##### 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 September 29, 2007
 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 þ o
 o þ




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##### 



BLUELINX HOLDINGS INC.
 Form 10-Q
 For the Quarterly Period Ended September 29, 2007
 INDEX
 PAGEPART I. FINANCIAL INFORMATIONItem 1. Financial Statements  BlueLinx Holdings Inc.
    
    
    3Condensed Consolidated Statements of Operations
    
    
    4Condensed Consolidated Balance Sheets
    
    
    5Condensed Consolidated Statements of Cash Flows
    
    
    6Notes to Condensed Consolidated Financial Statements
    
    
    7Item 2. Managements Discussion and Analysis of Financial Condition and Results of Operations
    
    
    21Item 3. Quantitative and Qualitative Disclosures About Market Risk
    
    
    31Item 4. Controls and Procedures
    
    
    31PART II. OTHER INFORMATIONItem 1. Legal Proceedings
    
    
    31Item 1A. Risk Factors
    
    
    31Item 6. Exhibits
    
    
    32Signatures
    
    
    33Exhibit Index
    
    
    34EX-31.1 SECTION 302 CERTIFICATION OF THE CEOEX-31.2 SECTION 302 CERTIFICATION OF THE CFOEX-32.1 SECTION 906 CERTIFICATION OF THE CEOEX-32.2 SECTION 906 CERTIFICATION OF THE CFO
  2




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##### Table of Contents



PART I. FINANCIAL INFORMATION
 
 ITEM 1. FINANCIAL STATEMENTS
 BLUELINX HOLDINGS INC.
 
 CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
 (In thousands, except per share data)
 (unaudited)
 Third QuarterPeriod from
    
    
    Period fromJuly 1, 2007
    
    
    July 2, 2006to
    
    
    toSeptember 29, 2007
    
    
    September 30, 2006Net sales
    
    $
    1,015,888
    
    
    $
    1,203,578Cost of sales
    
    
    913,078
    
    
    
    1,082,672Gross profit
    
    
    102,810
    
    
    
    120,906Operating expenses:Selling, general, and administrative
    
    
    84,826
    
    
    
    99,615Depreciation and amortization
    
    
    5,106
    
    
    
    5,217Total operating expenses
    
    
    89,932
    
    
    
    104,832Operating income
    
    
    12,878
    
    
    
    16,074Non-operating expenses:Interest expense
    
    
    11,352
    
    
    
    12,046Other expense (income), net
    
    
    7
    
    
    
    (29
    )Income before provision for income taxes
    
    
    1,519
    
    
    
    4,057Provision for income taxes
    
    
    629
    
    
    
    1,765Net income
    
    $
    890
    
    
    $
    2,292Basic weighted average number of common shares outstanding
    
    
    30,853
    
    
    
    30,662Basic net income per share applicable to common stock
    
    $
    0.03
    
    
    $
    0.07Diluted weighted average number of common shares outstanding
    
    
    30,951
    
    
    
    30,782Diluted net income per share applicable to common stock
    
    $
    0.03
    
    
    $
    0.07Dividends declared per share of common stock
    
    $
    0.125
    
    
    $
    0.125
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BLUELINX HOLDINGS INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except per share data)
(unaudited)
 Nine Months EndedPeriod from
    
    
    Period fromDecember 31, 2006
    
    
    January 1, 2006to
    
    
    toSeptember 29, 2007
    
    
    September 30, 2006Net sales
    
    $
    3,054,992
    
    
    $
    3,959,134Cost of sales
    
    
    2,729,189
    
    
    
    3,571,833Gross profit
    
    
    325,803
    
    
    
    387,301Operating expenses:Selling, general, and administrative
    
    
    266,640
    
    
    
    295,004Depreciation and amortization
    
    
    15,840
    
    
    
    15,323Total operating expenses
    
    
    282,480
    
    
    
    310,327Operating income
    
    
    43,323
    
    
    
    76,974Non-operating expenses:Interest expense
    
    
    33,756
    
    
    
    35,505Charges associated with mortgage refinancing
    
    
    
    
    
    
    4,864Other income, net
    
    
    (601
    )
    
    
    (17
    )Income before provision for income taxes
    
    
    10,168
    
    
    
    36,622Provision for income taxes
    
    
    4,033
    
    
    
    14,925Net income
    
    $
    6,135
    
    
    $
    21,697Basic weighted average number of common shares outstanding
    
    
    30,834
    
    
    
    30,576Basic net income per share applicable to common stock
    
    $
    0.20
    
    
    $
    0.71Diluted weighted average number of common shares outstanding
    
    
    30,947
    
    
    
    30,762Diluted net income per share applicable to common stock
    
    $
    0.20
    
    
    $
    0.71Dividends declared per share of common stock
    
    $
    0.375
    
    
    $
    0.375
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BLUELINX HOLDINGS INC.
 
 CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands, except per share data)
 September 29, 2007
    
    
    December 30, 2006(unaudited)Assets:Current assets:Cash
    
    $
    25,000
    
    
    $
    27,042Receivables, net
    
    
    371,222
    
    
    
    307,543Inventories, net
    
    
    424,522
    
    
    
    410,686Deferred income taxes
    
    
    9,429
    
    
    
    9,024Other current assets
    
    
    42,333
    
    
    
    44,948Total current assets
    
    
    872,506
    
    
    
    799,243Property, plant, and equipment:Land and land improvements
    
    
    57,141
    
    
    
    56,985Buildings
    
    
    97,156
    
    
    
    95,814Machinery and equipment
    
    
    66,462
    
    
    
    61,955Construction in progress
    
    
    5,485
    
    
    
    2,025Property, plant, and equipment, at cost
    
    
    226,244
    
    
    
    216,779Accumulated depreciation
    
    
    (50,470
    )
    
    
    (38,530
    )Property, plant, and equipment, net
    
    
    175,774
    
    
    
    178,249Other non-current assets
    
    
    24,982
    
    
    
    26,870Total assets
    
    $
    1,073,262
    
    
    $
    1,004,362Liabilities:Current liabilities:Accounts payable
    
    $
    224,787
    
    
    $
    195,815Bank overdrafts
    
    
    37,346
    
    
    
    50,241Accrued compensation
    
    
    10,905
    
    
    
    8,574Current maturities of long-term debt
    
    
    100,147
    
    
    
    9,743Other current liabilities
    
    
    16,113
    
    
    
    14,633Total current liabilities
    
    
    389,298
    
    
    
    279,006Non-current liabilities:Long-term debt
    
    
    480,853
    
    
    
    522,719Deferred income taxes
    
    
    516
    
    
    
    1,101Other long-term liabilities
    
    
    14,468
    
    
    
    12,137Total liabilities
    
    
    885,135
    
    
    
    814,963Shareholders Equity:Common Stock, $0.01 par value,
100,000,000 shares authorized;
31,244,577 and 30,909,630 shares
issued and outstanding at September
29, 2007 and December 30, 2006,
respectively
    
    
    312
    
    
    
    309Additional paid-in-capital
    
    
    141,394
    
    
    
    138,066Accumulated other comprehensive income
    
    
    1,363
    
    
    
    412Retained earnings
    
    
    45,058
    
    
    
    50,612Total shareholders equity
    
    
    188,127
    
    
    
    189,399Total liabilities and shareholders equity
    
    $
    1,073,262
    
    
    $
    1,004,362
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BLUELINX HOLDINGS INC.
 
 CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
 (In thousands)
 (unaudited)
 Nine Months EndedPeriod
    
    
    Periodfrom December 31,
    
    
    from January 1,2006 to
    
    
    2006 toSeptember 29, 2007
    
    
    September 30, 2006Cash flows from operating activities:Net income
    
    $
    6,135
    
    
    $
    21,697Adjustments to reconcile net income to cash used in operations:Depreciation and amortization
    
    
    15,840
    
    
    
    15,323Amortization of debt issue costs
    
    
    1,823
    
    
    
    2,018Charges associated with mortgage refinancing
    
    
    
    
    
    
    4,864Deferred income tax benefit
    
    
    (1,135
    )
    
    
    (1,876
    )Share-based compensation expense
    
    
    3,061
    
    
    
    2,209Gain from insurance settlement
    
    
    (1,698
    )
    
    
    Excess tax benefits from share-based compensation arrangements
    
    
    (41
    )
    
    
    (882
    )Changes in assets and liabilities:Receivables
    
    
    (63,679
    )
    
    
    (33,396
    )Inventories
    
    
    (13,836
    )
    
    
    5,961Accounts payable
    
    
    28,972
    
    
    
    (74,959
    )Changes in other working capital
    
    
    5,238
    
    
    
    (2,486
    )Other
    
    
    415
    
    
    
    (2,237
    )Net cash used in operating activities
    
    
    (18,905
    )
    
    
    (63,764
    )Cash flows from investing activities:Acquisitions, net of cash acquired
    
    
    
    
    
    
    (9,353
    )Property, plant and equipment investments
    
    
    (11,943
    )
    
    
    (7,267
    )Proceeds from disposition of assets
    
    
    4,335
    
    
    
    465Net cash used in investing activities
    
    
    (7,608
    )
    
    
    (16,155
    )Cash flows from financing activities:Proceeds from stock options exercised
    
    
    442
    
    
    
    1,744Excess tax benefits from share-based compensation arrangements
    
    
    41
    
    
    
    882Net increase (decrease) in revolving credit facility
    
    
    48,538
    
    
    
    (38,342
    )Proceeds from new mortgage
    
    
    
    
    
    
    295,000Debt financing costs
    
    
    
    
    
    
    (6,668
    )Retirement of old mortgage
    
    
    
    
    
    
    (165,000
    )Prepayment fees with old mortgage
    
    
    
    
    
    
    (2,475
    )Increase (decrease) in bank overdrafts
    
    
    (12,895
    )
    
    
    6,177Common stock dividends paid
    
    
    (11,689
    )
    
    
    (11,537
    )Other
    
    
    34
    
    
    
    Net cash provided by financing activities
    
    
    24,471
    
    
    
    79,781Decrease in cash
    
    
    (2,042
    )
    
    
    (138
    )Balance, beginning of period
    
    
    27,042
    
    
    
    24,320Balance, end of period
    
    $
    25,000
    
    
    $
    24,182
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BLUELINX HOLDINGS INC.
 
 NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
 1. Basis of Presentation and Background
 Basis of Presentation
    2. Summary of Significant Accounting Policies
 Earnings per Common Share
   Third Quarter
    
    Nine Months EndedPeriod fromPeriod from
    
    Period from
    
    December 31, 2006
    
    Period fromJuly 1, 2007 to
    
    July 2, 2006 to
    
    to September 29,
    
    January 1, 2006 toSeptember 29, 2007
    
    September 30, 2006
    
    2007
    
    September 30, 2006Basic weighted average shares outstanding
    
    
    30,852,572
    
    
    
    30,662,219
    
    
    
    30,833,801
    
    
    
    30,576,248Dilutive effect of stock-based awards
    
    
    98,829
    
    
    
    120,054
    
    
    
    113,045
    
    
    
    185,351Diluted weighted average shares outstanding
    
    
    30,951,401
    
    
    
    30,782,273
    
    
    
    30,946,846
    
    
    
    30,761,599
 Common Stock Dividends
  7




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Stock-Based Compensation
     Share-Based Payment Accounting for Stock-Based Compensation
    8




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Period from December 31, 2006 to September 29, 2007Time-Based
    
    Performance-Based
    
    Performance-BasedOptions*
    
    Options**
    
    Options***Risk free interest rate
    
    
    4.78
    %
    
    
    4.81
    %
    
    
    5.09
    %Expected dividend yield
    
    
    4.46
    %
    
    
    4.52
    %
    
    
    4.52
    %Expected life
    
    7
    years
    
    5
    years
    
    1
    yearExpected volatility
    
    
    45
    %
    
    
    45
    %
    
    
    45
    %Weighted average fair value
    
    $
    3.77
    
    
    $
    2.83
    
    
    $
    6.97
 
 *
    
    Exercise price equaled the market price at date of grant.**
    
    Exercise price exceeded the market price at date of grant.***
    
    Exercise price was less than the market price at date of grant. All options granted during the first nine months of fiscal 2007 occurred in the first
quarter.
  Period fromJuly 2, 2006 toSeptember 30,2006Time-BasedOptions*Risk free interest rate
    
    
    5.05
    %Expected dividend yield
    
    
    4.20
    %Expected life
    
    7
    yearsExpected volatility
    
    
    50
    %Weighted average fair value
    
    $
    4.14
 
 *
    
    Exercise price equaled the market price at date of grant.  9




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Period from January 1, 2006 to September 30, 2006Time-Based
    
    Time-Based
    
    Performance-BasedOptions*
    
    Options**
    
    Options***Risk free interest rate
    
    
    4.36
    %
    
    
    4.72
    %
    
    
    4.60
    %Expected dividend yield
    
    
    4.43
    %
    
    
    3.85
    %
    
    
    3.19
    %Expected life
    
    7
    years

    
    7
    years
    
    1
    yearExpected volatility
    
    
    50
    %
    
    
    50
    %
    
    
    50
    %Weighted average fair value
    
    $
    3.69
    
    
    $
    5.11
    
    
    $
    11.47
 
 *
    
    Exercise price exceeded market price at date of grant.**
    
    Exercise price equaled market price at date of grant.***
    
    Exercise price is less than the market price at date of grant.      WeightedAverageExerciseOptions
    
    PriceOptions outstanding at December 30, 2006
    
    
    1,717,531
    
    
    $
    11.47Options granted
    
    
    160,375
    
    
    
    8.58Options exercised
    
    
    (117,213
    )
    
    
    3.75Options forfeited
    
    
    (17,207
    )
    
    
    3.75Options outstanding at September 29, 2007
    
    
    1,743,486
    
    
    
    11.80Options exercisable at September 29, 2007
    
    
    438,070
    
    
    $
    10.18
 Outstanding
    
    ExercisableWeighted
    
    
    
    
    
    
    
    
    
    WeightedAverage
    
    Remaining
    
    
    
    
    
    AverageNumber of
    
    Exercise
    
    Contractual Life
    
    Number of
    
    ExercisePrice Range
    
    Options
    
    Price
    
    (in Years)
    
    Options
    
    Price$3.75
    
    
    248,469
    
    
    $
    3.75
    
    
    
    0.68
    
    
    
    138,369
    
    
    $
    3.75$10.29  $15.10
    
    
    1,495,017
    
    
    
    13.13
    
    
    
    8.38
    
    
    
    299,701
    
    
    
    13.161,743,486
    
    
    
    
    
    
    
    
    
    
    
    438,070
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Performance Shares
    
    Restricted Stock
    
    Restricted Stock UnitsWeighted
    
    
    
    
    
    Weighted
    
    
    
    
    
    WeightedNumber of
    
    Average Fair
    
    Number of
    
    Average Fair
    
    Number of
    
    Average FairAwards
    
    Value
    
    Awards
    
    Value
    
    Awards
    
    ValueOutstanding at December 30, 2006
    
    
    
    
    
    $
    
    
    
    
    147,412
    
    
    $
    13.99
    
    
    
    119,250
    
    
    $
    13.95Granted
    
    
    245,025
    
    
    
    10.46
    
    
    
    218,063
    
    
    
    10.50
    
    
    
    97,625
    
    
    
    11.02Vested
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Forfeited
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (17,350
    )
    
    
    13.34Outstanding at September 29, 2007
    
    
    245,025
    
    
    $
    10.46
    
    
    
    365,475
    
    
    $
    11.92
    
    
    
