OREANDA-NEWS.  BlueLinx Holdings Inc. (NYSE:BXC), a leading distributor of building products in North America, today reported financial results for the fiscal fourth quarter and audited financial results for the fiscal year-ended January 2, 2016.

Fourth Quarter and Fiscal Year Financial Highlights

  • Adjusted EBITDA of $4.2 million, an increase of 121% from prior year quarter
  • Gross margin up 105 basis points from prior year quarter
  • Net debt down $23.6 million from prior year-end

“We are pleased to announce that we successfully completed the extension of our CMBS mortgage and ABL and Tranche A loans simultaneously, extending our mortgage for three years and our ABL and Tranche A loans through July 15, 2017. This is the first step in significantly reducing the Company’s financial leverage and enabling us to quickly monetize our real estate portfolio while we continue our working capital emphasis,” said Mitch Lewis, President and Chief Executive Officer.

Lewis continued, “Our fourth quarter results reflect the momentum we began to enjoy last year with our gross margin and profitability initiatives. Our emphasis on enhancing margins while maintaining our focus on managing the Company’s expenses contributed to this improved performance.”

Susan O’Farrell, Senior Vice President and Chief Financial Officer added, “As mentioned last week on our earnings call, we are encouraged that our working capital initiatives drove a year-end cash utilization improvement of $52.2 million from full year fiscal year 2014.  In 2015, we generated $39.9 million in cash from operations versus cash used of $12.3 million from operations in 2014. Additionally, net debt was reduced by $23.6 million for the 2015 year-end when compared to the same period a year ago, decreasing both our mortgage and asset-based revolving credit balances.”

Fourth Quarter Results Compared to Prior Year Period
Revenues for the fiscal fourth quarter were $428.2 million, a decrease of 5.7% from 2014 levels.  Prices for structural products were down 12%, led mostly by lumber price declines, while lumber unit volumes were up 6%.  Unit volumes for our specialty lumber and siding categories increased approximately 26% and 5%, respectively.  Gross margin in fiscal fourth quarter 2015 was 12.0%, an increase of 105 basis points from fiscal fourth quarter 2014 and gross profit in fiscal fourth quarter 2015 was $51.5 million, versus $49.8 million in fiscal fourth quarter 2014.

Selling, general and administrative costs were reduced by $2.8 million year over year primarily in fuel, payroll related expense categories, and other expenses. The Company recorded a net loss of $6.1 million for fiscal fourth quarter 2015 compared to a net loss of $7.6 million for fiscal fourth quarter 2014, an increase in net income of $1.5 million. Adjusted EBITDA for the fiscal fourth quarter 2015 was $4.2 million, versus Adjusted EBITDA of $1.9 million for the same period a year ago. 

Full Year Fiscal 2015 Financial Results Compared to Prior Year
The Company reported revenues for fiscal 2015 of $1,916.6 million, a decline of $62.8 million, or 3%, on a comparable basis to $1,979.4 million in fiscal 2014. Gross profit for the twelve months ended January 2, 2016, totaled $222.5 million, compared to $229.1 million for the fiscal year ended January 3, 2015, while gross margin remained flat year over year at 11.6%.

Operating expenses were reduced by $9.9 million year over year, mainly driven by the reduction in selling, general and administrative costs of $15.4 million, offset by a gain on property sales in 2014 of $5.3 million. The Company recorded a net loss of $11.6 million, $(0.13) per basic and diluted share, in fiscal 2015 compared to a net loss of $13.9 million, $(0.16) per basic and diluted share, in fiscal 2014, an improvement in net income of $2.3 million. Adjusted EBITDA for fiscal 2015 was $24.8 million, versus Adjusted EBITDA of $24.6 million for the fiscal year 2014.

Liquidity and Capital Resources
As of January 2, 2016, the Company had $52.6 million of excess availability under its asset-based revolving credit facilities, based on qualifying inventory and receivables.

Use of Non-GAAP Measures
BlueLinx reports its financial results in accordance with U.S. generally accepted accounting principles (“GAAP”). The Company also believes that presentation of certain non-GAAP measures, i.e., results excluding certain charges or other nonrecurring events, when appropriate, provides useful information for the understanding of its ongoing operations and enables investors to focus on period-over-period operating performance, without the impact of significant special items, and thereby enhances the user's overall understanding of the Company's current financial performance relative to past performance and provides a better baseline for modeling future earnings expectations. Any non-GAAP measures used herein are reconciled in the financial tables accompanying this news release. The Company cautions that non-GAAP measures should be considered in addition to, but not as a substitute for, the Company’s reported GAAP results.

Adjusted EBITDA is a non-GAAP measure that management uses to evaluate the performance of the Company. Adjusted EBITDA, as we define it, is an amount equal to net income (loss) plus interest expense and related items, income taxes, stock compensation, depreciation and amortization, further adjusted to exclude other non-cash items and certain other adjustments. Adjusted EBITDA is presented herein because we believe it is a useful supplement to cash flow from operations in understanding cash flows generated from operations that are available for debt service (interest and principal payments) and further investment in acquisitions. However, Adjusted EBITDA is not a presentation made in accordance with GAAP, and is not intended to present a superior measure of the financial condition from those determined under GAAP.