Bluelinx Holdings Inc. (BXC) research, news, and more from GeoInvesting

Company description

Mon, 27 Jun 2016 15:05:38 GMT

BlueLinx Holdings Inc., through its subsidiary, BlueLinx Corporation, distributes building products in North America. It distributes products in two principal categories, structural products and specialty products. The company’s structural products include plywood, oriented strand board, rebar and remesh, lumber, and other wood products primarily used for structural support, walls, and floorings in construction projects. Its specialty products comprise roofing, insulation, specialty panels, moldings, engineered wood products, vinyl products, outdoor living and metal products, and particle boards. The company also provides a range of value-added services and solutions to its customers. It serves dealers, industrial manufacturers, manufactured housing producers, and home improvement retailers through a network of 44 distribution centers. BlueLinx Holdings Inc. was founded in 1996 and is headquartered in Atlanta, Georgia.

Research

Wed, 13 Mar 2019 14:45:49 GMT

Bluelinx Holdings Inc. (NYSE:BXC) ($30.90, $287.1M market cap), a company that distributes building and industrial products in the United States, announced Q4 2018 results:

Sales of $672.6 million vs $433.6 million in the prior year
Non-GAAP net loss of $1.60 vs non-GAAP EPS of $0.27

“This was a transformative year for BlueLinx as we acquired Cedar Creek and made significant progress with our integration efforts over the course of the year. We are pleased that our integration efforts realized through December 2018 should result in annual synergies exceeding $30 million in 2019,” said Mitch Lewis, President and Chief Executive Officer. “While our fourth quarter financial results reflect a deflationary commodity environment coupled with a slow-down in single family housing starts, we remain confident in reaching annual run-rate synergies of at least $50 million as we continue integrating our Company to capture market opportunities.”

Susan O’Farrell, Senior Vice President and Chief Financial Officer, added, “We remain focused on meeting our strategic objectives and delivering solid financial results despite the significant headwinds from commodity markets that we incurred in the second half of the year. Our excess availability and cash on hand during the quarter averaged $132 million, continuing to demonstrate our strong liquidity and deleveraging potential. We are excited about the recent amendment to our term loan which provides us with the flexibility to pursue more sale leaseback opportunities and reduce leverage.”

It looks like the weakness in the housing industry is negatively impacting BXC in the short run. We don't know how long the weakness in the housing industry is going to persist and how the company will adjust to it going forward. There's still plenty of cost savings that will benefit the bottom line in 2019 as result of the company’s Cedar Creek acquisition in March 2018, which is good news.

It also looks like the company is going to sell some assets or do some leasebacks to improve its balance sheet. The catalysts that propelled the stock higher and contributed to our bullish thesis are largely behind us now. We are going to participate in the conference call scheduled to be at 10 am, but overall we're not that excited about BXC right now as we look inside the numbers. We removed the stock from our “Favorites” list on May 21, 2018 and are removing from our select long screen today.

Research

Mon, 31 Dec 2018 15:46:23 GMT

Bluelinx Holdings Inc. (NYSE:BXC) ($25.31, $235.2M market cap), a company that distributes building and industrial products in the United States, is seeing some continued buying from Nokomis Capital. On Friday, we mentioned that Nokomis filed a Form 4 showing they added over 40,000 shares to its already large stake of 1.1 million. After the close that same day, Nokomis filed another Form 4 showing they added yet another 105,000.

Shares were up 14.6% on Friday.

Research

Fri, 28 Dec 2018 19:49:16 GMT

Bluelinx Holdings Inc. (NYSE:BXC) - 10% holder of BXC stock, Nokomis Capital, L.L.C., filed a Form 4 yesterday indicating that they had added 49,117 shares to their already existing 1.1M shares. According to the Form 4, the range of purchase prices was $20.36 to $20.55. We are currently long BXC and you can view all of our coverage on the name here.

