What changed in this filing

/stocks — the workspaceLOADING

Item 1. Financial Statements

2024-10-29 compared with 2024-07-30 · 126 added, 101 removed, 416 unchanged (35% of the section changed)

3 unchanged sentences

COMPREHENSIVE INCOME

(In thousands, except per share data)

Three Months Ended Six Months Ended

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

(In thousands, except per share amounts)

Three Months Ended Nine Months Ended

September 28, 2024 September 30, 2023 September 28, 2024 September 30, 2023

Net sales $ 747,288 $ 809,981 $ 2,241,895 $ 2,423,852

5 unchanged sentences

Amortization of deferred gains on real estate ( 984 ) ( 984 ) ( 2,952 ) ( 2,952 )

Other operating expenses 8 993 322 4,109

Other operating expenses, net 888 1,131 1,210 5,240

Total operating expenses 101,644 99,590 300,254 297,324

2 unchanged sentences

Interest expense, net 4,619 5,577 14,044 19,575

Settlement of defined benefit pension plan ( 2,226 ) — ( 2,226 ) —

Other expense, net — 594 — 1,782

15 unchanged sentences

(In thousands, except share data)

June 29, 2024 December 30, 2023

September 28, 2024 December 30, 2023

Current assets:

57 unchanged sentences

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

Net income — — — 16,016 16,016

Vesting of restricted stock units 26 (a) (a) — —

Compensation related to share-based grants — — 3,186 — 3,186

Repurchase of shares to satisfy employee tax withholdings ( 8 ) (a) ( 816 ) — ( 816 )

Common stock repurchase and retirement ( 146 ) ( 2 ) ( 15,127 ) — ( 15,129 )

Balance, September 28, 2024 8,423 $ 84 $ 138,522 $ 516,983 $ 655,589

(a) Activity rounds to less than one thousand dollars

See accompanying Notes.

Common Stock Additional

18 unchanged sentences

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

There has been no activity for Preferred Stock.

Net income — — — — 24,382 24,382

Other comprehensive income — — — 225 — 225

Vesting of restricted stock units 7 — — — — —

Compensation related to share-based grants — — 2,980 — — 2,980

Repurchase of shares to satisfy employee tax withholdings ( 3 ) — ( 281 ) — — ( 281 )

Obligation for shares repurchases not yet settled ( 10 ) — ( 843 ) — — ( 843 )

Common stock repurchase and retirement ( 206 ) ( 2 ) ( 17,720 ) — — ( 17,722 )

Balance, September 30, 2023 8,796 $ 88 $ 174,906 $ ( 30,745 ) $ 487,263 $ 631,512

See accompanying Notes.

2 unchanged sentences

(In thousands)

Six Months Ended

June 29, 2024 July 1, 2023

Nine Months Ended

September 28, 2024 September 30, 2023

Cash flows from operating activities:

3 unchanged sentences

Amortization of debt discount and issuance costs 990 989

Settlement of frozen defined benefit pension plan ( 2,226 ) —

Provision for deferred income taxes 1,950 1,117

30 unchanged sentences

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

June 29, 2024

September 28, 2024

Basis of Presentation

13 unchanged sentences

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 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 results for the three and nine months ended September 28, 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.

6 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 during the six months ended June 29, 2024.

The Company did not adopt any new accounting standards during the fiscal year ended December 30, 2023 or during the nine months ended September 28, 2024.

Recent Accounting Pronouncements - Not Yet Adopted

26 unchanged sentences

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 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.

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 (“LCNRV”), which also considers items that may be considered damaged, excess, and obsolete inventory.

During the second quarter of fiscal 2024, the Company recorded a write-down of $ 2.4 million to reflect the LCNRV for certain inventory related to its structural products.

The $ 2.4 million write-down was due to declines in wood-based commodity prices.

During the third quarter of fiscal 2024, substantially all of the inventory covered by this $ 2.4 million LCNRV write-down was sold, thereby resulting in lower Costs of products sold by that same amount in the third quarter of fiscal 2024.

This adjustment increased gross margin percentage for structural products in the third quarter of fiscal 2024 by 1.0 percent.

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.

6 unchanged sentences

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 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.

During the three and nine months ended September 28, 2024, the Company recognized refunds of $ 3.8 million and $ 20.7 million, respectively, plus interest of $ 0.7 million and $ 2.7 million, respectively, 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 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.

