On this page of StockholderLetter.com we present the latest annual shareholder letter from BlueLinx Holdings Inc. — ticker symbol BXC. Reading current and past BXC letters to shareholders can bring important insights into the investment thesis.
BlueLinx Holdings Inc. 2023 Annual Report
Dear Shareholders, 2023 was another year of significant progress for BlueLinx. We delivered solid results highlighted by strong margins in both specialty and structural products, significant cash flow generation, and an exceptional year-end balance sheet. We also continued returning capital to our shareholders through our share repurchase programs. We achieved these results in a year when rising interest rates and macroeconomic uncertainty adversely impacted demand in the housing and building products sector. For the year, we generated net sales of $3.1 billion, with specialty products accounting for 70% of net sales and 80% of our gross profit, while also delivering gross margins of 19.3%. Structural products also performed well and continue to complement our core specialty product categories, while remaining a key component of our full product offering. We continued to drive business, operational, and digital excellence to support our customer experience, maintain solid margin levels, and manage our cost structure. Our financial position remains strong, ending the year with $522 million of cash on hand, and total available liquidity of $868 million. We also generated operating cash flow of $306 million in 2023 as our efforts around inventory management significantly contributed to working capital reduction. During the fourth quarter of 2023, we exhausted our previous $100 million share repurchase authorization, and our Board of Directors approved an additional $100 million share repurchase authorization. For the year, we returned $42 million to shareholders by repurchasing nearly 6% of our shares outstanding. Looking ahead, we plan to pursue a three-pronged growth strategy focusing on specialty products sales growth, opportunistic mergers and acquisitions (M&A), and potential greenfield expansion. Within specialty products we will continue our focus on the five key areas of engineered wood, siding, moulding and millwork, outdoor living and industrial products, which we believe are favorable for two-step distributors and have attractive long-term prospects. In the coming years, we will strive to become the most technologically advanced two-step distributor of building products in the United States. Over the past couple of years, we have taken preliminary and foundational steps designed to improve our data warehouse and analytical capabilities, upgrade back-office tools, expand our EDI capabilities, and enhance our general technology hardware and infrastructure. In 2024, we will embark on a multi-year digital transformation journey that starts with architecting our data so that it better supports and advances our strategy, enhancing our transportation management capabilities and launching e-commerce functionality. I am extremely proud of my 2,000 fellow BlueLinx associates for their continued perseverance and can-do attitude during last year s difficult housing market, and for their selfless dedication to our customers and our suppliers. Our teams are committed to generating more profitable structural and specialty product sales, producing solid returns on working capital, and positioning ourselves for long-term success within fluctuating market conditions. Moving forward, that determination gives me tremendous confidence in our ability to realize our strategic vision and continue delivering long-term value to our shareholders. Thank you for your continued support of BlueLinx. Shyam Reddy President and CEO BlueLinx Holdings Inc.
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BXC Shareholder/Stockholder Letter Transcript:

BlueLinx Holdings Inc.
2023 Annual Report


Dear Shareholders,
2023 was another year of significant progress for BlueLinx. We delivered solid results highlighted by strong margins in
both specialty and structural products, significant cash flow generation, and an exceptional year-end balance sheet. We also
continued returning capital to our shareholders through our share repurchase programs. We achieved these results in a year
when rising interest rates and macroeconomic uncertainty adversely impacted demand in the housing and building products
sector.
For the year, we generated net sales of $3.1 billion, with specialty products accounting for 70% of net sales and 80% of our
gross profit, while also delivering gross margins of 19.3%. Structural products also performed well and continue to
complement our core specialty product categories, while remaining a key component of our full product offering. We
continued to drive business, operational, and digital excellence to support our customer experience, maintain solid margin
levels, and manage our cost structure.
Our financial position remains strong, ending the year with $522 million of cash on hand, and total available liquidity of
$868 million. We also generated operating cash flow of $306 million in 2023 as our efforts around inventory management
significantly contributed to working capital reduction. During the fourth quarter of 2023, we exhausted our previous $100
million share repurchase authorization, and our Board of Directors approved an additional $100 million share repurchase
authorization. For the year, we returned $42 million to shareholders by repurchasing nearly 6% of our shares outstanding.
Looking ahead, we plan to pursue a three-pronged growth strategy focusing on specialty products sales growth, opportunistic
mergers and acquisitions (M&A), and potential greenfield expansion. Within specialty products we will continue our focus
on the five key areas of engineered wood, siding, moulding and millwork, outdoor living and industrial products, which we
believe are favorable for two-step distributors and have attractive long-term prospects.
In the coming years, we will strive to become the most technologically advanced two-step distributor of building products
in the United States. Over the past couple of years, we have taken preliminary and foundational steps designed to improve
our data warehouse and analytical capabilities, upgrade back-office tools, expand our EDI capabilities, and enhance our
general technology hardware and infrastructure. In 2024, we will embark on a multi-year digital transformation journey that
starts with architecting our data so that it better supports and advances our strategy, enhancing our transportation
management capabilities and launching e-commerce functionality.
I am extremely proud of my 2,000 fellow BlueLinx associates for their continued perseverance and can-do attitude during
last year   s difficult housing market, and for their selfless dedication to our customers and our suppliers. Our teams are
committed to generating more profitable structural and specialty product sales, producing solid returns on working capital,
and positioning ourselves for long-term success within fluctuating market conditions. Moving forward, that determination
gives me tremendous confidence in our ability to realize our strategic vision and continue delivering long-term value to our
shareholders.
Thank you for your continued support of BlueLinx.
Shyam Reddy
President and CEO
BlueLinx Holdings Inc.

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