BlueLinx Holdings Inc 10-Q for FY2020 Q2

BlueLinx Holdings Inc. (BXC)

10-Q 2020-08-03 For: 2020-06-27

Added on April 09, 2026

About this 10-Q

BlueLinx Holdings Inc filed this 10-Q on August 3, 2020, covering the quarter ended June 27, 2020 (FY2020 Q2).

Headline figures

Quarter ended June 27, 2020, as reported in this filing, compared with the same period a year earlier where the filing states it.

Revenue: $698.78M; down 1.1% from $706.45M a year earlier
Net income: $6.7M; up 6.3% from net income of $6.3M a year earlier
Diluted EPS: $0.71; up 6.0% from $0.67 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	17
Item 3. Quantitative and Qualitative Disclosures About Market Risk	26
Item 4. Controls and Procedures	26

PART II. OTHER INFORMATION
Item 1. Legal Proceedings	27
Item 1A. Risk Factors	27
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds	29
Item 3. Defaults Upon Senior Securities	29
Item 4. Mine Safety Disclosures	29
Item 5. Other Information	29
Item 6. Exhibits	30

Signature	31



	Three Months Ended					Six Months Ended
	June 27, 2020		June 29, 2019			June 27, 2020			June 29, 2019
Net sales	$	698,776	$	706,448		$	1,360,846		$	1,345,149
Cost of sales	597,956		612,281			1,166,817			1,164,937
Gross profit	100,820		94,167			194,029			180,212
Operating expenses:
Selling, general, and administrative	69,710		70,150			143,314			139,235
Depreciation and amortization	7,063		7,503			14,698			14,831
Gains from sales of property	—		(9,760		)	(525		)	(9,760		)
Other operating expenses	1,962		3,951			6,127			9,276
Total operating expenses	78,735		71,844			163,614			153,582
Operating income	22,085		22,323			30,415			26,630
Non-operating expenses (income):
Interest expense, net	11,535		13,717			25,915			27,118
Other (income) expense, net	417		(45		)	180			105
Income (loss) before provision for (benefit from) income taxes	10,133		8,651			4,320			(593		)
Provision for (benefit from) income taxes	3,438		2,350			(1,588		)	(175		)
Net income (loss)	$	6,695	$	6,301		$	5,908		$	(418	)

Basic income (loss) per share	$	0.71	$	0.67		$	0.63		$	(0.04	)
Diluted income (loss) per share	$	0.71	$	0.67		$	0.63		$	(0.04	)

Comprehensive income (loss):
Net income (loss)	$	6,695	$	6,301		$	5,908		$	(418	)
Other comprehensive income (loss):
Foreign currency translation, net of tax	17		—			20			7
Amortization of unrecognized pension loss, net of tax	114		208			310			431
Pension curtailment, net of tax	—		(1,486		)	—			(632		)
Other	2		1			(17		)	16
Total other comprehensive income (loss)	133		(1,277		)	313			(178		)
Comprehensive income (loss)	$	6,828	$	5,024		$	6,221		$	(596	)



☑	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)



