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

Our business depends on residential repair and remodel activity levels. Historically, residential repair and remodeling activity has decreased in slow economic periods. General economic weakness, inflation, elevated unemployment levels, economic and financial market impacts from government shutdowns, high consumer debt levels, mortgage delinquency and foreclosure rates, mortgage interest rate levels, limitations in the availability of mortgage and home improvement financing, home equity value declines and lower housing turnover all limit consumers’ spending, particularly on discretionary items, and affect their confidence level leading to reduced spending on home improvement projects. Depressed activity levels in consumer spending for home improvement construction would adversely affect our business, liquidity, results of operations, and financial position. Furthermore, economic weakness causes unanticipated shifts in consumer preferences and purchasing practices and in the business models and strategies of our customers. Such shifts may alter the nature and prices of products demanded by the end consumer, and, in turn, our customers and could adversely affect our operating performance.

Our business is also dependent on the new residential construction market and, in particular, single family home construction. Factors impacting the level of activity in the residential new construction markets include increases in and the relative level of mortgage interest rates, inflation,inflation and unemployment rates, decreases in and the relative level of job and wage growth, levels of housing inventory, availability of affordable housing, high foreclosure rates and unsold/foreclosure inventory, availability of financing and mortgages, labor costs and availability, vacancy rates, local, state and federal government regulation (including mortgage interest deductibility and other tax laws), weakening in the U.S. economy or of any regional or local economy in which we operate, availability of supplies, consumer confidence, demand and preferences, tightened availability or affordability of homeowner insurance coverage, lowering population growth, lower levels of immigration to the U.S., household formation or other unfavorable demographic changes, lack of available land in certain markets, and shifts in populations away from the markets that we serve, all of which are beyond our control. Weakness in new residential construction due to any or all of these factors would have a material adverse effect on our business, financial condition, and operating results, and these factors may also result in fluctuations in our operating results. As a result, our results for any historical period may not be indicative of results for any future period.

In addition, we extend credit to numerous customers who are generally susceptible to the same economic business risks that we are.are susceptible to. Unfavorable housing market conditions could result in financial failures of one or more of our significant customers. Furthermore, we may not be aware of deterioration in our customers’ financial position. If our larger customers’ financial positions were to become impaired, our ability to fully collect receivables from such customers could be impaired and negatively affect our operating results, cash flows, and liquidity.

Our customers and suppliers also continue to consolidate, and this consolidation could result in the loss of existing customers and suppliers to our competitors. Furthermore, continued consolidation among our suppliers may makesmake it more difficult for us to negotiate favorable pricing, consignment arrangements, and discount programs with our suppliers, thereby resulting in reduced margins and profits.

As customers continue to consolidate or otherwise increase their purchasing power, they are better able, and may choose, to purchase products directly from the same suppliers that use us for distribution. In addition, our suppliers may electchoose to distribute some or all of their products directly to end-customers in one or more markets. This process of disintermediation can put us at risk of losing business from a customer, or of losing entire product lines or categories, or distribution territories, from suppliers. Disintermediation also may also adversely impact our ability to obtain favorable pricing from suppliers and optimize margins and revenue with respect to our customers. As a result, continued disintermediation could have a negative impact on our financial condition and operating results.

Our dependence on international suppliers and manufacturers for certain products exposes us to risks of tariffs, including new or increased tariffstariffs, changes in trade policies of the United States and other countries, and other risks that could affect our financial condition and expose us to certain additional risks.

Many of our suppliers and manufacturers are located outside of the United States. Thus, compliance with federal laws and regulations regarding the importation of products, import taxes or costs, including new or increased tariffs, anti-dumping duties, countervailing duties, or similar import duties, some of which could be applied retroactively, and modification to or withdrawal from free trade agreements or trade relationships, could increase the cost of the products that we distribute. For example, thecertain U.S.imported hasmaterials recentlyand signaledproducts itsthat intentionwe distribute and use in our business have become subject to change U.S. trade policy, including potentially renegotiating or terminating existing trade agreementsnew and leveragingincreased tariffs imposed by the United States government and may in the future become subject to additional tariffs. InThese February 2025, the U.S. imposed additional tariffs on imports from Chinanew and announced and subsequently paused implementation of tariffs on imports from Canada and Mexico. These additionalincreased tariffs, as well as acountervailing government’smeasures adoptioninstituted ofby “buyother national”governments policiesin response to, or retaliationin byanticipation another government againstof, such tariffs or policies have introduced, and may havecontinue introducedto introduce, significant uncertainty into the market and mayto affect the prices of and supply of the products available to us. In addition, quotas, embargoes, sanctions, safeguards, and customs restrictions, as well as foreign labor strikes, work stoppages, or boycotts, could reduce the supply of the products available to us. Geopolitical events, including warwar, civil and political unrest and terrorism, could also cause a reduction in the supply or increase the costs of the products available to us. If we become subject to a reduction in available supply of imported products and we are unable to mitigate that reduction through alternative sources, or if the costs of our imported products increase and we are not able to pass along those increased costs to our customers, then our business, financial condition, and results of operations could be adversely affected.

