BlueLinx Holdings Inc. (NYSE:BXC) Q1 2021 Earnings Conference Call May 5, 2021 10:00 AM ET
Mary Moll - Director of Investor Relations
Mitch Lewis - Chief Executive Officer
Kelly Janzen - Chief Financial Officer
Conference Call Participants
Greg Palm - Craig-Hallum Capital
Reuben Garner - Benchmark Company
Brett Hendrickson - Nokomis Capital
Good day and thank you for standing by. Welcome to do BlueLinx Holdings Inc. First Quarter 2021 Earnings Conference Call. At this time, all participants are in a listen-only mode. Later, we will conduct a question-and-answer session and instructions will follow at that time. [Operator Instructions] As reminder, this conference call is being recorded.
I would now like to turn the conference over to your host, Mary Moll, Director of Investor Relations. Thank you. Please go ahead.
Thank you, and good morning, everyone. We appreciate you joining us for the BlueLinx's 2021 first quarter earnings conference call. The earnings release is posted in the Investors section of our website at www.bluelinxco.com. We will also be referring to a supplementary presentation as we go through the call. The presentation is available on our website as well.
Joining us on the call today are Mitch Lewis, Chief Executive Officer; and Kelly Janzen, Chief Financial Officer.
Before we get started, I'd like to remind you that, this presentation includes forward-looking statements. These statements are subject to risks and uncertainties that could cause our actual results to differ materially from those reflected in the statements. Those risks and uncertainties are described in our earnings release and discussed in our filings with the SEC.
Today's presentation also includes references to non-GAAP financial measures. These non-GAAP measures are described and reconciled to their GAAP counterparts in the presentation materials, the earnings release and in the Investors section of our website.
With that, I'll turn the call over to Mitch.
Thanks, Mary, and good morning. The first quarter was a great start to 2021. With historically strong financial results, as the BlueLinx team performed at a high level and capitalized on the continued strength in the residential construction and home renovation markets.
It's hard to believe it's only been a year since I opened our quarterly call with a discussion about our response to the pandemic, our focused on the safety and well being of our team and we assuring you that we were an essential business.
The changes we made in the second quarter of 2020, along with our emphasis on customer service and efficiency in 2019 have fueled the transformation of BlueLinx and our tremendous first quarter results.
These fundamental changes we made to our business, coupled with excellent execution have allowed us to benefit from the robust market conditions we've experienced and led to our performance in the first quarter of this year, perhaps the best quarterly financial performance in the history of the company.
Our financial metrics in the first quarter were very strong and substantially better than our first quarter of 2020. Net sales were $1 billion, an increase of 55% over 2020 levels. This is the highest level of first quarter sales we've seen since 2006.
Our gross profit was $180 million, and we had a gross margin rate of 17.6%, resulting in record adjusted EBITDA of $107 million. This is the highest adjusted EBITDA quarter we've recorded in the company's history. And our trailing 12 months adjusted EBITDA at the end of the quarter was $257 million.
Our profitability and the discipline management of our working capital continue to drive fundamental enhancements to our liquidity. We ended the quarter with excess availability of $238 million under our ABL, which was over $140 million higher than last year, even when you consider that we voluntarily repaid the remaining principal under our term loan of approximately $16 million.
BlueLinx has fundamentally transformed over the last year. We have real momentum and a new level of financial flexibility, which affords a plethora of options for the companies in the days ahead. In a few moments, Kelly will provide more details regarding the strong first quarter results, and the significant year-over-year improvements we made.
At the time of our last call in early March, the lumber and panel composite indices had surpassed the peak prices experienced in 2020. Since then, market imbalances have continued and the lumber and panel composite indices have once again reached all time highs.
Wood-based commodity prices remain at historically high levels and we continue to capitalize on these robust market conditions. And we're continuing to see this positive impact to the business in April, where the strength of demand coupled with higher product costs. Those are structural and specialty categories have led to the highest daily average gross profit we've seen this. While the optimism in the housing market is as strong as I've seen in my tenure with BlueLinx, escalating prices may ultimately curb demand, which would lead to commodity price moderation or decline. We obviously can't predict when this will happen, but we believe that will.
With this in mind, as we have successfully done over the last few quarters, we'll continue our disciplined approach to closely manage our structural inventory levels, while utilizing mitigation strategies to reduce the impact when the inevitable decline does arrive. This includes keeping inventory levels lean, while continuing to provide excellent service to our customer base, tightening our purchase lead times, to reduce timing risk, and maximizing levels of available consigned inventory, which has less exposure to a reduction in market pricing.
