Supplemental Condensed Consolidating Financial Statements

The condensed consolidating financial information as of January 3, 2015, and January 4, 2014, and for fiscal 2014, fiscal 2013, and fiscal 2012 is provided due to restrictions in our U.S. revolving credit facility that limit distributions by BlueLinx Corporation, our operating company and our wholly-owned subsidiary, to us; which, in turn, may limit our ability to pay dividends to holders of our common stock. Also included in the supplemental condensed consolidated/combining financial statements are fifty-two single member limited liability companies, which are wholly owned by us (the “LLC subsidiaries”). The LLC subsidiaries own certain warehouse properties that are occupied by BlueLinx Corporation, each under the terms of a master lease agreement. The warehouse properties collateralize a mortgage loan and are not available to satisfy the debts and other obligations of either us or BlueLinx Corporation. Certain changes have been made to the prior year presentation to conform to the current year presentation.

The condensed consolidating statement of operations for BlueLinx Holdings Inc. for the fiscal year ended January 3, 2015, follows:



	BlueLinx Holdings			BlueLinx Corporation and Subsidiaries			LLC Subsidiaries			Eliminations			Consolidated
	(In thousands)
Net sales	$	—		$	1,979,393		$	26,329		$	(26,329	)	$	1,979,393
Cost of sales	—			1,750,289			—			—			1,750,289
Gross profit	—			229,104			26,329			(26,329		)	229,104
Operating expenses:
Selling, general, and administrative	5,498			232,186			(5,260		)	(26,329		)	206,095
Depreciation and amortization	—			6,405			3,068			—			9,473
Total operating expenses	5,498			238,591			(2,192		)	(26,329		)	215,568
Operating income (loss)	(5,498		)	(9,487		)	28,521			—			13,536
Non-operating expenses:
Interest expense	—			13,688			13,083			—			26,771
Other expense (income), net	—			337			(12		)	—			325
Income (loss) before provision for (benefit from) income taxes	(5,498		)	(23,512		)	15,450			—			(13,560		)
Provision for (benefit from) income taxes	(160		)	22			450			—			312
Equity income (loss) of subsidiaries	(8,534		)	—			—			8,534			—
Net income (loss)	$	(13,872	)	$	(23,534	)	$	15,000		$	8,534		$	(13,872	)

The condensed consolidating statement of operations for BlueLinx Holdings Inc. for the fiscal year ended January 4, 2014, follows:



	BlueLinx Holdings			BlueLinx Corporation and Subsidiaries			LLC Subsidiaries			Eliminations			Consolidated
	(In thousands)
Net sales	$	—		$	2,151,972		$	27,363		$	(27,363	)	$	2,151,972
Cost of sales	—			1,923,489			—			—			1,923,489
Gross profit	—			228,483			27,363			(27,363		)	228,483
Operating expenses:
Selling, general, and administrative	5,913			267,232			(5,115		)	(27,363		)	240,667
Depreciation and amortization	—			5,700			3,417			—			9,117
Total operating expenses	5,913			272,932			(1,698		)	(27,363		)	249,784
Operating income (loss)	(5,913		)	(44,449		)	29,061			—			(21,301		)
Non-operating expenses:
Interest expense	—			13,686			14,338			—			28,024
Other expense (income), net	—			318			(12		)	—			306
Income (loss) before provision for (benefit from) income taxes	(5,913		)	(58,453		)	14,735			—			(49,631		)
Provision for (benefit from) income taxes	(157		)	(9,248		)	392			—			(9,013		)
Equity income (loss) of subsidiaries	(34,862		)	—			—			34,862			—
Net income (loss)	$	(40,618	)	$	(49,205	)	$	14,343		$	34,862		$	(40,618	)

The condensed consolidating statement of operations for BlueLinx Holdings Inc. for the fiscal year ended December 29, 2012, follows:



	BlueLinx Holdings			BlueLinx Corporation and Subsidiaries			LLC Subsidiaries			Eliminations			Consolidated
	(In thousands)
Net sales	$	—		$	1,907,842		$	28,330		$	(28,330	)	$	1,907,842
Cost of sales	—			1,677,772			—			—			1,677,772
Gross profit	—			230,070			28,330			(28,330		)	230,070
Operating expenses:
Selling, general, and administrative	3,940			250,098			(9,712		)	(28,330		)	215,996
Depreciation and amortization	—			5,040			3,525			—			8,565
Total operating expenses	3,940			255,138			(6,187		)	(28,330		)	224,561
Operating income (loss)	(3,940		)	(25,068		)	34,517			—			5,509
Non-operating expenses:
Interest expense	—			12,159			15,998			—			28,157
Other expense (income), net	—			10			(17		)	—			(7		)
Income (loss) before provision for (benefit from) income taxes	(3,940		)	(37,237		)	18,536			—			(22,641		)
Provision for (benefit from) income taxes	386			—			—			—			386
Equity income (loss) of subsidiaries	(18,701		)	—			—			18,701			—
Net income (loss)	$	(23,027	)	$	(37,237	)	$	18,536		$	18,701		$	(23,027	)

The condensed consolidating balance sheet for BlueLinx Holdings Inc. as of January 3, 2015, follows:



	BlueLinx Holdings Inc.			BlueLinx Corporation and Subsidiaries			LLC Subsidiaries			Eliminations			Consolidated
	(In thousands)
Assets:
Current assets:
Cash	$	27		$	4,495		$	—		$	—		$	4,522
Receivables	—			144,537			—			—			144,537
Inventories	—			242,546			—			—			242,546
Deferred income tax asset, net	—			—			50			(50		)	—
Other current assets	228			22,353			708			—			23,289
Intercompany receivable	74,071			30,634			—			(104,705		)	—
Total current assets	74,326			444,565			758			(104,755		)	414,894
Property and equipment:
Land and land improvements	—			4,061			37,034			—			41,095
Buildings	—			11,367			78,794			—			90,161
Machinery and equipment	—			77,279			—			—			77,279
Construction in progress	—			1,188			—			—			1,188
Property and equipment, at cost	—			93,895			115,828			—			209,723
Accumulated depreciation	—			(70,077		)	(34,379		)	—			(104,456		)
Property and equipment, net	—			23,818			81,449			—			105,267
Investment in subsidiaries	(78,264		)	—			—			78,264			—
Non-current deferred income tax assets, net	—			551			—			(50		)	501
Other non-current assets	—			9,739			8,581			—			18,320
Total assets	$	(3,938	)	$	478,673		$	90,788		$	(26,541	)	$	538,982
Liabilities:
Current liabilities:
Accounts payable	$	606		$	66,685		$	—		$	—		$	67,291
Bank overdrafts	—			27,280			—			—			27,280
Accrued compensation	23			5,620			—			—			5,643
Current maturities of long-term debt	—			—			2,679			—			2,679
Deferred income tax liabilities, net	—			568			—			(50		)	518
Other current liabilities	413			12,342			1,076			—			13,831
Intercompany payable	30,633			74,072			—			(104,705		)	—
Total current liabilities	31,675			186,567			3,755			(104,755		)	117,242
Non-current liabilities:
Long-term debt	—			229,353			173,921			—			403,274
Non-current deferred income taxes	—			—			50			(50		)	—
Other non-current liabilities	413			54,079			—			—			54,492
Total liabilities	32,088			469,999			177,726			(104,805		)	575,008
Stockholders’ equity (deficit)/Parent’s investment	(36,026		)	8,674			(86,938		)	78,264			(36,026		)
Total liabilities and equity (deficit)	$	(3,938	)	$	478,673		$	90,788		$	(26,541	)	$	538,982

The condensed consolidating balance sheet for BlueLinx Holdings Inc. as of January 4, 2014, follows:



	BlueLinx Holdings Inc.			BlueLinx Corporation and Subsidiaries			LLC Subsidiaries			Eliminations			Consolidated
	(In thousands)
Assets:
Current assets:
Cash	$	47		$	4,987		$	—		$	—		$	5,034
Receivables	—			150,297			—			—			150,297
Inventories	—			223,580			—			—			223,580
Deferred income tax asset, net	—			—			397			(397		)	—
Other current assets	790			20,208			1,816			—			22,814
Intercompany receivable	68,454			26,374			—			(94,828		)	—
Total current assets	69,291			425,446			2,213			(95,225		)	401,725
Property and equipment:
Land and land improvements	—			4,040			37,136			—			41,176
Buildings	—			10,839			79,243			—			90,082
Machinery and equipment	—			73,004			—			—			73,004
Construction in progress	—			3,028			—			—			3,028
Property and equipment, at cost	—			90,911			116,379			—			207,290
Accumulated depreciation	—			(64,557		)	(31,614		)	—			(96,171		)
Property and equipment, net	—			26,354			84,765			—			111,119
Investment in subsidiaries	(47,735		)	—			—			47,735			—
Non-current deferred income tax assets, net	—			1,221			—			(397		)	824
Other non-current assets	—			11,768			3,053			—			14,821
Total assets	$	21,556		$	464,789		$	90,031		$	(47,887	)	$	528,489
Liabilities:
Current liabilities:
Accounts payable	$	1,080		$	59,283		$	—		$	—		$	60,363
Bank overdrafts	—			19,377			—			—			19,377
Accrued compensation	—			4,173			—			—			4,173
Current maturities of long-term debt	—			—			9,141			—			9,141
Deferred income tax liabilities, net	—			1,220			—			(397		)	823
Other current liabilities	—			11,727			1,222			—			12,949
Intercompany payable	26,374			68,454			—			(94,828		)	—
Total current liabilities	27,454			164,234			10,363			(95,225		)	106,826
Non-current liabilities:
Long-term debt	—			211,193			176,045			—			387,238
Non-current deferred income taxes	—			—			397			(397		)	—
Other non-current liabilities	—			40,323			—			—			40,323
Total liabilities	27,454			415,750			186,805			(95,622		)	534,387
Stockholders’ equity (deficit)/Parent’s investment	(5,898		)	49,039			(96,774		)	47,735			(5,898		)
Total liabilities and equity (deficit)	$	21,556		$	464,789		$	90,031		$	(47,887	)	$	528,489

The condensed consolidating statement of cash flows for BlueLinx Holdings Inc. for the fiscal year ended January 3, 2015, follows (in thousands):



	BlueLinx Holdings Inc.			BlueLinx Corporation			LLC Subsidiaries			Eliminations			Consolidated
Cash flows from operating activities:
Net (loss) income	$	(13,872	)	$	(23,534	)	$	15,000		$	8,534		$	(13,872	)
Adjustments to reconcile net (loss) income to cash (used in) provided by operating activities:
Depreciation and amortization	—			6,405			3,068			—			9,473
Amortization of debt issue costs	—			1,735			1,421			—			3,156
Loss (gain) from sale of properties	—			—			(5,251		)	—			(5,251		)
Severance charges	—			2,067			—			—			2,067
Restructuring payments	—			(2,805		)	—			—			(2,805		)
Deferred income tax benefit	—			17			—			—			17
Pension expense	—			901			—			—			901
Share-based compensation, excluding restructuring related	1,590			2,250			—			—			3,840
Increase in restricted cash related to insurance and other	—			(263		)	—			—			(263		)
Decrease (increase) in prepaid assets	89			(1,031		)	—			—			(942		)
Accrued compensation and other	1,322			(2,857		)	(907		)	—			(2,442		)
Equity in earnings of subsidiaries	8,534			—			—			(8,534		)	—
Intercompany receivable	(5,617		)	(4,262		)	—			9,879			—
Intercompany payable	4,259			5,620			—			(9,879		)	—
	(3,695		)	(15,757		)	13,331			—			(6,121		)
Changes in primary working capital components:
Receivables	—			5,760			—			—			5,760
Inventories	—			(18,966		)	—			—			(18,966		)
Accounts payable	(376		)	7,402			—			—			7,026
Net cash (used in) provided by operating activities	(4,071		)	(21,561		)	13,331			—			(12,301		)
Cash flows from investing activities:
Investment in subsidiaries	4,359			806			(5,165		)	—			—
Property, plant and equipment investments	—			(3,016		)	—			—			(3,016		)
Proceeds from disposition of assets	—			248			7,120			—			7,368
Net cash provided by (used in) investing activities	4,359			(1,962		)	1,955			—			4,352
Cash flows from financing activities:
Excess tax benefits from share-based compensation arrangements	—			(16		)	—			—			(16		)
Repurchase of shares to satisfy employee tax withholdings	(210		)	(747		)	—			—			(957		)
Repayments on revolving credit facilities	—			(476,473		)	—			—			(476,473		)
Borrowings on revolving credit facilities	—			494,794			—			—			494,794
Payments of principal on mortgage	—			—			(9,220		)	—			(9,220		)
Payments on capital lease obligations	—			(2,228		)	—			—			(2,228		)
(Decrease) increase in bank overdrafts	—			7,902			—			—			7,902
Increase in restricted cash related to the mortgage	—			—			(6,066		)	—			(6,066		)
Proceeds from rights offering, less expenses paid	(98		)	—			—			—			(98		)
Debt issuance costs	—			(201		)	—			—			(201		)
Net cash provided by (used in) financing activities	(308		)	23,031			(15,286		)	—			7,437
Increase (decrease) in cash	(20		)	(492		)	—			—			(512		)
Balance, beginning of period	47			4,987			—			—			5,034
Balance, end of period	$	27		$	4,495		$	—		$	—		$	4,522
Supplemental cash flow information:
Net income tax refunds (income taxes paid) during the period	$	—		$	40		$	(250	)	$	—		$	(210	)
Interest paid during the period	$	—		$	11,490		$	11,657		$	—		$	23,147
Noncash transactions:
Capital leases	$	—		$	1,108		$	—		$	—		$	1,108

