Form 8-K BlueLinx Holdings Inc. For: Aug 13
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported): August 13, 2015
BLUELINX HOLDINGS INC.
(Exact name of registrant specified in its charter)
Delaware | 001-32383 | 77-0627356 |
(State or other | (Commission | (I.R.S. Employer |
jurisdiction of incorporation) | File Number) | Identification No.) |
4300 Wildwood Parkway, Atlanta, Georgia | 30339 |
(Address of principal executive offices) | (Zip Code) |
Registrant's telephone number, including area code: (770) 953-7000
Not applicable
(Former name or former address, if changed since last report.)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):
¨ | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
¨ | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
¨ | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
¨ | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
Item 2.02 Results of Operations and Financial Condition
On August 13, 2015, BlueLinx Holdings Inc. (“BlueLinx” or “the Company”) issued a press release announcing its financial results for the fiscal second quarter ended July 4, 2015. A copy of BlueLinx’ press release is attached hereto as Exhibit 99.1 and incorporated herein by reference.
On August 13, 2015, as previously announced, BlueLinx will hold a teleconference and audio webcast to discuss its financial results from the fiscal second quarter ended July 4, 2015. The webcast will be archived and can be accessed via BlueLinx’ website at www.BlueLinxCo.com. Additionally, BlueLinx will post slides at its website, under the investor relations page, which will be referenced during the audio webcast. These slides are furnished as Exhibit 99.2 hereto. All information on the slides and in the webcast is presented as of August 13, 2015, and BlueLinx does not assume any obligation to update such information in the future.
To supplement GAAP financial information, we may use adjusted measures of operating results which are non-GAAP measures. This non-GAAP adjusted financial information is provided as additional information for investors. These adjusted results exclude certain costs, expenses, gains and losses, and we believe their exclusion can enhance an overall understanding of our past financial performance and also our prospects for the future. These adjustments to our GAAP results are made with the intent of providing both management and investors a more complete understanding of our operating performance by excluding non-recurring, infrequent or other non-cash charges that are not believed to be material to the ongoing performance of our business. The presentation of this additional information is not meant to be considered in isolation or as a substitute for GAAP measures of net earnings, diluted earnings per share or net cash provided by (used in) operating activities prepared in accordance with generally accepted accounting principles in the United States.
The information included in this Item 2.02, as well as Exhibits 99.1 and 99.2, shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, nor shall it be deemed incorporated by reference in any filing under the Securities Act of 1933.
Item 9.01 Financial Statements and Exhibits
(d) Exhibits
Exhibit No. | Description | |
99.1 | Press release, dated August 13, 2015, reporting financial results for the fiscal second quarter ended July 4, 2015 | |
99.2 | Webcast conference call slides used during webcast conference call on August 13, 2015 | |
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
BlueLinx Holdings Inc. | |||
(Registrant) | |||
Dated: August 13, 2015 | By: | /s/ Susan C. O’Farrell | |
Susan C. O’Farrell | |||
Senior Vice President, Chief Financial Officer, Treasurer, and Principal Accounting Officer | |||
EXHIBIT INDEX
Exhibit No. | Description | |
99.1 | Press release, dated August 13, 2015, reporting financial results for the fiscal second quarter ended July 4, 2015 | |
99.2 | Webcast conference call slides used during webcast conference call on August 13, 2015 | |
Exhibit 99.1
4300 Wildwood Parkway
Atlanta, GA 30339
1-888-502-BLUE
www.BlueLinxCo.com
BlueLinx Contacts: | ||
Susan O’Farrell, SVP, Treasurer & CFO | Investor Relations: | |
BlueLinx Holdings Inc. | Caroline Lowden, Director Finance | |
(770) 953-7000 | (770) 953-7522 | |
FOR IMMEDIATE RELEASE
BLUELINX ANNOUNCES SECOND-QUARTER RESULTS
- Net Income of $2.9 million -
- Adjusted EBITDA of $9.8 million -
ATLANTA - August 13, 2015 - BlueLinx Holdings Inc. (NYSE: BXC), a leading distributor of building products in North America, today reported financial results for the second quarter ended July 4, 2015.
