What changed in this filing

/stocks — the workspaceLOADING

Item 1. Financial Statements

2023-05-02 compared with 2022-11-01 · 141 added, 219 removed, 351 unchanged (51% of the section changed)

4 unchanged sentences

(In thousands, except per share data)

Three Months Ended Nine Months Ended

October 1, 2022 October 2, 2021 October 1, 2022 October 2, 2021

Three Months Ended

April 1, 2023 April 2, 2022

Net sales $ 797,904 $ 1,302,305

5 unchanged sentences

Amortization of deferred gains on real estate ( 984 ) ( 984 )

Gains from sales of property — — ( 144 ) ( 1,287 )

Other operating expenses 3,116 838

1 unchanged sentence

Operating income 32,515 193,162

Non-operating expenses (income):

Non-operating expenses:

Interest expense, net 7,687 11,293

Other expense (income), net ( 361 ) ( 704 ) 916 ( 1,335 )

Other expense, net 594 1,138

Income before provision for income taxes 24,234 180,731

14 unchanged sentences

(In thousands, except share data)

October 1, 2022 January 1, 2022

April 1, 2023 December 31, 2022

Current assets:

18 unchanged sentences

Accrued compensation 13,115 22,556

Taxes payable 6,750 6,138

Finance lease liabilities - short-term 5,087 7,089

1 unchanged sentence

Real estate deferred gains - short-term 3,935 3,935

Pension benefit obligation - short-term 1,795 1,521

Other current liabilities 20,619 16,518

6 unchanged sentences

Real estate deferred gains - long-term 69,452 70,403

Pension benefit obligation 9,216 11,605

Other non-current liabilities 20,604 20,512

3 unchanged sentences

Common Stock, $ 0.01 par value, 20,000,000 shares authorized,

9,035,469 and 9,725,760 outstanding on October 1, 2022 and January 1, 2022, respectively

9,088,972 and 9,048,603 outstanding on April 1, 2023 and December 31, 2022, respectively

Additional paid-in capital 203,427 200,748

Accumulated other comprehensive loss ( 31,184 ) ( 31,412 )

Retained earnings 388,617 124,427

Accumulated stockholders’ equity 438,415 420,603

Total stockholders’ equity 610,749 590,029

2 unchanged sentences

BLUELINX HOLDINGS INC.

CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY (DEFICIT)

CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY

(In thousands)

1 unchanged sentence

Paid-In Capital Accumulated

Comprehensive Loss Retained Earnings Stockholders’ Equity Total

Comprehensive Loss Accumulated Equity Stockholders’ Equity Total

Shares Amount

Balance, January 1, 2022 9,726 $ 97 $ 268,085 $ ( 29,360 ) $ 124,427 $ 363,249

Balance, December 31, 2022 9,049 $ 90 $ 200,748 $ ( 31,412 ) $ 420,603 $ 590,029

Net income — — — — 17,812 17,812

3 unchanged sentences

Repurchase of shares to satisfy employee tax withholdings ( 8 ) — ( 570 ) — — ( 570 )

Common stock repurchase and retirement ( 81 ) ( 1 ) ( 6,426 ) — — ( 6,427 )

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

Net income — — — — 71,272 71,272

Impact of pension plan, net of tax — — — 156 — 156

Vesting of restricted stock units 181 2 — — — 2

Compensation related to share-based grants — — 1,775 — — 1,775

Repurchase of shares to satisfy employee tax withholdings ( 66 ) ( 1 ) ( 5,777 ) — — ( 5,778 )

Common stock repurchase and retirement ( 554 ) ( 5 ) ( 38,995 ) — — ( 39,000 )

Forward contract for accelerated share repurchase agreement — — ( 21,000 ) — — ( 21,000 )

Other — — 134 ( 20 ) — 114

Balance, July 2, 2022 9,212 92 199,565 ( 29,048 ) 329,108 499,717

Net income — — — — 59,509 59,509

Impact of pension plan, net of tax — — — 156 — 156

Vesting of restricted stock units 121 1 ( 1 ) — — —

Compensation related to share-based grants — — 2,092 — — 2,092

Repurchase of shares to satisfy employee tax withholdings ( 51 ) ( 1 ) ( 3,618 ) — — ( 3,619 )

Common stock repurchase and retirement ( 247 ) ( 2 ) 2 — — —

Other — — ( 134 ) ( 24 ) — ( 158 )

