##### Table of Contents



UNITED STATES SECURITIES AND EXCHANGE COMMISSION
 Washington, D.C. 20549
 FORM 10-Q
  þ
    
    QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
 For the quarterly period ended October 2, 2010
 OR
 o
    
    TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
 For
the transition period from  
 to
 Commission file number: 1-32383
 BlueLinx Holdings Inc.
  Delaware
    
    77-0627356(State of Incorporation)
    
    (I.R.S. Employer Identification No.)4300 Wildwood Parkway, Atlanta, Georgia
    
    30339(Address of principal executive offices)
    
    (Zip Code)
 (770) 953-7000
 þ o
 o o
  Large accelerated filer o
    
    Accelerated filer o
    
    Non-accelerated filer þ
    
    Smaller reporting company o(Do not check if a smaller reporting company)
 o þ




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##### 



BLUELINX HOLDINGS INC.
 Form 10-Q
 For the Quarterly Period Ended October 2, 2010
 INDEX
 PAGEPART I. FINANCIAL INFORMATIONItem 1. Financial Statements  BlueLinx Holdings Inc. (Unaudited)Consolidated Statements of Operations
    
    
    3Consolidated Balance Sheets
    
    
    5Consolidated Statements of Cash Flows
    
    
    6Notes to Consolidated Financial Statements
    
    
    7Item 2. Managements Discussion and Analysis of Financial Condition and Results of Operations
    
    
    27Item 3. Quantitative and Qualitative Disclosures About Market Risk
    
    
    37Item 4. Controls and Procedures
    
    
    37PART II. OTHER INFORMATIONItem 1. Legal Proceedings
    
    
    38Item 1A. Risk Factors
    
    
    38Item 2. Unregistered Sales of Equity Securities and Uses of Proceeds
    
    
    38Item 6. Exhibits
    
    
    38Signatures
    
    
    39Exhibit Index
    
    
    40Exhibit 31.1Exhibit 31.2Exhibit 32.1Exhibit 32.2
   2




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PART I. FINANCIAL INFORMATION
 
 ITEM 1. FINANCIAL STATEMENTS
 BLUELINX HOLDINGS INC.
 
 CONSOLIDATED STATEMENTS OF OPERATIONS
 (In thousands, except per share data)
 (unaudited)
 Third QuarterPeriod from
    
    
    Period fromJuly 4, 2010
    
    
    July 5, 2009to
    
    
    toOctober 2, 2010
    
    
    October 3, 2009Net sales
    
    $
    464,690
    
    
    $
    449,363Cost of sales
    
    
    414,748
    
    
    
    394,058Gross profit
    
    
    49,942
    
    
    
    55,305Operating expenses:Selling, general, and administrative
    
    
    54,121
    
    
    
    55,024Depreciation and amortization
    
    
    3,111
    
    
    
    3,882Total operating expenses
    
    
    57,232
    
    
    
    58,906Operating loss
    
    
    (7,290
    )
    
    
    (3,601
    )Non-operating expenses:Interest expense
    
    
    9,121
    
    
    
    7,987Changes associated with the ineffective interest rate swap
    
    
    (1,156
    )
    
    
    1,431Write-off of debt issuance costs
    
    
    183
    
    
    
    Other expense, net
    
    
    192
    
    
    
    324Loss before (benefit from) provision for income taxes
    
    
    (15,630
    )
    
    
    (13,343
    )(Benefit from) provision for income taxes
    
    
    (778
    )
    
    
    120Net loss
    
    $
    (14,852
    )
    
    $
    (13,463
    )Basic and diluted weighted average number of common shares outstanding
    
    
    30,714
    
    
    
    30,948Basic and diluted net loss per share applicable to common stock
    
    $
    (0.48
    )
    
    $
    (0.44
    )
   3




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BLUELINX HOLDINGS INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except per share data)
(unaudited)
 Nine Months EndedPeriod from
    
    
    Period fromJanuary 3, 2010
    
    
    January 4, 2009to
    
    
    toOctober 2, 2010
    
    
    October 3, 2009Net sales
    
    $
    1,436,521
    
    
    $
    1,280,000Cost of sales
    
    
    1,270,182
    
    
    
    1,132,119Gross profit
    
    
    166,339
    
    
    
    147,881Operating expenses:Selling, general, and administrative
    
    
    167,724
    
    
    
    163,774Net gain from terminating the Georgia-Pacific supply agreement
    
    
    
    
    
    
    (17,554
    )Depreciation and amortization
    
    
    10,289
    
    
    
    13,153Total operating expenses
    
    
    178,013
    
    
    
    159,343Operating loss
    
    
    (11,674
    )
    
    
    (11,462
    )Non-operating expenses:Interest expense
    
    
    24,641
    
    
    
    24,610Changes associated with the ineffective interest rate swap
    
    
    (3,217
    )
    
    
    7,341Write-off of debt issuance costs
    
    
    183
    
    
    
    1,407Other expense, net
    
    
    443
    
    
    
    482Loss before (benefit from) provision for income taxes
    
    
    (33,724
    )
    
    
    (45,302
    )(Benefit from) provision for income taxes
    
    
    (726
    )
    
    
    28,186Net loss
    
    $
    (32,998
    )
    
    $
    (73,488
    )Basic and diluted weighted average number of common shares outstanding
    
    
    30,667
    
    
    
    31,019Basic and diluted net loss per share applicable to common stock
    
    $
    (1.08
    )
    
    $
    (2.37
    )
   4




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BLUELINX HOLDINGS INC.
 
 CONSOLIDATED BALANCE SHEETS


(In thousands, except share and per share data)
 October 2, 2010
    
    
    January 2, 2010(unaudited)Assets:Current assets:Cash and cash equivalents
    
    $
    12,921
    
    
    $
    29,457Receivables, net
    
    
    166,641
    
    
    
    119,347Inventories, net
    
    
    195,569
    
    
    
    173,185Other current assets
    
    
    22,755
    
    
    
    44,970Total current assets
    
    
    397,886
    
    
    
    366,959Property, plant, and equipment:Land and land improvements
    
    
    52,563
    
    
    
    52,621Buildings
    
    
    96,027
    
    
    
    96,145Machinery and equipment
    
    
    71,328
    
    
    
    69,767Construction in progress
    
    
    2,225
    
    
    
    791Property, plant, and equipment, at cost
    
    
    222,143
    
    
    
    219,324Accumulated depreciation
    
    
    (90,742
    )
    
    
    (82,141
    )Property, plant, and equipment, net
    
    
    131,401
    
    
    
    137,183Other non-current assets
    
    
    49,466
    
    
    
    42,704Total assets
    
    $
    578,753
    
    
    $
    546,846Liabilities:Current liabilities:Accounts payable
    
    $
    80,689
    
    
    $
    64,618Bank overdrafts
    
    
    30,673
    
    
    
    27,232Accrued compensation
    
    
    5,200
    
    
    
    4,879Current maturities of long-term debt
    
    
    7,689
    
    
    
    Other current liabilities
    
    
    22,471
    
    
    
    22,508Total current liabilities
    
    
    146,722
    
    
    
    119,237Non-current liabilities:Long-term debt
    
    
    379,976
    
    
    
    341,669Other non-current liabilities
    
    
    30,677
    
    
    
    35,120Total liabilities
    
    
    557,375
    
    
    
    496,026Shareholders Equity:Common Stock, $0.01 par value,
100,000,000 shares authorized;
32,690,437 and 32,179,253 shares
issued at October 2, 2010 and
January 2, 2010, respectively.
    
    
    327
    
    
    
    322Additional paid-in capital
    
    
    147,327
    
    
    
    145,035Accumulated other comprehensive loss
    
    
    (7,116
    )
    
    
    (8,375
    )Accumulated deficit
    
    
    (119,160
    )
    
    
    (86,162
    )Total shareholders equity
    
    
    21,378
    
    
    
    50,820Total liabilities and shareholders equity
    
    $
    578,753
    
    
    $
    546,846
   5




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BLUELINX HOLDINGS INC.




CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)
(unaudited)
 Nine Months EndedPeriod from
    
    
    Period fromJanuary 3, 2010
    
    
    January 4, 2009to
    
    
    toOctober 2, 2010
    
    
    October 3, 2009Cash flows from operating activities:Net loss
    
    $
    (32,998
    )
    
    $
    (73,488
    )Adjustments to reconcile net loss to net cash used in operations:Depreciation and amortization
    
    
    10,289
    
    
    
    13,153Amortization of debt issue costs
    
    
    1,026
    
    
    
    1,843Net gain from terminating the Georgia-Pacific supply agreement
    
    
    
    
    
    
    (17,554
    )Payment from terminating the Georgia-Pacific supply agreement
    
    
    4,706
    
    
    
    9,412Gain from sale of properties
    
    
    
    
    
    
    (4,406
    )Prepayment fees associated with sale of facility
    
    
    
    
    
    
    616Changes associated with the ineffective interest rate swap
    
    
    (3,217
    )
    
    
    7,341Write-off of debt issuance costs
    
    
    183
    
    
    
    1,407Vacant property charges, net
    
    
    
    
    
    
    457Deferred income tax (benefit) provision
    
    
    (621
    )
    
    
    27,228Share-based compensation expense
    
    
    2,880
    
    
    
    2,170Decrease in restricted cash related to the ineffective interest rate swap, insurance, and other
    
    
    6,009
    
    
    
    3,021Changes in assets and liabilities:Receivables
    
    
    (47,294
    )
    
    
    (38,003
    )Inventories
    
    
    (22,384
    )
    
    
    16,359Accounts payable
    
    
    16,071
    
    
    
    30,170Changes in other working capital
    
    
    21,285
    
    
    
    6,970Other
    
    
    (3,849
    )
    
    
    (192
    )Net cash used in operating activities
    
    
    (47,914
    )
    
    
    (13,496
    )Cash flows from investing activities:Property, plant and equipment investments
    
    
    (2,689
    )
    
    
    (952
    )Proceeds from disposition of assets
    
    
    689
    
    
    
    8,454Net cash (used in) provided by investing activities
    
    
    (2,000
    )
    
    
    7,502Cash flows from financing activities:Repurchase of common stock
    
    
    (583
    )
    
    
    (1,862
    )Increase (decrease) in revolving credit facility
    
    
    45,996
    
    
    
    (100,000
    )Debt financing costs
    
    
    (6,521
    )
    
    
    Payment on capital lease obligations
    
    
    (564
    )
    
    
    Payment of principal on mortgage
    
    
    
    
    
    
    (3,201
    )Prepayment fees associated with sale of facility
    
    
    
    
    
    
    (616
    )Increase (decrease) in bank overdrafts
    
    
    3,441
    
    
    
    (4,699
    )Increase in restricted cash related to the mortgage
    
    
    (8,397
    )
    
    
    (8,442
    )Other
    
    
    6
    
    
    
    (41
    )Net cash provided by (used in) financing activities
    
    
    33,378
    
    
    
    (118,861
    )Decrease in cash
    
    
    (16,536
    )
    
    
    (124,855
    )Balance, beginning of period
    
    
    29,457
    
    
    
    150,353Balance, end of period
    
    $
    12,921
    
    
    $
    25,498
   6




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BLUELINX HOLDINGS INC.
 
 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
 OCTOBER 2, 2010
 1. Basis of Presentation and Background
 Basis of Presentation
    2. Summary of Significant Accounting Policies
 Revenue Recognition
   
    
    We are the primary obligor responsible for fulfillment and all other aspects of the
customer relationship.
 
    
    Title passes to BlueLinx and we carry all risk of loss related to warehouse and
third-party (reload) inventory and inventory shipped directly from vendors to our
customers.
 
    
    We are responsible for all product returns.
 
    
    We control the selling price for all channels.
 
    
    We select the supplier.
 
    
    We bear all credit risk.
  7




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Cash and Cash Equivalents
  Restricted Cash
   October 2,
    
    
    January 2,2010
    
    
    2010Cash in escrow:Mortgage
    
    $
    27,812
    
    
    $
    19,415Insurance
    
    
    9,427
    
    
    
    9,411Interest rate swap
    
    
    
    
    
    
    6,690Other
    
    
    2,673
    
    
    
    2,008Total
    
    $
    39,912
    
    
    $
    37,524
 Allowance for Doubtful Accounts and Related Reserves
  Inventory Valuation
   8




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Consignment Inventory
  Consideration Received from Vendors and Paid to Customers
   Earnings per Common Share
     9




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Stock-Based Compensation
   Income Taxes
      10




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##### Table of Contents



Impairment of Long-Lived Assets
      Self-Insurance
  3. Restructuring Charges
   11




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##### Table of Contents



2007 Facility Consolidation and Severance Costs
   Balance at July 3, 2010
    
    $
    11,072Payments
    
    
    (538
    )Accretion of discount used to calculate liability
    
    
    168Balance at October 2, 2010
    
    $
    10,702
  Balance at January 2, 2010
    
    $
    11,755Payments
    
    
    (1,608
    )Accretion of discount used to calculate liability
    
    
    555Balance at October 2, 2010
    
    $
    10,702
 2008 Facility Consolidation and Severance Costs
   Balance at July 3, 2010
    
    $
    198Payments and other
    
    
    (156
    )Sublease income
    
    
    70Balance at October 2, 2010
    
    $
    112
  12




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##### Table of Contents



Balance at January 2, 2010
    
    $
    645Payments and other
    
    
    (743
    )Sublease income
    
    
    210Balance at October 2, 2010
    
    $
    112
 2009 Facility Consolidations and Severance Costs
   Facility
    
    
    SeveranceConsolidation
    
    
    Costs
    
    
    TotalBalance at July 3, 2010
    
    $
    498
    
    
    $
    16
    
    
    $
    514Payments and other
    
    
    (37
    )
    
    
    (16
    )
    
    
    (53
    )Balance at October 2, 2010
    
    $
    461
    
    
    $
    
    
    
    $
    461
  Facility
    
    
    SeveranceConsolidation
    
    
    Costs
    
    
    TotalBalance at January 2, 2010
    
    $
    571
    
    
    $
    151
    
    
    $
    722Payments and other
    
    
    (110
    )
    
    
    (151
    )
    
    
    (261
    )Balance at October 2, 2010
    
    $
    461
    
    
    $
    
    
    
    $
    461
 2010 Severance Costs
   Balance at July 4, 2010
    
    $
    Charges
    
    
    342Payments
    
    
    (70
    )Balance at October 2, 2010
    
    $
    272
 4. Assets Held for Sale and Net Gain on Disposition
   13




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5. Comprehensive Loss
  Third QuarterPeriod from
    
    
    Period fromJuly 4, 2010
    
    
    July 5, 2009to
    
    
    toOctober 2, 2010
    
    
    October 3, 2009Net loss
    
    $
    (14,852
    )
    
    $
    (13,463
    )Other comprehensive income:Foreign currency translation
    
    
    627
    
    
    
    844Unrealized gain from cash flow hedge
    
    
    324
    
    
    
    2,438Comprehensive loss
    
    $
    (13,901
    )
    
    $
    (10,181
    )
 Nine Months EndedPeriod from
    
    
    Period fromJanuary 3, 2010
    
    
    January 4, 2009to
    
    
    toOctober 2, 2010
    
    
    October 3, 2009Net loss
    
    $
    (32,998
    )
    
    $
    (73,488
    )Other comprehensive income:Foreign currency translation
    
    
    286
    
    
    
    1,438Unrealized gain from cash flow hedge
    
    
    973
    
    
    
    7,913Comprehensive loss
    
    $
    (31,739
    )
    
    $
    (64,137
    )
 6. Employee Benefits
 Defined Benefit Pension Plans
   Third QuarterPeriod from July 4, 2010,
    
    
    Period from July 5,2010 to October 2, 2010
    
    
    2009 to October 3, 2009Service cost
    
    $
    498
    
    
    $
    452Interest cost on projected benefit obligation
    
    
    1,186
    
    
    
    1,125Expected return on plan assets
    
    
    (1,232
    )
    
    
    (1,132
    )Amortization of unrecognized loss
    
    
    123
    
    
    
    180Net periodic pension cost
    
    $
    575
    
    
    $
    625
  14




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Nine Months EndedPeriod from January 3,
    
    
    Period from January 4,2010 to October 2, 2010
    
    
    2009 to October 3, 2009Service cost
    
    $
    1,494
    
    
    $
    1,356Interest cost on projected benefit obligation
    
    
    3,558
    
    
    
