Bluelinx Holdings Inc. · NYSE:BXC
Bluelinx — Q4 2022 Earnings Presentation
36 slides from Bluelinx's earnings presentation, Feb 22, 2023
Slide 1: BlueLinx Q4 & Full Year 2022 Results
BlueLinx Q4 & Full Year 2022 Results Delivering What Matters February 22, 2023 © BlueLinx 2023. All Rights Reserved. 1
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 Opening Remarks Dwight Gibson, President & CEO 3
Slide 4: Delivering What Matters
DELIVERING WHAT MATTERS ▪ Net sales of $4.5b / up 4% year-over-year ✓ Delivered strong full year 2022 results ✓ Delivered strong full year 2022 results ▪ Adjusted EBITDA of $478m – an all-time high ▪ Operating Cash Flow of $400m, Free Cash Flow of $364m ✓ Solid Q4 results highlighted by record cash
Slide 5: Fourth Quarter 2022 Results
FOURTH QUARTER 2022 RESULTS Explosive profitable growth with a highly engaged team Q4 22 solid despite market headwinds, YoY variances driven by strong Q4 21 Sales by Product Category ▪ Net sales of $848m, down 13% year-over-year ❑ Q4 21 included benefit from very strong demand and high commodity pr
Slide 6: Full Year 2022 Results
FULL YEAR 2022 RESULTS Excellent full year results with increased sales and strong cash flow Sales and Gross Margin % ▪ Net sales of $4.5b, up 4% year-over-year $4.3b $4.5b ❑ Specialty product sales increased 14% to $2.9b $3.1b 18.7% 18.2% 15.4% ▪ Gross profit of $833m, up 7% year-over-year ❑ 18.7%
Slide 7: Quarterly Results
QUARTERLY RESULTS ($ millions) Q4 2022: $973 ▪ Strong sales in a slowing market environment $865 11.5% $848 ▪ Adjusted EBITDA margin of 7%+ ▪ Net leverage reduced to 0.6x from 1.1x in Q4 21 $613 7.4% 4.5% Overall improvements: 1.8% ▪ Rigorous structural inventory management: 4Q19 4Q20 4Q21 4Q22 Net
Slide 8: U.S. Housing Industry
U.S. HOUSING INDUSTRY ▪ Home affordability under pressure ❑ Mortgage rates have more than doubled over the past year BLUELINX SALES BY END MARKET ❑ Home price appreciation ❑ Broad-based inflation ▪ New home starts expected to slow in 2023 New Home ❑ U.S. new home supply now at ~9 months(1) Construct
Slide 9: U.S. Housing Industry
U.S. HOUSING INDUSTRY Average quarterly prices for framing lumber ($/MBF) Supply/Cost Environment and structural panels ($/MSF) (per RISI(1)): ▪ Average lumber and panel prices declined 23% and 21%, $1,700 $1,566 respectively, from Q3 22 to Q4 22 $1,500 $1,300 $1,232 ▪ From the end of December to mi
Slide 10: Financial Review
Financial Review Kelly Janzen, Chief Financial Officer 10
Slide 11: Fourth Quarter 2022 Results
FOURTH QUARTER 2022 RESULTS $ millions, except per share data Q4 Q4 Variance Q4 Variance Q4 year-over-year analysis 2022 2021 vs. 2022 2020 vs. 2022 ▪ Net sales decreased 13% to $848m Net sales $848 $973 (13%) $865 (2%) ❑ Specialty product sales down 8% ❑ Structural product sales down 23% Gross Prof
Slide 12: Full Year 2022 Results
FULL YEAR 2022 RESULTS $ millions, except per share data 2022 2021 Variance FY 2022 year-over-year analysis ▪ Net sales increased 4% to $4.5b Net sales $4.5b $4.3b +4% ❑ Specialty product sales grew 14% ❑ Structural product sales down 10% Gross Profit $833 $778 +7% ▪ Gross Margin of 18.7%, up 50 bps
Slide 13: Working Capital
WORKING CAPITAL Operating Working Days Sales of Inventory (DSI) ▪ Significant return on Capital Management(1) Number of Days 67 working capital, 54% for Dollars in millions 58 FY 2022 54 50 48 47 $1,000 80% 43 $918 39 $904 35 $883 ▪ $34m decrease in $900 $866 70% operating working capital $800 60% f
Slide 14: Specialty Products Q4 2022 Results
SPECIALTY PRODUCTS Q4 2022 RESULTS Q4 year-over-year analysis ($ millions) $768 $788 $724 ▪ Net sales down 8%, or $50m GM Rate Net sales $675 ▪ Volume down 14% $641 $641 ▪ Maintained pricing discipline 24.4% $592 $563 24.0% ▪ Specialty sales increased to 70% of total 23.0% 22.9% $499 21.9% ▪ Gross m
Slide 15: Structural Products Q4 2022 Results
STRUCTURAL PRODUCTS Q4 2022 RESULTS Q4 year-over-year analysis ($ millions) ▪ Net sales decreased 23%, or $75m $633 ▪ Reflects year-over-year lower average pricing for commodities: $534 ❑ 36% decrease in average price of lumber GM Rate Net sales ❑ 26% decrease in average price of panels $462 $452 ▪
Slide 16: Balance Sheet
BALANCE SHEET ($ millions) Gross Debt Structure Debt Maturity Schedule $350* $605 $575 $573 $300 $43 ABL @ ~2% $288 $300 $300 undrawn $300m Senior Notes @ 6% revolver $273 $275 $273 Q4 2020 Q4 2021 Q4 2022 2022 2023 2024 2025 2026 2027 2028 2029 Finance Leases Revolver Term Loan Senior Notes Note: d
