BlueLinx Holdings Inc. (NYSE: BXC), a leading distributor of
building and industrial products in the United States, today
announced that it has completed sale-leaseback transactions for
aggregate net cash proceeds of $27.2 million, which were used to
repay indebtedness under the Company’s term loan. The
transactions closed on December 31, 2019.
The four facilities included in these
sale-leaseback transactions are located in Kansas City, Missouri;
Nashville, Tennessee; Richmond, Virginia; and St. Louis,
Missouri. As a part of the transactions, the Company entered
into lease agreements for each of the properties for initial terms
of 18 years, demonstrating its long-term commitment to each of
these local markets.
Management Commentary
Mitch Lewis, President and Chief Executive
Officer, stated, “I am very pleased to announce the closing of
these latest sale-leaseback transactions, which generated $27.2
million in net cash proceeds for debt repayment. As we have
consistently stated, deleveraging is a priority, and a key path to
achieving this objective has been through the successful
monetization of our owned real estate portfolio.
"We remain in active and ongoing discussions
with other sale-leaseback and outright sale opportunities, and
believe these efforts should generate additional meaningful debt
reduction in the first quarter.”
Term Loan Amendment
Concurrent with the sale-leaseback transactions,
the Company entered into an amendment to its term loan facility
that gives the Company until March 27, 2020, to satisfy the
designated term loan principal balance of $95.3 million to maintain
the leverage covenant levels established in the third amendment to
the facility. The amount of additional principal repayment to
reach that level was reduced to approximately $23.7 million
following the term loan repayment described above, and can be
satisfied with proceeds from real estate transactions and asset
sales, as well as voluntary prepayments using cash on hand or funds
from its revolving credit facility. Among other things, the
amendment provides the Company additional flexibility and time to
maximize sale proceeds and obtain better cap rates for the other
sale-leaseback and outright sale opportunities that it is currently
pursuing.
Supplemental Information
As the Company has noted previously, the
calculation of the leverage ratio under its term loan facility 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. Liabilities related to
sale-leaseback transactions are excluded from the calculation.
Following the term loan repayment described above, the
Company’s term loan balance is approximately $119.0 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 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.
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 our commitment to local markets; the status of our
discussions and efforts with respect to sale-leaseback and real
estate sale transactions; our ability to consummate additional real
estate monetization transactions on favorable terms, if at all, and
their ability to generate debt reduction; and the amount of
anticipated adjustments and add-backs for calculating Consolidated
EBITDA under our term loan agreement at our 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 led 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 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; our
ability to complete offerings under our shelf registration
statement on favorable terms, or at all; 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.
BlueLinx (NYSE:BXC)
Historical Stock Chart
From Aug 2024 to Sep 2024
BlueLinx (NYSE:BXC)
Historical Stock Chart
From Sep 2023 to Sep 2024