EX-99.2 3 d300911dex992.htm EX-99.2

BlueLinx Quarterly Review 4th Quarter 2011 Exhibit 99.2

BlueLinx Holdings Inc. Forward-Looking Statement Safe Harbor - This presentation includes "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. All of these forward-looking statements 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, including, but not limited to, economic, competitive, governmental and technological factors outside of our control, that may cause our business, strategy or actual results to differ materially from the forward-looking statements. These risks and uncertainties may include, among other things: changes in the supply and/or demand for products which we distribute, especially as a result of conditions in the residential housing market; general economic and business conditions in the United States; the activities of competitors; changes in significant operating expenses; changes in the availability of capital; the ability to identify acquisition opportunities and effectively and cost-efficiently integrate acquisitions; adverse weather patterns or conditions; acts of war or terrorist activities; variations in the performance of the financial markets; and other factors described in the "Risk Factors" section in our Annual Report on Form 10-K for the fiscal year ended January 1, 2011, and in our other periodic reports filed with the SEC. In addition, the statements in this presentation are made as of February 15, 2012. We undertake no obligation to update any of the forward-looking statements made herein, whether as a result of new information, future events, changes in expectation or otherwise. These forward-looking statements should not be relied upon as representing our views as of any date subsequent to February 15, 2012. Use of Non-GAAP and Adjusted Financial Information - To supplement GAAP financial information, we use adjusted measures of operating results which are non-GAAP measures. This non-GAAP adjusted financial information is provided as additional information for investors. These adjusted results exclude certain costs, expenses, gains and losses, and we believe their exclusion can enhance an overall understanding of our past financial performance and also our prospects for the future. These adjustments to our GAAP results are made with the intent of providing both management and investors a more complete understanding of our operating performance by excluding non-recurring, infrequent or other non-cash charges that are not believed to be material to the ongoing performance of our business. The presentation of this additional information is not meant to be considered in isolation or as a substitute for GAAP measures of net earnings, diluted earnings per share or net cash provided by (used in) operating activities prepared in accordance with generally accepted accounting principles in the United States.

3 4 th Quarter Highlights Revenue Up 6.3% to $391.1 million Housing Starts Total starts increased 22.6% from the same period last year; Single family starts increased 2.4% from the same period last year Prices Average 4Q ’11 benchmark wood-based structural prices were up approximately 1.5% compared to 4Q ’10 Unit Volume Up 5.0% relative to the same period last year Gross Margin Total 12.3% vs. 12.1% in 4Q ’10 Net Loss ($10.3) million vs. ($20.2) million in 4Q ’10 EPS ($0.17) per diluted share Cash Flow Generated $33.9 million of operating cash flow vs. $18.0 million for the year ago quarter Excess Availability $118.3 million excess availability on revolving credit facilities Quarterly Highlights

4 Doug Goforth Chief Financial Officer and Treasurer Introduction and Quarterly Review

5 Quarterly Revenue Revenues ($ in millions) 235.0 316.6 297.1 154.8 161.3 193.6 187.4 165.7 221.4 240.7 4Q '10 1Q '11 2Q '11 3Q '11 4Q '11 $367.9 $390.6 $500.8 $472.9 $391.1 Variance Analysis $14.5 $4.3 $4.4 Specialty Unit Volume 6.6% YOY $23.2 or 6.3% Structural Unit Volume 2.8% Price/Other $23.2 41% 59% 4Q ‘10 4Q ‘11 59% 41% Vs. Year Ago Revenue up 6.3% Specialty sales up 8.7%, unit volume up 6.6% Structural sales up 7.0%, unit volume up 2.8% Specialty product sales = 59% of total sales % by Product Specialty Structural Other Structural Specialty

