<PAGE>

                          SECURITIES AND EXCHANGE COMMISSION
                               WASHINGTON, D.C.  20549

                                      FORM 10-Q


_X_  Quarterly report under Section 13 or 15(d) of the Securities Exchange Act
     of 1934

For the quarterly period ended   September 30, 1998    or
                                --------------------
___  Transition report pursuant to Section 13 or 15(d) of the Securities
     Exchange Act of 1934

For the transition period from ________________ to ________________

Commission file number 0-19335


                       BUILDING MATERIALS HOLDING CORPORATION


Delaware                                         91-1834269
(State of other jurisdiction of                  (IRS Employer
incorporation or organization)                   Identification No.)


                      Building Materials Holding Corporation
        One Market Plaza, Steuart Tower, Ste 2650, San Francisco, CA  94105
                             Telephone:  (415)227-1650


Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 month (or for such shorter period that the registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days.

Yes __X__ No _____


          Class                                   Shares Outstanding as
          -----                                   of November 1, 1998:

          Common stock $.001 par value            12,643,439
                                                  ----------

<PAGE>

                        BUILDING MATERIALS HOLDING CORPORATION

                                        INDEX


<TABLE>
<CAPTION>
                                                                        Page
                                                                       Number
                                                                       ------
<S>                                                                    <C>
PART I -- FINANCIAL INFORMATION

      Item 1 - Financial Statements

      Condensed Consolidated Statements of Income for the three and
      nine months ended September 30, 1998 and 1997                       4

      Condensed Consolidated Balance Sheets as of September 30,
      1998 and December 31, 1997                                          5

      Condensed Consolidated Statements of Cash Flows for the nine
      months ended September 30, 1998 and 1997                            6

      Notes to Condensed Consolidated Financial Statements                7

      Item 2 - Management's Discussion and Analysis of Financial
      Condition and Results of Operations                                10

PART II -- OTHER INFORMATION

      Item 1 - Legal Proceedings                                         17

      Item 4 - Submission of Matters to a Vote of Security Holders       18

      Item 5 - Other Information                                         18

      Item 6 - Exhibits and Reports on Form 8-K                          18

SIGNATURES                                                               19

INDEX TO EXHIBITS                                                        20

EXHIBITS                                                                 21
</TABLE>

                                     2

<PAGE>

PART I - FINANCIAL INFORMATION

The condensed consolidated financial statements included herein have been
prepared by Building Materials Holding Corporation ("BMHC" or the "Company")on a
consolidated basis, without audit, pursuant to the rules and regulations of the
Securities and Exchange Commission.  BMHC was formed on September 23, 1997 in a
holding company reorganization in which BMC West Corporation, the former
registrant, became a wholly owned subsidiary of BMHC.  This new structure was
adopted to centralize certain administrative functions as the Company expands
its participation in the consolidation of the contractor focused building
materials distribution industry.  All references to the "Company" will mean BMHC
on a consolidated basis if referring to periods after September 23, 1997, or BMC
West Corporation for all preceding periods.

In the opinion of management, all adjustments necessary to present fairly the
financial results for the periods presented have been included.  The adjustments
made were of a normal, recurring nature.  Certain information and footnote
disclosures normally included in the consolidated financial statements have been
condensed or omitted pursuant to the rules and regulations of the Securities and
Exchange Commission, although the Company believes that the disclosures are
adequate to make the information presented not misleading.  It is recommended
that these condensed consolidated financial statements be read in conjunction
with the audited consolidated financial statements and notes thereto included in
the Company's 1997 Annual Report.

Due to the seasonal nature of BMHC's business, the condensed consolidated
results of operations and resulting cash flows for the periods presented are not
necessarily indicative of the results that might be expected for the fiscal
year.