Second Quarter Financial Highlights
• | Net income of $2.9 million, or $0.03 per diluted share |
• | Adjusted EBITDA of $9.8 million |
• | Revenue of $515.7 million |
• | Selling, general, and administrative expenses down $4.3 million, or 7.7% compared to second quarter 2014 |
• | Excess availability of $65.0 million as of July 4, 2015, an increase of $5 million over year-end 2014 |
“Our team remains focused on outstanding customer service, top line growth, margin and cost efficiency as we execute our operational initiatives. While the second quarter was relatively flat to our second quarter in 2014, we saw improvement in June following a particularly wet April and May, and we strive to keep that momentum going for the remainder of the year," said Mitch Lewis, President and Chief Executive Officer.
Susan O’Farrell, Senior Vice President and Chief Financial Officer added, “We continue to explore refinancing options as we carefully weigh the timing of our refinancing efforts against the pre-payment penalty of our existing mortgage, which is approximately $1.0 million per month until December 2015.”
Second Quarter Results Compared to Prior Year Period
The Company recorded net income of $2.9 million, or $0.03 per diluted share, in the fiscal second quarter 2015 versus net income in the fiscal second quarter 2014 of $3.2 million, or $0.04 per diluted share, which included a $5.0 million gain on the sale of property.
Adjusted EBITDA for the fiscal second quarter 2015 of $9.8 million versus Adjusted EBITDA of $10.6 million for the same period a year ago.
Gross profit in fiscal second quarter 2015 was $60.0 million, versus $62.0 million in fiscal second quarter 2014. Overall, gross margins were impacted by the decline in unit volumes that occurred in fiscal second quarter 2015.
1
Revenues for the fiscal second quarter ended July 4, 2015, were $515.7 million, compared to $531.5 million in the fiscal second quarter ended July 5, 2014. Overall, revenue was significantly impacted by structural price decreases of 6.5%, which were partially offset by a structural unit volume increase of 0.9%, primarily in the lumber product category.
Liquidity
As of July 4, 2015, the Company had $65.0 million of excess availability under its asset-based revolving credit facilities.
Conference Call
BlueLinx will host a conference call today at 10:00 a.m. Eastern Time, accompanied by a supporting slide presentation. Investors can listen to the conference call and view the accompanying slide presentation by going to the BlueLinx web site, www.BlueLinxCo.com, and selecting the conference link on the Investor Relations page. Investors will be able to access an archived recording of the conference call for one week by calling 404-537-3406, Conference ID# 57441061. The recording will be available two hours after the conference call has concluded. Investors also can access a recording of this call on the BlueLinx website, where a replay of the webcast will be available for 90 days.
Use of Non-GAAP Measures
BlueLinx reports its financial results in accordance with accounting principles generally accepted in the U.S. (“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.
Adjusted EBITDA is a non-GAAP measure that management uses to evaluate the performance of the Company. Adjusted EBITDA, as we define it, is an amount equal to net income (loss) plus interest expense and related items, income taxes, stock compensation, depreciation and amortization, further adjusted to exclude other non-cash items and certain other adjustments. Adjusted EBITDA is presented herein because we believe it is a useful supplement to cash flow from operations in understanding cash flows generated from operations that are available for debt service (interest and principal payments) and further investment in acquisitions. However, Adjusted EBITDA is not a presentation made in accordance with GAAP, and is not intended to present a superior measure of the financial condition from those determined under GAAP.
About BlueLinx Holdings Inc.
BlueLinx Holdings Inc., operating through its wholly owned subsidiary BlueLinx Corporation, is a leading distributor of building products in North America. The Company is headquartered in Atlanta, Georgia and operates its distribution business through its network of 48 distribution centers. BlueLinx is traded on the New York Stock Exchange under the symbol BXC. Additional information about BlueLinx can be found on its website at www.BlueLinxCo.com.
