What changed in this filing

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Item 2. Management’s Discussion and Analysis

2025-11-04 compared with 2025-07-29 · 146 added, 153 removed, 190 unchanged (61% of the section changed)

29 unchanged sentences

and whether or not the Company will continue any share repurchases.

These risks and uncertainties also include those discussed under the heading “Risk Factors” in Part II, Item 1A of this Form 10-Q, under the heading “Risk Factors” in Part I, Item 1A of our Annual Report on Form 10-K for the year ended December 28, 2024, as supplemented in Part II, Item 1A, “Risk Factors,” in the Company’s Quarterly Report on Form 10-Q for the fiscal quarter ended March 29, 2025, and those risks and uncertainties those discussed elsewhere in this Form 10-Q, and in future reports that we file with the SEC.

These risks and uncertainties also include those discussed under the heading “Risk Factors” in Part II, Item 1A of this Form 10-Q, under the heading “Risk Factors” in Part I, Item 1A of our Annual Report on Form 10-K for the year ended December 28, 2024, as supplemented in Part II, Item 1A, “Risk Factors,” in the Company’s Quarterly Report on Form 10-Q for the fiscal quarter ended March 29, 2025, and those risks and uncertainties discussed elsewhere in this Form 10-Q, and in future reports that we file with the SEC.

We operate in a changing environment in which new risks can emerge from time to time.

19 unchanged sentences

We further seek to maintain a disciplined capital structure while at the same time investing in our business to modernize our distribution facilities, as well as our tractor and trailer fleet, and to improve operational performance.

During the six fiscal months ended June 28, 2025, we engaged in the following transactions:

During the nine fiscal months ended September 27, 2025, we:

• Used cash of $21.5 million and entered into $41.3 million of finance leases to enhance our facilities and fleet.

19 unchanged sentences

effective inventory management relative to our sales volume or the prices of the products we produce;

acquisitions and the integration and completion of such acquisitions;

the ability to attract, train, and retain highly qualified associates and other key personnel while controlling related labor costs;

potential acquisitions and the integration and completion of such acquisitions;

business disruptions;

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Results of Operations

Our results of operations for the three fiscal months ended June 28, 2025 (“second quarter of fiscal 2025”) and for the three fiscal months ended June 29, 2024 (“second quarter of fiscal 2024”) were as follows:

Three Fiscal Months Ended June 28, 2025 % of

Sales Three Fiscal Months Ended June 29, 2024 % of

Our results of operations for the three fiscal months ended September 27, 2025 (“third quarter of fiscal 2025”) and for the three fiscal months ended September 28, 2024 (“third quarter of fiscal 2024”) were as follows:

Three Fiscal Months Ended September 27, 2025 % of

Sales Three Fiscal Months Ended September 28, 2024 % of

($ amounts in thousands)

7 unchanged sentences

Interest expense, net 8,603 1.1% 4,619 0.6%

Settlement of defined benefit pension plan — —% (2,226) (0.3)%

Income before provision for income taxes 1,363 0.2% 21,632 2.9%

Provision for income taxes 2,268 0.3% 4,710 0.6%

(Benefit) provision for income taxes (292) 0.0% 5,616 0.8%

Net income $ 1,655 0.2% $ 16,016 2.1%

Our results of operations for the six fiscal months ended June 28, 2025 (“first six months of fiscal 2025”) and for the six fiscal months ended June 29, 2024 (“first six months of fiscal 2024”) were as follows:

Six Fiscal Months Ended June 28, 2025 % of

Sales Six Fiscal Months Ended June 29, 2024 % of

Our results of operations for the nine fiscal months ended September 27, 2025 (“first nine months of fiscal 2025”) and for the nine fiscal months ended September 28, 2024 (“first nine months of fiscal 2024”) were as follows:

Nine Fiscal Months Ended September 27, 2025 % of

Sales Nine Fiscal Months Ended September 28, 2024 % of

($ amounts in thousands)

7 unchanged sentences

Interest expense, net 23,640 1.1% 14,044 0.6%

Settlement of defined benefit pension plan — —% (2,226) (0.1)%

Income before provision for income taxes 12,085 0.5% 63,722 2.8%

2 unchanged sentences

The following table sets forth net sales by product category and percentage of total net sales by product category:

Three Fiscal Months Ended Six Fiscal Months Ended

June 28, 2025 June 29, 2024 June 28, 2025 June 29, 2024

Three Fiscal Months Ended Nine Fiscal Months Ended

September 27, 2025 September 28, 2024 September 27, 2025 September 28, 2024

Net sales by product category:

4 unchanged sentences

The following table sets forth gross profit, the percentage of total gross profit earned by product category, and gross margin percentages by product category:

Three Fiscal Months Ended Six Fiscal Months Ended

June 28, 2025 June 29, 2024 June 28, 2025 June 29, 2024

Three Fiscal Months Ended Nine Fiscal Months Ended

September 27, 2025 September 28, 2024 September 27, 2025 September 28, 2024

Gross profit by product category:

7 unchanged sentences

Company gross margin % 14.4% 16.8% 15.1% 16.8%

Second Quarter of Fiscal 2025 Compared to Second Quarter of Fiscal 2024

For the second quarter of fiscal 2025, the Company’s net sales were $780.1 million, an increase of $11.7 million, or 1.5%, compared to the second quarter of fiscal 2024.

• The increase in the Company’s net sales in the current fiscal quarter was attributable to both specialty products and structural products.

Higher overall volume was partially offset by overall lower pricing driven by external market factors.

• Approximately 70% of the Company’s net sales in the second quarter of fiscal 2025 and the second quarter of fiscal 2024 were generated by specialty products.

The Company’s gross profit for the second quarter of fiscal 2025 decreased by $2.8 million, or 2.3%, to $119.7 million from $122.4 million in the prior year quarter.

• This overall decrease in the Company’s gross profit in the current fiscal quarter was attributable to specialty products, partially offset by higher gross profit for structural products.

• 84% of the Company’s gross profit was generated by specialty products in the second quarter of fiscal 2025, compared to 85% in the second quarter of fiscal 2024.