    3,375Expected return on plan assets
    
    
    (3,696
    )
    
    
    (3,396
    )Amortization of unrecognized loss
    
    
    369
    
    
    
    540Net periodic pension cost
    
    $
    1,725
    
    
    $
    1,875
 7. Revolving Credit Facility
      15




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8. Mortgage
   2011
    
    $
    1,1902012
    
    
    3,0542013
    
    
    3,3092014
    
    
    3,5292015
    
    
    3,763Thereafter
    
    
    270,824
 9. Derivatives
     Period from July 4, 2010
    
    
    Period from July 5,to October 2, 2010
    
    
    2009 to October 3, 2009Charges associated with reducing our borrowings
outstanding
    
    $
    
    
    
    $
    1,881Amortization of accumulated other comprehensive loss
    
    
    532
    
    
    
    556Gain related to fair value changes
    
    
    (1,688
    )
    
    
    (1,006
    )Changes associated with the ineffective interest rate swap
    
    $
    (1,156
    )
    
    $
    1,431
  16




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##### Table of Contents



Period from January 3, 2010
    
    
    Period from January 4,to October 2, 2010
    
    
    2009 to October 3, 2009Charges
associated with reducing our borrowings outstanding
    
    $
    
    
    
    $
    9,048Amortization of accumulated other comprehensive loss
    
    
    1,592
    
    
    
    2,403Gain related to fair value changes
    
    
    (4,809
    )
    
    
    (4,110
    )Changes associated with the ineffective interest rate swap
    
    $
    (3,217
    )
    
    $
    7,341
  Balance at January 2, 2010
    
    $
    2,675Amortization of accumulated other comprehensive loss recorded to interest expense
    
    
    (1,592
    )Balance at October 2, 2010
    
    $
    1,083
   10. Fair Value Measurements
     17




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##### Table of Contents



Fair value at January 2, 2010
    
    $
    (8,924
    )Unrealized gains included in earnings, net
    
    
    4,809Fair value at October 2, 2010
    
    $
    (4,115
    )
   11. Termination and Modification Agreement with G-P
   12. Related Party Transactions
  13. Commitments and Contingencies
 Environmental and Legal Matters
   18




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##### Table of Contents



Collective Bargaining Agreements
  14. Tender Offer
    ,
    19




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##### Table of Contents



15. Subsequent Events
  16. Supplemental Consolidating Financial Statements
 ,
  BlueLinxBlueLinx
    
    
    CorporationHoldings
    
    
    and
    
    
    LLCInc.
    
    
    Subsidiaries
    
    
    Subsidiaries
    
    
    Eliminations
    
    
    ConsolidatedNet sales
    
    $
    
    
    
    $
    464,690
    
    
    $
    7,457
    
    
    $
    (7,457
    )
    
    $
    464,690Cost of sales
    
    
    
    
    
    
    414,748
    
    
    
    
    
    
    
    
    
    
    
    414,748Gross profit
    
    
    
    
    
    
    49,942
    
    
    
    7,457
    
    
    
    (7,457
    )
    
    
    49,942Operating expenses:Selling, general and administrative
    
    
    4,643
    
    
    
    56,893
    
    
    
    42
    
    
    
    (7,457
    )
    
    
    54,121Depreciation and amortization
    
    
    
    
    
    
    2,151
    
    
    
    960
    
    
    
    
    
    
    
    3,111Total operating expenses
    
    
    4,643
    
    
    
    59,044
    
    
    
    1,002
    
    
    
    (7,457
    )
    
    
    57,232Operating (loss) income
    
    
    (4,643
    )
    
    
    (9,102
    )
    
    
    6,455
    
    
    
    
    
    
    
    (7,290
    )Non-operating expenses:Interest expense
    
    
    
    
    
    
    4,371
    
    
    
    4,750
    
    
    
    
    
    
    
    9,121Changes associated with ineffective interest rate swap
    
    
    
    
    
    
    (1,156
    )
    
    
    
    
    
    
    
    
    
    
    (1,156
    )Write-off of debt issuance costs
    
    
    
    
    
    
    183
    
    
    
    
    
    
    
    
    
    
    
    183Other expense (income), net
    
    
    
    
    
    
    214
    
    
    
    (22
    )
    
    
    
    
    
    
    192(Loss) income before (benefit from) provision for income
taxes
    
    
    (4,643
    )
    
    
    (12,714
    )
    
    
    1,727
    
    
    
    
    
    
    
    (15,630
    )(Benefit from) provision for income taxes
    
    
    (916
    )
    
    
    (536
    )
    
    
    674
    
    
    
    
    
    
    
    (778
    )Equity in loss of subsidiaries
    
    
    (11,125
    )
    
    
    
    
    
    
    
    
    
    
    11,125
    
    
    
    Net (loss) income
    
    $
    (14,852
    )
    
    $
    (12,178
    )
    
    $
    1,053
    
    
    $
    11,125
    
    
    $
    (14,852
    )
  20




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BlueLinxHoldings
    
    
    BlueLinx
    
    
    LLCInc.
    
    
    Corporation
    
    
    Subsidiaries
    
    
    Eliminations
    
    
    ConsolidatedNet sales
    
    $
    
    
    
    $
    449,363
    
    
    $
    7,457
    
    
    $
    (7,457
    )
    
    $
    449,363Cost of sales
    
    
    
    
    
    
    394,058
    
    
    
    
    
    
    
    
    
    
    
    394,058Gross profit
    
    
    
    
    
    
    55,305
    
    
    
    7,457
    
    
    
    (7,457
    )
    
    
    55,305Operating expenses (income):Selling, general and administrative
    
    
    1,399
    
    
    
    61,035
    
    
    
    47
    
    
    
    (7,457
    )
    
    
    55,024Depreciation and amortization
    
    
    
    
    
    
    2,922
    
    
    
    960
    
    
    
    
    
    
    
    3,882Total operating expenses
    
    
    1,399
    
    
    
    63,957
    
    
    
    1,007
    
    
    
    (7,457
    )
    
    
    58,906Operating (loss) income
    
    
    (1,399
    )
    
    
    (8,652
    )
    
    
    6,450
    
    
    
    
    
    
    
    (3,601
    )Non-operating expenses:Interest expense
    
    
    
    
    
    
    3,364
    
    
    
    4,623
    
    
    
    
    
    
    
    7,987Changes associated with ineffective interest rate swap
    
    
    
    
    
    
    1,431
    
    
    
    
    
    
    
    
    
    
    
    1,431Other expense (income), net
    
    
    
    
    
    
    386
    
    
    
    (62
    )
    
    
    
    
    
    
    324(Loss) income before (benefit from) provision for income
taxes
    
    
    (1,399
    )
    
    
    (13,833
    )
    
    
    1,889
    
    
    
    
    
    
    
    (13,343
    )(Benefit from) provision for income taxes
    
    
    (720
    )
    
    
    104
    
    
    
    736
    
    
    
    
    
    
    
    120Equity in (loss) income of subsidiaries
    
    
    (12,784
    )
    
    
    
    
    
    
    
    
    
    
    12,784
    
    
    
    Net income (loss)
    
    $
    (13,463
    )
    
    $
    (13,937
    )
    
    $
    1,153
    
    
    $
    12,784
    
    
    $
    (13,463
    )
  BlueLinxBlueLinx
    
    
    CorporationHoldings
    
    
    and
    
    
    LLCInc.
    
