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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
 
FORM 8-K
 
CURRENT REPORT
Pursuant to Section 13 or 15(d) of
The Securities Exchange Act of 1934
 
Date of Report (Date of earliest event reported): November 1, 2022
 
BlueLinx Holdings Inc.
(Exact name of registrant specified in its charter)
 
Delaware 001-32383 77-0627356
(State or other (Commission (I.R.S. Employer
jurisdiction of
incorporation)
File Number) Identification No.)
  
1950 Spectrum Circle, Suite 300, Marietta, GA
30067
(Address of principal executive offices) (Zip Code)

 
Registrant's telephone number, including area code: (770) 953-7000
 _________________________________________________
(Former name or former address, if changed since last report.)
 
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):
Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
Securities registered pursuant to Section 12(b) of the Act:
Title of each class Trading Symbol(s) Name of each exchange on which registered
Common Stock, par value $0.01 per share BXC New York Stock Exchange


Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 under the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
Emerging growth company ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐






Item 2.02    Results of Operations and Financial Condition         

On November 1, 2022, BlueLinx Holdings Inc. ("BlueLinx" or "the Company”) issued a press release announcing its financial results for the fiscal third quarter ended October 1, 2022. A copy of BlueLinx's press release is furnished as Exhibit 99.1 hereto.

On November 2, 2022, as previously announced, BlueLinx will hold a teleconference and audio webcast to discuss its financial results from the fiscal third quarter ended October 1, 2022. A copy of supplementary materials that will be referred to in the teleconference and webcast, and which will be posted to the Company's website, is furnished as Exhibit 99.2 hereto.

The information included in this Item 2.02, as well as Exhibits 99.1 and 99.2, shall not be deemed "filed" for purposes of Section 18 of the Securities Exchange Act of 1934, nor shall it be deemed incorporated by reference in any filing under the Securities Act of 1933.


Item 9.01     Financial Statements and Exhibits

(d)        Exhibits:

The following exhibits are attached with this Current Report on Form 8-K:
Exhibit No.   Exhibit Description
 
104 Cover Page Interactive Data File (embedded within the Inline XBRL document)

SIGNATURE
 
Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
     
    BlueLinx Holdings Inc.
    (Registrant)
     
Dated: November 1, 2022 By: /s/ Kelly C. Janzen
    Kelly C. Janzen
    Senior Vice President and Chief Financial Officer

 


 
 


EX-99.1 2 q32022earnings991.htm EX-99.1 Document
Exhibit 99.1
image.jpg

BlueLinx Announces Third Quarter 2022 Results


MARIETTA, GA, November 1, 2022 - BlueLinx Holdings Inc. (NYSE:BXC), a leading U.S. wholesale distributor of building products, announced today results for the third quarter 2022.

THIRD QUARTER 2022 HIGHLIGHTS
(all comparisons are versus the prior year period)

•Delivered net sales of $1.1 billion, an increase of 9%
•Grew specialty product sales 13% to $724 million, or 68% of total sales, consistent with growth strategy
•Increased gross profit 24% to $189 million and gross margin 210 basis points to 17.9%
•Reported net income of $60 million and increased diluted earnings per share 35% to $6.38
•Grew adjusted EBITDA 27% to $100 million and increased adjusted EBITDA margin 130 basis points to 9.4%
•Generated $143 million of operating cash and $130 million of free cash flow
•Reduced net leverage to 0.7x and increased available liquidity to an all-time high of $576 million
•Completed previously announced $60 million accelerated share repurchase program on September 15, 2022
•Acquired Vandermeer Forest Products on October 3, 2022

“Our third quarter results were highlighted by 9% year-over-year sales growth, 35% diluted EPS growth and 27% adjusted EBITDA growth,” said Dwight Gibson, President and Chief Executive Officer. “Specialty product sales grew 13% year-over-year to $724 million, or 68% of total sales, and gross profit from specialty product sales increased 3% to $151 million, or 80% of total gross profit. We generated $143 million of operating cash, a record level, which further strengthened our balance sheet. And we ended the quarter with net leverage of 0.7x, cash on hand of $229 million and available liquidity at an all-time high of $576 million.”

Gibson continued, “From a capital allocation perspective, we have invested in high-return opportunities aligned to our growth and value creation strategy while maintaining a strong financial position with significant liquidity. Through the first nine months of 2022, we have invested $19 million in capital expenditures and repurchased 9% of our outstanding shares for $66 million. And on October 3, 2022, we acquired Vandermeer Forest Products including its main branch facilities for $67 million. This strategic acquisition provides a platform for growth in the Pacific Northwest, enables us to serve all 50 states and is well-aligned to our specialty products growth strategy. Even after acquiring Vandermeer, our net leverage remained below 1 times and, as of the end of October, we had over $560 million of available liquidity, including cash on hand and our undrawn revolver.

We believe our scale, strategic supplier relationships, key customer relationships and strong balance sheet are advantages that position us to successfully navigate a more challenging macro environment. Operationally we are focused on optimizing productivity, lean inventory management and increasing our specialty products sales mix, while maintaining a disciplined approach to capital allocation,” concluded Gibson.

THIRD QUARTER 2022 FINANCIAL PERFORMANCE
In the third quarter, net sales were $1.1 billion, an increase of $90 million, or 9% year-over-year. Gross profit was $189 million, an increase of $36 million, or 24%, year-over-year, and gross margin was 17.9%, up 210 basis points year-over-year. The increase in sales and gross profit reflects 13% growth in specialty product sales and 2% growth in structural product sales.

Net sales of specialty products, which includes products such as engineered wood, siding, millwork, outdoor living, industrial products and specialty lumber and panels, increased $83 million, or 13%, to $724 million in the third quarter. This growth was primarily driven by strategic pricing actions with volume relatively flat year-over-year. Gross profit from specialty product sales was $151 million, an increase of $4 million, or 3%, year-over-year and gross margin was 20.9% compared to 23.0% in the prior year period. The decline in gross margin reflects easing of supply constraints across many specialty product categories, particularly millwork.

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Net sales of structural products, which includes products such as lumber, plywood, oriented strand board, rebar, and remesh, increased $7 million, or 2%, to $336 million in the third quarter and gross profit from sales of structural products increased $32 million, up from $6 million in the prior year period. The increase in structural sales and gross profit was due primarily to an increase in the average composite price of framing lumber year-over-year. Gross margin on structural product sales was 11.3% in the third quarter, up from 1.7% in the prior year period. The improvement in gross margin reflects the benefits of our disciplined approach to managing structural inventory.

Selling, general and administrative (“SG&A”) expenses were $92 million in the third quarter, essentially flat versus the second quarter of 2022 and $16 million, or 20%, higher than the prior year period. The year-over-year increase in SG&A was due primarily to higher delivery costs and increased strategic investments in the Company’s workforce as well as key growth and productivity initiatives.

Net income was $60 million, or $6.38 per diluted share, versus $47 million, or $4.74 per diluted share, in the prior year period. The $6.38 per diluted share included a $0.43 per share benefit as a result of lower shares outstanding due to the Company’s share repurchases in 2022.

Adjusted EBITDA was $100 million, or 9.4% of net sales, as compared to $79 million, or 8.1% of net sales in Q3 2021.

Net cash generated from operating activities was $143 million in the third quarter 2022 compared to $104 million in the prior year period. This was driven by a net benefit from working capital as well as the increase in net income. Free cash flow was $130 million in the third quarter of 2022 compared to $102 million in the prior year period.

Cash capital investments were $12.2 million in the third quarter of 2022, primarily related to investments to upgrade or enhance the Company’s distribution branches and fleet of rolling stock.

