BXC - Earnings call transcript Q4 2021

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Operator

Greetings. Welcome to the BlueLinx Holdings' Fourth Quarter and Full-Year 2021 Results Conference Call. [Operator Instructions]. I will now turn the conference over to Ryan Taylor, Vice President of Investor Relations. Thank you.

begin. may You

Ryan Taylor

Gibson; morning, Fourth Good me welcome the CEO, to the Janzen. Officer, Thank and everyone, Full-Year Holdings' Dwight and President Quarter today With Chief XXXX BlueLinx Financial call Kelly you. are and and Conference on Call.

night, and are last with available website, Investors of with fourth in were quarter and bluelinxco.com. XX-K presentation. on the webcast. information our our you detailed along XXXX the the full-year Our our to We Release webcast News Form during issued along items follow encourage These section slides

As for GAAP closest includes results in I'll and described the a statements non-GAAP measures appendix conclusion financial call certain helpful uncertainties, from believe to will reminder, due remarks, today's to differ forward-looking our presentation risks the our in discussion financial over turn and our contains adjusted we measure evaluating most of presentation. forward-looking statements. those context Reconciliations we the With factors including be Dwight. that that At may recent for the questions. found prepared Actual to SEC provide of business. the risk the various Today's investors significantly our line can open filings.

Dwight Gibson

high market for everyone. gross morning, execution tailwinds. reporting Ryan, record and operating a joining quarter, for today. our double-digit positive call was and you Thanks, good net fourth growth margin a an in note, Thank the reflecting many on finished and year for extraordinary XXXX sales BlueLinx, year remarkable the strong respects. We

celebrated building and We the filled incredibly our XX our engaged organization's like And significantly job change, operating Bennie Lawrenceville, effort resiliency, last performance her BlueLinx the In their at first branch. year uncertainty on highly and Teammates in Before anniversary Ross, productive has execution. Operations dynamic with thank entire am proud teammates like his details, a who with diving a Miami, our dedication, tremendous of conditions. to in year Rodriguez, want while and Handler Georgia, Material capitalizing team a and Liza done who Manager I for into adaptability. improved I year. teammates market

a and profit, the full-year fostering and record underscores XXXX. benefits in EBITDA, a As few adjusted achieved profitability focusing Achieving all-time EPS gross performance-based critical of highs a we result, strategic initiatives. on culture in

centralized we Specifically, pricing performance. leveraged teams emphasize our financial to disciplined higher-value importantly, products. underpinned actions XXXX to products, purchasing structural drove and implemented in inventory management specialty incredible actions growth approach for a These and

net in year With $X.X our Gross the basis recapitalized reduced with million. our generated For position ended We the sheet We and net $XXX support of strong, drive profitable $XXX structure. at increased debt flexible balance full to increasing billion. of a best branches to are X.Xx XX% liquidity and XX% free debt and in cash our in our or XXX million points a $XXX our margin leverage to and investment is expanded available growth. distribution people, customers adjusted year, in EBITDA million and fleet we financial million, sales. $XXX XX.X%, over fortified, net net XX% grew sales to which nearly by flow, XXX%

to capital additional disciplined value we allocation. create Beyond liquidity that, through ample have strategic

margins more business reaches of tailwind positive market. the than began capabilities. its stickiness and service in US sales value-added portfolio delivery, potential talented leadership build transformational were team January, leveraging customer gross with quality to experience relevance continue at momentum increasing In scale interaction out this our exceeded Developing our by and believe our a in We and best our do world-class favorable consistent of and net product employees. our housing and with everything highest We specialty XX%. XXXX to culture remains a to at drive the up engaged through delightful we of growth core with XX% I BlueLinx. customers year-over-year our the

of QX, poised to a product of million. led quarter demonstrated period. we We strong grew another and at Taking demand are sales, achieved ability delivered of record amid and delivered XX% to our sales in sales. our expectations XX% of sales capitalize comprised and net Overall year supply results for was net volatility $XXX were strong long-term commodity This prices. margin EBITDA, the in which wood-based gross and growth enthusiastic that year-over-year nearly adjusted net by continued year-over-year net and up XX% further look We closer about $XXX specialty XX.X% total is which XX% exceeded on future. ongoing the constraints million for

