##### 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 April 2, 2011
 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 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 April 2, 2011
 INDEX
 PAGEPART I. FINANCIAL INFORMATIONItem 1. Financial Statements  BlueLinx Holdings Inc. (Unaudited)
    
    
    3Consolidated Statements of Operations
    
    
    3Consolidated Balance Sheets
    
    
    4Consolidated Statements of Cash Flows
    
    
    5Notes to Consolidated Financial Statements
    
    
    6Item 2. Managements Discussion and Analysis of Financial Condition and Results of Operations
    
    
    23Item 3. Quantitative and Qualitative Disclosures About Market Risk
    
    
    32Item 4. Controls and Procedures
    
    
    32PART II. OTHER INFORMATIONItem 1A. Risk Factors
    
    
    32Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
    
    
    32Item 6. Exhibits
    
    
    33Signatures
    
    
    34Exhibit Index
    
    
    35EX-31.1EX-31.2EX-32.1EX-32.2
   2




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PART I. FINANCIAL INFORMATION
 
 ITEM 1.
    
    FINANCIAL STATEMENTS (UNAUDITED)
 BLUELINX HOLDINGS INC.
 
 CONSOLIDATED STATEMENTS OF OPERATIONS
 (In thousands, except per share data)
 (unaudited)
 Period from
    
    
    Period fromJanuary 2, 2011
    
    
    January 3, 2010to
    
    
    toApril 2, 2011
    
    
    April 3, 2010Net sales
    
    $
    390,604
    
    
    $
    431,050Cost of sales
    
    
    344,335
    
    
    
    378,772Gross profit
    
    
    46,269
    
    
    
    52,278Operating expenses:Selling, general, and administrative
    
    
    48,446
    
    
    
    56,514Depreciation and amortization
    
    
    2,938
    
    
    
    3,744Total operating expenses
    
    
    51,384
    
    
    
    60,258Operating loss
    
    
    (5,115
    )
    
    
    (7,980
    )Non-operating expenses:Interest expense, net
    
    
    9,061
    
    
    
    7,315Changes associated with the ineffective interest rate swap
    
    
    (1,751
    )
    
    
    (805
    )Other expense (income), net
    
    
    15
    
    
    
    233Loss before (benefit from) provision for income taxes
    
    
    (12,440
    )
    
    
    (14,723
    )(Benefit from) provision for income taxes
    
    
    (114
    )
    
    
    16Net loss
    
    $
    (12,326
    )
    
    $
    (14,739
    )Basic and diluted weighted average number of common shares outstanding
    
    
    30,853
    
    
    
    30,587Basic and diluted net loss per share applicable to common stock
    
    $
    (0.40
    )
    
    $
    (0.48
    )
   3




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BLUELINX HOLDINGS INC.
 
 CONSOLIDATED BALANCE SHEETS
 (In thousands, except share and per share data)
 (unaudited)
 April 2, 2011
    
    
    January 1, 2011Assets:Current assets:Cash
    
    $
    6,151
    
    
    $
    14,297Receivables, net
    
    
    169,924
    
    
    
    119,202Inventories, net
    
    
    220,312
    
    
    
    188,250Deferred income tax assets, net
    
    
    59
    
    
    
    143Other current assets
    
    
    18,653
    
    
    
    22,768Total current assets
    
    
    415,099
    
    
    
    344,660Property, plant, and equipment:Land and land improvements
    
    
    52,506
    
    
    
    52,540Buildings
    
    
    96,832
    
    
    
    96,720Machinery and equipment
    
    
    71,861
    
    
    
    70,860Construction in progress
    
    
    1,247
    
    
    
    2,028Property, plant, and equipment, at cost
    
    
    222,446
    
    
    
    222,148Accumulated depreciation
    
    
    (94,319
    )
    
    
    (92,517
    )Property, plant, and equipment, net
    
    
    128,127
    
    
    
    129,631Other non-current assets
    
    
    56,393
    
    
    
    50,728Total assets
    
    $
    599,619
    
    
    $
    525,019Liabilities:Current liabilities:Accounts payable
    
    $
    94,910
    
    
    $
    62,827Bank overdrafts
    
    
    35,671
    
    
    
    23,089Accrued compensation
    
    
    4,501
    
    
    
    4,594Current maturities of long term debt
    
    
    1,960
    
    
    
    1,190Other current liabilities
    
    
    13,899
    
    
    
    16,792Total current liabilities
    
    
    150,941
    
    
    
    108,492Non-current liabilities:Long-term debt
    
    
    424,178
    
    
    
    381,679Deferred income tax liabilities, net
    
    
    107
    
    
    
    192Other non-current liabilities
    
    
    34,401
    
    
    
    33,665Total liabilities
    
    
    609,627
    
    
    
    524,028Stockholders (Deficit) Equity:Common Stock, $0.01 par value, 100,000,000 shares authorized; 33,215,906 and 32,179,253
shares issued at April 2, 2011 and January
1, 2011, respectively;
    
    
    332
    
    
    
    327Additional paid-in-capital
    
    
    148,224
    
    
    
    147,427Accumulated other comprehensive loss
    
    
    (6,827
    )
    
    
    (7,358
    )Accumulated deficit
    
    
    (151,737
    )
    
    
    (139,405
    )Total stockholders (deficit) equity
    
    
    (10,008
    )
    
    
    991Total liabilities and stockholders (deficit) equity
    
    $
    599,619
    
    
    $
    525,019
   4




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BLUELINX HOLDINGS INC.
 
