Bluelinx Holdings Inc (ticker: BXC, exchange: New York Stock Exchange (.N))
News Release -
3-Nov-2011
BlueLinx Announces Third-Quarter ResultsNet Loss Narrows to $6.2 Million for the Quarter; Specialty Unit Volume Growth of 11.4% Reported for the Quarter
ATLANTA, Nov 3, 2011 (GlobeNewswire via COMTEX) -- BlueLinx Holdings Inc. (NYSE:BXC), a leading distributor of building products in North America, today reported financial results for the third quarter ended October 1, 2011.
The Company incurred a net loss of $6.2 million, or $0.12 per diluted share for the third quarter of 2011, compared to a net loss of $14.9 million, or $0.48 per diluted share, for the third quarter of 2010. Revenues for the third quarter were $472.9 million, up 1.8% from $464.7 million for the third quarter of 2010. The increase reflects favorable year-over-year product pricing and flat overall unit volume. Specialty sales increased 12.4% driven by an 11.4% increase in unit volume as the Company continues its focus on these value-added products. Structural sales declined 12.4% driven by a 14.0% decrease in unit volume.
Gross profit for the third quarter totaled $58.3 million, up 16.7% from $49.9 million in the year-ago period. Gross margins increased to 12.3% from the 10.7% generated in the year-ago period, reflecting growth in higher-margin specialty products and improved structural product margins. These margins improved as a result of the Company's ongoing initiatives to increase margins across all product categories combined with increases in underlying product prices. Third-quarter operating expenses of $57.1 million were flat compared to the same period a year ago, and included $2.1 million and $1.9 in net gains from significant special items in 2011 and 2010 respectively. Reported operating profit for the quarter was $1.2 million, compared to an operating loss of $7.3 million a year ago.
"A combination of solid execution and our focus on value-added product strategies, coupled with a slight pick-up in demand late in the quarter, helped drive improved third-quarter results," said George Judd, president and chief executive officer. "We narrowed our comparable third quarter adjusted net loss by $5.4 million relative to a year ago, expanded gross margins across both product categories and generated $17.5 million in cash during the quarter while operating in a highly competitive and challenging marketplace. We believe this performance demonstrates the positive impact of our operating strategies and initiatives.
"We continue to seize opportunities for profitable growth by focusing on growing our specialty business, enhancing our customer service, and maximizing the efficiency of our operations," Mr. Judd said.
For the nine months ended October 1, 2011, net loss totaled $28.3 million, or $0.75 per diluted share, compared with $33.0 million, or $1.08 per diluted share, a year ago. Revenues for the nine months totaled $1.36 billion, down 5.0% from $1.44 billion the same period a year ago, reflecting lower structural product unit volume and product prices, partially offset by a 7.7% increase in specialty product unit volume and increased specialty product pricing. Gross profit for the nine months ended October 1, 2011 totaled $162.2 million and gross margin was 11.9%, compared with $166.3 million and 11.6% a year earlier. Total operating expenses decreased to $167.9 million from $178.0 million a year ago, and included $8.8 million and $1.9 million in net gains from significant special items, respectively.
