BlueLinx
Annual Report 2012

Plain-text annual report

Table of ContentsUNITED STATES SECURITIES AND EXCHANGE COMMISSIONWashington, D.C. 20549 Form 10-K (Mark One)ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACTOF 1934 For the fiscal year ended December 29, 2012 OR oTRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGEACT OF 1934 Commission file number: 1-32383 BLUELINX HOLDINGS INC.(Exact name of registrant as specified in its charter) Delaware77-0627356(State or other jurisdiction ofincorporation or organization)(I.R.S. EmployerIdentification No.) 4300 Wildwood Parkway, Atlanta, Georgia30339(Address of principal executive offices)(Zip Code) Registrant’s telephone number, including area code:770-953-7000 Securities registered pursuant to Section 12(b) of the Act: Title of Each Class Name of Each Exchange on Which Registered Common stock, par value $0.01 per share New York Stock Exchange Securities registered pursuant to Section 12(g) of the Act:None Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes o No  Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. Yes o No  Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filingrequirements for the past 90 days. Yes  No o Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data Filerequired to be submitted and posted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant wasrequired to submit and post such files). Yes  No o Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to thebest of registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to thisForm 10-K.  Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. Seethe definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act. (Check one): Large accelerated filer oAccelerated filer oNon-accelerated filer Smaller reporting company o  (Do not check if a smaller reporting company) Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act). Yes o No  The aggregate market value of the registrant’s common stock held by non-affiliates of the registrant as of June 30, 2012 was $46,947,438, based on theclosing price on the New York Stock Exchange of $2.35 per share on June 29, 2012. As of February 20, 2013, the registrant had 63,766,266 shares of common stock outstanding. DOCUMENTS INCORPORATED BY REFERENCE None. Table of Contents BLUELINX HOLDINGS INC. ANNUAL REPORT ON FORM 10-KFor the Fiscal Year Ended December 29, 2012 TABLE OF CONTENTS PART I ITEM 1.Business 4 ITEM 1A.Risk Factors 8 ITEM 1B.Unresolved Staff Comments 15 ITEM 2.Properties 15 ITEM 3.Legal Proceedings 16 ITEM 4.Mine Safety Disclosures 16 PART II ITEM 5.Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities 17 ITEM 6.Selected Financial Data 19 ITEM 7.Management’s Discussion and Analysis of Financial Condition and Results of Operations 20 ITEM 7A.Quantitative and Qualitative Disclosures about Market Risk 37 ITEM 8.Financial Statements and Supplementary Data 38 ITEM 9.Changes in and Disagreements with Accountants on Accounting and Financial Disclosure 78 ITEM 9A.Controls and Procedures 78 ITEM 9B.Other Information 78 PART III ITEM 10.Directors, Executive Officers and Corporate Governance 78 ITEM 11.Executive Compensation 82 ITEM 12.Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters 95 ITEM 13.Certain Relationships and Related Transactions, and Director Independence 97 ITEM 14.Principal Accounting Fees and Services 98 PART IV ITEM 15.Exhibits, Financial Statement Schedules 98 2Table of ContentsCAUTIONARY STATEMENT CONCERNING FORWARD-LOOKING STATEMENTS This Annual Report on Form 10-K includes “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended,and Section 21E of the Securities Exchange Act of 1934, as amended. 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. You should readstatements containing these words carefully, because they discuss our future expectations, contain projections of our future results or state other “forward-looking” information. Forward-looking statements are based on estimates and assumptions made by us that, although believed by us to be reasonable, involve inherent risksand uncertainties, including, but not limited to, economic, competitive, governmental and technological factors outside of our control, that may cause ourbusiness, strategy or actual results to differ materially from the forward-looking statements. We operate in a changing environment in which new risks canemerge 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 offactors, may cause our business, strategy or actual results to differ materially from those contained in forward-looking statements. Factors you shouldconsider 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 housingmarket; ● the acceptance by our customers of our privately branded products; ● inventory levels of new and existing homes for sale; ● general economic and business conditions in the United States; ● the financial condition and credit worthiness of our customers; ● the activities of competitors; ● changes in significant operating expenses; ● fuel costs; ● risk of losses associated with accidents; ● exposure to product liability claims; ● changes in the availability of capital and interest rates; ● immigration patterns and job and household formation; ● our ability to identify acquisition opportunities and effectively and cost-efficiently integrate acquisitions; ● adverse weather patterns or conditions; ● acts of war or terrorist activities, including cyber intrusion; ● variations in the performance of the financial markets, including the credit markets; ● failure to complete the rights offering on the terms described in the Form S-1 filed with the SEC on January 10, 2013; and ● the risk factors discussed under Item 1A. Risk Factors and elsewhere in this Form 10-K. Forward-looking statements speak only as of the date of this Form 10-K. Except as required under federal securities laws and the rules and regulations ofthe SEC, we do not have any intention, and do not undertake, to update any forward-looking statements to reflect events or circumstances arising after the dateof this Form 10-K, whether as a result of new information, future events or otherwise. As a result of these risks and uncertainties, readers are cautioned not toplace undue reliance on the forward-looking statements included in this Form 10-K or that may be made elsewhere from time to time by or on behalf of us. Allforward-looking statements attributable to us are expressly qualified by these cautionary statements. 3Table of Contents PART I As used herein, unless the context otherwise requires, “BlueLinx,” the “Company,” “we,” “us” and “our” refer to BlueLinx Holdings Inc. andits subsidiaries. BlueLinx Corporation is the wholly-owned operating subsidiary of BlueLinx Holdings Inc. and is referred to herein as the “operatingcompany” when necessary. Reference to “fiscal 2012” refers to the 52-week period ended December 29, 2012. Reference to “fiscal 2011” refers tothe 52-week period ended December 31, 2011. Reference to “fiscal 2010” refers to the 52-week period ended January 1, 2011. ITEM 1. BUSINESS. Company Overview BlueLinx Holdings Inc., operating through our wholly-owned subsidiary, BlueLinx Corporation, is a leading distributor of building products in theUnited States. We operate in all of the major metropolitan areas in the United States and, as of December 29, 2012, we distributed approximately 10,000products from over 750 suppliers to service more than 11,500 customers nationwide, including dealers, industrial manufacturers, manufactured housingproducers and home improvement retailers. We operate our distribution business from sales centers in Atlanta and Denver, and our network of approximately55 distribution centers. We distribute products in two principal categories: structural products and specialty products. Structural products, which represented approximately42%, 39% and 46% of our fiscal 2012, fiscal 2011 and fiscal 2010 gross sales, respectively, include plywood, oriented strand board (“OSB”), rebar andremesh, lumber and other wood products primarily used for structural support, walls and flooring in construction projects. Specialty products, whichrepresented approximately 58%, 61% and 54% of our fiscal 2012, fiscal 2011 and fiscal 2010 gross sales, respectively, include roofing, insulation, specialtypanels, moulding, engineered wood products, vinyl products (used primarily in siding), outdoor living and metal products (excluding rebar and remesh). Our customers include building materials dealers, industrial users of building products, manufactured housing builders and home improvement centers.We purchase products from over 750 vendors and serve as a national distributor for a number of our suppliers. We distribute products through our ownedand leased fleet of over 500 trucks and over 900 trailers, as well as by common carrier. Our principal executive offices are located at 4300 Wildwood Parkway, Atlanta, Georgia 30339 and our telephone number is (770) 953-7000. Our filingswith the U.S. Securities and Exchange Commission, including annual reports on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K,proxy statements and amendments to those reports, are accessible free of charge at our official website, www.BlueLinxCo.com. We have adopted a Code ofEthics within the meaning of Item 406(b) of Regulation S-K. This Code of Ethics applies to our principal executive officer, principal financial officer andprincipal accounting officer. This Code of Ethics, our board committee charters and our corporate governance guidelines are publicly available without chargeat www.BlueLinxCo.com or without charge upon request by writing to BlueLinx Holdings Inc., Attn: Corporate Secretary, 4300 Wildwood Parkway, Atlanta,Georgia 30339. If we make substantial amendments to our Code of Ethics or grant any waiver, including any implicit waiver, we will disclose the nature ofsuch amendment or waiver on our website or in a report on Form 8-K. The reference to our website does not constitute incorporation by reference of theinformation contained at the site, and our website is not considered part of this filing. History We were created on March 8, 2004 as a Georgia corporation named ABP Distribution Holdings Inc. (“ABP”). ABP was owned by Cerberus CapitalManagement, L.P. (Cerberus Capital Management, L.P. and its subsidiaries are referred to herein as “Cerberus”), a private, New York-based investment firm,and members of our management team. Prior to May 7, 2004, certain of our assets were owned by the distribution division (the “Division”) of Georgia-PacificCorporation (“Georgia-Pacific” or “G-P”). The Division commenced operations in 1954 with 13 warehouses primarily used as an outlet for G-P’s plywood. OnMay 7, 2004, G-P sold the assets of the Division to ABP. ABP subsequently merged into BlueLinx Holdings Inc. On December 17, 2004, we consummated aninitial public offering of our common stock. 4Table of Contents Products and Services As of December 29, 2012, we distributed approximately 10,000 different structural and specialty products to approximately 11,500 customersnationwide. Our structural products are primarily used for structural support, walls, flooring and roofing in construction projects. Additional end uses of ourstructural products include outdoor decks, sheathing, crates and boxes. Our specialty products include engineered lumber, roofing, insulation, metal products(excluding rebar and remesh), vinyl products (used primarily in siding), moulding, outdoor living and particle board. In some cases, these products arebranded by us. We also provide a wide range of value-added services and solutions to our customers and vendors including: ●providing “less-than-truckload” delivery services; ●pre-negotiated program pricing plans; ●inventory stocking; ●automated order processing through an electronic data interchange, or EDI, that provides a direct link between us and our customers; ●inter-modal distribution services, including railcar unloading and cargo reloading onto customers’ trucks; and ●back-haul services, when otherwise empty trucks are returning from customer deliveries. Distribution Channels We sell products through three main distribution channels: Warehouse Sales Warehouse sales are delivered from our warehouses to dealers, home improvement centers and industrial users. We deliver products primarily using ourfleet of over 500 trucks and over 900 trailers, but also occasionally use common carriers for peak load flexibility. We operate in all of the major metropolitanareas in the United States through our network of approximately 55 distribution centers. Our warehouses have approximately ten million square feet of spaceunder roof plus significant outdoor storage space. Warehouse sales accounted for approximately 71% of our fiscal 2012 and 66% of our fiscal 2011 grosssales. Reload Sales Reload sales are similar to warehouse sales but are shipped from third-party warehouses where we store owned product in order to expand our geographicreach. This channel is employed primarily to service strategic customers that would be uneconomical to service from our warehouses and to distribute largevolumes of imported products such as metal or hardwood plywood from port facilities. Reload sales accounted for approximately 9% and 13% of our grosssales in fiscal 2012 and fiscal 2011, respectively. Direct Sales Direct sales are shipped from the manufacturer to the customer without our taking physical inventory possession. This channel requires the lowestamount of committed capital and fixed costs. Direct sales accounted for approximately 20% and 21% of our fiscal 2012 and fiscal 2011 gross sales,respectively. 5Table of Contents Customers As of December 29, 2012, our customer base included approximately 11,500 customers across multiple market segments and various end-use markets,including the following types of customers: ●building materials dealers; ●industrial users of building products; ●manufactured housing builders; and ●home improvement centers. Sales and Marketing Our sales efforts are directed primarily through our sales force of 401 sales representatives, of which 215 are primarily located at our two sales centers inDenver and Atlanta and inside various branch locations. Within these sales centers, our sales representatives interact with our customers over the telephone.The remaining 186 sales representatives are located throughout the country and are responsible for maintaining a local dialogue with our customers, includingmaking frequent, in-person visits. Our sales force is separated between industrial/dealer sales and home improvement center sales. Industrial/dealer sales are managed by regional vice-presidents with sales teams organized by geographical customer regions. The majority of industrial/dealer orders are processed by telephone and are facilitatedby our centralized database of customer preferences and purchasing history. We also have dedicated cross-functional customer support teams focused onstrategic growth with the home improvement centers. Suppliers As of December 29, 2012, our vendor base included over 750 suppliers of both structural and specialty building products. In some cases, these productsare branded. We have supply contracts in place with many of our vendors. Terms for these agreements frequently include prompt payment discounts, freightallowances and occasionally include volume discounts, growth incentives, marketing allowances, and consigned inventory. On February 12, 2012, our three-year purchase agreement with G-P for engineered lumber expired in accordance with its terms. We continue to distributea variety of G-P building products, but no longer are contractually obligated to make minimum purchases of products from G-P or to purchase certainproducts exclusively from G-P. Competition The U.S. building products distribution market is a highly fragmented market, served by a small number of multi-regional distributors, severalregionally focused distributors and a large number of independent local distributors. Local and regional distributors tend to be closely held and often specializein a limited number of segments, such as the roofing segment, in which they offer a broader selection of products. Some of our multi-regional competitors arepart of larger companies and therefore have access to greater financial and other resources than we do. We compete on the basis of breadth of product offering,consistent availability of product, product price and quality, reputation, service and distribution facility location. Our two largest competitors are Weyerhaeuser Company and Boise Cascade Company. Most major markets are served by at least one of thesedistributors. 6Table of Contents Seasonality We are exposed to fluctuations in quarterly sales volumes and expenses due to seasonal factors. These seasonal factors are common in the buildingproducts distribution industry. The first and fourth quarters are typically our slowest quarters due to the impact of poor weather on the construction market.Our second and third quarters are typically our strongest quarters, reflecting a substantial increase in construction due to more favorable weather conditions.Our working capital and accounts receivable and payable generally peak in the third quarter, while inventory generally peaks in the second quarter inanticipation of the summer building season. Trademarks As of December 29, 2012, we had 37 U.S. trademark applications and registrations, one issued U.S. patent and one Canadian trademark registration.Depending on the jurisdiction, trademarks are valid as long as they are in use and/or their registrations are properly maintained and they have not becomegeneric. Registrations of trademarks generally can be renewed indefinitely as long as the trademarks are in use. We do not believe our business is dependent onany one of our trademarks or on our patent. Employees As of December 29, 2012 we employed approximately 1,868 persons on a full-time basis. Approximately 30% of our employees were represented byvarious labor unions. As of December 29, 2012, we had 42 collective bargaining agreements, of which 10, covering approximately 132 total employees, areup for renewal in fiscal 2013. We consider our relationship with our employees generally to be good. Environmental and Other Governmental Regulations Our operations are subject to various federal, state, provincial and local laws, rules and regulations. We are subject to environmental laws, rules andregulations that limit discharges into the environment, establish standards for the handling, generation, emission, release, discharge, treatment, storage anddisposal of hazardous materials, substances and wastes, and require cleanup of contaminated soil and groundwater. These laws, ordinances and regulationsare complex, change frequently and have tended to become more stringent over time. Many of them provide for substantial fines and penalties, orders(including orders to cease operations) and criminal sanctions for violations. They may also impose liability for property damage and personal injury stemmingfrom the presence of, or exposure to, hazardous substances. In addition, certain of our operations require us to obtain, maintain compliance with, andperiodically renew permits. Certain of these laws, including the Comprehensive Environmental Response, Compensation, and Liability Act, may require the investigation andcleanup of an entity’s or its predecessor’s current or former properties, even if the associated contamination was caused by the operations of a third party.These laws also may require the investigation and cleanup of third-party sites at which an entity or its predecessor sent hazardous wastes for disposal,notwithstanding that the original disposal activity accorded with all applicable requirements. Liability under such laws may be imposed jointly and severally,and regardless of fault. G-P has agreed to indemnify us against any claim arising from environmental conditions that existed prior to May 7, 2004 in connection with theproperties acquired when G-P sold the assets of the Division to us (see “History” above). In addition, we carry environmental insurance. While we do notexpect to incur significant costs to BlueLinx arising from environmental conditions, there can be no assurance that all such costs will be covered byindemnification or insurance. We are also subject to the requirements of the U.S. Department of Labor Occupational Safety and Health Administration, or OSHA. In order to maintaincompliance with applicable OSHA requirements, we have established uniform safety and compliance procedures for our operations and implementedmeasures to prevent workplace injuries. The U.S. Department of Transportation, or DOT, regulates our operations in domestic interstate commerce. We are subject to safety requirementsgoverning interstate operations prescribed by the DOT. Vehicle dimensions and driver hours of service also remain subject to both federal and state regulation. We incur and will continue to incur costs to comply with the requirements of environmental, health and safety and transportation laws, ordinances andregulations. We anticipate that these requirements could become more stringent in the future, and we cannot assure you that compliance costs will not bematerial. 7Table of Contents ITEM 1A. RISK FACTORS. In addition to the other information contained in this Form 10-K, the following risk factors should be considered carefully in evaluating our business. Ourbusiness, financial condition, or results of operations could be materially adversely affected by any of these risks. Additional risks not presently known to usor that we currently deem immaterial may also impair our business and operations. Our industry is highly cyclical, and prolonged periods of weak demand or excess supply may reduce our net sales and/or margins, which mayreduce 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 anddemand in the market for building products. Market prices of building products historically have been volatile and cyclical, and we have limited ability tocontrol 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 industrialmarkets, weather and population growth. The supply of building products fluctuates based on available manufacturing capacity, and excess capacity in theindustry 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 asignificant 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 forecastour operating results. Our industry is dependent on the homebuilding industry which has suffered from a prolonged significant downturn, and any slowdown in thecurrent 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 strengthof these markets depends on new housing starts and residential renovation projects, which are a function of many factors beyond our control. Some of thesefactors include general economic conditions, employment levels, job and household formation, interest rates, housing prices, tax policy, availability ofmortgage financing, prices of commodity wood and steel products, immigration patterns, regional demographics and consumer confidence. The overallhousing market and the economy are improving; however, the U.S. residential construction market has suffered from a multi-year downturn that was one ofthe most severe housing downturns in United States history. While the government’s legislative and administrative measures aimed at restoring liquidity to thecredit markets and providing relief to homeowners facing foreclosure are beginning to show positive results and there have been signs of improvement in theU.S. economy generally, and in the residential housing market in particular, it is unclear if and to what extent the residential construction market will continueto 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 onour operating results, liquidity and financial condition. Reduced levels of construction activity may result in continued intense price competition amongbuilding materials suppliers, which may adversely affect our gross margins. We cannot provide assurance that our responses to future downturns in theeconomy in general, and in the residential housing market in particular, will be successful. A significant portion of our sales are on credit to our customers. Material changes in their credit worthiness or our inability to forecastdeterioration 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 economicdownturns, which may lead to lower demand for our products and increased incidence of customers’ inability to pay their accounts. Bankruptcies by ourcustomers may cause us to incur bad debt expense at levels higher than historically experienced. In fiscal 2012, approximately 0.1% in bad debt expense tototal net sales was incurred related to credit sales. Our customers are generally susceptible to the same economic business risks as we are. Furthermore, wemay not necessarily be aware of any deterioration in their financial position. If our customers’ financial position becomes impaired, it could have a significantimpact on our bad debt exposure and could have a material adverse effect on our operating results, cash flow and liquidity. In addition, certain of oursuppliers potentially may be impacted as well, causing disruption or delay of product availability. These events would adversely impact our results ofoperations, cash flows and financial position. 8Table of Contents Our cash flows and capital resources may be insufficient to make required payments on our substantial indebtedness and future indebtednessor 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 $86.0million under the terms of our U.S. revolving credit facility, outstanding borrowings of $1.9 million and excess availability of $2.0 million under ourCanadian revolving credit facility and outstanding letters of credit totaling $4.5 million. As of December 29, 2012, the principal amount outstanding on ourmortgage loan was $206.0 million. Our substantial debt could have important consequences to you. For example, it could: ● make it difficult for us to satisfy our debt obligations; ● make us more vulnerable to general adverse economic and industry conditions; ● limit our ability to obtain additional financing for working capital, capital expenditures, acquisitions and other general corporate requirementsas our excess liquidity likely will decrease while our industry and our Company begins its recovery from the historic housing marketdownturn; ● expose us to interest rate fluctuations because the interest rate on the debt under our U.S. revolving credit facility is variable; ● require us to dedicate a substantial portion of our cash flow from operations to payments on our debt, thereby reducing the availability of ourcash flow for operations and other purposes; ● limit our flexibility in planning for, or reacting to, changes in our business and the industry in which we operate; and ● place us at a competitive disadvantage compared to competitors that may have proportionately less debt, and therefore may be in a betterposition 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, cashflows and capital resources, which in turn depend upon prevailing economic conditions and certain financial, business and other factors, many of which arebeyond our control. These factors include, among others: ● economic and demand factors affecting the building products distribution industry; ● pricing pressures; ● increased operating costs; ● competitive conditions; and ● 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, sellmaterial assets or operations, obtain additional capital or restructure our debt. Obtaining additional capital or restructuring our debt could be accomplished inpart through new or additional borrowings or placements of debt or equity securities. There is no assurance that we could obtain additional capital orrestructure 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 andother 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 bya first priority security interest in all of our operating subsidiary’s and BlueLinx Building Products Canada Ltd.’s (“BlueLinx Canada’s”) (for the Canadianrevolving 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 onfavorable economic terms, if at all. We may incur substantial additional indebtedness in the future, including under the revolving credit facilities. Ourincurring additional indebtedness would intensify the risks described above. 