our accounting systems to implement these changes that could increase our operating costs and (ii) could significantly change our reported or expected financial performance.

Risks Related to Our Indebtedness

Our current indebtedness, degree of leverage and any future indebtedness we may incur may adversely affect our cash flow, limit our operational and financing flexibility and negatively impact our business and our ability to make payments on our indebtedness and declare dividends and make other distributions.

On August 20, 2015, US LBM LLC and its subsidiary LBM Borrower, LLC ("LBM Borrower") entered into the ABL Credit Agreement (as defined in "Description of Certain Indebtedness," and the facility made available under the ABL Credit Agreement referred to as the "ABL Facility"), the First Lien Term Loan Credit Agreement and the Second Lien Term Loan Credit Agreement (each as defined in "Description of Certain Indebtedness," and the facilities made available under the First Lien Term Loan Credit Agreement and the Second Lien Term Loan Credit Agreement referred to as the "First Lien Term Loan Facility" and the "Second Lien Term Loan Facility," respectively, and collectively as the "Term Loan Facilities"). The ABL Credit Agreement was amended on January 4, 2016, March 24, 2016 and April 29, 2016, the First Lien Term Loan Credit Agreement was amended on November 30, 2015, October 5, 2016 and January 31, 2017 and the Second Lien Term Loan Credit Agreement was amended on June 1, 2016 and October 5, 2016. As of December 31, 2016, $133.8 million was outstanding under the ABL Facility and $131.7 million was available for future borrowings under the ABL Facility. In addition, as of December 31, 2016, $746.6 million was outstanding under the First Lien Term Loan Facility (prior to giving effect to the borrowing of the incremental loans in the amount of $80.0 million on January 31, 2017) and $205.5 million was outstanding under the Second Lien Term Loan Facility. We may incur additional debt in the future.

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The degree to which we are leveraged may have significant consequences to our business and, as a result, may impact our stockholders, including:

•: impairing our ability to obtain additional financing for working capital, capital expenditures, acquisitions or general corporate purposes;
•: requiring us to dedicate a significant portion of our cash flow from operations to pay interest on any outstanding indebtedness, which would reduce the funds available to us for operations and other purposes;
•: limiting our flexibility in planning for, or reacting to, changes in our business and the industries in which we operate;
•: making it more difficult for us to satisfy our obligations with respect to our indebtedness;
•: making us more vulnerable to adverse changes in general economic, industry and competitive conditions and adverse changes in government regulation;
•: exposing us to the risk of increased interest rates because any borrowings we make under the ABL Facility and our borrowings under the Term Loan Facilities under certain circumstances, will bear interest at variable rates;
•: placing us at a competitive disadvantage compared to our competitors that are less leveraged and, therefore, more able to take advantage of opportunities that our leverage prevents us from exploiting;
•: impairing our ability to refinance existing indebtedness or borrow additional amounts for working capital, capital expenditures, acquisitions, debt service requirements, execution of our business strategy or other purposes;
•: restricting our ability to pay dividends and make other distributions; and
•: adversely affecting our credit ratings.

Any of the above listed factors could materially adversely affect our financial condition, liquidity or results of operations.

Despite our current level of indebtedness, we may still be able to incur substantially more debt. This could further exacerbate the risks to our financial condition described above.

We may be able to incur significant additional indebtedness in the future, including secured debt. Although the agreements governing our indebtedness contain restrictions on the incurrence of additional indebtedness, these restrictions are subject to a number of qualifications and exceptions, and the additional indebtedness incurred in compliance with these restrictions could be substantial. In addition, the ABL Facility provides a commitment of up to $275.0 million, subject to a borrowing base. As of December 31, 2016, we had an additional $131.7 million available for borrowing under the ABL Facility. If new debt is added to our current debt levels, the related risks that we now face could intensify.

We will require a significant amount of cash to service our indebtedness. The ability to generate cash or refinance our indebtedness as it becomes due depends on many factors, some of which are beyond our control.

We are a holding company, and as such we have no independent operations or material assets other than our ownership of equity interests in our subsidiaries. We depend on our subsidiaries to distribute funds to us so that we may pay our obligations and expenses, including satisfying our indebtedness. Our ability to make scheduled payments on, or to refinance our obligations under, our

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indebtedness and to fund planned capital expenditures and other corporate expenses will depend on the ability of our subsidiaries to make distributions, dividends or advances, which in turn will depend on their future operating performance and on economic, financial, competitive, legislative, regulatory and other factors and any legal and regulatory restrictions on the payment of distributions and dividends to which they may be subject. Many of these factors are beyond our control. We cannot assure you that our business will generate sufficient cash flow from operations, that currently anticipated cost savings and operating improvements will be realized or that future borrowings will be available to us in an amount sufficient to enable us to satisfy our obligations under our indebtedness or to fund our other needs. In order for us to satisfy our obligations under our respective indebtedness and fund our planned capital expenditures, we must continue to execute our business strategy. If we are unable to do so, we may need to reduce or delay our planned capital expenditures or refinance all or a portion of our indebtedness on or before maturity. Significant delays in our planned capital expenditures may materially and adversely affect our future revenue prospects. In addition, we cannot assure you that we will be able to refinance any of our indebtedness on commercially reasonable terms or at all.

The agreements that govern our indebtedness contain various covenants that could limit our ability to engage in activities that may be in our best long-term interests.

The agreements that govern our indebtedness include covenants that, among other things, may impose significant operating and financial restrictions, including restrictions on our operating subsidiaries' ability to engage in activities that may be in our best long-term interests. These covenants may restrict the ability of our restricted subsidiaries to (among other things):

•: incur additional indebtedness;
•: create or maintain liens on property or assets;
•: consolidate, merge, convey, transfer or lease all or substantially all of our assets;
•: sell, lease, transfer or otherwise dispose of certain assets;
•: declare or pay dividends, redeem stock or make other distributions;
•: make certain investments, loans and advances;
•: repurchase or redeem junior indebtedness;
•: enter into transactions with affiliates;
•: agree to payment restrictions affecting the ability of our restricted subsidiaries to pay dividends to us or make other intercompany loans or transfers; and
•: enter into new lines of business.

In addition, under the terms of the ABL Facility, we may in certain circumstances be required to comply with a specified fixed charge coverage ratio. Our ability to meet this ratio could be affected by events beyond our control, and we cannot assure that we will meet this ratio.

A breach of any of the covenants under any of our debt agreements would result in a default under such agreement. If any such default occurs and is not cured or waived, the administrative agent under the agreement would be entitled to take various actions, including the acceleration of amounts due under the agreement and all actions permitted to be taken by a secured creditor, including to foreclose against the assets securing their borrowings. We cannot be certain that we will have funds available to remedy these defaults. If our indebtedness is accelerated, we cannot be certain that we will have sufficient funds available to pay the accelerated indebtedness or that we will have the ability to refinance the accelerated indebtedness on terms favorable to us or at all. This could have serious

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adverse consequences on our financial condition and could cause us to become insolvent, and we could be forced into bankruptcy or liquidation. See "Description of Certain Indebtedness."

We have in the past needed to seek waivers or amendments to our debt agreements. See "Description of Certain Indebtedness." There can be no assurance that our lenders would provide such waivers or agree to such amendments in the future.

An increase in interest rates would increase the cost of servicing our debt and could reduce our profitability.

Our indebtedness under the ABL Facility and the Term Loan Facilities bears interest at variable rates. As a result, increases in interest rates above the applicable floor, if any, could increase the cost of servicing such debt and materially reduce our profitability and cash flows. As of December 31, 2016, assuming all ABL Facility revolving loans were fully drawn, each one percentage point change in interest rates (above the applicable floor, if any) would result in approximately a $12.6 million increase in annual interest expense on our variable rate indebtedness, excluding the effect of the interest rate floor on the Term Loan Facilities. The impact of such an increase would be more significant for us than it would be for some other companies because of our substantial indebtedness.

We may have future capital needs that require us to incur additional debt and may be unable to obtain additional financing on acceptable terms, if at all.

We rely substantially on the liquidity provided by our existing ABL Facility and cash on hand to provide working capital and fund our operations. Our working capital and capital expenditure requirements are likely to grow as the residential and commercial construction markets improve and we execute our strategic growth plan. Economic and credit market conditions, the performance of the residential and commercial construction markets, and our financial performance, as well as other factors, may constrain our financing abilities. Our ability to secure additional financing, if available, and to satisfy our financial obligations under indebtedness outstanding from time to time will depend on our future operating performance, the availability of credit, economic conditions and financial, business and other factors, many of which are beyond our control. The worsening of current housing market conditions and the macroeconomic factors that affect our industry could require us to seek additional capital and have a material adverse effect on our ability to secure such capital on favorable terms, if at all.

We may be unable to secure additional financing or financing on favorable terms or our operating cash flow may be insufficient to satisfy our financial obligations under our outstanding indebtedness. If additional funds are raised through the issuance of additional equity or convertible debt securities, our stockholders may experience significant dilution. We may also incur additional indebtedness in the future, including secured debt, subject to the restrictions contained in the ABL Facility and the Term Loan Facilities. If new debt is added to our current debt levels, the related risks that we now face could intensify.

The Amended and Restated LLC Agreement of US LBM LLC may limit our ability to incur additional indebtedness or refinance our existing indebtedness on favorable terms.

The Amended and Restated LLC Agreement of US LBM LLC will restrict our ability to incur additional indebtedness or refinance our existing indebtedness in a manner that would materially and adversely affect US LBM LLC's ability to make tax distributions to holders of LLC Interests. We may be unable to secure additional financing or refinance our existing indebtedness on favorable terms as a result of such restriction.

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Risks Related to Our Organizational Structure

Our principal asset after the completion of this offering will be our interest in US LBM LLC, and, accordingly, we will depend on distributions from US LBM LLC to pay our taxes and other expenses, including payments under the Tax Receivable Agreements. US LBM LLC's ability to make such distributions may be subject to various limitations and restrictions.

Upon the consummation of this offering, we will be a holding company and will have no material assets other than our ownership of the LLC Interests. As such, we will have no independent means of generating revenue or cash flow, and our ability to pay our taxes and operating expenses or declare and pay dividends in the future, if any, will be dependent upon the financial results and cash flows of US LBM LLC and its subsidiaries and distributions we receive from US LBM LLC. There can be no assurance that US LBM LLC and its subsidiaries will generate sufficient cash flow to distribute funds to us or that applicable state law and contractual restrictions, including covenants in the agreements that govern US LBM LLC's indebtedness, will permit such distributions.

US LBM LLC will continue to be treated as a partnership for U.S. federal income tax purposes and, as such, generally will not be subject to any entity-level U.S. federal income tax. Instead, taxable income of US LBM LLC, if any, will be allocated to holders of LLC Interests, including us. Accordingly, we will generally incur U.S. federal income taxes on our allocable share of any net taxable income of US LBM LLC. Under the terms of the Amended and Restated LLC Agreement of US LBM LLC, US LBM LLC will be obligated to make tax distributions to holders of LLC Interests, including us, to the extent that other distributions made by US LBM LLC are otherwise insufficient to pay the tax liabilities of holders of LLC Interests. In addition to tax expenses, we will also incur expenses related to our operations, including payments under the Tax Receivable Agreements, which we expect could be significant. We intend, as its managing member, to cause US LBM LLC to make cash distributions to the owners of LLC Interests, including us, in an amount sufficient to (i) fund all or part of their tax obligations in respect of taxable income allocated to them and (ii) cover our operating expenses, including payments made under the Tax Receivable Agreements. However, US LBM LLC's ability to make such distributions may be subject to various limitations and restrictions, such as restrictions on distributions that would either violate any contract or agreement to which US LBM LLC is then a party, including debt agreements, or any applicable law, or that would have the effect of rendering US LBM LLC insolvent. If we do not have sufficient funds to pay taxes or other expenses or to fund our operations, we may have to borrow funds, which could materially adversely affect our liquidity and financial condition and subject us to various restrictions imposed by any such lenders. To the extent that we are unable to make payments under any Tax Receivable Agreement for any reason, such payments generally will be deferred and will accrue interest until paid; provided, however, that nonpayment for a specified period may constitute a material breach of a material obligation under such Tax Receivable Agreement and therefore accelerate payments due under such Tax Receivable Agreement. See "Certain Relationships and Related Party Transactions—Related party agreements entered into in connection with this offering and the Reorganization Transactions—Tax Receivable Agreements" and "Certain Relationships and Related Party Transactions—Related party agreements entered into in connection with this offering and the Reorganization Transactions—Amended and Restated LLC Agreement of US LBM LLC." In addition, if US LBM LLC does not have sufficient funds to make distributions, our ability to declare and pay cash dividends on our Class A common stock will also be restricted or impaired. See "—Risks Related to Our Class A Common Stock and This Offering" and "Dividend Policy."

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The Tax Receivable Agreements require us to make cash payments to Continuing LLC Owner and certain Former LLC Owners in respect of certain tax benefits to which we may become entitled, and we expect that the payments we will be required to make will be substantial.

Upon the closing of this offering, we will be a party to two Tax Receivable Agreements. Under the first of these agreements, the Continuing LLC Owner Tax Receivable Agreement, we will be required to make cash payments to Continuing LLC Owner or its permitted transferees equal to 85% of the benefits, if any, that we actually realize, or in some circumstances are deemed to realize, as a result of (i) increases in tax basis or similar tax benefits as a result of exchanges of LLC Interests for cash or shares of our Class A common stock pursuant to the Exchange Agreement and (ii) our utilization of certain other tax benefits related to our entering into the Continuing LLC Owner Tax Receivable Agreement, including tax benefits attributable to payments under the Continuing LLC Owner Tax Receivable Agreement. Under the second agreement, the Former LLC Owner Tax Receivable Agreement, we will be required to make cash payments to certain Former LLC Owners or their permitted transferees equal to 85% of the tax benefits, if any, that we actually realize, or in some circumstances are deemed to realize, as a result of (i) the tax attributes of the LLC Interests we hold in respect of such Former LLC Owners' interest in us, which resulted from such Former LLC Owners' prior indirect acquisition of ownership interests in US LBM LLC and (ii) certain other tax benefits. The amount of the cash payments that we will be required to make under the Tax Receivable Agreements are expected to be significant. Any payments made by us under the Tax Receivable Agreements will generally reduce the amount of overall cash flow that might have otherwise been available to us. Furthermore, our future obligation to make payments under the Tax Receivable Agreements could make us a less attractive target for an acquisition, particularly in the case of an acquirer that cannot use some or all of the tax benefits that are the subject of the Tax Receivable Agreements. Payments under the Tax Receivable Agreements are not conditioned on any holder's continued ownership of LLC Interests or our common stock after this offering.

The actual amount and timing of any payments under the Tax Receivable Agreements will vary depending upon a number of factors, including the timing of exchanges by the holders of LLC Interests, the amount of gain recognized by such holders of LLC Interests, the amount and timing of the taxable income we generate in the future and the federal tax rates then applicable.

Our organizational structure, including the Tax Receivable Agreements, confers certain benefits upon the Continuing LLC Owner and certain Former LLC Owners that will not benefit Class A common stockholders to the same extent as it will benefit Continuing LLC Owner or such Former LLC Owners.

Our organizational structure, including the Tax Receivable Agreements, confers certain benefits upon Continuing LLC Owner and certain Former LLC Owners that will not benefit the holders of our Class A common stock to the same extent as it will benefit Continuing LLC Owner or such Former LLC Owners. We will enter into the Continuing LLC Owner Tax Receivable Agreement which will provide for the payment by us to the exchanging holders of LLC Interests of 85% of the amount of tax benefits, if any, that we actually realize, or in some circumstances are deemed to realize, as a result of (i) increases in tax basis or similar tax benefits as a result of exchanges of LLC Interests for cash or shares of our Class A common stock pursuant to the Exchange Agreement and (ii) our utilization of certain other tax benefits related to our entering into the Continuing LLC Owner Tax Receivable Agreement, including tax benefits attributable to payments under the Continuing LLC Owner Tax Receivable Agreement. In addition, we will enter into the Former LLC Owner Tax Receivable Agreement which will provide for the payment by us to certain Former LLC Owners or their permitted transferees of 85% of the tax benefits, if any, that we actually realize, or in some circumstances are deemed to realize, as a result of (i) the tax attributes of the LLC Interests we hold in respect of such Former LLC Owners' interest in us, which resulted from such Former LLC Owners' prior acquisition of ownership interests in US LBM LLC and (ii) certain other tax benefits. Although we will retain 15% of

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the amount of such tax benefits, this and other aspects of our organizational structure may adversely impact the future trading market for the Class A common stock. In addition, our organizational structure, including the Tax Receivable Agreements, will impose additional compliance costs and require a significant commitment of resources that would not be required of a company with a simpler organizational structure.

In certain cases, payments under the Tax Receivable Agreements to Continuing Owner or Former LLC Owners may be accelerated or significantly exceed the actual benefits we realize in respect of the tax attributes subject to the Tax Receivable Agreements.

Each Tax Receivable Agreement provides that upon certain mergers, asset sales, other forms of business combinations or other changes of control, nonpayment for a specified period which constitutes a material breach of a material obligation under such Tax Receivable Agreement, or if, at any time, we elect an early termination of such Tax Receivable Agreement, then our obligations, or our successor's obligations, under such Tax Receivable Agreement to make payments thereunder would be based on certain assumptions, including an assumption that we would have sufficient taxable income to fully utilize all potential future tax benefits that are subject to such Tax Receivable Agreement.

As a result of the foregoing, (i) we could be required to make payments under such Tax Receivable Agreement that are greater than the specified percentage of the actual benefits we ultimately realize in respect of the tax benefits that are subject to such Tax Receivable Agreement and (ii) if we elect to terminate such Tax Receivable Agreement early, we would be required to make an immediate cash payment equal to the specified percentage of the present value of the anticipated future tax benefits that are the subject of such Tax Receivable Agreement, which payment may be made significantly in advance of the actual realization, if any, of such future tax benefits. In these situations, our obligations under such Tax Receivable Agreement could have a substantial negative impact on our liquidity and could have the effect of delaying, deferring or preventing certain mergers, asset sales, other forms of business combinations or other changes of control. There can be no assurance that we will be able to fund or finance our obligations under the Tax Receivable Agreements.

We will not be reimbursed for any payments made under the Tax Receivable Agreements in the event that any tax benefits are disallowed.

Payments under the Tax Receivable Agreements will be based on the tax reporting positions that we determine, and the Internal Revenue Service (the "IRS") or another taxing authority may challenge all or part of the tax basis increases, as well as other related tax positions we take, and a court could sustain such challenge. We will not be reimbursed for any cash payments previously made under any Tax Receivable Agreement in the event that any tax benefits initially claimed by us and for which payment has been made are subsequently challenged by a taxing authority and are ultimately disallowed. Instead, any excess cash payments made by us under any Tax Receivable Agreement will be netted against and reduce any future cash payments that we might otherwise be required to make to such under the terms of such Tax Receivable Agreement. However, we might not determine that we have effectively made an excess cash payment for a number of years following the initial time of such payment and, if any of our tax reporting positions are challenged by a taxing authority, we will not be permitted to reduce any future cash payments under such Tax Receivable Agreement until any such challenge is finally settled or determined. As a result, payments could be made under such Tax Receivable Agreement in excess of the tax savings that we realize in respect of the tax attributes that are the subject of such Tax Receivable Agreement.

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Unanticipated changes in effective tax rates or adverse outcomes resulting from examination of our income or other tax returns could adversely affect our results of operations and financial condition.

We are subject to taxes by the U.S. federal, state and local tax authorities, and our tax liabilities will be affected by the allocation of expenses to differing jurisdictions. Our future effective tax rates could be subject to volatility or adversely affected by a number of factors, including:

•: changes in the valuation of our deferred tax assets and liabilities;
•: expected timing and amount of the release of any tax valuation allowances;
•: tax effects of stock-based compensation; and
•: changes in tax laws, regulations or interpretations thereof.

In addition, we may be subject to audits of our income, sales and other transaction taxes by U.S. federal, state and local taxing authorities. Outcomes from these audits could have an adverse effect on our operating results and financial condition.

If we were deemed to be an investment company under the Investment Company Act of 1940, as amended (the "1940 Act"), as a result of our ownership of US LBM LLC, applicable restrictions could make it impractical for us to continue our business as currently contemplated and could have a material adverse effect on our business.

Under Sections 3(a)(1)(A) and (C) of the 1940 Act, a company generally will be deemed to be an "investment company" for purposes of the 1940 Act if (i) it is, or holds itself out as being, engaged primarily, or proposes to engage primarily, in the business of investing, reinvesting or trading in securities or (ii) it engages, or proposes to engage, in the business of investing, reinvesting, owning, holding or trading in securities and it owns or proposes to acquire investment securities having a value exceeding 40% of the value of its total assets (exclusive of U.S. government securities and cash items) on an unconsolidated basis. We do not believe that we are an "investment company," as such term is defined in either of those sections of the 1940 Act.

As the sole managing member of US LBM LLC, we will control and operate US LBM LLC. On that basis, we believe that our interest in US LBM LLC is not an "investment security" as that term is used in the 1940 Act. However, if we were to cease participation in the management of US LBM LLC, our interest in US LBM LLC could be deemed an "investment security" for purposes of the 1940 Act.

We and US LBM LLC intend to conduct our operations so that we will not be deemed an investment company. However, if we were to be deemed an investment company, restrictions imposed by the 1940 Act, including limitations on our capital structure and our ability to transact with affiliates, could make it impractical for us to continue our business as contemplated and could have a material adverse effect on our business.

Risks Related to Our Class A Common Stock and This Offering

Following the consummation of this offering, Continuing LLC Owner may exchange its LLC Interests for our Class A common stock and our board of directors may, at its option, redeem Continuing LLC Owner's LLC Interests pursuant to the terms of the Amended and Restated LLC Agreement.

After this offering, we will have an aggregate of more than shares of Class A common stock authorized but unissued, including approximately shares of Class A common stock issuable upon exchange of LLC Interests that will be held by Continuing LLC Owner. US LBM LLC will enter into the Amended and Restated LLC Agreement and, subject to certain restrictions set forth therein and as described elsewhere in this prospectus, Continuing LLC Owner may exchange its LLC Interests for shares of our Class A common stock. Additionally, our board of directors, which will include

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directors who are affiliated with Continuing LLC Owner, may, at its option, instead require us to make a cash payment to redeem Continuing LLC Owner's LLC Interests in accordance with the terms of the Amended and Restated LLC Agreement. We also intend to enter into a Registration Rights Agreement pursuant to which the shares of Class A common stock issued to Continuing LLC Owner upon exchange of LLC Interests and the shares of Class A common stock issued to the Former LLC Owners in connection with the Reorganization Transactions will be eligible for resale, subject to certain limitations set forth therein. See "Certain Relationships and Related Party Transactions—Related party agreements entered into in connection with this offering and the Reorganization Transactions—Registration Rights Agreement."

We cannot predict the size of future issuances of our Class A common stock or the effect, if any, that future issuances and sales of shares of our Class A common stock may have on the market price of our Class A common stock. Sales or distributions of substantial amounts of our Class A common stock, including shares issued in connection with an acquisition, or the perception that such sales or distributions could occur, may cause the market price of our Class A common stock to decline.

There is no public market for our Class A common stock and a market may never develop.

Before this offering, there has been no public trading market for our Class A common stock. We intend to apply to list our Class A common stock on the under the symbol "LBM". However, an active and liquid trading market for our Class A common stock may not develop or be sustained after this offering. If an active and liquid trading market does not develop, you may have difficulty selling your shares of Class A common stock at an attractive price, or at all. The initial public offering price per share of our Class A common stock sold in this offering has been determined by negotiations between us and the representatives of the underwriters. This price may not be indicative of the price at which our Class A common stock will trade after this offering. The market price of our Class A common stock may decline below the initial public offering price, and you may not be able to sell your Class A common stock at or above the price you paid in this offering, or at all.

Our Class A common stock price may be volatile, or may decline regardless of our operating performance, and you could lose all or part of your investment.

You should only invest in our Class A common stock if you can withstand a significant loss and wide fluctuation in the market value of your investment. The market price of our Class A common stock may fluctuate significantly after this offering in response to the factors described in this "Risk factors" section and other factors, many of which are beyond our control. Among the factors that could affect our Class A common stock price are:

•: industry or general market conditions;
•: domestic and international economic factors and uncertainty unrelated to our performance;
•: announcements of innovations or new products or services by us or our competitors;
•: any adverse changes to our relationships with our customers, manufacturers or suppliers;
•: variations in the costs of products that we distribute;
•: any legal actions in which we may become involved;
•: announcements concerning our competitors or the building supply industry in general;
•: achievement of expected product sales and profitability;
•: manufacture, supply or distribution shortages;

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•: adverse actions taken by regulatory agencies with respect to our services or the products we distribute;
•: changes in our customers' preferences;
•: actual or anticipated fluctuations in our quarterly or annual operating results or those of other companies in our industry;
•: publication of research reports or news stories about us, our competitors or our industry, or positive or negative recommendations or withdrawal of research coverage by securities analysts;
•: trading volume of our Class A common stock;
•: action by institutional stockholders or other large stockholders (including the Kelso Affiliates);
•: speculation in the press or investment community;
•: investor perception of us and our industry;
•: changes in market valuations or earnings of similar companies;
•: sales of our Class A common stock or other securities, including by our directors, executive officers and principal stockholders (including the Kelso Affiliates);
•: general economic and market conditions and overall fluctuations in the U.S. equity markets;
•: changes in accounting principles; and
•: the loss of any of our senior management or key personnel or changes in our board of directors.

In particular, we cannot assure you that you will be able to resell your shares at or above the initial public offering price. The stock markets have experienced extreme volatility in recent years that has been unrelated to the operating performance of particular companies. These broad market fluctuations may adversely affect the trading price of our Class A common stock. In the past, following periods of volatility in the market price of a company's securities, class action litigation has often been instituted against such company. Any litigation of this type brought against us could result in substantial costs and a diversion of our management's attention and resources, which would harm our business, operating results and financial condition.

Future sales, or the perception of future sales, of shares by existing stockholders could cause our Class A common stock price to decline.

