BlueLinx Announces First Quarter 2024 Results
FIRST QUARTER 2024 HIGHLIGHTS
-
Net sales of
$726 million -
Gross profit of
$128 million , gross margin of 17.6% and specialty products margin of 20.7%, which includes a net benefit of approximately$7 million related to import duties from prior periods -
Net income of
$17 million , or$2.00 diluted earnings per share -
Adjusted net income of
$19 million , or$2.14 adjusted diluted earnings per share (non-GAAP) -
Adjusted EBITDA of
$39 million (non-GAAP), or 5.3% of net sales, which includes a net benefit of approximately$7 million related to import duties from prior periods -
Operating cash used of
($31) million and free cash flow of($37) million (non-GAAP) -
Available liquidity of
$828 million , including$481 million of cash and cash equivalents -
Net debt of
($133) million and net leverage ratio of (0.8x), excluding real property finance lease liabilities
“We are off to a solid start to 2024, despite ongoing deflationary pressures associated with our specialty business and January weather conditions that adversely impacted volumes. We are pleased with the results for the quarter as volumes recovered and we maintained strong margins in specialty and structural products,” said
“Our Adjusted EBITDA of
FIRST QUARTER 2024 FINANCIAL PERFORMANCE
In the first quarter of 2024, net sales were
Net sales of specialty products, which includes products such as engineered wood, siding, millwork, outdoor living, industrial products and specialty lumber and panels, decreased
Net sales of structural products, which includes products such as lumber, plywood, oriented strand board, rebar, and remesh, decreased
Selling, general and administrative (“SG&A”) expenses were
Net income was
Adjusted EBITDA was
Net cash used in operating activities was
CAPITAL ALLOCATION AND FINANCIAL POSITION
During the first quarter of 2024, we invested
As of
SECOND QUARTER 2024 UPDATE
Through the first four weeks of the second quarter of 2024, specialty product gross margin was in the range of 18% to 19% and structural product gross margin was in the range of 10% to 11%. Average daily sales volumes were slightly improved versus the first quarter of 2024.
CONFERENCE CALL INFORMATION
A webcast of the conference call and accompanying presentation materials will be available in the Investor Relations section of the
To participate in the live teleconference:
Domestic Live: 1-888-660-6392
Passcode: 9140086
To listen to a replay of the teleconference, which will be available through
Domestic Replay: 1-800-770-2030
Passcode: 9140086
ABOUT
FORWARD-LOOKING STATEMENTS
This press release contains forward-looking statements. Forward-looking statements include, without limitation, any statement that predicts, forecasts, indicates or implies future results, performance, liquidity levels or achievements, and may contain the words “believe,” “anticipate,” “could,” “expect,” “estimate,” “intend,” “may,” “project,” “plan,” “should,” “will,” “will be,” “will likely continue,” “will likely result,” “would,” or words or phrases of similar meaning.
The forward-looking statements in this press release include statements about our confidence in the Company’s long-term growth strategy; our ability to capitalize on supplier-led price increases and our value-added services; our areas of focus and management initiatives; the demand outlook for construction materials and expectations regarding new home construction, repair and remodel activity and continued investment in existing and new homes; our positioning for long-term value creation; our efforts and ability to generate profitable growth; our ability to increase net sales in specialty product categories; our ability to generate profits and cash from sales of specialty products; our multi-year capital allocation plans; our ability to manage volatility in wood-based commodities; our improvement in execution and productivity; our efforts and ability to maintain a disciplined capital structure and capital allocation strategy; our ability to maintain a strong balance sheet; our ability to focus on operating improvement initiatives and commercial excellence; and whether or not the Company will continue any share repurchases.
Forward-looking statements in this press release are based on estimates and assumptions made by our management that, although believed by us to be reasonable, are inherently uncertain. Forward-looking statements involve risks and uncertainties that may cause our business, strategy, or actual results to differ materially from the forward-looking statements. These risks and uncertainties include those discussed in greater detail in our filings with the
Given these risks and uncertainties, we caution you not to place undue reliance on forward-looking statements. We expressly disclaim any obligation to update or revise any forward-looking statement as a result of new information, future events or otherwise, except as required by law.
NON-GAAP MEASURES AND SUPPLEMENTAL FINANCIAL INFORMATION
The Company reports its financial results in accordance with GAAP. The Company also believes that presentation of certain non-GAAP measures may be useful to investors and may provide a more complete understanding of the factors and trends affecting the business than using reported GAAP results alone. Any non-GAAP measures used herein are reconciled to their most directly comparable GAAP measures herein or 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. The Company further cautions that its non-GAAP measures, as used herein, are not necessarily comparable to other similarly titled measures of other companies due to differences in methods of calculation.
