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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): February 20, 2024
BlueLinx Holdings Inc.
(Exact name of registrant specified in its charter)
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| 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, Georgia | 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 February 20, 2024, BlueLinx Holdings Inc. ("BlueLinx" or "the Company”) issued a press release announcing its financial results for the fiscal fourth quarter and year ended December 30, 2023. A copy of BlueLinx's press release is furnished as Exhibit 99.1 hereto.
On February 21, 2024, as previously announced, BlueLinx will hold a teleconference and audio webcast to discuss its financial results from the fiscal fourth quarter and year ended December 30, 2023. 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:
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| Exhibit No. | | Exhibit Description |
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| 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.
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| | | BlueLinx Holdings Inc. | |
| | | (Registrant) | |
| | | | |
| Dated: February 20, 2024 | By: | /s/ Andrew Wamser | |
| | | Andrew Wamser | |
| | | Senior Vice President and Chief Financial Officer | |
BlueLinx Announces Fourth Quarter and Full Year 2023 Results
ATLANTA, February 20, 2024 – BlueLinx Holdings Inc. (NYSE: BXC), a leading U.S. wholesale distributor of building products, today reported financial results for the three months and twelve months ended December 30, 2023.
FOURTH QUARTER 2023 HIGHLIGHTS
(all comparisons are versus the prior year period unless otherwise noted)
•Net sales of $713 million
•Gross profit of $118 million, gross margin of 16.6% and specialty gross margin of 19.4%
•Net loss of $18 million, or $2.08 earnings per share, primarily due to the exit of a defined benefit pension plan resulting in a one-time $30.4 million charge ($6.9 million cash) plus related income taxes
•Adjusted net income of $26 million, or $2.94 adjusted diluted earnings per share
•Adjusted EBITDA of $36 million, or 5.1% of net sales
•Operating cash generated of $76 million and free cash flow of $67 million
•Completion of $12 million in share repurchases under our share repurchase programs
FULL YEAR 2023 HIGHLIGHTS
(all comparisons are versus the prior year period unless otherwise noted)
•Net sales of $3.1 billion
•Gross profit of $527 million, gross margin of 16.8%, and specialty gross margin of 19.3%
•Net income of $49 million, or $5.39 diluted earnings per share
•Adjusted net income of $103 million, or $11.41 adjusted diluted earnings per share
•Adjusted EBITDA of $183 million, or 5.8% of net sales
•Operating cash generated of $306 million and free cash flow of $279 million
•Available liquidity of $868 million, including $522 million cash/cash equivalents on hand
•Net debt of $64 million and net leverage ratio of 0.3x
•Completion of $42 million in share repurchases, or 6% of our shares outstanding
“Our fourth quarter and full year 2023 were highlighted by strong margin performance and significant free cash flow, clearly demonstrating our ability to generate solid results and manage our working capital effectively, despite the macroeconomic and housing market uncertainties the industry continues to experience,” said Shyam Reddy, President, and CEO of BlueLinx. “Specialty products continued its strong margin performance and accounted for 70% of net sales and 80% of gross profit for the year. Structural products also performed well and continue to complement our specialty products business. With strong liquidity and minimal net debt, we are well-positioned to execute on our long-term sales growth strategy and to return capital to shareholders.”
“We were pleased with our fourth quarter specialty gross margins of 19.4% which were higher than our expected 18% to 19% range, as well as our structural gross margins which were 10.6%, and above our 9% to 10% expectation,” said Andy Wamser, Chief Financial Officer of BlueLinx. “During the fourth quarter, we returned $12 million to shareholders, bringing the total to $42 million in share repurchases under our share repurchase programs for the year, or 6% of our shares outstanding.”
FOURTH QUARTER 2023 FINANCIAL PERFORMANCE
In the fourth quarter of 2023, net sales were $713 million, a decrease of $135.2 million, or 16.0% when compared to the fourth quarter of 2022. Gross profit was $118 million, a decrease of $33 million, or 21.6%, year-over-year, and gross margin was 16.6%, down 120 basis points from the prior year period.
Net sales of specialty products, which includes products such as engineered wood, siding, millwork, outdoor living, specialty lumber and panels, and industrial products, decreased $105.0 million, or 17.7%, to $487 million. This decline was primarily due to price deflation across several product categories occurring during normalizing market conditions. Gross profit from specialty product sales was $94.5 million, a decrease of $30.1 million, or 24.2%, compared to the fourth quarter last year. Gross margin was 19.4% compared to 21.1% in the prior year period.
Net sales of structural products, which includes products such as lumber, plywood, oriented strand board, rebar, and remesh, decreased $30.3 million, or 11.8%, to $226.0 million in the fourth quarter and gross profit from sales of structural products decreased $2.6 million from $26.6 million in the prior year period. The decreases in structural sales and gross profit were due primarily to price deflation in the average composite price of framing lumber of 15%, partially offset by slightly higher volumes. Gross margin on structural product sales was 10.6% in the fourth quarter, up slightly from 10.4% in the prior year period, in part due to our continued focus on pricing discipline and inventory management.
Selling, general and administrative (“SG&A”) expenses were $84.5 million in the fourth quarter, a decrease of $7.5 million from $92.0 million for the fourth quarter of 2022. The year-over-year decrease in the dollar amount of SG&A was due primarily to decreases in variable compensation and delivery expenses.
Net loss for the current quarter was $18.1 million, or $2.08 per share, versus net income of $32.0 million, or $3.50 per diluted share, in the prior year period. The 2023 period reflects a one-time charge of $30.4 million related to the settlement of our defined benefit pension plan. We have been relieved of all responsibility for our defined benefit pension plan through the purchase of an annuity with a highly rated insurance company that will make all future benefit payments and assume all risks. Some of our union employees continue to participate in multi-employer pension plans, and those plans were not impacted. Adjusted Net Income was $25.8 million, or $2.94 per diluted share. As a result of lower shares outstanding due to the Company’s share repurchases in 2022 and 2023, adjusted earnings of $2.94 per diluted share included a $0.38 per share benefit (a non-GAAP measure).
Adjusted EBITDA was $36.5 million, or 5.1% of net sales, compared to $63.1 million, or 7.4% of net sales in the prior period.
Net cash generated from operating activities was $75.9 million in the fourth quarter of 2023 compared to $154.3 million in the prior year period. The decrease in cash generated from operating activities was driven by a decrease in net income for the current fiscal year compared to the prior fiscal year and less cash generated from changes in working capital in fiscal 2023, particularly for accounts receivable and inventory. Free cash flow was $67.3 million in the fourth quarter of 2023 compared to $137.5 million in the prior year period. We allocated $8.6 million to cash capital investments related to both distribution facilities and our fleet during the quarter.
FULL YEAR 2023 FINANCIAL PERFORMANCE
For the twelve months ended December 30, 2023, net sales were $3.1 billion, a decrease of $1.3 billion, or 29.5% year-over-year. Gross profit was $527.0 million, a decrease of $306.0 million, or 36.7% year-over-year, and gross margin was 16.8%, down 190 basis points. The decreases in sales and gross profit reflect declines of 23.9% and 39.7% in specialty product net sales and structural product net sales, respectively.
Net sales of specialty products decreased $687.4 million, or 23.9% to $2.2 billion in the twelve months ended December 30, 2023. This decrease was primarily driven by price deflation combined with lower sales volume across all product categories occurring during normalizing market conditions. Gross profit from specialty product sales was $420.8 million in the current year, a decrease of $219.6 million, or 34.3%, year-over-year and gross margin in the current year was 19.3% compared to 22.3% in the prior year. The decrease in specialty products’ gross margin percentage over the prior fiscal year was also attributable to the year-over-year price deflation and volume normalization.
Net sales of structural products decreased $626.4 million, or 39.7%, to $952.1 million in the twelve months ended December 30, 2023, and gross profit from sales of structural products decreased $86.4 million to $106.2 million. The decreases in structural products net sales and gross profit were due primarily to price deflation in the wood-based commodity markets represented by the declines in the average composite price of framing lumber and structural panels, which were down 47% and
32%, respectively, in addition to lower volumes. Gross margin on structural product sales was 11.2% compared to 12.2% for the prior year.
SG&A expenses were $355.8 million during fiscal year 2023, down $10.5 million, or 2.9%, compared to the prior year period. The year-over-year decrease in SG&A expenses was due primarily to decreases in variable compensation and delivery expenses, partially offset by $5.9 million of full-year incremental operating expenses related to our Vandermeer acquisition.
