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BlueLinx Sales Rise 12.3% in Third Quarter

In part due to restructuring activities, building products distributor reports a net loss for the period.

Atlanta-based building materials distributor BlueLinx Holdings Inc. (NYSE:BXC) reported sales for the third quarter ended Sept. 28, 2013, were up 12.3 percent to $558 million. Overall unit volume was up 11.9 percent from a year ago.

Organic revenues increased 14.2 percent.

The distributor had a net loss of $3.2 million for the quarter, compared with a profit of $3.1 million a year ago.

Overall gross margins were impacted by a higher mix of lower-margin structural sales, low-margin sales related to the closure of five distribution centers and a highly competitive pricing environment.

"The implementation of the company's previously announced restructuring program is proceeding as planned, and sales and operational initiatives are having a positive impact," said BlueLinx Executive Chairman Howard Cohen. "Despite the restructuring this quarter, the company achieved a significant improvement in same center results. We have regained sales growth momentum in higher margin specialty products, which grew 11.7 percent on a same center basis and increased the company's adjusted EBITDA by $3.3 million or 118 percent.

“On an overall basis, commodity pricing has stabilized and margins are recovering. Changes made to reduce the company's cost structure and simplify the organization structure also contributed to the company's improved same center performance."

For the first nine months, revenues were $1.67 billion, up 13.5 percent from the same period a year ago. Net loss was $38.2 million, compared with a net loss of $11.7 million a year ago.

Gross margin for the period was 10.5 percent, compared with 12.1 percent a year ago. Declines in gross margin were driven by lower margin structural sales increasing from 41 percent of revenue in the year ago period to 45 percent of revenue for the nine months. The decline in gross margin was further impacted by volatility in wood-based structural products pricing, primarily during the fiscal 2013 second quarter.

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