ATLANTA, Feb. 15, 2006 (PRIMEZONE) -- BlueLinx Holdings Inc. (NYSE:BXC), a leading distributor of building products in North America, today reported financial results for the fourth quarter and full year ended December 31, 2005.
Revenues for the fourth quarter were $1.33 billion, up 10.1% from $1.21 billion for the fourth quarter of 2004. The increase reflects 5% growth in unit sales volume, driven in large part by a 12.7% increase in specialty product unit volume, as well as favorable year-over-year pricing. Net income for the fourth quarter was $14.5 million, or $0.48 per diluted share, compared with a net loss of $2.7 million, or $0.09 per diluted share, for the prior-year period.
For purposes of comparison, the 2004 fourth-quarter and full-year statements of operations are presented on a pro forma basis, as if BlueLinx had been a stand-alone, publicly traded entity since December 29, 2002.
Gross profit for the fourth quarter was $140.4 million, compared with $101.4 million in the prior-year period. Gross margin was 10.6%, compared with 8.4% a year ago, reflecting growth in higher-margin specialty products and improved structural product margins. Total operating expenses of $105.7 million for the fourth quarter increased $9.1 million from the same period a year ago, primarily reflecting ongoing operating expenses associated with the company's Lane Stanton Vance (LSV) division, the specialty hardwoods distributor that was acquired in July 2005, and increased compensation expenses. Operating income for the quarter was $34.7 million, compared with $4.8 million for the fourth quarter last year.
For the full year ended December 31, 2005, BlueLinx sales totaled $5.62 billion, up 1.1% from $5.56 billion the prior year. Gross profit was $512.4 million compared with $563.8 million for 2004, translating to gross margins of 9.1% and 10.1%, respectively. Lower gross profit for 2005 primarily reflects a decline in structural product margins. Total operating expenses of $396.8 million for the full year declined by $3.5 million. Net income totaled $44.6 million, or $1.46 per diluted share, compared with $74.6 million, or $2.47 per diluted share, in 2004.
"BlueLinx demonstrated solid execution on our primary strategic objectives during the fourth quarter," said Stephen Macadam, chief executive officer. "We gained traction in our specialty products business, evidenced by a 12.7% year-over-year increase in specialty unit volume. This increase includes a 3.1 percentage point contribution from LSV, the acquisition of which reflects our strategy to supplement organic growth with targeted acquisitions. We also effectively managed structural inventories in a volatile pricing environment that was characterized by steeply falling structural prices in the first half of the quarter. Additionally, we continued to demonstrate the commitment to add the people, systems and processes necessary to profitably grow our business. Our strong performance also benefited from better-than-expected end-use demand in new home construction, manufactured housing and industrial markets, which we believe was partly a result of unseasonably mild winter weather in many parts of the country.
"Looking forward, we believe BlueLinx is well positioned for continued execution of our strategic growth plan as a leader in the building products distribution marketplace," Macadam said. "We anticipate market conditions will remain challenging, with 2006 housing starts expected to decline approximately 10% from 2005 levels, offset in part by a rebound in manufactured housing and continued growth in industrial markets. As a result, we expect an overall decline in end-use demand of approximately 1% to 2% for 2006, with a moderate decline in structural prices, based on decreased demand and increased supply of some products. We will seek to offset the impact of these anticipated market conditions by gaining market share, continuing to improve our product mix with higher margin, less price sensitive specialty products, and managing our structural inventory to minimize margin risk."
2005 Results Versus As Reported 2004 Results
Sales for the fourth quarter ended December 31, 2005, were $1.33 billion, compared with $1.21 billion for the same period last year. Gross profit rose to $140.4 million from $101.4 million in the prior-year period primarily reflecting increased unit volume sales and improved year-over-year pricing. Net income for the fourth quarter of 2005 was $14.5 million, compared with a loss of $5.8 million the previous year.
