BXC - Earnings call transcript Q2 2024

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Operator

Ladies and gentlemen, thank you for standing by, and welcome to the BlueLinx Holdings Second Quarter 2024 Earnings Conference Call. [Operator Instructions] At this time, I would like to turn the conference over to your host, Investor Relations Officer, Tom Morabito. Please go ahead.

Tom Morabito

Thank you, operator, and welcome to the BlueLinx Second Quarter 2024 Earnings Call.

Joining me on today's call is Shyam Reddy, our President and Chief Executive Officer; and Andy Wamser, our Chief Financial Officer. today's we of take end the prepared will remarks, questions. At

webcast to Actual Form quarter slides presentation due provide the risks financial discussion issued our our presentation. in items website, found statements news to section second the financial risks non-GAAP encourage forward-looking and most our the of along the XX-Q those results available from appendix market, we helpful the and significantly forward-looking in are contains adjusted release including various with bluelinxco.com. of Our described evaluating on GAAP of close investors with webcast. Today's measures recent and business. were uncertainties, differ the can believe and during for that our measures Investors information these SEC includes Reconciliations may be the the yesterday our along statements. you We context closest in presentation, follow to after filings. detailed Today's certain the

it Now I'll over turn Shyam. to

Shyam Reddy

Thanks, good Tom, morning, and everyone.

quarter specialty these prices deliver and results helped products second year hard my in of in wood quarter. of engineered millwork, gross the margins despite I business, proud price demonstrated XXXX such to structural categories, in of solid offset XX% spite continued Products Specialty growth key and market declining siding Volume volumes relative lumber weaker am impact the to our their comps. deflation of conditions. prior during product teammates as work challenging approximately results Our for

a like anniversary results, second to note to BlueLinx's public our this as over company turning would year. quarter Before XXth I

vital of associates. play In in outstanding last years back the an our product products in two-step date chain building of we a to the supply building role U.S. division Georgia-Pacific, spent for we the all pure providing origins XX doing, playing the to our while building place distributor are largest work so XXXX as While a

to employees X,XXX time and for customers and of years, for our well, sincerely our loyalty, are a than In XX is nearly have Many that roughly which have us more commitment us suppliers been fact, grateful. we during as XXX BlueLinx. their of with with to been that our testament

have with begun with capabilities. world-class Subsequent transportation first on modernize re-architecting phase Looking to a data, system. our enhance e-commerce implementing and ahead, business initial commercial will new the solution work phases our operational the we our further launching an technology and management focused

we new ultimately a serve Our over at us continued we focus with remain on our specialty mix key the strategic so focused profitable growth to our sales markets that business time. so business the can that enable technology our than categories will Structural product growing Product ourselves product accelerate in shifts modernizing differentiate rate our on higher objectives. We

as successfully on national to strategies key launches market continued expansion We a local execute by also and our lines accounts, to name product our product new lines, and few. our geographic evidenced expansion into of just markets product new of branded national with lines of

reach geographic evaluate also greenfield Product growth opportunities our sales We M&A initiatives. explore our expand to and to and and continue support to Specialty

profits when was of revenues our deflation to price margin. net XX% due to declined accounted for about Product Specialty million year-over-year second generated $XX sales to approximately the X% net per a gross X.X% for of for products Specialty share. and quarter second turning quarter. prior the Now net XX% adjusted compared adjusted and of results. sales year. EBITDA of continued Adjusted $XXX million income $X.XX million, We EBITDA or $XX

remained at the However, the first our average of the level. specialty product half prices generally through same year

move from pricing reduced see into to a year-over-year XXXX. expect impact as We we

engineered wood solid product categories Now such had key in and growth as we millwork, volume I mentioned as specialty siding. earlier, products

lumber of as performance revenues in as lumber margin on pricing delivered to XX.X% X% seen lower Structural better panel as last especially business declined excellence. products lower The a and at also Panel now product to not continued in solid well. due well have volumes. an and although than due prices, specialty gross years. year, few experienced focus operational lower our are meaningful levels we lumber decline We prices