Balance, October 1, 2022 9,035 $ 90 $ 197,906 $ ( 28,916 ) $ 388,617 $ 557,697

Common Stock Additional

Paid-In Capital Accumulated

Comprehensive Loss Retained Earnings (Accumulated Deficit) Stockholders’ Equity Total

Comprehensive Loss Accumulated Equity Stockholders’ Equity Total

Shares Amount

5 unchanged sentences

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

Net income — — — — 113,458 113,458

Impact of pension plan, net of tax — — — 246 — 246

Vesting of restricted stock units 355 2 — — — 2

Compensation related to share-based grants — — 1,992 — — 1,992

Repurchase of shares to satisfy employee tax withholdings ( 113 ) — ( 5,033 ) — — ( 5,033 )

Other — — ( 2 ) 6 — 4

Balance, July 3, 2021 9,710 97 264,963 ( 35,490 ) 3,612 233,182

Net income — — — — 47,198 47,198

Impact of pension plan, net of tax — — — 238 — 238

Vesting of restricted stock units 14 — — — — —

Compensation related to share-based grants — — 1,608 — — 1,608

Repurchase of shares to satisfy employee tax withholdings — — ( 3 ) — — ( 3 )

Other — — ( 4 ) 7 — 3

Balance, October 2, 2021 9,724 $ 97 $ 266,564 $ ( 35,245 ) $ 50,810 $ 282,226

See accompanying Notes.

2 unchanged sentences

(In thousands)

Nine Months Ended

October 1, 2022 October 2, 2021

Three Months Ended

April 1, 2023 April 2, 2022

Cash flows from operating activities:

3 unchanged sentences

Amortization of debt discount and issuance costs 329 263

Adjustments to debt issuance costs associated with term loan — 5,791

Gains from sales of property ( 144 ) ( 1,287 )

Deferred income tax 213 ( 1,994 )

6 unchanged sentences

Taxes payable — 47,057

Pension contributions — ( 221 )

Other current assets 5,953 ( 601 )

2 unchanged sentences

Cash flows from investing activities:

Proceeds from sale of assets, net 648 2,652

Proceeds from sale of assets 37 49

Property and equipment investments ( 9,008 ) ( 2,509 )

1 unchanged sentence

Cash flows from financing activities:

Borrowings on revolving credit facilities — 900,006

Repayments on revolving credit facilities — ( 965,142 )

Repayments on term loan — ( 43,204 )

Common stock repurchase and retirement — ( 6,427 )

Debt financing costs — ( 2,811 )

Repurchase of shares to satisfy employee tax withholdings ( 570 ) ( 393 )

8 unchanged sentences

Non-cash transactions:

Property and equipment acquired under finance leases 5,995 10,549

Obligation for repurchase of shares to satisfy employee tax withholdings $ 1,319 $ —

See accompanying Notes.

1 unchanged sentence

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

October 1, 2022

April 1, 2023

Basis of Presentation and Summary of Significant Accounting Policies

2 unchanged sentences

and its wholly owned subsidiaries (the “Company”).

We derived the condensed consolidated balance sheet at October 1, 2022 from the audited consolidated financial statements included in our Annual Report on Form 10-K for the fiscal year ended January 1, 2022 (the “Fiscal 2021 Form 10-K”), as filed with the Securities and Exchange Commission (“SEC”) on February 22, 2022.

In the opinion of our management, the condensed consolidated financial statements reflect all adjustments, which are of a normal recurring nature, necessary for a fair presentation of our statements of operations and comprehensive income for the three and nine months ended October 1, 2022 and October 2, 2021, our balance sheets at October 1, 2022 and January 1, 2022, our statements of stockholders’ equity for the nine months ended October 1, 2022 and October 2, 2021, and our statements of cash flows for the nine months ended October 1, 2022 and October 2, 2021.

We derived the condensed consolidated balance sheet at April 1, 2023, from the audited consolidated financial statements included in our Annual Report on Form 10-K for the fiscal year ended December 31, 2022 (the “Fiscal 2022 Form 10-K”), as filed with the Securities and Exchange Commission (“SEC”) on February 21, 2023.

In the opinion of our management, the condensed consolidated financial statements reflect all adjustments, which are of a normal recurring nature, necessary for a fair presentation of our statements of operations and comprehensive income for the three months ended April 1, 2023 and April 2, 2022, our balance sheets at April 1, 2023 and December 31, 2022, our statements of stockholders’ equity for the three months ended April 1, 2023 and April 2, 2022, and our statements of cash flows for the three months ended April 1, 2023 and April 2, 2022.

