BXC - Earnings call transcript Q3 2024

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Operator

Ladies and gentlemen, thank you for standing by, and welcome to the BlueLinx Holdings Third Quarter 2024 Earnings Conference Call. [Operator Instructions] And today's call is being recorded.

We will begin with opening remarks and introductions. At this time, I would like to turn the conference over to your host, Investor Relations Officer, Tom Morabito. Please go ahead.

Thomas Morabito

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

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

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

Now I'll to turn it over Shyam.

Shyam Reddy

Thanks, good morning, and Tom, everyone.

our shifts categories higher environment. We our remain product and that BlueLinx difficult pricing as despite categories to quarter on and as business the results third deflation for for products XX% specialty years. next mix than and over in growing products, as deliver XXXX the product very such panels. engineered business by driving lumber their continued partially well both products of the in I'm several structural key solid dedication rate key price results hard product at our work with millwork margins our team in Our structural gross pleased product despite the deflation. entire continued specialty deflationary so impact over this a of structural specialty focused We XX% demonstrated offset wood growth volume these and

share of our successfully markets of gain by on expansion into national lines accounts, geographic our lines multifamily new strategies product growth, product continue local market of lines, expansion seen our branded and launches product national to among others. We execute and also new as key with

will efforts transformation on continued our us moving subsequent by and enhance we that schedule We our to completed modernizing to XXXX. operational QX anticipate marketplace on ourselves profitable and phases X growth initiatives. that with track business ultimately commercial that our be in capabilities, differentiate technology the we can Phase new believe excellence with will digital focus Our so on are accelerate the sales further forward enable operational and

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

The announced by first greenfield be year. end of the will this

our Helene on to the facilities. turning Milton third want briefly quarter and of to address results, Before Hurricanes effects I our

financial communities. The impact and our in speak Tennessee, largely covered in and Andy will most distribution by Our hard significant the will to our on the is was customers, hit safe, to which continue area their dedication Carolina are the employees relentless location was operations which other Helene. importantly, their their impacted families Tennessee, moment. an and appreciate be and insurance, North Erwin, suppliers, by to we each a damage border, Most to

meantime, in our by running later rebuilding absolutely are nearby distribution of XXXX. customers all are and We center in this to we we to up distribution committed leveraging centers. the be Erwin, and servicing expect In

were of week. fully Milton, of were for our Florida. In operational storm, along the in They're a branches but only locations impacted in with all the terms Lakeland and Hurricane Tampa other path

products or of deflation million EBITDA $XX.X adjusted X.X% for of accounted margin. net net million, sales was generated XX% XX% We EBITDA sales continued for slower Now and about per excess third to demand the the prior gross $XXX net approximately adjusted product soft year-over-year housing of income turning Adjusted related combined Specialty environment. share. and versus ] to X% deflation $XX.X very to our third longer capacity, to Specialty for recovery, declined [ the quarter due of revenues profit million, quarter. year. manufacturing results. both the of a with we due competitive persisted $X.XX against Price than a price anticipated has backdrop

likely XXXX we expect half the the back pricing in the a believe in However, it see still recovers, as year-over-year of improvement year. will while be we market to in

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

gross solid products, margin specialty delivered above also our XX.X% of was which in performance We expected range.

margins partially excellence quarter. specialty to after tariff solid specialty continues quarter gross to our focus were benefit, business deliver performance margin our the due Although on

Our positions very the approach building that market and come. us products housing well has to recovery disciplined for yet

price revenues and board. product growth structural X% drove Although panels, volume lumber in deflation declined across the to due significant positive we

XX% average down our were XX% margins respectively. and products structural on and for we gross prices strategic growth. quarter, to and approach again lumber our As management the Andy inventory of for to business the excellence Regardless, XX% will panel strong highlight, and leveraged once positive disciplined centers year-over-year, volume for industry deliver

well opportunities and financial Lastly, vision, gain execute rebounds. of sales on profitable market take our the the and as strategy our advantage positioned share growth remains significant to quarter, achieve our liquidity strong, on us position leaves our

to continue have flexibility also to return capital to We shareholders.

