updated 5/5/2011 7:16:12 AM ET 2011-05-05T11:16:12

ATLANTA, May 5, 2011 (GLOBE NEWSWIRE) -- BlueLinx Holdings Inc. (NYSE:BXC), a leading distributor of building products in North America, today reported financial results for the first quarter ended April 2, 2011.

The Company incurred a net loss of $12.3 million, or $0.40 per diluted share for the first quarter of 2011, compared to a net loss of $14.7 million, or $0.48 per diluted share, for the first quarter of 2010. The Company's results for the first quarter reflect the ongoing downturn in the housing market. The comparable prior year period benefited from the first-time homebuyer tax credit which expired in April of 2010. Revenues decreased 9.4% to $390.6 million from $431.1 million for the same period a year ago, reflecting a 20.8% drop in structural product sales associated with the softness in the housing market and a slight sales increase in specialty products. Overall unit volume declined 11.8% compared to the year-ago period primarily as a result of a 25.2% decline in structural unit volume.

Gross profit for the first quarter totaled $46.3 million, down 11.5% from $52.3 million in the year-ago period largely reflecting reduced unit volume associated with the continued housing market downturn. Gross margins decreased to 11.8% from the 12.1% generated in the year-ago period as a result of channel shifts for certain specialty products and a highly competitive market. Total operating expenses decreased $8.9 million, or 14.7% from the year-ago period, reflecting the Company's continuing efforts to manage its cost structure as well as gains of $7.2 million on the sale of certain surplus properties. Reported operating loss for the quarter was $5.1 million, compared with an operating loss of $8.0 million a year ago.

"We continued to manage through a very difficult housing market in the first quarter," said George Judd, chief executive officer. "Our results were impacted by a housing market that contracted by almost 10%, an extremely long and severe winter, and a very competitive structural products market," Mr. Judd added.

The Company's operating results for the first quarter of 2011 and 2010, 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):

 
in millions, except per share amounts

(unaudited)
Quarters Ended
  April 2,

2011
April 3,

2010
Pretax loss ($12.4) ($14.7)
Gain from sale of certain surplus properties (7.2) --
Changes associated with the ineffective interest rate swap (1.8) (0.8)
Adjusted pretax loss (21.4) (15.5)
Adjusted benefit from income taxes (8.4) (5.9)
Adjusted net loss ($13.0) ($9.6)
Diluted weighted average shares 30.9 30.6
Adjusted diluted net loss per share applicable to common shares ($0.42) ($0.31)

For the quarter ended April 2, 2011, the above table reflects the following events: (i) the Company recorded a gain on the sales of certain surplus properties; (ii) the Company recorded the effect of a reduction in the fair value of its terminated ineffective interest rate swap partially offset by the continued amortization of the accumulated other comprehensive loss related to the ineffective interest rate swap into interest expense. 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 was $4.8 million. 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 ended April 3, 2010, the above table reflects the following event: (i) the Company recorded the effect of a reduction in 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. 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 was $5.7 million. 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 May 5th 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, www.BlueLinxCo.com , 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# 63274785. 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 www.BlueLinxCo.com .

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 1, 2011 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 -

BlueLinx Holdings Inc.    
Statements of Operations    
in thousands, except per share data    
  Quarters Ended
  April 2, April 3, 
  2011 2010
  (unaudited) (unaudited)
     
Net sales  $ 390,604  $ 431,050
Cost of sales  344,335  378,772
Gross profit  46,269  52,278
Operating expenses:    
Selling, general, and administrative  48,446  56,514
Depreciation and amortization  2,938  3,744
Total operating expenses  51,384  60,258
     
Operating loss  (5,115)  (7,980)
Non-operating expenses:    
Interest expense  9,061  7,315
Changes associated with the ineffective interest rate swap, net  (1,751)  (805)
Other expense, net  15  233
     
Loss before provision for (benefit from) income taxes  (12,440)  (14,723)
Provision for (benefit from) income taxes  (114)  16
Net (loss) income   $ (12,326)  $ (14,739)
     
Basic weighted average number of common shares

outstanding
 30,853  30,587
Basic net (loss) income per share applicable to common

shares 
 $ (0.40)  $ (0.48)
Diluted weighted average number of common 

shares outstanding 
 30,853  30,587
Diluted (loss) net income per share applicable to common

shares
 $ (0.40)  $ (0.48)
     
BlueLinx Holdings Inc.    
Balance Sheets    
 in thousands    
     
  April 2, January 1,
  2011 2011
  (unaudited)  
Assets:    
Current assets:    
Cash and cash equivalents  $ 6,151  $ 14,297
Receivables, net  169,924  119,202
Inventories, net  220,312  188,250
Deferred income tax assets  59  143
Other current assets  18,653  22,768
Total current assets  415,099  344,660
     
