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(770) 953-7000

(Registrant’s telephone number, including area code)

(Former name, former address and former fiscal year, if changed since last report.)

Securities registered pursuant to Section 12(b) of the Act:

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☑ No  ☐

Indicate by check mark whether the registrant has submitted electronically (Section 232.405 of this chapter) every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes ☑ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

                                                                                      

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☑

As of July 25, 2025, there were 7,892,416 shares of BlueLinx Holdings Inc. common stock, par value $0.01, outstanding.

 

 

 

 

 

BlueLinx Holdings Inc., including consolidated subsidiaries (collectively, the “Company”), is a leading wholesale distributor of residential and commercial building products in the United States. The Company is a two-step distributor and purchases products from manufacturers and distributes those products to dealers and other suppliers in local markets, who then sell those products to end users. The Company carries a broad portfolio of both branded and private-label stock keeping units (“SKUs”) across two principal product categories: specialty products and structural products. Specialty products include items such as engineered wood, siding, moulding and millwork, outdoor living, specialty lumber and panels, and industrial products. Structural products include items such as lumber, plywood, oriented strand board, rebar, and remesh. The Company also provides a wide range of value-added services and solutions aimed at relieving distribution and logistics challenges for its customers and suppliers, while enhancing their marketing and inventory management capabilities.

The Company’s unaudited condensed consolidated financial statements and accompanying notes have been prepared using generally accepted accounting principles in the United States (“GAAP”) and the interim reporting guidance of the U.S. Securities and Exchange Commission (“SEC”). The Company is composed of a single reportable segment for financial reporting purposes. The Company’s consolidated balance sheet as of December 28, 2024 contained herein was derived from the audited consolidated balance sheet included in the Company’s Annual Report on Form 10-K for the fiscal year ended December 28, 2024 (the “2024 Form 10-K”), as filed with the SEC on February 18, 2025. In the opinion of the Company’s management, the unaudited condensed consolidated financial statements reflect all adjustments, which are of a normal recurring nature, necessary for a fair presentation of the Company’s results of operations, financial position, and cash flows for the reporting periods presented.

 

The Company has condensed or omitted certain notes and other information from the unaudited condensed consolidated financial statements presented in this report. Therefore, these condensed financial statements and accompanying notes should be read in conjunction with the Company’s 2024 Form 10-K. The results for the three and six fiscal months ended June 28, 2025 are not necessarily indicative of results that may be expected for the full fiscal year ending January 3, 2026, or any other interim period. For the fiscal reporting periods included in the unaudited condensed consolidated financial statements included in this Quarterly Report on Form 10-Q, the Company did not have any items of other comprehensive income (loss), nor did the Company have any accumulated other comprehensive income (loss).

The Company operates on a 5-4-4 fiscal calendar and its fiscal year ends on the Saturday closest to December 31st of each year and may comprise 53 weeks in certain years. Fiscal 2025 contains 53 weeks and will end on January 3, 2026. Fiscal 2024 contained 52 weeks and ended on December 28, 2024.

During the first quarter of fiscal 2025, the Company settled certain of the initial insurance claims related to property damaged or destroyed at its Erwin, Tennessee owned facility in late third quarter 2024 due to Hurricane Helene. The Company 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 the Company’s unaudited condensed consolidated statement of operations for the six fiscal months ended June 28, 2025.

The preparation of financial statements in conformity with GAAP requires the Company’s management to make estimates based on assumptions about current and, for some estimates, future economic and market conditions, which affect reported amounts and related disclosures in the Company’s financial statements. Although current estimates contemplate current and expected future conditions, as applicable, it is reasonably possible that actual conditions could differ from management’s expectations, which could materially affect the Company’s results of operations and financial position.

The Company has made no material changes to its significant accounting policies described in the notes to its consolidated financial statement included in its 2024 Form 10-K. The Company did not adopt any new accounting standards during the six fiscal months ended June 28, 2025.

Income Tax Disclosure Improvement. On December 14, 2023, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2023-09, Improvements to Income Tax Disclosures (“ASU 2023-09”), which establishes new income tax disclosure requirements in addition to modifying and eliminating certain existing requirements. Under the new guidance, entities must consistently categorize and provide greater disaggregation of information in the rate reconciliation. They must also further disaggregate income taxes paid. The ASU’s disclosure requirements apply to all entities subject to Accounting Standards Codification (“ASC”) No. 740, Income Taxes (“ASC 740”). The overall objective of these disclosure requirements is for an entity, particularly an entity operating in multiple jurisdictions, to disclose sufficient information to enable users of financial statements to understand the nature and magnitude of factors contributing to the difference between the effective income tax rate and the statutory income tax rate. ASU 2023-09 will be effective for the Company for the fiscal 2025 annual reporting period. Since this new ASU addresses only disclosures, the Company does not expect the adoption of this ASU to have any material effects on its financial condition, results of operations or cash flows. The Company is currently evaluating any new disclosures that may be required upon adoption of ASU 2023-09.

