BlueLinx Announces Second Quarter 2024 Results

Rhea-AI Summary

BlueLinx Holdings Inc. (NYSE: BXC) reported its Q2 2024 financial results. Net sales were $768 million, down 6% year-over-year. Gross profit was $122 million with a margin of 15.9%. Net income was $14 million, or $1.65 diluted EPS. Adjusted EBITDA was $34 million, 4.5% of net sales. The company generated $36 million in operating cash flow and $29 million in free cash flow.

Specialty products sales decreased 5.5% to $539 million, while structural products sales fell 6.6% to $229 million. BlueLinx ended the quarter with $491 million in cash and a net leverage ratio of (0.9x). The company repurchased $15 million of stock, with $76 million remaining on its share repurchase authorization.

Positive

• Solid volume growth in key specialty product categories
• Strong free cash flow generation of $29 million in Q2
• Robust liquidity position with $838 million available, including $491 million cash on hand
• Net leverage ratio of (0.9x), indicating strong balance sheet
• $15 million in share repurchases, demonstrating commitment to returning capital to shareholders

Negative

• Net sales decreased 6% year-over-year to $768 million
• Net income declined to $14 million from $24 million in the prior year period
• Adjusted EBITDA decreased to $34 million (4.5% of net sales) from $49 million (6.0% of net sales) in Q2 2023
• Structural products segment experienced volume declines and price deflation
• Challenging macro environment in the housing and building products sector

Financial Analyst

BlueLinx's Q2 2024 results paint a mixed picture, with some positive indicators amidst challenging market conditions. The company reported $768 million in net sales, a 6% year-over-year decrease, primarily due to price deflation and volume declines in structural products. However, there are several noteworthy positives:

• Solid specialty product gross margins of 19.3%, slightly up from 19.1% in Q2 2023
• Strong liquidity position with $838 million available, including $491 million in cash
• Negative net leverage ratio of (0.9x), indicating a robust balance sheet
• Continued share repurchases, demonstrating confidence in the company's future

The 10% decrease in gross profit to $122 million and the decline in Adjusted EBITDA to $34 million (or 4.5% of net sales) are concerning. However, the company's focus on specialty products, which have higher margins and its strong cash position provide a buffer against market volatility.

The outlook for Q3 2024 suggests stability in gross margins for both specialty and structural products. Investors should monitor the company's ability to maintain these margins and its success in growing specialty product volumes, which could be key drivers for future performance.

Market Research Analyst

BlueLinx's Q2 results reflect the broader challenges in the housing and building products sector. The 6% decline in net sales aligns with the current market slowdown. However, there are several indicators that suggest BlueLinx is navigating these headwinds relatively well:

• Slight increase in specialty product volumes despite market challenges
• Maintenance of healthy specialty product gross margins
• Strong cash flow generation and liquidity position

The company's strategy of focusing on specialty products appears to be paying off, as these products offer higher margins and seem to be more resilient to market fluctuations. The 19.3% gross margin in specialty products, compared to just 7.9% in structural products, underscores this point.

The housing market outlook remains uncertain, with high interest rates continuing to impact demand. However, BlueLinx's strong balance sheet and liquidity provide a cushion against market volatility. The company's ability to generate $29 million in free cash flow during a challenging quarter is particularly impressive.

Looking ahead, investors should pay close attention to housing start data and lumber prices, as these will significantly impact BlueLinx's performance. The company's ability to continue growing its specialty product segment while maintaining margins will be important for long-term success in a potentially prolonged housing market slowdown.

ATLANTA--(BUSINESS WIRE)-- BlueLinx Holdings Inc. (NYSE: BXC), a leading U.S. wholesale distributor of building products, today reported financial results for the three months ended June 29, 2024.

