BlueLinx (BXC) - 2019 Q4 - Annual Report

PART I ITEM 1. BUSINESS BlueLinx is a leading U.S. distributor of building and industrial products, offering value-added services, managing debt, and operating in a competitive, seasonal market - BlueLinx is a leading distributor of building and industrial products in the U.S., headquartered in Georgia, serving major metropolitan areas through a broad network of distribution centers[14] - In 2019, the company completed real estate financing transactions (sale-leaseback) on two distribution facilities, generating $45.0 million in gross proceeds, used to repay indebtedness; an additional $78.3 million was raised from fourteen facilities for debt repayment subsequent to fiscal 2019[16][17] - A voluntary lump sum payment option was offered to certain qualified former employees of the BlueLinx Corporation Hourly Pension Plan, totaling $9.7 million, which decreased the projected benefit obligation by approximately $12.2 million[18] Net Sales by Product Category (Fiscal 2019 vs. 2018) | Product Category | Fiscal 2019 Net Sales | Fiscal 2018 Net Sales | | :--------------- | :-------------------- | :-------------------- | | Structural Products | 33% | 36% | | Specialty Products | 67% | 64% | - The company provides value-added services such as less-than-truckload delivery, pre-negotiated program pricing, inventory stocking, automated order processing (EDI), intermodal distribution, milling and fabrication, and backhaul services[21][22][23] Gross Sales by Distribution Channel (Fiscal 2019 & 2018) | Distribution Channel | % of Gross Sales | | :----------------- | :--------------- | | Warehouse and Reload | 82% | | Direct Sales | 18% | - The company operates in a highly fragmented and competitive U.S. building products distribution market, competing on product offering breadth, availability, price, quality, reputation, service, and distribution facility location[27] - The business is exposed to seasonal fluctuations, with the first and fourth quarters typically being the slowest due to weather, and the second and third quarters being the strongest[29] - As of December 28, 2019, BlueLinx employed approximately 2,200 employees, with about 20% covered by collective bargaining agreements, three of which are up for renewal in fiscal 2020[30] - The company is subject to various federal, state, provincial, and local environmental, health and safety (OSHA), and transportation (DOT, FMCSA) regulations, incurring costs for compliance[38][41][42][43] ITEM 1A. RISK FACTORS The company faces significant risks from acquisition integration, substantial debt, commodity price volatility, housing market downturns, supply chain disruptions, intense competition, and various operational, legal, and financial liabilities - Operational disruption from integrating acquisitions, such as Cedar Creek, can lead to increased costs, service deficiencies, and loss of customers or suppliers[48][49] - The company's substantial indebtedness ($327 million under revolving credit, $147 million under term loan as of Dec 28, 2019) could limit financial and operating activities, expose it to interest rate fluctuations, and require a significant portion of cash flow for debt payments[51] - Fluctuations in commodity prices (e.g., oriented strand board, plywood, lumber, rebar) can significantly impact operating results, with falling prices generally reducing revenues and margins[68][69] - Adverse housing market conditions, particularly in new residential construction, and decreased residential repair and remodel activity, can negatively impact business, liquidity, and increase credit risk from customers[70][71][72][75] - The company faces disintermediation risk, where customers or suppliers may bypass BlueLinx to deal directly with manufacturers or end-customers, impacting business and margins[76] - The rapid spread of contagious illnesses, like the coronavirus reported in December 2019, could disrupt the global supply chain, impacting product sourcing and demand, and adversely affecting financial condition[86] - The highly fragmented and competitive industry, along with consolidation among competitors and customers, could lead to reduced net sales, operating results, and pricing pressures[87][88][89][90][91][93] - Future operating results