Press Releases
Printer Friendly Version View printer-friendly version
<< Back
BlueLinx Announces First Quarter 2021 Results

Net Sales Exceed $1 billion, Highest Q1 Since 2006
Record Net Income of $62 million and Adjusted EBITDA of $107 million
More than $100 million decrease in Total Outstanding Bank Debt year over year

MARIETTA, Ga., May 04, 2021 (GLOBE NEWSWIRE) -- BlueLinx Holdings Inc. (NYSE:BXC), a leading U.S. wholesale distributor of building products, today reported financial results for the three months ended April 3, 2021.

First Quarter 2021 Results
(all comparisons versus the prior-year period unless otherwise noted)

  • Net sales increased $363 million, or 55%, to $1.0 billion
  • Gross margin increased 350 basis points to 17.6%   
  • Net income of $62 million, an increase of $63 million
  • Adjusted EBITDA of $107 million, improved by $87 million
  • Excess availability and cash on hand increased to $238 million
  • Term Loan fully repaid

“The BlueLinx team has continued to perform at a high level during a period of continued strength in residential construction and home renovation, leading to significant year-over-year growth in revenue and profitability,” said Mitch Lewis, President and CEO. “We generated more than $1 billion in revenue and $107 million in Adjusted EBITDA during the first quarter, providing the Company a strong platform to drive continued growth and efficiency across our business.”

“The ongoing supply-demand imbalances for many of our products contributed to further price escalations during the first quarter, a trend that is continuing in the second quarter,” stated Lewis. “We are a beneficiary of these price escalations, which are a key near-term driver of improved margin realization and profitability, while remaining focused on preemptive actions to help mitigate the impact of downside commodity price risk.”

“Our business transformation continued during the first quarter, supported by a significant increase in gross profit across both product categories,” stated Kelly Janzen, Chief Financial Officer. “Since the end of the first quarter 2020, we have reduced our total outstanding bank debt by over $100 million. Late in the quarter, we voluntarily repaid the approximately $16 million of remaining outstanding principal under our term loan, an action which further simplifies our capital structure and reduces cash interest expense. We ended the first quarter with excess availability of $238 million under our revolving credit facility, an increase of $141 million versus the prior-year period, and a net leverage ratio of 2.5x, inclusive of finance lease obligations.”

“Given the significant increase in net sales, accounts receivable grew by more than $125 million in the first quarter, when compared to the fourth quarter 2020,” continued Janzen. “As we look to the second half of the current year, we anticipate that the conversion of our accounts receivable will result in significant growth in cash flow.”

Financial Performance

The Company reported net sales of $1.0 billion in the first quarter, compared to $662 million in the prior year period, and gross profit of $180 million, compared to $93 million in the prior year period. First quarter net sales for specialty products, which includes products such as engineered wood, cedar, moulding, siding, metal products and insulation, accounted for $563 million of net sales in the period, up from $421 million in the prior year period. The $142 million improvement year over year was primarily a result of price escalations. The specialty gross margin was 19.3% which increased 290 basis points compared to the first quarter of 2020. Net sales of structural products, which includes products such as lumber, plywood, oriented strand board, rebar, and remesh, continued to benefit from wood-based commodity price inflation and were $462 million, an increase of $222 million compared to last year. The impact of wood-based commodity price inflation is estimated to approximate the full amount of the increase in net sales. Structural product gross margin increased by 540 basis points year over year to 15.5% for the first quarter.

The Company reported net income of $62 million in the first quarter, or $6.28 per diluted share, compared to a net loss of $0.8 million, or $(0.08) per diluted share, in the prior-year period. First quarter 2021 net income was reduced by approximately $5 million from non-recurring items, including a $6 million write-off of debt issuance costs, that was included in interest expense, associated with the term loan payoff, offset by a $1 million gain on sales of property, and first quarter 2020 net income was reduced by approximately $4 million of integration, real estate financing, and restructuring expenses. Excluding the impact of these non-recurring items, net income increased by $64 million, or $6.44 per diluted share, on a year-over-year basis.

Adjusted EBITDA, a non-GAAP measure, was $107 million in the first quarter, compared to $20 million in the prior-year period. Cash used in operating activities for the first quarter was $25 million, an improvement of $35 million when compared to the prior year period and was primarily a result of increased net income offset by an increase in accounts receivable of $125 million in the first quarter, due to increased net sales.