These adjustment amounts are reflected in Cost of products sold and Interest expense, net, respectively, on the Company’s unaudited condensed consolidated statements of operations for

the three and nine months ended September 28, 2024.

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

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.

During the fiscal quarter and year-to-date period ended September 28, 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 $ 3.0 million for the three and nine month periods ended September 28, 2024, respectively.

For the three and nine month periods ended September 30, 2023, amortization expense was $ 1.0 million and $ 3.2 million, respectively.

Revenue Recognition

1 unchanged sentence

Sales and usage-based taxes are excluded from revenues.

Three Months Ended Six Months Ended

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

Three Months Ended Nine Months Ended

Product type September 28, 2024 September 30, 2023 September 28, 2024 September 30, 2023

(In thousands)

4 unchanged sentences

Sales and usage-based taxes are excluded from revenues.

Three Months Ended Six Months Ended

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

Three Months Ended Nine Months Ended

Sales channel September 28, 2024 September 30, 2023 September 28, 2024 September 30, 2023

(In thousands)

5 unchanged sentences

Reload sales are similar to warehouse sales but are shipped from warehouses, most of which are operated by third parties, where the Company stores owned products to enhance operating efficiencies.

This channel is employed primarily to service strategic customers that would be less economical to service from Company warehouses, and to distribute large volumes of imported products from port facilities.

The reload channel is employed primarily to service strategic customers that would be less economical to service from Company warehouses, and to distribute large volumes of imported products from port facilities.

Direct sales are shipped from the manufacturer to the customer without the Company taking physical possession of the inventory and, as a result, typically generate lower margins than warehouse and reload distribution channels but require lower amount of committed capital and fixed costs.

1 unchanged sentence

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

As of September 28, 2024 and December 30, 2023, debt and finance lease obligations consisted of the following:

September 28, 2024 December 30, 2023

(In thousands)

10 unchanged sentences

Total, net of current portion $ 575,996 $ 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.

(1) As of September 28, 2024 and December 30, 2023, long-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 $ 294.7 million and $ 293.7 million as of September 28, 2024 and December 30, 2023, respectively.

This balance sheet presentation is net of unamortized discount of $ 2.6 million and $ 3.0 million, respectively, and unamortized debt issuance costs of $ 2.6 million and $ 3.2 million, respectively, as of September 28, 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.

(2) Available borrowing capacity under the Revolving Credit Facility was $ 346.5 million as of September 28, 2024 and December 30, 2023.

The available borrowing capacity reflects undrawn letters of credit.

(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.

Amounts on this line include $ 125.1 million and $ 125.0 million as of September 28, 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

Three Months Ended Nine Months Ended

September 28, 2024 September 30, 2023 September 28, 2024 September 30, 2023

(In thousands)

3 unchanged sentences

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) .

Total amortization of debt issuance costs and bond discount costs was $ 0.3 million and $ 1.0 million for the three and nine months ended September 28, 2024, respectively, and $ 0.3 million and $ 1.0 million for the three and nine months ended September 30, 2023, respectively.

Interest expense for the nine months ended September 28, 2024 also includes $ 1.2 million 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.

Interest income for the three and nine months ended September 28, 2024 also includes $ 0.7 million and $ 2.7 million, respectively, on refunds approved in 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.

Interest expense, excluding amortization of debt issuance costs and bond discount, for the 2029 Notes totaled $ 4.5 million and $ 13.5 million for the three and nine months ended September 28, 2024, respectively, and $ 4.5 million and $ 13.5 million for the three and nine months ended September 30, 2023, respectively.

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

Revolving Credit Facility

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.

As of September 28, 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 September 28, 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 $ 872.8 million and $ 868.2 million as of September 28, 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 was in compliance with all such covenants as of September 28, 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.

11 unchanged sentences

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

Net Periodic Pension Cost

Net Periodic Pension Cost (Benefit)

As previously disclosed, effective December 5, 2023, the Company settled its noncontributory defined benefit pension plan (the “DB Plan”) by purchasing an irrevocable nonparticipating annuity contract with an insurance company (the “buy-out contract”).

