bxc-20210803
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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
 
FORM 8-K
 
CURRENT REPORT
Pursuant to Section 13 or 15(d) of
The Securities Exchange Act of 1934
 
Date of Report (Date of earliest event reported): August 3, 2021
 
BlueLinx Holdings Inc.
(Exact name of registrant specified in its charter)
 
Delaware001-3238377-0627356
(State or other(Commission(I.R.S. Employer
jurisdiction of
incorporation)
File Number)Identification No.)
  
1950 Spectrum Circle, Suite 300, Marietta, Georgia
30067
(Address of principal executive offices)(Zip Code)

 
Registrant's telephone number, including area code: (770) 953-7000
 _________________________________________________
(Former name or former address, if changed since last report.)
 
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):
Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
Securities registered pursuant to Section 12(b) of the Act:

Title of each classTrading Symbol(s)Name of each exchange on which registered
Common Stock, par value $0.01 per shareBXCNew York Stock Exchange


Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 under the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
Emerging growth company

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 13(a) of the Exchange Act.





Item 2.02    Results of Operations and Financial Condition         

On August 3, 2021, BlueLinx Holdings Inc. ("BlueLinx" or "the Company”) issued a press release announcing its financial results for the fiscal first quarter ended July 3, 2021. A copy of BlueLinx's press release is furnished as Exhibit 99.1 hereto.

On August 4, 2021, as previously announced, BlueLinx will hold a teleconference and audio webcast to discuss its financial results from the fiscal first quarter ended July 3, 2021. A copy of supplementary materials that will be referred to in the teleconference and webcast, and which will be posted to the Company's website, is furnished as Exhibit 99.2 hereto.

The information included in this Item 2.02, as well as Exhibits 99.1 and 99.2, shall not be deemed "filed" for purposes of Section 18 of the Securities Exchange Act of 1934, nor shall it be deemed incorporated by reference in any filing under the Securities Act of 1933.


Item 9.01     Financial Statements and Exhibits

(d)        Exhibits:

The following exhibits are attached with this Current Report on Form 8-K:
Exhibit No. Exhibit Description
99.1 
99.2
104Cover Page Interactive Data File (embedded within the Inline XBRL document)




SIGNATURE
 
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 hereunto duly authorized.
    
  BlueLinx Holdings Inc. 
  (Registrant) 
    
Dated: August 3, 2021By:/s/ Kelly C. Janzen 
  Kelly C. Janzen 
  Senior Vice President and Chief Financial Officer

 


 
 


Document
Exhibit 99.1
https://cdn.kscope.io/f39cefff2eaab78c0465105e9ebbbc04-bl2a36a.jpg

BlueLinx Announces Second Quarter 2021 Results
Record Net Income and Adjusted EBITDA
TTM Net Sales, Net Income and Adjusted EBITDA of $4.1 billion, $250 million, and $392 million, respectively
Strong Financial Performance Supports Significantly Improved Balance Sheet

MARIETTA, GA, August 3, 2021 - BlueLinx Holdings Inc. (NYSE:BXC), a leading U.S. wholesale distributor of building products, today reported financial results for the three months ended July 3, 2021.

SECOND QUARTER 2021 RESULTS
(all comparisons versus the prior-year period unless otherwise noted)

Net sales increased to $1.3 billion, an increase of 87%
Gross margin increased 480 basis points to 19.2%
Net income of $113 million, an increase of $107 million
Adjusted EBITDA of $166 million, an increase of $135 million
Excess availability and cash on hand of $276 million, an increase of $138 million
Amended and extended revolving credit facility for an additional five years

“We continued our business transformation during the second quarter, while capitalizing on elevated demand within our core residential construction and home renovation markets,” stated Dwight Gibson, President and CEO of BlueLinx. “Our performance-driven culture, emphasis on long-term customer and supplier relationships at both national and local levels and our strategic product and service offerings, represent a durable and meaningful value proposition in a highly fragmented market.”

“Our record-setting second quarter performance was driven by a combination of product price escalations, overall volume growth within our specialty products business and an improved sales mix,” continued Gibson. “Supply-demand imbalances continued to persist across our specialty categories throughout the second quarter, resulting in a succession of supplier price increases that allowed the company to expand its margins. We expect that demand for key specialty categories will continue to outpace supply for the remainder of the current year and likely into the first half of 2022.”

“Commodity wood prices remained volatile during the second quarter,” continued Gibson. “While wood-based commodity prices continued to rise during April and mid-May, lumber prices declined by nearly 50% and 38% during June and July, respectively. In anticipation of the decline in commodity wood prices, we reduced our structural inventory footage to below prior-year levels, which served to mitigate price deflation in the period. We continue to take similar actions into the third quarter, consistent with our disciplined approach to working capital management.”

“Our balance sheet transformation continued during the second quarter. Significant cash flow generation in the period supported further debt reduction and an improved net leverage ratio,” stated Kelly Janzen, Chief Financial Officer. “We ended the second quarter with net debt to trailing twelve-month adjusted EBITDA of 1.5x, including lease finance obligations, the lowest level in the history of our company. Our strong balance sheet provides BlueLinx with significant optionality as we seek to deploy capital toward high-return investments capable of supporting long-term profitable growth.”

FINANCIAL PERFORMANCE

For the three months ended July 3, 2021, BlueLinx generated net sales of $1.3 billion, an increase of $609 million when compared to the prior-year period. BlueLinx reported second quarter net income of $113 million, or $11.61 per diluted share, versus $7 million, or $0.71 per diluted share, in the prior-year period. The year-over-year increase in profitability was attributable to broad-based revenue growth across both the specialty and structural product lines, improved price realization, together with disciplined inventory management and targeted cost control.

