Financial Data and Key Metrics Changes - The company generated net sales of $747 million, a decrease of 8% year-over-year, with adjusted EBITDA of $36.6 million, resulting in a 4.9% adjusted EBITDA margin [12][25] - Adjusted net income was $16.7 million or $1.95 per share, while net income was $16 million or $1.87 per share [27][12] - Total gross profit was $126 million, with a gross margin of 16.8%, down 40 basis points from the prior period [25] Business Line Data and Key Metrics Changes - Specialty products accounted for approximately 70% of net sales, with revenues declining 7% year-over-year due to price deflation [13][28] - Specialty gross margin was 19.4%, down 40 basis points from last year, while structural product revenues declined 9% due to significant price deflation [14][30] - Structural products generated net sales of $228 million, with a gross margin of 11%, down 30 basis points from the same period last year [30] Market Data and Key Metrics Changes - The U.S. housing market remains volatile, with total housing starts at an adjusted annual rate of 1.35 million, down 0.5% from August and down 0.7% year-over-year [19] - Existing home sales have sunk to their lowest levels in 30 years, impacting repair and remodel activity [21] - The turnover rate for homes is only 2.5%, the lowest level in over 30 years, indicating a weak sales velocity [21] Company Strategy and Development Direction - The company is focused on growing key specialty product categories at a higher rate than structural products, aiming for a shift in product mix over the next several years [8] - Digital transformation efforts are on track, with Phase 1 expected to be completed by Q3 2025, enhancing operational and commercial capabilities [9] - The company is exploring greenfield and M&A opportunities to expand geographic reach and support specialty product sales growth [10] Management's Comments on Operating Environment and Future Outlook - Management noted that low existing home turnover and home affordability issues are hindering the housing market recovery [16] - The Federal Reserve's interest rate positioning is critical for the housing recovery, with current mortgage rates above 6.5% [17][18] - Management believes sustained reductions in interest rates are necessary to support a long-term housing recovery, expected to begin in the back half of 2025 [18] Other Important Information - The company repurchased $15 million in shares during the third quarter, totaling over $138 million since the beginning of 2022 [16] - The financial position remains strong, with cash on hand of $526 million and available liquidity of approximately $873 million at the end of the quarter [32] Q&A Session Summary Question: What drove the positive volume growth in Specialty Products? - Management attributed the growth to a strong focus on share gain strategies, particularly in national accounts and multifamily sectors, along with some seasonal benefits [38] Question: Have there been any sequential moderation of price declines in key specialty categories? - Management noted a slight sequential improvement in pricing for specialty products in the first four weeks of Q4, indicating confidence in future pricing improvements [39] Question: What is the outlook for structural margins given recent price dynamics? - Management indicated that structural margins improved due to a normalization of inventory levels and a better balance in supply and demand [40][41] Question: Can you provide an update on the competitive landscape? - Management highlighted solid performance in the East region and noted that private-label products help weather competitive pressures [44][45] Question: What happens if interest rates do not decrease? - Management emphasized a focus on greenfield opportunities and maintaining a disciplined approach to inventory management to navigate market dynamics [49][50] Question: How is inventory management being handled in growth specialty categories? - Management stated that inventory is managed to specific turn day targets to support customer demands, ensuring optimal stocking positions [60]

BlueLinx Q3 2024 Results Delivering What Matters October 30, 2024 BLUELINX © BlueLinx 2024. All Rights Reserved. 1 Safe Harbor Statement This presentation contains forward-looking statements. Forward-looking statements include, without limitation, any statement that predicts, forecasts, indicates or implies future results, performance, liquidity levels or achievements, and may contain the words "believe," "anticipate," "could", "expect," "estimate," "intend," "may", "project," "plan," "should", "will", "wil ...