Forward-looking Statements
This press release includes “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995, including statements relating to our ability to return to profitability, and our guidance regarding anticipated financial results. All of these forward-looking statements are based on estimates and assumptions made by our management that, although believed by BlueLinx to be reasonable, are inherently uncertain. Forward-looking statements involve risks and uncertainties, including, but not limited to, economic, competitive, governmental and technological factors outside of BlueLinx’ control that may cause its business, strategy or actual results to differ materially from the forward-looking statements. These risks and uncertainties may include, among other things: changes in the prices, supply and/or demand for products that it distributes, general economic and business conditions in the United States; the activities of competitors; changes in significant operating expenses; changes in the availability of capital and interest rates; adverse weather patterns or conditions; acts of cyber intrusion; variations in the performance of the financial markets, including the credit markets; and other factors described in the “Risk Factors” section in the Company’s Annual Report on Form 10-K for the year ended January 3, 2015, and in its periodic reports filed with the Securities and Exchange Commission from time to time. Given these risks and uncertainties, you are cautioned not to place undue reliance on forward-looking statements. BlueLinx undertakes no obligation to publicly update or revise any forward-looking statement as a result of new information, future events, and changes in expectation or otherwise, except as required by law.
2
BLUELINX HOLDINGS INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except per share data)
(unaudited)
Three Months Ended | Six Months Ended | ||||||||||||||
July 4, 2015 | July 5, 2014 | July 4, 2015 | July 5, 2014 | ||||||||||||
Net sales | $ | 515,656 | $ | 531,494 | $ | 970,605 | $ | 975,438 | |||||||
Cost of sales | 455,673 | 469,461 | 860,426 | 860,729 | |||||||||||
Gross profit | 59,983 | 62,033 | 110,179 | 114,709 | |||||||||||
Operating expenses: | |||||||||||||||
Selling, general, and administrative | 50,675 | 54,925 | 100,711 | 107,122 | |||||||||||
Gains from sales of property | — | (5,041 | ) | — | (5,251 | ) | |||||||||
Depreciation and amortization | 2,438 | 2,421 | 4,716 | 4,773 | |||||||||||
Total operating expenses | 53,113 | 52,305 | 105,427 | 106,644 | |||||||||||
Net operating income | 6,870 | 9,728 | 4,752 | 8,065 | |||||||||||
Non-operating (income) expenses: | |||||||||||||||
Interest expense | 6,690 | 6,859 | 13,243 | 13,313 | |||||||||||
Other (income) expense, net | 29 | (40 | ) | 387 | 120 | ||||||||||
Income (loss) before provision for (benefit from) income taxes | 151 | 2,909 | (8,878 | ) | (5,368 | ) | |||||||||
Provision for (benefit from) income taxes | (2,719 | ) | (327 | ) | (2,803 | ) | 4 | ||||||||
Net income (loss) | $ | 2,870 | $ | 3,236 | $ | (6,075 | ) | $ | (5,372 | ) | |||||
Weighted average common shares: | |||||||||||||||
Basic | 87,399 | 85,874 | 87,282 | 85,531 | |||||||||||
Diluted | 87,862 | 86,472 | 87,282 | 85,531 | |||||||||||
Basic and diluted net income (loss) per share applicable to common stock | $ | 0.03 | $ | 0.04 | $ | (0.07 | ) | $ | (0.06 | ) | |||||
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BLUELINX HOLDINGS INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands)
(unaudited)
July 4, 2015 | January 3, 2015 | ||||||
Assets: | |||||||
Current assets: | |||||||
Cash | $ | 2,844 | $ | 4,522 | |||
Receivables, net of allowances of $3.6 million and $3.1 million, respectively | 197,345 | 144,537 | |||||
Inventories, net | 276,362 | 242,546 | |||||
Other current assets | 31,680 | 23,289 | |||||
Total current assets | 508,231 | 414,894 | |||||
Property, plant, and equipment: | |||||||
Land and land improvements | 41,219 | 41,095 | |||||
Buildings | 90,610 | 90,161 | |||||
Machinery and equipment | 79,431 | 77,279 | |||||
Construction in progress | 594 | 1,188 | |||||
Property, plant, and equipment, at cost | 211,854 | 209,723 | |||||
