Debt and Finance Lease Obligations

9 Months Ended

Sep. 27, 2025

As of September 27, 2025 and December 28, 2024, debt and finance lease obligations consisted of the following:


	As of
	September 27, 2025		December 28, 2024
	(In thousands)
Senior Secured Notes (“2029 Notes”) (1)	$	300,000	$	300,000
Revolving credit facilities (2)	—		—

Unamortized debt issuance costs	(1,438)		(2,437)
Unamortized bond discount costs	(2,119)		(2,502)
	296,443		295,061
Finance lease obligations (3)	321,804		292,543
Less: current portion of finance lease obligations	19,725		12,541


Total debt and finance leases, net of current portions	$	598,522	$	575,063

(1) As of September 27, 2025 and December 28, 2024, long-term debt was comprised of $300 million of Senior Secured Notes (“2029 Notes”) issued in October 2021 and maturing November 15, 2029. These notes are presented under the Long-term debt caption of the Company’s unaudited condensed consolidated balance sheets in the net amounts of $296.4 million and $295.1 million as of September 27, 2025 and December 28, 2024, respectively. This balance sheet presentation is net of unamortized discount of $2.1 million and $2.5 million, respectively, and unamortized debt issuance costs of $1.4 million and $2.4 million, respectively, as of September 27, 2025 and December 28, 2024. The Senior Secured Notes are presented in this table at their face value.

(2) Available borrowing capacity under revolving credit facility was $347.3 million and $346.2 million as of September 27, 2025 and December 28, 2024, respectively. The available borrowing capacity reflects undrawn letters of credit.

(3) Refer to Note 7, Leases, for interest rates associated with finance lease obligations. Amounts on this line include $125.1 million and $125.1 million as of September 27, 2025 and December 28, 2024, respectively, for sale-leasebacks of real estate in fiscal 2019 and fiscal 2020 that did not qualify for sale treatment for accounting purposes. Under these sale-leaseback arrangements, the Company is not entitled to legal ownership of the assets at any time, including at expiration of the arrangements, nor is the Company entitled to purchase the assets at a bargain purchase price.

Interest expense, net on the Company’s unaudited condensed consolidated statements of operations consisted of the following components:


	Three Fiscal Months Ended				Nine Fiscal Months Ended
	September 27, 2025		September 28, 2024		September 27, 2025		September 28, 2024
	(In thousands)
Interest expense	$	12,540	$	11,668	$	37,233	$	35,958
Less: Interest income	3,937		7,049		13,593		21,914
Interest expense, net	$	8,603	$	4,619	$	23,640	$	14,044

Interest expense for the reporting periods presented in the above table primarily reflects interest expense for the 2029 Notes, interest expense on finance lease obligations, certain ongoing fees for the revolving credit facilities that are classified as interest expense, amortization of debt issuance costs for the 2029 Notes and revolving credit facilities, and amortization of original-issue bond discount on the 2029 Notes. Total amortization of debt issuance costs plus bond discount costs was $0.5 million and $0.3 million for the three fiscal months ended September 27, 2025 and September 28, 2024, respectively, and $1.1 million and $1.0 million for the nine fiscal months ended September 27, 2025 and September 28, 2024, respectively. Interest expense for the nine fiscal months ended September 27, 2025 and September 28, 2024 also included $0.6 million and $1.2 million, respectively, of estimated interest expense related to import duties that the Company believes it may owe (see Note 8, Commitments and Contingencies). These amounts for the three fiscal months ended September 27, 2025 and September 28, 2024 were not material.

Interest income for the reporting periods presented in the above table primarily reflects interest earned on the Company’s cash and cash equivalents. Refunds received from U.S. Customs for certain retroactive AD/CV import duty adjustments (see Note 2, Inventory) resulted in additional interest income of $0.5 million for the nine fiscal months ended September 27, 2025, and $0.7 million and $2.7 million for the three and nine fiscal months ended September 28, 2024, respectively.

2029 Notes

Interest expense, excluding fees and amortization of debt issuance costs and bond discount, for the 2029 Notes is accrued by the Company in the amount of $4.5 million for each quarterly fiscal period. Interest is paid semi-annually. The 2029 Notes pay the holders interest at a fixed annual rate of 6.0% through maturity. See Note 11, Fair Value, for additional information about the 2029 Notes.

Revolving Credit Facility and Prior Revolving Credit Facility

On August 27, 2025, the Company entered into an asset-backed credit agreement, among the Company, certain of the Company’s subsidiaries, as borrowers (together with the Company, the “Borrowers”) or guarantors thereunder, Bank of America, National Association, in its capacity as administrative agent and swing line lender (“BofA”), and certain other financial institutions party thereto (the “Revolving Credit Agreement”). The Revolving Credit Agreement matures August 27, 2030 and initially provides for a senior secured revolving loan and letter of credit facility of up to $350 million (the “Revolving Credit Facility”). The Revolving Credit Facility also includes a $35 million swing line subfacility and letters of credit in an aggregate amount of up to $30 million are available under the Revolving Credit Facility. Subject to certain conditions and consents, the Borrowers have the option to increase the facility by an aggregate additional principal amount of up to $300 million. If the Borrowers obtain the full amount of the additional increases in commitments, the Revolving Credit Facility could allow total borrowings of up to $650 million. The Company capitalized new debt issuance costs of $2.6 million in connection with execution of the Revolving Credit Agreement on August 27, 2025. On the Company’s consolidated balance sheet, the unamortized balance of these debt issuance costs is included within Other non-current assets.