may fluctuate significantly due to factors like commodity price movements, economic conditions, supply chain disruptions, and integration challenges, potentially affecting stock price[96][97][98] - The company has sold and leased back distribution centers, resulting in finance leases that may increase debt and interest expense, and faces risks if unable to renew leases or monetize remaining real estate assets[101][102][103][104][105][106] - Exposure to product liability and other claims, information technology security risks, and business interruption risks from natural disasters or unexpected events could lead to significant losses[107][108][110][114][115][116][120] - Changes in product mix, particularly a shift to lower-margin categories, could adversely affect gross margins and profitability[111] - Increases in petroleum prices could adversely affect operations if the company is unable to fully offset higher fuel costs through increased prices or surcharges[113] - The company's ability to utilize net operating loss carryovers may be limited by ownership changes (e.g., Section 382), potentially requiring earlier payment of federal income taxes[128][129][130] - Costs and liabilities related to participation in multi-employer pension plans, especially the significantly underfunded Central States Plan, could increase, with an estimated complete withdrawal liability of $51.1 million for fiscal 2020[133][134][135][137][138] - Success depends on attracting and retaining qualified employees, particularly drivers and material handlers, and the loss of key management could adversely affect the company[139][140][141][142] - Changes in accounting principles (e.g., lease accounting) or their interpretation could significantly alter reported financial results[151][152] ITEM 1B. UNRESOLVED STAFF COMMENTS The company has no unresolved staff comments from the SEC - There are no unresolved staff comments[161] ITEM 2. PROPERTIES BlueLinx operates 64 facilities, primarily leased, totaling 11.2 million sq. ft., with 3 owned facilities designated as held for sale - BlueLinx operates 64 office and warehouse facilities, with 54 leased and 10 owned[161] Real Estate Facilities as of March 1, 2020 | Property Type | Number | Owned Facilities (sq. ft.) | Leased Facilities (sq. ft.) | | :--------------------------- | :----- | :------------------------- | :-------------------------- | | Office Space | 1 | — | 68,023 | | Warehouses and other real property | 67 | 1,451,861 | 9,630,915 | | TOTAL | 68 | 1,451,861 | 9,698,938 | - Owned warehouse facilities in Birmingham, Alabama; Grand Rapids, Michigan; and Tulsa, Oklahoma were designated as held for sale as of December 28, 2019[161] ITEM 3. LEGAL PROCEEDINGS The company is involved in routine legal proceedings, with outcomes not expected to materially affect financial condition, operating results, or cash flows - The company is a party to routine legal proceedings, but the outcome is not expected to have a material adverse effect on financial condition, operating results, or cash flows[163] ITEM 4. MINE SAFETY DISCLOSURES The company has no disclosures regarding mine safety - Not applicable[168] PART II ITEM 5. Market for Registrant's Common Equity, Related Stockholder Matters, and Issuer Purchases of Equity Securities BlueLinx common stock (BXC) trades on NYSE, with 9 record and 2,543 beneficial owners, no cash dividends paid due to loan restrictions, and minimal share repurchases for tax obligations - BlueLinx common stock is traded on the New York Stock Exchange under the symbol 'BXC'[171] - As of December 28, 2019, there were 9 shareowner accounts of record and an estimated 2,543 beneficial owners[171] - The company does not pay dividends on its common stock, and any future payments are subject to Board discretion and contractual restrictions under its revolving credit and term loan facilities[172] Common Stock Repurchase Activity (Q4 2019) | Period | Total Number Shares Purchased | Average Price Per Share | | :------------------------- | :-------------------------------- | :---------------------- | | September 29 - November 2, 2019 | — | — | | November 3 - November 30, 2019 | — | — | | December 1 - December 28, 2019 | 373 | $10.27 | | Total | 373 | | - All share purchases were in connection with tax