Our earnings are highly dependent on sales volumes, which are dependent on both the housing cycle, as well as our execution. In addition, selling commoditized products that are subject to fluctuating prices makes it difficult to predict our financial results with any degree of certainty. Commodity and specialty product price inflation or deflation can increase or decrease our gross margins on relatively consistent year over yearyear-over-year structural sales volumes, depending on the degree of commodity price change. Any failure to maintain, or increase sales volumes, alone or combined with margin fluctuations due to price inflation or deflation, which would impact the purchase and/or selling price of our products, could adversely affect our results of operations, cash flows, and financial condition.

The building products distribution industry is subject to cyclical market pressures and market prices of building products historically have been volatile and cyclical. Prices of building products are determined by overall supply and demand in the marketmarket, and we have limited ability to control the timing and amount of pricing changes. Demand for building products is driven mainly by factors outside of our control, such as general economic and political conditions, interest rates, availability of mortgage financing, inflation, the construction, repair and remodeling markets, industrial markets, housing supply, weather, and population growth. The supply of building products fluctuates based on available manufacturing capacity, and excess capacity in the industry can result in significant declines in market prices for those products. To the extent that prices and volumes experience a sustained or sharp decline, our net sales and margins likely would decline as well. Because we have meaningful fixed costs, a decrease in sales and margin generally may have a significant adverse impact on our financial condition, operating results, and cash flows.

Additionally, our business is reliant upon information technology systems to, among other things, manage and route our sales calls, manage inventories and accounts receivable, make purchasing decisions, monitor our results of operations, place orders with our vendors andvendors, process orders from our customers, and manage, receive and route deliveries to our customers. TheseIn addition, we are in the early stages of integrating artificial intelligence (“AI”) into our business to support our business operations. Our development and adoption of AI and other new technologies may present new technological threats, vulnerabilities and uncertainties, which may expose us to legal, reputational and financial harm. Our information technology systems may be vulnerable to natural disasters, telecommunications or equipment failures, power outages and similar events, employee errors or to intentional acts of misconduct, such as security breaches or cyberattacks. The occurrence of any of these events or acts, or any other unanticipated problems, could result in damage to or the unavailability of these systems. Such damage or unavailability could, despite any existing disaster recovery and business continuity arrangements, interrupt the availability of one or more of our information technology systems. We have experienced from time to time experienced such disruptions, and while such disruptions did not materially affect our business, they may occur in the future. Future disruptions in these systems could materially impact our ability to buy and sell our products, as well as generally operate our business, which could reduce our revenue.

We purchase most of our products directly from manufacturers, which are then sold and distributed to customers. We must maintain,maintain and have adequate working capital to purchase,purchase sufficient inventory to meet customer demand. Due to the lead times required by our suppliers, we order products in advance of expected sales. As a result, we are required to forecast our sales and purchases accordingly. In periods characterized by significant changes in the overall economy and activity in the residential and commercial building and home repair and remodel industries, it can be especially difficult to forecast our sales accurately. We must also manage our working capital to fund our inventory purchases. Such issues and risks can be magnified by the diversity of product mix our distribution centers carry across multiple major product categories. Excessive increases in the market prices of certain building products can put negative pressure on our operating cash flows by requiring us to invest more in inventory. In the future, if we are unable to effectively manage our inventory, our cash flows may be negatively affected, which could have a material adverse effect on our business, financial condition, and operating results.

As part of our overall strategy, we have made acquisitions, and we may make acquisitions or investments in the future. Acquisitions and investments involve significant risks and uncertainties, including uncertainties as to the future financial performance of the acquired business, the achievement of expected synergies, or exposure to unforeseen liabilities of acquired companies.

