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This report on Form 10-Q contains forward-looking statements. Statements that are not historical or current facts, including statements about our expectations, anticipated financial results, projected capital expenditures, and future business prospects, are forward-looking statements. You can identify these statements by our use of words such as "may," "will," "expect," "believe," "should," "plan," "anticipate," and other similar expressions. You can find examples of these statements throughout this report, including "Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations." We cannot guarantee that our actual results will be consistent with the forward-looking statements we make in this report. You should review carefully the risk factors listed in "Item 1A. Risk Factors" in our 2025 Form 10-K, as well as those factors listed in other documents we file with the Securities and Exchange Commission and the risk factor below. We do not assume an obligation to update any forward-looking statement.
Product shortages, loss of key suppliers, and our dependence on third-party suppliers and manufacturers could affect our financial health.
Our ability to offer a wide variety of products to our BMD customers is dependent upon our ability to obtain adequate product supply from manufacturers and other suppliers. In the case of the general line products that we distribute, brand preference and product performance characteristics can have a high degree of influence on our customers' purchasing decisions. In addition, although we have agreements with many of our suppliers, such agreements are generally terminable by either party on relatively short notice. On July 13, 2026, the Company received a notice of termination of the commercial distribution relationship with our primary composite decking supplier. Effective July 31, 2026, the Company entered into an agreement with another supplier of composite decking products that is intended to serve as our sole composite decking offering to our customers. Such a transition can be complex and may not be executed successfully or on our expected timeline. During the transition, we may experience a disruption in product availability, longer lead times, and reduced ability to fulfill customer orders. In addition, we anticipate some customers will shift purchases to competitors to retain access to our former composite decking offering which may result in the loss of certain customer relationships that may be difficult to recover. As a result, our sales and profitability could be impacted during the transition. The supplier transition may also require us to offer discounts to liquidate inventory or record inventory write-offs or reserves if we are unable to sell such products at expected prices or within anticipated timeframes. Further, differences in product specifications, performance characteristics, or product quality may increase the risk of customer dissatisfaction, customer loss, higher return rates, and reputational harm. As such, the supplier transition could adversely impact our financial condition, operating results, and cash flows.
For additional information on the subsequent events related to our distribution agreements, see the discussion in Note 13, Subsequent Events, of the Condensed Notes to Unaudited Quarterly Consolidated Financial Statements in "Item 1. Financial Statements" of this Form 10-Q.
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