Research

Thu, 08 Nov 2018 16:32:46 GMT

Bluelinx Holdings Inc. (NYSE:BXC) ($26.40, $245.2M market cap) , a company that distributes building and industrial products in the United States, announced Q3 2018 results:

Sales of $859.8 million vs $380.5 million in the prior year
Non-GAAP net loss of $0.37 vs Non-GAAP EPS of $0.64

Chairman and Chief Executive Officer Ernest A. Bates, M.D., said, "Our third quarter 2018 results demonstrated continued strong performance from our proton therapy business, in spite of a previously disclosed two week business disruption from a water system leak. Excluding the impact of this event, we estimate proton therapy revenue would have increased 41.8%. Our UF Health Cancer Center – Orlando Health (“Orlando Health”) single room proton system, on increased awareness of clinical benefits across several indications, posted steady gains in patients served, with firm reimbursement trends. We remain focused on driving this business and look forward to generating value as we replicate Orlando Health’s success in new markets."

You can see our full coverage on BXC here.

Research

Thu, 09 Aug 2018 14:05:07 GMT

Bluelinx Holdings Inc. (NYSE:BXC) ($32.39, $298M market cap), a company that distributes building and industrial products in the United States, announced their 2nd quarter 2018 results and the successful completion of the acquisition of Cedar Creek.

Net Sales of $893 million for the Quarter; Up $419 million From Q2 2017
Pro forma Adjusted EBITDA was $37.6 million, up 53.9% from this period a year ago

Management commentary:

“We are pleased with our second quarter results during the period in which we also completed the acquisition of Cedar Creek,” said Mitch Lewis, President and Chief Executive Officer. “While we are still early in our 18-month integration process, based on specific opportunities we have identified and actions taken to date, we are increasingly confident in our ability to generate at least $50 million in annual synergies. We remain well-positioned to continue our growth and drive enhanced value for our shareholders.”

In March, we published a case study on BXC in which revisited the opportunity to hop into an investment in the company as a major legacy shareholder (private equity firm Cerberus Capital) sold its stake through an underwriter at a big discount, making for an attractive entry point. The icing on the cake was the company’s announcement that it entered into a strategic merger agreement to acquire Cedar Creek, essentially doubling revenues. This sent the stock soaring from $16 to $28 in one trading session. Over the course of the next 3 months, BXC saw its price rise to $46 per share, however just recently settling back to the low $30’s before today’s earnings announcement. The stock was marked up nearly 20% on light pre-market trading.

Research

Mon, 21 May 2018 14:44:08 GMT

We are removing BXC from our ‘Buy on Pullback’ Mock Portfolios 3 and 6

Last week we removed Bluelinx Holdings Inc. (NYSE:BXC) ($38.38, $353M market cap) from our Favorite stock list after a >300% increase in price. While we are still holding a portion of our long position, we are also removing BXC from Buy On Pullback portfolios. BXC was added to:

Mock 3 on October 4, 2016 at $8.80, at current prices BXC shares are up 336%
Mock 6 on October 18, 2017 at $8.06, at current prices BXC shares are up 376%

Research

Thu, 17 May 2018 17:45:38 GMT

**Favorite Stock Update / Call to Action - Removing BXC, But Remain Long After Paring Back Our Position

In our December 4, 2017 email we introduced Maj’s Favorite Stocks Model Portfolio screen. Building products company Bluelinx Holdings Inc. (NYSE:BXC) ($38.25, $352M market cap) was one of the original six stocks that were listed as part of introduction of this portfolio. While we are maintaining a long position in BXC, after a >300% increase in price we are removing it from the portfolio. Shares were trading at $9.70 at the time of our introduction of Maj’s favorites. After the Company’s announcement of a major acquisition, shares rocketed to highs over $41. We have also pared back our position.

Research

Thu, 03 May 2018 15:34:27 GMT

Bluelinx Holdings (NYSE:BXC) ($39.92; $367.7M market cap), a building supply company, announced Q1 2018 results:

Sales of $437.5 million vs $428.6 million in the prior year
Non-GAAP net loss of $0.11 vs a loss of $0.05 in the prior year

Quotes from management:

“Our first quarter was perhaps the most productive in the history of BlueLinx. We entered into $110 million of sale leaseback transactions that allowed us to deleverage the balance sheet and enter into an agreement to acquire Cedar Creek,” said Mitch Lewis, President and Chief Executive Officer. “We completed our acquisition of Cedar Creek on April 13th, which positions us as one of the largest wholesale distributors in the building products industry. With more than 50,000 branded and private-label SKUs, a broad distribution footprint servicing 40 states, and approximately 700 sales associates calling on customers every day, we are confident that we are well-positioned to continue our growth and drive enhanced value for our shareholders.”

