What changed in this filing

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Item 1. Financial Statements

2024-07-30 compared with 2024-04-30 · 181 added, 172 removed, 336 unchanged (51% of the section changed)

4 unchanged sentences

(In thousands, except per share data)

Three Months Ended

March 30, 2024 April 1, 2023

Three Months Ended Six Months Ended

June 29, 2024 July 1, 2023 June 29, 2024 July 1, 2023

Net sales $ 768,363 $ 815,967 $ 1,494,607 $ 1,613,871

27 unchanged sentences

(In thousands, except share data)

March 30, 2024 December 30, 2023

June 29, 2024 December 30, 2023

Current assets:

24 unchanged sentences

Long-term debt 294,403 293,743

Finance lease liabilities - noncurrent 279,910 274,248

Operating lease liabilities - noncurrent 30,248 32,519

Real estate deferred gains - noncurrent 65,648 66,599

Finance lease liabilities, less current portion 280,206 274,248

Operating lease liabilities, less current portion 37,369 32,519

Real estate deferred gains, less current portion 64,697 66,599

Other non-current liabilities 19,607 17,644

2 unchanged sentences

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

Preferred Stock, $ 0.01 par value, 30,000,000 shares authorized, none outstanding

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

8,551,462 and 8,650,046 outstanding, respectively

Additional paid-in capital 151,279 165,060

7 unchanged sentences

Common Stock Additional

Paid-In Capital Retained Earnings Stockholders’ Equity Total

Paid-In Capital Retained Earnings Stockholders’ Equity

Shares Amount

5 unchanged sentences

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

Net income — — — 14,336 14,336

Vesting of restricted stock units 57 1 ( 1 ) — —

Compensation related to share-based grants — — 1,405 — 1,405

Repurchase of shares to satisfy employee tax withholdings ( 16 ) (a) ( 1,545 ) — ( 1,545 )

Common stock repurchase and retirement ( 152 ) ( 2 ) ( 15,083 ) — ( 15,085 )

Balance, June 29, 2024 8,551 $ 86 $ 151,279 $ 500,967 $ 652,332

(a) Activity rounds to less than one thousand dollars

1 unchanged sentence

Paid-In Capital Accumulated

Comprehensive Loss Retained Earnings Stockholders’ Equity Total

Comprehensive Loss Retained Earnings Stockholders’ Equity

Shares Amount

7 unchanged sentences

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

Net income — — — — 24,466 24,466

Other comprehensive income — — — 214 — 214

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 )

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

There has been no activity for Preferred Stock.

3 unchanged sentences

(In thousands)

Three Months Ended

March 30, 2024 April 1, 2023

Six Months Ended

June 29, 2024 July 1, 2023

Cash flows from operating activities:

Net income $ 31,828 $ 42,278

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

Adjustments to reconcile net income to cash provided by operations:

Depreciation and amortization 19,553 15,669

9 unchanged sentences

Other assets and liabilities ( 188 ) ( 8,115 )

Net cash (used in) provided by operating activities ( 31,135 ) 88,965

Net cash provided by operating activities 4,668 153,118

Cash flows from investing activities:

3 unchanged sentences

Cash flows from financing activities:

Common stock repurchase and retirement ( 14,529 ) ( 11,599 )

Repurchase of shares to satisfy employee tax withholdings ( 2,452 ) ( 3,960 )

7 unchanged sentences

Taxes paid during the period $ 22,093 $ 10,821

Non-cash transactions:

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

Non-cash investing and financing activities:

Property and equipment acquired under finance leases $ 11,150 $ 3,400

Liabilities for properties and equipment investments $ 1,562 $ —

Obligation for shares repurchases not yet settled $ 556 $ 913

See accompanying Notes.

1 unchanged sentence

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

March 30, 2024

Basis of Presentation and Significant Accounting Policies

June 29, 2024

Basis of Presentation

BlueLinx Holdings Inc., including consolidated subsidiaries (collectively, the “Company”), is a leading wholesale distributor of residential and commercial building products in the United States.