Third Quarter of Fiscal 2025 Compared to Third Quarter of Fiscal 2024

For the third quarter of fiscal 2025, the Company’s net sales were $748.9 million, an increase of $1.6 million, or 0.2%, compared to the third quarter of fiscal 2024.

• The overall $1.6 million increase in the Company’s net sales in the current fiscal quarter was attributable to specialty products, partially offset by lower net sales for structural products.

• Approximately 70% and 69% of the Company’s net sales in the third quarters of fiscal 2025 and the third quarter of fiscal 2024, respectively, were generated by specialty products.

The Company’s gross profit for the third quarter of fiscal 2025 decreased by $17.5 million, or 13.9%, to $108.2 million from $125.7 million in the third quarter of fiscal 2024.

• The decrease in the Company’s gross profit in the current fiscal quarter was attributable to both specialty products and structural products.

• Approximately 81% of the Company’s gross profit was generated by specialty products in the third quarter of fiscal 2025, compared to 80% in the third quarter of fiscal 2024.

• Gross margin percentage for the Company decreased from 16.8% to 14.4% in the current fiscal quarter.

This overall decrease in the Company’s gross margin percentage was attributable to specialty products, partially offset by higher gross margin percentage for structural products.

• The Company benefited in the second quarter of fiscal 2024 by a $2.7 million change in an estimate for an accrual initially made and disclosed in the first quarter of fiscal 2024 related to amounts we believe we may owe for discrepancies in duties paid in prior years for certain imported goods (see Note 8, Commitments and Contingencies , to the accompanying unaudited condensed consolidated financial statements included in Item 1 of this Quarterly Report on Form 10-Q).

This amount is reported within Cost of products sold on our unaudited condensed consolidated statement of operations for the second quarter of fiscal 2024.

As subsequently discussed, this item benefited the operating results for specialty products in the second quarter of fiscal 2024.

• The Company was negatively impacted in the second quarter of fiscal 2024 by a $2.4 million interim LCNRV provision to adjust the carrying values of certain structural lumber and structural panel inventory items to their net realizable value as of June 29, 2024.

This amount is reported within Cost of products sold on our unaudited condensed consolidated statement of operations for the second quarter of fiscal 2024.

As subsequently discussed, this item negatively impacted the operating results for structural products in the second quarter of fiscal 2024.

Such adjustments were not material for the second quarter of fiscal 2025.

Specialty products - Net sales of specialty products, which include product types such as engineered wood, siding, millwork, outdoor living, specialty lumber and panels, and industrial products, increased by $4.0 million, or 0.7%, to $543.5 million in the second quarter of fiscal 2025.

• This overall increase in net sales for specialty products in the current fiscal quarter was due to higher volume for engineered wood, millwork, and specialty lumber and panels, partially offset by lower pricing mainly on those same product types.

• Specialty products gross profit decreased by $4.1 million, or 3.9%, to $100.3 million in the current fiscal quarter due primarily to a competitive pricing environment.

• Specialty products gross margin percentage decreased by 80 basis points to 18.5% compared to 19.3% in the second quarter of fiscal 2024 due primarily to a competitive pricing environment.

• The $2.7 million adjustment related to duty and import matters discussed above at the Company level benefited the operating results for specialty products in the second quarter of fiscal 2024.

Excluding this benefit, specialty products gross margin percentage for second quarter of fiscal 2024 would have been 18.9% compared to 18.5% for the second quarter of fiscal 2025, a decrease of 40 basis points for the current quarter.

Structural products - Net sales of structural products, which include product types such as lumber, panels (including plywood and oriented strand board), rebar, and remesh, increased by $7.8 million, or 3.4%, to $236.6 million in the second quarter of fiscal 2025 compared to $228.9 million in the second quarter of fiscal 2024.

• This overall increase in net sales for structural products in the current fiscal quarter was due to higher volume on panels and lumber and higher pricing on lumber, partially offset by lower pricing on panels that was driven by external market factors.

• Compared to the second quarter of 2024, average commodity prices in U.S.

markets during the second quarter of 2025 for lumber were up 17.6% and down 18.7% for panels.

Higher lumber prices were driven by tightening U.S.

sawmill output and dwindling import volumes.

• Structural products gross profit increased overall by $1.3 million, or 7.3%, to $19.4 million from $18.1 million in the prior year fiscal quarter.

Higher net sales in the current quarter were partially offset by margin compression due to

external market factors.

• Structural products gross margin percentage for the second quarter of fiscal 2025 was 8.2% compared to 7.9% in the second quarter of fiscal 2024.

The interim $2.4 million LCNRV provision discussed above at the Company level negatively impacted the operating results for structural products for the second quarter of fiscal 2024.

Such amounts were not material for the second quarter of fiscal 2025.

Our selling, general, and administrative (“SG&A”) expenses increased by $5.8 million, or 6.5%, compared to the second quarter of fiscal 2024.

This overall increase was due primarily to increased sales and logistics expenses driven by higher sales volumes, our strategy to grow sales in the multi-family channel, as well as expenses associated with our digital transformation.

Depreciation and amortization expense decreased $0.3 million compared to the second quarter of fiscal 2024.

We continue to focus on strategic capital investment.

Interest expense, net, which includes gross interest expense less interest income, was $8.5 million and $4.8 million in the second quarter of fiscal 2025 and second quarter of fiscal 2024, respectively, resulting in an increase in net interest expense of $3.7 million in the current fiscal quarter.

• Gross interest expense was $12.6 million and $11.2 million in the second quarter of fiscal 2025 and second quarter of fiscal 2024, respectively.

Gross interest expense in the second quarter of fiscal 2025 included additional expense of $0.5 million while interest expense for the second quarter of fiscal 2024 included a benefit of $0.4 million, both related to the aforementioned estimate for an accrual initially made and disclosed in the first quarter of 2024 related to amounts the Company believes it may owe for discrepancies in duties paid in prior years for certain imported goods (see Note 8, Commitments and Contingencies , to the unaudited condensed consolidated financial statements included in Item 1 of this Quarterly Report on Form 10-Q).

