Bluelinx Holdings Inc. · NYSE:BXC
Bluelinx — Q2 2022 Earnings Presentation
34 slides from Bluelinx's earnings presentation, Aug 3, 2022
Slide 1: BlueLinx Q2 2022 Results
BlueLinx Q2 2022 Results August 3, 2022
Slide 2: Safe Harbor Statement
SAFE HARBOR STATEMENT 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,” “antic
Slide 3: Opening Remarks
Opening Remarks Dwight Gibson, President & CEO Q2 2022 RESULTS | 3
Slide 4: A Whole New Blue / Executive Summary
A WHOLE NEW BLUE / executive summary Delivered record first half profitability, Net sales of $2.5b…………………….up 9% year-over-year with strong growth over 1H 2021 Adjusted EBITDA of $314m…………….up 15% year-over-year Delivered historically strong Q2, Adjusted EBITDA of $112m – third highest qua
Slide 5: Q2 2022 Results: Specialty Products Growth and Strong Cash Conversion
Q2 2022 RESULTS / specialty products growth and strong cash conversion Net sales of $1.2b, down 5% year-over-year: Gross Profit by Product Category Specialty product sales increased 17% to $788m Structural product sales decreased 29% to $452m due to wood-based commodity price deflation Special
Slide 6: Quarterly Results: Continued Operational Improvement and Growth in Specialty Products
QUARTERLY RESULTS / continued operational improvement and growth in specialty products ~70% (Q3 2021) and >50% (Q2 2022) decline Sales in wood-based commodity prices BlueLinx productivity improvements: Adj. EBITDA % Increased focus on specialty products $1,308 $1,302 Disciplined pricing and purc
Slide 7: U.S. Housing Industry: U.S. Housing Fundamentals Slowing
U.S. HOUSING INDUSTRY / U.S. housing fundamentals slowing Repair and remodel spend expected to maintain double-digit growth thru 1H23, per LIRA Index(1): BLUELINX SALES BY END MARKET Home price appreciation and record home equity levels Remote work flexibility Average age of existing homes ~
Slide 8: U.S. Housing Industry: Wood-Based Commodity Prices Remained Volatile
U.S. HOUSING INDUSTRY / wood-based commodity prices remained volatile Average quarterly prices for framing lumber ($/MBF) Supply/Cost Environment and structural panels ($/MSF) (per RISI(1)): $1,700 $1,566 Lumber and panel prices declined 57% and 52%, respectively, from peak pricing in mid-March to
Slide 9: Financial Review
Financial Review Kelly Janzen, Chief Financial Officer Q2 2022 RESULTS | 9
Slide 10: Second Quarter 2022 Results: Key Metrics
SECOND QUARTER 2022 RESULTS / key metrics $ millions, except per share data Q2 2021 Q2 2022 Variance Net sales decreased 5% to $1.2b: Specialty sales grew 17% Net sales $1,308 $1,239 (5%) Structural sales down 29% Gross Profit $251 $201 (20%) Gross Margin of 16.3%, down 290 bps: Due to imp
Slide 11: Working Capital: Continued Significant Return on Working Capital
WORKING CAPITAL / continued significant return on working capital year over year Significant return on Operating Working Days Sales of Inventory (DSI) working capital, 58% for Capital Management(1) Number of Days TTM Q2 2022 Dollars in millions 53 54 48 50 47 $1,000 80% 43 40 39 $904 35 $38m seq
Slide 12: Specialty Products Q2 2022 Results
SPECIALTY PRODUCTS Q2 2022 RESULTS / sales grew 17% with gross profit up 9% Q2 year-over-year analysis ($ millions) $768 $788 Net sales grew 17%, or $113m: GM Rate Net sales $675 Sales growth led by engineered $641 $641 wood, millwork, siding, and industrial $563 24.4% 24.0% Disciplined, value
Slide 13: Structural Products Q2 2022 Results
STRUCTURAL PRODUCTS Q2 2022 RESULTS / sales and profit impacted by commodity deflation Q2 year-over-year analysis ($ millions) Net sales decreased 29%, or $181m: $633 Reflects year-over-year deflation in wood- based commodity prices: GM Rate $534 36% decrease in average price of lumber Net sal
Slide 14: Balance Sheet: Strong Financial Position to Support Value Creation
BALANCE SHEET / strong financial position to support value creation ($ millions) Gross Debt Structure Debt Maturity Schedule $664 $350 $69 $600 $571 $300 $322 $320 ABL @ ~2% $300 undrawn $300m Senior Notes @ 6% revolver $273 $279 $271 2Q20 2Q21 2Q22 2022 2023 2024 2025 2026 2027 2028 2029 Finance Le
Slide 15: Capital Allocation Framework
CAPITAL ALLOCATION FRAMEWORK / disciplined approach to drive value creation GUIDING PRINCIPLES Maintain strong balance sheet OPERATING CASH FLOW FREE CASH FLOW and financial stability Long-term net leverage could increase to at or around 3.0x INVEST IN THE STRATEGIC SHARE when considering growth
Slide 16: Executive Summary
Executive Summary Dwight Gibson, President and CEO Q2 2022 RESULTS | 16
Slide 17: A Whole New Blue: A Compelling Investment
A WHOLE NEW BLUE / a compelling investment 1 2 3 Attractive BlueLinx is well Leveraging market positioned to grow growth >$40b addressable market ~10% market share Optimizing productivity 5%+ long-term growth rate Growing with best customers Infusing capabilities Fragmented competition
Slide 18: North America's Preeminent Building Products Distributor