FINANCIAL POSITION
As of October 1, 2022, total debt was $573 million, including $300 million of senior secured notes that mature in 2029, $273 million of finance leases and an undrawn revolving credit facility. Cash and cash equivalents were $229 million and net debt was $343 million, resulting in a net leverage ratio of 0.7x on trailing twelve-month adjusted EBITDA of $527 million. At the end of the third quarter 2022, available liquidity was $576 million, including $229 million of cash and cash equivalents and $346 million of availability on the Company’s undrawn revolving credit facility.

SHARE REPURCHASE UPDATE
On May 3, 2022, the Company’s Board of Directors increased its share repurchase authorization to $100 million, up $75 million from the previous authorization. Under this $100 million share repurchase authorization, the Company may repurchase its common stock at any time or from time to time, without prior notice, subject to prevailing market conditions and other considerations.

Through the end of fiscal third quarter of 2022, the Company had repurchased a total of 882,346 shares of its common stock for $66.4 million under the repurchase program, or an average price of $75.28 per share. This includes 801,015 shares of common stock repurchased for $60 million under the Company’s Accelerated Stock Repurchase Agreement, which was entered into on May 3, 2022, and completed on September 15, 2022, as well as 81,331 shares of common stock repurchased for $6.4 million in the open market during the first quarter 2022.

VANDERMEER FOREST PRODUCTS ACQUISITION
As previously announced, on October 3, 2022, the Company acquired Vandermeer Forest Products (“Vandermeer”), a regional wholesale distributor of building products in the Pacific Northwest, for $67 million, of which $3.6 million was for Vandermeer’s Spokane, Washington distribution facility and related real estate. This acquisition was funded with cash on hand and is expected to be immediately accretive to earnings per share. Vandermeer’s trailing twelve-month sales as of the end of September 2022 were approximately $150 million.

FOURTH QUARTER 2022 UPDATE
Excluding contributions from the Vandermeer acquisition, through the first four weeks of the fourth quarter, specialty product gross margin was approximately 20% and volume was down modestly from the third quarter 2022 reflecting historical seasonality and the current macro-economic environment. Structural product sales volumes were consistent with the third quarter 2022 with gross margin in a range of 9% to 10%. The Company will continue to evaluate market pricing for wood-based commodities and adjust accordingly at the end of each period.

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CONFERENCE CALL INFORMATION
BlueLinx will host a conference call on November 2, 2022, at 10:00 a.m. Eastern Time, accompanied by a supporting slide presentation.

A webcast of the conference call and accompanying presentation materials will be available in the Investor Relations section of the BlueLinx website at https://investors.bluelinxco.com/events-and-presentations/default.aspx, and a replay of the webcast will be available at the same site shortly after the webcast is complete.

To participate in the live teleconference:

Domestic Live: 1-877-407-4018
Passcode: 13733451

To listen to a replay of the teleconference, which will be available through November 16, 2022:

Domestic Replay: 1-844-512-2921
Passcode: 13733451

ABOUT BLUELINX
BlueLinx (NYSE: BXC) is a leading U.S. wholesale distributor of residential and commercial building products with both branded and private-label SKUs across product categories such as lumber, panels, engineered wood, siding, millwork, and industrial products. With a strong market position, broad geographic coverage footprint servicing 50 states, and the strength of a locally focused sales force, we distribute our comprehensive range of products to approximately 15,000 customers including national home centers, pro dealers, cooperatives, specialty distributors, regional and local dealers and industrial manufacturers. BlueLinx provides a wide range of value-added services and solutions to our customers and suppliers. We are headquartered in Georgia, with executive offices located at 1950 Spectrum Circle, Marietta, Georgia, and we operate our distribution business through a broad network of distribution centers. BlueLinx encourages investors to visit its website, www.BlueLinxCo.com, which is updated regularly with financial and other important information about BlueLinx.

INVESTOR & MEDIA CONTACTS
Ryan Taylor, VP Investor Relations & Treasury
BlueLinx Holdings Inc.
investor@bluelinxco.com

Seth Freeman, VP Marketing & Communications
BlueLinx Holdings Inc.
Seth.Freeman@bluelinxco.com

NON-GAAP MEASURES
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.

Adjusted EBITDA and Adjusted EBITDA Margin. BlueLinx defines Adjusted EBITDA as an amount equal to net income (loss) plus interest expense and all interest expense related items, income taxes, depreciation and amortization, and further adjusted for certain non-cash items and other special items, including compensation expense from share based compensation, one-time charges associated with the legal, consulting, and professional fees related to our merger and acquisition activities, gains or losses on sales of properties, amortization of deferred gains on real estate, and expense associated with our restructuring activities, such as severance, in addition to other significant and/or one-time, nonrecurring, non-operating items

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.

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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.

Free Cash Flow. BlueLinx defines free cash flow as net cash provided by operating activities less total capital expenditures. Free cash flow is a measure used by management to assess our financial performance, and we believe it is useful for investors because it relates the operating cash flow of the Company to the capital that is spent to continue and improve business operations. In particular, free cash flow indicates the amount of cash generated after capital expenditures that can be used for, among other things, investment in our business, strengthening our balance sheet, and repayment of our debt obligations. Free cash flow does not represent the residual cash flow available for discretionary expenditures since there may be other nondiscretionary expenditures that are not deducted from the measure. Free cash flow is not a presentation made in accordance with GAAP and is not intended to present a superior measure of financial condition from those determined under GAAP. Free cash flow, as used herein, is not necessarily comparable to other similarly titled captions of other companies due to differences in methods of calculation. This non-GAAP measure is reconciled in the “Reconciliation of Non-GAAP Measurements” table later in this release.

Net Debt and Net Leverage Ratio. BlueLinx calculates net debt as its total short- and long-term debt, including outstanding balances under our term loan and revolving credit facility and the total amount of its obligations under financing leases, less cash and cash equivalents. We believe that net debt is useful to investors because our management reviews our net debt as part of its management of overall liquidity, financial flexibility, capital structure and leverage, and creditors and credit analysts monitor our net debt as part of their assessments of our business.

We determine our overall net leverage ratio by dividing our net debt by trailing twelve-month Adjusted EBITDA. We believe that this ratio is useful to investors because it is an indicator of our ability to meet our future financial obligations. In addition, the ratio is a measure that is frequently used by investors and creditors.

Our net debt and overall net leverage ratio are not presentations made in accordance with GAAP and are not intended to present a superior measure of our financial condition from measures and ratios determined under GAAP. In addition, our net debt and overall net leverage ratio, as used herein, are not necessarily comparable to other similarly titled captions of other companies due to differences in methods of calculation. This non-GAAP measure is reconciled in the “Reconciliation of Non-GAAP Measurements” table later in this release.

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,” “expect,” “estimate,” “intend,” “project,” “plan,” “will be,” “will likely continue,” “will likely result” 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 amid supply chain constraints and wood-based commodity price volatility; 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; constraints, volatility or disruptions in the capital markets or other factors affecting the amount and timing of share repurchases; whether or not the Company will continue, and the timing of, any open market repurchases.


