##### Table of Contents



UNITED STATES SECURITIES AND EXCHANGE COMMISSION
 Washington, D.C. 20549
 FORM 10-Q
  þ
    
    QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
 For the quarterly period ended October 3, 2009
 OR
 o
    
    TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
 For the transition period from  to
 Commission file number: 1-32383
 BlueLinx Holdings Inc.
  Delaware
    
    77-0627356(State of Incorporation)
    
    (I.R.S. Employer Identification No.)4300 Wildwood Parkway, Atlanta, Georgia
    
    30339(Address of principal executive offices)
    
    (Zip Code)
 (770) 953-7000
 þ o
 o o
  Large accelerated filer o
    
    Accelerated filer o
    
    Non-accelerated filer   þ
(Do not check if a smaller reporting company)
    
    Smaller reporting company o
 o þ




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##### 



BLUELINX HOLDINGS INC.
 Form 10-Q
 For the Quarterly Period Ended October 3, 2009
 INDEX
 PAGEPART I. FINANCIAL INFORMATIONItem 1. Financial Statements  BlueLinx Holdings Inc. (Unaudited)Condensed 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
    
    
    28Item 3. Quantitative and Qualitative Disclosures About Market Risk
    
    
    42Item 4. Controls and Procedures
    
    
    42PART II. OTHER INFORMATIONItem 1. Legal Proceedings
    
    
    42Item 1A. Risk Factors
    
    
    42Item 2. Unregistered Sales of Equity Securities and Uses of Proceeds
    
    
    43Item 6. Exhibits
    
    
    43Signatures
    
    
    44Exhibit Index
    
    
    45Exhibit 10.1Exhibit 10.2Exhibit 31.1Exhibit 31.2Exhibit 32.1Exhibit 32.2
  2




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##### Table of Contents



PART I. FINANCIAL INFORMATION
 
 ITEM 1. FINANCIAL STATEMENTS
 
 BLUELINX HOLDINGS INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except per share data)
(unaudited)
 Third QuarterPeriod from
    
    
    Period fromJuly 5, 2009
    
    
    June 29, 2008to
    
    
    toOctober 3, 2009
    
    
    September 27, 2008Net sales
    
    $
    449,363
    
    
    $
    726,756Cost of sales
    
    
    394,058
    
    
    
    643,507Gross profit
    
    
    55,305
    
    
    
    83,249Operating expenses:Selling, general, and administrative
    
    
    55,024
    
    
    
    73,793Depreciation and amortization
    
    
    3,882
    
    
    
    4,940Total operating expenses
    
    
    58,906
    
    
    
    78,733Operating (loss) income
    
    
    (3,601
    )
    
    
    4,516Non-operating expenses:Interest expense
    
    
    7,987
    
    
    
    8,791Charges associated with ineffective interest rate swap, net
    
    
    1,431
    
    
    
    Other expense, net
    
    
    324
    
    
    
    65Loss before provision for (benefit from) income taxes
    
    
    (13,343
    )
    
    
    (4,340
    )Provision for (benefit from) income taxes
    
    
    120
    
    
    
    (1,746
    )Net loss
    
    $
    (13,463
    )
    
    $
    (2,594
    )Basic weighted average number of common shares outstanding
    
    
    30,948
    
    
    
    31,150Basic net loss per share applicable to common stock
    
    $
    (0.44
    )
    
    $
    (0.08
    )Diluted weighted average number of common shares outstanding
    
    
    30,948
    
    
    
    31,150Diluted net loss per share applicable to common stock
    
    $
    (0.44
    )
    
    $
    (0.08
    )
  3




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BLUELINX HOLDINGS INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except per share data)
(unaudited)
 Nine Months EndedPeriod from
    
    
    Period fromJanuary 4, 2009
    
    
    December 30, 2007to
    
    
    toOctober 3, 2009
    
    
    September 27, 2008Net sales
    
    $
    1,280,000
    
    
    $
    2,278,185Cost of sales
    
    
    1,132,119
    
    
    
    2,009,698Gross profit
    
    
    147,881
    
    
    
    268,487Operating expenses:Selling, general, and administrative
    
    
    163,744
    
    
    
    235,655Net gain from terminating the Georgia-Pacific supply agreement
    
    
    (17,554
    )
    
    
    Depreciation and amortization
    
    
    13,153
    
    
    
    15,011Total operating expenses
    
    
    159,343
    
    
    
    250,666Operating (loss) income
    
    
    (11,462
    )
    
    
    17,821Non-operating expenses:Interest expense
    
    
    24,610
    
    
    
    27,530Charges associated with ineffective interest rate swap, net
    
    
    7,341
    
    
    
    Write-off of debt issuance costs
    
    
    1,407
    
    
    
    Other expense, net
    
    
    482
    
    
    
    385Loss before provision for (benefit from) income taxes
    
    
    (45,302
    )
    
    
    (10,094
    )Provision for (benefit from) income taxes
    
    
    28,186
    
    
    
    (3,508
    )Net loss
    
    $
    (73,488
    )
    
    $
    (6,586
    )Basic weighted average number of common shares outstanding
    
    
    31,019
    
    
    
    31,053Basic net loss per share applicable to common stock
    
    $
    (2.37
    )
    
    $
    (0.21
    )Diluted weighted average number of common shares outstanding
    
    
    31,019
    
    
    
    31,053Diluted net loss per share applicable to common stock
    
    $
    (2.37
    )
    
    $
    (0.21
    )
  4




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BLUELINX HOLDINGS INC.
 CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands, except share and per share data)
 October 3, 2009
    
    
    January 3, 2009(unaudited)Assets:Current assets:Cash and cash equivalents
    
    $
    25,498
    
    
    $
    150,353Receivables, net
    
    
    168,656
    
    
    
    130,653Inventories, net
    
    
    173,123
    
    
    
    189,482Deferred income tax assets
    
    
    578
    
    
    
    11,868Other current assets
    
    
    34,356
    
    
    
    37,351Total current assets
    
    
    402,211
    
    
    
    519,707Property, plant, and equipment:Land and land improvements
    
    
    52,719
    
    
    
    53,426Buildings
    
    
    95,968
    
    
    
    96,159Machinery and equipment
    
    
    68,906
    
    
    
    70,491Construction in progress
    
    
    1,150
    
    
    
    2,035Property, plant, and equipment, at cost
    
    
    218,743
    
    
    
    222,111Accumulated depreciation
    
    
    (78,866
    )
    
    
    (69,336
    )Property, plant, and equipment, net
    
    
    139,877
    
    
    
    152,775Non-current deferred income tax assets
    
    
    
    
    
    
    17,468Other non-current assets
    
    
    42,437
    
    
    
    42,457Total assets
    
    $
    584,525
    
    
    $
    732,407Liabilities:Current liabilities:Accounts payable
    
    $
    108,537
    
    
    $
    78,367Bank overdrafts
    
    
    20,016
    
    
    
    24,715Accrued compensation
    
    
    5,245
    
    
    
    11,552Current maturities of long-term debt
    
    
    
    
    
    
    60,000Other current liabilities
    
    
    26,696
    
    
    
    24,546Total current liabilities
    
    
    160,494
    
    
    
    199,180Non-current liabilities:Long-term debt
    
    
    341,669
    
    
    
    384,870Non-current deferred income tax liabilities
    
    
    578
    
    
    
    Other non-current liabilities
    
    
    42,755
    
    
    
    45,505Total liabilities
    
    
    545,496
    
    
    
    629,555Shareholders Equity:Common Stock, $0.01 par value,
100,000,000 shares authorized; 32,964,201
and 32,362,330 shares issued at October
3, 2009 and January 3, 2009,
respectively; and 32,252,349 and
32,362,330 outstanding at October 3, 2009
and January 3, 2009, respectively
    
    
    323
    
    
    
    323Additional paid-in capital
    
    
    144,462
    
    
    
    144,148Accumulated other comprehensive loss
    
    
    (7,569
    )
    
