Building products distributor BlueLinx reported significant year-over-year (YOY) growth in both revenue and profitability during the first quarter of 2021. The company has benefitted from the continued strength in residential construction and home renovation as well as price escalations due to ongoing supply-demand imbalances.
“The ongoing supply-demand imbalances for many of our products continued to further price escalations during the first quarter, a trend that is continuing in the second quarter,” BlueLinx president and CEO Mitch Lewis said in a prepared statement. “We are the beneficiary of these price escalations, which are a key near-term driver of improved margin realization and profitability, while remaining focused on preemptive actions to help mitigate the impact of downside commodity price risk.”
The company’s net sales grew 55% on a YOY basis to $1.0 billion in the first quarter of 2021, the highest first quarter net sales for the company since 2006, according to BlueLinx’s quarterly earnings report. BlueLinx’s gross profit increased to $180 million in the quarter from $93 million in the first quarter of 2020. First quarter net sales for specialty products, which includes engineered wood, cedar, molding, siding, insulation, and metal products, accounted for $563 million of net sales, up from $421 million in the prior-year period. BlueLinx attributed the YOY improvement primarily to price escalations. Net sales of structural products increased $222 million on a YOY basis to $462 million in the first quarter. The distributor said wood-based commodity price inflation is likely the primary driver in the increase in net sales in the structural category.
Gross margin for specialty products was 19.3% in the first quarter of 2021, a 290 basis point increase compared to the first quarter of 2020. Structural product gross margin increased 540 basis points YOY to 15.5% for the first quarter. Gross margin across all sales increased 350 basis points to 17.6% during the first quarter, according to BlueLinx.
“Our business transformation continued during the first quarter, supported by a significant increase in gross profit across both product categories,” Kelly Janzen, CFO of BlueLinx, said. “Since the end of the first quarter of 2020, we have reduced our total outstanding bank debt by over $100 million. Late in the quarter, we voluntarily repaid the approximately $16 million of remaining outstanding principal under our term loan, an action which further simplifies our capital structure and reduces our cash interest expense.”
BlueLinx reported a net income of $62 million in the first quarter, a significant increase compared to the net loss of $0.8 million posted during the first quarter of 2020. BlueLinx said when excluding the impact of non-recurring items, net increased by $64 million on a YOY basis. The distributor posted an adjusted EBITDA of $107 million in the first quarter, compared to $20 million in the prior-year period.
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.
