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BlueLinx Announces Third-Quarter Results

- Adjusted EBITDA of $11.1 Million Best Since 2008 -
- Excess Availability of $88 million -

ATLANTA, Nov. 6, 2014 (GLOBE NEWSWIRE) -- BlueLinx Holdings Inc. (NYSE:BXC), a leading distributor of building products in North America, today reported financial results for the fiscal third quarter ended October 4, 2014.

Third Quarter Financial Highlights

  • Same Center Sales of $549.8 million up $14.3 million, or 3%, compared to fiscal third quarter 2013
  • Gross Profit of $64.6 million, up 3% from $62.5 million in fiscal third quarter 2013
  • Gross Margin of 11.7% of sales, up 50 basis points from 11.2% in fiscal third quarter 2013
  • Adjusted EBITDA of $11.1 million, compared to $7.2 million in fiscal third quarter 2013
  • Excess availability of $88 million as of October 4, 2014

"We are pleased to report fiscal third quarter 2014 Adjusted EBITDA of $11.1 million. These results continue our positive year over year trend since our first quarter and reflect continued momentum in executing our initiatives. Adjusted EBITDA of $11.1 million represents an improvement of approximately $3.9 million from the fiscal third quarter of 2013, while our same center sales improved by 3%," said Mitch Lewis, President and Chief Executive Officer.

Susan O'Farrell, Senior Vice President and Chief Financial Officer added, "As previously announced in August, the company extended our $20 million loan component of the U.S. revolving credit facility through June 2015. We ended the third quarter with excess availability of $88 million, and our year to date cash used by operations improved $17.4 million over the fiscal nine months ended 2013. We continue to closely manage our business to enhance our liquidity position."

Third Quarter 2014 Financial Results Compared to Prior Year Period

Revenues for the fiscal third quarter ended October 4, 2014, decreased by $8.1 million, or 1%, to $549.8 million compared to $557.9 million in the fiscal third quarter ended September 28, 2013. Same center revenues for the fiscal third quarter 2014 grew by 3% compared to the year ago period of $535.5 million. Overall, same center revenues were up for the quarter due to unit volume growth in the specialty business as well as higher pricing in plywood and lumber categories.

Gross profit in the fiscal third quarter 2014 was $64.6 million, up $2.1 million, or 3%, compared to the fiscal third quarter 2013. Gross profit on a same center basis for the fiscal third quarter 2014 increased by $2.9 million, or 5%, compared to the fiscal third quarter of 2013. Gross margin increased 50 basis points in fiscal third quarter 2014, to 11.7% from 11.2% in the fiscal third quarter of 2013.

The Company recorded an improvement of $2.3 million to a net loss of $0.9 million, $(0.01) per diluted share, in the fiscal third quarter 2014 compared to the net loss of $3.2 million, $(0.04) per diluted share, in the prior year period.

Adjusted EBITDA for the fiscal third quarter 2014 improved to $11.1 million from an Adjusted EBITDA of $7.2 million for the same period a year ago. Adjusted EBITDA for the fiscal third quarter and fiscal nine months ended 2014 and 2013, are shown in the following table:

BlueLinx Holdings Inc.
Unaudited reconciliation of GAAP net income (loss) to Non-GAAP Adjusted EBITDA (in thousands) (1)
Fiscal
Q3 2014
Fiscal
Q3 2013
Fiscal
2014 YTD
Fiscal
2013 YTD
GAAP net income (loss) $(0.9) $(3.2) $(6.2) $(38.2)
Adjustments:
Depreciation and amortization 2.4 2.1 7.2 6.5
Interest expense 6.8 6.9 20.1 21.0
Provision for (benefit from) income taxes (0.1) (0.6) (0.1) (0.7)
Loss from closed distribution centers 1.9 3.7
Gain from the sale of properties (3.7) (5.3) (3.9)
Share-based compensation expense, excluding restructuring 0.5 1.0 1.8 2.9
Restructuring, severance, debt fees, and other 2.4 2.8 5.2 11.0
Adjusted EBITDA same center $11.1 $7.2 $22.7 $2.3
(1) Immaterial rounding adjustments and differences may exist between tables and previously issued presentations.

