BlueLinx Announces First-Quarter Results




         Net Loss of $0.01 Per Share on 30.5% Revenue Decline as
                   Housing-Related Slowdown Continues

                 Gross Margin Rises to 10.8% for Quarter

ATLANTA, May 4, 2007 (PRIME NEWSWIRE) -- BlueLinx Holdings Inc. (NYSE:BXC), a leading distributor of building products in North America, today reported financial results for the first quarter ended March 31, 2007.

The first-quarter net loss totaled $189,000, or $0.01 per diluted share, compared with net income of $9.8 million, or $0.32 per share, in the year-ago period. Revenues decreased 30.5% to $957.1 million from $1.38 billion for the same period a year ago, reflecting a 36.2% drop in structural product sales and a 21.3% sales decline in specialty products. Approximately two-thirds of the sales decline in structural products resulted from unit volume, which fell 22.6% from a year ago, as demand related to new home construction remained sharply below year-earlier levels, evidenced by a 29.8% drop in new home construction for the quarter. The sales decrease in specialty products was due almost entirely to unit volume, which declined 20.9%. Overall unit volume for the company's estimated weighted end-use markets fell 18.1% from the prior year.

Gross profit for the first quarter totaled $103.8 million, down 20.2% from $130 million in the prior-year period, reflecting lower unit volume associated with the housing starts decline. This decline was offset in part by an increase in gross margin. Gross margin increased 140 basis points to 10.8% from 9.4% a year earlier, due to structural product gross margin improvements achieved as wood-based structural product prices generally stabilized during the quarter after deteriorating sharply throughout much of 2006. First-quarter structural product gross margin of 8.7% improved 180 basis points from the year-ago period and 170 basis points from the previous quarter. Specialty product gross margin of 13.9% remained unchanged from a year ago and was up 10 basis points from the fourth quarter.

Total operating expenses of $93.9 million decreased $8.4 million, or 8.3%, from the same period a year ago, primarily reflecting decreases in variable compensation and lower payroll costs related to headcount reductions implemented in the third quarter of 2006. The operating expense decrease was partially offset by additional operating expense related to Austin Hardwoods, which was acquired last August, and expenses associated with investments in the business, including the implementation of a sales process and productivity improvement program designed to enhance market share and profitability. Operating income for the quarter totaled $9.9 million, compared with $27.6 million a year ago.

"We continued to operate in a challenging business environment during the first quarter," said Stephen Macadam, chief executive officer. "The ongoing cyclical decline in housing starts and lower wood-based structural product prices, the key grades of which ended the quarter approximately 26% below year-earlier levels, combined to make the first quarter a continuation of one of the weakest business environments our industry has experienced in many years.

"We faced these challenges by tightly managing costs while continuing to focus on the strategies that will facilitate our long-term growth as a leading distributor of specialty building products," Macadam said. "We continued to provide quality service to our customers. We focused on expanding our specialty product business. We also continued to invest in processes and infrastructure to drive long-term profitability and market-share growth.

"As we move forward in 2007, we remain confident in our ability to execute our long-term strategy in this challenging environment," Macadam said. "We currently do not see any signs of significant recovery in our housing-related business, but neither do we see signs of significant further deterioration. Our overall end-use markets appear generally weak, but stable. Wood-based structural product prices are showing some stability, but remain near their manufacturing costs and sharply below year-ago levels. We do not expect wood-based structural product prices to show any sustained recovery until demand returns with the recovery of the home construction sector.

"We continue to believe the longer-term fundamentals for household creation remain favorable for our business," Macadam said. "We are proceeding in the current environment by focusing on improved margin performance and diligent cost and working capital management as we continue to execute on our long-term objectives."

Dividend

On May 3, 2007 the BlueLinx Board of Directors declared a $0.125 dividend on the company's common shares for the quarter ended March 31, 2007. The dividend is payable on June 29, 2007, to shareholders of record on June 15, 2007.