Business Update

The Company remains committed to its strategic priorities that include sales growth, margin expansion, strategic product emphasis and continuous improvements in operational efficiency.

  • Sales growth and margin expansion. BlueLinx is committed to driving sustained sales growth and margin expansion through increased penetration of the national dealer, home center and local markets. The Company has continued to invest in resources and analytical tools to support its disciplined pricing strategies and has expanded sales support for these key customer segments.

  • Value-added product line expansion. BlueLinx is focused on delivering specialized, higher-value products, in which two-step distribution plays a key role. The Company is committed to further building its relationships with marquee brands through its valued supplier partners, while investing in products with low disintermediation risk.

  • Operational efficiencies. BlueLinx emphasizes continuous improvement in its operational processes. Productivity improvements through project initiatives and investments in fleet, facility optimization, and technologies remain a primary focus for the Company. Overall selling, general and administrative expense remained relatively consistent compared to the prior year period, increasing approximately $1 million due to higher variable incentive compensation and sales commissions of approximately $4 million. Offsetting the increase in variable compensation was a reduction in fixed overhead costs, primarily from reduced labor expense. Working capital management improvements continued during the first quarter, with Days Sales of Inventory of 39 days, an improvement of 19 days, when compared to the prior year period.

Market Outlook

While domestic new residential construction and home renovation markets remain robust, higher raw material costs and adverse weather conditions impacted construction activity during the first quarter, as key North American mills continue to have supply constraints.

  • Single-family housing starts (SFHS), a key economic indicator with a high historical correlation to the Company’s business, remain relatively strong, although SFHS on a trailing twelve month basis as of March 2021 are still approximately 40% below the prior cyclical peak achieved in 2005.    
  • Total U.S. monthly supply of homes for sale increased from year-end levels but remain constrained, with housing inventory at the end of the first quarter at approximately 38% below the 20-year average.
  • According to the National Association of Home Builders (NAHB), the April 2021 Builders’ Confidence Index increased slightly to 83 from 82 in March. Increases in materials costs and delivery times have impacted short-term builder sentiment.
  • While existing home sales were down 10% due to limited housing inventory, remodeling expenditures continued to increase on a quarter-over-quarter basis. According to the NAHB, the Remodeling Market Index (RMI) increased 9% to 86 for the first quarter 2021 index as compared to 79 for fourth quarter 2020.

First Quarter 2021 Conference Call Details

BlueLinx will host a conference call on May 5, 2021, at 10:00 a.m. Eastern Time, accompanied by a supporting slide presentation.   Participants can access the live conference call via telephone at (877) 873-5864, using Conference ID # 7956909. Investors will also be able to access an archived audio recording of the conference call for one week following the live call by dialing (404) 537-3406, Conference ID # 7956909.

Investors can also listen to the live audio of the conference call and view the accompanying slide presentation by visiting the BlueLinx website, www.BlueLinxCo.com, and selecting the conference link on the Investor Relations page. After the conference call has concluded, an archived recording will be available on the BlueLinx website.

Use of Non-GAAP Measures

The Company reports its financial results in accordance with GAAP. The Company also believes that presentation of certain non-GAAP measures may be useful to investors and may provide a more complete understanding of the factors and trends affecting the business than using reported GAAP results alone. Any non-GAAP measures used herein are reconciled to their most directly comparable GAAP measures herein or 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
BlueLinx defines Adjusted EBITDA as an amount equal to net income plus interest expense and all interest expense related items, income taxes, depreciation and amortization, and further adjusted for certain non-cash items and other special items, including compensation expense from share-based compensation, one-time charges associated with the legal and professional fees and integration costs related to the Cedar Creek acquisition, and gains on sales of properties including amortization of deferred gains.

The Company presents Adjusted EBITDA because it is a primary measure used by management to evaluate operating performance. Management believes this metric helps to enhance investors’ overall understanding of the financial performance and cash flows of the business. Management also believes Adjusted EBITDA is helpful in highlighting operating trends. Adjusted EBITDA is frequently used by securities analysts, investors, and other interested parties in their evaluation of companies, many of which present an Adjusted EBITDA measure when reporting their results. However, Adjusted EBITDA is not a presentation made in accordance with GAAP and is not intended to present a superior measure of our financial condition from those measures determined under GAAP. Adjusted EBITDA, as used herein, is not necessarily comparable to other similarly titled captions of other companies due to differences in methods of calculation. This non-GAAP measure is reconciled in the “Reconciliation of Non-GAAP Measurements” table later in this release.

