BlueLinx Holdings Inc.

Previous 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, 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.

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, as supplemented in Part II, Item 1A, “Risk Factors,” in the Company’s Quarterly Report on Form 10-Q for the fiscal quarter ended March 29, 2025, and those risks and uncertainties discussed elsewhere in this Form 10-Q, and in future reports that we file with the SEC.

Previous 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 six fiscal months ended June 28, 2025, 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 thenine fiscal months ended September 27, 2025, we:

Previous wording

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

Current wording

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

Previous wording

•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.

Current wording

•Returned capital of $37.7 million to our shareholders by using cash to purchase 503,556 shares of our common stock at an average price of $74.94, 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: 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.

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; acquisitions and the integration and completion of such acquisitions; the ability to attract, train, and retain highly qualified associates and other key personnel while controlling related labor costs; 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 in…

Excerpt shortened here; the source contains the full paragraph.

Previous wording

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:

Current wording

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

Previous wording

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:

Current wording

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

Previous wording

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.

Current wording

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

Previous wording

•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.

Current wording

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

Previous wording

•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.

Current wording

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

Previous wording

•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.

Current wording

•Gross margin percentage for the Company decreased from 16.8% to 14.4% in the current fiscal quarter. The decrease was attributable to both specialty products and structural products.

Previous wording

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.

Current wording

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

Previous wording

•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.

Current wording

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

Previous wording

•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.

Current wording

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

Previous wording

•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.

Current wording

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

Previous wording

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.

Current wording

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

Previous wording

•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.

Current wording

•Compared to the third quarter of 2024, average commodity prices in U.S. markets during the third quarter of 2025 for lumber were up 6.5% and down 14.1% for panels.

Previous wording

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.

Current wording

Our selling, general, and administrative (“SG&A”) expenses decreased by $2.9 million, or 3.2%, compared to the third quarter of fiscal 2024. This overall decrease was due primarily to lower incentive compensation expense in the current period, partially offset by increased sales and logistics expenses driven by our strategy to grow sales in the multi-family channel, expenses associated with our digital transformation initiative, and merit salary increases in early fiscal 2025.

Previous wording

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.

Current wording

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

Previous wording

•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.

Current wording

•Interest income was $3.9 million and $7.0 million in the third quarter of fiscal 2025 and third quarter of fiscal 2024, respectively. This decrease in the current fiscal quarter was due to lower average balances for interest-bearing deposits of cash/cash equivalents and due to lower interest rates paid on those deposits in the current fiscal quarter. Additionally, interest income for the third quarter of fiscal 2024 included $0.7 million on refunds from U.S. Customs for AD/CV import duties.

Previous wording

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.

Current wording

For fiscal 2025, we currently estimate our annual effective income tax rate will be approximately 29%. Our effective income tax rates were (21.4)% and 26.0% for the third quarters of fiscal 2025 and fiscal 2024, respectively. Our effective income tax rate for the third quarter of fiscal 2025 was increased by the permanent addback of certain nondeductible expenses, including meals and entertainment and executive compensation, and the anticipated return-to-provision adjustments for the 2024 federal income tax return. These increases were offset by a benefit from settlements of stock-based compensation grants, resulting in a net income tax benefit for the fiscal period. Our effective income tax rate for the third quarter of fiscal 2024 was impacted by the permanent addback of certain nondeductible expenses, including meals and entertainment and executive compensation, partially offset by a partial release of a valuation allowance for deferred income tax assets, and the vesting of restricted stock units.

Previous wording

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.

Current wording

Our net income for the third quarter of fiscal 2025 was $1.7 million, or $0.20 per diluted share, versus $16.0 million, or $1.87 per diluted share, in the third quarter of fiscal 2024. Decreases in our net income and earnings per diluted share were due primarily to the factors that were previously discussed in this Item 2. The third quarter of fiscal 2024 also included a benefit of $2.2 million related to an adjustment of the settlement charge incurred in the fourth quarter of 2023 to settle our defined benefit pension plan.

Previous wording

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.

Current wording

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

Previous wording

•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.

Current wording

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

Previous wording

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

Current wording

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

Previous wording

•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.

Current wording

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

Previous wording

•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.