9Table of Contents 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 management’s discretion in operating our business. In particular, these instruments limit our ability to, among other things: ●incur additional debt; ●grant liens on assets; ●make investments, including capital expenditures; ●sell or acquire assets outside the ordinary course of business; ●engage in transactions with affiliates; and ●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 fallsbelow the greater of $30 million or the amount equal to 15% of the lesser of the borrowing base or $400 million (the “Excess Availability Threshold”). If we failto maintain this minimum excess availability, the U.S. revolving credit facility requires us to (i) maintain certain financial ratios, which we would not meetwith current operating results triggering the lender’s right to make the debt callable, and (ii) limit our capital expenditures. If we fail to comply with therestrictions in the U.S. revolving credit facility, the Canadian revolving credit facility, the mortgage loan documents or any other current or future financingagreements, 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 terminateany 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 ourproducts. Purchases in fiscal 2012 from the five largest suppliers were approximately 25% in the aggregate, none of these suppliers individually constitutemore than 10% of our product purchases. 10Table of Contents 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 usby 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 purchasethe more commonly recognized “name brand” versions of the same products. These products are manufactured on our behalf by third party suppliers, and wedo not directly control the manufacturing process. As a result, while such products must generally meet certain quality standards set by us, it is possible thatour 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 thesale to our customers. Further, problems in the supply chain for these products may adversely impact our ability to maintain sufficient inventory levels for theprivately branded products. Although in many instances we have agreements with our suppliers, these agreements are generally terminable by either party on limited notice. Failure byour 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 materialadverse 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 environmentsin these countries differ from those in the U.S. Our global sourcing strategy is subject to risks and uncertainties, including changes in foreign countryregulatory requirements; differing business practices associated with foreign operations; imposition of foreign tariffs and other trade barriers; political, legaland economic instability; foreign currency exchange rate fluctuations; foreign country tax rules, regulations and other requirements, such as changes in taxrates and statutory and judicial interpretations in tax laws; inflation; differing labor laws and changes in those laws; government price controls; and workstoppages 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 broadadministrative powers with respect to our transportation operations. If we fail to adequately comply with DOT regulations or regulations become morestringent, we could experience increased inspections, regulatory authorities could take remedial action including imposing fines or shutting down ouroperations 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 andother suppliers. Generally, our products are obtainable from various sources and in sufficient quantities. However, the loss of, or a substantial decrease in theavailability of, products from our suppliers or the loss of key supplier arrangements could adversely impact our financial condition, operating results, andcash flows. Although in many instances we have agreements with our suppliers, these agreements are generally terminable by either party on limited notice. Failure byour 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 materialadverse 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 choosingdistributors 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 toour 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 usmay elect to sell and distribute directly to end-users in the future or enter into exclusive supply arrangements with other distributors. Finally, we may not beable 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 bereduced. Integrating acquisitions may be time-consuming and create costs that could reduce our operating results and cash flows. 11Table of Contents We may elect to selectively pursue acquisitions. Any integration process may be complex and time consuming, may be disruptive to the business and maycause an interruption of, or a distraction of management’s attention from, the business as a result of a number of obstacles, including but not limited to: ● the loss of key customers of the acquired company; ● the incurrence of unexpected expenses and working capital requirements; ● a failure of our due diligence process to identify significant issues or contingencies; ● difficulties assimilating the operations and personnel of the acquired company; ● difficulties effectively integrating the acquired technologies with our current technologies; ● our inability to retain key personnel of acquired entities; ● failure to maintain the quality of customer service; ● our inability to achieve the financial and strategic goals for the acquired and combined businesses; and ● 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 apercentage 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 therisk that the obligations and liabilities of an acquired company may not be adequately reflected in the historical financial statements of that company and therisk that those historical financial statements may be based on assumptions which are incorrect or inconsistent with our assumptions or approach toaccounting 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 resultsof operations. As of December 29, 2012, approximately 30% of our employees were represented by various labor unions. As of December 29, 2012, we had 42collective bargaining agreements, of which 10, covering approximately 132 total employees, are up for renewal in fiscal 2013. Although we have generally hadgood relations with our unionized employees and expect to renew collective bargaining agreements as they expire, no assurances can be provided that we will beable to reach a timely agreement as to the renewal of the agreements, and their expiration or continued work under an expired agreement, as applicable, couldresult 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 stoppagesor other labor disturbances may occur in the future, which could adversely impact our net sales and/or selling, general and administrative expenses. All ofthese 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 resultsand cash flow. We sponsor several defined benefit pension plans covering substantially all of our hourly employees. Our estimates of the amount and timing ofour future funding obligations for our defined benefit pension plans are based upon various assumptions. 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 amountand timing of our pension funding obligations can be influenced by funding requirements that are established by the Employee Retirement Income andSecurity Act of 1974 (ERISA), the Pension Protection Act, Congressional Acts, or other governing bodies. During fiscal 2010 and 2011, we met our requiredcontribution to our defined benefit pension plans. As of December 29, 2012, the net unfunded status of our benefit plan was $46.6 million. The Company’srequired cash contribution to the pension plan in 2012 was approximately $3.3 million. The 2012 required contribution was comprised of approximately $1.2million related to our 2011 minimum required contribution and approximately $2.1 million related to our 2012 minimum required contribution. TheCompany’s minimum required contribution for plan year 2012 was $3.2 million. The Company has funded the $1.2 million related to its 2011 minimumrequired contribution with cash in 2012. However, in an effort to preserve additional cash for operations, we applied for a waiver from the Internal RevenueService (“IRS”) for our 2012 minimum required contribution. The waiver is still being reviewed by the IRS. No assurances can be provided, however, thatany such waiver request will be granted. We have not made the $2.1 million of required 2012 contributions related to the 2012 minimum requiredcontribution. If we are granted the requested waiver, our contributions for 2012 will be amortized over the following five years, increasing our futureminimum required contributions. We are currently required to make three quarterly cash contributions during fiscal 2013 of $0.8 million per quarter related toour 2013 minimum required contribution. We are pursuing contributing personal property to the pension plan during fiscal 2013. We will designate thecontribution such that it will offset our future minimum required contribution. 12Table of Contents 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 towithdraw 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, theinstruments 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 ofdividends 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 toresume 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 ofTransportation, or DOT, regulates our operations in domestic interstate commerce. We are subject to safety requirements governing interstate operationsprescribed by the DOT. Vehicle dimensions and driver hours of service also remain subject to both federal and state regulation. More restrictive limitations onvehicle weight and size, trailer length and configuration, or driver hours of service would increase our costs, which, if we are unable to pass these costincreases 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, butnot 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, wecould be subject to potentially significant fines or penalties for any failure to comply. Moreover, under certain environmental laws, a current or previous owneror 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 costto investigate or clean up such real property and for related damages to natural resources. We may be subject to liability, including liability for investigationand 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 disposedof, or arranged for the disposal of, wastes. Georgia-Pacific has agreed to indemnify us against any claim arising from environmental conditions that existedprior to May 7, 2004 in connection with the properties we acquired when we purchased the assets of 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 coveredby indemnification. In addition, certain remediation costs may not be covered by insurance. We could also be subject to claims brought pursuant to applicablelaws, rules or regulations for property damage or personal injury resulting from the environmental impact of our operations. Increasingly stringentenvironmental requirements, more aggressive enforcement actions, the discovery of unknown conditions or the bringing of future claims may cause ourexpenditures for environmental matters to increase, and we may incur material costs associated with these matters. 13Table of Contents 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 andenforcing employment and labor laws, workplace safety, product safety, environmental laws, consumer protection laws, anti-bribery laws, import/exportcontrols, 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 anygovernmental sanctions are imposed, or if we do not prevail in any possible civil or criminal litigation, our business, operating results and financial conditioncould be materially adversely affected. In addition, responding to any action will likely result in a significant diversion of management’s attention andresources 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 December 29, 2012. As a result, Cerberus is able to control the election ofour directors, determine our corporate and management policies and determine, without the consent of our other stockholders, the outcome of any corporatetransaction or other matter submitted to our stockholders for approval, including potential mergers or acquisitions, asset sales and other significant corporatetransactions. This concentrated ownership position limits other stockholders’ ability to influence corporate matters and, as a result, we may take actions thatsome 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 CapitalManagement. Cerberus also has sufficient voting power to amend our organizational documents. The interests of Cerberus may not coincide with the interestsof other holders of our common stock. Additionally, Cerberus is in the business of making investments in companies and may, from time to time, acquire andhold interests in businesses that compete directly or indirectly with us. Cerberus may also pursue, for its own account, acquisition opportunities that may becomplementary to our business, and as a result, those acquisition opportunities may not be available to us. So long as Cerberus continues to own a significantamount of the outstanding shares of our common stock, it will continue to be able to strongly influence or effectively control our decisions, including potentialmergers or acquisitions, asset sales and other significant corporate transactions. In addition, because we are a controlled company within the meaning of theNew York Stock Exchange rules, we are exempt from the NYSE requirements that our board be composed of a majority of independent directors, that ourcompensation committee be composed entirely of independent directors, and that we maintain a nominating/corporate governance committee composed entirelyof independent directors. Even if Cerberus no longer controls us in the future, certain provisions of our charter documents and agreements and Delaware law coulddiscourage, 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: ●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, withrespect 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 ofsuch series, and the preferences and other special rights, if any, and any qualifications, limitations or restrictions, of the shares of the series; and ●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 restrictionson mergers and other business combinations between us and any holder of 15% or more of our common stock. Further, certain of our incentive plans providefor 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 amerger or acquisition at a premium price. 14Table of Contents 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 breachescould 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 toanticipate 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. Ascyber attacks become more sophisticated generally, we may be required to incur significant costs to strengthen our systems from outside intrusions and/orobtain insurance coverage related to the threat of such attacks. ITEM 1B. UNRESOLVED STAFF COMMENTS. None. ITEM 2. PROPERTIES. We own 52 warehouse facilities and lease 3 additional warehouse facilities. The total square footage under roof at our owned and leased warehouses isapproximately 10 million square feet. Our Denver sales center and 51 of our owned warehouse facilities secure our mortgage loan. Our corporate headquarters located at 4300 Wildwood Parkway, Atlanta, Georgia 30339 is approximately 150,000 square feet. During the fourth quarter offiscal 2007, as part of a restructuring effort, we vacated approximately 100,000 square feet of our corporate headquarters space in the building located at 4100Wildwood Parkway, Atlanta, Georgia 30339 (the “unoccupied 4100 building”). During the third quarter of fiscal 2011, we entered into an amendment to ourcorporate headquarters lease in Atlanta, Georgia related to the unoccupied 4100 building. This amendment released us from our obligations with respect to thisunoccupied space as of January 31, 2012, in exchange for a $5.0 million space remittance fee, which was paid in the first quarter of 2012. We also paid $0.9million in the third quarter of fiscal 2012 and are obligated to pay an additional $0.3 million on or before December 31, 2013 related to contractually obligatedtenant improvement reimbursement expense. The provisions relating to the occupied 4300 building remain unchanged. Under the existing provisions, thecurrent term of the lease ends on January 31, 2019. The amendment resulted in a reduction of our restructuring reserve of approximately $2.0 million, withthe credit recorded in “Selling, general, and administrative” expenses in the Consolidated Statements of Operations included in “Item 8. Financial Statementsand Supplementary Data” during fiscal 2011. 15Table of Contents The following table summarizes our real estate facilities including their inside square footage: Facility Type Number OwnedFacilities (sq. ft.) LeasedFacilities (sq. ft.) Office Space(1) 3 68,721 151,885 Warehouses 55 9,533,243 268,403 TOTAL 58 9,601,964 420,288 (1)Includes corporate headquarters in Atlanta, the Denver Sales Center and a call center in Vancouver. We also store materials, such as lumber and rebar, outdoors at all of our warehouse locations, which increases their distribution and storage capacity. Webelieve that substantially all of our property and equipment is in good condition, subject to normal wear and tear. We believe that our facilities have sufficientcapacity to meet current and projected distribution needs. ITEM 3. LEGAL PROCEEDINGS. We are, and from time to time may be, a party to routine legal proceedings incidental to the operation of our business. The outcome of any pending orthreatened proceedings is not expected to have a material adverse effect on our financial condition, operating results or cash flows, based on our currentunderstanding of the relevant facts. We establish reserves for pending or threatened proceedings when the costs associated with such proceedings becomeprobable and can be reasonably estimated. ITEM 4. MINE SAFETY DISCLOSURES. Not applicable. 16Table of ContentsPART II ITEM 5. MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OFEQUITY SECURITIES. Our equity securities consist of one class of common stock, that is traded on the New York Stock Exchange under the symbol “BXC”. The followingtable sets forth, for the periods indicated, the range of the high and low sales prices for the common stock as quoted on the New York Stock Exchange: High Low Fiscal Year Ended December 29, 2012 First Quarter $2.87 $1.45 Second Quarter $2.89 $1.96 Third Quarter $2.72 $1.97 Fourth Quarter $2.85 $1.83 Fiscal Year Ended December 31, 2011 First Quarter $3.90 $3.41 Second Quarter $4.35 $2.23 Third Quarter $2.40 $1.39 Fourth Quarter $1.90 $1.25 As of February 18, 2013, there were 44 registered stockholders, and, as of that date we estimate there were approximately 2,200 beneficial owners holdingour common stock in nominee or “street” name. In December 2007, we suspended the payment of dividends on our common stock for an indefinite period of time. Resumption of the payment ofdividends 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. See “Item 8. Financial Statements andSupplementary Data, Note 10. Revolving Credit Facilities” for additional information regarding limitations on the ability of BlueLinx Corporation to transferfunds to its parent, BlueLinx Holdings Inc., which could impact our ability to pay dividends to our stockholders. Accordingly, we may not be able to resumethe payment of dividends at the same quarterly rate in the future, if at all. 17Table of Contents Performance Graph The chart below compares the quarterly percentage change in the cumulative total stockholder return on our common stock with the cumulative totalreturn on the Russell 2000 Index and a peer group index for the period commencing December 27, 2007 and ending December 29, 2012, assuming aninvestment of $100 and the reinvestment of any dividends. Our peer group index was selected by us and is comprised of reporting companies with lines of business and product offerings that are comparable toours and which we believe most accurately represent our business. Our peer group consists of the following companies: Beacon Roofing Supply Inc., BuildersFirstsource, Building Materials HLDG CP (through January 4, 2010), Huttig Building Products Inc., Interline Brands Inc., Universal Forest Products Inc.and Watsco Inc. Comparison of Cumulative Total Return Cumulative Total ReturnYears Ending Base Period Company Name/Index 12/29/07 01/03/09 01/02/10 01/01/11 12/31/11 12/29/12 BlueLinx Holdings Inc. $100 $63.87 $70.48 $93.13 $48.11 $90.12 Russell 2000 Index $100 $67.06 $84.20 $106.82 $102.36 $116.67 Peer Group $100 $85.10 $114.88 $139.03 $135.38 $190.70 18Table of Contents ITEM 6. SELECTED FINANCIAL DATA. The following table sets forth certain historical financial data of our Company. The selected financial data for the fiscal years ended December 29, 2012,December 31, 2011, January 1, 2011, January 2, 2010 and January 3, 2009 have been derived from our audited financial statements included elsewhere inthis Annual Report on Form 10-K or from prior financial statements. The following information should be read in conjunction with our financial statementsand “Management’s Discussion and Analysis of Financial Condition and Results of Operations.” Year EndedDecember 29,2012 Year EndedDecember 31,2011 Year EndedJanuary 1,2011 Year EndedJanuary 2,2010 Year EndedJanuary 3,2009 (In thousands, except per share data) Statements 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 supplyagreement — — — (17,772) — Depreciation and amortization 8,565 10,562 13,365 16,984 20,519 Total operating expenses 224,561 218,419 234,550 209,426 323,922 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 — (1,676) (4,603) 6,252 — Write-off of debt issue costs — — 183 1,407 — Other (income) expense, net (7) 501 587 519 601 Loss before provision for (benefit from) income taxes (22,641) (37,605) (53,832) (56,899) (48,137)Provision for (benefit from) 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 sharesoutstanding 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 sharesoutstanding 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 $— $— $— $— $— Year EndedDecember 29,2012 Year EndedDecember 31,2011 Year EndedJanuary 1,2011 Year EndedJanuary 2,2010 Year EndedJanuary 3,2009 (In thousands, except per share data) Other Financial Data: Capital expenditures $2,826 $6,533 $4,140 $1,815 $4,919 EBITDA(1) 14,081 1,791 (11,099) 200 10,929 Net cash (used in) provided by operating activities (74,250) (50,332) (29,861) (19,853) 190,390 Net cash provided by (used in) investing activities 16,369 11,822 (3,429) 12,636 985 Net cash provided by (used in) financing activities 58,171 29,111 18,130 $(113,679) $(56,781)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 19Table of Contents (1)EBITDA is an amount equal to net (loss) income plus interest expense and all interest expense related items (e.g. changes associated with ineffectiveinterest 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 fromoperations that are available for debt service (interest and principal payments) and further investment in acquisitions. However, EBITDA is not apresentation made in accordance with U.S. generally accepted accounting principles, (“GAAP”), and is not intended to present a superior measure of thefinancial condition from those determined under GAAP. EBITDA, as used herein, is not necessarily comparable to other similarly titled captions ofother companies due to differences in methods of calculations. (2)Total debt represents long-term debt related to our mortgage and revolving credit facilities, including current maturities and capital lease obligations. A reconciliation of net cash (used in) provided by operating activities, the most directly comparable GAAP measure, to EBITDA for each of the respectiveperiods indicated is as follows (in thousands): Year EndedDecember 29,2012 Year EndedDecember 31,2011 Year EndedJanuary 1,2011 Year EndedJanuary 2,2010 Year EndedJanuary 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 supplyagreement — — — 17,772 — Payments from terminating the Georgia-Pacific supplyagreement — — (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 Provision for (benefit from) income taxes 386 962 (589) 4,564 (16,434)EBITDA $14,081 $1,791 $(11,099) $200 $10,929 ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS. The following discussion should be read in conjunction with our consolidated financial statements and related notes and other financialinformation appearing elsewhere in this Form 10-K. In addition to historical information, the following discussion and other parts of this Form 10-Kcontain forward-looking information that involves risks and uncertainties. Our actual results could differ materially from those anticipated by thisforward-looking information due to the factors discussed under “Risk Factors,” “Cautionary Statement Concerning Forward-Looking Statements”and elsewhere in this Form 10-K. Overview Company Background BlueLinx is a leading distributor of building products in the United States. As of December 29, 2012, we distributed approximately 10,000 productsfrom over 750 suppliers to service approximately 11,500 customers nationwide, including dealers, industrial manufacturers, manufactured housingproducers and home improvement retailers. We operate our distribution business from sales centers in Atlanta and Denver, and our network of approximately55 distribution centers. We distribute products in two principal categories: structural products and specialty products. Structural products include plywood,OSB, rebar and remesh, lumber and other wood products primarily used for structural support, walls and flooring in construction projects. Structuralproducts represented approximately 42% and 39% of our fiscal 2012 and fiscal 2011 gross sales, respectively. Specialty products include roofing, insulation,moulding, engineered wood, vinyl products (used primarily in siding), outdoor living and metal products (excluding rebar and remesh). Specialty productsaccounted for approximately 58% and 61% of our fiscal 2012 and fiscal 2011 gross sales, respectively. 20Table of Contents Industry Conditions We operate in a changing environment in which new risks can emerge from time to time. A number of factors cause our results of operations to fluctuatefrom period to period. Many of these factors are seasonal or cyclical in nature. Conditions in the United States (“U.S.”) housing market continue to be athistorically low levels. Our operating results have declined during the past several years as they are closely tied to U.S. housing starts. Additionally, themortgage markets have experienced substantial disruption due to an unprecedented number of defaults in the “subprime” market. This disruption and therelated defaults have increased the inventory of homes for sale and also have caused lenders to tighten mortgage qualification criteria, which further reducesdemand for new homes. While there has been some recent improvement, we expect the lower than historical average level of new housing activity will continueto negatively impact our operating results. We continue to prudently manage our inventories, receivables and spending in this environment. However, alongwith many forecasters, we believe that we are in the beginning of a housing recovery and that U.S. housing demand will continue to improve in the long termbased on population demographics and a variety of other factors. As the housing market and general economic conditions continue to improve, the Company believes that additional capital would allow the Company toparticipate more fully in these improving conditions, and therefore the Company currently is seeking additional capital. The Company’s sales depend heavilyon the strength of national and local new residential construction and home improvement and remodeling markets, which are showing signs of significantimprovement. Moreover, the government’s legislative and administrative measures aimed at restoring liquidity to the credit markets and providing relief tohomeowners facing foreclosure are beginning to show positive results. The overall housing market and economy are also improving, which is expected to leadto a considerable increase in residential construction and, to a lesser extent, in home improvement activity. If the Company and its industry continue to recoverfrom the historic housing market downturn, the Company expects its sales to improve and therefore its need for inventory and its accounts receivable toincrease. This increase in working capital is expected to use some of the Company’s current excess availability under its revolving credit facilities. Stock Rights Offerings On January 10, 2013, we filed a registration statement on Form S-1 with the SEC for a planned rights offering of our common stock to our stockholders,which seeks to raise gross proceeds of $40 million. In addition to being able to purchase their pro rata portion of the shares offered based on their ownership asof the record date for the rights offering, stockholders may oversubscribe for additional shares of common stock. The estimated net proceeds from the rightsoffering of approximately $39 million will be used to pay down the U.S. revolving credit facility. Cerberus ABP Investor LLC (“Cerberus”), the Company’smajority stockholder, has indicated that it intends, subject to the exercise price of the rights being set at an acceptable amount, to exercise all of the rightsissued to it 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. The Company anticipates that the record date and the subscription price will bedetermined at or about the time that the SEC declares the Company’s registration statement effective. On July 22, 2011, we concluded an offering of our common stock to our stockholders (the “2011 rights offering”), pursuant to which we distributed toour common stockholders transferable rights to subscribe for and purchase up to $60 million of our common stock. The 2011 rights offering was fullysubscribed and resulted in gross proceeds of approximately $60 million. The net proceeds from the 2011 rights offering were approximately $58 million,and $56 million of the net proceeds were used to pay down the U.S. revolving credit facility. We accounted for the rights issued as a component of additionalpaid in capital as they were indexed to the Company’s equity and there were no net cash settlement provisions. Private Label Products On February 12, 2012, our three-year purchase agreement with G-P for engineered lumber expired in accordance with its terms. In February of 2012, welaunched our own privately branded engineered product line for all geographic markets other than New England. In addition, on February 13, 2012 we enteredinto a distribution agreement with Weyerhaeuser Company for the sale of certain engineered wood products in the New England region. We have subsequentlyincreased the number of private label products that we offer to customers and currently offer several products under our private labels. 