One year into its restructuring, BlueLinx reported today $3.2 million in net income in the second quarter, swinging dramatically from the $22.3 million loss in the year-earlier period, despite a 12.1% fall in sales to $531.5 million.
The Atlanta-based distributor was able to boost its bottom line in part by increasing its gross profit 12.4% to $62 million while cutting its selling, general, and administrative costs 27.2% to $49.9 million. One result was that operating income swung to a $9.7 million profit in the three months ended July 5 from a $15.5 million operating loss in the quarter ended June 29, 2013.
BlueLinx announced a restructuring plan in June 2013 that included the "realignment of headquarters resources" and the potential closing of five distribution centers. Three months later, in September 2013, it closed facilities in Portland, Ore.; Sioux Falls, S.D.; Stockton, Calif.; Phoenix; and Boise, Idaho. Also last September, BlueLinx sold an office building in Denver.
BlueLinx's earnings announcement focused on adjusted EBITDA for only those centers open in 2013 and 2014's second quarters. It defined adjusted EBITDA as net income plus interest expense and all interest expense-related items, plus income taxes, stock compensation, depreciation and amortization, and excluding "other non-cash items and certain other adjustments."
By that measure, same-center net sales dropped 6.9% to $531.5 million, but same-center adjusted EBITDA climbed to a positive $10.6 million from a negative $3.5 million a year earlier. "The same-center sales decline primarily was due to a decline in structural unit volumes and certain structural product price declines relative to year-ago levels," BlueLinx said. It did not elaborate.
"This result is encouraging as we are beginning to see the benefits from our key business initiatives as well as our restructuring efforts undertaken last year, which continue to position the company for future success," said Mitch Lewis, who took over as BlueLinx president and CEO in January. "Adjusted EBITDA of