While we maintain insurance covering our facilities and equipment, including business interruption insurance, the operations at our distribution facilities may be interrupted or impaired by various operating risks, including, but not limited to, risks associated with catastrophic events, such as war, fires, floods, earthquakes, explosions, natural disasters, severe weather, including hurricanes, tornados and droughts, whether a result of climate change or otherwise, pandemics, or other public health crises, or other similar occurrences, interruptions in the delivery of products via railroad or other inbound transportation means, adverse government regulations, civil or political unrest, terrorist acts, condemnation, equipment breakdowns or failures, prolonged power failures, unscheduled maintenance outages, information system disruptions or failures due to any number of causes, violations of our permit requirements or revocation of permits, releases of pollutants and hazardous substances to air, soil, surface water or ground water; disruptions in transportation infrastructure, including roads, bridges, railroad tracks and tunnels, shortages of equipment or spare parts, and labor disputes and shortages. For example, one of our owned warehouse facilities located in Erwin, Tennessee was damaged by Hurricane Helene in late September 2024. We could incur uninsured losses and liabilities arising from such events, including damage to our reputation, and/or suffer material losses in operational capacity, which could have a material adverse impact on our business, financial condition, and results of operations. In addition, war, terrorism, civil or political unrest, geopolitical uncertainties, and public health issues could cause damage or disruption to the global economy, and thus could have a material adverse effect on our financial condition, operating results and cash flows, our suppliers and our customers.

We are also subject from time to time subject to casualty, contract, tort, and other claims relating to our business, the products we have distributed in the past or may in the future distribute, and the services we have provided in the past or may in the future provide, either directly or through third parties. In addition, operating hazards, such as delivering and unloading products, operating large machinery and driving hazards, which are inherent in our business and some of which may be outside of our control, can cause personal injury and loss of life, damage to or destruction of property and equipment and environmental damage.

We cannot predict or, in some cases, control the costs to defend or resolve such claims. We cannot assure our ability to maintain suitable and adequate insurance on acceptable terms or that such insurance will provide adequate protection against potential liabilities, and the cost of any product liability or other proceeding, even if resolved in our favor, could be substantial. Additionally, we do not carry insurance for all categories of risk that our business may encounter. Any significant uninsured liability may require us to pay substantial amounts. There can be no assurance that any current or future claims will not adversely affect our financial position, cash flows,flow, or results of operations.

Climate change, and its effects on weather patterns, the frequency and severity of weather-related events, and temperatures, could adversely impact our business. Extreme weather events and temperatures could affect the availability of raw materials for the products that we distribute, the ability of our suppliers to deliver products to our distribution facilities and our ability to deliver those products to our customers. They could also result in lost production, supply chain disruption anddisruption, increased transportation costs.costs, and damage to or destruction of our distribution or warehouse facilities and inventory. Severe weather events and climate change could also delay home construction and negatively impact the demand for new homes in affected areas. Unpredictable weather and climate changes could also cause the price of the products we buy and sell to fluctuate significantly, including during and as a result of prolonged periods of heavy rain or drought, fires or other unpredictable weather events. Any or all of these effects could materially and adversely impact our business or results of operations.

As of DecemberJanuary 28,3, 2024,2026, we employed approximately 2,0002,160 associates and less than one percent of our associates are employed on a part-time basis. Approximately 2021 percent of our associates are represented by various local labor unions with terms and conditions of employment governed by Collective Bargaining Agreements (“CBAs”). SixFive CBAs covering approximately sixfour percent of our associates are up for renewal in fiscal year 2025,2026, of which one is currently in the renegotiation process. We expect to renegotiate the remainder before their renewal dates.

Although we have generally had good relations with our unionized employees and expect to renew collective bargaining agreements as they expire, no assurances can be provided that we will be able to reach a timely agreement as to the renewal of the agreements, and their expiration or continued work under an expired agreement, as applicable, could result in a work stoppage. In addition, we may become subject to material wage increases, or additional work rules imposed by agreements with labor unions. The foregoing could increase our selling, general, and administrativeoperating expenses in absolute terms and/or as a percentage of net sales. In addition, work stoppages or other labor disturbances may occur in the future, which could adversely impact our net sales and/or selling, general, and administrative expenses. Wage increases could also be significant in an inflationary environment even in our non-unionized locations. All or some of these factors could negatively impact our operating results and cash flows.

We are subject to various federal, state, local, and other laws and regulations, including, among other things, transportation regulations promulgated by the Department of Transportation (“DOT”) and Federal Motor Carrier Safety Administration (“FMCSA”), work safety regulations promulgated by Occupational Safety and Health Administration, employment regulations promulgated by the U.S. Equal Employment Opportunity Commission, regulations of the U.S. Department of Labor and Federal Trade Commission, regulations issued by the SEC, accounting standards issued by the Financial Accounting Standards Board (“FASB”) or similar entities, and state and local zoning restrictions, building codes and contractors’ licensing regulations. More burdensome regulatory requirements in these or other areas may increase our general and administrative costs and adversely affect our financial condition, operating results, and cash flows. Moreover, failure to comply with the regulatory requirements applicable to our business could expose us to litigation and substantial fines and penalties that could adversely affect our financial condition, operating results, and cash flows.flow.