A WHOLE NEW BLUE / North America’s Preeminent Building Products Distributor Accelerating Growth Optimizing Productivity Accelerating growth with our best Optimizing productivity thru distribution center customers and our best specialty products optimization and procurement excellence North America’s
Slide 19: A Whole New Blue / Executive Summary
A WHOLE NEW BLUE / executive summary 1H 2022 strongest first half on record: Net sales of $2.5b, up 9% year-over-year Adjusted EBITDA of $314m, up 15% year-over-year Operating cash of $103m, up ~5x year-over-year Closely monitoring the macro-economic environment and US housing industry F
Slide 20: Appendix
Appendix Q2 2022 RESULTS | 20
Slide 21: Non-GAAP Measures
Non-GAAP Measures BlueLinx 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 GAA
Slide 22: Macro Trends: Key Indicators Remain Solid Despite Rising Interest Rates
MACRO TRENDS / key indicators remain solid despite rising interest rates Total U.S. Single Family Housing Starts (SFHS) LIRA Remodeling Activity Index Housing starts in thousands (1) TTM Moving Total - Dollars in billions (3) 2,000 1,800 starts expected to remain around 25-year $500 Remodeling spend
Slide 23: Macro Trends: Hybrid Work and Record Home Equity
MACRO TRENDS / shift to hybrid work and record levels of home equity support home investment Fully on-site Household Owners’ Equity Levels in Real Estate Dollars in billions (1) $30,000 record levels of home equity Hybrid/work from home $25,000 $20,000 $15,000 $10,000 $5,000 $0 1993-… 2001-… 2010-…
Slide 24: Wood-Based Commodity Price Trends
WOOD-BASED COMMODITY PRICE TRENDS / wood-based commodity markets remain volatile Framing Lumber Composite Index Prices declined throughout As of July 2022(1) 2Q22 1,600 Index Price TTM Avg. Index Price 1,400 Jul-22 framing lumber prices are 8% higher than the 5-year average and 21% below the 1,200
Slide 25: Non-GAAP Reconciliation / Supplementary Financial Information
Non-GAAP Reconciliation / Supplementary Financial Information Net sales, gross profit dollars, gross profit percentages, sales mix, and gross profit mix by product category by fiscal quarter, Q4 2020 – Q2 2022 In millions where dollars are presented Q2 2022 RESULTS | 25
Slide 26: Non-GAAP Reconciliation / Supplementary Financial Information
Non-GAAP Reconciliation / Supplementary Financial Information Adjusted EBITDA reconciliation by fiscal quarter, Q4 2020 – Q2 2022 In millions Q2 2022 RESULTS | 26
Slide 27: Non-GAAP Reconciliation / Supplementary Financial Information
Non-GAAP Reconciliation / Supplementary Financial Information Structural gross margin %, excluding lower of cost or net realizable value reserve, Q2 2022 and Q2 2021 In millions where dollars are presented Q2 2022 RESULTS | 27
Slide 28: Non-GAAP Reconciliation / Supplementary Financial Information
Non-GAAP Reconciliation / Supplementary Financial Information Free cash flow for second quarter ended 2022 In millions where dollars are presented Q2 2022 RESULTS | 28
Slide 29: Non-GAAP Reconciliation / Supplementary Financial Information
Non-GAAP Reconciliation / Supplementary Financial Information Working capital by fiscal quarter, Q1 2020 – Q2 2022 In millions where dollars are presented Cash investments in property, plant, and equipment (CAPEX) for three months ended March 2022 and June 2022 In millions where dollars are presente
Slide 30: Non-GAAP Reconciliation / Supplementary Financial Information
Non-GAAP Reconciliation / Supplementary Financial Information Net leverage ratio for the trailing twelve months ended fiscal June 2022 with accompanying Adjusted EBITDA reconciliation In millions where dollars are presented Q2 2022 RESULTS | 30
Slide 31: Non-GAAP Reconciliation / Supplementary Financial Information
Non-GAAP Reconciliation / Supplementary Financial Information Net leverage ratio for the trailing twelve months ended fiscal March 2022 with accompanying Adjusted EBITDA reconciliation In millions where dollars are presented Q2 2022 RESULTS | 31
Slide 32: Non-GAAP Reconciliation / Supplementary Financial Information
Non-GAAP Reconciliation / Supplementary Financial Information Net leverage ratio for the trailing twelve months ended fiscal June 2021 with accompanying Adjusted EBITDA reconciliation In millions where dollars are presented Q2 2022 RESULTS | 32
Slide 33: Non-GAAP Reconciliation / Supplementary Financial Information
Non-GAAP Reconciliation / Supplementary Financial Information Net leverage ratio for the trailing twelve months ended fiscal December 2020 with accompanying Adjusted EBITDA reconciliation In millions where dollars are presented Q2 2022 RESULTS | 33
Slide 34: Non-GAAP Reconciliation / Supplementary Financial Information
Non-GAAP Reconciliation / Supplementary Financial Information Net leverage ratio for the trailing twelve months ended fiscal December 2019 with accompanying Adjusted EBITDA reconciliation In millions where dollars are presented Q2 2022 RESULTS | 34