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Sep 26, 2020
BlueLinx Q3 2020 Earnings Report
Reported net sales of $871 million and net income of $55 million.
Key Takeaways
BlueLinx Holdings Inc. reported a transformative quarter with significant increases in net sales, historical levels of net income, and Adjusted EBITDA. The company capitalized on operational improvements and an improving housing market, while also managing an unprecedented inflationary environment in wood-based structural product markets.
Net sales increased by $192 million, or 28.3%, to $871 million.
Gross margin increased 450 basis points to 18.3%.
Net income increased $62 million to $55 million.
Adjusted EBITDA was a record $81 million, increasing by $62 million.
Revenue by Segment
Forward Guidance
Conditions within the residential housing construction markets continued to improve during the third quarter, with single-family housing starts increasing and the Builders’ Confidence Index reaching an all-time high. The company anticipates that the current apparent trend toward deurbanization, coupled with a historically low interest rate environment, should continue to benefit both new residential construction and remodel activity over the long-term. While wood-based commodity prices have dropped dramatically since the end of the third quarter, the Company’s structural product gross margin for the month of October is anticipated to be above fourth quarter 2019 levels.
Positive Outlook
- Single-family housing starts increased by 17% in the third quarter over the prior year period.
- The Builders’ Confidence Index was at an all-time high in October.
- Annualized single-family housing starts for 2020 are estimated to be approximately 43% below peak cyclical levels and below the 50-year average.
- Total U.S. monthly supply of homes also remained constrained, with housing inventory at the end of the third quarter at approximately 40% below the 20-year average.
- The Remodeling Market Index (RMI) increased 71% to 82 for third quarter 2020, when compared to the first quarter RMI of 48.
Challenges Ahead
Revenue & Expenses
Visualization of income flow from segment revenue to net income
Historical Earnings Impact
Analyze how earnings announcements historically affect stock price performance
Avg. Return Before/After Earnings
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