Net income was $48.5 million, or $5.39 per diluted share, versus $296.2 million, or $31.51 per diluted share in the prior year. The 2023 period reflects the aforementioned one-time charge of $30.4 million related to the settlement of our legacy defined benefit pension plan. Adjusted net income was $102.6 million and adjusted earnings diluted per share was $11.41 in the current year. As a result of lower shares outstanding due to the Company’s share repurchases in 2022 and 2023, earnings of $5.39 per diluted share included a $0.54 per share benefit (a non-GAAP Measure) and adjusted earnings of $11.41 per diluted share included a $1.15 per share benefit (a non-GAAP measure).
Adjusted EBITDA was $182.8 million, or 5.8% of net sales, compared to $477.7 million, or 10.7% of net sales in 2022.
Net cash generated from operating activities was $306.3 million for fiscal year 2023 compared to $400.3 million in fiscal year 2022. This decrease in cash provided by operating activities during fiscal 2023 was primarily a result of a decrease in net income for the current fiscal year compared to the prior fiscal year, partially offset by higher cash generated from changes in working capital in fiscal 2023, particularly for inventory.
CAPITAL ALLOCATION AND FINANCIAL POSITION
During the full year 2023, we invested $27.5 million to improve our distribution facilities and upgrade our fleet, compared to $35.9 million in 2022. In 2023 and 2022, we used $42.1 million and $66.4 million, respectively, to buy back and retire approximately 1.4 million shares of our common stock, which equates to approximately 14% of the number of our common shares that were outstanding at the beginning of fiscal 2022. Currently, we have $91.4 million remaining under our $100 million share repurchase authorization that was approved by our Board of Directors in October 2023. We plan to continue being opportunistic in the market when repurchasing shares.
As of December 30, 2023, total debt outstanding was $585 million, including $300 million of senior secured notes that mature in 2029 and $285 million of finance leases. Available liquidity was $868 million which included an undrawn revolving credit facility that had $347 million of availability plus cash and cash equivalents of $522 million. Net debt was $64 million, resulting in a net leverage ratio of 0.3x on trailing twelve-month adjusted EBITDA of $183 million. Per the terms of our credit agreement, which does not include real property financing leases, our net leverage ratio was (1.0x).
FIRST QUARTER 2024 UPDATE
Through the first seven weeks of the first quarter of 2024, specialty product gross margin was in the range of 18% to 19%, and structural product gross margin was in the range of 10% to 11%. Daily sales volumes for specialty and structural were down approximately 10% versus the prior year partially reflecting severe weather conditions in January.
CONFERENCE CALL INFORMATION
BlueLinx will host a conference call on February 21, 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 March 6, 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.
CONTACT
Tom Morabito
Investor Relations Officer
(470) 394-0099
investor@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. 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.
Our Adjusted EBITDA and Adjusted EBITDA Margin are not presentations made in accordance with GAAP and are not intended to present superior measures of our financial condition from those measures determined under GAAP. Adjusted EBITDA and Adjusted EBITDA Margin, as used herein, are not necessarily comparable to other similarly titled captions of other companies due to differences in methods of calculation. These non-GAAP measures are reconciled in the “Reconciliation of Non-GAAP Measurements” table later in this release.
Adjusted Net Income and Adjusted Earnings Per Share. 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 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 12. 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.
FORWARD-LOOKING STATEMENTS
This press release contains forward-looking statements. Forward-looking statements include, without limitation, any statement that predicts, forecasts, indicates or implies future results, performance, liquidity levels or achievements, and may contain the words “believe,” “anticipate,” “could,” “expect,” “estimate,” “intend,” “may,” “project,” “plan,” “should,” “will,” “will be,” “will likely continue,” “will likely result,” “would,” or words or phrases of similar meaning.
The forward-looking statements in this press release include statements about our confidence in the Company’s long-term growth strategy; our ability to capitalize on supplier-led price increases and our value-added services; our areas of focus and management initiatives; the demand outlook for construction materials and expectations regarding new home construction, repair and remodel activity and continued investment in existing and new homes; our positioning for long-term value creation; our efforts and ability to generate profitable growth; our ability to increase net sales in specialty product categories; our ability to generate profits and cash from sales of specialty products; our multi-year capital allocation plans; our ability to manage volatility in wood-based commodities; our improvement in execution and productivity; our efforts and ability to maintain a disciplined capital structure and capital allocation strategy; our ability to maintain a strong balance sheet; our ability to focus on operating improvement initiatives and commercial excellence; and whether or not the Company will continue any share repurchases.
Forward-looking statements in this press release are based on estimates and assumptions made by our management that, although believed by us to be reasonable, are inherently uncertain. Forward-looking statements involve risks and uncertainties that may cause our business, strategy, or actual results to differ materially from the forward-looking statements. These risks and uncertainties include those discussed in greater detail in our filings with the 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 distribute; 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 we may 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.
BLUELINX HOLDINGS INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
| | | | | | | | | | | | | | | | | | | | | | | |
| Fiscal Quarter Ended | | Fiscal Year Ended |
| | December 30, 2023 | | December 31, 2022 | | December 30, 2023 | | December 31, 2022 |
| ($ amounts in thousands, except per share amounts) |
| Net sales | $ | 712,529 | | | $ | 847,769 | | | $ | 3,136,381 | | | $ | 4,450,214 | |
| Cost of products sold | 594,100 | | | 696,620 | | | 2,609,364 | | | 3,617,230 | |
| Gross profit | 118,429 | | | 151,149 | | | 527,017 | | | 832,984 | |
| Gross margin | 16.6 | % | | 17.8 | % | | 16.8 | % | | 18.7 | % |
| Operating expenses (income): | | | | | | | |
| Selling, general, and administrative | 84,541 | | | 92,000 | | | 355,819 | | | 366,305 | |
| Depreciation and amortization | 8,285 | | | 7,661 | | | 32,043 | | | 27,613 | |
| Amortization of deferred gains on real estate | (982) | | | (983) | | | (3,934) | | | (3,934) | |
| Gain from sales of properties, net | — | | | — | | | — | | | (144) | |
| Other operating expenses | (600) | | | 1,326 | | | 4,640 | | | 4,057 | |
| Total operating expenses | 91,244 | | | 100,004 | | | 388,568 | | | 393,897 | |
| Operating income | 27,185 | | | 51,145 | | | 138,449 | | | 439,087 | |
| Non-operating expenses, net: | | | | | | | |
| Interest expense, net | 4,171 | | | 9,280 | | | 23,746 | | | 42,272 | |
| Settlement of frozen defined benefit pension plan | 30,440 | | | — | | | 30,440 | | | — | |
| Other expense, net | 595 | | | 1,138 | | | 2,377 | | | 2,054 | |
| Income before provision for income taxes | (8,021) | | | 40,727 | | | 81,886 | | | 394,761 | |
| Provision for income taxes | 10,103 | | | 8,741 | | | 33,350 | | | 98,585 | |
| Net (loss) income | $ | (18,124) | | | $ | 31,986 | | | $ | 48,536 | | | $ | 296,176 | |
| | | | | | | |
| Basic (loss) earnings per share | $ | (2.08) | | | $ | 3.53 | | | $ | 5.40 | | | $ | 31.75 | |