Costs and Expenses Disclosures. On November 4, 2024, the FASB issued ASU No. 2024-03, Income Statement—Reporting Comprehensive Income—Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses (“ASU 2024-03”), which establishes new disaggregation disclosure requirements for certain costs and expenses in the notes to the consolidated financial statements. Under the new guidance, an entity must provide details of the components of its expense captions from continuing operations presented on the face of the statement of operations as well as a qualitative description of the amounts remaining that are not separately disaggregated quantitatively. Relevant disclosure categories include purchases of inventory, employee compensation, depreciation and intangible asset amortization. An entity must also disclose the total amount of selling expenses, and in annual reports, its definition thereof. The disclosure of these costs and expenses will be required in addition to and irrespective of their inclusion in other disclosures. ASU 2024-03 will be effective for the Company for the fiscal 2027 annual reporting period and for interim periods beginning in fiscal 2028. Since this new ASU addresses only disclosures, the Company does not expect its adoption to have any material effects on its financial condition, results of operations or cash flows. The Company is currently evaluating the new disclosures that will be required upon adoption of ASU 2024-03.

The Company’s inventories consist almost entirely of finished goods inventory, with a very limited amount of work-in-process inventory. The cost of all inventories is determined by the moving average cost method. The Company includes all material charges directly incurred in bringing inventory to its existing condition and location, including the cost of inbound freight, volume incentives, inventory adjustments, tariffs, duties and other import fees. The Company evaluates the carrying value of its inventory at the end of each fiscal quarter to ensure that inventory, when viewed by category, is carried at the lower-of-cost-or-net-realizable-value (“LCNRV”). This evaluation also considers matters that may impact the net realizable value of inventory such as damaged or obsolete inventory. Any LCNRV decline that is expected to be restored within the current fiscal year, prior to the inventory being sold, is not recognized in an interim fiscal period. As of June 28, 2025 and December 28, 2024, the carrying values of the Company’s inventory reported on its consolidated balance sheets did not reflect any material adjustments for LCNRV matters. In the second quarter of fiscal 2024, the Company recorded a LCNRV provision of $2.4 million as a result of the decrease in the value of certain of the Company’s structural lumber and panels inventory related to the decline in wood-based commodity market prices as of the end of the reporting period.

Substantially all of the amount reported in Cost of products sold on the Company’s consolidated statement of operations is composed of costs incurred to purchase inventory that is subsequently resold to customers, including costs related to import duties and tariffs. Import duties and tariffs are not typically passed through to customers as separately billed charges. Certain import duties are classified by the U.S. Department of Commerce (the “Commerce Department”) as “anti-dumping or countervailing duties,” and these duties may be subject to periodic review and adjustments by the Commerce Department through a process known as a trade remedy administrative review, which can result in both retroactive and prospective adjustments to duty rates. At the time of importation, the Company tenders anti-dumping duty and countervailing duty cash deposits (as use of that term has been defined by the Commerce Department) to the U.S. Customs and Border Protection (“U.S. Customs”) and accounts for duties and tariffs based on the then-current rates in effect, and records any retroactive adjustments in the period in which U.S. Customs determines final duty rates at the time entries subject to anti-dumping and countervailing duties liquidate (as use of that term has been defined by the Commerce Department), typically through the resolution of a trade remedy administrative review proceeding.

Retroactive refunds received by the Company for adjustments to certain anti-dumping duties related to imported wood moulding and millwork products were $2.4 million and $16.9 million in the six fiscal months ended June 28, 2025 and June 29, 2024, respectively, with all occurring during the first fiscal quarters of both years. Additionally, the Company received interest related to these refunds of $0.5 million and $2.0 million in the six fiscal months ended June 28, 2025 and June 29, 2024, respectively, with all occurring during the first fiscal quarter of both years. The anti-dumping duty cash deposits were originally paid and accounted for by the Company in prior reporting periods at the then-current rates. Impacted inventories have since been sold. These adjustment amounts are reflected in Cost of products sold and Interest expense, net on the Company’s unaudited condensed consolidated statements of operations for the respective reporting periods. See Note 8, Commitments and Contingencies, for disclosure concerning another matter related to import duties.

During the six fiscal months ended June 28, 2025, the only change to the carrying values of the Company’s Goodwill and Intangible assets, net, was the scheduled amortization of intangible assets, all of which have definite lives. Amortization expense for intangible assets was $1.0 million and $1.0 million for the three fiscal months ended June 28, 2025 and June 29, 2024, respectively, and $1.9 million and $2.0 million for the six fiscal months ended June 28, 2025 and June 29, 2024, respectively.

Goodwill is not subject to amortization but must be tested for impairment at least annually, or more frequently if circumstances indicate an impairment may have occurred. The Company consists of one reporting unit, and any impairment assessment requires the Company to determine if the fair value of the reporting unit’s goodwill is less than its carrying amount. The Company tests goodwill for impairment during the fourth quarter of each fiscal year. In addition, the Company will evaluate the carrying value for impairment between annual impairment tests if an event occurs or circumstances change that would indicate the carrying amount may be impaired.

There were no goodwill impairment charges recorded in the three and six fiscal months ended June 28, 2025 or June 29, 2024, and there were no accumulated goodwill impairment balances as of June 28, 2025 or December 28, 2024. Non-cash provisions for the impairment of goodwill and/or other intangible assets could arise in future reporting periods due to sustained and significant changes in circumstances, such as declines in profitability and cash flow due to long-term deterioration in macroeconomic and industry conditions, the loss of key customers, a sustained decrease in the Company’s share price, or other unanticipated events.

