Bluelinx Holdings Inc. · NYSE:BXC
Bluelinx — Investor Presentation (May 2006)
43 slides from Bluelinx's investor presentation, May 16, 2006
Slide 1: BlueLinx Investor Presentation May 2006
BlueLinx Investor Presentation May 2006
Slide 2: Safe Harbor Statement
Safe Harbor Statement 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 that
Slide 3: BlueLinx Investor Presentation May 2006
BlueLinx Investor Presentation May 2006 BlueLinx Overview Industry Dynamics Focused Growth Strategy 2006 Q1 Update Looking Forward
Slide 4: Overview: Operations
BlueLinx Overview: Operations « Sales Center Warehouse LSV Largest Building Products Distributor in U.S. 2005 Revenue: $5.6 Billion ~12,000 customers and 750+ suppliers Product portfolio 10,000+ SKUs 65+ warehouses; 80+ reloads Owned fleet of 900 trucks and 1,200 trailers 3,600 employees, including
Slide 5: Overview: Evolution of BlueLinx
BlueLinx Overview: Evolution of BlueLinx Growth Strategy Decentralized structure 13 warehouses Outlet for GP Plywood Diversified building products distributor Centralized, nationwide distribution transition "Masters" of the supply chain Decentralized structure 134 warehouses 1954 - 1976 1977 - 1993
Slide 6: Overview: Positioned at the Center of Value Creation
BlueLinx Overview: Positioned at the Center of Value Creation Building Products Manufacturers BlueLinx Home Improvement Centers Dealers Repair and Remodeling Residential and Non- Residential Construction Manufactured Housing / Industrial Benefits to Manufacturers Reliable channels to market Consiste
Slide 7: Overview: Diversified Product, Customer & End Use Segments
BlueLinx Overview: Diversified Product, Customer & End Use Segments Structural 58% Hardwood plywood Engineered lumber Composite decking Vinyl siding Moulding Insulation Roofing Specialty 42% Plywood OSB Lumber Rebar/Remesh New Home Construction 50% Industrial Applications 22% Manufactured Housing 8%
Slide 8: Overview: Diversified Product, Vendor Relationships
BlueLinx Overview: Diversified Product, Vendor Relationships Diversified Product, Vendor Relationships Diversified Product, Vendor Relationships Diversified Product, Vendor Relationships Diversified Product, Vendor Relationships Diversified Product, Vendor Relationships Diversified Product, Vendor R
Slide 9: Overview: Strategic Objectives
BlueLinx Overview: Strategic Objectives Profitably grow specialty revenues to 60+ % of total sales Profitably grow structural revenues while reducing exposure to volatility Outgrow the market over the long term Be the Masters of the Supply Chain for those products we choose to distribute
Slide 10: Overview: Evolving to Achieve Our Objectives
BlueLinx Overview: Evolving to Achieve Our Objectives Commodities-focused, distribution arm of manufacturer Customer-focused, solutions-driven, value- added distribution partner 55%+ structural products FROM: TO: 60%+ specialty products Structural products- driven earnings volatility Specialty produ
Slide 11: Overview: Experienced Leadership Team
BlueLinx Overview: Experienced Leadership Team Management Team Leadership Background Stephen Macadam CEO George Judd COO David Morris CFO Steve Skinner SVP Duane Goodwin SVP Dave Dalton SVP Sam Gaddis VP 6 Regional VPs RVP CEO Consolidated Container; EVP Georgia-Pacific; McKinsey & Co. VP Eastern op
Slide 12: Overview: How We Think About Our Business Going Forward
BlueLinx Overview: How We Think About Our Business Going Forward 2006 Outlook Housing Uncertainties Starts beginning to slow Inventories rising Expect 2006 housing starts at 1.8-1.9 million, down ~10% YOY Manufactured Housing emerging from recession Repair & Remodel, Industrial Production and Non-Re
Slide 13: BlueLinx Overview Industry Dynamics Focused Growth Strategy
BlueLinx Investor Presentation May 2006 BlueLinx Overview Industry Dynamics Focused Growth Strategy 2006 Q1 Update Looking Forward
