BlueLinx Holdings Inc. (NYSE:BXC), a leading U.S. wholesale distributor of building products, today reported financial results for the three months ended June 29, 2024.

SECOND QUARTER 2024 HIGHLIGHTS

Net sales of $768 million
Gross profit of $122 million, gross margin of 15.9% and specialty product gross margin of 19.3%
Net income of $14 million, or $1.65 diluted earnings per share
Adjusted net income of $15 million, or $1.68 adjusted diluted earnings per share
Adjusted EBITDA of $34 million, 4.5% of net sales
Operating cash flow of $36 million and free cash flow of $29 million
Available liquidity of $838 million, including $491 million cash and cash equivalents on hand
$15 million in share repurchases, with $76 million remaining on our share repurchase authorization as of quarter-end

"Our second quarter results were highlighted by solid volume growth in several of our key specialty product categories despite a challenging macro environment," said Shyam Reddy, President and CEO of BlueLinx. "We also generated solid specialty product gross margins of approximately 19%, despite the effects of price deflation. The quarter was adversely impacted by structural products, primarily driven by declining lumber and panel prices, in addition to volume declines due to challenges in the housing and building products sector. Although current market conditions are challenging, we believe we are well-positioned for long-term success because our vision is supported by a well-defined sales growth strategy, strong liquidity, and minimal debt."

"Our strong free cash flow generation of $29 million during the second quarter helped us end the period with $491 million in cash on hand and a net leverage ratio of (0.9x)," said Andy Wamser, Chief Financial Officer of BlueLinx. "During the second quarter, we purchased $15 million of stock under our share repurchase program, demonstrating our commitment to returning capital to shareholders. At the end of the quarter, we had $76 million remaining on our share repurchase authorization, and we will continue to be opportunistic in the market."

SECOND QUARTER 2024 FINANCIAL PERFORMANCE

In the second quarter of 2024, net sales were $768 million, a decrease of $48 million, or 6% when compared to the second quarter of 2023. Gross profit was $122 million, a decrease of $13 million, or 10%, year-over-year, and gross margin was 15.9%, down 70 basis points from the same period last year.

Net sales of specialty products, which includes products such as engineered wood, siding, millwork, outdoor living, specialty lumber and panels, and industrial products, were $539 million, a decrease of $32 million, or 5.5% when compared to the second quarter of 2023. This decrease was due to price deflation across specialty products, partially offset by a slight increase in volumes. Gross profit from specialty product sales was $104 million, a decrease of $4 million, or 4.1% when compared to the second quarter of last year. Gross margin was 19.3% compared to 19.1% in the prior year period. The current period benefited from the reduction of an accrued estimate made in the first quarter of 2024 related to amounts the Company believes it may owe for discrepancies in duties paid in prior years for certain imported goods. Not including this benefit, specialty products' gross margin would have been 18.9% in the current quarter.

Net sales of structural products, which includes products such as lumber, plywood, oriented strand board, rebar, and remesh, decreased $16 million, or 6.6% when compared to the second quarter of 2023, to $229 million in the second quarter of 2024. The decrease in structural sales was due primarily to lower volumes and a decline in our lumber selling prices which generally correlated to a year-over-year decline in the average composite price of framing lumber of 6%. Gross profit from sales of structural products was $18 million, a decrease of $9 million from the prior year period, and gross margin was 7.9%, compared to 11.0% in the prior year period.

Selling, general and administrative ("SG&A") expenses were $89 million in the second quarter of 2024, $1 million higher than the prior year period. The year-over-year change in SG&A was primarily due to higher technology expenses and legal expenses associated with duty-related matters, as well as lower logistics costs and share-based compensation expenses.

Net income was $14 million, or $1.65 per diluted share, versus $24 million, or $2.70 per diluted share, in the prior year period. Adjusted Net Income was $15 million, or $1.68 per diluted share compared to $26 million, or $2.91 per diluted share in the second quarter of last year.

Adjusted EBITDA was $34 million, or 4.5% of net sales, for the second quarter of 2024, compared to $49 million, or 6.0% of net sales in the second quarter of 2023. The current period includes the benefit of the duty-related matters, and not including these items, Adjusted EBITDA was $32 million, or 4.1% of net sales.

Net cash generated from operating activities was $36 million in the second quarter of 2024 and free cash flow was $29 million. The cash generated during the second quarter was driven by net income and improved working capital.