1 unchanged sentence

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 and six months ended July 1, 2023 the Company incurred the following net periodic pension cost:

Three Months Ended Six Months Ended

The Company incurred the following net periodic pension (benefit) cost for the following periods:

Three Months Ended Nine Months Ended

September 28, 2024 September 30, 2023 September 28, 2024 September 30, 2023

(In thousands)

Service cost (1)

$ — $ — $ — $ —

Interest cost on projected benefit obligation — 1,105 — 3,314

1 unchanged sentence

Amortization of unrecognized gain — 301 — 905

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

Settlement loss adjustment (2)

( 2,226 ) — ( 2,226 ) —

Net periodic pension (benefit) cost $ ( 2,226 ) $ 594 $ ( 2,226 ) $ 1,782

(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.

(2) Represents an adjustment for the settlement charge originally recognized during the fourth quarter of fiscal 2023 related to settlement of the Company’s frozen defined benefit pension plan.

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

However, the settlement charge and related adjustments are reported on a separate line

under Non-operating expenses on the Company’s unaudited condensed consolidated statement of operations and comprehensive income.

Share-Based Compensation

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.

During the three and nine months ended September 28, 2024, the Company incurred stock compensation expense of $ 3.2 million and $ 6.9 million, respectively.

Expense in the nine months ended September 28, 2024 included a credit of $ 1.7 million (recognized in fiscal second quarter 2024) 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 September 28, 2024, to be fully achieved before the end of the vesting period on June 28, 2025.

As of September 28, 2024, unearned compensation for share-based grants was $ 23.0 million, with $ 14.2 million of this amount associated with grants made in the first nine 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.

2021 Long-Term Incentive Plan as of September 28, 2024, 506,044 shares of common stock remain available for future issuance pursuant to equity-based compensation awards.

For the three and nine months ended September 30, 2023, the Company incurred stock compensation expense of $ 3.0 million and $ 9.5 million, respectively.

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

21 unchanged sentences

Gains on these sale-leaseback transactions were deferred and are being recognized into the Company’s earnings.

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

As of September 28, 2024 and December 30, 2023, the remaining unrecognized deferred gains related to these transactions were $ 68.2 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 September 28, 2024 and September 30, 2023, the Company recognized $ 1.0 million and $ 1.0 million, respectively, of these deferred gains in each quarter.

In the nine months ended September 28, 2024 and September 30, 2023, the Company recognized $ 3.0 million and $ 3.0 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 September 28, 2024 and December 30, 2023:

Lease Assets and Liabilities September 28, 2024 December 30, 2023

(In thousands)

11 unchanged sentences

Total lease liabilities $ 340,838 $ 324,229

(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.

(1 ) Finance lease right-of-use assets are presented net of accumulated amortization of $ 111.4 million and $ 102.9 million as of September 28, 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

Three Months Ended Nine Months Ended

Components of lease expense September 28, 2024 September 30, 2023 September 28, 2024 September 30, 2023

(In thousands)

Operating lease expense:

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

Operating lease expense before sublease income $ 2,886 $ 2,755 $ 7,965 $ 8,789

Sublease income ( 900 ) ( 1,062 ) ( 2,648 ) ( 2,475 )

5 unchanged sentences

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

Three Months Ended Nine Months Ended

Cash flow information September 28, 2024 September 30, 2023 September 28, 2024 September 30, 2023

(In thousands)

4 unchanged sentences

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

Three Months Ended Nine Months Ended

Non-cash information September 28, 2024 September 30, 2023 September 28, 2024 September 30, 2023

(In thousands)

3 unchanged sentences

Supplemental balance sheet information related to leases is as follows:

Balance Sheet Information June 29, 2024 December 30, 2023

Balance Sheet Information September 28, 2024 December 30, 2023

($ in thousands)

9 unchanged sentences

Finance leases 8.80 % 8.84 %

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

The major categories of the Company’s obligations under finance leases as of September 28, 2024 and December 30, 2023 are as follows:

Category September 28, 2024 December 30, 2023

(In thousands)

3 unchanged sentences

Total finance leases $ 293,810 $ 285,426

(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.

(1) Amounts include $ 125.1 million and $ 125.0 million as of September 28, 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 September 28, 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.

17 unchanged sentences

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.

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.

As of September 28, 2024, the Company estimates that it will be required to pay approximately $ 8.0 million, excluding any interest.

This amount is reflected in Other current liabilities on the Company’s unaudited condensed consolidated balance sheet as of September 28, 2024.

On the Company’s unaudited condensed consolidated statements of operations, expense of $ 0.3 million and $ 8.0 million, excluding interest, was recognized for this matter in the three and nine months ended September 28, 2024, respectively, within Cost of products sold.

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

4 unchanged sentences

Collective Bargaining Agreements

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.