remains US historically industry. to levels, for robust. home elevated further housing US housing in homeowner aging at although and believe based remodel recently, in home trends be continues products were on have attractive now the and the and market activity provide up are mortgage to building starts equity End-market demand the rising industry projections. XX% drive stock work and they Single-family favorable, remain Repair continue multiple the an with And Even rate as XXXX we historically Moving expected grow risen XXXX Fed, anticipated to on to to to have will low. remain levels. by flexibility combined financing investment. rates mortgage from increases

no industry housing experience supply continues of signs remains the ongoing the with constraints strong, in demand abatement As near-term. to

to commodity as for This has of in supply vendors. approximately commodity to healthy positive has performance represents categories, specialty economy, vendors. relationships we period, categories our ongoing served month stable To with capabilities vendor and from best customers effectively demand in $X,XXX input on supply rising with volatility. competitive we near-term mitigating and efficiently overall million of net six extend and price Even secured our EWP, on volume presence. this about Over specialty dozen view product product XXXX approach expand market rising us cedar, strategic end, costs, structural which on with prices of summarize Through second fluctuations are national ranged To and to gross to pricing, specialty desire of majority incremental and $XXX our renovation. suppliers and wages, our XXXX. as imports, that half extended product sales on such the this lead effectively expanding products key decking. we the our will focused supply. focus product includes products structural per our allocation with focus, value-added strategy XX% who products, have times serving we aligned our such, select In the from of a well, remains this as of while from remains look illustrated remained in lumber managed Even risk remains $XXX. increase and and we This approximately continue constraints our are so market, our foot supply building X,XXX from In for aggressively by inventory. margin homeownership labor board manage ongoing volatility, addition As

sales to on support operating core on performance-driven to have people, balanced by commodity to scorecard culture, our of demand, launched we levers strategic process a focused KPIs increasing and while expanding data-driven repeatable processes. are value-added growth. for this service private expect In are of risk. long-term improvement, These our controlling our capabilities. continue In robust From on on We strategic a business performance. sales, standard and drive monitoring initiatives. label decision continue specialty In focused which accountability and perspective, develop focus vigilantly making our and excellence product January, a mix narrowed to underpinned initiatives and we capitalizing we are initiatives, continuous executing we growing commercial profitable these parallel, our

side, outdoor such engineered living, supplier are specialty siding we cedar, moulding, with the partner select key vendors and On industrial on in products wood, working categories as to products.

is and and the sales of gross drive we goal and growth to operating ultimate deliver environment believe this excellence I margins expand are accountable to Our in improvement. engaged opportunity-rich workforce, combination goal. an continuous an profitable on through commercial

marketing of us And Vice Kevin employee current focus efforts and driving President, his has WestRock, proven People our last XX Marketing Sean Credit. America. we integrated Dwyer proven resource joined at is strategic he brings to a of where that career, strategies. to a as Extended to and highly On in Communications. and Board approach development human front, continue On and efforts is built Officer. this and served us His Henry to and Experience. leader, years spearhead establishing integrated and over Chief his He our People we performance-based strategic just over served I has brand the and where record week, Member Insurance corporate Saia Earlier the distribution channels. from us February leading Bottling and as On VP accelerate experience, additions. January publicly-traded resources recent American served of added as a He bring of Officer. Development Officer logistics Sean addition from business roles He internal and engagement world-class multiple human as and joins Previously, who on and XXst, Marketing analytical team Executive our communications experience will years our and also company. through team. focus capital backgrounds. and to of Brand Chief team gives from customer our our We Coca-Cola brand diverse with growth. Chief for acceleration the joins of executives Kevin Freeman Seth joining a he a Stay XX announced Kevin on Family as a Strategy track want strengthen Incorporated, AVP function. will accomplished leadership highlight Snyder's-Lance, BlueLinx few Corporate we Seth Nationwide led leadership Staff XX, is he operational Chief March marketing elevating Xst CHRO dedicated in for culture. for

additions Kevin, of We and roles Sean, Seth, they enterprise excited our strategy. the critical in with are play driving will and

assets. sustainability the grew earmarked our our Xx addition continue In to we least Xx our upgrade to at Last safety focus people, fleet of our levels. continue further million investments increasing we improve million distribution in enhancing such, year, investing business. $XX $XX on have in our are also capital our our capital as about capital we branches. In to historical to And of and and investment to XXXX, to the

forklifts fuel of portion many also gas with large will traditional state-of-the-art We for to upgrade which forklifts, efficiency higher be plan electric. a

are to Kelly technology From investing and a expand building to extend our and we to we my customers optimization, investment. time, on key or a At mix, process intend our detailed upgrades opportunities increase either that return perspective, we acquisitions, of an relevance our With turn and results effort reach. the are pipeline sales in integration M&A capital branch call we disciplined to or geographic over this to our structure. financial enhancements That suppliers scalability. fit, product and support Additionally, be thorough remarks. strategic for as respect concludes evaluate opening more of discussion I'll specialty

closing that, remarks Following before we provide questions. take I'll Kelly? your

