Bluelinx Holdings Inc. · NYSE:BXC
Bluelinx — CIBC World Markets 2nd Annual Industrials Conference 2007
37 slides from Bluelinx's conference presentation, Oct 2, 2007
Slide 1: CIBC World Markets 2nd Annual Industrials Conference
Austin Dallas CIBC WORLD MARKETS 2nd ANNUAL INDUSTRIALS CONFERENCE October 2, 2007 George Judd - President and Chief Operating Officer Lynn Wentworth - Chief Financial Officer and Treasurer Austin Dallas
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: Investor Book
BlueLinx Investor Book CIBC 2nd Annual Industrials Conference - October 2, 2007 BlueLinx Overview Focused Growth Strategy 2007 Q2 Update Looking Forward
Slide 4: Overview: Investment Considerations
BlueLinx Overview: Investment Considerations COMPANY & INDUSTRY Largest independent building products distributor in highly fragmented industry ripe for consolidation Unique, centralized distribution platform, national sales force and high-service, solutions-based value proposition Diversified produ
Slide 5: Overview: Operations
BlueLinx Overview: Operations Largest Building Products Distributor in U.S. 2006 Revenue: $4.9 Billion ~ 11,500 customers and 750+ suppliers Product portfolio 10,000+ SKUs 70+ warehouses; 80+ reloads Owned fleet of 800 trucks and 1,200 trailers 3,200 employees, including 900+ sales NYSE: BXC Analyst
Slide 6: Largest in a Highly Fragmented Industry
BXC 10.4 WY 8.7 Boise Cascade 6.3 UFPI 4.5 Huttig 2.3 Other 67.8 Many Small and Medium Sized Players <$250m 100 $250m - $500m 18 $500m - $1bn 5 $1bn-$2.5bn 8 >$2.5bn 3 Number of Competitors By Revenue* Growing & Attractive Industry: Largest in a Highly Fragmented Industry Highly Fragmented Industry
Slide 7: Overview: Positioned at the Center of Value Creation
BlueLinx Overview: Positioned at the Center of Value Creation Building Products Manufacturers BlueLinx Home Improvement Centers Dealers Repair and Remodeling Residential and Non- Residential Construction Industrial & Manufactured Housing Value to Manufacturers Reliable channels to market Consistent
Slide 8: Overview: Diversified Product, Customer & End Use Segments
BlueLinx Overview: Diversified Product, Customer & End Use Segments Structural 56% of 2006 Sales Engineered lumber Specialty lumber Vinyl siding Hardwood plywood Particleboard Moulding Metal products Specialty 44% of 2006 Sales Plywood OSB Lumber Rebar/Remesh New Home Construction 50% Industrial App
Slide 9: Overview: Diversified Product, Vendor Relationships
BlueLinx Overview: Diversified Product, Vendor Relationships Diversified Product, Vendor Relationships Diversified Product, Vendor Relationships Diverse & Growing Supply Base: 750+ Vendor Partners World Class, Loyal Customers: 11,500+ Customer Partners Industrials/ Manufactured Housing National Deal
Slide 10: Overview: Unlocking Value As An Independent Distributor
BlueLinx Overview: Unlocking Value As An Independent Distributor Commodities-focused, distribution arm of manufacturer Customer-focused, solutions- driven, value-added distribution partner 55%+ structural products FROM: TO: 60%+ specialty products Structural products-driven earnings volatility Speci
Slide 11: Overview: Unlocking Value Beyond Distribution
BlueLinx Overview: Unlocking Value Beyond Distribution Delivering Commodity Building Products From Point A to Point B A solutions-based approach that extends beyond distribution FROM: TO: Building Products Provide specialty products with national branded partners, portfolio brands for core categorie
Slide 12: Overview: Experienced Leadership Team
BlueLinx Overview: Experienced Leadership Team Management Team Management Team Leadership Experience Experience Stephen Macadam CEO Strategy Strategy CEO Consolidated Container; EVP Georgia-Pacific; McKinsey & Co. George Judd COO Operations Operations VP Eastern operations, Georgia-Pacific; inside a
Slide 13: Focused Growth Strategy
BlueLinx Investor Book CIBC 2nd Annual Industrials Conference - October 2, 2007 BlueLinx Overview Focused Growth Strategy 2007 Q2 Update Looking Forward
Slide 14: Overview: Strategic Objectives
BlueLinx Overview: Strategic Objectives Structural $2.8 billion 56% of total sales Specialty $2.2 billion 44% of total sales Specialty 60% + of total sales 2006 Future Structural below 40% without shrinking business Strategic Imperative No. 1: Profitably grow specialty revenues to 60% of total sales
Slide 15: Focused Growth Strategy #1: Grow Specialty Products - Initiatives
Focused Growth Strategy #1: Grow Specialty Products - 4 Initiatives Partner with Manufacturers to Introduce New Products Grow Share in Under-Represented Market Segments (e.g. Industrials) Dedicated initiative to grow presence in industrials market (building products used to manufacture items like ca
Slide 16: Specialty Products - Recent Product Launches
Focused Growth Strategy #1: Specialty Products - Recent Product Launches Specialty Products - Recent Product Launches Specialty Products - Recent Product Launches Specialty Products - Recent Product Launches Specialty Products - Recent Product Launches Brand Product CCA Global Products Owens Corning