Accumulated depreciation | (107,455 | ) | (104,456 | ) | |||
Property, plant, and equipment, net | 104,399 | 105,267 | |||||
Non-current deferred income tax assets, net | 501 | 501 | |||||
Other non-current assets | 10,435 | 18,320 | |||||
Total assets | $ | 623,566 | $ | 538,982 | |||
Liabilities: | |||||||
Current liabilities: | |||||||
Accounts payable | $ | 115,058 | $ | 67,291 | |||
Bank overdrafts | 11,852 | 27,280 | |||||
Accrued compensation | 4,316 | 5,643 | |||||
Current maturities of long-term debt | 203,142 | 2,679 | |||||
Deferred income taxes, net | 518 | 518 | |||||
Other current liabilities | 13,772 | 13,831 | |||||
Total current liabilities | 348,658 | 117,242 | |||||
Non-current liabilities: | |||||||
Long-term debt | 264,113 | 403,274 | |||||
Pension benefit obligation | 31,956 | 41,734 | |||||
Other non-current liabilities | 13,394 | 12,758 | |||||
Total liabilities | 658,121 | 575,008 | |||||
Stockholders’ deficit: | |||||||
Common Stock, $0.01 par value, Authorized - 200,000,000 shares; Issued - 89,521,404 and 88,748,638 shares, respectively | 896 | 888 | |||||
Additional paid-in capital | 254,380 | 253,051 | |||||
Accumulated other comprehensive loss | (28,217 | ) | (34,425 | ) | |||
Accumulated stockholders' deficit | (261,614 | ) | (255,540 | ) | |||
Total stockholders’ deficit | (34,555 | ) | (36,026 | ) | |||
Total liabilities and stockholders’ deficit | $ | 623,566 | $ | 538,982 | |||
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BLUELINX HOLDINGS INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)
(unaudited)
Six Months Ended July 4, 2015 | Six Months Ended July 5, 2014 | ||||||
Cash flows from operating activities: | |||||||
Net loss | $ | (6,075 | ) | $ | (5,372 | ) | |
Adjustments to reconcile net loss to net cash used in operations: | |||||||
Depreciation and amortization | 4,716 | 4,773 | |||||
Amortization of debt discount and issuance costs | 1,506 | 1,689 | |||||
Gains from sales of property | — | (5,251 | ) | ||||
Severance charges | 853 | 1,276 | |||||
Intraperiod income tax allocation related to pension plan | (1,134 | ) | (150 | ) | |||
Pension expense | 476 | 450 | |||||
Share-based compensation expense | 1,181 | 2,873 | |||||
Other | (643 | ) | 232 | ||||
Changes in operating assets and liabilities: | |||||||
Receivables, net | (52,808 | ) | (55,209 | ) | |||
Inventories, net | (33,816 | ) | (44,064 | ) | |||
Accounts payable | 47,767 | 39,620 | |||||
Restructuring liability | (519 | ) | (1,597 | ) | |||
Restricted cash related to insurance and other | (803 | ) | (701 | ) | |||
Prepaid assets | (1,650 | ) | (7,288 | ) | |||
Accrued compensation and other assets and liabilities | (5,298 | ) | 390 | ||||
Net cash used in operating activities | (46,247 | ) | (68,329 | ) | |||
Cash flows from investing activities: | |||||||
Property, plant, and equipment investments | (1,135 | ) | (1,253 | ) | |||
Proceeds from sale of assets | 436 | 7,213 | |||||
Net cash provided by (used in) investing activities | (699 | ) | 5,960 | ||||
Cash flows from financing activities: | |||||||
Repurchase of shares to satisfy employee tax withholdings | (261 | ) | (894 | ) | |||
Repayments on revolving credit facilities | (187,394 | ) | (216,746 | ) | |||
Borrowings from revolving credit facilities | 256,647 | 290,023 | |||||
Principal payments on mortgage | (8,534 | ) | (8,262 | ) | |||
Payments on capital lease obligations | (1,614 | ) | (1,176 | ) | |||
Increase (decrease) in bank overdrafts | (15,428 | ) | 3,202 | ||||
Decrease (increase) in restricted cash related to the mortgage | 1,886 | (1,019 | ) | ||||
Debt financing costs | (34 | ) | — | ||||
Payments on stock offering, less expenses paid | — | (98 | ) | ||||
Net cash provided by financing activities | 45,268 | 65,030 | |||||
Increase (decrease) in cash | (1,678 | ) | 2,661 | ||||
Cash balance, beginning of period | 4,522 | 5,034 | |||||
Cash balance, end of period | $ | 2,844 | $ | 7,695 | |||
Supplemental Cash Flow Information | |||||||
Noncash investing and financing transactions: | |||||||
Equipment under capital leases | $ | 2,029 | $ | 1,107 | |||
Debt financing costs | $ | 1,252 | $ | 201 | |||
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BLUELINX HOLDINGS INC.
