Net Income of $0.21 Per Share On $835 Million Revenue
Gross Margin Rises to 12.9% for Quarter
ATLANTA, July 30, 2008 (PRIME NEWSWIRE) -- BlueLinx Holdings Inc. (NYSE:BXC), a leading distributor of building products in North America, today reported financial results for the second quarter ended June 28, 2008.
The company's second-quarter net income totaled $6.6 million, or $0.21 per diluted share, compared with net income of $5.4 million, or $0.18 per diluted share, in the year-ago period. Revenues of $835 million declined 22.9% from $1.08 billion for the same period a year ago. The decline in revenue reflects a 26% drop in structural product sales and a 20% sales decline in specialty product sales from the year ago period. The decline in sales is primarily attributable to a decline in unit volume partially offset by increases in underlying structural product prices. The overall second-quarter unit volume decline of 26% was mainly due to lower unit volumes in both structural and specialty products driven predominately by a 32% decline in housing starts relative to year ago levels.
Gross profit for the second quarter totaled $107.4 million, compared with $119.2 million in the prior-year period, largely reflecting reduced unit volume associated with the continuing decline in housing starts. The decrease in gross profit related to volume was offset in part by an increase in gross margin to 12.9% from 11.0% a year earlier. Overall 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.
Total operating expenses of $86.3 million decreased $12.4 million, or 12.5%, from the same period a year ago, reflecting the Company's ongoing focus on managing expenses to the current operating environment. Operating income for the quarter totaled $21.1 million, compared with $20.6 million a year ago.
For the six months ended June 28, 2008, net loss totaled $4.0 million, or $0.13 per diluted share, on revenues of $1.55 billion, compared with net income of $5.2 million, or $0.17 per diluted share, on revenues of $2.04 billion a year ago. The decline in income and revenue was largely due to a decline in volume of 26% primarily driven by a decline in housing starts of 30% from the prior year to date period partially offset by increases in underlying product prices.
Gross profit for the six months totaled $185.2 million and gross margin was 11.9%, compared with $223 million and 10.9%, respectively, a year earlier. Operating expenses declined to $171.9 million from $192.5 million a year ago.
"While we are pleased with our results, we expect the current housing market downturn to continue through 2009," said Howard Cohen, Chairman and Interim CEO. "We remain focused on managing cash flow by tightly managing inventories, receivables and our operating expenses. BlueLinx is financially positioned to be able to continue executing throughout this housing downturn. We generated $52 million in cash flow from operating activities during the second quarter and ended the period with $271 million in excess borrowing availability on our revolving credit facility," Cohen added.
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# 57204671. 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, 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 2,500 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. 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; 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, 2007 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 Six Months Ended
--------------------- ----------------------
June 28, June 30, June 28, June 30,
2008 2007 2008 2007
--------- ---------- ---------- ----------
(unaudited)(unaudited) (unaudited) (unaudited)
Net sales $ 834,669 $1,081,990 $1,551,429 $2,039,104
Cost of sales 727,234 962,752 1,366,191 1,816,111
--------- ---------- ---------- ----------
Gross profit 107,435 119,238 185,238 222,993
--------- ---------- ---------- ----------
Operating expenses:
Selling, general,
and administrative 81,227 93,346 161,862 181,814
Depreciation and
amortization 5,103 5,335 10,071 10,734
--------- ---------- ---------- ----------
Total operating
expenses 86,330 98,681 171,933 192,548
--------- ---------- ---------- ----------
Operating income 21,105 20,557 13,305 30,445
Non-operating expenses:
Interest expense 9,385 11,798 18,739 22,404
Other expense
(income), net 190 (225) 320 (608)
--------- ---------- ---------- ----------
Income (loss) before
provision for
(benefit from)
income taxes 11,530 8,984 (5,754) 8,649
Provision for
(benefit from)
income taxes 4,931 3,550 (1,762) 3,404
--------- ---------- ---------- ----------
Net income (loss) $ 6,599 $ 5,434 $ (3,992) $ 5,245
--------- ---------- ---------- ----------
Basic weighted
average number of
common shares
outstanding 31,079 30,848 31,003 30,824
========= ========== ========== ==========
Basic net income
(loss) per share
applicable to common
stock $ 0.21 $ 0.18 $ (0.13) $ 0.17
========= ========== ========== ==========
Diluted weighted
average number of
common shares
outstanding 31,312 30,995 31,003 30,945
========= ========== ========== ==========
Diluted net income
(loss) per share
applicable to
common stock $ 0.21 $ 0.18 $ (0.13) $ 0.17
========= ========== ========== ==========
Dividends declared
per share of common
stock $ -- $ 0.125 $ -- $ 0.25
========= ========== ========== ==========
BlueLinx Holdings Inc.
