– Net Loss of $0.66 Per Share as Housing-Related Recovery Slows Down –
– Specialty Revenue Growth Reported in Fourth Quarter –
ATLANTA, Feb. 17, 2011 (GLOBE NEWSWIRE) -- BlueLinx Holdings Inc. (NYSE:BXC), a leading distributor of building products in North America, today reported financial results for the fourth quarter and full year ended January 1, 2011.
Revenues increased 0.5% to $367.9 million from $366.1 million for the same period a year ago. The increase reflects a 7.4% increase in specialty product sales and a 9.5% decrease in structural product sales. Overall unit volume declined 4.3%, with a 5.9% increase in specialty unit volume being offset by a 16.5% decline in structural unit volume. The Company incurred a net loss of $20.2 million, or $0.66 per diluted share for the fourth quarter of 2010, compared with net income of $12.0 million, or $0.37 per diluted share, for the fourth quarter of 2009 which included a tax benefit of $23.6 million or $0.72 per diluted share.
Gross profit for the fourth quarter totaled $44.3 million, down 2.1% from $45.3 million in the prior-year period. Gross margins decreased to 12.1% from the near record level of 12.4% generated in the year earlier period. The decline in overall gross margin was driven by a 0.6% decline in specialty gross margins largely resulting from shifts in channel mix. Total operating expenses increased to $56.5 million from $50.1 million a year ago, largely driven by a $6.0 million gain on a property sale realized in the year ago period. Reported operating loss for the quarter was $12.2 million, compared with an operating loss of $4.8 million a year ago.
"BlueLinx' fourth-quarter operational performance was impacted by the continuing difficult conditions of the housing and construction markets as the recovery slowed down and we experienced the normal seasonal slow down associated with our fourth quarter," said BlueLinx President and CEO George Judd. "In the face of this challenging operating environment our financial results demonstrate modest revenue growth, strong gross margin performance, and diligent cost management. We generated approximately $18 million in cash from operations during the quarter.
"While this difficult economic period continues, we remain focused on the strategic initiatives that will build a stronger, more profitable company. During the quarter we grew specialty revenue, a key strategic focus for BlueLinx, to 59% of our total revenues driven by a 5.9% increase in specialty unit volume," Mr. Judd added.
For the full year ended January 1, 2011, net loss totaled $53.2 million, or $1.73 per diluted share, on revenues of $1.80 billion, compared with a net loss of $61.5 million, or $1.98 per diluted share, on revenues of $1.65 billion a year ago. The increase in revenue was largely due to the 5.9% increase in housing construction activity relative to the prior period, increases in structural wood-based selling prices relative to the prior period, and the Company's focus on targeted growth initiatives. Gross profit for the full year ended January 1, 2011 totaled $210.7 million and gross margin was 11.7%, compared with $193.2 million and 11.7%, respectively, a year earlier. Operating expenses increased to $234.6 million from $209.4 million a year ago, and included $1.1 million and $26.0 million in net gains from significant special items, respectively.
The Company's operating results for the 2010 and 2009 fourth-quarter and full-year periods, adjusted for significant special items, are shown in the following table (see accompanying financial schedules for full financial details and reconciliations of non-GAAP financial measures to their GAAP equivalents):
For the quarter and full year periods ended January 1, 2011, the above table reflects the following events: (i) the Company received payment for a litigation settlement; (ii) the Company incurred expenses from the terminated tender offer; (iii) the Company recorded the effect of a reduction to the fair value of its ineffective interest rate swap offset by the continued amortization of the accumulated other comprehensive loss related to the ineffective interest rate swap into interest expense; (iv) the Company recorded certain severance costs; (v) the Company amended its credit facility resulting in a non-cash charge due to the write-off of associated debt issuance cost. The adjusted benefit from income taxes reflected in the table is comprised of the Company's effective tax rate excluding the valuation allowance related to its deferred tax assets, a tax benefit related to our intra period income tax allocation to other comprehensive income and the tax effect of significant special items. The valuation allowance recorded for the quarter and full-year periods are $7.8 million and $20.8 million, respectively. The adjusted benefit from income taxes assumes the Company is in a position to demonstrate that the deferred tax assets are realizable.
