Short-term volatility has been a hallmark of the market in 2025, but one way investors may be able to bypass this concern is by adopting a longer time horizon for their investments. After all, the longer one is able to wait to reap the rewards of an investment, the greater the chance that the investment will manage to recoup any losses incurred in the near term. There are many ways investors can evaluate companies for long-term potential. One of the simplest, particularly for those who place some trust in W ...

BlueLinx Q4 and Full Year 2024 Results Delivering What Matters February 19, 2025 © BlueLinx 2025. All Rights Reserved. 1 Safe Harbor Statement This presentation contains forward-looking statements. Forward-looking statements include, without limitation, any statement that predicts, forecasts, indicates or implies future results, performance, liquidity levels or achievements, and may contain the words "believe," "anticipate," "could," "expect," "estimate," "intend," "may," "project," "plan," "should," "will, ...

Financial Data and Key Metrics Changes - For the full year 2024, the company generated net sales of $3 billion, a decrease of 6% from 2023, primarily due to specialty price deflation [42] - Adjusted EBITDA for 2024 was $131 million, representing a 4.4% adjusted EBITDA margin [43] - Net income for the year was $53 million, with diluted EPS at $6.19 per share [43] - The company reported liquidity of $852 million at the end of the year, including $506 million in cash [17][45] Business Line Data and Key Metrics Changes - Specialty products accounted for approximately 70% of net sales and 80% of gross profit for both Q4 and full year 2024 [11] - Specialty product sales were $484 million in Q4, down 1% year over year, while structural product sales were $227 million, up 1% [32][38] - Specialty gross margin was 18.4%, down 100 basis points from the previous year, while structural gross margin was 10.8%, up 20 basis points [36][39] Market Data and Key Metrics Changes - The company faced a challenging housing market with the lowest existing housing sales in thirty years and elevated interest rates impacting demand [21] - Builder sentiment fell due to concerns about tariffs and affordability issues, leading to expectations of flat to declining housing starts in 2025 [22][24] - Despite market challenges, the company reported low single-digit volume growth in specialty products year over year [10] Company Strategy and Development Direction - The company is focused on five high-margin specialty product categories: engineered wood, siding, millwork, industrial, and outdoor living products [10] - A digital transformation initiative is underway to enhance operational capabilities and customer experience, with a new e-commerce platform in pilot phase [13][14] - The company plans to open additional greenfield locations, with expectations of generating $40 million to $100 million in net sales at maturity [15][16] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about long-term prospects in the housing and building products sector despite near-term uncertainties [24][25] - The company is committed to gaining market share through strategic focus on national accounts and multifamily growth [24][26] - Management noted that while pricing remains volatile, there is hope for stabilization in specialty product pricing [28] Other Important Information - The company returned $45 million to shareholders in 2024 through share repurchases [18] - SG&A expenses increased by 10% in Q4 due to higher payroll and logistics costs [33] - The company anticipates a slight increase in SG&A levels for 2025 as it continues to invest in growth initiatives [43] Q&A Session Summary Question: Can you provide more color on the sequential improvement on specialty product pricing? - Management noted five quarters of sequential year-over-year growth in specialty products, indicating a targeted strategy is yielding results [56][58] Question: What are you hearing from channel partners regarding R and R demand expectations in 2025? - Management indicated that low existing home sales pressure repair and remodel activity, but they are focused on gaining share in this area [61][63] Question: What is the timeline for the full ramp of your e-commerce platform? - Management stated that the e-commerce platform is in a pilot phase and will be gradually enhanced over the coming years [66][68] Question: Can you provide an update on the Portland greenfield location? - Management mentioned that the Portland location is in its early stages, with a focus on ramping up capabilities and sales [82][86] Question: How might your strategy change if tariffs on Canada are implemented? - Management expressed confidence in their inventory management capabilities and indicated that they would adapt their strategy as needed [100][102] Question: What is the current status of vendor commitments for the Portland facility? - Management confirmed that vendor relationships are in place to support the product mix needed for the Portland facility [104][106] Question: Can you discuss the growth in your multifamily business? - Management highlighted a strategic focus on multifamily, with enhanced teams and capital allocation driving year-over-year growth [128][130]