                                     3

<PAGE>

                        BUILDING MATERIALS HOLDING CORPORATION
                     CONDENSED CONSOLIDATED STATEMENTS OF INCOME
                        (In Thousands, Except Per Share Data)

<TABLE>
<CAPTION>
                                        Three Months Ended            Nine Months Ended
                                     Sept. 30,      Sept. 30,      Sept. 30,      Sept. 30,
                                       1998           1997           1998           1997
                                     --------       --------       --------       --------
<S>                                  <C>            <C>            <C>            <C>
Net sales                            $249,757       $201,950       $659,405       $539,335

Cost of sales                         188,649        155,513        499,728        415,121
                                     --------       --------       --------       --------
Gross profit                           61,108         46,437        159,677        124,214

Selling, general and
 administrative expense                47,763         37,717        132,722        105,462

Other income                              220            487          1,044          1,378
                                     --------       --------       --------       --------
Income from operations
                                       13,565          9,207         27,999         20,130

Interest expense                        2,547          2,245          7,718          6,695
                                     --------       --------       --------       --------
Income before income taxes             11,018          6,962         20,281         13,435

Income taxes                            4,295          2,750          7,954          5,307
                                     --------       --------       --------       --------
Net income                           $  6,723       $  4,212       $ 12,327       $  8,128
                                     --------       --------       --------       --------
                                     --------       --------       --------       --------
Net income per common share:
Basic                                   $0.53          $0.36          $0.99          $0.69
                                     --------       --------       --------        -------
                                     --------       --------       --------        -------
Diluted                                 $0.53          $0.35          $0.98          $0.67
                                     --------       --------       --------       --------
                                     --------       --------       --------       --------
</TABLE>

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

                                     4

<PAGE>

                        BUILDING MATERIALS HOLDING CORPORATION
                        CONDENSED CONSOLIDATED BALANCE SHEETS
                          (In Thousands, Except Share Data)

<TABLE>
<CAPTION>
                                                           September 30,    December 31,
                                                                1998            1997
                                                           -------------    ------------
<S>                                                        <C>              <C>
ASSETS
Current assets
   Cash                                                        $10,588       $   8,177
   Receivables, net                                            104,361          84,872
   Inventories                                                  83,940          78,162
   Deferred income tax benefit                                   2,132           2,131
   Prepaid expenses                                              1,221           3,481
                                                              --------        --------
      Total current assets                                     202,242         176,823

Property, plant and equipment, net                             133,845         118,240
Deferred loan costs                                                983           1,324
Goodwill, net                                                   38,480          38,193
Other                                                            5,363           5,793
                                                              --------        --------
Total assets                                                  $380,913        $340,373
                                                              --------        --------
                                                              --------        --------
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities
   Current portion of long-term debt                          $      0        $  1,150
   Accounts payable                                             51,186          43,204
   Accrued compensation                                          9,016           6,469
   Sales tax payable                                             4,314           3,398
   Other accrued expenses                                       12,763           3,990
                                                              --------        --------
      Total current liabilities                                 77,279          58,211

Long-term debt, net of current portion                         118,700         113,410
Deferred income taxes                                            4,722           4,722
Other long-term liabilities                                      2,873           3,079


Shareholders' equity
   Common stock, $.001 par value, 20,000,000
    shares authorized, 12,643,439 and 12,331,088
    shares outstanding at Sept. 30, 1998 and
    December 31, 1997, respectively                                 13              12
   Additional paid-in capital                                  108,165         104,107
   Retained earnings                                            69,161          56,832
                                                              --------        --------
      Total shareholders' equity                               177,339         160,951
                                                              --------        --------
Total liabilities and shareholders' equity                    $380,913        $340,373
                                                              --------        --------
                                                              --------        --------
</TABLE>

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

                                     5

<PAGE>

                        BUILDING MATERIALS HOLDING CORPORATION
                   CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
                                    (In Thousands)