RECONCILIATION OF NET INCOME (LOSS) TO NON-GAAP ADJUSTED EBITDA
(In thousands)
(unaudited)
Quarter Ended | Six Months Ended | ||||||||||||||
July 4, 2015 | July 5, 2014 | July 4, 2015 | July 5, 2014 | ||||||||||||
(Dollars in thousands) (unaudited) | |||||||||||||||
Net income (loss) | $ | 2,870 | $ | 3,236 | $ | (6,075 | ) | $ | (5,372 | ) | |||||
Adjustments: | |||||||||||||||
Depreciation and amortization | 2,438 | 2,421 | 4,716 | 4,773 | |||||||||||
Interest expense | 6,690 | 6,859 | 13,243 | 13,313 | |||||||||||
Provision for (benefit from) income taxes | (2,719 | ) | (327 | ) | (2,803 | ) | 4 | ||||||||
Gain from the sale of properties | — | (5,041 | ) | — | (5,251 | ) | |||||||||
Share-based compensation expense, excluding restructuring | 519 | 637 | 1,135 | 1,327 | |||||||||||
Restructuring, severance, debt fees, and other | (36 | ) | 2,821 | (65 | ) | 2,821 | |||||||||
Adjusted EBITDA | $ | 9,762 | $ | 10,606 | $ | 10,151 | $ | 11,615 | |||||||
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BlueLinx Quarterly Review 2nd Quarter 2015
2 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, although believed by us to be reasonable, are inherently uncertain. Forward-looking statements involve risks and uncertainties, including, but not limited to, economic, competitive, governmental and technological factors outside of our control, that may cause our business, strategy or actual results to differ materially from the forward-looking statements. These risks and uncertainties may include, among other things: changes in the prices, supply, and/or demand for products which we distribute; general economic and business conditions in the United States; the activities of competitors; changes in significant operating expenses; changes in the availability of capital and interest rates; adverse weather patterns or conditions; acts of cyber intrusion; variations in the performance of the financial markets, including the credit markets; and other factors described in the "Risk Factors" section in our Annual Report on Form 10-K for the fiscal year ended January 3, 2015, and in our other periodic reports filed with the SEC, including the update to the Risk Factors described in Item 1A. in the 10-Q for the quarter ended July 4, 2015. In addition, the statements in this presentation are made as of August 13, 2015. We undertake no obligation to update any of the forward-looking statements made herein, whether as a result of new information, future events, changes in expectation or otherwise. These forward-looking statements should not be relied upon as representing our views as of any date subsequent to August 13, 2015. Use of Non-GAAP and Adjusted Financial Information - To supplement GAAP financial information, we use adjusted measures of operating results which are non-GAAP measures. This non-GAAP adjusted financial information is provided as additional information for investors. These adjusted results exclude certain costs, expenses, gains and losses, and we believe their exclusion can enhance an overall understanding of our past financial performance and also our prospects for the future. These adjustments to our GAAP results are made with the intent of providing both management and investors a more complete understanding of our operating performance by excluding non-recurring, infrequent or other non-cash charges that are not believed to be material to the ongoing performance of our business. The presentation of this additional information is not meant to be considered in isolation or as a substitute for GAAP measures of net earnings, diluted earnings per share or net cash provided by (used in) operating activities prepared in accordance with generally accepted accounting principles in the United States. BlueLinx Holdings Inc.
