– Revenue Grows 3% Despite Weak Economy –

– Generated $33 Million in Cash from Operations in Third Quarter –

ATLANTA, Nov. 4, 2010 (GLOBE NEWSWIRE) -- BlueLinx Holdings Inc. (NYSE:BXC), a leading distributor of building products in North America, today reported financial results for the third quarter ended October 2, 2010.

Revenues increased 3.4% to $464.7 million from $449.4 million for the same period a year ago. The increase reflects a 5.9% increase in structural product sales and a 2.5% increase in specialty product sales. Overall unit volume was flat, with a 1.3% increase in specialty unit volume being offset by a 4.3% decline in structural unit volume. The Company incurred a net loss of $14.9 million, or $0.48 per diluted share for the third quarter of 2010, compared with net loss of $13.5 million, or $0.44 per diluted share, for the third quarter of 2009.

Gross profit for the third quarter totaled $49.9 million, down 9.7% from $55.3 million in the prior-year period. Gross margins decreased to 10.7% from the 12.3% generated in the year earlier period. The decline in gross margin was largely driven by a sharp decline in underlying wood-based product prices during the quarter. Total operating expenses decreased $1.7 million, or 2.8% from the same period a year ago. Reported operating loss for the quarter was $7.3 million, compared with an operating loss of $3.6 million a year ago.

"Our overall performance for the third quarter was impacted by a lack of improvement in actual housing starts and continued deterioration of wood-based product prices," said BlueLinx President and CEO George Judd. "Total housing starts for the quarter fell 0.8% from year-earlier levels, while prices for key grades of structural wood products dropped 20% on average from the end of the second quarter. The price volatility seen in the last six months is some of the worst I have seen in my 25 years in this industry. This volatility in the wood markets had a negative impact on our margins during the quarter as our inventories returned to current market values. Despite this challenging environment, we increased sales by 3.4% while controlling our operating costs and generated approximately $33 million in cash from operations during the third quarter."

For the nine months ended October 2, 2010, net loss totaled $33.0 million, or $1.08 per diluted share, on revenues of $1.44 billion, compared with a net loss of $73.5 million, or $2.37 per diluted share, on revenues of $1.28 billion a year ago. The increase in revenue was largely due to the 8.5% increase in housing construction activity relative to the prior period, increases in structural wood-based selling prices relative to the prior period, and the Company's focus on targeted growth initiatives. Gross profit for the nine months ended October 2, 2010 totaled $166.3 million and gross margin was 11.6%, compared with $147.9 million and 11.6%, respectively, a year earlier. Operating expenses increased to $178.0 million from $159.3 million a year ago, and included $1.9 million and $20.1 million in net gains from significant special items, respectively.

The Company's operating results for the 2010 and 2009 third quarter and year-to-date periods, adjusted for significant special items, are shown in the following table (see accompanying financial schedules for full financial details and reconciliations of non-GAAP financial measures to their GAAP equivalents):
         
in millions, except per share amounts        
(unaudited) Quarters Ended Nine Months Ended
  October 2, October 3, October 2, October 3,
  2010 2009 2010 2009
Pretax loss ($15.6) ($13.3) ($33.7) ($45.3)
OSB lawsuit settlement gain (5.2) -- (5.2) --
Tender offer expenses 3.0 -- 3.0 --
Gain on early cancellation of Master Supply Agreement with G-P -- (0.1) -- (17.6)
Gain on sale of certain surplus properties -- (0.2) -- (4.4)
Changes associated with the ineffective interest rate swap (1.1) 1.4 (3.2) 7.3
Facility consolidation & severance related costs 0.3 0.2 0.3 1.9
Write-off of debt issuance costs 0.2 -- 0.2 1.4
         
Adjusted pretax loss (18.4) (12.0) (38.6) (56.7)
Adjusted benefit from income taxes (7.9) (4.5) (15.6) (21.3)
         
Adjusted net loss ($10.5) ($7.5) ($23.0) ($35.4)
         
Diluted weighted average shares 30.7 30.9 30.7 31.0
         
Adjusted diluted net loss per share applicable to common shares ($0.34) ($0.24) ($0.75) ($1.14)

For the quarter and year-to-date periods ended October 2, 2010, the above table reflects the following events: (i) the Company received payment for a litigation settlement; (ii) the Company incurred expenses from the terminated tender offer; (iii) the Company recorded the effect of a reduction to the fair value of its ineffective interest rate swap offset by the continued amortization of the other comprehensive loss related to the ineffective interest rate swap into interest expense; (iv) the Company recorded certain severance costs; (v) the Company amended its credit facility resulting in a non-cash charge due to the write-off of associated debt issuance cost. The adjusted benefit from income taxes reflected in the table is comprised of the Company's effective tax rate excluding the valuation allowance related to its deferred tax assets, a tax benefit related to our intra period income tax allocation to other comprehensive income, a benefit related to an additional 2009 income tax refund, and the tax effect of significant special items. The valuation allowance recorded for the quarter and year-to-date periods are $6.0 million and $13.0 million, respectively. The adjusted benefit from income taxes assumes the Company is in a position to demonstrate that the deferred tax assets are realizable.

