BLDR 10-K & 10-Q changes, risk factors and insider trading

The building products supply industry is highly fragmented and competitive. We face, and will continue to face, significant competition from local, regional and other national building materials chains, large retailers that provide products to retail consumers and small builders, as well as from privately-owned single site enterprises and new entrants into the market, due to the low barrier to, and cost of, entry. Any of these competitors may (1i) foresee the course of market development more accurately than we do, (2ii) develop products that are superior to our products, (3iii) have the ability to produce or supply similar products at a lower cost, (4iv) develop stronger relationships with local homebuilders or commercial builders orbuilders, (5v) adapt more quickly to new technologies or evolving customer requirementspreferences or requirements, or (vi) more effectively adopt and utilize new or emerging technologies, including data analytics, automation and artificial intelligence than we do. As a result, we may not be able to compete successfully with them. In addition, home center retailers, which have historically concentrated their sales efforts on retail consumers and small contractors, have expanded their efforts into the professional homebuildershomebuilder market in recent years, including through the use of enhanced e-commerce offerings and acquisitions, and may continue to intensify these efforts in the future. Furthermore, certain product manufacturers sell and distribute their products directly to production homebuilders or commercial builders, and the volume of such direct sales could increase in the future. Additionally, manufacturers of products distributed by us may elect to sell and distribute directly to homebuilders or commercial builders in the future or enter into exclusive supplier arrangements with other distributors. Consolidation of production homebuilders or commercial builders may result in increased competition for their business. Finally, we may not be able to maintain our operating costs or product prices at a level sufficiently low for us to compete effectively. If we are unable to compete effectively, our financial condition, operating results and cash flows may be adversely affected.

Home affordability can be a key driver in demand for our productsproducts, and home prices have increased meaningfully over the past several years. Home affordability is influenced by a number of economic factors, such as the level of employment, consumer confidence, consumer income, supply of houses, the availability of financing and interest rates. Changes in the inventory of available homes as well as economic factors relative to home prices may result in homes becoming less affordable. Furthermore, consumer preferences could shift to smaller homes in the future. This could cause homebuyer demand to soften or shift substantially which could have an adverse impact on our financial condition, operating results and cash flows if we are unable to respond to the new market demands effectively.

We have historically experienced, and in the future will continue to experience, variability in revenues, earnings and cash flows on a quarterly basis. The factors expected to contribute to this variability include, among others: (1i) the volatility of prices of lumber, wood products and other building products, (2ii) the cyclical nature of the homebuilding industry, (3iii) general economic conditions in the markets that we serve, (4iv) the intense competition in the industry, including expansion and growth strategies by competitors, (5v) the production schedules of our customers and suppliers, (6vi) the effects of the weather and (7vii) labor costs, labor shortages and available capacity to meet customer demand for our products. These factors, among others, make it difficult to project our operating results and cash flows on a consistent basis, which may affect the price of our stock.

Our long-term business plan also provides for continued growth through strategic acquisitions and organic growth through the construction of new facilities or the expansion of existing facilities. Failure to identify and acquire suitable acquisition candidates on appropriate terms could have a material adverse effect on our growth strategy. Moreover, our liquidity position, or the requirements of our debt instruments could prevent us from obtaining the capital required to effect new acquisitions or expand our existing facilities. Our failure to make successful acquisitions or to build or expand needed facilities, including manufacturing facilities, produce saleable product, or meet customer demand in a timely manner could adversely affect our financial condition, operating results, and cash flows. A negative impact on our financial condition, operating results and cash flows, or our decision to invest in strategic acquisitions or new facilities, could adversely affect our ability to maintain a balanced debt level.

Strategic acquisitions are an important part of our growth strategystrategy, and we seek to identify attractive acquisition opportunities that we believe will be accretive and result in increased sales and earnings before interest, taxes, depreciation and amortization (“EBITDA”), cost savings, synergies and various other benefits. Assessing the viability and realizing the benefits of these transactions is subject to significant uncertainty. While we seek to mitigate risks and liabilities of these transactions through due diligence to identify valuation issues and potential loss contingencies and to negotiate transaction terms, there may be risks and liabilities that our due diligence efforts do not discover, that are not accurately or completely disclosed to us or that we inadequately assess. Additionally, the evaluation and consummation of strategic transactions is a time-consuming and costly process that can divert resources away from our operations and result in the incurrence of meaningful transaction expenses. Furthermore, multiples for acquisition targets have generally increased over the past few yearsyears, and we face increased competition from other acquirors for attractive acquisition opportunities. As a result, we may not be able to consummate acquisitions on favorable terms, if at all. We may also not be able to obtain necessary approvals, including regulatory or shareholder approvals, to consummate acquisitions. An inability to continue to identify and consummate attractive acquisitions could adversely affect our growth.

In addition, production homebuilders, multi-family builders and other customers may: (1i) seek to purchase some of the products that we currently sell directly from manufacturers, (2ii) elect to establish their own building products manufacturing and distribution facilities or (3iii) give advantages to manufacturing or distribution intermediaries in which they have an economic stake. Continued consolidation among production homebuilders could also result in a loss of some of our present customers to our competitors. The loss of one or more of our significant customers or deterioration in our relations with any of them could significantly affect our financial condition, operating results and cash flows. Furthermore, our customers are not required to purchase any minimum quantity of product from us. The contracts into which we have entered with most of our professional customers typically provide that we supply particular products or services for a certain period of time when and if ordered by the customer. Should our customers purchase our products in significantly lower quantities than they have in the past, such decreased purchases could have a material adverse effect on our financial condition, operating results and cash flows.