CAPITAL ALLOCATION AND FINANCIAL POSITION

During the second quarter, we invested $6.5 million of cash in capital investments used to improve our distribution facilities and upgrade our fleet. Additionally, we purchased approximately $15 million of the Company's common stock through open market transactions under our $100 million share repurchase program. At quarter-end, we had $76 million remaining under this authorization and we plan to continue being opportunistic in the market when repurchasing shares.

As of June 29, 2024, total debt and finance lease obligations, but excluding real property finance lease obligations, was $348 million, which consisted of $300 million of senior secured notes that mature in 2029 and $48 million of finance lease obligations for equipment. Net debt was ($143) million, which consisted of total debt and finance leases excluding real property finance lease obligations of $348 million less cash and cash equivalents of $491 million, resulting in a net leverage ratio of (0.9x) using a trailing twelve-month Adjusted EBITDA of $160 million. Available liquidity was $838 million which included an undrawn revolving credit facility that had $346 million of availability plus cash and cash equivalents of $491 million.

THIRD QUARTER 2024 OUTLOOK

Through the first four weeks of the third quarter of 2024, specialty product gross margin was in the range of 18% to 19% and structural product gross margin was in the range of 8% to 9%. Average daily sales volumes were improved versus the second quarter of 2024.

CONFERENCE CALL INFORMATION

BlueLinx will host a conference call on July 31, 2024, at 10:00 a.m. Eastern Time, accompanied by a supporting slide presentation.

A webcast of the conference call and accompanying presentation materials will be available in the Investor Relations section of the BlueLinx website at https://investors.bluelinxco.com, and a replay of the webcast will be available at the same site shortly after the webcast is complete.

To participate in the live teleconference:

Domestic Live: 1-888-660-6392

Passcode: 9140086

To listen to a replay of the teleconference, which will be available through August 14, 2024:

Domestic Replay: 1-800-770-2030

Passcode: 9140086

ABOUT BLUELINX

BlueLinx (NYSE:BXC) is a leading U.S. wholesale distributor of residential and commercial building products with both branded and private-label SKUs across product categories such as lumber, panels, engineered wood, siding, millwork, and industrial products. With a strong market position, broad geographic coverage footprint servicing 50 states, and the strength of a locally focused sales force, we distribute a comprehensive range of products to our customers which include national home centers, pro dealers, cooperatives, specialty distributors, regional and local dealers and industrial manufacturers. BlueLinx provides a wide range of value-added services and solutions to our customers and suppliers, and we operate our business through a broad network of distribution centers. To learn more about BlueLinx, please visit www.bluelinxco.com.

FORWARD-LOOKING STATEMENTS

This press release 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," "will be," "will likely continue," "will likely result," "would," or words or phrases of similar meaning.

The forward-looking statements in this press release include statements about our strategy, liquidity, and debt, our long-run positioning relative to industry conditions, future share repurchases, and the information set forth under the heading "Third Quarter 2024 Outlook".

Forward-looking statements in this press release 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. These risks and uncertainties include those discussed in greater detail in our filings with the Securities and Exchange Commission. We operate in a changing environment in which new risks can emerge from time to time. It is not possible for management to predict all of these risks, nor can it assess the extent to which any factor, or a combination of factors, may cause our business, strategy, or actual results to differ materially from those contained in forward-looking statements. Factors that may cause these differences include, among other things: housing market conditions; pricing and product cost variability; volumes of product sold; competition; the cyclical nature of the industry in which we operate; consolidation among competitors, suppliers, and customers; disintermediation risk; loss of products or key suppliers and manufacturers; our dependence on international suppliers and manufacturers for certain products; effective inventory management relative to our sales volume or the prices of the products we produce; business disruptions; potential acquisitions and the integration and completion of such acquisitions; information technology security risks and business interruption risks; the ability to attract, train, and retain highly qualified associates and other key personnel while controlling related labor costs; exposure to product liability and other claims and legal proceedings related to our business and the products we distribute; natural disasters, catastrophes, fire, wars or other unexpected events; the impacts of climate change; successful implementation of our strategy; wage increases or work stoppages by our union employees; costs imposed by federal, state, local, and other regulations; compliance costs associated with federal, state, and local environmental protection laws; the effects of epidemics, global pandemics or other widespread public health crises and governmental rules and regulations; fluctuations in our operating results; our level of indebtedness and our ability to incur additional debt to fund future needs; the covenants of the instruments governing our indebtedness limiting the discretion of our management in operating the business; the potential to incur more debt; the fact that we have consummated certain sale leaseback transactions with resulting long-term non-cancelable leases, many of which are or will be finance leases; the fact that we lease many of our distribution centers, and we would still be obligated under these leases even if we close a leased distribution center; inability to raise funds necessary to finance a required repurchase of our senior secured notes; a lowering or withdrawal of debt ratings; changes in our product mix; increases in fuel and other energy prices or availability of third-part freight providers; changes in insurance-related deductible/retention reserves 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; and changes in, or interpretation of, accounting principles.

