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8-K - FORM 8-K - BlueLinx Holdings Inc.c92009e8vk.htm
EX-99.2 - EXHIBIT 99.2 - BlueLinx Holdings Inc.c92009exv99w2.htm
Exhibit 99.1
(BLUELINK LOGO)
4300 Wildwood Parkway
Atlanta, GA 30339
1-888-502-BLUE
www.BlueLinxCo.com
     
Doug Goforth, CFO & Treasurer
  Investor Relations:
BlueLinx Holdings Inc.
  Russ Zukowski, Vice President Finance
(770) 953-7505
  (770) 953-7620
FOR IMMEDIATE RELEASE
BLUELINX ANNOUNCES THIRD-QUARTER RESULTS
— Net Loss of $13.5 Million on 38% Revenue Decline —
— Gross Margin of 12.3% —
ATLANTA — November 5, 2009 — BlueLinx Holdings Inc. (NYSE:BXC), a leading distributor of building products in North America, today reported financial results for the third quarter ended October 3, 2009.
The Company incurred a net loss of $13.5 million, or $0.44 per diluted share for the third quarter of 2009, compared with a net loss of $2.6 million, or $0.08 per diluted share, in the year-ago period. Revenues decreased 38% to $449 million from $727 million for the same period a year ago. Overall unit volume fell 32%. The sales decline was mainly due to lower unit volumes in both structural and specialty products driven predominately by a 31% decline in housing starts relative to year-ago levels and lower average structural product prices.
Gross profit for the third quarter totaled $55.3 million, down 33.6% from $83.2 million in the prior-year period, reflecting lower unit volume associated with the decline in housing starts and lower underlying product prices. Gross margins of 12.3% increased from the 11.5% margins generated in the year earlier period. Total operating expenses decreased $19.8 million, or 25% from the same period a year ago, as the Company aligned its cost structure to the current operating environment. Reported operating loss for the quarter was $3.6 million, compared with operating income of $4.5 million a year ago.
“Although demand remains near all time lows, I believe that 2009 represents the bottom of this prolonged decline. Long-term demand for housing remains favorable and we are now focused on increasing our share of the market” said BlueLinx President and CEO George Judd. “In spite of the weak structural product market, the Company produced gross margins of 12.3% which is significantly higher than historical margins.”
For the nine months ended October 3, 2009, net loss totaled $73.5 million, or $2.37 per diluted share, on revenues of $1.28 billion, compared with a net loss of $6.6 million, or $0.21 per diluted share, on revenues of $2.28 billion a year ago. The decline in income and revenue was largely due to the 43% decline in housing construction activity relative to the prior period, as well as various charges taken during the nine month period including a tax valuation allowance adjustment of $45.7 million, facility consolidation and severance related costs, and interest charges associated with our ineffective interest rate swap. These charges are quantified below.
Gross profit for the nine months ended October 3, 2009 totaled $147.9 million and gross margin was 11.6%, compared with $268.5 million and 11.8%, respectively, a year earlier. Operating expenses declined $91.3 million, or 36.4%, from $250.7 million a year ago.

 

 


 

BlueLinx 3Q ‘09 Press Release
The Company’s operating results for the third quarter of 2009 and the year-to-date period, adjusted for selected items, are shown in the following table (see accompanying financial schedules for full financial details and reconciliations of non-GAAP financial measures to their GAAP equivalents):
                 
in millions, except per share amounts   Quarter
Ended
    Nine months
Ended
 
(unaudited)   October 3, 2009     October 3, 2009  
Pretax loss
    ($13.3 )     ($45.3 )
Gain on early cancellation of Master Supply Agreement with G-P
    (0.1 )     (17.6 )
Gain on sale of certain surplus properties
    (0.2 )     (4.4 )
Charges associated with ineffective interest rate swap
    1.4       7.3  
Facility consolidations & severance related costs
          2.2  
Write-off of debt issuance costs
          1.4  
 
           
Adjusted pretax loss
    (12.2 )     (56.4 )
Adjusted benefit from income taxes
    (5.5 )     (23.5 )
 
           
Adjusted net loss
    ($6.7 )     ($32.9 )
 
           
Diluted weighted average shares
    30.9       31.0  
 
           
Adjusted diluted net loss per share applicable to common shares
    ($0.22 )     ($1.06 )
 
           
The above table reflects the following events which occurred during the third quarter and the year-to-date period: (i) the Company reached an agreement with Georgia-Pacific LLC (“G-P”) to cancel our Master Supply Agreement one year prior to the original expiration date, with G-P agreeing to make four quarterly payments to BlueLinx starting May 1, 2009; (ii) the Company sold certain excess property during the quarter and in the year-to-date period; (iii) the Company reduced its borrowings during the third quarter under its revolving credit facility by $25 million resulting in a non-cash interest charge related to its ineffective interest rate swap. In the year-to-date period, the Company reduced its borrowings under its revolving credit facility by $100 million resulting in a non-cash interest charge; (iv) the Company recorded other restructuring costs related to facility consolidations and severance expense; and (v) the Company wrote-off a portion of its debt issuance costs related to the Company’s decision to lower its revolving credit facility from $800 million to $500 million which resulted in a non-cash charge. The tax provision reflected in the table is based on the Company’s effective tax rate excluding the valuation allowance recorded against its deferred tax asset of $5.1 million and $45.7 million for the third quarter and year-to-date period, respectively.
Conference Call
BlueLinx will host a conference call today at 10:00 a.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 706-645-9291, Conference ID# 38607611. 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 web site, where a replay of the webcast will be available for 90 days.

