UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q


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

For the quarterly period ended ~~April 1, 2023~~March 30, 2024


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

Commission file number: 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 (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 April ~~28, 2023,~~26, 2024, there were ~~9,088,972~~8,661,741 shares of BlueLinx Holdings Inc. common stock, par value $0.01, outstanding.

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BLUELINX HOLDINGS INC.

Form 10-Q

For the Quarterly Period Ended ~~April 1, 2023~~March 30, 2024

~~INDEX~~

Table of Contents


			PAGE
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements — BlueLinx Holdings Inc. (Unaudited)			1
Condensed Consolidated Statements of Operations and Comprehensive Income			1
Condensed Consolidated Balance Sheets			2
Condensed Consolidated Statements of Stockholders' Equity			3
Condensed Consolidated Statements of Cash Flows			4
Notes to Condensed Consolidated Financial Statements			5
Note 1 - Basis of Presentation and Significant Accounting Policies			5
Note 2 - Inventories			6
Note 3 - Goodwill and Other Intangible Assets			7
Note 4 - Revenue Recognition			8
Note 5 - Debt and Finance Leases			9
Note 6 - Net Periodic Pension Cost			11
Note 7 - Share-Based Compensation			11
Note 8 - Lease Commitments			11
Note 9 - Commitments and Contingencies			15
Note 10 - Accumulated Other Comprehensive Loss			15
Note 11 - Income Taxes			15
Note 12 - Earnings Per Share and Stockholders' Equity			16

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations			1617
Item 3. Quantitative and Qualitative Disclosures About Market Risk			2725
Item 4. Controls and Procedures			2725

PART II. OTHER INFORMATION
Item 1. Legal Proceedings			2826
Item 1A. Risk Factors			2826
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds			2927
Item 3. Defaults Upon Senior Securities			2927
Item 4. Mine Safety Disclosures			2927
Item 5. Other Information			2927
Item 6. Exhibits			3028

~~Signature~~Signatures			3129

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PART I. FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

BLUELINX HOLDINGS INC.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND

COMPREHENSIVE INCOME

(In thousands, except per share data)

(Unaudited)


		Three Months Ended
	Three Months Ended									Three Months Ended
		April 1, 2023		April 2, 2022			March 30, 2024		April 1, 2023
Net sales	Net sales	$	797,904	$	1,302,305
Cost of sales		664,365		1,011,254
Cost of products sold
Gross profit	Gross profit	133,539		291,051
Operating expenses (income):	Operating expenses (income):
Selling, general, and administrative
Selling, general, and administrative
Selling, general, and administrative	Selling, general, and administrative	91,174		91,289
Depreciation and amortization	Depreciation and amortization	7,718		6,746
Amortization of deferred gains on real estate	Amortization of deferred gains on real estate	(984)		(984)

Other operating expenses	Other operating expenses	3,116		838
Other operating expenses
Other operating expenses
Total operating expenses	Total operating expenses	101,024		97,889
Operating income	Operating income	32,515		193,162
Non-operating expenses:	Non-operating expenses:
Interest expense, net
Interest expense, net
Interest expense, net	Interest expense, net	7,687		11,293		4,624		7,687	7,687
Other expense, net	Other expense, net	594		1,138
Income before provision for income taxes	Income before provision for income taxes	24,234		180,731
Provision for income taxes	Provision for income taxes	6,422		47,322
Net income	Net income	$	17,812	$	133,409

Basic income per share		$	1.96	$	13.72
Diluted income per share		$	1.94	$	13.19
Basic earnings per share
Basic earnings per share
Basic earnings per share
Diluted earnings per share

Comprehensive income:
Comprehensive income:
Comprehensive income:	Comprehensive income:
Net income	Net income	$	17,812	$	133,409
Other comprehensive income:	Other comprehensive income:
Amortization of unrecognized pension gain, net of tax	Amortization of unrecognized pension gain, net of tax	239		156
Amortization of unrecognized pension gain, net of tax
Amortization of unrecognized pension gain, net of tax
Other	Other	(11)		20
Total other comprehensive income	Total other comprehensive income	228		176
Comprehensive income	Comprehensive income	$	18,040	$	133,585

See accompanying Notes.

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BLUELINX HOLDINGS INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

(In thousands, except share data)

(Unaudited)


		April 1, 2023		December 31, 2022			March 30, 2024	December 30, 2023
ASSETS	ASSETS					ASSETS
Current assets:	Current assets:					Current assets:
Cash and cash equivalents	Cash and cash equivalents	$	376,234	$	298,943
Receivables, less allowances of $3,733 and $3,449, respectively		298,888		251,555
Receivables, less allowances of $3,293 and $3,398, respectively
Inventories, net	Inventories, net	409,324		484,313
Other current assets	Other current assets	29,295		42,121
Total current assets	Total current assets	1,113,741		1,076,932
Property and equipment, at cost	Property and equipment, at cost	365,667		360,869
Accumulated depreciation	Accumulated depreciation	(157,807)		(155,260)
Property and equipment, net	Property and equipment, net	207,860		205,609
Operating lease right-of-use assets	Operating lease right-of-use assets	43,548		45,717
Goodwill	Goodwill	55,372		55,372
Intangible assets, net	Intangible assets, net	33,879		34,989
Deferred tax assets		55,956		56,169
Deferred income tax asset, net
Other non-current assets	Other non-current assets	15,374		15,254
Total assets	Total assets	$	1,525,730	$	1,490,042
LIABILITIES AND STOCKHOLDERS’ EQUITY	LIABILITIES AND STOCKHOLDERS’ EQUITY					LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:	Current liabilities:					Current liabilities:
Accounts payable	Accounts payable	$	177,046	$	151,626
Accrued compensation	Accrued compensation	13,115		22,556

Finance lease liabilities - short-term		5,087		7,089
Operating lease liabilities - short-term		6,756		7,432
Real estate deferred gains - short-term		3,935		3,935
Pension benefit obligation - short-term		1,795		1,521
Finance lease liabilities - current

Finance lease liabilities - current

Finance lease liabilities - current
Operating lease liabilities - current
Real estate deferred gains - current

Other current liabilities
Other current liabilities
Other current liabilities	Other current liabilities	20,619		16,518
Total current liabilities	Total current liabilities	228,353		210,677
Non-current liabilities:
Long-term debt, net of debt issuance costs of $3,854 and $4,057, respectively		292,753		292,424
Finance lease liabilities - long-term		265,677		265,986
Operating lease liabilities - long-term		38,142		40,011
Real estate deferred gains - long-term		69,452		70,403

Long-term debt
Long-term debt
Long-term debt
Finance lease liabilities - noncurrent
Operating lease liabilities - noncurrent
Real estate deferred gains - noncurrent

Other non-current liabilities
Other non-current liabilities
Other non-current liabilities	Other non-current liabilities	20,604		20,512
Total liabilities	Total liabilities	914,981		900,013
Commitments and Contingencies	Commitments and Contingencies					Commitments and Contingencies
STOCKHOLDERS’ EQUITY:
Common Stock, $0.01 par value, 20,000,000 shares authorized, 9,088,972 and 9,048,603 outstanding on April 1, 2023 and December 31, 2022, respectively		91		90
Stockholders' Equity:						Stockholders' Equity:
Preferred Stock, $0.01 par value, 30,000,000 shares authorized, none issued
Common Stock, $0.01 par value, 20,000,000 shares authorized, 8,661,738 and 8,650,046 outstanding, respectively
Additional paid-in capital	Additional paid-in capital	203,427		200,748

Accumulated other comprehensive loss		(31,184)		(31,412)
Accumulated stockholders’ equity		438,415		420,603

Retained earnings

Retained earnings

Retained earnings
Total stockholders’ equity	Total stockholders’ equity	610,749		590,029
Total liabilities and stockholders’ equity	Total liabilities and stockholders’ equity	$	1,525,730	$	1,490,042

See accompanying Notes.

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BLUELINX HOLDINGS INC.

CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY

(In thousands)

(Unaudited)

Common Stock Additional
Paid-In Capital Accumulated
Other
Comprehensive Loss Accumulated Equity Stockholders’ Equity Total
Shares Amount
Balance, December 31, 2022 9,049 $ 90 $ 200,748 $ (31,412) $ 420,603 $ 590,029
Net income — — — — 17,812 17,812
Impact of pension plan, net of tax — — — 239 — 239
Vesting of restricted stock units 67 1 (1) — — —
Compensation related to share-based grants — — 4,569 — — 4,569
Repurchase of shares to satisfy employee tax withholdings (8) — (570) — — (570)
Obligation for repurchase of shares to satisfy employee tax withholdings (19) (1,319) — — (1,319)
Other — — — (11) — (11)
Balance, April 1, 2023 9,089 $ 91 $ 203,427 $ (31,184) $ 438,415 $ 610,749


	Common Stock			Additional Paid-In Capital		Retained Earnings		Stockholders’ Equity Total
	Shares	Amount
Balance, December 30, 2023	8,650	$	87	$	165,060	$	469,139	$	634,286
Net income	—	—		—		17,492		17,492

Vesting of restricted stock units	19	(a)		(a)		—		—
Compensation related to share-based grants	—	—		2,350		—		2,350
Repurchase of shares to satisfy employee tax withholdings	(7)	—		(907)		—		(907)



Balance, March 30, 2024	8,662	$	87	$	166,503	$	486,631	$	653,221

(a) Activity rounds to less than one thousand dollars.

Common Stock Additional
Paid-In Capital Accumulated
Other
Comprehensive Loss Accumulated Equity Stockholders’ Equity Total
Shares Amount
Balance, January 1, 2022 9,726 $ 97 $ 268,085 $ (29,360) $ 124,427 $ 363,249
Net income — — — — 133,409 133,409
Impact of pension plan, net of tax — — — 156 — 156
Vesting of restricted stock units 11 — — — — —
Compensation related to share-based grants — — 2,162 — — 2,162
Repurchase of shares to satisfy employee tax withholdings (5) — (393) — — (393)
Common stock repurchase and retirement (81) (1) (6,426) — — (6,427)
Other — — — 20 — 20
Balance, April 2, 2022 9,651 $ 96 $ 263,428 $ (29,184) $ 257,836 $ 492,176


	Common Stock			Additional Paid-In Capital		Accumulated Other Comprehensive Loss		Retained Earnings		Stockholders’ Equity Total
	Shares	Amount
Balance, December 31, 2022	9,049	$	90	$	200,748	$	(31,412)	$	420,603	$	590,029
Net income	—	—		—		—		17,812		17,812
Other comprehensive income	—	—		—		228		—		228

Vesting of restricted stock units	67	1		(1)		—		—		—
Compensation related to share-based grants	—	—		4,569		—		—		4,569
Repurchase of shares to satisfy employee tax withholdings	(8)	—		(570)		—		—		(570)

Obligation for repurchase of shares to satisfy employee tax withholdings	(19)			(1,319)		—		—		(1,319)

Balance, April 1, 2023	9,089	$	91	$	203,427	$	(31,184)	$	438,415	$	610,749

There has been no activity for Preferred Stock.

See accompanying Notes.

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BLUELINX HOLDINGS INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(In thousands)

(Unaudited)

Three Months Ended

April 1, 2023

April 2, 2022

March 30, 2024

April 1, 2023

Cash flows from operating activities:

Net income

17,812

133,409

Adjustments to reconcile net income to cash provided by operations:

Net income

Adjustments to reconcile net income to cash (used in) provided by operations:

Depreciation and amortization

7,718

6,746

Amortization of debt discount and issuance costs

329

263

Deferred income tax

213

(1,994)

Provision for deferred income taxes

Amortization of deferred gains from real estate

(984)

Share-based compensation

4,569

2,162

Changes in operating assets and liabilities:

Accounts receivable

(47,333)

(157,419)

Inventories

74,989

(74,097)

Accounts payable

25,420

50,072

Taxes payable

—

47,057

Pension contributions

—

(221)

Other current assets

5,953

(601)

Other assets and liabilities

279

(2,156)

Net cash provided by operating activities

88,965

2,237

Net cash (used in) provided by operating activities

Cash flows from investing activities:

Proceeds from sale of assets

Property and equipment investments

(9,008)

(2,509)

Net cash used in investing activities

(8,971)

(2,460)

Cash flows from financing activities:

Common stock repurchase and retirement

—

(6,427)

Repurchase of shares to satisfy employee tax withholdings

(570)

(393)

Principal payments on finance lease liabilities

(2,133)

(3,722)

Net cash used in financing activities

(2,703)

(10,542)

Net change in cash and cash equivalents

77,291

(10,765)

Net change in cash and cash equivalents

Cash and cash equivalents at beginning of period

298,943

85,203

Cash and cash equivalents at end of period

376,234

74,438

Supplemental cash flow information:

Interest paid during the period

6,190

6,387

Taxes paid during the period

—

2,350

Non-cash transactions:

Obligation for repurchase of shares to satisfy employee tax withholdings

1,319

—

Obligation for repurchase of shares to satisfy employee tax withholdings

See accompanying Notes.

