Bluelinx Holdings Inc. · NYSE:BXC
Bluelinx — Investor Presentation (December 2005)
39 slides from Bluelinx's investor presentation, Dec 13, 2005
Slide 1: BlueLinx
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 December 2005
BlueLinx Investor Presentation December 2005 BlueLinx at a Glance 4 Investment Highlights 10 2005 Update 26 Appendix 33 5
Slide 4: BlueLinx At A Glance: Overview
BlueLinx At A Glance: Overview « Sales Center Warehouse LSV « « 2004 revenue: $5.6 billion 11,700+ customers and 750+ suppliers Product portfolio 10,000+ SKUs 65+ warehouses, owned fleet of 900 trucks and 1,200 trailers 3,600 employees, including 1,000 sales NYSE: BXC 5 analysts Market capitalizatio
Slide 5: BlueLinx At A Glance: Evolution of BlueLinx
BlueLinx At A Glance: 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 - 19
Slide 6: Positioned at the Center of Value Creation
BlueLinx At A Glance: 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 Consi
Slide 7: Diversified Product, Customer & End Use Segments
BlueLinx At A Glance: Diversified Product, Customer & End Use Segments Structural 55% Hardwood plywood Engineered lumber Metal products Vinyl siding Moulding Insulation Roofing Specialty 45% Plywood OSB Lumber New Home Construction 50% Industrial Applications 22% Manufactured Housing 8% Repair & Rem
Slide 8: How We Think About Our Business
BlueLinx At A Glance: How We Think About Our Business 2006 End-Use Demand (RISI+ VIEW) Housing starts 1.8-1.9 million, down 10% YOY Manufactured housing emerging from recession - up 22% Industrial production forecast to increase 3% Pricing Trends (RISI VIEW) Structural product price trend expectatio
Slide 9: BlueLinx At A Glance: Capital Structure Position
BlueLinx At A Glance: 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 Met
Slide 10: Investment Highlights
Investment Highlights Leading U.S. building products distributor with unique centralized and scaleable platform Growing $47bn industry with attractive long-term fundamentals Experienced operating team aligned with creating shareholder value Pursuing focused growth strategy 19
Slide 11: Only Nationwide, Independent Distributor
Leading Building Products Distributor: Only Nationwide, Independent Distributor BlueLinx 5558 Weyerhaeuser 5220 Boise Cascade 2844 No Other Player > $2.0bn Independent Distributor Centralized Platform Integrated with manufacturer Decentralized Integrated with manufacturer Decentralized 2004 Industry
Slide 12: Unique, Centralized Platform for Growth
Leading Building Products Distributor: Unique, Centralized Platform for Growth Function BlueLinx Competition Business Management Inside Sales Procurement Outside Sales Information Systems Centralized Centralized, but organized by market and product Centralized by product In market, reporting to busi
Slide 13: Competitive Advantages of Centralization
Leading Building Products Distributor: Competitive Advantages of Centralization Strategic coordination of management actions and initiatives Rapid tactical implementation Decision-oriented information systems Procurement scale Process efficiencies and economies of scale Consistent communication / un
Slide 14: Investment Highlights
Largest U.S. building products distributor with unique centralized and scaleable platform Growing $47bn industry with attractive long-term fundamentals Experienced operating team aligned with creating shareholder value Pursuing focused growth strategy Investment Highlights 27
Slide 15: 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: Solid Long-Term Industry Fundamentals
1990-1999 Avg 0.034 2000-2003 Avg -0.043 2004E-2013E Avg 0.031 Growing & Attractive Industry: Solid Long-Term Industry Fundamentals 1990-1999 Avg 1.37 2000-2003 Avg 1.68 2004E-2013E Avg 2 Annual Housing Starts (mm) Annual Growth In Other End-Use Markets 50% of Our End-Market 50% of Our End-Market In
Slide 17: Largest in a Highly Fragmented Industry
BlueLinx 11.8 WY 11.1 Boise Cascade 6 North Pacific Group 4.2 Other 66.9 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 Consolidat
Slide 18: Investment Highlights
Largest U.S. building products distributor with unique centralized and scaleable platform Growing $47bn industry with attractive long-term fundamentals Experienced operating team aligned with creating shareholder value Pursuing focused growth strategy Investment Highlights 35
Slide 19: Experienced Leadership Team
Experienced Leadership Team Deep industry experience Commodity and specialty products buyers Inventory management Sales team Information technology 3,600 employees with low turnover Comprehensive training initiatives Unified culture Stock option plan Operating Team Excellence Motivated Employees Sen
Slide 20: Investment Highlights
Largest U.S. building products distributor with unique centralized and scaleable platform Growing $47bn industry with attractive long-term fundamentals Experienced operating team aligned with creating shareholder value Pursuing focused growth strategy Investment Highlights 39
Slide 21: BXC's Growth Enabling Strategic Shift Continues