Investors should note that Q4 and Q1 are the seasonally weaker quarters for BXC. We would not be surprised to see a pullback in the stock, especially after nearly tripling on recent acquisition news (Cedar Creek). The story going forward will depend on how well BXC integrates this acquisition.

Research

Mon, 16 Apr 2018 15:34:06 GMT

Bluelinx Holdings Inc. (NYSE:BXC) ($35.35) - Bluelinx Holdings announced that its acquisition of Cedar Creek has closed. The combination of BlueLinx and Cedar Creek creates one of the largest wholesale distribution companies in the building products industry, with combined revenue of approximately $3.2 billion in 2017. With one of the largest product offerings in the industry and over 70 locations, the combined company will utilize its broad footprint to better serve its extensive network of customers.

Management commented:

“We are pleased to announce today that we have finalized the strategic acquisition of Cedar Creek which marks a new, transformative era for our company,” said Mitch Lewis, President and Chief Executive Officer of BlueLinx. “We are in an even stronger position to continue to drive growth, deliver differentiated value to our customers and suppliers, and generate strong returns for our shareholders.”

We provided commentary to our members on this acquisition when it was first announced here. We initially took our position in BXC in August of 2016 when the stock was trading at $8.00. BXC has been part of our “Buy on Pullback Mock” Portfolio 3.0 since October 2016. On October 19, 2017 we also added BXC to our “Buy on Pullback” Mock Portfolio 6.0 on a selloff that was based on the non-dilutive financing. And most recently, BXC was added to our Favorite stock list on December 4, 2017 and highlighted by Maj as one of the 4 stocks in his latest March 7, 2018 article , “Insiders Are Betting Big On These 4 Stocks, and So Am I”. The article highlighted how a combination of insider buying and information arbitrage provided solid clues on the strength of investments in 4 stocks.

Research

Mon, 12 Mar 2018 16:21:08 GMT

Bluelinx Holdings (NYSE:BXC) ($15.79; $144.3M market cap), a building supply company, announced a strategic agreement to acquire Cedar Creek, a leading building products wholesale distributor.

“The combination of BlueLinx and Cedar Creek will create a leading building products wholesale distributor with one of the largest product offerings in the building products industry, including over 50,000 branded and private-label SKUs, and a distribution footprint of 70 national locations servicing 40 states.”

This development only confirms our belief that BXC is in the early innings of its come back story and that shares should move much higher from current levels. If consummated, the deal almost doubles the size of the company in terms of revenue and results in immediate $2 in EPS accretion , from our first look at the details. But the accretion could be meaningfully higher moving forward. As far we can tell, the acquisition will be funded by cash on hand and new revolving credit facility . But we would not rule out an equity raise in the near future, given the large amount of earnings potential from the deal. This means that increased earnings would still occur if the company were to effect a small equity raise. One thing we want to look into is how much of Cedar Creek revenue is generated from new construction vs. the remodeling market. BXC currently has minimal exposure to the less cyclical remodeling market.

Highlights from the acquisition announcement:

Creates Diversified Two-Step Distributor with $3.2 Billion in Revenue
Enhances Position as a Leading Building Products Wholesale Distributor with Expanded Offerings, Capabilities and Geographic Reach to Accelerate Growth
Expects to Generate At Least $50 Million of Annual Cost Savings Within 18 Months
Significantly and Immediately Accretive to Earnings

Quotes from management:

“We are pleased to announce the combination of Cedar Creek and BlueLinx,” said Mitch Lewis, President and Chief Executive Officer of BlueLinx. “Cedar Creek’s commitment to organic growth and its customers as well as its track record of successful acquisitions make it an ideal partner for BlueLinx. The combination will significantly enhance our product portfolio by providing greater breadth and depth of building products and services for our customers and suppliers across our markets. This transaction will create a leading U.S. wholesale distributor of building and industrial products, and significantly enhance the value that we can deliver to our customers, as well as our supplier partners, and end-market consumers.

Pro Forma financials for 2017:

BlueLinx and Cedar Creek’s combined revenue was $3.2 billion in 2017 and its pro forma LTM Adjusted EBITDA for 2017 would have been approximately $154 million including at least $50 million of annual cost savings.

The transaction is expected to close within 45 days.