9 unchanged sentences

The Company’s consolidated balance sheet as of December 30, 2023 contained herein was derived from the audited consolidated balance sheet included in the Company’s Annual Report on Form 10-K for the fiscal year ended December 30, 2023 (the “2023 Form 10-K”), as filed with the Securities and Exchange Commission (“SEC”) on February 20, 2024.

In the opinion of 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 the Company’s results of operations and comprehensive income for the three months ended March 30, 2024 and April 1, 2023, financial condition as of March 30, 2024 and December 30, 2023, changes in stockholders’ equity for the three months ended March 30, 2024 and April 1, 2023, and cash flows for the three months ended March 30, 2024 and April 1, 2023.

The Company has condensed or omitted certain notes and other information from the unaudited condensed consolidated financial statements presented in this report.

Therefore, these condensed financial statements and accompanying notes should be read in conjunction with the Company’s 2023 Form 10-K.

The results for the three months ended March 30, 2024 are not necessarily indicative of results that may be expected for the full fiscal year ending December 28, 2024, or any other interim period.

The Company operates on a 5-4-4 fiscal calendar and its fiscal year ends on the Saturday closest to December 31st of each fiscal year and may comprise 53 weeks in certain years.

The results for the three and six months ended June 29, 2024 are not necessarily indicative of results that may be expected for the full fiscal year ending December 28, 2024, or any other interim period.

The Company operates on a 5-4-4 fiscal calendar and its fiscal year ends on the Saturday closest to December 31st of each year and may comprise 53 weeks in certain years.

Fiscal 2024 contains 52 weeks and will end on December 28, 2024.

Fiscal 2023 contained 52 weeks and ended on December 30, 2023.

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

3 unchanged sentences

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

The Company did not adopt any new accounting standards during the fiscal year ended December 30, 2023 or during the six months ended June 29, 2024.

Recent Accounting Pronouncements - Not Yet Adopted

Segment Reporting Improvements .

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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.

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 expenses used by the CODM to manage each segment’s operations.

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The Company included all material charges directly incurred in bringing inventory to its existing condition and 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 March 30, 2024, the Company assessed the carrying value of 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.

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 and net realizable value, which also considers items that may be considered damaged, excess, and obsolete inventory.

As of June 29, 2024, the Company recorded a lower of cost and net realizable value provision of $ 2.4 million as a result of the decrease in the value of the Company’s structural lumber inventory related to the decline in wood-based commodity prices as of the end of the reporting period.

As of December 30, 2023, the Company had no such inventory provision.

Substantially all of 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.

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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.

During the first quarter of fiscal 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 originally paid and accounted for by the Company in prior reporting periods at the then-current rates.

Impacted inventories have since been sold.

These adjustment amounts are reflected in Costs of 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.

These adjustment amounts are reflected in Cost of products sold and Interest expense, net, respectively, on the Company’s unaudited condensed consolidated statement of operations for the six months ended June 29, 2024.

See Note 9, Commitments and Contingencies , for disclosure concerning another matter related to import duties.

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.

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, 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 of the enterprise exceeded the carrying value of the enterprise, including goodwill.

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 value of the Company’s goodwill was $ 55.4 million.

Definite-Lived Intangible Assets

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

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

Amortization (1)

Net Carrying Amounts

($ in thousands)

Customer relationships 9 $ 48,500 $ ( 19,722 ) $ 28,778

Noncompete agreements 4 8,954 ( 8,464 ) 490

Trade names 2 7,826 ( 7,326 ) 500

Total $ 65,280 $ ( 35,512 ) $ 29,768

(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 definite-lived intangible assets was approximately $ 1.0 million and $ 1.1 million for the three-months ended March 30, 2024 and April 1, 2023, respectively.