Sales of substantial amounts of our Class A common stock in the public market after this offering, or the perception that these sales could occur, could adversely affect the price of our Class A common stock and could impair our ability to raise capital through the sale of additional shares. Upon the closing of this offering, we will have shares of Class A common stock outstanding (or if the underwriters exercise in full their option to purchase additional shares of Class A common stock) and authorized but unissued shares of Class A common stock that would be issuable upon redemption or exchange of LLC Interests. The shares of Class A common stock offered in this offering will be freely tradable without restriction under the Securities Act of 1933, as amended (the "Securities Act"), except for any shares of our Class A common stock that may be held or acquired by our directors, executive officers and other affiliates, as that term is defined in the Securities Act, which will be restricted securities under the Securities Act. Restricted securities may not be sold in the public market unless the sale is registered under the Securities Act or an exemption from registration is available.

We and each of our directors, executive officers and holders of substantially all of our outstanding Class A common stock (including shares of Class A common stock issuable upon redemption or

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exchange of LLC Interests), have agreed with the underwriters, subject to certain exceptions, not to dispose of or hedge any shares of our Class A common stock or securities convertible into or exchangeable for our Class A (including the LLC Interests), or that represent the right to receive, shares of our Class A common stock during the period from the date of this prospectus continuing through the date 180 days after the date of this prospectus, except with the prior written consent of the representatives of the underwriters. Although there is no present intention to do so, the representatives may, in their sole discretion, release all or any portion of the shares from the restrictions in any of the lock-up agreements described above. See "Underwriting (Conflicts of Interest)." All of our shares of Class A common stock outstanding as of the date of this prospectus (and shares of Class A common stock issuable upon redemption or exchange of LLC Interests) may be sold in the public market by existing stockholders following the expiration of the applicable lock-up period, subject to applicable limitations imposed under federal securities laws. Possible sales of these shares in the market following the expiration or waiver of such lock-up agreements could exert significant downward pressure on the price of our Class A common stock.

We intend to file one or more registration statements on Form S-8 under the Securities Act to register all shares of Class A common stock (i) subject to outstanding options granted in connection with this offering and (ii) issued or issuable under our stock plans. Any such Form S-8 registration statements will automatically become effective upon filing. Accordingly, shares registered under such registration statements will be available for sale in the open market following the expiration of the applicable lock-up period. We expect that the initial registration statement on Form S-8 will cover shares of our Class A common stock.

See "Shares Available for Future Sale" for a more detailed description of the restrictions on selling shares of our Class A common stock after this offering.

In the future, we may issue additional shares of Class A common stock or other equity or debt securities convertible into Class A common stock in connection with a financing, acquisition, litigation settlement or employee arrangement or otherwise. Any of these issuances could result in substantial dilution to our existing stockholders and could cause the trading price of our Class A common stock to decline.

Fulfilling our requirements incident to being a public company will be expensive and time-consuming, and we may be unable to comply with these requirements in a timely or cost-effective manner.

Following this offering, we will be subject to the reporting and corporate governance requirements under the Securities Exchange Act of 1934, as amended (the "Exchange Act"), the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010, the listing standards of the and the Sarbanes-Oxley Act of 2002 and SEC rules promulgated thereunder (the "Sarbanes-Oxley Act") that apply to issuers of listed equity, which will impose significant new legal, accounting and compliance costs and obligations upon us. The changes necessitated by publicly listing our equity will require a significant commitment of additional resources and management oversight, which will increase our operating costs. These changes will also place additional demands on our finance and accounting staff and on our financial accounting and information systems. Other expenses associated with being a public company include increases in auditing, accounting and legal fees and expenses, investor relations expenses, increased directors' fees and director and officer liability insurance costs, registrar and transfer agent fees and listing fees, as well as other expenses. As a public company, we will be required, among other things, to define and expand the roles and the duties of our board of directors and its committees and institute more comprehensive compliance and investor relations functions. The time and costs of fulfilling these requirements could have a material adverse effect on our business and results of operations.

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We have identified material weaknesses in our internal control over financial reporting. If our remediation of these material weaknesses is not effective, or if we experience additional material weaknesses in the future or otherwise fail to maintain an effective system of internal controls in the future, we may not be able to accurately or timely report our financial condition or results of operations, which may adversely affect investor confidence in us and, as a result, the value of our Class A common stock.

As a public company, we will be required to document and test our internal control procedures to satisfy the requirements of the Sarbanes-Oxley Act, which will require annual assessments by management of the effectiveness of our internal control over financial reporting. Though we will be required to disclose changes made in our internal control over financial reporting and procedures on a quarterly basis, we will not be required to make our first annual assessment of our internal control over financial reporting pursuant to Section 404 of the Sarbanes-Oxley Act (including an auditor attestation report on the effectiveness of our internal control over financial reporting pursuant to Section 404(b) of the Sarbanes-Oxley Act) until our second annual report on Form 10-K is filed with the SEC.

During the course of preparing for this offering, we identified two material weaknesses in the design and operation of our internal control over financial reporting. A material weakness is a deficiency, or a combination of deficiencies, in internal control over financial reporting, such that there is a reasonable possibility that a material misstatement of a company's annual or interim financial statements will not be prevented or detected on a timely basis. These material weaknesses related to (i) a lack of controls over the preparation and review of journal entries and (ii) a lack of consistently implemented accounting policies and procedures combined with ineffective IT general controls for information systems that are relevant to the preparation of our consolidated financial statements and an insufficient complement of personnel with a level of GAAP accounting knowledge commensurate with our financial reporting requirements at the local operating company level, which, in the aggregate, constitute a material weakness. These deficiencies resulted in material adjustments to correct the previously issued consolidated financial statements of our subsidiary LBM Borrower, LLC and could result in material misstatements to our consolidated financial statements that may not be prevented or detected on a timely basis.

We are currently in the process of remediating these material weaknesses and are taking numerous steps to enhance our internal control environment and address these material weaknesses, primarily through the hiring of additional financial reporting personnel with technical accounting and financial reporting experience, enhancing our internal review procedures during the financial statement close process and designing and implementing the appropriate IT general computer controls; however, our current efforts to design and implement an effective control environment may not be sufficient to remediate the material weaknesses described above or prevent future material weaknesses or other deficiencies from occurring. Despite these actions, we may identify additional material weaknesses in our internal control over financial reporting in the future.

If we fail to effectively remediate these material weaknesses in our control environment, if we identify future material weaknesses in our internal control over financial reporting or if we are unable to comply with the demands that will be placed upon us as a public company, including the requirements of Section 404 of the Sarbanes-Oxley Act, in a timely manner, we may be unable to accurately report our financial results, or report them within the timeframes required by the SEC. We also could become subject to sanctions or investigations by the , the SEC or other regulatory authorities. In addition, if we are unable to assert that our internal control over financial reporting is effective, or if our independent registered public accounting firm is unable to express an opinion as to the effectiveness of our internal control over financial reporting, when required, investors may lose confidence in the accuracy and completeness of our financial reports, we may face restricted access to the capital markets and our stock price may be adversely affected.

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Continuing LLC Owner will control all major corporate decisions and its interests may differ from those of our public stockholders.

Immediately following this offering and the application of net proceeds from this offering, Continuing LLC Owner will control approximately % of the combined voting power of our common stock through its ownership of Class B common stock and the provisions of the Stockholders Agreement. As a result, Continuing LLC Owner will be able to control virtually all matters requiring stockholder approval. Continuing LLC Owner is able to, subject to applicable law, and the voting arrangements described in "Certain Relationships and Related Party Transactions—Related party agreements entered into in connection with this offering and the Reorganization Transactions—Stockholders Agreement," elect a majority of the members of our board of directors and control all actions requiring majority stockholder approval to be taken by us and our board of directors, including amendments to our certificate of incorporation and by-laws and approval of significant corporate transactions, including mergers and sales of substantially all of our assets. The directors so elected will have the authority, subject to applicable rules and regulations, to issue additional stock, implement stock repurchase programs, declare dividends and make other decisions. It is possible that the interests of Continuing LLC Owner may in some circumstances conflict with our interests and the interests of our other stockholders, including you. For example, Continuing LLC Owner may have different tax positions from us, including in light of the Continuing LLC Owner Tax Receivable Agreement, that could influence its decisions regarding whether and when to dispose of assets, whether and when to incur new or refinance existing indebtedness, and whether and when we should terminate any Tax Receivable Agreement and accelerate our obligations thereunder. Continuing LLC Owner may otherwise act in a manner that advances its best interests and not necessarily those of other holders of our Class A common stock, including investors in this offering, by, among other things:

•: delaying, preventing or deterring a change in control of us;
•: entrenching our management or our board of directors; or
•: influencing us to enter into transactions or agreements that are not in the best interests of all Class A stockholders.

We will be a "controlled company" within the meaning of the listing standards and, as a result, will qualify for, and intend to rely on, exemptions from certain corporate governance requirements. You will not have the same protections afforded to stockholders of companies that are subject to such requirements.

After completion of this offering, Continuing LLC Owner will control a majority of the voting power of our outstanding common stock. Accordingly, we will be a "controlled company" within the meaning of the corporate governance standards. Under the rules, a company of which more than 50% of the voting power is held by an individual, group or another company is a "controlled company" and may elect not to comply with certain corporate governance standards, including:

•: the requirement that a majority of the board of directors consist of independent directors;
•: the requirement that we have a nominating and corporate governance committee that is composed entirely of independent directors with a written charter addressing the committee's purpose and responsibilities;
•: the requirement that we have a compensation committee that is composed entirely of independent directors with a written charter addressing the committee's purpose and responsibilities; and

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•: the requirement for an annual performance evaluation of the nominating and corporate governance and compensation committees.

Following this offering, we intend to utilize these exemptions. As a result, we will not have a majority of independent directors, our nominating and corporate governance committee and compensation committee will not consist entirely of independent directors and such committees may not be subject to annual performance evaluations. Consequently, you will not have the same protections afforded to stockholders of companies that are subject to all of the corporate governance rules and requirements. Our status as a controlled company could make our common stock less attractive to some investors or otherwise harm our stock price.

Our anti-takeover provisions could prevent or delay a change in control of our Company, even if such change in control would be beneficial to our stockholders.

Provisions of our Amended and Restated Certificate of Incorporation and Amended and Restated By-laws, as they will be in effect upon completion of this offering, as well as certain provisions of Delaware law could discourage, delay or prevent a merger, acquisition or other change in control of our Company, even if such change in control would be beneficial to our stockholders. These provisions include:

•: authorizing the issuance of "blank check" preferred stock that could be issued by our board of directors to increase the number of outstanding shares and thwart a takeover attempt;
•: establishing a classified board of directors, as a result of which our board of directors will be divided into three classes, with members of each class serving staggered three-year terms, which prevents stockholders from electing an entirely new board of directors at an annual meeting;
•: limiting the ability of stockholders to remove directors if Continuing LLC Owner and those Former LLC Owners party to the Stockholders Agreement (collectively, the "Stockholders Agreement Parties") cease to own at least 35% of the total voting power of the outstanding shares of our common stock;
•: providing that vacancies on our board of directors, including vacancies resulting from an enlargement of our board of directors, may be filled only by a majority vote of directors then in office;
•: prohibiting stockholders from calling special meetings of stockholders if the Stockholders Agreement Parties cease to own at least 35% of the total voting power of the outstanding shares of our common stock;
•: prohibiting stockholder action by written consent, thereby requiring all actions to be taken at a meeting of the stockholders, if the Stockholders Agreement Parties cease to own at least 35% of the total voting power of the outstanding shares of our common stock;
•: establishing advance notice requirements for nominations of candidates for election as directors or to bring other business before an annual meeting of our stockholders; and
•: requiring the approval of holders of at least 66²/3% of the outstanding shares of our common stock then entitled to vote at any annual or special meeting of stockholders to amend our Amended and Restated By-laws and certain provisions of our Amended and Restated Certificate of Incorporation if the Stockholders Agreement Parties cease to own at least 35% of the total voting power of the outstanding shares of our common stock.

In addition, we will opt out of Section 203 of the General Corporation Law of the State of Delaware (the "DGCL") which, subject to some exceptions, prohibits business combinations between a Delaware corporation and an interested stockholder, which is generally defined as a stockholder who

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becomes a beneficial owner of 15% or more of a Delaware corporation's voting stock for a three-year period following the date that the stockholder became an interested stockholder. See "Description of Capital Stock."

These provisions could also discourage proxy contests and make it more difficult for you and other stockholders to elect directors of your choosing and cause us to take other corporate actions you desire. In addition, because our board of directors is responsible for appointing the members of our management team, these provisions could in turn affect any attempt by our stockholders to replace current members of our management team.

Under our Amended and Restated Certificate of Incorporation, the Kelso Affiliates and their respective affiliates and, in some circumstances, any of our directors and officers who is also a director, officer, employee, member or partner of the Kelso Affiliates and their respective affiliates, have no obligation to offer us corporate opportunities.

The Kelso Affiliates are in the business of making or advising on investments in companies and may hold, and may from time to time in the future acquire interests in or provide advice to businesses that directly or indirectly compete with certain portions of our business or the business of our suppliers. Our Amended and Restated Certificate of Incorporation will provide that, to the fullest extent permitted by law, neither the Kelso Affiliates nor any director who is not employed by us or his or her affiliates will have any duty to refrain from engaging in a corporate opportunity in the same or similar lines of business as us. The Kelso Affiliates may also pursue acquisitions that may be complementary to our business, and, as a result, those acquisition opportunities may not be available to us.

The policies relating to corporate opportunities and transactions with the Kelso Affiliates to be set forth in our Amended and Restated Certificate of Incorporation address potential conflicts of interest between the Company, on the one hand, and the Kelso Affiliates and their respective officers and directors who are directors or officers of our company, on the other hand. By becoming a stockholder in Holdings, you will be deemed to have notice of and have consented to these provisions of our Amended and Restated Certificate of Incorporation. Although these provisions are designed to resolve conflicts between us and the Kelso Affiliates and their respective affiliates fairly, conflicts may not be so resolved.

If securities or industry analysts do not publish research or publish misleading or unfavorable research about our business or our industry, our Class A common stock price and trading volume could decline.

The trading market for our Class A common stock will depend in part on the research and reports that securities or industry analysts publish about us, our business or our industry. We do not have control over these analysts and we may be unable or slow to attract research analyst coverage. If we do attract analyst coverage, one or more analysts could issue negative recommendations with respect to our Class A common stock or publish other unfavorable or misleading commentary or cease publishing reports about us, our business or our industry. If one or more of these analysts cease coverage of us or fails to publish reports on us regularly, we could lose visibility in the market. As a result of one or more of these factors, our Class A common stock price and trading volume could decline.

Future offerings of debt or equity securities, which would rank senior to our Class A common stock, may adversely affect the market price of our Class A common stock.

If, in the future, we decide to issue debt or equity securities that rank senior to our Class A common stock, it is likely that such securities will be governed by an indenture or other instrument containing covenants restricting our operating flexibility. Additionally, any convertible or exchangeable securities that we issue in the future may have rights, preferences and privileges more favorable than

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those of our Class A common stock and may result in dilution to owners of our Class A common stock. We and, indirectly, our stockholders, will bear the cost of issuing and servicing such securities. Because our decision to issue debt or equity securities in any future offering will depend on market conditions and other factors beyond our control, we cannot predict or estimate the amount, timing or nature of our future offerings. Thus, holders of our Class A common stock will bear the risk of our future offerings reducing the market price of our Class A common stock and diluting the value of their stock holdings in us.

We may issue preferred stock with terms that could dilute the voting power or reduce the value of our Class A common stock.

Our certificate of incorporation authorizes us to issue, without the approval of our stockholders, one or more classes or series of preferred stock having such designations, powers, preferences and relative, participating, optional and other rights, and such qualifications, limitations or restrictions as our board of directors generally may determine. The terms of one or more classes or series of preferred stock could dilute the voting power or reduce the value of our Class A common stock. For example, we could grant holders of preferred stock the right to elect some number of our directors in all events or on the happening of specified events or the right to veto specified transactions. Similarly, the repurchase or redemption rights or dividend, distribution or liquidation preferences we could assign to holders of preferred stock could affect the residual value of the Class A common stock.

Our Amended and Restated Certificate of Incorporation will designate the Court of Chancery of the State of Delaware as the exclusive forum for certain litigation that may be initiated by our stockholders, which could limit our stockholders' ability to obtain a favorable judicial forum for disputes with us.

Our Amended and Restated Certificate of Incorporation will provide that the Court of Chancery of the State of Delaware will, to the fullest extent permitted by law, be the sole and exclusive forum for (i) any derivative action or proceeding brought on our behalf, (ii) any action asserting a claim of breach of a fiduciary duty owed to us or our stockholders by any of our directors, officers, other employees, agents or stockholders, (iii) any action asserting a claim arising out of or under the DGCL or as to which the DGCL confers jurisdiction on the Court of Chancery of the State of Delaware (including, without limitation, any action asserting a claim arising out of or pursuant to our Amended and Restated Certificate of Incorporation or our Amended and Restated By-laws) or (iv) any action asserting a claim that is governed by the internal affairs doctrine. By becoming a stockholder in our company, you will be deemed to have notice of and have consented to the provisions of our amended and restated certificate of incorporation related to choice of forum. The choice of forum provision in our Amended and Restated Certificate of Incorporation may limit our stockholders' ability to obtain a favorable judicial forum for disputes with us or any of our directors, officers, other employees, agents or stockholders, which may discourage lawsuits with respect to such claims. Alternatively, if a court were to find the choice of forum provision contained in our amended and restated certificate of incorporation to be inapplicable or unenforceable in an action, we may incur additional costs associated with resolving such action in other jurisdictions, which could harm our business, results of operations and financial condition.

We could be the subject of securities class action litigation due to future stock price volatility, which could divert management's attention and adversely affect our results of operations.

The stock market in general, and market prices for the securities of companies like ours in particular, have from time to time experienced volatility that often has been unrelated to the operating performance of the underlying companies. A certain degree of stock price volatility can be attributed to being a newly public company. These broad market and industry fluctuations may adversely affect the

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market price of our Class A common stock, regardless of our operating performance. In certain situations in which the market price of a stock has been volatile, holders of that stock have instituted securities class action litigation against the company that issued the stock. If any of our stockholders were to bring a similar lawsuit against us, the defense and disposition of the lawsuit could be costly and divert the time and attention of our management and harm our operating results.

We do not intend to pay dividends on our Class A common stock and, consequently, your ability to achieve a return on your investment will depend on appreciation in the price of our Class A common stock.

We do not intend to declare and pay dividends on our Class A common stock for the foreseeable future. We currently intend to invest our future earnings, if any, to fund our growth, to develop our business, for working capital needs and for general corporate purposes. Therefore, you are not likely to receive any dividends on your Class A common stock for the foreseeable future and the success of an investment in shares of our Class A common stock will depend upon any future appreciation in their value. There is no guarantee that shares of our Class A common stock will appreciate in value or even maintain the price at which our stockholders have purchased their shares. In addition, our operations are conducted almost entirely through our subsidiaries. As such, to the extent that we determine in the future to pay dividends on our Class A common stock, none of our subsidiaries will be obligated to make funds available to us for the payment of dividends. Further, the agreements governing the ABL Facility and the Term Loan Facilities significantly restrict the ability of our subsidiaries to make distributions or otherwise transfer assets to us. In addition, Delaware law may impose requirements that may restrict our ability to pay dividends to holders of our Class A common stock.

You will experience immediate and substantial dilution as a result of this offering.

Dilution is the difference between the offering price per share and the pro forma net tangible book value per share of our Class A common stock immediately after this offering. The price you pay for shares of our Class A common stock sold in this offering is substantially higher than our pro forma net tangible book value per share immediately after this offering. If you purchase shares of Class A common stock in this offering, you will incur immediate and substantial dilution in the amount of $ per share based on an assumed initial public offering price of $ per share (the midpoint of the price range listed on the cover page of this prospectus). In addition, you may also experience additional dilution, or potential dilution, upon future equity issuances to investors or to our employees and directors under any equity incentive plans we may adopt. As a result of this dilution, investors purchasing shares of Class A common stock in this offering may receive significantly less than the full purchase price that they paid for the stock purchased in this offering in the event of liquidation. See "Dilution."

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SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS

This prospectus contains forward looking statements. Some of the forward-looking statements can be identified by the use of terms such as "may," "intend," "might," "will," "should," "could," "would," "expect," "believe," "estimate," "anticipate," "predict," "project," "potential," or the negative of these terms, and similar expressions. You should be aware that these forward-looking statements are subject to risks and uncertainties that are beyond our control. Further, any forward-looking statement speaks only as of the date on which it is made, and we undertake no obligation to update any forward-looking statement to reflect events or circumstances after the date on which it is made or to reflect the occurrence of anticipated or unanticipated events or circumstances. New factors emerge from time to time that may cause our business not to develop as we expect, and it is not possible for us to predict all of them. Factors that may cause actual results to differ materially from those expressed or implied by the forward-looking statements include, but are not limited to, the following:

•: our dependency upon the residential, repair and remodel and commercial new construction markets;
•: general business, financial market and economic conditions;
•: our inability to achieve our profitability goals;
•: our inability to pursue strategic transactions and open new greenfield locations;
•: pricing pressures;
•: competition in our highly fragmented industry and the markets in which we operate;
•: the consolidation of our industry;
•: the effects of weather and seasonality in the markets in which we operate;
•: the fluctuations in prices of the products we distribute;
•: the potential loss of any significant customers;
•: credit risk from our customers;
•: a disruption or breach in our IT systems;
•: our inability to expand into new geographic markets;
•: the successful implementation of our strategic initiatives;
•: our inability to attract highly qualified associates and other key personnel;
•: exposure to product liability and various other claims and litigation;
•: product shortages and potential loss of relationships with key suppliers;
•: changes in our product mix;
•: our inability to effectively manage our inventory as our sales volume increases or the prices of the products we distribute fluctuate;
•: our inability to renew leases for our facilities;
•: significant increases in petroleum costs or shortages in the supply of petroleum;
•: natural or man-made disruptions to our facilities;
•: failure in or breach of our operational or information security systems;
•: our inability to maintain licenses for third-party and open source software;

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•: the impact of federal, state and local regulations;
•: the cost of compliance with environmental, health and safety laws and other regulations;
•: an impairment of our goodwill;
•: changes in financial accounting standards;
•: our current level of indebtedness and our potential to incur additional indebtedness;
•: our inability to generate cash or refinance our indebtedness;
•: our inability to engage in activities that may be in our best long-term interests because of restrictions in our debt agreements;
•: an increase in interest rates;
•: our inability to obtain additional financing on acceptable terms, if at all;
•: the Tax Receivable Agreements and our organizational structure;
•: Continuing LLC Owner's control of us; and
•: other risks and uncertainties, including those listed under "Risk Factors."

You should read this prospectus completely and with the understanding that actual future results may be materially different from expectations. All forward-looking statements made in this prospectus are qualified by these cautionary statements. These forward-looking statements are made only as of the date of this prospectus, and we do not undertake any obligation, other than as may be required by law, to update or revise any forward-looking or cautionary statements to reflect changes in assumptions, the occurrence of events, unanticipated or otherwise, changes in future operating results over time or otherwise. Comparisons of results for current and any prior periods are not intended to express any future trends or indications of future performance, unless expressed as such, and should only be viewed as historical data.

Other risks, uncertainties and factors, including those discussed under "Risk Factors," could cause our actual results to differ materially from those projected in any forward-looking statements we make. Readers should read carefully the factors described in "Risk Factors" to better understand the risks and uncertainties inherent in our business and underlying any forward-looking statements.

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THE REORGANIZATION TRANSACTIONS

Our History and Existing Organizational Structure

On July 24, 2015, the Kelso Affiliates entered into a definitive agreement to purchase a majority of the equity interests of US LBM Holdings, LLC, which we refer to as the "Acquisition." On August 20, 2015, through three newly formed entities, Continuing LLC Owner, US LBM LLC and its subsidiary LBM Borrower, the Acquisition was consummated. In connection with the Acquisition, on August 20, 2015 (the "Closing Date") we entered into the First Lien Term Loan Credit Agreement, the Second Lien Term Loan Facility and ABL Credit Agreement (each, as defined in "Description of Certain Indebtedness") for the incurrence of $986 million of indebtedness, including $811 million of which was drawn under the Term Loan Facilities on the Closing Date, in order to fund the Acquisition and related costs. See "Description of Certain Indebtedness."

The diagram below depicts our current organizational structure:

¹: Other than those entities that are either inactive or immaterial, each of our operating subsidiaries is a guarantor under the Term Loan Facilities and the ABL Facility. See "Description of Certain Indebtedness."

Organizational Structure Following this Offering

Immediately following this offering, Holdings will be a holding company, and its sole material asset will be its equity interest in US LBM LLC. Although Holdings will have a minority economic interest in US LBM LLC, Holdings will be the sole managing member of US LBM LLC and will operate and control all of the business and affairs of US LBM LLC and, through US LBM LLC and its subsidiaries, conduct our business. Accordingly, Holdings is expected to consolidate US LBM LLC on its

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consolidated financial statements and record a noncontrolling interest related to the LLC Interests held by Continuing LLC Owner on its consolidated statements of operations and comprehensive income.

In connection with the closing of this offering, the Former LLC Owners have agreed to receive LLC Interests in exchange for their existing indirect ownership interests in US LBM LLC and to exchange these LLC Interests for shares of Class A common stock of Holdings. In addition, in connection with the closing of this offering, Continuing LLC Owner has agreed to receive LLC Interests in exchange for its existing direct ownership interest in US LBM LLC. Beginning six months after the completion of this offering, Continuing LLC Owner (or certain of its permitted transferees) will be entitled to exchange LLC Interests for shares of Class A common stock.