 CONSOLIDATED STATEMENTS OF CASH FLOWS
 (In thousands)
 (unaudited)
 Period from
    
    
    Period fromJanuary 2, 2011
    
    
    January 3, 2010to
    
    
    toApril 2, 2011
    
    
    April 3, 2010Cash flows from operating activities:Net loss
    
    $
    (12,326
    )
    
    $
    (14,739
    )Adjustments to reconcile net loss to cash used in operating activities:Depreciation and amortization
    
    
    2,938
    
    
    
    3,744Amortization of debt issue costs
    
    
    447
    
    
    
    (73
    )Payment from terminating the Georgia Pacific supply agreement
    
    
    
    
    
    
    4,706Gain from sale of properties
    
    
    (7,222
    )
    
    
    Changes associated with ineffective interest rate swap
    
    
    (1,751
    )
    
    
    (805
    )Deferred income tax benefit
    
    
    (215
    )
    
    
    (207
    )Share-based compensation expense
    
    
    816
    
    
    
    1,043(Decrease) increase in restricted cash related to the ineffective interest rate swap, insurance, and other
    
    
    (6
    )
    
    
    5,882Changes in assets and liabilities:Receivables
    
    
    (50,722
    )
    
    
    (64,595
    )Inventories
    
    
    (32,062
    )
    
    
    (25,614
    )Accounts payable
    
    
    32,083
    
    
    
    21,320Changes in other working capital
    
    
    3,754
    
    
    
    22,879Other
    
    
    1,458
    
    
    
    (134
    )Net cash used in operating activities
    
    
    (62,808
    )
    
    
    (46,593
    )Cash flows from investing activities:Property, plant and equipment investments
    
    
    (3,695
    )
    
    
    (409
    )Proceeds from disposition of assets
    
    
    8,763
    
    
    
    149Net cash provided by (used in) investing activities
    
    
    5,068
    
    
    
    (260
    )Cash flows from financing activities:Repurchase of common stock
    
    
    
    
    
    
    (583
    )Increase in the revolving credit facility
    
    
    43,269
    
    
    
    24,665Payments on capital lease obligations
    
    
    (72
    )
    
    
    (402
    )Increase in bank overdrafts
    
    
    12,582
    
    
    
    9,953Increase in restricted cash related to the mortgage
    
    
    (6,185
    )
    
    
    (2,864
    )Other
    
    
    
    
    
    
    6Net cash provided by financing activities
    
    
    49,594
    
    
    
    30,775Decrease in cash
    
    
    (8,146
    )
    
    
    (16,078
    )Balance, beginning of period
    
    
    14,297
    
    
    
    29,457Balance, end of period
    
    $
    6,151
    
    
    $
    13,379
   5




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BLUELINX HOLDINGS INC.
 
 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
 APRIL 2, 2011
 1. Basis of Presentation and Background
 Basis of Presentation
    2. Summary of Significant Accounting Policies
 Revenue Recognition
   
    
    We are the primary obligor responsible for fulfillment and all other aspects
of the customer relationship.
 
    
    Title passes to BlueLinx and we carry all risk of loss related to warehouse
and third-party (reload) inventory and inventory shipped directly from
vendors to our customers.
 
    
    We are responsible for all product returns.
 
    
    We control the selling price for all channels.
 
    
    We select the supplier.
 
    
    We bear all credit risk.
  6




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Cash and Cash Equivalents
  Restricted Cash
   April 2,
    
    
    January 1,2011
    
    
    2011Cash in escrow:Mortgage
    
    $
    36,798
    
    
    $
    30,616Insurance
    
    
    9,032
    
    
    
    9,430Other
    
    
    2,527
    
    
    
    2,124Total
    
    $
    48,357
    
    
    $
    42,170
 Allowance for Doubtful Accounts and Related Reserves
  Inventory Valuation
    7




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Consignment Inventory
  Consideration Received from Vendors and Paid to Customers
   Earnings per Common Share
    Stock-Based Compensation
   8




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Income Taxes
    Impairment of Long-Lived Assets
     9




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Self-Insurance
  3. Restructuring Charges
   2007 Facility Consolidation and Severance Costs
   10




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Balance at January 1, 2011
    
    $
    10,227Payments
    
    
    (537
    )Accretion of liability
    
    
    131Balance at April 2, 2011
    
    $
    9,821
 2008 Facility Consolidation and Severance Costs
   Balance at January 1, 2011
    
    $
    72Payments
    
    
    (77
    )Sublease income
    
    
    45Balance at April 2, 2011
    
    $
    40
 2009 Facility Consolidations and Severance Costs
   Balance at January 1, 2011
    
    $
    523Payments
    
    
    (39
    )Balance at April 2, 2011
    
    $
    484
 2010 Facility Consolidations and Severance Costs
   Balance at January 1, 2011
    
    $
    777Assumption Changes
    
    
    (61
    )Payments
    
    
    (209
    )Balance at April 2, 2011
    
    $
    507
 4. Assets Held for Sale and Net Gain on Disposition
   11




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5. Comprehensive Loss
  Period from
    
    
    Period fromJanuary 2, 2011
    
    
    January 3, 2010to
    
    
    toApril 2, 2011
    
    
    April 3, 2010Net loss
    
    $
    (12,326
    )
    
    $
    (14,739
    )Other comprehensive income:Foreign currency translation
    
    
    296
    
    
    
    397*Unrealized gain from cash flow hedge, net of taxes
    
    
    334
    
    
    
    329Comprehensive loss
    
    $
    (11,696
    )
    
    $
    (14,013
    )
 *
    
    For the first quarter of fiscal 2011 and the first quarter of fiscal 2010, the income tax
benefit related to our interest rate swap was $0.2 million and $0.2 million, respectively. 6. Employee Benefits
 Defined Benefit Pension Plans
   Period from January 2, 2011,
    
    
    Period from January 3, 2010,to April 2, 2011
    
    
    to April 3, 2010(In thousands)Service cost
    
    $
    523
    
    
    $
    498Interest cost on projected benefit obligation
    
    
    1,152
    
    
    
    1,186Expected return on plan assets
    
    
    (1,376
    )
    
    
    (1,232
    )Amortization of unrecognized loss
    
    
    145
    
    
    
