BlueLinx Holdings Inc. Q1 FY2026 earnings call

• Revenue increased 3% year over year in Q1 2026, driven by DeStero Lumber Company specialty sales and higher volumes in key specialty product categories. - Disciplined approach to channel and product strategies enabled management of margins and growth of volumes across multiple product categories and key customer channels. - Specialty product strategy continues to deliver results with engineered wood, siding, Millwork, industrial, outdoor living products, and other specialty products. - Deliberate alignment of key supplier branded product expansion with strategic channel growth initiatives is driving better commercial outcomes. - Positive momentum across commercial growth vectors like multifamily channel, builder pull - through initiatives, and national accounts business. - Disciplined inventory management, with ability to quickly adjust inventory levels to market conditions. - Progress in AI and digital transformation initiatives, including enhancing master data platform and optimizing Oracle Transportation Management System. - Strong financial position with $659 million in available liquidity at the end of the quarter, and repurchased $3 million of shares in Q1.

Net sales for the first quarter of 2026 were $731 million, up over 3% year - over - year. Specialty product net sales were $512 million, up nearly 7% year over year, with gross profit from specialty product sales up over 3% year over year and a specialty gross margin of 18.1% (down from 18.7% last year). Structural product net sales were $219 million, down nearly 5% compared to the prior year period, but gross profit from structural products was $24 million, an increase of 12% year over year, and structural gross margin was 10.9% (up from 9.3% in the same period last year). Specialty products represented 70% in net sales and approximately 80% of gross profit in the quarter.

• Adjusted EBITDA was $23.5 million, up approximately 20% from Q1 2025 but not expecting similar performance over the balance of 2026 due to ongoing demand pressures in a still - soft housing environment. - For Q2 2026, specialty product gross margin expected to be in the range of 17.5% to 18.5%, with daily sales volumes higher than Q1 2026 but lower than Q2 2025. - For Q2 2026, structural products gross margin expected to be in the range of 9.5% to 10.5%, with daily sales volumes higher than Q1 2026 but lower than Q2 2025. - Plan to manage CapEx in 2026 to reflect current market conditions, focusing on facility maintenance and improvements, truck and trailer replacement, and technology improvements for business and digital transformations.

• Overall market conditions remain soft. - Macroeconomic backdrop for building products distribution depresses demand for projects tied to new bills and repair and remodel activity. - Historically low levels of consumer confidence and persistently high inflation, economic uncertainty, and geopolitical volatility suppress the cyclical housing tailwind. - Soft market conditions lead to lower volumes in certain traditional customer channels and highly competitive market pricing. - Challenges associated with passing on cost increases in a soft market.

Q: How much restocking ahead of the spring selling season contributed to the strong specialty products volume growth during the quarter in categories such as EWP?

A: Zach Pacheco asked about restocking contributing to EWP volume growth. Sham Reddy responded that EWP growth is tied to specific product and channel efforts like builder pull - through programs and creative pricing and rebate programs, not unusual restocking.

Q: Any color on the impact of UFP's acquisition of Moisture Shield on the business and the opportunity to grow and expand with the decorators line of products?

A: Sham Reddy said that decorators is a well - known branded product, and the acquisition of Moisture Shield expands the branded assortment within the portfolio, fitting squarely within the specialty mix shift strategy.

Q: Discuss what favorable changes happened in the gross margin profile since the middle of February, especially regarding structural and specialty products?

A: Kelly Wall talked about structural products benefiting from a rising commodity pricing environment for lumber and panels. Sham Reddy mentioned specialty products have continued efforts to serve customers, with price increases in most categories and value - added services.

Q: Which specific product categories within specialty are more stable now than in January, February and which ones are still seeing sequential competitive pressures?

A: Ben Garner asked about stable and competitive product categories. Sham Reddy said EWP is competitive but has higher margin profile, siding is pressured especially on fiber cement, and multifamily has lower margin profile.

Q: Is there any reason why Q1 2026 wouldn't hold true as the low watermark for the year for revenue and margins?

A: Sham Reddy and Kelly Wall discussed that structural margin performance could cause it to look different this year, but typically Q1 is a bit higher than normal and they expect to return to a more typical pattern.

Q: Are there any categories within specialty where you're seeing price increases from the manufacturers that are sticking to you guys for whatever reason but are difficult to pass on to your customers?

A: Sham Reddy said they've been hit with supplier increases from over 40 vendors, and depending on customer arrangements, it may take more time to pass on price increases, but generally, they can collaborate with suppliers to minimize impact.

Q: Size what the contributions from the true exterior announcement might look like and associated changes to existing siding vendor relationships?

A: Sham Reddy said at this point, can't give indication of how it will roll out through the year, views the product line as complementary, and have no conflict with existing vendor relationships.

Q: Does the outlook on daily sales volumes include DeStero and any change in customer order patterns?

A: Kurt Yinger asked about daily sales volumes including DeStero and customer order patterns. Sham Reddy said volume view includes DeStero and is driven by market demand, and it's a continuation of soft market with competitive dynamics.