6 2011 Full Year Results Revenues ($ in millions) $1,804.4 $1,755.4 FY '10 FY '11 Operating Expenses ($ in millions) $218.4 $234.5 FY '10 FY '11 Gross Margin % 11.7% 12.0% FY '10 FY '11 EBITDA ($ in million) $1.8 ($11.1) FY '10 FY '11 ($11.5) $12.6 $1.1 Total ($1.4) $1.4 $- Gain from insurance settlement $0.3 ($1.4) ($1.1) Facility consolidation and severance ($10.6) $10.6 $- Gain on real estate ($3.0) $- ($3.0) Tender offer expenses $5.2 $- $5.2 OSB lawsuit settlement ($2.0) $2.0 $- Gain on lease modification FY‘11 FY‘10 Chg Significant Special Items ($11.5) $12.6 $1.1 Total ($1.4) $1.4 $- Gain from insurance settlement $0.3 ($1.4) ($1.1) Facility consolidation and severance ($10.6) $10.6 $- Gain on real estate ($3.0) $- ($3.0) Tender offer expenses $5.2 $- $5.2 OSB lawsuit settlement ($2.0) $2.0 $- Gain on lease modification FY‘11 FY‘10 Chg Significant Special Items

7 Cash Flows BXC generated $33.9 million in operating cash flow for the quarter Unaudited (in million’s) Q410 Q111 Q211 Q311 Q411 FY 2011 FY 2010 Cash flows from operating activities: Net loss (20.2) $ (12.3) $ (9.8) $ (6.2) $ (10.3) $ (38.6) $ (53.2) $ Adjustments to reconcile net loss to net cash provided by (used in) operations: Depreciation and amortization 3.1 2.9 2.6 2.6 2.4 10.6 13.4 Amortization of debt issuance costs 0.9 0.4 0.6 0.9 0.9 2.9 2.0 Payments from terminating the Georgia-Pacific supply agreement - - - - - - 4.7 (Gain) loss from sale of facilities - (7.2) - 0.3 (3.7) (10.6) - Gain from property insurance settlement - - - (1.2) - (1.2) - Changes associated with the ineffective interest rate swap (1.4) (1.8) - - 0.1 (1.7) (4.6) Write-off debt of issuance costs - - - - - - 0.2 Vacant property changes 0.1 - - - (0.3) (0.3) 0.1 Gain on modification of lease agreement - - - (2.0) - (2.0) - Deferred income tax (benefit) provision - (0.2) - (0.1) 0.3 - (0.6) Share-based compensation 1.1 0.8 0.3 0.4 0.4 2.0 3.9 Decrease in restricted cash related to the ineffective interest rate swap, insurance, and other 0.5 - 0.4 - 0.5 1.0 6.6 Changes in assets and liabilities: Receivables 47.4 (50.7) (35.8) 21.0 45.9 (19.7) - Inventories 7.3 (32.1) 7.7 8.9 18.2 2.7 (15.1) Accounts payable (17.9) 32.1 0.4 (5.9) (20.7) 6.0 (1.8) Changes in other working capital (5.8) 3.8 (5.0) 2.7 (1.7) (0.4) 15.5 Other 2.9 1.5 0.3 (3.9) 1.8 (0.3) (1.0) Net cash provided by (used in) operating activities 18.0 (62.8) (38.3) 17.5 33.9 (49.6) (29.9) Cash flows from investing activities: Property and equipment investments (1.4) (3.7) (1.8) (0.5) (1.2) (7.2) (4.1) Proceeds from disposition of assets - 8.8 0.2 - 9.4 18.3 0.7 Net cash (used in) provided by investing activities (1.4) 5.1 (1.6) (0.5) 8.2 11.1 (3.4) Cash flows from financing activities: Repurchase of common stock - - - - - - (0.7) Repayments on revolving credit facilities (136.3) (73.5) (98.2) (177.1) (129.8) (478.6) 41.2 Borrowings from revolving credit facilities 131.5 116.8 146.6 106.6 105.8 475.9 - Payment of principal on mortgage - - - (38.7) (3.7) (42.4) - Payments on capital lease obligations (0.1) (0.1) (0.1) (1.0) (0.2) (1.4) (0.6) (Decrease) increase in bank overdrafts (7.5) 12.6 (6.9) 1.5 (8.0) (0.8) (4.1) (Increase) decrease in restricted cash related to the mortgage (2.8) (6.2) (1.6) 35.5 (7.1) 20.6 (11.2) Debt financing costs - - - (2.6) (0.1) (2.7) (6.5) Proceeds from stock offering less expenses paid - - - 58.6 (0.1) 58.5 - Net cash (used in) provided by financing activities (15.2) 49.6 39.8 (17.2) (43.1) 29.1 18.1 Increase (decrease) in cash 1.4 (8.1) (0.1) (0.2) (1.0) (9.4) (15.2) Cash balance, beginning of period 12.9 14.3 6.2 6.1 5.9 14.3 29.5 Cash balance, end of period 14.3 $ 6.2 $ 6.1 $ 5.9 $ 4.9 $ 4.9 $ 14.3 $