Our success depends in part on our ability to attract, hire, train and retain qualified managerial, operational, sales and other personnel. We face significant competition for these types of employees in our industry and from other industries. We may be unsuccessful in attracting and retaining the personnel we require to conduct and expand our operations successfully. In addition, key personnel may leave us and compete against us. Our success also depends to a significant extent on the continued service of our senior management team.team and key operations personnel. We may be unsuccessful in replacing key managers or operations personnel who either resign or retire. The loss of any member of our senior management team or other experienced senior employees could impair our ability to execute our business plan, result in operational disruptions, cause us to lose customers and reduce our net sales, or lead to employee morale problems and/or the loss of other key employees. In any such event, our financial condition, operating results and cash flows could be adversely affected.

In addition, continued competition for non-management employees has resulted in higher labor costs and labor shortages at our facilities. Consequently, we may continue to face higher operating expenses and may lose revenue opportunities if we lack capacity to meet customer demands due to labor shortagesshortages. While only a small percentage of our workforce is unionized, there can be no assurance that additional employees will not conduct union organization campaigns or become union members in the futurefuture, and a failure to renew existing collective bargaining agreements on favorable terms could lead to further labor shortages and higher labor costs.

Our operations are dependent upon our information technology systems, which encompass all of our major business functions. Our primary ERP systems are proprietary systems that have been highly customized by our computer programmers. Our centralized financial reporting system currently draws data from our ERP systems. We are also currently implementing a new ERP system and there is no guarantee that such implementation will be successful or that we will not experience disruptions in connection with the new ERP system. Many of our legacy ERP systems are proprietary systems that have been highly customized by our computer programmers. Our centralized financial reporting system currently draws data from our ERP systems. We rely upon our information technology systems to run critical accounting and financial information systems, process receivables, manage and replenish inventory, fill and ship customer orders on a timely basis, and coordinate our sales activities across all products and services. A substantial disruption in our information technology systems for any prolonged time period could result in problems and delays in generating critical financial and operational information, processing receivables, receiving inventory and supplies and filling customer orders. These disruptions could adversely affect our operating results as well as our customer service and relationships. Our systems, or those of our significant customers or suppliers, might be damaged or interrupted by natural or man-made events or by computer viruses, physical or electronic break-ins, or similar disruptions affecting the global Internet.

Our business employs systems that allow for the secure storage and transmission of customers’, vendors’ and employees’ proprietary information. Security breaches could expose us to a risk of loss or misuse of this information, litigation and potential liability. We may not have the resources or technical sophistication to anticipate or prevent rapidly evolving types of cyber-attacks. Any compromise of our security could result in a violation of applicable privacy and other laws, significant legal and financial exposure, damage to our reputation and a loss of confidence in our security measures, which could harm our business. The regulatory environment related to information security and privacy is increasingly rigorous, with new and constantly changing requirements applicable to our business, and compliance with those requirements could result in additional costs. Our computer systems have been, and will likely continue to be, subjected to computer viruses or other malicious codes, unauthorized access attempts and cyber- or phishing-attacks. Additionally, we may be impacted by intrusions or failures of critical infrastructure such as the power grid or communications systems. These events could compromise ours’our and our customers’ and suppliers’ confidential information, impede or interrupt our business operations, and could result in other negative consequences, including remediation costs, loss of revenue, litigation and reputational damage. While we have not experienced any material losses relating to cyber-attacks or other information security breaches to date, we have been the subject of attempted hacking and cyber-attackscyber-attacks, and there can be no assurance that we will not suffer such significant losses in the future. As cyber-attacks become more sophisticated, we expect to incur increasing costs to strengthen our systems from outside intrusions. While we have implemented administrative and technical controls and have taken other preventive actions, such as deploying company-wide cybersecurity training and conducting threat simulations to reduce the risk of cyber incidents and protect our information technology, they may be insufficient to prevent physical and electronic break-ins, cyber-attacks or other security breaches to our computer systems.

We rely on our network infrastructure, ERP systems, data hosting, public cloud and software-as-a-service providers, and internal technology systems for many of our development, marketing, operational, support, sales, accounting and financial reporting activities. We are continually investing resources to update and improve these systems and environments in order to meet existing needs, as well as the growing and changing requirements of our business and customers. For example, during 2025, we are inbegan the processimplementation of implementing a new ERP system. The new ERP system is intended to transform certain areas of business such as manufacturing, supply chain, procurement, warehouse management, delivery, quote to cash, financial reporting, and analytics, and position us to better leverage automation and process efficiency and enable productivity enhancements. An implementation of this scale is a major financial undertaking and has required, and will continue to require, substantial time and attention of management and key employees. Furthermore, we may not realize the anticipated benefits from the implementation of the new ERP system. We anticipate that the full integration of the new ERP system towill take many years. If we experience prolonged delays or unforeseen difficulties in updating and upgrading our systems and architecture, including our new ERP system, we may experience outages and may not be able to deliver certain offerings or develop new offerings and enhancements that we need to remain competitive. Improvements, upgrades and, to a greater extent, system conversions, are often complex, costly and time consuming. In addition, such improvements canmay be challenging to integrate with our existing technology systems or may uncover problems with our existing technology systems. Unsuccessful implementation of hardware or software updates and improvements could result in outages, disruption in our business operations, loss of revenue or damage to our reputation. Additionally, the effectiveness of our internal control over financial reporting could be adversely affected if the new ERP system is not successfully implemented. Any of these items, along with any failure to effectively manage data governance risks prior to or during ERP implementation, could adversely affect our results of operations, cash flows and financial condition, and the trading price of our common stock.

