BlueLinx Announces Completion of Nine-Property Sale-Leaseback Transaction

BlueLinx Holdings Inc. (the “Company”), a leading distributor of building and industrial products in the United States, announced that it has completed sale-leaseback transactions covering nine properties for aggregate net cash proceeds of $34 million, which were used to repay indebtedness under the Company’s term loan.  The transactions closed on January 31, 2020.

Management Commentary

Mitch Lewis, President and Chief Executive Officer, stated, “I am pleased to announce the closing of these sale-leaseback transactions, which generated an additional $34 million in net cash proceeds for debt repayment.  Generating value from our owned real-estate has been a key component in our deleveraging initiatives, and it is noteworthy that over the past twelve months, we have successfully executed on this aspect of our long-term strategic plan.”

Term Loan Information

Following the repayment described above, the balance of the Company’s term loan was approximately $85 million, which is well below the designated term loan principal balance of $95.3 million necessary to maintain the leverage covenant levels established in the third amendment to the Company’s term loan facility.

Amends Asset Based Revolving Credit Facility to Align Seasonal Reporting

In a separate and unrelated matter, the Company today announced the amendment of its Asset Based Revolving Credit Facility (the “Revolving Credit Facility”) due October 10, 2022, to better align advance rates with the seasonality associated with its business. No changes were made to facility size, maturity date, pricing or other material terms.

Supplemental Information

As the Company has noted previously, the calculation of the leverage ratio under its term loan facility 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” under the term loan agreement 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 million. Following the term loan payment described above, the Company estimates that “Consolidated Total Debt” under the term loan agreement will range between $455 and $460 million for purposes of its fourth quarter 2019 leverage ratio.

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 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.

Additional Information on Sale-Leaseback Transactions

The Company sold nine distribution facilities to AIC Ventures, a private investment fund manager, in these sale-leaseback transactions, and entered into lease agreements for each of the properties for initial terms of 15 years, with multiple renewal options, demonstrating its long-term commitment to the markets where the facilities are located. The facilities included in the transactions are located in Akron, Ohio; Charlotte, North Carolina; Cincinnati, Ohio; Denville, New Jersey; Long Island, New York; Memphis, Tennessee; Pensacola, Florida; Portland, Maine; and San Antonio, Texas.

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.

Contact:

Mary Moll – Investor Relations – (866) 671-5138 – investor@bluelinxco.com

Source: BlueLinx Holdings, Inc.