##### 



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 June 30, 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
(State of Incorporation)
    
    77-0627356
(I.R.S. Employer Identification No.)4300 Wildwood Parkway, Atlanta, Georgia
(Address of principal executive offices)
    
    30339
(Zip Code)
 (770) 953-7000
 þ o
  o þ o
 o þ




---



##### 










BLUELINX HOLDINGS INC.


Form 10-Q


For the Quarterly Period Ended June 30, 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 RiskItem 4. Controls and ProceduresPART II. OTHER INFORMATIONItem 1. Legal Proceedings
    
    
    
    31Item 1A. Risk Factors
    
    
    
    32Item 4. Submission of Matters to a Vote of Security Holders
    
    
    
    32Item 6. Exhibits
    
    
    
    32Signatures
    
    
    
    33Exhibit Index
    
    
    
    34




2



---



##### 



PART I. FINANCIAL INFORMATION
 
 ITEM 1. FINANCIAL STATEMENTS
 BLUELINX HOLDINGS INC.
 
 CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
 (In thousands, except per share data)
(unaudited)
 Second QuarterPeriod from
    
    
    Period fromApril 1, 2007
    
    
    April 2, 2006to
    
    
    toJune 30, 2007
    
    
    July 1, 2006Net sales
    
    $
    1,081,990
    
    
    $
    1,378,950Cost of sales
    
    
    962,752
    
    
    
    1,242,507Gross profit
    
    
    119,238
    
    
    
    136,443Operating expenses:Selling, general, and administrative
    
    
    93,346
    
    
    
    98,122Depreciation and amortization
    
    
    5,335
    
    
    
    5,063Total operating expenses
    
    
    98,681
    
    
    
    103,185Operating income
    
    
    20,557
    
    
    
    33,258Non-operating expenses:Interest expense
    
    
    11,798
    
    
    
    12,262Charges associated with mortgage refinancing
    
    
    
    
    
    
    4,864Other income, net
    
    
    (225
    )
    
    
    (69
    )Income before provision for income taxes
    
    
    8,984
    
    
    
    16,201Provision for income taxes
    
    
    3,550
    
    
    
    6,590Net income
    
    $
    5,434
    
    
    $
    9,611Basic weighted average number of common shares outstanding
    
    
    30,848
    
    
    
    30,649Basic net income per share applicable to common stock
    
    $
    0.18
    
    
    $
    0.31Diluted weighted average number of common shares outstanding
    
    
    30,995
    
    
    
    30,790Diluted net income per share applicable to common stock
    
    $
    0.18
    
    
    $
    0.31Dividends declared per share of common stock
    
    $
    0.125
    
    
    $
    0.125
  3




---



##### 



BLUELINX HOLDINGS INC.
 
 CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
 (In thousands, except per share data)
(unaudited)
 Six Months EndedPeriod from
    
    
    Period fromDecember 31, 2006
    
    
    January 1, 2006to
    
    
    toJune 30, 2007
    
    
    July 1, 2006Net sales
    
    $
    2,039,104
    
    
    $
    2,755,556Cost of sales
    
    
    1,816,111
    
    
    
    2,489,161Gross profit
    
    
    222,993
    
    
    
    266,395Operating expenses:Selling, general, and administrative
    
    
    181,814
    
    
    
    195,389Depreciation and amortization
    
    
    10,734
    
    
    
    10,106Total operating expenses
    
    
    192,548
    
    
    
    205,495Operating income
    
    
    30,445
    
    
    
    60,900Non-operating expenses:Interest expense
    
    
    22,404
    
    
    
    23,459Charges associated with mortgage refinancing
    
    
    
    
    
    
    4,864Other (income) expense, net
    
    
    (608
    )
    
    
    12Income before provision for income taxes
    
    
    8,649
    
    
    
    32,565Provision for income taxes
    
    
    3,404
    
    
    
    13,160Net income
    
    $
    5,245
    
    
    $
    19,405Basic weighted average number of common shares outstanding
    
    
    30,824
    
    
    
    30,533Basic net income per share applicable to common stock
    
    $
    0.17
    
    
    $
    0.64Diluted weighted average number of common shares outstanding
    
    
    30,945
    
    
    
    30,751Diluted net income per share applicable to common stock
    
    $
    0.17
    
    
    $
    0.63Dividends declared per share of common stock
    
    $
    0.25
    
    
    $
    0.25
  4




---



##### 



BLUELINX HOLDINGS INC.
 CONDENSED CONSOLIDATED BALANCE SHEETS
 (In thousands, except per share data)
 June 30, 2007
    
    
    December 30, 2006(unaudited)Assets:Current assets:Cash
    
    $
    24,756
    
    
    $
    27,042Receivables, net
    
    
    405,798
    
    
    
    307,543Inventories, net
    
    
    470,222
    
    
    
    410,686Deferred income taxes
    
    
    9,908
    
    
    
    9,024Other current assets
    
    
    39,911
    
    
    
    44,948Total current assets
    
    
    950,595
    
    
    
    799,243Property, plant, and equipment:Land and land improvements
    
    
    57,172
    
    
    
    56,985Buildings
    
    
    96,763
    
    
    
    95,814Machinery and equipment
    
    
    66,732
    
    
    
    61,955Construction in progress
    
    
    4,515
    
    
    
    2,025Property, plant, and equipment, at cost
    
    
    225,182
    
    
    
    216,779Accumulated depreciation
    
    
    (46,544
    )
    
    
    (38,530
    )Property, plant, and equipment, net
    
    
    178,638
    
    
    
    178,249Other non-current assets
    
    
    23,238
    
    
    
    26,870Total assets
    
    $
    1,152,471
    
    
    $
    1,004,362Liabilities:Current liabilities:Accounts payable
    
    $
    260,318
    
    
    $
    195,815Bank overdrafts
    
    
    34,563
    
    
    
    50,241Accrued compensation
    
    
    10,306
    
    
    
    8,574Current maturities of long-term debt
    
    
    103,816
    
    
    
    9,743Other current liabilities
    
    
    16,644
    
    
    
    14,633Total current liabilities
    
    
    425,647
    
    
    
    279,006Non-current liabilities:Long-term debt
    
    
    522,719
    
    
    
    522,719Deferred income taxes
    
    
    1,870
    
    
    
    1,101Other long-term liabilities
    
    
    10,842
    
    
    
    12,137Total liabilities
    
    
    961,078
    
    
    
    814,963Shareholders Equity:Common Stock, $0.01 par value, 100,000,000 shares authorized; 31,213,712 and 30,909,630 shares issued and outstanding at June 30, 2007 and December 30, 2006, respectively
    
    
    312
    
    
    
    309Additional paid-in-capital
    
    
    140,471
    
    
    
    138,066Accumulated other comprehensive income
    
    
    2,537
    
    
    
    412Retained earnings
    
    
    48,073
    
    
    
    50,612Total shareholders equity
    
    
    191,393
    
    
    
    189,399Total liabilities and shareholders equity
    
    $
    1,152,471
    
    
    $
    1,004,362
  5




---



##### 



BLUELINX HOLDINGS INC.
 
 CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
 (In thousands)
(unaudited)
 Six Months EndedPeriod
    
    
    Periodfrom December 31,
    
    
    from January 1,2006 to
    
    
    2006 toJune 30, 2007
    
    
    July 1, 2006Cash flows from operating activities:Net income
    
    $
    5,245
    
    
    $
    19,405Adjustments to reconcile net income to cash used in operations:Depreciation and amortization
    
    
    10,734
    
    
    
    10,106Amortization of debt issue costs
    
    
    1,215
    
    
    
    1,409Charges associated with mortgage refinancing
    
    
    
    
    
    
    4,864Deferred income tax benefit
    
    
    (1,563
    )
    
    
    (1,733
    )Share-based compensation expense
    
    
    2,227
    
    
    
    1,246Excess tax benefits from share-based compensation arrangements
    
    
    (60
    )
    
    
    (863
    )Changes in assets and liabilities:Receivables
    
    
    (98,255
    )
    
    
    (70,028
    )Inventories
    
    
    (59,536
    )
    
    
    (59,093
    )Accounts payable
    
    
    64,503
    
    
    
    (13,733
    )Changes in other working capital
    
    
    8,840
    
    
    
    (5,515
    )Other
    
    
    2,278
    
    
    
    498Net cash used in operating activities
    
    
    (64,372
    )
    
    
    (113,437
    )Cash flows from investing activities:Property, plant and equipment investments
    
    
    (10,027
    )
    
    
    (2,785
    )Proceeds from sale of assets
    
    
    1,086
    
    
    
    332Net cash used in investing activities
    
    
    (8,941
    )
    
    
    (2,453
    )Cash flows from financing activities:Proceeds from stock options exercised
    
    
    323
    
    
    
    1,483Excess tax benefits from share-based compensation arrangements
    
    
    60
    
    
    
    863Net increase in revolving credit facility
    
    
    94,073
    
    
    
    5,512Proceeds from new mortgage
    
    
    
    
    
    
    295,000Debt financing costs
    
    
    
    
    
    
    (5,953
    )Retirement of old mortgage
    
    
    
    
    
    
    (165,000
    )Prepayment fees with old mortgage
    
    
    
    
    
    
    (2,475
    )Decrease in bank overdrafts
    
    
    (15,678
    )
    
    
    (3,034
    )Common stock dividends paid
    
    
    (7,784
    )
    
    
    (7,680
    )Other
    
    
    33
    
    
    
    Net cash provided by financing activities
    
    
    71,027
    
    
    
    118,716Increase (decrease) in cash
    
    
    (2,286
    )
    
    
    2,826Balance, beginning of period
    
    
    27,042
    
    
    
    24,320Balance, end of period
    
    $
    24,756
    
    
    $
    27,146
  6




---



##### 



BLUELINX HOLDINGS INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
JUNE 30, 2007
 1. Basis of Presentation and Background
 Basis of Presentation
     2. Summary of Significant Accounting Policies
 Earnings per Common Share
   Second Quarter
    
    
    Six Months EndedPeriod from
    
    
    Period from
    
    
    Period from
    
    
    Period fromApril 1, 2007 to
    
    
    April 2, 2006 to
    
    
    December 31, 2006
    
    
    January 1, 2006 toJune 30, 2007
    
    
    July 1, 2006
    
    
    to June 30, 2007
    
    
    July 1, 2006Basic weighted average shares outstanding
    
    
    30,848,349
    
    
    
    30,649,044
    
    
    
    30,824,416
    
    
    
    30,533,267Dilutive effect of stock-based awards
    
    
    146,568
    
    
    
    140,783
    
    
    
    120,153
    
    
    
    218,000Diluted weighted average shares outstanding
    
    
    30,994,917
    
    
    
    30,789,827
    
    
    
    30,944,569
    
    
    
    30,751,267
 Common Stock Dividends
  7




---



##### 



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




---



##### 



Period from December 31, 2006 to June 30, 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.   Period fromApril 2, 2006 toJuly 1, 2006Time-BasedOptions*Risk free interest rate
    
    
    4.92
    %Expected dividend yield
    
    
    3.57
    %Expected life
    
    
    7
    yearsExpected volatility
    
    
    50
    %Weighted average fair value
    
    $
    5.64
 9




---



##### 



*
    
    Exercise price equaled the market price at date of grant.  Period from January 1, 2006 to July 1, 2006Time-Based
    
    Time-Based
    
    Performance-BasedOptions*
    
    Options**
    
    Options***Risk free interest rate
    
    
    4.34
    %
    
    
    4.73
    %
    
    
    4.60
    %Expected dividend yield
    
    
    4.44
    %
    
    
    3.85
    %
    
    
    3.19
    %Expected life
    
    
    7
    years
    
    
    7
    years
    
    
    1
    yearExpected volatility
    
    
    50
    %
    
    
    50
    %
    
    
    50
    %Weighted average fair value
    
    $
    3.68
    
    
    $
    5.12
    
    
    $
    11.48
 
 *
    
    Exercise price exceeded market price at date of grant.**
    
    Exercise price equaled market price at date of grant.***
    
    Exercise price was 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
    
    
    (86,066
    )
    
    
    3.75Options forfeited
    
    
    (15,454
    )
    
    
    3.75Options outstanding at June 30, 2007
    
    
    1,776,386
    
    
    
    11.64Options exercisable at June 30, 2007
    
    
    299,701
    
    
    $
    13.16
 10




---



##### 



Outstanding
    
    
    ExercisableWeighted
    
    
    
    
    
    
    
    
    
    
    WeightedAverage
    
    
    Remaining
    
    
    
    
    
    
    AverageNumber of
    
    
    Exercise
    
    
    Contractual Life
    
    
    Number of
    
    
    ExercisePrice Range
    
    Options
    
    
    Price
    
    
    (in Years)
    
    
    Options
    
    
    Price$3.75
    
    
    281,369
    
    
    $
    3.75
    
    
    
    0.91
    
    
    
    
    
    
    $
    $10.29 - $15.10
    
    
    1,495,017
    
    
    
    13.13
    
    
    
    8.64
    
    
    
    299,701
    
    
    
    13.161,776,386
    
    
    
    
    
    
    
    
    
    
    
    299,701
  Performance Shares
    
    
    Restricted Stock
    
    
    Restricted Stock UnitsWeighted
    
    
    
    
    
    
    Weighted
    
    
    
    
    
    
    WeightedAverage Fair
    
    
    
    
    
    
    Average Fair
    
    
    
    
    