    
    Subsidiaries
    
    
    Subsidiaries
    
    
    Eliminations
    
    
    ConsolidatedNet sales
    
    $
    
    
    
    $
    1,436,521
    
    
    $
    22,369
    
    
    $
    (22,369
    )
    
    $
    1,436,521Cost of sales
    
    
    
    
    
    
    1,270,182
    
    
    
    
    
    
    
    
    
    
    
    1,270,182Gross profit
    
    
    
    
    
    
    166,339
    
    
    
    22,369
    
    
    
    (22,369
    )
    
    
    166,339Operating expenses:Selling, general and administrative
    
    
    8,099
    
    
    
    181,862
    
    
    
    132
    
    
    
    (22,369
    )
    
    
    167,724Depreciation and amortization
    
    
    
    
    
    
    7,408
    
    
    
    2,881
    
    
    
    
    
    
    
    10,289Total operating expenses
    
    
    8,099
    
    
    
    189,270
    
    
    
    3,013
    
    
    
    (22,369
    )
    
    
    178,013Operating (loss) income
    
    
    (8,099
    )
    
    
    (22,931
    )
    
    
    19,356
    
    
    
    
    
    
    
    (11,674
    )Non-operating expenses:Interest expense
    
    
    
    
    
    
    10,384
    
    
    
    14,257
    
    
    
    
    
    
    
    24,641Changes associated with the ineffective interest rate swap
    
    
    
    
    
    
    (3,217
    )
    
    
    
    
    
    
    
    
    
    
    (3,217
    )Write-off of debt issuance costs
    
    
    
    
    
    
    183
    
    
    
    
    
    
    
    
    
    
    
    183Other expense, net
    
    
    
    
    
    
    428
    
    
    
    15
    
    
    
    
    
    
    
    443(Loss) income before (benefit from) provision for income
taxes
    
    
    (8,099
    )
    
    
    (30,709
    )
    
    
    5,084
    
    
    
    
    
    
    
    (33,724
    )(Benefit from) provision for income taxes
    
    
    (2,234
    )
    
    
    (475
    )
    
    
    1,983
    
    
    
    
    
    
    
    (726
    )Equity in loss of subsidiaries
    
    
    (27,133
    )
    
    
    
    
    
    
    
    
    
    
    27,133
    
    
    
    Net (loss) income
    
    $
    (32,998
    )
    
    $
    (30,234
    )
    
    $
    3,101
    
    
    $
    27,133
    
    
    $
    (32,998
    )
  21




---



##### Table of Contents



BlueLinxHoldings
    
    
    BlueLinx
    
    
    LLCInc.
    
    
    Corporation
    
    
    Subsidiaries
    
    
    Eliminations
    
    
    ConsolidatedNet sales
    
    $
    
    
    
    $
    1,280,000
    
    
    $
    22,460
    
    
    $
    (22,460
    )
    
    $
    1,280,000Cost of sales
    
    
    
    
    
    
    1,132,119
    
    
    
    
    
    
    
    
    
    
    
    1,132,119Gross profit
    
    
    
    
    
    
    147,881
    
    
    
    22,460
    
    
    
    (22,460
    )
    
    
    147,881Operating expenses (income):Selling, general and administrative
    
    
    4,466
    
    
    
    185,851
    
    
    
    (4,113
    )
    
    
    (22,460
    )
    
    
    163,744Net gain from terminating the Georgia-Pacific supply
agreement
    
    
    
    
    
    
    (17,554
    )
    
    
    
    
    
    
    
    
    
    
    (17,554
    )Depreciation and amortization
    
    
    
    
    
    
    10,189
    
    
    
    2,964
    
    
    
    
    
    
    
    13,153Total operating expenses (income)
    
    
    4,466
    
    
    
    178,486
    
    
    
    (1,149
    )
    
    
    (22,460
    )
    
    
    159,343Operating (loss) income
    
    
    (4,466
    )
    
    
    (30,605
    )
    
    
    23,609
    
    
    
    
    
    
    
    (11,462
    )Non-operating expenses:Interest expense
    
    
    
    
    
    
    10,042
    
    
    
    14,568
    
    
    
    
    
    
    
    24,610Changes associated with ineffective interest rate swap
    
    
    
    
    
    
    7,341
    
    
    
    
    
    
    
    
    
    
    
    7,341Write-off of debt issuance costs
    
    
    
    
    
    
    1,407
    
    
    
    
    
    
    
    
    
    
    
    1,407Other expense (income), net
    
    
    
    
    
    
    616
    
    
    
    (134
    )
    
    
    
    
    
    
    482(Loss) income before (benefit from) provision for
income taxes
    
    
    (4,466
    )
    
    
    (50,011
    )
    
    
    9,175
    
    
    
    
    
    
    
    (45,302
    )(Benefit from) provision for income taxes
    
    
    (3,679
    )
    
    
    28,287
    
    
    
    3,578
    
    
    
    
    
    
    
    28,186Equity in (loss) income of subsidiaries
    
    
    (72,701
    )
    
    
    
    
    
    
    
    
    
    
    72,701
    
    
    
    Net (loss) income
    
    $
    (73,488
    )
    
    $
    (78,298
    )
    
    $
    5,597
    
    
    $
    72,701
    
    
    $
    (73,488
    )
  22




---



##### Table of Contents



BlueLinxBlueLinx
    
    
    Corporation
    
    
    LLCHoldings Inc.
    
    
    and Subsidiaries
    
    
    Subsidiaries
    
    
    Eliminations
    
    
    ConsolidatedAssets:Current assets:Cash
    
    $
    28
    
    
    $
    12,530
    
    
    $
    363
    
    
    $
    
    
    
    $
    12,921Receivables
    
    
    
    
    
    
    166,641
    
    
    
    
    
    
    
    
    
    
    
    166,641Inventories
    
    
    
    
    
    
    195,569
    
    
    
    
    
    
    
    
    
    
    
    195,569Deferred income tax assets
    
    
    275
    
    
    
    (910
    )
    
    
    
    
    
    
    635
    
    
    
    Other current assets
    
    
    742
    
    
    
    20,414
    
    
    
    1,599
    
    
    
    
    
    
    
    22,755Intercompany receivable
    
    
    59,161
    
    
    
    4,890
    
    
    
    
    
    
    
    (64,051
    )
    
    
    Total current assets
    
    
    60,206
    
    
    
    399,134
    
    
    
    1,962
    
    
    
    (63,416
    )
    
    
    397,886Property and equipment:Land and land improvements
    
    
    
    
    
    
    3,050
    
    
    
    49,513
    
    
    
    
    
    
    
    52,563Buildings
    
    
    
    
    
    
    7,376
    
    
    
    88,651
    
    
    
    
    
    
    
    96,027Machinery and equipment
    
    
    
    
    
    
    71,328
    
    
    
    
    
    
    
    
    
    
    
    71,328Construction in progress
    
    
    
    
    
    
    2,225
    
    
    
    
    
    
    
    
    
    
    
    2,225Property and equipment, at cost
    
    
    
    
    
    
    83,979
    
    
    
    138,164
    
    
    
    
    
    
    
    222,143Accumulated depreciation
    
    
    
    
    
    
    (64,750
    )
    
    
    (25,992
    )
    
    
    
    
    
    
    (90,742
    )Property and equipment, net
    
    
    
    
    
    
    19,229
    
    
    
    112,172
    
    
    
    
    
    
    
    131,401Investment in subsidiaries
    
    
    (34,346
    )
    
    
    
    
    
    
    
    
    
    
    34,346
    
    
    
    Non-current deferred income tax assets
    
    
    
    
    
    
    5,075
    
    
    
    2,227
    
    
    
    (7,302
    )
    
    
    Other non-current assets
    
    
    
    
    
    
    17,834
    
    
    
    31,632
    
    
    
    
    
    
    
    49,466Total assets
    
    $
    25,860
    
    
    $
    441,272
    
    
    $
    147,993
    
    
    $
    (36,372
    )
    
    $
    578,753Liabilities:Current liabilities:Accounts payable
    
    $
    2,832
    
    
    $
    77,857
    
    
    $
    
    
    
    $
    
    
    
    $
    80,689Bank overdrafts
    
    
    
    
    
    
    30,673
    
    
    
    
    
    
    
    
    
    
    
    30,673Accrued compensation
    
    
    45
    
    
    
    5,155
    
    
    
    
    
    
    
    
    
    
    
    5,200Deferred income tax liabilities
    
    
    (635
    )
    
    
    
    
    
    
    
    
    
    
    635
    
    
    
    Current maturities of long-term debt
    
    
    
    
    
    
    7,689
    
    
    
    
    
    
    
    
    
    
    
    7,689Other current liabilities
    
    
    
    
    
    
    20,559
    
    
    
    1,912
    
    
    
    
    
    
    
    22,471Intercompany payable
    
    
    2,240
    
    
    
    56,927
    
    
    
    4,884
    
    
    
    (64,051
    )
    
    
    Total current liabilities
    
    
    4,482
    
    
    
    198,860
    
    
    
    6,796
    
    
    