The condensed consolidating statement of cash flows for BlueLinx Holdings Inc. for the fiscal year ended January 4, 2014, follows (in thousands):



	BlueLinx Holdings Inc.			BlueLinx Corporation			LLC Subsidiaries			Eliminations			Consolidated
Cash flows from operating activities:
Net (loss) income	$	(40,618	)	$	(49,205	)	$	14,343		$	34,862		$	(40,618	)
Adjustments to reconcile net (loss) income to cash (used in) provided by operating activities:
Depreciation and amortization	—			5,700			3,417			—			9,117
Amortization of debt issue costs	—			1,841			1,343			—			3,184
Write-off of debt issuance costs	—			119			—			—			119
Loss (gain) from sale of properties	—			554			(5,774		)	—			(5,220		)
Vacant property charges, net	—			1,321			—			—			1,321
Severance charges	—			5,607			—			—			5,607
Payments on modification of lease agreement	—			(300		)	—			—			(300		)
Deferred income tax benefit	—			(5		)	(397		)	397			(5		)
Restructuring payments	—			(3,057		)	—			—			(3,057		)
Intraperiod income tax allocation related to the hourly pension plan	—			(8,894		)	—			—			(8,894		)
Pension expense	—			4,591			—			—			4,591
Share-based compensation, excluding restructuring related	904			2,318			—			—			3,222
Share-based compensation, restructuring related	—			2,895			—			—			2,895
Increase in restricted cash related to insurance and other	—			(1,810		)	—			—			(1,810		)
Decrease (increase) in prepaid assets	(14		)	(3,048		)	—			—			(3,062		)
Accrued compensation and other	698			(3,959		)	625			(397		)	(3,033		)
Equity (deficit) in earnings of subsidiaries	34,862			—			—			(34,862		)	—
Intercompany receivable	5,527			2,440			—			(7,967		)	—
Intercompany payable	(2,440		)	(5,527		)	—			7,967			—
	(1,081		)	(48,419		)	13,557			—			(35,943		)
Changes in primary working capital components:
Receivables	—			7,168			—			—			7,168
Inventories	—			6,479			—			—			6,479
Accounts payable	779			(17,973		)	(391		)	—			(17,585		)
Net cash (used in) provided by operating activities	(302		)	(52,745		)	13,166			—			(39,881		)
Cash flows from investing activities:
Investment in subsidiaries	(35,202		)	38,663			(3,461		)	—			—
Property, plant and equipment investments	—			(4,912		)	—			—			(4,912		)
Proceeds from disposition of assets	—			1,072			9,293			—			10,365
Net cash provided by (used in) investing activities	(35,202		)	34,823			5,832			—			5,453
Cash flows from financing activities:
Excess tax benefits from share-based compensation arrangements	—			16			—			—			16
Repurchase of shares to satisfy employee tax withholdings	(3,192		)	—			—			—			(3,192		)
Repayments on revolving credit facilities	—			(560,186		)	—			—			(560,186		)
Borrowings on revolving credit facilities	—			599,968			—			—			599,968
Payments of principal on mortgage	—			—			(19,038		)	—			(19,038		)
Payments on capital lease obligations	—			(3,142		)	—			—			(3,142		)
(Decrease) increase in bank overdrafts	—			(16,007		)	—			—			(16,007		)
Increase in restricted cash related to the mortgage	—			—			40			—			40
Proceeds from rights offering, less expenses paid	38,715			—			—			—			38,715
Debt issuance costs	—			(2,900		)	—			—			(2,900		)
Net cash provided by (used in) financing activities	35,523			17,749			(18,998		)	—			34,274
Increase (decrease) in cash	19			(173		)	—			—			(154		)
Balance, beginning of period	28			5,160			—			—			5,188
Balance, end of period	$	47		$	4,987		$	—		$	—		$	5,034
Supplemental cash flow information:
Net income taxes paid during the period	$	—		$	(61	)	$	(271	)	$	—		$	(332	)
Interest paid during the period	$	—		$	11,226		$	13,480		$	—		$	24,706
Noncash transactions:
Capital leases	$	—		$	5,069		$	—		$	—		$	5,069

