– Third-Quarter Revenue Growth of 12.3% –
– Third-Quarter Same Center Revenue Growth of 14.2% –
– Third-Quarter Adjusted EBITDA of $6.1 Million –
ATLANTA, Oct. 30, 2013 (GLOBE NEWSWIRE) -- BlueLinx Holdings Inc. (NYSE:BXC), a leading distributor of building products in North America, today reported financial results for the fiscal third quarter ended September 28, 2013.
Revenues for the fiscal third quarter increased 12.3% to $558.0 million from $496.8 million for the same period a year ago. Overall unit volume increased 11.9% compared to the same period a year ago. On a comparable basis, same center revenues for the fiscal third quarter increased 14.2%. The Company incurred a net loss of $3.2 million, or $0.04 per diluted share for the fiscal third quarter of 2013, compared with a net profit of $3.1 million, or $0.05 per diluted share, for the fiscal third quarter of 2012. After adjusting for significant special items, fiscal third quarter adjusted net loss was $2.2 million compared to an adjusted net loss of $3.7 million for the same period a year ago.
Adjusted EBITDA increased 117.9% to $6.1 million from $2.8 million for the same period a year ago. The improvement in Adjusted EBITDA reflects an increase in unit volume and the Company's continued focus on operating efficiency and leveraging fixed costs as unit volume increased.
Gross profit for the fiscal third quarter totaled $62.5 million, up 3.2% from $60.5 million in the year-ago period. Gross margins were 11.2% compared to 12.2% a year ago. Overall gross margins were impacted by a higher mix of lower-margin structural sales, low margin sales related to the closure of five distribution centers, and a highly competitive pricing environment. Same center gross margins were 11.5% compared to 12.1% a year ago.
Fiscal third-quarter operating expenses of $59.4 million increased $9.1 million compared to the same period a year ago. Fiscal third-quarter operating expenses included $0.9 million in net gains from significant special items compared to a $9.2 million gain from the sale of certain properties in the prior period. After adjusting for significant special items in the fiscal third quarters of 2013 and 2012, operating expense as a percentage of revenue improved to 10.8% in the third quarter of 2013 from 12.0% in the third quarter of 2012. Reported operating profit for the quarter was $3.1 million, compared to an operating profit of $10.3 million a year ago and reflects the increase in gross margin dollars and the significant special items detailed in the adjusted net loss table below.
"The implementation of the Company's previously announced restructuring program is proceeding as planned, and sales and operational initiatives are having a positive impact," said BlueLinx Executive Chairman Howard Cohen. "Despite the restructuring this quarter, the Company achieved a significant improvement in same center results. We have regained sales growth momentum in higher margin specialty products, which grew 11.7% on a same center basis and increased the Company's adjusted EBITDA by $3.3 million or 118%. On an overall basis, commodity pricing has stabilized and margins are recovering. Changes made to reduce the Company's cost structure and simplify the organization structure also contributed to the Company's improved same center performance."
We have launched other initiatives this quarter that we believe will add significantly to the Company's financial performance. We are pursuing multiple avenues for growth in addition to accelerated specialty product growth, including an emphasis on faster-growing markets and expanding into adjacent market segments like multi-family," Mr. Cohen concluded.
For the fiscal nine months ended September 28, 2013, revenues totaled $1.67 billion, up 13.5% from $1.47 billion the same period a year ago. Net loss for the fiscal nine months ended September 28, 2013 totaled $38.2 million, or $0.49 per diluted share, compared with a net loss of $11.7 million, or $0.18 per diluted share a year ago. Fiscal nine-month results for 2013 included net charges from significant special items of $8.0 million, or $0.10 per diluted share. Fiscal nine-month results for 2012 included net gains from significant special items of $10.2 million, or $0.16 per diluted share.
Gross profit for the fiscal nine months ended September 28, 2013 totaled $174.1 million and gross margin was 10.5%, compared with $178.0 million and 12.1% a year ago. Declines in gross margin were driven by lower margin structural sales increasing from 41% of revenue in the year ago period to 45% of revenue for the nine months ended September 28, 2013. The decline in gross margin was further impacted by volatility in wood-based structural products pricing, primarily during the fiscal 2013 second quarter.
