Bluelinx Holdings Inc. · NYSE:BXC
Bluelinx — Investor Presentation (May 2019)
33 slides from Bluelinx's investor presentation, May 22, 2019
Slide 1: Investor Presentation May 2019
Investor Presentation May 2019 www.bluelinxco.com NYSE: BXC
Slide 2: Disclaimer | Notes to Investors
Disclaimer | Notes to Investors Forward-Looking Statements. 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 m
Slide 3: BlueLinx Overview
BlueLinx Overview • Revenue generated from the sale of over A leading 50,000 structural and specialty products wholesale two-step ‒ Utilized primarily in new home construction, U.S. distributor of residential repair and remodeling, and building and industrial applications industrial products Corpora
Slide 4: Solid Competitive Dynamics
Solid Competitive Dynamics BlueLinx is an Established Market Leader in Building Distribution The BlueLinx / Cedar Creek combination achieves need for scale Comprehensive product and services portfolio, along with an established to enhance EBITDA Margins in customer base, provides opportunity for pro
Slide 5: Investment Thesis
Investment Thesis Well-positioned to capitalize on Considerable Runway for EBITDA 0Expansioncontinued U.S. housing and market Cash Flow Potential 1 recovery Leverage Profile is Misunderstood0 Following Acquisition 2 Substantial Real Estate Assets and0 NOLs Provide Positive Cash Flow Characteristics
Slide 6: The Building Distribution Market: Where BlueLinx Fits
The Building Distribution Market: Where BlueLinx Fits
Slide 7: Historical Correlation Between BlueLinx and Housing Market
Historical Correlation Between BlueLinx and Housing Market Single family housing starts remain ~20% below historical average annual levels RESIDENTIAL CONSTRUCTION REPAIR & REMODELING SPENDING • Meaningful multi-year growth projected • Consistent recovery expected • Supportive population demographic
Slide 8: Builders / Housing Market Outlook
Builders / Housing Market Outlook • Builders Confidence Index suggests positive • U.S. Housing Starts down 10% and Single growth in single-family housing market Family Housing Starts (SFHS) down 5% in Q1 2019 versus Q1 2018 • According to the latest National Association of Home Builders Wells Fargo
Slide 9: The Building Distribution Value Chain: Two-Step Distribution
The Building Distribution Value Chain: BlueLinx’s Wholesale / “Two-Step” Distribution Wholesale Distributor Building Products Local Lumber Yards End Market Pro Dealers Manufacturers “Big Box” Retailers Consumer National Homebuilders • Key path to market for most of the Contractors & Local lumber bui
Slide 10: The Building Distribution Value Chain: Why BlueLinx?
The Building Distribution Value Chain: Why BlueLinx? Why “Two Step”? We are an integral channel partner for suppliers and customers VALUE TO SUPPLIERS • Access to the market • Deep sales coverage and expertise • Warehousing, logistics, and local services • Many products require local value-add servi
Slide 11: The Building Product / Distribution Market
The Building Product / Distribution Market • “Two Step” distribution with substantial real estate assets • Predominant focus East of the Rockies • Revenues of $3.1 billion (TTM as of Q1 2019) • 2,200 employees • 62 locations Company Ticker / Private HQ Revenues* Employees* Distributors / Competitors
Slide 12: BlueLinx’s Value Proposition
BlueLinx’s Value Proposition
Slide 13: “One-stop” Shopping
“One-stop” Shopping PRODUCT DETAIL VALUE-ADDED SERVICES & PROCESSES • Combination of structural and specialty products are • ~700 customer-facing sales personnel utilized in new home construction, residential repair and • ~50 plan design drawers for residential builders remodeling, and industrial ap
Slide 14: The BlueLinx Story - Industry Leaders Merge in April 2018
The BlueLinx Story - Industry Leaders Merge in April 2018 May 2004 Dec 2004 2014 2017 Cerberus Initial Public New senior After 13 year 1954 purchased Offering executive team put investment, Formed as a division BlueLinx from G-P in place Cerberus conducts of Georgia-Pacific secondary offering of its
Slide 15: The BlueLinx Story - Creating an Industry Leader
The BlueLinx Story - Creating an Industry Leader • BlueLinx became a top-3 U.S. distributor COMBINED FOOTPRINT with the Cedar Creek acquisition (all of BXC’s facilities are located east of the Rockies) • Over $3B in Pro forma revenue in 2017 • Expanded offerings, capabilities and geographic reach to
Slide 16: Significant Synergies from Cedar Creek Acquisition
Significant Synergies from Cedar Creek Acquisition • Expect to achieve annualized run-rate synergies of $50M ahead of schedule • Cost to achieve expected to be $25M - $30M • Up to $25M of potential gross proceeds from sale of owned real estate in overlap markets EXPECTED YEAR-END RUN-RATE SYNERGIES
Slide 17: Proven Leadership in the Building Products Industry
