-- Net Income Climbs 16.4% On 1.8% Revenue Increase --
-- Specialty Product Unit Volume Up 14.9% From Prior Year --
ATLANTA, May 4, 2006 (PRIMEZONE) -- BlueLinx Holdings Inc. (NYSE:BXC), a leading distributor of building products in North America, today reported financial results for the first quarter ended April 1, 2006.
Revenues for the first quarter rose 1.8% to $1.38 billion from $1.35 billion for the first quarter of 2005. The increase reflects a 15.7% increase in specialty product sales, partially offset by a 5.6% decline in structural product sales. Specialty product sales were driven by a 14.9% increase in unit volume over the same period a year earlier. This unit-volume increase represented approximately 94% of the first-quarter specialty sales increase, with the remaining contribution resulting from higher prices. In structural products, declining product prices accounted for the majority of the sales decrease, while unit volume also was down slightly.
First-quarter net income rose to $9.8 million, or $0.32 per diluted share, from $8.4 million, or $0.28 per diluted share, for the same period a year ago.
Gross profit for the first quarter rose to $130 million from $119.3 million in the prior-year period. Gross margin improved 60 basis points, to 9.4% from 8.8% a year ago, reflecting growth in higher-margin specialty products. Total operating expenses of $102.3 million for the first quarter increased $6.6 million from the same period a year ago, primarily reflecting normal ongoing operating expenses associated with the company's Lane Stanton Vance (LSV) division, the specialty hardwoods distributor that the company acquired in July 2005. Operating income for the quarter was $27.6 million, compared with $23.7 million for the first quarter last year.
"We made steady progress toward our primary strategic objectives during the first quarter," said Stephen Macadam, chief executive officer. "We accelerated growth of our specialty products business, increasing unit volume by 14.9% from the same period a year ago, and we effectively managed our structural inventory in a generally declining pricing environment.
"We are well positioned to continue to grow specialty product unit volume and effectively manage our structural product business," Macadam said. "We finished the first quarter with structural product inventories 16.8% below year-ago levels, and we are moving forward into the second quarter continuing to tightly manage our inventory levels. At the same time, we continue to execute on our primary strategic objective, which is to grow specialty product revenue to more than 60% of our total product mix."
Dividend
On May 3, 2006, the BlueLinx Board of Directors declared a $0.125 dividend on the company's common shares for the quarter ended April 1, 2006. The dividend is payable on June 30, 2006, to shareholders of record on June 15, 2006.
Conference Call
BlueLinx will host a conference call today at 9:00 a.m. Eastern Time, accompanied by a supporting slide presentation. Investors may listen to the conference call and download the presentation by going to the Investor Relations page of the BlueLinx Web site, at www.BlueLinxCo.com. Investors also can access a recording of the conference call for one week by calling 706-645-9291, Conference ID No. 8269019. 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.
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 more than 3,600 people in North America, BlueLinx offers 10,000 products from over 750 suppliers to service approximately 12,000 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 65 warehouses. Additional information about BlueLinx can be found on its Web site at www.BlueLinxCo.com.
The BlueLinx Corporation logo is available at http://www.primezone.com/newsroom/prs/?pkgid=2091
Forward-looking Statements
This press release includes "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. 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 its 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 we distribute; the activities of competitors; changes in significant operating expenses; changes in the availability of capital; the ability to identify acquisition opportunities and effectively and cost-efficiently integrate acquisitions; general economic and business conditions in the United States; 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 31, 2005, 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 or otherwise, except as required by law.
BlueLinx Holdings Inc.
