BlueLinx Holdings Inc 10-Q for FY2020 Q1

BlueLinx Holdings Inc. (BXC)

10-Q 2020-05-06 For: 2020-03-28

Added on April 09, 2026

About this 10-Q

BlueLinx Holdings Inc filed this 10-Q on May 6, 2020, covering the quarter ended March 28, 2020 (FY2020 Q1).

Headline figures

Quarter ended March 28, 2020, as reported in this filing, compared with the same period a year earlier where the filing states it.

Revenue: $662.07M; up 3.7% from $638.7M a year earlier
Net loss: $787K; compared with a net loss of $6.72M a year earlier
Diluted EPS: -$0.08; compared with -$0.72 a year earlier

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Delaware		77-0627356
(State of Incorporation)		(I.R.S. Employer Identification No.)

1950 Spectrum Circle, Suite 300
Marietta	GA	30067
(Address of principal executive offices)		(Zip Code)



Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common Stock, par value $0.01 per share	BXC	New York Stock Exchange



Large Accelerated Filer	☐	Accelerated Filer	☑	Non-accelerated Filer	☐	Smaller Reporting Company	☑
Emerging Growth Company	☐



	PAGE
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements — BlueLinx Holdings Inc. (Unaudited)	1
Condensed Consolidated Statements of Operations and Comprehensive Loss	1
Condensed Consolidated Balance Sheets	2
Condensed Consolidated Statements of Cash Flows	3
Condensed Consolidated Statements of Stockholders’ Deficit	4
Notes to Condensed Consolidated Financial Statements	5
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations	16
Item 3. Quantitative and Qualitative Disclosures About Market Risk	24
Item 4. Controls and Procedures	24

PART II. OTHER INFORMATION
Item 1. Legal Proceedings	25
Item 1A. Risk Factors	25
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds	27
Item 3. Defaults Upon Senior Securities	27
Item 4. Mine Safety Disclosures	27
Item 5. Other Information	27
Item 6. Exhibits	28

Signature	29



	Three Months Ended
	March 28, 2020			March 30, 2019
Net sales	$	662,070		$	638,701
Cost of sales	568,861			552,656
Gross profit	93,209			86,045
Operating expenses:
Selling, general, and administrative	77,769			74,410
Gains from sales of property	(525		)	—
Depreciation and amortization	7,635			7,328
Total operating expenses	84,879			81,738
Operating income	8,330			4,307
Non-operating expenses (income):
Interest expense, net	14,380			13,401
Other (income) expense, net	(237		)	150
Loss before benefit from income taxes	(5,813		)	(9,244		)
Benefit from income taxes	(5,026		)	(2,525		)
Net loss	$	(787	)	$	(6,719	)

Basic loss per share	$	(0.08	)	$	(0.72	)
Diluted loss per share	$	(0.08	)	$	(0.72	)

Comprehensive loss:
Net loss	$	(787	)	$	(6,719	)
Other comprehensive income (loss):
Foreign currency translation, net of tax	3			7
Amortization of unrecognized pension loss, net of tax	196			224
Pension curtailment, net of tax	—			853
Other	(19		)	15
Total other comprehensive income	180			1,099
Comprehensive loss	$	(607	)	$	(5,620	)



☑	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934



☐	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934



	BlueLinx Holdings Inc.
	(Exact name of registrant as specified in its charter)



	March 28, 2020			December 28, 2019
ASSETS
Current assets:
Cash	$	12,558		$	11,643
Receivables, less allowances of $3,875 and $3,236, respectively	247,940			192,872
Inventories, net	378,634			345,806
Other current assets	26,437			27,718
Total current assets	665,569			578,039
Property and equipment, at cost	308,288			308,067
Accumulated depreciation	(117,036		)	(112,299		)
Property and equipment, net	191,252			195,768
Operating lease right-of-use assets	52,502			54,408
Goodwill	47,772			47,772
Intangible assets, net	24,414			26,384
Deferred tax assets	59,308			53,993
Other non-current assets	20,404			15,061
Total assets	$	1,061,221		$	971,425
LIABILITIES AND STOCKHOLDERS’ DEFICIT
Current liabilities:
Accounts payable	$	162,398		$	132,348
Accrued compensation	8,216			7,639
Current maturities of long-term debt, net of discount and debt issuance costs of $74 and $74, respectively	2,176			2,176
Finance leases - short-term	5,924			6,385
Real estate deferred gains - short-term	3,935			3,935
Operating lease liabilities - short-term	7,016			7,317
Other current liabilities	9,903			11,323
Total current liabilities	199,568			171,123
Non-current liabilities:
Long-term debt, net of discount and debt issuance costs of $11,861 and $12,481, respectively	444,937			458,439
Real estate financing obligation	123,765			44,914
Finance leases - long-term	145,427			146,611
Real estate deferred gains - long-term	80,935			81,886
Operating lease liabilities - long-term	45,571			47,091
Pension benefit obligation	22,596			23,420
Other non-current liabilities	24,106			24,024
Total liabilities	1,086,905			997,508
Commitments and Contingencies
STOCKHOLDERS’ DEFICIT:
Common Stock, $0.01 par value, 20,000,000 shares authorized, 9,366,641 and 9,365,768 outstanding on March 28, 2020 and December 28, 2019, respectively	94			94
Additional paid-in capital	261,980			260,974
Accumulated other comprehensive loss	(34,383		)	(34,563		)
Accumulated stockholders’ deficit	(253,375		)	(252,588		)
Total stockholders’ deficit	(25,684		)	(26,083		)
Total liabilities and stockholders’ deficit	$	1,061,221		$	971,425