While lean commodity inventory levels may impact volume in a market environment with supply constraints, we would much rather operate with higher margins and short term lower volume, if the lower volume reduces our exposure to the potential impact of a rapid deflationary event. Our first quarter results are evidence of the success of this strategy.
Inflationary pressures from housing demand and lingering supply disruptions have continued to impact many of our specialty categories as well. Our team has done a great job of staying focused on our customers. Through these supply chain challenges as a significant amount of our sales and service energy, has been on ensuring we deliver products to our customers. And our continued emphasis on appropriate customer and product pricing resulted in first quarter specialty gross margin of 19.3%, another record breaking quarter for BlueLinx.
While we continue to manage through the current market dynamics, rest assured that we have not lost sight of our strategic imperatives. While organic volume growth in the very near-term is challenging given the supply constraints we're seeing. We're looking to the future as we continue to invest in key customer and market channels, as well as in product categories, where we have competitive advantages. We're also identifying local market share opportunities, so that as the market stabilizes, we're well positioned for organic sales growth.
Our extensive product assortment national footprint, excellent supply chain, enhanced customer service levels, and financial flexibility provide us with a framework to excel in these areas.
Improving our logistics as well as our operational and administrative efficiency also continues to be an important area focus. In 2020, we reduce labor costs by approximately $13 million on an annualized basis, while also taking steps to modernize our fleet and upgrade some of our technology. We are continuing to invest in these areas in 2021, to drive incremental operating leverage and productivity.
In fact, during the first quarter, we replaced 150 more tractors, which represents approximately a quarter of our fleet. In addition to these investments, we're committed to capitalizing on the significant opportunities we have to improve operational efficiency through route optimization, facility layout enhancements, and the automation and process redesign for our administrative and transaction processing areas. These improvements will enhance our continuous continuing objective of providing excellent service to our customers.
And now, I'd like to turn it over to Kelly, who will walk you through our first quarter 2021 financial performance in more detail, before I close with some final remarks.
Thank you, Mitch, and good morning, everyone. The first quarter was another record quarter for BlueLinx with significant improvement in our financial performance on a year over year basis. We reported net sales of $1 billion, up $363 million when compared to the prior year period along with a related improvement in gross margin, which was up 350 basis points year-over-year to 17.6%.
We also reported adjusted EBITDA of $107million, another record and an improvement of $87 million over last year. We ended the quarter with cash on hand and excess availability under our ABL, of approximately $238million, an increase of $141 million over the prior year period. We reached another milestone for BlueLinx as we paid off the remaining balance on the term loan, eliminating debt which recently had an 8% interest rate, significantly higher than the effective rate of close to 3% we experienced during the last quarter under our ABL.
First quarter net sales of Specialty Products were $563million, an increase of $142 million year-over-year or 34%. For the quarter Specialty Products comprise 55% of total net sales, which is below the range that we typically see, up 60% to 65% and as a result of the significant inflationary impact of wood-based pricing on our structural net sales.
Specialty Products are less sensitive to wood-based commodity market. Given their specialized nature, however, we did see inflationary impacts across various specialty product categories this quarter, resulting from the continued supply demand imbalances in the building products market. Given elevated wood-base commodity pricing, net sales for structural products were $462 million, an increase of $222 million or 92% compared to the prior year.
Wood-based commodity prices began to rise sharply in December, after coming off of relative lows in November and has continued to increase into the second quarter. The first quarter ended with a random links framing lumber composite at 1,026, and its related structural panel composite soaring to 1,203, both of which are had historically high levels.
As of last week, random links composite pricing was 1,290 and 1,427 for lumber and panels respectively. The impact of this inflationary environment was evident in the first quarter as structural net sales comprise 45% of total net sales for the quarter, which is higher than the typical range we've seen in recent years of 35% to 40%.
Framing lumber comprise approximately 65% of structural net sales for the first quarter, and panel sales making up the remaining 35%, which is consistent with the prior year period. We estimate that the year-over-year net sales increases for both specialty and structural products, was almost exclusively due to this inflationary impact.
Our gross margin for Specialty Products was 19.3%, our highest Specialty gross margin ever achieved. And it is an increase of 290 basis points compared to last year's margin rate of 16.4% and 220 basis points above the full year 2020 gross margin rate of 17.1%. We attribute the sequential and year-over-year increase in Specialty margin to strong market dynamics, coupled with the continued focus of the team on pricing strategy.
