##### 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 27, 2008
 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
(State of Incorporation)
    
    77-0627356
(I.R.S. Employer Identification No.)4300 Wildwood Parkway, Atlanta, Georgia
    
    30339(Address of principal executive offices)
    
    (Zip Code)
 (770) 953-7000
 þ o
  Large accelerated filer o
    
    Accelerated filer þ
    
    Non-accelerated filer o
(Do not check if a smaller reporting company)
    
    Smaller reporting company o
 o þ




---



##### 



BLUELINX HOLDINGS INC.
 Form 10-Q
 For the Quarterly Period Ended September 27, 2008
 INDEX
 PAGEPART I. FINANCIAL INFORMATIONItem 1. Financial Statements  BlueLinx Holdings Inc. (Unaudited)
    
    
    3Condensed Consolidated Statements of Operations
    
    
    3Condensed 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
    
    
    23Item 3. Quantitative and Qualitative Disclosures About Market Risk
    
    
    36Item 4. Controls and Procedures
    
    
    36PART II. OTHER INFORMATIONItem 1. Legal Proceedings
    
    
    36Item 1A. Risk Factors
    
    
    37Item 6. Exhibits
    
    
    38Signatures
    
    
    39Exhibit Index
    
    
    40Exhibit 31.1Exhibit 31.2Exhibit 32.1Exhibit 32.2Exhibit 99.1Exhibit 99.2
   2




---



##### 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 fromJune 29, 2008
    
    
    July 1, 2007to
    
    
    toSeptember 27, 2008
    
    
    September 29, 2007Net sales
    
    $
    726,756
    
    
    $
    1,015,888Cost of sales
    
    
    643,507
    
    
    
    913,078Gross profit
    
    
    83,249
    
    
    
    102,810Operating expenses:Selling, general, and administrative
    
    
    73,793
    
    
    
    84,826Depreciation and amortization
    
    
    4,940
    
    
    
    5,106Total operating expenses
    
    
    78,733
    
    
    
    89,932Operating income
    
    
    4,516
    
    
    
    12,878Non-operating expenses:Interest expense
    
    
    8,791
    
    
    
    11,352Other expense, net
    
    
    65
    
    
    
    7(Loss) income before (benefit from) provision for income taxes
    
    
    (4,340
    )
    
    
    1,519(Benefit from) provision for income taxes
    
    
    (1,746
    )
    
    
    629Net (loss) income
    
    $
    (2,594
    )
    
    $
    890Basic weighted average number of common shares outstanding
    
    
    31,150
    
    
    
    30,853Basic net (loss) income per share applicable to common stock
    
    $
    (0.08
    )
    
    $
    0.03Diluted weighted average number of common shares outstanding
    
    
    31,150
    
    
    
    30,951Diluted net (loss) income per share applicable to common stock
    
    $
    (0.08
    )
    
    $
    0.03Dividends declared per share of common stock
    
    $
    
    
    
    $
    0.125
   3




---



##### Table of Contents



BLUELINX HOLDINGS INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except per share data)
(unaudited)
 Nine Months EndedPeriod from
    
    
    Period fromDecember 30, 2007
    
    
    December 31, 2006to
    
    
    toSeptember 27, 2008
    
    
    September 29, 2007Net sales
    
    $
    2,278,185
    
    
    $
    3,054,992Cost of sales
    
    
    2,009,698
    
    
    
    2,729,189Gross profit
    
    
    268,487
    
    
    
    325,803Operating expenses:Selling, general, and administrative
    
    
    235,655
    
    
    
    266,640Depreciation and amortization
    
    
    15,011
    
    
    
    15,840Total operating expenses
    
    
    250,666
    
    
    
    282,480Operating income
    
    
    17,821
    
    
    
    43,323Non-operating expenses:Interest expense
    
    
    27,530
    
    
    
    33,756Other expense (income), net
    
    
    385
    
    
    
    (601
    )(Loss) income before (benefit from) provision for income taxes
    
    
    (10,094
    )
    
    
    10,168(Benefit from) provision for income taxes
    
    
    (3,508
    )
    
    
    4,033Net (loss) income
    
    $
    (6,586
    )
    
    $
    6,135Basic weighted average number of common shares outstanding
    
    
    31,053
    
    
    
    30,834Basic net (loss) income per share applicable to common stock
    
    $
    (0.21
    )
    
    $
    0.20Diluted weighted average number of common shares outstanding
    
    
    31,053
    
    
    
    30,947Diluted net (loss) income per share applicable to common stock
    
    $
    (0.21
    )
    
    $
    0.20Dividends declared per share of common stock
    
    $
    
    
    
    $
    0.375
   4




---



##### Table of Contents



BLUELINX HOLDINGS INC.
 
 CONDENSED CONSOLIDATED BALANCE SHEETS
 (In thousands, except share data)
 September 27, 2008
    
    
    December 29, 2007(unaudited)Assets:Current assets:Cash and cash equivalents
    
    $
    71,098
    
    
    $
    15,759Receivables, net
    
    
    244,478
    
    
    
    263,176Inventories, net
    
    
    260,977
    
    
    
    335,887Deferred income taxes
    
    
    15,962
    
    
    
    12,199Other current assets
    
    
    33,015
    
    
    
    53,231Total current assets
    
    
    625,530
    
    
    
    680,252Property, plant, and equipment:Land and land improvements
    
    
    53,467
    
    
    
    57,295Buildings
    
    
    96,179
    
    
    
    98,420Machinery and equipment
    
    
    68,259
    
    
    
    67,217Construction in progress
    
    
    2,201
    
    
    
    4,212Property, plant, and equipment, at cost
    
    
    220,106
    
    
    
    227,144Accumulated depreciation
    
    
    (64,870
    )
    
    
    (54,702
    )Property, plant, and equipment, net
    
    
    155,236
    
    
    
    172,442Non-current deferred income taxes
    
    
    1,502
    
    
    
    2,628Other assets
    
    
    24,077
    
    
    
    28,114Total assets
    
    $
    806,345
    
    
    $
    883,436Liabilities:Current liabilities:Accounts payable
    
    $
    128,842
    
    
    $
    164,717Bank overdrafts
    
    
    21,702
    
    
    
    37,152Accrued compensation
    
    
    12,246
    
    
    
    10,372Other current liabilities
    
    
    29,412
    
    
    
    19,280Total current liabilities
    
    
    192,202
    
    
    
    231,521Non-current liabilities:Long-term debt
    
    
    451,000
    
    
    
    478,535Other long-term liabilities
    
    
    13,883
    
    
    
    18,557Total liabilities
    
    
    657,085
    
    
    
    728,613Shareholders Equity:Common Stock, $0.01 par value, 100,000,000 shares authorized;
32,362,360 and 31,224,959 shares
issued and outstanding at September
27, 2008 and December 29, 2007,
respectively
    
    
    324
    
    
    
    312Additional paid-in-capital
    
    
    143,699
    
    
    
    142,081Accumulated other comprehensive income
    
    
    4,819
    
    
    
    5,426Retained earnings
    
    
    418
    
    
    
    7,004Total shareholders equity
    
    
    149,260
    
    
    
    154,823Total liabilities and shareholders equity
    
    $
    806,345
    
    
    $
    883,436
   5




---



##### Table of Contents



BLUELINX HOLDINGS INC.
 
 CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
 (In thousands)
 (unaudited)
 Nine Months EndedPeriod from
    
    
    Period fromDecember 30, 2007
    
    
    December 31, 2006to
    
    
    toSeptember 27, 2008
    
    
    September 29, 2007Cash flows from operating activities:Net (loss) income
    
    $
    (6,586
    )
    
    $
    6,135Adjustments to reconcile net (loss) income to cash provided by (used in) operations:Depreciation and amortization
    
    
    15,011
    
    
    
    15,840Amortization of debt issue costs
    
    
    1,823
    
    
    
    1,823Non-cash vacant property charges
    
    
    1,640
    
    
    
    Deferred income tax benefit
    
    
    (3,506
    )
    
    
    (1,135
    )Share-based compensation expense
    
    
    2,163
    
    
    
    3,061Gain from insurance settlement
    
    
    
    
    
    
    (1,698
    )Excess tax benefits from share-based compensation arrangements
    
    
    (76
    )
    
    
    (41
    )Changes in assets and liabilities:Receivables
    
    
    18,698
    
    
    
    (63,679
    )Inventories
    
    
    74,910
    
    
    
    (13,836
    )Accounts payable
    
    
    (35,875
    )
    
    
    28,972Changes in other working capital
    
    
    28,895
    
    
    
    5,238Other
    
    
    2,477
    
    
    
    415Net cash provided by (used in) operating activities
    
    
    99,574
    
    
    
    (18,905
    )Cash flows from investing activities:Property, plant and equipment investments
    
    
    (2,614
    )
    
    
    (11,943
    )Proceeds from disposition of assets
    
    
    848
    
    
    
    4,335Net cash used in investing activities
    
    
    (1,766
    )
    
    
    (7,608
    )Cash flows from financing activities:Proceeds from stock options exercised
    
    
    434
    
    
    
    442Excess tax benefits from share-based compensation arrangements
    
    
    76
    
    
    
    41Net (decrease) increase in revolving credit facility
    
    
    (27,535
    )
    
    
    48,538Decrease in bank overdrafts
    
    
    (15,450
    )
    
    
    (12,895
    )Common stock dividends paid
    
    
    
    
    
    
    (11,689
    )Other
    
    
    6
    
    
    
    34Net cash (used in) provided by financing activities
    
    
    (42,469
    )
    
    
    24,471Increase (decrease) in cash
    
    
    55,339
    
    
    
    (2,042
    )Balance, beginning of period
    
    
    15,759
    
    
    
    27,042Balance, end of period
    
    $
    71,098
    
    
    $
    25,000
   6




---



##### Table of Contents



BLUELINX HOLDINGS INC.
 
 NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
 1. Basis of Presentation and Background
 Basis of Presentation
    2. Summary of Significant Accounting Policies
 Cash
and Cash Equivalents
   Earnings per Common Share
   Common Stock Dividends
   7




---



##### Table of Contents



Allowance for Doubtful Accounts and Related Reserves
 e.g.
 Inventory Valuation
   Income Taxes
 Accounting for Income Taxes
  Accounting for Uncertainty in Income Taxes
  Stock-Based Compensation
   8




---



##### Table of Contents



Period from December 30, 2007 to September 27, 2008Time-Based
    
    
    Performance-Based
    
    
    Performance-BasedOptions*
    
    
    Options**
    
    
    Options***Risk free interest rate
    
    
    2.70
    %
    
    
    2.62
    %
    
    
    2.11
    %Expected dividend yield
    
    
    0.0
    %
    
    
    0.0
    %
    
    
    0.0
    %Expected life
    
    6 years
    
    
    4 years
    
    
    1 yearExpected volatility
    
    
    48
    %
    
    
    48
    %
    
    
    48
    %Weighted average fair value
    
    $
    2.27
    
    
    $
    0.67
    
    
    $
    1.31
 
 *
    
    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 (the date the performance
criteria were established is considered the grant date for accounting purposes).  9




---



##### Table of Contents



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 (the date the performance
criteria were established is considered the grant date for accounting purposes).     Impairment of Long-Lived Assets
    10




---



##### Table of Contents



3. Exit Costs
 Accounting for Costs Associated with Exit or Disposal
Activities,
  Exit CostsBalance at December 29, 2007
    
    $
    11,326Charges
    
    
    1,640Payments
    
    
    (1,655
    )Accretion of liability
    
    
    603Balance at September 27, 2008
    
    $
    11,914
  4. Comprehensive (Loss) Income
  Third QuarterPeriod from
    
    
    Period fromJune 29, 2008
    
    
    July 1, 2007to
    
    
    toSeptember 27, 2008
    
    
    September 29, 2007Net (loss) income
    
    $
    (2,594
    )
    
    $
    890Other comprehensive (loss) income:Foreign currency translation, net of taxes
    
    
    (242
    )
    
    
    866Unrealized loss from cash flow hedge, net of taxes
    
    
    (145
    )
    
    
    (2,040
    )Comprehensive loss
    
    $
    (2,981
    )
    
    $
    (284
    )
 Nine Months EndedPeriod from
    
    
    Period fromDecember 30, 2007
    
    
    December 31, 2006to
    
    
    toSeptember 27, 2008
    
    
    September 29, 2007Net (loss) income
    
    $
    (6,586
    )
    
    $
    6,135Other comprehensive (loss) income:Foreign currency translation, net of taxes
    
    
    (639
    )
    
    
    1,779Unrealized gain (loss) from cash flow hedge, net of taxes
    
    
    34
    
    
    
    (756
    )Comprehensive (loss) income
    
    $
    (7,191
    )
    