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

year, low market. optimism housing among market, especially renewed the sense overall moving affordability forward and it and recovery existing XXXX. Since turn from of then, the products Earlier mode. let's half for the a other of into the kept housing second Now to however, and anchored for turnover our on indicated home perspective this factors, market industry sources home broader issues, building

the recovery from the is course, the Federal recent housing standing by the critical of mortgage factors Of rates cuts. one rate cuts the Reserve, regarding X.X%. above to the a Reserve's rate way of are Federal currently positioning Partially fueled in start

also XX-year still rate of about in result were necessarily average do peak X%. rates. last lower note cuts they not interest the lower they Although the the It's important Reserve than that mortgage year, to Federal X% above are

In rates the being fact, Rate housing X.X%. remodel XX, fall the first increased, from to mortgage to repair have since starts actually above now cascade need activity. materialize September to cut and are just the on merely rates in forces again drive of moving and Reserve that Federal domino to below X% once market cuts

interest For example, are mortgages. rate many currently low in homeowners

down we sustained September gap X.X% XX.X% it single-family starts, X.X% housing reductions and available rate initial which time half year-over-year. at September the to housing until housing as recovery that reflected after between were total X.X% down necessary Stated volatile we $X.XX in existing Seasonally recovery X.X% and increased August coming XXXX. what's cuts these August from back multifamily and down long-term way, adjusted an down currently adjusted expect XXXX. The from housing increased rate housing rates to from remains Large closing homeowners' over another help starts starts years. the interest we continue believe occur by the the although annual and So housing the and the of X.X% interest million, recovery, mortgage mortgage market are averages to in rates market kickstart year-over-year. August bring starts the believe of will rates over won't be sustaining U.S. coming from the down key in to

second for from X addition, the over and in months. in year-over-year October, confidence up was In XX September builders' XX row a up month previous XXXX after declining points X in the

improvement, slight reflect volatile XX which market is a was it March, April uncertain we're currently conditions down from time the in the there While continues still frame, in. to and

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

sell As families and a happening due occurs velocity result, a dynamics. new significant isn't homes that their amount of when homes and remodel repair weak current activity sales buy to

more not scale the they're and using interest of builder for their homebuilder over production with XX For the deals to on custom single-family large down smaller and as least high sequential is in in the balance in and rates, manufacturers like their new builders environment a sheet continue rate first X.X%, and correlate listings their share lowest offer lowest from and basis, participate BlueLinx, public years, distributors to buy schedules. buy X however, see attractive the their directly to support we because greater to of in levels only level in tend Two-step gaining a more and starts consumers housing year-over-year large housing are closely market. turnover size, XXXX, the starts at a at increases their mortgage much months a activity to rate decade. Despite production do homes

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

homebuilders averages, will we to anticipate come the reenter housing down will rates fuel market, as custom that the more help mortgage However, our closer and and business. which small XX-year get

continue near-term in long-term building the the products prospects the to of uncertain, Although remains sector. outlook and believe we housing

on industry continue the all which our to to and home you and XX be meet stock, profitable demand, demographic considerable in should account come to homes include necessary took housing any prices execution next come of when of clarity already continue This benefit for developed the the years the strategy. BlueLinx rates and drive sales already which to the many of years building every to continue fruit. products homes immigration. successful know, across to be as is repair aged to macroeconomic remodel of levels share to supportive we tied expected needs interest and forecasting top million these activity strategy into shifts, drivers even critical of equity of high year growth doesn't bear We As down. the X.X gain home shortage built our and Focus housing starting enterprise, will to in

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

R. Wamser

Thanks, Shyam, everyone. good morning, and

strong the Overall, structural both first experienced highlights delivered solid through in deflation. the products businesses and businesses increases our impact go consolidated specialty Let's quarter. Both the gross price margins despite for offset Total from points basis $XXX the $XXX million, year-over-year. gross volume, were by price gross and period. down sales prior down X% million profit XX XX.X%, was margin but declines. Net were of was

reflected products for specialty calls, we've noted previous second incurred periods. matters prior quarter our duty-related XXXX for estimated in in net and an benefit As first results import

During benefit the third fleet-related was of our XXXX, in logistics million due available on additional lower these million, mainly with net year's in details to share. transformation, from partially $X The per costs. $XX of or Net third $X.X are $XX XX-Q. SG&A our quarter up was More estimate the updated, resulting expenses matters digital last million, by $X.XX increase associated quarter. was higher offset was technology income million.