As of December 31, 2024,2025, our debt totaled $3.7$4.5 billion, which includes $0.2 billion of finance lease and other finance obligations. We have a $1.8$2.2 billion revolving credit facility with a maturity date of JanuaryMay 17,20, 20282030 (“Revolving Facility”), under which we had no outstanding borrowings and $0.1 billion of letters of credit outstanding as of December 31, 2024.2025. In addition, we also have $0.6$0.7 billion in obligations under operating leases.

If conditions in the housing industry continue to deteriorate, we may needbe required to take goodwill and/or asset impairment charges relating tofor certain of our reporting units. Any such non-cash charges would have an adverse effect on our financial results. In addition, in response to industry conditions, we may have to temporarily idle or permanently close certain facilities in under-performing markets. Widespread facility closures could have a significant adverse effect on our financial condition, operating results and cash flows.

Throughout 2024,2025, we generated significant excess cash flows. Our business plan calls for us to execute a variety of strategies to deploy excess capital including, but not limited to, continued organic balance sheet growth and the consideration of potential acquisition opportunities to further deploy our excess capital when we expect such opportunities to significantly enhance long-term stockholder value. We have also repurchased approximately $7.6$8.0 billion of our shares since January 2021 through the date of this filing and intend to continue repurchasing shares from time to time, subject to market conditions, liquidity, and other considerations, pursuant to the share repurchase authorization approved by our board of directors in AugustApril 2024.2025. Our inability to effectively and timely deploy our excess capital through these strategies may constrain growth in earnings and return on equity and thereby diminish potential growth in stockholder value.

We are involved in product liability, product warranty, casualty, construction defect, asbestos, vehicle, workplace safety and injury and other claims relating to the products we manufacture and distribute, services we provide or have provided and our operations that, if adversely determined, could adversely affect our financial condition, operating results, and cash flows. We rely on manufacturers and other suppliers to provide us with many of the products we sell and distribute. Because we have no direct control over the quality of such products manufactured or supplied by such third-party suppliers, we are exposed to risks relating to the quality of such products. The Company has a number of known and threatened construction defect legal claims. We are also involved in several asbestos personal injury suits due to the alleged sale of asbestos-containing products by legacy businesses that we acquired. In addition, we are exposed to potential claims arising from the conduct of our respective employees and subcontractors, and builders and their subcontractors, for which we may be contractually liable. Although we currently maintain what we believe to be suitable and adequate insurance in excess of our self-insured amounts, there can be no assurance that we will be able to maintain such insurance on acceptable terms or that such insurance will provide adequate protection against potential liabilities. We are also subject to workplace safety and injury claims from our employees and contractors. Product liability, product warranty, casualty, construction defect, asbestos, vehicle, workplace safety and injury and other claims can be expensive to defend and can divert the attention of management and other personnel for significant periods, regardless of the ultimate outcome. Claims of this nature could also have a negative impact on customer confidence in our products and our company. In addition, we are involved on an ongoing basis in other types of legal proceedings, such as workers’ compensation proceedings. It is not possible to predict the outcome of pending legal proceedings, and it is possible that these actions could be decided unfavorably towards the Company. We cannot assure you that any current or future claims against us will not adversely affect our financial condition, operating results and cash flows.

Federal,Our operations are subject to complex and evolving federal, state, and local laws and otherregulations, regulationsthe violation of which could expose us to potential liabilities and impose substantial costs and/or restrictions on our operations that wouldcould reduce our net income.

We are subject to various federal, state,state and local laws, regulations and otherexecutive regulations,orders, including,many of which are complex, frequently changing, and subject to varying interpretations. These laws, regulations and executive orders include, among other things, regulations promulgated by the Department of Transportation and applicable to our fleet of delivery trucks, work safety regulations promulgated by the Department of Labor’s Occupational Safety and Health Administration, employment regulations, including immigration and work-authorization laws and regulations promulgated by the United States Equal Employment Opportunity Commission, tariff regulations on imported products promulgated by the Federal government, laws and regulations related to cybersecurity, data privacy, encryption, artificial intelligence, telecommunications, accounting standards issued by the Financial Accounting Standards Board (“FASB”) or similar entities, state and local regulations relating to our escrow business, and state and local zoning restrictions and building codes. InChanges addition,to existing laws, regulations, executive orders, and enforcement priorities, changes to globalhow tradethey policiesare may adversely impact our business. Significant changes in theseinterpreted, or otherthe areasimplementation mayof increasenew, ourmore generalstringent laws, regulations, and administrativeexecutive costsorders, andcould adversely affect our financialbusiness condition,by operatingincreasing resultscompliance costs, limiting our ability to offer a product or service, requiring changes to our business practices, or otherwise making our products and cashservices flows.less Moreover,attractive failureto customers. Failure to comply with thethese regulatorylaws, requirementsregulations, applicableand toexecutive our businessorders could expose us to substantialfines and penalties that could adversely affect our financial condition, operating results and cash flows and damage our reputation.

