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EX-5.1 - EX-5.1 - BlueLinx Holdings Inc. | d30239_ex5-1.htm |
EX-8.1 - EX-8.1 - BlueLinx Holdings Inc. | d30239_ex8-1.htm |
EX-23.1 - EX-23.1 - BlueLinx Holdings Inc. | d30239_ex23-1.htm |
As filed with the Securities and Exchange Commission on
February 26, 2013
Registration No. 333-185949
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Amendment No. 1 to
Form S-1
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
UNDER
THE SECURITIES ACT OF 1933
BLUELINX HOLDINGS INC.
(Exact Name of Registrant as Specified in Its
Charter)
Delaware |
5031 |
77-0627356 |
||||||||
(State or
Other Jurisdiction of Incorporation or Organization) |
(Primary Standard Industrial Classification Number) |
(IRS Employer Identification Number) |
4300 Wildwood Parkway
Atlanta, Georgia 30339
(404) 953-7000
Atlanta, Georgia 30339
(404) 953-7000
(Address, Including Zip Code, and Telephone Number,
Including Area Code, of Registrants Principal Executive Offices)
Sara E. Epstein
General Counsel
BlueLinx Holdings Inc.
4300 Wildwood Parkway
Atlanta, Georgia 30339
(404) 953-7000
General Counsel
BlueLinx Holdings Inc.
4300 Wildwood Parkway
Atlanta, Georgia 30339
(404) 953-7000
(Name, Address, Including Zip Code, and Telephone Number,
Including Area Code, of Agent for Service)
Copies of Communications to:
David W. Ghegan, Esq.
Patrick W. Macken, Esq.
Troutman Sanders LLP
600 Peachtree Street, N.E., Suite 5200
Atlanta, Georgia 30308
(404) 885-3000
David W. Ghegan, Esq.
Patrick W. Macken, Esq.
Troutman Sanders LLP
600 Peachtree Street, N.E., Suite 5200
Atlanta, Georgia 30308
(404) 885-3000
Approximate date of
commencement of proposed sale to the public: As soon as practicable after the effective date of this Registration Statement.
If any of the securities being
registered on this Form are to be offered on a delayed or continuous basis pursuant to Rule 415 under the Securities Act of 1933, check the following
box: x
If this Form is filed to register
additional securities for an offering pursuant to Rule 462(b) under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement for the same offering: o
If this Form is a post-effective
amendment filed pursuant to Rule 462(c) under the Securities Act, check the following box and list the Securities Act registration statement number of
the earlier effective registration statement for the same offering: o
If this Form is a post-effective
amendment filed pursuant to Rule 462(d) under the Securities Act, check the following box and list the Securities Act registration statement number of
the earlier effective registration statement for the same offering: o
Indicate by check mark whether the
registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of
large accelerated filer, accelerated filer and smaller reporting company in Rule 12b-2 of the Exchange Act. (Check
one):
Large accelerated
filer o |
Accelerated filer o |
|||||
Non-accelerated
filer x (Do not check if a smaller reporting company) |
Smaller reporting company o |
CALCULATION OF REGISTRATION FEE
Title of Each Class of Securities to be Registered |
Amount to be Registered |
Proposed Maximum Offering Price per Unit |
Proposed Maximum Aggregate Offering Price |
Amount of Registration Fee |
||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Rights to
purchase common stock |
(1) |
|
| | (2) | |||||||||||||
Common stock, $0.01 par value per share, underlying the subscription rights |
22,857,142 |
$1.75 |
$ | 40,000,000 | (3) | $ | 5,456.00 | (4) | ||||||||||
Total |
$ | 40,000,000 | $ | 5,456.00 |
(1) |
Evidencing the right to subscribe for 22,857,142 shares of common stock, par value $0.01 per share. |
(2) |
The subscription rights are being issued without consideration. Pursuant to Rule 457(g), no separate registration fee is payable with respect to the subscription rights being offered hereby since the subscription rights are being registered in the same registration statement as the securities to be offered pursuant thereto. |
(3) |
Represents the aggregate gross proceeds from the exercise of the maximum number of rights that may be issued. |
(4) |
Registration fee calculated pursuant to Rule 457(o). Previously paid. |
The Registrant
hereby amends this Registration Statement on such date or dates as may be necessary to delay its effective date until the Registrant shall file a
further amendment which specifically states that this Registration Statement shall thereafter become effective in accordance with Section 8(a) of the
Securities Act of 1933 or until the Registration Statement shall become effective on such date as the Commission, acting pursuant to said Section 8(a),
may determine.
The information in this preliminary prospectus is not complete
and may be changed. We may not sell these securities until the registration statement filed with the Securities and Exchange Commission is
effective. This preliminary prospectus is not an offer to sell these securities and is not soliciting an offer to buy these securities in any state or
jurisdiction where the offer or sale is not permitted.
SUBJECT TO COMPLETION, DATED FEBRUARY 26,
2013
PRELIMINARY PROSPECTUS
UP TO 22,857,142 SHARES
OF COMMON STOCK ISSUABLE UPON THE EXERCISE
OF SUBSCRIPTION RIGHTS AT $1.75 PER SHARE
OF COMMON STOCK ISSUABLE UPON THE EXERCISE
OF SUBSCRIPTION RIGHTS AT $1.75 PER SHARE
We are distributing, at no charge to
our stockholders, non-transferable subscription rights to purchase up to an aggregate of 22,857,142 shares of common stock at a price of
$1.75 per whole share. We refer to this offering as the rights offering. We are offering to each of our stockholders one
subscription right for each full common share owned by that stockholder as of the close of business on March 4, 2013, the record date. Each
subscription right will entitle its holder to purchase 0.35845026 of a share of our common stock, provided that no fractional shares will be
issued in the rights offering and exercises therefore will be rounded down. Additionally, stockholders may over-subscribe for additional shares of
common stock to the extent that the offered subscription rights are not exercised, although we cannot assure you that we will fill any
over-subscriptions.
Cerberus ABP Investor LLC
(Cerberus), our majority stockholder, which beneficially owned approximately 52% of our outstanding shares of common stock as of the
record date, has indicated that it intends to exercise all of the rights issued to it under the pro rata basic subscription right and to
subscribe for the maximum additional shares pursuant to the over-subscription privilege that it would be entitled to purchase. However, such indication
is not binding, and Cerberus is not legally obligated to do so. Assuming no other holders exercise their rights in this offering, and that Cerberus
exercises its basic and over-subscription privileges in full as indicated, after giving effect to this offering, Cerberus would own approximately
65% of our outstanding common stock. The purchase of any shares by Cerberus upon its participation in the rights offering would be effected
in a transaction exempt from the registration requirements of the Securities Act of 1933, as amended (the Securities Act),
and, accordingly, would not be registered pursuant to the registration statement of which this prospectus forms a part.
To the extent you properly exercise
your over-subscription privilege for an amount of shares of common stock that exceeds the number of the unsubscribed shares available to you, the
subscription agent will return to you any excess subscription payments, without interest or penalty, as soon as practicable following the expiration of
the rights offering. We are not requiring a minimum individual or overall subscription to complete the rights offering. We have engaged Registrar and
Transfer Company to serve as the subscription agent and Eagle Rock Proxy Advisors, LLC as information agent for the rights offering. The subscription
agent will hold in escrow the funds we receive from subscribers until we complete or cancel the rights offering.
The subscription rights will expire if
they are not exercised by 5:00 p.m., New York City time, on March 27, 2013, but we may extend the rights offering period. We may cancel
the rights offering for any reason at any time before it expires. If we cancel the rights offering, the subscription agent will return all subscription
payments received, without interest or penalty, as soon as practicable.
You should carefully consider
whether to exercise your subscription rights before the rights offering expires. All exercises of subscription rights are irrevocable. The purchase of
shares of common stock involves a high degree of risk.
You should read Risk
Factors beginning on page 7. Our board of directors is making no recommendation regarding your exercise of the subscription
rights.
The subscription rights are
non-transferable. The shares of common stock to be issued upon exercise of the subscription rights will be listed for trading on the New York Stock
Exchange under the symbol BXC. The last reported sales price of our common stock on February 25, 2013 was $2.85 per
share.
This is not an underwritten offering.
The shares of common stock are being offered directly by us without the services of an underwriter or selling agent.
Per Share |
Total |
|||||||||
---|---|---|---|---|---|---|---|---|---|---|
Subscription
Price |
$1.75 |
$40,000,000 |
||||||||
Estimated
Expenses |
$0.05 |
$1,200,000 |
||||||||
Proceeds to
Us |
$1.70 |
$38,800,000 |
Neither the Securities and Exchange
Commission nor any state securities regulator has approved or disapproved of these securities or determined if this prospectus is accurate or complete.
Any representation to the contrary is a criminal offense.
The date of this prospectus is , 2013.
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You should rely only on the information
contained or incorporated by reference in this prospectus. We have not authorized any other person to provide you with different information. If anyone
provides you with different or inconsistent information, you should not rely on it. We are not making an offer to sell these securities in any
jurisdiction where the offer or sale is not permitted. You should assume that the information appearing in this prospectus is accurate only as of the
date on the front cover of this prospectus regardless of the time of delivery of this prospectus or the time of any exercise of the subscription
rights. Our business, financial condition, results of operations and prospects may have changed since the date of this prospectus.
In this prospectus, we rely on and
refer to information and statistics regarding our industry. We obtained this market data from independent publications or other publicly available
information that we believe are reliable.
No action is being taken in any
jurisdiction outside the United States to permit a public offering of our securities or possession or distribution of this prospectus in that
jurisdiction. Persons who come into possession of this prospectus in jurisdictions outside the United States are required to inform themselves about
and to observe any restrictions as to this offering and the distribution of this prospectus applicable to those jurisdictions.
Unless the context indicates otherwise,
all references in this prospectus to the Company, BlueLinx, we, us and our refer to
BlueLinx Holdings Inc. and our wholly owned subsidiary, BlueLinx Corporation, except that in the discussion of our subscription rights and capital
stock and related matters, these terms refer solely to BlueLinx Holdings Inc. and not to its subsidiary.
Certain statements contained in, or
incorporated by reference into, this prospectus are forward-looking statements within the meaning of Section 27A of the Securities
Act and Section 21E of the Securities Exchange Act of 1934, as amended. These 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 anticipate,
believe, could, expect, estimate, intend, may, project,
plan, should, 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. 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
i
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, especially as a result of conditions in the residential housing market; |
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the acceptance by our customers of our privately branded products; |
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inventory levels of new and existing homes for sale; |
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general economic and business conditions in the United States; |
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the financial condition and credit worthiness of our customers; |
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the activities of competitors; |
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changes in significant operating expenses; |
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fuel costs; |
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risk of losses associated with accidents; |
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exposure to product liability claims; |
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changes in the availability of capital and interest rates; |
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immigration patterns and job and household formation; |
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our ability to identify acquisition opportunities and effectively and cost-efficiently integrate acquisitions; |
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adverse weather patterns or conditions; |
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acts of war or terrorist activities; |
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variations in the performance of the financial markets, including the credit markets; |
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failure to close the rights offering on the terms discussed herein; and |
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the risk factors described herein under Risk Factors and the risk factors discussed from time to time in our periodic reports filed with the SEC, including our Annual Report on Form 10-K for the year ended December 29, 2012. |
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.
ii
The following are examples of what
we anticipate will be common questions about the rights offering. The answers are based on selected information included elsewhere in this prospectus.
The following questions and answers do not contain all of the information that may be important to you and may not address all of the questions that
you may have about the rights offering. This prospectus contains more detailed descriptions of the terms and conditions of the rights offering and
provides additional information about us and our business, including potential risks related to the rights offering, shares of our common stock and our
business.
What is the rights offering?
We are distributing, at no charge, to
holders of our shares of common stock, non-transferable subscription rights to purchase shares of our common stock. We are offering to each of our
stockholders one subscription right for each full common share owned by that stockholder as of the close of business on March 4, 2013, the
record date. Each subscription right will entitle its holder to purchase 0.35845026 of a share of our common stock. Each subscription right
entitles the holder to a basic subscription right and an over-subscription privilege, as described below. The shares of common stock to be issued upon
exercise of the subscription rights will be listed for trading on the New York Stock Exchange under the symbol BXC.
What is the basic subscription right?
The basic subscription right gives our
stockholders the opportunity to purchase 22,857,142 shares of common stock at a subscription price of $1.75 per whole share. We have
granted to you, as a stockholder of record on the record date, one subscription right for every share of our common stock you owned at that time.
Fractional shares or cash in lieu of fractional shares will not be issued in the rights offering. Instead, fractional shares resulting from the
exercise of the basic subscription right will be eliminated by rounding down to the nearest whole share.
We determined the ratio of rights
required to purchase one share by dividing $40,000,000 by the subscription price of $1.75 to determine the number of shares to be issued in the
rights offering and then dividing the number of shares to be issued in the rights offering by the number of shares of our common stock outstanding on
the record date. Accordingly, each subscription right allows the holder thereof to subscribe for 0.35845026 of a share of common stock at the
cash price of $1.75 per whole share. As an example, if you owned 1,000 shares of our common stock on the record date, you would receive 1,000
subscription rights pursuant to your basic subscription right that would entitle you to purchase 358 shares of common stock (358.45026
rounded down to the nearest whole share) at a subscription price of $1.75 per whole share.
You may exercise all or a portion of
your basic subscription right or you may choose not to exercise any subscription rights at all. However, if you exercise less than your full basic
subscription right, you will not be entitled to purchase shares of common stock under your over-subscription privilege.
If you hold a BlueLinx stock
certificate, the number of shares of common stock you may purchase pursuant to your basic subscription right is indicated on the enclosed rights
certificate. If you hold your shares in the name of a broker, dealer, custodian bank or other nominee who uses the services of the Depository Trust
Company (DTC), you will not receive a rights certificate. Instead, DTC will issue one subscription right to your nominee record holder for
every share of our common stock that you own at the record date. If you are not contacted by your nominee, you should contact your nominee as soon as
possible.
What is the over-subscription privilege?
If you purchase all of the shares of
common stock available to you pursuant to your basic subscription right, you may also choose to purchase a portion of any shares of common stock that
our other stockholders do not purchase through the exercise of their basic subscription rights. You should indicate on your rights certificate, or the
form provided by your nominee if your shares are held in the name of a nominee, how many additional shares of common stock you would like to purchase
pursuant to your over-subscription privilege.
If sufficient shares of common stock
are available, we will seek to honor your over-subscription request in full. If over-subscription requests exceed the number of shares available,
however, we will allocate the
iii
available shares pro rata among the stockholders exercising the over-subscription privilege in proportion to the number of shares of our common stock each of those stockholders owned on the record date, relative to the number of shares owned on the record date by all stockholders exercising the over-subscription privilege. If this pro rata allocation results in any stockholder receiving a greater number of shares of common stock than the stockholder subscribed for pursuant to the exercise of the over-subscription privilege, then such stockholder will be allocated only that number of shares for which the stockholder over-subscribed, and the remaining shares will be allocated among all other stockholders exercising the over-subscription privilege on the same pro rata basis described above. The proration process will be repeated until all shares of common stock have been allocated.
To properly exercise your
over-subscription privilege, you must deliver the subscription payment related to your over-subscription privilege before the rights offering expires.
Because we will not know the total number of unsubscribed shares of common stock before the rights offering expires, if you wish to maximize the number
of shares you purchase pursuant to your over-subscription privilege, you will need to deliver payment in an amount equal to the aggregate subscription
price for the maximum number of shares that may be available to you (i.e., the aggregate payment for both your basic subscription right and for any
additional shares you desire to purchase pursuant to your over-subscription request). See The Rights Offering The Subscription Rights
Over-subscription Privilege. Any excess subscription payments received by the subscription agent will be returned, without interest or
penalty, as soon as practicable.
Fractional shares of common stock
resulting from the exercise of the over-subscription privilege will be eliminated by rounding down to the nearest whole share. Registrar and Transfer
Company, our subscription agent for the rights offering, will determine the over-subscription allocation based on the formula described
above.
Why are we conducting the rights
offering?
As the housing market and general
economic conditions continue to improve, the additional capital raised in the rights offering would allow us to participate more fully in these
improving conditions. After assessing current alternatives in both the debt and equity markets and the impact additional leverage may have on the
Company, we determined that an equity offering would be preferable to incurring additional debt. Further, we believe raising capital through this
rights offering as compared to other methods, such as an underwritten public offering of our common stock, has the advantage of providing our
stockholders the opportunity to participate in this transaction on a pro rata basis and, if all stockholders exercise their rights, avoid
dilution of their ownership interest in the Company.
Our sales depend heavily on the
strength of national and local new residential construction and home improvement and remodeling markets, which are showing signs of significant
improvement. Moreover, the governments legislative and administrative measures aimed at restoring liquidity to the credit markets and providing
relief to homeowners facing foreclosure are beginning to show positive results. The overall housing market and economy are also improving, which is
expected to lead to a considerable increase in residential construction and, to a lesser extent, in home improvement activity.
Our results of operations were severely
affected by the recent historic downturn in the housing market, with our net sales decreasing from approximately $4.9 billion for our fiscal year ended
December 30, 2006 to approximately $1.9 billion for the fiscal year ended December 29, 2012. As a result of the weakened demand
environment in the housing market, we implemented a number of initiatives over the past few years to control costs, decrease our operating expenses and
improve profit margins by focusing on higher margin specialty products. These initiatives, combined with overall improvements in the housing market in
2012, are beginning to yield more favorable results. Although we have seen a significant decrease in net income from $15.8 million for the fiscal year
ended December 30, 2006 to a net loss of approximately $38.6 million for the fiscal year ended December 31, 2011, our net loss has narrowed to
approximately $23.0 million for the fiscal year ended December 29, 2012.
We depend on cash flow from operations
and funds available under our revolving credit facilities to finance working capital needs and capital expenditures. For additional information
regarding our financial covenants under our revolving credit facilities, see The instruments governing our indebtedness contain various
covenants limiting the discretion of our management in operating our business in the Risk Factors section of this prospectus. If we and our
industry continue to recover from the historic housing market
iv
downturn, we expect our sales to improve and therefore our need for inventory and our accounts receivable to increase. This increase in working capital is expected to use some of our current excess availability under our revolving credit facilities. While we believe that the amounts available from our revolving credit facilities and other sources will be sufficient to fund our routine operations and capital requirements for at least the next 12 months, we are conducting this rights offering to provide us with a stronger liquidity position and allow us to more fully participate in the improving housing market. We believe that this stronger liquidity position will also give us an advantage over many of our competitors that have less liquidity and less or no access to additional capital, and therefore may not be able to fully participate in the opportunities that arise in a growing market. Assuming we sell the full amount of shares of common stock issuable in connection with the rights offering, we expect to receive net proceeds from the rights offering of approximately $38.8 million, after paying associated expenses.
The net proceeds of the rights offering
will be used to reduce the outstanding balance of our U.S. revolving credit facility. As of December 29, 2012, debt outstanding under our revolving
credit facilities was $171.4 million and excess availability under these facilities was $88.0 million. After giving effect to the rights
offering and the application of the estimated net proceeds therefrom, debt outstanding under our revolving credit facilities as of December 29, 2012
would have been approximately $132.6 million and excess availability would have been approximately $126.8 million. We also intend to
amend and extend our U.S. revolving credit facility. See Summary Recent Developments. Substantially all of our remaining
indebtedness of $206.0 million as of December 29, 2012 consists of mortgage indebtedness which is our obligation, but not an obligation of our
operating subsidiary; the operating subsidiary is the counterparty to substantially all of our trade payables and other ordinary course liabilities. In
addition, such mortgage indebtedness is secured by real property owned by us which we believe has a current fair market value in excess of the related
mortgage debt.
How was the $1.75 per share subscription price
determined?
We engaged Moelis & Company LLC
(Moelis) to act as our financial advisor in connection with the evaluation of capital raising alternatives, including the rights offering,
and to provide, among other things, advice with respect to the structure and terms of the rights offering. Our board of directors delegated full
authority with respect to the pricing and other terms of the rights offering to the members of our board of directors (the Committee) who
are not affiliated with, and do not have a financial interest in, Cerberus, Cerberus Capital Management, L.P. and its affiliated management companies
(collectively, Cerberus Capital Management). Cerberus Capital Management controls Cerberus, the entity that owns approximately 52%
of our outstanding common stock. In evaluating the subscription price, the Committee considered, among other things, (i) the current and historical
trading prices of our common stock, (ii) the price at which stockholders might be willing to participate in the rights offering, (iii) the likely cost
of capital from other sources and our ability to access such capital, and (iv) comparable precedent transactions. After several meetings of the board
of directors at which various strategic alternatives, including the rights offering, were discussed, the Committee approved the subscription price and
the other terms of the rights offering. The Committee met on several occasions separately with the Companys legal and financial advisors without
the members of our board of directors who are affiliated with, or that have a financial interest in, Cerberus Capital Management present to discuss
potential pricing.