<TABLE>
<CAPTION>
                                                                Nine Months Ended
                                                            Sept. 30,        Sept. 30,
                                                              1998             1997
                                                            ---------        ---------
<S>                                                         <C>              <C>
CASH FLOWS FROM OPERATING ACTIVITIES
Net income                                                  $ 12,327         $  8,128
Adjustments to reconcile net income to cash
 provided by (used in) operating activities:
   Depreciation and amortization                               9,830            8,317
   Gain on sales of assets                                       (59)            (430)
   Stock option compensation                                      16               --
   Provision for other long-term liabilities                    (206)              --
Changes in working capital items, net of
 Effects of acquisitions and divestitures                      2,982            2,989
Other                                                             10             (559)
                                                            --------         --------
Net cash provided by operating activities                     24,900           18,445
                                                            --------         --------
CASH FLOWS FROM INVESTING ACTIVITIES
Purchases of property and equipment                          (14,210)          (9,927)
Payments for acquisitions                                    (13,076)         (10,259)
Proceeds from sales of property and equipment                    615            1,337
                                                            --------         --------
Net cash used in investing activities                        (26,671)         (18,849)
                                                            --------         --------
                                                            --------         --------
CASH FLOWS FROM FINANCING ACTIVITIES
Repayment of note payable                                         --             (561)
Net borrowings under revolving credit agreements               5,290            1,920
Redemption of Class B preferred stock                             --           (1,000)
Principal payments on debt                                    (1,124)              --
Financing costs                                                   --             (201)
Other                                                             16              (84)
                                                            --------         --------
Net cash provided by financing activities                      4,182               74
                                                            --------         --------
                                                            --------         --------
Net increase (decrease) in cash                                2,411             (330)
Cash, beginning of period                                      8,177            7,066
                                                            --------         --------
Cash, end of period                                         $ 10,588         $  6,736
                                                            --------         --------
                                                            --------         --------
SUPPLEMENTAL CASH FLOW INFORMATION:
Cash paid during the year for -
   Interest                                                 $  5,743         $  5,060
   Income taxes                                             $  2,765         $  4,019
</TABLE>

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

                                     6

<PAGE>

                        BUILDING MATERIALS HOLDING CORPORATION
                NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

1.   WORKING CAPITAL CHANGES

Changes in working capital items, net of acquisitions, for the nine months ended
September 30, 1998 and 1997 are as follows (in thousands):

<TABLE>
<CAPTION>
                                                      1998            1997
                                                    --------        --------
<S>                                                 <C>             <C>
(Increase)in accounts receivable                    $(15,905)       $(16,512)
(Increase)decrease in inventories                     (2,890)          9,495
Decrease in prepaid expenses                           2,267             958
Increase in accounts payable and accrued
 expenses                                             17,865           7,413
Increase in interest payable                           1,645           1,635
                                                    --------        --------
                                                    $  2,982        $  2,989
                                                    --------        --------
                                                    --------        --------
</TABLE>

2.   LONG-TERM DEBT
Long-term debt consisted of the following(in thousands):

<TABLE>
<CAPTION>
                                                 September 30,  December 31,
                                                     1998           1997
                                                 -------------  ------------
<S>                                              <C>            <C>
Revolving credit agreement borrowings              $ 40,000       $ 34,710
9.18% unsecured senior notes                         50,000         50,000
8.10% unsecured senior notes                         25,000         25,000
Other                                                 3,700          4,850
                                                   --------       --------
                                                    118,700        114,560
     Less current portion                                --          1,150
                                                   --------       --------
                                                   $118,700       $113,410
                                                   --------       --------
                                                   --------       --------
</TABLE>

During the third quarter of 1998, BMHC renegotiated its revolving credit
agreement with Wells Fargo Bank.  The amended and restated credit agreement was
effective September 30, 1998 and expires February 29, 2000.  The amended and
restated revolving credit agreement increased the Company's borrowing capacity
from $70 million under the previous revolving credit agreement to $100 million
for the period September 30, 1998 to March 31, 1999.  After March 31, 1999, the
borrowing capacity will return to $70 million until the revolving credit
agreement's expiration on February 29, 2000.  Other conditions and covenants
related to limitations on capital expenditures and 

                                     7

<PAGE>

operating leases were also changed to allow more flexibility for the Company 
in meeting its operating needs.

3.   EARNINGS PER SHARE

Earnings per share was determined as follows:

<TABLE>
<CAPTION>
                                                Three Months Ended                     Nine Months Ended
                                          ------------------------------         ------------------------------
                                          September 30,    September 30,         September 30,    September 30,
                                              1998             1997                  1998              1997
                                          -------------    -------------         -------------    -------------
<S>                                       <C>              <C>                   <C>              <C>
COMPUTATION OF BASIC
 EARNINGS PER SHARE:
Net income                                 $6,723,000       $4,212,000            $12,327,000       $8,128,000
Class B preferred stock accretion                  --               --                     --           (6,500)
                                           ----------       ----------            -----------       ----------
Net income available to common
 shareholders                              $6,723,000       $4,212,000            $12,327,000       $8,121,500
                                           ----------       ----------            -----------       ----------
                                           ----------       ----------            -----------       ----------
Weighted average shares outstanding        12,642,656       11,833,728             12,463,589       11,830,365
                                           ----------       ----------            -----------       ----------
                                           ----------       ----------            -----------       ----------
BASIC EARNINGS PER SHARE                        $0.53            $0.36                  $0.99            $0.69
                                           ----------       ----------            -----------       ----------
                                           ----------       ----------            -----------       ----------
COMPUTATION OF DILUTED
 EARNINGS PER SHARE:
Net income available to common
 shareholders                              $6,723,000       $4,212,000            $12,327,000       $8,121,500
                                           ----------       ----------            -----------       ----------
                                           ----------       ----------            -----------       ----------
Weighted average shares outstanding        12,642,656       11,833,728             12,463,589       11,830,365