Given these risks and uncertainties, we caution you not to place undue reliance on forward-looking statements. We expressly disclaim any obligation to update or revise any forward-looking statement as a result of new information, future events or otherwise, except as required by law.

NON-GAAP MEASURES AND SUPPLEMENTAL FINANCIAL INFORMATION

The Company reports its financial results in accordance with GAAP. The Company also believes that presentation of certain non-GAAP measures may be useful to investors and may provide a more complete understanding of the factors and trends affecting the business than using reported GAAP results alone. Any non-GAAP measures used herein are reconciled to their most directly comparable GAAP measures herein in the "Reconciliation of Non-GAAP Measurements" table later in this release. The Company cautions that non-GAAP measures are not intended to present superior measures of our financial condition from those measures determined under GAAP and should be considered in addition to, but not as a substitute for, the Company's reported GAAP results. The Company further cautions that its non-GAAP measures, as used herein, are not necessarily comparable to other similarly titled measures of other companies due to differences in methods of calculation.

Adjusted EBITDA and Adjusted EBITDA Margin. BlueLinx defines Adjusted EBITDA as an amount equal to net income (loss) plus interest expense and all interest expense related items, income taxes, depreciation and amortization, and further adjusted for certain non-cash items and other special items, including compensation expense from share based compensation, one-time charges associated with the legal, consulting, and professional fees related to our merger and acquisition activities, gains or losses on sales of properties, amortization of deferred gains on real estate, and expense associated with our restructuring activities, such as severance, in addition to other significant and/or one-time, nonrecurring, non-operating items.

The Company presents Adjusted EBITDA because it is a primary measure used by management to evaluate operating performance. Management believes this metric helps to enhance investors' overall understanding of the financial performance and cash flows of the business. Management also believes Adjusted EBITDA is helpful in highlighting operating trends. Adjusted EBITDA is frequently used by securities analysts, investors, and other interested parties in their evaluation of companies, many of which present an Adjusted EBITDA measure when reporting their results.

We determine our Adjusted EBITDA Margin, which we sometimes refer to as our Adjusted EBITDA as a percentage of net sales, by dividing our Adjusted EBITDA for the applicable period by our net sales for the applicable period. We believe that this ratio is useful to investors because it more clearly defines the quality of earnings and operational efficiency of translating sales to profitability.

Adjusted Net Income and Adjusted Earnings Per Share. BlueLinx defines Adjusted Net Income as Net Income adjusted for certain non-cash items and other special items, including compensation expense from share based compensation, one-time charges associated with the legal, consulting, and professional fees related to our merger and acquisition activities, gains or losses on sales of properties, amortization of deferred gains on real estate, and expense associated with our restructuring activities, such as severance, in addition to other significant and/or one-time, nonrecurring, non-operating items, further adjusted for the tax impacts of such reconciling items. BlueLinx defines Adjusted Earnings Per Share (basic and/or diluted) as the Adjusted Net Income for the period divided by the weighted average outstanding shares (basic and/or diluted) for the periods presented. We believe that Adjusted Net Income and Adjusted Earnings Per Share (basic and/or diluted) are useful to investors to enhance investors' overall understanding of the financial performance of the business. Management also believes Adjusted Net Income and Adjusted Earnings Per Share (basic and/or diluted) are helpful in highlighting operating trends.

Our Adjusted Net Income and Adjusted Earnings Per Share (basic and/or diluted) are not presentations made in accordance with GAAP and are not intended to present superior measures of our financial condition from those measures determined under GAAP. Adjusted Net Income and Adjusted Earnings Per Share (basic or diluted), as used herein, are not necessarily comparable to other similarly titled captions of other companies due to differences in methods of calculation. These non-GAAP measures are reconciled in the "Reconciliation of Non-GAAP Measurements" table later in this release.