Holdings will have two classes of common stock outstanding after this offering: Class A common stock and Class B common stock. Each share of Class A common stock and Class B common stock will entitle its holder to one vote on all matters presented to our stockholders generally. Continuing LLC Owner will hold all of the shares of our Class B common stock that will be outstanding upon consummation of this offering. The shares of Class B common stock will have no right to dividends or distributions, whether in cash or stock, but will entitle the holder to one vote per share on matters presented to the stockholders of Holdings. The Class B common stock will entitle Continuing LLC Owner to a number of votes that is equal to the aggregate number of LLC Interests of US LBM LLC that it holds and has not transferred to Holdings in accordance with the Exchange Agreement (as defined below), or otherwise forfeited in accordance with the Amended and Restated LLC Agreement. Upon consummation of this offering, certain of our pre-IPO owners (including the Kelso Affiliates and certain members of our management) will comprise all of the members of Continuing LLC Owner. However, Continuing LLC Owner may in the future admit additional members, in connection with an acquisition or otherwise. Members of Continuing LLC Owner are not entitled to shares of Class B common stock solely as a result of their admission as members. However, we may in the future issue shares of Class B common stock to one or more members to whom LLC Interests are also issued, for example, in connection with the contribution of assets to US LBM LLC by such member. Accordingly, as a holder of both LLC Interests and Class B common stock, any such holder of Class B common stock would be entitled to a number of votes equal to the number of LLC Interests held by it. If at any time the ratio at which LLC Interests are exchangeable for shares of our Class A common stock changes from one-for-one as described under "Certain Relationships and Related Party Transactions—Related party agreements entered into in connection with this offering and the Reorganization Transactions—Exchange Agreement," for example, as a result of conversion rate adjustments for stock splits, stock dividends or reclassifications, the number of votes to which Class B common stockholders are entitled will be adjusted accordingly. Holders of shares of our Class B common stock will vote together with holders of our Class A common stock as a single class on all matters on which stockholders are entitled to vote generally, except as otherwise required by law.

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The diagram below depicts our organizational structure immediately following this offering:

¹: Other than those entities that are either inactive or immaterial, each of our operating subsidiaries is a guarantor under the Term Loan Facilities and the ABL Facility. See "Description of Certain Indebtedness."
²: Only certain of the Former LLC Owners will be party to the Former LLC Owner Tax Receivable Agreement.

Incorporation of US LBM Holdings, Inc.

Holdings was incorporated as a Delaware corporation on April 26, 2017. Holdings has not engaged in any business or other activities except in connection with its formation. The Amended and Restated Certificate of Incorporation of Holdings will authorize two classes of common stock, Class A common stock and Class B common stock, each having the terms and rights described in "Description of Capital Stock."

Amendment and Restatement of Limited Liability Company Agreement of LBM Midco, LLC

In connection with the Reorganization Transactions, the limited liability company agreement of US LBM LLC will be amended and restated. As a result of the Reorganization Transactions and this offering, we will hold LLC Interests in US LBM LLC and will be the sole managing member of US LBM LLC. Accordingly, we will operate and control all of the business and affairs of US LBM LLC and, through US LBM LLC and its operating subsidiaries, conduct our business. Pursuant to the terms of the Amended and Restated LLC Agreement, we cannot, under any circumstances, be removed as the sole managing member of US LBM LLC except by our election.

Holdings' amended and restated certificate of incorporation and the Amended and Restated LLC Agreement will require that (i) we at all times maintain a ratio of one LLC Interest owned by us for each share of Class A common stock issued by us (subject to certain exceptions for treasury shares and shares underlying certain convertible or exchangeable securities), and (ii) US LBM LLC at all times maintain (x) a one-to-one ratio between the number of shares of Class A common stock issued by us and the number of LLC Interests owned by us and (y) a one-to-one ratio between the number of shares of Class B common stock owned by the Continuing LLC Owner (or its permitted assigns) and

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the number of LLC Interests owned by the Continuing LLC Owner (or its permitted assigns). This construct is intended to result in the Continuing LLC Owner having a voting interest in Holdings that is identical to Continuing LLC Owner's percentage economic interest in US LBM LLC.

Pursuant to the Amended and Restated LLC Agreement as it will be in effect at the time of this offering, as managing member, Holdings has the right to determine when distributions, other than tax distributions, will be made by US LBM LLC to holders of LLC Interests and the amount of any such distributions. If a distribution other than a tax distribution is authorized, such distribution will be made to the holder of LLC Interests (which will initially only be Continuing LLC Owner and Holdings) pro rata in accordance with the percentages of their respective LLC Interests. The holders of LLC Interests, including Holdings, will incur U.S. federal, state and local income taxes on their allocable share (determined under relevant tax rules) of any taxable income of US LBM LLC. Net profits and net losses of US LBM LLC will generally be allocated to holders of LLC Interests (including Holdings) pro rata in accordance with the percentages of their respective LLC Interests, except to the extent certain rules provide for disproportionate allocations or are otherwise required under applicable tax law. The Amended and Restated LLC Agreement will provide that US LBM LLC, to the extent permitted by our agreements governing our indebtedness, will make cash distributions, which we refer to as "tax distributions," to the holders of LLC Interests.

See "Certain Relationships and Related Party Transactions—Related party agreements entered into in connection with this offering and the Reorganization Transactions—Amended and Restated LLC Agreement of US LBM LLC."

Exchange Agreement

We and Continuing LLC Owner will enter into an exchange agreement (the "Exchange Agreement") at the time of this offering under which Continuing LLC Owner (or certain of its permitted transferees) will have the right, from and after the date that is six months after the date of the completion of this offering (subject to the terms of the Exchange Agreement), to exchange its LLC Interests for shares of our Class A common stock on a one-for-one basis, subject to customary conversion rate adjustments for stock splits, stock dividends and reclassifications. As a holder exchanges LLC Interests with Holdings for shares of Class A common stock, the number of LLC Interests held by Holdings will be correspondingly increased as Holdings acquires the exchanged LLC Interests. Shares of our Class B common stock will be cancelled on a one-for-one basis as LLC Interests are exchanged for shares of our Class A common stock. The Exchange Agreement will provide that a holder of LLC Interests will not have the right to exchange LLC Interests if Holdings determines that such exchange would be prohibited by law or regulation or would violate other agreements with Holdings or its subsidiaries to which the holder of LLC Interests may be subject. Holdings may impose additional restrictions on exchange that it determines to be necessary or advisable so that US LBM LLC is not treated as a "publicly traded partnership" for U.S. federal income tax purposes. Notwithstanding the foregoing, Continuing LLC Owner is generally permitted to exchange LLC Interests at any time. See "Certain Relationships and Related Party Transactions—Related party agreements entered into in connection with this offering and the Reorganization Transactions—Exchange Agreement."

Reorganization Transactions and the Tax Receivable Agreements

On May 9, 2017, US LBM LLC entered into a reorganization agreement with Holdings, Continuing LLC Owner and the Former LLC Owners. Pursuant to the Reorganization Agreement, the Former LLC Owners have agreed to receive LLC Interests in exchange for their existing indirect ownership interests in US LBM LLC and to exchange these LLC Interests for shares of Class A common stock of Holdings prior to the consummation of this offering.

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At the time of the consummation of this offering, Holdings intends to purchase, for cash, newly-issued LLC Interests from US LBM LLC at a purchase price per unit equal to the initial public offering price per share of Class A common stock in this offering, less the underwriting discount. At the time of this offering, Holdings will purchase from US LBM LLC newly-issued LLC Interests for an aggregate purchase price of $ million (or LLC Interests for an aggregate purchase price of $ million if the underwriters exercise in full their option to purchase additional shares of Class A common stock). The issuance and sale of such newly-issued LLC Interests by US LBM LLC to Holdings will correspondingly dilute the ownership interests of Continuing LLC Owner in US LBM LLC. Accordingly, following this offering, Holdings will hold a number of LLC Interests that is equal to the number of shares of Class A common stock that it has issued, including (i) shares of Class A common stock issued to the Former LLC Owners in exchange for LLC Interests and (ii) shares of Class A common stock issued in this offering. As a result, a single share of Class A common stock will represent (albeit indirectly) the same percentage equity interest in US LBM LLC as a single LLC Interest.

Holders of LLC Interests other than Holdings (of which there will initially be only one, Continuing LLC Owner) may, subject to certain conditions and transfer restrictions applicable to such holders as set forth in the Amended and Restated LLC Agreement of US LBM LLC (subject to the terms of the Exchange Agreement), exchange their LLC Interests for Class A common stock on a one-for-one basis. The exchanges are expected to result in increases in the tax basis of the tangible and intangible assets of US LBM LLC or other similar tax benefits. These increases in tax basis or benefits may increase (for tax purposes) depreciation and amortization deductions and therefore reduce the amount of taxes that Holdings would otherwise be required to pay in the future, although the IRS may challenge all or part of that tax basis increase, and a court could sustain such a challenge. Prior to the completion of this offering, we will enter into the Continuing LLC Owner Tax Receivable Agreement that provides for the payment by Holdings to Continuing LLC Owner or its permitted transferees of 85% of the benefits, if any, that Holdings realizes, or in some circumstances is deemed to realize, as a result of (i) increases in tax basis or other similar tax benefits as a result exchanges of LLC Interests for cash or shares of our Class A common stock pursuant to the Exchange Agreement and (ii) our utilization of certain other tax benefits related to our entering into the Continuing LLC Owner Tax Receivable Agreement, including tax benefits attributable to payments under the Continuing LLC Owner Tax Receivable Agreement. In addition, we will enter into the Former LLC Owner Tax Receivable Agreement which will provide for the payment by us to certain Former LLC Owners or their permitted transferees of 85% of the tax benefits, if any, that we actually realize, or in some circumstances are deemed to realize, as a result of (i) the tax attributes of the LLC Interests we hold in respect of such Former LLC Owners' interest in us, which resulted from such Former LLC Owners' prior acquisition of ownership interests in US LBM LLC and (ii) certain other tax benefits. See "Certain Relationships and Related Party Transactions—Related party agreements entered into in connection with this offering and the Reorganization Transactions—Tax Receivable Agreements."

We refer to the foregoing transactions as the "Reorganization Transactions."

As a result of the transactions described above:

•: the investors in this offering will collectively own shares of our Class A common stock (or shares of Class A common stock if the underwriters exercise in full their option to purchase additional shares of Class A common stock), and Holdings will hold LLC Interests (or LLC Interests if the underwriters exercise in full their option to purchase additional shares of Class A common stock);
•: Continuing LLC Owner will hold LLC Interests and the Former LLC Owners will hold shares of Class A common stock;

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•: the investors in this offering will collectively have % of the voting power in Holdings (or % if the underwriters exercise in full their option to purchase additional shares of Class A common stock);
•: Continuing LLC Owner will initially hold all of the shares of Class B common stock that will be outstanding upon consummation of this offering, and will have % of the voting power in Holdings (or % if the underwriters exercise in full their option to purchase additional shares of Class A common stock); and
•: the Former LLC Owners will collectively have % of the voting power in Holding (or % if the underwriters exercise in full their option to purchase additional shares of Class A common stock). Pursuant to the Stockholders Agreement, certain of the Former LLC Owners will agree to vote their Class A common stock at the direction of Continuing LLC Owner.

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USE OF PROCEEDS

Based upon an assumed initial public offering price of $ per share, we estimate that we will receive net proceeds from this offering of approximately $ million (or approximately $ million if the underwriters exercise in full their option to purchase additional shares), after deducting estimated underwriting discounts and commissions in connection with this offering and estimated offering expenses payable by us of approximately $ million.

We intend to contribute net proceeds of this offering to US LBM LLC in exchange for LLC Interests from US LBM LLC at an amount contributed per LLC Interest equal to the initial public offering price per share of Class A common stock, less the underwriting discount.

We intend to cause US LBM LLC to use the proceeds it receives from the exchange of the LLC Interests to repay, redeem, repurchase or otherwise acquire or retire certain of our outstanding indebtedness, and for general corporate purposes.

A $1.00 increase or decrease in the assumed initial public offering price of $ per share would increase or decrease the net proceeds to us from this offering by $ assuming the number of shares offered by us remains the same and after deducting estimated underwriting discounts and commission and estimated offering expenses payable by us. An increase or decrease of shares in the number of shares offered by us would increase or decrease the net proceeds to us by $ million, assuming no change in the assumed initial public offering price of $ per share and after deducting the estimated underwriting discounts and commissions and estimated offering expenses payable by us. The information discussed above is illustrative only and will change based on the actual initial public offering price and other terms of this offering determined at pricing.

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DIVIDEND POLICY

As a public company, we do not currently expect to declare or pay dividends on our Class A common stock for the foreseeable future. Instead, we intend to retain future earnings, if any, to service our debt, finance the growth and development of our business and for working capital and general corporate purposes. Any future determination to pay dividends on our Class A common stock is subject to the discretion of our board of directors and will depend upon various factors, including our results of operations, financial condition, liquidity requirements, capital requirements, level of indebtedness, contractual restrictions with respect to payment of dividends, restrictions imposed by applicable law, general business conditions and other factors that our board of directors may deem relevant. Further, our ability to pay dividends to holders of our Class A common stock is limited as a practical matter by the Term Loan Facilities and ABL Facility, insofar as we may seek to pay dividends out of funds made available to us by US LBM Holdings, LLC or its subsidiaries, because the covenants in the Term Loan Facilities and ABL Facility restrict the ability of LBM Borrower and its restricted subsidiaries to directly or indirectly pay dividends or make loans to US LBM LLC or us. See "Description of Certain Indebtedness" for a description of the restrictions on LBM Borrower and US LBM LLC's ability to pay dividends.

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CAPITALIZATION

The following table sets forth the cash and cash equivalents and consolidated capitalization as of December 31, 2016 as follows:

•: of US LBM LLC on an actual basis; and
•: of Holdings on a pro forma basis, after giving effect to (i) the Reorganization Transactions, (ii) our sale of shares of Class A common stock in this offering at an assumed initial public offering price of $ per share, the midpoint of the price range set forth on the cover page of this prospectus (and after deducting estimated underwriting discounts and commissions and offering expenses payable by us) and (iii) the application of the net proceeds therefrom as described in "Use of Proceeds." See "Unaudited Pro Forma Combined Financial Statements."

You should read the following table in conjunction with the sections entitled "Use of Proceeds," "Selected Consolidated Financial Data," "Unaudited Pro Forma Combined Financial Statements," "Management's Discussion and Analysis of Financial Condition and Results of Operations" and our consolidated financial statements and related notes appearing in this prospectus.

	As of December 31, 2016

(In thousands)	US LBM LLC Actual		Pro Forma Holdings
Cash and cash equivalents	$	3,455	$



Long-term debt:
First Lien Term Loan Facility		746,602
Second Lien Term Loan Facility		205,460
ABL Facility¹		130,820
Other long-term debt		28,242

Total long-term debt²	$	1,111,124	$

Total members' equity		473,245		N/A
Total stockholders' equity		N/A
Noncontrolling interests³		—

Total capitalization	$	1,584,369	$

¹: Net of deferred financing costs. As of December 31, 2016, we had an additional $131.7 million available for borrowing under the ABL Facility.
²: Total long-term debt includes the ABL Facility as well as current maturities on long-term debt which totaled approximately $13.3 million as of December 31, 2016.
³: Holding' capitalization on a pro forma basis includes the LLC Interests not owned by Holdings, which represents % of US LBM LLC's outstanding common equity. The Continuing LLC Owner will hold the noncontrolling interest in US LBM LLC. Holdings will hold % of the economic interests in US LBM LLC and the Continuing LLC Owner will hold the remaining % of the economic interests in US LBM LLC.

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DILUTION

Continuing LLC Owner will maintain its LLC Interests in US LBM LLC after the Reorganization Transactions. Because Continuing LLC Owner does not own any Class A common stock or have any right to receive distributions from Holdings, we have presented dilution in pro forma net tangible book value per share after this offering assuming that Continuing LLC Owner had its LLC Interests exchanged for newly-issued shares of Class A common stock on a one-for-one basis (rather than for cash) and the cancellation for no consideration of all of its shares of Class B common stock (which are not entitled to receive distributions or dividends, whether cash or stock, from Holdings) in order to more meaningfully present the dilutive impact on the investors in this offering. We refer to the assumed exchange of all LLC Interests for shares of Class A common stock as described in the previous sentence as the "Assumed Exchange."

Dilution is the amount by which the offering price paid by the purchasers of the Class A common stock in this offering exceeds the pro forma net tangible book value per share of Class A common stock after the offering. Our net tangible book value as of , 2017 was $ million. Net tangible book value per share is determined at any date by subtracting our total liabilities from the total book value of our tangible assets and dividing the difference by the number of shares of Class A common stock deemed to be outstanding at that date.

If you invest in our Class A common stock in this offering, your ownership interest in us will be immediately diluted to the extent of the difference between the initial public offering price per share of our Class A common stock and the net tangible book value per share of our Class A common stock immediately after this offering.

Pro forma net tangible book value per share is determined at any date by subtracting our total liabilities from the total book value of our tangible assets and dividing the difference by the number of shares of Class A common stock, after giving effect to the Reorganization Transactions, including this offering, and the Assumed Exchange. Our pro forma net tangible book value as of , 2017 would have been approximately $ million, or $ per share of Class A common stock. This amount represents an immediate increase in pro forma net tangible book value of $ per share to our existing stockholders and an immediate dilution in pro forma net tangible book value of approximately $ per share to new investors purchasing shares of Class A common stock in this offering. We determine dilution by subtracting the pro forma net tangible book value per share after

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this offering from the amount of cash that a new investor paid for a share of Class A common stock. The following table illustrates this dilution:

		Per Share

Assumed initial public offering price per share		$
Pro forma net tangible book value per share as of , 2017 before this offering¹	$
Increase in net tangible book value per share attributable to new investors in this offering	$

Pro forma net tangible book value per share after this offering		$

Dilution of net tangible book value per share to new investors		$

¹: The computation of pro forma net tangible book value per share as of , 2017 before this offering is set forth below:

(in thousands, except per share data)		Per Share

Numerator
Book value of tangible assets		$
Less: total liabilities		$

Pro forma net tangible book value^a		$



Denominator
Shares of Class A common stock to be outstanding after this offering
Assumed Exchange		$

Total
Pro forma net tangible book value per share		$

^a: Gives pro forma effect to the Reorganization Transactions (other than this offering) and the Assumed Exchange.

If the underwriters exercise in full their option to purchase additional shares, the pro forma net tangible book value per share after giving effect to the offering would be $ per share. This represents an immediate increase in pro forma net tangible book value of $ per share to the existing stockholders and an immediate and substantial dilution in pro forma net tangible book value of $ per share to new investors, in each case assuming an initial public offering price of $ per share, which is the midpoint of the price range set forth on the cover page of this prospectus.

A $1.00 increase or decrease in the assumed initial public offering price of $ per share (the mid-point of the price range set forth on the cover page of this prospectus) would increase or decrease total consideration paid by new investors and total consideration paid by all stockholders by $ million, assuming that the number of shares offered by us set forth on the front cover of this prospectus remains the same, and after deducting the underwriting discounts and commissions and estimated offering expenses payable by us. An increase or decrease of shares in the number of shares offered by us would increase or decrease the total consideration paid to us by new investors and total consideration paid to us by all stockholders by $ million, assuming an initial public offering price of $ per share (the mid-point of the price range set forth on the cover page of this prospectus) remains the same and after deducting the underwriting discounts and commissions and estimated offering expenses payable by us.

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The following table summarizes, as of , 2017 after giving effect to this offering, the differences between the Original LLC Owners and the new investors in this offering with regard to:

•: the number of shares of Class A common stock purchased from us by investors in this offering and the number of shares issued to the Original LLC Owners, after giving effect to the Assumed Exchange;
•: the total consideration paid to us in cash by investors purchasing shares of Class A common stock in this offering and by the Original LLC Owners including historical cash contributions, after giving effect to the Assumed Exchange; and
•: the average price per share of Class A common stock that such Original LLC Owners and new investors paid, after giving effect to the Assumed Exchange.

The calculation below is based on an assumed initial public offering price of $ per share, which is the midpoint of the price range set forth on the cover page of this prospectus before deducting underwriting discounts and commissions and estimated offering expenses payable by us.

	Shares Purchased				Total Consideration

	Shares Purchased				Total Consideration				Average Price Per Share
	Number	Percent			Amount	Percent			Average Price Per Share
Original LLC Owners				%	$			%	$
New investors

Total			100	%	$		100	%	$

Except as otherwise indicated, the discussion and the tables above assume no exercise of the underwriters' option to purchase additional shares of Class A common stock and does not reflect any shares of Class A common stock reserved for issuance under our equity incentive plans. In addition, we may choose to raise additional capital due to market conditions or strategic considerations even if we believe we have sufficient funds for our current or future operating plans. To the extent that additional capital is raised through the sale of equity or convertible debt securities, the issuance of such securities could result in further dilution to our stockholders.

In addition, the discussion and tables above exclude shares of Class B common stock, because holders of the Class B common stock are not entitled to distributions or dividends, whether cash or stock, from Holdings. The number of shares of our Class A common stock outstanding after this offering as shown in the tables above is based on the number of Class A shares outstanding as of , 2017, after giving effect to the Reorganization Transactions and the Assumed Exchange, and excludes shares of Class A common stock reserved for issuance under our equity incentive plans.

If the underwriters exercise their option to purchase additional shares of Class A common stock in full:

•: the percentage of shares of Class A common stock held by Original LLC Owners (after giving effect to the Assumed Exchange) will decrease to approximately % of the total number of shares of our Class A common stock outstanding after this offering; and
•: the number of shares held by new investors will increase to , or approximately % of the total number of shares of our Class A common stock outstanding after this offering (after giving effect to the Assumed Exchange).

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SELECTED CONSOLIDATED FINANCIAL DATA

The following tables present our selected historical consolidated financial data as of the dates and for the periods indicated. The selected historical consolidated financial data reflects the Company's historical accounting basis for the periods prior to the Acquisition (the Predecessor) and the Company's new accounting basis for the periods subsequent to the Acquisition (the Successor). The Predecessor periods of January 1, 2015 through August 19, 2015 and the years ended December 31, 2014, 2013 and 2012 represent the prior ownership while the Successor period of August 20, 2015 (Commencement of Operations) through December 31, 2015 and the year ended December 31, 2016 represents Kelso Affiliates' ownership. The selected consolidated financial data as of December 31, 2016 and December 31, 2015 and for the Successor year ended December 31, 2016, the Successor period from August 20 through December 31, 2015, the Predecessor period from January 1, 2015 through August 19, 2015 and the Predecessor year ended December 31, 2014 has been derived from the Company's audited consolidated financial statements included elsewhere in this prospectus. The consolidated statements of operations data for the Predecessor years ended December 31, 2013 and 2012 and the consolidated balance sheet data as of December 31, 2014, 2013 and 2012 have been derived from the Company's unaudited consolidated financial statements not included elsewhere in this prospectus. The selected consolidated financial data presented below is not necessarily indicative of the results to be expected for any future period. The following selected consolidated financial data is qualified in its entirety by, and should be read in conjunction with, US LBM LLC's consolidated financial statements and related notes, "Management's Discussion and Analysis of Financial Condition and Results of Operations" and "Unaudited Pro Forma Combined Financial Statements" included elsewhere in this prospectus.

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	Successor						Predecessor
	Successor						Predecessor
				Period from August 20 through December 31, 2015			Period from January 1 through August 19, 2015
										Year ended December 31,
	Year ended December 31, 2016									Year ended December 31,
	Year ended December 31, 2016									2014		2013		2012
	(In thousands, except per unit data)
Statement of Operations Data:
Net sales	$	2,664,108		$	823,274		$	1,126,642		$	1,064,762	$	742,760	$	524,460
Cost of sales		1,918,720			613,984			824,474			792,031		547,993		388,530

Gross profit		745,388			209,290			302,168			272,731		194,767		135,930
Selling, general and administrative expenses		597,052			205,232			357,033			225,231		155,756		123,783
Depreciation and amortization		109,525			34,105			26,029			16,033		6,593		5,520

Income (loss) from operations		38,811			(30,047	)		(80,894	)		31,467		32,418		6,627
Interest expense		80,569			25,538			27,353			13,575		3,186		5,641
Loss on early extinguishment of debt		—			—			28,445			—		—		—
Other expense		5,605			1,943			2,938			2,732		1,897		1,399
Income tax expense		343			614			281			121		163		18

Net income (loss)		(47,706	)		(58,142	)		(139,911	)		15,039		27,172		(431	)

Net income attributable to redeemable noncontrolling interests		—			—			315			—		—		—

Net income (loss) attributable to the Company	$	(47,706	)	$	(58,142	)	$	(140,226	)	$	15,039	$	27,172	$	(431	)

Net income (loss) per common unit—basic and diluted		(0.84	)		(1.04	)
Weighted average common units outstanding—basic and diluted		57,039			56,049

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	Successor						Predecessor
	Successor						Predecessor
				Period from August 20 through December 31, 2015			Period from January 1 through August 19, 2015
										Year ended December 31,
	Year ended December 31, 2016									Year ended December 31,
	Year ended December 31, 2016									2014			2013			2012
	(In thousands)
Balance Sheet Data (at period end):
Total assets	$	1,834,545		$	1,697,353					$	601,780		$	233,486		$	160,844
Total debt¹		1,111,124			929,733						388,483			91,158			65,338
Total members' equity		473,245			516,445						68,374			63,792			38,929
Other Financial Data:
Comparable location sales growth²		8.2	%								8.3	%		28.6	%		15.0	%
Adjusted EBITDA³	$	187,856		$	58,672		$	67,128		$	60,967		$	40,771		$	13,940
Adjusted EBITDA margin³		7.1	%		7.1	%		6.0	%		5.7	%		5.5	%		2.7	%

¹: Total debt reflects current and long-term portion of debt, balance outstanding on our ABL Facility, capital lease obligations and sale-leaseback debt net of unamortized discount and deferred financing costs.
²: See "Management's Discussion and Analysis of Financial Condition and Results of Operations—Factors and trends affecting our operating results—Key Business and Performance Metrics" for the definition of comparable location sales.
³: Adjusted EBITDA and EBITDA margin are non-GAAP financial measures and have been presented in this prospectus as supplemental measures of financial performance that are not required by, or presented in accordance with, GAAP. We calculate EBITDA as net income (loss) plus interest expense, income tax expense (benefit), depreciation and amortization. We calculate Adjusted EBITDA as EBITDA as further adjusted to add certain items such as stock-based compensation expense, loss on early extinguishment of debt, related party management fees and certain non-cash and non-recurring items. Adjusted EBITDA margin represents Adjusted EBITDA as a percentage of net sales. See "Prospectus Summary—Summary Historical Consolidated Financial and Other Data" for further discussion on Adjusted EBITDA and Adjusted EBITDA margin.

