Sales soar, costs rise for BlueLinx
Q2 Cedar Creek integration costs take a bite out of earnings.
BlueLinx reported net sales of $893.0 million for the second quarter of 2018, up 88.4% from net sales of $474 million in the second quarter of 2017.
The Atlanta, Ga.-based building products distributor also reported a second quarter net loss of $8.6 million compared to a net income of $3.2 million in the same period a year ago. For the first six months of the year, BlueLinx reported a $22 million loss, swinging from a net income of $3.8 million in the first half of 2017.
BlueLinx CEO Mitch Lewis noted that the company was still in the beginning stages of integrating Cedar Creek into its portfolio, and cost savings are on the horizon.
“While we are still early in our 18-month integration process, based on specific opportunities we have identified and actions taken to date, we are increasingly confident in our ability to generate at least $50 million in annual synergies,” Lewis said.
Wall Street reacted positively to the earnings report, sending shares of BXC up almost 20% on Thursday.
For the first six months of 2018, BlueLinx posted net sales of $1.3 billion, a 47.4% increase from net sales of $902.6 million in the corresponding period last year.
During the second quarter BlueLinx incurred one-time charges of $11.6 million for legal, professional and other integration costs related to the acquisition of Cedar Creek, completed on April 13.
As a result of the increase in the company’s stock price following the acquisition of Cedar Creek, BlueLinx incurred charges in the second quarter associated with compensation expense from stock appreciation rights and other share-based compensation of $3.8 million. The company said it will pay out the expense in 2018 and 2019.
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