21Table of Contents Restructuring Charges During fiscal 2007, we announced a plan to adjust our cost structure in order to manage our costs more effectively. The plan included the consolidation ofour corporate headquarters and sales center to one building from two buildings which resulted in certain charges recorded in “Selling, general, andadministrative” expenses in the Consolidated Statements of Operations during the fourth quarter of fiscal 2007. During the third quarter of fiscal 2011, we entered into an amendment to our corporate headquarters lease in Atlanta, Georgia related to the unoccupied4100 building. This amendment released us from our obligations with respect to this unoccupied space as of January 31, 2012, in exchange for a $5.0 millionspace remittance fee, which was paid in the first quarter of 2012. We also paid $0.9 million in the third quarter of fiscal 2012 and are obligated to pay anadditional $0.3 million on or before December 31, 2013 related to contractually obligated tenant improvement reimbursement expense. The provisions relatingto the occupied 4300 building remain unchanged. Under the existing provisions, the current term of the lease ends on January 31, 2019. The amendmentresulted in a reduction of our restructuring reserve of approximately $2.0 million, with the credit recorded in “Selling, general, and administrative” expenses inthe Consolidated Statements of Operations during fiscal 2011. Selected Factors that Affect our Operating Results Our operating results are affected by housing starts, mobile home production, industrial production, repair and remodeling spending and non-residentialconstruction. We believe a substantial percentage of our sales are directly related to new home construction. Our operating results also are impacted by changes in product prices. Structural products prices can vary significantly based on short-term and long-termchanges in supply and demand. The prices of specialty products also can vary from time to time, although they generally are significantly less variable thanstructural products. The following table sets forth changes in net sales by product category, sales variances due to changes in unit volume and dollar and percentage changesin unit volume and price, in each case for fiscal 2012, fiscal 2011 and fiscal 2010: Sales Revenue Variances by Product Fiscal 2012 Fiscal 2011 Fiscal 2010 (Dollars in millions) Sales by Category Structural Products $806 $705 $835 Specialty Products 1,114 1,068 985 Other(1) (12) (18) (16)Total Sales $1,908 $1,755 $1,804 Sales Variances Unit Volume $ Change $42 $(52) $36 Price/Other(1) 111 3 122 Total $ Change $153 $(49) $158 Unit Volume % Change 2.3% (2.8)% 2.2%Price/Other(1) % Change 6.4% 0.1% 7.4%Total % Change 8.7% (2.7)% 9.6% (1)“Other” includes unallocated allowances and discounts. 22Table of Contents The following table sets forth changes in gross margin dollars and percentages by product category, and percentage changes in unit volume growth byproduct, in each case for fiscal 2012, fiscal 2011 and fiscal 2010: Fiscal 2012 Fiscal 2011 Fiscal 2010 (Dollars in millions) Gross Margin $ by Category Structural Products $77 $65 $74 Specialty Products 146 137 129 Other(1) 7 8 8 Total Gross Margin $230 $210 $211 Gross Margin % by Category Structural Products 9.6% 9.2% 8.9%Specialty Products 13.1% 12.8% 13.1%Total Gross Margin % 12.1% 12.0% 11.7%Unit Volume % Change by Product Structural Products 1.4% (15.1)% (2.5)%Specialty Products 2.9% 7.4% 5.7%Total Unit Volume % Change 2.3% (2.8)% 2.2% (1)“Other” includes unallocated allowances and discounts. The following table sets forth changes in net sales and gross margin by channel and percentage changes in gross margin by channel, in each case forfiscal 2012, fiscal 2011 and fiscal 2010: Fiscal 2011 Fiscal 2011 Fiscal 2010 (Dollars in millions) Sales by Channel Warehouse/Reload $1,534 $1,397 $1,409 Direct 386 376 411 Other(1) (12) (18) (16)Total $1,908 $1,755 $1,804 Gross Margin by Channel Warehouse/Reload $199 $179 $182 Direct 24 23 21 Other(1) 7 8 8 Total $230 $210 $211 Gross Margin % by Channel Warehouse/Reload 13.0% 12.8% 12.9%Direct 6.2% 6.1% 5.1%Total 12.1% 12.0% 11.7% (1)“Other” includes unallocated allowances and discounts. Fiscal Year Our fiscal year is a 52- or 53-week period ending on the Saturday closest to the end of the calendar year. Fiscal year 2012, 2011, and 2010 contained52 weeks. Results of Operations Fiscal 2012 Compared to Fiscal 2011 The following table sets forth our results of operations for fiscal 2012 and fiscal 2011. Fiscal 2012 % ofNetSales Fiscal 2011 % ofNetSales (Dollars in thousands) Net sales $1,907,842 100.0% $1,755,431 100.0%Gross profit 230,070 12.1% 210,149 12.0%Selling, general and administrative 215,996 11.3% 207,857 11.8%Depreciation and amortization 8,565 0.4% 10,562 0.6%Operating income (loss) 5,509 0.3% (8,270) (0.5)%Interest expense, net 28,157 1.5% 30,510 1.7%Changes associated with the ineffective interest rate swap — 0.0% (1,676) (0.1)%Other income (expense), net (7) 0.0% 501 0.0%Loss before provision for income taxes (22,641) (1.2)% (37,605) (2.1)%Provision for income taxes 386 0.0% 962 0.1%Net loss $(23,027) (1.2)% $(38,567) (2.2)% 23Table of Contents Net sales. For the fiscal year ended December 29, 2012, net sales increased by 8.7%, or $152.4 million, to $1.9 billion. Sales during the fiscal yearwere positively impacted by a 28% increase in single family housing starts. Single family home construction has a significant impact on our sales. Structuralsales increased by $101.2 million, or 14.3% from a year ago, as a result of a 12.9% increase in structural product prices and a 1.4% increase in unitvolume. In addition, specialty sales increased $45.8 million, or 4.3% from a year ago, as a result of a 1.4% increase in specialty product prices and a 2.9%increase in unit volume. Gross profit. Gross profit for fiscal 2012 was $230.1 million, or 12.1% of sales, compared to $210.1 million, or 12.0% of sales, in fiscal 2011. Theincrease in gross profit dollars compared to fiscal 2011 was driven primarily by the factors noted above, coupled with an improvement in gross marginpercentage due to the Company’s efforts to improve gross margin. Selling, general and administrative. Selling, general and administrative expenses for fiscal 2012 were $216.0 million, or 11.3% of net sales, comparedto $207.9 million, or 11.8% of net sales, during fiscal 2011. The increase in selling, general, and administrative expenses is primarily due to a reduction inother gains recorded in selling, general and administrative expenses in 2012 when compared to 2011 coupled with increases in certain variable costs andpension expense. During 2012 the Company recognized $10.4 million of other gains compared to $14.0 million of other gains recognized in fiscal 2011, bothof which were recorded in selling, general and administrative expenses, resulting in an increase in total selling, general, and administrative expenses of $3.6million. In addition, during fiscal 2012 there were increases in pension expense, commissions, stock compensation and other salary based incentives of $2.1million, $0.7 million, $0.8 million and $1.7 million, respectively. These increases were partially offset by a decrease in payroll of $2.8 million. The other gains recorded in selling, general and administrative expenses during fiscal 2012 were comprised of $9.9 million of gains on property sales anda $0.5 million gain related to the insurance settlement on the Newtown, Connecticut facility. In comparison, during fiscal 2011, other gains recorded inselling, general and administrative expenses were comprised of $10.6 million of gains on property sales, a $2.0 million gain related to the modification of thelease agreement for our headquarters in Atlanta, Georgia and a $1.4 million gain related to the insurance settlement on the Newtown, Connecticut facility. Theincrease in pension expense was due to changes in the underlying pension valuation assumptions. The increases in incentives and commissions were largelyattributable to higher sales activity in fiscal 2012. The $2.8 million decrease in payroll was due to reduction in force activities occurring in fiscal 2011,which resulted in $1.4 million in severance charges in fiscal 2011. We did not materially increase headcount during fiscal 2012 or perform any materialrestructuring. Depreciation and amortization. Depreciation and amortization expense was $8.6 million for fiscal 2012, compared to $10.6 million for fiscal 2011.The $2.0 million decrease in depreciation and amortization is primarily related to a portion of our property and equipment becoming fully depreciated duringfiscal 2012 and replenishment of fixed assets occurring at a slower rate. Operating income (loss). Operating income for fiscal 2012 was $5.5 million compared to an operating loss of $8.3 million for fiscal 2011. The changein operating income (loss) reflects a $19.9 million increase in gross profit as a result of the above factors, and a decrease in depreciation of $2.0 million. Thischange was partially offset by an increase in selling, general, and administrative expenses of $8.1 million. Interest expense, net. Interest expense for fiscal 2012 was $28.2 million compared to $30.5 million for fiscal 2011. The $2.3 million decrease is due to adecrease of $2.2 million in fees related to the interest rate swap due to the expiration of the interest rate swap during fiscal 2011 and a decrease in interestexpense related to our mortgage of $2.3 million due to a decrease in principal. These changes were partially offset by an increase in interest related to ourrevolving credit facilities of $1.4 million and an increase in debt issuance cost amortization of $0.8 million. Interest expense included $3.7 million and $2.9million of debt issue cost amortization for fiscal 2012 and fiscal 2011, respectively. In fiscal 2012, interest expense related to our revolving credit facilitiesand mortgage was $9.6 million and $14.7 million, respectively. In fiscal 2011, interest expense related to our revolving credit facilities and mortgage was$10.3 million and $17.0 million, respectively. See “Liquidity and Capital Resources” below for a description of agreements for the revolving credit facilitiesand the mortgage. Changes associated with the ineffective interest rate swap. Changes associated with the ineffective interest rate swap totaled $1.7 million of income infiscal 2011. As the effective interest rate swap terminated in March of 2011, there was no comparable activity in the fiscal 2012. 24Table of Contents Provision for income taxes. Our effective tax rate was (1.7)% and (2.5)% for fiscal 2012 and fiscal 2011, respectively. The effective tax rate for fiscal2012 and 2011 is largely due to a full valuation allowance recorded against our tax benefit related to our fiscal 2012 loss. The effect of the valuation allowancewas offset by state income taxes, gross receipts taxes, and foreign income taxes recorded on a separate company basis partially offset by various refundable taxcredits. Net loss. Net loss for fiscal 2012 was $23.0 million, compared to $38.6 million for fiscal 2011 as a result of the factors discussed above. On a per-share basis, basic and diluted loss applicable to common stockholders for fiscal 2012 each was $0.38. For fiscal 2011, basic and diluted lossper share each was $0.89. Fiscal 2011 Compared to Fiscal 2010 The following table sets forth our results of operations for fiscal 2011 and fiscal 2010. Fiscal 2011 % ofNetSales Fiscal 2010 % ofNetSales (Dollars in thousands) Net sales $1,755,431 100.0% $1,804,418 100.0%Gross profit 210,149 12.0% 210,673 11.7%Selling, general and administrative 207,857 11.8% 221,185 12.3%Depreciation and amortization 10,562 0.6% 13,365 0.7%Operating loss (8,270) (0.5)% (23,877) (1.3)%Interest expense, net 30,510 1.7% 33,788 1.9%Changes associated with the ineffective interest rate swap (1,676) (0.1)% (4,603) (0.3)%Write-off of debt issue costs — 0.0% 183 0.0%Other expense, net 501 0.0% 587 0.0%Loss before provision for (benefit from) income taxes (37,605) (2.1)% (53,832) (3.0)%Provision for (benefit from) income taxes 962 0.1% (589) 0.0%Net loss $(38,567) (2.2)% $(53,243) (3.0)% Net sales. For the fiscal year ended December 31, 2011, net sales decreased by 2.7%, or $49.0 million, to $1.8 billion. Sales during the fiscal year werenegatively impacted by a 9% decrease in single family housing starts. Single family home construction has a significant impact on our sales. Structural sales,including plywood, OSB, lumber and metal rebar, decreased by $129.8 million, or 15.5% from a year ago, as a result of a 0.4% decrease in structuralproduct prices and a 15.1% decrease in unit volume. The decrease in structural sales was partially offset by an increase in specialty sales. Specialty sales,primarily consisting of roofing, specialty panels, insulation, moulding, engineered wood products, vinyl siding, outdoor living and metal products (excludingrebar and remesh) increased by $84.6 million or 8.4% compared to fiscal 2010, due to a 7.4% increase in unit volume and a 1.0% increase in specialtyproduct prices. Gross profit. Gross profit for fiscal 2011 was $210.1 million, or 12.0% of sales, compared to $210.7 million, or 11.7% of sales, in fiscal 2010. Thedecrease in gross profit dollars compared to fiscal 2010 was driven primarily by a decrease in structural product volumes of 15.1% offset by an increase inspecialty product volumes of 7.4%. Selling, general and administrative. Selling, general and administrative expenses for fiscal 2011 were $207.9 million, or 11.8% of net sales, comparedto $221.2 million, or 12.3% of net sales, during fiscal 2010. The decrease in selling, general, and administrative expenses is due to $10.6 million of propertysale gains that were recognized in fiscal 2011, a $2.0 million gain related to the modification of the lease agreement for our headquarters in Atlanta, Georgia,and a $1.4 million gain related to the insurance settlement on the Newtown, Connecticut facility. There were no similar property gains in fiscal 2010. However,in fiscal 2010 there were expenses incurred related to the failed tender offer of $3.0 million partially offset by a gain related to the settlement received on an OSBclass action lawsuit in which we were a claimant of $5.2 million. In addition, decreases in payroll and payroll related costs of $1.7 million, as well asdecreases in stock compensation expense of $2.0 million also contributed to the overall decrease in selling, general and administrative expense. These changeswere largely related to fiscal 2011 reduction in force activities, as well as the vesting of certain restricted stock grants during fiscal 2011. Partially offsettingthese fluctuations were increases to fuel expense and other operating expenses of $2.9 million and $1.4 million, respectively. 25Table of Contents Depreciation and amortization. Depreciation and amortization expense was $10.6 million for fiscal 2011, compared to $13.4 million for fiscal 2010.The $2.8 million decrease in depreciation and amortization is primarily related to fiscal 2011 sales of certain depreciable properties, a portion of our propertyand equipment becoming fully depreciated during fiscal 2011 and replenishment of fixed assets occurring at a slower rate. Operating loss. Operating loss for fiscal 2011 was $8.3 million, or 0.5% of sales, compared to an operating loss of $23.9 million, or 1.3% of sales, forfiscal 2010, reflecting the $13.3 million decrease in selling, general and administrative expense and a $2.8 million decrease in depreciation and amortizationoffset by a $0.5 million decrease in gross profit. Interest expense, net. Interest expense for fiscal 2011 was $30.5 million compared to $33.8 million for fiscal 2010. The $3.3 million decrease is due tothe $45.1 million decrease in total debt and the related effect on interest expense. In fiscal 2011, interest expense related to our revolving credit facilities(including the Canadian revolving credit facility), and mortgage was $10.3 million and $17.0 million, respectively. In fiscal 2010, interest expense related toour U.S. revolving credit facility and mortgage was $13.3 million and $18.3 million, respectively. In addition, interest expense included $2.9 million and$2.0 million of debt issue cost amortization for fiscal 2011 and for fiscal 2010, respectively. Changes associated with the ineffective interest rate swap. Changes associated with the ineffective interest rate swap recognized for fiscal 2011 wasincome of $1.7 million compared to $4.6 million of income for fiscal 2010. The decrease is primarily related to the change in the swap’s fair value and adecrease in amortization of the accumulated loss in other comprehensive income into interest expense due to the termination of the swap in March 2011. Write-off of debt issue costs. During fiscal 2010, we permanently reduced our revolving loan threshold limit. As a result, we recorded expense of $0.2million, for the write-off of deferred financing costs that had been capitalized associated with the borrowing capacities that were reduced during theseperiods. No similar activity occurred during fiscal 2011. Provision for (benefit from) income taxes. Our effective tax rate was (2.5)% and 1.1% for fiscal 2011 and fiscal 2010, respectively. The effective taxrate for fiscal 2011 is largely due to a full valuation allowance recorded against our tax benefit related to our 2011 loss. The effect of the valuation allowancewas offset by state income taxes, gross receipts taxes, and foreign income taxes recorded on a separate company basis partially offset by various refundable taxcredits. The effective tax rate for fiscal 2010 is largely due to a full valuation allowance recorded against our tax benefit related to our fiscal 2010 loss and anallocation of income tax expense to other comprehensive income resulting in a tax benefit to continuing operations. This tax benefit was partially offset bygross receipts and other taxes. Net loss. Net loss for fiscal 2011 was $38.6 million, compared to $53.2 million for fiscal 2010 as a result of the factors discussed above. On a per-share basis, basic and diluted loss applicable to common stockholders for fiscal 2011 each was $0.89. For fiscal 2010, basic and diluted lossper share each was $1.73. Seasonality We are exposed to fluctuations in quarterly sales volumes and expenses due to seasonal factors. These seasonal factors are common in the buildingproducts distribution industry. The first and fourth quarters are typically our slowest quarters due to the impact of poor weather on the construction market.Our second and third quarters are typically our strongest quarters, reflecting a substantial increase in construction due to more favorable weather conditions.Our working capital and accounts receivable and payable generally peak in the third quarter, while inventory generally peaks in the second quarter inanticipation of the summer building season. Liquidity and Capital Resources We depend on cash flow from operations and funds available under our revolving credit facilities to finance working capital needs and capitalexpenditures. We had approximately $86.0 million of excess availability under our U.S. revolving credit facility (the “U.S. revolving credit facility”) and $2.0million under our Canadian revolving credit facility, described further below, as of December 29, 2012. As of December 29, 2012, we had excess availabilityof $49.8 million above the minimum required under the U.S. revolving credit facility. As of the period ended December 29, 2012, under our amended 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 $30million or the amount equal to 15% of the lesser of the borrowing base or $400 million (the “Excess Availability Threshold”). If we fail to maintain thisminimum excess availability, the amended U.S. revolving credit facility requires us to (i) maintain certain financial ratios, which we would not meet withcurrent operating results, triggering the lender’s right to make the debt callable, and (ii) limit our capital expenditures, which would have a negative impact onour ability to finance working capital needs and capital expenditures. 26Table of Contents In the event that excess availability falls below $35 million or 15% of the lesser of the borrowing base or $400 million, the U.S. revolving credit facilitygives the lenders the right to dominion of our bank accounts. This would not make the underlying debt callable by the lender and may not change our abilityto borrow on the U.S. revolving credit facility. However, we would be required to reclassify the “Long-term debt” to “Current maturities of long-term debt” onour Consolidated Balance Sheet. For additional information regarding our financial covenants under our revolving credit facilities, see the Risk Factors “Theinstruments governing our indebtedness contain various covenants limiting the discretion of our management in operating our business” set forthunder Item 1.A. Risk Factors. While the Company believes that the amounts currently available from its revolving credit facilities and other sources will be sufficient to fund its routineoperations and capital requirements for at least the next 12 months, the Company believes that additional capital will provide it with a stronger liquidityposition and allow it to more fully participate in the improving housing market. The Company believes that this stronger liquidity position will also give theCompany an advantage over many competitors that have less liquidity and less or no access to additional capital, and therefore may not be able to fullyparticipate in the opportunities that arise in a growing market. On January 10, 2013, we filed a registration statement on Form S-1 with the SEC for a planned rights offering of our common stock to our stockholders,which seeks to raise gross proceeds of $40 million. In connection with the rights offering we plan to distribute to our common stockholders non-transferablerights to subscribe for and purchase up to $40 million of our common stock. The estimated net proceeds from the rights offering of approximately $39million will be used to pay down the U.S. revolving credit facility. On July 22, 2011, we concluded an offering of our common stock to our stockholders, pursuant to which we distributed to our common stockholderstransferable rights to subscribe for and purchase up to $60 million of our common stock. The 2011 rights offering was fully subscribed and resulted ingross proceeds of approximately $60 million. The majority of the net proceeds from the 2011 rights offering were used to pay down the U.S. revolving creditfacility. The amendment to our U.S. revolving credit facility, which was a condition to the 2011 rights offering, and is described in more detail below, becameeffective upon the successful completion of the 2011 rights offering. In addition, as a condition to the 2011 rights offering, we entered into an amendment toour mortgage, as described in the Debt and Credit Sources section of this MD&A of Financial Condition and Results of Operations. We may elect to selectively pursue acquisitions. Accordingly, depending on the nature of the acquisition, we may use cash or stock, or a combination ofboth, as acquisition currency. Our cash requirements may significantly increase and incremental cash expenditures will be required in connection with theintegration of the acquired company’s business and to pay fees and expenses in connection with any acquisitions. To the extent that significant amounts ofcash are expended in connection with acquisitions, our liquidity position may be adversely impacted. In addition, there can be no assurance that we will besuccessful in completing acquisitions in the future. For a discussion of the risks associated with our acquisition strategy, see the risk factor “Integratingacquisitions may be time-consuming and create costs that could reduce our net income and cash flows” set forth under Item 1A — Risk Factors. The following tables indicate our working capital and cash flows for the periods indicated. December 29,2012 December 31,2011 (Dollars in thousands) Working capital $272,403 $233,414 Year EndedDecember 29,2012 Year EndedDecember 31,2011 Year EndedJanuary 1,2011 (Dollars inthousands) Cash flows used in operating activities $(74,250) $(50,332) $(29,861)Cash flows provided by (used in) investing activities 16,369 11,822 (3,429)Cash flows provided by (used in) financing activities 58,171 29,111 18,130 27Table of Contents Working Capital Working capital increased by $39.0 million to $272.4 million at December 29, 2012 from $233.4 million at December 31, 2011. The increase in workingcapital reflected an increase in accounts receivable and cash of $18.6 million and was primarily related to higher revenues in the fourth quarter of fiscal 2012compared to fiscal 2011. In addition, inventories increased by approximately $44.5 million largely related to the increased activity in the fourth quarter offiscal 2012 coupled with a build in inventory to prepare for the expected growth associated with the housing recovery. There was also a decrease to othercurrent liabilities of $5.6 million that contributed to the overall increase in working capital, which was mainly comprised of payments of $5.9 million madeduring fiscal 2012 associated with the 2011 amendment to our lease agreement in Atlanta, Georgia related to the unoccupied 4100 building. These increaseswere partially offset by a $13.0 million increase in bank overdrafts due to the timing of payments, a decrease in other current assets of $7.7 million and a$7.6 million increase in accounts payable, reflected as a $9.1 million change in the operating activities section of the Consolidated Statement of Cash Flowsnet of $1.5 million of payments for debt issuance costs, which were reflected in the financing activities section of the Consolidated Statement of Cash Flows.The change in other current assets was largely attributable to decreases in restricted cash associated with our mortgage. In an effort to preserve workingcapital, we have applied for a waiver from the IRS for one or more of our required contributions relating to the minimum required contribution for 2012 withrespect to our defined benefit plans. Operating Activities During fiscal 2012, cash flows used in operating activities totaled $74.3 million. The primary driver of cash flows used in operations was a net loss, asadjusted for non-cash charges of $18.3 million, an increase in accounts receivable of $18.6 million and an increase in inventory of $44.5 million. Inaddition, we made payments totaling $5.9 million associated with the 2011 amendment to our lease agreement in Atlanta, Georgia related to the unoccupied4100 building. These changes were partially offset by an increase in accounts payable of $9.1 million. This change in accounts payable was classified netof $1.5 million of payments for debt issuance costs, which were classified in cash flows from financing activities. Refer to the Working Capital sectionabove for further discussion of these items. During fiscal 2011, cash flows used in operating activities totaled $50.3 million. The primary driver of cash flow used in operations was a net loss, asadjusted for non-cash charges of $38.9 million, an increase in accounts receivable of $19.7 million, partially offset by a decrease in inventory of $2.7 and anincrease in accounts payable of $6.7 million. Refer to the Working Capital section above for further discussion of these items. During fiscal 2010, cash flows used in operating activities totaled $29.9 million. The primary driver of cash flow used in operations was a net loss, asadjusted for non-cash charges of $38.9 million, an increase in inventory of $15.1 million due to the addition of a new outdoor living product line, partiallyoffset by the receipt of our $20.4 million tax refund in fiscal 2010. Investing Activities During fiscal 2012, cash flows provided by investing activities totaled $16.4 million, compared to $11.8 million in fiscal 2011. During fiscal 2012, fiscal 2011 and fiscal 2010, our expenditures for property and equipment were $2.8 million, $6.5 million and $4.1 million,respectively. These expenditures were primarily to purchase information technology, leasehold improvements, and certain machinery and equipment. Duringfiscal 2011 we also purchased a replacement warehouse facility in Nashville, Tennessee. We estimate that capital expenditures for fiscal 2013 will beapproximately $6.0 million. Our 2013 capital expenditures are anticipated to be paid with borrowings from our revolving credit facilities. Proceeds from the disposition of property and equipment were $19.2 million, $18.4 million and $0.7 million during fiscal 2012, fiscal 2011 and fiscal2010, respectively. During fiscal 2012, the proceeds of $19.2 million included $17.8 million related to the sale of certain real properties classified as held forsale assets included in “Other current assets” on our Consolidated Balance Sheets. During fiscal 2011, the proceeds of $18.4 million included $9.2 millionrelated to the sale of certain real properties classified as held for sale assets included in “Other current assets” on our Consolidated BalanceSheets. Comparable sales of real properties did not occur during fiscal 2010. 