for branch Tennessee recognized $X.X by $X.X expense quarter, partially was the losses $XX.X the XX%. that the was share. This settlement Hurricane we defined adjustment Shyam our by offset or benefit to or settle XXXX $X.XX a During of in per damaged charge net fourth mentioned of net income million pension Erwin, quarter the million third recorded plan. at million, our earlier. Adjusted Tax Helene estimated quarter the that was was

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

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

specialty from in $XXX conditions, was largely the to by equivalent dynamics XXXX, XXXX last price increases gross period still down with gross QX, of Specialty likely sales improved Through year. Gross million, including margin last half XX we year, line Shyam in at expect weeks XX.X% the Not see deflation, product than the given benefit, lower margin to As range items with volume were not pricing specialty third XX% third the margins from gross in current volume. this mentioned, of the offset X duty-related until products XX%, higher the quarter, the our but of first of year-over-year. year. was when quarter in expectations. and down in and sequential sales compared basis primarily due X% points daily the was XX.X%, to specialty second profit slightly market to solid

basis gross the of Sequentially, lumber about about $XXX million a Now to panel feet, Both and in were panel structural $XX decrease, from inventory third a of were sales prices structural moving products comparing year the to with panel third when square down of respectively, second gross lumber XX%. the end decrease per XX% compared volumes last quarter in lumber board market due sales weeks $X.X of same XXXX, the second lower with compared the thousand points Gross per the margin write-down compared lower the million, quarter third down improving on benefited year-over-year resulted were which quarter, prior conditions in products third averages period. XX% XXXX of from $XXX Net decrease average from feet and thousand lumber profit when X% first the was to last decrease in flat third the year. margin of and structural sold. In were the prices was XX% million, from markets, of $XXX the slightly products. at the X in range a XX%, XX to due prices to was of quarter roughly to QX, of sold last levels. structural XXXX prices cost to year. inventory primarily the down were X% This the was XX% associated quarter quarter. products and and Through daily quarter panel was and the year's pricing period

sheet. Looking now at balance our

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

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

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

Now moving free cash working capital flow. to on and

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

Turning now allocation. to capital

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

further on than For the anticipated. slightly XXXX, facility to lower technology focused to continue improvements, be fleet and capital the we be improvements $XX discussed. will to upgrades investments previously The previously expect investments million our

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

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

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

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

volumes Price or continued a deflation with also and XXXX. that are overall Xx long-term and we to pricing results, improve our in will both optimistic leverage with less. Overall, margins are we products. specialty ratio gross along and We structural environment in impact pleased maintain net to plan housing of the

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

Operator

Loop Capital. from comes Stevenson your Jeffrey Instructions] question first And with [Operator

Jeffrey Stevenson

Congrats on a nice quarter.

such growth something So volume positive wondered that encouraging and the housing see EWP millwork was the during as you else new you of to completions, quarter. primary benefits, volume just seasonality in products cite? the specialty driver cited. categories it was in business healthy the would levels Was or improvement I of your that what

Shyam Reddy

Yes. Jeff. Thanks the for question,

along a and have new mentioned territories, along launches geographic strong geographic new multifamily I to as on expansion around focus, product share focus with products. branded with and our we gain really clarity, and strategy, So is products of with tied earlier, accounts that and driving which along -- national line

with be it it that to of millwork, or -- that particular, to truly and those excess as some a supply, scale, to the accounts or we advantage also in allow on and drive can millwork on can demand EWP There's about to in despite low focus, we X because categories. As volumes us our benefit incremental multifamily and instance, relates national whether well. those improve take think the market volumes seasonal forces or we better than as absolutely EWP multifamily basis, accounts allowing those channels, is respect us year-over-year and for macroeconomic

Jeffrey Stevenson

it. these especially XXXX? single-family housing No, EWP sequential just pricing And and you've year-over-year to if begin you year. which that price And specialty see believe any deflation I in we if great elevated moderation seen seen stabilize categories that's have of do improvement could in starts Got then some millwork, this hear. moving to categories, kind wondering key of these in declines was forward, in