SECOND QUARTER 2024 HIGHLIGHTS

• Net sales of $768 million
• Gross profit of $122 million, gross margin of 15.9% and specialty product gross margin of 19.3%
• Net income of $14 million, or $1.65 diluted earnings per share
• Adjusted net income of $15 million, or $1.68 adjusted diluted earnings per share
• Adjusted EBITDA of $34 million, 4.5% of net sales
• Operating cash flow of $36 million and free cash flow of $29 million
• Available liquidity of $838 million, including $491 million cash and cash equivalents on hand
• $15 million in share repurchases, with $76 million remaining on our share repurchase authorization as of quarter-end

“Our second quarter results were highlighted by solid volume growth in several of our key specialty product categories despite a challenging macro environment,” said Shyam Reddy, President and CEO of BlueLinx. “We also generated solid specialty product gross margins of approximately 19%, despite the effects of price deflation. The quarter was adversely impacted by structural products, primarily driven by declining lumber and panel prices, in addition to volume declines due to challenges in the housing and building products sector. Although current market conditions are challenging, we believe we are well-positioned for long-term success because our vision is supported by a well-defined sales growth strategy, strong liquidity, and minimal debt.”

“Our strong free cash flow generation of $29 million during the second quarter helped us end the period with $491 million in cash on hand and a net leverage ratio of (0.9x),” said Andy Wamser, Chief Financial Officer of BlueLinx. “During the second quarter, we purchased $15 million of stock under our share repurchase program, demonstrating our commitment to returning capital to shareholders. At the end of the quarter, we had $76 million remaining on our share repurchase authorization, and we will continue to be opportunistic in the market.”

SECOND QUARTER 2024 FINANCIAL PERFORMANCE

In the second quarter of 2024, net sales were $768 million, a decrease of $48 million, or 6% when compared to the second quarter of 2023. Gross profit was $122 million, a decrease of $13 million, or 10%, year-over-year, and gross margin was 15.9%, down 70 basis points from the same period last year.

Net sales of specialty products, which includes products such as engineered wood, siding, millwork, outdoor living, specialty lumber and panels, and industrial products, were $539 million, a decrease of $32 million, or 5.5% when compared to the second quarter of 2023. This decrease was due to price deflation across specialty products, partially offset by a slight increase in volumes. Gross profit from specialty product sales was $104 million, a decrease of $4 million, or 4.1% when compared to the second quarter of last year. Gross margin was 19.3% compared to 19.1% in the prior year period. The current period benefited from the reduction of an accrued estimate made in the first quarter of 2024 related to amounts the Company believes it may owe for discrepancies in duties paid in prior years for certain imported goods. Not including this benefit, specialty products’ gross margin would have been 18.9% in the current quarter.

Net sales of structural products, which includes products such as lumber, plywood, oriented strand board, rebar, and remesh, decreased $16 million, or 6.6% when compared to the second quarter of 2023, to $229 million in the second quarter of 2024. The decrease in structural sales was due primarily to lower volumes and a decline in our lumber selling prices which generally correlated to a year-over-year decline in the average composite price of framing lumber of 6%. Gross profit from sales of structural products was $18 million, a decrease of $9 million from the prior year period, and gross margin was 7.9%, compared to 11.0% in the prior year period.

Selling, general and administrative (“SG&A”) expenses were $89 million in the second quarter of 2024, $1 million higher than the prior year period. The year-over-year change in SG&A was primarily due to higher technology expenses and legal expenses associated with duty-related matters, as well as lower logistics costs and share-based compensation expenses.

Net income was $14 million, or $1.65 per diluted share, versus $24 million, or $2.70 per diluted share, in the prior year period. Adjusted Net Income was $15 million, or $1.68 per diluted share compared to $26 million, or $2.91 per diluted share in the second quarter of last year.

Adjusted EBITDA was $34 million, or 4.5% of net sales, for the second quarter of 2024, compared to $49 million, or 6.0% of net sales in the second quarter of 2023. The current period includes the benefit of the duty-related matters, and not including these items, Adjusted EBITDA was $32 million, or 4.1% of net sales.

Net cash generated from operating activities was $36 million in the second quarter of 2024 and free cash flow was $29 million. The cash generated during the second quarter was driven by net income and improved working capital.

