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08/04/2022

Commodity pricing impacts BlueLinx Q2 sales, profits

Sales of specialty products, including EWP, siding, millwork, outdoor living, and specialty lumber rise 17% for the quarter.
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BlueLInx 2022 Truck

Building products distributor BlueLinx reported second-quarter sales declined 5% to $1.2 billion from second quarter 2021 sales of $1.3 billion.

BlueLinx said net sales of specialty products, which includes  engineered wood, siding, millwork, outdoor living, specialty lumber and industrial products, increased $113 million, or 17%, to $788 million in the second quarter. This growth was primarily driven by strategic pricing actions, offset partially by slightly lower volume when compared to the prior year.

Sales of structural products for the quarter, including lumber, plywood, oriented strand board, rebar, and remesh, decreased 29%, to $452 million. The decrease in structural sales and gross profit was due primarily to a significant decline in the average price of wood-based commodities, the distributor said.

The Marietta, Ga.-based company posted a net income of $71 million for the second quarter, dropping 37% from a net income of $113 million for the same period last year.

Net cash generated from operating activities was $101 million in the second quarter 2022 compared to $47 million in the prior year period.

The increase in cash generated from operating activities compared to the prior year was driven primarily by a $74 million reduction in accounts receivable which benefited from wood-based commodity deflation during the period.

BlueLinx is  a distributor of residential and commercial building products with both branded and private-label SKUs across product categories such as lumber, panels, engineered wood, siding, millwork, and industrial products.

The company serves about 15,000 customers in 45 states, including national home centers, pro dealers, cooperatives, specialty distributors, regional and local dealers, and industrial manufacturers.

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Dwight Gibson BlueLinx CEO
Dwight Gibson

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The Bottom Line: As commodity prices stepped back in the second quarter, BlueLinx sees sales decline 5% as profits fall 37%.

What the CEO said: “We are closely monitoring the macro-economic environment as broad-based inflation and the rapid rise in mortgage rates have put pressure on home affordability and new home starts,” said Dwight Gibson, president and CEO of BlueLinx. “Given these developments, we anticipate a slowdown in the U.S. housing industry over the coming quarters. However, we believe the undersupply of homes, demographic shifts, repair and remodel activity and high levels of home equity, among other factors, will continue to support the broad residential housing market.”  
Company info: Click here to read the full second quarter 2022 financial report from BlueLinx.

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