For the quarter and year-to-date periods ended October 3, 2009, the above table reflects the following events: (i) the Company reached an agreement with G-P to cancel our Master Supply Agreement one year prior to the original expiration date, with G-P agreeing to make four quarterly payments to BlueLinx starting May 1, 2009; (ii) the Company sold certain excess property during the quarter and in the year-to-date period; (iii) the Company reduced its borrowings during the third quarter under its revolving credit facility by $25 million resulting in a non-cash interest charge related to its ineffective interest rate swap. In the year-to-date period, the Company reduced its borrowings under its revolving credit facility by $100 million resulting in a non-cash interest charge related to its ineffective interest rate swap. In addition the changes associated with the ineffective interest rate swap reflect the effect of changes in the fair value and the continued amortization of the other comprehensive loss into interest expense; (iv) the Company recorded other restructuring costs related to facility consolidations and severance expense; and (v) the Company wrote-off a portion of its debt issuance costs related to the Company's decision to lower its revolving credit facility from $800 million to $500 million which resulted in a non-cash charge. The adjusted benefit from income taxes reflected in the table is based on the Company's effective tax rate excluding the valuation allowance recorded against its deferred tax asset and the tax effect of significant special items. The valuation allowance recorded for the quarter and year-to-date period ended October 3, 2009 was $5.2 million and $45.1 million, respectively. The adjusted benefit from income taxes assumes the Company is in a position to demonstrate that the deferred tax assets are realizable.

Conference Call

BlueLinx will host a conference call today at 10:00 a.m. Eastern Time, accompanied by a supporting slide presentation. Investors can listen to the conference call and view the accompanying slide presentation by going to the BlueLinx web site, www.BlueLinxCo.com , and selecting the conference link on the Investor Relations page. Investors will be able to access an archived recording of the conference call for one week by calling 706-645-9291, Conference ID# 21225797. The recording will be available two hours after the conference call has concluded. Investors also can access a recording of this call on the BlueLinx web site, where a replay of the webcast will be available for 90 days.

Use of Non-GAAP Measures

BlueLinx reports its financial results in accordance with U.S. generally accepted accounting principles (GAAP). The Company also believes that presentation of certain non-GAAP measures, i.e., results excluding certain charges or other nonrecurring events, when appropriate, provides useful information for the understanding of its ongoing operations and enables investors to focus on period-over-period operating performance, without the impact of significant special items, and thereby enhances the user's overall understanding of the Company's current financial performance relative to past performance and provides a better baseline for modeling future earnings expectations. Any non-GAAP measures used herein are reconciled in the financial tables accompanying this news release. The Company cautions that non-GAAP measures should be considered in addition to, but not as a substitute for, the Company's reported GAAP results.

About BlueLinx Holdings Inc.

Headquartered in Atlanta, Georgia, BlueLinx Holdings Inc., operating through its wholly owned subsidiary BlueLinx Corporation, is a leading distributor of building products in North America. Employing approximately 2,000 people, BlueLinx offers greater than 10,000 products from over 750 suppliers to service approximately 11,500 customers nationwide, including dealers, industrial manufacturers, manufactured housing producers and home improvement retailers. The Company operates its distribution business from sales centers in Atlanta and Denver, and its network of 60 warehouses. BlueLinx is traded on the New York Stock Exchange under the symbol BXC. Additional information about BlueLinx can be found on its Web site at www.BlueLinxCo.com .