 

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BlueLinx 3Q ‘09 Press Release
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.
About BlueLinx Holdings Inc.
Headquartered in Atlanta, Georgia, BlueLinx Holdings Inc., operating through its wholly owned subsidiary BlueLinx Corporation, is a leading distributor of building products in North America. Employing approximately 2,000 people, BlueLinx offers greater than 10,000 products from over 750 suppliers to service approximately 11,500 customers nationwide, including dealers, industrial manufacturers, manufactured housing producers and home improvement retailers. The company operates its distribution business from sales centers in Atlanta and Denver, and its network of more than 70 warehouses. BlueLinx is traded on the New York Stock Exchange under the symbol BXC. Additional information about BlueLinx can be found on its Web site 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 outlook on the housing industry. 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 our control, that may cause our 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 supply and/or demand for products that we distribute, especially as a result of conditions in the residential housing market; general economic and business conditions in the United States; the activities of competitors; changes in significant operating expenses; changes in the availability of capital including the availability of residential mortgages; the ability to identify acquisition opportunities and effectively and cost-efficiently integrate acquisitions; adverse weather patterns or conditions; acts of war or terrorist activities; variations in the performance of the financial 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 3, 2009 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, changes in expectation or otherwise, except as required by law.
- Tables to Follow -

 

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BlueLinx Holdings Inc.
Statements of Operations

     in thousands, except per share data
                                 
    Quarters Ended     Nine Months Ended  
    October 3,     September 27,     October 3,     September 27,  
    2009     2008     2009     2008  
    (unaudited)     (unaudited)     (unaudited)     (unaudited)  
 
                               
Net sales
  $ 449,363     $ 726,756     $ 1,280,000     $ 2,278,185  
Cost of sales
    394,058       643,507       1,132,119       2,009,698  
 
                       
Gross profit
    55,305       83,249       147,881       268,487  
 
                       
Operating expenses:
                               
Selling, general, and administrative
    55,024       73,793       163,744       235,655  
Net gain from terminating the Georgia-Pacific supply agreement
                (17,554 )      
Depreciation and amortization
    3,882       4,940       13,153       15,011  
 
                       
Total operating expenses
    58,906       78,733       159,343       250,666  
 
                       
 
Operating (loss) income
    (3,601 )     4,516       (11,462 )     17,821  
Non-operating expenses:
                               
Interest expense
    7,987       8,791       24,610       27,530  
Charges associated with ineffective interest rate swap
    1,431             7,341        
Write-off of debt issuance costs
                1,407        
Other expense, net
    324       65       482       385  
 
                       
 
                               
Loss before provision for (benefit from) income taxes
    (13,343 )     (4,340 )     (45,302 )     (10,094 )
Provision for (benefit from) income taxes
    120       (1,746 )     28,186       (3,508 )
 
                       
 
Net loss
  $ (13,463 )   $ (2,594 )   $ (73,488 )   $ (6,586 )
 
                       
 
                               
Basic weighted average number of common shares outstanding
    30,948       31,150       31,019       31,053  
 
                       
Basic net loss per share applicable to common shares
  $ (0.44 )   $ (0.08 )   $ (2.37 )   $ (0.21 )
 
                       
Diluted weighted average number of common shares outstanding
    30,948       31,150       31,019       31,053  
 
                       
Diluted net loss per share applicable to common shares
  $ (0.44 )   $ (0.08 )   $ (2.37 )   $ (0.21 )
 
                       

 

 


 

BlueLinx Holdings Inc.
Balance Sheets

     in thousands
                 
    October 3,     January 3,  
    2009     2009  
    (unaudited)        
 
               
Assets:
               
Current assets:
               
Cash and cash equivalents
  $ 25,498     $ 150,353  
Receivables, net
    168,656       130,653  
Inventories, net
    173,123       189,482  
Deferred income tax assets
    578       11,868  
Other current assets
    34,356       37,351  
 
           
Total current assets
    402,211       519,707  
 
           
 
               
Property, plant, and equipment:
               
Land and improvements
    52,719       53,426  
Buildings
    95,968       96,159  
Machinery and equipment
    68,906       70,491  
Construction in progress
    1,150       2,035  
 