We are primarily subject to income and other taxes in the U.S., and on a very limited basis in certain foreign jurisdictions. We are subject to ongoing tax audits in various jurisdictions. We regularly assess the likely outcome of these audits in order to determine the appropriateness of our tax provision. However, there can be no assurance that we will accurately predict the outcome of these audits, and the amounts ultimately paid upon resolution of audits could be materially different from the amounts previously included in our income tax expense and therefore could have a material impact on our tax provision, net income and cash flows. In addition, our effective tax rate in the future could be adversely affected by changes to our operating structure, changes in the valuation of deferred tax assets and liabilities, changes in tax laws, such as the H.R.1 - One Big Beautiful Bill Act enacted into law in 2025, and the discovery of new information in the course of our tax return preparation. Any future changes in federal and state tax laws and regulations could have an adverse direct impact on our corporate taxestaxes. and/orSuch changes may also have an adverse indirect impact such as making purchasing a home less attractive, which could reduce demand for homes. Adverse impacts from any future changes in federal and state laws and regulations on our business could include an adverse impact on our financial condition, operating results and cash flows.

A measure of our success is dependent on maintaining our safety record, and an injury to, or death of, any of our employees, customers, or members of the general public related to our business activities could result in material liabilities and reputational injury.damage.

In addition, our brand’s reputation is an important asset to our business; as a result, anything that damages our brand’s reputation could materially harm our business, results of operations, and financial condition. For example, negative media reports, whether or not accurate, can materially and adversely affect orour reputation. Moreover, social media has dramatically increased the rate at which negative publicity can be disseminated before there is any meaningful opportunity to respond to or address an issue to protect our reputation.

We are operating in an uncertain economic environment. The global credit and financial markets have experienced extreme volatility and disruptions, including severely diminished liquidity and credit availability, declines in consumer confidence, declines in economic growth, increases in unemployment rates, high rates of inflation, and uncertainty about economic stability and the risk of a potential recession. While our management team continually monitors market conditions and economic factors throughout our footprint, we are unable to predict the duration or severity of such conditions or factors. If conditions were to worsen nationally, regionally or locally, then we could see a decrease in housing starts, which would adversely affect our business, financial condition, operating results, and cash flows.

In addition, the financial markets and the global economy may also be adversely affected by ongoing geopolitical conflicts, including those in UkraineUkraine, andVenezuela, the Middle East.East, and other regions. These conflicts have impacted, and may continue to impact, commodity and energy prices, global supply chains and financial markets. In addition, sanctions imposed by the U.S. and other countries in response to these conflicts, as well as any economic countermeasures by the conflictaffected incountries Ukraineor others could further adversely impact the financial markets and the global economy, and any economic countermeasures by the affected countries or others could exacerbate market and economic instability.economy. The specific consequences of these geopolitical conflicts on our business are difficult to predict at this time, but in addition to inflationary pressures affecting our operations, any shortages of fuel or significant fuel cost increases could seriously disrupt our ability to distribute products to our customers.

We currently maintain a broad network of distribution and manufacturing facilities throughout the U.S. Any widespread disruption to our operations resulting from fire, earthquake, weather-related events (such as tornadoes, hurricanes, flooding and other storms), other natural disasters, an act of terrorism, intrusions or failures of critical infrastructure such as the power grid or communications systems or any other cause could damage multiple facilities and a significant portion of our inventory and could materially impair our ability to distribute our products to customers. Moreover, we could incur significantly higher costs and longer lead times associated with distributing our products to our customers during the time that it retakestakes for us to reopen or replace a damaged facility. If any of these events were to occur, our financial condition, operating results and cash flows could be materially adversely affected.

Additionally,Some investors and shareholder advocates are placing an increasing emphasis on how corporations address corporate responsibility and sustainability issues in their business strategy when making investment decisions and when developing their investment theses and proxy recommendations. Additionally, some investors and shareholder advocates may disagree with our goals and initiatives, and the focus of such stakeholders may change and evolve over time. Stakeholders also may have different views on where we should focus our corporate responsibility and sustainability efforts. We may incur meaningful costs with respect to our corporate responsibility and sustainability effortsefforts, and if such efforts are negatively perceived, our reputation and stock price may suffer.

We are a leading supplier and manufacturerprovider of building materials,materials manufacturedfor componentsprofessional builders in new residential construction and construction services to professional contractors, sub-contractorsrepair and consumers.remodeling. We deliver integrated homebuilding solutions by manufacturing, supplying, and installing a full range of structural and related building products. The Company operates approximately 590585 locations in 43 states across the U.S. Given the span and depth of our geographical reach, our locations are organized into three geographical divisions (East, Central, and West), which are also our operating segments. All of our segments have similar customers, products and services, and distribution methods. Due to the similar economic characteristics, categories of products, distribution methods and customers, our operating segments are aggregated into one reportable segment.

WeOur offerleading an integrated solution to our customers by providing manufacturing, supply, and installationnetwork of astrategically fulllocated rangemanufacturing offacilities structural and related building products. Our manufactured products include ourproduces factory-built roof and floor trusses, wall panels, vinyl windows, custom millwork and trim, as well as engineered wood that we design, cut,design and assemblecut specifically for each home. We also assemble interior and exterior doors into pre-hung units.units for easy installation. Additionally, we supply our customers withdistribute a broadwide offeringrange of professional grade building productsproducts, notincluding manufactured by us, such as dimensional lumber and lumberlumber, sheet goods, variouswindows, window,doors, doormillwork, and millworkspecialty lines along with other various building products.items. Our fullservices, rangewhich ofvary construction-relatedby servicesmarket, includesinclude professional installation, turn-keyturnkey framingframing, and shell construction,construction. Supported by the latest construction innovations and spans all of our product categories. We also offer digital solutionssolutions, throughwe ourhelp Paradigmdrive subsidiary,greater includingefficiency drafting,across estimating, quoting, and virtual home design services.homebuilding.

Manufactured Products. Manufactured products consist of wood floor and roof trusses, wall panels, engineered wood andwood, our Ready-Frame® framing system.system, and manufactured and modular homes.