gross For purchasing example, and the put kept margins, The the over coming lag at on inventory natural fell on OSB in costs XX% minimal customers down. of on prices the levels lumber as their contraction pressure prices quarter. demand and course panel our given

structural For product in the quarter, came margins X.X%. at

throughout their At However, the channel lower adjust supply and management as industry expected we strategic eventually same and days a for fuel we market panels On far-reaching is pricing of improve more optimistic of product the higher stabilize in future interest inventory. structural to oversupply believe despite in will for that time, products, rates our sales will positive a the the create to due or manufacturers wood the structural help quarter are of consistent and that products. down. recovery demand our challenges draws DSI, for that and note remained structural lumber inventory,

and Lastly, the us growth capital positioned leaves as to as on quarter, achieve to well to significant financial on well shareholders. our to the our flexibility strategy vision execute maintain our position our remains strong, and liquidity return

$XXX repurchased bringing once to again XXXX, over of we quarter, million to the our the second to in $XX stock, beginning million total shareholders. BlueLinx capital returning amount since demonstrating repurchased the During commitment

XXXX. and rates perspective to issues, name the half of and average indicated XX-year however, market. be on although sources peak are Now currently now Earlier especially X% well to and positioning Reserve's are the existing above home XXXX. year, the they resulting of housing last rebound rate continued More just around the seen due of the this the broader home headwinds from significant our Federal and back lower turnover pushed affordability optimism building industry any are the regarding recently, market, renewed levels few, they a low products last sense fall cuts, for XXXX. Mortgage to in sort out into still overall the year, appears X%, than to a second to of turning for

critical haven't to More and in accelerating starts, private they especially rate is housing for stabilized, and remodel low the are homeowners new interest importantly, many activity mortgages. builders. Also, repair which

to jump over we rate expect we housing necessary reductions start the rates to although believe interest are initially cuts recovery. time interest recovery, So that continue sustained the in

multifamily X.XX were their market at lowest May year-over-year. down X% housing U.S. in as year-over-year. total still the but up level rate June were starts single-family from Large improved still since but month-to-month, October million, housing Seasonally XX% coming down Now at remains adjusted reflected by volatile, an of housing annual X.X% starts starts adjusted XXXX.

dropped XX In addition, of July. at in in dropped confidence builders and XX April after May. sequential June to XX X and in months improvement, in flattened XX It then to out

in. All market of volatile currently negative conditions the we're evidence and builder reflect these sentiment drops to broad-based uncertain which activity, tied building anticipated

Looking to phenomenon interest conditions at XX, the which years, levels into continues spending present down to elevated lowest R&R last down began and from was July. was the And driving to their traffic as from the accelerating XX rate from pull-forward due Expected remodel buyers XXXX, has lower components, X prospective expansive homes. July. increase XXXX. XX, of months of years that sales July. Repair XX was Also, last home last levels and XXXX in be in down than and conditions more next a sales XX impacts sales in pandemic-related XX existing continued during time in XXXX, sank occurred XX,

buy their buy we homes large support participate occurs dynamics. Also, a attractive as in size, to and balance they like to and custom their and before, builders buy do rates, production down families starts activity closely correlate not as homebuilder remodel much we use distributors smaller significant to new of homes current amount builder Two-step single-family offer to noted scale velocity BlueLinx, directly the due because more public mortgage have however, schedules. are that can therefore of result, sell and believe when market. anemic the As to their most from a deals activity, and consumers production by their the their repair tend sheet with that isn't happening driven and housing large more manufacturers being sales

continue start to We for expect XXXX. of remainder single-family the the trend

we rates and Although housing believe of our of homes, demographic supportive sector, housing benefit the to and aged outlook which stock, down. high repair and remains substantial interest in certainly the and building drives the muted, necessary prices the shifts, home building long-term prospects levels BlueLinx products near-term in growth shortage continue and uncertain and activity strategy. The equity come remodel to of as come should industry the years products home

it provide on capital I'll Andy, our our Now results and financial structure. over details turn will who more to