    
    Average FairNumber Awards
    
    
    Value
    
    
    Number Awards
    
    
    Value
    
    
    Number 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
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (11,750
    )
    
    
    14.01Outstanding at June 30, 2007
    
    
    245,025
    
    
    $
    10.46
    
    
    
    365,475
    
    
    $
    11.92
    
    
    
    205,125
    
    
    $
    12.55
   3. Income Taxes
  4. Comprehensive Income
  Second QuarterPeriod from
    
    
    Period fromApril 1, 2007
    
    
    April 2, 2006to
    
    
    toJune 30, 2007
    
    
    July 1, 2006Net income
    
    $
    5,434
    
    
    $
    9,611Other comprehensive income:Foreign currency translation, net of taxes
    
    
    921
    
    
    
    367Unrealized gain from cash flow hedge, net of taxes
    
    
    1,557
    
    
    
    394Comprehensive income
    
    $
    7,912
    
    
    $
    10,372
 11




---



##### 



Six Months EndedPeriod from
    
    
    Period fromDecember 31, 2006
    
    
    January 1, 2006to
    
    
    toJune 30, 2007
    
    
    July 1, 2006Net income
    
    $
    5,245
    
    
    $
    19,405Other comprehensive income:Foreign currency translation, net of taxes
    
    
    913
    
    
    
    340Unrealized gain from cash flow hedge, net of taxes
    
    
    1,284
    
    
    
    394Unrealized loss from adoption of FIN 48, net of taxes
    
    
    (72
    )
    
    
    Comprehensive income
    
    $
    7,370
    
    
    $
    20,139
 5. Employee Benefits
 Defined Benefit Pension Plans
   Second QuarterPeriod from April 1,
    
    
    Period from April 2, 20062007 to June 30, 2007
    
    
    to July 1, 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
    
    
    $
    384
 Six Months EndedPeriod from December 31,
    
    
    Period from January 1, 20062006 to June 30, 2007
    
    
    to July 1, 2006(In thousands)Service cost
    
    $
    1,252
    
    
    $
    1,344Interest cost on projected benefit obligation
    
    
    2,108
    
    
    
    2,022Expected return on plan assets
    
    
    (2,712
    )
    
    
    (2,600
    )Amortization of unrecognized prior service cost
    
    
    2
    
    
    
    1Net periodic pension cost
    
    $
    650
    
    
    $
    767
 6. Revolving Credit Facility
    12




---



##### 



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
  13




---



##### 



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




---



##### 



BlueLinxHoldings
    
    
    BlueLinx
    
    
    LLCInc.
    
    
    Corporation
    
    
    Subsidiaries
    
    
    Eliminations
    
    
    ConsolidatedNet sales
    
    $
    
    
    
    $
    1,081,990
    
    
    $
    7,518
    
    
    $
    (7,518
    )
    
    $
    1,081,990Cost of sales
    
    
    
    
    
    
    962,752
    
    
    
    
    
    
    
    
    
    
    
    962,752Gross profit
    
    
    
    
    
    
    119,238
    
    
    
    7,518
    
    
    
    (7,518
    )
    
    
    119,238Operating expenses:Selling, general and administrative
    
    
    279
    
    
    
    100,459
    
    
    
    126
    
    
    
    (7,518
    )
    
    
    93,346Depreciation and amortization
    
    
    
    
    
    
    4,276
    
    
    
    1,059
    
    
    
    
    
    
    
    5,335Total operating expenses
    
    
    279
    
    
    
    104,735
    
    
    
    1,185
    
    
    
    (7,518
    )
    
    
    98,681Operating income (loss)
    
    
    (279
    )
    
    
    14,503
    
    
    
    6,333
    
    
    
    
    
    
    
    20,557Non-operating expenses:Interest expense
    
    
    
    
    
    
    6,905
    
    
    
    4,893
    
    
    
    
    
    
    
    11,798Other expense (income), net
    
    
    
    
    
    
    (219
    )
    
    
    (6
    )
    
    
    
    
    
    
    (225
    )Income before provision for (benefit from) income taxes
    
    
    (279
    )
    
    
    7,817
    
    
    
    1,446
    
    
    
    
    
    
    
    8,984Provision for (benefit from) income taxes
    
    
    (109
    )
    
    
    3,095
    
    
    
    564
    
    
    
    
    
    
    
    3,550Equity in income (loss) of subsidiaries
    
    
    5,604
    
    
    
    
    
    
    
    
    
    
    
    (5,604
    )
    
    
    Net income (loss)
    
    $
    5,434
    
    
    $
    4,722
    
    
    $
    882
    
    
    $
    (5,604
    )
    
    $
    5,434
  BlueLinxHoldings
    
    
    BlueLinx
    
    
    LLCInc.
    
    
    Corporation
    
    
    Subsidiaries
    
    
    Eliminations
    
    
    ConsolidatedNet sales
    
    $
    
    
    
    $
    1,378,950
    
    
    $
    5,556
    
    
    $
    (5,556
    )
    
    $
    1,378,950Cost of sales
    
    
    
    
    
    
    1,242,507
    
    
    
    
    
    
    
    
    
    
    
    1,242,507Gross profit
    
    
    
    
    
    
    136,443
    
    
    
    5,556
    
    
    
    (5,556
    )
    
    
    136,443Operating expenses:Selling, general and administrative
    
    
    470
    
    
    
    103,010
    
    
    
    198
    
    
    
    (5,556
    )
    
    
    98,122Depreciation and amortization
    
    
    
    
    
    
    4,005
    
    
    
    1,058
    
    
    
    
    
    
    
    5,063Total operating expenses
    
    
    470
    
    
    
    107,015
    
    
    
    1,256
    
    
    
    (5,556
    )
    
    
    103,185Operating income (loss)
    
    
    (470
    )
    
    
    29,428
    
    
    
    4,300
    
    
    
    
    
    
    
    33,258Non-operating expenses:Interest expense
    
    
    
    
    
    
    8,599
    
    
    
    3,663
    
    
    
    
    
    
    
    12,262Charges associated with mortgage refinancing
    
    
    
    
    
    
    
    
    
    
    4,864
    
    
    
    
    
    
    
    4,864Other expense (income), net
    
    
    
    
    
    
    (56
    )
    
    
    (13
    )
    
    
    
    
    
    
    (69
    )Income before provision for (benefit from) income taxes
    
    
    (470
    )
    
    
    20,885
    
    
    
    (4,214
    )
    
    
    
    
    
    
    16,201Provision for (benefit from) income taxes
    
    
    (183
    )
    
    
    8,416
    
    
    
    (1,643
    )
    
    
    
    
    
    
    6,590Equity in income (loss) of subsidiaries
    
    
    9,898
    
    
    
    
    
    
    
    
    
    
    
    (9,898
    )
    
    
    Net income (loss)
    
    $
    9,611
    
    
    $
    12,469
    
    
    $
    (2,571
    )
    
    $
    (9,898
    )
    
    $
    9,611
 15




---



##### 



BlueLinxHoldings
    
    
    BlueLinx
    
    
    LLCInc.
    