| Diluted (loss) earnings per share | $ | (2.08) | | | $ | 3.50 | | | $ | 5.39 | | | $ | 31.51 | |
BLUELINX HOLDINGS INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(Unaudited)
| | | | | | | | | | | |
| | December 30, 2023 | | December 31, 2022 |
| (In thousands, except share data) |
| ASSETS |
| Current assets: | | | |
| Cash and cash equivalents | $ | 521,743 | | | $ | 298,943 | |
Accounts receivable, less allowances of $3,398 and $3,449, respectively | 228,410 | | | 251,555 | |
| Inventories, net | 343,638 | | | 484,313 | |
| Other current assets | 26,608 | | | 42,121 | |
| Total current assets | 1,120,399 | | | 1,076,932 | |
| Property and equipment, at cost | 396,321 | | | 360,869 | |
| Accumulated depreciation | (170,334) | | | (155,260) | |
| Property and equipment, net | 225,987 | | | 205,609 | |
| Operating lease right-of-use assets | 37,227 | | | 45,717 | |
| Goodwill | 55,372 | | | 55,372 | |
| Intangible assets, net | 30,792 | | | 34,989 | |
| Deferred income tax asset, net | 53,256 | | | 56,169 | |
| Other non-current assets | 14,568 | | | 15,254 | |
| Total assets | $ | 1,537,601 | | | $ | 1,490,042 | |
| LIABILITIES AND STOCKHOLDERS' EQUITY |
| Current liabilities: | | | |
| Accounts payable | $ | 157,931 | | | $ | 151,626 | |
| Accrued compensation | 14,273 | | | 22,556 | |
| Taxes payable | 9,584 | | | — | |
| | | |
| Finance lease liabilities - current | 11,178 | | | 7,089 | |
| Operating lease liabilities - current | 6,284 | | | 7,432 | |
| Real estate deferred gains - current | 3,935 | | | 3,935 | |
| | | |
| Other current liabilities | 15,377 | | | 18,039 | |
| Total current liabilities | 218,562 | | | 210,677 | |
| Non-current liabilities: | | | |
Long-term debt, net of debt issuance costs of $3,246 and $4,057, respectively | 293,743 | | | 292,424 | |
| Finance lease liabilities - non-current | 274,248 | | | 265,986 | |
| Operating lease liabilities - non-current | 32,519 | | | 40,011 | |
| Real estate deferred gains - non-current | 66,599 | | | 70,403 | |
| | | |
| Other non-current liabilities | 17,644 | | | 20,512 | |
| Total liabilities | 903,315 | | | 900,013 | |
| Commitments and contingencies | | | |
| STOCKHOLDERS' EQUITY: |
| Preferred Stock, $0.01 par value, 30,000,000 shares authorized, none issued | — | | | — | |
Common Stock, $0.01 par value, 20,000,000 shares authorized, 8,650,046 and 9,048,603 outstanding on December 30, 2023 and December 31, 2022, respectively | 87 | | | 90 | |
| Additional paid-in capital | 165,060 | | | 200,748 | |
| Accumulated other comprehensive loss | — | | | (31,412) | |
| Retained earnings | 469,139 | | | 420,603 | |
| Total stockholders’ equity | 634,286 | | | 590,029 | |
| Total liabilities and stockholders’ equity | $ | 1,537,601 | | | $ | 1,490,042 | |
BLUELINX HOLDINGS INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
| | | | | | | | | | | | | | | | | | | | | | | |
| Fiscal Quarter Ended | | Fiscal Year Ended |
| December 30, 2023 | | December 31, 2022 | | December 30, 2023 | | December 31, 2022 |
| | (In thousands) |
| Cash flows from operating activities: | | | | | | | |
| Net (loss) income | $ | (18,124) | | | $ | 31,986 | | | $ | 48,536 | | | $ | 296,176 | |
| Adjustments to reconcile net (loss) income to cash provided by operations: | | | | | | | |
| | | | | | | |
| Depreciation and amortization | 8,285 | | | 7,661 | | | 32,043 | | | 27,613 | |
| Amortization of debt discount and issuance costs | 330 | | | 330 | | | 1,319 | | | 1,153 | |
| Settlement of frozen defined benefit pension plan | 30,440 | | | — | | | 30,440 | | | — | |
| Gains from sales of property | — | | | — | | | — | | | (144) | |
| Amortization of deferred gains from real estate | (982) | | | (983) | | | (3,934) | | | (3,934) | |
| Share-based compensation | 2,580 | | | 3,588 | | | 12,055 | | | 9,617 | |
| Provision for deferred income taxes | 6,639 | | | 6,228 | | | 7,756 | | | 5,289 | |
| Other income statement items | (909) | | | — | | | (909) | | | — | |
| Changes in operating assets and liabilities, net of business acquisition: | | | | | | | |
| Accounts receivable | 69,158 | | | 122,164 | | | 23,145 | | | 101,266 | |
| Inventories | 20,724 | | | 68,280 | | | 140,875 | | | 20,759 | |
| Accounts payable | (43,818) | | | (60,005) | | | 5,973 | | | (31,808) | |
| Taxes payable | 9,584 | | | (6,750) | | | 9,584 | | | (6,138) | |
| Employer contributions due to the single-employer defined benefit pension plan | (6,900) | | | (11,198) | | | (6,900) | | | (11,876) | |
| Other current assets | 12,892 | | | (11,195) | | | 15,513 | | | (11,635) | |
| Other assets and liabilities | (14,038) | | | 4,155 | | | (9,211) | | | 3,959 | |
| Net cash provided by operating activities | 75,861 | | | 154,261 | | | 306,285 | | | 400,297 | |
| | | | | | | |
| Cash flows from investing activities: | | | | | | | |
| Acquisition of business, net of cash acquired | — | | | (63,767) | | | 300 | | | (63,767) | |
| Proceeds from sales of assets and properties | 166 | | | 316 | | | 357 | | | 964 | |
| Property and equipment investments | (8,582) | | | (16,807) | | | (27,520) | | | (35,886) | |
| | | | | | | |
| Net cash used in investing activities | (8,416) | | | (80,258) | | | (26,863) | | | (98,689) | |
| | | | | | | |
| Cash flows from financing activities: | | | | | | | |
| | | | | | | |
| | | | | | | |
| | | | | | | |
| | | | | | | |
| | | | | | | |
| | | | | | | |
| Common stock repurchases | (12,814) | | | — | | | (42,135) | | | (66,427) | |
| | | | | | | |
| Repurchase of shares to satisfy employee tax withholdings | (122) | | | (746) | | | (5,279) | | | (10,534) | |
| Principal payments on finance lease liabilities | (2,549) | | | (3,678) | | | (9,208) | | | (10,907) | |
| | | | | | | |
| Net cash used in financing activities | (15,485) | | | (4,424) | | | (56,622) | | | (87,868) | |
| Net change in cash and cash equivalents | 51,960 | | | 69,579 | | | 222,800 | | | 213,740 | |
| Cash and cash equivalents at beginning of period | 469,783 | | | 229,364 | | | 298,943 | | | 85,203 | |
| Cash and cash equivalents at end of period | $ | 521,743 | | | $ | 298,943 | | | $ | 521,743 | | | $ | 298,943 | |
BLUELINX HOLDINGS INC.
RECONCILIATION OF NON-GAAP MEASUREMENTS
(Unaudited)
The following table reconciles net income to Adjusted EBITDA:
| | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Fiscal Quarter Ended | | Fiscal Year Ended | | |
| December 30, 2023 | | December 31, 2022 | | December 30, 2023 | | December 31, 2022 | | | | |
| (In thousands) |
| Net (loss) income | $ | (18,124) | | | $ | 31,986 | | | $ | 48,536 | | | $ | 296,176 | | | | | |
| Adjustments: | | | | | | | | | | | |
| Depreciation and amortization | 8,285 | | | 7,661 | | | 32,043 | | | 27,613 | | | | | |
| Interest expense, net | 4,171 | | | 9,280 | | | 23,746 | | | 42,272 | | | | | |
| | | | | | | | | | | |
| Provision for income taxes | 10,103 | | | 8,741 | | | 33,350 | | | 98,585 | | | | | |
| Share-based compensation expense | 2,580 | | | 3,588 | | | 12,055 | | | 9,617 | | | | | |
| Amortization of deferred gains on real estate | (982) | | | (983) | | | (3,934) | | | (3,934) | | | | | |
Gains from sales of property(1) | — | | | — | | | — | | | (144) | | | | | |
Pension settlement and withdrawal costs(1) | 31,034 | | | — | | | 32,817 | | | — | | | | | |
Acquisition-related costs(1)(2) | 186 | | | 1,022 | | | 278 | | | 1,255 | | | | | |
Restructuring and other(1)(3) | (784) | | | 1,804 | | | 3,913 | | | 6,302 | | | | | |
| Adjusted EBITDA | $ | 36,469 | | | $ | 63,099 | | | $ | 182,804 | | | $ | 477,742 | | | | | |
| | | | | | | | | | | |
(1) Reflects non-recurring items of approximately $30.4 million in beneficial items to the current quarterly period and approximately $2.8 million in non-beneficial items to the prior quarterly period. For the current fiscal year period, reflects non-recurring, beneficial items of approximately $37.0 million and the prior fiscal year period reflects $7.4 million of non-recurring, beneficial items.
(2) Reflects primarily legal, professional, technology and other integration costs.
(3) Reflects costs related to our restructuring efforts, such as severance, net of other one-time non-operating items.