R. Wamser

everyone. Thanks, Shyam, and good morning,

margins gross quarter. Overall, delivered despite impact consolidated the through Specialty go business first highlights the price of strong Products our for the Let's deflation.

prices period. building products contracting as was product points impacted XX.X%, affecting and basis panel margins down negatively were the year-over-year. down challenges profit $XXX Total well structural in as XX the margin by However, X% and and were housing in million, quarter sales gross was the lumber gross $XXX Net million, demand. industry from prior

noted matters quarter XXXX prior last an As for our incurred results estimated in we call, in import specialty first for periods. duty-related benefit net products reflected

million, $X our associated adjusted matters, quarter costs or and the second second was compensation $X.X was available $XX periods. from by income last million do mainly expenses the was and due XX%. of details $XX The currently benefit on year's XXXX, estimates quarter. was per expect changes for legal net million, additional future share. of million. in share. Tax quarter was or expense. Net further was for or XX-Q. SG&A lower expense the an And to are the million increase partially up duty-related and $X.X $XX estimate material per During the with $X.XX million, share-based We offset in resulting not higher second $X.XX technology logistics More updated, income expenses matters

the have to or EBITDA For X.X% XXXX, XX%. Adjusted was range adjusted XX% net sales, includes including rate the third been $XX million, Not or matters. be $XX million, to our of X.X% tax EBITDA these the in we favorable of of duty-related would net matters, and quarter of anticipate sales.

million, quarter products. was now were Turning second This by driven specialty sales $XXX deflation specialty results year-over-year. to price products. X% decline for down across Net

XX.X%, solid second to X than products quarter the sales were of to with of equivalent first margins still XX% at gross in was volumes given move second sequential daily XX.X% up Through lower specialty we quarter. the when to mentioned, gross points duty-related pricing last was margin products thus, conditions, Not expect from as the into profit market this year-over-year a was from current impact XXXX. Gross sales item. million, due compared Shyam year, the specialty period slightly higher $XXX primarily range specialty the basis last and we in XX weeks the XX% QX, year-over-year, see margin X% including As of to from the XXXX down benefit, reduced gross year.

the on levels. Gross Now when as in lower the million, sales prior and panels margin lumber moving first sales products $XXX X% to lumber the structural second and quarter. panel X% XX% prices profit was feet, of $XXX down as the decrease board products second average X% a X,XXX of of structural volumes decrease and X% and averages Sequentially, were period. XXXX, same products. compared compared the quarter $XXX primarily the from first period due about year. prices the the X%. Through last was down range $XX quarter the to per were respectively, in the was to prices year X quarter million, were pricing nearly to gross second weeks of compared structural Net year's in declined structural gross X.X%, XXXX were This of last volumes of XX% per daily to nearly lower increase, margin year-over-year. a to with improving with quarter, year. In lumber from about a feet XX% And X% down was from last square X,XXX well comparing QX, decrease panel second lumber

supply-demand the dynamics the we in end expect Given be through would to of structural margins products, year. pressured the

at our balance now sheet. Looking

property on cash million, initiatives largely strong management and due strategic to million end $XXX QX, debt million, of net was the an normal When capital. working the Our approximately negative $XXX considering was excluding the effective our of capital. liquidity to liquidity and of real our million, on financing was working hand the leases, $XXX million quarter. Total a undrawn in from execution our hand excellent of $XX At debt, $XXX increase at seasonal cash and of was million. of patterns due available $XXX the end revolver quarter, remains capacity

net XXXX. Our net was material negative X.Xx ratio we our maturities until leverage have and a outstanding given debt cash positive no position,

