UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q ~~10-Q~~



☑			QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended ~~March 28, 2020~~April 3, 2021



☐			TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

Commission file number: ~~1-32383~~

001-32383



			BlueLinx Holdings Inc.
			(Exact name of registrant as specified in its charter)



Delaware		77-0627356
(State of Incorporation)		(I.R.S. Employer Identification No.)

1950 Spectrum Circle, Suite 300
Marietta	GA	30067
(Address of principal executive offices)		(Zip Code)

(770) 953-7000

(Registrant’s telephone number, including area code)

Not applicable

(Former name or former address, if changed since last report.)

Securities registered pursuant to Section 12(b) of the Act:



Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common Stock, par value $0.01 per share	BXC	New York Stock Exchange

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☑ No ☐

Indicate by check mark whether the registrant has submitted electronically ~~and posted on its corporate Web site, if any,~~(Section 232.405 of this chapter) every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes ☑ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large Accelerated Filer

☐

Accelerated Filer

☑

Non-accelerated Filer

☐

Smaller Reporting Company

☑

Emerging Growth Company

☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☑

As of ~~May 4, 2020,~~April 30, 2021, there were ~~9,368,874~~9,468,042 shares of BlueLinx Holdings Inc. common stock, par value $0.01, outstanding.

BLUELINX HOLDINGS INC.

Form 10-Q

For the Quarterly Period Ended ~~March 28, 2020~~April 3, 2021

INDEX



		PAGE
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements — BlueLinx Holdings Inc. (Unaudited)		1
Condensed Consolidated Statements of Operations and Comprehensive ~~Loss~~Income (Loss)		1
Condensed Consolidated Balance Sheets		2
Condensed Consolidated Statements of Stockholders' Equity (Deficit)		3
Condensed Consolidated Statements of Cash Flows		34
~~Condensed Consolidated Statements of Stockholders’ Deficit~~		4
Notes to Condensed Consolidated Financial Statements	5
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations		1617
Item 3. Quantitative and Qualitative Disclosures About Market Risk		2426
Item 4. Controls and Procedures		2426

PART II. OTHER INFORMATION
Item 1. Legal Proceedings		2527
Item 1A. Risk Factors		2527
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds		2728
Item 3. Defaults Upon Senior Securities		2728
Item 4. Mine Safety Disclosures		2728
Item 5. Other Information		2728
Item 6. Exhibits		2829

Signature		2930

PART I. FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

BLUELINX HOLDINGS INC.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND

COMPREHENSIVE ~~LOSS~~INCOME (LOSS)

(In thousands, except per share data)

(Unaudited)


	Three Months Ended							Three Months Ended
	March 28, 2020			March 30, 2019				April 3, 2021		March 28, 2020
Net sales	$	662,070		$	638,701		Net sales	$	1,025,469	$	662,070
Cost of sales	568,861			552,656			Cost of sales	845,077		568,861
Gross profit	93,209			86,045			Gross profit	180,392		93,209
Operating expenses:							Operating expenses:
Selling, general, and administrative	77,769			74,410			Selling, general, and administrative	75,560		74,588
Depreciation and amortization							Depreciation and amortization	7,465		7,635
Amortization of deferred gains on real estate							Amortization of deferred gains on real estate	(984)		(984)
Gains from sales of property	(525		)	—			Gains from sales of property	(1,287)		(525)
Depreciation and amortization	7,635			7,328
Other operating expenses							Other operating expenses	112		4,165
Total operating expenses	84,879			81,738			Total operating expenses	80,866		84,879
Operating income	8,330			4,307			Operating income	99,526		8,330
Non-operating expenses (income):							Non-operating expenses (income):
Interest expense, net	14,380			13,401			Interest expense, net	16,234		14,380
Other (income) expense, net	(237		)	150
Loss before benefit from income taxes	(5,813		)	(9,244		)
Benefit from income taxes	(5,026		)	(2,525		)
Net loss	$	(787	)	$	(6,719	)
Other income, net							Other income, net	(314)		(237)
Income (loss) before provision for (benefit from) income taxes							Income (loss) before provision for (benefit from) income taxes	83,606		(5,813)
Provision for (benefit from) income taxes							Provision for (benefit from) income taxes	21,746		(5,026)
Net income (loss)							Net income (loss)	$	61,860	$	(787)

Basic loss per share	$	(0.08	)	$	(0.72	)
Diluted loss per share	$	(0.08	)	$	(0.72	)
Basic income (loss) per share							Basic income (loss) per share	$	6.53	$	(0.08)
Diluted income (loss) per share							Diluted income (loss) per share	$	6.28	$	(0.08)

Comprehensive loss:
Net loss	$	(787	)	$	(6,719	)
Comprehensive income (loss):							Comprehensive income (loss):
Net income (loss)							Net income (loss)	$	61,860	$	(787)
Other comprehensive income (loss):							Other comprehensive income (loss):
Foreign currency translation, net of tax	3			7
Amortization of unrecognized pension loss, net of tax	196			224
Pension curtailment, net of tax	—			853
Amortization of unrecognized pension gain, net of tax							Amortization of unrecognized pension gain, net of tax	239		196
Other	(19		)	15			Other	11		(16)
Total other comprehensive income	180			1,099			Total other comprehensive income	250		180
Comprehensive loss	$	(607	)	$	(5,620	)
Comprehensive income (loss)							Comprehensive income (loss)	$	62,110	$	(607)

BLUELINX HOLDINGS INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

(In thousands, except share data)

(Unaudited)


	March 28, 2020			December 28, 2019				April 3, 2021		January 2, 2021
ASSETS	ASSETS						ASSETS
Current assets:							Current assets:
Cash	$	12,558		$	11,643		Cash	$	179	$	82
Receivables, less allowances of $3,875 and $3,236, respectively	247,940			192,872
Receivables, less allowances of $5,573 and $4,123, respectively							Receivables, less allowances of $5,573 and $4,123, respectively	418,815		293,643
Inventories, net	378,634			345,806			Inventories, net	376,423		342,108
Other current assets	26,437			27,718			Other current assets	33,029		32,581
Total current assets	665,569			578,039			Total current assets	828,446		668,414
Property and equipment, at cost	308,288			308,067			Property and equipment, at cost	310,101		299,935
Accumulated depreciation	(117,036		)	(112,299		)	Accumulated depreciation	(125,769)		(121,223)
Property and equipment, net	191,252			195,768			Property and equipment, net	184,332		178,712
Operating lease right-of-use assets	52,502			54,408			Operating lease right-of-use assets	48,969		51,142
Goodwill	47,772			47,772			Goodwill	47,772		47,772
Intangible assets, net	24,414			26,384			Intangible assets, net	17,067		18,889
Deferred tax assets	59,308			53,993			Deferred tax assets	66,795		62,899
Other non-current assets	20,404			15,061			Other non-current assets	19,099		20,302
Total assets	$	1,061,221		$	971,425		Total assets	$	1,212,480	$	1,048,130
LIABILITIES AND STOCKHOLDERS’ DEFICIT
LIABILITIES AND STOCKHOLDERS’ EQUITY							LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:							Current liabilities:
Accounts payable	$	162,398		$	132,348		Accounts payable	$	218,975	$	165,163
Accrued compensation	8,216			7,639			Accrued compensation	10,798		24,751
Current maturities of long-term debt, net of discount and debt issuance costs of $74 and $74, respectively	2,176			2,176
Finance leases - short-term	5,924			6,385
Taxes payable							Taxes payable	33,646		7,847
Current maturities of long-term debt, net of debt issuance costs of $0 and $74, respectively							Current maturities of long-term debt, net of debt issuance costs of $0 and $74, respectively	0		1,171
Finance lease liabilities - short-term							Finance lease liabilities - short-term	7,459		5,675
Operating lease liabilities - short-term							Operating lease liabilities - short-term	5,123		6,076
Real estate deferred gains - short-term	3,935			3,935			Real estate deferred gains - short-term	4,040		4,040
Operating lease liabilities - short-term	7,016			7,317
Other current liabilities	9,903			11,323			Other current liabilities	11,747		14,309
Total current liabilities	199,568			171,123			Total current liabilities	291,788		229,032
Non-current liabilities:							Non-current liabilities:
Long-term debt, net of discount and debt issuance costs of $11,861 and $12,481, respectively	444,937			458,439
Real estate financing obligation	123,765			44,914
Finance leases - long-term	145,427			146,611
Long-term debt, net of debt issuance costs of $2,615 and $8,936, respectively							Long-term debt, net of debt issuance costs of $2,615 and $8,936, respectively	355,899		321,270
Finance lease liabilities - long-term							Finance lease liabilities - long-term	273,815		267,443
Operating lease liabilities - long-term							Operating lease liabilities - long-term	44,021		44,965
Real estate deferred gains - long-term	80,935			81,886			Real estate deferred gains - long-term	77,059		78,009
Operating lease liabilities - long-term	45,571			47,091
Pension benefit obligation	22,596			23,420			Pension benefit obligation	21,730		22,684
Other non-current liabilities	24,106			24,024			Other non-current liabilities	25,655		25,635
Total liabilities	1,086,905			997,508			Total liabilities	1,089,967		989,038
Commitments and Contingencies							Commitments and Contingencies	0		0
STOCKHOLDERS’ DEFICIT:
Common Stock, $0.01 par value, 20,000,000 shares authorized, 9,366,641 and 9,365,768 outstanding on March 28, 2020 and December 28, 2019, respectively	94			94
STOCKHOLDERS’ EQUITY:							STOCKHOLDERS’ EQUITY:
Common Stock, $0.01 par value, 20,000,000 shares authorized, 9,468,042 and 9,462,774 outstanding on April 3, 2021 and January 2, 2021, respectively							Common Stock, $0.01 par value, 20,000,000 shares authorized, 9,468,042 and 9,462,774 outstanding on April 3, 2021 and January 2, 2021, respectively	95		95
Additional paid-in capital	261,980			260,974			Additional paid-in capital	268,006		266,695
Accumulated other comprehensive loss	(34,383		)	(34,563		)	Accumulated other comprehensive loss	(35,742)		(35,992)
Accumulated stockholders’ deficit	(253,375		)	(252,588		)	Accumulated stockholders’ deficit	(109,846)		(171,706)
Total stockholders’ deficit	(25,684		)	(26,083		)
Total liabilities and stockholders’ deficit	$	1,061,221		$	971,425
Total stockholders’ equity							Total stockholders’ equity	122,513		59,092
Total liabilities and stockholders’ equity							Total liabilities and stockholders’ equity	$	1,212,480	$	1,048,130

BLUELINX HOLDINGS INC.

CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY (DEFICIT)


	Common Stock			Additional Paid-In Capital		Accumulated Other Comprehensive Loss		Accumulated Deficit		Stockholders’ Equity Total
	Shares	Amount
Balance, Balance, January 2, 2021	9,463	$	95	$	266,695	$	(35,992)	$	(171,706)	$	59,092
Net income	—	—		—		—		61,860		61,860
Foreign currency translation, net of tax	—	—		—		(6)		—		(6)
Impact of pension plan, net of tax	—	—		—		239		—		239
Vesting of restricted stock units	8	—		—		—		—		—
Compensation related to share-based grants	—	—		1,410		—		—		1,410
Repurchase of shares to satisfy employee tax withholdings	(3)	—		(99)		—		—		(99)
Other	—	—		—		17		—		17
Balance, April 3, 2021	9,468	95		268,006		(35,742)		(109,846)		122,513


	Common Stock			Additional Paid-In Capital		Accumulated Other Comprehensive Loss		Accumulated Deficit		Stockholders’ Deficit Total
	Shares	Amount
Balance, Balance, December 28, 2019	9,366	$	94	$	260,974	$	(34,563)	$	(252,588)	$	(26,083)
Net loss	—	—		—		—		(787)		(787)
Foreign currency translation, net of tax	—	—		—		3		—		3
Impact of pension plan, net of tax	—	—		—		196		—		196
Vesting of restricted stock units	2	—		—		—		—		—
Compensation related to share-based grants	—	—		1,004		—		—		1,004
Repurchase of shares to satisfy employee tax withholdings	(1)	—		(7)		—		—		(7)
Other	—	—		9		(19)		—		(10)
Balance, March 28, 2020	9,367	94		261,980		(34,383)		(253,375)		(25,684)

BLUELINX HOLDINGS INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS


	Three Months Ended
	April 3, 2021		March 28, 2020
Cash flows from operating activities:
Net income (loss)	$	61,860	$	(787)
Adjustments to reconcile net income (loss) to cash used in operations:
Provision for (benefit from) income taxes	21,746		(5,026)
Depreciation and amortization	7,465		7,635
Amortization of debt issuance costs	603		956
Adjustments to debt issuance costs associated with term loan	5,791		0
Gains from sales of property	(1,287)		(525)
Amortization of deferred gains from real estate	(984)		(984)
Share-based compensation	1,410		1,004
Changes in operating assets and liabilities:
Accounts receivable	(125,172)		(55,068)
Inventories	(34,315)		(32,828)
Accounts payable	53,812		30,050
Prepaid and other current assets	(1,246)		(3,006)
Other assets and liabilities	(14,291)		(608)
Net cash used in operating activities	(24,608)		(59,187)

Cash flows from investing activities:
Proceeds from sale of assets	1,810		44
Property and equipment investments	(1,122)		(1,245)
Net cash provided by (used in) investing activities	688		(1,201)

Cash flows from financing activities:
Borrowings on revolving credit facilities	262,210		204,196
Repayments on revolving credit facilities	(191,943)		(149,079)
Repayments on term loan	(43,204)		(69,238)
Proceeds from real estate financing transactions	0		78,329
Debt financing costs	(861)		(336)
Repurchase of shares to satisfy employee tax withholdings	(56)		(7)
Principal payments on finance lease liabilities	(2,129)		(2,562)
Net cash provided by financing activities	24,017		61,303

Net change in cash	97		915
Cash at beginning of period	82		11,643
Cash at end of period	$	179	$	12,558

Supplemental Cash Flow Information
Net income tax refunds during the period	$	0	$	352
Interest paid during the period	$	9,971	$	13,558

Three Months Ended
March 28, 2020 March 30, 2019
Cash flows from operating activities:
Net loss $ (787 ) $ (6,719 )
Adjustments to reconcile net loss to cash used in operations:
Benefit from income taxes (5,026 ) (2,525 )
Depreciation and amortization 7,635
7,328
Amortization of debt issuance costs 956
455
Gains from sales of property (525 ) —
Share-based compensation 1,004
706
Amortization of deferred gain (984 ) (951 )
Changes in operating assets and liabilities:
Accounts receivable (55,068 ) (37,908 )
Inventories (32,828 ) (45,479 )
Accounts payable 30,050
26,004
Prepaid and other current assets (3,006 ) (423 )
Other assets and liabilities (608 ) 1,191
Net cash used in operating activities (59,187 ) (58,321 )

Cash flows from investing activities:

Acquisition of business, net of cash acquired —
6,009
Proceeds from sale of assets 44
143
Property and equipment investments (1,245 ) (1,223 )
Net cash (used in) provided by investing activities (1,201 ) 4,929

Cash flows from financing activities:

Borrowings on revolving credit facilities 204,196
197,114
Repayments on revolving credit facilities (149,079 ) (136,892 )
Repayments on term loan (69,238 ) (900 )
Principal payments on real estate financing obligations (340 ) —
Proceeds from real estate financing obligations 78,329
—
Debt financing costs (336 ) —
Repurchase of shares to satisfy employee tax withholdings (7 ) —
Principal payments on finance lease obligations (2,222 ) (2,187 )
Net cash provided by financing activities 61,303
57,135

Net change in cash 915
3,743
Cash at beginning of period 11,643
8,939
Cash at end of period $ 12,558
$ 12,682

