BlueLinx Holdings Inc.

Previous wording

These risks and uncertainties also include those discussed under the heading “Risk Factors” in Item 1A of our Annual Report on Form 10-K for the year ended December 30, 2023, those discussed elsewhere in this Form 10-Q, and in future reports that we file with the SEC.

Current wording

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, those discussed elsewhere in this Form 10-Q, and in future reports that we file with the SEC.

Previous wording

In addition to historical information, the following discussion and other parts of this Form 10-Q contain forward-looking information that involves risks and uncertainties. Our actual results could differ materially from those anticipated by this forward-looking information due to the factors discussed under Item 1A “Risk Factors” in our Form 10-K for fiscal 2023 and under “Cautionary Statement Concerning Forward-Looking Statements” in Item 2 of this Form 10-Q.

Current wording

In addition to historical information, the following discussion and other parts of this Form 10-Q contain forward-looking information that involves risks and uncertainties. Our actual results could differ materially from those anticipated by this forward-looking information due to the factors discussed under Part II, Item 1A “Risk Factors” in this Form 10-Q, under Part I, Item 1A “Risk Factors” in our Form 10-K for fiscal 2024, and under “Cautionary Statement Concerning Forward-Looking Statements” in Item 2 of this Form 10-Q.

Previous wording

Migrate sales mix toward higher-margin specialty product categories. The Company is pursuing a revenue mix increasingly weighted toward higher-margin, specialty product categories such as engineered wood, siding, millwork, outdoor living, specialty lumber and panels, and industrial products. Additionally, the Company is expanding its value-added service offerings designed to simplify complex customer sourcing requirements, together with marketing, inventory and pricing services afforded by the Company’s national platform.

Current wording

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.

Previous wording

Foster a performance-driven culture committed to business excellence and profitable growth to be the provider of choice for suppliers and customers. This includes enhancing the customer experience through technology enablement; accelerating organic growth within specific product and solutions offerings where the Company is uniquely advantaged; enhancing our performance by leveraging our scale and footprint together with pricing, operational and procurement capabilities; and deploying capital to drive sustained margin expansion, grow cash flow and maintain continued profitable growth.

Current wording

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.

Previous wording

Maintain a disciplined capital structure and pursue strategic investments that increase the value of the Company. The Company continues to strategically target acquisition opportunities that grow its specialty products business, expand its geographic reach, or complement its existing capabilities. The Company also continues to identify markets that are potential opportunities for new market development. The Company further seeks to maintain a disciplined capital structure while at the same time investing in its business to modernize its distribution facilities, as well as its tractor and trailer fleet, and to improve operational performance. During the nine months ended September 28, 2024, we engaged in the following transactions:

Current wording

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 three fiscal months ended March 29, 2025, we engaged in the following transactions:

Previous wording

•Used cash of $19.8 million and entered into $16.7 million of finance leases to enhance our facilities and fleet.

Current wording

•Used cash of $5.9 million and entered into $28.1 million of finance leases to enhance our facilities and fleet.

Previous wording

•Returned capital of $30.0 million to our shareholders by using cash to purchase 297,951 shares of our common stock at an average price of $100.63.

Current wording

•Returned capital of $15.0 million to our shareholders by using cash to purchase 186,048 shares of our common stock at an average price of $80.62, excluding broker commissions and excise tax.

Previous wording

Our results of operations and financial performance are influenced by a variety of factors, including the following: housing market conditions; pricing and product cost variability; volumes of product sold; competition; the cyclical nature of the industry in which we operate; consolidation among competitors, suppliers, and customers; disintermediation risk; loss of products or key suppliers and manufacturers; our dependence on international suppliers and manufacturers for certain products; effective inventory management relative to our sales volume or the prices of the products we produce; business disruptions; potential acquisitions and the integration and completion of such acquisitions; information technology security risks and business interruption risks; the ability to attract, train, and retain highly qualified associates and other key personnel while controlling related labor costs; 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…

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Current wording

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…

Excerpt shortened here; the source contains the full paragraph.