    199,525
    
    
    $
    12.55
   3. Income Taxes
  4. Comprehensive Income
  Third QuarterPeriod from
    
    
    Period fromJuly 1, 2007
    
    
    July 2, 2006to
    
    
    toSeptember 29, 2007
    
    
    September 30, 2006Net income
    
    $
    890
    
    
    $
    2,292Other comprehensive income:Foreign currency translation, net of taxes
    
    
    866
    
    
    
    (6
    )Unrealized loss from cash flow hedge, net of taxes
    
    
    (2,040
    )
    
    
    (2,112
    )Comprehensive income (loss)
    
    $
    (284
    )
    
    $
    174
 Nine Months EndedPeriod from
    
    
    Period fromDecember 31, 2006
    
    
    January 1, 2006to
    
    
    toSeptember 29, 2007
    
    
    September 30, 2006Net income
    
    $
    6,135
    
    
    $
    21,697Other comprehensive income:Foreign currency translation, net of taxes
    
    
    1,779
    
    
    
    331Unrealized loss from cash flow hedge, net of taxes
    
    
    (756
    )
    
    
    (1,715
    )Unrealized loss from adoption of FIN 48, net of taxes
    
    
    (72
    )
    
    
    Comprehensive income
    
    $
    7,086
    
    
    $
    20,313
 11




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5. Employee Benefits
 Defined Benefit Pension Plans
   Third QuarterPeriod from July 1,
    
    
    Period from July 2, 20062007 to September 29, 2007
    
    
    to September 30, 2006(In thousands)Service cost
    
    $
    626
    
    
    $
    672Interest cost on projected benefit obligation
    
    
    1,054
    
    
    
    1,011Expected return on plan assets
    
    
    (1,356
    )
    
    
    (1,300
    )Amortization of unrecognized prior service cost
    
    
    1
    
    
    
    1Net periodic pension cost
    
    $
    325
    
    
    $
    384Nine Months EndedPeriod from December 31,
    
    
    Period from January 1, 20062006 to September 29, 2007
    
    
    to September 30, 2006(In thousands)Service cost
    
    $
    1,879
    
    
    $
    2,016Interest cost on projected benefit obligation
    
    
    3,162
    
    
    
    3,033Expected return on plan assets
    
    
    (4,068
    )
    
    
    (3,900
    )Amortization of unrecognized prior service cost
    
    
    2
    
    
    
    3Net periodic pension cost
    
    $
    975
    
    
    $
    1,152
 6. Revolving Credit Facility
     12




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7. Mortgage
    2011
    
    $
    1,5112012
    
    
    3,1722013
    
    
    3,4372014
    
    
    3,6652015
    
    
    3,908Thereafter
    
    $
    279,307
 8. Related Party Transactions
  9. Commitments and Contingencies
 Environmental and Legal Matters
  Collective Bargaining Agreements
  13




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Preference Claim
  Breach of Contract Claim
  Hurricane Katrina
   11. Subsequent Events
  12. Unaudited Supplemental Condensed Consolidating Financial Statements
 ,
 14




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##### Table of Contents



BlueLinxHoldings
    
    
    BlueLinx
    
    
    LLCInc.
    
    
    Corporation
    
    
    Subsidiaries
    
    
    Eliminations
    
    
    ConsolidatedNet sales
    
    $
    
    
    
    $
    1,015,888
    
    
    $
    7,518
    
    
    $
    (7,518
    )
    
    $
    1,015,888Cost of sales
    
    
    
    
    
    
    913,078
    
    
    
    
    
    
    
    
    
    
    
    913,078Gross profit
    
    
    
    
    
    
    102,810
    
    
    
    7,518
    
    
    
    (7,518
    )
    
    
    102,810Operating expenses:Selling, general and administrative
    
    
    241
    
    
    
    91,983
    
    
    
    120
    
    
    
    (7,518
    )
    
    
    84,826Depreciation and amortization
    
    
    
    
    
    
    4,044
    
    
    
    1,062
    
    
    
    
    
    
    
    5,106Total operating expenses
    
    
    241
    
    
    
    96,027
    
    
    
    1,182
    
    
    
    (7,518
    )
    
    
    89,932Operating income (loss)
    
    
    (241
    )
    
    
    6,783
    
    
    
    6,336
    
    
    
    
    
    
    
    12,878Non-operating expenses:Interest expense
    
    
    
    
    
    
    6,460
    
    
    
    4,892
    
    
    
    
    
    
    
    11,352Other expense (income), net
    
    
    
    
    
    
    25
    
    
    
    (18
    )
    
    
    
    
    
    
    7Income before provision for (benefit from) income taxes
    
    
    (241
    )
    
    
    298
    
    
    
    1,462
    
    
    
    
    
    
    
    1,519Provision for (benefit from) income taxes
    
    
    (94
    )
    
    
    153
    
    
    
    570
    
    
    
    
    
    
    
    629Equity in income (loss) of subsidiaries
    
    
    1,037
    
    
    
    
    
    
    
    
    
    
    
    (1,037
    )
    
    
    Net income (loss)
    
    $
    890
    
    
    $
    145
    
    
    $
    892
    
    
    $
    (1,037
    )
    
    $
    890
  BlueLinxHoldings
    
    
    BlueLinx
    
    
    LLCInc.
    
    
    Corporation
    
    
    Subsidiaries
    
    
    Eliminations
    
    
    ConsolidatedNet sales
    
    $
    
    
    
    $
    1,203,578
    
    
    $
    7,598
    
    
    $
    (7,598
    )
    
    $
    1,203,578Cost of sales
    
    
    
    
    
    
    1,082,672
    
    
    
    
    
    
    
    
    
    
    
    1,082,672Gross profit
    
    
    
    
    
    
    120,906
    
    
    
    7,598
    
    
    
    (7,598
    )
    
    
    120,906Operating expenses:Selling, general and administrative
    
    
    332
    
    
    
    106,679
    
    
    
    202
    
    
    
    (7,598
    )
    
    
    99,615Depreciation and amortization
    
    
    
    
    
    
    4,159
    
    
    
    1,058
    
    
    
    
    
    
    
    5,217Total operating expenses
    
    
    332
    
    
    
    110,838
    
    
    
    1,260
    
    
    
    (7,598
    )
    
    
    104,832Operating income (loss)
    
    
    (332
    )
    
    
    10,068
    
    
    
    6,338
    
    
    
    
    
    
    
    16,074Non-operating expenses:Interest expense
    
    
    
    
    
    
    7,064
    
    
    
    4,982
    
    
    
    
    
    
    
    12,046Other expense (income), net
    
    
    
    
    
    
    (12
    )
    
    
    (17
    )
    
    
    
    
    
    
    (29
    )Income before provision for (benefit from) income taxes
    
    
    (332
    )
    
    
    3,016
    
    
    
    1,373
    
    
    
    
    
    
    
    4,057Provision for (benefit from) income taxes
    
    
    (129
    )
    
    
    1,359
    
    
    
    535
    
    
    
    
    
    
    
    1,765Equity in income (loss) of subsidiaries
    
    
    2,495
    
    
    
    
    
    
    
    
    
    
    
    (2,495
    )
    
    
    Net income (loss)
    
    $
    2,292
    
    
    $
    1,657
    
    
    $
    838
    
    
    $
    (2,495
    )
    
    $
    2,292
 15




---



##### Table of Contents



BlueLinxHoldings
    
    
    BlueLinx
    
    
    LLCInc.
    
