What changed in this filing

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Item 7. Management’s Discussion and Analysis

2026-02-24 compared with 2025-02-18 · 182 added, 141 removed, 219 unchanged (60% of the section changed)

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Historically, our operating results have also been correlated with the level of single-family residential housing starts in the U.S.

The demand for new homes is dependent on a variety of factors, including job growth, changes in population and demographics, the availability and cost of mortgage financing, the supply of new and existing homes, and consumer confidence.

The demand for new homes is dependent on a variety of factors, including unemployment levels, job and wage growth, changes in population and demographics, the availability and cost of mortgage financing, the supply and affordability of new and existing homes, availability and affordability of homeowners insurance coverage, and consumer confidence and demand.

Certain developments have led to a more challenging macro-economic environment, such as broad-based inflation, the rapid rise in mortgage rates, home price appreciation, and low existing home turnover.

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housing market, including the residential repair and remodel and residential new construction markets, and have contributed to a slowdown in the U.S.

housing industry that continued through 2024 into 2025.

housing industry that continued through 2024 and 2025.

In addition, looking ahead, we believe that the demand for our products could face pressure from increases in tariffs and other inflationary pressures, the potential for trade disruption through embargoes, sanctions and import and export controls, and labor shortages and workforce disruption in the home building and remodeling industry due to immigration enforcement activities.

However, we believe that several factors, including the current high levels of home equity, the fundamental undersupply of housing in the U.S., repair and remodel activity, and demographic shifts, among others, will support demand for our products.

However, we believe that several factors, including the current high levels of home equity, the fundamental undersupply of housing in the U.S., potential actions of the U.S.

government to address housing availability and affordability, repair and remodel activity, and demographic shifts, among others, will support demand for our products.

For additional information regarding the risk factors impacting our business, refer to Part I, Item 1A, Risk Factors, in this Annual Report.

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Residential mortgage rates have risen in recent years and we believe many homeowners who secured mortgages with lower interest rates will be inclined to stay longer in existing homes, which could benefit R&R demand over the near-to-medium term.

On the other hand, we are experiencing low existing home turnover, which we believe may be currently hindering any significant growth in R&R activity.

According to the Joint Center For Housing Studies’ Leading Indicator of Remodeling Activity (“LIRA”) Index, spending for R&R is expected to increase in 2025 over 2024, particularly later in the year.

On the other hand, we are experiencing low existing home turnover, which we believe may still be hindering any significant growth in R&R activity.

According to the Joint Center For Housing Studies’ Leading Indicator of Remodeling Activity (“LIRA”) Index, spending for R&R is expected to increase in 2026 over 2025 and 2024.

The total market size of the U.S.

R&R market remains significant, with total U.S.

homeowner improvements and repairs spending expected to be approximately $509 billion in 2025, compared to the $503 billion, $510 billion, and $515 billion in 2024, 2023, and 2022, respectively, but up significantly from the $407 billion in 2021 and the $363 billion in 2020.

homeowner improvements and repairs spending expected to be approximately $517 billion in 2026, compared to $511 billion, $501 billion, $510 billion, and $515 billion in 2025, 2024, 2023, and 2022, respectively, but up significantly from the $407 billion and $362 billion in 2021 and 2020, respectively.

As the median age of U.S.

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Census Bureau and Department of Housing and Urban Development, the median age of an owner-occupied home in the U.S.

increased from 23 years in 1985 to 40 years in 2022.

increased from 23 years in 1985 to

41 years in 2023.

Moreover, approximately 73 percent of the current owner-occupied housing stock was built prior to 2000.

We believe the increasing average age of the nation’s approximately 145 million existing homes will drive demand for R&R projects.

We believe the increasing average age of the nation’s existing homes will drive demand for R&R projects.

Residential New Construction

We estimate that demand from the residential new construction market, including single-family and multi-family units, accounts for approximately 40 percent of our annual sales.

We believe our products are more likely to be used in single-family construction than in multi-family units, and therefore we are actively pursuing multi-family business as part of our sales growth strategy.

We believe demand for residential new construction is driven by a myriad of factors including, but not limited to:

mortgage rates, which recently reached multi-year highs;

We believe our products are currently more likely to be used in single-family construction than in multi-family units, and therefore we are actively pursuing multi-family business as part of our sales growth strategy.

We believe demand for new residential construction is driven by a myriad of factors including, but not limited to:

mortgage rates, which have recently declined from multi-year highs;

lending standards;

home affordability;

construction cost;

employment conditions;

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the level of existing home inventory on the market;

and consumer sentiment.

According to the U.S.

consumer sentiment;

and actions that may be taken by the U.S.

government to increase home construction activity.

Based on data from the U.S.

Census Bureau and the U.S.

Department of Housing and Urban Development, for full year 2024 residential housing starts for single family units and multi-family units were up 7% and down 27%, respectively, compared to full year 2023.

We believe the overall increase for single family starts was driven by builders adding more supply to a market with a significant housing shortage and by stabilizing economic conditions.

We believe multi-family starts were down due to the elevated interest rate environment and to recent overbuilding of multi-family units in many cities.

We believe our scale, national footprint, strategic supplier relationships, key national customer relationships, and breadth of market leading products and brands position us to serve the residential new construction market and navigate the changes in the macro-economic environment.

Department of Housing and Urban Development, the rate of residential housing starts for single family units and multi-family units have fluctuated in recent years.

However, we believe the U.S.

is currently facing a record housing shortage, and we note that the shortfall estimates generally range between 3.8 million and 4.7 million homes.