The $1.75 subscription price is
not intended to bear any relationship to the market value of our common stock, book value of our assets or our past operations, cash flows, losses,
financial condition, net worth, or any other established criteria used to value securities. You should not consider the subscription price to be an
indication of the fair value of the common stock to be offered in the rights offering.
Am I required to exercise all of the subscription rights I
receive in the rights offering?
No. You may exercise any number of your
subscription rights or you may choose not to exercise any subscription rights.
If you do not exercise any subscription
rights, the number of shares of our common stock you own will not change. However, if you choose not to exercise your subscription rights, your
ownership interest in BlueLinx will be diluted by other stockholder purchases. In addition, if you do not exercise your basic subscription right in
full, you will not be entitled to participate in the over-subscription privilege. See Risk Factors If you do not exercise your
subscription rights, your percentage ownership in BlueLinx will be diluted.
v
How soon must I act to exercise my subscription
rights?
If you received a rights certificate
and elect to exercise any or all of your subscription rights, the subscription agent must receive your completed and signed rights certificate and
payments before the rights offering expires on March 27, 2013, at 5:00 p.m., New York City time. If you hold your shares in the name of a
broker, dealer, custodian bank or other nominee, your nominee may establish a deadline before the expiration of the rights offering by which you must
provide it with your instructions to exercise your subscription rights. Although the Committee may, in its discretion, extend the expiration date of
the rights offering, we currently do not intend to do so. We may cancel the rights offering at any time. If the rights offering is cancelled, all
subscription payments received will be returned, without interest or penalty, as soon as practicable.
Although we will make reasonable
attempts to provide this prospectus to our stockholders, the rights offering and all subscription rights will expire on the expiration date, whether or
not we have been able to locate each person entitled to subscription rights.
May I transfer my subscription rights?
No. The subscription rights are
non-transferable and will not be listed for trading on the New York Stock Exchange or any other stock exchange or market.
Are we requiring a minimum overall subscription to complete
the rights offering?
No. We are not requiring an overall
minimum subscription to complete the rights offering. However, the Committee reserves the right to cancel the rights offering for any reason, including
if we do not receive aggregate subscriptions that we believe will satisfy our capital plans.
Are there any conditions to completing the rights
offering?
No. There are no conditions to our
closing the rights offering and issuing shares of our common stock subscribed for in the rights offering.
Can the rights offering be extended or
cancelled?
Yes. The Committee may decide to cancel
the rights offering at any time and for any reason before the rights offering expires. If the Committee cancels the rights offering, any money received
from subscribing stockholders will be returned, without interest or penalty, as soon as practicable. We also have the right to extend the rights
offering period although we do not presently intend to do so.
Has our board of directors made a recommendation to our
stockholders regarding the rights offering?
No. Our board of directors is making no
recommendation regarding your exercise of the subscription rights. Stockholders who exercise subscription rights will incur investment risk on new
money invested. We cannot predict the price at which our shares of common stock will trade after the offering. The market price for our common stock
may decrease to an amount below the subscription price, and if you purchase shares of common stock at the subscription price, you may not be able to
sell the shares in the future at the same price or a higher price. You should make your decision based on your assessment of our business and financial
condition, our prospects for the future, the terms of the rights offering and the information contained in, or incorporated by reference into, this
prospectus. See Risk Factors for a discussion of some of the risks involved in investing in our common stock.
Cerberus beneficially owned
approximately 52% of our outstanding shares of common stock as of the record date. Cerberus is controlled by Cerberus Capital Management. Three
of our seven directors are employees of or current advisors of Cerberus Capital Management. You should not view the intentions of Cerberus as a
recommendation or other indication, by them or any member of our board of directors, regarding whether the exercise of the subscription rights is or is
not in your best interests.
Have any stockholders indicated that they will exercise their
rights?
Yes. Cerberus, our majority
stockholder, which beneficially owned approximately 52% of our outstanding shares of common stock as of the record date, has indicated that it
intends to exercise all of the rights issued to it under the pro rata basic subscription right and to subscribe for the maximum additional
shares pursuant
vi
to the over-subscription privilege that it would be entitled to purchase. However, such indication is not binding, and Cerberus is not legally obligated to do so. The purchase of any shares by Cerberus upon its participation in the rights offering would be effected in a transaction exempt from the registration requirements of the Securities Act and, accordingly, would not be registered pursuant to the registration statement of which this prospectus forms a part. Any shares acquired by Cerberus pursuant to its participation in the rights offering would become subject to our existing registration rights agreement with Cerberus. Any pro rata shares purchased by Cerberus upon the exercise of its basic subscription right will be included when determining the number of shares purchased in the basic subscription right of the rights offering. Assuming no other holders exercise their rights in this offering, and that Cerberus exercises its basic and over-subscription privileges in full as indicated, after giving effect to this offering, Cerberus would own approximately 65% of our outstanding common stock. Except as a result of any increase in its ownership of common stock, Cerberus will not obtain any additional governance or control rights as a result of the rights offering. Three of our seven directors are employees of or current advisors of Cerberus Capital Management.
How do I exercise my subscription rights if I own shares in
certificate form?
If you hold a BlueLinx stock
certificate and you wish to participate in the rights offering, you must take the following steps:
|
deliver payment to the subscription agent before 5:00 p.m., New York City time, on March 27, 2013; and |
|
deliver a properly completed and signed rights certificate to the subscription agent before 5:00 p.m., New York City time, on March 27, 2013. |
In certain cases, you may be required
to provide additional documentation or signature guarantees.
Please follow the delivery instructions
on the rights certificate. Do not deliver documents to BlueLinx. You are solely responsible for completing delivery to the subscription agent of your
subscription documents, rights certificate and payment. You should allow sufficient time for delivery of your subscription materials to the
subscription agent so that the subscription agent receives them by 5:00 p.m., New York City time, on March 27, 2013.
If you send a payment that is
insufficient to purchase the number of shares of common stock you requested, or if the number of shares you requested is not specified in the forms,
the payment received will be applied to exercise your subscription rights to the fullest extent possible based on the amount of the payment received,
subject to the availability of shares of common stock under the over-subscription privilege and the elimination of fractional shares.
What should I do if I want to participate in the rights
offering but my shares are held in the name of a broker, dealer, custodian bank or other nominee?
If you hold your shares of common stock
through a broker, dealer, custodian bank or other nominee, then your nominee is the record holder of the shares you own. The record holder must
exercise the subscription rights on your behalf. If you wish to purchase our common stock through the rights offering, you should contact your broker,
dealer, custodian bank or nominee as soon as possible. Please follow the instructions of your nominee. Your nominee may establish a deadline that may
be before the expiration date of the rights offering.
What form of payment must I use to pay the subscription
price?
You must timely pay the full
subscription price for the full number of shares of common stock you wish to acquire in the rights offering by delivering to the subscription agent an
uncertified personal check or wire transfer of immediately available funds that clears before the expiration of the rights offering period. If you wish
to use any other form of payment, then you must obtain the prior approval of the subscription agent and make arrangements in advance with the
subscription agent for the delivery of such payment.
When will I receive my new shares?
If you purchase shares of common stock
in the rights offering, you will receive your new shares as soon as practicable after the closing of the rights offering.
vii
After I send in my payment and rights certificate, may I
cancel my exercise of subscription rights?
No. All exercises of subscription
rights are irrevocable unless the rights offering is cancelled, even if you later learn information that you consider to be unfavorable to the exercise
of your subscription rights. You should not exercise your subscription rights unless you are certain that you wish to purchase shares in the rights
offering.
What effects will the rights offering have on our outstanding
common stock?
As of the record date,
63,766,566 shares of our common stock were issued and outstanding. If all of the subscription rights are exercised in full by our stockholders,
we expect to issue an additional 22,857,142 shares of our common stock after the closing of the rights offering, for a total of
86,623,708 shares of common stock issued and outstanding. This assumes that, during the rights offering, we issue no other shares of our common
stock and that no options for our common stock are exercised.
The issuance of shares in the rights
offering will dilute, and thereby reduce, your proportionate ownership in our shares of common stock if you do not exercise your basic subscription
right. In addition, if the subscription price of the shares is less than the market price of our common stock it will likely reduce the market price
per share of shares you already hold.
How much capital will BlueLinx receive from the rights
offering?
If all of the subscription rights
(including all over-subscription privileges) are exercised in full by our stockholders, we estimate that the net proceeds to us from the rights
offering, after deducting estimated offering expenses, will be approximately $38.8 million. It is possible that BlueLinx will elect to cancel the
rights offering altogether.
Are there risks in exercising my subscription
rights?
Yes. Exercising your subscription
rights involves the purchase of shares of our common stock. You should consider this investment as carefully as you would consider any other equity
investment. Among other things, you should carefully consider the risks described under the heading Risk Factors in this prospectus and in
the documents incorporated by reference in this prospectus.
If the rights offering is not completed, will my subscription
payment be refunded to me?
Yes. The subscription agent will hold
all funds it receives in a segregated bank account until completion of the rights offering. If the rights offering is not completed, all subscription
payments received by the subscription agent will be returned, without interest or penalty, as soon as practicable. If you own shares in street
name, it may take longer for you to receive your subscription payment because the subscription agent will return payments through the record
holder of your shares.
What fees or charges apply directly to me if I purchase shares
of common stock in the rights offering?
We are not charging any fee or sales
commission to issue subscription rights to you or to issue shares to you if you exercise your subscription rights. If you exercise your subscription
rights through your broker, dealer, custodian bank or other nominee, you are responsible for paying any fees your intermediary may charge
you.
What are the material U.S. federal income tax consequences of
exercising my subscription rights?
For U.S. federal income tax purposes,
you will not recognize income or loss in connection with the receipt or exercise of subscription rights in the rights offering. You should consult your
tax advisor as to your particular tax consequences resulting from the rights offering. For a detailed discussion, see Material U.S. Federal
Income Tax Consequences.
viii
To whom should I send my forms and
payment?
If your shares are held in the name of
a broker, dealer or other nominee, then you should send your subscription documents, rights certificate and subscription payment to that record holder.
If you are the record holder, then you should send your subscription documents, rights certificate and subscription payment by hand delivery, first
class mail or courier service to:
By
mail: |
By hand or overnight courier: |
|||||
Registrar
and Transfer Company Attn: Reorg/Exchange Dept P.O. Box 645 Cranford, New Jersey 07016-0645 |
Registrar and Transfer Company Attn: Reorg/Exchange Dept 10 Commerce Drive Cranford, New Jersey 07016 |
You are solely responsible for
completing delivery to the subscription agent of your subscription documents, rights certificate and payment. You should allow sufficient time for
delivery of your subscription materials to the subscription agent.
Whom should I contact if I have other
questions?
If you have more questions about the
rights offering or need additional copies of the rights offering documents, please contact Eagle Rock Proxy Advisors, LLC, by calling (855) 612-6975
toll-free.
ix
The following summary contains basic
information about us and the rights offering. Because it is a summary, it may not contain all of the information that is important to you. Before
making a decision to invest in our common stock, you should read this prospectus carefully, including the sections entitled The Rights
Offering and Risk Factors, and the information incorporated by reference in this prospectus, including our audited
consolidated financial statements and the accompanying notes included in our Annual Report on Form 10-K for the year ended December 29,
2012.
Our Company
BlueLinx Holdings Inc., operating
through our wholly-owned subsidiary, BlueLinx Corporation, is a leading distributor of building products in the United States. We operate in all of the
major metropolitan areas in the United States and, as of December 29, 2012, we distributed approximately 10,000 products from over 750 suppliers
to service more than 11,500 customers nationwide, including dealers, industrial manufacturers, manufactured housing producers and home improvement
retailers. We operate our distribution business from sales centers in Atlanta and Denver, and our network of approximately 55 distribution centers. We
distribute products through our owned and leased fleet of over 500 tractors and over 900 trailers, as well as by common
carrier.
We distribute products in two principal
categories: structural products and specialty products. Structural products, which represented approximately 42%, 39% and 46% of our
fiscal 2012, fiscal 2011 and fiscal 2010 gross sales, respectively, include plywood, oriented strand board (OSB),
rebar and remesh, lumber and other wood products primarily used for structural support, walls and flooring in construction projects. Specialty
products, which represented approximately 58%, 61% and 54% of our fiscal 2012, fiscal 2011 and fiscal 2010 gross
sales, respectively, include roofing, insulation, specialty panels, moulding, engineered wood products, vinyl products (used primarily in siding),
outdoor living and metal products (excluding rebar and remesh).
Recent Developments
Fourth Quarter Operating
Results. Our operating results for the fourth quarter and year ended December 29, 2012 reflect continued improvement in the housing market
and economic conditions in general coupled with improved profit margins driven by our efforts to improve gross margin through pricing
discipline. For the fourth quarter ended December 29, 2012, we reported a fourth quarter net loss per diluted share of $0.19, compared to
$0.17 per diluted share for the fourth quarter of fiscal 2011. Revenue reported for the fourth quarter was $440.3 million, an increase of 12.6%
from $391.1 million for the fourth quarter of fiscal 2011. Gross profit margin for the fourth quarter was 11.8%, compared with 12.3% for the
fourth quarter of fiscal 2011. Net loss included pre-tax net gains of $0.2 million, or $0.00 per diluted share, and $3.9 million, or
$0.07 per diluted share, from significant special items in the fourth quarter of 2012 and 2011, respectively.
Full Year Operating Results.
For the fiscal year ended December 29, 2012, we reported a net loss per diluted share of $0.38, compared to the net loss of $0.89 per diluted
share in fiscal 2011. Revenues were $1.908 billion for the fiscal year ended December 29, 2012, an increase of 8.7% from revenues of $1.755
billion for the year ended December 31, 2011. Gross profit margin for fiscal 2012 was 12.1%, compared to 12.0% in fiscal 2011. Net loss
included pre-tax net gains of $10.4 million, or $0.17 per diluted share, and $12.6 million, or $0.29 per diluted share, from significant special
items in fiscal 2012 and fiscal 2011, respectively.
U.S. Revolving Credit
Facility. We intend to amend and extend our $400 million U.S. revolving credit facility. The amendment will extend the maturity by three
years from the closing date. It is expected that the maximum available credit under the U.S. revolving credit facility will be increased by
$22.5 million to $422.5 million. The amended U.S. revolving credit facility is also expected to continue to have a $100 million
uncommitted accordion credit facility to potentially increase the maximum available credit to $522.5 million. The amended U.S. revolving
credit facility is expected to have covenants substantially similar to those in the existing U.S. revolving credit facility. We have engaged
Wells Fargo Capital Finance (Wells Fargo) as sole lead arranger for the transaction. Wells Fargo has informed us that it has
received commitments from several financial institutions with respect to the U.S. revolving credit facility, subject to execution of
satisfactory documentation and the completion of the $40 million rights offering. Closing is expected to occur
1
concurrently with the completion of the rights offering. The definitive terms of, and the obligations of BlueLinx, Wells Fargo, and/or any members of the syndicate of financial institutions to enter into such an amendment to the U.S. revolving credit facility is subject to additional discussions and negotiations among the parties, and there is no assurance that an amendment to the existing U.S. revolving credit facility will be consummated.
Corporate Information
Our principal executive office is
located at 4300 Wildwood Parkway, Atlanta, Georgia 30339. Our telephone number is (770) 953-7000. Information on BlueLinx is available on our internet
website www.bluelinxco.com. The information contained on our websites or that can be accessed through our websites does not constitute part of
this prospectus and is not incorporated in any manner into this prospectus.
Our common stock trades on the New York
Stock Exchange under the ticker symbol BXC.
The Rights Offering
The following summary describes the
principal terms of the rights offering, but it is not intended to be a complete description of the offering. See the information under the heading
The Rights Offering in this prospectus for a more detailed description of the terms and conditions of the rights offering.
Securities
Offered |
We
are distributing to you, at no charge, one non-transferable subscription right for each share of our common stock that you owned as of 5:00 p.m., New
York City time, on March 4, 2013, the record date, either as a holder of record or, in the case of shares held of record by brokers, dealers,
custodian banks or other nominees on your behalf, as a beneficial owner of those shares. Each subscription right will entitle its holder to purchase
0.35845026 of a share of our common stock. The shares of common stock will be represented by a certificate. If all of the subscription rights
are exercised in full by our stockholders, we expect the gross proceeds from the rights offering will be $40 million. |
|||||
Basic
Subscription Right |
The
basic subscription right will entitle you to purchase 0.35845026 of a share of common stock at a subscription price of $1.75 per whole
share and fractional shares resulting from the exercise of the basic subscription right will be eliminated by rounding down to the nearest whole
share. |
|||||
Over-subscription
Privilege |
If
you purchase all of the shares of common stock available to you pursuant to your basic subscription right, you may also choose to subscribe for a
portion of any shares of common stock that are not purchased by our stockholders through the exercise of their basic subscription
rights. |
|||||
Subscription
Price |
$1.75 per share, payable in cash. To be effective, any payment related to the exercise of a subscription right must clear before the
rights offering expires. |
|||||
Record Date
|
5:00
p.m., New York City time, on March 4, 2013. |
|||||
Expiration of the
Rights Offering |
5:00
p.m., New York City time, on March 27, 2013, unless we extend the rights offering period. |
|||||
Use of Proceeds
|
We
intend to use the proceeds of the rights offering to repay debt under our U.S. revolving credit facility. See Use of
Proceeds. |
2
Transferability
of Rights |
Your
subscription rights will be non-transferable. |
|||||
No Revocation
|
All
exercises of subscription rights are irrevocable, even if you later learn of information that you consider to be unfavorable to the exercise of your
subscription rights. You should not exercise your subscription rights unless you are certain that you wish to purchase shares of common stock at a
subscription price of $1.75 per share. |
|||||
Material U.S.
Federal Income Tax Consequences |
For
U.S. federal income tax purposes, you will not recognize income or loss upon receipt or exercise of a subscription right. You should consult your own
tax advisor as to the tax consequences to you of the receipt, exercise or lapse of the subscription rights in light of your particular circumstances.
See Material U.S. Federal Income Tax Consequences. |
|||||
Extension and
Cancellation |
Although we do not presently intend to do so, we have the option to extend the rights offering period. The Committee may for any reason
cancel the rights offering at any time before the expiration date. If we cancel the rights offering, the subscription agent will return all
subscription payments, without interest or penalty, as soon as practicable. |
|||||
Procedures for
Exercising Rights |
To
exercise your subscription rights, you must take the following steps: |
|||||
If you are a registered holder of our common stock, you must deliver payment and a properly completed rights certificate to
the subscription agent to be received before 5:00 p.m., New York City time, on March 27, 2013. You may deliver the documents and payments by
hand delivery, first class mail or courier service. If you use first class mail for this purpose, we recommend using registered mail, properly insured,
with return receipt requested. |
||||||
If you are a beneficial owner of shares that are registered in the name of a broker, dealer, custodian bank or other
nominee, or if you would rather an institution conduct the transaction on your behalf, you should instruct your broker, dealer, custodian bank or other
nominee to exercise your subscription rights on your behalf. Please follow the instructions of your nominee, who may require that you meet a deadline
earlier than 5:00 p.m., New York City time, on March 27, 2013. |
||||||
Reason for Rights
Offering Structure |
We
believe raising capital through this rights offering as compared to other methods, such as an underwritten public offering of our common stock, has the
advantage of providing our stockholders the opportunity to participate in this transaction on a pro rata basis and, if all stockholders exercise
their rights, avoid dilution of their ownership interest in the Company. |
3
Indications from
Certain Stockholders |
Cerberus, our majority stockholder, which beneficially owned approximately 52% of our outstanding shares of common stock as of the
record date, has indicated that it intends to exercise all of the rights issued to it under the pro rata basic subscription right and to
subscribe for the maximum additional shares pursuant to the over-subscription privilege that it would be entitled to purchase. However, such indication
is not binding, and Cerberus is not legally obligated to do so. Assuming no other holders exercise their rights in this offering, and that Cerberus
exercises its basic and over-subscription privileges in full as indicated, after giving effect to this offering, Cerberus would own approximately
65% of our outstanding common stock. The purchase of any shares by Cerberus upon its participation in the rights offering would be effected
in a transaction exempt from the registration requirements of the Securities Act and, accordingly, would not be registered pursuant to
the registration statement of which this prospectus forms a part. Any shares acquired by Cerberus pursuant to its participation in the rights
offering would become subject to our existing registration rights agreement with Cerberus. |
|||||
Subscription
Agent |
Registrar and Transfer Company. |
|||||
Information
Agent |
Eagle
Rock Proxy Advisors, LLC. |
|||||
Shares
Outstanding Before the Rights Offering |
63,766,566 shares of our common stock were outstanding as of the record date. |
|||||
Shares
Outstanding After Completion of the Rights Offering |
We expect approximately 86,623,708 shares of our common stock will be outstanding immediately after completion of the rights offering. |
|||||
Fees and
Expenses |
We
will pay the fees and expenses related to the rights offering. |
|||||
The New York
Stock Exchange |
Our
shares of common stock are currently listed for trading on the New York Stock Exchange under the ticker symbol BXC. |
|||||
No Board
Recommendation Regarding Exercise of Subscription Rights |
Our board of directors is making no recommendation regarding your exercise of the subscription rights. You are urged to make an independent investment decision about whether to exercise your rights based on your own assessment of our business and the rights offering. |
|||||
Risk
Factors |
Before you exercise your subscription rights to purchase our shares of common stock, you should carefully consider risks described in the
section entitled Risk Factors, beginning on page 7 of this prospectus. |
4
We derived certain of the summary
consolidated financial and other data presented below from our consolidated financial statements and the notes thereto for the periods indicated. The
statement of operations data for the years ended December 29, 2012, December 31, 2011 and January 1, 2011 and the balance sheet data as
of December 29, 2012, and December 31, 2011 are derived from our audited financial statements, which are incorporated by reference into this
prospectus from our Annual Report on Form 10-K filed on February 20, 2013. The statement of operations data for the years ended
January 2, 2010 and January 3, 2009, and the balance sheet data as of January 1, 2011, January 2, 2010 and January 3, 2009 are
derived from our audited financial statements that are not incorporated by reference into this prospectus. In the opinion of our management, these
amounts contain all adjustments (consisting of only normal recurring adjustments) necessary to present fairly our financial position and results of
operations for such periods in accordance with U.S. generally accepted accounting principles. This information is only a summary and should be
read in conjunction with the financial statements and notes thereto incorporated by reference into this prospectus and the sections titled
Managements Discussion and Analysis of Financial Condition and Results of Operations in our Annual Report on Form 10-K filed on
February 20, 2013.