    (63,416
    )
    
    
    146,722Non-current liabilities:Long-term debt
    
    
    
    
    
    
    94,307
    
    
    
    285,669
    
    
    
    
    
    
    
    379,976Non-current deferred income tax
liabilities
    
    
    
    
    
    
    2,524
    
    
    
    4,778
    
    
    
    (7,302
    )
    
    
    Other non-current liabilities
    
    
    
    
    
    
    30,677
    
    
    
    
    
    
    
    
    
    
    
    30,677Total liabilities
    
    
    4,482
    
    
    
    326,368
    
    
    
    297,243
    
    
    
    (70,718
    )
    
    
    557,375Shareholders Equity/Parents Investment
    
    
    21,378
    
    
    
    114,904
    
    
    
    (149,250
    )
    
    
    34,346
    
    
    
    21,378Total liabilities and equity
    
    $
    25,860
    
    
    $
    441,272
    
    
    $
    147,993
    
    
    $
    (36,372
    )
    
    $
    578,753
  23




---



##### Table of Contents



BlueLinxBlueLinx
    
    
    Corporation
    
    
    LLCHoldings Inc.
    
    
    and Subsidiaries
    
    
    Subsidiaries
    
    
    Eliminations
    
    
    ConsolidatedAssets:Current assets:Cash
    
    $
    32
    
    
    $
    29,129
    
    
    $
    296
    
    
    $
    
    
    
    $
    29,457Receivables
    
    
    
    
    
    
    119,347
    
    
    
    
    
    
    
    
    
    
    
    119,347Inventories
    
    
    
    
    
    
    173,185
    
    
    
    
    
    
    
    
    
    
    
    173,185Deferred income tax assets
    
    
    275
    
    
    
    (910
    )
    
    
    
    
    
    
    635
    
    
    
    Other current assets
    
    
    925
    
    
    
    42,172
    
    
    
    1,873
    
    
    
    
    
    
    
    44,970Intercompany receivable
    
    
    63,905
    
    
    
    5,793
    
    
    
    
    
    
    
    (69,698
    )
    
    
    Total current assets
    
    
    65,137
    
    
    
    368,716
    
    
    
    2,169
    
    
    
    (69,063
    )
    
    
    366,959Property and equipment:Land and land improvements
    
    
    
    
    
    
    3,134
    
    
    
    49,487
    
    
    
    
    
    
    
    52,621Buildings
    
    
    
    
    
    
    7,494
    
    
    
    88,651
    
    
    
    
    
    
    
    96,145Machinery and equipment
    
    
    
    
    
    
    69,767
    
    
    
    
    
    
    
    
    
    
    
    69,767Construction in progress
    
    
    
    
    
    
    791
    
    
    
    
    
    
    
    
    
    
    
    791Property and equipment, at cost
    
    
    
    
    
    
    81,186
    
    
    
    138,138
    
    
    
    
    
    
    
    219,324Accumulated depreciation
    
    
    
    
    
    
    (59,030
    )
    
    
    (23,111
    )
    
    
    
    
    
    
    (82,141
    )Property and equipment, net
    
    
    
    
    
    
    22,156
    
    
    
    115,027
    
    
    
    
    
    
    
    137,183Investment in subsidiaries
    
    
    (11,755
    )
    
    
    
    
    
    
    
    
    
    
    11,755
    
    
    
    Non-current deferred income tax assets
    
    
    
    
    
    
    5,075
    
    
    
    2,227
    
    
    
    (7,302
    )
    
    
    Other non-current assets
    
    
    
    
    
    
    19,016
    
    
    
    23,688
    
    
    
    
    
    
    
    42,704Total assets
    
    $
    53,382
    
    
    $
    414,963
    
    
    $
    143,111
    
    
    $
    (64,610
    )
    
    $
    546,846Liabilities:Current liabilities:Accounts payable
    
    $
    38
    
    
    $
    64,580
    
    
    $
    
    
    
    $
    
    
    
    $
    64,618Bank overdrafts
    
    
    
    
    
    
    27,232
    
    
    
    
    
    
    
    
    
    
    
    27,232Accrued compensation
    
    
    16
    
    
    
    4,863
    
    
    
    
    
    
    
    
    
    
    
    4,879Deferred income tax liabilities
    
    
    (635
    )
    
    
    
    
    
    
    
    
    
    
    635
    
    
    
    Other current liabilities
    
    
    
    
    
    
    20,637
    
    
    
    1,871
    
    
    
    
    
    
    
    22,508Intercompany payable
    
    
    3,143
    
    
    
    61,644
    
    
    
    4,911
    
    
    
    (69,698
    )
    
    
    Total current liabilities
    
    
    2,562
    
    
    
    178,956
    
    
    
    6,782
    
    
    
    (69,063
    )
    
    
    119,237Non-current liabilities:Long-term debt
    
    
    
    
    
    
    56,000
    
    
    
    285,669
    
    
    
    
    
    
    
    341,669Non-current deferred income tax
liabilities
    
    
    
    
    
    
    2,524
    
    
    
    4,778
    
    
    
    (7,302
    )
    
    
    Other non-current liabilities
    
    
    
    
    
    
    35,120
    
    
    
    
    
    
    
    
    
    
    
    35,120Total liabilities
    
    
    2,562
    
    
    
    272,600
    
    
    
    297,229
    
    
    
    (76,365
    )
    
    
    496,026Shareholders Equity/Parents Investment
    
    
    50,820
    
    
    
    142,363
    
    
    
    (154,118
    )
    
    
    11,755
    
    
    
    50,820Total liabilities and equity
    
    $
    53,382
    
    
    $
    414,963
    
    
    $
    143,111
    
    
    $
    (64,610
    )
    
    $
    546,846
  24




---



##### Table of Contents



BlueLinxBlueLinx
    
    
    CorporationHoldings
    
    
    and
    
    
    LLCInc.
    
    
    Subsidiaries
    
    
    Subsidiaries
    
    
    Eliminations
    
    
    ConsolidatedCash flows from operating activities:Net (loss) income
    
    $
    (32,998
    )
    
    $
    (30,234
    )
    
    $
    3,101
    
    
    $
    27,133
    
    
    $
    (32,998
    )Adjustments to reconcile net (loss) income to cash (used in)
provided by operating activities:Depreciation and amortization
    
    
    
    
    
    
    7,408
    
    
    
    2,881
    
    
    
    
    
    
    
    10,289Amortization of debt issuance costs
    
    
    
    
    
    
    525
    
    
    
    501
    
    
    
    
    
    
    
    1,026Payments from terminating the Georgia-Pacific supply
agreement
    
    
    
    
    
    
    4,706
    
    
    
    
    
    
    
    
    
    
    
    4,706Changes associated with the ineffective interest rate swap
    
    
    
    
    
    
    (3,217
    )
    
    
    
    
    
    
    
    
    
    
    (3,217
    )Write-off of debt issuance costs
    
    
    
    
    
    
    183
    
    
    
    
    
    
    
    
    
    
    
    183Deferred income tax benefit
    
    
    
    
    
    
    (621
    )
    
    
    
    
    
    
    
    
    
    
    (621
    )Share-based compensation expense
    
    
    1,361
    
    
    
    1,519
    
    
    
    
    
    
    
    
    
    
    
    2,880Decrease in restricted cash related to the ineffective
interest rate swap, insurance, and other
    
    
    
    
    
    
    6,009
    
    
    
    
    
    
    
    
    
    
    
    6,009Equity in earnings of subsidiaries
    
    
    27,133
    
    
    
    
    
    
    
    
    
    
    
    (27,133
    )
    
    
    Changes in assets and liabilities:Receivables
    
    
    
    
    
    
    (47,294
    )
    
    
    
    
    
    
    
    
    
    
    (47,294
    )Inventories
    
    
    
    
    
    
    (22,384
    )
    
    
    
    
    
    
    
    
    
    
    (22,384
    )Accounts payable
    
    
    2,794
    
    
    
    13,277
    
    
    
    
    
    
    
    
    
    
    
    16,071Changes in other working capital
    
    
    212
    
    
    
    20,758
    
    
    
    315
    
    
    
    
    
    
    
    21,285Intercompany receivable
    
    
    9,460
    
    
    
    903
    
    
    
    
    
    
    
    (10,363
    )
    