~~BLUELINX HOLDINGS INC.~~

~~CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ DEFICIT~~

Common Stock
Additional
Paid-In Capital

Accumulated
Other
Comprehensive Loss
Accumulated Deficit Stockholders’ Deficit Total
Shares Amount
Balance, December 28, 2019 9,366
$ 94
$ 260,974
$ (34,563 ) $ (252,588 ) $ (26,083 )
Net loss —
—
—
—
(787 ) (787 )
Foreign currency translation, net of tax —
—
—
3
—
3
Unrealized gain from pension plan, net of tax —
—
—
196
—
196
Vesting of restricted stock units 2
—
12
—
—
12
Compensation related to share-based grants —
—
1,004
—
—
1,004
Repurchase of shares to satisfy employee tax withholdings (1 ) —
(7 ) —
—
(7 )
Other —
—
(3 ) (19 ) —
(22 )
Balance, March 28, 2020 9,367
$ 94
$ 261,980
$ (34,383 ) $ (253,375 ) $ (25,684 )

Common Stock
Additional
Paid-In Capital

Accumulated
Other
Comprehensive Loss
Accumulated Deficit Stockholders’ Deficit Total
Shares Amount
Balance, December 29, 2018 9,294
$ 92
$ 258,596
$ (37,129 ) $ (236,222 ) $ (14,663 )
Net loss —
—
—
—
(6,719 ) (6,719 )
Adoption of ASC 842, net of tax —
—
—
—
1,291
1,291
Foreign currency translation, net of tax —
—
—
7
—
7
Unrealized gain from pension plan, net of tax —
—
—
1,077
—
1,077
Vesting of restricted stock units 49
1
—
—
—
1
Compensation related to share-based grants —
—
706
—
—
706
Other —
—
—
15
—
15
Balance, March 30, 2019 9,343
$ 93
$ 259,302
$ (36,030 ) $ (241,650 ) $ (18,285 )

~~See accompanying Notes.~~

BLUELINX HOLDINGS INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

~~March 28, 2020~~April 3, 2021

(Unaudited)

1. Basis of Presentation and Summary of Significant Accounting Policies

Basis of Presentation

The accompanying unaudited interim Condensed Consolidated Financial Statements include the accounts of BlueLinx Holdings Inc. and its wholly owned subsidiaries ~~(“the Company”~~(the “Company”). ~~Our independent registered public accounting firm has not audited the accompanying interim financial statements.~~ We derived the condensed consolidated balance sheet at ~~March 28, 2020,~~April 3, 2021, from the audited consolidated financial statements included in our Annual Report on Form 10-K for the fiscal year ended ~~December 28, 2019~~January 2, 2021 (the “Fiscal ~~2019~~2020 Form 10-K”), as filed with the Securities and Exchange Commission on March ~~11, 2020.~~3, 2021. In the opinion of our management, the condensed consolidated financial statements reflect all adjustments, which are of a normal recurring nature, necessary for a fair presentation of our statements of operations and comprehensive ~~loss~~income (loss) for the three months ended April 3, 2021, and March 28, 2020, ~~and March 30, 2019,~~ our balance sheets at April 3, 2021, and January 2, 2021, our statements of stockholders’ equity (deficit) for the three months ended April 3, 2021, and March 28, 2020, and ~~December 28, 2019,~~ our statements of cash flows for the three months ended April 3, 2021, and March 28, ~~2020 and March 30, 2019, and our statements of stockholders’ deficit for the three months ended March 28, 2020 and March 30, 2019.~~2020.

We have condensed or omitted certain notes and other information from the interim condensed consolidated financial statements presented in this report. Therefore, these condensed consolidated interim financial statements should be read in conjunction with the Fiscal ~~2019~~2020 Form 10-K. In addition, certain prior period amounts have been reclassified to conform to the current period's presentation. These reclassifications did not ~~materially~~ impact operating income or consolidated net ~~loss.~~income (loss). The results for the three months ended ~~March 28, 2020,~~April 3, 2021, are not necessarily indicative of results that may be expected for the full year ending January ~~2, 2021,~~1, 2022, or any other interim period.

We operate on a 5-4-4 fiscal calendar. Our fiscal year ends on the Saturday closest to December 31 of that fiscal year and may comprise 53 weeks in certain years. Our ~~2020~~2021 fiscal year contains 5352 weeks and ends on January ~~2, 2021~~.1, 2022. Fiscal ~~2019~~2020 contained 5253 weeks and ended on ~~December 28, 2019~~.January 2, 2021.

Our financial statements are prepared in conformity with U.S. generally accepted accounting principles ~~(U.S. GAAP)~~(“U.S. GAAP”), which requires us to make estimates based on assumptions about current and, for some estimates, future economic and market conditions, which affect reported amounts and related disclosures in our financial statements. Although our current estimates contemplate current and expected future conditions, as applicable, it is reasonably possible that actual conditions could differ from our expectations, which could materially affect our results of operations and financial position. Some of our estimates may be affected by the ongoing novel coronavirus ~~(COVID-19)~~(“COVID-19”) pandemic. The severity, magnitude, and duration, as well as the economic consequences of the COVID-19 pandemic, are uncertain, rapidly changing, and difficult to predict. As a result, our accounting estimates and assumptions may change over time in response to ~~COVID-19.~~the continuing COVID-19 pandemic.

On April 13, 2018, we completed the acquisition of Cedar Creek Holdings, Inc. (“Cedar Creek”). ~~The accounting~~Results for ~~the~~ Cedar Creek ~~acquisition was finalized on December 29, 2018 and is~~are included in the consolidated financial information presented herein.

Reclassification of Prior ~~Year~~Period Presentation

~~An adjustment has been made to~~We have reclassified certain costs within the Condensed Consolidated Statements of ~~Cash Flows~~Operations and Comprehensive Income (Loss) for the three months ended March 28, 2020, from selling, general and ~~March 30, 2019,~~administrative to ~~include outstanding payments as part~~amortization of deferred gains on real estate and other operating expenses. These costs primarily relate to the amortization of gains from prior real estate sales and the integration of the ~~change in accounts payable~~acquisition of Cedar Creek.

We have reclassified certain payables within cash flows from operating activities. In previous periods, this change was included within cash flows from financing activities. We believe this classification is a preferable way to present our cash flows as outstanding payments are included in accounts payable within ourthe Condensed Consolidated Balance ~~Sheet.~~Sheets for the year ended January 2, 2021, from other current liabilities to taxes payable. These payables relate to amounts due to various tax authorities.

Recently Adopted Accounting Standards

~~Leases.~~Defined Benefit Pension Plan. In ~~2016,~~August 2018, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. ~~2016-02, “Leases (Topic 842)~~2018-14, “Compensation-Retirement-Benefits-Defined Benefit Plans-General (Subtopic 715-20).” ~~Topic 842 establishes a new lease accounting model.~~ The ~~most significant changes include~~amendments in this update modify the ~~clarification of~~ disclosure requirements for employers that sponsor defined benefit pension or other post-retirement plans by removing six previously required disclosures and adding two. The ASU also removes

the ~~definition~~disclosure requirements for the effects of a lease, the requirement for lessees to recognize for all leases a right-of-use asset and a corresponding lease liability in the consolidated balance sheet, and additional quantitative and qualitative disclosures which are designed to give financial statement users informationone-percentage-point change on the ~~amount, timing,~~assumed health care costs and ~~uncertainty~~the effect of ~~cash flows arising from leases.~~

~~Expenses are recognized~~this change in rates on service cost, interest cost, and the ~~consolidated statement of income in a manner similar to prior accounting guidance. Lessor accounting under the new standard is substantially unchanged.~~benefit obligation for postretirement healthcare benefits. We adopted this standard ~~and all related amendments thereto,~~ effective ~~December 30, 2018, the first day of our 2019~~for fiscal year using a modified retrospective approach, which applies the provisions of the new guidance at the effective date without adjusting the comparative periods presented. We have elected the package of practical expedients permitted under the transition guidance within the new standard, which among other things, allows us to carry forward the historical accounting relating to lease identification and classification for existing leases upon adoption. We have made an accounting policy election to keep leases with an initial term of 12 months or less off of the consolidated balance sheet. We implemented internal controls and a lease accounting information system to enable the preparation of financial information required by the new standard.2020. The adoption of ~~Topic 842 had a material impact on our condensed consolidated balance sheets but~~this standard did not have a material impact on ~~our condensed~~the Company's consolidated ~~statements~~financial position, results of operations, or cash flows.

Fair Value Measurement. In August 2018, the FASB issued ASU No, 2018-13, “Fair Value (“FV”) Measurement (Topic 820).” In addition to making certain modifications, the standard removed the requirements to disclose: (i) the amount of and reasons for transfers between Level 1 and Level 2 of the FV hierarchy; (ii) the policy for timing transfers between levels; and (iii) the valuation process for Level 3 FV measurements. The standard will require public entities to disclose: (a) the changes in unrealized gains and losses for the period included in other comprehensive ~~loss.~~income for recurring Level 3 FV measurements held at the end of the reporting period; and (b) the range and weighted average of significant unobservable inputs used to develop Level 3 fair value measurements. For certain unobservable inputs, an entity may disclose other quantitative information in lieu of the weighted average if the entity determines that other quantitative information would be a more reasonable and rational method to reflect the distribution of unobservable inputs used to develop Level 3 FV measurements. The additional disclosure requirements should be applied prospectively for the most ~~significant~~recent interim or annual period presented in the fiscal year of adoption. All other amendments should be applied retrospectively to all periods presented. We adopted this standard effective December 29, 2019, the first day of our 2020 fiscal year. The adoption of this standard did not have a material impact ~~was the recognition of right-of-use assets and lease liabilities of $57.5 million~~ on the ~~condensed~~Company's consolidated ~~balance sheet as~~financial position, results of ~~the adoption date. Additionally, $1.7 million of deferred gains associated with sale-leaseback transactions was recorded as a cumulative-effect adjustment to accumulated deficit.~~operations, or cash flows.

Accounting Standards Effective in Future Periods

Credit Impairment Losses. In June 2016, the FASB issued ASU 2016-13, “Financial Instruments - Credit Losses (Topic 326).” This ASU sets forth a current expected credit loss (“CECL”) model which requires the measurement of all expected credit losses for financial instruments or other assets (e.g., trade receivables), held at the reporting date based on historical experience, current conditions, and reasonable supportable forecasts. This replaces the existing incurred loss model, is applicable to the measurement of credit losses on financial assets measured at amortized cost, and applies to some off-balance sheet credit exposures. The standard also requires enhanced disclosures to help financial statement users better understand significant estimates and judgments used in estimating credit losses, as well as the credit quality and underwriting standards of an entity's portfolio. ASU 2019-10 extended the effective date of ASU 2016-13 to interim and annual periods beginning after December ~~22,~~15, 2022, for certain public business entities, including smaller reporting companies. We have not completed our assessment of the standard, but we do not expect the adoption to have a material impact on the Company's consolidated financial position, results of operations, or cash flows.

~~Defined Benefit Pension Plan~~. In August 2018, the FASB issued ASU No. 2018-14, “Compensation-Retirement-Benefits-Defined Benefit Plans-General (Subtopic 715-20).” The amendments in this update modify the disclosure requirements for employers that sponsor defined benefit pension or other post-retirement plans by removing six previously required disclosures and adding two. The amendments also clarify certain other disclosure requirements. The amendments in this standard are effective for fiscal years ending after December 15, 2020. Early adoption is permitted. We have not completed our assessment of the standard, but we do not expect the adoption to have a material impact on the Company's consolidated financial position, results of operations, or cash flows.

~~Income Taxes~~. In December 2019, the FASB issued ASU No.2019-12, “Income taxes (Topic 740): Simplifying the Accounting for Income Taxes.” This ASU simplifies the accounting for income taxes by removing certain exceptions to the general principles in ASC 740 and also clarifies and amends existing guidance to improve consistent application. The amendments in this standard are effective for interim periods and fiscal years beginning after December 15, 2020. Early adoption is permitted. We are currently assessing the impact of the new guidance, but do not expect the adoption to have a material impact on the Company’s consolidated financial position, results of operations, or cash flows.

2. Goodwill and Other Intangible Assets

In connection with the acquisition of Cedar Creek, we acquired certain intangible assets. As of ~~March 28, 2020,~~April 3, 2021, our intangible assets consist of goodwill and other intangible assets including customer relationships, noncompete agreements, and trade names.

Goodwill

Goodwill is the excess of the cost of an acquired entity over the fair value of tangible and intangible assets (including customer relationships, noncompete agreements, and trade names) acquired, and liabilities assumed, under acquisition accounting for business combinations. As of ~~March 28, 2020,~~April 3, 2021, goodwill was $47.8 million.

Goodwill is not subject to amortization but must be tested for impairment at least annually. This test requires us to assign goodwill to a reporting unit and to determine if the fair value of the reporting unit’s goodwill is less than its carrying amount. We evaluate goodwill for impairment during the fourth quarter of each fiscal year. In addition, we will evaluate the carrying value for impairment between annual impairment tests if an event occurs or circumstances change that would indicate the carrying amount may be impaired. Such events and indicators may include, without limitation, significant declines in the

industries in which our products are used, significant changes in capital market conditions, and significant changes in our market capitalization. No such indicators were present during the first quarter of fiscal 2021. Our ~~one~~1 reporting unit has a ~~negative~~fair value that exceeds its carrying ~~amount of net assets~~value as of ~~March 28, 2020.~~April 3, 2021.

Definite-Lived Intangible ~~Assets.~~Assets

On ~~March 28, 2020,~~April 3, 2021, the gross carrying amounts, accumulated amortization, and net carrying amounts of our definite-lived intangible assets were as follows:

(In thousands) Gross carrying amounts
Accumulated
Amortization
^[1]
Net carrying amounts
Customer relationships $ 25,500
$ (7,655 ) $ 17,845
Noncompete agreements 8,254
(4,048 ) 4,206
Trade names 6,826
(4,463 ) 2,363
Total $ 40,580
$ (16,166 ) $ 24,414


	Weighted Average Remaining Useful Lives	Gross Carrying Amounts		Accumulated Amortization		(1)	Net Carrying Amounts
		(In thousands)
Customer relationships	9	$	25,500	$	(10,663)		$	14,837
Noncompete agreements	1	8,254		(6,111)			2,143
Trade names	1	6,826		(6,739)			87
Total		$	40,580	$	(23,513)		$	17,067

^[1]

(1) Intangible assets, except customer relationships, are amortized on ~~straight line~~a straight-line basis. Customer relationships are amortized on a double declining balance method.

Amortization Expense

~~The weighted average estimated useful life remaining for customer relationships, noncompete agreements, and trade names is approximately 10 years, 2 years, and 1 year, respectively.~~ Amortization expense for the definite-lived intangible assets was $1.8 million and $2.0 million for the three-month periods ended April 3, 2021, and March 28, 2020, ~~and March 30, 2019, was $2.0 million and $2.1 million,~~ respectively.

Estimated amortization expense for definite-lived intangible assets for the remaining portion of ~~2020~~2021 and the next ~~four~~five fiscal years is as follows:


	Estimated Amortization
	(In thousands)
2021	$	3,499
2022	2,763
2023	1,807
2024	1,505
2025	1,423
2026	1,423

(In thousands) Estimated Amortization
2020 $ 5,490
2021 4,973
2022 3,111
2023 1,807
2024 1,505

3. Revenue Recognition

We recognize revenue when ~~control of promised goods or services is transferred~~the following criteria are met: (1) Contract with the customer has been identified; (2) Performance obligations in the contract have been identified; (3) Transaction price has been determined; (4) Transaction price has been allocated to the ~~Company’s customers in an amount that reflects the consideration we expect to be entitled to in exchange for those goods or services.~~performance obligations; and (5) When (or as) performance obligations are satisfied.

Contracts with our customers are generally in the form of standard terms and conditions of sale. From time to time, we may enter into specific contracts, ~~with some of our larger customers,~~ which may affect delivery terms. Performance obligations in our contracts generally consist solely of delivery of goods. For all sales channel types, consisting of warehouse, direct, and reload sales, we typically satisfy our performance obligations upon shipment. Our customer payment terms are typical for our industry, and may vary by the type and location of our customer and the products or services offered. The term between invoicing and when payment is due is not deemed to be significant by us. For certain sales channels and/or products, our standard terms of payment may be as early as 10 days.

