Bluelinx Holdings Inc. · NYSE:BXC
Bluelinx — Barclays Industrial Distribution Forum 2012
49 slides from Bluelinx's conference presentation, Dec 6, 2012
Slide 1: BlueLinx Holdings Inc. Barclays Industrial Distribution Forum 2012
BlueLinx Holdings Inc. Barclays Industrial Distribution Forum 2012
Slide 2: Forward-Looking Statement Safe Harbor
BlueLinx Holdings Inc. 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 tha
Slide 3: Contents
Contents • Executive Summary • Key Investment Merits • Industry Overview • Financial Overview • Appendix 3 www.bluelinxco.com
Slide 4: Executive Summary
eee BlueLinx Executive Summary
Slide 5: Company Overview
Company Overview • Leading provider of building products distribution 2011 Sales by Product Category services with over 50 U.S. locations • Most comprehensive nationwide footprint in the Specialty Structural highly fragmented building products distribution industry • Deliver over 10,000 specialty an
Slide 6: Company History & Timeline
Company History & Timeline An evolution of BlueLinx’ business strategy 2006-Present 1994 BlueLinx begins to increase The Division program and private label 2011 restructures it vast May 2004 initiatives, lessen dependence BlueLinx introduces 1954 independent Georgia-Pacific sells the on Georgia-Paci
Slide 7: Business Strategy
Business Strategy Continue • Specialty products have grown from • Private label products yield higher Emphasizing 44% of sales to 60% of sales over margins and strengthen customer Cultivate Private Higher Margin, the last five years relationships Label Products Specialty • Gross profit margin grows
Slide 8: The Right Products…To The Right Place…
The Right Products…To The Right Place… Product resources, knowledgeable staff & nationwide foot print make us a valuable partner to vendors and customers - ensuring products make it to the right place at the right time Industrial & Single-Family Housing Starts Manufactured 39% Housing 24% Multi-Fami
Slide 9: Key Investment Merits
Key Investment Merits
Slide 10: Key Investment Merits
Key Investment Merits Leading, National Distribution Platform Comprehensive Product Offering With Substantially Improved Mix State-of-the-Art Technology & Logistics Unique Centralized Model Diversified Established Customer Base Proven, Entrepreneurial Management Team Upside Opportunity from Rebound
Slide 11: Leading, National Distribution Platform
Leading, National Distribution Platform • Leading distributor of building products in North America with 50+ facilities across the United States – Only “pure” distributor among five largest distributors • Comprehensive nationwide presence critical to blue-chip suppliers, national dealers, and home i
Slide 12: Comprehensive Product Offering
Comprehensive Product Offering… • One of the industry’s broadest product offerings with over 10,000 branded and private-label products encompassing 70,000 SKUs • Provides significant cross-selling opportunities to drive BlueLinx’ revenue growth across multiple product lines • Simplified single sourc
Slide 13: Comprehensive Product Offering: Milling and Fabrication Services
Comprehensive Product Offering… Milling and Fabrication Services BlueLinx offers a wide array of custom cutting and fabrication services for the building products industry. Specializing in: • Hardwood and softwood lumber • Panel products such as plywood, OSB, particleboard, MDF, melamine • Metal 13
Slide 14: …With Substantially Improved Mix
…With Substantially Improved Mix Gross Revenue Gross Margin Dollars 2006 2011 2006 2011 40% 32% 39% 56% 60% 61% 44 % 68% Structural Specialty Structural Specialty Specialty Products Structural Products ($ in Millions) $3,2 00 11% $2,4 00 $2 ,19 7 14 .7% 15% $2 ,788 14 .6% 9.9 % 9.6 % 9.4 % 10% $1,80
Slide 15: State-of-the-Art Technology & Logistics
State-of-the-Art Technology & Logistics • Superior, proprietary systems provide real-time information to manage inventory levels, optimize logistics, and analyze profitability by product, customer, and location – Provides unmatched market intelligence – Improves operational efficiency – Enhances cus
Slide 16: Unique, Centralized Model