withholding obligations of employees upon the vesting of restricted stock unit awards[172] ITEM 6. Selected Financial Data As a smaller reporting company, BlueLinx is not required to provide selected financial data - As a smaller reporting company, BlueLinx is not required to provide selected financial data[173] ITEM 7. Management's Discussion and Analysis of Financial Condition and Results of Operations BlueLinx's net sales decreased by 7.9% to $2.6 billion in fiscal 2019, yet gross profit improved to $356.9 million (13.5% margin), resulting in a reduced net loss of $17.7 million, with liquidity managed through operations, credit facilities, and real estate transactions - BlueLinx is a leading distributor of building and industrial products in the U.S., offering value-added services and solutions to customers and suppliers[177] - The company amended its Term Loan Facility in October 2019 and February 2020 to permit real estate sale-leaseback transactions and modify the 'Total Net Leverage Ratio' covenant, with the principal balance level satisfied by January 31, 2020[180][181] - The Revolving Credit Facility was amended in January 2020 to adjust the 'Seasonal Period' and extend the 'Cash Dominion Event' measurement period, better aligning with business seasonality[182] - Real estate financing transactions through sale-leaseback arrangements generated $45.0 million in gross proceeds in Q2 2019, and an additional $78.3 million in late 2019 and early 2020, with net proceeds used to reduce the Term Loan Facility balance[184][185] - U.S. housing market improvement is expected to continue long-term, but commodity pricing trends, particularly for wood panels, negatively impacted financial results in fiscal 2019[186][187] Results of Operations (Fiscal 2019 vs. Fiscal 2018) | Metric | Fiscal 2019 (in thousands) | % of Net Sales (2019) | Fiscal 2018 (in thousands) | % of Net Sales (2018) | | :-------------------------------------- | :------------------------- | :-------------------- | :------------------------- | :-------------------- | | Net sales | $2,637,268 | 100.0% | $2,862,850 | 100.0% | | Gross profit | $356,915 | 13.5% | $331,854 | 11.6% | | Selling, general, and administrative | $304,611 | 11.6% | $319,314 | 11.2% | | Gains from sales of property | $(13,082) | (0.5)% | — | —% | | Depreciation and amortization | $30,232 | 1.1% | $25,826 | 0.9% | | Operating income (loss) | $35,154 | 1.3% | $(13,286) | (0.5)% | | Interest expense, net | $54,218 | 2.1% | $47,301 | 1.7% | | Other expense (income), net | $2,544 | 0.1% | $(380) | —% | | Loss before benefit from income taxes | $(21,608) | (0.8)% | $(60,207) | (2.1)% | | Benefit from income taxes | $(3,952) | (0.1)% | $(12,154) | (0.4)% | | Net loss | $(17,656) | (0.7)% | $(48,053) | (1.7)% | Net Sales by Product Category (Fiscal 2019 vs. 2018) | Sales by category | Fiscal 2019 (In thousands) | Fiscal 2018 (In thousands) | | :------------------ | :------------------------- | :------------------------- | | Structural products | $862,270 | $1,044,348 | | Specialty products | $1,774,998 | $1,818,502 | | Total sales | $2,637,268 | $2,862,850 | Gross Profit and Margin by Product Category (Fiscal 2019 vs. 2018) | Metric | Fiscal 2019 (In thousands) | Fiscal 2018 (In thousands) | | :------------------------- | :------------------------- | :------------------------- | | Gross Profit $ by category | | | | Structural products | $75,072 | $73,047 | | Specialty products | $281,843 | $270,846 | | (1) Inventory adjustments | — | $(12,039) | | Total gross profit | $356,915 | $331,854 | | Gross margin % by category | | | | Structural products | 8.7% | 7.0% | | Specialty products | 15.9% | 14.9% | | Total gross margin % | 13.5% | 11.6% | - Net sales decreased by 7.9% ($0.2 billion) in fiscal 2019 due to declines in wood-based commodity prices and supplier/sales disruptions from the Cedar Creek integration, partially offset by the full-year inclusion of Cedar Creek's sales[198] - Gross profit increased to $356.9 million (13.5% margin) in fiscal 2019, up from $331.9 million (11.6% margin) in fiscal 2018, driven by greater commodity price stability, efficiencies, and cost savings from the Cedar Creek integration[199] - SG&A expenses decreased by $14.7 million to $304.6 million in fiscal 2019, primarily due to