When this shortage begins to correct and home building recovers, we believe our scale, national footprint, strategic supplier relationships, key national customer relationships, and breadth of market leading products and brands will position us to serve a higher demand in the single-family and multifamily residential construction markets.

Commodity Nature of Our Products

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Cost and Availability of the Products We Distribute

Our gross profit is equal to our net sales less the cost of the products sold.

Our gross profit is equal to our Net sales less the Cost of products sold.

Substantially all of the amount reported in Cost of products sold is composed of cost to purchase inventory for resale to customers, including the cost of inbound freights, volume incentives, and inventory adjustments.

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The structural products we distribute are available from a variety of suppliers in both the U.S.

Pandemics and Public Health Crisis

The impact of disease outbreaks, epidemics, or pandemics and other public health crises can affect our operational and financial performance to varying degrees, such as the COVID-19 global pandemic did.

The extent of the effects of future public health crises, including a resurgence of the COVID-19 pandemic, or related containment measures and government responses are highly uncertain and cannot be predicted.

The products we import are subject to various tariffs, including those imposed under each of Section 232 of the Trade Expansion Act of 1962, Section 301 of the Trade Act of 1974, the International Emergency Economic Powers Act (IEEPA) (through February 24, 2026), and Section 122 of the Trade Act of 1974, depending on the product’s material composition and/or origin.

We also purchase imported products from domestic companies who then may pass along tariffs in their cost of goods.

The products we import, and imported products we purchase domestically, may be subject to new or additional tariffs in addition to those listed above.

Disease Outbreaks and Public Health Crises

The impact of any future disease outbreaks, such as epidemics or pandemics, and other public health crises can affect our operational and financial performance to varying degrees.

In addition, any subsequent economic recovery from such events can also affect our operational and financial performance.

The extent of any future disease outbreaks or other public health crises or related containment measures and government responses are highly uncertain and cannot be predicted.

Results of Operations

Fiscal 2025 Compared to Fiscal 2024

The following table sets forth our results of operations for fiscal 2024 and fiscal 2023, both of which were comprised of 52 weeks.

Fiscal 2024 % of

The following table sets forth our results of operations for fiscal 2025 and fiscal 2024.

Fiscal 2025 consisted of 53 weeks and fiscal 2024 consisted of 52 fiscal weeks.

($ amounts in thousands) Fiscal 2025 % of

Sales Fiscal 2024 % of

($ amounts in thousands)

(53 weeks) (52 weeks)

Net sales $ 2,954,007 $ 2,952,532

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Depreciation and amortization 39,905 1.4% 38,488 1.3%

Amortization of deferred gains on real estate (3,934) (0.1)% (3,934) (0.1)%

Gain from sale of properties, net (272) —% — —%

Recognition of deferred gains on real estate (3,934) (0.1)% (3,934) (0.1)%

Gain from sale of property — —% (272) —%

Other operating expenses 2,065 0.1% 1,755 0.1%

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Settlement of defined benefit pension plan — —% (2,481) (0.1)%

Other expense, net — —% 2,377 0.1%

Income before provision for income taxes 70,687 2.4% 81,886 2.6%

Provision for income taxes 17,571 0.6% 33,350 1.1%

Income before provision (benefit) for income taxes 129 —% 70,687 2.4%

(Benefit) provision for income taxes (90) —% 17,571 0.6%

Net income $ 219 —% $ 53,116 1.8%

The following table sets forth changes in net sales by product category.

Fiscal 2024 Fiscal 2023

($ amounts in thousands)

The following table sets forth changes in Net sales by product category for fiscal 2025 and fiscal 2024.

($ amounts in thousands) Fiscal 2025 Fiscal 2024

(53 weeks) (52 weeks)

Net sales by product category

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Total Net sales $ 2,954,007 100.0 % $ 2,952,532 100.0 %

The following table sets forth gross margin dollars and percentages by product category.

Fiscal 2024 Fiscal 2023

($ amounts in thousands)

The following table sets forth gross margin dollars and percentages by product category for fiscal 2025 and fiscal 2024.

($ amounts in thousands) Fiscal 2025 Fiscal 2024

(53 weeks) (52 weeks)

Gross profit by product category:

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Structural products 9.2% 10.1%

Fiscal 2024 Compared to Fiscal 2023

For fiscal 2024, we generated net sales of $3.0 billion, a decrease of $184 million, or 5.9 percent, compared to fiscal 2023.

The Company’s gross margin percentage decreased from 16.8 percent to 16.6 percent year over year.

The decrease in the Company’s net sales was driven by both specialty products (down 6.3 percent) and structural products (down 4.8 percent) due to price deflation for both specialty and structural products that was partially offset by volume increases for specialty products.

The decrease in the Company’s gross margin percentage was driven by structural products (decrease of 110 basis points) partially offset by an increase of 10 basis points for specialty products.

Company gross profit and Company gross margin percentage for specialty products reflect the positive impact of a net benefit of $12.7 million for import duty items in the current fiscal year.

The import duty items were related to changes in retroactive rates for anti-dumping duties resulting in a credit to cost of products sold of $20.7 million, partially offset by classification adjustments for certain goods imported by the Company that resulted in a net increase in Cost of products sold of $8.0 million for the current year.

Not including this net $12.7 million benefit, the Company’s gross margin percentage would have been 16.1 percent in the current year.

Net sales of specialty products, which includes product types such as engineered wood, siding, millwork, outdoor living products, specialty lumber and panels, and industrial products, decreased $138.3 million, or 6.3 percent, to $2.0 billion in fiscal 2024 .