We initially took our position in BXC in August of 2016 when the stock was trading at $8.00. BXC has been part of our “Buy on Pullback Mock” Portfolio 3.0 since October 2016. On October 19, 2017 we also added BXC to our “Buy on Pullback” Mock Portfolio 6.0 on a selloff that was based on the non-dilutive financing. And most recently, BXC was added to our Favorite stock list on December 4, 2017 and highlighted by Maj as one of the 4 stocks in his latest March 7, 2018 article , “Insiders Are Betting Big On These 4 Stocks, and So Am I. The article highlighted how a combination of insider buying and information arbitrage provided solid clues on the strength of investments in 4 stocks:

Seeking Alpha has published a version of the article this morning, with MHH and EML being explicitly mentioned. The extended research on BXC and TSSI is still only available at our pro portal.

Research

Fri, 02 Mar 2018 17:56:04 GMT

Bluelinx Holdings (NYSE:BXC) ($16.12; $146.6M market cap), a building supply company, reported its Q4 2017 results yesterday pre-market, highlighted here. We stated with with the majority of the cost restructuring initiatives behind them, BXC has now reported two straight quarters of top and bottom line improvements and seems well-positioned to continue this trend in 2018. We encourage you to read the conference call transcript which offered more color on the Company’s future outlook. Notable exerpts from the call include:

“As we discussed our last call, we are now pivoting to focus on many of the sales growth objectives we identified in our strategy session in the fourth quarter of 2017. We are making investments in equipment, inventory and new sales team members in areas of the business where we feel we have significant market share opportunities.”

“As I mentioned on our last call, these organic growth initiatives to enhance our market share will take time. While we are making good progress executing on many of these initiatives, I still do not anticipate that the organic growth initiatives we established during the fourth quarter will result in meaningful market share improvement until the second half of this year.”

“We estimate that our remaining owned real estate, which is currently unencumbered, is in the $150 million to $160 million range. This value is based on independent third-party real estate appraisals that were conducted on all of our properties. The aggregate value of these appraisals is consistent with the fair market value we have estimated in the past. We continue to view our real estate as a valuable resource for additional capital, liquidity and potential strategic initiatives for the company.”

And lastly, in the Q&A, when asked about how far along the company is with the EBITDA margin improvement initiatives, CEO Mitch Lewis stated he thinks of them as in the third inning and sees further opportunities to improve.

The full transcript can be read here.

Research

Thu, 01 Mar 2018 18:01:33 GMT

Bluelinx Holdings (NYSE:BXC) ($15.12; $137.5M market cap), a building supply company, announced Q4 2017 results:

Sales of $433.6 million vs $421.6 million in the prior year
Non-GAAP EPS of $0.27 vs a non-GAAP net loss of $0.27 in the prior year

Quotes from management:

We are pleased to share our 2017 results, including our best full year gross margin and net income on record and our best full year Adjusted EBITDA since 2006. These results, coupled with the four sale-leaseback transactions we completed on January 10, 2018, position us well to capitalize on our anticipated continued strength in the markets we serve,” said Mitch Lewis, President and Chief Executive Officer.

Susan O’Farrell, Senior Vice President and Chief Financial Officer added, “2017 was exceptional for BlueLinx. Our continued focus on deleveraging the business led to one of the best years in Company history as we improved our financial results and significantly reduced our debt.”

With the majority of cost restructuring initiatives behind them, BXC has now reported two straight quarters of top and bottom line improvements and seems well-positioned to continue this trend in 2018.

Research

Mon, 12 Feb 2018 16:15:24 GMT

Bluelinx Holdings (NYSE:BXC) ($15.60; $140.5M market cap) a building supply company announced a sales leaseback agreement with:

“Brennan Investment Group a private real estate investment firm that acquires, develops, and operates industrial facilities, announced its purchase and simultaneous leaseback of four buildings to BlueLinx Corporation (NYSE: BXC) in a joint venture with a client of Arch Street Capital Advisors, LLC. The portfolio, located in four states and totaling 2,306,835 square feet, is geographically dispersed throughout several top markets in the United States including Boston, Raleigh-Durham, Atlanta, and Washington, D.C. BlueLinx is a leading distributor of building and industrial products in the United States and operates through a broad network of distribution centers. Since 2011, through multiple ventures, Brennan and Arch Street have acquired over $1 billion of single tenant, net leased, industrial assets.”