    
    (16,920
    )Accumulated deficit
    
    
    (98,187
    )
    
    
    (24,699
    )Total shareholders equity
    
    
    39,029
    
    
    
    102,852Total liabilities and shareholders equity
    
    $
    584,525
    
    
    $
    732,407
  5




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BLUELINX HOLDINGS INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)
(unaudited)
 Nine Months EndedPeriod
    
    
    Periodfrom January 4,
    
    
    from December 29,2009 to
    
    
    2007 toOctober 3, 2009
    
    
    September 27, 2008Cash flows from operating activities:Net loss
    
    $
    (73,488
    )
    
    $
    (6,586
    )Adjustments to reconcile net loss to cash (used in) provided by operations:Depreciation and amortization
    
    
    13,153
    
    
    
    15,011Amortization of debt issuance costs
    
    
    1,843
    
    
    
    1,823Net gain from terminating the Georgia-Pacific supply agreement
    
    
    (17,554
    )
    
    
    Payments from terminating the Georgia-Pacific supply agreement
    
    
    9,412
    
    
    
    Gain from sale of properties
    
    
    (4,406
    )
    
    
    Prepayment fees associated with sale of facility
    
    
    616
    
    
    
    Charges associated with ineffective interest rate swap
    
    
    7,341
    
    
    
    Write-off of debt issue costs
    
    
    1,407
    
    
    
    Vacant property charges, net
    
    
    457
    
    
    
    1,640Deferred income tax provision (benefit)
    
    
    27,228
    
    
    
    (3,506
    )Share-based compensation expense
    
    
    2,170
    
    
    
    2,163Excess tax benefits from share-based compensation arrangements
    
    
    
    
    
    
    (76
    )Decrease in restricted cash
    
    
    3,380
    
    
    
    5,970Changes in assets and liabilities:Receivables
    
    
    (38,003
    )
    
    
    18,698Inventories
    
    
    16,359
    
    
    
    74,910Accounts payable
    
    
    30,170
    
    
    
    (35,875
    )Changes in other working capital
    
    
    6,611
    
    
    
    28,895Other
    
    
    (192),
    
    
    
    1,968Net cash (used in) provided by operating activities
    
    
    (13,496
    )
    
    
    105,035Cash flows from investing activities:Property, plant and equipment investments
    
    
    (952
    )
    
    
    (2,614
    )Proceeds from disposition of assets
    
    
    8,454
    
    
    
    848Net cash provided by (used in) investing activities
    
    
    7,502
    
    
    
    (1,766
    )Cash flows from financing activities:Repurchase of common stock
    
    
    (1,862
    )
    
    
    Proceeds from stock options exercised
    
    
    
    
    
    
    434Excess tax benefits from share-based compensation arrangements
    
    
    
    
    
    
    76Decrease in revolving credit facility
    
    
    (100,000
    )
    
    
    (27,535
    )Payment of principal on mortgage
    
    
    (3,201
    )
    
    
    Prepayment fees associated with sale of facility
    
    
    (616
    )
    
    
    Decrease in bank overdrafts
    
    
    (4,699
    )
    
    
    (15,450
    )Increase in restricted cash related to the mortgage
    
    
    (8,442
    )
    
    
    (5,461
    )Other
    
    
    (41
    )
    
    
    6Net cash used in financing activities
    
    
    (118,861
    )
    
    
    (47,930
    )(Decrease) increase in cash
    
    
    (124,855
    )
    
    
    55,339Balance, beginning of period
    
    
    150,353
    
    
    
    15,759Balance, end of period
    
    $
    25,498
    
    
    $
    71,098
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BLUELINX HOLDINGS INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
OCTOBER 3, 2009
 1. Basis of Presentation and Background
 Basis of Presentation
    2. Summary of Significant Accounting Policies
 Revenue Recognition
   
    
    We are the primary obligor responsible for fulfillment and all other aspects of
the customer relationship.
    
    Title passes to BlueLinx, and we carry all risk of loss related to warehouse,
reload and inventory shipped directly from vendors to our customers.
    
    We are responsible for all product returns.
    
    We control the selling price for all channels.
    
    We select the supplier.
    
    We bear all credit risk.
 7




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Cash and Cash Equivalents
  Restricted Cash
   At October 3,
    
    
    At January 3,2009
    
    
    2009Cash in escrow:Mortgage
    
    
    17,560
    
    
    
    9,118Other (1)
    
    
    13,381
    
    
    
    16,401Total
    
    $
    30,941
    
    
    $
    25,519
 
 (1)
    
    Other includes restricted cash related to our interest rate swap, insurance, and
other items.  Allowance for Doubtful Accounts and Related Reserves
  Inventory Valuation
  8




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




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Stock-Based Compensation
      10




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Income Taxes
   
    
    taxable income in prior carryback years, if carryback is permitted under the tax law;
    
    future reversals of existing taxable temporary differences (i.e., offset gross deferred
taxassets against gross deferred tax liabilities);
    
    tax planning strategies; and
    
    future taxable income exclusive of reversing temporary differences and carryforwards.
        11




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Impairment of Long-Lived Assets
       12




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Self-Insurance
  3. Restructuring Charges
   2007 Facility Consolidation and Severance Costs
   Balance at July 5, 2009
    
    $
    11,656Charges
    
    
    Payments
    
    
    (535
    )Accretion of discount used to calculate liability
    
    
    187Balance at October 3, 2009
    
    $
    11,308
 13




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Balance at January 3, 2009
    
    $
    12,340Charges
    
    
    Payments
    
    
    (1,601
    )Accretion of discount used to calculate liability
    
    
    569Balance at October 3, 2009
    
    $
    11,308
 2008 Facility Consolidation and Severance Costs
   Facility
    
    
    SeveranceConsolidation
    
    
    Costs
    
    
    TotalBalance at July 5, 2009
    
    $
    1,030
    
    
    $
    77
    
    
    $
    1,107Assumption changes
    
    
    67
    
    
    
    
    
    
    
    67Payments
    
    
    (259
    )
    
    
    (46
    )
    
    
    (305
    )Accretion of liability
    
    
    22
    
    
    
    
    
    
    
    22Balance at October 3, 2009
    
    $
    860
    
    
    $
    31
    
    
    $
    891
  Facility
    
    
    SeveranceConsolidation
    
    
    Costs
    
    
    TotalBalance at January 3, 2009
    
    $
    1,792
    
    
    $
    512
    
    
    $
    2,304Assumption changes
    
    
    (187
    )
    
    
    
    
    
    
    (187
    )Payments
    
    
    (826
    )
    
    
    (481
    )
    
    
    (1,307
    )Accretion of liability
    
    
    81
    
    
    
    
    
    
    
    81Balance at October 3, 2009
    
    $
    860
    
    
    $
    31
    
    
    $
    891
 2009 Facility Consolidations and Severance
  14




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Facility
    
    
    SeveranceConsolidation
    
    
    Costs
    
    
    TotalBalance at July 5, 2009
    
    $
    731
    
    
    $
    80
    
    
    $
    811Charges
    
    
    
    
    
    
    193
    
    
    
    193Assumption changes
    
    
    (88
    )
    
    
    
    
    
    
    (88
    )Payments
    
    
    (50
    )
    
    
    (252
    )
    
    
    (302
    )Accretion of liability
    
    
    14
    
    
    
    
    
    
    
    14Balance at October 3, 2009
    
    $
    607
    
    
    $
    21
    
    
    $
    628
  Facility
    
    
    SeveranceConsolidation
    
    
    Costs
    
    
    TotalBalance at January 3, 2009
    
    $
    
    
    
    $
    
    
    
    $
    Charges
    
    
    731
    
    
    
    1,422
    
    
    
    2,153Assumption changes
    
    
    (88
    )
    
    
    
    
    
    
    (88
    )Payments
    
    
    (50
    )
    
    
    (1,401
    )
    