If an epidemic, global pandemic, or other widespread public health crisescrisis disrupts the worldwide economy or if similar widespread disease outbreaks occur in the future, our business, financial condition and results of operations could be negatively affected to the extent such event harms the economy or regions in which we operate. In particular, any governmental imposition of mandatory or voluntary closures in areas where our manufacturing facilities, suppliers or customers are located, in response to any such disease outbreak, epidemic, pandemic or health crisis, could severely disrupt our operations. In addition to this potential direct impact on our facilities and operations, any outbreaks, epidemics or pandemics could negatively impact our industry and end markets as a whole or result in a longer-term economic recession. Any of these factors could negatively affect our business, financial condition, cash flows, profitability, and results of operations.

•general economic conditions, including but not limited to housing starts, construction labor shortages, repair and remodel activity and commercial construction, foreclosure rates, interest rates, unemployment rates and job and wage growth rates, consumer debt levels, tightened availability or affordability of homeowner insurance coverage, and mortgage availability and pricing, as well as other consumer financing mechanisms, that ultimately affect demand for our products;

•supply chain disruptions, including those caused by the spread of contagious illness and other public health crises and geopolitical risksrisks, such as acts of war or terrorism or political or civil unrest;

•security breaches or disruption in our information technology systems and the risks relating to our use of artificial intelligence;

As of DecemberJanuary 28,3, 2024,2026, we had no outstanding debt under our revolving credit facility, and approximately $300.0 million of debt outstanding under our senior secured notes. Additionally, as of DecemberJanuary 28,3, 2024,2026, outstanding commitments under our finance leases were approximately $292.5$321.3 million. Our level of indebtedness could still have considerable consequences to our financial condition and operating results. For example, our indebtedness could:

These covenants and restrictions could affect our ability to operate our business,business and may limit our ability to react to market conditions or take advantage of potential business opportunities as they arise. Additionally, our ability to comply with these covenants may be affected by events beyond our control, including general economic and credit conditions and industry downturns.

Our results may be affected by a change in our product mix. Our outlook, budgeting, and strategic planning assume a certain mix of product sales. If actual results vary from this projected mix of product sales, our financial results could be negatively impacted. Additionally, gross margins vary across our product lines. If the mix of products shifts from higher margin product categories to lower margin product categories, our overall gross margins and profitability may be adversely affected. Consequently, changes in our product mix could have a material adverse impact on our financial condition and operating results.

Petroleum and energy prices and availability of petroleum products are subject to political, geopolitical, economic, and market factors that are outside our control.control, including actions by the Organization of the Petroleum Exporting Countries, or OPEC, and other oil and gas producers. Political events in petroleum-producing regions such as war and political and civil unrest as well as regional production patterns, limits on refining capacities, natural disasters, environmental concerns, including the impact of legislation and regulatory efforts to limit greenhouse gas emissions, public health emergencies, and hurricanes and other weather-related events or natural disasters may cause the price of fuel to increase or the availability of fuel to decrease. Within our business units, we deliver products to our customers primarily via our fleet of trucks, which we fuel both onsite and through street fuel programs. We also utilize third-party freight providers to deliver our products and the costs associated with them could affect the expense incurred to deliver products to our customers. Our operating profit may be adversely affected if we are unable to obtain the fuel we require or to fully offset the anticipated impact of higher fuel prices or third-party freight costs through increased prices or fuel surcharges to our customers. Besides trying to pass fuel costs to customers, we have at times entered into forward purchase contracts for fuel used at some of our facilities that protect against fuel price increases. If shortages occur in the supply of necessary petroleum products and we are not able to pass along the full impact of increased petroleum prices to our customers or otherwise protect ourselves by entering into forward purchase contracts, then our results of operations would be adversely affected.

As of DecemberJanuary 28,3, 2024,2026, we had $50.6 million in net deferred tax assets. These deferred tax assets include temporary differences arising from such items as property and equipment, accrued compensation, and accounting reserves related to inventory and other items in conjunction with net state operating loss carryovers that can be used to offset taxable income in future periods and reduce income taxes payable in those future periods. Each quarter, we determine the probability of the realization of deferred tax assets, using significant judgments and estimates with respect to, among other things, historical operating results, expectations of future earnings, and tax planning strategies. For example, we were required to evaluate and maintain reasonable valuation allowances against our remaining state net operating loss carryforwards againstincluded within our U.S. deferred tax assets as of DecemberJanuary 28,3, 2024.2026. These valuation allowances are calculated based on the probability that we will not realize taxable income in the states in which we carry net operating loss carryforwards in a time suitable to take advantage of them. If we determine in the future that there is not sufficient positive evidence to support the remaining valuation of our deferred tax assets, either due to Part 1, Item 1A, Risk Factors described herein or other factors which may impact our net operating carryforwards or other components of our deferred tax assets such as our temporary differences which may arise from tax legislation which we cannot foresee, we may be required to further adjust the valuation allowance to reduce our deferred tax assets, in specific areas or in total. Such a reduction could result in material non-cash expenses in the period in which the valuation allowance is adjusted and could have a material adverse effect on our results of operations.