Unique, Centralized Model • Unique and powerful model leveraging BlueLinx’ superior information systems and infrastructure to facilitate centralized management while maintaining teams focused on local market and customer needs – Efficient, informed, decision making coordinated across the platform •
Slide 17: Diversified, Established Customer Base
Diversified, Established Customer Base • National distributor of building products to over 11,500 customers with approximately 25,000 locations • Offers customers superior, reliable service, break bulk quantities, near 100% fill rates, reduced inventory costs, and a wide variety of distribution serv
Slide 18: Proven, Entrepreneurial Management Team
Proven, Entrepreneurial Management Team Summary Employees • Management possesses deep industry • Highly stable employee base knowledge and distribution expertise • BlueLinx maintains excellent relations with • Executive management has been with the its workforce and representing unions Company for a
Slide 19: Executive Management
Executive Management Industry Years at Name & Title Experience BlueLinx 1 George Judd, CEO and President 28 28 • CEO and board member since 2008 • Previously President & COO starting in May 2004 • Previous positions include National Sales Mgr and VP of Sales and Eastern Operations Doug Goforth, Seni
Slide 20: Upside Opportunity from Rebound in Housing
Upside Opportunity from Rebound in Housing • Favorable demographic trends and the resulting household formation data strongly support a return to normalized levels of residential new construction • Longer term these trends support a return to a “normalized” or mid-cycle level of housing starts in th
Slide 21: Well Positioned to Take Advantage of Developing Housing Recovery
Well Positioned to Take Advantage of Developing Housing Recovery Summary • Strong relationships with specialty product manufacturers, brand name products, and sales expertise necessary to continue specialty products growth strategy, while also focusing on offering premium brand structural products •
Slide 22: Industry Overview
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Slide 23: Residential New Construction Market
Residential New Construction Market 2,000 Multi-Family 1,800 • Consensus estimates show housing starts of 1,801 -25% Single-Family 1,600 759,000 for 2012, rising to 931,000 for 2013 1,400 -33% 1,200 1,355 23% as housing fundamentals strengthen 1,000 -39% 6% 4% 25% 800 906 931 1,465 759 600 Source: A
Slide 24: Residential Improvements Market
• Growth in the residential improvements market will be driven by rising existing home sales, the high percentage of distressed sales, and homeowners choosing to fix up rather than move up • Limiting expenditures will be slow income and employment growth • The U.S. Residential Improvements market is
Slide 25: Financial Overview
BlueLinx Financial Overview Produets lable
Slide 26: Improving Financial Performance
Improving Financial Performance • Despite market downturn, management increased revenue from $1.65 billion in 2009 to $1.76 billion in 2011 • Increasing gross margin percentage with product mix shift to specialty category distinctly differentiates BlueLinx in the supply chain by positioning it to cr
Slide 27: Enhanced Revenue Mix
Enhanced Revenue Mix • Revenue growth is highly correlated to the expected rebound in residential new construction housing starts • Management has focused on expanding sales of more profitable specialty products • Specialty products are expected to account for 60% of total sales, even as structural
Slide 28: Improved Gross Margin Profile
Improved Gross Margin Profile • Focus on global sourcing and increasing product mix have driven increased profit margins Historical Gross Margins ($ in Millions) $ 600 13.0% 12.0% $ 500 11.7% 11.7% 12.0% $ 480 11.3% $ 400 $ 392 11.0% $ 300 10.2% $ 315 10.0% $ 200 9.8% $ 211 $ 210 $ 193 9.0% $ 100 $
Slide 29: Controlled Operating Expenses
Controlled Operating Expenses • Strategic cost-cutting measures since 2006 include elimination of $95 million of annual fixed expenses Historical Operating Expenses (1) ($ in Millions) $ 500 16.0% 14.4% 13.2% 13.1% $ 400 11.7% $ 402 12.0% $ 394 $ 300 $ 324 10.3% 8.0% 8.2% $ 238 $ 237 $ 232 $ 200 4.0