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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 Securities and Exchange Commission. We operate in a changing environment in which new risks can emerge from time to time. It is not possible for management to predict all of these risks, nor can it assess the extent to which any factor, or a combination of factors, may cause our business, strategy, or actual results to differ materially from those contained in forward-looking statements. Factors that may cause these differences include, among other things: pricing and product cost variability; volumes of product sold; competition; changes in the supply and/or demand for products that we distribute; the cyclical nature of the industry in which we operate; housing market conditions; consolidation among competitors, suppliers, and customers; disintermediation risk; loss of products or key suppliers and manufacturers; our dependence on international suppliers and manufacturers for certain products; potential acquisitions and the integration and completion of such acquisitions; business disruptions; effective inventory management relative to our sales volume or the prices of the products we produce; information technology security risks and business interruption risks; the ability to attract, train, and retain highly qualified associates and other key personnel while controlling related labor costs; exposure to product liability and other claims and legal proceedings related to our business and the products we distribute; natural disasters, catastrophes, fire, wars, or other unexpected events; successful implementation of our strategy; wage increases or work stoppages by our union employees; costs imposed by federal, state, local, and other regulations; compliance costs associated with federal, state, and local environmental protection laws; the COVID-19 pandemic and other contagious illness outbreaks and their potential effects on our industry; fluctuations in our operating results; our level of indebtedness and our ability to incur additional debt to fund future needs; the covenants of the instruments governing our indebtedness limiting the discretion of our management in operating the business; variable interest rate risk under certain indebtedness; the fact that we have consummated certain sale leaseback transactions with resulting long-term non-cancelable leases, many of which are or will be finance leases; the fact that we lease many of our distribution centers, and we would still be obligated under these leases even if we close a leased distribution center; inability to raise funds necessary to finance a required repurchase of our senior secured notes; a lowering or withdrawal of debt ratings; changes in our product mix; increases in petroleum prices; shareholder activism; changes in insurance-related deductible/retention reserves based on actual loss experience; the possibility that the value of our deferred tax assets could become impaired; changes in our expected annual effective tax rate could be volatile; changes in actuarial assumptions for our pension plan; the costs and liabilities related to our participation in multi-employer pension plans could increase; the risk that our cash flows and capital resources may be insufficient to service our existing or future indebtedness; the possibility that we could be the subject of securities class action litigation due to stock price volatility; activities of activist shareholders; indebtedness terms that limit our ability to pay dividends on common stock; and changes in, or interpretation of, accounting principles.

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.

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BLUELINX HOLDINGS INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)

Three Months Ended Nine Months Ended
  October 1, 2022 October 2, 2021 October 1, 2022 October 2, 2021
(In thousands, except per share data)
Net sales $ 1,060,761  $ 970,842  $ 3,602,445  $ 3,304,224 
Cost of sales 871,385  817,515  2,920,610  2,719,333 
Gross profit 189,376  153,327  681,835  584,891 
Gross margin 17.9  % 15.8  % 18.9  % 17.7  %
Operating expenses (income):    
Selling, general, and administrative 91,678  76,176  274,305  238,746 
Depreciation and amortization 6,688  6,884  19,952  21,429 
Amortization of deferred gains on real estate (983) (984) (2,951) (2,951)
Gains from sales of property —  —  (144) (1,287)
Other operating expenses 1,267  212  2,731  1,197 
Total operating expenses 98,650  82,288  293,893  257,134 
Operating income 90,726  71,039  387,942  327,757 
Non-operating expenses (income):    
Interest expense, net 10,444  8,313  32,992  33,690 
Other expense (income), net (361) (704) 916  (1,335)
Income before provision for income taxes 80,643  63,430  354,034  295,402 
Provision for income taxes 21,134  16,232  89,844  72,886 
Net income $ 59,509  $ 47,198  $ 264,190  $ 222,516 
Basic income per share $ 6.44  $ 4.85  $ 28.03  $ 23.23 
Diluted income per share $ 6.38  $ 4.74  $ 27.82  $ 22.91 
Basic weighted-average shares outstanding 9,230  9,721  9,425  9,579 
Diluted weighted-average shares outstanding 9,328  9,953  9,497  9,714 


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BLUELINX HOLDINGS INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(Unaudited)
  October 1, 2022 January 1, 2022
(In thousands, except share data)
ASSETS
Current assets:    
Cash and cash equivalents $ 229,364  $ 85,203 
Accounts receivable, less allowances of $4,365 and $4,024, respectively
360,535  339,637 
Inventories, net 535,979  488,458 
Other current assets 32,309  31,869 
Total current assets 1,158,187  945,167 
Property and equipment, at cost 339,914  318,253 
Accumulated depreciation (151,358) (137,099)
Property and equipment, net 188,556  181,154 
Operating lease right-of-use assets 50,311  49,568 
Goodwill 47,772  47,772 
Intangible assets, net 11,399  13,603 
Deferred tax assets 61,224  60,285 
Other non-current assets 16,127  19,905 
Total assets $ 1,533,576  $ 1,317,454 
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:    
Accounts payable $ 208,197  $ 180,000 
Accrued compensation 18,345  22,363 
Taxes payable 6,750  6,138 
Finance lease liabilities - short-term 8,732  7,864 
Operating lease liabilities - short-term 7,028  5,145 
Real estate deferred gains - short-term 3,935  3,934 
Other current liabilities 20,191  18,347 
Total current liabilities 273,178  243,791 
Non-current liabilities:    
Long-term debt, net of debt issuance costs of $4,259 and $4,701, respectively
292,094  291,271 
Finance lease liabilities - long-term 264,004  266,853 
Operating lease liabilities - long-term 43,492  44,526 
Real estate deferred gains - long-term 71,353  74,206 
Pension benefit obligation 9,216  11,605 
Other non-current liabilities 22,542  21,953 
Total liabilities 975,879  954,205 
Commitments and contingencies
STOCKHOLDERS' EQUITY:
Common Stock, $0.01 par value, 20,000,000 shares authorized,
     9,035,469 and 9,725,760 outstanding on October 1, 2022, and January 1, 2022, respectively
90  97 
Additional paid-in capital 197,906  268,085 
Accumulated other comprehensive loss (28,916) (29,360)
Retained earnings 388,617  124,427 
Total stockholders’ equity 557,697  363,249 
Total liabilities and stockholders’ equity $ 1,533,576  $ 1,317,454 
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BLUELINX HOLDINGS INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
Three Months Ended Nine Months Ended
October 1, 2022 October 2, 2021 October 1, 2022 October 2, 2021
(In thousands)
Cash flows from operating activities:
Net income $ 59,509  $ 47,198  $ 264,190  $ 222,516 
Adjustments to reconcile net income to cash provided by operations:
Depreciation and amortization 6,688  6,884  19,952  21,429 
Amortization of debt discount and issuance costs 330  528  823  1,560 
Adjustments to debt issuance costs associated with term loan —  —  —  5,791 
Gains from sales of property —  —  (144) (1,287)
Deferred income tax 1,813  (1,940) (939) (7,784)
Amortization of deferred gains from real estate (983) (984) (2,951) (2,951)
Share-based compensation 2,092  1,608  6,029  5,010 
Changes in operating assets and liabilities:
Accounts receivable 62,124  92,243  (20,898) (51,331)
Inventories 41,669  (10,724) (47,521) (94,330)
Accounts payable (31,318) (16,714) 28,197  45,223 
Taxes payable (9,850) (11,453) 612  (1,359)
Other current assets 2,959  (2,548) (440) (6,247)
Other assets and liabilities 7,573  160  (874) (9,381)
Net cash provided by operating activities 142,606  104,258  246,036  126,859 
Cash flows from investing activities:
Proceeds from sale of assets, net 117  552  648  2,652 
Property and equipment investments (12,197) (2,524) (19,079) (5,424)
Net cash used in investing activities (12,080) (1,972) (18,431) (2,772)
Cash flows from financing activities:
Borrowings on revolving credit facilities —  261,823  —  900,006 
Repayments on revolving credit facilities —  (359,123) —  (965,142)
Repayments on term loan —  —  —  (43,204)
Common stock repurchase and retirement —  —  (66,427) — 
Debt financing costs —  (1,950) —  (2,811)
Repurchase of shares to satisfy employee tax withholdings (3,618) (3) (9,788) (5,135)
Principal payments on finance lease liabilities (2,496) (3,026) (7,229) (7,697)
Net cash used in financing activities (6,114) (102,279) (83,444) (123,983)
Net change in cash and cash equivalents 124,412  144,161  104 
Cash and cash equivalents at beginning of period 104,952  179  85,203  82 
Cash and cash equivalents at end of period $ 229,364  $ 186  $ 229,364  $ 186 
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BLUELINX HOLDINGS INC.
RECONCILIATION OF NON-GAAP MEASUREMENTS
(Unaudited)