The following table reconciles net income (loss) to Adjusted EBITDA for the periods presented:

	Successor						Predecessor

				Period from August 20, 2015 through December 31, 2015			Period from January 1, 2015 through August 19, 2015
										Year ended
	Year ended December 31, 2016									December 31, 2014			December 31, 2013			December 31, 2012
				(In thousands)
Net income (loss)		$(47,706	)		$(58,142	)		$(139,911	)		$15,039			$27,172			$ (431	)
Interest expense		80,569			25,538			27,353			13,575			3,186			5,641
Depreciation and amortization^a		114,027			50,194			31,847			19,418			7,340			5,572
Income tax expense		343			614			281			121			163			18

EBITDA		$147,233			$18,204			$(80,430	)		$48,153			$37,861			$10,800
IPO related expenses^b		14,170			254			—			—			—			—
Acquisition expenses^c		4,774			21,583			8,207			7,193			433			120
Equity-based compensation and profit interests^d		6,116			14,817			110,192			—			—			—
Management fees^e		5,605			1,943			2,938			2,732			1,898			1,399
Goodwill impairment charge^f		2,304			—			—			—			—			—
Loss on early extinguishment of debt^g		—			—			28,445			—			—			—
Change in LIFO reserve^h		(38	)		—			(2,561	)		1,659			593			1,607
Consultant feesⁱ		7,149			337			—			—			—			—
Other expenses		543			1,534			337			1,230			(14	)		14

Adjusted EBITDA		$187,856			$ 58,672			$ 67,128			$60,967			$40,771			$13,940



Adjusted EBITDA margin		7.1	%		7.1	%		6.0	%		5.7	%		5.5	%		2.7	%

^a: Includes depreciation and amortization from our consolidated statement of operations, acquired inventory step-up charges from our consolidated statement of cash flows and depreciation and amortization included within cost of sales from our consolidated statement of operations.
^b: Represents selling, general and administrative expenses incurred in connection with preparing the Company to transition to operating as a public company.

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^c: Represents permissible adjustments under the credit agreements governing our indebtedness for selling, general and administrative expenses related to acquisitions, including fees to financial advisors, accountants, attorneys and other professionals, as well as changes in contingent consideration.
^d: Represents non-cash charges related to equity-based awards.
^e: During the Successor periods, represents management fees paid to Kelso and our other pre-IPO owners under the Advisory Services Agreement as well as fees paid under the Consulting Agreement. In connection with this offering, we will terminate the management fee under the Advisory Services Agreement and terminate the Consulting Agreement. See "Certain Relationships and Related Party Transactions." During the Predecessor periods, represents management fees paid to our pre-Acquisition owners under arrangements that were terminated in connection with the Acquisition.
^f: Represents non-cash charges related to the impairment of goodwill of one of the Company's reporting units.
^g: Represents a non-recurring loss on the early extinguishment of debt in connection with the Acquisition.
^h: Represents non-cash charges recorded in cost of sales to recognize cost on a LIFO basis.
ⁱ: Represents consulting services in connection with operational efficiency initiatives. These costs are not expected to be incurred on an ongoing basis.

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UNAUDITED PRO FORMA COMBINED FINANCIAL STATEMENTS

The unaudited pro forma combined balance sheet as of December 31, 2016 and unaudited pro forma statement of operations for the year ended December 31, 2016 present our combined balance sheet and statement of operations after giving effect to (i) the reorganization transactions described under "The Reorganization Transactions," (ii) the creation of certain tax assets in connection with this offering and the Reorganization Transactions, (iii) the creation of related liabilities in connection with entering into the Tax Receivable Agreements and (iv) this offering and the use of proceeds from this offering, as if each had been completed as of December 31, 2016 with respect to the unaudited pro forma consolidated balance sheet and as of January 1, 2016 with respect to the unaudited pro forma combined statement of operations.

Adjustments to the unaudited pro forma consolidated balance sheet as of December 31, 2016 give effect to the transactions referred to above as if they had been consummated on December 31, 2016 and includes adjustments that are directly attributable to the transactions and are factually supportable. The unaudited pro forma statement of operations for the year ended December 31, 2016 gives effect to the transactions referred to above as if they had been consummated on January 1, 2016 and includes adjustments that give effect to events that are directly attributable to the transactions, are expected to have a continuing impact, and are factually supportable.

Our historical financial information has been derived from our consolidated financial statements and accompanying notes included elsewhere in this prospectus.

For purposes of the unaudited pro forma financial information, we have assumed that shares of Class A common stock will be issued by us at a price per share equal to the midpoint of the estimated offering price range set forth on the cover page of this prospectus, and as a result, immediately following the completion of this offering, the ownership percentage represented by LLC Interests not held by us will be %, and the net loss attributable to LLC Interests not held by us will accordingly represent % of our net loss. If the underwriters' option to purchase additional shares is exercised in full, the ownership percentage represented by LLC Interests not held by us will be %, and the net loss attributable to LLC Interests not held by us will accordingly represent % of our net loss.

The unaudited pro forma combined financial statements have been presented for informational purposes only. The unaudited pro forma financial information does not purport to represent our consolidated results of operations or consolidated balance sheet that would actually have occurred had the transactions referred to above been consummated on the dates assumed or to project our consolidated statement of operations or consolidated balance sheet for any future date or period. The pro forma adjustments are preliminary and are based upon the best available information and certain assumptions that management believes are reasonable under the circumstances and which are described in the accompanying notes to the unaudited pro forma combined financial information. The presentation of the unaudited pro forma consolidated financial information is prepared in conformity with Article 11 of Regulation S-X.

The unaudited pro forma combined financial statements should be read in conjunction with the accompanying notes to the unaudited pro forma combined financial statements. In addition, the unaudited pro forma combined financial statements are based on and should be read in conjunction with "The Reorganization Transactions," "Prospectus Summary—The Offering," "Capitalization," "Selected Consolidated Financial Data," and "Management's Discussion and Analysis of Financial Condition and Results of Operations".

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Unaudited Pro Forma Statement of Operations
For the Year Ended December 31, 2016

(Dollars in thousands, except per share amounts)	Historical LBM Midco, LLC

Net sales	$	2,664,108
Cost of sales		1,918,720

Gross profit		745,388
Selling, general, and administrative expenses		597,052
Depreciation and amortization		109,525

Income (loss) from operations		38,811

Interest expense		80,569			³
Other expense		5,605

Total other expenses, net		86,174
Income tax expense		343		¹

Net income (loss)		(47,706	)
Net income attributable to redeemable noncontrolling interests		—		²

Net income (loss) attributable to the Company	$	(47,706	)
Net income (loss) per class A common share⁴
Basic
Diluted
Weighted average class A common stock outstanding⁴
Basic
Diluted

Notes to Unaudited pro forma combined statement of operations—year ended December 31, 2016

¹: Following the Reorganization Transactions, we will be subject to U.S. federal income taxes, in addition to state, local and foreign taxes. As a result, the pro forma combined statement of operations reflects an adjustment to our provision for corporate income taxes to reflect an effective tax rate of %, which includes a provision for U.S. federal income taxes and assumes the highest statutory rates apportioned to each state, local and foreign jurisdiction.
²: Immediately following this offering, Holdings will become the sole managing member of US LBM LLC, and as a result, Holdings will initially own approximately % of the economic interest in US LBM LLC, but will have 100% of the voting power and control the management of US LBM LLC. Immediately following this offering, the ownership percentage held by the noncontrolling interest will be approximately %. Net loss attributable to the noncontrolling interest will represent approximately % of net loss. These amounts have been determined based on an assumption that the underwriters' option to purchase additional shares is not exercised. If the underwriters' option to purchase additional shares is exercised in full, the ownership percentage held by the noncontrolling interest would decrease to %.
³: Reflects reduction in interest expense of $ as a result of the repayment of a portion of the long-term debt as described in "Use of Proceeds," as if such repayment occurred on January 1, 2016. The long-term debt currently bears interest at a rate of % per annum.
⁴: The basic and diluted pro forma net loss per share of Class A common stock represents net loss attributable to Holdings divided by weighted average outstanding shares of Class A common stock assumed to be sold after giving effect to the Reorganization Transactions and this offering. The shares of Class B common stock do not share in our earnings and are therefore not included in the weighted-average shares outstanding or net loss per share.
: The pro forma diluted net income per share calculation includes the basic weighted average shares of Class A common stock outstanding plus the dilutive impact of outstanding shares of Class A common stock issued upon substitution of shares of Class B common stock outstanding calculated using the treasury stock method.

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Unaudited Pro Forma Combined Balance Sheet
As of December 31, 2016

(Dollars in thousands)	Historical LBM Midco, LLC

ASSETS
Current assets
Cash and cash equivalents	$	3,455			⁵
Accounts receivable, net of allowance for bad debts		362,270
Inventories, net		240,385
Other current assets		49,062	¹		⁶

Total current assets		655,172
Property and equipment, net		208,907
Deferred financing costs, net		2,943
Goodwill, net		648,363
Intangible assets, net		314,331
Other assets		4,829

Total assets	$	1,834,545



LIABILITIES AND MEMBERS' EQUITY
Current liabilities
Accounts payable	$	141,115
Accrued payroll and related expenses		35,297
Sales tax payable		16,991
Customer rebates and deposits		10,681
Other accrued expenses		29,374
Current portion of long-term debt, net		13,254			⁵

Total current liabilities		246,712
Line of credit		133,763
Long-term debt, less current portion, net		967,050			⁵
Other long-term liabilities		13,775
Payable to related parties pursuant to tax receivable agreements		—		²

Total liabilities		1,361,300

Commitments and contingencies (Note 11)
Members'/Shareholders' Equity
Class A common stock, $0.01 par value per share		—		³	⁵
Class B common stock, $0.0001 par value per share		—		³
Additional paid-in capital		—		^2,3	^5,6
Members' equity/shareholders' equity		473,245		³

Noncontrolling interests		—		⁴
Total members' equity		473,245

Total liabilities and members' equity	$	1,834,545

Notes to Unaudited pro forma combined balance sheet as of December 31, 2016

¹

Following the Reorganization Transactions, we will be subject to U.S. federal income taxes, in addition to state, local and foreign taxes. As a result, the pro forma balance sheet reflects an adjustment to our deferred taxes assuming the highest statutory rates apportioned to each state, local and foreign jurisdiction.

²

Reflects adjustments to give effect to the Tax Receivable Agreements described in "Certain Relationships and Related Party Transactions—Related party agreements entered into in connection with this offering and the Reorganization Transactions—Tax Receivable Agreements" and "The Reorganization Transactions," based on the following assumptions:

•: we will record an increase of $ million in deferred tax assets for the estimated income tax effects of the increase in the tax basis of the assets owned by Holdings due to the exchange of LLC Interests by Continuing LLC Owner based on enacted federal, state and local tax rates at the date of the Reorganization Transactions. To the extent we estimate that we will not realize the full benefit represented by the deferred tax asset, based on an analysis of expected future earnings, we will reduce the deferred tax asset with a valuation allowance; and
•: we will record approximately 85% of the estimated realizable tax benefit as an increase of $ million payable to related parties pursuant to the Tax Receivable Agreements and the remaining 15% of the estimated realizable tax benefit, or $ million, as an increase to members' interest.

³

Reflects the reclassification of US LBM LLC's historic members' equity to Class A common stock, Class B common stock and additional paid-in capital as a result of the Reorganization Transactions.

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⁴: As described in "The Reorganization Transactions," Holdings will become the sole managing member of US LBM LLC and will report a noncontrolling interest related to the LLC Interests held by Continuing LLC Owner.
⁵: We estimate that the net proceeds to Holdings from this offering will be approximately $ (or $ if the underwriters exercise in full their option to purchase additional shares of Class A common stock), based on an assumed initial public offering price of $ per share, which is the midpoint of the estimated offering price range set forth on the cover page of this prospectus, after deducting assumed underwriting discounts and commissions and estimated offering expenses. We intend to cause US LBM LLC to repay a portion of the long-term debt. Any remaining proceeds will be used for general corporate purposes. See "Use of Proceeds."
⁶: We are deferring the direct costs associated with this offering. These costs primarily represent legal, accounting and other direct costs and are recorded in other current assets in our consolidated balance sheet. Upon completion of this offering, these deferred costs will be charged against the proceeds from this offering as a reduction of additional paid-in capital.

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MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS

The following information should be read in conjunction with "Selected Consolidated Financial Data," "Prospectus Summary—Summary Historical Consolidated Financial and Other Data" and our consolidated financial statements and related notes included elsewhere in this prospectus. The following discussion may contain forward-looking statements that reflect our plans, estimates and beliefs. Our actual results could differ materially from those discussed in these forward-looking statements. Factors that could cause or contribute to these differences include those factors discussed below and elsewhere in this prospectus, particularly in "Risk Factors" and "Special Note Regarding Forward-Looking Statements."

Overview

We are one of the leading and fastest growing suppliers of specialty building materials in the United States. We believe our differentiated operating model, technology capabilities and broad offering of specialty products enable us to distinguish ourselves from both local and national competitors within our industry. We serve as a critical link in the building materials supply chain, supplying more than 60,000 SKUs to our highly diverse customer base of more than 30,000 custom homebuilders and specialty contractors. Our comprehensive portfolio of building materials includes specialty products such as windows, doors, millwork, roofing, siding, cabinetry and wallboard, as well as wood products, with specialty products comprising approximately 75% of the overall mix in 2016. We believe that our business units hold leading market positions in many of the local markets we serve. We have designed our operating model to leverage our scale and national platform, while maintaining local management expertise and relationships, to outperform our competition.

We have a proven strategy of driving growth through a combination of share gains in our existing markets and expanding into new markets by selectively opening greenfield locations and executing strategic acquisitions. By utilizing this strategy, we have rapidly grown our business from 16 locations in 2009 to 240 locations serving 29 states. We expect to drive above market growth by leveraging our local go-to-market strategy, management driven growth initiatives and customer focused technology platform. Our strategy for opening new greenfield locations is to further penetrate markets that are adjacent to our existing operations. Typically, we have pre-existing customer relationships in these markets but need a new location to capitalize fully on those relationships and to facilitate further expansion of our customer base. In addition, we will continue to selectively pursue strategic acquisitions and, due to the large, highly fragmented nature of our industry, we believe we have a robust acquisition pipeline that can continue to supplement our organic growth. Our acquisition strategy is to partner with independent distributors that already hold leading market positions in the local markets they serve. As a result of our scale, pricing and procurement programs, technology infrastructure and ability to improve operations through implementing best practices, we believe we can achieve cost saving synergies from our acquisitions. In addition, our diverse product offering typically provides cross-selling opportunities. We believe that our track record of acquiring over 40 businesses since our founding provides a competitive advantage in the evaluation and integration of future acquisitions.

We continue to optimize our operating platform and improve our margins by executing on a range of operational initiatives and by leveraging our overall scale and market leadership. For example, we have implemented initiatives focused on enhancing our supply chain capabilities, including strategies to improve our pricing and procurement. We also intend to drive operational excellence and performance by capitalizing on our leading technology platform and through our focus on continuous improvement. Our operating initiatives are in the early stages of implementation, and we believe that as we execute our strategy we will be able to enhance our overall growth and profitability.

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Kelso Acquisition and Basis of Presentation

On August 20, 2015, LBM Midco, LLC, or the "Successor," acquired, through its wholly-owned subsidiary, LBM Borrower, LLC, all of the membership interests of US LBM Holdings, LLC, or the "Predecessor." The Successor is majority owned by certain affiliates of Kelso. We refer to this as the "Acquisition."

As a result of the Acquisition, the financial information for the periods subsequent to August 20, 2015, represent the consolidated financial statements of the Successor. Due to the change in the basis of accounting resulting from the application of the purchase method of accounting, the Predecessor's consolidated financial statements and the Successor's consolidated financial statements are not necessarily comparable. The new basis of accounting primarily impacted the values of our inventory, long-lived and indefinite-lived intangible assets, and resulted in increased depreciation and amortization expenses. The impact of the Acquisition also resulted in increased interest expense due to the amount of new debt borrowed to finance the acquisition and increases in selling, general and administrative expenses related to the one-time vesting of share based awards.

References herein to "full year 2015" represent the sum of the results of the period from January 1, 2015 to August 19, 2015 (Predecessor) and the period from August 20, 2015 to December 31, 2015 (Successor). Please note that our discussion of certain financial information for full year 2015, specifically net sales and Adjusted EBITDA, includes data from the Predecessor and Successor periods on a combined basis. The change in basis resulting from the Acquisition did not impact such financial information and, although this presentation does not comply with GAAP, we believe it provides a meaningful method of comparison to the other periods presented. The data is being presented for analytical purposes only. Combined full year 2015 operating results presented herein (1) have not been prepared on a pro forma basis as if the Acquisition occurred on the first day of the period, (2) may not reflect the actual results we would have achieved absent the Acquisition and (3) may not be predictive of our future results of operations.

Factors and trends affecting our operating results

Construction Markets and General Economic Conditions

Economic changes both nationally and locally in our markets impact our financial performance. The building products supply industry and our operations are highly dependent upon residential new construction, R&R activity and commercial new construction. We believe all of our end markets are in an extended period of expansion following the economic and industry downturn between 2007 and 2011.

Residential new construction activity is driven by a number of factors, including the overall economic outlook, consumer confidence, employment rates, income growth, home prices, availability of mortgage financing, and interest rates. Single family starts, which account for approximately 48% of our net sales, remain 25% below their historical average of 1.04 million annual starts since 1970. Industry analysts expect that, over time, single family housing starts will return to their historical average, which we believe will result in continued growth opportunities.

The R&R market is comprised of both residential and commercial R&R. The primary drivers of residential R&R spending include changes in existing home prices, existing home sales, and the average age of the housing stock, as well as consumer confidence and interest rate levels. Commercial R&R spending is primarily driven by commercial real estate prices and rental rates, office vacancy rates, government spending, and interest rate levels. Commercial R&R spending is also driven by commercial lease expirations and renewals, as well as tenant turnover. Such events often result in repair, reconfiguration and/or upgrading of existing commercial space. While R&R activity is typically more

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stable than new construction activity, we believe the prolonged period of under-investment during the prior economic downturn will result in above-average growth for the next several years.

New commercial construction demand drivers include the overall economic outlook, government spending, vacancy rates, employment trends, interest rates and the availability of financing. New commercial construction square footage put in place remains 25% below the historical market average of 1.3 billion square feet annually since 1970. We believe this represents a significant opportunity for growth as activity continues to improve.

Seasonality and Price Fluctuations

In a typical year, our operating results are impacted by seasonality. Our operating results in the first quarter of the year have historically been lower due to unfavorable weather and shorter daylight conditions. Seasonal variations in operating results may be impacted by inclement weather conditions, such as cold or wet weather, which can delay construction projects.

Price fluctuations in the products that we distribute also impact our operating results. We believe that, as a result of our national scale and long-standing relationships with many of our suppliers, we will continue to have access to an adequate supply of our products at favorable prices to keep up with growing demand as construction markets continue to recover. Several of the products we distribute, such as lumber, plywood and particleboard, are commodities that have generally been subject to market price fluctuations, the sales volume of which coincide with the conditions within the U.S. residential new construction market. Periods of declining prices may result in declines in sales and profitability, while increasing prices provide the opportunity for higher sales and increased profitability. In general, we have historically been successful in passing on price increases from our vendors to our customers in a timely manner, although there is no assurance that we can successfully do so in the future.

Acquisitions

In addition to our organic growth strategy, we continue to grow our business through acquisitions in an effort to better service our existing customers and to attract new customers. These acquisitions have allowed us to further broaden our product breadth, particularly in several specialty product categories, and have extended our geographic reach and leadership positions in the various local markets we serve. Since the beginning of 2013, we have invested more than $900 million in acquisitions. The following is a summary of our acquisition activity since 2013:

•: In 2013 we acquired two businesses, Shelly Enterprises, Inc. and Musselman Lumber, Inc., which significantly expanded our geographic footprint in Pennsylvania.
•: In 2014 we acquired twelve businesses, including Desert Lumber LLC and Wallboard Supply Company, LLC, which enhanced our position in Illinois and extended our geographic reach into Florida, Nevada, Utah, Michigan, Kentucky, Indiana, New Hampshire, Maine, Massachusetts, Vermont, and Iowa. These businesses expanded our specialty product offering, including in the wallboard & metal studs and roofing & siding product categories.
•: In 2015 we acquired eighteen businesses, including Lampert Yards, Inc. and Direct Cabinet Sales, Inc., which enhanced our position in Connecticut, New Jersey, Florida, Illinois, Nevada, Kentucky, Michigan, Wisconsin, Iowa, and Vermont and extended our geographic reach into Minnesota, Georgia, Alabama, South Carolina, South Dakota, North Dakota, Texas, and California. These businesses expanded our specialty product offering, including in the wallboard & metal studs, cabinetry and windows, doors & millwork product categories.
•: In 2016 we acquired six businesses, including Darby Doors, Inc. and Raymond Building Supply, LLC, which enhanced our position in Florida, Michigan, Maryland, Pennsylvania and

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Alabama. These businesses expanded our specialty product offering, including in the cabinetry and windows, doors & millwork product categories.

•: In 2017 we acquired the Ridout Companies, which extended our geographic reach into Arkansas and Missouri. This business expanded our specialty product offering, including in the wallboard & metal studs, roofing & siding, cabinetry, and windows, doors & millwork product categories. As this acquisition closed in 2017, the results of operations of the Ridout Companies are not included in our results of operations presented herein.

We expect the execution of synergistic acquisitions to continue to be an integral part of our growth strategy, and we intend to continue expanding our product line, geographic reach, market share and operational capabilities through future acquisitions.

Strategic Initiatives

We are executing several strategic initiatives to capture additional market share within our existing markets, drive revenue growth and enhance our profitability. These strategic initiatives include our pricing and procurement programs, PLM initiative, our US1 training program, and further development of our leading technology platform.

•: We have developed a robust procurement platform, which balances local market needs and decisions with the benefits of our national scale. We have processes and tools in place that enable us to effectively coordinate category spend and vendor programs across our platform, enhance our sourcing position with key suppliers, and optimize our purchasing to realize cost savings.
•: Our pricing framework is supported by an analytics-driven pricing model that is customized for each business unit. Our system enables us to drive market appropriate prices and to tailor pricing for each account based on customer profile and purchasing history. We continuously monitor and improve our system to further optimize our pricing capabilities and drive higher margins.
•: Our PLM initiative consists of product-dedicated managers focused on driving sales of specialty products. This initiative, launched in 2013, has delivered significant benefits across our roofing, cabinetry, decking, siding, and fasteners product lines, and we plan to implement the initiative across additional business units and product categories to drive profitable growth.
•: Our US1 "Lean" and "Six Sigma" program is designed to educate our associates on the strategies of lean operating practices. After participating in the program, our associates are challenged to implement the practices learned in the program within their respective business units to promote operational efficiency and increase productivity.
•: We also continue to remain focused on driving improved financial performance by leveraging our leading technology platform. Our integrated systems facilitate the collection of real-time tracking data which enable us to strive for improved performance metrics. In addition, we believe our customized mobile application makes us easier to do business with and enhances customer loyalty.

Public Company Costs

As a result of this initial public offering, we will incur additional legal, accounting and other expenses that we did not previously incur, including costs associated with SEC reporting and corporate governance requirements. These requirements include compliance with the Sarbanes-Oxley Act and the listing standards of . Our financial statements following this offering will reflect the impact of these expenses.

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Post-Offering Taxation and Expenses

After consummation of this offering, we will become subject to U.S. federal, state and local income taxes with respect to our allocable share of any taxable income of US LBM LLC and will be taxed at the prevailing corporate tax rates. In addition to tax expenses, we also will incur expenses related to our operations, plus payments under the Tax Receivable Agreements, which we expect to be significant. We intend to cause US LBM LLC to make distributions in an amount sufficient to allow us to pay our tax obligations and operating expenses, including distributions to fund any ordinary course payments due under the Tax Receivable Agreements. See "Certain Relationships and Related Party Transactions—Related party agreements entered into in connection with this offering and the Reorganization Transactions—Tax Receivable Agreements."

Key Business and Performance Metrics

We focus on a variety of indicators and key operating and financial metrics to monitor the financial condition and performance of our business. These metrics include:

Net sales. We generate net sales primarily through the sale of specialty building materials primarily to custom homebuilders and specialty contractors. Our net sales include billings for delivery services and are presented net of returns, customer discounts, contractor rebates and sales tax.

Comparable location sales. Refers to organic sales growth and includes only sales transacted within Company-operated locations open for 13 months or more. Sales are excluded from comparable location sales for any portion of the period presented that corresponds to the pre-acquisition period in the comparable prior period. Sales for a relocated location or the consolidation of locations are included in comparable location sales if the relocation or consolidation occurs within the same geographic market. Sales for closed sites are removed from comparable site sales for those periods that are not comparable to the prior year.

Gross margin. We believe that gross margin is useful for evaluating the Company's strategic efforts associated with expanding our higher-margin specialty product offering along with our pricing and procurement initiatives. We define gross margin as gross profit as a percentage of net sales. We define gross profit as net sales less cost of goods sold. Our cost of goods sold includes all inventory costs, such as purchase price from suppliers, net of vendor rebates, inbound freight and duties, direct manufacturing labor costs and depreciation. Inventories are valued using the LIFO method of accounting.

Selling, general and administrative expenses. Our Selling, general and administrative expenses are primarily comprised of personnel expenses (salaries, wages, commissions, employee benefits, payroll taxes, stock compensation and bonuses), rent, fuel, vehicle maintenance, insurance, utilities, repair and maintenance, professional fees, bank and credit card fees, travel and entertainment, real estate and personal property taxes.

Adjusted EBITDA and Adjusted EBITDA margin. Management believes that Adjusted EBITDA is useful for evaluating our operating performance and efficiency of our business. EBITDA represents our net income (loss) plus the sum of interest expense, net of interest income including amortization of debt discount and issuance costs, income tax expense (benefit) and depreciation and amortization. Adjusted EBITDA represents EBITDA as further adjusted for items such as loss on the early extinguishment of debt, equity-based compensation expense, IPO-related expenses, acquisition expenses, management fees, goodwill impairment charge, change in LIFO reserve, and other non-cash and non-recurring items. Adjusted EBITDA margin represents Adjusted EBITDA as a percentage of net sales. See "Prospectus Summary—Summary Historical Consolidated Financial and Other Data" for how we define and calculate Adjusted EBITDA and Adjusted EBITDA margin, reconciliations thereof to net income (loss) and descriptions on why we believe these measures are important.

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Net working capital. Net working capital is an important measurement that we use in determining the efficiency of our operations and our ability to readily convert assets into cash. Net working capital represents current assets minus current liabilities. The material components of our net working capital include accounts receivable, inventory and accounts payable. The level of our working capital typically increases in the summer and fall seasons due to higher sales during the peak of residential and commercial construction activity. In addition, fluctuations in product input costs may result in changes to our reported inventories, accounts receivable and accounts payable, even when our sales volumes and rate of turnover of these working capital components remain relatively constant. Comparing our net working capital to that of other companies in our industry may be difficult, as other companies may calculate net working capital differently than we do.