3 Mitch Lewis Chief Executive Officer
4 Executive Summary – Second Quarter 2015 • Net income of $2.9 million; $0.03 basic and diluted earnings per share • Adjusted EBITDA of $9.8 million • Revenue of $516 million • Selling, general and administrative expenses down $4.3 million, or 7.7% from second quarter 2014
5 Price and Volume Second Quarter 2015
6 Quarterly Revenues (1) Excludes Service Revenue and accounting adjustments.
7 Key Emphasis • Focus on opportunities in the local markets • Inventory management and planning improvements • Supplier engagement to create mutual success • Continue margin enhancement activities • Closely manage working capital and liquidity Key Emphasis for BlueLinx
8 Susan O’Farrell Chief Financial Officer and Treasurer
9 2015 2014 2015 2014 in millions Q2 Q2 YTD YTD Net sales $ 515.7 $ 531.5 $ 970.6 $ 975.4 Gross profit $ 60.0 $ 62.0 $ 110.2 $ 114.7 Gross margin 11.63 % 11.67 % 11.35 % 11.76 % Revenue and Gross Margins • Sales ◦ Down $16.0 million, or 3.0%, compared to 2Q 2014 ◦ Impacted by structural volume increase of 0.9%, primarily in lumber, offset by structural price decreases of 6.5% • Gross margin relatively flat with low commodity prices for structural products ◦ Specialty margins negatively impacted by roofing price decline
10 2015 2014 2015 2014 Q2 Q2 YTD YTD Selling, general, and administrative $ 50.7 $ 54.9 $ 100.7 $ 107.1 Gains from sales of property — (5.0 ) — (5.3 ) Depreciation and amortization 2.4 2.4 4.7 4.8 Total operating expenses $ 53.1 $ 52.3 $ 105.4 $ 106.6 Operating Expenses Selling, General & Administrative expenses down by $4.3 million(1), or 7.7% due primarily to •Lower fuel costs •Lower restructuring costs •Lower sales-related costs (1) Immaterial rounding adjustments and differences may exist between slides, press releases, and previously issued presentations.
11 Debt Structure • Asset Based Revolving Credit Facilities • U.S. revolving credit facility $447.5 million matures April 2017 • FILO • Tranche A loan of $20.0 million final maturity of June 2016 • Mortgage • Assessing opportunities to unlock the value of our mortgage • Weighing timing with pre-payment penalty of approximately $1.0 million per month through December 2015 • Property valuation at approximately $320 million in 2006 • $169.2 million principal remaining ◦ $4.2 million cash trap also available to pay principal
12 Cash Flows Year-to-Date Operating Cash Usage Improved $22.1 million $68.3 Q2 2015 Q2 2014 YTD 2015 YTD 2014 in millions - unaudited (1) Net cash used in operating activities $ (8.7 ) $ (22.2 ) $ (46.2 ) $ (68.3 ) Net cash (used in) provided by investing activities (0.4 ) 6.4 (0.7 ) 6.0 Net cash provided by financing activities 5.9 15.9 45.3 65.0 Increase (decrease) in cash (3.2 ) 0.1 (1.7 ) 2.7 Cash balance, beginning of period 6.0 7.6 4.5 5.0 Cash balance, end of period $ 2.8 $ 7.7 $ 2.8 $ 7.7 $46.2 (1) Immaterial rounding adjustments and differences may exist between slides, press releases, and previously issued presentations.