CAPITAL ALLOCATION AND FINANCIAL POSITION

During the second quarter, we invested $6.5 million of cash in capital investments used to improve our distribution facilities and upgrade our fleet. Additionally, we purchased approximately $15 million of the Company’s common stock through open market transactions under our $100 million share repurchase program. At quarter-end, we had $76 million remaining under this authorization and we plan to continue being opportunistic in the market when repurchasing shares.

As of June 29, 2024, total debt and finance lease obligations, but excluding real property finance lease obligations, was $348 million, which consisted of $300 million of senior secured notes that mature in 2029 and $48 million of finance lease obligations for equipment. Net debt was ($143) million, which consisted of total debt and finance leases excluding real property finance lease obligations of $348 million less cash and cash equivalents of $491 million, resulting in a net leverage ratio of (0.9x) using a trailing twelve-month Adjusted EBITDA of $160 million. Available liquidity was $838 million which included an undrawn revolving credit facility that had $346 million of availability plus cash and cash equivalents of $491 million.

THIRD QUARTER 2024 OUTLOOK

Through the first four weeks of the third 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 8% to 9%. Average daily sales volumes were improved versus the second quarter of 2024.

CONFERENCE CALL INFORMATION

BlueLinx will host a conference call on July 31, 2024, 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, 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: 1-888-660-6392
Passcode: 9140086

To listen to a replay of the teleconference, which will be available through August 14, 2024:

Domestic Replay: 1-800-770-2030
Passcode: 9140086

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 a comprehensive range of products to our customers which include 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, and we operate our business through a broad network of distribution centers. To learn more about BlueLinx, please visit www.bluelinxco.com.

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 strategy, liquidity, and debt, our long-run positioning relative to industry conditions, future share repurchases, and the information set forth under the heading “Third Quarter 2024 Outlook”.

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: housing market conditions; pricing and product cost variability; volumes of product sold; competition; the cyclical nature of the industry in which we operate; 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; effective inventory management relative to our sales volume or the prices of the products we produce; business disruptions; potential acquisitions and the integration and completion of such acquisitions; 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; the impacts of climate change; 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 effects of epidemics, global pandemics or other widespread public health crises and governmental rules and regulations; 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; the potential to incur more debt; 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 fuel and other energy prices or availability of third-part freight providers; changes in insurance-related deductible/retention reserves based on actual loss development 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; 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; interest rate risk, which could cause our debt service obligations to increase; 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 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 in the “Reconciliation of Non-GAAP Measurements” table later in this release. The Company cautions that non-GAAP measures are not intended to present superior measures of our financial condition from those measures determined under GAAP and 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. 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.

Adjusted Net Income and Adjusted Earnings Per Share. BlueLinx defines Adjusted Net Income as Net Income 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, further adjusted for the tax impacts of such reconciling items. BlueLinx defines Adjusted Earnings Per Share (basic and/or diluted) as the Adjusted Net Income for the period divided by the weighted average outstanding shares (basic and/or diluted) for the periods presented. We believe that Adjusted Net Income and Adjusted Earnings Per Share (basic and/or diluted) are useful to investors to enhance investors’ overall understanding of the financial performance of the business. Management also believes Adjusted Net Income and Adjusted Earnings Per Share (basic and/or diluted) are helpful in highlighting operating trends.