    $
    7,158
 5. Employee Benefits
 Defined Benefit Pension Plans
   11




---



##### Table of Contents



Third QuarterPeriod from
    
    
    Period fromJune 29, 2008
    
    
    July 1, 2007to
    
    
    toSeptember 27, 2008
    
    
    September 29, 2007(In thousands)Service cost
    
    $
    561
    
    
    $
    626Interest cost on projected benefit obligation
    
    
    1,109
    
    
    
    1,054Expected return on plan assets
    
    
    (1,501
    )
    
    
    (1,356
    )Amortization of unrecognized gain
    
    
    (91
    )
    
    
    Amortization of unrecognized prior service cost
    
    
    
    
    
    
    1Net periodic pension cost
    
    $
    78
    
    
    $
    325
 Nine Months EndedPeriod from
    
    
    Period fromDecember 30, 2007
    
    
    December 31, 2006to
    
    
    toSeptember 27, 2008
    
    
    September 29, 2007(In thousands)Service cost
    
    $
    1,684
    
    
    $
    1,879Interest cost on projected benefit obligation
    
    
    3,326
    
    
    
    3,162Expected return on plan assets
    
    
    (4,501
    )
    
    
    (4,068
    )Amortization of unrecognized gain
    
    
    (274
    )
    
    
    Amortization of unrecognized prior service cost
    
    
    1
    
    
    
    2Net periodic pension cost
    
    $
    236
    
    
    $
    975
 6. Revolving Credit Facility
       12




---



##### Table of Contents



7. Mortgage
   2011
    
    $
    1,5112012
    
    
    3,1722013
    
    
    3,4372014
    
    
    3,6652015
    
    
    3,908Thereafter
    
    $
    279,307
 8. Fair Value Measurements
 Fair Value
Measurements Application of FASB Statement No. 157 to FASB Statement No. 13 and
Other Accounting Pronouncements That Address Fair Value Measurements for Purposes of Lease
Classification or Measurement under Statement 13 Partial Deferral of the Effective Date of Statement
157 Determining the Fair Value of a Financial Asset When the Market
for That Asset Is Not Active
  Level 1
    
    Unadjusted quoted prices in active markets for identical assets or
liabilities.Level 2
    
    Unadjusted quoted prices in active markets for similar assets or
liabilities, orUnadjusted quoted prices for identical or similar assets or
liabilities in markets that are not active, orInputs other than quoted prices that are observable for the asset
or liability.Level 3
    
    Unobservable inputs for the asset or liability.
   13




---



##### Table of Contents



9. Related Party Transactions
  10. Commitments and Contingencies
 Environmental and Legal Matters
  Collective Bargaining Agreements
  Preference Claim
  Supply Agreement with Georgia-Pacific
   14




---



##### Table of Contents



11. Recently Issued Accounting Pronouncements
 The Hierarchy of Generally Accepted Accounting
Principles The Meaning of Present Fairly in Conformity with
Generally Accepted Accounting Principles
 Determining Whether Instruments Granted in Share-Based Payment Transactions are
Participating Securities Earnings Per Share
 Determination of the
Useful Life of Intangible Assets Goodwill and Other Intangible Assets
 Disclosures about Derivative Instruments and Hedging Activities
 An Amendment of SFAS No. 133
 Noncontrolling Interests in Consolidated
Financial Statements
   15




---



##### Table of Contents



12. Unaudited Supplemental Condensed Consolidating Financial Statements
 ,
  BlueLinxHoldings
    
    
    BlueLinx
    
    
    LLCInc.
    
    
    Corporation
    
    
    Subsidiaries
    
    
    Eliminations
    
    
    ConsolidatedNet sales
    
    $
    
    
    
    $
    726,756
    
    
    $
    7,617
    
    
    $
    (7,617
    )
    
    $
    726,756Cost of sales
    
    
    
    
    
    
    643,507
    
    
    
    
    
    
    
    
    
    
    
    643,507Gross profit
    
    
    
    
    
    
    83,249
    
    
    
    7,617
    
    
    
    (7,617
    )
    
    
    83,249Operating expenses:Selling, general and administrative
    
    
    2,189
    
    
    
    79,016
    
    
    
    206
    
    
    
    (7,617
    )
    
    
    73,794Depreciation and amortization
    
    
    
    
    
    
    3,869
    
    
    
    1,070
    
    
    
    
    
    
    
    4,939Total operating expenses
    
    
    2,189
    
    
    
    82,885
    
    
    
    1,276
    
    
    
    (7,617
    )
    
    
    78,733Operating income (loss)
    
    
    (2,189
    )
    
    
    364
    
    
    
    6,341
    
    
    
    
    
    
    
    4,516Non-operating expenses:Interest expense
    
    
    
    
    
    
    3,899
    
    
    
    4,892
    
    
    
    
    
    
    
    8,791Other expense (income), net
    
    
    
    
    
    
    80
    
    
    
    (15
    )
    
    
    
    
    
    
    65(Loss) income before provision for
(benefit from) income taxes
    
    
    (2,189
    )
    
    
    (3,615
    )
    
    
    1,464
    
    
    
    
    
    
    
    (4,340
    )Provision for (benefit from) income taxes
    
    
    (854
    )
    
    
    (1,463
    )
    
    
    571
    
    
    
    
    
    
    
    (1,746
    )Equity in income (loss) of subsidiaries
    
    
    (1,259
    )
    
    
    
    
    
    
    
    
    
    
    1,259
    
    
    
    Net income (loss)
    
    $
    (2,594
    )
    
    $
    (2,152
    )
    
    $
    893
    
    
    $
    1,259
    
    
    $
    (2,594
    )
  16




---



##### 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
    )
    
    
    
    
    
    
    7(Loss) income 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
  17




---



##### Table of Contents



BlueLinxHoldings
    
    
    BlueLinx
    
    
    LLCInc.
    
