Bluelinx Holdings Inc. · NYSE:BXC
Bluelinx — Q3 2018 Earnings Presentation
23 slides from Bluelinx's earnings presentation, Nov 8, 2018
Slide 1: BlueLinx Third Quarter 2018 Earnings Webcast
BlueLinx Third Quarter 2018 Earnings Webcast
Slide 2: Notes To Investors: Forward-Looking Statements
Notes To Investors Forward-Looking Statements. This presentation includes “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. These forward-looking statements include, without limitation, any statement that may predict, forecast, indicate or imply
Slide 3: Third Quarter 2018 - Key Highlights
Third Quarter 2018 - Key Highlights Third Quarter 2018 • Q3 Pro forma Net Sales were $860 million, up $19 million from Q3 2017 • Adjusted EBITDA of $17 million; best Q3 in over a decade • Cedar Creek integration continues to move forward on schedule • Annual run-rate synergies expected to exceed $25
Slide 4: Integration Highlights
Integration Highlights ACCOMPLISHMENTS • Continue to anticipate at least $50 million in annual run-rate synergies • Consolidated facilities/fabrication in seven locations: • Consolidated facilities in Atlanta, Des Moines, Springfield, Grand Rapids, Minneapolis, Lubbock • Consolidated fabrication in
Slide 5: Significant Acquisition Synergies from Cedar Creek
Significant Acquisition Synergies from Cedar Creek • Expect annual run-rate synergies of at least $25M by end of 2018 • $10M ahead of original 2018 plan • Costs to achieve synergies estimated to be $25-$40M, down from original estimate of $40-$55M • Up to $25M of potential gross proceeds on sale of
Slide 6: Commodity Lumber and Panel Business Impacts
Commodity Lumber and Panel Business Impacts Q2 ‘18 vs. Q3 ‘18 COMMODITY PRICES Q3 ’17 vs. Q3 ’18 COMMODITY PRO FORMA NET SALES Lumber Panels OSB $600 $550 $25 $500 -17% ($12) $336 $450 -24% $323 $400 -25% $350 Q3 '17 Volume Price Q3 '18 Jun-18 Jul-18 Aug-18 Sep-18 Source: Random Lengths KEY HIGHLIGH
Slide 7: Commodity Lumber and Panel Price Volatility
Commodity Lumber and Panel Price Volatility COMMODITY MARKET OUTLOOK • Commodity price declines over 20% within a three-month period occurred only four times in the last 15 years • Decline in Q3 2018 of 24% • $17 million Gross Profit impact in Q3 represents approximately 2.0% of four-year aggregate
Slide 8: End-Use Market Outlook
End-Use Market Outlook MARKET OUTLOOK • Single Family Housing Starts up 2.4% in Q3 2018 compared to Q3 2017 • Builders Confidence Index is consistent with growing residential construction market • Average 30 year fixed-rate mortgage interest rates increased 20 bps to 4.7% at the end of Q3 2018 • U.S
Slide 9: Strategic Initiatives
Strategic Initiatives Successful Integration Emphasize Sales Enhance of Cedar Creek Growth Margins • $3B of addressable spend • Increase local customer • Emphasis on products for cost savings interaction to grow market and markets with higher opportunities share margin profiles • Identifiable and •
Slide 10: Financial Overview
Bluetinx AS America’s Building Products Distributor Financial Overview
Slide 11: Financial Summary – Third Quarter 2018
Financial Summary – Third Quarter 2018 • Net Sales of $860M, up $380M or 79% • Pro forma Net Sales of $860M, up $19M or 2% • Gross Profit of $92M1, up $31M • Pro forma Gross Profit of $93M2, down $18M • Gross Margin of 10.7%1 • Pro forma Gross Margin of 10.8%2 • Net Loss of $10M includes the followi