    
    Corporation
    
    
    Subsidiaries
    
    
    Eliminations
    
    
    ConsolidatedNet sales
    
    $
    
    
    
    $
    3,054,992
    
    
    $
    22,554
    
    
    $
    (22,554
    )
    
    $
    3,054,992Cost of sales
    
    
    
    
    
    
    2,729,189
    
    
    
    
    
    
    
    
    
    
    
    2,729,189Gross profit
    
    
    
    
    
    
    325,803
    
    
    
    22,554
    
    
    
    (22,554
    )
    
    
    325,803Operating expenses:Selling, general and administrative
    
    
    957
    
    
    
    287,874
    
    
    
    363
    
    
    
    (22,554
    )
    
    
    266,640Depreciation and amortization
    
    
    
    
    
    
    12,662
    
    
    
    3,178
    
    
    
    
    
    
    
    15,840Total operating expenses
    
    
    957
    
    
    
    300,536
    
    
    
    3,541
    
    
    
    (22,554
    )
    
    
    282,480Operating income (loss)
    
    
    (957
    )
    
    
    25,267
    
    
    
    19,013
    
    
    
    
    
    
    
    43,323Non-operating expenses:Interest expense
    
    
    
    
    
    
    19,080
    
    
    
    14,676
    
    
    
    
    
    
    
    33,756Other expense (income), net
    
    
    
    
    
    
    (342
    )
    
    
    (259
    )
    
    
    
    
    
    
    (601
    )Income before provision for (benefit from) income taxes
    
    
    (957
    )
    
    
    6,529
    
    
    
    4,596
    
    
    
    
    
    
    
    10,168Provision for (benefit from) income taxes
    
    
    (373
    )
    
    
    2,614
    
    
    
    1,792
    
    
    
    
    
    
    
    4,033Equity in income (loss) of subsidiaries
    
    
    6,719
    
    
    
    
    
    
    
    
    
    
    
    (6,719
    )
    
    
    Net income (loss)
    
    $
    6,135
    
    
    $
    3,915
    
    
    $
    2,804
    
    
    $
    (6,719
    )
    
    $
    6,135
  BlueLinxHoldings
    
    
    BlueLinx
    
    
    LLCInc.
    
    
    Corporation
    
    
    Subsidiaries
    
    
    Eliminations
    
    
    ConsolidatedNet sales
    
    $
    
    
    
    $
    3,959,134
    
    
    $
    18,053
    
    
    $
    (18,053
    )
    
    $
    3,959,134Cost of sales
    
    
    
    
    
    
    3,571,833
    
    
    
    
    
    
    
    
    
    
    
    3,571,833Gross profit
    
    
    
    
    
    
    387,301
    
    
    
    18,053
    
    
    
    (18,053
    )
    
    
    387,301Operating expenses:Selling, general and administrative
    
    
    1,139
    
    
    
    311,197
    
    
    
    721
    
    
    
    (18,053
    )
    
    
    295,004Depreciation and amortization
    
    
    
    
    
    
    12,149
    
    
    
    3,174
    
    
    
    
    
    
    
    15,323Total operating expenses
    
    
    1,139
    
    
    
    323,346
    
    
    
    3,895
    
    
    
    (18,053
    )
    
    
    310,327Operating income (loss)
    
    
    (1,139
    )
    
    
    63,955
    
    
    
    14,158
    
    
    
    
    
    
    
    76,974Non-operating expenses:Interest expense
    
    
    
    
    
    
    23,730
    
    
    
    11,775
    
    
    
    
    
    
    
    35,505Charges associated with new mortgage
    
    
    
    
    
    
    
    
    
    
    4,864
    
    
    
    
    
    
    
    4,864Other expense (income), net
    
    
    
    
    
    
    68
    
    
    
    (85
    )
    
    
    
    
    
    
    (17
    )Income before provision for (benefit from) income taxes
    
    
    (1,139
    )
    
    
    40,157
    
    
    
    (2,396
    )
    
    
    
    
    
    
    36,622Provision for (benefit from) income taxes
    
    
    (444
    )
    
    
    16,303
    
    
    
    (934
    )
    
    
    
    
    
    
    14,925Equity in income (loss) of subsidiaries
    
    
    22,392
    
    
    
    
    
    
    
    
    
    
    
    (22,392
    )
    
    
    Net income (loss)
    
    $
    21,697
    
    
    $
    23,854
    
    
    $
    (1,462
    )
    
    $
    (22,392
    )
    
    $
    21,697
 16




---



##### Table of Contents



BlueLinxBlueLinx
    
    
    CorporationHoldings
    
    
    and
    
    
    LLCInc.
    
    
    Subsidiaries
    
    
    Subsidiaries
    
    
    Eliminations
    
    
    ConsolidatedAssets:Current assets:Cash
    
    $
    3
    
    
    $
    24,942
    
    
    $
    55
    
    
    $
    
    
    
    $
    25,000Receivables
    
    
    
    
    
    
    371,222
    
    
    
    
    
    
    
    
    
    
    
    371,222Inventories
    
    
    
    
    
    
    424,522
    
    
    
    
    
    
    
    
    
    
    
    424,522Deferred income taxes
    
    
    
    
    
    
    9,450
    
    
    
    
    
    
    
    (21
    )
    
    
    9,429Other current assets
    
    
    399
    
    
    
    44,440
    
    
    
    
    
    
    
    (2,506
    )
    
    
    42,333Intercompany receivable
    
    
    3,004
    
    
    
    
    
    
    
    
    
    
    
    (3,004
    )
    
    
    Total current assets
    
    
    3,406
    
    
    
    874,576
    
    
    
    55
    
    
    
    (5,531
    )
    
    
    872,506Property, plant and equipment:Land and land improvements
    
    
    
    
    
    
    2,845
    
    
    
    54,296
    
    
    
    
    
    
    
    57,141Buildings
    
    
    
    
    
    
    7,395
    
    
    
    89,761
    
    
    
    
    
    
    
    97,156Machinery and equipment
    
    
    
    
    
    
    66,462
    
    
    
    
    
    
    
    
    
    
    
    66,462Construction in progress
    
    
    
    
    
    
    5,485
    
    
    
    
    
    
    
    
    
    
    
    5,485Property, plant and equipment, at cost
    
    
    
    
    
    
    82,187
    
    
    
    144,057
    
    
    
    
    
    
    
    226,244Accumulated depreciation
    
    
    
    
    
    
    (36,062
    )
    
    
    (14,408
    )
    
    
    
    
    
    
    (50,470
    )Property, plant and equipment, net
    
    
    
    
    
    
    46,125
    
    
    
    129,649
    
    
    
    
    
    
    
    175,774Investment in subsidiaries
    
    
    184,762
    
    
    
    
    
    
    
    
    
    
    
    (184,762
    )
    
    
    Deferred income taxes
    
    
    
    
    
    
    1,390
    
    
    
    
    
    
    
    (1,390
    )
    
    
    Other non-current assets
    
    
    
    
    
    
    19,533
    
    
    
    5,449
    
    
    
    
    
    
    
    24,982Total assets
    
    $
    188,168
    
    
    $
    941,624
    
    
    $
    135,153
    
    
    $
    (191,683
    )
    
    $
    1,073,262Liabilities:Current liabilities:Accounts payable
    
    $
    20
    
    
    $
    224,767
    
    
    $
    
    
    
    $
    
    
    
    $
    224,787Bank overdrafts
    
    
    
    
    
    
    37,346
    
    
    
    
    
    
    
    
    
    
    
    37,346Accrued compensation
    
    
    
    
    
    
    10,905
    
    
    
    
    
    
    
    
    
    
    
    10,905Current maturities of long-term debt
    
    
    
    
    
    
    100,147
    
    
    
    
    
    
    
    
    
    
    
    100,147Deferred income taxes
    
    
    21
    
    
    
    
    
    
    
    
    
    
    
    (21
    )
    
    
    Other current liabilities
    
    
    
    
    
    
    14,265
    
    
    
    1,848
    
    
    
    
    
    
    
    16,113Intercompany payable
    
    
    
    
    
    
    2,631
    
    
    
    2,879
    
    
    
    (5,510
    )
    
    
    Total current liabilities
    
    
    41
    
    
    
    390,061
    
    
    
    4,727
    
    
    
    (5,531
    )
    