Net sales of specialty products, which includes engineered wood, industrial products, cedar, moulding, siding, metal products and insulation, increased $226 million to $675 million in the second quarter. Elevated demand for construction materials, along with continued supply constraints, contributed to price increases throughout the second quarter, improving net sales growth.
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Specialty sales volumes increased versus the prior-year period, and this increase was primarily attributable to the engineered wood, industrial products, and siding categories. Specialty products gross profit increased $87 million to $165 million, with a year-over-year improvement of 710 basis points in specialty gross margin to 24.4%

Net sales of structural products, which includes products such as lumber, plywood, oriented strand board, rebar, and remesh, increased $383 million to $633 million in the second quarter. Structural products gross profit increased $63 million year over year to $86 million. Wood-based commodity prices increased during the first half of the second quarter, then subsequently declined. Given recent commodity price volatility, the Company continued to closely manage its structural inventory levels during the period. Structural product gross margin increased by 430 basis points year over year to 13.6% for the second quarter.

Adjusted EBITDA, a non-GAAP measure, was $166 million in the second quarter, compared to $31 million in the prior-year period. Cash used in operating activities for the second quarter was $47 million, a decrease of $25 million when compared to the prior year period due to the increase in net working capital resulting from sales growth.

As of July 3, 2021, BlueLinx had total cash and excess availability under its revolving credit facility of $276 million, as compared to $138 million at the end of the second quarter 2020. Total debt outstanding at the end of the second quarter was $600 million, which included $273 million of long-term lease liabilities. The ratio of total net debt to trailing twelve-month Adjusted EBITDA declined to 1.5x at the end of the second quarter, versus 8.1x in the prior-year period. On August 2, 2021, we amended and extended our revolving credit facility for an additional five years.

BUSINESS UPDATE

BlueLinx remains committed to driving a culture of profitable growth within new and existing strategic product categories and geographies, while positioning the company for long-term value creation. As we look towards the future, management’s focus includes:

Supporting a performance-driven culture that emphasizes growth. BlueLinx believes that a high-impact team drives sustainable outperformance. Our national accounts, regional and branch teams are encouraged to capitalize on inefficiencies and competitive gaps, while expanding capabilities to grow our addressable markets.

Migrating revenue mix toward higher-margin specialty product categories. While BlueLinx remains committed to providing a full array of structural products, the Company intends to pursue targeted product line growth within less commoditized, high-demand specialty categories, while increasing the average mix of specialty revenue across its local market distribution centers.

Deploying a capital allocation strategy that supports long-term growth. On a trailing twelve-month basis, BlueLinx has transformed its balance sheet, one highlighted by a material reduction in our net leverage ratio and improved access to liquidity. As a result, the Company continues to actively evaluate its capital allocation strategy with a goal of enhancing overall shareholder value and supporting long term growth, which may include acquisitions that complement its existing capabilities. It also provides the ability to accelerate organic investments and during the second half of 2021, the Company intends to allocate close to $10 million to its fleet and facilities to improve operational performance and productivity.

BUSINESS OUTLOOK

Domestic residential construction activity remained elevated during July 2021, contributing to sustained demand for construction materials in the Company’s end-markets.
Gross margins on specialty products sold during July remained at levels consistent with those reported in the second quarter 2021, given robust demand across key product categories and continued price increases.
Continued wood-based commodity price volatility contributed to gross margin rates that were closer to historical levels on structural inventories sold during July, as the Company continued to manage its structural inventory and margins closely during the continued decline in wood-based commodity prices.
Given the deflationary environment in structural products, working capital is expected to decrease, resulting in meaningful cash generation during the second half of 2021.

CONFERENCE CALL INFORMATION

BlueLinx will host a conference call on August 4, 2021, at 10:00 a.m. Eastern Time, accompanied by a supporting slide presentation. Participants can access the live conference call via telephone at 877 407-4018, using Conference ID # 13721148. Investors will also be able to access an archived audio recording of the conference call for one week following the live call by dialing 844-512-2921, Conference ID # 13721148.
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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.

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.


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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 provides 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
























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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.


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BLUELINX HOLDINGS INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)

Three Months EndedSix Months Ended
 July 3, 2021June 27, 2020July 3, 2021June 27, 2020
(In thousands, except per share data)
Net sales$1,307,913 $698,776 $2,333,382 $1,360,846 
Cost of sales1,056,741 597,956 1,901,818 1,166,817 
Gross profit251,172 100,820 431,564 194,029 
Gross margin19.2 %14.4 %18.5 %14.3 %
Operating expenses (income):  
Selling, general, and administrative87,010 70,694 162,569 145,281 
Depreciation and amortization7,080 7,063 14,545 14,698 
Amortization of deferred gains on real estate(984)(984)(1,967)(1,967)
Gains from sales of property— — (1,287)(525)
Other operating expenses871 1,962 983 6,127 
Total operating expenses93,977 78,735 174,843 163,614 
Operating income157,195 22,085 256,721 30,415 
Non-operating expenses (income):  
Interest expense, net9,143 11,535 25,377 25,915 
Other expense (income), net(314)417 (628)180 
Income before provision for (benefit from) income taxes148,366 10,133 231,972 4,320 
Provision for (benefit from) income taxes34,908 3,438 56,654 (1,588)
Net income$113,458 $6,695 $175,318 $5,908 
Basic income per share$11.88 $0.71 $18.44 $0.63 
Diluted income per share$11.61 $0.71 $18.15 $0.63 