    
    Corporation
    
    
    Subsidiaries
    
    
    Eliminations
    
    
    ConsolidatedNet sales
    
    $
    
    
    
    $
    2,278,185
    
    
    $
    22,852
    
    
    $
    (22,852
    )
    
    $
    2,278,185Cost of sales
    
    
    
    
    
    
    2,009,698
    
    
    
    
    
    
    
    
    
    
    
    2,009,698Gross profit
    
    
    
    
    
    
    268,487
    
    
    
    22,852
    
    
    
    (22,852
    )
    
    
    268,487Operating expenses:Selling, general and administrative
    
    
    2,835
    
    
    
    255,227
    
    
    
    446
    
    
    
    (22,852
    )
    
    
    235,656Depreciation and amortization
    
    
    
    
    
    
    11,800
    
    
    
    3,210
    
    
    
    
    
    
    
    15,010Total operating expenses
    
    
    2,835
    
    
    
    267,027
    
    
    
    3,656
    
    
    
    (22,852
    )
    
    
    250,666Operating income (loss)
    
    
    (2,835
    )
    
    
    1,460
    
    
    
    19,196
    
    
    
    
    
    
    
    17,821Non-operating expenses:Interest expense
    
    
    
    
    
    
    12,854
    
    
    
    14,676
    
    
    
    
    
    
    
    27,530Other expense (income), net
    
    
    
    
    
    
    413
    
    
    
    (28
    )
    
    
    
    
    
    
    385(Loss) income before provision for
(benefit from) income taxes
    
    
    (2,835
    )
    
    
    (11,807
    )
    
    
    4,548
    
    
    
    
    
    
    
    (10,094
    )Provision for (benefit from) income taxes
    
    
    (1,106
    )
    
    
    (4,176
    )
    
    
    1,774
    
    
    
    
    
    
    
    (3,508
    )Equity in income (loss) of subsidiaries
    
    
    (4,857
    )
    
    
    
    
    
    
    
    
    
    
    4,857
    
    
    
    Net income (loss)
    
    $
    (6,586
    )
    
    $
    (7,631
    )
    
    $
    2,774
    
    
    $
    4,857
    
    
    $
    (6,586
    )
  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
    )(Loss) 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
  18




---



##### Table of Contents



BlueLinxBlueLinx
    
    
    CorporationHoldings
    
    
    and
    
    
    LLCInc.
    
    
    Subsidiaries
    
    
    Subsidiaries
    
    
    Eliminations
    
    
    ConsolidatedAssets:Current assets:Cash
    
    $
    4
    
    
    $
    53,531
    
    
    $
    17,563
    
    
    $
    
    
    
    $
    71,098Receivables
    
    
    
    
    
    
    244,478
    
    
    
    
    
    
    
    
    
    
    
    244,478Inventories
    
    
    
    
    
    
    260,977
    
    
    
    
    
    
    
    
    
    
    
    260,977Deferred income taxes
    
    
    
    
    
    
    15,965
    
    
    
    
    
    
    
    (3
    )
    
    
    15,962Other current assets
    
    
    552
    
    
    
    26,750
    
    
    
    5,713
    
    
    
    
    
    
    
    33,015Intercompany receivable
    
    
    1,239
    
    
    
    274
    
    
    
    
    
    
    
    (1,513
    )
    
    
    Total current assets
    
    
    1,795
    
    
    
    601,975
    
    
    
    23,276
    
    
    
    (1,516
    )
    
    
    625,530Property, plant and equipment:Land and land improvements
    
    
    
    
    
    
    3,143
    
    
    
    50,324
    
    
    
    
    
    
    
    53,467Buildings
    
    
    
    
    
    
    7,517
    
    
    
    88,662
    
    
    
    
    
    
    
    96,179Machinery and equipment
    
    
    
    
    
    
    68,259
    
    
    
    
    
    
    
    
    
    
    
    68,259Construction in progress
    
    
    
    
    
    
    2,201
    
    
    
    
    
    
    
    
    
    
    
    2,201Property, plant and equipment, at cost
    
    
    
    
    
    
    81,120
    
    
    
    138,986
    
    
    
    
    
    
    
    220,106Accumulated depreciation
    
    
    
    
    
    
    (46,812
    )
    
    
    (18,058
    )
    
    
    
    
    
    
    (64,870
    )Property, plant and equipment, net
    
    
    
    
    
    
    34,308
    
    
    
    120,928
    
    
    
    
    
    
    
    155,236Investment in subsidiaries
    
    
    148,489
    
    
    
    
    
    
    
    
    
    
    
    (148,489
    )
    
    
    Deferred income taxes
    
    
    
    
    
    
    2,777
    
    
    
    
    
    
    
    (1,275
    )
    
    
    1,502Other non-current assets
    
    
    
    
    
    
    13,794
    
    
    
    10,283
    
    
    
    
    
    
    
    24,077Total assets
    
    $
    150,284
    
    
    $
    652,854
    
    
    $
    154,487
    
    
    $
    (151,280
    )
    
    $
    806,345Liabilities :Current liabilities:Accounts payable
    
    $
    84
    
    
    $
    128,758
    
    
    $
    
    
    
    $
    
    
    
    $
    128,842Bank overdrafts
    
    
    
    
    
    
    21,702
    
    
    
    
    
    
    
    
    
    
    
    21,702Accrued compensation
    
    
    663
    
    
    
    11,583
    
    
    
    
    
    
    
    
    
    
    
    12,246Deferred income taxes
    
    
    3
    
    
    
    
    
    
    
    
    
    
    
    (3
    )
    
    
    Other current liabilities
    
    
    
    
    
    
    24,421
    
    
    
    4,991
    
    
    
    
    
    
    
    29,412Intercompany payable
    
    
    274
    
    
    
    133
    
    
    
    1,106
    
    
    
    (1,513
    )
    
    
    Total current liabilities
    
    
    1,024
    
    
    
    186,597
    
    
    
    6,097
    
    
    
    (1,516
    )
    
    
    192,202Non-current liabilities :Long-term debt
    
    
    
    
    
    
    156,000
    
    
    
    295,000
    
    
    
    
    
    
    
    451,000Deferred income taxes
    
    
    
    
    
    
    
    
    
    
    1,275
    
    
    
    (1,275
    )
    
    
    Other long-term liabilities
    
    
    
    
    
    
    13,883
    
    
    
    
    
    
    
    
    
    
    
    13,883Total liabilities
    
    
    1,024
    
    
    
    356,480
    
    
    
    302,372
    
    
    
    (2,791
    )
    
    
    657,085Shareholders Equity/Parents Investment
    
    
    149,260
    
    
    
    296,374
    
    
    
    (147,885
    )
    
    
    (148.489
    )
    
    
    149,260Total liabilities and equity
    
    $
    150,284
    
    
    $
    652,854
    
    
    $
    154,487
    
    
    $
    (151,280
    )
    
    $
    806,345
  19




---



##### Table of Contents



BlueLinxBlueLinx
    
    
    CorporationHoldings
    
    
    and
    
    
    LLCInc.
    