    
    389,298Non-current liabilities:Long-term debt
    
    
    
    
    
    
    185,853
    
    
    
    295,000
    
    
    
    
    
    
    
    480,853Deferred income taxes
    
    
    
    
    
    
    
    
    
    
    1,906
    
    
    
    (1,390
    )
    
    
    516Other long-term liabilities
    
    
    
    
    
    
    14,468
    
    
    
    
    
    
    
    
    
    
    
    14,468Total liabilities
    
    
    41
    
    
    
    590,382
    
    
    
    301,633
    
    
    
    (6,921
    )
    
    
    885,135Shareholders Equity/Parents Investment
    
    
    188,127
    
    
    
    351,242
    
    
    
    (166,480
    )
    
    
    (184,762
    )
    
    
    188,127Total liabilities and equity
    
    $
    188,168
    
    
    $
    941,624
    
    
    $
    135,153
    
    
    $
    (191,683
    )
    
    $
    1,073,262
 17




---



##### Table of Contents



BlueLinxBlueLinx
    
    
    Corporation
    
    
    LLCHoldings Inc.
    
    
    and Subsidiaries
    
    
    Subsidiaries
    
    
    Eliminations
    
    
    ConsolidatedAssets:Current assets:Cash
    
    $
    2
    
    
    $
    27,017
    
    
    $
    23
    
    
    $
    
    
    
    $
    27,042Receivables
    
    
    
    
    
    
    307,543
    
    
    
    
    
    
    
    
    
    
    
    307,543Inventories
    
    
    
    
    
    
    410,686
    
    
    
    
    
    
    
    
    
    
    
    410,686Deferred income taxes
    
    
    
    
    
    
    9,175
    
    
    
    
    
    
    
    (151
    )
    
    
    9,024Other current assets
    
    
    497
    
    
    
    46,957
    
    
    
    
    
    
    
    (2,506
    )
    
    
    44,948Intercompany receivable
    
    
    764
    
    
    
    
    
    
    
    
    
    
    
    (764
    )
    
    
    Total current assets
    
    
    1,263
    
    
    
    801,378
    
    
    
    23
    
    
    
    (3,421
    )
    
    
    799,243Property, plant and equipment:Land and land improvements
    
    
    
    
    
    
    2,760
    
    
    
    54,225
    
    
    
    
    
    
    
    56,985Buildings
    
    
    
    
    
    
    6,467
    
    
    
    89,347
    
    
    
    
    
    
    
    95,814Machinery and equipment
    
    
    
    
    
    
    61,955
    
    
    
    
    
    
    
    
    
    
    
    61,955Construction in progress
    
    
    
    
    
    
    2,025
    
    
    
    
    
    
    
    
    
    
    
    2,025Property, plant and equipment, at cost
    
    
    
    
    
    
    73,207
    
    
    
    143,572
    
    
    
    
    
    
    
    216,779Accumulated depreciation
    
    
    
    
    
    
    (27,300
    )
    
    
    (11,230
    )
    
    
    
    
    
    
    (38,530
    )Property, plant and equipment, net
    
    
    
    
    
    
    45,907
    
    
    
    132,342
    
    
    
    
    
    
    
    178,249Investment in subsidiaries
    
    
    188,307
    
    
    
    
    
    
    
    
    
    
    
    (188,307
    )
    
    
    Deferred income taxes
    
    
    
    
    
    
    1,430
    
    
    
    
    
    
    
    (1,430
    )
    
    
    Other non-current assets
    
    
    
    
    
    
    20,916
    
    
    
    5,954
    
    
    
    
    
    
    
    26,870Total assets
    
    $
    189,570
    
    
    $
    869,631
    
    
    $
    138,319
    
    
    $
    (193,158
    )
    
    $
    1,004,362Liabilities:Current liabilities:Accounts payable
    
    $
    20
    
    
    $
    195,795
    
    
    $
    
    
    
    $
    
    
    
    $
    195,815Bank overdrafts
    
    
    
    
    
    
    50,241
    
    
    
    
    
    
    
    
    
    
    
    50,241Accrued compensation
    
    
    
    
    
    
    8,574
    
    
    
    
    
    
    
    
    
    
    
    8,574Current maturities of long-term debt
    
    
    
    
    
    
    9,743
    
    
    
    
    
    
    
    
    
    
    
    9,743Deferred income taxes
    
    
    151
    
    
    
    
    
    
    
    
    
    
    
    (151
    )
    
    
    Other current liabilities
    
    
    
    
    
    
    14,848
    
    
    
    (215
    )
    
    
    
    
    
    
    14,633Intercompany payable
    
    
    
    
    
    
    160
    
    
    
    3,110
    
    
    
    (3,270
    )
    
    
    Total current liabilities
    
    
    171
    
    
    
    279,361
    
    
    
    2,895
    
    
    
    (3,421
    )
    
    
    279,006Non-current liabilities:Long-term debt
    
    
    
    
    
    
    227,719
    
    
    
    295,000
    
    
    
    
    
    
    
    522,719Deferred income taxes
    
    
    
    
    
    
    
    
    
    
    2,531
    
    
    
    (1,430
    )
    
    
    1,101Other long-term liabilities
    
    
    
    
    
    
    12,137
    
    
    
    
    
    
    
    
    
    
    
    12,137Total liabilities
    
    
    171
    
    
    
    519,217
    
    
    
    300,426
    
    
    
    (4,851
    )
    
    
    814,963Shareholders Equity/Parents Investment
    
    
    189,399
    
    
    
    350,414
    
    
    
    (162,107
    )
    
    
    (188,307
    )
    
    
    189,399Total liabilities and equity
    
    $
    189,570
    
    
    $
    869,631
    
    
    $
    138,319
    
    
    $
    (193,158
    )
    
    $
    1,004,362
 18




---



##### Table of Contents



BlueLinxHoldings
    
    
    BlueLinx
    
    
    LLCInc.
    
    
    Corporation
    
    
    Subsidiaries
    
    
    Eliminations
    
    
    ConsolidatedCash flows from operating activities:Net income
    
    $
    6,135
    
    
    $
    3,915
    
    
    $
    2,804
    
    
    $
    (6,719
    )
    
    $
    6,135Adjustments to reconcile net income to cash
provided by (used in) operations:Depreciation and amortization
    
    
    
    
    
    
    12,662
    
    
    
    3,178
    
    
    
    
    
    
    
    15,840Amortization of debt issue costs
    
    
    
    
    
    
    1,355
    
    
    
    468
    
    
    
    
    
    
    
    1,823Deferred income tax benefit
    
    
    (130
    )
    
    
    (380
    )
    
    
    (625
    )
    
    
    
    
    
    
    (1,135
    )Share-based compensation expense
    
    
    
    
    
    
    3,061
    
    
    
    
    
    
    
    
    
    
    
    3,061Gain from insurance settlement
    
    
    
    
    
    
    (1,698
    )
    
    
    
    
    
    
    
    
    
    
    (1,698
    )Excess tax benefits from share-based
compensation arrangements
    
    
    
    
    
    
    (41
    )
    
    
    
    
    
    
    
    
    
    
    (41
    )Equity in earnings of subsidiaries
    
    
    (6,719
    )
    
    
    
    
    
    
    
    
    
    
    6,719
    
    
    
    Changes in assets and liabilities:Receivables
    
    
    
    
    
    
    (63,679
    )
    
    
    
    
    
    
    
    
    
    
    (63,679
    )Inventories
    
    
    
    
    
    
    (13,836
    )
    
    
    
    
    
    
    
    
    
    
    (13,836
    )Accounts payable
    
    
    
    
    
    
    28,972
    
    
    
    
    
    
    
    
    
    
    
    28,972Changes in other working capital
    
    
    98
    
    
    
    3,077
    
    
    
    2,063
    
    
    
    
    
    
    
    5,238Intercompany receivable
    
    
    (2,240
    )
    