Financial Performance - Net sales for Q3 2024 were $747 million, a decrease of $63 million, or 8% compared to Q3 2023[3] - Adjusted Net Income for the three months ended September 28, 2024, was $16,016,000, compared to $24,382,000 for the same period in 2023, representing a decrease of 34.3%[31] - Adjusted Earnings Per Share (diluted) for the three months ended September 28, 2024, was $1.87, down from $2.71 in the prior year, a decline of 30.9%[31] - Net income for the three months ended September 28, 2024, was $16,016,000, a decrease from $24,382,000 for the same period in 2023, representing a decline of 34.5%[38] - Adjusted net income for the three months ended September 28, 2024, was $16,656,000, down 37.8% from $26,764,000 in the prior year[42] - Basic EPS for the three months ended September 28, 2024, was $1.88, a decline of 30.9% from $2.72 in the same quarter last year[42] Revenue and Sales - Specialty products net sales were $519 million, a decrease of $40 million, or 7.1% year-over-year, with a gross margin of 19.4%[4] - Structural products net sales decreased by $23 million, or 9.1%, to $228 million, with a gross margin of 11.0%[5] - Total net sales for the three months ended September 28, 2024, were $747,288,000, down 7.7% from $809,981,000 in the prior year[37] - Specialty products net sales for the three months ended September 28, 2024, were $519,000,000, down 7.1% from $558,851,000 in the same period last year[37] - Structural products net sales for the three months ended September 28, 2024, were $228,288,000, a decrease of 9.1% from $251,130,000 in the prior year[37] Profitability - Gross profit was $126 million, down $14 million, or 10% year-over-year, with a gross margin of 16.8%, a decline of 40 basis points from the previous year[3] - Gross profit for the three months ended September 28, 2024, was $125,669,000, down 9.8% from $139,246,000 in the prior year, with a gross margin of 16.8%[31] - The company reported a gross margin of 16.8% for the three months ended September 28, 2024, compared to 17.2% in the same period last year[37] Cash Flow and Debt - Operating cash flow was $62 million, and free cash flow was $54 million, driven by net income and improved working capital[11] - Free cash flow for the three months ended September 28, 2024, was $53,837,000, a decrease of 26.0% compared to $72,707,000 for the same period in 2023[46] - Total debt was $351 million, with a net leverage ratio of (1.2x) based on trailing twelve-month Adjusted EBITDA of $146 million[13] - Total debt and finance leases as of September 28, 2024, amounted to $593,810,000, an increase from $585,426,000 as of December 30, 2023[45] - Net debt as of September 28, 2024, was $67,529,000, compared to $63,683,000 as of December 30, 2023[45] - Net leverage ratio as of September 28, 2024, was 0.5x, up from 0.3x as of December 30, 2023[45] Expenses - SG&A expenses were $92 million, an increase of $1 million year-over-year, primarily due to higher technology expenses[8] - Total operating expenses for the three months ended September 28, 2024, were $101,644,000, an increase of 2.1% compared to $99,590,000 in the same period last year[31] Future Outlook - For Q4 2024, specialty product gross margin is expected to be in the range of 18% to 19%[14] Inventory and Assets - The company reported a decrease in inventories, netting $340,541,000 as of September 28, 2024, compared to $343,638,000 in the previous quarter[33] - Total assets increased to $1,611,079,000 as of September 28, 2024, from $1,537,601,000 at the end of the previous quarter, reflecting growth in the company's asset base[33]

Financial Data and Key Metrics Changes - The company reported net sales of $768 million, a decrease of 6% year-over-year, with total gross profit at $122 million and a gross margin of 15.9%, down 70 basis points from the prior period [15][17] - Adjusted EBITDA was $34 million, representing a 4.5% margin on net sales, while adjusted net income was $15 million, or $1.68 per share [7][17] - Specialty Products accounted for approximately 70% of net sales and about 85% of gross profits for the second quarter [7] Business Line Data and Key Metrics Changes - Specialty product revenues declined 6% year-over-year due to price deflation, with gross profit from specialty product sales at $104 million, down 4% year-over-year, and specialty gross margin at 19.3%, up 20 basis points from last year [8][18] - Structural product revenues decreased 7% year-over-year, with gross profit from structural products at $18 million, a decrease of 33% year-over-year, and structural gross margin at 7.9%, down from 11% in the same period last year [9][18] Market Data and Key Metrics Changes - The U.S. housing market remains volatile, with June housing starts at an adjusted