Bluelinx Holdings Inc. · NYSE:BXC

Bluelinx — Wells Fargo Securities 2013 Industrial and Construction Conference

48 slides from Bluelinx's conference presentation, May 9, 2013

  1. Slide 1: Wells Fargo Securities 2013 Industrial and Construction Conference

    BlueLinx Holdings Inc. Wells Fargo Securities 2013 Industrial and Construction Conference

  2. Slide 2: Forward-Looking Statement Safe Harbor

    BlueLinx Holdings Inc. Forward-Looking Statement Safe Harbor - This presentation includes “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. All of these forward-looking statements are based on estimates and assumptions made by our management tha

  3. Slide 3: Contents

    Contents • Executive Summary • Key Investment Merits • Industry Overview • Financial Overview • Appendix 3 www.bluelinxco.com

  4. Slide 4: Executive Summary

    @ "ee © e°e BlueLinx Executive Summary

  5. Slide 5: Company Overview

    Company Overview • Leading provider of building products distribution 2012 Sales by Product Category services with over 50 U.S. locations • Most comprehensive nationwide footprint in the Specialty Structural highly fragmented building products distribution industry • Deliver over 10,000 specialty an

  6. Slide 6: Company History & Timeline

    Company History & Timeline An evolution of BlueLinx’ business strategy 2006-Present 1994 BlueLinx begins to increase The Division program and private label 2011 restructures it vast May 2004 initiatives, lessen dependence BlueLinx introduces 1954 independent Georgia-Pacific sells the on Georgia-Paci

  7. Slide 7: Business Strategy

    Business Strategy Continue • Specialty products have grown from • Private label products yield higher Emphasizing 44% of sales to 60% of sales over margins and strengthen customer Cultivate Private Higher Margin, the last five years relationships Label Products Specialty • Gross profit margin grows

  8. Slide 8: The Right Products…To The Right Place…

    The Right Products…To The Right Place… Product resources, knowledgeable staff & nationwide foot print make us a valuable partner to vendors and customers - ensuring products make it to the right place at the right time Industrial & Single-Family Housing Starts Manufactured 39% Housing 24% Multi-Fami

  9. Slide 9: Key Investment Merits

    wee e BlueLinx ~@ Key Investment Merits

  10. Slide 10: Key Investment Merits

    Key Investment Merits Leading, National Distribution Platform Comprehensive Product Offering With Substantially Improved Mix State-of-the-Art Technology & Logistics Unique Centralized Model Diversified Established Customer Base Proven, Entrepreneurial Management Team Upside Opportunity from Rebound

  11. Slide 11: Leading, National Distribution Platform

    Leading, National Distribution Platform • Leading distributor of building products in North America with 50+ facilities across the United States – Only “pure” distributor among five largest distributors • Comprehensive nationwide presence critical to blue-chip suppliers, national dealers, and home i

  12. Slide 12: Comprehensive Product Offering

    Comprehensive Product Offering… • One of the industry’s broadest product offerings with over 10,000 branded and private-label products encompassing 70,000 SKUs • Provides significant cross-selling opportunities to drive BlueLinx’ revenue growth across multiple product lines • Simplified single sourc

  13. Slide 13: Milling and Fabrication Services

    Comprehensive Product Offering… Milling and Fabrication Services BlueLinx offers a wide array of custom cutting and fabrication services for the building products industry. Specializing in: • Hardwood and softwood lumber • Panel products such as plywood, OSB, particleboard, MDF, melamine • Metal roo

  14. Slide 14: With Substantially Improved Mix

    …With Substantially Improved Mix Gross Revenue Gross Margin Dollars 2006 2012 2006 2012 42% 35% 39% 56% 58% 61% 65% 44% Structural Specialty Structural Specialty Specialty Products Structural Products ($ in Millions) $3,200 11% $2,788 $2,400 $2,197 14.7% 14.6% 15% 9.9% 9.8% 9.6% 9.4% 10% $1,804 14.1

  15. Slide 15: State-of-the-Art Technology & Logistics

    State-of-the-Art Technology & Logistics • Superior, proprietary systems provide real-time information to manage inventory levels, optimize logistics, and analyze profitability by product, customer, and location – Enhances customer service – Provides unequaled market intelligence – Improves operation