Liquidity and Capital Resources

As of October 4, 2014, the Company had $88 million of excess availability under its asset-backed revolving credit facilities, based on qualifying inventory and receivables.

Conference Call

BlueLinx will host a conference call today at 3:00 p.m. Eastern Time, accompanied by a supporting slide presentation. Investors can listen to the conference call and view the accompanying slide presentation by going to the BlueLinx web site, www.BlueLinxCo.com, and selecting the conference link on the Investor Relations page. Investors will be able to access an archived recording of the conference call for one week by calling 404-537-3406, Conference ID# 21238432. The recording will be available two hours after the conference call has concluded. Investors also can access a recording of this call on the BlueLinx website, where a replay of the webcast will be available for 90 days.

Use of Non-GAAP Measures

BlueLinx reports its financial results in accordance with U.S. generally accepted accounting principles ("GAAP"). The Company also believes that presentation of certain non-GAAP measures, i.e., results excluding certain charges or other nonrecurring events, when appropriate, provides useful information for the understanding of its ongoing operations and enables investors to focus on period-over-period operating performance, without the impact of significant special items, and thereby enhances the user's overall understanding of the Company's current financial performance relative to past performance and provides a better baseline for modeling future earnings expectations. Any non-GAAP measures used herein are reconciled in the financial tables accompanying this news release. The Company cautions that non-GAAP measures should be considered in addition to, but not as a substitute for, the Company's reported GAAP results.

Adjusted EBITDA is a non-GAAP measure that management uses to evaluate the performance of the Company. Adjusted EBITDA, as we define it, is an amount equal to net income (loss) plus interest expense and related items, income taxes, stock compensation, depreciation and amortization, further adjusted to exclude other non-cash items and certain other adjustments. Adjusted EBITDA is presented herein because we believe it is a useful supplement to cash flow from operations in understanding cash flows generated from operations that are available for debt service (interest and principal payments) and further investment in acquisitions. However, Adjusted EBITDA is not a presentation made in accordance with GAAP, and is not intended to present a superior measure of the financial condition from those determined under GAAP.

About BlueLinx Holdings Inc.

BlueLinx Holdings Inc., operating through its wholly owned subsidiary BlueLinx Corporation, is a leading distributor of building products in North America. The Company is headquartered in Atlanta, Georgia and operates its distribution business through its current network of 49 distribution centers. BlueLinx is traded on the New York Stock Exchange under the symbol BXC. Additional information about BlueLinx can be found on its website at www.BlueLinxCo.com.

Forward-looking Statements

This press release includes "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995, including statements relating to our ability to return to profitability, our outlook on the housing industry, and our guidance regarding anticipated financial results. All of these forward-looking statements are based on estimates and assumptions made by our management that, although believed by BlueLinx to be reasonable, are inherently uncertain. Forward-looking statements involve risks and uncertainties, including, but not limited to, economic, competitive, governmental and technological factors outside of BlueLinx's control that may cause its business, strategy or actual results to differ materially from the forward-looking statements. These risks and uncertainties may include, among other things: changes in the prices, supply and/or demand for products that it distributes, general economic and business conditions in the United States; the activities of competitors; changes in significant operating expenses; changes in the availability of capital and interest rates; adverse weather patterns or conditions; acts of cyber intrusion; variations in the performance of the financial markets, including the credit markets; and other factors described in the "Risk Factors" section in the Company's Annual Report on Form 10-K for the year ended January 4, 2014, and in its periodic reports filed with the Securities and Exchange Commission from time to time. Given these risks and uncertainties, you are cautioned not to place undue reliance on forward-looking statements. BlueLinx undertakes no obligation to publicly update or revise any forward-looking statement as a result of new information, future events, and changes in expectation or otherwise, except as required by law.

