EX-99.1 2 c76480exv99w1.htm EXHIBIT 99.1
Exhibit 99.1
4300 Wildwood Parkway
Atlanta, GA 30339
1-888-502-BLUE
www.BlueLinxCo.com

BlueLinx Contacts: |  |
Doug Goforth, CFO & Treasurer |  | Investor Relations:
BlueLinx Holdings Inc. |  | Russ Zukowski, Vice President Finance
(770) 953-7505 |  | (770) 953-7620

FOR IMMEDIATE RELEASE
BLUELINX ANNOUNCES THIRD-QUARTER RESULTS
– Net Loss of $0.08 per Diluted Share on $727 Million Revenue –
– Gross Margin Rises from Year Ago at 11.5% for Quarter –
ATLANTA — October 30, 2008 — BlueLinx Holdings Inc. (NYSE: BXC), a leading distributor of building products in North America, today reported financial results for the third quarter ended September 27, 2008.
The company’s third-quarter net loss totaled $2.6 million, or $0.08 per diluted share, compared with net income of $0.9 million, or $0.03 per diluted share, in the year-ago period. The reported net loss includes an after-tax restructuring charge of approximately $2.0 million, or $0.06 per diluted share, related to the previously announced closing of our California based Lane Stanton Vance milling and manufacturing operations and an after-tax charge of approximately $1.6 million, or $0.05 per diluted share, related to a lower of cost or market reserve due to a decline in prices for our metal inventory. Revenues of $727 million declined 28.5% from $1.02 billion for the same period a year ago. The decline in revenue reflects a 36% drop in structural product sales and a 19% decline in specialty product sales from the year ago period. The decline in sales is primarily attributable to a decline in unit volume partially offset by increases in underlying structural product prices. The overall third-quarter unit volume decline of 33% was mainly due to lower unit volumes in both structural and specialty products driven predominately by a 33% decline in housing starts relative to year ago levels.
Gross profit for the third quarter totaled $83.2 million, compared with $102.8 million for the prior-year period, largely reflecting reduced unit volume associated with the ongoing housing starts decline. The decrease in gross profit related to volume was offset in part by an increase in gross margin to 11.5% from 10.1% a year earlier. Overall margins improved as a result of the Company’s ongoing initiatives to increase margins across all product categories combined with increases in underlying product prices.
Total operating expenses of $78.7 million decreased $11.2 million, or 12.5%, from the same period a year ago, reflecting the Company’s ongoing focus on managing expenses to the current operating environment. Operating income for the quarter totaled $4.5 million, compared with $12.9 million a year ago.
For the nine months ended September 27, 2008, net loss totaled $6.6 million, or $0.21 per diluted share, on revenues of $2.28 billion, compared with net income of $6.1 million, or $0.20 per diluted share, on revenues of $3.06 billion a year ago. The decline in income and revenue was largely due to a decline in volume of 28% primarily driven by a decline in housing starts of 31% from the prior year to date period partially offset by increases in underlying product prices.

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BlueLinx Q3’08 Press Release October 30, 2008 |  | Page 2 of 5

Gross profit for the nine months totaled $268.5 million and gross margin was 11.8%, compared with $325.8 million and 10.7%, respectively, a year earlier. Operating expenses declined to $250.7 million from $282.5 million a year ago.
“While our results were impacted by the downturn in the housing market our performance was in-line with our expectations for the quarter” said George Judd, newly appointed chief executive officer. “We remain focused on managing cash flow by tightly managing inventories, receivables and our operating expenses. During the third quarter, we continued to provide quality service to our customers and suppliers, generated $69 million in cash flow from operating activities and ended the period with $71 million in cash plus $227 million in excess borrowing availability on our revolving credit facility. While we expect a very difficult fourth quarter, Bluelinx is financially and operationally positioned to be able to continue executing throughout this unprecedented housing downturn.” Judd added.
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# 68749745. 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, 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 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 2,200 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 more than 70 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. 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 our control, that may cause our 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 we distribute, especially as a result of conditions in the residential housing market; general economic and business conditions in the United States; the activities of competitors; changes in significant operating expenses; changes in the availability of capital 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 December 29, 2007 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.
– Tables to Follow –

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BlueLinx Q3’08 Press Release October 30, 2008 |  | Page 3 of 5

BlueLinx Holdings Inc.
Statements of Operations
in thousands, except per share data

|  | Quarters Ended |  |  | Nine Months Ended |
|  | September 27, |  |  | September 29, |  |  | September 27, |  |  | September 29, |
|  | 2008 |  |  | 2007 |  |  | 2008 |  |  | 2007 |
|  | (unaudited) |  |  | (unaudited) |  |  | (unaudited) |  |  | (unaudited) |
Net sales |  | $ | 726,756 |  |  | $ | 1,015,888 |  |  | $ | 2,278,185 |  |  | $ | 3,054,992 |
Cost of sales |  |  | 643,507 |  |  |  | 913,078 |  |  |  | 2,009,698 |  |  |  | 2,729,189 |
Gross profit |  |  | 83,249 |  |  |  | 102,810 |  |  |  | 268,487 |  |  |  | 325,803 |
Operating expenses: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Selling, general, and administrative |  |  | 73,793 |  |  |  | 84,826 |  |  |  | 235,655 |  |  |  | 266,640 |
Depreciation and amortization |  |  | 4,940 |  |  |  | 5,106 |  |  |  | 15,011 |  |  |  | 15,840 |
Total operating expenses |  |  | 78,733 |  |  |  | 89,932 |  |  |  | 250,666 |  |  |  | 282,480 |
Operating income |  |  | 4,516 |  |  |  | 12,878 |  |  |  | 17,821 |  |  |  | 43,323 |
Non-operating expenses: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Interest expense |  |  | 8,791 |  |  |  | 11,352 |  |  |  | 27,530 |  |  |  | 33,756 |
Other expense (income), net |  |  | 65 |  |  |  | 7 |  |  |  | 385 |  |  |  | (601 | )
(Loss) income before (benefit from) provision for income taxes |  |  | (4,340 | ) |  |  | 1,519 |  |  |  | (10,094 | ) |  |  | 10,168 |
(Benefit from) provision for income taxes |  |  | (1,746 | ) |  |  | 629 |  |  |  | (3,508 | ) |  |  | 4,033 |
Net (loss) income |  | $ | (2,594 | ) |  | $ | 890 |  |  | $ | (6,586 | ) |  | $ | 6,135 |
Basic weighted average number of common shares outstanding |  |  | 31,150 |  |  |  | 30,853 |  |  |  | 31,053 |  |  |  | 30,834 |
Basic net (loss) income per share applicable to common stock |  | $ | (0.08 | ) |  | $ | 0.03 |  |  | $ | (0.21 | ) |  | $ | 0.20 |
Diluted weighted average number of common shares outstanding |  |  | 31,150 |  |  |  | 30,951 |  |  |  | 31,053 |  |  |  | 30,947 |
Diluted net (loss) income per share applicable to common stock |  | $ | (0.08 | ) |  | $ | 0.03 |  |  | $ | (0.21 | ) |  | $ | 0.20 |
Dividends declared per share of common stock |  | $ | — |  |  | $ | 0.125 |  |  | $ | — |  |  | $ | 0.38 |

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BlueLinx Q3’08 Press Release October 30, 2008 |  | Page 4 of 5

BlueLinx Holdings Inc.
Balance Sheets
in thousands

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

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BlueLinx Q3’08 Press Release October 30, 2008 |  | Page 5 of 5

BlueLinx Holdings Inc.
Statements of Cash Flows
in thousands

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

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