Excluding these amounts, gross interest expense in the second quarter of fiscal 2025 and second quarter of fiscal 2024 would have been $12.2 million and $11.6 million, respectively, an increase in the current fiscal quarter of $0.6 million compared to the second quarter of fiscal 2024.

This $0.6 million of additional interest expense in the current fiscal quarter was due to additional net finance leases added subsequent to the second quarter of fiscal 2024.

• Interest income was $4.2 million and $6.4 million in the second quarter of fiscal 2025 and second quarter of fiscal 2024, respectively.

The decrease was attributable to both specialty products and structural products.

• Cost of products sold for the third quarter of fiscal 2025 included an additional $2.2 million of cost related to retroactive adjustments associated with antidumping/countervailing (“AD/CV”) duties for certain imported specialty products.

For the third quarter of fiscal 2024, retroactive import duty-related items resulted in a net benefit to Cost of products sold of $3.5 million.

These items impacted the results of operations for specialty products.

See Note 2, Inventory, and Note 8, Commitments and Contingencies , to the accompanying unaudited condensed consolidated financial statements included in this Quarterly Report on Form 10-Q.

• The Company’s gross profit and gross margin percentage for the third quarter of fiscal 2024 were positively impacted by $2.4 million for a LCNRV provision for certain structural products that occurred in the second quarter of fiscal 2024.

This provision in the second quarter of fiscal 2024 lowered Cost of products sold in the subsequent third quarter of fiscal 2024 since substantially all of the inventory associated with the LCNRV write-down was sold during the third quarter of fiscal 2024.

Such adjustments were not material to the third quarter of fiscal 2025.

See Note 2, Inventory , to the accompanying unaudited condensed consolidated financial statements included in this Quarterly Report on Form 10-Q.

• The LCNRV impact and the retroactive adjustments associated with import duty-related items discussed in the two preceding bullet points caused the Company’s gross margin percentage to decrease from 14.7% to 14.4% for the third quarter of fiscal 2025, and to increase from 16.0% to 16.8% for the third quarter of 2024.

Specialty products - Net sales of specialty products, which include product types such as engineered wood, siding, millwork, outdoor living, specialty lumber and panels, and industrial products, increased by $6.5 million, or 1.2%, to $525.5 million in the third quarter of fiscal 2025.

• The increase in net sales for specialty products in the current fiscal quarter was due primarily to higher volume for engineered wood and higher pricing for most product categories, partially offset by lower pricing for engineered wood.

• Specialty products’ gross profit decreased by $13.1 million, or 13.1%, to $87.4 million in the current fiscal quarter due primarily to a competitive pricing environment, particularly for engineered wood.

• Specialty products’ gross margin percentage decreased by 280 basis points to 16.6% compared to 19.4% in the third quarter of fiscal 2024 due primarily to a competitive pricing environment, especially for engineered wood.

• For specialty products’ gross margin percentage, the aforementioned adjustments for import duty-related items reduced the percentage from 17.0% to 16.6% for the third quarter of fiscal 2025, and increased it from 18.7% to 19.4% for the third quarter of fiscal 2024.

Structural products - Net sales of structural products, which include product types such as lumber, panels (including plywood and oriented strand board), rebar, and remesh, decreased by $4.9 million, or 2.1%, to $223.4 million in the third quarter of fiscal 2025 compared to $228.3 million in the third quarter of fiscal 2024.

• This overall decrease in net sales for structural products in the current fiscal quarter was due primarily to lower volume for lumber and panels and lower pricing for panels, partially offset by higher pricing for lumber.

Lumber and panel pricing were driven by external market factors.

• Compared to the third quarter of 2024, average commodity prices in U.S.

markets during the third quarter of 2025 for lumber were up 6.5% and down 14.1% for panels.

• Structural products’ gross profit decreased overall by $4.4 million, or 17.3%, to $20.8 million in the third quarter of fiscal 2025 from $25.2 million in the third quarter of fiscal 2024.

Lower volume was partially offset by overall higher pricing.

• Structural products’ gross margin percentage for the third quarter of fiscal 2025 was 9.3% compared to 11.0% in the third quarter of fiscal 2024.

• The aforementioned LCNRV adjustment increased the gross margin percentage for structural products by 1.0% in the third quarter of fiscal 2024.

LCNRV impacts were not material for the third quarter of fiscal 2025.

Our selling, general, and administrative (“SG&A”) expenses decreased by $2.9 million, or 3.2%, compared to the third quarter of fiscal 2024.

This overall decrease was due primarily to lower incentive compensation expense in the current period, partially offset by increased sales and logistics expenses driven by our strategy to grow sales in the multi-family channel, expenses associated with our digital transformation initiative, and merit salary increases in early fiscal 2025.

Interest expense, net, which includes gross interest expense less interest income, was $8.6 million and $4.6 million in the third quarter of fiscal 2025 and third quarter of fiscal 2024, respectively, resulting in an increase in net interest expense of $4.0 million in the current fiscal quarter.

• Gross interest expense was $12.5 million and $11.7 million in the third quarter of fiscal 2025 and third quarter of fiscal 2024, respectively.

The additional interest expense in the current fiscal quarter was due primarily to additional net finance leases added subsequent to the third quarter of fiscal 2024.

• Interest income was $3.9 million and $7.0 million in the third quarter of fiscal 2025 and third quarter of fiscal 2024, respectively.

This decrease in the current fiscal quarter was due to lower average balances for interest-bearing deposits of cash/cash equivalents and due to lower interest rates paid on those deposits in the current fiscal quarter.

Additionally, interest income for the third quarter of fiscal 2024 included $0.7 million on refunds from U.S.

Customs for AD/CV import duties.

For fiscal 2025, we currently estimate our annual effective income tax rate will be approximately 29% .

Our effective income tax rates were 34.5% and 24.7% for the second quarters of fiscal 2025 and fiscal 2024, respectively.

Our effective income tax rates for the second quarters of fiscal 2025 and 2024 were both impacted by the permanent addback of certain nondeductible expenses, including meals and entertainment and executive compensation for the quarterly periods.

The effective income tax rate for the second quarter of 2025 was also increased by adjustments to deferred income tax assets related to stock-based compensation.