Year Ended December 29, 2012 |
Year Ended December 31, 2011 |
Year Ended January 1, 2011 |
Year Ended January 2, 2010 |
Year Ended January 3, 2009 |
|||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Statement
of Operations Data: |
|||||||||||||||||||||||
Net sales
|
$1,907,842 | $ | 1,755,431 | $ | 1,804,418 | $ | 1,646,108 | $ | 2,779,699 | ||||||||||||||
Cost of sales
|
1,677,772 | 1,545,282 | 1,593,745 | 1,452,947 | 2,464,766 | ||||||||||||||||||
Gross profit
|
230,070 | 210,149 | 210,673 | 193,161 | 314,933 | ||||||||||||||||||
Operating
expenses: |
|||||||||||||||||||||||
Selling,
general and administrative |
215,996 | 207,857 | 221,185 | 210,214 | 303,403 | ||||||||||||||||||
Net gain from
terminating the Georgia-Pacific supply agreement |
| | | (17,772 | ) | | |||||||||||||||||
Depreciation
and amortization |
8,565 | 10,562 | 13,365 | 16,984 | 20,519 | ||||||||||||||||||
Total
operating expenses |
224,461 | 218,419 | 234,550 | 209,426 | 323,922 | ||||||||||||||||||
Operating
income (loss) |
5,509 | (8,270 | ) | (23,877 | ) | (16,265 | ) | (8,989 | ) | ||||||||||||||
Non-operating expenses (income): |
|||||||||||||||||||||||
Interest
expense |
28,157 | 30,510 | 33,788 | 32,456 | 38,547 | ||||||||||||||||||
Changes
associated with the ineffective interest rate swap, net |
| (1,676 | ) | (4,603 | ) | 6,252 | | ||||||||||||||||
Write-off of
debt issue costs |
| | 183 | 1,407 | | ||||||||||||||||||
Other expense
(income), net |
(7 | ) | 501 | 587 | 519 | 601 | |||||||||||||||||
Loss before
(benefit from) provision for income taxes |
(22,641 | ) | (37,605 | ) | (53,832 | ) | (56,899 | ) | (48,137 | ) | |||||||||||||
(Benefit
from) provision for income taxes |
386 | 962 | (589 | ) | 4,564 | (16,434 | ) | ||||||||||||||||
Net loss
|
$(23,027 | ) | $ | (38,567 | ) | $ | (53,243 | ) | $ | (61,463 | ) | $ | (31,703 | ) | |||||||||
Basic
weighted average number of common shares outstanding |
60,080 | 43,187 | 30,688 | 31,017 | 31,083 | ||||||||||||||||||
Basic net
loss per share applicable to common stock |
$(0.38 | ) | $ | (0.89 | ) | $ | (1.73 | ) | $ | (1.98 | ) | $ | (1.02 | ) | |||||||||
Diluted
weighted average number of common shares outstanding |
60,080 | 43,187 | 30,688 | 31,017 | 31,083 | ||||||||||||||||||
Diluted net
loss per share applicable to common stock |
$(0.38 | ) | $ | (0.89 | ) | $ | (1.73 | ) | $ | (1.98 | ) | $ | (1.02 | ) | |||||||||
Dividends
declared per share of common stock |
$ | $ | | $ | | $ | | $ | |
5
Year Ended December 29, 2012 |
Year Ended December 31, 2011 |
Year Ended January 1, 2011 |
Year Ended January 2, 2010 |
Year Ended January 3, 2009 | |||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Other
Financial Data: |
|||||||||||||||||||||||
Capital
expenditures |
$2,826 | $6,533 | $ | 4,140 | $ | 1,815 | $ | 4,919 | |||||||||||||||
Net cash
provided by (used in) operating activities |
$(74,250 | ) | $(50,332 | ) | $ | (29,861 | ) | $ | (19,853 | ) | $ | 190,390 | |||||||||||
Net cash
provided by (used in) investing activities |
$16,369 | $11,882 | $ | (3,429 | ) | $ | 12,636 | $ | 985 | ||||||||||||||
Net cash
provided by (used in) financing activities |
$58,171 | $ | 29,111 | $ | 18,130 | $ | (113,679 | ) | $ | (56,781 | ) | ||||||||||||
EBITDA(1)
|
$14,081 | $1,791 | $ | (11,099 | ) | $ | 200 | $ | 10,929 | ||||||||||||||
Balance
Sheet Data (at end of period): |
|||||||||||||||||||||||
Cash and cash
equivalents |
$5,188 | $ | 4,898 | $ | 14,297 | $ | 29,457 | $ | 150,353 | ||||||||||||||
Working
capital |
$272,403 | $ | 233,414 | $ | 236,168 | $ | 247,722 | $ | 320,527 | ||||||||||||||
Total assets
|
$544,736 | $ | 503,915 | $ | 525,019 | $ | 546,846 | $ | 729,178 | ||||||||||||||
Total debt(2)
|
$383,783 | $341,017 | $384,256 | $ | 341,669 | $ | 444,870 | ||||||||||||||||
Stockholders (deficit) equity |
$(20,592 | ) | $ | 8,374 | $ | 991 | $ | 50,820 | $ | 102,852 |
(1) |
EBITDA is an amount equal to net (loss) income plus interest expense, and all interest expense related items (e.g. changes associated with ineffective interest rate swap, write-off of debt issue costs, charges associated with mortgage refinancing), income taxes, and depreciation and amortization. EBITDA is presented herein because we believe it is a useful supplement to cash flow from operations in understanding cash flows generated from operations that are available for debt service (interest and principal payments) and further investment in acquisitions. However, EBITDA is not a presentation made in accordance with U.S. generally accepted accounting principles, (GAAP), and is not intended to present a superior measure of the financial condition from those determined under GAAP. EBITDA, as used herein, is not necessarily comparable to other similarly titled captions of other companies due to differences in methods of calculations. |
(2) |
Total debt represents long-term debt, including current maturities. |
A reconciliation of net cash (used in)
provided by operating activities, the most directly comparable GAAP measure, to EBITDA for each of the respective periods indicated is as
follows:
Year Ended December 29, 2012 |
Year Ended December 31, 2011 |
Year Ended January 1, 2011 |
Year Ended January 2, 2010 |
Year Ended January 3, 2009 |
||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Net cash
(used in) provided by operating activities |
$(74,250 | ) | $(50,332 | ) | $ | (29,861 | ) | $ | (19,853 | ) | $ | 190,390 | ||||||||||
Amortization
of debt issue costs |
(3,746 | ) | (2,940 | ) | (1,963 | ) | (2,459 | ) | (2,479 | ) | ||||||||||||
Net gain from
terminating the Georgia-Pacific supply agreement |
| | | 17,772 | | |||||||||||||||||
Payments from
terminating the Georgia-Pacific supply agreement |
| | (4,706 | ) | (14,118 | ) | | |||||||||||||||
Vacant
property charges, net |
30 | 291 | (53 | ) | (1,222 | ) | (4,441 | ) | ||||||||||||||
Payments on
modification of lease agreement |
5,875 | | | | | |||||||||||||||||
Deferred
income tax benefit (provision) |
20 | 25 | 600 | (24,220 | ) | 2,935 | ||||||||||||||||
Prepayment
fees associated with sale of property |
| | | (616 | ) | (1,868 | ) | |||||||||||||||
Gain on sale
of properties |
9,885 | 10,604 | | 10,397 | 1,936 | |||||||||||||||||
Gain from
insurance settlement |
476 | 1,230 | | | | |||||||||||||||||
Gain from
modification of lease agreement |
| 1,971 | | | | |||||||||||||||||
Share-based
compensation |
(2,797 | ) | (1,974 | ) | (3,978 | ) | (2,922 | ) | (2,614 | ) | ||||||||||||
Excess tax
benefits from share-based arrangements |
| | | | 81 | |||||||||||||||||
Changes in
assets and liabilities |
50,045 | 11,444 | (4,337 | ) | 421 | (195,124 | ) | |||||||||||||||
Interest
expense |
28,157 | 30,510 | 33,788 | 32,456 | 38,547 | |||||||||||||||||
(Benefit
from) provision for income taxes |
386 | 962 | (589 | ) | 4,564 | (16,434 | ) | |||||||||||||||
EBITDA |
$14,081 | $1,791 | $ | (11,099 | ) | $ | 200 | $ | 10,929 |
6
An investment in our securities
involves a high degree of risk. In evaluating an investment in our securities, you should consider carefully the risks described below, which discuss
the most significant factors that affect an investment in our securities, together with the other information included or incorporated by reference in
this prospectus, including the risk factors set forth in our Annual Report on Form 10-K for the year ended December 29, 2012 and the
risks we have highlighted in other sections of this prospectus. If any of the events described in the following risk factors actually occurs, or if
additional risks and uncertainties not presently known to us or that we currently deem immaterial, materialize, then our business, results of
operations and financial condition could be materially adversely affected. The risks discussed below include forward-looking statements, and our actual
results may differ materially from those discussed in these forward-looking statements.
Risks Related to Our Company
Our industry is highly cyclical, and prolonged periods of
weak demand or excess supply may reduce our net sales and/or margins, which may reduce our net income or cause us to incur
losses.
The building products distribution
industry is subject to cyclical market pressures. Prices of building products are determined by overall supply and demand in the market for building
products. Market prices of building products historically have been volatile and cyclical, and we have limited ability to control the timing and amount
of pricing changes for building products. Demand for building products is driven mainly by factors outside of our control, such as general economic and
political conditions, interest rates, availability of mortgage financing, the construction, repair and remodeling and industrial markets, weather and
population growth. The supply of building products fluctuates based on available manufacturing capacity, and excess capacity in the industry can result
in significant declines in market prices for those products. To the extent that prices and volumes experience a sustained or sharp decline, our net
sales and margins likely would decline as well. Because we have substantial fixed costs, a decrease in sales and margin generally may have a
significant adverse impact on our financial condition, operating results and cash flows. Our results in some periods have been affected by market
volatility, including a reduction in gross profits due to a decline in the resale value of our structural products inventory. All of these factors make
it difficult to forecast our operating results.
Our industry is dependent on the homebuilding industry
which has suffered from a prolonged significant downturn, and any slowdown in the current recovery or any future downturns would materially affect our
business, liquidity and operating results.
Our sales depend heavily on the
strength of national and local new residential construction and home improvement and remodeling markets. The strength of these markets depends on new
housing starts and residential renovation projects, which are a function of many factors beyond our control. Some of these factors include general
economic conditions, employment levels, job and household formation, interest rates, housing prices, tax policy, availability of mortgage financing,
prices of commodity wood and steel products, immigration patterns, regional demographics and consumer confidence. The overall housing market and the
economy are improving; however, the U.S. residential construction market has suffered from a multi-year downturn that was one of the most severe
housing downturns in United States history. While the governments legislative and administrative measures aimed at restoring liquidity to the
credit markets and providing relief to homeowners facing foreclosure are beginning to show positive results and there have been signs of improvement in
the U.S. economy generally, and in the residential housing market in particular, it is unclear if and to what extent the residential construction
market will continue to improve during fiscal 2013.
Our results of operations were
adversely affected by the severe downturn in new housing activity in the United States, and, while currently improving, any slowdown in the current
recovery or any future downturns in the markets that we serve or in the economy generally will have a material adverse effect on our operating results,
liquidity and financial condition. Reduced levels of construction activity may result in continued intense price competition among building materials
suppliers, which may adversely affect our gross margins. We cannot provide assurance that our responses to future downturns in the economy in general,
and in the residential housing market in particular, will be successful.
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A significant portion of our sales are on credit to our
customers. Material changes in their credit worthiness or our inability to forecast deterioration in their credit position could have a material
adverse effect on our operating results, cash flow and liquidity.
The majority of our sales are on
account where we provide credit to our customers. Continued market disruptions could cause additional economic downturns, which may lead to lower
demand for our products and increased incidence of customers inability to pay their accounts. Bankruptcies by our customers may cause us to incur
bad debt expense at levels higher than historically experienced. In fiscal 2012, approximately 0.1% in bad debt expense to total net sales was
incurred related to credit sales. Our customers are generally susceptible to the same economic business risks as we are. Furthermore, we may not
necessarily be aware of any deterioration in their financial position. If our customers financial position becomes impaired, it could have a
significant impact on our bad debt exposure and could have a material adverse effect on our operating results, cash flow and liquidity. In addition,
certain of our suppliers potentially may be impacted as well, causing disruption or delay of product availability. These events would adversely impact
our results of operations, cash flows and financial position.
Our cash flows and capital resources may be insufficient to
make required payments on our substantial indebtedness and future indebtedness or to maintain our required level of excess
liquidity.
We have a substantial amount of debt.
As of December 29, 2012, we had outstanding borrowings of $169.5 million and excess availability of $86.0 million under the terms
of our U.S. revolving credit facility, outstanding borrowings of $1.9 million and excess availability of $2.0 million under our Canadian
revolving credit facility and outstanding letters of credit totaling $4.5 million. As of December 29, 2012, the principal amount outstanding on
our mortgage loan was $206.0 million.
Our substantial debt could have
important consequences to you. For example, it could:
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make it difficult for us to satisfy our debt obligations; |
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make us more vulnerable to general adverse economic and industry conditions; |
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limit our ability to obtain additional financing for working capital, capital expenditures, acquisitions and other general corporate requirements as our excess liquidity likely will decrease while our industry and our Company begins its recovery from the historic housing market downturn; |
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expose us to interest rate fluctuations because the interest rate on the debt under our U.S. revolving credit facility is variable; |
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require us to dedicate a substantial portion of our cash flow from operations to payments on our debt, thereby reducing the availability of our cash flow for operations and other purposes; |
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limit our flexibility in planning for, or reacting to, changes in our business and the industry in which we operate; and |
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place us at a competitive disadvantage compared to competitors that may have proportionately less debt, and therefore may be in a better position to get favorable credit terms. |
In addition, our ability to make
scheduled payments or refinance our obligations depends on our successful financial and operating performance, cash flows and capital resources, which
in turn depend upon prevailing economic conditions and certain financial, business and other factors, many of which are beyond our control. These
factors include, among others:
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economic and demand factors affecting the building products distribution industry; |
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pricing pressures; |
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increased operating costs; |
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competitive conditions; and |
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other operating difficulties. |
If our cash flows and capital resources
are insufficient to fund our debt service obligations, we may be forced to reduce or delay capital expenditures, sell material assets or operations,
obtain additional capital or restructure our debt. Obtaining additional capital or restructuring our debt could be accomplished in
part
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through new or additional borrowings or placements of debt or equity securities. There is no assurance that we could obtain additional capital or restructure our debt on terms acceptable to us or at all. In the event that we are required to dispose of material assets or operations to meet our debt service and other obligations, the value realized on the disposition of such assets or operations will depend on market conditions and the availability of buyers. Accordingly, any such sale may not, among other things, be for a sufficient dollar amount. Our obligations under the revolving credit facilities are secured by a first priority security interest in all of our operating subsidiarys and BlueLinx Canadas (for the Canadian revolving credit facility) inventories, receivables and proceeds from those items. In addition, our mortgage loan is secured by the majority of our real property. The foregoing encumbrances may limit our ability to dispose of material assets or operations. We also may not be able to restructure our indebtedness on favorable economic terms, if at all. We may incur substantial additional indebtedness in the future, including under the revolving credit facilities. Our incurring additional indebtedness would intensify the risks described above.
The instruments governing our indebtedness contain various
covenants limiting the discretion of our management in operating our business, including requiring us to maintain a minimum level of excess
liquidity.
Our revolving credit facilities and
mortgage loan contain various restrictive covenants and restrictions, including financial covenants customary for asset-based loans that limit our
managements discretion in operating our business. In particular, these instruments limit our ability to, among other things:
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incur additional debt; |
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grant liens on assets; |
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make investments, including capital expenditures; |
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sell or acquire assets outside the ordinary course of business; |
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engage in transactions with affiliates; and |
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make fundamental business changes. |
Under our U.S. revolving credit
facility, we are required to maintain a fixed charge coverage ratio of 1.1 to 1.0 in the event our excess availability falls below the greater of
$30 million or the amount equal to 15% of the lesser of the borrowing base or $400 million. If we fail to maintain this minimum excess
availability, the U.S. revolving credit facility requires us to (i) maintain certain financial ratios, which we would not meet with current operating
results triggering the lenders right to make the debt callable, and (ii) limit our capital expenditures. If we fail to comply with the
restrictions in the U.S. revolving credit facility, the Canadian revolving credit facility, the mortgage loan documents or any other current or future
financing agreements, a default may allow the creditors under the relevant instruments to accelerate the related debt and to exercise their remedies
under these agreements, which will typically include the right to declare the principal amount of that debt, together with accrued and unpaid interest
and other related amounts, immediately due and payable, to exercise any remedies the creditors may have to foreclose on assets that are subject to
liens securing that debt and to terminate any commitments they had made to supply further funds.
We are dependent upon several large suppliers for a
significant percentage of our products.
Although we have made progress in
diversifying our supplier base, we are still dependent on several large suppliers for a significant percentage of our products. Purchases
in fiscal 2012 from the five largest suppliers were approximately 25% in the aggregate, none of these suppliers individually constitute more than 10%
of our product purchases.
The market for our private label products may not develop
as anticipated and we may have problems in the supply chain for these products.
We have been increasing the number of
private label products that we offer to our customers. Private label products are those that are manufactured for us by third parties, but are then
branded by us. The market for these products may be slow to develop or may not develop at all if customers prefer to purchase the more commonly
recognized name brand versions of the same products. These products are manufactured on our behalf by third party suppliers, and we do not
directly control the manufacturing process. As a result, while
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such products must generally meet certain quality standards set by us, it is possible that our results may be negatively impacted if there are defects in the manufacturing process that are not identified prior to our branding of the products and the sale to our customers. Further, problems in the supply chain for these products may adversely impact our ability to maintain sufficient inventory levels for the privately branded products.
Although in many instances we have
agreements with our suppliers, these agreements are generally terminable by either party on limited notice. Failure by our suppliers to continue
to supply us with products on commercially reasonable terms, or at all, could put pressure on our gross margins or have a material
adverse effect on our financial condition, operating results, and cash flows.
We source many products internationally and are exposed
to risks associated with doing business globally.
We import a variety of products from
countries located in Asia, South America and the Middle East. The business, regulatory and political environments in these countries differ from
those in the U.S. Our global sourcing strategy is subject to risks and uncertainties, including changes in foreign country regulatory
requirements; differing business practices associated with foreign operations; imposition of foreign tariffs and other trade barriers;
political, legal and economic instability; foreign currency exchange rate fluctuations; foreign country tax rules, regulations and other
requirements, such as changes in tax rates and statutory and judicial interpretations in tax laws; inflation; differing labor laws and changes
in those laws; government price controls; and work stoppages and disruptions in the shipping of imported and exported
products.
Our transportation operations are subject to significant
governmental regulation.