The following table presents the Company’s revenues disaggregated by revenue source. Sales and usage-based taxes are excluded from revenues.

The following table presents the Company’s revenues disaggregated by sales channel. Warehouse sales are delivered from the Company’s warehouses. Reload sales are similar to warehouse sales but are shipped from non-warehouse locations, most of which are operated by third parties, where the Company stores owned products to enhance operating efficiencies. The reload channel is employed primarily to service strategic customers that are less economical to service from Company warehouses, and to distribute large volumes of imported products from port facilities. Direct sales are shipped from the manufacturer to the customer and therefore the Company does not take physical possession of the inventory and, as a result, typically generate lower margins than the warehouse and reload distribution channels. The direct distribution channel requires the lowest amount of committed capital and fixed costs.

The Company generally expenses sales commissions when incurred because the amortization period would typically be one year or less. These expenses are recorded within SG&A expense.

The Company has made an accounting policy election to treat outbound shipping and handling activities as an SG&A expense. Shipping and handling expenses include amounts related to the administration of the Company’s logistical infrastructure, handling of material in its warehouses, and amounts pertaining to the delivery of products to customers, such as fuel and maintenance expenses for mobile fleet, wages for drivers, and third-party freight charges. These expenses were $41.3 million and $37.6 million for the three fiscal months ended June 28, 2025 and June 29, 2024, respectively, and $80.8 million and $75.8 million for the six fiscal months ended June 28, 2025 and June 29, 2024, respectively.

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

As of June 28, 2025 and December 28, 2024, debt and finance lease obligations consisted of the following:

(1) As of June 28, 2025 and December 28, 2024, long-term debt was comprised of $300 million of Senior Secured Notes (“2029 Notes”) issued in October 2021 and maturing November 15, 2029. These notes are presented under the Long-term debt caption of the Company’s unaudited condensed consolidated balance sheets in the net amounts of $295.7 million and $295.1 million as of June 28, 2025 and December 28, 2024, respectively. This balance sheet presentation is net of unamortized discount of $2.2 million and $2.5 million, respectively, and unamortized debt issuance costs of $2.0 million and $2.4 million, respectively, as of June 28, 2025 and December 28, 2024. The Senior Secured Notes are presented in this table at their face value.

(2) Available borrowing capacity under the Revolving Credit Facility was $343.5 million and $346.2 million as of June 28, 2025 and December 28, 2024, respectively. The available borrowing capacity reflects undrawn letters of credit.

(3) Refer to Note 7, Leases, for interest rates associated with finance lease obligations. Amounts on this line include $125.1 million and $125.1 million as of June 28, 2025 and December 28, 2024, respectively, for sale-leasebacks of real estate in fiscal 2019 and fiscal 2020 that did not qualify for sale treatment for accounting purposes.

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

Interest expense for the reporting periods presented in the above table primarily reflects interest expense for the 2029 Notes, interest expense on finance lease obligations, certain ongoing fees for the Revolving Credit Facility that are classified as interest expense, amortization of debt issuance costs for the 2029 Notes and Revolving Credit Facility, and amortization of original-issue bond discount on the 2029 Notes. Total amortization of debt issuance costs and bond discount costs was $0.3 million and $0.3 million for the three fiscal months ended June 28, 2025 and June 29, 2024, respectively, and $0.7 million and $0.7 million for the six fiscal months ended June 28, 2025 and June 29, 2024, respectively. Interest expense for the three fiscal months ended June 28, 2025 and June 29, 2024 also included expense of $0.5 million and a credit of $0.4 million, respectively, and interest expense for the six fiscal months ended June 28, 2025 and June 29, 2024 also included $0.5 million and $1.2 million, respectively, for estimated interest expense related to import duties that the Company believes it may owe (see Note 8, Commitments and Contingencies).

Interest income for the reporting periods presented in the above table primarily reflects interest earned on the Company’s cash and cash equivalents. The refunds received from U.S. Customs for certain anti-dumping import duties (see Note 2, Inventory) resulted in additional interest income of $0.5 million and $2.0 million in the six fiscal months ended June 28, 2025 and June 29, 2024, respectively, all occurring during the first fiscal quarter of both years.

Interest expense, excluding amortization of debt issuance costs and bond discount, for the 2029 Notes totaled $4.5 million and $4.5 million for the three fiscal months ended June 28, 2025 and June 29, 2024, respectively, and $9.0 million and $9.0 million for the six fiscal months ended June 28, 2025 and June 29, 2024, respectively. The 2029 Notes pay interest at a fixed annual rate of 6.0% through maturity.

As of June 28, 2025 and December 28, 2024, the Company had no outstanding borrowings under the Revolving Credit Facility. Available borrowing capacity, reduced for undrawn letters of credit, under the Revolving Credit Facility was $343.5 million and $346.2 million as of June 28, 2025 and December 28, 2024, respectively. Excess availability, which includes availability under the Revolving Credit Facility plus cash and cash equivalents in qualified deposit accounts, was $730.3 million and $851.8 million as of June 28, 2025 and December 28, 2024, respectively. The Revolving Credit Facility is scheduled to terminate on August 2, 2026, and the Company intends to renew it before that date.

