Bluelinx Holdings Inc. · NYSE:BXC
Bluelinx — Q2 2006 Earnings Presentation
33 slides from Bluelinx's earnings presentation, Aug 9, 2006
Slide 1: Second Quarter 2006 Operational & Financial Review
BlueLinx Second Quarter 2006 Operational & Financial Review BlueLinx Second Quarter 2006 Operational & Financial Review
Slide 2: Safe Harbor Statement and Use of Non-GAAP and Pro Forma Information
BlueLinx Holdings Inc. Safe Harbor Statement and Use of Non-GAAP and Pro Forma Information 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 statemen
Slide 3: Introduction
BlueLinx Holdings Inc. Introduction Steve Macadam Chief Executive Officer
Slide 4: Goals and Strategic Objectives
BlueLinx Holdings Inc. Introduction Goals and Strategic Objectives Profitably grow specialty revenues to 60+% of total sales Profitably grow structural while reducing exposure to volatility Outgrow the market
Slide 5: Second Quarter Highlights
BlueLinx Holdings Inc. Introduction 2 nd Quarter Highlights Income, before charges relating to our mortgage refinancing, rose to $12.6 million, or $0.41 per share vs. net income of $7.8 million, or $0.25 per share in Q2 ’05. The charge relating to our mortgage refinancing was $3.0 million, or $0.10
Slide 6: Operations Review
BlueLinx Holdings Inc. Operations Review George Judd President & Chief Operating Officer
Slide 7: Unit Volume Growth by Quarter and TTM
BlueLinx Holdings Inc. Unit Volume Growth by Quarter and TTM Q3 Q4 Q1 Q2 2005 2005 2006 2006 TTM Estimated BXC Unit Volume Growth Specialty 5.8% 12.7% 14.9% 9.6% 10.7% Structural 0.9% 0.2% (0.8%) (11.3%) (3.0%) Total 2.6% 5.0% 5.0% (3.8%) 2.0% Estimated Weighted End-Use Market Growth 3.9% 6.7% 2.6%
Slide 8: Specialty Unit Volume Growth vs. End-Use Markets
BlueLinx Holdings Inc. Specialty Unit Volume Growth vs. End-Use Markets BXC Specialty Growth Estimated Weighted = percentage point spread End-Use Market Growth 18.0% 14.0% 10.0% 6.0 12.3 6.0% 8.5 1.9 11.4 Unit Volume Growth % 2.0% (2.0%) Q3 Q4 Q1 Q2 TTM 2005 2005 2006 2006 Continued specialty share
Slide 9: Quarterly Gross Margin
BlueLinx Holdings Inc. Quarterly Gross Margin $millions (unaudited ) Q2 Q2 2005 2006 $Variance Gross Margin $’s Specialty $70.1 $86.9 $16.8 Structural50.7 55.7 5.0 Other(5.1) (6.2) (1.1) Total$115.7 $136.4 $ 20.7 Gross Margin %’s Specialty 12.9% 14.4% 1.5% Structural 5.3% 7.0% 1.7% Other NA NA NA To
Slide 10: Inventory Analysis
BlueLinx Holdings Inc. Inventory Analysis $millions (unaudited ) Sequential Year Ago Q2 Q3 Q4 Q1 Q2 Quarter Quarter 2005 2005 2005 2006 2006 Variance Variance Structural Products $217.7 $168.1 $184.6 $194.7 $192.5 (2.2) (25.2) Specialty Products 238.4 228.2 245.5 269.1 299.6 30.5 61.2 Other* 30.0 22
Slide 11: Other Key Indicators
BlueLinx Holdings Inc. Other Key Indicators 2 nd Quarter Working capital turn days at 43 vs. 41 same period last year TTM working capital turn days at 40, a 2 day improvement vs. Q2 2005 TTM Q2 reduction of 5.6% in delivery costs/ULE and increase of 1.0% in material handling costs/ULE ( ULE or unit
Slide 12: Strategic Initiatives