    
    (1,451
    )Accretion of liability
    
    
    14
    
    
    
    
    
    
    
    14Balance at October 3, 2009
    
    $
    607
    
    
    $
    21
    
    
    $
    628
 4. Assets Held for Sale and Net Gain on Disposition
  5. Comprehensive Loss
  Third QuarterPeriod from
    
    
    Period fromJuly 5, 2009
    
    
    June 29, 2008to
    
    
    toOctober 3, 2009
    
    
    September 27, 2008Net loss
    
    $
    (13,463
    )
    
    $
    (2,594
    )Other comprehensive income (loss):Foreign currency translation, net of taxes
    
    
    844
    
    
    
    (242
    )Unrealized
loss from cash flow hedge, net of taxes
    
    
    
    
    
    
    (145
    )Interest expense recognized related to ineffective interest rate swap
    
    
    2,438
    
    
    
    Comprehensive loss
    
    $
    (10,181
    )
    
    $
    (2,981
    )
 15




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Nine Months EndedPeriod from
    
    
    Period fromJanuary 4, 2009
    
    
    December 29, 2007to
    
    
    toOctober 3, 2009
    
    
    September 27, 2008Net loss
    
    $
    (73,488
    )
    
    $
    (6,586
    )Other comprehensive income (loss):Foreign currency translation, net of taxes
    
    
    1,438
    
    
    
    (639
    )Unrealized gain from cash flow hedge, net of taxes
    
    
    
    
    
    
    34Interest expense recognized related to ineffective interest rate swap
    
    
    7,913
    
    
    
    Comprehensive loss
    
    $
    (64,137
    )
    
    $
    (7,191
    )
   6. Employee Benefits
 Defined Benefit Pension Plans
   Third QuarterPeriod from July 5,
    
    
    Period from June 29, 2008,2009 to October 3, 2009
    
    
    2008 to September 27, 2008Service cost
    
    $
    452
    
    
    $
    561Interest cost on projected benefit obligation
    
    
    1,125
    
    
    
    1,109Expected return on plan assets
    
    
    (1,132
    )
    
    
    (1,501
    )Amortization of unrecognized loss (gain)
    
    
    180
    
    
    
    (91
    )Net periodic pension cost
    
    $
    625
    
    
    $
    78
 16




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Nine Months EndedPeriod from January 4,
    
    
    Period from December 29,2009 to October 3, 2009
    
    
    2007 to September 27, 2008Service cost
    
    $
    1,356
    
    
    $
    1,684Interest cost on projected benefit obligation
    
    
    3,375
    
    
    
    3,326Expected return on plan assets
    
    
    (3,396
    )
    
    
    (4,501
    )Amortization of unrecognized loss (gain)
    
    
    540
    
    
    
    (274
    )Amortization of unrecognized prior service cost
    
    
    
    
    
    
    1Net periodic pension cost
    
    $
    1,875
    
    
    $
    236
 7. Revolving Credit Facility
    8. Derivatives
     17




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Balance at January 3, 2009
    
    $
    13,229Unrealized losses in accumulated other comprehensive loss
    
    
    1,533Charges associated with ineffective interest rate swap recorded to interest expense
    
    
    (11,556
    )Balance at October 3, 2009
    
    $
    3,206
 9. Mortgage
    2011
    
    $
    1,8172012
    
    
    3,8132013
    
    
    4,1192014
    
    
    4,3922015
    
    
    4,683Thereafter
    
    
    266,845
 18




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10. Fair Value Measurements
  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, or
Unadjusted quoted prices for identical or similar assets or liabilities in markets that are not active, or
Inputs other than quoted prices that are observable for the asset or liability.Level 3
    
    Unobservable inputs for the asset or liability.
    Fair value at January 3, 2009
    
    $
    (13,229
    )Unrealized gains included in earnings, net
    
    
    4,216Unrealized losses in accumulated other comprehensive loss
    
    
    (1,533
    )Fair value at October 3, 2009
    
    $
    (10,546
    )
   11. Termination and Modification Agreement with G-P
  19




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12. Related Party Transactions
  13. Commitments and Contingencies
 Environmental and Legal Matters
  Collective Bargaining Agreements
  14. Subsequent Events
  20




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15. Recently Issued Accounting Pronouncements
        21




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16. Unaudited Supplemental Condensed Consolidating Financial Statements
 ,
  BlueLinxHoldings
    
    
    BlueLinx
    
    
    LLCInc.
    
    
    Corporation
    
    
    Subsidiaries
    
    
    Eliminations
    
    
    ConsolidatedNet sales
    
    $
    
    
    
    $
    449,363
    
    
    $
    7,457
    
    
    $
    (7,457
    )
    
    $
    449,363Cost of sales
    
    
    
    
    
    
    394,058
    
    
    
    
    
    
    
    
    
    
    
    394,058Gross profit
    
    
    
    
    
    
    55,305
    
    
    
    7,457
    
    
    
    (7,457
    )
    
    
    55,305Operating expenses (income):Selling, general and administrative
    
    
    1,399
    
    
    
    61,035
    
    
    
    47
    
    
    
    (7,457
    )
    
    
    55,024Depreciation and amortization
    
    
    
    
    
    
    2,922
    
    
    
    960
    
    
    
    
    
    
    
    3,882Total operating expenses
    
    
    1,399
    
    
    
    63,957
    
    
    
    1,007
    
    
    
    (7,457
    )
    
    
    58,906Operating (loss) income
    
    
    (1,399
    )
    
    
    (8,652
    )
    
    
    6,450
    
    
    
    
    
    
    
    (3,601
    )Non-operating expenses:Interest expense
    
    
    
    
    
    
    3,364
    
    
    
    4,623
    
    
    
    
    
    
    
    7,987Charges associated with ineffective interest rate swap
    
    
    
    
    
    
    1,431
    
    
    
    
    
    
    
    
    
    
    
    1,431Other expense (income), net
    
    
    
    
    
    
    386
    
    
    
    (62
    )
    
    
    
    
    
    
    324(Loss) income before (benefit from) provision for income
taxes
    
    
    (1,399
    )
    
    
    (13,833
    )
    
    
    1,889
    
    
    
    
    
    
    
    (13,343
    )(Benefit from) provision for income taxes
    
    
    (720
    )
    
    
    104
    
    
    
    736
    
    
    
    
    
    
    
    120Equity in (loss) income of subsidiaries
    
    
    (12,784
    )
    
    
    
    
    
    
    
    
    
    
    12,784
    
    
    
    Net income (loss)
    
    $
    (13,463
    )
    
    $
    (13,937
    )
    
    $
    1,153
    
    
    $
    12,784
    
    
    $
    (13,463
    )
  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
    
    
    
    205
    
    
    
    (7,617
    )
    
    
    73,793Depreciation and amortization
    
    
    
    
    
    
    3,869
    
    
    
    1,071
    
    
    
    
    
    
    
    4,940Total operating expenses
    
    
    2,189
    
    
    
    82,885
    
    
    
    1,276
    
    
    
    (7,617
    )
    
    
    78,733
 22




---



##### Table of Contents



BlueLinxHoldings
    
    
    BlueLinx
    
    
    LLCInc.
    
    
    Corporation
    
    
    Subsidiaries
    
    
    Eliminations
    
    
    ConsolidatedOperating (loss) income
    
    
    (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 (benefit from)
provision for income taxes
    
    
    (2,189
    )
    
    
    (3,615
    )
    
    
    1,464
    
    
    
    
    
    
    
    (4,340
    )(Benefit from) provision for income taxes
    
    
    (854
    )
    
    
    (1,463
    )
    
    
    571
    
    
    
    
    
    
    
    (1,746
    )Equity in (loss) income of subsidiaries
    
    
    (1,259
    )
    
    
    
    
    
    
    
    
    
    
    1,259
    
    
    
    Net (loss) income
    
    $
    (2,594
    )
    
    $
    (2,152
    )
    
    $
    893
    
    
    $
    1,259
    
    
    $
    (2,594
    )
  BlueLinxHoldings
    
    
    BlueLinx
    
    
    LLCInc.
    