    123Net periodic pension cost
    
    $
    444
    
    
    $
    575
 7. Revolving Credit Facility
    12




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13




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8. Mortgage
   2011
    
    $
    1,1902012
    
    
    3,0542013
    
    
    3,3092014
    
    
    3,5292015
    
    
    3,763Thereafter
    
    
    270,825
 9. Derivatives
      14




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Balance at January 1, 2011
    
    $
    445Amortization of accumulated other comprehensive loss recorded to interest expense
    
    
    (445
    )Balance at April 2, 2011
    
    $
    
  10. Fair Value Measurements
     Fair value at January 1, 2011
    
    $
    (2,195
    )Realized gains included in earnings, net
    
    
    2,195Fair value at April 2, 2011
    
    $
    
    15




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##### Table of Contents



11. Related Party Transactions
  12. Commitments and Contingencies
 Legal Proceedings
  Environmental and Legal Matters
  Collective Bargaining Agreements
  13. Subsequent Events
   16




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14. Unaudited Supplemental Consolidating Financial Statements
 ,
  BlueLinxBlueLinx
    
    
    CorporationHoldings
    
    
    and
    
    
    LLCInc.
    
    
    Subsidiaries
    
    
    Subsidiaries
    
    
    Eliminations
    
    
    ConsolidatedNet sales
    
    $
    
    
    
    $
    390,604
    
    
    $
    7,429
    
    
    $
    (7,429
    )
    
    $
    390,604Cost of sales
    
    
    
    
    
    
    344,335
    
    
    
    
    
    
    
    
    
    
    
    344,335Gross profit
    
    
    
    
    
    
    46,269
    
    
    
    7,429
    
    
    
    (7,429
    )
    
    
    46,269Operating expenses:Selling, general and administrative
    
    
    1,618
    
    
    
    61,479
    
    
    
    (7,222
    )
    
    
    (7,429
    )
    
    
    48,446Depreciation and amortization
    
    
    
    
    
    
    1,985
    
    
    
    953
    
    
    
    
    
    
    
    2,938Total operating expenses
    
    
    1,618
    
    
    
    63,464
    
    
    
    (6,269
    )
    
    
    (7,429
    )
    
    
    51,384Operating (loss) income
    
    
    (1,618
    )
    
    
    (17,195
    )
    
    
    13,698
    
    
    
    
    
    
    
    (5,115
    )Non-operating expenses:Interest expense
    
    
    
    
    
    
    4,312
    
    
    
    4,749
    
    
    
    
    
    
    
    9,061Changes associated with ineffective interest rate swap
    
    
    
    
    
    
    (1,751
    )
    
    
    
    
    
    
    
    
    
    
    (1,751
    )Other expense (income), net
    
    
    
    
    
    
    21
    
    
    
    (6
    )
    
    
    
    
    
    
    15(Loss) income before (benefit from) provision for income
taxes
    
    
    (1,618
    )
    
    
    (19,777
    )
    
    
    8,955
    
    
    
    
    
    
    
    (12,440
    )(Benefit from) provision for income taxes
    
    
    (2,847
    )
    
    
    (759
    )
    
    
    3,492
    
    
    
    
    
    
    
    (114
    )Equity in loss of subsidiaries
    
    
    (13,555
    )
    
    
    
    
    
    
    
    
    
    
    13,555
    
    
    
    Net (loss) income
    
    $
    (12,326
    )
    
    $
    (19,018
    )
    
    $
    5,463
    
    
    $
    13,555
    
    
    $
    (12,326
    )
  17




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BlueLinxBlueLinx
    
    
    CorporationHoldings
    
    
    and
    
    
    LLCInc.
    
    
    Subsidiaries
    
    
    Subsidiaries
    
    
    Eliminations
    
    
    ConsolidatedNet sales
    
    $
    
    
    
    $
    431,050
    
    
    $
    7,456
    
    
    $
    (7,456
    )
    
    $
    431,050Cost of sales
    
    
    
    
    
    
    378,772
    
    
    
    
    
    
    
    
    
    
    
    378,772Gross profit
    
    
    
    
    
    
    52,278
    
    
    
    7,456
    
    
    
    (7,456
    )
    
    
    52,278Operating expenses:Selling, general and administrative
    
    
    1,895
    
    
    
    62,030
    
    
    
    45
    
    
    
    (7,456
    )
    
    
    56,514Depreciation and amortization
    
    
    
    
    
    
    2,784
    
    
    
    960
    
    
    
    
    
    
    
    3,744Total operating expenses
    
    
    1,895
    
    
    
    64,814
    
    
    
    1,005
    
    
    
    (7,456
    )
    
    
    60,258Operating (loss) income
    
    
    (1,895
    )
    
    
    (12,536
    )
    
    
    6,451
    
    
    
    
    
    
    
    (7,980
    )Non-operating expenses:Interest expense
    
    
    
    
    
    
    2,566
    
    
    
    4,749
    
    
    
    
    
    
    
    7,315Changes associated with ineffective interest rate swap
    
    
    
    
    
    
    (805
    )
    
    
    
    
    
    
    
    
    
    
    (805
    )Other expense (income), net
    
    
    
    
    
    
    262
    
    
    
    (29
    )
    
    
    
    
    
    
    233(Loss) income before (benefit from) provision for income
taxes
    
    
    (1,895
    )
    
    
    (14,559
    )
    
    
    1,731
    
    
    
    
    
    
    
    (14,723
    )(Benefit from) provision for income taxes
    
    
    (688
    )
    
    
    29
    
    
    
    675
    
    
    
    
    
    
    
    16Equity in loss of subsidiaries
    
    
    (13,532
    )
    
    
    
    
    
    
    
    
    
    
    13,532
    
    
    
    Net (loss) income
    
    $
    (14,739
    )
    
    $
    (14,588
    )
    
    $
    1,056
    
    
    $
    13,532
    
    
    $
    (14,739
    )
  18




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BlueLinxBlueLinx
    
    
    Corporation
    
    
    LLCHoldings Inc.
    