In addition, we provide inventory to certain customers through pre-arranged agreements on a consignment basis. Customer consigned inventory is maintained and stored by certain customers; however, ownership and risk of loss remain with us.

All revenues recognized are net of trade allowances (i.e., rebates), cash discounts, and sales returns. Cash discounts and sales returns are estimated using historical experience. Trade allowances are based on the estimated obligations and historical experience. Adjustments to earnings resulting from revisions to estimates on discounts and returns have been insignificant for

each of the reported periods. Certain customers may receive cash-based incentives or credits, which are accounted for as

variable consideration. We estimate these amounts based on the expected amount to be provided to customers and reduce revenues recognized. We believe that there will not be significant changes to our estimates of variable consideration.

The following table presents our revenues disaggregated by revenue source. Certain prior year amounts have been reclassified to conform to the current year product mix of structural and specialty products. Sales and usage-based taxes are excluded from revenues.


	Three Months Ended
	April 3, 2021		March 28, 2020
	(In thousands)
Structural products	$	462,409	$	240,722
Specialty products	563,060		421,348
Total net sales	$	1,025,469	$	662,070

Three Months Ended
March 28, 2020 March 30, 2019
(In thousands)
Structural products $ 240,778
$ 196,786
Specialty products 421,292
441,915
Total net sales $ 662,070
$ 638,701

~~Also, due to the integration of Cedar Creek, our reload sales are less distinct from warehouse sales as they have been traditionally classified.~~ The following table presents our revenues disaggregated by sales channel. ~~Certain prior year amounts~~Warehouse sales are delivered from our warehouses. Reload sales are similar to warehouse sales but are shipped from third-party warehouses where we store owned products to enhance our operating efficiencies. This channel is employed primarily to service strategic customers that would be less economical to service from our warehouses, and to distribute large volumes of imported products from port facilities. Direct sales are shipped from the manufacturer to the customer without our taking physical possession of the inventory and, as a result, typically generate lower margins than our warehouse and reload distribution channels. This distribution channel requires the lowest amount of committed capital and fixed costs. Following the acquisition and integration of Cedar Creek, our reload sales were less distinct from warehouse sales, as they have been ~~reclassified to conform to the current year revenues disaggregated by sales channel.~~classified in prior periods. Sales and usage-based taxes are excluded from revenues.


	Three Months Ended
	April 3, 2021		March 28, 2020
	(In thousands)
Warehouse and reload	$	849,419	$	545,892
Direct	191,130		125,582
Customer discounts and rebates	(15,080)		(9,404)
Total net sales	$	1,025,469	$	662,070

~~Practical Expedients and Exemptions~~

~~We generally expense sales commissions when incurred because the amortization period would have been one year or less. These costs are recorded within selling, general, and administrative expense.~~

~~We have made an accounting policy election to treat outbound shipping and handling activities as an expense.~~

~~Three of our~~During the quarter ended April 3, 2021, we sold the non-operating ~~properties were designated as held for sale as of March 28, 2020. These properties consisted of three former distribution facilities~~facility located in Birmingham, Alabama, previously identified as “held for sale.” We recognized a gain of $1.3 million in the ~~Midwest and Southeast. We vacated these properties and designated them~~Condensed Consolidated Statement of Operations as ~~held for sale during fiscal 2019 due to their proximity to other locations after the Cedar Creek acquisition.~~ a result of this sale.

As of ~~March 28, 2020,~~April 3, 2021, and ~~December 28, 2019,~~January 2, 2021, the net book value of total assets held for sale was ~~$1.1~~$0.9 million and $1.3 million, respectively, and was included in “Other current assets” in our Condensed Consolidated Balance Sheets. Only 1 of our non-operating properties was designated as “held for sale” as of April 3, 2021. This property is a former distribution facility located in Houston, Texas. We vacated this property and designated it as held for sale during fiscal 2020. We continue to actively market ~~all properties that are designated as held for sale,~~this property, and we plan to sell ~~these properties~~this property within the next 12 months.

As of April 3, 2021, and January 2, 2021, long-term debt consisted of the following:


	April 3, 2021		January 2, 2021
	(In thousands)
Revolving Credit Facility (1)	$	358,514	$	288,247
Term Loan Facility (2)	0		43,204
Finance lease obligations (3)	281,274		273,118
	639,788		604,569
Unamortized debt issuance costs	(2,615)		(9,010)
	637,173		595,559
Less: current maturities of long-term debt	7,459		6,846
Long-term debt, net of current maturities	$	629,714	$	588,713

(1) The average effective interest rate was 2.4 percent and 2.8 percent for the quarters ended April 3, 2021 and January 2, 2021, respectively.

(2) The average interest rate, exclusive of fees and prepayment premiums, was 8.0 percent for the quarters ended April 3, 2021, and January 2, 2021.

(3) Refer to Note 8, Leases, for interest rates associated with finance lease obligations.

Revolving Credit Facility

We have a revolving credit facility that we entered into in April 2018 with Wells Fargo Bank, National Association, as administrative agent, and certain other financial institutions party thereto (the “Revolving Credit Facility”), with a maturity date of October 10, 2022. The Revolving Credit facility includes a committed senior secured asset-based revolving loan and letter of credit facility of up to $600 million, and an uncommitted accordion feature that permits us to increase the facility by an aggregate additional principal amount of up to $150 million. Our obligations under the Revolving Credit Facility are secured by a security interest in substantially all of our assets other than real property.

Loans under the Revolving Credit Facility bear interest at a rate per annum equal to (i) LIBOR plus a margin ranging from 1.75 percent to 2.25 percent, with the amount of such margin determined based upon the average of our excess availability for the immediately preceding fiscal quarter as calculated by the administrative agent, for loans based on LIBOR, or (ii) the administrative agent’s base rate plus a margin ranging from 0.75 percent to 1.25 percent, with the amount of such margin determined based upon the average of our excess availability for the immediately preceding fiscal quarter as calculated by the administrative agent, for loans based on the base rate.

~~We amended the~~As of April 3, 2021, we had outstanding borrowings of $358.5 million and excess availability of $238.1 million under our Revolving Credit ~~Facility on~~Facility. As of January ~~31, 2020, to provide that (i)~~2, 2021, we had outstanding borrowings of $288.2 million and excess availability of $184.3 million under our Revolving Credit Facility. Our average effective interest rate under the ~~“Seasonal Period” will run from November 15, 2019, through July 15, 2020,~~facility was 2.4 percent and 2.8 percent for the ~~calendar year 2019,~~quarters ended April 3, 2021 and ~~from December 15 of each calendar year through April 15 of each immediately succeeding calendar year for~~January 2, 2021, respectively. For the ~~calendar year~~quarter ended March 28, 2020, and thereafter, and (ii) the measurement period in the definition of “Cash Dominion Event” will be five consecutive business days instead of three consecutive business days. The adjustment to the Seasonal Period better aligns advance ratesour average effective interest rate under the Revolving Credit Facility ~~with the seasonality in our business and provides us with an enhanced borrowing base and greater liquidity through July 15, 2020.~~

As of March 28, 2020, we had outstanding borrowings of $381.6 million, excess availability of $96.8 million, and a weighted average interest rate of 3.2 percent. As of December 28, 2019, our principal balance was ~~$326.5 million, excess availability was $80.0 million, and our weighted average interest rate was 3.9~~4.2 percent.

The Revolving Credit Facility contains certain financial and other covenants, and our right to borrow under the Revolving Credit Facility is conditioned upon, among other things, our compliance with these covenants. We were in compliance with all covenants under the Revolving Credit Facility as of ~~March 28, 2020.~~April 3, 2021.

We ~~have~~previously had a term loan facility that we entered into in April 2018 with HPS Investments Partners, LLC, as administrative and collateral agent, and certain other financial institutions party thereto (the “Term Loan Facility”), with a maturity date of October 13, 2023. The Term Loan Facility ~~provides~~provided for a senior secured first lien loan facility in an initial aggregate principal amount of $180 million and iswas secured by a security interest in substantially all of our assets.

As of January 2, 2021, we had outstanding borrowings of $43.2 million under the Term Loan ~~Facility requires monthly interest payments, and also requires quarterly principal payments of $450,000, in arrears, with~~Facility. On April 2, 2021, we repaid the remaining ~~balance due on the maturity date. The Term Loan Facility also requires certain mandatory prepayments of~~ outstanding loans, subject to certain exceptions. The Term Loan Facility required maintenance of a total net leverage ratio of 6.25 to 1.00 for the quarter ending March 28, 2020, and requires a ratio of 8.75 to 1.00 for the second and third quarters of 2020, and ratio levels generally reduce over the remaining termprincipal balance of the Term Loan ~~Facility. We were in compliance with all covenants~~Facility, and, as a result, as of April 3, 2021, we had 0 outstanding borrowings under the Term Loan Facility, which has been extinguished. In connection with our repayment of the outstanding principal balance in full on April 2, 2021, we expensed $5.8 million of debt issuance costs that we had been amortizing in connection with our former Term Loan Facility. These costs are included within interest expense, net, on the

Condensed Consolidated Statements of Operations and reported separately as an adjustment to net income in our Condensed Consolidated Statements of Cash Flows.

Our average interest rate under the facility, exclusive of fees and prepayment premiums, was approximately 8.0 percent for the quarters ended April 3, 2021 and January 2, 2021. For the quarter ended March 28, ~~2020.~~

~~Borrowings~~2020, our average interest rate under the Term Loan Facility, ~~may be made as Base Rate Loans or Eurodollar Rate Loans. The Base Rate Loans will bear interest at the rate per annum equal~~exclusive of fees and prepayment premiums, was approximately 8.7 percent.

Finance Lease Obligations

Our finance lease liabilities consist of leases related to ~~(i) the greatest of the (a) U.S. prime lending rate published in The Wall Street Journal, (b) the Federal Funds Effective Rate plus 0.50 percent,~~equipment and (c) the sum of the Adjusted Eurodollar Rate of one month plus 1.00 percent, provided that the Base Rate shall at no time be less than 2.00 percent per annum; plus (ii) the Applicable Margin, as described below. Eurodollar Rate Loans will bear interest at the rate per annum equal to (i) the ICE Benchmark Administration LIBOR Rate, provided that the Adjusted Eurodollar Rate shall at no time be less than 1.00 percent per annum; plus (ii) the Applicable Margin. The Applicable Margin will be 6.00 percent with respect to Base Rate Loansvehicles, and ~~7.00 percent with respect to Eurodollar Rate Loans.~~

We amended the Term Loan Facility on December 31, 2019, to extend the period for satisfying the designated principal balance level required to maintain the modified total net leverage ratio covenant levels for the 2019 fourth and subsequent quarters thereunder, which was satisfied on January 31, 2020, through repayments from proceeds from the real estate, ~~financing transactions described in Note 8. On February 28, 2020, we further amended~~with the ~~Term Loan Facility~~majority of those finance leases related to ~~provide that we would not be subject~~real estate. For more information on our finance lease obligations, refer to the facility’s total net leverage ratio covenant from and after the time, and then for so long as, the principal balance level under the facility is less than $45 million. On April 1, 2020, we amended the Term Loan Facility to, among other things, modify the total net leverage ratio covenant levels for the 2020 second and third quarters. All other total net leverage ratio covenant levels for prior and future quarters were unchanged.

As of March 28, 2020, we had outstanding borrowings of $77.4 million under the Term Loan Facility and an interest rate of 8.6 percent per annum. As of December 28, 2019, our principal balance was $146.7 million with an interest rate of 8.7 percent per annum. The decrease in the outstanding borrowings was due to net proceeds of the real estate financing transactions described in Note 8, ~~being applied to the Term Loan Facility.~~Leases.

6. Net Periodic Pension ~~(Benefit) Cost~~Benefit

The following table shows the components of our net periodic pension ~~(benefit) cost:~~benefit:


	Three Months Ended
	April 3, 2021		March 28, 2020
	(In thousands)
Service cost (1)	$	0	$	0
Interest cost on projected benefit obligation	505		723
Expected return on plan assets	(1,140)		(1,210)
Amortization of unrecognized gain	321		263
Net periodic pension benefit	$	(314)	$	(224)

Three Months Ended
March 28, 2020 March 30, 2019
(in thousands)
Service cost $ —
$ 113
Interest cost on projected benefit obligation 723
1,045
Expected return on plan assets (1,210 ) (1,194 )
Amortization of unrecognized loss 263
300
Net periodic pension (benefit) cost $ (224 ) $ 264

7. Stock Compensation

~~Stock Compensation Expense~~

During the three months ended April 3, 2021, and March 28, 2020, ~~and March 30, 2019,~~ we incurred stock compensation expense of ~~$1.0~~$1.4 million and ~~$0.7~~$1.0 million, respectively. The increase in our stock compensation expense for the three-month period is attributable to having more outstanding equity-based ~~grants~~awards during ~~the~~this period than in the prior year.

We ~~determine if an arrangement is a lease at inception and assess lease classification as either operating or finance at lease inception or modification. Our~~have operating and finance ~~lease portfolio generally includes~~ leases for ~~real estate,~~ certain ~~logistics equipment,~~of our distribution facilities, office space, land, mobile fleet, and ~~vehicles.~~equipment. Many of our leases are non-cancelable and typically have a defined initial lease term, and some provide options to renew at our election for specified periods of time. The majority of our leases have remaining lease terms of 1 year to 15 years, some of which include ~~one~~1 or more options to extend the leases for 5 years. Operating lease right-of use (“ROU”) assets and liabilities are presented separately on the condensed consolidated balance sheets. Finance lease ROU assets are included in property and equipment and the finance lease obligations are presented separately in the condensed consolidated balance sheet. We have also made the accounting policy election to not separate lease components from non-lease components related toOur leases generally provide for fixed annual rentals. Certain of our ~~mobile fleet asset class.~~

~~When a lease does not provide an implicit interest rate, we use our incremental borrowing rate~~leases include provisions for escalating rent based on, ~~the information available at the commencement date in determining the present value of future payments.~~

~~A portion of our real estate lease cost is generally subject to annual~~among other things, contractually defined increases and/or changes in the Consumer Price Index (“CPI”). The known changes to lease payments are included in the lease liability at lease commencement. Unknown changes related to CPI are treated as variable lease payments and recognized in the period in which the obligation for those payments was incurred. In addition, a subset of our vehicle lease cost is considered variable. Some of our leases require us to pay taxes, insurance, and maintenance expenses associated with the leased assets. Our lease agreements do not contain any material residual value guarantees or material restrictive covenants.

~~The~~We determine if an arrangement is a lease at inception and assess lease classification as either operating or finance at lease inception or modification. Operating lease right-of use (“ROU”) assets and liabilities are presented separately on the condensed consolidated balance sheets. Finance lease ROU assets are included in property and equipment and the finance lease obligations are presented separately in the condensed consolidated balance sheet. When a lease does not provide an implicit interest rate, we use our incremental borrowing rate based on the information available at the commencement date in determining the present value of future payments. We have also made the accounting policy election to not separate lease components ~~of lease expense were as follows:~~from non-lease components related to our mobile fleet asset class.