our generation, EBITDA such remains initiatives, share in include efforts. initiatives are inorganic These support organic we and return and liquidity our our opportunities, with including and as combined digital sheet balance investments Our when strong, growth well solid our highest opportunistic positioned strategic repurchases. transformation and to

and free flow. moving Now working on cash capital to

flow quarter, During flow driven and we million working capital. net second by the of generated $XX cash free million, of improved operating income cash primarily $XX and

allocation. capital to now Turning

During to facilities the primarily we improve CapEx, quarter, spent our million fleet. and $X.X in our distribution

for upgrades well. We also as leases million entered into for finance fleet $X

XXXX, facility focusing further our be on $XX For previously approximately million, to we capital expect the to discussed. improvements upgrades fleet investments and technology improvements,

a will As operating increased to reminder, expenses initiative. this also related digital year headcount software million associated least on as with licenses a our well transformation at have this impact $X as

on our million we of during repurchase As stock, $XX and remaining end at million authorization. Shyam mentioned, the repurchased quarter current had we quarter, second $XX

and market. opportunistic repurchase remain plan are efforts to to We our the committed in share

for remain economic strategy intend us in our footprint consistent. principles We our and invest balance to shareholders. maintain expand return sheet, allocation M&A pursue enables a well Our business through as to capital guiding which geographic strong to capital disciplined a cycles, as

We pleased deflation, with to despite were specialty in are plan offset our or industry-related results to within which products net less. Overall, uncertain challenges a leverage some able an maintain long-term environment. structural of we also housing Xx continued product

strategy liquidity on return Our capital to to and now strong us we to opportunistically our to our positions execute and questions. are take balance sheet well ready shareholders. Operator, continue

Operator

first Capital. line the [Operator Instructions] Stevenson with question Our from of Loop Jeffrey comes

Jeffrey Stevenson

driving move volume color volume through as more at second as see And improvement on June specialty any volume particular, also products start cadence growth just Could the on of quarter wanted as to In quarter? we third well what's favorable? you well. you provide the the pickup in did that more of any became sequential then the the touch

R. Wamser

Sure.

say specialty but when the really I'd digits, down on volumes probably volumes we're basis, is we seeing on So structural. good sequential about a low-single think

we say, digits, start would I the double as say, So quarter. structural volumes up, are I'd the

certainly dynamic at softer in about the bit think little least on structural. volumes the stronger as and is specialty we So a QX in

Shyam Reddy

Yes. increases. seasonality the volume business I the contributes would just that the of to add

to lag If in we're started very early days it the through year. QX, start of We you we see a to in the some and pickup then then seeing slow back picked QX. recall and some continuation QX, had up and some

Jeffrey Stevenson

how by segment in think specialty segment that's get as we year? back second of to No, into price about the then the fourth will think it. what year-over-year And Got helpful. cadence early deflation year-over-year next spill was pricing through products we pricing And Do quarter? flat quarter? should you the the declines move half? Could closer

R. Wamser

Yes.

gross the So in about quarter. when it sort of was profit, say think just just specialty minus X% the, we

volumes say, that digit single So that up price would single imply -- to were sort I'll mid-single terms deflation. digits, of of high was, still pricing so high in

as But comps we I'd still deflation. Shyam's improvement we and see negative would we pricing my to that as QX mentioned into as expect into move specialty go and well. QX would expect we So In that comments, expect we comments XXXX.