    
    Corporation
    
    
    Subsidiaries
    
    
    Eliminations
    
    
    ConsolidatedNet sales
    
    $
    
    
    
    $
    2,039,104
    
    
    $
    15,036
    
    
    $
    (15,036
    )
    
    $
    2,039,104Cost of sales
    
    
    
    
    
    
    1,816,111
    
    
    
    
    
    
    
    
    
    
    
    1,816,111Gross profit
    
    
    
    
    
    
    222,993
    
    
    
    15,036
    
    
    
    (15,036
    )
    
    
    222,993Operating expenses:Selling, general and administrative
    
    
    716
    
    
    
    195,891
    
    
    
    243
    
    
    
    (15,036
    )
    
    
    181,814Depreciation and amortization
    
    
    
    
    
    
    8,618
    
    
    
    2,116
    
    
    
    
    
    
    
    10,734Total operating expenses
    
    
    716
    
    
    
    204,509
    
    
    
    2,359
    
    
    
    (15,036
    )
    
    
    192,548Operating income (loss)
    
    
    (716
    )
    
    
    18,484
    
    
    
    12,677
    
    
    
    
    
    
    
    30,445Non-operating expenses:Interest expense
    
    
    
    
    
    
    12,620
    
    
    
    9,784
    
    
    
    
    
    
    
    22,404Other expense (income), net
    
    
    
    
    
    
    (367
    )
    
    
    (241
    )
    
    
    
    
    
    
    (608
    )Income before provision for (benefit from) income taxes
    
    
    (716
    )
    
    
    6,231
    
    
    
    3,134
    
    
    
    
    
    
    
    8,649Provision for (benefit from) income taxes
    
    
    (279
    )
    
    
    2,461
    
    
    
    1,222
    
    
    
    
    
    
    
    3,404Equity in income (loss) of subsidiaries
    
    
    5,682
    
    
    
    
    
    
    
    
    
    
    
    (5,682
    )
    
    
    Net income (loss)
    
    $
    5,245
    
    
    $
    3,770
    
    
    $
    1,912
    
    
    $
    (5,682
    )
    
    $
    5,245
  BlueLinxHoldings
    
    
    BlueLinx
    
    
    LLCInc.
    
    
    Corporation
    
    
    Subsidiaries
    
    
    Eliminations
    
    
    ConsolidatedNet sales
    
    $
    
    
    
    $
    2,755,556
    
    
    $
    10,455
    
    
    $
    (10,455
    )
    
    $
    2,755,556Cost of sales
    
    
    
    
    
    
    2,489,161
    
    
    
    
    
    
    
    
    
    
    
    2,489,161Gross profit
    
    
    
    
    
    
    266,395
    
    
    
    10,455
    
    
    
    (10,455
    )
    
    
    266,395Operating expenses:Selling, general and administrative
    
    
    807
    
    
    
    204,518
    
    
    
    519
    
    
    
    (10,455
    )
    
    
    195,389Depreciation and amortization
    
    
    
    
    
    
    7,990
    
    
    
    2,116
    
    
    
    
    
    
    
    10,106Total operating expenses
    
    
    807
    
    
    
    212,508
    
    
    
    2,635
    
    
    
    (10,455
    )
    
    
    205,495Operating income (loss)
    
    
    (807
    )
    
    
    53,887
    
    
    
    7,820
    
    
    
    
    
    
    
    60,900Non-operating expenses:Interest expense
    
    
    
    
    
    
    16,666
    
    
    
    6,793
    
    
    
    
    
    
    
    23,459Charges associated with new mortgage
    
    
    
    
    
    
    
    
    
    
    4,864
    
    
    
    
    
    
    
    4,864Other expense (income), net
    
    
    
    
    
    
    80
    
    
    
    (68
    )
    
    
    
    
    
    
    12Income before provision for (benefit from) income taxes
    
    
    (807
    )
    
    
    37,141
    
    
    
    (3,769
    )
    
    
    
    
    
    
    32,565Provision for (benefit from) income taxes
    
    
    (315
    )
    
    
    14,944
    
    
    
    (1,469
    )
    
    
    
    
    
    
    13,160Equity in income (loss) of subsidiaries
    
    
    19,897
    
    
    
    
    
    
    
    
    
    
    
    (19,897
    )
    
    
    Net income (loss)
    
    $
    19,405
    
    
    $
    22,197
    
    
    $
    (2,300
    )
    
    $
    (19,897
    )
    
    $
    19,405
 16




---



##### 



BlueLinxBlueLinx
    
    
    CorporationHoldings
    
    
    and
    
    
    LLCInc.
    
    
    Subsidiaries
    
    
    Subsidiaries
    
    
    Eliminations
    
    
    ConsolidatedAssets:Current assets:Cash
    
    $
    3
    
    
    $
    24,715
    
    
    $
    38
    
    
    $
    
    
    
    $
    24,756Receivables
    
    
    
    
    
    
    405,798
    
    
    
    
    
    
    
    
    
    
    
    405,798Inventories
    
    
    
    
    
    
    470,222
    
    
    
    
    
    
    
    
    
    
    
    470,222Deferred income taxes
    
    
    
    
    
    
    9,973
    
    
    
    
    
    
    
    (65
    )
    
    
    9,908Other current assets
    
    
    (11
    )
    
    
    42,428
    
    
    
    
    
    
    
    (2,506
    )
    
    
    39,911Intercompany receivable
    
    
    971
    
    
    
    
    
    
    
    
    
    
    
    (971
    )
    
    
    Total current assets
    
    
    963
    
    
    
    953,136
    
    
    
    38
    
    
    
    (3,542
    )
    
    
    950,595Property, plant and equipment:Land and land improvements
    
    
    
    
    
    
    2,877
    
    
    
    54,295
    
    
    
    
    
    
    
    57,172Buildings
    
    
    
    
    
    
    7,002
    
    
    
    89,761
    
    
    
    
    
    
    
    96,763Machinery and equipment
    
    
    
    
    
    
    66,732
    
    
    
    
    
    
    
    
    
    
    
    66,732Construction in progress
    
    
    
    
    
    
    4,515
    
    
    
    
    
    
    
    
    
    
    
    4,515Property, plant and equipment, at cost
    
    
    
    
    
    
    81,126
    
    
    
    144,056
    
    
    
    
    
    
    
    225,182Accumulated depreciation
    
    
    
    
    
    
    (33,197
    )
    
    
    (13,347
    )
    
    
    
    
    
    
    (46,544
    )Property, plant and equipment, net
    
    
    
    
    
    
    47,929
    
    
    