For the full year ended December 31, 2005, BlueLinx reported sales of $5.62 billion, compared with $5.56 billion last year. Gross profit was $512.4 million compared with $560.4 million in 2004. Net income was $44.6 million, compared with $76.3 million a year earlier. The company's net income of $76.3 million for 2004 was achieved partially as a division of Georgia-Pacific Corporation and did not include interest expense and certain corporate overhead expenses that are included in the results for 2005.
Dividend
On February 14, 2006, the BlueLinx Board of Directors declared a $0.125 dividend on the company's common shares for the quarter ended December 31, 2005. The dividend is payable on March 31, 2006, to shareholders of record on March 15, 2006.
Basis of Presentation
This release provides unaudited financial statements for the fourth-quarter and full-year periods of 2005 and 2004. For purposes of comparison, the statements of operations for the fourth quarter and 12 months ended January 1, 2005, are provided on both an as reported and a pro forma basis. Last year's pro forma results reflect the acquisition by BlueLinx of the real estate and operating assets of the building products distribution division of Georgia-Pacific Corporation and the BlueLinx Holdings Inc.'s subsequent IPO on December 14, 2004. Results have been adjusted to reflect the acquisition transaction, mortgage refinancing transaction, and offering transaction, and are presented as if BlueLinx Holdings Inc. had been a standalone entity since December 29, 2002. On a pro forma basis, diluted earnings per share is calculated using 30.2 million shares. Detailed reconciliations of all pro forma adjustments are included in the slide presentation accompanying the company's fourth-quarter conference call, which can be found in the investor relations section on the BlueLinx web site at www.BlueLinxCo.com. Additionally, rebar/remesh, which previously was classified with other metals as a specialty product, has been reclassified as a structural product for all periods presented. Rebar was reclassified because its supply, demand and distribution characteristics are similar to other structural products.
Conference Call
BlueLinx will host a conference call today at 10:00 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. 4904545. 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 which 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 January 1, 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 Years Ended
----------------------- -----------------------
BlueLinx BlueLinx BlueLinx BlueLinx
As Reported Proforma As Reported Proforma
---------- ---------- ---------- ----------
December 31, January 1, December 31, January 1,
2005 2005 2005 2005
---------- ---------- ---------- ----------
(unaudited) (unaudited) (unaudited) (unaudited)
Net sales $1,329,259 $1,207,627 $5,622,071 $5,558,154
Cost of sales 1,188,866 1,106,203 5,109,632 4,994,386
---------- ---------- ---------- ----------
Gross profit 140,393 101,424 512,439 563,768
---------- ---------- ---------- ----------
Operating expenses:
Selling, general,
and administrative 100,699 92,692 378,008 384,781
Depreciation and
amortization 4,977 3,895 18,770 15,487
---------- ---------- ---------- ----------
Total operating
expenses 105,676 96,587 396,778 400,268
---------- ---------- ---------- ----------
Operating income 34,717 4,837 115,661 163,500
Non-operating
expenses (income):
Interest expense 11,105 9,924 42,311 37,679
Other expense
(income), net 128 (482) 186 98
---------- ---------- ---------- ----------
Income (loss) before
provision for
(benefit from)
income taxes 23,484 (4,605) 73,164 125,723
Provision for
(benefit from)
income taxes 8,946 (1,874) 28,561 51,170
---------- ---------- ---------- ----------
Net income (loss) 14,538 (2,731) 44,603 74,553
Less: Preferred
stock dividends -- -- -- --
---------- ---------- ---------- ----------
Net income (loss)
applicable to
common share-
holders $ 14,538 $ (2,731) $ 44,603 $ 74,553
========== ========== ========== ==========
Basic weighted
average number of
common shares
outstanding 30,240 30,185 30,195 30,185
========== ========== ========== ==========
Basic net income
(loss) per share
applicable to common
stock $ 0.48 $ (0.09) $ 1.48 $ 2.47
========== ========== ========== ==========
Diluted weighted
average number of
common shares
outstanding 30,551 30,185 30,494 30,185
========== ========== ========== ==========
Diluted net income
(loss) per share
applicable to common
stock $ 0.48 $ (0.09) $ 1.46 $ 2.47
========== ========== ========== ==========
Dividends declared
per share of
common stock $ 0.125 $ 0.50
========== ==========
BlueLinx Holdings Inc.