Free Cash Flow. BlueLinx defines free cash flow as net cash provided by operating activities less total capital expenditures. Free cash flow is a measure used by management to assess our financial performance, and we believe it is useful for investors because it relates the operating cash flow of the Company to the capital that is spent to continue and improve business operations. In particular, free cash flow indicates the amount of cash generated after capital expenditures that can be used for, among other things, investment in our business, strengthening our balance sheet, and repayment of our debt obligations. Free cash flow does not represent the residual cash flow available for discretionary expenditures since there may be other nondiscretionary expenditures that are not deducted from the measure. Free cash flow is not a presentation made in accordance with GAAP and is not intended to present a superior measure of financial condition from those determined under GAAP. Free cash flow, as used herein, is not necessarily comparable to other similarly titled captions of other companies due to differences in methods of calculation. This non-GAAP measure is reconciled in the "Reconciliation of Non-GAAP Measurements" table later in this release.

Net Debt, Net Debt Excluding Real Property Finance Lease Liabilities, Overall Net Leverage Ratio, and Net Leverage Ratio Excluding Real Property Finance Lease Liabilities. BlueLinx calculates Net Debt as its total short- and long-term debt, including outstanding balances under our term loan and revolving credit facility and the total amount of its obligations under finance leases, less cash and cash equivalents. Net Debt Excluding Real Property Finance Lease Liabilities is calculated in the same manner as Net Debt, except the total amount of obligations under real estate finance leases are excluded. Although our credit agreements do not contain leverage covenants, a net leverage ratio excluding finance lease obligations for real property is included within the terms of our revolving credit agreement. We believe that Net Debt and Net Debt Excluding Real Property Finance Lease Liabilities are useful to investors because our management reviews both metrics as part of its management of overall liquidity, financial flexibility, capital structure and leverage, and creditors and credit analysts monitor our net debt as part of their assessments of our business. We determine our Overall Net Leverage Ratio by dividing our Net Debt by Twelve-Month Trailing Adjusted EBITDA. Our calculation of Net Leverage Ratio Excluding Real Property Finance Lease Liabilities is determined by dividing our Net Debt Excluding Real Property Finance Lease Liabilities by Twelve-Month Trailing Adjusted EBITDA. We believe that these ratios are useful to investors because they are indicators of our ability to meet our future financial obligations. In addition, our Net Leverage Ratio is a measure that is frequently used by investors and creditors. Our Net Debt, Net Debt Excluding Real Property Finance Lease Liabilities, Overall Net Leverage Ratio, and Net Leverage Ratio Excluding Real Property Finance Lease Liabilities are not made in accordance with GAAP and are not intended to present a superior measure of our financial condition from measures and ratios determined under GAAP. The calculations of our Net Debt, Net Debt Excluding Real Property Finance Lease Liabilities, Overall Net Leverage Ratio, and Net Leverage Ratio Excluding Real Property Finance Lease Liabilities are presented in the table on page 8. Net Debt, Net Debt Excluding Real Property Finance Lease Liabilities, Overall Net Leverage Ratio, and Net Leverage Ratio Excluding Real Property Finance Lease Liabilities, as used herein, are not necessarily comparable to other similarly titled captions of other companies due to differences in methods of calculation.

BLUELINX HOLDINGS INC. CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited)

	Three Months Ended						Six Months Ended
	June 29, 2024			July 1, 2023			June 29, 2024			July 1, 2023
(In thousands, except per share data)
Net sales	$	768,363		$	815,967		$	1,494,607		$	1,613,871
Cost of products sold		645,919			680,164			1,244,482			1,344,529
Gross profit		122,444			135,803			250,125			269,342
Gross margin		15.9	%		16.6	%		16.7	%		16.7	%
Operating expenses (income):
Selling, general, and administrative		89,453			88,750			180,703			179,924
Depreciation and amortization		10,120			7,951			19,553			15,669
Amortization of deferred gains on real estate		(984	)		(984	)		(1,968	)		(1,968	)
Other operating expenses		8			993			322			4,109
Total operating expenses		98,597			96,710			198,610			197,734
Operating income		23,847			39,093			51,515			71,608
Non-operating expenses:
Interest expense, net		4,801			6,311			9,425			13,998
Other expense, net		—			594			—			1,188
Income before provision for income taxes		19,046			32,188			42,090			56,422
Provision for income taxes		4,710			7,722			10,262			14,144
Net income	$	14,336		$	24,466		$	31,828		$	42,278

