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UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form 10-K
     
(Mark one)
   
þ
  ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
 
    For the fiscal year ended January 1, 2005
 
OR
 
o
  TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
BLUELINX HOLDINGS INC.
(Exact name of registrant as specified in its charter)
     
Delaware
  77-0627356
(State or other jurisdiction of
incorporation or organization)
  (I.R.S. Employer
Identification No.)
 
4300 Wildwood Parkway, Atlanta, Georgia   30339
(Address of principal executive offices)   (Zip Code)
Registrant’s telephone number, including area code 770-953-7000
Securities registered pursuant to Section 12(b) of the Act:
     
Title of each class   Name of exchange on which registered
     
Common stock, par value $0.01 per share
  New York Stock Exchange
Securities registered pursuant to Section 12(g) of the Act: None
      Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.     Yes þ No o
      Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of the registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K.     þ
      Indicate by check mark whether the registrant is an accelerated filer (as defined in Rule 12b-2 of the Act).     Yes o No     þ
      As of March 15, 2005, the registrant had 30,185,000 shares of common stock outstanding.
DOCUMENTS INCORPORATED BY REFERENCE
      Portions of BlueLinx Holdings Inc.’s definitive Proxy Statement for use in connection with its Annual Meeting of Stockholders, scheduled to be held on May 11, 2005, have been incorporated by reference into Part III of this Report.



BLUELINX HOLDINGS INC.
ANNUAL REPORT ON FORM 10-K
For the Fiscal Year Ended January 1, 2005
TABLE OF CONTENTS
             
 PART I
   Business     3  
   Properties     8  
   Legal Proceedings     9  
   Submission of Matters to a Vote of Security Holders     10  
 
 PART II
   Market for the Registrant’s Common Equity and Related Stockholder Matters     10  
   Selected Financial Data     11  
   Management’s Discussion and Analysis of Financial Condition and Results of Operations     14  
   Quantitative and Qualitative Disclosures about Market Risk     33  
   Financial Statements and Supplementary Data     34  
   Changes in and Disagreements with Accountants on Accounting and Financial Disclosure     67  
   Controls and Procedures     67  
   Other Information     67  
 
 PART III
   Directors and Executive Officers of the Registrant     67  
   Executive Compensation     67  
   Security Ownership of Certain Beneficial Owners and Management     67  
   Certain Relationships and Related Transactions     68  
   Principal Accountant Fees and Services     68  
 
 PART IV
   Exhibits, Financial Statements, Schedules and Reports on Form 8-K     68  
 EX-14.1 CODE OF ETHICS FOR BLUELINX
 EX-31.1 CERTIFICATION OF CHARLES H. MCELREA, CEO
 EX-31.2 CERTIFICATION OF DAVID J. MORRIS, CFO
 EX-32.1 CERTIFICATION OF CHARLES H. MCELREA, CEO
 EX-32.2 CERTIFICATION OF CHARLES H. MCELREA, CEO

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CAUTIONARY STATEMENT CONCERNING FORWARD-LOOKING STATEMENTS
      This Annual Report on Form 10-K includes “forward-looking statements.” Forward-looking statements include, without limitation, any statement that may predict, forecast, indicate or imply future results, performance or achievements, and may contain the words “believe,” “anticipate,” “expect,” “estimate,” “intend,” “project,” “plan,” “will be,” “will likely continue,” “will likely result” or words or phrases of similar meaning. All of these forward-looking statements are based on estimates and assumptions made by our management that, although believed by us 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 those discussed under the heading “Factors Affecting Future Results” and other factors, some of which may not be known to us. We operate in a changing environment in which new risks can emerge from time to time. It is not possible for management to predict all of these risks, nor can it assess the extent to which any factor, or a combination of factors, may cause our business, strategy or actual results to differ materially from those contained in forward-looking statements. Factors you should consider that could cause these differences include, among other things:
  •  changes in the prices, supply and/or demand for products which we distribute;
 
  •  the activities of competitors;
 
  •  changes in significant operating expenses;
 
  •  changes in the availability of capital;
 
  •  our ability to identify acquisition opportunities and effectively and cost-efficiently integrate acquisitions;
 
  •  general economic and business conditions in the United States;
 
  •  acts of war or terrorist activities;
 
  •  variations in the performance of the financial markets; and
 
  •  the other factors described herein under “Factors Affecting Future Results.”
      Given these risks and uncertainties, we caution you not to place undue reliance on forward-looking statements. We undertake no obligation to publicly update or revise any forward-looking statement as a result of new information, future events or otherwise, except as required by law.

