Net Loss of $0.08 Per Diluted Share On $727 Million Revenue
Gross Margin Rises From Year Ago At 11.5% for Quarter
ATLANTA, Oct. 29, 2008 (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 27, 2008.
The company's third-quarter net loss totaled $2.6 million, or $0.08 per diluted share, compared with net income of $0.9 million, or $0.03 per diluted share, in the year-ago period. The reported net loss includes an after-tax restructuring charge of approximately $2.0 million, or $0.06 per diluted share, related to the previously announced closing of our California based Lane Stanton Vance milling and manufacturing operations and an after-tax charge of approximately $1.6 million, or $0.05 per diluted share, related to a lower of cost or market reserve due to a decline in prices for our metal inventory. Revenues of $727 million declined 28.5% from $1.02 billion for the same period a year ago. The decline in revenue reflects a 36% drop in structural product sales and a 19% 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 third-quarter unit volume decline of 33% was mainly due to lower unit volumes in both structural and specialty products driven predominately by a 33% decline in housing starts relative to year ago levels.
Gross profit for the third quarter totaled $83.2 million, compared with $102.8 million for the prior-year period, largely reflecting reduced unit volume associated with the ongoing housing starts decline. The decrease in gross profit related to volume was offset in part by an increase in gross margin to 11.5% from 10.1% 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 $78.7 million decreased $11.2 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 $4.5 million, compared with $12.9 million a year ago.
For the nine months ended September 27, 2008, net loss totaled $6.6 million, or $0.21 per diluted share, on revenues of $2.28 billion, compared with net income of $6.1 million, or $0.20 per diluted share, on revenues of $3.06 billion a year ago. The decline in income and revenue was largely due to a decline in volume of 28% primarily driven by a decline in housing starts of 31% from the prior year to date period partially offset by increases in underlying product prices.
Gross profit for the nine months totaled $268.5 million and gross margin was 11.8%, compared with $325.8 million and 10.7%, respectively, a year earlier. Operating expenses declined to $250.7 million from $282.5 million a year ago.
"While our results were impacted by the downturn in the housing market our performance was in-line with our expectations for the quarter," said George Judd, newly appointed chief executive officer. "We remain focused on managing cash flow by tightly managing inventories, receivables and our operating expenses. During the third quarter, we continued to provide quality service to our customers and suppliers, generated $69 million in cash flow from operating activities and ended the period with $71 million in cash plus $227 million in excess borrowing availability on our revolving credit facility. While we expect a very difficult fourth quarter, Bluelinx is financially and operationally positioned to be able to continue executing throughout this unprecedented housing downturn," Judd 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# 68749745. 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 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 2,200 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 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, 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 Nine Months Ended
------------------------- -------------------------
Sept. 27, Sept. 29, Sept. 27, Sept. 29,
2008 2007 2008 2007
------------ ------------ ------------ ------------
(unaudited) (unaudited) (unaudited) (unaudited)
Net sales $ 726,756 $ 1,015,888 $ 2,278,185 $ 3,054,992
Cost of sales 643,507 913,078 2,009,698 2,729,189
------------ ------------ ------------ ------------
Gross profit 83,249 102,810 268,487 325,803
------------ ------------ ------------ ------------
Operating
expenses:
Selling,
general,
and admin-
istrative 73,793 84,826 235,655 266,640
Depreciation
and amorti-
zation 4,940 5,106 15,011 15,840
------------ ------------ ------------ ------------
Total operating
expenses 78,733 89,932 250,666 282,480
------------ ------------ ------------ ------------
Operating income 4,516 12,878 17,821 43,323
Non-operating
expenses:
Interest
expense 8,791 11,352 27,530 33,756
Other
expense
(income),
net 65 7 385 (601)
------------ ------------ ------------ ------------
(Loss) income
before (benefit
from) pro-
vision for
income taxes (4,340) 1,519 (10,094) 10,168
(Benefit from)
provision for
income taxes (1,746) 629 (3,508) 4,033
------------ ------------ ------------ ------------
Net (loss)
income $ (2,594) $ 890 $ (6,586) $ 6,135
------------ ------------ ------------ ------------
Basic weighted
average number
of common
shares out-
standing 31,150 30,853 31,053 30,834
============ ============ ============ ============
Basic net
(loss)
income per
share appli-
cable to
common stock $ (0.08) $ 0.03 $ (0.21) $ 0.20
============ ============ ============ ============
Diluted weighted
average number
of common
shares
outstanding 31,150 30,951 31,053 30,947
============ ============ ============ ============
Diluted net
(loss) income
per share
applicable
to common
stock $ (0.08) $ 0.03 $ (0.21) $ 0.20
============ ============ ============ ============
Dividends
declared per
share of
common stock $ -- $ 0.125 $ -- $ 0.38
============ ============ ============ ============
BlueLinx Holdings Inc.
