Document and Entity Information
Document and Entity Information - shares | 3 Months Ended | |
Mar. 31, 2018 | May 03, 2018 | |
Document and Entity Information [Abstract] | ||
Entity Registrant Name | BlueLinx Holdings Inc. | |
Entity Central Index Key | 1,301,787 | |
Trading Symbol | bxc | |
Current Fiscal Year Date | --12-29 | |
Entity Filer Category | Smaller Reporting Company | |
Entity Common Stock, Shares Outstanding | 9,209,913 | |
Document Type | 10-Q | |
Document Period End Date | Mar. 31, 2018 | |
Amendment Flag | false | |
Document Fiscal Year Focus | 2,018 | |
Document Fiscal Period Focus | Q1 |
CONDENSED CONSOLIDATED STATEMEN
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE (LOSS) INCOME - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2018 | Apr. 01, 2017 | |
Income Statement [Abstract] | ||
Net sales | $ 437,487 | $ 428,608 |
Cost of sales | 382,162 | 374,174 |
Gross profit | 55,325 | 54,434 |
Operating expenses (income): | ||
Selling, general, and administrative | 59,240 | 53,051 |
Gains from sales of property | 0 | (6,700) |
Depreciation and amortization | 2,665 | 2,363 |
Total operating expenses | 61,905 | 48,714 |
Operating (loss) income | (6,580) | 5,720 |
Non-operating expenses (income): | ||
Interest expense | 8,480 | 5,242 |
Other income, net | (94) | (139) |
(Loss) income before (benefit from) provision for income taxes | (14,966) | 617 |
(Benefit from) provision for income taxes | (1,539) | 33 |
Net (loss) income | $ (13,427) | $ 584 |
Basic (loss) earnings per share (in dollars per share) | $ (1.47) | $ 0.07 |
Diluted (loss) earnings per share (in dollars per share) | $ (1.47) | $ 0.06 |
Comprehensive (loss) income: | ||
Net (loss) income | $ (13,427) | $ 584 |
Other comprehensive income: | ||
Foreign currency translation, net of tax | 6 | 12 |
Amortization of unrecognized pension loss, net of tax | 203 | 268 |
Total other comprehensive income | 209 | 280 |
Comprehensive (loss) income | $ (13,218) | $ 864 |
CONDENSED CONSOLIDATED BALANCE
CONDENSED CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands | Mar. 31, 2018 | Dec. 30, 2017 |
Current assets: | ||
Cash | $ 7,069 | $ 4,696 |
Receivables, less allowances of $3,140 and $2,761, respectively | 162,904 | 134,072 |
Inventories, net | 228,849 | 187,512 |
Other current assets | 18,911 | 17,124 |
Total current assets | 417,733 | 343,404 |
Property and equipment: | ||
Land and land improvements | 22,252 | 30,802 |
Buildings | 153,225 | 84,781 |
Machinery and equipment | 70,787 | 70,596 |
Construction in progress | 569 | 570 |
Property and equipment, at cost | 246,833 | 186,749 |
Accumulated depreciation | (93,559) | (102,977) |
Property and equipment, net | 153,274 | 83,772 |
Deferred tax asset | 58,692 | 53,853 |
Other non-current assets | 14,796 | 13,066 |
Total assets | 644,495 | 494,095 |
Current liabilities: | ||
Accounts payable | 107,097 | 70,623 |
Bank overdrafts | 21,322 | 21,593 |
Accrued compensation | 4,815 | 9,229 |
Current liabilities - capital leases and real estate deferred gain | 7,478 | 5,388 |
Other current liabilities | 18,102 | 10,772 |
Total current liabilities | 158,814 | 117,605 |
Non-current liabilities: | ||
Long-term debt, net of discount of $2,952 and $3,792, respectively | 220,384 | 276,677 |
Non-current liabilities - capital leases and real estate deferred gain | 200,007 | 24,492 |
Pension benefit obligation | 29,100 | 30,360 |
Other non-current liabilities | 14,094 | 9,959 |
Total liabilities | 622,399 | 459,093 |
Commitments and Contingencies | ||
STOCKHOLDERS’ EQUITY: | ||
Common Stock, $0.01 par value, Authorized - 20,000,000 shares, Issued and Outstanding - 9,209,913 and 9,100,923, respectively | 92 | 91 |
Additional paid-in capital | 259,906 | 259,588 |
Accumulated other comprehensive loss | (36,298) | (36,507) |
Accumulated stockholders’ deficit | (201,604) | (188,170) |
Total stockholders’ equity | 22,096 | 35,002 |
Total liabilities and stockholders’ equity | $ 644,495 | $ 494,095 |
CONDENSED CONSOLIDATED BALANCE4
CONDENSED CONSOLIDATED BALANCE SHEETS (Parentheticals) - USD ($) $ in Thousands | Mar. 31, 2018 | Dec. 30, 2017 |
Statement of Financial Position [Abstract] | ||
Allowance for doubtful accounts receivable | $ 3,140 | $ 2,761 |
Debt discount, noncurrent | $ 2,952 | $ 3,792 |
Common stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Common stock, shares authorized (in shares) | 20,000,000 | 20,000,000 |
Common stock, shares issued (in shares) | 9,209,913 | 9,100,923 |
Common stock, shares outstanding (in shares) | 9,209,913 | 9,100,923 |
CONDENSED CONSOLIDATED STATEME5
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2018 | Apr. 01, 2017 | |
Statement of Cash Flows [Abstract] | ||
Net cash used in operating activities | $ (45,003) | $ (39,860) |
Cash flows from investing activities: | ||
Property and equipment investments | (332) | (160) |
Proceeds from sale of assets | 107,879 | 27,427 |
Net cash provided by investing activities | 107,547 | 27,267 |
Cash flows from financing activities: | ||
Repurchase of shares to satisfy employee tax withholdings | (1,759) | (147) |
Repayments on revolving credit facilities | (78,789) | (70,938) |
Borrowings from revolving credit facilities | 119,441 | 115,553 |
Principal payments on mortgage | (97,847) | (27,388) |
Decrease in bank overdrafts | (271) | (3,342) |
Cash released from escrow related to the mortgage | 0 | (1,090) |
Other, net | (946) | (410) |
Net cash (used in) provided by financing activities | (60,171) | 12,238 |
Increase (decrease) in cash | 2,373 | (355) |
Cash, beginning of period | 4,696 | 5,540 |
Cash, end of period | 7,069 | 5,185 |
Noncash investing and financing transactions: | ||
Additions of real property under capital lease | $ 95,100 | $ 8,000 |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 3 Months Ended |
