BlueLinx (BXC) Q4 2020 earnings summary

Executive summary

• Record 4Q20 and FY20 results, with higher commodity wood prices, specialty margin expansion and improved execution supporting earnings growth.

• FY20 bank debt fell $142M, while net leverage improved to 3.5x from 9.2x YoY and cash plus facility availability reached $184M.

Financial highlights

• 4Q20 net sales rose 41% to $865M; FY20 sales rose 17% to $3.097B.

• 4Q20 net income was $20M, or $2.04/share, versus a $10M loss; FY20 net income was $81M, or $8.55/share, versus an $18M loss.

• 4Q20 gross profit increased 49% to $124M and Adjusted EBITDA increased 255% to $39M; FY20 gross profit rose 34% to $478M and Adjusted EBITDA rose 139% to $170M.

• 4Q20 operating margin was 3.5%, up 310 bps YoY; FY20 operating margin was 4.6%, up 330 bps.

Outlook and guidance

• 2021 single-family housing starts were expected to grow at a high-single-digit annual rate; home prices were anticipated to grow at a high-single-digit rate in 2021 and 2022.

• Strong residential demand and accelerating repair-and-remodel activity were expected to support demand into 2021, with near-term commodity price uncertainty amid supply-demand imbalances.

• Management priorities include organic sales growth, margin expansion, efficiency, working-capital discipline and continued net-leverage reduction.