Successful Restructuring And Expected Refinancing To Reverse Steep Downtrend In BlueLinx Holdings
- The stock is down 33% YTD due to concerns regarding the significant near-term debt maturity and apparent inability to benefit from the strong housing market.
- Despite these temporary challenges, EBITDA increased to the highest level in five years in the mrq, and it was the fourth consecutive quarter of y-y growth.
- The company can easily refinance, as the appraised value is 3.9x the book value; management is only waiting until 2016 to avoid a prepayment penalty.
- Proceeds from the continued rationalization of the distribution network are being used to delever, while a restructuring last year lowered the OpEx run rate by $13 million.
- The structural products segment is turning around due to an emphasis on profitability over volumes; continued strength in the higher-margin specialty products segment should drive continued margin expansion.