    
    Subsidiaries
    
    
    Subsidiaries
    
    
    Eliminations
    
    
    ConsolidatedAssets:Current assets:Cash
    
    $
    3
    
    
    $
    15,699
    
    
    $
    57
    
    
    $
    
    
    
    $
    15,759Receivables
    
    
    
    
    
    
    263,176
    
    
    
    
    
    
    
    
    
    
    
    263,176Inventories
    
    
    
    
    
    
    335,887
    
    
    
    
    
    
    
    
    
    
    
    335,887Deferred income taxes
    
    
    
    
    
    
    12,277
    
    
    
    
    
    
    
    (78
    )
    
    
    12,199Other current assets
    
    
    271
    
    
    
    52,960
    
    
    
    
    
    
    
    
    
    
    
    53,231Intercompany receivable
    
    
    18,103
    
    
    
    611
    
    
    
    
    
    
    
    (18,714
    )
    
    
    Total current assets
    
    
    18,377
    
    
    
    680,610
    
    
    
    57
    
    
    
    (18,792
    )
    
    
    680,252Property, plant and equipment:Land and land improvements
    
    
    
    
    
    
    3,000
    
    
    
    54,295
    
    
    
    
    
    
    
    57,295Buildings
    
    
    
    
    
    
    7,390
    
    
    
    91,030
    
    
    
    
    
    
    
    98,420Machinery and equipment
    
    
    
    
    
    
    67,217
    
    
    
    
    
    
    
    
    
    
    
    67,217Construction in progress
    
    
    
    
    
    
    4,212
    
    
    
    
    
    
    
    
    
    
    
    4,212Property, plant and equipment, at cost
    
    
    
    
    
    
    81,819
    
    
    
    145,325
    
    
    
    
    
    
    
    227,144Accumulated depreciation
    
    
    
    
    
    
    (39,228
    )
    
    
    (15,474
    )
    
    
    
    
    
    
    (54,702
    )Property, plant and equipment, net
    
    
    
    
    
    
    42,591
    
    
    
    129,851
    
    
    
    
    
    
    
    172,442Investment in subsidiaries
    
    
    137,155
    
    
    
    
    
    
    
    
    
    
    
    (137,155
    )
    
    
    Non-current deferred income taxes
    
    
    
    
    
    
    4,327
    
    
    
    
    
    
    
    (1,699
    )
    
    
    2,628Other non-current assets
    
    
    
    
    
    
    22,822
    
    
    
    5,292
    
    
    
    
    
    
    
    28,114Total assets
    
    $
    155,532
    
    
    $
    750,350
    
    
    $
    135,200
    
    
    $
    (157,646
    )
    
    $
    883,436Liabilities:Current liabilities:Accounts payable
    
    $
    20
    
    
    $
    164,697
    
    
    $
    
    
    
    $
    
    
    
    $
    164,717Bank overdrafts
    
    
    
    
    
    
    37,152
    
    
    
    
    
    
    
    
    
    
    
    37,152Accrued compensation
    
    
    
    
    
    
    10,372
    
    
    
    
    
    
    
    
    
    
    
    10,372Deferred income taxes
    
    
    78
    
    
    
    
    
    
    
    
    
    
    
    (78
    )
    
    
    Other current liabilities
    
    
    
    
    
    
    15,145
    
    
    
    4,135
    
    
    
    
    
    
    
    19,280Intercompany payable
    
    
    611
    
    
    
    17,632
    
    
    
    471
    
    
    
    (18,714
    )
    
    
    Total current liabilities
    
    
    709
    
    
    
    244,998
    
    
    
    4,606
    
    
    
    (18,792
    )
    
    
    231,521Non-current liabilities:Long-term debt
    
    
    
    
    
    
    183,535
    
    
    
    295,000
    
    
    
    
    
    
    
    478,535Deferred income taxes
    
    
    
    
    
    
    
    
    
    
    1,699
    
    
    
    (1,699
    )
    
    
    Other non-current liabilities
    
    
    
    
    
    
    18,557
    
    
    
    
    
    
    
    
    
    
    
    18,557Total liabilities
    
    
    709
    
    
    
    447,090
    
    
    
    301,305
    
    
    
    (20,491
    )
    
    
    728,613Shareholders Equity/Parents Investment
    
    
    154,823
    
    
    
    303,260
    
    
    
    (166,105
    )
    
    
    (137,155
    )
    
    
    154,823Total liabilities and equity
    
    $
    155,532
    
    
    $
    750,350
    
    
    $
    135,200
    
    
    $
    (157,646
    )
    
    $
    883,436
  20




---



##### Table of Contents



BlueLinxHoldings
    
    
    BlueLinx
    
    
    LLCInc.
    
    
    Corporation
    
    
    Subsidiaries
    
    
    Eliminations
    
    
    ConsolidatedCash flows from operating activities:Net (loss) income
    
    $
    (6,586
    )
    
    $
    (7,631
    )
    
    $
    2,774
    
    
    $
    4,857
    
    
    $
    (6,586
    )Adjustments to reconcile net (loss) income to cash
provided by operations:Depreciation and amortization
    
    
    
    
    
    
    11,801
    
    
    
    3,210
    
    
    
    
    
    
    
    15,011Amortization of debt issue costs
    
    
    
    
    
    
    1,353
    
    
    
    470
    
    
    
    
    
    
    
    1,823Non-cash vacant property charges
    
    
    
    
    
    
    1,640
    
    
    
    
    
    
    
    
    
    
    
    1,640Deferred income tax benefit
    
    
    (75
    )
    
    
    (3,007
    )
    
    
    (424
    )
    
    
    
    
    
    
    (3,506
    )Share-based compensation expense
    
    
    
    
    
    
    2,163
    
    
    
    
    
    
    
    
    
    
    
    2,163Excess tax benefits from share-based compensation arrangements
    
    
    
    
    
    
    (76
    )
    
    
    
    
    
    
    
    
    
    
    (76
    )Equity in earnings of subsidiaries
    
    
    4,857
    
    
    
    
    
    
    
    
    
    
    
    (4,857
    )
    
    
    Changes in assets and liabilities:Receivables
    
    
    
    
    
    
    18,698
    
    
    
    
    
    
    
    
    
    
    
    18,698Inventories
    
    
    
    
    
    
    74,910
    
    
    
    
    
    
    
    
    
    
    
    74,910Accounts payable
    
    
    64
    
    
    
    (35,939
    )
    
    
    
    
    
    
    
    
    
    
    (35,875
    )Changes in other working capital
    
    
    382
    
    
    
    33,370
    
    
    
    (4,857
    )
    