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

Fiscal Year Estimated Amortization

(In thousands)

Goodwill and Intangible Assets, net

During the fiscal quarter and year-to-date period ended June 29, 2024, the only change to the carrying values of Goodwill and Intangible assets, net, was the amortization of Intangible assets, all of which have definite lives.

Amortization expense for intangible assets was $ 1.0 million and $ 2.0 million for the three and six month periods ended June 29, 2024, respectively.

For the three and six month periods ended July 1, 2023, amortization expense was $ 1.0 million and $ 2.1 million, respectively.

Revenue Recognition

The following table presents the Company’s revenues disaggregated by product type.

The following table presents the Company’s revenues disaggregated by revenue source.

Sales and usage-based taxes are excluded from revenues.

Three Months Ended

Product type March 30, 2024 April 1, 2023

Three Months Ended Six Months Ended

Product type June 29, 2024 July 1, 2023 June 29, 2024 July 1, 2023

(In thousands)

4 unchanged sentences

Sales and usage-based taxes are excluded from revenues.

Three Months Ended

Sales channel March 30, 2024 April 1, 2023

Three Months Ended Six Months Ended

Sales channel June 29, 2024 July 1, 2023 June 29, 2024 July 1, 2023

(In thousands)

8 unchanged sentences

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

Debt and Finance Leases

As of March 30, 2024 and December 30, 2023, outstanding debt and finance leases consisted of the following:

March 30, 2024 December 30, 2023

Debt and Finance Lease Obligations

As of June 29, 2024, and December 30, 2023, debt and finance lease obligations consisted of the following:

June 29, 2024 December 30, 2023

(In thousands)

Senior secured notes (1)

Senior Secured Notes (“2029 Notes”) (1)

$ 300,000 $ 300,000

6 unchanged sentences

585,741 579,169

current portions of finance lease obligations 12,157 11,178

Total debt and finance lease obligations, net of current portions $ 573,983 $ 567,991

(1) As of March 30, 2024 and December 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 consolidated balance sheets at $ 294.1 million and $ 293.7 million as of March 30, 2024 and December 30, 2023, respectively.

This presentation is net of discount of $ 2.9 million and $ 3.0 million and the combined carrying value of debt issuance costs of $ 3.0 million and $ 3.2 million as of March 30, 2024 and December 30, 2023, respectively.

The senior secured notes are presented in the above table at face value and have an annual interest rate of 6.0 % through maturity.

(2) 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 $ 346.5 million as of March 30, 2024 and December 30, 2023.

current portion of finance lease obligations 11,132 11,178

Total, net of current portion $ 574,609 $ 567,991

(1) As of June 29, 2024 and December 30, 2023, term debt was comprised of $ 300 million of Senior Secured Notes (“2029 Notes”) issued in October 2021.

These notes are presented under the Long-term debt caption of the Company’s unaudited condensed consolidated balance sheets at $ 294.4 million and $ 293.7 million as of June 29, 2024 and December 30, 2023, respectively.

This balance sheet presentation is net of unamortized discount of $ 2.8 million and $ 3.0 million, respectively, and unamortized debt issuance costs of $ 2.8 million and $ 3.2 million, respectively, as of June 29, 2024 and December 30, 2023.

The Senior Secured Notes are presented in this table at their face value.

(2) Available borrowing capacity under the Revolving Credit Facility was $ 346.5 million as of June 29, 2024 and December 30, 2023.

The available borrowing capacity reflects undrawn letters of credit.

(3) Refer to Note 8, 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, the Company and certain subsidiaries completed a private offering of $ 300.0 million of 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 and Truist Bank, as trustee and collateral agent.

The 2029 Notes were issued to investors at 98.625 % of their principal 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 other related assets.

The 2029 Notes are scheduled to mature on November 15, 2029, however at the sole discretion of the 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 totaled $ 4.5 million for the three months ended March 30, 2024 and April 1, 2023.

As of March 30, 2024 and December 30, 2023, the fair value of the Company’s 2029 Notes was approximately $ 291.9 million and $ 273.2 million, respectively, which were estimated from inputs that are designated as Level 2 in the fair value hierarchy.