    130,709
    
    
    
    
    
    
    
    178,638Investment in subsidiaries
    
    
    190,515
    
    
    
    
    
    
    
    
    
    
    
    (190,515
    )
    
    
    Deferred income taxes
    
    
    
    
    
    
    245
    
    
    
    
    
    
    
    (245
    )
    
    
    Other non-current assets
    
    
    
    
    
    
    17,633
    
    
    
    5,605
    
    
    
    
    
    
    
    23,238Total assets
    
    $
    191,478
    
    
    $
    1,018,943
    
    
    $
    136,352
    
    
    $
    (194,302
    )
    
    $
    1,152,471Liabilities:Current liabilities:Accounts payable
    
    $
    20
    
    
    $
    260,298
    
    
    $
    
    
    
    $
    
    
    
    $
    260,318Bank overdrafts
    
    
    
    
    
    
    34,563
    
    
    
    
    
    
    
    
    
    
    
    34,563Accrued compensation
    
    
    
    
    
    
    10,306
    
    
    
    
    
    
    
    
    
    
    
    10,306Current maturities of long-term debt
    
    
    
    
    
    
    103,816
    
    
    
    
    
    
    
    
    
    
    
    103,816Deferred income taxes
    
    
    65
    
    
    
    
    
    
    
    
    
    
    
    (65
    )
    
    
    Other current liabilities
    
    
    
    
    
    
    15,451
    
    
    
    1,193
    
    
    
    
    
    
    
    16,644Intercompany payable
    
    
    
    
    
    
    692
    
    
    
    2,785
    
    
    
    (3,477
    )
    
    
    Total current liabilities
    
    
    85
    
    
    
    425,126
    
    
    
    3,978
    
    
    
    (3,542
    )
    
    
    425,647Non-current liabilities:Long-term debt
    
    
    
    
    
    
    227,719
    
    
    
    295,000
    
    
    
    
    
    
    
    522,719Deferred income taxes
    
    
    
    
    
    
    
    
    
    
    2,115
    
    
    
    (245
    )
    
    
    1,870Other long-term liabilities
    
    
    
    
    
    
    10,842
    
    
    
    
    
    
    
    
    
    
    
    10,842Total liabilities
    
    
    85
    
    
    
    663,687
    
    
    
    301,093
    
    
    
    (3,787
    )
    
    
    961,078Shareholders Equity/Parents Investment
    
    
    191,393
    
    
    
    355,256
    
    
    
    (164,741
    )
    
    
    (190,515
    )
    
    
    191,393Total liabilities and equity
    
    $
    191,478
    
    
    $
    1,018,943
    
    
    $
    136,352
    
    
    $
    (194,302
    )
    
    $
    1,152,471
 17




---



##### 



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




---



##### 



BlueLinxHoldings
    
    
    BlueLinx
    
    
    LLCInc.
    
    
    Corporation
    
    
    Subsidiaries
    
    
    Eliminations
    
    
    ConsolidatedCash flows from operating activities:Net income
    
    $
    5,245
    
    
    $
    3,770
    
    
    $
    1,912
    
    
    $
    (5,682
    )
    
    $
    5,245Adjustments to reconcile net income to cash provided by (used in) operations:Depreciation and amortization
    
    
    
    
    
    
    8,618
    
    
    
    2,116
    
    
    
    
    
    
    
    10,734Amortization of debt issue costs
    
    
    
    
    
    
    903
    
    
    
    312
    
    
    
    
    
    
    
    1,215Deferred income tax benefit
    
    
    (86
    )
    
    
    (1,061
    )
    
    
    (416
    )
    
    
    
    
    
    
    (1,563
    )Share-based compensation expense
    
    
    
    
    
    
    2,227
    
    
    
    
    
    
    
    
    
    
    
    2,227Excess tax benefits from share-based compensation arrangements
    
    
    
    
    
    
    (60
    )
    
    
    
    
    
    
    
    
    
    
    (60
    )Equity in earnings of subsidiaries
    
    
    (5,682
    )
    
    
    
    
    
    
    
    
    
    
    5,682
    
    
    
    Changes in assets and liabilities:Receivables
    
    
    
    
    
    
    (98,255
    )
    
    
    
    
    
    
    
    
    
    
    (98,255
    )Inventories
    
    
    
    
    
    
    (59,536
    )
    
    
    
    
    
    
    
    
    
    
    (59,536
    )Accounts payable
    
    
    
    
    
    
    64,503
    
    
    
    
    
    
    
    
    
    
    
    64,503Changes in other working capital
    
    
    508
    
    
    
    6,924
    
    
    
    1,408
    
    
    
    
    
    
    
    8,840Intercompany receivable
    
    
    (207
    )
    
    
    
    
    
    
    
    
    
    
    207
    
    
    
    Intercompany payable
    
    
    
    
    
    
    532
    
    
    
    (325
    )
    
    
    (207
    )
    
    
    Other
    
    
    
    
    
    
    2,308
    
    
    
    (30
    )
    
    
    
    
    
    
    2,278Net cash provided by (used in) operating activities
    
    
    (222
    )
    
    
    (69,127
    )
    
    
    4,977
    
    
    
    
    
    
    
    (64,372
    )Cash flows from investing activities:Investment in subsidiaries
    
    
    7,624
    
    
    
    
    
    
    
    
    
    
    
    (7,624
    )
    
    
    Property, plant and equipment investments
    
    
    
    
    
    
    (9,578
    )
    
    
    (449
    )
    
    
    
    
    
    
    (10,027
    )Proceeds from sale of assets
    
    
    
    
    
    
    1,086
    
    
    
    
    
    
    
    
    
    
    
    1,086Net cash provided by (used in) investing activities
    
    
    7,624
    
    
    
    (8,492
    )
    
    
    (449
    )
    
    
    (7,624
    )
    
    
    (8,941
    )Cash flows from financing activities:Net transactions with Parent
    
    
    
    
    
    
    (3,078
    )
    
    
    (4,546
    )
    
    
    7,624
    
    
    
    Proceeds from stock options exercised
    
    
    323
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    323Excess tax benefits from share-based compensation arrangements
    
    
    60
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    60Net increase in revolving credit facility
    
    
    
    
    
    
    94,073
    
    
    
    
    
    
    
    
    
    
    
    94,073Decrease in bank overdrafts
    
    
    
    
    
    
    (15,678
    )
    
    
    
    
    
    
    
    
    
    
    (15,678
    )Common dividends paid
    
    
    (7,784
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (7,784
    )Other
    
    
    
    
    
    
    
    
    
    
    33
    
    
    
    
    
    
    
    33Net cash provided by (used in) financing activities
    
    
    (7,401
    )
    
    
    75,317
    
    
    
    (4,513
    )
    
    
    7,624
    
    
    
    71,027Increase (decrease) in cash
    
    
    1
    
    
    
    (2,302
    )
    
    
    15
    
    
    
    
    
    
    
    (2,286
    )Balance, beginning of period
    
    
    2
    
    
    
    27,017
    
    
    
    23
    
    
    
    
    
    
    
    27,042Balance, end of period
    
    $
    3
    
    
    $
    24,715
    
    
    $
    38
    
    
    $
    
    
    
    $
    24,756
 19




---



##### 



BlueLinxHoldings
    
    
    BlueLinx
    
    
    LLCInc.
    