Our Products

The following is a summary of our net sales by product category for the fiscal year ended December 31, 2016, the full year ended December 31, 2015 and the fiscal year ended December 31, 2014:

(in thousands)	Year ended December 31, 2016 (Successor)				Year ended December 31, 2015¹				Year ended December 31, 2014 (Predecessor)

Wood products	$	656,454	24.6	%	$	509,311	26.1	%	$	329,961	31.0	%
Windows, doors & millwork		500,407	18.8	%		352,840	18.1	%		226,722	21.3	%
Wallboard & metal studs		446,003	16.7	%		282,276	14.5	%		62,073	5.8	%
Roofing & siding		285,145	10.7	%		233,077	12.0	%		160,328	15.1	%
Engineered components		232,134	8.7	%		196,210	10.1	%		94,601	8.9	%
Cabinetry		193,316	7.3	%		113,728	5.8	%		47,282	4.4	%
Hardlines & other products/services		350,649	13.2	%		262,474	13.5	%		143,795	13.5	%

Total	$	2,664,108			$	1,949,916			$	1,064,762

¹: Represents the combined results of the Predecessor and the Successor periods for the full year ended December 31, 2015. This combination was performed by mathematical addition and is not a presentation made in accordance with GAAP. However, we believe it provides a meaningful method of comparison of product category performance for the full year ended December 31, 2015 to the fiscal years ended December 31, 2014 and 2016.

Results of Operations

The following tables and discussion should be read in conjunction with the information contained in our historical consolidated financial statements and the notes thereto included elsewhere in this prospectus. However, our historical Predecessor results of operations set forth below and elsewhere in this prospectus may not necessarily reflect what would have occurred if the Acquisition had occurred prior to the period presented. See "—Kelso Acquisition and Basis of Presentation" above.

Fiscal Year ended December 31, 2016 compared to the periods from August 20, 2015 to December 31, 2015 (Successor) and January 1, 2015 to August 19, 2015 (Predecessor)

The discussion below addresses the 2016 fiscal year and the 2015 Predecessor and Successor periods, which, when compared to fiscal 2016 results, at times, are combined to represent the full year 2015. See "—Kelso Acquisition and Basis of Presentation" for a full description of the impact of the Acquisition on the comparability of the respective periods.

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The following table summarizes key components of the Company's results of operations for the fiscal year ended December 31, 2016 and the periods from August 20, 2015 to December 31, 2015 and January 1, 2015 to August 19, 2015:

	(Successor)						(Predecessor)

(in thousands)	Year ended December 31, 2016			Period from August 20, 2015 through December 31, 2015			Period from January 1, 2015 through August 19, 2015
Net sales	$	2,664,108		$	823,274		$	1,126,642
Cost of sales		1,918,720			613,984			824,474

Gross profit		745,388			209,290			302,168
Selling, general, and administrative expenses		597,052			205,232			357,033
Depreciation and amortization		109,525			34,105			26,029

Income (loss) from operations		38,811			(30,047	)		(80,894	)

Interest expense		80,569			25,538			27,353
Loss on early extinguishment of debt		—			—			28,445
Other expense		5,605			1,943			2,938

Total other expenses, net		86,174			27,481			58,736
Income tax expense		343			614			281

Net loss		(47,706	)		(58,142	)		(139,911	)
Net income attributable to redeemable noncontrolling interests		—			—			315

Net loss attributable to the Company	$	(47,706	)	$	(58,142	)	$	(140,226	)



Non-GAAP and Other Financial Measures:
Gross margin		28.0	%		25.4	%		26.8	%
Adjusted EBITDA¹	$	187,856		$	58,672		$	67,128
Adjusted EBITDA margin¹		7.1	%		7.1	%		6.0	%

¹: Adjusted EBITDA and Adjusted EBITDA margin are non-GAAP financial measures. See "Prospectus Summary—Summary Historical Consolidated Financial and Other Data" for how we define and calculate Adjusted EBITDA and Adjusted EBITDA margin, reconciliations thereof to net income (loss) and a description of why we believe these measures are important.

Net sales

Net sales of $2,664.1 million for the fiscal year ended December 31, 2016 increased $714.2 million, or 36.6%, compared to $1,949.9 million for the full year 2015. Comparable location sales of $2,090.5 million for fiscal year 2016 increased $159.2 million, or 8.2%, compared to $1,931.3 million for the full year 2015, with particular strong growth in the South & West and Midwest regions. The increase in comparable location sales was primarily driven by strong growth in our wallboard & metal studs, cabinetry, hardlines, and engineered components specialty product categories.

During the 2016 fiscal year, we completed six acquisitions, totaling 11 locations, contributing $146.4 million in net sales in fiscal 2016. Additionally, net sales benefitted from the opening of seven greenfield locations during 2016, contributing $11.0 million in net sales to fiscal year 2016. The remaining increase in net sales was primarily the result of full year operations in fiscal year 2016 for companies acquired in 2015.

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Gross profit and gross margin

Gross profit of $745.4 million for the fiscal year ended December 31, 2016 increased $233.9 million, or 45.7%, compared to $209.3 million for the Successor period and $302.2 million for the Predecessor period driven by higher net sales and gross margin. Gross margin increased 175 basis points to 28.0% for fiscal 2016 primarily as a result of higher product category margins driven by our continued execution of our pricing and procurement initiatives, as well as improved product mix driven by our sales of specialty products. Gross margin in the Successor period was negatively impacted by inventory step-up charges associated with the Acquisition. The inventory step-up charges in the Successor period reduced gross margin by 178 basis points for the Successor period. For the full year 2015 these step-up charges reduced gross margin by 75 basis points.

Selling, general and administrative expenses

Selling, general and administrative expenses of $597.1 million for the fiscal year ended December 31, 2016 increased $34.9 million, or 6.2%, compared to $205.2 million and $357.0 million for the Successor and Predecessor periods, respectively. The increase was primarily driven by higher operating expenses to support the growth in net sales, non-recurring professional services and legal fees of $13.4 million, and an additional investment of $8.3 million in corporate support functions, partially offset by share-based awards of $110.2 million in the Predecessor period and transaction fees and other acquisition-related expenses associated with the Acquisition of $11.5 million in the Successor period and $6.8 million in the Predecessor period. Selling, general and administrative expenses as percent of sales for fiscal year 2016 decreased to 22.4%, compared to 24.9% for the Successor period and 31.7% for the Predecessor period. The decrease was primarily driven by the reduction in share-based awards and transaction fees and other acquisition-related expenses associated with the Acquisition.

Depreciation and amortization expenses

Depreciation and amortization expenses of $109.5 million for the fiscal year ended December 31, 2016 compared to $34.1 million for the Successor period and $26.0 million for the Predecessor period. The increase was primarily the result of acquisitions completed during fiscal year 2016 and the full year 2015 (including the Acquisition).

Interest expense

Interest expense was $80.6 million for the fiscal year ended December 31, 2016 compared to $25.5 million for the Successor period and $27.4 million for the Predecessor period. The increase was primarily the result of new debt borrowed to finance the Acquisition and acquisitions completed during fiscal year 2016 and the full year 2015.

Loss on early extinguishment of debt

In the Predecessor period, a $28.4 million charge related to early extinguishment of debt in connection with the Acquisition was recognized.

Other expense

Other expense of $5.6 million for the fiscal year ended December 31, 2016 compared to $1.9 million for the Successor period and $2.9 million for the Predecessor period. The increase was a result of the replacement of the Predecessor period management fee agreement from a percentage of net sales to a fixed fee beginning in the Successor period.

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Income tax expense

Income tax expense was immaterial for all reported periods as the Company is organized and taxed as a limited liability corporation and taxed as a partnership for state and federal income tax purposes. See "Critical Accounting Policies and Estimates—Income Taxes".

Net income (loss)

Net loss was $47.7 million for the fiscal year ended December 31, 2016 compared to net loss of $58.1 million for the Successor period and $139.9 million for the Predecessor period. Net loss for each period was affected by the factors described above.

Adjusted EBITDA & Adjusted EBITDA margin

Adjusted EBITDA of $187.9 million for the fiscal year ended December 31, 2016 increased $62.1 million, or 49.4%, compared to $125.8 million for the full year 2015. Adjusted EBITDA margin for fiscal year 2016 increased 60 basis points to 7.1% primarily driven by gross margin expansion as a result of higher product category margins and improved product mix, partially offset by investment in corporate support functions. See "—Liquidity and Capital Resources—Non-GAAP Financial Measures" for a reconciliation of Adjusted EBITDA to net income (loss), the most directly comparable financial measure calculated in accordance with GAAP.

Periods from August 20, 2015 to December 31, 2015 (Successor) and January 1, 2015 to August 19, 2015 (Predecessor) compared to the fiscal year ended December 31, 2014

The discussion below addresses the 2015 Predecessor and Successor periods and the 2014 fiscal year. The 2015 Predecessor and Successor periods when compared to fiscal year 2014, at times, are combined to represent the full year 2015. See "—Kelso Acquisition and Basis of Presentation" for a full description of the impact of the Acquisition on the comparability of the respective periods.

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The following table summarizes key components of our operating results for the periods from August 20, 2015 to December 31, 2015 (Successor), January 1, 2015 to August 19, 2015 (Predecessor) and the year ended December 31, 2014:

	(Successor)			(Predecessor)

(in thousands)	Period from August 20, 2015 through December 31, 2015			Period from January 1, 2015 through August 19, 2015			Year ended December 31, 2014
Net sales	$	823,274		$	1,126,642		$	1,064,762
Cost of sales		613,984			824,474			792,031

Gross profit		209,290			302,168			272,731
Selling, general, and administrative expenses		205,232			357,033			225,231
Depreciation and amortization		34,105			26,029			16,033

Income (loss) from operations		(30,047	)		(80,894	)		31,467

Interest expense		25,538			27,353			13,575
Loss on early extinguishment of debt		—			28,445			—
Other expense		1,943			2,938			2,732

Total other expenses, net		27,481			58,736			16,307
Income tax expense		614			281			121

Net income (loss)		(58,142	)		(139,911	)		15,039
Net income attributable to redeemable noncontrolling interests		—			315			—

Net income (loss) attributable to the Company	$	(58,142	)	$	(140,226	)	$	15,039



Non-GAAP and Other Financial Measures:
Gross margin		25.4	%		26.8	%		25.6	%
Adjusted EBITDA¹	$	58,672		$	67,128		$	60,967
Adjusted EBITDA margin¹		7.1	%		6.0	%		5.7	%

¹: Adjusted EBITDA and Adjusted EBITDA margin are non-GAAP financial measures. See "Prospectus Summary—Summary Financial and Other Data" for how we define and calculate Adjusted EBITDA and Adjusted EBITDA margin, reconciliations thereof to net income (loss) and a description of why we believe these measures are important.

Net sales

Net sales of $1,949.9 million for the full year 2015 increased $885.1 million, or 83.1%, compared to $1,064.8 million for the fiscal year ended December 31, 2014. Comparable location sales of $1,112.7 million for the full year 2015 increased $73.5 million, or 7.1%, compared to $1,039.2 million for fiscal year 2014, with particular strong growth in the Midwest region. The increase in comparable location sales was driven by strong growth in our wallboard & metal studs, cabinetry, hardlines, and engineered components specialty product categories.

During the full year 2015, we completed 18 acquisitions, totaling 120 locations, contributing $406.0 million to net sales in the full year 2015. Additionally, net sales benefitted from the opening of three greenfield locations during full year 2015, contributing $25.7 million in net sales to the full year 2015. The remaining increase in net sales was the result of full year operations in full year 2015 for companies acquired in 2014.

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Gross profit and gross margin

Gross profit of $209.3 million for the Successor period and $302.2 million for the Predecessor increased $238.8 million, or 87.5%, compared to $272.7 million for the fiscal year ended December 31, 2014 driven by higher net sales and gross margin. Gross margin increased 60 basis points as a result of higher product category gross margins driven by the successful execution of our pricing initiatives, as well as improved product mix driven by our sales of specialty products. Inventory step-up charges associated with the Acquisition negatively impacted the Successor period gross margin. The inventory step-up charges in the Successor period reduced gross margin by 178 basis points for the Successor period. For the full year 2015 these step-up charges reduced gross margin by 75 basis points.

Selling, general and administrative expenses

Selling, general and administrative expenses of $205.2 million for the Successor period and $357.0 million for the Predecessor period increased $337.0 million, or 149.6%, compared to $225.2 million for the fiscal year ended December 31, 2014. The increase was primarily driven by higher operating expenses to support the growth in net sales, share-based awards of $110.2 million in the Predecessor period, an additional investment of $8.5 million in corporate support functions, and transaction fees and other acquisition-related expenses of $11.5 million and $6.8 million in the Successor and Predecessor periods, respectively. Selling, general and administrative expenses as percent of net sales increased to 24.9% for the Successor period and 31.7% for the Predecessor period compared to 21.2% for fiscal year 2014. The increase was primarily driven by an increase in share based awards and transaction fees and other related expenses associated with the Acquisition.

Depreciation and amortization expenses

Depreciation and amortization expenses were $34.1 million for the Successor period and $26.0 million for the Predecessor period compared to $16.0 million for the fiscal year ended December 31, 2014. The increase was primarily the result of acquisitions completed during full year 2015 and fiscal year 2014 (including the Acquisition).

Interest expense

Interest expense was $25.5 million for the Successor period and $27.4 million for the Predecessor period compared to $13.6 million for the fiscal year ended December 31, 2014. The increase was primarily the result of new debt borrowed to finance the Acquisition and acquisitions completed during full year 2015 and fiscal year 2014.

Loss on early extinguishment of debt

For the Predecessor period, a $28.4 million charge related to early extinguishment of debt in connection with the Acquisition was recognized.

Other expense

Other expense was $1.9 million for the Successor period and $2.9 million for the Predecessor period compared to $2.7 million for the fiscal year ended December 31, 2014. The increase was a result of higher net sales in the Predecessor period used to determine management fees.

Income tax expense

Income tax expense was immaterial for all reported periods as the Company is organized and taxed as a limited liability corporation and taxed as a partnership for state and federal income tax purposes. See "—Critical Accounting Policies and Estimates—Income Taxes".

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Net income (loss)

Net loss was $58.1 million for the Successor period and $139.9 million for the Predecessor period compared to $15.0 million of net income for the fiscal year ended December 31, 2014. Net income and loss for each period was affected by the factors described above.

Adjusted EBITDA & Adjusted EBITDA margin

Adjusted EBITDA was $125.8 million for the full year 2015 increased $64.8 million, or 106.2%, compared to $61.0 million for the fiscal year ended December 31, 2014. Adjusted EBITDA margin for the full year increased by 80 basis points to 6.5% primarily driven by increased product category margins and improved mix, partially offset by investment in corporate support functions.

Liquidity and Capital Resources

Summary

We depend on cash flow from operations, cash on hand and funds available under our Revolving Credit Facility to finance working capital needs and capital expenditures. Given the seasonality of our business, we typically experience significant fluctuations in working capital needs and balances throughout the year. Our working capital requirements generally increase during the first half of the year as we build up inventory and receivables during the early spring as the new home building season begins. Working capital levels then decrease as the building season winds down as we enter the winter months, which is when we see significant inflows of cash from the collection of receivables. We believe that these sources of funds will be adequate to fund debt service requirements and provide cash, as required, to support our ongoing operations, capital expenditures, lease obligations, business strategies and working capital needs. Our growth strategy contemplates future acquisitions for which we will need sufficient access to capital. To finance future acquisitions, particularly larger acquisitions, we may issue additional equity or incur additional indebtedness. Any such additional indebtedness would increase our debt leverage. See "Risk Factors—Risks Related to Our Indebtedness."

In January and March 2016, we amended our ABL Facility to increase the maximum borrowing availability to $225 million, and $275 million, respectively. As of December 31, 2016, the Company had available borrowing capacity of approximately $132 million under our $275 million ABL Facility. For a summary of selected terms of the ABL Facility and our other indebtedness, see "Description of Certain Indebtedness."

The following table summarizes of our cash flows from operating, investing and financing activities:

	Successor						Predecessor

				August 20, 2015 through December 31, 2015			January 1, 2015 through August 19, 2015
	Year ended December 31, 2016									Year ended December 31, 2014

(in thousands)
Net cash from operating activities	$	15,039		$	24,705		$	18,362		$	13,550
Net cash used in investing activities		(174,730	)		(1,356,282	)		(197,605	)		(275,168	)
Net cash from financing activities		152,258			1,342,465			175,549			276,184

Net change in cash, cash equivalents and restricted cash	$	(7,433	)	$	10,888		$	(3,694	)	$	14,566

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Operating Activities

Cash from operating activities consists primarily of net income adjusted for non-cash items, including depreciation, amortization and equity-based compensation, and the effects of changes in operating assets and liabilities, net of the effects of acquisitions ("changes in assets and liabilities").

Net cash provided by operating activities was $15.0 million for the fiscal year ended December 31, 2016. Cash provided by operating activities was primarily driven by non-cash charges of $134.6 million, including depreciation and amortization of $114.0 million, partially offset by a net loss of $47.7 million and by cash outflows associated with assets and liabilities of $71.9 million. The changes in assets and liabilities was driven by an increase in accounts receivable, inventories and prepaid expenses and other current assets, as well as a reduction in accounts payable.

Net cash provided by operating activities was $24.7 million for the Successor period. Cash provided by operating activities was primarily driven by non-cash adjustments of $69.4 million, including depreciation and amortization (including the amortization of purchase accounting adjustment to inventory associated with the Acquisition) of $50.2 million, and by cash inflows associated with assets and liabilities of $13.5 million, partially offset by a net loss of $58.1 million. The changes in assets and liabilities was primarily driven by a reduction in accounts receivable and inventories, partially offset by a reduction in trade accounts payable and an increase in prepaid expenses and other current assets.

Net cash provided by operating activities was $18.4 million for the Predecessor period. Cash provided by operating activities was primarily driven by non-cash charges of $173.5 million, including depreciation and amortization of $31.8 million, equity-based compensation of $110.2 million and the loss on the early extinguishment of debt of $28.4 million, partially offset by a net loss of $139.9 million and cash outflows associated with assets and liabilities of $15.2 million. The changes in assets and liabilities was primarily driven by increases in accounts receivable and inventory, partially offset by increases in accounts payable and other accrued liabilities.

Net cash provided by operating activities was $13.6 million for the fiscal year ended December 31, 2014. Cash provided by operating activities was primarily driven by net income of $15.0 million and non-cash charges of $21.9 million, including depreciation and amortization of $19.3 million, partially offset by cash outflows associated with assets and liabilities of $23.4 million. The changes in assets and liabilities was primarily driven by an increase in accounts receivable.

Investing Activities

Net cash used in investing activities consists primarily of acquisitions, investments in our facilities including purchases of land, buildings, and leasehold improvements and purchases of fleet assets, IT, and other equipment. The figures presented are net or proceeds received from asset sales, which typically relate to sales of our fleet assets.

Net cash used in investing activities of $174.7 million for the fiscal year ended December 31, 2016, was primarily driven by cash used for acquisitions of $164.4 million and capital expenditures of $43.5 million, partially offset by proceeds received from the sale of assets of $32.9 million.

Net cash used in investing activities of $1,356.3 million for the Successor period, was primarily driven by cash used for the Acquisition of $1,170.4 million, cash used for other acquisitions of $176.8 million and capital expenditures of $9.8 million.

Net cash used in investing activities of $197.6 million for the Predecessor period, primarily driven by cash used for acquisitions of $175.2 million and capital expenditures of $22.9 million.

Net cash used in investing activities of $275.2 million for the fiscal year ended December 31, 2014, primarily driven by cash used for acquisitions of $260.7 million and capital expenditures of $13.7 million.

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Capital expenditures vary depending on prevailing business factors, including current and anticipated market conditions, age of assets, and current and anticipated strategic initiatives. We maintain a detailed capital expenditures review and approval policy in an effort to control our capital expenditures. We expect our capital expenditures in 2017 to be approximately $35.0 million to $40.0 million (excluding acquisitions) primarily related to fleet and equipment purchases, facilities and IT investments to support our existing operations.

Financing Activities

Cash provided by, or used in, financing activities consists primarily of borrowings and related repayments under our credit agreements, as well as repayments of capital lease obligations, proceeds from the sale of equity, member distributions and payment of contingent consideration related to acquisitions.

Net cash provided by financing activities was $152.3 million for the fiscal year ended December 31, 2016, consisting primarily of net borrowings on our ABL Facility of $28.3 million, borrowings from term loans of $150.9 million, and capital contributions of $1.9 million. Net cash provided by financing activities was partially offset by repayments of debt of $8.1 million, debt issuance costs of $3.8 million, contingent consideration payments related to acquisitions of $4.6 million and member distributions of $12.4 million.

Net cash provided by financing activities was $1,342.5 million for the Successor period, consisting primarily of net borrowings on our ABL Facility of $105.4 million, borrowings from term loans of $825.1 million, and capital contributions of $440.0 million. Net cash provided by financing activities was partially offset by repayments of debt of $2.0 million, debt issuance costs of $24.6 million, and member distributions of $1.5 million. The borrowings from the term loans and the capital contributions during the period were mostly related to the Acquisition.

Net cash provided by financing activities was $175.5 million for the Predecessor period, consisting primarily of net borrowings on our ABL Facility of $36.1 million and borrowings from term loans of $147.8 million. Net cash provided by financing activities was partially offset by repayments of debt of $2.8 million, debt issuance costs of $2.6 million, contingent consideration payments related to acquisitions of $0.3 million and member distributions of $2.6 million. In conjunction with the Acquisition, the outstanding balance of the Predecessor Credit Facility (as defined below) was paid in full and unamortized deferred financing charges of $17.9 million were written off as part of the purchase price accounting.

Net cash provided by financing activities was $276.2 million for the fiscal year ended December 31, 2014, consisting primarily of borrowings from term loans of $343.0 million and proceeds from sale leaseback transactions of $8.0 million. Net cash provided by financing activities was partially offset by net repayments under our former revolving credit facility of $45.2 million, repayments of debt of $1.8 million, debt issuance costs of $8.3 million, contingent consideration payments related to acquisitions of $1.0 million and member distributions of $18.5 million.

Our Credit Facilities

Our long-term debt consists of the following:

Term Loans (Successor):

On August 20, 2015, our wholly-owned subsidiaries, US LBM LLC, as parent guarantor, and LBM Borrower, as borrower, entered into a senior secured first lien term loan facility, or the First Lien Term Loan Facility, and a senior secured second lien term loan facility, or the Second Lien Term Loan Facility and, together with the First Lien Term Loan Facility, the Term Loan Facilities, in an initial

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aggregate principal amount of $811.0 million in connection with the Acquisition. The original proceeds from the Term Loan Facilities were used to (i) repay all amounts outstanding under the former credit facility, (ii) pay the Acquisition purchase price and (iii) pay related fees and expenses.

The First Lien Term Loan Facility was issued in an initial aggregate principal amount of $656.5 million (net of $16.8 million of original issue discount). The Second Lien Term Loan Facility was issued in an initial aggregate principal amount of $154.5 million (net of $7.5 million of original issue discount). At our option, the interest rates applicable to the Term Loan Facilities are based on adjusted LIBOR or adjusted Base Rate, plus, in each case, an applicable margin. At December 31, 2016, the applicable margin with respect to Eurocurrency loans on the First Lien Term Loan Facility was 5.25% and on the Second Lien Term Loan Facility was 9.25%. At December 31, 2016, the applicable margin with respect to adjusted Base Rate loans on the First Lien Term Loan Facility was 4.25% and on the Second Lien Term Loan Facility was 8.25%.

In November 2015, we increased our First Lien Term Loan Facility by an additional $40.0 million (net of $1.6 million of original issue discount). In October 2016, we increased our First Lien Term Loan Facility by an additional $90.0 million (net of $0.2 million original issue discount). In January 2017, we increased our First Lien Term Loan Facility by an additional $80.0 million (net of $0.8 million original issue discount). In June 2016, we amended our Second Lien Term Loan Facility to, among other things, add a tranche B term loan (the "Second Lien Tranche B Term Loans") in an aggregate principal amount of $65.0 million (net of approximately $3.9 million of original issue discount).

Accrued interest, presented within other accrued expenses and current liabilities in our consolidated balance sheets, was approximately $4.8 million and cash paid for interest was $71.6 million during fiscal year ended December 31, 2016.

The First Lien Term Loan Facility amortizes in quarterly installments equal to approximately $1.7 million up to and including September 30, 2016, approximately $2.0 million for the quarter ended December 31, 2016 and approximately $2.2 million thereafter, with the balance payable on August 20, 2022. The Second Lien Term Loan Facility has no amortization and matures on August, 20 2023. The Term Loan Facilities provide the right for individual lenders to extend the maturity date of their loans upon our request and without the consent of any other lender. We are not subject to any financial maintenance covenants pursuant to the terms of the Term Loan Facilities. See "Description of Certain Indebtedness—First Lien Term Loan Facility" and "Description of Certain Indebtedness—Second Lien Term Loan Facility."

Revolving Credit Facility (Successor)

The revolving credit facility, entered into on August 20, 2015, provides for an asset-based revolving credit facility, the issuance of letters of credit and swingline sub-facilities (the "ABL Facility" and the agreement governing such facility, the "ABL Credit Agreement") up to an initial maximum aggregate principal amount of $175.0 million. Extensions of credit under the ABL Facility are limited by a borrowing base calculated periodically based on specified percentages of the value of eligible inventory and eligible accounts receivables, subject to certain reserves and other adjustments.

In January 2016, we amended our ABL Credit Agreement to, among other things, increase the available commitments under the ABL Facility to $225.0 million. In March 2016, we further amended our revolving credit facility to increase the available commitments under the ABL Facility to $275.0 million. As of December 31, 2016, we had approximately $133.8 million in borrowings outstanding under the ABL Facility.

At our option, the interest rates applicable to the loans under the ABL Facility are based on adjusted LIBOR or adjusted Base Rate, plus, in each case, an applicable margin. The margins applicable for each elected interest rate are subject to a pricing grid, as specified in the ABL Credit

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Agreement, based on average daily excess availability for the most recent fiscal quarter. The ABL Facility also contains an unused commitment fee based on utilization, as described in the ABL Credit Agreement.