Focused Growth Strategy: BXC's Growth Enabling Strategic Shift Continues Distribution arm of manufacturer Solutions-based, value-added distribution partner 55%+ structural products FROM: TO: 60%+ specialty products Structural products-driven earnings volatility Specialty products-driven stable earni
Slide 22: BXC Strategic Framework
Focused Growth Strategy: BXC Strategic Framework Mission: "Be the Masters of the Supply Chain in 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 custom
Slide 23: Growing Faster Than the Market
Focused Growth Strategy: Growing Faster Than the Market Market Share Growth 2002 0.104 2003 0.109 2004 0.118 Unit Volume Growth vs. Industry Year over Year Change Industry Growth BlueLinx Organic Growth 2003 0.02 0.025 2004 0.047 0.082 2005 Q3 TTM 0.033 0.045 45
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 penetration of selected high return customers Grow share in under- represented segments (e.g. industrial) Expand product portfolio and ve
Slide 25: Expanding Existing Vendor Relationships
Focused Growth Strategy: Expanding Existing Vendor Relationships Expanding Existing Vendor Relationships Expanding Existing Vendor Relationships Expanding Existing Vendor Relationships Expanding Existing Vendor Relationships Expanding Existing Vendor Relationships Expanding Existing Vendor Relations
Slide 26: 2005 Update: Executing BXC Growth Initiatives
2005 Update: Executing BXC Growth Initiatives Building the Systems and Processes To Drive Growth 51
Slide 27: BlueLinx Growth Initiatives
2005 Update: BlueLinx Growth Initiatives Pillars of Growth Year-to-date highlights* Grow specialty products into a larger portion of our overall business Focus on targeted, growing accounts that serve high-growth markets Increase volume in under represented and higher return segments, particularly i
Slide 28: Specialty Product Expansion
2005 Update: Specialty Product Expansion Specialty Product Expansion Specialty Product Expansion Chosen in September by Louisiana-Pacific to nationally distribute its WeatherBest composite decking and railing product All 1,000 BlueLinx sales employees trained and warehouses stocked within 45 days Pr
Slide 29: Lane Stanton Vance Acquisition
2005 Update: Lane Stanton Vance Acquisition LSV, a California distributor of specialty products with annual sales of approximately $62 million, acquired July 2005 Augments industrial/specialty product expansion efforts in West Pursuing opportunities to grow LSV business with BlueLinx customers Accre
Slide 30: Building the Systems and Processes to Drive Growth
2005 Update: Building the Systems and Processes to Drive Growth Specialty inventory management initiative Eliminated excess inventories from Year-end'04 (imported hardwood plywood, moulding, rebar) Addressed and improved import supply chain management Increased focus on inventory management system a
Slide 31: Building the Systems and Processes: Product pricing
2005 Update: Building the Systems and Processes to Drive Growth Product pricing Implemented new pricing system designed to increase overall pricing efficiencies and contribute to margin improvement Orders flowing through the system realize 50bp higher gross margin Increased utilization of transactio
Slide 32: In Summary
In Summary BlueLinx is focused on Outgrowing our end use markets Aggressively expanding the specialty products portion of our business Disciplined inventory management to help mitigate the price volatility of structural products Supplementing organic growth with selected acquisitions at reasonable p
Slide 33: Appendix
Appendix 2000-2005YTD Sales Growth 2000-2005YTD Gross Profit Trend 2005Q3 As Reported Balance Sheet EBITDA Reconciliation Balanced Liquidity Illustration 65
Slide 34: Sales Growth
Sales Growth Pro Forma as Adjusted 2000 2001 2002 2003PF 2004PF 2005Q3 TTM Revenue 4225 3769 3734 4272 5558 5500 BXC Unit Volume Growth -0.078 0.012 0.025 0.082 0.045 67
Slide 35: Gross Profit Trend
Gross Profit Trend Pro Forma as Adjusted 2000 2001 2002 2003PF 2004PF 2005Q3 LTM Gross Profit 353 383 363 453 564 473 Gross Margin (%) 0.084 0.102 0.097 0.106 0.101 0.086 69
Slide 36: As Reported Balance Sheet 2005Q3
As Reported Balance Sheet 2005Q3 ($ in millions) 2004Q4 2005Q3 Change Selected Assets Receivables 364 527 163 Inventory 500 418 (82) PP&E 187 186 (1) Other 86 104 18 Total Assets 1,137 1,235 98 Selected Liabilities Payables 302 369 67 Debt 652 654 2 Shareholders Equity 141 171 30 Other 42 41 (1) Tot
Slide 37: EBITDA Reconciliation
EBITDA Reconciliation (2118 in milion) 2004 FY 2004 Oa 72005 G1-03 2005 G3LTM 2004 O1-2005 Pro Forma” Pro Forma Actual Pro Forma Total A @ (C) (EEA) Sales 5558 1208 4298 5.500 981 Cost of Sales 4994 1106 3921 5027 8918 Gross Margin 564 101 372 473 936 Gross Margin % 10.1% 8.4% 87% 8.8% 9.5% Operatin
Slide 38: EBITDA Reconciliation
EBITDA Reconciliation 2004 FY 2005 G3LTM (al1$ in millions) Pro Forma Pro Forma Pro Forma EBITDA 179 3.2% 104 19% Pro Forma Gross Margin 564 10.1% 473 BB% Gross margin Adjustment (36)__—-05% 600.9% Adjusted Pro Forma Gross Margin 528 95% B24 9.5% Adjusted Pro Forma EBITDA“? 143, 25% 154 2.8% (1) com
Slide 39: Balanced Liquidity Illustration
Balanced Liquidity Illustration 77
BlueLinx Holdings — Investor Presentation (December 2005) on 6ix