BlueLinx Holdings Inc. · NYSE:BXC
BlueLinx — Investor Presentation (May 2007)
37 slides from BlueLinx's investor presentation, May 9, 2007
Slide 1: BlueLinx Investor Book Spring 2007
Austin Dallas BlueLinx Investor Book Spring 2007 Austin Dallas
Slide 2: Safe Harbor Statement
Safe Harbor Statement Forward-Looking Statement Safe Harbor - This presentation includes "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. All of these forward-looking statements are based on estimates and assumptions made by our management that
Slide 3: Investor Book Agenda
BlueLinx Investor Book BlueLinx Overview Industry Dynamics Focused Growth Strategy 2007 Q1 Update Looking Forward
Slide 4: Overview: Investment Considerations
BlueLinx Overview: Investment Considerations COMPANY & INDUSTRY Largest independent building products distributor in highly fragmented industry ripe for consolidation Unique, centralized distribution platform, national sales force and high-service, solutions-based value proposition Diversified produ
Slide 5: Overview: Operations
BlueLinx Overview: Operations Largest Building Products Distributor in U.S. 2006 Revenue: $4.9 Billion ~11,500 customers and 750+ suppliers Product portfolio 10,000+ SKUs 70+ warehouses; 80+ reloads Owned fleet of 800 trucks and 1,200 trailers 3,300 employees, including 900+ sales NYSE: BXC Analysts
Slide 6: Overview: Positioned at the Center of Value Creation
BlueLinx Overview: Positioned at the Center of Value Creation Building Products Manufacturers BlueLinx Home Improvement Centers Dealers Repair and Remodeling Residential and Non- Residential Construction Industrial & Manufactured Housing Value to Manufacturers Reliable channels to market Consistent
Slide 7: Overview: Diversified Product, Customer & End Use Segments
BlueLinx Overview: Diversified Product, Customer & End Use Segments Structural 56% of 2006 Sales Engineered lumber Specialty lumber Vinyl siding Hardwood plywood Particleboard Moulding Metal products Specialty 44% of 2006 Sales Plywood OSB Lumber Rebar/Remesh New Home Construction 50% Industrial App
Slide 8: Overview: Diversified Product, Vendor Relationships
BlueLinx Overview: Diversified Product, Vendor Relationships Diversified Product, Vendor Relationships Diversified Product, Vendor Relationships Diversified Product, Vendor Relationships Diversified Product, Vendor Relationships Diversified Product, Vendor Relationships Diversified Product, Vendor R
Slide 9: Overview: Evolution of BlueLinx Growth Strategy
BlueLinx Overview: Evolution of BlueLinx Growth Strategy Decentralized structure 13 warehouses Outlet for GP Plywood Diversified building products distributor Centralized, nationwide distribution transition Unlocking Value Decentralized structure 134 warehouses 1954 - 1976 1977 - 1993 1994 - 2000 20
Slide 10: Overview: Unlocking Value As An Independent Specialty Products Distributor
BlueLinx Overview: Unlocking Value As An Independent Specialty Products Distributor Commodities-focused, distribution arm of manufacturer Customer-focused, solutions- driven, value-added distribution partner 55%+ structural products FROM: TO: 60%+ specialty products Structural products-driven earnin
Slide 11: Overview: Unlocking Value With Services Beyond Distribution
BlueLinx Overview: Unlocking Value With Services That Extend Beyond Distribution Delivering Commodity Building Products From Point A to Point B A solutions-based approach that extends beyond distribution FROM: TO: Building Products Provide specialty products with national branded partners, portfolio
Slide 12: Overview: Key Business Differentiators
BlueLinx Overview: Key Business Differentiators Enabling Value Creation Business Management Inside Sales Product Procurement Outside Sales Information Systems Centralized Centralized, but organized by market and product Centralized by product In market, reporting to business management Real-time, de
Slide 13: Overview: Strategic Objectives
BlueLinx Overview: Strategic Objectives Structural $2.8 billion 56% of total sales Specialty $2.2 billion 44% of total sales Specialty 60% + of total sales 2006 Future Structural below 40% without shrinking business Strategic Imperative No. 1: Profitably grow specialty revenues to 60% of total sales
Slide 14: Overview: Experienced Leadership Team
BlueLinx Overview: Experienced Leadership Team Management Team Leadership Background Stephen Macadam CEO George Judd COO Lynn Wentworth CFO Steve Skinner SVP Duane Goodwin SVP Dave Dalton SVP Mike Meadows VP 6 Regional VPs RVP CEO Consolidated Container; EVP Georgia-Pacific; McKinsey & Co. VP Easter
Slide 15: Investor Book March 2007 Agenda
BlueLinx Investor Book March 2007 BlueLinx Overview Industry Dynamics Focused Growth Strategy 2007 Q1 Update Looking Forward
Slide 16: Growing & Attractive Industry: Long-Term Fundamentals Remain Positive
1991-2000 Avg 0.028 2001-2006 Avg -0.019 2007E-2016E Avg 0.026 Growing & Attractive Industry: Despite Housing Slowdown, Long-Term Industry Fundamentals Remain Positive 1991-2000 Avg 1.4 2001-2006 Avg 1.8 2007E-2016E Avg 1.8 Annual Housing Starts (mm) Annual Unit Volume Growth In Other End-Use Market
Slide 17: Growing & Attractive Industry: Market Growth of Two-Step Distribution
Growing & Attractive Industry: Market Growth of Two-Step Distribution 2001 2002 2003 2004 2005 Total Market Revenue 33.8 35.4 38.4 46.1 48.7 Source: Home Channel News, July 2006
