BlueLinx Holdings Inc. - FORM 8-K - EX-99.1 - EXHIBIT 99.1 - August 13, 2015

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Exhibit 99.1

4300 Wildwood Parkway
Atlanta, GA 30339
1-888-502-BLUE
www.BlueLinxCo.com

BlueLinx Contacts:
 
 
Susan O’Farrell, SVP, Treasurer & CFO
 
Investor Relations:
BlueLinx Holdings Inc.
 
Caroline Lowden, Director Finance
(770) 953-7000
 
(770) 953-7522


FOR IMMEDIATE RELEASE


BLUELINX ANNOUNCES SECOND-QUARTER RESULTS
- Net Income of $2.9 million -
- Adjusted EBITDA of $9.8 million -



ATLANTA - August 13, 2015 - BlueLinx Holdings Inc. (NYSE:BXC), a leading distributor of building products in North America, today reported financial results for the second quarter ended July 4, 2015.

Second Quarter Financial Highlights
•
Net income of $2.9 million, or $0.03 per diluted share
•
Adjusted EBITDA of $9.8 million
•
Revenue of $515.7 million
•
Selling, general, and administrative expenses down $4.3 million, or 7.7% compared to second quarter 2014
•
Excess availability of $65.0 million as of July 4, 2015, an increase of $5 million over year-end 2014

“Our team remains focused on outstanding customer service, top line growth, margin and cost efficiency as we execute our operational initiatives. While the second quarter was relatively flat to our second quarter in 2014, we saw improvement in June following a particularly wet April and May, and we strive to keep that momentum going for the remainder of the year," said Mitch Lewis, President and Chief Executive Officer.

Susan O’Farrell, Senior Vice President and Chief Financial Officer added, “We continue to explore refinancing options as we carefully weigh the timing of our refinancing efforts against the pre-payment penalty of our existing mortgage, which is approximately $1.0 million per month until December 2015.”

Second Quarter Results Compared to Prior Year Period
The Company recorded net income of $2.9 million, or $0.03 per diluted share, in the fiscal second quarter 2015 versus net income in the fiscal second quarter 2014 of $3.2 million, or $0.04 per diluted share, which included a $5.0 million gain on the sale of property.

Adjusted EBITDA for the fiscal second quarter 2015 of $9.8 million versus Adjusted EBITDA of $10.6 million for the same period a year ago.

Gross profit in fiscal second quarter 2015 was $60.0 million, versus $62.0 million in fiscal second quarter 2014. Overall, gross margins were impacted by the decline in unit volumes that occurred in fiscal second quarter 2015.

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Revenues for the fiscal second quarter ended July 4, 2015, were $515.7 million, compared to $531.5 million in the fiscal second quarter ended July 5, 2014. Overall, revenue was significantly impacted by structural price decreases of 6.5%, which were partially offset by a structural unit volume increase of 0.9%, primarily in the lumber product category.

Liquidity
As of July 4, 2015, the Company had $65.0 million of excess availability under its asset-based revolving credit facilities.

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# 57441061. 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 website, 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 accounting principles generally accepted in the U.S. (“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.

Adjusted EBITDA is a non-GAAP measure that management uses to evaluate the performance of the Company. Adjusted EBITDA, as we define it, is an amount equal to net income (loss) plus interest expense and related items, income taxes, stock compensation, depreciation and amortization, further adjusted to exclude other non-cash items and certain other adjustments. Adjusted EBITDA is presented herein because we believe it is a useful supplement to cash flow from operations in understanding cash flows generated from operations that are available for debt service (interest and principal payments) and further investment in acquisitions. However, Adjusted EBITDA is not a presentation made in accordance with GAAP, and is not intended to present a superior measure of the financial condition from those determined under GAAP.