The overall decrease in specialty products net sales was due to price deflation for all specialty product types, partially offset by volume increases for all specialty product types except industrial.

Specialty products gross profit decreased $23.2 million to $397.6 million in the current year.

Specialty products gross margin percentage increased to 19.4 percent for fiscal 2024 compared to 19.3 percent for fiscal 2023.

Gross profit and gross margin percentage for specialty products benefited in the current year from the aforementioned net $12.7 million benefit related to import duty items.

Excluding this net benefit, gross margin percentage for specialty products was 18.8 percent for the current year.

Net sales of structural products, which includes product types such as lumber, plywood, oriented strand board, rebar, and remesh, decreased overall by $45.5 million, or 4.8 percent, to $907 million in fiscal 2024.

This overall decrease in net sales was primarily due to market-based price deflation for all structural product types and lower volume for lumber, partially offset by volume gains for panels.

Gross profit for structural products decreased in the current year by $14.7 million, or 14 percent, to $91.5 million from $106.2 million in the prior year period due to lower sales in the current year.

For fiscal 2025, we generated Net sales of $3.0 billion, an increase of $1.5 million, or 0.05 percent, compared to fiscal 2024.

• The change in the Company’s Net sales was driven by specialty products (up $7.1 million or 0.3 percent), partially offset by a decrease for structural products (down $5.6 million or 0.6 percent).

Compared to fiscal 2024, higher overall volume in fiscal 2025 was offset by overall lower pricing driven by external market factors.

The Company’s gross profit for fiscal 2025 decreased $37.5 million, or 7.7%, from $489.1 million in fiscal 2024 to $451.6 million in fiscal 2025.

• This decrease in the Company’s gross profit for fiscal 2025 was attributable to both specialty products and structural products, with specialty products down $28.6 million and structural products down $8.9 million.

• Gross profit in fiscal 2025 was negatively impacted by lower product pricing, partially offset by volume growth and the Disdero acquisition.

• Approximately 82% and 81% of the Company’s gross profit was attributable to specialty products in fiscal 2025 and fiscal 2024, respectively.

• The Company’s gross margin percentage decreased from 16.6 percent in fiscal 2024 to 15.3 percent in fiscal 2025.

The decline in fiscal 2025 compared to fiscal 2024 was attributable to both specialty products and structural products, with structural products down 90 basis points and specialty products down 140 basis points.

• As previously disclosed, the Company’s gross profit and gross margin percentage reported for fiscal 2024 benefited by $20.7 million related to changes in retroactive rates for certain anti-dumping or countervailing (“AD/CV”) import duties, and this reduced the Company’s Cost of products sold reported in fiscal 2024.

This $20.7 million credit to Cost of products sold was partially offset by $8.0 million 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.

These import duty items resulted in a net benefit of $12.7 million to the Company’s Cost of products sold reported for fiscal 2024 and increased the Company’s gross margin percentage from 16.1% to 16.6% for fiscal 2024.

These import duty-related items benefited the operating results for specialty products.

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

Specialty products - Net sales of specialty products, which includes product types such as engineered wood, siding, millwork, outdoor living products, specialty lumber and panels, and industrial products, increased overall by $7.1 million, or 0.3 percent, to $2.1 billion in fiscal 2025 .

• The overall increase for specialty products’ Net sales benefited from the incremental Net sales from Disdero.

• Excluding Disdero’s Net sales, the decline in Net sales for specialty products in fiscal 2025 was driven by 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 $28.6 million, or 7.2%, to $369.0 million in the current year, due primarily to the competitive pricing environment in fiscal 2025 in addition to fiscal 2025 lacking the $12.7 million net benefit related to import duty items, as discussed below.

• Specialty products gross margin percentage decreased to 18.0 percent for fiscal 2025 compared to 19.4 percent for fiscal 2024, due primarily to the reasons noted above for gross profit.

• Gross profit and gross margin percentage reported in fiscal 2024 for specialty products benefited from the aforementioned $12.7 million net benefit related to import duty items.

Excluding this net benefit, gross margin percentage for specialty products was 18.8% for fiscal 2024.

Structural products - Net sales of structural products, which includes product types such as lumber, plywood, oriented strand board, rebar, and remesh, decreased overall by $5.6 million, or 0.6 percent, to $901 million in fiscal 2025.

• This overall decrease in Net sales for structural products was due primarily to pricing decreases for panels, partially offset by increases for lumber pricing and panels volumes.

• Gross profit for structural products decreased in the current year by $8.9 million, or 9.7 percent, to $82.6 million from $91.5 million in the prior year period, due primarily to pricing pressures driven by external market factors.

• Compared to fiscal year 2024, average composite pricing for lumber in the U.S.

decreased 2.5 percent while panel prices increased 1.2 percent.

Structural products gross margin percentage for fiscal 2024 was 10.1 percent, down from 11.2 percent in the prior fiscal year, which was primarily attributable to the aforementioned price deflation.

Our selling, general, and administrative (“SG&A”) expenses increased 2.7 percent overall, or $9.7 million , compared to fiscal 2023.

In the current year, SG&A expenses were higher for payroll and payroll-related expenses driven by increased logistics costs due to higher volumes, expenses associated with our digital transformation, legal expenses associated with duty-related matters, and bad debt related to a customer bankruptcy.

These SG&A increases were partially offset by lower commission expense and lower share-based compensation expense.

Depreciation and amortization expense increased 20.1 percent compared to fiscal 2023 due to a higher base of amortizable and depreciable assets throughout fiscal 2024 when compared to the prior fiscal year, resulting from our continued focus on capital investment.