Debt U.S. Revolver $115.7 million excess availability as of December 31, 2011 LIBOR plus 3.75% as of December 31, 2011 $400 million facility with additional $100 million uncommitted accordion facility – Matures January 7, 2014 – No financial performance covenants provided Excess Availability is more than the greater of (A) $30 million or (B) the amount equal to 15% of the lesser of the borrowing base or $60 million. The borrowing base as of December 31, 2011 was $207.2 million. Canadian Revolver $2.6 million excess availability as of December 31, 2011 LIBOR or Bankers’ Acceptance plus 2.50%; Canadian Prime Loan or U.S. Base Rate plus 1.00% $10 million facility with additional $5 million uncommitted accordion facility – Matures August 2014 Mortgage (10 Year Term @ 6.35%) Matures July 2016 Real estate under the mortgage appraised at approximately $360 million in June 2006 LCR Trap is triggered if operating TTM EBITDAR coverage ratio is less than 2.5x for two consecutive quarters Subsequent to the quarter ended July 2, 2011, we negotiated an amendment to our mortgage agreement which in part allowed for the release of the $38.3 million LCR trap. The cash was used for an immediate prepayment on the mortgage loan without incurring a prepayment premium During fiscal 2011 we sold certain properties which reduced our mortgage loan by $6.5 million. These payments were applied to the mortgage loan in fiscal 2012 Principal 2012 $9.0 million 2014 $3.0 million 2016 $225.3 million 2013 $2.8 million 2015 $3.1 million 8

9 Cash Cycle TTM Cash Cycle days at 56, down 2 days sequentially and up 4 days compared to the prior year quarter Cash Cycle Days (in days) 45 48 50 49 48 (25) (28) (28) (27) (26) 32 35 36 36 34 -40 -20 0 20 40 60 80 100 4Q '10 1Q '11 2Q '11 3Q '11 4Q '11 58 58 52 55 56 Cash cycle days equal accounts receivable days + inventory days – accounts payable days using a trailing twelve month average beginning and ending balance. The days calculations use calendar days. A/R Inv A/P & OD's

10 Closing Remarks 4 th Quarter focus – Specialty growth – Customer care – Gross margin Long term strategic objectives: – Profitably grow specialty revenues to 60+% of total sales – Profitably manage structural – Profitably outgrow the market over the long term

11 Appendix 14 Channel Mix Analysis 20 Reconciliation of GAAP Debt to Non-GAAP Net Debt 16 Gross Margin by Quarter 21 Reconciliation of GAAP Net cash used in operating activities to Non-GAAP EBITDA 13 Revenues by Quarter 19 Structural Product Price Trends 17 Gross Margin % Analysis 18 Operating Expense by Quarter 15 Unit Volume by Quarter 12 Profit and Loss Statement by Quarter PAGE TOPIC