Total operating expenses for the fiscal nine months ended September 28, 2013 increased to $191.7 million from $167.9 million a year ago. Operating expenses for the fiscal nine months ended September 28, 2013 included $3.9 million in gains from the sale of certain properties and $11.0 million in restructuring and severance costs. Operating expenses in the year ago period included total gains of $10.2 million from the sale of certain properties and an insurance settlement. Reported operating loss for the nine months ended September 28, 2013 was $17.6 million, compared to operating income of $10.0 million a year ago and reflects the decline in gross margin and the significant special items detailed in the adjusted net loss table below.
The Company's net sales and EBITDA for the 2013 and 2012 third quarter and year-to-date- periods, reported on a same center basis, are shown in the following non-GAAP table (see accompanying financial schedules for full financial details and reconciliations of non-GAAP financial measures to their GAAP equivalents):
|
Adjusted EBITDA in millions (unaudited) |
Quarters Ended | Nine Months Ended | ||||
|
September 28, 2013 |
September 29, 2012 |
% Inc (Dec) |
September 28, 2013 |
September 29, 2012 |
% Inc (Dec) |
|
| Net Sales: | ||||||
| Same Center | $535.6 | $469.0 | 14.2% | $1,580.1 | $1,386.4 | 14.0% |
| Closed Center | 22.4 | 27.8 | (19.4%) | 85.6 | 81.1 | 5.5% |
| Total Net Sales | $558.0 | $496.8 | 12.3% | $1,665.7 | $1,467.5 | 13.5% |
| EBITDA: | ||||||
| Adjusted EBITDA | $6.1 | $2.8 | 117.9% | $0.1 | $5.1 | (98.0%) |
| Closed Center EBITDA | (1.8) | 0.4 | (550.0%) | (3.4) | 1.3 | (361.5%) |
| Significant Special Items | 0.9 | 9.2 | (90.2%) | (8.0) | 10.2 | (178.4%) |
| Total EBITDA | $5.2 | $12.4 | (58.1%) | ($11.3) | $16.6 | (168.1%) |
The Company's operating results for the 2013 and 2012 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):
|
Adjusted Net Loss in millions, except per share amounts (unaudited) |
Quarters Ended | Nine Months Ended | ||
|
September 28, 2013 |
September 29, 2012 |
September 28, 2013 |
September 29, 2012 |
|
| Pretax (loss) income | ($3.8) | $3.0 | ($38.9) | ($11.3) |
| Gain from sale of certain properties | (3.7) | (9.2) | (3.9) | (9.7) |
| Gain from property insurance settlement | -- | -- | -- | (0.5) |
| Restructuring inventory reserve | -- | -- | 1.0 | -- |
| Restructuring and severance related costs | 2.8 | -- | 11.0 | -- |
| Adjusted pretax loss | (4.7) | (6.2) | (30.8) | (21.5) |
| Adjusted benefit from income taxes | (2.5) | (2.5) | (12.6) | (8.0) |
| Adjusted net loss | ($2.2) | ($3.7) | ($18.2) | ($13.5) |
| Diluted weighted average shares | 84.6 | 65.5 | 78.5 | 65.4 |
| Adjusted diluted net loss per share applicable to common shares | ($0.03) | ($0.06) | ($0.23) | ($0.21) |
For the quarter and year-to-date periods ended September 28, 2013, the above table reflects the following events; (i) the Company recorded a gain on the sale of certain surplus properties; (ii) the Company recorded a restructuring inventory reserve; (iii) the Company recorded certain restructuring and severance related 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. The adjusted benefit from income taxes assumes the Company's deferred tax assets are realizable. See the reconciliation of GAAP Net Loss to Adjusted Net Loss accompanying this press release for further details.
For the quarter and year-to-date periods ended September 29, 2012, the above table reflects the following events; (i) the Company recorded a gain on the sale of certain surplus properties; (ii) the Company recorded a gain from a property insurance settlement. 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. The adjusted benefit from income taxes assumes the Company's deferred tax assets are realizable. See the reconciliation of GAAP Net Loss to Adjusted Net Loss accompanying this press release for further details.
Liquidity and Capital Resources
As of September 28, 2013, the Company had $92.5 million of excess availability under its asset-backed revolving credit facilities, based on qualifying inventory and receivables.
Conference Call
BlueLinx will host a conference call today at 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# 86939743. 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.
