Bluelinx Holdings Inc.

Ladies and gentlemen, thank you for standing by, and welcome to the Blue Links Holdings' fourth quarter and full year 2025 earnings conference call. At this time, all participants are in a listen-only mode, and today's call is being recorded. We will begin with opening remarks and introductions. At this time, I would like to turn the conference over to your host, Investor Relations Officer Tom Morabito. Please go ahead.

Thank you, Operator, and welcome to the Blue Links' fourth quarter and full year 2025 earnings call. Joining me on today's call is Sham Reddy, our Chief Executive Officer, and Kelly Wall, our Chief Financial Officer and Treasurer. At the end of today's prepared remarks, we will take questions. Our fourth quarter and full year news release in Form 10-K were issued yesterday after the close of the market, along with our webcast presentation, and these items are available in the investor section of our website, bluelingsco.com. We encourage you to follow along with the detailed information on the slides during our webcast. Today's discussion contains forward-looking statements. Actual results may differ significantly from those forward-looking statements due to various risks and uncertainties, including the risks described in our most recent SEC filings. Today's presentation includes certain non-GAAP and adjusted financial measures that we believe provide helpful context for investors evaluating our business. Reconciliations to the closest GAAP financial measure can be found in the appendix of our presentation. Now I'll turn it over to Sam.