The ABL Credit Agreement also permits us to request increases in commitments, provided the total commitments under the ABL Facility (including all prior incremental revolving commitments) shall not exceed $325 million.

The ABL Facility will mature on August 20, 2020 or in respect of increases or extensions to commitments such other date set out in the applicable agreement. The ABL Credit Agreement provides the right for individual lenders to extend the maturity date of their commitments and loans upon our request and without the consent of any other lender (other than each issuing letter of credit bank and swingline lender).

Collateral under the ABL Facility and Term Loan Facilities

The ABL Facility is secured by (a) first priority perfected liens on our accounts receivables, deposit accounts, securities accounts, cash and cash equivalents, inventory and all related chattel papers, documents, general intangibles, instruments, letters of credit rights and commercial tort claims, books and records and all proceeds of the foregoing, including cash, cash equivalents, money, instruments, securities, financial assets, investment property and insurance proceeds, subject to customary exceptions (collectively, "ABL Priority Collateral") and (b) third priority perfected liens on our remaining assets not constituting ABL Priority Collateral, subject to customary exceptions (collectively, "Term Priority Collateral").

The First Lien Term Loan Facility and the Second Lien Term Loan Facility are secured by (a) first priority liens and second priority liens, respectively, on the Term Priority Collateral and (b) second priority liens and third priority liens, respectively, on the ABL Priority Collateral, subject to customary exceptions.

Prepayments under the ABL Facility and Term Loan Facilities

The ABL Facility may be prepaid and the unutilized portion of the ABL commitments may be reduced at our option at any time, subject to minimum principal amount requirements, without premium or penalty (subject to reimbursement of the lender's redeployment costs actually incurred in the case of a prepayment of adjusted LIBOR borrowings other than on the last day of the relevant interest period).

If, at any time, the aggregate amount of outstanding revolving credit loans, swingline borrowings, unreimbursed drawings under letters of credit and the undrawn amount of outstanding letters of credit exceeds the lesser of (x) the then applicable borrowing base and (y) the then total effective commitments under the ABL Facility, prepayments of the revolving credit loans (and after giving effect to such prepayment the cash collateralization of letters of credit) will be required in an amount equal to such excess. The application of proceeds from mandatory prepayments shall not reduce the aggregate amount of loan commitments under the ABL Facility and amounts prepaid may be reborrowed, subject to availability and then effective commitments under the ABL Facility.

After the occurrence and the continuance of a Dominion Event (as defined in the ABL Credit Agreement), through the date specified availability has been in excess of such thresholds in the definition of Dominion Event for 20 consecutive calendar days, and no specified event of default has existed or been continuing, all amounts deposited in the core concentration account controlled by the administrative agent will be applied on a daily basis to the outstanding loan balances under the ABL Facility and certain other secured obligations then due and owing.

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The First Lien Term Loans under the First Term Loan Facilities may be prepaid at any time, subject to minimum principal amount requirements, without penalty (except as set forth below and subject to reimbursement of the lenders' redeployment costs actually incurred in the case of a prepayment of adjusted LIBOR borrowings other than on the last day of the relevant interest period). Under certain circumstances and subject to certain exceptions, the Term Loan Facilities will be subject to mandatory prepayments in the amount equal to: 100% of the net proceeds of certain non-ordinary course assets sales and issuances or incurrences of non-permitted indebtedness; and 75% of annual excess cash flow for any fiscal year, such percentage to decrease to 50%, 25% or 0% depending on the attainment of certain total leverage ratio targets.

No mandatory prepayments under the Second Lien Term Loan Facility are required until amounts outstanding under the First Lien Term Loan Facility and any other indebtedness ranking senior in priority to the Second Lien Term Loan Facility have been paid in full (and the amount of any such prepayment shall be reduced by any portion thereof that was first applied to repay, prepay, repurchase or retire indebtedness under the First Lien Term Loan Facility or other senior priority debt); provided that we will be required to prepay loans under the Second Lien Term Loan Facility with any amount of any mandatory prepayment of a type described above that has been offered to and declined by any holders of First Lien Term Loan Facility or other senior priority debt to the extent such prepayment is not prohibited by the terms of the First Lien Term Loan Facility, any agreement governing any other senior priority debt or any applicable intercreditor agreement.

Subject to certain exceptions, any voluntary prepayment or refinancing of the First Lien Term Loan Facility with other indebtedness with a lower effective yield than the effective yield of the First Lien Term Loan Facility, or any amendment that reduces the effective yield of the First Lien Term Loan Facility, in either case that occurs prior to July 31, 2017 and the primary purpose of which is to lower the effective yield on the First Lien Term Loan Facility, will be subject to a prepayment premium of 1.00% of the principal amount of the loans so prepaid, refinanced or amended.

All mandatory prepayments of the Second Lien Term Loan Facility made with proceeds of specified refinancing indebtedness or non-permitted indebtedness, and all voluntary prepayments and repricings of the Second Lien Term Loan Facility, will be subject to the following prepayment premiums: (i) a 2.00% prepayment premium with respect to any prepayment, repricing or refinancing occurring on or prior to June 1, 2017 with respect to Second Lien Tranche B Term Loans, (ii) a 1.00% prepayment premium with respect to any prepayment, repricing or refinancing occurring (a) on or prior to August 20, 2017 with respect to Second Lien Initial Term Loans and (b) after June 1, 2017 but on or prior to June 1, 2018 with respect to Second Lien Tranche B Term Loans and (iii) no prepayment premium after (a) August 20, 2017 with respect to Second Lien Initial Term Loans and (b) June 1, 2018 with respect to Second Lien Tranche B Term Loans.

Guarantees

LBM Borrower, LLC is the borrower under Term Loan Facilities and the lead borrower under the ABL Facility. Certain of our other subsidiaries may be co-borrowers under the ABL Facility. All obligations under the Term Loan Facilities and the ABL Facility are guaranteed by LBM Midco, LLC and each direct and indirect wholly owned material U.S. restricted subsidiary of LBM Borrower, LLC, other than certain excluded subsidiaries.

Covenants under the ABL Facility and Term Loan Facilities

The Term Loan Facilities and the ABL Facility contain customary representations and warranties and customary affirmative and negative covenants. The negative covenants contain, among other things, limitations on the following: the incurrence of additional indebtedness; incurrence of additional liens; consolidation, merger, sale or other disposition of all or substantially all of our assets; transfer or sale

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of assets; payment of dividends on, redemption or repurchase of stock or making of other distributions in respect of our capital stock; repurchase, prepayment or redemption of subordinated indebtedness; making investments; entering into certain transactions with our affiliates, amendments of documents related to junior or subordinated debt, changes in fiscal year and agreeing to restrictions affecting the ability of LBM Borrower, LLC and its restricted subsidiaries to create liens in respect of loans under the First Lien Term Loan Facility, Second Lien Term Loan Facility or ABL Facility, as applicable, or the ability of our restricted subsidiaries to pay dividends to us, make any loans to us or make other intercompany transfers. The negative covenants are subject to customary exceptions, qualifications and, as appropriate, baskets. The ABL Facility permits the incurrence of additional indebtedness and the payment of dividends on, redemption or repurchase of stock or making of other distributions in respect of our capital stock, the repurchase, prepayment or redemption of subordinated indebtedness and making of investments upon satisfaction of a "payment condition", as described in the ABL Facility.

There are no financial covenants included in the Term Loan Facilities. The ABL Facility includes certain affirmative covenants, including financial and other reporting requirements as well as a springing minimum consolidated fixed charge coverage ratio of at least 1.0 to 1.0, which is tested only when specified availability is less than the greater of (A) $22 million and (B) 10% of the lesser of (x) the then applicable borrowing base and (y) the then total effective commitments under the ABL Facility, and continuing until such time as no specified default has existed or been continuing and specified availability has been in excess of such threshold for a period of 20 consecutive calendar days. We were in compliance with all applicable covenants at December 31, 2016.

Events of Default under the ABL Facility and Term Loan Facilities

The ABL Facility and Term Loan Facilities provide for customary events of default, including nonpayment of principal when due, nonpayment of interest, fees or other amounts, inaccuracy of representations or warranties in any material respect, violation of other covenants, cross-default to other material debt, certain bankruptcy or insolvency events, certain Employee Retirement Income Security Act of 1974 ("ERISA") events, certain material judgments, actual or asserted invalidity of material guarantees or security interests, asserted invalidity or contest of the validity of any intercreditor agreement, and a change of control, in each case subject to customary threshold, notice and grace period provisions.

Predecessor credit facilities:

Revolving Credit Facility (Predecessor)

Through August 19, 2015, we utilized our previous credit facility. At December 31, 2014, outstanding borrowings under the revolving credit facility were $43.9 million with a weighted average interest rate of 4.0%.

In conjunction with the Acquisition, the outstanding balance of this revolving credit facility was paid in full and the facility was terminated.

Term Loans (Predecessor)

During 2014, we borrowed $350.0 million through a term loan facility that was to expire in 2020. At December 31, 2014, the outstanding balance on the term loan facility was $348.6 million at an interest rate of 8.0%. In 2015, we borrowed an additional $150.0 million under the term loan facility.

In conjunction with the Acquisition, the outstanding balance under this term loan facility was repaid in full and the facility was terminated.

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Contractual Obligations

We enter into long-term obligations and commitments in the normal course of business, primarily debt obligations and non-cancelable operating leases. As of December 31, 2016, without giving effect to this offering, our contractual cash obligations over the next several periods are as follows:

(in thousands)	2017		2018 - 2019		2020 - 2021		Thereafter		Total

Long-term debt	$	7,874	$	15,748	$	15,748	$	957,696	$	997,066
Operating leases		29,182		49,056		25,308		50,072		153,618
Capital leases and sale-leaseback debt¹		762		1,160		811		20,384		23,117
Notes payable		4,990		136		—		—		5,126

Total	$	42,808	$	66,100	$	41,867	$	1,028,152	$	1,178,927

¹: Includes sale-leaseback debt of $22.2 million

We may, from time to time, repurchase or otherwise retire or extend our debt and/or take other steps to reduce our debt or otherwise improve our financial position. These actions may include negotiated repurchases, other retirements of outstanding debt and/or opportunistic refinancing of debt. The amount of debt that may be repurchased or otherwise retired or refinanced, if any, will depend on market conditions, our cash position, compliance with debt covenants and other considerations. Our affiliates may also purchase our debt from time to time, through open market purchases or other transactions. In such cases, our debt may not be retired, in which case we would continue to reflect the debt as outstanding on our consolidated balance sheets and continue to make interest and principal payments in accordance with the terms of such indebtedness.

We lease certain office and warehouse facilities and equipment, some of which provide renewal options. Rent expense for operating leases, which may have escalating rents over the terms of the leases, is recorded on a straight-line basis over the minimum lease terms. Certain leases provide for additional rent based on periodic increases in the Consumer Price Index. Rent expense under operating leases approximated $34.4 million, $10.8 million, $15.3 million and $14.3 million for the fiscal year ended December 31, 2016, the August 20, 2015 through December 31, 2015 (Successor) period, January 1, 2015 through August 19, 2015 (Predecessor) period and the fiscal year ended December 31, 2014, respectively. As existing leases expire, we anticipate such leases will be renewed or replaced with other leases that are on substantially similar in terms and consistent with market rates at the time of renewal.

Off Balance Sheet Arrangements

At December 31, 2016, other than our letters of credit discussed under "—Our Credit Facilities" above, we did not have any relationships with unconsolidated entities or financial partnerships for the purpose of facilitating off-balance sheet arrangements or for other contractually narrow or limited purposes. As of the fiscal year ended December 31, 2016, the Company had $9.5 million in outstanding letters of credit.

Non-GAAP Financial Measures

In addition to our results under GAAP, in this prospectus we also present Adjusted EBITDA and Adjusted EBITDA margin which are non-GAAP financial measures and have been presented in this prospectus as supplemental measures of financial performance that are not required by, or presented in accordance with, GAAP. See "Prospectus Summary—Summary Historical Consolidated Financial and Other Data" for how we define and calculate Adjusted EBITDA and Adjusted EBITDA margin,

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reconciliations thereof to net (loss) income and descriptions on why we believe these measures are important.

As a result of the Acquisition, the financial information for the period beginning on August 20, 2015 represents the consolidated financial statements of the Successor. Due to the change in the basis of accounting resulting from the application of the purchase method of accounting, the Predecessor's consolidated financial statements and the Successor's consolidated financial statements are not necessarily comparable.

The following table reconciles net income (loss) to Adjusted EBITDA for the periods presented:

	Successor						Predecessor

(In thousands)	Year ended December 31, 2016			Period from August 20, 2015 through December 31, 2015			Period from January 1, 2015 through August 19, 2015			Year ended December 31, 2014
Net income (loss)	$	(47,706	)	$	(58,142	)	$	(139,911	)	$	15,039
Interest expense		80,569			25,538			27,353			13,575
Depreciation and amortization^a		114,027			50,194			31,847			19,418
Income tax expense		343			614			281			121

EBITDA	$	147,233		$	18,204		$	(80,430	)	$	48,153

IPO related expenses^b		14,170			254			—			—
Acquisition expenses^c		4,774			21,583			8,207			7,193
Equity-based compensation and profit interests^d		6,116			14,817			110,192			—
Management fees^e		5,605			1,943			2,938			2,732
Goodwill impairment charge^f		2,304			—			—			—
Loss on early extinguishment of debt^g		—			—			28,445			—
Change in LIFO reserve^h		(38	)		—			(2,561	)		1,659
Consultant feesⁱ		7,149			337			—			—
Other expenses		543			1,534			337			1,230

Adjusted EBITDA	$	187,856		$	58,672		$	67,128		$	60,967



Adjusted EBITDA margin		7.1	%		7.1	%		6.0	%		5.7	%

^a: Includes depreciation and amortization from our consolidated statement of operations, Acquired inventory step-up charges from our consolidated statement of cash flows and depreciation and amortization included within Cost of sales from our consolidated statement of operations (see Note 2 for more information).
^b: Represents selling, general and administrative expenses incurred in connection with preparing the Company to transition to operate as a public company. These costs are not indicative of ongoing operations.
^c: Represents permissible adjustments under our ABL Credit Agreement for selling, general and administrative expenses related to acquisitions, including fees to financial advisors, accountants, attorneys and other professionals, as well as changes in contingent consideration.
^d: Represents non-cash charges related to stock-based awards.
^e: During the Successor periods, represents management fees paid to Kelso and our other pre-IPO owners under the Advisory Services Agreement as well as fees paid under the Consulting Agreement. In connection with this offering, we will terminate the management fee under the Advisory Services Agreement and terminate the Consulting Agreement. See "Certain Relationships and Related Party Transactions." During the Predecessor periods, represents management fees paid to our pre-Acquisition owners under arrangements that were terminated in connection with the Acquisition.
^f: Represents non-cash charges related to the impairment of goodwill of one of the company's reporting units.
^g: Represents a non-recurring loss on the early extinguishment of debt in connection with the Acquisition.

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^h: Represents non-cash charges recorded in cost of sales to recognize cost on a last-in-first-out basis.
ⁱ: Represents consulting services in connection with operational efficiency initiatives. These costs are not expected to be incurred on an ongoing basis and are therefore not indicative of ongoing operations.

Quantitative and Qualitative Disclosures about Market Risk

Commodity Risk

Our operating performance may be affected by price fluctuations in commodity-based products like lumber and wallboard that we purchase and sell. The markets for most of the commodity-based products we purchase and sell are affected by factors such as macro-economic conditions, including the strength of the U.S. housing market, changes in, or disruptions to, industry production capacity, changes in inventory levels by our vendor partners, and other factors out of our control. We are also exposed to fluctuations in fuel costs as we deliver a substantial portion of the products we sell by truck. We seek to minimize the effects of inflation and changing prices through our purchasing strategies and inventory management resulting in cost reductions and productivity improvements as well as the implementation of price increases to maintain gross margins.

Product Price Risk

Our business model is to buy and sell at current market prices, in quantities approximately equal to estimated customer demand. We do not take significant "long" or "short" positions in the products we sell in an attempt to speculate on changes in product prices. Because we maintain inventories in order to serve the needs of our customers, we are subject to the risk of reductions in market prices for the products we hold in inventory. We actively manage this risk by adjusting prices and managing our inventory levels.

Interest Rate Risk

We are subject to interest rate risk associated with our debt, a significant portion of which bears interest at variable rates. While changes in interest rates do not affect the fair value of our variable-rate debt, they do affect future earnings and cash flows through higher interest expense.

•: The ABL Facility bears interest at LIBOR or the Base Rate, at our option, plus applicable borrowing margins. Borrowings on the ABL Facility will bear interest at (i) LIBOR rate plus an applicable margin ranging from 1.50% to 2.00% or (ii) a Base Rate plus an applicable margin ranging from 0.50% to 1.00%. The interest margins are dependent on the excess availability of the line. The base rate is calculated by determining the highest of (i) the rate of interest publicly announced by the ABL Administrative Agent as its prime rate in effect at its principal office in New York City (the "Prime Rate"), (ii) the federal funds effective rate from time to time plus 0.50% and (iii) Adjusted LIBOR applicable for an interest period of one month plus 1.00%.
•: The Term Loan Facility includes a first lien term loan facility maturing August 2022 and a second lien term loan facility maturing August 2023. Interest on the Term Loan Facility is calculated based on the greatest of (i) the Prime Rate in effect on such day, (ii) the Federal Funds Effective Rate in effect on such day plus 0.50% and (iii) the Adjusted Eurodollar Rate for a one month Interest Period on such day plus 1.00% plus an applicable margin. At December 31, 2016, the applicable margin on the first lien facility was 5.25% and the applicable margin on the second lien facility was 9.25%.

Based on existing debt levels as of December 31, 2016 and excluding the interest rate floors, a 1% increase in interest rates on our variable-rate debt would increase our annual interest expense by approximately $11.1 million.

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Credit Risk

We have a credit policy in place and monitor exposure to credit risk on an ongoing basis. We perform credit evaluations on all customers requesting credit above a specified exposure level. In the normal course of business, we provide credit to our customers, perform ongoing credit evaluations of these customers and maintain reserves for potential credit losses. Our typical credit terms extend 30 days from the date of purchase, but extended terms beyond our typical 30 day credit terms are not uncommon. We typically have limited risk from a concentration of credit risk as no individual customer represents greater than 2% of the outstanding accounts receivable balance.

Critical Accounting Policies and Estimates

Our discussion and analysis of operating results and financial condition are based upon our audited financial statements included elsewhere in this prospectus. The preparation of our financial statements, in accordance with GAAP, requires us to make estimates and assumptions that affect the reported amounts of assets, liabilities, net sales, expenses and related disclosures of contingent assets and liabilities. We base our estimates on past experience and other assumptions that we believe are reasonable under the circumstances, and we evaluate these estimates on an ongoing basis. Our Critical Accounting Policies and Estimates are those that materially affect our consolidated financial statements and involve difficult, subjective or complex judgments by management. Although these estimates are based on management's best knowledge of current events and actions that may impact us in the future, actual results may be materially different from the estimates.

We believe the following critical accounting policies are affected by significant judgments and estimates used in the preparation of our consolidated financial statements and that the judgments and estimates are reasonable.

Revenue Recognition

The Company recognizes revenue for sales of building products when products are delivered and the customer takes ownership and assumes risk of loss, collection of the relevant receivable is reasonably assured, persuasive evidence of an arrangement exists and the sales price is fixed or determinable. All sales recognized are net of sales taxes and allowances for discounts and estimated returns. The Company records sales incentives provided to customers as a reduction of revenue. Shipping and handling costs invoiced to the customer are included within revenues with the related expense included in "Selling, general and administrative" expenses.

The percentage-of-completion method, which represents less than 1% of our net sales, is used to recognize revenue for construction services greater than 30 days. The completed contract method is used for shorter term construction service contracts. Periodic estimates of progress towards completion are made based on either a comparison of labor costs incurred to date with total estimated contract labor costs or total costs incurred to date with total estimated contract costs. The percentage-of-completion method requires the use of various estimates, including among others, the extent of progress towards completion, contract revenues and contract completion costs. Contract revenues and contract costs to be recognized are dependent on the accuracy of estimates, including quantities of materials, labor productivity and other cost estimates. We have a history of making reasonable estimates of the extent of progress towards completion, contract revenues and contract completion costs. Due to uncertainties inherent in the estimation process, it is possible that actual contract revenues and completion costs may vary from estimates.

Estimated losses on uncompleted contracts and changes in contract estimates reflect our best estimate of probable losses of unbilled receivables, and are recognized in the period such revisions are known and can be reasonably estimated. These estimates are recognized in cost of sales. Estimated losses on uncompleted contracts and changes in contract estimates are established by assessing

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estimated costs to complete, change orders and claims for uncompleted contracts. Assumptions for estimated costs to complete include material prices, labor costs, labor productivity and contract claims. Such estimates are inherently uncertain and therefore it is possible that actual completion costs may vary from these estimates.

Allowance for Doubtful Accounts

We maintain an allowance for doubtful accounts for estimated losses due to the failure of our customers to make required payments. Management believes the accounting estimate related to the allowance for doubtful accounts is a "critical accounting estimate" as it involves complex judgments about our customers' ability to pay.

The allowance for doubtful accounts is based on an assessment of individual past due accounts, historical write-off experience, accounts receivable aging, customer disputes and the business environment. Account balances are charged off when the potential for recovery is considered remote.

Management believes the allowance amounts recorded, in each instance, represent its best estimate of future outcomes. If there is a deterioration of a major customer's financial condition, if we become aware of additional information related to the creditworthiness of a major customer, or if future actual default rates on trade receivables in general differ from those currently anticipated, we may have to adjust the allowance for doubtful accounts, which would affect earnings in the period the adjustments were made. Based on our evaluation, we record reserves to reduce the related receivables to amounts we reasonably believe are collectible.

Inventories

Inventories consist primarily of materials purchased for resale, and include lumber, wallboard and other building products and are recorded at the lower of cost or market. The cost of our inventories is determined by the last in-first out method. We monitor our inventory levels by location and record provisions for excess inventories based on slower moving inventory. We define potential excess inventory as the amount of inventory on hand in excess of the historical usage, excluding items purchased in the last 12 months. We then review our most recent history of sales and adjustments of such excess inventory and apply our judgment as to forecasted demand and other factors, including liquidation value, to determine the required adjustments to net realizable value. In addition, at the end of each fiscal year, we evaluate our inventory at each location and write-off and dispose of obsolete products. Our inventories are generally not susceptible to technological obsolescence. We also accrue for vendor rebates earned based on purchase volumes and adjust inventories to reflect the reduction in the cost basis for inventories purchased that are subject to vendor rebates. Historically, our actual rebates have been within our expectations used for our estimates.

Business combinations

We account for business combinations, including the Acquisition, using the purchase method of accounting which results in the assets acquired and liabilities assumed being recorded at fair value as of the date of the acquisition. The purchase price of acquisitions, including estimates of the fair value of contingent consideration when applicable, is allocated to the tangible and intangible assets acquired and the liabilities assumed. The excess of the purchase price over these over fair values of these the identifiable assets and liabilities is recorded as goodwill. Goodwill represents the future economic benefits expected to arise from other intangible assets acquired that do not qualify for separate recognition, including an assembled workforce and non-contractual relationships, as well as expected future synergies. All acquisition costs are expensed as incurred. While we use our best estimates and assumptions as a part of the acquisition consideration allocation process to accurately value assets acquired and liabilities assumed at the acquisition date, our estimates are inherently uncertain and

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subject to refinement. As a result, during the measurement period we may record adjustments to the assets acquired and liabilities assumed, with the corresponding offset to goodwill. Upon the conclusion of the measurement period any subsequent adjustments are recorded as expense.

The valuation methodologies used are based on the nature of the asset or liability. The significant assets and liabilities measured at fair value include property and equipment, intangible assets, and favorable and unfavorable leases. For the Acquisition and other acquisitions, intangible assets consisted of trade names, customer relationships, non-compete agreements, and favorable and unfavorable leases.

The fair value of trade names is estimated using the relief from royalty method, an income approach to valuation, which includes projecting future sales and other estimates. Customer relationships are valued based on an estimate of future revenues and costs related to the respective contracts over the remaining expected lives. Our valuation includes assumptions related to the projected attrition and renewal rates on those existing customer arrangements being valued. Non-compete agreements are recorded using the lost profit method. Favorable and unfavorable operating leases are recorded based on differences between contractual rents under the respective lease agreements and prevailing market rents at the lease acquisition date. Changes in market events, projected future net sales, operating results, cash flow of our reporting units and other similar circumstances could affect the assumptions used in our fair value calculations.

We consider our trade name intangible assets to have an indefinite useful life, and, therefore, these assets are not amortized but rather are tested for impairment annually as discussed below. Customer relationships are amortized on an accelerated basis based on expected attrition. Non-compete agreements are amortized on a straight-line basis over the term of the agreement. Favorable and unfavorable operating leases are amortized into rental expense over the lease term of the respective leases using the straight-line method.

Long-Lived Assets, Goodwill and Intangibles

Our long-lived assets consist primarily of property, equipment, purchased intangible assets and goodwill. The valuation and the impairment testing of these long-lived assets involve significant judgments and assumptions, particularly as they relate to the identification of reporting units, asset groups and the determination of fair market value.

We test our tangible and intangible long-lived assets subject to amortization for impairment whenever facts and circumstances indicate that the carrying amount of an asset may not be recoverable. We test goodwill and indefinite lived intangible assets for impairment annually, or more frequently if triggering events occur indicating that there may be impairment.

We have recorded trade names as indefinite-lived intangible assets and perform testing for potential impairment on an annual basis. We perform this test of each trade name on annual basis utilizing the royalty method which determines the present value of the after-tax royalty savings attributable to the ownership of the asset. Key assumptions used in this analysis include projected net sales, the royalty rate and the discount rate.

We have recorded goodwill and perform testing for potential goodwill impairment at a reporting unit level. A reporting unit is an operating segment, or a business unit one level below an operating segment for which discrete financial information is available, and for which management regularly reviews the operating results. Additionally, components within an operating segment can be aggregated as a single reporting unit if they have similar economic characteristics. We have performed testing on each of our reporting units which contain goodwill.