Shyam Reddy

is, What X specialty, we're QX. great improvement first of for an seeing as sequentially question. in say in pricing the weeks Jeff, I would about Yes, we think

we the us half that when probably that half about us a sequential see next next year, which what year, we'll where talk low in see. it's the back in is up the confidence of yes, year-over-year of great confidence improvement improvement gives So in But pricing. second single-digit, improvement, slight that's and what gives the price to

Jeffrey Stevenson

margins to a prices obviously, off lumber below improvement at have And then, could And right moving you the see given levels on structural improved you in some and prices in believe side, XX days? OSB rebounded we both Do to forward do the higher now? if great. start or single-family lows. That's over last continue categories they're industry just supply-demand as move do rebound the July dynamics normalized think

Shyam Reddy

Yes.

reminder, was was a pretty pricing panel there to say -- So And pretty would quarter, in deflation second as what market as inventory. down is the saw that the relates I structural where it a like we if was in meaningfully. channel we result, massive heavy

so, second because I'd quarter, we had structural artificially the And say a taken. margins our reserve were low

about X.X%. flipped But QX we was And about that it year-to-date, in So it's X.X%. then was reserve think for XX%. and as about

what inventory the probably second that probably the means then saw inventory imbalance quarter that is with a here with of So more an in quarter. third I'd and say, in normalization, probably we

So always in XX-day and where caught so in channels low low we manufacturers are off inventory now. as about industry good keep terms of not the feel the we the right structural, And feel of sides. we're reminder, about good for a supply sits where the us, supply where are. we But

Operator

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

Greg Palm

forward, you're there some well. if terms areas maybe landscape just the Shyam, areas a What competitors, most if potential would update forward, seeing hopeful of briefly could out kind share share be are you us the in gains? share going was are I seeing that are that market? guess, I wondering from for And seeing where bit. you in you're going competitive as of mentioned what you helpful specifically know, but you gains, maybe on gains I

Shyam Reddy

Yes.

been all pretty we I regions have, the So think has the solid. East

activities West I day, as products scale accounts whether pick going the markets business. and the through sales than the at the help and is commercial think been what driving on, Some which us sales multifamily building really and of them helping of incremental in is really harder others, leveraging i.e., think end South, everybody experiencing. But manage to take their the up our those headwinds hit or about all and have or national we scalable we're support focused what's into it's the

some be would housing we and I say in actually that our seeing EWP, label and rebates example, through order completions weather products, of differentiator, a give by for how Another private are in as And of convert with they the to context and think pull-through advantage players of go as and we've competitive it is, some how their millwork can more than share. space. having business our go competitive the other they in impacts relates -- There to gaining managing in use the how pick we're strategies us employed, manner -- I a other -- the about inventory we in it result, develop business also share. despite in storms to in that up about through cycling allow deflationary of and whether programs context us a the pricing to terms that builders

Another into sales. thing is that just direct to headwinds we're doing these combat leaning

lower, there's are zero to the low to cost serve. margins Although obviously

EBITDA so of out, our as so it's are. the accretive strategy they other playing which elements are And long

we I in general lows. In There's sales existing we rates market. general And XX-year terms -- is cuts homes, constraints, obviously, the as mortgage is -- in there they're all then I'm which are XX-year the we no no to be a that market region chain might of uncertainty sense at start uncertainty. matter combined know. but velocity that there's seeing customer will be meaningful with of the capacity There life, have there signs will rate the a in still seeing supply excess the down softness continues of again, some And there until sense these of the talk in, you averages. with to I'm which sustained those seeing whatever bring and market, what

profitable order sales. incumbent the at our disposal upon basically to grab us to in drive sales those And and so it's drive levers incremental

Greg Palm

chugging market been maybe share builders know what's growth specifically keep move sort I allocating terms get X change that of exposed. resources, kind along, I players. taking big Yes. doing don't just we guess, of But where the at And know focused I business you're I production I mean a rates. and your more all your happens waiting are those or versus if reductions of mean, housing smaller steppers on from the rate is what cetera? or, does lower keeps strategy on doing, in et the everybody