  16. Slide 16: Unique, Centralized Model

    Unique, Centralized Model • Unique and powerful model leveraging BlueLinx’ superior information systems and infrastructure to facilitate centralized management while maintaining teams focused on local market and customer needs – Efficient, informed, decision making coordinated across the platform •

  17. Slide 17: Diversified, Established Customer Base

    Diversified, Established Customer Base • National distributor of building products to over 11,500 customers with approximately 25,000 locations • Offers customers superior, reliable service, break bulk quantities, near 100% fill rates, reduced inventory costs, and a wide variety of distribution serv

  18. Slide 18: Proven, Entrepreneurial Management Team

    Proven, Entrepreneurial Management Team Summary Employees • Management possesses deep industry • Highly stable employee base knowledge and distribution expertise • BlueLinx maintains excellent relations with • Executive management has been with the its workforce and representing unions Company for a

  19. Slide 19: Executive Management

    Executive Management Name & Title Industry Experience Years with BlueLinx 1 George Judd, CEO and President 29 29 • CEO and board member since 2008 • Previously President & COO starting in May 2004 • Previous positions include National Sales Mgr and VP of Sales and Eastern Operations Doug Goforth, Se

  20. Slide 20: Upside Opportunity from Rebound in Housing

    Upside Opportunity from Rebound in Housing • Favorable demographic trends and the resulting household formation data strongly support a return to normalized levels of residential new construction • Longer term these trends support a return to a “normalized” or mid-cycle level of housing starts in th

  21. Slide 21: Well Positioned to Take Advantage of Developing Housing Recovery

    Well Positioned to Take Advantage of Developing Housing Recovery Summary • Strong relationships with specialty product manufacturers, brand name products, and sales expertise necessary to continue specialty products growth strategy, while also focusing on offering premium brand structural products •

  22. Slide 22: Industry Overview

    tet BlueLinx be your warehouse

  23. Slide 23: Residential New Construction Market

    Residential New Construction Market 2,000 Multi-Family • Consensus estimates show housing starts of 1,800 1,801 -25% Single-Family 1,600 1,001,000 for 2013, rising to 1,283,000 for 1,400 28% -33% 1,200 1,355 2014 as housing fundamentals strengthen 28% 1,283 1,000 -39% 28% 800 6% 4% 1,001 1,465 906 H

  24. Slide 24: Residential Improvements Market – Growing

    Residential Improvements Market – Growing • Growth in the residential improvements market will be driven by rising existing home sales, the high percentage of distressed sales, and homeowners choosing to fix up rather than move up • Limiting expenditures will be slow income and employment growth • T

  25. Slide 25: Financial Overview

    BlueLinx Financial Overview

  26. Slide 26: Improving Financial Performance

    Improving Financial Performance • Despite market downturn, management increased revenue from $1.65 billion in 2009 to $1.91 billion in 2012 • Increasing gross margin percentage with product mix shift to specialty category distinctly differentiates BlueLinx in the supply chain by positioning it to cr

  27. Slide 27: Enhanced Revenue Mix

    Enhanced Revenue Mix • Revenue growth is highly correlated to the expected rebound in residential new construction housing starts • Management has focused on expanding sales of more profitable specialty products • Specialty products are expected to account for 60% of total sales, even as structural

  28. Slide 28: Improved Gross Margin Profile

    Improved Gross Margin Profile • Focus on global sourcing and increasing product mix have driven increased profit margins Historical Gross Margins ($ in Millions) $600 13.0% 12.1% 12.0% $500 11.7% 11.7% 12.0% $480 11.3% $400 $392 11.0% $300 10.2% $315 10.0% $200 $230 9.8% $211 $210 $193 9.0% $100 $0

  29. Slide 29: Controlled Operating Expenses

    Controlled Operating Expenses • Strategic cost-cutting measures since 2006 include elimination of $95 million of annual fixed expenses Historical Operating Expenses (1) ($ in Millions) $500 16.0% 14.4% 13.1% 13.2% 12.3% $400 11.7% $402 12.0% $394 $300 $324 10.3% 8.0% 8.2% $238 $237 $232 $235 $200 4.