Previous wording

For more information on the risk factors impacting our business, refer to Part I, Item 1A, Risk Factors, in our Annual Report on Form 10-K for the fiscal year 2023.

Current wording

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.

Previous wording

Our results of operations for the three months ended September 28, 2024 (“third quarter of fiscal 2024”) and for the three months ended September 30, 2023 (“third quarter of fiscal 2023”) were as follows:

Current wording

Our results of operations for the three fiscal months ended March 29, 2025 (“first quarter of fiscal 2025”) and for the three fiscal months ended March 30, 2024 (“first quarter of fiscal 2024”) were as follows:

Previous wording

The following table sets forth net sales by product category:

Current wording

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

Previous wording

For the third quarter of fiscal 2024, the Company generated consolidated net sales of $747.3 million, a decrease of $62.7 million, or 7.7 percent, compared to the third quarter of fiscal 2023. The decrease in net sales in the current quarter was attributable to continuing pricing pressures in both specialty products and structural products, with commodity prices in U.S. markets for lumber and panels being down 12 percent and 19 percent, respectively, compared to the prior year period. However, pricing declines were partially offset by volume growth for both specialty and structural products. The Company’s gross profit for the third quarter of fiscal 2024 decreased by $13.6 million to $125.7 million from $139.2 million in the prior year period and this decrease was attributable to both specialty and structural products. Gross margin percentage for the Company decreased from 17.2 percent to 16.8 percent in the current quarter, also attributable to both structural products and specialty products. The import-duty and LCNRV matters discussed in the sections below for specialty products and structural products contributed $5.9 million to the current quarter’s gross profit. Excluding these items, gross margin percentage was 16.0 percent for the current quarter.

Current wording

•This decrease in gross profit in the current fiscal quarter was attributable to both specialty and structural products.

Previous wording

Our selling, general, and administrative (“SG&A”) expenses increased by $0.9 million, or 0.9 percent, compared to the third quarter of fiscal 2023. In the current quarter, higher technology expenses associated with our digital transformation were partially offset by lower fleet-related logistics costs.

Current wording

Our selling, general, and administrative (“SG&A”) expenses increased by $2.8 million, or 3.1%, compared to the first quarter of fiscal 2024. This overall increase was due primarily to continuing technology initiatives associated with our digital transformation and also to higher logistics costs.

Previous wording

Depreciation and amortization expense increased 17.8 percent compared to the third quarter of fiscal 2023 due to a higher base of depreciable assets in the third quarter of fiscal 2024, resulting from our continued focus on strategic capital investment.

Current wording

Depreciation and amortization expense increased 1.3% compared to the first quarter of fiscal 2024 due to a higher base of depreciable assets in the first quarter of fiscal 2025, resulting from our continued focus on strategic capital investment.

Previous wording

Our effective income tax rates were 24.9 percent and 25.9 percent for the first nine months of fiscal 2024 and 2023, respectively. Our effective income tax rate for both periods was impacted by state taxes as well as 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, and in the 2024 period, a partial release of a valuation allowance for deferred income tax assets. For fiscal 2024, we expect our annual effective income tax rate will be approximately 26 percent.

Current wording

Our effective income tax rates were 32.3% and 24.1% for the first quarters of fiscal 2025 and fiscal 2024, respectively. Our effective income tax rates for the first quarters of fiscal 2025 and 2024 were 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. Our effective income tax rate for the first quarter of fiscal 2024 was also impacted by an adjustment to deferred income tax assets related to the partial release of a state income tax valuation allowance. For fiscal 2025, we currently estimate our annual effective income tax rate will be approximately 27%.

Previous wording

Our net income for the third quarter of fiscal 2024 was $16.0 million, or $1.87 per diluted share, versus $24.4 million, or $2.71 per diluted share, in the prior-year period. Decreases in our net income and earnings per diluted share were due primarily to the factors discussed above. The 2024 period also reflects a pre-tax benefit of $2.2 million related to an adjustment of the settlement charge recorded in the fourth quarter of 2023 to settle our defined benefit pension plan. This benefit was partially offset by $1.2 million of estimated net losses related to Hurricane Helene in September 2024, which is reported within Other operating expenses, net on our unaudited condensed consolidated statements of operations.