About BlueLinx Holdings Inc.
BlueLinx Holdings Inc., operating through its wholly owned subsidiary BlueLinx Corporation, is a leading distributor of building products in North America. The Company is headquartered in Atlanta, Georgia and operates its distribution business through its network of 48 distribution centers. BlueLinx is traded on the New York Stock Exchange under the symbol BXC. Additional information about BlueLinx can be found on its website 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 guidance regarding anticipated financial results. 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 prices, supply and/or demand for products that it distributes, general economic and business conditions in the United States; the activities of competitors; changes in significant operating expenses; changes in the availability of capital and interest rates; adverse weather patterns or conditions; acts of cyber intrusion; variations in the performance of the financial markets, including the credit 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, 2015, 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, and changes in expectation or otherwise, except as required by law.

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BLUELINX HOLDINGS INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except per share data)
(unaudited)

 
Three Months Ended
 
Six Months Ended
 
July 4, 2015
 
July 5, 2014
 
July 4, 2015
 
July 5, 2014
Net sales
$
515,656

 
$
531,494

 
$
970,605

 
$
975,438

Cost of sales
455,673

 
469,461

 
860,426

 
860,729

Gross profit
59,983

 
62,033

 
110,179

 
114,709

Operating expenses:
 

 
 

 
 
 
 
Selling, general, and administrative
50,675

 
54,925

 
100,711

 
107,122

Gains from sales of property
—

 
(5,041
)
 
—

 
(5,251
)
Depreciation and amortization
2,438

 
2,421

 
4,716

 
4,773

Total operating expenses
53,113

 
52,305

 
105,427

 
106,644

Net operating income
6,870

 
9,728

 
4,752

 
8,065

Non-operating (income) expenses:
 

 
 

 
 
 
 
Interest expense
6,690

 
6,859

 
13,243

 
13,313

Other (income) expense, net
29

 
(40
)
 
387

 
120

Income (loss) before provision for (benefit from) income taxes
151

 
2,909

 
(8,878
)
 
(5,368
)
Provision for (benefit from) income taxes
(2,719
)
 
(327
)
 
(2,803
)
 
4

Net income (loss)
$
2,870

 
$
3,236

 
$
(6,075
)
 
$
(5,372
)
Weighted average common shares:
 
 
 
 
 
 
 
Basic
87,399

 
85,874

 
87,282

 
85,531

Diluted
87,862

 
86,472

 
87,282

 
85,531

Basic and diluted net income (loss) per share applicable to common stock
$
0.03

 
$
0.04

 
$
(0.07
)
 
$
(0.06
)



3


BLUELINX HOLDINGS INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands)
(unaudited)
 
 
July 4, 2015
 
January 3, 2015
Assets:
 
 
 
Current assets:
 
 
 
Cash
$
2,844

 
$
4,522

Receivables, net of allowances of $3.6 million and $3.1 million, respectively
197,345

 
144,537

Inventories, net
276,362

 
242,546

Other current assets
31,680

 
23,289

Total current assets
508,231

 
414,894

Property, plant, and equipment:
 

 
 

Land and land improvements
41,219

 
41,095

Buildings
90,610

 
90,161

Machinery and equipment
79,431

 
77,279

Construction in progress
594

 
1,188

Property, plant, and equipment, at cost
211,854

 
209,723

Accumulated depreciation
(107,455
)
 
(104,456
)
Property, plant, and equipment, net
104,399

 
105,267

Non-current deferred income tax assets, net
501

 
501

Other non-current assets
10,435

 
18,320

Total assets
$
623,566

 
$
538,982

Liabilities:
 

 
 

Current liabilities:
 

 
 

Accounts payable
$
115,058

 
$
67,291

Bank overdrafts
11,852

 
27,280

Accrued compensation
4,316

 
5,643

Current maturities of long-term debt
203,142

 
2,679

Deferred income taxes, net
518

 
518

Other current liabilities
13,772

 
13,831

Total current liabilities
348,658

 
117,242

Non-current liabilities:
 

 
 

Long-term debt
264,113

 
403,274

Pension benefit obligation
31,956

 
41,734

Other non-current liabilities
13,394

 
12,758

Total liabilities
658,121

 
575,008

Stockholders’ deficit:
 

 
 

Common Stock, $0.01 par value, Authorized - 200,000,000 shares; Issued - 89,521,404 and 88,748,638 shares, respectively
896

 
888

Additional paid-in capital
254,380

 
253,051

Accumulated other comprehensive loss
(28,217
)
 