Forward-looking Statements

This press release includes "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995, including statements relating to our outlook on the housing industry. All of these forward-looking statements are based on estimates and assumptions made by our management that, although believed by BlueLinx to be reasonable, are inherently uncertain. Forward-looking statements involve risks and uncertainties, including, but not limited to, economic, competitive, governmental and technological factors outside of BlueLinx' control that may cause its business, strategy or actual results to differ materially from the forward-looking statements. These risks and uncertainties may include, among other things: changes in the supply and/or demand for products that it distributes, especially as a result of conditions in the residential housing market; general economic and business conditions in the United States; the activities of competitors; changes in significant operating expenses; changes in the availability of capital, including the availability of residential mortgages; the ability to identify acquisition opportunities and effectively and cost-efficiently integrate acquisitions; adverse weather patterns or conditions; acts of war or terrorist activities; variations in the performance of the financial markets; and other factors described in the "Risk Factors" section in the Company's Annual Report on Form 10-K for the year ended January 2, 2010 and in its periodic reports filed with the Securities and Exchange Commission from time to time. Given these risks and uncertainties, you are cautioned not to place undue reliance on forward-looking statements. BlueLinx undertakes no obligation to publicly update or revise any forward-looking statement as a result of new information, future events, changes in expectation or otherwise, except as required by law.
BlueLinx Holdings Inc.
Statements of Operations
in thousands, except per share data
  Quarters Ended Nine Months Ended
  October 2, October 3, October 2, October 3,
  2010 2009 2010 2009
  (unaudited) (unaudited) (unaudited) (unaudited)
         
Net sales  $ 464,690  $ 449,363  $ 1,436,521  $ 1,280,000
Cost of sales  414,748  394,058  1,270,182  1,132,119
Gross profit  49,942  55,305  166,339  147,881
 Operating expenses:        
 Selling, general, and administrative  54,121  55,024  167,724  163,744
 Net gain from terminating the Georgia-Pacific supply agreement  --  --  --  (17,554)
 Depreciation and amortization  3,111  3,882  10,289  13,153
Total operating expenses  57,232  58,906  178,013  159,343
Operating loss  (7,290)  (3,601)  (11,674)  (11,462)
Non-operating expenses:      
 Interest expense  9,121  7,987  24,641  24,610
 Changes associated with the ineffective interest rate swap  (1,156)  1,431  (3,217)  7,341
 Write-off of debt issuance costs  183  --  183  1,407
 Other expense, net  192  324  443  482
Loss before (benefit from) provision for income taxes  (15,630)  (13,343)  (33,724)  (45,302)
(Benefit from) provision for income taxes  (778)  120  (726)  28,186
Net loss  $ (14,852)  $ (13,463)  $ (32,998)  $ (73,488)
Basic and diluted weighted average number of common shares outstanding  30,714  30,948  30,667  31,019
Basic and diluted net loss per share applicable to common stock  $ (0.48)  $ (0.44)  $ (1.08)  $ (2.37)
         
BlueLinx Holdings Inc.    
Balance Sheets    
 in thousands    
  October 2, January 2,
  2010 2010
  (unaudited) (unaudited)
Assets:    
Current assets:    
 Cash and cash equivalents  $ 12,921  $ 29,457
 Receivables, net  166,641  119,347
 Inventories, net  195,569  173,185
 Other current assets  22,755  44,970
Total current assets  397,886  366,959
     
Property, plant, and equipment:    
 Land and land improvements  52,563  52,621
 Buildings  96,027  96,145
 Machinery and equipment  71,328  69,767
 Construction in progress   2,225  791
Property, plant, and equipment, at cost  222,143  219,324
Accumulated depreciation  (90,742)  (82,141)
Property, plant, and equipment, net  131,401  137,183
Other non-current assets  49,466  42,704
Total assets  $ 578,753  $ 546,846
     
Liabilities:    
Current liabilities:    
 Accounts payable   $ 80,689  $ 64,618
 Bank overdrafts  30,673  27,232
 Accrued compensation  5,200  4,879
 Current maturities of long-term debt  7,689  --
 Other current liabilities  22,471  22,508
Total current liabilities  146,722  119,237
Noncurrent liabilities:    
 Long-term debt  379,976  341,669
 Other non-current liabilities  30,677  35,120
Total liabilities  557,375  496,026
     
Shareholders' Equity:    
 Common stock  327  322
 Additional paid in capital  147,327  145,035
 Accumulated other comprehensive loss  (7,116)  (8,375)
 Accumulated deficit  (119,160)  (86,162)
Total shareholders' equity  21,378  50,820
     
Total liabilities and shareholders' equity  $ 578,753  $ 546,846
     
BlueLinx Holdings Inc.    
Statements of Cash Flows    
 in thousands    
  Nine Months Ended
  October 2, October 3,
  2010 2009
  (unaudited) (unaudited)
     