Our transportation operations are
subject to the regulatory jurisdiction of the U.S. Department of Transportation (DOT). The DOT has broad administrative powers with
respect to our transportation operations. If we fail to adequately comply with DOT regulations or regulations become more stringent, we
could experience increased inspections, regulatory authorities could take remedial action including imposing fines or shutting down our
operations or we could be subject to increased audit and compliance costs. If any of these events were to occur, our results of operations,
business, cash flow, and financial condition would be adversely affected.
Product shortages, loss of key suppliers, and our
dependence on third-party suppliers and manufacturers could affect our financial health.
Our ability to offer a wide variety of
products to our customers is dependent upon our ability to obtain adequate product supply from manufacturers and other suppliers. Generally, our
products are obtainable from various sources and in sufficient quantities. However, the loss of, or a substantial decrease in the availability of,
products from our suppliers or the loss of key supplier arrangements could adversely impact our financial condition, operating results, and cash
flows.
Although in many instances we have
agreements with our suppliers, these agreements are generally terminable by either party on limited notice. Failure by our suppliers to continue to
supply us with products on commercially reasonable terms, or at all, could put pressure on our gross margins or have a material adverse effect on our
financial condition, operating results, and cash flows.
Our industry is highly fragmented and competitive. If we
are unable to compete effectively, our net sales and operating results will be reduced.
The building products distribution
industry is highly fragmented and competitive, and the barriers to entry for local competitors are relatively low. Competitive factors in our industry
include pricing and availability of product, service and delivery capabilities, ability to assist with problem-solving, customer relationships,
geographic coverage and breadth of product offerings. Also, financial stability is important to suppliers and customers in choosing distributors for
their products and affects the favorability of the terms on which we are able to obtain our products from our suppliers and sell our products to our
customers.
Some of our competitors are part of
larger companies and therefore have access to greater financial and other resources than those to which we have access. In addition, certain product
manufacturers sell and distribute their products directly to customers. Additional manufacturers of products distributed by us may elect to sell and
distribute directly to end-users in the future or enter into exclusive supply arrangements with
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other distributors. Finally, we may not be able to maintain our costs at a level sufficiently low for us to compete effectively. If we are unable to compete effectively, our net sales and net income will be reduced.
Integrating acquisitions may be time-consuming and create
costs that could reduce our operating results and cash flows.
We may elect to selectively pursue
acquisitions. Any integration process may be complex and time consuming, may be disruptive to the business and may cause an interruption of, or a
distraction of managements attention from, the business as a result of a number of obstacles, including but not limited to:
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the loss of key customers of the acquired company; |
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the incurrence of unexpected expenses and working capital requirements; |
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a failure of our due diligence process to identify significant issues or contingencies; |
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difficulties assimilating the operations and personnel of the acquired company; |
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difficulties effectively integrating the acquired technologies with our current technologies; |
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our inability to retain key personnel of acquired entities; |
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failure to maintain the quality of customer service; |
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our inability to achieve the financial and strategic goals for the acquired and combined businesses; and |
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difficulty in maintaining internal controls, procedures and policies. |
Any of the foregoing obstacles, or a
combination of them, could increase selling, general and administrative expenses in absolute terms and/or as a percentage of net sales, which could in
turn negatively impact our operating results and cash flows.
We may not be able to consummate
acquisitions in the future on terms acceptable to us, or at all. In addition, future acquisitions are accompanied by the risk that the obligations and
liabilities of an acquired company may not be adequately reflected in the historical financial statements of that company and the risk that those
historical financial statements may be based on assumptions which are incorrect or inconsistent with our assumptions or approach to accounting
policies. Any of these material obligations, liabilities or incorrect or inconsistent assumptions could adversely impact our results of
operations.
A significant percentage of our employees are unionized.
Wage increases or work stoppages by our unionized employees may reduce our results of operations.
As of December 29, 2012, approximately
30% of our employees were represented by various labor unions. As of December 29, 2012, we had 42 collective bargaining agreements, of which 10,
covering approximately 132 total employees, are up for renewal in fiscal 2013. Although we have generally had good relations with our unionized
employees and expect to renew collective bargaining agreements as they expire, no assurances can be provided that we will be able to reach a timely
agreement as to the renewal of the agreements, and their expiration or continued work under an expired agreement, as applicable, could result in a work
stoppage. In addition, we may become subject to material cost increases, or additional work rules imposed by agreements with labor unions. The
foregoing could increase our selling, general and administrative expenses in absolute terms and/or as a percentage of net sales. In addition, work
stoppages or other labor disturbances may occur in the future, which could adversely impact our net sales and/or selling, general and administrative
expenses. All of these factors could negatively impact our operating results and cash flows.
Increases in the cost of employee benefits, such as pension
and other postretirement benefits, could impact our financial results and cash flow.
Unfavorable changes in the cost of our
pension retirement benefits and current employees medical benefits could materially impact our financial results and cash flow. We sponsor
several defined benefit pension plans covering substantially all of our hourly employees. Our estimates of the amount and timing of our future funding
obligations for our defined benefit pension plans are based upon various assumptions.
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These assumptions include, but are not limited to, the discount rate, projected return on plan assets, compensation increase rates, mortality rates, retirement patterns, and turnover rates. In addition, the amount and timing of our pension funding obligations can be influenced by funding requirements that are established by the Employee Retirement Income and Security Act of 1974 (ERISA), the Pension Protection Act, Congressional Acts, or other governing bodies. During fiscal 2010 and 2011, we met our required contribution to our defined benefit pension plans. As of December 29, 2012, the net unfunded status of our benefit plan was $46.6 million. The Companys required cash contribution to the pension plan in 2012 was approximately $3.3 million. The 2012 required contribution was comprised of approximately $1.2 million related to our 2011 minimum required contribution and approximately $2.1 million related to our 2012 minimum required contribution. The Companys minimum required contribution for plan year 2012 was $3.2 million. The Company has funded the $1.2 million related to its 2011 minimum required contribution with cash in 2012. However, in an effort to preserve additional cash for operations, we applied for a waiver from the Internal Revenue Service (the IRS) for our 2012 minimum required contribution. The waiver is still being reviewed by the IRS. No assurances can be provided, however, that any such waiver request will be granted. We have not made the $2.1 million of required 2012 contributions related to the 2012 minimum required contribution. If we are granted the requested waiver, our contributions for 2012 will be amortized over the following five years, increasing our future minimum required contributions. We are currently required to make three quarterly cash contributions during fiscal 2013 of $0.8 million per quarter related to our 2013 minimum required contribution. We are pursuing contributing personal property to the pension plan during fiscal 2013. We will designate the contribution such that it will offset our future minimum required contribution.
We participate in various
multi-employer pension plans in the United States. The majority of these plans are underfunded. If, in the future, we choose to withdraw from these
plans, we likely would need to record a withdrawal liability, which may be material to our financial results.
The payment of dividends has been suspended, and resumption
is dependent on business conditions, among other factors. Further, the instruments governing our indebtedness contain various covenants that may limit
our ability to pay dividends.
We suspended the payment of dividends
on our common stock for an indefinite period of time on December 5, 2007. Resumption of the payment of dividends will depend on, among other things,
business conditions in the housing industry, our results of operations, cash requirements, financial condition, contractual restrictions, provisions of
applicable law and other factors that our board of directors may deem relevant. Accordingly, we may not be able to resume the payment of dividends at
the same quarterly rate in the future, if at all.
Federal and state transportation regulations could impose
substantial costs on us which would reduce our net income.
We use our own fleet of over 500
tractors and over 900 trailers to service customers throughout the United States. The U.S. Department of Transportation, or DOT, regulates our
operations in domestic interstate commerce. We are 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. More restrictive limitations on vehicle weight and
size, trailer length and configuration, or driver hours of service would increase our costs, which, if we are unable to pass these cost increases on to
our customers, will increase our selling, general and administrative expenses and reduce our operating results.
Environmental laws impose risks and costs on
us.
Our operations are subject to federal,
state, provincial and local laws, rules and regulations governing the protection of the environment, including, but not limited to, those regulating
discharges into the air and water, the use, handling and disposal of hazardous or toxic substances, the management of wastes, the cleanup of
contamination and the control of noise and odors. We have made, and will continue to make, expenditures to comply with these requirements. While we
believe, based upon current information, that we are in substantial compliance with all applicable environmental laws, rules and regulations, we could
be subject to potentially significant fines or penalties for any failure to comply. Moreover, under certain environmental laws, a current or previous
owner or operator of real property, and parties that generate or transport hazardous substances that are disposed of at that real property, may be held
liable for the cost to investigate or clean up such real property and for related damages to natural resources. We may be subject to liability,
including liability for
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investigation and cleanup costs, if contamination is discovered at one of our current or former warehouse facilities, or at a landfill or other location where we have disposed of, or arranged for the disposal of, wastes. Georgia-Pacific has agreed to indemnify us against any claim arising from environmental conditions that existed prior to May 7, 2004 in connection with the properties we acquired when we purchased the assets of Georgia-Pacifics distribution division (the Division). We also carry environmental insurance. However, any remediation costs either not related to conditions existing prior to May 7, 2004 or on properties acquired after May 7, 2004 may not be covered by indemnification. In addition, certain remediation costs may not be covered by insurance. We could also be subject to claims brought pursuant to applicable laws, rules or regulations for property damage or personal injury resulting from the environmental impact of our operations. Increasingly stringent environmental requirements, more aggressive enforcement actions, the discovery of unknown conditions or the bringing of future claims may cause our expenditures for environmental matters to increase, and we may incur material costs associated with these matters.
Failure to comply with governmental laws and regulations
could harm our business.
Our business is subject to regulation
by various federal, state, local and foreign governmental agencies, including agencies responsible for monitoring and enforcing employment and labor
laws, workplace safety, product safety, environmental laws, consumer protection laws, anti-bribery laws, import/export controls, federal securities
laws and tax laws and regulations. Noncompliance with applicable regulations or requirements could subject us to investigations, sanctions, mandatory
product recalls, enforcement actions, disgorgement of profits, fines, damages, civil and criminal penalties or injunctions. If any governmental
sanctions are imposed, or if we do not prevail in any possible civil or criminal litigation, our business, operating results and financial condition
could be materially adversely affected. In addition, responding to any action will likely result in a significant diversion of managements
attention and resources and an increase in professional fees. Enforcement actions and sanctions could harm our business, operating results and
financial condition.
Affiliates of Cerberus control us and may have conflicts of
interest with other stockholders in the future.
Cerberus beneficially owned
approximately 52% of our common stock as of the record date. As a result, Cerberus is able to control the election of our directors,
determine our corporate and management policies and determine, without the consent of our other stockholders, the outcome of any corporate transaction
or other matter submitted to our stockholders for approval, including potential mergers or acquisitions, asset sales and other significant corporate
transactions. This concentrated ownership position limits other stockholders ability to influence corporate matters and, as a result, we may take
actions that some of our stockholders do not view as beneficial.
Cerberus is controlled by Cerberus
Capital Management. Three of our seven directors are employees of or current advisors to Cerberus Capital Management. Cerberus also has
sufficient voting power to amend our organizational documents. The interests of Cerberus may not coincide with the interests of other holders of our
common stock. Additionally, Cerberus is in the business of making investments in companies and may, from time to time, acquire and hold interests in
businesses that compete directly or indirectly with us. Cerberus may also pursue, for its own account, acquisition opportunities that may be
complementary to our business, and as a result, those acquisition opportunities may not be available to us. So long as Cerberus continues to own a
significant amount of the outstanding shares of our common stock, it will continue to be able to strongly influence or effectively control our
decisions, including potential mergers or acquisitions, asset sales and other significant corporate transactions. In addition, because we are a
controlled company within the meaning of the New York Stock Exchange rules, we are exempt from the NYSE requirements that our board be composed of a
majority of independent directors, that our compensation committee be composed entirely of independent directors, and that we maintain a
nominating/corporate governance committee composed entirely of independent directors.
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Even if Cerberus no longer controls us in the future,
certain provisions of our charter documents and agreements and Delaware law could discourage, delay or prevent a merger or acquisition at a premium
price.
Our Second Amended and Restated
Certificate of Incorporation and Amended and Restated Bylaws contain provisions that:
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permit us to issue, without any further vote or action by the stockholders, up to 30 million shares of preferred stock in one or more series and, with respect to each series, to fix the number of shares constituting the series and the designation of the series, the voting powers (if any) of the shares of such series, and the preferences and other special rights, if any, and any qualifications, limitations or restrictions, of the shares of the series; and |
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limit the stockholders ability to call special meetings. |
These provisions may discourage, delay
or prevent a merger or acquisition at a premium price.
In addition, we are subject to Section
203 of the General Corporation Law of the State of Delaware, or the DGCL, which also imposes certain restrictions on mergers and other business
combinations between us and any holder of 15% or more of our common stock. Further, certain of our incentive plans provide for vesting of stock options
and/or payments to be made to our employees in connection with a change of control, which could discourage, delay or prevent a merger or acquisition at
a premium price.
We are subject to cybersecurity risks and may incur
increasing costs in an effort to minimize those risks.
Our business employs systems and a
website that allow for the secure storage and transmission of customers proprietary information. Security breaches could expose us to a risk of
loss or misuse of this information, litigation and potential liability. We may not have the resources or technical sophistication to anticipate or
prevent rapidly evolving types of cyber attacks. Any compromise of our security could result in a violation of applicable privacy and other laws,
significant legal and financial exposure, damage to our reputation, and a loss of confidence in our security measures, which could harm our business.
As cyber attacks become more sophisticated generally, we may be required to incur significant costs to strengthen our systems from outside intrusions
and/or obtain insurance coverage related to the threat of such attacks.
Risks Related to the Rights Offering
The subscription price determined for the rights offering
is not necessarily an indication of the fair value of our common stock.
The per share subscription price is not
intended to bear any relationship to our market value, book value, tangible book value, multiple of earnings or any other established criteria of fair
value and may or may not be considered the fair value of our common stock to be offered in the rights offering. After the date of this prospectus, our
shares of common stock may trade at prices above or below the subscription price.
If you do not exercise your subscription rights, your
percentage ownership in BlueLinx will be diluted.
Assuming we sell the full amount of
shares of common stock issuable in connection with the rights offering, we will issue approximately 22,857,142 shares of our common stock. If
you choose not to exercise your basic subscription rights, your relative ownership interest in our common stock will be diluted.
If the rights offering is not fully subscribed, and
Cerberus fully exercises its rights and over-subscription privilege, Cerberus would increase its ownership percentage.
Cerberus, our majority stockholder,
which beneficially owned approximately 52% of our outstanding shares of common stock as of the record date, has indicated that it intends to
exercise all of the rights issued to it under the pro rata basic subscription right and to subscribe for the maximum additional shares pursuant
to the over-subscription privilege that it would be entitled to purchase. However, such indication is not binding, and Cerberus is not legally
obligated to do so. As a stockholder of the Company as of the record date, Cerberus will have the right to subscribe for and purchase shares of our
common stock under the basic subscription right of the rights offering and to participate in the over-subscription privilege. If Cerberus is the only
holder of rights who subscribes in the rights offering the Company will issue an aggregate of 22,857,142 shares of common stock to Cerberus.
Under such circumstances, Cerberus ownership percentage of our
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outstanding common stock would increase to approximately 65% after giving effect to this rights offering. Except as a result of any increase in its ownership of common stock, Cerberus will not obtain any additional governance or control rights as a result of the rights offering. Your interests as a holder of common stock may differ from the interests of Cerberus.
Because we do not have any formal commitments from any of
our stockholders to participate in this rights offering, and have not entered into a backstop agreement with any person concerning this rights
offering, the net proceeds we receive from this rights offering may be lower than currently anticipated and the gross proceeds may be less than $40
million.
We do not have any binding commitments
from any of our stockholders to participate in this rights offering and we cannot assure you that any of our stockholders will exercise all or any part
of their basic subscription rights or their over-subscription privilege. If our stockholders subscribe for fewer shares of our common stock than
anticipated, the gross proceeds may be less than $40 million. Cerberus, our majority stockholder, which beneficially owned approximately 52% of
our outstanding shares of common stock as of the record date, has indicated that it intends to exercise all of the rights issued to it under the pro
rata basic subscription right and to subscribe for the maximum additional shares pursuant to the over-subscription privilege that it would be
entitled to purchase. However, such indication is not binding, and Cerberus is not legally obligated to do so. In addition, we are not entering into
any backstop agreement or similar agreement with respect to the purchase of any shares of our common stock subscribed for through the basic
subscription privilege or the over-subscription privilege. Therefore, there is no certainty that any shares will be purchased pursuant to the rights
offering, and there is no minimum purchase requirement as a condition to our accepting subscriptions.
We may cancel the rights offering at any time, and in such
case neither we nor the subscription agent will have any obligation to you except to return your exercise payments.
We may, in our sole discretion, cancel
the rights offering before it expires. If we cancel the rights offering neither we nor the subscription agent will have any obligation to you with
respect to the rights except to return any payment received by the subscription agent, without interest, as soon as practicable.
If you do not act timely and follow the subscription
instructions, your exercise of subscription rights will be rejected.
If you desire to purchase shares of
common stock in the rights offering, you must act timely to ensure that the subscription agent actually receives all required forms and payments before
the expiration of the rights offering at 5:00 p.m., New York City time, on March 27, 2013, unless we extend the rights offering period.
If you are a beneficial owner of shares, you must act promptly to ensure that your broker, dealer, custodian bank or other nominee acts for you and
that the subscription agent receives all required forms and payments before the rights offering expires. We are not responsible if your nominee fails
to ensure that the subscription agent receives all required forms and payments before the rights offering expires. If you fail to complete and sign the
required subscription forms, send an incorrect payment amount, or otherwise fail to follow the subscription procedures that apply to the exercise of
your subscription rights the rights offering expires, the subscription agent will reject your subscription or accept it only to the extent of the
payment received. Neither we nor our subscription agent undertakes any responsibility or action to contact you concerning an incomplete or incorrect
subscription form or payment, nor are we under any obligation to correct such forms or payment. We have the sole discretion to determine whether a
subscription exercise properly complies with the subscription procedures.
Significant sales of our common stock, or the perception
that significant sales may occur in the future, could adversely affect the market price for our common stock.
The sale of substantial amounts of our
common stock could adversely affect the price of these securities. Sales of substantial amounts of our common stock in the public market, and the
availability of shares for future sale, including up to 22,857,142 shares of our common stock to be issued in this rights offering, could cause
the market price of our common stock to remain low for a substantial amount of time. We cannot foresee the impact of such potential sales on the
market, but it is possible that if a significant percentage of such available shares were attempted to be sold within a short period of time, the
market for our shares would be adversely affected. Even if a substantial number of sales do not occur within a short period of time,
the
15
mere existence of this market overhang could have a negative impact on the market for our common stock and our ability to raise additional capital.
The subscription rights are not transferable, and there is
no market for the subscription rights.
You may not sell, give away, or
otherwise transfer your subscription rights. Because the subscription rights are non-transferable, there is no market or other means for you to
directly realize any value associated with the subscription rights.
You may not revoke your subscription exercise and could be
committed to buying shares above the prevailing market price.
Once you exercise your subscription
rights, you may not revoke the exercise of such rights. The public trading market price of our common stock may decline before the subscription rights
expire. If you exercise your subscription rights and, afterwards, the public trading market price of our common stock decreases below the subscription
price, you will have committed to buying shares of our common stock at a price above the prevailing market price. Moreover, you may be unable to sell
your shares of common stock at a price equal to or greater than the subscription price you paid for such shares, and you may lose all or part of your
investment in our common stock.
You will not be able to sell the shares of common stock you
buy in the rights offering until you receive your stock certificates or your account is credited with the common stock.
If you purchase shares in the rights
offering by submitting a rights certificate and payment, we will mail you a stock certificate as soon as practicable after March 27, 2013, or
such later date as to which the rights offering may be extended. If your shares are held by a broker, dealer, custodian bank or other nominee and you
purchase shares, your account with your nominee will instead be credited with the shares of our common stock you purchased in the rights offering as
soon as practicable after the expiration of the rights offering, or such later date as to which the rights offering may be extended. Until your stock
certificates have been delivered or your account is credited, you may not be able to sell your shares even though the common stock issued in the rights
offering will be listed for trading on the New York Stock Exchange. The stock price may decline between the time you decide to sell your shares and the
time you are actually able to sell your shares.
The rights offering does not require a minimum amount of
proceeds for us to close the offering, which means that if you exercise your rights, you may acquire additional shares of common stock in us when we
would continue to benefit from additional capital.
There is no minimum amount of proceeds
required to complete the rights offering and your exercise of your subscription rights is irrevocable. Therefore, if you exercise the basic
subscription right or the over-subscription privilege, but we do not sell the entire amount of securities being offered in this rights offering and the
rights offering is not fully subscribed, you may be investing in a company that would continue to benefit from additional capital.