The following schedule reconciles net income to Adjusted EBITDA:
Three Months Ended Nine Months Ended Trailing Twelve Months Ended
October 1, 2022 October 2, 2021 October 1, 2022 October 2, 2021 October 1, 2022 October 2, 2021
(In thousands)
Net income $ 59,509  $ 47,198  $ 264,190  $ 222,516  $ 337,810  $ 242,374 
Adjustments:
Depreciation and amortization 6,688  6,884  19,952  21,429  26,715  28,546 
Interest expense, net 10,444  8,313  32,992  27,899  43,205  38,621 
Term loan debt issuance costs(1)
—  —  —  5,791  1,603  5,791 
Provision for income taxes 21,134  16,232  89,844  72,886  114,701  72,872 
Share-based compensation expense 2,092  1,608  6,029  5,010  7,609  8,087 
Amortization of deferred gains on real estate (983) (984) (2,951) (2,951) (3,936) (4,009)
Gain from sales of property(1)
—  —  (144) (1,287) (7,284) (2,607)
Merger and acquisition costs(1)
233  214  233  214  233  320 
Restructuring and other(1)(2)
1,034  (391) 4,498  594  5,961  652 
Adjusted EBITDA $ 100,151  $ 79,074  $ 414,643  $ 352,101  $ 526,617  $ 390,647 
(1) Reflects non-recurring items of approximately $1.3 million in beneficial items to the current quarterly period and approximately $0.2 million in non-beneficial items to the prior quarterly period. For the current year nine-month period, reflects non-recurring, beneficial items of approximately $4.6 million and the prior year nine-month period reflects $5.3 million of non-recurring, beneficial items. For the trailing twelve months ended, reflects approximately $0.5 million and $4.2 million of non-recurring, beneficial items, in the current and prior period, respectively.

(2) Reflects costs related to our restructuring efforts, such as severance, and other one-time non-operating items.

The following schedule presents our Adjusted EBITDA margin as a percentage of net sales:
Three Months Ended Nine Months Ended
October 1, 2022 October 2, 2021 October 1, 2022 October 2, 2021
(In thousands)
Net sales $ 1,060,761  $ 970,842  $ 3,602,445  $ 3,304,224 
Adjusted EBITDA 100,151  79,074  414,643  352,101 
Adjusted EBITDA margin 9.4  % 8.1  % 11.5  % 10.7  %

9


The following schedule presents our revenues disaggregated by specialty and structural product category:
Three Months Ended Nine Months Ended
October 1, 2022 October 2, 2021 October 1, 2022 October 2, 2021
(In thousands)
Net sales by product category
Specialty products $ 724,323  $ 641,024  $ 2,280,090  $ 1,878,835 
Structural products 336,438  329,818  1,322,355  1,425,389 
Total net sales $ 1,060,761  $ 970,842  $ 3,602,445  $ 3,304,224 
Gross profit by product category
Specialty products $ 151,428  $ 147,693  $ 515,781  $ 421,223 
Structural products(1)
37,948  5,634  166,054  163,668 
Total gross profit $ 189,376  $ 153,327  $ 681,835  $ 584,891 
Gross margin % by product category
Specialty products 20.9  % 23.0  % 22.6  % 22.4  %
Structural products(1)
11.3  % 1.7  % 12.6  % 11.5  %
Total gross margin % 17.9  % 15.8  % 18.9  % 17.7  %
(1) For additional information about our lower of cost or net realizable value (LC-NRV) adjustments, see our Form 10-Q for the quarterly period ended October 1, 2022.


The following schedule presents Net Debt and the Net Leverage Ratio for the Trailing Twelve Months:
Period Ended
October 1, 2022 October 2, 2021
(In thousands)
Finance lease liabilities - short term $ 8,732  $ 5,606 
Long term debt(1)
300,000  223,149 
Finance lease liabilities - long term 264,004  271,314 
Total debt 572,736  500,069 
Less: available cash 229,364  186 
Net Debt 343,372  499,883 
Trailing twelve month Adjusted EBITDA $ 526,617  $ 390,647 
Net Leverage Ratio 0.7x 1.3x
(1) For the period ended October 1, 2022, our long-term debt is comprised of $300 million of senior-secured notes issued in October 2021. These notes are presented under the long-term debt caption of our balance sheet at $292.1 million which is net of their discount of $3.6 million and the combined carrying value of our debt issuance costs of $4.3 million. Our senior secured notes are presented in this table at their face value for the purposes of calculating our net leverage ratio. For the period ended October 2, 2021, our long-term debt presented in this table is the balance presented on our balance sheet of $219.5 million, which was comprised of the balance of our revolving credit facility, plus the carrying value of our debt issuance costs of $3.6 million.
10




The following schedule presents free cash flow:

Three Months Ended Nine Months Ended
October 1, 2022 October 2, 2021 October 1, 2022 October 2, 2021
(In thousands)
Net cash provided by operating activities $ 142,606  $ 104,258  $ 246,036  $ 126,859 
Less: Property and equipment investments (12,197) (2,524) (19,079) (5,424)
Free cash flow $ 130,409  $ 101,734  $ 226,957  $ 121,435 
11
EX-99.2 3 final_bxc3q2022conferenc.htm EX-99.2 final_bxc3q2022conferenc
BlueLinx Q3 2022 Results November 2, 2022