Other operating expenses decreased $2.9 million compared to fiscal 2023 primarily due to lower restructuring related costs, including severance payments.

Restructuring related costs incurred in fiscal 2023 included costs related to our leadership transition.

Interest expense, net, decreased by 18.5 percent, or $4.4 million, compared to fiscal 2023.

The decrease is primarily due to the net interest income associated with the refunded antidumping duties described in Note 1, Summary of Significant Accounting Policies , under the heading Inventory.

During the fourth quarter of fiscal 2023, we settled our frozen defined benefit pension plan by transferring future financial responsibilities for the plan to a highly rated insurance company through the purchase of an annuity.

The accounting for this settlement resulted in the non-cash reclassification of $34.9 million, including net deferred income taxes of $4.5 million, from accumulated other comprehensive loss to earnings.

The settlement also required the Company, as plan sponsor, to make a final $6.9 million cash contribution to the plan trust in order for the plan trust to have sufficient assets to purchase the annuity from the insurance company.

During fiscal 2024, we received cash refunds of $2.5 million related to the settlement when the separate pension trust entity was closed.

The settlement of the frozen defined benefit pension plan did not result in any changes to the multi-employer pension plans in which some of our union employees participate.

Our effective income tax rate was 24.9 percent and 40.7 percent for fiscal 2024 and fiscal 2023, respectively.

The higher effective rate in fiscal 2023 was due primarily to the one-time accounting for the settlement of our frozen defined benefit pension plan, as described above, which increased the effective income tax rate by 14.8 percent.

The reclassification of $30.4 million to pre-tax earnings resulted in $12.2 million income tax expense (of which $4.5 million was reclassified from accumulated other comprehensive loss) related to the one-time settlement of our frozen defined benefit pension plan, which did not result in cash tax payments.

Removing the income tax effects related to the one-time settlement of our frozen defined benefit pension plan, our effective income tax rate for fiscal 2023 would have been approximately 25.9 percent.

Our effective income tax rates for both fiscal years 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 vesting of share-based compensation.

increased 5.8% and panel prices decreased 16.5% in fiscal 2025.

• Structural products gross margin percentage for fiscal 2025 was 9.2 percent, down from 10.1 percent in the prior fiscal year, which was primarily attributable to the pricing pressures driven by external market forces.

Our selling, general, and administrative (“SG&A”) expenses increased 4.3 percent overall, or by $15.6 million , compared to fiscal 2024.

This overall increase in fiscal 2025 was due to the addition of Disdero, the extra week in fiscal 2025, increased sales and logistics expenses driven by our strategic channel growth, including multi-family, as well as continuing technology initiatives associated with our digital transformation, a multi-year initiative aimed at modernizing and integrating our core technologies by improving data quality, strengthening transportation management and operational systems, and digitizing key processes.

Depreciation and amortization expense increased 3.7 percent compared to fiscal 2024 due primarily to a higher base of amortizable and depreciable assets throughout fiscal 2025 when compared to the prior fiscal year, resulting from our continued focus on capital investment and the acquisition of Disdero.

Other operating expenses, net in fiscal 2025 were primarily acquisition-related and other nonrecurring expenses, partially offset by insurance recoveries received in 2025 related to property damaged at our Erwin, Tennessee facility due to Hurricane Helene in late 2024.

Interest expense, net, which includes gross interest expense less interest income, increased by 67.1 percent, or $13.0 million, compared to fiscal 2024, primarily due to changes in interest income.

• Gross interest expense was $49.7 million and $47.2 million in fiscal 2025 and 2024, respectively.

Gross interest expense in fiscal 2025 and fiscal 2024 included $0.8 million and $1.2 million, respectively, related to the aforementioned estimate for an accrual initially made and disclosed in the first quarter of 2024 for amounts we believe we may owe for discrepancies in import duties paid in prior years for certain imported goods.

Excluding these amounts, gross interest expense in fiscal 2025 and fiscal 2024 would have been $48.9 million and $46.0 million, respectively, an increase of $2.9 million.

This $2.9 million increase in the current fiscal year was due to additional net finance leases added in fiscal 2025.

• Gross interest income was $17.3 million and $27.8 million for fiscal 2025 and fiscal 2024, respectively.

Interest income in fiscal 2025 and fiscal 2024 included $0.5 million and $2.7 million, respectively, received with the aforementioned import duty refunds related to changes in retroactive rates for certain AD/CV import duties.

Excluding these amounts, interest income in the current fiscal period and prior year fiscal period would have been $16.9 million and $25.1 million, respectively, a decrease of $8.3 million in the current fiscal period.

This $8.3 million decrease in the current fiscal year 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 year.

Our effective income tax rate was 24.9 percent for fiscal 2024.

For fiscal 2025, our pre-tax income and income tax benefit were not material.

Our effective income tax rates are 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 fiscal 2024 also benefited from the partial release of a state income tax valuation allowance for deferred income tax assets.

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.

The income tax provisions of the OBBB did not have a material impact on our effective income tax rate for fiscal 2025, and at this time we do not expect to have a material impact on future years.

However, the bonus depreciation provisions of the OBBB reduced our cash payments for income taxes by approximately $1.2 million for fiscal 2025, based on additions of qualifying assets in fiscal 2025.

Our net income for fiscal 2025 was $0.2 million, or $0.02 per diluted share, versus $53.1 million, or $6.19 per diluted share, in the prior fiscal year.