Conference Call

BlueLinx will host a conference call today at 10:00 a.m. Eastern Time, accompanied by a supporting slide presentation. Investors may listen to the conference call and download the presentation by going to the Investor Relations page of the BlueLinx Web site at www.BlueLinxCo.com. Investors also can access a recording of the conference call for one week by calling (706)645-9291, Conference ID# 6257933. The recording will be available two hours after the conference call has concluded. Investors also can access a recording of this call on the BlueLinx Web site where a replay of the Webcast will be available for 90 days.

Use of Non-GAAP Measures

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

About BlueLinx Holdings Inc.

Headquartered in Atlanta, Georgia, BlueLinx Holdings Inc., operating through its wholly owned subsidiary BlueLinx Corporation, is a leading distributor of building products in North America. Employing more than 3,300 people, BlueLinx offers greater than 10,000 products from over 750 suppliers to service approximately 11,500 customers nationwide, including dealers, industrial manufacturers, manufactured housing producers and home improvement retailers. The company operates its distribution business from sales centers in Atlanta and Denver, and its network of more than 70 warehouses. BlueLinx, which is on the Fortune 500 list of the nation's largest companies, is traded on the New York Stock Exchange under the symbol BXC. Additional information about BlueLinx can be found on its Web site at www.BlueLinxCo.com.

Forward-looking Statements

This press release includes "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. All of these forward-looking statements are based on estimates and assumptions made by our management that, although believed by BlueLinx to be reasonable, are inherently uncertain. Forward-looking statements involve risks and uncertainties, including, but not limited to, economic, competitive, governmental and technological factors outside of its control, that may cause our business, strategy or actual results to differ materially from the forward-looking statements. These risks and uncertainties may include, among other things: changes in the supply and/or demand for products that we distribute, especially as a result of conditions in the residential housing market; general economic and business conditions in the United States; the activities of competitors; changes in significant operating expenses; changes in the availability of capital; the ability to identify acquisition opportunities and effectively and cost-efficiently integrate acquisitions; adverse weather patterns or conditions; acts of war or terrorist activities; variations in the performance of the financial markets; and other factors described in the "Risk Factors" section in the company's Annual Report on Form 10-K for the year ended December 30, 2006, and in its periodic reports filed with the Securities and Exchange Commission from time to time. Given these risks and uncertainties, you are cautioned not to place undue reliance on forward-looking statements. BlueLinx undertakes no obligation to publicly update or revise any forward-looking statement as a result of new information, future events or otherwise, except as required by law.



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

                                                   Quarters Ended
                                             -------------------------
                                               March 31,     April 1,
                                                 2007          2006
                                             -----------   -----------
                                             (unaudited)   (unaudited)

 Net sales                                   $   957,114   $ 1,376,606
 Cost of sales                                   853,359     1,246,654
                                             -----------   -----------
 Gross profit                                    103,755       129,952
                                             -----------   -----------
 Operating expenses:
   Selling, general, and administrative           88,468        97,267
   Depreciation and amortization                   5,400         5,043
                                             -----------   -----------
 Total operating expenses                         93,868       102,310
                                             -----------   -----------
 Operating income                                  9,887        27,642
 Non-operating expenses:
   Interest expense                               10,606        11,197
   Other (income) expense, net                      (383)           81
                                             -----------   -----------
 Income (loss) before provision for
   (benefit from) income taxes                      (336)       16,364
 Provision for (benefit from) income taxes          (147)        6,569
                                             -----------   -----------
 Net income (loss)                                  (189)        9,795
                                             -----------   -----------

 Basic weighted average number of common
   shares outstanding                             30,800        30,417
                                             ===========   ===========
 Basic net income (loss) per share
   applicable to common stock                $     (0.01)  $      0.32
                                             ===========   ===========
 Diluted weighted average number of common
   shares outstanding                             30,800        30,713
                                             ===========   ===========
 Diluted net income (loss) per share
   applicable to common stock                $     (0.01)  $      0.32
                                             ===========   ===========
 Dividends declared per share of
   common stock                              $     0.125   $     0.125
                                             ===========   ===========