The Company's operating results for the 2011 and 2010 third quarter and year-to-date periods, adjusted for significant special 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
--------------------------------------------------------------------------
Nine Months
(unaudited) Quarters Ended Ended
----------------- ----------------
October October October October
1, 2, 1, 2,
2011 2010 2011 2010
------------------------------------- -------- ------- ------- -------
Pretax loss ($6.1) ($15.6) ($28.2) ($33.7)
Gain from sale of certain properties -- -- (6.9) --
Gain on modification of lease
agreement (2.0) -- (2.0) --
Changes associated with the
ineffective interest rate swap, net -- (1.2) (1.7) (3.2)
Gain from property insurance
settlement (1.2) -- (1.2) --
Severance related costs 1.1 0.3 1.3 0.3
OSB lawsuit settlement gain -- (5.2) -- (5.2)
Tender offer expenses -- 3.0 -- 3.0
Write-off of debt issuance costs -- 0.2 -- 0.2
-------- ------- ------- -------
Adjusted pretax loss (8.2) (18.5) (38.7) (38.6)
Adjusted benefit from income taxes (3.1) (7.9) (14.8) (15.6)
-------- ------- ------- -------
Adjusted net loss ($5.1) ($10.6) ($23.9) ($23.0)
======== ======= ======= =======
Diluted weighted average shares 51.2 30.7 37.7 30.7
======== ======= ======= =======
Adjusted diluted net loss per share
applicable to common shares ($0.10) ($0.34) ($0.63) ($0.75)
======== ======= ======= =======
For the quarter and year-to-date periods ended October 1, 2011, the above table reflects the following events: (i) the Company recorded a gain on the sales of certain properties; (ii) the Company recorded a gain on the modification of a lease agreement; (iii) the Company recorded the effect of a reduction in the fair value of its terminated ineffective interest rate swap partially offset by the continued amortization of the accumulated other comprehensive loss related to the ineffective interest rate swap into interest expense; (iv) the Company recorded a gain from a property insurance settlement; and (v) the Company recorded certain severance costs. The adjusted benefit from income taxes reflected in the table is comprised of the Company's effective tax rate excluding the valuation allowance related to its deferred tax assets and the tax effect of significant special items. A tax benefit related to our intra-period income tax allocation to other comprehensive income is included as well for the nine months ended October 1, 2011. The valuation allowance recorded for the quarter and year-to-date periods are $2.4 million and $10.9 million, respectively. The adjusted benefit from income taxes assumes that the Company's deferred tax assets will be realized.
For the quarter and year-to-date periods ended October 2, 2010, the above table reflects the following events: (i) the Company recorded the effect of a reduction to the fair value of its ineffective interest rate swap offset by the continued amortization of the other comprehensive loss related to the ineffective interest rate swap into interest expense; (ii) the Company recorded certain severance costs; (iii) the Company received payment for a litigation settlement; (iv) the Company incurred expenses from the terminated tender offer; and (v) the Company amended its credit facility resulting in a non-cash charge due to the write-off of associated debt issuance cost. The adjusted benefit from income taxes reflected in the table is comprised of the Company's effective tax rate excluding the valuation allowance related to its deferred tax assets, a tax benefit related to our intra-period income tax allocation to other comprehensive income, a benefit related to an additional 2009 income tax refund, and the tax effect of significant special items. The valuation allowance recorded for the quarter and year-to-date periods are $6.0 million and $13.0 million, respectively. The adjusted benefit from income taxes assumes that the Company's deferred tax assets will be realized.
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 404-537-3406, Conference ID# 21379493. 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.
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 approximately 60 distribution centers. 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 BlueLinx' control that may cause its business, strategy or actual results to differ materially from the forward-looking statements. These risks and uncertainties may include, among other things: changes in the supply and/or demand for products that it distributes, 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 1, 2011 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 -
BlueLinx Holdings Inc.
Statements of Operations
in thousands, except per share data
Quarters Ended Nine Months Ended
------------------------ --------------------------
October 1, October 2, October 1, October 2,
2011 2010 2011 2010
----------- ----------- ------------ ------------
(unaudited) (unaudited) (unaudited) (unaudited)
Net sales $ 472,898 $ 464,690 $ 1,364,313 $ 1,436,521
Cost of sales 414,620 414,748 1,202,121 1,270,182
----------- ----------- ------------ ------------
Gross profit 58,278 49,942 162,192 166,339
----------- ----------- ------------ ------------
Operating expenses:
Selling, general, and
administrative 54,537 54,121 159,760 167,724
Depreciation and
amortization 2,559 3,111 8,120 10,289
----------- ----------- ------------ ------------
Total operating expenses 57,096 57,232 167,880 178,013
----------- ----------- ------------ ------------
Operating income (loss) 1,182 (7,290) (5,688) (11,674)
Non-operating expenses:
Interest expense 6,963 9,121 23,754 24,641
Changes associated with the
ineffective interest rate
swap, net -- (1,156) (1,751) (3,217)
Write-off of debt issuance
costs -- 183 -- 183
Other expense, net 333 192 485 443
----------- ----------- ------------ ------------
Loss before provision for
(benefit from) income taxes (6,114) (15,630) (28,176) (33,724)
Provision for (benefit from)
income taxes 94 (778) 139 (726)
----------- ----------- ------------ ------------
Net loss $ (6,208) $ (14,852) $ (28,315) $ (32,998)
----------- ----------- ------------ ------------
Basic and diluted weighted
average number of common
shares
outstanding 51,183 30,714 37,696 30,667
=========== =========== ============ ============
Basic and diluted net loss
per share applicable to
common
shares $ (0.12) $ (0.48) $ (0.75) $ (1.08)
=========== =========== ============ ============
BlueLinx Holdings Inc.