annual rate of 1.35 million, up 3% from May but down 4.4% year-over-year [12] - Builder confidence has declined, with the index dropping from 51 in April to 42 in July, reflecting negative sentiment regarding anticipated building activity [12][14] Company Strategy and Development Direction - The company is focused on modernizing its business with new technology, including re-architecting data, launching an e-commerce solution, and implementing a transportation management system [6] - The strategy includes growing key specialty product categories at a higher rate than structural products and exploring M&A and Greenfield opportunities to expand geographic reach [7][10] Management Comments on Operating Environment and Future Outlook - Management expressed optimism for a recovery in the housing market in 2025, contingent on interest rate cuts and stabilization of mortgage rates [11][33] - The company anticipates continued price deflation in specialty products through the end of 2024, with expectations for improvement in 2025 [27][28] Other Important Information - The company repurchased $15 million in stock during the second quarter, totaling over $120 million since the beginning of 2022, demonstrating a commitment to returning capital to shareholders [10][22] - The liquidity position remains strong, with cash on hand at $491 million and total available liquidity of $838 million [20] Q&A Session Summary Question: Could you provide any more color on the cadence for specialty products' volume growth? - Management indicated that specialty volumes were down low-single-digits sequentially, while structural volumes were up double digits as the quarter began [25][26] Question: What was specialty products pricing in the second quarter? - Specialty gross profit was down 6%, implying high-to-mid-single-digit price deflation, with expectations for continued negative pricing comps into Q3 and Q4 [27][28] Question: How are conversations with customers progressing regarding recovery? - Management noted that the remainder of the year is expected to be soft, with meaningful recovery anticipated in 2025, contingent on further interest rate cuts [33][34] Question: How do you view the balance between M&A opportunities, share repurchases, and Greenfield initiatives? - Management stated that both M&A and Greenfield opportunities are actively pursued, with a focus on high-return investments [43][44] Question: Are there any specialty product categories with elevated inventory levels? - Management confirmed efficient inventory management in structural products, with no significant channel issues in specialty products [60][61]

Financial Performance - Net sales for the three months ended June 29, 2024, were $768,363, a decrease of 5.8% from $815,967 for the same period last year[5] - Gross profit for the three months ended June 29, 2024, was $122,444, down 9.8% from $135,803 in the prior year, resulting in a gross margin of 15.9%[5] - Operating income decreased to $23,847 for the three months ended June 29, 2024, compared to $39,093 in the same period last year[5] - Net income for the three months ended June 29, 2024, was $14,336, a decline of 41.3% from $24,466 in the prior year[5] - Adjusted EBITDA for the three months ended June 29, 2024, was $34,395, with an Adjusted EBITDA margin of 4.5%, compared to 6.0% in the same period last year[14] - Adjusted net income for Q2 2024 was $15 million, or $1.68 adjusted diluted earnings per share, compared to $26 million, or $2.91 per diluted share in the prior year[49] - Net income for the second quarter of 2024 was $14 million, translating to a diluted earnings per share of $1.65[55] Cash Flow and Liquidity - Free cash flow for the six months ended June 29, 2024, was $(7,233), compared to $139,079 for the same period last year[1] - Cash flows from operating activities for the three months ended June 29, 2024, were $35,803, down from $64,153 in the same period last year[9] - Free cash flow generated during the second quarter was $29 million, with net cash from operating activities amounting to $36 million[56] - The company ended the second quarter with $491 million in cash on hand and a net leverage ratio of (0.9x)[55] Sales Breakdown - Specialty products net sales were $539,466 for the three months ended June 29, 2024, compared to $570,990 in the prior year, reflecting a decrease of 5.5%[10] - Structural products net sales were $228,897 for the three months ended June 29, 2024, down from $244,977 in the same period last year, a decrease of 6.6%[10] - Net sales of specialty products decreased by $32 million, or 5.5%, to $539 million in Q2 2024, while gross profit from specialty products was $104 million, a decrease of $4 million, or 4.1%[48] Assets and Liabilities - Total current assets