    
    Corporation
    
    
    Subsidiaries
    
    
    Eliminations
    
    
    ConsolidatedCash flows from operating activities:Net income (loss)
    
    $
    19,405
    
    
    $
    22,197
    
    
    $
    (2,300
    )
    
    $
    (19,897
    )
    
    $
    19,405Adjustments to reconcile net income (loss) to cash provided by (used in) operations:Depreciation and amortization
    
    
    
    
    
    
    7,990
    
    
    
    2,116
    
    
    
    
    
    
    
    10,106Amortization of debt issue costs
    
    
    
    
    
    
    988
    
    
    
    421
    
    
    
    
    
    
    
    1,409Charges associated with mortgage refinancing
    
    
    
    
    
    
    
    
    
    
    4,864
    
    
    
    
    
    
    
    4,864Deferred income tax benefit
    
    
    (210
    )
    
    
    (1,235
    )
    
    
    (288
    )
    
    
    
    
    
    
    (1,733
    )Share-based compensation
    
    
    38
    
    
    
    1,208
    
    
    
    
    
    
    
    
    
    
    
    1,246Excess tax benefits from share-based compensation arrangements
    
    
    
    
    
    
    (863
    )
    
    
    
    
    
    
    
    
    
    
    (863
    )Equity in earnings of subsidiaries
    
    
    (19,897
    )
    
    
    
    
    
    
    
    
    
    
    19,897
    
    
    
    Changes in assets and liabilities:Receivables
    
    
    
    
    
    
    (70,028
    )
    
    
    
    
    
    
    
    
    
    
    (70,028
    )Inventories
    
    
    
    
    
    
    (59,093
    )
    
    
    
    
    
    
    
    
    
    
    (59,093
    )Accounts payable
    
    
    (35
    )
    
    
    (13,698
    )
    
    
    
    
    
    
    
    
    
    
    (13,733
    )Changes in other working capital
    
    
    521
    
    
    
    (4,099
    )
    
    
    (1,937
    )
    
    
    
    
    
    
    (5,515
    )Intercompany receivable
    
    
    368
    
    
    
    1,578
    
    
    
    (1,939
    )
    
    
    (7
    )
    
    
    Intercompany payable
    
    
    (1,578
    )
    
    
    1,939
    
    
    
    (368
    )
    
    
    7
    
    
    
    Other
    
    
    
    
    
    
    365
    
    
    
    133
    
    
    
    
    
    
    
    498Net cash provided by (used in) operating activities
    
    
    (1,388
    )
    
    
    (112,751
    )
    
    
    702
    
    
    
    
    
    
    
    (113,437
    )Cash flows from investing activities:Investment in subsidiaries
    
    
    6,709
    
    
    
    
    
    
    
    
    
    
    
    (6,709
    )
    
    
    Property, plant and equipment investments
    
    
    
    
    
    
    (2,785
    )
    
    
    
    
    
    
    
    
    
    
    (2,785
    )Proceeds from sale of assets
    
    
    
    
    
    
    332
    
    
    
    
    
    
    
    
    
    
    
    332Net cash provided by (used in) investing activities
    
    
    6,709
    
    
    
    (2,453
    )
    
    
    
    
    
    
    (6,709
    )
    
    
    (2,453
    )Cash flows from financing activities:Net transactions with Parent
    
    
    
    
    
    
    115,960
    
    
    
    (122,669
    )
    
    
    6,709
    
    
    
    Proceeds from stock options exercised
    
    
    1,483
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    1,483Excess tax benefits from share-based compensation arrangements
    
    
    863
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    863Net increase in revolving credit facility
    
    
    
    
    
    
    5,512
    
    
    
    
    
    
    
    
    
    
    
    5,512Proceeds from new mortgage
    
    
    
    
    
    
    
    
    
    
    295,000
    
    
    
    
    
    
    
    295,000Debt financing costs
    
    
    
    
    
    
    (400
    )
    
    
    (5,553
    )
    
    
    
    
    
    
    (5,953
    )Retirement of old mortgage
    
    
    
    
    
    
    
    
    
    
    (165,000
    )
    
    
    
    
    
    
    (165,000
    )Prepayment fees associated with old mortgage
    
    
    
    
    
    
    
    
    
    
    (2,475
    )
    
    
    
    
    
    
    (2,475
    )Decrease in bank overdrafts
    
    
    
    
    
    
    (3,034
    )
    
    
    
    
    
    
    
    
    
    
    (3,034
    )Common dividends paid
    
    
    (7,680
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (7,680
    )Net cash provided by (used in) financing activities
    
    
    (5,334
    )
    
    
    118,038
    
    
    
    (697
    )
    
    
    6,709
    
    
    
    118,716Increase (decrease) in cash
    
    
    (13
    )
    
    
    2,834
    
    
    
    5
    
    
    
    
    
    
    
    2,826Balance, beginning of period
    
    
    13
    
    
    
    24,307
    
    
    
    
    
    
    
    
    
    
    
    24,320Balance, end of period
    
    $
    
    
    
    $
    27,141
    
    
    $
    5
    
    
    $
    
    
    
    $
    27,146
 20




---



##### 



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; 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




---



##### 



Overview
 Background
  Recent Developments
   Supply Agreement with Georgia-Pacific
  Selected Factors Affecting Our Operating Results
   Fiscal
    
    
    Fiscal
    
    
    Fiscal
    
    
    Fiscal
    
    
    Fiscal
    
    
    FiscalQ2 2007
    
    
    Q2 2006
    
    
    2007 YTD
    
    
    2006 YTD
    
    
    2006
    
    
    2005(Dollars in millions)(Unaudited)Sales by CategoryStructural Products(1)
    
    $
    598
    
    
    $
    799
    
    
    $
    1,117
    
    
    $
    1,612
    
    
    $
    2,788
    
    
    $
    3,548Specialty Products(1)
    
    
    501
    
    
    
    603
    
    
    
    957
    
    
    
    1,184
    
    
    
    2,197
    
    
    
    2,143Unallocated Allowances and Adjustments
    
    
    (17
    )
    
    
    (23
    )
    
    
    (35
    )
    
    
    (40
    )
    
    
    (86
    )
    
    
    (69
    )Total Sales
    
    $
    1,082
    
    
    $
    1,379
    
    
    $
    2,039
    
    
    $
    2,756
    
    
    $
    4,899
    
    
    $
    5,622Sales VariancesUnit Volume $ Change
    
    $
    (229
    )
    