6


BLUELINX HOLDINGS INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(Unaudited)
 July 3, 2021January 2, 2021
(In thousands, except share data)
ASSETS
Current assets:  
Cash $179 $82 
Receivables, less allowances of $5,140 and $4,123, respectively
437,217 293,643 
Inventories, net425,714 342,108 
Other current assets36,280 32,581 
Total current assets899,390 668,414 
Property and equipment, at cost307,728 299,935 
Accumulated depreciation(127,252)(121,223)
Property and equipment, net180,476 178,712 
Operating lease right-of-use assets49,478 51,142 
Goodwill47,772 47,772 
Intangible assets, net15,830 18,889 
Deferred tax assets68,743 62,899 
Other non-current assets19,093 20,302 
Total assets$1,280,782 $1,048,130 
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:  
Accounts payable$227,100 $165,163 
Accrued compensation16,267 24,751 
Taxes payable17,941 7,847 
Current maturities of long-term debt, net of debt issuance costs of $0 and $74, respectively
— 1,171 
Finance lease liabilities - short-term6,379 5,675 
Operating lease liabilities - short-term4,936 6,076 
Real estate deferred gains - short-term4,040 4,040 
Other current liabilities13,035 14,309 
Total current liabilities289,698 229,032 
Non-current liabilities:  
Long-term debt, net of debt issuance costs of $2,184 and $8,936, respectively
318,226 321,270 
Finance lease liabilities - long-term272,817 267,443 
Operating lease liabilities - long-term44,897 44,965 
Real estate deferred gains - long-term76,108 78,009 
Pension benefit obligation20,878 22,684 
Other non-current liabilities24,976 25,635 
Total liabilities1,047,600 989,038 
Commitments and contingencies
STOCKHOLDERS' EQUITY:
Common Stock, $0.01 par value, 20,000,000 shares authorized,
     9,709,613 and 9,462,774 outstanding on July 3, 2021 and January 2, 2021, respectively
97 95 
Additional paid-in capital264,963 266,695 
Accumulated other comprehensive loss(35,490)(35,992)
Accumulated stockholders’ equity (deficit)3,612 (171,706)
Total stockholders’ equity233,182 59,092 
Total liabilities and stockholders’ equity$1,280,782 $1,048,130 
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BLUELINX HOLDINGS INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
Three Months EndedSix Months Ended
July 3, 2021June 27, 2020July 3, 2021June 27, 2020
 (In thousands)
Cash flows from operating activities:
Net income$113,458 $6,695 $175,318 $5,908 
Adjustments to reconcile net income to cash provided by operations:
Provision for (benefit from) income taxes34,908 3,438 56,654 (1,588)
Depreciation and amortization7,080 7,063 14,545 14,698 
Amortization of debt issuance costs429 947 1,032 1,903 
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)(1,967)(1,967)
Share-based compensation1,992 854 3,402 1,858 
Changes in operating assets and liabilities:
Accounts receivable(18,402)(16,702)(143,574)(71,770)
Inventories(49,291)64,655 (83,606)31,827 
Accounts payable8,125 (3,478)61,937 26,572 
Prepaid and other current assets(3,263)(194)(4,509)(3,200)
Other assets and liabilities(46,886)9,794 (61,135)9,185 
Net cash provided by operating activities47,166 72,088 22,601 12,901 
Cash flows from investing activities:
Proceeds from sale of assets290 58 2,100 102 
Property and equipment investments(1,778)(507)(2,900)(1,752)
Net cash used in investing activities(1,488)(449)(800)(1,650)
Cash flows from financing activities:
Borrowings on revolving credit facilities375,973 146,040 638,183 350,236 
Repayments on revolving credit facilities(414,076)(205,430)(606,019)(354,509)
Repayments on term loan— (8,614)(43,204)(77,852)
Proceeds from real estate financing transactions— (66)— 78,263 
Debt financing costs— (2,329)(861)(2,665)
Repurchase of shares to satisfy employee tax withholdings(5,033)(247)(5,132)(254)
Principal payments on finance lease liabilities(2,542)(2,021)(4,671)(4,583)
Net cash used in financing activities(45,678)(72,667)(21,704)(11,364)
Net change in cash— (1,028)97 (113)
Cash at beginning of period179 12,558 82 11,643 
Cash at end of period$179 $11,530 $179 $11,530 


8


BLUELINX HOLDINGS INC.
RECONCILIATION OF NON-GAAP MEASUREMENTS
(Unaudited)

The following schedule reconciles net income to Adjusted EBITDA:
Three Months EndedSix Months EndedTrailing Twelve Months
July 3, 2021June 27, 2020July 3, 2021June 27, 2020July 3, 2021June 27, 2020
(In thousands)
Net income$113,458 $6,695 $175,318 $5,908 $250,292 $(11,330)
Adjustments:
Depreciation and amortization7,080 7,063 14,545 14,698 28,748 30,099 
Interest expense, net9,143 11,535 19,586 25,915 41,085 53,015 
Term loan debt issuance costs(1)
— — 5,791 — 5,791 — 
Provision for (benefit from) income taxes34,908 3,438 56,654 (1,588)72,441 (5,365)
Share-based compensation expense1,992 854 3,402 1,858 7,536 3,109 
Amortization of deferred gains on real estate(984)(984)(1,967)(1,967)(4,009)(4,027)
Gain from sales of property(1)
— — (1,287)(525)(11,291)(3,847)
Merger and acquisition costs(1)(2)
— 609 — 1,680 245 7,131 
Restructuring and other(1)(3)
872 1,994 985 5,089 1,515 12,179 
Adjusted EBITDA$166,469 $31,204 $273,027 $51,068 $392,353 $80,964 
(1) Reflects non-recurring items of approximately $1 million and $3 million of non-beneficial items to the quarterly periods of the current and
prior year, respectively. For the year-to-date periods, reflects non-recurring items of approximately $5 million and $6 million of non-
beneficial items, respectively.