Research

Thu, 11 Jan 2018 17:52:21 GMT

Bluelinx Holdings (NYSE:BXC) ($10.17; $92.5M market cap) a building supply companyannounced the repayment of the remaining balance on its CMBS mortgage of $98 million.

The payment was funded through long-term sale leaseback transactions on four properties owned by the Company, which provided $110 million in aggregate sale proceeds. The Company will operate these locations under long-term leases, and after the transaction, the Company will continue to own 33 facilities in the United States.

We are very pleased that over the last four months we have both replaced our ABL and paid the principal of our legacy mortgage while continuing our mission to deliver BlueLinx. The Company’s portfolio of owned real estate continues to provide financial strength as a source of liquidity for additional debt reduction and operational and strategic opportunities in the future,” said Mitch Lewis, President and CEO.

Shyam Reddy, Chief Administrative Officer, responsible for the Company’s real estate activity, added “We appreciate the support of our CMBS lenders through the transformation of BlueLinx over the last two years. We continue to engage in discussions regarding additional opportunities to monetize our real estate and will assess these transactions in light of our capital requirements and strategic initiatives.”

Research

Thu, 02 Nov 2017 14:58:56 GMT

Bluelinx Holdings Inc. (NYSE:BXC) ($8.82; market cap $80.2m), a leading distributor of building and industrial products, announced its Q3 2017 results:

Sales of $479.3 million vs $476.0 million in the prior year
Non-GAAP EPS of $0.65 vs $0.12 in the prior year
Adjusted EBITDA of $14.0 million vs $10.6 million in the prior year

Quotes from management:

“We are pleased to report continued improvement in our financial performance from the second quarter of 2017 which resulted in increased net income for the third quarter and our highest third quarter Adjusted EBITDA since 2007. These results, coupled with the new five year revolving credit facility that we closed on October 10, 2017, and the successful completion of our secondary offering last week, provide an inflection point for BlueLinx as we move forward into the next phase of our recovery,”

On October 19, 2017 we added BXC to our Buy on Pullback Mock Portfolio 6.0 as we felt the share sell off based on the non-dilutive financing was overdone. BXC is also part of our Buy on Pullback Mock Portfolio 3.0 since October 2016.

Research

Wed, 01 Nov 2017 14:51:13 GMT

Bluelinx Holdings Inc. (NYSE:BXC) ($8.72; market cap $793m), a building material and industrial product provider, was recently added to our Buy on Pullback Mock Portfolio 6.0 due to a pullback in shares after announcing a non-dilutive secondary offering. You can see our recent research note here.

In order to highlight another investors take on the recent events, we encourage you to read a Seeking Alpha article posted yesterday, “BlueLinx Holdings: Favorable Risk-Reward Profile, Downside Protection, And Attractive Entry Point Following Non-Economic Selling”.

Research

Thu, 19 Oct 2017 13:57:30 GMT

**Buy On Pullback Mock Portfolio Updates

We have added $BXC ($8.11) to our Buy on Pullback Mock Portfolio 6.0. It Joins $GVP, $MIXT, and $EML. Yesterday during the trading day, we issued the following premium Tweet:

The Company’s shares have been under pressure after announcing a secondary offering on October 10, 2017. At that time, we stated we were considering adding BXC to our Mock Portfolio 6.0 once the offering was priced. Yesterday after the close, BXC announced the pricing of the offering at $7.00. While this is a much steeper discount than we initially anticipated, investors should note that this is a non-dilutive secondary with Cerberus Capital Management, a private equity fund who owns roughly 50% of the shares outstanding. In our April 26, 2017 research note we stated shares of BXC had attained a new high of $10.46. Commentary in our note also included:

“A caveat that we have been tracking is that Cerberus Capital, a household name in the private equity industry, still holds a 52% position in BXC. Cerberus will eventually liquidate this position and we are watching closely how minority shareholders will be treated.

We are no strangers to Cerberus Capital. In a similar ownership situation involving $BLBD, we spoke out in a Barron’s interview about what we perceived as a bad deal for shareholders. The fact that the bad deal was refused, and the stock is now trading near all time highs, gives us more confidence that the ownership situation in BXC can be resolved.”

While this is certainly a temporary setback, with no fundamental change in the business, we feel shares should recover and possibly reach new highs in time, similar to BLBD.