The Revolving Credit Facility and the 2029 Notes contain various covenants and restrictions, including customary financial covenants. The Company was in compliance with all such covenants as of June 28, 2025 and December 28, 2024. The Company’s right to make draws on the Revolving Credit Facility may be conditioned upon, among other things, compliance with these covenants. These covenants also limit the Company’s ability to, among other things: incur additional debt; grant liens on assets; make investments; repurchase stock; pay dividends and make distributions; sell or acquire assets, including certain real estate assets, outside the ordinary course of business; engage in transactions with affiliates; and make fundamental business changes.

The Company’s finance lease liabilities consist of leases related to equipment, vehicles, and real estate, with the majority of those finance leases related to real estate. For more information on the Company’s finance lease obligations, refer to Note 7, Leases.

The Company incurred stock-based compensation expense of $2.3 million and $1.4 million in the three fiscal months ended June 28, 2025 and June 29, 2024, respectively, and $4.9 million and $3.8 million in the six fiscal months ended June 28, 2025 and June 29, 2024, respectively.

During the three and six fiscal months ended June 28, 2025, the Company issued new grants for 247,261 and 293,923 restricted stock units (“RSUs”), respectively, with grant-date intrinsic values of $16.7 million and $21.0 million, respectively. These new RSU grants are scheduled to vest in one year, in three years, or over three years, depending on the terms of each grant, with vesting dependent on service requirements for all awards and market-based conditions for certain awards. Each RSU grant will potentially result in the future issuance of one share of the Company’s common stock if the vesting conditions are satisfied; however, RSUs with market-based vesting conditions could vest at rates between 50% and 200%.

Under the 2021 BlueLinx Holdings, Inc. 2021 Long-Term Incentive Plan as of June 28, 2025, a net of 273,941 shares of the Company’s common stock remain available for future issuances of equity-based compensation awards.

The Company has operating and finance lease agreements for certain of its distribution facilities, office space, land, mobile fleet, and equipment. Many of these lease agreements are non-cancelable and typically have a defined initial lease term, and some provide options to renew at the Company’s election for specified periods of time. The majority of these lease agreements have remaining lease terms of one to 15 years, some of which include one or more options to extend the lease agreement for typically five years. The Company’s lease agreements generally provide for fixed annual rentals. Certain lease agreements include provisions for escalating rent based on, among other things, contractually defined increases and/or changes in the Consumer Price Index (“CPI”). The known changes to lease payments are included in the lease liability at lease commencement. Unknown changes related to CPI are treated as variable lease payments and recognized in the period in which the obligation for those payments was incurred. In addition, a subset of vehicle lease cost is considered variable. Some lease agreements require the Company to pay taxes, insurance, and maintenance expenses associated with the leased assets. The lease agreements do not contain any material residual value guarantees or material restrictive covenants.

The Company determines if an arrangement is a lease at inception and assesses lease classification as either operating or finance at lease inception or modification. Operating lease right-of use (“ROU”) assets and liabilities are presented separately on the Company’s consolidated balance sheets. Finance lease ROU assets are included in property and equipment and the finance lease obligations are presented separately in the Company’s consolidated balance sheets. When a lease does not provide an implicit interest rate, the Company uses its incremental borrowing rate based on the information available at the commencement date to determine the present value of future payments. The Company has also made the accounting policy election to not separate lease components from non-lease components related to the mobile fleet asset class.

The Company’s finance lease liabilities consist of leases related to equipment and vehicles, and real estate. A majority of the Company’s finance leases relate to real estate. During fiscal 2017 and fiscal 2018, the Company entered into real estate financing transactions on certain of its warehouse facilities. These transactions were completed pursuant to sale-leaseback arrangements, and upon their completion, the Company entered into long-term leases on the properties having renewal options. The Company accounted for these transactions in accordance with the ASC 840, Leases, which was the lease accounting standard in effect for the Company at the inception of these arrangements. The Company recorded these transactions as finance lease liabilities on its consolidated balance sheet. Gains on these sale-leaseback transactions were deferred and are being recognized in the Company’s earnings in each subsequent reporting period. As of June 28, 2025 and December 28, 2024, the remaining unrecognized deferred gains related to these transactions were $65.3 million and $67.2 million, respectively, and these deferred gains are being recognized in earnings on a straight-line basis. The Company recognized $1.0 million and $1.0 million of the deferred gains in the three fiscal months ended June 28, 2025 and June 29, 2024, respectively, and $2.0 million and $2.0 million in the six fiscal months ended June 28, 2025 and June 29, 2024, respectively.

The following table presents the assets and liabilities related to the Company’s leases as of June 28, 2025 and December 28, 2024:

(1) Finance lease right-of-use assets are presented net of accumulated amortization of $107.9 million and $112.3 million as of June 28, 2025 and December 28, 2024, respectively.

The components of lease expense were as follows:

Supplemental cash flow information related to leases is as follows:

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

Supplemental balance sheet information related to leases is as follows:

The major categories of the Company’s obligations under finance leases as of June 28, 2025 and December 28, 2024 were as follows:

			As of
			June 28, 2025						December 28, 2024
Category:			(In thousands)
Equipment and vehicles			$	75,570					$	49,785
Real estate(1)			241,987						242,758
Total finance leases			$	317,557					$	292,543

(1)Amounts include $125.1 million and $125.1 million as of June 28, 2025 and December 28, 2024, respectively, for sale-leasebacks of real estate in fiscal 2019 and fiscal 2020 that did not qualify for sale treatment for accounting purposes.