    
    Corporation
    
    
    Subsidiaries
    
    
    Eliminations
    
    
    ConsolidatedNet sales
    
    $
    
    
    
    $
    1,280,000
    
    
    $
    22,460
    
    
    $
    (22,460
    )
    
    $
    1,280,000Cost of sales
    
    
    
    
    
    
    1,132,119
    
    
    
    
    
    
    
    
    
    
    
    1,132,119Gross profit
    
    
    
    
    
    
    147,881
    
    
    
    22,460
    
    
    
    (22,460
    )
    
    
    147,881Operating expenses (income):Selling, general and administrative
    
    
    4,466
    
    
    
    185,851
    
    
    
    (4,113
    )
    
    
    (22,460
    )
    
    
    163,744Net gain from terminating the Georgia-Pacific supply
agreement
    
    
    
    
    
    
    (17,554
    )
    
    
    
    
    
    
    
    
    
    
    (17,554
    )Depreciation and amortization
    
    
    
    
    
    
    10,189
    
    
    
    2,964
    
    
    
    
    
    
    
    13,153Total operating expenses (income)
    
    
    4,466
    
    
    
    178,486
    
    
    
    (1,149
    )
    
    
    (22,460
    )
    
    
    159,343Operating (loss) income
    
    
    (4,466
    )
    
    
    (30,605
    )
    
    
    23,609
    
    
    
    
    
    
    
    (11,462
    )Non-operating expenses:Interest expense
    
    
    
    
    
    
    10,042
    
    
    
    14,568
    
    
    
    
    
    
    
    24,610Charges associated with ineffective interest rate swap
    
    
    
    
    
    
    7,341
    
    
    
    
    
    
    
    
    
    
    
    7,341Write-off of debt issuance costs
    
    
    
    
    
    
    1,407
    
    
    
    
    
    
    
    
    
    
    
    1,407Other expense (income), net
    
    
    
    
    
    
    616
    
    
    
    (134
    )
    
    
    
    
    
    
    482(Loss) income before (benefit from) provision for
income taxes
    
    
    (4,466
    )
    
    
    (50,011
    )
    
    
    9,175
    
    
    
    
    
    
    
    (45,302
    )(Benefit from) provision for income taxes
    
    
    (3,679
    )
    
    
    28,287
    
    
    
    3,578
    
    
    
    
    
    
    
    28,186Equity in (loss) income of subsidiaries
    
    
    (72,701
    )
    
    
    
    
    
    
    
    
    
    
    72,701
    
    
    
    Net (loss) income
    
    $
    (73,488
    )
    
    $
    (78,298
    )
    
    $
    5,597
    
    
    $
    72,701
    
    
    $
    (73,488
    )
  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
    
    
    
    445
    
    
    
    (22,852
    )
    
    
    235,655Depreciation and amortization
    
    
    
    
    
    
    11,800
    
    
    
    3,211
    
    
    
    
    
    
    
    15,011Total operating expenses
    
    
    2,835
    
    
    
    267,027
    
    
    
    3,656
    
    
    
    (22,852
    )
    
    
    250,666Operating (loss) income
    
    
    (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 (benefit from)
provision for income taxes
    
    
    (2,835
    )
    
    
    (11,807
    )
    
    
    4,548
    
    
    
    
    
    
    
    (10,094
    )(Benefit from) provision for income taxes
    
    
    (1,106
    )
    
    
    (4,176
    )
    
    
    1,774
    
    
    
    
    
    
    
    (3,508
    )Equity in (loss) income of subsidiaries
    
    
    (4,857
    )
    
    
    
    
    
    
    
    
    
    
    4,857
    
    
    
    Net (loss) income
    
    $
    (6,586
    )
    
    $
    (7,631
    )
    
    $
    2,774
    
    
    $
    4,857
    
    
    $
    (6,586
    )
 23




---



##### Table of Contents



BlueLinxBlueLinx
    
    
    CorporationHoldings
    
    
    and
    
    
    LLCInc.
    
    
    Subsidiaries
    
    
    Subsidiaries
    
    
    Eliminations
    
    
    ConsolidatedAssets:Current assets:Cash
    
    $
    32
    
    
    $
    25,008
    
    
    $
    458
    
    
    $
    
    
    
    $
    25,498Receivables
    
    
    
    
    
    
    168,656
    
    
    
    
    
    
    
    
    
    
    
    168,656Inventories
    
    
    
    
    
    
    173,123
    
    
    
    
    
    
    
    
    
    
    
    173,123Deferred income tax assets
    
    
    602
    
    
    
    275
    
    
    
    
    
    
    
    (299
    )
    
    
    578Other current assets
    
    
    1,060
    
    
    
    31,393
    
    
    
    1,903
    
    
    
    
    
    
    
    34,356Intercompany receivable
    
    
    65,523
    
    
    
    7,809
    
    
    
    
    
    
    
    (73,332
    )
    
    
    Total current assets
    
    
    67,217
    
    
    
    406,264
    
    
    
    2,361
    
    
    
    (73,631
    )
    
    
    402,211Property, plant and equipment:Land and land improvements
    
    
    
    
    
    
    3,144
    
    
    
    49,575
    
    
    
    
    
    
    
    52,719Buildings
    
    
    
    
    
    
    7,317
    
    
    
    88,651
    
    
    
    
    
    
    
    95,968Machinery and equipment
    
    
    
    
    
    
    68,906
    
    
    
    
    
    
    
    
    
    
    
    68,906Construction in progress
    
    
    
    
    
    
    1,150
    
    
    
    
    
    
    
    
    
    
    
    1,150Property, plant and equipment, at cost
    
    
    
    
    
    
    80,517
    
    
    
    138,226
    
    
    
    
    
    
    
    218,743Accumulated depreciation
    
    
    
    
    
    
    (56,715
    )
    
    
    (22,151
    )
    
    
    
    
    
    
    (78,866
    )Property, plant and equipment, net
    
    
    
    
    
    
    23,802
    
    
    
    116,075
    
    
    
    
    
    
    
    139,877Investment in subsidiaries
    
    
    (19,918
    )
    
    
    
    
    
    
    
    
    
    
    19,918
    
    
    
    Other non-current assets
    
    
    
    
    
    
    14,141
    
    
    
    28,296
    
    
    
    
    
    
    
    42,437Total assets
    
    $
    47,299
    
    
    $
    444,207
    
    
    $
    146,732
    
    
    $
    (53,713
    )
    
    $
    584,525Liabilities :Current liabilities:Accounts payable
    
    $
    113
    
    
    $
    108,424
    
    
    $
    
    
    
    $
    
    
    
    $
    108,537Bank overdrafts
    
    
    
    
    
    
    20,016
    
    
    
    
    
    
    
    
    
    
    
    20,016Accrued compensation
    
    
    49
    
    
    
    5,196
    
    
    
    
    
    
    
    
    
    
    
    5,245Deferred income tax liabilities
    
    
    299
    
    
    
    
    
    
    
    
    
    
    
    (299
    )
    
    
    Other current liabilities
    
    
    
    
    
    
    23,256
    
    
    
    3,440
    
    
    
    
    
    
    
    26,696Intercompany payable
    
    
    7,809
    
    
    
    61,844
    
    
    
    3,679
    
    
    
    (73,332
    )
    
    
    Total current liabilities
    
    
    8,270
    
    
    
    218,736
    
    
    
    7,119
    
    
    
    (73,631
    )
    
    
    160,494Non-current liabilities :Long-term debt
    
    
    
    
    
    
    56,000
    
    
    
    285,669
    
    
    
    
    
    
    
    341,669Non-current deferred income tax liabilities
    
    
    
    
    
    
    149
    
    
    
    429
    
    
    
    
    
    
    
    578Other non-current liabilities
    
    
    
    
    