Net effect of dilutive stock options
 based on the treasury stock method using
 average market price                         142,530          218,188                145,973          216,131
                                           ----------       ----------            -----------       ----------
Weighted average diluted shares
 outstanding                               12,785,186       12,051,916             12,609,562       12,046,496
                                           ----------       ----------            -----------       ----------
                                           ----------       ----------            -----------       ----------
DILUTED EARNINGS PER SHARE                      $0.53            $0.35                  $0.98            $0.67
                                           ----------       ----------            -----------       ----------
                                           ----------       ----------            -----------       ----------
</TABLE>

                                      8

<PAGE>

4.   ACQISITIONS

     During the second and third quarters of 1998, the Company completed six
     acquisitions involving three building materials centers and seven value-
     added facilities located in Colorado, Montana, Oregon, Texas and
     Washington.  Three of the value-added facilities were integrated into
     existing operations.  The total consideration given was $17.3 million,
     consisting of $12.9 million in cash, 299,343 shares of common stock valued
     at $4.0 million, and $384,000 in the settlement of debt and other assumed
     operating liabilities.  The payment of the Company's common stock, 
     settlement of debt and other assumed operating liabilities are considered
     non-cash transaction for purposes of the Condensed Consolidated Statements
     of Cash Flows.




                                     9

<PAGE>

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

The following table sets forth for the periods indicated the percentage
relationship to net sales of certain costs, expenses and income items.  The
table and subsequent discussion should be read in conjunction with the condensed
consolidated financial statements and the notes thereto appearing elsewhere
herein and in the Company's Annual Report on Form 10-K for the year ended
December 31, 1997.

<TABLE>
<CAPTION>

                                      For The Three Months Ended           For The Nine Months Ended
                                      --------------------------           -------------------------
                                      Sept. 30,        Sept. 30,           Sept. 30,       Sept. 30,
                                        1998             1997                1998            1997
                                      ---------        --------            ---------       ---------
<S>                                   <C>              <C>                 <C>             <C>
Net sales                               100.0%           100.0%              100.0%          100.0%
Gross profit                             24.5             23.0                24.2            23.0
Selling, general and
  administrative expense                 19.1             18.7                20.1            19.6
Other income                               .1               .2                  .2              .3
Income from operations                    5.4              4.6                 4.2             3.7
Interest expense                          1.0              1.1                 1.2             1.2
Income taxes                              1.7              1.4                 1.2             1.0
Net income                                2.7              2.1                 1.9             1.5
</TABLE>

THIRD QUARTER OF 1998 COMPARED TO THE THIRD QUARTER OF 1997

Net sales for the three months ended September 30, 1998 were $249.8 million, up
23.7% from the third quarter of 1997 when sales were $202.0 million.  The
largest portion of this increase was due to acquisitions contributing $35.4
million.  The increase in net sales also resulted from a 7.1% increase over the
third quarter of 1997 in sales at facilities that operated for at least two
months in both the second quarter of 1997 and the second quarter of 1998 ("same-
store sales"). Sales in the quarter were positively affected by higher commodity
wood product prices.  The price increase contributed to an overall price
inflator of 2.5%, the effect of which increased sales by approximately $5.0
million.  Adjusting for the price inflation, real same-store sales increased
approximately 4.6% over the year-ago quarter.

Gross profit as a percentage of sales increased to 24.5% in the third quarter of
1998 from 23.0% in the third quarter of 1997, primarily as a result of on-

                                      10


<PAGE>

going efforts by the Company to improve margins through its increased focus 
on value-added products, such as roof trusses, pre-hung doors, millwork and 
pre-assembled windows.