12 Profit & Loss Statement by Quarter Profit & Loss Statement $ in millions (1) , except per share amounts 2009 2010 2011 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Sales $ 431.1 $ 540.8 $ 464.7 $ 367.9 $ 390.6 $ 500.8 $ 472.9 $ 391.1 $ 1,646.1 $ 1,804.4 $ 1,755.4 Cost of Goods Sold 378.8 476.7 414.8 323.6 344.3 443.2 414.6 343.2 1,452.9 1,593.7 1,545.3 Gross Profit 52.3 64.1 49.9 44.3 46.3 57.6 58.3 47.9 193.2 210.7 210.1 Gross Margin % 12.1% 11.9% 10.7% 12.1% 11.8% 11.5% 12.3% 12.3% 11.7% 11.7% 12.0% Operating Expenses SG&A 56.5 57.1 54.1 53.4 48.5 56.8 54.5 48.1 192.5 221.2 207.8 D&A 3.8 3.4 3.1 3.1 2.9 2.6 2.6 2.4 16.9 13.4 10.6 Total Operating Expenses 60.3 60.5 57.2 56.5 51.4 59.4 57.1 50.5 209.4 234.6 218.4 Operating Income (8.0) 3.6 (7.3) (12.2) (5.1) (1.8) 1.2 (2.6) (16.2) (23.9) (8.3) Interest Expense 7.3 8.2 9.1 9.1 9.1 7.7 7.0 6.8 32.5 33.7 30.6 (0.8) (1.3) (1.2) (1.3) (1.8) - - - 6.2 (4.6) (1.8) Write-off of debt issue costs - - 0.2 - - - - - 1.4 0.2 - Other Expense/(Income) 0.2 - 0.2 0.1 - 0.1 0.3 0.1 0.6 0.6 0.5 Income before Tax (14.7) (3.3) (15.6) (20.1) (12.4) (9.6) (6.1) (9.5) (56.9) (53.8) (37.6) Tax Expense/(Benefit) - 0.1 (0.7) 0.1 (0.1) 0.2 0.1 0.8 4.6 (0.6) 1.0 Net Income/(Loss) $ (14.7) $ (3.4) $ (14.9) $ (20.2) $ (12.3) $ (9.8) $ (6.2) $ (10.3) $ (61.5) $ (53.2) $ (38.6) Diluted EPS $ (0.48) $ (0.11) $ (0.48) $ (0.66) $ (0.40) $ (0.31) $ (0.12) $ (0.17) $ (1.98) $ (1.73) $ (0.89) (1) Immaterial rounding adjustments and differences may exist between appendix slides, presentation slides, press releases and previously issued presentations. Changes associated with the ineffective interest rate swap 2011 2010

Revenues by Quarter 13

14 Revenue Channel Mix Analysis 4Q10 1Q11 2Q11 3Q11 4Q11 4Q11 Variance from Year Ago Qtr Structural Products Warehouse 65.8% 64.5% 67.5% 68.5% 70.6% 4.8% Direct 22.8% 22.2% 19.9% 19.7% 19.1% (3.7%) Reload 11.4% 13.3% 12.6% 11.8% 10.3% (1.1%) Total 100.0% 100.0% 100.0% 100.0% 100.0% 0.0% Specialty Products Warehouse 67.7% 65.8% 61.4% 64.9% 69.4% 1.7% Direct 19.1% 22.3% 22.9% 21.3% 20.1% 1.0% Reload 13.2% 11.9% 15.7% 13.8% 10.5% (2.7%) Total 100.0% 100.0% 100.0% 100.0% 100.0% 0.0% Total Products Warehouse 66.9% 65.3% 63.7% 66.3% 69.9% 3.0% Direct 20.6% 22.3% 21.8% 20.7% 19.7% (0.9%) Reload 12.5% 12.4% 14.5% 13.0% 10.4% (2.1%) Total 100.0% 100.0% 100.0% 100.0% 100.0% 0.0%

15 Unit Volume by Quarter 2009 2010 2011 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Specialty 2.2% 13.5% 1.3% 5.9% (0.2%) 10.7% 11.4% 6.6% (32.8%) 5.7% 7.4% Structural 0.3% 9.7% (4.3%) (16.5%) (25.2%) (18.8%) (14.0%) 2.8% (40.3%) (2.5%) (15.1%) Total 1.4% 11.9% (1.2%) (4.3%) (11.8%) (3.5%) 0.1% 5.0% (36.6%) 2.2% (2.8%) 2011 Unit Volume Change 2010

