Sales and net income both decreased significantly on a year-over-year basis in the second quarter for BlueLinx Holdings. Despite the declines, president and CEO Shyam Reddy said the company was able to maintain price and cost discipline in a market that remains soft compared to last year during the same period.
“Our specialty product gross margins improved to just over 19%, and we generated operating cash of $64 million during the period, further strengthening our overall financial condition,” Reddy said. “I am very pleased with the team’s focus on our strategic initiatives and the quality of their execution.”
Net sales in the second quarter decreased 34% to $816 million, while gross profit decreased 33% to $136 million. Gross margin improved 30 basis points year-over-year to 16.6%.
Second quarter net sales of specialty products, which includes engineered wood, siding, millwork, outdoor living, specialty lumber and panels, and industrial products, decreased 28% year-over-year to $571 million. The decline was due to a combination of deflation and lower volume, according to BlueLinx. Gross profit from specialty product sales decreased 40% to $109 million while gross margin declined to 19.1% from 22.9% in the prior-year period.
Net sales of structural products in the second quarter, which includes lumber, plywood, oriented strand board, rebar, and remesh, decreased 46% year-over-year to $245 million. The decrease was primarily due to declines in the average composite price of framing lumber and structural panels. Gross profit from sales of structural products was $27 million, an increase of $6 million, while gross margins increased to 11.0% from 4.7% in the second quarter of 2022.
Quarterly net income was $24 million, down from $71 million in the prior-year period.
“The building products market is improving, and two step distribution will continue to play a meaningful role given our product mix and value proposition,” Reddy said. “We remain focused on the execution of our growth strategy and consistent in our approach to capital allocation to drive long-term value creation.”
Adjusted EBITDA in the second quarter was $49 million, or 6.0% of net sales, compared to $112 million, or 9.1% of net sales, in the second quarter of 2022.