Three Months Ended March 28, 2020 Three Months Ended March 30, 2019

(In thousands)
Operating lease cost: $ 3,120
$ 3,144
Finance lease cost:
Amortization of right-of-use assets $ 3,042
$ 2,896
Interest on lease liabilities 4,425
3,248
Total finance lease costs $ 7,467
$ 6,144

Finance Lease Liabilities

~~Supplemental cash flow information~~Our finance lease liabilities consist of leases related to ~~leases was as follows:~~

Three Months Ended March 28, 2020 Three Months Ended March 30, 2019

(In thousands)
Cash paid for amounts included in the measurement of lease liabilities
   Operating cash flows from operating leases $ 2,774
$ 2,903
   Operating cash flows from finance leases 4,425
3,248
   Financing cash flows from finance leases 2,222
2,187
Right-of-use assets obtained in exchange for lease obligations
   Operating leases $ —
$ —
   Finance leases —
787

~~Supplemental balance sheet information related to leases was as follows:~~

March 28, 2020 December 28, 2019
(In thousands)
Finance leases
   Property and equipment $ 155,927
$ 156,770
   Accumulated depreciation (26,032 ) (23,364 )
Property and equipment, net $ 129,895
$ 133,406
Weighted Average Remaining Lease Term (in years)
   Operating leases 11.67
11.71
   Finance leases 17.86
17.90
Weighted Average Discount Rate
   Operating leases 9.37 % 9.34 %
   Finance leases 10.48 % 10.33 %

~~The major categories~~equipment and vehicles, and real estate. As noted in the table below, a majority of our finance ~~lease liabilities~~leases, formally known as ~~of March 28, 2020 are as follows:~~capital leases, relate to real estate.

March 28, 2020 December 28, 2019
(In thousands)
Equipment and vehicles $ 30,808
$ 32,471
Real estate 120,543
120,525
Total finance leases $ 151,351
$ 152,996

During 2017 and 2018, we entered into real estate financing transactions on warehouse facilities in Tampa, FL; Ft. Worth, TX; Bellingham, PA; Frederick, MD; Lawrenceville, GA; and Raleigh, NC. These transactions were completed pursuant to sale-leaseback arrangements, and upon their completion, we entered into long-term leases on the properties for initial terms of 15 years with multiple 5-year renewal options, with one having a single 10-year renewal option. We accounted for these transactions in accordance with the FASB’s Accounting Standards Codification (“ASC”) Topic 840, which was the lease accounting standard in effect at the inception of these arrangements. We have recorded these transactions as finance lease liabilities on our balance sheet. As of ~~March 28, 2020, maturities of lease liabilities~~April 3, 2021, and January 2, 2021, total unrecognized deferred gains related to these transactions were ~~as follows:~~$81.1 million and $82.0 million, respectively.

Operating leases Finance leases
(In thousands)
2020 $ 11,479
$ 15,927
2021 9,234
19,178
2022 7,922
18,350
2023 7,073
17,887
2024 6,753
17,324
Thereafter 48,887
284,409
Total lease payments $ 91,348
$ 373,075
Less: imputed interest (38,761 ) (221,724 )
Total $ 52,587
$ 151,351

During 2019, we entered into real estate financing transactions on 2 warehouse facilities. On May 19, 2019, we completed a real estate financing transaction on a warehouse facility in University Park, IL for net proceeds of $21.8 million. On June 20, 2019, we completed a real estate financing transaction on a warehouse facility in Yulee, FL for net proceeds of $13.3 million. These 2 transactions were completed pursuant to sale-leaseback arrangements, and upon their completion, we entered into long-term leases on the properties for initial terms of 15 years with multiple 5-year renewal options. Gross proceeds of these transactions were $45.0 million.

~~On December 28, 2019, our total operating lease commitments were as follows:~~

(In thousands)
2020 $ 12,735
2021 10,092
2022 8,247
2023 7,899
2024 7,287
Thereafter 56,081
Total $ 102,341

~~Real Estate Transactions~~

During fiscal 2020, we completed several real estate financing transactions. On December 31, 2019, we completed 4 real estate financing transactions on warehouse facilities in Madison, TN; Kansas City, MO; Richmond, VA; and Bridgeton, MO for aggregate net proceeds of $27.2 million. On January 31, 2020, we completed 9 real estate financing transactions on warehouse facilities in Charlotte, NC; Memphis, TN; Independence, ~~KY:~~KY; San Antonio, TX; Portland, ME; Denville, NJ; Yaphank, NY; Pensacola, FL; and Tallmadge, OH for aggregate net proceeds of $34.1 million. On February 28, 2020, we completed 1a real estate financing transaction on a warehouse facility in Elkhart, IN for net proceeds of $7.5 million. These ~~fourteen real estate financing~~ transactions were completed pursuant to sale-leaseback arrangements, and upon their completion, we entered into long-term leases on the properties for initial terms from ~~fifteen~~15 years to ~~eighteen~~18 years with multiple ~~five-year~~5-year renewal options. Gross proceeds of these transactions were $78.3 million.

We determined that ~~these~~the transactions in fiscal 2019 and 2020 did not qualify as sales in accordance with ~~the FASB’s Accounting Standards Codification (“ASC”) Topic 842 and,~~ASC 842. Therefore, for accounting purposes, the transactions were not accounted for as sale-leaseback ~~transactions. When this occurs,~~transactions, and no gain or loss was recorded. We determined that these leases qualified for finance lease treatment and recorded them accordingly. The net book value of the real estate transaction is accounted for as a financing transaction, whereby the gross proceeds are recorded as a financing obligation in our consolidated balance sheets in other current liabilities and in noncurrent liabilities as real estate financing obligations. The assets related to these transactions ~~remain~~remains on our books as property and equipment and we continue to depreciate ~~them. Gross proceeds~~the assets over their remaining useful lives.

During the first quarter of ~~these transactions were $78.3 million.~~

~~On March 28, 2020, our future minimum payments~~2021, we recorded finance leases of $10.2 million related to ~~the financing obligations under~~new tractors put into service as part of our ~~real estate financing transactions~~mobile fleet. These leases were entered into ~~during 2019~~for a period of four years each.

The following table presents our assets and ~~2020~~liabilities related to our leases as of April 3, 2021 and January 2, 2021:


		April 3, 2021		January 2, 2021
		(In thousands)
Assets	Classification
Operating lease right-of-use assets	Operating lease right-of-use assets	$	48,969	$	51,142
Finance lease right-of-use assets (1)	Property and equipment, net	156,382		148,561
Total lease right-of-use assets		$	205,351	$	199,703

Liabilities
Current portion
Operating lease liabilities	Operating lease liabilities - short term	$	5,123	$	6,076
Finance lease liabilities	Finance lease liabilities - short term	7,459		5,675
Non-current portion
Operating lease liabilities	Operating lease liabilities - long term	44,021		44,965
Finance lease liabilities	Finance lease liabilities - long term	273,815		267,443
Total lease liabilities		$	330,418	$	324,159

(1) Finance lease right-of-use assets are presented net of accumulated amortization of $62.5 million and $58.6 million as of April 3, 2021 and January 2, 2021, respectively.

The components of lease expense were as follows:


	Three Months Ended
	April 3, 2021		March 28, 2020
	(In thousands)
Operating lease cost:	$	3,050	$	3,120
Finance lease cost:
Amortization of right-of-use assets	$	3,986	$	3,351
Interest on lease liabilities	6,157		6,146
Total finance lease costs	$	10,143	$	9,497

(In thousands)
2020 $ 7,305
2021 9,922
2022 10,130
2023 10,343
2024 10,559
Thereafter 124,454
Supplemental cash flow information related to leases was as follows:


	Three Months Ended
	April 3, 2021		March 28, 2020
	(In thousands)
Cash paid for amounts included in the measurement of lease liabilities
Operating cash flows from operating leases	$	2,564	$	2,774
Operating cash flows from finance leases	6,157		6,146
Financing cash flows from finance leases	$	2,129	$	2,562
Right-of-use assets obtained in exchange for lease obligations
Operating leases	$	0	$	0
Finance leases	$	10,211	$	0

Supplemental balance sheet information related to leases was as follows:


	April 3, 2021			January 2, 2021
	(In thousands)
Finance leases
Property and equipment	$	218,926		$	207,147
Accumulated depreciation	(62,544)			(58,586)
Property and equipment, net	$	156,382		$	148,561
Weighted Average Remaining Lease Term (in years)
Operating leases	11.09			11.14
Finance leases	16.34			16.08
Weighted Average Discount Rate
Operating leases	9.32		%	9.28		%
Finance leases	9.82		%	9.87		%

The major categories of our finance lease liabilities as of April 3, 2021 and January 2, 2021 are as follows:


	April 3, 2021		January 2, 2021
	(In thousands)
Equipment and vehicles	$	37,576	$	29,434
Real estate	243,698		243,684
Total finance leases	$	281,274	$	273,118

As of April 3, 2021, maturities of lease liabilities were as follows:


	Operating leases		Finance leases
	(In thousands)
2021	$	10,478	$	24,796
2022	8,686		32,401
2023	8,380		32,096
2024	7,610		31,481
2025	7,656		27,716
Thereafter	43,193		380,773
Total lease payments	$	86,003	$	529,263
Less: imputed interest	(36,859)		(247,989)
Total	$	49,144	$	281,274

On January 2, 2021, maturities of lease liabilities were as follows:


	Operating leases		Finance leases
	(In thousands)
2021	$	11,215	$	30,159
2022	9,161		29,453
2023	8,400		29,189
2024	7,283		28,649
2025	7,392		28,102
Thereafter	44,092		380,511
Total lease payments	$	87,543	$	526,063
Less: imputed interest	(36,502)		(252,945)
Total	$	51,041	$	273,118

9. Commitments and Contingencies

Environmental and Legal Matters

From time to time, we are involved in various proceedings incidental to our businesses, and we are subject to a variety of environmental and pollution control laws and regulations in all jurisdictions in which we operate. Although the ultimate outcome of these proceedings cannot be determined with certainty, based on presently available information management believes that adequate reserves have been established for probable losses with respect ~~thereto.~~thereto and receivables recorded for expected receipts from settlements. Management further believes that, while the ultimate outcome of one or more of these matters could be material to our operating results in any given quarter, it will not have a materially adverse effect on our consolidated financial condition, our results of operations, or our cash flows.

Collective Bargaining Agreements

As of ~~March 28, 2020,~~April 3, 2021, we ~~had over 2,200~~employed approximately 2,100 employees and less than 1 percent of our employees are employed on a ~~full-time basis, and approximately 20~~part-time basis. Approximately 23 percent of our employees were represented by various local labor union Collective Bargaining Agreements (“CBAs”). ~~Approximately 1~~NaN CBAs covering approximately 5 percent of our employees ~~are covered by three CBAs that~~ are up for renewal in fiscal ~~2020. As of March 28, 2020, one of these CBAs was renewed and~~2021, with 1 having been successfully renegotiated earlier this year. We expect to renegotiate the remaining ~~two are expected to be renegotiated later this~~CBAs by the end of the year.

10. Accumulated Other Comprehensive Loss

Comprehensive ~~loss~~income (loss) includes both net ~~loss~~income (loss) and other comprehensive income (loss). Other comprehensive income (loss) results from items deferred from recognition into our Condensed Consolidated Statements of Operations and Comprehensive ~~Loss.~~Income (Loss). Accumulated other comprehensive loss is separately presented on our Condensed Consolidated Balance Sheets as part of stockholders’ ~~deficit.~~equity.

The changes in balances for each component of accumulated other comprehensive loss for the three months ended ~~March 28, 2020,~~April 3, 2021, were as follows:

Foreign currency, net
of tax

Defined
benefit pension
plan, net of tax

Other,
net of tax
Total Accumulated Other Comprehensive Loss
(In thousands)
December 28, 2019, beginning balance $ 666
$ (35,441 ) $ 212
$ (34,563 )
Other comprehensive income, net of tax ^[1]
3
196
(19 ) 180
March 28, 2020, ending balance, net of tax $ 669
$ (35,245 ) $ 193
$ (34,383 )


	Foreign currency, net of tax		Defined benefit pension plan, net of tax		Other, net of tax		Total Accumulated Other Comprehensive Loss
	(In thousands)
January 2, 2021, beginning balance, net of tax	$	660	$	(36,855)	$	203	$	(35,992)
Other comprehensive income (loss), net of tax (1)	(6)		239		17		250
April 3, 2021, ending balance, net of tax	$	654	$	(36,616)	$	220	$	(35,742)

(1) For the three months ended ~~March 28, 2020~~,April 3, 2021, the actuarial ~~loss~~gain recognized in the Condensed Consolidated Statements of Operations and Comprehensive ~~Loss~~Income (Loss) as a component of net periodic pension ~~cost~~benefit was $0.3 million, net of tax of $0.1 million. Please see Note 6, Net Periodic Pension ~~Cost,~~Benefit, for further information.

The Coronavirus Aid, Relief, and Economic Security (CARES) Act was enacted on March 27, 2020, and contained several measures meant to counteract the economic effects of the COVID-19 pandemic. We are currently evaluating the provisions of the CARES Act and its impact. Effective Tax Rate

Our effective tax rate for the three months ended April 3, 2021, and March 28, 2020, was 26.0 percent and ~~March 30, 2019, was~~ 86.5 percent, respectively.

Our effective tax rate for the three months ended April 3, 2021 was impacted by the permanent addback of certain nondeductible expenses, including meals and ~~27.3 percent, respectively.~~ entertainment and executive compensation, slightly offset by the partial release of the valuation allowance for state net operating loss carryforwards we anticipate being able to utilize based on our taxable income through the end of the first quarter of fiscal 2021, combined with a benefit from the vesting of restricted stock units, which occurred during the period.

Our effective tax rate for the three months ended March 28, 2020 was primarily impacted by ~~(i) the~~a discrete tax benefit of $3.9 million resulting from the release of the valuation allowance associated with ~~the~~ nondeductible interest expense under Section 163(j) of the Internal Revenue Code (“IRC”) as a result of changes allowed under the ~~CARES~~Coronavirus Aid, Relief, and Economic Security (“CARES”) Act ~~to increase~~that was enacted on March 27, 2020 which raised the allowable percentage of deductible interest from 30 percent ~~of adjusted taxable income~~ to 50 percent of adjusted taxable income, (ii) the permanent addback of certain nondeductible expenses, including meals and entertainment, and (iii) the effect of the partial valuation allowance for separate company state income tax losses.income. Our effective tax rate for the three months ended March ~~30, 2019,~~28, 2020, was further impacted by the permanent addback of certain nondeductible expenses, including meals and entertainment and executive compensation, and the effect of the partial valuation allowance for separate company state income tax losses.

~~Our financial statements contain certain~~Deferred Tax Assets

Quarterly, we assess the carrying value of our deferred tax assets which primarily resulted from tax benefits associated with the loss before income taxes in prior years, as well as net deferred income tax assets resulting from other temporary differences related to certain reserves, pension obligations, and differences between book and tax depreciation and amortization. We

~~record a valuation allowance against our net deferred tax assets when we determine that, based on~~for impairment by evaluating the weight of available evidence it is more likely than not that our net deferred tax assets will not be realized. The ultimate realization of deferred tax assets is dependent upon the generation of future taxable income during the periods in which those temporary differences can be carried forward under tax law. Currently, we have a valuation allowance that covers (i) our separate company state net operating loss carryforwards and (ii) disallowed interest calculated pursuant to the changes made by the Tax Cuts and Jobs Act of 2017, as adjusted by the CARES Act.

Atat the end of each ~~quarter, we evaluate~~fiscal quarter. In our evaluation of the weight of available evidence ~~(both positive and negative). We~~at the end of the current quarter, we considered the recent reported ~~loss generated~~income in the current quarter, as well as the reported income for 2020 and ~~prior years (adjusted~~the reported losses for ~~unusual one-time items)~~2019 and 2018, which resulted in a three-year cumulative income ~~generated in 2017, including~~situation as positive evidence which carried substantial weight. While this was substantial, it was not the ~~prior year income from Cedar Creek.~~only evidence we evaluated. We also considered evidence related to the four sources of taxable income to determine whether such positive evidence outweighed the negative evidence. The evidence considered included:

•future reversals of existing taxable temporary differences;

•future taxable income exclusive of reversing temporary differences and carryforwards;

•taxable income in prior carryback years, if carryback is permitted under the tax law; and

•tax planning strategies.

