At BlueLinx, restructuring is under way
Atlanta-based building products distributor BlueLinx Holdings says it will take a hard look at five of its distribution centers with a view toward selling or possibly closing some of them.
The action, which also includes a "realignment of headquarters resources," follows the departure of CEO George Judd, who left the company last month. A search for his successor is ongoing.
In a statement released late Tuesday, the company said its strategic restructuring includes "the realignment of headquarters resources and a strategic review of five distribution centers."
Without identifying them, the company said it will continue to fully operate the distribution centers in question during the process, which is expected to be completed during the third quarter. In total, the company has about 55 distribution centers.
"The actions we announced today better focus our business and demonstrate our strong commitment to returning BlueLinx to profitability in the current operating environment, while continuing to invest in the areas of the country that we believe will provide the best return for our stockholders, business partners and employees," said Howard Cohen, executive chairman.
In its most recent quarter, the company posted a loss of $12.6 million.
In connection with the restructuring plan and the change in the company's executive leadership, the company expects to recognize aggregate pre-tax restructuring charges in its current fiscal year in the range of $11.5 million to $12.5 million.
Excluding the five distribution centers, the company expects these actions to generate annual payroll related and other cost savings in the range of $9 million to $10 million.
Upon completion, the company expects to generate approximately $25 million to $27 million in operating cash, a portion of which will be reinvested in its other markets, with the balance used to pay down its long-term debt, the company said.