Structural products gross margin increased from 10.1% in the prior year period to 15.5% in the current quarter. This is significantly higher than the close to 9% that we've typically seen when wood-based commodity prices are relatively stable, and the increase in margin is reflective of what we've experienced in recent quarters.
As Mitch indicated, our volume and margin levels are strong early into Q2, while first quarter volume was impacted by supply constraints, which are continuing, our April sales volumes for both Structural and Specialty are trending up approximately 4% and 13% respectively when compared to April 2020.
Recall that volumes were severely impacted by the early onset of the pandemic and related shutdowns this time last year. Our gross margins through second quarter to-date are in the 14% to 16% range for Structural margin, and the Specialty margin is actually even better than Q1, and is in the 22% to 24% range.
SG&A for the quarter was $76 million, an increase of approximately $1 million when compared to the first quarter of 2020. It reflects an increase of $4 million year-over-year related to variable incentive compensation and increased commission, resulting from the improved financial results. This was offset by a $3 million reduction of overhead costs, primarily related to labor from actions taken in mid-2020 that have remained in place.
Excluding the impact of inflation and the year-over-year increase in variable incentive compensation I just mentioned, our current year first quarter SG&A percent of net sales is 10.9%, which is an improvement of 40 basis points over the prior year percentage of 11.3% and reflects our ongoing commitment to cost efficiency.
We consider approximately 75% of our SG&A to be fixed. Costs we don't consider fixed are primarily related to outbound shipping and handling, and include items such as warehouse and delivery labor, fuel, and third-party freight.
We generated $62 million of positive net income in the first quarter of 2021 compared to a net loss of approximately $1 million in the prior year period. As we discussed on the fourth quarter call, we utilized all of our federal NOLs in 2020. And our first quarter effective tax rate was approximately 26%.
We expect our second quarter tax rates will be between 22% and 26%. The working capital improvements that we made in 2020 were significant, especially as it relates to purchasing and controlling inventory. And we continued executing that same disciplined approach during the first quarter.
When compared to the prior year period, days sales of inventory improved by 19 days or approximately 33%. Higher March net sales drove an increase in receivables of nearly 70% as of the end of the quarter when compared to the last year and while the balance grew significantly, collectability remained strong. As much as currency rate was 94%. Mitch mentioned how our close management of inventory helps to mitigate the operating impact of a sharp product price decline. I think it's important to remember that in the event of a deflationary environment, the company will likely generate significant cash flow from our working capital. In fact, we estimate that there was approximately 115 million and inflationary investment in our working capital compared to q1 of 2020. And that would likely be converted to cash in the event that Pricing starts to decline back to those q1 2020 levels. The large increase in accounts receivable we experienced from the end of the year was also the primary reason we had a use of cash in the first quarter of $25 million, despite of profitability, which was still $35 million of improvement over the prior year.
We invested approximately $1 million in cash capital expenditures in the first quarter, and we upgraded 150 tractors in our fleet during the quarter, which increased our equipment finance lease obligations by $10 million.
The equipment lease balance would decline by approximately the same amount by the end of the year absent additional equipment lease capital investments. As Mitch mentioned earlier, we voluntarily repaid the remaining term loan principal balance of approximately $16 million, utilizing existing availability under our ABL.
Our borrowings under the ABL, which include this repayment were $359 million at quarter end compared to $382 million for the same quarter last year. Our term loan balance which is now zero was approximately $77 million last year. Bank debt comprised of the ABL and term loan balance was reduced by $101 million year-over-year or 22%.
Interest expense when excluding the one-time write-off of debt issuance costs related to the term loan payoff, decreased approximately $4 million or 27% compared to the prior year period. This was driven by the reduction in debt and lower interest rates.
Liquidity improved year-over-year by over $140 million to $238 million an excess availability under our ABL. Additionally, our operating performance and significant deleveraging has resulted in a ratio of overall net debt to adjusted EBITDA, dropping at 2.5 times as compared to 9.7 times in the prior year period, which is a transformational improvement providing increased financial flexibility for the company.
I am pleased with how well we have executed on our deleveraging strategy during the last year. The strength of our balance sheet provides us with financial optionalities and supports both organic and inorganic opportunities that could expand our geographic, product and services markets, while realizing improved economies of scale
We remain highly focused on effectively maneuvering and prevailing -- the prevailing supply demand imbalances evidence in the market, while managing our working capital and maintaining cost efficiency. We have a strong foundation for growth, one well-positioned to create value for our shareholders in the years ahead.