Our net income for fiscal 2024 increased primarily due to the lack of the defined benefit pension plan settlement cost incurred in fiscal 2023, the aforementioned net benefit of $12.7 million for import duty items, lower net interest expense and lower income tax provision in the current year, partially offset by lower gross profit, higher SG&A expense, and higher depreciation expense in the current year.

Our net income for fiscal 2025 decreased primarily due to the factors discussed above.

Results of Operations

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We expect our material cash requirements for the foreseeable future, including the next 12 months, will be for our:

• Periodic estimated income tax payments, as required;

• Periodic interest payments associated with our senior secured notes, as discussed in Note 8, Debt and Finance Lease Obligations, in Item 8 of this Annual Report;

• Lease agreements which have fixed lease payment obligations, as discussed in Note 13, Lease Commitments, in Item 8 of this Annual Report;

• Periodic estimated income tax payments, as required.

Our purchase orders are based on near-term needs and are typically fulfilled by our vendors within short time horizons.

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We expect to meet our long-term liquidity needs with cash/cash equivalents on hand, cash flows from our operations, and financing arrangements.

As of December 28, 2024, we had $505.6 million of cash and cash equivalents plus $346.2 million of availability on our revolving credit facility.

As of January 3, 2026, we had $385.8 million of cash and cash equivalents plus $340.1 million of availability on our revolving credit facility.

Sources and Uses of Cash

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Net cash provided by operating activities totaled $59.8 million for fiscal 2025 compared to $85.2 million for fiscal 2024.

The decrease in cash provided by operating activities for fiscal 2025 was due primarily to lower cash impacts of net income, partially offset by positive changes in working capital driven by more effective inventory management.

Net cash provided by operating activities totaled $85.2 million for fiscal 2024 compared to $306.3 million for fiscal 2023.

The decrease in cash provided by operating activities for fiscal 2024 was primarily the result of changes in working capital, particularly with respect to changes in inventory and other current assets within fiscal 2024 when compared to changes in inventory and other current assets within fiscal 2023.

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These increases in cash from working capital changes were partially offset by a decrease in the change for accounts receivable of $78.1 million for fiscal 2023 due to lower sales in the fourth quarter of fiscal 2023 compared to the fourth quarter of fiscal 2022.

Net cash provided by operating activities totaled $400.3 million during fiscal 2022.

This cash activity was primarily driven by net income of $296.2 million combined with changes in our working capital components after adjusting for the impact of working capital related to our acquisition of Vandermeer.

See Note 2, Business Combination , in Item 8 of this Annual Report for more information about this acquisition.

The changes in working capital components resulted in an increase in cash due to a decrease in accounts receivable of $101.3 million and a decrease in inventory of $20.8 million, partially offset by a decrease in accounts payable of $31.8 million.

During fiscal 2022, we completed the repurchase of properties previously contributed to the BlueLinx Corporation Hourly Retirement Plan for $11.1 million.

The cash outflow associated with the purchase of these properties is included in pension contributions within the operating activities section of our consolidated statement of cash flows for fiscal 2022.

Investing Activities

Net cash used in investing activities was $119.5 million during fiscal 2025, primarily for our acquisition of Disdero and for capital expenditures.

Our investing activities in fiscal 2025 reflected continuing improvements to our distribution facilities, upgrades to our fleet, and digital transformation.

Net cash used in investing activities was $39.2 million during fiscal 2024, primarily for capital expenditures.

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Our investing activities in fiscal 2023 reflected continuing improvements to our distribution facilities and upgrades to our fleet.

Net cash used in investing activities was $98.7 million during fiscal 2022, which was primarily driven by cash of $63.8 million used for the acquisition of Vandermeer and capital expenditures of $35.9 million throughout fiscal 2022.

Financing Activities

Net cash used in financing activities was $60.1 million for fiscal 2025.

Of this amount $45.3 million was used to repurchase our common stock under authorized share repurchase programs and remit excise taxes due on fiscal 2023 share repurchases, $3.4 million was used to repurchase shares to satisfy employee payroll and tax withholdings for vesting of share-based compensation, and $13.4 million was used for payments on finance lease obligations.

Of this amount $38.1 million was used to repurchase our common stock under authorized share repurchase programs and remit excise taxes due on fiscal 2024 share repurchases, $2.5 million was used to repurchase shares to satisfy employee payroll and tax withholdings for vesting of share-based compensation, and $16.3 million was used for principal payments on finance lease obligations.

Net cash used in financing activities was $62.1 million for fiscal 2024.

Net cash used in financing activities was $56.6 million for fiscal 2023.

Of this amount $42.1 million was used to repurchase our common stock under authorized share repurchase programs, $5.3 million was used to repurchase shares to satisfy employee payroll and tax withholdings for vesting of share-based compensation, and $9.2 million was used for payments on finance lease obligations.

Net cash used in financing activities was $87.9 million for fiscal 2022, which was primarily driven by $66.4 million used to repurchase our common stock under our share repurchase program, including the accelerated share repurchase agreement (the “ASR Agreement”).

Additionally, $10.5 million was used to repurchase shares to satisfy employee tax withholdings on the vesting of restricted stock units, and $10.9 million was for payments on our finance lease obligations.

Share Repurchase Programs

As discussed elsewhere in this Form 10-K, during fiscal years 2024, 2023, and 2022 we used cash of $45.0 million, $42.1

million, and $66.4 million, respectively, to repurchase shares of our common stock under repurchase programs authorized by our Board of Directors, excluding excise tax due on the 2024 and 2023 repurchases.

As of December 28, 2024, we had $46.5 million of remaining repurchase authorization under the $100 million program approved by our Board of Directors on October 31, 2023.