Sales and Market Performance - Specialty products accounted for approximately 69% of net sales in fiscal 2024, compared to 65% in fiscal 2022, indicating a shift towards higher-margin categories [20]. - Warehouse and reload sales represented about 80% of net sales in fiscal 2024, while direct sales accounted for 20% [23][24]. - BlueLinx Holdings Inc. reported net sales of $2.95 billion for fiscal 2024, a decrease of $184 million, or 5.9%, compared to fiscal 2023 [161]. - Demand from the residential repair and remodel market accounts for approximately 45% of BlueLinx's annual sales [148]. - The residential new construction market, which includes single-family and multi-family units, represents about 40% of annual sales [150]. - Single-family housing starts increased by 7% in 2024 compared to 2023, while multi-family starts decreased by 27% [152]. - The average age of owner-occupied homes in the U.S. has increased to 40 years, driving demand for repair and remodel projects [149]. - The company anticipates that high levels of home equity and demographic shifts will support demand for its products despite macroeconomic challenges [147]. - Specialty products net sales decreased by $138.3 million, or 6.3%, to $2.0 billion in fiscal 2024, primarily due to price deflation [167]. - Structural products net sales decreased by $45.5 million, or 4.8%, to $907 million in fiscal 2024, mainly due to market-based price deflation [168]. Financial Performance - Gross profit for fiscal 2024 was $489.14 million, with a gross margin percentage of 16.6%, down from 16.8% in fiscal 2023 [161]. - Gross profit for specialty products decreased by $23.2 million to $397.6 million, while gross margin percentage increased to 19.4% in fiscal 2024 [167]. - Gross profit for structural products decreased by $14.7 million, or 14%, to $91.5 million, with gross margin percentage at 10.1%, down from 11.2% [168]. - Net income for fiscal 2024 was $53.1 million, or $6.19 per diluted share, compared to $48.5 million, or $5.39 per diluted share, in the prior year [173]. - SG&A expenses increased by 2.7%, or $9.7 million, in fiscal 2024, driven by higher payroll and logistics costs [169]. - Net cash provided by operating activities totaled $85.2 million for fiscal 2024, a decrease from $306.3 million in fiscal 2023 [177]. - Net cash used in investing activities was $39.2 million in fiscal 2024, primarily for capital expenditures [180]. - Net cash used in financing activities was $62.1 million for fiscal 2024, with $45.3 million for common stock repurchases [182]. - As of December 28, 2024, net working capital was $411.5 million, slightly down from $414.1 million as of December 30, 2023 [187]. Capital Structure and Investments - The company allocated $85.1 million in capital during fiscal 2024, with $40.1 million invested to improve operational performance and $45.0 million used for share repurchases [21]. - The company expects to maintain a disciplined capital structure while pursuing strategic investments to enhance its specialty products business and geographic reach [21]. - The company has authorized a share repurchase program for $100 million, with $53.5 million spent to repurchase 530,146 shares at an average price of $100.99 per share [138]. - As of December 28, 2024, the company has a remaining authorization amount of $46.5 million under the share repurchase program [138]. - The company completed a private offering of $300.0 million of senior secured notes due 2029, with a fixed interest rate of 6% [188]. - As of December 28, 2024, the available borrowing capacity under the revolving credit facility was $346.2 million [192]. - Total finance lease commitments increased from $285.4 million as of December 30, 2023, to $292.5 million as of December 28, 2024 [193]. Operational Efficiency and Challenges - The company plans to continue significant investments in upgrading its fleet, including electric forklifts and safety features, to enhance operational efficiency [30]. - The first and fourth quarters are typically lower volume periods due to unfavorable weather, while the second and third quarters see increased activity [31]. - The company faces challenges in effectively managing inventory relative to sales volume, which could negatively impact cash flows and operating results [66]. - Labor shortages, particularly among drivers and material handlers, may lead to increased costs and reduced productivity, adversely affecting growth and profitability [69]. - Approximately 20% of associates are represented by labor unions, with six collective bargaining agreements up for renewal in fiscal 2025 [26]. - The company is exposed to various federal, state, and local regulations that could impose substantial costs and restrictions, adversely affecting net income [82]. - Environmental regulations may require significant compliance costs, which could adversely impact financial condition and results of operations [86]. Market Risks and Competition - The company competes based on product breadth, availability, pricing, and service, with major competitors including Boise Cascade Company and Weyerhaeuser Company [33]. - Climate change poses risks such as supply chain disruptions and increased material costs, but could also lead to favorable weather patterns that boost construction demand [40]. - The company is significantly affected by adverse housing market conditions, which can lead to decreased consumer spending on home improvement projects, impacting liquidity and results of operations [46]. - The company relies heavily on the new residential construction market, particularly single-family home construction, which is influenced by factors such as interest rates and economic conditions [47]. - Credit extension to customers exposes the company to risks associated with their financial stability, particularly in unfavorable housing market conditions [48]. - Consolidation among competitors and suppliers may lead to increased competition and challenges in maintaining market share and operating margins [49]. - The company faces disintermediation risk as customers consolidate and may choose to purchase directly from suppliers, potentially impacting revenue [51]. - Dependence on international suppliers exposes the company to risks from tariffs and trade policy changes, which could increase product costs [53]. - Pricing and product cost variability can adversely affect financial results, as the company may struggle to pass on increased costs to customers [54]. - Earnings are highly dependent on sales volumes, which are influenced by the housing cycle and market conditions [57]. - The building products distribution industry is highly fragmented and competitive, with low barriers to entry for local competitors [58]. - Prolonged periods of weak demand or excess supply in the industry may lead to reduced net sales and margins, impacting overall financial health [60]. Debt and Financial Obligations - As of December 28, 2024, the company had approximately $300.0 million of debt outstanding under senior secured notes and $292.5 million in outstanding commitments under finance leases [91]. - The company’s level of indebtedness could limit its financial and operating activities, potentially exposing it to interest rate fluctuations due to variable interest rates on its revolving credit facility [92]. - The company has $50.6 million in net deferred tax assets, which may be impaired if future earnings do not support their realization [111]. - The company’s effective tax rate could be volatile, influenced by changes in the mix of earnings across jurisdictions and potential changes in tax legislation [112]. - Participation in multi-employer pension plans may lead to increased contributions due to underfunding issues [113]. - The company’s cash flows and capital resources may be insufficient to meet scheduled payments on its indebtedness, depending on economic conditions and industry demand factors [114]. - The company may incur additional debt in the future, which could increase the risks associated with its current indebtedness [98]. - The company has engaged in sale-leaseback transactions for distribution centers, which may increase its debt and interest expenses [99]. - The company’s ability to operate may be affected by covenants and restrictions in its debt agreements, limiting its operational flexibility [95]. Cybersecurity and Risk Management - The company has implemented a robust cybersecurity risk management program aligned with the National Institute of Standards and Technology Cybersecurity Framework [126]. - The company has not faced material adverse effects from cybersecurity threats as of the date of the report [130]. - The company has engaged external cybersecurity experts for incident response development and management [133]. Miscellaneous - The company recognizes revenue when the title to products is transferred to customers, typically upon shipment [199]. - The company is exposed to interest rate risk from fluctuations in variable-rate SOFR, affecting future refinancing terms [214]. - The company had no off-balance sheet arrangements other than short-term inventory commitments as of December 28, 2024 [195]. - The company may enter into derivative financial instruments to mitigate commodity price fluctuations, but had none in place as of December 28, 2024 [213].