If you make payment of the subscription price by
uncertified personal check, your check may not clear in sufficient time to enable you to purchase shares in the rights
offering.
Any uncertified personal check used to
pay the subscription price in the rights offering must clear prior to the expiration of the rights offering period, and the clearing process may
require five or more business days. As a result, if you choose to use an uncertified personal check to pay the subscription price, it may not clear
prior to the expiration of the rights offering period, in which event you would not be eligible to exercise your subscription rights. You may eliminate
this risk by paying the subscription price by wire transfer of immediately available funds.
16
Risks Related to the Common Stock
Only a limited market exists for our common stock which
could lead to price volatility.
The limited trading market for our
common stock may cause fluctuations in the market value of our common stock to be exaggerated, leading to price volatility in excess of that which
would occur in a more active trading market of our common stock. For example, for the year ended December 29, 2012, our stock traded as high as $2.89
per share and as low as $1.45 per share. Our stock price may increase or decrease in response to a number of events and factors,
including:
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the announcement or completion of this rights offering; |
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future announcements concerning us, key customers or competitors; |
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quarterly variations in operating results and liquidity; |
|
changes in financial estimates and recommendations by securities analysts; |
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developments with respect to technology or litigation; |
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changes in applicable laws and regulations; |
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the operating and stock price performance of other companies that investors may deem comparable to our company; |
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acquisitions and financings; and |
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sales and purchases of our stock by insiders. |
Concentrated ownership of our common stock creates a risk
of sudden change in our share price.
Investors who purchase our common stock
may be subject to certain risks due to the concentrated ownership of our common stock. The sale by any of our large stockholders of a significant
portion of that stockholders holdings could have a material adverse effect on the market price of our common stock. As of the record date,
Cerberus beneficially owned approximately 52% of our common stock.
There may be future sales or other dilution of our equity,
which may adversely affect the market price of our common shares.
We are not restricted from issuing
additional common shares, including any securities that are convertible into or exchangeable for, or that represent the right to receive, common
shares, as well as any common shares that may be issued pursuant to our stockholder rights plan. The market price of our common shares could decline as
a result of sales of our common shares made after this offering or the perception that such sales could occur.
Assuming all subscription rights are
exercised in this rights offering, we estimate that the net proceeds to us from the sale of the shares of common stock offered in the rights offering,
after deducting estimated offering expenses, will be approximately $38.8 million. We intend to use the net proceeds from this offering to repay debt
under our U.S. revolving credit facility. As of December 29, 2012, we had outstanding borrowings of $169.5 million and excess
availability of $86.0 million under the terms of our U.S. revolving credit facility. The U.S. revolving credit facility had an interest rate of
4.1% as of December 29, 2012 and matures on January 7, 2014.
17
The following summary of certain
provisions of our capital stock does not purport to be complete and is subject to our Second Amended and Restated Certificate of Incorporation and
Amended and Restated Bylaws and the provisions of applicable law. Copies of our Second Amended and Restated Certificate of Incorporation and Amended
and Restated Bylaws have been filed as exhibits to the registration statement of which this prospectus is a part.
General
Our authorized capital stock consists
of 200 million shares of common stock, par value $0.01 per share, of which 63,766,566 shares are issued and outstanding as of the record date,
and 30 million shares of preferred stock, par value $0.01 per share, of which no shares are issued and outstanding as of the record
date.
Common Stock
The holders of our common stock are
entitled to one vote per share on all matters submitted to a vote of stockholders, including the election of directors. There are no cumulative voting
rights. Each director will be elected by the vote of a plurality of the votes cast with respect to such directors election. Except as otherwise
provided by law or our Second Amended and Restated Certificate of Incorporation, any other corporate action taken by a vote of stockholders shall be
authorized by the affirmative vote of a majority of the shares present or represented by proxy and entitled to vote on the subject
matter.
Subject to preferences that may be
applicable to any outstanding series of preferred stock, the holders of our common stock will receive ratably any dividends declared by our board of
directors. In the past we have paid dividends on our common stock at the quarterly rate of $0.125 per share. However, on December 5, 2007, we suspended
the payment of dividends on our common stock for an indefinite period of time. Our board of directors may, at its discretion, modify or repeal our
dividend policy. Future dividends, if any, with respect to shares of our common stock will depend on, among other things, business conditions in the
housing industry, our results of operations, cash requirements, financial condition, contractual restrictions, provisions of applicable law and other
factors that our board of directors may deem relevant. In the event of our liquidation, dissolution or winding-up, the holders of our common stock are
entitled to share ratably in all assets remaining after payment of liabilities, subject to prior distribution rights of preferred stock, if any, then
outstanding. Our common stock has no preemptive, redemption, conversion or subscription rights. In addition, there are no redemption or sinking fund
provisions applicable to the shares of our common stock.
Preferred Stock
Our board of directors has the
authority, by adopting resolutions, to issue up to 30 million shares of preferred stock in one or more series, with the designations and preferences
for each series set forth in the adopting resolutions, without stockholder approval. Our Second Amended and Restated Certificate of Incorporation
authorizes our board of directors to determine, among other things, the rights, preferences and limitations pertaining to each series of preferred
stock.
Limitations on Directors Liability
Our Second Amended and Restated
Certificate of Incorporation and Amended and Restated Bylaws indemnify our directors to the fullest extent permitted by the DGCL. The DGCL permits a
corporation to limit or eliminate a directors personal liability to the corporation or the holders of its capital stock for breach of duty. This
limitation is generally unavailable for acts or omissions by a director which (i) were in bad faith, (ii) were the result of active and deliberate
dishonesty and were material to the cause of action so adjudicated or (iii) involved a financial profit or other advantage to which such director was
not legally entitled. The DGCL also prohibits limitations on director liability for acts or omissions which resulted in a violation of a statute
prohibiting certain dividend declarations, certain payments to stockholders after dissolution and particular types of loans. The effect of these
provisions is to eliminate the rights of our company and our stockholders (through stockholders derivative suits on behalf of our company) to
recover monetary damages against a director for breach of fiduciary duty as a director (including breaches resulting from grossly negligent behavior),
except in the situations described above. These provisions will not limit the liability of directors under the federal securities laws of the United
States.
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In addition, we have entered into
Indemnification Agreements with each of our directors and executive officers pursuant to which the Company has agreed to provide for the advancement of
expenses and indemnification of, to the fullest extent permitted under Delaware law, as the same may be amended from time to time, for each person
party to an Indemnification Agreement.
Transfer Agent and Registrar
The Transfer Agent and Registrar for
our common stock is Registrar and Transfer Company.
Listing
Our common stock is listed on the New
York Stock Exchange under the symbol BXC.
Provisions of Our Second Amended and Restated Certificate of
Incorporation and Amended and Restated Bylaws and Delaware Law That May Have an Anti-Takeover Effect
At such time as Cerberus no longer
controls our company, certain provisions of our Second Amended and Restated Certificate of Incorporation and Amended and Restated Bylaws and Delaware
law may have an anti-takeover effect.
Second Amended and Restated
Certificate of Incorporation and Amended and Restated Bylaws. Certain provisions in our Second Amended and Restated Certificate of Incorporation
and Amended and Restated Bylaws summarized below may be deemed to have an anti-takeover effect and may delay, deter or prevent a tender offer or
takeover attempt that a stockholder might consider to be in its best interests, including attempts that might result in a premium being paid over the
market price for the shares held by stockholders.
Our Second Amended and Restated
Certificate of Incorporation and Amended and Restated Bylaws contain provisions that:
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permit us to issue, without any further vote or action by our stockholders, up to 30 million shares of preferred stock in one or more series and, with respect to each series, fix the number of shares constituting the series and the designation of the series, the voting powers (if any) of the shares of such series, and the preferences and other special rights, if any, and any qualifications, limitations or restrictions, of the shares of the series; and |
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limit stockholders ability to call special meetings. |
The foregoing provisions of our Second
Amended and Restated Certificate of Incorporation and Amended and Restated Bylaws could discourage potential acquisition proposals and could delay or
prevent a change of control. These provisions are intended to enhance the likelihood of continuity and stability in the composition of our board of
directors and in the policies formulated by our board of directors and to discourage certain types of transactions that may involve an actual or
threatened change of control. These provisions are designed to reduce our vulnerability to an unsolicited acquisition proposal. The provisions also are
intended to discourage certain tactics that may be used in proxy fights. However, such provisions could have the effect of discouraging others from
making tender offers for our shares and, as a consequence, they also may inhibit fluctuations in the market price of the common stock that could result
from actual or rumored takeover attempts. Such provisions also may have the effect of preventing changes in our management. See Risk Factors
Risks Related to Our Company Even if Cerberus no longer controls us in the future, certain provisions of our charter documents and
agreements and Delaware law could discourage, delay or prevent a merger or acquisition at a premium price.
Delaware Takeover Statute. We
are subject to Section 203 of the DGCL, which, subject to certain exceptions, prohibits a Delaware corporation from engaging in any business
combination (as defined below) with any interested stockholder (as defined below) for a period of three years following the date that
such stockholder became an interested stockholder, unless: (i) prior to such date, the board of directors of the corporation approved either the
business combination or the transaction that resulted in the stockholder becoming an interested stockholder; (ii) on consummation of the transaction
that resulted in the stockholder becoming an interested stockholder, the interested stockholder owned at least 85% of the voting stock of the
corporation outstanding at the time the transaction commenced, excluding for purposes of determining the number of shares outstanding those shares
owned (x) by persons who are directors and also officers and (y) by employee stock plans in which employee participants do not have the right to
determine confidentially
19
whether shares held subject to the plan will be tendered in a tender or exchange offer; or (iii) on or subsequent to such date, the business combination is approved by the board of directors and authorized at an annual or special meeting of stockholders, and not by written consent, by the affirmative vote of at least 66-2/3% of the outstanding voting stock that is not owned by the interested stockholder.
Section 203 of the DGCL defines
business combination to include: (i) any merger or consolidation involving the corporation and the interested stockholder; (ii) any sale,
transfer, pledge or other disposition of 10% or more of the assets of the corporation in a transaction involving the interested stockholder; (iii)
subject to certain exceptions, any transaction that results in the issuance or transfer by the corporation of any stock of the corporation to the
interested stockholder; (iv) any transaction involving the corporation that has the effect of increasing the proportionate share of the stock of any
class or series of the corporation beneficially owned by the interested stockholder; or (v) the receipt by the interested stockholder of the benefit of
any loans, advances, guarantees, pledges or other financial benefits provided by or through the corporation. In general, Section 203 defines an
interested stockholder as any entity or person beneficially owning 15% or more of the outstanding voting stock of the corporation and any
entity or person affiliated with or controlling or controlled by such entity or person.
Our common stock is listed for
quotation on the New York Stock Exchange under the symbol BXC. As of the record date, we had 63,766,566 shares of common stock
outstanding and approximately 44 registered stockholders, and, as of that date we estimate there were approximately 2,500 beneficial
owners holding our common stock in nominee or street name. The last reported sales price of our common stock on February 25, 2013
was $2.85 per share.
The table below provides, for the
periods indicated, the high and low sales price per share of our common stock, as quoted on the New York Stock Exchange, and the cash dividends
declared per share.
Year Ending December 28, 2013 |
Year Ended December 29, 2012 |
Year Ended December 31, 2011 |
||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Low |
High |
Dividend(1) |
Low |
High |
Dividend(1) |
Low |
High |
Dividend(1) |
||||||||||||||||||||||||||||||||||
1st
Quarter |
$2.70 (2 | ) | $3.48 (2 | ) | $ | | $ | 1.45 | $ | 2.87 | $ | | $ | 3.41 | $ | 3.90 | $ | | ||||||||||||||||||||||||
2nd
Quarter |
| | $ | | $ | 1.96 | $ | 2.89 | $ | | $ | 2.23 | $ | 4.35 | $ | | ||||||||||||||||||||||||||
3rd
Quarter |
| | $ | | $ | 1.97 | $ | 2.72 | $ | | $ | 1.39 | $ | 2.40 | $ | | ||||||||||||||||||||||||||
4th
Quarter |
| | $ | | $ | 1.83 | $ | 2.85 | $ | | $ | 1.25 | $ | 1.90 | $ | |
(1) |
On December 5, 2007, we suspended the payment of dividends on our common stock for an indefinite period of time. See our fiscal 2011 Form 10-K, incorporated by reference in this document, for additional discussion of dividends. |
(2) |
Through February 25, 2013. |
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The following table shows our
historical consolidated capitalization at December 29, 2012, our pro forma consolidated capitalization at December 29, 2012 after giving
effect to the sale of 22,857,142 shares of common stock at an offering price of $1.75 per whole share and the receipt of net proceeds of
$38.8 million from the rights offering after deducting the offering expenses. You should read this table in conjunction with Selected
Historical Consolidated Financial Data and with our consolidated financial statements and the notes to those financial statements included in the
documents incorporated by reference in this prospectus.
As of December 29, 2012 (Unaudited) |
|||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|
(In thousands) |
|||||||||||
Actual |
Pro Forma Including Rights Offering |
||||||||||
Long-term
debt and liabilities: |
|||||||||||
Long-term
debt includes current maturities |
$377,392 | $338,592 | |||||||||
Other
long-term liabilities |
57,146 | 57,146 | |||||||||
Total
long-term debt and liabilities |
$434,538 | $395,738 | |||||||||
Stockholders (deficit) equity: |
|||||||||||
Common stock,
$0.01 par value: 200,000,000 shares authorized; 63,664,115 issued and outstanding shares, actual; 86,521,257 issued and outstanding
shares, as adjusted |
$ | 637 | $865 | ||||||||
Additional
paid-in capital |
209,815 | 248,387 | |||||||||
Accumulated
deficit |
(201,002 | ) | (201,002 | ) | |||||||
Accumulated
other comprehensive loss |
(30,042 | ) | (30,042 | ) | |||||||
Total
stockholders (deficit) equity |
(20,592 | ) | 18,208 | ||||||||
Total
capitalization: |
$413,946 | $413,946 | |||||||||
Per share
data: |
|||||||||||
Basic net
loss per share applicable to common stock, year to date |
$(0.38 | ) | $(0.28 | ) | |||||||
Diluted net
loss per share applicable to common stock, year to date |
$(0.38 | ) | $(0.28 | ) |
21
The Subscription Rights
We are distributing to the record
holders of our common stock as of March 4, 2013, non-transferable subscription rights to purchase shares of common stock at a price of
$1.75 per share. Each holder of record of our common stock will receive one subscription right for every share of our common stock owned by that
holder as of 5:00 p.m., New York City time, on March 4, 2013. Each subscription right will entitle the holder to purchase 0.35845026 of a
share of our common stock. Each subscription right entitles the holder to a basic subscription right and each holder with an over-subscription
privilege. The subscription rights entitle the holders of our common stock to purchase an aggregate of approximately 22,857,142 shares for an
aggregate purchase price of $40 million.
We may cancel the rights offering at
any time for any reason before the rights offering expires. If we cancel the rights offering, we will issue a press release notifying stockholders of
the cancellation, and the subscription agent will return all subscription payments to the subscribers, without interest or penalty, as soon as
practicable.
Basic Subscription Right. With
your basic subscription right, you may purchase 0.35845026 of a share of common stock per subscription right, subject to delivery of the
required documents and payment of the subscription price of $1.75 per whole share, before the rights offering expires. You may exercise all or a
portion of your basic subscription right, or you may choose not to exercise any of your subscription rights. If you do not exercise your basic
subscription rights in full, you will not be entitled to purchase any shares under your over-subscription privilege.
Fractional shares resulting from the
exercise of the basic subscription right will be eliminated by rounding down to the nearest whole share.
For example, if you owned 1,000 shares
of our common stock on the record date, you would have received 1,000 subscription rights and would have the right to purchase 358 shares of
common stock (358.45026 rounded down to the nearest whole share) for $1.75 per whole share.
We will deliver certificates
representing shares or credit your account at your record holder with shares of our common stock that you purchased with the basic subscription rights
as soon as practicable after the rights offering has expired.
Over-subscription Privilege. If
you purchase all of the shares of common stock available to you pursuant to your basic subscription right, you may also choose to purchase a portion of
any shares of common stock that other stockholders do not purchase by exercising their basic subscription rights. If sufficient shares are available,
we will seek to honor the over-subscription requests in full. If over-subscription requests exceed the number of shares of common stock available,
however, we will allocate the available shares pro rata among the stockholders exercising the over-subscription privilege in proportion to the
number of shares of our common stock each of those stockholders owned on the record date, relative to the number of shares owned on the record date by
all stockholders exercising the over-subscription privilege. If this pro rata allocation results in any stockholder receiving a greater number
of shares than the stockholder subscribed for pursuant to the exercise of the over-subscription privilege, then such stockholder will be allocated only
that number of shares for which the stockholder over-subscribed, and the remaining shares will be allocated among all other stockholders exercising the
over-subscription privilege on the same pro rata basis described above. The proration process will be repeated until all shares of common stock
have been allocated.
To properly exercise your
over-subscription privilege, you must deliver the subscription payment related to your over-subscription privilege before the rights offering expires.
Because we will not know the total number of unsubscribed shares of common stock before the rights offering expires, if you wish to maximize the number
of shares you purchase pursuant to your over-subscription privilege, you will need to deliver payment in an amount equal to the aggregate subscription
price for the maximum number of shares that may be available to you (i.e., for the maximum number of shares available to you, assuming you exercise all
of your basic subscription right and are allotted the full amount of your over-subscription without reduction).
We can provide no assurances that you
will actually be entitled to purchase the number of shares of common stock issuable upon the exercise of your over-subscription privilege in full at
the expiration of the rights offering. We will not be able to satisfy any orders for shares pursuant to the over-subscription
privilege
22
if all of our stockholders exercise their basic subscription rights in full, and we will only honor an over-subscription privilege to the extent sufficient shares are available following the exercise of subscription rights pursuant to the basic subscription rights.
To the extent the aggregate
subscription price of the actual number of unsubscribed shares of common stock available to you pursuant to the over-subscription privilege is less
than the amount you actually paid in connection with the exercise of the over-subscription privilege, you will be allocated only the number of
unsubscribed shares available to you, and any excess subscription payments will be returned to you, without interest or penalty, as soon as
practicable.
To the extent the amount you actually
paid in connection with the exercise of the over-subscription privilege is less than the aggregate subscription price of the maximum number of
unsubscribed shares available to you pursuant to the over-subscription privilege, you will be allocated the number of unsubscribed shares for which you
actually paid in connection with the over-subscription privilege.
Fractional shares resulting from the
exercise of the over-subscription privilege will be eliminated by rounding down to the nearest whole share.
We will deliver certificates
representing shares or credit the account of your record holder with shares of our common stock that you purchased with the over-subscription privilege
as soon as practicable after the expiration of the rights offering.
The purchase of any shares by
Cerberus upon its participation in the rights offering would be effected in a transaction exempt from the registration requirements of the
Securities Act and, accordingly, would not be registered pursuant to the registration statement of which this prospectus forms a part. Any
shares acquired by Cerberus pursuant to its participation in the rights offering would become subject to our existing registration rights
agreement with Cerberus. Any pro rata shares purchased by Cerberus upon the exercise of its basic subscription right will be included
when determining the number of shares purchased in the basic subscription right of the rights offering.
Reasons for the Rights Offering
As the housing market and general
economic conditions continue to improve, the additional capital raised in the rights offering would allow us to participate more fully in these
improving conditions. After assessing current alternatives in both the debt and equity markets and the impact additional leverage may have on the
Company, we determined that an equity offering would be preferable to incurring additional debt. Further, we believe raising capital through this
rights offering as compared to other methods, such as an underwritten public offering of our common stock, has the advantage of providing our
stockholders the opportunity to participate in this transaction on a pro rata basis and, if all stockholders exercise their rights, avoid
dilution of their ownership interest in the Company.
Our sales depend heavily on the
strength of national and local new residential construction and home improvement and remodeling markets, which are showing signs of significant
improvement. Moreover, the governments legislative and administrative measures aimed at restoring liquidity to the credit markets and providing
relief to homeowners facing foreclosure are beginning to show positive results. The overall housing market and economy are also improving, which is
expected to lead to a considerable increase in residential construction and, to a lesser extent, in home improvement activity.
Our results of operations were severely
affected by the recent historic downturn in the housing market, with our net sales decreasing from approximately $4.9 billion for our fiscal year ended
December 30, 2006 to approximately $1.9 billion for the fiscal year ended December 29, 2012. As a result of the weakened demand
environment in the housing market, we implemented a number of initiatives over the past few years to control costs, decrease our operating expenses and
improve profit margins by focusing on higher margin specialty products. These initiatives, combined with overall improvements in the housing market in
2012, are beginning to yield more favorable results. Although we have seen a significant decrease in net income from $15.8 million for the fiscal year
ended December 30, 2006 to a net loss of approximately $38.6 million for the fiscal year ended December 31, 2011, our net loss has narrowed to
approximately $23.0 million for the fiscal year ended December 29, 2012.
