BlueLinx's net loss widened to $9.8 million during the second quarter ended July 2, a more than $6 million difference compared to the same period last year, the company announced today. Net sales at the building products distributor fell 7.3% to $500.8 million.
The company said strong specialty product unit volume growth added some value to the results, but that the continued downtown in the housing market impacted both unit volume and prices in the structural products business.
Sales in the structural products segment fell 27.1% to $193.6 million, while specialty products sales managed to grow 10.7% to $316.6 million. On the structural products side, plywood saw sales fall 10.5% to $215.8 million, while OSB sales fell 38.4% to $101.3 million. Sales for lumber dropped 19.4% to $177.4 million.
Specialty products sales were driven by a 16.5% increase in unit volume. BlueLinx said about two-thirds of the decline in structural product sales resulted from decreased unit sales as the company focused on sustaining margins for its structural products against faltering wood-based structural products prices during the quarter.
"Our achievements for the quarter included the successful expansion of specialty products to more than 60% of total sales as specialty product unit volumes increased 16.5% from a year ago, setting a new record for quarterly unit volume growth in our specialty category," said president and CEO George Judd. "I am pleased to see our specialty business responding to our targeted growth initiatives."
The quarter also featured a number of events involving the company's financing. On May 10, BlueLinx amended its revolving credit agreement, which became effective on July 29. On July 14 the company entered into an amendment to change its existing loan agreement on owned real estate. Finally, on July 22, the subscription period for the company's $60 million rights offering expired with the company raising $58.5 million in proceeds from the event. The rights offering left the 55% stake in the company held by Cerberus ABP Investor LLC. The company plans to use the funds to pay off debt and fund capital improvements.
Overall, gross profit for the second quarter was down 10.1% to $57.6 million, while gross margins declined slightly to 11.5%, compared with 11.9% a year ago. Operating expenses fell 1.8% to $59.4 million.