~~At the end of the first fiscal quarters of 2020 and 2019, in our evaluation of the weight of available evidence, we concluded that the weight of the positive evidence outweighed the negative evidence.~~ In addition to the positive evidence discussed above, we considered as positive evidence forecasted ~~future~~ taxable income, the detail scheduling of ~~the~~ timing of the reversal of our deferred tax assets and liabilities, and the evidence from business and tax planning ~~strategies described below. Although we believe~~strategies. As of April 3, 2021, in our ~~estimates are reasonable, the ultimate determination~~evaluation of the ~~appropriate amount~~weight of ~~valuation allowance involves significant judgments. We believe~~available evidence, we concluded that ~~the change in control under IRC Section 382, resulting from the completion of the secondary offering on October 23, 2017, will~~our deferred tax assets were not cause any of our federal net operating losses to expire unused because management has been effectively implementing a real estate strategy involving the sale and leaseback of real estate. This strategy is further supported by the transactions involving four warehouses in January 2018 and two warehouses during 2019. In the first quarter of 2020, the Company executed three more sale and leaseback transactions, involving a total of fourteen warehouse locations. Additionally, the acquisition of Cedar Creek did not generate any limitations under IRC Section 382 on Cedar Creek’s tax assets. We will continue to monitor any changes to our results of operations that may affect our estimates, including any impact of COVID-19 if applicable.impaired.

12. ~~Loss~~Income (Loss) per Share

We calculate basic ~~loss~~income (loss) per share by dividing net ~~loss~~income (loss) by the weighted average number of common shares outstanding. We calculate diluted ~~earnings~~income (loss) per share using the treasury stock method, by dividing net income (loss) by the weighted average number of common shares outstanding plus the dilutive effect of outstanding share-based awards, including restricted stock ~~units, and performance~~ units. Due to the financial results for the three-month period ended March 28, 2020, 0.1 million of incremental shares were excluded from the computation of diluted weighted averages outstanding, because their effect would be anti-dilutive.

The reconciliation of basic ~~loss~~net income (loss) and diluted ~~loss~~net income (loss) per common share for the three-month periods ended April 3, 2021, and March 28, 2020, ~~and March 30, 2019,~~ were as follows:


	Three Months Ended
	April 3, 2021		March 28, 2020
	(In thousands, except per share data)

Net income (loss)	$	61,860	$	(787)

Weighted-average shares outstanding - basic	9,466		9,366
Dilutive effect of share-based awards	392		0
Weighted-average shares outstanding - diluted	9,858		9,366

Basic income (loss) per share	$	6.53	$	(0.08)
Diluted income (loss) per share	$	6.28	$	(0.08)

Three Months Ended
(in thousands, except per share data) March 28, 2020 March 30, 2019
Net loss $ (787 ) $ (6,719 )

Weighted-average shares outstanding - basic 9,366
9,337
Dilutive effect of share-based awards —
—
Weighted-average shares outstanding - diluted 9,366
9,337

Basic loss per share $ (0.08 ) $ (0.72 )
Diluted loss per share $ (0.08 ) $ (0.72 )

~~13. Subsequent Events~~

~~Sixth Amendment to the Term Loan Facility~~

On April 1, 2020, we entered into the Sixth Amendment to our Term Loan Agreement which, among other things, modified the total net leverage ratio covenant levels for the second and third quarters of 2020. Refer to Note 5 for further details.

ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Overview

~~We are~~BlueLinx is a leading U.S. wholesale distributor of residential and commercial building products with both branded and ~~industrial products in the U.S with~~private-label stock keeping units (“SKUs”). With a ~~combination of~~strong market position, ~~and~~broad geographic coverage ~~the buying power of certain centralized procurement,~~footprint servicing 40 states, and the strength of a ~~locally-focused~~locally focused sales force, we distribute our comprehensive range of products to over 15,000 national, regional, and local dealers, specialty distributors, national home centers, and manufactured housing customers. BlueLinx is able to provide a wide range of ~~value-added~~value added services and solutions to our customers and suppliers. We are headquartered in Georgia, with executive offices located at 1950 Spectrum Circle, Marietta, Georgia, and we operate our distribution business through a broad network of distribution centers. ~~We serve many major metropolitan areas in the U.S.~~

As a “two-step” wholesale distributor of building products, BlueLinx stocks products from leading manufacturers and ~~deliver building and industrial~~supplies these products to a ~~variety~~broad range of ~~wholesale~~customers, including lumber yards, dealers, home centers, and ~~retail customers.~~ hardware stores. These customers then serve residential and commercial builders and contractors in their respective geographic areas. BlueLinx plays a critical role in enabling its lumber yard, dealer, and home center customers to offer a broad range of products and brands, as most of BlueLinx’s customers do not have the capability to purchase and warehouse directly from the manufacturers for such a large set of SKUs. Similarly, BlueLinx provides value to its manufacturing partners by enabling access to the fragmented network of lumber yards and dealers that the manufacturers could not adequately serve directly. Our place in this distribution model of building products provides easy access to the marketplace for our suppliers and the value proposition of rapid delivery on an as-needed basis to our customers from our network of warehouse facilities. In addition to its broad portfolio of building products, BlueLinx also offers a wide array of custom cutting and fabrication services for the wood products industry.

We distribute products in two principal categories: ~~structural~~specialty products and ~~specialty~~structural products. Specialty products include primarily engineered wood products, moulding, siding and trim, cedar, metal products (excluding rebar and remesh), and insulation. Specialty products represented between 54 percent and 65 percent of our net sales over the past twelve months. Structural products include primarily plywood, oriented strand board, rebar and remesh, lumber, spruce and other wood products primarily used for structural support in construction projects. Structural products represented between ~~31%~~35 percent and 37% of our net sales over the past twelve months. Specialty products include primarily engineered wood products, moulding, siding and trim, cedar, metal products (excluding rebar and remesh), and insulation. Specialty products represented between 63% and 69%46 percent of our net sales over the past twelve months.

On April 13, 2018, we completed the acquisition of Cedar ~~Creek.~~Creek Holdings, Inc. (“Cedar Creek”). Cedar Creek was established in 1977 as a wholesale building materials distribution company that distributed wood products across the United States. Its products included specialty lumber, oriented strand board, siding, cedar, spruce, engineered wood products, and other building products. This acquisition allowed us to expand our product offerings, while maintaining our existing geographical footprint.

Recent Developments - Update on Impact of COVID-19 Pandemic

AOn March 11, 2020, a novel strain of coronavirus ~~(COVID-19) was first identified in December 2019 in certain Far East and European countries. On March 11, 2020, the spread of COVID-19~~(“COVID-19”) was declared a global pandemic by the World Health ~~Organization, with a high concentration of cases in the United States.~~Organization. In response to the pandemic, governmental authorities around the world implemented numerous measures to combat the virus, such as travel bans and restrictions, quarantines, “shelter-in-place” orders, and business shutdowns. These measures have been successful to various degrees in containing and reducing the spread of the COVID-19 virus in many locations, and many governmental authorities have eased restrictions and executed plans to re-open businesses. To date, our business has been designated as “essential” in all states in which we operate, and we have continued to operate and provide services to our customers and suppliers.

As vaccination availability becomes more widespread in the U.S. and other major countries across the world and the percentage of vaccinated individuals grows rapidly, the impact of the pandemic may subside to some degree. However, the rates of infection, hospitalization, and mortality associated with the virus continue to fluctuate. The pandemic and these containment measures have had, and are expected to continue to have, a substantial negative impact on businesses around the world and on global, regional, and national economies.

~~We began preparations for~~ During the ~~pandemic in late February, and in early March~~recently completed quarter, we ~~implemented policies and procedures~~continued to protect our associates, serve our customers, and support our suppliers. We also moved quickly to develop plans and take actions designed to give us financial and operating flexibility during the pandemic. To date, our business has been designated as “essential” in all states in which we operate, and we are continuing to operate and provide service to customers and suppliers. Also, notably, we have not experienced any significant supply chain disruptions as a result of the pandemic, and our supply chain has remained intact in all material respects.

~~We formed a cross-functional COVID-19 Disaster Response Team and implemented~~practice safety and hygiene protocols consistent with the Centers for Disease Control and Prevention (“CDC”) and local guidance. ~~Those protocols have evolved in accordance with CDC and local guidance, and they include mandating~~

While the use of face coverings where their use is required by local order; implementing enhanced cleaning and disinfecting procedures; using social distancing guidelines and physical separation where required; establishing no-travel mandates; implementing no-contact rules and visitor guidelines; implementing enhanced safety procedures for our drivers such as including contactless delivery procedures; using mobile work arrangements for employees whose work can be done remotely; and developing rapid response procedures for presumptive and confirmed COVID-19 cases at anypandemic continued to impact many aspects of our ~~locations.~~

~~We also developed plans designed to reduce~~business and operations during the quarter, that impact was offset by the continued inflation in our ~~cost structure, strengthen our balance sheet,~~product pricing. Our net sales and ~~further increase liquidity in response to~~gross margin increased, largely driven by the pandemic. Steps taken to reduce operating costs include pausing new hiring; limiting non-essential spending; closely monitoring and reviewing credit lines, open orders, overpaid accounts, and receivables aging; making substantial variable operating expense reductions correlating to local market demand declines; placing approximately 15%continued elevation of our salaried workforce on an initial 60-day furlough; voluntary reductions of executive officer and vice president base salaries for at least six months; closely assessing and monitoring inventory availability and purchasing; and ongoing review and monitoring of payroll and branch expenses.

~~On March 27, 2020,~~wood-based commodity pricing over the Coronavirus Aid, Relief, and Economic Security (CARES) Act was enacted to offer relief to employers through, among other things, deferment of employer-side social security payments, deferral of quarterly pension contributions, net operating loss carryback periods, alternative minimum tax credit refunds, and modifications to the net interest deduction

~~limitation. We have elected to utilize certain~~course of the ~~provisions offered~~quarter and ~~continue to examine~~secondarily driven by the ~~impacts the CARES Act may have on our business.~~

Company’s policies of pursuing disciplined pricing strategies and gross margin enhancement. For the first ~~fiscal~~ quarter of ~~2020, the COVID-19 pandemic did not have a significant impact on our business. Net~~2021, net sales increased ~~3.7%~~$363.4 million and ~~our~~ net ~~loss~~income improved ~~88%~~$62.6 million, compared to the first quarter of ~~2019. However, beginning at the end~~2020.

The extent of the ~~first fiscal quarter~~impact of 2020, we began to see market demand decline in several of our warehouse locations. We believe that social distancing requirements, shelter-in-place orders, and restrictions on non-essential construction in states like New York, Pennsylvania, Vermont, and Michigan, stemming from the COVID-19 pandemic are likely to have a negative impact; even in these states, however, our distribution business was not fully impacted, and we have continued to operate everywhere, albeit with social distancing and hygiene protocols. Overall, we currently expect the pandemic ~~to negatively impact~~on our business and sales ~~in 2020. The extent~~for the remaining nine months of ~~this decline~~2021 will depend on future developments, including, among others, the duration of the pandemic, ~~new information that may emerge concerning~~ the ~~severity~~success of ~~COVID-19, the~~ actions ~~especially those~~ taken by governmental authorities to contain the pandemic orand address its impact, the success of local return to work and business reopening plans, the success of vaccination efforts, and the impact the COVID-19 pandemic has on demand in the markets we service. The trajectory of the pandemic continues to evolve rapidly, and we cannot predict the extent to which our financial condition, results of operations, or cash flows will ultimately be impacted. We are closely monitoring the impact of the pandemic on ~~these~~ industry conditions, the progress of local return to office and ~~we anticipate that as states begin to ease~~reopening plans, and any pandemic-related ~~restrictions, any negative impact should begin to stabilize.~~restrictions.

Industry Conditions

Many of the factors that cause our operations to fluctuate have ~~historically~~ been seasonal or cyclical in nature and we expect that to continue.

Our operating results are affected by commodity markets, primarily in the markets for wood-based commodities that we classify as structural products. Due to supply constraints, lumber and panel commodity index prices started increasing during the third quarter of 2020 and they continued to increase throughout the first quarter of 2021. These market trends resulted in substantially favorable revenue and gross margin comparisons in the first quarter of 2021 for our structural products and our business as a whole. Wood-based commodity index prices remained at elevated levels at the beginning of the second quarter as supply constraints continued. Until supply constraints are relieved, we anticipate that lumber and panel index prices will remain elevated.

Historically, our operating results have ~~historically~~also been generally correlated with the level of single-family residential housing starts in the U.S. AtHowever, at any time, the demand for new homes is dependent on a variety of factors, including job growth, changes in population and demographics, the availability and cost of mortgage financing, the supply of new and existing homes, and consumer confidence.

~~Our operating results are also affected by commodity pricing, primarily~~ The COVID-19 pandemic has had a significant negative effect on single family housing starts during the ~~markets~~first half of 2020. However, housing starts have rebounded since the third quarter of 2020. The U.S. Census Bureau reported that single family housing starts were up 20 percent for ~~wood-based commodities. Lumber and panel prices generally trended upwards during~~ the first quarter of 2020, enhancing gross margins for structural products. Market pricing in the first quarter of 2020 was close to historical averages, but is above the prior year levels, which resulted in favorable revenue comparisons2021 compared to the first quarter of ~~2019.~~2020. During the first quarter of 2021, housing starts grew 16 percent in January, 2 percent in February, and 40 percent in March, all compared to the same months in 2020. Additionally, March 2021 data from the National Association of Home Builders/Wells Fargo Housing Market Index shows a positive outlook in builder confidence in the market for newly built single-family homes. Low interest rates, shortages in existing home inventory, and a potential growing trend toward relocating away from populated metropolitan areas to areas with single-family homes may help drive long-term improvement in single-family housing starts.

Factors That Affect Our Operating Results

Our results of operations and financial performance are influenced by a variety of factors, including the following: pricing and product cost variability; volumes of product sold; changes in the prices, supply, and/or demand for products that we distribute; the cyclical nature of the industry in which we operate; housing market conditions; the COVID-19 pandemic and other contagious illness outbreaks and their potential effects on our ~~industry,~~industry; effective inventory management relative to our sales volume or the prices of the products we produce; information technology security and business interruption risks; increases in petroleum prices; consolidation among competitors, suppliers, and ~~supply chains,~~customers; disintermediation risk; loss of products or key suppliers and ~~customers,~~manufacturers; our ~~business, results of operations, cash flows, financial condition,~~dependence on international suppliers and ~~future prospects; the integration of the Cedar Creek business with ours and the potential~~manufacturers for disruption in distribution relationships, operational performance and sales resulting therefrom; changes in the prices, supply and/or demand for products that we distribute; inventory management and commodities pricing; new housing starts; repair and remodeling activity; general economic and business conditions in the U.S.; disintermediation by our customers and suppliers; acceptance by our customers of our branded and privately brandedcertain products; financial condition and credit worthiness of our customers; supply from key vendors; reliability of the technologies we utilize; activities of competitors; changes in significant operating expenses; fuel costs; risk of losses associated with accidents; exposure to product liability and other claims and legal proceedings related to our business and the products we distribute; natural disasters, catastrophes, fire, or other ~~legal proceedings;~~unexpected events; successful implementation of our strategy; wage increases or work stoppages by our union employees; costs imposed by federal, state, local, and other regulations; compliance costs associated with federal, state, and local environmental protection laws; our level of indebtedness and our ability to incur additional debt to fund future needs; the risk that our cash flows and capital resources may be insufficient to service our existing or future indebtedness; the covenants of the instruments governing our indebtedness limiting the discretion of our management in operating our business; the fact that we lease many of our distribution centers, and we would still be obligated under these leases even if we close a leased distribution center; changes in our product mix; shareholder activism; potential acquisitions and the ~~availability~~integration and completion of ~~capital~~such acquisitions; the possibility that the value of our deferred tax assets could become impaired; changes in our expected annual effective tax rate could be volatile; the costs and ~~interest rates; adverse weather patterns or conditions; acts of cyber intrusion or other disruptions~~liabilities related to our ~~information technology systems; tariffs, anti-dumping~~participation in multi-employer pension plans could increase; the possibility that we could be the subject of securities class action litigation due to stock price volatility; and ~~counter-vailing duties, anti-dumping charges, and similar import costs and restrictions; and variations~~changes in, ~~the performance~~or interpretation of, ~~the financial markets, including the credit markets.~~

accounting principles.