Statements of Operations
in thousands, except per share data
Quarters Ended Years Ended
----------------------- -----------------------
BlueLinx BlueLinx BlueLinx BlueLinx
As As As As
Reported Reported Reported Reported
(Combined)
---------- ---------- ---------- ----------
December 31, January 1, December 31, January 1,
2005 2005 2005 2005
---------- ---------- ---------- ----------
(unaudited) (unaudited) (unaudited) (unaudited)
Net sales $1,329,259 $1,207,627 $5,622,071 $5,558,154
Cost of sales 1,188,866 1,106,203 5,109,632 4,997,713
---------- ---------- ---------- ----------
Gross profit 140,393 101,424 512,439 560,441
---------- ---------- ---------- ----------
Operating expenses:
Selling, general,
and administrative 100,699 92,692 378,008 387,494
Depreciation and
amortization 4,977 3,895 18,770 16,307
---------- ---------- ---------- ----------
Total operating
expenses 105,676 96,587 396,778 403,801
---------- ---------- ---------- ----------
Operating income 34,717 4,837 115,661 156,640
Non-operating
expenses (income):
Interest expense 11,105 11,057 42,311 28,765
Write-off debt
issue costs -- 2,871 -- 2,871
Other expense
(income), net 128 (482) 186 98
---------- ---------- ---------- ----------
Income (loss) before
provision for
(benefit from)
income taxes 23,484 (8,609) 73,164 124,906
Provision for
(benefit from)
income taxes 8,946 (2,803) 28,561 48,563
---------- ---------- ---------- ----------
Net income (loss) 14,538 (5,806) 44,603 $ 76,343
==========
Less: Preferred
stock dividends -- 1,255 --
---------- ---------- ----------
Net income (loss)
applicable to
common share-
holders $ 14,538 $ (7,061) $ 44,603
========== ========== ==========
Basic weighted
average number of
common shares
outstanding 30,240 20,507 30,195
========== ========== ==========
Basic net income
(loss) per share
applicable to
common stock $ 0.48 $ (0.34) $ 1.48
========== ========== ==========
Diluted weighted
average number of
common shares
outstanding 30,551 20,507 30,494
========== ========== ==========
Diluted net income
(loss) per share
applicable to
common stock $ 0.48 $ (0.34) $ 1.46
========== ========== ==========
Dividends declared
per share of
common stock $ 0.125 $ 0.50
========== ==========
BlueLinx Holdings Inc.
Balance Sheets
in thousands
BlueLinx BlueLinx
As Reported As Reported
----------- -----------
December 31, January 1,
2005 2005
----------- -----------
(unaudited)
Assets:
Current assets:
Cash $ 24,320 $ 15,572
Receivables 399,093 363,688
Inventories 473,068 500,231
Deferred income taxes 6,678 6,122
Other current assets 44,909 34,203
----------- -----------
Total current assets 948,068 919,816
----------- -----------
Property, plant, and equipment:
Land and land improvements 56,521 55,573
Buildings 93,381 93,133
Machinery and equipment 54,200 41,063
Construction in progress 2,350 5,089
----------- -----------
Property, plant, and equipment, at cost 206,452 194,858
Accumulated depreciation (22,403) (7,880)
----------- -----------
Property, plant, and equipment, net 184,049 186,978
Other non-current assets 25,523 30,268
----------- -----------
Total assets $ 1,157,640 $ 1,137,062
=========== ===========
Liabilities :
Current liabilities:
Accounts payable $ 327,004 $ 270,271
Bank overdrafts 62,392 32,033
Accrued compensation 13,494 18,292
Current maturities of long-term debt -- 94,103
Other current liabilities 15,195 13,142
----------- -----------
Total current liabilities 418,085 427,841
----------- -----------
Noncurrent liabilities:
Long-term debt 540,850 558,000
Deferred income taxes 1,911 740
Other long-term liabilities 12,942 8,989
----------- -----------
Total liabilities 973,788 995,570
----------- -----------
Shareholders' Equity:
Common stock 303 295
Additional paid in capital 132,346 121,306
Accumulated other comprehensive income 1,023 (789)
Retained earnings 50,180 20,680
----------- -----------
Total shareholders' equity 183,852 141,492
----------- -----------
Total liabilities and equity $ 1,157,640 $ 1,137,062
=========== ===========
BlueLinx Holdings Inc.