The following table reconciles basic (loss) earnings per share and diluted (loss) earnings per share to non-GAAP adjusted basic earnings per share and non-GAAP adjusted diluted earnings per share:
| | | | | | | | | | | | | | | | | | | | | | | |
| Fiscal Quarter Ended | | Fiscal Year Ended |
| December 30, 2023 | | December 31, 2022 | | December 30, 2023 | | December 31, 2022 |
| (In thousands, except per share amounts) |
| Net (loss) income | $ | (18,124) | | | $ | 31,986 | | | $ | 48,536 | | | $ | 296,176 | |
| Adjustments: | | | | | | | |
| Share-based compensation expense | 2,580 | | | 3,588 | | | 12,055 | | | 9,617 | |
| Amortization of deferred gains on real estate | (982) | | | (983) | | | (3,934) | | | (3,934) | |
| Gain from sales of property | — | | | — | | | — | | | (144) | |
Pension settlement and withdrawal costs(1) | 31,034 | | | — | | | 32,817 | | | — | |
| Acquisition-related costs | 186 | | | 1,022 | | | 278 | | | 1,255 | |
| Restructuring and other | (784) | | | 1,804 | | | 3,913 | | | 6,302 | |
Tax impacts of reconciling items above (1) | 11,891 | | | (1,168) | | | 8,962 | | | (3,274) | |
| Adjusted net income (non-GAAP) | $ | 25,801 | | | $ | 36,249 | | | $ | 102,627 | | | $ | 305,998 | |
| | | | | | | |
| Basic (loss) earnings per share | $ | (2.08) | | | $ | 3.53 | | | $ | 5.40 | | | $ | 31.75 | |
| Diluted (loss) earnings per share | $ | (2.08) | | | $ | 3.50 | | | $ | 5.39 | | | $ | 31.51 | |
| | | | | | | |
| Weighted average shares outstanding - Basic | 8,704 | | | 9,036 | | | 8,987 | | | 9,328 | |
| Weighted average shares outstanding - Diluted | 8,757 | | | 9,128 | | | 8,994 | | | 9,398 | |
| | | | | | | |
| Adjusted basic EPS (non-GAAP) | $ | 2.96 | | | $ | 4.01 | | | $ | 11.41 | | | $ | 32.80 | |
| Adjusted diluted EPS (non-GAAP) | $ | 2.94 | | | $ | 3.97 | | | $ | 11.41 | | | $ | 32.55 | |
| | | | | | | |
(1) Tax impact calculated based on the effective tax rate for the respective fiscal quarterly periods and fiscal year periods presented. The fiscal quarter and fiscal year ended December 30, 2023 exclude the non-cash tax effects for the one-time charge for settlement of the frozen defined benefit pension plan.
The following table presents our Adjusted EBITDA margin (non-GAAP) as a percentage of net sales:
| | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Fiscal Quarter Ended | | Fiscal Year Ended | | |
| December 30, 2023 | | December 31, 2022 | | December 30, 2023 | | December 31, 2022 | | | | |
| ($ amounts in thousands) |
| Net sales | $ | 712,529 | | | $ | 847,769 | | | $ | 3,136,381 | | | $ | 4,450,214 | | | | | |
| Adjusted EBITDA (non-GAAP) | 36,469 | | | 63,099 | | | 182,804 | | | 477,742 | | | | | |
| Adjusted EBITDA margin (non-GAAP) | 5.1 | % | | 7.4 | % | | 5.8 | % | | 10.7 | % | | | | |
The following table presents our Net sales disaggregated by specialty products and structural products.
| | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Fiscal Quarter Ended | | Fiscal Year Ended | | |
| December 30, 2023 | | December 31, 2022 | | December 30, 2023 | | December 31, 2022 | | | | |
| ($ amounts in thousands) |
| Net sales by product category | | | | | | | | | | | |
| Specialty products | $ | 486,561 | | | $ | 591,538 | | | $ | 2,184,240 | | | $ | 2,871,628 | | | | | |
| Structural products | 225,968 | | | 256,231 | | | 952,141 | | | 1,578,586 | | | | | |
| Total net sales | $ | 712,529 | | | $ | 847,769 | | | $ | 3,136,381 | | | $ | 4,450,214 | | | | | |
| | | | | | | | | | | |
| Gross profit by product category | | | | | | | | | | | |
| Specialty products | $ | 94,466 | | | $ | 124,589 | | | $ | 420,794 | | | $ | 640,370 | | | | | |
| Structural products | 23,963 | | | 26,560 | | | 106,223 | | | 192,614 | | | | | |
| Total gross profit | $ | 118,429 | | | $ | 151,149 | | | $ | 527,017 | | | $ | 832,984 | | | | | |
| | | | | | | | | | | |
| Gross margin % by product category | | | | | | | | | | | |
| Specialty products | 19.4 | % | | 21.1 | % | | 19.3 | % | | 22.3 | % | | | | |
| Structural products | 10.6 | % | | 10.4 | % | | 11.2 | % | | 12.2 | % | | | | |
| Total gross margin % | 16.6 | % | | 17.8 | % | | 16.8 | % | | 18.7 | % | | | | |
| | | | | | | | | | | |
The following table presents Net Debt, Net Debt excluding real property finance lease liabilities, Net Leverage Ratio, and Net Leverage Ratio excluding real property finance lease liabilities, for the fiscal year indicated:
| | | | | | | | | | | |
| Fiscal Year Ended |
| December 30, 2023 | | December 31, 2022 |
| ($ amounts in thousands) |
| | | |
Long term debt (1) | $ | 300,000 | | | $ | 300,000 | |
| Finance lease liabilities for equipment and vehicles | 42,252 | | | 29,300 | |
| Finance lease liabilities for real property | 243,174 | | | 243,775 | |
| Total debt | 585,426 | | | 573,075 | |
| Less: available cash and cash equivalents | 521,743 | | | 298,943 | |
| Net Debt (total debt and all finance leases, excluding cash) | $ | 63,683 | | | $ | 274,132 | |
| | | |
| Net Debt, excluding liabilities for finance leases for real property | $ | (179,491) | | | $ | 30,357 | |
| | | |
| Twelve-Month Trailing Adjusted EBITDA (non-GAAP, see above reconciliation) | $ | 182,804 | | | $ | 477,742 | |
| | | |
| Net Leverage Ratio | 0.3x | | 0.6x |
| Net Leverage Ratio Excluding Real Property Finance Lease Liabilities | -1.0x | | 0.1x |
(1) For the period ended December 30, 2023, our long-term debt is comprised of $300.0 million of senior-secured notes issued in October 2021. These notes are presented under the long-term debt caption of our balance sheet at $293.7 million which is net of their discount of $3.0 million and the combined carrying value of our debt issuance costs of $3.2 million. For the period ended December 31, 2022, our long-term debt presented in this table is the balance presented on our balance sheet of $292.4 million, which is net of their discount of $3.5 million and the combined carrying value of our debt issuance costs of $4.1 million. Our senior secured notes are presented in this table at their face value for the purposes of calculating our net leverage ratio.