For the quarter and full year periods ended January 2, 2010, the above table reflects the following events: (i) the Company reached an agreement with G-P to cancel our Master Supply Agreement one year prior to the original expiration date, with G-P agreeing to make four quarterly payments to BlueLinx starting May 1, 2009; (ii) in the fourth quarter 2009, the Company realized a $6.0 million gain on the sale of a surplus property which had previously been deferred in the fourth quarter of 2008, in addition certain other surplus properties were sold in the full-year period; (iii) the Company recorded a reduction to the fair value of the ineffective interest rate swap along with the continued amortization of accumulated other comprehensive loss into interest expense. In the full-year period, the Company reduced its borrowings under its revolving credit facility by $100 million resulting in a non-cash interest charge related to its ineffective interest rate swap. In addition the changes associated with the ineffective interest rate swap reflect the effect of changes in the fair value and the continued amortization of the accumulated other comprehensive loss into interest expense; (iv) the Company recorded other restructuring costs related to facility consolidations and severance expense; and (v) the Company wrote-off a portion of its debt issuance costs related to the Company's decision to lower its revolving credit facility from $800 million to $500 million which resulted in a non-cash charge. The adjusted benefit from income taxes reflected in the table is based on the Company's effective tax rate excluding the valuation allowance recorded against its deferred tax asset, a tax benefit related to our intra period income tax allocation to other comprehensive income and the tax effect of significant special items. The valuation allowance adjustment recorded for the quarter and full year period ended January 2, 2010 was $16.3 million of benefit and $29.3 million of expense, respectively. The adjusted benefit from income taxes assumes the Company is in a position to demonstrate that the deferred tax assets are realizable.
Conference Call
BlueLinx will host a conference call today at 10:00 a.m. Eastern Time, accompanied by a supporting slide presentation. Investors can listen to the conference call and view the accompanying slide presentation by going to the BlueLinx web site, , and selecting the conference link on the Investor Relations page. Investors will be able to access an archived recording of the conference call for one week by calling 706-645-9291, Conference ID# 42723478. The recording will be available two hours after the conference call has concluded. Investors also can access a recording of this call on the BlueLinx web site, where a replay of the webcast will be available for 90 days.
Use of Non-GAAP Measures
BlueLinx reports its financial results in accordance with U.S. generally accepted accounting principles (GAAP). The Company also believes that presentation of certain non-GAAP measures, i.e., results excluding certain charges or other nonrecurring events, when appropriate, provides useful information for the understanding of its ongoing operations and enables investors to focus on period-over-period operating performance, without the impact of significant special items, and thereby enhances the user's overall understanding of the Company's current financial performance relative to past performance and provides a better baseline for modeling future earnings expectations. Any non-GAAP measures used herein are reconciled in the financial tables accompanying this news release. The Company cautions that non-GAAP measures should be considered in addition to, but not as a substitute for, the Company's reported GAAP results.
About BlueLinx Holdings Inc.
Headquartered in Atlanta, Georgia, BlueLinx Holdings Inc., operating through its wholly owned subsidiary BlueLinx Corporation, is a leading distributor of building products in North America. Employing approximately 2,000 people, BlueLinx offers greater than 10,000 products from over 750 suppliers to service approximately 11,500 customers nationwide, including dealers, industrial manufacturers, manufactured housing producers and home improvement retailers. The Company operates its distribution business from sales centers in Atlanta and Denver, and its network of 60 distribution centers. BlueLinx is traded on the New York Stock Exchange under the symbol BXC. Additional information about BlueLinx can be found on its Web site at .
Forward-looking Statements
This press release includes "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995, including statements relating to our outlook on the housing industry. All of these forward-looking statements are based on estimates and assumptions made by our management that, although believed by BlueLinx to be reasonable, are inherently uncertain. Forward-looking statements involve risks and uncertainties, including, but not limited to, economic, competitive, governmental and technological factors outside of BlueLinx' control that may cause its business, strategy or actual results to differ materially from the forward-looking statements. These risks and uncertainties may include, among other things: changes in the supply and/or demand for products that it distributes, especially as a result of conditions in the residential housing market; general economic and business conditions in the United States; the activities of competitors; changes in significant operating expenses; changes in the availability of capital, including the availability of residential mortgages; the ability to identify acquisition opportunities and effectively and cost-efficiently integrate acquisitions; adverse weather patterns or conditions; acts of war or terrorist activities; variations in the performance of the financial markets; and other factors described in the "Risk Factors" section in the Company's Annual Report on Form 10-K for the year ended January 2, 2010 and in its periodic reports filed with the Securities and Exchange Commission from time to time. Given these risks and uncertainties, you are cautioned not to place undue reliance on forward-looking statements. BlueLinx undertakes no obligation to publicly update or revise any forward-looking statement as a result of new information, future events, changes in expectation or otherwise, except as required by law.
- Tables to Follow -
CONTACT: Doug Goforth, CFO & Treasurer BlueLinx Holdings Inc. (770) 953-7505 Investor Relations: Maryon Davis, Director Finance & IR (770) 221-2666