Slide 30: Effective Working Capital Management
Effective Working Capital Management • Advanced information and logistics technology allow management to effectively forecast supply and demand to limit inventory requirements and optimize working capital investments Working Capital and Turnover ($ in Millions) $600 14x $509 $500 $440 11.5x 12x $400
Slide 31: Limited Future Capital Expenditures
Limited Future Capital Expenditures • Over $35 million invested over the past six years to drive productivity improvements and to maintain and upgrade facilities, equipment, and information systems • Lower volume and corresponding reduced mileage over the past four years required limited capital inv
Slide 32: Quarterly Highlights
Quarterly Highlights Financial Summary ($ in Millions) 3 rd Quarter Highlights • Revenue Up 5.1% to $496.8 million • Housing Starts Total starts increased 27.7% from the same period last year; Single family starts increased 29.0% from the same period last year • Prices Average 3Q ‘12 benchmark wood-
Slide 33: Quarterly Review
Quarterly Review Specialty Structural Other Specialty Structural Revenues % by Product ($ in millions) 58% YOY $23.9 or 5.1% 61% $517.0 $496.8 $472.9 $453.7 $391.1 215.7 211.4 39% 186.6 182.9 164.9 42 % 291.1 268.1 307.9 288.9 236.4 3Q ‘11 4Q ‘11 1Q ‘12 2Q ‘12 3Q ‘12 3Q ‘11 3Q ‘12 Variance Analysis
Slide 34: 2012 Q3 YTD Results
2012 Q3 YTD Results Revenues Operating Expenses ($ in millions) ($ in millions) $1,467.5 YTD ‘11 $167.9 $1,364.3 YTD ‘12 $167.9 YTD ‘11 YTD ‘12 Significant Special Items YTD YTD Variance ‘11 ‘12 Gain on insurance settlement $1.2 $0.5 $0.7 Gain on real estate $6.9 $9.7 ($2.8) Other $0.7 - $0.7 Total
Slide 35: Cash Flows
Cash Flows Unaudited (in million’s) Q311 Q411 Q112 Q212 Q312 TTM 2012 TTM 2011 Cash flows from operating activities: Net loss $ (6.2) $ (10.4) $ (11.0) $ (3.7) $ 3.1 $ (21.9) $ (48.6) Adjustments to reconcile net loss to net cash provided by (used in) operations: Depreciation and amortization 2.6 2.
Slide 36: Debt
Debt Debt $ in millions January 1, April 2, July 2, October 1, December 31, March 31, June 30, September 29, 2011 2011 2011 2011 2011 2012 2012 2012 Revolving Credit Facilities $ 97.2 $ 140.4 $ 188.9 $ 118.5 $ 94.5 $ 177.7 $ 206.7 $ 185.2 Mortgage 285.7 285.7 285.7 246.9 243.2 236.1 235.5 234.9 TOTA
Slide 37: Cash Cycle
Cash Cycle Cash Cycle Days Cash Cycle Days (in days) 58 57 59 59 100 56 80 36 36 37 36 A/R 60 34 40 49 48 49 49 49 INV 20 0 (27) (26) (27) (26) A/P & OD’s (28) -20 -40 3Q ‘11 4Q ‘11 1Q ‘12 2Q ‘12 3Q ‘12 TTM Cash Cycle days at 59, flat sequentially and up 1 day compared to the prior year quarter Cash
Slide 38: Appendix
Appendix
Slide 39: Profit & Loss Statement by Quarter
Profit & Loss Statement by Quarter Profit & Loss Statement $ in millions (1) , except per share amounts 2010 2011 2012 2010 2011 2012 TTM Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Sales $ 367.9 $ 390.6 $ 500.8 $ 472.9 $ 391.1 $ 453.7 $ 517.0 $ 496.8 $ 1,804.4 $ 1,755.4 $ 1,858.6 Cost of Goods Sold 323.6 344.3 443.2 4
Slide 40: Revenues by Quarter
Revenues by Quarter Sales $ in millions 2010 2011 2012 2010 2011 2012 TTM Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Specialty $ 216.8 $ 230.7 $ 309.9 $ 291.1 $ 236.4 $ 268.1 $ 307.9 $ 288.9 $ 985.4 $ 1,068.2 $ 1,101.3 Structural 154.2 160.8 192.6 186.6 164.9 182.9 215.7 211.4 834.8 704.9 774.9 Other (1) (3.1) (0.9) (
Slide 41: Revenue Channel Mix Analysis
Revenue Channel Mix Analysis 3Q12 Variance from Year 3Q11 4Q11 1Q12 2Q12 3Q12 Ago Qtr Structural Products Warehouse 68.4% 70.5% 71.9% 71.8% 73.2% 4.8% Direct 19.8% 19.2% 18.6% 17.1% 17.6% (2.2%) Reload 11.8% 10.3% 9.5% 11.1% 9.2% (2.6%) Total 100.0% 100.0% 100.0% 100.0% 100.0% 0.0% Specialty Product
Slide 42: Unit Volume by Quarter
Unit Volume by Quarter Unit Volume Change 2010 2011 2012 2010 2011 2012 TTM Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Specialty 5.9% (0.2%) 10.7% 11.4% 6.6% 12.4% (2.3%) (1.0%) 5.7% 7.4% 3.1% Structural (16.5%) (25.2%) (18.8%) (14.0%) 2.8% 9.4% 0.4% (3.3%) (2.5%) (15.1%) 2.2% Total (4.3%) (11.8%) (3.5%) 0.1% 5.0% 11.