Research

Tue, 10 Oct 2017 17:30:21 GMT

BXC ($10.27) a leading distributor of building and industrial products in the United States, announced that Cerberus Capital Management has commenced a secondary offering of 3,863,850 shares of BXC common stock.

We initially discussed our bullish thesis on BXC as a restructuring play in June 2016. We initiated our long position in BXC on August 4, 2016 on the heels of strong Q2 2016 results and restructuring efforts playing out (shares opened at $7.50 on Aug 4th). One caveat we had mentioned in our early note was that Cerberus Capital, a household name in the private equity industry, held a 52% position in BXC. We stated, Cerberus will eventually liquidate this position and we are watching closely how minority shareholders will be treated.

We will look to see what the offering is priced at in the coming days.

Comments & Business Outlook

Thu, 10 Aug 2017 15:09:53 GMT

BXC - Reported Q2 2017 earnings this morning:

Revenue: $474 million vs. $509 million
Non GAAP EPS of $0.49 vs $0.46 in the prior year

Quotes from Management:

“We continue to make progress in our local market and sales excellence emphasis, which coupled with our ongoing deleveraging efforts, enabled us to improve our financial performance while significantly reducing our debt from prior year levels. As we remain focused on our customers and markets, our team is energized and motivated to continue improving our operating results and garnering market share,”

“With the successful completion of our operational efficiency initiatives, we have experienced excellent performance this quarter, even with fewer facilities. Our commitment to improving our business resulted in our best second quarter net income, gross margin, and Adjusted EBITDA results since 2008.”

“We have also significantly reduced our debt principal by $76.4 million from this period a year ago. We continue to focus on deleveraging our balance sheet while actively marketing certain owned facilities for sale leaseback opportunities and exploring financing alternatives. Furthermore, with the working capital efficiencies we have achieved, we have reduced our operating working capital by $21.6 million from second quarter 2016.”

Research

Mon, 15 May 2017 16:12:35 GMT

BXC ($10.07) - We have discussed our bullish thesis on BXC’s restructuring initiatives since last summer. We initiated our long position in BXC on August 4, 2016 on the heels of strong Q2 2016 results and restructuring efforts playing out (shares opened at $7.50 on Aug 4th).

Today, we would like to highlight another investor's perspective. Please see this Seeking Alphaarticle titled, “BlueLinx: A Turnaround Story With Strong Business Moat”

Research

Fri, 05 May 2017 14:29:56 GMT

BXC ($9.23) - Yesterday we highlighted BXC’s Q1 2017 results. Shares traded down nearly 12% on the results. We encourage investors to read the conference call transcript as the Company discusses the positive business trends it is seeing:

“The first quarter of 2017 continues the positive trend we’ve enjoyed now for almost two years. And yet the BlueLinx team remains motivated by the tremendous opportunities that lie ahead for our organization or improving but we have a long way to go...

...there were a couple of things going on in the first quarter this year while the winter across the country obviously was generally mild, for us we have a good strong presence for example in New England in the Buffalo market in that area of the country which relative to a very mild 2015 was worse.We’re starting to see significantly improved performance relative to the first quarter in those areas of the country.”

Research

Thu, 04 May 2017 15:25:16 GMT

BXC ($10.35) announced Q1 2017 results:

Sales of $428.6 million vs $474.3 million in the prior year
GAAP EPS of $0.06 vs a loss of $0.69
Non-GAAP loss of $0.11 vs non-GAAP loss of $0.30

Quotes from management:

“Our continued emphasis on local market strategy and sales excellence, while successfully executing our deleveraging strategy, is reflected in the results we reported this quarter. We will remain focused on improving the operating results at BlueLinx as we continue to execute on our strategy to deleverage our balance sheet and improve our financial strength,” said Mitch Lewis, President and Chief Executive Officer.

Susan O’Farrell, Senior Vice President and Chief Financial Officer added, “We are excited to see such a strong start to 2017. Our dedication to improving our business has resulted in record first quarter gross margin and net income results for BlueLinx. Since announcing our deleveraging plan last year, we significantly reduced our debt principal by $111.3 million from this time a year ago. As part of this debt reduction, we fully satisfied our July 2017 mortgage obligation three months ahead of schedule. Furthermore, with the working capital efficiencies we have gained, we have reduced our operating working capital by $56.1 million from first quarter 2016.”