    
    
    
    
    
    28,895Intercompany receivable
    
    
    16,864
    
    
    
    337
    
    
    
    
    
    
    
    (17,201
    )
    
    
    Intercompany payable
    
    
    (337
    )
    
    
    (17,499
    )
    
    
    635
    
    
    
    17,201
    
    
    
    Other
    
    
    
    
    
    
    2,225
    
    
    
    252
    
    
    
    
    
    
    
    2,477Net cash provided by operating activities
    
    
    15,169
    
    
    
    82,345
    
    
    
    2,060
    
    
    
    
    
    
    
    99,574Cash flows from investing activities:Investment in subsidiaries
    
    
    (15,684
    )
    
    
    
    
    
    
    
    
    
    
    15,684
    
    
    
    Property, plant and equipment investments
    
    
    
    
    
    
    (2,614
    )
    
    
    
    
    
    
    
    
    
    
    (2,614
    )Proceeds from sale of assets
    
    
    
    
    
    
    848
    
    
    
    
    
    
    
    
    
    
    
    848Net cash used in investing activities
    
    
    (15,684
    )
    
    
    (1,766
    )
    
    
    
    
    
    
    15,684
    
    
    
    (1,766
    )Cash flows from financing activities:Net transactions with Parent
    
    
    
    
    
    
    238
    
    
    
    15,446
    
    
    
    (15,684
    )
    
    
    Proceeds from stock options exercised
    
    
    434
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    434Excess tax benefits from share-based compensation arrangements
    
    
    76
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    76Net decrease in revolving credit facility
    
    
    
    
    
    
    (27,535
    )
    
    
    
    
    
    
    
    
    
    
    (27,535
    )Decrease in bank overdrafts
    
    
    
    
    
    
    (15,450
    )
    
    
    
    
    
    
    
    
    
    
    (15,450
    )Other
    
    
    6
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    6Net cash provided by (used in) financing activities
    
    
    516
    
    
    
    (42,747
    )
    
    
    15,446
    
    
    
    (15,684
    )
    
    
    (42,469
    )Increase in cash
    
    
    1
    
    
    
    37,832
    
    
    
    17,506
    
    
    
    
    
    
    
    55,339Balance, beginning of period
    
    
    3
    
    
    
    15,699
    
    
    
    57
    
    
    
    
    
    
    
    15,759Balance, end of period
    
    $
    4
    
    
    $
    53,531
    
    
    $
    17,563
    
    
    $
    
    
    
    $
    71,098
  21




---



##### 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 (used in) provided by 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 (used in) provided by 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
  22




---



##### 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;
    
    variations in the performance of the financial markets, including the credit markets,
especially as it impacts the availability of mortgages for home buyers;
    
    changes in the availability of capital and interest rates;
    
    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;
    
    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;
  23




---



##### Table of Contents




    
    our ability to agree to a new supply agreement with Georgia-Pacific after May 7, 2010, or
otherwise obtain replacement products on favorable economic terms;
    
    acts of war or terrorist activities; and
    
    the other factors described herein under Factors Affecting Future Results in our Annual
Report on Form 10-K for the year ended December 29, 2007 as filed with the SEC.
  Overview
 Background
  Industry Conditions
  Exit of California Custom Milling Operations
  Supply Agreement with Georgia-Pacific
    24




---



##### Table of Contents



Selected Factors Affecting Our Operating Results
   Fiscal
    
    
    Fiscal
    
    
    Fiscal
    
    
    Fiscal
    
    
    Fiscal
    
    
    FiscalQ3 2008
    
    
    Q3 2007
    
    
    2008 YTD
    
    
    2007 YTD
    
    
    2007
    
    
    2006(Dollars in millions)(Unaudited)Sales by CategoryStructural Products
    
    $
    366
    
    
    $
    571
    
    
    $
    1,181
    
    
    $
    1,689
    
    
    $
    2,098
    
    
    $
    2,788Specialty Products
    
    
    376
    
    
    
    463
    
    
    
    1,133
    
    
    
    1,420
    
    
    
    1,802
    
    
    
    2,197Other (1)
    
    
    (15
    )
    
    
    (18
    )
    
    
    (36
    )
    
    
    (54
    )
    
    
    (66
    )
    
    
    (86
    )Total Sales
    
    $
    727
    
    
    $
    1,016
    
    
    $
    2,278
    
    
    $
    3,055
    
    
    $
    3,834
    
    
    $
    4,899Sales VariancesUnit Volume $ Change
    
    $
    (337
    )
    
    $
    (177
    )
    
    $
    (868
    )
    
    $
    (711
    )
    
    $
    (896
    )
    
    $
    (398
    )Price/Other (1)
    
    
    48
    
    
    
    (11
    )
    
    
    91
    
    
    
    (193
    )
    
    
    (169
    )
    
    
    (325
    )Total $ Change
    
    $
    (289
    )
    
    $
    (188
    )
    
    $
    (777
    )
    
    $
    (904
    )
    
    $
    (1,065
    )
    
    $
    (723
    )Unit Volume % Change
    
    
    (32.6
    )%
    
    
    (14.5
    )%
    
    
    (27.9
    )%
    
    
    (17.7
    )%
    
    
    (18.0
    )%
    
    
    (7.0
    )%Price/Other (1)
    
    
    4.1
    %
    
    
    (1.1
    )%
    
    
    2.5
    %
    
    
    (5.1
    )%
    
    
    (3.7
    )%
    
    
    (5.9
    )%Total % Change
    
    
    (28.5
    )%
    
    
    (15.6
    )%
    
    
    (25.4
    )%
    
    
    (22.8
    )%
    
    
    (21.7
    )%
    
    
    (12.9
    )%
 
 (1)
    
    Other includes unallocated allowances and discounts.  25




---



##### Table of Contents



Fiscal
    
    
    Fiscal
    
    
    Fiscal
    
    
    Fiscal
    
    
    Fiscal
    
    
    FiscalQ3 2008
    
    
    Q3 2007
    
    
    2008 YTD
    
    
    2007 YTD
    
    
    2007
    
    
    2006(Dollars in millions)(Unaudited)Gross Margin $s by
CategoryStructural Products
    
    $
    36
    
    
    $
    44
    
    
    $
    121
    
    
    $
    145
    
    
    $
    173
    
    
    $
    194Specialty Products
    
    
    54
    
    
    
    64
    
    
    
    162
    
    
    
    197
    
    
    
    238
    
    
    
    308Other (1)
    
    
    (7
    )
    