28Table of Contents Financing Activities Net cash provided by financing activities was $58.2 million during fiscal 2012, compared to $29.1 million during fiscal 2011. The net cash providedby financing activities in fiscal 2012 primarily reflected net borrowings on our revolving credit facility of $76.9 million, increases in bank overdrafts of$13.0 million and $10.0 million related to the decrease in restricted cash on our mortgage. These cash inflows were offset by payments of principal on ourmortgage of $37.3 million and payments for debt financing costs of $1.7 million. The net cash provided by financing activities in fiscal 2011 primarily reflected the receipt of proceeds from the 2011 rights offering, netted with expensesrelated to that offering, of $58.5 million and cash provided by changes in restricted cash related to our mortgage of $20.6 million. These cash inflows wereoffset by additional repayments on our revolving credit facilities of $2.7 million (net of borrowings) and payments of principal on our mortgage of $42.4million. During fiscal 2010, net cash provided by financing activities primarily reflected additional borrowings on our U.S. revolving credit facility of$41.2 million (net of payments made), offset by an increase in restricted cash related to our mortgage of $11.2 million. Debt and Credit Sources We have our U.S. revolving credit facility with Wells Fargo Bank, National Association, successor by merger to Wachovia Bank, National Association,dated August 4, 2006, as amended. The U.S. revolving credit facility has a final maturity of January 7, 2014 and maximum available credit of$400 million. The U.S. revolving credit facility also includes an additional $100 million uncommitted accordion credit facility, which permits us to increasethe maximum available credit up to $500 million. 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 interest rate on the U.S. revolving credit facility was 4.1% at December 29, 2012. As of December 31, 2011, we hadoutstanding borrowings of $93.4 million and excess availability of $115.7 million under the terms of our U.S. revolving credit facility. The interest rate onthe U.S. revolving credit facility was 4.2% at December 31, 2011. As of December 29, 2012 and December 31, 2011, we had outstanding letters of credittotaling $4.5 million and $2.7 million, respectively, for the purposes of securing collateral requirements under casualty insurance programs and forguaranteeing lease and certain other obligations. The $4.5 million in outstanding letters of credit as of December 29, 2012 does not include an additional $1.5million fully collateralized letter of credit securing certain insurance obligations that was issued outside of the U.S. revolving credit facility. As of December 29, 2012, our U.S. revolving credit facility, as amended, contains customary negative covenants and restrictions for asset based loans,including a requirement that we maintain a fixed charge coverage ratio of 1.1 to 1.0 in the event our excess availability falls below the Excess AvailabilityThreshold. The fixed charge coverage ratio is calculated as EBITDA divided by the sum of cash payments for income taxes, interest expense, cashdividends, principal payments on debt, and capital expenditures. EBITDA is defined as BlueLinx Corporation’s net income before interest and tax expense,depreciation and amortization expense, and other non-cash charges. The fixed charge coverage ratio requirement only applies to us when excess availabilityunder our amended U.S. revolving credit facility is less than the Excess Availability Threshold on any date. As of December 29, 2012 and through the time ofthe filing of this Form 10-K, we were in compliance with all covenants under the U.S. revolving credit facility. We are required to maintain the ExcessAvailability Threshold in order to avoid being required to meet certain financial ratios and triggering additional limits on capital expenditures. Our lowest levelof fiscal month-end availability in the last three years as of December 29, 2012 was $86.0 million, which is the excess availability on that date. We do notanticipate our excess availability in fiscal 2013 will drop below the Excess Availability Threshold. Should our excess availability fall below the ExcessAvailability Threshold on any date, however, we would not meet the required fixed charge coverage ratio covenant with our current operating results. In the event that excess availability falls below $35 million or the amount equal to 15% of the lesser of the borrowing base or $400 million, the U.S.revolving credit facility gives the lenders the right to dominion of our bank accounts. This would not make the underlying debt callable by the lender and maynot change our ability to borrow on the U.S. revolving credit facility. However, we would be required to reclassify the “Long-term debt” to “Current maturitiesof long-term debt” on our Consolidated Balance Sheet. In addition, we would be required to maintain a springing lock-box arrangement where customerremittances go directly to a lock-box maintained by our lenders and then are forwarded to our general bank accounts. Our outstanding borrowings are notreduced by these payments unless our excess availability falls below the greater of $35 million or the amount equal to 15% of the lesser of the borrowing baseor $400 million on any date or in the event of default. Our amended U.S. revolving credit facility does not contain a subjective acceleration clause, whichwould allow our lenders to accelerate the scheduled maturities of our debt or to cancel our agreement. 29Table of Contents The Company intends to amend and extend its $400 million U.S. revolving credit facility. The amendment will extend the maturity by three years fromthe 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 $422.5million. The amended U.S. revolving credit facility is also expected to continue to have a $100 million uncommitted accordion credit facility to potentiallyincrease the maximum available credit to $522.5 million. The amended U.S. revolving credit facility is expected to have covenants substantially similar tothose in the existing U.S. credit facility. The Company has engaged Wells Fargo Capital Finance (“Wells Fargo”) as sole lead arranger for the transaction. Wells Fargo has informed theCompany that it has received commitments from several financial institutions with respect to the U.S. revolving credit facility, subject to execution ofsatisfactory documentation and the completion of the $40 million rights offering of common stock announced on January 10, 2013. Closing is expected tooccur concurrently with the completion of the rights offering of common stock. The definitive terms of, and the obligations of BlueLinx, Wells Fargo, and/orany members of the syndicate of financial institutions to enter into such an amendment to the U.S. revolving credit facility are subject to additionaldiscussions and negotiations among the parties, and there is no assurance that an amendment to the existing U.S. revolving credit facility will beconsummated. On May 10, 2011, we entered into an amendment to our U.S. revolving credit facility, which became effective on July 29, 2011 pursuant to whichcertain components of the borrowing base calculation and excess liquidity calculation were adjusted as part of this amendment. The most significant of thechanges included in the amendment are described in the discussion of the terms and covenants of the U.S. revolving credit facility above. On August 12, 2011, our subsidiary BlueLinx Canada entered into a revolving credit agreement (the “Canadian revolving credit facility”) with CIBCAsset-Based Lending Inc., as lender, administrative agent and collateral agent (the “Agent”). The maturity date of this agreement is August 12, 2014. As ofDecember 29, 2012, we had outstanding borrowings of $1.9 million and excess availability of $2.0 million under the terms of our Canadian revolving creditfacility. The interest rate on the Canadian revolving credit facility was 4.0% at December 29, 2012. As of December 31, 2011, we had outstandingborrowings of $1.1 million and excess availability of $2.6 million under the terms of our Canadian revolving credit facility. The interest rate on the Canadianrevolving credit facility was 4.0% at December 31, 2011. The Canadian revolving credit facility contains customary covenants and events of default for asset-based credit agreements of this type, including the requirement for BlueLinx Canada to maintain a minimum adjusted tangible net worth of $3.9 million andfor that entity’s capital expenditures not to exceed 120% of the amount budgeted in a given year. As of December 29, 2012 and through the time of the filing ofthis Form 10-K, we were in compliance with all covenants under this facility. On September 19, 2012, we entered into an amendment to our mortgage agreement, which provided for the immediate prepayment of approximately $11.8million of the indebtedness under the mortgage agreement without incurring a prepayment premium from cash currently held as collateral under the mortgageagreement. In addition, on the last business day of each calendar quarter, starting with the fourth quarter of 2012, additional funds held as collateral underthe mortgage agreement will be used to prepay indebtedness under the mortgage agreement, without prepayment premium, up to an aggregate additionalprepayment of $10.0 million. Thereafter, any cash remaining in the collateral account under the mortgage agreement, up to an aggregate of $10.0 million, willbe released to the Company on the last business day of each calendar quarter through the second quarter of 2014. All funds released pursuant to theseprovisions may only be used by the Company to pay for usual and customary operating expenses. During the periods described above in which cash in thecollateral account is used to either prepay indebtedness under the mortgage agreement or released to the Company, the lenders will not release any of the cashcollateral to the Company for specified capital expenditures as previously provided under the mortgage agreement. Under the terms of our mortgage, we arerequired to transfer certain funds to be held as collateral. We expect to transfer approximately $13.2 million as collateral during the next twelve monthperiod, approximately $6.4 million of which will be used to reduce mortgage principal on a quarterly basis. The remaining amount of approximately $6.8million will be remitted to us on a quarterly basis for uses as indicated in the amendment. In conjunction with the modification of our mortgage agreement weincurred approximately $0.3 million in fees that were capitalized and are being amortized over the remaining term of the mortgage. 30Table of Contents On July 14, 2011, we entered into an amendment to the mortgage which (i) eliminated the requirement to obtain lender approval for any transfer of equityinterests that would reduce Cerberus ABP Investor LLC’s ownership in the Company and certain of our subsidiaries, directly or indirectly, to less than 51%,(ii) provided for the immediate prepayment of $38.3 million of the indebtedness under the mortgage without incurring a prepayment premium from fundscurrently held as collateral under the mortgage and, if certain conditions are met, will allow for an additional prepayment on or after July 30, 2014 from fundsheld as collateral without incurrence of a prepayment premium, (iii) allow us, at the lenders’ reasonable discretion, to use a portion of the cash held ascollateral under the mortgage for specified alterations, repairs, replacements and other improvements to the mortgaged properties, and (iv) in the event certainfinancial conditions are met and the Company extends the Amended and Restated Master Lease by and among certain of our subsidiaries with respect toproperties covered by the mortgage for an additional five years, we may request the lenders to disburse to the Company a portion of the cash held as collateralunder the mortgage. In conjunction with the modification of our mortgage agreement we incurred approximately $2.9 million in debt fees that were capitalizedand are being amortized over the remaining term of the mortgage. On June 12, 2006, we entered into an interest rate swap agreement with Goldman Sachs Capital Markets, to hedge against interest rate risks related to ourvariable rate U.S. revolving credit facility. The interest rate swap was terminated in March of 2011. Due to the termination of the swap in fiscal 2011, the fair value of the swap as of December 31, 2011 was zero. Changes associated with the ineffectiveinterest rate swap recognized in the Consolidated Statement of Operations for the period from January 1, 2011 to October 1, 2011 were approximately $1.7million of income and were comprised of amortization of the remaining accumulated other comprehensive loss of the ineffective swap of $0.5 million offset byincome of $2.2 million related to reducing the fair value of the ineffective interest rate swap liability to zero. Contractual Commitments. The following table represents our contractual commitments associated with our debt and other obligations disclosed aboveas of the fiscal year end of each year set forth below (in thousands). 2013 2014 2015 2016 2017 Thereafter Total Revolving credit facilities(1) $— $171,412 $— $— $— $— $171,412 Mortgage indebtedness 8,946 2,556 2,725 191,753 — — 205,980 Interest payments on our revolving credit facilities(2) 7,003 182 — — — — 7,185 Interest payments on our mortgage(3) 14,076 12,609 12,439 6,137 — — 45,261 Subtotal 30,025 186,759 15,164 197,890 — — 429,838 Operating leases(4) 4,488 3,943 3,354 3,394 3,016 2,786 20,981 Capital leases(5) 1,188 1,237 1,292 1,238 709 727 6,391 Interest payments on our capital leases(6) 347 278 206 131 71 26 1,059 Letters of credit(7) 4,485 — — — — — 4,485 Letters of credit(8) 1,501 — — — — — 1,501 Total $42,034 $192,217 $20,016 $202,653 $3,796 $3,539 $464,255 (1)Payments for both the U.S. and Canadian revolving credit facilities are included. (2)Interest on the revolving credit facilities is variable, based on Libor or prime plus the applicable margin. The interest rate on the U.S. revolving creditfacility and the Canadian revolving credit facility was 4.1% and 4.0%, respectively, at December 29, 2012. The final maturity date on our U.S. revolvingcredit facility and Canadian revolving credit facility is January 7, 2014 and August 12, 2014, respectively. (3)Interest payments on the mortgage are based on a fixed rate of 6.35%. (4)We lease various facilities and vehicles under non-cancelable operating leases. (5)We lease certain other fixed assets under non cancelable leases that we have determined to be capital leases. (6)Includes imputed interest based on individual capital lease agreements. (7)Letters of credit included under the credit facilities. (8)Letters of credit not included under the credit facilities. 31Table of Contents Purchase orders entered into in the ordinary course of business are excluded from the above table. Amounts for which we are liable under purchase ordersare reflected on our Consolidated Balance Sheets (to the extent entered into prior to the end of the applicable period) as accounts payable and accrued liabilities. Off-Balance Sheet Arrangements. As of December 29, 2012, we did not have any material off-balance sheet arrangements. Critical Accounting Policies The preparation of our consolidated financial statements and related disclosures in conformity with U.S. generally accepted accounting principles requiresour management to make judgments and estimates that affect the amounts reported in our consolidated financial statements and accompanying notes. Ourmanagement believes that we consistently apply these judgments and estimates and the consolidated financial statements and accompanying notes fairlyrepresent all periods presented. However, any differences between these judgments and estimates and actual results could have a material impact on ourConsolidated Statements of Operations and financial position. Critical accounting estimates, as defined by the Securities and Exchange Commission (“SEC”),are those that are most important to the portrayal of our financial condition and results of operations and require our management’s most difficult andsubjective judgments and estimates of matters that are inherently uncertain. Our critical accounting estimates include those regarding (1) revenue recognition;(2) allowance for doubtful accounts and related reserves; (3) inventory valuation; (4) impairment of long-lived assets; (5) income taxes; (6) defined benefitpension plans; and (7) stock-based compensation. Our significant accounting policies are more fully described in the Notes to the Consolidated FinancialStatements. Revenue Recognition We recognize revenue when the following criteria are met: persuasive evidence of an agreement exists, delivery has occurred or services have been rendered,our price to the buyer is fixed and determinable and collectibility is reasonably assured. Delivery is not considered to have occurred until the customer takestitle and assumes the risks and rewards of ownership. The timing of revenue recognition is largely dependent on shipping terms. Revenue is recorded at thetime of shipment for terms designated as FOB (free on board) shipping point. For sales transactions designated FOB destination, revenue is recorded when theproduct is delivered to the customer’s delivery site. All revenues are recorded at gross. The key indicators used to determine when and how revenue is recorded are as follows: ●We are the primary obligor responsible for fulfillment and all other aspects of the customer relationship. ●Title passes to BlueLinx, and we carry all risk of loss related to warehouse, reload inventory and inventory shipped directly from vendors to ourcustomers. ●We are responsible for all product returns. ●We control the selling price for all channels. ●We select the supplier. ●We bear all credit risk. In addition, we provide inventory to certain customers through pre-arranged agreements on a consignment basis. Customer consigned inventory ismaintained and stored by certain customers; however, ownership and risk of loss remains with us. When the inventory is sold by the customer, we recognizerevenue on a gross basis. All revenues recognized are net of trade allowances, cash discounts and sales returns. Cash discounts and sales returns are estimated using historicalexperience. Trade allowances are based on the estimated obligations and historical experience. Adjustments to earnings resulting from revisions to estimates ondiscounts and returns have been insignificant for each of the reported periods. 32Table of Contents Allowance for Doubtful Accounts and Related Reserves We evaluate the collectability of accounts receivable based on numerous factors, including past transaction history with customers and theircreditworthiness. We maintain an allowance for doubtful accounts for each aging category on our aged trial balance based on our historical loss experience.This estimate is periodically adjusted when we become aware of specific customers’ inability to meet their financial obligations (e.g., bankruptcy filing orother evidence of liquidity problems). As we determine that specific balances will ultimately be uncollectible, we remove them from our aged trial balance.Additionally, we maintain reserves for cash discounts that we expect customers to earn as well as expected returns. Inventory Valuation Inventories are carried at the lower of cost or market. The cost of all inventories is determined by the moving average cost method. We include all chargesdirectly or indirectly incurred in bringing inventory to its existing condition and location. We evaluate our inventory value at the end of each quarter to ensurethat first quality, actively moving inventory, when viewed by category, is carried at the lower of cost or market. Additionally, we maintain a reserve for the estimated value impairment associated with damaged, excess and obsolete inventory. The damaged, excess andobsolete reserve generally includes discontinued items or inventory that has turn days in excess of 270 days, excluding new items during their product launch. Impairment of Long-Lived Assets Long-lived assets, including property and equipment and intangible assets with definite useful lives, are reviewed for possible impairment wheneverevents or circumstances indicate that the carrying amount of an asset may not be recoverable. We consider whether there were indicators of potential impairment on a quarterly basis. Indicators of impairment include current period losses combinedwith a history of losses, management’s decision to exit a facility, reductions in the fair market value of real properties and changes in other circumstances thatindicate the carrying amount of an asset may not be recoverable. Our evaluation of long-lived assets is performed at the lowest level of identifiable cash flows, which is generally the individual distribution facility. In theevent of indicators of impairment, the assets of the distribution facility are evaluated by comparing the facility’s undiscounted cash flows over the estimateduseful life of the asset, which ranges between 5-40 years, to its carrying value. If the carrying value is greater than the undiscounted cash flows, animpairment loss is recognized for the difference between the carrying value of the asset and the estimated fair market value. Impairment losses are recorded as acomponent of “Selling, general and administrative” expense in the Consolidated Statements of Operations. Our estimate of undiscounted cash flows is subject to assumptions that affect estimated operating income at a distribution facility level. Theseassumptions are related to future sales, margin growth rates, economic conditions, market competition and inflation. In the event that undiscounted cash flowsdo not exceed the carrying value of a facility, our estimates of fair market value are generally based on market appraisals and our experience with relatedmarket transactions. We use a two year average of cash flows based on 2012 EBITDA and 2013 projected EBITDA, which includes a growth factorassumption, to estimate undiscounted cash flows. These assumptions used to determine impairment are considered to be level 3 measurements in the fair valuehierarchy as defined in Note 13. 33Table of Contents Our operating results have declined during the past several years as they are closely tied to U.S. housing starts, which have been at historically low levels.During fiscal 2012, we began to see signs of a housing recovery and our results have improved, however our sales are still at historically low levels. To theextent that reductions in volume and operating income have resulted in impairment indicators, in all cases our carrying values continue to be less than ourprojected undiscounted cash flows. As such, we have not identified significant known trends impacting the fair value of long-lived assets to an extent thatwould indicate impairment. During the first quarter of fiscal 2011 our Newtown, Connecticut facility was damaged due to severe winter weather. As a result of the damage to thefacility and its contents, we have received approximately $5.8 million in proceeds from the insurance company comprised of $2.2 million related to thedamaged building, $2.4 million related to damaged and destroyed inventory and $1.2 million related to the recovery of additional expenses incurred as a resultof the damage. Cash received related to the damaged building was classified as an investing cash inflow in our Consolidated Statement of Cash Flows for thefiscal year ended December 31, 2011 and used to reduce the principal of our mortgage, which was classified as a financing cash outflow. All other cashinflows related to the insurance settlement were classified as operating cash flows in our Consolidated Statement of Cash Flows in the appropriate period. Themajority of the remaining cash inflows were used to fund costs incurred related to the Newtown loss. We recognized a $1.4 million gain in fiscal 2011 ofwhich $1.2 million related to the damaged building and $0.2 million related to the recovery of gross margin on the inventory. We recorded an additional gain of$0.5 million related to the damaged building during the second quarter of 2012. We recorded all gains related to the events above at the time the recovery of theminimum expected proceeds under our insurance policy became probable and was estimable. These gains were recorded in “Selling, general andadministrative expenses” in our Consolidated Statements of Operations. Income Taxes The federal statutory income tax rate was 35%. Our provision for (benefit from) income taxes is reconciled to the federal statutory amount as follows: Fiscal YearEndedDecember 29,2012 Fiscal YearEndedDecember 31,2011 Fiscal YearEndedJanuary 1,2011 (In thousands) Benefit from income taxes computed at the federal statutory tax rate $(7,924) $(13,162) $(18,841)Benefit from state income taxes, net of federal benefit (866) (1,296) (2,153)Valuation allowance change 8,820 14,498 18,433 Nondeductible items 484 806 3,128 Other (128) 116 (1,156)Provision for (benefit from) income taxes $386 $962 $(589) Our income before provision for income taxes for our Canadian operations was $0.1 million, $0.9 million and $1.6 million for fiscal 2012, fiscal 2011,and fiscal 2010, respectively. For fiscal 2012, we recognized tax expense of $0.4 million. The expense recognized for the year is primarily comprised of $0.3 million for current stateincome tax expense related to earnings generated on a separate company basis. For fiscal 2011, we recognized tax expense of $1.0 million. The expense recognized for the year is primarily comprised of $0.8 million for current stateincome tax expense related to earnings generated on a separate company basis and $0.3 million of current income tax expense resulting from foreign incometaxes. In accordance with the intraperiod tax allocation provisions of U.S. GAAP, we are required to consider all items (including items recorded in othercomprehensive income) in determining the amount of tax benefit that results from a loss from continuing operations that should be allocated to continuingoperations. In fiscal 2012 and fiscal 2011, there was no intraperiod tax allocation due to the fact that there was a loss in other comprehensive income for theperiod. While the income tax benefit from continuing operations is reported in our Consolidated Statements of Operations, the income tax expense on othercomprehensive income is recorded directly to accumulated other comprehensive loss, which is a component of stockholders’ equity. 