BlueLinx expects correction to linger
BlueLinx, one of the housing industry’s largest building materials distributors, reported dips in revenues, net income and gross profit, pointing to a deep cyclical housing correction expected to linger through 2008.
The Atlanta-based company announced third-quarter sales of $1.02 billion, a 15.6 percent decline from the previous year. Net income for the quarter, which ended on Sept. 29, totaled $890,000, compared to $2.3 million in the third quarter of 2006.
“Our business environment deteriorated significantly in the third quarter as demand declined sharply,” said BlueLinx CEO Stephen Macadam. “This challenging environment is continuing into the second half of 2007, and we do not see any signs of recovery on the horizon for our housing-related business.”
Housing starts declined 24 percent compared to the third quarter last year, and the company is entering the slow winter period.
BlueLinx, whose business is 50 percent tied to new home construction, has taken steps to reduce costs, laying off a reported 135 salaried employees in recent weeks. The company distributes building materials—as well as special products like insulation, molding, composite decking, roofing and vinyl siding—through a network of more than 70 warehouses throughout the United States and Canada.
BlueLinx made a corporate change in September, hiring long-time Do it Best executive Dave Heine as senior national account executive in charge of Do it Best and other independent dealers. In his 28 years with Do it Best, Heine’s titles included vp-lumber and building materials, vp-building products, vp-purchasing for pro and commercial products, manager of the lumber and commodities division and—most recently—vp-retail development.