We depend on cash flow from operations
and funds available under our revolving credit facilities to finance working capital needs and capital expenditures. For additional information
regarding our financial
23
covenants under our revolving credit facilities, see The instruments governing our indebtedness contain various covenants limiting the discretion of our management in operating our business in the Risk Factors section of this prospectus. If we and our industry continue to recover from the historic housing market downturn, we expect our sales to improve and therefore our need for inventory and our accounts receivable to increase. This increase in working capital is expected to use some of our current excess availability under our revolving credit facilities. While we believe that the amounts available from our revolving credit facilities and other sources will be sufficient to fund our routine operations and capital requirements for at least the next 12 months, we are conducting this rights offering to provide us with a stronger liquidity position and allow us to more fully participate in the improving housing market. We believe that this stronger liquidity position will also give us an advantage over many of our competitors that have less liquidity and less or no access to additional capital, and therefore may not be able to fully participate in the opportunities that arise in a growing market. Assuming we sell the full amount of shares of common stock issuable in connection with the rights offering, we expect to receive net proceeds from the rights offering of approximately $38.8 million, after paying associated expenses.
The net proceeds of the rights offering
will be used to reduce the outstanding balance of our U.S. revolving credit facility. As of December 29, 2012, debt outstanding under our revolving
credit facilities was $171.4 million and excess availability under these facilities was $88.0 million. After giving effect to the rights
offering and the application of the estimated net proceeds therefrom, debt outstanding under our revolving credit facilities as of December 29, 2012
would have been approximately $132.6 million and excess availability would have been approximately $126.8 million. We also intend to
amend and extend our U.S. revolving credit facility. See Summary Recent Developments. Substantially all of our remaining
indebtedness of $206.0 million as of December 29, 2012 consists of mortgage indebtedness which is our obligation, but not an obligation of our
operating subsidiary; the operating subsidiary is the counterparty to substantially all of our trade payables and other ordinary course liabilities. In
addition, such mortgage indebtedness is secured by real property owned by us which we believe has a current fair market value in excess of the related
mortgage debt
Conditions, Withdrawal and Cancellation
There are no conditions to our closing
the rights offering. We reserve the right to withdraw and cancel the rights offering at any time for any reason, including if our board of directors
decides to do so in its sole discretion. If we cancel the rights offering, we will issue a press release notifying stockholders of the
cancellation.
Effect of Rights Offering on Existing
Stockholders
The ownership interests and voting
interests of the existing stockholders who do not exercise their basic subscription rights will be diluted. See Questions and Answers Related to
the Rights Offering.
Method of Exercising Subscription Rights
The exercise of subscription rights is
irrevocable and may not be cancelled or modified. You may exercise your subscription rights as follows:
Subscription by Registered
Holders. If you hold a BlueLinx stock certificate, the number of shares of common stock you may purchase pursuant to your basic subscription right
is indicated on the enclosed rights certificate. You may exercise your subscription rights by properly completing and executing the rights certificate
and forwarding it, together with your full payment, to the subscription agent at the address given below under Subscription Agent and
Information Agent, to be received before 5:00 p.m., New York City time, on March 27, 2013.
Subscription by Beneficial
Owners. If you are a beneficial owner of shares of our common stock that are registered in the name of a broker, custodian bank or other nominee,
you will not receive a rights certificate. Instead, the DTC will issue one subscription right to the nominee record holder for every share of our
common stock that you own at the record date. If you are not contacted by your nominee, you should promptly contact your nominee in order to subscribe
for shares of common stock in the rights offering.
24
Payment Method
Your payment of the subscription price
must be made in U.S. dollars for the full number of shares of common stock that you wish to acquire in the rights offering. Your payment must be
delivered in one of the following ways:
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uncertified personal check payable to Registrar and Transfer Company; or |
|
wire transfer of immediately available funds to accounts maintained by the subscription agent. |
The subscription agent cannot accept
certified checks or bank drafts. Payment received after the expiration of the rights offering will not be honored, and the subscription agent will
return your payment to you, without interest, as soon as practicable. The subscription agent will be deemed to receive payment upon:
|
clearance of any uncertified personal check deposited by the subscription agent; or |
|
receipt by the subscription agent of any wire transfer of immediately available funds. |
If you elect to exercise your
subscription rights, you should ensure that the subscription agent receives your funds before the rights offering expires. Any uncertified personal
check used to pay for shares of common stock must clear the appropriate financial institutions before 5:00 p.m., New York City time, on March
27, 2013, when the rights offering will expire. The clearinghouse may require five or more business days. Accordingly, holders who wish to pay the
subscription price by means of an uncertified personal check should make payment sufficiently in advance of the expiration of the rights offering to
ensure that the payment is received and clears by that date.
You should read the instruction letter
accompanying the rights certificate carefully and strictly follow it. DO NOT SEND RIGHTS CERTIFICATES OR PAYMENTS DIRECTLY TO US. We will not consider
your subscription received until the subscription agent has received delivery of a properly completed and duly executed rights certificate and payment
of the full subscription amount. The risk of delivery of all documents and payments is borne by you or your nominee, not by the subscription agent or
us.
The method of delivery of rights
certificates and payment of the subscription amount to the subscription agent will be at the risk of the holders of subscription rights. If sent by
mail, we recommend that you send those certificates and payments by overnight courier or by registered mail, properly insured, with return receipt
requested, and that you allow a sufficient number of days to ensure delivery to the subscription agent and clearance of payment before the rights
offering expires.
Medallion Guarantee May Be Required
Your signature on your rights
certificate must be guaranteed by an eligible institution, such as a member firm of a registered national securities exchange or a member of the
Financial Industry Regulatory Authority, Inc., or a commercial bank or trust company having an office or correspondent in the United States, subject to
standards and procedures adopted by the subscription agent, unless:
|
you provide on the rights certificate that shares are to be delivered to you as record holder of those subscription rights; or |
|
you are an eligible institution. |
Missing or Incomplete Subscription
Information
If you hold your shares of common stock
in the name of a custodian bank, broker, dealer or other nominee, the nominee will exercise the subscription rights on your behalf in accordance with
your instructions. Your nominee may establish a deadline that may be before the 5:00 p.m., New York City time March 27, 2013 expiration date
that we have established for the rights offering. If you send a payment that is insufficient to purchase the number of shares of common stock you
requested, or if the number of shares you requested is not specified in the forms, the payment received will be applied to exercise your subscription
rights to the fullest extent possible based on the amount of the payment received, subject to the availability of shares under the over-subscription
privilege and the elimination of fractional shares. Any excess subscription payments received by the subscription agent will be returned, without
interest, as soon as practicable following the expiration of the rights offering.
25
Expiration Date and Cancellation Rights
The subscription period, during which
you may exercise your subscription rights, expires at 5:00 p.m., New York City time, on March 27, 2013, which is the expiration of the rights
offering. If you do not exercise your subscription rights before that time, your subscription rights will expire and will no longer be exercisable. We
will not be required to issue shares to you if the subscription agent receives your rights certificate or your subscription payment after that time. We
have the option to extend the rights offering, although we do not presently intend to do so. We may extend the rights offering by giving oral or
written notice to the subscription agent before the rights offering expires. If we elect to extend the rights offering, we will issue a press release
announcing the extension no later than 9:00 a.m., New York City time, on the next business day after the most recently announced expiration date of the
rights offering.
If you hold your shares of common stock
in the name of a broker, dealer, custodian bank or other nominee, the nominee will exercise the subscription rights on your behalf in accordance with
your instructions. Please note that the nominee may establish a deadline that may be before the 5:00 p.m., New York City time, March 27, 2013,
expiration date that we have established for the rights offering.
Determination of Subscription Price
We engaged Moelis to act as our
financial advisor in connection with the evaluation of capital raising alternatives, including the rights offering, and to provide, among other things,
advice with respect to the structure and terms of the rights offering. Our board of directors delegated full authority with respect to the pricing and
other terms of the offering to the Committee. In evaluating the subscription price, the Committee considered, among other things, (i) the current and
historical trading prices of our common stock, (ii) the price at which stockholders might be willing to participate in the rights offering, (iii) the
likely cost of capital from other sources and our ability to access such capital, and (iv) comparable precedent transactions.
After several meetings of the board of
directors at which various strategic alternatives, including the rights offering, were discussed, the Committee approved the subscription price and the
other terms of the rights offering. The Committee met on several occasions separately with the Companys legal and financial advisors without the
members of our board of directors who are affiliated with, or that have a financial interest in, Cerberus Capital Management present to discuss
potential pricing.
The $1.75 subscription price is
not intended to bear any relationship to the market value of our common stock, book value of our assets or our past operations, cash flows, losses,
financial condition, net worth, or any other established criteria used to value securities. You should not consider the subscription price to be an
indication of the fair value of the common stock to be offered in the rights offering.
Subscription Agent and Information Agent
The subscription agent for this
offering is Registrar and Transfer Company. The address to which rights certificates and payments, other than wire transfers, should be mailed or
delivered by overnight courier is provided below. If sent by mail, we recommend that you send documents and payments by registered mail, properly
insured, with return receipt requested, and that you allow a sufficient number of days to ensure delivery to the subscription agent. Do not send or
deliver these materials to BlueLinx.
By
mail: |
By hand or overnight courier: |
|||||
Registrar
and Transfer Company |
Registrar and Transfer Company |
|||||
Attn:
Reorg/Exchange Dept |
Attn: Reorg/Exchange Dept |
|||||
P.O. Box
645 |
10 Commerce Drive |
|||||
Cranford,
New Jersey 07016-0645 |
Cranford, New Jersey 07016 |
If you deliver subscription documents
or rights certificates in a manner different than that described in this prospectus, we may not honor the exercise of your subscription
rights.
You should direct any questions or
requests for assistance concerning the method of subscribing for the shares of common stock or for additional copies of this prospectus to the
information agent, Eagle Rock Proxy Advisors, LLC, by calling (855) 612-6975 toll-free.
Fees and Expenses
We are not charging any fee or sales
commission to issue rights to you or to issue shares to you if you exercise your rights. If you exercise your rights through the record holder of your
shares, you are responsible
26
for paying any commissions, fees, taxes or other expenses your record holder may charge you. We will pay all reasonable fees charged by Registrar and Transfer Company as the subscription agent and Eagle Rock Proxy Advisors, LLC as the information agent.
No Fractional Shares
All shares of common stock will be sold
at a purchase price of $1.75 per whole share. We will not issue fractional shares. Fractional shares resulting from the exercise of the basic
subscription rights and the over-subscription privileges will be eliminated by rounding down to the nearest whole share. Any excess subscription
payments received by the subscription agent will be returned, without interest, as soon as practicable.
Notice to Nominees
If you are a broker, custodian bank or
other nominee holder that holds shares of our common stock for the account of others on the record date, you should notify the beneficial owners of the
shares for whom you are the nominee of the rights offering as soon as possible to learn their intentions with respect to exercising their subscription
rights. You should obtain instructions from the beneficial owners of our common stock. If a registered holder of our common stock so instructs, you
should complete the rights certificate and submit it to the subscription agent with the proper subscription payment by the expiration date. You may
exercise the number of subscription rights to which all beneficial owners in the aggregate otherwise would have been entitled had they been direct
holders of our common stock on the record date, provided that you, as a nominee record holder, make a proper showing to the subscription agent by
submitting the form entitled Nominee Holder Certification, which is provided with your rights offering materials. If you did not receive
this form, you should contact the subscription agent to request a copy.
Beneficial Owners
If you are a beneficial owner of shares
of our common stock and will receive your subscription rights through a broker, custodian bank or other nominee, we will ask your nominee to notify you
of the rights offering. If you wish to exercise your subscription rights, you will need to have your nominee act for you, as described above. To
indicate your decision with respect to your subscription rights, you should follow the instructions of your nominee. If you wish instead to obtain a
separate rights certificate, you should contact your nominee as soon as possible and request that a rights certificate be issued to you. You should
contact your nominee if you do not receive notice of the rights offering, but you believe you are entitled to participate in the rights offering. We
are not responsible if you do not receive the notice by mail or otherwise from your nominee or if you receive notice without sufficient time to respond
to your nominee by the deadline established by your nominee, which may be before the 5:00 p.m., New York City time, March 27, 2013, expiration
date.
Transferability of Subscription Rights
The subscription rights are
non-transferable.
Validity of Subscriptions
We will resolve all questions regarding
the validity and form of the exercise of your subscription rights, including time of receipt and eligibility to participate in the rights offering. Our
determination will be final and binding. Once made, subscriptions and directions are irrevocable, and we will not accept any alternative, conditional
or contingent subscriptions or directions. We reserve the absolute right to reject any subscriptions or directions not properly submitted or the
acceptance of which would be unlawful. You must resolve any irregularities in connection with your subscriptions before the subscription period
expires, unless we waive them in our sole discretion. Neither we nor the subscription agent is under any duty to notify you or your representative of
defects in your subscriptions. A subscription will be considered accepted, subject to our right to withdraw or cancel the rights offering, only when
the subscription agent receives a properly completed and duly executed rights certificate and any other required documents and the full subscription
payment. Our interpretations of the terms and conditions of the rights offering will be final and binding.
27
Escrow Arrangements; Return of Funds
The subscription agent will hold funds
received in payment for shares in a segregated account pending completion of the rights offering. The subscription agent will hold this money in escrow
until the rights offering is completed or is withdrawn and cancelled. If the rights offering is cancelled for any reason, all subscription payments
received by the subscription agent will be returned, without interest or penalty, as soon as practicable.
Stockholder Rights
You will have no rights as a holder of
the shares of our common stock you purchase in the rights offering until certificates representing the shares of our common stock are issued to you, or
your account at your nominee is credited with the shares of our common stock purchased in the rights offering.
No Revocation or Change
Once you submit the rights certificate
or have instructed your nominee of your subscription request, you are not allowed to revoke or change the exercise or request a refund of monies paid.
All exercises of subscription rights are irrevocable, even if you learn information about us that you consider to be unfavorable. You should not
exercise your subscription rights unless you are certain that you wish to purchase shares at the subscription price.
No Recommendation to Rights Holders
Our board of directors is making no
recommendation regarding your exercise of the subscription rights. Stockholders who exercise subscription rights risk investment loss on new money
invested. The market price for our common stock may decline to a price that is less than the subscription price and, if you purchase shares of common
stock at the subscription price, you may not be able to sell the shares in the future at the same price or a higher price. You should make your
decision based on your assessment of our business and financial condition, our prospects for the future and the terms of this rights offering. Please
see Risk Factors for a discussion of some of the risks involved in investing in our common stock.
Listing
The subscription rights are
non-transferable and will not be listed for trading on the New York Stock Exchange or any other stock exchange or market. Shares of our common stock
are, and we expect that the shares of common stock to be issued in the rights offering will be, traded on The New York Stock Exchange under the symbol
BXC.
Shares of Our Common Stock Outstanding After the Rights
Offering
As of the record date,
63,766,566 shares of our common stock were issued and outstanding. If all of the subscription rights are exercised in full by our stockholders,
we expect to issue an additional 22,857,142 shares of our common stock after the closing of the rights offering, for a total of
86,623,708 shares of common stock issued and outstanding. This assumes that, during the rights offering, we issue no other shares of our common
stock and that no options for our common stock are exercised.
Dilutive Effect of the Rights Offering
On the record date for the rights
offering, Cerberus beneficially owned approximately 52% of our outstanding common stock. As a stockholder of the Company as of the record date,
Cerberus will have the right to subscribe for and purchase shares of our common stock under the basic subscription right of the rights offering and
have the right to participate in the over-subscription. If Cerberus is the only holder of rights who exercises its rights in the rights offering, the
Company will issue an aggregate of 22,857,142 shares of common stock to Cerberus. Under such circumstances, Cerberus ownership percentage
of our outstanding common stock would increase to approximately 65% after giving effect to this rights offering. Except as a result of any
increase in its ownership of common stock, Cerberus will not obtain any additional governance or control rights as a result of the rights offering.
Your interests as a holder of common stock may differ from the interests of Cerberus.
28
The following summary describes the
material U.S. federal income tax consequences of the receipt and exercise (or expiration) of the subscription rights or, if applicable, the
over-subscription privilege, acquired through the rights offering and owning and disposing of the shares of common stock received upon exercise of the
subscription rights and, insofar as it relates to matters of U.S. federal income tax law and regulations or legal conclusions with respect thereto,
constitutes the opinion of our tax counsel, Troutman Sanders LLP. This summary is based upon the Internal Revenue Code of 1986, as amended (the
Code), Treasury regulations promulgated thereunder and administrative and judicial interpretations thereof, all as currently in effect and
all of which are subject to differing interpretations or to change, possibly with retroactive effect. No assurance can be given that the Internal
Revenue Service (IRS) would not assert, or that a court would not sustain, a position contrary to any of the tax consequences described
below.
This summary is for general information
only and does not purport to discuss all aspects of U.S. federal income taxation that may be important to a particular holder in light of its
particular circumstances or to holders that may be subject to special tax rules, including, but not limited to, partnerships or other pass-through
entities, banks and other financial institutions, tax-exempt entities, employee stock ownership plans, certain former citizens or residents of the
United States, insurance companies, regulated investment companies, real estate investment trusts, dealers in securities or currencies, brokers,
traders in securities that have elected to use the mark-to-market method of accounting, persons holding subscription rights or shares of common stock
as part of an integrated transaction, including a straddle, hedge, constructive sale or conversion
transaction, persons whose functional currency for tax purposes is not the U.S. dollar, and persons subject to the alternative minimum tax
provisions of the Code.
This summary applies to you only if you
are a U.S. holder (as defined below) and receive your subscription rights in the rights offering, and you hold your subscription rights or shares of
common stock issued to you upon exercise of the subscription rights or, if applicable, the over-subscription privilege, as capital assets for tax
purposes. This summary does not apply to you if you are not a U.S. holder.
We have not sought, and will not seek,
a ruling from the IRS regarding the federal income tax consequences of the rights offering or the related share issuances. The following summary does
not address the tax consequences of the rights offering or the related share issuance under foreign, state, or local tax laws.
You are a U.S. holder if you are a
beneficial owner of subscription rights or common stock and you are:
|
An individual who is a citizen or resident of the United States for U.S. federal income tax purposes; |
|
A corporation (or other business entity treated as a corporation for U.S. federal income tax purposes) created or organized in or under the laws of the United Sates, any state thereof or the District of Columbia; |
|
An estate the income of which is subject to U.S. federal income tax regardless of its source; or |
|
A trust (a) if a court within the United States can exercise primary supervision over its administration and one or more U.S. persons are authorized to control all substantial decisions of the trust or (b) that has a valid election in effect under applicable Treasury Regulations to be treated as a U.S. person. |
If a partnership (including any entity
treated as a partnership for U.S. federal income tax purposes) receives the subscription rights or holds the common stock received upon exercise of the
subscription rights or, if applicable, the over-subscription privilege, the tax treatment of a partner in such partnership generally will depend upon
the status of the partner and the activities of the partnership. Such a partner or partnership is urged to consult its own tax advisor as to the U.S.
federal income tax consequences of receiving and exercising the subscription rights and acquiring, holding or disposing of our common
shares.
ACCORDINGLY, EACH RECIPIENT OF RIGHTS
IN THE RIGHTS OFFERING SHOULD CONSULT THE RECIPIENTS OWN TAX ADVISOR WITH RESPECT TO THE TAX CONSEQUENCES OF THE RIGHTS OFFERING AND THE RELATED
SHARE ISSUANCES THAT MAY RESULT FROM SUCH RECIPIENTS PARTICULAR CIRCUMSTANCES.
29
Taxation of Subscription Rights
Receipt of Subscription Rights
Your receipt of subscription rights
pursuant to the rights offering will not be treated as a taxable distribution with respect to your existing shares of common stock for U.S. federal
income tax purposes. Under Section 305 of the Code, a stockholder who receives a right to acquire shares will, in certain circumstances, be treated as
having received a taxable dividend in an amount equal to the value of such right. A common stockholder who receives a right to acquire shares of common
stock generally will be treated as having received a taxable dividend if such stockholders proportionate interest in the earnings and profits or
assets of the corporation is increased and any other stockholder receives a distribution of cash or other property. A common stockholder who receives a
right to acquire shares of common stock will be treated as having received a taxable dividend if the distribution is treated as part of a
disproportionate distribution. A disproportionate distribution of stock or stock rights occurs when a distribution (or series of
distributions) from a corporation results in (a) an increase in the stockholders proportionate interest in the earnings and profits or assets of
the corporation and (b) the receipt by other stockholders of cash or other property. For purposes of the above, stockholder includes
holders of warrants, options and convertible securities. We do not believe, however, that a disproportionate distribution will occur and, therefore,
the receipt of subscription rights will not be taxable to a stockholder.