Financial Performance - Fourth quarter 2024 net sales were $711 million, a decrease of $1.9 million, or 0.3% year-over-year[5] - Gross profit for the fourth quarter was $113 million, down $5.1 million, or 4.3%, with a gross margin of 15.9%[5] - Full year 2024 net sales were $3.0 billion, a decrease of $183.8 million, or 5.9% year-over-year[11] - Full year gross profit was $489.1 million, down $37.9 million, or 7.2%, with a gross margin of 16.6%[11] - Net sales for the fiscal quarter ended December 28, 2024, were $710,637,000, a decrease of 0.1% compared to $712,529,000 for the same quarter in the previous year[41] - Total net sales for the fiscal quarter ended December 28, 2024, were $710,637,000, a slight decrease of 0.3% compared to $712,529,000 for the same quarter in 2023[48] - Specialty products net sales for the fiscal year ended December 28, 2024, were $2,045,910,000, a decrease of 6.3% from $2,184,240,000 in 2023[48] Profitability - Net income for the fourth quarter was $5.3 million, or $0.62 per diluted share, compared to a net loss of $18.1 million in the prior year[9] - Adjusted EBITDA for the fourth quarter was $22 million, or 3.0% of net sales[5] - Operating income decreased to $12,030,000 for the fiscal quarter, compared to $27,185,000 in the same quarter last year[41] - Net income for the fiscal quarter was $5,272,000, a significant recovery from a net loss of $18,124,000 in the prior year[41] - Adjusted EBITDA for the fiscal year ended December 28, 2024, was $131,356,000, down from $182,804,000 in the previous year[50] - Adjusted net income (non-GAAP) for the fiscal year ended December 28, 2024, was $55,232 thousand, down from $102,627 thousand in the previous year[52] - Adjusted EBITDA margin (non-GAAP) for the fiscal quarter ended December 28, 2024, was 3.0%, compared to 5.1% for the same quarter in the previous year[52] Expenses and Cash Flow - Total operating expenses increased to $101,315,000 for the fiscal quarter, up from $91,244,000 in the previous year[41] - Interest expense for the fiscal quarter was $5,320,000, compared to $4,171,000 in the same quarter last year[41] - The company reported a cash flow from operating activities of $18,744,000 for the fiscal quarter ended December 28, 2024, compared to $75,861,000 in the same quarter of 2023[46] - Free cash flow (non-GAAP) for the fiscal year ended December 28, 2024, was $45,069 thousand, down from $278,765 thousand in the previous year[54] Liquidity and Debt - Available liquidity as of December 28, 2024, was $852 million, including $506 million in cash and cash equivalents[19] - The company’s long-term debt stood at $295,061,000 as of December 28, 2024, slightly up from $293,743,000 in the previous year[44] - Net Debt as of December 28, 2024, was $86,921 thousand, an increase from $63,683 thousand as of December 30, 2023[54] - Net Leverage Ratio as of December 28, 2024, was 0.7x, compared to 0.3x as of December 30, 2023[54] Shareholder Actions - The company plans to continue opportunistic share repurchases, with $46.5 million remaining under its $100 million authorization[18] - Basic earnings per share for the fiscal quarter ended December 28, 2024, were $0.63, compared to a loss of $2.08 in the same quarter last year[52] - Weighted average shares outstanding - Basic for the fiscal year ended December 28, 2024, were 8,531 thousand, down from 8,987 thousand in the previous year[52] Asset and Liability Overview - Total assets increased to $1,577,717,000 as of December 28, 2024, compared to $1,537,601,000 as of December 30, 2023[44] - Total liabilities rose to $931,276,000, up from $903,315,000 in the previous year[44] Operational Efficiency - The company emphasizes the importance of non-GAAP measures like Adjusted EBITDA and Free Cash Flow to provide a clearer picture of financial performance[29] - The company reported an Adjusted EBITDA margin of 4.9% for the fiscal quarter, reflecting operational efficiency challenges[33] - Cash and cash equivalents at the end of the period were $505,622,000, a decrease from $521,743,000 at the end of the previous fiscal year[46] - The company reported a pension settlement and withdrawal cost adjustment of $(2,481) thousand for the fiscal year ended December 28, 2024[52]

Financial Data and Key Metrics Changes - The company generated net sales of $747 million, a decrease of 8% year-over-year, with adjusted EBITDA of $36.6 million, resulting in a 4.9% adjusted EBITDA margin [12][25] - Adjusted net income was $16.7 million or $1.95 per share, while net income was $16 million or $1.87 per share [27][12] - Total gross profit was $126 million, with a gross margin of 16.8%, down 40 basis points from the prior period [25] Business Line Data and Key Metrics Changes - Specialty products accounted for approximately 70% of net sales, with revenues declining 7% year-over-year due to price deflation [13][28] - Specialty gross margin was 19.4%, down 40 basis points from last year, while structural product revenues declined 9% due to significant price deflation [14][30] - Structural products generated net