Shyam Reddy

first, Well, about talked greenfield. on X, we that of we're know an is I so M&A greenfield. haven't But and focused the area

in will the at that need the we in business. But decade and as the housing homes doesn't with million pipeline forecasting. have pricing But will order via buybacks better We back robust to and meet given But is and closer of said I on supply then no the markets center or capital we're step grow scale, lean year believe as basically, into side, and of and the if is forecast, XX we M&A focused is we if up consistent to and will requirements we doing. can channel multifamily, over dynamics you gain continue provide matter the commercial time, road just our the we states been across XX day-to-day to potential even announcing really is continue greenfield. But -- and get soon, way current at really these the we'll deals. to that enter reinvesting then map on a one the shareholders with our to that to those across existing to new which, direct in over leaning on multiple that offering dynamics, headwinds. footprint opportunities business basis, And to and enough, historically fast to support about into immigration sits time, sense. and zoning a I as service only look you where At stay fights continue the and quite account are we get something which share focused leverage the market help We've the dealing even respect enterprise. or today we transactional returning think through on, share capacity greenfield business clearly the customer entire into profitable can within And play to think accretive take a that be business haven't support EBITDA new strategy. we're we sales, earlier, that be built it single-family sales enough, a the a transactional distribution how the X.X then into which makes a frankly, knife more it have of we take that to the time, next new per all on and deals, same order us whether to the build same that

and suppliers the product has beyond what been. geographic expansion, things of builders today share. And those the or helped have focused So via sitting X even around key channel on mix moving even very within these more are X these though really us mean, things SKU key X sidelines historical gain things, I custom with expansion, some of approach. on all all-of-the-above our through we're the combined small earlier key an approach home made that -- points I

no long-term market will to course, of the how that's matter underlying the share demographics, ultimately So thesis. dynamics market we gain And continue support headwinds. the

Operator

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

Reuben Garner

Just of to couple clarification questions. start, a well,

The margins. structural first is the on

have the and you start said also hit were Was mentioned in allow higher XQ -- in of think that I in quarter, that the quarter to category. Or that just quarter there in bottoming quarter? second margins Like, the played you talk how for to I out third you maybe through midway late about the that's in much lumber after the So the did that margins reversal how clearly, onetime the and normal think Can above XX%? came quarter, quarter. that in net you they of you range, and the X% something a of X% last in just was you kind to number? took

R. Wamser

what happened in took -- Yes. our our, brought the $X.X a a What And reserve is sold say, down million as second that's we reserve million we that reserve about X.X%. inventory that about to happened Reuben, in reserve flipped. rates was structural would $X.X quarter. I what QX,

goes which even Xs, face would with though that it's is XX%. normalized which on the my I -- rate that line structural be expectation right margins. so in more And would the would X.X%, which like say in for in XX% that high A to point X% QX to value, QX where our for be year-to-date, in

Reuben Garner

leave away bottoming we'd side the you in kind had way lumber walk maintain that competitive or the of any were quarter? And kind out these of to feel out on Okay. the through to from heard structural any middle business do like as fairly quarter you've business was things there margins

Shyam Reddy

Yes, first Andy up. then part the follow I'll take that, and will of

start mean, I is underlying look, principled inventory which very with the foundational have, around management. we thesis, So approach let's

just so we at itself of the to inventory from very manage of do. time, the structural days in hand, on optimal maintain sheet is turn away balance they and way And cetera. will do it we same with and to what don't with respect in come. every disciplined category a And having that days heavy and business, allows And margins walk protect us building across in in the particular, but of of levels inventory focus enterprise. the not we're we et that We terms structural so very product

walking position disciplined from and structural but the market sheet. operate we balance form that protect inventory healthy margins, then And competitive puts from ultimately perspective on that to very away opposed way, responsible, based manage have not so walking the dynamics business. we in in our through to only in But shape way are it about from supports us a business. which would markets current customers, in maintain as a away no I the or think We

R. Wamser

Yes.

net how price to talk lumber about includes add to in that, as in Just X%, we were panels. the and down XX% in of commentary, sales that XX% and deflation

in as I volume I opposite, in the were single result, almost a really structural. high we had a mean, say so So quarter volume. for would digits high we the

good a clearly digits I'd the volumes that issue, deflationary category just that right for away. dealing up that high single result But the We're shows So was walking in say, not with quarter. being now. we're