34Table of Contents As of December 29, 2012, our deferred income tax assets were $79.9 million, which are offset by a full valuation allowance. Deferred income tax assetsand income tax liabilities are recognized for temporary differences between amounts recorded for financial reporting and income tax purposes. Our financialstatements contain certain deferred tax assets which have arisen primarily as a result of tax benefits associated with the loss before income taxes incurredduring fiscal 2012 and fiscal 2011, as well as net deferred income tax assets resulting from other temporary differences related to certain reserves, pensionobligations and differences between book and tax depreciation and amortization. We record a valuation allowance against our net deferred tax assets when wedetermine that based on the weight of available evidence, it is more likely than not that our net deferred tax assets will not be realized. We considered the foursources of taxable income that should be considered when determining whether a valuation allowance is required including (from least to most subjective): ●taxable income in prior carryback years, if carryback is permitted under the tax law; ●future reversals of existing taxable temporary differences (i.e., offset gross deferred tax assets against gross deferred tax liabilities); ●tax planning strategies; and ●future taxable income exclusive of reversing temporary differences and carryforwards. In estimating future taxable income, we develop assumptions including the amount of future state and federal pretax operating and non-operating income,the reversal of temporary differences and the implementation of feasible prudent tax planning strategies. These assumptions require significant judgment aboutthe forecasts of future taxable income. Substantial changes in these assumptions could result in changes in our judgments around our ability to realize futuretax benefit. Defined Benefit Pension Plans We sponsor several defined benefit pension plans covering substantially all of our hourly employees. Our estimates of the amount and timing of our futurefunding obligations for our defined benefit pension plans are based upon various assumptions. These assumptions include, but are not limited to, thediscount rate, projected return on plan assets, compensation increase rates, mortality rates, retirement patterns, and turnover rates. In addition, the amount andtiming of our pension funding obligations can be influenced by funding requirements that are established by the Employee Retirement Income and Security Actof 1974 (ERISA), the Pension Protection Act, Congressional Acts, or other governing bodies. During fiscal 2010 and 2011, we met our required contribution toour defined benefit pension plans. We recognize the unfunded status (i.e., the difference between the fair value of plan assets and the projected benefit obligations) of our pension plan in ourConsolidated Balance Sheets, with a corresponding adjustment to accumulated other comprehensive loss. On December 29, 2012, we measured the fair valueof our plan assets and benefit obligations. As of December 29, 2012 and December 31, 2011, the net unfunded status of our benefit plan was $46.6 millionand $35.5 million, respectively. These amounts were included in “Other non-current liabilities” on our Consolidated Balance Sheets. The net adjustment toother comprehensive loss for fiscal 2012, fiscal 2011, and fiscal 2010 was $8.2 million loss ($8.2 million loss, net of tax, offset by a valuation allowance),$15.0 million loss ($15.0 million loss, net of tax, offset by a valuation allowance), $1.0 million loss ($0.6 million loss, net of tax), respectively, whichrepresents the net unrecognized actuarial (loss) gain and unrecognized prior service cost. The Company’s required cash contribution to the pension plan in 2012 was approximately $3.3 million. The 2012 required contribution was comprisedof approximately $1.2 million related to our 2011 minimum required contribution and approximately $2.1 million related to our 2012 minimum requiredcontribution. The Company’s minimum required contribution for plan year 2012 was $3.2 million. The Company has funded the $1.2 million related to its2011 minimum required contribution with cash in 2012. However, in an effort to preserve additional cash for operations, we applied for a waiver from theIRS for our 2012 minimum required contribution. The waiver is still being reviewed by the IRS. We have not made the $2.1 million of required 2012contributions related to the 2012 minimum required contribution. If we are granted the requested waiver, our contributions for 2012 will be amortized over thefollowing five years, increasing our future minimum required contributions. We are currently required to make three quarterly cash contributions during fiscal2013 of $0.8 million per quarter related to our 2013 minimum required contribution. We are pursuing contributing personal property to the pension planduring fiscal 2013. We will designate the contribution such that it will offset our future minimum required contribution. 35Table of Contents We used a discount rate of 4.24% to compute the projected benefit obligation, which was determined by matching of plan liability cash flows to a portfolioof bonds. A change in the discount rate of 25 basis points, from 4.24% to 4.49%, while holding all other assumptions constant, would have resulted ina reduction in the Company’s projected benefit obligation of approximately $3.7 million in 2012. We used an estimated rate of future compensation increases of 3.00% to compute the projected benefit obligation. A change in the rate of 25 basis points,from 3.00% to 3.25%, while holding all other assumptions constant, would have resulted in an increase in the Company’s projected benefit obligation of lessthan $0.2 million in 2012. Plan assets are managed as a balanced portfolio comprised of two major components: an equity portion and a fixed income portion. The expected role ofplan equity investments will be to maximize the long-term real growth of fund assets, while the role of fixed income investments will be to generate currentincome, provide for more stable periodic returns, and provide some downside protection against the possibility of a prolonged decline in the market value ofequity investments. We review this investment policy statement at least once per year. In addition, the portfolio will be reviewed quarterly to determine thedeviation from target weightings and will be rebalanced as necessary. Target allocations for fiscal 2013 are 50% domestic and 15% international equityinvestments, 30% fixed income investments, and 5% cash. The expected long-term rate of return for the plan’s total assets is based on the expected return ofeach of the above categories, weighted based on the target allocation for each class. Stock-Based Compensation We recognize compensation expense equal to the grant-date fair value for all share-based payment awards that are expected to vest. This expense is recordedon a straight-line basis over the requisite service period of the entire award, unless the awards are subject to market or performance conditions, in which casewe recognize compensation expense over the requisite service period of each separate vesting tranche to the extent market and performance conditions areconsidered probable. The calculation of fair value related to stock compensation is subject to certain assumptions discussed in more detail in Note 7.Management updates such estimates when circumstances warrant. All compensation expense related to our share-based payment awards is recorded in“Selling, general and administrative” expense in the Consolidated Statements of Operations. Recently Issued Accounting Pronouncements In May 2011, the FASB issued guidance which amends existing GAAP fair value measurement and disclosure guidance to converge GAAP andInternational Financial Reporting Standards requirements for measuring amounts at fair value as well as disclosures about these measurements. Thisguidance is effective during interim and annual periods beginning after December 15, 2011. This guidance did not have a material impact on our financialstatements and disclosures. In June 2011, the FASB issued guidance which eliminates the option to present the components of other comprehensive income as part of the statement ofchanges in stockholders’ equity. The update also requires the presentation of a single statement of comprehensive income or consecutive presentation of thestatement of income and the statement of comprehensive income, if a company elects to present two separate statements. Finally, reclassification adjustmentsfrom other comprehensive income to net income are required to be presented on the face of the financial statements. The new guidance and subsequentamendment are effective for fiscal years, and interim periods within those years, beginning after December 15, 2011. We have formally adopted this guidanceduring fiscal 2012 and presented the total of comprehensive income (loss), the components of net income (loss) and the components of other comprehensiveincome (loss) in a single continuous statement on the face of the Consolidated Statements of Operations and Comprehensive Income (Loss). There were no other accounting pronouncements adopted during fiscal 2012 that had a material impact on our financial statements. 36Table of Contents ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK. General. We are exposed to risks such as changes in interest rates, commodity prices and foreign currency exchange rates. We employ a variety ofpractices to manage these risks including the use of derivative instruments. Derivative instruments are used only for risk management purposes and not forspeculation or trading, and are not used to address risks related to foreign currency exchange rates. We record derivative instruments as assets or liabilities onthe balance sheet at fair value. The following discussion provides additional information regarding our market risk exposure. Interest Rates. Our revolving credit facilities accrue interest based on a floating benchmark rate (the prime rate or LIBOR rate), plus an applicablemargin. A change in interest rates under the revolving credit facility would have an impact on our results of operations. However, a change of 100 basis pointsin the market rate of interest would have an impact of $3.8 million and $3.4 million based on borrowings outstanding at December 29, 2012 and December31, 2011, respectively, which we do not believe to be material. Additionally, to the extent changes in interest rates impact the housing market, we would beimpacted by such changes. We have a $295 million mortgage loan with the German American Capital Corporation. The mortgage has a term of ten years and a fixed interest rate of6.35%. By entering into this fixed rate mortgage, we insulated ourselves from changes in market interest rates on a portion of our indebtedness. This mortgagereplaced our previously existing $165 million floating rate mortgage, which had a 7.4% interest rate when it was terminated. Foreign Exchange Rates. Less than 3.0% of our net sales are denominated in currencies other than the U.S. dollar, and we do not believe our totalexposure to currency fluctuations to be significant. Commodity Prices. We believe that general inflation did not significantly affect our operating results or markets in fiscal 2012, fiscal 2011 or fiscal2010. As discussed above, our results of operations were both favorably and unfavorably impacted by increases and decreases in the pricing of certaincommodity-based products. Commodity price fluctuations have from time to time created cyclicality in our financial performance and may do so in thefuture. For the year ended December 29, 2012, we believe that a 5% change in the prices underlying our commodity based products would have resulted in a$40.3 million, $36.5 million and $3.9 million change in revenue, cost of sales and gross margin, respectively. For the year ended December 31, 2011, webelieve that a 5% change in the prices underlying our commodity based products would result in a $35.3 million, $32.0 million and $3.3 million change inrevenue, cost of sales and gross margin, respectively. 37Table of ContentsITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA. Index to Financial Statements and Supplemental Data Page Management’s Report on Internal Control Over Financial Reporting 39Reports of Independent Registered Public Accounting Firm 40Consolidated Balance Sheets42Consolidated Statements of Operations and Comprehensive Loss43Consolidated Statements of Cash Flows44Consolidated Statements of Stockholders’ (Deficit) Equity 45Notes to Consolidated Financial Statements46 38Table of ContentsBLUELINX HOLDINGS INC. AND SUBSIDIARIES MANAGEMENT’S REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING To the Stockholders of BlueLinx Holdings Inc.: Our management is responsible for establishing and maintaining adequate internal control over financial reporting as defined in Rule 13a-15(f) under theSecurities Exchange Act of 1934, as amended. Our internal control over financial reporting is designed to provide reasonable assurance to our management andboard of directors regarding the preparation and fair presentation of published financial statements. Our management, including our chief executive officer and our chief financial officer, does not expect that our internal controls over financial reportingwill prevent all errors and all fraud. Internal controls, no matter how well designed and operated, can provide only reasonable, not absolute, assurance that theobjectives of the internal controls are met. Given the inherent limitations of internal controls, internal controls over financial reporting may not prevent or detectall misstatements or fraud. Therefore, no evaluation of internal control can provide absolute assurance that all control issues or instances of fraud will beprevented or detected. Management assessed the effectiveness of our internal control over financial reporting as of December 29, 2012. In making this assessment, managementused the criteria established by the Committee of Sponsoring Organizations of the Treadway Commission set forth in Internal Control — IntegratedFramework. Based on our assessment, our management concluded that, as of December 29, 2012, our internal control over financial reporting was effective. Ernst & Young LLP, an independent registered public accounting firm that audited our consolidated financial statements as of and for the year endedDecember 29, 2012 included in this Annual Report on Form 10-K, has issued an attestation report on our internal control over financial reporting as ofDecember 29, 2012, dated February 20, 2013. February 20, 2013 39Table of Contents REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM ON INTERNALCONTROL OVER FINANCIAL REPORTING The Board of Directors and Stockholders of BlueLinx Holdings Inc. and subsidiaries We have audited BlueLinx Holdings Inc. and subsidiaries’ internal control over financial reporting as of December 29, 2012, based on criteria establishedin Internal Control—Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (the COSO criteria). BlueLinxHoldings Inc. and subsidiaries’ management is responsible for maintaining effective internal control over financial reporting, and for its assessment of theeffectiveness of internal control over financial reporting included in the accompanying Management’s Report on Internal Control Over Financial Reporting. Ourresponsibility is to express an opinion on the Company’s internal control over financial reporting based on our audit. We conducted our audit in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards requirethat we plan and perform the audit to obtain reasonable assurance about whether effective internal control over financial reporting was maintained in allmaterial respects. Our audit included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weaknessexists, testing and evaluating the design and operating effectiveness of internal control based on the assessed risk, and performing such other procedures as weconsidered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion. A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reportingand the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal controlover financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairlyreflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permitpreparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are beingmade only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention ortimely detection of unauthorized acquisition, use or disposition of the company’s assets that could have a material effect on the financial statements. Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation ofeffectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliancewith the policies or procedures may deteriorate. In our opinion, BlueLinx Holdings Inc. and subsidiaries maintained, in all material respects, effective internal control over financial reporting as ofDecember 29, 2012, based on the COSO criteria. We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States), the 2012 ConsolidatedFinancial Statements of BlueLinx Holdings Inc. and subsidiaries and our report dated February 20, 2013 expressed an unqualified opinion thereon. /s/ Ernst & Young LLP Atlanta, GeorgiaFebruary 20, 2013 40Table of Contents REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM ON THECONSOLIDATED FINANCIAL STATEMENTS The Board of Directors and Stockholders of BlueLinx Holdings Inc. and subsidiaries We have audited the accompanying consolidated balance sheets of BlueLinx Holdings Inc. and subsidiaries as of December 29, 2012 and December 31,2011, and the related consolidated statements of operations and comprehensive loss, stockholders’ (deficit) equity, and cash flows for the fiscal years endedDecember 29, 2012, December 31, 2011, and January 1, 2011. These financial statements are the responsibility of the Company’s management. Ourresponsibility is to express an opinion on these financial statements based on our audits. We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards requirethat we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includesexamining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accountingprinciples used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our auditsprovide a reasonable basis for our opinion. In our opinion, the financial statements referred to above present fairly, in all material respects, the consolidated financial position of BlueLinx HoldingsInc. and subsidiaries at December 29, 2012 and December 31, 2011, and the consolidated results of their operations and their cash flows for the fiscal yearsended December 29, 2012, December 31, 2011, and January 1, 2011, in conformity with U.S. generally accepted accounting principles. We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States), BlueLinx Holdings Inc. andsubsidiaries’ internal control over financial reporting as of December 29, 2012, based on criteria established in Internal Control-Integrated Framework issuedby the Committee of Sponsoring Organizations of the Treadway Commission and our report dated February 20, 2013 expressed an unqualified opinionthereon. /s/ Ernst & Young LLP Atlanta, GeorgiaFebruary 20, 2013 41Table of Contents BLUELINX HOLDINGS INC. AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS December 29,2012 December 31,2011 (In thousands, except share data) ASSETS Current assets: Cash and cash equivalents $5,188 $4,898 Receivables, less allowances of $4,720 in fiscal 2012 and $5,135 in fiscal 2011 157,465 138,872 Inventories, net 230,059 185,577 Other current assets 19,427 27,141 Total current assets 412,139 356,488 Property and equipment: Land and improvements 43,120 49,562 Buildings 94,070 95,652 Machinery and equipment 78,674 75,508 Construction in progress 1,173 741 Property and equipment, at cost 217,037 221,463 Accumulated depreciation (101,684) (98,335)Property and equipment, net 115,353 123,128 Non-current deferred income tax assets, net 445 358 Other non-current assets 16,799 23,941 Total assets $544,736 $503,915 LIABILITIES AND STOCKHOLDERS’ (DEFICIT) EQUITY Current liabilities: Accounts payable $77,850 $70,228 Bank overdrafts 35,384 22,364 Accrued compensation 6,170 4,496 Current maturities of long-term debt 8,946 9,046 Deferred income taxes, net 449 382 Other current liabilities 10,937 16,558 Total current liabilities 139,736 123,074 Non-current liabilities: Long-term debt 368,446 328,695 Other non-current liabilities 57,146 43,772 Total liabilities 565,328 495,541 STOCKHOLDERS’ (DEFICIT) EQUITY Common Stock, $0.01 par value, 200,000,000 and 100,000,000 shares authorized at December 29, 2012 andDecember 31, 2011, respectively; 63,664,115 and 62,012,962 shares issued and outstanding at December 29,2012 and December 31, 2011, respectively 637 620 Additional paid-in-capital 209,815 207,626 Accumulated other comprehensive loss (30,042) (21,900)Accumulated deficit (201,002) (177,972)Total stockholders’ (deficit) equity (20,592) 8,374 Total liabilities and stockholders’ (deficit) equity $544,736 $503,915 42Table of ContentsBLUELINX HOLDINGS INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF OPERATIONS ANDCOMPREHENSIVE LOSS Fiscal YearEndedDecember 29,2012 Fiscal YearEndedDecember 31,2011 Fiscal YearEndedJanuary 1,2011 (In thousands, except per share data) Net sales $1,907,842 $1,755,431 $1,804,418 Cost of sales 1,677,772 1,545,282 1,593,745 Gross profit 230,070 210,149 210,673 Operating expenses: Selling, general, and administrative 215,996 207,857 221,185 Depreciation and amortization 8,565 10,562 13,365 Total operating expenses 224,561 218,419 234,550 Operating income (loss) 5,509 (8,270) (23,877)Non-operating expenses (income): Interest expense 28,157 30,510 33,788 Changes associated with the ineffective interest rate swap — (1,676) (4,603)Write-off of debt issue costs — — 183 Other (income) expense, net (7) 501 587 Loss before provision for (benefit from) income taxes (22,641) (37,605) (53,832)Provision for (benefit from) income taxes 386 962 (589)Net loss $(23,027) $(38,567) $(53,243) Basic and diluted weighted average number of common shares outstanding 60,080 43,187 30,688 Basic and diluted net loss per share applicable to common shares outstanding $(0.38) $(0.89) $(1.73) Comprehensive loss: Net loss $(23,027) $(38,567) $(53,243)Other comprehensive loss: Foreign currency translation, net of taxes 103 (92) 336 Unrealized loss from pension plan, net of taxes (8,245) (14,969) (616)Unrealized gain from ineffective interest rate swap, net of taxes — 519 1,297 Total other comprehensive loss (8,142) (14,542) 1,017 Comprehensive loss $(31,169) $(53,109) $(52,226) 43Table of ContentsBLUELINX HOLDINGS INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS Fiscal YearEndedDecember 29,2012 Fiscal YearEndedDecember 31,2011 Fiscal YearEndedJanuary 1, 2011 (In thousands) Cash flows from operating activities: Net loss $(23,027) $(38,567) $(53,243)Adjustments to reconcile net loss to cash used in operations: Depreciation and amortization 8,565 10,562 13,365 Amortization of debt issue costs 3,746 2,940 1,963 Payments from terminating the Georgia-Pacific Supply Agreement — — 4,706 Gain from sale of properties (9,885) (10,604) — Gain from property insurance settlements (476) (1,230) — Changes associated with the ineffective interest rate swap — (1,676) (4,603)Write-off of debt issue costs — — 183 Vacant property charges, net (30) (291) 53 Gain on modification of lease agreement — (1,971) — Payments on modification on lease agreement (5,875) — — Deferred income tax benefit (20) (25) (600)Share-based compensation 2,797 1,974 3,978 Decrease in restricted cash related to the ineffective interest rate swap, insurance, and other 695 987 6,556 Changes in assets and liabilities: Receivables (18,593) (19,670) 145 Inventories (44,482) 2,673 (15,065) Accounts payable 9,050 5,973 (1,791) Changes in other working capital 1,722 (375) 15,452 Other 1,563 (1,032) (960)Net cash used in operating activities (74,250) (50,332) (29,861)Cash flows from investing activities: Property, plant and equipment investments (2,826) (6,533) (4,140)Proceeds from disposition of assets 19,195 18,355 711 Net cash provided by (used in) investing activities 16,369 11,822 (3,429)Cash flows from financing activities: Repurchase of common stock — — (583)Repurchase of shares to satisfy employee tax withholdings (526) — — Repayments on revolving credit facilities (473,349) (478,630) (466,219)Borrowings from revolving credit facilities 550,270 475,918 507,419 Principal payments on mortgage (37,272) (42,416) — Payments on capital lease obligations (2,259) (1,440) (629)Increase (decrease) in bank overdrafts 13,020 (725) (4,143)Decrease (increase) in restricted cash related to the mortgage 9,970 20,604 (11,201)Debt financing costs (1,683) (2,721) (6,521)Proceeds from stock offering less expenses paid — 58,521 — Other — — 7 Net cash provided by financing activities 58,171 29,111 18,130 Increase (decrease) in cash 290 (9,399) (15,160)Cash and cash equivalents balance, beginning of period 4,898 14,297 29,457 Cash and cash equivalents balance, end of period $5,188 $4,898 $14,297 Supplemental Cash Flow Information Net income tax (payments) refunds during the period $(508) $(22) $19,983 Interest paid during the period $24,288 $28,098 $31,675 Noncash transactions: Capital leases $5,238 $3,131 $1,889 44Table of Contents BLUELINX HOLDINGS INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ (DEFICIT) EQUITY Accumulated Stockholders’ Additional Other (Deficit) Common Stock Paid-In- Comprehensive Accumulated Equity Shares Amount Capital Income (Loss) Deficit Total (In thousands) Balance, January 2, 2010 32,179 322 145,035 (8,375) (86,162) 50,820 Net loss — — — — (53,243) (53,243)Foreign currency translation adjustment, net of tax — — — 336 — 336 Unrealized loss from pension plan, net of tax — — — (616) — (616)Unrealized gain from cash flow hedge, net of tax — — — 1,297 — 1,297 Issuance of restricted stock, net of forfeitures 688 7 — — — 7 Repurchase of common stock (199) (2) (581) — — (583)Compensation related to share-based grants — — 3,876 — — 3,876 Reclassification of equity awards to liability — — (903) — — (903)Balance, January 1, 2011 32,668 327 147,427 (7,358) (139,405) 991 Net loss — — — — (38,567) (38,567)Foreign currency translation adjustment, net of tax — — — (92) — (92)Unrealized loss from pension plan, net of tax — — — (14,969) — (14,969)Unrealized gain from cash flow hedge, net of tax — — — 519 — 519 Issuance of restricted stock, net of forfeitures 774 7 — — — 7 Issuance of stock related to the rights offering, netof expenses 28,571 286 58,235 — — 58,521 Compensation related to share-based grants — — 2,158 — — 2,158 Impact of net settled shares for vested grants — — (194) — — (194)Balance, December 31, 2011 62,013 620 207,626 (21,900) (177,972) 8,374 Net loss — — — — (23,027) (23,027)Foreign currency translation adjustment, net of tax — — — 103 — 103 Unrealized loss from pension plan, net of tax — — — (8,245) — (8,245)Issuance of restricted stock, net of forfeitures 1,875 19 — — — 19 Compensation related to share-based grants — — 2,730 — — 2,730 Impact of net settled shares for vested grants (224) (2) (524) — — (526)Other — — (17) — (3) (20)Balance, December 29, 2012 63,664 $637 $209,815 $(30,042) $(201,002) $(20,592) 45Table of ContentsBLUELINX HOLDINGS INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 1. Basis of Presentation and Background Basis of Presentation BlueLinx Holdings Inc., operating through our wholly-owned subsidiary, BlueLinx Corporation (BlueLinx Holdings Inc. and its subsidiaries arecollectively referred to as “BlueLinx” or the “Company”), is a leading distributor of building products in the United States. We operate in all of the majormetropolitan areas in the United States and, as of December 29, 2012, we distributed more than 10,000 products to approximately 11,500 customers throughour network of approximately 55 distribution centers. The Consolidated Financial Statements include our accounts and those of our wholly-ownedsubsidiaries. All significant intercompany accounts and transactions have been eliminated. Our fiscal year is a 52 or 53-week period ending on the Saturdayclosest to the end of the calendar year. Fiscal 2012, fiscal 2011, and fiscal 2010 each contained 52 weeks. Nature of Operations We are a wholesale supplier of building products in North America. We distribute products in two principal categories: structural products and specialtyproducts. Structural products include plywood, oriented strand board (“OSB”), rebar and remesh, lumber and other wood products primarily used forstructural support, walls and flooring in construction projects. Specialty products include roofing, insulation, moulding, engineered wood, vinyl products(used primarily in siding), outdoor living and metal products (excluding rebar and remesh). These products are sold to a diversified customer base, includingindependent building materials dealers, industrial and manufactured housing builders and home improvement centers. Net sales by product category aresummarized below: Fiscal YearEndedDecember 29,2012 Fiscal YearEndedDecember 31,2011 Fiscal YearEndedJanuary 1,2011 (Dollars in millions) Sales by category Structural products $806 $705 $835 Specialty products 1,114 1,068 985 Unallocated allowances and adjustments (12) (18) (16)Total sales $1,908 $1,755 $1,804 Suppliers As of December 29, 2012, our vendor base included over 750 suppliers of both structural and specialty building products. In some cases, these productsare branded. We have supply contracts in place with many of our vendors. Terms for these agreements frequently include prompt payment discounts andfreight allowances and occasionally include volume discounts, growth incentives, marketing allowances, consigned inventory and extended payment terms. On February 12, 2012, our three-year purchase agreement with Georgia-Pacific Corporation (“G-P”) for engineered lumber expired in accordance with itsterms. We continue to distribute a variety of G-P building products, but no longer are contractually obligated to make minimum purchases of products fromG-P or to purchase certain products exclusively from G-P. 2. Summary of Significant Accounting Policies Revenue Recognition We recognize revenue when the following criteria are met: persuasive evidence of an agreement exists, delivery has occurred or services have been rendered,our price to the buyer is fixed and determinable and collectibility is reasonably assured. Delivery is not considered to have occurred until the customer takestitle and assumes the risks and rewards of ownership. The timing of revenue recognition is largely dependent on shipping terms. Revenue is recorded at thetime of shipment for terms designated as FOB (free on board) shipping point. For sales transactions designated FOB destination, revenue is recorded when theproduct is delivered to the customer’s delivery site. 46Table of Contents All revenues are recorded at gross. The key indicators used to determine when and how revenue is recorded are as follows: ● We are the primary obligor responsible for fulfillment and all other aspects of the customer relationship. ● Title passes to BlueLinx and we carry all risk of loss related to warehouse, reload inventory and inventory shipped directly from vendorsto our customers. ● We are responsible for all product returns. ● We control the selling price for all channels. ● We select the supplier. ● We bear all credit risk. In addition, we provide inventory to certain customers through pre-arranged agreements on a consignment basis. Customer consigned inventory ismaintained and stored by certain customers; however, ownership and risk of loss remains with us. Customer consigned inventory at December 29, 2012and December 31, 2011 was approximately $10.3 million. When the inventory is sold by the customer, we recognize revenue on a gross basis. All revenues recognized are net of trade allowances, cash discounts and sales returns. Cash discounts and sales returns are estimated using historicalexperience. Trade allowances are based on the estimated obligations and historical experience. Adjustments to revenue and earnings resulting from revisions toestimates on discounts and returns have been immaterial for each of the reported periods. Cash and Cash Equivalents Cash and cash equivalents include all highly-liquid investments with maturity dates of less than three months when purchased. 