Our assessment of goodwill impairment requires judgment by management to estimate future operating results and cash flows. Using different assumptions or estimates could impact the amount and timing of impairment. We derive a reporting unit's fair value through a combination of the market

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approach (a guideline transaction method) and the income approach (discounted cash flow analysis). The market approach estimates value based on a comparison of the reporting unit to comparable public companies in a similar line of business. From the comparable companies, a representative market multiple is determined which is applied to our financial metrics to estimate the value of our company. The income approach uses a reporting unit's projection of estimated future cash flows that is discounted at a market derived weighted average cost of capital. The projection uses management's best estimates of economic and market conditions over the projected period including growth rates in sales, costs, estimates of future expected changes in operating margins and capital expenditures.

During the fourth fiscal quarters of 2016, 2015 and 2014, we performed our annual impairment assessments of goodwill, which did not indicate that an impairment existed with the exception of one reporting unit where an impairment charge of $2.3 million was recognized in 2016. During each assessment, we determined that the fair value of our reporting units which contain goodwill exceeded their carrying values. In our 2016 impairment test, three of our reporting units' fair values exceeded their carrying values by a range of approximately 5% to 12%. These reporting units had an aggregate goodwill carrying value of $31.6 million, representing 4.9% and 1.7% of goodwill and total assets respectively. Changes to the above management assumptions and estimates utilized in the market and income approaches could negatively impact the fair value conclusions for these reporting units resulting in goodwill impairment.

For impairment testing of long-lived assets, we identify asset groups at the lowest level for which identifiable cash flows are largely independent of the cash flows of other groups of assets and liabilities. Recoverability of assets to be held and used is measured by a comparison of the carrying amount of an asset to estimated undiscounted future cash flow expected to be generated by the assets. If the carrying amount of an asset exceeds its estimated future cash flows, an impairment charge is recognized by the amount by which the carrying amount of the asset exceeds the estimated fair value of the asset.

As discussed above, changes in management intentions, market events or conditions, projected future net sales, operating results, cash flow of our reporting units and other similar circumstances could affect the assumptions used in the impairment tests. Although management currently believes that the estimates used in the evaluation of goodwill and other long-lived assets are reasonable, differences between actual and expected net sales, operating results and cash flow could cause these assets to be impaired. If certain assets were determined to be impaired, this could have a material non-cash adverse effect on our results of operations and financial position.

Significant estimates and assumptions inherent in the valuations reflect a consideration of other marketplace participants and include the amount and timing of future cash flows (including expected growth rates and profitability), the underlying product or technology life cycles, the economic barriers to entry and the discount rate applied to the cash flows. Unanticipated market or macroeconomic events and circumstances may occur that could affect the accuracy or validity of the estimates and assumptions.

Determining the useful life of an intangible asset also requires judgment. Certain intangible assets are expected to have indefinite lives based on their history and our plans to continue to support and build the acquired brands. Other acquired intangible assets such as customer relationships and non-compete agreements are expected to have determinable useful lives. The costs of determinable-lived intangibles are amortized to expense over their estimated lives.

Equity-Based Compensation

The Company's stock-based awards in the Successor period include Continuing Owner LLC override units (operating units, value units and upside units) and incentive units (service units and performance units). While these awards have been issued at the Continuing Owner LLC legal entity, all expenses have been pushed down to the Company.

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The Company is treating operating units as liability-classified equity-based compensation and upside units as equity-based payments to non-employees whereas all other awards are treated as profit interests under ASC 710. The main difference between a liability-classified award and an equity-classified award is that liability-classified awards are remeasured each reporting period at fair value.

Override units

Three types of override units were created by Continuing Owner LLC's operating agreement: (1) operating units, which vest in four equal installments commencing on the first anniversary of the grant date based upon service, (2) value units, which are eligible for distributions upon attaining certain performance hurdles, and (3) upside units, which were granted to certain nonemployees of the Company and were vested upon issuance, which are eligible for distributions upon attaining certain performance hurdles. All of the units provide for accelerated vesting if there is an Exit Event (as defined in the existing Continuing LLC Owner LLC agreement). The number of value units and upside units eligible for distributions will be determined based on the strike price and certain performance hurdles based on Kelso Affiliates' achievement of certain multiples on their original indirect equity investment in the Company subject to an internal rate of return minimum at the time of distribution.

Due to the fact that distributions are contingent on a liquidity event for the value units granted, no expense has been recognized with respect to these awards during any of the periods presented and will only be recognized when it is probable that a liquidity event will occur.

Upside units were accounted for as nonemployee share-based expense. As a result, compensation expense equal to the fair value of the upside units, determined using a numerical integration model (a monte carlo simulation method, which applies numerical integration to the monte carlo paths) was recognized at the grant date, August 20, 2015. Compensation expense of $14.8 million was recognized within selling, general and administrative expense in the Successor period consolidated statement of operations based on a fair value of $2.65 per unit. The fair value per upside unit as of December 31, 2016 was $9.02. The changes in the fair value per unit over the last twelve months are primarily the result of the integration of the newly acquired businesses in 2015 and 2016 coupled with organic growth.

Compensation expense for operating units will be recognized over the vesting period within selling, general and administrative expense in the consolidated statement of operations. Compensation expense related to operating unit awards is determined based on the fair value of the award as of each balance sheet date, determined also using a numerical integration model.

The significant assumptions used in the valuation model to determine the fair value of the operating units, value units include the enterprise value of the Company, the timing of an exit event (which was assumed to occur between 2 and 5 years), the risk-free rate (ranging from 1.2% to 1.8%) and the expected volatility (ranging from 21% to 25%).

•: Enterprise value. Enterprise value was estimated to equal (1) the fair debt value based on Bloomberg valuation as of each valuation date plus the (2) fair value of each unit class based on a probability-weighted average value, which is based on a range of future equity values over a range of possible exit event dates.
•: Exit Event. The range of potential exit event dates was based on input from management.
•: Risk-free rate. The risk-free rate is based on the U.S. Treasury yield curve in effect at the time of grant for the expected term of the operating units.
•: Expected volatility. Since there has been no public market for these operating units and lack of company specific historical volatility, estimates of asset volatilities were based on medians of historical asset volatilities of guideline public companies. In evaluating similarity, we consider

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factors such as stage of development, risk profile, enterprise value and position within the industry.

•: Performance conditions. The ability and degree of participation for the value and upside units is based on the satisfaction of certain performance hurdles in addition to the occurrence of an exit event. The expected value attributable to each class of units was driven by the extent to which these performance hurdles were satisfied in each simulation.

In the Successor period, the Company issued 2,328,534 operating units. The weighted average grant date fair value of each operating unit was $6.15 per unit. As of December 31, 2016, the fair value of the operating units granted in 2015 was $10.29 per unit. The change in the fair value per unit over the last twelve months are primarily the result of the integration of the newly acquired businesses in 2015 and 2016 coupled with organic growth.

Incentive Units

Continuing LLC Owner's also implemented an equity incentive plan in 2015 for designated employees of the Company. Upon an Exit Event, and at any other time determined by the board, holders of the incentive units will receive a cash distribution from the Company.

Two types of incentive units were created by Continuing LLC Owner's plan: (1) service units, which vest upon an Exit Event and (2) performance units, which are eligible for distributions upon attaining certain performance hurdles. The number of performance units eligible for distributions will be determined based on the strike price and certain performance hurdles based on Kelso Affiliates' achievement of certain multiples on their original indirect equity investment in the Company subject to an internal rate of return minimum at the time of distribution.

The grant date fair value of the service and performance units granted in 2015 was $6.23 and $3.56 per unit, respectively. The fair value of each incentive unit was estimated on the date of grant using a numerical integration pricing. Due to the fact that distributions for the incentive units granted are contingent on a liquidity event along with the satisfaction of other performance conditions referenced above, no expense has been recognized with respect to these awards during any of the periods presented and will only be recognized when it is probable that a liquidity event will occur.

The Company has not recorded compensation expense related to the incentive units and none will be recognized until it becomes probable that the performance conditions associated with the incentive units will be achieved.

•: Enterprise value. Enterprise value was estimated to equal (1) the fair debt value based on Bloomberg valuation as of each valuation date plus the (2) fair value of each unit class based on a probability-weighted average value, which is based on a range of future equity values over a range of possible exit event dates.
•: Exit Event. The range of potential Exit Event dates was based on input from management.
•: Risk-free rate. The risk-free rate is based on the U.S. Treasury yield curve in effect at the time of grant for the expected term of the operating units.
•: Expected volatility. Since there has been no public market for these operating units and lack of company specific historical volatility, estimates of asset volatilities were based on medians of historical asset volatilities of guideline public companies. In evaluating similarity, we consider factors such as stage of development, risk profile, enterprise value and position within the industry.
•: Performance conditions. The ability and degree of participation for the incentive units is based on the satisfaction of certain performance hurdles in addition to the occurrence of an Exit

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Event. The expected value attributable to each class of units was driven by the extent to which these performance hurdles were satisfied in each simulation.

The assumptions used in calculating the above fair values of equity-based compensation awards described above represent management's best estimates, but these estimates involve inherent uncertainties and the application of management judgment. As a result, if factors change or if we use different assumptions, the equity-based compensation expense could be materially different in the future.

Vendor Rebates

Typical arrangements with our vendors provide for us to receive a rebate of a specified percentage of purchases after we achieve any of a number of measures generally related to the volume of our purchases over a period of time. We reserve these rebates to effectively reduce our cost of sales in the period in which we sell the product. Throughout the year, we estimate the amount of rebates receivable for the periodic programs based upon the expected level of purchases. We continually revise these estimates to reflect actual rebates earned based on actual purchase levels. If we fail to achieve a measure which is required to obtain a vendor rebate, we will have to record a charge in the period in which we determine the criteria or measure for the vendor rebate will not be met to the extent the vendor rebate was estimated and included as a reduction to cost of sales. Historically, our actual rebates have been within our expectations used for our estimates.

Income Taxes

The Company is currently, and will be through the consummation of this offering, organized and taxed as a limited liability corporation and taxed as a partnership for state and federal income tax purposes. Substantially all items of income, expense and available tax credits are passed through to the Company's members. Accordingly, there is no provision for federal income tax and minimal state income tax expense reflected in the accompanying consolidated financial statements.

The open tax years subject to examination are 2013 through the Acquisition date and the Successor Periods. A tax position is recognized as a benefit only if it is "more likely than not" that the tax position would be sustained in a tax examination, with a tax examination being presumed to occur. Due to its pass-through status, the Company and its wholly owned subsidiaries are only subject to certain taxes of multiple-state jurisdictions. Based on the Company's analysis, there have been no liabilities recorded for uncertain tax positions as of year ended December 31, 2016 (Successor) Period and year ended December 31, 2015 (Successor) Period. Additionally, the Company has no amounts accrued for interest or penalties as of year ended December 31, 2016 (Successor) Period and year ended December 31, 2015 (Successor) Period, respectively. The Company does not expect the total amount of unrecognized tax benefits to significantly change in the next 12 months.

After the consummation of this offering, pursuant to the reorganization agreement with Holdings, Continuing LLC Owner and the Former LLC Owners, net profits and net losses of US LBM LLC will generally be allocated to its holders (including Holdings) pro rata in accordance with the percentages of their respective membership interests, except as otherwise required by law. See "Certain Relationships and Related Party Transactions—Related party agreements entered into in connection with this offering and the Reorganization Transactions—Amended and Restated LLC Agreement of US LBM LLC."

After consummation of this offering, the holders of LLC Interests, including Holdings, will incur U.S. federal, state and local income taxes on their share of any taxable income of US LBM LLC and will be taxed at the prevailing corporate tax rates. In addition to tax expenses, we also will incur expenses related to our operations, plus payments under the Tax Receivable Agreement, which may be significant. In accordance with the Amended and Restated LLC Agreement, Holdings intends to cause

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US LBM LLC to make cash distributions to the holders of LLC Interests for purposes of funding their tax obligations in respect of the income of US LBM LLC that is allocated to them, including distributions to fund any ordinary course payments due under the Tax Receivable Agreements. See "Certain Relationships and Related Party Transactions—Related party agreements entered into in connection with this offering and the Reorganization Transactions—Amended and Restated LLC Agreement of US LBM LLC."

Recently issued accounting pronouncements

In May 2014, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update 2014-09, Revenue from Contracts with Customers ("ASU 2014-09"), and issued subsequent amendments to the initial guidance within Accounting Standards Update 2016-08, Revenue from Contracts with Customers, Principal versus Agent Considerations ("ASU 2016-08") issued in March 2016, Accounting Standards Update 2016-10, Revenue from Contracts with Customers, Identifying Performance Obligations and Licensing ("ASU 2016-10") issued in April 2016, Accounting Standards Update 2016-12, Revenue from Contracts with Customers, Narrow-Scope Improvements and Practical Expedients ("ASU 2016-12") issued in May 2016 and Accounting Standards Update 2016-20, Technical Corrections and Improvements to Topic 606, Revenue from Contracts with Customers ("ASU 2016-20") issued in December 2016 (ASU 2014-09, ASU 2016-08, ASU 2016-10, ASU 2016-12 and ASU 2016-20 collectively "Topic 606"). Topic 606 provides a comprehensive revenue recognition model requiring companies to recognize revenue for the transfer of goods or services to a customer at an amount that reflects the consideration it expects to receive in exchange for those goods or services. The guidance also requires additional disclosure about the nature, amount, timing and uncertainty of revenue and cash flows arising from customer contracts. In July 2015, the FASB voted to defer the effective date of ASU 2014-09 by one year, and therefore the standard is effective for the Company's annual and interim periods beginning on January 1, 2018. The guidance permits the use of either a retrospective or cumulative effect transition method. We are continuing to evaluate the impact of the standard on our financial statements, including which transition method to use.

In August 2014, the FASB issued Presentation of Financial Statements—Going Concern (Subtopic 205-40): Disclosure Of Uncertainties About An Entity's Ability To Continue As Going Concern ("ASU 2014-15") under the Presentation of Financial Statements topic of the Codification. This update requires management to perform interim and annual assessments on whether there are conditions or events that raise substantial doubt about the entity's ability to continue as a going concern within one year of the date the financial statements are issued and to provide related disclosures, if required. This new guidance is effective for the annual period ending after December 15, 2016, and for annual and interim periods thereafter. As such, the Company adopted this guidance for the annual reporting period ending December 31, 2016. The adoption of this guidance did not have an impact on the Company's financial statements.

In April 2015, the FASB issued ASU 2015-03, Simplifying the Presentation of Debt Issuance Costs ("ASU 2015-03"). ASU 2015-03 requires that debt issuance costs be presented in the balance sheet as a direct deduction from the carrying amount of the associated debt liability, consistent with the presentation of debt discounts, instead of as an asset. In August 2015, the FASB issued ASU 2015-15, Interest—Imputation of Interest: Presentation and Subsequent Measurement of Debt Issuance Costs Associated with Line-of-Credit Arrangements—Amendments to SEC Paragraphs Pursuant to Staff Announcement at June 18, 2015 EITF Meeting ("ASU 2015-15"). ASU 2015-15 clarifies the treatment of debt issuance costs for line-of-credit arrangements, which was not addressed in ASU 2015-03, by indicating that the SEC staff would not object to an entity deferring and presenting debt issuance costs related to a line-of-credit arrangement as an asset and subsequently amortizing the deferred debt issuance costs ratably over the term of such arrangement, regardless of whether there are any outstanding borrowings on the line-of-credit arrangement. ASU 2015-03 and ASU 2015-15 were

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effective for the Company's annual periods beginning on January 1, 2016, with early adoption permitted. ASU 2015-03 is required to be applied retrospectively, wherein the balance sheet of each individual period presented should be adjusted to reflect the period-specific effects of the new guidance. Accordingly, the Company elected to adopt both of these ASUs in 2015 and has presented debt issuance costs related to line-of-credit arrangements as assets in the consolidated balance sheets whereas debt issuance costs related to term loans have been presented as a reduction of the carrying value of the related debt obligation.

In July 2015, the FASB issued ASU 2015-11, Inventory: Simplifying the Measurement of Inventory. an update to the existing guidance under the Inventory topic of the Codification ("ASU 2015-11") which changes the subsequent measurement of inventory from lower of cost or market to lower of cost and net realizable value. This guidance is effective for public companies for periods beginning after December 15, 2016. Early adoption of this guidance is permitted as of the beginning of an interim or annual reporting period. This guidance requires prospective application. The Company does not expect the adoption of this guidance to have an impact on its financial statements.

In September 2015, the FASB issued ASU 2015-16, Business Combinations: Simplifying the Accounting for Measurement-Period Adjustments ("ASU 2015-16"). ASU 2015-16 requires that an acquirer recognize adjustments to provisional amounts that are identified during the measurement period in the reporting period in which the adjustment amounts are determined, including the cumulative effect of the change in provisional amount as if the accounting had been completed at the acquisition date. The adjustments related to previous reporting periods since the acquisition date must be disclosed by income statement line item either on the face of the income statement or in the notes. Prospective application is required. The Company early adopted ASU 2015-16 during 2015. The adoption of the standard did not have a material impact on the Company's financial statements.

In February 2016, the FASB issued ASU 2016-02, Leases ("ASU 2016-02"). The new standard establishes a right-of-use ("ROU") model that requires a lessee to record a ROU asset and a lease liability on the balance sheet for all leases with terms longer than 12 months. Leases will be classified as either finance or operating, with classification affecting the pattern of expense recognition in the income statement. ASU 2016-02 is effective for public companies for periods beginning on January 1, 2019. A modified retrospective transition approach is required for lessees for capital and operating leases existing at, or entered into after, the beginning of the earliest comparative period presented in the financial statements, with certain practical expedients available. The Company is evaluating the impact of the standard on its financial statements.

In March 2016, the FASB issued ASU 2016-09, Stock Compensation (Topic 718): Improvements to Employee Share-Based Payment Accounting ("ASU 2016-09"), which involves several aspects of the accounting for share-based payment transactions, including 1) recognition of all income tax benefits and deficiencies related to exercised or vested awards in income tax expense, 2) classification of excess tax benefits as an operating activity in the statement of cash flows, 3) the ability of companies to make a policy election as to either estimate forfeitures or account for forfeitures as they occur, 4) stipulation that partial cash settlement for tax-withholding purposes would not result, by itself, in liability classification provided the amount withheld does not exceed the maximum statutory rate for an employee in the applicable jurisdictions and 5) clarification that cash paid by an employer to a taxing authority when directly withholding shares for tax-withholding purposes should be classified as a financing activity on the statement of cash flows. For each provision, the standard indicates whether the provision should be adopted on a retrospective, prospective or modified retrospective basis. ASU 2016-09 is effective for public companies for annual periods beginning on or after December 15, 2016, however early adoption is permitted. The adoption of the standard will not have a material impact on the Company's financial statements.

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In August 2016, the FASB issued ASU 2016-15, Statement of Cash Flows (Topic 230): Classification of Certain Cash Receipts and Cash Payments ("ASU 2016-15"). ASU 2016-15 was issued to decrease the diversity in practice of how certain cash receipts and cash payments are presented and classified in the statement of cash flows by providing guidance on eight specific cash flow issues. ASU 2016-15 is effective for the Company's annual periods beginning on January 1, 2019, with early adoption permitted and retrospective application required. The Company has adopted this standard as of December 31, 2016 with retrospective application. As a result, any cash paid related to contingent consideration agreements at the time of the acquisition is presented as an investing activity. If the Company makes any cash payments post acquisition related to contingent consideration agreements, it is presented as a financing activity up to its fair value at the time of the acquisition and the remainder is presented as an operating cash flow (see Note 5 for more information).

In November 2016, the FASB issued ASU 2016-18, Statement of Cash Flows (Topic 230): Restricted Cash ("ASU 2016-18"). ASU 2016-18 requires that the statement of cash flows include restricted cash in the beginning and end-of-period total amounts shown and that the statement of cash flows explain the changes in restricted cash during the period. ASU 2016-18 is effective for the Company's annual and interim periods beginning on January 1, 2019. Retrospective application is required and early adoption is permitted. Accordingly, the Company elected to adopt the ASU retrospectively in 2014 and the statement of cash flows include changes in restricted cash during the periods.

In January 2017, the FASB issued ASU 2017-01, Business Combinations (Topic 805): Clarifying the Definition of a Business ("ASU 2017-01"). ASU 2017-01 provides guidance in determining when a set of assets and activities meets the definition of a business. ASU 2017-01 is effective for public companies for annual periods beginning after December 15, 2017. Early application is permitted for transactions meeting certain criteria and prospective application is required. The adoption of the standard is not expected to have a material impact on the Company's financial statements.

In January 2017, the FASB issued Intangibles—Goodwill And Other (Topic 350): Simplifying The Test For Goodwill Impairment ("ASU 2017-04") to the existing guidance under the Intangibles-Goodwill and Other topic of the Accounting Standards Codification ("Codification") to simplify the accounting for goodwill impairment. The guidance removes Step 2 of the goodwill impairment test, which requires a hypothetical purchase price allocation. A goodwill impairment will now be the amount by which a reporting unit's carrying value exceeds its fair value, not to exceed the carrying amount of goodwill. All of the other goodwill impairment guidance will remain largely unchanged, including the option to perform a qualitative assessment to determine if a quantitative impairment test is necessary. This update is effective for public companies for annual and any interim goodwill impairment tests in fiscal years beginning after December 15, 2020. Early adoption of this guidance is permitted for annual or interim goodwill tests performed after January 1, 2017. This guidance will be applied as of the effective date for public companies on a prospective basis following adoption.

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LETTER FROM L.T. GIBSON, OUR FOUNDER, PRESIDENT AND CHIEF EXECUTIVE OFFICER

Dear Prospective Stockholder,

US LBM was formed in late 2009, just seven years ago; however, the companies with which we have partnered have been in business for an average of 70 years. They each have a real history of success in managing through housing cycles, employing and promoting prideful workers and doing their part to help build America.

US LBM is and will always be a company that is about our people. We emphasize the "US" in US LBM, and we work to foster a culture of empowerment for our team of talented and driven associates and invest in them through training and development.

As US LBM acquires industry-leading companies, we take great care in learning about their rich history and track record of success. We have demonstrated that we are better together than we are apart. We have resources that a small business generally cannot justify investing in, and our partners have strong relationships and local expertise developed through decades of operating in their respective markets. Interestingly, if you read the 1916 Edward Hines Lumber handbook on lumber delivery and replace "horse and buggy" with "tractor trailer," you will quickly realize that not much has changed in this industry over the past 100 years. Our goal is to drive change and accelerate the speed at which our company and industry move forward, while always being mindful of the local nature of our business.

We created this company to be the best in every market, every product category and every customer we serve. The end game has never been about simply being the biggest, but about being the best. In order to achieve excellence, we have partnered with great companies that possess a spirit of innovation and entrepreneurship. We have invested in state-of-the-art technology to support key business processes such as job quoting, inventory management, warehousing and delivery. We have expanded our expertise in multiple specialty product categories to offer a wide range of products to our customers. We have worked diligently to build strong relationships with our vendor partners through joint planning efforts. We have instilled a mindset of continuous improvement through our US1 training, project mentoring and sharing of best practices across the enterprise. And we have helped our customers be more productive by delivering what we believe is a game-changing mobile app that enables a higher level of transparency and communication, providing them with critical information they need to drive productivity in their businesses.

On our journey to becoming the best, we believe we have figured out the right mix of maintaining local company culture and entrepreneurship while leveraging the collective power of US LBM. We will never stop working to perfect the balance between these two key elements of our success, as neither approach should take precedence over the other.

As we transition to a public company, we will remain focused on the long-term potential of changing an industry and continuing what we have started. Over the past seven years, we have changed what many industry veterans think is possible in building materials distribution. Often times, we have even broken through the limits of what we thought was possible. The inherent transparency of going public is well aligned with our approach of using data for enhanced decision making and customer service. US LBM is built for the long haul, and I feel that going public is the best way for us to ensure that our focus remains on being the best company in our industry.

While going public is a transformative milestone in the history of our Company, it will not change our fundamental approach to the business. It is my utmost priority that we maintain the passion and feeling of ownership that makes US LBM so special.

We have been blessed with much success over the last seven years. The recognition and interest US LBM has received are no reason to let our foot off the gas or feel like we have achieved all of our goals. To the contrary, we feel like we're just getting started.

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To our employees, I want to thank each of you for all you do for US. To our prospective stockholders, we look forward to working to achieve the full potential of US LBM. Together, we can continue on our path to being the best company in our industry.

Sincerely,

L.T. Gibson
Founder, President and Chief Executive Officer

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BUSINESS

Our Company

We are one of the leading and fastest growing distributors of specialty building materials in the United States. We believe our differentiated operating model, technology capabilities and broad offering of specialty products enable us to distinguish ourselves from both local and national competitors within our industry. We serve as a critical link in the building materials supply chain, supplying more than 60,000 SKUs for custom homebuilders and specialty contractors. Our comprehensive portfolio of building materials includes specialty products such as windows, doors, millwork, roofing, siding, cabinetry and wallboard, as well as wood products, with specialty products comprising approximately 75% of the overall mix in 2016. We believe that our business units hold leading market positions in many of the local markets we serve. We have designed our operating model to leverage our scale and national platform, together with local expertise and relationships, to outperform our competitors.

Founded in 2009 as three business units with 16 locations, we have rapidly grown our business through acquisitions, market share gains and the opening of new greenfield locations. Since our founding, we have acquired over 40 companies and opened 19 new greenfield locations, expanding to 240 locations serving 29 states. Our founder-led management team continues to drive this multi-pronged growth strategy.

We serve as a critical link between our suppliers and our highly fragmented customer base of more than 30,000 homebuilders and specialty contractors serving the residential new construction, repair and remodel, or R&R, and commercial new construction end markets. We maintain key relationships with many of the largest manufacturers of building materials, allowing our local business units to take advantage of attractive pricing, rebates and other terms negotiated at the corporate level, while making the purchasing and inventory management decisions at the local level where product preferences can vary greatly by geography. Additionally, we facilitate purchasing relationships between our suppliers and our customers by transferring technical product knowledge, educating contractors on proper usage and installation techniques for new products, ensuring local product availability and extending trade credit vital to our local markets.

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We offer a comprehensive line of building materials with a significant mix of specialty products. In 2013, we launched our PLM initiative which consists of product-dedicated managers focused on driving the expansion of specialty products across our locations. This initiative has delivered significant benefits across our roofing, cabinetry, decking, siding, and fasteners product lines and we plan to implement the initiative across additional business units and product categories to drive profitable growth. From 2014 to 2016 our mix of specialty products increased as a percentage of net sales from approximately 69% to approximately 75%. The charts below summarize our 2016 net sales by product category, customer type, and end market.