Adjusted EBITDA is a non-GAAP measure that management uses to evaluate the performance of the Company. Adjusted EBITDA, as we define it, is an amount equal to net (loss) income plus interest expense and all interest expense related items (e.g. changes associated with ineffective interest rate swap, write-off of debt issue costs, charges associated with mortgage refinancing), income taxes, depreciation and amortization, further adjusted to exclude other non-cash items and certain other adjustments. Adjusted EBITDA is presented herein because we believe it is a useful supplement to cash flow from operations in understanding cash flows generated from operations that are available for debt service (interest and principal payments) and further investment in acquisitions. However, Adjusted EBITDA is not a presentation made in accordance with GAAP, and is not intended to present a superior measure of the financial condition from those determined under GAAP.
About BlueLinx Holdings Inc.
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 1,800 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 current network of 50 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 ability to return to profitability and our outlook on the housing industry and our guidance regarding anticipated financial results. All of these forward-looking statements are based on estimates and assumptions made by our management that, although believed by BlueLinx to be reasonable, are inherently uncertain. Forward-looking statements involve risks and uncertainties, including, but not limited to, economic, competitive, governmental and technological factors outside of BlueLinx' 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; the ability to achieve greater operating efficiencies as a result of the restructuring; 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 December 29, 2012 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.
| BlueLinx Holdings Inc. | ||||
| Statements of Operations | ||||
| in thousands, except per share data | ||||
| Quarters Ended | Nine Months Ended | |||
| September 28, | September 29, | September 28, | September 29, | |
| 2013 | 2012 | 2013 | 2012 | |
| (unaudited) | (unaudited) | (unaudited) | (unaudited) | |
| Net sales | $ 557,952 | $ 496,810 | $ 1,665,697 | $ 1,467,544 |
| Cost of sales | 495,460 | 436,279 | 1,491,563 | 1,289,593 |
| Gross profit | 62,492 | 60,531 | 174,134 | 177,951 |
| Operating expenses: | ||||
| Selling, general, and administrative | 57,255 | 48,156 | 185,184 | 161,358 |
| Depreciation and amortization | 2,144 | 2,106 | 6,547 | 6,553 |
| Total operating expenses | 59,399 | 50,262 | 191,731 | 167,911 |
| Operating income (loss) | 3,093 | 10,269 | (17,597) | 10,040 |
| Non-operating expenses: | ||||
| Interest expense | 6,918 | 7,294 | 21,026 | 21,401 |
| Other expense (income), net | 17 | (16) | 252 | (29) |
| (Loss) income before (benefit from) provision for income taxes | (3,842) | 2,991 | (38,875) | (11,332) |
| (Benefit from) provision for income taxes | (636) | (77) | (714) | 325 |
| Net (loss) income | $ (3,206) | $ 3,068 | $ (38,161) | $ (11,657) |
| Basic weighted average number of common shares outstanding | 84,596 | 65,473 | 78,492 | 65,438 |
| Basic net (loss) income per share applicable to common shares | $ (0.04) | $ 0.05 | $ (0.49) | $ (0.18) |
| Diluted weighted average number of common shares outstanding | 84,596 | 65,473 | 78,492 | 65,438 |
| Diluted net (loss) income per share applicable to common shares | $ (0.04) | $ 0.05 | $ (0.49) | $ (0.18) |
| BlueLinx Holdings Inc. | ||
| Balance Sheets | ||
| in thousands | ||
| September 28, | December 29, | |
| 2013 | 2012 | |
| (unaudited) | ||
| Assets: | ||
| Current assets: | ||
| Cash and cash equivalents | $ 6,869 | $ 5,188 |