	Common Stock				Additional Paid-In Capital			Accumulated Other Comprehensive Loss			Accumulated Deficit			Stockholders’ Deficit Total
	Shares		Amount		Additional Paid-In Capital			Accumulated Other Comprehensive Loss			Accumulated Deficit			Stockholders’ Deficit Total
Balance, December 28, 2019	9,366		$	94	$	260,974		$	(34,563	)	$	(252,588	)	$	(26,083	)
Net loss	—		—		—			—			(787		)	(787		)
Foreign currency translation, net of tax	—		—		—			3			—			3
Unrealized gain from pension plan, net of tax	—		—		—			196			—			196
Vesting of restricted stock units	2		—		12			—			—			12
Compensation related to share-based grants	—		—		1,004			—			—			1,004
Repurchase of shares to satisfy employee tax withholdings	(1	)	—		(7		)	—			—			(7		)
Other	—		—		(3		)	(19		)	—			(22		)
Balance, March 28, 2020	9,367		$	94	$	261,980		$	(34,383	)	$	(253,375	)	$	(25,684	)



(In thousands)	Gross carrying amounts		Accumulated Amortization			^[1]	Net carrying amounts
Customer relationships	$	25,500	$	(7,655	)		$	17,845
Noncompete agreements	8,254		(4,048		)		4,206
Trade names	6,826		(4,463		)		2,363
Total	$	40,580	$	(16,166	)		$	24,414



(In thousands)	Estimated Amortization
2020	$	5,490
2021	4,973
2022	3,111
2023	1,807
2024	1,505



	Three Months Ended March 28, 2020		Three Months Ended March 30, 2019
	Three Months Ended March 28, 2020		Three Months Ended March 30, 2019
	(In thousands)
Operating lease cost:	$	3,120	$	3,144
Finance lease cost:
Amortization of right-of-use assets	$	3,042	$	2,896
Interest on lease liabilities	4,425		3,248
Total finance lease costs	$	7,467	$	6,144



	Operating leases			Finance leases
	(In thousands)
2020	$	11,479		$	15,927
2021	9,234			19,178
2022	7,922			18,350
2023	7,073			17,887
2024	6,753			17,324
Thereafter	48,887			284,409
Total lease payments	$	91,348		$	373,075
Less: imputed interest	(38,761		)	(221,724		)
Total	$	52,587		$	151,351



	(In thousands)
2020	$	12,735
2021	10,092
2022	8,247
2023	7,899
2024	7,287
Thereafter	56,081
Total	$	102,341



	March 28, 2020			December 28, 2019
	(In thousands)
Finance leases
Property and equipment	$	155,927		$	156,770
Accumulated depreciation	(26,032		)	(23,364		)
Property and equipment, net	$	129,895		$	133,406
Weighted Average Remaining Lease Term (in years)
Operating leases	11.67			11.71
Finance leases	17.86			17.90
Weighted Average Discount Rate
Operating leases	9.37		%	9.34		%
Finance leases	10.48		%	10.33		%


•	future reversals of existing taxable temporary differences;


•	future taxable income exclusive of reversing temporary differences and carryforwards;


•	taxable income in prior carryback years if carryback is permitted under the tax law; and



	(In thousands)
2020	$	7,305
2021	9,922
2022	10,130
2023	10,343
2024	10,559
Thereafter	124,454



	Foreign currency, net of tax		Defined benefit pension plan, net of tax			Other, net of tax			Total Accumulated Other Comprehensive Loss
	(In thousands)
December 28, 2019, beginning balance	$	666	$	(35,441	)	$	212		$	(34,563	)
Other comprehensive income, net of tax ^[1]	3		196			(19		)	180
March 28, 2020, ending balance, net of tax	$	669	$	(35,245	)	$	193		$	(34,383	)



	Three Months Ended
(in thousands, except per share data)	March 28, 2020			March 30, 2019
Net loss	$	(787	)	$	(6,719	)

Weighted-average shares outstanding - basic	9,366			9,337
Dilutive effect of share-based awards	—			—
Weighted-average shares outstanding - diluted	9,366			9,337