Results of Operations

The following table sets forth our results of operations for the first quarter of fiscal ~~2020~~2021 and fiscal ~~2019:~~2020:


	First Quarter of Fiscal 2021		% of Net Sales	First Quarter of Fiscal 2020		% of Net Sales
	(In thousands)			(In thousands)
Net sales	$	1,025,469	100.0%	$	662,070	100.0%

Gross profit	180,392		17.6%	93,209		14.1%
Selling, general, and administrative	75,560		7.4%	74,588		11.3%
Depreciation and amortization	7,465		0.7%	7,635		1.2%
Amortization of deferred gains on real estate	(984)		(0.1)%	(984)		(0.1)%
Gains from sales of property	(1,287)		(0.1)%	(525)		(0.1)%
Other operating expenses	112		0.0%	4,165		0.6%
Operating income	99,526		9.7%	8,330		1.3%
Interest expense, net	16,234		1.6%	14,380		2.2%
Other income, net	(314)		(0.0)%	(237)		(0.0)%
Income (loss) before provision for income taxes	83,606		8.2%	(5,813)		(0.9)%
Provision for (benefit from) income taxes	21,746		2.1%	(5,026)		(0.8)%
Net income (loss)	$	61,860	6.0%	$	(787)	(0.1)%

(Dollars in thousands) First Quarter of Fiscal 2020 % of
Net
Sales First Quarter of Fiscal 2019 % of
Net
Sales
Net sales $ 662,070
100.0% $ 638,701
100.0%

Gross profit 93,209
14.1% 86,045
13.5%
Selling, general, and administrative 77,769
11.7% 74,410
11.7%
Gains from sales of property (525 ) (0.1)% —
—%
Depreciation and amortization 7,635
1.2% 7,328
1.1%
Operating income 8,330
1.3% 4,307
0.7%
Interest expense, net 14,380
2.2% 13,401
2.1%
Other (income) expense, net (237 ) (0.0)% 150
0.0%
Loss before benefit from income taxes (5,813 ) (0.9)% (9,244 ) (1.4)%
Benefit from income taxes (5,026 ) (0.8)% (2,525 ) (0.4)%
Net loss $ (787 ) (0.1)% $ (6,719 ) (1.1)%

The following table sets forth net sales by product category for the three-month periods ending April 3, 2021, and March 28, ~~2020, and March 30, 2019 (in thousands):~~2020:

Three Months Ended
March 28, 2020 March 30, 2019
Structural products $ 240,778
$ 196,786
Specialty products 421,292
441,915
Net sales $ 662,070
$ 638,701


	Three Months Ended
	April 3, 2021				March 28, 2020
Net sales by category	($ in thousands)
Structural products	$	462,409	45	%	$	240,722	36	%
Specialty products	563,060		55	%	421,348		64	%
Net sales	$	1,025,469	100	%	$	662,070	100	%

The following table sets forth gross profit and gross margin percentages by product category for the three-month periods of fiscal ~~2020~~2021 and ~~2019 (dollars in thousands):~~2020:


	Three Months Ended
	April 3, 2021			March 28, 2020
Gross profit $ by category	($ in thousands)
Structural products	$	71,857		$	24,214
Specialty products	108,535			68,995
Gross profit	$	180,392		$	93,209
Gross margin percentage by category
Structural products	15.5		%	10.1		%
Specialty products	19.3		%	16.4		%
Total gross margin %	17.6		%	14.1		%

Three Months Ended
March 28, 2020 March 30, 2019
Structural products $ 24,233
$ 18,733
Specialty products 68,976
67,312
Gross profit $ 93,209
$ 86,045
Gross margin percentage by category

Structural products 10.1 % 9.5 %
Specialty products 16.4 % 15.2 %
Total, including adjustments 14.1 % 13.5 %

First Quarter of Fiscal ~~2020~~2021 Compared to First Quarter of Fiscal ~~2019~~2020

Net sales. For the first quarter of fiscal ~~2020,~~2021, net sales increased ~~3.7~~54.9 percent, or ~~$23.4~~$363.4 million, compared to the first quarter of fiscal ~~2019.~~2020. The sales increase was ~~driven by higher sales volumes and~~primarily a result of wood-based commodity price inflation in our structural category and supply-driven pricing increases in our specialty category, partially offset by a slight decline in sales volume attributable to supply constraints. Persistent imbalances between supply and demand provided pricing momentum that drove pricing up throughout the ~~loss of $31.9 million of sales related~~last nine months past levels where we expected them to ~~a siding program that was discontinued in conjunction with our Cedar Creek integration activities in the prior year.~~begin to affect demand. Product scarcity has reduced resistance to price increases, further amplifying inflation across all product categories.

Gross profit and gross margin. For the first quarter of fiscal ~~2020,~~2021, gross profit increased ~~by $7.2~~93.5 percent, or $87.2 million, ~~or 8.3 percent,~~ compared to the first quarter of fiscal ~~2019, primarily due to increased sales revenue and improved gross margins on both our~~

~~specialty and structural products businesses.~~2020. Gross margin ~~during~~percentage increased to 17.6 percent, for the ~~same period was 14.1 percent, an increase~~first quarter of fiscal 2021, compared to ~~13.5~~14.1 percent in the first quarter of fiscal ~~2019.~~2020. Gross margin percentage increased due to rapidly increasing market pricing, a result of unprecedented demand, paired with abnormally low supply. Additionally, throughout this period lead times for products extended, further promoting higher margins as prices escalated prior to receiving the product.

Selling, general, and administrative expenses. ~~The increase in~~For the first quarter of fiscal 2021, selling, general, and administrative expenses ~~of 4.5~~increased 1.3 percent, or ~~$3.4~~$1.0 million, ~~for the first quarter of fiscal 2020,~~ compared to the first quarter of fiscal ~~2019,~~2020. The increase in sales, general, and administrative expenses is primarily due to ~~increases~~an increase in our ~~operational and logistics expenses~~sales commissions of approximately $2.7 million combined with an increase in ~~support~~our variable incentive compensation of approximately $0.9 million, offset by a reduction in our ~~strategy~~payroll costs of approximately $2.9 million, in addition to ~~enhance~~other reductions within our ~~service to our customer base and higher sales volumes.~~operating expenses.

Depreciation and amortization expense. For the first quarter of fiscal ~~2020,~~2021, depreciation and amortization expense ~~increased by $0.3~~decreased 2.2 percent, or $0.2 million, ~~to $7.6 million due to a higher base of depreciable assets.~~

~~Interest expense.~~ ~~Interest expense increased by $1.0 million for the first quarter of fiscal 2020,~~ compared to the first quarter of fiscal ~~2019.~~2020. The ~~increase was largely attributable~~decrease in depreciation and amortization expense is due to ~~an increase~~a lower base of depreciable assets throughout the first quarter of 2021 when compared to the first quarter of fiscal 2020.

Gains from sales of property. For the first quarter of fiscal 2021, gains from sales of property increased $0.8 million compared to the first quarter of 2020 as result of the sale of our non-operating facility in Birmingham during the first quarter of 2021 and no property sales during the first quarter of 2020.

Other operating expenses. For the first quarter of fiscal 2021, other operating expenses decreased $4.1 million compared to the first quarter of fiscal 2020 primarily due to a decrease in spending related to the integration of the Cedar Creek acquisition and lower real estate financing costs compared to those reported in the first quarter of 2020 that were associated with our prior year real estate financing transactions.

Interest expense, net. For the first quarter of fiscal 2021, interest expense, net, increased by 12.9 percent, or $1.9 million, compared to the first quarter of fiscal 2020. The increase is largely attributable to $5.8 million in debt issuance costs expensed in the first quarter of fiscal 2021 related to the extinguishment of our former Term Loan Facility, offset by a reduction in our interest expense resulting from our lower levels of indebtedness combined with favorable benefits from lower LIBOR rates when compared to the prior year.

Other income, net. For the first quarter of fiscal 2021, other income, net, increased $0.1 million compared to the first quarter of fiscal 2020. The increase is due to a higher level of pension benefit cost amortization in the first quarter of fiscal 2021 compared to the first quarter of fiscal 2020.

Provision for (benefit from) income taxes. Our effective tax rate was ~~86.5~~26.0 percent and ~~27.3~~86.5 percent for the first quarter of fiscal ~~2020~~2021 and ~~2019,~~2020, respectively. Our effective tax rate for the first quarter of fiscal 2020 was impacted by (i) the discrete tax benefit of $3.9 million resulting from the release of the valuation allowance associated with the nondeductible interest expense under IRC Section 163(j) as a result of the CARES act changing the allowable percentage from 30 percent of adjusted taxable income to 50 percent of adjusted taxable income, (ii) the permanent addback of certain nondeductible expenses, including meals and entertainment, and (iii) the effect of the partial valuation allowance for separate company state income tax losses. Our effective tax rate for the first quarter of fiscal 20192021 was impacted by the permanent addback of certain nondeductible expenses, including meals and entertainment and executive compensation, ~~and~~slightly offset by the ~~effect~~benefit from state net operating loss carryforwards we anticipate being able to utilize based on our taxable income through the end of the ~~partial~~first quarter of fiscal 2021, combined with a benefit from the vesting of restricted stock units, which occurred during the period. Our effective tax rate for the three months ended March 28, 2020, was primarily impacted by a discrete tax benefit of $3.9 million resulting from the release of the valuation allowance ~~for separate company state income tax losses.~~associated with nondeductible interest expense under Section 163(j) of the Internal Revenue Code (“IRC”) as a result of changes allowed under the Coronavirus Aid, Relief, and Economic Security (“CARES”) Act that was enacted on March 27, 2020 which raised the allowable percentage of deductible interest from 30 percent to 50 percent of adjusted taxable income.

Net ~~loss.~~income (loss). Our net loss improved ~~over~~to net income from the prior year period due primarily to ~~higher sales,~~ increased gross product margins resulting from price inflation and scarcity of products and overall reduced ~~costs associated with~~operating expenses and secondarily to the ~~acquisition~~Company’s policies pursuing increased margins on sales of ~~Cedar Creek.~~products.

Seasonality

We are exposed to fluctuations in quarterly sales volumes and expenses due to seasonal factors common in the building products distribution industry. The first and fourth fiscal quarters are typically our lower volume quarters, due to the impact of ~~poor~~less favorable weather on the construction market. Our second and third fiscal quarters are typically our higher volume quarters, reflecting an increase in construction, due to more favorable weather conditions. ~~Assuming~~In past years, assuming no change in underlying inventory costs, our working capital ~~generally increases~~has increased in the fiscal second and third quarters, reflecting ~~increased~~general increases in seasonal demand. During the fiscal second and third quarters of 2020, our inventory working capital balance decreased despite increasing commodity prices, reflecting enhancements in our working capital management throughout the year. However, during the fourth quarter of 2020 and the first quarter of 2021, our inventory working capital balance increased largely due to ~~the significant impacts of~~increased sales levels. Due to the COVID-19 pandemic, it remains a possibility that we ~~do not expect~~could experience changes to ~~experience~~ our typical seasonality trends ~~in 2020.~~during the rest of 2021.

Liquidity and Capital Resources

We expect our primary sources of liquidity to be cash flows from sales in the normal course of our operations and borrowings under our Revolving Credit Facility. We expect that these sources will fund our ongoing cash requirements for the foreseeable future. We believe that ~~assuming that our operations are not significantly impacted by the COVID-19 pandemic for a prolonged period,~~ our sales in the normal course of our operations, and amounts currently available from our Revolving Credit Facility and other sources, will be sufficient to fund our routine operations, including working capital requirements, for at least the next 12twelve months.

Revolving Credit Facility

In April 2018, we amended and restated our Revolving Credit Facility to provide for a senior secured revolving loan and letter of credit facility of up to $600 million and an uncommitted accordion feature that permits us to increase the facility by an aggregate additional principal amount of up to $150 million. If we obtain the full amount of the additional increases in commitments, the Revolving Credit Facility will allow borrowings of up to $750 million. Borrowings under the Revolving Credit Facility are subject to availability under the Borrowing Base (as that term is defined in the Revolving Credit Facility). Letters of credit in an aggregate amount of up to $30 million are also available under the Revolving Credit Facility, which would reduce the amount of the revolving loans available thereunder. Borrowings under the Revolving Credit Facility bear interest at a rate per annum equal to (i) LIBOR plus a margin ranging from 1.75 percent to 2.25 percent, with the margin determined based upon average excess availability for the immediately preceding fiscal quarter for loans based on LIBOR, or (ii) the administrative agent’s base rate plus a margin ranging from 0.75 percent to 1.25 percent, with the margin based upon average excess availability for the immediately preceding fiscal quarter for loans based on the base rate.

If excess availability falls below the greater of (i) $50 million and (ii) 10 percent of the lesser of (a) the borrowing base and (b) the maximum permitted credit at such time, the Revolving Credit Facility requires maintenance of a fixed charge coverage ratio of 1.0 to 1.0 until excess availability has been at least the greater of (i) $50 million and (ii) 10 percent of the lesser of (a) the borrowing base and (b) the maximum permitted credit at such time for a period of 30 consecutive days.

We amended the Revolving Credit Facility on January 31, 2020, to provide that (i) the “Seasonal Period” will run from November 15, 2019, through July 15, 2020, for the calendar year 2019, and from December 15 of each calendar year through April 15 of each immediately succeeding calendar year for the calendar year 2020 and thereafter, and (ii) the measurement period in the definition of “Cash Dominion Event” will be five consecutive business days instead of three consecutive business days.

As of ~~March 28, 2020,~~April 3, 2021, we had outstanding borrowings of ~~$381.6~~$358.5 million and excess availability of ~~$96.8~~$238.1 million ~~and a weighted average interest rate of 3.2 percent~~ under ~~the~~our Revolving Credit Facility. As of ~~December 28, 2019, our principal balance was $326.5~~January 2, 2021, had outstanding borrowings of $288.2 million and excess availability ~~was $80.0~~of $184.3 million ~~and our weighted~~under out Revolving Credit Facility. Our average effective interest rate was ~~3.9~~2.4 percent and 2.8 percent for the quarters ended April 3, 2021 and January 2, 2021, respectively. For the quarter ended March 28, 2020, our average effective interest rate was 4.2 percent.

We were in compliance with all covenants under the Revolving Credit Facility as of ~~March 28, 2020.~~April 3, 2021.

Term Loan Facility

~~In April 2018,~~We previously had a term loan facility that we entered into ~~our~~in April 2018 with HPS Investments Partners, LLC, as administrative and collateral agent, and certain other financial institutions party thereto (the “Term Loan Facility”), with a maturity date of October 13, 2023. The Term Loan Facility ~~with HPS Investment Partners, LLC, and other financial institutions as party thereto, which provides~~provided for a ~~term~~senior secured first lien loan facility in an initial aggregate principal amount of $180 million and was secured by a security interest in substantially all of our assets. ~~Borrowings~~

Prepayment premiums associated with the repayment of indebtedness were $0.9 million and $2.1 million for the three-month periods ended April 3, 2021 and March 28, 2020, respectively.

As of January 2, 2021, we had outstanding borrowings of $43.2 million under the Term Loan Facility. On April 2, 2021, we repaid the remaining outstanding principal balance of the Term Loan Facility and, as a result, as of April 3, 2021, we had no outstanding borrowings under the Term Loan Facility, ~~may be made as Base Rate Loans or Eurodollar Rate Loans. The Base Rate Loans will bear interest at the rate per annum equal to (i) the greatest~~which has been extinguished. In connection with our repayment of the ~~(a) U.S. prime lending rate published~~outstanding principal balance in ~~The Wall Street Journal, (b) the Federal Funds Effective Rate plus 0.50 percent, and (c) the sum of the Adjusted Eurodollar Rate of one month plus 1.00 percent, provided~~full on April 2, 2021, we expensed $5.8 million debt issuance costs that the Base Rate shall at no time be less than 2.00 percent per annum; plus (ii) the Applicable Margin, as described below. Eurodollar Rate Loans will bear interest at the rate per annum equal to (i) the ICE Benchmark Administration LIBOR Rate, provided that the Adjusted Eurodollar Rate shall at no time be less than 1.00 percent per annum; plus (ii) the Applicable Margin. The Applicable Margin will be 6.00 percentwe had been amortizing in connection with ~~respect to Base Rate Loans and 7.00 percent with respect to Eurodollar Rate Loans.~~

~~We amended the~~our former Term Loan ~~Facility~~Facility. These costs are included within interest expense, net, on ~~December 31, 2019,~~the Condensed Consolidated Statements of Operations and reported separately as an adjustment to ~~extend~~net income in our Condensed Consolidated Statements of Cash Flows.