    
    and Subsidiaries
    
    
    Subsidiaries
    
    
    Eliminations
    
    
    ConsolidatedAssets:Current assets:Cash
    
    $
    47
    
    
    $
    6,104
    
    
    
    
    
    
    $
    
    
    
    $
    6,151Receivables
    
    
    
    
    
    
    169,924
    
    
    
    
    
    
    
    
    
    
    
    169,924Inventories
    
    
    
    
    
    
    220,312
    
    
    
    
    
    
    
    
    
    
    
    220,312Deferred income tax assets
    
    
    
    
    
    
    59
    
    
    
    
    
    
    
    
    
    
    
    59Other current assets
    
    
    845
    
    
    
    15,275
    
    
    
    2,533
    
    
    
    
    
    
    
    18,653Intercompany receivable
    
    
    62,875
    
    
    
    10,380
    
    
    
    275
    
    
    
    (73,530
    )
    
    
    Total current assets
    
    
    63,767
    
    
    
    422,054
    
    
    
    2,808
    
    
    
    (73,530
    )
    
    
    415,099Property and equipment:Land and land improvements
    
    
    
    
    
    
    3,050
    
    
    
    49,456
    
    
    
    
    
    
    
    52,506Buildings
    
    
    
    
    
    
    8,494
    
    
    
    88,338
    
    
    
    
    
    
    
    96,832Machinery and equipment
    
    
    
    
    
    
    71,861
    
    
    
    
    
    
    
    
    
    
    
    71,861Construction in progress
    
    
    
    
    
    
    1,247
    
    
    
    
    
    
    
    
    
    
    
    1,247Property and equipment, at cost
    
    
    
    
    
    
    84,652
    
    
    
    137,794
    
    
    
    
    
    
    
    222,446Accumulated depreciation
    
    
    
    
    
    
    (67,285
    )
    
    
    (27,034
    )
    
    
    
    
    
    
    (94,319
    )Property and equipment, net
    
    
    
    
    
    
    17,367
    
    
    
    110,760
    
    
    
    
    
    
    
    128,127Investment in subsidiaries
    
    
    (61,710
    )
    
    
    
    
    
    
    
    
    
    
    61,710
    
    
    
    Non-current deferred income tax assets
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Other non-current assets
    
    
    
    
    
    
    19,008
    
    
    
    37,385
    
    
    

    
    
    
    56,393Total assets
    
    $
    2,057
    
    
    $
    458,429
    
    
    $
    150,953
    
    
    $
    (11,820
    )
    
    $
    599,619Liabilities:Current liabilities:Accounts payable
    
    $
    160
    
    
    $
    94,750
    
    
    $
    
    
    
    $
    
    
    
    
    94,910Bank overdrafts
    
    
    
    
    
    
    35,671
    
    
    
    
    
    
    
    
    
    
    
    35,671Accrued compensation
    
    
    20
    
    
    
    4,481
    
    
    
    
    
    
    
    
    
    
    
    4,501Current maturities of long-term debt
    
    
    
    
    
    
    
    
    
    
    1,960
    
    
    
    
    
    
    
    1,960Other current liabilities
    
    
    
    
    
    
    11,796
    
    
    
    859
    
    
    
    1,244
    
    
    
    13,899Intercompany payable
    
    
    11,899
    
    
    
    60,501
    
    
    
    2,374
    
    
    
    (74,774
    )
    
    
    Total current liabilities
    
    
    12,079
    
    
    
    207,199
    
    
    
    5,193
    
    
    
    (73,530
    )
    
    
    150,941Non-current liabilities:Long-term debt
    
    
    
    
    
    
    140,469
    
    
    
    283,709
    
    
    
    
    
    
    
    424,178Non-current deferred income tax
liabilities
    
    
    
    
    
    
    107
    
    
    
    
    
    
    
    
    
    
    
    107Other non-current liabilities
    
    
    (13
    )
    
    
    34,414
    
    
    
    
    
    
    
    
    
    
    
    34,401Total liabilities
    
    
    12,066
    
    
    
    382,189
    
    
    
    288,902
    
    
    
    (73,530
    )
    
    
    609,627Stockholders (deficit)/parents investment
    
    
    (10,009
    )
    
    
    76,240
    
    
    
    (137,949
    )
    
    
    61,710
    
    
    
    (10,008
    )Total liabilities and deficit
    
    $
    2,057
    
    
    $
    458,429
    
    
    $
    150,953
    
    
    $
    (11,820
    )
    
    $
    599,619
  19




---



##### Table of Contents



BlueLinxBlueLinx
    
    
    Corporation
    
    
    LLCHoldings Inc.
    
    
    and Subsidiaries
    
    
    Subsidiaries
    
    
    Eliminations
    
    
    ConsolidatedAssets:Current assets:Cash
    
    $
    384
    
    
    $
    13,913
    
    
    $
    
    
    
    $
    
    
    
    $
    14,297Receivables
    
    
    
    
    
    
    119,202
    
    
    
    
    
    
    
    
    
    
    
    119,202Inventories
    
    
    
    
    
    
    188,250
    
    
    
    
    
    
    
    
    
    
    
    188,250Deferred income tax assets, current
    
    
    
    
    
    
    143
    
    
    
    
    
    
    
    
    
    
    
    143Other current assets
    
    
    669
    
    
    
    20,500
    
    
    
    1,599
    
    
    
    
    
    
    
    22,768Intercompany receivable
    
    
    57,208
    
    
    
    8,759
    
    
    
    
    
    
    
    (65,967
    )
    
    
    Total current assets
    
    
    58,261
    
    
    
    350,767
    
    
    
    1,599
    
    
    
    (65,967
    )
    
    
    344,660Property and equipment:Land and land improvements
    
    
    
    
    
    
    3,027
    
    
    
    49,513
    
    
    
    
    
    
    
    52,540Buildings
    
    
    
    
    