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PART I
      As used herein, unless the context otherwise requires, “BlueLinx,” and the “Company,” refer to BlueLinx Holdings Inc. and its subsidiaries. Reference to “fiscal 2004” refers to the 52-week period ended January 1, 2005 (fiscal 2004 is comprised of the period from inception (March 8, 2004) to January 1, 2005 and the period from January 4, 2004 to May 7, 2004). Reference to “fiscal 2003” refers to the 53-week period ended January 3, 2004. Reference to “fiscal 2002” refers to the 52-week period ended December 28, 2002.
ITEM 1. BUSINESS.
Company Overview
      BlueLinx Holdings Inc., operating through its wholly-owned subsidiary, BlueLinx Corporation, is a leading distributor of building products in the United States. The Company operates in all of the major metropolitan areas in the United States and, as of January 1, 2005, distributed over 10,000 products to more than 11,700 customers through the Company’s network of more than 60 warehouses and third-party operated warehouses.
      The Company distributes products in two principal categories: structural products and specialty products. Structural products, which represented approximately 57% of the Company’s fiscal 2004 gross sales, include plywood, oriented strand board, or OSB, lumber and other wood products primarily used for structural support, walls and flooring in residential construction projects. Specialty products, which represented approximately 43% of the Company’s fiscal 2004 gross sales, include roofing, insulation, moulding, engineered wood products, vinyl products (used primarily in siding) and metal products.
      BlueLinx’s customers include building materials dealers, industrial users of building products, manufactured housing builders and home improvement centers. The Company purchases products from over 750 vendors and serves as a national distributor for a number of the Company’s suppliers. BlueLinx distributes products through its owned fleet of over 900 trucks and over 1,200 trailers, as well as by common carrier.
      The Company’s net income was $56.2 million in fiscal 2003, and increased to $76.3 million in fiscal 2004. During fiscal 2004, net sales increased by 30% and unit sales by 8.2%, compared to fiscal 2003.
      The Company was created on March 8, 2004 as a Georgia corporation named ABP Distribution Holdings Inc., or ABP. ABP was owned by Cerberus Capital Management, L.P. (“Cerberus”), a private, New York-based investment firm, and members of our management team. Prior to May 7, 2004, the Company’s assets were owned by the distribution division (the “Division”) of Georgia-Pacific Corporation. The Division commenced operations in 1954 with 13 warehouses primarily used as an outlet for Georgia-Pacific’s plywood. On May 7, 2004, Georgia-Pacific sold the Division to ABP. ABP subsequently merged into BlueLinx Holdings Inc. The total purchase price for the acquisition of the assets, including fees and expenses was approximately $823 million. The acquisition was funded with net proceeds of $526 million from drawings under the Company’s revolving credit facility, net proceeds of $97 million from the Company’s former term loan, 94% of which was held by Cerberus and its affiliate, proceeds of $100 million from a mortgage loan payable to ABPMC LLC, or ABPMC, an affiliate of Cerberus, proceeds of $95 million from the issuance of preferred stock, 100% of which was held by an affiliate of Cerberus, and proceeds of $5 million from the issuance of common stock. In addition, the Company paid debt issue costs of $12.1 million and $3.2 million for its revolving credit facility and its former term loan facility, respectively.
      On October 27, 2004, the Company obtained from Column Financial, Inc., a wholly-owned subsidiary of Credit Suisse First Boston LLC, a new mortgage loan in the principal amount of $165 million. Proceeds from the new mortgage loan were used to (i) repay the Company’s then existing $100 million principal amount of mortgage debt including the unpaid interest thereon, and (ii) redeem a portion of the then outstanding shares of the Company’s series A preferred stock at an aggregate redemption price of approximately $59.2 million (including accrued and unpaid dividends thereon).