(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:

Period Ended
July 3, 2021June 27, 2020
(In thousands)
Current maturities of long term debt, gross of debt issuance costs$— $2,250 
Finance lease liabilities - short term6,379 5,958 
Long term debt, gross of debt issuance costs320,410 388,795 
Finance lease liabilities - long term272,817 266,622 
Total long-term debt599,606 663,625 
Less: available cash179 11,530 
Net Debt599,427 652,095 
Trailing twelve month Adjusted EBITDA$392,353 $80,964 
Net Leverage Ratio1.5x8.1x

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bxc2q2021conferencecallp
Divider slide 29 September, 2020 Second Quarter Results Conference Call August 4, 2021


 
1 Safe Harbor Statement -1- Note to Our Investors This presentation 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, ”be, ”will likely continue, ”continue,” “will likely result” or words or phrases of similar meaning. Forward-looking statements involve risks and uncertainties that may cause our business, strategy, or actual results to differ materially from the forward-looking statements. The forward-looking statements in this presentation 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; trends in deurbanization, housing inventory and prices; trends in residential repair and remodel activity; the influence of wood-based commodity price inflation on specialty product sales; 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 presentation 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. Non-GAAP Financial Measures. BlueLinx reports its financial results in accordance with accounting principles generally accepted in the United States (“GAAP”). We also believe that presentation of certain non-GAAP measures, such as Adjusted EBITDA, net debt, the ratio of our total net debt to Adjusted EBITDA, and free cash flow, 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. Explanations of these non-GAAP measures are included in the accompanying Appendix to this presentation, and any non-GAAP measures used herein are reconciled herein or in the financial tables in the Appendix to their most directly comparable GAAP measures. We caution that non-GAAP measures should be considered in addition to, but not as a substitute for, our reported GAAP results. Immaterial Rounding Differences. Immaterial rounding adjustments and differences may exist between slides, press releases, and previously issued presentations. This presentation and the associated remarks made during this conference call are integrally related and are intended to be presented and understood together.


 
2 • Record second quarter results. Record net income and Adjusted EBITDA, driven by specialty volume growth and margin expansion along with structural sales growth • Significant leverage reduction while enhancing liquidity. Reduced net debt outstanding by $53 million year over year; Paid off Term Loan in full in 1Q21; Excess availability and cash increased to $276 million as of quarter end • Broad-based sales increase. Overall net sales $1.3 billion, higher by 87% • Margin expansion across both product categories. Total gross margin +480 bps to 19.2%; Record specialty products gross margin +710 bps to 24.4%; Structural products gross margin +430 bps to 13.6% • Disciplined cost controls. Maintaining cost discipline; SG&A normalizing post pandemic • Improved profitability. Net income increased $107 million; earnings per diluted share of $11.61 vs. $0.71 in prior year period; Adjusted EBITDA of $166 million, up from $31 million Executive Summary Market Update and Second Quarter 2021 Performance • Single-family residential housing remains strong. Q2 single-family housing starts consistent with 1Q21 estimates; still well below prior cyclical peak. Favorable mortgage rates, low housing inventory, deurbanization and improved employment conditions continuing to support positive housing trends • Commodity wood prices are volatile. Framing Lumber is currently ~70% off its peak in May 2021 and Structural Panel prices peaked in June at $1,705/MSF but have since decreased ~50% • Builders’ Confidence Index remains elevated. NAHB Builders’ Confidence Index 60% above the 20-year average at 80 as of July 2021 • Remodeling activity continues to strengthen. LIRA Index and NAHB RMI both indicate continued R&R momentum with LIRA reaching record levels in Q2 • Economic measures trending positively. National unemployment rate down to 5.9% in June, a 60-basis point improvement from December 2020. 30-year fixed mortgage rates continue to stay at historically low levels Market Conditions Company Performance Note: All comparisons versus the prior-year period unless otherwise noted -2-


 
3 Single-Family Housing Demand Our business is correlated to single-family housing starts (SFHS) -3- Total U.S. Monthly Single-Family Residential Home Supply Months of inventory(2) NAHB “Builders’ Confidence” Market Index Composite index(4) Builders’ confidence reached a 35-year high in Nov-20 and remains elevated 50-year average 2021 SFHS annual estimate ~33% below the prior cyclical peak achieved in 2005 20-year average 20-year average 30 Year Fixed Mortgage Rates As of July 2021(3) - 200 400 600 800 1,000 1,200 1,400 1,600 1,800 2,000 2 0 0 0 2 0 0 1 2 0 0 2 2 0 0 3 2 0 0 4 2 0 0 5 2 0 0 6 2 0 0 7 2 0 0 8 2 0 0 9 2 0 1 0 2 0 1 1 2 0 1 2 2 0 1 3 2 0 1 4 2 0 1 5 2 0 1 6 2 0 1 7 2 0 1 8 2 0 1 9 2 0 2 0 2 0 2 1 E 2 0 2 2 E 2 0 2 3 E 2 0 2 4 E Total U.S. Single Family Housing Starts Housing starts in thousands(1) 0 2 4 6 8 10 12 14 2 0 0 0 2 0 0 1 2 0 0 2 2 0 0 3 2 0 0 4 2 0 0 5 2 0 0 6 2 0 0 7 2 0 0 8 2 0 0 9 2 0 1 0 2 0 1 1 2 0 1 2 2 0 1 3 2 0 1 4 2 0 1 5 2 0 1 6 2 0 1 7 2 0 1 8 2 0 1 9 2 0 2 0 2 0 2 1 0 10 20 30 40 50 60 70 80 90 100 2 0 0 0 2 0 0 1 2 0 0 2 2 0 0 3 2 0 0 4 2 0 0 5 2 0 0 6 2 0 0 7 2 0 0 8 2 0 0 9 2 0 1 0 2 0 1 1 2 0 1 2 2 0 1 3 2 0 1 4 2 0 1 5 2 0 1 6 2 0 1 7 2 0 1 8 2 0 1 9 2 0 2 0 2 0 2 1 16.6% 3.1% 0.0% 2.0% 4.0% 6.0% 8.0% 10.0% 12.0% 14.0% 16.0% 18.0% 1 9 8 0 1 9 8 2 1 9 8 4 1 9 8 6 1 9 8 8 1 9 9 0 1 9 9 2 1 9 9 4 1 9 9 6 1 9 9 8 2 0 0 0 2 0 0 2 2 0 0 4 2 0 0 6 2 0 0 8 2 0 1 0 2 0 1 2 2 0 1 4 2 0 1 6 2 0 1 8 2 0 2 0 2 0 2 2 P 2 0 2 4 P 40-year average Single-family residential home supply is 7% above the 20-year average • 2021 SFHS forecasted at 1.2 million units were consistent with 1Q21 estimates; 12% above 50-year average. Further growth expected over next 3 years(1) • Months of supply for new and existing homes increased in 2Q21 due to higher home prices and construction materials inflation slowing recent sales • Builders’ Confidence remains well above the 20-year average at 80 • Average U.S. home prices currently 16% higher than a year ago; double- digit % growth for full year 2021(1) • Low mortgage rates continue to support market demand (1) Source: Historical data is U.S. Census Bureau; Forecast: John Burns Real Estate Consulting, LLC subject limitations and disclaimers – not for redistribution (2) Source: U.S. Census Bureau. The months' supply is the ratio of houses for sale to houses sold. This statistic provides an indication of the size of the for-sale inventory in relation to the number of houses currently being sold. The months' supply indicates how long the current for-sale inventory would last given the current sales rate if no additional new houses were built. (3) Source: Historical data is Freddie Mac; Forecast: John Burns Real Estate Consulting, LLC subject limitations and disclaimers – not for redistribution. (4) Source: NAHB. The NAHB Housing Market Index (HMI) is based on a monthly survey of NAHB members designed to take the pulse of the single-family housing market. The survey asks respondents to rate market conditions for the sale of new homes at the present time and in the next six months as well as the traffic of prospective buyers of new homes.