Our expected annual effective income tax rate could be volatile and materially change as a result of changes in the mix of earnings and other factors.

Our overall effective income tax rate is equal to our total income tax expense, also referred to as provision for income taxes, as a percentage of our income or loss before provision for income taxes. However, tax expenses and benefits are determined separately for each tax paying entity or group of entities that is consolidated for tax purposes in each jurisdiction. Losses in certain jurisdictions may provide no current financial statement tax benefit. As a result, changes in the mix of profits and losses between jurisdictions, among other factors, could have a significant impact on our overall effective income tax rate. New and unforeseen changes in tax legislation may impact our effective income tax rate in future periods, both on a federal and state level, which may have an impact on our net income and result in material non-cash expenses in the relevant period.

• announcements by usour competitors, our suppliers, or our competitorscustomers of significant acquisitions, dispositions or expansion plans;

Many of the factors that cause our operations to fluctuate are seasonal or cyclical in nature. Historically, our operating results have also been correlated with the level of single-family residential housing starts in the U.S. The demand for new homes is dependent on a variety of factors, including unemployment levels, job and wage growth, changes in population and demographics, the availability and cost of mortgage financing, the supply and affordability of new and existing homes, availability and affordability of homeowners insurance coverage, and consumer confidence.confidence and demand. Certain developments have led to a more challenging macro-economic environment, such as broad-based inflation, the rapid rise in mortgage rates, home price appreciation, and low existing home turnover. These developments have impacted the U.S. housing market, including the residential repair and remodel and residential new construction markets, and have contributed to a slowdown in the U.S. housing industry that continued through 2024 intoand 2025. In addition, looking ahead, we believe that the demand for our products could face pressure from increases in tariffs and other inflationary pressures, the potential for trade disruption through embargoes, sanctions and import and export controls, and labor shortages and workforce disruption in the home building and remodeling industry due to immigration enforcement activities. However, we believe that several factors, including the current high levels of home equity, the fundamental undersupply of housing in the U.S., potential actions of the U.S. government to address housing availability and affordability, repair and remodel activity, and demographic shifts, among others, will support demand for our products. For additional information regarding the risk factors impacting our business, refer to Part I, Item 1A, Risk Factors, in this Annual Report.

We estimate that demand from the residential repair and remodel market (“R&R”) accounts for approximately 45 percent of our annual sales. Historically, R&R demand conditions have tended to be less cyclical when compared to the residential new construction market, particularly for exterior products that are exposed to the elements and where maintenance is less likely to be deferred for long periods of time. We believe R&R demand is driven by a myriad of factors including, but not limited to: home prices and affordability; macro-economic conditions and expectations around inflationary rate, unemployment rate, interest rate, and economic output; raw materials prices; the pace of new household formations; savings rates; employment conditions; and emerging trends, such as the increased popularity of home-based remote working environments. Residential mortgage rates have risen in recent years and we believe many homeowners who secured mortgages with lower interest rates will be inclined to stay longer in existing homes, which could benefit R&R demand over the near-to-medium term. On the other hand, we are experiencing low existing home turnover, which we believe may still be currently hindering any significant growth in R&R activity.

According to the Joint Center For Housing Studies’ Leading Indicator of Remodeling Activity (“LIRA”) Index, spending for R&R is expected to increase in 20252026 over 2024,2025 particularlyand later in the year.2024. The total market size of the U.S. R&R market remains significant, with total U.S. homeowner improvements and repairs spending expected to be approximately $509$517 billion in 2025,2026, compared to the$511 $503billion, $501 billion, $510 billion, and $515 billion in 2025, 2024, 2023, and 2022, respectively, but up significantly from the $407 billion and $362 billion in 2021 and the2020, $363 billion in 2020.respectively. As the median age of U.S. housing stock continues to increase over time, we anticipate domestic R&R spending will also increase. According to the U.S. Census Bureau and Department of Housing and Urban Development, the median age of an owner-occupied home in the U.S. increased from 23 years in 1985 to 4041 years in 2022.2023. Moreover, approximately 7573 percent of the current owner-occupied housing stock was built prior to 1999.2000. We believe the increasing average age of the nation’s approximately 145 million existing homes will drive demand for R&R projects.

We estimate that demand from the residential new construction market, including single-family and multi-family units, accounts for approximately 40 percent of our annual sales. We believe our products are currently more likely to be used in single-family construction than in multi-family units, and therefore we are actively pursuing multi-family business as part of our sales growth strategy.