And now, I would like to turn it back to Mitch.
Thanks, Kelly. What a difference a year can make. I'm proud of how our team is focused on maximizing returns, and executing on our sales, growth and operational initiatives.
Our strong balance sheet, ample liquidity, significantly reduced leverage, growth strategies and market tailwinds provide us with the flexibility to improve our performance in the years ahead. Rest assured that we remain intently focused on creating long-term value for our company and our shareholders, and continuing our drive towards the goal of being the industry leader in the markets we serve.
As I close, I'd like to thank the entire BlueLinx team for their unwavering commitment to excellence in all aspects of the business that has made the last seven years as CEO of this company some of the best in my career. It has truly been an honor and a privilege to lead BlueLinx as it navigated a path that has led to the strong vibrant company that it is today.
I wrestle with my decision to retire, but I know that now is the time to commit more of my energy to my family. And it's great that the Board has asked me to stay on in an advisory capacity for the rest of 2021 and to remain as a non-executive director in the days ahead. So while my role is changing my commitment to BlueLinx remains.
You should know that I simply would not have moved forward with my retirement plans without complete confidence in the next leader of BlueLinx. Board asked me to lead a Committee on succession planning last fall and after rigorous consideration of many candidates, we unanimously selected Dwight Gibson to become our next CEO effective, June 7.
Dwight is a proven leader, and has a strong track record in both strategy and operational execution. More importantly, he also has a track record for driving growth and innovation. And Dwight embodies our company's core values that we live with BlueLinx every day; teamwork, integrity, and continuous improvement. Dwight simply is the right person to lead the company as we enter into this next exciting phase of profitable growth. And I look forward to working with him for years to come to ensure the success of our company.
And now, we'd like to open it up for any questions we may have.
[Operator Instructions] First question is from the line of Greg Palm from Craig-Hallum Capital. Your line is open.
Yeah, thanks. Good morning and really congrats on the quarter, just really incredible results here.
So maybe starting with some commentary and Kelly, I might have missed it, but just wanted to clarify. I think you had you mentioned some trends and what you're seeing in April. So gross margins in structural 14% to 16%, Specialty 22% to 24%. And then you had mentioned something about Foreign 13% and I think that was volume growth in April. But I just wanted to confirm that? I was too busy writing other stuff down.
Yeah, that's correct. We're seeing some trends up on the volume side in those areas, year over year at this point in April.
And that's based on the averages that you saw on Q1, correct?
That's actually a year over year percentage increase.
That was a year over year. Okay. In terms of what you saw specifically in Q1, I'm hoping you could derive a little bit more color on what you saw volume versus pricing. And really just curious what parts of the business you're seeing the highest levels of organic growth?
Yeah, so -- we have and we talked about it before and we've continue this approach as a related to the structural commodity products. We're taking a very cautious approach and intentionally being careful about getting hit from a different deflationary impact. So the level of inventory that we carried into the first quarter was, I would say, a cautious level of inventory. A lot of that product has been asked and so we definitely had some volume degradation from a structural commodity side of the business in the wood based products.
Again intentional and not something that we're concerned about as far as a long term market share. On the specialty side, it really was a different -- it was a different story. We had some impact from some imports, particularly in our mill ore products that impacted volume. Well, we've talked about certain product categories on the specialty side, where we have intentionally strategically emphasized. And so if you look at, for example our EWP business up double digits, cedar or decking both up over 20% during the quarter from a volume perspective. So we're pretty pleased with the volume that we saw on the first quarter.
With one big caveat, a lot of that was from work and activity done in 2020. Because when you have the environment that we have now from a supply constrained environment, you run the risk, not the risk. But you see it's much more difficult to have customers change, as they want the stability of their existing supply base. So garnering market share in this kind of environment is a lot more challenging.
Yeah. It makes sense. Specifically, on specialty, I mean, the segment sales and the gross margin were obviously really good. It sounds like it took a -- even bigger uptake in April in terms of the margin level. And I'm just curious as we look at how -- what are the largest factors that will impact that level going forward? Just trying to get a sense of how sustainable that is not just for Q2, but also sort of the remainder of the year?
