BlueLinx Holdings Inc. (NYSE: BXC), a leading distributor of
building and industrial products in the United States, today
announced an update on its deleveraging initiatives and operations.
The Company continues to actively explore sale leaseback and real
estate sale opportunities, and expects to be able to announce
further details on these activities in the coming weeks. In
addition, on November 22, 2019, the Company filed a three-year, $50
million universal shelf registration statement on Form S-3 with the
United States Securities and Exchange Commission (SEC).
Management Commentary
Mitch Lewis, President and Chief Executive Officer, stated, “We
are making good progress at various stages of several real estate
monetization opportunities through sale leasebacks and outright
sales from our $100 million portfolio of owned real estate. We
believe these efforts should generate meaningful debt reduction in
the next 60 days. In addition, to provide additional financial
flexibility, we filed a shelf registration statement. While we have
no present plans to issue securities under the shelf registration
statement, it adds to our options by providing accessibility to the
capital markets for the next three years, if and when we determine
that to be appropriate.”
Mr. Lewis also provided the following update on operations: “We
are pleased to report tangible gains in volume as the Company
continues to emphasize customer service, sales growth, and
operational efficiency. The sales volume recovery discussed during
BlueLinx’s third quarter earnings call has continued through the
first seven weeks of the fourth quarter. For that period, excluding
the effect of the previously discussed loss of a key siding product
line, we continued to make progress recapturing market share, as
evidenced by overall volumes being up approximately 3% over the
comparable prior year period.”
Balance Sheet and Term Loan Information
Additionally, the Company is clarifying the calculation of
the leverage ratio under its term loan agreement. The ratio for any
period is generally determined by taking the Company’s
“Consolidated Total Debt” and dividing it by the Company’s
“Consolidated EBITDA,” as those terms are defined in the term loan
agreement.
Consolidated Total Debt is generally determined by adding the
balance of the Company’s term loan, the prior month’s average
balance of its revolving credit facility, and its equipment finance
lease liability, and reducing that amount by unrestricted cash up
to $10.0 million. At September 28, 2019, the Company’s term loan
balance was $147.2 million, the average balance of its revolving
credit facility was $357.9 million, its equipment finance lease
liability was $34.4 million, and its unrestricted cash was $10.0
million.
Consolidated EBITDA is generally determined by taking the
Adjusted EBITDA that the Company reports, and adding additional
adjustments and add-backs specified by the term loan agreement. The
Company anticipates that the additional adjustments and add-backs
to Adjusted EBITDA for calculating Consolidated EBITDA under the
term loan will be approximately $5 million to $7 million at the
Company’s 2019 fiscal year end.
The leverage ratio and its components are described in more
detail in the Company’s term loan agreement, as amended, which is
available as an exhibit to the Company’s periodic filings with the
SEC.
About the Shelf Registration Statement
Although the shelf registration statement has been filed with
the SEC, it has not yet become effective. If and when the shelf
registration statement is declared effective by the SEC, BlueLinx
will be able to offer and sell, from time to time, up to $50
million of securities including common stock, preferred stock, debt
securities, warrants, units, or any combination of such securities.
The Company has no present plans to issue securities under the
shelf registration statement, and any offering of securities will
be subject to market and other conditions. There can be no
assurance as to the actual size or terms of any offering or that
any offering will be made or completed. Any such offers and sales
may be made through one or more methods of distribution, subject to
market conditions and the Company’s capital desires or needs. The
terms of any offering under the shelf registration statement, and
the intended uses of the net proceeds therefrom, will be
established at the time of such offering and will be described in a
prospectus supplement filed with the SEC prior to completion of the
offering. A copy of the prospectus included in the registration
statement may be obtained on the SEC’s website at www.sec.gov.
The securities covered under the shelf registration statement
may not be sold, nor may offers to buy be accepted, prior to the
time the shelf registration statement becomes effective. This press
release is not an offer to sell or a solicitation of an offer to
buy, nor shall there be any sale of securities in any state or
jurisdiction in which such offer, solicitation or sale would be
unlawful prior to registration or qualification under the
securities laws of any such state or jurisdiction.
