ATLANTA - BlueLinx Holdings Inc. (NYSE:BXC), a leading distributor of building products in North America, today announced a strategic restructuring plan to improve operational efficiency to support its growth initiatives in its key markets.
The restructuring plan includes the realignment of headquarters resources and a strategic review of five distribution centers. Based on the Company's current analysis of its most attractive market opportunities and geographic footprint, the Company has begun exploring various strategic alternatives regarding the future operations of the five distribution centers. The Company will consider alternatives to increase stockholder value, which could include various forms of strategic partnering, as well as the possible sale or closure of certain distribution centers. During the process, the Company will continue to fully operate the impacted distribution centers. These actions are commencing immediately and are expected to be completed during the fiscal third quarter of 2013.
In connection with the restructuring plan and the previously announced change in the Company's executive leadership, the Company expects to recognize aggregate pre-tax restructuring charges in its current fiscal year GAAP financial results in the range of $11.5 to $12.5 million. Fiscal second-quarter GAAP financial results are expected to include pre-tax restructuring charges of approximately $5.0 million in severance charges, approximately $3.0 million in stock compensation charges, and approximately $2.0 million in other charges. Fiscal third-quarter GAAP financial results are expected to include in the range of $1.5 to $2.5 million of non-cash restructuring charges. Excluding the five distribution centers, the Company expects these actions to generate annual payroll related and other cost savings in the range of $9.0 to $10.0 million. Upon completion, the Company expects to generate approximately $25.0 to $27.0 million in operating cash, a portion of which will be reinvested in its other markets, with the balance used to pay down its long-term debt.
"The actions we announced today better focus our business and demonstrate our strong commitment to returning BlueLinx to profitability in the current operating environment, while continuing to invest in the areas of the country that we believe will provide the best return for our stockholders, business partners, and employees," said Howard Cohen, Executive Chairman.
The Company also anticipates that the fiscal second quarter GAAP financial results will be impacted by a lower of cost or market reserve charge in the range of $3.0 to $4.0 million related to a significant decline in prices for structural wood product inventory during the fiscal second quarter.
The Company expects to report its fiscal second-quarter financial results the week of July 29, 2013. A more detailed discussion of the charges will be included in the upcoming earnings conference call and quarterly Form 10-Q filing.
Use of Non-GAAP Measures
BlueLinx reports its financial results in accordance with U.S. generally accepted accounting principles (GAAP). The Company also believes that presentation of certain non-GAAP measures, i.e., results excluding certain charges or other nonrecurring events, when appropriate, provides useful information for the understanding of its ongoing operations and enables investors to focus on period-over-period operating performance, without the impact of significant special items, and thereby enhances the user's overall understanding of the Company's current financial performance relative to past performance and provides a better baseline for modeling future earnings expectations. 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.
About BlueLinx Holdings Inc.
Headquartered in Atlanta, Georgia, BlueLinx Holdings Inc., operating through its wholly owned subsidiary BlueLinx Corporation, is a leading distributor of building products in North America. Employing approximately 1,900 people, BlueLinx offers greater than 10,000 products from over 750 suppliers to service approximately 11,500 customers nationwide, including dealers, industrial manufacturers, manufactured housing producers and home improvement retailers. The Company operates its distribution business from sales centers in Atlanta and Denver, and its current network of 55 distribution centers. BlueLinx is traded on the New York Stock Exchange under the symbol BXC. Additional information about BlueLinx can be found on its Web site at www.BlueLinxCo.com.
Source: BlueLinx Holdings Inc.
Have something to say? Share your thoughts with us in the comments below.