Below is a summary of undiscounted finance and operating lease liabilities that have initial terms in excess of one year as of June 28, 2025. The table also includes a reconciliation of the future undiscounted cash flows to the present value of the finance and operating lease liabilities included in the unaudited condensed consolidated balance sheet, including options to extend lease terms that are reasonably certain of being exercised.

Government and regulatory agencies may have the ability to conduct routine audits and periodic examinations of, and administrative proceedings regarding, the Company’s business operations. As previously disclosed, U.S. Customs gathered initial information from the Company under routine audit procedures, and the information indicated that the Company potentially underpaid duties in prior periods arising from certain classification discrepancies for products imported into the United States as separately entered shipments. In working with U.S. Customs, the Company has exercised reasonable care to address this matter in an equitable and expeditious manner through the filing of a prior disclosure submission with U.S. Customs. As of June 28, 2025 and December 28, 2024, the Company estimated that it will be required to pay approximately $8.0 million, excluding any interest. This amount is reflected in Other current liabilities on the Company’s unaudited condensed consolidated balance sheet as of June 28, 2025 and December 28, 2024. On the Company’s unaudited condensed consolidated statements of operations, a $10.4 million estimate, excluding interest, was accrued for this matter during the first fiscal quarter of 2024. Due to a change in estimate, this amount was reduced by $2.7 million in the second fiscal quarter of 2024, for a net expense of $7.7 million in the six fiscal months ended June 29, 2024. Additional adjustments to the estimated liability were made in fiscal 2024 subsequent to June 29, 2024 to adjust the estimated liability to the $8.0 million as of June 28, 2025 and December 28, 2024. These estimated expense accruals and related adjustments were recorded within Cost of products sold. See Note 2, Inventory, for disclosure concerning another matter related to import duties.

In addition, as previously disclosed, U.S. Customs issued proposed notices of action to the Company, asking for confirmation that certain plywood products the Company imported into the United States originated from Vietnam and Indonesia, respectively, as opposed to China. The Company has provided responses to U.S. Customs and believes that the information it has provided supports the declared origins of the plywood. On July 21, 2025, the Company received a notice from U.S. Customs concluding that the plywood imports under review from Indonesia were found not to originate from China, thereby concluding that matter without any action being taken by U.S. Customs. The Company understands that the review by U.S. Customs of the Company’s imports of certain plywood products from Vietnam remains pending; if the government disagrees with the Company and determines the plywood from Vietnam that was identified in the proposed notice of action originated from China, the Company believes it is reasonably possible that it could be responsible for additional duties on the entries identified by U.S. Customs that could range from zero to $4 million.

From time to time, the Company may be involved in proceedings involving various environmental and pollution control laws and regulations in the jurisdictions in which it operates. When the Company believes it has material financial exposure to these matters, it estimates and recognizes adequate liabilities and, if applicable, also timely records any expected recoveries from insurance coverages or subrogation in accordance with GAAP. Such liabilities, when recorded, may or may not be discounted, as required or permitted by GAAP. Based on presently available information, the Company had no material obligations for environmental matters as of June 28, 2025 or December 28, 2024.

As of June 28, 2025, approximately 19.8% of the Company’s employees were represented by various local labor unions with terms and conditions of employment governed by collective bargaining agreements (“CBAs”).

Four CBAs covering approximately 5.4% of the Company’s employees are up for renewal during the remainder of fiscal 2025, of which two are set to be voted on by August 2025, one is currently being negotiated, and one is expected to be renegotiated before its renewal date.

The Company’s effective income tax rates for the three fiscal months ended June 28, 2025 and June 29, 2024 were 34.5% and 24.7%, respectively. For the six fiscal months ended June 28, 2025 and June 29, 2024, the Company’s effective income tax rates were 33.6% and 24.4%, respectively.

The Company’s effective income tax rates for the three and six fiscal months ended June 28, 2025 were both impacted by the permanent addback of certain nondeductible expenses, including meals and entertainment and executive compensation for the quarterly periods, as well as adjustments to deferred income tax assets related to stock-based compensation which increased the effective income tax rate.

The Company’s effective income tax rates for the three and six fiscal months ended June 29, 2024 were both impacted by the permanent addback of certain nondeductible expenses, including meals and entertainment and executive compensation, partially offset by a benefit from the vesting of restricted stock units in the fiscal periods. The income tax rate for the six fiscal months ended June 29, 2024 benefited from a partial release of a state income tax valuation allowance for deferred income tax assets, which impacted only the first quarter of 2024.

For fiscal 2025, the Company currently estimates that its annual effective income tax rate will be approximately 27%. On July 4, 2025, the law formally titled “An Act to Provide for the Reconciliation Pursuant to Title II of H. Con. Res. 14” (commonly referred to as the “One Big Beautiful Bill” or “OBBB”) was signed into law. The Company is evaluating the potential impacts that the OBBB may have on the Company’s 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, the Company does not believe the OBBB will have a material impact on its annual effective income tax rate for fiscal 2025.

For additional information about the Company’s income taxes, see Note 7, Income Taxes, to the consolidated financial statements included in Item 8 of the Company’s Annual Report on Form 10-K for the fiscal year ended December 28, 2024.