 BlueLinx Holdings Inc.
 Balance Sheets
   in thousands

                                             -----------   -----------
                                               March 31,   December 30,
                                                 2007          2006
                                             -----------   -----------
                                             (unaudited)
 Assets:
 Current assets:
   Cash                                      $    20,262   $    27,042
   Receivables                                   377,695       307,543
   Inventories                                   465,550       410,686
   Deferred income taxes                           8,785         9,024
   Other current assets                           43,908        44,948
                                             -----------   -----------
 Total current assets                            916,200       799,243
                                             -----------   -----------

 Property, plant, and equipment:
   Land and land improvements                     57,483        56,985
   Buildings                                      95,814        95,814
   Machinery and equipment                        64,404        61,955
   Construction in progress                        3,949         2,025
                                             -----------   -----------
 Property, plant, and equipment, at cost         221,650       216,779
   Accumulated depreciation                     (42,304)       (38,530)
                                             -----------   -----------
   Property, plant, and equipment, net           179,346       178,249
 Other non-current assets                         26,334        26,870
                                             -----------   -----------
 Total assets                                  1,121,880     1,004,362
                                             ===========   ===========

 Liabilities :
 Current liabilities:
   Accounts payable                          $   233,941   $   195,815
   Bank overdrafts                                50,603        50,241
   Accrued compensation                            9,498         8,574
   Current maturities of long-term debt           88,281         9,743
   Other current liabilities                      16,135        14,633
                                             -----------   -----------
 Total current liabilities                       398,458       279,006
                                             -----------   -----------
 Noncurrent liabilities:
   Long-term debt                                522,719       522,719
   Deferred income taxes                           1,513         1,101
   Other long-term liabilities                    13,048        12,137
                                             -----------   -----------
 Total liabilities                               935,738       814,963
                                             -----------   -----------

 Shareholders' Equity:
   Common stock                                      312           309
   Additional paid in capital                    139,224       138,066
   Accumulated other comprehensive income             59           412
   Retained earnings                              46,547        50,612
                                             -----------   -----------
 Total shareholders' equity                      186,142       189,399
                                             -----------   -----------
 Total liabilities and equity                $ 1,121,880   $ 1,004,362
                                             ===========   ===========





 BlueLinx Holdings Inc.
 Statements of Cash Flows
   in thousands

                                                  Quarters Ended
                                             -------------------------
                                               March 31,     April 1,
                                                 2007          2006
                                             -----------   -----------
                                             (unaudited)   (unaudited)

 Cash flows from operating activities:
 Net income (loss)                           $      (189)  $     9,795
 Adjustments to reconcile net income (loss)
   to cash provided by (used in) operations:
     Depreciation and amortization                 5,400         5,043
     Amortization of debt issue costs                606           765
     Deferred income tax provision (benefit)         198          (753)
     Share-based compensation                        874           562
     Excess tax benefits from share-based
       compensation arrangements                     (60)         (862)
     Changes in assets and liabilities:
       Receivables                               (70,152)      (81,373)
       Inventories                               (54,864)      (28,084)
       Accounts payable                           38,126        25,898
       Changes in other working capital            3,526           904
       Other                                        (472)        1,704
                                             -----------   -----------
 Net cash used in operating activities           (77,007)      (66,401)
                                             -----------   -----------

 Cash flows from investing activities:
 Property, plant, and equipment investments       (6,092)         (658)
 Proceeds from sale of assets                        879           135
                                             -----------   -----------
 Net cash used in investing activities            (5,213)         (523)
                                             -----------   -----------

 Cash flows from financing activities:
 Proceeds from stock options exercised               323         1,479
 Excess tax benefits from share-based
   compensation arrangements                          60           862
 Net increase in revolving credit facility        78,538        84,919
 Debt financing costs                                 --          (569)
 Increase (decrease) in bank overdrafts              362       (12,822)
 Common dividends paid                            (3,876)       (3,831)
 Other                                                33            --
                                             -----------   -----------
 Net cash provided by financing activities        75,440        70,038
                                             -----------   -----------

 Increase (decrease) in cash                      (6,780)        3,114
 Balance, beginning of period                     27,042        24,320
                                             -----------   -----------
 Balance, end of period                      $    20,262   $    27,434
                                             ===========   ===========


            

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