Homebuilding Industry and Market Competition. Our business is driven primarily by the residential new construction market and the residential repair and remodel market, which are in turn dependent upon a number of factors, including demographic trends, interest rates, consumer confidence, employment rates, housing affordability, household formation, land development costs, the availability of skilled construction labor, rising inflationary pressures, mortgage markets and the health of the economy. Many factors have impacted and may continue to impact our sales and gross margins, including continued consolidation within the building products supply industry, increased competition for homebuilder business, supply chain constraints and cyclical fluctuations in commodity prices. Moreover, our industry remains highly fragmented and competitive, and we will continue to face significant competition from local and regional suppliers. As various current market dynamics, including inflationary pressures, mortgage rates and housing affordability shift, a composite of industry forecasters, including the National Association of Home BuildersBuilders, John Burns Research and Consulting, and Zonda Homes (collectively, the “NAHBIndustry Forecast Composite”), expect to see housing demand increasedecrease in the near-term. Despite recent tempered market conditions, we believe the housing industry remains underbuilt and that there are several meaningful trends that indicate U.S. housing demand will continue to be strong over the long-term, including the aging of housing stock and normal population growth due to immigration and birthrate exceeding death rate.

Multi-family and Light Commercial Business. Our primary focus has been on single-family residential new construction and the repair and remodel end market. However, through recent acquisitions completed over the past five years, we have expanded our operational footprint in the multi-family market, predominantly five-story and smaller, wood construction, and the light commercial market, growing our value-added components and millwork product offerings in this end market. We will continue to identify opportunities for profitable growth in these areas.

Use of Prefabricated Components. Homebuilders are increasingly using prefabricated components in order to realize increased efficiency, overcome skilled construction labor shortages and improve quality. Shortening construction cycle times from start to completion is a keycritical imperativepriority of thefor homebuilders during periods of strong consumer demand. As the availability of skilled construction labor remains limited, we continue to see the demand for prefabricated components increasing within the residential new construction market.

During 20242025, we completed a number of acquisitions for a combined $345.4$1.1 millionbillion purchase price, net of cash acquired, including the acquisitions of (i) QualityAlpine DoorLumber & Millwork, Inc.Company (“QualityAlpine DoorLumber”), (ii) HansonO.C. TrussCluss Components,Lumber Inc.Company (“HansonO.C. TrussCluss”), (iii) RPMTruckee WoodTahoe Products, Inc.Lumber (“RPMTruckee Tahoe”), (iv) SchoenemanSt. Bros.George CompanyTruss Co. (“SchoenemanSt. George Truss”), (v) TRSMI,Stately Las Vegas Holdings, LLC (“TRSMIStately Las Vegas”), (vi) WesternRystin TrussConstruction, & ComponentsInc (“Western TrussRystin”), (vii) CRiLengefeld SoCalLumber Co., LP (“CRi”), (viii) Wyoming Millwork Co. (“Wyoming Millwork”), (ix) Sunrise Wood Designs, LLC (“Sunrise Wood Designs”), (x) Reno Truss, Inc. (“Reno Truss”), (xi) High Mountain Door and Trim, Inc. (“High Mountain”), (xii) Douglas Lumber, Kitchens and Home Center (“DouglasLengefeld Lumber”), and (xiiiviii) KleetPleasant LumberValley Homes, Inc (“KleetPleasant LumberValley”).

On AugustApril 5,30, 2024,2025, the Company’s board of directors authorized a new repurchase plan of up to $1.0$500.0 billionmillion of the Company’s outstanding shares of common stock. The new repurchase plan replaced the Company’s prior $1.0 billion share repurchase authorization announced in August 2024, which had approximately $100.0 million remaining under its authorization.

Under share repurchase programs authorized by the board of directors since August 2021, the Company has repurchased a total of 95.999.3 million shares of common stock, or 46.5%48.1% of the Company’s total shares outstanding, at an average price of $79.56,$80.90, inclusive of fees and taxes, including 8.93.4 million shares of common stock at an average price of $170.74,$118.65, inclusive of fees and taxes, in 2024.2025. As of December 31,2024,31, 2025, the Company had $500.0 million authorization remaining under its current share repurchase program.

On FebruaryMay 29,8, 2024,2025, the Company completed a private offering of $1.0$750.0 billionmillion in aggregate principal amount of 6.375%6.750% senior unsecured notes due 20342035 (“6.375%6.75% 20342035 notes”), at an issue price equal to 100% of par value. The net proceeds from the offering were used to pay related transaction fees and expenses, repay indebtedness outstanding under the Revolving Facility and for general corporate purposes.Facility.

ThisThese transactiontransactions isare described further in Note 8 to the consolidated financial statements included in Item 8 of this annual report on Form 10-K. From time to time, based on market conditions and other factors and subject to compliance with applicable laws and regulations, the Company may repurchase or call our notes, repay debt, repurchase shares of our common stock or otherwise enter into transactions regardingwith respect to its capital structure.

AccordingFull toyear 2025 housing starts have not been published by the U.S. Census Bureau,Bureau actualas of the date of this annual report on Form 10-K. The Industry Forecast Composite is forecasting 1.3 million U.S. total housing starts forand the925 year ended December 31, 2024, were 1.4 million, a decrease of 3.9% compared to the year ended December 31, 2023. Actualthousand U.S. single-family housing starts for the year ended December 31, 2024,2025, werewhich 1.0are million, an increasedecreases of 6.5%3.7% and 8.7%, respectively, compared to the year ended December 31, 2023.2024. A composite of third-party sources, includingFor the NAHB,year areended December 31, 2026, the Industry Forecast Composite is forecasting 1.4 million U.S. total housing starts and 1.0 million U.S. single-family housing starts forto 2025, which areremain relatively flat fromcompared 2024.to 2025. In addition, in its September 20242025 semi-annual forecast, the HIRIHome Improvement Research Institute forecasted sales in the professional repair and remodel end market to increase 3.2%2.9% in 20252026 compared to 2024.2025.