Slide 14: Growing & Attractive Industry: Solid Long-Term Industry Fundamentals
1991-2000 Avg 0.028 2001-2005 Avg -0.021 2006E-2015E Avg 0.023 Growing & Attractive Industry: Solid Long-Term Industry Fundamentals 1991-2000 Avg 1.4 2001-2005 Avg 1.8 2006E-2015E Avg 1.8 Annual Housing Starts (mm) Annual Unit Volume Growth In Other End-Use Markets 50% of Our End-Market 50% of Our E
Slide 15: Growing & Attractive Industry: Market Growth of Two-Step Distribution
Growing & Attractive Industry: Market Growth of Two-Step Distribution 2001 2002 2003 2004 Total Market Revenue 32.9 36.4 39.2 47.1 Source: Home Channel News, July 2005
Slide 16: Largest in a Highly Fragmented Industry, Ripe for Consolidation
BlueLinx 11.8 WY 11.1 Boise Cascade 6 North Pacific Group 4.2 Huttig 2 Other 64.6 Many Small and Medium Sized Players <$250m 100 $250m - $500m 13 $500m - $1bn 6 $1bn-$2.5bn 5 >$2.5bn 3 Number of Competitors By Revenue Growing & Attractive Industry: Largest in a Highly Fragmented Industry, Ripe for C
Slide 17: BlueLinx Overview Industry Dynamics Focused Growth Strategy
BlueLinx Investor Presentation May 2006 BlueLinx Overview Industry Dynamics Focused Growth Strategy 2006 Q1 Update Looking Forward
Slide 18: Focused Growth Strategy: BXC Strategic Framework
Focused Growth Strategy: BXC Strategic Framework Mission: "Be the Masters of the Supply Chain for those products we choose to distribute." Value Proposition: Provide the lowest total cost of sales and distribution through the supply chain Drive end-user demand, thereby increasing sales for our custo
Slide 19: Specialty Products - Four-Part Strategy
Focused Growth Strategy: Specialty Products - Four-Part Strategy Team with Manufacturers to Introduce New Products Continuing national roll-out of Louisiana-Pacific's WeatherBest composite decking Beginning distribution of L-P's SmartSide engineered wood siding, soffit and trim Executing systematic,
Slide 20: Specialty Highlight - Introducing New Products
Focused Growth Strategy: Specialty Highlight - Introducing New Products Specialty Highlight - Introducing New Products Specialty Highlight - Introducing New Products Chosen in September by Louisiana-Pacific to nationally distribute its WeatherBest composite decking product All 1,000 BlueLinx sales e
Slide 21: Specialty Highlight - Working to Grow Share in Industrials
Objective & Rationale Grow market share in Industrials Industrials represent ~22% of end-use markets; currently have ~3% market share Offers high contribution margin and increases specialty product opportunities Strategy Identify & pursue "high-opportunity" geographic areas with strong manufacturing
Slide 22: Structural Products - Effective Inventory Management
Focused Growth Strategy: Structural Products - Effective Inventory Management Focus on improved profitability and reduced risk In 2005, reduced "high risk" structural inventory by $41 million, or 18% from 2004 Q1 structural inventory down 17% from year ago Increased utilization of consignment and pr
Slide 23: Outgrow the Market Over the Long Term
Focused Growth Strategy: Outgrow the Market Over the Long Term Market Share Growth* 2002 0.104 2003 0.109 2004 0.118 Unit Volume Growth vs. End-Use Market Year over Year Change Weighted End-Use Market Growth BlueLinx Growth 2003 0.02 0.025 2004 0.047 0.082 2005 0.044 0.039 Q1 '06(TTM) 0.041 0.043 *S
Slide 24: Initiatives to Leverage Our Scaleable Platform
Focused Growth Strategy: Initiatives to Leverage Our Scaleable Platform to Drive Superior Returns Market Share Growth Goals Growth Drivers & Accelerators Increase growth of specialty products Effectively manage structural products Outgrow our markets Consultative, solution-based selling Disciplined
Slide 25: BlueLinx Overview Industry Dynamics Focused Growth Strategy
BlueLinx Investor Presentation May 2006 BlueLinx Overview Industry Dynamics Focused Growth Strategy 2006 Q1 Update Looking Forward