Selling, general and administrative (SG&A) expense was $47.8 million in the
third quarter of 1998 as compared to $37.7 million in 1997, and increased as a
percentage of net sales from 18.7% in 1997 to 19.1% in 1998.  The Company
attributes this partially to increases in value-added sales that carry higher
SG&A expenses and integrating new operating locations that were not included in
the comparable period.

Interest expense of $2.5 million in the third quarter of 1998 increased from
$2.2 million in the same period of 1997, primarily due to increased borrowings
under the Company's revolving line of credit to support higher working capital
as a result of increased sales and acquisitions made during the previous 12
months.

Income taxes were provided at an estimated annual effective tax rate of 39.0%
for the period ended September 30, 1998 and 39.5% for the period ended
September 30, 1997.

As a result of the foregoing factors, net income increased by $2.5 million, or
59.6% to $6.7 million, or 2.7% of net sales in the third quarter of 1998, as
compared to $4.2 million, or 2.1% of net sales, in the third quarter of 1997.

FIRST NINE MONTHS OF 1998 COMPARED WITH THE FIRST NINE MONTHS OF 1997

Net sales for the nine months ended September 30, 1998 were $659.4 million, up
22.3% from the first nine months of 1997 when sales were $539.3 million. The
largest portion of this increase was due to acquisitions contributing $82.9
million.   The increase in net sales also resulted from an increase of 8.1% in
same-store sales, over the first nine months of 1997. Sales in the 1998 period
were negatively affected by lower commodity wood product prices.  Price
decreases contributed to an overall price deflator of 1.2%, the effect of which
decreased sales by approximately $6.5 million.  Excluding price deflation, same-
store sales increased 9.3%.

                                      11


<PAGE>

Gross profit as a percentage of sales improved to 24.2% in the first nine months
of 1998 from 23.0% in the first nine months of 1997, primarily as a result of on
going efforts by the Company to improve margins through its increased focus on
value-added products, such as roof trusses, pre-hung doors, millwork and pre-
assembled windows.

Selling, general and administrative (SG&A) expense, was $132.7 million in the
first nine months of 1998 as compared to $105.5 million in 1997, and increased
as a percentage of net sales to 20.1% in 1998 from 19.6% in 1997. The Company
attributes this partially to increases in value-added sales that carry higher
SG&A expenses and integrating new operating locations that were not included in
the comparable period.

Interest expense increased to $7.7 million in the first nine months of 1998 from
$6.7 million in the same period of 1997, primarily due to increased borrowings
under the Company's revolving line of credit to support higher working capital
as a result of increased sales and acquisitions made during the previous 12
months.

Income taxes were provided at an estimated annual effective tax rate of 39.2%
for the nine month period ended September 30, 1998 and 39.5% for the nine month
period ended September 30, 1997.

As a result of the foregoing factors, net income increased by $4.2 million, or
51.7% to $12.3 million, or 1.9% of net sales in the first nine months of 1998,
as compared to $8.1 million, or 1.5% of net sales, in the first nine months of
1997.

LIQUIDITY AND CAPITAL RESOURCES

At September 30, 1998 the Company had $118.7 million of long-term debt
outstanding, consisting of $78.7 million of term borrowings under fixed rate
notes, and $40 million of variable rate debt under the revolving credit
agreement.

                                      12


<PAGE>

In the first nine months of 1998, the Company generated $24.9 million of cash
from operating activities.  Working capital increased from $118.6 million at
December 31, 1997 to $125.0 million at September 30, 1998, due primarily to
increased sales and acquisitions made during the previous 12 months and due to
the seasonality in the Company's accounts receivable and inventories.

Based on its ability to generate cash from operations and the available
borrowing capacity at September 30, 1998 of $60 million under the revolving
credit agreement (availability of which is subject to the satisfaction of
certain customary borrowing conditions), the Company believes it will have
sufficient funds to meet its currently anticipated requirements.

YEAR 2000 SYSTEM ISSUE

     As is the case with most other companies, the Year 2000 computer problem
creates risks for BMHC.  However, the Company believes that the risks of the
Year 2000 computer problem are not as severe for the building materials industry
as compared to other more technology dependent industries, because the building
materials industry, in general, and the Company and its professional contractor
customers, in particular, are not as heavily dependent upon computerized
systems. Except for production of millwork and trusses, the Company is primarily
a distributor of building materials to its customers and is dependent upon rail
and truck transportation for timely receipt and delivery of inventory.  The
Company could be affected if its transportation suppliers are materially and
adversely affected by the Year 2000 computer problems.