    
    36,455
    
    
    
    6,300
    
    
    
    
    
    
    
    42,755Total liabilities
    
    
    8,270
    
    
    
    311,340
    
    
    
    299,517
    
    
    
    (73,631
    )
    
    
    545,496Shareholders Equity/Parents Investment
    
    
    39,029
    
    
    
    132,867
    
    
    
    (152,785
    )
    
    
    19,918
    
    
    
    39,029Total liabilities and equity
    
    $
    47,299
    
    
    $
    444,207
    
    
    $
    146,732
    
    
    $
    (53,713
    )
    
    $
    584,525
 24




---



##### Table of Contents



BlueLinxBlueLinx
    
    
    Corporation
    
    
    LLCHoldings Inc.
    
    
    and Subsidiaries
    
    
    Subsidiaries
    
    
    Eliminations
    
    
    ConsolidatedAssets:Current assets:Cash
    
    $
    32
    
    
    $
    150,259
    
    
    $
    62
    
    
    $
    
    
    
    $
    150,353Receivables
    
    
    
    
    
    
    130,653
    
    
    
    
    
    
    
    
    
    
    
    130,653Inventories
    
    
    
    
    
    
    189,482
    
    
    
    
    
    
    
    
    
    
    
    189,482Deferred income tax assets
    
    
    290
    
    
    
    11,578
    
    
    
    
    
    
    
    
    
    
    
    11,868Other current assets
    
    
    371
    
    
    
    33,678
    
    
    
    3,302
    
    
    
    
    
    
    
    37,351Intercompany receivable
    
    
    40,146
    
    
    
    6,041
    
    
    
    
    
    
    
    (46,187
    )
    
    
    Total current assets
    
    
    40,839
    
    
    
    521,691
    
    
    
    3,364
    
    
    
    (46,187
    )
    
    
    519,707Property and equipment:Land and land improvements
    
    
    
    
    
    
    3,103
    
    
    
    50,323
    
    
    
    
    
    
    
    53,426Buildings
    
    
    
    
    
    
    7,497
    
    
    
    88,662
    
    
    
    
    
    
    
    96,159Machinery and equipment
    
    
    
    
    
    
    70,491
    
    
    
    
    
    
    
    
    
    
    
    70,491Construction in progress
    
    
    
    
    
    
    2,035
    
    
    
    
    
    
    
    
    
    
    
    2,035Property and equipment, at cost
    
    
    
    
    
    
    83,126
    
    
    
    138,985
    
    
    
    
    
    
    
    222,111Accumulated depreciation
    
    
    
    
    
    
    (50,150
    )
    
    
    (19,186
    )
    
    
    
    
    
    
    (69,336
    )Property and equipment, net
    
    
    
    
    
    
    32,976
    
    
    
    119,799
    
    
    
    
    
    
    
    152,775Investment in subsidiaries
    
    
    68,858
    
    
    
    
    
    
    
    
    
    
    
    (68,858
    )
    
    
    Non-current deferred income tax assets
    
    
    
    
    
    
    18,045
    
    
    
    
    
    
    
    (577
    )
    
    
    17,468Other non-current assets
    
    
    
    
    
    
    22,168
    
    
    
    20,289
    
    
    
    
    
    
    
    42,457Total assets
    
    $
    109,697
    
    
    $
    594,880
    
    
    $
    143,452
    
    
    $
    (115,622
    )
    
    $
    732,407Liabilities:Current liabilities:Accounts payable
    
    $
    117
    
    
    $
    78,250
    
    
    $
    
    
    
    $
    
    
    
    
    78,367Bank overdrafts
    
    
    
    
    
    
    24,715
    
    
    
    
    
    
    
    
    
    
    
    24,715Accrued compensation
    
    
    687
    
    
    
    10,865
    
    
    
    
    
    
    
    
    
    
    
    11,552Current maturities of long-term debt
    
    
    
    
    
    
    60,000
    
    
    
    
    
    
    
    
    
    
    
    60,000Other current liabilities
    
    
    
    
    
    
    20,934
    
    
    
    3,612
    
    
    
    
    
    
    
    24,546Intercompany payable
    
    
    6,041
    
    
    
    38,924
    
    
    
    1,222
    
    
    
    (46,187
    )
    
    
    Total current liabilities
    
    
    6,845
    
    
    
    233,688
    
    
    
    4,834
    
    
    
    (46,187
    )
    
    
    199,180Non-current liabilities:Long-term debt
    
    
    
    
    
    
    96,000
    
    
    
    288,870
    
    
    
    
    
    
    
    384,870Non-current deferred income tax liabilities
    
    
    
    
    
    
    
    
    
    
    577
    
    
    
    (577
    )
    
    
    Other non-current liabilities
    
    
    
    
    
    
    39,205
    
    
    
    6,300
    
    
    
    
    
    
    
    45,505Total liabilities
    
    
    6,845
    
    
    
    368,893
    
    
    
    300,581
    
    
    
    (46,764
    )
    
    
    629,555Shareholders Equity/Parents Investment
    
    
    102,852
    
    
    
    225,987
    
    
    
    (157,129
    )
    
    
    (68,858
    )
    
    
    102,852Total liabilities and equity
    
    $
    109,697
    
    
    $
    594,880
    
    
    $
    143,452
    
    
    $
    (115,622
    )
    
    $
    732,407
 25




---



##### Table of Contents



BlueLinxHoldings
    
    
    BlueLinx
    
    
    LLCInc.
    
    
    Corporation
    
    
    Subsidiaries
    
    
    Eliminations
    
    
    ConsolidatedCash flows from operating activities:Net (loss) income
    
    $
    (73,488
    )
    
    $
    (78,298
    )
    
    $
    5,597
    
    
    $
    72,701
    
    
    $
    (73,488
    )Adjustments to reconcile net (loss) income to cash (used
in) provided by operations:Depreciation and amortization
    
    
    
    
    
    
    10,189
    
    
    
    2,964
    
    
    
    
    
    
    
    13,153Amortization of debt issue costs
    
    
    
    
    
    
    1,354
    
    
    
    489
    
    
    
    
    
    
    
    1,843Net gain from terminating the Georgia-Pacific supply
agreement
    
    
    
    
    
    
    (17,554
    )
    
    
    
    
    
    
    
    
    
    
    (17,554
    )Payments from terminating the Georgia-Pacific supply
agreement
    
    
    
    
    
    
    9,412
    
    
    
    
    
    
    
    
    
    
    
    9,412Gain from sale properties
    
    
    
    
    
    
    (169
    )
    
    
    (4,237
    )
    
    
    
    
    
    
    (4,406
    )Prepayment penalty associated with sale of facility
    
    
    
    
    
    
    
    
    
    
    616
    
    
    
    
    
    
    
    616Charges associated with ineffective interest rate swap
    
    
    
    
    
    
    7,341
    
    
    
    
    
    
    
    
    
    
    
    7,341Write-off of debt issuance costs
    
    
    
    
    
    
    1,407
    
    
    
    
    
    
    
    
    
    
    
    1,407Vacant property charges, net
    
    
    
    
    
    
    457
    
    
    
    
    
    
    
    
    
    
    
    457Deferred income tax (benefit) provision
    
    
    (13
    )
    
    
    27,389
    
    
    
    (148
    )
    
    
    
    
    
    
    27,228Share-based compensation expense
    
    
    1,344
    
    
    
    826
    
    
    
    
    
    
    
    
    
    
    
    2,170Decrease in restricted cash
    
    
    
    
    
    
    3,380
    
    
    
    
    
    
    
    
    
    
    
    3,380Equity in earnings of subsidiaries
    
    
    72,701
    
    
    
    
    
    
    
    
    
    
    
    (72,701
    )
    
    
    Changes in assets and liabilities:Receivables
    
    
    
    
    
    
    (38,003
    )
    
    
    
    
    
    
    
    
    
    
    (38,003
    )Inventories
    
    
    
    
    