Kelly Janzen

Thanks, Dwight, fourth everyone. the quarter. and morning, begin I'll with good

in product the increased the driven by markets in Our million, decline product XX% QX year-over-year. a or results a strong XX.X% which million, conditions. resulting from Total operational ongoing EBITDA underlying sales, rate with sales. margin, we was million net serve. basis. were line XX% net by per was income was in continued our This results improvements reflect XX%. and diluted an profit net quarterly on $X.XX was offset gross to all-time EPS $XX specialty share. sales was up structural tax was $XXX demonstrate high gross Adjusted was net in fundamentals capitalize reflect million sales. benefits $XXX momentum $XXX our positive of Net favorable This These quarter and demand growth excellent and business expectations. Fourth fourth partially The our XX.X% XX.X%, market our in on quarter ability a

$X.X For points with billion, up expanded year. were to $XXX compared the $XXX full XX%, XXX and million the or prior was year, Gross XX% XX.X%. basis net increase profit of million, an sales margin gross

specialty and year profit supply a constraints, when mix profitability to grew was with growth with the profit selling income diluted rate share. compared for net year-over-year demand improved and product sales higher building full of were year incremental pricing The Net our disciplined and gross grew products largely to structural incremental was The year. year XX% $XX.XX gross actions, net sales was strong the XX% amid inventory this management. net margin and specialty our execution in XX%. was structural million continued prior our strategic per building for growth EPS on XX.X%. ongoing XX% effective tax for attributable Our of sales for Notably, products $XXX the product the along robust

EBITDA XXXX no conditions, million, annual despite support future. was of made achieved. the XX ever XXX% the performance months also we doubt sales. unprecedented financial adjusted fundamental or $XXX for improvements many And net the believe will Given XX.X% best us year-over-year up profit, we've that significant last gross of the market the we year in was

volume, continuing modestly net and year-over-year. was sales chain on specialty improved our XX%. outpace to expanded across as Despite branches, was dynamics. our strategic strong basis profitability market Now, products I'll margins to expect profit to this, ongoing The gross and up XXX product Net QX XX% to discuss when siding we with such beginning capitalize product throughout supply supply million the for fourth were again of prior overall which with sales by points $XX consistently execution strategic to specialty by increased in half favorable $XXX in relatively the the first demand products. sales driven volume to period. millwork million increased conditions of sales attribute million, $XXX Through growth quarter. and net first million the were compared the the categories, is to categories margin quarter, Gross to offset disruptions. XXXX, or $XXX consistent year-over-year of to reflecting these and categories This XX%. stay gross pricing of lower current we net growth And the XX% continue specialty actions ability range market where several margin

fourth of to XX% This moving XXXX. sales compares or $XX was to the of or Gross quarter prior XX% Now of net gross XX% million, sales for $XX structural products. of down $XX with the period. the million was fourth as net on Net million, compared $XXX profit in year million, sales. profit quarter or

for while have effectively mitigate continue prices actions to related random enabling also commodity to with the that we've recovered per to pandemic, supply financial and $XXX of us risks square to for These ourselves price decisions from per position ensure during the of taken leverage optimize lengths. wood-based continue us commodity purchasing board we to allow to approach the X,XXX volatility. averages structural structural disciplined inventory centralized sufficient products performance, up to we maintain management quarter, $XXX to roughly Consistent far, the foot end the X,XXX lows, a commodity framing since In QX, customers. our onset average foot thus lumber and increase from During for first for QX and quarter per XX% lumber and pricing to XX% the panels, $X,XXX climbed of prices and for have $X,XXX the QX. panel

than date. products we've Touching the increases, structural on gross these briefly for experienced to in margin Given greater first quarter SG&A. XX%

million, up for For year, year-over-year. down And fourth XXXX. SG&A $XXX $XX SG&A the quarter, million, $X was was million the from million full $X