    
    
    
    
    
    
    
    
    
    2,240
    
    
    
    Intercompany payable
    
    
    
    
    
    
    2,471
    
    
    
    (231
    )
    
    
    (2,240
    )
    
    
    Other
    
    
    
    
    
    
    448
    
    
    
    (33
    )
    
    
    
    
    
    
    415Net cash provided by (used in) operating activities
    
    
    (2,856
    )
    
    
    (23,673
    )
    
    
    7,624
    
    
    
    
    
    
    
    (18,905
    )Cash flows from investing activities:Investment in subsidiaries
    
    
    14,063
    
    
    
    
    
    
    
    
    
    
    
    (14,063
    )
    
    
    Property, plant and equipment investments
    
    
    
    
    
    
    (11,494
    )
    
    
    (449
    )
    
    
    
    
    
    
    (11,943
    )Proceeds from disposition of assets
    
    
    
    
    
    
    4,335
    
    
    
    
    
    
    
    
    
    
    
    4,335Net cash provided by (used in) investing activities
    
    
    14,063
    
    
    
    (7,159
    )
    
    
    (449
    )
    
    
    14,063
    
    
    
    (7,608
    )Cash flows from financing activities:Net transactions with Parent
    
    
    
    
    
    
    (6,886
    )
    
    
    (7,177
    )
    
    
    14,063
    
    
    
    Proceeds from stock options exercised
    
    
    442
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    442Excess tax benefits from share-based compensation
arrangements
    
    
    41
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    41Net increase in revolving credit facility
    
    
    
    
    
    
    48,538
    
    
    
    
    
    
    
    
    
    
    
    48,538Decrease in bank overdrafts
    
    
    
    
    
    
    (12,895
    )
    
    
    
    
    
    
    
    
    
    
    (12,895
    )Common dividends paid
    
    
    (11,689
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (11,689
    )Other
    
    
    
    
    
    
    
    
    
    
    34
    
    
    
    
    
    
    
    34Net cash provided by (used in) financing activities
    
    
    (11,206
    )
    
    
    28,757
    
    
    
    (7,143
    )
    
    
    14,063
    
    
    
    24,471Increase (decrease) in cash
    
    
    1
    
    
    
    (2,075
    )
    
    
    32
    
    
    
    
    
    
    
    (2,042
    )Balance, beginning of period
    
    
    2
    
    
    
    27,017
    
    
    
    23
    
    
    
    
    
    
    
    27,042Balance, end of period
    
    $
    3
    
    
    $
    24,942
    
    
    $
    55
    
    
    $
    
    
    
    $
    25,000
 19




---



##### Table of Contents



BlueLinxHoldings
    
    
    BlueLinx
    
    
    LLCInc.
    
    
    Corporation
    
    
    Subsidiaries
    
    
    Eliminations
    
    
    ConsolidatedCash flows from operating activities:Net income (loss)
    
    $
    21,697
    
    
    $
    23,854
    
    
    $
    (1,462
    )
    
    $
    (22,392
    )
    
    $
    21,697Adjustments to reconcile net income (loss) to cash
provided by (used in) operations:Depreciation and amortization
    
    
    
    
    
    
    12,150
    
    
    
    3,173
    
    
    
    
    
    
    
    15,323Amortization of debt issue costs
    
    
    
    
    
    
    1,441
    
    
    
    577
    
    
    
    
    
    
    
    2,018Charges associated with mortgage refinancing
    
    
    
    
    
    
    
    
    
    
    4,864
    
    
    
    
    
    
    
    4,864Deferred income tax benefit
    
    
    (312
    )
    
    
    (1,068
    )
    
    
    (496
    )
    
    
    
    
    
    
    (1,876
    )Share-based compensation
    
    
    48
    
    
    
    2,161
    
    
    
    
    
    
    
    
    
    
    
    2,209Excess tax benefits from share-based
compensation arrangements
    
    
    
    
    
    
    (882
    )
    
    
    
    
    
    
    
    
    
    
    (882
    )Equity in earnings of subsidiaries
    
    
    (22,392
    )
    
    
    
    
    
    
    
    
    
    
    22,392
    
    
    
    Changes in assets and liabilities:Receivables
    
    
    
    
    
    
    (33,396
    )
    
    
    
    
    
    
    
    
    
    
    (33,396
    )Inventories
    
    
    
    
    
    
    5,961
    
    
    
    
    
    
    
    
    
    
    
    5,961Accounts payable
    
    
    (5
    )
    
    
    (75,043
    )
    
    
    2,595
    
    
    
    (2,506
    )
    
    
    (74,959
    )Changes in other working capital
    
    
    782
    
    
    
    (4,372
    )
    
    
    (1,402
    )
    
    
    2,506
    
    
    
    (2,486
    )Intercompany receivable
    
    
    239
    
    
    
    1,578
    
    
    
    (2,510
    )
    
    
    693
    
    
    
    Intercompany payable
    
    
    (1,578
    )
    
    
    2,510
    
    
    
    (239
    )
    
    
    (693
    )
    
    
    Other
    
    
    
    
    
    
    (2,551
    )
    
    
    314
    
    
    
    
    
    
    
    (2,237
    )Net cash provided by (used in) operating activities
    
    
    (1,521
    )
    
    
    (67,657
    )
    
    
    5,414
    
    
    
    
    
    
    
    (63,764
    )Cash flows from investing activities:Investment in subsidiaries
    
    
    10,419
    
    
    
    
    
    
    
    
    
    
    
    (10,419
    )
    
    
    Acquisitions, net of cash acquired
    
    
    
    
    
    
    (9,353
    )
    
    
    
    
    
    
    
    
    
    
    (9,353
    )Property, plant and equipment investments
    
    
    
    
    
    
    (7,267
    )
    
    
    
    
    
    
    
    
    
    
    (7,267
    )Proceeds from sale of assets
    
    
    
    
    
    
    465
    
    
    
    
    
    
    
    
    
    
    
    465Net cash provided by (used in) investing activities
    
    
    10,419
    
    
    
    (16,155
    )
    
    
    
    
    
    
    (10,419
    )
    
    
    (16,155
    )Cash flows from financing activities:Net transactions with Parent
    
    
    
    
    
    
    116,236
    
    
    
    (126,655
    )
    
    
    10,419
    
    
    
    Proceeds from stock options exercised
    
    
    1,744
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    1,744Excess tax benefits from share-based compensation
arrangements
    
    
    882
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    882Net decrease in revolving credit facility
    
    
    
    
    
    
    (38,342
    )
    
    
    
    
    
    
    
    
    
    
    (38,342
    )Proceeds from new mortgage
    
    
    
    
    
    
    
    
    
    
    295,000
    
    
    
    
    
    
    
    295,000Debt financing costs
    
    
    
    
    
    
    (400
    )
    
    
    (6,268
    )
    
    
    
    
    
    
    (6,668
    )Retirement of old mortgage
    
    
    
    
    
    
    
    
    
    
    (165,000
    )
    
    
    
    
    
    
    (165,000
    )Prepayment fees associated with old mortgage
    
    
    
    
    
    
    
    
    
    
    (2,475
    )
    
    
    
    
    
    
    (2,475
    )Increase in bank overdrafts
    
    
    
    
    
    
    6,177
    
    
    
    
    
    
    
    
    
    
    
    6,177Common dividends paid
    
    
    (11,537
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (11,537
    )Net cash provided by (used in) financing activities
    
    
    (8,911
    )
    
    
    83,671
    
    
    
    (5,398
    )
    
    
    10,419
    
    
    
    79,781Increase (decrease) in cash
    
    
    (13
    )
    
    
    (141
    )
    
    
    16
    
    
    
    
    
    
    
    (138
    )Balance, beginning of period
    
    
    13
    
    
    
    24,307
    
    
    
    
    
    
    
    
    
    
    
    24,320Balance, end of period
    
    $
    
    
    