We have condensed or omitted certain notes and other information from the interim condensed consolidated financial statements presented in this report.

Therefore, these condensed consolidated interim financial statements should be read in conjunction with the Fiscal 2022 Form 10-K.

The results for the three and nine months ended October 1, 2022 are not necessarily indicative of results that may be expected for the full year ending December 31, 2022, or any other interim period.

The results for the three months ended April 1, 2023 are not necessarily indicative of results that may be expected for the full year ending December 30, 2023, or any other interim period.

We operate on a 5-4-4 fiscal calendar.

1 unchanged sentence

Our 2023 fiscal year contains 52 weeks and ends on December 30, 2023.

Fiscal 2021 contained 52 weeks and ended on January 1, 2022.

Fiscal 2022 contained 52 weeks and ended on December 31, 2022.

Our financial statements are prepared in conformity with U.S.

3 unchanged sentences

Reclassification of Prior Period Presentation

For the nine months ended October 2, 2021, 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 nine months ended October 1, 2022.

Our reclassifications are limited to the operating activities section and include presenting only the impact of deferred income taxes, instead of our full provision for income taxes, as a reconciling item for net income to cash provided by operating activities.

We have also reclassified certain items previously presented individually, such as pension expense and pension contributions, to be included in the change of other assets and liabilities.

In addition, we are presenting the change in taxes payable, previously included in other assets and liabilities, as a distinct line item in our reconciliation of net income to cash provided by operating activities.

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.

5 unchanged sentences

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 in the first quarter of 2022 and the implementation did not have a material impact to the Company’s condensed consolidated financial statements.

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.

1 unchanged sentence

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 certain tenors of the London Inter-bank Offered Rate (“LIBOR”) on December 31, 2021, with complete elimination of the publication of the LIBOR by June 30, 2023.

certain tenors of the London Inter-bank Offered Rate (“LIBOR”) on December 31, 2021, with complete elimination of the publication of the LIBOR by June 30, 2023.

The amendments in this ASU are elective and apply to all entities that have contracts referencing the LIBOR.

The Company’s revolving credit agreement, as further discussed in Note 6 to these condensed consolidated financial statements, currently references the LIBOR for determining interest payable on current and future borrowings and includes provisions for the use of alternative rates if the LIBOR is unavailable.

The Company’s revolving credit agreement, as further discussed in Note 6, Long-Term Debt , to these condensed consolidated financial statements, currently references the LIBOR for determining interest payable on current and future borrowings and includes provisions for the use 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.

2 unchanged sentences

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.

Income Taxes.

In December 2019, the FASB issued ASU No.

2019-12, “Income Taxes (Topic 740):

Simplifying the Accounting for Income Taxes.” This ASU simplifies the accounting for income taxes by removing certain exceptions to the general principles in Accounting Standards Codification (“ASC”) 740 and also clarifies and amends existing guidance to improve consistent application.

The amendments in this standard are effective for interim periods and fiscal years beginning after December 15, 2020.

We adopted this standard effective for fiscal year 2021.

The adoption of the standard did not have a material impact on the Company's condensed consolidated financial statements.

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.

Our inventories consist almost entirely of finished goods inventory, with an immaterial amount of work-in-process inventory.

2 unchanged sentences

We evaluate our 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.

During the second quarter of fiscal 2022, we recorded a lower of cost or net realizable value reserve of $ 9.8 million as a result of the decrease in the value of our structural lumber and panel inventory related to the decline in wood-based commodity prices as of the end of the period.

In addition, volatility during the third quarter of fiscal 2022 also resulted in a decline in wood-based commodity prices as of the end of the period such that a lower of cost or net realizable value reserve of $ 4.1 million was required, resulting in a partial release of our reserve resulting in a net beneficial impact of $ 5.7 million for the third quarter of fiscal 2022.

For the first nine months of fiscal 2022, the net impact of our lower of cost or net realizable value reserve on cost of sales was $ 4.1 million.

During the second quarter of fiscal 2021, we recorded a lower of cost or net realizable value reserve of $ 16.7 million as a result of the decrease in the value of our structural lumber and panel inventory related to the decline in wood-based commodity prices as of the end of the period.

During the third quarter of fiscal 2021, we released a lower of cost or net realizable value reserve of $ 16.7 million, as the inventory impacted by the reserve recorded in the second quarter of fiscal 2021 was sold to customers.

For the first nine months of fiscal 2021, the net impact of our lower of cost or net realizable value reserve on cost of sales was zero .