Slide 26: 2006 Q1 Update: Accelerating Specialty Growth
2006 Q1 Update: Accelerating Specialty Growth Q1 '05 Q2 '05 Q3 '05 Q4 '05 Q1 '06 % of Total Revenue 0.37 0.36 0.39 0.41 0.42 % of GM 0.53 0.61 0.54 0.55 0.62 Q1 '05 Q2 '05 Q3 '05 Q4 '05 Q1 '06 Structural 0.042 0.064 9.0000000013148E-03 0.002 -0.008 Specialty 0.017 0.005 0.058 0.127 0.149 Q1 '05 Q2 '
Slide 27: BlueLinx Overview Industry Dynamics Focused Growth Strategy
BlueLinx Investor Presentation May 2006 BlueLinx Overview Industry Dynamics Focused Growth Strategy 2005 Q4 Update Looking Forward
Slide 28: Looking Forward: 2006 Go-Forward Initiatives
Looking Forward: 2006 Go-Forward Initiatives Expand relationships with existing and new specialty product vendors who recognize the BlueLinx value proposition Continue and improve disciplined inventory management to help mitigate price volatility impact on structural products Target growing accounts
Slide 29: Appendix
Appendix TOPIC PAGE Fundamentals 31 Revenues by Quarter 32 Unit Volume Growth by Quarter 33 Market Growth by Quarter 34 Gross Margin by Quarter 35 Inventory by Quarter 36 Quarterly Volume by Region 37 Gross Margin % Analysis 38 Channel Mix Analysis 39 Structural Product Price Trends 40 Capital Struc
Slide 30: Fundamentals
BlueLinx Holdings Inc. Fundamentals* TRADING NYSE: BXC 7 Analysts Providing Research Market Capitalization $465 million Shares Outstanding 30.4 million (basic) Avg. Daily Trading Vol. 196,150 (3 m) Float (%) 33 52-Week Range $16.95 (3/14/06) -- $8.25 (8/10/05) VALUATION Dividend/yield $0.50/3.3% Deb
Slide 31: Revenues by Quarter
BlueLinx Holdings Inc. Revenues by Quarter Revenues by Quarter Revenues by Quarter
Slide 32: Unit Volume Growth By Quarter
BlueLinx Holdings Inc. Unit Volume Growth By Quarter Unit Volume Growth By Quarter Unit Volume Growth By Quarter
Slide 33: Market Growth By Quarter
BlueLinx Holdings Inc. Market Growth By Quarter Source: Data from Resource Information Systems, Inc., or RISI, updated as of April 2006, weighted using management's estimates. Source: Data from Resource Information Systems, Inc., or RISI, updated as of April 2006, weighted using management's estimat
Slide 34: Gross Margin by Quarter
BlueLinx Holdings Inc. Gross Margin by Quarter Gross Margin by Quarter Gross Margin by Quarter
Slide 35: Inventory by Quarter
BlueLinx Holdings Inc. Inventory by Quarter Inventory by Quarter Inventory by Quarter
Slide 36: Quarterly Volume by Region
BlueLinx Holdings Inc. Quarterly Volume by Region *Miscellaneous consists of cash and competitive discounts, Canadian conversion, service revenue and other miscellaneous items. $ millions (unaudited) (unaudited) (unaudited)
Slide 37: Gross Margin % Analysis
BlueLinx Holdings Inc. Gross Margin % Analysis Gross Margin % Analysis Gross Margin % Analysis
Slide 38: Revenue Channel Mix Analysis
BlueLinx Holdings Inc. Revenue Channel Mix Analysis Revenue Channel Mix Analysis Revenue Channel Mix Analysis
Slide 39: Structural Products Price Trends
BlueLinx Holdings Inc. Structural Products Price Trends Source: Data from Random Lengths Publications, Inc., updated as of April 28, 2006. Source: Data from Random Lengths Publications, Inc., updated as of April 28, 2006. Source: Data from Random Lengths Publications, Inc., updated as of April 28, 2
Slide 40: Capital Structure Position
BlueLinx Holdings Inc. Capital Structure Position BXC Leverage -- Current State BXC Leverage -- Current State All low-cost asset-based borrowing Creates low WACC Liquidity balanced to working capital needs Liquidity balanced to working capital needs Liquidity balanced to working capital needs Key Me
Slide 41: Balanced Liquidity Illustration
BlueLinx Holdings Inc. Balanced Liquidity Illustration
Slide 42: EBITDA Reconciliation
BlueLinx Holdings Inc. EBITDA Reconciliation
Slide 43: EBITDA Reconciliation
BlueLinx Holdings Inc. EBITDA Reconciliation