BlueLinx Holdings Inc. Strategic Initiatives Continue gross margin improvement initiative by increasing mix of specialty and mitigating volatility of structural Invest in people and processes necessary to support specialty business growth Increase volume in under represented segments, particularly i
Slide 13: Financial Review
BlueLinx Holdings Inc. Financial Review David Morris Chief Financial Officer & Treasurer
Slide 14: Quarterly Gross Profit
BlueLinx Holdings Inc. Quarterly Gross Profit $ millions (unaudited ) 2Q05 2Q06 Increase/ Actual Actual (Decrease) Percent Sales $1,487.0 $1,379.0 $(108.0) (7.3%) Cost of Sales 1,371.3 1,242.6 (128.7) (9.4%) Gross Profit $115.7 $ 136.4 $ 20.7 17.9% Gross Margin % 7.8% 9.9% 2.1%
Slide 15: Quarterly Operating Income
BlueLinx Holdings Inc. Quarterly Operating Income $ millions (unaudited) 2Q05 2Q06 Increase/ Actual Actual (Decrease) Percent Gross Profit $115.7 $136.4 $ 20.7 17.9% Operating Expenses SG&A 87.9 98.1 10.2 11.6% D&A 4.6 5.1 0.5 10.9% Total Operating Expenses 92.5 103.2 10.7 11.6% Operating Income $23
Slide 16: Quarterly Net Income
BlueLinx Holdings Inc. Quarterly Net Income $ millions (unaudited) 2Q05 2Q06 Increase/ Actual Actual (Decrease)Percent Operating Income $23.2 $33.2 $ 10.043.1% Interest Expense 10.7 12.3 1.615.0% Other Expense/(Income)0.2(0.1)(0.3) NA Income before Tax $12.3 $21.0 $ 8.7 Tax Expense/(Benefit)4.58.4 3
Slide 17: Year to Date Revenue Review
BlueLinx Holdings Inc. Year to Date Revenue Review $ millions (unaudited ) YTD ‘05 YTD ‘06 Increase/ Actual Actual (Decrease) Percent Total Sales $2,838.6 $2,755.6 $(83.0) (2.9%) Variance Analysis Unit Volume Specialty Products 126.6 12.1% Structural Products (115.4) (6.3%) Unit Volume 11.2 0.4% Pri
Slide 18: Year to Date Gross Profit
BlueLinx Holdings Inc. Year to Date Gross Profit $ millions (unaudited ) YTD ‘05 YTD ‘06 Increase/ Actual Actual (Decrease) Percent Sales $2,838.6 $2,755.6 $(83.0) (2.9%) Cost of Sales 2,603.6 2,489.2 (114.4) (4.4%) Gross Profit $ 235.0 $ 266.4 $ 31.4 13.4% Gross Margin % 8.3% 9.7% 1.4%
Slide 19: Year to Date Operating Income
BlueLinx Holdings Inc. Year to Date Operating Income $ millions (unaudited) YTD ‘05 YTD ‘06 Increase/ Actual Actual (Decrease) Percent Gross Profit $235.0 $266.4 $ 31.4 13.4% Operating Expenses SG&A 179.4 195.4 16.0 8.9% D&A 8.8 10.1 1.3 14.8% Total Operating Expenses 188.2 205.5 17.3 9.2% Operating
Slide 20: Year to Date Net Income
BlueLinx Holdings Inc. Year to Date Net Income $ millions (unaudited) YTD ‘05 YTD ‘06 Increase/ Actual Actual (Decrease)Percent Operating Income $46.8 $60.9 $ 14.130.1% Interest Expense 20.0 23.4 3.417.0% Other Expense/(Income)0.3-(0.3) NA Income before Tax $26.5 $37.5 $ 11.0 Tax Expense/(Benefit)10
Slide 21: Quarter End Balance Sheets
BlueLinx Holdings Inc. Quarter End Balance Sheets $millions July 2, April 1,July 1, 2005 December 31, 20062006 (unaudited) 2005 (unaudited) (unaudited) Assets: Cash 27.2 24.3 27.4 27.1 Receivables, net509.5 399.1 480.5 469.1 Inventories, net 486.1 473.1 501.2 532.2 Other current assets 50.1 51.6 47.