Shyam Reddy

Yes.

you think about We've simple supply-demand problem, market. if got the right? a softness So it's in it,

we mentioned improve talked sentiment, As that drops meaningful I quarter, we earlier, haven't in had sentiment about seen the has when builder necessarily way. sequential any and throughout will indication a builder

XXXX. of carry early deflation to would expect I be and days until the through generally consistent So

Jeffrey Stevenson

bolt-on just acquisitions. Okay. the that's initiatives any No, the for M&A Any on well? helpful. and as new on progress pipeline lastly, And then there greenfield specialty update

Shyam Reddy

Yes.

always geographic talking have announce there that will et deal. -- an we will with growth, until more a can pandemic relates as focused are help think and cetera. M&A And discussions sales targets expansion, as the looking more we the minds before, an strategy I've another be we're on we're removed meeting to the otherwise case have or said support that to more help likely it specifically robust And valuation, the for a a specialty further in from from of I opportunity we standpoint, the opportunities pipeline we years, become us are actively from to, So of nurturing. which

is -- an our thesis of to it part incredibly relates be but the of strategy. and of investment the in it important terms will business prong growing X-pronged As

which Moving where estate real are -- evaluations, that greenfields, we the active with lease is of have foremost cases, estate real actively are prong, a markets to third we and on exploring some number and underway. in we have we first negotiations

important in business. to -- to grow be but will more company as and priority consolidated So of be net the future, we definitely it volumes in come is coming an over of part the sales will look and the the strategy years the

Jeffrey Stevenson

Great to hear.

Operator

your line Craig-Hallum Palm Capital And next with Greg Group. from the comes question of

Greg Palm

kind you rates recovery given second shifting how had last talked terms Are know to the are of with to into from -- shoots? better visibility half last I'm those calendar customers about get thoughts. seeing the and conversations sort curious you of maybe happened maybe of happening? -- few recovery of recently the seeing just I I you the your sort green in mean, months weeks, more any what's to are in But progressing XXXX. the that really few just

Shyam Reddy

Yes.

it rate interest effect many we rates have. low will and start the see subsequent address people cuts housing lock-in lock-in from XX-year the recognize jump kind say recovery or would at I agreement there's the with is of to first year that But of time, year that soft same remainder general this XXXX meaningful So rate recovery. curve, that of the frankly, rates cut will the becoming the quite that be the an to, good but rates take recovery, mortgage we that season initial we all that

in the on positive is, between effect, rates will you repair/remodel but the knows, be will, then lock-in or point the the frankly, XXXX we're There's to cuts come same Of But a a we we're remainder rate starting which think come quite course, will in standpoint, activity. who year only effect seasonality have boat. XXXX. of cycle. accelerate positive a housing from view then in and equity home taking other all subsequent see the what the down, all now things and to impact customer -- take expecting generally, in with the continuation But in happen will, really of that will be HELOC a kick first that need I you a off off down, as a and drags, and affordability the the recovery interest the September, not that multiyear seeing if rates issues QX to are then

Greg Palm

Yes. That's new your maybe helpful. know little we all about. do that know sort initially And I than within which recovery happening of home publicly better or production envision different traded construction you R&R a are builders customers, that bit the

Shyam Reddy

on. seasoning. some I to result, the coming intuitively of see a I down to rapidly start that to data kind little third-party remodeling going repair same providers so kind think would -- year. and flat The But go pull-forward speaking, remodel cost well. you data just up there. be And and But it's it But of might then it's have take starts, come it's market of I that's if time, that the as time we're really of for same -- possible all at next that suggest your to down seeing single-family course all will think the all third-party you the a see rates as bit housing

new not entirely an seems what's expensive come sure going to be easier I'm that an first, swallow than Greg. So to But construction. pill to

R. Wamser

one just to Andy. And Greg, say is add. this thing I'll

next But what year. drop-off muted As year, this had digits. then maybe a think material to the going Maybe on up would you're be it's is big be next the see the I big should R&R And we've that could relatively single-family improvement change could I agree low-single everyone see think that Shyam multifamily mentioned, maybe up mid. that year. given

be think a year. So we better certainly will XXXX

Shyam Reddy

up people Greg, Yes. were remodel versus, be might HELOC the coming year difference one this more year to with down, than projects on be -- say, could next last rates and is the point you're do on. I this next they kitchen, year. And a larger repair/remodel willing Because do do do But let's a that the year going may the on your do you until then to rates you'll project bigger your so now, actually take countertops folks come might cabinets, as but next year, just down. and