  30. Slide 30: Effective Working Capital Management

    Effective Working Capital Management • Advanced information and logistics technology allow management to effectively forecast supply and demand to limit inventory requirements and optimize working capital investments Working Capital and Turnover ($ in Millions) $600 14x $509 $500 $440 11.5x 12x $400

  31. Slide 31: Limited Future Capital Expenditures

    Limited Future Capital Expenditures • Over $35 million invested over the past six years to drive productivity improvements and to maintain and upgrade facilities, equipment, and information systems • Lower volume and corresponding reduced mileage over the past four years required limited capital inv

  32. Slide 32: Quarterly Highlights – Q1 2013

    Quarterly Highlights – Q1 2013 Financial Summary ($ in Millions) Industry and Market Conditions • End use markets improving: – Continued favorable trends in housing fundamentals experienced through the first quarter; March SAAR housing starts at 1,036k breaking the 1 million mark for the first time

  33. Slide 33: Quarterly Review

    Quarterly Review Specialty Structural Other Specialty Structural Revenues % by Product ($ in millions) YOY $49.4 54% or 10.9% 59% $517.0 $496.8 $453.7 $440.3 $503.2 215.7 211.4 41% 182.9 233.5 196.1 268.1 307.9 288.9 249.1 270.9 46% 1Q ‘12 2Q ‘12 3Q ‘12 4Q ‘12 1Q ‘13 1Q ‘12 1Q ‘13 Variance Analysis

  34. Slide 34: 2013 Q1 Results

    2013 Q1 Results Revenues Operating Expenses ($ in millions) ($ in millions) YOY $49.4 $503.2 YTD ‘12 YTD ‘13 Variance or 10.9% Reported Operating Expenses $58.3 $61.6 ($3.3) Significant Special Items: $453.7 Facility Consolidation. & Severance - ($0.9) $0.9 Gain on real estate $0.6 $0.3 $0.3 Adjuste

  35. Slide 35: Cash Flows

    Cash Flows Unaudited (in million’s) Q112 Q212 Q312 Q412 Q113 TTM 2013 TTM 2012 Cash flows from operating activities: Net loss $ (11.0) $ (3.7) $ 3.1 $ (11.4) $ (12.6) $ (24.6) $ (37.3) Adjustments to reconcile net loss to net cash (used in) provided by operations: Depreciation and amortization 2.4 2

  36. Slide 36: Debt

    Debt Debt $ in millions July 2, October 1, December 31, March 31, June 30, September 29, December 29, March 30, 2011 2011 2011 2012 2012 2012 2012 2013 Revolving Credit Facilities $ 188.9 $ 118.5 $ 94.5 $ 177.7 $ 206.7 $ 185.2 $ 171.4 $ 242.4 Mortgage 285.7 246.9 243.2 236.1 235.5 234.9 206.0 205.3

  37. Slide 37: Cash Cycle

    Cash Cycle Cash Cycle Days (in days) 100 59 59 61 57 58 80 36 36 A/R 36 37 34 60 40 53 INV 20 49 49 49 49 0 (28) (27) (26) (25) (28) -20 A/P & OD’s -40 1Q ‘12 2Q ‘12 3Q ‘12 4Q ‘12 1Q ‘13 TTM Cash Cycle days at 61, up 3 days sequentially and up 4 days compared to the prior year quarter Cash cycle day

  38. Slide 38: Appendix

    Appendix

  39. Slide 39: Profit & Loss Statement by Quarter

    Profit & Loss Statement by Quarter Profit & Loss Statement $ in millions (1) , except per share amounts 2011 2012 2013 2011 2012 2013 TTM Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Sales $ 500.8 $ 472.9 $ 391.1 $ 453.7 $ 517.0 $ 496.8 $ 440.3 $ 503.2 $ 1,755.4 $ 1,907.8 $ 1,957.3 Cost of Goods Sold 443.2 414.6 343.2 3

  40. Slide 40: Revenues by Quarter

    Revenues by Quarter Sales $ in millions 2011 2012 2013 2011 2012 2013 TTM Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Specialty $ 309.9 $ 291.1 $ 236.4 $ 268.1 $ 307.9 $ 288.9 $ 249.1 $ 270.9 $ 1,068.2 $ 1,114.0 $ 1,116.8 Structural 192.6 186.6 164.9 182.9 215.7 211.4 196.1 233.5 704.9 806.1 856.7 Other (1) (1.7) (4.8)