As of April 1, 2023, we assessed the carrying value of our 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 31, 2022, we recorded a lower of cost or net realizable value reserve of $ 2.6 million as a result of the decrease in the value of our structural lumber and panel inventory related to the decline in wood-based commodity prices as of the end of the period.

Goodwill and Other Intangible Assets

In connection with our past merger and acquisition activity, we acquired certain intangible assets.

As of October 1, 2022, our intangible assets consist of goodwill and other intangible assets including customer relationships, noncompete agreements, and trade names.

As of April 1, 2023, our intangible assets consist of goodwill and other intangible assets including customer relationships, noncompete agreements, and trade names.

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 October 1, 2022, goodwill was $ 47.8 million.

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.

2 unchanged sentences

In addition, we will evaluate the carrying value for impairment between annual impairment tests if an event occurs or circumstances change that would indicate the carrying amount may be impaired.

Such events and indicators may include, without limitation, significant declines in the industries in which our products are used, significant changes in capital market conditions, and significant changes in our market capitalization.

No such indicators were present during the third quarter of fiscal 2022.

Our one reporting unit has a fair value that exceeds its carrying value as of October 1, 2022.

market capitalization.

No such indicators were present during the first quarter of fiscal 2023.

Our one reporting unit has a fair value that exceeds its carrying value as of April 1, 2023.

The following table provides information related to the carrying amount of our goodwill:

Total Carrying Amount

(In thousands)

Balance at December 31, 2022 $ 55,372

Acquisitions —

Balance at April 1, 2023 $ 55,372

Definite-Lived Intangible Assets

On October 1, 2022, the gross carrying amounts, accumulated amortization, and net carrying amounts of our definite-lived intangible assets were as follows:

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

Intangible Asset Weighted Average Remaining Useful Lives (Years) Gross Carrying Amounts Accumulated

6 unchanged sentences

Total $ 65,280 $ ( 31,401 ) $ 33,879

(1) Intangible assets, except customer relationships, are amortized on a straight-line basis.

Customer relationships are amortized on a double declining balance method.

(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 $ 0.5 million and $ 2.2 million for the three and nine month periods ended October 1, 2022, respectively.

For the three and nine month periods ended October 2, 2021, amortization expense was $ 1.1 million and $ 4.2 million, respectively.

Amortization expense for our definite-lived intangible assets was $ 1.1 million and $ 1.1 million for the three-month periods ended April 1, 2023 and April 2, 2022, respectively.

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

12 unchanged sentences

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.

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.

12 unchanged sentences

Sales and usage-based taxes are excluded from revenues.

Three Months Ended Nine Months Ended

Product type October 1, 2022 October 2, 2021 October 1, 2022 October 2, 2021

(In thousands) (In thousands)

Three Months Ended

Product type April 1, 2023 April 2, 2022

(In thousands)

Specialty products $ 567,838 $ 767,907

8 unchanged sentences

Sales and usage-based taxes are excluded from revenues.

Three Months Ended Nine Months Ended

Sales channel October 1, 2022 October 2, 2021 October 1, 2022 October 2, 2021

(In thousands) (In thousands)

Three Months Ended

Sales channel April 1, 2023 April 2, 2022

(In thousands)

Warehouse and reload $ 686,632 $ 1,077,946

2 unchanged sentences

Total net sales $ 797,904 $ 1,302,305

Assets Held for Sale

As of October 1, 2022, we had no assets or liabilities classified as “held for sale”.

As of January 1, 2022, the net book value of total assets classified as “held for sale” was $ 2.6 million and was included in other current assets in our condensed consolidated balance sheet.

As of January 1, 2022, the book value of total liabilities classified as “held for sale” was $ 1.9 million and was included in other current liabilities in our condensed consolidated balance sheet.

Assets classified as “held for sale” as of January 1, 2022, consisted of fixed assets, at net book value, and current assets, including raw material and work in process inventory, affiliated with one of our business locations in the Midwest.

Liabilities classified as “held for sale” as of January 1, 2022 included current liabilities, such as accounts payable, directly associated with those assets held for sale that will be transferred with the assets held for sale.

As of January 1, 2022, we planned to sell these assets and transfer these liabilities within the next 12 months.

During the second quarter of 2022, we completed the sale of assets and liabilities previously classified as held for sale.