The condensed consolidating statement of cash flows for BlueLinx Holdings Inc. for the fiscal year ended December 29, 2012, follows (in thousands):



	BlueLinx Holdings Inc.			BlueLinx Corporation			LLC Subsidiaries			Eliminations			Consolidated
Cash flows from operating activities:
Net (loss) income	$	(23,027	)	$	(37,237	)	$	18,536		$	18,701		$	(23,027	)
Adjustments to reconcile net (loss) income to cash (used in) provided by operations:
Depreciation and amortization	—			5,040			3,525			—			8,565
Amortization of debt issue costs	—			2,471			1,275			—			3,746
Gain from sale of properties	—			—			(9,885		)	—			(9,885		)
Gain from property insurance settlement	—			—			(476		)	—			(476		)
Vacant property charges, net	—			(30		)	—			—			(30		)
Payments on modification of lease agreement	—			(5,875		)	—			—			(5,875		)
Deferred income tax benefit	—			(20		)	—			—			(20		)
Restructuring payments	—			(6,084		)	—			—			(6,084		)
Pension expense	—			3,942			—			—			3,942
Share-based compensation, excluding restructuring related	528			2,269			—			—			2,797
Decrease (increase) in restricted cash related to insurance and other	—			695			—			—			695
Decrease (increase) in prepaid assets	189			700			—			—			889
Accrued compensation and other	(1,160		)	6,259			(561		)	—			4,538
Equity (deficit) in earnings of subsidiaries	18,701			—			—			(18,701		)	—
Intercompany receivable	(6,940		)	(10,332		)	—			17,272			—
Intercompany payable	10,332			6,940			—			(17,272		)	—
	(1,377		)	(31,262		)	12,414			—			(20,225		)
Changes in primary working capital components:
Receivables	—			(18,593		)	—			—			(18,593		)
Inventories	—			(44,482		)	—			—			(44,482		)
Accounts payable	42			8,619			389			—			9,050
Net cash (used in) provided by operating activities	(1,335		)	(85,718		)	12,803			—			(74,250		)
Cash flows from investing activities:
Investment in subsidiaries	1,862			154			(2,016		)	—			—
Property, plant and equipment investments	—			(2,826		)	—			—			(2,826		)
Proceeds from disposition of assets	—			997			18,198			—			19,195
Net cash provided by (used in) investing activities	1,862			(1,675		)	16,182			—			16,369
Cash flows from financing activities:
Repurchase of shares to satisfy employee tax withholdings	(526		)	—			—			—			(526		)
Repayments on revolving credit facilities	—			(473,349		)	—			—			(473,349		)
Borrowings on revolving credit facilities	—			550,270			—			—			550,270
Principal payments on mortgage	—			—			(37,272		)	—			(37,272		)
Payments on capital lease obligations	—			(2,259		)	—			—			(2,259		)
Increase in bank overdrafts	—			13,020			—			—			13,020
Decrease in restricted cash related to the mortgage	—			—			9,970			—			9,970
Debt financing costs	—			—			(1,683		)	—			(1,683		)
Net cash (used in) provided by financing activities	(526		)	87,682			(28,985		)	—			58,171
Increase in cash	1			289			—			—			290
Cash balance, beginning of period	27			4,871			—			—			4,898
Cash and cash equivalents balance, end of period	$	28		$	5,160		$	—		$	—		$	5,188
Supplemental cash flow information:
Net income tax refunds (income taxes paid) during the period	$	—		$	37		$	(545	)	$	—		$	(508	)
Interest paid during the period	$	—		$	9,309		$	14,979		$	—		$	24,288
Noncash transactions:
Capital leases	$	—		$	5,238		$	—		$	—		$	5,238