Our effective income tax rate for the second quarter of fiscal 2024 was slightly offset by a benefit from the vesting of restricted stock units.

Our effective income tax rates were (21.4)% and 26.0% for the third quarters of fiscal 2025 and fiscal 2024, respectively.

Our effective income tax rate for the third quarter of fiscal 2025 was increased by the permanent addback of certain nondeductible expenses, including meals and entertainment and executive compensation, and the anticipated return-to-provision adjustments for the 2024 federal income tax return.

These increases were offset by a benefit from settlements of stock-based compensation grants, resulting in a net income tax benefit for the fiscal period.

Our effective income tax rate for the third quarter of fiscal 2024 was 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 the vesting of restricted stock units.

On July 4, 2025, the law formally titled “An Act to Provide for the Reconciliation Pursuant to Title II of H.

14” (commonly referred to as the “One Big Beautiful Bill” or “OBBB”) was signed into law.

We are evaluating the potential impacts that the OBBB may have on our income tax expense and deferred income tax assets and liabilities, including new provisions for bonus depreciation on certain types of assets.

However, at this time, we do not believe the OBBB will have a material impact on our annual effective income tax rate for fiscal 2025.

Our net income for the second quarter of fiscal 2025 was $4.3 million, or $0.54 per diluted share, versus $14.3 million, or $1.65 per diluted share, in the prior-year fiscal quarter.

Decreases in our net income and earnings per diluted share were due primarily to the factors discussed above.

First Six Months of Fiscal 2025 Compared to First Six Months of Fiscal 2024

For the first six months of fiscal 2025, the Company’s net sales were $1.49 billion, a decrease of $5 million, or 0.4%, compared to the first six months of fiscal 2024.

At this time, we do not believe the provisions of the OBBB will have a material effect on our effective income tax rates for fiscal 2025 or future years.

However, the bonus depreciation provisions of the OBBB are estimated to reduce our cash payments for income taxes by approximately $3.4 million for fiscal 2025, based on actual and forecasted additions of qualifying assets in fiscal 2025.

Our net income for the third quarter of fiscal 2025 was $1.7 million, or $0.20 per diluted share, versus $16.0 million, or $1.87 per diluted share, in the third quarter of fiscal 2024.

Decreases in our net income and earnings per diluted share were due primarily to the factors that were previously discussed in this Item 2.

The third quarter of fiscal 2024 also included a benefit of $2.2 million related to an adjustment of the settlement charge incurred in the fourth quarter of 2023 to settle our defined benefit pension plan.

First Nine Months of Fiscal 2025 Compared to First Nine Months of Fiscal 2024

For the first nine months of fiscal 2025, the Company’s net sales were $2.238 billion, a decrease of $3.7 million, or 0.2%, compared to net sales of $2.242 billion in the first nine months of fiscal 2024.

• The overall decrease in net sales in the current fiscal period was attributable to specialty products, partially offset by an increase for structural products.

Higher overall volume was offset by overall lower pricing driven by external market factors.

• Approximately 69% of the Company’s net sales in the first six months of fiscal 2025 were generated by specialty products, compared to approximately 70% in the first six months of fiscal 2024.

The Company’s gross profit for the first six months of fiscal 2025 decreased by $19.3 million, or 7.7%, to $230.8 million from $250.1 million in the prior year fiscal period.

• This decline in the Company’s gross profit in the 2025 fiscal period was attributable to both specialty products and structural products.

• 82% of the Company’s gross profit in the first six months of fiscal 2025 was generated by specialty products, compared to 83% for the first six months of fiscal 2024.

• The Company’s gross margin percentage was 15.5% for the 2025 fiscal period, a decrease from the 16.7% for the 2024 fiscal period.

• The Company benefited in the 2025 fiscal period and the 2024 fiscal period by $2.4 million and $16.9 million (excluding interest), respectively, for changes in retroactive rates for certain anti-dumping duties, and these amounts are reflected as reductions to the Company’s Cost of products sold in the respective fiscal periods (see Note 2, Inventory , to the accompanying unaudited condensed consolidated financial statements included in Item 1 of this Quarterly Report on Form 10-Q).

In the prior year fiscal period, the aforementioned $16.9 million credit to Cost of products sold was partially offset by $7.7 million (excluding interest) of expenses related to classification adjustments for certain imported goods (see Note 8, Commitments and Contingencies , to the accompanying unaudited condensed consolidated financial statements included in Item 1 of this Quarterly Report on Form 10-Q).

These import duty items resulted in a net benefit of $9.1 million (excluding interest) to the Company’s Cost of products sold in the prior year fiscal period.

Excluding these net benefits for import duty items from the 2025 fiscal period and the 2024 fiscal period, the Company’s gross margin percentage would have been 15.3% and 16.1%, respectively.

As subsequently discussed, these items benefited the operating results for specialty products for the 2025 fiscal period and the 2024 fiscal period.

• The Company was negatively impacted by an interim $2.4 million LCNRV provision in the 2024 fiscal period to adjust the carrying values of certain structural lumber and structural panel inventory items to their net realizable values as of June 29, 2024.

As subsequently discussed, this item impacted the operating results for structural products in the 2024 fiscal period.

Such amounts were not material for the 2025 fiscal period.

Specialty products - Net sales of specialty products, which include product types such as engineered wood, siding, millwork, outdoor living, specialty lumber and panels, and industrial products, decreased by $20.5 million, or 2.0%, to $1.02 billion in the first six months of fiscal 2025.

• The overall decline in net sales for specialty products in the current fiscal period was due to lower pricing for engineered wood, millwork, and specialty lumber and panels, partially offset by higher volume mainly for those same product types.

• Approximately 69% of the Company’s net sales in the first nine months of fiscal 2025 were generated by specialty products, compared to approximately 70% in the first nine months of fiscal 2024.

The Company’s gross profit for the first nine months of fiscal 2025 decreased by $36.8 million, or 9.8%, to $339.0 million from $375.8 million in the prior year fiscal period.

• This decline in the Company’s gross profit in the first nine months of fiscal 2025 was attributable to both specialty products and structural products.

• Approximately 82% of the Company’s gross profit was generated by specialty products in both year-to-date fiscal periods.