13 Cash Cycle Days (1) Working capital as defined by A/R plus inventory less A/P & bank overdrafts • Trailing twelve months cash cycle at 65 days • Trailing twelve months' working capital(1) was down $4 million
14 TOPIC PAGE Statements of Operations 15 Adjusted EBITDA 16 Revenue and Unit Volume 17 Gross Profit and Margin 18 Capital Structure 19 Appendix
15 Statements of Operations $ in millions except per share amounts 2015 2014 2015 2014 Q2 Q2 YTD YTD Net sales $ 515.7 $ 531.5 $ 970.6 $ 975.4 Cost of sales 455.7 469.5 860.4 860.7 Gross profit 60.0 62.0 110.2 114.7 Gross margin % 11.6% 11.7% 11.4% 11.8% Operating expenses: Selling, general, and administrative 50.7 54.9 100.7 107.1 Gains from sales of property — (5.0 ) — (5.3 ) Depreciation and amortization 2.4 2.4 4.7 4.8 Total operating expenses 53.1 52.3 105.4 106.6 Net operating income 6.9 9.7 4.8 8.1 Non-operating (income) expenses: Interest expense 6.7 6.9 13.2 13.3 Other (income) expense, net — — 0.4 0.1 Income (loss) before provision for (benefit from) income taxes 0.2 2.9 (8.9 ) (5.4 ) Provision for (benefit from) income taxes (2.7 ) (0.3 ) (2.8 ) — Net income (loss) $ 2.9 $ 3.2 $ (6.1 ) $ (5.4 ) Basic and diluted net income (loss) per share applicable to common stock $ 0.03 $ 0.04 (0.1 ) (0.1 )
16 Adjusted EBITDA $ in millions 2015 2014 2015 2014 Q2 Q2 YTD YTD Net income (loss) $ 2.9 $ 3.2 $ (6.1 ) $ (5.4 ) Adjustments: Depreciation and amortization 2.4 2.4 4.7 4.8 Interest expense 6.7 6.9 13.2 13.3 Provision for (benefit from) income taxes (2.7 ) (0.3 ) (2.8 ) — Gain from the sale of properties — (5.0 ) — (5.3 ) Share-based compensation expense, excluding restructuring 0.5 0.6 1.1 1.3 Restructuring, severance, debt fees, and other — 2.8 (0.1 ) 2.8 Adjusted EBITDA $ 9.8 $ 10.6 $ 10.2 $ 11.6
17 Revenue and Unit Volume Sales $ - in millions 2015 2014 2015 2014 Q1 Q2 Q1 Q2 Q3 Q4 YTD YTD Specialty $ 273.6 $ 313.0 $ 264.0 $ 316.6 $ 324.4 $ 263.9 $ 586.6 $ 580.6 Structural 187.7 207.1 185.1 219.3 232.1 195.0 394.8 404.4 Other (1) (6.4 ) (4.4 ) (5.2 ) (4.4 ) (6.7 ) (4.8 ) (10.8 ) (9.6 ) Total $ 454.9 $ 515.7 $ 443.9 $ 531.5 $ 549.8 $ 454.1 $ 970.6 $ 975.4 Sales Mix % Specialty 59.3 % 60.2 % 58.8 % 59.1 % 58.3 % 57.5 % 59.8 % 58.9 % Structural 40.7 % 39.8 % 41.2 % 40.9 % 41.7 % 42.5 % 40.2 % 41.1 % Unit Volume Change Specialty 2.6 % (1.3 )% 1.0 % (1.2 )% 4.7 % (4.3 )% 0.5 % (0.2 )% Structural 3.2 % 0.9 % (9.5 )% (11.2 )% (7.5 )% (11.6 )% 2.0 % (10.4 )% Total 2.9 % (0.4 )% (3.8 )% (5.7 )% (0.6 )% (7.5 )% 1.1 % (4.8 )% (1) Includes cash discounts, service revenue, Canadian conversion, and accruals.
18 Gross Profit and Margin Gross Profit (in millions) 2015 2014 2015 2014 Q2 Q2 YTD YTD Structural products $ 17 $ 18 $ 30 $ 33 Specialty products 42 44 78 78 Other (1) 1 — 2 4 Total gross profit $ 60 $ 62 $ 110 $ 115 Gross Margin % Structural products 7.97 % 8.17 % 7.67 % 8.24 % Specialty products 13.57 % 13.81 % 13.29 % 13.44 % Total gross margin % 11.63 % 11.67 % 11.35 % 11.76 % (1) "Other" includes unallocated allowances and discounts.
19 Capital Structure • Asset Based Revolving Credit Facilities • Matures April 2017 • $65.0 million excess availability as of July 4, 2015 • $447.5 million U.S. facility with additional $75.0 million uncommitted accordion facility • LIBOR + 3.5% • $20 million Tranche A loan – final maturity June 2016 • LIBOR + 5.25% • $10 million Canadian facility with additional $5.0 million uncommitted accordion facility • LIBOR or Banker's Acceptance + 2.50% • Mortgage • Due July 2016 • Currently evaluating refinancing options • Book value of real estate $80.2 million as of July 4, 2015 • Appraisal value as of June 2006 of current properties approximately $320 million • Outstanding mortgage of $169.2 million as of July 4, 2015 ◦ $4.2 million cash trap further reduces principal to $165.0 million ◦ Fixed 6.35% interest rate
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