Net Debt and Net Leverage Ratio
BlueLinx determines our net debt based on total short- and long-term debt, including our outstanding balances under the Company’s term loan and revolving credit facility and the total amount of obligations under its financing leases, less cash and cash equivalents.

After determining net debt, BlueLinx determines its overall net leverage ratio by dividing net debt by trailing twelve-month Adjusted EBITDA. Management believes that this ratio is useful to investors because it is an indicator of the Company’s ability to meet its future financial obligations. In addition, the ratio is a measure that is frequently used by investors and creditors. Net debt and overall net leverage ratio are not presentations made in accordance with GAAP, and are not intended to present a superior measure of the Company’s financial condition from measures and ratios determined under GAAP. In addition, the Company’s net debt and overall net leverage ratio, as used herein, are not necessarily comparable to other similarly titled captions of other companies due to differences in methods of calculation. This non-GAAP measure is reconciled in the “Reconciliation of Non-GAAP Measurements” table later in this release.

ABOUT BLUELINX HOLDINGS

BlueLinx (NYSE: BXC) is a leading U.S. wholesale distributor of residential and commercial building products with both branded and private-label SKUs across product categories such as lumber, panels, engineered wood, siding, millwork, metal building products, and other construction materials. With a strong market position, broad geographic coverage footprint servicing 40 states, and the strength of a locally focused sales force, we distribute our comprehensive range of products to over 15,000 national, regional, and local dealers, specialty distributors, national home centers, and manufactured housing customers. BlueLinx is able to provide a wide range of value added services and solutions to our customers and suppliers. We are headquartered in Georgia, with executive offices located at 1950 Spectrum Circle, Marietta, Georgia, and we operate our distribution business through a broad network of distribution centers. BlueLinx encourages investors to visit its website, www.BlueLinxCo.com, which is updated regularly with financial and other important information about BlueLinx.

CONTACT

Noel Ryan
(720) 778-2415
BXC@val-adv.com

FORWARD-LOOKING STATEMENTS

This press release contains forward-looking statements. Forward-looking statements include, without limitation, any statement that predicts, forecasts, indicates or implies future results, performance, liquidity levels or achievements, and may contain the words “believe,” “anticipate,” “expect,” “estimate,” “intend,” “project,” “plan,” “will be,” “will likely continue,” “will likely result” or words or phrases of similar meaning. The forward-looking statements in this press release include statements about our strategic imperatives and priorities, and our focus thereon; our ability to capitalize on our geographic footprint to grow our national dealer and home center customer markets; our local entrepreneurial initiatives; our focus on reducing non-essential costs and our ability to, and the potential success of, investing in resources to support strategic sales growth; our market and business outlook, including the outlook for the residential housing construction markets, and trends in wood-based commodity prices; our efforts to manage commodity price volatility and the potential success thereof; and the COVID-19 pandemic and our response thereto, including statements about the potential trajectory of the pandemic and its potential effects.

Forward-looking statements in this press release are based on estimates and assumptions made by our management that, although believed by us to be reasonable, are inherently uncertain. Forward-looking statements involve risks and uncertainties that may cause our business, strategy, or actual results to differ materially from the forward-looking statements. These risks and uncertainties include those discussed in greater detail in our filings with the Securities and Exchange Commission. We operate in a changing environment in which new risks can emerge from time to time. It is not possible for management to predict all of these risks, nor can it assess the extent to which any factor, or a combination of factors, may cause our business, strategy, or actual results to differ materially from those contained in forward-looking statements. Factors that may cause these differences include, among other things: pricing and product cost variability; volumes of product sold; changes in the prices, supply, and/or demand for products that we distribute; the cyclical nature of the industry in which we operate; housing market conditions; the COVID-19 pandemic and other contagious illness outbreaks and their potential effects on our industry; effective inventory management relative to our sales volume or the prices of the products we produce; information technology security risks and business interruption risks; increases in petroleum prices; consolidation among competitors, suppliers, and customers; disintermediation risk; loss of products or key suppliers and manufacturers; our dependence on international suppliers and manufacturers for certain products; business disruptions; exposure to product liability and other claims and legal proceedings related to our business and the products we distribute; natural disasters, catastrophes, fire, or other unexpected events; successful implementation of our strategy; wage increases or work stoppages by our union employees; costs imposed by federal, state, local, and other regulations; compliance costs associated with federal, state, and local environmental protection laws; our level of indebtedness and our ability to incur additional debt to fund future needs; the risk that our cash flows and capital resources may be insufficient to service our existing or future indebtedness; the covenants of the instruments governing our indebtedness limiting the discretion of our management in operating our business; the fact that we lease many of our distribution centers, and we would still be obligated under these leases even if we close a leased distribution center; changes in our product mix; shareholder activism; potential acquisitions and the integration and completion of such acquisitions; the possibility that the value of our deferred tax assets could become impaired; changes in our expected annual effective tax rate could be volatile; the costs and liabilities related to our participation in multi-employer pension plans could increase; the possibility that we could be the subject of securities class action litigation due to stock price volatility; and changes in, or interpretation of, accounting principles.