    
    16,359
    
    
    
    
    
    
    
    
    
    
    
    16,359Accounts payable
    
    
    (4
    )
    
    
    30,174
    
    
    
    
    
    
    
    
    
    
    
    30,170Changes in other working capital
    
    
    (1,327
    )
    
    
    8,173
    
    
    
    (235
    )
    
    
    
    
    
    
    6,611Intercompany receivable
    
    
    (1,758
    )
    
    
    (1,768
    )
    
    
    
    
    
    
    3,526
    
    
    
    Intercompany payable
    
    
    1,768
    
    
    
    (699
    )
    
    
    2,457
    
    
    
    (3,526
    )
    
    
    Other
    
    
    1
    
    
    
    (210
    )
    
    
    17
    
    
    
    
    
    
    
    (192
    )Net cash (used in) provided by operating activities
    
    
    (776
    )
    
    
    ( (20,240
    )
    
    
    7,520
    
    
    
    
    
    
    
    (13,496
    )Cash flows from investing activities:Investment in subsidiaries
    
    
    26,251
    
    
    
    
    
    
    
    
    
    
    
    (26,251
    )
    
    
    Property, plant and equipment investments
    
    
    
    
    
    
    (952
    )
    
    
    
    
    
    
    
    
    
    
    (952
    )Proceeds from sale of assets
    
    
    
    
    
    
    2,019
    
    
    
    6,435
    
    
    
    
    
    
    
    8,454Net cash provided by (used in) investing activities
    
    
    26,251
    
    
    
    1,067
    
    
    
    6,435
    
    
    
    (26,251
    )
    
    
    7,502Cash flows from financing activities:Net transactions with Parent
    
    
    
    
    
    
    (24,998
    )
    
    
    (1,253
    )
    
    
    26,251
    
    
    
    Repurchase of common stock
    
    
    (1,862
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (1,862
    )Net decrease in revolving credit facility
    
    
    
    
    
    
    (100,000
    )
    
    
    
    
    
    
    
    
    
    
    (100,000
    )Payment of principal on mortgage
    
    
    
    
    
    
    
    
    
    
    (3,201
    )
    
    
    
    
    
    
    (3,201
    )Prepayment fees associated with sale of facility
    
    
    
    
    
    
    
    
    
    
    (616
    )
    
    
    
    
    
    
    (616
    )Decrease in bank overdrafts
    
    
    
    
    
    
    (4,699
    )
    
    
    
    
    
    
    
    
    
    
    (4,699
    )Increase in restricted cash related to the mortgage
    
    
    
    
    
    
    
    
    
    
    (8,442
    )
    
    
    
    
    
    
    (8,442
    )Intercompany receivable
    
    
    (23,619
    )
    
    
    
    
    
    
    
    
    
    
    23,619
    
    
    
    Intercompany payable
    
    
    
    
    
    
    23,619
    
    
    
    
    
    
    
    (23,619
    )
    
    
    Other
    
    
    6
    
    
    
    
    
    
    
    (47
    )
    
    
    
    
    
    
    (41
    )Net cash (used in) provided by financing activities
    
    
    (25,475
    )
    
    
    (106,078
    )
    
    
    (13,559
    )
    
    
    26,251
    
    
    
    (118,861
    )(Decrease) increase in cash
    
    
    
    
    
    
    (125,251
    )
    
    
    396
    
    
    
    
    
    
    
    (124,855
    )Balance, beginning of period
    
    
    32
    
    
    
    150,259
    
    
    
    62
    
    
    
    
    
    
    
    150,353Balance, end of period
    
    $
    32
    
    
    $
    25,008
    
    
    $
    458
    
    
    $
    
    
    
    $
    25,498
 26




---



##### Table of Contents



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
(used in) provided by operations:Depreciation and amortization
    
    
    
    
    
    
    11,801
    
    
    
    3,210
    
    
    
    
    
    
    
    15,011Amortization of debt issue costs
    
    
    
    
    
    
    1,353
    
    
    
    470
    
    
    
    
    
    
    
    1,823Vacant 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
    )Decrease in restricted cash
    
    
    
    
    
    
    5,970
    
    
    
    
    
    
    
    
    
    
    
    5,970Equity 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
    
    
    (635
    )
    
    
    337
    
    
    
    
    
    
    
    298
    
    
    
    Intercompany payable
    
    
    (337
    )
    
    
    
    
    
    
    635
    
    
    
    (298
    )
    
    
    Other
    
    
    
    
    
    
    (3,745
    )
    
    
    5,713
    
    
    
    
    
    
    
    1,968Net cash (used in) provided by operating activities
    
    
    (2,330
    )
    
    
    99,844
    
    
    
    7,521
    
    
    
    
    
    
    
    105,035Cash 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
    )Increase in restricted cash related to the mortgage
    
    
    
    
    
    
    
    
    
    
    (5,461
    )
    
    
    
    
    
    
    (5,461
    )Intercompany receivable
    
    
    17,499
    
    
    
    
    
    
    
    
    
    
    
    (17,499
    )
    
    
    Intercompany payable
    
    
    
    
    
    
    (17,499
    )
    
    
    
    
    
    
    17,499
    
    
    
    Other
    
    
    6
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    6Net cash provided by (used in) financing activities
    
    
    18,015
    
    
    
    (60,246
    )
    
    
    9,985
    
    
    
    (15,684
    )
    
    
    (47,930
    )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
 27




---



##### Table of Contents



ITEM 2. MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
  
    
    changes in the prices, supply and/or demand for products which we distribute, especially
as a result of conditions in the residential housing market;
    
    inventory levels of new and existing homes for sale;
    
    general economic and business conditions in the United States;
    
    the financial condition and credit worthiness of our customers;
    
    the activities of competitors;
    
    changes in significant operating expenses;
    
    fuel costs;
    
    risk of losses associated with accidents;
    
    exposure to product liability claims;
    
    changes in the availability of capital and interest rates;
    
    immigration patterns and job and household formation;
    
    our ability to identify acquisition opportunities and effectively and cost-efficiently
integrate acquisitions;
    
    adverse weather patterns or conditions;
    
    acts of war or terrorist activities;
    
    variations in the performance of the financial markets, including the credit markets; and
 28




---



##### Table of Contents




    
    the other factors described herein under Factors Affecting Future Results in our Annual
Report on Form 10-K for the year ended January 3, 2009 as filed with the SEC.
  Overview
 Background
  Industry Conditions
  Supply Agreement with G-P
   29




---



##### Table of Contents



Selected Factors Affecting Our Operating Results
   Fiscal
    
    
    Fiscal
    
    
    Fiscal
    
    
    Fiscal
    
    
    Fiscal
    
    
    FiscalQ3 2009
    
    
    Q3 2008
    
    
    2009 YTD
    
    
    2008 YTD
    
    
    2008
    
    
    2007(Dollars in millions)Sales by CategoryStructural Products
    
    $
    202
    
    
    $
    366
    
    
    $
    567
    
    
    $
    1,181
    
    
    $
    1,422
    
    
    $
    2,098Specialty Products
    
    
    258
    
    
    
    376
    
    
    
    742
    
    
    
    1,133
    
    
    
    1,412
    
    
    
    1,802Other(1)
    
    
    (11
    )
    
    
    (15
    )
    
    
    (29
    )
    
    
    (36
    )
    
    
    (54
    )
    
    
    (66
    )Total Sales
    
    $
    449
    
    
    $
    727
    
    
    $
    1,280
    
    
    $
    2,278
    
    
    $
    2,780
    
    
    $
    3,834Sales VariancesUnit Volume $ Change
    
    $
    (235
    )
    
    $
    (337
    )
    
    $
    (917
    )
    
    $
    (868
    )
    
    $
    (1,161
    )
    
    $
    (896
    )Price/Other(1)
    
    
    (43
    )
    
    
    48
    
    
    
    (81
    )
    
    
    91
    
    
    
    107
    
    
    