    
    (5
    )
    
    
    (15
    )
    
    
    (16
    )
    
    
    (19
    )
    
    
    (22
    )Total Gross Margin $s
    
    $
    83
    
    
    $
    103
    
    
    $
    268
    
    
    $
    326
    
    
    $
    392
    
    
    $
    480Gross Margin %s by CategoryStructural Products
    
    
    9.9
    %
    
    
    7.6
    %
    
    
    10.2
    %
    
    
    8.6
    %
    
    
    8.2
    %
    
    
    7.0
    %Specialty Products
    
    
    14.3
    %
    
    
    13.8
    %
    
    
    14.2
    %
    
    
    13.9
    %
    
    
    13.2
    %
    
    
    14.0
    %Other (1)
    
    NA
    
    
    NA
    
    
    NA
    
    
    NA
    
    
    NA
    
    
    NATotal Gross Margin %s
    
    
    11.5
    %
    
    
    10.1
    %
    
    
    11.8
    %
    
    
    10.7
    %
    
    
    10.2
    %
    
    
    9.8
    %Change in Unit Volume by ProductStructural Products
    
    
    (40.3
    )%
    
    
    (14.8
    )%
    
    
    (32.9
    )%
    
    
    (18.4
    )%
    
    
    (19.2
    )%
    
    
    (11.8
    )%Specialty Products
    
    
    (23.1
    )%
    
    
    (14.2
    )%
    
    
    (22.0
    )%
    
    
    (16.8
    )%
    
    
    (16.4
    )%
    
    
    1.0
    %Total Change in Unit Volume %s
    
    
    (32.6
    )%
    
    
    (14.5
    )%
    
    
    (27.9
    )%
    
    
    (17.7
    )%
    
    
    (18.0
    )%
    
    
    (7.0
    )%
 
 (1)
    
    Other includes unallocated allowances and discounts.  Fiscal
    
    
    Fiscal
    
    
    Fiscal
    
    
    Fiscal
    
    
    Fiscal
    
    
    FiscalQ3 2008
    
    
    Q3 2007
    
    
    2008 YTD
    
    
    2007 YTD
    
    
    2007
    
    
    2006(Dollars in millions)(Unaudited)Sales by ChannelWarehouse/Reload
    
    $
    540
    
    
    $
    731
    
    
    $
    1,673
    
    
    $
    2,196
    
    
    $
    2,763
    
    
    $
    3,326Direct
    
    
    202
    
    
    
    303
    
    
    
    641
    
    
    
    913
    
    
    
    1,137
    
    
    
    1,659Other (1)
    
    
    (15
    )
    
    
    (18
    )
    
    
    (36
    )
    
    
    (54
    )
    
    
    (66
    )
    
    
    (86
    )Total
    
    $
    727
    
    
    $
    1,016
    
    
    $
    2,278
    
    
    $
    3,055
    
    
    $
    3,834
    
    
    $
    4,899Gross Margin by ChannelWarehouse/Reload
    
    $
    77
    
    
    $
    91
    
    
    $
    243
    
    
    $
    288
    
    
    $
    344
    
    
    $
    407Direct
    
    
    13
    
    
    
    17
    
    
    
    40
    
    
    
    54
    
    
    
    67
    
    
    
    95Other (1)
    
    
    (7
    )
    
    
    (5
    )
    
    
    (15
    )
    
    
    (16
    )
    
    
    (19
    )
    
    
    (22
    )Total
    
    $
    83
    
    
    $
    103
    
    
    $
    268
    
    
    $
    326
    
    
    $
    392
    
    
    $
    480
 Fiscal
    
    
    Fiscal
    
    
    Fiscal
    
    
    Fiscal
    
    
    Fiscal
    
    
    FiscalQ3 2008
    
    
    Q3 2007
    
    
    2008 YTD
    
    
    2007 YTD
    
    
    2007
    
    
    2006(Dollars in millions)(Unaudited)Gross Margin % by ChannelWarehouse/Reload
    
    
    14.3
    %
    
    
    12.4
    %
    
    
    14.5
    %
    
    
    13.1
    %
    
    
    12.5
    %
    
    
    12.2
    %Direct
    
    
    6.4
    %
    
    
    5.6
    %
    
    
    6.2
    %
    
    
    5.9
    %
    
    
    5.9
    %
    
    
    5.7
    %Other (1)
    
    NA
    
    
    NA
    
    
    NA
    
    
    NA
    
    
    NA
    
    
    NATotal
    
    
    11.5
    %
    
    
    10.1
    %
    
    
    11.8
    %
    
    
    10.7
    %
    
    
    10.2
    %
    
    
    9.8
    %
 
 (1)
    
    Other includes unallocated allowances and adjustments. Fiscal Year
   26




---



##### Table of Contents



Results of Operations
 Third Quarter of Fiscal 2008 Compared to Third Quarter of Fiscal 2007
  Period from
    
    
    
    
    
    
    Period fromJune 29, 2008
    
    
    % of
    
    
    July 1, 2007
    
    
    % ofto
    
    
    Net
    
    
    to
    
    
    NetSeptember 27, 2008
    
    
    Sales
    
    
    September 29, 2007
    
    
    Sales(Unaudited)
    
    
    
    
    
    
    (Unaudited)(Dollars in thousands)Net sales
    
    $
    726,756
    
    
    
    100.0
    %
    
    $
    1,015,888
    
    
    
    100.0
    %Gross profit
    
    
    83,249
    
    
    
    11.5
    %
    
    
    102,810
    
    
    
    10.1
    %Selling, general & administrative
    
    
    73,793
    
    
    
    10.2
    %
    
    
    84,826
    
    
    
    8.3
    %Depreciation and amortization
    
    
    4,940
    
    
    
    0.7
    %
    
    
    5,106
    
    
    
    0.5
    %Operating income
    
    
    4,516
    
    
    
    0.6
    %
    
    
    12,878
    
    
    
    1.3
    %Interest expense
    
    
    8,791
    
    
    
    1.2
    %
    
    
    11,352
    
    
    
    1.1
    %Other expense, net
    
    
    65
    
    
    
    0.0
    %
    
    
    7
    
    
    
    0.0
    %(Loss) income before (benefit from) provision for income taxes
    
    
    (4,340
    )
    
    
    (0.6
    )%
    
    
    1,519
    
    
    
    0.1
    %(Benefit from) provision for income taxes
    
    
    (1,746
    )
    
    
    (0.2
    )%
    
    
    629
    
    
    