lower transaction-related expenses from the Cedar Creek acquisition, consolidation of overlapping locations, and reduced operating costs[200] - The company recognized $13.1 million in gains from property sales in fiscal 2019, with deferred gains from 2018 sale-leasebacks amortized as a credit to SG&A[201] - Interest expense increased by $6.9 million to $54.2 million in fiscal 2019, mainly due to a higher average debt balance following the Cedar Creek acquisition[203] - Cash flows used in operating activities totaled $9.6 million in fiscal 2019, primarily due to a net loss and changes in working capital, contrasting with $41.6 million provided in fiscal 2018[209][210] - Net cash provided by investing activities was $21.1 million in fiscal 2019, driven by property sales and cash from the Cedar Creek acquisition escrow, a significant shift from $242.7 million used in fiscal 2018 for the Cedar Creek acquisition[211][212] - Net cash used in financing activities was $8.9 million in fiscal 2019, reflecting term loan and revolving credit facility repayments, partially offset by real estate financing proceeds[213] Operating Working Capital (Fiscal 2019 vs. 2018) | Metric | December 28, 2019 (In thousands) | December 29, 2018 (In thousands) | | :------------------------ | :------------------------------- | :------------------------------- | | Total current assets | $578,039 | $599,853 | | Total current liabilities | $171,123 | $196,768 | | Operating working capital | $409,092 | $404,821 | - Operating working capital increased to $409.1 million as of December 28, 2019, from $404.8 million in 2018, primarily due to decreases in accounts payable and other current liabilities, partially offset by decreases in receivables and other current assets[217] Long-Term Debt (Fiscal 2019 vs. 2018) | Debt Type | Maturity Date | December 28, 2019 (In thousands) | December 29, 2018 (In thousands) | | :-------------------- | :------------ | :------------------------------- | :------------------------------- | | Revolving Credit Facility | Oct 10, 2022 | $322,041 | $327,319 | | Term Loan Facility | Oct 13, 2023 | $138,574 | $172,356 | | Total debt | | $460,615 | $499,675 | | Less: current portion | | $(2,176) | $(1,736) | | Long-term debt, net | | $458,439 | $497,939 | - As of December 28, 2019, outstanding borrowings under the Revolving Credit Facility were $326.5 million with $80.0 million excess availability and a 3.9% weighted average interest rate[223] - As of December 28, 2019, outstanding borrowings under the Term Loan Facility were $146.7 million with a stated interest rate of 8.7%[230] - The company's critical accounting policies include revenue recognition, defined benefit pension plan, and income taxes, which involve significant management estimates and assumptions[235][236][237] ITEM 7A. Quantitative and Qualitative Disclosures about Market Risk As a smaller reporting company, BlueLinx is not required to provide quantitative and qualitative disclosures about market risk - As a smaller reporting company, BlueLinx is not required to provide quantitative and qualitative disclosures about market risk[249] ITEM 8. Financial Statements and Supplementary Data This section provides audited consolidated financial statements for fiscal years 2019 and 2018, including balance sheets, statements of operations, cash flows, and equity, with detailed notes on accounting policies, acquisitions, debt, and other financial disclosures - The consolidated financial statements for BlueLinx Holdings Inc. and subsidiaries for the fiscal years ended December 28, 2019, and December 29, 2018, have been audited and present fairly the financial position, results of operations, and cash flows[254] Consolidated Balance Sheets (as of December 28, 2019, and December 29, 2018) | ASSETS | December 28, 2019 (In thousands) | December 29, 2018 (In thousands) | | :------------------------------------------------------------------------------------------------------------------------------------------------------------ | :------------------------------- | :------------------------------- | | Current assets: | | | | Cash | $11,643 | $8,939 | | Receivables, less allowances of $3,236 and $3,656, respectively | 192,872 | 208,434 | | Inventories, net | 345,806 | 341,851 | | Other current