Greg Palm

Yes.

in mean, line mean, -- the time sort this this And light discussion, to it greenfield result terms terms the hold? of accomplish just some Okay. of either initiative of the I as time want terms of that you recovery change A, and line to a macro a you and your also in I hopefully technology, the in aggressive digital does mostly want activity? what how of recovery. in this I implementing is looming does of, mean of does takes be change before

Shyam Reddy

ultimate the because And the journey, above-market participate it's now, our the it that investment the change such say cycle for of Well, doesn't multiyear line it's in line ourselves begin the a time for a cadence is based per se, when we end it are do think but we time strategy it want I ourselves positioning time when in put the day, and at to growth will the on to comes. -- right? does so position

And into are to But we really now the it progress, to that accelerate in faster we're transformation account. enough stages. so to because As done the extent journey, yet stages, right we the we continue have the would early to relates would in there early look, until we're other. take schedule. than haven't as we're digital that then moving greenfield we accelerate. get And obviously opportunities it's expected, an world, then to to say then to me can are I'd on -- look, two But schedule one, we started, or the way for after do in And hard I we we're to we definitively. on relates love one as three, But it also strategy, there. the ideal say

Greg Palm

Yes.

it I enough. Fair Okay. there. leave will

Operator

Benchmark the Company. from The with And line Reuben of Garner next question your comes

Reuben Garner

update repetitive. look difficulties, share on kind I economics what yet I kind I of about M&A technical terms don't kind between balance get of side, economics could the thinking you kind of one of the us fix you what to want so of each wondering period? if the and what greenfield question. of for how greenfield do was what repurchases cost to the Just -- return some you relative you're had other on look expand, the profile is the in to like and And have each? any the like kind opportunities, payback

Shyam Reddy

Yes.

sort think of, have not standpoint yet how provide drivers capital M&A in from the So M&A, a not -- And going. versus from are details, specifically then allocation potentially opportunities to a an a specific position share we I'm other there greenfield to opportunities make. about that it we're in tell I'll we that's I about we markets investments although a pursuing the that we're context and get to greenfield M&A There's talk of and you, of as we Andy that different the mean versus let's we it not I'll are right? relative thinking about exploring. either/or, over expect as actively made, machine and say, to the M&A to turn in characteristics trade-off. investments But to repurchases

R. Wamser

Sure.

second middle being beginning And of think than -- share quarter repurchase, that's that in opportunities. to guidelines, to we've day, highest about I that first we the same repurchase I'm for million talked about saw reasonable on original I'd we to a think first saying at in you opportunistic I invest the took X the quarter. say, if front. always share $XXX quarters that We'll as this on But be So we the mean continue we're the us the say, previously, be to the let's more this end. that's active the will. for execute were the not authorization, to returning but about you going program last of, from the in of, sort the end in that certainly said, if want

balanced I of sheet balance where allocate. and to strong M&A frankly, very afford, a how we and can have think, terms we we'll be share greenfields, We continue frankly, repurchase, in

Shyam Reddy

One the last on add point to greenfield. just

CapEx reminder two-step types So of low, compare to you everyone, in are requirements the and distribution, just as other manufacturing relatively BlueLinx, to particular a especially businesses. for and when

standpoint, working greenfield the the capital light. et are a investments, CapEx investments, from relatively So initial cetera,

-- you've you real there, find to got generally You're some the Even have flexibility. estate.

which the relatively you ultimately then match et time. staffing locations are well. you capital and working And between grow into reasonable, over within invest as You the cetera, can and initial equipment, requirements, and mix

So the we about good to which so why greenfielding, is feel pretty our it's thesis for core strategy. investment