Slide 17: Capital Allocation Framework
CAPITAL ALLOCATION FRAMEWORK GUIDING PRINCIPLES ▪ Maintain strong balance sheet and OPERATING CASH FLOW FREE CASH FLOW financial stability ▪ Long-term net leverage could increase to at or around 3.0x when INVEST IN THE STRATEGIC SHARE considering growth BUSINESS ACQUISITIONS REPURCHASES ▪ Invest in
Slide 18: Executive Summary
Executive Summary Dwight DwightGibson, Gibson, President Presidentand andCEO CEO 18
Slide 19: BlueLinx: Delivering What Matters
BLUELINX 1 2 3 Attractive BlueLinx is well Leveraging market positioned to grow growth ▪ >$40b addressable market(1) ▪ ~10% market share ▪ Optimizing productivity ▪ Fragmented competition ▪ Strong financial position ▪ Driving performance BlueLinx: Delivering What Matters Put people First. Invest in
Slide 20: Delivering What Matters: Accelerating Growth, Optimizing Productivity
DELIVERING WHAT MATTERS Accelerating Growth Optimizing Productivity Accelerating growth with our best customers and Optimizing productivity thru distribution center our best specialty products optimization and procurement excellence North America’s Preeminent Building Products Distributor Creating V
Slide 21: Delivering What Matters
DELIVERING WHAT MATTERS ▪ In 2022 we delivered exceptional results: ✓ Net sales of $4.5b, up 4% year-over-year ✓ Adjusted EPS of $32.55, up 10% year-over-year ✓ Adjusted EBITDA of $478m, up 3% year-over-year ✓ Operating cash of $400m, up ~3x year-over-year ▪ Closely monitoring the US housing industr
Slide 22: Appendix
Appendix BLUELINX 2
Slide 23: 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 24: Macro Trends
MACRO TRENDS 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 be below 25-year $500 remodeling spend expected to 1,600 average but above 2009-2011 levels grow modest
Slide 25: Macro Trends
MACRO TRENDS Household Owners’ Equity Levels in Real Estate Dollars in billions (1) $35,000 record levels of home equity $30,000 $25,000 $20,000 $15,000 $10,000 $5,000 $0 Apr-84 Apr-93 Apr-02 Apr-11 Apr-20 Jan-82 Jan-91 Jan-00 Jan-09 Jan-18 Oct-88 Jul-95 Oct-97 Oct-06 Oct-15 Jul-86 Jul-04 Jul-13 Jul
Slide 26: Wood-Based Commodity Price Trends
WOOD-BASED COMMODITY PRICE TRENDS Framing Lumber Composite Index ▪ Prices declined throughout Q4; As of February 2023(1) from the beginning of October 1,600 Index Price TTM Avg. Index Price to the end of December, lumber 1,400 Feb-23 framing lumber prices are 26% lower than the 5-year average and 37
Slide 27: 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 – Q4 2022 In millions where dollars are presented 27
Slide 28: Non-GAAP Reconciliation / supplementary financial information
Non-GAAP Reconciliation / supplementary financial information Adjusted EBITDA reconciliation by fiscal quarter, Q4 2019 – Q4 2022 In millions where dollars are presented 28
Slide 29: Non-GAAP Reconciliation / supplementary financial information
Non-GAAP Reconciliation / supplementary financial information Adjusted EBITDA reconciliation for the twelve-month periods, Q4 2022 – Q4 2019 In millions where dollars are presented 29
Slide 30: Non-GAAP Reconciliation / supplementary financial information
Non-GAAP Reconciliation / supplementary financial information Free cash flow for the three and twelve months ended, Q4 2022 and Q4 2021 In millions where dollars are presented 30
Slide 31: Non-GAAP Reconciliation / supplementary financial information
Non-GAAP Reconciliation / supplementary financial information Working capital by fiscal quarter, Q4 2020 – Q4 2022 In millions where dollars are presented 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 December 2022 with accompanying Adjusted EBITDA reconciliation In millions where dollars are presented 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 2021 with accompanying Adjusted EBITDA reconciliation In millions where dollars are presented 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 2020 with accompanying Adjusted EBITDA reconciliation In millions where dollars are presented 34
Slide 35: 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 35
Slide 36: Non-GAAP Reconciliation / supplementary financial information
Non-GAAP Reconciliation / supplementary financial information Adjusted Net Income and Adjusted Diluted Income per Share reconciliation for the three and twelve-month periods ended December 2022, 2021, and 2020 In thousands where dollars are presented, except per share data (1) Tax impact calculated