UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549

FORM 8-K


CURRENT REPORT
Pursuant to Section 13 or 15(d) of
The Securities Exchange Act of 1934
Date of report (Date of earliest event reported):     April 1, 2020    


BlueLinx Holdings Inc.
(Exact Name of Registrant as Specified in Charter)


 
 
 
 
 
Delaware
 
001-32383
 
77-062735
(State or other jurisdiction
of incorporation)
 
(Commission
File Number)
 
(I.R.S. Employer
Identification No.)
 
 
1950 Spectrum Circle, Marietta, Georgia
 
30067
(Address of principal executive offices)
 
(Zip Code)

Registrant’s telephone number, including area code    (770) 953-7000
                            
(Former name or former address, if changed since last report.)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):
 
o
Written communication pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
 
o
Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
 
o
Pre-commencement communication pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
 
o
Pre-commencement communication pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
Securities registered pursuant to Section 12(b) of the Act:
Title of each class
Trading Symbol(s)
Name of each exchange on which registered
Common Stock, par value $0.01 per share
BXC
New York Stock Exchange
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
Emerging growth company o
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. o





Item 1.01    Entry into a Material Definitive Agreement.

On April 1, 2020, BlueLinx Holdings Inc. (the “Company”) amended its existing term loan facility by entering into that certain Sixth Amendment to Credit and Guaranty Agreement (the “Amendment”), by and among the Company, as borrower, certain of the Company’s subsidiaries, as guarantors, the lenders party thereto, and HPS Investment Partners, LLC, in its capacity as administrative agent.

Pursuant to the Amendment, the Company modified the “Total Net Leverage Ratio” covenant levels for the 2020 second and third quarters. All other “Total Net Leverage Ratio” covenant levels for prior and future quarters were unchanged. The Amendment also permits certain prepayments made by the Company between March 29, 2020, and April 1, 2020, to be given pro forma effect for purposes of calculating the “Total Net Leverage Ratio” for the fiscal quarter ended March 28, 2020, and modifies the deadline for certain prepayments from prior asset sales.

The foregoing description of the material terms of the Amendment is qualified in its entirety by reference to the Amendment, which is filed as Exhibit 10.1 to this Current Report and incorporated herein by reference.

Item 2.02    Results of Operations and Financial Condition.

On April 7, 2020, the Company issued a press release containing preliminary information about the Company’s results of operations for the quarter ended March 28, 2020. A copy of the press release is attached hereto as Exhibit 99.1 and hereby incorporated by reference.

The information included in this Item 2.02, as well as Exhibit 99.1, shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, nor shall it be deemed incorporated by reference in any filing under the Securities Act of 1933.

Item 9.01    Financial Statements and Exhibits.

(d)    Exhibits:

The following exhibits are attached with this Current Report on Form 8-K:

Exhibit No.
Exhibit Description    

10.1

99.1






SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

BlueLinx Holdings Inc.



Dated: April 7, 2020                    By: /s/ Justin B. Heineman            
Justin B. Heineman
Vice President, General Counsel & Corporate Secretary



