Bluelinx Holdings reported a third quarter 2013 net loss of $3.2 million, compared to year-ago net income of $3 million, while net sales in the quarter totaled $558 million, a 12% increase over second quarter 2012 net sales of $496.8 million.
The Atlanta-based building products distributor said overall unit volume increased 11.9% compared to the same period a year ago. On a comparable basis, same center revenues for the fiscal third quarter increased 14.2%.
Gross profit for the fiscal third quarter totaled $62.5 million, up 3.2% from $60.5 million in the year-ago period. Gross margins were 11.2% compared to 12.2% a year ago and were affected by a higher mix of lower-margin structural sales, low margin sales related to the closure of five distribution centers, and a highly competitive pricing environment. Same center gross margins were 11.5% compared to 12.1% a year ago.
"The implementation of the company's previously announced restructuring program is proceeding as planned, and sales and operational initiatives are having a positive impact," said chairman Howard Cohen. "Despite the restructuring this quarter, the company achieved a significant improvement in same center results.”
Fiscal third-quarter operating expenses of $59.4 million increased $9.1 million compared to the same period a year ago. Fiscal third-quarter operating expenses included $0.9 million in net gains from significant special items compared to a $9.2 million gain from the sale of certain properties in the prior period.
After adjusting for significant special items in the fiscal third quarters of 2013 and 2012, operating expense as a percentage of revenue improved to 10.8% in the third quarter of 2013 from 12.0% in the third quarter of 2012. Reported operating profit for the quarter was $3.1 million, compared to an operating profit of $10.3 million a year ago and reflects the increase in gross margin dollars and the significant special items detailed in the adjusted net loss table below.
“We have launched other initiatives this quarter that we believe will add significantly to the company's financial performance,” Cohen said. “We are pursuing multiple avenues for growth in addition to accelerated specialty product growth, including an emphasis on faster-growing markets and expanding into adjacent market segments like multi-family.”
During the company’s third quarter earnings call, CFO Doug Goforth told investors that specialty sells increased 11% year over year, reflecting a 10.2% increase in unit volume and a slight increase in product selling price. “Specialty products comprise 57% of total sales up from 55% in the second quarter as we continue to focus on higher products and services, down from 58%,” he said.”
Structural product sales increased 15% over same period last year, driven by increases in volume and price increases, he said.
“We have definitely seen an uptick in demand [for home repair and remodel], it’s continued to be relatively strong in October,” Cohen said. “There’s going to be the normal seasonal slowdown, but October, particularly in repair and remodel continues to be fairly robust.”
Lumber prices rose in the third quarter, he said, but will likely stabilize and even fall by the first quarter of 2014. “Lumber is the largest product code we sell. The other structural wood products were down on a year-over-year basis; in fact OSB was down significantly.”
Lumber prices at “fairly high level” right now and will probably decrease somewhat in the coming quarters. Goforth said, “As we get into the second quarter of next year, you’re going to see a fairly dramatic decrease in prices.”
Also, Cohen noted that a new CEO will be on board by January 2014. Former CEO George Judd left the company in May. The company’s search team has interviewed five candidates for the post and plans to announce the new company head later this year.