Current wording

Our net income for the first quarter of fiscal 2025 was $2.8 million, or $0.33 per diluted share, versus $17.5 million, or $2.00 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.

Previous wording

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 September 28, 2024, we had $526 million of cash and cash equivalents plus $346.5 million of availability on our revolving credit facility.

Current wording

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 March 29, 2025, we had $449 million of cash and cash equivalents plus $346.2 million of availability on our revolving credit facility.

Previous wording

In October 2021, we completed the private offering of $300 million of our 6.0 percent 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 September 28, 2024, we were in compliance with these covenants.

Current wording

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 March 29, 2025, we were in compliance with these covenants.

Previous wording

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 percent) plus a margin ranging from 1.25 percent to 1.75 percent, with the margin determined based upon average excess availability for the immediately preceding fiscal quarter for loans based on SOFR, or (ii) the Agent’s base rate (as that term is defined in the agreement for the Revolving Credit Facility) plus a margin ranging from 0.25 percent to 0.75 percent, with the margin based upon average excess availability for the immediately preceding fiscal quarter for loans based on the base rate.

Current wording

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 March 29, 2025, this variable interest rate for the Revolving Credit Facility was 5.535%.

Previous wording

As of September 28, 2024 and December 30, 2023, we had zero outstanding borrowings under our Revolving Credit Facility and available borrowing capacity was $346.5 million, 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 $872.8 million as of September 28, 2024.

Current wording

As of March 29, 2025 and December 28, 2024, we had zero outstanding borrowings under our Revolving Credit Facility and available borrowing capacity was $346.2 million, 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 $795.2 million as of March 29, 2025.

Previous wording

Our finance lease obligations consist of leases for real estate, equipment, and vehicles totaling $293.8 million and $285.4 million as of September 28, 2024 and December 30, 2023, respectively. Of the $293.8 million as of September 28, 2024, $243.1 million related to real estate and $50.8 million related to equipment. Of the $285.4 million as of December 30, 2023, $243.2 million related to real estate and $42.3 million related to equipment.

Current wording

Our finance lease obligations consist of leases for real estate, equipment, and vehicles totaling $316.8 million and $292.5 million as of March 29, 2025 and December 28, 2024, respectively. Of the $316.8 million as of March 29, 2025, $242.4 million related to real estate and $74.4 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.

Previous wording

Net cash provided by operating activities for the first nine months of fiscal 2024 was $66.4 million compared to net cash provided of $230.7 million in the first nine months of fiscal 2023. The decrease in cash provided by operating activities during the first nine months of fiscal 2024 was primarily a result of a $18.8 million decrease in net income for the current year period and a $146.9 million net decrease in operating assets and liabilities in the current year period, primarily inventory.

Current wording

Net cash used in operating activities for the first three months of fiscal 2025 was $33.9 million compared to net cash used of $31.1 million in the first three months of fiscal 2024. The decrease in cash generated from activities during the first three months of fiscal 2025 was primarily a result of a $14.7 million decrease in net income for the current fiscal quarter, partially offset by a $14.1 million net increase in operating assets and liabilities in the current fiscal quarter.

Previous wording

Net cash used in investing activities for the first nine months of fiscal 2024 was $19.0 million compared to net cash used of $18.7 million in the first nine months of fiscal 2023. In the current period, higher spending for property and equipment was partially offset by proceeds from sales of assets. During the first nine months of fiscal 2024, we also acquired $16.7 million of property and equipment through finance leases, compared to $11.3 million for the first nine months of fiscal 2023.

Current wording

Net cash used in investing activities for the first three months of fiscal 2025 was $3.4 million compared to net cash used of $5.3 million in the first three months of fiscal 2024. In the current quarter, we received initial insurance proceeds of $2.4 million related to property and equipment that was damaged or destroyed by Hurricane Helene at our Erwin, Tennessee owned facility back in late third quarter of fiscal 2024. During the first three months of fiscal 2025, we also acquired $28.1 million of property and equipment through finance leases, compared to $8.2 million for the first three months of fiscal 2024.