Well, we certainly got a little bit of impact of having inventory at lower costing, but that we were able to take advantage of. It's nothing in comparison to what we typically see on the commodity side. Because generally on the specialty sales, there are a lot of program businesses, there's more lead time on the increase in prices than you would typically see from a commodity based business.
So generally, we continue to see a very robust pricing environment in the specialty -- in our specialty product category. So we continue to see inflationary impact, that typically an urge to the benefit of the company. We would expect that -- to the extent the inflation continues -- to continue to benefit the company. However, as we talked about in the past, we've done a lot of work on the pricing and invested a lot in pricing in this company. And we're just getting started, we're investing more and we feel like the company is doing a much better job across our footprint and being thoughtful about pricing. And looking at it from a volume standpoint, from a customer standpoint, so some of the gains that we've experienced, we feel are real, although there are -- there is a little bit of impact for kind of the FIFO impact of having lower cost of inventory.
Got it. Okay. It makes sense. And then, looking ahead, I know timings a little bit uncertain. But working capital is going to normalize at some point and you're clearly looking at some pretty significant potential and free cash flow generation. So knowing that, are you approaching investments or capital allocation any differently than you might have been looking? I don't know, six or 12 months ago?
Yeah. Well, we are certainly looking at investments, just let's talk about internal investments, we did add some assets on our fleet this quarter. We're continuing to assess the need for those maybe through the rest of the year. We could see some increase in CapEx to the tune of maybe up to $10 million in addition to what we've been typically expensing in the -- adding in the past.
We also of course, are continuing to look at other opportunities for capital allocation on the inorganic side, and we'll continue to assess those opportunities as the market becomes more clear around that. And that's what we're just working towards a stronger balance sheet with every improvement that we have to position ourselves well for that.
Okay. All right. Well, congrats again, and Mitch, congrats on your retirement. Really enjoyed working with you and best of luck to everyone going forward.
Thanks, Greg. It's been great to be on the team.
The next question comes from the line of Reuben Garner - Benchmark Company. Your line is open.
Thank you guys, good morning, and congrats Mitch, again, on your announcement. And Dwight, I'm sure you're listening in. I look forward to working with you. Maybe just to start, and I hate to harp on it. But the specialty segment, the results are just very impressive. And I'm trying to get at, I think you mentioned the relief, a lot of it was priced, what categories within specialty are seeing that price increase year-over-year, if you don't mind sharing at least some high level on that?
And then on the gross margin front, is there a new way to think about what’s the baseline?
So on the actual price increases that are running through product categories, we generally don't talk specifically about where we're seeing price increases. Supply base, I would say probably the best way to think about it is if you look across the entire platform, virtually everything is going up to various degrees. I mean, it would be – it's rare. It would be very rare to have a virtually any supplier selling at the same price point today as they were five months ago. So we're seeing widespread inflationary impact across the business and certainly saw that in first quarter and continue to see some of that today.
Yeah, and related to the margin around Reuben, we certainly, as Mitch mentioned in the first question with Greg, we definitely think we had some FIFO impact coming into this quarter as we've seen those prices increase over the last few months. Although we do truly believe that we've been able to gain more price in general given the high demand environment and the robust market overall. So we would expect it to be probably at the levels, we've been seeing that that would be unlikely. At this point, that would not be our view, but maybe higher than what we saw in the second half of last year. So I think it's somewhere in that range. So that that's the best we can tell right now.
Okay. That's helpful. And then maybe, on the structural side, the commodity prices, I mean, understanding you guys aren't a mill, maybe just your high level thoughts on what's going on in the market from a supply/demand standpoint? I understand you guys are being cautious at these levels, and rightfully so. And eventually, I think that will pay off. But just folks looking at the market and not understanding $1,200 and $1,400 prices. Can you just talk about what you're seeing from a supply standpoint, what your suppliers are saying?
And, obviously, I think most people understand the demand characteristics and any thoughts on maybe what a new normalized market might look like in terms of price if and when we do see a correction?
Great question, of course, if I knew the answer, I would have retired a long time ago. I don't know that anybody could explain it as a $1,200 to $1,400, where we are now, basically what we're seeing is just a dislocation from basic market dynamics, right? So the demand we know is there, it's being pressured by what's happening in the housing market. The mills themselves, intentionally reduce supply when we started, the pandemic got behind and have been racing to catch up.