SIXTH AMENDMENT TO CREDIT AND GUARANTY AGREEMENT SIXTH AMENDMENT (this “Agreement”) dated as of April 1, 2020 among BlueLinx Holdings Inc. (the “Borrower”), the “Guarantors” referred to on the signature pages hereto, the Lenders executing this Agreement on the signature pages hereto and HPS INVESTMENT PARTNERS, LLC, in its capacity as Administrative Agent (the “Administrative Agent”) under the Credit Agreement referred to below. WHEREAS, the Borrower, the Guarantors party thereto, the Lenders party thereto and the Administrative Agent are parties to that certain Credit and Guaranty Agreement, dated as of April 13, 2018 (as amended, restated, supplemented, or otherwise modified from time to time, the “Credit Agreement”). WHEREAS, the Credit Parties, the Lenders party hereto constituting the Requisite Lenders and the Administrative Agent desire to amend the Credit Agreement on the terms set forth herein. NOW THEREFORE, in consideration of the premises and covenants contained herein and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto hereby agree as follows: Section 1. Definitions. Except as otherwise defined in this Agreement, terms defined in the Credit Agreement, after giving effect to this Agreement, are used herein as defined therein. This Agreement shall constitute a Credit Document for all purposes of the Credit Agreement and the other Credit Documents. Section 2. Amendments. Subject to the satisfaction of the conditions precedent specified in Section 4 below, effective as of the Sixth Amendment Effective Date, the Credit Agreement is hereby amended as follows: (a) The following new definition shall be added to Section 1.1 of the Credit Agreement in the appropriate alphabetical order: “Sixth Amendment Effective Date” means April 1, 2020. (b) Section 1.4 of the Credit Agreement shall be amended by adding the following clause (f) immediately following clause (e) thereof: “(f) Notwithstanding anything to the contrary contained herein, for purposes of determining compliance with the financial covenant set forth in Section 6.7 in respect of the Fiscal Quarter ending March 28, 2020, in the event that the Borrower has made mandatory prepayments of the Loans under Section 2.10(a) during the period commencing on March 29, 2020, and ending on, and including, the Sixth Amendment Effective Date, the principal amount of the Loans included in Consolidated Total Debt for purposes of calculating the Total Net Leverage Ratio for the Fiscal Quarter ending March 28, 2020, shall be calculated giving effect to such mandatory prepayments as if they were made during the applicable Measurement Period.” (c) Section 2.10(a) of the Credit Agreement shall be restated in its entirety as follows: 34408.03700


 
“(a) Asset Sales. Not later than the fifth Business Day following the date of receipt by the Borrower or any of its Subsidiaries of any Net Asset Sale Proceeds (other than from (x) the sale of any Specified Properties after the Third Amendment Effective Date and (y) Permitted Leaseback Transactions), the Borrower shall prepay the Loans in an aggregate amount equal to such Net Asset Sale Proceeds, together with accrued interest thereon and any premium payable pursuant to Section 2.11; provided that (i) to the extent any such Net Asset Sale Proceeds constitute proceeds of ABL Priority Collateral (including the portion of Net Asset Sale Proceeds constituting proceeds of ABL Priority Collateral from an Asset Sale of the Equity Interests of any Credit Party that owns ABL Priority Collateral), then the mandatory prepayment pursuant to this Section 2.10(a) with respect to Net Asset Sale Proceeds constituting proceeds of ABL Priority Collateral shall be in an amount equal to 100% of such Net Asset Sale Proceeds minus the amount of such Net Asset Sale Proceeds that are then required to be used to prepay Indebtedness under the ABL Credit Agreement, and (ii) (A) so long as no Default or Event of Default shall have occurred and be continuing, and (B) to the extent that (x) such Net Asset Sale Proceeds consist of proceeds of the sale of Specified Properties prior to the Third Amendment Effective Date, or (y) the Net Asset Sale Proceeds (other than from the sale of any Specified Properties) reinvested in accordance with this Section 2.10(a) from the Closing Date through the applicable date of determination, together with the aggregate amount of Net Insurance/Condemnation Proceeds reinvested in accordance with Section 2.10(b) and Net Extraordinary Receipts reinvested in accordance with Section 2.10(f), do not exceed $15,000,000 in the aggregate, then, in each case, Borrower shall have the option, directly or through one or more of its Subsidiaries, to invest (or commit to invest) all or a portion of such Net Asset Sale Proceeds in long term productive assets of the general type used in the business of the Borrower and its Subsidiaries within twelve (12) months of receipt thereof (or, if committed to be reinvested within such twelve (12) month period, within six (6) months of such twelve (12) month period); provided that with respect to any Net Asset Sale Proceeds from the sale of any Specified Property prior to the Third Amendment Effective Date, such permitted reinvestment period shall end on April 1, 2020. For the avoidance of doubt, any Net Asset Sale Proceeds not so invested during such twelve (12) month period (or, (x) in the case of commitments, within six (6) months of such twelve (12) month period and (y) in the case of Net Asset Sale Proceeds from the sale of any applicable Specified Property, by April 1, 2020) shall be required to be used to make a mandatory prepayment of the Loans on or before the Business Day after such period ends. Notwithstanding the foregoing provisions of this Section 2.10(a), the Net Asset Sale Proceeds of (I) any Specified Property sold after the Third Amendment Effective Date and (II) any Permitted Leaseback Transaction shall be excluded from the requirements of this Section 2.10(a) and shall instead be required to repay the Loans and applied in accordance with Section 2.10(c) of this Agreement.” (d) Section 6.7 of the Credit Agreement shall be restated in its entirety as follows: “6.7 Financial Covenant. The Total Net Leverage Ratio as of the last day of any Fiscal Quarter (commencing with the Fiscal Quarter ending September 29, 2018) shall not exceed the corresponding ratio set forth below: Fiscal Quarter Total Net Leverage Ending Ratio September 29, 2018 8.25 to 1.00 2


