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Building Products Distributor BlueLinx Sales Fall in 4Q


BlueLinx Holdings Inc., Atlanta, GA, distributor of building products, reported revenue for the fourth quarter 2006 declined about 29% to $945 million from the same period a year ago. The company's business that is tied to new home construction was negatively impacted by the slowdown and depressed wood-based structural product prices. BlueLinx reported a net loss for the quarter.


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The company's fourth-quarter results historically are affected negatively by a seasonal slowdown in construction. It also had a stronger-than-expected 2005 fourth quarter in the aftermath of Hurricanes Katrina and Rita.


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The company's overall unit volume fell about 17% during the fourth quarter, with structural unit volume down about 18%, and specialty unit ...

BlueLinx Holdings Inc., Atlanta, GA, distributor of building products, reported revenue for the fourth quarter 2006 declined about 29% to $945 million from the same period a year ago. The company’s business that is tied to new home construction was negatively impacted by the slowdown and depressed wood-based structural product prices. BlueLinx reported a net loss for the quarter.


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The company’s fourth-quarter results historically are affected negatively by a seasonal slowdown in construction. It also had a stronger-than-expected 2005 fourth quarter in the aftermath of Hurricanes Katrina and Rita.


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The company’s overall unit volume fell about 17% during the fourth quarter, with structural unit volume down about 18%, and specialty unit volume down about 15%. The company’s end-use markets are estimated to have declined 16%.


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The fourth quarter was one of the most difficult building product environments related to new home construction that we have experienced in decades, said CEO Stephen Macadam. A 25% reduction in new home construction from year-ago levels and low wood-based structural product prices combined to severely pressure our business related to this sector. Our business was further impacted as customers reacted to this environment by reducing their own inventory levels.”


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The company’s other end-use market sectors not directly related to new home construction experienced mixed results. Manufactured housing declined significantly from Katrina-inflated levels a year ago, while industrial applications and non-residential construction showed growth, and repair and remodeling weakened.


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BlueLinx says it has focused on growing its specialty product business, to preserve margins, and added vendors and well-known brand names such as Hitachi power tools, Johns Manville and Certainteed fiberglass insulation, and hardwood products from Columbia Forest Products. It says it will focus on increasing sales of these products to offset sales declines.

Related Links:
BlueLinx Revenues Drop 17% in 3Q
Housing Market Hits Building Materials Distributors

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