ATLANTA, Aug. 09, 2018 (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 second quarter ended June 30, 2018.

“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.”

Susan O’Farrell, Senior Vice President and Chief Financial Officer added, “The second quarter of 2018 was a pivotal quarter for BlueLinx as we remain focused on growth while integrating the two companies. The combined company generated pro forma net sales of $948.6 million for the quarter, an increase of $99.9 million over the prior year period. Pro forma net income for the quarter was $9.2 million, and Pro forma Adjusted EBITDA was $37.6 million, up 53.9% and 23.0%, respectively, from this period a year ago.”

BlueLinx completed the acquisition of Cedar Creek on April 13, 2018 (the “Closing Date”). Under generally accepted accounting principles (GAAP), Cedar Creek’s financial results are only included in the combined company’s reported financial results from the Closing Date forward and are not reflected in the combined company’s reported financial results for any periods prior to the Closing Date. In this release, to supplement and aid in an understanding of the combined company’s reported financial results, BlueLinx is also providing certain GAAP-based and non-GAAP pro forma financial information of the combined company that includes Cedar Creek’s financial results for the relevant periods prior to the Closing Date, as if the acquisition occurred on January 1, 2017. See “Use of Non-GAAP Measures and Supplementary Information” below and the accompanying financial schedules for more information, including descriptions of any such pro forma measures that may be non-GAAP measures and reconciliations of those non-GAAP measures to their most directly comparable GAAP measures.

Second Quarter 2018 Results Compared to Prior Year Period
The Company reported net sales of $893.0 million for the second quarter of 2018, up $419.0 million or 88.4% from the prior year period. Pro forma net sales were $948.6 million, up $99.9 million or 11.8%.

The Company recorded gross profit of $103.7 million during the second quarter, up $43.1 million or 71.2% from the prior year period, with a gross margin of 11.6%. Gross profit was negatively impacted by acquisition related inventory step-up charges of $10.9 million. Excluding the effect of these acquisition related inventory step-up charges, gross margin was 12.8%, equal to the prior year period. Pro forma gross profit was $121.0 million during the second quarter, up $8.3 million or 7.3%.

The Company incurred one-time charges during the second quarter for legal, professional and other integration costs of $11.6 million related to the Cedar Creek acquisition. In addition, as a result of the increase in the Company’s stock price, the Company also incurred charges in the second quarter associated with compensation expense from Stock Appreciation Rights (SARs) and other share-based compensation of $3.8 million, which the Company will pay out in 2018 and 2019. Taking these items into account, as well as the acquisition related inventory step-up charges of $10.9 million, the Company recorded a net loss of $8.6 million for the second quarter, compared to net income of $3.2 million in the prior year period. Pro forma net income for the second quarter was $9.2 million, up $3.2 million or 53.9%.

Adjusted EBITDA, which is a non-GAAP measure, was $37.0 million for the second quarter, up $24.2 million or 189.0% from this period a year ago. Pro forma Adjusted EBITDA, also a non-GAAP measure, was $37.6 million for the second quarter, up $7.0 million or 23.0%.

First Six Months of 2018 Compared to Prior Year Period
For the first six months of 2018, the Company generated net sales of $1.3 billion, up $427.8 million or 47.4% from the prior year period. Pro forma net sales for the first six months were $1.7 billion, up $114.4 million or 7.1%.

The Company recorded gross profit of $159.0 million during the first six months of 2018, up $44.0 million or 38.3% from the prior year period, with a gross margin of 11.9%. Excluding the effect of acquisition related inventory step-up charges of $10.9 million, gross margin was 12.8%, up 10 basis points from the prior year period. Pro forma gross profit for the first six months of 2018 was $220.7 million, up $17.3 million or 8.5%.

The Company incurred one-time charges during the first six months of 2018 for legal, professional and other integration costs of $15.2 million related to the Cedar Creek acquisition. Additionally, the Company incurred $13.0 million in share based compensation expense and $10.9 million of acquisition related inventory step-up charges. Taking these items into account, the Company recorded a net loss of $22.0 million for the first six months of 2018, compared to net income of $3.8 million in the prior year period. Pro forma net loss for the first six months of 2018 was $1.4 million, a $28.9 million or 95.2% improvement over the prior year period.

Adjusted EBITDA was $45.1 million for the first six months of 2018, up $24.9 million or 124.0% from the prior year period. Pro forma Adjusted EBITDA was $56.6 million, up $4.6 million or 8.9%.

Capital Structure and Liquidity
During the second quarter of 2018, the Company used net proceeds from debt issuance under its amended $750 million asset-based revolving credit facility (inclusive of a $150 million uncommitted accordion) and a new $180 million term loan to fund the purchase price for the Cedar Creek acquisition, repay debt, and to pay certain related transaction fees and expenses. Excess availability under the amended ABL and cash on hand as of June 30, 2018, was approximately $134 million.

About BlueLinx Holdings Inc.

BlueLinx (NYSE: BXC) is a leading wholesale distributor of building and industrial products in the United States with over 50,000 branded and private-label SKUs, and a broad distribution footprint servicing 40 states. BlueLinx has a differentiated distribution platform, value-driven business model and extensive cache of products across the building products industry. Headquartered in Atlanta, Georgia, BlueLinx has over 2,500 associates and distributes its comprehensive range of structural and specialty products to approximately 15,000 national, regional, and local dealers, as well as specialty distributors, national home centers, industrial, and manufactured housing customers. BlueLinx encourages investors to visit its website, www.BlueLinxCo.com, which is updated regularly with financial and other important information about BlueLinx.