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BLUELINX HOLDINGS INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

~~April 1, 2023~~March 30, 2024

(Unaudited)

1. Basis of Presentation and ~~Summary of~~ Significant Accounting Policies

~~Basis~~BlueLinx Holdings Inc., including consolidated subsidiaries (collectively, the “Company”), is a leading wholesale distributor of ~~Presentation~~residential and commercial building products in the United States. The Company is a two-step distributor and purchases products from manufacturers and distributes those products to dealers and other suppliers in local markets, who then sell those products to end users. The Company carries a broad portfolio of both branded and private-label stock keeping units (“SKUs”) across two principal product categories: specialty products and structural products. Specialty products include items such as engineered wood, siding, moulding and millwork, outdoor living, specialty lumber and panels, and industrial products. Structural products include items such as lumber, plywood, oriented strand board, rebar, and remesh. The Company also provides a wide range of value-added services and solutions aimed at relieving distribution and logistics challenges for its customers and suppliers, while enhancing their marketing and inventory management capabilities.

The ~~accompanying~~Company’s unaudited ~~interim~~ condensed consolidated financial statements ~~include~~and accompanying notes have been prepared using generally accepted accounting principles in the ~~accounts~~United States (“GAAP”) and the interim reporting guidance of ~~BlueLinx Holdings Inc.~~the U.S. Securities and ~~its wholly owned subsidiaries (the “Company”~~Exchange Commission (“SEC”). ~~We derived the condensed~~The Company is composed of a single reportable segment for financial reporting purposes. The Company’s consolidated balance sheet ~~at April 1,~~as of December 30, 2023 contained herein was derived from the audited consolidated ~~financial statements~~balance sheet included in ~~our~~the Company’s Annual Report on Form 10-K for the fiscal year ended December ~~31, 2022~~30, 2023 (the ~~“Fiscal 2022~~“2023 Form 10-K”), as filed with the Securities and Exchange Commission (“SEC”) on February ~~21, 2023.~~20, 2024. In the opinion of ~~our~~the Company’s management, the unaudited condensed consolidated financial statements reflect all adjustments, which are of a normal recurring nature, necessary for a fair presentation of ~~our statements~~the Company’s results of operations and comprehensive income for the three months ended March 30, 2024 and April 1, 2023, ~~and April 2, 2022, our balance sheets at April 1, 2023~~financial condition as of March 30, 2024 and December ~~31, 2022, our statements of~~30, 2023, changes in stockholders’ equity for the three months ended March 30, 2024 and April 1, 2023, and ~~April 2, 2022, and our statements of~~ cash flows for the three months ended March 30, 2024 and April 1, ~~2023 and April 2, 2022.~~2023.

~~We have~~The Company has condensed or omitted certain notes and other information from the ~~interim~~unaudited condensed consolidated financial statements presented in this report. Therefore, these condensed ~~consolidated interim~~ financial statements and accompanying notes should be read in conjunction with the ~~Fiscal 2022~~Company’s 2023 Form 10-K. The results for the three months ended ~~April 1, 2023~~March 30, 2024 are not necessarily indicative of results that may be expected for the full fiscal year ending December ~~30, 2023,~~28, 2024, or any other interim period.

~~We operate~~The Company operates on a 5-4-4 fiscal ~~calendar. Our~~calendar and its fiscal year ends on the Saturday closest to December 3131st of ~~that~~each fiscal year and may comprise 53 weeks in certain years. ~~Our 2023 fiscal year~~Fiscal 2024 contains 52 weeks and ~~ends~~will end on December ~~30, 2023.~~28, 2024. Fiscal ~~2022~~2023 contained 52 weeks and ended on December ~~31, 2022.~~30, 2023.

~~Our~~The fair value of cash, cash equivalents, accounts receivable, accounts payable and accrued liabilities, to the extent the underlying liability will be settled in cash, approximates the carrying values because of the short-term nature of these instruments.

Use of Estimates

The preparation of financial statements ~~are prepared~~ in conformity with ~~U.S. generally accepted accounting principles (“U.S. GAAP”), which~~GAAP requires usthe Company’s management 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~~the Company’s 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~~management’s expectations, which could materially affect ~~our~~the Company’s results of operations and financial position.

~~Reclassification of Prior Period Presentation~~

For the quarter ended April 2, 2022, we have reclassified certain items within the presentation of our statement of cash flows to align with our statement of cash flows presentation for the quarter ended April 1, 2023. Our reclassifications are limited to the operating activities section and include presenting pension contributions, which were previously presented within the change of other assets and liabilities, as an individual item within changes in operating assets and liabilities. These reclassifications, we believe, provide an enhanced level of transparency with regards to the presentation of our statement of cash flows.

~~Recently Adopted Accounting Standards~~

~~Credit Impairment Losses.~~ In June 2016, the Financial Accounting Standards Board (the “FASB”) issued Accounting Standards Update (“ASU”) No. 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. The Company adopted this standard on a modified retrospective basis in the first quarter of 2022 and the implementation did not have a material impact to the Company’s condensed consolidated financial statements.

~~Reference Rate Reform.~~ In March 2020, the FASB issued ASU No. 2020-04, “Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting.” The standard provides temporary guidance to ease the potential burden in accounting for reference rate reform primarily resulting from the discontinuation of the publication of

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~~certain tenors~~Significant Accounting Policies

The Company has made no material changes to its significant accounting policies described in the notes to its consolidated financial statement included in its 2023 Form 10-K. The Company did not adopt any new accounting standards during the fiscal year ended December 30, 2023, or the three months ended March 30, 2024.

Recent Accounting Standards - Adoption Pending

Segment Reporting Improvements. On November 27, 2023, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2023-07, Segment Reporting—Improvements to Reportable Segment Disclosures (“ASU 2023-07”). The FASB issued the new guidance primarily to provide financial statement users with more disaggregated expense information about a public business entity’s (“PBE”) reportable segment(s). This ASU will require PBEs to provide incremental disclosures related to the entity’s reportable segment(s), including disclosures for expenses that are both 1) significant to each reportable segment and are provided regularly to the Chief Operating Decision Maker (“CODM”) or easily computed from information regularly provided to the CODM and 2) included in the reported measure of segment profit or loss used by the CODM to assess performance and allocate resources. If a PBE does not disclose any significant segment expenses for a reportable segment, it is required to disclose narratively the nature of the ~~London Inter-bank Offered Rate (“LIBOR”) on December 31, 2021, with complete elimination~~expenses used by the CODM to manage each segment’s operations. Under the provisions of this ASU, all of the ~~publication~~disclosures required in the segment guidance, including disclosing a measure of segment profit or loss used by the ~~LIBOR by June 30, 2023. The amendments in~~CODM and reporting significant segment expenses, applies to all PBEs, including those with a single operating or reportable segment. However, this ASU does not change the definition of a segment, the method for determining segments, or the criteria for aggregating operating segments into reportable segments. ASU 2023-07 will be effective for the Company’s annual reporting period for fiscal 2024 and all interim reporting periods beginning in fiscal 2025. At adoption, the disclosures are ~~elective~~retrospectively presented for all comparative periods presented. Since this new ASU addresses only disclosures, the Company does not expect the adoption of this ASU to have any material effects on its financial condition, results of operations or cash flows. The Company is currently evaluating any new disclosures that may be required upon adoption of ASU 2023-07.

Income Tax Disclosure Improvement. On December 14, 2023, the FASB issued ASU No. 2023-09, Improvements to Income Tax Disclosures (“ASU 2023-09”), which establishes new income tax disclosure requirements in addition to modifying and eliminating certain existing requirements. Under the new guidance, entities must consistently categorize and provide greater disaggregation of information in the rate reconciliation. They must also further disaggregate income taxes paid. The ASU’s disclosure requirements apply to all entities ~~that have contracts referencing the LIBOR.~~

subject to Accounting Standards Codification (“ASC”) No. 740, Income Taxes (“ASC 740”). The ~~Company’s revolving credit agreement, as further discussed~~overall objective of these disclosure requirements is for an entity, particularly an entity operating in ~~Note 6,~~ ~~Long-Term Debt~~,multiple jurisdictions, to ~~these condensed consolidated~~disclose sufficient information to enable users of financial statements ~~currently references~~to understand the ~~LIBOR for determining interest payable on current~~nature and ~~future borrowings~~magnitude of factors contributing to the difference between the effective tax rate and ~~includes provisions~~the statutory tax rate. ASU 2023-09 will be effective for the ~~use~~Company for the fiscal 2025 annual reporting period. Since this new ASU addresses only disclosures, the Company does not expect the adoption of ~~alternative rates if the LIBOR is unavailable. The guidance in~~ this ASU ~~provides a practical expedient which simplifies accounting analyses under current U.S. GAAP for contract modifications if the change is directly related~~ to ~~a change from the LIBOR to a new interest rate index.~~have any material effects on its financial condition, results of operations or cash flows. The Company ~~adopted this standard prospectively in the first quarter~~is currently evaluating any new disclosures that may be required upon adoption of 2022. The implementation did not have a material impact to the Company’s condensed consolidated financial statements or to any key terms of our revolving credit agreement other than the discontinuation of the LIBOR.ASU 2023-09.

2. ~~Business Combinations~~

On October 3, 2022, we acquired all the outstanding stock of Vandermeer Forest Products, Inc. (“Vandermeer”), a premier wholesale distributor of building products, for preliminary total consideration of $69.3 million. The acquisition has been accounted for as a business combination using the acquisition method. The assets acquired and liabilities assumed were recognized at their acquisition date fair values. The acquisition accounting, including fair value estimations, is subject to change as we finalize all assessments of the assets and liabilities that were acquired on the acquisition date. The primary area of the preliminary acquisition accounting that is not yet finalized relates to settlement of the holdback liability.

As of the date of the acquisition, the holdback liability was $6.3 million. During the quarter-ended April 1, 2023, $0.3 million of the holdback liability was returned to the Company for adjustments related to final cash and working capital balances, reducing preliminary total consideration from $69.3 million to $69.0 million. The remaining holdback liability of $6.0 million is scheduled to be settled approximately 18 months after the acquisition date.

3. Inventories

~~Our~~The Company’s inventories consist almost entirely of finished goods inventory, with ~~an immaterial~~a very limited amount of work-in-process inventory. The cost of all inventories is determined by the moving average cost method. ~~We have~~The Company included all material charges directly incurred in bringing inventory to its existing condition and ~~location. We evaluate our~~location, including the cost of inbound freight, volume incentives, inventory adjustments, tariffs, duties and other import fees. The Company evaluates its inventory value at the end of each quarter to ensure that inventory, when viewed by category, is carried at the lower of cost or net realizable value, which also considers items that may be considered damaged, excess, and obsolete inventory.

As of ~~April 1, 2023, we~~March 30, 2024, the Company assessed the carrying value of ~~our~~its inventory and determined it was presented at the lower of cost or net realizable value and that a reserve was not necessary. As of December 30, 2023, the Company also had no such inventory reserve.

AsSubstantially all of ~~December 31, 2022, we recorded~~the amount reported in Cost of products sold on the Company’s consolidated statement of operations is composed of costs incurred to purchase inventory that is subsequently resold to customers, including costs related to import duties and tariffs. Import duties and tariffs are not typically passed through to customers as separately billed charges. Certain import duties are classified by the U.S. Department of Commerce (the “Commerce Department”) as “antidumping or countervailing duties,” and these duties may be subject to periodic review and adjustments by the Commerce Department through a ~~lower of cost or net realizable value reserve of $2.6 million~~process known as a trade remedy administrative review, which can result in both retroactive and prospective adjustments to duty rates. At the time of importation, the ~~decrease in~~Company tenders antidumping duty and countervailing duty cash deposits (as use of that term has been defined by the ~~value of our structural lumber and panel inventory related~~Commerce Department) to the ~~decline in wood-based commodity prices as of the end of the period.~~

~~4. Goodwill~~U.S. Customs and ~~Other Intangible Assets~~

In connection with our past merger and acquisition activity, we acquired certain intangible assets. As of April 1, 2023, 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 April 1, 2023, goodwill was $55.4 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 willevaluate 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 ourBorder Protection (“U.S.

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~~market capitalization. No such indicators~~Customs”) and accounts for duties and tariffs based on the then-current rates in effect, and records any retroactive adjustments in the period in which U.S. Customs determines final duty rates at the time entries subject to antidumping and countervailing duties liquidate (as use of that term has been defined by the Commerce Department), typically through the resolution of a trade remedy administrative review proceeding. During the three months ended March 30, 2024, the Company received refunds of $16.9 million, plus interest of $2.0 million, related to retroactive adjustments associated with certain antidumping duties for imported wood moulding and millwork products. The antidumping duty cash deposits were ~~present during~~originally paid and accounted for by the ~~first quarter~~Company in prior reporting periods at the then-current rates. Impacted inventories have since been sold. These adjustment amounts are reflected in Costs of ~~fiscal 2023. Our~~products sold and Interest expense, net, respectively, on the Company’s unaudited condensed consolidated statement of operations for the three months ended March 30, 2024. See Note 9, Commitments and Contingencies, for disclosure concerning another matter related to import duties.

3. Goodwill and Other Intangible Assets

As a result of merger and acquisition activities, the Company’s consolidated balance sheet reflects goodwill along with other intangible assets for customer relationships, noncompete agreements, and trade names. As of March 30, 2024, the only changes since December 30, 2023 were for amortization of intangible assets.

Goodwill

The Company does not amortize its goodwill but must assess its goodwill for impairment at least annually, either quantitatively or qualitatively. Under GAAP, goodwill is assessed at the reporting unit level. Since the Company is composed of one reporting unit, ~~has a~~the Company’s goodwill is assessed at the enterprise level. The most recent scheduled annual impairment assessment for goodwill was conducted quantitatively as of October 1, 2023. Based on that assessment, the Company’s management, with the assistance of an independent expert, concluded that goodwill was not impaired, meaning the fair value ~~that exceeds its~~of the enterprise exceeded the carrying value as of ~~April 1, 2023.~~the enterprise, including goodwill.