The following table presents free cash flow:
| | | | | | | | | | | | | | | | | | | | | | | |
| Fiscal Quarter Ended | | Fiscal Year Ended |
| December 30, 2023 | | December 31, 2022 | | December 30, 2023 | | December 31, 2022 |
| (In thousands) |
| Net cash provided by operating activities | $ | 75,861 | | | $ | 154,261 | | | $ | 306,285 | | | $ | 400,297 | |
| Less: property and equipment investments | (8,582) | | | (16,807) | | | (27,520) | | | (35,886) | |
| Free cash flow | $ | 67,279 | | | $ | 137,454 | | | $ | 278,765 | | | $ | 364,411 | |
| | | | | | | |
The following table presents the calculations for the incremental effects on earnings (loss) per share caused by our share buybacks that were made in fiscal 2023 and fiscal 2022:
| | | | | | | | | | | |
| Fiscal Quarter Ended | | Fiscal Year Ended |
| December 30, 2023 |
| (In thousands, except per share amounts) |
| | | |
| Weighted average shares outstanding - Basic | 8,704 | | | 8,987 | |
| Effect of share buybacks in fiscal 2022 | 882 | | 503 |
| Effect of share buybacks in fiscal 2023 | 451 | | 509 |
| Weighted-average shares outstanding, with no buybacks (non-GAAP) | 10,037 | | | 9,999 | |
| | | |
| Dilutive effect of share-based awards | 53 | | | 7 | |
| | | |
| | | |
| | | |
| Weighted-average diluted shares, with no buybacks (non-GAAP) | 10,090 | | 10,006 |
| | | |
| Net (loss) income | $ | (18,124) | | | $ | 48,536 | |
| Basic (loss) earnings per share | $ | (2.08) | | | $ | 5.40 | |
| Diluted (loss) earnings per share | $ | (2.08) | | | $ | 5.39 | |
| | | |
| Basic (loss) earnings per share, with no buybacks (non-GAAP) | $ | (1.80) | | | $ | 4.85 | |
| Diluted (loss) earnings per share, with no buybacks (non-GAAP) | $ | (1.80) | | | $ | 4.85 | |
| Incremental EPS per share effect of share buybacks completed in fiscal 2023 and fiscal 2022 (non-GAAP) | $ | (0.28) | | | $ | 0.54 | |
| | | |
| Adjusted net income (non-GAAP) | $ | 25,801 | | | $ | 102,627 | |
| Adjusted diluted earnings per share (non-GAAP) | $ | 2.94 | | | $ | 11.41 | |
| Adjusted diluted earnings per share, with no buybacks (non-GAAP) | $ | 2.56 | | | $ | 10.26 | |
| Incremental EPS per share effect of share buybacks completed in fiscal 2023 and fiscal 2022 (non-GAAP) | $ | 0.38 | | | $ | 1.15 | |
BlueLinx Q4 and Full Year 2023 Results Delivering What Matters February 21, 2024 © BlueLinx 2024. All Rights Reserved. 1 EXHIBIT 99.2
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,” “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 presentation include statements about our confidence in the Company’s long-term growth strategy; our ability to capitalize on supplier-led price increases and our value-added services; our areas of focus and management initiatives; the demand outlook for construction materials and expectations regarding new home construction, repair and remodel activity and continued investment in existing and new homes; our positioning for long-term value creation; our efforts and ability to generate profitable growth; our ability to increase net sales in specialty product categories; our ability to generate profits and cash from sales of specialty products; our multi-year capital allocation plans; our ability to manage volatility in wood-based commodities; our improvement in execution and productivity; our efforts and ability to maintain a disciplined capital structure and capital allocation strategy; our ability to maintain a strong balance sheet; our ability to focus on operating improvement initiatives and commercial excellence; and whether or not the Company will continue any share repurchases. Forward-looking statements in this 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 distribute; 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 we may 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. 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. 2 Safe Harbor Statement
Opening Remarks 3 Shyam Reddy President & CEO
4 BlueLinx: Delivering What Matters BLUELINX STRATEGIC PRIORITIES
5 ▪ Net sales of $3.1B / down 29.5% year-over-year ▪ Adjusted EBITDA of $183M ▪ Operating Cash Flow of $306M, Free Cash Flow of $279M ▪ Q4 2023 Adjusted EBITDA of $36M ▪ Generated operating cash of $76M ▪ Specialty product sales comprised 70% of sales and 80% of gross profit in Q4 2023 ▪ Invested $28M in capital expenditures during the year ▪ Repurchased 6% of outstanding shares for $42M in 2023 ▪ Announced new $100M share repurchase program after prior authorization was completed ▪ 0.3x net leverage at the end of Q4 2023 ▪ Per terms of credit agreement(1) net leverage of (1.0x) ▪ $868M of liquidity – including $522M of cash/cash equivalents q Delivered strong full year 2022 results q Solid Q4 results highlighted by record cash generation q Remain focused on specialty product growth q Executed strategic capital allocation actions q Further strengthened our financial position DELIVERING WHAT MATTERS ü Delivered solid full year 2023 results given the challenging environment ü Solid Q4 results highlighted by strong cash generation ü Remain focused on specialty product sales growth ü Executed strategic capital allocation actions ü Further strengthened our financial position ü Note: see appendix for reconciliations to all non-GAAP measures (1) Does not include real property financing leases
n Net sales of $3.1B, down 29.5% year-over-year q Prior year included benefit from elevated demand and higher commodity prices n Gross profit of $527M, down 36.7% year-over-year q 16.8% of net sales q 80% of gross profit from specialty products n Gross margin of 16.8%, down 190 bps year-over-year q 19.3% specialty gross margin q 11.2% structural gross margin n Net income of $49M and Diluted EPS of $5.39 n Adjusted net income of $103M and Adjusted Diluted EPS of $11.41 n Adjusted EBITDA of $183M, or 5.8% of sales n Generated operating cash of $306M q Free cash flow of $279M q Net leverage ratio of 0.3x q Net leverage per terms of credit agreement of (1.0x) Note: see appendix for reconciliations to all non-GAAP measures Explosive profitable growth with a highly engaged team 6 FULL YEAR 2023 RESULTS FY 23 Sales by Product Category Specialty Products 70% Structural Products 30% FY 23 Gross Profit by Product Category Specialty Products 80% Structural Products 20%
n Home affordability remains challenging q Mortgage rates improving, but still elevated q Home price appreciation q Low housing inventory n New home starts trends improving q Single-family housing starts were down in 2023, but improved in Q4 q Builder's confidence rose to 48, up 6 points from February 2023 and up 4 points from January 2024, though still below 20-year average (1) n Repair and remodel market expected to decline in 2024(2) q Record home equity levels q Remote work flexibility q Average age of existing homes 41 years old(3) Note: Management’s estimate by end market for two-step distribution of building materials (1) 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 (2) 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. (3) Source: U.S. Census American Housing Survey completed in 2021 7 U.S. HOUSING INDUSTRY BLUELINX SALES BY END MARKET Repair & Remodel 45% New Home Construction 40% Commercial 15%
Financial Review 8 Andy Wamser Chief Financial Officer
n Net Sales decreased 16.0% to $713M q Specialty product sales down 18% q Structural product sales down 12% n Gross Margin of 16.6%, down 120 bps n Adjusted Diluted EPS of $2.94 n Adjusted EBITDA of $36M q Adjusted EBITDA margin of 5.1% n Free Cash Flow of $67M q Cash Flow from Operations $76M q Capital Expenditures of $9M 9 FOURTH QUARTER 2023 RESULTS Note: All comparisons versus the prior-year period unless otherwise noted; see Appendix for reconciliations for all non-GAAP figures Q4 Commentary $ millions, except per share data Q4 2023 Q4 2022 Variance Net Sales $713 $848 (16)% Gross Profit $118 $151 (22)%) Gross Margin % 16.6% 17.8% 120 bps Adjusted Net Income $26 $36 (28)% Adjusted Diluted EPS $2.94 $3.97 (26)% Adjusted EBITDA $36 $63 (43)% Adjusted EBITDA % 5.1% 7.4% -230 bps Free Cash Flow $67 $137 (51)% Net Leverage 0.3x 0.6x -0.3x Net Leverage per Credit Agreement (1.0x) 0.1x (1.1x)