Proven Leadership in the Building Products Industry Executive Years of Experience Past Experience Mitchell B. Lewis 30+ CEO, President & Director CEO President Attorney Susan C. O’Farrell 30+ CFO & Treasurer VP, Finance Director Assoc. Partner Alex Averitt1 20+ Chief Operating Officer CEO, COO, VP G
Slide 18: Proven Leadership Delivering Results
Proven Leadership Delivering Results New Management Adjusted EBITDA: Adjusted Team EBITDA $68.4 million 100 Adjusted EBITDA: 90 $1.3 million Adjusted EBITDA: $43.9 million 80 • Consolidated operations and streamlined costs 70 • Sold real estate 60 • Completed CMBS repayment from $110 million in sale
Slide 19: Financial Highlights
Financial Highlights
Slide 20: BlueLinx Financial Profile
BlueLinx Financial Profile Share Price $24.83 FIRST QUARTER 2019 Fully Diluted Shares Q1 Net Sales of $639 million 9.35M • Outstanding • Q1 Adjusted EBITDA of $17 million Market Capitalization $232.1M • Cedar Creek integration ahead of schedule, should be substantially complete in Q3 2019 • Annual r
Slide 21: Deconstructing BlueLinx Debt Financing
Deconstructing BlueLinx Debt Financing ($ in millions) $600 $572M • Term Loan utilized for Cedar Creek acquisition $500 • $178.2M outstanding at 3/30/2019 at Term Loan Amendment Allows for $178 L+7.00% interest per annum • Maturity: October 13, 2023 Sale Leaseback Transactions up to $50 Million • Re
Slide 22: Strong Deleveraging Potential Post Integration
Strong Deleveraging Potential Post Integration Estimated Annual Uses of Cash1 Potential Cash Available for (Before Real Estate Monetization) Debt Reduction ABL Interest2 $20M Term Loan Interest3 $16 Cash Available $110M for Debt Pay Down Finance Lease Payments3,4 $22 $80M $50M CapEx3 $5 $30M Cash Ta
Slide 23: Valuing BlueLinx Assets Compared to Liabilities
Valuing BlueLinx Assets Compared to Liabilities ($ in millions) ($ in millions) $800 $800 $700 $700 $135 • Goodwill, Intangibles, Deferred $100 Million of NOLs Tax Assets (net) $600 $600 • $160 Million Appraised Value of $160 Real Estate $500 • Completed Sale-Leaseback Overlap Markets From $500 $178
Slide 24: Substantial Hidden Value In BlueLinx Real Estate
Substantial Hidden Value In BlueLinx Real Estate • As a “two-step” distributor, one of BlueLinx’s greatest assets is its sizable properties strategically located in metro areas • Company has 32 owned properties, all with rail access • Lawrenceville, GA distribution center Owned • Approximately 30 mi
Slide 25: Real Estate Overview and $100 Million of Federal NOLs
Real Estate Overview and $100 Million of Federal NOLs $180 ($ in millions) $150-$160 ~$75 Million of Potential $160 • Amended term loan Real Estate Transactions in allows monetization 2019/2020 Up to of up to $50 million of $140 $27 properties through sale leasebacks in 2019 $120 $23 • Completed SLB
Slide 26: Investment Conclusion
Investment Conclusion EBITDA Expansion and Cash Flow Potential • Leading market position set to benefit from turn0 in housing starts • Acquisition of Cedar Creek provided necessary scale to be leader in markets served • Identifiable and achievable cost savings of at 1least $50M through supply chain,
Slide 27: Appendix
Appendix
Slide 28: Commodity Lumber and Panel Business Impacts
Commodity Lumber and Panel Business Impacts FRAMING LUMBER COMPOSITE PRICE STRUCTURAL PANEL COMPOSITE PRICE Source: Random Lengths Source: Random Lengths $650 $650 $550 $550 $450 $450 $350 $350 $250 $250 Mar Jun Sep Dec Mar Jun Sep Dec HIGHLIGHTS • Pricing in commodity lumber and panels negatively i
Slide 29: Non-GAAP And Supplementary Financial Measures
Non-GAAP And Supplementary Financial Measures BlueLinx reports its financial results in accordance with GAAP, but we also believe that presentation of certain non-GAAP measures, as well as GAAP-based and non-GAAP supplemental financial measures, may be useful to investors and may provide a more comp
Slide 30: Year End Adjusted EBITDA
Year End Adjusted EBITDA (In millions) (Unaudited) 2013 2014 2015 2016 2017 2018 Net (loss) income $ (40.6) $ (13.9) $ (11.6) $ 16.1 $ 63.0 $ (48.1) Adjustments: Depreciation and amortization 9.1 9.5 9.7 9.3 9.0 25.8 Interest expense 28.0 26.8 27.3 24.9 21.2 47.3 Provision for (Benefit from) income
Slide 31: Q1 2019 Adjusted EBITDA
Q1 2019 Adjusted EBITDA (In millions) (Unaudited) 2019 2019 Proforma Q1 Q1 Net (loss) income $ (6.7) $ (3.3) Adjustments: Depreciation and amortization 7.3 7.3 Interest expense 13.4 13.4 Benefit from income taxes (2.5) (1.4) Amortization of deferred gain (1.0) (1.0) Share-based compensation expense
Slide 32: Pro forma TTM Adjusted EBITDA as of Q1 2019
Pro forma TTM Adjusted EBITDA as of Q1 2019 (In millions) (Unaudited) 2018 2018 2018 2019 TTM Q2 Q3 Q4 Q1 TOTAL Net (loss) income $ 9.2 $ (6.2) $ (11.4) $ (3.3) $ (11.7) Adjustments: Depreciation and amortization 8.7 8.1 7.6 7.3 31.7 Interest expense 12.6 13.3 13.4 13.4 52.7 Provision for (Benefit f
Slide 33: Contact Us
Contact Us Mary Moll | BlueLinx Investor Relations 1950 Spectrum Circle, Suite 300, Marietta, GA 30067 (866) 671-5138 | investor@bluelinxco.com 33