~~The following table provides information related~~In addition to the annual impairment assessments described above, the Company will assess for impairment between the annual impairment assessments if events occur, or circumstances materially change, that indicate a potential goodwill impairment may exists. During the three months ended March 30, 2024, the Company did not note any indicators of potential impairment for its goodwill.

As of March 30, 2024 and December 30, 2023, the carrying ~~amount~~value of ~~our goodwill:~~the Company’s goodwill was $55.4 million.


	~~Total Carrying Amount~~
	~~(In thousands)~~
~~Balance at December 31, 2022~~	$	~~55,372~~
~~Acquisitions~~	—
~~Balance at April 1, 2023~~	$	~~55,372~~

Definite-Lived Intangible Assets

The gross carrying amounts, accumulated amortization, and net carrying amounts of ~~our~~the Company definite-lived intangible assets at ~~April 1, 2023~~March 30, 2024 were as follows:


Intangible Asset	Intangible Asset	Weighted Average Remaining Useful Lives (Years)	Gross Carrying Amounts		Accumulated Amortization(1)		Net Carrying Amounts
			(In thousands)
Intangible Asset
Intangible Asset
			($ in thousands)
			($ in thousands)
			($ in thousands)
Customer relationships
Customer relationships
Customer relationships	Customer relationships	10	$	48,500	$	(16,084)	$	32,416
Noncompete agreements	Noncompete agreements	5	8,954		(8,324)		630
Noncompete agreements
Noncompete agreements
Trade names	Trade names	3	7,826		(6,993)		833
Trade names
Trade names
Total
Total
Total	Total		$	65,280	$	(31,401)	$	33,879

(1) Intangible assets except customer relationships are amortized on straight line basis. Certain of our customer relationships are amortized on a double declining balance method and certain others are amortized on a straight line basis.

Amortization Expense

Amortization expense for ~~our~~ definite-lived intangible assets was ~~$1.1~~approximately $1.0 million and $1.1 million for the ~~three-month periods~~three-months ended March 30, 2024 and April 1, 2023, ~~and April 2, 2022,~~ respectively.

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Estimated amortization expense for definite-lived intangible assets for the remaining portion of ~~2023~~2024 and the next five fiscal years is as follows:


Fiscal Year	Fiscal Year		Estimated Amortization		Fiscal Year	Estimated Amortization
			(In thousands)
2023			$	3,113
		(In thousands)					(In thousands)
2024	2024		3,930
2025	2025		3,765
2026	2026		3,471
2027	2027		3,340
2028	2028		3,340
2029

5.4. Revenue Recognition

We recognize revenue when 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 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, 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 ten 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~~the Company’s revenues disaggregated by ~~revenue source.~~product type. Sales and usage-based taxes are excluded from revenues.

Three Months Ended

Product type

April 1, 2023

April 2, 2022

Product type

March 30, 2024

April 1, 2023

(In thousands)

Specialty products

567,838

767,907

Structural products

230,066

534,398

Total net sales

797,904

1,302,305

The following table presents ~~our~~the Company’s revenues disaggregated by sales channel. Sales and usage-based taxes are excluded from revenues.


	Three Months Ended
Sales channel	March 30, 2024		April 1, 2023
	(In thousands)
Warehouse and reload	$	591,768	$	686,632
Direct	149,750		127,095
Customer discounts and rebates	(15,274)		(15,823)
Total net sales	$	726,244	$	797,904

Warehouse sales are delivered from ~~our~~Company warehouses. Reload sales are similar to warehouse sales but are shipped from warehouses, most of which are operated by ~~third-parties,~~third parties, where ~~we store~~the Company stores 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~~Company warehouses, and to distribute large volumes of imported products from port facilities. Direct sales are shipped from the manufacturer to the customer without ~~our~~the Company 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~~channels but require lower amount of committed capital and fixed costs. ~~Sales and usage-based taxes are excluded from revenues.~~

Three Months Ended
Sales channel April 1, 2023 April 2, 2022
(In thousands)
Warehouse and reload $ 686,632 $ 1,077,946
Direct 127,095 246,652
Customer discounts and rebates (15,823) (22,293)
Total net sales $ 797,904 $ 1,302,305

Performance obligations in contracts with customers generally consist solely of delivery of goods.

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~~6. Long-Term~~5. Debt and Finance Leases

As of ~~April 1, 2023~~March 30, 2024 and December ~~31, 2022, long-term~~30, 2023, outstanding debt and finance leases consisted of the following:


		April 1, 2023		December 31, 2022
		(In thousands)
	March 30, 2024						March 30, 2024	December 30, 2023
						(In thousands)
Senior secured notes (1)	Senior secured notes (1)	$	300,000	$	300,000
Revolving credit facility (2)	Revolving credit facility (2)	—		—

Finance lease obligations (3)	Finance lease obligations (3)	270,764		273,075
		570,764		573,075
Finance lease obligations (3)
Finance lease obligations (3)
	592,067
Unamortized debt issuance costs	Unamortized debt issuance costs	(3,854)		(4,057)
Unamortized bond discount costs	Unamortized bond discount costs	(3,393)		(3,519)
		563,517		565,499
Less: current maturities of long-term debt		5,087		7,089
Long-term debt, net of current maturities		$	558,430	$	558,410
	586,140
Less: current portions of finance lease obligations
Total debt and finance lease obligations, net of current portions

(1)As of ~~April 1, 2023~~March 30, 2024 and December ~~31, 2022, our~~30, 2023, long-term debt was comprised of $300.0 million of senior secured notes issued in October 2021. These notes are presented under the long-term debt caption of our ~~condensed~~ consolidated balance sheets at ~~$292.8~~$294.1 million and ~~$292.4~~$293.7 million ~~at April 1, 2023~~as of March 30, 2024 and December ~~31, 2022,~~30, 2023, respectively. This presentation is net of ~~their~~ discount of ~~$3.4~~$2.9 million and ~~$3.5~~$3.0 million and the combined carrying value of ~~our~~ debt issuance costs of ~~$3.9~~$3.0 million and ~~$4.1~~$3.2 million ~~at April 1, 2023~~as of March 30, 2024 and December ~~31, 2022,~~30, 2023, respectively. ~~Our~~The senior secured notes are presented in ~~this~~the above table at ~~their~~ face ~~value.~~value and have an annual interest rate of 6.0% through maturity.

(2) ~~The average effective interest rate for our~~No borrowings were outstanding on this revolving credit facility during the three months ended March 30, 2024 or fiscal year 2023. Available borrowing capacity under this revolving credit facility was ~~zero percent for the quarters ended April 1, 2023~~$346.5 million as of March 30, 2024 and ~~April 2, 2022.~~December 30, 2023. The available borrowing capacity reflects undrawn letters of credit.

(3) Refer to Note 9,8, ~~Leases~~Lease Commitments, for interest rates associated with finance lease obligations.

Interest expense, net on the Company’s unaudited condensed consolidated statements of operations for the three months ended March 30, 2024 and April 1, 2023 consists of interest expense of $13.1 million and $11.3 million, respectively, and interest income of $8.5 million and $3.6 million, respectively. Interest expense reflects amortization of debt issuance costs and bond discount costs of $0.3 million and $0.3 million for first quarter 2024 and first quarter 2023, respectively. Included in interest income for the three months ended March 30, 2024 is $2.0 million received with refunds from U.S. Customs for antidumping import duties (see Note 2, Inventories). Interest expense for the three months ended March 30, 2024 also includes $1.6 million of accrued estimated interest expense related to import duties that the Company believes it may owe (see Note 9, Commitments and Contingencies).

Senior Secured Notes

In October 2021, wethe Company and certain subsidiaries completed a private offering of $300.0 million of ~~our six~~6.0% percent senior secured notes due 2029 (the “2029 Notes”), and in connection therewith we entered into an indenture (the “Indenture”) with the subsidiary guarantors ~~party thereto~~ and Truist Bank, as trustee and collateral agent. The 2029 Notes were issued to investors at ~~98.625 percent~~98.625% of their principal ~~amount~~amount. The 2029 Notes are secured by a first-priority security interest in substantially all of the Company’s assets, other than accounts receivables, inventory, deposit accounts, securities accounts, business interruption insurance and ~~will~~other related assets. The 2029 Notes are scheduled to mature on November 15, ~~2029. The majority~~2029, however at the sole discretion of ~~net proceeds from~~ the ~~offering of~~Company, the notes may be redeemed, in whole or in part, prior to scheduled maturity. Early redemptions made by the Company prior to November 15, 2026 would require the Company to pay a redemption premium, as defined in the Indenture. Interest expense for the 2029 Notes ~~were used to repay borrowings under our revolving credit facility, as defined below.~~totaled $4.5 million for the three months ended March 30, 2024 and April 1, 2023.

As of ~~April 1, 2023~~March 30, 2024 and December ~~31, 2022,~~30, 2023, the fair value of ~~our~~the Company’s 2029 Notes was approximately ~~$276.8~~$291.9 million and ~~$283.6~~$273.2 million, respectively, which were estimated from inputs that are designated as Level 2 in the fair value hierarchy. ~~Our~~The Company’s valuation technique is based primarily on observable market prices in less active markets.

Revolving Credit Facility

~~Our Revolving~~

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In April 2018, the Company and certain subsidiaries entered into the Amended and Restated Credit ~~Facility, entered into~~Agreement for a revolving credit facility with Wells Fargo Bank, National Association, as administrative agent (“the Agent”), and certain other financial ~~institutions party thereto,~~institutions. In August 2021, the Company entered into a second amendment to this revolving credit facility to, among other things, extend the maturity date of the facility to August 2, 2026, and reduce the interest rate on borrowings under the facility, and in June 2023, the Company entered into a third amendment to this revolving credit facility to, among other things, replace the interest rate based on the London interbank offered rate (“LIBOR”) thereunder with an interest rate based on the secured overnight financing rate (“SOFR”) and a customary spread adjustment (as amended, the “Revolving Credit Facility”). In October 2021, in conjunction with the offering of the 2029 Notes, the Company reduced the credit limit of the Revolving Credit Facility from $600.0 million to $350.0 million. The Revolving Credit Facility provides for a senior secured asset-based revolving loan and letter of credit facility of up to $350.0 ~~million. Our~~million, as amended. The obligations under the Revolving Credit Facility are secured by a security interest in substantially all of ~~our~~the Company’s and ~~our~~its subsidiaries’ assets (other than real property), including inventories, accounts receivable, and proceeds from those ~~items.~~items, under the Amended and Restated Guaranty and Security Agreement.

~~Borrowings~~

From and after June 30, 2023, borrowings under ~~our~~the Revolving Credit Facility bear interest at a rate per annum equal to (i) ~~LIBOR~~Adjusted Term SOFR (calculated as SOFR plus 0.1%) plus a margin ranging from 1.25 percent to 1.75 percent, with the margin determined based upon average excess availability for the immediately preceding fiscal quarter for loans based on ~~LIBOR,~~SOFR, or (ii) the Agent’s base rate plus a margin ranging from 0.25 percent to 0.75 percent, with the margin based upon average excess availability for the immediately preceding fiscal quarter for loans based on the base rate.

Borrowings under ~~our~~the Revolving Credit Facility are subject to availability under the Borrowing Base (as that term is defined in the revolving credit agreement). The ~~Borrowers are~~Company would be required to repay ~~revolving loans thereunder~~the Revolving Credit Facility to the extent that such revolving ~~loans~~borrowings exceed the ~~Borrowing Base~~borrowing base then in effect. ~~Our~~The Revolving Credit Facility may be prepaid in whole or in part from time to time without penalty or premium but including all breakage costs incurred by any lender thereunder.

As of ~~April 1,~~March 30, 2024, the Company had zero outstanding borrowings and excess availability, including cash in qualified accounts, of $827.8 million under our Revolving Credit Facility. As of December 30, 2023, we had zero outstanding borrowings and excess availability, including cash in qualified accounts, of ~~$722.7 million under our Revolving Credit Facility. As of December 31, 2022, we had zero outstanding borrowings and excess availability, including cash in qualified accounts, of $645.4~~$868.2 million under our Revolving Credit Facility. Available borrowing capacity under our Revolving Credit Facility was $346.5 million on ~~April 1, 2023~~March 30, 2024 and $346.5 million December ~~31, 2022. Our average effective interest rate under the facility was zero percent for the quarters ended April 1, 2023 and April 2, 2022.~~30, 2023.

Debt Covenants

~~Our~~The Revolving Credit Facility ~~contains certain financial~~ and ~~other~~the 2029 Notes contain various covenants and ~~our~~restrictions, including customary financial covenants. The Company’s right to ~~borrow under~~make draws on the Revolving Credit Facility ismay be conditioned upon, among other things, ~~our~~ compliance with these covenants. ~~We were~~The Company was in compliance with all covenants ~~under our Revolving Credit Facility~~ as of ~~April 1,~~March 30, 2024 and December 30, 2023.

These covenants also limit the Company’s ability to, among other things: incur additional debt; grant liens on assets; make investments; repurchase stock; pay dividends and make distributions; sell or acquire assets, including certain real estate assets, outside the ordinary course of business; engage in transactions with affiliates; and make fundamental business changes.

Finance Lease Obligations

~~Our~~The Company’s finance lease liabilities consist of leases related to equipment and vehicles, and real estate, with the majority of those finance leases related to real estate. For more information on our finance lease obligations, refer to Note 9,8, ~~Leases~~Lease Commitments.