Mar. 31, 2018 | |
Accounting Policies [Abstract] | |
Summary of Significant Accounting Policies | Summary of Significant Accounting Policies Basis of Presentation The accompanying unaudited Condensed Consolidated Financial Statements include the accounts of BlueLinx Holdings Inc. and its wholly owned subsidiaries (the “Company”). These financial statements have been prepared in accordance with the instructions to Form 10-Q and do not include all of the information and footnotes required by accounting principles generally accepted (“GAAP”) in the United States (“U.S.”) for complete financial statements. In the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation have been included. These statements should be read in conjunction with the Consolidated Financial Statements and notes thereto included in the Company’s Annual Report on Form 10-K (the “Annual Report on Form 10-K”) for the year ended December 30, 2017 , as filed with the Securities and Exchange Commission on March 1, 2018. Recently Adopted Accounting Standards Revenue from Contracts with Customers. In 2014, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2014-09, “Revenue from Contracts with Customers (Topic 606) (“ASC 606”).” Under this ASU and subsequently issued amendments, revenue is recognized at the time a good or service is transferred to a customer for the amount of consideration received. Entities may use a full retrospective approach or report the cumulative effect as of the date of adoption. On December 31, 2017, the first day of our fiscal 2018 year, we adopted ASC 606 using the modified retrospective method applied to those contracts which were not completed as of that date. Results for reporting periods beginning after the first day of fiscal 2018 are presented under ASC 606, while prior period amounts are not adjusted and continue to be reported in accordance with our historic accounting under ASC 605. There was no adjustment due to the cumulative impact of adopting ASC 606. See Note 2, “Revenue Recognition,” for more information. Standards Effective in Future Years Leases. In 2016, the FASB issued ASU No. 2016-02, “Leases (Topic 842).” This standard will require leases with durations greater than twelve months to be recognized on the balance sheet and is effective for interim and annual reporting periods beginning after December 15, 2018. We will adopt this standard effective January 1, 2019. We have not completed our assessment, but the adoption of this standard may have a significant impact on our Consolidated Balance Sheets. However, we do not expect the adoption to have a significant impact on the recognition, measurement or presentation of lease expense within the Condensed Consolidated Statements of Operations and Comprehensive (Loss) Income (“income statement”) or the Condensed Consolidated Statements of Cash Flows (“cash flows statement”). Information about our undiscounted future lease payments and the timing of those payments is in Note 13, “Lease Commitments,” in our Annual Report on Form 10-K. Comprehensive Income |
Revenue Recognition
Revenue Recognition | 3 Months Ended |
Mar. 31, 2018 | |
Revenue from Contract with Customer [Abstract] | |
Revenue Recognition | Revenue Recognition We recognize revenue when the following criteria are met: 1) Contract with the customer has been identified; 2) Performance obligations in the contract have been identified; 3) Transaction price has been determined; 4) The transaction price has been allocated to the performance obligations; and 5) Revenue is recognized when (or as) performance obligations are satisfied. Contracts with our customers are generally in the form of our standard terms and conditions of sale. From time to time, we may enter into specific contracts with some of our larger customers, which may affect delivery terms. Performance obligations in our contracts generally consist solely of delivery of goods. For all sales channel types, consisting of warehouse, direct, and reload sales, we typically satisfy our performance obligations upon shipment. Our customer payment terms are typical for our industry, and may vary by the type and location of our customer and the products or services offered. The term between invoicing and when payment is due is not deemed to be significant by us. For certain sales channels and/or products, our standard terms of payment may be as early as ten days. In addition, we provide inventory to certain customers through pre-arranged agreements on a consignment basis. Customer consigned inventory is maintained and stored by certain customers; however, ownership and risk of loss remains with us. When the consigned inventory is sold by the customer, we recognize revenue on a gross basis, and subsequently adjust for trade allowances at month-end. All revenues recognized are net of trade allowances (i.e., rebates), cash discounts, and sales returns. Cash discounts and sales returns are estimated using historical experience. Trade allowances are based on the estimated obligations and historical experience. Adjustments to earnings resulting from revisions to estimates on discounts and returns have been insignificant for each of the reported periods. Certain customers may receive cash-based incentives or credits, which are accounted for as variable consideration. We estimate these amounts based on the expected amount to be provided to customers and reduce revenues recognized. We believe that there will not be significant changes to our estimates of variable consideration. The following table presents our revenues disaggregated by revenue source. Sales and usage-based taxes are excluded from revenues. Quarter Ended March 31, 2018 April 1, 2017 Sales by category (In thousands) Structural products $ 206,397 $ 190,713 Specialty products 231,481 239,119 Other (1) (391 ) (1,224 ) Total net sales $ 437,487 $ 428,608 (1) “Other” includes unallocated allowances and discounts. The following table presents our revenues disaggregated by sales channel. Sales and usage-based taxes are excluded from revenues. Quarter Ended March 31, 2018 April 1, 2017 Sales by category (In thousands) Warehouse $ 333,305 $ 319,431 Direct 82,942 87,511 Reload and service revenue 28,270 28,387 Variable consideration (7,030 ) (6,721 ) Total net sales $ 437,487 $ 428,608 Practical Expedients and Exemptions We generally expense sales commissions when incurred because the amortization period would have been one year or less. These costs are recorded within sales, general, and administrative expense. |