We believe the housing industry’s long-term outlook for the housing industry is positive and that the housing industryit remains underbuilt due to growth in the underlying demographics compared to historical new construction levels. However, uncertaintymacroeconomic arounduncertainty, including fluctuations in interest ratesrates, stock market volatility, impact of changes in tariffs and inflationinflation, may continue to pressure near-term housing industry demand as homes are less affordable for consumers, investors and builders. We believe we are well-positioned to takegrow advantageand ofcapture market share as industry conditions improve in the constructionlong activity in our markets and to increase our market share, which may include strategic acquisitions.term. We will continue to focus on working capital by closely monitoring the credit exposure of our customers, remaining focused on maintaining the right level of inventory and by working with our vendors to improve payment terms. We strive to achieve the appropriate balance of short-term expense control while maintaining the expertise and capacity to grow the business as market conditions expand.business.

Net Sales. Net sales for the year ended December 31, 2024,2025, were $16.4$15.2 billion, a 4.1%7.4% decrease from net sales of $17.1$16.4 billion for 2023.2024. NetCore organic sales decreased primarily as a result of a core organicnet sales decreaseby of10.3%, 5.1%primarily due to a continuedbelow-normal normalizationstarts in the multi-family customer segment and declines in the single-family customer segment as home size and complexity decrease,environment, while commodity price deflation and one fewer selling day decreased net sales by another 1.8%.1.3% and 0.4%, respectively. These decreases were partially offset by increasesan increase in net sales from acquisitions and increased selling days of 2.1% and 0.7%, respectively.4.6%.

We experienced decreased net sales in our manufactured products categoriescategory primarily due to adecreased continuedsingle-family normalizationhousing starts and decreased multi-family activity, partially offset by an increase in multi-familynet andsales commodityfrom deflation.acquisitions. Our windows, doors, and millwork net sales declined primarily due to decreased single-family housing starts. Our lumber and lumber sheet goods category decreased primarily due to lower single-family housing starts and commodity price normalization.deflation, partially offset by an increase in net sales from acquisitions. For the comparable period, specialty building products and services andincreased lumberprimarily anddue lumberto sheetan goodsincrease in net sales remainedfrom relatively consistent.acquisitions.

Gross Margin. Gross margin decreased $0.6$0.8 billion to $5.4$4.6 billion due to decreased net sales. Our gross margin percentage decreased to 30.4% in 2025 from 32.8% in 2024 from 35.2% in 2023,2024, a 2.4% decrease. This decrease was attributableprimarily todriven single-familyby anda multi-familybelow-normal marginstarts normalization.environment.

Selling, General and Administrative Expenses. Selling, general and administrative expenses decreasedincreased $48.2$41.7 million, or 1.3%.1.1%. This decreaseincrease in expensesexpense was primarily due to decreased variable compensation costs related to decreased sales and profitability, and reduced intangible amortization expense, partially offset by additional operating expenses from locations acquired within the last twelve months and our ongoing ERP system implementation, partially offset by lower variable compensation due to decreased net sales and the absence of prior year asset write-offs.

As a percentage of net sales, selling, general and administrative expenses increased to 23.1%25.2% from 22.4%23.1% in 2023.2024. This increase was primarily dueattributable to decreasedreduced costoperating leverage on lower net sales during the period.

Interest Expense, Net. Interest expense, net was $207.7$273.9 million in 2024,2025, an increase of $15.6$66.2 million from 2023.2024. Interest expense increased primarily due to higher average debt balances and average interest rates in 2024 compared to 2023, partially offset by interest income received in 2024.balances.

Income Tax Expense. We recorded income tax expense of $77.2 million during the year ended December 31, 2025, compared to income tax expense of $309.6 million during the year ended December 31, 2024, compared to income tax expense of $443.6 million during the year ended December 31, 2023, a decrease of $134.0$232.4 million, driven by a decrease in income before income taxes in the current period. Our effective tax rate was 22.3%15.1% in 20242025, whicha was relatively flatdecrease compared to the 22.4%22.3% in 2023.2024, primarily related to the benefit of income tax credits, impact of state income taxes and discrete tax adjustments, partially offset by permanent differences, relative to a decreased income before income taxes.

Our Revolving Facility will beis primarily used for working capital, general corporate purposes,purposes and funding capital expenditures and growth opportunities. In addition, we may use borrowings under the Revolving Facility to assistfacilitate debt consolidation.repayment and consolidation, and to fund share repurchases. Availability under the Revolving Facility is determined by a borrowing base. Our borrowing base consists of trade accounts receivable, inventory, other receivables which include progress billings and credit card receivables, and qualified cash that all meet specific criteria contained within the credit agreement, minus agent specified reserves. Net excess borrowing availability is equal to the maximum borrowing amount minus outstanding borrowings and letters of credit.

As of December 31, 2024,2025, we had no outstanding borrowings under our Revolving FacilityFacility, and our net excess borrowing availability was $1.6$1.5 billion after being reduced by outstanding letters of credit of $0.1 billion. Excess availability must equal or exceed a minimum specified amount, currently $171.4$165.0 million, or we are required to meet a fixed charge coverage ratio of 1.00 to 1.00. We were not in violation of any covenants or restrictions imposed by any of our debt agreements at December 31, 2024.2025.