- Tables to Follow -

BLUELINX HOLDINGS INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except per share data)
(unaudited)
Three Months
Ended
October 4,
2014
Three Months
Ended
September 28,
2013
Nine Months
Ended
October 4,
2014
Nine Months
Ended
September 28,
2013
Net sales $549,845 $557,952 $1,525,283 $1,665,697
Cost of sales 485,265 495,460 1,345,994 1,491,563
Gross profit 64,580 62,492 179,289 174,134
Operating expenses:
Selling, general, and administrative 56,136 57,255 158,006 185,184
Depreciation and amortization 2,403 2,144 7,176 6,547
Total operating expenses 58,539 59,399 165,182 191,731
Operating income (loss) 6,041 3,093 14,107 (17,597)
Non-operating expenses (income):
Interest expense 6,777 6,918 20,090 21,026
Other expense (income), net 193 17 313 252
Income (loss) before provision for (benefit from) income taxes (929) (3,842) (6,296) (38,875)
Provision for (benefit from) income taxes (69) (636) (65) (714)
Net income (loss) $ (860) $ (3,206) $ (6,231) $ (38,161)
Basic and diluted weighted average number of common shares outstanding 86,399 84,596 85,820 78,492
Basic and diluted net income (loss) per share applicable to common stock $ (0.01) $ (0.04) $ (0.07) $ (0.49)
BLUELINX HOLDINGS INC.
CONSOLIDATED BALANCE SHEETS
(In thousands)
October 4, 2014 January 4, 2014
(unaudited)
Assets:
Current assets:
Cash and cash equivalents $7,839 $5,034
Receivables, net 205,845 150,297
Inventories, net 264,920 223,580
Other current assets 25,087 22,814
Total current assets 503,691 401,725
Property, plant, and equipment:
Land and land improvements 41,095 41,176
Buildings 90,116 90,082
Machinery and equipment 77,230 73,004
Construction in progress 478 3,028
Property, plant, and equipment, at cost 208,919 207,290
Accumulated depreciation (102,569) (96,171)
Property, plant, and equipment, net 106,350 111,119
Non-current deferred income tax assets, net 824 824
Other non-current assets 16,560 14,821
Total assets $627,425 $528,489
Liabilities:
Current liabilities:
Accounts payable $105,307 $60,363
Bank overdrafts 19,573 19,377
Accrued compensation 6,872 4,173
Current maturities of long-term debt 71,717 9,141
Deferred income taxes, net 823 823
Other current liabilities 13,685 12,949
Total current liabilities 217,977 106,826
Non-current liabilities:
Long-term debt 382,514 387,238
Other non-current liabilities 37,608 40,323
Total liabilities 638,099 534,387
Stockholders' deficit:
Common Stock 888 866
Additional paid-in capital 252,529 251,150
Accumulated other comprehensive income (loss) (16,192) (16,293)
Accumulated deficit (247,899) (241,621)
Total stockholders' deficit (10,674) (5,898)
Total liabilities and stockholders' deficit $627,425 $528,489
BLUELINX HOLDINGS INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)
(unaudited)
Nine Months Ended
October 4, 2014
Nine Months Ended
September 28, 2013
Cash flows from operating activities:
Net income (loss) $(6,231) $(38,161)
Adjustments to reconcile net loss to net cash used in operations:
Depreciation and amortization 7,176 6,547
Amortization of debt issuance costs 2,483 2,396
Write-off of debt issuance costs 119
Gain from the sale of properties (5,251) (3,908)
Vacant property charges, net 1,398
Severance charges 1,877 4,703
Restructuring payments (2,323) (1,977)
Intraperiod income tax allocation related to the hourly pension plan (224) (840)
Pension expense 675 3,443
Share-based compensation expense, excluding restructuring related 3,316 2,866
Share-based compensation expense, restructuring related 2,711
Increase in restricted cash related to insurance and other (667) (2,028)
Increase in prepaid assets (3,183) (761)
Other 770 1,255
Change in net cash from other operating activities (1,582) (22,237)
Changes in primary working capital components:
Receivables (55,548) (50,462)
Inventories (41,340) (29,663)
Accounts payable 45,042 31,568
Net cash used in operating activities (53,428) (70,794)
Cash flows from investing activities:
Property, plant, and equipment investments (1,816) (4,005)
Proceeds from disposition of assets 7,240 8,073
Net cash provided by investing activities 5,424 4,068
Cash flows from financing activities:
Excess tax benefits from share-based compensation arrangements 16
Repurchase of shares to satisfy employee tax withholdings (957) (2,867)
Repayments on the revolving credit facilities (337,547) (422,231)
Borrowings from the revolving credit facilities 404,020 490,264
Payments of principal on mortgage (8,827) (7,554)
Payments on capital lease obligations (1,732) (1,152)
Increase (decrease) in bank overdrafts 195 (14,921)
Decrease in restricted cash related to the mortgage (4,044) (8,970)
Debt issuance costs (201) (2,893)
Proceeds from (payments on) stock offering, less expenses paid (98) 38,715
Net cash provided by financing activities 50,809 68,407
Increase in cash 2,805 1,681
Balance, beginning of period 5,034 5,188
Balance, end of period $7,839 $6,869