Research

Wed, 26 Apr 2017 14:58:19 GMT

BXC ($10.33) shares have been strong the last several weeks, reaching a new 52 week high of $10.46 on April 24, 2017. We initiated our long position in BXC on August 4, 2016 on the heels of strong Q2 2016 results and restructuring efforts playing out (shares opened at $7.50 on Aug 4th). See our initial recap here. The stock has been on a bit of a roller coaster ride since, dipping to the low $6 level before regaining its footing and now hitting new highs.

An added caveat that we have been tracking is that Cerberus Capital, a household name in the private equity industry, still holds a 52% position in BXC. Cerberus will eventually liquidate this position and we are watching closely how minority shareholders will be treated.

We are no strangers to Cerberus Capital. In a similar ownership situation involving $BLBD, we spoke out in a Barron’s interview about what we perceived as a bad deal for shareholders. The fact that the bad deal was refused, and the stock is now trading near all time highs, gives us more confidence that the ownership situation in BXC can be resolved.

Research

Fri, 24 Mar 2017 14:35:13 GMT

BXC ($7.88) completed the sale of 3 properties, stating the following:

“With these property sales and all others incurred since April 2016, BlueLinx will fully satisfy its July 2017 CMBS mortgage payment obligation of $60 million three months ahead of schedule.

Less than a year ago we announced our initiative to reduce the Company’s financial leverage and are delighted to share that we continue to successfully execute on our strategy to deleverage BlueLinx. We are exploring additional sale and leaseback transactions, alternative refinancing options as well as other real estate optimization strategies to continue to improve the Company’s leverage and financial strength,” said Mitch Lewis, President and Chief Executive Officer.

Susan O’Farrell, Senior Vice President and Chief Financial Officer added, “We are thrilled with the property sales we completed in the first quarter of 2017, enabling us to satisfy our July 2017 mortgage obligation ahead of schedule. The substantial remaining real estate portfolio value, which is well above our outstanding mortgage, should enable us to continue to deleverage our balance sheet, while providing us with potential future opportunities to extract that value for the benefit of our growth strategies.”

As we stated in our March 20, 2017 update, we initiated our long position in BXC on August 4, 2016 on the heels of strong Q2 2016 results and restructuring efforts playing out (shares opened at $7.50 on Aug 4th). See our initial recap here. The stock has been on a bit of a roller coaster ride. Shares reached new 52 week highs of $9.70 just days after our original note, then retraced to the sub $7 level before beginning this recent uptrend.

Research

Mon, 20 Mar 2017 14:03:39 GMT

BXC ($8.28) shares have been trending up the past week in sympathy with some other building supply stocks like $HBP, which hit a new high on Thursday. We initiated our long position in BXC on August 4, 2016 on the heels of strong Q2 2016 results and restructuring efforts playing out (shares opened at $7.50 on Aug 4th). See our initial recap here. It’s been a bit of a roller coaster ride. Shares reached a new 52 week high of $9.70 just days after our original note, then retraced to the sub $7 level before beginning this recent uptrend.

Research

Thu, 02 Mar 2017 14:52:10 GMT

BXC ($6.90)reported Q4 2016 results:

Sales of $421.7 million vs $428.2 million in the prior year
Non-GAAP loss per share of $0.27 vs loss of $0.87 in the prior year

Management stated:

“We are pleased to share the strong finish we had in 2016 which demonstrates our continued focus on our key strategic initiative to deliver the Company through monetizing our real estate and improving our working capital. The successful execution of this strategy enabled us to improve our financial performance while significantly reducing our debt from prior year levels. We continue to evaluate alternatives to reduce the Company’s leverage and enhance liquidity,” said Mitch Lewis, President and Chief Executive Officer.

Susan O’Farrell, Senior Vice President and Chief Financial Officer added, “Since announcing our deleveraging plan, we have sold eight unoccupied properties during fiscal 2016, which generated gross proceeds of $36.4 million. Furthermore, we have successfully reduced our debt principal by $84.0 million from this time a year ago.

We were hoping the company could maintain profitability even in its seasonally weaker quarters (Q4 and Q1), but it appears for the time being (until gross margins and operating margins improve), the company will have to drive higher revenues and/or continue to reduce its debt. Fortunately, these are two important goals the company has set for 2017. Until the company’s restructuring efforts are fully completed, it looks like adjusted EBITDA growth will be the valuation metric we use.