 
Q3 2022 RESULTS | 2 SAFE HARBOR STATEMENT This presentation 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,” “expect,” “estimate,” “intend,” “project,” “plan,” “will be,” “will likely continue,” “will likely result” or words or phrases of similar meaning. The forward-looking statements in this presentation include statements about our confidence in the Company’s long-term growth strategy; our ability to capitalize amid supply chain constraints and wood-based commodity price volatility; 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; constraints, volatility or disruptions in the capital markets or other factors affecting the amount and timing of share repurchases; whether or not the Company will continue, and the timing of, any open market repurchases. Forward-looking statements in this presentation 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 Securities and Exchange Commission. We operate in a changing environment in which new risks can emerge from time to time. It is not possible for management to predict all of these risks, nor can it assess the extent to which any factor, or a combination of factors, may cause our business, strategy, or actual results to differ materially from those contained in forward-looking statements. Factors that may cause these differences include, among other things: pricing and product cost variability; volumes of product sold; competition; changes in the supply and/or demand for products that we distribute; the cyclical nature of the industry in which we operate; housing market conditions; consolidation among competitors, suppliers, and customers; disintermediation risk; loss of products or key suppliers and manufacturers; our dependence on international suppliers and manufacturers for certain products; potential acquisitions and the integration and completion of such acquisitions; business disruptions; effective inventory management relative to our sales volume or the prices of the products we produce; information technology security risks and business interruption risks; the ability to attract, train, and retain highly qualified associates and other key personnel while controlling related labor costs; exposure to product liability and other claims and legal proceedings related to our business and the products we distribute; natural disasters, catastrophes, fire, wars, or other unexpected events; successful implementation of our strategy; wage increases or work stoppages by our union employees; costs imposed by federal, state, local, and other regulations; compliance costs associated with federal, state, and local environmental protection laws; the COVID-19 pandemic and other contagious illness outbreaks and their potential effects on our industry; fluctuations in our operating results; our level of indebtedness and our ability to incur additional debt to fund future needs; the covenants of the instruments governing our indebtedness limiting the discretion of our management in operating the business; variable interest rate risk under certain indebtedness; the fact that we have consummated certain sale leaseback transactions with resulting long-term non-cancelable leases, many of which are or will be finance leases; the fact that we lease many of our distribution centers, and we would still be obligated under these leases even if we close a leased distribution center; inability to raise funds necessary to finance a required repurchase of our senior secured notes; a lowering or withdrawal of debt ratings; changes in our product mix; increases in petroleum prices; shareholder activism; changes in insurance-related deductible/retention reserves based on actual loss experience; the possibility that the value of our deferred tax assets could become impaired; changes in our expected annual effective tax rate could be volatile; changes in actuarial assumptions for our pension plan; the costs and liabilities related to our participation in multi-employer pension plans could increase; the risk that our cash flows and capital resources may be insufficient to service our existing or future indebtedness; the possibility that we could be the subject of securities class action litigation due to stock price volatility; activities of activist shareholders; indebtedness terms that limit our ability to pay dividends on common stock; and changes in, or interpretation of, accounting principles. 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 Financial Measures. BlueLinx 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. Immaterial Rounding Differences. Immaterial rounding adjustments and differences may exist between slides, press releases, and previously issued presentations. This presentation and the associated remarks made during this conference call are integrally related and are intended to be presented and understood together.


 
Q3 2022 RESULTS | 3 Opening Remarks Dwight Gibson, President & CEO


 
Q3 2022 RESULTS | 4 A WHOLE NEW BLUE / executive summary Note: see appendix for reconciliations to all non-GAAP measures ▪ Net sales of $3.6b / up 9% year-over-year ▪ Adjusted EBITDA of $415m / up 18% year-over-year ▪ Adjusted EBITDA of $100m ▪ Generated operating cash of $143m – an all-time high ▪ Specialty product sales grew 13% y-o-y in Q3 2022 and comprised 68% of sales and 80% of gross profit ▪ Acquired Vandermeer on October 3, 2022 for $67m ▪ Repurchased 9% of outstanding shares for $66m ▪ Invested $19m in capital expenditures thru September ▪ 0.7x net leverage at the end of Q3 2022 ▪ $576m of liquidity – an all-time high ▪ $229m of cash on hand + $346m of revolver capacity ✓ Delivered strong year-to-to date results ✓ Solid Q3 results highlighted by record cash generation ✓ Remain focused on specialty product growth ✓ Executed strategic capital allocation actions ✓ Further strengthened our financial position


 
Q3 2022 RESULTS | 5 ▪ Acquired privately-owned Vandermeer, a premier wholesale distributor of building products with trailing twelve-month sales of ~$150 million that serves over 250 customers across the Pacific Northwest, Alaska, Hawaii, British Columbia and Alberta ▪ Signed and closed October 3, 2022 ▪ Total purchase price: $67.0m ❑ $63.4m to acquire the business which reflects an estimated multiple of ~3.3x on trailing twelve-month adjusted EBITDA ❑ $3.6m to acquire distribution facility and real estate in Spokane, WA ▪ Immediately accretive to diluted EPS beginning in Q4 2022 (pre-synergies) ▪ Funded with cash on hand ▪ After the acquisition, as of the end of October, net leverage remained below 1.0x, cash on hand was over $220 million and available liquidity was over $560 million VANDERMEER ACQUISITION / transaction overview Note: See appendix for reconciliations for all non-GAAP figures


 
Q3 2022 RESULTS | 6 ▪ Aligns to specialty products strategy ▪ Establishes meaningful growth platform in the Pacific Northwest: ❑ Adds three distribution branches in Washington state ❑ Provides direct access to Seattle and Portland (two of the top 15 MSAs in the United States) ❑ BlueLinx now has coast-to-coast reach and serves all 50 states ▪ Increases market penetration in key specialty product categories: ❑ Siding ❑ Engineered Wood ▪ Strengthens strategic supplier relationships ▪ Enhances ability to accelerate growth with National Accounts VANDERMEER ACQUISITION / strategic rationale Note: Highest growth MSAs as forecasted by John Burns Real Estate Consulting


 
Q3 2022 RESULTS | 7 Q3 2022 RESULTS / specialty products growth and record cash generation ▪ Net sales of $1.1b, up 9% year-over-year: ❑ Specialty product sales increased 13% to $724m ❑ Structural product sales increased 2% to $336m as a result of wood-based commodity price inflation ▪ Gross profit of $189m, up 24% year-over-year: ❑ 17.9% of net sales ❑ 80% of gross profit from specialty products ▪ Diluted EPS of $6.38, up 35% year-over-year ❑ $0.43 per share benefit from share repurchases ▪ Adjusted EBITDA of $100m, or 9.4% of sales ▪ Generated operating cash of $143m, up 37% year-over-year: ❑ Free Cash Flow of $130m, or 130% of adjusted EBITDA Specialty Products 80% Structural Products 20% Gross Profit by Product Category Note: see appendix for reconciliations to all non-GAAP measures


 
Q3 2022 RESULTS | 8 $1,308 $971 $973 $1,302 $1,239 $1,061 Q2 2021 Q3 2021 Q4 2021 Q1 2022 Q2 2022 Q3 2022 Sales 12.7% 8.1% 11.5% 15.5% 9.1% 9.4% Adj. EBITDA % QUARTERLY RESULTS / continued operational improvement and growth in specialty products BlueLinx productivity improvements: ▪ Rigorous structural inventory management: ❑ Wood-based inventory reduced by ~65% since Q1 2020 ▪ Disciplined pricing and purchasing ▪ Lower repair and maintenance expense due to capex investments 87% 11% 12% 27% (5%) 9% sales growth vs. prior year period Note: reduction in wood-based inventory of ~65% is based on footage and occurred from Q1 2020 to Q3 2022 Note: see appendix for reconciliations to all non-GAAP measures Six consecutive quarters of strong execution: ▪ Average yoy sales growth of 24% per quarter ▪ Average adjusted EBITDA margin of 11.1% per quarter ▪ Reduced net leverage from 1.5x to 0.7x ~70% (Q3 2021) and >50% (Q2 2022) decline in wood-based commodity prices


 
Q3 2022 RESULTS | 9 ▪ Repair and remodel rate of growth expected to slow during 2023, per LIRA Index(1): ❑ Home price appreciation and record home equity levels ❑ Remote work flexibility ❑ Average age of existing homes ~40 years old(2) ▪ Home affordability has come under pressure: ❑ Mortgage rates have more than doubled this year ❑ Home price appreciation ❑ Broad-based inflation ▪ New home starts expected to slow: ❑ U.S. new home supply now at ~9 months(3) ❑ Builders’ confidence down to 38, below the 20-year average(4) ❑ Single-family housing starts predicted to decline ~20% in 2023(5) U.S. HOUSING INDUSTRY / U.S. housing fundamentals slowing BLUELINX SALES BY END MARKET 45% 40% 15% New Home ConstructionRepair & Remodel Commercial Note: management’s estimate of 2019 sales by end market for two-step distribution of building materials (1) Source: Joint Center for Housing Studies at Harvard University. The Leading Indicator of Remodeling Activity (LIRA) provides a short-term outlook of national home improvement and repair spending to owner-occupied homes. (2) Source: American Community Survey completed in 2019.. (3) Source: U.S. Census Bureau. The months' supply indicates how long the current for-sale inventory would last given the current sales rate if no additional new houses were built (4) Source: NAHB Housing Market Index (HMI) is based on a monthly survey of NAHB members designed to take the pulse of the single-family housing market. The survey asks respondents to rate market conditions for the sale of new homes at the present time and in the next six months as well as the traffic of prospective buyers of new homes (5) Source: . Forecast: John Burns Real Estate Consulting, LLC subject limitations and disclaimers – not for redistribution


