What changed in this filing

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Item 1. Financial Statements

2023-08-01 compared with 2023-05-02 · 107 added, 82 removed, 410 unchanged (32% of the section changed)

4 unchanged sentences

(In thousands, except per share data)

Three Months Ended

April 1, 2023 April 2, 2022

Three Months Ended Six Months Ended

July 1, 2023 July 2, 2022 July 1, 2023 July 2, 2022

Net sales $ 815,967 $ 1,239,379 $ 1,613,871 $ 2,541,684

5 unchanged sentences

Amortization of deferred gains on real estate ( 984 ) ( 984 ) ( 1,968 ) ( 1,968 )

Gains from sales of property — ( 144 ) — ( 144 )

Other operating expenses 993 626 4,109 1,464

20 unchanged sentences

(In thousands, except share data)

April 1, 2023 December 31, 2022

July 1, 2023 December 31, 2022

Current assets:

35 unchanged sentences

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

9,008,476 and 9,048,603 outstanding on July 1, 2023 and December 31, 2022, respectively

Additional paid-in capital 190,770 200,748

20 unchanged sentences

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

Net income — — — — 24,466 24,466

Impact of pension plan, net of tax — — — 225 — 225

Vesting of restricted stock units 95 — ( 1 ) — — ( 1 )

Compensation related to share-based grants — — 1,926 — — 1,926

Repurchase of shares to satisfy employee tax withholdings ( 24 ) — ( 2,071 ) — — ( 2,071 )

Obligation for repurchase of shares to satisfy employee tax withholdings ( 10 ) — ( 913 ) — — ( 913 )

Common stock repurchase and retirement ( 142 ) ( 1 ) ( 11,598 ) — — ( 11,599 )

Other — — — ( 11 ) — ( 11 )

Balance, July 1, 2023 9,008 $ 90 $ 190,770 $ ( 30,970 ) $ 462,881 $ 622,771

Common Stock Additional

11 unchanged sentences

Balance, April 2, 2022 9,651 $ 96 $ 263,428 $ ( 29,184 ) $ 257,836 $ 492,176

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

See accompanying Notes.

2 unchanged sentences

(In thousands)

Three Months Ended

April 1, 2023 April 2, 2022

Six Months Ended

July 1, 2023 July 2, 2022

Cash flows from operating activities:

3 unchanged sentences

Amortization of debt discount and issuance costs 659 493

Gains from sales of property — ( 144 )

Deferred income tax 550 ( 2,752 )

26 unchanged sentences

Non-cash transactions:

Property and equipment acquired under finance leases $ 3,400 $ 2,313

Obligation for repurchase of shares to satisfy employee tax withholdings $ 913 $ —

2 unchanged sentences

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

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 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 derived the condensed consolidated balance sheet at July 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 and six months ended July 1, 2023 and July 2, 2022, our balance sheets at July 1, 2023 and December 31, 2022, our statements of stockholders’ equity for the six months ended July 1, 2023 and July 2, 2022, and our statements of cash flows for the six months ended July 1, 2023 and July 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 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.

The results for the three and six months ended July 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.

7 unchanged sentences

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.

For the six months ended July 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 six months ended July 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.

10 unchanged sentences

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.

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.

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, 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 Company’s revolving credit agreement, as further discussed in Note 6, Long-Term Debt , to these condensed consolidated financial statements, was amended on June 27, 2023, to replace references to LIBOR to Secured Overnight Financing Rate (“SOFR”) for determining interest payable on current and future borrowings.

The guidance in this ASU provides a practical expedient which simplifies accounting analyses under current U.S.

10 unchanged sentences

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.

During the first fiscal quarter of 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 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.

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 July 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.

1 unchanged sentence

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.

As of July 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 April 1, 2023, goodwill was $ 55.4 million.

As of July 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 first quarter of fiscal 2023.

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

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 second quarter of fiscal 2023.

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

4 unchanged sentences

Balance at April 1, 2023 $ 55,372

Acquisitions —

Balance at July 1, 2023 $ 55,372

Definite-Lived Intangible Assets

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

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

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

9 unchanged sentences

Amortization Expense

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.

Amortization expense for our definite-lived intangible assets was $ 1.0 million and $ 2.1 million for the three and six month periods ended July 1, 2023, respectively.

For the three and six month periods ended July 2, 2022, amortization expense was $ 0.6 million and $ 1.7 million, respectively.

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

27 unchanged sentences

Sales and usage-based taxes are excluded from revenues.

Three Months Ended

Product type April 1, 2023 April 2, 2022

(In thousands)

Three Months Ended Six Months Ended

Product type July 1, 2023 July 2, 2022 July 1, 2023 July 2, 2022

(In thousands) (In thousands)

Specialty products $ 570,990 $ 787,860 $ 1,138,828 $ 1,555,767

8 unchanged sentences

Sales and usage-based taxes are excluded from revenues.

Three Months Ended

Sales channel April 1, 2023 April 2, 2022

(In thousands)

Three Months Ended Six Months Ended

Sales channel July 1, 2023 July 2, 2022 July 1, 2023 July 2, 2022

(In thousands) (In thousands)

Warehouse and reload $ 695,508 $ 1,020,341 $ 1,382,140 $ 2,098,287

3 unchanged sentences

Long-Term Debt

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

April 1, 2023 December 31, 2022

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

July 1, 2023 December 31, 2022

(In thousands)

10 unchanged sentences

Long-term debt, net of current maturities $ 556,034 $ 558,410

(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.

(1) As of July 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 $ 293.1 million and $ 292.4 million at July 1, 2023 and December 31, 2022, respectively.

This presentation is net of their discount of $ 3.3 million and $ 3.5 million and the combined carrying value of our debt issuance costs of $ 3.7 million and $ 4.1 million at July 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 for our revolving credit facility was zero percent for the quarters ended April 1, 2023 and April 2, 2022.