Basic earnings per share	$	1.65		$	2.70		$	3.68		$	4.67
Diluted earnings per share	$	1.65		$	2.70		$	3.66		$	4.67

BLUELINX HOLDINGS INC. CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited)

	June 29, 2024			December 30, 2023
(In thousands, except share data)
ASSETS
Current assets:
Cash and cash equivalents	$	491,392		$	521,743
Receivables, less allowances of $3,344 and $3,398, respectively		273,537			228,410
Inventories, net		357,573			343,638
Other current assets		36,220			26,608
Total current assets		1,158,722			1,120,399
Property and equipment, at cost		413,905			396,321
Accumulated depreciation		(181,841	)		(170,334	)
Property and equipment, net		232,064			225,987
Operating lease right-of-use assets		44,418			37,227
Goodwill		55,372			55,372
Intangible assets, net		28,787			30,792
Deferred income tax asset, net		53,677			53,256
Other non-current assets		13,036			14,568
Total assets	$	1,586,076		$	1,537,601
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable	$	179,375		$	157,931
Accrued compensation		12,310			14,273
Finance lease liabilities - current		11,132			11,178
Operating lease liabilities - current		8,460			6,284
Real estate deferred gains - current		3,935			3,935
Other current liabilities		22,250			24,961
Total current liabilities		237,462			218,562
Long-term debt		294,403			293,743
Finance lease liabilities, less current portion		280,206			274,248
Operating lease liabilities, less current portion		37,369			32,519
Real estate deferred gains, less current portion		64,697			66,599
Other non-current liabilities		19,607			17,644
Total liabilities		933,744			903,315
Commitments and contingencies
STOCKHOLDERS' EQUITY:
Preferred Stock, $0.01 par value, 30,000,000 shares authorized, none outstanding		—			—
Common Stock, $0.01 par value, 20,000,000 shares authorized, 8,551,462 and 8,650,046 outstanding, respectively		86			87
Additional paid-in capital		151,279			165,060
Retained earnings		500,967			469,139
Total stockholders' equity		652,332			634,286
Total liabilities and stockholders' equity	$	1,586,076		$	1,537,601

BLUELINX HOLDINGS INC. CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited)

	Three Months Ended						Six Months Ended
	June 29, 2024			July 1, 2023			June 29, 2024			July 1, 2023
(In thousands)
Cash flows from operating activities:
Net income	$	14,336		$	24,466		$	31,828		$	42,278
Adjustments to reconcile net income to cash provided by operations:
Depreciation and amortization		10,120			7,951			19,553			15,669
Amortization of debt discount and issuance costs		330			330			660			659
Provision for deferred income taxes		(48	)		337			(421	)		550
Amortization of deferred gains from real estate		(984	)		(984	)		(1,968	)		(1,968	)
Share-based compensation		1,405			1,926			3,755			6,495
Changes in operating assets and liabilities:
Accounts receivable		14,707			4,547			(45,127	)		(42,786	)
Inventories		13,369			30,012			(13,935	)		105,001
Accounts payable		6,339			13,084			20,123			38,504
Other current assets		(4,055	)		(15,995	)		(9,612	)		(3,169	)
Other assets and liabilities		(19,716	)		(1,521	)		(188	)		(8,115	)
Net cash provided by operating activities		35,803			64,153			4,668			153,118

Cash flows from investing activities:
Proceeds from sale of assets		147			91			274			128
Property and equipment investments		(6,454	)		(5,031	)		(11,901	)		(14,039	)
Net cash used in investing activities		(6,307	)		(4,940	)		(11,627	)		(13,911	)

Cash flows from financing activities:
Common stock repurchase and retirement		(14,529	)		(11,599	)		(14,529	)		(11,599	)
Repurchase of shares to satisfy employee tax withholdings		(1,545	)		(3,390	)		(2,452	)		(3,960	)
Principal payments on finance lease liabilities		(3,339	)		(2,133	)		(6,411	)		(4,266	)
Net cash used in financing activities		(19,413	)		(17,122	)		(23,392	)		(19,825	)