About BlueLinx Holdings Inc.
BlueLinx (NYSE: BXC) is a leading wholesale distributor of
building and industrial products in the United States with over
50,000 branded and private-label SKUs, and a broad distribution
footprint servicing 40 states. BlueLinx has a differentiated
distribution platform, value-driven business model and extensive
cache of products across the building products industry.
Headquartered in Marietta, Georgia, BlueLinx has over 2,200
associates and distributes its comprehensive range of structural
and specialty products to approximately 15,000 national, regional,
and local dealers, as well as specialty distributors, national home
centers, industrial, and manufactured housing customers. BlueLinx
encourages investors to visit its website, www.BlueLinxCo.com,
which is updated regularly with financial and other important
information about BlueLinx.
Contacts
Susan O’Farrell, SVP, CFO & TreasurerBlueLinx Holdings
Inc.(770) 953-7000
Mary Moll, Investor Relations(866)
671-5138investor@bluelinxco.com
Forward-Looking Statements
This press release 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,” “expect,” “estimate,”
“intend,” “project,” “plan,” “will be,” “will likely continue,”
“will likely result” or words or phrases of similar meaning. These
forward-looking statements include, but are not limited to,
statements about the Company’s sale leaseback and real estate sale
opportunities, the Company’s plans to announce further details on
its sale leaseback and real estate opportunities, the Company’s
progress with its real estate monetization opportunities and their
ability to generate debt reduction, filing of the universal shelf
registration statement with the SEC, the Company’s plans to issue
securities under the shelf registration statement, offerings to be
made pursuant to the shelf registration statement, gains in volume,
the Company’s progress toward recapturing market share, and the
amount of anticipated adjustments and add-backs for calculating
Consolidated EBITDA under the Company’s term loan agreement at the
Company’s 2019 fiscal year end.
Forward-looking statements in this press release are based on
estimates and assumptions made by our management that, although
believed by us to be reasonable, are inherently uncertain.
Forward-looking statements involve risks and uncertainties that may
cause our business, strategy, or actual results to differ
materially from the forward-looking statements. These risks and
uncertainties include those listed under the heading “Risk Factors”
in Item 1A of our Annual Report on Form 10-K for the year ended
December 29, 2018, and those discussed in our Quarterly Reports on
Form 10-Q and in our periodic reports filed with the SEC from time
to time. We operate in a changing environment in which new risks
can emerge from time to time. It is not possible for management to
predict all of these risks, nor can it assess the extent to which
any factor, or a combination of factors, may cause our business,
strategy, or actual results to differ materially from those
contained in forward-looking statements. Factors that may cause
these differences include, among other things: our ability to
monetize real estate assets; our ability to complete offerings
under the shelf registration statement on favorable terms, or at
all; our ability to integrate and realize anticipated synergies
from acquisitions; loss of material customers, suppliers, or
product lines in connection with acquisitions; operational
disruption in connection with the integration of acquisitions; our
indebtedness and its related limitations; sufficiency of cash flows
and capital resources; changes in interest rates; fluctuations in
commodity prices; adverse housing market conditions;
disintermediation by customers and suppliers; changes in prices,
supply and/or demand for our products; inventory management;
competitive industry pressures; industry consolidation; product
shortages; loss of and dependence on key suppliers and
manufacturers; new tariffs; our ability to successfully implement
our strategic initiatives; fluctuations in operating results;
sale-leaseback transactions and their effects; real estate leases;
exposure to product liability claims; changes in our product mix;
petroleum prices; information technology security and business
interruption risks; litigation and legal proceedings; natural
disasters and unexpected events; activities of activist
stockholders; labor and union matters; limits on net operating loss
carryovers; pension plan assumptions and liabilities; risks related
to our internal controls; retention of associates and key
personnel; federal, state, local and other regulations, including
environmental laws and regulations; and changes in accounting
principles. Given these risks and uncertainties, we caution you not
to place undue reliance on forward-looking statements. We expressly
disclaim any obligation to update or revise any forward-looking
statement as a result of new information, future events or
otherwise, except as required by law.
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