BlueLinx Holdings Inc. reported financial results for the three months ended July 1, 2023. In the Q2 2023, net sales were $816 million, a decrease of $423 million, or 34% when compared to the Q2 2022. Gross profit was $136 million, a decrease of $66 million, or 33%, year-over-year, and gross margin was 16.6%, up 30 basis points from the same period last year.
Net income was $24 million, or $2.70 per diluted share, versus $71 million, or $7.48 per diluted share, in the prior year period. Adjusted net income was $26 million, or $2.91 per diluted share compared to $73 million, or $7.63 per diluted share in the Q2 of last year.
Adjusted EBITDA was $49 million, or 6.0% of net sales, for the Q2 2023, as compared to $112 million, or 9.1% of net sales in the Q2 2022.
Net cash generated from operating activities was $64 million in the Q2 2023 and free cash flow was $59 million. The cash generated during the Q2 was driven by net income and a net benefit from working capital, primarily related to a reduction of approximately $30 million in inventory.
“During the Q2, we maintained both our price and cost discipline to deliver solid results in a market that continues to be soft when compared to last year,” stated Shyam Reddy, President, and CEO of BlueLinx. “Our specialty product gross margins improved to just over 19%, and we generated operating cash of $64 million during the period, further strengthening our overall financial condition. I am very pleased with the team’s focus on our strategic initiatives and the quality of their execution,” continued Reddy.
“The building products market is improving, and two step distribution will continue to play a meaningful role given our product mix and value proposition,” continued Reddy. “We remain focused on the execution of our growth strategy and consistent in our approach to capital allocation to drive long-term value creation. During the second quarter, we invested $5 million in capital expenditures and returned $12 million to shareholders through repurchases of the company’s common stock under our existing $100 million share repurchase program. Our liquidity is exceptional and at the end of the period, net leverage was 0.6x.”
BlueLinx is a leading U.S. wholesale 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.