• The Company’s gross margin percentage was 15.1% for the first nine months of fiscal 2025, a decrease from the 16.8% for the first nine months of fiscal 2024.

• We benefited in the first nine months of fiscal 2024 by $20.7 million (excluding interest) for changes in retroactive rates for certain AD/CV import duties, and this reduced the Company’s Cost of products sold for the 2024 fiscal period (see Note 2, Inventory , to the accompanying unaudited condensed consolidated financial statements included in Item 1 of this Quarterly Report on Form 10-Q).

This $20.7 million credit to Cost of products sold was partially offset by $8.0 million (excluding interest) of estimated expenses related to import duties in prior periods arising from certain classification discrepancies for products imported into the United States as separately entered shipments (see Note 8, Commitments and Contingencies , to the accompanying unaudited condensed consolidated financial statements included in Item 1 of this Quarterly Report on Form 10-Q).

These import duty items resulted in a net benefit of $12.7 million (excluding interest) to the Company’s Cost of products sold in the first nine months of fiscal 2024, and increased the Company’s gross margin percentage from 16.2% to 16.8% for the fiscal period.

These duty-related items benefited the operating results for specialty products for the first nine months of fiscal 2024.

The net impact of import duty-related adjustments was not material for the first nine months of fiscal 2025.

Specialty products - Net sales of specialty products, which include product types such as engineered wood, siding, millwork, outdoor living, specialty lumber and panels, and industrial products, decreased by $14.0 million, or 0.9%, to $1.55 billion in the first nine months of fiscal 2025.

• The overall decline in net sales for specialty products in the current fiscal period was due to lower pricing primarily for engineered wood, millwork, and specialty lumber and panels, and by lower volume for industrial products and siding.

These declines were partially offset by higher volume for engineered wood products and specialty lumber and panels.

• Specialty products’ gross profit decreased by $31.5 million, or 10.2%, to $277.4 million, due primarily to a competitive pricing environment.

• Specialty products gross margin percentage decreased 140 basis points to 18.6% for the first six months of fiscal 2025 compared to 20.0% in the first six months of fiscal 2024, due primarily to a competitive pricing environment.

• The net impacts of the adjustments related to duty and import matters discussed above at the Company level increased specialty products gross profit for the 2025 fiscal period and the 2024 fiscal period by $2.4 million and $9.1 million net, respectively, and increased specialty products gross margin percentage by 0.3% and 0.9% net, respectively.

Structural products - Net sales of structural products, which include product types such as lumber, plywood, oriented strand board, rebar, and remesh, increased by $15.2 million to $466.5 million in the first six months of fiscal 2025.

• This overall increase in net sales for structural products was due primarily to volume increases for panels and lumber and pricing increases for lumber, partially offset by pricing declines for panels due to external market factors.

• Compared to the first six months of fiscal 2024, average commodity prices in U.S.

markets during the first six months of fiscal 2025 for lumber were up 15.3% and down 15.9% for panels.

Higher lumber prices were driven by tightening U.S.

sawmill output and dwindling import volumes.

• Gross profit for structural products decreased by $1.0 million, or 2.3%, to $40.8 million from $41.7 million in the prior-year fiscal period.

Higher net sales in the current year period were offset by margin compression due primarily to external market factors.

• Structural products gross margin percentage for the first six months of fiscal 2025 was 8.7%, a decline from 9.2% in the prior-year fiscal period.

Higher net sales in the 2025 fiscal period were offset by margin compression due primarily to external market factors.

• The interim $2.4 million LCNRV provision discussed above at the Company level negatively impacted the operating results for structural products for the 2024 fiscal period.

Such amounts were not material for the 2025 fiscal period.

Our SG&A expenses in the first six months of fiscal 2025 increased $8.7 million, or 4.8%, compared to the first six months of fiscal 2024.

This overall increase was due primarily to increased logistics expenses driven by higher sales volumes, our strategy to grow sales in the multi-family channel, as well as expenses associated with our digital transformation.

Depreciation and amortization expense decreased $0.2 million compared to the first six months of fiscal 2024.

We continue to focus on strategic capital investment.

Other operating, net improved by $2.0 million compared to the first six months of fiscal 2024.

During the first quarter of fiscal 2025, we settled certain of the initial insurance claims related to property and equipment that was damaged or destroyed at our Erwin, Tennessee owned facility in late third quarter of fiscal 2024 due to Hurricane Helene.

We received insurance proceeds that exceeded the carrying values of the damaged or destroyed assets by $2.4 million, and this amount is included in Other operating, net on our unaudited condensed consolidated statement of operations for the first six months of fiscal 2024.

Interest expense, net, which includes gross interest expense less interest income, increased by $5.6 million compared to the first six months of fiscal 2024.

• Gross interest expense was $24.7 million and $24.3 million in the first six months of fiscal 2025 and first six months of fiscal 2024, respectively.

Gross interest expense in the first six months of fiscal 2025 and the first six months of fiscal 2024 included $0.5 million and $1.2 million, respectively, related to the aforementioned estimate for an accrual initially made and disclosed in the first quarter of 2024 related to amounts the Company believes it may owe for discrepancies in duties paid in prior years for certain imported goods (see Note 8, Commitments and Contingencies , to the unaudited condensed consolidated financial statements included in Item 1 of this Quarterly Report on Form 10-Q).

Excluding these amounts, gross interest expense in the first six months of fiscal 2025 and the first six months of fiscal 2024 would have been $24.2 million and $23.1 million, respectively, an increase in the current fiscal period of $1.1 million compared to the prior year fiscal period.

This $1.1 million increase in the current fiscal period was due to additional net finance leases added subsequent to the second quarter of fiscal 2024.

• Interest income was $9.7 million and $14.9 million in the first six months of fiscal 2025 and first six months of fiscal 2024, respectively.

Interest income in the current fiscal period and the prior year fiscal period included $0.5 million and $2.0 million, respectively, received with the aforementioned duty refunds related to changes in retroactive rates for certain anti-dumping duties (see Note 2, Inventory , to the unaudited condensed consolidated financial statements included in Item 1 of this Quarterly Report on Form 10-Q).