Current wording

•We benefited in the first nine months of fiscal 2024 by $20.7 million (excluding interest) for changes in retroactive rates for certain AD/CV import duties, and this reduced the Company’s Cost of products sold for the 2024 fiscal period (see Note 2, Inventory, to the accompanying unaudited condensed consolidated financial statements included in Item 1 of this Quarterly Report on Form 10-Q). This $20.7 million credit to Cost of products sold was partially offset by $8.0 million (excluding interest) of estimated expenses related to import duties in prior periods arising from certain classification discrepancies for products imported into the United States as separately entered shipments (see Note 8, Commitments and Contingencies, to the accompanying unaudited condensed consolidated financial statements included in Item 1 of this Quarterly Report on Form 10-Q). These import duty items resulted in a net benefit of $12.7 million (excluding interest) to the Company’s Cost of products sold in the first nine months of fiscal 2024, and increased the Company’s gross margin percentage from 16.2% to 16.8% for the fiscal period. These duty-related items benefited the operating results for specialty products for the first nine months of fiscal 2024. The net impact of import duty-related adjustments was not material for the first nine months of fiscal 2025.

Previous wording

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.

Current wording

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

Previous wording

•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.

Current wording

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

Previous wording

•Specialty products gross profit decreased by $18.3 million, or 8.8%, to $190.1 million, due primarily to a competitive pricing environment.

Current wording

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

Previous wording

•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.

Current wording

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

Previous wording

•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.

Current wording

•The net impacts of the aforementioned adjustments related to import duty matters increased specialty products gross profit for the first nine months of fiscal 2024 by $12.7 million and increased specialty products gross margin percentage by 0.8% for the fiscal period. The net impact of import duty-related adjustments was not material for the first nine months of fiscal 2025.

Previous wording

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.

Current wording

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

Previous wording

•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.

Current wording

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

Previous wording

•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.

Current wording

•Compared to the first nine months of fiscal 2024, average commodity prices in U.S. markets during the first nine months of fiscal 2025 for lumber were up 12.4% and down 15.3% for panels.

Previous wording

•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.

Current wording

•Gross profit for structural products decreased by $5.3 million, or 8.0%, to $61.6 million from $66.9 million in the first nine months of fiscal 2024. Higher net sales in the current year fiscal period were offset by margin compression due primarily to external market factors.

Previous wording

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.

Current wording

Our SG&A expenses in the first nine months of fiscal 2025 increased by $5.7 million, or 2.1%, compared to the first nine months of fiscal 2024. This overall increase was due primarily to increased logistics expenses driven by our strategy to grow sales in the multi-family channel, expenses associated with our digital transformation, and merit salary increases in early fiscal 2025, partially offset by lower incentive compensation expense in the current period.

Previous wording

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.

Current wording

Other operating, net improved by $2.7 million compared to the first nine months of fiscal 2024. During the first quarter of fiscal 2025, we settled certain of the initial insurance claims related to property and equipment that were damaged or destroyed at our Erwin, Tennessee owned facility in late third quarter of fiscal 2024 due to Hurricane Helene. 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 nine months of fiscal 2025.

Previous wording

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.

Current wording

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

Previous wording

•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.

Current wording

•Gross interest expense was $37.2 million and $36.0 million in the first nine months of fiscal 2025 and first nine months of fiscal 2024, respectively. Gross interest expense in the first nine months of fiscal 2025 and the first nine months of fiscal 2024 included $0.6 million and $1.2 million, respectively, related to the aforementioned estimate for an accrual initially made and disclosed in the first quarter of 2024 related to amounts the Company believes it may owe for discrepancies in duties paid in prior years for certain imported goods (see Note 8, Commitments and Contingencies, to the unaudited condensed consolidated financial statements included in Item 1 of this Quarterly Report on Form 10-Q). Excluding these amounts, gross interest expense in the first nine months of fiscal 2025 and the first nine months of fiscal 2024 would have been $36.6 million and $34.7 million, respectively, an increase in the current fiscal period of $1.8 million compared to the prior year fiscal period. This $1.8 million increase in the current fiscal period was due to additional net finance leases added subsequent to the third quarter of fiscal 2024.