Assets Held for Sale
Assets Held for Sale | 3 Months Ended |
Mar. 31, 2018 | |
Discontinued Operations and Disposal Groups [Abstract] | |
Assets Held for Sale | Assets Held for Sale As of March 31, 2018, we had designated two unused properties as held for sale, due to strategic initiatives, which was unchanged from December 30, 2017 . At the time that these properties were designated as “held for sale,” we ceased recognizing depreciation expense on these assets. As of both March 31, 2018 , and December 30, 2017 , the net book value of total assets held for sale was $0.8 million |
Other Current Liabilities
Other Current Liabilities | 3 Months Ended |
Mar. 31, 2018 | |
Other Liabilities Disclosure [Abstract] | |
Other Current Liabilities | Other Current Liabilities The following table shows the components of other current liabilities: March 31, 2018 December 30, 2017 (2) (In thousands) Employee benefits (1) $ 5,819 $ 2,169 Insurance reserves and retention 4,886 4,070 State income taxes payable 3,298 14 Property, sales, and other non-income taxes payable 3,254 3,226 Accrued interest and other 845 1,293 Total $ 18,102 $ 10,772 (1) As of March 31, 2018, included a $4.4 million increase due to the current portion of cash-settled Stock Appreciation Rights. See Note 7. On December 30, 2017, this balance was comprised substantially of $1.0 million of 401(k) match that was paid in the first quarter of fiscal 2018. (2) |
Revolving Credit Facility and M
Revolving Credit Facility and Mortgage | 3 Months Ended |
Mar. 31, 2018 | |
Debt Disclosure [Abstract] | |
Revolving Credit Facility and Mortgage | Revolving Credit Facility and Mortgage On January 10, 2018, we completed sale-leaseback transactions on four distribution centers (the “Sale-Leaseback Transactions”). The net proceeds received from the Sale-Leaseback Transactions were used to pay the remaining balance of our $97.8 million mortgage, in its entirety, in the first quarter of fiscal 2018. For further information regarding the subsequent accounting treatment of the leases involved in the Sale-Leaseback Transactions, see Note 8. As of March 31, 2018 , we had outstanding borrowings of $223.3 million and excess availability of $70.1 million |
Net Periodic Pension Cost
Net Periodic Pension Cost | 3 Months Ended |
Mar. 31, 2018 | |
Retirement Benefits [Abstract] | |
Net Periodic Pension Cost | Net Periodic Pension Cost The following table shows the components of net periodic pension cost (in thousands): Three Months Ended March 31, 2018 April 1, 2017 Service cost $ 133 $ 183 Interest cost on projected benefit obligation 963 1,179 Expected return on plan assets (1,327 ) (1,584 ) Amortization of unrecognized loss 271 267 Net periodic pension cost $ 40 $ 45 |
Stock Compensation
Stock Compensation | 3 Months Ended |
Mar. 31, 2018 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Stock Compensation | Stock Compensation Cash-Settled Stock Appreciation Rights (“SARs”) During fiscal 2016, we granted certain executives and employees cash-settled SARs. The cash-settled SARs vest on July 16, 2018, unless otherwise specifically amended. On the vesting date, half of any vested value of the cash-settled SARs will become payable within thirty days of the vesting date, and the remainder payable within one year of the vesting date. The exercise price for the cash-settled SARs was amended during the first quarter of fiscal 2018 so that it is based on a 20 -day trading average of the Company’s common stock through the vesting date (rather than as previously stated as on the vesting date), in excess of the $7.00 grant date valuation. As of March 31, 2018, there were 445,000 cash-settled SARs issued and outstanding. On December 30, 2017, we had accrued a total liability of approximately $1.0 million for the cash-settled SARs. On March 31, 2018, we increased the total liability to approximately $9.9 million , based on the assumptions below, which were largely driven by an increase in our stock price. The following table summarizes the assumptions used to compute the current fair value of our cash-settled SARs: March 31, 2018 (1) December 30, 2017 (2) Stock price $ 32.59 $ 9.76 Expected volatility 125.57 % 33.80 % Risk-free interest rate 1.77 % 1.55 % Expected term (in years) 0.29 0.54 Expected dividend yield Not applicable Not applicable (1) Reflects an assumed exercise price based on the 20 -trading day average, as per the amended SARs Agreement. The 20 -day trading average was based on the 20 days prior to the last trading day of the fiscal quarter, inclusive of the last trading day. (2) |
Lease Commitments
Lease Commitments | 3 Months Ended |
Mar. 31, 2018 | |
Leases [Abstract] | |