 
Fiscal Quarter Total Net Leverage Ending Ratio December 29, 2018 6.75 to 1.00 March 30, 2019 8.00 to 1.00 June 29, 2019 8.25 to 1.00 September 28, 2019 7.50 to 1.00 December 28, 2019 6.25 to 1.00 March 28, 2020 6.25 to 1.00 June 27, 2020 8.75 to 1.00 September 26, 2020 8.75 to 1.00 January 2, 2021 5.25 to 1.00 April 3, 2021 5.00 to 1.00 July 3, 2021 4.75 to 1.00 October 2, 2021 4.50 to 1.00 January 1, 2022 4.25 to 1.00 April 2, 2022 4.00 to 1.00 July 2, 2022 3.75 to 1.00 Thereafter 3.50 to 1.00 ; provided that this Section 6.7 and the requirements of this Section 6.7 shall not apply at any time that the outstanding principal balance of the Loans is less than $45,000,000.” Section 3. Representations and Warranties. Each Credit Party represents and warrants to each Agent and the Lenders that, after giving effect to this Agreement, (a) the representations and warranties set forth in Section 4 of the Credit Agreement, and in each of the other Credit Documents, are true and complete in all material respects on the date hereof as if made on and as of the date hereof (or, if any such representation or warranty is expressly stated to have been made as of a specific date, such representation or warranty shall be true and correct as of such specific date), and as if each reference in said Section 4 to “this Agreement” included reference to the Credit Agreement after giving effect to this Agreement and (b) no Default or Event of Default has occurred and is continuing as of the date hereof. Section 4. Conditions Precedent. The amendments set forth in Section 2 hereof shall each become effective, as of the date hereof (the “Sixth Amendment Effective Date”), upon satisfaction of the following conditions: (a) Execution. The Administrative Agent shall have received counterparts of this Agreement executed by the Borrower, the Guarantors party to the Credit Agreement and Lenders party to the Credit Agreement constituting the Requisite Lenders. (b) Expenses. The Borrower shall have paid all reasonable and documented out-of-pocket fees, charges and disbursements due and payable under the Credit Documents on or prior to the date hereof, including all reasonable and documented out-of-pocket fees, charges and disbursements of Administrative Agent and counsel to Administrative Agent. 3