• Specialty products’ gross margin percentage decreased 190 basis points to 17.9% for the first nine months of fiscal 2025 compared to 19.8% in the first nine months of fiscal 2024, due primarily to a competitive pricing environment.

• The net impacts of the aforementioned adjustments related to import duty matters increased specialty products gross profit for the first nine months of fiscal 2024 by $12.7 million and increased specialty products gross margin percentage by 0.8% for the fiscal period.

The net impact of import duty-related adjustments was not material for the first nine months of fiscal 2025.

Structural products - Net sales of structural products, which include product types such as lumber, plywood, oriented strand board, rebar, and remesh, increased by $10.3 million to $689.9 million in the first nine months of fiscal 2025.

• This overall increase in net sales for structural products was due primarily to volume increases for panels and pricing increases for lumber, partially offset by pricing declines for panels due to external market factors.

• Compared to the first nine months of fiscal 2024, average commodity prices in U.S.

markets during the first nine months of fiscal 2025 for lumber were up 12.4% and down 15.3% for panels.

• Gross profit for structural products decreased by $5.3 million, or 8.0%, to $61.6 million from $66.9 million in the first nine months of fiscal 2024.

Higher net sales in the current year fiscal period were offset by margin compression due primarily to external market factors.

• Structural products’ gross margin percentage for the first nine months of fiscal 2025 was 8.9%, a decline from 9.8% in the first nine months of fiscal 2024, due primarily to margin compression mainly from external market factors.

Our SG&A expenses in the first nine months of fiscal 2025 increased by $5.7 million, or 2.1%, compared to the first nine months of fiscal 2024.

This overall increase was due primarily to increased logistics expenses driven by our strategy to grow sales in the multi-family channel, expenses associated with our digital transformation, and merit salary increases in early fiscal 2025, partially offset by lower incentive compensation expense in the current period.

Other operating, net improved by $2.7 million compared to the first nine months of fiscal 2024.

During the first quarter of fiscal 2025, we settled certain of the initial insurance claims related to property and equipment that were damaged or destroyed at our Erwin, Tennessee owned facility in late third quarter of fiscal 2024 due to Hurricane Helene.

Interest expense, net, which includes gross interest expense less interest income, increased by $9.6 million compared to the first nine months of fiscal 2024.

• Gross interest expense was $37.2 million and $36.0 million in the first nine months of fiscal 2025 and first nine months of fiscal 2024, respectively.

Gross interest expense in the first nine months of fiscal 2025 and the first nine months of fiscal 2024 included $0.6 million and $1.2 million, respectively, related to the aforementioned estimate for an accrual initially made and disclosed in the first quarter of 2024 related to amounts the Company believes it may owe for discrepancies in duties paid in prior years for certain imported goods (see Note 8, Commitments and Contingencies , to the unaudited condensed consolidated financial statements included in Item 1 of this Quarterly Report on Form 10-Q).

Excluding these amounts, gross interest expense in the first nine months of fiscal 2025 and the first nine months of fiscal 2024 would have been $36.6 million and $34.7 million, respectively, an increase in the current fiscal period of $1.8 million compared to the prior year fiscal period.

This $1.8 million increase in the current fiscal period was due to additional net finance leases added subsequent to the third quarter of fiscal 2024.

• Interest income was $13.6 million and $21.9 million in the first nine months of fiscal 2025 and first nine months of fiscal 2024, respectively.

Interest income in the current fiscal period and the prior year fiscal period included $0.5 million and $2.7 million, respectively, received with the aforementioned duty refunds related to changes in retroactive rates for certain AD/CV duties (see Note 2, Inventory , to the unaudited condensed consolidated financial statements included in Item 1 of this Quarterly Report on Form 10-Q).

Excluding these amounts, interest income in the current fiscal period and prior year fiscal period would have been $13.1 million and $19.2 million, respectively, a decrease of $6.1 million in the current fiscal period.

This $3.7 million decrease in the current fiscal period was due to lower average balances for interest-bearing deposits of cash/cash equivalents and due to lower interest rates paid on those deposits in the current fiscal quarter.

This $6.1 million decrease in the current fiscal period was due to lower average balances for interest-bearing deposits of cash/cash equivalents and due to lower interest rates paid on those deposits in the current fiscal period.

For fiscal 2025, we currently estimate our annual effective income tax rate to be approximately 29%.

Our effective income tax rates were 33.6% and 24.4% for the first six months of fiscal 2025 and the first six months of fiscal 2024, respectively.

Our effective income tax rates for both periods were impacted by the permanent addback of certain nondeductible expenses, including meals and entertainment and executive compensation for the fiscal periods.

Our effective income tax rate for the first six months of fiscal 2025 was also impacted by adjustments to deferred income tax assets related to stock-based compensation which increased the effective income tax rate.

Our effective income tax rate for the first six months of fiscal 2024 benefited from the partial release of a state income tax valuation allowance for deferred income tax assets, which impacted only the first quarter of fiscal 2024.

As noted above in the discussion and analysis for the quarterly fiscal periods, we are evaluating the potential impacts of the OBBB, but at this time, we do not expect the provisions of the OBBB to have a material impact on our effective income tax rate for fiscal 2025.

Our net income for the first six months of fiscal 2025 was $7.1 million, or $0.87 per diluted share, versus $31.8 million, or $3.66 per diluted share, in the prior-year fiscal period.

Our net income for the first six months of fiscal 2025 decreased due primarily to the factors discussed above.

Our effective income tax rates were 27.4% and 24.9% for the first nine months of fiscal 2025 and the first nine months of fiscal 2024, respectively.

Our effective income tax rates for both year-to-date fiscal periods were impacted by the permanent addback of certain nondeductible expenses, including meals and entertainment and executive compensation, and adjustments to deferred income tax assets related to stock-based compensation.

Our effective income tax rate for the first nine months of fiscal 2024 also benefited from the partial release of a state income tax valuation allowance for deferred income tax assets.

Our net income for the first nine months of fiscal 2025 was $8.8 million, or $1.08 per diluted share, versus $47.8 million, or $5.53 per diluted share, in the first nine months of fiscal 2024.

