BlueLinx Holdings Inc. reported financial results for the three months ended September 28, 2024. In the Q3 2024, net sales were $747 million, a decrease of $63 million, or 8% when compared to the Q3 2023. Gross profit was $126 million, a decrease of $14 million, or 10%, year-over-year, and gross margin was 16.8%, down 40 basis points from the same period last year.
Net income was $16 million, or $1.87 per diluted share, versus $24 million, or $2.71 per diluted share, in the prior year period. Adjusted net income was $17 million, or $1.95 per diluted share compared to $27 million, or $2.98 per diluted share in the Q3 of last year. The 2024 period reflects a pre-tax benefit of $2.2 million related to an adjustment of the settlement charge recorded in the Q4 2023 related to the termination of its defined benefit pension plan. This benefit was partially offset by $1.2 million of estimated net losses related to Hurricane Helene in September 2024, which is reported within Other operating expenses, net on our unaudited condensed consolidated statements of operations.
Adjusted EBITDA was $37 million, or 4.9% of net sales, for the Q3 2024, compared to $50 million, or 6.2% of net sales in the Q3 2023. The current period includes the benefit of the duty-related matters, and not including these items, Adjusted EBITDA was $33 million, or 4.4% of net sales. Adjusted EBITDA excludes the aforementioned adjustment of the pension settlement and estimated insurance deductibles.
“Our Q3 results delivered solid volume growth in several of our key specialty product categories, as well as strong volume growth across our structural products business,” said Shyam Reddy, President and CEO of BlueLinx. “Specialty products’ gross margins were within our expected range and structural products’ gross margins were strong, despite the effects of continued price deflation for both product categories. Current market conditions remain challenging, but we believe our growth strategy, significant liquidity, and strong balance sheet will continue to position us well for an industry rebound.”
“Our strong free cash flow generation of $54 million during the Q3 resulted in a cash balance of $526 million and a net leverage ratio of (1.2x),” said Andy Wamser, Senior Vice President, Chief Financial Officer and Treasurer of BlueLinx. “During the Q3, we purchased $15 million of stock under our share repurchase program, once again showing our commitment to returning capital to shareholders. At the end of the quarter, we had $61 million remaining on our share repurchase authorization, and we will continue to be opportunistic in the market.”
Q4 2024 Outlook
Through the first four weeks of the Q4 2024, specialty product gross margin was in the range of 18% to 19% and structural product gross margin was in the range of 9% to 10%. Average daily sales volumes improved slightly versus the Q3 2024.
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.
