– Net Profit of $12.0 Million on 27% Revenue Decline –
– Expects Tax Refund of $20.4 Million –
ATLANTA, Feb. 17, 2010 (GLOBE NEWSWIRE) --BlueLinx Holdings Inc. (NYSE:BXC), a leading distributor of building products in North America, today reported financial results for the fourth quarter ended January 2, 2010.
The Company generated net income of $12.0 million, or $0.37 per diluted share for the fourth quarter of 2009, compared with a net loss of $25.1 million, or $0.81 per diluted share, in the year-ago period. The fourth-quarter results include a tax benefit of $23.6 million or $0.72 per diluted share. This income tax benefit is comprised of a $20.4 million benefit related to our anticipated tax refund on our 2009 taxable loss, due to the extension of the net operating loss carry back provision to five years and a $3.3 million non-cash benefit related to the allocation of income tax expense to other comprehensive income, which is recorded in shareholders' equity, partially offset by other income tax expense. Revenues decreased 27% to $366.1 million from $501.5 million for the same period a year ago. Overall unit volume fell 23%. The sales decline was mainly due to lower unit volumes in both structural and specialty products driven predominately by a 20% decline in housing starts relative to year-ago levels.
Gross profit for the fourth quarter totaled $45.3 million, down 2.5% from $46.4 million in the prior-year period, reflecting lower unit volume associated with the decline in housing starts. Gross margins of 12.4% increased from the 9.3% margins generated in the year earlier period. Total operating expenses decreased $23.2 million, or 32% from the same period a year ago, as the Company continued to align its cost structure to the current operating environment and recognized a deferred gain of $6.0 million from the sale of a surplus property in the fourth quarter of 2008. Reported operating loss for the quarter was $4.8 million, compared with an operating loss of $26.8 million a year ago.
"While conditions remain difficult, I believe that we have reached the bottom of this four-year decline," said BlueLinx President and CEO George Judd. "As we move forward in 2010, we are confident in our ability to both increase our share of the market and maintain the operating discipline that we demonstrated throughout 2009."
For the full year ended January 2, 2010, net loss totaled $61.5 million, or $1.98 per diluted share, on revenues of $1.65 billion, compared with a net loss of $31.7 million, or $1.02 per diluted share, on revenues of $2.8 billion a year ago. The decline in income and revenue was largely due to the 39% decline in housing construction activity relative to the prior period, as well as various charges taken during the twelve month period including the recognition of a tax valuation allowance, facility consolidation and severance related costs, and interest charges associated with our ineffective interest rate swap. These charges are quantified below.
Gross profit for the full year ended January 2, 2010 totaled $193.2 million and gross margin was 11.7%, compared with $314.9 million and 11.3%, respectively, a year earlier. Operating expenses declined $114.5 million, or 35.4%, from $323.9 million a year ago.
The Company's operating results for the fourth quarter of 2009 and the full-year period, 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) |
Quarter Ended January 2, 2010 |
Year Ended January 2, 2010 |
| Pretax loss | ($11.6) | ($56.9) |
| Gain on early cancellation of Master Supply Agreement with G-P | (0.2) | (17.8) |
| Gain on sale of certain surplus properties | (6.0) | (10.4) |
| Changes associated with the ineffective interest rate swap | (1.1) | 6.3 |
| Facility consolidations & severance related costs | -- | 2.2 |
| Write-off of debt issuance costs | -- | 1.4 |
| Adjusted pretax loss | (18.9) | (75.2) |
| Adjusted benefit from income taxes | (10.3) | (33.8) |
| Adjusted net loss | ($8.6) | ($41.4) |
| Diluted weighted average shares | 32.7 | 31.0 |
| Adjusted diluted net loss per share applicable to common shares | ($0.26) | ($1.34) |