The Company’s valuation technique is based primarily on observable market prices in less active markets.

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

Amounts on this line include $ 125.1 million and $ 125.0 million as of June 29, 2024 and December 30, 2023, respectively, for sale-leasebacks of real estate in fiscal 2019 and 2020 that did not qualify for sale treatment for accounting purposes.

Interest expense, net on the Company’s unaudited condensed consolidated statements of operations consisted of the following components:

Three Months Ended Six Months Ended

June 29, 2024 July 1, 2023 June 29, 2024 July 1, 2023

(In thousands)

Interest expense $ 11,180 $ 11,286 $ 24,290 22,583

Interest income 6,380 4,976 14,865 8,585

Interest expense, net $ 4,801 $ 6,311 $ 9,425 $ 13,998

Interest expense for the reporting periods presented in the above table primarily reflects interest expense for the 2029 Notes, interest expense on finance lease obligations, certain ongoing fees for the Revolving Credit Facility that are classified as interest expense, amortization of debt issuance costs for the 2029 Notes and Revolving Credit Facility, and amortization of original-issue bond discount on the 2029 Notes.

Total amortization of debt issuance costs and bond discount costs was $ 0.3 million and $ 0.7 million for the three and six months ended June 29, 2024, respectively, and $ 0.3 million and $ 0.7 million for the three and six months ended July 1, 2023, respectively.

Interest expense for the three and six months ended June 29, 2024 also includes a credit of $ 0.4 million and expense of $ 1.2 million, respectively, for estimated interest expense related to import duties that the Company believes it may owe (see Note 9, Commitments and Contingencies) .

Interest income for the reporting periods presented in the above table primarily reflects interest earned on the Company’s cash and cash equivalents.

Interest income for the six months ended June 29, 2024 also includes $ 2.0 million received with refunds in the first quarter of fiscal 2024 from U.S.

Customs for anti-dumping import duties (see Note 2, Inventories) .

Interest expense, excluding amortization of debt issuance costs and bond discount, for the 2029 Notes totaled $ 4.5 million and $ 9.0 million for the three and six months ended June 29, 2024, respectively, and $ 4.5 million and $ 9.0 million for the three and six months ended July 1, 2023, respectively.

The 2029 Notes pay interest at a fixed annual rate of 6.0 percent through maturity.

Revolving Credit Facility

In April 2018, the Company and certain subsidiaries entered into the Amended and Restated Credit Agreement for a revolving credit facility with Wells Fargo Bank, National Association, as administrative agent (“the Agent”), and certain other financial 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, as amended.

The obligations under the Revolving Credit Facility are secured by a security interest in substantially all of the Company’s and its subsidiaries’ assets (other than real property), including inventories, accounts receivable, and proceeds from those items, under the Amended and Restated Guaranty and Security Agreement.

From and after June 30, 2023, borrowings under the 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 the Revolving Credit Facility are subject to availability under the Borrowing Base (as that term is defined in the revolving credit agreement).

The Company would be required to repay the Revolving Credit Facility to the extent that such revolving borrowings 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 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 $ 868.2 million under our Revolving Credit Facility.

Available borrowing capacity under our Revolving Credit Facility was $ 346.5 million on March 30, 2024 and $ 346.5 million December 30, 2023.

As of June 29, 2024 and December 30, 2023, the Company had zero outstanding borrowings under the Revolving Credit Facility.

Available borrowing capacity, reduced for undrawn letters of credit, under the Revolving Credit Facility was $ 346.5 million as of June 29, 2024 and December 30, 2023.

Excess availability, which includes availability under the Revolving Credit Facility plus cash and cash equivalents in qualified deposit accounts, was $ 837.9 million and $ 868.2 million as of June 29, 2024 and December 30, 2023, respectively.

Debt Covenants

The Revolving Credit Facility and the 2029 Notes contain various covenants and restrictions, including customary financial covenants.