 
4 Residential Repair & Remodel Activity Remains Healthy Elevated Repair & Remodel activity continues -4- U.S. Private Residential Construction Put-In-Place (CPP) Dollars in millions(2) LIRA Remodeling Activity Index TTM Moving Total - Dollars in Billions(3) Total Installed Base of U.S. Homes, Including Renter and Owner-Occupied Homes Homes in millions(1) $0 $200 $400 $600 $800 $1,000 $1,200 $1,400 2 0 0 2 2 0 0 3 2 0 0 4 2 0 0 5 2 0 0 6 2 0 0 7 2 0 0 8 2 0 0 9 2 0 1 0 2 0 1 1 2 0 1 2 2 0 1 3 2 0 1 4 2 0 1 5 2 0 1 6 2 0 1 7 2 0 1 8 2 0 1 9 2 0 2 0 2 0 2 1 $0 $50 $100 $150 $200 $250 $300 $350 $400 $450 1 Q 00 1 Q 01 1 Q 02 1 Q 03 1 Q 04 1 Q 05 1 Q 06 1 Q 07 1 Q 08 1 Q 09 1 Q 10 1 Q 11 1 Q 12 1 Q 13 1 Q 14 1 Q 15 1 Q 16 1 Q 17 1 Q 18 1 Q 19 1 Q 20 1 Q 21 1 Q 22 ( P ) • Annual U.S. Homes installed base forecast expects continued increases through 2025; positive for both residential construction and repair and remodel end markets • CPP and remodeling data continue to indicate continued elevating R&R activity; LIRA expected to increase and remain elevated through 1H 2022 • Strong existing home sales and record home values are fueling home improvement activity (1) Source: HIRL Research; updated annually (2) Source: Historical data is from the U.S. Census Bureau; The Value of Construction Put in Place Survey (VIP) provides monthly estimates of the total dollar value of construction work done in the U.S. The survey covers construction work done each month on new structures or improvements to existing structures for private and public sectors. (3) Source: Joint Center for Housing Studies at Harvard University. The Leading Indicator of Remodeling Activity (LIRA) provides a short-term outlook of national home improvement and repair spending to owner-occupied homes. The indicator, measured as an annual rate-of-change of its components, is designed to project the annual rate of change in spending for the current quarter and subsequent four quarters, and is intended to help identify future turning points in the business cycle of the home improvement and repair industry. 116 117 117 118 118 119 120 121 122 123 124 125 126 127 128 129


 
5 (1) Source: Random Lengths, company analysis; Jul-21 data thru 7/30/21 (2) Source: Random Lengths; company analysis; Jul-21 data thru 7/30/21 Commodity Price Environment a Key Growth Driver Wood-based commodity markets volatile in 2Q21 due to supply-demand imbalances -5- Framing Lumber Composite Index As of July 2021(1) Structural Panel Composite Index As of July 2021(2) • Significant price volatility; deflation commenced at the end of 2Q21 and has continued into 3Q21 • Lumber and panels averaged $1,200/MBF and $1,500/MSF, respectively, in 2Q21 compared to $400/MBF and $400/MSF in 2Q20 • Prices for lumber reached all-time high in May-21 before declining sharply; 7/30 lumber composite pricing at $479/MBF, close to the 5-year historical average • Panels pricing reached all-time high in late Jun-21 before retreating in Jul-21; 7/30 panels composite pricing was $795/MSF and prices are continuing to decline - 200 400 600 800 1,000 1,200 1,400 1,600 Ja n -1 5 M ar -1 5 M ay -1 5 Ju l- 1 5 Se p -1 5 N o v- 1 5 Ja n -1 6 M ar -1 6 M ay -1 6 Ju l- 1 6 Se p -1 6 N o v- 1 6 Ja n -1 7 M ar -1 7 M ay -1 7 Ju l- 1 7 Se p -1 7 N o v- 1 7 Ja n -1 8 M ar -1 8 M ay -1 8 Ju l- 1 8 Se p -1 8 N o v- 1 8 Ja n -1 9 M ar -1 9 M ay -1 9 Ju l- 1 9 Se p -1 9 N o v- 1 9 Ja n -2 0 M ar -2 0 M ay -2 0 Ju l- 2 0 Se p -2 0 N o v- 2 0 Ja n -2 1 M ar -2 1 M ay -2 1 Ju l- 2 1 Index Price TTM Avg. Index Price - 200 400 600 800 1,000 1,200 1,400 1,600 1,800 Ja n -1 5 M ar -1 5 M ay -1 5 Ju l- 1 5 Se p -1 5 N o v- 1 5 Ja n -1 6 M ar -1 6 M ay -1 6 Ju l- 1 6 Se p -1 6 N o v- 1 6 Ja n -1 7 M ar -1 7 M ay -1 7 Ju l- 1 7 Se p -1 7 N o v- 1 7 Ja n -1 8 M ar -1 8 M ay -1 8 Ju l- 1 8 Se p -1 8 N o v- 1 8 Ja n -1 9 M ar -1 9 M ay -1 9 Ju l- 1 9 Se p -1 9 N o v- 1 9 Ja n -2 0 M ar -2 0 M ay -2 0 Ju l- 2 0 Se p -2 0 N o v- 2 0 Ja n -2 1 M ar -2 1 M ay -2 1 Ju l- 2 1 Index Price TTM Avg. Index Price Jul-21 framing lumber prices were close to the 5-year average and 39% below the TTM rolling average Jul-21 structural panel prices were 120% above the 5-year average and 14% above the TTM rolling average