Adjusted EBITDA and Adjusted EBITDA Margin.
The Company presents Adjusted EBITDA because it is a primary measure used by management to evaluate operating performance. Management believes this metric helps to enhance investors’ overall understanding of the financial performance and cash flows of the business. Management also believes Adjusted EBITDA is helpful in highlighting operating trends. Adjusted EBITDA is frequently used by securities analysts, investors, and other interested parties in their evaluation of companies, many of which present an Adjusted EBITDA measure when reporting their results.
We determine our Adjusted EBITDA Margin, which we sometimes refer to as our Adjusted EBITDA as a percentage of net sales, by dividing our Adjusted EBITDA for the applicable period by our net sales for the applicable period. We believe that this ratio is useful to investors because it more clearly defines the quality of earnings and operational efficiency of translating sales to profitability.
Our Adjusted EBITDA and Adjusted EBITDA Margin are not presentations made in accordance with GAAP and are not intended to present superior measures of our financial condition from those measures determined under GAAP. Adjusted EBITDA and Adjusted EBITDA Margin, as used herein, are not necessarily comparable to other similarly titled captions of other companies due to differences in methods of calculation. These non-GAAP measures are reconciled in the “Reconciliation of Non-GAAP Measurements” table later in this release.
Adjusted Net Income and Adjusted Earnings Per Share.
Our Adjusted Net Income and Adjusted Earnings Per Share (basic and/or diluted) are not presentations made in accordance with GAAP and are not intended to present superior measures of our financial condition from those measures determined under GAAP. Adjusted Net Income and Adjusted Earnings Per Share (basic or diluted), as used herein, are not necessarily comparable to other similarly titled captions of other companies due to differences in methods of calculation. These non-GAAP measures are reconciled in the “Reconciliation of Non-GAAP Measurements” table later in this release.
Free Cash Flow.
Net Debt, Net Debt Excluding Real Property Finance Lease Liabilities, Overall Net Leverage Ratio, and Net Leverage Ratio Excluding Real Property Finance Lease Liabilities.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited) |
|||||||
|
Three Months Ended |
||||||
|
|
|
|
||||
|
($ amounts in thousands, except per share amounts) |
||||||
Net sales |
$ |
726,244 |
|
|
$ |
797,904 |
|
Cost of products sold |
|
598,563 |
|
|
|
664,365 |
|
Gross profit |
|
127,681 |
|
|
|
133,539 |
|
Gross margin |
|
17.6 |
% |
|
|
16.7 |
% |
Operating expenses (income): |
|
|
|
||||
Selling, general, and administrative |
|
91,250 |
|
|
|
91,174 |
|
Depreciation and amortization |
|
9,433 |
|
|
|
7,718 |
|
Amortization of deferred gains on real estate |
|
(984 |
) |
|
|
(984 |
) |
Other operating expenses |
|
314 |
|
|
|
3,116 |
|
Total operating expenses |
|
100,013 |
|
|
|
101,024 |
|
Operating income |
|
27,668 |
|
|
|
32,515 |
|
Non-operating expenses: |
|
|
|
||||
Interest expense, net |
|
4,624 |
|
|
|
7,687 |
|
Other expense, net |
|
— |
|
|
|
594 |
|
Income before provision for income taxes |
|
23,044 |
|
|
|
24,234 |
|
Provision for income taxes |
|
5,552 |
|
|
|
6,422 |
|
Net income |
$ |
17,492 |
|
|
$ |
17,812 |
|
|
|
|
|
||||
Basic earnings per share |
$ |
2.02 |
|
|
$ |
1.96 |
|
Diluted earnings per share |