Reuben Garner

Okay. in to going one structural. sales perspective. handful question, kind said to of I if is the but I'm the just apologize. were question. to of second Down sneak what than only just quarter difficult gauge I one, I moving said It's on I last kind clarification of the that But commodity with third have and the years wanted think volume up And answered been daily typically sequentially. a But much. in pricing so you Like right? specialty, and normal, lower is up ask I already, volumes you to kind this the in That's of counter other that

Shyam Reddy

and November. or third with mean business have has season first continue, quarters leads the that that, the necessarily. parts the fourth, holiday, part also the season of having, Not an our after But that's and sometimes more markets in sometimes second at -- throw course, to quarter, early to obviously busy an impact taking seas the then starting it's impact. second others. And whether when are weather, industry. I the Hunting will typically, and quite of third of day, back people the historical so years. end the certain out the in than slowdowns if through the you've part you seasonal and But to start the you of go and got the of if you norms, frankly, holiday up period preceding

Reuben Garner

Good Great. forward. going luck

Operator

question your D.A. with Yinger line the next And of from Kurt comes Davidson.

Kurt Yinger

the you in kind on a of remarks, a I down I up in might beat mishear on that? but heard prepared basis. daily right, have to horse, of specialty yes, that dead Is the terms that while commentary of Andy, volume, did sequentially, kind was or say thought Not I sales year-over-year

R. Wamser

Yes.

second kind down up, we up but it of we overhang. think for about of up, pricing but for of this but quarter, yes, we're the When volumes low-single specialty digits. the quarter, still For digits, bit is if it's call second seeing, material, sequentially, think terms sort about what QX it's I'll the little a were there's in quarter, low-single

and Sorry for year-over-year the between confusion sequential. comparison or

Kurt Yinger

about terms generally see you overall the of kind the is. you going written off confidence that back it. of that ties like environment I Okay. know how And half kind people and talk to you're might you with could what of of the from year. seeing We of conversations you're seem kind builder customers guess, into margins Got that of where talked they've what and in competitive to forward? means expect in specialty what an having terms

Shyam Reddy

Yes.

So let me start.

Of you're to be see market competitive. course, going more the

time, allow that business Although that initiatives efforts compete us to we our more underway I at certain point around operational the same and out would have effectively.

on support what things to or margins excellence we're our help margins. sense be centers procurement gross some makes business for to well. think of EBITDA would respect support or it business than So then they doing otherwise excellence doing pricing with solid to as the be, better And and the operationally I work whether side, that the

day throughout about have past, eye our taking targets But all management, about highlighted specialty managing and in the their we we're not good we off teams with I've year -- with people strategic a think especially we've our aggressive structural So got the I have especially and inventory respect ball. inventory. we that even on before our inventory, like feel turn as focused the very to that

that's to millwork starting with label label. We're cedar So competitive which a deal private some our is how what's highlights existing more and that just fruit. relates with market. At and generally about Allura. our we've pick into talked time, share. But under expanding LP with lines our about private bear a and we think otherwise been new expanding growth, Huber up about them, product actually we to brand and very with it We've us we've markets as EWP. the Or intentional expanding working program very launched as suppliers same to allows

year-over-year. think very also geographically, about lines products, deepening accounts grow either being I even otherwise private those and the otherwise specific both efforts either as or branded business tough, our expanding expanding or our a in or within in what's our the as national as channels so declining the in expanding label gain a improve product product to home like And we're order multifamily share challenging, supplier within intentional markets and about intentional soft in our centers, mix well with

So through that's how we're managing it.