Tax Basis in the Subscription
Rights
If the fair market value of the
subscription rights you receive is less than 15% of the fair market value of your existing shares of common stock on the date you receive the
subscription rights, the subscription rights will be allocated a zero basis for U.S. federal income tax purposes, unless you elect to allocate your
basis in your existing shares of common stock between your existing shares of common stock and the subscription rights in proportion to the relative
fair market values of the existing shares of common stock and the subscription rights determined on the date of receipt of the subscription rights. If
you choose to allocate basis between your existing shares of common stock and the subscription rights, you must make this election on a statement
included with your tax return for the taxable year in which you receive the subscription rights. Such an election is irrevocable.
However, if the fair market value of
the subscription rights you receive is 15% or more of the fair market value of your existing shares of common stock on the date you receive the
subscription rights, then you must allocate your basis in your existing shares of common stock between your existing shares of common stock and the
subscription rights you receive in proportion to their fair market values determined on the date you receive the subscription rights. The fair market
value of the subscription rights on the date the subscription rights will be distributed is uncertain. In determining the fair market value of the
subscription rights, you should consider all relevant facts and circumstances, including the trading price thereof.
Exercise of Subscription Rights
You will not recognize gain or loss on
the exercise of a subscription right. Your tax basis in a new share of common stock acquired when you exercise a subscription right will be equal to
your adjusted tax basis in the subscription right, if any, plus the subscription price. The holding period of a share of common stock acquired when you
exercise your subscription rights will begin on the date of exercise.
Expiration of Subscription Rights
If you allow subscription rights
received in the rights offering to expire, you will not recognize any gain or loss for U.S. federal income tax purposes, and you will re-allocate any
portion of the tax basis in your existing shares of common stock previously allocated to the subscription rights that have expired to the existing
shares of common stock.
Taxation of Shares of Common Stock Acquired upon Exercise of
Subscription Rights
Distributions
Distributions with respect to shares of
common stock acquired upon exercise of subscription rights will be taxable as dividend income when actually or constructively received to the extent of
our current or accumulated earnings and profits as determined for U.S. federal income tax purposes. To the extent that the
30
amount of a distribution exceeds our current and accumulated earnings and profits, such distribution will be treated first as a tax-free return of capital to the extent of your adjusted tax basis in such shares of common stock and thereafter as capital gain.
Dispositions
If you sell or otherwise dispose of the
shares of common stock acquired upon exercise of the subscription rights, you will generally recognize capital gain or loss equal to the difference
between the amount realized and your adjusted tax basis in the shares of common stock. Such capital gain or loss will be long-term capital gain or loss
if your holding period for the shares of common stock is more than one year. Long-term capital gain of an individual is generally taxed at favorable
rates. The deductibility of capital losses is subject to limitations.
Recent Legislation Relating to Foreign
Accounts
Recently enacted legislation may impose
withholding taxes on certain types of payments made to foreign financial institutions and certain other non-U.S. entities. The legislation
imposes a 30% withholding tax on dividends paid after December 31, 2013 on, or gross proceeds paid after December 31, 2014 from the sale or other
disposition of, our common stock paid to a foreign financial institution unless the foreign financial institution enters into an agreement with the
U.S. Treasury to among other things, undertake to identify accounts held by certain U.S. persons or U.S.-owned foreign entities, annually report
certain information about such accounts and withhold 30% on payments to account holders whose actions prevent it from complying with these reporting
and other requirements. In addition, the legislation imposes a 30% withholding tax on the same types of payments to a foreign non-financial entity
unless the entity certifies that it does not have any substantial U.S. owners or furnishes identifying information regarding each substantial U.S.
owner. U.S. holders should consult their tax advisors regarding this legislation.
Health Care and Reconciliation Act of
2010
On March 30, 2010, President Obama
signed into law the Health Care and Reconciliation Act of 2010, which requires certain U.S. stockholders who are individuals, estates or trusts to pay
a 3.8% tax on, among other things, dividends on and capital gains from the sale or other disposition of stock for taxable years beginning after
December 31, 2012. U.S. holders should consult their tax advisors regarding the effect, if any, of this legislation on their ownership and disposition
of our common stock.
Information Reporting and Backup
Withholding
Payments made to you of proceeds from
the sale of the shares of common stock acquired upon exercise of the subscription rights may be subject to information reporting and/or backup
withholding with respect to dividend payments on or the gross proceeds from the disposition of our common stock acquired through the exercise of
subscription rights. Backup withholding may apply under certain circumstances if you (1) fail to furnish your social security or other taxpayer
identification number (TIN), (2) furnish an incorrect TIN, (3) fail to report interest or dividends properly, or (4) fail to provide a
certified statement, signed under penalty of perjury, that the TIN provided is correct, that you are not subject to backup withholding and that you are
a U.S. person. Any amount withheld from a payment under the backup withholding rules is allowable as a credit against (and may entitle you to a refund
with respect to) your U.S. federal income tax liability, provided that the required information is furnished to the IRS. Certain persons are exempt
from backup withholding, including corporations and financial institutions. You are urged to consult your own tax advisor as to your qualification for
exemption from backup withholding and the procedure for obtaining such exemption.
31
As soon as practicable after the record
date for the rights offering, we will distribute the subscription rights and rights certificates to individuals who owned shares of our common stock at
5:00 p.m. New York City time on March 4, 2013. If you wish to exercise your subscription rights and purchase shares of common stock, you should
complete the rights certificate and return it with payment for the shares to the subscription agent at the following address:
By
mail: |
By hand or overnight courier: |
|||||
Registrar
and Transfer Company |
Registrar and Transfer Company |
|||||
Attn:
Reorg/Exchange Dept |
Attn: Reorg/Exchange Dept |
|||||
P.O. Box
645 |
10 Commerce Drive |
|||||
Cranford,
New Jersey 07016-0645 |
Cranford, New Jersey 07016 |
See The Rights Offering
Method of Exercising Subscription Rights. If you have any questions or require assistance regarding the method of exercising your subscription
rights or requests for additional copies of this document or the Instruction for Use of BlueLinx Subscription Rights Certificates, you should contact
our information agent, Eagle Rock Proxy Advisors, LLC, by calling (855) 612-6975 toll-free.
We have agreed to pay the subscription
agent and information agent customary fees plus certain expenses in connection with the rights offering. Other than as described herein, we are not
aware of any existing agreements between any stockholder, broker, dealer, underwriter or agreement relating to the sale or distribution of the stock
underlying the rights.
Ernst & Young LLP, independent
registered public accounting firm, has audited our consolidated financial statements included in our Annual Report on Form 10-K for the year ended
December 29, 2012, and the effectiveness of our internal control over financial reporting as of December 29, 2012, as set forth in their
reports, which are incorporated by reference in this prospectus and elsewhere in the registration statement. Our financial statements are incorporated
by reference in reliance on Ernst & Young LLPs reports, given on their authority as experts in accounting and auditing.
Certain legal matters with respect to
the securities offered in this prospectus and the material U.S. federal income tax consequences of the rights offering have been passed upon for us by
Troutman Sanders LLP, Atlanta, Georgia.
We file annual, quarterly and current
reports, proxy statements and other information with the SEC, which allows us to incorporate by reference the information we file with it.
This means that we can disclose important information to you by referring you to those documents filed separately with the SEC. The information we
incorporate by reference is an important part of this prospectus. We incorporate by reference the documents listed below, filed separately with the
SEC, except to the extent that any information contained in those documents is deemed furnished in accordance with SEC
rules:
|
Annual Report on Form 10-K for the year ended December 29, 2012; |
|
Current Reports on Form 8-K filed on January 4, 2013 and January 28, 2013; and |
|
The description of our Common Stock contained in our registration statement on Form 8-A filed with the Commission on December 13, 2004, as amended on August 5, 2011 and any amendments to such registration statement or any other report that we may file in the future for the purpose of updating such description. |
Any statement contained in a document
that is incorporated by reference will be modified or superseded for all purposes to the extent that a statement contained in this prospectus modifies
or is contrary to that previous statement. Any statement so modified or superseded will not be deemed a part of this prospectus except as so modified
or superseded.
32
Upon request, we will provide to each
person, including any beneficial owner, to whom a prospectus is delivered, a copy of any or all of the reports or documents that have been incorporated
by reference in the prospectus contained in the registration statement, but not delivered with the prospectus. You may request a copy of any of these
filings at no cost, by writing or telephoning us at the following address or telephone number:
BlueLinx Holdings Inc.
4300 Wildwood Parkway
Atlanta, Georgia 30339
(770) 953-7000
4300 Wildwood Parkway
Atlanta, Georgia 30339
(770) 953-7000
We have filed with the SEC a
registration statement under the Securities Act with respect to the subscription rights and underlying shares of common stock offered hereby. As
permitted by the rules and regulations of the SEC, this prospectus does not contain all the information set forth in the registration statement. Such
information can be examined without charge at the public reference facilities of the SEC located at 100 F. Street, N.E., Washington, D.C. 20549, and
copies of such material can be obtained from the SEC at prescribed rates. The SEC telephone number is 1-800-SEC-0330. In addition, the SEC maintains a
web site (www.sec.gov) that contains periodic reports, proxy and information statements and other information regarding registrants that file
electronically with the SEC, including BlueLinx. The statements contained in this prospectus as to the contents of any contract or other document filed
as an exhibit to the registration statement are, of necessity, brief descriptions of the material terms of, and should be read in conjunction with,
such contract or document.
In addition, we make available, without
charge, through our website, www.bluelinxco.com, electronic copies of our filings with the SEC, including copies of annual reports on Form 10-K,
quarterly reports on Form 10-Q, current reports on Form 8-K, and amendments to these filings, if any. Information on our website should not be
considered a part of this prospectus, and we do not intend to incorporate into this prospectus any information contained in the
website.
33
UP TO 22,857,142 SHARES
OF COMMON STOCK ISSUABLE UPON THE EXERCISE
OF SUBSCRIPTION RIGHTS AT $1.75 PER SHARE
OF COMMON STOCK ISSUABLE UPON THE EXERCISE
OF SUBSCRIPTION RIGHTS AT $1.75 PER SHARE
PRELIMINARY PROSPECTUS
, 2013
, 2013
PART II
INFORMATION NOT REQUIRED IN
PROSPECTUS
Item 13. Other Expenses of Issuance and
Distribution.
SEC
registration fee |
$ | 5,456 | ||||
*Accounting
fees and expenses |
50,000 | |||||
*Legal fees
and expenses |
150,000 | |||||
*Printing and
engraving expenses |
60,000 | |||||
*Subscription
agent, information agent and registrar fees and expenses |
20,000 | |||||
*Miscellaneous |
14,544 | |||||
*Total
|
$ | 300,000 |
* |
Estimated pursuant to Item 511 of Regulation S-K. |
Item 14. Indemnification of Directors and
Officers.
Indemnification Under the Delaware General Corporation
Law
Section 145 of the DGCL authorizes a
corporation to indemnify any person who was or is a party, or is threatened to be made a party, to any threatened, pending or completed action, suit or
proceeding, whether civil, criminal, administrative or investigative, by reason of the fact that the person is or was a director, officer, employee or
agent of the corporation, or is or was serving at the request of the corporation as a director, officer, employee or agent of another corporation,
partnership, joint venture, trust or other enterprise, against expenses, including attorneys fees, judgments, fines and amounts paid in
settlement actually and reasonably incurred by the person in connection with such action, suit or proceeding, if the person acted in good faith and in
a manner the person reasonably believed to be in, or not opposed to, the best interests of the corporation and, with respect to any criminal action or
proceeding, had no reasonable cause to believe the persons conduct was unlawful. In addition, the DGCL does not permit indemnification in any
threatened, pending or completed action or suit by or in the right of the corporation in respect of any claim, issue or matter as to which such person
shall have been adjudged to be liable to the corporation, unless and only to the extent that the court in which such action or suit was brought shall
determine upon application that, despite the adjudication of liability, but in view of all the circumstances of the case, such person is fairly and
reasonably entitled to indemnity for such expenses, which such court shall deem proper. To the extent that a present or former director or officer of a
corporation has been successful on the merits or otherwise in defense of any action, suit or proceeding referred to above, or in defense of any claim,
issue or matter, such person shall be indemnified against expenses, including attorneys fees, actually and reasonably incurred by such person.
Indemnity is mandatory to the extent a claim, issue or matter has been successfully defended. The DGCL also allows a corporation to provide for the
elimination or limit of the personal liability of a director to the corporation or its stockholders for monetary damages for breach of fiduciary duty
as a director, provided that such provision shall not eliminate or limit the liability of a director
(1) for any breach of the
directors duty of loyalty to the corporation or its stockholders,
(2) for acts or omissions not in good
faith or which involve intentional misconduct or a knowing violation of law,
(3) for unlawful payments of dividends
or unlawful stock purchases or redemptions, or
(4) for any transaction from which the
director derived an improper personal benefit.
These provisions will not limit the
liability of directors or officers under the federal securities laws of the United States.
Indemnification Under the Companys Second Amended and
Restated Certificate of Incorporation (the Charter)
The Fifth Article of the Companys
Charter provides that the personal liability of the directors of the Company shall be eliminated to the fullest extent permitted by the DGCL
(including, without limitation, paragraph (7) of subsection (b) of Section 102 thereof), as the same may be amended from time to time.
No
II-1
amendment or repeal of the Fifth Article shall apply to or have any effect on the liability or alleged liability of any director of the Corporation for or with respect to any acts or omissions of such director occurring prior to such amendment or repeal.
The Sixth Article of the Companys
Charter provides that the Company shall indemnify and hold harmless, and advance expenses, to the fullest extent permitted by applicable law as it
presently exists or may hereafter be amended, any person (a Covered Person) who (i) was or is a party or is threatened to be made a party
to any threatened, pending or completed action, suit or proceeding, whether civil, criminal, administrative or investigative (other than an action by
or in the right of the Company) by reason of the fact that he or she, or a person for whom he or she is the legal representative, is or was a director
or officer of the Company or, while a director or officer of the Company, is or was serving at the request of the Company as a director, officer,
employee or agent of another corporation or of a partnership, joint venture, trust, nonprofit entity or other enterprise, including service with
respect to employee benefit plans, against all liability and loss suffered and expenses (including attorneys fees) judgments, fines and amounts
paid in settlement actually and reasonably incurred by such Covered Person in connection with such action suit or proceeding if he or she acted in good
faith and in a manner he or she reasonably believed to be in or not opposed to the best interests of the Company, and, with respect to any criminal
action or proceeding, had no reasonable cause to believe his or her conduct was unlawful or (ii) was or is a party or is threatened to be made a party
to any threatened, pending or completed action or suit by or in the right of the Company to procure a judgment in its favor by reason of the fact that
he or she, or a person for whom he or she is the legal representative, is or was a director or officer of the Company or, while a director or officer
of the Company, is or was serving at the request of the Company as a director, officer, employee or agent of another corporation or of a partnership,
joint venture, trust, nonprofit entity or other enterprise, including service with respect to employee benefit plans, against all liability and loss
suffered and expenses (including attorneys fees) actually and reasonably incurred by such Covered Person in connection with the defense or
settlement of such action or suit if he or she acted in good faith and in a manner he or she reasonably believed to be in or not opposed to the best
interests of the Company, except as otherwise provided by law. Notwithstanding the preceding sentence, except as otherwise provided in the Amended and
Restated Bylaws of the Company (as the same may provide from time to time) (the Amended and Restated By-laws), the Company shall be
required to indemnify a Covered Person in connection with a proceeding (or part thereof) commenced by such Covered Person only if the commencement of
such proceeding (or part thereof) by the Covered Person was authorized by the Amended and Restated By-laws, in any written agreement with the Company,
or in the specific case by the Board of Directors or stockholders; provided, however, that if successful in whole or in part in any suit for the
advancement of expenses or indemnification hereunder, the Covered Person shall be entitled to payment of the expense of litigating such suit. Nothing
in Article VI shall affect any rights to indemnification or advancement of expenses to which directors, officers, employees or agents of the Company
otherwise may be entitled under the Amended and Restated By-laws, any written agreement with the Company or otherwise. The Company may, to the extent
authorized from time to time by the Board of Directors or stockholders, grant rights to indemnification and to the advancement of expenses to any
employee or agent of the Company to the fullest extent of the provisions of Article VI with respect to the indemnification and advancement of expenses
of directors and officers of the Company. Without limiting the generality or the effect of the foregoing, the Company may enter into one or more
agreements with any person that provides for indemnification greater or different than that provided in Article VI. No amendment or repeal of this
Article VI shall adversely affect any right or protection existing thereunder or pursuant thereto immediately prior to such amendment or
repeal.
Indemnification Under the Amended and Restated
By-laws
Section 5.01 of Article V of the
Companys Amended and Restated By-laws provides that the Company shall indemnify and hold harmless, and advance expenses, to the fullest extent
permitted by applicable law as it presently exists or may hereafter be amended, any person (a Covered Person) who (1) was or is a party or
is threatened to be made a party to any threatened, pending or completed action, suit or proceeding, whether civil, criminal, administrative or
investigative (other than an action by or in the right of the Company) by reason of the fact that he or she, or a person for whom he or she is the
legal representative, is or was a director or officer of the Company or, while a director or officer of the Company, is or was serving at the request
of the Company as a director, officer, employee or agent of another corporation or of a partnership, joint venture, trust, nonprofit entity or other
enterprise, including service with respect to employee benefit plans, against all liability and loss suffered and expenses (including attorneys
fees) judgments, fines and
II-2
amounts paid in settlement actually and reasonably incurred by such Covered Person in connection with such action suit or proceeding if he or she acted in good faith and in a manner he or she reasonably believed to be in or not opposed to the best interests of the Company, and, with respect to any criminal action or proceeding, had no reasonable cause to believe his or her conduct was unlawful or (2) was or is a party or is threatened to be made a party to any threatened, pending or completed action or suit by or in the right of the Company to procure a judgment in its favor by reason of the fact that he or she, or a person for whom he or she is the legal representative, is or was a director or officer of the Company or, while a director or officer of the Company, is or was serving at the request of the Company as a director, officer, employee or agent of another corporation or of a partnership, joint venture, trust, nonprofit entity or other enterprise, including service with respect to employee benefit plans, against all liability and loss suffered and expenses (including attorneys fees) actually and reasonably incurred by such Covered Person in connection with the defense or settlement of such action or suit if he or she acted in good faith and in a manner he or she reasonably believed to be in or not opposed to the best interests of the Company, except as otherwise provided by law. Notwithstanding the preceding sentence, except as otherwise provided in the Amended and Restated By-laws, the Company shall be required to indemnify a Covered Person in connection with a proceeding (or part thereof) commenced by such Covered Person only if the commencement of such proceeding (or part thereof) by the Covered Person was authorized by the Amended and Restated By-laws, in any written agreement with the Company, or in the specific case by the Board or stockholders; provided, however, that if successful in whole or in part in any suit for the advancement of expenses or indemnification hereunder, the Covered Person shall be entitled to payment of the expense of litigating such suit. Nothing in Article V shall affect any rights to indemnification or advancement of expenses to which directors, officers, employees or agents of the Company otherwise may be entitled under the Amended and Restated By-laws, any written agreement with the Company or otherwise. The Company may, to the extent authorized from time to time by the Board or stockholders, grant rights to indemnification and to the advancement of expenses to any employee or agent of the Company to the fullest extent of the provisions of Article V with respect to the indemnification and advancement of expenses of directors and officers of the Company. Without limiting the generality or the effect of the foregoing, the Company may enter into one or more agreements with any person that provides for indemnification greater or different than that provided in Article V. No amendment or repeal of Article V shall adversely affect any right or protection existing thereunder or pursuant thereto immediately prior to such amendment or repeal.
Section 5.02 of Article V of the
Companys Amended and Restated By-laws provides that it is the intent of Article V to require the Company, unless otherwise determined by the
Board or as provided for in Section 5.01 in the case of a proceeding (or part thereof) commenced by a Covered Person, to indemnify the Covered Persons
for judgments, fines, penalties, amounts paid in settlement and expenses (including attorneys fees), and to advance expenses to such persons, in
each and every circumstance in which such indemnification and such advancement of expenses could lawfully be permitted by express provision of the
Amended and Restated By-laws, and the indemnification and expense advancement provided by Article V shall not be limited by the absence of an express
recital of such circumstances.
Section 5.03 of Article V of the
Companys Amended and Restated By-laws provides that indemnification pursuant to the Amended and Restated By-laws shall inure to the benefit of
the heirs, executors, administrators and personal representatives of the Covered Persons.