net branches QX, of as $XX million as investment, new investments sales we infrastructure and generated to several cash year, $X the than to the this full $X in we we enhanced drivers to related million and deliver. cash maintain Of variable and of related side are $X $X and distribution invested sustainability products curtain which compensation safety, the to profitability. million upgrade beds productivity. for at flat our QX to changes and to and flow free for and the And trailers, safer of Capital provide were was operating our both protection XXX SG&A flow million fluctuations million. we continue For support our due incentive anticipated. primarily increased in quarter, In

attributable was yield working of included year working our of $XXX related flow specialty net to inflation. This to XX inventory year, the capital $XXX consistent of by investment products balance inventory products. full increased Capital sales the and million flow $XXX for operating strategy. cash our sales specialty market an full our the $XX million. goal million million our concentrated investments inventory of than with with to This capital of in lower Days be six investment inventory. demonstrates a At $XXX the and cap. as end, the and inventory $XXX quarter structural turns velocity approximately continues at as days mix cash year compared in progress composition sales period at XX% we to quarter free to versus to shift year million of fourth generated million totaled our continued attractive XXXX, towards more products, prior of our our specialty third our days which inventory on For

Moving on sheet. to our balance

was growth. our to the and was X% year amending the million. debt the which year at of was issuing rate revolver our and from that As At undrawn cash included $XX reduced our Total debt in interest date which debt secured $XXX million our third Available XXXX. X.Xx was XXXX, million. end X% leverage facility $XXX loan quarter, in fiscal was Dwight second term mentioned, liquidity out financial These hand XXXX, significantly on in our and million considering strengthened actions our maturity notes improved just Xx, Net over credit position the $XXX we on the net XXXX in from retiring quarter, XXXX of and end million. $XXX $XXX support XXXX. senior structure debt end at extended and million of to mature our future capacity recapitalized cash at hand when down of

again our our proud the done positive significantly and year. we anticipate XXXX financial improve recapitalize market work start has I'm of flow free the our to generating position to cash sheet this last tailwinds, team balance Given strong Overall, and favorable year. over the

ample balanced growth. strategic investment and we in our support flexible, and liquidity is have structure and to capital Our new operations believe we

centered investments, value highest thorough our the aligned opportunities return evaluate to business will strategy. disciplined on and creation we be investment we with on As

Looking housing pricing the averages. to QX. approach building and inventory now gross management actions combination of weeks first products strategic a QX US commodity market QX margin. at dynamics robust with for demand in industry the disciplined remain have XXXX, These on our and seven specialty with Through positive above favorable generally well conditions prices in had impact

As XXXX structural specialty XX%, above quarter-to-date, specialty our products half gross modestly margin margin earlier, second exceeded for products and gross both levels. I with mentioned

increase we We that to $XX million anticipate cash We in when be capital in this expenditures, expect And the first to levels. terms to range the significantly in our rate compared our tax will planned $X of is investment of XX% historical to spending in QX expect XX%. XXXX year, million our of which quarter. exceed

was As we also and margin. we'll and as continue marks inflection in balance call of optimize our our to metrics, we the what for remarks. year in invest over business in and gross sheet and to This recapitalized adjusted profitability excited history proud expand technology. to we record this our and our upgrade our Dwight our team turn invest have at We cases, facilities, growth. position. key liquidity summary, closing for some company's accomplished ample financial XXXX EBITDA in improve our exciting and as an for a margin, and for In I'll organic and including operational profit accelerate milestone future. strengthened I'm to more set EPS fleet, EBITDA net And income time, our point back performance we

Dwight Gibson

time In it's for exciting BlueLinx. an Kelly. Thanks, closing,

in a market supply that a partner significantly essential complex an has our ability demonstrated positive a dynamic In are We operating to an environment. customers and and fundamentals. the to XXXX, our industry we chain of on improved capitalize performance part value-added

products our business. We performance-based driving the throughout growth culture, continuous are emphasizing in improvement creating a specialty and

profitable Our growth. position and is are we strong for financial investing

believe any we committed That for environment time, stakeholders long-term answer to an our the value and steadfastly we concludes in to this are At to we opportunity-rich we're are goal. to that remarks. As future, all I look create prepared happy questions.