For the year ended December 31, 2024,2025, the Companycash used $42.4in millioninvesting moreactivities cashincreased to$0.8 investbillion compared to the prior year ended December 31, 2023,2024, primarily due to $97.8using millionan moreadditional spent$0.8 onbillion acquisitions,of offsetcash byfor $63.0 million less as a net investment in property, plant and equipment.acquisitions.

Cash provided by financing activities was $0.3 billion in 2025 which consisted primarily of a net $0.7 billion received for the issuance of the 6.75% 2035 notes, offset by $0.4 billion for repurchases of common stock. Cash used in financing activities was $1.1 billion infor 2024 which consisted primarily of $1.5 billion for repurchases of common stock and $0.5 billion net payments on the Revolving Facility, offset by a net $1.0 billion received for the issuance of the 6.375% senior unsecured notes due 2034 notes.(“6.375% Cash2034 used in financing activities was $1.7 billion for 2023 which consisted primarily of $1.8 billion in repurchases of common stock, partially offset by $0.2 billion in net borrowings on the Revolving Facility.notes”).

We test goodwill for impairment in the fourth quarter of each year or at any other time when impairment indicators exist. Examples of such indicators that could cause us to test goodwill for impairment between annual tests,tests include a significant change in the business climate, unexpected competitioncompetition, or a significant deterioration in market share. We may also consider market capitalization relative to our net assets. Housing starts are a significant sales driver for us. If there is a significant decline or an expected decline in housing starts, this could adversely affect our expectations for a reporting unit and the value of that reporting unit.

Significant information and assumptions utilized in estimating future cash flows for quantitative goodwill impairment analyses include projections of revenue growth utilizing publicly available industry informationinformation, such as lumber commodity prices and housing start forecasts developed by industry forecasters, including the NAHB.Industry Forecast Composite. Expected future profitability reflects current headcount levels and cost structure and are flexed in future years based upon historical trends at various revenue levels. Long-term growth was based on terminal value EBITDA multiples to reflect the relevant expected acquisition prices. The discount rate used is intended to reflect the weighted average cost of capital for a potential market participant and includes all risks of ownership and the associated risks of realizing the stream of projected future cash flows. Decreasing the long-term growth EBITDA multiple or increasing the discount rate would not have changed the results of our impairment testing.

In addition to the other information set forth in this report, you should carefully consider the factors discussed in Part 1,I, “Item 1A. Risk Factors” in our 2025 Form 10-K, which could materially affect our business, financial condition or future results. The risks described in our 2025 Form 10-K are not the only risks facing our Company. Additional risks and uncertainties not currently known to us or that we currently deem to be immaterial also may materially adversely affect our business, financial condition and/or operating results.

There were no material changes to the risk factors reported in Part 1,I, “Item 1A. Risk Factors” in our 2025 Form 10-K.

We are a leading provider of building materials for professional builders in new residential construction and repair and remodeling. We deliver integrated homebuilding solutions by manufacturing, supplying, and installing a full range of structural and related building products. The Company operates approximately 570565 locations in 43 states across the United States, which are internally organized into two geographic operating divisions.divisions (East and West), which represent the Company’s operating segments. Due to the similar economic characteristics, categories of products, distribution methods and customers, our two operating divisionssegments are aggregated into one reportable segment.

OnThrough JanuaryJune 2,30, 2026, we completed the acquisitionacquisitions of PBC and Precision Design for an aggregate purchase price of approximately $13.0$31.0 million, net of cash acquired.million. Among other opportunities, thisthese acquisitionacquisitions further expandsexpand our market footprint and providesprovide additional operations in our value-added product categories. ThisThese transactiontransactions isare described in further detail in Note 2 to the condensed consolidated financial statements included in Part I, Item 1 of this quarterly report on Form 10-Q.

During the threesix months ended MarchJune 31,30, 2026, the Company repurchased 3.3 million shares at a weighted average price of $92.25 per share, for a total cost of $302.9 million, inclusive of applicable fees and taxes. On April 29, 2026, the Company’s Boardboard of Directorsdirectors authorized the repurchase of up to $500.0 million of the Company’s outstanding shares of common stock, inclusive of the approximately $200.0 million remaining under the Company’s prior April 2025 $500.0 million April 30, 2025, share repurchase authorization.

WeNotwithstanding these headwinds, we believe the housing industry’s long-term outlook is positive and that it remains underbuilt due to growth in the underlying demographics relative to historical new construction levels. However, consumer confidence and macroeconomic uncertainty, including domestic and global conditions, fluctuations in interest rates, stock market volatility, and the impact of changes in tariffs and inflation, hashave adversely impacted, and may continue to adversely impact near-term housing industry demand as homes are less affordable for consumers, investorsinvestors, and builders. Despite these challenges, we believe we are well-positioned to grow and capture market share as industry conditions improve in the long term. Our focus remains on managing the business through this cycle by maintaining disciplined working capital practices, including closely monitoring the credit exposure of our customers, maintaining appropriate inventory levels, and by working with our vendors to improve payment terms. We strive to achieve the appropriate balance of short-term expense control while maintaining the expertise and capacity to grow the business.