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

Common Stock Repurchases

During fiscal years 2025, 2024, and 2023 we used cash of $37.8 million, $45.0 million, and $42.1 million, respectively, to repurchase shares of our common stock under repurchase programs authorized by our Board of Directors, excluding excise tax due on the repurchases.

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.

As of January 3, 2026, we had $8.7 million of remaining repurchase authorization under the $100 million program approved by our Board of Directors on October 31, 2023.

On July 28, 2025, our board of directors authorized a new share repurchase program for $50 million.

The 2025 authorization may be used after exhaustion of the 2023 authorization, resulting in a total remaining purchase authorization at the end of fiscal 2025 of $58.7 million under both of our authorized share repurchase programs.

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

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 sheet.

Our net working capital as of December 28, 2024 and December 30, 2023 is presented in the following table:

December 28, 2024 December 30, 2023

(In thousands)

Our net working capital as of January 3, 2026 and December 28, 2024 is presented in the following table:

(in thousands) January 3, 2026 December 28, 2024

(53 weeks) (52 weeks)

Current assets included in net working capital:

Accounts receivable, less allowance for doubtful accounts $ 225,837 $ 228,410

Accounts receivable, net $ 218,161 $ 225,837

Inventories, net 325,998 355,909

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Net working capital $ 407,771 $ 411,544

As of December 28, 2024, and December 30, 2023, debt and finance leases consisted of the following:

December 28, 2024 December 30, 2023

As of January 3, 2026, and December 28, 2024, debt and finance leases consisted of the following:

January 3, 2026 December 28, 2024

(In thousands)

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$ 300,000 $ 300,000

Revolving credit facility (2)

Revolving credit facilities (2)

Finance lease obligations (3)

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Total debt and finance leases, net of current portions $ 595,591 $ 575,063

(1) As of December 28, 2024 and December 30, 2023, our long-term debt was comprised of $300.0 million of senior secured notes issued in October 2021.

These notes are presented under the long-term debt caption of our balance sheet at $295.1 million and $293.7 million as of December 28, 2024 and December 30, 2023, respectively.

This presentation is net of their discount of $2.5 million and $3.0 million and the combined carrying value of our debt issuance costs of $2.4 million and $3.2 million as of December 28, 2024 and December 30, 2023, respectively.

(1) As of January 3, 2026 and December 28, 2024, our long-term debt was comprised of $300.0 million of senior secured notes issued in October 2021.

These notes are presented under the long-term debt caption of our balance sheet at $296.7 million and $295.1 million as of January 3, 2026 and December 28, 2024, respectively.

This presentation is net of their discount of $2.0 million and $2.5 million and the combined carrying value of our debt issuance costs of $1.3 million and $2.4 million as of January 3, 2026 and December 28, 2024, respectively.

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

(2) No borrowings were outstanding during fiscal 2025 or fiscal 2024.

Available borrowing capacity under this revolving credit facility was $346.2 million and $346.5 million on December 28, 2024 and December 30, 2023, respectively.

Available borrowing capacity under our revolving credit facilities was $340.1 million and $346.2 million on January 3, 2026 and December 28, 2024, respectively.

Available borrowing capacity is net of undrawn letters of credit commitments.

(3) Refer to Note 13, Lease Commitments , in Item 8 of this Annual Report for interest rates associated with finance lease obligations.

If any borrowings had been outstanding on our revolving credit facility as of January 3, 2026, the borrowings would have incurred interest at the variable rate of 4.77 percent per annum.

(3) Refer to Note 13, Lease Commitments , in Item 8 of this Annual Report.

Senior Secured Notes

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Our 2029 Notes 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 December 28, 2024, we were in compliance with these covenants.

Revolving Credit Facility

Our amended revolving credit facility matures on August 2, 2026 provided we remain in compliance with the related covenants.

As of December 28, 2024, we were in compliance with these covenants.

Any outstanding borrowings under the 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 revolving credit agreement) 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.

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

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

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

Available borrowing capacity under our Revolving Credit Facility was $346.2 million on December 28, 2024.

As of January 3, 2026, we were in compliance with these covenants.

Revolving Credit Facilities

On August 27, 2025, we entered into a new credit agreement with Bank of America, National Association, and certain other financial institutions.

The new credit agreement matures August 27, 2030 and initially provides for a senior secured revolving loan and letter of credit facility (collectively, referred to as the “revolving credit facility”) of up to $350 million and includes a $35 million swing line subfacility for letters of credit.

Subject to certain conditions and consents, we have the option in the future to increase the revolving credit facility by an aggregate additional principal amount of up to $300 million.

the full amount of the additional increases in commitments in the future, the revolving credit facility could allow total borrowings of up to $650 million.

Our obligations under the new credit agreement are secured by a security interest in substantially all of the Company’s and its subsidiaries’ assets (other than real property), including inventories, accounts receivable, and proceeds from those items.

Any borrowings under the new credit agreement are subject to availability under the “borrowing base” (as such term is defined in the new credit agreement).

The new 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.

If borrowings are outstanding under the credit agreement, interest accrues 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 the borrowers’ 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 the Borrowers’ excess availability (as defined) for the immediately preceding fiscal quarter as calculated by the administrative agent, for loans based on the base rate.

The new credit agreement replaced our former $350 million secured revolving credit facility, dated April 13, 2018.

No borrowings were outstanding on the former revolving credit facility on August 27, 2025.

As of January 3, 2026, we had zero outstanding borrowings and excess availability, including cash in qualified accounts, of $725.9 million under our new revolving credit facility.