	June 27, 2020			December 28, 2019
ASSETS
Current assets:
Cash	$	11,530		$	11,643
Receivables, less allowances of $3,911 and $3,236, respectively	264,642			192,872
Inventories, net	313,979			345,806
Other current assets	26,509			27,718
Total current assets	616,660			578,039
Property and equipment, at cost	308,616			308,067
Accumulated depreciation	(122,123		)	(112,299		)
Property and equipment, net	186,493			195,768
Operating lease right-of-use assets	50,802			54,408
Goodwill	47,772			47,772
Intangible assets, net	22,591			26,384
Deferred tax assets	54,494			53,993
Other non-current assets	20,292			15,061
Total assets	$	999,104		$	971,425
LIABILITIES AND STOCKHOLDERS’ DEFICIT
Current liabilities:
Accounts payable	$	158,920		$	132,348
Accrued compensation	11,140			7,639
Current maturities of long-term debt, net of debt issuance costs of $74 and $74, respectively	2,176			2,176
Finance lease liabilities - short-term	5,958			6,486
Operating lease liabilities - short-term	6,633			7,317
Real estate deferred gains - short-term	4,040			3,935
Other current liabilities	11,011			11,222
Total current liabilities	199,878			171,123
Non-current liabilities:
Long-term debt, net of debt issuance costs of $10,915 and $12,481, respectively	377,880			458,439
Finance lease liabilities - long-term	266,622			191,525
Operating lease liabilities - long-term	44,169			47,091
Real estate deferred gains - long-term	79,984			81,886
Pension benefit obligation	22,109			23,420
Other non-current liabilities	26,710			24,024
Total liabilities	1,017,352			997,508
Commitments and Contingencies
STOCKHOLDERS’ DEFICIT:
Common Stock, $0.01 par value, 20,000,000 shares authorized, 9,461,412 and 9,365,768 outstanding on June 27, 2020 and December 28, 2019, respectively	95			94
Additional paid-in capital	262,587			260,974
Accumulated other comprehensive loss	(34,250		)	(34,563		)
Accumulated stockholders’ deficit	(246,680		)	(252,588		)
Total stockholders’ deficit	(18,248		)	(26,083		)
Total liabilities and stockholders’ deficit	$	999,104		$	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		—		—			—			—			—
Compensation related to share-based grants	—		—		1,004			—			—			1,004
Repurchase of shares to satisfy employee tax withholdings	(1	)	—		(7		)	—			—			(7		)
Other	—		—		9			(19		)	—			(10		)
Balance, March 28, 2020	9,367		94		261,980			(34,383		)	(253,375		)	(25,684		)
Net income	—		—		—			—			6,695			6,695
Foreign currency translation, net of tax	—		—		—			17			—			17
Unrealized gain from pension plan, net of tax	—		—		—			114			—			114
Vesting of restricted stock units	122		1		—			—			—			1
Compensation related to share-based grants	—		—		854			—			—			854
Repurchase of shares to satisfy employee tax withholdings	(28	)	—		(247		)	—			—			(247		)
Other	—		—		—			2			—			2
Balance, June 27, 2020	9,461		$	95	$	262,587		$	(34,250	)	$	(246,680	)	$	(18,248	)



	Gross carrying amounts		Accumulated Amortization			⁽¹⁾	Net carrying amounts
	(In thousands)
Customer relationships	$	25,500	$	(8,393	)		$	17,107
Noncompete agreements	8,254		(4,564		)		3,690
Trade names	6,826		(5,032		)		1,794
Total	$	40,580	$	(17,989	)		$	22,591



	Estimated Amortization
	(In thousands)
2020	$	3,645
2021	4,973
2022	3,111
2023	1,807
2024	1,505



	Operating leases			Finance leases
	(In thousands)
2020	$	11,109		$	15,385
2021	8,821			29,150
2022	7,876			28,449
2023	6,794			28,121
2024	6,441			27,793
Thereafter	47,514			408,524
Total lease payments	$	88,555		$	537,422
Less: imputed interest	(37,753		)	(264,842		)
Total	$	50,802		$	272,580



	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⁾	20		310			(17		)	313
June 27, 2020, ending balance, net of tax	$	686	$	(35,131	)	$	195		$	(34,250	)


•	future reversals of existing taxable temporary differences;



	Six Months Ended
	June 27, 2020			June 29, 2019
Cash flows from operating activities:
Net income (loss)	$	5,908		$	(418	)
Adjustments to reconcile net income (loss) to cash provided by (used in) operations:
Benefit from income taxes	(1,588		)	(175		)
Depreciation and amortization	14,698			14,831
Amortization of debt issuance costs	1,903			1,614
Gains from sales of property	(525		)	(9,760		)
Amortization of deferred gain	(1,967		)	(1,902		)
Share-based compensation	1,858			1,341
Changes in operating assets and liabilities:
Accounts receivable	(71,770		)	(53,608		)
Inventories	31,827			(16,800		)
Accounts payable	26,572			25,672
Prepaid and other current assets	(3,200		)	(8,078		)
Other assets and liabilities	9,185			(5,766		)
Net cash provided by (used in) operating activities	12,901			(53,049		)

Cash flows from investing activities:
Acquisition of business, net of cash acquired	—			6,009
Proceeds from sale of assets	102			10,758
Property and equipment investments	(1,752		)	(1,784		)
Net cash (used in) provided by investing activities	(1,650		)	14,983

Cash flows from financing activities:
Borrowings on revolving credit facilities	350,236			365,519
Repayments on revolving credit facilities	(354,509		)	(329,683		)
Repayments on term loan	(77,852		)	(31,899		)
Proceeds from real estate financing transactions	78,263			44,822
Debt financing costs	(2,665		)	(2,359		)
Repurchase of shares to satisfy employee tax withholdings	(254		)	(208		)
Principal payments on finance lease liabilities	(4,583		)	(4,403		)
Net cash (used in) provided by financing activities	(11,364		)	41,789