 
Section 5. No Novation or Mutual Departure. The Borrower expressly acknowledges and agrees that there has not been, and this Agreement does not constitute or establish, a novation with respect to the Credit Agreement or any other Credit Document, or a mutual departure from the strict terms, provisions, and conditions thereof, other than with respect to the amendments contained in Section 2 hereof. Section 6. Confirmation. Each Credit Party (a) confirms its obligations under the Collateral Documents, (b) confirms that its Obligations under the Credit Agreement as modified hereby are entitled to the benefits of the pledges set forth in the Collateral Documents, (c) confirms that its Obligations under the Credit Agreement as modified hereby constitute “Secured Obligations” (as defined in the Collateral Documents) and (d) agrees that the Credit Agreement as modified hereby is the Credit Agreement under and for all purposes of the Collateral Documents. Each party, by its execution of this Agreement, hereby confirms that the Secured Obligations shall remain in full force and effect, and such Secured Obligations shall continue to be entitled to the benefits of the grant set forth in the Collateral Documents. Each Guarantor (a) confirms its Guaranteed Obligations under the Credit Agreement, (b) confirms that the Guaranteed Obligations under the Credit Agreement as modified hereby are entitled to the benefits of the guarantee set forth in Section 7 of the Credit Agreement and (c) confirms that the Obligations under the Credit Agreement as modified hereby constitute “Guaranteed Obligations”. Each Credit Party, by its execution of this Agreement, hereby confirms that the Guaranteed Obligations shall remain in full force and effect. Section 7. Miscellaneous. (a) This Agreement shall be limited as written and nothing herein shall be deemed to constitute an amendment or waiver of any other term, provision or condition of any of the Credit Documents in any other instance than as expressly set forth herein or prejudice any right or remedy that any Lender or any Agent may now have or may in the future have under any of the Credit Documents. Except as herein provided, the Credit Agreement shall remain unchanged and in full force and effect. This Agreement, the Credit Agreement and the other Credit Documents constitute the entire agreement among the parties with respect to the subject matter hereof and thereof and supersede all other prior agreements and understandings, both written and verbal, among the parties or any of them with respect to the subject matter hereof. This Agreement may be executed in any number of counterparts, all of which taken together shall constitute one and the same amendatory instrument and any of the parties hereto may execute this Agreement by signing any such counterpart. Delivery of a counterpart by electronic transmission shall be effective as delivery of a manually executed counterpart hereof. (b) THIS AGREEMENT AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES HEREUNDER (INCLUDING, WITHOUT LIMITATION, ANY CLAIMS SOUNDING IN CONTRACT LAW OR TORT LAW ARISING OUT OF THE SUBJECT MATTER HEREOF AND ANY DETERMINATIONS WITH RESPECT TO POST-JUDGMENT INTEREST) SHALL BE GOVERNED BY, AND SHALL BE CONSTRUED AND ENFORCED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK WITHOUT REGARD TO CONFLICT OF LAWS PRINCIPLES THEREOF THAT WOULD RESULT IN THE APPLICATION OF ANY LAW OTHER THAN THE LAW OF THE STATE OF NEW YORK. (c) Each of the undersigned Lenders, by its execution hereof, authorizes and directs the Administrative Agent to execute and deliver this Agreement upon the satisfaction of the conditions precedent described above (which shall be conclusively evidenced by such Lender’s execution hereof). 4


 
(d) Each of the undersigned Lenders confirms the authority of the Administrative Agent and Collateral Agent to, and the Administrative Agent and Collateral Agent each agrees to, in each case without further written consent or authorization from any Secured Party, execute any documents or instruments necessary to release any Lien encumbering any item of Collateral that is the subject of a Permitted Leaseback Transaction permitted under the Credit Agreement (as amended hereby). [Signature pages follow] 5


 
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed and delivered as of the day and year first above written. BORROWER: BLUELINX HOLDINGS INC. By: /s/ Mitchell B. Lewis Name: Mitchell B. Lewis Title: President and Chief Executive Officer SIXTH AMENDMENT TO CREDIT AGREEMENT S-1


 
GUARANTORS: CEDAR CREEK HOLDINGS, INC. By: /s/ Mitchell B. Lewis Name: Mitchell B. Lewis Title: President and Chief Executive Officer BLUELINX CORPORATION By: /s/ Mitchell B. Lewis Name: Mitchell B. Lewis Title: President and Chief Executive Officer BLUELINX FLORIDA HOLDINGS NO.1 INC. BLUELINX FLORIDA HOLDINGS N O. 2 INC. CEDAR CREEK LLC CEDAR CREEK CORP. ASTRO BUILDINGS INC. LAKE STATES LUMBER, INC. VENTURE DEVELOPMENT & CONSTRUCTION, LLC By: /s/ Mitchell B. Lewis Name: Mitchell B. Lewis Title: President and Chief Executive Officer BLUELINX FLORIDA LP By: BlueLinx Florida Holdings No. 2 Inc., its General Partner By: /s/ Mitchell B. Lewis Name: Mitchell B. Lewis Title: President and Chief Executive Officer SIXTH AMENDMENT TO CREDIT AGREEMENT S-2