In connection with the execution of the Revolving Credit Agreement, the Company and certain of the Company’s subsidiaries also entered into a Guaranty and Security Agreement with BofA (the “Revolving Guaranty and Security Agreement”). Pursuant to the Revolving Guaranty and Security Agreement, the Borrowers’ obligations under the Revolving Credit Agreement are secured by a security interest in substantially all of the Company’s and its subsidiaries’ assets (other than real property), including inventories, accounts receivable, and proceeds from those items. A collateral agent is used by the Borrowers.

Any borrowings under the Revolving Credit Agreement are subject to availability under the Borrowing Base (as such term is defined in the Revolving Credit Agreement). The Borrowers will be required to repay revolving loans thereunder to the extent that such revolving loans exceed the Borrowing Base then in effect. The Revolving Credit Facility may be prepaid in whole or in part from time to time without penalty or premium, but including all breakage costs incurred by any lender thereunder.

If borrowings are outstanding under the Revolving Credit Agreement, interest accrues at a rate per annum equal to (i) the then-current Secured Overnight Financing Rate (“SOFR”) plus a margin ranging from 1.25% to 1.75%, with the amount of such margin determined based upon the average of the Borrowers’ excess availability (as defined) for the immediately preceding fiscal quarter as calculated by the administrative agent, for loans based on SOFR, or (ii) the administrative agent’s base rate plus a margin ranging from 0.25% to 0.75%, with the amount of such margin determined based upon the average of the Borrowers’ excess availability (as defined) for the immediately preceding fiscal quarter as calculated by the administrative agent, for loans based on the base rate.

In the event excess availability falls below the greater of (i) $30 million and (ii) 10% of the lesser of (a) the borrowing base and (b) the aggregate revolver commitments of all lenders at such time, the Revolving Credit Agreement requires maintenance of a fixed charge coverage ratio of 1.0 to 1.0 until such time as the Borrowers’ excess availability has been at least the greater of (i) $30 million and (ii) 10% of the lesser of (a) the borrowing base and (b) the maximum permitted credit at such time for a period of 30 consecutive days.

The Revolving Credit Agreement replaced the Borrowers’ existing $350 million secured revolving credit facility, dated April 13, 2018, as amended, by and among the Company, certain of the Company’s subsidiaries, as borrowers or guarantors thereunder, Wells Fargo Bank, National Association, in its capacity as administrative agent, and certain other financial institutions party thereto (the “Prior Revolving Credit Facility”). No borrowings were outstanding on the Prior Revolving Credit Facility and the balance of its unamortized debt issuance costs was not material.

As of September 27, 2025 and December 28, 2024, the Company had no outstanding borrowings under either of the aforementioned revolving credit facilities. Available borrowing capacity, reduced for undrawn letters of credit, under the Revolving Credit Facility and the Prior Revolving Credit Facility was $347.3 million and $346.2 million as of September 27, 2025 and December 28, 2024, respectively. Excess availability, which includes availability under the revolving credit facilities plus cash and cash equivalents in qualified deposit accounts, was $776.6 million and $851.8 million as of September 27, 2025 and December 28, 2024, respectively. See Note 13, Subsequent Event, to the unaudited condensed consolidated financial statements included in Item 1 of this Quarterly Report on Form 10-Q.

Debt Covenants

The Revolving Credit Facility and the 2029 Notes contain various covenants and restrictions, including customary financial covenants. The Company was in compliance with all such covenants as of September 27, 2025 and December 28, 2024. The Company’s right to make draws on the Revolving Credit Facility may be conditioned upon, among other things, compliance with these covenants. These covenants also limit the Company’s ability to, among other things: incur additional debt; grant liens on assets; make investments; repurchase stock; pay dividends and make distributions; sell or acquire assets, including certain real estate assets, outside the ordinary course of business; engage in transactions with affiliates; and make fundamental business changes.

Finance Lease Obligations

The Company’s finance lease liabilities consist of leases related to equipment, vehicles, and real estate, with the majority of those finance leases related to real estate. For more information on the Company’s finance lease obligations, refer to Note 7, Leases.

- Definition

The entire disclosure for information about short-term and long-term debt arrangements, which includes amounts of borrowings under each line of credit, note payable, commercial paper issue, bonds indenture, debenture issue, own-share lending arrangements and any other contractual agreement to repay funds, and about the underlying arrangements, rationale for a classification as long-term, including repayment terms, interest rates, collateral provided, restrictions on use of assets and activities, whether or not in compliance with debt covenants, and other matters important to users of the financial statements, such as the effects of refinancing and noncompliance with debt covenants.

+ References

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+ Details

BlueLinx Holdings Inc. 10-Q