The Company was in compliance with all such covenants as of June 29, 2024 and December 30, 2023.

The Company’s right to make draws on the Revolving Credit Facility may be conditioned upon, among other things, compliance with these covenants.

The Company was in compliance with all covenants as of March 30, 2024 and December 30, 2023.

These covenants also limit the Company’s ability to, among other things:

8 unchanged sentences

Finance Lease Obligations

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 8, Lease Commitments .

The Company’s finance lease liabilities consist of leases related to equipment, vehicles, and real estate, with the majority of those finance leases related to real estate.

For more information on the Company’s finance lease obligations, refer to Note 8, Leases .

Net Periodic Pension Cost

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715, Compensation-Retirement Benefits , and the DB Plan and Company, as sponsor, were relieved of 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:

Three Months Ended

April 1, 2023

Prior to settlement, during the three and six months ended July 1, 2023 the Company incurred the following net periodic pension cost:

Three Months Ended Six Months Ended

(In thousands)

3 unchanged sentences

Amortization of unrecognized gain 302 604

Net periodic pension cost $ 594

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

Net periodic pension cost (benefit) $ 594 $ 1,188

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

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

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 included the acceleration of unrecognized compensation cost in conjunction with announced leadership transitions that occurred in 2023.

As of April 1, 2023, $ 1.3 million was accrued for tax withholding obligations of the Company’s employees upon vesting of restricted stock unit awards.

This was presented as a non-cash transaction in the Company’s unaudited condensed consolidated statement of cash flows.

Lease Commitments

During the three and six months ended June 29, 2024, the Company incurred stock compensation expense of $ 1.4 million and $ 3.8 million, respectively.

Expense in the three and six months ended June 29, 2024 included a credit of $ 1.7 million related to

cumulative adjustments for certain unvested restricted stock unit grants that were granted in June 2022 and are subject to vesting based, in part, on performance criteria that are not expected, as of June 29, 2024, to be fully achieved before the end of the vesting period.

As of June 29, 2024, unearned compensation for share-based grants was $ 27.1 million, with $ 16.6 million of this amount associated with grants made in the first six months of fiscal 2024.

Under the Company’s 2021 BlueLinx Holdings, Inc.

2021 Long-Term Incentive Plan as of June 29, 2024, 482,563 shares of common stock remain available for future issuance pursuant to equity-based compensation awards.

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

This expense included expense for the acceleration of unrecognized compensation cost in conjunction with certain changes in the Company’s executive management.

The Company has operating and finance leases for certain of its distribution facilities, office space, land, mobile fleet, and equipment.

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Finance lease ROU assets are included in property and equipment and the finance lease obligations are presented separately in the Company’s consolidated balance sheets.

When a lease does not provide an implicit interest rate, the Company uses its incremental borrowing rate based on the information available at the commencement date in determining the present value of future payments.

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.

When a lease does not provide an implicit interest rate, the Company uses its incremental borrowing rate based on the information available at the commencement date to determine the present value of future payments.

The Company has also made the accounting policy election to not separate lease components from non-lease components related to the mobile fleet asset class.

The Company’s finance lease liabilities consist of leases related to equipment and vehicles, and real estate.

5 unchanged sentences

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 the assets and liabilities related to the Company’s leases as of March 30, 2024 and December 30, 2023:

Lease assets and liabilities March 30, 2024 December 30, 2023

As of June 29, 2024 and December 30, 2023, the remaining unrecognized deferred gains related to these transactions were $ 68.6 million and $ 70.5 million, respectively, and these deferred gains are being recognized in earning on a straight-line basis.

During the three months ended June 29, 2024 and July 1, 2023, the Company recognized $ 1.0 million and $ 1.0 million, respectively, of these deferred gains in each quarter.

In the six months ended June 29, 2024 and July 1, 2023, the Company recognized $ 2.0 million and $ 2.0 million, respectively, of these deferred gains in each period.