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

As previously disclosed, effective December 5, 2023, the Company settled its noncontributory defined benefit pension plan (the “DB Plan”) by purchasing an irrevocable nonparticipating annuity contract with an insurance company (the “buy-out contract”). The ~~following table shows~~buyout contract met the ~~components~~requirements for a settlement, as that term is defined in ASC No. 715, Compensation-Retirement Benefits, and the DB Plan and Company, as sponsor, were relieved of ~~our~~primary responsibility for the benefits obligations. Prior to settlement, during the three months ended April 1, 2023 the Company incurred the following net periodic pension ~~cost (benefit):~~cost:

Three Months Ended
Pension-related items April 1, 2023 April 2, 2022
(In thousands)
Service cost (1)
$ — $ —
Interest cost on projected benefit obligation 1,104 606
Expected return on plan assets (812) (1,177)
Amortization of unrecognized gain 302 209
Net periodic pension cost (benefit) $ 594 $ (362)


	Three Months Ended
	April 1, 2023
	(In thousands)
Service cost (1)	$	—
Interest cost on projected benefit obligation	1,104
Expected return on plan assets	(812)
Amortization of unrecognized gain	302
Net periodic pension cost	$	594

(1) Service cost iswas not a part of ~~our~~ net periodic pension benefit ~~as our~~since the pension plan iswas frozen for all participants.

The net periodic pension cost ~~(benefit)~~ is included in other expense, net in ~~our~~the Company’s unaudited condensed consolidated statement of operations and comprehensive income.

7. Share-Based Compensation

During the three months ended March 30, 2024 and April 1, 2023, the Company incurred stock compensation expense of $2.4 million and $4.6 million, respectively. Stock compensation expense for the three months ended April 1, 2023 we continued our previously announced plan to terminate the BlueLinx Corporation Hourly Retirement Plan (the “plan”) and transfer the management and delivery of continuing benefits associated with the plan to a highly rated and qualified insurance company with pension termination experience. The process for terminating a pension plan involves several regulatory steps and approvals, and typically takes 12 to 18 months to complete. We estimate the plan termination will be completed during fiscal 2023.

~~8. Stock Compensation~~

During the three months ended April 1, 2023 and April 2, 2022, we incurred stock compensation expense of $4.6 million and $2.2 million, respectively. The increase in our stock compensation expense for the three-month period is primarily attributable toincluded the acceleration of unrecognized compensation cost in conjunction with ~~our~~ announced leadership ~~transition. Additionally, there was an increase~~transitions that occurred in ~~the number of awards granted, as well as the increase in the grant-date fair value, or the Company’s stock price, of awards currently vesting compared to the prior year.~~2023.

As of April 1, 2023, ~~we have accrued~~ $1.3 million was accrued for tax withholding obligations of ~~our~~the Company’s employees upon vesting of restricted stock unit awards. This ~~has been~~was presented as a non-cash transaction in ~~our~~the Company’s unaudited condensed consolidated statement of cash flows.

108. Lease Commitments

~~9. Leases~~

~~We have~~The Company has operating and finance leases for certain of ~~our~~its distribution facilities, office space, land, mobile fleet, and equipment. Many of ~~our~~these leases are non-cancelable and typically have a defined initial lease term, and some provide options to renew at ~~our~~the Company’s election for specified periods of time. The majority of ~~our~~these leases have remaining lease terms of one to 15 years, some of which include one or more options to extend the leases for typically five years. ~~Our~~The Company’s leases generally provide for fixed annual rentals. Certain ~~of our~~ leases include provisions for escalating rent based on, 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 usthe Company to pay taxes, insurance, and maintenance expenses associated with the leased assets. ~~Our~~The lease agreements do not contain any material residual value guarantees or material restrictive covenants.

~~We determine~~The Company determines if an arrangement is a lease at inception and ~~assess~~assesses 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~~Company’s consolidated balance sheets. Finance lease ROU assets are included in property and equipment and the finance lease obligations are presented separately in the ~~condensed~~Company’s consolidated balance sheets. When a lease does not provide an implicit interest rate, ~~we use our~~the Company uses its incremental borrowing rate based on the information available at the commencement date in determining the present value of future payments. ~~We have~~The Company has also made the accounting policy election to not separate lease components from non-lease components related to our mobile fleet asset class.

~~Finance Lease Liabilities~~

~~Our~~

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The Company’s finance lease liabilities consist of leases related to equipment and vehicles, and real estate. ~~As noted in the table below, a~~A majority of ~~our~~the Company’s finance ~~leases, formally known as capital~~ leases relate to real estate. During fiscal 2017 and fiscal 2018, the Company entered into real estate financing transactions on certain of its warehouse facilities. These transactions were completed pursuant to sale-leaseback arrangements, and upon their completion, the Company entered into long-term leases on the properties having renewal options. The Company accounted for these transactions in accordance with the ASC 840, Leases, which was the lease accounting standard in effect for the Company at the inception of these arrangements. The Company recorded these transactions as finance lease liabilities on its consolidated balance sheet. Gains on these sale-leaseback transactions were deferred and are being recognized into the Company’s earnings. As of March 30, 2024 and December 30, 2023, the remaining unrecognized deferred gains related to these transactions were $69.6 million and $70.5 million, respectively, and these deferred gains are being recognized in earning on a straight-line basis. During the first quarters of fiscal 2024 and 2023, the Company recognized $1.0 million of these deferred gains in each quarter.

The following table presents ~~our~~the assets and liabilities related to ~~our~~the Company’s leases as of ~~April 1, 2023~~March 30, 2024 and December ~~31, 2022:~~30, 2023:

Lease assets and liabilities

April 1, 2023

December 31, 2022

Lease assets and liabilities

March 30, 2024

December 30, 2023

(In thousands)

Assets

Classification

Operating lease right-of-use assets

43,548

45,717

Finance lease right-of-use assets (1)

Property and equipment, net

130,659

132,748

Total lease right-of-use assets

174,207

178,465

Liabilities

Current portion

Liabilities

Current portion:

Operating lease liabilities

Operating lease liabilities - short term

6,756

7,432

Finance lease liabilities

Finance lease liabilities - short term

5,087

7,089

Non-current portion

Non-current portion:

Operating lease liabilities

Operating lease liabilities - long term

38,142

40,011

Finance lease liabilities

Finance lease liabilities - long term

265,677

265,986

Total lease liabilities

315,662

320,518

(1) Finance lease right-of-use assets are presented net of accumulated amortization of ~~$88.9~~$102.4 million and ~~$90.1~~$102.9 million as of ~~April 1, 2023~~March 30, 2024 and December ~~31, 2022,~~30, 2023, respectively.

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The components of lease expense were as follows:

Three Months Ended

Components of lease expense

April 1, 2023

April 2, 2022

Components of lease expense

March 30, 2024

April 1, 2023

(In thousands)

Operating lease cost:

Operating lease cost

2,918

2,517

Sublease income

(578)

(652)

Total operating lease costs

2,340

1,865

Finance lease cost:

Amortization of right-of-use assets

2,089

3,710

Interest on lease liabilities

6,044

6,160

Total finance lease costs

8,133

9,870

Supplemental cash flow information related to leases was as follows:

Three Months Ended

Cash flow information

April 1, 2023

April 2, 2022

Cash flow information

March 30, 2024

April 1, 2023

(In thousands)

Cash paid for amounts included in the measurement of lease liabilities

(In thousands)

Cash paid for amounts included in the measurement of lease liabilities:

Operating cash flows from operating leases

3,458

2,528

Operating cash flows from finance leases

6,044

6,160

Financing cash flows from finance leases

2,133

3,722

Non-cash supplemental cash flow information related to leases was as follows:


	Three Months Ended
Non-cash information	March 30, 2024		April 1, 2023		~~April 2, 2022~~

	(In thousands)
Right-of-use assets obtained in exchange for lease ~~obligations~~obligations:
Operating leases	$	—	$	—
Finance leases	$	—8,177	$	—

1213

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Supplemental balance sheet information related to leases was as follows:


Balance sheet information	Balance sheet information	April 1, 2023			December 31, 2022			Balance sheet information		March 30, 2024					December 30, 2023
		(In thousands)
	($ in thousands)																($ in thousands)
Finance leases	Finance leases
Property and equipment
Property and equipment
Property and equipment	Property and equipment	$	219,572		$	222,839		$	243,920				$	241,276
Accumulated depreciation	Accumulated depreciation	(88,913)			(90,091)			Accumulated depreciation		(102,350)					(102,919)
Property and equipment, net	Property and equipment, net	$	130,659		$	132,748		Property and equipment, net		$	141,570				$	138,357
Weighted Average Remaining Lease Term (in years)	Weighted Average Remaining Lease Term (in years)
Operating leases	Operating leases	9.28			9.21
Operating leases
Operating leases										8.97					8.88
Finance leases	Finance leases	13.78			13.97			Finance leases		18.35					19.94
Weighted Average Discount Rate	Weighted Average Discount Rate
Operating leases	Operating leases	8.61		%	8.54		%
Operating leases
Operating leases										8.79		%			8.74		%
Finance leases	Finance leases	8.89		%	8.87		%	Finance leases		8.85		%			8.84		%

The major categories of ~~our~~the Company’s finance lease liabilities as of ~~April 1, 2023~~March 30, 2024 and December ~~31, 2022~~30, 2023 are as follows:

Category

March 30, 2024

December 30, 2023

(In thousands)

Equipment and vehicles

27,162

29,300

Real estate

243,602

243,775

Total finance leases

270,764

273,075

~~Under the short-term lease exception provided within ASC 842, we do not record a lease liability or right-of-use asset for any leases that have a lease term of 12 months or less at commencement.~~ Below is a summary of undiscounted finance and operating lease liabilities that have initial terms in excess of one year as of ~~April 1, 2023.~~March 30, 2024. The table also includes a reconciliation of the future undiscounted cash flows to the present value of the finance and operating lease liabilities included in the unaudited condensed consolidated balance ~~sheets,~~sheet, including options to extend lease terms that are reasonably certain of being exercised.


Fiscal year	Fiscal year	Operating leases		Finance leases		Fiscal year	Operating leases	Finance leases
		(In thousands)
2023		$	7,724	$	21,147
	(In thousands)								(In thousands)
2024	2024	10,072		31,836
2025	2025	8,756		28,988
2026	2026	5,460		32,553
2027	2027	4,217		26,970
2028
Thereafter	Thereafter	31,519		524,869
Total lease payments	Total lease payments	$	67,748	$	666,363
Less: imputed interest	Less: imputed interest	(22,850)		(395,599)
Total	Total	$	44,898	$	270,764

~~10.~~

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9. Commitments and Contingencies

~~Environmental~~Regulatory Matters

Government and ~~Legal~~regulatory agencies may have the ability to conduct routine audits and periodic examinations of, and administrative proceedings regarding, the Company’s business operations. As previously disclosed, U.S. Customs gathered initial information from the Company under routine audit procedures, and the information indicated that the Company potentially underpaid duties in prior periods arising from certain classification discrepancies for products imported into the United States as separately entered shipments. In working with the U.S. Customs, the Company has exercised reasonable care to address this matter in an equitable and expeditious manner through the filing of a prior disclosure submission with U.S. Customs and now estimates that it will be required to pay approximately $10.4 million, excluding any interest. The Company accrued this estimated amount in the first quarter of 2024 and it is reflected in Other current liabilities and in Costs of products sold on the Company’s unaudited condensed consolidated balance sheet and unaudited condensed consolidated statement of operations as of and for the three months ended March 30, 2024. See Note 2, Inventories, for disclosure concerning another matter related to import duties.

Environmental Matters

From time to time, ~~we are~~the Company is involved in various proceedings incidental to ~~our businesses,~~its business and ~~we are~~the Company is subject to a variety of environmental and pollution control laws and regulations in all jurisdictions in which ~~we operate.~~it operates. Although the ultimate outcome of these proceedings cannot be determined with certainty, based on presently available information, ~~management~~

the Company believes that adequate ~~reserves~~liabilities have been ~~established~~accrued for probable losses with respect thereto and receivables ~~have been~~ recorded for expected receipts from settlements. ~~Management~~The Company further believes that, while the ultimate outcome of ~~one or more of~~ these matters could be material to ~~our operating~~the Company’s financial position, results of operations and cash flows in any given ~~quarter, it~~reporting period, they will not have a materially adverse effect on ~~our consolidated~~the Company’s long-term financial condition, ~~our~~ results of operations, or ~~our~~ cash flows.

Collective Bargaining Agreements

As of ~~April 1, 2023, we employed~~March 30, 2024, approximately ~~2,100 associates and less than one percent~~20% of ~~our associates are employed on a part-time basis. Approximately 16 percent of our associates are~~the Company’s employees were represented by various local labor unions with terms and conditions of employment governed by Collective Bargaining Agreements (“CBAs”). ~~Four~~ ThreeCBAs covering approximately ~~four percent~~3.5% of ~~our associates~~the Company’s employees are up for renewal in the remainder of fiscal ~~2023,~~2024, of which ~~we expect~~one has already been renegotiated, one is currently under negotiations, and one is expected to ~~renegotiate by the end of fiscal 2023.~~be renegotiated before their renewal dates.