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      On December 17, 2004, the Company consummated an initial public offering of 9,500,000 shares of its common stock, par value $.01 per share, at the initial public offering price of $13.50 per share (the “Equity Offering”). On January 5, 2005, the underwriters for the Equity Offering exercised an option to purchase 685,000 additional shares of common stock to cover the over-allotment of shares in connection with the Equity Offering. BlueLinx received net proceeds from the Equity Offering of $124.1 million (including net proceeds of $8.6 million from the exercise of the over-allotment option). Net proceeds from the offering and funds from the Company’s revolving credit facility were used (i) to repay the Company’s $100 million term loan plus accrued and unpaid interest thereon, and (ii) to redeem the remainder of the Company’s outstanding series A preferred stock, of which approximately $38.5 million was outstanding, and pay all accrued and unpaid dividends thereon. Unamortized debt issue costs of approximately $3 million were written off upon retirement of the term loan.
      The Company’s principal executive offices are located at 4300 Wildwood Parkway, Atlanta, Georgia 30339 and its telephone number is (770) 953-7000. BlueLinx’s official website address is www.BlueLinxCo.com. The Company’s board committee charters, code of conduct and ethics, and filings with the U.S. Securities and Exchange Commission, including annual reports on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K, and amendments to those reports, are accessible free of charge at www.BlueLinxCo.com. Any waiver of the terms of the Company’s code of conduct and ethics for the chief executive officer, the chief financial officer, any accounting officer and all other officers will be disclosed on its website. The reference to the Company’s website does not constitute incorporation by reference of the information contained at the site.
Products and Services
      As of January 1, 2005, the Company distributed over 10,000 different products to more than 11,700 customers nationwide. The Company distributes these products in two principal categories: structural products and specialty products. Structural products include plywood panels, OSB and lumber. These products are primarily used for structural support, walls, flooring and roofing in construction projects. Additional end-uses of the Company’s structural products include outdoor decks, sheathing, crates and boxes. Approximately 57% of the Company’s fiscal 2004 gross sales consisted of structural products. Specialty products include engineered lumber, roofing, insulation, metal products, vinyl products (used primarily in siding), moulding and particleboard. Specialty products generated 43% of the Company’s gross sales during fiscal 2004. In some cases, these products are branded.
      The Company also provides a wide range of value-added services and solutions to the Company’s customers and vendors including:
  •  providing “less-than-truckload” delivery services;
 
  •  pre-negotiated program pricing plans;
 
  •  inventory stocking;
 
  •  automated order processing through an electronic data interchange, or EDI, that provides a direct link between the Company’s customers and the Company;
 
  •  inter-modal distribution services, including railcar unloading and cargo reloading onto customers’ trucks; and
 
  •  back-haul services, when otherwise empty trucks are returning from customer deliveries.

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Distribution Channels
      The Company sells products through three main distribution channels:
Warehouse Sales
      Warehouse sales are delivered from the Company’s warehouses to dealers, home improvement centers and industrial users. The Company delivers products primarily using its fleet of over 900 trucks and over 1,200 trailers, but also occasionally uses common carriers for peak load flexibility. The Company operates in all of the major metropolitan areas in the United States through its network of more than 60 warehouses and third-party operated warehouses. The Company’s warehouses have over ten million square feet of space under roof plus significant outdoor storage space. Warehouse sales accounted for approximately 56% of the Company’s fiscal 2004 gross sales.
Reload Sales
      Reload sales are similar to warehouse sales but are shipped from third-party warehouses where the Company stores owned product in order to expand the Company’s geographic reach. This channel is employed primarily to service strategic customers that would be uneconomical to service from the Company’s warehouses and to distribute large volumes of imported products such as metal or hardwood plywood from port facilities. A large portion of the Company’s Canadian sales are reload sales. The Company leases space at some third-party warehouse facilities in Canada. Reload sales accounted for approximately 12% of the Company’s fiscal 2004 gross sales.
Direct Sales
      Direct sales are shipped from the manufacturer to the customer without the Company’s taking physical inventory possession. This channel requires the lowest amount of committed capital and fixed costs. Direct sales accounted for approximately 32% of the Company’s fiscal 2004 gross sales.
Customers
      As of January 1, 2005, the Company’s customer base included over 11,700 customers across multiple market segments and various end-use markets, including the following types of customers:
  •  building materials dealers;
 