16 Gross Margin by Quarter Gross Margin $ in millions 2009 2010 2011 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Specialty (1) $ 33.5 $ 44.3 $ 37.9 $ 32.5 $ 32.4 $ 45.6 $ 44.8 $ 35.8 $ 132.9 $ 148.2 $ 158.6 Structural (1) 21.7 24.2 15.9 14.7 17.3 16.6 18.7 15.4 73.1 76.5 68.0 Other (2) (2.9) (4.4) (3.9) (2.9) (3.4) (4.6) (5.2) (3.2) (12.8) (14.0) (16.4) Total $ 52.3 $ 64.1 $ 49.9 $ 44.3 $ 46.3 $ 57.6 $ 58.3 $ 48.0 $ 193.2 $ 210.7 $ 210.2 Gross Margin %'s Specialty (1) 14.4% 15.5% 14.4% 14.7% 13.8% 14.4% 15.1% 14.9% 14.0% 14.7% 14.6% Structural (1) 10.7% 9.1% 7.4% 9.5% 10.7% 8.6% 10.0% 9.3% 9.9% 9.1% 9.6% Other (2) n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a Total 12.1% 11.9% 10.7% 12.1% 11.8% 11.5% 12.3% 12.3% 11.7% 11.7% 12.0% (1) Includes product rebates. (2) Includes competitive discounts, cash discounts, Canadian conversion, and accruals. 2010 2011

17 Gross Margin % Analysis 4Q10 1Q11 2Q11 3Q11 4Q11 4Q11 Variance from Year Ago Qtr Structural Products (1) Warehouse 12.0% 13.7% 11.0% 12.6% 11.5% (0.5%) Direct 4.1% 3.3% 3.6% 3.7% 3.6% (0.5%) Reload 5.5% 8.3% 3.5% 5.1% 4.8% (0.7%) Total 9.5% 10.7% 8.6% 10.0% 9.3% (0.2%) Specialty Products (1) Warehouse 16.5% 16.0% 17.1% 17.8% 16.7% 0.2% Direct 9.8% 8.2% 8.6% 8.8% 10.3% 0.5% Reload 12.5% 11.9% 12.2% 12.2% 11.2% (1.3%) Total 14.7% 13.8% 14.4% 15.1% 14.9% 0.2% Total (1) (2) 12.1% 11.8% 11.5% 12.3% 12.3% 0.2% (1) Includes product rebates. (2) Includes competitive discounts, cash discounts, Canadian conversion, and accruals.

18 Operating Expense by Quarter Operating Expense (1) $ in millions 2009 2010 2011 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Payroll & related $38.2 $38.8 $38.2 $36.6 $37.8 $37.9 $38.1 $35.5 $147.9 $151.8 $149.3 General maintenance 5.1 5.3 5.2 5.0 5.1 5.6 5.3 5.4 19.3 20.6 21.4 Depreciation and amortization 3.7 3.4 3.1 3.1 2.9 2.6 2.6 2.4 17.0 13.3 10.5 Fuel 3.1 3.4 3.2 3.1 3.4 4.5 4.2 3.7 9.4 12.8 15.8 Gain on sale of assets (0.2) 0.2 0.0 0.1 (7.3) (0.3) (1.2) (4.4) (11.1) 0.1 (13.2) Other (2) 10.4 9.4 7.5 8.6 9.5 9.1 8.1 7.9 26.9 35.9 34.6 Total $60.3 $60.5 $57.2 $56.5 $51.4 $59.4 $57.1 $50.5 $209.4 $234.5 $218.4 (1) Immaterial rounding adjustments and differences may exist between appendix slides, presentation slides, press releases and previously issued presentations. (2) 2Q '09 includes a $17.4 million gain on the early cancellation of the Master Supply Agreement with Georgia-Pacific Corporation. 2010 2011

19 Structural Products Price Trend Source: Data from Random Lengths Publications, Inc., updated as of December 30, 2011

Reconciliation of GAAP to Non-GAAP BlueLinx Holdings Inc. Unaudited Reconciliation of GAAP Debt to Non-GAAP Net Debt in millions January 1, 2011 December 31, 2011 Revolving Credit Facilities $ 97.2 $ 94.5 Mortgage 285.7 243.2 TOTAL DEBT $ 382.9 $ 337.7 Less:Cash and Cash Equivalents (14.3) (4.9) Mortgage LCR Trap (30.6) (10.0) Net Debt $ 338.0 $ 322.8 Excess Availability $ 103.4 $ 118.3 Minimum Required $ 40.0 $ 31.1 20

Reconciliation of GAAP to Non-GAAP

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