Leases Commitments | Lease Commitments Capital Leases We have entered into certain long-term, non-cancelable capital leases for real estate, along with certain logistics equipment and vehicles. The real estate leases contain customary extension option periods and annual fixed rent escalations. As of March 31, 2018, the acquisition value and net book value of all assets under capital leases was $126.0 million and $110.2 million , respectively. At March 31, 2018, our total commitments under capital leases recorded in the Consolidated Balance Sheets within “current liabilities - capital leases and real estate deferred gain” and “non-current liabilities - capital leases and real estate deferred gain” were as follows: Principal (1) Interest (In thousands) 2018 $ 1,807 $ 8,728 2019 1,840 11,567 2020 1,501 11,509 2021 127 11,514 2022 (392 ) 11,570 Thereafter 107,452 178,594 Total $ 112,335 $ 233,482 (1) Our principal amounts include negative amortization, including fiscal 2022, which consists solely of negative amortization. Negative amortization occurs for us on some of our real estate leases because of the structure of the lease payments; where the cash payment is applied to both interest and principal and wherein a calculated interest rate results in interest exceeding principal. The remaining amount of interest owed is added to the principal, resulting in the principal payment appearing as a negative. In the case of certain of our real estate capital leases, negative amortization may occur because of a required allocation between land and building. Under the capital lease rules of the current lease accounting standard, ASC 840 (Leases), the lease payment is bifurcated between land and building, if certain conditions are met. In these cases, the portion of the payment attributed to the building is capitalized at the lesser of net present value or fair market value, and the interest rate is thus determined as the previously unknown variable; while the portion of the rental payment attributed to land is treated as rental expense. Sale Leaseback Transactions On January 10, 2018, we completed Sale-Leaseback Transactions on four distribution centers. We sold these properties for gross proceeds of $110.0 million . As a result of the Sale-Leaseback Transactions, we recognized capital lease assets and obligations totaling $95.1 million on these properties, and a total deferred gain of $83.9 million |
Commitments and Contingencies
Commitments and Contingencies | 3 Months Ended |
Mar. 31, 2018 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | Commitments and Contingencies Environmental and Legal Matters From time to time, we are involved in various proceedings incidental to our businesses, and we are subject to a variety of environmental and pollution control laws and regulations in all jurisdictions in which we operate. Although the ultimate outcome of these proceedings cannot be determined with certainty, based on presently available information management believes that adequate reserves have been established for probable losses with respect thereto. Management further believes that the ultimate outcome of these matters could be material to operating results in any given quarter but will not have a materially adverse effect on our long-term financial condition, our results of operations, or our cash flows. Collective Bargaining Agreements As of March 31, 2018, we employed approximately 1,500 persons on a full-time basis. Additionally, at March 31, 2018, approximately 34% of our employees were represented by various local labor union Collective Bargaining Agreements (“CBAs”), of which approximately 11% of CBAs are up for renewal in fiscal 2018 or are currently expired and are under negotiation. We subsequently acquired Cedar Creek Holdings, Inc. (“Cedar Creek”) on April 13, 2018. In connection with this acquisition, the total number of our full-time employees increased to approximately 2,600 persons. There are no |
(Loss) Earnings per Share
(Loss) Earnings per Share | 3 Months Ended |
Mar. 31, 2018 | |
Earnings Per Share [Abstract] | |
(Loss) Earnings per Share | (Loss) Earnings per Share We calculate basic (loss) earnings per share by dividing net (loss) income by the weighted average number of common shares outstanding. We calculate diluted earnings per share by dividing net income by the weighted average number of common shares outstanding plus the dilutive effect of outstanding share-based awards, including restricted stock units, performance shares, and performance units. Due to year-to-date net losses, basic and diluted loss per share are equivalent for the three months ended March 31, 2018. The reconciliation of basic (loss) earnings and diluted (loss) earnings per common share for the three months ended was as follows (in thousands, except per share data): Three Months Ended Three Months Ended (1) Net (loss) income $ (13,427 ) $ 584 Basic weighted shares outstanding 9,137 8,966 Dilutive effect of share-based awards — 132 Diluted weighted average shares outstanding 9,137 9,098 Basic (loss) earnings per share $ (1.47 ) $ 0.07 Diluted (loss) earnings per share $ (1.47 ) $ 0.06 (1) Antidilutive common stock equivalents excluded from the diluted earnings per share calculation include all outstanding options and performance shares, and 50,000 |
Accumulated Other Comprehensive
Accumulated Other Comprehensive Loss | 3 Months Ended |
Mar. 31, 2018 | |
Equity [Abstract] | |
Accumulated Other Comprehensive Loss | Accumulated Other Comprehensive Loss Comprehensive income is a measure of income which includes both net (loss) income and other comprehensive income. Other comprehensive income results from items deferred from recognition into our Consolidated Statements of Operations and Comprehensive (Loss) Income. Accumulated Other Comprehensive Loss is separately presented on our Consolidated Balance Sheets as part of common stockholders’ equity. The changes in balances for each component of Accumulated Other Comprehensive Loss for the three months ended March 31, 2018, were as follows (in thousands): Foreign currency, net of tax Defined benefit pension plan, net of tax Other, net of tax Total Accumulated Other Comprehensive Loss December 30, 2017, beginning balance $ 674 $ (37,393 ) $ 212 $ (36,507 ) Other comprehensive income, net of tax (1) 6 203 — 209 March 31, 2018, ending balance, net of tax $ 680 $ (37,190 ) $ 212 $ (36,298 ) (1) For the three months ended March 31, 2018, the actuarial loss recognized in the Condensed Consolidated Statements of Income and Comprehensive (Loss) Income as a component of net periodic pension cost was $0.3 million , net of tax of $0.1 million |