  •  industrial users of building products;
 
  •  manufactured housing builders; and
 
  •  home improvement centers.
Sales and Marketing
      The Company’s sales efforts primarily are directed through its sales force of over 950 sales representatives. Approximately 600 of the Company’s sales representatives are located at its two sales centers in Denver and Atlanta. Within these sales centers, the Company’s sales representatives primarily interact with the Company’s customers over the telephone. The remaining 350 sales representatives are located throughout the country and are responsible for maintaining a local dialogue with the Company’s customers, including making frequent, in-person visits.
      The Company’s sales force is separated between industrial/dealer sales and home improvement center sales. Industrial/dealer sales are managed by regional vice-presidents with sales teams organized by customer regions. The majority of industrial/dealer orders are processed by telephone and are facilitated by the Company’s centralized database of customer preferences and purchasing history.

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Suppliers
      The Company’s vendor base includes over 750 suppliers of both structural and specialty building products. In some cases, these products are branded. The Company has supply contracts in place with many of its vendors. Terms for these agreements frequently include prompt payment discounts and freight allowances and occasionally include volume discounts, growth incentives, marketing allowances, consigned inventory and extended payment terms.
      Purchases of products manufactured by Georgia-Pacific accounted for approximately 27% of total purchases in fiscal 2004, with no other supplier accounting for more than 3.1% of fiscal 2004 purchases. As part of the acquisition transactions, whereby the Company acquired the assets of Georgia-Pacific’s distribution division, the Company entered into a Master Purchase, Supply & Distribution Agreement with Georgia-Pacific, or the Supply Agreement. The Supply Agreement details distribution rights by product categories, including exclusivity rights and minimum supply volume commitments from Georgia-Pacific with respect to certain products. This agreement also details the Company’s purchase obligations by product categories, including substantial minimum purchase volume commitments with respect to most of the products supplied to the Company. Based on 2004 average market prices, the Company’s purchase obligation under this agreement is approximately $1.2 billion for each of the next four years. If the Company fails or refuses to purchase any products that the Company is obligated to purchase pursuant to the Supply Agreement, Georgia-Pacific has the right to sell products to third parties and for certain products terminate the Company’s exclusivity, and the Company may be required to pay monetary penalties. The agreement has a five-year initial term and remains continuously in effect thereafter unless it is terminated. Termination of the Supply Agreement requires two years’ notice, exercisable after year four. The Supply Agreement may be terminated by either party for material breach. However, if the material breach only affects one or more, but not all, of the product categories, the non-breaching party may only terminate the Supply Agreement in respect of the affected product categories, and the Supply Agreement will remain in full force with respect to the remaining product categories. The Supply Agreement also provides for certain advertising, marketing and promotion arrangements between the Company and Georgia-Pacific for certain products. In addition, the Company was granted a limited, non-exclusive, royalty-free, fully paid license to use certain proprietary information and intellectual property of Georgia-Pacific.
Competition
      The U.S. building products distribution market is a highly fragmented market, served by a small number of multi-regional distributors, several regionally focused distributors and a large number of independent local distributors. Local and regional distributors tend to be closely held and often specialize in a limited number of segments, such as the roofing segment, in which they offer a broader selection of products. Some of the Company’s multi-regional competitors are part of larger companies and therefore have access to greater financial and other resources than the Company. The Company competes on the basis of breadth of product offering, consistent availability of product, product price and quality, reputation, service and distribution facility location.
      The Company’s two largest competitors are Weyerhaeuser Company, or Weyerhaeuser, and Boise Cascade Holdings, LLC, or Boise Cascade. Weyerhaeuser and Boise Cascade are integrated building products manufacturers-distributors that offer products manufactured by them as well as third-party manufactured products. Most major markets are served by at least one of these distributors.
Trademarks
      The Company has 35 U.S. trademark applications and registrations, one issued U.S. patent and one Canadian trademark registration. Depending on the jurisdiction, trademarks are valid as long as they are in use and/or their registrations are properly maintained and they have not become generic. Registrations of trademarks can generally be renewed indefinitely as long as the trademarks are in use. The Company’s