    (169
    )Total $ Change
    
    $
    (278
    )
    
    $
    (289
    )
    
    $
    (998
    )
    
    $
    (777
    )
    
    $
    (1,054
    )
    
    $
    (1,065
    )Unit Volume % Change
    
    
    (31.7
    )%
    
    
    (32.6
    )%
    
    
    (39.6
    )%
    
    
    (27.9
    )%
    
    
    (29.7
    )%
    
    
    (18.0
    )%Price/Other(1)
    
    
    (6.5
    )%
    
    
    4.1
    %
    
    
    (3.8
    )%
    
    
    2.5
    %
    
    
    2.2
    %
    
    
    (3.7
    )%Total % Change
    
    
    (38.2
    )%
    
    
    (28.5
    )%
    
    
    (43.8
    )%
    
    
    (25.4
    )%
    
    
    (27.5
    )%
    
    
    (21.7
    )%
 
 (1)
    
    Other includes unallocated allowances and discounts.  Fiscal
    
    
    Fiscal
    
    
    Fiscal
    
    
    Fiscal
    
    
    Fiscal
    
    
    FiscalQ3 2009
    
    
    Q3 2008
    
    
    2009 YTD
    
    
    2008 YTD
    
    
    2008
    
    
    2007(Dollars in millions)Gross Margin $s byCategoryStructural Products
    
    $
    21
    
    
    $
    36
    
    
    $
    58
    
    
    $
    121
    
    
    $
    134
    
    
    $
    173Specialty Products
    
    
    39
    
    
    
    54
    
    
    
    102
    
    
    
    162
    
    
    
    200
    
    
    
    238Other (1)
    
    
    (5
    )
    
    
    (7
    )
    
    
    (12
    )
    
    
    (15
    )
    
    
    (19
    )
    
    
    (19
    )Total Gross Margin $s
    
    $
    55
    
    
    $
    83
    
    
    $
    148
    
    
    $
    268
    
    
    $
    315
    
    
    $
    392Gross Margin %s by CategoryStructural Products
    
    
    10.4
    %
    
    
    9.9
    %
    
    
    10.2
    %
    
    
    10.2
    %
    
    
    9.4
    %
    
    
    8.2
    %Specialty Products
    
    
    15.1
    %
    
    
    14.3
    %
    
    
    13.7
    %
    
    
    14.2
    %
    
    
    14.2
    %
    
    
    13.2
    %Total Gross Margin %s
    
    
    12.3
    %
    
    
    11.5
    %
    
    
    11.6
    %
    
    
    11.8
    %
    
    
    11.3
    %
    
    
    10.2
    %Unit Volume Change by ProductStructural Products
    
    
    (33.7
    )%
    
    
    (40.3
    )%
    
    
    (43.9
    )%
    
    
    (32.9
    )%
    
    
    (34.6
    )%
    
    
    (19.2
    )%Specialty Products
    
    
    (29.8
    )%
    
    
    (23.1
    )%
    
    
    (35.2
    )%
    
    
    (22.0
    )%
    
    
    (24.0
    )%
    
    
    (16.4
    )%Total Change in Unit Volume %s
    
    
    (31.7
    )%
    
    
    (32.6
    )%
    
    
    (39.6
    )%
    
    
    (27.9
    )%
    
    
    (29.7
    )%
    
    
    (18.0
    )%
 
 (1)
    
    Other includes unallocated allowances and discounts. 30




---



##### Table of Contents



Fiscal
    
    
    Fiscal
    
    
    Fiscal
    
    
    Fiscal
    
    
    Fiscal
    
    
    FiscalQ3 2009
    
    
    Q3 2008
    
    
    2009 YTD
    
    
    2008 YTD
    
    
    2008
    
    
    2007(Dollars in millions)Sales by ChannelWarehouse/Reload
    
    $
    345
    
    
    $
    540
    
    
    $
    959
    
    
    $
    1,673
    
    
    $
    2,044
    
    
    $
    2,763Direct
    
    
    115
    
    
    
    202
    
    
    
    350
    
    
    
    641
    
    
    
    790
    
    
    
    1,137Other(1)
    
    
    (11
    )
    
    
    (15
    )
    
    
    (29
    )
    
    
    (36
    )
    
    
    (54
    )
    
    
    (66
    )Total
    
    $
    449
    
    
    $
    727
    
    
    $
    1,280
    
    
    $
    2,278
    
    
    $
    2,780
    
    
    $
    3,834Gross Margin by ChannelWarehouse/Reload
    
    $
    53
    
    
    $
    77
    
    
    $
    137
    
    
    $
    243
    
    
    $
    284
    
    
    $
    344Direct
    
    
    7
    
    
    
    13
    
    
    
    23
    
    
    
    40
    
    
    
    50
    
    
    
    67Other(1)
    
    
    (5
    )
    
    
    (7
    )
    
    
    (12
    )
    
    
    (15
    )
    
    
    (19
    )
    
    
    (19
    )Total
    
    $
    55
    
    
    $
    83
    
    
    $
    148
    
    
    $
    268
    
    
    $
    315
    
    
    $
    392
 Fiscal
    
    Fiscal
    
    Fiscal
    
    Fiscal
    
    Fiscal
    
    FiscalQ3 2009
    
    Q3 2008
    
    2009 YTD
    
    2008 YTD
    
    2008
    
    2007(Dollars in millions)Gross Margin % by ChannelWarehouse/Reload
    
    
    15.4
    %
    
    
    14.3
    %
    
    
    14.3
    %
    
    
    14.5
    %
    
    
    13.9
    %
    
    
    12.5
    %Direct
    
    
    6.1
    %
    
    
    6.4
    %
    
    
    6.6
    %
    
    
    6.2
    %
    
    
    6.3
    %
    
    
    5.9
    %Total
    
    
    12.3
    %
    
    
    11.5
    %
    
    
    11.6
    %
    
    
    11.8
    %
    
    
    11.3
    %
    
    
    10.2
    %
 
 (1)
    
    Other includes unallocated allowances and adjustments. Fiscal Year
  Results of Operations
 Third Quarter of Fiscal 2009 Compared to Third Quarter of Fiscal 2008
  Period
    
    
    
    
    
    
    Periodfrom
    
    
    
    
    
    
    fromJuly 5, 2009
    
    
    % of
    
    
    June 29, 2008
    
    
    % ofto
    
    
    Net
    
    
    to
    
    
    NetOctober 3, 2009
    
    
    Sales
    
    
    September 27, 2008
    
    
    Sales(Dollars in thousands)Net sales
    
    $
    449,363
    
    
    
    100.0
    %
    
    $
    726,756
    
    
    
    100.0
    %Gross profit
    
    
    55,305
    
    
    
    12.3
    %
    
    
    83,249
    
    
    
    11.5
    %Selling, general & administrative
    
    
    55,024
    
    
    
    12.2
    %
    
    
    73,793
    
    
    
    10.2
    %Depreciation and amortization
    
    
    3,882
    
    
    
    0.9
    %
    
    
    4,940
    
    
    
    0.7
    %Operating (loss) income
    
    
    (3,601
    )
    
    
    (0.8
    )%
    
    
    4,516
    
    
    
    0.6
    %Interest expense
    
    
    7,987
    
    
    
    1.8
    %
    
    
    8,791
    
    
    
    1.2
    %Charges associated with ineffective interest rate swap
    
    
    1,431
    
    
    
    0.3
    %
    
    
    
    
    
    
    0.0
    %Other expense, net
    
    
    324
    
    
    
    0.1
    %
    
    
    65
    
    
    
    0.0
    %Loss before provision for (benefit from) income taxes
    
    
    (13,343
    )
    
    
    (3.0
    )%
    
    
    (4,340
    )
    
    
    (0.6
    )%Provision for (benefit from) income taxes
    
    
    120
    
    
    
    0.0
    %
    
    
    (1,746
    )
    
    
    (0.2
    )%Net income
    
    $
    (13,463
    )
    