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. 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, Net Debt Excluding Real Property Finance Lease Liabilities, Overall Net Leverage Ratio, and Net Leverage Ratio Excluding Real Property Finance Lease Liabilities. 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 finance leases, less cash and cash equivalents. Net Debt Excluding Real Property Finance Lease Liabilities is calculated in the same manner as Net Debt, except the total amount of obligations under real estate finance leases are excluded. Although our credit agreements do not contain leverage covenants, a net leverage ratio excluding finance lease obligations for real property is included within the terms of our revolving credit agreement. We believe that Net Debt and Net Debt Excluding Real Property Finance Lease Liabilities are useful to investors because our management reviews both metrics 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 Twelve-Month Trailing Adjusted EBITDA. Our calculation of Net Leverage Ratio Excluding Real Property Finance Lease Liabilities is determined by dividing our Net Debt Excluding Real Property Finance Lease Liabilities by Twelve-Month Trailing Adjusted EBITDA. We believe that these ratios are useful to investors because they are indicators of our ability to meet our future financial obligations. In addition, our Net Leverage Ratio is a measure that is frequently used by investors and creditors. Our Net Debt, Net Debt Excluding Real Property Finance Lease Liabilities, Overall Net Leverage Ratio, and Net Leverage Ratio Excluding Real Property Finance Lease Liabilities are not 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. The calculations of our Net Debt, Net Debt Excluding Real Property Finance Lease Liabilities, Overall Net Leverage Ratio, and Net Leverage Ratio Excluding Real Property Finance Lease Liabilities are presented in the table on page 8. Net Debt, Net Debt Excluding Real Property Finance Lease Liabilities, Overall Net Leverage Ratio, and Net Leverage Ratio Excluding Real Property Finance Lease Liabilities, as used herein, are not necessarily comparable to other similarly titled captions of other companies due to differences in methods of calculation.

BLUELINX HOLDINGS INC. CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited)
	Three Months Ended								Six Months Ended
	June 29, 2024				July 1, 2023				June 29, 2024				July 1, 2023
(In thousands, except per share data)
Net sales	$	768,363			$	815,967			$	1,494,607			$	1,613,871
Cost of products sold		645,919				680,164				1,244,482				1,344,529
Gross profit		122,444				135,803				250,125				269,342
Gross margin		15.9	%			16.6	%			16.7	%			16.7	%
Operating expenses (income):
Selling, general, and administrative		89,453				88,750				180,703				179,924
Depreciation and amortization		10,120				7,951				19,553				15,669
Amortization of deferred gains on real estate		(984	)			(984	)			(1,968	)			(1,968	)
Other operating expenses		8				993				322				4,109
Total operating expenses		98,597				96,710				198,610				197,734
Operating income		23,847				39,093				51,515				71,608
Non-operating expenses:
Interest expense, net		4,801				6,311				9,425				13,998
Other expense, net		—				594				—				1,188
Income before provision for income taxes		19,046				32,188				42,090				56,422
Provision for income taxes		4,710				7,722				10,262				14,144
Net income	$	14,336			$	24,466			$	31,828			$	42,278
Basic earnings per share	$	1.65			$	2.70			$	3.68			$	4.67
Diluted earnings per share	$	1.65			$	2.70			$	3.66			$	4.67

BLUELINX HOLDINGS INC. CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited)
	June 29, 2024				December 30, 2023
(In thousands, except share data)
ASSETS
Current assets:
Cash and cash equivalents	$	491,392			$	521,743
Receivables, less allowances of $3,344 and $3,398, respectively		273,537				228,410
Inventories, net		357,573				343,638
Other current assets		36,220				26,608
Total current assets		1,158,722				1,120,399
Property and equipment, at cost		413,905				396,321
Accumulated depreciation		(181,841	)			(170,334	)
Property and equipment, net		232,064				225,987
Operating lease right-of-use assets		44,418				37,227
Goodwill		55,372				55,372
Intangible assets, net		28,787				30,792
Deferred income tax asset, net		53,677				53,256
Other non-current assets		13,036				14,568
Total assets	$	1,586,076			$	1,537,601
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable	$	179,375			$	157,931
Accrued compensation		12,310				14,273
Finance lease liabilities - current		11,132				11,178
Operating lease liabilities - current		8,460				6,284
Real estate deferred gains - current		3,935				3,935
Other current liabilities		22,250				24,961
Total current liabilities		237,462				218,562
Long-term debt		294,403				293,743
Finance lease liabilities, less current portion		280,206				274,248
Operating lease liabilities, less current portion		37,369				32,519
Real estate deferred gains, less current portion		64,697				66,599
Other non-current liabilities		19,607				17,644
Total liabilities		933,744				903,315
Commitments and contingencies
STOCKHOLDERS' EQUITY:
Preferred Stock, $0.01 par value, 30,000,000 shares authorized, none outstanding		—				—
Common Stock, $0.01 par value, 20,000,000 shares authorized, 8,551,462 and 8,650,046 outstanding, respectively		86				87
Additional paid-in capital		151,279				165,060
Retained earnings		500,967				469,139
Total stockholders’ equity		652,332				634,286
Total liabilities and stockholders’ equity	$	1,586,076			$	1,537,601