    
    Intercompany payable
    
    
    (903
    )
    
    
    (9,433
    )
    
    
    (27
    )
    
    
    10,363
    
    
    
    Other
    
    
    (3
    )
    
    
    (3,820
    )
    
    
    (26
    )
    
    
    
    
    
    
    (3,849
    )Net cash provided by (used in) operating activities
    
    
    7,056
    
    
    
    (61,715
    )
    
    
    6,745
    
    
    
    
    
    
    
    (47,914
    )Cash flows from investing activities:Investment in subsidiaries
    
    
    (1,767
    )
    
    
    
    
    
    
    
    
    
    
    1,767
    
    
    
    Property, plant and equipment investments
    
    
    
    
    
    
    (2,689
    )
    
    
    
    
    
    
    
    
    
    
    (2,689
    )Proceeds from disposition of assets
    
    
    
    
    
    
    689
    
    
    
    
    
    
    
    
    
    
    
    689Net cash (used in) provided by investing activities
    
    
    (1,767
    )
    
    
    (2,000
    )
    
    
    
    
    
    
    1,767
    
    
    
    (2,000
    )Cash flows from financing activities:Net transactions with Parent
    
    
    
    
    
    
    
    
    
    
    1,767
    
    
    
    (1,767
    )
    
    
    Repurchase of common stock
    
    
    (583
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (583
    )Increase in revolving credit facility
    
    
    
    
    
    
    45,996
    
    
    
    
    
    
    
    
    
    
    
    45,996Payments on capital lease obligations
    
    
    
    
    
    
    (564
    )
    
    
    
    
    
    
    
    
    
    
    (564
    )Increase in bank overdrafts
    
    
    
    
    
    
    3,441
    
    
    
    
    
    
    
    
    
    
    
    3,441Increase in restricted cash related to the mortgage
    
    
    
    
    
    
    
    
    
    
    (8,397
    )
    
    
    
    
    
    
    (8,397
    )Debt financing costs
    
    
    
    
    
    
    (6,473
    )
    
    
    (48
    )
    
    
    
    
    
    
    (6,521
    )Intercompany receivable
    
    
    (4,716
    )
    
    
    
    
    
    
    
    
    
    
    4,716
    
    
    
    Intercompany payable
    
    
    
    
    
    
    4,716
    
    
    
    
    
    
    
    (4,716
    )
    
    
    Other
    
    
    6
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    6Net cash (used in) provided by financing activities
    
    
    (5,293
    )
    
    
    47,116
    
    
    
    (6,678
    )
    
    
    (1,767
    )
    
    
    33,378Decrease (increase) in cash
    
    
    (4
    )
    
    
    (16,599
    )
    
    
    67
    
    
    
    
    
    
    
    (16,536
    )Balance, beginning of period
    
    
    32
    
    
    
    29,129
    
    
    
    296
    
    
    
    
    
    
    
    29,457Balance, end of period
    
    $
    28
    
    
    $
    12,530
    
    
    $
    363
    
    
    $
    
    
    
    $
    12,921
  25




---



##### Table of Contents



BlueLinxHoldings
    
    
    BlueLinx
    
    
    LLCInc.
    
    
    Corporation
    
    
    Subsidiaries
    
    
    Eliminations
    
    
    ConsolidatedCash flows from operating activities:Net (loss) income
    
    $
    (73,488
    )
    
    $
    (78,298
    )
    
    $
    5,597
    
    
    $
    72,701
    
    
    $
    (73,488
    )Adjustments to reconcile net (loss) income to cash (used
in) provided by operations:Depreciation and amortization
    
    
    
    
    
    
    10,189
    
    
    
    2,964
    
    
    
    
    
    
    
    13,153Amortization of debt issue costs
    
    
    
    
    
    
    1,354
    
    
    
    489
    
    
    
    
    
    
    
    1,843Net gain from terminating the Georgia-Pacific supply
agreement
    
    
    
    
    
    
    (17,554
    )
    
    
    
    
    
    
    
    
    
    
    (17,554
    )Payments from terminating the Georgia-Pacific supply
agreement
    
    
    
    
    
    
    9,412
    
    
    
    
    
    
    
    
    
    
    
    9,412Gain from sale properties
    
    
    
    
    
    
    (169
    )
    
    
    (4,237
    )
    
    
    
    
    
    
    (4,406
    )Prepayment penalty associated with sale of facility
    
    
    
    
    
    
    
    
    
    
    616
    
    
    
    
    
    
    
    616Changes associated with ineffective interest rate swap
    
    
    
    
    
    
    7,341
    
    
    
    
    
    
    
    
    
    
    
    7,341Write-off of debt issuance costs
    
    
    
    
    
    
    1,407
    
    
    
    
    
    
    
    
    
    
    
    1,407Vacant property charges, net
    
    
    
    
    
    
    457
    
    
    
    
    
    
    
    
    
    
    
    457Deferred income tax (benefit) provision
    
    
    (13
    )
    
    
    27,389
    
    
    
    (148
    )
    
    
    
    
    
    
    27,228Share-based compensation expense
    
    
    1,344
    
    
    
    826
    
    
    
    
    
    
    
    
    
    
    
    2,170Decrease in restricted cash
    
    
    
    
    
    
    3,021
    
    
    
    
    
    
    
    
    
    
    
    3,021Equity in earnings of subsidiaries
    
    
    72,701
    
    
    
    
    
    
    
    
    
    
    
    (72,701
    )
    
    
    Changes in assets and liabilities:Receivables
    
    
    
    
    
    
    (38,003
    )
    
    
    
    
    
    
    
    
    
    
    (38,003
    )Inventories
    
    
    
    
    
    
    16,359
    
    
    
    
    
    
    
    
    
    
    
    16,359Accounts payable
    
    
    (4
    )
    
    
    30,174
    
    
    
    
    
    
    
    
    
    
    
    30,170Changes in other working capital
    
    
    (1,327
    )
    
    
    8,532
    
    
    
    (235
    )
    
    
    
    
    
    
    6,970Intercompany receivable
    
    
    (1,758
    )
    
    
    (1,768
    )
    
    
    
    
    
    
    3,526
    
    
    
    Intercompany payable
    
    
    1,768
    
    
    
    (699
    )
    
    
    2,457
    
    
    
    (3,526
    )
    
    
    Other
    
    
    1
    
    
    
    (210
    )
    
    
    17
    
    
    
    
    
    
    
    (192
    )Net cash (used in) provided by operating activities
    
    
    (776
    )
    
    
    (20,240
    )
    
    
    7,520
    
    
    
    
    
    
    
    (13,496
    )Cash flows from investing activities:Investment in subsidiaries
    
    
    26,251
    
    
    
    
    
    
    
    
    
    
    
    (26,251
    )
    
    
    Property, plant and equipment investments
    
    
    
    
    
    
    (952
    )
    
    
    
    
    
    
    
    
    
    
    (952
    )Proceeds from sale of assets
    
    
    
    
    
    
    2,019
    
    
    
    6,435
    
    
    
    
    
    
    
    8,454Net cash provided by (used in) investing activities
    
    
    26,251
    
    
    
    1,067
    
    
    
    6,435
    
    
    
    (26,251
    )
    
    
    7,502Cash flows from financing activities:Net transactions with Parent
    
    
    
    
    
    
    (24,998
    )
    
    
    (1,253
    )
    
    
    26,251
    
    
    
    Repurchase of common stock
    
    
    (1,862
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (1,862
    )Net decrease in revolving credit facility
    
    
    
    
    
    
    (100,000
    )
    
    
    
    
    
    
    
    
    
    
    (100,000
    )Payment of principal on mortgage
    
    
    
    
    
    
    
    
    
    
    (3,201
    )
    
    
    
    
    
    
    (3,201
    )Prepayment fees associated with sale of facility
    
    
    
    
    
    
    
    
    
    
    (616
    )
    
    
    
    
    
    
    (616
    )Decrease in bank overdrafts
    
    
    
    
    
    
    (4,699
    )
    
    
    
    
    
    
    
    
    
    
    (4,699
    )Increase in restricted cash related to the mortgage
    
    
    
    
    
    
    
    
    
    
    (8,442
    )
    
    
    
    
    
    
    (8,442
    )Intercompany receivable
    
    
    (23,619
    )
    