$ |
2.00 |
|
|
$ |
1.94 |
|
CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited) |
|||||||
|
|
|
|
||||
|
(In thousands, except share data) |
||||||
ASSETS |
|||||||
Current assets: |
|
|
|
||||
Cash and cash equivalents |
$ |
481,309 |
|
|
$ |
521,743 |
|
Accounts receivable, less allowances of |
|
288,244 |
|
|
|
228,410 |
|
Inventories, net |
|
370,942 |
|
|
|
343,638 |
|
Other current assets |
|
32,165 |
|
|
|
26,608 |
|
Total current assets |
|
1,172,660 |
|
|
|
1,120,399 |
|
Property and equipment, at cost |
|
406,918 |
|
|
|
396,321 |
|
Accumulated depreciation |
|
(175,757 |
) |
|
|
(170,334 |
) |
Property and equipment, net |
|
231,161 |
|
|
|
225,987 |
|
Operating lease right-of-use assets |
|
34,869 |
|
|
|
37,227 |
|
|
|
55,372 |
|
|
|
55,372 |
|
Intangible assets, net |
|
29,768 |
|
|
|
30,792 |
|
Deferred income tax asset, net |
|
53,629 |
|
|
|
53,256 |
|
Other non-current assets |
|
14,186 |
|
|
|
14,568 |
|
Total assets |
$ |
1,591,645 |
|
|
$ |
1,537,601 |
|
LIABILITIES AND STOCKHOLDERS' EQUITY |
|||||||
Current liabilities: |
|
|
|
||||
Accounts payable |
$ |
171,715 |
|
|
$ |
157,931 |
|
Accrued compensation |
|
13,642 |
|
|
|
14,273 |
|
Finance lease liabilities - current |
|
12,157 |
|
|
|
11,178 |
|
Operating lease liabilities - current |
|
5,824 |
|
|
|
6,284 |
|
Real estate deferred gains - current |
|
3,935 |
|
|
|
3,935 |
|
Other current liabilities |
|
41,873 |
|
|
|
24,961 |
|
Total current liabilities |
|
249,146 |
|
|
|
218,562 |
|
Long-term debt |
|
294,073 |
|
|
|
293,743 |
|
Finance lease liabilities - noncurrent |
|
279,910 |
|
|
|
274,248 |
|
Operating lease liabilities - noncurrent |
|
30,248 |
|
|
|
32,519 |
|
Real estate deferred gains - noncurrent |
|
65,648 |
|
|
|
66,599 |
|
Other non-current liabilities |
|
19,399 |
|
|
|
17,644 |
|
Total liabilities |
|
938,424 |
|
|
|
903,315 |
|
Commitments and contingencies |
|
|
|
||||
Stockholders' Equity: |
|||||||
Preferred Stock, |
|
— |
|
|
|
— |
|
Common Stock, |
|
87 |
|
|
|
87 |
|
Additional paid-in capital |
|
166,503 |
|
|
|
165,060 |
|
Retained earnings |
|
486,631 |
|
|
|
469,139 |
|
Total stockholders’ equity |
|
653,221 |
|
|
|
634,286 |
|
Total liabilities and stockholders’ equity |
$ |
1,591,645 |
|
|
$ |
1,537,601 |
|
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) |
|||||||
|
Three Months Ended |
||||||
|
|
|
|
||||
|
(In thousands) |
||||||
Cash flows from operating activities: |
|
|
|
||||
Net income |
$ |
17,492 |
|
|
$ |
17,812 |
|
Adjustments to reconcile net income to cash (used in) provided by operations: |
|
|
|
||||
Depreciation and amortization |
|
9,433 |
|
|
|
7,718 |
|
Amortization of debt discount and issuance costs |
|
330 |
|
|
|
329 |
|
Provision for deferred income taxes |
|
(373 |
) |
|
|
213 |
|
Amortization of deferred gains from real estate |
|
(984 |
) |
|
|
(984 |
) |
Share-based compensation |
|
2,350 |
|
|
|
4,569 |
|
Changes in operating assets and liabilities: |
|
|
|
||||
Accounts receivable |
|
(59,834 |
) |
|
|
(47,333 |
) |
Inventories |
|
(27,304 |
) |
|
|
74,989 |
|
Accounts payable |
|
13,784 |
|
|
|
25,420 |
|
Other current assets |
|
(5,557 |
) |
|
|
5,953 |
|
Other assets and liabilities |
|
19,528 |
|
|
|
279 |
|
Net cash (used in) provided by operating activities |
|
(31,135 |
) |
|
|
88,965 |
|
|
|
|
|
||||
Cash flows from investing activities: |
|
|
|
||||
Proceeds from sale of assets |
|
127 |
|
|
|
37 |
|
Property and equipment investments |
|
(5,447 |
) |
|
|
(9,008 |
) |