Our gross profit is equal to our netNet sales less the costCost of the products sold. Substantially all of the amount reported in Cost of products sold is composed of cost to purchase inventory for resale to customers, including the cost of inbound freights, volume incentives, and inventory adjustments. During fiscal 2024,2025, 20232024 and 2022,2023, no one supplier represented more than 10% of our consolidated Cost of products sold.

PandemicsDisease Outbreaks and Public Health CrisisCrises

The impact of any future disease outbreaks, epidemics,such as epidemics or pandemicspandemics, and other public health crises can affect our operational and financial performance to varying degrees,degrees. In addition, any subsequent economic recovery from such asevents thecan COVID-19also globalaffect pandemicour did.operational and financial performance. The extent of the effects ofany future disease outbreaks or other public health crises, including a resurgence of the COVID-19 pandemic,crises or related containment measures and government responses are highly uncertain and cannot be predicted.

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

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

There have been no material changes to the risk factors disclosed in Part I, Item 1A, Risk Factors, in our 2025 Form 10-K, except as setsupplemented forthby below.the risk factors disclosed in Part II, Item 1A, Risk Factors, in our Form 10-Q for the Quarterly Period ended April 4, 2026.

This Quarterly Report on Form 10-Q (“Quarterly Report” or “Form 10-Q”) contains forward-looking statements. Forward-looking statements include, without limitation, any statements that predict, forecast, indicate or imply future results, performance, liquidity levels or achievements, and may contain the words “believe,” “anticipate,” “could,” “expect,” “estimate,” “intend,” “may,” “project,” “plan,” “should,” “will,” “will be,” “will likely continue,” “will likely result,” “would,” or words or phrases of similar meaning. Forward-looking statements are based on estimates and assumptions made by our management that, although believed by us to be reasonable, are inherently uncertain. Forward-looking statements involve risks and uncertainties that may cause our business, strategy, or actual results to differ materially from the forward-looking statements. The forward-looking statements in this report include, without limitation, statements about anticipated effects of adopting certain accounting standards; estimated future annual amortization expense; estimates made in connection with revenue recognition; the expected outcome of legal proceedings; the expected outcome of government and regulatory proceedings; industry conditions; seasonality; liquidity and capital resources; our confidence in the Company’s long-term growth strategy; our areas of focus and management initiativesinitiatives, including our business and digital transformation initiatives, and the success thereof; our plans and ability to enhance our facilities, fleet, and technology hardware; our ability to manage increases in fuel and other energy prices; the demand outlook for construction materials and expectations regarding new home construction, repair and remodel activity and continued investment in existing and new homes; our positioning for long-term value creation; our efforts and ability to generate profitable growth; our ability to increase net sales in specialty product categories; our ability to generate profits and cash from sales of specialty products; our ability to successfully integrate the operations of DisderoDisdero, including our ability to strengthen and expand our premium specialty product offerings; or ability to effectively manage inventory; our ability to manage our lease commitments; our ability to negotiate collective bargaining agreements; our multi-year capital allocation plans; our ability to manage volatility in wood-based commodities; our improvement in execution and productivity; our efforts and ability to maintain a disciplined capital structure and capital allocation strategy; our ability to maintain a strong balance sheet; our ability to focus on operating improvement initiatives and commercial excellence; and whether or not the Company will continue any share repurchases.

These risks and uncertainties also include those discussed under the heading “Risk Factors” in Part II, Item 1A of this Form 10-Q, under the heading “Risk Factors” in Part I, Item 1A of our 2025 Form 10-K, as supplemented by the risk factors disclosed in Part II, Item1A, “Risk Factors” in our Quarterly Report on Form 10-Q for the Quarterly Period ended April 4, 2026, and those risks and uncertainties discussed elsewhere in this Form 10-Q, and in future reports that we file with the SEC.

In addition to historical information, the following discussion and other parts of this Form 10-Q contain forward-looking information that involves risks and uncertainties. Our actual results could differ materially from those anticipated by this forward-looking information due to the factors discussed under Part II, Item 1A, Risk Factors, in this Form 10-Q and under Part I, Item 1A, Risk Factors, in our 2025 Form 10-K.10-K, as supplemented by the factors discussed in Part II, Item 1A, Risk Factors, in our Form 10-Q for the Quarterly Period ended April 4, 2026.

4.Maintain a disciplined capital structure and pursue strategic investments that increase the value of our 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 fiscal threesix months ended AprilJuly 4, 2026, we:

•Returned capital of $3.0$5.0 million to our shareholders by using cash to purchase 59,05195,800 shares of our common stock at an average price of $50.83,$52.19, excluding broker commissions and excise tax. Between April 4, 2026 and April 21, 2026, we repurchased an additional 36,749 shares of our common stock at an average price of $54.43 per share excluding broker commissions and excise tax, for a total of $2.0 million.