    
    (3.0
    )%
    
    $
    (2,594
    )
    
    
    (0.4
    )%
 31




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##### Table of Contents



Net Sales.
 Gross Profit.
 Selling, General, and Administrative Expenses.
 Depreciation and Amortization.
 Operating (Loss) Income.
 Interest Expense, net.
 Charges associated with ineffective interest rate swap
 Provision for (Benefit from) Income Taxes.
 Net Loss.
  32




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##### Table of Contents



Year-to-Date Fiscal 2009 Compared to Year-to-Date Fiscal 2008
  Period
    
    
    
    
    
    
    Periodfrom
    
    
    
    
    
    
    fromJanuary 4, 2009
    
    
    % of
    
    
    December 29, 2007
    
    
    % ofto
    
    
    Net
    
    
    to
    
    
    NetOctober 3, 2009
    
    
    Sales
    
    
    September 27, 2008
    
    
    Sales(Unaudited)
    
    
    
    
    
    
    (Unaudited)(Dollars in thousands)Net sales
    
    $
    1,280,000
    
    
    
    100.0
    %
    
    $
    2,278,185
    
    
    
    100.0
    %Gross profit
    
    
    147,881
    
    
    
    11.6
    %
    
    
    268,487
    
    
    
    11.8
    %Selling, general & administrative
    
    
    163,744
    
    
    
    12.8
    %
    
    
    235,655
    
    
    
    10.3
    %Net gain from terminating the Georgia-Pacific supply agreement
    
    
    (17,554
    )
    
    
    (1.4
    )%
    
    
    
    
    
    
    0.0
    %Depreciation and amortization
    
    
    13,153
    
    
    
    1.0
    %
    
    
    15,011
    
    
    
    0.7
    %Operating (loss) income
    
    
    (11,462
    )
    
    
    (0.9
    )%
    
    
    17,821
    
    
    
    0.8
    %Interest expense
    
    
    24,610
    
    
    
    1.9
    %
    
    
    27,530
    
    
    
    1.2
    %Charges associated with ineffective interest rate swap
    
    
    7,341
    
    
    
    0.6
    %
    
    
    
    
    
    
    0.0
    %Write-off of debt issuance costs
    
    
    1,407
    
    
    
    0.1
    %
    
    
    
    
    
    
    0.0
    %Other expense, net
    
    
    482
    
    
    
    0.0
    %
    
    
    385
    
    
    
    0.0
    %Loss before provision for (benefit from) income taxes
    
    
    (45,302
    )
    
    
    (3.5
    )%
    
    
    (10,094
    )
    
    
    (0.4
    )%Provision for (benefit from) income taxes
    
    
    28,186
    
    
    
    2.2
    %
    
    
    (3,508
    )
    
    
    (0.2
    )%Net loss
    
    $
    (73,488
    )
    
    
    (5.7
    )%
    
    $
    (6,586
    )
    
    
    (0.3
    )%
 Net Sales.
 Gross Profit.
 Selling, General, and Administrative Expenses.
 Net Gain From Terminating the Georgia-Pacific Supply Agreement.
 Depreciation and Amortization.
 33




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##### Table of Contents



Operating (Loss) Income.
 Interest Expense, net.
 Charges associated with ineffective interest rate swap
 Write-off debt issue costs
 Provision for Income Taxes.
 Net loss
  Seasonality
  Liquidity and Capital Resources
   34




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##### Table of Contents



October 3, 2009
    
    January 3, 2009(Dollars in thousands)(Unaudited)Working capital
    
    $
    241,717
    
    
    $
    320,527
 Period from
    
    Period fromJanuary 4,
    
    December 29,2009 to
    
    2007 toOctober 3, 2009
    
    September 27, 2008(Dollars in thousands)(Unaudited)Cash flows (used in) provided by operating activities
    
    $
    (13,496
    )
    
    $
    105,035Cash flows provided by (used in) investing activities
    
    
    7,502
    
    
    
    (1,766
    )Cash flows used in financing activities
    
    
    (118,861
    )
    
    
    (47,930
    )
 Working Capital
  Operating Activities
   Investing Activities
   35




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##### Table of Contents



Financing Activities
  Debt and Credit Sources
       36




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##### Table of Contents



Balance at January 3, 2009
    
    $
    13,229Unrealized losses in accumulated other comprehensive loss
    
    
    1,533Charges associated with ineffective interest rate swap recorded to interest expense
    
    
    (11,556
    )Balance at October 3, 2009
    
    $
    3,206
  Contractual Obligations
  Critical Accounting Policies
  37




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##### Table of Contents



Revenue Recognition
   
    
    We are the primary obligor responsible for fulfillment and all other aspects of
the customer relationship.
    
    Title passes to BlueLinx, and we carry all risk of loss related to warehouse,
reload and inventory shipped directly from vendors to our customers.
    
    We are responsible for all product returns.
    
    We control the selling price for all channels.
    
    We select the supplier.
    
    We bear all credit risk.
   Allowance for Doubtful Accounts and Related Reserves
  Inventory Valuation
   38




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##### Table of Contents



Stock-Based Compensation
  Consideration Received from Vendors and Paid to Customers
   Fair Value Measurements
    Impairment of Long-Lived Assets
    39




---



##### Table of Contents



Income Taxes
   Restructuring Charges
  Self-Insurance
  40




---



##### Table of Contents



Recently Issued Accounting Pronouncements
        41




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##### Table of Contents



ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
   
 ITEM 4. CONTROLS AND PROCEDURES
   
 PART II. OTHER INFORMATION
 
 ITEM 1. LEGAL PROCEEDINGS
  
 ITEM 1A. RISK FACTORS
  42




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##### Table of Contents



ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS
   Total Number of
    
    ApproximateShares Purchased
    
    Dollar Value ofTotal
    
    Average
    
    as Part of Publicly
    
    Shares that MayNumber of
    
    Price Paid
    
    Announced
    
    Yet Be PurchasedPeriod
    
    Shares
    
    Per Share
    
    Program
    
    Under the ProgramJuly 5  August 3
    
    
    75,547
    
    
    $
    3.16
    
    
    
    711,852
    
    
    $
    8,136,649August 4  September 2
    
    
    
    
    
    
    
    
    
    
    711,852
    
    
    $
    8,136,649September 3  October 3
    
    
    
    
    
    
    
    
    
    
    711,852
    
    
    $
    8,136,649Total
    
    
    75,547
    
    
    $
    3.16
    
    
    
    711,852
    
    
    $
    8,136,649
 
 ITEM 6. EXHIBITS
 ExhibitNumber
    
    Description10.1*
    
    Loan and Security Agreement, dated as of June 9, 2006, between the entities set forth therein
collectively as borrower and German American Capital Corporation as Lender10.2*
    
    Amended and Restated Loan and Security Agreement, dated August 4, 2006, by and between, BlueLinx
Corporation, Wachovia, and other signatories listed therein31.1
    
    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.
 
 *
    
    Portions of this document are omitted and filed separately with the SEC pursuant to a request for
confidential treatment in accordance with Rule 24b-2 of the Exchange Act. 43




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##### Table of Contents



SIGNATURES
  BlueLinx Holdings Inc.(Registrant)Date: November 6, 2009
    /s/ H. Douglas GoforthH. Douglas GoforthChief Financial Officer and Treasurer 44




---



##### Table of Contents



EXHIBIT INDEX
 ExhibitNumber
    
    Description10.1*
    
    Loan and Security Agreement, dated as of June 9, 2006, between the entities set forth therein
collectively as borrower and German American Capital Corporation as Lender10.2*
    
    Amended and Restated Loan and Security Agreement, dated August 4, 2006, by and between, BlueLinx
Corporation, Wachovia, and other signatories listed therein31.1
    
    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.
 
 *
    
    Portions of this document are omitted and filed separately with the SEC pursuant to a request for
confidential treatment in accordance with Rule 24b-2 of the Exchange Act. 
 45