BlueLinx's net loss tumbled 83% to $22.3 million during the second quarter of 2013 from a year earlier, the company announced today, as ongoing restructuring activities and gross margins lowered by a significant decline in structural wood product prices throughout the quarter rattled its bottom line. Despite the losses, revenues rose 16.9% to $604.6 million during the period from a year earlier.
In a call with analysts, the Atlanta-based distributor said it expects to be EBITDA-positive in the second-half of 2013. The company last saw a profit in 2006, when it netted $15.8 million. In the call, company officials revealed additional details about its restructuring program, which it announced in June, noting that the five distribution centers identified for sale or closure will be in the West. “We have been unprofitable in those locations for numerous years and with all the effort we made, they continue to be unprofitable and they continue to be unprofitable in our forecast in the future," said BlueLinx executive chairman Howard Cohen.
Cohen also discussed the company's push to grow its specialty products distribution to 60% of sales. Specialty unit volume accounted for 7.4% ($23.2 million) of sales growth in 2013, down from 8.3% a year earlier while the category accounted for 55% of revenues during the period compared to 59% a year earlier, a negative performance chief financial officer and treasurer Doug Goforth told analysts is attributable to the company's over-buying inventory going into the second quarter and the steep drop in structural wood-products prices that occurred during the period. Specialty gross margin of 13.4% increased from 13.3% a year earlier.
Cohen expects the company to continue to maintain its structural unit, despite the focus on specialty. "You have to have the structural products for people to give us the call," he said. "We just have to get our mix properly in place. Part of our decision making is to give our local managers more authority to bring in products that are appropriate for the marketplace, especially on the specialty side."
Structural wood product prices saw a steady downward trajectory throughout the quarter, which the company says hurt gross margins that were also stung by a higher sales mix of lower margin structural products, which grew from 41% of revenue a year ago to 45% of fiscal second quarter revenues.
BlueLinx’s second quarter gross profit came to $55.2 million, down 12.7% from $63.2 million in the year-ago period. Gross margins were 9.1% compared to 12.2% a year ago.
For the first half of 2013, BlueLinx’s losses widened to $35 million from $14.7 million in the first half of 2012. Revenues totaled $1.11 billion, a 14.1% increase from year-ago revenues of $970.7 million. Fiscal six-month results for 2013 include a pre-tax restructuring charge totaling $9.2 million, and a lower of cost of market reserve charge of $3.8 million.