    
    
    
    
    
    
    
    
    
    23,619
    
    
    
    Intercompany payable
    
    
    
    
    
    
    23,619
    
    
    
    
    
    
    
    (23,619
    )
    
    
    Other
    
    
    6
    
    
    
    
    
    
    
    (47
    )
    
    
    
    
    
    
    (41
    )Net cash (used in) provided by financing activities
    
    
    (25,475
    )
    
    
    (106,078
    )
    
    
    (13,559
    )
    
    
    26,251
    
    
    
    (118,861
    )(Decrease) increase in cash
    
    
    
    
    
    
    (125,251
    )
    
    
    396
    
    
    
    
    
    
    
    (124,855
    )Balance, beginning of period
    
    
    32
    
    
    
    150,259
    
    
    
    62
    
    
    
    
    
    
    
    150,353Balance, end of period
    
    $
    32
    
    
    $
    25,008
    
    
    $
    458
    
    
    $
    
    
    
    $
    25,498
  26




---



##### Table of Contents



ITEM 2. MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
  
    
    changes in the prices, supply and/or demand for products which we distribute, especially
as a result of conditions in the residential housing market;
    
    inventory levels of new and existing homes for sale;
    
    general economic and business conditions in the United States;
    
    the financial condition and credit worthiness of our customers;
    
    the activities of competitors;
    
    changes in significant operating expenses;
    
    fuel costs;
    
    risk of losses associated with accidents;
    
    exposure to product liability claims;
    
    changes in the availability of capital and interest rates;
    
    immigration patterns and job and household formation;
    
    our ability to identify acquisition opportunities and effectively and cost-efficiently
integrate acquisitions;
    
    adverse weather patterns or conditions;
    
    acts of war or terrorist activities;
    
    variations in the performance of the financial markets, including the credit markets; and
    
    the other factors described herein under Factors Affecting Future Results in our Annual
Report on Form 10-K for the year ended January 2, 2010 as filed with the SEC.
  27




---



##### Table of Contents



Overview
 Background
  Industry Conditions
  Tender Offer
    ,
  28




---



##### Table of Contents



Supply Agreement with G-P
   OSB Litigation Settlement
  Selected Factors Affecting Our Operating Results
   29




---



##### Table of Contents



Fiscal
    
    
    Fiscal
    
    
    Fiscal
    
    
    Fiscal
    
    
    Fiscal
    
    
    FiscalQ3 2010
    
    
    Q3 2009
    
    
    2010 YTD
    
    
    2009 YTD
    
    
    2009
    
    
    2008(Dollars in millions)(Unaudited)Sales by CategoryStructural Products
    
    $
    214
    
    
    $
    202
    
    
    $
    683
    
    
    $
    567
    
    
    $
    738
    
    
    $
    1,422Specialty Products
    
    
    264
    
    
    
    258
    
    
    
    783
    
    
    
    742
    
    
    
    948
    
    
    
    1,412Other(1)
    
    
    (13
    )
    
    
    (11
    )
    
    
    (29
    )
    
    
    (29
    )
    
    
    (40
    )
    
    
    (54
    )Total Sales
    
    $
    465
    
    
    $
    449
    
    
    $
    1,437
    
    
    $
    1,280
    
    
    $
    1,646
    
    
    $
    2,780Sales VariancesUnit Volume $ Change
    
    $
    (6
    )
    
    $
    (235
    )
    
    $
    52
    
    
    $
    (917
    )
    
    $
    (1,036
    )
    
    $
    (1,161
    )Price/Other(1)
    
    
    22
    
    
    
    (43
    )
    
    
    105
    
    
    
    (81
    )
    
    
    (98
    )
    
    
    107Total $ Change
    
    $
    16
    
    
    $
    (278
    )
    
    $
    157
    
    
    $
    (998
    )
    
    $
    (1,134
    )
    
    $
    (1,054
    )Unit Volume % Change
    
    
    (1.2
    )%
    
    
    (31.7
    )%
    
    
    3.9
    %
    
    
    (39.6
    )%
    
    
    (36.6
    )%
    
    
    (29.7
    )%Price/Other(1)
    
    
    4.8
    %
    
    
    (6.5
    )%
    
    
    8.4
    %
    
    
    (4.2
    )%
    
    
    (4.2
    )%
    
    
    2.2
    %Total % Change
    
    
    3.6
    %
    
    
    (38.2
    )%
    
    
    12.3
    %
    
    
    (43.8
    )%
    
    
    (40.8
    )%
    
    
    (27.5
    )%
 
 (1)
    
    Other includes unallocated allowances and discounts.  Fiscal
    
    
    Fiscal
    
    
    Fiscal
    
    
    Fiscal
    
    
    Fiscal
    
    
    FiscalQ3 2010
    
    
    Q3 2009
    
    
    2010 YTD
    
    
    2009 YTD
    
    
    2009
    
    
    2008(Dollars in millions)(Unaudited)Gross Margin $s by
CategoryStructural Products
    
    $
    16
    
    
    $
    21
    
    
    $
    62
    
    
    $
    58
    
    
    $
    73
    
    
    $
    134Specialty Products
    
    
    38
    
    
    
    39
    
    
    
    115
    
    
    
    102
    
    
    
    132
    
    
    
    200Other (1)
    
    
    (4
    )
    
    
    (5
    )
    
    
    (11
    )
    
    
    (12
    )
    
    
    (12
    )
    
    
    (19
    )Total Gross Margin $s
    
    $
    50
    
    
    $
    55
    
    
    $
    166
    
    
    $
    148
    
    
    $
    193
    
    
    $
    315Gross Margin %s by CategoryStructural Products
    
    
    7.5
    %
    
    
    10.4
    %
    
    
    9.1
    %
    
    
    10.2
    %
    
    
    9.9
    %
    
    
    9.4
    %Specialty Products
    
    
    14.4
    %
    
    
    15.1
    %
    
    
    14.7
    %
    
    
    13.7
    %
    
    
    13.9
    %
    
    
    14.2
    %Total Gross Margin %s
    
    
    10.7
    %
    
    
    12.3
    %
    
    
    11.6
    %
    
    
    11.6
    %
    
    
    11.7
    %
    
    
    11.3
    %Unit Volume Change by ProductStructural Products
    
    
    (4.3
    )%
    
    
    (33.7
    )%
    
    
    1.7
    %
    
    
    (43.9
    )%
    
    
    (40.3
    )%
    
    
    (34.6
    )%Specialty Products
    
    
    1.3
    %
    
    
    (29.8
    )%
    
    
    5.7
    %
    
    
    (35.2
    )%
    
    
    (32.8
    )%
    
    
    (24.0
    )%Total Change in Unit Volume %s
    
    
    (1.2
    )%
    
    
    (31.7
    )%
    
    
    3.9
    %
    
    
    (39.6
    )%
    
    
    (36.6
    )%
    
    
    (29.7
    )%
 
 (1)
    
    Other includes unallocated allowances and discounts.  30




---



##### Table of Contents



Fiscal
    
    
    Fiscal
    
    
    Fiscal
    
    
    Fiscal
    
    
    Fiscal
    
    
    FiscalQ3 2010
    
    
    Q3 2009
    
    
    2010 YTD
    
    
    2009 YTD
    
    
    2009
    
    
    2008(Dollars in millions)(Unaudited)Sales by ChannelWarehouse/Reload
    
    $
    371
    
    
    $
    345
    
    
    $
    1,130
    
    
    $
    959
    
    
    $
    1,251
    
    
    $
    2,044Direct
    
    
    107
    
    
    
    115
    
    
    
    336
    
    
    
    350
    
    
    
    435
    
    
    
    790Other(1)
    
    
    (13
    )
    
    
    (11
    )
    
    
    (29
    )
    
    
    (29
    )
    
    
    (40
    )
    
    
    (54
    )Total
    
    $
    465
    
    
    $
    449
    
    
    $
    1,437
    
    
    $
    1,280
    
    
    $
    1,646
    
    
    $
    2,780Gross Margin by ChannelWarehouse/Reload
    
    $
    48
    
    
    $
    53
    
    
    $
    159
    
    
    $
    137
    
    
    $
    177
    
    
    $
    284Direct
    
    
    6
    
    
    
    7
    
    
    
    18
    
    
    
    23
    
    
    