Our net income for the first nine months of fiscal 2025 decreased due primarily to the factors that were previously discussed in this Item 2.

The first nine months of fiscal 2024 also included a benefit of $2.2 million related to an adjustment of the settlement charge incurred in the fourth quarter of 2023 to settle our defined benefit pension plan.

Liquidity and Capital Resources

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We expect that these sources will be sufficient to fund our ongoing cash requirements for at least the next 12 months and into the foreseeable future.

As of June 28, 2025, we had $387 million of cash and cash equivalents plus $343.5 million of availability on our revolving credit facility.

As of September 27, 2025, we had $429 million of cash and cash equivalents plus $347.3 million of availability on our new revolving credit facility.

Senior Secured Notes

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Our 2029 Notes are scheduled to mature on November 15, 2029, and no principal is due until that time as long as we remain in compliance with the related covenants.

As of June 28, 2025, we were in compliance with these covenants.

As of September 27, 2025, we were in compliance with these covenants.

Revolving Credit Facility

Our existing revolving credit facility (“Revolving Credit Facility”) with Wells Fargo Bank, National Association, as administrative agent (“Agent”), and certain other financial institutions, matures on August 2, 2026, provided we remain in compliance with the related covenants.

As of June 28, 2025, we were in compliance with such covenants.

Any outstanding borrowings under our Revolving Credit Facility bear interest at a rate per annum equal to (i) Adjusted Term Secured Overnight Financing Rate (“SOFR”) (calculated as SOFR plus 0.1%) plus a margin ranging from 1.25% to 1.75%, 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 (as that term is defined in the agreement for the Revolving Credit Facility) plus a margin ranging from 0.25% to 0.75%, with the margin based upon average excess availability for the immediately preceding fiscal quarter for loans based on the base rate.

As of June 28, 2025, this variable interest rate for the Revolving Credit Facility was 5.32%.

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

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

Our Revolving Credit Facility may be prepaid in whole or in part from time to time without penalty or premium but including all breakage costs incurred by any lender thereunder.

As of June 28, 2025 and December 28, 2024, we had zero outstanding borrowings under our Revolving Credit Facility and available borrowing capacity was $343.5 million and $346.2 million, respectively, net of undrawn letters of credit.

Excess availability, which includes availability under our Revolving Credit Facility plus cash and cash equivalents in qualified accounts, was $730.3 million as of June 28, 2025.

Our Revolving Credit Facility is scheduled to terminate on August 2, 2026, and we intend to renew it before that date.

As disclosed in Note 5, Debt and Finance Lease Obligations , to the unaudited condensed consolidated financial statements included in Item 1 of this Quarterly Report on Form 10-Q), in August 2025 we completed a replacement of our prior revolving credit facility for a new revolving facility that has a maturity date of August 27, 2030 with Bank of America, NA as administrative agent (the “Revolving Credit Facility”).

Currently, the maximum borrowing capacity under the Revolving Credit Facility remains at $350 million and it also includes a $35 million swing line subfacility and letters of credit in an aggregate amount of up to $30 million.

Subject to certain conditions and consents, we have the option to increase the facility by an aggregate additional principal amount of up to $300 million which could in the future allow total borrowings of up to $650 million.

Similar to the prior revolving credit facility, the Revolving Credit Facility is a senior secured loan and letter of credit facility that is secured by a security interest in substantially all of our assets (other than real property), including inventories, accounts receivable, and proceeds from those items.

As of September 27, 2025 and December 28, 2024, we had zero outstanding borrowings under our revolving credit facilities.

Available borrowing capacity, reduced for undrawn letters of credit, under the revolving credit facilities was $347.3 million and $346.2 million as of September 27, 2025 and December 28, 2024, respectively.

Excess availability, which includes availability under the revolving credit facilities plus cash and cash equivalents in qualified deposit accounts, was $776.6 million as of September 27, 2025.

See Note 13, Subsequent Event , to the unaudited condensed consolidated financial statements included in Item 1 of this Quarterly Report on Form 10-Q.

If borrowings are outstanding under our Revolving Credit Facility, interest charges accrue at a rate per annum equal to (i) the then-current Secured Overnight Financing Rate (“SOFR”) plus a margin ranging from 1.25% to 1.75%, with the amount of such margin determined based upon the average of our excess availability (as defined) for the immediately preceding fiscal quarter as calculated by the administrative agent, for loans based on SOFR, or (ii) the administrative agent’s base rate plus a margin ranging from 0.25% to 0.75%, with the amount of such margin determined based upon the average of our excess availability (as defined) for the immediately preceding fiscal quarter as calculated by the administrative agent, for loans based on the base rate.

Finance Lease Obligations

Our finance lease obligations consist of leases for real estate, equipment, and vehicles totaling $317.6 million and $292.5 million as of June 28, 2025 and December 28, 2024, respectively.

Of the $317.6 million as of June 28, 2025, $242.0 million related to real estate and $75.6 million related to equipment.

Our finance lease obligations consist of leases for real estate, equipment, and vehicles totaling $321.8 million and $292.5 million as of September 27, 2025 and December 28, 2024, respectively.

Of the $321.8 million as of September 27, 2025, $241.5 million related to real estate and $80.3 million related to equipment.

Of the $292.5 million as of December 28, 2024, $242.8 million related to real estate and $49.8 million related to equipment.

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Operating Activities

Net cash used in operating activities for the first six months of fiscal 2025 was $60.7 million compared to net cash provided of $4.7 million in the first six months of fiscal 2024.

The $65.3 million decrease in cash generated from operating activities during the first six months of fiscal 2025 was primarily a result of a $24.7 million decrease in net income for the current fiscal period and $37.9 million of net changes in operating assets and liabilities.

Net cash used in operating activities for the first nine months of fiscal 2025 was $2.1 million compared to net cash provided of $66.4 million in the first nine months of fiscal 2024.

The $68.5 million decrease in cash generated from operating activities during the first nine months of fiscal 2025 was primarily a result of a $39.1 million decrease in net income for the current fiscal

period and $31.0 million of net changes in operating assets and liabilities.