Slide 22: Unaudited Statement of Cash Flows
BlueLinx Holdings Inc. Unaudited Statement of Cash Flows $millions YTD YTD 2005 2006 2Q05 2Q06 Actual Actual Cash flows from operating activities: Net Income $ 7.8 $ 9.6 $ 16.2 $ 19.4 Adjustments to reconcile revenues in excess of direct expenses to cash provided by operations: Depreciation and amor
Slide 23: Appendix
Appendix TOPIC PAGE Revenues by Quarter 26 Unit Volume Growth by Quarter 27 Market Growth by Quarter 28 Gross Margin by Quarter 29 Inventory by Quarter 30 Quarterly Volume by Region 31 Year to Date Volume by Region 32 Gross Margin % Analysis 33 Channel Mix Analysis 34 Structural Product Price Trends
Slide 24: Revenues by Quarter
BlueLinx Holdings Inc. Revenues by Quarter Sales $in millions 2004 (1) 2005 2006 2003 (1) 2004 (1) 2005 TTM Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Specialty (2) $ 523.0 $ 473.9 $ 501.1 $ 542.6 $ 559.9 $ 539.5 $ 580.0 $ 603.3 $ 1,688.8 $ 1,959.8 $ 2,143.1 $ 2,282.7 Structural 1,015.2 754.9 861.2 960.7 910.6 815.2 8
Slide 25: Unit Volume Growth By Quarter
BlueLinx Holdings Inc. Unit Volume Growth By Quarter Unit Volume Growth 2004 2005 2006 2003 2004 2005 TTM Q3 Q4 Q1 Q2 Q3 Q4Q1 Q2 Specialty (1) 3.0% 2.9% 1.7% 0.5% 5.8% 12.7% 14.9% 9.6% 4.4% 7.6% 5.1% 10.7% Structural Plywood 4.4% 9.7% (1.0%) (3.3%) (14.6%) (8.7%) (10.3%) (13.2%) (7.1%) 4.1% (6.7%) (
Slide 26: Market Growth By Quarter
BlueLinx Holdings Inc. Market Growth By Quarter Market Growth 2004 2005 2006 2003 2004 2005 TTM Weight Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 End Use Driver Actual Housing Starts 50.0% 4.1% (2.5%) 5.5% 6.7% 6.7% 3.0% 2.5% (9.5%) 8.4% 5.8% 5.6% 0.7% Industrial Production 22.0% 4.6% 4.2% 3.9% 3.4% 2.9% 2.7% 3.4% 3.7
Slide 27: Gross Margin by Quarter
BlueLinx Holdings Inc. Gross Margin by Quarter Gross Margin $in millions 2004 (1) 2005 2006 2003 (1) 2004 (1) 2005 TTM Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Specialty (2) (3) $ 74.3 $ 64.3 $ 63.2 $ 70.1 $ 74.2 $ 76.9 $ 80.4 $ 86.9 $ 223.2 $ 279.6 $ 284.4 $ 318.4 Structural (3) 81.7 36.1 60.6 50.7 66.6 67.8 55.7 5
Slide 28: Inventory by Quarter
BlueLinx Holdings Inc. Inventory by Quarter Inventory $in millions 2004 2005 2006 2003 2004 2005 2006 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Specialty (1) $ 262.1 $ 248.8 $ 254.7 $ 238.4 $ 228.2 $ 245.5 $ 269.1 $ 299.6 $ 181.3 $ 248.8 $ 245.5 $ 299.6 Structural 215.0 225.7 234.1 217.7 168.1 184.6 194.7 192.5 150.4
Slide 29: Quarterly Volume by Region
BlueLinx Holdings Inc. Quarterly Volume by Region $millions (unaudited ) Q2 Q2 Total $ $Unit %Unit 2005 Sales 2006 Sales Variance Variance Variance Central 248.7 217.6 (31.1) (23.8) (9.6%) Western 211.9 183.8 (28.1) (23.4) (11.0%) Mid Atlantic 263.6 238.0 (25.6) (16.9) (6.4%) Northeast 164.9 155.5 (
Slide 30: Year to Date Volume by Region
BlueLinx Holdings Inc. Year to Date Volume by Region $millions (unaudited ) YTD YTD Total $ $Unit %Unit 2005 Sales 2006 Sales Variance Variance Variance Central 474.7 440.9 (33.8) (20.0) (4.2%) Western 397.7 361.6 (36.1) (28.5) (7.2%) Mid Atlantic 502.9 479.5 (23.4) (6.8) (1.4%) Northeast 293.8 289.
Slide 31: Gross Margin % Analysis
BlueLinx Holdings Inc. Gross Margin % Analysis 2Q06 Variance from Trend Trend (3) 3Q05 4Q05 1Q06 2Q06 F/(U) Structural Products (1) Warehouse 10.6% 11.0% 12.0% 10.4% 9.5% (1.1%) Direct 4.3% 3.7% 5.1% 3.7% 4.6% 0.3% Reload 6.7% 4.2% 5.9% 4.7% 5.9% (0.8%) Total 8.1% 7.3% 8.3% 6.8% 7.0% (1.1%) Specialt
Slide 32: Revenue Channel Mix Analysis
BlueLinx Holdings Inc. Revenue Channel Mix Analysis 2Q06 Variance from Trend Trend (1) 3Q05 4Q05 1Q06 2Q06 F/(U) Structural Products Warehouse 57.2% 48.7% 45.1% 44.9% 44.6% (12.6%) Direct 33.6% 36.3% 40.7% 41.4% 39.3% 5.7% Reload 9.2% 15.0% 14.2% 13.7% 16.1% 6.9% Total 100.0% 100.0% 100.0% 100.0% 10
Slide 33: Structural Products Price Trends
BlueLinx Holdings Inc. Structural Products Price Trends Oriented Strand Board Price Trend 2003 — 2006 YTD Plywood Price Trend 2003-2006 YTD Oriented Strand Board 7/16” North Central Zone Southern Sheathing 15/32” 4 Ply. West Zone $550 $550 $500 $500 $450 $450 $400 $400 $350 $350 $300 $300 $250 $250