And even -- yesterday, you still see this future -- the future is jumping on limits immediately up and I would say if you look at the market dynamics, the demand, we're hearing from our customer base remains very strong, very robust for residential housing. I think multifamily may be the place that may pause first, as it's more -- it's a more sensitive industry to the margins generally. And so if we see some of that, that might begin to have an impact, but from a demand standpoint, our team is very confident, certainly in the short term, next couple months demand, and our customers are telling us, they're very confident, they're basically for the full year.
From a supply standpoint, it doesn't appear that there's the capacity to move -- that there'll be a lot of capacity coming into the marketplace. And obviously for this -- for a lot of this capacity, there's a long lead times that take place. So absent some Black Swan event that we don't see right now, I would say the experts in this company are saying they see and believe it will remain strong, certainly for the next couple of months. And Kelly and I are on calls, three to four times a week, having dialogue about this and I -- we occasionally ask them, okay, when is it going down? When is it going down? And a month ago, it was the end of June, and now everybody's pushing it back into July and hedging their bets. So these are people been in the industry for 30 plus years as the best in the business. And they don't think anything's going to be changing significantly until July. However, as you know, all that is, we just don't know.
That's very helpful. Thanks, Mitch. And your inventory levels, obviously you mentioned, the working capital investment that you're having to make and how that's investing free cash flow. Two part question, one, what is your inventory look like in terms of -- I think last quarter, you talked about what it looks like from a volume standpoint relative to normal times or relative to even a year ago?
And then secondly, that $115 million investment, what is -- I guess, some scenario analysis, what does that look like if prices kind of move modestly lower through the year, but remain, let's say above $1,000, versus what does it look like if we had some sort of major correction, and it went down to something like, I don't know, 500? I'm just making numbers up here. But what does it look like in kind of a flat versus a declining commodity scenario?
Yes. So, on your first question, as it relates to inventory, we still see from a true volume on the ground perspective, we certainly still have lower inventory than we had last year. Clearly, with relatively flat till your end, and there's inflation built into that. So we're continuing to really manage our inventory, well on the structural side, as Mitch mentioned, and then generally the specialty to some extent where we are impacted by some supply constraints across the various products that we're working through. But overall, we've managed -- we're managing our inventory very closely. And that left us with lower volume on the ground than we were this time last year. And as part of that, structural is about 20% of that. So I know that that is kind of -- when you think about our overall risk for that inventory, it's about 20% of that is on the structural side.
As it relates to cash and the investment we have on working capital, that -- we certainly see, a lot of that increase has happened since the end of the year. So if we see, modest decline back to even yearend levels, most of that would be realized this year, that income would come back cash would come through, if we stayed flat, I think then we'd be looking at cash being realized, really equal to our profitability between now and at the end of the year. So that's how we're kind of thinking about it. And so hopefully, we'll see some modest -- we're expecting that we could see some modest decline through the rest of the year, and that we would know that cash would come off the balance sheet sometime in the second half, and we noted that. But of course, we don't know what that's going to happen ultimately. So, if it stayed flat, we would that would be kind of stuck for this year, and we would only be taking cash from the income side.
Perfect. Thanks again, guys, and congrats on the quarter.
Okay. Thank you.
[Operator Instructions] Your next question is from Brett Hendrickson from Nokomis Capital. Your line is open.
Hey. Mitch congratulations again on your retirement.
So, I got just a few quick ones. And sorry, if I missed this, Kelly, but I'm looking at your inventory in dollars actually being down year-over-year. Can you give us some color on what the inventory and volume is down year-over-year? I mean, obviously, particularly on the structural side, but maybe in total too?
Yes. We're really kind of down to about 30.
Open under 40 versus kind of in the high 50s last year across the business.
Sorry, the inventory is measured in board feet or how you want to measure it…
No, I'm sorry. You're looking for absolute inventory level?
Yeah. Could you give us the volume that you're up for April to-date? And I'm curious -- I'd like to pair that with what the inventory when the sell was down.
Yes. So, I'm not sure exactly where you're going after, but a way to think about the structural inventory, as a percentage of our total inventory. Now, at the end of the first quarter is in the 20% range. Okay? The volume that we had from a structural standpoint obviously, was down as we've talked about in the first quarter. So, as far as April actual volume today, I'm not sure that we had that data available?
Yes. We haven't provided the volume details.
Yes. I mean, I guess my point is, maybe the next question makes sense. I was going to ask, you mentioned you can hazard a guess on. I think I heard Kelly say that, structural volumes up 4% quarter to-date, and especially that 13%. Correct me if I have those backwards, but I think your sales volume that's volume, not dollars, right?