The above table reflects the following events which occurred during the fourth quarter and the full-year period: (i) the Company reached an agreement with Georgia-Pacific LLC ("G-P") to cancel our Master Supply Agreement one year prior to the original expiration date, with G-P agreeing to make four quarterly payments to BlueLinx starting May 1, 2009; (ii) during the quarter the Company realized a $6 million deferred gain recorded on the sale of a surplus property in the fourth quarter of fiscal 2008, in addition certain other surplus properties were sold in the full-year period; (iii) during the quarter the Company recorded a reduction to the fair value of the ineffective interest rate swap. In the full-year period, the Company reduced its borrowings under the revolving credit facility by $100 million resulting in non-cash interest charges, partially offset by a reduction in fair value, related to its ineffective interest rate swap; (iv) the Company recorded other restructuring costs related to facility consolidations and severance expense; and (v) the Company wrote-off a portion of its debt issuance costs related to the Company's decision to lower its revolving credit facility from $800 million to $500 million which resulted in a non-cash charge. The adjusted benefit from income taxes reflected in the table is based on the Company's effective tax rate for both the current quarter and full-year period, excluding the valuation allowance recorded against its deferred tax assets of $29.3 million for the full-year period, which assumes we are in a position to demonstrate that our deferred tax assets were 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 706-645-9291, Conference ID# 55215557. 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 2,000 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, including statements relating to 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 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 January 3, 2009 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 | Years Ended | |||
|
January 2, 2010 |
January 3, 2009 |
January 2, 2010 |
January 3, 2009 |
|
| (unaudited) | (unaudited) | (unaudited) | (unaudited) | |
| Net sales | $ 366,108 | $ 501,514 | $ 1,646,108 | $ 2,779,699 |
| Cost of sales | 320,828 | 455,068 | 1,452,947 | 2,464,766 |
| Gross profit | 45,280 | 46,446 | 193,161 | 314,933 |
| Operating expenses: | ||||
| Selling, general, and administrative | 46,469 | 67,748 | 210,214 | 303,403 |
| Net gain from terminating the Georgia-Pacific supply agreement | (217) | -- | (17,772) | -- |
| Depreciation and amortization | 3,831 | 5,508 | 16,984 | 20,519 |
| Total operating expenses | 50,083 | 73,256 | 209,426 | 323,922 |
| Operating loss | (4,803) | (26,810) | (16,265) | (8,989) |
| Non-operating expenses: | ||||
| Interest expense | 7,846 | 11,017 | 32,456 | 38,547 |
| Changes associated with the ineffective interest rate swap, net | (1,089) | -- | 6,252 | -- |
| Write-off of debt issuance costs | -- | -- | 1,407 | -- |
| Other expense, net | 37 | 216 | 519 | 601 |
| Loss before (benefit from) provision for income taxes | (11,597) | (38,043) | (56,899) | (48,137) |
| (Benefit from) provision for income taxes | (23,622) | (12,926) | 4,564 | (16,434) |
| Net income (loss) | $ 12,025 | $ (25,117) | $ (61,463) | $ (31,703) |
|
Basic weighted average number of common shares outstanding |
32,550 | 31,164 | 31,017 | 31,083 |
|
Basic net income (loss) per share applicable to common shares |
$ 0.37 | $ (0.81) | $ (1.98) | $ (1.02) |
|
Diluted weighted average number of common shares outstanding |
32,666 | 31,164 | 31,017 | 31,083 |
|
Diluted net income (loss) per share applicable to common shares |
$ 0.37 | $ (0.81) | $ (1.98) | $ (1.02) |
| BlueLinx Holdings Inc. | ||
| Balance Sheets | ||
| in thousands | ||
|
January 2, 2010 |
January 3, 2009 |
|
| (unaudited) | (unaudited) | |
| Assets: | ||
| Current assets: | ||
| Cash and cash equivalents | $ 29,457 | $ 150,353 |
| Receivables, net | 119,347 | 130,653 |
| Inventories, net | 173,185 | 189,482 |
| Deferred income tax assets | -- | 11,868 |
| Other current assets | 44,970 | 34,122 |
| Total current assets | 366,959 | 516,478 |
| Property, plant, and equipment: | ||
| Land and improvements | 52,621 | 53,426 |
| Buildings | 96,145 | 96,159 |
| Machinery and equipment | 69,767 | 70,491 |
| Construction in progress | 791 | 2,035 |
| Property, plant, and equipment, at cost | 219,324 | 222,111 |
| Accumulated depreciation | (82,141) | (69,336) |
| Property, plant, and equipment, net | 137,183 | 152,775 |