 
Q3 2022 RESULTS | 10 *As of October 28, 2022 Supply/Cost Environment ▪ Average lumber and panel prices declined 26% and 23%, respectively, from Q2 to Q3, and have declined 16% and 14% respectively from Q3 through October ▪ Tight labor market for drivers persists ▪ Higher input costs due to widespread inflation ▪ Access to supply easing across most of our key specialty product categories Average quarterly prices for framing lumber ($/MBF) and structural panels ($/MSF) (per RISI(1)): U.S. HOUSING INDUSTRY / wood-based commodity prices remained volatile (1) Source: Random Lengths, company analysis; Oct-22 data thru 10/28/22 $987 $1,243 $466 $702 $1,244 $797 $587 $492 $1,003 $1,566 $766 $715 $1,232 $874 $671 $577 $300 $500 $700 $900 $1,100 $1,300 $1,500 $1,700 1Q21 2Q21 3Q21 4Q21 1Q22 2Q22 3Q22 4Q22* Quarterly Average Price of Framing Lumber Quarterly Average Price for Structural Panels


 
Q3 2022 RESULTS | 11 Financial Review Kelly Janzen, Chief Financial Officer


 
Q3 2022 RESULTS | 12 ▪ Net sales increased 9% to $1.1b: ❑ Specialty product sales grew 13% ❑ Structural product sales grew 2% ▪ Gross Margin of 17.9%, up 210 bps: ❑ Driven by improved structural product margin ▪ Diluted EPS of $6.38, up 35%: ❑ Includes $0.43 per share benefit from lower share count related to share repurchases ▪ Adjusted EBITDA of $100m, up 27%: ❑ Adjusted EBITDA margin of 9.4% ▪ Free Cash Flow of $130m, up 28%: ❑ +$29m vs prior year period ❑ Net working capital reduced $72m sequentially Note: All comparisons versus the prior-year period unless otherwise noted; see Appendix for reconciliations for all non-GAAP figures $ millions, except per share data Q3 2021 Q3 2022 Variance Net sales $971 $1,061 +9% Gross Profit $153 $189 +24% Gross Margin % 15.8% 17.9% +210 bps Diluted Earnings Per Share $4.74 $6.38 +35% Adjusted EBITDA $79 $100 +27% Adjusted EBITDA % 8.1% 9.4% +130 bps Free Cash Flow $102 $130 +28% Net Leverage 1.3x 0.7x (0.6x) THIRD QUARTER 2022 RESULTS / key metrics


 
Q3 2022 RESULTS | 13 Days Sales of Inventory (DSI) Number of Days Operating Working Capital Management(1) Dollars in millions Cash Cycle Days Number of Days(2) ▪ Significant return on working capital, 57% for TTM Q3 2022 ▪ $52m sequential increase in operating working capital due primarily to higher cash on hand ▪ Inventory increase year over year due to increase in higher value specialty products ▪ Cash cycle days increased by 5 days over 2Q22 due to specialty inventory mix Note: See Appendix for reconciliations for all non-GAAP figures (1) Operating working capital includes accounts receivable, inventory, accounts payable and cash on hand (2) Cash Cycle Days = Days Sales Outstanding plus Days Sales of Inventory less Days Payable Outstanding WORKING CAPITAL / 57% return on working capital for TTM Q3 2022 48 54 50 45 60 63 58 63 68 3Q20 4Q20 1Q21 2Q21 3Q21 4Q21 1Q22 2Q22 3Q22 40 43 39 35 48 54 47 50 58 3Q20 4Q20 1Q21 2Q21 3Q21 4Q21 1Q22 2Q22 3Q22 $446 $471 $576 $636 $571 $733 $904 $866 $918 0% 10% 20% 30% 40% 50% 60% 70% 80% $200 $300 $400 $500 $600 $700 $800 $900 $1,000 3Q20 4Q20 1Q21 2Q21 3Q21 4Q21 1Q22 2Q22 3Q22 Total Operating Working Capital Return on Working Capital


 
Q3 2022 RESULTS | 14 $496 $499 $563 $675 $641 $641 $768 $788 $724 17.4% 17.4% 19.3% 24.4% 23.0% 21.9% 24.0% 22.9% 20.9% 3Q20 4Q20 1Q21 2Q21 3Q21 4Q21 1Q22 2Q22 3Q22 ($ millions) GM Rate Net sales ▪ Net sales grew 13%, or $83m: ▪ Sales growth driven by strategic pricing actions ▪ Volume relatively flat ▪ Gross Profit of $151m, up 3%: ▪ Disciplined, value-based pricing ▪ Gross margin of 20.9%, down 210 bps: ▪ Due to the easing of supply constraints, primarily millwork Q3 year-over-year analysis SPECIALTY PRODUCTS Q3 2022 RESULTS / sales grew 13% with gross profit up 3%


 
Q3 2022 RESULTS | 15 ($ millions) $375 $367 $462 $633 $330 $331 $534 $452 $336 19.6% 10.2% 15.5% 13.6% 1.7% 16.1% 20.0% 4.7% 11.3% 3Q20 4Q20 1Q21 2Q21 3Q21 4Q21 1Q22 2Q22 3Q22 GM Rate Net sales ▪ Net sales increased 2%, or $7m: ▪ Reflects year-over-year higher average pricing for commodity framing lumber: ❑ 26% increase in average price of lumber ▪ Volume up modestly ▪ Gross Profit of $38m, up 574%: ▪ Continued improvement in managing structural inventory and optimizing profitability ▪ Gross margin of 11.3%, up 960 bps: ▪ Reflects continued improvement in inventory management and higher prices for commodity framing lumber Q3 year-over-year analysis STRUCTURAL PRODUCTS Q3 2022 RESULTS / sales grew $7m and profit increased $32m


 
Q3 2022 RESULTS | 16 BALANCE SHEET / strong financial position to support value creation Note: see appendix for reconciliations to all non-GAAP measures ▪ At the end of Q3 2022: ▪ Net leverage at 0.7x ▪ Net debt at $343m ▪ Cash on hand of $229m ▪ Total available liquidity of $576m ▪ Targeting +$30m of capex in 2022 ($19m completed YTD 2022) ▪ No material debt maturities until 2029 $273 $277 $273 $263 $223 $58 $300 3Q20 3Q21 3Q22 Finance Leases Revolver Term Loan Senior Notes $594 ($ millions) $500 $573 Gross Debt Structure $350 $300 2022 2023 2024 2025 2026 2027 2028 2029 ABL @ ~2% $300m Senior Notes @ 6% undrawn revolver Debt Maturity Schedule Note: debt maturity schedule does not include finance lease obligations 9.2x 3.5x 1.3x 0.9x 0.7x 2019 2020 3Q21 2Q22 3Q22 Net Leverage