Section 5.04 of Article V of the
Companys Amended and Restated By-laws provides that the Company shall to the fullest extent not prohibited by applicable law pay the expenses
(including attorneys fees) incurred by a Covered Person in defending any proceeding in advance of its final disposition, provided,
however, that, to the extent required by law, such payment of expenses in advance of the final disposition of the proceeding shall be made only
upon receipt of an undertaking by the Covered Person to repay all amounts advanced if it should be ultimately determined that the Covered Person is not
entitled to be indemnified under Article V or otherwise.
Section 5.05 of Article V of the
Companys Amended and Restated By-laws provides that if a claim for indemnification (following the final disposition of such action, suit or
proceeding) or advancement of expenses under Article V is not paid in full within thirty days after a written claim therefor by the Covered Person has
been received by the Company, the Covered Person may file suit to recover the unpaid amount of such claim and, if successful in whole or in part, shall
be entitled to be paid the expense of prosecuting such claim. In any such action the Company shall have the burden of proving that the Covered Person
is not entitled to the requested indemnification or advancement of expenses under applicable law.
II-3
Section 5.06 of Article V of the
Companys Amended and Restated By-laws provides that the rights conferred on any Covered Person by Article V shall not be exclusive of any other
rights which such Covered Person may have or hereafter acquire under any statute, provision of the Charter, the Amended and Restated By-laws,
agreement, vote of stockholders or disinterested directors or otherwise.
Section 5.07 of Article V of the
Companys Amended and Restated By-laws provides that the Companys obligation, if any, to indemnify or to advance expenses to any Covered
Person who was or is serving at its request as a director, officer, employee or agent of another corporation, partnership, joint venture, trust,
enterprise or nonprofit entity shall be reduced by any amount such Covered Person may collect as indemnification or advancement of expenses from such
other corporation, partnership, joint venture, trust, enterprise or non-profit entity.
Indemnification Under Indemnification Agreements With Certain
of Our Directors and Executive Officers
We have entered into Indemnification
Agreements with each of our directors and executive officers pursuant to which the Company has agreed to provide for the advancement of expenses and
indemnification of, to the fullest extent permitted under Delaware law, as the same may be amended from time to time, for each person party to an
Indemnification Agreement.
Item 15. Recent Sales of Unregistered
Securities.
On July 28, 2011, the Company sold an
aggregate of 17,660,077 shares of its common stock to Cerberus and affiliates of Stadium Capital Management, LLC at a subscription price of $2.10 per
share upon exercise of subscription rights issued pro rata to holders of the Companys common stock in connection with its previous rights
offering. The sale of such shares was made in reliance on the exemption from registration of Section 4(2) of the Securities Act of 1933, as amended.
There were no underwriting discounts or commissions paid in connection with such sales.
Item 16. Exhibits and Financial Statement
Schedules.
A list of exhibits filed with this
registration statement on Form S-1 is set forth on the Exhibit Index and is incorporated herein by reference.
Item 17. Undertakings.
The undersigned Registrant hereby
undertakes:
(1) To file, during any period in which
offers or sales are being made, a post-effective amendment to this registration statement:
(i) To include any prospectus required
by Section 10(a)(3) of the Securities Act of 1933;
(ii) To reflect in the prospectus any
facts or events arising after the effective date of the registration statement (or the most recent post-effective amendment thereof) which,
individually or in the aggregate, represent a fundamental change in the information set forth in the registration statement. Notwithstanding the
foregoing, any increase or decrease in volume of securities offered (if the total dollar value of securities offered would not exceed that which was
registered) and any deviation from the low or high end of the estimated maximum offering range may be reflected in the form of prospectus filed with
the Commission pursuant to Rule 424(b) if, in the aggregate, the changes in volume and price represent no more than a 20 percent change in the maximum
aggregate offering price set forth in the Calculation of Registration Fee table in the effective registration statement;
(iii) To include any material
information with respect to the plan of distribution not previously disclosed in the registration statement or any material change to such information
in the registration statement.
(2) That, for the purpose of
determining any liability under the Securities Act of 1933, each such post-effective amendment shall be deemed to be a new registration statement
relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering
thereof.
(3) To remove from registration by
means of a post-effective amendment any of the securities being registered which remain unsold at the termination of the offering.
II-4
(4) That, for the purpose of
determining liability under the Securities Act of 1933 to any purchaser, each prospectus filed pursuant to Rule 424(b) as part of a registration
statement relating to an offering, other than registration statements relying on Rule 430B or other than prospectuses filed in reliance on Rule 430A,
shall be deemed to be part of and included in the registration statement as of the date it is first used after effectiveness. Provided, however, that
no statement made in a registration statement or prospectus that is part of the registration statement or made in a document incorporated or deemed
incorporated by reference into the registration statement or prospectus that is part of the registration statement will, as to a purchaser with a time
of contract of sale prior to such first use, supersede or modify any statement that was made in the registration statement or prospectus that was part
of the registration statement or made in any such document immediately prior to such date of first use.
(5) That, for the purpose of
determining liability of the registrant under the Securities Act of 1933 to any purchaser in the initial distribution of the securities: The
undersigned registrant undertakes that in a primary offering of securities of the undersigned registrant pursuant to this registration statement,
regardless of the underwriting method used to sell the securities to the purchaser, if the securities are offered or sold to such purchaser by means of
any of the following communications, the undersigned registrant will be a seller to the purchaser and will be considered to offer or sell such
securities to such purchaser:
(i) Any preliminary prospectus or
prospectus of the undersigned registrant relating to the offering required to be filed pursuant to Rule 424;
(ii) Any free writing prospectus
relating to the offering prepared by or on behalf of the undersigned registrant or used or referred to by the undersigned registrant;
(iii) The portion of any other free
writing prospectus relating to the offering containing material information about the undersigned registrant or its securities provided by or on behalf
of the undersigned registrant; and
(iv) Any other communication that is an
offer in the offering made by the undersigned registrant to the purchaser.
(6) Insofar as indemnification for
liabilities arising under the Securities Act of 1933 may be permitted to directors, officers and controlling persons of the registrant pursuant to the
foregoing provisions, or otherwise, the registrant has been advised that in the opinion of the Securities and Exchange Commission such indemnification
is against public policy as expressed in the Act, and is, therefore, unenforceable. In the event that a claim for indemnification against such
liabilities (other than the payment by the registrant of expenses incurred or paid by a director, officer or controlling person of the registrant in
the successful defense of any action, suit or proceeding) is asserted by such director, officer or controlling person in connection with the securities
being registered, the registrant will, unless in the opinion of its counsel the matter has been settled by controlling precedent, submit to a court of
appropriate jurisdiction the question whether such indemnification by it is against public policy as expressed in the Act and will be governed by the
final adjudication of such issue.
II-5
SIGNATURES
Pursuant to the requirements of the
Securities Act of 1933, as amended, the registrant has duly caused this registration statement to be signed on its behalf by the undersigned, thereunto
duly authorized, in the City of Atlanta, State of Georgia, on February 26, 2013.
BLUELINX HOLDINGS INC. |
||||||
By: /s/ George R. Judd |
||||||
George R. Judd President and Chief Executive Officer: (Principal Executive Officer) |
Pursuant to the requirements of the
Securities Act of 1933, as amended, this registration statement has been signed by the following persons in the capacities and on the dates
indicated.
Signature |
Title | Date | ||||||||
---|---|---|---|---|---|---|---|---|---|---|
/s/ George R.
Judd George R. Judd |
President and Chief Executive Officer and Director (Principal Executive Officer) |
February 26, 2013 |
||||||||
/s/ Howard D.
Goforth Howard D. Goforth |
Senior Vice President, Chief Financial Officer and Treasurer (Principal Financial Officer) |
February 26, 2013 |
||||||||
/s/ Scott T.
Phillips Scott T. Phillips |
Chief Accounting Officer (Principal Accounting Officer) |
February 26, 2013 |
||||||||
* Howard S. Cohen |
Director |
February 26, 2013 |
||||||||
* Richard S. Grant |
Director |
February 26, 2013 |
||||||||
* Ronald E. Kolka |
Director |
February 26, 2013 |
||||||||
* Steven F. Mayer |
Director |
February 26, 2013 |
||||||||
* Alan H. Schumacher |
Director |
February 26, 2013 |
||||||||
* M. Richard Warner |
Director |
February 26, 2013 |
||||||||
*By: /s/ George R. Judd |
||||||||||
George R.
Judd Attorney-in-Fact |
II-6
EXHIBIT INDEX
Exhibit Number |
Item |
|||||
---|---|---|---|---|---|---|
3.1 |
Second Amended and Restated Certificate of Incorporation of BlueLinx (A) |
|||||
3.2 |
Amended and Restated By-Laws of BlueLinx(B) |
|||||
4.1 |
Registration Rights Agreement, dated as of May 7, 2004, by and among BlueLinx and the initial holders specified on the signature pages
thereto(C) |
|||||
4.2 |
Letter Agreement, dated as of August 30, 2004, by and among BlueLinx, Cerberus ABP Investor LLC, Charles H. McElrea, George R. Judd, David J.
Morris, James C. Herbig, Wayne E. Wiggleton and Steven C. Hardin(C) |
|||||
4.3 |
Investment Letter, dated March 10, 2004, between BlueLinx and Cerberus ABP Investor LLC, as Purchaser of Common Stock(D) |
|||||
4.4 |
Investment Letter, dated May 7, 2004, between BlueLinx and Cerberus ABP Investor LLC, as Purchaser of Common Stock(D) |
|||||
4.5 |
Executive Purchase Agreement dated May 7, 2004 by and among BlueLinx, Cerberus ABP Investor LLC and Charles H. McElrea(D) |
|||||
4.6 |
Executive Purchase Agreement dated May 7, 2004 by and among BlueLinx, Cerberus ABP Investor LLC and George R. Judd(D) |
|||||
4.7 |
Registration Rights Agreement, dated as of June 16, 2011 between BlueLinx Holdings Inc. and Stadium Capital Management, LLC (incorporated by
reference to Form 8-K filed with the Securities and Exchange Commission on June 20, 2011) |
|||||
4.8 |
Form
of Subscription Rights Certificate** |
|||||
5.1 |
Opinion of Troutman Sanders LLP* |
|||||
8.1 |
Opinion of Troutman Sanders LLP as to certain tax matters* |
|||||
10.1 |
Asset Purchase Agreement, dated as of March 12, 2004, by and among Georgia-Pacific Corporation, Georgia-Pacific Building Materials Sales, Ltd.
and BlueLinx Corporation(C) |
|||||
10.2 |
First Amendment to Asset Purchase Agreement, dated as of May 6, 2004, by and among Georgia-Pacific Corporation, Georgia-Pacific Building
Materials Sales, Ltd. and BlueLinx Corporation(C) |
|||||
10.3 |
Master Purchase, Supply and Distribution Agreement, dated May 7, 2004 by and between BlueLinx Corporation and
Georgia-Pacific(B) |
|||||
10.4 |
Form
of Director and Officer Indemnification Agreement (incorporated by reference to Form 8-K filed with the Securities and Exchange Commission on January
13, 2011) |
|||||
10.5 |
BlueLinx Holdings Inc. Amended and Restated Short-Term Incentive Plan (incorporated by reference to Attachment B to the Definitive Proxy
Statement for the 2011 Annual Meeting of Stockholders, filed with the Securities and Exchange Commission on April 18, 2011) |
|||||
10.6 |
BlueLinx Holdings Inc. 2004 Long Term Equity Incentive Plan(C) |
|||||
10.7 |
BlueLinx Holdings Inc. 2004 Long-Term Equity Incentive Plan Form of Restricted Stock Award Agreement (incorporated by reference to Form 8-K
filed with the Securities and Exchange Commission on January 11, 2008) |
|||||
10.8 |
BlueLinx Holdings Inc. 2006 Long-Term Equity Incentive Plan (as amended and restated effective May 21, 2008) (incorporated by reference to
Appendix A to the Definitive Proxy Statement for the 2011 Annual Meeting of Stockholders, filed with the Securities and Exchange Commission on April
18, 2011) |
II-7
Exhibit Number |
Item | |||||
---|---|---|---|---|---|---|
10.9 |
Amended and Restated Bluelinx Holdings Inc. 2006 Long-Term Equity Incentive Plan (as amended through May 17, 2012 and restated solely for
purposes of filing pursuant to Item 601 of Regulation S-K) (Incorporated by reference to Appendix A to the Definitive Proxy Statement for the 2012
Annual Meeting of Stockholders, filed with the Securities and Exchange Commission on April 16, 2012) |
|||||
10.10 |
BlueLinx Holdings Inc. 2006 Long-Term Equity Incentive Plan Restricted Stock Award Agreement (incorporated by reference to Form 8-K filed with
the Securities and Exchange Commission on June 9, 2006) |
|||||
10.11 |
BlueLinx Holdings Inc. 2006 Long-Term Equity Incentive Plan Nonqualified Stock Option Award Agreement (incorporated by reference to Form 8-K
filed with the Securities and Exchange Commission on June 9, 2006) |
|||||
10.12 |
BlueLinx Holdings Inc. 2006 Long-Term Equity Incentive Plan Form of Performance Share Award Agreement (incorporated by reference to Form 8-K
filed with the Securities and Exchange Commission on January 4, 2013) |
|||||
10.13 |
BlueLinx Holdings Inc. Short-Term Incentive Plan (as amended and restated effective January 1, 2011) (Incorporated by reference to Appendix B
to the Definitive Proxy Statement for the 2011 Annual Meeting of Stockholders, filed with the Securities and Exchange Commission on April 18,
2011) |
|||||
10.14 |
Canadian Credit Agreement, dated August 12, 2011, by and among Bluelinx Canada, CIBC Asset-Based Lending Inc. and the lenders from time to
time parties thereto (Incorporated by reference to Form 8-K filed with the Securities and Exchange Commission on August 16, 2011) |
|||||
10.15 |
Letter Agreement, dated December 18, 2006, relating to and amending the Master Purchase, Supply and Distribution Agreement between
Georgia-Pacific Corporation and BlueLinx Corporation dated May 7, 2004 (incorporated by reference to Form 8-K filed with the Securities and Exchange
Commission on December 22, 2006) |
|||||
10.16 |
Loan
and Security Agreement, dated as of June 9, 2006, between the entities set forth therein collectively as borrower and German American Capital
Corporation as Lender (incorporated by reference to Form 10-Q filed with the Securities and Exchange Commission on November 6, 2009) |
|||||
10.17 |
Twelfth Amendment to Loan and Security Agreement, dated as of June 9, 2006, between the entities set forth therein collectively as borrower
and German American Capital Corporation as Lender (incorporated by reference to Form 8-K filed with the Securities and Exchange Commission on September
20, 2012) |
|||||
10.18 |
Guaranty of Recourse Obligations, dated as of June 9, 2006, by BlueLinx Holdings Inc. for the benefit of German American Capital Corporation
(incorporated by reference to Form 8-K filed with the Securities and Exchange Commission on June 15, 2006) |
|||||
10.19 |
Environmental Indemnity Agreement, dated as of June 9, 2006, by BlueLinx Holdings Inc. in favor of German American Capital Corporation
(incorporated by reference to Form 8-K filed with the Securities and Exchange Commission on June 15, 2006) |
|||||
10.20 |
Amended and Restated Loan and Security Agreement, dated August 4, 2006, by and between BlueLinx Corporation, Wachovia and the other
signatories listed therein (incorporated by reference to Form 10-Q filed with the Securities and Exchange Commission on November 6,
2009) |
|||||
10.21 |
First Amendment to Amended and Restated Loan and Security Agreement, dated August 4, 2006, by and between BlueLinx Corporation, Wachovia and
the other signatories listed therein, dated October 22, 2008 (incorporated by reference to Exhibit 10.19 to Annual Report on Form 10-K for the year
ended January 1, 2011, filed with the Securities and Exchange Commission on February 25, 2011) |
II-8
Exhibit Number |
Item | |||||
---|---|---|---|---|---|---|
10.22 |
Second Amendment to Amended and Restated Loan and Security Agreement, dated August 4, 2006, by and between BlueLinx Corporation, Wells Fargo,
as successor in interest to Wachovia, and the other signatories listed therein, dated July 7, 2010 (incorporated by reference to Form 8-K filed with
the Securities and Exchange Commission on July 7, 2010) |
|||||
10.23 |
Third Amendment to Amended and Restated Loan and Security Agreement, dated August 4, 2006, by and between BlueLinx Corporation, Wells Fargo,
as successor in interest to Wachovia, and the other signatories listed therein, dated May 10, 2011(incorporated by reference to Form 8-K filed with the
Securities and Exchange Commission on May 12, 2011) |
|||||
10.24 |
Fourth Amendment to Amended and Restated Loan and Security Agreement, dated August 4, 2006, by and between BlueLinx Corporation, Wells Fargo,
as successor in interest to Wachovia, and the other signatories listed therein, dated August 11, 2011 (incorporated by reference to Form 8-K filed with
the Securities and Exchange Commission on August 16, 2011) |
|||||
10.25 |
Fifth Amendment to Loan and Security Agreement, dated July 14, 2011, by and between BlueLinx Corporation and certain of its subsidiaries and
U.S. Bank National Association in its capacity as trustee for the registered holders of Wachovia Bank Commercial Mortgage Trust, Commercial Mortgage
Pass Through Certificates, Series 2006-C 27, as successor in interest to German American Capital Corporation (Incorporated by reference to Form 8-K
filed with the Securities and Exchange Commission on November 4, 2011) |
|||||
10.26 |
Second Amended and Restated Employment Agreement between BlueLinx Corporation and George R. Judd, dated January 22, 2013,
(incorporated by reference to Form 8-K filed with the Securities and Exchange Commission on January 28, 2013) |
|||||
10.27 |
Second Amended and Restated Employment Agreement between BlueLinx Corporation and Howard D. Goforth, dated January 22,
2013 (incorporated by reference to Form 8-K filed with the Securities and Exchange Commission on January 28,
2013) |
|||||
10.28 |
Amended and Restated Employment Agreement between BlueLinx Corporation and Dean A. Adelman, dated January 21, 2011 (incorporated by reference
to Form 8-K/A filed with the Securities and Exchange Commission on January 27, 2011) |
|||||
10.29 |
Employment Agreement between BlueLinx Corporation and Ned M. Bassil, dated October 31, 2011 (Incorporated by reference to Form 8-K filed with
the Securities and Exchange Commission on November 4, 2011) |
|||||
10.30 |
Investment Agreement, dated as of April 26, 2011, between BlueLinx and Cerberus ABP Investor LLC (incorporated by reference to Form 8-K, filed
with the Securities and Exchange Commission on April 26, 2011) |
|||||
14.1 |
BlueLinx Code of Ethical Conduct (incorporated by reference to Exhibit 14 to Annual Report on Form 10-K for the year ended January 1, 2005,
filed with the Securities and Exchange Commission on March 22, 2005) |
|||||
21.1 |
List
of subsidiaries of the Company (incorporated by reference to Exhibit 21.1 to Annual Report on Form 10-K for the year ended December 29,
2012, filed with the Securities and Exchange Commission on February 20, 2013) |
|||||
23.1 |
Consent of Ernst & Young LLP* |
|||||
23.2 |
Consent of Troutman Sanders LLP (included as part of Exhibit 5.1) |
|||||
24.1 |
Powers of Attorney** |
|||||
99.1 |
Form
of Instruction for Use of BlueLinx Subscription Rights Certificates** |
|||||
99.2 |
Form
of Letter to Stockholders Who Are Record Holders** |
II-9
Exhibit Number |
Item | |||||
---|---|---|---|---|---|---|
99.3 |
Form
of Letter to Nominee Holders Whose Clients Are Beneficial Holders** |
|||||
99.4 |
Form
of Letter to Clients of Nominee Holders** |
|||||
99.5 |
Form
of Nominee Holder Certification** |
|||||
99.6 |
Form
of Beneficial Owner Election** |
* |
Filed herewith. |
** |
Previously filed. |
|
Portions of this document were omitted and filed separately with the SEC pursuant to a request for confidential treatment in accordance with Rule 24b-2 of the Exchange Act. |
(A) |
Previously filed as Appendix B to the proxy statement for the 2012 Annual Meeting of Stockholders filed on Schedule 14A with the Securities and Exchange Commission on April 16, 2012. |
(B) |
Previously filed as an exhibit to Amendment No. 3 to the Companys Registration Statement on Form S-1 (Reg. No. 333-118750) filed with the Securities and Exchange Commission on November 26, 2004. |
(C) |
Previously filed as an exhibit to Amendment No. 1 to the Companys Registration Statement on Form S-1 (Reg. No. 333-118750) filed with the Securities and Exchange Commission on October 1, 2004. |
(D) |
Previously filed as an exhibit to Amendment No. 2 to the Companys Registration Statement on Form S-1 (Reg. No. 333-118750) filed with the Securities and Exchange Commission on October 8, 2004. |
II-10