~~11.~~ 10. Accumulated Other Comprehensive Loss

~~Comprehensive income includes both net income~~As of March 30, 2024 and December 30, 2023, the Company had no accumulated other comprehensive ~~income. Other comprehensive~~ income ~~results from items deferred from recognition into our condensed consolidated statements~~or loss. As of ~~operations and comprehensive income. Accumulated other comprehensive loss is separately presented on our condensed consolidated balance sheets as part of stockholders’ equity.~~

~~The changes in balances for each component~~April 1, 2023, the components of accumulated other comprehensive loss ~~for the three months ended April 1, 2023,~~ were as follows:

Defined
benefit pension
plan, net of tax Other,
net of tax Total Accumulated Other Comprehensive Loss
December 31, 2022, beginning balance $ (32,675) $ 1,263 $ (31,412)
Other comprehensive income, net of tax 239 (11) 228
April 1, 2023, ending balance, net of tax $ (32,436) $ 1,252 $ (31,184)


	Defined Benefit Pension Plan, Net of Tax		Other		Total Accumulated Other Comprehensive Loss, Net of Tax



April 1, 2023 balance	$	(32,436)	$	1,252	$	(31,184)

~~12.~~11. Income Taxes

Effective Income Tax Rate

~~Our~~The Company’s effective tax rate for the three months ended March 30, 2024 and April 1, 2023 was 24.1 percent and ~~April 2, 2022 was~~ 26.5 percent, ~~and 26.2 percent,~~ respectively. For the full fiscal year ending December 28, 2024, the Company estimates that its annual effective income tax rate will be approximately 26%.

~~Our~~The Company’s effective tax rates for the three months ended March 30, 2024 and April 1, 2023 ~~and April 2, 2022~~ were impacted by the permanent addback of certain nondeductible expenses, including meals and entertainment and executive compensation, slightly offset by a benefit from the vesting of restricted stock units, which occurred during each period. ~~For additional information about our~~Additionally, the effective income ~~taxes, see Note 8 of our Annual Report on Form 10-K~~tax rate for the ~~fiscal year~~three months ended ~~December 31, 2022.~~March 30, 2024 was impacted by a partial release of the valuation allowance for deferred income tax assets due to a state income tax adjustment.

~~13. Income~~

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12. Earnings Per Share and Stockholders' Equity

Earnings Per Share

~~We calculate~~The Company calculates basic ~~income~~earnings per share by dividing net income byfor the ~~weighted average number of common shares outstanding. We calculate diluted income per share using the treasury stock method, by dividing net income~~period by the weighted average number of common shares outstanding for the period. For rounding purposes when calculating earnings per share, the Company’s policy is to round down to the whole cent.

Diluted earnings per share are calculated using the treasury stock method whereby net income for the period is divided by the weighted average number of common shares outstanding for the period plus the dilutive effect, if any, of ~~outstanding~~shares of stock associated with unvested share-based ~~awards, including restricted stock units.~~

grants. However, for performance-based share-based grants, the dilutive effect is included only for grants where the performance goals have been actually achieved.

The reconciliation of basic net income and diluted net ~~income~~earnings per common share for the three-month periods ended March 30, 2024 and April 1, 2023 ~~and April 2, 2022~~ were as follows:

Three Months Ended
April 1, 2023 April 2, 2022
(In thousands, except per share data)
Net income $ 17,812 $ 133,409
Weighted-average shares outstanding - basic 9,059 9,720
Dilutive effect of share-based awards 98 393
Weighted-average shares outstanding - diluted 9,157 10,113
Basic income per share $ 1.96 $ 13.72
Diluted income per share $ 1.94 $ 13.19


	Three Months Ended
	March 30, 2024		April 1, 2023
	(In thousands, except per share data)

Net income	$	17,492	$	17,812

Weighted average shares outstanding - Basic	8,653		9,059
Dilutive effect of share-based awards	88		98
Weighted average shares outstanding - Diluted	8,741		9,157

Basic earnings per share	$	2.02	$	1.96
Diluted earnings per share	$	2.00	$	1.94

Approximately ~~78,000~~114,000 and ~~3,000~~78,000 weighted-average share-based awards were excluded from the computation of earnings per share assuming dilution during the three months ended March 30, 2024 and April 1, 2023, ~~and April 2, 2022,~~ respectively, as the awards would have been anti-dilutive for the periods presented.

Share Repurchases

2023 Authorization

On October 31, 2023, the Company’s board of directors authorized a new share repurchase program for $100 million. Under the new share repurchase program, the Company may repurchase its common stock from time to time, without prior notice, subject to prevailing market conditions and other considerations. Repurchases may be made through a variety of methods, which may include open market purchases, privately negotiated transactions, accelerated share repurchase programs, tender offers or pursuant to a trading plan that may be adopted in accordance with the Securities and Exchange Commission Rule 10b5-1.

During the three months ended March 30, 2024, the Company did not repurchase any of its common shares. As of March 30, 2024, there remained $91.4 million repurchase capacity under this authorization.

2021/2022 Authorization

On August 23, 2021, the Company’s board of directors approved a stock repurchase program that authorized the Company to repurchase up to $25.0 million of its common stock. On May 3, 2022, the Company’s board of directors increased the share repurchase authorization to $100 million. During the three months ended April 1, 2023, the Company did not repurchase any shares of its common stock under the 2021/2022 authorization. Between April 2023 and October 2023, the Company exhausted the remaining available capacity under the 2021/2022 authorization.

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

~~About Our Business~~

~~BlueLinx is a leading wholesale distributor~~Cautionary Statement Concerning Forward-Looking Statements

This Quarterly Report on Form 10-Q (“Quarterly Report” or “Form 10-Q”) contains forward-looking statements. Forward-looking statements include, without limitation, any statements that predict, forecast, indicate or imply future results, performance, liquidity levels or achievements, and may contain the words “believe,” “anticipate,” “could,” “expect,” “estimate,” “intend,” “may,” “project,” “plan,” “should,” “will,” “will be,” “will likely continue,” “will likely result” “would,” or words or phrases of ~~residential~~similar meaning. Forward-looking statements are based on estimates and ~~commercial building products~~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. The forward-looking statements in this report include statements about 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; liquidity and capital resources; our confidence in the ~~United States. We are a “two-step” distributor. Two-step distributors purchase products from manufacturers~~Company’s long-term growth strategy; our ability to capitalize on supplier-led price increases and ~~distribute those products to dealers~~our value-added services; our areas of focus and ~~other suppliers in local markets, who then sell those products to end users. We carry a broad portfolio of both branded~~management initiatives; the demand outlook for construction materials and private-label stock keeping units (“SKUs”) across two principal product categories: specialty products and structural products. Specialty products include items such as engineered wood, siding, millwork, outdoor living, specialty lumber and panels, and industrial products. Structural products include items such as lumber, plywood, oriented strand board, rebar, and remesh. We also provide a wide range of value-added services and solutions aimed at relieving distribution and logistics challenges for our customers and suppliers, while enhancing their marketing and inventory management capabilities.

We sell products through three main distribution channels, consisting of warehouse sales, reload sales, and direct sales. Warehouse sales, which generate the majority of our sales, are delivered from our warehouses to our customers. Reload sales are similar to warehouse sales but are shipped from warehouses, most of which are operated by third-parties, where we store owned products to enhance 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, however, requires the lowest amount of committed capital and fixed costs.

We have a strong market position and a broad geographic coverage footprint servicing all 50 states, where we maintain locations that serve 75 percent of the highest growth metropolitan statistical areas as it relates to forecasted housing starts and repair and remodel spend. With the strength of a locally focused sales force, we distribute a comprehensive range of products from over 750 suppliers. Our suppliers include some of the leading manufacturers in the industry, such as Allura, Arauco, Fiberon, Georgia-Pacific, Huber Engineered Woods, Louisiana-Pacific, Oldcastle APG, Ply Gem, Roseburg, Royal and Weyerhaeuser. We supply products to a broad base of customers including nationalexpectations regarding new home centers, pro dealers, cooperatives, specialty distributors, regional and local dealers and industrial manufacturers. Many of our customers serve residential and commercial builders, contractors and remodelers in their respective geographic areas and local markets.

As a value-added partner in a complex and demanding building products supply chain, we play a critical role in enabling our customers to offer a broad range of products and brands, as most of our customers do not have the capability to purchase and warehouse products directly from manufacturers for such a large set of SKUs. The depth of our geographic footprint supports meaningful customer proximity across all the markets in which we operate, enabling faster and more efficient service. Similarly, we provide value to our supplier partners by enabling access to the large and fragmented network of lumber yards and dealers these suppliers could not adequately serve directly. Our position in this distribution model for building products provides easy access to the marketplace for our suppliers and a value proposition of rapid delivery on an as-needed basis to our customers from our network of warehouse facilities.

~~Industry Overview~~

~~Our products are available across large and attractive end markets, including residential repair and remodel and residential new~~ construction, which together account for approximately 85 percent of the end market mix for our addressable building material market served via two-step distribution based on our estimates. We also estimate the remaining 15 percent is accounted for by commercial construction.

Certain developments have led to a more challenging macro-economic environment, such as broad-based inflation, the rapid rise in mortgage rates, and home price appreciation. These developments have impacted the U.S. housing market, including the residential repair and remodel and residential new construction end markets, and have contributed to a recent slowdown in the U.S. housing industry. However, we believe that several factors, including the current high levels of home equity, the fundamental undersupply of housing in the U.S., repair and remodel activity and ~~demographic shifts, among others,~~continued investment in existing and new homes; our positioning for long-term value creation; our efforts and ability to generate profitable growth; our ability to increase net sales in specialty product categories; our ability to generate profits and cash from sales of specialty products; our multi-year capital allocation plans; our ability to manage volatility in wood-based commodities; our improvement in execution and productivity; our efforts and ability to maintain a disciplined capital structure and capital allocation strategy; our ability to maintain a strong balance sheet; our ability to focus on operating improvement initiatives and commercial excellence; and whether or not the Company will ~~support demand~~continue any share repurchases.

These risks and uncertainties also include those discussed under the heading “Risk Factors” in Item 1A of our Annual Report on Form 10-K for ~~our products.~~

~~Residential Repair~~the year ended December 30, 2023, those discussed elsewhere in this Form 10-Q, and ~~Remodel~~in future reports that we file with the SEC.

We ~~estimate that demand~~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 ~~residential repair and remodel market (“R&R”) accounts for approximately 45 percent of our annual sales. Historically, R&R demand has tended~~extent to ~~be less cyclical when compared to the residential new construction~~

~~market, particularly for exterior products that are exposed to the elements and where maintenance is less likely to be deferred for long periods of time. We believe R&R demand is driven by~~which any factor, or a ~~myriad~~combination of factors, ~~including, but~~may cause our business, strategy, or actual results to differ materially from those contained in forward-looking statements. Given these risks and uncertainties, we caution you not ~~limited to: home prices and affordability; raw materials prices; the pace~~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 ~~household formation; savings rates; employment conditions; and emerging trends, such~~information, future events or otherwise, except as ~~the increased popularity of home-based remote working environments. With mortgage rates having risen to multi-year highs, we believe many homeowners who secured a lower interest mortgage will~~required by law.

The following discussion should be ~~inclined to stay longer~~read in ~~existing homes, which could benefit R&R demand over the near-to-medium term.~~

According to the Joint Center For Housing Studies’ LIRA Index, R&R demand is expected to return to more normalized levels, following several consecutive years of elevated R&R activity fueled by pandemic-induced changes in housing and lifestyle decisions. However, the total market size of the U.S. R&R market remains significant,conjunction with ~~total U.S. homeowner improvements and repairs spending expected to be approximately $484.0 billion by the end of 2023, up from $363.0 billion at the end of 2020.~~

Further, as the median age of U.S. housing stock increases over time, we anticipate U.S. R&R spending will also increase. According to the U.S. Census Bureau and the U.S. Department of Housing and Urban Development, the median age of a home in the U.S. increased from 23 years in 1985 to 39 years in 2019. Moreover, approximately 80 percent of the current housing stock was built prior to 1999. We believe the increasing average age of the nation’s approximate 142 million existing homes will continue to drive demand for repair and remodel projects.

~~Residential New Construction~~

~~We estimate that demand from the residential new construction market, including single-family and multi-family units, accounts for approximately 40 percent of~~ our ~~annual sales.~~

We believe demand for residential new construction is driven by a myriad of factors including, but not limited to: mortgage rates, which recently reached multi-year highs; lending standards; home affordability; employment conditions; savings rates; the rate of population growth and new household formation; builder activity levels; the level of existing home inventory on the market; and consumer sentiment.

According to the U.S. Census Bureau and the U.S. Department of Housing and Urban Development, during the first quarter of fiscal 2023, single family housing starts in the United States, seasonally adjusted, were approximately 29 percent lower compared to the first quarter of fiscal 2022 and approximately 13 percent lower than that of the first quarter of fiscal 2020, prior to the COVID-19 pandemic, indicating a market slow down following two years of favorable market conditions. As of the end of the first quarter of fiscal 2023, the month’s supply of inventory of new homes was eight months, above the 20-year average of six months. For most of the last decade, housing production has lagged population growth and household formation.

We believe our scale, national footprint, strategic supplier relationships, key national customer relationships, and breadth of market leading products and brands position us to serve the residential new construction end market and navigate the challenges in the macro-economic environment.

~~Seasonality~~

We are exposed to fluctuations in quarterly sales volumes and expenses due to seasonal factors common in the building products distribution industry, such as weather conditions and other seasonal factors. The first and fourth quarters have historically been our lower volume quarters due to the impact of unfavorable weather on the residential repair and remodel and residential new home construction markets, among other factors. Our second and third quarters have historically been higher volume quarters compared to the first and fourth quarters, reflecting an increase in repair and remodel and residential new home construction activities due to more favorable seasonal conditions.