 
ABP AL (MIDFIELD) LLC ABP CO II (DENVER) LLC ABP FL (LAKE CITY) LLC ABP FL (PENSACOLA) LLC ABP FL (YULEE) LLC ABP IA (DES MOINES) LLC ABP IL (UNIVERSITY PARK) LLC ABP IN (ELKHART) LLC ABP KY (INDEPENDENCE) LLC ABP LA (NEW ORLEANS) LLC ABP ME (PORTLAND) LLC ABP MI (GRAND RAPIDS) LLC ABP MN (MAPLE GROVE) LLC ABP MO (KANSAS CITY) LLC ABP MO (SPRINGFIELD) LLC ABP MO (BRIDGETON) LLC ABP MO (KANSAS CITY) LLC ABP NC (CHARLOTTE) LLC ABP NJ (DENVILLE) LLC ABP NY (YAPHANK) LLC ABP OH (TALMADGE) LLC ABP OK (TULSA) LLC ABP PA (STANTON) LLC ABP SC (CHARLESTON) LLC ABP TN (ERWIN) LLC ABP TN (MEMPHIS) LLC ABP TN (MADISON) LLC ABP TX (EL PASO) LLC ABP TX (HOUSTON) LLC ABP TX (LUBBOCK) LLC ABP TX (SAN ANTONIO) LLC ABP VA (RICHMOND) LLC ABP VT (SHELBURNE) LLC By: BlueLinx Holdings Inc., as Sole Manager By: /s/ Mitchell B. Lewis Name: Mitchell B. Lewis Title: President and Chief Executive Officer SIXTH AMENDMENT TO CREDIT AGREEMENT S-3


 
ADMINISTRATIVE AGENT: HPS INVESTMENT PARTNERS, LLC, as Administrative Agent By: /s/ Vikas Keswani Name: Vikas Keswani Title: Managing Director SIXTH AMENDMENT TO CREDIT AGREEMENT S-4


 
REQUISITE LENDERS: SPECIALTY LOAN FUND 2016, L.P., as Lender By: HPS Investment Partners, LLC, its Investment Manager By: /s/ Vikas Keswani Name: Vikas Keswani Title: Managing Director SIXTH AMENDMENT TO CREDIT AGREEMENT S-5


 
SPECIALTY LOAN ONTARIO FUND 2016, L.P., as Lender By: HPS Investment Partners, LLC, its Investment Manager By: /s/ Vikas Keswani Name: Vikas Keswani Title: Managing Director SIXTH AMENDMENT TO CREDIT AGREEMENT S-6


 
SPECIALTY LOAN FUND 2016-L, L.P., as Lender By: HPS Investment Partners, LLC, its Investment Manager By: /s/ Vikas Keswani Name: Vikas Keswani Title: Managing Director SIXTH AMENDMENT TO CREDIT AGREEMENT S-7


 
SLF 2016 INSTITUTIONAL HOLDINGS, L.P., as Lender By: HPS Investment Partners, LLC, its Service Provider By: /s/ Vikas Keswani Name: Vikas Keswani Title: Managing Director SIXTH AMENDMENT TO CREDIT AGREEMENT S-8


 
MORENO STREET DIRECT LENDING FUND, L.P., as Lender By: PS Investment Partners, LLC, its Investment Manager By: /s/ Vikas Keswani Name: Vikas Keswani Title: Managing Director SIXTH AMENDMENT TO CREDIT AGREEMENT S-9


 
SPECIALTY LOAN VG FUND, L.P., as Lender By: HPS Investment Partners, LLC, its Investment Manager By: /s/ Vikas Keswani Name: Vikas Keswani Title: Managing Director SIXTH AMENDMENT TO CREDIT AGREEMENT S-10


 
NDT SENIOR LOAN FUND, L.P., as Lender By: HPS Investment Partners, LLC, its Investment Manager By: /s/ Vikas Keswani Name: Vikas Keswani Title: Managing Director SIXTH AMENDMENT TO CREDIT AGREEMENT S-11


 
AIGUILLES ROUGES SECTOR B INVESTMENT FUND, L.P., as Lender By: HPS Investment Partners, LLC, its Investment Manager By: /s/ Vikas Keswani Name: Vikas Keswani Title: Managing Director SIXTH AMENDMENT TO CREDIT AGREEMENT S-12