     The following discussion summarizes management's present analyses and
proposed plans with respect to the anticipated material impacts of the Year 2000
computer problem on the Company's primary operations.  The discussion focuses on
"mission critical" systems, which management believes are important to the
Company's day to day functional operations.  The Year 2000 problem may also
impact systems that are not mission critical or information technology related.
These systems, which may include telephone, electronic mail, elevators, heating
and air conditioning equipment, and security will be tested 

                                      13


<PAGE>

and any problems addressed on a case-by-case basis, but none are expected to 
be material to the Company's results of operations or financial condition.  
It is expected that assessment, remediation and contingency planning 
activities will be on-going throughout 1998 and 1999 with the goal of 
appropriately resolving all significant internal systems and third party 
issues.

STATE OF READINESS

     BMHC has evaluated the impact of the Year 2000 computer problem on its
mission critical systems.  The mission critical systems that have been
identified are:

     -    The retail system software used in each of the operations for sales
          transactions, inventory and in-store accounting

     -    The corporate financial and accounting system

     -    The millwork configuration and order entry system

     -    The truss production and engineering system

     -    The payroll system, which is operated by a third party vendor


     Each of the five mission critical systems is in the process of becoming
Year 2000 compliant or management is verifying with the original vendor that the
existing systems are Year 2000 compliant.  The current status of the readiness
effort with respect to the five mission critical systems is as follows:

     -    The retail system is being upgraded in a two-step process that
          involves hardware and operating system improvements that were
          originally scheduled for 1998.  The upgrade process is well underway,
          and the process is well understood.  The final software upgrade for
          Year 2000 compliance, as warranted by the vendor, is expected to be
          available in early 1999 and is expected to be fully implemented in the
          summer of 1999.  The remainder of the year will be used to thoroughly
          test the system.

                                      14


<PAGE>

     -    The corporate financial and accounting system is in the process of
          being upgraded to the Year 2000 compliant version as warranted by the
          vendor.  This upgrade was originally planned for 1998.  The system is
          anticipated to be fully compliant prior to the end of 1998.  Extensive
          testing to verify the vendor's level of compliance will occur in 1999.

     -    It has been determined that the current millwork software will not
          meet the long term needs of the Company, and a decision to replace
          this software package has been made.  However, due to the complexity
          of implementing a new system, it has also been decided to bring the
          current system to a Year 2000 compliant state.  This project will be
          performed by the original vendor of the software.  The Year 2000
          compliant version of the current software is scheduled for delivery in
          the spring of 1999.  Additionally, a replacement software package has
          been identified that is warranted by the vendor as Year 2000
          compliant.  The new system is scheduled to come on-line in July 1999.
          In both cases, testing of the software will occur during the latter
          half of 1999.

     -    The vendors for the truss production system and outsourced payroll
          system have advised the Company that the systems are currently Year
          2000 compliant or are scheduled to be Year 2000 compliant by the end
          of 1998.  Verification and testing of these systems for compliance is
          currently underway, and should be completed by the end of 1998.

COST TO ADDRESS YEAR 2000 ISSUES

     Much of the cost to address Year 2000 issues was budgeted and scheduled as
part of routine maintenance of the Company's systems.  Since these costs were
identified and planned for in the budget cycle, the financial impact on the
Company is not expected to be material in any one year.  However, it is
anticipated that the total cost of becoming Year 2000 compliant for all systems
currently in use by the Company will be approximately $1.5 million.  To date
approximately $400,000 has been spent in remediation of Year 2000 issues.

                                      15


<PAGE>

RISKS OF YEAR 2000 ISSUES FOR BMHC

     Even in a most likely worst case scenario for BMHC, the risks due to
failure to accomplish Year 2000 remediations are not expected to have a material
adverse effect on the results of operations or financial condition of the
Company.  Each of the Company's operating locations currently has procedures in
place to deal with the failure of the retail system.  In this instance, the
increased amount of hand processing of accounting and inventory tracking would
result in higher overtime and payroll expense.  However, it is not anticipated
that there will be a material impact on the ability of the Company to deliver
products to customers.  In order to reduce the risks of delays in transportation
of inventory either to the Company or its customers, the Company intends to
monitor Year 2000 compliance by its transportation suppliers and will consider a
build-up of certain inventories in the fourth quarter of 1999, if appropriate.
The Company does not expect that the cost of a short-term increase in its
inventory levels to protect against Year 2000 risks will be material to the
Company's financial condition or operating results.