increased to $1,158,722 as of June 29, 2024, from $1,120,399 at the end of December 30, 2023[26] - Total liabilities rose to $933,744 as of June 29, 2024, compared to $903,315 at the end of December 30, 2023[26] - The company had cash and cash equivalents of $491,392 at the end of the period, an increase from $418,325 at the end of the previous year[9] - Cash and cash equivalents decreased to $491,392 as of June 29, 2024, from $521,743 at the end of December 30, 2023[26] - The company has a total stockholders' equity of $652,332 as of June 29, 2024, compared to $634,286 at the end of December 30, 2023[26] Debt and Financing - Total debt and finance lease obligations, excluding real property finance lease obligations, was $348 million as of June 29, 2024[40] - Net debt was ($143) million, resulting in a net leverage ratio of (0.9x) using trailing twelve-month adjusted EBITDA of $160 million[40] - Interest expense for the three months ended June 29, 2024, was $4,801, down from $6,311 in the same period last year[13] Shareholder Returns - The company repurchased approximately $15 million of its common stock during the quarter, with $76 million remaining under its share repurchase authorization[50] - The company emphasizes its commitment to returning capital to shareholders through its share repurchase program[55] Market and Operational Environment - The forward-looking statements include potential risks related to housing market conditions and competition, which may impact future performance[57] - The company operates in a changing environment with inherent uncertainties that could affect its business strategy and results[57] - Effective inventory management and the ability to attract and retain qualified personnel are critical for the company's operational success[57] - The company is focused on maintaining strong cash flows and managing its debt levels effectively[57]

Financial Data and Key Metrics Changes - The company reported net sales of $726 million, a decrease of 9% year-over-year, with adjusted EBITDA of $39 million, resulting in a 5.3% adjusted EBITDA margin [13][21][56] - Total gross profit was $128 million, with a gross margin of 17.6%, which is an increase of 90 basis points from the prior period [21] - Adjusted net income was $19 million, or $2.14 per share [13][49] Business Line Data and Key Metrics Changes - Specialty products accounted for approximately 70% of net sales and over 80% of gross profit, with net sales of $504 million, down 11% year-over-year [14][50] - Gross profit from specialty products was $104 million, down 2% year-on-year, with a specialty gross margin of 20.7%, up 190 basis points from last year [24][50] - Structural products had net sales of $222 million, down 3% compared to the prior year, with a gross profit of $24 million and a gross margin of 10.6%, down 110 basis points [52] Market Data and Key Metrics Changes - The broader housing market remains volatile, with March housing starts sliding to an adjusted annual rate of 1.32 million, down 15% from February [43] - Single-family housing starts dropped roughly 12%, while large multi-family starts fell 21% [43] - Existing home sales are at their lowest level in nearly 30 years, impacting repair and remodel activity [45] Company Strategy and Development Direction - The company aims to grow its core business in five key specialty product categories: engineered wood, siding, industrial products, millwork, and outdoor living [11][12] - There is a commitment to allocate capital for M&A and greenfield initiatives to expand geographic reach and support specialty product sales growth [12] - The company is focused on operational, business, and digital excellence to enhance customer experience and drive growth [39] Management's Comments on Operating Environment and Future Outlook - Management expressed a belief in the long-term prospects of the housing and building products sector, despite near-term uncertainties [20] - The company anticipates continued price deflation in specialty products but expects moderation as the year progresses [50][61] - Management noted that while large builders have advantages in the current market, the company is investing in strategies to capture more business from them [142] Other Important Information - The company experienced deflation in specialty product sales due to extreme weather conditions in January, impacting volumes [15] - Average lumber prices were about $403 per thousand board feet, a 2% decrease year-over-year, while panel prices were about $615 per thousand square feet, a 23% increase [26] - The company has a strong balance sheet with cash on hand of $481 million and available liquidity of $828 million [27] Q&A Session Summary Question: Can you provide more color on the cadence of