 
FALCON CREDIT FUND, L.P., as Lender By: HPS Investment Partners, LLC, its Investment Manager By: /s/ Vikas Keswani Name: Vikas Keswani Title: Managing Director SIXTH AMENDMENT TO CREDIT AGREEMENT S-13


 
RELIANCE STANDARD LIFE INSURANCE COMPANY, as Lender By: HPS Investment Partners, LLC, its Investment Manager By: /s/ Vikas Keswani Name: Vikas Keswani Title: Managing Director SIXTH AMENDMENT TO CREDIT AGREEMENT S-14


 
TMD-DL HOLDING, LLC, as Lender By: HPS Investment Partners, LLC, its Investment Manager By: /s/ Vikas Keswani Name: Vikas Keswani Title: Managing Director SIXTH AMENDMENT TO CREDIT AGREEMENT S-15


 
TOKIO MILLENNIUM RE AG, L.P., as Lender By: HPS Investment Partners, LLC, its Investment Manager By: /s/ Vikas Keswani Name: Vikas Keswani Title: Managing Director SIXTH AMENDMENT TO CREDIT AGREEMENT S-16


 
SPECIALTY LOAN FUND – CX – 2, L.P., as Lender By: HPS Investment Partners, LLC, its Investment Manager By: /s/ Vikas Keswani Name: Vikas Keswani Title: Managing Director SIXTH AMENDMENT TO CREDIT AGREEMENT S-17


 
CACTUS DIRECT LENDING FUND, L.P., as Lender By: HPS Investment Partners, LLC, its Investment Manager By: /s/ Vikas Keswani Name: Vikas Keswani Title: Managing Director SIXTH AMENDMENT TO CREDIT AGREEMENT S-18


 
PRIVATE LOAN OPPORTUNITIES FUND, L.P., as Lender By: HPS Investment Partners, LLC, its Investment Manager By: /s/ Vikas Keswani Name: Vikas Keswani Title: Managing Director SIXTH AMENDMENT TO CREDIT AGREEMENT S-19


 
RED CEDAR FUND 2016, L.P., as Lender By: HPS Investment Partners, LLC, its Investment Manager By: /s/ Vikas Keswani Name: Vikas Keswani Title: Managing Director SIXTH AMENDMENT TO CREDIT AGREEMENT S-20


 
PACIFIC INDEMNITY COMPANY, as Lender By: HPS Investment Partners, LLC, its Investment Manager By: /s/ Vikas Keswani Name: Vikas Keswani Title: Managing Director SIXTH AMENDMENT TO CREDIT AGREEMENT S-21


 
AXA EQUITABLE LIFE INSURANCE COMPANY, as Lender By: HPS Investment Partners, LLC, its Investment Manager By: /s/ Vikas Keswani Name: Vikas Keswani Title: Managing Director SIXTH AMENDMENT TO CREDIT AGREEMENT S-22


 
Exhibit 99.1

BL2A23.JPG
1950 Spectrum Circle, Suite 300
Marietta, GA 30067
1-888-502-BLUE
www.BlueLinxCo.com


FOR IMMEDIATE RELEASE


BlueLinx Provides Business Update Regarding the Impact of COVID-19
Announces Favorable Term Loan Covenant Amendment
Will Host First Quarter 2020 Financial Results Conference Call and Webcast


MARIETTA, Ga., April 7, 2020 - BlueLinx Holdings Inc. (NYSE:BXC), a leading distributor of building and industrial products in the United States, today provided an update on actions that it is taking to strengthen the Company’s operating position in response to the COVID-19 pandemic.

“The pandemic has rapidly evolved, but we are evolving with it,” said Mitch Lewis, President and Chief Executive Officer. “We began preparing for the pandemic in late February, and in early March we implemented new policies and procedures to protect our associates, serve our customers, and support our suppliers. We then moved quickly to develop plans and take actions that should give the Company the financial and operating flexibility necessary to provide long-term value for our stockholders and other stakeholders.”

“All states where we operate have designated our business as ‘essential’, and we are continuing to operate our business and provide our customers and suppliers with the same level of service and commitment as before. While the next several months hold a great deal of uncertainty, we feel confident we are taking the necessary steps to continue to support our country’s infrastructure needs as we navigate these challenging circumstances. Also, with our core values of continuous improvement, teamwork, and integrity front and center, we believe we can weather the storm.”