 
Q3 2022 RESULTS | 17 INVEST IN THE BUSINESS STRATEGIC ACQUISITIONS SHARE REPURCHASES OPERATING CASH FLOW GUIDING PRINCIPLES ▪ Maintain strong balance sheet and financial stability ▪ Long-term net leverage could increase to at or around 3.0x when considering growth ▪ Invest in business through economic cycles ▪ Acquisitions aligned to strategy ▪ Opportunistic share repurchases FREE CASH FLOW RETURN TO SHAREHOLDERSGROWTH AND MARGIN EXPANSION CAPITAL ALLOCATION FRAMEWORK / disciplined approach to drive value creation


 
Q3 2022 RESULTS | 18 Executive Summary Dwight Gibson, President and CEO


 
Q3 2022 RESULTS | 19 BlueLinx: A Whole New Blue Delighting Customers, Elite Execution, Performance Driven 1 2 3Attractive market BlueLinx is well positioned to grow Leveraging growth ▪ >$40b addressable market ▪ 5%+ long-term growth rate ▪ Fragmented competition ▪ Optimizing productivity ▪ Infusing capabilities ▪ Driving performance Source: Estimated 2021 and market growth CAGR based on Principia Consulting, LLC ▪ ~10% market share ▪ Growing with best customers ▪ Strong financial position A WHOLE NEW BLUE / a compelling investment


 
Q3 2022 RESULTS | 20 A WHOLE NEW BLUE / North America’s Preeminent Building Products Distributor Accelerating Growth Accelerating growth with our best customers and our best specialty products Optimizing Productivity Optimizing productivity thru distribution center optimization and procurement excellence Driving Performance Building an extraordinary team, creating a performance-based culture Creating Value Creating value thru profitable growth and disciplined capital allocation North America’s Preeminent Building Products Distributor


 
Q3 2022 RESULTS | 21 ▪ Thru the first nine months of 2022 we delivered strong results: ✓ Net sales of $3.6b, up 9% year-over-year ✓ Adjusted EBITDA of $415m, up 18% year-over-year ✓ Operating cash of $246m, up ~2x year-over-year ▪ Closely monitoring the US housing industry and broader economic environment; prepared to successfully navigate a slower demand environment ▪ Focused on accelerating growth in specialty products, optimizing productivity and driving world-class performance A WHOLE NEW BLUE / executive summary Note: see appendix for reconciliations to all non-GAAP measures


 
Q3 2022 RESULTS | 22 Appendix


 
Q3 2022 RESULTS | 23 BlueLinx 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. Adjusted EBITDA and Adjusted EBITDA Margin %. BlueLinx defines Adjusted EBITDA as an amount equal to net income (loss) plus interest expense and all interest expense related items, income taxes, depreciation and amortization, and further adjusted for certain non-cash items and other special items, including compensation expense from share based compensation, one-time charges associated with the legal, consulting, and professional fees related to our merger and acquisition activities, gains or losses on sales of properties, amortization of deferred gains on real estate, and expense associated with our restructuring activities, such as severance, in addition to other significant and/or one-time, nonrecurring, non-operating items 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-GAAPMeasurements” table later in this release. Free Cash Flow. BlueLinx defines free cash flow as net cash provided by operating activities less total capital expenditures. Free cash flow is a measure used by management to assess our financial performance, and we believe it is useful for investors because it relates the operating cash flow of the company to the capital that is spent to continue and improve business operations. In particular, free cash flow indicates the amount of cash generated after capital expenditures that can be used for, among other things, investment in our business, strengthening our balance sheet, and repayment of our debt obligations. Free cash flow does not represent the residual cash flow available for discretionary expenditures since there may be other nondiscretionary expenditures that are not deducted from the measure. Free cash flow is not a presentation made in accordance with GAAP and is not intended to present a superior measure of financial condition from those determined under GAAP. Free cash flow, as used herein, is not necessarily comparable to other similarly titled captions of other companies due to differences in methods of calculation. This non-GAAP measure is reconciled in the “Reconciliation of Non-GAAPMeasurements” table later in this release. Net Debt and Net Leverage Ratio. BlueLinx calculates net debt as its total short- and long-term debt, including outstanding balances under our term loan and revolving credit facility and the total amount of its obligations under financing leases, less cash and cash equivalents. We believe that net debt is useful to investors because our management reviews our net debt as part of its management of overall liquidity, financial flexibility, capital structure and leverage, and creditors and credit analysts monitor our net debt as part of their assessments of our business. We determine our overall net leverage ratio by dividing our net debt by trailing twelve-month Adjusted EBITDA. We believe that this ratio is useful to investors because it is an indicator of our ability to meet our future financial obligations. In addition, the ratio is a measure that is frequently used by investors and creditors. Our net debt and overall net leverage ratio are not presentations made in accordance with GAAP and are not intended to present a superior measure of our financial condition from measures and ratios determined under GAAP. In addition, our net debt and overall net leverage ratio, as used herein, are not necessarily comparable to other similarly titled captions of other companies due to differences in methods of calculation. This non-GAAP measure is reconciled in the “Reconciliation of Non-GAAPMeasurements” table later in this presentation. Non-GAAP Measures


 
Q3 2022 RESULTS | 24 MACRO TRENDS / starts slowing but other key indicators remain solid despite rising interest rates Total U.S. Single Family Housing Starts (SFHS) Housing starts in thousands (1) 25-year average $0 $100 $200 $300 $400 $500 1 5 9 13 17 21 25 29 33 37 41 45 49 53 57 61 65 69 73 77 81 85 89 93 LIRA Remodeling Activity Index TTM Moving Total - Dollars in billions (3) Total U.S. Monthly Supply of New Houses Months of inventory (2) 30 Year Fixed Mortgage Rates As of September 2022 (4) 0.0% 2.0% 4.0% 6.0% 8.0% 10.0% 12.0% 14.0% 16.0% 18.0% 19 8 0 19 8 2 19 8 4 19 8 6 19 8 8 19 90 19 92 19 94 19 96 19 98 20 0 0 20 0 2 20 0 4 20 0 6 20 0 8 20 10 20 12 20 14 20 16 20 18 20 20 20 22 P 20 24 P (1) Source: Historical data is U.S. Census Bureau; Forecast from John Burns Real Estate Consulting, LLC subject limitations and disclaimers – not for redistribution (2) Source: U.S. Census Bureau. The months' supply indicates how long the current for-sale inventory would last given the current sales rate if no additional new houses were built. (3) Source: Joint Center for Housing Studies at Harvard University. The Leading Indicator of Remodeling Activity (LIRA) provides a short-term outlook of national home improvement and repair spending to owner-occupied homes. (4) Source: Historical data is Freddie Mac; Forecast: John Burns Real Estate Consulting, LLC subject limitations and disclaimers – not for redistribution. remodeling spend expected to grow in 2023 mortgage rates expected to remain below historical averages 0 2 4 6 8 10 12 14 20 0 0 20 0 1 20 0 2 20 0 3 20 0 4 20 0 5 20 0 6 20 0 7 20 0 8 20 0 9 20 10 20 11 20 12 20 13 20 14 20 15 20 16 20 17 20 18 20 19 20 20 20 21 20 22 ~9 months of home inventory - 200 400 600 800 1,000 1,200 1,400 1,600 1,800 2,000 20 0 0 20 0 1 20 0 2 20 0 3 20 0 4 20 0 5 20 0 6 20 0 7 20 0 8 20 0 9 20 10 20 11 20 12 20 13 20 14 20 15 20 16 20 17 20 18 20 19 20 20 20 21 20 22 E 20 23 E 20 2… 20 25 E starts expected to be below 25-year average but ~2x 2009-2011 levels