The following table presents the assets and liabilities related to the Company’s leases as of June 29, 2024 and December 30, 2023:

Lease Assets and Liabilities June 29, 2024 December 30, 2023

(In thousands)

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Total lease liabilities $ 337,167 $ 324,229

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

The components of lease expense were as follows:

Three Months Ended

Components of lease expense March 30, 2024 April 1, 2023

(1 ) Finance lease right-of-use assets are presented net of accumulated amortization of $ 107.0 million and $ 102.9 million as of June 29, 2024 and December 30, 2023, respectively.

The compon ents of lease expense were as follows:

Three Months Ended Six Months Ended

Components of lease expense June 29, 2024 July 1, 2023 June 29, 2024 July 1, 2023

(In thousands)

Operating lease cost:

Operating lease cost $ 2,446 $ 2,918

Operating lease expense:

Operating lease expense before subleases income $ 2,633 $ 3,116 $ 5,079 $ 6,034

Sublease income ( 887 ) ( 835 ) ( 1,748 ) ( 1,413 )

Total operating lease costs $ 1,585 $ 2,340

Finance lease cost:

Operating lease expense $ 1,746 $ 2,281 $ 3,331 $ 4,621

Finance lease expense:

Amortization of right-of-use assets $ 5,026 $ 4,693 $ 9,762 $ 6,782

Interest on lease liabilities 6,410 6,037 12,701 12,081

Total finance lease costs $ 11,027 $ 8,133

Supplemental cash flow information related to leases was as follows:

Three Months Ended

Cash flow information March 30, 2024 April 1, 2023

Total finance lease expense $ 11,436 $ 10,730 $ 22,463 $ 18,863

Supplemental cash flow information related to leases is as follows:

Three Months Ended Six Months Ended

Cash flow information June 29, 2024 July 1, 2023 June 29, 2024 July 1, 2023

(In thousands)

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

Operating cash flows from operating leases $ 2,509 $ 3,458

Operating cash flows from finance leases $ 6,291 $ 6,044

Financing cash flows from finance leases $ 3,072 $ 2,133

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

Three Months Ended

Non-cash information March 30, 2024 April 1, 2023

Operating cash flows, operating leases $ 2,693 $ 3,133 $ 5,202 $ 6,591

Operating cash flows, finance leases $ 6,410 $ 6,037 $ 12,701 $ 12,081

Financing cash flows, finance leases $ 3,339 $ 2,133 $ 6,411 $ 4,266

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

Three Months Ended Six Months Ended

Non-cash information June 29, 2024 July 1, 2023 June 29, 2024 July 1, 2023

(In thousands)

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Finance leases $ 2,973 $ 3,400 $ 11,150 $ 3,400

Supplemental balance sheet information related to leases was as follows:

Balance sheet information March 30, 2024 December 30, 2023

Supplemental balance sheet information related to leases is as follows:

Balance Sheet Information June 29, 2024 December 30, 2023

($ in thousands)

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Finance leases 8.86 % 8.84 %

The major categories of the Company’s finance lease liabilities as of March 30, 2024 and December 30, 2023 are as follows:

Category March 30, 2024 December 30, 2023

The major categories of the Company’s obligations under finance leases as of June 29, 2024 and December 30, 2023 are as follows:

Category June 29, 2024 December 30, 2023

(In thousands)

1 unchanged sentence

Real estate (1)

243,359 243,174

Total finance leases $ 291,338 $ 285,426

Below is a summary of undiscounted finance and operating lease liabilities that have initial terms in excess of one year as of March 30, 2024.

(1) Amounts include $ 125.1 million and $ 125.0 million as of June 29, 2024 and December 30, 2023, respectively, for sale-leasebacks of real estate in fiscal 2019 and 2020 that did not qualify for sale treatment for accounting purposes.

Below is a summary of undiscounted finance and operating lease liabilities that have initial terms in excess of one year as of June 29, 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 sheet, including options to extend lease terms that are reasonably certain of being exercised.