assets | 27,718 | 40,629 | | Total current assets | $578,039 | $599,853 | | Property and equipment, net | 195,768 | 205,113 | | Operating lease right-of-use assets | 54,408 | — | | Goodwill | 47,772 | 47,772 | | Intangible assets, net | 26,384 | 35,222 | | Deferred tax assets | 53,993 | 52,645 | | Other non-current assets | 15,061 | 19,284 | | Total assets | $971,425 | $959,889 | | LIABILITIES AND STOCKHOLDERS' DEFICIT | | | | Current liabilities: | | | | Accounts payable | $132,348 | $149,188 | | Accrued compensation | 7,639 | 7,974 | | Current maturities of long-term debt, net of discount and debt issuance costs of $74 and $64, respectively | 2,176 | 1,736 | | Finance leases - short-term | 6,385 | 7,555 | | Real estate deferred gains - short-term | 3,935 | 5,330 | | Operating lease liabilities - short-term | 7,317 | — | | Other current liabilities | 11,323 | 24,985 | | Total current liabilities | $171,123 | $196,768 | | Non-current liabilities: | | | | Long-term debt, net of discount and debt issuance costs of $12,481 and $12,665, respectively | 458,439 | 497,939 | | Finance leases - long-term | 146,611 | 143,486 | | Real estate financing obligation | 44,914 | — | | Real estate deferred gains - long-term | 81,886 | 86,011 | | Operating lease liabilities - long-term | 47,091 | — | | Pension benefit obligation | 23,420 | 26,668 | | Other non-current liabilities | 24,024 | 23,680 | | Total liabilities | $997,508 | $974,552 | | STOCKHOLDERS' DEFICIT | | | | Common Stock, $0.01 par value, Authorized - 20,000,000 shares, Issued and Outstanding - 9,365,768 and 9,293,794, respectively | 94 | 92 | | Additional paid-in capital | 260,974 | 258,596 | | Accumulated other comprehensive loss | (34,563) | (37,129) | | Accumulated stockholders' deficit | (252,588) | (236,222) | | Total liabilities and stockholders' deficit | $971,425 | $959,889 | Consolidated Statements of Operations and Comprehensive Loss (Fiscal 2019 vs. 2018) | Metric | Fiscal Year Ended December 28, 2019 (In thousands) | Fiscal Year Ended December 29, 2018 (In thousands) | | :------------------------------------------- | :------------------------------------------------- | :------------------------------------------------- | | Net sales | $2,637,268 | $2,862,850 | | Cost of sales | 2,280,353 | 2,530,996 | | Gross profit | 356,915 | 331,854 | | Operating expenses: | | | | Selling, general, and administrative | 304,611 | 319,314 | | Gains from sales of property | (13,082) | — | | Depreciation and amortization | 30,232 | 25,826 | | Total operating expenses | 321,761 | 345,140 | | Operating income (loss) | 35,154 | (13,286) | | Non-operating expenses (income): | | | | Interest expense | 54,218 | 47,301 | | Other expense (income), net | 2,544 | (380) | | Loss before benefit from income taxes | (21,608) | (60,207) | | Benefit from income taxes | (3,952) | (12,154) | | Net loss | $(17,656) | $(48,053) | | Basic loss per share | $(1.89) | $(5.21) | | Diluted loss per share | $(1.89) | $(5.21) | | Comprehensive loss: | | | | Net loss | $(17,656) | $(48,053) | | Other comprehensive income (loss): | | | | Foreign currency translation, net of tax | 6 | (14) | | Amortization of unrecognized pension gain (loss), net of tax | 2,560 | (608) | | Total other comprehensive income (loss) | 2,566 | (622) | | Comprehensive loss | $(15,090) | $(48,675) | Consolidated Statements of Cash Flows (Fiscal 2019 vs. 2018) | Cash Flow Activity | Fiscal Year Ended December 28, 2019 (In thousands) | Fiscal Year Ended December 29, 2018 (In thousands) | | :------------------------------------------------ | :------------------------------------------------- | :------------------------------------------------- | | Net cash (used in) provided by operating activities | $(9,565) | $41,556 | | Net cash provided by (used in) investing activities | $21,149 | $(242,733) | | Net cash (used in) provided by financing activities | $(8,880) | $205,420 | | Increase in cash | $2,704 | $4,243 | | Cash, beginning of period | $8,939 | $4,696 | | Cash, end of period | $11,643 | $8,939 | | Supplemental Cash Flow Information | | | | Net income tax payments during the period | $2,991 | $2,643 | | Interest paid during the period | $47,321 | $37,326 | | Noncash transactions: | | | | Property and equipment under finance leases | $15,041 | $95,820 | Consolidated Statements of Stockholders' Equity (Deficit) (Fiscal 2019 vs. 2018) | Metric | December 30, 2017 (In thousands) | December 29, 2018 (In thousands) | December 28, 2019 (In thousands) | | :------------------------------------------- | :------------------------------- | :------------------------------- | :------------------------------- | | Common Shares | 9,101 | 9,294 | 9,366 | | Common Stock Amount | $91 | $92 | $94 | | Additional Paid-In Capital | $259,588 | $258,596 | $260,974 | | Other Comprehensive Loss | $(36,507) | $(37,129) | $(34,563) | | Accumulated Deficit | $(188,170) | $(236,222) | $(252,588) | | Stockholders' (Deficit) Total | $35,002 | $(14,663) | $(26,083) | - The company adopted ASU 2016-02 'Leases (Topic 842)' effective December 30, 2018, resulting in the recognition of operating lease ROU assets and corresponding lease liabilities of $57.5 million on the consolidated balance sheet[281] - On April 13, 2018, BlueLinx acquired Cedar Creek Holdings, Inc. for approximately $361.8 million, expanding product offerings and geographical footprint, and increasing distribution facilities to approximately 70[301] Cedar Creek Acquisition Pro Forma Information (Fiscal 2018) | Metric | Pro Forma Fiscal 2018 (In thousands, except per share data) | | :------------------------- | :---------------------------------------------------------- | | Net sales | $3,262,433 | | Net loss | $(18,129) | | Loss per common share: | | | Basic | $(1.96) | | Diluted | $(1.96) | - Goodwill of $47.8 million was recognized from the Cedar Creek acquisition, attributable to expected operating synergies and growth potential[310] Definite-Lived Intangible Assets (as of December 28, 2019) | Intangible Asset | Gross Carrying Amounts (In thousands) | Accumulated Amortization (In thousands) | Net Carrying Amounts (In thousands) | | :-------------------- | :------------------------------------ | :-------------------------------------- | :---------------------------------- | | Customer relationships | $25,500 | $(6,770) | $18,730 | | Noncompete agreements | $8,254 | $(3,532) | $4,722 | | Trade names | $6,826 | $(3,894) | $2,932 | | Total | $40,580 | $(14,196) | $26,384 | - Amortization expense for definite-lived intangible assets was $8.1 million in fiscal 2019, with an estimated annual amortization of $7.461 million for 2020[330][331] - In fiscal 2019, the company sold five non-operating distribution facilities and certain equipment, recognizing a gain of $13.1 million[333] Benefit from Income Taxes (Fiscal 2019 vs. 2018) | Tax Type | Fiscal Year Ended December 28, 2019 (In thousands) | Fiscal Year Ended December 29, 2018 (In thousands) | | :---------------------- | :------------------------------------------------- | :------------------------------------------------- | | Federal income taxes: | | | | Current | $35 | $(99) | | Deferred | $(3,202) | $(13,092) | | State income taxes: | | | | Current | $(403) | $3,786 | | Deferred | $(382) | $(2,749) | | Benefit from income taxes | $(3,952) | $(12,154) | - The company recorded valuation allowances of $16.2 million for disallowed interest expense and separate company state NOLs as of December 28, 2019[340] Net Deferred Income Tax Assets (Fiscal 2019 vs. 2018) | Metric | December 28, 2019 (In thousands) | December 29, 2018 (In thousands) | | :----------------------------------- | :------------------------------- | :------------------------------- | | Total gross deferred income tax assets | $91,357 | $73,958 | | Less: valuation allowances | $(16,194) | $(12,348) | | Total net deferred income tax assets | $75,163 | $61,610 | | Total deferred income tax liabilities | $(21,170) | $(8,965) | | Deferred income tax asset, net | $53,993 | $52,645 | Unrecognized Tax Benefits Activity (Fiscal 2019 vs. 2018) | Metric | 2019 (In thousands) | 2018 (In thousands) | | :------------------------------------------- | :------------------ | :------------------ | | Balance at beginning of fiscal year | $5,843 | $184 | | Additions for tax positions in prior years | — | $6,663 | | Reductions due to lapse of applicable statute of limitations | $(1,598) | $(1,004) |\ | Balance at end of fiscal year | $4,245 | $5,843 | - The company sponsors a noncontributory defined benefit pension plan, with most