BLUELINX HOLDINGS INC. CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited)
	Three Months Ended								Six Months Ended
	June 29, 2024				July 1, 2023				June 29, 2024				July 1, 2023
(In thousands)
Cash flows from operating activities:
Net income	$	14,336			$	24,466			$	31,828			$	42,278
Adjustments to reconcile net income to cash provided by operations:
Depreciation and amortization		10,120				7,951				19,553				15,669
Amortization of debt discount and issuance costs		330				330				660				659
Provision for deferred income taxes		(48	)			337				(421	)			550
Amortization of deferred gains from real estate		(984	)			(984	)			(1,968	)			(1,968	)
Share-based compensation		1,405				1,926				3,755				6,495
Changes in operating assets and liabilities:
Accounts receivable		14,707				4,547				(45,127	)			(42,786	)
Inventories		13,369				30,012				(13,935	)			105,001
Accounts payable		6,339				13,084				20,123				38,504
Other current assets		(4,055	)			(15,995	)			(9,612	)			(3,169	)
Other assets and liabilities		(19,716	)			(1,521	)			(188	)			(8,115	)
Net cash provided by operating activities		35,803				64,153				4,668				153,118
Cash flows from investing activities:
Proceeds from sale of assets		147				91				274				128
Property and equipment investments		(6,454	)			(5,031	)			(11,901	)			(14,039	)
Net cash used in investing activities		(6,307	)			(4,940	)			(11,627	)			(13,911	)
Cash flows from financing activities:
Common stock repurchase and retirement		(14,529	)			(11,599	)			(14,529	)			(11,599	)
Repurchase of shares to satisfy employee tax withholdings		(1,545	)			(3,390	)			(2,452	)			(3,960	)
Principal payments on finance lease liabilities		(3,339	)			(2,133	)			(6,411	)			(4,266	)
Net cash used in financing activities		(19,413	)			(17,122	)			(23,392	)			(19,825	)
Net change in cash and cash equivalents		10,083				42,091				(30,351	)			119,382
Cash and cash equivalents at beginning of period		481,309				376,234				521,743				298,943
Cash and cash equivalents at end of period	$	491,392			$	418,325			$	491,392			$	418,325

The following schedule presents our revenues disaggregated by specialty and structural product category:
	Three Months Ended								Six Months Ended
	June 29, 2024				July 1, 2023				June 29, 2024				July 1, 2023
(Dollar amounts in thousands)
Net sales by product category
Specialty products	$	539,466			$	570,990			$	1,043,300			$	1,138,828
Structural products		228,897				244,977				451,307				475,043
Total net sales	$	768,363			$	815,967			$	1,494,607			$	1,613,871
Gross profit by product category
Specialty products	$	104,350			$	108,841			$	208,399			$	215,468
Structural products		18,094				26,962				41,726				53,874
Total gross profit	$	122,444			$	135,803			$	250,125			$	269,342
Gross margin % by product category
Specialty products		19.3	%			19.1	%			20.0	%			18.9	%
Structural products		7.9	%			11.0	%			9.2	%			11.3	%
Company gross margin %		15.9	%			16.6	%			16.7	%			16.7	%

