BlueLinx eked out a net profit of $600,000 in the first quarter despite seeing sales fall 9.6% from the year-earlier period to hit $428.6 million, the distributor reported today.
Its finish in the black marked a big swing from its $7.3 million net loss during last year’s opening three months. Management has spent much of its time during the past year slashing debt, in part by selling and closing facilities and discontinuing sales of some products. If one counts only the revenues from distribution centers still in operation, the adjusted net sales total is a $9 million, or 2.1%, gain from a year ago, BlueLinx noted.
The Atlanta-based company’s debt principal now is $111.3 million less than it was a year ago. That said, BlueLinx still has $320.6 million in principal owed on its revolving credit facilities and mortgages.
Gross profit slipped 5.5% to $54.4 million, but the gross profit margin of 12.7% is 60 basis points higher than it was over 2016’s first three months. That came in part because selling general, and administrative costs shrank 4.2% to $52.9 million. SG&A would have been $4.5 million lower, the distributor noted, were it not for the one-time charge that BlueLinx incurred when it entered into a new collective bargaining agreement at its Chicago facility. That $4.5 million will be paid out over 20 years.
Like a lot of companies, BlueLinx likes to measure its progress in terms of adjusted EBITDA, which it defines as earnings before interest, taxes, depreciation and amortization plus interest expense, gains or losses from property sales, share-based compension expenses, multi-employer pension withdrawals, restructuring and severance costs, legal fees, and refinancing-related expenses. By that metric, adjusted EBITDA inched up to $7.3 million in the first quarter from a year-earlier $7.0 million.
BlueLinx then went further and offered another metric: Same-center adjusted EBITDA. That accounting showed an increase, to $7.3 million from $5.9 million.
“Our continued emphasis on local market strategy and sales excellence, while successfully executing our deleveraging strategy, is reflected in the results we reported this quarter,” Mitch Lewis, BlueLinx’s president and chief executive officer,” said in the company’s earnings announcement. “We will remain focused on improving the operating results at BlueLinx as we continue to execute on our strategy to deleverage our balance sheet and improve our financial strength.”