The condensed consolidating statement of stockholders’ equity (deficit) for BlueLinx Holdings Inc. for fiscal 2012, fiscal 2013, and fiscal 2014 follows:



	BlueLinx Holdings Inc.			BlueLinx Corporation and Subsidiaries			LLC Subsidiaries			Eliminations			Consolidated
	(In thousands)
Balance, December 31, 2011	$	8,374		$	83,626		$	(124,175	)	$	40,549		$	8,374
Net (loss) income	(23,027		)	(37,237		)	18,536			18,701			(23,027		)
Foreign currency translation adjustment, net of tax	103			103			—			(103		)	103
Unrealized loss (income) from pension plan, net of tax	(8,245		)	(8,245		)	—			8,245			(8,245		)
Issuance of restricted stock, net of forfeitures	19			19			—			(19		)	19
Compensation related to share-based grants	2,730			—			—			—			2,730
Impact of net settled shares for vested grants	(526		)	—			—			—			(526		)
Other	(20		)	—			—			—			(20		)
Net transactions with the Parent	—			2,337			(2,017		)	(320		)	—
Balance, December 29, 2012	$	(20,592	)	$	40,603		$	(107,656	)	$	67,053		$	(20,592	)
Net (loss) income	(40,618		)	(49,205		)	14,343			34,862			(40,618		)
Foreign currency translation adjustment, net of tax	(161		)	(161		)	—			161			(161		)
Unrealized income (loss) from pension plan, net of tax	13,910			13,910			—			(13,910		)	13,910
Issuance of restricted stock, net of forfeitures	6			6			—			(6		)	6
Issuance of performance shares	6			6			—			(6		)	6
Issuance of stock related to the rights offering, net of expenses	38,613			—			—			—			38,613
Compensation related to share-based grants	6,117			—			—			—			6,117
Impact of net settled shares for vested grants	(3,193		)	—			—			—			(3,193		)
Excess tax benefits from share-based compensation arrangements	16			—			—			—			16
Other	(2		)	—			—			—			(2		)
Net transactions with the Parent	—			43,880			(3,461		)	(40,419		)	—
Balance, January 4, 2014	$	(5,898	)	$	49,039		$	(96,774	)	$	47,735		$	(5,898	)
Net (loss) income	(13,872		)	(23,534		)	15,000			8,534			(13,872		)
Foreign currency translation adjustment, net of tax	(481		)	(481		)	—			481			(481		)
Unrealized income (loss) from pension plan, net of tax	(17,651		)	(17,651		)	—			17,651			(17,651		)
Issuance of restricted stock, net of forfeitures	18			—			—			—			18
Issuance of performance shares	10			—			—			—			10
Issuance of stock related to the rights offering, net of expenses	—			—			—			—			—
Compensation related to share-based grants	2,896			—			—			—			2,896
Impact of net settled shares for vested grants	(963		)	—			—			—			(963		)
Excess tax benefits from share-based compensation arrangements	(16		)	—			—			—			(16		)
Other	(69		)	—			—			—			(69		)
Net transactions with the Parent	—			1,301			(5,164		)	3,863			—
Balance, January 3, 2015	$	(36,026	)	$	8,674		$	(86,938	)	$	78,264		$	(36,026	)