Available borrowing capacity under our new revolving credit facility was $340.1 million as of January 3, 2026.

During fiscal 2025, fiscal 2024, and fiscal 2023, the Company incurred no interest expense for its revolving credit facilities since no borrowings were outstanding during those fiscal years.

During fiscal 2025, 2024, and 2023, the Company incurred $0.9 million, $1.0 million, and $1.0 million respectively, of fees associated with the revolving credit facilities, primarily unused line fees.

These expenses are included in Interest expense, net on the Company‘s consolidated statement of operations.

Finance Lease Commitments

Our finance lease liabilities consist of leases related to equipment and vehicles, and to real estate, with the majority of those finance lease commitments relating to the real estate financing transactions.

Our total finance lease commitments totaled $292.5 million and $285.4 million as of December 28, 2024 and December 30, 2023, respectively.

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

Our finance lease liabilities consist of leases related to equipment, vehicles, and real estate.

Our total finance lease commitments totaled $321.3 million and $292.5 million as of January 3, 2026 and December 28, 2024, respectively.

Of the $321.3 million of finance lease commitments as of January 3, 2026, $240.6 million related to real estate and $80.6 million related to equipment.

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

As of December 28, 2024, $12.5 million of our finance leases are classified as current liabilities.

The real estate finance leases noted above include $125.1 million and $125.0 million as of December 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.

As of January 3, 2026, $22.3 million of our finance leases are classified as current liabilities.

The real estate finance leases noted above include $124.1 million and $125.1 million as of January 3, 2026 and December 28, 2024, respectively, for sale-leasebacks of real estate in fiscal 2019 and 2020 that did not qualify for sale treatment for accounting purposes.

Off-Balance Sheet Arrangements

As of December 28, 2024 and December 30, 2023, we did not have any off-balance sheet arrangements other than short-term inventory commitments in the normal course of our business.

As of January 3, 2026 and December 28, 2024, we did not have any off-balance sheet arrangements other than short-term inventory commitments in the normal course of our business.

Our purchase order commitments are based on near-term needs and are typically fulfilled by vendors within short time horizons.

We do not have significant agreements for the purchase of inventory specifying minimum quantities or set prices that exceed expected requirements or that we cannot be cancel within 30 to 60 days.

Critical Accounting Policies and Estimates

Our consolidated financial statements are prepared in accordance with accounting principles generally accepted in the U.S., which require management to make estimates, judgments, and assumptions that affect the amounts reported in the consolidated financial statements and accompanying notes.

We believe that our most critical accounting policies and estimates relate to:

(1) revenue recognition;

(2) income taxes;

(3) business combinations;

and (4) goodwill.

Critical Accounting Estimates

Our significant accounting policies are disclosed in Note 1, Summary of Significant Accounting Policies to our consolidated financial statements in Item 8 of this Annual Report.

The following discussion addresses our most critical accounting estimates, which are those that are both important for the representation of our financial condition and results of operations, and that require significant judgment or use of significant assumptions or complex estimates.

financial statements and accompanying notes.

Accounting estimates and assumptions discussed in this section are those that we consider to be the most critical to an understanding of our financial statements because they involve significant judgments and uncertainties.

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While our estimates and assumptions are based on our knowledge of current events and actions we may undertake in the future, actual results ultimately may differ from these estimates and assumptions.

For a discussion of the Company’s significant accounting policies, see Note 1, Summary of Significant Accounting Policies , in Item 8 of this Annual Report.

We believe that our most critical accounting policies and estimates relate to:

(1) revenue recognition;

(2) income taxes;

(3) business combinations;

and (4) goodwill.

Revenue Recognition

We recognize revenue when the following criteria are met:

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Management also considers past results in making such estimates.

The actual amounts ultimately paid may be different from our estimates, and recorded once they have been determined.

The actual amounts may be different from our estimates, and such differences are recorded once they have been determined.

Our annual income tax rate is based on our taxable income, statutory tax rates, and tax planning opportunities available to us in the various jurisdictions in which we operate.

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The income tax rates used to determine deferred income tax assets or liabilities are the enacted income tax rates in effect for the year and manner in which the differences are expected to reverse.

Based on the evaluation of available information, we recognize future income tax benefits, such as net operating loss carryforwards, to the extent that realizing these benefits is considered more likely than not.

Based on the evaluation of available information, we recognize

future income tax benefits, such as net operating loss carryforwards, to the extent that realizing these benefits is considered more likely than not.

We evaluate our ability to realize the income tax benefits associated with deferred income tax assets by analyzing our forecasted taxable income using both historical and projected future operating results, the reversal of existing taxable temporary differences, taxable income in prior carryback years (if permitted), and the availability of income tax planning strategies.

A valuation allowance is required to be established unless management determines that it is more likely than not that we will ultimately realize the income tax benefit associated with a deferred income tax asset.

As of December 28, 2024, positive evidence continued to outweigh negative evidence, as such no valuation allowance was deemed necessary except to the extent

of certain state net operating losses.

The valuation allowance related to our net operating losses as of December 28, 2024 was approximately $3.5 million.

As of January 3, 2026, positive evidence continued to outweigh negative evidence, as such no valuation allowance was deemed necessary except to the extent of certain state net operating losses.

The valuation allowance related to our net operating losses as of January 3, 2026 was approximately $3.4 million.

See Note 7, Income Taxes , in Item 8 of this Annual Report.

The effective income tax rate that is calculated from our consolidated statement of operation can differ from statutory income tax rates due in part to certain expenses that are not deductible, in full or partially, on our income tax returns, such as business meals, entertainment, and executive compensation, and due to adjustments to deferred income tax assets related to stock-based compensation.