The Company calculates basic earnings per share by dividing net income for the period by the weighted average number of common shares outstanding for the period. For rounding purposes when calculating earnings per share, the Company’s policy is to round down to the whole cent.

Diluted earnings per share are calculated using the treasury stock method whereby net income for the period is divided by the weighted average number of common shares outstanding for the period plus the dilutive effect, if any, of shares of stock associated with unvested share-based grants. However, for performance-based share-based grants, the dilutive effect is included only for grants where the performance goals have been achieved.

The reconciliations of basic net income and diluted earnings per common share for the three and six fiscal months ended June 28, 2025 and June 29, 2024 are as follows:

Weighted-average unvested restricted stock units (“RSUs”) totaling 122,983 and 43,471 for the three and six month fiscal periods ended June 28, 2025, respectively, and 23,627 and 2,488 for the three and six month fiscal periods ended June 29, 2024, respectively, were not included in the dilutive effect of share-based awards for the respective periods because their effects were antidilutive. Additionally, as of June 28, 2025 and June 29, 2024, a total of 119,630 and 145,219, respectively, of certain unvested performance-based RSUs were outstanding but not included in the computation of diluted earnings per share because their performance metrics had not been achieved and thus they were not tested for dilution under the treasury stock method. Any outstanding RSU’s dilutive effect could change in future reporting periods.

On October 31, 2023, the Company’s board of directors authorized a share repurchase program for $100 million. During the three and six fiscal months ended June 28, 2025, the Company repurchased 283,081 and 469,129 shares, respectively, of its common stock at a weighted-average average price of $70.68 and $74.64, respectively, including broker commissions but excluding federal excise tax on the repurchases, for a total of $20.0 million and $35.0 million, respectively. These amounts are based on trade date activity, while the amounts reported on the Company’s consolidated statements of cash flows for share repurchases are based on settlement date activity. As of June 28, 2025, there remained approximately $11.5 million repurchase capacity under the authorization approved October 31, 2023.

Between June 28, 2025 and July 25, 2025, the Company did not repurchase any additional shares of its common stock.

On July 28, 2025, the Company’s board of directors authorized a new share repurchase program for $50 million. The 2025 authorization may be used after exhaustion of the 2023 authorization.

Under its share repurchase programs, the Company may repurchase its 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.

As of June 28, 2025 and December 28, 2024, the Company had no assets or liabilities for which the carrying value is remeasured to fair value at the end of each reporting period. The Company has not elected the fair value reporting option for any of its financial instruments.

The fair value of cash, cash equivalents, accounts receivable, accounts payable and accrued liabilities, to the extent the underlying liability will be settled in cash, approximates the carrying values because of the short-term nature of these instruments.

The estimated fair value of the Company’s $300 million 2029 Notes was determined based on Level 2 input using observable market prices in less active markets, as presented below:

(1) The $300 million obligation for the 2029 Notes is presented on the Company’s consolidated balance sheets net of unamortized debt issuance costs and discount totaling $4.3 million and $4.9 million as of June 28, 2025 and December 28, 2024, respectively. Periodic amortization of the issuance costs and discount each reporting period causes the carrying value of the 2029 Notes to gradually increase to the $300 million maturity amount scheduled for November 15, 2029. See Note 5, Debt and Finance Lease Obligations.

There were no borrowings outstanding under the Company’s Revolving Credit Facility during the three and six fiscal months ended June 28, 2025 or during fiscal year 2024.

12. Segment Reporting

The Company has one reportable segment: building products. The segment sells building products that are grouped into two primary categories: specialty products and structural products. The Company’s chief operating decision maker (“CODM”), as that term is defined under U.S. GAAP, is its chief executive officer (CEO). The Company derives substantially all of its revenues from the United States and all of the Company’s assets are located in the United States. The measure of segment assets is reported on the Company’s balance sheet as total consolidated assets. The segment’s accounting policies are the same as the accounting policies for the Company, as described in Note 1, Summary of Significant Accounting Policies, in Part II, Item 8 of the Company’s most recent Annual Report on Form 10-K.

The CODM’s method under GAAP that is used to assess performance and allocate resources is based on Net income as reported on the Company’s consolidated statement of operations. The following table presents information about Net income and significant expenses that are regularly reviewed by the Company’s CODM:

During the first quarter of fiscal 2025, the Company settled certain of the initial insurance claims related to property and equipment that was damaged or destroyed at its Erwin, Tennessee owned facility in late third quarter of fiscal 2024 due to Hurricane Helene. The Company 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 the Company’s unaudited condensed consolidated statement of operations for the six fiscal months ended June 28, 2025.