Reuben Garner

it question. be is, that Yes, my and next going really was to

you like had on better sides both So volume. market expected or of it than than better business, the sounds

you is drive markets and some customers a the smaller kind smaller that the the do share feel that initiatives gains? it's Just to? that builders you're place just your in this of do clear, Or exposed of to -- in put of be think you R&R with you've some builders recovery the and

Shyam Reddy

strategy. I for well, seasonal be adjustments. strongly back-end some may some most would it the part, it of share tied But believe say, I with correlates some gain obviously, the to --

we're to channels, meaningful about and think commercial drive, the you certain even let's to business some the that growth. part doing with to itself with -- doing say, and a respect sales also direct in supports multifamily of we're of respect the As direct volume work structural strategic of the

certain strategies there's service able So the there and order still customers. employ, gain point and as being the our sidelines are on business, to up you approach that we're and builders to despite more disciplined we homebuilders market can doing whatever margins which grow custom to the conditions share, are combine in keep despite inventory we management, relates are maintain deflation. volume that share, small big with And market picking it our being to

Reuben Garner

that's Okay. one more Great. sneak going I'm all right. in, to if

some we've know of tight. inventory as we living, specialty run about mentioned entry distribution. management. heard head You example, side the outdoor are structural you categories destocking I growth at weaker the the an year? in level, kind of you thinking How We've some your inventory part seen pretty as the guys categories, of into seasonally at

Shyam Reddy

Yes.

we I look, significant have elements long-term of X our living the one product of outdoor specialty being categories strategy. and key So mean,

and demands then the perspective, less need carry provide characteristics, just-in-time support meet just-in-time that. a to customers to goal turn manage from in obviously, destocking to the be inventory -- customers, may right? they our support to So working cash targets order customer part our inventory the is support day we business, that so that for on any specific have. again, carry, the our very perspective on really ultimately and that think I supports the we we flow forecasting And their benefits happening based as of And management the more about capital can do our to

started what you an saw X-step end from So of we as in drop we're or similar like commensurate not distribution buildup and anything sales off haven't because day, people last a at the seeing to to seen necessarily inventory the year we destocking a were equivalent post-pandemic. had

and rates out. to area isn't on. from products buy focus outdoor go property or So flatbed that opportunities a we railing concrete the specific role to to that's is a the you outdoor in really -- down, be for be whether X-step commercial, we've for exit, I you decking of could living There decks colors commercial instance, and color great those to outdoor or where to fundamentals think, hotel or see a sales come had the product. I distribution to product need it again, where And even capitalize doesn't Multifamily going valuable kind down come there decks we've are some us think living of the space. And whether development we tends one HELOC that be able X-step and that outdoor this where successful for happens you friendly assortment have and a interest that, very a or that patios been of good distribution a I be time, people it railing such be today East rates that our multifamily play carry areas living, over great play R&R-friendly to on. as to support that very an able customers West, is mean, for

a be focus. So continue to

Operator

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

Kurt Yinger

list sequentially, dynamics? has specialty half, may then categories you versus stand here. of deflation, think more much manufacturer that is be know terms the continued other And be competitive versus strictly getting how soft as little out EWP or challenging? that QX we where kind would factors a say bit price pricing of first the of pretty maybe we In Any to

R. Wamser

Yes.

of let's the optimism. say, some terms talk deflation in of about pockets So let we where me where and, we're seeing see the improvement

millwork on bright seeing our there. price year-over-year EWP we product And our think terms that's of had millwork. where a I product, of we at think But where we're private is as in when say we're one fourth quarter, least about would sit inflation. label deflation, millwork, for of that sort third in today the say that been within sign encouraging When sort in label we would seeing basis, private really that's in -- and So strong it's some primarily I actually in the quarter. in the particularly challenges largely Shyam I really it's mentioned, volumes that we've had sequential

millwork a back So say, I I we would improvement panels as in say lumber next would expect next and I would for to some specialty look for EWP, of the year, half -- the of areas. the and out degree, really

Kurt Yinger

Got it. And...