Given these risks and uncertainties, we caution you not to place undue reliance on forward-looking statements. We expressly disclaim any obligation to update or revise any forward-looking statement as a result of new information, future events or otherwise, except as required by law.

 
BLUELINX HOLDINGS INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
 
  Three Months Ended
  April 3, 2021   March 28, 2020
   
  (In thousands, except per share data)
   
Net sales $ 1,025,469     $ 662,070  
Cost of sales 845,077     568,861  
Gross profit 180,392     93,209  
Gross margin 17.6 %   14.1 %
Operating expenses:      
Selling, general, and administrative 75,560     74,588  
Depreciation and amortization 7,465     7,635  
Amortization of deferred gains on real estate (984 )   (984 )
Gains from sales of property (1,287 )   (525 )
Other operating expenses 112     4,165  
Total operating expenses 80,866     84,879  
Operating income 99,526     8,330  
Non-operating expenses (income):      
Interest expense, net 16,234     14,380  
Other income, net (314 )   (237 )
Income (loss) before provision for (benefit from) income taxes 83,606     (5,813 )
Provision for (benefit from) income taxes 21,746     (5,026 )
Net income (loss) $ 61,860     $ (787 )
       
Basic income (loss) per share $ 6.53     $ (0.08 )
Diluted income (loss) per share $ 6.28     $ (0.08 )


 
BLUELINX HOLDINGS INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(Unaudited)
 
  April 3, 2021   January 2, 2021
   
  (In thousands, except share data)
ASSETS
Current assets:      
Cash $ 179     $ 82  
Receivables, less allowances of $5,573 and $4,123, respectively 418,815     293,643  
Inventories, net 376,423     342,108  
Other current assets 33,029     32,581  
Total current assets 828,446     668,414  
Property and equipment, at cost 310,101     299,935  
Accumulated depreciation (125,769 )   (121,223 )
Property and equipment, net 184,332     178,712  
Operating lease right-of-use assets 48,969     51,142  
Goodwill 47,772     47,772  
Intangible assets, net 17,067     18,889  
Deferred tax assets 66,795     62,899  
Other non-current assets 19,099     20,302  
Total assets $ 1,212,480     $ 1,048,130  
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:      
Accounts payable $ 218,975     $ 165,163  
Accrued compensation 10,798     24,751  
Taxes payable 33,646     7,847  
Current maturities of long-term debt, net of debt issuance costs of $0 and $74, respectively     1,171  
Finance lease liabilities - short-term 7,459     5,675  
Operating lease liabilities - short-term 5,123     6,076  
Real estate deferred gains - short-term 4,040     4,040  
Other current liabilities 11,747     14,309  
Total current liabilities 291,788     229,032  
Non-current liabilities:      
Long-term debt, net of debt issuance costs of $2,615 and $8,936, respectively 355,899     321,270  
Finance lease liabilities - long-term 273,815     267,443  
Operating lease liabilities - long-term 44,021     44,965  
Real estate deferred gains - long-term 77,059     78,009  
Pension benefit obligation 21,730     22,684  
Other non-current liabilities 25,655     25,635  
Total liabilities 1,089,967     989,038  
Commitments and contingencies      
STOCKHOLDERS' EQUITY:
Common Stock, $0.01 par value, 20,000,000 shares authorized,
9,468,042 and 9,462,774 outstanding on April 3, 2021 and January 2, 2021, respectively
95     95  
Additional paid-in capital 268,006     266,695  
Accumulated other comprehensive loss (35,742 )   (35,992 )
Accumulated stockholders’ deficit (109,846 )   (171,706 )
Total stockholders’ equity 122,513     59,092  
Total liabilities and stockholders’ equity $ 1,212,480     $ 1,048,130  