Subsequent Events
Subsequent Events | 3 Months Ended |
Mar. 31, 2018 | |
Subsequent Events [Abstract] | |
Subsequent Events | Subsequent Events On March 9, 2018, we entered into an Agreement and Plan of Merger with Cedar Creek, pursuant to which we agreed to acquire Cedar Creek in a merger transaction with one of our wholly-owned subsidiaries. The merger was consummated on April 13, 2018. As a result of the merger, we increased the number of our distribution facilities to approximately 70 facilities, and increased the number of full-time employees to approximately 2,600 persons. The Merger Agreement provided for an aggregate purchase price of $413.0 million on a debt-free, cash-free basis (the “Merger Consideration”). The Merger Consideration consisted of approximately $345.0 million in cash for payments to the equity holders of Cedar Creek and other closing payments, and approximately $68.0 million as the agreed value of capital leases. The Company used a portion of the proceeds from the Amended and Restated Revolving Credit Facility and the Term Loan (each as defined below) to finance the acquisition of Cedar Creek. On April 13, 2018, in connection with the acquisition of Cedar Creek, we amended and restated our existing credit agreement, pursuant to which we increased the aggregate commitments of our senior-secured asset-based revolving loan and letter of credit facility (the “Amended and Restated Revolving Credit Facility”) to $600.0 million (an increase of $265.0 million ). The Amended and Restated Revolving Credit Facility also provides for an uncommitted accordion feature that permits us to increase the facility by an aggregate additional principal amount of up to $150.0 million , subject to certain conditions, including lender consent. The maturity date pursuant to the Amended and Restated Revolving Credit Facility remains October 10, 2022. A portion of the proceeds from the Amended and Restated Revolving Credit Facility were used to fund a portion of the Merger Consideration and to fund transaction costs in connection with the Amended and Restated Revolving Credit Facility, and also transaction costs in connection with the acquisition of Cedar Creek. On the same date, also in connection with the acquisition of Cedar Creek, we entered into a credit and guaranty agreement (the “Term Loan Agreement”) with HPS Investment Partners, LLC, as administrative agent and collateral agent (“HPS”). The Term Loan Agreement provides for a senior secured first lien term loan facility in an aggregate principal amount of $180.0 million (the “Term Loan”). The Term Loan requires principal payments of $450,000 |
Summary of Significant Accoun18
Summary of Significant Accounting Policies (Policies) | 3 Months Ended |
Mar. 31, 2018 | |
Accounting Policies [Abstract] | |
Basis of Presentation | Basis of Presentation The accompanying unaudited Condensed Consolidated Financial Statements include the accounts of BlueLinx Holdings Inc. and its wholly owned subsidiaries (the “Company”). These financial statements have been prepared in accordance with the instructions to Form 10-Q and do not include all of the information and footnotes required by accounting principles generally accepted (“GAAP”) in the United States (“U.S.”) for complete financial statements. In the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation have been included. These statements should be read in conjunction with the Consolidated Financial Statements and notes thereto included in the Company’s Annual Report on Form 10-K (the “Annual Report on Form 10-K”) for the year ended December 30, 2017 |
Recently Adopted Accounting Standards and Standards Effective in Future Years | Recently Adopted Accounting Standards Revenue from Contracts with Customers. In 2014, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2014-09, “Revenue from Contracts with Customers (Topic 606) (“ASC 606”).” Under this ASU and subsequently issued amendments, revenue is recognized at the time a good or service is transferred to a customer for the amount of consideration received. Entities may use a full retrospective approach or report the cumulative effect as of the date of adoption. On December 31, 2017, the first day of our fiscal 2018 year, we adopted ASC 606 using the modified retrospective method applied to those contracts which were not completed as of that date. Results for reporting periods beginning after the first day of fiscal 2018 are presented under ASC 606, while prior period amounts are not adjusted and continue to be reported in accordance with our historic accounting under ASC 605. There was no adjustment due to the cumulative impact of adopting ASC 606. See Note 2, “Revenue Recognition,” for more information. Standards Effective in Future Years Leases. In 2016, the FASB issued ASU No. 2016-02, “Leases (Topic 842).” This standard will require leases with durations greater than twelve months to be recognized on the balance sheet and is effective for interim and annual reporting periods beginning after December 15, 2018. We will adopt this standard effective January 1, 2019. We have not completed our assessment, but the adoption of this standard may have a significant impact on our Consolidated Balance Sheets. However, we do not expect the adoption to have a significant impact on the recognition, measurement or presentation of lease expense within the Condensed Consolidated Statements of Operations and Comprehensive (Loss) Income (“income statement”) or the Condensed Consolidated Statements of Cash Flows (“cash flows statement”). Information about our undiscounted future lease payments and the timing of those payments is in Note 13, “Lease Commitments,” in our Annual Report on Form 10-K. Comprehensive Income |