The impact that such differences can have on our effective income tax rate for financial reporting purposes is more material for reporting periods in which either, or both, our pre-tax income or income tax expense (or benefit) are low.

For a reconciliation of the impact that these items had on our effective income tax rate for fiscal 2025, see Note 7, Income Taxes , to the consolidated financial statements.

Business Combinations

We account for business combinations by recognizing the assets acquired and liabilities assumed at the acquisition date fair value.

We account for business combinations using the acquisition method of accounting, which requires that once control is obtained, all the assets acquired and liabilities assumed are recorded at their respective fair values at the date of acquisition.

The determination of the acquisition date fair values of identifiable assets acquired and liabilities assumed requires estimates and the use of valuation techniques when fair value is not readily available and requires a significant amount of management judgment.

We must make significant estimates and assumptions about intangible assets, obligations assumed and pre-acquisition contingencies, including uncertain tax positions and tax-related valuation allowances and reserves, where applicable.

In valuing certain acquired assets and liabilities, fair value estimates use Level 3 inputs, including future expected cash flows and discount rates.

Goodwill is measured as the excess of consideration transferred over the fair values of the assets acquired and the liabilities assumed.

While we use our best estimates and assumptions to value assets acquired and liabilities assumed at the acquisition date, our estimates are inherently uncertain and subject to refinement.

As a result, during the measurement period, which may be up to one year from the acquisition date, we may record adjustments to the assets acquired and liabilities assumed, with the corresponding offset to goodwill.

Changes in assumptions concerning future financial results or other underlying assumptions could have a significant impact on the determination of the fair values of the customer relationships intangible assets acquired.

The excess of the purchase price over fair values of identifiable assets acquired and liabilities assumed is recorded as goodwill.

For the valuation of intangible assets acquired in a business combination, we typically use an income approach to estimate fair value.

Critical inputs and assumptions in valuing certain of the intangible assets include, but are not limited to, future expected cash flows from customer relationships and developed technologies, expected customer attrition rates, discount rates, the acquired Company’s brand and competitive position, as well as assumptions about the period of time the acquired brand will continue to be used in the combined Company’s product portfolio.

When a business combination occurs late in a reporting period, we may utilize a method known as “benchmarking” to provide preliminary estimates for the fair values of intangible assets, goodwill, acquired leases, and inventory for financial reporting purposes in the reporting period in which the business combination occurs.

The “benchmarking” method involves utilizing valuation inputs, such as discount rates, royalty rates, etc., from our prior business combinations and/or similar business combination completed by other entities.

The preliminary fair value estimates are updated in the subsequent reporting period when additional and more specific information is gathered and analyzed for the acquired business.

After subsequent adjustments are made for any “benchmarking” estimates, and for business combinations where the “benchmarking” method is not utilized, our estimates of fair value assigned to acquired assets and assumed liabilities may be inherently uncertain and subject to refinement.

As a result, during the measurement period, which can last up to one year from the acquisition date, we may record adjustments to the assets acquired and liabilities assumed, with the corresponding offset to goodwill.

Upon the conclusion of the measurement period, any subsequent adjustments arising from new facts and circumstances are recorded to the consolidated statements of operations.

The results of operations of acquisitions are reflected in our consolidated financial statements from the date of acquisition.

Accounting for business combinations requires our management to make significant estimates and assumptions about intangible assets, obligations assumed and pre-acquisition contingencies, including uncertain tax positions and tax-related valuation allowances and reserves, where applicable.

Critical inputs and assumptions in valuing certain of the intangible assets include, but are not limited to, future expected cash flows from customer relationships and developed technologies;

the acquired Company’s brand and competitive position, as well as assumptions about the period of time the acquired brand will continue to be used in the combined Company’s product portfolio;

and discount rates.

The results of operations of acquisitions are reflected in the Company’s consolidated financial statements from the date of acquisition.

Goodwill is an asset representing the future economic benefits arising from other assets acquired in a business combination that are not individually identified and separately recognized.

Estimates are used in the determination of the fair values of identifiable asset acquired, including intangible assets, and liabilities assumed in a business combination, but the initial carrying value assigned to goodwill is of a residual nature.

Estimates are used in the determination of the fair values of identifiable assets acquired, including intangible assets, and liabilities assumed in a business combination, but the initial

carrying value assigned to goodwill is of a residual nature.

Goodwill is not subject to amortization but must be tested for impairment at least annually using either a qualitative method or a quantitative method.

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Based on the results of our most recent annual assessment, which was quantitative, our goodwill was not impaired.

As of December 28, 2024, the carrying value of our goodwill was $55.4 million, which represented 3.5% of our consolidated assets.

The results of this most recent annual assessment indicated that the estimated fair value of the enterprise exceeded its carrying value by approximately 10% as of the assessment date.

The estimation of the fair value of the enterprise was based in part on a discounted cash flows model that utilizes key inputs such as our forecasted gross profit and our cost of capital.

Given that the estimated fair value of the enterprise exceeded its carrying value by only 10% as of the most recent assessment date, our goodwill could be impaired in future reporting periods if any one or more of the inputs into the discounted cash flows model, including the aforementioned key inputs, do not meet forecasted expectations.

As of January 3, 2026, the carrying value of our goodwill was $67.2 million, which represented 4.3% of our consolidated assets.

Between our annual impairment assessment for fiscal 2025 and 2024, we noted no interim events or circumstances to indicate that the carrying value of our goodwill was impaired.

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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-K

Item 7. Management’s Discussion and Analysis