 
BLUELINX HOLDINGS INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
 
  Three Months Ended
  April 3, 2021   March 28, 2020
   
  (In thousands)
Cash flows from operating activities:      
Net income (loss) $ 61,860     $ (787 )
Adjustments to reconcile net income (loss) to cash used in operations:      
Provision for (benefit from) income taxes 21,746     (5,026 )
Depreciation and amortization 7,465     7,635  
Amortization of debt issuance costs 603     956  
Adjustments to debt issuance costs associated with term loan 5,791      
Gains from sales of property (1,287 )   (525 )
Amortization of deferred gains from real estate (984 )   (984 )
Share-based compensation 1,410     1,004  
Changes in operating assets and liabilities:      
Accounts receivable (125,172 )   (55,068 )
Inventories (34,315 )   (32,828 )
Accounts payable 53,812     30,050  
Prepaid and other current assets (1,246 )   (3,006 )
Other assets and liabilities (14,291 )   (608 )
Net cash used in operating activities (24,608 )   (59,187 )
       
Cash flows from investing activities:      
Proceeds from sale of assets 1,810     44  
Property and equipment investments (1,122 )   (1,245 )
Net cash provided by (used in) investing activities 688     (1,201 )
       
Cash flows from financing activities:      
Borrowings on revolving credit facilities 262,210     204,196  
Repayments on revolving credit facilities (191,943 )   (149,079 )
Repayments on term loan (43,204 )   (69,238 )
Proceeds from real estate financing transactions     78,329  
Debt financing costs (861 )   (336 )
Repurchase of shares to satisfy employee tax withholdings (56 )   (7 )
Principal payments on finance lease liabilities (2,129 )   (2,562 )
Net cash provided by financing activities 24,017     61,303  
       
Net change in cash 97     915  
Cash at beginning of period 82     11,643  
Cash at end of period $ 179     $ 12,558  


                     
BLUELINX HOLDINGS INC.
RECONCILIATION OF NON-GAAP MEASUREMENTS
(Unaudited)
 
The following schedule reconciles net income (loss) to Adjusted EBITDA:
 
        Three Months Ended
        April 3, 2021   March 28, 2020
         
        (In thousands)
Net income (loss) $ 61,860     $ (787 )
Adjustments:      
Depreciation and amortization 7,465     7,635  
Interest expense, net 10,443     14,380  
Term loan debt issuance costs(1) 5,791      
Provision for (benefit from) income taxes 21,746     (5,026 )
Share-based compensation expense 1,410     1,004  
Amortization of deferred gains on real estate (984 )   (984 )
Gain from sales of property(1) (1,287 )   (525 )
Real estate financing costs(1)     1,793  
Merger and acquisition costs(1)(2)     1,070  
Restructuring and other(1)(3) 113     1,309  
Adjusted EBITDA $ 106,557     $ 19,869  
     
(1)   Reflects non-recurring items of approximately $5 million in non-beneficial items to the current quarter and approximately $4 million in non-beneficial items to the same quarterly period of the prior year.
     
(2)   Reflects primarily legal, professional, technology and other integration costs related to the Cedar Creek acquisition.
     
(3)   Reflects costs related to our restructuring efforts, such as severance, net of other one-time non-operating items.


                   
The following schedule presents Net Debt and the Net Leverage Ratio for the Trailing Twelve Months:
       
      Three Months Ended
      April 3, 2021   March 28, 2020
      (In thousands)
Current maturities of long term debt, gross of debt issuance costs $     $ 2,250  
Finance lease liabilities - short term 7,459     5,924  
Long term debt, gross of debt issuance costs 358,514     456,798  
Finance lease liabilities - long term(1) 273,815     269,192  
Total long-term debt 639,788     734,164  
Less: available cash 179     12,558  
Net Debt 639,609     721,606  
Trailing twelve month Adjusted EBITDA $ 257,088     $ 74,698  
Net Leverage Ratio 2.5x   9.7x
           
(1)   Finance lease liabilities - long term include the combination of finance lease liabilities - long term and real-estate financing obligations in those periods when real estate financing obligations were presented.

 


Primary Logo

Source: BlueLinx Corporation