Revenue Recognition | Revenue Recognition We recognize revenue when the following criteria are met: 1) Contract with the customer has been identified; 2) Performance obligations in the contract have been identified; 3) Transaction price has been determined; 4) The transaction price has been allocated to the performance obligations; and 5) Revenue is recognized when (or as) performance obligations are satisfied. Contracts with our customers are generally in the form of our standard terms and conditions of sale. From time to time, we may enter into specific contracts with some of our larger customers, which may affect delivery terms. Performance obligations in our contracts generally consist solely of delivery of goods. For all sales channel types, consisting of warehouse, direct, and reload sales, we typically satisfy our performance obligations upon shipment. Our customer payment terms are typical for our industry, and may vary by the type and location of our customer and the products or services offered. The term between invoicing and when payment is due is not deemed to be significant by us. For certain sales channels and/or products, our standard terms of payment may be as early as ten days. In addition, we provide inventory to certain customers through pre-arranged agreements on a consignment basis. Customer consigned inventory is maintained and stored by certain customers; however, ownership and risk of loss remains with us. When the consigned inventory is sold by the customer, we recognize revenue on a gross basis, and subsequently adjust for trade allowances at month-end. We generally expense sales commissions when incurred because the amortization period would have been one year or less. These costs are recorded within sales, general, and administrative expense. |
Earnings per Share | We calculate basic (loss) earnings per share by dividing net (loss) income by the weighted average number of common shares outstanding. We calculate diluted earnings per share by dividing net income by the weighted average number of common shares outstanding plus the dilutive effect of outstanding share-based awards, including restricted stock units, performance shares, and performance units. |
Revenue Recognition (Tables)
Revenue Recognition (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Revenue from Contract with Customer [Abstract] | |
Schedule of Revenues Disaggregated by Revenue Source and Sales Channel | The following table presents our revenues disaggregated by revenue source. Sales and usage-based taxes are excluded from revenues. Quarter Ended March 31, 2018 April 1, 2017 Sales by category (In thousands) Structural products $ 206,397 $ 190,713 Specialty products 231,481 239,119 Other (1) (391 ) (1,224 ) Total net sales $ 437,487 $ 428,608 (1) “Other” includes unallocated allowances and discounts. The following table presents our revenues disaggregated by sales channel. Sales and usage-based taxes are excluded from revenues. Quarter Ended March 31, 2018 April 1, 2017 Sales by category (In thousands) Warehouse $ 333,305 $ 319,431 Direct 82,942 87,511 Reload and service revenue 28,270 28,387 Variable consideration (7,030 ) (6,721 ) Total net sales $ 437,487 $ 428,608 |
Other Current Liabilities (Tabl
Other Current Liabilities (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Other Liabilities Disclosure [Abstract] | |
Schedule of other components of other current liabilities | The following table shows the components of other current liabilities: March 31, 2018 December 30, 2017 (2) (In thousands) Employee benefits (1) $ 5,819 $ 2,169 Insurance reserves and retention 4,886 4,070 State income taxes payable 3,298 14 Property, sales, and other non-income taxes payable 3,254 3,226 Accrued interest and other 845 1,293 Total $ 18,102 $ 10,772 (1) As of March 31, 2018, included a $4.4 million increase due to the current portion of cash-settled Stock Appreciation Rights. See Note 7. On December 30, 2017, this balance was comprised substantially of $1.0 million of 401(k) match that was paid in the first quarter of fiscal 2018. (2) |
Net Periodic Pension Cost (Tabl
Net Periodic Pension Cost (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Retirement Benefits [Abstract] | |
Schedule of net periodic pension cost for pension plans | The following table shows the components of net periodic pension cost (in thousands): Three Months Ended March 31, 2018 April 1, 2017 Service cost $ 133 $ 183 Interest cost on projected benefit obligation 963 1,179 Expected return on plan assets (1,327 ) (1,584 ) Amortization of unrecognized loss 271 267 Net periodic pension cost $ 40 $ 45 |
Stock Compensation (Tables)
Stock Compensation (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Assumptions used to compute the current fair value of cash settled-SARs | The following table summarizes the assumptions used to compute the current fair value of our cash-settled SARs: March 31, 2018 (1) December 30, 2017 (2) Stock price $ 32.59 $ 9.76 Expected volatility 125.57 % 33.80 % Risk-free interest rate 1.77 % 1.55 % Expected term (in years) 0.29 0.54 Expected dividend yield Not applicable Not applicable (1) Reflects an assumed exercise price based on the 20 -trading day average, as per the amended SARs Agreement. The 20 -day trading average was based on the 20 days prior to the last trading day of the fiscal quarter, inclusive of the last trading day. (2) |