Net change in cash and cash equivalents		10,083			42,091			(30,351	)		119,382
Cash and cash equivalents at beginning of period		481,309			376,234			521,743			298,943
Cash and cash equivalents at end of period	$	491,392		$	418,325		$	491,392		$	418,325

The following schedule presents our revenues disaggregated by specialty and structural product category:

	Three Months Ended						Six Months Ended
	June 29, 2024			July 1, 2023			June 29, 2024			July 1, 2023
(Dollar amounts in thousands)
Net sales by product category
Specialty products	$	539,466		$	570,990		$	1,043,300		$	1,138,828
Structural products		228,897			244,977			451,307			475,043
Total net sales	$	768,363		$	815,967		$	1,494,607		$	1,613,871

Gross profit by product category
Specialty products	$	104,350		$	108,841		$	208,399		$	215,468
Structural products		18,094			26,962			41,726			53,874
Total gross profit	$	122,444		$	135,803		$	250,125		$	269,342

Gross margin % by product category
Specialty products		19.3	%		19.1	%		20.0	%		18.9	%
Structural products		7.9	%		11.0	%		9.2	%		11.3	%
Company gross margin %		15.9	%		16.6	%		16.7	%		16.7	%

BLUELINX HOLDINGS INC. RECONCILIATION OF NON-GAAP MEASUREMENTS (Unaudited)

The following schedule reconciles net income to Adjusted EBITDA (non-GAAP):

	Three Months Ended						Six Months Ended						Trailing Twelve Months Ended
	June 29, 2024			July 1, 2023			June 29, 2024			July 1, 2023			June 29, 2024			July 1, 2023
(In thousands)
Net income	$	14,336		$	24,466		$	31,828		$	42,278		$	38,086		$	133,773
Adjustments:
Depreciation and amortization		10,120			7,951			19,553			15,669			35,927			30,018
Interest expense, net		4,801			6,311			9,425			13,998			19,173			33,722
Provision for income taxes		4,710			7,722			10,262			14,144			29,468			44,019
Share-based compensation expense		1,405			1,926			3,755			6,495			9,315			12,175
Amortization of deferred gains on real estate		(984	)		(984	)		(1,968	)		(1,968	)		(3,934	)		(3,934	)
Pension termination and related expenses⁽¹⁾⁽²⁾		—			594			—			1,188			31,628			1,188
Acquisition-related costs^(1)(3)(5)		—			—			—			17			261			1,272
Restructuring and other^(1)(4)(5)		7			993			321			4,092			143			6,930
Adjusted EBITDA	$	34,395		$	48,979		$	73,176		$	95,913		$	160,067		$	259,163

⁽¹⁾	Reflects non-recurring items of approximately $1.6 million in beneficial items in the prior quarterly period. For the current year six-month period, reflects non-recurring, beneficial items of approximately $0.3 million and the prior year six-month period reflects $5.3 million of non-recurring, beneficial items. For the trailing twelve months ended, reflects approximately $32.0 million of non-recurring, beneficial items, and approximately $9.4 million of non-recurring, beneficial items, in the prior trailing twelve- month period.
⁽²⁾	Reflects expenses related to our previously disclosed settlement of the BlueLinx Corporation Hourly Retirement Plan (defined benefit) in 4Q 2023.
⁽³⁾	Reflects primarily legal, professional, technology and other integration costs.
⁽⁴⁾	Reflects costs related to our restructuring efforts, such as severance, net of other one-time non-operating items.
⁽⁵⁾	Certain amounts for prior periods in fiscal 2023 have been reclassified for Acquisition-related costs and Restructuring and other.

The following tables reconciles Net income and Diluted earnings per share to Adjusted net income (non-GAAP) and Adjusted diluted earnings per share (non-GAAP):

	Three Months Ended						Six Months Ended
	June 29, 2024			July 1, 2023			June 29, 2024			July 1, 2023
(In thousands, except per share data)
Net income	$	14,336		$	24,466		$	31,828		$	42,278
Adjustments:
Share-based compensation expense		1,405			1,926			3,755			6,495
Amortization of deferred gains on real estate		(984	)		(984	)		(1,968	)		(1,968	)
Pension termination and related expenses		—			594			—			1,188
Acquisition-related costs ⁽²⁾		—			—			—			17
Restructuring and other ⁽²⁾		7			993			321			4,092
Tax impacts of reconciling items above ⁽¹⁾		(106	)		(607	)		(514	)		(2,463	)
Adjusted net income	$	14,658		$	26,388		$	33,422		$	49,639

Basic EPS	$	1.65		$	2.70		$	3.68		$	4.67
Diluted EPS	$	1.65		$	2.70		$	3.66		$	4.67

Weighted average shares outstanding - Basic		8,645			9,040			8,641			9,034
Weighted average shares outstanding - Diluted		8,686			9,057			8,680			9,051

Non-GAAP Adjusted Basic EPS	$	1.69		$	2.92		$	3.86		$	5.48
Non-GAAP Adjusted Diluted EPS	$	1.68		$	2.91		$	3.85		$	5.48

⁽¹⁾	Tax impact calculated based on the effective tax rate for the respective three and six-month periods presented
⁽²⁾	Certain amounts for prior periods in fiscal 2023 have been reclassified for Acquisition-related costs and Restructuring and other

In the following table, our Adjusted EBITDA margin (non-GAAP) is calculated and compared to Net income as a percentage of Net sales:

	Three Months Ended						Six Months Ended
	June 29, 2024			July 1, 2023			June 29, 2024			July 1, 2023
(Dollar amounts in thousands)
Net sales	$	768,363		$	815,967		$	1,494,607		$	1,613,871
Net income	$	14,336		$	24,466		$	31,828		$	42,278
Net income as a percentage of Net sales		1.9	%		3.0	%		2.1	%		2.6	%

Net sales	$	768,363		$	815,967		$	1,494,607		$	1,613,871
Adjusted EBITDA - non-GAAP⁽¹⁾	$	34,395		$	48,979		$	73,176		$	95,913
Adjusted EBITDA margin - non-GAAP		4.5	%		6.0	%		4.9	%		5.9	%

⁽¹⁾	See the table that reconciles Net income to Adjusted EBITDA (non-GAAP)

The following schedule reconciles Total debt and finance leases to: Net debt (non-GAAP) and to Net debt excluding finance lease liabilities for real property (non-GAAP). The calculations of Net leverage ratio (non-GAAP) and Net leverage ratio excluding real property finance leases liabilities (non-GAAP) is also presented.

	As of
	June 29, 2024			December 30, 2023			July 1, 2023
($ amounts in thousands)
Long term debt⁽¹⁾	$	300,000		$	300,000		$	300,000
Finance lease liabilities for equipment and vehicles		47,979			42,252			27,743
Finance lease liabilities for real property		243,359			243,174			243,445
Total debt and finance leases		591,338			585,426			571,188
Less: available cash and cash equivalents		491,392			521,743			418,325
Net debt (non-GAAP)	$	99,946		$	63,683		$	152,863

Net debt, excluding finance lease liabilities for real property (non-GAAP)	$	(143,413	)	$	(179,491	)	$	(90,582	)

Trailing twelve-month adjusted EBITDA (non-GAAP, see above reconciliation)	$	160,067		$	182,804		$	259,163

Net leverage ratio	0.6x			0.3x			0.6x
Net leverage ratio excluding real property finance lease liabilities⁽²⁾	(0.9x		)	(1.0x		)	(0.3x		)

⁽¹⁾

As of June 29, 2024, December 30, 2023, and July 1, 2023, our long-term debt is comprised of $300 million of senior-secured notes issued in October 2021. These notes are presented under the long-term debt caption of our condensed consolidated balance sheets at $294.4 million, $293.7 million, and $293.1 million as of June 29, 2024, December 30, 2023, and July 1, 2023, respectively. This presentation is net of their unamortized issuance costs and discount. Our senior secured notes are presented in this table at their face value for the purposes of calculating our net leverage ratio.

⁽²⁾

Net leverage ratio excluding finance lease obligations for real property is included within the terms of our revolving credit agreement.

The following schedule reconciles Net cash provided by operating activities to Free cash flow (non-GAAP):

	Three Months Ended						Six Months Ended
	June 29, 2024			July 1, 2023			June 29, 2024			July 1, 2023
(In thousands)
Net cash provided by operating activities	$	35,803		$	64,153		$	4,668		$	153,118
Less: Property and equipment investments		(6,454	)		(5,031	)		(11,901	)		(14,039	)
Free cash flow - non-GAAP	$	29,349		$	59,122		$	(7,233	)	$	139,079

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BlueLinx Announces Second Quarter 2024 Results