Long-Term Debt

As of October 1, 2022 and January 1, 2022, long-term debt consisted of the following:

October 1, 2022 January 1, 2022

As of April 1, 2023 and December 31, 2022, long-term debt consisted of the following:

April 1, 2023 December 31, 2022

(In thousands)

10 unchanged sentences

Long-term debt, net of current maturities $ 558,430 $ 558,410

(1) As of October 1, 2022 and January 1, 2022, our 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 $ 292.1 million and $ 291.3 million at October 1, 2022 and January 1, 2022, respectively.

This presentation is net of their discount of $ 3.6 million and $ 4.0 million and the combined carrying value of our debt issuance costs of $ 4.3 million and $ 4.7 million at October 1, 2022 and January 1, 2022, respectively.

(1) As of April 1, 2023 and December 31, 2022, our 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 million and $ 292.4 million at April 1, 2023 and December 31, 2022, respectively.

This presentation is net of their discount of $ 3.4 million and $ 3.5 million and the combined carrying value of our debt issuance costs of $ 3.9 million and $ 4.1 million at April 1, 2023 and December 31, 2022, respectively.

Our senior secured notes are presented in this table at their face value.

(2) The average effective interest rate was zero percent and 2.6 percent for the quarters ended October 1, 2022 and January 1, 2022, respectively.

(2) The average effective interest rate for our revolving credit facility was zero percent for the quarters ended April 1, 2023 and April 2, 2022.

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

3 unchanged sentences

The majority of net proceeds from the offering of the 2029 Notes were used to repay borrowings under our revolving credit facility, as defined below.

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 in the fair value hierarchy.

Our valuation technique is based primarily on observable market prices in less active markets.

Revolving Credit Facility

In April 2018, we entered into a revolving credit facility with Wells Fargo Bank, National Association, as administrative agent (“the Agent”), and certain other financial institutions party thereto.

In August 2021, we entered into a second amendment to our 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 (as amended, the “Revolving Credit Facility”).

As amended, the Revolving Credit Facility provides for a senior secured asset-based revolving loan and letter of credit facility of up to $ 350 million.

The Borrowers’ obligations 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 the Revolving Credit Facility bear interest at a rate per annum equal to (i) LIBOR 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, 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 the Revolving Credit Facility are subject to availability under the Borrowing Base (as that term is defined in the revolving credit agreement).

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-based revolving loan and letter of credit facility of up to $ 350.0 million.

Our obligations 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 bear interest at a rate per annum equal to (i) LIBOR 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, 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.

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 the facility, LIBOR will be replaced with the Secured Overnight Financing Rate (“SOFR”) with respect to the applicable variable rate interest options thereunder, with effect on or before June 30, 2023.

Borrowings under our Revolving Credit Facility are subject to availability under the Borrowing Base (as that term is defined in the revolving credit agreement).

The Borrowers are required to repay revolving loans thereunder to the extent that such revolving loans exceed the Borrowing Base then in effect.

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 October 1, 2022, we had zero outstanding borrowings and excess availability, including cash in qualified accounts, of $ 575.8 million under our Revolving Credit Facility.

As of January 1, 2022, we had zero outstanding borrowings and excess availability, including cash in qualified accounts, of $ 431.7 million under our Revolving Credit Facility.

Our average effective interest rate under the facility was zero percent and 2.6 percent for the quarters ended October 1, 2022 and January 1, 2022, respectively.

The Revolving Credit Facility contains certain financial and other covenants, and our right to borrow under the Revolving Credit Facility is conditioned upon, among other things, our compliance with these covenants.

We were in compliance with all covenants under the Revolving Credit Facility as of October 1, 2022.

Term Loan Facility

On April 2, 2021, we repaid the remaining outstanding principal balance of our former term loan facility, and, as a result, as of January 1, 2022 and October 1, 2022, we had zero outstanding borrowings under the term loan facility, which has been extinguished.

In connection with our repayment of the outstanding principal balance in full on April 2, 2021, we expensed $ 5.8 million of debt issuance costs that we were amortizing in connection with our former term loan facility.

These costs are included within interest expense, net on the condensed consolidated statements of operations and reported separately as an adjustment to net income in our condensed consolidated statements of cash flows.

As the facility was paid in full as of April 2, 2021, our average effective interest rate under the facility, exclusive of fees and prepayment premiums, was zero percent for the quarters ended October 1, 2022 and January 1, 2022.

Our 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.

Finance Lease Obligations

1 unchanged sentence

For more information on our finance lease obligations, refer to Note 9, Leases .

