BlueLinx, the Atlanta-based distributor that’s deep into a debt-cutting revamp, announced March 2 that it swung to a net profit of $10.4 million in 2016’s fourth quarter from a $6.1 million in the three months ended Jan. 2, 2016. That came despite net sales shrinking to $421.7 million from $428.2 million.
Gross profit increased just $900,000 to reach $52.4 million, while gross margin widened to 12.4% from a year-earlier 12.0%.
BlueLinx’s debt numbers merit deeper study than most LBM firms, because much of its effort that past year have been devoted to delveraging itself. The results showed up several ways:
- BlueLinx recorded $13.4 million in gains from property sales during the quarter and $28.1 million from that same route for the year.
- Interest expenses in the fourth quarter dropped to $5.3 million from $7.0 million.
- The balance sheet’s long-term debt line shrank to $271 million as of year end 2016 from $377.8 milion roughly a year before.
- Cash cycle days shrank to 53 in the quarter from a year-earlier 64.
“We closed and sold certain facilities and rationalized our inventory by discontinuing certain underperforming products,” the company said in its earnings announcement. “When excluding the effects of these operational efficiency initiatives, adjusted same-center net sales were $418.9 million for the fiscal fourth quarter, an increase of $47.7 million or 12.9% from this period a year ago.”
Adjusted EBITDA–earnings before interest, taxes, depreciation, amortization, restructuring costs and–significantly in this case–gains from sales of properlty climbed 36.7% to reach $5.7 million.
For all 2016, BlueLinx returned to the black, posting a net profit of $16.1 million vs. 2015’s $11.6 million net loss. This occurred even though the company was generated $1.88 billion in net sales compared to $1.92 billion from the prior year. Gross profit swelled 12.1% to $227.3 million, while the gross margin fattened to 12.1% from 11.6%.