| Receivables, net | 207,927 | 157,465 |
| Inventories, net | 259,722 | 230,059 |
| Other current assets | 29,696 | 19,427 |
| Total current assets | 504,214 | 412,139 |
| Property, plant, and equipment: | ||
| Land and improvements | 41,053 | 43,120 |
| Buildings | 90,386 | 94,070 |
| Machinery and equipment | 78,145 | 78,674 |
| Construction in progress | 2,415 | 1,173 |
| Property, plant, and equipment, at cost | 211,999 | 217,037 |
| Accumulated depreciation | (104,348) | (101,684) |
| Property, plant, and equipment, net | 107,651 | 115,353 |
| Non-current deferred income tax assets, net | 445 | 445 |
| Other non-current assets | 16,950 | 16,799 |
| Total assets | $ 629,260 | $ 544,736 |
| Liabilities: | ||
| Current liabilities: | ||
| Accounts payable | $ 109,520 | $ 77,850 |
| Bank overdrafts | 20,463 | 35,384 |
| Accrued compensation | 4,678 | 6,170 |
| Current maturities of long-term debt | 60,857 | 8,946 |
| Deferred income taxes, net | 449 | 449 |
| Other current liabilities | 15,412 | 10,937 |
| Total current liabilities | 211,379 | 139,736 |
| Non-current liabilities: | ||
| Long-term debt | 377,014 | 368,446 |
| Other non-current liabilities | 57,142 | 57,146 |
| Total liabilities | 645,535 | 565,328 |
| Stockholders' Deficit: | ||
| Common stock | 866 | 637 |
| Additional paid in capital | 250,930 | 209,815 |
| Accumulated other comprehensive loss | (28,908) | (30,042) |
| Accumulated deficit | (239,163) | (201,002) |
| Total stockholders' deficit | (16,275) | (20,592) |
| Total liabilities and stockholders' deficit | $ 629,260 | $ 544,736 |
| BlueLinx Holdings Inc. | ||
| Statements of Cash Flows | ||
| in thousands | ||
| Periods Ended | ||
| September 28, | September 29, | |
| 2013 | 2012 | |
| (unaudited) | (unaudited) | |
| Cash flows from operating activities: | ||
| Net loss | $ (38,161) | $ (11,657) |
| Adjustments to reconcile net loss to cash used in operations: | ||
| Depreciation and amortization | 6,547 | 6,553 |
| Amortization of debt issuance costs | 2,396 | 2,799 |
| Write-off of debt issuance costs | 119 | -- |
| Gain from sale of properties | (3,908) | (9,680) |
| Gain from property insurance settlement | -- | (476) |
| Vacant property charges, net | 1,398 | (30) |
| Severance charges | 4,703 | -- |
| Payments on modification on lease agreement | -- | (5,875) |
| Deferred income tax benefit | -- | (24) |
| Share-based compensation expense | 5,577 | 2,097 |
| (Increase) decrease in restricted cash related to insurance and other | (2,028) | (123) |
| Other | 1,120 | 4,509 |
| (22,237) | (11,907) | |
| Changes in primary working capital components: | ||
| Receivables | (50,462) | (52,868) |
| Inventories | (29,663) | (34,675) |
| Accounts payable | 31,568 | 12,776 |
| Net cash used in operating activities | (70,794) | (86,674) |
| Cash flows from investing activities: | ||
| Property, plant, and equipment investments | (4,005) | (2,490) |
| Proceeds from disposition of assets | 8,073 | 18,561 |
| Net cash provided by investing activities | 4,068 | 16,071 |
| Cash flows from financing activities: | ||
| Excess tax benefits from share-based compensation arrangements | 16 | -- |
| Repurchase of shares to satisfy employee tax withholdings | (2,867) | (446) |
| Repayments on the revolving credit facilities | (422,231) | (345,674) |
| Borrowings from the revolving credit facilities | 490,264 | 436,374 |
| Payments of principal on mortgage | (7,554) | (8,370) |
| Payments on capital lease obligations | (1,152) | (604) |
| (Decrease) increase in bank overdrafts | (14,921) | 9,528 |
| Increase in restricted cash related to the mortgage | (8,970) | (15,546) |
| Debt issuance costs | (2,893) | (1,683) |
| Proceeds from stock offering less expenses paid | 38,715 | -- |
| Net cash provided by financing activities | 68,407 | 73,579 |