Our historical patterns of seasonality were impacted by the COVID-19 pandemic which caused supply and demand imbalances impacting our sales volumes. During the first quarter of 2023, we experienced some seasonal impacts to our sales volumes from weather conditions. While there is continued uncertainty surrounding certain macro-economic environment developments that may impact our seasonality trends, we expect to return to more normalized seasonality trends in the near term given recent easing supply constraints and increased manufacturing output.

~~Commodity Markets~~

Our operating results are sensitive to fluctuations in commodity markets, specifically commodity markets for wood-based commodities that we classify as structural products. When prices fluctuate in the commodity markets which impact us, we may immediately adjust the end price of our products to compensate for the changes in market prices, which is common for

businesses with inventories impacted by commodity price fluctuations. When we change our prices in response to market fluctuations, we will often see immediate impacts in our operating results. When market prices increase, this impact can be beneficial. Conversely, when market prices decrease, the impact can be negative because we are adjusting the selling prices for inventory often purchased at higher market prices. See Note 3, ~~Inventories, to the condensed~~ consolidated financial statements and ~~Results~~related notes and other financial information included in this Form 10-Q and in our Annual Report on Form 10-K for fiscal year 2023.

In addition to historical information, the following discussion and other parts of ~~Operations below~~this Form 10-Q contain forward-looking information that involves risks and uncertainties. Our actual results could differ materially from those anticipated by this forward-looking information due to the factors discussed under Item 1A “Risk Factors” in our Form 10-K for ~~discussion~~fiscal 2023 and under “Cautionary Statement Concerning Forward-Looking Statements” in Item 2 of ~~the impact of fluctuations in commodity markets on results for the periods presented.~~

~~Supply Constraints~~

Our operating results are impacted by the availability of the products we sell in the markets in which we do business. When our inventory supply is constrained, our operating results may be impacted by lower sales volumes. While supply constraints may negatively impact our sales volumes, they may also have a positive impact on our net sales and overall profitability. This is because supply constraints can cause prices to increase. Under these circumstances, we may sell less product by volume, but at a higher price which could have a positive impact on our levels of sales and profitability. Conversely, rapid changes in supply levels, such as the sudden increase in availability of a product where the supply was previously constrained, may have a negative impact on our operating results especially in situations where the demand does not also increase proportionally with supply increases.

this Form 10-Q.

Our Culture, Values and Management Focus

We remain committed to driving a culture of profitable growth within new and existing product lines and geographies, while positioning the Company for long-term value creation. The following initiatives represent key areas of our management team’s focus:

1.Foster a performance-driven culture committed to profitable growth. This includes enhancing the customer experience; accelerating organic growth within specific product and solutions offerings where the Company is uniquely advantaged; and deploying capital to drive sustained margin expansion, grow cash flow and maintain continued profitable growth.

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2.Migrate sales mix toward higher-margin specialty product categories. The Company is pursuing a revenue mix increasingly weighted toward higher-margin, specialty product categories such as engineered wood, siding, moulding and millwork, outdoor living, specialty lumber and panels, and industrial products. Additionally, the Company is expanding its value-added service offerings designed to simplify complex customer sourcing requirements and provide enhanced service capabilities afforded by the Company’s national platform.

3.Maintain a disciplined capital structure and pursue high-return investments that increase the value of the Company. The Company is maintaining a disciplined capital structure while at the same time investing in its business to modernize its distribution facilities, as well as its tractor and trailer fleet, and to improve operational performance. The Company also continues to evaluate potential acquisition targets that complement its existing capabilities, grow its specialty products business, increase customer exposure, expand its geographic reach through potential greenfield expansions in new markets, or a combination thereof. We invested ~~$9.0~~$5.4 million cash in our business and entered into $8.2 million of finance leases during the first quarter of fiscal ~~2023~~2024 to improve operational performance and productivity.

Our culture is guided by an unwavering commitment to apply our values to every decision we make and every action we take:

•Customer Centric - We put our customers first, so we are customer centric in all that we do.

•Integrity - We act with integrity, because doing the right thing is critical to our success.

•Respect - We treat everyone with dignity and respect.

•Grit - We show grit in the face of changing landscapes.

•Collaboration - We collaborate with each other and our customers to build great teams and construct innovative solutions.

Looking ahead, we plan to continue pursuing a three-pronged growth strategy focusing on specialty products sales growth, opportunistic mergers and acquisitions (“M&A”), and potential greenfield expansion in new geographic markets. Within specialty products, we will continue our focus on the five key areas of engineered wood, siding, moulding and millwork, outdoor living, and industrial products, which we believe are all favorable for two-step distributors and have attractive long-term prospects.

Factors That Affect Our Operating Results

and Trends

Our results of operations and financial performance are influenced by a variety of factors, including the following: housing market conditions; pricing and product cost variability; volumes of product sold; competition; ~~changes in the supply and/or demand for products that we distribute;~~ the cyclical nature of the industry in which we operate; ~~housing market conditions;~~ consolidation among competitors, suppliers, and customers; disintermediation risk; loss of products or key suppliers and manufacturers; our dependence on international suppliers and manufacturers for certain products; ~~potential acquisitions and the integration and completion of such acquisitions; business disruptions;~~ effective inventory management relative to our sales volume or the prices of the products we produce; business disruptions; potential acquisitions and the integration and completion of such acquisitions; information technology security risks and business interruption risks; the ability to attract, train, and retain highly qualified associates and other key personnel while controlling related labor costs; exposure to product liability and other claims and legal proceedings related to our business and the products we distribute; natural disasters, catastrophes, fire, wars or other unexpected events; the impacts of climate change; 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; the effects of epidemics, global pandemics ~~such as COVID-19, and~~or other widespread public health crises and ~~their potential effects on our business;~~governmental rules and regulations; fluctuations in our operating results; our level of indebtedness and our ability to incur additional debt to fund future needs; the covenants of the instruments governing our indebtedness limiting the discretion of our management in operating the business; the potential to incur more debt; the fact that we have consummated certain sale leaseback transactions

with resulting long-term non-cancelable leases, many of which are or will be finance leases; 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; inability to raise funds necessary to finance a required repurchase of our senior secured notes; a lowering or withdrawal of debt ratings; changes in our product mix; increases in ~~petroleum prices;~~fuel and other energy prices or availability of third-part freight providers; changes in insurance-related deductible/retention reserves based on actual loss development experience; the possibility that the value of our deferred tax assets could become impaired; changes in our expected annual effective tax rate could be volatile; ~~changes in actuarial assumptions for our pension plan;~~ the costs and liabilities related to our participation in multi-employer pension plans could increase; the risk that our cash flows and capital resources may be insufficient to service our existing or future indebtedness; ~~variable~~ interest rate risk, ~~under certain indebtedness;~~which could cause our debt service obligations to increase; and changes in, or

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interpretation of, accounting ~~principles; significant stock price fluctuation;~~principles. These factors, and the ~~possibility that~~related trends and uncertainties, have historically produced cyclicality in our results of operations, and we ~~could be~~expect this cyclicality to continue in future periods.

For more information on the ~~subject of securities class action litigation due~~risk factors impacting our business, refer to ~~stock price volatility; unfavorable securities or industry analyst publications; activities of activist shareholders; and indebtedness terms that limit~~Part I, Item 1A, Risk Factors, in our ~~ability to pay dividends~~Annual Report on ~~common stock.~~Form 10-K for the fiscal year 2023.

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Results of Operations

~~The following table sets forth our results of operations for the first quarter of fiscal 2023 and fiscal 2022:~~


	Three Months Ended March 30, 2024												Three Months Ended March 30, 2024			% of Net Sales					Three Months Ended April 1, 2023					% of Net Sales
	($ amounts in thousands)																				($ amounts in thousands)
Net sales
		First Quarter of Fiscal 2023		% of Net Sales	First Quarter of Fiscal 2022		% of Net Sales
Gross profit
		(In thousands)			(In thousands)
Net sales		$	797,904	100.0%	$	1,302,305	100.0%
Gross profit

Gross profit	Gross profit	133,539		16.7%	291,051		22.3%	127,681			17.6%			17.6%			133,539			16.7%				16.7%
Selling, general, and administrative	Selling, general, and administrative	91,174		11.4%	91,289		7.0%	Selling, general, and administrative	91,250			12.6%			12.6%			91,174				11.4%			11.4%
Depreciation and amortization	Depreciation and amortization	7,718		1.0%	6,746		0.5%	Depreciation and amortization	9,433			1.3%			1.3%			7,718				1.0%			1.0%
Amortization of deferred gains on real estate	Amortization of deferred gains on real estate	(984)		(0.1)%	(984)		(0.1)%	Amortization of deferred gains on real estate	(984)			(0.1)%			(0.1)%			(984)				(0.1)%			(0.1)%

Other operating expenses	Other operating expenses	3,116		0.4%	838		0.1%
Other operating expenses
Other operating expenses									314					0.0%			3,116						0.4%
Operating income	Operating income	32,515		4.1%	193,162		14.8%	Operating income	27,668			3.8%			3.8%			32,515				4.1%			4.1%
Interest expense, net	Interest expense, net	7,687		1.0%	11,293		0.9%	Interest expense, net	4,624			0.6%			0.6%			7,687				1.0%			1.0%
Other expense, net	Other expense, net	594		0.1%	1,138		0.1%	Other expense, net	—			—%			—%			594				0.1%			0.1%
Income before provision for income taxes	Income before provision for income taxes	24,234		3.0%	180,731		13.9%	Income before provision for income taxes	23,044			3.2%			3.2%			24,234				3.0%			3.0%
Provision for income taxes	Provision for income taxes	6,422		0.8%	47,322		3.6%	Provision for income taxes	5,552			0.8%			0.8%			6,422				0.8%			0.8%
Net income	Net income	$	17,812	2.2%	$	133,409	10.2%	Net income	$	17,492		2.4%			2.4%			$	17,812			2.2%			2.2%

The following table sets forth net sales by product ~~category for the three-month periods ending April 1, 2023 and April 2, 2022:~~category:


		Three Months Ended
		April 1, 2023				April 2, 2022
Net sales by product category		($ in thousands)
	Three Months Ended																		Three Months Ended
	March 30, 2024														March 30, 2024					April 1, 2023
	($ amounts in thousands)																		($ amounts in thousands)
Specialty products	Specialty products	$	567,838	71	%	$	767,907	59	%	Specialty products	$	503,834	69	69		%	$	567,838	71		71	%
Structural products	Structural products	230,066		29	%	534,398		41	%	Structural products	222,410		31	31		%	230,066		29		29	%
Total net sales	Total net sales	$	797,904	100	%	$	1,302,305	100	%	Total net sales	$	726,244	100	100		%	$	797,904	100		100	%

The following table sets forth gross profit and gross margin percentages by product ~~category for~~category:


	Three Months Ended
	March 30, 2024			April 1, 2023
Gross profit by product category:	($ amounts in thousands)
Specialty products	$	104,049		$	106,627
Structural products	23,632			26,912
Total gross profit	$	127,681		$	133,539
Gross margin % by product category:
Specialty products	20.7		%	18.8		%
Structural products	10.6		%	11.7		%

Consolidated gross margin %	17.6		%	16.7		%

First Quarter of Fiscal 2024 Compared to First Quarter of Fiscal 2023

For the ~~three-month periods~~first quarter of fiscal 2024, we generated consolidated net sales of $726.2 million, a decrease of $71.7 million when compared to the first quarter of fiscal 2023 and ~~2022:~~

Three Months Ended
April 1, 2023 April 2, 2022
Gross profit by product category ($ in thousands)
Specialty products $ 106,627 $ 184,099
Structural products 26,912 106,952
Total gross profit $ 133,539 $ 291,051
Gross margin % by product category
Specialty products 18.8 % 24.0 %
Structural products 11.7 % 20.0 %
Total gross margin % 16.7 % 22.3 %
the consolidated gross margin percentage increased from 16.7 percent to 17.6 percent year over year. The decrease in consolidated net sales in the current period was due to 11.3 percent and 3.3 percent declines in specialty products and structural products net sales, respectively. For both product categories, volumes were adversely impacted by winter weather in January 2024 in several parts of the U.S., which resulted in the closure of about half of our branch locations for one to five days. Volumes improved in February and March 2024. Compared to first quarter 2023, industry-wide commodity pricing for framing lumber decreased 2.4% and increased 23.2% for structural panels.

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~~First Quarter of Fiscal 2023 Compared to First Quarter of Fiscal 2022~~

~~For the first quarter of fiscal 2023, we generated net sales of $797.9 million, a decrease of $504.4 million when compared to the first quarter of fiscal 2022 and the overall~~The increase in consolidated gross margin percentage ~~decreased from 22.3 percent to 16.7 percent year over year. The decline~~ in ~~overall profitability compared to~~ the ~~prior year~~current period was ~~primarily~~ due to ~~lower sales volume~~a net benefit of $6.5 million for import duty items in the current period for our specialty products. The import duty items were related to changes in retroactive rates for anti-dumping duties resulting in a credit to Cost of products ~~particularly our engineered wood~~sold of $16.9 million, partially offset by classification adjustments for certain goods imported by the Company that resulted in an increase in Cost of products ~~and year-over-year declines in~~sold of $10.4 million. The net benefit from import duties added 0.9% to the ~~average composite prices of our structural products.~~consolidated gross margin percentage for the current period.

