BlueLinx (BXC) - 2025 Q2 - Quarterly Results

Executive Summary & Highlights Q2 2025 Performance Overview BlueLinx achieved net sales of $780 million in Q2 2025, a 2% increase year-over-year, driven by growth in structural and specialty products despite a soft market - Net sales increased by 2% year-over-year, with both structural and specialty products showing growth in sales and volume despite a soft market environment[4][5] - Gross profit decreased by 2% year-over-year, and the gross margin declined by 60 basis points[4][5] - The company repurchased $20 million of common stock in the second quarter and announced a new $50 million share repurchase authorization, bringing the total availability to $61,5 million[4][8][13] Q2 2025 Key Financial Data | Metric | Q2 2025 (Millions) | Q2 2024 (Millions) | Change (%) | | :----- | :----------------- | :----------------- | :--------- | | Net Sales | $780 | $768 | 2% | | Gross Profit | $120 | $123 | -2% | | Gross Margin | 15.3% | 15.9% | -0.6 pts | | Net Income | $4.3 | $14.3 | -69.9% | | Diluted EPS | $0.54 | $1.65 | -67.3% | | Adjusted Net Income | $5.6 | $14.7 | -61.9% | | Adjusted Diluted EPS | $0.70 | $1.68 | -58.3% | | Adjusted EBITDA | $26.8 | $34.4 | -22.1% | Strategic Focus & Capital Allocation Commentary BlueLinx continues to execute its product and channel strategies, achieving sales and volume growth in a challenging market while maintaining a strong balance sheet - The company continues to execute its product and channel strategies, achieving net sales and volume growth in both specialty and structural products despite a soft market[4] - The company will continue to execute its long-term strategy for profitable sales growth to gain market share in multi-family and other strategic focus areas[4][9] - With a strong balance sheet, $730 million in liquidity, and low leverage, the company is positioned to accelerate profitable sales growth when the housing industry rebounds[4][8][14] Financial Performance Analysis Consolidated Financial Results In Q2 2025, consolidated net sales grew 1,5% to $780,1 million, but gross profit declined 2,2% to $119,7 million, with net income significantly decreasing to $4,3 million - Selling, General, and Administrative (SG&A) expenses increased by $5,8 million year-over-year, primarily due to higher product volumes, strategic growth in the multi-family channel, and digital transformation initiatives[9] Q2 2025 Consolidated Financial Results | Metric (Thousands) | Q2 2025 | Q2 2024 | YoY Change (%) | | :----- | :------------------ | :------------------ | :------------- | | Net Sales | $780,107 | $768,363 | 1.5% | | Cost of Products Sold | $660,418 | $645,919 | 2.2% | | Gross Profit | $119,689 | $122,444 | -2.2% | | Gross Margin | 15.3% | 15.9% | -0.6 pts | | SG&A Expenses | $95,265 | $89,453 | 6.5% | | Operating Income | $15,035 | $23,847 | -37.0% | | Net Income | $4,310 | $14,336 | -69.9% | | Adjusted Net Income | $5,606 | $14,658 | -61.8% | | Adjusted EBITDA | $26,764 | $34,395 | -22.1% | Product Category Performance Specialty products net sales grew slightly by 0,7% to $543 million, while structural products net sales increased by 3,4% to $237 million, driven by higher wood prices and volume Specialty Products Specialty products net sales were $543 million in Q2 2025, a modest 0,7% increase from Q2 2024, driven by higher volumes but offset by price deflation - The increase in specialty products net sales was due to higher volumes across several product categories, largely offset by price deflation from external market conditions[6] Specialty Products Performance | Metric (Thousands) | Q2 2025 | Q2 2024 | YoY Change (%) | | :----- | :------------------ | :------------------ | :------------- | | Net Sales | $543,459 | $539,466 | 0.7% | | Gross Profit | $100,282 | $104,350 | -3.9% | | Gross Margin | 18.5% | 19.3% | -0.8 pts | Structural Products Structural products net sales grew 3,4% to $237 million in Q2 2025, primarily due to higher wood prices and increased volumes for both wood and panels - The growth in structural product sales was driven by an overall increase in wood prices and higher volumes in both wood and panels, partially offset by lower panel prices[7] Structural Products Performance | Metric (Thousands) | Q2 2025 | Q2 2024 | YoY Change (%) | | :----- | :------------------ | :------------------ | :------------- | | Net Sales | $236,648 | $228,897 | 3.4% | | Gross Profit | $19,407 | $18,094 | 7.2% | | Gross Margin | 8.2% | 7.9% | 0.3 pts | Cash Flow BlueLinx experienced a net cash outflow from operating activities of $27 million in Q2 2025, resulting in a negative free cash flow of $36 million - The negative free cash flow was attributed to lower net income, seasonal