Operator

Instructions]. [Operator

Group. Palm Craig-Hallum of question the first comes from Our line Greg Capital with

Gregory Palm

specialty. starting commentary some progress with the and with I continued on here. off maybe guess, starting by Congrats segment

much And math table. was on my QX, a on volume versus quite is if but more trying growth still that bit I was growth in So there right, chain, year-over-year probably by to a of nice basis. figure And guess I'm on the driven left mean, price? significant out my importantly, just was how is that based just pretty supply

trying dig more. just bit So to little a that into

Kelly Janzen

Sure. with ahead I'll go and start that.

see, little millwork had upside, that in EWP what continue experience. a specifically, is the exactly in see spend our in So, time the materials, today had price. year-over-year of as the low is that some on more reduction little that And that's our volume business. and siding we that to -- softness we industrials, attributable to and most in we areas as business we supply is discussed disruption of well nice bit more you'll it single-digits a chain as we We of although really we of specialty and a

the our So about and volumes as considering our pricing. whole, excited around a we felt situation good then very

Gregory Palm

that And next. into segues of kind my

much based terms hold little sustainability that that's are that's and pricing, just structural maybe something more versus temporary how you bit of going of in something supply chains to be Just where over this might do on time? think a

Dwight Gibson

critical a Yes. spending Dwight. is lot That we're that on. This point, time is of something a

the only we've understand be the of in a environment, business successful, needs to done I really it and whether things function pricing, customers' not to are we business demonstrated our be it, want we that to around way it allows it, when them also them we're they the what product as to that's they to and of additional have providing work the want secure how it. do but the want sure specialty responsiveness, get really they service of make side to a think the supply particularly constrained a that ability some the

level has past do to at will around particularly be as higher few the alluded believe over and in Kelly some calls side, specialty historically. we pricing, stickiness a there So, the you've than holding seen

Kelly Janzen

a we this kind should in quarters will right of that specialty that margins continue range XX% that that as different last that we view -- and couple to of want believe to I we've stay We say said XX% just maintain normalized our to have rate. don't a of we've now.

Gregory Palm

Yes.

the just my Okay. average Perfect. was versus QX. quarter is December price on in guess higher significantly And the structural,

so a inventory. price revenue purposefully forward of between And sounds that of It's going is just like most purpose. and but the back as right? continued lot holding you I'm well, focus that delta and Can confirm that? not sort sort volume flat And assuming higher only on here of a just that basically in near-term, it's

Dwight Gibson

Yes. absolutely Yes. confirm can that. I

that the We chase are be and focused on we being to looking manage really disciplined play market turn want in But can to sufficient as and to We have how of our we And inventory. customers' sure business. run up, we we product to to treat continue not kind the the and we're it to want meet manage our quickly. core it structural product we sure make will needs. make

Gregory Palm

us XX%. us what Kelly, in tell running quarter-to-date, for was in are January And you specifically you over it You January? willing to But alone? what that? was structural give said, the Can margin

Kelly Janzen

had We've kind quarter. rate margin consistent a first throughout the of week-over-week

I plan give not a but January, the for materially quarter-to-date was than it to different specific So, don't number.

Gregory Palm

I'll Great. the luck And going hop Okay. queue. All right. forward. in good Thanks.

Dwight Gibson

you. Thank

Operator

Yinger comes line question of the Davidson. with D.A. next from Kurt Our

Kurt Yinger

Great. Thanks.

go to wanted to pricing. specialty Just back the

of bit talk how your the versus about you XXXX at kind could much performance, look increases you just was a price of supplier-driven If own maybe internal pricing that strategies? hoping

Kelly Janzen

Sure.

since of quarter XXXX. seeing towards well the started end throughout and see to everyone as continued in XXXX as of XXXX. We increases course, in the industry price that So the -- we actually fourth of supplier-driven have

on that all the an these while of think through taking demand to team part behind and end the showing specialized. done, what get capitalizing our it, very we I the really those in that excellent and the job on those, what's and can are So has pushing premium high is has really very done through, of it way that -- process customer products

of the well. think a to it's and strategy. relates our is course, everyone we a that's I it pricing that underlying there's sustainable impetus hikes both And been as is good that feel as bit there's So, answer supplier for

Dwight Gibson

Yes.

that, The other been that, thing in to rigor. I'd around pricing to our team improving really just and intentional add has the approach addition

more portfolio, driving stronger looking our from at appropriately, a or and items our pricing items So discipline how a priced centralized decentralized leakage, better A they're D governance making we or more of sure around perspective and and C items perspective. really items looking minimizing or at and B do a that

So of just our continue pricing to points has completeness in that to the we'll the and improved the mentioned. And has going that addition quality across the forward. Kelly business drive