And so, if your inventory is flat -- hyper inflationary environment year-over-year, your inventory in dollars is flat, your volume available to sell on the ground in your warehouse must have been way down here. And it was just what I was trying to get at trying to figure out.
Yes. In general, our volumes on the ground and inventory are lower than last year. That's true.
And then you're rightfully playing a conservative, as we've talked about a bunch and you talked about in your opening remarks. And that's right. But could you hazard a guess as to how much better your volume might be, say quarter to-date or last quarter? If you had the amount of kind of board feet and inventory that you would normally have, I mean if you…
Yes, Brett, I would -- Yes I mean, if we're talking structural, we could probably sell out our position -- our entire position in the next five days if we wanted to. I mean, we would have been in a position to have sold a lot more in the first quarter on the structural side, if we’re going to had it. I mean, we're in a situation, particularly on the commodities where it's a scarcity source. And that's why you're seeing the prices run up. So, incremental inventory that we had. And we -- as your point, we made the conscious decision when we were looking at this actually in Q3, we're doing scenario planning, what do we want to do, as we rolled out of Q4, and the first quarter in the event of a drop, and we intentionally lowered our inventory levels, knowing that if we were wrong, we would impact volume, which resulted in the first quarter that we're reporting.
So we feel pretty good about that decision, and we continue to monitor very closely. So it's hard to say what it could be, I would just say, it'd be significantly higher had we had more inventory. It's not a function of losing market share. And to a certain extent, now we're seeing the same thing on specialty, where there is some constraint of volume from an inventory standpoint coming in that is hurting our ability to sell.
What I would tell you on the specialty side, though, is those are long-term commitments, strategic products, much stickier relationships from a customer standpoint. So we are not approaching our specialty products, the way we're approaching structurally. And part of that is because the specialty side of the business is not fraught with the high volatility, either from a cost side or pricing side that you typically see in the commodity markets.
Yes. Makes sense. Okay. And then, Kelly, your predecessor used to tell me, I think that maintenance CapEx was 6x. I know you've been bringing up your rolling stock in terms of new tractors. But what made the businesses bigger now you're through a lot of the consolidation. What do you think maintenance CapEx, it's been running about 6 million total CapEx, but I'm curious what you think maintenance CapEx is these days?
Yes, I actually think that's a good question. And that's something we're actually working through right now that we have a little bit of more flexibility. So we did pencil in around that 6 million for this year outside of rolling stock, which I'd mentioned earlier that we could put some significant investment in rolling stock this year as well.
So I would say maybe bring that up to seven or eight potentially in the short-term, then we'll see how that goes. But I think we're not that far off. We're still a very low CapEx business as a whole. So I don't think it's different.
Yes. Good. Sounds like 6 million is the true maintenance like necessary number, and then you might on a discretionary basis not such a better balance sheet…
That's right. I think that's the way to think about it. Yes.
Perfect. And sorry for all the questions, but the last one is, I was looking through the absolutely interest expense, we've been dealing with this, it's been a good problem to have we've been dealing with sale leasebacks and paying down the term that for five quarters at least. And it's kind of artificially brings up your interest expense, but I was looking through the EBITDA reconciliation, it looks like the exit on the term loan. Congrats on that, by the way, but the exit on the term loan was about 5.8 million. That's what that was showing, right? That's the kind of one-time interest expense in the quarter.
On the balance sheet to a non-cash or just non-cash it.
Yes. And by the way, if we'd like our manage team to be monitored, I think you guys might be too modest as possible. I mean, on cash tax effect, 26% on tax effect that I get about 4.3 million and you guys only have about 9.7 million shares. That's like [indiscernible] more earnings per share, if not for that one-time event, so right? I think I'm looking at that the right way?
Right. Yes. Appreciate adjusted EPS cap. Thank you. That's good.
Yes. So, all right. Well, Mitch, lot of guys usually retires before their mind and body require it. So I guess that sets, so congratulations on everything. Thank you.
Thank you. Thank you very much.
There are no further questions at this time. Presenters, I turn the call back over to you.
Well, thank you. Thank you for your time and interest in BlueLinx. As always, I know Dwight, and the rest of our team is really looking forward to share our second quarter results with you on our second quarter call. Thank you very much. Have a great day.
Thank you presenters. This concludes today's conference call. Thank you for participating. You may now disconnect.