Statements of Cash Flows
in thousands
Years Ended
-------------------------
BlueLinx BlueLinx
As Reported As Reported
(Combined)
--------- ---------
December 31, January 1,
2005 2005
--------- ---------
(unaudited) (unaudited)
Cash flows from operating activities:
Net income $ 44,603 $ 76,343
Adjustments to reconcile net income
to cash provided by (used in) operations:
Depreciation and amortization 18,770 16,307
Amortization of debt issue costs 3,629 2,323
Write-off of debt issue costs -- 2,871
Deferred income tax provision (benefit) (368) 4,714
Changes in assets and liabilities:
Receivables (30,609) (70,821)
Inventories 36,889 (158,769)
Accounts payable 56,605 160,078
Changes in other working capital (12,902) (10,692)
Other 8,171 910
--------- ---------
Net cash provided by (used in)
operating activities 124,788 23,264
--------- ---------
Cash flows from investing activities:
Acquisitions, net of cash acquired (16,908) (823,330)
Property, plant, and equipment investments (12,744) (11,137)
Proceeds from sale of assets 1,153 349
--------- ---------
Net cash used in investing activities (28,499) (834,118)
--------- ---------
Cash flows from financing activities:
Net transactions with
Georgia-Pacific Corporation -- 88,352
Preferred stock, net -- (5,226)
Issuance of common stock, net 8,548 120,513
Proceeds from stock options exercised 478 --
Net increase (decrease) in
revolving credit facility (111,253) 487,103
Other long-term debt, net -- 165,000
Debt financing costs (570) (21,236)
Increase in bank overdrafts 30,359 (8,586)
Common dividends paid (15,103) --
--------- ---------
Net cash provided by (used in)
financing activities (87,541) 825,920
--------- ---------
Increase (decrease) in cash 8,748 15,066
Balance, beginning of period 15,572 506
--------- ---------
Balance, end of period $ 24,320 $ 15,572
========= =========
BlueLinx Holdings Inc.
Statements of Operations
As Reported Reconciliation
in thousands, except per share data
BlueLinx
BlueLinx BlueLinx Distribution As
As As Division As Reported
Reported Reported Reported (Combined)
---------- ---------- ---------- ----------
Years Ended Period from Period from Year Ended
Dec. 31, Inception Jan. 4, 2004 Jan. 1,
(March 8, 2004) to May 7,
to Jan. 1,
2005 2005 2004 2005
---------- ---------- ---------- ----------
(unaudited) (unaudited)
Net sales $5,622,071 $3,672,820 $1,885,334 $5,558,154
Cost of sales 5,109,632 3,339,590 1,658,123 4,997,713
---------- ---------- ---------- ----------
Gross profit 512,439 333,230 227,211 560,441
---------- ---------- ---------- ----------
Operating expenses:
Selling, general,
and administrative 378,008 248,291 139,203 387,494
Depreciation and
amortization 18,770 10,132 6,175 16,307
---------- ---------- ---------- ----------
Total operating
expenses 396,778 258,423 145,378 403,801
---------- ---------- ---------- ----------
Operating income 115,661 74,807 81,833 156,640
Non-operating
expenses (income):
Interest expense 42,311 28,765 -- 28,765
Write-off debt
issue costs -- 2,871 -- 2,871
Other expense
(income) net 186 (516) 614 98
---------- ---------- ---------- ----------
Income (loss)
before provision
for (benefit from)
income taxes 73,164 43,687 81,219 124,906
Provision for
(benefit from)
income taxes 28,561 17,781 30,782 48,563
---------- ---------- ---------- ----------
Net income (loss) 44,603 25,906 $ 50,437 $ 76,343
========== ==========
Less: Preferred
stock dividends -- 5,226
---------- ----------
Net income (loss)
applicable to
common share-
holders $ 44,603 $ 20,680
========== ==========
Basic weighted
average number of
common shares
outstanding 30,195 19,006
========== ==========
Basic net income
(loss) per share
applicable to
common stock $ 1.48 $ 1.09
========== ==========
Diluted weighted
average number of
common shares
outstanding 30,494 20,296
========== ==========
Diluted net income
(loss) per share
applicable to
common stock $ 1.46 $ 1.02
========== ==========
Dividends declared
per share of
common stock $ 0.50
==========
BlueLinx Holdings Inc.