Protecting Our Employees

“First and foremost, our concern is for the safety and well-being of our employees and their families and communities,” said Mr. Lewis. “We formed a cross-functional COVID-19 Disaster Response Team in February and implemented protocols consistent with the Centers for Disease Control and Prevention and local guidance that include enhanced cleaning and disinfecting procedures, social distancing guidelines, no travel mandates, no contact rules, visitor guidelines, no gathering directives, enhanced safety procedures for drivers, and mobile work for employees whose work can be done remotely. We also developed rapid response procedures for presumptive and confirmed COVID-19 cases.”

Actions to Provide Greater Financial Flexibility

Term Loan Amendment

The Company is highly confident that it will meet its first quarter leverage ratio covenant obligation under its term loan in light of the anticipated strength of its first quarter results and the recent steps taken to ensure efficient and effective operations. In addition, on April 1, 2020, the Company amended its term loan to provide greater financial flexibility by increasing the leverage ratio covenant levels in the second and third quarters of 2020 to 8.75:1.00 from 6.50:1.00 and 6.00:1.00, respectively. No other material changes were made to the facility and no fees were paid for this modification.





As of April 1, 2020, the term loan principal balance was reduced to approximately $69 million. As previously announced, as a result of the February 2020 term loan amendment, the Company will no longer be subject to the quarterly leverage ratio covenant when the principal balance of the term loan is less than $45 million. If the Company determines to make the approximate $24 million reduction in principal to eliminate the leverage ratio covenant, it can do so through proceeds from additional real estate transactions and asset sales, as well as voluntary prepayments using cash on hand or funds from its revolving credit facility.

Operational Response

The Company has also developed plans designed to reduce its cost structure, strengthen its balance sheet, and further increase liquidity in response to the COVID-19 pandemic. Initial steps taken to reduce operating costs include:

Paused all hiring
Limited all non-essential spending
Substantial headcount and variable operating expense reductions correlating to local market demand declines
Furloughed approximately 15% of corporate workforce
Reduced or eliminated executive and key management base salaries for the next six months
Maximizing working capital efficiency to enhance liquidity for operations

Business Update

First Quarter Net Sales and Excess Availability

The Company announced that for the first quarter ended March 28, 2020, preliminary net sales are expected to be approximately 9% higher than the prior year period when excluding the impact of first quarter 2019 net sales attributable to the discontinued legacy Cedar Creek siding line. This improvement reflects increased activity and demand through the first quarter which began to diminish in the second half of March.

Excess availability, including cash on hand, at quarter end is estimated to be between $95 - $100 million, providing the Company with a solid liquidity position as it enters the second quarter.

Supply Chain

The Company has not experienced any significant supply chain disruptions as a result of the COVID-19 pandemic. As of the end of March, the Company’s supply chain remained intact in all material respects.

First Quarter 2020 Earnings Call

The Company expects to provide further updates and results on its operations and business conditions during its first quarter earnings call and webcast, which is scheduled for Wednesday, May 6, 2020, at 10:00 a.m. Eastern Time. The Company’s press release announcing its financial results will be made available after the market closes on Tuesday, May 5th, under “Press Releases” in the Investor Relations section of the BlueLinx website, at www.BlueLinxCo.com.

Participants can access the live conference call via telephone at (877) 873-5864, using Conference ID # 7594658. Investors will also be able to access an archived audio recording of the conference call for one week following the live call by dialing (404) 537‑3406, Conference ID # 7594658. A live webcast of the conference call and accompanying materials will also be available and can be accessed by visiting the “Webcasts and Presentations” section of the Company’s website. You can access this information by going to www.BlueLinxCo.com and selecting “Investors” from the options at the top of the page and then “Webcasts & Presentations” from the drop-down menu. An online replay will be archived and available at the same site shortly after the webcast is complete.

About BlueLinx Holdings Inc.

