In the Q3 2023, BlueLinx Holdings' net sales were $810 million, a decrease of $251 million, or 24% when compared to the Q3 2022. Gross profit was $139 million, a decrease of $50 million, or 26%, year-over-year, and gross margin was 17.2%, down 70 basis points from the same period last year.
Q3 2023 net income was $24 million, or $2.71 per diluted share, versus $60 million, or $6.38 per diluted share, in the prior year period. Adjusted net income was $27 million, or $2.98 per diluted share compared to $61 million, or $6.56 per diluted share in the Q3 last year.
Adjusted EBITDA was $50 million, or 6.2% of net sales, for the Q3 2023, as compared to $100 million, or 9.4% of net sales in the Q3 2022.
“Our Q3 results demonstrate our ability to execute on our strategy, despite a challenging interest rate environment adversely impacting the housing and building products sector,” said Shyam Reddy, President, and CEO of BlueLinx. “We were pleased with our financial results, especially our strong margins in specialty products which accounted for about 70% of our net sales. Structural products also had solid margins and continue to support our specialty business. In addition, we returned $18 million to shareholders under our previous $100 million share repurchase program, which is now complete. Today we announced a new $100 million share repurchase authorization, further demonstrating our commitment to returning capital to shareholders.”
“Our continued strong free cash flow generation contributed to ending the quarter with $470 million in cash on hand and net leverage of 0.5x,” said Andy Wamser, CFO of BlueLinx. “We remain focused on growing our higher margin specialty business, continuing to make improvements in our operations, and maintaining a consistent and balanced approach to capital allocation to drive long-term shareholder value.”
Q4 2023 outlook
Through the first four weeks of the Q4 2023, specialty product gross margin was in the range of 18% to 19% with average daily volumes slightly down compared to what we experienced during the third quarter of 2023, but in line with historical seasonality. Structural product gross margin was in the range of 9% to 10%, with average daily sales volumes slightly up compared to the Q3 2023.
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.