Our results of operations and financial performance are influenced by a variety of factors, including the following: adverse housing market conditionsconditions, including but not limited to housing starts, construction labor shortages, repair and remodel activity and commercial construction, foreclosure rates, interest rates, unemployment rates and job and wage growth rates, consumer debt levels, tightened availability or affordability of homeowner insurance coverage, and mortgage availability and pricing, as well as other consumer financing mechanisms, that ultimately affect demand for our products; consolidation among competitors, suppliers, and customers; escalating changes in retaliatory trade policies of the United States and other countries; disintermediation risk; 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; 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 success of management initiatives, including our business and digital transformation initiatives; the ability to attract, train, and retain highly qualified associates and other key personnel while controlling related labor costs; artificial intelligence cost increases; home center distribution disruption; business disruptions; exposure to liability, including product liability and other claims and legal proceedings related to our businessbusiness, employee injuries, workers compensation claims, 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; thechanges effects of epidemics, global pandemics or other widespread public health crises andin governmental rules and regulations or interpretations thereof; 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, including as a result of disruptions in international shipping of oil and gas through the Strait of Hormuz and the ongoing conflicts in the Middle East and Ukraine, or availability of third part freight providers; geopolitical risks, such as acts of war or terrorism or political or civil unrest; changes in insurance-related deductible/retention liabilities based on actual loss development experience; the possibility that the value of our deferred tax assets could become impaired; changes in our expected annual effective tax rate could be volatile; the costs and liabilities related to our participation in multi-employer pension plans could increase; the risk that our cash flows and capital resources may be insufficient to service our existing or future indebtedness; interest rate risk, which could cause our debt service obligations to increase; the effects of epidemic, global pandemics or otherwise widespread public health crises; and changes in, or interpretation of, accounting principles. These factors, and the related trends and uncertainties, have historically produced cyclicality in our results of operations, and we expect this cyclicality to continue in future periods.

For more information on the risk factors impacting our business, refer to Part II, Item 1A, Risk Factors, in this Form 10-Q and to Part I, Item 1A, Risk Factors, in our 2025 Form 10-K.10-K, as supplemented by Part II, Item 1A, Risk Factors, in our Form 10-Q for the quarterly period ended April 4, 2026.

Our results of operations for the fiscal three months ended AprilJuly 4, 2026 (“fiscal first quarter ofQ2 2026” or “current year period” or “current year quarter”) and for the fiscal three months ended MarchJune 29,28, 2025 (“fiscal first quarter ofQ2 2025” or “prior year period” or “prior year quarter”) were as follows:

Fiscal FirstSecond Quarter of 2026 Compared to Fiscal FirstSecond Quarter of 2025

For the fiscal first quarter ofQ2 2026, the Company’s Net sales were $731.1$814.1 million, an increase of $21.9$34.0 million, or 3.1%,4.4%, compared to the fiscal first quarter ofQ2 2025.

•The $34.0 million increase in the Company’s Gross profit in the current fiscal quarter was attributable to both specialty products and structural products.

•TheQ2 current year period2026 includes the results of Disdero, which contributed to Gross profit.profit for the Company and specialty products.

•Approximately 80%81% of the Company’s Gross profit was generated by specialty products in the fiscal first quarter ofQ2 2026, compared to 81%84% in the fiscal first quarter ofQ2 2025.

•The Company’s Cost of products sold for theQ2 fiscal first quarter of 20252026 included a benefit of $2.4$7.2 million related to retroactive adjustments associated with antidumping/countervailing (“AD/CV”) duties for certainIEEPA importedtariff specialty products.refunds. See Note 3,9, Inventory,Commitments and Contingencies, to the accompanying unaudited condensed consolidated financial statements included in Part I, Item 1 of this Quarterly Report on Form 10-Q.

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 $32.4$20.7 million, or 6.8%,3.8%, to $511.8$564.1 million in theQ2 fiscal2026 firstcompared quarterto ofQ2 2026.2025.

•The overall increase in Net sales for specialty products in the current fiscal quarter was due primarily to higher volumespricing for allmost key product categories,types and the positive impact of Disdero, partially offset by slightlyvolume lower pricingdeclines for most product categoriestypes. dueThe increase in pricing was in response to aprice continuingincreases competitivefrom pricingkey environment.vendors and inflationary impacts on the cost of operating our business.

•Specialty products’ gross margin percentage decreasedincreased by 60150 basis points to 18.1%20.0% in Q2 2026 compared to 18.7%18.5% in the fiscal first quarter ofQ2 2025. This increase was primarily due to Disdero increasedand the grossaforementioned margin percentage in the current quarter. The prior year period benefited from the $2.4 millionimport duty-related refund described above,item which increased the gross margin percentage for specialty products in the prior year period by 50130 basis points.points in Q2 2026.

