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.
Lumber Liquidators closes IPO
Toano, Va.-based specialty hardwood flooring retailer Lumber Liquidators has closed its initial public offering.
The company offered 10 million shares of common stock at a price of $11 per share, including 3.8 million shares offered by the company and 6.2 million shares offered by selling stockholders.
The company intends to use the net proceeds of approximately $36.4 million from the offering to repay outstanding debt and support the growth of the business, which includes plans for 25 stores in 2007, followed by 30 to 40 new stores per year until 2011.
Goldman Sachs and Merrill Lynch acted as joint book-running managers with Lehman Brothers, Banc of America Securities and Piper Jaffray serving as co-managers for the offering.
Lumber Liquidators has seen same-store sales growth of 8.5 percent to 9 percent each quarter this year. According to the company’s S-1 filing with the Securities and Exchange Commission, in 2006 Lumber Liquidators had sales of $332 million, up 35 percent from sales of $245 million in 2005.
The retailer currently operates 111 small-format stores in the United States. The company is traded on the New York Stock Exchange under the symbol “LL.”
NKT Holdings withdraws initial public offering
Providence, R.I.-based HVAC company NTK Holdings has canceled its initial public offering according to a Securities and Exchange Commission filing this week.
The company said that the application was withdrawn “due to the unsettled market conditions.” The company had planned to use the IPO proceeds to repay debt.
The announcement was part of Nortek’s third-quarter earnings statement. Nortek, which reported a 4 percent increase in sales, is a subsidiary of NKT.
The company reported net earnings of $37.6 million for the period ended Sept. 29, down 44.9 percent from last year’s earnings of $67.7 million in the same period last year. Nortek also reported net sales of $602 million, up 4 percent from $579 million last year.
NTK Holdings manufactures air conditioning, heating ventilation and home environmental control technology products.