The bonus depreciation provisions of the OBBB are estimated to reduce our cash payments for income taxes by approximately $3.4 million for fiscal 2025, based on actual and forecasted additions of qualifying assets in fiscal 2025.

Investing Activities

Net cash used in investing activities for the first six months of fiscal 2025 was $12.9 million compared to net cash used of $11.6 million in the first six months of fiscal 2024.

During the first six months of fiscal 2025 and first six months of fiscal 2024, we used cash of $15.5 million and $11.9 million, respectively, to acquire property and equipment.

In the current fiscal period, we received initial insurance proceeds of $2.4 million related to property and equipment that was damaged or destroyed due to Hurricane Helene at our Erwin, Tennessee owned facility in late third quarter of fiscal 2024.

Net cash used in investing activities for the first nine months of fiscal 2025 was $18.9 million compared to net cash used of $19.0 million in the first nine months of fiscal 2024.

During the first nine months of fiscal 2025 and first nine months of fiscal 2024, we used cash of $21.5 million and $19.8 million, respectively, to acquire property and equipment.

In fiscal 2025, we received initial insurance proceeds of $2.4 million related to property and equipment that were damaged or destroyed due to Hurricane Helene at our Erwin, Tennessee owned facility in September 2024.

Financing Activities

Net cash used in financing activities totaled $45.3 million for the first six months of fiscal 2025 compared to net cash used of $23.4 million for the first six months of fiscal 2024.

During the first six months of fiscal 2025, we used cash of $35.4 million to repurchase shares of our common stock, compared to $14.5 million for the first six months of fiscal 2024.

Cash payments on finance lease obligations were higher by $1.7 million in the current fiscal period due to new finance leases added subsequent to June 29, 2024.

Net cash used in financing activities totaled $55.4 million for the first nine months of fiscal 2025 compared to net cash used of $42.9 million for the first nine months of fiscal 2024.

During the first nine months of fiscal 2025, we used cash of $38.1 million to repurchase shares of our common stock, compared to $30.0 million for the first nine months of fiscal 2024.

Cash payments on finance lease obligations were higher by $2.5 million in the current fiscal period due to new finance leases added subsequent to September 28, 2024.

Common Stock Repurchases

During the first six months of fiscal 2025, we repurchased 469,129 shares of our common stock at an average price of $74.64 for a total of $35.0 million, under our 2023 stock repurchased authorization.

During the first six months of fiscal 2024, we repurchased 152,403 shares of our common stock at an average price of $98.28 for a total of $15.0 million under this same authorization.

These dollar amounts include broker commissions paid but exclude any excise tax that was paid or may be due on the repurchases under The Inflation Reduction Act of 2022.

As of June 28, 2025, there remained $11.5 million repurchase capacity under the 2023 authorization.

Between June 28, 2025 and July 25, 2025, we did not repurchase any additional shares of our common stock.

During the first nine months of fiscal 2025, we repurchased 503,556 shares of our common stock at an average price of $74.97 for a total of $37.7 million, under our 2023 share repurchase authorization.

During the first nine months of fiscal 2024, we repurchased 297,951 shares of our common stock at an average price of $100.63 for a total of $30.0 million under this same authorization.

These dollar amounts include broker commissions paid but exclude any excise tax that was paid or may be due on the share repurchases under The Inflation Reduction Act of 2022.

As of September 27, 2025, there remained $8.7 million repurchase capacity under the 2023 authorization.

Between September 27, 2025 and October 31, 2025, we did not repurchase any additional shares of our common stock.

The repurchase dollar amounts noted above are based on trade date activity, while the amounts reported on our consolidated statements of cash flows for share repurchases are based on settlement date activity.

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The 2025 authorization may be used after exhaustion of the 2023 authorization.

Under our share repurchase program,s we may repurchase our common stock at any time or from time to time, without prior notice, subject to prevailing market conditions and other considerations.

Under our share repurchase programs, we may repurchase our common stock at any time or from time to time, without prior notice, subject to prevailing market conditions and other considerations.

Our repurchases may be made through a variety of methods, which may include open market purchases, privately negotiated transactions, accelerated share repurchase programs, tender offers or pursuant to a trading plan that may be adopted in accordance with the Securities and Exchange Commission Rule 10b5-1.

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This metric differs from traditional working capital in that it excludes certain current assets and current liabilities that are reported in our consolidated balance sheets.

Net working capital of $492.2 million as of June 28, 2025, compared to $411.5 million as of December 28, 2024, increased on a net basis by approximately $80.7 million, as shown below:

June 28, 2025 December 28, 2024 June 29, 2024

Net working capital of $446.0 million as of September 27, 2025, compared to $411.5 million as of December 28, 2024, increased on a net basis by approximately $34.4 million, as shown below:

September 27, 2025 December 28, 2024 September 28, 2024

(In thousands)

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The gross value of these assets is included in property and equipment, at cost on our unaudited condensed consolidated balance sheets.

For the first six months of fiscal 2025, we invested $16.4 million in long-lived assets primarily related to investments in our fleet, facility enhancements, and ongoing digital transformation.

We also added $32.9 million of property and equipment under finance leases during the first six months of fiscal 2025, primarily for new tractors and forklifts to enhance our logistics network.

For the first six months of fiscal 2024, we invested $11.9 million in long-lived assets primarily related to investments in our distribution facilities and upgrading our fleet.

We also added $11.2 million in new finance leases during the 2024 fiscal quarter for new forklifts to enhance our logistics network.

For the first nine months of fiscal 2025, we invested $22.7 million in long-lived assets primarily related to investments in our fleet, facility enhancements, and ongoing digital transformation.

We also added $41.3 million of property and equipment under finance leases during the first nine months of fiscal 2025, primarily for new tractors and forklifts to enhance our logistics network.

For the first nine months of fiscal 2024, we invested $19.8 million in long-lived assets primarily related to investments in our distribution facilities and to a lesser extent, upgrading our fleet.

We also added $16.7 million in new finance leases during the 2024 fiscal quarter for new tractors and forklifts to enhance our logistics network.

Critical Accounting Policies

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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 2. Management’s Discussion and Analysis