Balance Sheets
in thousands
October 1, January 1,
2011 2011
----------- ----------
(unaudited)
Assets:
Current assets:
Cash and cash equivalents $ 5,890 $ 14,297
Receivables, net 184,737 119,202
Inventories, net 203,777 188,250
Deferred income tax
assets, net 59 143
Other current assets 24,699 22,768
----------- ----------
Total current assets 419,162 344,660
----------- ----------
Property, plant, and
equipment:
Land and land
improvements 51,930 52,540
Buildings 97,825 96,720
Machinery and equipment 75,928 70,860
Construction in progress 282 2,028
----------- ----------
Property, plant, and
equipment, at cost 225,965 222,148
Accumulated depreciation (98,214) (92,517)
----------- ----------
Property, plant, and
equipment, net 127,751 129,631
Other non-current assets 24,390 50,728
----------- ----------
Total assets $ 571,303 $ 525,019
=========== ==========
Liabilities:
Current liabilities:
Accounts payable $ 89,468 $ 62,827
Bank overdrafts 30,322 23,089
Accrued compensation 4,373 4,594
Current maturities of
long-term debt 36,029 1,190
Other current liabilities 21,115 16,792
----------- ----------
Total current liabilities 181,307 108,492
----------- ----------
Non-current liabilities:
Long-term debt 329,351 381,679
Deferred income taxes 40 192
Other non-current
liabilities 27,845 33,665
----------- ----------
Total liabilities 538,543 524,028
----------- ----------
Stockholders' Equity:
Common stock 618 327
Additional paid-in
capital 207,238 147,427
Accumulated other
comprehensive loss (7,376) (7,358)
Accumulated deficit (167,720) (139,405)
----------- ----------
Total stockholders' equity 32,760 991
----------- ----------
Total liabilities and
stockholders' equity $ 571,303 $ 525,019
=========== ==========
BlueLinx Holdings Inc.
Statements of Cash Flows
in thousands
Periods Ended
------------------------
October 1, October 2,
2011 2010
----------- -----------
(unaudited) (unaudited)
Cash flows from operating activities:
Net loss $ (28,315) $ (32,998)
Adjustments to reconcile net loss
to net cash used in operations:
Depreciation and amortization 8,120 10,289
Amortization of debt issuance costs 2,029 1,026
Payment from terminating the
Georgia-Pacific supply agreement -- 4,706
Gain from sale of properties (6,939) --
Gain from property insurance
settlement (1,230) --
Changes associated with the
ineffective interest rate swap (1,751) (3,217)
Write-off of debt issuance costs -- 183
Gain on modification of lease
agreement (1,971) --
Deferred income tax benefit (282) (621)
Share-based compensation expense 1,578 2,880
Decrease in restricted cash related
to the swap, insurance, and other 443 6,009
Changes in assets and liabilities:
Receivables (65,535) (47,294)
Inventories (15,527) (22,384)
Accounts payable 26,641 16,071
Changes in other working capital 1,365 21,285
Other (2,174) (3,849)
----------- -----------
Net cash used in operating activities (83,548) (47,914)
----------- -----------
Cash flows from investing activities:
Property, plant, and equipment
investments (6,032) (2,689)
Proceeds from disposition of assets 8,994 689
----------- -----------
Net cash provided by (used in)
investing activities 2,962 (2,000)
----------- -----------
Cash flows from financing activities:
Repurchase of common stock -- (583)
Increase in borrowings from the
revolving credit facility 21,235 45,996
Payment of principal on mortgage (38,724) --
Payments on capital lease obligations (1,224) (564)
Increase in bank overdrafts 7,233 3,441
Decrease (increase) in restricted cash
related to the mortgage 27,724 (8,397)
Debt financing costs (2,647) (6,521)
Proceeds from stock offering less
expenses paid 58,582 --
Other -- 6
----------- -----------
Net cash provided by financing
activities 72,179 33,378
----------- -----------
Decrease in cash (8,407) (16,536)
Balance, beginning of period 14,297 29,457
----------- -----------
Balance, end of period $ 5,890 $ 12,921
----------- -----------
Non Cash Transactions:
Capital Leases $ 3,147 $ 1,889
----------- -----------
BlueLinx Holdings Inc.