changes in working capital, and increased capital expenditures related to growth strategies and digital transformation[11] Cash Flow Overview | Metric (Thousands) | Q2 2025 | Q2 2024 | | :----- | :------------------ | :------------------ | | Net cash (used in) provided by operating activities | $(26,758) | $35,803 | | Free cash flow (non-GAAP) | $(36,365) | $29,349 | Capital Allocation and Financial Position Investments and Share Repurchases In Q2 2025, BlueLinx invested $9,9 million in capital expenditures, repurchased $20 million of stock, and announced a new $50 million share repurchase authorization - Invested $9,9 million in property and equipment, primarily for distribution facility improvements and digital transformation initiatives[12] - Entered into $5,0 million of new finance leases, mainly for fleet upgrades[12] Share Repurchase Activity | Metric | Q2 2025 (Millions) | Total Authorized (Millions) | | :----- | :----------------- | :-------------------------- | | Share Repurchases (Q2) | $20 | N/A | | New Share Repurchase Authorization | $50 | N/A | | Total Authorized Availability | N/A | $61.5 | Debt and Liquidity As of June 28, 2025, BlueLinx maintained a strong liquidity position of $730 million and a negative net leverage ratio of (0,1x) based on TTM adjusted EBITDA - Available liquidity was $730 million, comprising $387 million in cash and cash equivalents and $343 million in undrawn revolving credit facility availability[8][14] Debt and Liquidity Metrics | Metric (Millions) | As of June 28, 2025 | As of Dec 28, 2024 | | :----- | :----------------------------- | :---------------------------- | | Total Debt & Finance Lease Obligations (excl. real property) | $376 | N/A | | Cash and Cash Equivalents | $387 | $506 | | Net Debt (non-GAAP) | $230.8 | $86.9 | | Net Debt Excluding Real Property Finance Lease Liabilities (non-GAAP) | $(11.2) | $(155.8) | | Trailing Twelve-Month Adjusted EBITDA | $104.5 | $131.4 | | Net Leverage Ratio (non-GAAP) | 2.2x | 0.7x | | Net Leverage Ratio Excluding Real Property Finance Lease Liabilities (non-GAAP) | (0.1x) | (1.2x) | | Available Liquidity | $730 | N/A | Outlook Third Quarter 2025 Outlook For the first four weeks of Q3 2025, BlueLinx anticipates specialty product gross margins between 17% and 18% and structural product gross margins between 8% and 9% - Average daily sales volume is expected to be slightly up compared to Q2 2025 and flat compared to Q3 2024[15] Third Quarter 2025 Outlook (First 4 Weeks) | Metric | Q3 2025 Outlook (First 4 Weeks) | | :----- | :------------------------------ | | Specialty Product Gross Margin | 17% to 18% | | Structural Product Gross Margin | 8% to 9% | Company Information About BlueLinx BlueLinx is a leading U,S, wholesale distributor of residential and commercial building products, serving a diverse customer base across all 50 states - BlueLinx is a leading U,S, wholesale distributor of residential and commercial building products, offering branded and private-label SKUs across various categories[18] - The company has a strong market position and a broad geographic reach covering 50 states, distributing products through a network of distribution centers[18] Forward-Looking Statements This section contains cautionary notes regarding forward-looking statements, which are based on management's inherently uncertain estimates and assumptions - Forward-looking statements are based on management's estimates and assumptions, which are inherently uncertain, and actual results may differ materially[21] - Key risks include adverse housing market conditions, industry consolidation, trade policy changes, reliance on international suppliers, price fluctuations, and IT security risks[21] - The company disclaims any obligation to update or revise any forward-looking statements, except as required by law[23] Non-GAAP Measures Explanation Adjusted EBITDA and Margin Definition Adjusted EBITDA is defined as net income plus interest, taxes, depreciation, and amortization, further adjusted for certain non-cash and special items - Adjusted EBITDA is defined as net income (loss) plus interest, taxes, depreciation, and amortization, further adjusted for non-cash and special items like share-based compensation and restructuring activities[25] - Adjusted EBITDA is a primary metric used by management to evaluate operating performance and enhance investors' understanding of the company's financial results[26] - Adjusted EBITDA margin is used to define profitability quality and operational efficiency more clearly[27] Adjusted Net Income and EPS Definition Adjusted net income is net income adjusted for specific non-cash and special items and their tax effects, used to calculate adjusted earnings per share - Adjusted net income is net income adjusted for non-cash and special items such as share-based compensation, acquisition costs, and restructuring, along with their tax effects[28] - Adjusted earnings per share is calculated by dividing adjusted net income by the weighted-average number of diluted shares outstanding[28] - These metrics help investors understand financial performance and operating trends but are not GAAP presentations and may not be comparable to other companies' measures[28][29] Free Cash Flow Definition Free cash flow is defined as net cash from operating activities less total capital expenditures, indicating cash available for investment and debt reduction - Free cash flow is defined as net cash provided by or used in operating activities less total capital expenditures[30] - This metric helps assess financial performance by linking operating cash flow with capital expenditures for ongoing and improved business operations[31] - Free cash flow is a non-GAAP measure and does not represent the residual cash flow available for discretionary expenditures[31] Net Debt and Leverage Ratios Definition Net debt is total debt less cash, and leverage ratios are calculated by dividing net debt by trailing twelve-month adjusted EBITDA to assess financial flexibility - Net debt is calculated as total short-term and long-term debt, including finance leases, less cash and cash equivalents[32] - Net debt excluding real property finance lease liabilities is calculated similarly but excludes the total amount of real property finance lease obligations[32] - Net leverage ratios are derived by dividing the respective net debt figures by trailing twelve-month adjusted EBITDA to measure the ability to meet future financial obligations[32] Financial Statements Condensed Consolidated Statements of Operations This section presents the unaudited condensed consolidated statements of operations for the three and six months ended June 28, 2025, and June 29, 2024 Condensed Consolidated Statements of Operations (Selected) | Metric (Thousands) | 3 Months Ended June 28, 2025 | 3 Months Ended June 29, 2024 | 6 Months Ended June 28, 2025 | 6 Months Ended June 29, 2024 | | :----------------- | :--------------------------- | :--------------------------- | :--------------------------- | :--------------------------- | | Net sales | $780,107 | $768,363 | $1,489,333 | $1,494,607 | | Gross profit | $119,689 | $122,444 | $230,818 | $250,125 | | Operating income | $15,035 | $23,847 | $25,759 | $51,515 | | Net income | $4,310 | $14,336 | $7,115 | $31,828 | | Diluted earnings per share | $0.54 | $1.65 | $0.87 | $3.66 | Condensed Consolidated Balance Sheets This section provides the unaudited condensed consolidated balance sheets as of June 28, 2025, and December 28, 2024 Condensed Consolidated Balance Sheets (Selected) | Metric (Thousands) | As of June 28, 2025 | As of December 28, 2024 | | :----------------- | :------------------ | :---------------------- | | Total assets | $1,584,035 | $1,577,717 | | Total liabilities | $962,723 | $931,276 | | Total stockholders' equity | $621,312 | $646,441 | | Cash and cash equivalents | $386,765 | $505,622 | | Inventories, net | $391,484 | $355,909 | | Long-term debt | $295,723 | $295,061 | Condensed Consolidated Statements of Cash Flows This section details the unaudited condensed consolidated statements of cash flows for the three and six months ended June 28, 2025, and June 29, 2024 Condensed Consolidated Statements of Cash Flows (Selected) | Metric (Thousands) | 3 Months Ended June 28, 2025 | 3 Months Ended June 29, 2024 | 6 Months Ended June 28, 2025 | 6 Months Ended June 29, 2024 | | :----------------- | :--------------------------- | :--------------------------- | :--------------------------- | :--------------------------- | | Net cash (used in) provided by operating activities | $(26,758) | $35,803 | $(60,666) | $4,668 | | Net cash used in investing activities | $(9,542) | $(6,307) | $(12,934) | $(11,627) | | Net cash used in financing activities | $(25,955) | $(19,413) | $(45,257) | $(23,392) | | Net change in cash and cash equivalents | $(62,255) | $10,083 | $(118,857) | $(30,351) | | Cash and cash equivalents at end of period | $386,765 | $491,392 | $386,765 | $491,392 | Gross Profit and Gross Margin by Product Category This schedule details net sales, gross profit, and gross margin by specialty and structural product categories for recent fiscal periods Gross Profit and Gross Margin by Product Category (Selected) | Metric (Thousands) | Q2 2025 Specialty | Q2 2024 Specialty | Q2 2025 Structural | Q2 2024 Structural | | :----------------- | :---------------- | :---------------- | :----------------- | :----------------- | | Net sales | $543,459 | $539,466 | $236,648 | $228,897 | | Gross profit | $100,282 | $104,350 | $19,407 | $18,094 | | Gross margin % | 18.5% | 19.3% | 8.2% | 7.9% | Non-GAAP Reconciliations Net Income to Adjusted EBITDA Reconciliation This section provides a reconciliation of net income to Adjusted EBITDA for the three, six, and trailing twelve months ended June 28, 2025, and June 29, 2024 Net Income to Adjusted EBITDA Reconciliation (Selected) | Metric (Thousands) | 3 Months Ended June 28, 2025 | 3 Months Ended June 29, 2024 | 6 Months Ended June 28, 2025 | 6 Months Ended June 29, 2024 | | :----------------- | :--------------------------- | :--------------------------- | :--------------------------- | :--------------------------- | | Net income | $4,310 | $14,336 | $7,115 | $31,828 | | Depreciation and amortization | $9,790 | $10,120 | $19,344 | $19,553 | | Interest expense, net | $8,457 | $4,801 | $15,037 | $9,425 | | Provision for income taxes | $2,268 | $4,710 | $3,607 | $10,262 | | Share-based compensation expense | $2,341 | $1,405 | $4,863 | $3,755 | | Adjusted EBITDA | $26,764 | $34,395 | $46,322 | $73,176 | Trailing Twelve Months Net Income to Adjusted EBITDA Reconciliation (Selected) | Metric (Thousands) | Trailing Twelve Months Ended June 28, 2025 | Trailing Twelve Months Ended June 29, 2024 | | :----------------- | :----------------------------------------- | :----------------------------------------- | | Net income | $28,403 | $38,086 | | Adjusted EBITDA | $104,502 | $160,067 | Net Income to Adjusted Net Income and EPS Reconciliation This section reconciles net income and diluted EPS to their adjusted non-GAAP counterparts for the three and six months ended June 28, 2025, and June 29, 2024 Net Income to Adjusted Net Income and EPS Reconciliation (Selected) | Metric (Thousands, except per share) | 3 Months Ended June 28, 2025 | 3 Months Ended June 29, 2024 | 6 Months Ended June 28, 2025 | 6 Months Ended June 29, 2024 | | :--------------------------------- | :--------------------------- | :--------------------------- | :--------------------------- | :--------------------------- | | Net income | $4,310 | $14,336 | $7,115 | $31,828 | | Adjusted net income | $5,606 | $14,658 | $7,924 | $33,422 | | Diluted EPS | $0.54 | $1.65 | $0.87 | $3.66 | | Non-GAAP Adjusted Diluted EPS | $0.70 | $1.68 | $0.97 | $3.85 | Net Income as a Percentage of Net Sales and Adjusted EBITDA Margin (Selected) | Metric | 3 Months Ended June 28, 2025 | 3 Months Ended June 29, 2024 | 6 Months Ended June 28, 2025 | 6 Months Ended June 29, 2024 | | :----- | :--------------------------- | :--------------------------- | :--------------------------- | :--------------------------- | | Net income as a percentage of Net sales | 0.6% | 1.9% | 0.5% | 2.1% | | Adjusted EBITDA margin - non-GAAP | 3.4% | 4.5% | 3.1% | 4.9% | Liquidity Measures Reconciliation This section reconciles total debt to net debt and net cash from operating activities to free cash flow, and details the calculation of leverage ratios Liquidity Measures Reconciliation (Selected) | Metric (Thousands) | As of June 28, 2025 | As of December 28, 2024 | As of June 29, 2024 | | :----------------- | :------------------ | :---------------------- | :------------------ | | Total debt and finance leases | $617,557 | $592,543 | $591,338 | | Less: available cash and cash equivalents | $386,765 | $505,622 | $491,392 | | Net debt (non-GAAP) | $230,792 | $86,921 | $99,946 | | Net debt, excluding finance lease liabilities for real property (non-GAAP) | $(11,195) | $(155,837) | $(143,413) | | Net leverage ratio | 2.2x | 0.7x | 0.6x | | Net leverage ratio excluding real property finance lease liabilities | (0.1x) | (1.2x) | (0.9x) | Operating Cash Flow to Free Cash Flow Reconciliation (Selected) | Metric (Thousands) | 3 Months Ended June 28, 2025 | 3 Months Ended June 29, 2024 | 6 Months Ended June 28, 2025 | 6 Months Ended June 29, 2024 | | :----------------- | :--------------------------- | :--------------------------- | :--------------------------- | :--------------------------- | | Net cash (used in) provided by operating activities | $(26,758) | $35,803 | $(60,666) | $4,668 | | Free cash flow - non-GAAP | $(36,365) | $29,349 | $(76,205) | $(7,233) | Conference Call Information Conference Call Details BlueLinx will host a conference call on July 30, 2025, at 10:00 a,m, ET, with a webcast and presentation available on its investor relations website - The conference call is scheduled for July 30, 2025, at 10:00 a,m, Eastern Time, with a webcast and presentation materials available on the investor relations website[16] - Domestic live call: 1-888-660-6392, passcode: 9140086; Replay available until August 6, 2025, at 1-800-770-2030, passcode: 9140086[17]