Bluelinx Holdings Inc.

Greetings and welcome to the Blue Links Holdings third quarter 2022 results call. At this time, all participants are in a listen-only mode. A question and answer session will follow the formal presentation. If anyone should require operator assistance during the conference, please press star zero on your telephone keypad. As a reminder, this conference is being recorded. I would now like to turn the conference over to your host, Ryan Taylor, Vice President, Investor Relations and Treasuring for Blue Links Holdings. Thank you. You may begin.

Thank you, Operator, and good morning, everyone. Welcome to the Blue Links Holdings third quarter 2022 earnings call. Presenting today are Dwight Gibson, President and CEO of Blue Links, and Kelly Jansen, our Chief Financial Officer. Our third quarter news release and Form 10-Q were issued yesterday after the close of the market, along with our webcast presentation. These items are available in the investor section of our website, bluelinksco.com. We encourage you to follow along with the detailed information on the slides during our webcast. Today's discussion contains forward-looking statements. Actual results may differ from those forward-looking statements due to various risk factors and uncertainties, including the risks described in our most recent SEC filings. Today's presentation includes certain non-GAAP and adjusted financial measures that we believe provide helpful context for investors evaluating our business. Reconciliations to the closest gap financial measure can be found in the appendix of our presentation. At the conclusion of our prepared remarks, we will open the line for questions. And with that, I'll turn the call over to Dwight.

Thanks, Ryan, and good morning, everyone. Thank you for joining us on the call today. It continues to be an exciting time at Blue Links, and 2022 has been a historic year for our team. Despite a volatile end market environment, We are on pace to achieve our most profitable year ever, and we have invested prudently to advance our strategy of further strengthening our balance sheet. Through September, we have delivered $3.6 billion of sales, $415 million for adjusted EBITDA, and generated $246 million of operating cash. And we are on pace to deliver record earnings per share and operating cash in 2022. As compared to the first nine months of 2021, we grew sales by 9% and adjusted EBITDA by 18%, while generating operating cash nearly two times greater than the prior year period. Our strong financial performance has fortified our balance sheet and given us the flexibility to prudently invest in high return growth opportunities while maintaining significant liquidity for the future. Our disciplined capital allocation approach was punctuated with our strategic acquisition of Vandermeer forest products on October 3rd. Vandermeer provides us a platform for specialty growth in the Pacific Northwest and gives us a footprint that now serves all 50 states. This acquisition demonstrates our ability to identify and acquire high-quality strategic assets at an attractive valuation. We will continue to pursue attractive acquisitions and believe we are well positioned to be opportunistic, given our strong balance sheet and a softer macro environment. In addition to the Vandermeer acquisition, through the first nine months of this year, we have invested $19 million in capital expenditures to support future growth. And we repurchased 9% of our outstanding shares. Even after these investments, our financial position remains strong, with net leverage below one times and available liquidity over $560 million, including over $220 million of cash. As we prepare for 2023 and beyond, we believe our scale, strategic supply relationships, and strong balance sheet are key differentiators that position us to take advantage of opportunities as demand in the U.S. housing industry moderates. and we will continue to invest in our strategy to optimize productivity, increase our specialty product sales mix, and drive world-class performance while maintaining a disciplined approach to capital allocation.