BlueLinx (NYSE: BXC) is a leading wholesale distributor of building and industrial products in the United States with over 50,000 branded and private-label SKUs, and a broad distribution footprint servicing 40 states. BlueLinx has a differentiated distribution platform, value-driven business model and extensive cache of products across the building products industry. Headquartered in Marietta, Georgia, BlueLinx has over 2,200 associates and distributes its comprehensive range of structural and specialty products to approximately 15,000 national, regional, and local dealers, as well as specialty distributors, national home centers, industrial, and manufactured housing customers. BlueLinx encourages investors to visit its website, www.BlueLinxCo.com, which is updated regularly with financial and other important information about BlueLinx.




Contacts:
Investors:
Mary Moll, Investor Relations
(866) 671-5138
investor@bluelinxco.com

Forward-Looking Statements

This press release contains forward-looking statements. Forward-looking statements include, without limitation, any statement that predicts, forecasts, indicates or implies future results, performance, liquidity levels or achievements, and may contain the words “believe,” “anticipate,” “expect,” “estimate,” “intend,” “project,” “plan,” “will be,” “will likely continue,” “will likely result” or words or phrases of similar meaning. The forward-looking statements in this press release include statements about our financial and operating flexibility and its ability to provide long-term value for our stockholders and other stakeholders; the potential development and effects of the COVID-19 pandemic; the steps we are taking to continue to support our country’s infrastructure needs and our confidence therein; our belief in the ability of our core values to help address issues relating to the COVID-19 pandemic; our estimated preliminary net sales growth for the first quarter of 2020; our estimated excess availability, including cash on hand, at the end of the first quarter of 2020; our views on our liquidity position as we enter the second quarter of 2020; our plans to reduce cost structure, strengthen our balance sheet, and further increase liquidity in response to the COVID-19 pandemic, and the success thereof; our confidence in meeting our first quarter leverage covenant obligation; and further reductions in principal under our term loan facility and the sources therefor.

Forward-looking statements in this press release are based on estimates and assumptions made by our management that, although believed by us to be reasonable, are inherently uncertain. Forward-looking statements involve risks and uncertainties that may cause our business, strategy, or actual results to differ materially from the forward-looking statements. These risks and uncertainties include those listed under the heading “Risk Factors” in Item 1A of our Annual Report on Form 10-K for the year ended December 29, 2018, and those discussed in our Quarterly Reports on Form 10-Q and in our periodic reports filed with the SEC from time to time. We operate in a changing environment in which new risks can emerge from time to time. It is not possible for management to predict all of these risks, nor can it assess the extent to which any factor, or a combination of factors, may cause our business, strategy, or actual results to differ materially from those contained in forward-looking statements. Factors that may cause these differences include, among other things: the COVID-19 pandemic and other contagious illness outbreaks and their potential effects on our industry, suppliers and supply chain, and customers, and our business, results of operations, cash flows, financial condition, and future prospects; our ability to integrate and realize anticipated synergies from acquisitions; loss of material customers, suppliers, or product lines in connection with acquisitions; operational disruption in connection with the integration of acquisitions; our indebtedness and its related limitations; sufficiency of cash flows and capital resources; our ability to monetize real estate assets; fluctuations in commodity prices; adverse housing market conditions; disintermediation by customers and suppliers; changes in prices, supply and/or demand for our products; inventory management; competitive industry pressures; industry consolidation; product shortages; loss of and dependence on key suppliers and manufacturers; new tariffs; our ability to successfully implement our strategic initiatives; fluctuations in operating results; sale-leaseback transactions and their effects; real estate leases; changes in interest rates; exposure to product liability claims; our ability to complete offerings under our shelf registration statement on favorable terms, or at all; changes in our product mix; petroleum prices; information technology security and business interruption risks; litigation and legal proceedings; natural disasters and unexpected events; activities of activist stockholders; labor and union matters; limits on net operating loss carryovers; pension plan assumptions and liabilities; risks related to our internal controls; retention of associates and key personnel; federal, state, local and other regulations, including environmental laws and regulations; and changes in accounting principles. Given these risks and uncertainties, we caution you not to place undue reliance on forward-looking statements. We expressly disclaim any obligation to update or revise any forward-looking statement as a result of new information, future events or otherwise, except as required by law.