Net cash used in investing activities |
|
(5,320 |
) |
|
|
(8,971 |
) |
|
|
|
|
||||
Cash flows from financing activities: |
|
|
|
||||
Repurchase of shares to satisfy employee tax withholdings |
|
(907 |
) |
|
|
(570 |
) |
Principal payments on finance lease liabilities |
|
(3,072 |
) |
|
|
(2,133 |
) |
Net cash used in financing activities |
|
(3,979 |
) |
|
|
(2,703 |
) |
|
|
|
|
||||
Net change in cash and cash equivalents |
|
(40,434 |
) |
|
|
77,291 |
|
Cash and cash equivalents at beginning of period |
|
521,743 |
|
|
|
298,943 |
|
Cash and cash equivalents at end of period |
$ |
481,309 |
|
|
$ |
376,234 |
|
SUPPLEMENTAL FINANCIAL INFORMATION (Unaudited) |
|||||||
The following schedule presents our revenues disaggregated by specialty and structural product category: |
|||||||
|
Three Months Ended |
||||||
|
|
|
|
||||
|
($ amounts in thousands) |
||||||
Net sales by product category: |
|
|
|
||||
Specialty products |
$ |
503,834 |
|
|
$ |
567,838 |
|
Structural products |
|
222,410 |
|
|
|
230,066 |
|
Total net sales |
$ |
726,244 |
|
|
$ |
797,904 |
|
|
|
|
|
||||
Gross profit by product category: |
|
|
|
||||
Specialty products |
$ |
104,049 |
|
|
$ |
106,627 |
|
Structural products |
|
23,632 |
|
|
|
26,912 |
|
Total gross profit |
$ |
127,681 |
|
|
$ |
133,539 |
|
|
|
|
|
||||
Gross margin % by product category: |
|
|
|
||||
Specialty products |
|
20.7 |
% |
|
|
18.8 |
% |
Structural products |
|
10.6 |
% |
|
|
11.7 |
% |
|
|
|
|
||||
Consolidated gross margin % |
|
17.6 |
% |
|
|
16.7 |
% |
RECONCILIATION OF NON-GAAP MEASUREMENTS (Unaudited) |
|||||||||||||||
The following schedule reconciles Net income to Adjusted EBITDA (non-GAAP): |
|||||||||||||||
|
Three Months Ended |
|
Trailing Twelve Months Ended |
||||||||||||
|
|
|
|
|
|
|
|
||||||||
|
(In thousands) |
||||||||||||||
Net income |
$ |
17,492 |
|
|
$ |
17,812 |
|
|
$ |
47,358 |
|
|
$ |
180,579 |
|
Adjustments: |
|
|
|
|
|
|
|
||||||||
Depreciation and amortization |
|
9,433 |
|
|
|
7,718 |
|
|
|
33,758 |
|
|
|
28,585 |
|
Interest expense, net |
|
4,624 |
|
|
|
7,687 |
|
|
|
21,083 |
|
|
|
38,666 |
|
Provision for income taxes |
|
5,552 |
|
|
|
6,422 |
|
|
|
32,937 |
|
|
|
57,685 |
|
Share-based compensation expense |
|
2,350 |
|
|
|
4,569 |
|
|
|
9,836 |
|
|
|
12,024 |
|
Amortization of deferred gains on real estate |
|
(984 |
) |
|
|
(984 |
) |
|
|
(3,934 |
) |
|
|
(3,934 |
) |
Gain from sales of property(1) |
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
(144 |
) |
Pension settlement and related expenses(1)(2) |
|
— |
|
|
|
594 |
|
|
|
32,223 |
|
|
|
594 |
|
Acquisition-related costs(1)(3) |
|
— |
|
|
|
100 |
|
|
|
178 |
|
|
|
1,355 |
|
Restructuring and other(1)(4) |
|
314 |
|
|
|
3,016 |
|
|
|
1,212 |
|
|
|
6,982 |
|
Adjusted EBITDA - non-GAAP |
$ |
38,781 |
|
|
$ |
46,934 |
|
|
$ |
174,651 |
|
|
$ |
322,392 |
|
|
|
|
|
|
|
|
|
(1) |
Reflects non-recurring items of approximately |
|
(2) |
Reflects expenses related to our previously disclosed settlement of the BlueLinx Corporation Hourly Retirement Plan (defined benefit) in 4Q 2023. |
|
(3) |
Reflects primarily legal, professional, technology and other integration costs. |
|
(4) |
Reflects costs related to our restructuring activities, such as severance, and other one-time non-operating items. |
The following tables reconciles Net income and Diluted earnings per share to Adjusted net income (non-GAAP) and Adjusted diluted earnings per share (non-GAAP): |
|||||||
|
Three Months Ended |
||||||
|
|
|
|
||||
|
(In thousands, except per share data) |