    28
    
    
    
    50Other(1)
    
    
    (4
    )
    
    
    (5
    )
    
    
    (11
    )
    
    
    (12
    )
    
    
    (12
    )
    
    
    (19
    )Total
    
    $
    50
    
    
    $
    55
    
    
    $
    166
    
    
    $
    148
    
    
    $
    193
    
    
    $
    315
 Fiscal
    
    
    Fiscal
    
    
    Fiscal
    
    
    Fiscal
    
    
    Fiscal
    
    
    FiscalQ3 2010
    
    
    Q3 2009
    
    
    2010 YTD
    
    
    2009 YTD
    
    
    2009
    
    
    2008(Dollars in millions)(Unaudited)Gross Margin % by ChannelWarehouse/Reload
    
    
    12.9
    %
    
    
    15.4
    %
    
    
    14.1
    %
    
    
    14.3
    %
    
    
    14.1
    %
    
    
    13.9
    %Direct
    
    
    5.6
    %
    
    
    6.1
    %
    
    
    5.4
    %
    
    
    6.6
    %
    
    
    6.4
    %
    
    
    6.3
    %Total
    
    
    10.7
    %
    
    
    12.3
    %
    
    
    11.6
    %
    
    
    11.6
    %
    
    
    11.7
    %
    
    
    11.3
    %
 
 (1)
    
    Other includes unallocated allowances and adjustments. Fiscal Year
  Results of Operations
 Third Quarter of Fiscal 2010 Compared to Third Quarter of Fiscal 2009
  % of
    
    
    
    
    
    % ofThird Quarter of
    
    
    Net
    
    
    Third Quarter of
    
    
    NetFiscal 2010
    
    
    Sales
    
    
    Fiscal 2009
    
    
    Sales(Unaudited)
    
    
    
    
    
    (Unaudited)(Dollars in thousands)Net sales
    
    $
    464,690
    
    
    
    100.0
    %
    
    $
    449,363
    
    
    
    100.0
    %Gross profit
    
    
    49,942
    
    
    
    10.7
    %
    
    
    55,305
    
    
    
    12.3
    %Selling, general & administrative
    
    
    54,121
    
    
    
    11.6
    %
    
    
    55,024
    
    
    
    12.2
    %Depreciation and amortization
    
    
    3,111
    
    
    
    0.7
    %
    
    
    3,882
    
    
    
    0.9
    %Operating loss
    
    
    (7,290
    )
    
    
    (1.6
    )%
    
    
    (3,601
    )
    
    
    (0.8
    )%Interest expense
    
    
    9,121
    
    
    
    2.0
    %
    
    
    7,987
    
    
    
    1.8
    %Changes associated with the ineffective interest rate swap
    
    
    (1,156
    )
    
    
    (0.2
    )%
    
    
    1,431
    
    
    
    0.3
    %Write-off of debt issuance costs
    
    
    183
    
    
    
    (0.0
    )%
    
    
    
    
    
    
    0.0
    %Other expense, net
    
    
    192
    
    
    
    0.0
    %
    
    
    324
    
    
    
    0.1
    %Loss before (benefit from) provision for income taxes
    
    
    (15,630
    )
    
    
    (3.4
    )%
    
    
    (13,343
    )
    
    
    (3.0
    )%(Benefit from) provision for income taxes
    
    
    (778
    )
    
    
    (0.2
    )%
    
    
    120
    
    
    
    0.0
    %Net loss
    
    $
    (14,852
    )
    
    
    (3.2
    )%
    
    $
    (13,463
    )
    
    
    (3.0
    )%
  31




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##### Table of Contents



Net sales.
 Gross profit.
 Selling, general, and administrative expenses.
 Depreciation and amortization.
 Operating loss.
 Interest expense.
 Changes associated with ineffective interest rate swap
 Write-off of debt issuance costs
 (Benefit from) provision for income taxes.
  32




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##### Table of Contents



Net loss.
  First Nine Months of Fiscal 2010 Compared to First Nine Months of Fiscal 2009
  First Nine Months
    
    
    % of
    
    
    First Nine Months
    
    
    % ofof
    
    
    Net
    
    
    of
    
    
    NetFiscal 2010
    
    
    Sales
    
    
    Fiscal 2009
    
    
    Sales(Unaudited)
    
    
    
    
    
    
    (Unaudited)(Dollars in thousands)Net sales
    
    $
    1,436,521
    
    
    
    100.0
    %
    
    $
    1,280,000
    
    
    
    100.0
    %Gross profit
    
    
    166,339
    
    
    
    11.6
    %
    
    
    147,881
    
    
    
    11.6
    %Selling, general & administrative
    
    
    167,724
    
    
    
    11.7
    %
    
    
    163,744
    
    
    
    12.8
    %Net gain from terminating the Georgia-Pacific supply agreement
    
    
    
    
    
    
    0.0
    %
    
    
    (17,554
    )
    
    
    (1.4
    )%Depreciation and amortization
    
    
    10,289
    
    
    
    0.7
    %
    
    
    13,153
    
    
    
    1.0
    %Operating loss
    
    
    (11,674
    )
    
    
    (0.8
    )%
    
    
    (11,462
    )
    
    
    (0.9
    )%Interest expense
    
    
    24,641
    
    
    
    1.7
    %
    
    
    24,610
    
    
    
    1.9
    %Changes associated with the ineffective interest rate swap
    
    
    (3,217
    )
    
    
    (0.2
    )%
    
    
    7,341
    
    
    
    0.6
    %Write-off of debt issuance costs
    
    
    183
    
    
    
    0.0
    %
    
    
    1,407
    
    
    
    0.1
    %Other expense, net
    
    
    443
    
    
    
    0.0
    %
    
    
    482
    
    
    
    0.0
    %Loss before (benefit from) provision for income taxes
    
    
    (33,724
    )
    
    
    (2.3
    )%
    
    
    (45,302
    )
    
    
    (3.5
    )%(Benefit from) provision for income taxes
    
    
    (726
    )
    
    
    (0.1
    )%
    
    
    28,186
    
    
    
    2.2
    %Net loss
    
    $
    (32,998
    )
    
    
    (2.3
    )%
    
    $
    (73,488
    )
    
    
    (5.7
    )%
 Net sales.
 Gross profit.
 Selling, general, and administrative.
  33




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##### Table of Contents



Net gain from terminating the Georgia-Pacific supply agreement.
 Depreciation and amortization.
 Operating loss.
 Interest expense.
 Changes associated with ineffective interest rate swap.
 Write-off of debt issuance costs
 (Benefit
from) provision for income taxes.
 Net loss
  Seasonality
   34




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##### Table of Contents



Liquidity and Capital Resources
     October 2, 2010
    
    
    January 2, 2010(Dollars in thousands)(Unaudited)Working capital
    
    $
    251,164
    
    
    $
    247,722
 First Nine Months
    
    
    First Nine Monthsof
    
    
    ofFiscal 2010
    
    
    Fiscal 2009(Dollars in thousands)(Unaudited)Cash flows used in operating activities
    
    $
    (47,914
    )
    
    $
    (13,496
    )Cash flows (used in) provided by investing activities
    
    
    (2,000
    )
    
    
    7,502Cash flows provided by (used in) financing activities
    
    
    33,378
    
    
    
    (118,861
    )
 Working Capital
  Operating Activities
   35




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##### Table of Contents



Investing Activities
    Financing Activities
  Debt and Credit Sources
    36




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##### Table of Contents



Contractual Obligations
  Critical Accounting Policies
  
 ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
  
 ITEM 4. CONTROLS AND PROCEDURES
    37




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##### Table of Contents



PART II. OTHER INFORMATION
 
 ITEM 1. LEGAL PROCEEDINGS
  Shareholder Litigation
   
 ITEM 1A. RISK FACTORS
  
 ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS
  
 ITEM 6. EXHIBITS
 ExhibitNumber
    
    Description31.1
    
    
    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.
  38




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##### Table of Contents



SIGNATURES
  BlueLinx
Holdings Inc.
(Registrant)Date: November 5, 2010
    /s/ H. Douglas GoforthH. Douglas GoforthChief Financial Officer and Treasurer  39




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##### Table of Contents



EXHIBIT INDEX
 ExhibitNumber
    
    Description31.1
    
    
    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.
  40