    $
    24,166
    
    
    $
    16
    
    
    $
    
    
    
    $
    24,182
 20




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##### 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;
    
    general economic and business conditions in the United States;
    
    the activities of competitors;
    
    changes in significant operating expenses;
    
    changes in the availability of capital;
    
    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 December 30, 2006 as filed with the SEC.
  21




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##### Table of Contents



Overview
 Background
  Recent Developments
  Supply Agreement with Georgia-Pacific
  Selected Factors Affecting Our Operating Results
   Fiscal
    
    
    Fiscal
    
    
    Fiscal
    
    
    Fiscal
    
    
    Fiscal
    
    
    FiscalQ3 2007
    
    
    Q3 2006
    
    
    2007 YTD
    
    
    2006 YTD
    
    
    2006
    
    
    2005(Dollars in millions)(Unaudited)Sales by CategoryStructural Products(1)
    
    $
    571
    
    
    $
    667
    
    
    $
    1,689
    
    
    $
    2,279
    
    
    $
    2,788
    
    
    $
    3,548Specialty Products(1)
    
    
    463
    
    
    
    554
    
    
    
    1,420
    
    
    
    1,737
    
    
    
    2,197
    
    
    
    2,143Unallocated Allowances and Adjustments
    
    
    (18
    )
    
    
    (17
    )
    
    
    (54
    )
    
    
    (57
    )
    
    
    (86
    )
    
    
    (69
    )Total Sales
    
    $
    1,016
    
    
    $
    1,204
    
    
    $
    3,055
    
    
    $
    3,959
    
    
    $
    4,899
    
    
    $
    5,622Sales VariancesUnit Volume $ Change
    
    $
    (177
    )
    
    $
    (176
    )
    
    $
    (711
    )
    
    $
    (166
    )
    
    $
    (398
    )
    
    $
    216Price/Other(2)
    
    
    (11
    )
    
    
    (74
    )
    
    
    (193
    )
    
    
    (168
    )
    
    
    (325
    )
    
    
    (152
    )Total $ Change
    
    $
    (188
    )
    
    $
    (250
    )
    
    $
    (904
    )
    
    $
    (334
    )
    
    $
    (723
    )
    
    $
    64Unit Volume % Change
    
    
    (14.5
    )%
    
    
    (12.0
    )%
    
    
    (17.7
    )%
    
    
    (3.8
    )%
    
    
    (7.0
    )%
    
    
    3.9
    %Price/Other(2)
    
    
    (1.1
    )%
    
    
    (5.2
    )%
    
    
    (5.1
    )%
    
    
    (4.0
    )%
    
    
    (5.9
    )%
    
    
    (2.8
    )%Total % Change
    
    
    (15.6
    )%
    
    
    (17.2
    )%
    
    
    (22.8
    )%
    
    
    (7.8
    )%
    
    
    (12.9
    )%
    
    
    1.1
    %
 
 (1)
    
    For the quarter ended December 31, 2005, we began classifying metal rebar and remesh as
structural product instead of specialty product. Fiscal 2005 Sales by Category have been
adjusted to reclassify sales of rebar/remesh from Specialty Products sales to Structural
Products sales. This reclassification has no impact on Total Sales.(2)
    
    Other includes unallocated allowances and discounts. 22




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##### Table of Contents



Fiscal
    
    
    Fiscal
    
    
    Fiscal
    
    
    Fiscal
    
    
    Fiscal
    
    
    FiscalQ3 2007
    
    
    Q3 2006
    
    
    2007 YTD
    
    
    2006 YTD
    
    
    2006
    
    
    2005(Dollars in millions)(Unaudited)Gross Margin $s byCategoryStructural Products(1)
    
    $
    44
    
    
    $
    47
    
    
    $
    145
    
    
    $
    158
    
    
    $
    194
    
    
    $
    246Specialty Products(1)
    
    
    64
    
    
    
    77
    
    
    
    197
    
    
    
    245
    
    
    
    308
    
    
    
    284Other (2)
    
    
    (5
    )
    
    
    (3
    )
    
    
    (16
    )
    
    
    (16
    )
    
    
    (22
    )
    
    
    (18
    )Total Gross Margin $s
    
    $
    103
    
    
    $
    121
    
    
    $
    326
    
    
    $
    387
    
    
    $
    480
    
    
    $
    512Gross Margin %s by CategoryStructural Products
    
    
    7.6
    %
    
    
    7.0
    %
    
    
    8.6
    %
    
    
    6.9
    %
    
    
    7.0
    %
    
    
    6.9
    %Specialty Products
    
    
    13.8
    %
    
    
    14.0
    %
    
    
    13.9
    %
    
    
    14.1
    %
    
    
    14.0
    %
    
    
    13.3
    %Other (2)
    
    NA
    
    NA
    
    NA
    
    NA
    
    NA
    
    NATotal Gross Margin %s
    
    
    10.1
    %
    
    
    10.0
    %
    
    
    10.7
    %
    
    
    9.8
    %
    
    
    9.8
    %
    
    
    9.1
    %Unit Volume Change by ProductStructural Products
    
    
    (14.8
    )%
    
    
    (17.0
    )%
    
    
    (18.4
    )%
    
    
    (9.9
    )%
    
    
    (11.8
    )%
    
    
    3.2
    %Specialty Products
    
    
    (14.2
    )%
    
    
    (3.9
    )%
    
    
    (16.8
    )%
    
    
    6.5
    %
    
    
    1.0
    %
    
    
    5.1
    %Total Unit Volume Change %s
    
    
    (14.5
    )%
    
    
    (12.0
    )%
    
    
    (17.7
    )%
    
    
    (3.8
    )%
    
    
    (7.0
    )%
    
    
    3.9
    %
 
 (1)
    
    For the quarter ended December 31, 2005, we began classifying metal rebar and remesh as
structural product instead of specialty product. Fiscal 2005 Sales by Category have been
adjusted to reclassify sales of rebar/remesh from Specialty Products sales to Structural
Products sales. This reclassification has no impact on Total Sales.(2)
    
    Other includes unallocated allowances and discounts.  Fiscal
    
    
    Fiscal
    
    
    Fiscal
    
    
    Fiscal
    
    
    Fiscal
    
    
    FiscalQ3 2007
    
    
    Q3 2006
    
    
    2007 YTD
    
    
    2006 YTD
    
    
    2006
    
    
    2005(Dollars in millions)(Unaudited)Sales by ChannelWarehouse/Reload
    
    $
    731
    
    
    $
    841
    
    
    $
    2,196
    
    
    $
    2,641
    
    
    $
    3,326
    
    
    $
    3,704Direct
    
    
    303
    
    
    
    380
    
    
    
    913
    
    
    
    1,375
    
    
    
    1,659
    
    
    
    1,987Unallocated Allowances and Adjustments
    
    
    (18
    )
    
    
    (17
    )
    
    
    (54
    )
    
    
    (57
    )
    
    
    (86
    )
    
    
    (69
    )Total
    
    $
    1,016
    
    
    $
    1,204
    
    
    $
    3,055
    
    
    $
    3,959
    
    
    $
    4,899
    
    
    $
    5,622Gross Margin by ChannelWarehouse/Reload
    
    $
    91
    
    
    $
    100
    
    
    $
    288
    
    
    $
    326
    
    
    $
    407
    
    
    $
    429Direct
    
    
    17
    
    
    
    24
    
    
    
    54
    
    
    
    77
    
    
    
    95
    
    
    
    101Unallocated Allowances and Adjustments
    
    
    (5
    )
    
    
    (3
    )
    
    
    (16
    )
    
    
    (16
    )
    
    
    (22
    )
    