 
6 Key Areas of Management Focus Continuing to execute on strategic imperatives -6- • National account growth, utilizing extensive product assortment and excellent supply chain capabilities • Product category emphasis; drive specialty products growth with strategic supplier partners and marquee brands • Local market strategic share gains • Excellent customer service and satisfaction • Focus on specialized, higher- value products and services • Disciplined pricing strategy and effective price management • Emphasis on reducing wood- based commodity price deflation risk, including centralized purchasing and consignment • Realize economies of scale associated with large national network • Local sales execution strategies along with disciplined product purchasing • Focus on ensuring efficient cost of delivery • Optimize operations through organic capital investments • Working capital management initiatives • Generate cash flow to support sustained, profitable sales growth • Maintain adequate liquidity to support business initiatives and optimize net leverage • Increasing investment in fleet, facilities and technology • Building a roadmap for complementary acquisitions Organic Sales Growth 1 Margin Expansion 2 Organizational Efficiencies 3 Disciplined Capital Allocation 4


 
7 2Q21 & TTM Performance Indicators Net Sales, Gross Profit, Net Income and Adjusted EBITDA all increased significantly compared to prior year -7- Total Net Sales Dollars in millions Total Gross Profit Dollars in millions Total Adjusted EBITDA Dollars in millions Total Net Income Dollars in millions, except for per share +87% +53% Note: All comparisons versus the prior-year period unless otherwise noted $699 $1,308 $2,653 $4,070 2Q20 2Q21 2Q20 TTM 2Q21 TTM $101 $251 $371 $715 2Q20 2Q21 2Q20 TTM 2Q21 TTM $31 $166 $81 $392 2Q20 2Q21 2Q20 TTM 2Q21 TTM +435% $7 Million $0.71/Share $113 Million $11.61/Share $(11) Million $(1.20)/Share $250 Million $25.61/Share 2Q20 2Q21 2Q20 TTM 2Q21 TTM +149% +93% +384%


 
8 -8- 2Q21 & TTM Performance Indicators Strong market trends throughout the quarter contributed to year over year margin expansion Gross Margin Gross Profit / Net Sales Adjusted EBITDA Margin Adjusted EBITDA / Net Sales Operating Margin Operating Income / Net Sales SG&A Percentage of Net Sales SG&A / Net Sales +480 bps +360 bps (340) bps (300) bps Note: All comparisons versus the prior-year period unless otherwise noted 14.4% 19.2% 14.0% 17.6% 2Q20 2Q21 2Q20 TTM 2Q21 TTM 10.1% 6.7% 11.1% 8.1% 2Q20 2Q21 2Q20 TTM 2Q21 TTM 3.2% 12.0% 1.5% 9.1% 2Q20 2Q21 2Q20 TTM 2Q21 TTM +880 bps +760 bps 4.5% 12.7% 3.1% 9.6% 2Q20 2Q21 2Q20 TTM 2Q21 TTM +820 bps +650 bps


 
9 Specialty Products and Structural Products Performance Record margin expansion in specialty; continued strong net sales in both product categories in 2Q21 -9- Specialty Products Sales and Gross Margin Dollars in Millions Structural Products Sales and Gross Margin Dollars in Millions Q2 2020 Sales: $449 million Gross Margin: 17.3% Q2 2021 Sales: $675 million Gross Margin: 24.4% Q2 2020 Sales: $250 million Gross Margin: 9.3% Q2 2021 Sales: $633 million Gross Margin: 13.6% • Specialty products net sales of $675 million, 52% of total 2Q21 net sales • Specialty products gross profit $165 million, 66% of 2Q21 total • Improvement in specialty net sales and gross margin driven by volume increases and continued supply driven price increases • Structural products net sales of $633 million, 48% of total 2Q21 net sales • Structural products gross profit $86 million, 34% of 2Q21 total • Increase driven by wood-based commodity inflation; volumes down ~17% year over year attributable to inventory risk mitigation Note: All comparisons versus the prior-year period unless otherwise noted GM Rate GM Rate $453 $399 $421 $449 $496 $499 $563 $675 16.2% 16.1% 16.4% 17.3% 17.4% 17.4% 19.3% 24.4% 3Q19 4Q19 1Q20 2Q20 3Q20 4Q20 1Q21 2Q21 $226 $215 $241 $250 $375 $367 $462 $633 9.0% 8.7% 10.1% 9.3% 19.6% 10.2% 15.5% 13.6% 3Q19 4Q19 1Q20 2Q20 3Q20 4Q20 1Q21 2Q21