Basic loss per share	$	(0.08	)	$	(0.72	)
Diluted loss per share	$	(0.08	)	$	(0.72	)



(Dollars in thousands)	First Quarter of Fiscal 2020			% of Net Sales	First Quarter of Fiscal 2019			% of Net Sales
Net sales	$	662,070		100.0%	$	638,701		100.0%

Gross profit	93,209			14.1%	86,045			13.5%
Selling, general, and administrative	77,769			11.7%	74,410			11.7%
Gains from sales of property	(525		)	(0.1)%	—			—%
Depreciation and amortization	7,635			1.2%	7,328			1.1%
Operating income	8,330			1.3%	4,307			0.7%
Interest expense, net	14,380			2.2%	13,401			2.1%
Other (income) expense, net	(237		)	(0.0)%	150			0.0%
Loss before benefit from income taxes	(5,813		)	(0.9)%	(9,244		)	(1.4)%
Benefit from income taxes	(5,026		)	(0.8)%	(2,525		)	(0.4)%
Net loss	$	(787	)	(0.1)%	$	(6,719	)	(1.1)%



Selected financial information (in thousands)
	March 28, 2020		December 28, 2019		March 30, 2019
Current assets:
Cash	$	12,558	$	11,643	$	12,682
Receivables, less allowance for doubtful accounts	247,940		192,872		246,342
Inventories, net	378,634		345,806		387,330
	$	639,132	$	550,321	$	646,354

Current liabilities:
Accounts payable ^[2]	$	162,398	$	132,348	$	175,192
	$	162,398	$	132,348	$	175,192

Operating working capital	$	476,734	$	417,973	$	471,162



		Total Number
		Shares	Average Price
Period		Purchased^[1]	Paid Per Share
December 29, 2019 - February 1, 2020		—	$	—
February 2 - February 29, 2020		498	$	13.45
March 1 - March 28, 2020		—	$	—
Total		498

[1]	The Company did not repurchase any of its equity securities during the period covered by this report pursuant to any publicly announced plan or program, and no such plan or program is presently in effect. All purchases reflected in the table above pertain to purchases of common stock by the Company in connection with tax withholding obligations of the Company’s employees upon the vesting of such employees’ restricted stock awards.



Exhibit Number		Description
10.1	*	First Amendment to Amended and Restated Credit Agreement, dated January 31, 2020, by and among BlueLinx Holdings Inc., certain subsidiaries of BlueLinx Holdings Inc. as borrowers or guarantors thereunder, Wells Fargo Bank, National Association, as administrative agent, and certain other financial institutions party thereto.
10.2	*	Fourth Amendment to Credit and Guaranty Agreement, dated December 31, 2019, by and among BlueLinx Holdings Inc., as borrower, certain subsidiaries of BlueLinx Holdings Inc., as guarantors, the lenders party thereto, and HPS Investment Partners, LLC, in its capacity as administrative agent.
10.3	*	Fifth Amendment to Credit and Guaranty Agreement, dated February 28, 2020, by and among BlueLinx Holdings Inc., as borrower, certain subsidiaries of BlueLinx Holdings Inc., as guarantors, the lenders party thereto, and HPS Investment Partners, LLC, in its capacity as administrative agent.
10.4	*	Employment Agreement between BlueLinx Corporation and Kelly C. Janzen, dated March 2, 2020.
10.5	*	Separation Agreement between BlueLinx Corporation and Susan C. O’Farrell, dated March 9, 2020.
10.6	*	Form of Purchase and Sale Agreement with Big Acquisitions LLC, dated as of October 16, 2019.
10.7	*	Form of First Amendment to Purchase and Sale Agreement with Big Acquisitions LLC, dated as of November 20, 2019.
10.8	*	Form of Second Amendment to Purchase and Sale Agreement with Big Acquisitions LLC, dated as of December 13, 2019.
10.9	*	Letter Agreement, dated March 22, 2020, between BlueLinx Holdings Inc. and Mitchell B. Lewis.
31.1	*	Certification of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
31.2	*	Certification of Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
32.1	**	Certification of Chief Executive Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
32.2	**	Certification of Chief Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
101.Def		Definition Linkbase Document.
101.Pre		Presentation Linkbase Document.
101.Lab		Labels Linkbase Document.
101.Cal		Calculation Linkbase Document.
101.Sch		Schema Document.
101.Ins		Instance Document - the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document.


	*	Filed herewith.
	**	Exhibit is being furnished and shall not be deemed to be “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, or otherwise subject to the liabilities of that Section, nor shall it be deemed incorporated by reference into any filing under the Securities Act of 1933, as amended.




		BlueLinx Holdings Inc.
		(Registrant)

Date: May 6, 2020	By:	/s/ Kelly C. Janzen
		Kelly C. Janzen
		Senior Vice President and Chief Financial Officer