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BlueLinx Announces Third-Quarter Results

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ATLANTA, Nov. 1, 2012 (GLOBE NEWSWIRE) -- BlueLinx Holdings Inc. (NYSE: BXC), a leading distributor of building products in North America, today reported financial results for the third quarter ended September 29, 2012.

The Company reported net income of $3.1 million, or $0.05 per diluted share for the third quarter of 2012, compared to a net loss of $6.2 million, or $0.12 per diluted share, for the third quarter of 2011. Revenues for the third quarter were $496.8 million, up 5.1% from $472.9 million for the third quarter of 2011.

Gross profit for the third quarter totaled $60.5 million, up 3.9% from $58.3 million in the year-ago period. Gross margins of 12.2%, compared to 12.3% a year ago, remained strong as a result of the Company's ongoing initiatives to increase margins across all product categories combined with increases in underlying wood-based product prices and a shift to the warehouse distribution channel from the direct and reload distribution channels.

Third-quarter operating expenses of $50.3 million were down compared to $57.1 million for the same period a year ago, and included $9.2 million or $0.09 per diluted share and $2.1 million or $0.02 per diluted share in net gains from significant special items in 2012 and 2011 respectively. Reported operating profit for the quarter was $10.3 million, compared to an operating profit of $1.2 million a year ago.

George Judd, President and Chief Executive Officer of BlueLinx stated, "We are pleased to report third-quarter net income for BlueLinx. Looking forward, we have increased optimism that our business will continue to improve as general economic factors and leading indicators for our business point to improving market conditions and we continue to execute our strategy."

For the nine months ended September 29, 2012, net loss totaled $11.7 million, or $0.19 per diluted share, compared with $28.3 million, or $0.75 per diluted share, a year ago. Revenues for the nine months totaled $1.47 billion, up 7.6% from $1.36 billion the same period a year ago. Gross profit for the nine months ended September 29, 2012 totaled $178.0 million and gross margin was 12.1%, compared with $162.2 million and 11.9% a year earlier. Total operating expenses of $167.9 million were flat compared to a year ago, and included $10.2 million or $0.10 per diluted share and $8.8 million or $0.14 per diluted share in net gains from significant special items in 2012 and 2011 respectively.

The Company's operating results for the 2012 and 2011 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
(unaudited) Quarters Ended Nine Months Ended
  September 29, 2012 October 1, 2011 September 29, 2012 October 1, 2011
Pretax income (loss) $3.0 ($6.1) ($11.3) ($28.2)
Gain from sale of certain properties  (9.2)  --   (9.7)  (6.9)
Gain on modification of lease agreement  --   (2.0)  --   (2.0)
Gain from property insurance settlement  --   (1.2)  (0.5)  (1.2)
Severance related costs  --   1.1  --   1.3
         
Adjusted pretax loss before the effect of special interest items  (6.2)  (8.2)  (21.5)  (37.0)
Changes associated with the ineffective interest rate swap  --   --   --   (1.7)
         
Adjusted pretax loss  (6.2)  (8.2)  (21.5)  (38.7)
Adjusted benefit from income taxes  (2.5)  (3.1)  (8.0)  (14.8)
         
Adjusted net loss ($3.7) ($5.1) ($13.5) ($23.9)
         
Basic weighted average shares* 60.1 51.2 60.1 37.7
         
Adjusted basic net loss per share applicable to common shares ($0.06) ($0.10) ($0.23) ($0.63)
         
Diluted weighted average shares* 60.1 51.2 60.1 37.7
         
Adjusted diluted net loss per share applicable to common shares ($0.06) ($0.10) ($0.23) ($0.63)
         
* The increase in basic and diluted weighted average shares primarily results from the issuance of 28.6 million shares as a result of the July 29, 2011 rights offering.

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 properties; and (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.

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 sale of certain properties during the first quarter of 2011; (ii) the Company recorded a gain on the modification of a lease agreement; (iii) the Company recorded a gain from a property insurance settlement; (iv) the Company recorded certain severance costs; and (v) 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.  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 and the tax effect of significant special items. The adjusted benefit from income taxes assumes the Company's deferred tax assets are realizable.