Slide 12: Financial Summary – YTD Third Quarter 2018
Financial Summary – YTD Third Quarter 2018 • Net Sales of $2,190M, up $808M or 59% • Pro forma Net Sales of $2,593M, up $133M or 5% • Gross Profit of $251M1, up $75M • Pro forma Gross Profit of $313M2, remained flat • Gross Margin of 11.4%1 • Pro forma Gross Margin of 12.1%2 • Net Loss of $32M inclu
Slide 13: Pro forma Net Sales and Gross Margin
Pro forma Net Sales and Gross Margin PRO FORMA NET SALES PRO FORMA GROSS MARGIN¹ Specialty 15.5% 15.5% 14.8% 14.2% Structural $860 9.3% $841 8.4% 8.6% 5.6% Q3'17 Q3'18 Q3 '15 Q3 '16 Q3 '17 Q3 '18 YEAR-OVER-YEAR HIGHLIGHTS • Pro forma Net Sales increased by $19M or 2% from the same quarter last year
Slide 14: Strong Deleveraging Potential
Strong Deleveraging Potential $ in millions Post Integration Estimated Annual Uses of Cash ~$143+ Expected Run-Rate Cost Savings ~($18) $50M+ ~($17) ~$75 ~($23) ~($5) ~($2) ~($3) Sep'18 TTM ABL Term Loan Capital Lease CapEx2 Cash Taxes2,4 Other 2,5 Cash Adj. EBITDA Interest2 Interest2 Payments2,3 Av
Slide 15: Leverage Expected to Decline
Leverage Expected to Decline $ in millions $ Amount Leverage Ratio Term Loan balance as of Q3 ’18 $179 1.3x Revolving Credit Facility balance as of Q3 ’18 (ABL) $415 2.9x Appraised Real Estate Value ($150 - $160) $150 Annual Estimated Cash Available for Debt Reduction $75 • Real Estate provides a po
Slide 16: Real Estate and NOLs Overview
Real Estate and NOLs¹ Overview $ in millions REAL ESTATE NOLs $159 $47 $150 - $160 4x Book Value $112 $37 - $40 Book Value Appraised Value Remaining NOLs NOLs used Q3 Remaining NOLs FY 2017 YTD 2018 Q3 2018 • Includes ~$25M of potential gross proceeds on sale of owned real estate in overlap markets
Slide 17: Appendix
BS BlueLinx America’s Building Products Distributor Appendix
Slide 18: Non-GAAP And Supplementary Financial Measures
Non-GAAP And Supplementary Financial Measures BlueLinx reports its financial results in accordance with GAAP, but we also believe that presentation of certain non-GAAP measures, as well as GAAP-based and non-GAAP supplemental financial measures, may be useful to investors and may provide a more comp
Slide 19: Adjusted EBITDA
Adjusted EBITDA (In millions) (Unaudited) 2018 2017 2018 2017 Q3 Q3 Q3 YTD Q3 YTD Net (loss) income $ (9.9) $ 5.7 $ (31.9) $ 9.5 Adjustments: Depreciation and amortization 8.1 2.2 18.2 6.9 Interest expense 13.3 5.7 33.9 16.3 Provision for (Benefit from) income taxes (7.3) 0.1 (7.9) 0.8 Gain from sal
Slide 20: Pro forma Adjusted EBITDA
Pro forma Adjusted EBITDA (In millions) (Unaudited) 2018 2017 2018 2017 Q3 Q3 Q3 YTD Q3 YTD Net (loss) income $ (6.2) $ 8.0 $ (5.5) $ (20.5) Adjustments: Depreciation and amortization 8.1 7.0 23.5 21.0 Interest expense 13.3 12.0 39.9 32.5 Provision for (Benefit from) income taxes (6.3) 2.2 (3.2) (1.
Slide 21: Pro forma Adjusted EBITDA Trailing Twelve Months
Pro forma Adjusted EBITDA (In millions) (Unaudited) Trailing Twelve Months Sep’18 Net (loss) income $ 51.2 Adjustments: Depreciation and amortization 30.4 Interest expense 50.3 Provision for (Benefit from) income taxes (61.4) Gain from sales of property — Amortization of deferred gain (4.2) Share-ba
Slide 22: Reconciliation of GAAP to Adjusted Measures
Reconciliation of GAAP to Adjusted Measures 22
Slide 23: Please reference our Earnings Release and 10-Q on our website
Please reference our Earnings Release and 10-Q available on our website www.BlueLinxCo.com