Statements of Cash Flows
As Reported Reconciliation
in thousands
BlueLinx
BlueLinx BlueLinx Distribution As
As As Division As Reported
Reported Reported Reported (Combined)
--------- --------- --------- ---------
Period from Period from
Fiscal Inception Jan. 4, Fiscal
Year (March 8, 2004 Year
Ended 2004) to Ended
Dec. 31, to Jan. 1, May 7, Jan. 1,
2005 2005 2004 2005
--------- --------- --------- ---------
(unaudited) (unaudited)
Cash flows from
operating
activities:
Net income $ 44,603 $ 25,906 $ 50,437 $ 76,343
Adjustments to
reconcile
net income to cash
provided by (used in)
operations:
Depreciation and
amortization 18,770 10,132 6,175 16,307
Amortization of
debt issue costs 3,629 2,323 -- 2,323
Write-off of debt
issue costs -- 2,871 -- 2,871
Deferred income tax
provision (benefit) (368) (4,469) 9,183 4,714
Changes in assets and
liabilities:
Receivables (30,609) 221,529 (292,350) (70,821)
Inventories 36,889 (13,080) (145,689) (158,769)
Accounts payable 56,605 (97,694) 257,772 160,078
Changes in other
working capital (12,902) (13,156) 2,464 (10,692)
Other 8,171 2,884 (1,974) 910
--------- --------- --------- ---------
Net cash provided by
(used in) operating
activities 124,788 137,246 (113,982) 23,264
--------- --------- --------- ---------
Cash flows from
investing
activities:
Acquisitions, net of
cash acquired (16,908) (823,330) -- (823,330)
Property, plant, and
equipment investments (12,744) (9,759) (1,378) (11,137)
Proceeds from sale of
assets 1,153 97 252 349
--------- --------- --------- ---------
Net cash used in
investing activities (28,499) (832,992) (1,126) (834,118)
--------- --------- --------- ---------
Cash flows from
financing activities:
Net transactions with
Georgia-Pacific
Corporation -- -- 88,352 88,352
Preferred stock, net -- (5,226) -- (5,226)
Issuance of common
stock, net 8,548 120,513 -- 120,513
Proceeds from stock
options exercised 478 -- -- --
Net increase (decrease)
in revolving credit
facility (111,253) 487,103 -- 487,103
Other long-term debt,
net -- 165,000 -- 165,000
Debt financing costs (570) (21,236) -- (21,236)
Increase (decrease) in
bank overdrafts 30,359 (34,836) 26,250 (8,586)
Common dividends paid (15,103) -- -- --
--------- --------- --------- ---------
Net cash provided by
(used in) financing
activities (87,541) 711,318 114,602 825,920
--------- --------- --------- ---------
Increase (decrease)
in cash 8,748 15,572 (506) 15,066
Balance, beginning
of period 15,572 -- 506 506
--------- --------- --------- ---------
Balance, end of period $ 24,320 $ 15,572 $ -- $ 15,572
========= ========= ========= =========