Fiscal year Operating leases Finance leases

Operating Leases Finance Leases

(In thousands)

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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.

In working with 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.

As of June 29, 2024, the Company estimates that it will be required to pay approximately $ 7.7 million, excluding any interest.

This amount is reflected in Other current liabilities on the Company’s unaudited condensed consolidated balance sheet as of June 29, 2024.

On the Company’s unaudited condensed consolidated statements of operations, a $ 10.4 million estimate was accrued for this matter during the first quarter of 2024.

Due to a change in estimate, this amount was adjusted by $ 2.7 million in the second quarter of 2024, for a net of expense of $ 7.7 million in the six months ended June 29, 2024.

See Note 2, Inventories , for disclosure concerning another matter related to import duties.

4 unchanged sentences

Collective Bargaining Agreements

As of March 30, 2024, approximately 20 % of the Company’s employees were represented by various local labor unions with terms and conditions of employment governed by Collective Bargaining Agreements (“CBAs”).

Three CBAs covering approximately 3.5 % of the Company’s employees are up for renewal in the remainder of fiscal 2024, of which one has already been renegotiated, one is currently under negotiations, and one is expected to be renegotiated before their renewal dates.

As of June 29, 2024, approximately 19 percent of the Company’s employees were represented by various local labor unions with terms and conditions of employment governed by collective bargaining agreements (“CBAs”).

Three CBAs covering approximately 2.2 % percent of the Company’s employees are up for renewal in the remainder of fiscal 2024, of which one has already been renegotiated and two are expected to be renegotiated before their renewal dates.

Accumulated Other Comprehensive Loss

As of March 30, 2024 and December 30, 2023, the Company had no accumulated other comprehensive income or loss.

As of April 1, 2023, the components of accumulated other comprehensive loss were as follows:

As of June 29, 2024 and December 30, 2023, the Company had no accumulated other comprehensive income or loss.

For changes in accumulated other comprehensive loss during the three and six months ended July 1, 2023, see the unaudited condensed consolidated statements of operations and comprehensive income included in this Form 10-Q.

As of July 1, 2023, the components of accumulated other comprehensive loss were as follows:

Benefit Pension

Plan, Net of Tax Other Total Accumulated Other Comprehensive Loss, Net of Tax

April 1, 2023 balance

Plan, net of tax Other,

net of tax Total Accumulated Other Comprehensive Loss

(In thousands)

July 1, 2023 balances

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

Effective Income Tax Rate

The Company’s effective tax rate for the three months ended March 30, 2024 and April 1, 2023 was 24.1 percent and 26.5 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 % .

The Company’s effective tax rates for the three months ended March 30, 2024 and April 1, 2023 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.

Additionally, the effective income tax rate for the three months ended 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.

The Company’s effective income tax rates for the three months ended June 29, 2024 and July 1, 2023 were 24.7 percent and 24.0 percent, respectively.

The Company’s effective income tax rates for the six months ended June 29, 2024 and July 1, 2023 were 24.4 percent and 25.1 percent, respectively.

The Company’s effective income tax rates for the three and six months ended June 29, 2024 and July 1, 2023 were impacted by the permanent addback of certain nondeductible expenses, including meals and entertainment and executive compensation, partially offset by a partial release of a valuation allowance for deferred income tax assets and from the vesting of restricted stock units.

The Company’s effective income tax rates for the three and six months ended July 1, 2023 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.

For fiscal 2024, the Company expects its consolidated annual effective income tax rate will be approximately 26 percent.

For additional information about the Company’s income taxes, see Note 7 to the consolidated financial statements included in Item 8 of the Company’s Annual Report on Form 10-K for the fiscal year ended December 30, 2023.

Earnings Per Share and Stockholders' Equity

Earnings Per Share

The Company calculates basic earnings per share by dividing net income for the period by the weighted average number of common shares outstanding for the period.