Net Periodic Pension Benefit

The following table shows the components of our net periodic pension benefit:

Three Months Ended Nine Months Ended

Pension-related items October 1, 2022 October 2, 2021 October 1, 2022 October 2, 2021

(In thousands) (In thousands)

Net Periodic Pension Cost (Benefit)

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

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

1 unchanged sentence

Amortization of unrecognized gain 302 209

Net periodic pension benefit $ ( 362 ) $ ( 314 ) $ ( 1,086 ) $ ( 942 )

Net periodic pension cost (benefit) $ 594 $ ( 362 )

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

The net periodic pension benefit is included in other expense (income), net in our condensed consolidated statement of operations and comprehensive income.

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

During 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.

Stock Compensation

During the three and nine month periods ended October 1, 2022, we incurred stock compensation expense of $ 2.1 million and $ 6.0 million, respectively.

For the three and nine month periods ended October 2, 2021, we incurred stock compensation expense of $ 1.6 million and $ 5.0 million, respectively.

The increase in our stock compensation expense for the three month period ended October 1, 2022 compared to the prior-year period is primarily attributable to the timing of award vesting and associated expense recognition.

The increase in our stock compensation expense for the nine month period ended October 1, 2022 compared to the prior-year period is primarily attributable to an increase 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.

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 to the acceleration of unrecognized compensation cost in conjunction with our announced leadership transition.

Additionally, there was an increase 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.

As of April 1, 2023, we have accrued $ 1.3 million for tax withholding obligations of our employees upon vesting of restricted stock unit awards.

This has been presented as a non-cash transaction in our condensed consolidated statement of cash flows.

We have operating and finance leases for certain of our distribution facilities, office space, land, mobile fleet, and equipment.

16 unchanged sentences

As noted in the table below, a majority of our finance leases, formally known as capital leases, relate to real estate.

The following table presents our assets and liabilities related to our leases as of October 1, 2022 and January 1, 2022:

Lease assets and liabilities October 1, 2022 January 1, 2022

The following table presents our assets and liabilities related to our leases as of April 1, 2023 and December 31, 2022:

Lease assets and liabilities April 1, 2023 December 31, 2022

(In thousands)

11 unchanged sentences

Total lease liabilities $ 315,662 $ 320,518

(1) Finance lease right-of-use assets are presented net of accumulated amortization of $ 87.4 million and $ 73.7 million as of October 1, 2022 and January 1, 2022, respectively.

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

The components of lease expense were as follows:

Three Months Ended Nine Months Ended

Components of lease expense October 1, 2022 October 2, 2021 October 1, 2022 October 2, 2021

(In thousands) (In thousands)

Three Months Ended

Components of lease expense April 1, 2023 April 2, 2022

(In thousands)

Operating lease cost:

$ 2,529 $ 2,959 $ 7,625 $ 8,942

Operating lease cost $ 2,918 $ 2,517

Sublease income ( 578 ) ( 652 )

Total operating lease costs $ 2,340 $ 1,865

Finance lease cost:

2 unchanged sentences

Total finance lease costs $ 8,133 $ 9,870

Cash flow information related to leases was as follows:

Three Months Ended Nine Months Ended

Cash flow information October 1, 2022 October 2, 2021 October 1, 2022 October 2, 2021

(In thousands) (In thousands)

Supplemental cash flow information related to leases was as follows:

Three Months Ended

Cash flow information April 1, 2023 April 2, 2022

(In thousands)

Cash paid for amounts included in the measurement of lease liabilities

3 unchanged sentences

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

Three Months Ended Nine Months Ended

Non-cash information October 1, 2022 October 2, 2021 October 1, 2022 October 2, 2021

(In thousands) (In thousands)

Three Months Ended

Non-cash information April 1, 2023 April 2, 2022

(In thousands)

Right-of-use assets obtained in exchange for lease obligations

2 unchanged sentences

Supplemental balance sheet information related to leases was as follows:

Balance sheet information October 1, 2022 January 1, 2022

Balance sheet information April 1, 2023 December 31, 2022

(In thousands)

9 unchanged sentences

Finance leases 8.89 % 8.87 %

The major categories of our finance lease liabilities as of October 1, 2022 and January 1, 2022 are as follows:

Category October 1, 2022 January 1, 2022

The major categories of our finance lease liabilities as of April 1, 2023 and December 31, 2022 are as follows:

Category April 1, 2023 December 31, 2022

(In thousands)

2 unchanged sentences

Total finance leases $ 270,764 $ 273,075

As of October 1, 2022, maturities of lease liabilities were as follows:

Fiscal year Operating leases Finance leases

(In thousands)

2022 $ 3,214 $ 6,558

2023 11,039 32,943

2024 10,310 32,329

2025 9,323 28,709

2026 6,114 32,189

Thereafter 38,745 351,962

Total lease payments $ 78,745 $ 484,690

imputed interest ( 28,225 ) ( 211,954 )

Total $ 50,520 $ 272,736

On January 1, 2022, maturities of lease liabilities were as follows:

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.