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patent expires in September 2013. The Company does not believe its business is dependent on any one of the Company’s trademarks or on its patent.
Employees
      As of March 1, 2005 the Company employed approximately 3,400 persons on a full-time basis. Approximately 1,200 of the Company’s employees are represented by labor unions. As of March 1, 2005, the Company had approximately 50 collective bargaining agreements, of which five are up for renewal in 2005. As of March 1, 2005, 124 employees were represented by the collective bargaining agreements which are up for renewal in 2005. The Company considers its relationship with its employees generally to be good.
Environmental and Other Governmental Regulations
Environmental Regulation and Compliance
      The Company’s operations are subject to various federal, state, provincial and local laws, rules and regulations.
      The Company is subject to environmental laws, rules and regulations that limit discharges into the environment, establish standards for the handling, generation, emission, release, discharge, treatment, storage and disposal of hazardous materials, substances and wastes, and require cleanup of contaminated soil and groundwater. These laws, ordinances and regulations are complex, change frequently and have tended to become more stringent over time. Many of them provide for substantial fines and penalties, orders (including orders to cease operations) and criminal sanctions for violations. They may also impose liability for property damage and personal injury stemming from the presence of, or exposure to, hazardous substances. In addition, certain of the Company’s operations require the Company to obtain, maintain compliance with, and periodically renew permits.
      Certain of these laws, including the Comprehensive Environmental Response, Compensation, and Liability Act, may require the investigation and cleanup of an entity’s or its predecessor’s current or former properties, even if the associated contamination was caused by the operations of a third party. These laws also may require the investigation and cleanup of third-party sites at which an entity or its predecessor sent hazardous wastes for disposal, notwithstanding that the original disposal activity accorded with all applicable requirements. Liability under such laws may be imposed jointly and severally, and regardless of fault.
      Georgia-Pacific Corporation has agreed to indemnify the Company against any claim arising from environmental conditions that existed prior to May 7, 2004. In addition, the Company carries environmental insurance. While the Company does not expect to incur significant independent costs arising from environmental conditions, there can be no assurance that all such costs will be covered by indemnification or insurance.
      The Company also is subject to the requirements of the U.S. Department of Labor Occupational Safety and Health Administration, or OSHA. In order to maintain compliance with applicable OSHA requirements, the Company has established uniform safety and compliance procedures for its operations and implemented measures to prevent workplace injuries.
      The U.S. Department of Transportation, or DOT, regulates the Company’s operations in domestic interstate commerce. The Company is subject to safety requirements governing interstate operations prescribed by the DOT. Vehicle dimensions and driver hours of service also remain subject to both federal and state regulation.
      The Company has incurred and will continue to incur costs to comply with the requirements of environmental, health and safety and transportation laws, ordinances and regulations. The Company anticipates that these requirements will become more stringent in the future, and the Company cannot assure you that compliance costs will not be material.

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ITEM 2. PROPERTIES.
      The Company operates warehouse facilities in 64 markets. The Company owns warehouse facilities in 61 of these cities and leases the remainder. The total square footage under roof at the Company’s warehouses is approximately 10.8 million square feet. These warehouse facilities secure the Company’s new mortgage loan. In addition, the Company’s headquarters is located in Atlanta, Georgia, where it leases from a third party approximately 250,000 square feet of space.
      The following table lists each of the Company’s warehouse facilities, including their inside square footage. At all of the Company’s warehouse locations, the Company also stores materials outdoors, such as lumber, which increases its distribution and storage capacity. The Company believes that substantially all of its property and equipment is in good condition, subject to normal wear and tear, and that its facilities have sufficient capacity to meet its current and projected distribution needs.
Warehouse & Shed Under Roof Square Footage
         
City   Size (Sq. Feet)
     