Kurt Yinger

Got it.

helpful. And of was those investment inventory kind touched call thought on specialty lines. of out the the then And $XXX That's QX million Okay. I kind along in number I interesting. a Dwight, same think you of

the ability as volumes start clarify talk what how think So well challenging you you to just, $XXX number investment, I maybe bit don't like from comps segment growing 'XX? million about guess, that could inventory look was, against a particularly little more what as the about

Dwight Gibson

Yes. No, it's a great point.

want we and sell strategic of the business. that specialty an driving approach of more terms volume in mentioned, going to to mix really mix We for is of be our we percentage important As our forward part our shift us.

we to the So, we in how bring want thing an about and environment. as our that's get think allocated intentional obviously, we that to in inventory we're customers. an operating out And

So that product part important more happen. an getting of is making

on really reaching of our intentional to vendors So core some has the of and out been some core team categories. our

$XXX represents. more So secure that's you supply. to about that if million if about what trying And cedar, think living, you EWP, outdoor think

that private some of product the across to between split in bring kind supports of label EWP, our good trying it's this business. more we're brands, kind decking, portion a So of mix effort and some cedar

Kurt Yinger

you. Got

as And different highlight through you touched you then on. feel about just And then of runway locations? to you think it you most brands push, or marketing kind going that two opportunity, product helpful. kind you're That's Okay. or you're the kind just Maybe some is of most focusing downstream I that. new or after one on you underpenetrated? could a wonder specialty expanding could sales walk if the categories and of of that see like where

Dwight Gibson

Yes.

place So, consistent repair energy in right to. segment. particularly It's to living, and and live, I add is with think a lot on renovation living It's we a like it's where and work side, about our I other around investing really area place -- the those in area really the homes now way and particular, the value could and to decking a things, differently. a hot just outdoor play where of an really market all see outdoor people a thinking to not their meaningful you that in but

have that think of now. to our network We opportunity majority across across the our of I more of that portfolio we the offer have don't network. products

So built that really looking being in pretty brands, good supportive And a well. good we've and vendors a of part MoistureShield, is of have that opportunity. that significant to XXXX. And really we're couple growth some a with And creates XXXX. in growth of incremental seen volume that market as example drive relationships more

to So, really we I long, lot have runway demand category and is environment the a the offer. think that's a is robust that

Kurt Yinger

it. Got

QX. of peak think on should the of about and to up Was margins. Okay. other touch it what in forward? QX, think sounds And some about thus just just you for could That's it QX coming But mean, last sequentially driver factor? big And going bouncing helpful. there? that how about far kind in or one down back I maybe the XX% mix coming we was you off in on specialty as me like kind

Kelly Janzen

mix. fairly Sure. range see we -- really around tight is that volatility in the Yes, is

taken in and by had -- in of is ago, EWP. have impact more two quarters it so. last quarter really So we nice an or the some real strength -- driven Allocations

lumber panels and have a see in fluctuation. also that little our some bit business of treated specialty We

we specialty, mix So of margin element it a which the relates to perspective. that floor a there's as kind certainly, is why on give normalization from

Kurt Yinger

it. Got

Well, appreciate in remainder here the Okay. and the good QX. of all color, luck

Dwight Gibson

Appreciate you. Thank it.

Operator

from Our with Company. next of Reuben Garner The question Benchmark line comes the

Reuben Garner

half way XX% the -- year, kind so business I'm could realized X/X your any kind specialty you the just my rate So over so tell for of revenue as business, back earnings something it doing gross historical of half average. environment profits, structural make business of The That's more in price run adjustment us the to we accounted margin despite $XXX $XXX? kind you an to of what seems with kind if we like see elevated trying of component if have of back be only out specialty the the the there right, Is your adjust and of that's the and kind roughly about for an at a we're of or there earned figure gross would because the that of business what can price for your instead of to need to commodities. year was lumber you is in normalized kind -- much maybe the line of stable. math is

Kelly Janzen

freight pricing on Yes. works adders. Well, our the way our that and freight putting then of costs, Random really taking on for and is of Lengths top that kind structural price some margin

that's while we And can price. really how disclose the that we you ultimately really that's prices, get that way to the we -- number. actual So don't

Reuben Garner

was earlier. question a maybe different asked way a ask And that Okay. to

about because sequential to chain up supply the I price asked how serve much? issues? you assume X% Can you was of maybe move much us tell or the you Can away year-over-year. were down in structural think likely walked business. volume Greg I was from how disclose year-over-year. It unable

Kelly Janzen

side? On the structural

Reuben Garner

Yes. On the structural side.