specialty volume growth? - Management indicated that volumes improved in February and March, with modest growth in specialty volumes by the end of the quarter [59] Question: What is the outlook for specialty products pricing in 2024? - Management expects continued deflationary pressures but anticipates moderation as the year progresses [61] Question: Can you provide details on the greenfield initiative? - The company is evaluating several markets for potential greenfield operations, particularly in regions with favorable housing starts and demographic trends [63][100] Question: How is the company managing its capital allocation? - The company aims to maintain a strong balance sheet while pursuing disciplined M&A strategies and opportunistic share repurchases [71][147] Question: What changes have been observed in customer behavior recently? - Management noted steady-state business from customers, aligning with seasonal buying patterns [108]

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Financial Performance - Net sales for Q1 2024 were $726 million, with a gross profit of $128 million and a gross margin of 17.6%[2]. - Adjusted EBITDA for the quarter was $39 million, representing 5.3% of net sales, benefiting from approximately $7 million related to import duties from prior periods[2][11]. - Net income was $17 million, or $2.00 diluted earnings per share, compared to $18 million, or $1.94 per diluted share in the prior year[5]. - For the first quarter of 2024, net sales were $726 million, a decrease of $72 million, or 9.0% compared to the first quarter of 2023[39]. - Gross profit for the first quarter was $128 million, down $6 million, or 4.4% year-over-year, with a gross margin of 17.6%, an increase of 90 basis points from the same period last year[39]. - Adjusted EBITDA was $39 million, or 5.3% of net sales, compared to $47 million, or 5.9% of net sales in the first quarter of 2023[41]. - Basic earnings per share (EPS) for the first quarter was $2.02, compared to $1.96 in the same period last year[34]. - Diluted EPS for the first quarter was $2.00, compared to $1.94 in the same period last year[34]. - Adjusted net income was $19 million, or $2.14 per diluted share, down from $23 million, or $2.53 per diluted share in the prior year[5]. - Net income for the three months ended March 30, 2024, was $17,492, compared to $17,812 for the same period last year, a decrease of 1.8%[58]. - Adjusted EBITDA margin decreased to 5.3% from 5.9% year-over-year, reflecting a decline in profitability[63]. - Total net sales for the three months ended March 30, 2024, were $726,244, down from $797,904, a decrease of 8.9%[66]. Specialty Products - Net sales of specialty products decreased by $64 million, or 11%, to $504 million, while gross margin improved to 20.7% from 18.8% in the prior year[12]. - The decline in specialty product sales was attributed to deflationary impacts across several categories[12]. - Specialty products gross margin improved to 20.7% from 18.8% year-over-year, indicating better cost management in this category[66]. - Specialty product gross margin for the first four weeks of the second quarter of 2024 was in the range of 18% to 19%[43]. Cash Flow and Liquidity - Net cash used in operating activities was $31 million, a significant decrease from $89 million of net cash provided in the prior year[14]. - Available liquidity stood at $828 million, including $481 million in cash and cash equivalents[2][15]. - The company reported strong liquidity, allowing for flexibility in pursuing strategic initiatives and returning capital to shareholders[38]. - Free cash flow for the three months ended March 30, 2024, was $(36,582), compared to $79,957 for the same period last year, showing a significant decline[72]. - Cash and cash equivalents at the end of the period were $481,309, down from $521,743, a decrease of 7.7%[58]. Debt and Liabilities - The company reported a net debt of ($133) million, resulting in a net leverage ratio of (0.8x) on trailing twelve-month Adjusted EBITDA of $175 million[15]. - Total liabilities increased to $938,424 from $903,315, an increase of 3.9%[57]. - Net debt, excluding cash and cash equivalents, was $110,758, down from $194,530 year-over-year, indicating improved leverage[64]. Operational Expenses and Investments - Selling, general and administrative (SG&A) expenses were $91 million in the first quarter, consistent with the prior year period[40]. - The company invested $5 million in capital improvements during the first quarter, down from $9 million in the same period last year[42]. - The company has $91.4 million remaining under its share repurchase authorization[42]. Accounts Receivable - Accounts receivable increased to $288,244 from $228,410, reflecting a rise of 26.2%[57].