Shyam Reddy

sorry. And market... I'm

Kurt Yinger

go ahead, Shyam. Sorry,

Shyam Reddy

no, ahead. go No, no,

Kurt Yinger

segment prices just been was to the maybe specialty from there going follow-up. within commodity Is carryover this maybe the I I still has panel tied way lumber specialty what No, about on specialty, in broadly. headwind the to of those to some and products pricing mean, any year? think

R. Wamser

originally, now our the terms we'd in was in of where maybe some that that's we're that to that where that reason we expectation from of sort why beginning that's massive saw increases thought of we'd year we deflation attributed up I inflation end the that. it's see sort come would see that mean, of that mid-May price Yes. P&L. certainly the said say back And we through And to the a I of quarter maybe of in largely quarter And I of would and seeing price -- second or the X. say June. next there we

encouraged the the expected on in QX ago, But X probably been than I we look has some more we've seeing in terms of So it's year, to. Shyam months half improvement we that we're of volumes increases modest we maybe one the ago. in really sequentially, of really months here as say QX, really have price deflation and these side, X that which we're to at strong next we look when back expect great had but alluded I'd

Shyam Reddy

happened came a was Yes. dynamic online. market standpoint, obviously, post-pandemic, from capacity that has a And lot new of what there

seeing the also are certain specific time, some and advantage the feel private dynamics and product, to in some the supply with EWP, out, to friendly that than the be so the substitution adequate remodel on given the same being of shifted sales there's of label we due focused have we due very there's the soft ultimate and in on. on There's for along enough whether and folks, demand whether costs you curtailments it I example, HVAC those dynamics do labor installation which about EWP and Again, repair you're ask allows and competitively are a our where to or we're just other to the part drive because obviously, categories allow, run more efficient that's folks marketplace, of can market when to, to for taken to EWP mills folks housing EWP millwork, like let's from, as are of market the things have soft happening of of the certain So so allow EWP been driving things equipment some and in more it us example, helpful. We've pre-cut down interesting not lot for trusses helps EWP. EWP so that market be that shut say, there sales, reduce invested and channel play that to product some market user marketplace other in and through markets strategy, channels. millwork thus of end those the ductwork also well. At

current will market these doing we're the to markets drive are So to things given volumes double evolve. as dynamics, there we very those down on and specific continue

Kurt Yinger

Got it.

much under-indexed I across look like footprint I the a does Okay. color any about there? of it kind appreciate How where yielding new perspective, of you're opportunity geographic mean, geographies, line expansions there. we are you were to the product there it And still into in on benefits. terms And product from the coverage? that's kind of in remains think particular think relatively if category

Shyam Reddy

markets. Yes. are There definitely

move are can there's we across so us the a because a in. stocking specific optimal those proposition we bad ensure positions provide we're key is continue categories thing to in that's grow a But service all yes. to the underpenetrated. that of we But markets taking not lot full in matter actions we're as that opportunity very forward, the to markets all market no to the where So answer for

So to again, of take our scale. full advantage

supplier, our this how great be and example, be. launched a powerful a product, For earlier rolled stocking new and a was a product exercise this and out with new there position Georgia-Pacific, would we that fair great as And can the would summer, which channel -- certain product it ensure that our it best. where date, fruit. fuel bore and related in substantially that amount support a it all strategy to all helped customers by in locations a of We

with strategy, to priorities. our along we of or channel continue fuel will that the support the have strategic strategic So some strategies priorities

Kurt Yinger

Right.

well. be mean, Okay. as daily presumably, a thus that typical up That through that makes in sales October? lastly, sounds versus sense. like quarter-to-date given far And then of just up what seen would I fair it QX. Is terms volumes year-over-year you've seasonality, statement

R. Wamser

our about mid-single too year-over-year, in are think seasonal up is the into good. But much read weeks fair say pattern of volumes a both statement. when I the don't first because it mid-single, weeks, generally That's would X where here QX which for categories, Yes. typical you quarter biggest the regardless, first volumes year-over-year. up today, X the we quarters generally -- sit But then third and and are good are are which as softest. and QX second our is

Operator

concludes our turn will Tom now question-and-answer to for closing that remarks. And Morabito back conference I over session. the

Thomas Morabito

full-year us as February joining to fourth results. speaking look you our quarter with Thank for today, XXXX in Abby. you Thanks, share we and and again we forward

Operator

for this your gentlemen, you and we and concludes today's call, ladies participation. thank And

You may now disconnect.

BlueLinx (BXC) 30 Oct 242024 Q3 Earnings call transcript