Kelly Janzen

Yes.

the So clear. walked for, on just make from sure because issues one, we're structural we've supply of want I I don't business to away business. think chain

inventory that that say approach. so on -- would relates the over in really result relates to specialty hone where margin I out And been the lean, -- mitigate pushing risk that more is we've really that business. and a our the continue we kind to related of a structural the lower it's continue lower think it are maintaining as to of the range continue -- it volume side to to as to volume focus really that XX%-ish as and on impact, to volatility to really year-over-year is in us of we inventory on coming I really on and

Reuben Garner

to And what be I to Perfect. that's Okay. meant clear, say.

on profile. question the last specialty margin So

the I you maybe help or directionally, So with down don't obviously, line? business. commodity higher further profitability swings of impact cost gross versus a And terms specialty operating But or you think us in structural in there EBIT how EBITDA. about prices, talk the margin. can expenses can disclose Are the other in one to of guys to with serve know about structural lot

anything could like EBITDA about the between us EBIT tell So or businesses? you at level maybe maybe margin what the two looks profile an

Kelly Janzen

about But the we specialty And at serve gross quarter for some cost We gross there our branches might our and of XX% over and have a on even structural end the are truck. profit, talked the same especially both XX% profit. -- distribution small fourth day, really our serve be so products the -- often those little to nuances. -- of Well, together. Sure.

don't versus is we in it really the distinction to other, as serve which to have a one cost So, important. the relates

down of kind really that think it you it kind number. way as how I think into of So, you can trickles see about the EBITDA

Reuben Garner

a expenses? And have guess, other that rising I question it, if that a note. specialty -- would is year-over-year. In final increasing call on How serve? on Okay. price were XX%, impact or that volume cost your XX-plus number impact Does percent words, clarification as up, that your a to then, different SG&A prices quick do

Kelly Janzen

It directly that. an on have would impact not immediate

not product. but do is fuel SG&A it's pricing stable cost some pricing there, of correlated our the to So, related fixed. our and to mostly labor in costs relatively labor, We have -- variability and directly

Reuben Garner

good Okay. luck of And into the moving 'XX. Great. guys, on the Congrats, results. strong rest

Dwight Gibson

Appreciate it.

Operator

Our comes with next Jeff Loop question from Stevenson Capital.

Jeffrey Stevenson

Sure. great the quarter. on Congrats

on of to year, just first first supply half remain growth it expect will due So, it level question the specialty kind Or comps? as little in a you of fourth of elevated. the be my quarter? given constraints is similar a higher tougher to the declines half Do volume first be that maybe

Dwight Gibson

Yes.

Omicron conversations long hard see the they to hit also meet instances, of the vendors. here's I our on I over the we'll labor reality. range. having the was some variant. in early the late In mean the had past side. not opportunity at continued weeks, think got supply the challenges I from the many January XX% Show them too absenteeism large couple in Builders' had of some with I with of And pretty December, perspective a ago. they some

either damper the with the you've You or the to some they Canada transportation other of and their product challenges. put struggles seen weather-driven to extent in a some side, out that get ability trucker-driven, couple wanted on really It's to. Freedom Convoy in

first second feel going and see half into quarter sure through improvement think the an to that overall I basis, second on we're than significantly of it that into easing a I'm move as see XXXX. not for different be was XXXX. And second some But half some hopefully, think I we'll we expecting hopefully the the as So, environment bit of supply move quarter. to of we

Jeffrey Stevenson

hard XX% will more as probably Got prices have a it. right look from then makes you the you more to it tailwinds second the now, you just commodity levels, ask answer to they're quarter, in XX% XX% maybe supply be story? in to remain No, think you'll that specialty since Obviously, normalization sense. But half different products Or margins. more also normalized a constraints continued way that to to back do exposure of I due And and first the quarter? and there. know kind of this is occur some on but XX% to going at later more get elevated will

Kelly Janzen

think we Yes. because we I think know. don't tell. know, don't can really I not I we mean, And

that's and what read, I first second we the think but we in read just into for we maybe amount of time, know. supply the we we've seen chain see continue what decent a maybe officially and that through definitely research disruption to expect that outlook recently the don't says half, the half. But

as So, said, going we think a long consistent similar situation, what specialty. have output coming to we're that of see out as Dwight to I