Slide 17: Focused Growth Strategy #2: Structural Products - Effective Inventory Management
Focused Growth Strategy #2: Structural Products - Effective Inventory Management Focus on improved profitability and reduced risk Tightly manage inventories Increase utilization of consignment and program inventories Expand imports from Europe and other areas offering lowest-cost sourcing Drive OSB
Slide 18: Focused Growth Strategy #3: Outgrow the Market Over Time
Focused Growth Strategy #3: Outgrow the Market Over Time Specialty unit volume will drive share growth over time Long-term objective is to grow specialty unit volume relative to the estimated overall end-use market Maintaining structural product profitability takes priority over share gain in times
Slide 19: 2007 Q2 Update
BlueLinx Investor Book CIBC 2nd Annual Industrials Conference - October 2, 2007 BlueLinx Overview Focused Growth Strategy 2007 Q2 Update Looking Forward
Slide 20: 2007 Q2 Update: Revenue
2007 Q2 Update Revenue Q4 '05 Q1 '06 Q2 '06 Q3 '06 Q4 '06 Q1 '07 Q2 '07 Specialty 539.5 580 603.3 553.5 460 456.5 500.8 Structural 815.2 813.4 798.7 666.6 509.2 518.9 598.1 Other -25.4 -16.8 -23 -16.6 -28.9 -18.3 -16.9 Specialty Unit Volume (15.3%) YOY $297.0 or 21.5% Structural Unit Volume (17.1%)
Slide 21: 2007 Q2 Update: Gross Margin
2007 Q2 Update Gross Margin Q4 '05 Q1 '06 Q2 '06 Q3 '06 Q4 '06 Q1 '07 Q2 '07 Speciatly 76.8 80.4 86.9 77.5 63.5 63.6 70 Structural 67.8 55.8 55.7 46.8 35.7 44.9 55.9 Other -4.3 -6.2 -6.2 -3.4 -6.7 -4.8 -6.7 BXC generated $119.2 million in gross profit for the quarter, equating to 11% gross margin Gr
Slide 22: 2007 Q2 Update: Quarterly Operating Expense
2007 Q2 Update Quarterly Operating Expense Operating Expense 1Q '06 102.3 2Q '06 103.2 3Q '06 104.9 4Q '06 91.9 1Q '07 93.9 2Q '07 98.7 YOY $4.5 or 4.4% BXC continued to tightly manage operating costs during the quarter, resulting in a decrease from the prior year quarter Lower payroll cost related
Slide 23: 2007 Q2 Update: Net Income and EPS
2007 Q2 Update Net Income and EPS 1Q '06 2Q '06 3Q '06 4Q '06 1Q '07 2Q '07 Net Income 9.8 9.6 2.3 -5.9 -0.2 5.4 EPS 0.32 0.31 0.07 -0.19 -0.01 0.18
Slide 24: 2007 Year To Date as of Q2
2007 Year To Date as of Q2 revenue YTD '06 2755.556 YTD '07 2039.104 YOY $716.5 or 26% Operating Expense YTD '06 205.495 YTD '07 192.549 YOY $13 or 6.3% YTD '06 YTD '07 Net Income 19.405 5.245 EPS 0.63 0.17 YTD '06 YTD '07 GM % 0.097 0.109 YOY 120 bp
Slide 25: 2007 Q2 Update Summary
2007 Q2 Update Summary Managed margins well in continued challenging environment 11% gross margin vs. 9.9% for the same period a year ago Aggressively managed costs 4.4%, $4.5 million decline in operating expenses from a year ago Inventory tightly managed to balance specialty growth objective with o
Slide 26: Looking Forward
BlueLinx Investor Book CIBC 2nd Annual Industrials Conference - October 2, 2007 BlueLinx Overview Focused Growth Strategy 2007 Q2 Update Looking Forward
Slide 27: Looking Forward: Go-Forward Initiatives
Looking Forward: Go-Forward Initiatives Expand relationships with existing and new specialty product vendors who recognize the BlueLinx value proposition Continue and improve disciplined inventory management to help mitigate price volatility impact on structural products Target growing accounts that
Slide 28: Thank You
Thank You
Slide 29: Appendix
Appendix TOPIC PAGE Revenues by Quarter 30 Unit Volume Growth by Quarter 31 Market Growth by Quarter 32 Gross Margin by Quarter 33 Profit and Loss Statement by Quarter 34 Inventory by Quarter 35 Gross Margin % Analysis 36 Structural Products Price Trend 37
Slide 30: Revenues by Quarter
BlueLinx Holdings Inc. Revenues by Quarter Revenues by Quarter Revenues by Quarter
Slide 31: Unit Volume Growth By Quarter
BlueLinx Holdings Inc. Unit Volume Growth By Quarter Unit Volume Growth By Quarter Unit Volume Growth By Quarter
Slide 32: Market Growth By Quarter
BlueLinx Holdings Inc. Market Growth By Quarter Source: Data from Resource Information Systems, Inc., or RISI, updated as of July 2007, weighted using management's estimates. Source: Data from Resource Information Systems, Inc., or RISI, updated as of July 2007, weighted using management's estimates
Slide 33: Gross Margin by Quarter
BlueLinx Holdings Inc. Gross Margin by Quarter Gross Margin by Quarter Gross Margin by Quarter
Slide 34: Profit and Loss Statement by Quarter
BlueLinx Holdings Inc. Profit and Loss Statement by Quarter Profit and Loss Statement by Quarter Profit and Loss Statement by Quarter
Slide 35: Inventory by Quarter
BlueLinx Holdings Inc. Inventory by Quarter Inventory by Quarter Inventory by Quarter
Slide 36: Gross Margin % Analysis
BlueLinx Holdings Inc. Gross Margin % Analysis Gross Margin % Analysis Gross Margin % Analysis
Slide 37: Structural Products Price Trend
Source: Data from Random Lengths Publications, Inc., updated as of August 3, 2007 Structural Products Price Trend Structural Products Price Trend Structural Products Price Trend Structural Products Price Trend
BlueLinx Holdings — CIBC World Markets 2nd Annual Industrials Conference 2007 on 6ix