This Quarterly Report on Form 10-Q (“Quarterly Report” or “Form 10-Q”) contains forward-looking statements. Forward-looking statements include, without limitation, any statements that predict, forecast, indicate or imply future results, performance, liquidity levels or achievements, and may contain the words “believe,” “anticipate,” “could,” “expect,” “estimate,” “intend,” “may,” “project,” “plan,” “should,” “will,” “will be,” “will likely continue,” “will likely result,” “would,” or words or phrases of similar meaning. Forward-looking statements are based on estimates and assumptions made by our management that, although believed by us to be reasonable, are inherently uncertain. Forward-looking statements involve risks and uncertainties that may cause our business, strategy, or actual results to differ materially from the forward-looking statements. The forward-looking statements in this report include, without limitation, statements about anticipated effects of adopting certain accounting standards; estimated future annual amortization expense; estimates made in connection with revenue recognition; the expected outcome of legal proceedings; the expected outcome of government and regulatory proceedings; industry conditions; seasonality; liquidity and capital resources; our confidence in the Company’s long-term growth strategy; our areas of focus and management initiatives; the demand outlook for construction materials and expectations regarding new home construction, repair and remodel activity and continued investment in existing and new homes; our positioning for long-term value creation; our efforts and ability to generate profitable growth; our ability to increase net sales in specialty product categories; our ability to generate profits and cash from sales of specialty products; our ability to effectively manage inventory; our ability to manage our lease commitments; our ability to negotiate collective bargaining agreements; our multi-year capital allocation plans; our ability to manage volatility in wood-based commodities; our improvement in execution and productivity; our efforts and ability to maintain a disciplined capital structure and capital allocation strategy; our ability to maintain a strong balance sheet; our ability to focus on operating improvement initiatives and commercial excellence; 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.

We operate in a changing environment in which new risks can emerge from time to time. It is not possible for management to predict all of these risks, nor can it assess the extent to which any factor, or a combination of factors, may cause our business, strategy, or actual results to differ materially from those contained in forward-looking statements. Given these risks and uncertainties, we caution you not to place undue reliance on forward-looking statements. We expressly disclaim any obligation to update or revise any forward-looking statement as a result of new information, future events or otherwise, except as required by law.

We remain committed to driving a culture of profitable growth within new and existing product lines and geographies, while positioning the Company for long-term value creation. The following initiatives represent key areas of our management team’s focus:

1.Grow our higher-margin specialty product categories. We continue to pursue a revenue mix weighted toward higher-margin, specialty product categories such as engineered wood, siding, millwork, outdoor living, specialty lumber and panels, and industrial products. Additionally, we are expanding our value-added service offerings designed to simplify complex customer sourcing requirements.

2.Increase share gain in local and national markets. We continue to pursue multi-family project growth, expand our product lines with key national accounts, expand branded product lines into new geographic markets, and launch new product lines. With our expanded product categories, and our strategic vendor relationships, we seek to be an extension of our customers’ business in a scalable way.

3.Foster a performance-driven culture committed to business excellence and profitable growth to be the provider of choice for both suppliers and customers. We seek to improve the customer experience through enhanced tools, value-added services, and technology enablement, accelerating organic growth within specific product and solutions offerings where we are uniquely advantaged, increase our performance by leveraging our scale and national footprint together with pricing, operational and procurement capabilities, and deploy capital to drive sustained margin expansion, grow cash flow and maintain continued profitable growth.

4.Maintain a disciplined capital structure and pursue strategic investments that increase the value of the Company. We continue to strategically target acquisition opportunities that grow our higher-margin specialty products business, expand our geographic reach, or complement our existing capabilities. We also continue to evaluate and identify additional markets that are potential opportunities for new market development. 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:

•Used cash of $15.5 million and entered into $32.9 million of finance leases to enhance our facilities and fleet.

•Returned capital of $35 million to our shareholders by using cash to purchase 469,129 shares of our common stock at an average price of $74.61, excluding broker commissions and excise tax.

Our culture is guided by our values:

•Customer Centric - We put our customers first, so we are customer centric in all that we do.

•Integrity - We act with integrity, because doing the right thing is critical to our success.

•Respect - We treat everyone with dignity and respect.

•Grit - We show grit in the face of changing landscapes.

•Collaboration - We collaborate with each other and our customers to build great teams and construct innovative solutions.

Our results of operations and financial performance are influenced by a variety of factors, including the following: adverse housing market conditions; consolidation among competitors, suppliers, and customers; escalating changes in retaliatory trade policies of the United States and other countries; our dependence on international suppliers and manufacturers for certain products and related exposure to risks of new or increased tariffs and other risks that could affect our financial condition; pricing and product cost variability; disintermediation risk; volumes of product sold; competition; the cyclical nature of the industry in which we operate; loss of products or key suppliers and manufacturers; information technology security risks and business interruption risks; effective inventory management relative to our sales volume or the prices of the products we produce; 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; exposure to product liability and other claims and legal proceedings related to our business and the products we distribute; natural disasters, catastrophes, fire, wars or other unexpected events; the impacts of climate change; successful implementation of our strategy; wage increases or work stoppages by our union employees; costs imposed by federal, state, local, and other regulations; compliance costs associated with federal, state, and local environmental protection laws; the effects of epidemics, global pandemics or other widespread public health crises and governmental rules and regulations; fluctuations in our operating results; our level of indebtedness and our ability to incur additional debt to fund future needs; the covenants of the instruments governing our indebtedness limiting the discretion of our management in operating the business; the potential to incur more debt; the fact that we have consummated certain sale leaseback transactions with resulting long-term non-cancelable leases, many of which are or will be finance leases; the fact that we lease many of our distribution centers, and we would still be obligated under these leases even if we close a leased distribution center; inability to raise funds necessary to finance a required repurchase of our senior secured notes; a lowering or withdrawal of debt ratings; changes in our product mix; increases in fuel and other energy prices or availability of third-part freight providers; changes in insurance-related deductible/retention liabilities based on actual loss development experience; the possibility that the value of our deferred tax assets could become impaired; changes in our expected annual effective tax rate could be volatile; the costs and liabilities related to our participation in multi-employer pension plans could increase; the risk that our cash flows and capital resources may be insufficient to service our existing or future indebtedness; interest rate risk, which could cause our debt service obligations to increase; and changes in, or interpretation of, accounting principles.