Jeffrey Stevenson

was come that here the BlueLinx then recent some October's at added M&A a where is sense. stand and flexibility Got Officer, it. seems than wondering it from And return And debt Strategy you maybe I and talk No, there sooner point of if to to of Chief things you makes appointment lastly, looking expect between like later. in kind about can to XXXX? could deal just a when offering

Dwight Gibson

based mean, profile, offer business to and I that the Hey, our you like one I to levers there at fill our we markets them. of create look opportunity where absolutely. we is think good upon capability. expertise could we market if we think at our scale look our I and out in think Yes. footprint and value, you pull have our certain we -- value And really the end

anything some and/or we we mentioned just So, of integrate I a make and in that it's opportunities customers, there. we're our movement more about, one that well our a interesting It's turn we into can mix at we of kind that as that and and want There's that's something as we kind looking out to activity, of M&A. us really one we fits focused that to sure are -- core checks an feel market really something to our allows plus holistic key that that but those inorganic way. excited about boxes that to that three. stronger about addition we think accelerates service That's customers think thesis specialty in the

of We're luck looking. forward. Great and optimistic we're the Best we're We're ball So in we'll XXXX. be active. hear. over conversations, of able of the down the move to kind that field to moving course

Operator

Our line D.A. Yinger final with from the of question comes Davidson. Kurt

Kurt Yinger

And appreciate Great. the taking you follow-up.

to on wanted Just comments expenses. to go back operating the

leveraging go the And not maybe lumber more going maybe into are up products after not stage? aggressively largely sets at So down prices both commodity that you improved out and and the lean why of I'm and on back between costs think segments on a about load position, at saying saw come truck, SG&A? volume $X,XXX. if more fixed balance we and But business spread sheet there some if with how do that liquidity

Dwight Gibson

Yes.

we appreciate So listen, us is be allows partner customers. something and business our The I a to structural clear. full-service to want for really be that

said, looks our That business. for are it's going availability if well, sure generates at if we're appropriate. cash look to us, So, for if able that specialty to at what being we at you and us, look that's look what you have results, we margin it make service generates a continue to them to

that organization. sure of We're to value for we going have think basis. going we're like want to the to in of really we we're growth able and a customers. so. and high our there do an investing our for We're We and cost sufficient We're we're a meet there's kind to appropriately, us serve. But in going a business, experience the We structural of to capabilities deliver kind of most the chase continue creates be consistent mix a of in going parts to path. to kind the and But make and drive to that we level. at really look opportunity effectively best to So, balanced allows way. sure we're our It make our going both not do specialty the it that operational needs way in that thoughtful to kind we'll volume. a can perform consistent of to leverage in and do across to get

Kurt Yinger

it. Got

what And bit, you're And of then of hold think balance Okay. thinking and about the a on talked just you cash terms level could touch greenfield guys expansions appropriate takes and in M&A you type little about on of sheet? the is you how organic to kind then helpful. potential, there? of maybe kind but puts That's

Dwight Gibson

Yes.

our up So, ramping in we are investments organic activities.

We So, is believe organic CapEx about best we excited that. can business make our increasing forward. in investment about our that investments and driving talked We're the investments. absolutely you

on be be that that whether efficiencies, branches, capacity drive we're focused whether increasing our that. that whether So in to equipment, be technology new

the going in capacity inclusive to or we're healthy projects beyond, of expanding branches activities in locations consolidating have more space. branch CapEx that and a have XXXX of place adding be and We where pipeline we and executing

about we're growth in inorganic about that. other into into will progress strategy. opportunity particular, opportunity lean we're accelerate excited to service to our our going and better. can So better. going about and that, to be on always we're business drive lean that think make thoughtful opportunities, we're that customers the create And the and We But it really excited our to

Ryan Taylor

for appreciate for Ryan. rest on I going thank and the and At of on call. We webcast. have. thoughtful I XXXX Alexander is much this you the to appreciate time, joining that of the the may the be week us. day so you call. and answer Thank and questions I Thanks, next of you to our earnings support. want we're the for Kurt. us joined all follow-up will our through We'll full-year those all remainder available joining conclude analysts us through today the to talk questions also time. any This QX to

Operator

This does conclude today's conference.

may time. have a You you and Thank great disconnect lines at your your this for participation, day.

BlueLinx (BXC) 23 Feb 222021 Q4 Earnings call transcript