Our average interest rate under the ~~period for satisfying the designated principal balance level required to maintain the modified total net leverage ratio covenant levels~~facility, exclusive of fees and prepayment premiums, was approximately 8.0 percent for the ~~2019 fourth~~quarters ended April 3, 2021, and ~~subsequent quarters thereunder, which~~January 2, 2021. For March 28, 2020, our average interest rate under the facility, exclusive of fees and prepayment premiums, was ~~satisfied on January 31, 2020, through repayments from proceeds from~~approximately 8.7 percent.

Finance Lease Commitments

Our finance lease liabilities consist of leases related to equipment and vehicles, and to real estate, with the majority of those finance lease commitments relating to the real estate financing transactions ~~described in Note 8. On February 28, 2020, we further amended the Term Loan Facility to provide~~ that we ~~would not be subject to the facility’s total net leverage ratio covenant from~~have completed in recent years. During fiscal 2017 and ~~after the time, and then for so long as, the principal balance level under the facility is less than $45 million. On April 1, 2020,~~2018, we amended the Term Loan Facility by, among other things, modifying the total net leverage ratio covenant levels for the 2020 second and third quarters. All other total net leverage ratio covenant levels for prior and future quarters were unchanged.

The Term Loan Facility permits us to enter into real estate sale leaseback transactions with the net proceeds therefrom to be used for repayment of indebtedness under the facility, subject to payment of an applicable prepayment premium. In addition, proceeds from the sale of “Specified Properties” will be used for the repayment of indebtedness under the Term Loan Facility, subject to payment of an applicable prepayment premium, or, under certain circumstances, repayment of indebtedness under our Revolving Credit Facility.

The Term Loan Facility requires maintenance of a total net leverage ratio of 6.25 to 1.00 for the quarter ending March 28, 2020, a ratio of 8.75 to 1.00 for the second and third quarters of 2020, and ratio levels generally reducing over the remaining term of the Term Loan Facility. We were in compliance with all covenants under the Term Loan Facility as of March 28, 2020.

As of March 28, 2020, we had outstanding borrowings of $77.4 million under our Term Loan Facility and an interest rate of 8.6 percent per annum. As of December 28, 2019, our principal balance was $146.7 million with an interest rate of 8.7 percent per annum. The decrease in the outstanding borrowings was due to net proceeds of thecompleted real estate financing transactions ~~described in Note 8 being applied to the Term Loan Facility.~~

~~Finance Lease Commitments and Real Estate Financing Obligations~~

~~In January 2018, we completed sale-leaseback transactions~~ on four distribution centers. We sold these properties for gross proceeds of $110.0 million. As a result of the transactions, we recognized finance lease assets and obligations totaling $95.1 million on these properties, and a total deferred gain of $83.9 million, which is amortized over the lives of the applicable leases. Our total finance lease commitments, which substantially relate to leases of property, including the properties associated with these sale-leaseback transactions, totaled $151.4 million as of March 28, 2020.

~~In May 2019 and June~~six warehouse facilities; during fiscal 2019, we completed real estate financing transactions on two ~~distributions centers under sale-leaseback arrangements. We sold these properties for gross proceeds of $45.0 million. During the first quarter of 2020, in December 2019, January 2020,~~warehouse facilities; and, ~~February~~during fiscal 2020, we completed real estate financing transactions ~~under sale-leaseback arrangements~~ on ~~an additional~~ fourteen ~~distribution centers.~~warehouse facilities. We ~~sold~~recognized finance lease assets and obligations as a result of each of these transactions. In addition, during the first quarter of 2021, we recorded finance leases of $10.2 million related to new tractors put into service as part of our mobile fleet. Our total finance lease commitments, including the properties ~~for gross proceeds of $78.3 million. Under ASC 842, which we adopted at the beginning of fiscal 2019,~~associated with these transactions, did not qualify as sales. As a result, we recorded financing obligations in the amount of the gross proceeds received, which are amortized over the lives of the financing obligations. Our total commitments under these financing obligations totaled ~~$172.7~~$281.3 million as of ~~March 28, 2020.~~April 3, 2021. Of the $281.3 million of finance lease commitments as of April 3, 2021, $243.7 million related to real estate and $37.6 million related to equipment.

Interest Rates

Our Revolving Credit Facility ~~and our Term Loan Facility include~~includes available interest rate options based on the London Inter-bank Offered Rate ~~(LIBOR)~~(“LIBOR”). ~~It is widely expected that~~Certain LIBOR rates will be discontinued after 2021, ~~and the~~while other rates will be discontinued in 2023. The U.S. and other countries are currently working to replace LIBOR with alternative reference rates. The consequences of these developments with respect to LIBOR cannot be entirely predicted; however, we do not believe that the discontinuation of LIBOR as a reference rate in our loan ~~agreements~~agreement will have a material adverse effect on our financial position or materially affect our interest expense.

Sources and Uses of Cash

Operating Activities

Net cash used in operating activities for the first three months of fiscal ~~2020~~2021 was ~~$59.2~~$24.6 million, compared to net cash used in operating activities of ~~$58.3~~$59.2 million in the first three months of fiscal ~~2019. During~~2020. The decrease in cash used by operating activities during the first three months of fiscal ~~2020, cash used~~2021 was primarily a result of the net income for the current year period compared to a loss in ~~operating activities increased slightly, primarily from~~ the prior year period, combined with an increase in ~~working capital~~our accounts payable balance compared to the prior ~~year.~~year period.

Investing Activities

Net cash ~~used in~~provided by investing activities for the first three months of fiscal ~~2020~~2021 was ~~$1.2~~$0.7 million compared to net cash ~~provided by~~used in investing activities of ~~$4.9~~$1.2 million in the first three months of fiscal ~~2019.~~2020. The increase in net cash provided by investing activities ~~in the prior year~~ was primarily due to ~~$6.0 million that was returned~~proceeds received from ~~escrow after~~ the ~~Cedar Creek acquisition was finalized, offset by cash paid for property and equipment investments~~sale of ~~$1.2 million; cash paid for property and equipment investments was consistent~~our non-operating facility in ~~both periods.~~Birmingham during the first quarter of 2021.

Financing Activities

Net cash provided by financing activities totaled $24.0 million for the first three months of fiscal 2021, compared to net cash provided by financing activities of $61.3 million for the first three months of fiscal ~~2020, compared to $57.1 million for the first three months of fiscal 2019.~~2020. The ~~increase~~decrease in net cash provided by financing activities is primarily due to an increase of $16.8 million in repayments on our Revolving Credit Facility and Term Loan Facility, including the repayment of the remaining outstanding balance on our Term Loan Facility, and reduction of $78.3 million in proceeds from real estate financing transactions completed in the first three months of ~~$78.3 million and net borrowings on~~fiscal 2020, with no such transactions completed in the ~~revolving credit facility~~first three months of ~~$55.1 million,~~fiscal 2021, partially offset by ~~a repayment on~~an increase in borrowings of $58.0 million from our ~~term loan of $69.2 million.~~

Revolving Credit Facility.

Operating Working Capital^[1]

Selected financial information (in thousands)
March 28, 2020 December 28, 2019 March 30, 2019
Current assets:
Cash $ 12,558
$ 11,643
$ 12,682
Receivables, less allowance for doubtful accounts 247,940
192,872
246,342
Inventories, net 378,634
345,806
387,330
$ 639,132
$ 550,321
$ 646,354

Current liabilities:

Accounts payable ^[2]
$ 162,398
$ 132,348
$ 175,192
$ 162,398
$ 132,348
$ 175,192

Operating working capital $ 476,734
$ 417,973
$ 471,162

^{___________________________}

^[1] ~~Operating working capital is defined as the sum of cash, receivables, and inventory less accounts payable.~~

^[2]Accounts payable includes outstanding payments of $26.5 million, $16.1 million, and $42.9 million as of March 28, 2020, December 28, 2019, and March 30, 2019, respectively. Outstanding payments represent outstanding checks and electronic payments that have not been presented for payment as of the end of the period; these amounts are typically funded within 24 hours.

Operating working capital is an important measurement we use to determine the efficiencies of our operations and our ability to readily convert assets into cash. Operating working capital is defined as the sum of cash, receivables, and inventory, less accounts payable. Management of working capital helps us monitor our progress in meeting our goals to enhance working capital assets.


Selected financial information
	April 3, 2021		January 2, 2021		March 28, 2020
	(In thousands)
Current assets:
Cash	$	179	$	82	$	12,558
Receivables, less allowance for doubtful accounts	418,815		293,643		247,940
Inventories, net	376,423		342,108		378,634
	$	795,417	$	635,833	$	639,132

Current liabilities:
Accounts payable	$	218,975	$	165,163	$	162,398
	$	218,975	$	165,163	$	162,398

Operating working capital	$	576,442	$	470,670	$	476,734

Operating working capital of ~~$476.7 million on March 28, 2020, compared to $418.0~~$576.4 million as of ~~December 28, 2019,~~April 3, 2021, compared to $470.7 million as of January 2, 2021, increased on a net basis by approximately ~~$58.8~~$105.8 million. The increase in operating working capital is primarily driven by ~~seasonal increases~~an increase in accounts receivable and an increase in inventory, both of which continue to ~~support expected increases that~~be effected by the ~~Company has historically experienced~~inflationary environment impacting our net sales and product costs. The net increase in ~~sales activity during the summer building season,~~current assets was offset by ~~increases~~an increase in accounts ~~payable.~~

payable, also due to the inflation of product costs.

Operating working capital of ~~$476.7~~$576.4 million ~~on March 28, 2020,~~as of April 3, 2021, compared to ~~$471.2~~$476.7 million as of March ~~30, 2019,~~28, 2020, increased by ~~$5.6 million,~~$99.7 million. The increase in operating working capital is primarily driven by ~~a decrease~~an increase in accounts receivable, offset by an increase in accounts payable, ~~partially offset by~~both largely due to the inflationary environment impacting our net sales and product costs.

Investments in Capital Assets

Our investments in capital assets consist of cash paid for owned assets and the inception of financing lease arrangements for long-lived assets to support our distribution infrastructure. The gross value of these assets are included in “Property and equipment, at cost” on our condensed consolidated balance sheet. For the first quarter ended April 3, 2021, we invested $1.1 million in cash in investments in long-lived assets and entered into finance leases related to new tractors put into service as part of our mobile fleet totaling approximately $10.2 million, for a ~~decrease~~total investment of $11.3 million in capital assets during the ~~company’s inventory level.~~quarter.

Critical Accounting Policies

The preparation of our consolidated financial statements and related disclosures in conformity with GAAP requires our management to make judgments and estimates that affect the amounts reported in our condensed consolidated financial statements and accompanying notes. There have been no material changes to our critical accounting policies from the information provided in Item 7 of our Annual Report on Form 10-K for the fiscal year ended ~~December 28, 2019.~~January 2, 2021.

Forward-Looking Statements

This report contains forward-looking statements. Forward-looking statements include, without limitation, any statement that predicts, forecasts, indicates or implies future results, performance, liquidity levels or achievements, and may contain the words “believe,” “anticipate,” “expect,” “estimate,” “intend,” “project,” “plan,” “will be,” “will likely continue,” “will likely result” or words or phrases of similar meaning. Forward-looking statements involve risks and uncertainties that may cause our business,

strategy, or actual results to differ materially from the forward-looking statements. The forward-looking statements in this report include statements about the COVID-19 pandemic, its duration and effects, and its potential effects on our business and results of operations; anticipated effects of adopting certain accounting standards; estimated future annual amortization expense; potential changes to estimates made in connection with revenue recognition; the expected outcome of legal proceedings; industry conditions; seasonality; and liquidity and capital resources.

Forward-looking statements are based on estimates and assumptions made by our management that, although believed by us to be reasonable, are inherently uncertain. Forward-looking statements involve risks and uncertainties that may cause our business, strategy, or actual results to differ materially from the forward-looking statements. These risks and uncertainties include those discussed under the heading “Risk Factors” in Item 1A of our Annual Report on Form 10-K for the year ended ~~December 28, 2019,~~January 2, 2021, and those discussed elsewhere in this report (including Item 1A of Part II of this report) and in future reports that we file with the SEC. We operate in a changing environment in which new risks can emerge from time to time. It is

not possible for management to predict all of these risks, nor can it assess the extent to which any factor, or a combination of factors, may cause our business, strategy, or actual results to differ materially from those contained in forward-looking statements. Factors that may cause these differences include, among other things:

•the risk that we may experience pricing and product cost variability;

•the fact that our earnings are highly dependent on volumes;

•the fact that our industry is highly fragmented and competitive and, that if we are unable to compete effectively, our net sales and operating results may be reduced;

•the fact that our industry is highly cyclical, and prolonged periods of weak demand or excess supply may reduce our net sales and/or margins, which may cause us to incur losses or reduce out net income;

•the risk that adverse housing market conditions may negatively impact our business, liquidity, and results of operations, and increase the credit risk from our customers;

•the full effect of the COVID-19 pandemic ~~and other contagious illness outbreaks and their potential effects~~ on our ~~industry, suppliers~~business is unknown, and ~~supply chain, and customers, and~~it may adversely affect our business and results from operations;

•our ability to effectively manage our inventory relative to our sales volume or as the prices of ~~operations, cash flows,~~the products we distribute fluctuate, which could affect our business, financial condition, and ~~future prospects;~~operating results;

•information technology security risks and business interruption risks, which may cause us to incur increasing costs in an effort to minimize and/or respond to those risks;

•the risk of increases in petroleum prices, which could adversely affect our ~~ability to integrate~~results of operations;

•consolidation among competitors, suppliers, and ~~realize anticipated synergies from acquisitions;~~customers could negatively impact our business;

•the risk of disintermediation;

•the risk of loss of ~~material customers, suppliers,~~key products or product lines in connection with acquisitions; operational disruption in connection with the integration of acquisitions; our indebtedness and its related limitations; sufficiency of cash flows and capital resources; our ability to monetize real estate assets; fluctuations in commodity prices; adverse housing market conditions; disintermediation by customers and suppliers; changes in prices, supply and/or demand for our products; inventory management; competitive industry pressures; industry consolidation; product shortages; loss of and dependence on key suppliers and ~~manufacturers; import taxes~~manufacturers could affect our financial health;

•our dependence on international suppliers and ~~costs, including new or increased tariffs, anti-dumping duties, countervailing duties or similar duties;~~manufacturers for certain products exposes us to risks that could affect our ~~ability to successfully implement our strategic initiatives; fluctuations in operating results; sale-leaseback transactions and their effects; real estate leases; changes in interest rates;~~financial condition;

•business disruptions;

•the risk of exposure to product liability ~~claims; our ability to complete offerings under our shelf registration statement on favorable terms, or at all; changes in our product mix; petroleum prices; information technology security~~ and ~~business interruption risks; litigation~~other claims and legal proceedings; natural disasters and unexpected events; activities of activist stockholders; labor and union matters; limits on net operating loss carryovers; pension plan assumptions and liabilities; risksproceedings related to our ~~internal controls; retention~~business and the products we distribute, which may exceed the coverage of ~~associates~~our insurance;

•the risk that our business operations could suffer significant losses from natural disasters, catastrophes, fire, or other unexpected events;

•that fact that a significant percentage of our employees are unionized, and ~~key personnel;~~wage increases or work stoppages by our unionized employees may reduce our results of operations;

•the risk that federal, state, local, and other regulations ~~including~~could impose substantial costs and restrictions on our operations that would reduce our net income;

•the fact that we are subject to federal, state, and local environmental protection laws and ~~regulations;~~may have to incur significant costs to comply with these laws and regulations in the future;

•our level of indebtedness could limit our financial and operating activities and adversely affect our ability to incur additional debt to fund future needs;

•our cash flows and capital resources may be insufficient to make required payments on our indebtedness or future indebtedness;

•the instruments governing our indebtedness contain various covenants limiting the discretion of our management in operating our business, including requiring us to maintain a minimum level of excess liquidity;

•borrowings under our revolving credit facility bear interest at a variable rate, which subjects us to interest rate risk, which could cause our debt service obligations to increase significantly;

•we may still incur more debt, which could increase the risks relating to indebtedness;

•the fact that we have sold and leased back certain of our distribution centers under long-term non-cancelable leases, and may enter into similar transactions in the future;

•the fact that many of our distribution centers are leased, and if we close a leased distribution center, we will still be obligated under the applicable lease;

•changes in our product mix could adversely affect our results of operations;

•the risk of adjustments in the future based on actual development experience because we establish insurance-related deductible/retention reserves based on historical loss development factors;

•our strategy includes pursuing acquisitions, which we may be unsuccessful in making and integrating mergers, acquisitions, and investments, and completing divestitures;

•the risk that the activities of activist stockholders could have a negative impact on our business and results of operations;

•the risk that the value of our deferred tax assets could become impaired, which could materially and adversely affect our operating results;

•the risk that our expected annual effective tax rate could be volatile and materially change as a result of changes in mix of earnings and other factors;

•the risk that changes in actuarial assumptions for our pension plan could impact our financial results, and funding requirements are mandated by the federal government;

•the risk that costs and liabilities related to our participation in multi-employer pension plans could increase;

•the risk that we could be the subject of securities class action litigation due to stock price volatility, which could divert management’s attention and adversely affect our results of operations; and

•the risk that changes in, or interpretation of, accounting ~~principles.~~ principles could result in unfavorable accounting changes.