These factors, and the related trends and uncertainties, have historically produced cyclicality in our results of operations, and we expect this cyclicality to continue in future periods.

For more information on the risk factors impacting our business, refer to Part II, Item 1A, Risk Factors, in this Form 10-Q and to Part I, Item 1A, Risk Factors, in our Annual Report on Form 10-K for the fiscal year 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.

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:

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:

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

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

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.

•Gross margin percentage for the Company decreased from 15.9% to 15.3% 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. 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.

For fiscal 2025, we currently estimate our annual effective income tax rate will be approximately 27%. 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. On July 4, 2025, the law formally titled “An Act to Provide for the Reconciliation Pursuant to Title II of H. Con. Res. 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.

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.

•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.

•Specialty products gross profit decreased by $18.3 million, or 8.8%, to $190.1 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). Excluding these amounts, interest income in the current fiscal period and prior year fiscal period would have been $9.2 million and $12.9 million, respectively, a decrease of $3.7 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.

For fiscal 2025, we currently estimate our annual effective income tax rate to be approximately 27%. 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.

We expect our primary sources of liquidity to be cash flows from sales and operating activities in the normal course of our operations, cash and cash equivalents on hand, and availability from our revolving credit facility, as needed. 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.

In October 2021, we completed the private offering of $300 million of our 6.0% senior secured notes due 2029 (the “2029 Notes”). Interest is payable semi-annually. 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.

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.

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

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 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 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.

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.

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.

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.

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. 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.

Net working capital is an important measurement we use to determine the efficiencies of our operations and our ability to readily convert assets into cash. Net working capital is defined as the sum of accounts receivable and inventory, less accounts payable, each determined in accordance with GAAP and included in our consolidated balance sheets. 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:

Our investments in capital assets consist of purchases of owned assets and the inception of financing lease arrangements for long-lived assets. 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.

The preparation of our consolidated financial statements and related disclosures in conformity with GAAP requires our management to make judgments and estimates that affect the amounts reported in our condensed consolidated financial statements and accompanying notes. There have been no material changes to our critical accounting policies and estimates from the information provided in Item 7 of our Annual Report on Form 10-K for the fiscal year ended December 28, 2024.

We are exposed to certain market risks as part of our on-going business operations. Our exposure includes commodity price risk and interest rate risk. There have been no material changes to our exposure to market risks from those disclosed in our Annual Report on Form 10-K for the fiscal year ended December 28, 2024.

Our management performed an evaluation, as of the end of the period covered by this report on Form 10-Q, under the supervision of our chief executive officer and chief financial officer, of the effectiveness of the design and operation of our disclosure controls and procedures (as defined in Rule 13a-15(e) and 15d-15(e) of the Securities and Exchange Act of 1934, as amended (the “Exchange Act”)). Based on that evaluation, our chief executive officer and chief financial officer have concluded that our disclosure controls and procedures are effective to ensure that information required to be disclosed by us in reports that we file or submit under the Exchange Act is recorded, processed, summarized, and reported within the time periods specified in the SEC’s rules and forms, and is accumulated and communicated to our management including our chief executive officer and chief financial officer, to allow timely decisions regarding required disclosure.

During the period covered by this report, there have been no changes in our internal control over financial reporting that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

We are, and from time to time may be, a party to routine legal proceedings incidental to the operation of our business. Except as disclosed in Note 8, Commitments and Contingencies, under Regulatory Matters, to our unaudited condensed consolidated financial statements in this Quarterly Report on Form 10-Q, the Company does not expect that the outcome of any other pending or threatened proceedings, if determined adversely to the Company, would individually, or taken together, have a material adverse effect on our financial condition, operating results, or cash flows, based on our current understanding of the relevant facts. Legal expenses incurred related to these contingencies are generally expensed as incurred.

There have been no material changes to the risk factors disclosed in Part I, Item 1A, “Risk Factors," in the Company’s 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.

The following table presents our share repurchase activity for each fiscal month of the fiscal quarter ended June 28, 2025:

(1) Includes shares withheld by us in connection with tax withholding obligations of our employees upon vesting of such employees’ restricted stock unit awards.

(2) Includes broker commissions associated with the repurchases. Excludes federal excise tax incurred under The Inflation Reduction Act of 2022.

(3) On October 31, 2023, our Board of Directors announced a new share repurchase authorization for up to $100 million. As of June 28, 2025, we had a remaining authorization amount of approximately $11.5 million under this program. With the remaining availability under the stock repurchase program, 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.

On July 28, 2025, our board of directors authorized a new share repurchase program for $50 million that may used after exhaustion of the 2023 authorization. Under this new authorization, 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.

None.

Not applicable.

None of our directors or executive officers adopted or terminated a Rule 10b5-1 trading arrangement or a non-Rule 10b5-1 trading arrangement (as defined in Item 408(c) of Regulation S-K) during the second quarter of fiscal 2025.

 

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.