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# 48164994. 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 1,900 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 55 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. 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 December 31, 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
  September 29, 2012 October 1, 2011 September 29, 2012 October 1, 2011
  (unaudited) (unaudited) (unaudited) (unaudited)
         
Net sales  $ 496,810  $ 472,898  $ 1,467,544  $ 1,364,313
Cost of sales  436,279  414,620  1,289,593  1,202,121
Gross profit  60,531  58,278  177,951  162,192
Operating expenses:        
 Selling, general, and administrative  48,156  54,537  161,358  159,760
 Depreciation and amortization  2,106  2,559  6,553  8,120
Total operating expenses  50,262  57,096  167,911  167,880
         
Operating income (loss)  10,269  1,182  10,040  (5,688)
Non-operating expenses:        
 Interest expense  7,294  6,963  21,401  23,754
Changes associated with the ineffective interest rate swap, net  --  --  --  (1,751)
Other (income) expense, net  (16)  333  (29)  485
         
Income (loss) before (benefit from) provision for income taxes  2,991  (6,114)  (11,332)  (28,176)
(Benefit from) provision for income taxes  (77)  94  325  139
         
Net income (loss)  $ 3,068  $ (6,208)  $ (11,657)  $ (28,315)
         
Basic weighted average number of common shares outstanding  60,099  51,183  60,067  37,696
Basic net income (loss) per share applicable to common shares   $ 0.05  $ (0.12)  $ (0.19)  $ (0.75)
Diluted weighted average number of common shares outstanding  60,099  51,183  60,067  37,696
Diluted net income (loss) per share applicable to common shares   $ 0.05  $ (0.12)  $ (0.19)  $ (0.75)
 
 
BlueLinx Holdings Inc.
Balance Sheets
 in thousands
     
     
  September 29, 2012 December 31, 2011
  (unaudited)  
Assets:    
Current assets:    
 Cash and cash equivalents  $ 7,874  $ 4,898
 Receivables, net  191,740  138,872
 Inventories, net  220,252  185,577
 Other current assets  45,138  27,141
Total current assets  465,004  356,488
     
Property, plant, and equipment:    
 Land and land improvements  43,058  49,562
 Buildings  94,070  95,652
 Machinery and equipment  75,715  75,508
 Construction in progress   1,036  741
Property, plant, and equipment, at cost  213,879  221,463
 Accumulated depreciation  (102,413)  (98,335)
 Property, plant, and equipment, net  111,466  123,128
Non-current deferred income tax assets, net   382  358
Other non-current assets  18,569  23,941
Total assets  $ 595,421  $ 503,915
     
Liabilities:    
Current liabilities:    
 Accounts payable   $ 81,576  $ 70,228
 Bank overdrafts  31,892  22,364
 Accrued compensation  5,799  4,496
 Current maturities of long-term debt  69,505  9,046
 Deferred income taxes, net  382  382
 Other current liabilities  11,844  16,558
Total current liabilities  200,998  123,074
Noncurrent liabilities:    
 Long-term debt  350,615  328,695
 Other non-current liabilities  45,378  43,772
Total liabilities  596,991  495,541
     
Stockholders' (Deficit) Equity:    
 Common stock  637  620
 Additional paid-in capital  209,114  207,626
 Accumulated other comprehensive loss  (21,689)  (21,900)
 Accumulated deficit  (189,632)  (177,972)
Total stockholders' (deficit) equity  (1,570)  8,374
Total liabilities and stockholders' (deficit) equity  $ 595,421  $ 503,915
 
 
BlueLinx Holdings Inc.
Statements of Cash Flows
 in thousands
     
     
  Nine Months Ended
  September 29, 2012 October 1, 2011
  (unaudited) (unaudited)
     
Cash flows from operating activities:    
Net loss  $ (11,657)  $ (28,315)
Adjustments to reconcile net loss to cash used in operations:    
 Depreciation and amortization  6,553  8,120
 Amortization of debt issuance costs  2,799  2,029
 Gain from sale of properties  (9,680)  (6,939)
 Gain from property insurance settlement  (476)  (1,230)
 Changes associated with the ineffective interest rate swap  --  (1,751)
 Vacant property charges, net  (30)  --
 Gain on modification of lease agreement  --  (1,971)
 Payments on modification on lease agreement  (5,875)  --
 Deferred income tax benefit  (24)  (282)
 Share-based compensation expense  2,097  1,578
 (Increase) decrease in restricted cash related to the swap, insurance, and other  (123)  443
 Changes in assets and liabilities:    
 Receivables  (52,868)  (65,535)
 Inventories  (34,675)  (15,527)
 Accounts payable  12,776  26,641
 Changes in other working capital  2,859  1,365
 Other  1,650  (2,439)
Net cash used in operating activities  (86,674)  (83,813)
     