Lease Commitments (Tables)
Lease Commitments (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Leases [Abstract] | |
Schedule of total commitments under capital leases | At March 31, 2018, our total commitments under capital leases recorded in the Consolidated Balance Sheets within “current liabilities - capital leases and real estate deferred gain” and “non-current liabilities - capital leases and real estate deferred gain” were as follows: Principal (1) Interest (In thousands) 2018 $ 1,807 $ 8,728 2019 1,840 11,567 2020 1,501 11,509 2021 127 11,514 2022 (392 ) 11,570 Thereafter 107,452 178,594 Total $ 112,335 $ 233,482 (1) |
(Loss) Earnings per Share (Tabl
(Loss) Earnings per Share (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Earnings Per Share [Abstract] | |
(Loss) Earnings per Share | The reconciliation of basic (loss) earnings and diluted (loss) earnings per common share for the three months ended was as follows (in thousands, except per share data): Three Months Ended Three Months Ended (1) Net (loss) income $ (13,427 ) $ 584 Basic weighted shares outstanding 9,137 8,966 Dilutive effect of share-based awards — 132 Diluted weighted average shares outstanding 9,137 9,098 Basic (loss) earnings per share $ (1.47 ) $ 0.07 Diluted (loss) earnings per share $ (1.47 ) $ 0.06 (1) Antidilutive common stock equivalents excluded from the diluted earnings per share calculation include all outstanding options and performance shares, and 50,000 |
Accumulated Other Comprehensi25
Accumulated Other Comprehensive Loss (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Equity [Abstract] | |
Schedule of changes in accumulated balances for each component of other comprehensive income (loss) | The changes in balances for each component of Accumulated Other Comprehensive Loss for the three months ended March 31, 2018, were as follows (in thousands): Foreign currency, net of tax Defined benefit pension plan, net of tax Other, net of tax Total Accumulated Other Comprehensive Loss December 30, 2017, beginning balance $ 674 $ (37,393 ) $ 212 $ (36,507 ) Other comprehensive income, net of tax (1) 6 203 — 209 March 31, 2018, ending balance, net of tax $ 680 $ (37,190 ) $ 212 $ (36,298 ) (1) For the three months ended March 31, 2018, the actuarial loss recognized in the Condensed Consolidated Statements of Income and Comprehensive (Loss) Income as a component of net periodic pension cost was $0.3 million , net of tax of $0.1 million |
Revenue Recognition (Details)
Revenue Recognition (Details) $ in Thousands | 3 Months Ended | |
Mar. 31, 2018USD ($)day | Apr. 01, 2017USD ($) | |
Disaggregation of Revenue [Line Items] | ||
Standard terms of payment, number of days | day | 10 | |
Net sales | $ 437,487 | $ 428,608 |
Warehouse | ||
Disaggregation of Revenue [Line Items] | ||
Net sales | 333,305 | 319,431 |
Direct | ||
Disaggregation of Revenue [Line Items] | ||
Net sales | 82,942 | 87,511 |
Reload and service revenue | ||
Disaggregation of Revenue [Line Items] | ||
Net sales | 28,270 | 28,387 |
Variable consideration | ||
Disaggregation of Revenue [Line Items] | ||
Net sales | (7,030) | (6,721) |
Structural products | ||
Disaggregation of Revenue [Line Items] | ||
Net sales | 206,397 | 190,713 |
Specialty products | ||
Disaggregation of Revenue [Line Items] | ||
Net sales | 231,481 | 239,119 |
Other | ||
Disaggregation of Revenue [Line Items] | ||
Net sales | $ (391) | $ (1,224) |
Assets Held for Sale (Details)
Assets Held for Sale (Details) $ in Millions | Mar. 31, 2018USD ($)property | Dec. 30, 2017USD ($) |
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||
Number of properties held for sale | property | 2 | |
Discontinued Operations, Held-for-sale | ||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||
Disposal group, including discontinued operation, assets, current | $ | $ 0.8 | $ 0.8 |
Other Current Liabilities (Deta
Other Current Liabilities (Details) - USD ($) $ in Thousands | Mar. 31, 2018 | Dec. 30, 2017 |
Other Liabilities Disclosure [Abstract] | ||
Employee benefits | $ 5,819 | $ 2,169 |
Insurance reserves and retention | 4,886 | 4,070 |
State income taxes payable | 3,298 | 14 |
Property, sales, and other non-income taxes payable | 3,254 | 3,226 |
Accrued interest and other | 845 | 1,293 |
Total | 18,102 | 10,772 |
Current portion of cash-settled Stock Appreciation Rights | $ 4,400 | |
401K Employer matching contribution accrued liability | $ 1,000 |
Revolving Credit Facility and29
Revolving Credit Facility and Mortgage (Details) $ in Thousands | 3 Months Ended | ||
Mar. 31, 2018USD ($) | Apr. 01, 2017USD ($) | Jan. 10, 2018property | |
Debt Instrument [Line Items] | |||
Principal payments on mortgage | $ 97,847 | $ 27,388 | |
Revolving Credit Facility | |||
Debt Instrument [Line Items] | |||
Long-term line of credit facility | 223,300 | ||
Line of credit facility, remaining borrowing capacity | $ 70,100 | ||
Sale-leaseback of four distribution centers | |||
Debt Instrument [Line Items] | |||
Number of properties in sale-leaseback arrangement | property | 4 |
Net Periodic Pension Cost (Deta
Net Periodic Pension Cost (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2018 | Apr. 01, 2017 | |
Retirement Benefits [Abstract] | ||
Service cost | $ 133 | $ 183 |
Interest cost on projected benefit obligation | 963 | 1,179 |
Expected return on plan assets | (1,327) | (1,584) |
Amortization of unrecognized loss | 271 | 267 |
Net periodic pension cost | $ 40 | $ 45 |
Stock Compensation (Details)
Stock Compensation (Details) $ / shares in Units, $ in Millions | 3 Months Ended | 12 Months Ended | |
Mar. 31, 2018USD ($)trading_day$ / sharesshares | Dec. 30, 2017USD ($)$ / shares | Dec. 31, 2016 | |
Share-based Compensation Arrangement by Share-based Payment Award, Fair Value Assumptions and Methodology [Abstract] | |||
