BlueLinx Announces First Quarter 2024 Results

BlueLinx Holdings Inc., a leading U.S. wholesale distributor of building products, reported financial results for the three months ended March 30, 2024.

First Quarter 2024 Highlights

• Net sales of $726 million
• Gross profit of $128 million, gross margin of 17.6% and specialty products margin of 20.7%, which includes a net benefit of approximately $7 million related to import duties from prior periods
• Net income of $17 million, or $2.00 diluted earnings per share
• Adjusted net income of $19 million, or $2.14 adjusted diluted earnings per share (non-GAAP)
• Adjusted EBITDA of $39 million (non-GAAP), or 5.3% of net sales, which includes a net benefit of approximately $7 million related to import duties from prior periods
• Operating cash used of ($31) million and free cash flow of ($37) million (non-GAAP)
• Available liquidity of $828 million, including $481 million of cash and cash equivalents
• Net debt of ($133) million and net leverage ratio of (0.8x), excluding real property finance lease liabilities

“We are off to a solid start to 2024, despite ongoing deflationary pressures associated with our specialty business and January weather conditions that adversely impacted volumes. We are pleased with the results for the quarter as volumes recovered and we maintained strong margins in specialty and structural products,” said Shyam Reddy, President, and CEO of BlueLinx. “I am excited about the team we have in place to execute our sales growth strategy through uncertain market conditions. Our strong liquidity gives us the flexibility to pursue our strategic initiatives and opportunistically return capital to shareholders.”

“Our Adjusted EBITDA of $39 million came in better than expected due to the higher margins in both specialty and structural products, as well as the net positive impact of import duty items of approximately $7 million related to products sold during prior periods. We were pleased with our results and our financial position remains strong with a net leverage ratio of only (0.8x) and available liquidity of $828 million,” said Andy Wamser, Chief Financial Officer of BlueLinx.

First Quarter 2024 Financial Performance

In the first quarter of 2024, net sales were $726 million, a decrease of $72 million, or 9.0% when compared to the first quarter of 2023. Gross profit was $128 million, a decrease of $6 million, or 4.4%, year-over-year, and gross margin was 17.6%, up 90 basis points from the same period last year.

Net sales of specialty products, which includes products such as engineered wood, siding, millwork, outdoor living, industrial products and specialty lumber and panels, decreased $64 million, or 11%, to $504 million. This decline was due to deflationary impacts across several specialty categories. Gross profit from specialty product sales was $104 million, a decrease of $3 million, or 2%, compared to the first quarter of last year. Gross margin was 20.7% compared to 18.8% in the prior year period, which includes the net benefit of import duty-related items from prior periods during the current quarter. Not including this net benefit, specialty products’ gross margin was 19.4% in the current quarter. The duty items were related to changes in retroactive rates for anti-dumping duties and to classification adjustments for certain goods imported by the Company.

Net sales of structural products, which includes products such as lumber, plywood, oriented strand board, rebar, and remesh, decreased $8 million, or 3%, to $222 million in the first quarter and gross profit from sales of structural products decreased $3 million from $27 million in the prior year period. The decrease in structural sales and gross profit was due primarily to lower framing lumber volumes when compared to the elevated levels in the prior year period. Gross margin on structural product sales was 10.6% in the first quarter, down from 11.7% in the prior year period.

Selling, general and administrative (“SG&A”) expenses were $91 million in the first quarter, comparable with the prior year period.

Net income was $17 million, or $2.00 per diluted share, versus $18 million, or $1.94 per diluted share, in the prior year period. Adjusted net income was $19 million, or $2.14 per diluted share compared to $23 million, or $2.53 per diluted share in the first quarter of last year.

Adjusted EBITDA was $39 million, or 5.3% of net sales, for the first quarter of 2024, compared to $47 million, or 5.9% of net sales in the first quarter of 2023, which includes the net benefit of duty-related items. Not including these duty-related items, Adjusted EBITDA was $32 million, or 4.4% of net sales in the first quarter.

Net cash used in operating activities was $31 million in the first quarter of 2024 compared to $89 million of net cash provided by operating activities in the prior year period, and free cash flow was ($37) million. The decrease in cash generated during the first quarter was driven by seasonal changes in working capital. The net source of cash generated in the prior year period was driven by significant inventory reduction efforts.

Capital Allocation and Financial Position

During the first quarter of 2024, we invested $5 million of cash in capital investments to improve our distribution facilities and upgrade our fleet, compared to $9 million of cash investments in the first quarter of 2023. During the first quarter of 2024, we also entered into finance leases for $8 million of fleet upgrades. We have $91.4 million of share repurchase authorization remaining under our current repurchase program. Under our remaining share repurchase authorization, we may repurchase shares of our common stock at any time or from time to time, without prior notice, subject to prevailing market conditions and other considerations.

As of March 30, 2024, total debt was $348 million, consisting of $300 million of senior secured notes that mature in 2029 and $48 million of finance leases, excluding real property finance lease liabilities. Available liquidity was $828 million which included an undrawn revolving credit facility that had $346 million of availability plus cash and cash equivalents of $481 million. Net debt was ($133) million, resulting in a net leverage ratio of (0.8x) on trailing twelve-month Adjusted EBITDA of $175 million.

Second Quarter 2024 Update

Through the first four weeks of the second quarter of 2024, specialty product gross margin was in the range of 18% to 19% and structural product gross margin was in the range of 10% to 11%. Average daily sales volumes were slightly improved versus the first quarter of 2024.

For full first quarter results click here.

About BlueLinx

BlueLinx is a leading U.S. wholesale distributor of residential and commercial building products with both branded and private-label SKUs across product categories such as lumber, panels, engineered wood, siding, millwork, and industrial products. With a strong market position, broad geographic coverage footprint servicing fifty states, and the strength of a locally focused sales force, we distribute a comprehensive range of products to our customers which include national home centers, pro dealers, cooperatives, specialty distributors, regional and local dealers, and industrial manufacturers. BlueLinx provides a wide range of value-added services and solutions to our customers and suppliers, and we operate our business through a broad network of distribution centers. To learn more about BlueLinx, please visit www.bluelinxco.com.

Contact:

Kimberlee Burrows – Sr. Communications Manager – bluelinx.communications@bluelinxco.com – (470) 443-9512

Source: BlueLinx Holdings, Inc.