Building and industrial products distributor BlueLinx Holdings received a written notice from the New York Stock Exchange (NYSE) that the company is not in compliance with its listing standards. NYSE said the company is not compliant with the standards in Section 802.01B of the NYSE Listed Company Manual because its average market capitalization has been less than $50 million over a consecutive 30-day trading period and its last reported stockholders’ equity was below $50 million.
Prior to the significant impact of the coronavirus (COVID-19) on the stock market, BlueLinx’s market capitalization was above $50 million. Marietta, Ga.-based BlueLinx said it has submitted a plan to the NYSE to regain compliance for listing standards as required by January 2022.
“We entered 2020 focused on profitability growing our business, and we got off to a solid start in the first quarter,” president and CEO Mitch Lewis said in a news release. “In response to the unexpected COVID-19 pandemic, we immediately developed plans and took actions that should give BlueLinx the financial flexibility necessary to provide long-term value for our stakeholders, and we are poised to continue our progress once the pandemic subsides.”
In April, BlueLinx furloughed approximately 15% of its corporate workforce, froze all hiring, and reduced or eliminated executive and key management base salaries for the next six months to cut operating costs. Lewis reduced his annual base salary of $850,000 to a monthly salary of $1 for the six-month period beginning April 1. BlueLinx also took steps to limit nonessential spending and reduce headcount and variable operating expenses related to local market demand declines.
On April 1, the distributor amended its term loan to provide greater financial flexibility by increasing the leverage ratio covenant levels in the second and third quarters of 2020. The company’s term loan principal balance was also reduced to approximately $69 million.
“We firmly believe that the erosion in our market capitalization was driven by the effects of the COVID-19 pandemic on the stock market and that a return to normalcy in the markets will cause our market capitalization to recover,” Lewis said.
BlueLinx Holdings has a distribution footprint serving 50 states and the company distributes its range of structural and specialty products to approximately 15,000 customers across the United States.