Cash flows from investing activities:    
Property, plant, and equipment investments  (2,490)  (5,767)
Proceeds from disposition of assets  18,561  8,994
Net cash provided by investing activities  16,071  3,227
     
Cash flows from financing activities:    
Repurchase of shares to satisfy employee tax withholdings  (446)  --
Repayments on the revolving credit facilities  (345,674)  (348,877)
Borrowings from the revolving credit facilities  436,374  370,112
Payment of principal on mortgage  (8,370)  (38,724)
Payments on capital lease obligations  (604)  (1,224)
Increase in bank overdrafts  9,528  7,233
(Increase) decrease in restricted cash related to the mortgage  (15,546)  27,724
Debt financing costs  (1,683)  (2,647)
Proceeds from stock offering less expenses paid  --  58,582
Net cash provided by financing activities  73,579  72,179
Increase (decrease) in cash  2,976  (8,407)
Balance, beginning of period  4,898  14,297
Balance, end of period  $ 7,874  $ 5,890
     
Non Cash Transactions:    
Capital leases  $ 32  $ 3,147
 
 
BlueLinx Holdings Inc.
Adjusted Pre-Tax Loss
in thousands, except for per share amounts
         
  Quarters Ended Nine Months Ended
  September 29, 2012 October 1, 2011 September 29, 2012 October 1, 2011
  (unaudited) (unaudited) (unaudited) (unaudited)
         
Pretax income (loss)  $ 2,991  $ (6,114)  $ (11,332)  $ (28,176)
Gain from sale of certain properties  (9,151)  --  (9,680)  (6,939)
Gain on modification of lease agreement  --  (1,971)  --  (1,971)
Gain from property insurance settlement  --  (1,230)  (476)  (1,230)
Severance related costs  --  1,139  --  1,346
Adjusted pretax loss before the effect of special interest items  (6,160)  (8,176)  (21,488)  (36,970)
Changes associated with the ineffective interest rate swap  --  --  --  (1,751)
Adjusted pretax loss  (6,160)  (8,176)  (21,488)  (38,721)
Adjusted benefit from income taxes  (2,454)  (3,062)  (7,969)  (14,807)
Adjusted net loss  $ (3,706)  $ (5,114)  $ (13,519)  $ (23,914)
         
         
Basic weighted average shares  60,099  51,183  60,067  37,696
Adjusted basic net loss per share applicable to common shares  $ (0.06)  $ (0.10)  $ (0.23)  $ (0.63)
Diluted weighted average shares  60,099  51,183  60,067  37,696
Adjusted diluted net loss per share applicable to common shares  $ (0.06)  $ (0.10)  $ (0.23)  $ (0.63)
 
 
BlueLinx Holdings Inc.
Reconciliation of GAAP Net Income (Loss) to Adjusted Net Loss 
in thousands
         
  Quarters Ended Nine Months Ended
  September 29, 2012  October 1, 2011 September 29, 2012 October 1, 2011
  (unaudited) (unaudited) (unaudited) (unaudited)
         
GAAP net income (loss)  $ 3,068  $ (6,208)  $ (11,657)  $ (28,315)
Gain from sale of certain properties  (9,151)  -- (9,680) (6,939)
Gain on modification of lease agreement  --  (1,971)  -- (1,971)
Gain from property insurance settlement  --  (1,230)  (476) (1,230)
Severance related costs  --  1,139  --  1,346
Changes associated with the ineffective interest rate swap  --  --  -- (1,751)
Tax effect of selected charges  3,532  796 3,920 4,072
Valuation allowance  (1,155)  2,360 4,374 10,874
Adjusted net loss  $ (3,706)  $ (5,114)  $ (13,519)  $ (23,914)
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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