sales of $228 million, with a gross margin of 11%, down 30 basis points from the same period last year [30] Market Data and Key Metrics Changes - The U.S. housing market remains volatile, with total housing starts at an adjusted annual rate of 1.35 million, down 0.5% from August and down 0.7% year-over-year [19] - Existing home sales have sunk to their lowest levels in 30 years, impacting repair and remodel activity [21] - The turnover rate for homes is only 2.5%, the lowest level in over 30 years, indicating a weak sales velocity [21] Company Strategy and Development Direction - The company is focused on growing key specialty product categories at a higher rate than structural products, aiming for a shift in product mix over the next several years [8] - Digital transformation efforts are on track, with Phase 1 expected to be completed by Q3 2025, enhancing operational and commercial capabilities [9] - The company is exploring greenfield and M&A opportunities to expand geographic reach and support specialty product sales growth [10] Management's Comments on Operating Environment and Future Outlook - Management noted that low existing home turnover and home affordability issues are hindering the housing market recovery [16] - The Federal Reserve's interest rate positioning is critical for the housing recovery, with current mortgage rates above 6.5% [17][18] - Management believes sustained reductions in interest rates are necessary to support a long-term housing recovery, expected to begin in the back half of 2025 [18] Other Important Information - The company repurchased $15 million in shares during the third quarter, totaling over $138 million since the beginning of 2022 [16] - The financial position remains strong, with cash on hand of $526 million and available liquidity of approximately $873 million at the end of the quarter [32] Q&A Session Summary Question: What drove the positive volume growth in Specialty Products? - Management attributed the growth to a strong focus on share gain strategies, particularly in national accounts and multifamily sectors, along with some seasonal benefits [38] Question: Have there been any sequential moderation of price declines in key specialty categories? - Management noted a slight sequential improvement in pricing for specialty products in the first four weeks of Q4, indicating confidence in future pricing improvements [39] Question: What is the outlook for structural margins given recent price dynamics? - Management indicated that structural margins improved due to a normalization of inventory levels and a better balance in supply and demand [40][41] Question: Can you provide an update on the competitive landscape? - Management highlighted solid performance in the East region and noted that private-label products help weather competitive pressures [44][45] Question: What happens if interest rates do not decrease? - Management emphasized a focus on greenfield opportunities and maintaining a disciplined approach to inventory management to navigate market dynamics [49][50] Question: How is inventory management being handled in growth specialty categories? - Management stated that inventory is managed to specific turn day targets to support customer demands, ensuring optimal stocking positions [60]

BlueLinx Q3 2024 Results Delivering What Matters October 30, 2024 BLUELINX © BlueLinx 2024. All Rights Reserved. 1 Safe Harbor Statement This presentation contains forward-looking statements. Forward-looking statements include, without limitation, any statement that predicts, forecasts, indicates or implies future results, performance, liquidity levels or achievements, and may contain the words "believe," "anticipate," "could", "expect," "estimate," "intend," "may", "project," "plan," "should", "will", "wil ...

Financial Performance - Net sales for Q3 2024 were $747 million, a decrease of $63 million, or 8% compared to Q3 2023[3] - Adjusted Net Income for the three months ended September 28, 2024, was $16,016,000, compared to $24,382,000 for the same period in 2023, representing a decrease of 34.3%[31] - Adjusted Earnings Per Share (diluted) for the three months ended September 28, 2024, was $1.87, down from $2.71 in the prior year, a decline of 30.9%[31] - Net income for the three months ended September 28, 2024, was $16,016,000, a decrease from $24,382,000 for the same period in 2023, representing a decline of 34.5%[38] - Adjusted net income for the three months ended September 28, 2024, was $16,656,000, down 37.8% from $26,764,000 in the prior year[42] - Basic EPS for the three months ended September 28, 2024, was $1.88, a decline of 30.9% from $2.72 in the same quarter last year[42] Revenue and Sales - Specialty products net sales were $519 million, a decrease of $40 million, or 7.1% year-over-year, with a gross margin of 19.4%[4] - Structural products net sales decreased by $23 million, or 9.1%, to $228 million, with a gross margin of 11.0%[5] - Total net sales for the three months ended September 28, 2024, were $747,288,000, down 7.7% from $809,981,000 in the prior