Three Months Ended MarchJune 31,30, 2026 Compared with the Three Months Ended MarchJune 31,30, 2025

Net Sales. Net sales for the three months ended MarchJune 31,30, 2026, were $3.3$3.9 billion, aan 10.1%8.8% decrease from net sales of $3.7$4.2 billion for the three months ended MarchJune 31,30, 2025. Core organic sales decreased net sales by 8.3%,7.0%, primarily due to a lower housing starts environment,environment and related headwinds, while commodity price deflation decreased net sales by another 3.3%.2.7%. These decreases were partially offset by an increase in net sales from acquisitions of 1.5%.0.9%.

Excluding lumber and lumber sheet goods, weWe experienced decreased net sales in allour productmanufactured categoriesproducts category primarily due to a lower single-family housing starts environment and commodity price deflation, partially offset by an increase in net sales from acquisitions. Our windows, doors and millwork and specialty building products and services net sales decreased primarily due to decreased single-family activity resulting from a lower housing starts,starts environment, partially offset by an increase in net sales from acquisitions. Our lumber and lumber sheet goods category decreased primarily due to commodity price deflation and a lower single-family housing starts,starts environment, partially offset by an increase in net sales from acquisitions.

Gross Margin. Gross margin decreased $0.2 billion to $0.9$1.1 billion. Our gross margin percentage decreased to 28.3%28.1% in the firstsecond quarter of 2026 from 30.5%30.7% in the firstsecond quarter of 2025, a 2.2%2.6% decrease. This decrease was primarily driven by a lower housing starts environment.environment and related headwinds.

Selling, General and Administrative Expenses. Selling, general and administrative expenses decreased by $18.4$29.5 million, or 2.0%,3.0%, primarily due to decreasedlower variable compensation resulting from decreased net sales and lower wages as a result of decreasedcost sales,saving actions, partially offset by additional operating expenses from locationsour acquiredongoing withinenterprise theresource lastplanning twelvesystem months.implementation and higher fuel costs.

As a percentage of net sales, selling, general and administrative expenses increased to 27.8%,24.8%, up from 25.4%,23.3%, for the three months ended MarchJune 31,30, 2026 and 2025, respectively, primarily attributable to reduced operating leverage.

Interest Expense, Net. Interest expense was $74.4$76.1 million in the firstsecond quarter of 2026, an increase of $9.5$4.1 million from the firstsecond quarter of 2025. The increase was primarily due to higheradditional averageinterest debtexpense balances.from purchase options exercised related to other finance obligations.

Income Tax Expense (Benefit).Expense. We recorded income tax benefitexpense of $10.5$56.3 million and income tax expense of $23.2$54.3 million in the firstsecond quarters of 2026 and 2025, respectively. The decreaseincrease in the tax expense was primarily driven by a settlement agreement with the IRS regarding the treatment of certain research and development expenses claimed in prior years. As a result of the settlement agreement, we recognized a discrete income tax expense of approximately $43.9 million in the current year period, which significantly increased income tax expense and our effective tax rate. Excluding the impact of the settlement agreement, income tax expense decreased primarily as a result of a decrease in income before income taxes in the current period. Our effective tax rate was 18.1%107.4% in the firstsecond quarter of 2026, acompared decreaseto from 19.4%22.7% in the firstsecond quarter of 2025, primarily related to an increase in stock-based compensation benefit.2025.

Our primary capital requirements are to fund working capital needs and operating expenses, meet required interest and principal payments, and to fund capital expenditures and potential future growth opportunities. Our capital resources at MarchJune 31,30, 2026, consist of cash on hand and borrowing availability under our Revolving Facility.

Our Revolving Facility is primarily used for working capital, general corporate purposes and funding capital expenditures and growth opportunities. In addition, we may use borrowings under the Revolving Facility to facilitate debt repayment and consolidation, invest in strategic acquisitions, and to fund share repurchases. Availability under the Revolving Facility is determined by a borrowing base. Our borrowing base consists of accounts receivable, inventory, and qualified cash that all meet specific criteria contained within the credit agreement, minus agent specifiedagent-specified reserves. Net excess borrowing availability is equal to the maximum borrowing amount minus outstanding borrowings and letters of credit.

As of MarchJune 31,30, 2026, we had $200.0$165.0 million outstanding borrowings under our Revolving Facility, and our net excess borrowing availability was $1.4$1.6 billion after being reduced by outstanding letters of credit totaling $76.0 million. Excess availability must equal or exceed a minimum specified amount, currently $170.4$180.1 million, or we are required to meet a fixed charge coverage ratio of 1.00 to 1.00. We were not in violation of any covenants or restrictions imposed by any of our debt agreements at MarchJune 31,30, 2026.

Our liquidity at MarchJune 31,30, 2026, was $1.5$1.6 billion, which consistsconsisting of approximately $1.5 billion in net borrowing availability under the Revolving Facility and $0.1 billion cash on hand.

Cash provided by operating activities was $87.5$155.5 million for the threesix months ended MarchJune 31,30, 2026, compared to cash provided by operating activities of $132.3$473.4 million for the threesix months ended MarchJune 31,30, 2025. The decrease in cash provided by operating activities was primarily driven by a net loss in the current period compared to net income in the prior-yearprior year period, partially offset by an increase in deferred income taxestax liabilities and a decrease in net working capital in the first threesix months of 2026.

For the threesix months ended MarchJune 31,30, 2026, cash used in investing activities decreased $854.2$952.4 million compared to the threesix months ended MarchJune 31,30, 2025, primarily due to using $812.4$859.6 million less cash used for acquisitions.

Information regarding recent accounting pronouncements is discussed in Note 1 to the condensed consolidated financial statements included in Part I, Item 1 of this quarterly report on Form 10-Q.