    
    (18
    )Total
    
    $
    103
    
    
    $
    121
    
    
    $
    326
    
    
    $
    387
    
    
    $
    480
    
    
    $
    512
 Fiscal
    
    Fiscal
    
    Fiscal
    
    Fiscal
    
    Fiscal
    
    FiscalQ3 2007
    
    Q3 2006
    
    2007 YTD
    
    2006 YTD
    
    2006
    
    2005(Dollars in millions)(Unaudited)Gross Margin % by ChannelWarehouse/Reload
    
    
    12.4
    %
    
    
    11.9
    %
    
    
    13.1
    %
    
    
    12.3
    %
    
    
    12.2
    %
    
    
    11.6
    %Direct
    
    
    5.6
    %
    
    
    6.3
    %
    
    
    5.9
    %
    
    
    5.6
    %
    
    
    5.7
    %
    
    
    5.1
    %Unallocated Allowances and Adjustments
    
    
    (0.5
    )%
    
    
    (0.2
    )%
    
    
    (0.5
    )%
    
    
    (0.4
    )%
    
    
    (0.4
    )%
    
    
    (0.3
    )%Total
    
    
    10.1
    %
    
    
    10.0
    %
    
    
    10.7
    %
    
    
    9.8
    %
    
    
    9.8
    %
    
    
    9.1
    %
 23




---



##### Table of Contents



Fiscal Year
  Results of Operations
 Third Quarter of Fiscal 2007 Compared to Third Quarter of Fiscal 2006
  Period
    
    
    
    
    
    
    Periodfrom
    
    
    
    
    
    
    fromJuly 1, 2007
    
    
    % of
    
    
    July 2, 2006
    
    
    % ofto
    
    
    Net
    
    
    to
    
    
    NetSeptember 29, 2007
    
    
    Sales
    
    
    September 30, 2006
    
    
    Sales(Unaudited)
    
    
    
    
    
    
    (Unaudited)(Dollars in thousands)Net sales
    
    $
    1,015,888
    
    
    
    100.0
    %
    
    $
    1,203,578
    
    
    
    100.0
    %Gross profit
    
    
    102,810
    
    
    
    10.1
    %
    
    
    120,906
    
    
    
    10.0
    %Selling, general & administrative
    
    
    84,826
    
    
    
    8.3
    %
    
    
    99,615
    
    
    
    8.3
    %Depreciation and amortization
    
    
    5,106
    
    
    
    0.5
    %
    
    
    5,217
    
    
    
    0.4
    %Operating income
    
    
    12,878
    
    
    
    1.3
    %
    
    
    16,074
    
    
    
    1.3
    %Interest expense
    
    
    11,352
    
    
    
    1.1
    %
    
    
    12,046
    
    
    
    1.0
    %Other income, net
    
    
    7
    
    
    
    0.0
    %
    
    
    (29
    )
    
    
    0.0
    %Income before provision for income taxes
    
    
    1,519
    
    
    
    0.1
    %
    
    
    4,057
    
    
    
    0.3
    %Provision for income taxes
    
    
    629
    
    
    
    0.1
    %
    
    
    1,765
    
    
    
    0.1
    %Net income
    
    $
    890
    
    
    
    0.1
    %
    
    $
    2,292
    
    
    
    0.2
    %
 Net Sales.
 Gross Profit.
 Selling, general, and administrative.
 Depreciation and Amortization.
 Operating Income.
 Interest Expense, net.
 24




---



##### Table of Contents



Provision for Income Taxes.
 Net Income.
  Year-to-Date Fiscal 2007 Compared to Year-to-Date Fiscal 2006
  Period
    
    
    
    
    
    
    Periodfrom
    
    
    
    
    
    
    fromDecember 31, 2006
    
    
    % of
    
    
    January 1, 2006
    
    
    % ofto
    
    
    Net
    
    
    to
    
    
    NetSeptember 29, 2007
    
    
    Sales
    
    
    September 30, 2006
    
    
    Sales(Unaudited)
    
    
    
    
    
    
    (Unaudited)(Dollars in thousands)Net sales
    
    $
    3,054,992
    
    
    
    100.0
    %
    
    $
    3,959,134
    
    
    
    100.0
    %Gross profit
    
    
    325,803
    
    
    
    10.7
    %
    
    
    387,301
    
    
    
    9.8
    %Selling, general & administrative
    
    
    266,640
    
    
    
    8.7
    %
    
    
    295,004
    
    
    
    7.5
    %Depreciation and amortization
    
    
    15,840
    
    
    
    0.5
    %
    
    
    15,323
    
    
    
    0.4
    %Operating income
    
    
    43,323
    
    
    
    1.4
    %
    
    
    76,974
    
    
    
    1.9
    %Interest expense
    
    
    33,756
    
    
    
    1.1
    %
    
    
    35,505
    
    
    
    0.9
    %Charges associated with mortgage refinancing
    
    
    
    
    
    
    0.0
    %
    
    
    4,864
    
    
    
    0.1
    %Other (income) expense, net
    
    
    (601
    )
    
    
    0.0
    %
    
    
    (17
    )
    
    
    0.0
    %Income before provision for income taxes
    
    
    10,168
    
    
    
    0.3
    %
    
    
    36,622
    
    
    
    0.9
    %Income tax provision
    
    
    4,033
    
    
    
    0.1
    %
    
    
    14,925
    
    
    
    0.4
    %Net income
    
    $
    6,135
    
    
    
    0.2
    %
    
    $
    21,697
    
    
    
    0.5
    %
 Net Sales.
 Gross Profit.
 Selling, general, and administrative.
 Depreciation and Amortization.
 25




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##### Table of Contents



Operating Income.
 Interest Expense, net.
  Provision for Income Taxes.
 Net Income.
  Seasonality
  Liquidity and Capital Resources
  
  September 29,
    
    December 30,2007
    
    2006(Dollars in thousands)(Unaudited)Working capital
    
    $
    483,208
    
    
    $
    520,237
 26




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##### Table of Contents



Period from
    
    Period fromDecember 31,
    
    January 1,2006 to
    
    2006 toSeptember 29,
    
    September 30,2007
    
    2006(Dollars in thousands)(Unaudited)Cash flows used for operating activities
    
    $
    (18,905
    )
    
    $
    (63,764
    )Cash flows used for investing activities
    
    
    (7,608
    )
    
    
    (16,155
    )Cash flows provided by financing activities
    
    $
    24,471
    
    
    $
    79,781
 Working Capital
  Operating Activities
  Investing Activities
    Financing Activities
   27




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##### Table of Contents



Debt and Credit Sources
      Contractual Obligations
  Critical Accounting Policies
   Revenue Recognition
   
    
    We are the primary obligor responsible for fulfillment;
 28




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##### Table of Contents




    
    We hold title to all reload inventory and are responsible for all product returns;
    
    We control the selling price for all channels;
    
    We select the supplier; and
    
    We bear all credit risk.
  Allowance for Doubtful Accounts and Related Reserves
 e.g.
 Stock-Based Compensation
 Share-Based Payment Accounting for Stock-Based Compensation
     29




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##### Table of Contents



Inventories
   Consideration Received from Vendors and Paid to Customers
  Impairment of Long-Lived Assets
  Income Taxes
  Recently Issued Accounting Pronouncements
 The Fair Value Option for Financial Assets and
Financial Liabilities
 Fair Value Measurements
 30




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##### Table of Contents



ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
   
 ITEM 4. CONTROLS AND PROCEDURES
   
 PART II. OTHER INFORMATION
 
 ITEM 1. LEGAL PROCEEDINGS
  
 ITEM 1A. RISK FACTORS
  In the past we have paid quarterly dividends on our common
stock but we may change our dividend policy; the instruments governing our indebtedness contain various covenants
that may limit our ability to pay dividends.
   31




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##### Table of Contents



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.
 32




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##### Table of Contents



SIGNATURES
  BlueLinx Holdings Inc.(Registrant)Date:
November 7, 2007
    
    /s/ Lynn A. Wentworth

Lynn A. WentworthChief Financial Officer and Treasurer(Principal Accounting and Financial Officer)
 33




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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.
 34