Cash flows from operating activities:    
Net loss  $ (32,998)  $ (73,488)
Adjustments to reconcile net loss    
 to cash used in operations:    
 Depreciation and amortization  10,289  13,153
 Amortization of debt issuance costs  1,026  1,843
 Net gain from terminating the Georgia-Pacific supply agreement  --  (17,554)
 Payments from terminating the Georgia-Pacific supply agreement  4,706  9,412
 Gain from sale of facility  --  (4,406)
 Prepayment fee associated with sale of facility  --  616
 Changes associated with the ineffective interest rate swap  (3,217)  7,341
 Write-off of debt issuance costs  183  1,407
 Vacant property charges, net  --  457
 Deferred income tax (benefit) provision  (621)  27,228
 Share-based compensation expense  2,880  2,170
 Decrease in restricted cash related to the ineffective interest rate swap, 
 insurance, and other  6,009  3,021
 Changes in assets and liabilities:    
 Receivables  (47,294)  (38,003)
 Inventories  (22,384)  16,359
 Accounts payable  16,071  30,170
 Changes in other working capital  21,285  6,970
 Other  (3,849)  (192)
Net cash used in operating activities  (47,914)  (13,496)
     
Cash flows from investing activities:    
Property, plant, and equipment investments  (2,689)  (952)
Proceeds from disposition of assets  689  8,454
Net cash (used in) provided by investing activities  (2,000)  7,502
     
Cash flows from financing activities:    
Repurchase of common stock   (583)  (1,862)
Increase (decrease) in the revolving credit facility  45,996  (100,000)
Debt financing costs  (6,521)  --
Payment of principal on mortgage  --  (3,201)
Prepayment fees associated with sale of facility  --  (616)
Payments on capital lease obligations  (564)  --
Increase (decrease) in bank overdrafts  3,441  (4,699)
Increase in restricted cash related to the mortgage  (8,397)  (8,442)
Other  6  (41)
Net cash provided by (used in) financing activities  33,378  (118,861)
     
Decrease in cash  (16,536)  (124,855)
Balance, beginning of period  29,457  150,353
Balance, end of period  $ 12,921  $ 25,498
     
BlueLinx Holdings Inc.        
Adjusted Net Loss        
in thousands, except per share data        
  Quarters Ended Nine Months Ended
  October 2, October 3, October 2, October 3,
  2010 2009 2010 2009
  (unaudited) (unaudited) (unaudited) (unaudited)
         
Pretax loss  $ (15,630)  $ (13,343)  $ (33,724)  $ (45,302)
OSB lawsuit settlement gain  (5,236)  --  (5,236)  --
Tender offer expenses  3,030  --  3,030  --
Gain on early cancellation of Master Supply Agreement with G-P  --  (144)  --  (17,554)
Gain on sale of certain surplus properties  --  (169)  --  (4,406)
Changes associated with the ineffective interest rate swap  (1,156)  1,431  (3,217)  7,341
Facility consolidations & severance related costs  342  172  342  1,878
Write-off of debt issuance costs  183  --  183  1,407
Adjusted pretax loss  (18,467)  (12,053)  (38,622)  (56,636)
Adjusted benefit from income taxes  (7,906)  (4,532)  (15,633)  (21,262)
Adjusted net loss  $ (10,561)  $ (7,521)  $ (22,989)  $ (35,374)
Diluted weighted average shares 30,714 30,948 30,667 31,019
Adjusted diluted net loss per share applicable to common shares  $ (0.34)  $ (0.24)  $ (0.75)  $ (1.14)
         
BlueLinx Holdings Inc.        
Reconciliation of GAAP Loss to Adjusted Net Loss         
in thousands        
  Quarters Ended Nine Months Ended
  October 2, October 3, October 2, October 3,
  2010 2009 2010 2009
  (unaudited) (unaudited) (unaudited) (unaudited)
         
GAAP net loss  $ (14,852)  $ (13,463)  $ (32,998)  $ (73,488)
OSB lawsuit settlement gain  (5,236)  --  (5,236)  --
Tender offer expenses  3,030  --  3,030  --
Gain on early cancellation of Master Supply Agreement with G-P  --  (144)  --  (17,554)
Gain from sale of certain surplus properties  --  (169)  --  (4,406)
Changes associated with the ineffective interest rate swap  (1,156)  1,431  (3,217)  7,341
Facility consolidations & severance related costs  342  172  342  1,878
Write-off of debt issuance costs  183  --  183  1,407
Tax effect of selected charges  1,095  (498)  1,890  4,352
Valuation allowance  6,033  5,150  13,017  45,096
Adjusted net loss  $ (10,561)  $ (7,521)  $ (22,989)  $ (35,374)
         
CONTACT:  BlueLinx Holdings Inc.           Doug Goforth, CFO & Treasurer             (770) 953-7505          Investor Relations:          Maryon Davis, Director Finance & IR            (770) 221-2666

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