  41. Slide 41: Revenue Channel Mix Analysis

    Revenue Channel Mix Analysis 1Q13 Variance from Year 1Q12 2Q12 3Q12 4Q12 1Q13 Ago Qtr Total Products Warehouse 69.4% 70.0% 71.8% 72.3% 69.9% 0.5% Direct 21.5% 19.9% 19.5% 19.7% 20.8% (0.7%) Reload 9.1% 10.1% 8.7% 8.0% 9.3% 0.2% Total 100.0% 100.0% 100.0% 100.0% 100.0% 0.0% 41 www.bluelinxco.com

  42. Slide 42: Unit Volume by Quarter

    Unit Volume by Quarter Unit Volume Change 2011 2012 2013 2011 2012 2013 TTM Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Specialty 10.7% 11.4% 6.6% 12.4% (2.3%) (1.0%) 5.4% 1.5% 7.4% 2.9% 0.6% Structural (18.8%) (14.0%) 2.8% 9.4% 0.4% (3.3%) (0.8%) 4.5% (15.1%) 1.4% 0.2% Total (3.5%) 0.1% 5.0% 11.2% (1.3%) (1.9%) 2.9% 2

  43. Slide 43: Gross Margin by Quarter

    Gross Margin by Quarter Gross Margin $ in millions 2011 2012 2013 2011 2012 2013 TTM Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Specialty (1) $ 38.9 $ 38.9 $ 31.5 $ 33.7 $ 41.1 $ 38.1 $ 33.0 $ 35.3 $ 137.3 $ 145.9 $ 147.5 Structural (1) 15.6 17.8 14.6 18.0 20.4 21.0 17.5 20.3 64.8 76.9 79.2 Other (2) 3.1 1.6 1.9 2.5 1

  44. Slide 44: Operating Expense by Quarter

    Operating Expense by Quarter Operating Expense (1) $ in millions 2011 2012 2013 2011 2012 2013 TTM Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Payroll & related $38.1 $38.3 $35.5 $38.6 $38.5 $37.8 $37.7 $38.9 $149.5 $152.6 $152.9 General maintenance 5.6 5.3 5.4 5.2 5.5 5.6 5.4 5.6 21.4 21.7 22.1 Fuel 4.5 4.2 3.7 4.1 4.

  45. Slide 45: Structural Products Price Trend

    Structural Products Price Trend Plywood Price Trend 2008-2013 YTD Oriented Strand Board Price Trend 2008 - 2013 YTD Southern Sheathing 15/32” 4 Ply. West Zone Oriented Strand Board 7/16” North Central Zone $450 $450 $400 $400 $350 $350 $300 $300 ($/msf - 3/8”) $250 ($/msf - 3/8”) $250 $200 $200 $150

  46. Slide 46: Reconciliation of GAAP to Non-GAAP

    Reconciliation of GAAP to Non-GAAP December 29, March 30, 2012 2013 (unaudited) (unaudited) Revolving Credit Facilities $ 171.4 $ 242.4 Mortgage 206.0 205.3 TOTAL DEBT $ 377.4 $ 447.7 Less:Cash and Cash Equivalents (5.2) (5.3) Mortgage LCR Trap - (3.0) Net Debt $ 372.2 $ 439.4 Excess Availability $

  47. Slide 47: Reconciliation of GAAP to Non-GAAP

    Reconciliation of GAAP to Non-GAAP BlueLinx Holdings Inc. Unaudited Reconciliation of GAAP Net cash used in operating activities to Non-GAAP EBITDA (1) in millions Three Months Ended March 30, March 31, 2013 2012 GAAP net cash used in operating activities $ (95.8) $ (88.5) Adjustments: Amortization

  48. Slide 48: Additional information for BlueLinx

    Additional information for Bluelinx can be found at our website or by contacting: Maryon Davis Director – Finance & Investor Relations Maryon.Davis@bluelinxco.com (770) 221-2666 www.bluelinxco.com

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