BlueLinx Holdings Inc. (NYSE:BXC) Q4 2023 Earnings Conference Call February 21, 2024 10:00 AM ET Company Participants Tom Morabito - Investor Relations Officer Shyam Reddy - President and CEO Andy Wamser - CFO Conference Call Participants Greg Palm - Craig-Hallum Capital Group Jeffrey Stevenson - Loop Capital Reuben Garner - Benchmark Company Kurt Yinger - D.A. Davidson Operator Ladies and gentlemen, thank you for standing by, and welcome to the BlueLinx Holdings Fourth Quarter and Full Year 2023 Earnings C ...

Financial Performance - Net sales for the fiscal year ended December 30, 2023, were $3,136,381, a decrease from $4,450,214 in the previous year, representing a decline of approximately 29.6%[151] - Gross profit for the fiscal year 2023 was $527,017, down from $832,984 in fiscal 2022, indicating a decrease of about 36.6%[151] - Operating income for fiscal 2023 was $138,449, compared to $439,087 in fiscal 2022, reflecting a decline of approximately 68.4%[151] - Basic earnings per share for fiscal 2023 were $5.40, a significant decrease from $31.75 in fiscal 2022[151] - The total operating expenses for fiscal 2023 were $388,568, slightly down from $393,897 in fiscal 2022[151] Shareholder Actions - The company repurchased 506,312 shares of common stock for $42.1 million at an average price of $83.21 per share[208] Product Segmentation - Specialty products accounted for approximately 70% of net sales in fiscal 2023, while structural products represented about 30%[209] Pension Plan Settlement - The company settled its frozen defined benefit pension plan during the fourth quarter of fiscal 2023, transferring future financial responsibility to an insurance company[153] - The company anticipates no additional funding obligations related to the settled pension plan, with some union employees still participating in multi-employer pension plans[153] Goodwill and Valuation - The valuation allowance related to net operating losses as of December 30, 2023, was approximately $3.5 million[157] - As of December 30, 2023, the carrying value of goodwill was $55.4 million, representing less than 4% of consolidated assets[162] - The company performed a quantitative annual goodwill assessment, which indicated that goodwill was not impaired[162] Financial Instruments and Risks - The company has no material financial instruments exposed to commodity price risk as of December 30, 2023[165] - The prices of building products, including OSB, plywood, lumber, and rebar, are influenced by market supply and demand, economic conditions, and competition[165] - The company had no outstanding borrowings on its revolving credit facility as of December 30, 2023[166] - Senior secured notes bear interest at a fixed rate, insulating the company from interest rate increases if debt covenants are maintained[166] - The company may enter into derivative financial instruments to mitigate commodity price fluctuations, but had none in place as of December 30, 2023[165] - Interest rate changes could impact the terms and pricing of future refinancings of term debt[166] - The company is exposed to interest rate risk from fluctuations in variable-rate SOFR when amounts are outstanding on its revolving credit facility[166] - The company is subject to market risks, including commodity price risk and interest rate risk, as part of its ongoing business operations[164]