Statements of Operations
in thousands, except per share data
Quarters Ended
-------------------------
April 1, April 2,
2006 2005
---------- ----------
(unaudited) (unaudited)
Net sales $1,376,606 $1,351,619
Cost of sales 1,246,654 1,232,291
---------- ----------
Gross profit 129,952 119,328
---------- ----------
Operating expenses:
Selling, general, and administrative 97,267 91,435
Depreciation and amortization 5,043 4,243
---------- ----------
Total operating expenses 102,310 95,678
---------- ----------
Operating income 27,642 23,650
Non-operating expenses:
Interest expense 11,197 9,334
Other expense, net 81 129
---------- ----------
Income before provision for income taxes 16,364 14,187
Provision for income taxes 6,569 5,769
---------- ----------
Net income $ 9,795 $ 8,418
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Basic weighted average number
of common shares outstanding 30,417 30,155
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Basic net income per share applicable
to common stock $ 0.32 $ 0.28
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Diluted weighted average number of
common shares outstanding 30,713 30,458
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Diluted net income per share applicable
to common stock $ 0.32 $ 0.28
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Dividends declared per share of
common stock $ 0.125 $ 0.125
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BlueLinx Holdings Inc.
Balance Sheets
in thousands
---------- ----------
April 1, December 31,
2006 2005
---------- ----------
(unaudited)
Assets:
Current assets:
Cash $ 27,434 $ 24,320
Receivables, net 480,466 399,093
Inventories, net 501,152 473,068
Deferred income taxes 6,491 6,678
Other current assets 40,998 44,909
---------- ----------
Total current assets 1,056,541 948,068
---------- ----------
Property, plant, and equipment:
Land and land improvements 56,461 56,521
Buildings 93,472 93,381
Machinery and equipment 56,160 54,200
Construction in progress 834 2,350
---------- ----------
Property, plant, and equipment, at cost 206,927 206,452
Accumulated depreciation (26,472) (22,403)
---------- ----------
Property, plant, and equipment, net 180,455 184,049
Other non-current assets 24,368 25,523
---------- ----------
Total assets $1,261,364 $1,157,640
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Liabilities:
Current liabilities:
Accounts payable $ 352,902 $ 327,004
Bank overdrafts 49,570 62,392
Accrued compensation 10,655 13,494
Current maturities of long-term debt 75,769 --
Other current liabilities 14,165 15,195
---------- ----------
Total current liabilities 503,061 418,085
---------- ----------
Non-current liabilities:
Long-term debt 550,000 540,850
Deferred income taxes 971 1,911
Other long-term liabilities 14,637 12,942
---------- ----------
Total liabilities 1,068,669 973,788
---------- ----------
Shareholders' Equity:
Common stock 306 303
Additional paid in capital 135,249 132,346
Accumulated other comprehensive income 996 1,023
Retained earnings 56,144 50,180
---------- ----------
Total shareholders' equity 192,695 183,852
---------- ----------
---------- ----------
Total liabilities and shareholders' equity $1,261,364 $1,157,640
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BlueLinx Holdings Inc.
Statements of Cash Flows
in thousands
Quarters Ended
----------------------
April 1, April 2,
2006 2005
--------- ---------
(unaudited) (unaudited)
Cash flows from operating activities:
Net income $ 9,795 $ 8,418
Adjustments to reconcile net income
to cash used in operations:
Depreciation and amortization 5,043 4,243
Amortization of debt issue costs 765 1,005
Deferred income tax benefit (753) (1,102)
Stock compensation 562 832
Changes in assets and liabilities:
Receivables (81,373) (135,735)
Inventories (28,084) (17,682)
Accounts payable 25,898 68,087
Changes in other working capital 42 (9,465)
Other 1,704 (54)
--------- ---------
Net cash used in operating activities (66,401) (81,453)
--------- ---------
Cash flows from investing activities:
Property, plant, and equipment investments (658) (2,048)
Proceeds from sale of assets 135 140
--------- ---------
Net cash used in investing activities (523) (1,908)
--------- ---------
Cash flows from financing activities:
Issuance of common stock, net -- 8,600
Proceeds from stock options exercised 2,341 --
Net increase in revolving credit facility 84,919 75,144
Debt financing costs (569) --
Increase (decrease) in bank overdrafts (12,822) 6,524
Common dividends paid (3,831) (3,773)
--------- ---------
Net cash provided by financing activities 70,038 86,495
--------- ---------
Increase in cash 3,114 3,134
Balance, beginning of period 24,320 15,572
--------- ---------
Balance, end of period $ 27,434 $ 18,706
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