     Since each of the systems perform specified functions that are well
understood by staff personnel in the operating locations and at the corporate
office, complete failure of all of the systems could be worked around to perform
the necessary functions of the systems.  It is extremely unlikely that this
would occur as steps to avoid this possibility are being taken.

CONTINGENCY PLANS

     The Company believes that temporary solutions to most failures are readily
and economically available.  For example, the dates on the systems could be set
to dates prior to 2000 that have the same days of the week.  This would involve
a data conversion and hand correcting of dates on printed documents, but could
be accomplished in just a few days.  Also, personal computers with spreadsheets
could be used to maintain accounting and inventory information as well as
corporate financial data.  Millwork configuration is unaffected by the date
change, but dates would need to be changed for order 

                                      16


<PAGE>

tracking if the system were not capable of dealing with dates after December 
31, 1999.  Processing of payroll could be done with personal computers.  
Truss engineering would need validation by the plate manufacturer to ensure 
structural integrity.  Finally, the Company can increase inventory levels to 
mitigate risks of Year 2000 transportation problems.  All of these plans 
could be put in place in a short time frame, and would mitigate nearly all 
the material risks to the Company. Further evaluation of contingency plans 
will be made, if necessary, as test results from the various systems become 
available.

SUMMARY

     BMHC has proactively identified and is in the process of correcting the
Year 2000 issues that it believes could have a material impact on the Company.
It is anticipated that all systems will be capable of functioning in a normal
fashion upon the change of the millennium.  It is not anticipated that BMHC will
suffer any loss of revenue due to Year 2000 issues.  The Company is also in the
process of requesting from all of its significant vendors a statement regarding
their preparations for the Year 2000 date change.  Since the Year 2000 issue was
anticipated in the budget cycle over the last two years, no material impact is
expected on the results of operations or cash flows in any period or on the
overall financial condition of the Company.  Also, no projects were canceled or
delayed as a result of Year 2000 remediation activities.


PART II -- OTHER INFORMATION

ITEM 1.     LEGAL PROCEEDINGS
            The Company is involved in litigation and administrative
            proceedings primarily arising in the normal course of its
            business.  In the opinion of management, the Company's recovery,
            if any, or the Company's liability, if any, under any pending
            litigation or administrative proceedings would not materially
            affect its financial condition or operations.

                                       17


<PAGE>

ITEM 4.     SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

            None

ITEM 5.     OTHER INFORMATION

            None

ITEM 6.     EXHIBITS AND REPORTS ON FORM 8-K

(a)         Exhibits
            Exhibit 27 - Financial Data Schedule

(b)         Reports on Form 8-K
            None

                                      18


<PAGE>

                                     SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.


                                 BUILDING MATERIALS HOLDING CORPORATION


Date:  November 10, 1998         /s/ Robert E. Mellor
                                 ---------------------------------------------
                                 Robert E. Mellor
                                 President, Chief Executive Officer
                                 and Director (Principal Executive Officer)


Date:  November 10, 1998         /s/ Ellis C. Goebel
                                 ---------------------------------------------
                                 Ellis C. Goebel
                                 Senior Vice President-Finance and Treasurer
                                 (Principal Financial Officer)

                                      19


<PAGE>

                               INDEX TO EXHIBITS

                     BUILDING MATERIALS HOLDING CORPORATION

                         Quarterly Report on Form 10-Q
                    For the Quarter Ended September 30, 1998

<TABLE>
<CAPTION>

                                                                        Page
Exhibit      Description                                               Number
-------      -----------                                               ------
<S>          <C>                                                       <C>
 27          Financial Data Schedule                                     20

 10.3        Third Amended and Restated Credit                           23
             Agreement among Wells Fargo Bank,
             National Association, as Agent, BMC
             West Corporation, and The Banks Named
             Herein dated September 30, 1998
</TABLE>

                                      20