(34,425
)
Accumulated stockholders' deficit
(261,614
)
 
(255,540
)
Total stockholders’ deficit
(34,555
)
 
(36,026
)
Total liabilities and stockholders’ deficit
$
623,566

 
$
538,982



4


BLUELINX HOLDINGS INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)
(unaudited)
 
 
Six Months Ended 
 July 4, 2015
 
Six Months Ended 
 July 5, 2014
Cash flows from operating activities:
 
 
 
Net loss
$
(6,075
)
 
$
(5,372
)
Adjustments to reconcile net loss to net cash used in operations:
 

 
 

Depreciation and amortization
4,716

 
4,773

Amortization of debt discount and issuance costs
1,506

 
1,689

Gains from sales of property
—

 
(5,251
)
Severance charges
853

 
1,276

Intraperiod income tax allocation related to pension plan
(1,134
)
 
(150
)
Pension expense
476

 
450

Share-based compensation expense
1,181

 
2,873

Other
(643
)
 
232

Changes in operating assets and liabilities:
 

 
 

Receivables, net
(52,808
)
 
(55,209
)
Inventories, net
(33,816
)
 
(44,064
)
Accounts payable
47,767

 
39,620

Restructuring liability
(519
)
 
(1,597
)
Restricted cash related to insurance and other
(803
)
 
(701
)
Prepaid assets
(1,650
)
 
(7,288
)
Accrued compensation and other assets and liabilities
(5,298
)
 
390

Net cash used in operating activities
(46,247
)
 
(68,329
)
Cash flows from investing activities:
 

 
 

Property, plant, and equipment investments
(1,135
)
 
(1,253
)
Proceeds from sale of assets
436

 
7,213

Net cash provided by (used in) investing activities
(699
)
 
5,960

Cash flows from financing activities:
 

 
 

Repurchase of shares to satisfy employee tax withholdings
(261
)
 
(894
)
Repayments on revolving credit facilities
(187,394
)
 
(216,746
)
Borrowings from revolving credit facilities
256,647

 
290,023

Principal payments on mortgage
(8,534
)
 
(8,262
)
Payments on capital lease obligations
(1,614
)
 
(1,176
)
Increase (decrease) in bank overdrafts
(15,428
)
 
3,202

Decrease (increase) in restricted cash related to the mortgage
1,886

 
(1,019
)
Debt financing costs
(34
)
 
—

Payments on stock offering, less expenses paid
—

 
(98
)
Net cash provided by financing activities
45,268

 
65,030

Increase (decrease) in cash
(1,678
)
 
2,661

Cash balance, beginning of period
4,522

 
5,034

Cash balance, end of period
$
2,844

 
$
7,695

Supplemental Cash Flow Information
 
 
 
Noncash investing and financing transactions:
 
 
 
Equipment under capital leases
$
2,029

 
$
1,107

Debt financing costs
$
1,252

 
$
201




5


BLUELINX HOLDINGS INC.
RECONCILIATION OF NET INCOME (LOSS) TO NON-GAAP ADJUSTED EBITDA
(In thousands)
(unaudited)

 
Quarter Ended
 
Six Months Ended
 
July 4, 2015
 
July 5, 2014
 
July 4, 2015
 
July 5, 2014
 
(Dollars in thousands)
(unaudited)
Net income (loss)
$
2,870

 
$
3,236

 
$
(6,075
)
 
$
(5,372
)
Adjustments:
 
 
 
 
 
 
 
Depreciation and amortization
2,438

 
2,421

 
4,716

 
4,773

Interest expense
6,690

 
6,859

 
13,243

 
13,313

Provision for (benefit from) income taxes
(2,719
)
 
(327
)
 
(2,803
)
 
4

Gain from the sale of properties
—

 
(5,041
)
 
—

 
(5,251
)
Share-based compensation expense, excluding restructuring
519

 
637

 
1,135

 
1,327

Restructuring, severance, debt fees, and other
(36
)
 
2,821

 
(65
)
 
2,821

Adjusted EBITDA
$
9,762

 
$
10,606

 
$
10,151

 
$
11,615


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