Slide 18: Largest in a Highly Fragmented Industry, Ripe for Consolidation
BXC 11.5 WY 10 Boise Cascade 6.9 UFPI 4.4 Huttig 2.3 Other 64.9 Many Small and Medium Sized Players <$250m 100 $250m - $500m 13 $500m - $1bn 6 $1bn-$2.5bn 5 >$2.5bn 3 Number of Competitors By Revenue* Growing & Attractive Industry: Largest in a Highly Fragmented Industry, Ripe for Consolidation High
Slide 19: Investor Book Agenda
BlueLinx Investor Book BlueLinx Overview Industry Dynamics Focused Growth Strategy 2007 Q1 Update Looking Forward
Slide 20: Focused Growth Strategy: Objectives
Focused Growth Strategy: 3 Objectives #1 - Grow Specialty Products to 60+% of Total Sales Partner with manufacturers to introduce new products Grow share in under-represented market segments (e.g. Industrials) Further penetrate geographic markets Pursue supplemental acquisitions #2 - Profitably mana
Slide 21: Specialty Products - Recent Product Launches
Focused Growth Strategy: #1 - Specialty Products - Recent Product Launches #1 - Specialty Products - Recent Product Launches #1 - Specialty Products - Recent Product Launches #1 - Specialty Products - Recent Product Launches #1 - Specialty Products - Recent Product Launches #1 - Specialty Products -
Slide 22: Specialty Products - Market Penetration & Acquisitions
Focused Growth Strategy: #1 - Specialty Products - Market Penetration & Acquisitions Grow Share in Under-Represented Market Segments (e.g. Industrials) Dedicated initiative to grow presence in industrials market (building products used to manufacture items like cabinets, furniture, fixtures, contain
Slide 23: Structural Products - Effective Inventory Management
Focused Growth Strategy: #2 - Structural Products - Effective Inventory Management Focus on improved profitability and reduced risk Tightly manage inventories Increase utilization of consignment and program inventories Expand imports from Europe and other areas offering lowest-cost sourcing Drive OS
Slide 24: Long-Term Share Growth - Total Volume Growth vs. Market
Focused Growth Strategy: #3 - Long-Term Share Growth - Total Volume Growth vs. Market Specialty unit volume will drive share growth over time Long-term objective is to grow specialty unit volume relative to the estimated overall end-use market Maintaining structural product profitability takes prior
Slide 25: Investor Book Agenda
BlueLinx Investor Book BlueLinx Overview Industry Dynamics Focused Growth Strategy 2007 Q1 Update Looking Forward
Slide 26: 2007 Q1 Update: Executing Our Plan In A Cyclical Housing Start Correction
2007 Q1 Update (Vs. Year Ago): Executing Our Plan In A Cyclical Housing Start Correction 1st Quarter Highlights 1st Quarter Highlights Housing Starts Declined 30% from the same period last year Declined 30% from the same period last year Prices Key grades of wood-based structural products down 26% f
Slide 27: 2007 Q1 Update: Focus On Expanding Specialty Product Business
2007 Q1 Update: Focus On Expanding Specialty Product Business Q1 '05 Q2 '05 Q3 '05 Q4 '05 Q1 '06 Q2 '06 Q3 '06 Q4 '06 Structural 0.042 0.066 9.0000000013148E-03 0.002 -0.008 -0.113 -0.17 -0.183 Specialty 0.017 0.005 0.058 0.127 0.149 0.096000000013148 -0.039 -0.154 End-Use Markets 0.039 0.032 0.039
Slide 28: Investor Book Agenda
BlueLinx Investor Book BlueLinx Overview Industry Dynamics Focused Growth Strategy 2007 Q1 Update Looking Forward
Slide 29: Looking Forward: Go-Forward Initiatives
Looking Forward: Go-Forward Initiatives Expand relationships with existing and new specialty product vendors who recognize the BlueLinx value proposition Continue and improve disciplined inventory management to help mitigate price volatility impact on structural products Target growing accounts that
Slide 30: Appendix
Appendix TOPIC PAGE Revenues by Quarter 31 Unit Volume Growth by Quarter 32 Market Growth by Quarter 33 Gross Margin by Quarter 34 Profit and Loss Statement by Quarter 35 Inventory by Quarter 36 Gross Margin % Analysis 37 Capital Structure Position 38
Slide 31: Unit Volume Growth By Quarter
BlueLinx Holdings Inc. Unit Volume Growth By Quarter Unit Volume Growth By Quarter Unit Volume Growth By Quarter
Slide 32: Market Growth By Quarter
BlueLinx Holdings Inc. Market Growth By Quarter Source: Data from Resource Information Systems, Inc., or RISI, updated as of December 2006, weighted using management's estimates. Source: Data from Resource Information Systems, Inc., or RISI, updated as of December 2006, weighted using management's e
Slide 33: Gross Margin by Quarter
BlueLinx Holdings Inc. Gross Margin by Quarter Gross Margin by Quarter Gross Margin by Quarter
Slide 34: Profit and Loss Statement by Quarter
BlueLinx Holdings Inc. Profit and Loss Statement by Quarter Profit and Loss Statement by Quarter Profit and Loss Statement by Quarter
Slide 35: Inventory by Quarter
BlueLinx Holdings Inc. Inventory by Quarter Inventory by Quarter Inventory by Quarter
Slide 36: Gross Margin % Analysis
BlueLinx Holdings Inc. Gross Margin % Analysis Gross Margin % Analysis Gross Margin % Analysis
Slide 37: Capital Structure Position
BlueLinx Holdings Inc. Capital Structure Position Key Metrics Debt as % of total capital as of 3/31/07 77% Revolver excess availability as of 3/31/07 $294 mln Average interest rate YTD 3/31/07 7.7% Interest expense - % of sales YTD 3/31/07 1.1% 2006 Accomplishments Reduced projected annual interest