BlueLinx (BXC) - 2025 Q1 - Quarterly Results

First Quarter 2025 Results Overview Management Commentary and Highlights The company maintained solid margins and continued its capital return program despite challenging market and weather conditions - CEO Shyam Reddy stated that the company maintained solid margins in both specialty and structural products despite challenging weather and market conditions[4] - The company returned capital to shareholders by repurchasing $15 million worth of shares during the quarter, with $31 million remaining on the share repurchase authorization[4][9] Q1 2025 Key Metrics Summary | Metric | Value | | :--- | :--- | | Net Sales | $709 million | | Gross Profit | $111 million | | Gross Margin | 15.7% | | Net Income | $2.8 million | | Diluted EPS | $0.33 | | Adjusted EBITDA | $19.6 million | | Available Liquidity | $795 million | | Share Repurchases | $15 million | Financial Performance Overall Financial Performance Net sales decreased 2% year-over-year to $709 million, while net income declined significantly to $2.8 million Q1 2025 vs Q1 2024 Key Financials | Financial Metric | Q1 2025 | Q1 2024 | Change | | :--- | :--- | :--- | :--- | | Net Sales | $709M | $726M | -2.3% | | Gross Profit | $111M | $128M | -13.3% | | Gross Margin | 15.7% | 17.6% | -190 bps | | Net Income | $2.8M | $17.5M | -84.0% | | Diluted EPS | $0.33 | $2.00 | -83.5% | | Adjusted Net Income | $2.3M | $18.8M | -87.8% | | Adjusted Diluted EPS | $0.27 | $2.14 | -87.4% | | Adjusted EBITDA | $19.6M | $38.8M | -49.5% | Specialty Products Specialty products net sales decreased 4.9% YoY to $479 million, attributed to price deflation and lower volumes Specialty Products Performance (Q1 2025 vs Q1 2024) | Metric | Q1 2025 | Q1 2024 | Change | | :--- | :--- | :--- | :--- | | Net Sales | $479M | $504M | -4.9% | | Gross Profit | $90M | $104M | -13.7% | | Gross Margin | 18.7% | 20.7% | -200 bps | - The decrease in net sales was driven by price deflation from external market conditions and lower volumes for most specialty product categories[6] - Excluding import duty-related benefits, the specialty products gross margin was 18.2% in Q1 2025 compared to 19.4% in Q1 2024, a decline of 120 basis points[6][8] Structural Products Structural products net sales grew 3.3% YoY to $230 million, driven by increased lumber pricing and higher volumes Structural Products Performance (Q1 2025 vs Q1 2024) | Metric | Q1 2025 | Q1 2024 | Change | | :--- | :--- | :--- | :--- | | Net Sales | $230M | $222M | +3.3% | | Gross Profit | $21.4M | $23.6M | -9.3% | | Gross Margin | 9.3% | 10.6% | -130 bps | - The increase in structural sales was due to overall increases in lumber pricing and increased lumber and panel volumes, partially offset by price declines in panels[7] Operating Expenses and Cash Flow SG&A expenses increased by $2.8 million to $94 million, while the company experienced a seasonal net cash outflow from operations - SG&A expenses were $94 million, a $2.8 million increase from the prior year, mainly due to technology initiatives and higher logistics costs[11] - Net cash used in operating activities was $(34) million, and free cash flow was $(40) million, which is typical for the first fiscal quarter due to seasonality[14] Capital Allocation and Financial Position Capital Investments and Share Repurchases The company invested in facilities and its fleet while continuing its share repurchase program with a $15 million buyback - Invested $6.4 million in property and equipment, primarily for improvements to distribution facilities and digital transformation[15] - Entered into $28 million of new finance leases, mainly to enhance the company's fleet[15] - Purchased approximately $15 million of the Company's common stock, with $31 million remaining under the $100 million share repurchase program[15] Debt and Liquidity The company maintained a strong liquidity position of $795 million with a negative net debt position and a low net leverage ratio Debt and Liquidity Position (as of March 29, 2025) | Metric | Value | | :--- | :--- | | Total Debt & Finance Leases (excl. real property) | $374 million | | Cash and Cash Equivalents | $449 million | | Net Debt (excl. real property) | ($75) million | | Available Liquidity | $795 million | | Net Leverage Ratio (excl. real property) | (0.7x) | Business Outlook Second Quarter 2025 Outlook The company anticipates stable gross margins for Q2 2025 and has observed improved average daily sales volumes - Through the first four weeks of Q2 2025, specialty product gross margin was in the range of 17% to 18%[17] - Structural product gross margin was in the range of 9% to 10% for the same period[17] - Average daily sales volumes improved versus both Q1 2025 and Q2 2024[17] Supplemental Information Conference Call Information A conference call to discuss financial results is scheduled for April 30, 2025, with a webcast available online - A conference call to discuss results is scheduled for April 30, 2025, at 10:00 a.m. Eastern Time[18] - A webcast and replay will be available in the Investor Relations section of the BlueLinx website[18] Forward-Looking Statements The report contains forward-looking statements subject to risks and uncertainties that could cause results to differ materially - The report contains forward-looking statements about strategy, liquidity, debt, future