As of September 28, 2024, approximately 18.4 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”).

Two CBAs covering approximately 1.3 percent percent of the Company’s employees are up for renewal during the remainder of fiscal 2024 and are expected to be renegotiated before their renewal dates.

Accumulated Other Comprehensive Loss

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:

As of September 28, 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 nine months ended September 30, 2023, see the unaudited condensed consolidated statements of operations and comprehensive income included in this Form 10-Q.

As of September 30, 2023, the components of accumulated other comprehensive loss were as follows:

Benefit Pension

2 unchanged sentences

(In thousands)

July 1, 2023 balances

September 30, 2023 balances

$ ( 31,986 ) $ 1,241 $ ( 30,745 )

Effective Income Tax Rate

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.

The Company’s effective income tax rates for the three months ended September 28, 2024 and September 30, 2023 were 26.0 percent and 27.2 percent, respectively.

The Company’s effective income tax rates for the nine months ended September 28, 2024 and September 30, 2023 were 24.9 percent and 25.9 percent, respectively.

The Company’s effective income tax rates for the three and nine months ended September 28, 2024 and September 30, 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, the vesting of restricted stock units, and the return-to-provision adjustment associated with the most recently filed U.S.

Federal income tax return.

The Company’s effective income tax rates for the three and nine months ended September 30, 2023 were impacted by state taxes as well as the permanent addback of certain nondeductible expenses, including 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.

For additional information about the Company’s income taxes, see Note 7, Income Taxes , 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

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For rounding purposes when calculating earnings per share, the Company’s policy is to round down to the whole cent.

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.

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 shares of common stock 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

The reconciliations of basic net income and diluted earnings per common share for the three and nine month periods ended September 28, 2024 and September 30, 2023 are as follows:

Three Months Ended Nine Months Ended

September 28, 2024 September 30, 2023 September 28, 2024 September 30, 2023

Net income (in thousands) $ 16,016 $ 24,382 $ 47,844 $ 66,660

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Diluted earnings per share $ 1.87 $ 2.71 $ 5.53 $ 7.38

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.

During the three and nine months ended September 28, 2024, unvested time-based restricted stock units totaling 6,299 and 1,644 , respectively, and unvested performance-based restricted stock units totaling 139,654 for both periods were outstanding but not included in the computation of diluted earnings per share for the respective periods.

During the three and nine months ended September 30, 2023, unvested time-based restricted stock units totaling 103,152 and 161,572 , respectively, and unvested performance-based restricted stock units totaling 112,252 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.

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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 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.

During the three and nine months ended September 28, 2024, the Company repurchased 145,548 shares and 297,951 shares, respectively, of its common stock at a weighted-average average price of $ 103.08 and $ 100.63 , respectively, including broker commissions but excluding federal excise tax on the repurchases, for a total of $ 15.0 million and $ 30.0 million, respectively.

These amounts are based on trade date activity, while the amounts reported on the Company’s consolidated statements of cash flows for share repurchases are based on settlement date activity.

As of September 28, 2024, there remained $ 61.5 million repurchase capacity under this authorization.

Between September 28, 2024 and October 25, 2024, the Company purchased an additional 43,240 shares of its common stock for $ 4.6 million at a weighted-average share price of $ 106.34 per share, including broker commissions but excluding federal excise tax due on the repurchases.

2021/2022 Authorization

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On May 3, 2022, the Company’s board of directors increased the share repurchase authorization to $ 100 million.

During the three months ended April 1, 2023, the Company did not repurchase any shares of its common stock under the 2021/2022 authorization.

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.

During the three and nine months ended September 30, 2023, the Company repurchased 216,507 shares and 358,212 shares, respectively, of its common stock under the 2021/2022 authorization at a weighted-average price of $ 84.93 , and $ 83.52 , respectively, including broker commissions but excluding federal excise tax on the repurchases, for total cash of $ 11.5 million and $ 29.9 million, respectively.

These amounts are based on trade date activity, while the amounts reported on the Company’s consolidated statements of cash flows for share repurchases are based on settlement date activity.

During fiscal October 2023, the Company exhausted the remaining available capacity of $ 3.7 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 no assets or liabilities with carrying values that 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.

As of September 28, 2024 and December 30, 2023, the fair value of the 2029 Notes was approximately $ 290 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.

The fair value of cash, cash equivalents, accounts receivable, accounts payable, and accrued liabilities approximate the carrying values as of September 28, 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