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

As of July 1, 2023 and December 31, 2022, the fair value of our 2029 Notes was approximately $ 274.0 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.

1 unchanged sentence

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.

Our obligations under the Revolving Credit Facility (as defined below) 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.

On June 27, 2023, we entered in to a third amendment to the credit facility to, among other things, replace the interest rate based on LIBOR applicable to borrowings under the Credit Agreement with an interest rate based on the SOFR and a customary spread adjustment (as amended, the “Revolving Credit Facility”).

Our Revolving Credit Facility includes available interest rate options and was previously based on LIBOR, which was discontinued as an available rate option after June 30, 2023.

Borrowings under our Revolving Credit Facility bear interest at a rate per annum equal to (i) 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 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 Revolving Credit Facility are subject to availability under the Borrowing Base (as that term is defined in the Revolving Credit Agreement).

1 unchanged sentence

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 July 1, 2023, we had zero outstanding borrowings and excess availability, including cash in qualified accounts, of $ 764.8 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.

Available borrowing capacity under our Revolving Credit Facility was $ 346.5 million on July 1, 2023 and December 31, 2022.

Our average effective interest rate under the Revolving Credit Facility was zero percent for the quarters ended July 1, 2023 and July 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.

We were in compliance with all covenants under our Revolving Credit Facility as of July 1, 2023.

Finance Lease Obligations

3 unchanged sentences

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)

Three Months Ended Six Months Ended

Pension-related items July 1, 2023 July 2, 2022 July 1, 2023 July 2, 2022

(In thousands) (In thousands)

Service cost (1)

$ — $ — $ — $ —

Interest cost on projected benefit obligation 1,105 606 2,209 1,212

4 unchanged sentences

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.

During the three and six months ended July 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.

1 unchanged sentence

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 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.

During the three and six months ended July 1, 2023, we incurred stock compensation expense of $ 1.9 million and $ 6.5 million, respectively.

For the three and six months ended July 2, 2022, we incurred stock compensation expense of $ 1.8 million and $ 3.9 million, respectively.

The increase in our stock compensation expense for the six-month period ended July 1, 2023 is primarily attributable to the acceleration of unrecognized compensation cost in conjunction with our announced leadership transition.

As of July 1, 2023, we have accrued $ 0.9 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.

17 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 April 1, 2023 and December 31, 2022:

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

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

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

(In thousands)

11 unchanged sentences

Total lease liabilities $ 316,126 $ 320,518

(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.

(1) Finance lease right-of-use assets are presented net of accumulated amortization of $ 94.3 million and $ 90.1 million as of July 1, 2023 and December 31, 2022, respectively.

The components of lease expense were as follows:

Three Months Ended

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

(In thousands)

Three Months Ended Six Months Ended

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

(In thousands) (In thousands)

Operating lease cost:

7 unchanged sentences

Supplemental cash flow information related to leases was as follows:

Three Months Ended

Cash flow information April 1, 2023 April 2, 2022

(In thousands)

Three Months Ended Six Months Ended

Cash flow information July 1, 2023 July 2, 2022 July 1, 2023 July 2, 2022

(In thousands) (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

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

(In thousands)

Three Months Ended Six Months Ended

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

(In thousands) (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 April 1, 2023 December 31, 2022

Balance sheet information July 1, 2023 December 31, 2022

(In thousands)

9 unchanged sentences

Finance leases 8.90 % 8.87 %

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

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

Category July 1, 2023 December 31, 2022

(In thousands)

3 unchanged sentences

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.

Below is a summary of undiscounted finance and operating lease liabilities that have initial terms in excess of one year as of July 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.

13 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.

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, our results of operations, or our cash flows.

Collective Bargaining Agreements

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.

As of July 1, 2023, we employed approximately 2,000 associates and less than one percent of our associates are employed on a part-time basis.

Approximately 19 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 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.

Two CBAs covering approximately five percent of our associates are up for renewal in the remainder of fiscal 2023, which we expect to renegotiate before their renewal dates.

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 three months ended April 1, 2023, were as follows:

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

benefit pension

4 unchanged sentences

Other comprehensive income, net of tax 464 ( 22 ) 442

April 1, 2023, ending balance, net of tax

July 1, 2023, ending balance, net of tax

$ ( 32,211 ) $ 1,241 $ ( 30,970 )

Effective Tax Rate

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.

Our effective tax rate for the three months ended July 1, 2023 and July 2, 2022 were 24.0 percent and 23.1 percent, respectively.

Our effective tax rate for the six months ended July 1, 2023 and July 2, 2022 were 25.1 percent and 25.1 percent, respectively.

Our effective tax rates for the three and six months ended July 1, 2023 and July 2, 2022 were impacted by state taxes as well as the permanent addback of certain nondeductible expenses, including meals and entertainment and executive compensation, 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.

2 unchanged sentences

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.

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)

The reconciliation of basic net income and diluted net income per common share for the three and six month periods ended July 1, 2023 and July 2, 2022 were as follows:

Three Months Ended Six Months Ended

July 1, 2023 July 2, 2022 July 1, 2023 July 2, 2022

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

Net income $ 24,466 $ 71,272 $ 42,278 $ 204,681

4 unchanged sentences

Diluted income per share $ 2.70 $ 7.48 $ 4.67 $ 21.07

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.

Approximately 49,000 and 21,000 weighted-average share-based awards were excluded from the computation of earnings per share assuming dilution during the three months ended July 1, 2023 and July 2, 2022, respectively, as the awards would have been anti-dilutive for the periods presented.

Approximately 40,000 and 13,000 weighted-average share-based awards were excluded from the computation of earnings per share assuming dilution during the six months ended July 1, 2023 and July 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