Thanks, Tom, and good morning, everyone. 2025 embodied grit and determination. Our fourth quarter and full year results demonstrated our ability to grow the business in the face of another year of challenging market headwinds and competitive pricing conditions. Our relentless focus on the company's profitable sales growth strategy, targeting both single and multifamily end markets, with different disruptive product and service expansion initiatives led to flat net sales and higher volumes at solid margins in 2025 when compared to 2024. Our strategy is working as it enabled us to successfully navigate a market that saw 2025 single family housing starts down 7% year over year. In essence, our disciplined execution of the strategy led to share gains across multiple product lines and customer channels. In terms of M&A, our acquisition of DeStero Lumber Company is going well and performing as expected, which I will speak to in a moment. I'd like to offer a few highlights from 2025. We delivered solid full year results thanks to the team's commitment to our product and channel strategies and our business excellence initiatives. As a result, we competed effectively in challenging ed markets to win business and achieve solid gross margins of 18% in specialty products and 9.2% in structural products for the year. Our operating cash flow highlights the effectiveness of our disciplined approach to managing inventory in a challenging market environment. Our results reflect the effective commercial and inventory management capabilities we have as demonstrated by our successful efforts to address the inventory build ahead of a normal spring-summer selling season that never emerged. As market conditions improve, those capabilities are expected to translate into materially stronger cash flow. Our fourth quarter results were also solid for the same reasons, though we did have an extra week in the quarter that increased top line, volumes, and STNA. Revenues rose slightly year over year, driven by higher volumes and the addition of Dispero's specialty product sales in our financial results, which helped offset continued pricing pressure in structural products that lasted through the end of the year. Specialty and structural gross margins were 18.1% and 10%, respectively, reflecting the strength of our customer value proposition and effective inventory management. Our product strategy remains designed to grow our five key higher margin specialty product categories, engineered wood, siding, millwork, industrial, and outdoor living products. Though our efforts are now more deliberately aligned with a channel growth strategy to yield greater success. Despite market softness and multifamily sales that generate incremental structural product sales, The specialty products growth strategy led to approximately 70% of net sales and over 80% of gross profit for both the fourth quarter and full year 2025. While our product mix shift objectives remain on track, we are emphasizing strategic channel growth when assessing new product launches and managing working capital, which we believe gives us a competitive advantage. We continue to grow our multifamily channel fine-tune our builder pull-through efforts with key customers, and expand our national accounts business to more effectively drive sales across key product categories. Our focus on strategic value-added services that align with specific customer needs is also differentiating us in the market, thereby enabling us to gain share and grow in challenging market conditions. We expect the multifamily end market to deliver strong long-term growth as multifamily housing stock is more affordable, which is why we remain committed to investing time, energy, and resources into this channel to augment our institutional sales efforts that ultimately support single-family housing starts and repair and remodel activity. Recent year-over-year housing data has reinforced the strategic merits of investing in our multifamily channel. which grew volumes 19% for BlueLynx in 2025. From a strategic perspective, it, along with our builder pull-through efforts, provided effective pathways for converting customers to key brands, including OnCenter EWP, Allura Fiber Cement Siding, and GP Gypsum products. Naturally, this makes us an even more valuable growth partner to our suppliers, providing opportunities for geographic and product expansion with key partners. On the other hand, multifamily sales have longer inventory cycles and lower gross margins due to direct sales and a competitive pricing environment. From a vision and long-term competitive perspective, we made significant progress in 2025 on our digital transformation journey to become the provider of choice for both suppliers and customers. These transformational investments are designed to rapidly grow our business at scale with both customers and suppliers by providing an exceptional experience that is highly efficient and effective. These investments will also enable us to drive operational excellence via productivity and efficiency improvements that enhance our gross margins and our EBITDA margins. Phase one was completed in a timely manner and under budget. It included enhancements to our master data management platform and a new Oracle transportation management system. Although we successfully launched e-commerce pilots, we decided to place greater emphasis going forward on assisting several of our largest customers with optimizing their more advanced digital marketing platforms, thereby aligning our e-commerce strategy with our channel growth strategy. We currently view AI and current technological advancements as being the broad-based e-commerce solution going forward, rather than traditional e-commerce platforms, though our thinking may change as the fast-paced tech environment evolves. As we mentioned last quarter, we're especially excited about advancing our AI initiatives that enable productivity improvements that align with our sales growth strategy and that support our business excellence initiatives. What began as a pilot with a small group in the company has expanded to give most salaried associates the ability to build agentic agents to streamline their work. We've also launched AI agents that help with modeling and data analytics, just to name a couple. We're even developing AI applications that support our core business, such as value-add services, inventory management, commercial initiatives and training. We expect subsequent digital investment phases to further strengthen our commercial, operational and functional capabilities. Modernizing the business with new technology will set us apart from the competition and accelerate profitable sales growth and operational excellence. From an M&A perspective, we are pleased with the progress we've made with the purchase of DeStero. a long-time Portland-based specialty distributor of premium, high-margin specialty wood products used in custom homes, decks, and upscale multifamily projects. This acquisition advances our key strategies, increasing our specialty product sales, growing multifamily sales, and strengthening our western U.S. presence. We believe DeStero will be able to grow faster than it otherwise could by leveraging our national distribution network, and strong customer relationships. Although it's early, we are pleased with Distero's results and the execution of our integration plan. Our financial position remains strong, with liquidity of $726 million at the end of the year, including $386 million of cash and cash equivalents. This financial strength gives us the flexibility to reinvest in business initiatives that allow us to increase sales, improve productivity, expand our geographic reach, and provide better service to our customers and suppliers, all while providing us with the foundation to continue weathering soft market conditions. We were also able to opportunistically return capital to shareholders by completing $38 million in share repurchases in 2025. Now, for a few more highlights in our full year results. We generated 2025 net sales of $3 billion and $83 million in adjusted EBITDA for a 2.8% adjusted EBITDA margin. Adjusted net income was $7.8 million, or 97 cents per diluted share. We were less profitable in 2025 compared to 2024 due to challenging market conditions and the SG&A impact of investments made to drive our commercial and digital transformation strategies. However, we are pleased that our strategic sales and product expansion efforts led to flat sales and higher volumes at solid margins. Specifically, we experienced 19% volume growth in multifamily and 17% volume growth with some of our national accounts. Our builder pull-through programs executed in partnership with strategic customers led to key channel and specialty product growth. Our differentiated value proposition led to geographic and product expansion with key suppliers with meaningful year-over-year growth across multiple product lines that align with our channel growth strategy. For example, our EWP sales were roughly flat and our EWP volumes grew by more than 7% on a year-over-year basis despite significant headwinds affecting housing starts. We also delivered solid gross margin performance despite difficult market conditions and a competitive pricing environment with specialty products at 18% and structural products at 9.2%. Our relentless focus on the product and channel strategy fueled by our operational and business excellence initiatives such as effective pricing, strong value-add services, exceptional customer service, product expansion gains, and disciplined inventory management help drive these results. Though the year demanded our associates remain focused on the profitable sales growth strategy, customer service, and supplier expansion efforts, we did not lose sight of other important strategic levers to drive financial performance and shore up our financial position. For example, we purchased Destero, refinanced our ABL, and executed on certain cost-out and capital improvement initiatives. Now let's turn to our perspective on the broader housing and building products market. The housing market remains soft, pressuring the building materials and distribution sector. Affordability challenges, low housing turnover, and other factors continue to weigh on both housing and repair and remodel activity. We continue to view these pressures as temporary, especially given the persistent housing shortage and potential government policies that could unlock the housing recovery. Long-term fundamentals remain strong for both new construction and repair and remodel work for the foreseeable future, providing a durable value proposition for Blue Link shareholders. Despite lower housing starts, and tepid repair and remodel activity in 2025, our product and channel strategies drove share gains, supported by product expansion, builder pull-through, and value-add service initiatives, multifamily efforts, and national accounts attention. Our focus on the company's largest accounts enabled growth, despite low housing turnover and high interest rates. We believe that today's strategy and investments will accelerate momentum across all customer segments when the market improves. Regardless of the near-term market backdrop, we will continue executing our profitable sales growth strategy to gain share at scale today, while continuing to make key investments in the business that will position us well for long-term, sustainable, profitable growth. Lastly, We are also monitoring the various proposals that the administration is exploring to help boost the housing market. While details are still being ironed out, we are optimistic that these proposals could kickstart the housing recovery. In summary, we delivered on our strategic priorities in 2025, as demonstrated by our specialty product expansion results, multifamily channel growth, key national accounts growth, margin performance, digital transformation, the DSTERO purchase, and our capital allocation initiatives. As a result, we delivered solid results for both the fourth quarter and full year 2025. We believe in our strategy and will continue to execute on it through the current cycle, which will position us for better than market growth when the housing recovery begins. I'd like to wrap up by thanking all of our associates for their grit, resilience, and dedication during a difficult housing market. Your commitment to our customers, suppliers, and each other continues to drive more profitable specialty and structural product growth across our customer channels in challenging times while positioning us for long-term success. Now I'll turn it over to Kelly, who will provide more details on our financial results and our capital structure.