Net sales slid on a year-over-year basis in the fiscal fourth quarter for BlueLinx while the distributor posted a quarterly net loss of $18 million. BlueLinx attributed the net loss to a one-time charge of $30.4 million related to the settlement of the company’s defined benefit pension plan.

According to BlueLinx, the company has been “relieved of all responsibility for our defined benefit pension plan through the purchase of an annuity with a highly rated insurance company that will make all future benefit payments and assume all risks.”

Net sales in the fourth quarter decreased $135.2 million on a year-over-year basis to $713 million. Gross profit decreased 21.6% on a year-over-year basis to $118 million and gross margin in the quarter, 16.6%, was down 120 basis points from the prior year period.

Net sales of specialty products, including engineered wood, siding, millwork, outdoor living, specialty lumber and panels, and industrial products, decreased 17.7% year-over-year to $487 million in the fourth quarter. BlueLinx said the decline was primarily due to price deflation across several product categories. Net sales of structural products, including lumber, plywood, oriented strand board, rebar, and remesh, decreased 11.8% year-over-year to $226.0 million in the fourth quarter. The decreases were due to price deflation in the average composite price of framing lumber, according to BlueLinx.

“Our fourth quarter and full year 2023 were highlighted by strong margin performance and significant free cash flow, clearly demonstrating our ability to generate solid results and manage our working capital effectively, despite the macroeconomic and housing market uncertainties the industry continues to experience,” Shyam Reddy, president and CEO of BlueLinx, said. “Specialty products continued its strong margin performance and accounted for 70% of net sales and 80% of gross profit for the year.”

Adjusted EBITDA in the fourth quarter was $36.5 million, or 5.1% of net sales, compared to $63.1 million, or 7.4% of net sales in the prior period.

“We were pleased with our fourth quarter specialty gross margins of 19.4%, which were higher than our expected 18% to 19% range, as well as our structural gross margins, which were 10.6%, and above our 9% to 10% expectation,” Andy Wamser, chief financial officer of BlueLinx, said.

For the full fiscal year, net sales decreased 29.5% compared to 2022 to $3.1 billion in 2023. Gross profit declined 36.7% to $527.0 million and gross margin slipped 190 basis points to 16.8%.

Net sales of specialty products for the full fiscal year fell 23.9% to $2.2 billion, driven by price deflation and lower sales volume. Net sales of structural products decreased 39.7% to $952.1 million in 2023. The decrease was due to price deflation in the wood-based commodity markets, which was reflected in 47% and 32% decreases in the average composite price of framing lumber and structural panels.

Net income for 2023 was $48.5 million, down from $296.2 million in 2022. Adjusted EBITDA was $182.8 million, or 5.8% of net sales, compared to $477.7 million, or 10.7% of net sales, in 2022.