Structural products - Net sales of structural products, which include product types such as lumber, panels (including plywood and oriented strand board), rebar, and remesh, decreasedincreased by $10.5$13.3 million, or 4.6%,5.6%, to $219.3$249.9 million in the fiscal first quarter ofQ2 2026 compared to $229.8$236.6 million in the fiscal first quarter ofQ2 2025.

•ThisThe overall decreaseincrease in Net sales for structural products in the current fiscal quarter was due to lowerincreases in pricing and volumes for panels and lumber, partially offset by volume gainsdeclines forin lumber.panels.

•Compared to the first quarter ofQ2 2025, average commodity prices in U.S. markets duringfor the first quarter ofQ2 2026 were up approximately 9% for lumber were down approximately 4% and down approximately 14%flat for panels.

•Structural products’ Gross profit increased overall by $2.5$7.7 million, or 11.6%,39.8%, to $23.8$27.1 million in the fiscal first quarter ofQ2 2026 from $21.4$19.4 million in the fiscal first quarter ofQ2 2025 due to marginprimarily expansionto for both lumberprice and panelsvolume accompanied by higher Net salesincreases for lumber.

•Structural products’ gross margin percentage for the fiscal first quarter ofQ2 2026 was 10.9% compared to 9.3%8.2% in theQ2 fiscal2025 firstdue quarterto ofmargin 2025.expansion for both lumber and panels.

Our Selling, general, and administrative (“SG&A”) expenses increased by $2.1$12.1 million, or 2.2%,12.7% in Q2 2026 compared to the fiscal first quarter ofQ2 2025. This overall increase was due primarily to Disdero. The overall increase in the current quarter was partiallydue offsetprimarily byto aDisdero, benefitfuel ofexpenses, $1.9third-party millionfreight forexpenses, insuranceand proceedsemployee-related received for business interruptions at our Erwin, Tennessee owned facility that was damaged in the third quarter of 2024 by Hurricane Helene.expenses.

Depreciation and amortization expense increased by $2.4$1.7 million, or 25.3%,17.2% in Q2 2026 compared to the fiscal first quarter ofQ2 2025 due to a higher base of depreciable assets, including thefacility property,improvements, equipment,fleet enhancements, and technology upgrades, and finite-lived intangible assets from the Disdero acquisition. Our depreciation expense includes depreciation for owned assets and assets under finance leases.

Interest expense, net, which includes gross interest expense less gross interest income, was $9.1$9.4 million and $6.6$8.5 million in the fiscal first quarter ofQ2 2026 and fiscal first quarter ofQ2 2025, respectively, resulting in an increase in net interest expense of $2.6$0.9 million in the current fiscal quarter.

•Gross interest expense was $12.2$12.3 million and $12.1$12.6 million in the fiscal first quarter ofQ2 2026 and fiscal first quarter ofQ2 2025, respectively.

•Gross interest income was $3.1$2.9 million and $5.5$4.2 million infor the fiscal first quarter ofQ2 2026 and fiscal first quarter ofQ2 2025, respectively. This decrease in the current fiscal quarter was due primarily 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 fiscal first quarter of 2025 included $0.5 million on refunds from U.S. Customs for AD/CV import duties.

For fiscal 2026, we currently estimate that our annual effective income tax rate will be approximately 47%,35%, excluding discrete items. This estimate reflects nondeductible items and includes certain franchise taxes that are classified as income taxes under the provisions of ASC 740, Income Taxes. We recognized an income tax benefitprovision of $0.4$4.8 million for the fiscal three months ended April 4,Q2 2026, resulting in an effective income tax benefit rate of 20%42.9% that reflects discrete items. For the fiscal three months ended March 29,Q2 2025, we recognized income tax expense of $1.3$2.3 million, resulting in an effective income tax rate of 32%34.5% for the period.quarter. The effective income tax rates for both quarterly fiscal periods were impacted by the permanent addback to taxable income of certain nondeductible expenses, including meals and entertainment and certain employee compensation, as well as excess tax benefits or expenses realized from settlements of share-based compensation grants. The Company’s effective income tax rates will differ from the statutory rates by such items.

Our Net lossincome for the fiscal first quarter ofQ2 2026 was $1.5$6.4 million, or $0.18$0.81 lossearnings per basic and diluted share, versus $2.8$4.3 million, or $0.33$0.54 per basic and diluted share, infor the fiscal first quarter ofQ2 2025. These decreasesincreases in the current period were due primarily to the factors previously discussed in this Itemcomparison 2.of Q2 2026 to Q2 2025.