47Table of Contents Restricted Cash We had restricted cash of $9.9 million and $20.6 million at December 29, 2012 and December 31, 2011, respectively. Restricted cash primarilyincludes amounts held in escrow related to our mortgage and insurance for workers’ compensation, auto liability, and general liability. Restricted cash isincluded in “Other current assets” and “Other non-current assets” on the accompanying Consolidated Balance Sheets. The table below provides the balances of each individual component in restricted cash as of December 29, 2012 and December 31, 2011 (in thousands): At December 29,2012 At December 31,2011 Cash in escrow: Mortgage $41 $10,011 Insurance 7,906 8,786 Other 1,964 1,779 Total $9,911 $20,576 During fiscal 2012, 2011 and 2010, changes in restricted cash required under our mortgage were classified in the financing section of our ConsolidatedStatement of Cash Flows. On September 19, 2012, we entered into an amendment to our mortgage agreement, which provided for the immediate prepaymentof approximately $11.8 million of the indebtedness under the mortgage agreement without incurring a prepayment premium from cash currently held ascollateral under the mortgage agreement. In addition, on the last business day of each calendar quarter, starting with the fourth quarter of 2012, additionalfunds held as collateral under the mortgage agreement will be used to prepay indebtedness under the mortgage agreement, without prepayment premium, up toan aggregate additional prepayment of $10.0 million. Thereafter, any cash remaining in the collateral account under the mortgage agreement, up to an aggregateof $10.0 million, will be released to the Company on the last business day of each calendar quarter through the second quarter of 2014. Concentrations of Credit Risk Our accounts receivable are principally from customers in the building products industry located in the United States and Canada. We believeconcentration of credit risk with respect to accounts receivable is limited due to the large number of customers comprising our customer base. Allowance for Doubtful Accounts and Related Reserves We evaluate the collectability of accounts receivable based on numerous factors, including past transaction history with customers and theircreditworthiness. We maintain an allowance for doubtful accounts for each aging category on our aged trial balance, which is aged utilizing contractual terms,based on our historical loss experience. This estimate is periodically adjusted when we become aware of specific customers’ inability to meet their financialobligations (e.g., bankruptcy filing or other evidence of liquidity problems). As we determine that specific balances ultimately will be uncollectible, we removethem from our aged trial balance. Additionally, we maintain reserves for cash discounts that we expect customers to earn as well as expected returns. AtDecember 29, 2012 and December 31, 2011, these reserves totaled $4.7 million and $5.1 million, respectively. Adjustments to earnings resulting fromrevisions to estimates on discounts and uncollectible accounts have been immaterial. Inventory Valuation Inventories are carried at the lower of cost or market. The cost of all inventories is determined by the moving average cost method. We have included allmaterial charges directly or indirectly incurred in bringing inventory to its existing condition and location. We evaluate our inventory value at the end of eachquarter to ensure that first quality, actively moving inventory, when viewed by category, is carried at the lower of cost or market. At December 29, 2012 andDecember 31, 2011, the market value of our inventory exceeded its cost. Adjustments to earnings resulting from revisions to lower of cost or market estimateshave been immaterial. 48Table of Contents Additionally, we maintain a reserve for the estimated value impairment associated with damaged, excess and obsolete inventory. The damaged, excess andobsolete reserve generally includes discontinued items or inventory that has turn days in excess of 270 days, excluding new items during their product launch.At December 29, 2012 and December 31, 2011, our damaged, excess and obsolete inventory reserves were $1.1 million and $1.5 million, respectively.Adjustments to earnings resulting from revisions to damaged, excess and obsolete estimates have been immaterial. Consignment Inventory We enter into consignment inventory agreements with vendors. This vendor consignment inventory relationship allows us to obtain and store vendorinventory at our warehouses and third-party (“reload”) facilities; however, ownership and risk of loss generally remains with the vendor. When the inventoryis sold, we are required to pay the vendor and we simultaneously take and transfer ownership from the vendor to the customer. Consideration Received from Vendors and Paid to Customers Each year, we enter into agreements with many of our vendors providing for inventory purchase rebates, generally based on achievement of specifiedvolume purchasing levels and various marketing allowances that are common industry practice. We accrue for the receipt of vendor rebates based onpurchases, and also reduce inventory to reflect the net acquisition cost (purchase price less expected purchase rebates). At December 29, 2012 and December31, 2011, the vendor rebate receivable totaled $9.0 million. Adjustments to earnings resulting from revisions to rebate estimates have been immaterial. In addition, we enter into agreements with many of our customers to offer customer rebates, generally based on achievement of specified volume saleslevels and various marketing allowances that are common industry practice. We accrue for the payment of customer rebates based on sales to the customer,and also reduce sales to reflect the net sales (sales price less expected customer rebates). At December 29, 2012 and December 31, 2011, the customer rebatepayable totaled $5.5 million and $7.0 million, respectively. Adjustments to earnings resulting from revisions to rebate estimates have been immaterial. Shipping and Handling Amounts billed to customers in sales transactions related to shipping and handling are classified as revenue. Shipping and handling costs included in“Selling, general, and administrative” expenses were $91.2 million, $87.9 million, and $85.5 million for fiscal 2012, fiscal 2011, and fiscal 2010,respectively. Advertising Costs Advertising costs are expensed as incurred. Advertising expenses of $1.1 million, $1.9 million, and $1.8 million were included in “Selling, general andadministrative” expenses for fiscal 2012, fiscal 2011 and fiscal 2010, respectively. Loss per Common Share We calculate our basic loss per share by dividing net loss by the weighted average number of common shares and participating securities outstanding forthe period. Restricted stock granted by us to certain management employees and non-employee directors participate in dividends on the same basis as commonshares and are non-forfeitable by the holder. The unvested restricted stock contains non-forfeitable rights to dividends or dividend equivalents. As a result,these share-based awards meet the definition of a participating security and are included in the weighted average number of common shares outstanding,pursuant to the two-class method, for the periods that present net income. The two-class method is an earnings allocation formula that treats a participatingsecurity as having rights to earnings that would otherwise have been available to common stockholders. Given that the restricted stockholders do not have acontractual obligation to participate in the losses, we have not included these amounts in our weighted average number of common shares outstanding forperiods in which we report a net loss. In addition, because the inclusion of such unvested restricted shares in our basic and dilutive per share calculationswould be anti-dilutive, we have not included 3,554,738, 2,361,424, and 1,914,288 of unvested restricted shares that had the right to participate in dividendsin our basic and dilutive calculations for fiscal 2012, fiscal 2011, and fiscal 2010, respectively, because all periods reflected net losses. Except when the effect would be anti-dilutive, the diluted earnings per share calculation includes the dilutive effect of the assumed exercise of stockoptions using the treasury stock method. As we experienced losses in all periods, basic and diluted loss per share are computed by dividing net loss by theweighted average number of common shares outstanding for the period. For fiscal 2012, fiscal 2011, and fiscal 2010, we excluded 4,460,054, 3,266,740,and 2,839,103 unvested share-based awards, respectively, from the diluted earnings per share calculation because they were anti-dilutive. The unvested share-based awards total includes excluding the assumed exercise of unexpired stock options. 49Table of Contents During fiscal 2008, we granted 834,071 performance shares under our 2006 Long-Term Incentive Plan, under which shares are issuable upon satisfactionof certain performance criteria. On December 14, 2010, the Compensation Committee of our Board decided to settle these awards in cash, and we classifiedthem as liability awards at the time of the modification. During fiscal 2011 and fiscal 2012, restricted stock units granted in fiscal 2006 and 2007respectively, vested. These restricted stock units were also settled in cash upon vesting and were considered liability awards. Therefore, these are not includedin the computation of the basic and diluted earnings per share. Common Stock Dividends 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, our Board ofDirectors suspended the payment of dividends on our common stock for an indefinite period of time. 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 ofdividends at the same quarterly rate in the future, if at all. Property and Equipment Property and equipment are recorded at cost. Lease obligations for which we assume or retain substantially all the property rights and risks of ownershipare capitalized. Replacements of major units of property are capitalized and the replaced properties are retired. Replacements of minor components of propertyand repair and maintenance costs are charged to expense as incurred. Depreciation is computed using the straight-line method over the estimated useful lives of the related assets. Useful lives are 2 to 18 years for landimprovements, 5 to 40 years for buildings, and 3 to 7 years for machinery and equipment, which includes mobile equipment. Upon retirement or dispositionof assets, cost and accumulated depreciation are removed from the related accounts and any gain or loss is included in income. Depreciation expense totaled$8.4 million for fiscal 2012, $10.4 million for fiscal 2011 and $12.8 million for fiscal 2010. During fiscal 2012, we sold certain properties with carrying values of $7.4 million, which resulted in gains totaling $9.9 million. During fiscal 2011,we sold certain properties with carrying values of $4.8 million, which resulted in gains totaling $10.6 million. These gains are recorded in “Selling, generaland administrative” expense in the Consolidated Statements of Operations. All of these properties in fiscal 2012 were classified as held for sale. All but one ofthese properties in fiscal 2011, which had a carrying value of $0.8 million and for which a gain of $5.4 million was recorded, were classified as held forsale. See Note 4 for discussion of the held for sale properties sold during the year. Impairment of Long-Lived Assets Long-lived assets, including property and equipment and intangible assets with definite useful lives, are reviewed for possible impairment wheneverevents or circumstances indicate that the carrying amount of an asset may not be recoverable. We consider whether there were indicators of potential impairment on a quarterly basis. Indicators of impairment include current period losses combinedwith a history of losses, management’s decision to exit a facility, reductions in the fair market value of real properties and changes in other circumstances thatindicate the carrying amount of an asset may not be recoverable. Our evaluation of long-lived assets is performed at the lowest level of identifiable cash flows, which is generally the individual distribution facility. In theevent of indicators of impairment, the assets of the distribution facility are evaluated by comparing the facility’s undiscounted cash flows over the estimateduseful life of the asset, which ranges between 5-40 years, to its carrying value. If the carrying value is greater than the undiscounted cash flows, animpairment loss is recognized for the difference between the carrying value of the asset and the estimated fair market value. Impairment losses are recorded as acomponent of “Selling, general and administrative” expense in the Consolidated Statements of Operations. 50Table of Contents Our estimate of undiscounted cash flows is subject to assumptions that affect estimated operating income at a distribution facility level. Theseassumptions are related to future sales, margin growth rates, economic conditions, market competition and inflation. In the event that undiscounted cash flowsdo not exceed the carrying value of a facility, our estimates of fair market value are generally based on market appraisals and our experience with relatedmarket transactions. We use a two year average of cash flows based on 2012 EBITDA and 2013 projected EBITDA, which includes a growth factorassumption, to estimate undiscounted cash flows. These assumptions used to determine impairment are considered to be level 3 measurements in the fair valuehierarchy as defined in Note 13. Our operating results have declined during the past several years as they are closely tied to U.S. housing starts, which have been at historically low levels.During fiscal 2012, we began to see signs of a housing recovery and our results have improved, however our sales are still at historically low levels. To theextent that reductions in volume and operating income have resulted in impairment indicators, in all cases our carrying values continue to be less than ourprojected undiscounted cash flows. As such, we have not identified significant known trends impacting the fair value of long-lived assets to an extent thatwould indicate impairment. During the first quarter of fiscal 2011 our Newtown, Connecticut facility was damaged due to severe winter weather. As a result of the damage to thefacility and its contents, we have received approximately $5.8 million in proceeds from the insurance company comprised of $2.2 million related to thedamaged building, $2.4 million related to damaged and destroyed inventory and $1.2 million related to the recovery of additional expenses incurred as a resultof the damage. Cash received related to the damaged building was classified as an investing cash inflow in our Consolidated Statement of Cash Flows for thefiscal year ended December 31, 2011 and used to reduce the principal of our mortgage, which was classified as a financing cash outflow. All other cashinflows related to the insurance settlement were classified as operating cash flows in our Consolidated Statement of Cash Flows in the appropriate period. Themajority of the remaining cash inflows were used to fund costs incurred related to the Newtown loss. We recognized a $1.4 million gain in fiscal 2011 ofwhich $1.2 million related to the damaged building and $0.2 million related to the recovery of gross margin on the inventory. We recorded an additional gain of$0.5 million related to the damaged building during the second quarter of 2012. We recorded all gains related to the events above at the time the recovery of theminimum expected proceeds under our insurance policy became probable and was estimable. These gains were recorded in “Selling, general andadministrative expenses” in our Consolidated Statements of Operations. Stock-Based Compensation We recognize compensation expense equal to the grant-date fair value for all share-based payment awards that are expected to vest. This expense is recordedon a straight-line basis over the requisite service period of the entire award, unless the awards are subject to market or performance conditions, in which casewe recognize compensation expense over the requisite service period of each separate vesting tranche to the extent market and performance conditions areconsidered probable. The calculation of fair value related to stock compensation is subject to certain assumptions discussed in more detail in Note 7.Management updates such estimates when circumstances warrant. All compensation expense related to our share-based payment awards is recorded in“Selling, general and administrative” expense in the Consolidated Statements of Operations. Income Taxes Deferred income taxes are provided using the liability method. Accordingly, deferred income taxes are recognized for differences between the income taxand financial reporting bases of our assets and liabilities based on enacted tax laws and tax rates applicable to the periods in which the differences are expectedto affect taxable income. We recognize a valuation allowance, when based on the weight of all available evidence, we believe it is more likely than not that someor all of our deferred tax assets will not be realized. Such amounts are disclosed in Note 5. We generally believe that the positions taken on previously filed tax returns are more likely than not to be sustained by the taxing authorities. We haverecorded income tax and related interest liabilities where we believe our position may not be sustained. Such amounts are disclosed in Note 5. 51Table of Contents Foreign Currency Translation The functional currency for our Canadian operations is the Canadian dollar. The translation of the applicable currencies into United States dollars isperformed for balance sheet accounts using current exchange rates in effect at the balance sheet date and for revenue and expense accounts using a weightedaverage exchange rate during the period. Any related translation adjustments are recorded directly in stockholders’ equity. Foreign currency transaction gainsand losses are reflected in the Consolidated Statements of Operations. Accumulated other comprehensive loss at December 29, 2012 and December 31, 2011included the accumulated gain from foreign currency translation (net of tax) of $1.8 million and $1.7 million, respectively. Compensated Absences We accrue for the costs of compensated absences to the extent that the employee’s right to receive payment relates to service already rendered, the obligationvests or accumulates, payment is probable and the amount can be reasonably estimated. Use of Estimates The preparation of financial statements in conformity with U.S. generally accepted accounting principles (“GAAP”) requires management to make certainestimates and assumptions. These estimates and assumptions affect the reported amounts of assets and liabilities and disclosure of contingent assets andliabilities at the date of the financial statements, as well as reported amounts of revenues and expenses during the reporting period. Actual results could differfrom these estimates and such differences could be material. Reclassifications During fiscal 2012, we classified certain amounts, which had historically been presented as “Property, plant and equipment investments” in the “Cashflows from investing activities” section of the Consolidated Statements of Cash Flows to “Other” changes in the “Cash flows from operating activities” sectionof the Consolidated Statements of Cash Flows. To conform the historical presentation to the current and future presentation, we reclassified similar items inprior periods from “Net cash (used in) provided by investing activities” to “Net cash used in operating activities” in our Consolidated Statements of CashFlows. New Accounting Standards In May 2011, the FASB issued guidance which amends existing GAAP fair value measurement and disclosure guidance to converge GAAP andInternational Financial Reporting Standards requirements for measuring amounts at fair value as well as disclosures about these measurements. Thisguidance is effective during interim and annual periods beginning after December 15, 2011. This guidance did not have a material impact on our financialstatements and disclosures. In June 2011, the FASB issued guidance which eliminates the option to present the components of other comprehensive income as part of the statement ofchanges in stockholders’ equity. The update also requires the presentation of a single statement of comprehensive income or consecutive presentation of thestatement of income and the statement of comprehensive income, if a company elects to present two separate statements. Finally, reclassification adjustmentsfrom other comprehensive income to net income are required to be presented on the face of the financial statements. The new guidance and subsequentamendment are effective for fiscal years, and interim periods within those years, beginning after December 15, 2011. We have formally adopted this guidanceduring fiscal 2012 and presented the total of comprehensive income (loss), the components of net income (loss) and the components of other comprehensiveincome (loss) in a single continuous statement on the face of the Consolidated Statements of Operations and Comprehensive Income (Loss). 52Table of Contents There were no other accounting pronouncements adopted during fiscal 2012 that had a material impact on our financial statements. 3. Restructuring Charges We account for exit and disposal costs by recognizing a liability for costs associated with an exit or disposal activity at fair value in the period in which itis incurred or when the entity ceases using the right conveyed by a contract (i.e., the right to use a leased property). These costs are included in “Selling,general, and administrative” expenses in the Consolidated Statements of Operations and “Other current liabilities” and “Other non-current liabilities” on theConsolidated Balance Sheets for the fiscal years ended and at December 29, 2012 and December 31, 2011. We account for severance and outplacement costs by recognizing a liability for employees’ rights to post-employment benefits. These costs are included in“Selling, general, and administrative” expenses in the Consolidated Statements of Operations and in “Accrued compensation” on the Consolidated BalanceSheets for the fiscal years ended and at December 29, 2012 and December 31, 2011. 2007 Facility Consolidation and Severance Costs During fiscal 2007, we announced a plan to adjust our cost structure in order to manage our costs more effectively. The plan included the consolidation ofour corporate headquarters and sales center to one building from two buildings and reduction in force initiatives, which resulted in certain charges recorded in“Selling, general, and administrative” expenses in the Consolidated Statements of Operations during the fourth quarter of fiscal 2007. As of December 29, 2012 and December 31, 2011, there was no remaining accrued severance related to reduction in force initiatives completed in fiscal2007. During the third quarter of fiscal 2011, we entered into an amendment to our corporate headquarters lease in Atlanta, Georgia related to the unoccupied4100 building. This amendment released us from our obligations with respect to this unoccupied space as of January 31, 2012, in exchange for a $5.0 millionspace remittance fee, which was paid in the first quarter of 2012. We also paid $0.9 million in the third quarter of fiscal 2012 and are obligated to pay anadditional $0.3 million on or before December 31, 2013 related to contractually obligated tenant improvement reimbursement expense. The provisions relatingto the occupied 4300 building remain unchanged. Under the existing provisions, the current term of the lease ends on January 31, 2019. The table below summarizes the balance of accrued facility consolidation reserve and the changes in the accrual for fiscal 2012 (in thousands): Balance at December 31, 2011 $6,337 Payments (6,084)Other assumption changes (30)Accretion of liability 79 Balance at December 29, 2012 $302 4. Assets Held for Sale and Net Gain on Disposition As part of our efforts to improve our cost structure and cash flow, we closed certain facilities and designated them as assets held for sale. At the time ofdesignation, we ceased recognizing depreciation expense on these assets. As of December 29, 2012 and December 31, 2011, total assets held for sale were $1.6million and $2.3 million, respectively, and were included in “Other current assets” in our Consolidated Balance Sheets. During fiscal 2012, we sold certainreal properties held for sale, which had a total carrying value of $7.4 million, that resulted in a $9.9 million gain recorded in “Selling, general, andadministrative” expenses in the Consolidated Statements of Operations. During fiscal 2011, we sold certain real properties held for sale, which had a totalcarrying value of $4.0 million, that resulted in a $5.2 million gain recorded in “Selling, general, and administrative” expenses in the Consolidated Statementsof Operations. We continue to actively market the remaining properties that are held for sale. Due to the fact that as of December 29, 2012 the remainingproperties are all land, depreciation expense is not impacted. 