Lawrenceville, GA
    710,625  
Frederick, MD
    684,000  
University Park, IL
    670,000  
Yulee, FL
    571,700  
Butner, NC
    514,300  
Bellingham, MA
    453,425  
Fort Worth, TX
    277,875  
Elkhart, IN(1)
    273,540  
Independence, KY
    266,135  
Bridgeton, MO
    236,253  
Newark, CA
    234,090  
North Kansas City, MO
    230,600  
Charlotte, NC
    202,120  
Ypsilanti, MI
    188,109  
Blasdell, NY
    181,600  
Erwin, TN
    169,800  
City of Industry, CA
    163,800  
Nashville, TN
    160,904  
Houston, TX
    157,825  
Richmond, VA
    152,474  
Maple Grove, MN
    148,000  
Albuquerque, NM
    147,000  
Midfield, AL
    147,600  
New Orleans, LA
    145,596  
Tampa, FL
    145,300  
Denver, CO
    144,040  
Tulsa, OK
    143,500  
Denville, NJ
    142,959  
Riverside, CA
    136,000  
Grand Rapids, MI
    133,600  
Beaverton, OR
    129,389  

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City   Size (Sq. Feet)
     
Baton Rouge, LA
    124,300  
Lake City, FL
    110,800  
Memphis, TN
    108,640  
Newtown, CT
    108,000  
Miami, FL
    106,113  
Pensacola, FL
    101,800  
Pearl, MS
    99,800  
San Antonio, TX
    99,220  
Talmadge, OH
    99,190  
Allentown, PA
    99,000  
Virginia Beach, VA
    93,640  
National City, CA
    95,000  
Little Rock, AR
    92,300  
Springfield, MO
    91,000  
Shreveport, LA
    87,042  
Des Moines, IA
    81,510  
Charleston, SC
    81,375  
Shelburne, VT
    81,200  
Portland, ME
    80,656  
New Stanton, PA
    80,100  
Whiteville, NC(2)
    79,200  
Yaphank, NY
    78,123  
Woodinville, WA
    77,925  
Sioux Falls, SD
    76,194  
Lubbock, TX
    71,721  
Wausau, WI
    72,850  
Harlingen, TX
    70,404  
El Paso, TX
    65,500  
St. Paul, MN
    64,080  
North Highlands, CA
    52,888  
Fargo, ND
    36,593  
Phoenix, AZ(2)
    26,884  
Boise, ID(2)
    17,650  
 
(1)  Includes approximately 142,100 square feet of leased space.
 
(2)  Leased warehouses.
ITEM 3. LEGAL PROCEEDINGS.
      On November 19, 2004, the Company received a letter from Wickes Lumber, or Wickes, asserting that approximately $16 million in payments received by the Division during the 90-day period prior to Wickes’ January 20, 2004 Chapter 11 filing were preferential payments under section 547 of the United States Bankruptcy Code. Although the ultimate outcome of this matter cannot be determined with certainty, the Company believes Wickes’ assertion to be without merit and, in any event, subject to one or more complete defenses, including, but not limited to, that the payments were made and received in the

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ordinary course of business and were in substantially contemporaneous exchange for new value given to Wickes. Accordingly, the Company has no plans to establish a reserve with respect to the asserted claim.
      The Company is, and from time to time may be, a party to routine legal proceedings incidental to the operation of its business. The outcome of any pending or threatened proceedings is not expected to have a material adverse effect on the financial condition, operating results or cash flows of the Company, based on its current understanding of the relevant facts. Legal expenses incurred related to these contingencies are generally expensed as incurred.
ITEM 4.     SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.
      On November 18, 2004, a majority of our stockholders took action by written consent to amend our articles of incorporation and bylaws. The articles of incorporation were amended as follows:
  •  increase the number of authorized $0.01 par value shares of the common stock from 25,000,000 to 100,000,000; and
 