Previous wording

Net cash used in financing activities totaled $42.9 million for the first nine months of fiscal 2024 compared to net cash used of $41.1 million for the first nine months of fiscal 2023. The change in net cash used in financing activities was primarily due to an increase in cash used for payments for finance lease liabilities, offset by a decrease in cash used to repurchase shares to satisfy employee tax withholdings for vestings of restricted stock units. During the first nine months of fiscal 2024, we repurchased $30.0 million of our common stock compared to $29.3 million during the first nine months of fiscal 2023.

Current wording

Net cash used in financing activities totaled $19.3 million for the first three months of fiscal 2025 compared to net cash used of $4.0 million for the first three months of fiscal 2024. The change in net cash used in financing activities was primarily due to the $15.0 million used to repurchase our common stock during the current fiscal quarter. We had no repurchases of our common stock during the first quarter of fiscal 2024.

Previous wording

During the first nine months of fiscal 2024, we repurchased 297,951 shares of our common stock under our 2023 share repurchase program at an average price of $100.63, including broker commissions but excluding federal excise tax due on the repurchases, for a total of $30.0 million. All of the share repurchase in fiscal 2024 occurred in the second and third fiscal quarters. As of September 28, 2024, there remained $61.5 million repurchase capacity under this authorization. Between September 28, 2024 and October 25, 2024, we purchased an additional 43,240 shares of our common stock for $4.6 million at an average price of $106.34 per share, including broker commissions but excluding federal excise tax due on the repurchases.

Current wording

During the first three months of fiscal 2025, we repurchased 186,048 shares of our common stock under our 2023 share repurchase program at an average price of $80.65, including broker commissions but excluding federal excise tax due on the repurchases, for a total of $15.0 million. As of March 29, 2025, there remained $31.5 million repurchase capacity under this authorization. Between March 29, 2025 and April 25, 2025, we purchased an additional 142,500 shares of our common stock for $10.3 million at an average price of $72.18 per share, including broker commissions but excluding federal excise tax due on the repurchases.

Previous wording

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 receivables 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 $432.3 million as of September 28, 2024, compared to $414.1 million as of December 30, 2023, increased on a net basis by approximately $18.2 million, as shown below:

Current wording

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 receivables 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 $462.0 million as of March 29, 2025, compared to $411.5 million as of December 28, 2024, increased on a net basis by approximately $50.5 million, as shown below:

Previous wording

Our investments in capital assets consist of cash paid for owned assets and the inception of financing lease arrangements for long-lived assets to support our distribution infrastructure. The gross value of these assets is included in property and equipment, at cost on our unaudited condensed consolidated balance sheets.

Current wording

Our investments in capital assets consist of cash paid for 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.

Previous wording

For the first nine months of fiscal 2024, we invested $19.8 million in long-lived assets primarily related to investments in our distribution facilities and to a lesser extent, upgrading our fleet. We also added $16.7 million in new finance leases during the first nine months of fiscal 2024 for new tractors and forklifts to enhance our logistics network.

Current wording

For the first three months of fiscal 2025, we invested $6.4 million in long-lived assets primarily related to investments in our fleet and digital transformation and to a lesser extent, facility enhancements. We also added $28.1 million of property and equipment under finance leases during the first three months of fiscal 2025, primarily for new tractors and forklifts to enhance our logistics network.

Previous wording

For the first nine months of fiscal 2023, we invested $18.9 million in cash investments in long-lived assets primarily related to investments in our distribution facilities and to a lesser extent, upgrading our fleet. We also added $11.3 million in new finance leases during the 2023 period for new forklifts to enhance our logistics network.

Current wording

For the first three months of fiscal 2024, we invested $5.4 million in long-lived assets primarily related to investments in our distribution facilities and upgrading our fleet. We also added $8.2 million in new finance leases during the 2024 fiscal quarter for new forklifts to enhance our logistics network.