| Increase in cash | 1,681 | 2,976 |
| Balance, beginning of period | 5,188 | 4,898 |
| Balance, end of period | $ 6,869 | $ 7,874 |
| Non Cash Transactions: | ||
| Capital leases | $ -- | $ 32 |
| BlueLinx Holdings Inc. | ||||
| Unaudited Reconciliation of GAAP Net cash used in operating activities to Non-GAAP EBITDA | ||||
| in thousands | ||||
| Quarters Ended | Nine Months Ended | |||
| September 28, | September 29, | September 28, | September 29, | |
| 2013 | 2012 | 2013 | 2012 | |
| GAAP net cash provided by (used in) operating activities | $ 62,863 | $ 23,432 | $ (70,794) | $ (86,674) |
| Adjustments: | ||||
| Amortization of debt issuance costs | (724) | (936) | (2,396) | (2,799) |
| Write-off of debt issuance costs | -- | -- | (119) | -- |
| Payments on modification of lease agreement | -- | 875 | -- | 5,875 |
| Gain from sale of certain properties | 3,679 | 9,150 | 3,908 | 9,680 |
| Gain from property insurance settlement | -- | -- | -- | 476 |
| Vacant property charges, net | (1,398) | (48) | (1,398) | 30 |
| Severance charges | (372) | -- | (4,703) | -- |
| Share-based compensation | (1,250) | (677) | (5,577) | (2,097) |
| Changes in assets and liabilities | (63,858) | (26,622) | 49,465 | 70,405 |
| Interest expense | 6,918 | 7,294 | 21,026 | 21,401 |
| (Benefit from) provision for income taxes | (636) | (77) | (714) | 325 |
| EBITDA | $ 5,222 | $ 12,391 | $ (11,302) | $ 16,622 |
| EBITDA | $ 5,222 | $ 12,391 | $ (11,302) | $ 16,622 |
| Restructuring inventory reserve | -- | -- | 1,000 | -- |
| Restructuring and severance related costs | 2,758 | -- | 10,956 | -- |
| Gain from sale of certain properties | (3,679) | (9,151) | (3,908) | (9,680) |
| Gain from property insurance settlement | -- | -- | -- | (476) |
| Closed Center EBITDA | 1,840 | (424) | 3,366 | (1,344) |
| Adjusted EBITDA | $ 6,141 | $ 2,816 | $ 112 | $ 5,122 |
| BlueLinx Holdings Inc. | ||||
| Adjusted Pre-Tax Loss | ||||
| in thousands, except for per share amounts | ||||
| Quarters Ended | Nine Months Ended | |||
| September 28, | September 29, | September 28, | September 29, | |
| 2013 | 2012 | 2013 | 2012 | |
| (unaudited) | (unaudited) | (unaudited) | (unaudited) | |
| Pretax (loss) income | $ (3,842) | $ 2,991 | $ (38,875) | $ (11,332) |
| Gain from sale of certain properties | (3,679) | (9,151) | (3,908) | (9,680) |
| Gain from property insurance settlement | -- | -- | -- | (476) |
| Restructuring inventory reserve | -- | -- | 1,000 | -- |
| Restructuring and severance related costs | 2,758 | -- | 10,956 | -- |
| Adjusted pretax loss | (4,763) | (6,160) | (30,827) | (21,488) |
| Adjusted benefit from income taxes | (2,474) | (2,454) | (12,614) | (7,969) |
| Adjusted net loss | $ (2,289) | $ (3,706) | $ (18,213) | $ (13,519) |
| Diluted weighted average shares | 84,596 | 65,473 | 78,492 | 65,438 |
| Adjusted diluted net loss per share applicable to common shares | $ (0.03) | $ (0.06) | $ (0.23) | $ (0.21) |
| BlueLinx Holdings Inc. | ||||
| Reconciliation of GAAP Net Loss to Adjusted Net Loss | ||||
| in thousands | ||||
| Quarters Ended | Nine Months Ended | |||
| September 28, | September 29, | September 28, | September 29, | |
| 2013 | 2012 | 2013 | 2012 | |
| (unaudited) | (unaudited) | (unaudited) | (unaudited) | |
| GAAP net (loss) income | $ (3,206) | $ 3,068 | $ (38,161) | $ (11,657) |
| Gain from sale of certain properties | (3,679) | (9,151) | (3,908) | (9,680) |
| Gain from property insurance settlement | -- | -- | -- | (476) |
| Restructuring inventory reserve | 2,758 | -- | 1,000 | -- |
| Restructuring and severance related costs | -- | -- | 10,956 | -- |
| Tax effect of selected charges | 355 | 3,532 | (3,106) | 3,920 |
| Valuation allowance | 1,483 | (1,155) | 15,006 | 4,374 |
| Adjusted net loss | $ (2,289) | $ (3,706) | $ (18,213) | $ (13,519) |