  •  increase the number of authorized $0.01 par value shares of the preferred stock from 1,000,000 to 30,000,000.
      The articles of amendment to our articles of incorporation were filed with the Secretary of State of Delaware on December 7, 2004.
PART II
ITEM 5. MARKET FOR THE REGISTRANT’S COMMON EQUITY AND RELATED STOCKHOLDER MATTERS.
      The Company’s equity securities consist of one class of common stock. The common stock began trading on December 14, 2004, the initial public offering date. The common stock is traded on the New York Stock Exchange under the symbol BXC. The high and low sales prices quoted on the New York Stock Exchange for the fourth quarter ended January 1, 2005 were $14.70 and $13.00, respectively.
      As of March 1, 2005, there were approximately 3,900 stockholders of record.
      On March 10, 2005, the Company declared a dividend at the rate of $0.125 per share. The Company intends to continue to pay dividends on its common stock at the quarterly rate of $0.125 per share. The Company’s board of directors may, in its discretion, modify or repeal the Company’s dividend policy. Future dividends, if any, with respect to the Company’s shares of common stock will depend on, among other things, its results of operations, cash requirements, financial condition, contractual restrictions, provisions of applicable law and other factors that its board of directors may deem relevant. See Item 8. Financial Statements and Supplementary Data, Note 8. Revolving Credit Facility for additional information regarding limitations on the ability of BlueLinx Corporation to transfer funds to its parent, BlueLinx Holdings, which could impact the Company’s ability to pay dividends to its stockholders. Accordingly, the Company may not be able to continue to pay dividends at the same quarterly rate in the future, if at all.
Recent Sales of Unregistered Securities
      In March 2004, the Company issued 100 shares of its common stock to Cerberus ABP Investor LLC, or Cerberus ABP, for an aggregate purchase price of $1,000. The shares were issued in reliance on Section 4(2) of the Securities Act as the sale of the securities did not involve a public offering. The offer and sale did not involve a public offering because the shares were issued to Cerberus ABP in connection with the Company’s formation. The Company was formed by affiliates of Cerberus ABP to serve as the acquisition vehicle for the purchase of assets of the building products distribution division of Georgia-Pacific. In addition, in the purchase agreement, Cerberus ABP represented to the Company that it was an accredited investor and was acquiring shares for investment and not distribution. Appropriate legends were affixed to the share certificate issued in such transaction.

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      In May 2004, the Company issued 18,099,900 shares of its common stock to Cerberus ABP for an aggregate purchase price of $4,524,975. The shares were issued in reliance on Section 4(2) of the Securities Act as the sale of the securities did not involve a public offering. As indicated above, the Company was formed by affiliates of Cerberus ABP to serve as the acquisition vehicle for the purchase of assets of the building products distribution division of Georgia-Pacific. The issuance to Cerberus ABP was used in part to fund the price of the Company’s acquisition by Cerberus and its affiliate. In addition, Cerberus ABP represented to the Company, in the purchase agreement, that it was an accredited investor and was acquiring the shares for investment and not distribution. Appropriate legends were affixed to the share certificate issued in such transaction.
      In May 2004, the Company issued 95,000 shares of its series A preferred stock to Cerberus ABP LLC for an aggregate purchase price of $95,000,000. The shares were issued in reliance on Section 4(2) of the Securities Act as the sale of the securities did not involve a public offering. As indicated in above, the Company was formed by affiliates of Cerberus ABP to serve as the acquisition vehicle for the purchase of assets of the building products distribution division of Georgia-Pacific. The issuance to Cerberus ABP was used in part to fund the purchase price of our acquisition by Cerberus and its affiliate. In addition, Cerberus ABP represented to the Company that it was an accredited investor and was acquiring shares for investment and not distribution. Appropriate legends were affixed to the share certificate issued in such transaction. All of the Company’s issued and outstanding shares of Series A preferred stock were redeemed in fiscal 2004.
      In May 2004, the Company issued shares of its common stock in private placements to certain of its executives as follows:
  •  700,000 shares to Charles H. McElrea for an aggregate purchase price of $175,000;
 
  •  500,000 shares to George R. Judd for an aggregate purchase price of $125,000;
 
  •  300,000 shares to Steven C. Hardin for an aggregate purchase price of $75,000;
 
  •  200,000 shares to David J. Morris for an aggregate purchase price of $50,000;
 
  •  100,000 shares to James C. Herbig for an aggregate purchase price of $25,000; and
 
