ATLANTA, Nov. 10, 2016 (GLOBE NEWSWIRE) -- 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.

Use of Non-GAAP Measures and Supplementary Information
BlueLinx reports its financial results in accordance with accounting principles generally accepted in the United States (“GAAP”). The Company also believes that presentation of certain non-GAAP measures may be useful to investors. Any non-GAAP measures used herein are reconciled in the financial tables accompanying this news release. The Company cautions that non-GAAP measures should be considered in addition to, but not as a substitute for, the Company’s reported GAAP results.

We define Adjusted EBITDA as an amount equal to net income (loss) plus interest expense and all interest expense related items (e.g., write-off of debt issuance costs, charges associated with mortgage refinancing), income taxes, depreciation and amortization, and further adjusted to exclude certain non-cash items and other adjustments to Consolidated Net Income (Loss). Further, we also exclude, as an additional measure, operational efficiency initiatives such as facility closures and SKU rationalization, for period over period comparability.

We present Adjusted EBITDA (and an exclusion of operational efficiency initiatives) because it is a primary measure used by management to evaluate operating performance and, we believe, helps to enhance investors’ overall understanding of the financial performance and cash flows of our business. However, Adjusted EBITDA is not a presentation made in accordance with GAAP, and is not intended to present a superior measure of the financial condition from those determined under GAAP. Adjusted EBITDA, as used herein, is not necessarily comparable to other similarly titled captions of other companies due to differences in methods of calculation. We believe Adjusted EBITDA is helpful in highlighting operating trends. We also believe that Adjusted EBITDA is frequently used by securities analysts, investors and other interested parties in their evaluation of companies, many of which present an Adjusted EBITDA measure when reporting their results. We compensate for the limitations of using non-GAAP financial measures by using them to supplement GAAP results to provide a more complete understanding of the factors and trends affecting the business than using GAAP results alone.

Adjusted sales and gross profit, non-GAAP measures, are defined as net sales and gross profit at locations excluding the effect of operational efficiency initiatives; specifically, facility closures and the SKU rationalization initiative. We believe adjusted sales and gross profit are helpful in presenting comparability across periods without the effect of our operational efficiency initiatives. We also believe adjusted sales and gross profit can be used by securities analysts, investors, and other interested parties in their evaluation of our Company, to illustrate the effects of these initiatives. We compensate for the limitations of using non-GAAP financial measures by using them to supplement GAAP results to provide a more complete understanding of the factors and trends affecting the business than using GAAP results alone.

Additionally, we believe supplementary GAAP-based information such as operating working capital and debt principal payable are helpful to investors in explaining the impacts of our operating efficiencies. Operating working capital is defined as current assets less current liabilities plus the current portion of long-term debt. Management of operating working capital helps us monitor our progress in meeting our goals to maximize our return on working capital assets. Debt principal is defined as the principal amount of debt payable at the stated period-end date and is used by management to monitor our progress in meeting our goals to reduce the debt on our balance sheet.

Cash cycle days are defined as the total number of days to turn our inventory, receivables, and payables on a trailing three month basis. Management of our cash cycle days helps us monitor how efficiently we are generating cash from our short term assets and liabilities.

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.