 
10 Effective Operating Working Capital Management Improvement in operating working capital metrics year over year and sequentially -10- Days Sales of Inventory (DSI) Number of Days Note: All comparisons versus the prior-year period unless otherwise noted Disciplined Operating Working Capital Management Dollars in millions(1) Cash Cycle Days Number of Days(2) 55 56 61 58 53 40 43 39 35 2Q19 3Q19 4Q19 1Q20 2Q20 3Q20 4Q20 1Q21 2Q21 62 62 66 65 62 48 54 50 45 2Q19 3Q19 4Q19 1Q20 2Q20 3Q20 4Q20 1Q21 2Q21 • Significant return on working capital, 62% for 2Q21 TTM • $205 million increase year over year in total operating working capital; inflation impact ~$130 million • Price inflation continued to elevate receivables and inventory; receivables currency rate of 93% • DSI improved by more than 18 days or nearly 34% for 2Q21 • Cash cycle days improved by 17 days over prior year • Anticipate meaningful working capital to cash conversion in 2H 2021 (1) Operating working capital includes accounts receivable, inventory, accounts payable and cash (2) Cash Cycle Days = Days Sales Outstanding plus Days Sales of Inventory less Days Payable Outstanding $458 $440 $418 $477 $431 $446 $471 $576 $636 0.0% 10.0% 20.0% 30.0% 40.0% 50.0% 60.0% 70.0% $200 $250 $300 $350 $400 $450 $500 $550 $600 $650 $700 2Q19 3Q19 4Q19 1Q20 2Q20 3Q20 4Q20 1Q21 2Q21 Total Operating Working Capital Return on Working Capital


 
11 Significant Reduction In Bank Debt Outstanding Reduced bank debt outstanding by $71 million year over year, supported by strong free cash flow generation -11- TTM Free Cash Flow Generation Dollars in millions(2) Bank Debt Reduction Dollars in millions 14 asset sales Estimated Annual Cash Commitments, excluding Taxes Dollars in millions(3) (1) Includes excess availability and cash on hand under our revolving credit facility due August 2026 (2) Free cash flow in a non-GAAP metric defined as total operating cash flow less total capital expenditures (3) Provided solely to illustrate potential future annual uses of cash; excludes principal payments under Term Loan, ABL and Finance Leases Note: All comparisons versus the prior-year period unless otherwise noted Excess Availability and Net Leverage Ratio (includes finance leases) Dollars in millions(1); Net Debt / TTM Adjusted EBITDA $101 $138 $276 2Q19 3Q19 4Q19 1Q20 2Q20 3Q20 4Q20 1Q21 2Q21 Excess Availability Net Leverage Ratio 10.8x 8.1x 1.5x $51 $98 $51 $86 $60 2Q20 3Q20 4Q20 1Q21 2Q21 $322 $263 $288 $359 $320 $69 $58 $43 2Q20 3Q20 4Q20 1Q21 2Q21 ABL Debt Outstanding Term Loan Debt Outstanding $391 $321 $331 $359 $320 • ABL amended and extended for additional 5 years in August 2021; Term Loan paid off in full in 1Q21 • Excess availability and cash on hand increased $138 million to $276 million • Total net leverage of 1.5x, down from 8.1x in 2Q20 and 2.5x in 1Q21 • Total net interest expense, decreased by $2.4 million for 2Q21 • $60 million FCF TTM 2Q21, despite inflation pressure, supported deleveraging • Increasing investment in capex to enhance efficiency of fleet and facilities Finance Lease Interest $24 ABL Interest $8 Capital Expenditures $12 Pension $1 Annual Cash Commitments before Taxes ~$45


 
Divider slide 29 September, 2020Appendix


 
13 Non-GAAP Measures -13- BlueLinx reports its financial results in accordance with GAAP, but we also believe 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. We caution that non-GAAP measures should be considered in addition to, but not as a substitute for, our reported GAAP results. Adjusted EBITDA. We define Adjusted EBITDA as and 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, consulting, and professional fees related to the Cedar Creek acquisition, and gains on sales of properties including amortization of deferred gains. We present Adjusted EBITDA because it is the primary measure used by management to evaluate operating performance and, we believe, helps to enhance investors’ overall understanding of the financial performance and cash flows of our business. We believe Adjusted EBITDA is helpful in highlighting operating trends. We also believe that 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 financial condition from those 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. Free Cash Flow. We define free cash flow as net cash provided by operating activities less total capital expenditures. Free cash flow is a measure used by management to assess our financial performance, and we believe it is useful for investors because it relates the operating cash flow of the company to the capital that is spent to continue and improve business operations. In particular, free cash flow indicates the amount of cash generated after capital expenditures that can be used for, among other things, investment in our business, strengthening our balance sheet, and repayment of our debt obligations. Free cash flow does not represent the residual cash flow available for discretionary expenditures since there may be other nondiscretionary expenditures that are not deducted from the measure. Free cash flow is not a presentation made in accordance with GAAP, and is not intended to present a superior measure of financial condition from those determined under GAAP. Free cash flow, as used herein, is not necessarily comparable to other similarly titled captions of other companies due to differences in methods of calculation. Net Debt and Overall Net Leverage Ratio. We determine our net debt based on our total short- and long-term debt, including our outstanding balances under our term loan and revolving credit facility and the total amount of our obligations under our financing leases, less cash and cash equivalents. We believe that net debt is useful to investors because our management reviews our net debt as part of its management of overall liquidity, financial flexibility, capital structure and leverage, and creditors and credit analysts monitor our net debt as part of their assessments of our business. We determine our overall net leverage ratio by dividing our net debt by trailing twelve-month Adjusted EBITDA. We believe that this ratio is useful to investors because it is an indicator of our ability to meet our future financial obligations. In addition, the ratio is a measure that is frequently used by investors and creditors. Our 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 our financial condition from measures and ratios determined under GAAP. In addition, our 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.


 
14 2Q20 to 2Q21 SG&A Expense Bridge Dollars in Millions -14- Supplementary Information YTD 2020 to YTD 2021 SG&A Expense Bridge Dollars in Millions


 
15 Non-GAAP Reconciliation -15- Net income (loss) $ 113,458 $ 6,695 Adjustments: Depreciation and amortization Interest expense, net Provision for income taxes Share-based compensation expense Amortization of deferred gain on real estate Merger and acquisition costs (1) Restructuring and other (2) Adjusted EBITDA $ 166,469 $ 31,204 7,080 Quarter Ended June 2021 June 2020 7,063 872 - 1,994 (984) 609 1,992 (984) 34,908 854 3,438 9,143 11,535 (1) Reflects primarily legal, professional and other integration costs related to the Cedar Creek acquisition. (2) Reflects costs related to our restructuring efforts, such as severance, net of other one-time non-operating items. For the purposes of this presentation, items may be collapsed into this or other categories w here they w ere presented seperately in other presentations such as our press release. Items w hich may be collapsed include, but are not limited to, pension settlement and w ithdraw al costs and inventory step-up adjustments, among others.


