BlueLinx Holdings Announces Update on Deleveraging Initiatives and Operations

BlueLinx Holdings Inc. (“BlueLinx” or the “Company”), a leading distributor of building and industrial products in the United States, announced an update on its deleveraging initiatives and operations. The Company continues to actively explore sale leaseback and real estate sale opportunities, and expects to be able to announce further details on these activities in the coming weeks. In addition, on November 22, 2019, the Company filed a three-year, $50 million universal shelf registration statement on Form S-3 with the United States Securities and Exchange Commission (“SEC”).

Management Commentary

Mitch Lewis, President and Chief Executive Officer, stated, “We are making good progress at various stages of several real estate monetization opportunities through sale leasebacks and outright sales from our $100 million portfolio of owned real estate. We believe these efforts should generate meaningful debt reduction in the next 60 days. In addition, to provide additional financial flexibility, we filed a shelf registration statement. While we have no present plans to issue securities under the shelf registration statement, it adds to our options by providing accessibility to the capital markets for the next three years, if and when we determine that to be appropriate.”

Mr. Lewis also provided the following update on operations: “We are pleased to report tangible gains in volume as the Company continues to emphasize customer service, sales growth, and operational efficiency. The sales volume recovery discussed during BlueLinx’s third quarter earnings call has continued through the first seven weeks of the fourth quarter. For that period, excluding the effect of the previously discussed loss of a key siding product line, we continued to make progress recapturing market share, as evidenced by overall volumes being up approximately 3% over the comparable prior year period.”

Balance Sheet and Term Loan Information

Additionally, the Company is clarifying the calculation of the leverage ratio under its term loan agreement. The ratio for any period is generally determined by taking the Company’s “Consolidated Total Debt” and dividing it by the Company’s “Consolidated EBITDA,” as those terms are defined in the term loan agreement.

Consolidated Total Debt is generally determined by adding the balance of the Company’s term loan, the prior month’s average balance of its revolving credit facility, and its equipment finance lease liability, and reducing that amount by unrestricted cash up to $10.0 million. At September 28, 2019, the Company’s term loan balance was $147.2 million, the average balance of its revolving credit facility was $357.9 million, its equipment finance lease liability was $34.4 million, and its unrestricted cash was $10.0 million.

Consolidated EBITDA is generally determined by taking the Adjusted EBITDA that the Company reports, and adding additional adjustments and add-backs specified by the term loan agreement. The Company anticipates that the additional adjustments and add-backs to Adjusted EBITDA for calculating Consolidated EBITDA under the term loan will be approximately $5 million to $7 million at the Company’s 2019 fiscal year end.

The leverage ratio and its components are described in more detail in the Company’s term loan agreement, as amended, which is available as an exhibit to the Company’s periodic filings with the SEC.

About the Shelf Registration Statement

Although the shelf registration statement has been filed with the SEC, it has not yet become effective. If and when the shelf registration statement is declared effective by the SEC, BlueLinx will be able to offer and sell, from time to time, up to $50 million of securities including common stock, preferred stock, debt securities, warrants, units, or any combination of such securities. The Company has no present plans to issue securities under the shelf registration statement, and any offering of securities will be subject to market and other conditions. There can be no assurance as to the actual size or terms of any offering or that any offering will be made or completed. Any such offers and sales may be made through one or more methods of distribution, subject to market conditions and the Company’s capital desires or needs. The terms of any offering under the shelf registration statement, and the intended uses of the net proceeds therefrom, will be established at the time of such offering and will be described in a prospectus supplement filed with the SEC prior to completion of the offering. A copy of the prospectus included in the registration statement may be obtained on the SEC’s website at www.sec.gov.

The securities covered under the shelf registration statement may not be sold, nor may offers to buy be accepted, prior to the time the shelf registration statement becomes effective. This press release is not an offer to sell or a solicitation of an offer to buy, nor shall there be any sale of securities in any state or jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such state or jurisdiction.

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 Marietta, Georgia, BlueLinx has over 2,200 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.

Contacts:

Susan O’Farrell – SVP, CFO & Treasurer – investor@bluelinxco.com – (770) 953-7000

Source: BlueLinx Holdings, Inc.