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2 Months : From Nov 2019 to Jan 2020
BlueLinx Holdings Inc. (NYSE: BXC), a leading distributor of building and industrial products in the United States, today announced an update on its deleveraging initiatives and operations. The Company continues to actively explore sale leaseback and real estate sale opportunities, and expects to be able to announce further details on these activities in the coming weeks. In addition, on November 22, 2019, the Company filed a three-year, $50 million universal shelf registration statement on Form S-3 with the United States Securities and Exchange Commission (SEC).
Mitch Lewis, President and Chief Executive Officer, stated, “We are making good progress at various stages of several real estate monetization opportunities through sale leasebacks and outright sales from our $100 million portfolio of owned real estate. We believe these efforts should generate meaningful debt reduction in the next 60 days. In addition, to provide additional financial flexibility, we filed a shelf registration statement. While we have no present plans to issue securities under the shelf registration statement, it adds to our options by providing accessibility to the capital markets for the next three years, if and when we determine that to be appropriate.”
Mr. Lewis also provided the following update on operations: “We are pleased to report tangible gains in volume as the Company continues to emphasize customer service, sales growth, and operational efficiency. The sales volume recovery discussed during BlueLinx’s third quarter earnings call has continued through the first seven weeks of the fourth quarter. For that period, excluding the effect of the previously discussed loss of a key siding product line, we continued to make progress recapturing market share, as evidenced by overall volumes being up approximately 3% over the comparable prior year period.”
Balance Sheet and Term Loan Information
Additionally, the Company is clarifying the calculation of the leverage ratio under its term loan agreement. The ratio for any period is generally determined by taking the Company’s “Consolidated Total Debt” and dividing it by the Company’s “Consolidated EBITDA,” as those terms are defined in the term loan agreement.
Consolidated Total Debt is generally determined by adding the balance of the Company’s term loan, the prior month’s average balance of its revolving credit facility, and its equipment finance lease liability, and reducing that amount by unrestricted cash up to $10.0 million. At September 28, 2019, the Company’s term loan balance was $147.2 million, the average balance of its revolving credit facility was $357.9 million, its equipment finance lease liability was $34.4 million, and its unrestricted cash was $10.0 million.
Consolidated EBITDA is generally determined by taking the Adjusted EBITDA that the Company reports, and adding additional adjustments and add-backs specified by the term loan agreement. The Company anticipates that the additional adjustments and add-backs to Adjusted EBITDA for calculating Consolidated EBITDA under the term loan will be approximately $5 million to $7 million at the Company’s 2019 fiscal year end.
The leverage ratio and its components are described in more detail in the Company’s term loan agreement, as amended, which is available as an exhibit to the Company’s periodic filings with the SEC.
About the Shelf Registration Statement
Although the shelf registration statement has been filed with the SEC, it has not yet become effective. If and when the shelf registration statement is declared effective by the SEC, BlueLinx will be able to offer and sell, from time to time, up to $50 million of securities including common stock, preferred stock, debt securities, warrants, units, or any combination of such securities. The Company has no present plans to issue securities under the shelf registration statement, and any offering of securities will be subject to market and other conditions. There can be no assurance as to the actual size or terms of any offering or that any offering will be made or completed. Any such offers and sales may be made through one or more methods of distribution, subject to market conditions and the Company’s capital desires or needs. The terms of any offering under the shelf registration statement, and the intended uses of the net proceeds therefrom, will be established at the time of such offering and will be described in a prospectus supplement filed with the SEC prior to completion of the offering. A copy of the prospectus included in the registration statement may be obtained on the SEC’s website at www.sec.gov.
The securities covered under the shelf registration statement may not be sold, nor may offers to buy be accepted, prior to the time the shelf registration statement becomes effective. This press release is not an offer to sell or a solicitation of an offer to buy, nor shall there be any sale of securities in any state or jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such state or jurisdiction.
About BlueLinx Holdings Inc.
BlueLinx (NYSE: BXC) is a leading wholesale distributor of building and industrial products in the United States with over 50,000 branded and private-label SKUs, and a broad distribution footprint servicing 40 states. BlueLinx has a differentiated distribution platform, value-driven business model and extensive cache of products across the building products industry. Headquartered in Marietta, Georgia, BlueLinx has over 2,200 associates and distributes its comprehensive range of structural and specialty products to approximately 15,000 national, regional, and local dealers, as well as specialty distributors, national home centers, industrial, and manufactured housing customers. BlueLinx encourages investors to visit its website, www.BlueLinxCo.com, which is updated regularly with financial and other important information about BlueLinx.
Susan O’Farrell, SVP, CFO & TreasurerBlueLinx Holdings Inc.(770) 953-7000
Mary Moll, Investor Relations(866) email@example.com
This press release contains forward-looking statements. Forward-looking statements include, without limitation, any statement that predicts, forecasts, indicates or implies future results, performance, liquidity levels or achievements, and may contain the words “believe,” “anticipate,” “expect,” “estimate,” “intend,” “project,” “plan,” “will be,” “will likely continue,” “will likely result” or words or phrases of similar meaning. These forward-looking statements include, but are not limited to, statements about the Company’s sale leaseback and real estate sale opportunities, the Company’s plans to announce further details on its sale leaseback and real estate opportunities, the Company’s progress with its real estate monetization opportunities and their ability to generate debt reduction, filing of the universal shelf registration statement with the SEC, the Company’s plans to issue securities under the shelf registration statement, offerings to be made pursuant to the shelf registration statement, gains in volume, the Company’s progress toward recapturing market share, and the amount of anticipated adjustments and add-backs for calculating Consolidated EBITDA under the Company’s term loan agreement at the Company’s 2019 fiscal year end.
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 listed under the heading “Risk Factors” in Item 1A of our Annual Report on Form 10-K for the year ended December 29, 2018, and those discussed in our Quarterly Reports on Form 10-Q and in our periodic reports filed with the SEC from time to time. 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: our ability to monetize real estate assets; our ability to complete offerings under the shelf registration statement on favorable terms, or at all; our ability to integrate and realize anticipated synergies from acquisitions; loss of material customers, suppliers, or product lines in connection with acquisitions; operational disruption in connection with the integration of acquisitions; our indebtedness and its related limitations; sufficiency of cash flows and capital resources; changes in interest rates; fluctuations in commodity prices; adverse housing market conditions; disintermediation by customers and suppliers; changes in prices, supply and/or demand for our products; inventory management; competitive industry pressures; industry consolidation; product shortages; loss of and dependence on key suppliers and manufacturers; new tariffs; our ability to successfully implement our strategic initiatives; fluctuations in operating results; sale-leaseback transactions and their effects; real estate leases; exposure to product liability claims; changes in our product mix; petroleum prices; information technology security and business interruption risks; litigation and legal proceedings; natural disasters and unexpected events; activities of activist stockholders; labor and union matters; limits on net operating loss carryovers; pension plan assumptions and liabilities; risks related to our internal controls; retention of associates and key personnel; federal, state, local and other regulations, including environmental laws and regulations; and changes in 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.