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BlueLinx Holdings Inc. (BXC)
Q4 2012 Results Earnings Call
February 13, 2013 10:00 AM ET
Maryon Davis - Director Finance and IR
George Judd - Chief Executive Officer
Doug Goforth - Chief Financial Officer
Mark Wilde - Deutsche Bank
Greg Cole - Sidoti & Company
Previous Statements by BXC
» BlueLinx Holdings' CEO Discusses Q3 2012 Results - Earnings Call Transcript
» BlueLinx's CEO Discusses Q2 2012 Results - Earnings Call Transcript
» BlueLinx's CEO Discusses Q1 2012 Results - Earnings Call Transcript
As a reminder, ladies and gentlemen, this conference is being recorded today, Wednesday, February 13, 2013. Thank you. I would now like to introduce Maryon Davis with BlueLinx. Ms. Davis, you may begin your conference.
Thank you, Regina. And welcome everyone to the BlueLinx’s fourth quarter 2012 conference call. Our speakers this morning are George Judd, Chief Executive Officer; and Doug Goforth, Chief Financial Officer.
Our press release was issued earlier this morning. A copy of the release is available in the Investor Relations section of the company’s website at bluelinxco.com.
Before starting the call, I need to refer you to our Safe Harbor statement. I’d like to remind everyone that on today’s call, management may make forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, including all statements concerning future or unexpected events or results. Actual results could differ materially from those projected in the company’s forward-looking statements due to known and unknown risks and uncertainties.
A discussion of factors that may affect future results is provided in the company’s filings with the Securities and Exchange Commission. BlueLinx undertakes no obligation to publicly update or revise any forward-looking statements contained in these presentations based on new information or otherwise, except as required by law.
With that requirement completed, I’d like to remind our listeners that we have posted slides on our website. We will be referring to these slides during this call and we encourage you to view them during our remarks. Additionally, the slide package contains an appendix of supplementary tables available for your review.
We will begin the call this morning with opening remarks and an operations review from George. Then Doug will present an in-depth review of the financial statements. Lastly, George will add a final perspective before opening the call to your questions.
Now, let me turn the call over to our Chief Executive Officer, George Judd.
Thank you, Maryon. Good morning, everyone, and thank you for joining us. Before beginning our remarks regarding the fourth quarter 2012 results, I’d like to comment on our press release issued January 10, 2013, announcing a $40 million planned rights offering.
As the housing market and general economic conditions continue to improve, the additional capital raised in the rights offering will allow BlueLinx to participate more fully in these improving conditions. We have filed the registration statement with the Securities and Exchange Commission, which contains a preliminary prospectus.
As the right offering process is ongoing, we will not have any comments or take any questions regarding the offering. We will take questions at the conclusion of this call regarding the results and strategies. Thank you for your understanding and with that, I’ll begin the review of our fourth quarter and full year results.
Those of you following along with the slides posted on the Investor Relation sections of the BlueLinx website. I’ll begin with slide four.
The fourth quarter business environment improved as the underlying market fundamentals and leading indicators continue to strengthen, increasing the credibility of the housing market recovery.
U.S. builders started work on homes in December at the fastest pace in over four years and finished 2012 was their best year for residential construction since the early stages of the housing crisis.
According to the Commerce Department builders broke ground and homes in December at a seasonally adjusted annual rate of 954,000 units that is 12.1% higher than November’s annual rate and nearly twice the recession low reached in early 2009.
Both single-family and multifamily starts increased in December and the pace of new home construction permits picked up to a four and half year high. Total housing starts in the fourth quarter increased approximately 36% compared to the same period a year ago.
For the year, the Commerce Department reported total housing starts of 780,000 units, while this is roughly half the annual numbers starts consistent with a healthy market. It is an increased 28% from 2011 and is the most since 2008. This recovery is real, but we have way to go before we are in a healthy or normal market.
What’s that mean for BlueLinx? Last quarter I talked about our end-used markets and our efforts to gain a deeper understanding of the end-used markets of our product assortment. Recently as part of our presentation at the Barclays Industrial Distribution Forum, we discussed our estimated participation in end-used market, which is recapped on slide 23 in the Appendix of today’s conference call slides.
Consistent with our previous disclosures, single-family starts represents the housing end-used market to which BlueLinx is most closely tied. In December, the pace of single-family home construction increased 8% and its now 75% higher than the recession low reached in March 2009. Single-family actual housing starts ended the year up 24% from 2011.