Given these risks and uncertainties, we caution you not to place undue reliance on forward-looking statements. We expressly disclaim any obligation to update or revise any forward-looking statement as a result of new information, future events or otherwise, except as required by law.

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Not applicable.

ITEM 4. CONTROLS AND PROCEDURES

Our management performed an evaluation, as of the end of the period covered by this report on Form 10-Q, under the supervision of our chief executive officer and chief financial officer, of the effectiveness of the design and operation of our disclosure controls and procedures (as defined in Rule 13a-15(e) and 15d-15(e) of the Securities and Exchange Act of 1934, as amended (the “Exchange Act”)). Based on that evaluation, our chief executive officer and chief financial officer have concluded that our disclosure controls and procedures are effective to ensure that information required to be disclosed by us in reports that we file or submit under the Exchange Act is recorded, processed, summarized, and reported within the time periods specified in the SEC’s rules and forms, and is accumulated and communicated to our management including our chief executive officer and chief financial officer, to allow timely decisions regarding required disclosure.

During the period covered by this report, other than described below, there have been no changes in our internal control over financial reporting that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

PART II. OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

During the first quarter of fiscal ~~2020,~~2021, there were no material changes to our legal proceedings as disclosed in our Annual Report on Form 10-K for the year ended ~~December 28, 2019.~~January 2, 2021. Additionally, we are, and from time to time may be, a party to routine legal proceedings incidental to the operation of our business. The outcome of any pending or threatened proceedings is not expected to have a material adverse effect on our financial condition, operating results, or cash flows, based on our current understanding of the relevant facts. Legal expenses incurred related to these contingencies are generally expensed as incurred.

ITEM 1A. RISK FACTORS

~~In addition~~There have been no material changes to the ~~other information set forth in this report, you should carefully consider the~~risk factors ~~discussed~~disclosed in Part I, "Item 1A.Risk Factors" in ~~our~~the Company’s Annual Report on Form 10-K for the year ended December 28, 2019, as updated and supplemented below, which could materially affect our business, financial condition or future results. The risks described in this report and in our Annual Report on Form 10-K are not the only risks facing our Company. Additional risks and uncertainties not currently known to us or that we currently deem to be immaterial also may materially adversely affect our business, financial condition or future results.January 2, 2021.

~~Our business, results of operations, and financial condition may be materially adversely impacted by the COVID-19 pandemic.~~

A novel strain of coronavirus (COVID-19) was first identified in December 2019 in certain Far East and European countries. On March 11, 2020, the spread of COVID-19 was declared a global pandemic by the World Health Organization, with a high concentration of cases in the United States. On March 13, 2020, the United States declared a national emergency concerning the pandemic, and many U.S. states and municipalities have declared public health emergencies. In response, U.S. federal, state, and local governments and agencies have enacted wide-ranging actions to combat the pandemic, including “shelter-in-place” orders and quarantines, social distancing mandates, and hygiene protocols. In addition, some U.S. states and municipalities have placed significant limits on non-essential construction projects. These actions have substantially restricted daily activities for individuals and businesses, and have caused many businesses to curtail or cease normal operations.

The widespread health crisis created by the COVID-19 pandemic and the actions taken to combat it have had a significant adverse effect on the economies and financial markets of the U.S. and many other countries. The U.S. has experienced deteriorating economic conditions in many major markets, including increased unemployment, decreases in disposable income, declines in consumer confidence, general economic slowdowns, and significant volatility in financial markets. These deteriorating economic conditions have generally lowered demand for our products, and they may continue to do so in the future, which could materially reduce our sales and profitability. In addition, any bankruptcy or financial distress of our customers or suppliers due to deterioration in economic conditions could result in other significant negative impacts to our business including reduced sales, decreased collectability of accounts receivable, impaired credit, an ineffective supply chain, loss of credit from our suppliers, and a reduction in certain key product brands. Deteriorating economic conditions and reduced sales and profitability could also limit the availability of credit, or increase our borrowing costs, including by requiring additional collateral. We also may be required to record impairment charges with respect to assets whose fair values may be negatively affected by the effects of the pandemic on our operations.

In addition, although our operations and those of most of our direct customers and suppliers are currently considered “essential” and are therefore exempt from state and local business closure orders, these exemptions are not expected to completely mitigate the significant impact to our markets caused by the COVID-19 pandemic, and they may be curtailed or revoked in the future. If these exemptions are curtailed or revoked, it could require us, or our customers or suppliers, to further limit our operations or suspend them altogether, which would adversely impact our business, operating results, and financial condition. The pandemic has also caused, and may continue to cause, disruption to the global supply chain, which could impact our ability to source products from our suppliers, many of whom are located outside of the United States, including China.

In response to the pandemic, we have instituted a number of actions to protect our workforce, including restricting business travel, imposing mandatory quarantine periods for employees who have traveled to areas impacted by the pandemic, modifying office functions to allow employees to work remotely, and modifying our warehouse and delivery operations to enforce enhanced safety protocols around social distancing, hygiene, and health screening. While all of these steps are necessary and appropriate in light of the pandemic, they, coupled with state and local business closure orders and regulations, do impact our ability to operate our business in its ordinary and traditional course, and they have and may continue to cause us to experience reductions in productivity and disruptions to our business routines while they remain in place.

The potential magnitude or duration of the business and economic impacts from this pandemic are uncertain, but the associated negative trends are likely to continue through fiscal 2020. However, the negative impact on our business from the COVID-19 pandemic could be more prolonged and may become more severe. Any of the negative impacts of the COVID-19 pandemic, including those described above, alone or in combination with others, may have a material adverse effect on our results of operations, financial condition, and cash flows. In addition, any of these negative impacts, alone or in combination with others, could exacerbate many of the risks described in Part I, “Item 1A. Risk Factors”, in our Annual Report on Form 10-K for the year ended December 28, 2019, and the other risks described in this report. The full extent to which the COVID-19 pandemic will negatively affect our results of operations, financial condition, and cash flows will depend on future developments that are highly uncertain and cannot be predicted.

~~We have been notified that we are not in compliance with certain listing standards of the New York Stock Exchange (NYSE), and we may be unable to regain compliance.~~

On April 22, 2020, we were notified by the NYSE that we were not in compliance with the continued listing standards set forth in Section 802.01B of the New York Stock Exchange Listed Company Manual because our average global market capitalization over a consecutive 30 trading-day period was less than $50 million, and, at the same time, our stockholders’ equity was less than $50 million.

On April 28, 2020, we submitted a plan to regain conformity with this NYSE listing standard by January 1, 2022, in accordance with NYSE rules. Within 45 days of the submission of this plan, the NYSE will determine whether we have made a reasonable demonstration of our ability to conform to the relevant standards within the cure period. If the NYSE accepts our plan, our common stock will continue to be listed and traded on the NYSE during the cure period, subject to our compliance with other continued listing standards, and we will be subject to quarterly monitoring by the NYSE for compliance with the plan. The NYSE will deem us to have regained compliance if, during the cure period, we comply with the relevant continued listing standards, or qualify under an original listing standard, for a period of two consecutive quarters. Until the NYSE determines that we have regained compliance, our common stock trading symbol of “BXC” will have an added designation of “.BC” to indicate that the status of the common stock is “below compliance” with the NYSE continued listing standards. If we fail to comply with the plan, do not meet continued listing standards at the end of the allowed cure period, or in the event that our common stock trades at levels viewed to be abnormally low by the NYSE, our common stock will be subject to the prompt initiation of NYSE suspension and delisting procedures. There can be no assurance that the NYSE will accept our plan, or that our plans to regain compliance will be successful.

While we believe that the erosion of our average market capitalization was a direct result of the effects of the COVID-19 pandemic on the stock market, and we expect that a return to normalcy in the stock market should return our market capitalization to a compliant level, delisting would have an adverse effect on the liquidity of our common stock and, as a result, the market price for our common stock might decline if our common stock is delisted. Delisting could also make it more difficult for us to raise additional capital.

ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

The following table summarizes the Company’s common stock repurchase activity for each month of the quarter ended ~~March 28, 2020:~~April 3, 2021:


		Total Number
		of Shares	Average Price
Period		Purchased (1)	Paid Per Share
January 3 - February 6		2,096	$	37.10
February 7 - March 6		504	$	42.84
March 7 - April 3		—	$	—
Total		2,600

(1)	The Company did not repurchase any of its equity securities during the period covered by this report pursuant to any publicly announced plan or program, and no such plan or program is presently in effect. All purchases reflected in the table above pertain to purchases of common stock by the Company in connection with tax withholding obligations of the Company’s employees upon the vesting of such employees’ restricted stock unit awards.

     Total Number
Shares Average Price
Period
Purchased^[1]
  Paid Per Share
December 29, 2019 - February 1, 2020 —
   $ —
February 2 - February 29, 2020 498
   $ 13.45
March 1 - March 28, 2020 —
   $ —
Total 498


[1] The Company did not repurchase any of its equity securities during the period covered by this report pursuant to any publicly announced plan or program, and no such plan or program is presently in effect. All purchases reflected in the table above pertain to purchases of common stock by the Company in connection with tax withholding obligations of the Company’s employees upon the vesting of such employees’ restricted stock awards.

ITEM 3. DEFAULTS UPON SENIOR SECURITIES

None.

ITEM 4. MINE SAFETY DISCLOSURES

Not applicable.

ITEM 5. OTHER INFORMATION

None.

ITEM 6. EXHIBITS



Exhibit Number				Description
~~10.1~~31.1			*	First Amendment to Amended and Restated Credit Agreement, dated January 31, 2020, by and among BlueLinx Holdings Inc., certain subsidiaries of BlueLinx Holdings Inc. as borrowers or guarantors thereunder, Wells Fargo Bank, National Association, as administrative agent, and certain other financial institutions party thereto.
~~10.2~~	*	Fourth Amendment to Credit and Guaranty Agreement, dated December 31, 2019, by and among BlueLinx Holdings Inc., as borrower, certain subsidiaries of BlueLinx Holdings Inc., as guarantors, the lenders party thereto, and HPS Investment Partners, LLC, in its capacity as administrative agent.
~~10.3~~	*	Fifth Amendment to Credit and Guaranty Agreement, dated February 28, 2020, by and among BlueLinx Holdings Inc., as borrower, certain subsidiaries of BlueLinx Holdings Inc., as guarantors, the lenders party thereto, and HPS Investment Partners, LLC, in its capacity as administrative agent.
~~10.4~~	*	~~Employment Agreement between BlueLinx Corporation and Kelly C. Janzen, dated March 2, 2020.~~
~~10.5~~	*	~~Separation Agreement between BlueLinx Corporation and Susan C. O’Farrell, dated March 9, 2020.~~
~~10.6~~	*	~~Form of Purchase and Sale Agreement with Big Acquisitions LLC, dated as of October 16, 2019.~~
~~10.7~~	*	~~Form of First Amendment to Purchase and Sale Agreement with Big Acquisitions LLC, dated as of November 20, 2019.~~
~~10.8~~	*	~~Form of Second Amendment to Purchase and Sale Agreement with Big Acquisitions LLC, dated as of December 13, 2019.~~
~~10.9~~	*	~~Letter Agreement, dated March 22, 2020, between BlueLinx Holdings Inc. and Mitchell B. Lewis.~~
~~31.1~~	*	Certification of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
31.2			*	Certification of Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
32.1			**	Certification of Chief Executive Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
32.2			**	Certification of Chief Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
101.Def				Definition Linkbase Document.
101.Pre				Presentation Linkbase Document.
101.Lab				Labels Linkbase Document.
101.Cal				Calculation Linkbase Document.
101.Sch				Schema Document.
101.Ins				Instance Document - the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document.
104				The cover page from this Quarterly Report on Form 10-Q for the quarter ended April 3, 2021, formatted in Inline XBRL.

			*	Filed herewith.
			**	Exhibit is being furnished and shall not be deemed to be “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, or otherwise subject to the liabilities of that Section, nor shall it be deemed incorporated by reference into any filing under the Securities Act of 1933, as amended.

SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.




		BlueLinx Holdings Inc.
		(Registrant)

Date: May ~~6, 2020~~4, 2021	By:	/s/ Kelly C. Janzen
		Kelly C. Janzen
		Senior Vice President and Chief Financial Officer



(In thousands)	Estimated Amortization
2020	$	5,490
2021	4,973
2022	3,111
2023	1,807
2024	1,505



	Three Months Ended March 28, 2020		Three Months Ended March 30, 2019
	Three Months Ended March 28, 2020		Three Months Ended March 30, 2019
	(In thousands)
Operating lease cost:	$	3,120	$	3,144
Finance lease cost:
Amortization of right-of-use assets	$	3,042	$	2,896
Interest on lease liabilities	4,425		3,248
Total finance lease costs	$	7,467	$	6,144



	(In thousands)
2020	$	12,735
2021	10,092
2022	8,247
2023	7,899
2024	7,287
Thereafter	56,081
Total	$	102,341



	(In thousands)
2020	$	7,305
2021	9,922
2022	10,130
2023	10,343
2024	10,559
Thereafter	124,454



(Dollars in thousands)	First Quarter of Fiscal 2020			% of Net Sales	First Quarter of Fiscal 2019			% of Net Sales
Net sales	$	662,070		100.0%	$	638,701		100.0%

Gross profit	93,209			14.1%	86,045			13.5%
Selling, general, and administrative	77,769			11.7%	74,410			11.7%
Gains from sales of property	(525		)	(0.1)%	—			—%
Depreciation and amortization	7,635			1.2%	7,328			1.1%
Operating income	8,330			1.3%	4,307			0.7%
Interest expense, net	14,380			2.2%	13,401			2.1%
Other (income) expense, net	(237		)	(0.0)%	150			0.0%
Loss before benefit from income taxes	(5,813		)	(0.9)%	(9,244		)	(1.4)%
Benefit from income taxes	(5,026		)	(0.8)%	(2,525		)	(0.4)%
Net loss	$	(787	)	(0.1)%	$	(6,719	)	(1.1)%