    
    8,069
    
    
    
    88,651
    
    
    
    
    
    
    
    96,720Machinery and equipment
    
    
    
    
    
    
    70,860
    
    
    
    
    
    
    
    
    
    
    
    70,860Construction in progress
    
    
    
    
    
    
    2,028
    
    
    
    
    
    
    
    
    
    
    
    2,028Property and equipment, at cost
    
    
    
    
    
    
    83,984
    
    
    
    138,164
    
    
    
    
    
    
    
    222,148Accumulated depreciation
    
    
    
    
    
    
    (65,564
    )
    
    
    (26,953
    )
    
    
    
    
    
    
    (92,517
    )Property and equipment, net
    
    
    
    
    
    
    18,420
    
    
    
    111,211
    
    
    
    
    
    
    
    129,631Investment in subsidiaries
    
    
    (47,943
    )
    
    
    
    
    
    
    
    
    
    
    47,943
    
    
    
    Other non-current assets
    
    
    
    
    
    
    19,602
    
    
    
    31,126
    
    
    
    
    
    
    
    50,728Total assets
    
    $
    10,318
    
    
    $
    388,789
    
    
    $
    143,936
    
    
    $
    (18,024
    )
    
    $
    525,019Liabilities:Current liabilities:Accounts payable
    
    $
    59
    
    
    $
    62,768
    
    
    $
    
    
    
    $
    
    
    
    
    62,827Bank overdrafts
    
    
    
    
    
    
    23,089
    
    
    
    
    
    
    
    
    
    
    
    23,089Accrued compensation
    
    
    
    
    
    
    4,594
    
    
    
    
    
    
    
    
    
    
    
    4,594Current maturities of long-term debt
    
    
    
    
    
    
    
    
    
    
    1,190
    
    
    
    
    
    
    
    1,190Other current liabilities
    
    
    
    
    
    
    15,065
    
    
    
    483
    
    
    
    1,244
    
    
    
    16,792Intercompany payable
    
    
    9,264
    
    
    
    57,947
    
    
    
    
    
    
    
    (67,211
    )
    
    
    Total current liabilities
    
    
    9,323
    
    
    
    163,463
    
    
    
    1,673
    
    
    
    (65,967
    )
    
    
    108,492Non-current liabilities:Long-term debt
    
    
    
    
    
    
    97,200
    
    
    
    284,479
    
    
    
    
    
    
    
    381,679Non-current deferred income tax
liabilities
    
    
    
    
    
    
    192
    
    
    
    
    
    
    
    
    
    
    
    192Other non-current liabilities
    
    
    4
    
    
    
    33,661
    
    
    
    
    
    
    
    
    
    
    
    33,665Total liabilities
    
    
    9,327
    
    
    
    294,516
    
    
    
    286,152
    
    
    
    (65,967
    )
    
    
    524,028Stockholders equity/parents investment
    
    
    991
    
    
    
    94,273
    
    
    
    (142,216
    )
    
    
    47,943
    
    
    
    991Total liabilities and equity
    
    $
    10,318
    
    
    $
    388,789
    
    
    $
    143,936
    
    
    $
    (18,024
    )
    
    $
    525,019
  20




---



##### Table of Contents



BlueLinxBlueLinx
    
    
    CorporationHoldings
    
    
    and
    
    
    LLCInc.
    
    
    Subsidiaries
    
    
    Subsidiaries
    
    
    Eliminations
    
    
    ConsolidatedCash flows from operating activities:Net (loss) income
    
    $
    (12,326
    )
    
    $
    (19,018
    )
    
    $
    5,463
    
    
    $
    13,555
    
    
    $
    (12,326
    )Adjustments to reconcile net (loss) income to cash (used in)
provided by operating activities:Depreciation and amortization
    
    
    
    
    
    
    1,984
    
    
    
    954
    
    
    
    
    
    
    
    2,938Amortization of debt issuance costs
    
    
    
    
    
    
    282
    
    
    
    165
    
    
    
    
    
    
    
    447Payments from terminating the Georgia-Pacific supply
agreement
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Gain from the sale of properties
    
    
    
    
    
    
    
    
    
    
    (7,222
    )
    
    
    
    
    
    
    (7,222
    )Changes associated with the ineffective interest rate swap
    
    
    
    
    
    
    (1,751
    )
    
    
    
    
    
    
    
    
    
    
    (1,751
    )Deferred income tax benefit
    
    
    
    
    
    
    (215
    )
    
    
    
    
    
    
    
    
    
    
    (215
    )Share-based compensation expense
    
    
    348
    
    
    
    468
    
    
    
    
    
    
    
    
    
    
    
    816Decrease (increase) in restricted cash
    
    
    
    
    
    
    (6
    )
    
    
    
    
    
    
    
    
    
    
    (6
    )Equity in earnings of subsidiaries
    
    
    13,555
    
    
    
    
    
    
    
    
    
    
    
    (13,555
    )
    
    
    Changes in assets and liabilities:Receivables
    
    
    
    
    
    
    (50,722
    )
    
    
    
    
    
    
    
    
    
    
    (50,722
    )Inventories
    
    
    
    
    
    
    (32,062
    )
    
    
    
    
    
    
    
    
    
    
    (32,062
    )Accounts payable
    
    
    101
    
    
    
    31,982
    
    
    
    
    
    
    
    
    
    
    
    32,083Changes in other working capital
    
    
    (176
    )
    
    
    4,127
    
    
    
    (197
    )
    
    
    
    
    
    
    3,754Intercompany receivable
    
    
    (5,667
    )
    
    
    (1,621
    )
    
    
    (275
    )
    
    
    7,563
    
    
    
    Intercompany payable
    
    
    2,635
    
    
    
    2,554
    
    
    
    2,374
    
    
    
    (7,563
    )
    
    
    Other
    
    
    (4
    )
    
    
    1,290
    
    
    
    172
    
    
    
    
    
    
    