Balance Sheets
in thousands
September 27, December 29,
2008 2007
------------- ------------
(unaudited)
Assets:
Current assets:
Cash $ 71,098 $ 15,759
Receivables, net 244,478 263,176
Inventories, net 260,977 335,887
Deferred income taxes 15,962 12,199
Other current assets 33,015 53,231
---------- ----------
Total current assets 625,530 680,252
---------- ----------
Property, plant, and equipment:
Land and land improvements 53,467 57,295
Buildings 96,179 98,420
Machinery and equipment 68,259 67,217
Construction in progress 2,201 4,212
---------- ----------
Property, plant, and equipment, at cost 220,106 227,144
Accumulated depreciation (64,870) (54,702)
---------- ----------
Property, plant, and equipment, net 155,236 172,442
Non-current deferred income taxes 1,502 2,628
Other assets 24,077 28,114
---------- ----------
Total assets $ 806,345 $ 883,436
---------- ----------
Liabilities:
Current liabilities:
Accounts payable $ 128,842 $ 164,717
Bank overdrafts 21,702 37,152
Accrued compensation 12,246 10,372
Other current liabilities 29,412 19,280
---------- ----------
Total current liabilities 192,202 231,521
---------- ----------
Noncurrent liabilities:
Long-term debt 451,000 478,535
Other non-current liabilities 13,883 18,557
---------- ----------
Total liabilities 657,085 728,613
---------- ----------
Shareholders' Equity:
Common stock 324 312
Additional paid in capital 143,699 142,081
Accumulated other comprehensive income 4,819 5,426
Retained earnings 418 7,004
---------- ----------
Total shareholders' equity 149,260 154,823
---------- ----------
---------- ----------
Total liabilities and shareholders'
equity $ 806,345 $ 883,436
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BlueLinx Holdings Inc.
Statements of Cash Flows
in thousands
Nine Months Ended
-------------------------
Sept. 27, Sept. 29,
2008 2007
----------- -----------
(unaudited) (unaudited)
Cash flows from operating activities:
Net (loss) income $(6,586) $ 6,135
Adjustments to reconcile net (loss)
income to cash provided by (used in)
operations:
Depreciation and amortization 15,011 15,840
Amortization of debt issue costs 1,823 1,823
Non-cash vacant property charges 1,640 --
Deferred income tax benefit (3,506) (1,135)
Share-based compensation expense 2,163 3,061
Gain from insurance settlement -- (1,698)
Excess tax benefits from share-based
compensation arrangements (76) (41)
Changes in assets and liabilities:
Receivables 18,698 (63,679)
Inventories 74,910 (13,836)
Accounts payable (35,875) 28,972
Changes in other working capital 28,895 5,238
Other 2,477 415
--------- ---------
Net cash provided by (used in) operating
activities 99,574 (18,905)
--------- ---------
Cash flows from investing activities:
Property, plant, and equipment investments (2,614) (11,943)
Proceeds from disposition of assets 848 4,335
--------- ---------
Net cash used in investing activities (1,766) (7,608)
--------- ---------
Cash flows from financing activities:
Proceeds from stock options exercised 434 442
Excess tax benefits from share-based
compensation arrangements 76 41
Net (decrease) increase in revolving credit
facility (27,535) 48,538
Decrease in bank overdrafts (15,450) (12,895)
Common stock dividends paid -- (11,689)
Other 6 34
--------- ---------
Net cash (used in) provided by financing
activities (42,469) 24,471
--------- ---------
Increase (decrease) in cash 55,339 (2,042)
Balance, beginning of period 15,759 27,042
--------- ---------
Balance, end of period $ 71,098 $ 25,000
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