Net change in cash	(113		)	3,723
Cash at beginning of period	11,643			8,939
Cash at end of period	$	11,530		$	12,662



	June 27, 2020			December 28, 2019
	(In thousands)
Revolving Credit Facility ⁽¹⁾	$	322,223		$	326,496
Term Loan Facility ⁽²⁾	68,822			146,674
Finance lease obligations ⁽³⁾	272,580			198,011
	663,625			671,181
Unamortized debt issuance costs	(10,989		)	(12,555		)
	652,636			658,626
Less: current maturities of long-term debt	8,134			8,662
Long-term debt, net of current maturities	$	644,502		$	649,964



	June 27, 2020			December 28, 2019
	(In thousands)
Finance leases
Property and equipment	$	204,431		$	172,720
Accumulated depreciation	(51,255		)	(30,798		)
Property and equipment, net	$	153,176		$	141,922
Weighted Average Remaining Lease Term (in years)
Operating leases	11.66			11.71
Finance leases	16.58			17.12
Weighted Average Discount Rate
Operating leases	9.40		%	9.34		%
Finance leases	9.75		%	10.11		%


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


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



	Second Quarter of Fiscal 2020		% of Net Sales	Second Quarter of Fiscal 2019			% of Net Sales
	(In thousands)			(In thousands)
Net sales	$	698,776	100.0%	$	706,448		100.0%
Gross profit	100,820		14.4%	94,167			13.3%
Selling, general, and administrative	69,710		10.0%	70,150			9.9%
Depreciation and amortization	7,063		1.0%	7,503			1.1%
Gains from sales of property	—		0.0%	(9,760		)	(1.4)%
Other operating expenses	1,962		0.3%	3,951			0.6%
Operating income	22,085		3.2%	22,323			3.2%
Interest expense, net	11,535		1.7%	13,717			1.9%
Other expense (income), net	417		0.1%	(45		)	0.0%
Income before provision for income taxes	10,133		1.5%	8,651			1.2%
Provision for income taxes	3,438		0.5%	2,350			0.3%
Net income	$	6,695	1.0%	$	6,301		0.9%



	First Six Months of Fiscal 2020			% of Net Sales	First Six Months of 2019			% of Net Sales
	(In thousands)				(In thousands)
Net sales	$	1,360,846		100.0%	$	1,345,149		100.0%
Gross profit	194,029			14.3%	180,212			13.4%
Selling, general, and administrative	143,314			10.5%	139,235			10.4%
Depreciation and amortization	14,698			1.1%	14,831			1.1%
Gains from sales of property	(525		)	0.0%	(9,760		)	(0.7)%
Other operating expenses	6,127			0.5%	9,276			0.7%
Operating income	30,415			2.2%	26,630			2.0%
Interest expense, net	25,915			1.9%	27,118			2.0%
Other expense, net	180			0.0%	105			0.0%
Income (loss) before benefit from income taxes	4,320			0.3%	(593		)	0.0%
Benefit from income taxes	(1,588		)	(0.1)%	(175		)	0.0%
Net income (loss)	$	5,908		0.4%	$	(418	)	0.0%



Selected financial information
	June 27, 2020		December 28, 2019		June 29, 2019
	(In thousands)
Current assets:
Cash	$	11,530	$	11,643	$	12,662
Receivables, less allowance for doubtful accounts	264,642		192,872		262,042
Inventories, net	313,979		345,806		358,652
	$	590,151	$	550,321	$	633,356

Current liabilities:
Accounts payable ⁽²⁾	$	158,920	$	132,348	$	174,860
	$	158,920	$	132,348	$	174,860

Operating working capital	$	431,231	$	417,973	$	458,496



		Total Number
		Shares	Average Price
Period		Purchased⁽¹⁾	Paid Per Share
March 29 - May 2, 2020		—	$	—
May 3 - May 30, 2020		—	$	—
May 31 - June 27, 2020		27,522	$	8.98
Total		27,522

(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		Sixth Amendment to Credit and Guaranty Agreement, dated April 1, 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 (incorporated by reference to Exhibit 10.1 to the Company’s Form 8‑K filed with the Securities and Exchange Commission on April 7, 2020).
10.2	*	Letter Agreement, dated March 30, 2020, between BlueLinx Corporation and Alexander Averitt.
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: August 3, 2020	By:	/s/ Kelly C. Janzen
		Kelly C. Janzen
		Senior Vice President and Chief Financial Officer