BlueLinx battles growing pains, pricing in Q3
Commodity pricing poses a challenge after Cedar Creek acquisition.
BlueLinx Holdings reported third quarter 2018 net sales of $859.8 million, up 79.4% from net sales of $479.3 million in the third quarter 2017.
BlueLinx completed its $413 million acquisition of fellow building products distributor Cedar Creek on April 13. Pro forma net sales for BlueLinx were up $18.4 million or 2.2%.
The Atlanta, Ga.-based company also posted a net loss of about $10 million for the quarter compared to a net income of $5.7 million in the third quarter 2017. BlueLinx said the net loss was impacted by a partial multi-employer pension plan withdrawal charge of $6.5 million and acquisition related fees of $3.8 million. Pro forma net loss for the third quarter was $6.2 million.
“BlueLinx remains focused on integrating our second quarter acquisition of Cedar Creek and is pleased to announce that we expect our synergies efforts by the end of the year to result in an annual benefit of at least $25 million in 2019,” said Mitch Lewis, president and CEO of BlueLinx.
Lewis said that the wood-based commodity markets have proven challenging over the last few months, but noted that the company’s third quarter performance “provides evidence that our diversity can afford protection during market dislocations.”
“We remain confident in our ability to deliver the expected synergies of at least $50 million annually, continue to operate effectively to realize market opportunities from our combination, and are well-positioned to drive enhanced value for our customers and shareholders,” Lewis said.
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