BLUELINX HOLDINGS INC. RECONCILIATION OF NON-GAAP MEASUREMENTS (Unaudited)
The following schedule reconciles net income to Adjusted EBITDA (non-GAAP):
	Three Months Ended								Six Months Ended								Trailing Twelve Months Ended
	June 29, 2024				July 1, 2023				June 29, 2024				July 1, 2023				June 29, 2024				July 1, 2023
(In thousands)
Net income	$	14,336			$	24,466			$	31,828			$	42,278			$	38,086			$	133,773
Adjustments:
Depreciation and amortization		10,120				7,951				19,553				15,669				35,927				30,018
Interest expense, net		4,801				6,311				9,425				13,998				19,173				33,722
Provision for income taxes		4,710				7,722				10,262				14,144				29,468				44,019
Share-based compensation expense		1,405				1,926				3,755				6,495				9,315				12,175
Amortization of deferred gains on real estate		(984	)			(984	)			(1,968	)			(1,968	)			(3,934	)			(3,934	)
Pension termination and related expenses(1)(2)		—				594				—				1,188				31,628				1,188
Acquisition-related costs(1)(3)(5)		—				—				—				17				261				1,272
Restructuring and other(1)(4)(5)		7				993				321				4,092				143				6,930
Adjusted EBITDA	$	34,395			$	48,979			$	73,176			$	95,913			$	160,067			$	259,163

(1)	Reflects non-recurring items of approximately $1.6 million in beneficial items in the prior quarterly period. For the current year six-month period, reflects non-recurring, beneficial items of approximately $0.3 million and the prior year six-month period reflects $5.3 million of non-recurring, beneficial items. For the trailing twelve months ended, reflects approximately $32.0 million of non-recurring, beneficial items, and approximately $9.4 million of non-recurring, beneficial items, in the prior trailing twelve- month period.
(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 efforts, such as severance, net of other one-time non-operating items.
(5)	Certain amounts for prior periods in fiscal 2023 have been reclassified for Acquisition-related costs and Restructuring and other.

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								Six Months Ended
	June 29, 2024				July 1, 2023				June 29, 2024				July 1, 2023
(In thousands, except per share data)
Net income	$	14,336			$	24,466			$	31,828			$	42,278
Adjustments:
Share-based compensation expense		1,405				1,926				3,755				6,495
Amortization of deferred gains on real estate		(984	)			(984	)			(1,968	)			(1,968	)
Pension termination and related expenses		—				594				—				1,188
Acquisition-related costs (2)		—				—				—				17
Restructuring and other (2)		7				993				321				4,092
Tax impacts of reconciling items above (1)		(106	)			(607	)			(514	)			(2,463	)
Adjusted net income	$	14,658			$	26,388			$	33,422			$	49,639
Basic EPS	$	1.65			$	2.70			$	3.68			$	4.67
Diluted EPS	$	1.65			$	2.70			$	3.66			$	4.67
Weighted average shares outstanding - Basic		8,645				9,040				8,641				9,034
Weighted average shares outstanding - Diluted		8,686				9,057				8,680				9,051
Non-GAAP Adjusted Basic EPS	$	1.69			$	2.92			$	3.86			$	5.48
Non-GAAP Adjusted Diluted EPS	$	1.68			$	2.91			$	3.85			$	5.48

(1)	Tax impact calculated based on the effective tax rate for the respective three and six-month periods presented
(2)	Certain amounts for prior periods in fiscal 2023 have been reclassified for Acquisition-related costs and Restructuring and other

In the following table, our Adjusted EBITDA margin (non-GAAP) is calculated and compared to Net income as a percentage of Net sales:
	Three Months Ended								Six Months Ended
	June 29, 2024				July 1, 2023				June 29, 2024				July 1, 2023
(Dollar amounts in thousands)
Net sales	$	768,363			$	815,967			$	1,494,607			$	1,613,871
Net income	$	14,336			$	24,466			$	31,828			$	42,278
Net income as a percentage of Net sales		1.9	%			3.0	%			2.1	%			2.6	%
Net sales	$	768,363			$	815,967			$	1,494,607			$	1,613,871
Adjusted EBITDA - non-GAAP(1)	$	34,395			$	48,979			$	73,176			$	95,913
Adjusted EBITDA margin - non-GAAP		4.5	%			6.0	%			4.9	%			5.9	%

