BlueLinx Holdings Inc. (NYSE:BXC), a leading distributor of building and industrial products in the United States, today reported financial results for the fiscal third quarter ended October 1, 2016.
“Our performance this quarter confirms that we continue to make good progress on our key strategic initiatives of monetizing our real estate and deleveraging the balance sheet. We have successfully extended our asset-based credit facility, prudently managed our working capital, and sold several of our unoccupied facilities which have enabled us to significantly reduce our debt from 2015 third quarter levels. In addition, we continue to focus on our customers through our local market emphasis as we improve our operational efficiencies and bottom line,” said Mitch Lewis, President and Chief Executive Officer.
Susan O’Farrell, Senior Vice President and Chief Financial Officer added, “We are pleased to announce we have sold four unoccupied properties during the quarter, enabling us to pay down our mortgage by an additional $16.6 million during the quarter. The Company is also actively marketing additional unoccupied facilities for sale and other operating facilities for sale leaseback transactions which we anticipate announcing in the next few months. With the progress we’ve made with our facility monetization and inventory efficiency efforts, we have successfully decreased our debt principal by $87.2 million and our operating working capital by $71.5 million when compared to the same period a year ago.”
Third Quarter Results Compared to Prior Year Period
BlueLinx generated net sales of $476.0 million for the third quarter of fiscal 2016, compared to $517.8 million from the prior year quarter. When excluding our strategic operational efficiency initiatives, consisting of facility closures and inventory rationalization efforts where we discontinued certain underperforming products, adjusted net sales were $469.7 million for the fiscal third quarter, an increase of $16.5 million from this time a year ago.
The Company recorded gross profit of $60.1 million during the quarter with a gross margin of 12.6%, an increase of 90 basis points from the prior year quarter.
The Company recorded net income of $15.0 million for the quarter, with a diluted earnings per share of $1.68. Adjusted EBITDA, which is a non-GAAP measure, was $11.1 million. Excluding our strategic operational efficiency initiatives, Adjusted EBITDA was up $1.5 million or 16.1% from the prior year quarter.
First Nine Months of Fiscal 2016 Compared to Prior Year Period
For the nine months ended fiscal 2016, the Company generated $1.46 billion in net sales compared to $1.49 billion from the prior year period. When excluding our strategic operational efficiency initiatives, adjusted net sales were $1.35 billion, an increase of $57.74 million or 4.5% from the same period in 2015.
The Company recorded gross profit of $175.0 million with a gross margin of 12.0%, an increase of 50 basis points from the prior year period. On an adjusted basis, excluding the facility and inventory rationalization activity, gross margin was 12.6%, an increase of 100 basis points from the nine months ended October 3, 2015.
The Company recorded net income of $5.7 million for the nine months ended fiscal 2016, up $11.2 million from this period a year ago. Adjusted EBITDA, which is a non-GAAP measure, for the nine month period was $30.7 million, an increase of 49% from the first nine months in 2015. Excluding our strategic operational efficiency initiatives, Adjusted EBITDA was up $13.0 million or 78.2% from the same period in 2015.
Working Capital and Liquidity
The Company’s working capital initiatives drove increased productivity, resulting in a reduction of its cash cycle by seven days, when compared to the same period in 2015. As of October 1, 2016, the Company had $68.9 million of excess availability under its asset-based revolving credit facilities, based on qualifying inventory and receivables. Additionally, on November 3, 2016 the Company obtained an extension of the maturity of the asset based credit facility to July 15, 2018.
BlueLinx will host a conference call today at 10:00 a.m. Eastern Time, accompanied by a supporting slide presentation. Investors can listen to the conference call and view the accompanying slide presentation by going to the BlueLinx website,www.BlueLinxCo.com, and selecting the conference link on the Investor Relations page. Investors will be able to access an archived recording of the conference call for one week following the live call by dialing 404-537-3406, Conference ID# 3043825. The recording will be available two hours after the conference call has concluded. Investors also can access a recording of this call on the BlueLinx website.
About BlueLinx Holdings Inc.
BlueLinx Holdings Inc., operating through its wholly owned subsidiary BlueLinx Corporation, is a leading distributor of building and industrial products in the United States. The Company is headquartered in Atlanta, Georgia and operates its distribution business through its network of distribution centers. BlueLinx is traded on the New York Stock Exchange under the symbol BXC. Additional information about BlueLinx can be found on its website at www.BlueLinxCo.com.