  •  100,000 shares to Wayne E. Wiggleton for an aggregate purchase price of $25,000.
      All of the foregoing shares were issued in reliance on Section 4(2) of the Securities Act as none of the sales of the securities involved a public offering. Each of the purchasers represented to the Company that he was an accredited investor and was acquiring the shares for investment and not distribution, and appropriate legends were affixed to the share certificates issued in each transaction.
ITEM 6. SELECTED FINANCIAL DATA.
      The Company was created on March 8, 2004 (date of inception) as a Georgia corporation named ABP Distribution Holdings Inc. On May 7, 2004, the Company and its subsidiary acquired the assets of the distribution division of Georgia Pacific, or the Division, as described below. On August 30, 2004, ABP Distribution Holdings Inc. merged into BlueLinx Holdings Inc., a Delaware corporation. The Consolidated Financial Statements include the accounts of the Company and its wholly-owned subsidiaries. All significant intercompany accounts and transactions have been eliminated.
      The financial statements of the Division reflect the accounts and results of certain operations of the business conducted by the Division. The accompanying financial statements of the Division have been prepared from Georgia-Pacific’s historical accounting records and are presented on a carve-out basis reflecting these certain assets, liabilities, and operations. The Division was an unincorporated business of Georgia-Pacific and, accordingly, Georgia-Pacific’s net investment in these operations (parent’s net investment) is presented in lieu of stockholder’s equity. All significant intradivision transactions have been eliminated. The financial statements are not necessarily indicative of the financial position, results of operations and cash flows that might have occurred had the Division been an independent entity not

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integrated into Georgia-Pacific’s other operations. Also, they may not be indicative of the actual financial position that might have otherwise resulted, or of future results of operations or financial position of the Division.
      The following table sets forth certain historical financial data of the Company. The selected financial data for the period from inception (March 8, 2004) to January 1, 2005, the period from January 4, 2004 to May 7, 2004 (the aggregate period from January 4, 2004 through January 1, 2005 referred to herein as “fiscal 2004”), the fiscal year ended January 3, 2004 (“fiscal 2003”), the fiscal year ended December 28, 2002 (“fiscal 2002”), the fiscal year ended December 29, 2001 (“fiscal 2001”) and the fiscal year ended December 30, 2000 (“fiscal 2000”) have been derived from the Company’s and the Division’s audited financial statements included elsewhere in this Annual Report on Form 10-K. The financial statements prior to May 7, 2004 are referred to as “pre-acquisition period” statements. The following information should be read in conjunction with the Company’s financial statements and “Management’s Discussion and Analysis of Financial Condition and Results of Operations.”
      The acquisition of the assets of the Division was accounted for using the purchase method of accounting, and the assets acquired and liabilities assumed were accounted for at their fair market values at the date of consummation.
                                                     
    BlueLinx   Pre-acquisition Period
         
    Period from    
    Inception   Period from    
    (March 8, 2004)   January 4,   Year Ended   Year Ended   Year Ended   Year Ended
    to January 1,   2004 to May 7,   January 3,   December 28,   December 29,   December 30,
    2005   2004   2004   2002   2001   2000
                         
    (In thousands, except per share data)
Statement of Operations Data:
                                               
 
Net sales
  $ 3,672,820     $ 1,885,334     $ 4,271,842     $ 3,734,029     $ 3,768,700     $ 4,224,935  
 
Cost of sales
    3,339,590       1,658,123       3,814,375       3,370,995       3,395,184       3,880,766  
                                     
 
Gross profit
    333,230       227,211       457,467       363,034       373,516       344,169  
Operating expenses:
                                               
 
Selling, general and administrative expenses
    248,291       139,203       346,585       295,492       298,576       301,349  
 
Depreciation and amortization
    10,132       6,175       19,476       21,757       26,747       30,393  
                                     
   
Total operating expenses
    258,423       145,378       366,061       317,249       325,323       331,742  
                                     
   
Operating income
    74,807       81,833       91,406       45,785       48,193       12,427  
Non-operating expenses (income):
                                               
 
Interest expense
    28,765                                
 
Write-off of debt issue costs
    2,871                                
 
Other expense (income), net
    (516 )     614       376       348       448       560  
                                     
 
Income before provision for income taxes
    43,687       81,219       91,030       45,437       47,745       11,867  
 
Provision for income taxes
    17,781       30,782       34,877       17,597       18,470       4,628  
                                     
 
Net income
  $ 25,906     $ 50,437     $ 56,153     $ 27,840     $ 29,275     $ 7,239  
                                     
Less: preferred stock dividends
    5,226