Balance Sheets
in thousands
June 28, Dec. 29,
2008 2007
--------- ---------
(unaudited)
Assets:
Current assets:
Cash $ 29,791 $ 15,759
Receivables 295,081 263,176
Inventories 315,368 335,887
Deferred income taxes 14,605 12,199
Other current assets 38,657 53,231
--------- ---------
Total current assets 693,502 680,252
--------- ---------
Property, plant, and equipment:
Land and land improvements 57,362 57,295
Buildings 98,550 98,420
Machinery and equipment 67,922 67,217
Construction in progress 1,360 4,212
--------- ---------
Property, plant, and equipment, at
cost 225,194 227,144
Accumulated depreciation (60,954) (54,702)
--------- ---------
Property, plant, and equipment, net 164,240 172,442
Non-current deferred income taxes 2,218 2,628
Other assets 19,842 28,114
--------- ---------
Total assets $ 879,802 $ 883,436
========= =========
Liabilities :
Current liabilities:
Accounts payable $ 176,600 $ 164,717
Bank overdrafts 38,055 37,152
Accrued compensation 11,503 10,372
Current maturities of long-term
debt 10,048 --
Other current liabilities 28,336 19,280
--------- ---------
Total current liabilities 264,542 231,521
--------- ---------
Noncurrent liabilities:
Long-term debt 451,000 478,535
Other non-current liabilities 13,016 18,557
--------- ---------
Total liabilities 728,558 728,613
--------- ---------
Shareholders' Equity:
Common stock 324 312
Additional paid in capital 142,701 142,081
Accumulated other comprehensive
income 5,207 5,426
Retained earnings 3,012 7,004
--------- ---------
Total shareholders' equity 151,244 154,823
--------- ---------
Total liabilities and shareholders'
equity $ 879,802 $ 883,436
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BlueLinx Holdings Inc.
Statements of Cash Flows
in thousands
Six Months Ended
----------------------
June 28, June 30,
2008 2007
--------- ---------
(unaudited) (unaudited)
Cash flows from operating activities:
Net (loss) income $ (3,992) $ 5,245
Adjustments to reconcile net (loss)
income to cash provided by (used
in) operations:
Depreciation and amortization 10,071 10,734
Amortization of debt issue costs 1,215 1,215
Deferred income tax benefit (2,931) (1,563)
Share-based compensation expense 1,119 2,227
Excess tax benefits from
share-based compensation
arrangements (76) (60)
Changes in assets and liabilities:
Receivables (31,905) (98,255)
Inventories 20,519 (59,536)
Accounts payable 11,883 64,503
Changes in other working capital 22,283 8,840
Other 2,589 2,278
--------- ---------
Net cash provided by (used in)
operating activities 30,775 (64,372)
--------- ---------
Cash flows from investing activities:
Property, plant, and equipment
investments (1,502) (10,027)
Proceeds from disposition of assets 827 1,086
--------- ---------
Net cash used in investing activities (675) (8,941)
--------- ---------
Cash flows from financing activities:
Proceeds from stock options
exercised 434 323
Excess tax benefits from
share-base compensation
arrangements 76 60
Net (decrease) increase in
revolving credit facility (17,487) 94,073
Increase (decrease) in bank
overdrafts 903 (15,678)
Common dividends paid -- (7,784)
Other 6 33
--------- ---------
Net cash (used in) provided by
financing activities (16,068) 71,027
--------- ---------
Increase (decrease) in cash 14,032 (2,286)
Balance, beginning of period 15,759 27,042
--------- ---------
Balance, end of period $ 29,791 $ 24,756
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