year[37] - Specialty products net sales for the three months ended September 28, 2024, were $519,000,000, down 7.1% from $558,851,000 in the same period last year[37] - Structural products net sales for the three months ended September 28, 2024, were $228,288,000, a decrease of 9.1% from $251,130,000 in the prior year[37] Profitability - Gross profit was $126 million, down $14 million, or 10% year-over-year, with a gross margin of 16.8%, a decline of 40 basis points from the previous year[3] - Gross profit for the three months ended September 28, 2024, was $125,669,000, down 9.8% from $139,246,000 in the prior year, with a gross margin of 16.8%[31] - The company reported a gross margin of 16.8% for the three months ended September 28, 2024, compared to 17.2% in the same period last year[37] Cash Flow and Debt - Operating cash flow was $62 million, and free cash flow was $54 million, driven by net income and improved working capital[11] - Free cash flow for the three months ended September 28, 2024, was $53,837,000, a decrease of 26.0% compared to $72,707,000 for the same period in 2023[46] - Total debt was $351 million, with a net leverage ratio of (1.2x) based on trailing twelve-month Adjusted EBITDA of $146 million[13] - Total debt and finance leases as of September 28, 2024, amounted to $593,810,000, an increase from $585,426,000 as of December 30, 2023[45] - Net debt as of September 28, 2024, was $67,529,000, compared to $63,683,000 as of December 30, 2023[45] - Net leverage ratio as of September 28, 2024, was 0.5x, up from 0.3x as of December 30, 2023[45] Expenses - SG&A expenses were $92 million, an increase of $1 million year-over-year, primarily due to higher technology expenses[8] - Total operating expenses for the three months ended September 28, 2024, were $101,644,000, an increase of 2.1% compared to $99,590,000 in the same period last year[31] Future Outlook - For Q4 2024, specialty product gross margin is expected to be in the range of 18% to 19%[14] Inventory and Assets - The company reported a decrease in inventories, netting $340,541,000 as of September 28, 2024, compared to $343,638,000 in the previous quarter[33] - Total assets increased to $1,611,079,000 as of September 28, 2024, from $1,537,601,000 at the end of the previous quarter, reflecting growth in the company's asset base[33]

Financial Data and Key Metrics Changes - The company reported net sales of $768 million, a decrease of 6% year-over-year, with total gross profit at $122 million and a gross margin of 15.9%, down 70 basis points from the prior period [15][17] - Adjusted EBITDA was $34 million, representing a 4.5% margin on net sales, while adjusted net income was $15 million, or $1.68 per share [7][17] - Specialty Products accounted for approximately 70% of net sales and about 85% of gross profits for the second quarter [7] Business Line Data and Key Metrics Changes - Specialty product revenues declined 6% year-over-year due to price deflation, with gross profit from specialty product sales at $104 million, down 4% year-over-year, and specialty gross margin at 19.3%, up 20 basis points from last year [8][18] - Structural product revenues decreased 7% year-over-year, with gross profit from structural products at $18 million, a decrease of 33% year-over-year, and structural gross margin at 7.9%, down from 11% in the same period last year [9][18] Market Data and Key Metrics Changes - The U.S. housing market remains volatile, with June housing starts at an adjusted annual rate of 1.35 million, up 3% from May but down 4.4% year-over-year [12] - Builder confidence has declined, with the index dropping from 51 in April to 42 in July, reflecting negative sentiment regarding anticipated building activity [12][14] Company Strategy and Development Direction - The company is focused on modernizing its business with new technology, including re-architecting data, launching an e-commerce solution, and implementing a transportation management system [6] - The strategy includes growing key specialty product categories at a higher rate than structural products and exploring M&A and Greenfield opportunities to expand geographic reach [7][10] Management Comments on Operating Environment and Future Outlook - Management expressed optimism for a recovery in the housing market in 2025, contingent on interest rate cuts and stabilization of mortgage rates [11][33] - The company anticipates continued price deflation in specialty products through the end of 2024, with expectations for improvement in 2025 [27][28] Other Important Information - The company repurchased $15 million in stock during the second quarter, totaling over $120 million since the beginning of 2022, demonstrating a commitment to returning capital to shareholders [10][22] - The liquidity position remains strong, with cash on hand at $491 million and total available liquidity of $838 million [20] Q&A Session Summary Question: Could you provide any more color on the cadence for specialty products' volume growth? - Management indicated that specialty volumes were down low-single-digits