The Company calculates basic earnings per share by dividing net income for the period by the weighted average number of shares of common stock 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 shares of stock associated with unvested share-based 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 earnings per common share for the three-month periods ended March 30, 2024 and April 1, 2023 were as follows:

Three Months Ended

March 30, 2024 April 1, 2023

(In thousands, except per share data)

Net income $ 17,492 $ 17,812

The Company calculates diluted earnings per share 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 including the dilutive effect, if any, of shares of stock associated with unvested share-based grants.

However, for share-based grants that vest in whole or in part based on performance metrics, their dilutive effect is included only after the performance metrics have been achieved.

The reconciliations of basic net income and diluted earnings per common share for the three and six month periods ended June 29, 2024 and July 1, 2023 are as follows:

Three Months Ended Six Months Ended

June 29, 2024 July 1, 2023 June 29, 2024 July 1, 2023

Net income (in thousands) $ 14,336 $ 24,466 $ 31,828 $ 42,278

Weighted-average shares outstanding - Basic 8,644,839 9,040,146 8,640,976 9,034,240

3 unchanged sentences

Diluted earnings per share $ 1.65 $ 2.70 $ 3.66 $ 4.67

Approximately 114,000 and 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, respectively, as the awards would have been anti-dilutive for the periods presented.

Share Repurchases

During the three and six months ended June 29, 2024, unvested time-based restricted stock units totaling 23,627 and 2,488 , respectively, and unvested performance-based restricted stock units totaling 145,219 for both periods were outstanding but not included in the computation of diluted earnings per share for the respective periods.

During the three and six months ended July 1, 2023, unvested time-based restricted stock units totaling 103,775 and 125,360 , respectively, and unvested performance-based restricted stock units totaling 115,954 for both periods were outstanding but not included in the computation of diluted earnings per share for the respective periods.

Each restricted stock unit is composed of one unvested share of the Company’s common stock.

The unvested time-based restricted stock units were excluded because they were antidilutive based on their unearned compensation amounts and on the Company’s average stock price during the periods.

The unvested performance-based restricted stock units were excluded because their performance metrics had not been achieved as of the end of the respective reporting period.

Repurchases of Common Stock

2023 Authorization

2 unchanged sentences

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.

During the three months ended March 30, 2024, the Company did not repurchase any of its common stock.

During the three and six months ended June 29, 2024, the Company repurchased 152,403 shares of its common stock at an average price of $ 98.28 , including broker commissions but excluding any excise tax that may be due on the repurchases, for a total of $ 15.0 million.

As of June 29, 2024, there remained $ 76.5 million repurchase capacity under this authorization.

Between June 29, 2024 and July 26, 2024, the Company purchased an additional 58,715 shares of its common stock for $ 6.0 million at an average share price of $ 102.75 per share, including broker commissions but excluding any excise tax that may be due on the repurchases.

2021/2022 Authorization

2 unchanged sentences

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.

During the three and six months ended July 1, 2023, the Company repurchased 141,705 shares of its common stock under the 2021/2022 authorization at an average price of $ 81.36 , including broker commissions but excluding any excise tax due on the repurchases, for a total of $ 11.5 million.

Between fiscal July 2023 and October 2023, the Company exhausted the remaining available capacity of $ 22.0 million under the 2021/2022 authorization.

Fair Value Disclosures

The Company has no assets or liabilities whereby the carrying values are remeasured and adjusted to fair value on a recurring basis for each reporting period.

The Company has not elected the fair value option for any assets or liabilities.

As of June 29, 2024 and December 30, 2023, the fair value of the 2029 Notes was approximately $ 279 million and $ 273 million, respectively, which were estimated from inputs that are designated as Level 2 in the fair value hierarchy.

The Company’s valuation technique is based primarily on observable market prices in less active markets.

The fair value of cash, cash equivalents, accounts receivable, accounts payable, and accrued liabilities approximate the carrying values as of June 29, 2024 and December 30, 2023 because of the short-term nature of these instruments.

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