 
16 Non-GAAP Reconciliation -15- Net income (loss) $ 250,292 $ 143,529 $ 80,882 $ 50,829 $ (11,330) $ (11,724) $ (17,656) $ (23,633) $ (26,486) $ (41,345) Adjustments: Depreciation and amortization Interest expense, net Term loan debt issuance costs (1) Provision for income taxes Share-based compensation expense Amortization of deferred gain on real estate Gain from sales of property (1) Real estate financing costs (1) Merger and acquisition costs (1)(2) Restructuring and other (1)(3) Adjusted EBITDA $ 392,353 $ 257,088 $ 170,394 $ 142,773 $ 80,964 $ 74,698 $ 71,430 $ 67,294 $ 64,934 $ 76,994 Trailing Twelve Months for the Quarter Ended June 2021 28,748 41,085 5,791 72,441 7,536 (4,009) - 3,649 - - 10,193 (5,365) (6,453) (3,952) (4,200) (11,732) 3,010 3,109 2,890 2,592 3,097 (In thousands) March 2021 28,731 43,477 40,971 10,455 4,788 7,131 10,715 14,224 17,674 19,017 - - 1,793 1,793 1,793 1,793 - - - 5,791 (9,760) (3,940) (4,027) (3,994) (3,960) (4,273) (4,502) 854 2,637 (12,493) (3,847) - - 53,745 29,609 30,099 30,539 30,232 30,057 30,548 50,382 53,015 55,197 54,218 53,881 (1) Reflects non-recurring items of approximately $1 million and $3 million of non-beneficial items to the quarterly periods of the current and prior year, respectively. For the year-to-date periods, reflects non-recurring items of approximately $5 million and $6 million of non-beneficial items, respectively. For more details on the portions of these TTM results reported which are non-recurring in the current quarter, please consult our press release. (3) Reflects costs related to our restructuring efforts, such as severance, net of other one-time non-operating items. For the purposes of this presentation, items may be collapsed into this or other categories where they were presented seperately in other presentations such as our press release. Items which may be collapsed include, but are not limited to, pension settlement and withdrawal costs and inventory step-up adjustments, among others. 5,992 (4,008) (10,529) 1,924 3,826 (2) Reflects primarily legal, professional and other integration costs related to the Cedar Creek acquisition. 8,602 10,386 9,342 8,814 4,489 6,398 (4,009) (13,607) (13,082) (9,798) - 245 1,515 (11,291) - 26,466 20,376 (11,291) March 2019 30,489 52,222 - (13,140) 6,777 (4,851) - 14,199 June 2019December 2020 28,901 47,414 September 2020 June 2020 March 2020 December 2019 September 2019 -


 
17 Non-GAAP Reconciliation -16- Net cash provided (used) by Operations (1) Property and equipment investments Free Cash Flow $ 45,388 $ (25,687) $ (21,123) $ 61,304 $ 71,581 $ (60,432) $ 25,849 $ 13,889 $ 4,711 $ 27,319 (1) Net cash provided (used) by Operations includes items contained within the current presentation of our statement of cash flows for all periods presented and may differ from past presentations. Please consult our Form 10-Q for more information on presentation of items within our consolidated statements of cash flows. (191) (507) (1,245) (1,470) (1,537)(1,746) Free Cash Flow for the Quarter Ended (In thousands) $ 15,426 $ 5,272 (561) December 2020 $ (19,377) September 2020 June 2020 March 2020 December 2019 September 2019 June 2019 $ 61,495 $ 72,088 $ (59,187) June 2021 $ 47,166 (1,778) March 2021 $ (24,565) (1,122)


 
18 Non-GAAP Reconciliation -17- Current maturities of long-term debt, gross of debt issuance costs $ - $ - $ 1,245 $ 1,609 $ 2,250 $ 2,250 $ 2,250 $ 1,864 $ 1,491 $ 1,800 Finance lease liabilities - short term Long-term debt, gross of debt issuance costs Finance lease liabiities - long-term(1) Total Long-Term Debt $ 599,606 $ 639,788 $ 604,569 $ 594,010 $ 663,625 $ 734,164 $ 671,080 $ 710,398 $ 713,445 $ 721,590 Less: Available Cash Net Debt $ 599,427 $ 639,609 $ 604,487 $ 583,856 $ 652,095 $ 721,606 $ 659,437 $ 697,551 $ 700,783 $ 708,908 Trailing Twelve Month Adjusted EBITDA Net Leverage Ratio 12,682 76,994 9.2x Net Debt and Net Leverage Ratio for the Trailing Twelve Months for the Quarter Ended March 2019 7,464 569,926 142,400 82 170,394 3.5x December 2020 5,675 330,206 267,443 8,166 September June 2020 March 2020 December 2019 September June 2019 5,469 5,958 5,924 6,385 8,373 514,850 319,179 388,795 456,798 470,920 500,178 12,662 267,753 266,622 269,192 191,525 199,983 188,938 (1) Finance lease liabilities - long-term include the combination of f inance lease liabilities, long-term, and real estate f inance obligations in those periods w hen real estate f inance obligations w ere presented. 4.1x 8.1x 9.7x 9.2x 10.4x 10.8x 179 257,088 2.5x (In thousands) 142,773 80,964 74,698 71,430 67,294 64,934 10,154 11,530 12,558 11,643 12,847 March 2021 7,459 358,514 273,815 179 392,353 1.5x June 2021 6,379 320,410 272,817