Adjusted Pre-Tax Loss
in thousands, except for per share amounts
Quarters Ended Nine Months Ended
------------------------ ------------------------
October 1, October 2, October 1, October 2,
2011 2010 2011 2010
----------- ----------- ----------- -----------
(unaudited) (unaudited) (unaudited) (unaudited)
Pretax loss $ (6,114) $ (15,630) $ (28,176) $ (33,724)
Gain from sale of certain properties -- -- (6,939) --
Gain on modification of lease
agreement (1,971) -- (1,971) --
Changes associated with the
ineffective interest rate swap, net -- (1,156) (1,751) (3,217)
Gain from property insurance
settlement (1,230) -- (1,230) --
Severance related costs 1,139 342 1,346 342
OSB lawsuit settlement gain -- (5,236) -- (5,236)
Tender offer expenses -- 3,030 -- 3,030
Write-off of debt issuance costs -- 183 -- 183
----------- ----------- ----------- -----------
Adjusted pretax loss (8,176) (18,467) (38,721) (38,622)
Adjusted benefit from income taxes (3,062) (7,906) (14,807) (15,633)
----------- ----------- ----------- -----------
Adjusted net loss $ (5,114) $ (10,561) $ (23,914) $ (22,989)
=========== =========== =========== ===========
Diluted weighted average shares 51,183 30,714 37,696 30,667
=========== =========== =========== ===========
Adjusted diluted net loss per share
applicable to common shares $ (0.10) $ (0.34) $ (0.63) $ (0.75)
=========== =========== =========== ===========
BlueLinx Holdings Inc.
Reconciliation of GAAP Net Loss to Adjusted Net Loss
in thousands
Quarters Ended Nine Months Ended
------------------------ ------------------------
October 1, October 2, October 1, October 2,
2011 2010 2011 2010
----------- ----------- ----------- -----------
(unaudited) (unaudited) (unaudited) (unaudited)
GAAP net loss $ (6,208) $ (14,852) $ (28,315) $ (32,998)
OSB lawsuit settlement gain -- (5,236) -- (5,236)
Tender offer expenses -- 3,030 -- 3,030
Write-off of debt issuance costs -- 183 -- 183
Gain from sale of certain
properties -- -- (6,939) --
Gain from property insurance
settlement (1,230) -- (1,230) --
Severance related costs 1,139 342 1,346 342
Gain on modification of lease
agreement (1,971) -- (1,971) --
Changes associated with the
ineffective interest rate swap,
net -- (1,156) (1,751) (3,217)
Tax effect of selected charges 796 1,095 4,072 1,890
Valuation allowance 2,360 6,033 10,874 13,017
----------- ----------- ----------- -----------
Adjusted net loss $ (5,114) $ (10,561) $ (23,914) $ (22,989)
=========== =========== =========== ===========
This news release was distributed by GlobeNewswire, www.globenewswire.com
SOURCE: BlueLinx Corporation
CONTACT: Doug Goforth, CFO & Treasurer
BlueLinx Holdings Inc.
(770) 953-7505
Investor Relations:
Maryon Davis, Director Finance & IR
(770) 221-2666
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Bluelinx Holdings Inc