Slide 43: Gross Margin by Quarter
Gross Margin by Quarter Gross Margin $ in millions 2010 2011 2012 2010 2011 2012 TTM Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Specialty (1) $ 28.0 $ 28.1 $ 38.9 $ 38.9 $ 31.5 $ 33.7 $ 41.1 $ 38.1 $ 129.2 $ 137.3 $ 144.4 Structural (1) 14.1 16.8 15.6 17.8 14.6 18.0 20.4 21.0 73.5 64.8 74.0 Other (2) 2.3 1.5 3.1 1.6 1
Slide 44: Gross Margin % Analysis
Gross Margin % Analysis 3Q12 Variance from Year 3Q11 4Q11 1Q12 2Q12 3Q12 Ago Qtr Structural Products (1) Warehouse 12.1% 11.0% 12.3% 11.7% 12.2% 0.1% Direct 3.6% 3.6% 3.4% 3.6% 3.5% (0.1%) Reload 4.9% 4.5% 4.4% 3.8% 4.5% (0.4%) Total 9.6% 8.9% 9.9% 9.5% 9.9% 0.3% Specialty Products (1) Warehouse 16.
Slide 45: Operating Expense by Quarter
Operating Expense by Quarter Operating Expense (1) $ in millions 2010 2011 2012 2010 2011 2012 TTM Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Payroll & related $36.6 $37.8 $37.9 $38.1 $35.5 $38.5 $38.3 $37.2 $151.8 $149.3 $149.5 General maintenance 5.0 5.1 5.6 5.3 5.4 5.2 5.5 5.6 20.6 21.4 21.7 Depreciation and amorti
Slide 46: Structural Products Price Trend
($/mbf) ($/msf - 3/8”) 20 0 $100 $150 $200 $250 $300 $350 $400 $450 $100 $150 $200 $250 $300 $350 $400 $450 6Q 1 20 20 2006Q 1 2 06Q 2 0 0 6Q 2 06Q 3 20 20 2006Q 3 06Q 4 06 20 Q 4 07Q 1 20 20 07Q 1 07Q 2 20 20 07Q 2 07Q 3 20 20 207Q 3 07Q 4 0 20 07Q 4 08Q 1 20 20 08Q 1 08Q 2 20 20 08Q 2 08Q 3 20 20
Slide 47: Reconciliation of GAAP to Non-GAAP: Net Debt
Reconciliation of GAAP to Non-GAAP BlueLinx Holdings Inc. Unaudited Reconciliation of GAAP Debt to Non-GAAP Net Debt in millions October 1, December 31, September 29, 2011 2011 2012 (unaudited) (unaudited) (unaudited) Revolving Credit Facilities $ 118.5 $ 94.5 $ 185.2 Mortgage 246.9 243.2 234.9 TOTA
Slide 48: Reconciliation of GAAP to Non-GAAP: EBITDA
Reconciliation of GAAP to Non-GAAP BlueLinx Holdings Inc. Unaudited Reconciliation of GAAP Net cash used in operating activities to Non-GAAP EBITDA (1) in millions Nine Months Ended September 29, October 1, 2012 2011 GAAP net cash used in operating activities $ (86.7) $ (83.8) Adjustments: Amortizat
Slide 49: Additional information for BlueLinx
Additional information for Bluelinx can be found at our website or by contacting: Maryon Davis Director – Finance & Investor Relations Maryon.Davis@bluelinxco.com (770) 221-2666 www.bluelinxco.com
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