Property, plant, and equipment:    
Land and improvements  52,506  52,540
Buildings  96,832  96,720
Machinery and equipment  71,861  70,860
Construction in progress   1,247  2,028
Property, plant, and equipment, at cost  222,446  222,148
Accumulated depreciation  (94,319)  (92,517)
Property, plant, and equipment, net  128,127  129,631
Other non-current assets  56,393  50,728
Total assets  $ 599,619  $ 525,019
     
Liabilities:    
Current liabilities:    
Accounts payable   $ 94,910  $ 62,827
Bank overdrafts  35,671  23,089
Accrued compensation  4,501  4,594
Current maturities of long term debt  1,960  1,190
Other current liabilities  13,899  16,792
Total current liabilities  150,941  108,492
Noncurrent liabilities:    
Long-term debt  424,178  381,679
Deferred income taxes  107  192
Other non-current liabilities  34,401  33,665
Total liabilities  609,627  524,028
     
Shareholders' (Deficit) Equity:    
Common stock  332  327
Additional paid in capital  148,224  147,427
Accumulated other comprehensive loss  (6,827)  (7,358)
Accumulated deficit  (151,737)  (139,405)
Total shareholders' (deficit) equity  (10,008)  991
Total liabilities and shareholders' (deficit) equity  $ 599,619  $ 525,019
     
BlueLinx Holdings Inc.    
Statements of Cash Flows    
 in thousands    
  Periods Ended
  April 2, April 3,
  2011 2010
  (unaudited) (unaudited)
     
Cash flows from operating activities:    
Net loss  $ (12,326)  $ (14,739)
Adjustments to reconcile net loss

to cash used in operations:
   
Depreciation and amortization  2,938  3,744
Amortization of debt issuance costs  447  (73)
Payment from terminating the Georgia-Pacific supply agreement  --  4,706
Gain from sale of properties  (7,222)  --
Changes associated with the ineffective interest rate swap, net  (1,751)  (805)
Deferred income tax benefit  (215)  (207)
Share-based compensation expense  816  1,043
Decrease (increase) in restricted cash related to the swap, insurance, and other  (6)  5,882
Changes in assets and liabilities:    
Receivables  (50,722)  (64,595)
Inventories  (32,062)  (25,614)
Accounts payable  32,083  21,320
Changes in other working capital  3,754  22,879
Other  1,458  (134)
Net cash used in operating activities  (62,808)  (46,593)
     
Cash flows from investing activities:    
Property, plant, and equipment investments  (3,695)  (409)
Proceeds from disposition of assets  8,763  149
Net cash (used in) provided by investing activities  5,068  (260)
     
Cash flows from financing activities:    
Repurchase of common stock   --  (583)
Increase in the revolving credit facility  43,269  24,665
Payments on capital lease obligations  (72)  (402)
Increase in bank overdrafts  12,582  9,953
Increase in restricted cash related to the mortgage  (6,185)  (2,864)
Other  --  6
Net cash provided by financing activities  49,594  30,775
     
Decrease in cash  (8,146)  (16,078)
Balance, beginning of period  14,297  29,457
Balance, end of period  $ 6,151  $ 13,379
     
     
BlueLinx Holdings Inc.    
Adjusted Pre-Tax Loss    
in thousands, except for per share amounts    
  Quarters Ended
  April 2, April 3,
  2011 2010
  (unaudited) (unaudited)
     
Pretax loss  $ (12,440)  $ (14,723)
Gain from sale of certain surplus properties  (7,222)  -- 
Changes associated with the ineffective interest rate swap, net  (1,751)  (805)
Adjusted pretax loss  (21,413)  (15,528)
Adjusted benefit from income taxes  (8,380)  (5,978)
Adjusted net loss  $ (13,033)  $ (9,550)
Diluted weighted average shares  30,853  30,587
Adjusted diluted net loss per share applicable to common shares  $ (0.42)  $ (0.31)
     
BlueLinx Holdings Inc.    
Reconciliation of GAAP Net Loss to Adjusted Net Loss     
in thousands    
     
  Quarters Ended
  April 2, April 3,
  2011 2010
  (unaudited) (unaudited)
     
GAAP net loss  $ (12,326)  $ (14,739)
Gain from sale of certain surplus properties  (7,222)  -- 
Changes associated with the ineffective interest rate swap, net  (1,751)  (805)
Tax effect of selected charges  3,464  311
Valuation allowance  4,802  5,683
Adjusted net loss  $ (13,033)  $ (9,550)
     
CONTACT: Doug Goforth, CFO & Treasurer
         BlueLinx Holdings Inc.
         (770) 953-7505
         
         Investor Relations:
         Maryon Davis, Director Finance & IR
         (770) 221-2666

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