BLUELINX HOLDINGS INC.
RECONCILIATION OF GAAP NET INCOME (LOSS) TO NON-GAAP ADJUSTED EBITDA
(In thousands)
(unaudited)
Fiscal
Q3 2014
Fiscal
Q3 2013
Fiscal
2014 YTD
Fiscal
2013 YTD
GAAP net income (loss) $(860) $(3,206) $(6,231) $(38,161)
Adjustments:
Depreciation and amortization 2,403 2,144 7,176 6,547
Interest expense 6,777 6,918 20,090 21,026
Provision for (benefit from) income taxes (69) (636) (65) (714)
Loss from closed distribution centers 1,898 3,689
Gain from the sale of properties (3,679) (5,251) (3,908)
Share-based compensation expense, excluding restructuring 444 985 1,771 2,923
Restructuring, severance, debt fees, and other 2,412 2,758 5,234 10,956
Adjusted EBITDA same center 11,107 7,182 22,724 2,358

BLUELINX HOLDINGS INC.
COMPARABLE SAME CENTER SCHEDULE
(In thousands)
(unaudited)
Fiscal
Q3 2014
Fiscal
Q3 2013
Fiscal
2014 YTD
Fiscal
2013 YTD
Net sales $549,845 $557,952 $1,525,283 $1,665,697
Less: closed centers 22,422 85,578
Same center net sales 549,845 535,530 1,525,283 1,580,119
Actual year-over-year percentage increase (decrease) (1.5)% (8.4)%
Same center year-over-year percentage increase (decrease) 2.7% (3.5)%
Gross profit $64,580 $62,492 $179,289 $174,134
Less: closed centers 859 7,294
Same center gross profit 64,580 61,633 179,289 166,840
Total operating expenses $58,539 $59,399 $165,182 $191,731
Less: closed centers 2,757 10,983
Same center operating expenses 58,539 56,642 165,182 180,748
Operating income (loss) $6,041 $3,093 $14,107 $(17,597)
Add back loss from closed centers 1,898 3,689
Same center operating income (loss) $6,041 $4,991 $14,107 $(13,908)

CONTACT: BlueLinx Contacts: Susan O'Farrell, SVP, Treasurer & CFO BlueLinx Holdings Inc. (770) 953-7000 Investor Relations: Caroline Lowden, Director Finance (770) 953-7522

Source:BlueLinx Corporation