    1,458Net cash provided by (used in) operating activities
    
    
    (1,534
    )
    
    
    (62,708
    )
    
    
    1,434
    
    
    
    
    
    
    
    (62,808
    )Cash flows from investing activities:Investment in subsidiaries
    
    
    1,196
    
    
    
    
    
    
    
    (1,196
    )
    
    
    
    
    
    
    Property, plant and equipment investments
    
    
    
    
    
    
    (879
    )
    
    
    (2,816
    )
    
    
    
    
    
    
    (3,695
    )Proceeds from disposition of assets
    
    
    
    
    
    
    
    
    
    
    8,763
    
    
    
    
    
    
    
    8,763Net cash (used in) provided by investing activities
    
    
    1,196
    
    
    
    (879
    )
    
    
    4,751
    
    
    
    
    
    
    
    5,068Cash flows from financing activities:Net transactions with Parent
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Repurchase of common stock
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Increase in revolving credit facility
    
    
    
    
    
    
    43,269
    
    
    
    
    
    
    
    
    
    
    
    43,269Payments on capital lease obligations
    
    
    
    
    
    
    (72
    )
    
    
    
    
    
    
    
    
    

    
    (72
    )Increase in bank overdrafts
    
    
    
    
    
    
    12,582
    
    
    
    
    
    
    
    
    
    
    
    12,582Increase in restricted cash related to the mortgage
    
    
    
    
    
    
    
    
    
    
    (6,185
    )
    
    
    
    
    
    
    (6,185
    )Intercompany receivable
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Intercompany payable
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Other
    
    
    
    
    
    
    

    
    
    
    
    
    
    
    
    
    
    
    Net cash (used in) provided by financing activities
    
    
    
    
    
    
    55,779
    
    
    
    (6,185
    )
    
    
    
    
    
    
    49,594Increase (decrease) in cash
    
    
    (338
    )
    
    
    (7,808
    )
    
    
    
    
    
    
    
    
    
    
    (8,146
    )Balance, beginning of period
    
    
    384
    
    
    
    13,913
    
    
    
    
    
    
    
    
    
    
    
    14,297Balance, end of period
    
    $
    46
    
    
    $
    6,105
    
    
    $
    
    
    
    $
    
    
    
    $
    6,151
  21




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##### Table of Contents



BlueLinxBlueLinx
    
    
    CorporationHoldings
    
    
    and
    
    
    LLCInc.
    
    
    Subsidiaries
    
    
    Subsidiaries
    
    
    Eliminations
    
    
    ConsolidatedCash flows from operating activities:Net (loss) income
    
    $
    (14,739
    )
    
    $
    (14,588
    )
    
    $
    1,056
    
    
    $
    13,532
    
    
    $
    (14,739
    )Adjustments to reconcile net (loss) income to cash (used in)
provided by operating activities:Depreciation and amortization
    
    
    
    
    
    
    2,783
    
    
    
    961
    
    
    
    
    
    
    
    3,744Amortization of debt issuance costs
    
    
    
    
    
    
    (236
    )
    
    
    163
    
    
    
    
    
    
    
    (73
    )Payments from terminating the Georgia-Pacific supply
agreement
    
    
    
    
    
    
    4,706
    
    
    
    
    
    
    
    
    
    
    
    4,706Changes associated with the ineffective interest rate swap
    
    
    
    
    
    
    (805
    )
    
    
    
    
    
    
    
    
    
    
    (805
    )Deferred income tax benefit
    
    
    
    
    
    
    (207
    )
    
    
    
    
    
    
    
    
    
    
    (207
    )Share-based compensation expense
    
    
    447
    
    
    
    596
    
    
    
    
    
    
    
    
    
    
    
    1,043Decrease in restricted cash related to the ineffective
interest rate swap, insurance, and other
    
    
    
    
    
    
    5,882
    
    
    
    
    
    
    
    
    
    
    
    5,882Equity in earnings of subsidiaries
    
    
    13,532
    
    
    
    
    
    
    
    
    
    
    
    (13,532
    )
    
    
    Changes in assets and liabilities:Receivables
    
    
    
    
    
    
    (64,595
    )
    
    
    
    
    
    
    
    
    
    
    (64,595
    )Inventories
    
    
    
    
    
    
    (25,614
    )
    
    
    
    
    
    
    
    
    
    
    (25,614
    )Accounts payable
    
    
    (15
    )
    
    
    21,335
    
    
    
    
    
    
    
    
    
    
    
    21,320Changes in other working capital
    
    
    (34
    )
    
    
    22,536
    
    
    
    377
    
    
    
    
    
    
    
    22,879Intercompany receivable
    
    
    1,573
    
    
    
    (1,053
    )
    
    
    
    
    
    
    (520
    )
    
    
    Intercompany payable
    
    
    1,053
    
    
    
    
    
    
    
    (1,573
    )
    
    
    520
    
    
    
    Other
    
    
    
    
    
    
    (134
    )
    
    
    
    
    
    
    
    
    
    
    (134
    )Net cash provided by (used in) operating activities
    
    
    1,817
    
    
    
    (49,394
    )
    
    
    984
    
    
    
    
    
    
    
    (46,593
    )Cash flows from investing activities:Investment in subsidiaries
    
    
    (1,895
    )
    
    
    
    
    
    
    
    
    
    
    1,895
    
    
    
    Property, plant and equipment investments
    
    
    
    
    
    
    (409
    )
    
    
    
    
    
    
    
    
    
    
    (409
    )Proceeds from disposition of assets
    
    
    
    
    
    
    149
    
    
    
    
    
    
    
    
    
    
    
    149Net cash (used in) provided by investing activities
    
    
    (1,895
    )
    
    
    (260
    )
    
    
    
    
    
    
    1,895
    
    
    
    (260
    )Cash flows from financing activities:Net transactions with Parent
    
    
    
    
    
    
    14
    
    
    
    1,881
    
    
    