    0.1
    %Net (loss) income
    
    $
    (2,594
    )
    
    
    (0.4
    )%
    
    $
    890
    
    
    
    0.1
    %
 Net Sales.
 Gross Profit.
 Selling, General, and Administrative Expenses.
 Depreciation and Amortization.
 Operating Income.
 Interest Expense, net.
  27




---



##### Table of Contents



(Benefit from) Provision for Income Taxes.
 Net(Loss) Income.
  Year-to-Date Fiscal 2008 Compared to Year-to-Date Fiscal 2007
  Period from
    
    
    
    
    
    
    Period fromDecember 30, 2007
    
    
    % of
    
    
    December 31, 2006
    
    
    % ofto
    
    
    Net
    
    
    to
    
    
    NetSeptember 27, 2008
    
    
    Sales
    
    
    September 29, 2007
    
    
    Sales(Unaudited)
    
    
    
    
    
    
    (Unaudited)(Dollars in thousands)Net sales
    
    $
    2,278,185
    
    
    
    100.0
    %
    
    $
    3,054,992
    
    
    
    100.0
    %Gross profit
    
    
    268,487
    
    
    
    11.8
    %
    
    
    325,803
    
    
    
    10.7
    %Selling, general & administrative
    
    
    235,655
    
    
    
    10.3
    %
    
    
    266,640
    
    
    
    8.7
    %Depreciation and amortization
    
    
    15,011
    
    
    
    0.7
    %
    
    
    15,840
    
    
    
    0.5
    %Operating income
    
    
    17,821
    
    
    
    0.8
    %
    
    
    43,323
    
    
    
    1.4
    %Interest expense
    
    
    27,530
    
    
    
    1.2
    %
    
    
    33,756
    
    
    
    1.1
    %Other expense (income), net
    
    
    385
    
    
    
    0.0
    %
    
    
    (601
    )
    
    
    0.0
    %(Loss) income before (benefit from) provision for income taxes
    
    
    (10,094
    )
    
    
    (0.4
    )%
    
    
    10,168
    
    
    
    0.3
    %(Benefit from) provision for income taxes
    
    
    (3,508
    )
    
    
    (0.2
    )%
    
    
    4,033
    
    
    
    0.1
    %Net (loss) income
    
    $
    (6,586
    )
    
    
    (0.3
    )%
    
    $
    6,135
    
    
    
    0.2
    %
 Net Sales.
 Gross Profit.
 Selling, General, and Administrative Expenses.
  28




---



##### Table of Contents



Depreciation and Amortization.
 Operating Income.
 Interest Expense, net.
 (Benefit from) Provision for Income Taxes.
 Net (Loss) income
  Seasonality
  Liquidity and Capital Resources
   Form 10-K.
  29




---



##### Table of Contents



September 27, 2008
    
    
    December 29, 2007(Dollars in thousands)(Unaudited)Working capital
    
    $
    433,328
    
    
    $
    448,731
 Period from
    
    
    Period fromDecember 30, 2007
    
    
    December 31, 2006to
    
    
    toSeptember 27, 2008
    
    
    September 29, 2007(Dollars in thousands)(Unaudited)Cash flows provided by (used in) operating activities
    
    $
    99,574
    
    
    $
    (18,905
    )Cash flows used in investing activities
    
    
    (1,766
    )
    
    
    (7,608
    )Cash flows (used in) provided by financing activities
    
    $
    (42,469
    )
    
    $
    24,471
 Working Capital
  Operating Activities
  Investing Activities
    Financing Activities
   30




---



##### Table of Contents



Debt and Credit Sources
      Contractual Obligations
  Critical Accounting Policies
   Revenue Recognition
   31




---



##### Table of Contents




    
    We are the primary obligor responsible for fulfillment;
    
    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
   Inventories
    32




---



##### Table of Contents



Consideration Received from Vendors and Paid to Customers
  Impairment of Long-Lived Assets
   Income Taxes
 Accounting for Income
Taxes
    33




---



##### Table of Contents



Accounting for Uncertainty in Income Taxes
 Exit Costs
 Accounting for Costs Associated with Exit or Disposal
Activities,
 Recently Issued Accounting Pronouncements
 The Hierarchy of Generally Accepted Accounting
Principles The Meaning of Present Fairly in Conformity with
Generally Accepted Accounting Principles
 Determining
Whether Instruments Granted in Share-Based Payment Transactions are
Participating Securities Earnings Per Share
 Determination of the
Useful Life of Intangible Assets Goodwill and Other Intangible Assets
 Disclosures about Derivative Instruments and Hedging Activities
 An Amendment of SFAS No. 133
  34




---



##### Table of Contents



Noncontrolling Interests in Consolidated
Financial Statements
  The Fair Value Option for Financial Assets and
Financial Liabilities
 Fair Value
Measurements Application of FASB Statement No. 157 to FASB Statement No. 13 and Other
Accounting Pronouncements That Address Fair Value Measurements for Purposes of Lease Classification
or Measurement under Statement 13 Partial Deferral
of the Effective Date of Statement 157 Determining the Fair Value
of a Financial Asset When the Market for That Asset Is Not Active
  Level 1
    
    Unadjusted quoted prices in active markets for identical assets or
liabilities.Level 2
    
    Unadjusted quoted prices in active markets for similar assets or
liabilities, orUnadjusted quoted prices for identical or similar assets or
liabilities in markets that are not active, orInputs other than quoted prices that are observable for the asset
or liability.Level 3
    
    Unobservable inputs for the asset or liability.
  35




---



##### 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
   36




---



##### Table of Contents



ITEM 1A. RISK FACTORS
  Financial Markets
    37




---



##### 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 2002.99.1
    
    
    Fourth Amendment to the BlueLinx Corporation Salaried Savings Plan, dated as of September 2, 2008.99.2
    
    
    Fourth Amendment to the BlueLinx Corporation Hourly Savings Plan, dated as of September 2, 2008.
  38




---



##### Table of Contents



SIGNATURES
  BlueLinx Holdings Inc.(Registrant)Date: November 5, 2008
    
    /s/ Howard D. Goforth

Howard D. GoforthChief Financial Officer and Treasurer(Principal Accounting and Financial Officer)
  39




---



##### 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 2002.99.1
    
    
    Fourth Amendment to the BlueLinx Corporation Salaried Savings Plan, dated as of September 2, 2008.99.2
    
    
    Fourth Amendment to the BlueLinx Corporation Hourly Savings Plan, dated as of September 2, 2008.
  40