($ millions) n Net sales of $487M, down 18% q Driven mainly by deflation q Specialty is approximately 70% of total net sales n Gross profit of $94M, down 24% q Specialty gross profit 80% of total gross profit n Gross margin of 19.4%, down 170 bps q Above expectation of 18% to 19% Q4 Commentary 10 SPECIALTY PRODUCTS Q4 2023 RESULTS $641 $768 $788 $724 $592 $568 $571 $559 $487 21.9% 24.0% 22.9% 20.9% 21.1% 18.8% 19.1% 19.8% 19.4% Net Sales GM Rate 4Q21 1Q22 2Q22 3Q22 4Q22 1Q23 2Q23 3Q23 4Q23
($ millions) n Net sales of $226M, down 12% q Driven mainly by deflation q Year-over-year average pricing for commodities was mixed: Ÿ 15% decrease in average price of lumber Ÿ 11% increase in average price of panels n Gross profit of $24M, down 10% q Structural gross profit 20% of total gross profit n Gross margin of 10.6%, up 20 bps q Above expectation of 9% to 10% Q4 Commentary 11 STRUCTURAL PRODUCTS Q4 2023 RESULTS $331 $534 $452 $336 $256 $230 $245 $251 $22616.1% 20.0% 4.7% 11.3% 10.4% 11.7% 11.0% 11.3% 10.6% Net Sales GM Rate 4Q21 1Q22 2Q22 3Q22 4Q22 1Q23 2Q23 3Q23 4Q23
n Net Sales decreased 30% to $3.1B q Specialty product sales down 24% q Structural product sales down 40% n Gross Margin of 16.8%, down 190 bps n Adjusted Diluted EPS of $11.41 n Adjusted EBITDA of $183M q Adjusted EBITDA margin of 5.8% n Free Cash Flow of $279M q Cash Flow from Operations $306M q Capital Expenditures of $28M 12 FULL YEAR 2023 RESULTS Note: All comparisons versus the prior-year period unless otherwise noted; see Appendix for reconciliations for all non-GAAP figures FY 23 Commentary $ millions, except per share data FY 2023 FY 2022 Variance Net Sales ($ billions) $3.1 $4.5 (30)% Gross Profit $527 $833 (37)% Gross Margin % 16.8% 18.7% 190 bps Adjusted Net Income $103 $306 (66)% Adjusted Diluted EPS $11.41 $32.55 (65)% Adjusted EBITDA $183 $478 (62)% Adjusted EBITDA % 5.8% 10.7% -490 bps Free Cash Flow $279 $364 (24)% Net Leverage 0.3x 0.6x -0.3x Net Leverage per Credit Agreement (1.0x) 0.1x (1.1x)
* $350 million revolver less $4 million of reserves and letters of credit; $346 million of net availability Note: see appendix for reconciliations to all non-GAAP measures n At the end of Q4 2023: § Net leverage of 0.3x § Net leverage of (1.0x) per terms of our credit agreement, which does not include real property financing leases § Net debt at $64M § Cash/Cash Equivalents on hand of $522M § Total available liquidity of $868M n No material outstanding debt maturities until 2029 ($ millions) undrawn revolver Debt Maturity Schedule Note: debt maturity schedule does not include finance lease obligations Net Leverage 13 BALANCE SHEET $300 $275 $273 $285 $300 $300 $300 $575 $573 $585 Finance Leases Senior Notes Q4 2021 Q4 2022 Q4 2023 1.1 0.6 0.3 0.5 0.1 (1.0) Net Leverage Net Leverage per Credit Agreement Q4 2021 Q4 2022 Q4 2023 Gross Debt Structure
FY 23 Free Cash Flow Walk $ in millions Net Working Capital Management(1) $ in millions Note: See Appendix for reconciliations for all non-GAAP figures (1) Net working capital includes accounts receivable, inventory, and accounts payable; Return on Working Capital is calculated by dividing trailing twelve month (TTM) Adjusted EBITDA by Operating working capital as of the end of the period presented or discussed 14 WORKING CAPITAL AND FREE CASH FLOW $648 $830 $761 $688 $584 $531 $484 $459 $414 Total Net Working Capital Return on Working Capital 4Q 21 1Q 22 2Q 22 3Q 22 4Q 22 1Q 23 2Q 23 3Q 23 4Q 23 $200 $300 $400 $500 $600 $700 $800 $900 —% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%
INVEST IN THE BUSINESS STRATEGIC ACQUISITIONS SHARE REPURCHASES OPERATING CASH FLOW GUIDING PRINCIPLES n Maintain strong balance sheet and financial stability n Long-term net leverage could increase to at or around 2.0x when considering growth n Invest in business through fluctuating economic cycles n Acquisitions aligned to strategy n Opportunistic share repurchases FREE CASH FLOW RETURN TO SHAREHOLDERSGROWTH AND MARGIN EXPANSION 15 CAPITAL ALLOCATION FRAMEWORK
Q&A 16
Appendix 17
20-year average (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: 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. (3) Source: Historical data is Freddie Mac; Forecast: John Burns Real Estate Consulting, LLC subject limitations and disclaimers – not for redistribution. Mortgage rates expected to remain above 20-year average Starts expected to be around 20-year average and well above 2009-2011 levels 18 MACRO TRENDS Remodeling spend expected to slow in 2024 20-year average 20 00 20 01 20 02 20 03 20 04 20 05 20 06 20 07 20 08 20 09 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 20 23 20 24 E 20 25 E 20 26 E — 200 400 600 800 1,000 1,200 1,400 1,600 1,800 2,000 Total U.S. Single Family Housing Starts (SFHS) Housing starts in thousands(1) 20 00 20 01 20 02 20 03 20 04 20 05 20 06 20 07 20 08 20 09 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 20 23 20 24 $0 $50 $100 $150 $200 $250 $300 $350 $400 $450 $500 LIRA Remodeling Activity Index TTM Moving Total - Dollars in billions(2) 20 00 20 01 20 02 20 03 20 04 20 05 20 06 20 07 20 08 20 09 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 20 23 20 24 P 20 25 P 20 26 P 20 27 P —% 1.0% 2.0% 3.0% 4.0% 5.0% 6.0% 7.0% 8.0% 9.0% 30 Year Fixed Mortgage Rates As of February 2024(3)
Average Q4 23 lumber prices declined 15% year- over-year and decreased 12% from Q3 23 (1) Source: Random Lengths and company analysis 19 WOOD-BASED COMMODITY PRICE TRENDS Average Q4 23 panel prices increased 10% year-over-year and decreased 8% from Q3 23 484 540 467 347 357 344 357 368 400 411 762 687 987 1,243 466 702 1,244 797 587 449 413 408 437 383 20 18 Q 1 20 18 Q 2 20 18 Q 3 20 18 Q 4 20 19 Q 1 20 19 Q 2 20 19 Q 3 20 19 Q 4 20 20 Q 1 20 20 Q 2 20 20 Q 3 20 20 Q 4 20 21 Q 1 20 21 Q 2 20 21 Q 3 20 21 Q 4 20 22 Q 1 20 22 Q 2 20 22 Q 3 20 22 Q 4 20 23 Q 1 20 23 Q 2 20 23 Q 3 20 23 Q 4 — 200 400 600 800 1,000 1,200 1,400 503 549 483 389 373 350 337 343 387 401 682 713 1,003 1,566 766 715 1,232 874 671 528 499 532 636 585 20 18 Q 1 20 18 Q 2 20 18 Q 3 20 18 Q 4 20 19 Q 1 20 19 Q 2 20 19 Q 3 20 19 Q 4 20 20 Q 1 20 20 Q 2 20 20 Q 3 20 20 Q 4 20 21 Q 1 20 21 Q 2 20 21 Q 3 20 21 Q 4 20 22 Q 1 20 22 Q 2 20 22 Q 3 20 22 Q 4 20 23 Q 1 20 23 Q 2 20 23 Q 3 20 23 Q 4 — 200 400 600 800 1,000 1,200 1,400 1,600 1,800 Framing Lumber Composite Index $/mbf, Quarterly Average Price(1) As of December 2023 Structural Panel Composite Index $/msf, Quarterly Average Price(1) As of December 2023
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 presentation. The Company cautions that non-GAAP measures 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. Non-GAAP measures should be considered in addition to, but not as a substitute for, the Company’s reported GAAP results. The Company further cautions that its non-GAAP measures, as used herein, are not necessarily comparable to other similarly titled measures of other companies due to differences in methods of calculation. Adjusted EBITDA and Adjusted EBITDA Margin. 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. 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. 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 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 12. 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. 20 Non-GAAP Measures and Supplemental Financial Information