Research

Fri, 06 Jan 2017 16:28:46 GMT

BXC ($7.74) completed another property sale and continues to advance deleveraging strategy. The company announced:

“it has recently completed the sale of its non-operating facility in Wausau, Wisconsin, generating approximately $1.1 million in net proceeds. With this sale, BlueLinx has realized approximately $34.1 million in net proceeds from certain real estate sales since announcing its deleveraging plan last year.

BlueLinx has other non-operating facilities under contract with various purchasers and continues to actively market several company-owned operating facilities for possible sale leaseback transactions. The Company expects that through the outright sale of the properties in which it no longer operates and the sale leaseback transactions in certain facilities that will remain, that it will cumulatively pay off more than $60 million of its mortgage balance in the second quarter of 2017 since extending earlier in 2016.”

Research

Thu, 10 Nov 2016 16:03:30 GMT

BXC ($7.59) reported Q3 2016 results:

Sales of $476 million vs $517.8 million in the prior year
Non-GAAP sales of $469.7 million vs $453.2 million in the prior year
Non-GAAP EPS of $0.14 vs $0.07 in the prior year

Quotes from management:

“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.

We are still trying to determine what the sales and EPS run rate will be once restructuring initiatives are complete. We will be on the conference call later this morning to see if management provides color on this and on its industry outlook (housing starts)

Research

Fri, 09 Sep 2016 18:31:45 GMT

BXC ($8.83) announced it has completed the sale of its non-operating La Puenta, California facility for net proceeds of $14.5 million. All the net proceeds will be used to pay down overall debt. The company also stated it has other facilities under contract that are expected to close prior to year end that are expected to generate in excess of $14.5 million.

We initiated our long position on August 4, 2016 on the heels of BXC’s strong Q2 2016 results. See earnings recap here.

Research

Thu, 01 Sep 2016 16:10:49 GMT

BXC ($8.87) announced it has completed the sale of 3 facilities for net proceeds of $1.9 million. The Company also announced it has 6 other non-operating facilities under contract which will generate $30 million in net proceeds by year end which it intends to use to pay down its debt burden which we discussed in our original note from June 27, 2016.

If the Company uses the full $30 million to pay down its debt, we calculate the interest savings to add $0.20 (non-taxed) EPS on an annual basis. We used non-taxed for our calculations because the Company has a large amount of NOL’s ($267 million) that should shelter the tax burden for a prolonged period.

We initiated our long position on August 4, 2016 on the heels of BXC’s strong Q2 2016 results. See earnings recap here.

Research

Mon, 22 Aug 2016 14:05:06 GMT

Will Look To Add to Our Long Position In BXC

BXC ($8.73) - In our June 27, 2016 morning premium member email we stated we were taking closer look at BXC due to recent steps to improve margins and reduce its mountain of debt. On August 4, 2016, BXC reported strong Q2 2016 results showing that the steps they are taking are beginning to pay off. We disclosed our long position on August 4th.

Further due diligence strengthens our bullish assumptions on the BXC story. More details to come.

Research

Thu, 04 Aug 2016 15:51:17 GMT

BXC ($7.34) - On June 27, 2016 we stated we are watching BXC closely due to the company is taking steps to improve margins and reduce its mountain of debt. If successful, there could be massive incremental gains in EPS and EBITDA.

This morning, BXC reported Q2 2016 results and more importantly reported progress on debt reduction plans:

Sales of $509.0 million vs $515.6 million in the prior year
Non GAAP EPS of $0.43 vs $0.08 in the prior year

Quotes from management:

“As previously announced on April 21st, our primary focus is on deleveraging the balance sheet. We have decreased our debt principal by $63.6 million and our net working capital by $64.5 million when compared to the same period a year ago primarily through our inventory and facility rationalization. In addition, we are currently under contract to sell several of our closed facilities and are actively marketing certain operating facilities for sale leaseback opportunities.”

Research

Mon, 27 Jun 2016 15:06:30 GMT

Reasons for Tracking

BXC ($7.20) - We are considering constructing Reasons for Tracking on Bluelinx Holdings. BXC distributes building products in North America. The company distributes products in two principal categories, structural products and specialty products. This $7.20 company is taking steps to improve margins and reduce its mountain of debt. If successful, there could be massive incremental gains in EPS and EBITDA. We encourage our members to review the company’s conference call transcripts for more information while we continue our research.