participants inactive; the net unfunded status was $23.4 million at December 28, 2019, down from $26.7 million in 2018[372][375] Pension Plan Net Unfunded Status (Fiscal 2019 vs. 2018) | Metric | December 28, 2019 (In thousands) | December 29, 2018 (In thousands) | | :-------------------------------------- | :------------------------------- | :------------------------------- | | Projected benefit obligation at end of period | $107,026 | $107,909 | | Fair value of assets at end of period | $83,606 | $81,241 | | Net unfunded status of plan | $(23,420) | $(26,668) | - A lump sum payout option for certain pension plan participants in 2019 totaled $9.7 million, reducing the projected benefit obligation by $12.2 million and resulting in a $2.8 million settlement expense[376] Net Periodic Pension Cost (Credit) (Fiscal 2019 vs. 2018) | Metric | Fiscal Year Ended December 28, 2019 (In thousands) | Fiscal Year Ended December 29, 2018 (In thousands) | | :------------------------------ | :------------------------------------------------- | :------------------------------------------------- | | Service cost | $190 | $534 | | Interest cost on projected benefit obligation | $3,730 | $3,853 | | Expected return on plan assets | $(5,162) | $(5,309) | | Amortization of unrecognized loss | $1,158 | $1,084 | | Net periodic pension cost (credit) | $(84) | $162 | - The company participates in multiemployer pension plans (MEPPs), including the Central States Plan, which is in 'Critical and Declining' status; the estimated contingent withdrawal liability for a complete withdrawal in fiscal 2020 is approximately $51.1 million[400][402] Share-Based Compensation Expense (Fiscal 2019 vs. 2018) | Award Type | December 28, 2019 (In thousands) | December 29, 2018 (In thousands) | | :------------------------------- | :------------------------------- | :------------------------------- | | Restricted Stock and Restricted Stock Units | $2,592 | $1,350 | | Performance Shares | — | $788 | | Cash-settled Stock Appreciation Rights | — | $13,173 | | Total | $2,592 | $15,311 | - Basic and diluted loss per share were both $(1.89) in fiscal 2019 and $(5.21) in fiscal 2018, as all outstanding share-based awards were anti-dilutive due to net losses[423] - The company has related party transactions, including lease payments to a limited liability company partially owned by a former Vice Chairman[425] Lease Expense Components (Fiscal 2019) | Lease Expense Component | Fiscal Year Ended December 28, 2019 (In thousands) | | :-------------------------------- | :------------------------------------------------- | | Operating lease cost | $12,115 | | Finance lease cost: | | | Amortization of right-of-use assets | $9,712 | | Interest on lease liabilities | $15,303 | | Total finance lease costs | $25,015 | Maturities of Lease Liabilities (as of December 28, 2019) | Year | Operating leases (In thousands) | Finance leases (In thousands) | | :--------- | :------------------------------ | :---------------------------- | | 2020 | $11,348 | $20,291 | | 2021 | $10,111 | $19,258 | | 2022 | $8,048 | $18,350 | | 2023 | $7,330 | $17,887 | | 2024 | $6,413 | $17,324 | | Thereafter | $50,901 | $284,277 | | Total lease payments | $94,151 | $377,387 | | Less: imputed interest | $(39,743) | $(224,391) | | Total | $54,408 | $152,996 | - Subsequent to fiscal 2019, the company completed additional real estate financing transactions on fourteen warehouse facilities for aggregate net proceeds of $78.3 million, used to repay Term Loan Facility indebtedness, reducing the principal balance to approximately $77.4 million[444] ITEM 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure There were no changes in or disagreements with accountants on accounting and financial disclosure - None[450] ITEM 9A. Controls and Procedures Management, including the CEO and CFO, concluded that disclosure controls and internal control over financial reporting were effective as of December 28, 2019, with an unqualified audit opinion from BDO USA, LLP - Management, including the CEO and CFO, concluded that disclosure controls and procedures were effective as of December 28, 2019[451] - Management's assessment of internal control over financial reporting for fiscal 2019 included the internal control over financial reporting of Cedar