    (1,895
    )
    
    
    Repurchase of common stock
    
    
    (583
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (583
    )Increase in revolving credit facility
    
    
    
    
    
    
    24,665
    
    
    
    
    
    
    
    
    
    
    
    24,665Payments on capital lease obligations
    
    
    
    
    
    
    (402
    )
    
    
    
    
    
    
    
    
    
    
    (402
    )Increase in bank overdrafts
    
    
    
    
    
    
    9,953
    
    
    
    
    
    
    
    
    
    
    
    9,953Increase in restricted cash related to the mortgage
    
    
    
    
    
    
    
    
    
    
    (2,864
    )
    
    
    
    
    
    
    (2,864
    )Intercompany receivable
    
    
    650
    
    
    
    
    
    
    
    
    
    
    
    (650
    )
    
    
    Intercompany payable
    
    
    
    
    
    
    (650
    )
    
    
    
    
    
    
    650
    
    
    
    Other
    
    
    6
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    6Net cash (used in) provided by financing activities
    
    
    73
    
    
    
    33,580
    
    
    
    (983
    )
    
    
    (1,895
    )
    
    
    30,775Increase (decrease) in cash
    
    
    (5
    )
    
    
    (16,074
    )
    
    
    1
    
    
    
    
    
    
    
    (16,078
    )Balance, beginning of period
    
    
    32
    
    
    
    29,129
    
    
    
    296
    
    
    
    
    
    
    
    29,457Balance, end of period
    
    $
    27
    
    
    $
    13,055
    
    
    $
    297
    
    
    $
    
    
    
    $
    13,379
  22




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##### Table of Contents



ITEM 2.
    
    MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
  
    
    changes in the prices, supply and/or demand for products which we distribute, especially
as a result of conditions in the residential housing market;
 
    
    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;
  23




---



##### Table of Contents




    
    variations in the performance of the financial markets, including the credit markets;
 
    
    failure to complete the rights offering on the terms described in the Form S-1 filed
with the SEC on April 26, 2011; and
 
    
    the other factors described herein under and in our Annual Report on Form 10-K for the
year ended January 1, 2011 as filed with the SEC.
  Overview
 Background
   Industry Conditions
  Selected Factors Affecting Our Operating Results
   24




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##### Table of Contents



Fiscal
    
    
    Fiscal
    
    
    Fiscal
    
    
    FiscalQ1 2011
    
    
    Q1 2010
    
    
    2010
    
    
    2009(Dollars in millions)(Unaudited)Sales by CategoryStructural Products
    
    $
    162
    
    
    $
    204
    
    
    $
    838
    
    
    $
    738Specialty Products
    
    
    235
    
    
    
    233
    
    
    
    1,005
    
    
    
    948Other(1)
    
    
    (6
    )
    
    
    (6
    )
    
    
    (39
    )
    
    
    (40
    )Total Sales
    
    $
    391
    
    
    $
    431
    
    
    $
    1,804
    
    
    $
    1,646Sales VariancesUnit Volume $ Change
    
    $
    (51
    )
    
    $
    6
    
    
    $
    36
    
    
    $
    (1,036
    )Price/Other(1)
    
    
    11
    
    
    
    18
    
    
    
    122
    
    
    
    (98
    )Total $ Change
    
    $
    (40
    )
    
    $
    24
    
    
    $
    158
    
    
    $
    (1,134
    )Unit Volume % Change
    
    
    (11.8
    )%
    
    
    1.4
    %
    
    
    2.2
    %
    
    
    (36.6
    )%Price/Other(1)
    
    
    2.4
    %
    
    
    4.5
    %
    
    
    7.4
    %
    
    
    (4.2
    )%Total % Change
    
    
    ( 9.4
    )%
    
    
    5.9
    %
    
    
    9.6
    %
    
    
    (40.8
    )%
 
 (1)
    
    Other includes unallocated allowances and discounts.
  Fiscal
    
    
    Fiscal
    
    
    Fiscal
    
    
    FiscalQ1 2011
    
    
    Q1 2010
    
    
    2010
    
    
    2009(Dollars in millions)(Unaudited)Gross Margin $s by CategoryStructural Products
    
    $
    17
    
    
    $
    22
    
    
    $
    77
    
    
    $
    73Specialty Products
    
    
    32
    
    
    
    33
    
    
    
    148
    
    
    
    132Other(1)
    
    
    (3
    )
    
    
    (3
    )
    
    
    (14
    )
    
    
    (12
    )Total Gross Margin $s
    
    $
    46
    
    
    $
    52
    
    
    $
    211
    
    
    $
    193Gross Margin %s by CategoryStructural Products
    
    
    10.7
    %
    
    
    10.8
    %
    
    
    9.1
    %
    
    
    9.9
    %Specialty Products
    
    
    13.8
    %
    
    
    14.2
    %
    
    
    14.7
    %
    
    
    13.9
    %Total Gross Margin %s
    
    
    11.8
    %
    
    
    12.1
    %
    
    
    11.7
    %
    
    
    11.7
    %Unit Volume Change by ProductStructural Products
    
    
    (25.2
    )%
    
    
    0.3
    %
    
    
    (2.5
    )%
    
    
    (40.3
    )%Specialty Products
    
    
    (0.2
    )%
    
    
    2.2
    %
    
    
    5.7
    %
    
    
    (32.8
    )%Total Unit Volume Change %s
    
    
    (11.8
    )%
    
    
    1.4
    %
    
    
    2.2
    %
    
    
    (36.6
    )%
 
 (1)
    
    Other includes unallocated allowances and discounts.
  25




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##### Table of Contents



Fiscal
    
    
    Fiscal
    
    
    Fiscal
    
    
    FiscalQ1 2011
    
    
    Q1 2010
    
    
    2010
    
    
    2009(Dollars in millions)(Unaudited)Sales by ChannelWarehouse/Reload
    
    $
    308
    
    
    $
    335
    
    
    $
    1,429
    
    
    $
    1,251Direct
    
    
    89
    
    
    