Net sales of specialty products, which includes products such as engineered wood, siding, millwork and moulding, outdoor living, specialty lumber and panels, and industrial products, decreased ~~$200.1~~$64.0 million, or 11.3 percent, to ~~$567.8~~$503.8 million in the first quarter of fiscal 2024. This decline in net sales for specialty products was due to deflationary impacts across several specialty categories. Specialty products gross profit decreased $2.6 million, or 2.4 percent, to $104.0 million, with a year-over-year increase in gross margin percentage to 20.7 percent for the first quarter of fiscal 2024 from 18.8 percent in the first quarter of fiscal 2023. The ~~decline was due~~net benefit for import duty items of $6.5 million described above added 1.3% to ~~lower sales volume, primarily related to engineered wood products. Specialty~~the specialty products gross ~~profit decreased $77.5 million to $106.6 million, with a year-over-year decline of 520 basis points in specialty gross~~ margin ~~to 18.8 percent~~ for the first quarter of fiscal 2023, compared to 24.0 percent in the first quarter of fiscal 2022. The decrease in specialty gross margin percentage over the prior-year period is attributable to lower sales volume, primarily related to engineered wood products, as well as modest declines in pricing for our specialty products given the change in market conditions.current quarter.

Net sales of structural products, which includes products such as lumber, plywood, oriented strand board, rebar, and remesh, decreased ~~$304.3~~$7.7 million, or 3.3 percent, to ~~$230.1~~$222.4 million in the first quarter of fiscal ~~2023 due to the decline in the average composite price of framing lumber and structural panels, as well as lower structural panels volume. Our structural~~2024. Structural products gross margin percentage for the first quarter of fiscal ~~2023~~2024 was ~~11.7~~10.6 percent, down from ~~20.0~~11.7 percent in the prior-year ~~period,~~period. The decreases in structural products net sales and gross profit percentage were due primarily ~~attributable~~ to ~~year-over-year declines~~lower framing lumber volumes when compared to the elevated levels in the ~~average composite price of framing lumber and structural panels.~~prior year period.

Our selling, general, and administrative expenses ~~which includes approximately $2.0~~(“SG&A”) were $91.3 million ~~of incremental operating expenses related to our Vandermeer acquisition, remained relatively flat overall compared to~~in the first quarter of ~~fiscal 2022.~~2024, comparable with the $91.2 million for the prior year period. Depreciation and amortization expense increased ~~14.4~~22.2 percent, compared to the first quarter of fiscal ~~2022.~~2023. The increase in depreciation and amortization is due to a higher base of amortizable and depreciable assets ~~throughout~~in the first quarter of fiscal ~~2023~~2024 when compared the prior-year period, resulting from our continued focus on capital ~~investment and increased intangible assets related to our Vandermeer acquisition.~~investment. Other operating expenses ~~increased $2.3~~decreased $2.8 million compared to the first quarter of fiscal ~~2022 primarily due to~~2023; the prior year period included $3.7 million for restructuring ~~related~~ costs ~~including severance, incurred in the first quarter of fiscal 2023 due~~related to our leadership ~~transition.~~transition and costs related to settlement of our legacy defined benefit pension plan.

Interest expense, net, decreased by ~~31.9~~39.8 percent, or ~~$3.6~~$3.1 million, compared to the first quarter of fiscal ~~2022.~~2023. The decrease iswas primarily due to the generation of higher interest income on our cash ~~on hand.~~and cash equivalents due to higher balances and interest rates in the current quarter. Included in interest income for the three months ended March 30, 2024 is $2.0 million received for antidumping import duty refunds. Interest expense, net for the three months ended March 30, 2024 also includes $1.6 million of estimated accrued interest expense related to estimated import duties owed by the Company (see Note 9, Commitments and Contingencies).

Our effective tax rates were ~~26.5~~24.1 percent and ~~26.2~~26.5 percent for the first quarter of fiscal ~~2023~~2024 and ~~2022,~~2023, respectively. Our effective tax rate for both periods was impacted by the permanent addback of certain nondeductible expenses, including meals and entertainment and executive compensation, slightly offset by a benefit from the vesting of restricted stock units, which occurred during each period. For the current quarter, the partial release of a valuation allowance for deferred income taxes lowered our effective income tax rate by 1.4 percent. We anticipate that our annual effective income tax rate for fiscal 2024 will be approximately 26 percent.

Our net income for the first quarter of fiscal ~~2023~~2024 was $17.5 million, or $2.00 per diluted share, versus $17.8 million, or $1.94 per diluted share, ~~versus $133.4 million, or $13.19 per diluted share,~~ in the prior-year period. The change in net income was due to the matters previously discussed. Despite lower net income in the current quarter, basic and diluted earnings per share were higher than the prior year period due ~~primarily~~ to a ~~decrease~~lower average number of common shares outstanding during the current quarter; this resulted from share repurchases that occurred in gross profit driven by lower specialty sales volume, particularly for our engineered wood products, and declines in pricing related to our specialty and structural products, in conjunction with higher operating expenses. This was offset by lower interest expense and income tax expense.fiscal 2023 after the first quarter.

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Liquidity and Capital Resources

We expect our primary sources of liquidity to be cash flows from sales and operating activities in the normal course of our operations, cash and cash equivalents on hand, and availability from our revolving credit facility, as needed. We expect that these sources will be sufficient to fund our ongoing cash requirements for at least the next 12 months and into the foreseeable future. As of March 30, 2024, we had $481.3 million of cash and cash equivalents plus $346.5 millionof availability on our revolving credit facility.

Senior Secured Notes

In October 2021, we ~~entered into an indenture (the “Indenture”) with the guarantors party thereto and Truist Bank, as trustee and collateral agent, in connection with~~completed a private offering of $300 million of our six percent senior secured notes due 2029 (the “2029 Notes”). ~~The~~Interest is payable semi-annually. Our 2029 Notes ~~were issued~~are scheduled to ~~investors at 98.625 percent of their principal amount and will~~ mature on November 15, ~~2029. The majority of net proceeds from~~2029, and no principal is due until that time as long as we remain in compliance with the ~~offering of the 2029 Notes were used to repay borrowings under our revolving credit facility.~~

related covenants. As of ~~April 1, 2023 and December 31, 2022, the fair value of our 2029 Notes was approximately $276.8 million and $283.6 million, respectively, which are designated as Level 2~~March 30, 2024, we were in ~~the fair value hierarchy. Our valuation technique is based primarily on observable market prices in less active markets.~~compliance with these covenants.

Revolving Credit Facility

Our Revolving Credit Facility, entered into with Wells Fargo Bank, National Association, as administrative agent (“the Agent”), and certain other financial institutions party thereto, provides for a senior secured asset-basedamended revolving ~~loan and letter of~~ credit facility matures on August 2, 2026, provided we remain in compliance with the related covenants. As of ~~up to $350.0 million. Our obligations~~March 30, 2024, we were in compliance with these covenants.

Any outstanding borrowings under the Revolving Credit Facility are secured by a security interest in substantially all of our and our subsidiaries’ assets (other than real property), including inventories, accounts receivable, and proceeds from those items.

~~Borrowings under our Revolving Credit Facility~~revolving credit facility bear interest at a rate per annum equal to (i) ~~LIBOR~~Adjusted Term Secured Overnight Financing Rate (“SOFR”) (calculated as SOFR plus 0.1%) plus a margin ranging from 1.25 percent to 1.75 percent, with the margin determined based upon average excess availability for the immediately preceding fiscal quarter for loans based on ~~LIBOR,~~SOFR, or (ii) the ~~Agent’s~~agent’s base rate (as that term is defined in the revolving credit agreement) plus a margin ranging from 0.25 percent to 0.75 percent, with the margin based upon average excess availability for the immediately preceding fiscal quarter for loans based on the base rate.

Borrowings under ~~our~~the Revolving Credit Facility are subject to availability under the Borrowing Base (as that term is defined in the revolving credit agreement). The ~~Borrowers are~~Company is required to repay revolving loans thereunder to the extent that such revolving loans exceed the Borrowing Base then in effect. ~~Our~~The Revolving Credit Facility may be prepaid in whole or in part from time to time without penalty or premium but including all breakage costs incurred by any lender thereunder.

As of April 1, 2023, we had zero outstanding borrowings and excess availability, including cash in qualified accounts, of $722.7 million under our Revolving Credit Facility. As of December 31, 2022, we had zero outstanding borrowings and excess availability, including cash in qualified accounts, of $645.4 million under our Revolving Credit Facility. Available borrowing capacity under our Revolving Credit Facility was $346.5 million ~~on April 1, 2023 and December 31, 2022. Our average effective interest rate under the facility was zero percent for the quarters ended April 1, 2023 and April 2, 2022.~~

Our 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 our Revolving Credit Facility as of ~~April 1, 2023.~~March 30, 2024. The available borrowing capacity reflects undrawn letters of credit.

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 that we completed in recent years. Our total finance lease commitments totaled ~~$270.8~~$292.1 million and ~~$273.1~~$285.4 million as of ~~April 1, 2023~~March 30, 2024 and December ~~31, 2022,~~30, 2023, respectively. Of the ~~$270.8~~$292.1 million of finance lease commitments as of ~~April 1, 2023,~~March 30, 2024, $243.6 million related to real estate and ~~$27.2~~$48.4 million related to equipment. Of the ~~$273.1~~$285.4 million of finance lease commitments as of December ~~31, 2022, $243.8~~30, 2023, $243.2 million related to real estate and ~~$29.3~~$42.3 million related to equipment.

~~Interest Rates~~

Our Revolving Credit Facility includes available interest rate options based on LIBOR, which will be discontinued as an available rate option after June 30, 2023. Under the terms of our Revolving Credit Facility, LIBOR will be replaced with SOFR with respect to the applicable variable rate interest options thereunder, with effect on or before June 30, 2023. There can be no assurances as to whether SOFR will be a more or less favorable reference rate than LIBOR, and the consequences of replacing LIBOR with SOFR cannot be entirely predicted. However, at this time, we do not believe that the replacement of LIBOR by SOFR as a reference rate in our revolving credit facility 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 ~~provided by~~used in operating activities for the first three months of fiscal ~~2023~~2024 was ~~$89.0~~$31.1 million, compared to net cash provided by operating activities of ~~$2.2~~$89.0 million in the first three months of fiscal ~~2022. The increase~~2023. This decrease of $120.1 million in cash ~~provided by~~generated from operating activities ~~during~~in the ~~first three months of fiscal 2023~~current year period compared to the prior year period was primarily a result of ~~higher~~seasonal inventory purchases in the current year period. The net source of cash generated ~~from changes in working capital components, including the decrease in inventory and increase in accounts payable, offset by the increase in accounts receivable~~ in the ~~current-year period. This~~prior year period was ~~partially offset~~driven by ~~a decrease in net income for the current-year period compared to the prior-year period.~~significant inventory reduction efforts.

Investing Activities

Net cash used in investing activities for the first ~~three months~~quarter of fiscal ~~2023~~2024 was ~~$9.0~~$5.3 million compared to net cash used in investing activities of ~~$2.5~~$9.0 million in the first ~~three months~~quarter of fiscal ~~2022.~~2023. The ~~increase~~decrease in net cash used in investing activities was primarily due to ~~higher spend on~~lower purchases of property and equipment in the current year-period compared to the prior-year period. However, during the

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first quarter of fiscal 2024, we also invested in additional fleet upgrades by entering into $8.2 million of finance leases, which are non-cash activities at lease inception.

Financing Activities

Net cash used in financing activities totaled $4.0 million for the first three months of fiscal 2024, compared to net cash used in financing activities of $2.7 million for the first three months of fiscal ~~2023, compared to net cash used in financing activities of $10.5 million for the first three months of fiscal 2022. The decrease in net cash used in financing activities is primarily~~2023. This change was due to higher payments on finance lease obligations in the current period. Other than to satisfy payroll and withholding taxes for vesting grants of restricted stock units, we did not repurchase any shares of our common stock ~~under our announced share repurchase program~~ during either the first ~~three months~~quarter of ~~fiscal 2022, with no such transactions completed in~~2024 or the first ~~three months~~quarter of ~~fiscal~~ 2023.

~~Stock~~Share Repurchase Program

As of ~~April 1, 2023,~~March 30, 2024, we have a remaining authorization amount of ~~$33.6~~$91.4 million under our ~~$100.0~~$100 million share repurchase ~~program.~~program that was previously disclosed and authorized by our Board of Directors on October 31, 2023.

~~With the remaining availability under the stock~~Under this share repurchase program, wethe Company may repurchase ~~our~~its common stock ~~at any time or~~ from time to time, without prior notice, subject to prevailing market conditions and other considerations. ~~Our repurchases~~Repurchases may be made through a variety of methods, which may include open market purchases, privately negotiated transactions, accelerated share repurchase programs, tender offers or pursuant to a trading plan that may be adopted in accordance with the Securities and Exchange Commission Rule 10b5-1.

~~Operating~~Net Working Capital

~~Operating~~Net 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~~Net working capital is defined as the sum of accounts receivables and inventory, less accounts ~~payable.~~payable, each determined in accordance with GAAP and included in our consolidated balance sheets. This metric differs from traditional working capital in that it excludes certain current assets and current liabilities that are reported in our consolidated balance sheets. Management of net working capital helps us monitor our progress in meeting our goals to enhance working capital assets.