    $
    (56
    )
    
    $
    (534
    )
    
    $
    11
    
    
    $
    (398
    )
    
    $
    216Price/Other(2)
    
    
    (68
    )
    
    
    (52
    )
    
    
    (183
    )
    
    
    (94
    )
    
    
    (325
    )
    
    
    (152
    )Total $ Change
    
    $
    (297
    )
    
    $
    (108
    )
    
    $
    (717
    )
    
    $
    (83
    )
    
    $
    (723
    )
    
    $
    64Unit Volume % Change
    
    
    (16.3
    )%
    
    
    (3.8
    )%
    
    
    (19.1
    )%
    
    
    0.4
    %
    
    
    (7.0
    )%
    
    
    3.9
    %Price/Other(2)
    
    
    (5.2
    )%
    
    
    (3.5
    )%
    
    
    (6.9
    )%
    
    
    (3.3
    )%
    
    
    (5.9
    )%
    
    
    (2.8
    )%Total % Change
    
    
    (21.5
    )%
    
    
    (7.3
    )%
    
    
    (26.0
    )%
    
    
    (2.9
    )%
    
    
    (12.9
    )%
    
    
    1.1
    %
 22




---



##### 



(1)
    
    For the quarter ended December 31, 2005, we began classifying metal rebar and remesh as
structural products instead of specialty products. 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
    
    
    FiscalQ2 2007
    
    
    Q2 2006
    
    
    2007 YTD
    
    
    2006 YTD
    
    
    2006
    
    
    2005(Dollars in millions)(Unaudited)Gross Margin $s by
CategoryStructural Products(1)
    
    $
    56
    
    
    $
    55
    
    
    $
    101
    
    
    $
    111
    
    
    $
    194
    
    
    $
    246Specialty Products(1)
    
    
    70
    
    
    
    87
    
    
    
    134
    
    
    
    167
    
    
    
    308
    
    
    
    284Other (2)
    
    
    (7
    )
    
    
    (6
    )
    
    
    (12
    )
    
    
    (12
    )
    
    
    (22
    )
    
    
    (18
    )Total Gross Margin $s
    
    $
    119
    
    
    $
    136
    
    
    $
    223
    
    
    $
    266
    
    
    $
    480
    
    
    $
    512Gross Margin %s by CategoryStructural Products
    
    
    9.3
    %
    
    
    7.0
    %
    
    
    9.0
    %
    
    
    6.9
    %
    
    
    7.0
    %
    
    
    6.9
    %Specialty Products
    
    
    14.0
    %
    
    
    14.4
    %
    
    
    14.0
    %
    
    
    14.1
    %
    
    
    14.0
    %
    
    
    13.3
    %Other (2)
    
    NA
    
    NA
    
    NA
    
    NA
    
    NA
    
    NATotal Gross Margin %s
    
    
    11.0
    %
    
    
    9.9
    %
    
    
    10.9
    %
    
    
    9.7
    %
    
    
    9.8
    %
    
    
    9.1
    %Unit Volume Growth by ProductStructural Products
    
    
    (17.1
    )%
    
    
    (11.3
    )%
    
    
    (19.9
    )%
    
    
    (6.3
    )%
    
    
    (11.8
    )%
    
    
    3.2
    %Specialty Products
    
    
    (15.3
    )%
    
    
    9.6
    %
    
    
    (18.0
    )%
    
    
    12.1
    %
    
    
    1.0
    %
    
    
    5.1
    %Total Unit Volume Growth %s
    
    
    (16.3
    )%
    
    
    (3.8
    )%
    
    
    (19.1
    )%
    
    
    0.4
    %
    
    
    (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
    
    
    FiscalQ2 2007
    
    
    Q2 2006
    
    
    2007 YTD
    
    
    2006 YTD
    
    
    2006
    
    
    2005(Dollars in millions)(Unaudited)Sales by ChannelWarehouse/Reload
    
    $
    783
    
    
    $
    918
    
    
    $
    1,464
    
    
    $
    1,800
    
    
    $
    3,326
    
    
    $
    3,704Direct
    
    
    316
    
    
    
    484
    
    
    
    610
    
    
    
    996
    
    
    
    1,659
    
    
    
    1,987Unallocated Allowances and Adjustments
    
    
    (17
    )
    
    
    (23
    )
    
    
    (35
    )
    
    
    (40
    )
    
    
    (86
    )
    
    
    (69
    )Total
    
    $
    1,082
    
    
    $
    1,379
    
    
    $
    2,039
    
    
    $
    2,756
    
    
    $
    4,899
    
    
    $
    5,622Gross Margin by ChannelWarehouse/Reload
    
    $
    106
    
    
    $
    114
    
    
    $
    198
    
    
    $
    224
    
    
    $
    407
    
    
    $
    429Direct
    
    
    20
    
    
    
    28
    
    
    
    37
    
    
    
    54
    
    
    
    95
    
    
    
    101Unallocated Allowances and Adjustments
    
    
    (7
    )
    
    
    (6
    )
    
    
    (12
    )
    
    
    (12
    )
    
    
    (22
    )
    
    
    (18
    )Total
    
    $
    119
    
    
    $
    136
    
    
    $
    223
    
    
    $
    266
    
    
    $
    480
    
    
    $
    512
 Fiscal
    
    
    Fiscal
    
    
    Fiscal
    
    
    Fiscal
    
    
    Fiscal
    
    
    FiscalQ2 2007
    
    
    Q2 2006
    
    
    2007 YTD
    
    
    2006 YTD
    
    
    2006
    
    
    2005(Dollars in millions)(Unaudited)Gross Margin % by ChannelWarehouse/Reload
    
    
    13.5
    %
    
    
    12.4
    %
    
    
    13.5
    %
    
    
    12.4
    %
    
    
    12.2
    %
    
    
    11.6
    %Direct
    
    
    6.3
    %
    
    
    5.8
    %
    
    
    6.1
    %
    
    
    5.4
    %
    
    
    5.7
    %
    
    
    5.1
    %Unallocated Allowances and Adjustments
    
    
    (0.6
    )%
    
    
    (0.4
    )%
    
    
    (0.6
    )%
    
    
    (0.4
    )%
    
    
    (0.4
    )%
    
    
    (0.3
    )%Total
    
    
    11.0
    %
    
    
    9.9
    %
    
    
    10.9
    %
    
    
    9.7
    %
    
    
    9.8
    %
    
    
    9.1
    %
 23




---



##### 



Fiscal Year
  Results of Operations
 Second Quarter of Fiscal 2007 Compared to Second Quarter of Fiscal 2006
  Period
    
    
    
    
    
    
    Periodfrom
    
    
    