Net sales, gross profit dollars, gross profit percentages, sales mix, and gross profit mix by product category by fiscal quarter, Q4 2020 – Q42023 In millions where dollars are presented 21 Supplementary Financial Information Quarter Ended December 2023 September 2023 June 2023 March 2023 December 2022 September 2022 June 2022 March 2022 December 2021 September 2021 June 2021 March 2021 December 2020 Net sales by category Specialty products $ 487 $ 559 $ 571 $ 568 $ 592 $ 724 $ 788 $ 768 $ 641 $ 641 $ 675 $ 563 $ 499 Structural products 226 251 245 230 256 336 452 534 331 330 633 462 367 Net sales $ 713 $ 810 $ 816 $ 798 $ 848 $ 1,061 $ 1,239 $ 1,302 $ 973 $ 971 $ 1,308 $ 1,025 $ 865 Net sales mix by category Specialty products 68 % 69 % 70 % 71 % 70 % 68 % 64 % 59 % 66 % 66 % 52 % 55 % 58 % Structural products 32 % 31 % 30 % 29 % 30 % 32 % 36 % 41 % 34 % 34 % 48 % 45 % 42 % Net sales 100 % 100 % 100 % 100 % 100 % 100 % 100 % 100 % 100 % 100 % 100 % 100 % 100 % Gross profit $ by category Specialty products $ 95 $ 111 $ 109 $ 107 $ 125 $ 151 $ 180 $ 184 $ 140 $ 148 $ 165 $ 109 $ 87 Structural products 24 28 27 27 27 38 21 107 53 6 86 72 38 Gross profit $ 119 $ 139 $ 136 $ 134 $ 151 $ 189 $ 201 $ 291 $ 194 $ 153 $ 251 $ 180 $ 124 Gross margin percentage by categorySpecialty products 19 % 20 % 19 % 19 % 21 % 21 % 23 % 24 % 22 % 23 % 24 % 19 % 17 % Structural products 11 % 11 % 11 % 12 % 10 % 11 % 5 % 20 % 16 % 2 % 14 % 16 % 10 % Total gross margin % 17 % 17 % 17 % 17 % 18 % 18 % 16 % 22 % 20 % 16 % 19 % 18 % 14 % Gross profit mix by category Specialty products 80 % 80 % 80 % 80 % 82 % 80 % 89 % 63 % 72 % 96 % 66 % 60 % 70 % Structural products 20 % 20 % 20 % 20 % 18 % 20 % 11 % 37 % 28 % 4 % 34 % 40 % 30 % Gross profit 100 % 100 % 100 % 100 % 100 % 100 % 100 % 100 % 100 % 100 % 100 % 100 % 100 %
Adjusted EBITDA reconciliation by fiscal quarter, Q4 2020 – Q4 2023 In millions where dollars are presented 22 Non-GAAP Reconciliation / supplementary financial information (1) Reflects costs related to our restructuring efforts, such as severance, net of other one-time non-operating items. For the purposes of this presentation, items may be collapsed into this or other categories where they were presented separately in other presentations such as our press release. Items which may be collapsed include, but are not limited to, pension settlement and withdrawal costs and inventory step-up adjustments, among others. Note: Figures are rounded in this presentation to align with figures as presented in the deck. As a result, the rounded figures in this presentation may not agree to presentation in other formats we have published such as earnings releases, earnings decks, or other similar materials presented elsewhere. Quarter Ended December 2023 December 2022 December 2021 December 2020 Net income (loss) $ (18) $ 32 $ 74 $ 20 Adjustments: Depreciation and amortization 8 7 7 7 Interest expense, net 4 9 10 11 Adjustment to debt issuance cost associated with term loan/ revolver(1) — — 1 — Provision for (benefit from) income taxes 10 9 25 — Share-based compensation expense 3 4 2 2 Amortization of deferred gain on real estate (1) (1) (1) (1) Gain from sales of property — — (7) (1) Pension termination and related expenses(1) 31 — — Acquisition-related costs(1)(2) — 1 — — Restructuring and other (1) (1) 2 1 1 Adjusted EBITDA $ 36 $ 63 $ 112 $ 39 Net Sales $ 713 $ 848 $ 973 865 Adjusted EBITDA 36 63 112 39 Adjusted EBITDA Margin 5.1 % 7.4 % 11.5 % 4.5 %
Free cash flow for the three months ended Q4 2023, Q4 2022, Q4 2021, and Q4 2020 In millions where dollars are presented 23 Non-GAAP Reconciliation / supplementary financial information Three Months Ended December 2023 December 2022 December 2021 December 2020 Net cash provided by operating activities $ 76 $ 154 $ 18 $ (19) Less: Property and equipment investments (9) (17) (9) (2) Free cash flow $ 67 $ 137 $ 9 $ (21)
Working capital by fiscal quarter, Q4 2021 – Q4 2023 In millions where dollars are presented 24 Supplementary Financial Information Period Ended December 2023 September 2023 June 2023 March 2023 December 2022 September 2022 June 2022 March 2022 December 2021 Current assets: Receivables, less allowance for doubtful accounts $ 228 $ 298 $ 294 $ 299 $ 252 $ 360 $ 423 $ 497 $ 340 Inventories, net 344 364 379 409 484 536 578 563 488 572 662 674 708 736 896 1001 1060 828 Current liabilities: Accounts payable 158 202 190 177 152 208 240 230 180 158 202 190 177 152 208 240 230 180 Operating working capital $ 414 $ 460 $ 484 $ 531 $ 584 $ 688 $ 761 $ 830 $ 648 Note: Figures are rounded up in this presentation to align with figures as presented in the deck. As a result, the rounded figures in this presentation may not agree to presentation in other formats we've published such as earnings news releases, earnings decks, or other similar materials presented elsewhere. For more information, please see our public filings for the periods presented.
Net leverage ratio for the trailing twelve months ended Q4 2023 with accompanying Adjusted EBITDA reconciliation In millions where dollars are presented 25 Non-GAAP Reconciliation / supplementary financial information For the Trailing Twelve Month Period December 2023 (in millions) Finance lease liabilities - short term $ 11 Long term debt 300 Finance lease liabilities - long term 274 Total long-term debt 585 Less: available cash/cash equivalents 522 Net Debt $ 64 Trailing twelve month Adjusted EBITDA $ 183 Net Leverage Ratio 0.3x For the Trailing Twelve Month Period December 2023 (in millions) Net income (loss) $ 49 Adjustments: Depreciation and amortization 32 Interest expense, net 24 Provision for income taxes 33 Share-based compensation expense 12 Amortization of deferred gain on real estate (4) Pension settlement and withdrawal costs 33 Restructuring and other 4 Adjusted EBITDA $ 183
Net leverage ratio for the trailing twelve months ended Q4 2022 with accompanying Adjusted EBITDA reconciliation In millions where dollars are presented 26 Non-GAAP Reconciliation / supplementary financial information For the Trailing Twelve Month Period December 2022 (in millions) Finance lease liabilities - short term $ 7 Long term debt 300 Finance lease liabilities - long term 266 Total long-term debt 573 Less: available cash/cash equivalents 299 Net Debt $ 274 Trailing twelve month Adjusted EBITDA $ 478 Net Leverage Ratio 0.6x For the Trailing Twelve Month Period December 2022 (in millions) Net income (loss) $ 296 Adjustments: Depreciation and amortization 28 Interest expense, net 42 Provision for income taxes 99 Share-based compensation expense 10 Amortization of deferred gain on real estate (4) Merger and acquisition costs 1 Restructuring and other 6 Adjusted EBITDA $ 478
Net leverage ratio for the trailing twelve months ended Q4 2021 with accompanying Adjusted EBITDA reconciliation In millions where dollars are presented 27 Non-GAAP Reconciliation / supplementary financial information For the Trailing Twelve Month Period December 2021 (in millions) Finance lease liabilities - short term $ 8 Long term debt 300 Finance lease liabilities - long term 267 Total long-term debt 575 Less: available cash/cash equivalents 85 Net Debt $ 490 Trailing twelve month Adjusted EBITDA $ 464 Net Leverage Ratio 1.1x For the Trailing Twelve Month Period December 2021 (in millions) Net income (loss) $ 296 Adjustments: Depreciation and amortization 28 Interest expense, net 38 Adjustment to debt issuance cost associated with term loan/revolver 7 Provision for income taxes 98 Share-based compensation expense 7 Amortization of deferred gain on real estate (4) Gain from sales of property (8) Restructuring and other 2 Adjusted EBITDA $ 464
Net leverage ratio for the trailing twelve months ended Q4 2020 with accompanying Adjusted EBITDA reconciliation In millions where dollars are presented 28 Non-GAAP Reconciliation / supplementary financial information For the Trailing Twelve Month Period December 2020 (in millions) Finance lease liabilities - short term $ 6 Long term debt 331 Finance lease liabilities - long term 268 Total long-term debt 605 Less: available cash/cash equivalents 0 Net Debt $ 605 Trailing twelve month Adjusted EBITDA $ 170 Net Leverage Ratio 3.6x For the Trailing Twelve Month Period December 2020 (in millions) Net income (loss) $ 81 Adjustments: Depreciation and amortization 29 Interest expense, net 47 Provision for income taxes 14 Share-based compensation expense 6 Amortization of deferred gain on real estate (4) Gain from sales of property (11) Real estate financing costs 2 Merger and acquisition costs 2 Restructuring and other 4 Adjusted EBITDA $ 170