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 condensed consolidated balance sheets, including options to extend lease terms that are reasonably certain of being exercised.

Fiscal year Operating leases Finance leases

12 unchanged sentences

From time to time, we are involved in various proceedings incidental to our businesses, and we are subject to a variety of environmental and pollution control laws and regulations in all jurisdictions in which we operate.

Although the ultimate outcome of these proceedings cannot be determined with certainty, based on presently available information management believes that adequate reserves have been established for probable losses with respect thereto and receivables have been recorded for expected receipts from settlements.

Management further believes that, while the ultimate outcome of one or more of these matters could be material to our operating results in any given quarter, it will not have a materially adverse effect on our consolidated financial condition, results of operations, or cash flows.

Although the ultimate outcome of these proceedings cannot be determined with certainty, based on presently available information management

believes that adequate reserves have been established for probable losses with respect thereto and receivables have been recorded for expected receipts from settlements.

Collective Bargaining Agreements

As of October 1, 2022, we employed approximately 2,411 associates and less than one percent of our associates are employed on a part-time basis.

As of April 1, 2023, we employed approximately 2,100 associates and less than one percent of our associates are employed on a part-time basis.

Approximately 16 percent of our associates are represented by various local labor unions with terms and conditions of employment governed by Collective Bargaining Agreements (“CBAs”).

Four CBAs covering approximately six percent of our associates are up for renewal in fiscal 2023, which we expect to renegotiate by the end of fiscal 2023.

Four CBAs covering approximately four percent of our associates are up for renewal in the remainder of fiscal 2023, which we expect to renegotiate by the end of fiscal 2023.

Accumulated Other Comprehensive Loss

2 unchanged sentences

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 of accumulated other comprehensive loss for the nine months ended October 1, 2022 were as follows:

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

benefit pension

1 unchanged sentence

net of tax Total Accumulated Other Comprehensive Loss

January 1, 2022, beginning balance, net of tax $ ( 30,245 ) $ 885 $ ( 29,360 )

December 31, 2022, beginning balance

$ ( 32,675 ) $ 1,263 $ ( 31,412 )

Other comprehensive income, net of tax 239 ( 11 ) 228

October 1, 2022, ending balance, net of tax $ ( 29,777 ) $ 861 $ ( 28,916 )

April 1, 2023, ending balance, net of tax

$ ( 32,436 ) $ 1,252 $ ( 31,184 )

Effective Tax Rate

Our effective tax rate for the three months ended October 1, 2022 and October 2, 2021 was 26.2 percent and 25.6 percent, respectively.

Our effective tax rate for the nine months ended October 1, 2022 and October 2, 2021 was 25.4 percent and 24.7 percent, respectively.

Our effective tax rate for the three and nine months ended October 1, 2022 and October 2, 2021 were impacted by the permanent addback of certain nondeductible expenses, including meals and entertainment and executive compensation.

Each nine-month period also includes a benefit from the vesting of restricted stock units.

Our effective tax rate for the three and nine months ended October 2, 2021 also benefited from the partial release of our valuation allowance for state net operating loss carryforwards we anticipated being able to utilize based on our taxable income through the end of the first nine months of fiscal 2021.

Deferred Tax Assets

Quarterly, we assess the carrying value of our deferred tax assets for impairment by evaluating the weight of available evidence at the end of each fiscal quarter.

In our evaluation of the weight of available evidence at the end of the current quarter, we considered the recent reported income in the current quarter, as well as the reported income for 2021 and 2020 and the reported losses for 2019, which resulted in a three-year cumulative income situation as positive evidence which carried substantial weight.

While this was substantial, it was not the only evidence we evaluated.

We also considered evidence related to the four sources of taxable income to determine whether such positive evidence outweighed the negative evidence.

The evidence considered included:

• future reversals of existing taxable temporary differences;

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

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

• tax planning strategies.

In addition to the positive evidence discussed above, we considered as positive evidence forecasted taxable income, the detail scheduling of timing of the reversal of our deferred tax assets and liabilities, and the evidence from business and tax planning

As of October 1, 2022, in our evaluation of the weight of available evidence, we concluded that our net deferred tax assets were not impaired.