    
    
    
    fromApril 1, 2007
    
    
    % of
    
    
    April 2, 2006
    
    
    % ofto
    
    
    Net
    
    
    to
    
    
    NetJune 30, 2007
    
    
    Sales
    
    
    July 1, 2006
    
    
    Sales(Unaudited)
    
    
    
    
    
    
    (Unaudited)(Dollars in thousands)Net sales
    
    $
    1,081,990
    
    
    
    100.0
    %
    
    $
    1,378,950
    
    
    
    100.0
    %Gross profit
    
    
    119,238
    
    
    
    11.0
    %
    
    
    136,443
    
    
    
    9.9
    %Selling, general & administrative
    
    
    93,346
    
    
    
    8.6
    %
    
    
    98,122
    
    
    
    7.1
    %Depreciation and amortization
    
    
    5,335
    
    
    
    0.5
    %
    
    
    5,063
    
    
    
    0.4
    %Operating income
    
    
    20,557
    
    
    
    1.9
    %
    
    
    33,258
    
    
    
    2.4
    %Interest expense
    
    
    11,798
    
    
    
    1.1
    %
    
    
    12,262
    
    
    
    0.9
    %Charges associated with mortgage refinancing
    
    
    
    
    
    
    0.0
    %
    
    
    4,864
    
    
    
    0.4
    %Other income, net
    
    
    (225
    )
    
    
    0.0
    %
    
    
    (69
    )
    
    
    0.0
    %Income before provision for income taxes
    
    
    8,984
    
    
    
    0.8
    %
    
    
    16,201
    
    
    
    1.2
    %Provision for income taxes
    
    
    3,550
    
    
    
    0.3
    %
    
    
    6,590
    
    
    
    0.5
    %Net income
    
    $
    5,434
    
    
    
    0.5
    %
    
    $
    9,611
    
    
    
    0.7
    %
 Net Sales.
 Gross Profit.
 Selling, general, and administrative.
 Depreciation and Amortization.
 24




---



##### 



Operating Income.
 Interest Expense, net.
  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
    
    
    NetJune 30, 2007
    
    
    Sales
    
    
    July 1, 2006
    
    
    Sales(Unaudited)
    
    
    
    
    
    
    (Unaudited)(Dollars in thousands)Net sales
    
    $
    2,039,104
    
    
    
    100.0
    %
    
    $
    2,755,556
    
    
    
    100.0
    %Gross profit
    
    
    222,993
    
    
    
    10.9
    %
    
    
    266,395
    
    
    
    9.7
    %Selling, general & administrative
    
    
    181,814
    
    
    
    8.9
    %
    
    
    195,389
    
    
    
    7.1
    %Depreciation and amortization
    
    
    10,734
    
    
    
    0.5
    %
    
    
    10,106
    
    
    
    0.4
    %Operating income
    
    
    30,445
    
    
    
    1.5
    %
    
    
    60,900
    
    
    
    2.2
    %Interest expense
    
    
    22,404
    
    
    
    1.1
    %
    
    
    23,459
    
    
    
    0.9
    %Charges associated with mortgage refinancing
    
    
    
    
    
    
    0.0
    %
    
    
    4,864
    
    
    
    0.2
    %Other (income) expense, net
    
    
    (608
    )
    
    
    0.0
    %
    
    
    12
    
    
    
    0.0
    %Income before provision for income taxes
    
    
    8,649
    
    
    
    0.4
    %
    
    
    32,565
    
    
    
    1.2
    %Income tax provision
    
    
    3,404
    
    
    
    0.2
    %
    
    
    13,160
    
    
    
    0.5
    %Net income
    
    $
    5,245
    
    
    
    0.3
    %
    
    $
    19,405
    
    
    
    0.7
    %
 Net Sales.
 Gross Profit.
 25




---



##### 



Selling, general, and administrative.
 Depreciation and Amortization.
 Operating Income.
 Interest Expense, net.
  Provision for Income Taxes.
 Net Income.
  Seasonality
  Liquidity and Capital Resources
   26




---



##### 



June 30,
    
    December 30,2007
    
    2006(Dollars in thousands)(Unaudited)Working capital
    
    $
    524,948
    
    
    $
    520,237
 Period fromPeriod from
    
    January 1,December 31,
    
    2006 to2006 to
    
    July 1,June 30, 2007
    
    2006(Dollars in thousands)(Unaudited)Cash flows used for operating activities
    
    $
    (64,372
    )
    
    $
    (113,437
    )Cash flows used for investing activities
    
    
    (8,941
    )
    
    
    (2,453
    )Cash flows provided by financing activities
    
    $
    71,027
    
    
    $
    118,716
 Working Capital
  Operating Activities
  Investing Activities
    27




---



##### 



Financing Activities
   Debt and Credit Sources
      Contractual Obligations
  Critical Accounting Policies
   28




---



##### 



Revenue Recognition
   
    
    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
 Share-Based Payment Accounting for Stock-Based Compensation
    29




---



##### 



Inventories
   Consideration Received from Vendors and Paid to Customers
  Impairment of Long-Lived Assets
  Income Taxes
  30




---



##### 



Recently Issued Accounting Pronouncements
 The Fair Value Option for Financial Assets and
Financial Liabilities
 Fair Value Measurements
  
 ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
   
 ITEM 4. CONTROLS AND PROCEDURES
   
 PART II. OTHER INFORMATION
 
 ITEM 1. LEGAL PROCEEDINGS
  31




---



##### 



ITEM 1A. RISK FACTORS
  
 ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
  1.
    
    Election of directors to serve on our board of directors:
 Name
    
    Votes For
    
    Votes WithheldJeffrey J. Fenton
    
    
    25,210,082
    
    
    
    3,285,953Richard S. Grant
    
    
    28,073,263
    
    
    
    422,772Stephen E. Macadam
    
    
    25,416,552
    
    
    
    3,079,483Richard B. Marchese
    
    
    28,073,663
    
    
    
    422,372Steven F. Mayer
    
    
    25,407,912
    
    
    
    3,088,123Charles H. McElrea
    
    
    25,403,727
    
    
    
    3,092,308Alan H. Schumacher
    
    
    28,073,563
    
    
    
    422,472Mark A. Suwyn
    
    
    25,210,200
    
    
    
    3,285,835Lenard B. Tessler
    
    
    25,387,359
    
    
    
    3,108,676Robert G. Warden
    
    
    25,387,418
    
    
    
    3,108,617
 2.
    
    Ratification of appointment of Ernst & Young LLP as our independent registered
public accounting firm:
 Votes For
    
    Votes Against
    
    Abstain28,442,358
    
    
    39,830
    
    
    
    13,847
 
 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




---



##### 



SIGNATURES
  BlueLinx Holdings Inc.
(Registrant)Date: August 9, 2007
    
    /s/ Lynn A. Wentworth

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




---



##### 



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