Revenues up 3.4% at BlueLinx Holdings
Despite intense price volatility during the past six months, Atlanta-based BlueLinx Holdings recorded a revenue gain in its quarter ended Oct. 2.
In an environment where prices for certain structural wood products dropped as much as 20% in three months, the distributor posted revenues of $464.7 million, up 3.4% compared with the same quarter last year. Still, the company incurred a net loss of $14.9 million, compared with a net loss of $13.5 million in last year's quarter.
President and CEO George Judd said the volatile market made operating conditions difficult. "The price volatility seen in the last six months is some of the worst I have seen in my 25 years in this industry," he said in a prepared statement. "This volatility in the wood markets had a negative impact on our margins during the quarter as our inventories returned to current market values. Despite this challenging environment, we increased sales by 3.4%, while controlling our operating costs and generated approximately $33 million in cash from operations during the third quarter."
Gross profit for the third quarter totaled $49.9 million, down 9.7% from $55.3 million in the prior-year period. Gross margins decreased to 10.7% from the 12.3% generated in the year-earlier period. The decline in gross margin was largely driven by a sharp decline in underlying wood-based product prices during the quarter.
"Our overall performance for the third quarter was impacted by a lack of improvement in actual housing starts and continued deterioration of wood-based product prices," Judd said. "Total housing starts for the quarter fell 0.8% from year-earlier levels, while prices for key grades of structural wood products dropped 20% on average from the end of the second quarter."