(1)	See the table that reconciles Net income to Adjusted EBITDA (non-GAAP)

The following schedule reconciles Total debt and finance leases to: Net debt (non-GAAP) and to Net debt excluding finance lease liabilities for real property (non-GAAP). The calculations of Net leverage ratio (non-GAAP) and Net leverage ratio excluding real property finance leases liabilities (non-GAAP) is also presented.
	As of
	June 29, 2024				December 30, 2023				July 1, 2023
($ amounts in thousands)
Long term debt(1)	$	300,000			$	300,000			$	300,000
Finance lease liabilities for equipment and vehicles		47,979				42,252				27,743
Finance lease liabilities for real property		243,359				243,174				243,445
Total debt and finance leases		591,338				585,426				571,188
Less: available cash and cash equivalents		491,392				521,743				418,325
Net debt (non-GAAP)	$	99,946			$	63,683			$	152,863
Net debt, excluding finance lease liabilities for real property (non-GAAP)	$	(143,413	)		$	(179,491	)		$	(90,582	)
Trailing twelve-month adjusted EBITDA (non-GAAP, see above reconciliation)	$	160,067			$	182,804			$	259,163
Net leverage ratio	0.6x				0.3x				0.6x
Net leverage ratio excluding real property finance lease liabilities(2)	(0.9x		)		(1.0x		)		(0.3x		)

(1)

As of June 29, 2024, December 30, 2023, and July 1, 2023, 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 condensed consolidated balance sheets at $294.4 million, $293.7 million, and $293.1 million as of June 29, 2024, December 30, 2023, and July 1, 2023, respectively. This presentation is net of their unamortized issuance costs and discount. Our senior secured notes are presented in this table at their face value for the purposes of calculating our net leverage ratio.

(2)

Net leverage ratio excluding finance lease obligations for real property is included within the terms of our revolving credit agreement.

The following schedule reconciles Net cash provided by operating activities to Free cash flow (non-GAAP):
	Three Months Ended								Six Months Ended
	June 29, 2024				July 1, 2023				June 29, 2024				July 1, 2023
(In thousands)
Net cash provided by operating activities	$	35,803			$	64,153			$	4,668			$	153,118
Less: Property and equipment investments		(6,454	)			(5,031	)			(11,901	)			(14,039	)
Free cash flow - non-GAAP	$	29,349			$	59,122			$	(7,233	)		$	139,079

 

View source version on businesswire.com: https://www.businesswire.com/news/home/20240730081639/en/

Tom Morabito

Investor Relations Officer

(470) 394-0099

investor@bluelinxco.com

Source: BlueLinx Holdings Inc.

FAQ

What were BlueLinx's (BXC) key financial results for Q2 2024?

BlueLinx reported net sales of $768 million, gross profit of $122 million, net income of $14 million ($1.65 diluted EPS), and Adjusted EBITDA of $34 million (4.5% of net sales) for Q2 2024.

How did BlueLinx's (BXC) specialty products segment perform in Q2 2024?

Specialty products net sales were $539 million, down 5.5% year-over-year, with gross profit of $104 million and a gross margin of 19.3%.

What was BlueLinx's (BXC) cash position at the end of Q2 2024?

BlueLinx ended Q2 2024 with $491 million in cash and cash equivalents, and total available liquidity of $838 million.

How much did BlueLinx (BXC) spend on share repurchases in Q2 2024?

BlueLinx repurchased $15 million of its common stock during Q2 2024, with $76 million remaining on its share repurchase authorization.

What is BlueLinx's (BXC) outlook for Q3 2024?

For the first four weeks of Q3 2024, BlueLinx expects specialty product gross margin of 18-19% and structural product gross margin of 8-9%, with improved average daily sales volumes compared to Q2 2024.