           
Property, plant, and equipment, at cost
    218,743       222,111  
Accumulated depreciation
    (78,866 )     (69,336 )
 
           
Property, plant, and equipment, net
    139,877       152,775  
Non-current deferred income tax assets
          17,468  
Other non-current assets
    42,437       42,457  
 
           
Total assets
  $ 584,525     $ 732,407  
 
           
 
               
Liabilities:
               
Current liabilities:
               
Accounts payable
  $ 108,537     $ 78,367  
Bank overdrafts
    20,016       24,715  
Accrued compensation
    5,245       11,552  
Current maturities of long-term debt
          60,000  
Other current liabilities
    26,696       24,546  
 
           
Total current liabilities
    160,494       199,180  
 
           
Noncurrent liabilities:
               
Long-term debt
    341,669       384,870  
Non-current deferred income tax liabilities
    578        
Other non-current liabilities
    42,755       45,505  
 
           
Total liabilities
    545,496       629,555  
 
           
 
               
Shareholders’ Equity:
               
Common stock
    323       323  
Additional paid in capital
    144,462       144,148  
Accumulated other comprehensive loss
    (7,569 )     (16,920 )
Accumulated deficit
    (98,187 )     (24,699 )
 
           
Total shareholders’ equity
    39,029       102,852  
 
           
Total liabilities and shareholders’ equity
  $ 584,525     $ 732,407  
 
           

 

 


 

BlueLinx Holdings Inc.
Statements of Cash Flows

     in thousands
                 
    Nine Months Ended  
    October 3,     September 27,  
    2009     2008  
    (unaudited)     (unaudited)  
 
               
Cash flows from operating activities:
               
Net loss
  $ (73,488 )   $ (6,586 )
Adjustments to reconcile net loss to cash (used in) provided by operations:
               
Depreciation and amortization
    13,153       15,011  
Amortization of debt issuance costs
    1,843       1,823  
Net gain from terminating the Georgia-Pacific supply agreement
    (17,554 )      
Payments from terminating the Georgia-Pacific supply agreement
    9,412        
Gain from sale of properties
    (4,406 )      
Prepayment fees associated with sale of facility
    616        
Charges associated with ineffective interest rate swap
    7,341        
Write-off of debt issuance costs
    1,407        
Non-cash vacant property charges
    457       1,640  
Deferred income tax provision (benefit)
    27,228       (3,506 )
Share-based compensation expense
    2,170       2,163  
Excess tax benefits from share-based compensation arrangements
          (76 )
Decrease in restricted cash
    3,380       5,970  
Changes in assets and liabilities:
               
Receivables
    (38,003 )     18,698  
Inventories
    16,359       74,910  
Accounts payable
    30,170       (35,875 )
Changes in other working capital
    6,611       28,895  
Other
    (192 )     1,968  
 
           
Net cash (used in) provided by operating activities
    (13,496 )     105,035  
 
           
 
               
Cash flows from investing activities:
               
Property, plant, and equipment investments
    (952 )     (2,614 )
Proceeds from disposition of assets
    8,454       848  
 
           
Net cash provided by (used in) investing activities
    7,502       (1,766 )
 
           
 
               
Cash flows from financing activities:
               
Repurchase of common stock
    (1,862 )      
Proceeds from stock options exercised
          434  
Excess tax benefits from share-based compensation arrangements
          76  
Decrease in revolving credit facility
    (100,000 )     (27,535 )
Payment of principal on mortgage
    (3,201 )      
Prepayment fees associated with sale of facility
    (616 )      
Decrease in bank overdrafts
    (4,699 )     (15,450 )
Increase in restricted cash related to the mortgage
    (8,442 )     (5,461 )
Other
    (41 )     6  
 
           
Net cash used in financing activities
    (118,861 )     (47,930 )
 
           
 
               
(Decrease) increase in cash
    (124,855 )     55,339  
Balance, beginning of period
    150,353       15,759  
 
           
Balance, end of period
  $ 25,498     $ 71,098  
 
           

 

 


 

BlueLinx Holdings Inc.
Reconciliation of GAAP Net Loss to Adjusted Net Loss

     in thousands
                 
    Quarter Ended     Nine Months Ended  
    October 3,     October 3,  
GAAP Reconciliation   2009     2009  
    (unaudited)     (unaudited)  
 
               
GAAP net loss
  $ (13,463 )   $ (73,488 )
Gain on early cancellation of Master Supply Agreement with G-P
    (144 )     (17,554 )
Gain from sale of certain surplus properties
    (169 )     (4,406 )
Facility consolidations & severance related costs
          2,153  
Charges associated with ineffective interest rate swap
    1,431       7,341  
Write-off of debt issuance costs
          1,407  
Tax effect of selected charges
    509       6,037  
Valuation allowance
    5,150       45,660  
 
           
Adjusted net loss
  $ (6,686 )   $ (32,850 )