Building products distributor BlueLinx Holdings reported net sales growth and net loss contraction in the first quarter of 2020. Net sales increased 9% on a year-over-year (YOY) basis to $662 million in the first quarter, according to the company’s quarterly earnings report. BlueLinx said the jump in net sales was driven by higher volumes and $2 million in commodity price inflation.
The distributor recorded a net loss of $0.8 million for the first quarter, compared to a net loss of $6.7 million in the first quarter of 2019. The first quarter net loss included one-time charges for real estate financing obligations costs of $2 million, integration-related charges of $1 million, share-based compensation compensation expenses of $1 million, and $1 million for restructuring charges. BlueLinx’s net loss in the first quarter of 2019 included integration-related charges of $5 million, share-based compensation expenses of $1 million, and restructuring costs of $1 million.
“Our first quarter results show the continuous and sustained progress that began in the second half of 2019 and a strong start to the year,” president and CEO Mitch Lewis said in a prepared statement.
Marietta, Ga.-based BlueLinx reported gross profit increased $7 million YOY to $93 million in the first quarter. The distributor’s gross margin improved 60 basis points YOY to 14.1%. BlueLinx said gross margin improved in both structural and specialty categories on a YOY basis. BlueLinx’s adjusted EBITDA for the first quarter of 2020 was $19.9 million, a $3.3 million increase from the first quarter of 2019.
“Our focus shifted towards the end of the first quarter as we implemented numerous actions in response to the COVID-19 pandemc, including our highest priority of ensuring a safe and healthy workplace environment for our associates,” Lewis said. “We cannot predict how the business and social restrictions stemming from the pandemic will ultimately impact the U.S. housing industry and broader economy, however, we do know that our business has weathered a wide range of economic cycles.”
Lewis said the company’s primary short-term concern is the safety and well-being of its employees, their families, and its communities. In early March, BlueLinx implemented policies and procedures to protect associates while ensuring it continued to serve its customers and support its suppliers. The company took several measures to reduce the cost structure to ensure financial and operational flexibility. These measures include a pause on new hiring, a reduction of headcount and variable operating expenses correlating to local market demand declines, and a reduction or elimination of executive and key management base salaries for the ensuing six months. As part of its cost-cutting measures, BlueLinx furloughed approximately 15% of its salaried workforce.
BlueLinx said in April, many of its markets experienced negative sales volume on a YOY basis. Certain markets where stronger stay-at-home orders are in effect have experienced more severe disruptions to sales volume. As a result, April daily sales were down 11% YOY for BlueLinx.
BlueLinx has a distribution footprint serving 40 states and the company distributes its range of structural and specialty products to approximately 15,000 customers across the United States.