R. Wamser

with And think XX%. to I maybe consistent That's to least still add margins Yes. going XX% point. specialty on in are mean, we just where been. at the we've to margin hold that

and had just, we margins, X was feel of we've last over So you've confident in structural the -- the that's panel a say, that let's lumber weeks. There modest, in because seen say, I'd I'd and in that. downshift, pricing say, deterioration the the like

So there we're structural have I really our is -- on X%. supply to low we inventory, the our is And expectation think we're while the XX fishing X% side. guide day

balance So that's expecting being prudent But maybe others in that But we be lot I they XXXX where the have. think say, just little do I it's and little And this going there's a a bit this the let's think busier the heavy inventory of a manufacturers year, to are while and think balance. it at balance that that's as why structural be will little would that of reasonable year. a channel, season be a the more have we we're off-size feels to the pressured for we supply-demand more, improve of will think said, supply. that being bit structural the I think in from -- do will expectations dynamic a year. becomes a same positions due market, We for with that more, don't margins guess, the bit that the

Shyam Reddy

put Also, anticipation continuation online They the early. pandemic, came there recovery of much starting A mills were was in under during lot the demand. so of housing construction. or

obviously wood the that channel, environment so more contributed in has competitive depressed and has also which to made the more pricing. being And

Kurt Yinger

Right.

months were do positive of kind could drivers competitive proven And in persist potentially a makes inflect all sense. of think could outside look high or we those like you more of with volume, blue sky it XX scenario kind I That feels some kind of envision you if can teens softer of way, mean, and out what even to your be Okay. sustainable guess forward a you've I to kind demand point, of are improvement? terms in margins the that how in backdrop of specialty activity.

Shyam Reddy

-- particular, focused next-day improving are continuous delivery, cutting our to on if you talking you're proposition, site in margins Well, within expanding job I about it delivery obviously, obviously the on and talking value-added mean, also whether delivery, services be just about capabilities. continuing be

to us within have local picked We've markets for specialty So added saws particular which distribution dynamics a result, in an and site, our existing have share we ability example, support new adding others. given has within a the some we've as per when where capabilities as product to new square up use, market to expand more such land or buildings, space and better drive generating specialty gross adding you allow -- profit to grow building, category which say a will, generate to -- square foot new putting our expand, sales. more and overall covered us if the will foot, I basically expanded

in the and hang greater And delivery will from we over the as mix. that, profit a result better with time, percentage specialty as the the our gross margin should continue value-added So around value proposition services all a the other and then come shift of to And there. gross mix, the shift to we capabilities, continue those sales. of

compete. that's So we how

Kurt Yinger

Got it.

can talked of commodity Okay. an inventory a your about lastly, bit see in customers And either little just fall? that guess, the heavy product maybe at talk kind system a into you specialty overall you appetite levels the to, you from I or feel here own Are may the side from inventory being where categories any there be on just the perspective. inventory elevated? you the little And level bit ground customer to kind heading put of

R. Wamser

be inventory right We now really want one Kurt, Yes. have efficient -- point. we in don't on just have to clear to structural. just be --

So we're low, mid-XX supply. day

general, heavy. in is the channel think I

when So we look we I'm look system. not see key I in specialty, say we going to at at -- don't that when would our categories, the so just there's inventory heavy

think was as of see don't about channel the more sort I issues terms volume we and be structural lumber in side. side we on pressured checks panels. the So any specialty that could where just talking on the margins of

Shyam Reddy

declining very minimizing the less impact. otherwise quite when But exactly with to the demand, inventory how at we we But but and of one even been differentiators your how the we And we the in with you isn't have think ensuring seen with that market, softness you're of a our, to the would course we point, or if close even asking, are margins, combine around it in inventory highest will. than have then maybe customers our this frankly, downside manage buildup levels very, or throughout business, expected. our in I but that's managing solid again, the what have, tepid and you our market

Kurt Yinger

Right.

here Okay. in Well, color, the luck Good guys. QX. appreciate all I

Operator

back this Morabito. And to further turn over time. call questions there no are I Tom the now will at

Tom Morabito

third Thanks, results. Kayla. forward with to Thank in joining you and you today, October we look XXXX late we speaking as us again quarter for share our

Operator

today's concludes call. this And conference

disconnect. now may You

BlueLinx (BXC) 31 Jul 242024 Q2 Earnings call transcript