Stock price (in dollars per share) | $ 32.59 | $ 9.76 | |
Expected volatility | 125.57% | 33.80% | |
Risk-free interest rate | 1.77% | 1.55% | |
Expected term (in years) | 8 days | 16 days | |
Stock Appreciation Rights (SARs) | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Weighted average exercise price (in dollars per share) | $ 7 | ||
Options outstanding (in shares) | shares | 445,000 | ||
Deferred compensation liability | $ | $ 9.9 | $ 1 | |
Weighted average exercise price, trading day average | trading_day | 20 | ||
Payable within thirty days of the vesting date | Stock Appreciation Rights (SARs) | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Vesting period | 30 days | ||
Payable within one year of vesting date | Stock Appreciation Rights (SARs) | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Vesting period | 1 year |
Lease Commitments (Details)
Lease Commitments (Details) $ in Thousands | Mar. 31, 2018USD ($) |
Leases [Abstract] | |
Carrying amount of capital leases | $ 126,000 |
Net book value of capital leases | 110,200 |
Principal Payments on Capital Leases [Abstract] | |
2,018 | 1,807 |
2,019 | 1,840 |
2,020 | 1,501 |
2,021 | 127 |
2,022 | (392) |
Thereafter | 107,452 |
Total | 112,335 |
Interest Payments on Capital Leases [Abstract] | |
2,018 | 8,728 |
2,019 | 11,567 |
2,020 | 11,509 |
2,021 | 11,514 |
2,022 | 11,570 |
Thereafter | 178,594 |
Total | $ 233,482 |
Lease Commitments - Sale-Leaseb
Lease Commitments - Sale-Leaseback Transactions (Details) - Sale-leaseback of four distribution centers $ in Millions | Jan. 10, 2018USD ($)property |
Capital Leased Assets [Line Items] | |
Number of properties in sale-leaseback arrangement | property | 4 |
Sale-leaseback gross proceeds | $ 110 |
Capital lease obligations | 95.1 |
Sale leaseback transaction, deferred gain, gross | $ 83.9 |
Commitments and Contingencies (
Commitments and Contingencies (Details) - employee | Apr. 13, 2018 | Mar. 31, 2018 |
Subsequent Event [Line Items] | ||
Entity number of employees | 1,500 | |
Percentage of employees represented by various labor unions | 34.00% | |
Number of collective bargaining agreements up for renewal in one year | 11.00% | |
Cedar Creek | Subsequent Event | ||
Subsequent Event [Line Items] | ||
Entity number of employees | 2,600 | |
Number of unionized employees | 0 |
(Loss) Earnings per Share (Deta
(Loss) Earnings per Share (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | |
Mar. 31, 2018 | Apr. 01, 2017 | |
Earnings Per Share [Abstract] | ||
Net income | $ (13,427) | $ 584 |
Basic weighted shares outstanding (in shares) | 9,137,000 | 8,966,000 |
Dilutive effect of share-based awards (in shares) | 0 | 132,000 |
Diluted weighted average shares outstanding (in shares) | 9,137,000 | 9,098,000 |
Basic (loss) earnings per share (in dollars per share) | $ (1.47) | $ 0.07 |
Diluted (loss) earnings per share (in dollars per share) | $ (1.47) | $ 0.06 |
Restricted Stock and Restricted Stock Units | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Antidilutive common stock equivalents excluded from diluted earnings per share calculation | 50,000 |
Accumulated Other Comprehensi36
Accumulated Other Comprehensive Loss (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2018 | Apr. 01, 2017 | |
Accumulated Other Comprehensive Income (Loss), Net of Tax [Roll Forward] | ||
Beginning balance | $ 35,002 | |
Other comprehensive income (loss), net of tax | 209 | $ 280 |
Ending balance, net of tax | 22,096 | |
Foreign currency, net of tax | ||
Accumulated Other Comprehensive Income (Loss), Net of Tax [Roll Forward] | ||
Beginning balance | 674 | |
Other comprehensive income (loss), net of tax | 6 | |
Ending balance, net of tax | 680 | |
Defined benefit pension plan, net of tax | ||
Accumulated Other Comprehensive Income (Loss), Net of Tax [Roll Forward] | ||
Beginning balance | (37,393) | |
Other comprehensive income (loss), net of tax | 203 | |
Ending balance, net of tax | (37,190) | |
Other, net of tax | ||
Accumulated Other Comprehensive Income (Loss), Net of Tax [Roll Forward] | ||
Beginning balance | 212 | |
Other comprehensive income (loss), net of tax | 0 | |
Ending balance, net of tax | 212 | |
Total Accumulated Other Comprehensive Loss | ||
Accumulated Other Comprehensive Income (Loss), Net of Tax [Roll Forward] | ||
Beginning balance | (36,507) | |
Other comprehensive income (loss), net of tax | 209 | |
Ending balance, net of tax | (36,298) | |
Accumulated defined benefit plan adjustment, net gain (loss) attributable to parent | ||
Accumulated Other Comprehensive Income (Loss), Net of Tax [Roll Forward] | ||
Reclassification of actuarial loss | 300 | |
Reclassification of actuarial loss, tax | $ 100 |
Subsequent Events (Details)
Subsequent Events (Details) | Apr. 13, 2018USD ($)employeeFacility | Mar. 31, 2018employee |
Subsequent Event [Line Items] | ||
Entity number of employees | employee | 1,500 | |
Cedar Creek | Subsequent Event | ||
Subsequent Event [Line Items] | ||
Entity number of facilities | Facility | 70 | |
Entity number of employees | employee | 2,600 | |
Aggregate purchase price | $ 413,000,000 | |
Business acquisition, consideration transferred, cash payments | 345,000,000 | |
Business acquisition, consideration transferred, liabilities incurred | 68,000,000 | |
Cedar Creek | Subsequent Event | Line of Credit | ||
Subsequent Event [Line Items] | ||
Line of credit facility, maximum borrowing capacity | 600,000,000 | |
Line of credit facility, additional borrowing capacity | 265,000,000 | |
Line of credit facility, additional borrowing capacity under uncommitted accordion feature | 150,000,000 | |
Cedar Creek | Subsequent Event | Secured Debt | Term Loan | ||
Subsequent Event [Line Items] | ||
Proceeds from term loan issuance | 180,000,000 | |
Quarterly term loan principal payments | $ 450,000 |