53Table of Contents 5. Income Taxes Our provision for (benefit from) income taxes consists of the following: Fiscal YearEndedDecember 29,2012 Fiscal YearEndedDecember 31,2011 Fiscal YearEndedJanuary 1,2011 (In thousands) Federal income taxes: Current $16 $(89) $(637)Deferred — — (556)State income taxes: Current 334 759 (145)Deferred — — (100)Foreign income taxes: Current 56 317 793 Deferred (20) (25) 56 Provision for (benefit from) income taxes $386 $962 $(589) The federal statutory income tax rate was 35%. Our provision for (benefit from) income taxes is reconciled to the federal statutory amount as follows: Fiscal YearEndedDecember 29,2012 Fiscal YearEndedDecember 31,2011 Fiscal YearEndedJanuary 1,2011 (In thousands) Benefit from income taxes computed at the federal statutory tax rate $(7,924) $(13,162) $(18,841)Benefit from state income taxes, net of federal benefit (866) (1,296) (2,153)Valuation allowance change 8,820 14,498 18,433 Nondeductible items 484 806 3,128 Other (128) 116 (1,156)Provision for (benefit from) income taxes $386 $962 $(589) Our income before provision for income taxes for our Canadian operations was $0.1 million, $0.9 million and $1.6 million for fiscal 2012, fiscal 2011,and fiscal 2010, respectively. For fiscal 2012, we recognized tax expense of $0.4 million. The expense recognized for the year is primarily comprised of $0.3 million for current stateincome tax expense related to earnings generated on a separate company basis. For fiscal 2011, we recognized tax expense of $1.0 million. The expense recognized for the year is primarily comprised of $0.8 million for current stateincome tax expense related to earnings generated on a separate company basis and $0.3 million of current income tax expense resulting from foreign incometaxes. In accordance with the intraperiod tax allocation provisions of U.S. GAAP, we are required to consider all items (including items recorded in othercomprehensive income) in determining the amount of tax benefit that results from a loss from continuing operations that should be allocated to continuingoperations. In fiscal 2012 and fiscal 2011, there was no intraperiod tax allocation due to the fact that there was a loss in other comprehensive income for theperiod. While the income tax benefit from continuing operations is reported in our Consolidated Statements of Operations, the income tax expense on othercomprehensive income is recorded directly to accumulated other comprehensive loss, which is a component of stockholders’ equity. Our financial statements contain certain deferred tax assets which have arisen primarily as a result of tax benefits associated with the loss before incometaxes incurred, as well as net deferred income tax assets resulting from other temporary differences related to certain reserves, pension obligations anddifferences between book and tax depreciation and amortization. We record a valuation allowance against our net deferred tax assets when we determine thatbased on the weight of available evidence, it is more likely than not that our net deferred tax assets will not be realized. 54Table of Contents In our evaluation of the weight of available evidence, we considered recent reported losses as negative evidence which carried substantial weight. Therefore,we considered evidence related to the four sources of taxable income, to determine whether such positive evidence outweighed the negative evidence associatedwith the losses incurred. The positive evidence considered included: ●taxable income in prior carryback years, if carryback is permitted under the tax law; ●future reversals of existing taxable temporary differences ●tax planning strategies; and ●future taxable income exclusive of reversing temporary differences and carryforwards. During the first quarter of fiscal 2009, we evaluated the weight of available positive and negative evidence relative to changes in the environment duringthe first quarter of 2009. In late March and April, subsequent to the filing of the fiscal 2008 10-K, we experienced a substantial drop in revenue compared toexpectations. As such, these changes in our internal assumptions and the revised external expectations of 2009 housing starts resulted in a change in ourprojections from cumulative pretax income to cumulative pretax loss for the three year period ended 2010, causing us to conclude that, as of April 4, 2009, theweight of the positive evidence was no longer sufficient to overcome the weight of the negative evidence of a three year cumulative loss, therefore, a fullvaluation allowance for all deferred income tax assets was necessary at the end of the first quarter of fiscal 2009. During fiscal 2012 and 2011, we weighed all available positive and negative evidence and concluded the weight of the negative evidence of a three yearcumulative loss continued to outweigh the positive evidence. Based on the conclusions reached, we continued to maintain a full valuation allowance during2012 and 2011. The components of our net deferred income tax assets (liabilities) are as follows: December 29,2012 December 31,2011 (In thousands) Deferred income tax assets: Inventory reserves $2,816 $3,012 Compensation-related accruals 5,838 5,979 Accruals and reserves 92 176 Accounts receivable 1,327 1,169 Restructuring costs 118 2,540 Pension 16,936 13,713 Benefit from NOL carryovers(1) 52,088 41,770 Other 695 646 Total gross deferred income tax assets 79,910 69,005 Less: Valuation allowances (78,050) (66,793)Total net deferred income tax assets $1,860 $2,212 Deferred income tax liabilities: Intangible assets (60) (176)Property and equipment (1,065) (1,211)Pension — — Other (739) (849)Total deferred income tax liabilities (1,864) (2,236)Deferred income tax assets (liabilities), net $(4) $(24) (1)Our federal and state NOL carryovers will expire over 1 to 20 years. 55Table of Contents Activity in our deferred tax asset valuation allowance for fiscal 2012 and fiscal 2011 was as follows (in thousands): Fiscal YearEndedDecember 29,2012 Fiscal YearEndedDecember 31,2011 Balance at beginning of the year $66,793 $46,528 Valuation allowance removed for taxes related to: Income before income taxes — — Valuation allowance provided for taxes related to: Loss before income taxes 11,257 20,265 Effect of a change in judgment — — Balance at end of the year $78,050 $66,793 We have recorded income tax and related interest liabilities where we believe certain of our tax positions are not more likely than not to be sustained ifchallenged. The following table summarizes the activity related to our unrecognized tax benefits: (In thousands) Balance at January 2, 2010 $739 Increases related to current year tax positions — Additions for tax positions in prior years — Reductions for tax positions in prior years (62)Settlements — Balance at January 1, 2011 677 Increases related to current year tax positions — Additions for tax positions in prior years 196 Reductions for tax positions in prior years — Settlements — Balance at December 31, 2011 873 Increases related to current year tax positions — Additions for tax positions in prior years — Reductions for tax positions in prior years — Reductions due to lapse of applicable statute of limitations (47)Settlements — Balance at December 29, 2012 $826 Included in the unrecognized tax benefits at December 29, 2012 and December 31, 2011 were $0.8 million and $0.9 million, respectively, of tax benefitsthat, if recognized, would reduce our annual effective tax rate. We also accrued an immaterial amount of interest related to these unrecognized tax benefitsduring 2012 and 2011, and this amount is reported in “Interest expense” in our Consolidated Statements of Operations. We do not expect our unrecognized taxbenefits to change materially over the next 12 months. We file U.S., state, and foreign income tax returns in jurisdictions with varying statutes of limitations. The 2009 through 2012 tax years generally remainsubject to examination by federal and most state and foreign tax authorities. 6. Receivables We have a diversified customer base concentrated in the building products business. Credit risk is monitored and provisions for expected losses areprovided as determined necessary by management. We generally do not require collateral. The following reflects our activity in receivables related reserve accounts: BeginningBalance Expense/(Income) Write offs andOther, Net EndingBalance (In thousands) Fiscal 2010 Allowance for doubtful accounts and related reserves $8,387 $2,222 $(4,894) $5,715 Fiscal 2011 Allowance for doubtful accounts and related reserves $5,715 $2,576 $(3,156) $5,135 Fiscal 2012 Allowance for doubtful accounts and related reserves $5,135 $2,034 $(2,449) $4,720 56Table of Contents 7. Stock-Based Compensation We have two stock-based compensation plans covering officers, directors and certain employees and consultants: the 2004 Equity Incentive Plan (the“2004 Plan”) and the 2006 Long Term Equity Incentive Plan (the “2006 Plan”). The plans are designed to motivate and retain individuals who are responsiblefor the attainment of our primary long-term performance goals. The plans provide a means whereby our employees and directors develop a sense ofproprietorship and personal involvement in our development and financial success and encourage them to devote their best efforts to our business. Although wedo not have a formal policy on the matter, we issue new shares of our common stock to participants, upon the exercise of options or vesting of restricted stock,out of the total amount of common shares authorized for issuance under the 2004 Plan and the 2006 Plan. The 2004 Plan provides for the grant of nonqualified stock options, incentive stock options and restricted shares of our common stock to participants ofthe plan selected by our Board of Directors or a committee of the Board that administers the 2004 Plan. We reserved 2,222,222 shares of our common stockfor issuance under the 2004 Plan. The terms and conditions of awards under the 2004 Plan are determined by the administrator for each grant. The 2006 Plan permits the grant of nonqualified stock options, incentive stock options, stock appreciation rights, restricted stock, restricted stock units,performance shares, performance units, cash-based awards, and other stock-based awards to participants of the 2006 plan selected by our Board of Directorsor a committee of the Board that administers the 2006 Plan. We reserved 12,200,000 shares of our common stock for issuance under the 2006 Plan. The termsand conditions of awards under the 2006 Plan are determined by the administrator for each grant. Awards issued under the 2006 Plan are subject to acceleratedvesting in the event of a change in control as such event is defined in the 2006 Plan. On January 10, 2012, January 18, 2012, April 18, 2012, August 6,2012 and August 31, 2012, the Compensation Committee granted 2,025,335, 7,500, 10,000, 15,000 and 10,000 restricted shares of our common stock tocertain members of our management and certain directors, respectively. There were no stock options granted during fiscal 2012, 2011 or fiscal 2010. We recognize compensation expense equal to the grant-date fair value for all share-based payment awards that are expected to vest. This expense is recordedon a straight-line basis over the requisite service period of the entire award, unless the awards are subject to market or performance conditions, in which casewe recognize compensation expense over the requisite service period of each separate vesting tranche to the extent the occurrence of such conditions are probable.All compensation expense related to our share-based payment awards is recorded in “Selling, general and administrative” expense in the ConsolidatedStatements of Operations. As of December 29, 2012, there was $2.5 million of total unrecognized compensation expense related to restricted stock. The unrecognized compensationexpense for restricted stock is expected to be recognized over weighted average term of 1.4 years. As of December 31, 2011, there was $2.3 million of totalunrecognized compensation expense related to restricted stock. There was no future compensation expense remaining for options as of December 29, 2012 andDecember 31, 2011. As of December 29, 2012, the weighted average remaining contractual term for our options and restricted stock was 4.9 years and 1.3years, respectively. As of December 31, 2011, the weighted average remaining contractual term for our options and restricted stock was 5.9 years and 1.2years, respectively. The maximum contractual term for stock options and restricted stock is 10 years and 1 to 5 years, respectively. For fiscal 2012, fiscal 2011 and fiscal 2010, our total stock-based compensation expense was $2.8 million, $2.0 million, and $4.0 million, respectively.We also recognized related income tax benefits of $1.1 million, $0.8 million and $1.5 million, respectively which has been offset by a valuation allowance. The total fair value of the options vested in fiscal 2011 and fiscal 2010 was $0.7 million and $1.0 million, respectively. There were no options vested infiscal 2012. For restricted stock, the total fair value vested in 2012, fiscal 2011 and fiscal 2010 was $2.3 million, $2.2 million and $1.5 million,respectively. There were no stock option exercises during fiscal 2012, fiscal 2011 or fiscal 2010. We present the benefits of tax deductions in excess of recognizedcompensation expense as both a financing cash inflow and an operating cash outflow in our Consolidated Statements of Cash Flows when present. There wereno excess tax benefits in fiscal 2012, fiscal 2011 or fiscal 2010. 57Table of Contents On December 14, 2010, the Compensation Committee approved an amendment to the 2008 Performance Share Award Agreement under the 2006Plan. The Amendment provides that the Company may, at the discretion of the Compensation Committee, settle grants pursuant to Performance Share AwardAgreements either in (i) one share of common stock of the Company for each Performance Share (as defined in the 2006 Plan) earned or (ii) a lump sum cashpayment equal to the Fair Market Value (as defined in the 2006 Plan) of one share of common stock of the Company for each Performance Share earned. TheAmendment was determined to be a modification of the award and an adjustment related to the difference in fair value was recorded in fiscal 2010. The award,which impacts eight employees, was classified as a liability award and was marked to market. On January 1, 2011, the fair value of these awards was basedon the closing price of our common stock on December 31, 2010 of $3.66. These awards were settled in cash on January 7, 2011. Our restricted stock unitswere also settled in cash upon vesting and were considered liability awards. Therefore, these are not included in the computation of the basic and dilutedearnings per share. The tables below summarize activity and include certain additional information related to our outstanding employee stock options for the three years endedDecember 29, 2012. There have been no new employee stock option grants for the three years ended December 29, 2012. Shares WeightedAverageExercisePrice Options outstanding at January 2, 2010 928,315 $6.34 Options granted — — Options exercised — — Options forfeited (2,300) 14.01 Options expired (1,200) 14.01 Options outstanding at January 1, 2011 924,815 6.31 Options granted — — Options exercised — — Options forfeited — — Options expired (19,499) 12.53 Options outstanding at December 31, 2011 905,316 6.18 Options granted — — Options exercised — — Options forfeited — — Options expired — — Options outstanding at December 29, 2012 905,316 6.18 Options exercisable at December 29, 2012 905,316 $6.18 Outstanding Exercisable Price Range Number ofOptions WeightedAverageExercisePrice RemainingContractual Life(in Years) Number ofOptions WeightedAverageExercisePrice RemainingContractual Life(in Years) $4.66 750,000 $4.66 5.2 750,000 $4.66 5.2 $10.29-$14.01 155,316 $13.51 3.3 155,316 $13.51 3.3 905,316 4.9 905,316 4.9 The following tables summarize activity for our performance shares, restricted stock awards and restricted stock unit awards during fiscal 2012, fiscal2011 and fiscal 2010: Restricted Stock PerformanceShares RestrictedStock Units Number ofAwards WeightedAverage FairValue Number ofAwards Number ofAwards (1) Outstanding at January 2, 2010 1,539,129 $4.42 180,605 144,550 Granted 747,737 3.07 — — Increase due to assumption changes — — 112,955 — Vested (340,578) 4.49 — — Forfeited (32,000) 3.47 (52,725) (16,600)Outstanding at January 1,2011 1,914,288 2.67 240,835 127,950 Granted 819,240 3.14 — — Vested (364,303) 6.16 (240,835) (63,200)Forfeited (7,801) 3.26 — (15,400)Outstanding at December 31,2011 2,361,424 3.22 — 49,350 Granted 2,067,835 1.52 — — Vested (681,484) 3.39 — (48,250)Forfeited (193,037) 2.76 — (1,100)Outstanding at December 29, 2012 3,554,738 $ 1.22 — — (1)As the restricted stock units will be settled in cash, the fair value of these awards is marked-to-market each reporting period through the date ofsettlement. During fiscal 2012 and fiscal 2011, certain restricted stock units vested and approximately $0.1 million and $0.2 million, respectively waspaid out to settle these awards. 58Table of Contents 8. Employee Benefits Defined Benefit Pension Plans Most of our hourly employees participate in noncontributory defined benefit pension plans, which include a plan that is administered solely by us (the“hourly pension plan”) and union-administered multiemployer plans. Our funding policy for the hourly pension plan is based on actuarial calculations andthe applicable requirements of federal law. We believe that each multiemployer pension plan is immaterial to our financial statements and that we represent animmaterial portion of the total contributions and future obligations of these plans. Contributions to multiemployer plans are generally based on negotiated laborcontracts. We contributed $1.3 million, $1.2 million, and $1.1 million to union administered multiemployer pension plans for fiscal 2012, fiscal 2011, andfiscal 2010, respectively. Benefits under the majority of plans for hourly employees (including multiemployer plans) are primarily related to years of service. The following tables set forth the change in projected benefit obligation and the change in plan assets for the hourly pension plan: December 29,2012 December 31,2011 (In thousands) Change in projected benefit obligation: Projected benefit obligation at beginning of period $99,425 $87,510 Service cost 1,878 2,091 Interest cost 4,885 4,609 Actuarial loss 12,183 9,029 Curtailment — — Benefits paid (4,041) (3,814)Projected benefit obligation at end of period 114,330 99,425 Change in plan assets: Fair value of assets at beginning of period 63,896 68,725 Actual return (loss) on plan assets 6,758 (1,015)Employer contributions 1,147 — Benefits paid (4,041) (3,814)Fair value of assets at end of period 67,760 63,896 Net (unfunded) status of plan $(46,570) $(35,529) We recognize the unfunded status (i.e., the difference between the fair value of plan assets and the projected benefit obligations) of our pension plan in ourConsolidated Balance Sheets, with a corresponding adjustment to accumulated other comprehensive loss, net of tax, offset by a valuation allowance. OnDecember 29, 2012, we measured the fair value of our plan assets and benefit obligations. As of December 29, 2012 and December 31, 2011, the netunfunded status of our benefit plan was $46.6 million and $35.5 million, respectively. These amounts were included in “Other non-current liabilities” on ourConsolidated Balance Sheets. The net adjustment to other comprehensive loss for fiscal 2012, fiscal 2011, and fiscal 2010 was $8.2 million loss ($8.2million loss, net of tax, offset by a valuation allowance), $15.0 million loss ($15.0 million loss, net of tax, offset by a valuation allowance), $1.0 million loss($0.6 million loss, net of tax), respectively, which represents the net unrecognized actuarial (loss) gain and unrecognized prior service cost. 59Table of Contents The increase in the unfunded obligation for the period was approximately $11.0 million and was comprised of $6.7 million of liability growth, $12.2million of actuarial losses offset by $6.8 million of asset returns and $1.1 million of pension contributions. The main driver of the $12.2 million of liabilityloss was the change in the underlying discount rate assumption which decreased from 5.02% in fiscal 2011 to 4.24% in fiscal 2012. The net periodicpension costs also increased to $3.9 million in fiscal 2012 from $1.8 million in fiscal 2011 and were primarily driven by an increase in the unrecognizedamortization of the actuarial loss attributable to the decrease in the discount rate from 5.39% in fiscal 2010 to 5.02% in 2011 and a reduction in the hourlypension plan’s expected return on plan assets due to lowering the expected rate of return from 8.25% to 7.85%. The unfunded status and the amounts recognized on our Consolidated Balance Sheets for the hourly pension plan are set forth in the following table: December 29,2012 December 31,2011 (In thousands) Unfunded status $(46,570) $(35,529)Unrecognized prior service cost 2 3 Unrecognized actuarial loss 37,459 29,213 Net amount recognized $(9,109) $(6,313)Amounts recognized on the balance sheet consist of: Accrued pension liability (46,570) (35,529)Accumulated other comprehensive loss (pre-tax) 37,461 29,216 Net amount recognized $(9,109) $(6,313) The portion of estimated net loss for the hourly pension plan that is expected to be amortized from accumulated other comprehensive loss into net periodiccost over the next fiscal year is $2.9 million. The expected amortization of prior service cost recognized into net periodic cost over the next fiscal year isimmaterial. The accumulated benefit obligation for the hourly pension plan was $111.1 million and $96.8 million at December 29, 2012 and December 31, 2011,respectively. Net periodic pension cost for our pension plans included the following: Fiscal Year EndedDecember 29,2012 Fiscal Year EndedDecember 31,2011 Fiscal Year EndedJanuary 1,2011 (In thousands) Service cost $1,878 $2,091 $1,992 Interest cost on projected benefit obligation 4,885 4,609 4,744 Expected return on plan assets (4,897) (5,505) (4,926)Amortization of unrecognized loss 2,077 579 494 Amortization of unrecognized prior service cost — — — Net periodic pension cost $3,943 $1,774 $2,304 The following assumptions were used to determine the projected benefit obligation at the measurement date and the net periodic pension cost: December 29,2012 December 31,2011 Projected benefit obligation: Discount rate 4.24% 5.02%Average rate of increase in future compensation levels 3.00% 3.00%Net periodic pension cost Discount rate 5.02% 5.39%Average rate of increase in future compensation levels 3.00% 4.00%Expected long-term rate of return on plan assets 7.85% 8.25% Our estimates of the amount and timing of our future funding obligations for our defined benefit pension plans are based upon various assumptionsspecified above. These assumptions include, but are not limited to, the discount rate, projected return on plan assets, compensation increase rates, mortalityrates, retirement patterns, and turnover rates. 60Table of Contents As indicated in the table above, we used a discount rate of 4.24% to compute the projected benefit obligation, which was determined by matching of planliability cash flows to a portfolio of bonds. A change in the discount rate of 25 basis points, from 4.24% to 4.49%, while holding all other assumptionsconstant, would have resulted in a reduction in the Company’s projected benefit obligation of approximately $3.7 million in 2012. As indicated in the table above, we used an estimated rate of future compensation increases of 3.00% to compute the projected benefit obligation. A changein the rate of 25 basis points, from 3.00% to 3.25%, while holding all other assumptions constant, would have resulted in an increase in the Company’sprojected benefit obligation of less than $0.2 million in 2012. Determination of expected long-term rate of return In developing expected return assumptions for our pension plan, the most influential decision affecting long-term portfolio performance is thedetermination of overall asset allocation. An asset class is a group of securities that exhibit similar characteristics and behave similarly in the marketplace. Thethree main asset classes are equities, fixed income, and cash equivalents. Upon calculation of the historical risk premium for each asset class, an expected rate of return can be established based on assumed 90-day Treasury billrates. Based on the normal asset allocation structure of the portfolio (65% equities, 30% fixed income, and 5% other) with historical compound annualizedrisk free rate of 4.10%, the expected overall portfolio return is 8.35% offset by 0.5% expense estimate resulting in a 7.85% net long term rate of return as ofDecember 29, 2012. Our percentage of fair value of total assets by asset category as of our measurement date is as follows: Asset Category December29,2012 December31,2011 Equity securities — domestic 56% 47%Equity securities — international 9% 5%Fixed income 31% 45%Other 4% 3%Total 100% 100% The fair value of our plan assets by asset category as of December 29, 2012 was as follows (in thousands): Asset Category Level 1 Equity securities — domestic $37,623 Equity securities — international 6,304 Fixed income 20,848 Other 2,985 Total $67,760 The fair value of our plan assets by asset category as of December 31, 2011 was as follows (in thousands): Asset Category Level 1 Equity securities — domestic $30,179 Equity securities — international 2,843 Fixed income 28,975 Other 1,899 Total $63,896 The plan assets are valued using quoted market prices in active markets and we consider the investments to be Level 1 in the fair value hierarchy. SeeNote 13 for a discussion of the levels of inputs to determine fair value. 61Table of Contents Investment policy and strategy Plan assets are managed as a balanced portfolio comprised of two major components: an equity portion and a fixed income portion. The expected role ofplan equity investments will be to maximize the long-term real growth of fund assets, while the role of fixed income investments will be to generate currentincome, provide for more stable periodic returns, and provide some downside protection against the possibility of a prolonged decline in the market value ofequity investments. We review this investment policy statement at least once per year. In addition, the portfolio will be reviewed quarterly to determine thedeviation from target weightings and will be rebalanced as necessary. Target allocations for fiscal 2013 are 50% domestic and 15% international equityinvestments, 30% fixed income investments, and 5% cash. The expected long-term rate of return for the plan’s total assets is based on the expected return ofeach of the above categories, weighted based on the target allocation for each class. Our estimated future benefit payments reflecting expected future service are as follows (in thousands): Fiscal Year Ending (In thousands) January 4, 2014 $4,642 January 3, 2015 4,832 January 2, 2016 5,010 December 31, 2016 5,319 December 30, 2017 5,670 Thereafter 32,774 The Company’s required cash contribution to the pension plan in 2012 was approximately $3.3 million. The 2012 required contribution wascomprised of approximately $1.2 million related to our 2011 minimum required contribution and approximately $2.1 million related to our 2012 minimumrequired contribution. The Company’s minimum required contribution for plan year 2012 was $3.2 million. The Company has funded the $1.2million related to its 2011 minimum required contribution with cash in 2012. However, in an effort to preserve additional cash for operations, we applied fora waiver from the IRS for our 2012 minimum required contribution. The waiver is still being reviewed by the IRS. We have not made the $2.1 million ofrequired 2012 contributions related to the 2012 minimum required contribution. If we are granted the requested waiver, our contributions for 2012 will beamortized over the following five years, increasing our future minimum required contributions. We are currently required to make three quarterly cashcontributions during fiscal 2013 of $0.8 million per quarter related to our 2013 minimum required contribution. We are pursuing contributing personalproperty to the pension plan during fiscal 2013. We will designate the contribution such that it will offset our future minimum required contribution. Defined Contribution Plans Our employees also participate in several defined contribution plans. Contributions to the plans are based on employee contributions and compensation.Contributions to the hourly defined contribution plan totaled $0.1 million, $0.1 million, and $0.1 million for fiscal 2012, fiscal 2011, and fiscal 2010,respectively. During fiscal 2009, we suspended the Company matching contributions to our defined salaried contribution plan as part of our cost reductioninitiatives. The Company match was reinstated on January 1, 2012. Contributions to the salaried defined contribution plan totaled $1.0 million for fiscal2012. 