    102
    
    
    
    414
    
    
    
    435Other(1)
    
    
    (6
    )
    
    
    (6
    )
    
    
    (39
    )
    
    
    (40
    )Total
    
    $
    391
    
    
    $
    431
    
    
    $
    1,804
    
    
    $
    1,646Gross Margin by ChannelWarehouse/Reload
    
    $
    44
    
    
    $
    50
    
    
    $
    201
    
    
    $
    177Direct
    
    
    5
    
    
    
    5
    
    
    
    24
    
    
    
    28Other(1)
    
    
    (3
    )
    
    
    (3
    )
    
    
    (14
    )
    
    
    (12
    )Total
    
    $
    46
    
    
    $
    52
    
    
    $
    211
    
    
    $
    193Gross Margin % by ChannelWarehouse/Reload
    
    
    14.3
    %
    
    
    14.9
    %
    
    
    14.1
    %
    
    
    14.1
    %Direct
    
    
    6.2
    %
    
    
    4.9
    %
    
    
    5.8
    %
    
    
    6.4
    %Total
    
    
    11.8
    %
    
    
    12.1
    %
    
    
    11.7
    %
    
    
    11.7
    %
 
 (1)
    
    Other includes unallocated allowances and discounts. Fiscal Year
  Results of Operations
 First Quarter of Fiscal 2011 Compared to First Quarter of Fiscal 2010
  % of
    
    
    
    
    
    
    % ofFirst Quarter of
    
    
    Net
    
    
    First Quarter of
    
    
    NetFiscal 2011
    
    
    Sales
    
    
    Fiscal 2010
    
    
    Sales(Unaudited)
    
    
    
    
    
    (Unaudited)(Dollars in thousands)Net sales
    
    $
    390,604
    
    
    
    100.0
    %
    
    $
    431,050
    
    
    
    100.0
    %Gross profit
    
    
    46,269
    
    
    
    11.8
    %
    
    
    52,278
    
    
    
    12.1
    %Selling, general & administrative
    
    
    48,446
    
    
    
    12.4
    %
    
    
    56,514
    
    
    
    13.1
    %Depreciation and amortization
    
    
    2,938
    
    
    
    0.8
    %
    
    
    3,744
    
    
    
    0.9
    %Operating loss
    
    
    (5,115
    )
    
    
    (1.3
    )%
    
    
    (7,980
    )
    
    
    (1.9
    )%Interest expense, net
    
    
    9,061
    
    
    
    2.3
    %
    
    
    7,315
    
    
    
    1.7
    %Changes associated with ineffective interest rate swap
    
    
    (1,751
    )
    
    
    (0.4
    )%
    
    
    (805
    )
    
    
    (0.2
    )%Other expense (income), net
    
    
    15
    
    
    
    0.0
    %
    
    
    233
    
    
    
    0.1
    %Loss before provision for income taxes
    
    
    (12,440
    )
    
    
    (3.2
    )%
    
    
    (14,723
    )
    
    
    (3.4
    )%(Benefit from) provision for income taxes
    
    
    (114
    )
    
    
    0.0
    %
    
    
    16
    
    
    
    0.0
    %Net loss
    
    $
    (12,326
    )
    
    
    (3.2
    )%
    
    $
    (14,739
    )
    
    
    (3.4
    )%
  26




---



##### Table of Contents



Net sales.
 Gross profit.
 Selling, general, and administrative.
 Depreciation and amortization.
 Operating loss.
 Interest expense, net.
 Changes associated with ineffective interest rate swap
 Provision for income taxes.
 Net loss.
  Seasonality
   27




---



##### Table of Contents



Liquidity and Capital Resources
       28
    Table of Contents  April 2, 2011
    
    
    January 1, 2011(Dollars in thousands)(Unaudited)Working capital
    
    $
    264,158
    
    
    $
    236,168
 Period from
    
    
    Period fromJanuary 2,
    
    
    January 3,2011 to
    
    
    2010 toApril 2, 2011
    
    
    April 3, 2010(Dollars in thousands)(Unaudited)Cash flows used in operating activities
    
    $
    (62,808
    )
    
    $
    (46,593
    )Cash flows provided (used in) by investing activities
    
    
    5,068
    
    
    
    (260
    )Cash flows provided by financing activities
    
    $
    49,594
    
    
    $
    30,775
 Working Capital
  Operating Activities
   Investing Activities
    29
    Table of Contents  Financing Activities
  Debt and Credit Sources
     30
    Table of Contents  Balance at January 1, 2011
    
    $
    445Amortization of accumulated other comprehensive loss recorded to interest expense
    
    
    (445
    )Balance at April 2, 2011
    
    $
    
  31
    Table of Contents  Contractual Obligations
  Critical Accounting Policies
  
 ITEM 3.
    
    QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
  
 ITEM 4.
    
    CONTROLS AND PROCEDURES
   
 PART II. OTHER INFORMATION
 
 ITEM 1A.
    
    RISK FACTORS
  
 ITEM 2.
    
    UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS
   32
    Table of Contents  ITEM 6.
    
    EXHIBITS
 ExhibitNumber
    
    Description31.1
    
    
    Certification of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.31.2
    
    
    Certification of Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.32.1
    
    
    Certification of Chief Executive Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.32.2
    
    
    Certification of Chief Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
  33
    Table of Contents  SIGNATURES
  BlueLinx Holdings Inc.(Registrant)Date: May 6, 2011
    /s/ H. Douglas GoforthH. Douglas GoforthChief Financial Officer and Treasurer
(Principal Accounting and Financial Officer)  34
    Table of Contents  EXHIBIT INDEX
 ExhibitNumber
    
    Description31.1
    
    
    Certification of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.31.2
    
    
    Certification of Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.32.1
    
    
    Certification of Chief Executive Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.32.2
    
    
    Certification of Chief Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
  35