||||||
Net income |
$ |
17,492 |
|
|
$ |
17,812 |
|
Adjustments: |
|
|
|
||||
Share-based compensation expense |
|
2,350 |
|
|
|
4,569 |
|
Amortization of deferred gains on real estate |
|
(984 |
) |
|
|
(984 |
) |
Pension settlement and related expenses(1) |
|
— |
|
|
|
594 |
|
Acquisition-related costs(2) |
|
— |
|
|
|
100 |
|
Restructuring and other(3) |
|
314 |
|
|
|
3,016 |
|
Tax impacts of reconciling items above (4) |
|
(405 |
) |
|
|
(1,933 |
) |
Adjusted net income - non-GAAP |
$ |
18,767 |
|
|
$ |
23,174 |
|
|
|
|
|
||||
Basic EPS |
$ |
2.02 |
|
|
$ |
1.96 |
|
Diluted EPS |
$ |
2.00 |
|
|
$ |
1.94 |
|
|
|
|
|
||||
Weighted average shares outstanding - Basic |
|
8,653 |
|
|
|
9,059 |
|
Weighted average shares outstanding - Diluted |
|
8,741 |
|
|
|
9,157 |
|
|
|
|
|
||||
Adjusted Basic EPS - non-GAAP |
$ |
2.16 |
|
|
$ |
2.55 |
|
Adjusted Diluted EPS - non-GAAP |
$ |
2.14 |
|
|
$ |
2.53 |
|
(1) |
Reflects expenses related to our previously disclosed settlement of the BlueLinx Corporation Hourly Retirement Plan in 4Q 2023. |
|
(2) |
Reflects primarily legal, professional, technology and other integration costs. |
|
(3) |
Reflects costs related to our restructuring activities, such as severance, and other one-time non-operating items. |
|
(4) |
Tax impact calculated based on the effective tax rate for the respective three-month periods presented. |
The following schedule presents our Adjusted EBITDA margin (non-GAAP) as a percentage of net sales: |
|||||||
|
Three Months Ended |
||||||
|
|
|
|
||||
|
($ amounts in thousands) |
||||||
Net sales |
$ |
726,244 |
|
|
$ |
797,904 |
|
Adjusted EBITDA - non-GAAP |
|
38,781 |
|
|
|
46,934 |
|
Adjusted EBITDA margin - non-GAAP |
|
5.3 |
% |
|
|
5.9 |
% |
The following schedule presents Net Debt and the Net Leverage Ratio for the trailing twelve months: |
|||||||
|
Three Months Ended |
||||||
|
|
|
|
||||
|
($ amounts in thousands) |
||||||
Long term debt(1) |
$ |
300,000 |
|
|
$ |
300,000 |
|
Finance lease liabilities for equipment and vehicles |
|
48,445 |
|
|
|
27,162 |
|
Finance lease liabilities for real property |
|
243,622 |
|
|
|
243,602 |
|
Total debt and finance leases |
|
592,067 |
|
|
|
570,764 |
|
Less: available cash and cash equivalents |
|
481,309 |
|
|
|
376,234 |
|
Net Debt (total debt and all finance lease liabilities, excluding cash) |
$ |
110,758 |
|
|
$ |
194,530 |
|
|
|
|
|
||||
Net Debt, excluding finance lease liabilities for real property |
$ |
(132,864 |
) |
|
$ |
(49,072 |
) |
|
|
|
|
||||
Twelve-Month Trailing Adjusted EBITDA - non-GAAP, see above reconciliation |
$ |
174,651 |
|
|
$ |
322,392 |
|
|
|
|
|
||||
Net Leverage Ratio |
|
0.6 |
x |
|
|
0.6 |
x |
Net Leverage Ratio Excluding Real Property Finance Lease Liabilities(2) |
|
(0.8 |
x) |
|
(0.2 |
x) |
(1) |
For the three months ended |
|
(2) |
Net leverage ratio excluding finance lease obligations for real property is included within the terms of our revolving credit agreement. |
The following schedule presents free cash flow: |
|||||||
|
Three Months Ended |
||||||
|
|
|
|
||||
|
(In thousands) |
||||||
Net cash (used in) provided by operating activities |
$ |
(31,135 |
) |
|
$ |
88,965 |
|
Less: Property and equipment investments |
|
(5,447 |
) |
|
|
(9,008 |
) |
Free cash flow - non-GAAP |
$ |
(36,582 |
) |
|
$ |
79,957 |
|
View source version on businesswire.com: https://www.businesswire.com/news/home/20240430867938/en/
Investor Relations Officer
(470) 394-0099
investor@bluelinxco.com
Source: