10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 FORM 10-Q

 

☑ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

 For the quarterly period ended June 27, 2020

 OR

 

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

Commission file number: 001-32383

	BlueLinx Holdings Inc.
	(Exact name of registrant as specified in its charter)

 

Delaware		77-0627356
(State of Incorporation)		(I.R.S. Employer Identification No.)
1950 Spectrum Circle, Suite 300
Marietta	GA	30067
(Address of principal executive offices)		(Zip Code)

(770) 953-7000

(Registrant’s telephone number, including area code)

 Not applicable

(Former name or former address, if changed since last report.)

Securities registered pursuant to Section 12(b) of the Act:

Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common Stock, par value $0.01 per share	BXC	New York Stock Exchange

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☑ No  ☐

Indicate by check mark whether the registrant has submitted electronically (Section 232.405 of this chapter) every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes ☑ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large Accelerated Filer	☐	Accelerated Filer	☑	Non-accelerated Filer	☐	Smaller Reporting Company	☑
Emerging Growth Company	☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☑

As of July 31, 2020, there were 9,461,412 shares of BlueLinx Holdings Inc. common stock, par value $0.01, outstanding.

BLUELINX HOLDINGS INC.

Form 10-Q

For the Quarterly Period Ended June 27, 2020

INDEX

	PAGE
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements — BlueLinx Holdings Inc. (Unaudited)	1
Condensed Consolidated Statements of Operations and Comprehensive Loss	1
Condensed Consolidated Balance Sheets	2
Condensed Consolidated Statements of Cash Flows	3
Condensed Consolidated Statements of Stockholders’ Deficit	4
Notes to Condensed Consolidated Financial Statements	5
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations	17
Item 3. Quantitative and Qualitative Disclosures About Market Risk	26
Item 4. Controls and Procedures	26
PART II. OTHER INFORMATION
Item 1. Legal Proceedings	27
Item 1A. Risk Factors	27
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds	29
Item 3. Defaults Upon Senior Securities	29
Item 4. Mine Safety Disclosures	29
Item 5. Other Information	29
Item 6. Exhibits	30
Signature	31

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PART I. FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

BLUELINX HOLDINGS INC.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND

COMPREHENSIVE INCOME (LOSS)

(In thousands, except per share data)

(Unaudited)

	Three Months Ended					Six Months Ended
	June 27, 2020		June 29, 2019			June 27, 2020			June 29, 2019
Net sales	$	698,776	$	706,448		$	1,360,846		$	1,345,149
Cost of sales	597,956		612,281			1,166,817			1,164,937
Gross profit	100,820		94,167			194,029			180,212
Operating expenses:
Selling, general, and administrative	69,710		70,150			143,314			139,235
Depreciation and amortization	7,063		7,503			14,698			14,831
Gains from sales of property	—		(9,760		)	(525		)	(9,760		)
Other operating expenses	1,962		3,951			6,127			9,276
Total operating expenses	78,735		71,844			163,614			153,582
Operating income	22,085		22,323			30,415			26,630
Non-operating expenses (income):
Interest expense, net	11,535		13,717			25,915			27,118
Other (income) expense, net	417		(45		)	180			105
Income (loss) before provision for (benefit from) income taxes	10,133		8,651			4,320			(593		)
Provision for (benefit from) income taxes	3,438		2,350			(1,588		)	(175		)
Net income (loss)	$	6,695	$	6,301		$	5,908		$	(418	)
Basic income (loss) per share	$	0.71	$	0.67		$	0.63		$	(0.04	)
Diluted income (loss) per share	$	0.71	$	0.67		$	0.63		$	(0.04	)
Comprehensive income (loss):
Net income (loss)	$	6,695	$	6,301		$	5,908		$	(418	)
Other comprehensive income (loss):
Foreign currency translation, net of tax	17		—			20			7
Amortization of unrecognized pension loss, net of tax	114		208			310			431
Pension curtailment, net of tax	—		(1,486		)	—			(632		)
Other	2		1			(17		)	16
Total other comprehensive income (loss)	133		(1,277		)	313			(178		)
Comprehensive income (loss)	$	6,828	$	5,024		$	6,221		$	(596	)

See accompanying Notes.

1

BLUELINX HOLDINGS INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

(In thousands, except share data)

(Unaudited)

	June 27, 2020			December 28, 2019
ASSETS
Current assets:
Cash	$	11,530		$	11,643
Receivables, less allowances of $3,911 and $3,236, respectively	264,642			192,872
Inventories, net	313,979			345,806
Other current assets	26,509			27,718
Total current assets	616,660			578,039
Property and equipment, at cost	308,616			308,067
Accumulated depreciation	(122,123		)	(112,299		)
Property and equipment, net	186,493			195,768
Operating lease right-of-use assets	50,802			54,408
Goodwill	47,772			47,772
Intangible assets, net	22,591			26,384
Deferred tax assets	54,494			53,993
Other non-current assets	20,292			15,061
Total assets	$	999,104		$	971,425
LIABILITIES AND STOCKHOLDERS’ DEFICIT
Current liabilities:
Accounts payable	$	158,920		$	132,348
Accrued compensation	11,140			7,639
Current maturities of long-term debt, net of debt issuance costs of $74 and $74, respectively	2,176			2,176
Finance lease liabilities - short-term	5,958			6,486
Operating lease liabilities - short-term	6,633			7,317
Real estate deferred gains - short-term	4,040			3,935
Other current liabilities	11,011			11,222
Total current liabilities	199,878			171,123
Non-current liabilities:
Long-term debt, net of debt issuance costs of $10,915 and $12,481, respectively	377,880			458,439
Finance lease liabilities - long-term	266,622			191,525
Operating lease liabilities - long-term	44,169			47,091
Real estate deferred gains - long-term	79,984			81,886
Pension benefit obligation	22,109			23,420
Other non-current liabilities	26,710			24,024
Total liabilities	1,017,352			997,508
Commitments and Contingencies
STOCKHOLDERS’ DEFICIT:
Common Stock, $0.01 par value, 20,000,000 shares authorized, 9,461,412 and 9,365,768 outstanding on June 27, 2020 and December 28, 2019, respectively	95			94
Additional paid-in capital	262,587			260,974
Accumulated other comprehensive loss	(34,250		)	(34,563		)
Accumulated stockholders’ deficit	(246,680		)	(252,588		)
Total stockholders’ deficit	(18,248		)	(26,083		)
Total liabilities and stockholders’ deficit	$	999,104		$	971,425

See accompanying Notes.

2

BLUELINX HOLDINGS INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(In thousands)

(Unaudited)

	Six Months Ended
	June 27, 2020			June 29, 2019
Cash flows from operating activities:
Net income (loss)	$	5,908		$	(418	)
Adjustments to reconcile net income (loss) to cash provided by (used in) operations:
Benefit from income taxes	(1,588		)	(175		)
Depreciation and amortization	14,698			14,831
Amortization of debt issuance costs	1,903			1,614
Gains from sales of property	(525		)	(9,760		)
Amortization of deferred gain	(1,967		)	(1,902		)
Share-based compensation	1,858			1,341
Changes in operating assets and liabilities:
Accounts receivable	(71,770		)	(53,608		)
Inventories	31,827			(16,800		)
Accounts payable	26,572			25,672
Prepaid and other current assets	(3,200		)	(8,078		)
Other assets and liabilities	9,185			(5,766		)
Net cash provided by (used in) operating activities	12,901			(53,049		)
Cash flows from investing activities:
Acquisition of business, net of cash acquired	—			6,009
Proceeds from sale of assets	102			10,758
Property and equipment investments	(1,752		)	(1,784		)
Net cash (used in) provided by investing activities	(1,650		)	14,983
Cash flows from financing activities:
Borrowings on revolving credit facilities	350,236			365,519
Repayments on revolving credit facilities	(354,509		)	(329,683		)
Repayments on term loan	(77,852		)	(31,899		)
Proceeds from real estate financing transactions	78,263			44,822
Debt financing costs	(2,665		)	(2,359		)
Repurchase of shares to satisfy employee tax withholdings	(254		)	(208		)
Principal payments on finance lease liabilities	(4,583		)	(4,403		)
Net cash (used in) provided by financing activities	(11,364		)	41,789
Net change in cash	(113		)	3,723
Cash at beginning of period	11,643			8,939
Cash at end of period	$	11,530		$	12,662
Supplemental Cash Flow Information
Net income tax (refunds) payments during the period	$	(223	)	$	3,057
Interest paid during the period	$	24,416		$	27,278

See accompanying Notes.

3

BLUELINX HOLDINGS INC.

CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ DEFICIT

(In thousands)

(Unaudited)

	Common Stock				Additional Paid-In Capital			Accumulated Other Comprehensive Loss			Accumulated Deficit			Stockholders’ Deficit Total
	Shares		Amount
Balance, December 28, 2019	9,366		$	94	$	260,974		$	(34,563	)	$	(252,588	)	$	(26,083	)
Net loss	—		—		—			—			(787		)	(787		)
Foreign currency translation, net of tax	—		—		—			3			—			3
Unrealized gain from pension plan, net of tax	—		—		—			196			—			196
Vesting of restricted stock units	2		—		—			—			—			—
Compensation related to share-based grants	—		—		1,004			—			—			1,004
Repurchase of shares to satisfy employee tax withholdings	(1	)	—		(7		)	—			—			(7		)
Other	—		—		9			(19		)	—			(10		)
Balance, March 28, 2020	9,367		94		261,980			(34,383		)	(253,375		)	(25,684		)
Net income	—		—		—			—			6,695			6,695
Foreign currency translation, net of tax	—		—		—			17			—			17
Unrealized gain from pension plan, net of tax	—		—		—			114			—			114
Vesting of restricted stock units	122		1		—			—			—			1
Compensation related to share-based grants	—		—		854			—			—			854
Repurchase of shares to satisfy employee tax withholdings	(28	)	—		(247		)	—			—			(247		)
Other	—		—		—			2			—			2
Balance, June 27, 2020	9,461		$	95	$	262,587		$	(34,250	)	$	(246,680	)	$	(18,248	)

	Common Stock				Additional Paid-In Capital			Accumulated Other Comprehensive Loss			Accumulated Deficit			Stockholders’ Deficit Total
	Shares		Amount
Balance, December 29, 2018	9,294		$	92	$	258,596		$	(37,129	)	$	(236,222	)	$	(14,663	)
Net loss	—		—		—			—			(6,719		)	(6,719		)
Adoption of ASC 842, net of tax	—		—		—			—			1,291			1,291
Foreign currency translation, net of tax	—		—		—			7			—			7
Unrealized gain from pension plan, net of tax	—		—		—			1,077			—			1,077
Vesting of restricted stock units	49		1		—			—			—			1
Compensation related to share-based grants	—		—		706			—			—			706
Other	—		—		—			15			—			15
Balance, March 30, 2019	9,343		93		259,302			(36,030		)	(241,650		)	(18,285		)
Net income	—		—		—			—			6,301			6,301
Foreign currency translation, net of tax	—		—		—			—			—			—
Unrealized loss from pension plan, net of tax	—		—		—			(1,278		)	—			(1,278		)
Vesting of restricted stock units	32		1		—			—			—			1
Compensation related to share-based grants	—		—		635			—			—			635
Repurchase of shares to satisfy employee tax withholdings	(10	)	—		(208		)	—			—			(208		)
Other	—		—		(2		)	1			—			(1		)
Balance, June 29, 2019	9,365		$	94	$	259,727		$	(37,307	)	$	(235,349	)	$	(12,835	)

See accompanying Notes.

4

BLUELINX HOLDINGS INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

June 27, 2020

(Unaudited)

1. Basis of Presentation and Summary of Significant Accounting Policies

Basis of Presentation

The accompanying unaudited interim Condensed Consolidated Financial Statements include the accounts of BlueLinx Holdings Inc. and its wholly owned subsidiaries (“the Company”). Our independent registered public accounting firm has not audited the accompanying interim financial statements. We derived the condensed consolidated balance sheet at June 27, 2020, from the audited consolidated financial statements included in our Annual Report on Form 10-K for the fiscal year ended December 28, 2019 (the “Fiscal 2019 Form 10-K”), as filed with the Securities and Exchange Commission on March 11, 2020. In the opinion of our management, the condensed consolidated financial statements reflect all adjustments, which are of a normal recurring nature, necessary for a fair presentation of our statements of operations and comprehensive loss for the three and six months ended June 27, 2020, and June 29, 2019, our balance sheets at June 27, 2020, and December 28, 2019, our statements of cash flows for the six months ended June 27, 2020, and June 29, 2019, and our statements of stockholders’ deficit for the three and six months ended June 27, 2020, and June 29, 2019.

We have condensed or omitted certain notes and other information from the interim condensed consolidated financial statements presented in this report. Therefore, these condensed consolidated interim financial statements should be read in conjunction with the Fiscal 2019 Form 10-K. In addition, certain prior period amounts have been reclassified to conform to the current period's presentation. These reclassifications did not materially impact operating income or consolidated net income (loss). The results for the three and six months ended June 27, 2020, are not necessarily indicative of results that may be expected for the full year ending January 2, 2021, or any other interim period.

We operate on a 5-4-4 fiscal calendar. Our fiscal year ends on the Saturday closest to December 31 of that fiscal year and may comprise 53 weeks in certain years. Our 2020 fiscal year contains 53 weeks and ends on January 2, 2021. Fiscal 2019 contained 52 weeks and ended on December 28, 2019.

Our financial statements are prepared in conformity with U.S. generally accepted accounting principles (U.S. GAAP), which requires us to make estimates based on assumptions about current and, for some estimates, future economic and market conditions, which affect reported amounts and related disclosures in our financial statements. Although our current estimates contemplate current and expected future conditions, as applicable, it is reasonably possible that actual conditions could differ from our expectations, which could materially affect our results of operations and financial position. Some of our estimates may be affected by the ongoing novel coronavirus (COVID-19) pandemic. The severity, magnitude, and duration, as well as the economic consequences of the COVID-19 pandemic, are uncertain, rapidly changing, and difficult to predict. As a result, our accounting estimates and assumptions may change over time in response to COVID-19.

On April 13, 2018, we completed the acquisition of Cedar Creek Holdings, Inc. (“Cedar Creek”). Results for Cedar Creek are included in the consolidated financial information presented herein.

Reclassification of Prior Period Presentation

An adjustment has been made to the Condensed Consolidated Statements of Cash Flows for the six months ended June 27, 2020, and June 29, 2019, to include outstanding payments as part of the change in accounts payable within cash flows from operating activities.  In previous periods, this change was included within cash flows from financing activities. 

We have reclassified certain costs within the Condensed Consolidated Statements of Operations and Comprehensive Income (Loss) for the three months and six months ended June 27, 2020, and June 29, 2019, from selling, general and administrative to other operating expenses. These costs primarily relate to the integration of the acquisition of Cedar Creek.

Recently Adopted Accounting Standards

Leases.  In 2016, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2016-02, “Leases (Topic 842).” Topic 842 establishes a new lease accounting model. The most significant changes include the clarification of the definition of a lease, the requirement for lessees to recognize for all leases a right-of-use asset and a

5

corresponding lease liability in the consolidated balance sheet, and additional quantitative and qualitative disclosures which are designed to give financial statement users information on the amount, timing, and uncertainty of cash flows arising from leases. Expenses are recognized in the consolidated statement of income in a manner similar to prior accounting guidance. Lessor accounting under the new standard is substantially unchanged. We adopted this standard, and all related amendments thereto, effective December 30, 2018, the first day of our 2019 fiscal year, using a modified retrospective approach, which applies the provisions of the new guidance at the effective date without adjusting the comparative periods presented. We have elected the package of practical expedients permitted under the transition guidance within the new standard, which among other things, allows us to carry forward the historical accounting relating to lease identification and classification for existing leases upon adoption. We have made an accounting policy election to keep leases with an initial term of 12 months or less off of the consolidated balance sheet. We implemented internal controls and a lease accounting information system to enable the preparation of financial information required by the new standard. The adoption of Topic 842 had a material impact on our condensed consolidated balance sheets but did not have a material impact on our condensed consolidated statements of operations and comprehensive loss. The most significant impact was the recognition of right-of-use assets and lease liabilities of $57.5 million on the condensed consolidated balance sheet as of the adoption date. Additionally, $1.7 million of deferred gains associated with sale-leaseback transactions was recorded as a cumulative-effect adjustment to accumulated deficit.

Accounting Standards Effective in Future Periods

Credit Impairment Losses. In June 2016, the FASB issued ASU 2016-13, “Financial Instruments - Credit Losses (Topic 326).” This ASU sets forth a current expected credit loss (“CECL”) model which requires the measurement of all expected credit losses for financial instruments or other assets (e.g., trade receivables), held at the reporting date based on historical experience, current conditions, and reasonable supportable forecasts. This replaces the existing incurred loss model, is applicable to the measurement of credit losses on financial assets measured at amortized cost, and applies to some off-balance sheet credit exposures. The standard also requires enhanced disclosures to help financial statement users better understand significant estimates and judgments used in estimating credit losses, as well as the credit quality and underwriting standards of an entity's portfolio. ASU 2019-10 extended the effective date of ASU 2016-13 to interim and annual periods beginning after December 22, 2022, for certain public business entities, including smaller reporting companies. We have not completed our assessment of the standard, but we do not expect the adoption to have a material impact on the Company's consolidated financial position, results of operations, or cash flows.

Defined Benefit Pension Plan. In August 2018, the FASB issued ASU No. 2018-14, “Compensation-Retirement-Benefits-Defined Benefit Plans-General (Subtopic 715-20).” The amendments in this update modify the disclosure requirements for employers that sponsor defined benefit pension or other post-retirement plans by removing six previously required disclosures and adding two. The amendments also clarify certain other disclosure requirements. The amendments in this standard are effective for fiscal years ending after December 15, 2020. Early adoption is permitted. We have not completed our assessment of the standard, but we do not expect the adoption to have a material impact on the Company's consolidated financial position, results of operations, or cash flows.

Income Taxes. In December 2019, the FASB issued ASU No.2019-12, “Income taxes (Topic 740): Simplifying the Accounting for Income Taxes.” This ASU simplifies the accounting for income taxes by removing certain exceptions to the general principles in ASC 740 and also clarifies and amends existing guidance to improve consistent application. The amendments in this standard are effective for interim periods and fiscal years beginning after December 15, 2020. Early adoption is permitted. We are currently assessing the impact of the new guidance, but do not expect the adoption to have a material impact on the Company’s consolidated financial position, results of operations, or cash flows.

2. Goodwill and Other Intangible Assets

In connection with the acquisition of Cedar Creek, we acquired certain intangible assets. As of June 27, 2020, our intangible assets consist of goodwill and other intangible assets including customer relationships, noncompete agreements, and trade names.

Goodwill

Goodwill is the excess of the cost of an acquired entity over the fair value of tangible and intangible assets (including customer relationships, noncompete agreements, and trade names) acquired, and liabilities assumed, under acquisition accounting for business combinations. As of June 27, 2020, goodwill was $47.8 million.

Goodwill is not subject to amortization but must be tested for impairment at least annually. This test requires us to assign goodwill to a reporting unit and to determine if the fair value of the reporting unit’s goodwill is less than its carrying amount.

6

We evaluate goodwill for impairment during the fourth quarter of each fiscal year. In addition, we will evaluate the carrying value for impairment between annual impairment tests if an event occurs or circumstances change that would indicate the carrying amount may be impaired. Such events and indicators may include, without limitation, significant declines in the industries in which our products are used, significant changes in capital market conditions, and significant changes in our market capitalization. Our one reporting unit has a fair value that exceeds its book value, but a negative carrying amount of net assets, as of June 27, 2020.

Definite-Lived Intangible Assets.

On June 27, 2020, the gross carrying amounts, accumulated amortization, and net carrying amounts of our definite-lived intangible assets were as follows:

	Gross carrying amounts		Accumulated Amortization			(1)	Net carrying amounts
	(In thousands)
Customer relationships	$	25,500	$	(8,393	)		$	17,107
Noncompete agreements	8,254		(4,564		)		3,690
Trade names	6,826		(5,032		)		1,794
Total	$	40,580	$	(17,989	)		$	22,591

⁽¹⁾ Intangible assets except customer relationships are amortized on a straight-line basis. Customer relationships are amortized on a double declining balance method.

Amortization Expense

The weighted average estimated useful life remaining for customer relationships, noncompete agreements, and trade names is approximately 10 years, 2 years, and 1 year, respectively. Amortization expense for the definite-lived intangible assets was $1.8 million and $3.8 million for the three- and six-month periods ended June 27, 2020, respectively. For the three- and six-month periods ended June 30, 2019, amortization expense was $2.0 million and $4.1 million, respectively.

Estimated amortization expense for definite-lived intangible assets for the remaining portion of 2020 and the next four fiscal years is as follows:

	Estimated Amortization
	(In thousands)
2020	$	3,645
2021	4,973
2022	3,111
2023	1,807
2024	1,505

3. Revenue Recognition

We recognize revenue when control of promised goods or services is transferred to the Company’s customers in an amount that reflects the consideration we expect to be entitled to in exchange for those goods or services.

Contracts with our customers are generally in the form of standard terms and conditions of sale. From time to time, we may enter into specific contracts with some of our larger customers, which may affect delivery terms. Performance obligations in our contracts generally consist solely of delivery of goods. For all sales channel types, consisting of warehouse, direct, and reload sales, we typically satisfy our performance obligations upon shipment. Our customer payment terms are typical for our industry and may vary by the type and location of our customer and the products or services offered. The term between invoicing and when payment is due is not deemed to be significant by us. For certain sales channels and/or products, our standard terms of payment may be as early as ten days.

7

In addition, we provide inventory to certain customers through pre-arranged agreements on a consignment basis. Customer consigned inventory is maintained and stored by certain customers; however, ownership and risk of loss remain with us.

All revenues recognized are net of trade allowances (i.e., rebates), cash discounts, and sales returns. Cash discounts and sales returns are estimated using historical experience. Trade allowances are based on the estimated obligations and historical experience. Adjustments to earnings resulting from revisions to estimates on discounts and returns have been insignificant for each of the reported periods. Certain customers may receive cash-based incentives or credits, which are accounted for as variable consideration. We estimate these amounts based on the expected amount to be provided to customers and reduce revenues recognized. We believe that there will not be significant changes to our estimates of variable consideration.

The following table presents our revenues disaggregated by revenue source. Certain prior year amounts have been reclassified to conform to the current year product mix of structural and specialty products. Sales and usage-based taxes are excluded from revenues.

	Three Months Ended				Six Months Ended
	June 27, 2020		June 29, 2019		June 27, 2020		June 29, 2019
	(In thousands)				(In thousands)
Structural products	$	249,571	$	224,528	$	490,349	$	421,314
Specialty products	449,205		481,920		870,497		923,835
Total net sales	$	698,776	$	706,448	$	1,360,846	$	1,345,149

The following table presents our revenues disaggregated by sales channel. Following the acquisition and integration of Cedar Creek, our reload sales were less distinct from warehouse sales, as they have been classified in prior periods. In addition, from time to time we may also make changes to certain intercompany allocations amongst sales channels. As a result, certain prior period amounts have been reclassified to conform to the current period revenues disaggregated by sales channel. Such reclassifications do not have an impact on total net sales as reported in any period. Sales and usage-based taxes are excluded from revenues.

	Three Months Ended						Six Months Ended
	June 27, 2020			June 29, 2019			June 27, 2020			June 29, 2019
	(In thousands)						(In thousands)
Warehouse and reload	$	601,279		$	594,024		$	1,163,472		$	1,117,250
Direct	107,848			121,856			217,129			245,212
Customer discounts and rebates	(10,351		)	(9,432		)	(19,755		)	(17,313		)
Total net sales	$	698,776		$	706,448		$	1,360,846		$	1,345,149

Practical Expedients and Exemptions

We generally expense sales commissions when incurred because the amortization period would have been one year or less. These costs are recorded within selling, general, and administrative expense.

We have made an accounting policy election to treat outbound shipping and handling activities as an expense.

4. Assets Held for Sale

Three of our non-operating properties were designated as held for sale as of June 27, 2020. These properties consisted of three former distribution facilities located in the Midwest and Southeast. We vacated these properties and designated them as held for sale during fiscal 2019 due to their proximity to other locations after the Cedar Creek acquisition. As of June 27, 2020, and December 28, 2019, the net book value of total assets held for sale was $1.1 million and was included in “Other current assets” in our Condensed Consolidated Balance Sheets. We continue to actively market all properties that are designated as held for sale, and we plan to sell these properties within the next 12 months.

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5. Long-Term Debt

As of June 27, 2020, and December 28, 2019, long-term debt consisted of the following:

	June 27, 2020			December 28, 2019
	(In thousands)
Revolving Credit Facility (1)	$	322,223		$	326,496
Term Loan Facility (2)	68,822			146,674
Finance lease obligations (3)	272,580			198,011
	663,625			671,181
Unamortized debt issuance costs	(10,989		)	(12,555		)
	652,636			658,626
Less: current maturities of long-term debt	8,134			8,662
Long-term debt, net of current maturities	$	644,502		$	649,964

⁽¹⁾ The weighted average interest rate was 2.6 percent and 3.9 percent as of June 27, 2020 and December 28, 2019, respectively.

⁽²⁾ The weighted average interest rate was 8.0 percent and 8.7 percent as of June 27, 2020 and December 28, 2019, respectively.

⁽³⁾ Refer to Note 8, Leases, for interest rates associated with finance lease obligations.

Revolving Credit Facility

We have a revolving credit facility that we entered into in April 2018 with Wells Fargo Bank, National Association, as administrative agent, and certain other financial institutions party thereto (the “Revolving Credit Facility”), with a maturity date of October 10, 2022. The Revolving Credit facility includes a committed senior secured asset-based revolving loan and letter of credit facility of up to $600 million, and an uncommitted accordion feature that permits us to increase the facility by an aggregate additional principal amount of up to $150 million. Our obligations under the Revolving Credit Facility are secured by a security interest in substantially all of our assets other than real property.

Loans under the Revolving Credit Facility bear interest at a rate per annum equal to (i) LIBOR plus a margin ranging from 1.75 percent to 2.25 percent, with the amount of such margin determined based upon the average of our excess availability for the immediately preceding fiscal quarter as calculated by the administrative agent, for loans based on LIBOR, or (ii) the administrative agent’s base rate plus a margin ranging from 0.75 percent to 1.25 percent, with the amount of such margin determined based upon the average of our excess availability for the immediately preceding fiscal quarter as calculated by the administrative agent, for loans based on the base rate.

We amended the Revolving Credit Facility on January 31, 2020, to provide that (i) the “Seasonal Period” will run from November 15, 2019, through July 15, 2020, for the calendar year 2019, and from December 15 of each calendar year through April 15 of each immediately succeeding calendar year for the calendar year 2020 and thereafter, and (ii) the measurement period in the definition of “Cash Dominion Event” will be five consecutive business days instead of three consecutive business days. The adjustment to the Seasonal Period better aligns advance rates under the Revolving Credit Facility with the seasonality in our business and provided us with an enhanced borrowing base and greater liquidity through July 15, 2020.

As of June 27, 2020, we had outstanding borrowings of $322.2 million, excess availability of $138.1 million, and a weighted average interest rate of 2.6 percent. As of December 28, 2019, our principal balance was $326.5 million, excess availability was $80.0 million, and our weighted average interest rate was 3.9 percent.

The Revolving Credit Facility contains certain financial and other covenants, and our right to borrow under the Revolving Credit Facility is conditioned upon, among other things, our compliance with these covenants. We were in compliance with all covenants under the Revolving Credit Facility as of June 27, 2020.

Term Loan Facility

We have a term loan facility that we entered into in April 2018 with HPS Investments Partners, LLC, as administrative and collateral agent, and certain other financial institutions party thereto (the “Term Loan Facility”), with a maturity date of

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October 13, 2023. The Term Loan Facility provides for a senior secured first lien loan facility in an initial aggregate principal amount of $180 million and is secured by a security interest in substantially all of our assets.

The Term Loan Facility requires monthly interest payments, and also requires quarterly principal payments of $402,282, in arrears, with the remaining balance due on the maturity date. The Term Loan Facility also requires certain mandatory prepayments of outstanding loans, subject to certain exceptions. The Term Loan Facility requires maintenance of a total net leverage ratio of 8.75 to 1.00 for the quarter ending June 27, 2020 and the third quarter of 2020, and 5.25 to 1.00 for the fourth quarter of 2020; ratio levels generally reduce over the remaining term of the Term Loan Facility. We were in compliance with all covenants under the Term Loan Facility as of June 27, 2020.

Borrowings under the Term Loan Facility may be made as Base Rate Loans or Eurodollar Rate Loans. The Base Rate Loans will bear interest at the rate per annum equal to (i) the greatest of the (a) U.S. prime lending rate published in The Wall Street Journal, (b) the Federal Funds Effective Rate plus 0.50 percent, and (c) the sum of the Adjusted Eurodollar Rate of one month plus 1.00 percent, provided that the Base Rate shall at no time be less than 2.00 percent per annum; plus (ii) the Applicable Margin, as described below. Eurodollar Rate Loans will bear interest at the rate per annum equal to (i) the ICE Benchmark Administration LIBOR Rate, provided that the Adjusted Eurodollar Rate shall at no time be less than 1.00 percent per annum; plus (ii) the Applicable Margin. The Applicable Margin will be 6.00 percent with respect to Base Rate Loans and 7.00 percent with respect to Eurodollar Rate Loans.

We amended the Term Loan Facility on December 31, 2019, to extend the period for satisfying the designated principal balance level required to maintain the modified total net leverage ratio covenant levels for the 2019 fourth and subsequent quarters thereunder, which was satisfied on January 31, 2020, through repayments from proceeds from the real estate financing transactions described in Note 8. On February 28, 2020, we further amended the Term Loan Facility to provide that we would not be subject to the facility’s total net leverage ratio covenant from and after the time, and then for so long as, the principal balance level under the facility is less than $45 million. On April 1, 2020, we amended the Term Loan Facility to, among other things, modify the total net leverage ratio covenant levels for the 2020 second and third quarters. All other total net leverage ratio covenant levels for prior and future quarters were unchanged.

As of June 27, 2020, we had outstanding borrowings of $68.8 million under the Term Loan Facility and an interest rate of 8.0 percent per annum. As of December 28, 2019, our principal balance was $146.7 million with an interest rate of 8.7 percent per annum. The decrease in the outstanding borrowings was due to net proceeds of the real estate financing transactions described in Note 8 being applied to the Term Loan Facility.

Finance Lease Obligations

Our finance lease liabilities consist of leases related to equipment and vehicles, and real estate, with the majority of those finance leases related to real estate. For more information on our finance lease obligations, refer to Note 8, Leases.

6. Net Periodic Pension (Benefit) Cost

The following table shows the components of our net periodic pension (benefit) cost:

	Three Months Ended						Six Months Ended
	June 27, 2020			June 29, 2019			June 27, 2020			June 29, 2019
	(In thousands)						(In thousands)
Service cost	$	—		$	48		$	—		$	161
Interest cost on projected benefit obligation	723			973			1,446			2,018
Expected return on plan assets	(1,210		)	(1,295		)	(2,420		)	(2,489		)
Amortization of unrecognized loss	263			279			526			580
Net periodic pension (benefit) cost	$	(224	)	$	5		$	(448	)	$	270

7. Stock Compensation

Stock Compensation Expense

During the three months ended June 27, 2020, and June 29, 2019, we incurred stock compensation expense of $0.9 million and $0.6 million, respectively. During the six months ended June 27, 2020, and June 29, 2019, we incurred stock compensation

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expense of $1.9 million and $1.3 million, respectively. The increase in our stock compensation expense for the three- and six-month periods is attributable to having more outstanding equity-based awards during these periods than in the prior year and the vesting of awards in connection with the departure of certain employees.

8. Leases

We have operating and finance leases for certain of our distribution facilities, office space, land, mobile fleet, and equipment. Many of our leases are non-cancelable and typically have a defined initial lease term, and some provide options at our election to renew for specified periods of time. The majority of our leases have remaining lease terms of 1 year to 15 years, some of which include one or more options to extend the leases for 5 years. Our leases generally provide for fixed annual rentals. Certain of our leases include provisions for escalating rent based on, among other things, contractually defined increases and/or changes in the Consumer Price Index (“CPI”). Some of our leases require us to pay taxes, insurance, and maintenance expenses associated with the leased assets. Our lease agreements do not contain any material residual value guarantees or material restrictive covenants.

We determine if an arrangement is a lease at inception and assess lease classification as either operating or finance at lease inception or modification. Operating lease right-of use (“ROU”) assets and liabilities are presented separately on the condensed consolidated balance sheets. Finance lease ROU assets are included in property and equipment and the finance lease obligations are presented separately in the condensed consolidated balance sheet. When a lease does not provide an implicit interest rate, we use our incremental borrowing rate based on the information available at the commencement date in determining the present value of future payments. We have also made the accounting policy election to not separate lease components from non-lease components related to our mobile fleet asset class.

Finance Lease Liabilities

Our finance lease liabilities consist of leases related to equipment and vehicles, and real estate. As noted in the table below, a majority of our finance leases, formally known as capital leases, relate to real estate.

During 2017 and 2018, we entered into real estate financing transactions on warehouse facilities in Tampa, FL; Ft. Worth, TX; Bellingham, PA; Frederick, MD; Lawrenceville, GA; and Raleigh, NC. These transactions were completed pursuant to sale-leaseback arrangements, and upon their completion, we entered into long-term leases on the properties for initial terms of 15 years with multiple 5-year renewal options, with one having a single 10-year renewal option. We accounted for these transactions in accordance with the Financial Accounting Standards Board’s (“FASB”) Accounting Standards Codification (“ASC”) Topic 840, which was the lease accounting standard in effect at the inception of these arrangements. We have recorded these transactions as finance lease liabilities on our balance sheet. As of June 27, 2020 and December 28, 2019, total unrecognized deferred gains related to these transactions were $84.0 and $85.8 million, respectively.

On May 19, 2019, we completed a real estate financing transaction on a warehouse facility in University Park, IL for net proceeds of $21.8 million. On June 20, 2019, we completed a real estate financing transaction on a warehouse facility in Yulee, FL for net proceeds of $13.3 million. These two transactions were completed pursuant to sale-leaseback arrangements, and upon their completion, we entered into long-term leases on the properties for initial terms of 15 years with multiple 5-year renewal options. Gross proceeds of these transactions were $45.0 million.

On December 31, 2019, we completed real estate financing transactions on warehouse facilities in Madison, TN; Kansas City, MO; Richmond, VA; and Bridgeton, MO for aggregate net proceeds of $27.2 million. On January 31, 2020, we completed real estate financing transactions on warehouse facilities in Charlotte, NC; Memphis, TN; Independence, KY: San Antonio, TX; Portland, ME; Denville, NJ; Yaphank, NY; Pensacola, FL; and Tallmadge, OH for aggregate net proceeds of $34.1 million. On February 28, 2020, we completed a real estate financing transaction on a warehouse facility in Elkhart, IN for net proceeds of $7.5 million. These transactions were completed pursuant to sale-leaseback arrangements, and upon their completion, we entered into long-term leases on the properties for initial terms from 15 years to 18 years with multiple 5-year renewal options. Gross proceeds of these transactions were $78.3 million.

We determined that the transactions in fiscal 2019 and in the current fiscal year did not qualify as sales in accordance with ASC 842. Therefore, for accounting purposes, the transactions were not accounted for as sale-leaseback transactions, and no gain or loss was recorded. We determined that these leases qualified for finance lease treatment and recorded them accordingly. The net book value of the assets related to these transactions remains on our books as property and equipment and we continue to depreciate the assets over their remaining useful lives.

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A portion of our real estate lease cost is generally subject to annual changes in the Consumer Price Index (“CPI”). The known changes to lease payments are included in the lease liability at lease commencement. Unknown changes related to CPI are treated as variable lease payments and recognized in the period in which the obligation for those payments was incurred. In addition, a subset of our vehicle lease cost is considered variable.

The following table presents our assets and liabilities related to our leases as of June 27, 2020 and December 28, 2019:

		June 27, 2020		December 28, 2019
		(In thousands)
Assets	Classification
Operating lease right-of-use assets	Operating lease right of use assets	$	50,802	$	54,408
Finance lease right-of-use assets (1)	Property and equipment, net	153,176		141,922
Total lease right-of-use assets		$	203,978	$	196,330
Liabilities
Current portion
Operating lease liabilities	Operating lease liabilities - short term	$	6,633	$	7,317
Finance lease liabilities	Finance lease liabilities - short term	5,958		6,486
Non-current portion
Operating lease liabilities	Operating lease liabilities - long term	44,169		47,091
Finance lease liabilities	Finance lease liabilities - long term	266,622		191,525
Total lease liabilities		$	323,382	$	252,419

⁽¹⁾ Finance lease right-of-use assets are presented net of accumulated amortization of $51.3 and $30.8 million as of June 27, 2020 and December 28, 2019, respectively.

The components of lease expense were as follows:

	Three Months Ended				Six Months Ended
	June 27, 2020		June 29, 2019		June 27, 2020		June 29, 2019
	(In thousands)				(In thousands)
Operating lease cost:	$	2,977	$	2,991	$	6,098	$	6,135
Finance lease cost:
Amortization of right-of-use assets	$	3,513	$	3,220	$	6,878	$	6,117
Interest on lease liabilities	6,557		4,130		12,721		7,378
Total finance lease costs	$	10,070	$	7,350	$	19,599	$	13,495

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Supplemental cash flow information related to leases was as follows:

	Three Months Ended				Six Months Ended
	June 27, 2020		June 29, 2019		June 27, 2020		June 29, 2019
	(In thousands)				(In thousands)
Cash paid for amounts included in the measurement of lease liabilities
Operating cash flows from operating leases	$	2,860	$	3,064	$	5,633	$	5,967
Operating cash flows from finance leases	6,557		3,236		12,721		6,484
Financing cash flows from finance leases	2,403		2,216		4,583		4,403
Right-of-use assets obtained in exchange for lease obligations
Operating leases	$	—	$	—	$	—	$	—
Finance leases	—		3,462		—		4,250

Supplemental balance sheet information related to leases was as follows:

	June 27, 2020			December 28, 2019
	(In thousands)
Finance leases
Property and equipment	$	204,431		$	172,720
Accumulated depreciation	(51,255		)	(30,798		)
Property and equipment, net	$	153,176		$	141,922
Weighted Average Remaining Lease Term (in years)
Operating leases	11.66			11.71
Finance leases	16.58			17.12
Weighted Average Discount Rate
Operating leases	9.40		%	9.34		%
Finance leases	9.75		%	10.11		%

The major categories of our finance lease liabilities as of June 27, 2020 and December 28, 2019 are as follows:

	June 27, 2020		December 28, 2019
	(In thousands)
Equipment and vehicles	$	29,162	$	32,471
Real estate	243,418		165,540
Total finance leases	$	272,580	$	198,011

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As of June 27, 2020, maturities of lease liabilities were as follows:

	Operating leases			Finance leases
	(In thousands)
2020	$	11,109		$	15,385
2021	8,821			29,150
2022	7,876			28,449
2023	6,794			28,121
2024	6,441			27,793
Thereafter	47,514			408,524
Total lease payments	$	88,555		$	537,422
Less: imputed interest	(37,753		)	(264,842		)
Total	$	50,802		$	272,580

On December 28, 2019, maturities of lease liabilities were as follows:

	Operating leases			Finance leases
	(In thousands)
2020	$	11,348		$	24,002
2021	10,111			23,052
2022	8,048			22,230
2023	7,330			21,854
2024	6,413			21,380
Thereafter	50,901			327,439
Total lease payments	$	94,151		$	439,957
Less: imputed interest	(39,743		)	(241,946		)
Total	$	54,408		$	198,011

9. Commitments and Contingencies

Environmental and Legal Matters

From time to time, we are involved in various proceedings incidental to our businesses, and we are subject to a variety of environmental and pollution control laws and regulations in all jurisdictions in which we operate. Although the ultimate outcome of these proceedings cannot be determined with certainty, based on presently available information management believes that adequate reserves have been established for probable losses with respect thereto and receivables recorded for expected receipts from settlements. Management further believes that, while the ultimate outcome of one or more of these matters could be material to operating results in any given quarter, it will not have a materially adverse effect on our consolidated financial condition, our results of operations, or our cash flows.

Collective Bargaining Agreements

As of June 27, 2020, we had 2,000 employees on a full-time basis, and approximately 21 percent of our employees were represented by various local labor union Collective Bargaining Agreements (“CBAs”). Approximately 1 percent of our employees are covered by three CBAs that are up for renewal in fiscal 2020. As of June 27, 2020, one of these CBAs was renewed and the remaining two are expected to be renegotiated later this year.

10. Accumulated Other Comprehensive Loss

Comprehensive loss includes both net income (loss) and other comprehensive income (loss). Other comprehensive income (loss) results from items deferred from recognition into our Condensed Consolidated Statements of Operations and Comprehensive Loss. Accumulated other comprehensive loss is separately presented on our Condensed Consolidated Balance Sheets as part of stockholders’ deficit.

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The changes in balances for each component of accumulated other comprehensive loss for the six months ended June 27, 2020, were as follows:

	Foreign currency, net of tax		Defined benefit pension plan, net of tax			Other, net of tax			Total Accumulated Other Comprehensive Loss
	(In thousands)
December 28, 2019, beginning balance	$	666	$	(35,441	)	$	212		$	(34,563	)
Other comprehensive income, net of tax (1)	20		310			(17		)	313
June 27, 2020, ending balance, net of tax	$	686	$	(35,131	)	$	195		$	(34,250	)

⁽¹⁾ For the six months ended June 27, 2020, the actuarial loss recognized in the Condensed Consolidated Statements of Operations and Comprehensive Loss as a component of net periodic pension cost was $0.5 million, net of tax of $0.2 million. Please see Note 6, Net Periodic Pension (Benefit) Cost, for further information.

11. Income Taxes

Our effective tax rate for the three months ended June 27, 2020, and June 29, 2019, was 33.9 percent and 27.2 percent, respectively. Our effective tax rate for the three months ended June 27, 2020 was impacted by (i) recording discrete tax expense of $0.4 million for a shortfall on the vesting of our restricted stock units, (ii) the permanent addback of certain nondeductible expenses, including meals and entertainment and officer’s compensation, and (iii) the effect of the partial valuation allowance for separate company state income tax losses and previously nondeductible interest under 163(j) of the Internal Revenue Code (“IRC”). Our effective tax rate for the three months ended June 29, 2019, was impacted by the permanent addback of certain nondeductible expenses, including meals and entertainment and executive compensation, and the effect of the partial valuation allowance for separate company state income tax losses. In addition, we recorded discrete tax expense of $0.2 million for a shortfall on the vesting of our restricted stock units, which was offset by a $0.2 million discrete tax benefit for claiming tax credits.

Our effective tax rate was (36.8) percent and 29.5 percent, for the first six months of fiscal 2020 and 2019, respectively. Our effective tax rate for the six months ended June 27, 2020 was impacted by (i) the discrete tax benefit of $3.9 million resulting from the release of the valuation allowance associated with the nondeductible interest expense under Section 163(j) of the IRC as a result of changes under the Coronavirus Aid, Relief, and Economic Security (CARES) Act, which was enacted on March 27, 2020, and contained, among other things, several tax-based measures meant to counteract the effects of the COVID-19 pandemic, to increase the allowable percentage from 30 percent of adjusted taxable income to 50 percent of adjusted taxable income, (ii) recording discrete tax expense of $0.4 million for a shortfall on the vesting of our restricted stock units, (iii) the permanent addback of certain nondeductible expenses, including meals and entertainment and nondeductible compensation, and (iv) the effect of the partial valuation allowance for separate company state income tax losses and previously nondeductible interest expense under Section 163(j) of the IRC. Our effective tax rate for the six months ended June 29, 2019, was impacted by the permanent addback of certain nondeductible expenses, including meals and entertainment and executive compensation and the effect of the valuation allowance for separate company state income tax losses. In addition, during the first six months of fiscal 2019, we recorded discrete tax expense of $0.2 million for a shortfall on vesting of our restricted stock units, which was offset by a $0.2 million discrete tax benefit for claiming state tax credits.

Our financial statements contain certain deferred tax assets which primarily resulted from tax benefits associated with the loss before income taxes in prior years, as well as net deferred income tax assets resulting from other temporary differences related to certain reserves, pension obligations, and differences between book and tax depreciation and amortization. We record a valuation allowance against our net deferred tax assets when we determine that, based on the weight of available evidence, it is more likely than not that our net deferred tax assets will not be realized. The ultimate realization of deferred tax assets is dependent upon the generation of future taxable income during the periods in which those temporary differences can be carried forward under tax law. Currently, we have a valuation allowance that covers (i) our separate company state net operating loss carryforwards and (ii) disallowed interest calculated pursuant to the changes made by the Tax Cuts and Jobs Act of 2017, as adjusted by the CARES Act.

At the end of each quarter, we evaluate the weight of available evidence (both positive and negative). We considered the recent reported income generated in the current quarter and prior years (adjusted for unusual one-time items) and income generated in 2017, including the prior year income from Cedar Creek. We also considered evidence related to the four sources of taxable income to determine whether such positive evidence outweighed the negative evidence. The evidence considered included:

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• future reversals of existing taxable temporary differences;

• future taxable income exclusive of reversing temporary differences and carryforwards;

• taxable income in prior carryback years if carryback is permitted under the tax law; and

• tax planning strategies.

At the end of the first two fiscal quarters of 2020 and 2019, in our evaluation of the weight of available evidence, we concluded that the weight of the positive evidence outweighed the negative evidence. In addition to the evidence discussed above, we considered as positive evidence forecasted future taxable income, the detail scheduling of the timing of the reversal of our deferred tax assets and liabilities, and the evidence from business and tax planning strategies described below. Although we believe our estimates are reasonable, the ultimate determination of the appropriate amount of valuation allowance involves significant judgments. We believe that the change in control under IRC Section 382 resulting from the completion of the secondary offering on October 23, 2017, will not cause any of our federal net operating losses to expire unused because management has been effectively implementing a real estate strategy involving the sale and leaseback of real estate. This strategy is further supported by the transactions involving four warehouses in January 2018 and two warehouses during 2019. In the first quarter of 2020, the Company executed three more sale and leaseback transactions, involving a total of fourteen warehouse locations. Additionally, the acquisition of Cedar Creek did not generate any limitations under IRC Section 382 on Cedar Creek’s tax assets. We will continue to monitor any changes to our results of operations that may affect our estimates, including any impact of COVID-19 if applicable.

12. Income (Loss) per Share

We calculate basic income (loss) per share by dividing net income (loss) by the weighted average number of common shares outstanding. We calculate diluted income (loss) per share using the treasury stock method, by dividing net income (loss) by the weighted average number of common shares outstanding plus the dilutive effect of outstanding share-based awards, including restricted stock units, and performance units. Due to the financial results for the six month period ended June 27, 2019, 0.1 million of incremental shares were excluded from the computation of diluted weighted averages outstanding, because their effect would be anti-dilutive.

The reconciliation of basic net income (loss) and diluted net income (loss) per common share for the three- and six-month periods ended June 27, 2020, and June 29, 2019, were as follows:

	Three Months Ended				Six Months Ended
	June 27, 2020		June 29, 2019		June 27, 2020		June 29, 2019
	(In thousands, except per share data)				(In thousands, except per share data)
Net income (loss)	$	6,695	$	6,301	$	5,908	$	(418	)
Weighted-average shares outstanding - basic	9,395		9,351		9,381		9,344
Dilutive effect of share-based awards	7		8		2		—
Weighted-average shares outstanding - diluted	9,402		9,359		$	9,383	$	9,344
Basic income (loss) per share	$	0.71	$	0.67	$	0.63	$	(0.04	)
Diluted income (loss) per share	$	0.71	$	0.67	$	0.63	$	(0.04	)

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ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Overview

We are a leading distributor of building and industrial products in the U.S with a combination of market position and geographic coverage, the buying power of certain centralized procurement, and the strength of a locally focused sales force. BlueLinx is able to provide a wide range of value-added services and solutions to our customers and suppliers. We are headquartered in Marietta, Georgia, and we operate our distribution business through a broad network of distribution centers. We serve many major metropolitan areas in the U.S. and deliver building and industrial products to a variety of wholesale and retail customers. We distribute products in two principal categories: structural products and specialty products. Structural products include primarily plywood, oriented strand board, rebar and remesh, lumber, spruce and other wood products primarily used for structural support in construction projects. Structural products represented between 31 percent and 37 percent of our net sales over the past twelve months. Specialty products include primarily engineered wood products, moulding, siding and trim, cedar, metal products (excluding rebar and remesh), and insulation. Specialty products represented between 63 percent and 69 percent of our net sales over the past twelve months.

On April 13, 2018, we completed the acquisition of Cedar Creek. Cedar Creek was established in 1977 as a wholesale building materials distribution company that distributed wood products across the United States. Its products included specialty lumber, oriented strand board, siding, cedar, spruce, engineered wood products, and other building products. This acquisition allowed us to expand our product offerings, while maintaining our existing geographical footprint.

Recent Developments - Update on Impact of COVID-19 Pandemic

A novel strain of coronavirus (COVID-19) was first identified in December 2019 in certain Far East and European countries. On March 11, 2020, the spread of COVID-19 was declared a global pandemic by the World Health Organization, with a high concentration of cases in the United States. In response to the pandemic, governmental authorities around the world implemented numerous measures to combat the virus, such as travel bans and restrictions, quarantines, “shelter-in-place” orders, and business shutdowns. Over the course of the second quarter, these measures were successful in containing and reducing the spread of the COVID-19 virus in many locations, and many governmental authorities have begun to ease restrictions and execute plans to re-open businesses. However, the rates of infection, hospitalization, and mortality associated with the virus continue to fluctuate, and in some cases, they have increased, in many U.S. states. The pandemic and these containment measures have had, and are expected to continue to have, a substantial negative impact on businesses around the world and on global, regional, and national economies.

We began preparations for the pandemic in late February, and in early March we implemented policies and procedures to protect our associates, serve our customers, and support our suppliers. We also moved quickly to develop plans and take actions designed to give us financial and operating flexibility during the pandemic and over the course of the second quarter we continued to execute on those plans. To date, our business has been designated as “essential” in all states in which we operate, and we have continued to operate and provide service to our customers and suppliers. Also, notably, we have not experienced any significant supply chain disruptions as a result of the pandemic, and our supply chain has remained intact in all material respects.

During the quarter, our cross-functional COVID-19 Disaster Response Team implemented safety and hygiene protocols consistent with the Centers for Disease Control and Prevention (“CDC”) and local guidance, including mandating the use of face coverings where their use is required by local order; implementing enhanced cleaning and disinfecting procedures; using social distancing guidelines and physical separation where required; establishing more restrictive travel policies; implementing no-contact rules and visitor guidelines; implementing enhanced safety procedures for our drivers such as including contactless delivery procedures; using mobile work arrangements for employees whose work can be done remotely; and developing rapid response procedures for presumptive and confirmed COVID-19 cases at any of our locations.

We also took action on plans designed to reduce our cost structure, strengthen our balance sheet, and further increase liquidity in response to the pandemic. We took steps to reduce operating costs and optimize liquidity by pausing new hiring; limiting non-essential spending; closely monitoring and reviewing credit lines, open orders, overpaid accounts, and receivables aging; making substantial headcount and variable operating expense reductions in local markets correlating to demand declines; closely assessing and monitoring inventory availability and purchasing; placing approximately 15 percent of our corporate workforce on furlough, and making targeted reductions in corporate headcount; utilizing certain provisions of the Coronavirus Aid, Relief, and Economic Security (CARES) Act; and ongoing review and monitoring of payroll and branch expenses. While

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some of these actions are temporary in nature, we expect to sustain many of the cost reduction actions long-term, and we continue to remain focused on our cost structure and liquidity as the pandemic continues.

Overall, the impact of the pandemic on our business during the second quarter of 2020 was not as significant as we originally anticipated. Net sales and gross margin declined in April relative to the prior year period, but the commodity market for structural products began to stabilize and rebound in May and June. For the second quarter of 2020, net sales declined $7.7 million, primarily driven by the 2019 discontinuation of a siding product, and net income improved $0.4 million compared to the second quarter of 2019. For the first six months of 2020, net sales increased $15.7 million and net income improved $6.3 million as we moved from a net loss for the first six months of 2019 to net income for the first six months of 2020.

The extent of the impact of the pandemic on our business and sales for the second half of 2020 will depend on future developments, including, among others, the duration of the pandemic, the success of actions taken by governmental authorities to contain the pandemic and address its impact, the success of local return to work and business reopening plans, and the impact the COVID-19 pandemic has on demand in the markets we service. The trajectory of the pandemic continues to evolve rapidly, and we cannot predict the extent to which our financial condition, results of operations, or cash flows will ultimately be impacted. We are closely monitoring the impact of the pandemic on industry conditions, the progress of local return to work and reopening plans, and any pandemic-related restrictions that may have an impact on our business.

Industry Conditions

Many of the factors that cause our operations to fluctuate have historically been seasonal or cyclical in nature and we expect that to continue. Our operating results have historically been generally correlated with the level of single-family residential housing starts in the U.S. However, at any time, the demand for new homes is dependent on a variety of factors, including job growth, changes in population and demographics, the availability and cost of mortgage financing, the supply of new and existing homes, and consumer confidence.

The COVID-19 pandemic had a significant negative effect on single family housing starts during the second quarter of 2020. The U.S. Census Bureau reported that single family housing starts were down 13 percent for the second quarter of 2020 compared to the second quarter of 2019. However, the trend showed strong improvement over the course of the quarter. Housing starts declined 23 percent in April, 15 percent in May, and 2 percent in June, all compared to the same months in 2019. Additionally, July data from the National Association of Home Builders/Wells Fargo Housing Market Index shows a positive outlook in builder confidence in the market for newly built single-family homes. Low interest rates, shortages in existing home inventory, and a growing trend toward relocating away from populated metropolitan areas to areas with single-family homes may help drive long-term improvement in single-family housing starts.

Our operating results are also affected by commodity pricing, primarily the markets for wood-based commodities that we classify as structural products. After declining in the early part of April, lumber and panel prices increased for the balance of the quarter, staying at or above price levels from the second quarter of 2019. These market trends resulted in favorable revenue comparisons and enhanced gross margins in the second quarter of 2020 for many of the structural products that we sell.

Factors That Affect Our Operating Results

Our results of operations and financial performance are influenced by a variety of factors, including the following: the COVID-19 pandemic and other contagious illness outbreaks and their potential effects on our industry, suppliers and supply chains, and customers, our business, results of operations, cash flows, financial condition, and future prospects; changes in the prices, supply and/or demand for products that we distribute; inventory management and commodities pricing; new housing starts; repair and remodeling activity; general economic and business conditions in the U.S.; disintermediation by our customers and suppliers; acceptance by our customers of our branded and privately branded products; financial condition and credit worthiness of our customers; supply from key vendors; reliability of the technologies we utilize; activities of competitors; changes in significant operating expenses; fuel costs; risk of losses associated with accidents; exposure to product liability claims and other legal proceedings; changes in the availability of capital and interest rates; adverse weather patterns or conditions; acts of cyber intrusion or other disruptions to our information technology systems; tariffs, anti-dumping and counter-vailing duties, anti-dumping charges, and similar import costs and restrictions; and variations in the performance of the financial markets, including the credit markets.

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Results of Operations

The following table sets forth our results of operations for the second quarter of fiscal 2020 and fiscal 2019:

	Second Quarter of Fiscal 2020		% of Net Sales	Second Quarter of Fiscal 2019			% of Net Sales
	(In thousands)			(In thousands)
Net sales	$	698,776	100.0%	$	706,448		100.0%
Gross profit	100,820		14.4%	94,167			13.3%
Selling, general, and administrative	69,710		10.0%	70,150			9.9%
Depreciation and amortization	7,063		1.0%	7,503			1.1%
Gains from sales of property	—		0.0%	(9,760		)	(1.4)%
Other operating expenses	1,962		0.3%	3,951			0.6%
Operating income	22,085		3.2%	22,323			3.2%
Interest expense, net	11,535		1.7%	13,717			1.9%
Other expense (income), net	417		0.1%	(45		)	0.0%
Income before provision for income taxes	10,133		1.5%	8,651			1.2%
Provision for income taxes	3,438		0.5%	2,350			0.3%
Net income	$	6,695	1.0%	$	6,301		0.9%

The following table sets forth our results of operations for the six-month periods of fiscal 2020 and fiscal 2019:

	First Six Months of Fiscal 2020			% of Net Sales	First Six Months of 2019			% of Net Sales
	(In thousands)				(In thousands)
Net sales	$	1,360,846		100.0%	$	1,345,149		100.0%
Gross profit	194,029			14.3%	180,212			13.4%
Selling, general, and administrative	143,314			10.5%	139,235			10.4%
Depreciation and amortization	14,698			1.1%	14,831			1.1%
Gains from sales of property	(525		)	0.0%	(9,760		)	(0.7)%
Other operating expenses	6,127			0.5%	9,276			0.7%
Operating income	30,415			2.2%	26,630			2.0%
Interest expense, net	25,915			1.9%	27,118			2.0%
Other expense, net	180			0.0%	105			0.0%
Income (loss) before benefit from income taxes	4,320			0.3%	(593		)	0.0%
Benefit from income taxes	(1,588		)	(0.1)%	(175		)	0.0%
Net income (loss)	$	5,908		0.4%	$	(418	)	0.0%

The following table sets forth net sales by product category for the three and six-month periods ending June 27, 2020, and June 29, 2019:

	Three Months Ended				Six Months Ended
	June 27, 2020		June 29, 2019		June 27, 2020		June 29, 2019
	(In thousands)				(In thousands)
Structural products	$	249,571	$	224,528	$	490,349	$	421,314
Specialty products	449,205		481,920		870,497		923,835
Net sales	$	698,776	$	706,448	$	1,360,846	$	1,345,149

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The following table sets forth gross profit and gross margin percentages by product category for the three and six-month periods of fiscal 2020 and 2019:

	Three Months Ended						Six Months Ended
	June 27, 2020			June 29, 2019			June 27, 2020			June 29, 2019
	(Dollars in thousands)						(Dollars in thousands)
Structural products	$	23,100		$	17,388		$	47,334		$	36,121
Specialty products	77,720			76,779			146,695			144,091
Gross profit	$	100,820		$	94,167		$	194,029		$	180,212
Gross margin percentage by category
Structural products	9.3		%	7.7		%	9.7		%	8.6		%
Specialty products	17.3		%	15.9		%	16.9		%	15.6		%
Total	14.4		%	13.3		%	14.3		%	13.4		%

Second Quarter of Fiscal 2020 Compared to Second Quarter of Fiscal 2019

Net sales.  For the second quarter of fiscal 2020, net sales decreased 1.1 percent, or $7.7 million, compared to the second quarter of fiscal 2019. The sales decrease was driven by the loss of $15.9 million of sales related to a siding program that was discontinued in conjunction with our Cedar Creek integration activities in the prior year, partially offset by an increase in sales volume for our structural products and commodity price inflation.

Gross profit and gross margin.  For the second quarter of fiscal 2020, gross profit increased by $6.7 million, or 7.1 percent, compared to the second quarter of fiscal 2019, primarily due to improved gross margins on both our specialty and structural products businesses. Gross margin during the same period was 14.4 percent, an increase compared to 13.3 percent in the second quarter of fiscal 2019.

Selling, general, and administrative expenses.  The decrease in selling, general, and administrative expenses of 0.6 percent, or $0.4 million, for the second quarter of fiscal 2020, compared to the second quarter of fiscal 2019, is primarily due to decreases in our operational and logistics expenses, along with reductions in our fixed cost structure, partially offset by an increase in incentive compensation of approximately $4.0 million.

Depreciation and amortization expense. For the second quarter of fiscal 2020, depreciation and amortization expense decreased by $0.4 million to $7.1 million due to a lower base of depreciable assets.

Gains from sales of property. Gains from sales of property decreased by $9.8 million for the second quarter of fiscal 2020, compared to the second fiscal quarter of 2019, as we sold no property during the second quarter of 2020.

Other operating expenses. For the second quarter of fiscal 2020, other operating expenses decreased by $2.0 million, or 50.3 percent, compared to the second quarter of fiscal 2019, primarily due to a decrease in spending related to the integration of the Cedar Creek acquisition, partially offset by severance expense incurred in relation to headcount reductions that occurred during the quarter.

Interest expense, net. Interest expense decreased by $2.2 million for the second quarter of fiscal 2020, compared to the second quarter of fiscal 2019. The decrease was largely attributable to a decrease in the average debt balance, as well as a reduction in the variable LIBOR rate that is a component of the interest rate on the Revolving Credit Facility and Term Loan Facility.

Provision for income taxes. Our effective tax rate was 33.9 percent and 27.2 percent for the second quarter of fiscal 2020 and 2019, respectively. Our effective tax rate for the second quarter of fiscal 2020 was impacted by (i) discrete tax expense of $0.4 million for a shortfall on restricted stock unit vesting, (ii) the permanent addback of certain nondeductible expenses, including meals and entertainment and officer’s compensation, and (iii) the effect of the partial valuation allowance for separate company state income tax losses and previously nondeductible interest under 163(j) of the IRC. Our effective tax rate for the second quarter of fiscal 2019 was impacted by the permanent addback of certain nondeductible expenses, including meals and entertainment and executive compensation, and the effect of the partial valuation allowance for separate company state income tax losses. In addition, we recorded discrete tax expense of $0.2 million for a shortfall on vesting of our restricted stock units, which was offset by a $0.2 million discrete tax benefit for claiming state tax credits.

Net income. Our net income improved over the prior year period due to increased gross margins and reduced costs.

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First Six Months of Fiscal 2020 Compared to First Six Months of Fiscal 2019

Net sales.  For the first six months of fiscal 2020, net sales increased 1.2 percent, or $15.7 million, compared to the first six months of fiscal 2019. The sales increase was driven by higher sales volumes and commodity price inflation, partially offset by the loss of $47.8 million of sales related to a siding program that was discontinued in conjunction with our Cedar Creek integration activities in the prior year.

Gross profit and gross margin.  For the first six months of fiscal 2020, gross profit increased by $13.8 million, or 7.7 percent, compared to the first six months of fiscal 2019, primarily due to increased sales revenue and improved gross margins on both our specialty and structural products businesses. Gross margin during the same period was 14.3 percent, an increase compared to 13.4 percent in the first six months of fiscal 2019.

Selling, general, and administrative expenses.  The increase in selling, general, and administrative expenses of 2.9 percent, or $4.1 million, for the first six months of fiscal 2020, compared to the first six months of fiscal 2019, is primarily due to an increase in incentive compensation of approximately $4.0 million.

Depreciation and amortization expense. For the first six months of fiscal 2020, depreciation and amortization expense decreased by $0.1 million to $14.7 million compared to the first six months of fiscal 2019, due to a lower base of depreciable assets.

Gains from sales of property. Gains from sales of property decreased by $9.2 million for the first six months of fiscal 2020, compared to the first six months of fiscal 2019, due to only minor adjustments to previous transactions being recorded in 2020.

Other operating expenses. For the first six months of fiscal 2020, other operating expenses decreased by $3.1 million, or 33.9 percent, compared to the first six months of fiscal 2019, primarily due to a decrease in spending related to the integration of the Cedar Creek acquisition, partially offset by severance expense incurred in relation to headcount reductions that occurred during the quarter.

Interest expense. Interest expense decreased by $1.2 million for the first six months of fiscal 2020, compared to the first six months of fiscal 2019. The decrease was largely attributable to a decrease in the average debt balance, as well as a reduction in the variable LIBOR rate that is a component of the interest rate on the Revolving Credit Facility and Term Loan Facility.

Benefit from income taxes. Our effective tax rate was (36.8) percent and 29.5 percent for the first six months of fiscal 2020 and 2019, respectively. Our effective tax rate for the first six months of fiscal 2020 was impacted by (i) the discrete tax benefit of $3.9 million resulting from the release of the valuation allowance associated with the nondeductible interest expense under IRC Section 163(j) as a result of the CARES Act changing the allowable percentage from 30 percent of adjusted taxable income to 50 percent of adjusted taxable income, (ii) recording discrete tax expense of $0.4 million for a shortfall on vesting of our restricted stock units, (iii) the permanent addback of certain nondeductible expenses, including meals and entertainment and nondeductible compensation, and (iv) the effect of the partial valuation allowance for separate company state income tax losses and previously nondeductible interest expense under Section 163(j) of the IRC. Our effective tax rate for the first six months of fiscal 2019 was impacted by the permanent addback of certain nondeductible expenses, including meals and entertainment and executive compensation, and the effect of the partial valuation allowance for separate company state income tax losses. In addition, we recorded discrete tax expense of $0.2 million for a shortfall on vesting of our restricted stock units, which was offset by a $0.2 million discrete tax benefit for claiming state tax credits.

Net income (loss). Our net loss improved to net income from the prior year period due to higher sales, increased gross margins, and reduced costs associated with the acquisition of Cedar Creek.

Seasonality

We are exposed to fluctuations in quarterly sales volumes and expenses due to seasonal factors common in the building products distribution industry. The first and fourth fiscal quarters are typically our lower volume quarters, due to the impact of poor weather on the construction market. Our second and third fiscal quarters are typically our higher volume quarters, reflecting an increase in construction, due to more favorable weather conditions. Assuming no change in underlying inventory costs, our working capital generally increases in the fiscal second and third quarters, reflecting increased seasonal demand. However, due to the COVID-19 pandemic, we could experience disruptions to our typical seasonality trends during the rest of 2020.

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Liquidity and Capital Resources

We expect our primary sources of liquidity to be cash flows from sales in the normal course of our operations and borrowings under our Revolving Credit Facility. We expect that these sources will fund our ongoing cash requirements for the foreseeable future. We believe that, assuming that our operations are not significantly impacted by the COVID-19 pandemic for a prolonged period, our sales in the normal course of our operations, and amounts currently available from our Revolving Credit Facility and other sources, will be sufficient to fund our routine operations, including working capital requirements, for at least the next twelve months.

Revolving Credit Facility

In April 2018, we amended and restated our Revolving Credit Facility to provide for a senior secured revolving loan and letter of credit facility of up to $600 million and an uncommitted accordion feature that permits us to increase the facility by an aggregate additional principal amount of up to $150 million. If we obtain the full amount of the additional increases in commitments, the Revolving Credit Facility will allow borrowings of up to $750 million. Borrowings under the Revolving Credit Facility are subject to availability under the Borrowing Base (as that term is defined in the Revolving Credit Facility). Letters of credit in an aggregate amount of up to $30 million are also available under the Revolving Credit Facility, which would reduce the amount of the revolving loans available thereunder. Borrowings under the Revolving Credit Facility bear interest at a rate per annum equal to (i) LIBOR plus a margin ranging from 1.75 percent to 2.25 percent, with the margin determined based upon average excess availability for the immediately preceding fiscal quarter for loans based on LIBOR, or (ii) the administrative agent’s base rate plus a margin ranging from 0.75 percent to 1.25 percent, with the margin based upon average excess availability for the immediately preceding fiscal quarter for loans based on the base rate.

If excess availability falls below the greater of (i) $50 million and (ii) 10 percent of the lesser of (a) the borrowing base and (b) the maximum permitted credit at such time, the Revolving Credit Facility requires maintenance of a fixed charge coverage ratio of 1.0 to 1.0 until excess availability has been at least the greater of (i) $50 million and (ii) 10 percent of the lesser of (a) the borrowing base and (b) the maximum permitted credit at such time for a period of 30 consecutive days.

We amended the Revolving Credit Facility on January 31, 2020, to provide that (i) the “Seasonal Period” will run from November 15, 2019, through July 15, 2020, for the calendar year 2019, and from December 15 of each calendar year through April 15 of each immediately succeeding calendar year for the calendar year 2020 and thereafter, and (ii) the measurement period in the definition of “Cash Dominion Event” will be five consecutive business days instead of three consecutive business days.

As of June 27, 2020, we had outstanding borrowings of $322.2 million, excess availability of $138.1 million, and a weighted average interest rate of 2.6 percent under the Revolving Credit Facility. As of December 28, 2019, our principal balance was $326.5 million, excess availability was $80.0 million, and our weighted average interest rate was 3.9 percent.

We were in compliance with all covenants under the Revolving Credit Facility as of June 27, 2020.

Term Loan Facility

In April 2018, we entered into our Term Loan Facility with HPS Investment Partners, LLC, and other financial institutions as party thereto, which provides for a term loan of $180 million secured by substantially all of our assets. Borrowings under the Term Loan Facility may be made as Base Rate Loans or Eurodollar Rate Loans. The Base Rate Loans will bear interest at the rate per annum equal to (i) the greatest of the (a) U.S. prime lending rate published in The Wall Street Journal, (b) the Federal Funds Effective Rate plus 0.50 percent, and (c) the sum of the Adjusted Eurodollar Rate of one month plus 1.00 percent, provided that the Base Rate shall at no time be less than 2.00 percent per annum; plus (ii) the Applicable Margin, as described below. Eurodollar Rate Loans will bear interest at the rate per annum equal to (i) the ICE Benchmark Administration LIBOR Rate, provided that the Adjusted Eurodollar Rate shall at no time be less than 1.00 percent per annum; plus (ii) the Applicable Margin. The Applicable Margin will be 6.00 percent with respect to Base Rate Loans and 7.00 percent with respect to Eurodollar Rate Loans.

We amended the Term Loan Facility on December 31, 2019, to extend the period for satisfying the designated principal balance level required to maintain the modified total net leverage ratio covenant levels for the 2019 fourth and subsequent quarters thereunder, which was satisfied on January 31, 2020, through repayments from proceeds from the real estate financing transactions described in Note 8. On February 28, 2020, we further amended the Term Loan Facility to provide that we would not be subject to the facility’s total net leverage ratio covenant from and after the time, and then for so long as, the principal balance level under the facility is less than $45 million. On April 1, 2020, we amended the Term Loan Facility by, among other

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things, modifying the total net leverage ratio covenant levels for the 2020 second and third quarters. All other total net leverage ratio covenant levels for prior and future quarters were unchanged.

The Term Loan Facility permits us to enter into real estate sale leaseback transactions with the net proceeds therefrom to be used for repayment of indebtedness under the facility, subject to payment of an applicable prepayment premium. In addition, proceeds from the sale of “Specified Properties” will be used for the repayment of indebtedness under the Term Loan Facility, subject to payment of an applicable prepayment premium, or, under certain circumstances, repayment of indebtedness under our Revolving Credit Facility.

Unless and until the total net leverage ratio covenant is eliminated, the Term Loan Facility requires maintenance of a total net leverage ratio of 8.75 to 1.00 for the quarter ending June 27, 2020, and the third quarter of 2020, and 5.25 to 1.00 for the fourth quarter of 2020, with ratio levels generally reducing over the remaining term of the Term Loan Facility.

The calculation of the total net leverage ratio for any period is generally determined by taking our “Consolidated Total Debt” and dividing it by our “Consolidated EBITDA,” as those terms are defined in the Term Loan Facility. “Consolidated Total Debt” is generally determined by adding the balance of our term loan, the prior month’s average balance of our Revolving Credit Facility, and our equipment finance lease liability, and reducing that amount by unrestricted cash up to $10.0 million.  On June 27, 2020, the Term Loan Facility balance was $68.8 million, the average balance of the Revolving Credit Facility for the prior month was $320.1 million, our equipment finance lease liability was $29.2 million, and unrestricted cash was $10.0 million.  Liabilities related to sale-leaseback transactions are excluded from the calculation.  “Consolidated EBITDA” is generally determined by taking the Adjusted EBITDA that we report for the most recent four consecutive quarters and adjusting items specified under the Term Loan Facility. The adjustments to Adjusted EBITDA for calculating Consolidated EBITDA under the Term Loan Facility as of the end of the second quarter of 2020 for the most recent four consecutive quarters were approximately $3.0 million.

We were in compliance with all covenants under the Term Loan Facility as of June 27, 2020.

As of June 27, 2020, we had outstanding borrowings of $68.8 million under our Term Loan Facility and an interest rate of 8.0 percent per annum. As of December 28, 2019, our principal balance was $146.7 million with an interest rate of 8.7 percent per annum. The decrease in the outstanding borrowings was due to net proceeds of the real estate financing transactions described in Note 8 being applied to the Term Loan Facility.

Finance Lease Commitments

Our finance lease liabilities consist of leases related to equipment and vehicles, and to real estate, with the majority of those finance lease commitments relating to the real estate financing transactions that we have completed in recent years. During fiscal 2017 and 2018, we completed real estate financing transactions on six warehouse facilities; during 2019, we completed real estate financing transactions on two warehouse facilities; and, to date in fiscal 2020, we completed real estate financing transactions on fourteen warehouse facilities. We recognized finance lease assets and obligations as a result of each of these transactions. Our total finance lease commitments, including the properties associated with these transactions, totaled $272.6 million as of June 27, 2020.

Interest Rates

Our Revolving Credit Facility and our Term Loan Facility include available interest rate options based on the London Inter-bank Offered Rate (LIBOR). It is widely expected that LIBOR will be discontinued after 2021, and the U.S. and other countries are currently working to replace LIBOR with alternative reference rates. The consequences of these developments with respect to LIBOR cannot be entirely predicted; however, we do not believe that the discontinuation of LIBOR as a reference rate in our loan agreements will have a material adverse effect on our financial position or materially affect our interest expense.

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Sources and Uses of Cash

Operating Activities

Net cash provided by operating activities for the first six months of fiscal 2020 was $12.9 million, compared to net cash used in operating activities of $53.0 million in the first six months of fiscal 2019. The increase in cash provided by operating activities during the first six months of fiscal 2020 was a result of reporting net income for the current period and a decrease in working capital compared to the prior year period.

Investing Activities

Net cash used in investing activities for the first six months of fiscal 2020 was $1.7 million compared to net cash provided by investing activities of $15.0 million in the first six months of fiscal 2019. The net cash provided by investing activities in the prior year was due to $6.0 million that was returned from escrow after the Cedar Creek acquisition was finalized and $10.8 million of proceeds from asset sales, offset by cash paid for property and equipment investments of $1.8 million; cash paid for property and equipment investments was consistent in both periods.

Financing Activities

Net cash used in financing activities totaled $11.4 million for the first six months of fiscal 2020, compared to net cash provided by financing activities of $41.8 million for the first six months of fiscal 2019. The decrease in net cash provided by financing activities is primarily due to an increase in repayments on our Revolving Credit Facility and Term Loan Facility of $70.8 million and a reduction in borrowings on our Revolving Credit Facility of $15.3 million, offset by an increase in proceeds from real estate financing transactions of $33.4 million.

Operating Working Capital ⁽¹⁾ 

Selected financial information
	June 27, 2020		December 28, 2019		June 29, 2019
	(In thousands)
Current assets:
Cash	$	11,530	$	11,643	$	12,662
Receivables, less allowance for doubtful accounts	264,642		192,872		262,042
Inventories, net	313,979		345,806		358,652
	$	590,151	$	550,321	$	633,356
Current liabilities:
Accounts payable (2)	$	158,920	$	132,348	$	174,860
	$	158,920	$	132,348	$	174,860
Operating working capital	$	431,231	$	417,973	$	458,496

⁽¹⁾ Operating working capital is defined as the sum of cash, receivables, and inventory less accounts payable.

⁽²⁾ Accounts payable includes outstanding payments of $19.5 million, $16.1 million, and $37.1 million as of June 27, 2020, December 28, 2019, and June 29, 2019, respectively. Outstanding payments represent outstanding checks and electronic payments that have not been presented for payment as of the end of the period; these amounts are typically funded within 24 hours.

Operating working capital is an important measurement we use to determine the efficiencies of our operations and our ability to readily convert assets into cash.

Operating working capital of $431.2 million on June 27, 2020, compared to $418.0 million as of December 28, 2019, increased on a net basis by approximately $13.3 million. The increase in operating working capital is primarily driven by seasonal increases in accounts receivable, offset by decreases in inventory due to the company’s tighter management of inventory levels. The net increase in current assets was offset by an increase in accounts payable due to recent inventory purchases during the month of June.

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Operating working capital of $431.2 million on June 27, 2020, compared to $458.5 million as of June 29, 2019, decreased by $27.3 million, driven by decreases in the company’s inventory level, offset by a decrease in accounts payable.

Critical Accounting Policies

The preparation of our consolidated financial statements and related disclosures in conformity with GAAP requires our management to make judgments and estimates that affect the amounts reported in our condensed consolidated financial statements and accompanying notes. There have been no material changes to our critical accounting policies from the information provided in Item 7 of our Annual Report on Form 10-K for the fiscal year ended December 28, 2019.

Forward-Looking Statements

This report 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,” “expect,” “estimate,” “intend,” “project,” “plan,” “will be,” “will likely continue,” “will likely result” or words or phrases of similar meaning. The forward-looking statements in this report include statements about the COVID-19 pandemic, its duration and effects, and its potential effects on our business and results of operations; anticipated effects of adopting certain accounting standards; estimated future annual amortization expense; potential changes to estimates made in connection with revenue recognition; the expected outcome of legal proceedings; industry conditions; seasonality; and liquidity and capital resources.

Forward-looking statements are based on estimates and assumptions made by our management that, although believed by us to be reasonable, are inherently uncertain. Forward-looking statements involve risks and uncertainties that may cause our business, strategy, or actual results to differ materially from the forward-looking statements. These risks and uncertainties include those discussed under the heading “Risk Factors” in Item 1A of our Annual Report on Form 10-K for the year ended December 28, 2019, and those discussed elsewhere in this report (including Item 1A of Part II of this report) and in future reports that we file with the SEC. 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: the COVID-19 pandemic and other contagious illness outbreaks and their potential effects on our industry, suppliers and supply chain, and customers, and our business, results of operations, cash flows, financial condition, and future prospects; our ability to integrate and realize anticipated synergies from acquisitions; loss of material customers, suppliers, or product lines in connection with acquisitions; operational disruption in connection with the integration of acquisitions; our indebtedness and its related limitations; sufficiency of cash flows and capital resources; our ability to monetize real estate assets; fluctuations in commodity prices; adverse housing market conditions; disintermediation by customers and suppliers; changes in prices, supply and/or demand for our products; inventory management; competitive industry pressures; industry consolidation; product shortages; loss of and dependence on key suppliers and manufacturers; import taxes and costs, including new or increased tariffs, anti-dumping duties, countervailing duties or similar duties; our ability to successfully implement our strategic initiatives; fluctuations in operating results; sale-leaseback transactions and their effects; real estate leases; changes in interest rates; exposure to product liability claims; our ability to complete offerings under our shelf registration statement on favorable terms, or at all; changes in our product mix; petroleum prices; information technology security and business interruption risks; litigation and legal proceedings; natural disasters and unexpected events; activities of activist stockholders; labor and union matters; limits on net operating loss carryovers; pension plan assumptions and liabilities; risks related to our internal controls; retention of associates and key personnel; federal, state, local and other regulations, including environmental laws and regulations; and changes in 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.

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ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Not applicable.

ITEM 4. CONTROLS AND PROCEDURES

Our management performed an evaluation, as of the end of the period covered by this report on Form 10-Q, under the supervision of our chief executive officer and chief financial officer, of the effectiveness of the design and operation of our disclosure controls and procedures (as defined in Rule 13a-15(e) and 15d-15(e) of the Securities and Exchange Act of 1934, as amended (the “Exchange Act”)). Based on that evaluation, our chief executive officer and chief financial officer have concluded that our disclosure controls and procedures are effective to ensure that information required to be disclosed by us in reports that we file or submit under the Exchange Act is recorded, processed, summarized, and reported within the time periods specified in the SEC’s rules and forms, and is accumulated and communicated to our management including our chief executive officer and chief financial officer, to allow timely decisions regarding required disclosure.

During the period covered by this report, other than described below, there have been no changes in our internal control over financial reporting that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

26

PART II. OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

During the second quarter of fiscal 2020, there were no material changes to our legal proceedings as disclosed in our Annual Report on Form 10-K for the year ended December 28, 2019. Additionally, we are, and from time to time may be, a party to routine legal proceedings incidental to the operation of our business. The outcome of any pending or threatened proceedings is not expected to have a material adverse effect on our financial condition, operating results, or cash flows, based on our current understanding of the relevant facts. Legal expenses incurred related to these contingencies are generally expensed as incurred.

ITEM 1A. RISK FACTORS

In addition to the other information set forth in this report, you should carefully consider the factors discussed in Part I, "Item 1A.Risk Factors" in our Annual Report on Form 10-K for the year ended December 28, 2019, as updated and supplemented below, which could materially affect our business, financial condition or future results. The risks described in this report and in our Annual Report on Form 10-K are not the only risks facing our Company. Additional risks and uncertainties not currently known to us or that we currently deem to be immaterial also may materially adversely affect our business, financial condition or future results.

Our business, results of operations, and financial condition may be materially adversely impacted by the COVID-19 pandemic.

A novel strain of coronavirus (COVID-19) was first identified in December 2019 in certain Far East and European countries. On March 11, 2020, the spread of COVID-19 was declared a global pandemic by the World Health Organization, with a high concentration of cases in the United States. On March 13, 2020, the United States declared a national emergency concerning the pandemic, and many U.S. states and municipalities have declared public health emergencies. In response, U.S. federal, state, and local governments and agencies have enacted wide-ranging actions to combat the pandemic, including “shelter-in-place” orders and quarantines, social distancing mandates, and face covering and hygiene protocols. In addition, some U.S. states and municipalities have placed significant limits on non-essential construction projects. These actions have substantially restricted daily activities for individuals and businesses, and have caused many businesses to curtail or cease normal operations.

The widespread health crisis created by the COVID-19 pandemic and the actions taken to combat it have had a significant adverse effect on the economies and financial markets of the U.S. and many other countries. The U.S. has experienced deteriorating economic conditions in many major markets, including increased unemployment, decreases in disposable income, declines in consumer confidence, general economic slowdowns, and significant volatility in financial markets. These deteriorating economic conditions may reduce demand for our products, which could materially reduce our sales and profitability. In addition, any bankruptcy or financial distress of our customers or suppliers due to deterioration in economic conditions could result in other significant negative impacts to our business including reduced sales, decreased collectability of accounts receivable, impaired credit, an ineffective supply chain, loss of credit from our suppliers, and a reduction in certain key product brands. Deteriorating economic conditions and reduced sales and profitability could also limit the availability of credit, or increase our borrowing costs, including by requiring additional collateral. We also may be required to record impairment charges with respect to assets whose fair values may be negatively affected by the effects of the pandemic on our operations.

In addition, although our operations and those of most of our direct customers and suppliers are currently considered “essential” and are therefore exempt from state and local business closure orders, these exemptions may not mitigate the impact to our markets caused by the COVID-19 pandemic, and they may be curtailed or revoked in the future. If these exemptions are curtailed or revoked, it could require us, or our customers or suppliers, to further limit our operations or suspend them altogether, which would adversely impact our business, operating results, and financial condition. The pandemic has also caused, and may continue to cause, disruption to the global supply chain, which could impact our ability to source products from our suppliers, many of whom are located outside of the United States, including China.

In response to the pandemic, we have instituted a number of actions to protect our workforce, including restricting business travel, imposing mandatory quarantine periods for employees who have traveled to areas impacted by the pandemic, modifying office functions to allow employees to work remotely, and modifying our warehouse and delivery operations to enforce enhanced safety protocols around social distancing, hygiene, and health screening. While all of these steps are necessary and appropriate in light of the pandemic, they, coupled with state and local business closure orders and regulations, do impact our ability to operate our business in its ordinary and traditional course, and they have and may continue to cause us to experience reductions in productivity and disruptions to our business routines while they remain in place.

27

While many states have begun the process of lifting or curtaining shelter-in-place, business closure, and related orders, the rates of infection, hospitalization, and mortality associated with the COVID-19 virus continue to fluctuate, and have increased in some localities. The potential magnitude or duration of the business and economic impacts from this pandemic continue to remain uncertain, and many of the associated negative trends may continue through fiscal 2020. While the initial negative impact on our business from the COVID-19 pandemic has not been as significant as we initially expected, it could become more severe. Any of the negative impacts of the COVID-19 pandemic, including those described above, alone or in combination with others, may have a material adverse effect on our results of operations, financial condition, and cash flows. In addition, any of these negative impacts, alone or in combination with others, could exacerbate many of the risks described in Part I, “Item 1A. Risk Factors”, in our Annual Report on Form 10-K for the year ended December 28, 2019, and the other risks described in this report. The full extent to which the COVID-19 pandemic will negatively affect our results of operations, financial condition, and cash flows will depend on future developments that are highly uncertain and cannot be predicted.

We have been notified that we are not in compliance with certain listing standards of the New York Stock Exchange (NYSE), and we may be unable to regain compliance.

On April 22, 2020, we were notified by the NYSE that we were not in compliance with the continued listing standards set forth in Section 802.01B of the New York Stock Exchange Listed Company Manual because our average global market capitalization over a consecutive 30 trading-day period was less than $50 million, and, at the same time, our stockholders’ equity was less than $50 million.

On April 28, 2020, we submitted, and on May 14, 2020, the NYSE accepted, our plan to regain conformity with this NYSE listing standard by January 1, 2022, in accordance with NYSE rules. Our common stock will continue to be listed and traded on the NYSE during the cure period, subject to our compliance with other continued listing standards, and we will be subject to quarterly monitoring by the NYSE for compliance with the plan. The NYSE will deem us to have regained compliance if, during the cure period, we comply with the relevant continued listing standards, or qualify under an original listing standard, for a period of two consecutive quarters. Until the NYSE determines that we have regained compliance, our common stock trading symbol of “BXC” will have an added designation of “.BC” to indicate that the status of the common stock is “below compliance” with the NYSE continued listing standards. If we fail to comply with the plan, do not meet continued listing standards at the end of the allowed cure period, or in the event that our common stock trades at levels viewed to be abnormally low by the NYSE, our common stock will be subject to the prompt initiation of NYSE suspension and delisting procedures. There can be no assurance that our plans to regain compliance will be successful.

We believe that the erosion of our average market capitalization was a direct result of the effects of the COVID-19 pandemic on the stock market, and we expect that a return to normalcy in the stock market should return our market capitalization to a compliant level. Our 30 trading-day average global market capitalization was $69.8 million and $91.0 million at June 27, 2020, and July 31, 2020, respectively, in each case in excess of the $50 million required by the listing standard; however, a delisting would have an adverse effect on the liquidity of our common stock and, as a result, the market price for our common stock might decline if our common stock is delisted. Delisting could also make it more difficult for us to raise additional capital.

28

ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

The following table summarizes the Company’s common stock repurchase activity for each month of the quarter ended June 27, 2020:

		Total Number
		Shares	Average Price
Period		Purchased(1)	Paid Per Share
March 29 - May 2, 2020		—	$	—
May 3 - May 30, 2020		—	$	—
May 31 - June 27, 2020		27,522	$	8.98
Total		27,522
(1)	The Company did not repurchase any of its equity securities during the period covered by this report pursuant to any publicly announced plan or program, and no such plan or program is presently in effect. All purchases reflected in the table above pertain to purchases of common stock by the Company in connection with tax withholding obligations of the Company’s employees upon the vesting of such employees’ restricted stock awards.

ITEM 3. DEFAULTS UPON SENIOR SECURITIES

None.

ITEM 4. MINE SAFETY DISCLOSURES

Not applicable.

ITEM 5. OTHER INFORMATION

On August 3, 2020, in light of the performance by the Company during its 2020 second fiscal quarter and July, the Compensation Committee of the Company’s Board of Directors (the “Committee”) rescinded the voluntary reduction of the base salary of the Company’s President and Chief Executive Officer, Mitchell B. Lewis, and reinstated his annual base salary of $850,000 effective August 1, 2020. Mr. Lewis’s base salary had been reduced to, and paid at, $1 per month for the months of April through July 2020 at the request of Mr. Lewis and pursuant to the Committee’s previous approval.

29

ITEM 6. EXHIBITS

Exhibit Number		Description
10.1		Sixth Amendment to Credit and Guaranty Agreement, dated April 1, 2020, by and among BlueLinx Holdings Inc., as borrower, certain subsidiaries of BlueLinx Holdings Inc., as guarantors, the lenders party thereto, and HPS Investment Partners, LLC, in its capacity as administrative agent (incorporated by reference to Exhibit 10.1 to the Company’s Form 8‑K filed with the Securities and Exchange Commission on April 7, 2020).
10.2	*	Letter Agreement, dated March 30, 2020, between BlueLinx Corporation and Alexander Averitt.
31.1	*	Certification of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
31.2	*	Certification of Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
32.1	**	Certification of Chief Executive Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
32.2	**	Certification of Chief Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
101.Def		Definition Linkbase Document.
101.Pre		Presentation Linkbase Document.
101.Lab		Labels Linkbase Document.
101.Cal		Calculation Linkbase Document.
101.Sch		Schema Document.
101.Ins		Instance Document - the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document.
	*	Filed herewith.
	**	Exhibit is being furnished and shall not be deemed to be “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, or otherwise subject to the liabilities of that Section, nor shall it be deemed incorporated by reference into any filing under the Securities Act of 1933, as amended.

30

SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

		BlueLinx Holdings Inc.
		(Registrant)
Date: August 3, 2020	By:	/s/ Kelly C. Janzen
		Kelly C. Janzen
		Senior Vice President and Chief Financial Officer

31

EX-10.2

BlueLinx Corporation 1950 Spectrum Circle, Suite 300 Marietta, GA 30067 www.bluelinxco.com 770.953.7000 March 30, 2020 Alexander Averitt Via email Dear Alex, In light of the COVID-19 pandemic and the likely impact on our business, you have voluntarily agreed to reduce your monthly base salary by 10% for an initial period of six months (which may be extended at your request), effective as of April 1, 2020. This letter confirms that the decrease in your base salary is a temporary decrease that will not be considered a reduction of your base salary for any purpose under any employment agreement (other than for the purpose of actually making reduced payments of base salary to you during this voluntary period of decrease) or any severance plan. By signing below, you agree that you have requested and consented to the decrease in base salary, and that such decrease is not a breach of, and does not impact or trigger any benefits under, any employment agreement or severance plan. BlueLinx Corporation /s/ Mitchell B. Lewis Mitchell B. Lewis President and CEO Agreed to as of March 30, 2020 /s/ Alexander Averitt Alexander Averitt

EX-31.1

EXHIBIT 31.1

 CERTIFICATION REQUIRED BY RULE 13a-14(a) OR RULE 15d-14(a) OF THE SECURITIES

EXCHANGE ACT OF 1934

I, Mitchell B. Lewis, certify that:

(1) I have reviewed this quarterly report on Form 10-Q of BlueLinx Holdings Inc.;

(2) Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

(3) Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

(4) The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f))for the registrant and have:

(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

(5) The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

August 3, 2020	/s/ Mitchell B. Lewis
	Mitchell B. Lewis
	President and Chief Executive Officer

EX-31.2

EXHIBIT 31.2

 CERTIFICATION REQUIRED BY RULE 13a-14(a) OR RULE 15d-14(a) OF THE SECURITIES

EXCHANGE ACT OF 1934

I, Kelly C. Janzen, certify that:

(1) I have reviewed this quarterly report on Form 10-Q of BlueLinx Holdings Inc.;

(2) Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

(3) Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

(4) The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f))for the registrant and have:

(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

(5) The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

August 3, 2020	/s/ Kelly C. Janzen
	Kelly C. Janzen
	Senior Vice President and Chief Financial Officer

EX-32.1

EXHIBIT 32.1

BLUELINX HOLDINGS INC.

CERTIFICATION PURSUANT TO

18 U.S.C. SECTION 1350

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the quarterly report of BlueLinx Holdings Inc. (the “Company”) on Form 10-Q for the period ending June 27, 2020, as filed with the United States Securities and Exchange Commission on the date hereof (the “Report”), I, Mitchell B. Lewis, Chief Executive Officer of the Company, do hereby certify, pursuant to 18 U.S.C. 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:

(1) The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and

(2) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

August 3, 2020	/s/ Mitchell B. Lewis
	Mitchell B. Lewis
	President and Chief Executive Officer

EX-32.2

EXHIBIT 32.2

BLUELINX HOLDINGS INC.

CERTIFICATION PURSUANT TO

18 U.S.C. SECTION 1350

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the quarterly report of BlueLinx Holdings Inc. (the “Company”) on Form 10-Q for the period ending June 27, 2020, as filed with the United States Securities and Exchange Commission on the date hereof (the “Report”), I, Kelly C. Janzen, Senior Vice President and Chief Financial Officer of the Company, do hereby certify, pursuant to 18 U.S.C. 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:

(1) The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and

(2) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

August 3, 2020	/s/ Kelly C. Janzen
	Kelly C. Janzen
	Senior Vice President and Chief Financial Officer

XML

Cover Page - shares	6 Months Ended
	Jun. 27, 2020	Jul. 31, 2020
Cover [Abstract]
Document Type	10-Q
Document Quarterly Report	true
Document Period End Date	Jun. 27, 2020
Document Transition Report	false
Entity File Number	001-32383
Entity Registrant Name	BlueLinx Holdings Inc.
Entity Incorporation, State or Country Code	DE
Entity Tax Identification Number	77-0627356
Entity Address, Address Line One	1950 Spectrum Circle, Suite 300
Entity Address, City or Town	Marietta
Entity Address, State or Province	GA
Entity Address, Postal Zip Code	30067
City Area Code	770
Local Phone Number	953-7000
Title of 12(b) Security	Common Stock, par value $0.01 per share
Trading Symbol	BXC
Security Exchange Name	NYSE
Entity Current Reporting Status	Yes
Entity Interactive Data Current	Yes
Entity Filer Category	Accelerated Filer
Entity Small Business	true
Entity Emerging Growth Company	false
Entity Shell Company	false
Entity Common Stock, Shares Outstanding		9,461,412
Entity Central Index Key	0001301787
Current Fiscal Year Date	--01-02
Amendment Flag	false
Document Fiscal Year Focus	2020
Document Fiscal Period Focus	Q2

XML

CONDENSED CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands	Jun. 27, 2020	Dec. 28, 2019
Current assets:
Cash	$ 11,530	$ 11,643
Receivables, less allowances of $3,911 and $3,236, respectively	264,642	192,872
Inventories, net	313,979	345,806
Other current assets	26,509	27,718
Total current assets	616,660	578,039
Property and equipment, at cost	308,616	308,067
Accumulated depreciation	(122,123)	(112,299)
Property and equipment, net	186,493	195,768
Operating lease right-of-use assets	50,802	54,408
Goodwill	47,772	47,772
Intangible assets, net	22,591	26,384
Deferred tax assets	54,494	53,993
Other non-current assets	20,292	15,061
Total assets	999,104	971,425
Current liabilities:
Accounts payable	158,920	132,348
Accrued compensation	11,140	7,639
Current maturities of long-term debt, net of debt issuance costs of $74 and $74, respectively	2,176	2,176
Finance lease liabilities - short-term	5,958	6,486
Operating lease liabilities - short-term	6,633	7,317
Real estate deferred gains - short-term	4,040	3,935
Other current liabilities	11,011	11,222
Total current liabilities	199,878	171,123
Non-current liabilities:
Long-term debt, net of debt issuance costs of $10,915 and $12,481, respectively	377,880	458,439
Finance lease liabilities - long-term	266,622	191,525
Operating lease liabilities - long-term	44,169	47,091
Real estate deferred gains - long-term	79,984	81,886
Pension benefit obligation	22,109	23,420
Other non-current liabilities	26,710	24,024
Total liabilities	1,017,352	997,508
Commitments and Contingencies
STOCKHOLDERS’ DEFICIT:
Common Stock, $0.01 par value, 20,000,000 shares authorized, 9,461,412 and 9,365,768 outstanding on June 27, 2020 and December 28, 2019, respectively	95	94
Additional paid-in capital	262,587	260,974
Accumulated other comprehensive loss	(34,250)	(34,563)
Accumulated stockholders’ deficit	(246,680)	(252,588)
Total stockholders’ deficit	(18,248)	(26,083)
Total liabilities and stockholders’ deficit	$ 999,104	$ 971,425

XML

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 27, 2020	Jun. 29, 2019	Jun. 27, 2020	Jun. 29, 2019
Income Statement [Abstract]
Net sales	$ 698,776	$ 706,448	$ 1,360,846	$ 1,345,149
Cost of sales	597,956	612,281	1,166,817	1,164,937
Gross profit	100,820	94,167	194,029	180,212
Operating expenses:
Selling, general, and administrative	69,710	70,150	143,314	139,235
Depreciation and amortization	7,063	7,503	14,698	14,831
Gains from sales of property	0	(9,760)	(525)	(9,760)
Other operating expenses	1,962	3,951	6,127	9,276
Total operating expenses	78,735	71,844	163,614	153,582
Operating income	22,085	22,323	30,415	26,630
Non-operating expenses (income):
Interest expense, net	11,535	13,717	25,915	27,118
Other (income) expense, net	417	(45)	180	105
Income (loss) before provision for (benefit from) income taxes	10,133	8,651	4,320	(593)
Provision for (benefit from) income taxes	3,438	2,350	(1,588)	(175)
Net income (loss)	$ 6,695	$ 6,301	$ 5,908	$ (418)
Basic income (loss) (in dollars per share)	$ 0.71	$ 0.67	$ 0.63	$ (0.04)
Diluted income (loss) (in dollars per share)	$ 0.71	$ 0.67	$ 0.63	$ (0.04)
Comprehensive income (loss):
Net loss	$ 6,695	$ 6,301	$ 5,908	$ (418)
Other comprehensive income (loss):
Foreign currency translation, net of tax	17	0	20	7
Amortization of unrecognized pension loss, net of tax	114	208	310	431
Pension curtailment, net of tax	0	(1,486)	0	(632)
Total other comprehensive income (loss)	2	1	(17)	16
Total other comprehensive income (loss)	133	(1,277)	313	(178)
Comprehensive income (loss)	$ 6,828	$ 5,024	$ 6,221	$ (596)

XML

CONDENSED CONSOLIDATED BALANCE SHEETS (Parentheticals) - USD ($) $ in Thousands	Jun. 27, 2020	Dec. 28, 2019
Statement of Financial Position [Abstract]
Allowance for doubtful accounts receivable	$ 3,911	$ 3,236
Debt discount, current	74	74
Debt discount, noncurrent	$ 10,915	$ 12,481
Common stock, par value (in dollars per share)	$ 0.01	$ 0.01
Common stock, shares authorized (in shares)	20,000,000	20,000,000
Common stock, shares issued (in shares)	9,461,412	9,365,768
Common stock, shares outstanding (in shares)	9,461,412	9,365,768

XML

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands	3 Months Ended				6 Months Ended		12 Months Ended
	Jun. 27, 2020	Mar. 28, 2020	Jun. 29, 2019	Mar. 30, 2019	Jun. 27, 2020	Jun. 29, 2019	Dec. 28, 2019
Cash flows from operating activities:
Net income (loss)	$ 6,695	$ (787)	$ 6,301	$ (6,719)	$ 5,908	$ (418)
Adjustments to reconcile net income (loss) to cash provided by (used in) operations:
Benefit from income taxes	3,438		2,350		(1,588)	(175)
Depreciation and amortization	7,063		7,503		14,698	14,831
Amortization of debt issuance costs					1,903	1,614
Gains from sales of property	0		(9,760)		(525)	(9,760)
Amortization of deferred gain					(1,967)	(1,902)
Share-based compensation					1,858	1,341
Changes in operating assets and liabilities:
Accounts receivable					(71,770)	(53,608)
Inventories					31,827	(16,800)
Accounts payable					26,572	25,672
Prepaid and other current assets					(3,200)	(8,078)
Other assets and liabilities					9,185	(5,766)
Net cash provided by (used in) operating activities					12,901	(53,049)
Cash flows from investing activities:
Acquisition of business, net of cash acquired					0	6,009
Proceeds from sale of assets					102	10,758
Property and equipment investments					(1,752)	(1,784)
Net cash (used in) provided by investing activities					(1,650)	14,983
Cash flows from financing activities:
Borrowings on revolving credit facilities					350,236	365,519
Repayments on revolving credit facilities					(354,509)	(329,683)
Repayments on term loan					(77,852)	(31,899)
Proceeds from real estate financing transactions					78,263	44,822
Debt financing costs					(2,665)	(2,359)
Repurchase of shares to satisfy employee tax withholdings					(254)	(208)
Principal payments on finance lease liabilities	(2,403)		(2,216)		(4,583)	(4,403)
Net cash (used in) provided by financing activities					(11,364)	41,789
Net change in cash					(113)	3,723
Cash at beginning of period		$ 11,643		$ 8,939	11,643	8,939	$ 8,939
Cash at end of period	$ 11,530		$ 12,662		11,530	12,662	$ 11,643
Supplemental Cash Flow Information
Net income tax (refunds) payments during the period					(223)	3,057
Interest paid during the period					$ 24,416	$ 27,278

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CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ DEFICIT - USD ($) $ in Thousands	Total	Common Stock	Additional Paid-In Capital	Accumulated Other Comprehensive Loss	Accumulated Deficit	Cumulative Effect, Period of Adoption, Adjustment	Cumulative Effect, Period of Adoption, Adjustment Accumulated Deficit
Beginning balance (in shares) at Dec. 29, 2018		9,294,000
Beginning balance at Dec. 29, 2018	$ (14,663)	$ 92	$ 258,596	$ (37,129)	$ (236,222)	$ 1,291	$ 1,291
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net income (loss)	(6,719)				(6,719)
Foreign currency translation, net of tax	7			7
Unrealized gain (loss) from pension plan, net of tax	1,077			1,077
Vesting of restricted stock units (in shares)		49,000
Vesting of restricted stock units	1	$ 1
Compensation related to share-based grants	706		706
Other	15			15
Ending balance (in shares) at Mar. 30, 2019		9,343,000
Ending balance at Mar. 30, 2019	(18,285)	$ 93	259,302	(36,030)	(241,650)
Beginning balance (in shares) at Dec. 29, 2018		9,294,000
Beginning balance at Dec. 29, 2018	(14,663)	$ 92	258,596	(37,129)	(236,222)	$ 1,291	$ 1,291
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net income (loss)	(418)
Ending balance (in shares) at Jun. 29, 2019		9,365,000
Ending balance at Jun. 29, 2019	(12,835)	$ 94	259,727	(37,307)	(235,349)
Beginning balance (in shares) at Mar. 30, 2019		9,343,000
Beginning balance at Mar. 30, 2019	(18,285)	$ 93	259,302	(36,030)	(241,650)
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net income (loss)	6,301				6,301
Unrealized gain (loss) from pension plan, net of tax	(1,278)			(1,278)
Vesting of restricted stock units (in shares)		32,000
Vesting of restricted stock units	1	$ 1
Compensation related to share-based grants	635		635
Repurchase of shares to satisfy employee tax withholdings (in shares)		(10,000)
Repurchase of shares to satisfy employee tax withholdings	(208)		(208)
Other	(1)		(2)	1
Ending balance (in shares) at Jun. 29, 2019		9,365,000
Ending balance at Jun. 29, 2019	(12,835)	$ 94	259,727	(37,307)	(235,349)
Beginning balance (in shares) at Dec. 28, 2019		9,366,000
Beginning balance at Dec. 28, 2019	(26,083)	$ 94	260,974	(34,563)	(252,588)
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net income (loss)	(787)				(787)
Foreign currency translation, net of tax	3			3
Unrealized gain (loss) from pension plan, net of tax	196			196
Vesting of restricted stock units (in shares)		2,000
Compensation related to share-based grants	1,004		1,004
Repurchase of shares to satisfy employee tax withholdings (in shares)		(1,000)
Repurchase of shares to satisfy employee tax withholdings	(7)		(7)
Other	(10)		9	(19)
Ending balance (in shares) at Mar. 28, 2020		9,367,000
Ending balance at Mar. 28, 2020	(25,684)	$ 94	261,980	(34,383)	(253,375)
Beginning balance (in shares) at Dec. 28, 2019		9,366,000
Beginning balance at Dec. 28, 2019	(26,083)	$ 94	260,974	(34,563)	(252,588)
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net income (loss)	5,908
Ending balance (in shares) at Jun. 27, 2020		9,461,000
Ending balance at Jun. 27, 2020	(18,248)	$ 95	262,587	(34,250)	(246,680)
Beginning balance (in shares) at Mar. 28, 2020		9,367,000
Beginning balance at Mar. 28, 2020	(25,684)	$ 94	261,980	(34,383)	(253,375)
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net income (loss)	6,695				6,695
Foreign currency translation, net of tax	17			17
Unrealized gain (loss) from pension plan, net of tax	114			114
Vesting of restricted stock units (in shares)		122,000
Vesting of restricted stock units	1	$ 1
Compensation related to share-based grants	854		854
Repurchase of shares to satisfy employee tax withholdings (in shares)		(28,000)
Repurchase of shares to satisfy employee tax withholdings	(247)		(247)
Other	2			2
Ending balance (in shares) at Jun. 27, 2020		9,461,000
Ending balance at Jun. 27, 2020	$ (18,248)	$ 95	$ 262,587	$ (34,250)	$ (246,680)

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Basis of Presentation and Summary of Significant Accounting Policies

6 Months Ended

Jun. 27, 2020

Accounting Policies [Abstract]

Basis of Presentation and Summary of Significant Accounting Policies

Basis of Presentation and Summary of Significant Accounting Policies

Basis of Presentation

The accompanying unaudited interim Condensed Consolidated Financial Statements include the accounts of BlueLinx Holdings Inc. and its wholly owned subsidiaries (“the Company”). Our independent registered public accounting firm has not audited the accompanying interim financial statements. We derived the condensed consolidated balance sheet at June 27, 2020, from the audited consolidated financial statements included in our Annual Report on Form 10-K for the fiscal year ended December 28, 2019 (the “Fiscal 2019 Form 10-K”), as filed with the Securities and Exchange Commission on March 11, 2020. In the opinion of our management, the condensed consolidated financial statements reflect all adjustments, which are of a normal recurring nature, necessary for a fair presentation of our statements of operations and comprehensive loss for the three and six months ended June 27, 2020, and June 29, 2019, our balance sheets at June 27, 2020, and December 28, 2019, our statements of cash flows for the six months ended June 27, 2020, and June 29, 2019, and our statements of stockholders’ deficit for the three and six months ended June 27, 2020, and June 29, 2019.

We have condensed or omitted certain notes and other information from the interim condensed consolidated financial statements presented in this report. Therefore, these condensed consolidated interim financial statements should be read in conjunction with the Fiscal 2019 Form 10-K. In addition, certain prior period amounts have been reclassified to conform to the current period's presentation. These reclassifications did not materially impact operating income or consolidated net income (loss). The results for the three and six months ended June 27, 2020, are not necessarily indicative of results that may be expected for the full year ending January 2, 2021, or any other interim period.

We operate on a 5-4-4 fiscal calendar. Our fiscal year ends on the Saturday closest to December 31 of that fiscal year and may comprise 53 weeks in certain years. Our 2020 fiscal year contains 53 weeks and ends on January 2, 2021. Fiscal 2019 contained 52 weeks and ended on December 28, 2019.

Our financial statements are prepared in conformity with U.S. generally accepted accounting principles (U.S. GAAP), which requires us to make estimates based on assumptions about current and, for some estimates, future economic and market conditions, which affect reported amounts and related disclosures in our financial statements. Although our current estimates contemplate current and expected future conditions, as applicable, it is reasonably possible that actual conditions could differ from our expectations, which could materially affect our results of operations and financial position. Some of our estimates may be affected by the ongoing novel coronavirus (COVID-19) pandemic. The severity, magnitude, and duration, as well as the economic consequences of the COVID-19 pandemic, are uncertain, rapidly changing, and difficult to predict. As a result, our accounting estimates and assumptions may change over time in response to COVID-19.

On April 13, 2018, we completed the acquisition of Cedar Creek Holdings, Inc. (“Cedar Creek”). Results for Cedar Creek are included in the consolidated financial information presented herein.

Reclassification of Prior Period Presentation

An adjustment has been made to the Condensed Consolidated Statements of Cash Flows for the six months ended June 27, 2020, and June 29, 2019, to include outstanding payments as part of the change in accounts payable within cash flows from operating activities.  In previous periods, this change was included within cash flows from financing activities. 

We have reclassified certain costs within the Condensed Consolidated Statements of Operations and Comprehensive Income (Loss) for the three months and six months ended June 27, 2020, and June 29, 2019, from selling, general and administrative to other operating expenses. These costs primarily relate to the integration of the acquisition of Cedar Creek.

Recently Adopted Accounting Standards

Leases.  In 2016, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2016-02, “Leases (Topic 842).” Topic 842 establishes a new lease accounting model. The most significant changes include the clarification of the definition of a lease, the requirement for lessees to recognize for all leases a right-of-use asset and a

corresponding lease liability in the consolidated balance sheet, and additional quantitative and qualitative disclosures which are designed to give financial statement users information on the amount, timing, and uncertainty of cash flows arising from leases. Expenses are recognized in the consolidated statement of income in a manner similar to prior accounting guidance. Lessor accounting under the new standard is substantially unchanged. We adopted this standard, and all related amendments thereto, effective December 30, 2018, the first day of our 2019 fiscal year, using a modified retrospective approach, which applies the provisions of the new guidance at the effective date without adjusting the comparative periods presented. We have elected the package of practical expedients permitted under the transition guidance within the new standard, which among other things, allows us to carry forward the historical accounting relating to lease identification and classification for existing leases upon adoption. We have made an accounting policy election to keep leases with an initial term of 12 months or less off of the consolidated balance sheet. We implemented internal controls and a lease accounting information system to enable the preparation of financial information required by the new standard. The adoption of Topic 842 had a material impact on our condensed consolidated balance sheets but did not have a material impact on our condensed consolidated statements of operations and comprehensive loss. The most significant impact was the recognition of right-of-use assets and lease liabilities of $57.5 million on the condensed consolidated balance sheet as of the adoption date. Additionally, $1.7 million of deferred gains associated with sale-leaseback transactions was recorded as a cumulative-effect adjustment to accumulated deficit.

Accounting Standards Effective in Future Periods

Credit Impairment Losses. In June 2016, the FASB issued ASU 2016-13, “Financial Instruments - Credit Losses (Topic 326).” This ASU sets forth a current expected credit loss (“CECL”) model which requires the measurement of all expected credit losses for financial instruments or other assets (e.g., trade receivables), held at the reporting date based on historical experience, current conditions, and reasonable supportable forecasts. This replaces the existing incurred loss model, is applicable to the measurement of credit losses on financial assets measured at amortized cost, and applies to some off-balance sheet credit exposures. The standard also requires enhanced disclosures to help financial statement users better understand significant estimates and judgments used in estimating credit losses, as well as the credit quality and underwriting standards of an entity's portfolio. ASU 2019-10 extended the effective date of ASU 2016-13 to interim and annual periods beginning after December 22, 2022, for certain public business entities, including smaller reporting companies. We have not completed our assessment of the standard, but we do not expect the adoption to have a material impact on the Company's consolidated financial position, results of operations, or cash flows.

Defined Benefit Pension Plan. In August 2018, the FASB issued ASU No. 2018-14, “Compensation-Retirement-Benefits-Defined Benefit Plans-General (Subtopic 715-20).” The amendments in this update modify the disclosure requirements for employers that sponsor defined benefit pension or other post-retirement plans by removing six previously required disclosures and adding two. The amendments also clarify certain other disclosure requirements. The amendments in this standard are effective for fiscal years ending after December 15, 2020. Early adoption is permitted. We have not completed our assessment of the standard, but we do not expect the adoption to have a material impact on the Company's consolidated financial position, results of operations, or cash flows.

Income Taxes. In December 2019, the FASB issued ASU No.2019-12, “Income taxes (Topic 740): Simplifying the Accounting for Income Taxes.” This ASU simplifies the accounting for income taxes by removing certain exceptions to the general principles in ASC 740 and also clarifies and amends existing guidance to improve consistent application. The amendments in this standard are effective for interim periods and fiscal years beginning after December 15, 2020. Early adoption is permitted. We are currently assessing the impact of the new guidance, but do not expect the adoption to have a material impact on the Company’s consolidated financial position, results of operations, or cash flows.

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Goodwill and Other Intangible Assets

6 Months Ended

Jun. 27, 2020

Goodwill and Intangible Assets Disclosure [Abstract]

Goodwill and Other Intangible Assets

Goodwill and Other Intangible Assets

In connection with the acquisition of Cedar Creek, we acquired certain intangible assets. As of June 27, 2020, our intangible assets consist of goodwill and other intangible assets including customer relationships, noncompete agreements, and trade names.

Goodwill

Goodwill is the excess of the cost of an acquired entity over the fair value of tangible and intangible assets (including customer relationships, noncompete agreements, and trade names) acquired, and liabilities assumed, under acquisition accounting for business combinations. As of June 27, 2020, goodwill was $47.8 million.

Goodwill is not subject to amortization but must be tested for impairment at least annually. This test requires us to assign goodwill to a reporting unit and to determine if the fair value of the reporting unit’s goodwill is less than its carrying amount.

We evaluate goodwill for impairment during the fourth quarter of each fiscal year. In addition, we will evaluate the carrying value for impairment between annual impairment tests if an event occurs or circumstances change that would indicate the carrying amount may be impaired. Such events and indicators may include, without limitation, significant declines in the industries in which our products are used, significant changes in capital market conditions, and significant changes in our market capitalization. Our one reporting unit has a fair value that exceeds its book value, but a negative carrying amount of net assets, as of June 27, 2020.

Definite-Lived Intangible Assets.

On June 27, 2020, the gross carrying amounts, accumulated amortization, and net carrying amounts of our definite-lived intangible assets were as follows:

	Gross carrying amounts		Accumulated Amortization			(1)	Net carrying amounts
	(In thousands)
Customer relationships	$	25,500	$	(8,393	)		$	17,107
Noncompete agreements	8,254		(4,564		)		3,690
Trade names	6,826		(5,032		)		1,794
Total	$	40,580	$	(17,989	)		$	22,591

⁽¹⁾ Intangible assets except customer relationships are amortized on a straight-line basis. Customer relationships are amortized on a double declining balance method.

Amortization Expense

The weighted average estimated useful life remaining for customer relationships, noncompete agreements, and trade names is approximately 10 years, 2 years, and 1 year, respectively. Amortization expense for the definite-lived intangible assets was $1.8 million and $3.8 million for the three- and six-month periods ended June 27, 2020, respectively. For the three- and six-month periods ended June 30, 2019, amortization expense was $2.0 million and $4.1 million, respectively.

Estimated amortization expense for definite-lived intangible assets for the remaining portion of 2020 and the next four fiscal years is as follows:

	Estimated Amortization
	(In thousands)
2020	$	3,645
2021	4,973
2022	3,111
2023	1,807
2024	1,505

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Revenue Recognition

6 Months Ended

Jun. 27, 2020

Revenue from Contract with Customer [Abstract]

Revenue Recognition

Revenue Recognition

We recognize revenue when control of promised goods or services is transferred to the Company’s customers in an amount that reflects the consideration we expect to be entitled to in exchange for those goods or services.

Contracts with our customers are generally in the form of standard terms and conditions of sale. From time to time, we may enter into specific contracts with some of our larger customers, which may affect delivery terms. Performance obligations in our contracts generally consist solely of delivery of goods. For all sales channel types, consisting of warehouse, direct, and reload sales, we typically satisfy our performance obligations upon shipment. Our customer payment terms are typical for our industry and may vary by the type and location of our customer and the products or services offered. The term between invoicing and when payment is due is not deemed to be significant by us. For certain sales channels and/or products, our standard terms of payment may be as early as ten days.

In addition, we provide inventory to certain customers through pre-arranged agreements on a consignment basis. Customer consigned inventory is maintained and stored by certain customers; however, ownership and risk of loss remain with us.

All revenues recognized are net of trade allowances (i.e., rebates), cash discounts, and sales returns. Cash discounts and sales returns are estimated using historical experience. Trade allowances are based on the estimated obligations and historical experience. Adjustments to earnings resulting from revisions to estimates on discounts and returns have been insignificant for each of the reported periods. Certain customers may receive cash-based incentives or credits, which are accounted for as variable consideration. We estimate these amounts based on the expected amount to be provided to customers and reduce revenues recognized. We believe that there will not be significant changes to our estimates of variable consideration.

The following table presents our revenues disaggregated by revenue source. Certain prior year amounts have been reclassified to conform to the current year product mix of structural and specialty products. Sales and usage-based taxes are excluded from revenues.

	Three Months Ended				Six Months Ended
	June 27, 2020		June 29, 2019		June 27, 2020		June 29, 2019
	(In thousands)				(In thousands)
Structural products	$	249,571	$	224,528	$	490,349	$	421,314
Specialty products	449,205		481,920		870,497		923,835
Total net sales	$	698,776	$	706,448	$	1,360,846	$	1,345,149

The following table presents our revenues disaggregated by sales channel. Following the acquisition and integration of Cedar Creek, our reload sales were less distinct from warehouse sales, as they have been classified in prior periods. In addition, from time to time we may also make changes to certain intercompany allocations amongst sales channels. As a result, certain prior period amounts have been reclassified to conform to the current period revenues disaggregated by sales channel. Such reclassifications do not have an impact on total net sales as reported in any period. Sales and usage-based taxes are excluded from revenues.

	Three Months Ended						Six Months Ended
	June 27, 2020			June 29, 2019			June 27, 2020			June 29, 2019
	(In thousands)						(In thousands)
Warehouse and reload	$	601,279		$	594,024		$	1,163,472		$	1,117,250
Direct	107,848			121,856			217,129			245,212
Customer discounts and rebates	(10,351		)	(9,432		)	(19,755		)	(17,313		)
Total net sales	$	698,776		$	706,448		$	1,360,846		$	1,345,149

Practical Expedients and Exemptions

We generally expense sales commissions when incurred because the amortization period would have been one year or less. These costs are recorded within selling, general, and administrative expense.

We have made an accounting policy election to treat outbound shipping and handling activities as an expense.

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Assets Held for Sale

6 Months Ended

Jun. 27, 2020

Discontinued Operations and Disposal Groups [Abstract]

Assets Held for Sale

Assets Held for SaleThree of our non-operating properties were designated as held for sale as of June 27, 2020. These properties consisted of three former distribution facilities located in the Midwest and Southeast. We vacated these properties and designated them as held for sale during fiscal 2019 due to their proximity to other locations after the Cedar Creek acquisition. As of June 27, 2020, and December 28, 2019, the net book value of total assets held for sale was $1.1 million and was included in “Other current assets” in our Condensed Consolidated Balance Sheets. We continue to actively market all properties that are designated as held for sale, and we plan to sell these properties within the next 12 months.

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Long-Term Debt

6 Months Ended

Jun. 27, 2020

Debt Disclosure [Abstract]

Long-Term Debt

Long-Term Debt

As of June 27, 2020, and December 28, 2019, long-term debt consisted of the following:

	June 27, 2020			December 28, 2019
	(In thousands)
Revolving Credit Facility (1)	$	322,223		$	326,496
Term Loan Facility (2)	68,822			146,674
Finance lease obligations (3)	272,580			198,011
	663,625			671,181
Unamortized debt issuance costs	(10,989		)	(12,555		)
	652,636			658,626
Less: current maturities of long-term debt	8,134			8,662
Long-term debt, net of current maturities	$	644,502		$	649,964

⁽¹⁾ The weighted average interest rate was 2.6 percent and 3.9 percent as of June 27, 2020 and December 28, 2019, respectively.

⁽²⁾ The weighted average interest rate was 8.0 percent and 8.7 percent as of June 27, 2020 and December 28, 2019, respectively.

⁽³⁾ Refer to Note 8, Leases, for interest rates associated with finance lease obligations.

Revolving Credit Facility

We have a revolving credit facility that we entered into in April 2018 with Wells Fargo Bank, National Association, as administrative agent, and certain other financial institutions party thereto (the “Revolving Credit Facility”), with a maturity date of October 10, 2022. The Revolving Credit facility includes a committed senior secured asset-based revolving loan and letter of credit facility of up to $600 million, and an uncommitted accordion feature that permits us to increase the facility by an aggregate additional principal amount of up to $150 million. Our obligations under the Revolving Credit Facility are secured by a security interest in substantially all of our assets other than real property.

Loans under the Revolving Credit Facility bear interest at a rate per annum equal to (i) LIBOR plus a margin ranging from 1.75 percent to 2.25 percent, with the amount of such margin determined based upon the average of our excess availability for the immediately preceding fiscal quarter as calculated by the administrative agent, for loans based on LIBOR, or (ii) the administrative agent’s base rate plus a margin ranging from 0.75 percent to 1.25 percent, with the amount of such margin determined based upon the average of our excess availability for the immediately preceding fiscal quarter as calculated by the administrative agent, for loans based on the base rate.

We amended the Revolving Credit Facility on January 31, 2020, to provide that (i) the “Seasonal Period” will run from November 15, 2019, through July 15, 2020, for the calendar year 2019, and from December 15 of each calendar year through April 15 of each immediately succeeding calendar year for the calendar year 2020 and thereafter, and (ii) the measurement period in the definition of “Cash Dominion Event” will be five consecutive business days instead of three consecutive business days. The adjustment to the Seasonal Period better aligns advance rates under the Revolving Credit Facility with the seasonality in our business and provided us with an enhanced borrowing base and greater liquidity through July 15, 2020.

As of June 27, 2020, we had outstanding borrowings of $322.2 million, excess availability of $138.1 million, and a weighted average interest rate of 2.6 percent. As of December 28, 2019, our principal balance was $326.5 million, excess availability was $80.0 million, and our weighted average interest rate was 3.9 percent.

The Revolving Credit Facility contains certain financial and other covenants, and our right to borrow under the Revolving Credit Facility is conditioned upon, among other things, our compliance with these covenants. We were in compliance with all covenants under the Revolving Credit Facility as of June 27, 2020.

Term Loan Facility

We have a term loan facility that we entered into in April 2018 with HPS Investments Partners, LLC, as administrative and collateral agent, and certain other financial institutions party thereto (the “Term Loan Facility”), with a maturity date of

October 13, 2023. The Term Loan Facility provides for a senior secured first lien loan facility in an initial aggregate principal amount of $180 million and is secured by a security interest in substantially all of our assets.

The Term Loan Facility requires monthly interest payments, and also requires quarterly principal payments of $402,282, in arrears, with the remaining balance due on the maturity date. The Term Loan Facility also requires certain mandatory prepayments of outstanding loans, subject to certain exceptions. The Term Loan Facility requires maintenance of a total net leverage ratio of 8.75 to 1.00 for the quarter ending June 27, 2020 and the third quarter of 2020, and 5.25 to 1.00 for the fourth quarter of 2020; ratio levels generally reduce over the remaining term of the Term Loan Facility. We were in compliance with all covenants under the Term Loan Facility as of June 27, 2020.

Borrowings under the Term Loan Facility may be made as Base Rate Loans or Eurodollar Rate Loans. The Base Rate Loans will bear interest at the rate per annum equal to (i) the greatest of the (a) U.S. prime lending rate published in The Wall Street Journal, (b) the Federal Funds Effective Rate plus 0.50 percent, and (c) the sum of the Adjusted Eurodollar Rate of one month plus 1.00 percent, provided that the Base Rate shall at no time be less than 2.00 percent per annum; plus (ii) the Applicable Margin, as described below. Eurodollar Rate Loans will bear interest at the rate per annum equal to (i) the ICE Benchmark Administration LIBOR Rate, provided that the Adjusted Eurodollar Rate shall at no time be less than 1.00 percent per annum; plus (ii) the Applicable Margin. The Applicable Margin will be 6.00 percent with respect to Base Rate Loans and 7.00 percent with respect to Eurodollar Rate Loans.

We amended the Term Loan Facility on December 31, 2019, to extend the period for satisfying the designated principal balance level required to maintain the modified total net leverage ratio covenant levels for the 2019 fourth and subsequent quarters thereunder, which was satisfied on January 31, 2020, through repayments from proceeds from the real estate financing transactions described in Note 8. On February 28, 2020, we further amended the Term Loan Facility to provide that we would not be subject to the facility’s total net leverage ratio covenant from and after the time, and then for so long as, the principal balance level under the facility is less than $45 million. On April 1, 2020, we amended the Term Loan Facility to, among other things, modify the total net leverage ratio covenant levels for the 2020 second and third quarters. All other total net leverage ratio covenant levels for prior and future quarters were unchanged.

As of June 27, 2020, we had outstanding borrowings of $68.8 million under the Term Loan Facility and an interest rate of 8.0 percent per annum. As of December 28, 2019, our principal balance was $146.7 million with an interest rate of 8.7 percent per annum. The decrease in the outstanding borrowings was due to net proceeds of the real estate financing transactions described in Note 8 being applied to the Term Loan Facility.

Finance Lease Obligations

Our finance lease liabilities consist of leases related to equipment and vehicles, and real estate, with the majority of those finance leases related to real estate. For more information on our finance lease obligations, refer to Note 8, Leases.

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Net Periodic Pension (Benefit) Cost

6 Months Ended

Jun. 27, 2020

Retirement Benefits [Abstract]

Net Periodic Pension (Benefit) Cost

Net Periodic Pension (Benefit) Cost

The following table shows the components of our net periodic pension (benefit) cost:

	Three Months Ended						Six Months Ended
	June 27, 2020			June 29, 2019			June 27, 2020			June 29, 2019
	(In thousands)						(In thousands)
Service cost	$	—		$	48		$	—		$	161
Interest cost on projected benefit obligation	723			973			1,446			2,018
Expected return on plan assets	(1,210		)	(1,295		)	(2,420		)	(2,489		)
Amortization of unrecognized loss	263			279			526			580
Net periodic pension (benefit) cost	$	(224	)	$	5		$	(448	)	$	270

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Stock Compensation

6 Months Ended

Jun. 27, 2020

Share-based Payment Arrangement [Abstract]

Stock Compensation

Stock Compensation

Stock Compensation Expense

During the three months ended June 27, 2020, and June 29, 2019, we incurred stock compensation expense of $0.9 million and $0.6 million, respectively. During the six months ended June 27, 2020, and June 29, 2019, we incurred stock compensation

expense of $1.9 million and $1.3 million, respectively. The increase in our stock compensation expense for the three- and six-month periods is attributable to having more outstanding equity-based awards during these periods than in the prior year and the vesting of awards in connection with the departure of certain employees.

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Leases

6 Months Ended

Jun. 27, 2020

Leases [Abstract]

Leases

Leases

We have operating and finance leases for certain of our distribution facilities, office space, land, mobile fleet, and equipment. Many of our leases are non-cancelable and typically have a defined initial lease term, and some provide options at our election to renew for specified periods of time. The majority of our leases have remaining lease terms of 1 year to 15 years, some of which include one or more options to extend the leases for 5 years. Our leases generally provide for fixed annual rentals. Certain of our leases include provisions for escalating rent based on, among other things, contractually defined increases and/or changes in the Consumer Price Index (“CPI”). Some of our leases require us to pay taxes, insurance, and maintenance expenses associated with the leased assets. Our lease agreements do not contain any material residual value guarantees or material restrictive covenants.

We determine if an arrangement is a lease at inception and assess lease classification as either operating or finance at lease inception or modification. Operating lease right-of use (“ROU”) assets and liabilities are presented separately on the condensed consolidated balance sheets. Finance lease ROU assets are included in property and equipment and the finance lease obligations are presented separately in the condensed consolidated balance sheet. When a lease does not provide an implicit interest rate, we use our incremental borrowing rate based on the information available at the commencement date in determining the present value of future payments. We have also made the accounting policy election to not separate lease components from non-lease components related to our mobile fleet asset class.

Finance Lease Liabilities

Our finance lease liabilities consist of leases related to equipment and vehicles, and real estate. As noted in the table below, a majority of our finance leases, formally known as capital leases, relate to real estate.

During 2017 and 2018, we entered into real estate financing transactions on warehouse facilities in Tampa, FL; Ft. Worth, TX; Bellingham, PA; Frederick, MD; Lawrenceville, GA; and Raleigh, NC. These transactions were completed pursuant to sale-leaseback arrangements, and upon their completion, we entered into long-term leases on the properties for initial terms of 15 years with multiple 5-year renewal options, with one having a single 10-year renewal option. We accounted for these transactions in accordance with the Financial Accounting Standards Board’s (“FASB”) Accounting Standards Codification (“ASC”) Topic 840, which was the lease accounting standard in effect at the inception of these arrangements. We have recorded these transactions as finance lease liabilities on our balance sheet. As of June 27, 2020 and December 28, 2019, total unrecognized deferred gains related to these transactions were $84.0 and $85.8 million, respectively.

On May 19, 2019, we completed a real estate financing transaction on a warehouse facility in University Park, IL for net proceeds of $21.8 million. On June 20, 2019, we completed a real estate financing transaction on a warehouse facility in Yulee, FL for net proceeds of $13.3 million. These two transactions were completed pursuant to sale-leaseback arrangements, and upon their completion, we entered into long-term leases on the properties for initial terms of 15 years with multiple 5-year renewal options. Gross proceeds of these transactions were $45.0 million.

On December 31, 2019, we completed real estate financing transactions on warehouse facilities in Madison, TN; Kansas City, MO; Richmond, VA; and Bridgeton, MO for aggregate net proceeds of $27.2 million. On January 31, 2020, we completed real estate financing transactions on warehouse facilities in Charlotte, NC; Memphis, TN; Independence, KY: San Antonio, TX; Portland, ME; Denville, NJ; Yaphank, NY; Pensacola, FL; and Tallmadge, OH for aggregate net proceeds of $34.1 million. On February 28, 2020, we completed a real estate financing transaction on a warehouse facility in Elkhart, IN for net proceeds of $7.5 million. These transactions were completed pursuant to sale-leaseback arrangements, and upon their completion, we entered into long-term leases on the properties for initial terms from 15 years to 18 years with multiple 5-year renewal options. Gross proceeds of these transactions were $78.3 million.

We determined that the transactions in fiscal 2019 and in the current fiscal year did not qualify as sales in accordance with ASC 842. Therefore, for accounting purposes, the transactions were not accounted for as sale-leaseback transactions, and no gain or loss was recorded. We determined that these leases qualified for finance lease treatment and recorded them accordingly. The net book value of the assets related to these transactions remains on our books as property and equipment and we continue to depreciate the assets over their remaining useful lives.

A portion of our real estate lease cost is generally subject to annual changes in the Consumer Price Index (“CPI”). The known changes to lease payments are included in the lease liability at lease commencement. Unknown changes related to CPI are treated as variable lease payments and recognized in the period in which the obligation for those payments was incurred. In addition, a subset of our vehicle lease cost is considered variable.

The following table presents our assets and liabilities related to our leases as of June 27, 2020 and December 28, 2019:

		June 27, 2020		December 28, 2019
		(In thousands)
Assets	Classification
Operating lease right-of-use assets	Operating lease right of use assets	$	50,802	$	54,408
Finance lease right-of-use assets (1)	Property and equipment, net	153,176		141,922
Total lease right-of-use assets		$	203,978	$	196,330
Liabilities
Current portion
Operating lease liabilities	Operating lease liabilities - short term	$	6,633	$	7,317
Finance lease liabilities	Finance lease liabilities - short term	5,958		6,486
Non-current portion
Operating lease liabilities	Operating lease liabilities - long term	44,169		47,091
Finance lease liabilities	Finance lease liabilities - long term	266,622		191,525
Total lease liabilities		$	323,382	$	252,419

⁽¹⁾ Finance lease right-of-use assets are presented net of accumulated amortization of $51.3 and $30.8 million as of June 27, 2020 and December 28, 2019, respectively.

The components of lease expense were as follows:

	Three Months Ended				Six Months Ended
	June 27, 2020		June 29, 2019		June 27, 2020		June 29, 2019
	(In thousands)				(In thousands)
Operating lease cost:	$	2,977	$	2,991	$	6,098	$	6,135
Finance lease cost:
Amortization of right-of-use assets	$	3,513	$	3,220	$	6,878	$	6,117
Interest on lease liabilities	6,557		4,130		12,721		7,378
Total finance lease costs	$	10,070	$	7,350	$	19,599	$	13,495

Supplemental cash flow information related to leases was as follows:

	Three Months Ended				Six Months Ended
	June 27, 2020		June 29, 2019		June 27, 2020		June 29, 2019
	(In thousands)				(In thousands)
Cash paid for amounts included in the measurement of lease liabilities
Operating cash flows from operating leases	$	2,860	$	3,064	$	5,633	$	5,967
Operating cash flows from finance leases	6,557		3,236		12,721		6,484
Financing cash flows from finance leases	2,403		2,216		4,583		4,403
Right-of-use assets obtained in exchange for lease obligations
Operating leases	$	—	$	—	$	—	$	—
Finance leases	—		3,462		—		4,250

Supplemental balance sheet information related to leases was as follows:

	June 27, 2020			December 28, 2019
	(In thousands)
Finance leases
Property and equipment	$	204,431		$	172,720
Accumulated depreciation	(51,255		)	(30,798		)
Property and equipment, net	$	153,176		$	141,922
Weighted Average Remaining Lease Term (in years)
Operating leases	11.66			11.71
Finance leases	16.58			17.12
Weighted Average Discount Rate
Operating leases	9.40		%	9.34		%
Finance leases	9.75		%	10.11		%

The major categories of our finance lease liabilities as of June 27, 2020 and December 28, 2019 are as follows:

	June 27, 2020		December 28, 2019
	(In thousands)
Equipment and vehicles	$	29,162	$	32,471
Real estate	243,418		165,540
Total finance leases	$	272,580	$	198,011

As of June 27, 2020, maturities of lease liabilities were as follows:

	Operating leases			Finance leases
	(In thousands)
2020	$	11,109		$	15,385
2021	8,821			29,150
2022	7,876			28,449
2023	6,794			28,121
2024	6,441			27,793
Thereafter	47,514			408,524
Total lease payments	$	88,555		$	537,422
Less: imputed interest	(37,753		)	(264,842		)
Total	$	50,802		$	272,580

On December 28, 2019, maturities of lease liabilities were as follows:

	Operating leases			Finance leases
	(In thousands)
2020	$	11,348		$	24,002
2021	10,111			23,052
2022	8,048			22,230
2023	7,330			21,854
2024	6,413			21,380
Thereafter	50,901			327,439
Total lease payments	$	94,151		$	439,957
Less: imputed interest	(39,743		)	(241,946		)
Total	$	54,408		$	198,011

Leases

Leases

We have operating and finance leases for certain of our distribution facilities, office space, land, mobile fleet, and equipment. Many of our leases are non-cancelable and typically have a defined initial lease term, and some provide options at our election to renew for specified periods of time. The majority of our leases have remaining lease terms of 1 year to 15 years, some of which include one or more options to extend the leases for 5 years. Our leases generally provide for fixed annual rentals. Certain of our leases include provisions for escalating rent based on, among other things, contractually defined increases and/or changes in the Consumer Price Index (“CPI”). Some of our leases require us to pay taxes, insurance, and maintenance expenses associated with the leased assets. Our lease agreements do not contain any material residual value guarantees or material restrictive covenants.

We determine if an arrangement is a lease at inception and assess lease classification as either operating or finance at lease inception or modification. Operating lease right-of use (“ROU”) assets and liabilities are presented separately on the condensed consolidated balance sheets. Finance lease ROU assets are included in property and equipment and the finance lease obligations are presented separately in the condensed consolidated balance sheet. When a lease does not provide an implicit interest rate, we use our incremental borrowing rate based on the information available at the commencement date in determining the present value of future payments. We have also made the accounting policy election to not separate lease components from non-lease components related to our mobile fleet asset class.

Finance Lease Liabilities

Our finance lease liabilities consist of leases related to equipment and vehicles, and real estate. As noted in the table below, a majority of our finance leases, formally known as capital leases, relate to real estate.

During 2017 and 2018, we entered into real estate financing transactions on warehouse facilities in Tampa, FL; Ft. Worth, TX; Bellingham, PA; Frederick, MD; Lawrenceville, GA; and Raleigh, NC. These transactions were completed pursuant to sale-leaseback arrangements, and upon their completion, we entered into long-term leases on the properties for initial terms of 15 years with multiple 5-year renewal options, with one having a single 10-year renewal option. We accounted for these transactions in accordance with the Financial Accounting Standards Board’s (“FASB”) Accounting Standards Codification (“ASC”) Topic 840, which was the lease accounting standard in effect at the inception of these arrangements. We have recorded these transactions as finance lease liabilities on our balance sheet. As of June 27, 2020 and December 28, 2019, total unrecognized deferred gains related to these transactions were $84.0 and $85.8 million, respectively.

On May 19, 2019, we completed a real estate financing transaction on a warehouse facility in University Park, IL for net proceeds of $21.8 million. On June 20, 2019, we completed a real estate financing transaction on a warehouse facility in Yulee, FL for net proceeds of $13.3 million. These two transactions were completed pursuant to sale-leaseback arrangements, and upon their completion, we entered into long-term leases on the properties for initial terms of 15 years with multiple 5-year renewal options. Gross proceeds of these transactions were $45.0 million.

On December 31, 2019, we completed real estate financing transactions on warehouse facilities in Madison, TN; Kansas City, MO; Richmond, VA; and Bridgeton, MO for aggregate net proceeds of $27.2 million. On January 31, 2020, we completed real estate financing transactions on warehouse facilities in Charlotte, NC; Memphis, TN; Independence, KY: San Antonio, TX; Portland, ME; Denville, NJ; Yaphank, NY; Pensacola, FL; and Tallmadge, OH for aggregate net proceeds of $34.1 million. On February 28, 2020, we completed a real estate financing transaction on a warehouse facility in Elkhart, IN for net proceeds of $7.5 million. These transactions were completed pursuant to sale-leaseback arrangements, and upon their completion, we entered into long-term leases on the properties for initial terms from 15 years to 18 years with multiple 5-year renewal options. Gross proceeds of these transactions were $78.3 million.

We determined that the transactions in fiscal 2019 and in the current fiscal year did not qualify as sales in accordance with ASC 842. Therefore, for accounting purposes, the transactions were not accounted for as sale-leaseback transactions, and no gain or loss was recorded. We determined that these leases qualified for finance lease treatment and recorded them accordingly. The net book value of the assets related to these transactions remains on our books as property and equipment and we continue to depreciate the assets over their remaining useful lives.

A portion of our real estate lease cost is generally subject to annual changes in the Consumer Price Index (“CPI”). The known changes to lease payments are included in the lease liability at lease commencement. Unknown changes related to CPI are treated as variable lease payments and recognized in the period in which the obligation for those payments was incurred. In addition, a subset of our vehicle lease cost is considered variable.

The following table presents our assets and liabilities related to our leases as of June 27, 2020 and December 28, 2019:

		June 27, 2020		December 28, 2019
		(In thousands)
Assets	Classification
Operating lease right-of-use assets	Operating lease right of use assets	$	50,802	$	54,408
Finance lease right-of-use assets (1)	Property and equipment, net	153,176		141,922
Total lease right-of-use assets		$	203,978	$	196,330
Liabilities
Current portion
Operating lease liabilities	Operating lease liabilities - short term	$	6,633	$	7,317
Finance lease liabilities	Finance lease liabilities - short term	5,958		6,486
Non-current portion
Operating lease liabilities	Operating lease liabilities - long term	44,169		47,091
Finance lease liabilities	Finance lease liabilities - long term	266,622		191,525
Total lease liabilities		$	323,382	$	252,419

⁽¹⁾ Finance lease right-of-use assets are presented net of accumulated amortization of $51.3 and $30.8 million as of June 27, 2020 and December 28, 2019, respectively.

The components of lease expense were as follows:

	Three Months Ended				Six Months Ended
	June 27, 2020		June 29, 2019		June 27, 2020		June 29, 2019
	(In thousands)				(In thousands)
Operating lease cost:	$	2,977	$	2,991	$	6,098	$	6,135
Finance lease cost:
Amortization of right-of-use assets	$	3,513	$	3,220	$	6,878	$	6,117
Interest on lease liabilities	6,557		4,130		12,721		7,378
Total finance lease costs	$	10,070	$	7,350	$	19,599	$	13,495

Supplemental cash flow information related to leases was as follows:

	Three Months Ended				Six Months Ended
	June 27, 2020		June 29, 2019		June 27, 2020		June 29, 2019
	(In thousands)				(In thousands)
Cash paid for amounts included in the measurement of lease liabilities
Operating cash flows from operating leases	$	2,860	$	3,064	$	5,633	$	5,967
Operating cash flows from finance leases	6,557		3,236		12,721		6,484
Financing cash flows from finance leases	2,403		2,216		4,583		4,403
Right-of-use assets obtained in exchange for lease obligations
Operating leases	$	—	$	—	$	—	$	—
Finance leases	—		3,462		—		4,250

Supplemental balance sheet information related to leases was as follows:

	June 27, 2020			December 28, 2019
	(In thousands)
Finance leases
Property and equipment	$	204,431		$	172,720
Accumulated depreciation	(51,255		)	(30,798		)
Property and equipment, net	$	153,176		$	141,922
Weighted Average Remaining Lease Term (in years)
Operating leases	11.66			11.71
Finance leases	16.58			17.12
Weighted Average Discount Rate
Operating leases	9.40		%	9.34		%
Finance leases	9.75		%	10.11		%

The major categories of our finance lease liabilities as of June 27, 2020 and December 28, 2019 are as follows:

	June 27, 2020		December 28, 2019
	(In thousands)
Equipment and vehicles	$	29,162	$	32,471
Real estate	243,418		165,540
Total finance leases	$	272,580	$	198,011

As of June 27, 2020, maturities of lease liabilities were as follows:

	Operating leases			Finance leases
	(In thousands)
2020	$	11,109		$	15,385
2021	8,821			29,150
2022	7,876			28,449
2023	6,794			28,121
2024	6,441			27,793
Thereafter	47,514			408,524
Total lease payments	$	88,555		$	537,422
Less: imputed interest	(37,753		)	(264,842		)
Total	$	50,802		$	272,580

On December 28, 2019, maturities of lease liabilities were as follows:

	Operating leases			Finance leases
	(In thousands)
2020	$	11,348		$	24,002
2021	10,111			23,052
2022	8,048			22,230
2023	7,330			21,854
2024	6,413			21,380
Thereafter	50,901			327,439
Total lease payments	$	94,151		$	439,957
Less: imputed interest	(39,743		)	(241,946		)
Total	$	54,408		$	198,011

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Commitments and Contingencies

6 Months Ended

Jun. 27, 2020

Commitments and Contingencies Disclosure [Abstract]

Commitments and Contingencies

Commitments and Contingencies

Environmental and Legal Matters

From time to time, we are involved in various proceedings incidental to our businesses, and we are subject to a variety of environmental and pollution control laws and regulations in all jurisdictions in which we operate. Although the ultimate outcome of these proceedings cannot be determined with certainty, based on presently available information management believes that adequate reserves have been established for probable losses with respect thereto and receivables recorded for expected receipts from settlements. Management further believes that, while the ultimate outcome of one or more of these matters could be material to operating results in any given quarter, it will not have a materially adverse effect on our consolidated financial condition, our results of operations, or our cash flows.

Collective Bargaining Agreements

As of June 27, 2020, we had 2,000 employees on a full-time basis, and approximately 21 percent of our employees were represented by various local labor union Collective Bargaining Agreements (“CBAs”). Approximately 1 percent of our employees are covered by three CBAs that are up for renewal in fiscal 2020. As of June 27, 2020, one of these CBAs was renewed and the remaining two are expected to be renegotiated later this year.

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Accumulated Other Comprehensive Loss

6 Months Ended

Jun. 27, 2020

Equity [Abstract]

Accumulated Other Comprehensive Loss

Accumulated Other Comprehensive Loss

Comprehensive loss includes both net income (loss) and other comprehensive income (loss). Other comprehensive income (loss) results from items deferred from recognition into our Condensed Consolidated Statements of Operations and Comprehensive Loss. Accumulated other comprehensive loss is separately presented on our Condensed Consolidated Balance Sheets as part of stockholders’ deficit.

The changes in balances for each component of accumulated other comprehensive loss for the six months ended June 27, 2020, were as follows:

	Foreign currency, net of tax		Defined benefit pension plan, net of tax			Other, net of tax			Total Accumulated Other Comprehensive Loss
	(In thousands)
December 28, 2019, beginning balance	$	666	$	(35,441	)	$	212		$	(34,563	)
Other comprehensive income, net of tax (1)	20		310			(17		)	313
June 27, 2020, ending balance, net of tax	$	686	$	(35,131	)	$	195		$	(34,250	)

⁽¹⁾ For the six months ended June 27, 2020, the actuarial loss recognized in the Condensed Consolidated Statements of Operations and Comprehensive Loss as a component of net periodic pension cost was $0.5 million, net of tax of $0.2 million. Please see Note 6, Net Periodic Pension (Benefit) Cost, for further information.

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Income Taxes

6 Months Ended

Jun. 27, 2020

Income Tax Disclosure [Abstract]

Income Taxes

Income Taxes

Our effective tax rate for the three months ended June 27, 2020, and June 29, 2019, was 33.9 percent and 27.2 percent, respectively. Our effective tax rate for the three months ended June 27, 2020 was impacted by (i) recording discrete tax expense of $0.4 million for a shortfall on the vesting of our restricted stock units, (ii) the permanent addback of certain nondeductible expenses, including meals and entertainment and officer’s compensation, and (iii) the effect of the partial valuation allowance for separate company state income tax losses and previously nondeductible interest under 163(j) of the Internal Revenue Code (“IRC”). Our effective tax rate for the three months ended June 29, 2019, was impacted by the permanent addback of certain nondeductible expenses, including meals and entertainment and executive compensation, and the effect of the partial valuation allowance for separate company state income tax losses. In addition, we recorded discrete tax expense of $0.2 million for a shortfall on the vesting of our restricted stock units, which was offset by a $0.2 million discrete tax benefit for claiming tax credits.

Our effective tax rate was (36.8) percent and 29.5 percent, for the first six months of fiscal 2020 and 2019, respectively. Our effective tax rate for the six months ended June 27, 2020 was impacted by (i) the discrete tax benefit of $3.9 million resulting from the release of the valuation allowance associated with the nondeductible interest expense under Section 163(j) of the IRC as a result of changes under the Coronavirus Aid, Relief, and Economic Security (CARES) Act, which was enacted on March 27, 2020, and contained, among other things, several tax-based measures meant to counteract the effects of the COVID-19 pandemic, to increase the allowable percentage from 30 percent of adjusted taxable income to 50 percent of adjusted taxable income, (ii) recording discrete tax expense of $0.4 million for a shortfall on the vesting of our restricted stock units, (iii) the permanent addback of certain nondeductible expenses, including meals and entertainment and nondeductible compensation, and (iv) the effect of the partial valuation allowance for separate company state income tax losses and previously nondeductible interest expense under Section 163(j) of the IRC. Our effective tax rate for the six months ended June 29, 2019, was impacted by the permanent addback of certain nondeductible expenses, including meals and entertainment and executive compensation and the effect of the valuation allowance for separate company state income tax losses. In addition, during the first six months of fiscal 2019, we recorded discrete tax expense of $0.2 million for a shortfall on vesting of our restricted stock units, which was offset by a $0.2 million discrete tax benefit for claiming state tax credits.

Our financial statements contain certain deferred tax assets which primarily resulted from tax benefits associated with the loss before income taxes in prior years, as well as net deferred income tax assets resulting from other temporary differences related to certain reserves, pension obligations, and differences between book and tax depreciation and amortization. We record a valuation allowance against our net deferred tax assets when we determine that, based on the weight of available evidence, it is more likely than not that our net deferred tax assets will not be realized. The ultimate realization of deferred tax assets is dependent upon the generation of future taxable income during the periods in which those temporary differences can be carried forward under tax law. Currently, we have a valuation allowance that covers (i) our separate company state net operating loss carryforwards and (ii) disallowed interest calculated pursuant to the changes made by the Tax Cuts and Jobs Act of 2017, as adjusted by the CARES Act.

At the end of each quarter, we evaluate the weight of available evidence (both positive and negative). We considered the recent reported income generated in the current quarter and prior years (adjusted for unusual one-time items) and income generated in 2017, including the prior year income from Cedar Creek. We also considered evidence related to the four sources of taxable income to determine whether such positive evidence outweighed the negative evidence. The evidence considered included:

• future reversals of existing taxable temporary differences;

• future taxable income exclusive of reversing temporary differences and carryforwards;

• taxable income in prior carryback years if carryback is permitted under the tax law; and

• tax planning strategies.

At the end of the first two fiscal quarters of 2020 and 2019, in our evaluation of the weight of available evidence, we concluded that the weight of the positive evidence outweighed the negative evidence. In addition to the evidence discussed above, we considered as positive evidence forecasted future taxable income, the detail scheduling of the timing of the reversal of our deferred tax assets and liabilities, and the evidence from business and tax planning strategies described below. Although we believe our estimates are reasonable, the ultimate determination of the appropriate amount of valuation allowance involves significant judgments. We believe that the change in control under IRC Section 382 resulting from the completion of the secondary offering on October 23, 2017, will not cause any of our federal net operating losses to expire unused because management has been effectively implementing a real estate strategy involving the sale and leaseback of real estate. This strategy is further supported by the transactions involving four warehouses in January 2018 and two warehouses during 2019. In the first quarter of 2020, the Company executed three more sale and leaseback transactions, involving a total of fourteen warehouse locations. Additionally, the acquisition of Cedar Creek did not generate any limitations under IRC Section 382 on Cedar Creek’s tax assets. We will continue to monitor any changes to our results of operations that may affect our estimates, including any impact of COVID-19 if applicable.

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Income (Loss) per Share

6 Months Ended

Jun. 27, 2020

Earnings Per Share [Abstract]

Income (Loss) per Share

Income (Loss) per Share

We calculate basic income (loss) per share by dividing net income (loss) by the weighted average number of common shares outstanding. We calculate diluted income (loss) per share using the treasury stock method, by dividing net income (loss) by the weighted average number of common shares outstanding plus the dilutive effect of outstanding share-based awards, including restricted stock units, and performance units. Due to the financial results for the six month period ended June 27, 2019, 0.1 million of incremental shares were excluded from the computation of diluted weighted averages outstanding, because their effect would be anti-dilutive.

The reconciliation of basic net income (loss) and diluted net income (loss) per common share for the three- and six-month periods ended June 27, 2020, and June 29, 2019, were as follows:

	Three Months Ended				Six Months Ended
	June 27, 2020		June 29, 2019		June 27, 2020		June 29, 2019
	(In thousands, except per share data)				(In thousands, except per share data)
Net income (loss)	$	6,695	$	6,301	$	5,908	$	(418	)
Weighted-average shares outstanding - basic	9,395		9,351		9,381		9,344
Dilutive effect of share-based awards	7		8		2		—
Weighted-average shares outstanding - diluted	9,402		9,359		$	9,383	$	9,344
Basic income (loss) per share	$	0.71	$	0.67	$	0.63	$	(0.04	)
Diluted income (loss) per share	$	0.71	$	0.67	$	0.63	$	(0.04	)

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Basis of Presentation and Summary of Significant Accounting Policies (Policies)

6 Months Ended

Jun. 27, 2020

Accounting Policies [Abstract]

Basis of Presentation

Basis of Presentation

The accompanying unaudited interim Condensed Consolidated Financial Statements include the accounts of BlueLinx Holdings Inc. and its wholly owned subsidiaries (“the Company”). Our independent registered public accounting firm has not audited the accompanying interim financial statements. We derived the condensed consolidated balance sheet at June 27, 2020, from the audited consolidated financial statements included in our Annual Report on Form 10-K for the fiscal year ended December 28, 2019 (the “Fiscal 2019 Form 10-K”), as filed with the Securities and Exchange Commission on March 11, 2020. In the opinion of our management, the condensed consolidated financial statements reflect all adjustments, which are of a normal recurring nature, necessary for a fair presentation of our statements of operations and comprehensive loss for the three and six months ended June 27, 2020, and June 29, 2019, our balance sheets at June 27, 2020, and December 28, 2019, our statements of cash flows for the six months ended June 27, 2020, and June 29, 2019, and our statements of stockholders’ deficit for the three and six months ended June 27, 2020, and June 29, 2019.

We have condensed or omitted certain notes and other information from the interim condensed consolidated financial statements presented in this report. Therefore, these condensed consolidated interim financial statements should be read in conjunction with the Fiscal 2019 Form 10-K. In addition, certain prior period amounts have been reclassified to conform to the current period's presentation. These reclassifications did not materially impact operating income or consolidated net income (loss). The results for the three and six months ended June 27, 2020, are not necessarily indicative of results that may be expected for the full year ending January 2, 2021, or any other interim period.

We operate on a 5-4-4 fiscal calendar. Our fiscal year ends on the Saturday closest to December 31 of that fiscal year and may comprise 53 weeks in certain years. Our 2020 fiscal year contains 53 weeks and ends on January 2, 2021. Fiscal 2019 contained 52 weeks and ended on December 28, 2019.

Our financial statements are prepared in conformity with U.S. generally accepted accounting principles (U.S. GAAP), which requires us to make estimates based on assumptions about current and, for some estimates, future economic and market conditions, which affect reported amounts and related disclosures in our financial statements. Although our current estimates contemplate current and expected future conditions, as applicable, it is reasonably possible that actual conditions could differ from our expectations, which could materially affect our results of operations and financial position. Some of our estimates may be affected by the ongoing novel coronavirus (COVID-19) pandemic. The severity, magnitude, and duration, as well as the economic consequences of the COVID-19 pandemic, are uncertain, rapidly changing, and difficult to predict. As a result, our accounting estimates and assumptions may change over time in response to COVID-19.

On April 13, 2018, we completed the acquisition of Cedar Creek Holdings, Inc. (“Cedar Creek”). Results for Cedar Creek are included in the consolidated financial information presented herein.

Reclassification of Prior Period Presentation

Reclassification of Prior Period Presentation

An adjustment has been made to the Condensed Consolidated Statements of Cash Flows for the six months ended June 27, 2020, and June 29, 2019, to include outstanding payments as part of the change in accounts payable within cash flows from operating activities.  In previous periods, this change was included within cash flows from financing activities. 

We have reclassified certain costs within the Condensed Consolidated Statements of Operations and Comprehensive Income (Loss) for the three months and six months ended June 27, 2020, and June 29, 2019, from selling, general and administrative to other operating expenses. These costs primarily relate to the integration of the acquisition of Cedar Creek.

Recently Adopted Accounting Standards and Standards Effective in Future Years

Recently Adopted Accounting Standards

Leases.  In 2016, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2016-02, “Leases (Topic 842).” Topic 842 establishes a new lease accounting model. The most significant changes include the clarification of the definition of a lease, the requirement for lessees to recognize for all leases a right-of-use asset and a

corresponding lease liability in the consolidated balance sheet, and additional quantitative and qualitative disclosures which are designed to give financial statement users information on the amount, timing, and uncertainty of cash flows arising from leases. Expenses are recognized in the consolidated statement of income in a manner similar to prior accounting guidance. Lessor accounting under the new standard is substantially unchanged. We adopted this standard, and all related amendments thereto, effective December 30, 2018, the first day of our 2019 fiscal year, using a modified retrospective approach, which applies the provisions of the new guidance at the effective date without adjusting the comparative periods presented. We have elected the package of practical expedients permitted under the transition guidance within the new standard, which among other things, allows us to carry forward the historical accounting relating to lease identification and classification for existing leases upon adoption. We have made an accounting policy election to keep leases with an initial term of 12 months or less off of the consolidated balance sheet. We implemented internal controls and a lease accounting information system to enable the preparation of financial information required by the new standard. The adoption of Topic 842 had a material impact on our condensed consolidated balance sheets but did not have a material impact on our condensed consolidated statements of operations and comprehensive loss. The most significant impact was the recognition of right-of-use assets and lease liabilities of $57.5 million on the condensed consolidated balance sheet as of the adoption date. Additionally, $1.7 million of deferred gains associated with sale-leaseback transactions was recorded as a cumulative-effect adjustment to accumulated deficit.

Accounting Standards Effective in Future Periods

Credit Impairment Losses. In June 2016, the FASB issued ASU 2016-13, “Financial Instruments - Credit Losses (Topic 326).” This ASU sets forth a current expected credit loss (“CECL”) model which requires the measurement of all expected credit losses for financial instruments or other assets (e.g., trade receivables), held at the reporting date based on historical experience, current conditions, and reasonable supportable forecasts. This replaces the existing incurred loss model, is applicable to the measurement of credit losses on financial assets measured at amortized cost, and applies to some off-balance sheet credit exposures. The standard also requires enhanced disclosures to help financial statement users better understand significant estimates and judgments used in estimating credit losses, as well as the credit quality and underwriting standards of an entity's portfolio. ASU 2019-10 extended the effective date of ASU 2016-13 to interim and annual periods beginning after December 22, 2022, for certain public business entities, including smaller reporting companies. We have not completed our assessment of the standard, but we do not expect the adoption to have a material impact on the Company's consolidated financial position, results of operations, or cash flows.

Defined Benefit Pension Plan. In August 2018, the FASB issued ASU No. 2018-14, “Compensation-Retirement-Benefits-Defined Benefit Plans-General (Subtopic 715-20).” The amendments in this update modify the disclosure requirements for employers that sponsor defined benefit pension or other post-retirement plans by removing six previously required disclosures and adding two. The amendments also clarify certain other disclosure requirements. The amendments in this standard are effective for fiscal years ending after December 15, 2020. Early adoption is permitted. We have not completed our assessment of the standard, but we do not expect the adoption to have a material impact on the Company's consolidated financial position, results of operations, or cash flows.

Income Taxes. In December 2019, the FASB issued ASU No.2019-12, “Income taxes (Topic 740): Simplifying the Accounting for Income Taxes.” This ASU simplifies the accounting for income taxes by removing certain exceptions to the general principles in ASC 740 and also clarifies and amends existing guidance to improve consistent application. The amendments in this standard are effective for interim periods and fiscal years beginning after December 15, 2020. Early adoption is permitted. We are currently assessing the impact of the new guidance, but do not expect the adoption to have a material impact on the Company’s consolidated financial position, results of operations, or cash flows.

Revenue Recognition

We recognize revenue when control of promised goods or services is transferred to the Company’s customers in an amount that reflects the consideration we expect to be entitled to in exchange for those goods or services.

Contracts with our customers are generally in the form of standard terms and conditions of sale. From time to time, we may enter into specific contracts with some of our larger customers, which may affect delivery terms. Performance obligations in our contracts generally consist solely of delivery of goods. For all sales channel types, consisting of warehouse, direct, and reload sales, we typically satisfy our performance obligations upon shipment. Our customer payment terms are typical for our industry and may vary by the type and location of our customer and the products or services offered. The term between invoicing and when payment is due is not deemed to be significant by us. For certain sales channels and/or products, our standard terms of payment may be as early as ten days.

In addition, we provide inventory to certain customers through pre-arranged agreements on a consignment basis. Customer consigned inventory is maintained and stored by certain customers; however, ownership and risk of loss remain with us.

All revenues recognized are net of trade allowances (i.e., rebates), cash discounts, and sales returns. Cash discounts and sales returns are estimated using historical experience. Trade allowances are based on the estimated obligations and historical experience. Adjustments to earnings resulting from revisions to estimates on discounts and returns have been insignificant for each of the reported periods. Certain customers may receive cash-based incentives or credits, which are accounted for as variable consideration. We estimate these amounts based on the expected amount to be provided to customers and reduce revenues recognized. We believe that there will not be significant changes to our estimates of variable consideration.

Practical Expedients and Exemptions

We generally expense sales commissions when incurred because the amortization period would have been one year or less. These costs are recorded within selling, general, and administrative expense.

We have made an accounting policy election to treat outbound shipping and handling activities as an expense.

Earnings per Share

We calculate basic income (loss) per share by dividing net income (loss) by the weighted average number of common shares outstanding. We calculate diluted income (loss) per share using the treasury stock method, by dividing net income (loss) by the weighted average number of common shares outstanding plus the dilutive effect of outstanding share-based awards, including restricted stock units, and performance units

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Goodwill and Other Intangible Assets (Tables)

6 Months Ended

Jun. 27, 2020

Goodwill and Intangible Assets Disclosure [Abstract]

Schedule of Definite-Lived Intangible Assets

On June 27, 2020, the gross carrying amounts, accumulated amortization, and net carrying amounts of our definite-lived intangible assets were as follows:

	Gross carrying amounts		Accumulated Amortization			(1)	Net carrying amounts
	(In thousands)
Customer relationships	$	25,500	$	(8,393	)		$	17,107
Noncompete agreements	8,254		(4,564		)		3,690
Trade names	6,826		(5,032		)		1,794
Total	$	40,580	$	(17,989	)		$	22,591

⁽¹⁾ Intangible assets except customer relationships are amortized on a straight-line basis. Customer relationships are amortized on a double declining balance method.

Schedule of Definite-Lived Intangible Asset Amortization

Estimated amortization expense for definite-lived intangible assets for the remaining portion of 2020 and the next four fiscal years is as follows:

	Estimated Amortization
	(In thousands)
2020	$	3,645
2021	4,973
2022	3,111
2023	1,807
2024	1,505

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Revenue Recognition (Tables)

6 Months Ended

Jun. 27, 2020

Revenue from Contract with Customer [Abstract]

Schedule of Revenues Disaggregated by Revenue Source and Sales Channel

The following table presents our revenues disaggregated by revenue source. Certain prior year amounts have been reclassified to conform to the current year product mix of structural and specialty products. Sales and usage-based taxes are excluded from revenues.

	Three Months Ended				Six Months Ended
	June 27, 2020		June 29, 2019		June 27, 2020		June 29, 2019
	(In thousands)				(In thousands)
Structural products	$	249,571	$	224,528	$	490,349	$	421,314
Specialty products	449,205		481,920		870,497		923,835
Total net sales	$	698,776	$	706,448	$	1,360,846	$	1,345,149

The following table presents our revenues disaggregated by sales channel. Following the acquisition and integration of Cedar Creek, our reload sales were less distinct from warehouse sales, as they have been classified in prior periods. In addition, from time to time we may also make changes to certain intercompany allocations amongst sales channels. As a result, certain prior period amounts have been reclassified to conform to the current period revenues disaggregated by sales channel. Such reclassifications do not have an impact on total net sales as reported in any period. Sales and usage-based taxes are excluded from revenues.

	Three Months Ended						Six Months Ended
	June 27, 2020			June 29, 2019			June 27, 2020			June 29, 2019
	(In thousands)						(In thousands)
Warehouse and reload	$	601,279		$	594,024		$	1,163,472		$	1,117,250
Direct	107,848			121,856			217,129			245,212
Customer discounts and rebates	(10,351		)	(9,432		)	(19,755		)	(17,313		)
Total net sales	$	698,776		$	706,448		$	1,360,846		$	1,345,149

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Long-Term Debt Long-Term Debt (Tables)

6 Months Ended

Jun. 27, 2020

Debt Disclosure [Abstract]

Schedule of Long-term Debt Instruments

As of June 27, 2020, and December 28, 2019, long-term debt consisted of the following:

	June 27, 2020			December 28, 2019
	(In thousands)
Revolving Credit Facility (1)	$	322,223		$	326,496
Term Loan Facility (2)	68,822			146,674
Finance lease obligations (3)	272,580			198,011
	663,625			671,181
Unamortized debt issuance costs	(10,989		)	(12,555		)
	652,636			658,626
Less: current maturities of long-term debt	8,134			8,662
Long-term debt, net of current maturities	$	644,502		$	649,964

⁽¹⁾ The weighted average interest rate was 2.6 percent and 3.9 percent as of June 27, 2020 and December 28, 2019, respectively.

⁽²⁾ The weighted average interest rate was 8.0 percent and 8.7 percent as of June 27, 2020 and December 28, 2019, respectively.

⁽³⁾ Refer to Note 8, Leases, for interest rates associated with finance lease obligations.

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Net Periodic Pension (Benefit) Cost (Tables)

6 Months Ended

Jun. 27, 2020

Retirement Benefits [Abstract]

Schedule of net periodic pension cost for pension plans

The following table shows the components of our net periodic pension (benefit) cost:

	Three Months Ended						Six Months Ended
	June 27, 2020			June 29, 2019			June 27, 2020			June 29, 2019
	(In thousands)						(In thousands)
Service cost	$	—		$	48		$	—		$	161
Interest cost on projected benefit obligation	723			973			1,446			2,018
Expected return on plan assets	(1,210		)	(1,295		)	(2,420		)	(2,489		)
Amortization of unrecognized loss	263			279			526			580
Net periodic pension (benefit) cost	$	(224	)	$	5		$	(448	)	$	270

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Leases (Tables)

6 Months Ended

Jun. 27, 2020

Leases [Abstract]

Lease Cost

The components of lease expense were as follows:

	Three Months Ended				Six Months Ended
	June 27, 2020		June 29, 2019		June 27, 2020		June 29, 2019
	(In thousands)				(In thousands)
Operating lease cost:	$	2,977	$	2,991	$	6,098	$	6,135
Finance lease cost:
Amortization of right-of-use assets	$	3,513	$	3,220	$	6,878	$	6,117
Interest on lease liabilities	6,557		4,130		12,721		7,378
Total finance lease costs	$	10,070	$	7,350	$	19,599	$	13,495

Supplemental cash flow information related to leases was as follows:

	Three Months Ended				Six Months Ended
	June 27, 2020		June 29, 2019		June 27, 2020		June 29, 2019
	(In thousands)				(In thousands)
Cash paid for amounts included in the measurement of lease liabilities
Operating cash flows from operating leases	$	2,860	$	3,064	$	5,633	$	5,967
Operating cash flows from finance leases	6,557		3,236		12,721		6,484
Financing cash flows from finance leases	2,403		2,216		4,583		4,403
Right-of-use assets obtained in exchange for lease obligations
Operating leases	$	—	$	—	$	—	$	—
Finance leases	—		3,462		—		4,250

Supplemental Balance Sheet Information

Supplemental balance sheet information related to leases was as follows:

	June 27, 2020			December 28, 2019
	(In thousands)
Finance leases
Property and equipment	$	204,431		$	172,720
Accumulated depreciation	(51,255		)	(30,798		)
Property and equipment, net	$	153,176		$	141,922
Weighted Average Remaining Lease Term (in years)
Operating leases	11.66			11.71
Finance leases	16.58			17.12
Weighted Average Discount Rate
Operating leases	9.40		%	9.34		%
Finance leases	9.75		%	10.11		%

The major categories of our finance lease liabilities as of June 27, 2020 and December 28, 2019 are as follows:

	June 27, 2020		December 28, 2019
	(In thousands)
Equipment and vehicles	$	29,162	$	32,471
Real estate	243,418		165,540
Total finance leases	$	272,580	$	198,011

The following table presents our assets and liabilities related to our leases as of June 27, 2020 and December 28, 2019:

		June 27, 2020		December 28, 2019
		(In thousands)
Assets	Classification
Operating lease right-of-use assets	Operating lease right of use assets	$	50,802	$	54,408
Finance lease right-of-use assets (1)	Property and equipment, net	153,176		141,922
Total lease right-of-use assets		$	203,978	$	196,330
Liabilities
Current portion
Operating lease liabilities	Operating lease liabilities - short term	$	6,633	$	7,317
Finance lease liabilities	Finance lease liabilities - short term	5,958		6,486
Non-current portion
Operating lease liabilities	Operating lease liabilities - long term	44,169		47,091
Finance lease liabilities	Finance lease liabilities - long term	266,622		191,525
Total lease liabilities		$	323,382	$	252,419

⁽¹⁾ Finance lease right-of-use assets are presented net of accumulated amortization of $51.3 and $30.8 million as of June 27, 2020 and December 28, 2019, respectively.

Operating Lease Maturities

As of June 27, 2020, maturities of lease liabilities were as follows:

	Operating leases			Finance leases
	(In thousands)
2020	$	11,109		$	15,385
2021	8,821			29,150
2022	7,876			28,449
2023	6,794			28,121
2024	6,441			27,793
Thereafter	47,514			408,524
Total lease payments	$	88,555		$	537,422
Less: imputed interest	(37,753		)	(264,842		)
Total	$	50,802		$	272,580

On December 28, 2019, maturities of lease liabilities were as follows:

	Operating leases			Finance leases
	(In thousands)
2020	$	11,348		$	24,002
2021	10,111			23,052
2022	8,048			22,230
2023	7,330			21,854
2024	6,413			21,380
Thereafter	50,901			327,439
Total lease payments	$	94,151		$	439,957
Less: imputed interest	(39,743		)	(241,946		)
Total	$	54,408		$	198,011

Finance Lease Maturities

As of June 27, 2020, maturities of lease liabilities were as follows:

	Operating leases			Finance leases
	(In thousands)
2020	$	11,109		$	15,385
2021	8,821			29,150
2022	7,876			28,449
2023	6,794			28,121
2024	6,441			27,793
Thereafter	47,514			408,524
Total lease payments	$	88,555		$	537,422
Less: imputed interest	(37,753		)	(264,842		)
Total	$	50,802		$	272,580

On December 28, 2019, maturities of lease liabilities were as follows:

	Operating leases			Finance leases
	(In thousands)
2020	$	11,348		$	24,002
2021	10,111			23,052
2022	8,048			22,230
2023	7,330			21,854
2024	6,413			21,380
Thereafter	50,901			327,439
Total lease payments	$	94,151		$	439,957
Less: imputed interest	(39,743		)	(241,946		)
Total	$	54,408		$	198,011

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Accumulated Other Comprehensive Loss (Tables)

6 Months Ended

Jun. 27, 2020

Equity [Abstract]

Schedule of changes in accumulated balances for each component of other comprehensive income (loss)

The changes in balances for each component of accumulated other comprehensive loss for the six months ended June 27, 2020, were as follows:

	Foreign currency, net of tax		Defined benefit pension plan, net of tax			Other, net of tax			Total Accumulated Other Comprehensive Loss
	(In thousands)
December 28, 2019, beginning balance	$	666	$	(35,441	)	$	212		$	(34,563	)
Other comprehensive income, net of tax (1)	20		310			(17		)	313
June 27, 2020, ending balance, net of tax	$	686	$	(35,131	)	$	195		$	(34,250	)

⁽¹⁾ For the six months ended June 27, 2020, the actuarial loss recognized in the Condensed Consolidated Statements of Operations and Comprehensive Loss as a component of net periodic pension cost was $0.5 million, net of tax of $0.2 million. Please see Note 6, Net Periodic Pension (Benefit) Cost, for further information.

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Income (Loss) per Share (Tables)

6 Months Ended

Jun. 27, 2020

Earnings Per Share [Abstract]

Schedule of Earnings (Loss) per Share

The reconciliation of basic net income (loss) and diluted net income (loss) per common share for the three- and six-month periods ended June 27, 2020, and June 29, 2019, were as follows:

	Three Months Ended				Six Months Ended
	June 27, 2020		June 29, 2019		June 27, 2020		June 29, 2019
	(In thousands, except per share data)				(In thousands, except per share data)
Net income (loss)	$	6,695	$	6,301	$	5,908	$	(418	)
Weighted-average shares outstanding - basic	9,395		9,351		9,381		9,344
Dilutive effect of share-based awards	7		8		2		—
Weighted-average shares outstanding - diluted	9,402		9,359		$	9,383	$	9,344
Basic income (loss) per share	$	0.71	$	0.67	$	0.63	$	(0.04	)
Diluted income (loss) per share	$	0.71	$	0.67	$	0.63	$	(0.04	)

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Basis of Presentation and Summary of Significant Accounting Policies (Details) - USD ($) $ in Thousands	Dec. 30, 2018	Jun. 27, 2020	Dec. 28, 2019
New Accounting Pronouncements or Change in Accounting Principle [Line Items]
Operating lease assets		$ 50,802	$ 54,408
Operating lease liability		$ 50,802	$ 54,408
ASU 2016-02
New Accounting Pronouncements or Change in Accounting Principle [Line Items]
Operating lease assets	$ 57,500
Operating lease liability	57,500
Cumulative Effect, Period of Adoption, Adjustment | ASU 2016-02
New Accounting Pronouncements or Change in Accounting Principle [Line Items]
Gain associated with sale-leaseback transactions	$ 1,700

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Goodwill and Other Intangible Assets - Narrative (Details) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 27, 2020 USD ($)	Jun. 29, 2019 USD ($)	Jun. 27, 2020 USD ($) reporting_unit	Jun. 29, 2019 USD ($)	Dec. 28, 2019 USD ($)
Finite-Lived Intangible Assets [Line Items]
Goodwill	$ 47,772		$ 47,772		$ 47,772
Number of reporting units | reporting_unit			1
Amortization of intangible assets	$ 1,800	$ 2,000	$ 3,800	$ 4,100
Customer relationships
Finite-Lived Intangible Assets [Line Items]
Useful lives			10 years
Noncompete agreements
Finite-Lived Intangible Assets [Line Items]
Useful lives			2 years
Trade names
Finite-Lived Intangible Assets [Line Items]
Useful lives			1 year

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Goodwill and Other Intangible Assets - Schedule of Definite Lived Intangible Assets (Details) $ in Thousands	Jun. 27, 2020 USD ($)
Finite-Lived Intangible Assets [Line Items]
Gross carrying amounts	$ 40,580
Accumulated Amortization	(17,989)
Net carrying amounts	22,591
Customer relationships
Finite-Lived Intangible Assets [Line Items]
Gross carrying amounts	25,500
Accumulated Amortization	(8,393)
Net carrying amounts	17,107
Noncompete agreements
Finite-Lived Intangible Assets [Line Items]
Gross carrying amounts	8,254
Accumulated Amortization	(4,564)
Net carrying amounts	3,690
Trade names
Finite-Lived Intangible Assets [Line Items]
Gross carrying amounts	6,826
Accumulated Amortization	(5,032)
Net carrying amounts	$ 1,794

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Goodwill and Other Intangible Assets - Amortization Expense (Details) $ in Thousands	Jun. 27, 2020 USD ($)
Goodwill and Intangible Assets Disclosure [Abstract]
2020	$ 3,645
2021	4,973
2022	3,111
2023	1,807
2024	$ 1,505

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Revenue Recognition (Details) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 27, 2020 USD ($) day	Jun. 29, 2019 USD ($)	Jun. 27, 2020 USD ($) day	Jun. 29, 2019 USD ($)
Disaggregation of Revenue [Line Items]
Standard terms of payment, number of days | day	10		10
Net sales	$ 698,776	$ 706,448	$ 1,360,846	$ 1,345,149
Warehouse and reload
Disaggregation of Revenue [Line Items]
Net sales	601,279	594,024	1,163,472	1,117,250
Direct
Disaggregation of Revenue [Line Items]
Net sales	107,848	121,856	217,129	245,212
Customer discounts and rebates
Disaggregation of Revenue [Line Items]
Net sales	(10,351)	(9,432)	(19,755)	(17,313)
Structural products
Disaggregation of Revenue [Line Items]
Net sales	249,571	224,528	490,349	421,314
Specialty products
Disaggregation of Revenue [Line Items]
Net sales	$ 449,205	$ 481,920	$ 870,497	$ 923,835

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Assets Held for Sale (Details) - Discontinued Operations, Held-for-sale $ in Millions	6 Months Ended
	Jun. 27, 2020 USD ($) property	Dec. 28, 2019 USD ($)
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items]
Number of properties held for sale | property	3
Assets held for sale | $	$ 1.1	$ 1.1

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Long-Term Debt - Long-Term Debt (Details) - USD ($) $ in Thousands	Jun. 27, 2020	Dec. 28, 2019
Debt Instrument [Line Items]
Finance lease obligations	$ 272,580	$ 198,011
Total debt, gross	663,625	671,181
Unamortized debt issuance costs	(10,989)	(12,555)
Long-term debt	652,636	658,626
Less: current maturities of long-term debt	8,134	8,662
Long-term debt, net of current maturities	644,502	649,964
Term Loan | Secured debt
Debt Instrument [Line Items]
Long-term debt, gross	$ 68,822	$ 146,674
Weighted average interest rate	8.00%	8.70%
Revolving Credit Facility | Line of credit
Debt Instrument [Line Items]
Long-term debt, gross	$ 322,223	$ 326,496
Weighted average interest rate	2.60%	3.90%

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Long-Term Debt - Narrative (Details) - USD ($)	6 Months Ended
	Jun. 27, 2020	Feb. 28, 2020	Dec. 28, 2019	Apr. 30, 2018
Line of credit | Revolving Credit Facility
Debt Instrument [Line Items]
Long-term line of credit facility	$ 322,200,000		$ 326,500,000
Line of credit facility, remaining borrowing capacity	$ 138,100,000		$ 80,000,000.0
Line of credit facility, interest rate at period end	2.60%		3.90%
Long-term debt, gross	$ 322,223,000		$ 326,496,000
Term Loan Facility | Secured debt
Debt Instrument [Line Items]
Face amount				$ 180,000,000
Quarterly term loan principal payments	402,282
Maximum principal balance		$ 45,000,000
Long-term debt, gross	$ 68,822,000		$ 146,674,000
Stated interest rate	8.00%		8.70%
LIBOR | Minimum | Line of credit | Revolving Credit Facility
Debt Instrument [Line Items]
Variable rate	1.75%
LIBOR | Maximum | Line of credit | Revolving Credit Facility
Debt Instrument [Line Items]
Variable rate	2.25%
Fed Funds Rate | Term Loan Facility | Secured debt
Debt Instrument [Line Items]
Variable rate	0.50%
Eurodollar | Term Loan Facility | Secured debt
Debt Instrument [Line Items]
Variable rate	7.00%
Eurodollar | Minimum | Term Loan Facility | Secured debt
Debt Instrument [Line Items]
Variable rate	1.00%
Base Rate | Term Loan Facility | Secured debt
Debt Instrument [Line Items]
Variable rate	6.00%
Base Rate | Minimum | Line of credit | Revolving Credit Facility
Debt Instrument [Line Items]
Variable rate	0.75%
Base Rate | Minimum | Term Loan Facility | Secured debt
Debt Instrument [Line Items]
Variable rate	2.00%
Base Rate | Maximum | Line of credit | Revolving Credit Facility
Debt Instrument [Line Items]
Variable rate	1.25%
Cedar Creek | Line of credit | Revolving Credit Facility
Debt Instrument [Line Items]
Line of credit facility, maximum borrowing capacity				600,000,000
Line of credit facility, additional borrowing capacity under uncommitted accordion feature				$ 150,000,000
Debt Covenant, Period 1 [Member] | Maximum | Term Loan Facility | Secured debt
Debt Instrument [Line Items]
Net leverage ratio	8.75
Debt Covenant, Period 2 [Member] | Maximum | Term Loan Facility | Secured debt
Debt Instrument [Line Items]
Net leverage ratio	5.25

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Net Periodic Pension (Benefit) Cost (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 27, 2020	Jun. 29, 2019	Jun. 27, 2020	Jun. 29, 2019
Retirement Benefits [Abstract]
Service cost	$ 0	$ 48	$ 0	$ 161
Interest cost on projected benefit obligation	723	973	1,446	2,018
Expected return on plan assets	(1,210)	(1,295)	(2,420)	(2,489)
Amortization of unrecognized loss	263	279	526	580
Net periodic pension (benefit) cost	$ (224)	$ 5	$ (448)	$ 270

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Stock Compensation (Details) - USD ($) $ in Millions	3 Months Ended		6 Months Ended
	Jun. 27, 2020	Jun. 29, 2019	Jun. 27, 2020	Jun. 29, 2019
Share-based Payment Arrangement [Abstract]
Stock based compensation expense	$ 0.9	$ 0.6	$ 1.9	$ 1.3

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Leases - Narrative (Details) - USD ($) $ in Thousands					1 Months Ended	6 Months Ended		12 Months Ended
	Feb. 28, 2020	Jan. 31, 2020	Jun. 20, 2019	May 19, 2019	Jun. 20, 2019	Jun. 27, 2020	Jun. 29, 2019	Dec. 28, 2019	Dec. 29, 2018	Dec. 30, 2017
Operating Leased Assets [Line Items]
Lease renewal term						5 years
Finance lease, term of contractt				15 years					15 years
Finance lease, renewal term				5 years					5 years	10 years
Unrecognized deferred gains, topic 840						$ 84,000		$ 85,800
Proceeds from real estate financing transactions						$ 78,263	$ 44,822
Minimum
Operating Leased Assets [Line Items]
Lease term						1 year
Maximum
Operating Leased Assets [Line Items]
Lease term						15 years
Warehouse faciility
Operating Leased Assets [Line Items]
Finance lease, renewal term						5 years
Proceeds from real estate financing transactions	$ 7,500	$ 34,100			$ 45,000	$ 78,300		$ 27,200
Warehouse faciility | Minimum
Operating Leased Assets [Line Items]
Finance lease, term of contractt						15 years
Warehouse faciility | Maximum
Operating Leased Assets [Line Items]
Finance lease, term of contractt						18 years
Warehouse faciility | University Park, IL
Operating Leased Assets [Line Items]
Proceeds from real estate financing transactions				$ 21,800
Warehouse faciility | Yulee, FL
Operating Leased Assets [Line Items]
Proceeds from real estate financing transactions			$ 13,300

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Leases - Assets and Liabilities (Details) - USD ($) $ in Thousands	Jun. 27, 2020	Dec. 28, 2019
Assets
Operating lease right-of-use assets	$ 50,802	$ 54,408
Finance lease right-of-use assets	153,176	141,922
Total lease right-of-use assets	203,978	196,330
Current portion
Operating lease liabilities	6,633	7,317
Finance lease liabilities	5,958	6,486
Non-current portion
Operating lease liabilities	44,169	47,091
Finance lease liabilities	266,622	191,525
Total lease liabilities	323,382	252,419
Finance lease, accumulated amortization	$ 51,300	$ 30,800

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Leases - Lease Cost (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 27, 2020	Jun. 29, 2019	Jun. 27, 2020	Jun. 29, 2019
Leases [Abstract]
Operating lease cost:	$ 2,977	$ 2,991	$ 6,098	$ 6,135
Amortization of right-of-use assets	3,513	3,220	6,878	6,117
Interest on lease liabilities	6,557	4,130	12,721	7,378
Total finance lease costs	$ 10,070	$ 7,350	$ 19,599	$ 13,495

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Leases - Supplemental Cash Flow (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 27, 2020	Jun. 29, 2019	Jun. 27, 2020	Jun. 29, 2019
Leases [Abstract]
Operating cash flows from operating leases	$ 2,860	$ 3,064	$ 5,633	$ 5,967
Operating cash flows from finance leases	6,557	3,236	12,721	6,484
Financing cash flows from finance leases	2,403	2,216	4,583	4,403
Operating leases	0	0	0	0
Finance leases	$ 0	$ 3,462	$ 0	$ 4,250

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Leases - Supplemental Balance Sheet (Details) - USD ($) $ in Thousands	Jun. 27, 2020	Dec. 28, 2019
Finance leases
Property and equipment	$ 204,431	$ 172,720
Accumulated depreciation	(51,255)	(30,798)
Property and equipment, net	$ 153,176	$ 141,922
Weighted Average Remaining Lease Term (in years)
Operating leases	11 years 7 months 28 days	11 years 8 months 15 days
Finance leases	16 years 6 months 29 days	17 years 1 month 13 days
Weighted Average Discount Rate
Operating leases	9.40%	9.34%
Finance leases	9.75%	10.11%
Total finance leases	$ 272,580	$ 198,011
Equipment and vehicles
Weighted Average Discount Rate
Total finance leases	29,162	32,471
Real estate
Weighted Average Discount Rate
Total finance leases	$ 243,418	$ 165,540

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Leases - Lease Maturities (Details) - USD ($) $ in Thousands	Jun. 27, 2020	Dec. 28, 2019
Operating leases
2020	$ 11,109	$ 11,348
2021	8,821	10,111
2022	7,876	8,048
2023	6,794	7,330
2024	6,441	6,413
Thereafter	47,514	50,901
Total lease payments	88,555	94,151
Less: imputed interest	(37,753)	(39,743)
Total	50,802	54,408
Finance leases
2020	15,385	24,002
2021	29,150	23,052
2022	28,449	22,230
2023	28,121	21,854
2024	27,793	21,380
Thereafter	408,524	327,439
Total lease payments	537,422	439,957
Less: imputed interest	(264,842)	(241,946)
Total	$ 272,580	$ 198,011

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Commitments and Contingencies (Details)	Jun. 27, 2020 employee
Other Commitments [Line Items]
Percentage of employees represented by various labor unions	21.00%
Percentage of employees covered by CBAs	1.00%
Minimum
Other Commitments [Line Items]
Entity number of employees	2,000

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Income Taxes (Details) - USD ($) $ in Millions	3 Months Ended		6 Months Ended
	Jun. 27, 2020	Jun. 29, 2019	Jun. 27, 2020	Jun. 29, 2019
Income Tax Contingency [Line Items]
Effective tax rate	33.90%	27.20%	(36.80%)	29.50%
Benefit for tax credits		$ 0.2		$ 0.2
Tax benefit relating to valuation allowance			$ 3.9
Restricted stock
Income Tax Contingency [Line Items]
Tax expense related to vesting of stock	$ 0.4	$ 0.2	$ 0.4	$ 0.2

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Accumulated Other Comprehensive Loss (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 27, 2020	Jun. 29, 2019	Jun. 27, 2020	Jun. 29, 2019
Accumulated Other Comprehensive Income (Loss), Net of Tax [Roll Forward]
Beginning balance	$ (25,684)	$ (18,285)	$ (26,083)	$ (14,663)
Other comprehensive income, net of tax	133	(1,277)	313	(178)
Ending balance	(18,248)	(12,835)	(18,248)	(12,835)
Total Accumulated Other Comprehensive Loss
Accumulated Other Comprehensive Income (Loss), Net of Tax [Roll Forward]
Beginning balance	(34,383)	(36,030)	(34,563)	(37,129)
Ending balance	(34,250)	$ (37,307)	(34,250)	$ (37,307)
Foreign currency, net of tax
Accumulated Other Comprehensive Income (Loss), Net of Tax [Roll Forward]
Beginning balance			666
Other comprehensive income, net of tax			20
Ending balance	686		686
Defined benefit pension plan, net of tax
Accumulated Other Comprehensive Income (Loss), Net of Tax [Roll Forward]
Beginning balance			(35,441)
Other comprehensive income, net of tax			310
Ending balance	(35,131)		(35,131)
Reclassification of actuarial loss			500
Reclassification of actuarial loss, tax			200
Other, net of tax
Accumulated Other Comprehensive Income (Loss), Net of Tax [Roll Forward]
Beginning balance			212
Other comprehensive income, net of tax			(17)
Ending balance	$ 195		$ 195

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Income (Loss) per Share (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands	3 Months Ended				6 Months Ended
	Jun. 27, 2020	Mar. 28, 2020	Jun. 29, 2019	Mar. 30, 2019	Jun. 27, 2020	Jun. 29, 2019
Earnings Per Share [Abstract]
Antidilutive securities excluded from diluted shares calculation (in shares)						100
Net income (loss)	$ 6,695	$ (787)	$ 6,301	$ (6,719)	$ 5,908	$ (418)
Weighted-average shares outstanding - basic (in shares)	9,395		9,351		9,381	9,344
Dilutive effect of share-based awards (in shares)	7		8		2	0
Weighted-average shares outstanding - diluted (in shares)	9,402		9,359		9,383	9,344
Basic income (loss) (in dollars per share)	$ 0.71		$ 0.67		$ 0.63	$ (0.04)
Diluted income (loss) (in dollars per share)	$ 0.71		$ 0.67		$ 0.63	$ (0.04)

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Label	Element	Value
Accounting Standards Update [Extensible List]	us-gaap_AccountingStandardsUpdateExtensibleList	us-gaap:AccountingStandardsUpdate201602