 
Q3 2022 RESULTS | 25 MACRO TRENDS / shift to hybrid work and record levels of home equity support home investment $0 $5,000 $10,000 $15,000 $20,000 $25,000 $30,000 $35,000 19 8 0 -… 19 8 1- … 19 8 3- … 19 8 4 -… 19 8 6- … 19 8 7- … 19 8 9- … 19 90 -… 19 92 -… 19 93 -… 19 95 -… 19 96 -… 19 98 -… 19 99 -… 20 0 1- … 20 0 2- … 20 0 4 -… 20 0 5- … 20 0 7- … 20 0 8 -… 20 10 -… 20 11 -… 20 13 -… 20 14 -… 20 16 -… 20 17 -… 20 19 -… 20 20 -… 20 22 -… Household Owners’ Equity Levels in Real Estate Dollars in billions (1) (1) Source: Historical data is Board of Governors of the Federal Reserve System (US), Households; Owners' Equity in Real Estate, Level [OEHRENWBSHNO], retrieved from FRED, Federal Reserve Bank of St. Louis Hybrid/work from home Fully on-site record levels of home equity


 
Q3 2022 RESULTS | 26 Framing Lumber Composite Index As of October 2022(1) Structural Panel Composite Index As of October 2022(2) ▪ Prices declined throughout 3Q22 ▪ Lumber and panels prices averaged ~$587/MBF and ~$671/MSF in 3Q22 ▪ As of 10/28/22, average Oct- 22 pricing was $492/MBF for lumber and $577/MSF for panels ▪ Oct-22 average lumber and panels pricing was lower than 3Q22 average pricing by 16% and 14%, respectively - 200 400 600 800 1,000 1,200 1,400 1,600 Ja n -1 5 A p r- 15 Ju l- 15 O ct -1 5 Ja n -1 6 A p r- 16 Ju l- 16 O ct -1 6 Ja n -1 7 A p r- 17 Ju l- 17 O ct -1 7 Ja n -1 8 A p r- 18 Ju l- 18 O ct -1 8 Ja n -1 9 A p r- 19 Ju l- 19 O ct -1 9 Ja n -2 0 A p r- 20 Ju l- 20 O ct -2 0 Ja n -2 1 A p r- 21 Ju l- 21 O ct -2 1 Ja n -2 2 A p r- 22 Ju l- 22 O ct -2 2 Index Price TTM Avg. Index Price - 200 400 600 800 1,000 1,200 1,400 1,600 1,800 Ja n -1 5 A p r- 15 Ju l- 15 O ct -1 5 Ja n -1 6 A p r- 16 Ju l- 16 O ct -1 6 Ja n -1 7 A p r- 17 Ju l- 17 O ct -1 7 Ja n -1 8 A p r- 18 Ju l- 18 O ct -1 8 Ja n -1 9 A p r- 19 Ju l- 19 O ct -1 9 Ja n -2 0 A p r- 20 Ju l- 20 O ct -2 0 Ja n -2 1 A p r- 21 Ju l- 21 O ct -2 1 Ja n -2 2 A p r- 22 Ju l- 22 O ct -2 2 Index Price TTM Avg. Index Price Oct-22 framing lumber prices are 18% lower than the 5-year average and 40% below the TTM rolling average Oct-22 structural panel prices are 10% lower the 5-year average and 33% below to the TTM rolling average (1) Source: Random Lengths, company analysis; Oct-22 data thru 10/28/22 (2) Source: Random Lengths; company analysis; Oct-22 data thru 10/28/22 WOOD-BASED COMMODITY PRICE TRENDS / wood-based commodity markets remain volatile


 
Q3 2022 RESULTS | 27 Non-GAAP Reconciliation / Supplementary Financial Information Net sales, gross profit dollars, gross profit percentages, sales mix, and gross profit mix by product category by fiscal quarter, Q4 2020 – Q3 2022 In millions where dollars are presented


 
Q3 2022 RESULTS | 28 Non-GAAP Reconciliation / Supplementary Financial Information Adjusted EBITDA reconciliation by fiscal quarter, Q4 2020 – Q3 2022 In millions where dollars are presented


 
Q3 2022 RESULTS | 29 Non-GAAP Reconciliation / Supplementary Financial Information Adjusted EBITDA reconciliation for the nine-month periods, Q3 2022 – Q3 2021 In millions where dollars are presented


 
Q3 2022 RESULTS | 30 Non-GAAP Reconciliation / Supplementary Financial Information Free cash flow for the three and nine months ended, Q3 2022 and Q3 2021 In millions where dollars are presented September 2022 September 2021 September 2022 September 2021 (in millions) (in millions) (in millions) (in millions) Net cash provided by operating activities 143$ 104$ 246$ 127$ Less: Property and equipment investments (12) (2) (19) (6) Free cash flow 130$ 102$ 227$ 121$ Three Months Ended Nine Months Ended


 
Q3 2022 RESULTS | 31 Non-GAAP Reconciliation / Supplementary Financial Information Working capital by fiscal quarter, Q1 2020 – Q3 2022 In millions where dollars are presented Cash investments in property, plant, and equipment (CAPEX) for three months ended March 2022, June 2022, and September 2022 In millions where dollars are presented Three Months Ended Three Months Ended Three Months Ended Nine Months Ended March 2022 June 2022 September 2022 September 2022 Investments in PP&E (1) (3)$ (4)$ (12)$ (19)$ (in millions) (1) As disclosed within the "Property and equipment investments" line of our Consolidated Statements of Cash Flows for the three months ended April 2, 2022, July 2, 2022, and October 1, 2022, respectively.


 
Q3 2022 RESULTS | 32 Non-GAAP Reconciliation / Supplementary Financial Information Net leverage ratio for the trailing twelve months ended fiscal September 2022 with accompanying Adjusted EBITDA reconciliation In millions where dollars are presented


 
Q3 2022 RESULTS | 33 Non-GAAP Reconciliation / Supplementary Financial Information Net leverage ratio for the trailing twelve months ended fiscal June 2022 with accompanying Adjusted EBITDA reconciliation In millions where dollars are presented


 
Q3 2022 RESULTS | 34 Non-GAAP Reconciliation / Supplementary Financial Information Net leverage ratio for the trailing twelve months ended fiscal September 2021 with accompanying Adjusted EBITDA reconciliation In millions where dollars are presented


 
Q3 2022 RESULTS | 35 Non-GAAP Reconciliation / Supplementary Financial Information Net leverage ratio for the trailing twelve months ended fiscal December 2020 with accompanying Adjusted EBITDA reconciliation In millions where dollars are presented


 
Q3 2022 RESULTS | 36 Non-GAAP Reconciliation / Supplementary Financial Information Net leverage ratio for the trailing twelve months ended fiscal September 2020 with accompanying Adjusted EBITDA reconciliation In millions where dollars are presented


 
Q3 2022 RESULTS | 37 Non-GAAP Reconciliation / Supplementary Financial Information Net leverage ratio for the trailing twelve months ended fiscal December 2019 with accompanying Adjusted EBITDA reconciliation In millions where dollars are presented


 
Q3 2022 RESULTS | 38 Non-GAAP Reconciliation / Supplementary Financial Information Note: These calculations are based on unaudited financials and preliminary estimates for September 2022 results provided by the seller Vandermeer Forest Products For the Trailing Twelve-Month Period September 2022 (in millions) Net Income $18.6 Adjustments: Depreciation and Amortization Expense $0.1 Other, net $0.5 Adjusted EBITDA $19.3 Net Sales $150.5 Adjusted EBITDA $19.3 Adjusted EBITDA Margin 13% Purchase Price of Business $63.4 Adjusted EBITDA $19.3 Purchase Price to Adjusted EBITDA Multiple 3.3x Adjusted EBITDA reconciliation and purchase price multiple for the trailing twelve months ended fiscal September 2022 In millions where dollars are presented