BlueLinx reported today a reduced net loss in the quarter ended April 2 vs. the year-earlier period as increased debt payments overshadowed a swing to an operating profit and higher sales and gross profit.
Today's earnings report came three weeks after the Atlanta-based distributor announced a recovery plan in which it will close four distribution centers by Dec. 31, stop selling some products, and evaluate opportunities to sell or lease back some of its properties.
The net loss status improved to $6.1 million from the $8.9 million net loss recorded in the three-month period ended April 4, 2015. Conditions improved in part because sales rose 4.3% to $474.3 million and unit volumes grew by 10%. In addition, the gross profit climbed 14.7% to $57.6 million, so gross profit margin went up 1.1 points to 12.1%. All that helped operating profit to move into the black at $321,000 for the quarter compared with a year-earlier operating loss of $2.1 million.
Against those positive developments, BlueLinx reported its interest expense for the quarter rose to $7.2 million from $6.6 million. That's what caused the continued net loss. As of April 2, BlueLinx's long-term debit totaled $423.6 million.
BlueLinx prefers to measure itself in terms of adjusted EBITDA--earnings before all items related to interest expenses, taxes, depreciation, amortization, and certain other non-cash items. By that metric, adjusted EBITDA jumped to $7 million--the best quarter since 2007, BlueLinx said--from just $388,000 a year earlier.
“We are encouraged that our working capital initiatives drove increased productivity, largely driven by our inventory reduction efforts, resulting in a reduction of our cash cycle by seven days when compared to the same period in 2015," Susan O'Farrell senior vice president and chief financial officer, said in a news release. "Additionally, even in light of the refinancing costs we incurred in Q1, our net debt of $424.8 million for first quarter 2016 was reduced by $13.7 million when compared to the same period a year ago, with decreases in both our mortgage and asset-based revolving credit balances.”