| Non-current deferred income tax assets | -- | 17,468 |
| Other non-current assets | 42,704 | 42,457 |
| Total assets | $ 546,846 | $ 729,178 |
| Liabilities: | ||
| Current liabilities: | ||
| Accounts payable | $ 64,618 | $ 78,367 |
| Bank overdrafts | 27,232 | 24,715 |
| Accrued compensation | 4,879 | 11,552 |
| Current maturities of long-term debt | -- | 60,000 |
| Other current liabilities | 22,508 | 21,317 |
| Total current liabilities | 119,237 | 195,951 |
| Noncurrent liabilities: | ||
| Long-term debt | 341,669 | 384,870 |
| Other non-current liabilities | 35,120 | 45,505 |
| Total liabilities | 496,026 | 626,326 |
| Shareholders' Equity: | ||
| Common stock | 322 | 323 |
| Additional paid in capital | 145,035 | 144,148 |
| Accumulated other comprehensive loss | (8,375) | (16,920) |
| Accumulated deficit | (86,162) | (24,699) |
| Total shareholders' equity | 50,820 | 102,852 |
| Total liabilities and shareholders' equity | $ 546,846 | $ 729,178 |
| BlueLinx Holdings Inc. | ||
| Statements of Cash Flows | ||
| in thousands | ||
| Years Ended | ||
|
January 2, 2010 |
January 3, 2009 |
|
| (unaudited) | (unaudited) | |
| Cash flows from operating activities: | ||
| Net loss | $ (61,463) | $ (31,703) |
|
Adjustments to reconcile net loss to cash (used in) provided by operations: |
||
| Depreciation and amortization | 16,984 | 20,519 |
| Amortization of debt issuance costs | 2,459 | 2,479 |
| Net gain from terminating the Georgia-Pacific supply agreement | (17,772) | -- |
| Payments from terminating the Georgia-Pacific supply agreement | 14,118 | -- |
| Gain from sale of properties | (10,397) | (1,936) |
| Prepayment fees associated with sale of facility | 616 | 1,868 |
| Changes associated with the ineffective interest rate swap, net | 6,252 | -- |
| Write-off of debt issuance costs | 1,407 | -- |
| Non-cash vacant property charges | 1,222 | 4,441 |
| Deferred income tax provision (benefit) | 23,851 | (2,935) |
| Share-based compensation expense | 2,922 | 2,614 |
| Excess tax benefits from share-based compensation arrangements | -- | (81) |
| Increase in restricted cash related to the swap, insurance, and other | (2,511) | (6,210) |
| Changes in assets and liabilities: | ||
| Receivables | 11,306 | 132,523 |
| Inventories | 16,297 | 146,405 |
| Accounts payable | (13,749) | (86,350) |
| Changes in other working capital | (12,805) | 20,440 |
| Other | 1,410 | (11,684) |
| Net cash (used in) provided by operating activities | (19,853) | 190,390 |
| Cash flows from investing activities: | ||
| Property, plant, and equipment investments | (1,815) | (4,919) |
| Proceeds from disposition of assets | 14,451 | 5,904 |
| Net cash provided by investing activities | 12,636 | 985 |
| Cash flows from financing activities: | ||
| Repurchase of common stock | (2,042) | -- |
| Proceeds from stock options exercised | -- | 434 |
| Excess tax benefits from share-based compensation arrangements | -- | 81 |
| Decrease in the revolving credit facility | (100,000) | (27,535) |
| Payment of principal on mortgage | (3,201) | (6,130) |
| Prepayment fees associated with sale of facility | (616) | (1,868) |
| Increase (decrease) in bank overdrafts | 2,517 | (12,437) |
| Debt financing costs | -- | (217) |
| Increase in restricted cash related to the mortgage | (10,296) | (9,119) |
| Other | (41) | 10 |
| Net cash used in financing activities | (113,679) | (56,781) |
| (Decrease) increase in cash | (120,896) | 134,594 |
| Balance, beginning of period | 150,353 | 15,759 |
| Balance, end of period | $ 29,457 | $ 150,353 |
| BlueLinx Holdings Inc. | ||
| Reconciliation of GAAP Net Income (Loss) to Adjusted Net Loss | ||
| in thousands | ||
| GAAP Reconciliation |
Quarter Ended January 2, 2010 |
Year Ended January 2, 2010 |
| (unaudited) | (unaudited) | |
| GAAP net income (loss) | $ 12,025 | $ (61,463) |
| Gain on early cancellation of Master Supply Agreement with G-P | (217) | (17,772) |
| Gain from sale of certain surplus properties | (5,990) | (10,397) |
| Changes associated with the ineffective interest rate swap, net | (1,089) | 6,252 |
| Facility consolidations & severance related costs | -- | 2,153 |
| Write-off of debt issue costs | -- | 1,407 |
| Tax effect of selected charges | 3,022 | 9,076 |
| Valuation allowance | (16,324) | 29,336 |
| Adjusted net loss | $ (8,573) | $ (41,408) |