sequentially, while structural volumes were up double digits as the quarter began [25][26] Question: What was specialty products pricing in the second quarter? - Specialty gross profit was down 6%, implying high-to-mid-single-digit price deflation, with expectations for continued negative pricing comps into Q3 and Q4 [27][28] Question: How are conversations with customers progressing regarding recovery? - Management noted that the remainder of the year is expected to be soft, with meaningful recovery anticipated in 2025, contingent on further interest rate cuts [33][34] Question: How do you view the balance between M&A opportunities, share repurchases, and Greenfield initiatives? - Management stated that both M&A and Greenfield opportunities are actively pursued, with a focus on high-return investments [43][44] Question: Are there any specialty product categories with elevated inventory levels? - Management confirmed efficient inventory management in structural products, with no significant channel issues in specialty products [60][61]

Financial Performance - Net sales for the three months ended June 29, 2024, were $768,363, a decrease of 5.8% from $815,967 for the same period last year[5] - Gross profit for the three months ended June 29, 2024, was $122,444, down 9.8% from $135,803 in the prior year, resulting in a gross margin of 15.9%[5] - Operating income decreased to $23,847 for the three months ended June 29, 2024, compared to $39,093 in the same period last year[5] - Net income for the three months ended June 29, 2024, was $14,336, a decline of 41.3% from $24,466 in the prior year[5] - Adjusted EBITDA for the three months ended June 29, 2024, was $34,395, with an Adjusted EBITDA margin of 4.5%, compared to 6.0% in the same period last year[14] - Adjusted net income for Q2 2024 was $15 million, or $1.68 adjusted diluted earnings per share, compared to $26 million, or $2.91 per diluted share in the prior year[49] - Net income for the second quarter of 2024 was $14 million, translating to a diluted earnings per share of $1.65[55] Cash Flow and Liquidity - Free cash flow for the six months ended June 29, 2024, was $(7,233), compared to $139,079 for the same period last year[1] - Cash flows from operating activities for the three months ended June 29, 2024, were $35,803, down from $64,153 in the same period last year[9] - Free cash flow generated during the second quarter was $29 million, with net cash from operating activities amounting to $36 million[56] - The company ended the second quarter with $491 million in cash on hand and a net leverage ratio of (0.9x)[55] Sales Breakdown - Specialty products net sales were $539,466 for the three months ended June 29, 2024, compared to $570,990 in the prior year, reflecting a decrease of 5.5%[10] - Structural products net sales were $228,897 for the three months ended June 29, 2024, down from $244,977 in the same period last year, a decrease of 6.6%[10] - Net sales of specialty products decreased by $32 million, or 5.5%, to $539 million in Q2 2024, while gross profit from specialty products was $104 million, a decrease of $4 million, or 4.1%[48] Assets and Liabilities - Total current assets increased to $1,158,722 as of June 29, 2024, from $1,120,399 at the end of December 30, 2023[26] - Total liabilities rose to $933,744 as of June 29, 2024, compared to $903,315 at the end of December 30, 2023[26] - The company had cash and cash equivalents of $491,392 at the end of the period, an increase from $418,325 at the end of the previous year[9] - Cash and cash equivalents decreased to $491,392 as of June 29, 2024, from $521,743 at the end of December 30, 2023[26] - The company has a total stockholders' equity of $652,332 as of June 29, 2024, compared to $634,286 at the end of December 30, 2023[26] Debt and Financing - Total debt and finance lease obligations, excluding real property finance lease obligations, was $348 million as of June 29, 2024[40] - Net debt was ($143) million, resulting in a net leverage ratio of (0.9x) using trailing twelve-month adjusted EBITDA of $160 million[40] - Interest expense for the three months ended June 29, 2024, was $4,801, down from $6,311 in the same period last year[13] Shareholder Returns - The company repurchased approximately $15 million of its common stock during the quarter, with $76 million remaining under its share repurchase authorization[50] - The company emphasizes its commitment to returning capital to shareholders through its share repurchase program[55] Market and Operational Environment - The forward-looking statements include potential risks related to housing market conditions and competition, which may impact future performance[57] - The company operates in a changing environment with inherent uncertainties that could affect its business strategy and results[57] - Effective inventory management and the ability to attract and retain qualified personnel are critical for the company's operational success[57] - The company is focused on maintaining strong cash flows and managing its debt levels effectively[57]