Adjusted Net Income and Adjusted Diluted Income per Share reconciliation for the three-month periods ended Q4 2023, Q4 2022, Q4 2021, and Q4 2020 In thousands where dollars are presented, except per share data 29 Non-GAAP Reconciliation / supplementary financial information (1) Settlement of the defined benefit plan during Q4 2023 (2) Tax impact calculated based on the effective tax rate for the respective three-month periods. Quarter Ended December December December December 2023 2022 2021 2020 Net income $ (18,124) $ 31,986 $ 73,620 $ 19,858 Adjustments: Depreciation and amortization 8,285 Interest expense, net 4,171 Provision for income taxes 10,103 Share-based compensation expense 2,580 3,588 1,580 3,077 Amortization of deferred gains on real estate (982) (983) (985) (1,057) Gain from sales of property — — (7,140) (1,320) Pension settlement and withdrawal costs(1) 31,034 — — — Acquisition-related costs 186 1,022 — 106 Restructuring and other (784) 1,804 1,460 58 Tax impacts of reconciling items above (2) — (1,168) 1,281 1 Adjusted net income $ 36,469 $ 36,249 $ 69,816 $ 20,723 Basic EPS $ (2.08) $ 3.53 $ 7.57 $ 2.10 Diluted EPS $ (2.08) $ 3.50 $ 7.30 $ 2.04 Weighted average shares outstanding - Basic 8,704 9,036 9,724 9,462 Weighted average shares outstanding - Diluted 8,757 9,128 10,090 9,746 Non-GAAP Adjusted Basic EPS $ 2.96 $ 4.01 $ 7.18 $ 2.19 Non-GAAP Adjusted Diluted EPS $ 2.94 $ 3.97 $ 6.91 $ 2.13
Fiscal Year Ended December 30, 2023 December 31, 2022 ($ amounts in thousands) Long term debt (1) $ 300,000 $ 300,000 Finance lease liabilities for equipment and vehicles 42,252 29,300 Finance lease liabilities for real property 243,174 243,775 Total debt 585,426 573,075 Less: available cash and cash equivalents 521,743 298,943 Net Debt (total debt and all finance leases, excluding cash) $ 63,683 $ 274,132 Net Debt, excluding liabilities for finance leases for real property $ (179,491) $ 30,357 Twelve-Month Trailing Adjusted EBITDA (non-GAAP, see above reconciliation) $ 182,804 $ 477,742 Net Leverage Ratio 0.3x 0.6x Net Leverage Ratio Excluding Real Property Finance Lease Liabilities -1.0x 0.1x Non-GAAP Reconciliation / supplementary financial information The following table presents Net Debt, Net Debt excluding real property finance lease liabilities, Net Leverage Ratio, and Net Leverage Ratio excluding real property finance lease liabilities, for the fiscal year indicated: (1) For the period ended December 30, 2023, our long-term debt is comprised of $300.0 million of senior-secured notes issued in October 2021. These notes are presented under the long-term debt caption of our balance sheet at $293.7 million which is net of their discount of $3.0 million and the combined carrying value of our debt issuance costs of $3.2 million. For the period ended December 31, 2022, our long-term debt presented in this table is the balance presented on our balance sheet of $292.4 million, which is net of their discount of $3.5 million and the combined carrying value of our debt issuance costs of $4.1 million. Our senior secured notes are presented in this table at their face value for the purposes of calculating our net leverage ratio. 30
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- DefinitionIndicate if registrant meets the emerging growth company criteria. Reference 1: http://www.xbrl.org/2003/role/presentationRef
-Publisher SEC
-Name Exchange Act
-Number 240
-Section 12
-Subsection b-2
| Name: |
dei_EntityEmergingGrowthCompany |
| Namespace Prefix: |
dei_ |
| Data Type: |
xbrli:booleanItemType |
| Balance Type: |
na |
| Period Type: |
duration |
|
| X |
- DefinitionCommission file number. The field allows up to 17 characters. The prefix may contain 1-3 digits, the sequence number may contain 1-8 digits, the optional suffix may contain 1-4 characters, and the fields are separated with a hyphen.
| Name: |
dei_EntityFileNumber |
| Namespace Prefix: |
dei_ |
| Data Type: |
dei:fileNumberItemType |
| Balance Type: |
na |
| Period Type: |
duration |
|
| X |
- DefinitionTwo-character EDGAR code representing the state or country of incorporation.
| Name: |
dei_EntityIncorporationStateCountryCode |
| Namespace Prefix: |
dei_ |
| Data Type: |
dei:edgarStateCountryItemType |
| Balance Type: |
na |
| Period Type: |
duration |
|
| X |
- DefinitionThe exact name of the entity filing the report as specified in its charter, which is required by forms filed with the SEC. Reference 1: http://www.xbrl.org/2003/role/presentationRef
-Publisher SEC
-Name Exchange Act
-Number 240
-Section 12
-Subsection b-2
| Name: |
dei_EntityRegistrantName |
| Namespace Prefix: |
dei_ |
| Data Type: |
xbrli:normalizedStringItemType |
| Balance Type: |
na |
| Period Type: |
duration |
|
| X |
- DefinitionThe Tax Identification Number (TIN), also known as an Employer Identification Number (EIN), is a unique 9-digit value assigned by the IRS. Reference 1: http://www.xbrl.org/2003/role/presentationRef
-Publisher SEC
-Name Exchange Act
-Number 240
-Section 12
-Subsection b-2
| Name: |
dei_EntityTaxIdentificationNumber |
| Namespace Prefix: |
dei_ |
| Data Type: |
dei:employerIdItemType |
| Balance Type: |
na |
| Period Type: |
duration |
|
| X |
- DefinitionLocal phone number for entity.
| Name: |
dei_LocalPhoneNumber |
| Namespace Prefix: |
dei_ |
| Data Type: |
xbrli:normalizedStringItemType |
| Balance Type: |
na |
| Period Type: |
duration |
|
| X |
- DefinitionBoolean flag that is true when the Form 8-K filing is intended to satisfy the filing obligation of the registrant as pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act. Reference 1: http://www.xbrl.org/2003/role/presentationRef
-Publisher SEC
-Name Exchange Act
-Number 240
-Section 13e
-Subsection 4c
| Name: |
dei_PreCommencementIssuerTenderOffer |
| Namespace Prefix: |
dei_ |
| Data Type: |
xbrli:booleanItemType |
| Balance Type: |
na |
| Period Type: |
duration |
|
| X |
- DefinitionBoolean flag that is true when the Form 8-K filing is intended to satisfy the filing obligation of the registrant as pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act. Reference 1: http://www.xbrl.org/2003/role/presentationRef
-Publisher SEC
-Name Exchange Act
-Number 240
-Section 14d
-Subsection 2b
| Name: |
dei_PreCommencementTenderOffer |
| Namespace Prefix: |
dei_ |
| Data Type: |
xbrli:booleanItemType |
| Balance Type: |
na |
| Period Type: |
duration |
|
| X |
- DefinitionTitle of a 12(b) registered security. Reference 1: http://www.xbrl.org/2003/role/presentationRef
-Publisher SEC
-Name Exchange Act
-Number 240
-Section 12
-Subsection b
| Name: |
dei_Security12bTitle |
| Namespace Prefix: |
dei_ |
| Data Type: |
dei:securityTitleItemType |
| Balance Type: |
na |
| Period Type: |
duration |
|
| X |
- DefinitionName of the Exchange on which a security is registered. Reference 1: http://www.xbrl.org/2003/role/presentationRef
-Publisher SEC
-Name Exchange Act
-Number 240
-Section 12
-Subsection d1-1
| Name: |
dei_SecurityExchangeName |
| Namespace Prefix: |
dei_ |
| Data Type: |
dei:edgarExchangeCodeItemType |
| Balance Type: |
na |
| Period Type: |
duration |
|
| X |
- DefinitionBoolean flag that is true when the Form 8-K filing is intended to satisfy the filing obligation of the registrant as soliciting material pursuant to Rule 14a-12 under the Exchange Act. Reference 1: http://www.xbrl.org/2003/role/presentationRef
-Publisher SEC
-Name Exchange Act
-Section 14a
-Number 240
-Subsection 12
| Name: |
dei_SolicitingMaterial |
| Namespace Prefix: |
dei_ |
| Data Type: |
xbrli:booleanItemType |
| Balance Type: |
na |
| Period Type: |
duration |
|
| X |
- DefinitionTrading symbol of an instrument as listed on an exchange.
| Name: |
dei_TradingSymbol |
| Namespace Prefix: |
dei_ |
| Data Type: |
dei:tradingSymbolItemType |
| Balance Type: |
na |
| Period Type: |
duration |
|
| X |
- DefinitionBoolean flag that is true when the Form 8-K filing is intended to satisfy the filing obligation of the registrant as written communications pursuant to Rule 425 under the Securities Act. Reference 1: http://www.xbrl.org/2003/role/presentationRef
-Publisher SEC
-Name Securities Act
-Number 230
-Section 425
| Name: |
dei_WrittenCommunications |
| Namespace Prefix: |
dei_ |
| Data Type: |
xbrli:booleanItemType |
| Balance Type: |
na |
| Period Type: |
duration |
|
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