Building products distributor BlueLinx reported strong third quarter financial results, including a 28.3% year-over-year (YOY) increase in net sales and a significant YOY growth in net income. Net sales rose to $871 million in the fiscal third quarter, compared to $679 million from the third quarter in 2019. The company also reported gross profit increased $65 million YOY to $159 million in the fiscal third quarter, according to the distributor’s quarterly earnings report.
BlueLinx said net sales during the quarter benefited from “historic price inflation” across several key wood-based commodities, which particularly benefited sales of structural products. The impact of wood-based commodity price inflation on structural product net sales is estimated to have increased overall net sales between $105 million and $115 million in the quarter, according to BlueLinx.
The company recorded a net income of $55 million in the quarter, compared to a net loss of $7 million in the third quarter of 2019. BlueLinx said net income benefited from approximately $8 million of non-recurring items, including a gain on a sale-leaseback transaction involving the distributor’s Denver, Co., facility. Excluding non-recurring items, net income increased by $49 million on a YOY basis in the third quarter.
“This was a transformative quarter for BlueLinx as we took advantage of our operational improvements over the last year to maximize our financial performance,” Mitch Lewis, president and CEO of BlueLinx, said in a prepared statement. “Although the COVID-19 pandemic continued to affect our business and the broader economy, we drove significant increases in net sales as well as historical levels of net income and adjusted EBITDA by closely managing an improving housing market and an unprecedented inflationary environment in our wood-based structural product markets.”
BlueLinx reported a record adjusted EBITDA of $81 million in the third quarter, compared to $19 million in the prior-year period. Cash provided by operating activities was $61 million in the third quarter, an increase of $46 million YOY. BlueLinx said the increase in cash was the primary factor in the YOY increase of adjusted EBITDA.
BlueLinx said the negative impact of the COVID-19 pandemic was offset by the improving housing market and the inflation in wood-based commodity prices. To capitalize on these favorable trends, BlueLinx added two leaders to run its national dealer and home center customer markets to capitalize on the company’s geographic footprint and continued its strategic supplier partnerships. To mitigate headwinds from COVID-19, BlueLinx said it remains committed to improving operating efficiency and the distributor is focusing on reducing non-essential costs throughout the organization, while selectively investing in resources to support strategic sales growth.
Marietta, Ga.-based BlueLinx has a distribution footprint serving 40 states and the company distributes its range of structural and specialty products to approximately 15,00 customers across the United States.