Creek, following its integration[455] - Management believes that internal control over financial reporting was effective as of December 28, 2019, based on COSO criteria[456] - BDO USA, LLP, the independent registered public accounting firm, audited the effectiveness of internal control over financial reporting and expressed an unqualified opinion[457][459] ITEM 9B. Other Information There is no other information to report in this section - None[466] PART III ITEM 10. Directors, Executive Officers, and Corporate Governance Information on directors, executive officers, and corporate governance is incorporated by reference from the 2020 Proxy Statement - Information regarding directors, executive officers, and corporate governance is incorporated by reference from the definitive Proxy Statement for the 2020 Annual Meeting of Stockholders[469] ITEM 11. Executive Compensation Executive compensation details are incorporated by reference from the relevant sections of the company's definitive Proxy Statement - Information regarding executive compensation is incorporated by reference from the Proxy Statement[470] ITEM 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters Security ownership and equity compensation plan information, including 424,380 available securities, is incorporated by reference from the Proxy Statement - Information regarding security ownership of certain beneficial owners and management is incorporated by reference from the Proxy Statement[471] Equity Compensation Plan Information (as of December 28, 2019) | Plan Category | Number of Securities to be Issued Upon Exercise of Outstanding Options, Warrants and Rights | Weighted-Average Exercise Price of Outstanding Options, Warrants and Rights | Number of Securities Remaining Available for Future Issuance Under Equity Compensation Plans (Excluding Securities Reflected in Column (a)) | | :----------------------------------------------------- | :---------------------------------------------------------------------------------------- | :-------------------------------------------------------------------------- | :------------------------------------------------------------------------------------------------------------------------------------------------ | | Equity compensation plans approved by security holders | — | $— | 424,380 | | Equity compensation plans not approved by security holders | — | n/a | — | | Total | — | $— | 424,380 | ITEM 13. Certain Relationships and Related Transactions, and Director Independence Information on certain relationships, related transactions, and director independence is incorporated by reference from the Proxy Statement - Information regarding certain relationships, related transactions, and director independence is incorporated by reference from the Proxy Statement[475] ITEM 14. Principal Accountant Fees and Services Principal accountant fees and services information is incorporated by reference from the relevant section of the company's definitive Proxy Statement - Information regarding principal accountant fees and services is incorporated by reference from the Proxy Statement[476] PART IV ITEM 15. Exhibits and Financial Statement Schedules This section provides financial statements, notes that schedules are not applicable, and lists comprehensive exhibits including various agreements and corporate documents - The financial statements of BlueLinx Holdings Inc. and subsidiaries and the Report of Independent Registered Public Accounting Firm are presented under Item 8 of this Form 10-K[480] - Financial Statement Schedules are not applicable[481] - A comprehensive list of exhibits is provided, including various agreements (e.g., Asset Purchase, Credit and Guaranty), corporate documents (e.g., Certificate of Incorporation), equity incentive plans, employment agreements, and certifications (e.g., Sarbanes-Oxley Act)[479][483][485][488] ITEM 16. Form 10-K Summary The company does not provide a Form 10-K Summary - None[494] Signatures The report is signed by Mitchell B. Lewis (President and CEO), Susan C. O'Farrell (SVP, CFO, Treasurer), and other directors as of March 11, 2020 - The report is signed by Mitchell B. Lewis (President and CEO), Susan C. O'Farrell (SVP, CFO, Treasurer), and other directors as of March 11, 2020[496][497]