								Selected financial information
		April 1, 2023		December 31, 2022		April 2, 2022
		(In thousands)
		March 30, 2024
		March 30, 2024
		March 30, 2024							December 30, 2023		April 1, 2023
	(In thousands)									(In thousands)
Current assets:	Current assets:
Receivables, less allowance for doubtful accounts		$	298,888	$	251,555	$	497,056
Accounts receivables, less allowance for doubtful accounts
Accounts receivables, less allowance for doubtful accounts
Accounts receivables, less allowance for doubtful accounts
Inventories, net	Inventories, net	409,324		484,313		562,555
		$	708,212	$	735,868	$	1,059,611
	$

Current liabilities:	Current liabilities:
Current liabilities:
Current liabilities:
Accounts payable	Accounts payable	$	177,046	$	151,626	$	230,072
Accounts payable
Accounts payable
	$
		$	177,046	$	151,626	$	230,072

Operating working capital		$	531,166	$	584,242	$	829,539
Net working capital
Net working capital
Net working capital

~~Operating~~Net working capital of $487.5 million as of March 30, 2024, compared to $414.1 million as of December 30, 2023, increased on a net basis by approximately $73.4 million. The increase in net working capital was primarily driven by the increases in accounts receivable and inventory due to higher sales and seasonality. This overall increase was partially offset by the increase in accounts payable due to seasonal inventory procurement activity.

Net working capital of $487.5 million as of March 30, 2024, compared to $531.2 million as of April 1, 2023, ~~compared to $584.2 million as of December 31, 2022,~~ decreased on a net basis by approximately ~~$53.1~~$43.8 million. The decrease in ~~operating~~net working capital iswas primarily driven by the decrease in inventory, which reflects our strategic inventory management efforts, and the increase in accounts payable due to timing of cash disbursements. This was partially offset by the increase in accounts receivable from net sales.

Operating working capital of $531.2 million as of April 1, 2023, compared to $829.5 million as of April 2, 2022, decreased on a net basis by approximately $298.4 million. The decrease in operating working capital is primarily driven by the decrease in accounts receivable due to the decrease in net sales and improved collection efforts, as well as the decrease in inventory, which reflectsreflected our strategic inventory management efforts and a deflationary pricing environment. ~~This was partially offset by the decrease in accounts payable due to the decrease in inventory and the timing of cash disbursements.~~

Investments in Property and Equipment

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~~values of these assets are included in property and

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equipment, at cost on our condensed consolidated balance sheet. For the first quarter ~~ended April 1,~~of 2024, we invested $5.4 million in property and equipment, including $3.9 million for our distribution facilities and $1.5 million in fleet upgrades. Additionally, during the first quarter of 2024, we entered into finance leases of $8.2 million for fleet upgrades. For the first quarter of 2023, we invested $9.0 million in cash ~~investments~~ in long-lived assets primarily ~~related to investments in~~for our distribution facilities and to a lesser extent, upgrading our fleet.

Critical Accounting Policies and Estimates

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 and estimates from the information provided in Item 7 of our Annual Report on Form 10-K for the fiscal year ended December ~~31, 2022.~~30, 2023.

~~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,” “could,” “expect,” “estimate,” “intend,” “may,” “project,” “plan,” “should,” “will,” “will be,” “will likely continue,” “will likely result,” “would” 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 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 31, 2022, 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:

•~~we may experience pricing and product cost variability;~~

•~~our earnings are highly dependent on volumes;~~

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

•~~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 our net income;~~

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

•~~consolidation among competitors, suppliers, and customers could negatively impact our business;~~

•~~we are subject to disintermediation risk;~~

•~~loss of key products or key suppliers and manufacturers could affect our financial health;~~

•~~our dependence on international suppliers and manufacturers for certain products exposes us to risks that could affect our financial condition and expose us to certain additional risks;~~

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

•~~we may incur business disruptions resulting from a variety of possible causes;~~

•we may be unable to effectively manage our inventory relative to our sales volume or as the prices of the products we distribute fluctuate, which could affect our business, financial condition, and operating results;

•~~we are subject to information technology security risks and business interruption risks and may incur increasing costs in an effort to minimize and/or respond to those risks;~~

•~~our success depends on our ability to attract, train, and retain highly qualified associates and other key personnel while controlling related labor costs;~~

•~~we are exposed to product liability and other claims and legal proceedings related to our business and the products we distribute, which may exceed the coverage of our insurance;~~

•~~our business operations could suffer significant losses from climate changes, natural disasters, catastrophes, fire, or other unexpected events;~~

•~~our operating results depend on the successful implementation of our strategy and we may not be able to implement our strategic initiatives successfully, on a timely basis, or at all;~~

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

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

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

•the effect of global pandemics, such as COVID-19, and other widespread public health crises and governmental rules and regulations and our policies related to such may adversely affect our business and results from operations;

•~~our future operating results may fluctuate significantly, and our current operating results may not be a good indication of our future performance;~~

•~~fluctuations in our quarterly financial results could affect our stock price 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;~~

•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;

•~~despite our current levels of debt, we may still incur more debt, which would increase the risks described in these risk factors relating to indebtedness;~~

•we have sold and leased back certain of our distribution centers under long-term non-cancelable leases, and we may enter into similar transactions in the future. All of these leases are (or will be) finance leases, and our debt and interest expense may increase as a result;

•many of our distribution centers are leased, and if we close a leased distribution center before expiration of the lease, we will still be obligated under the applicable lease, and we may be unable to renew the leases at the end of their terms;

•~~we may not have or be able to raise the funds necessary to finance a required repurchase of our senior secured notes;~~

•~~a lowering or withdrawal of the ratings assigned to our debt securities by rating agencies may increase our future borrowing costs and reduce our access to capital;~~

•~~a change in our product mix could adversely affect our results of operations;~~

•~~if the cost of fuel, third-party freight or other energy prices increase or availability of third-party freight providers is reduced, our results of operations could be adversely affected;~~

•~~we establish insurance-related deductible/retention reserves based on historical loss development factors, which could lead to adjustments in the future based on actual development experience;~~

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

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

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

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

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

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

•~~changes in, or interpretation of, accounting principles could result in unfavorable accounting changes;~~

•~~our stock price may fluctuate significantly;~~

•~~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;~~

•~~if securities or industry analysts do not publish research or publish unfavorable research about our business, our stock price and trading volume could decline;~~

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

•the terms of our revolving credit facility and senior secured notes place restrictions on our ability to pay dividends on our common stock, so any returns to stockholders may be limited to the value of their stock.

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.

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ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

We are exposed to certain market risks as part of our on-going business operations. Our exposure includes commodity price risk and interest rate risk.

~~Commodity Price Risk~~

Many of the building products that we distribute, including oriented strand board (“OSB”), plywood, lumber, and rebar, are commodities whose price is determined by the market’s supply and demand for such products. Prices of commodity products can also change as a result of national and international economic conditions, labor and freight costs, competition, market speculation, government regulation, and trade policies, as well as from periodic delays in the delivery of products. Short-term increases in the cost of these materials, some of which are subject to significant fluctuations, are sometimes passed on There have been no material changes to our ~~customers, but our pricing quotation periods and pricing pressure~~exposure to market risks from ~~our competitors may limit our ability to pass on such price changes. We may also be limited~~those disclosed in our ~~ability to pass~~Annual Report on ~~increases in freight costs on our products. We may enter into derivative financial instruments to mitigate~~Form 10-K for the ~~potential impact of commodity price fluctuations on our results of operations or cash flows. As of April 1, 2023, we had no such derivative financial instruments in place.~~

~~Interest Rate Risk~~

We may experience changes in interest expense if changes in our debt occur. Changes in market interest rates could also affect our interest expense. We are exposed to interest rate risk arising from fluctuations in variable-rate LIBOR or other applicable benchmark rate, such as SOFR, when we have loan amounts outstanding on our revolving credit facility. We do not believe that a one percent increase in interest rates, for example, would have a material effect on our results of operations or cash flows. As of April 1, 2023, we had no outstanding borrowings on our revolving credit facility. Our senior secured notes bear interest at a fixed rate, therefore, our interest expense related to these notes would not be affected by an increase in market interest rates. We may enter into derivative financial instruments to mitigate the potential impact of interest rate risk on our results of operations or cash flows. As of April 1, 2023, we had no such derivative financial instruments in place.fiscal year ended December 30, 2023.

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.

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PART II. OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

~~During the first quarter of fiscal 2023, there were no material changes to our legal proceedings as disclosed in our Annual Report on Form 10-K for the year ended December 31, 2022. Additionally, we~~We are, and from time to time may be, a party to routine legal proceedings incidental to the operation of our business. ~~The~~Except as disclosed in Note 9, Commitments and Contingencies, under Regulatory Matters, to our unaudited condensed consolidated financial statements in this Quarterly Report on Form 10-Q, the Company does not expect that the outcome of any other pending or threatened proceedings, ~~is not expected~~if determined adversely to the Company, would individually, or taken together, 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

There have been no material changes to the risk factors disclosed in Part I, "Item 1A.Risk Factors" in the Company’s Annual Report on Form 10-K for the year ended December ~~31, 2022.~~30, 2023.

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

The following table presents our share repurchase activity for each month of the quarter ended ~~April 1, 2023:~~March 30, 2024:

Period
Total Number of Shares Purchased (1)
Average Price Paid per Share
Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs (2)
Maximum Dollar Value of Shares that May Yet Be Purchased Under the Plans or Programs
January 1 - February 4 6,102 $ 79.12 — $ 33,572,690
February 5 - March 4 — $ — — $ 33,572,690
March 5 - April 1 20,824 $ 68.49 — $ 33,572,690
Total 26,926 —


Period	Total Number of Shares Purchased (1)	Average Price Paid per Share		Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs (2)	Maximum Dollar Value of Shares that May Yet Be Purchased Under the Plans or Programs
December 31 - February 3	—	$	—	—	$	91,429,309
February 4 - March 2	6,769	$	129.35	—	$	91,429,309
March 3 - March 30	290	$	116.26	—	$	91,429,309
Total	7,059			—

(1) ~~Includes~~Represents shares withheld by us in connection with tax withholding obligations of our employees upon vesting of such employees’ restricted stock unit awards.

(2) On ~~May 3, 2022,~~October 31, 2023, our Board of Directors ~~increased our~~authorized a new share repurchase authorization for up to ~~$100.0 million, and as~~$100 million. As of ~~April 1, 2023,~~March 30, 2024, we had a remaining authorization amount of ~~$33.6~~$91.4 million under the program. With the remaining availability under the stock repurchase program, we may repurchase our common stock at any time or from time to time, without prior notice, subject to prevailing market conditions and other considerations. Our repurchases may be made through a variety of methods, which may include open market purchases, privately negotiated transactions, accelerated share repurchase programs, tender offers or pursuant to a trading plan that may be adopted in accordance with the Securities and Exchange Commission Rule 10b5-1. During the three months ended March 30, 2024, the Company did not repurchase any of its common shares under its share repurchase program.

ITEM 3. DEFAULTS UPON SENIOR SECURITIES

None.

ITEM 4. MINE SAFETY DISCLOSURES

Not applicable.

ITEM 5. OTHER INFORMATION

~~None.~~

None of our directors or executive officers adopted or terminated a Rule 10b5-1 trading arrangement or a non-Rule 10b5-1 trading arrangement (as defined in Item 408(c) of Regulation S-K) during the first quarter of fiscal 2024.

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ITEM 6. EXHIBITS


Exhibit Number		Description
~~10.1~~		Separation and Release Agreement, dated March 21, 2023, between BlueLinx Corporation and Dwight Gibson (incorporated by reference to Exhibit 10.1 to the Company’s Form 8-K filed with the Securities and Exchange Commission on March 21, 2023) ±.
~~10.2~~		Employment Agreement, dated March 21, 2023, between the Company, BlueLinx Corporation and Shyam Reddy (incorporated by reference to Exhibit 10.2 to the Company’s Form 8-K filed with the Securities and Exchange Commission on March 21, 2023) ±.
~~10.3~~	*	~~Offer Letter dated February 9, 2022, between BlueLinx Corporation and Kevin Henry ±.~~
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 1, 2023,~~March 30, 2024, 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.
	±	Management contract or compensatory plan or arrangement.

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~~SIGNATURE~~SIGNATURES

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 2, 2023~~April 30, 2024	By:	/s/ ~~Kelly C. Janzen~~Andrew Wamser
		~~Kelly C. Janzen~~Andrew Wamser
		Senior Vice President and Chief Financial Officer
		(Principal Financial Officer)

Date: ~~May 2, 2023~~April 30, 2024	By:	/s/ ~~Adam K. Bowen~~Kimberly A. DeBrock
		~~Adam K. Bowen~~Kimberly A. DeBrock
		Vice President and Chief Accounting Officer
		(Principal Accounting Officer)

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	Three Months Ended
Pension-related items	April 1, 2023		April 2, 2022
	(In thousands)
Service cost (1)	$	—	$	—
Interest cost on projected benefit obligation	1,104		606
Expected return on plan assets	(812)		(1,177)
Amortization of unrecognized gain	302		209
Net periodic pension cost (benefit)	$	594	$	(362)


	Defined benefit pension plan, net of tax		Other, net of tax		Total Accumulated Other Comprehensive Loss

December 31, 2022, beginning balance	$	(32,675)	$	1,263	$	(31,412)
Other comprehensive income, net of tax	239		(11)		228
April 1, 2023, ending balance, net of tax	$	(32,436)	$	1,252	$	(31,184)