Our effective tax rate for the three months ended April 1, 2023 and April 2, 2022 was 26.5 percent and 26.2 percent, respectively.

Our effective tax rates for the three months ended 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 income taxes, see Note 8 of our Annual Report on Form 10-K for the fiscal year ended December 31, 2022.

Income Per Share

1 unchanged sentence

We calculate diluted income per share using the treasury stock method, by dividing net income by the weighted average number of common shares outstanding plus the dilutive effect of outstanding share-based awards, including restricted stock units.

On August 23, 2021, our Board of Directors approved a stock repurchase program pursuant to which we may repurchase up to $ 25.0 million of our common stock.

During the first quarter of fiscal 2022, we repurchased 81,331 shares of our common stock under this program at an average price of $ 79.03 per share.

On May 3, 2022, our Board of Directors increased our share repurchase authorization to $ 100.0 million and we entered into an Accelerated Share Repurchase Agreement (“ASR Agreement”) with Jefferies LLC to repurchase $ 60.0 million of our common stock.

Under the ASR Agreement, we received initial delivery of 553,584 shares of common stock on May 3, 2022 (the “Transaction Date”) representing approximately 65 percent of the total number of shares of common stock initially underlying the ASR Agreement based on our closing stock price of $ 70.45 on May 2, 2022.

The initial delivery of 553,584 shares reduced the number of common shares outstanding on the Transaction Date and, as a result, reduced the weighted average number of common shares outstanding used to calculate basic income per share and diluted income per share for the nine month period ended October 1, 2022.

Final settlement of the shares of common stock repurchased under the ASR Agreement occurred on September 15, 2022 based on the average of the daily volume-weighted average price of our common stock during the repurchase period under the ASR Agreement, less a discount and other adjustments pursuant to the terms and conditions of the ASR Agreement.

At settlement, we received an additional 247,431 shares of common stock, which reduced the weighted average number of common shares outstanding used to calculate basic income per share and diluted income per share for the three and nine month periods ended October 1, 2022.

Under our ASR Agreement, we repurchased a total of 801,015 shares of our common stock at an average price of $ 74.90 per share.

The reconciliation of basic net income and diluted net income per common share for the three and nine month periods ended October 1, 2022 and October 2, 2021 were as follows:

Three Months Ended Nine Months Ended

October 1, 2022 October 2, 2021 October 1, 2022 October 2, 2021

(In thousands, except per share data) (In thousands, except per share data)

The reconciliation of basic net income and diluted net income per common share for the three-month periods ended 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

4 unchanged sentences

Diluted income per share $ 1.94 $ 13.19

Approximately 77,000 and 2,000 weighted-average share-based awards were excluded from the computation of earnings per share assuming dilution during the three months ended October 1, 2022 and October 2, 2021, respectively, as the awards would have been anti-dilutive for the periods presented.

Approximately 58,000 and 119,000 weighted-average share-based awards were excluded from the computation of earnings per share assuming dilution during the nine months ended October 1, 2022 and October 2, 2021, respectively, as the awards would have been anti-dilutive for the periods presented.

Subsequent Event

On October 3, 2022, we announced that we entered into and closed on a Stock Purchase Agreement (the “Purchase Agreement”) with Vandermeer Forest Products, Inc., a Washington corporation (“Vandermeer”), and the sole shareholder of Vandermeer.

Vandermeer is a premier wholesale distributor of building products, serving over 250 customers across the Pacific Northwest, Alaska, Hawaii, British Columbia, and Alberta.

The acquisition of Vandermeer adds three distribution branches in Washington state and provides direct access to Seattle and Portland, two of the top 15 metropolitan statistical areas in the United States.

Additionally, we now have coast-to-coast reach and serve all 50 states.

Under the Purchase Agreement, we acquired all of the outstanding capital stock of Vandermeer for an aggregate purchase price of approximately $ 63.4 million, on a debt-free, cash-free basis, subject to customary post-closing adjustments in respect of net working capital, cash, transaction expenses and indebtedness.

In addition, we acquired Vandermeer’s Spokane, Washington distribution facility and related real estate from the sole shareholder of Vandermeer for approximately $ 3.6 million, resulting in an aggregate purchase price of $ 67.0 million for the business and real property, which we funded with cash on hand.

We are currently in the process of finalizing the accounting for this transaction and expect to complete our preliminary allocation of the purchase consideration by the end of fiscal 2022.

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

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 1. Financial Statements