share repurchases, and the Q2 2025 outlook[23] - These statements are subject to risks and uncertainties including, but not limited to, adverse housing market conditions, competition, trade policies, and pricing variability[24] Non-GAAP Measures The company uses non-GAAP measures like Adjusted EBITDA and Free Cash Flow to provide a clearer view of its performance - Adjusted EBITDA is defined as net income plus interest, taxes, depreciation & amortization, and further adjusted for certain non-cash and special items[29] - Adjusted Net Income is defined as Net Income adjusted for certain non-cash and special items and their tax impacts[32] - Free Cash Flow is defined as net cash from operating activities less total capital expenditures[34] - Net Debt is calculated as total debt and finance lease obligations, less cash and cash equivalents, and is used to assess liquidity and leverage[37] Financial Statements and Reconciliations Condensed Consolidated Statements of Operations For Q1 2025, the company reported net sales of $709.2 million and net income of $2.8 million, or $0.33 per diluted share Condensed Consolidated Statements of Operations (Unaudited) | (In thousands, except per share amounts) | Three Fiscal Months Ended March 29, 2025 | Three Fiscal Months Ended March 30, 2024 | | :--- | :--- | :--- | | Net sales | $ 709,226 | $ 726,244 | | Gross profit | $ 111,129 | $ 127,681 | | Operating income | $ 10,724 | $ 27,668 | | Net income | $ 2,805 | $ 17,492 | | Diluted earnings per share | $ 0.33 | $ 2.00 | Condensed Consolidated Balance Sheets As of March 29, 2025, total assets were $1.63 billion, with cash and cash equivalents decreasing to $449.0 million Condensed Consolidated Balance Sheets (Unaudited) | (In thousands) | As of March 29, 2025 | As of December 28, 2024 | | :--- | :--- | :--- | | ASSETS | | | | Cash and cash equivalents | $ 449,020 | $ 505,622 | | Inventories, net | $ 399,555 | $ 355,909 | | Total current assets | $ 1,166,303 | $ 1,133,988 | | Total assets | $ 1,633,470 | $ 1,577,717 | | LIABILITIES AND EQUITY | | | | Total current liabilities | $ 280,574 | $ 233,724 | | Total liabilities | $ 997,356 | $ 931,276 | | Total stockholders' equity | $ 636,114 | $ 646,441 | | Total liabilities and stockholders' equity | $ 1,633,470 | $ 1,577,717 | Condensed Consolidated Statements of Cash Flows The first quarter saw a net cash usage of $33.9 million from operations and $19.3 million from financing activities Condensed Consolidated Statements of Cash Flows (Unaudited) | (In thousands) | Three Fiscal Months Ended March 29, 2025 | Three Fiscal Months Ended March 30, 2024 | | :--- | :--- | :--- | | Net cash used in operating activities | $ (33,908) | $ (31,135) | | Net cash used in investing activities | $ (3,392) | $ (5,320) | | Net cash used in financing activities | $ (19,302) | $ (3,979) | | Net change in cash and cash equivalents | $ (56,602) | $ (40,434) | | Cash and cash equivalents at end of period | $ 449,020 | $ 481,309 | Gross Profit and Gross Margin by Product Category This schedule disaggregates revenues and gross profit, showing an adjusted total gross margin of 15.3% for Q1 2025 Gross Profit and Margin by Product Category (Q1 2025) | Product Category | Net Sales ($M) | Gross Profit ($M) | Gross Margin % | | :--- | :--- | :--- | :--- | | Specialty products | $479.4 | $89.8 | 18.7% | | Structural products | $229.8 | $21.4 | 9.3% | | Total | $709.2 | $111.1 | 15.7% | - Excluding a $2.4 million benefit from import duty-related items, the company's gross margin for Q1 2025 would have been 15.3%, compared to 16.7% in Q1 2024 (which excluded a $6.5 million benefit)[46] Reconciliation of Non-GAAP Measurements This section reconciles GAAP Net Income of $2.8 million to non-GAAP Adjusted EBITDA of $19.6 million for Q1 2025 Reconciliation of Net Income to Adjusted EBITDA (Q1 2025 vs Q1 2024) | (In thousands) | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | Net income | $ 2,805 | $ 17,492 | | Depreciation and amortization | $ 9,554 | $ 9,433 | | Interest expense, net | $ 6,580 | $ 4,624 | | Provision for income taxes | $ 1,339 | $ 5,552 | | Other adjustments | $ (720) | $ 1,680 | | Adjusted EBITDA | $ 19,558 | $ 38,781 | Reconciliation of Net Income to Adjusted Net Income (Q1 2025 vs Q1 2024) | (In thousands) | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | Net income | $ 2,805 | $ 17,492 | | Adjustments (pre-tax) | $ (720) | $ 1,680 | | Tax impacts of adjustments | $ 233 | $ (405) | | Adjusted net income | $ 2,318 | $ 18,767 | Liquidity Measures The company reported a negative Net Debt of $74.7 million and a Net Leverage Ratio of (0.7x) as of March 29, 2025 Net Debt and Leverage Ratio Calculation (as of March 29, 2025) | ($ amounts in thousands) | Value | | :--- | :--- | | Total debt and finance leases | $ 616,755 | | Less: available cash and cash equivalents | $ 449,020 | | Net debt (non-GAAP) | $ 167,735 | | Net debt, excluding real property finance leases (non-GAAP) | $ (74,655) | | Trailing twelve-month adjusted EBITDA | $ 112,133 | | Net leverage ratio excl. real property finance leases | (0.7x) | Free Cash Flow Reconciliation (Q1 2025) | (In thousands) | Value | | :--- | :--- | | Net cash used in operating activities | $ (33,908) | | Less: Disbursements for property and equipment | $ (5,932) | | Free cash flow - non-GAAP | $ (39,840) |