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.
HBSDealer Stock Watch: Wednesday’s Ticker
|Here’s how hardware and building supply stocks performed on Wednesday.|
|BLDR (Builders FS)||13.61||-1.80%|
|BMCH (BMC Stock)||17.69||-0.28%|
|CENT (Central Garden)||32.36||N.C.|
|DE (Deere & Co.)||148.43||+2.03%|
|HD (Home Depot)||187.23||+2.87%|
|LL (Lumber Liquidators)||12.34||-0.64%|
|SMG (Scotts Miracle-Gro)||75.77||+6.87%|
|TSCO (Tractor Supply)||95.75||+2.76%|
|UFPI (Universal Forest)||29.04||+0.73%|
Homewood Holdings acquires Building Supply and Lumber Co.
The Sacramento pro dealer serves customers throughout Northern California.
Homewood Holdings, LLC, a portfolio company of private equity investment firm Building Industry Partners (BIP), has acquired Building Supply and Lumber Co., Inc.
Founded in 1946, Building Supply and Lumber is an independent pro dealer based in Sacramento serving customers throughout Northern California.
Building Supply and Lumber is the third business acquired under the Homewood Holdings umbrella, since the formation of Homewood Holdings in early 2016 by BIP and building industry veteran, Jim Stockman.
Building Supply and Lumber’s former owner, Stan McMaster, will work with Homewood as a consultant to continue servicing the Northern California LBM market and help grow Homewood’s market share in the pro dealer segment. The transaction enables McCaster to transition into retirement, following a long and successful career spent building one of the area’s leading LBM distributors, BIP said.
In addition to Building Supply and Lumber, Homewood Holdings consists of Homewood Building Supply, based in greater Sacramento, Calif., and Evergreen Lumber, based in greater Seattle, Wa.
Jim Stockman, CEO of Homewood Holdings, commented, “We’ve known and respected Stan for many years, and this acquisition helps accelerate Homewood’s growth plan and adds highly valuable customer relationships to our organization.”
Homewood Holdings also said that it is actively seeking to partner with, or acquire, additional strong independent pro dealer organizations throughout California and the Pacific Northwest.
Founded in 2008, BIP is run by managing partners Matt Ogden and Zach Coopersmith. BIP principals have co-founded and served as the equity capital sponsor for a number of the building products industry’s leading middle-market companies and operators including U.S. LBM, Kodiak Building Partners, U.S. Fence Solutions, and United Cabinet Holdings, among others.