Note:: Percentages may not foot due to rounding.

The table below summarizes our major product categories:

	Wood Products	Windows, Doors & Millwork	Wallboard & Metal Studs	Roofing & Siding	Engineered Components	Cabinetry	Hardlines & Other Products & Services

Description	• Dimensional lumber used for on-site framing • Engineered wood	• Wood and synthetic door and trim products • New and replacement window materials	• Wallboard used for finishing interior walls and ceilings, metal studs, tracks, headers and related products	• Asphalt, metal, tile and wood shake roofing materials • Siding products	• Floor and roof trusses and wall panels	• Kitchen and bathroom cabinetry, countertops and related products	• Various other smaller product categories and installation services
2016 net sales	$656.5 million	$500.4 million	$446.0 million	$285.1 million	$232.1 million	$193.3 million	$350.6 million
% of 2016 net sales	24.6%	18.8%	16.7%	10.7%	8.7%	7.3%	13.2%
Estimated National Addressable Market Size¹	$15.7 billion	$28.3 billion	$4.1 billion	$24.0 billion	$5.3 billion	$23.3 billion	$8.1 billion
Estimated Market Share¹	~4%	~2%	~11%	~1%	~4%	~1%	~4%
Primary End Markets	• Residential new construction • R&R	• Residential new construction • R&R • Commercial new construction	• Residential new construction • R&R • Commercial new construction	• Residential new construction • R&R • Commercial new construction	• Residential new construction • R&R	• Residential new construction • R&R • Commercial new construction	• Residential new construction • R&R • Commercial new construction
Select Suppliers	• Boise Cascade • Weyerhaeuser • BlueLinx • Georgia Pacific	• Andersen • Jeld-Wen • Masonite • Marvin	• National Gypsum • American Gypsum • Georgia Pacific • Continental Building Products	• CertainTeed • GAF • Owens Corning	• Mitek • ITW (Alpine)	• MasterBrand • Legacy • Dura Supreme	• Do it Best • Simpson Strong-Tie • PrimeSource Building Products

¹: Estimated National Addressable Market Size and Estimated Market Share based on independent research of Principia commissioned by us. Estimated National Addressable Market Size includes residential and commercial new construction as well as residential R&R.

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Our Industry

Residential New Construction (approximately 63% of 2016 net sales)

Residential new construction activity is driven by a number of factors, including the overall economic outlook, consumer confidence, employment, income growth, home prices, availability of mortgage financing, and interest rates. Within residential construction, approximately 48% of our net sales in 2016 were derived from single family home construction. According to the United States Census Bureau, United States single family housing starts increased 9.4% to 782 million in 2016 from 715 million in 2015. While single family housing starts increased for the fifth consecutive year in 2016, they remain well below historical levels. New residential single family housing starts of 782 million in 2016 remain 24.7% below their historical average of 1.04 million annual starts since 1970. Industry analysts expect that, over the long-term, single family housing starts will return to their historical average, which we believe will result in significant growth opportunities.

Housing Starts

Peak¹	1,716	782	934	54.4	%
Long-Term Average²	1,038	782	256	24.7	%
Average Cyclical Low³	798	782	16	2.1	%

Source: U.S. Census Bureau.

¹: Prior peak occurred in 2005.
²: Average since 1970.
³: Prior downturn troughs include 1975, 1982, 1991.

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Repair and Remodel (approximately 22% of 2016 net sales)

The R&R market is comprised of both residential and commercial R&R. The primary drivers of residential R&R spending include changes in existing home prices, existing home sales, the average age of the housing stock, consumer confidence and interest rates. According to the Joint Center for Housing Studies (LIRA model), homeowner improvement and repair spending reached $297 billion in 2016, which is an increase of 26.5% from $235 billion in 2012. We currently expect this trend to continue for at least the next several years, with JCHS estimating $317 billion of homeowner improvement and repair spending in 2017. While residential R&R activity is typically more stable than new construction activity, we believe the prolonged period of under-investment during the economic downturn will result in above-average growth for the next several years.

Commercial R&R spending is primarily driven by commercial real estate prices and rental rates, office vacancy rates, government spending, and interest rates. Commercial R&R spending is also driven by commercial lease expirations and renewals, as well as tenant turnover. Such events often result in repair, reconfiguration and/or upgrading of existing commercial space. As such, the commercial R&R market has historically been less cyclical than commercial new construction.

Commercial New Construction (approximately 12% of 2016 net sales)

Our commercial markets include offices, hotels, retail stores and other commercial buildings, as well as institutional facilities, such as schools, healthcare facilities and government buildings. Principal demand drivers across these markets include the overall economic outlook, government spending, vacancy rates, employment trends, interest rates and the availability of financing. Given the depth of the last recession, despite the growth to date, activity in the commercial construction market remains well below average historical levels. According to Dodge Data & Analytics (www.construction.com), new commercial construction square footage put in place was 946 million square feet in 2016, which is an increase of 39.3% from 680 million square feet in 2010. However, new commercial construction square footage put in place of 946 million square feet in 2016 remains 25.3% below the historical market average of 1,267 million square feet annually since 1970. We believe this represents a significant opportunity for growth as activity continues to improve.

Our Competitive Strengths

We believe that we will continue to benefit significantly from the following competitive strengths:

Market leader with significant scale advantages

We are one of the leading specialty building materials distributors in the United States, and we believe that our business units hold leading market positions in many of the local markets we serve. We believe that our local go-to-market strategy and leading market positions enable us to drive local relationships and generate strong customer loyalty, while our scale and national platform provide us with significant advantages relative to local, independent distributors that are typically our main competitors, including:

•: broad specialty product offering designed to create a one-stop-shop for our customers;
•: advantageous purchasing and sourcing, capitalizing on economies of scale and significant investment in pricing and procurement analysis;
•: integrated and scalable technology platform combining a sophisticated ERP system, logistics and mobile capabilities, which enables us to streamline our operations, reduce cost and deliver superior service to enhance customer relationships;

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•: substantial investment focused on continuous operational improvement, including through our US1 professional development programs, which utilize "Lean" and "Six Sigma" initiatives to further drive business efficiency and enhance customer satisfaction; and
•: recruiting, training and retaining top talent through our specialized programs, such as our internal training program US LBM University, and strong financial incentives tied to operational performance.

Proven track record of market share gains

•: Local go-to-market strategy. In addition to retaining local brands, our business units operate locally and tailor their product and service offerings to the local preferences of the markets they serve and leverage local relationships to generate strong customer loyalty. We believe this local go-to-market strategy enhances our ability to drive market share gains.
•: Product Line Manager initiative. In 2013, we launched our PLM initiative which focuses on driving the expansion of specialty product penetration in our existing locations. This initiative has delivered significant benefits across our roofing, cabinetry, decking, siding and fasteners product lines and we plan to implement the initiative across additional business units and product categories to drive profitable growth.
•: Customer focused technology platform. Our technology platform drives business generation and customer loyalty through improved reliability, enhanced service and tools to more efficiently order and monitor products and deliveries on a real-time basis. Further, our data-driven management allows us to identify and maximize growth opportunities across our locations and customer base.

Demonstrated ability to acquire and integrate businesses units

Integrated and scalable technology infrastructure

We focus on the use of technology to improve customer service and productivity. We believe that our technology initiatives have increased our profitability, further strengthened customer loyalty and differentiates us from our competitors. Our integrated technology infrastructure enables us to access and analyze real-time data across our business which in turn drives improved operations and financial performance. We believe our customized mobile application enhances customer loyalty by making us

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easier to do business with through the combination of promotions, real-time delivery status, delivery photo tracking, order history and purchasing functionality in a user-friendly interface. Our integrated technology platform includes:

•: Integrated ERP system. We utilize a comprehensive ERP system to coordinate activities within and across our business units, including sales activities, purchasing, inventory management, document management, accounts receivable and accounts payable activities. We believe that this integrated system provides significant operational benefits as well as an ability to drive improved profitability.
•: Cloud-based logistics technology systems. Our cloud-based dispatch and delivery planning technology enhance our local teams' ability to manage operations by optimizing delivery schedules and providing fleet and inventory management, which is designed to drive margin improvement.
•: Customized mobile platform. We provide our customers with a customized mobile application that allows them to receive delivery schedules, alerts when deliveries have been made to the job site and proof of delivery. We believe we are an early adopter of a customer mobile application in our industry, and we expect our mobile platform to be a key competitive advantage.

Strategic diversity across products, customers, suppliers and markets

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Superior financial performance

Our comparable location sales growth outpaced the relevant addressable market by an average of 704 basis points annually during the last five years, as illustrated in the chart below.

Note:: Reflects US LBM comparable location sales growth. Market growth is the combined growth of our product categories in the United States and based on independent research of Principia commissioned by us. May not foot due to rounding.

In addition, we have consistently achieved strong margins due primarily to our favorable specialty product mix, differentiated business model and our long-term custom homebuilder and R&R contractor relationships, among other factors. From 2012 through 2016, we have increased our gross margin and Adjusted EBITDA margin by 206 and 439 basis points, respectively, resulting in gross margin and Adjusted EBITDA margin of 28.0% and 7.1%, respectively, for fiscal year 2016.

Experienced management team that is aligned with stockholders

Our senior management team has an average of over 20 years of relevant experience. Our Chief Executive Officer and founder, L.T. Gibson, has over 25 years of experience in the industry as does our Chief Operating Officer, Jeff Umosella. Consistent themes across our management team are strong industry experience and a proven track record of financial and operational excellence, as well as a determined focus on team chemistry and operational efficiency. This management approach is centered on an active presence in the field and sharing of best practices across our business units. Since our founding, our management team has successfully acquired and integrated over 40 companies that have allowed us to grow net sales while expanding margins.

Further, through incentivized compensation structures and our employees' significant equity ownership in the Company, we have been able to retain top talent and ensure our local management teams are invested in the success of our company. Prior to this offering, our management and business unit leadership account for approximately 10.7% of our equity ownership (assuming conversion of all outstanding LLC Interests).

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Our Strategy

Our objective is to strengthen our competitive position and increase stockholder value through the following key strategies:

Grow market share within our existing geographic markets

•: PLM Initiative. One of our core management growth initiatives is focused on cross-selling our diverse set of specialty products across our entire platform. Our PLM initiative consists of product-dedicated managers who assist local business units to coordinate purchasing, sales and marketing efforts in their respective product lines, which is designed to drive greater product penetration and profitable growth. Our current product categories with a designated PLM include roofing, cabinetry, decking, siding and fasteners, and in the near term we expect to add additional categories, including wallboard, to capitalize on extensive product knowledge and supplier relationships gained from recent acquisitions. We continue to demonstrate strong momentum in the locations that have fully implemented our PLM initiative, and we plan to continue to implement our PLM initiative across our business units and expand into additional product categories to drive profitable growth.
•: Technology Platform. We are also focused on leveraging our integrated technology platform to increase engagement across our customer base. Our new customer mobile application enables our customers to input orders and download billing statements, track orders and deliveries and receive 24/7 access to product availability. It also alerts our customers to new promotions and allows them to view, share and register for company sponsored events. We are focused on increasing customer utilization of our mobile platform which we believe will drive business generation and enhanced customer loyalty. We also plan to leverage our data-driven management to identify and capitalize on new growth opportunities.

Accelerate growth by selectively executing acquisitions and opening new greenfield locations

We believe that significant opportunities exist to expand our market share and geographic footprint by executing selective acquisitions and opening new greenfield locations.

•: Selective acquisitions. We will continue to selectively pursue strategic acquisitions to supplement our organic growth. Due to the large, highly fragmented nature of our industry, we believe we have a robust acquisition pipeline that our management is continually cultivating. We selectively pursue independent distributors that are culturally compatible and meet our growth and business model criteria. We typically target independent distributors that already hold leading market positions in the local markets they serve. We believe our industry reputation, our demonstrated ability to successfully integrate acquisitions, and our entrepreneurial culture allow us the opportunity to review a large percentage of acquisition opportunities that come to market and be selective on the acquisitions we do pursue.

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acquisitions. In addition, our diverse product offering and our ability to source and stock specialty building products at our new acquisitions presents significant cross-selling opportunities. For example, our acquisitions of Feldman Lumber Company, Wallboard Supply Company and Rosen Materials have significantly enhanced our scale in the wallboard and metal studs product category, enabling us to secure improved wallboard pricing for many of our other business units. In addition, our broad product offering enables us to cross-sell additional products through acquired companies which such companies did not previously sell.

•: New greenfield locations. Our strategy for opening new greenfield locations is to further penetrate markets that are adjacent to our existing operations. Since our founding, we have opened 19 new greenfield locations. Typically, we have pre-existing customer relationships in these markets but need a new location to capitalize fully on those relationships and to facilitate further expansion of our customer base. Relative to our size and scale, the capital investment required to open a new facility is usually small, and new greenfield locations typically achieve positive EBITDA in their first year. Additionally, we strive to align the opening of new greenfield locations with our PLM initiative to accelerate growth in specialty product categories. For example, we opened three new greenfield locations after acquiring Hines Supply, which enabled us to leverage Hines' strong relationships in local markets and complement our strategy to drive significant net sales growth and gross margin expansion.

Achieve improved financial performance through implementation of operational initiatives

Over the past five years, we have increased our gross margin and Adjusted EBITDA margin by 206 and 439 basis points, respectively. We intend to further improve our margins by continuing to execute on our operational initiatives and leverage our scale and resources to optimize our operations. For example, we have recently implemented initiatives focused on procurement and pricing. Our procurement initiative is focused on enhancing our position with key suppliers, coordinating product category spending and realizing cost savings through optimizing our purchasing. We have also developed a pricing framework supported by an analytics-driven pricing model that is customized for each business unit to optimize price and margins based on customer profile and purchasing history. To date, our procurement and pricing initiatives have resulted in approximately $5 million of savings and we believe that these areas represent significant opportunities for the Company and that these initiatives will continue to strengthen our relationships with vendors and customers, enhance top-line growth and further improve our margin profile.

Continue to invest in attracting, training and retaining top quality employees

We believe our growth will be driven by the quality of our employees and our ability to continuously develop talent. We spend considerable time and resources training our employees across all major functions of our operations. In addition to recruiting and training, we have developed an extensive leadership training program focused on promoting financial acumen, operational best practices and safety expertise. More than 3,500 associates have completed courses in our US1 "Lean" and "Six Sigma" programs to date, including over 100 "Six Sigma" certified "green belts" and five "black belts" (as described in "—Training and Development" below). We believe the investment we make in developing talent is critical to supporting our growth strategy and fostering an entrepreneurial

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culture, resulting in many of our existing managers being promoted from within our organization. We also believe that our size, scale and ongoing growth provides employees with outstanding career advancement opportunities, which further enables us to recruit and retain top talent.

Products

We provide a comprehensive product offering of building materials for custom homebuilders and specialty contractors, carrying more than 60,000 SKUs. By carrying a full line of products sourced through our network of key suppliers, our business units are able to serve as a one-stop-shop for custom homebuilders and specialty contractors.

We group our building products and services into seven product categories: wood products; windows, doors & millwork; wallboard & metal studs; roofing & siding; engineered components; cabinetry; and hardlines & other products & services.

Wood products (approximately 24.6% of 2016 net sales). The wood products category is primarily composed of lumber used in on-site house framing. Products include dimensional lumber (southern pine, spruce-pine-fir, douglas fir, and hem-fir) of various quality grades and engineered wood products (e.g., manufactured structural beams) that in many cases we design and cut for an individual project. We believe we are largely shielded from rising commodity costs in this category as a result of the alignment of our inventory management strategy with our pricing methodology.

Windows, doors & millwork (approximately 18.8% of 2016 net sales). The windows, doors & millwork category is composed of both wood and synthetic elements and includes windows, interior doors, interior trim, custom millwork, moldings, stairs and stair parts and other products that are used primarily inside the home. Sales of these products generally require a higher degree of product knowledge and training, and thus typically result in higher margins.

Windows materials include new and replacement wood, aluminum, vinyl, fiberglass and clad window options. Selecting, designing and managing the procurement of the proper window package for both architectural and performance reasons are key services we provide our customers.

Wallboard & metal studs (approximately 16.7% of 2016 net sales). The wallboard & metal studs category is composed of various types of wallboard used to finish interior walls and ceilings in residential, R&R, and commercial construction projects, including standard (residential), fire-rated (commercial), foil-baked, lead-lined, moisture-resistant, mold-resistant and vinyl-covered wallboard, and metal studs, tracks, headers and related products for wallboard framing.

Roofing & siding (approximately 10.7% of 2016 net sales). The roofing & siding category is composed of products designed to meet both residential and commercial needs. Roofing products include, among others, asphalt, metal, tile, and wood shake. Siding products include vinyl, steel, aluminum, fiber cement composite and related items such as soffit and design accessories. This category has historically been less correlated with the new construction market as roofing sales are largely driven by replacement demand.

Engineered components (approximately 8.7% of 2016 net sales). The engineered components category is primarily composed of factory built substitutes for job-site framing. These structural components include floor trusses, roof trusses and wall panels. Roof trusses, floor trusses and wall panels are built in a factory controlled environment. Without structural components, builders construct these items on site, where weather and variable labor quality can negatively impact costs, construction quality and project time.

In addition to increased efficiency and improved quality, a primary benefit of using structural components is shortening installation time, limiting job-site waste and clutter and minimizing the amount of skilled labor that must be sourced.

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Cabinetry (approximately 7.3% of 2016 net sales). The cabinetry category is composed of products designed to meet residential and commercial new construction needs as well as the R&R market. Cabinetry products include kitchen and bathroom cabinetry, countertops and related hardware and accessories. Our business units carry a diverse portfolio of cabinetry products including traditional wood, acrylic, veneers, 3D laminated and textured Melamine's. In addition, many of our business units provide installation services for this product category.

Hardlines & other products & services (approximately 13.2% of 2016 net sales). The hardlines & other products & services category consists of various other products and services, including specialty products such as fasteners and decking & railing. This category also includes professional installation services across our product categories. Through our installation services program, we offer scheduling, supplier and subcontractor management, and other services to many of our customers.

Customers and Suppliers

Customers

Our diverse customer base consists of more than 30,000 custom and large homebuilders, professional remodelers, multi-family contractors and commercial contractors. During 2016, no single customer accounted for more than 2% of our net sales, and our top ten customers collectively accounted for less than 10% of our net sales. Our customers are typically high volume, repeat buyers that often require both a broad product offering and specialized services, including job-site delivery, volume purchasing, trade credit, technical expertise, estimating services and product installation. Our local sales and service professionals work very closely with our customers, often on a day-to-day basis, in order to help them scope, specify, bid, construct and complete their projects in a timely and successful manner.

Suppliers

Our leading market position and extensive geographic footprint has allowed us to develop strong relationships with some of the largest and most well-known manufacturers and suppliers of building materials, including National Gypsum Company, Boise Cascade Company, Andersen Corporation, CertainTeed Corporation and GAF Materials. No single supplier accounted for more than 5% of our total costs in 2016. Because we often account for a meaningful portion of their sales volumes and provide them with an extensive salesforce to market their products, we are viewed by our suppliers as a key distribution partner. We believe this position provides us with advantaged procurement opportunities as suppliers compete to gain and maintain our business, an advantage we expect will grow as we continue to gain market share.

In making purchasing decisions we bring together the best practices of a large national distributor network with local market expertise. We believe maintaining the flexibility to utilize both volume pricing at an organization-wide level and take advantage of local product "deals" allows us to lower our overall costs as compared to both local and national competitors.

Our Technology

We believe our integrated and scalable technology platform provides significant benefits to our customers and differentiates us from our competitors. The three core aspects of our technology platform are highlighted below.

•: Integrated ERP system. We utilize a comprehensive ERP system to coordinate activities within and across our business units, including sales activities, purchasing, inventory management, dispatch and delivery, document management, accounts receivable and accounts payable activities, special ordering and marketing. The ERP system provides a foundation for our

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logistics and mobile technologies which are tightly integrated via proprietary systems. We believe that this integrated system across our business units provides significant operational benefits as well as an ability to drive improved profitability. We are currently converting certain operating divisions acquired during the past two years and anticipate to be fully operational within our ERP environment by the first quarter of fiscal year 2018.

•: Cloud-based logistics technology systems. Our dispatch and delivery planning technology allows our local teams to more effectively manage operations through the ability to optimize delivery schedules as well as real time fleet and inventory management, all of which are designed to drive margin improvement.
•: Customized mobile platform. We provide our customers with a customized mobile application that allows them to access invoice information and receive delivery schedules, alerts when deliveries have been made to the job site and proof of delivery. We believe we are an early adopter of a customer mobile application in our industry, and we expect our mobile platform to be a key competitive advantage.

Sales and Marketing

Our sales and marketing strategy is to provide a comprehensive set of high-quality products and superior services to contractors and homebuilders reliably, safely, competitively priced and on-time. We have a highly experienced sales force of more than 1,600 people who manage our customer relationships at the local level and continuously strive to grow our customer base. Our sales and marketing strategy is centered on building and maintaining strong customer relationships rather than traditional marketing and advertising techniques. We strive to add value for the homebuilders through superior quality of products and services, lower material costs and faster project completion. We believe the experience and expertise of our salesforce differentiates us from our competitors and is highly valued by our customers, generating significant customer loyalty.

Competition

We believe that our business units hold leading market positions in many of the local markets we serve. Our business units compete against primarily small, regional or local, building materials distributors and big box retailers. We also compete against a small number of large national and specialty distributors, including ABC Supply, Beacon Roofing Supply, BMC Stock Holdings, Builders FirstSource, GMS and Foundation Building Materials. However, we believe regional, local and independent competitors still comprise more than 60% of the United States building materials distribution market.

The principal form of competition in our business includes, but is not limited to, developing long-term relationships with professional homebuilders and contractors and retaining such customers by delivering a comprehensive suite of high-quality products in a timely, safe and efficient manner and offering trade credit, competitive pricing, technical product knowledge and expertise, and integrated service and product packages, as well as offering value-added products and services such as structural components and installation.

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Employees

As of March 31, 2017, we had approximately 7,300 employees, of which less than 5% were affiliated with labor unions. We believe we have good relations with our employees.

Training and Development

We believe the training provided through our leadership development programs, including US LBM University, US1, and Pulse Leadership Development, together with our entrepreneurial culture and performance based compensation structure, provides significant benefits to our employees and the business.

US LBM University is an internal culture and values program led by the US LBM executive leadership team. This foundational course sets the stage for all other learning opportunities offered including US1 "continuous improvement", Action selling, Pulse Leadership Development and Xtreme truss training. These programs are multi-day learning experiences, including classroom learning, case studies, role plays, action planning and coaching.

Beginning in 2014, our US1 training was developed in partnership with the University of Wisconsin. US1 teaches advanced tools for implementing and sustaining operational and financial improvements through data collection and analysis. US1 training enables associates to achieve "belts" reflecting mastery of knowledge following various levels of course instruction. Ranging from half-day courses to six days of classroom instruction and relevant project work, each level's "belt" is achieved through formal assessments administered at the end of each course. To date, these programs have resulted in over 100 certified green belts, approximately 400 certified yellow belts, and over 3,500 white belts.

US LBM Pulse is a year-long leadership development experience including immersion learning, leadership assessments, coaching, action planning and a formal mentor program. US LBM Pulse is aimed at managers who have the ability and aspiration to continue to be promoted within the organization. The program's content focuses on innovative thinking and change management in addition to leadership.

Properties

Facilities

We operate our business through 240 operating locations, across 29 states. In addition to our operating locations, we own or lease over 100 additional properties that are used as showrooms, manufacturing facilities or back office functions for our business. The covered square footage of our warehouses is equal to an aggregate of approximately seven million square feet. As of May 1, 2017, we owned 22 of our operating locations and leased the remaining 218 operating locations. Our leased facilities typically have an initial operating lease term of five to 10 years and most provide options to renew for specified periods of time. A majority of our leases provide for fixed annual rentals, certain of

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which include provisions for escalating rent based on changes in the Consumer Price Index or other measures of inflation.

As of May 1, 2017, our 240 operating locations were located in the following states:

State	Locations	State	Locations

Alabama	2	Missouri	1
Arkansas	12	Nevada	6
California	4	New Hampshire	2
Connecticut	7	New Jersey	21
Florida	31	New York	9
Georgia	6	North Carolina	1
Illinois	12	North Dakota	1
Indiana	2	Pennsylvania	16
Iowa	5	South Carolina	4
Kentucky	4	South Dakota	3
Maine	2	Texas	19
Maryland	3	Utah	1
Massachusetts	2	Vermont	5
Michigan	13	Wisconsin	27
Minnesota	19	Total	240

Fleet

We maintain a dedicated fleet of approximately 1,950 owned and leased light, medium, and heavy duty delivery and product installation vehicles. Our fleet is made up of approximately 970 heavy duty vehicles of which over 310 trucks are equipped with articulating boom loaders, over 350 are tractors and over 310 are straight trucks with a flat-bed. The remainder of our fleet is made up of over 500 medium duty vehicles and over 400 light duty vehicles that are either flat beds, vans, or pickup trucks. Our fleet can generally be transferred across our location network based upon changes in demand. We own approximately 95% of our fleet vehicles, while our leased fleet currently accounts for the remaining 5%. The average useful life of our light, medium and heavy duty delivery and product installation vehicles vary from four to ten years and we expect to replace approximately 8% of these vehicles this year.

Seasonality

Government Regulations

While we are not engaged in a "regulated industry," we are subject to various federal, state and local government regulations applicable to businesses generally in the jurisdictions in which we operate, including laws and regulations relating to our relationships with our employees, workplace health and safety, transportation, zoning and fire codes. We strive to operate each of our locations in accordance with applicable laws, codes and regulations.

Our operations are also subject to the regulatory jurisdiction of the DOT and FMCSA, which have broad administrative powers with respect to our transportation operations. We are subject to safety requirements governing interstate operations prescribed by the DOT. Vehicle dimension and driver hours of service also are subject to both federal and state regulation. See "Risk Factors—Risks Related to Our Business—Federal, state, local and other regulations could impose substantial costs and

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restrictions on our operations that would reduce our net income." Our operations are also subject to the regulatory jurisdiction of Occupational Safety and Health Administration, which has broad administrative powers with respect to workplace and jobsite safety.

US LBM HOLDINGS, INC. S-1