Bluelinx Holdings Inc. · NYSE:BXC
Bluelinx — Q2 2023 Earnings Presentation
30 slides from Bluelinx's earnings presentation, Aug 2, 2023
Slide 1: BlueLinx Q2 2023 Results
BlueLinx Q2 2023 Results Delivering What Matters August 2, 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 Shyam Reddy, President & CEO 3
Slide 4: Second Quarter 2023 Results
SECOND QUARTER 2023 RESULTS Explosive profitable growth with a highly engaged team ▪ Net sales of $816M, down 34% year-over-year Q2 23 Sales by Product Category ❑ Prior year included significant benefit from both elevated demand and inflated commodity prices ▪ Gross profit of $136M, down 33% year-ov
Slide 5: Second Quarter 2023 Results
SECOND QUARTER 2023 RESULTS ($ millions) $1,308 $1,239 Q2 23: 12.7% ▪ Adjusted EBITDA margin of 6% $816 ▪ Net leverage reduced to 0.6x from 0.9x 9.1% $699 6.0% 4.5% Overall highlights: Q2 20 Q2 21 Q2 22 Q2 23 ▪ Disciplined pricing approach supports strong specialty margin Net Sales Adj EBITDA % ▪ Ri
Slide 6: U.S. Housing Industry
U.S. HOUSING INDUSTRY ▪ Home affordability under pressure Mortgage rates remain 6%+ BLUELINX SALES BY END MARKET ❑ ❑ Home price appreciation ❑ Broad-based inflation ▪ New home starts down year-over-year; signs of stabilization ❑ Single-family housing starts have declined year-over-year through the f
Slide 7: U.S. Housing Industry
U.S. HOUSING INDUSTRY Average quarterly prices for framing lumber ($/MBF) Supply/Cost Environment and structural panels ($/MSF) (per RISI(1)): ▪ Average Q2 lumber and panel prices declined 49% and $1,800 $1,566 39%, respectively, year-over-year $1,600 $1,400 $1,232 $1,200 $1,003 $1,243 $1,244 ▪ Aver
Slide 8: Financial Review
Financial Review Kelly Janzen, Chief Financial Officer 8
Slide 9: Second Quarter 2023 Results
SECOND QUARTER 2023 RESULTS $ millions, except per share data Q2 Q2 2023 vs. Q2 Q2 Q2 Q2 year-over-year analysis 2023 Q2 2022 2022 2021 2020 Net Sales $816 (34%) $1,239 $1,308 $699 ▪ Net Sales decreased 34% to $816M Gross Profit $136 (33%) $201 $251 $101 ❑ Specialty product sales down 28% ❑ Structur
Slide 10: Working Capital
WORKING CAPITAL ▪ Return on working capital, Operating Working Days Sales of Inventory (DSI) 54% for Q2 2023 TTM Capital Management(1) Number of Days 67 Dollars in millions 58 61 54 53 48 50 $900 100% 47 ▪ $48M decrease in operating 39 $830 working capital since Q1 23 90% 35 driven by $30M sequentia
Slide 11: Specialty Products Q2 2023 Results
SPECIALTY PRODUCTS Q2 2023 RESULTS Q2 year-over-year analysis ($ millions) $788 $768 $724 ▪ Net sales down 28%, or $217M GM Rate $675 Net sales $641 $641 ▪ Volume down 14% 24.4% $592 ▪ Specialty sales is 70% of total net sales $563 24.0% $568 $571 23.0% 22.9% $496 $499 21.9% $449 ▪ Gross profit of $
Slide 12: Structural Products Q2 2023 Results
STRUCTURAL PRODUCTS Q2 2023 RESULTS Q2 year-over-year analysis ($ millions) ▪ Net sales decreased 46%, or $207M GM Rate $633 Net sales ▪ Significantly lower year-over-year average pricing for commodities: $534 ❑ 49% decrease in average price of lumber $462 ❑ 39% decrease in average price of panels $
Slide 13: Balance Sheet
BALANCE SHEET ($ millions) Gross Debt Structure Debt Maturity Schedule $350* $599 $571 $571 $300 $320 $300 $300 undrawn $300m Senior Notes @ 6% revolver $279 $271 $271 Q2 21 Q2 22 Q2 23 2022 2023 2024 2025 2026 2027 2028 2029 Finance Leases Revolver Senior Notes Note: debt maturity schedule does not
Slide 14: 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 15: Executive Summary
Executive Summary Shyam Reddy, President and CEO 15
Slide 16: 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 17: Delivering What Matters
DELIVERING WHAT MATTERS Accelerating Growth h Op Optimizing Productivity owt tim Accelerating growth with our best customers and Gr iz in Optimizing productivity thru distribution center our best specialty products ng g optimization and procurement excellence ti Pr ra od ele uc Acc tiv North America
Slide 18: Appendix
Appendix BLUELINX ®
Slide 19: Non-GAAP Measures
Non-GAAP Measures The Company 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
Slide 20: 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 $600 1,800 starts expected to be around 25-year remodeling spend expected 1,600 average and well above 2009-2011 levels $500 to
Slide 21: Wood-Based Commodity Price Trends
WOOD-BASED COMMODITY PRICE TRENDS Framing Lumber Composite Index ▪ Lumber prices stayed relatively As of Jul 2023(1) consistent throughout Q2 1,600 Index Price TTM Avg. Index Price 1,400 1,200 Jul-23 framing lumber prices are 22% lower than the 5-year average 1,000 and 2% higher than the TTM rolling
Slide 22: 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, Q2 2020 – Q2 2023 In millions where dollars are presented 22
Slide 23: Non-GAAP Reconciliation / supplementary financial information
Non-GAAP Reconciliation / supplementary financial information Adjusted EBITDA reconciliation by fiscal quarter, Q2 2020 – Q2 2023 In millions where dollars are presented 23
Slide 24: Non-GAAP Reconciliation / supplementary financial information
Non-GAAP Reconciliation / supplementary financial information Free cash flow for the three months ended Q2 2023, Q2 2022, Q2 2021, and Q2 2020 In millions where dollars are presented 24
Slide 25: Non-GAAP Reconciliation / supplementary financial information
Non-GAAP Reconciliation / supplementary financial information Working capital by fiscal quarter, Q2 2021 – Q2 2023 In millions where dollars are presented 25
Slide 26: Non-GAAP Reconciliation / supplementary financial information
Non-GAAP Reconciliation / supplementary financial information Net leverage ratio for the trailing twelve months ended Q2 2023 with accompanying Adjusted EBITDA reconciliation In millions where dollars are presented 26
Slide 27: Non-GAAP Reconciliation / supplementary financial information
Non-GAAP Reconciliation / supplementary financial information Net leverage ratio for the trailing twelve months ended Q2 2022 with accompanying Adjusted EBITDA reconciliation In millions where dollars are presented 27
Slide 28: Non-GAAP Reconciliation / supplementary financial information
Non-GAAP Reconciliation / supplementary financial information Net leverage ratio for the trailing twelve months ended Q2 2021 with accompanying Adjusted EBITDA reconciliation In millions where dollars are presented 28
Slide 29: Non-GAAP Reconciliation / supplementary financial information
Non-GAAP Reconciliation / supplementary financial information Net leverage ratio for the trailing twelve months ended Q2 2020 with accompanying Adjusted EBITDA reconciliation In millions where dollars are presented 29
Slide 30: 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-month periods ended Q2 2023, Q2 2022, Q2 2021, and Q2 2020 In thousands where dollars are presented, except per share data (1) Tax impact calculated ba