9. Inventory Reserve Accounts The following reflects our activity for inventory reserve accounts (in thousands): BeginningBalance Expense Write-offs andOther, net EndingBalance Fiscal 2010 Obsolescence/damaged inventory reserve $2,573 $667 $(1,570) $1,670 Lower of cost or market reserve $— $722 $(722) $— Fiscal 2011 Obsolescence/damaged inventory reserve $1,670 $2,309 $(2,487) $1,492 Lower of cost or market reserve $— $— $— $— Fiscal 2012 Obsolescence/damaged inventory reserve $1,492 $3,625 $(3,991) $1,126 Lower of cost or market reserve $— $— $— $— 62Table of Contents 10. Revolving Credit Facilities We have our U.S. revolving credit facility agreement (the “U.S. revolving credit facility”) with Wells Fargo Bank, National Association, successor bymerger to Wachovia Bank, National Association, dated August 4, 2006, as amended. The U.S. revolving credit facility agreement has a final maturity ofJanuary 7, 2014 and maximum available credit of $400 million. The U.S. revolving credit facility also includes an additional $100 million uncommittedaccordion credit facility, which permits us to increase the maximum available credit up to $500 million. 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 interest rate on the U.S. revolving credit facility was 4.1% at December 29, 2012. As of December 31, 2011, we hadoutstanding borrowings of $93.4 million and excess availability of $115.7 million under the terms of our U.S. revolving credit facility. The interest rate onthe U.S. revolving credit facility was 4.2% at December 31, 2011. As of December 29, 2012 and December 31, 2011, we had outstanding letters of credittotaling $4.5 million and $2.7 million, respectively, for the purposes of securing collateral requirements under casualty insurance programs and forguaranteeing lease and certain other obligations. The $4.5 million in outstanding letters of credit as of December 29, 2012 does not include an additional $1.5million fully collateralized letter of credit securing certain insurance obligations that was issued outside of the U.S. revolving credit facility. As of December 29, 2012, our U.S. revolving credit facility, as amended, contains customary negative covenants and restrictions for asset based loans,including a requirement that we maintain a fixed charge coverage ratio of 1.1 to 1.0 in the event our excess availability falls below the Excess AvailabilityThreshold. The fixed charge coverage ratio is calculated as EBITDA divided by the sum of cash payments for income taxes, interest expense, cashdividends, principal payments on debt, and capital expenditures. EBITDA is defined as BlueLinx Corporation’s net income before interest and tax expense,depreciation and amortization expense, and other non-cash charges. The fixed charge coverage ratio requirement only applies to us when excess availabilityunder our amended U.S. revolving credit facility is less than the Excess Availability Threshold on any date. As of December 29, 2012 and through the time ofthe filing of this Form 10-K, we were in compliance with all covenants under the U.S. revolving credit facility. We are required to maintain the ExcessAvailability Threshold in order to avoid being required to meet certain financial ratios and triggering additional limits on capital expenditures. Our lowest levelof fiscal month-end availability in the last three years as of December 29, 2012 was $86.0 million, which is the excess availability as of that date. We do notanticipate our excess availability in fiscal 2013 will drop below the Excess Availability Threshold. Should our excess availability fall below the ExcessAvailability Threshold on any date, however, we would not meet the required fixed charge coverage ratio covenant with our current operating results. In the event that excess availability falls below $35 million or the amount equal to 15% of the lesser of the borrowing base or $400 million, the U.S.revolving credit facility gives the lenders the right to dominion of our bank accounts. This would not make the underlying debt callable by the lender and maynot change our ability to borrow on the U.S. revolving credit facility. However, we would be required to reclassify the “Long-term debt” to “Current maturitiesof long-term debt” on our Consolidated Balance Sheet. In addition, we would be required to maintain a springing lock-box arrangement where customerremittances go directly to a lock-box maintained by our lenders and then are forwarded to our general bank accounts. Our outstanding borrowings are notreduced by these payments unless our excess availability falls below the greater of $35 million or the amount equal to 15% of the lesser of the borrowing baseor $400 million on any date or in the event of default. Our amended U.S. revolving credit facility does not contain a subjective acceleration clause, whichwould allow our lenders to accelerate the scheduled maturities of our debt or to cancel our agreement. On January 10, 2013, we filed a registration statement on Form S-1 with the SEC for a planned rights offering of our common stock to our stockholders,which seeks to raise gross proceeds of $40 million (“the rights offering”). In connection with the rights offering we plan to distribute to our commonstockholders non-transferable rights to subscribe for and purchase up to $40 million of our common stock. The estimated net proceeds from the rightsoffering of approximately $39 million will be used to pay down the U.S. revolving credit facility. See subsequent events disclosed in Note 16. The Company intends to amend and extend its $400 million U.S. revolving credit facility. The amendment will extend the maturity by three years fromthe 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 $422.5million. The amended U.S. revolving credit facility is also expected to continue to have a $100 million uncommitted accordion credit facility to potentiallyincrease the maximum available credit to $522.5 million. The amended U.S. revolving credit facility is expected to include covenants substantially similar tothose in the existing U.S. credit facility. 63Table of Contents The Company has engaged Wells Fargo Capital Finance (“Wells Fargo”) as sole lead arranger for the transaction. Wells Fargo has informed the Companythat it has received commitments from several financial institutions with respect to the U.S. revolving credit facility, subject to execution of satisfactorydocumentation and the completion of the $40 million rights offering of common stock announced on January 10, 2013. Closing is expected to occurconcurrently with the completion of the rights offering of common stock. The definitive terms of, and the obligations of BlueLinx, Wells Fargo, and/or anymembers of the syndicate of financial institutions to enter into such an amendment to the U.S. revolving credit facility are subject to additional discussionsand negotiations among the parties, and there is no assurance that an amendment to the existing U.S. revolving credit facility will be consummated. On July 22, 2011, we concluded an offering of our common stock to our stockholders, pursuant to which we distributed to our common stockholderstransferable rights to subscribe for and purchase up to $60 million of our common stock. The 2011 rights offering was fully subscribed and resulted ingross proceeds of approximately $60 million. The net proceeds from the 2011 rights offering were approximately $58 million, and $56 million of the netproceeds were used to pay down the U.S. revolving credit facility. A payment on the U.S. revolving credit facility of $50.0 million was made on July 29,2011 and an additional payment of $6.0 million was made on August 1, 2011. On May 10, 2011, we entered into an amendment to our U.S. revolving credit facility, which became effective on July 29, 2011 pursuant to whichcertain components of the borrowing base calculation and excess liquidity calculation were adjusted as part of this amendment. The most significant of thechanges included in the amendment are described in the discussion of the terms and covenants of the U.S. revolving credit facility above. On August 12, 2011, our subsidiary BlueLinx Canada entered into the Canadian revolving credit facility with CIBC Asset-Based Lending Inc., aslender, administrative agent and the Agent. The maturity date of this agreement is August 12, 2014. As of December 29, 2012, we had outstandingborrowings of $1.9 million and excess availability of $2.0 million under the terms of our Canadian revolving credit facility. The interest rate on the Canadianrevolving credit facility was 4.0% at December 29, 2012. As of December 31, 2011, we had outstanding borrowings of $1.1 million and excess availability of$2.6 million under the terms of our Canadian revolving credit facility. The interest rate on the Canadian revolving credit facility was 4.0% at December 31,2011. The Canadian revolving credit facility contains customary covenants and events of default for asset-based credit agreements of this type, including therequirement for BlueLinx Canada to maintain a minimum adjusted tangible net worth of $3.9 million and for that entity’s capital expenditures not to exceed120% of the amount budgeted in a given year. As of December 29, 2012 and through the time of the filing of this Form 10-K, we were in compliance with allcovenants under this facility. In conjunction with the Canadian revolving credit facility and the modification of our U.S. revolving credit facility we incurred approximately $1.0million in debt fees that were capitalized and are being amortized over the remaining terms of each respective agreement. We believe that the amounts available from our revolving credit facilities and other sources are sufficient to fund our routine operations and capitalrequirements for the next 12 months. If economic conditions, especially those related to the housing market, do not continue to improve, we may need to seekadditional sources of capital to support our operations. 11. Mortgage We have a $295 million mortgage loan with the German American Capital Corporation. The mortgage has a term of ten years and is secured by 51distribution facilities and 1 office building owned by the special purpose entities. The stated interest rate on the mortgage is fixed at 6.35%. German AmericanCapital Corporation assigned half of its interest in the mortgage loan to Wachovia Bank, National Association and both lenders securitized their Notes inseparate commercial mortgage backed securities pools in 2006. On September 19, 2012, we entered into an amendment to our mortgage agreement, which provided for the immediate prepayment of approximately $11.8million of the indebtedness under the mortgage agreement without incurring a prepayment premium from cash currently held as collateral under the mortgageagreement. In addition, on the last business day of each calendar quarter, starting with the fourth quarter of 2012, additional funds held as collateral underthe mortgage agreement will be used to prepay indebtedness under the mortgage agreement, without prepayment premium, up to an aggregate additionalprepayment of $10.0 million. Thereafter, any cash remaining in the collateral account under the mortgage agreement, up to an aggregate of $10.0 million, willbe released to the Company on the last business day of each calendar quarter through the second quarter of 2014. All funds released pursuant to theseprovisions may only be used by the Company to pay for usual and customary operating expenses. During the periods described above in which cash in thecollateral account is used to either prepay indebtedness under the mortgage agreement or released to the Company, the lenders will not release any of the cashcollateral to the Company for specified capital expenditures as previously provided under the mortgage agreement. Under the terms of our mortgage, we arerequired to transfer certain funds to be held as collateral. We expect to transfer approximately $13.2 million as collateral during the next twelve monthperiod, approximately $6.4 million of which will be used to reduce mortgage principal on a quarterly basis. The remaining amount of approximately $6.8million will be remitted to us on a quarterly basis for uses as indicated in the amendment. In conjunction with the modification of our mortgage agreement weincurred approximately $0.3 million in fees that were capitalized and are being amortized over the remaining term of the mortgage. 64Table of Contents On July 14, 2011, we entered into an amendment to the mortgage which (i) eliminated the requirement to obtain lender approval for any transfer of equityinterests that would reduce Cerberus ABP Investor LLC’s ownership in the Company and certain of our subsidiaries, directly or indirectly, to less than 51%,(ii) provided for the immediate prepayment of $38.3 million of the indebtedness under the mortgage without incurring a prepayment premium from fundscurrently held as collateral under the mortgage and, if certain conditions are met, will allow for an additional prepayment on or after July 30, 2014 from fundsheld as collateral without incurrence of a prepayment premium, (iii) allow us, at the lenders’ reasonable discretion, to use a portion of the cash held ascollateral under the mortgage for specified alterations, repairs, replacements and other improvements to the mortgaged properties, and (iv) in the event certainfinancial conditions are met and the Company extends the Amended and Restated Master Lease by and among certain of our subsidiaries with respect toproperties covered by the mortgage for an additional five years, we may request the lenders to disburse to the Company a portion of the cash held as collateralunder the mortgage. In conjunction with the modification of our mortgage agreement we incurred approximately $2.9 million in debt fees that were capitalizedand are being amortized over the remaining term of the mortgage. During the first quarter of fiscal 2012, we sold certain parcels of excess land. As a result of the sale of one of these parcels, we increased the amount ofrestricted cash required to be held in connection with our mortgage by $0.3 million. In addition, during the third quarter of fiscal 2012, we sold our facility inNewark, California and increased the restricted cash related to our mortgage by $12.8 million. This restricted cash was used to pay down the mortgage in thefourth quarter of fiscal 2012. During fiscal 2011, we sold certain real properties that ceased operations. As a result of the sale of these properties during fiscal2011, we increased the restricted cash related to our mortgage by $6.5 million which was used to reduce the mortgage principal in January of fiscal 2012. The mortgage loan required interest-only payments through June 2011, at which time we began making payments on the outstanding principal balance.The balance of the loan outstanding at the end of ten years will then become due and payable. The principal will be paid in the following increments (inthousands): 2013 $8,946 2014 2,556 2015 2,725 2016 191,753 2017 — Thereafter — Total $205,980 12. Derivatives On June 12, 2006, we entered into an interest rate swap agreement with Goldman Sachs Capital Markets, to hedge against interest rate risks related to ourvariable rate U.S. revolving credit facility. The interest rate swap was terminated in March of 2011. Due to the termination of the swap in fiscal 2011, the fairvalue of the swap as of December 31, 2011 was zero. Changes associated with the ineffective interest rate swap recognized in the Consolidated Statement ofOperations for the period from January 1, 2011 to October 1, 2011 were approximately $1.7 million of income and were comprised of amortization of theremaining accumulated other comprehensive loss of the ineffective swap of $0.5 million offset by income of $2.2 million related to reducing the fair value ofthe ineffective interest rate swap liability to zero. 65Table of Contents 13. Fair Value Measurements We determine a fair value measurement based on the assumptions a market participant would use in pricing an asset or liability. The fair valuemeasurement guidance established a three level hierarchy making a distinction between market participant assumptions based on (i) unadjusted quoted pricesfor identical assets or liabilities in an active market (Level 1), (ii) quoted prices in markets that are not active or inputs that are observable either directly orindirectly for substantially the full term of the asset or liability (Level 2), and (iii) prices or valuation techniques that require inputs that are both unobservableand significant to the overall fair value measurement (Level 3). Carrying amounts for our financial instruments are not significantly different from their fair value, with the exception of our mortgage. To determine thefair value of our mortgage, we used a discounted cash flow model. We believe the mortgage fair value valuation to be Level 2 in the fair value hierarchy, as thevaluation model has inputs that are observable for substantially the full term of the liability. Assumptions critical to our fair value measurements in the periodare present value factors used in determining fair value and an interest rate. At December 29, 2012, the discounted carrying value and fair value of ourmortgage was $202.7 million and $202.2 million, respectively. 14. Related Party Transactions Cerberus Capital Management, L.P., our equity sponsor, retains consultants that specialize in operations management and support and who provideCerberus with consulting advice concerning portfolio companies in which funds and accounts managed by Cerberus or its affiliates have invested. From timeto time, Cerberus makes the services of these consultants available to Cerberus portfolio companies. We believe that the terms of these consulting arrangementsare favorable to us, or, alternatively, are materially consistent with those terms that would have been obtained by us in an arrangement with an unaffiliatedthird party. We have normal service, purchase and sales arrangements with other entities that are owned or controlled by Cerberus. We believe that thesetransactions are not material to our results of operations or financial position. In connection with the rights offering, we plan to distribute to our common stockholders non-transferable rights to subscribe for and purchase up to $40million of our common stock. Cerberus ABP Investor LLC (“Cerberus”), the Company’s majority shareholder, has indicated that it intends, subject to theexercise price of the rights being set at an acceptable amount, to exercise all of the rights issued to it and to subscribe for the maximum additional sharespursuant to the over-subscription privilege that it would be entitled to purchase. However, such indication is not binding, and Cerberus is not legally obligatedto do so. See subsequent events disclosed in Note 16. 15. Commitments and Contingencies Self-Insurance It is our policy to self-insure, up to certain limits, traditional risks including workers’ compensation, comprehensive general liability, and auto liability.Our self-insured deductible for each claim involving workers’ compensation, and auto liability is limited to $0.8 million and $2.0 million, respectively. Ourself-insured retention for each claim involving comprehensive general liability (including product liability claims) is limited to $0.8 million. We are also self-insured up to certain limits for certain other insurable risks, primarily physical loss to property, excluding natural catastrophes ($0.1 million per occurrence),Director and Officer ($0.8 million per occurrence) and the majority of our medical benefit plans ($0.3 million per occurrence). Insurance coverage ismaintained for catastrophic property and casualty exposures as well as those risks required to be insured by law or contract. A provision for claims under thisself-insured program, based on our estimate of the aggregate liability for claims incurred, is revised and recorded annually. The estimate is derived from bothinternal and external sources including but not limited to actuarial estimates. The actuarial estimates are subject to uncertainty from various sources,including, among others, changes in claim reporting patterns, claim settlement patterns, judicial decisions, legislation, and economic conditions. Although, webelieve that the actuarial estimates are reasonable, significant differences related to the items noted above could materially affect our self-insurance obligations,future expense and cash flow. At December 29, 2012 and December 31, 2011, the self-insurance reserves totaled $7.2 million and $7.6 million, respectively.We incurred $10.7 million in expense and $11.1 million in payments, net of reimbursements in fiscal 2012 related to our workers compensation, auto, generalliability and health and welfare reserves. We incurred $12.8 million in expense and payments, net of reimbursements in fiscal 2011 related to our workerscompensation, auto, general liability and health and welfare reserves. 66Table of Contents Operating Leases Total rental expense was approximately $4.8 million, $4.8 million, and $5.0 million for fiscal 2012, fiscal 2011, and fiscal 2010, respectively. At December 29, 2012, our total commitments under long-term, non-cancelable operating leases were as follows (in thousands): 2013 $4,488 2014 3,943 2015 3,354 2016 3,394 2017 3,016 Thereafter 2,786 Total $20,981 Certain of our operating leases have extension options and escalation clauses. Capital Leases We entered into certain capital leases for trucks and trailers during fiscal 2012, fiscal 2011 and fiscal 2010. As of December 29, 2012, the basis and netbook value of assets under capital leases was $10.3 million and $9.3 million, respectively. As of December 31, 2011, the basis and net book value of assetsunder capital leases was $5.0 million and $4.0 million, respectively. As of January 1, 2011, the basis and net book value of assets under capital leases was$1.9 million and $1.6 million, respectively. Depreciation expense for capital leases is included in the total depreciation expense disclosed above. At December 29, 2012, our total commitments under long-term, non-cancelable capital leases were as follows (in thousands): Principal Interest 2013 $1,188 $347 2014 1,237 278 2015 1,292 206 2016 1,238 131 2017 709 71 Thereafter 727 26 Total $6,391 $1,059 Executory costs are nominal for each of the years present. Environmental and Legal Matters We are involved in various proceedings incidental to our businesses and are subject to a variety of environmental and pollution control laws andregulations in all jurisdictions in which we operate. Although the ultimate outcome of these proceedings cannot be determined with certainty, based on presentlyavailable information management believes that adequate reserves have been established for probable losses with respect thereto. Management further believesthat the ultimate outcome of these matters could be material to operating results in any given quarter but will not have a materially adverse effect on our long-term financial condition, our results of operations, or our cash flows. Collective Bargaining Agreements As of December 29, 2012, approximately 30% of our employees were represented by various labor unions. As of December 29, 2012, we had 42collective bargaining agreements, of which 10, covering approximately 132 total employees, are up for renewal in fiscal 2013. We consider our relationshipwith our employees generally to be good. 67Table of Contents 16. Subsequent Events On January 10, 2013, we filed a registration statement on Form S-1 with the SEC for a planned rights offering of our common stock to our stockholders,which seeks to raise gross proceeds of $40 million. In connection with the rights offering, we plan to distribute to our common stockholders non-transferablerights to subscribe for and purchase up to $40 million of our common stock. Cerberus, the Company’s majority stockholder, has indicated that it intends,subject to the exercise price of the rights being set at an acceptable amount, to exercise all of the rights issued to it and to subscribe for the maximum additionalshares pursuant to the over-subscription privilege that it would be entitled to purchase. However, such indication is not binding, and Cerberus is not legallyobligated to do so. We anticipate that the record date and the subscription price will be determined on or about the time the SEC declares our registrationstatement effective. The distribution of rights and commencement of the rights offering is expected to occur promptly following the effectiveness of thatregistration statement. We are not aware of any additional significant events that occurred subsequent to the balance sheet date but prior to the filing of this report that wouldhave a material impact on our Consolidated Financial Statements. 17. Accumulated Other Comprehensive Loss Comprehensive income (loss) is a measure of income which includes both net loss and other comprehensive income (loss). Other comprehensive income(loss) results from items deferred from recognition into our Consolidated Statements of Operations. Accumulated other comprehensive loss is separatelypresented on our Consolidated Balance Sheets as part of common stockholders’ (deficit) equity. Other comprehensive income (loss) was $(8.1) million,$(14.5) million, and $1.0 million for fiscal 2012, fiscal 2011, and fiscal 2010, respectively. For fiscal 2012 and 2011, there was no tax effect for any other comprehensive income (loss) items due to the fact that there was no intraperiod income taxallocation and the deferred tax benefit was fully offset by a valuation allowance. For fiscal 2010, other comprehensive income (loss) included tax benefits of$0.4 million related to our pension plan (see Note 8). Income tax expense recorded in other comprehensive income (loss) related to foreign currency translationwas $(0.2) million for fiscal 2010. Other comprehensive income (loss) for fiscal 2010 included tax expense of $(0.8) million related to our interest rate swap(see Note 12). Other comprehensive income (loss) did not include tax benefit (expense) related to our interest rate swap for other periods presented as the swapexpired in March of fiscal 2011. The accumulated balances for each component of other comprehensive income (loss) were as follows (in thousands): Fiscal YearEndedDecember 29,2012 Fiscal YearEndedDecember 31,2011 Fiscal YearEndedJanuary 1,2011 Foreign currency translation adjustment, net of tax $1,797 $1,694 $1,786 Unrealized loss from pension plan, net of tax (32,051) (23,806) (8,837)Unrealized income (loss) from cash flow hedge, net of tax 212 212 (307)Accumulated other comprehensive loss $(30,042) $(21,900) $(7,358) 18. Unaudited Selected Quarterly Financial Data Our fiscal year is a 52 or 53-week period ending on the Saturday closest to the end of the calendar year. Fiscal 2012, fiscal 2011, and fiscal 2010 eachcontained 52 weeks. Our fiscal quarters are based on a 5-4-4 week period. First Quarter Second Quarter Third Quarter Fourth Quarter Three MonthsEndedMarch 31,2012(a) Three MonthsEndedApril 2,2011(b) Three MonthsEndedJune 30,2012(c) Three MonthsEndedJuly 2,2011(d) Three MonthsEndedSeptember 29,2012(e) Three MonthsEndedOctober 1,2011(f) Three MonthsEndedDecember 29,2012(g) Three MonthsEndedDecember 31,2011(h) (In thousands, except per share amounts) Net sales $453,708 $390,604 $517,026 $500,810 $496,810 $472,898 $440,298 $391,119 Gross profit 54,232 46,269 63,188 57,645 60,531 58,278 52,119 47,957 Operating expenses: Selling, general and administrative 56,644 55,668 57,564 56,290 57,307 56,599 54,842 51,926 Gain on modification of lease agreement — — — — — (1,971) — — Gain from property insurance settlement — — (476) — (1,230) — (203) (Gain) loss from sale of properties (578) (7,222) 48 283 (9,151) — (204) (3,665)Restructuring and other charges — — — 207 — 1,139 — 36 Depreciation and amortization 2,260 2,938 2,187 2,624 2,106 2,559 2,012 2,441 Operating (loss) income (4,094) (5,115) 3,865 (1,759) 10,269 1,182 (4,531) (2,578)Non-operating expenses: Interest expense 6,782 8,986 7,325 7,730 7,294 6,963 6,756 6,831 Changes associated with ineffectiveinterest rate swap — (1,676) — — — — — — Other (income) expense (62) 15 49 134 (16) 333 22 19 (Benefit from) provision for income taxes (3,969) (4,916) (1,157) (3,556) 1,078 (2,265) (4,305) (2,873)Tax valuation allowance 4,174 4,802 1,354 3,714 (1,155) 2,359 4,366 3,697 Net (loss) income $(11,019)$(12,326)$(3,706)$(9,781)$3,068 $(6,208)$(11,370)$(10,252) 68Table of Contents (a)During the three months ended March 31, 2012, basic and diluted weighted average shares were 60,002,836. Total share-based awards of 4,519,590were excluded from our diluted earnings per share calculation because they were anti-dilutive. (b)During the three months ended April 2, 2011, basic and diluted weighted average shares were 30,843,732. Total share-based awards of 3,096,843 wereexcluded from our diluted earnings per share calculation because they were anti-dilutive. (c)During the three months ended June 30, 2012, basic and diluted weighted average shares were 60,097,558. Total share-based awards of 4,515,590were excluded from our diluted earnings per share calculation because they were anti-dilutive. (d)During the three months ended July 2, 2011, basic and diluted weighted average shares were 31,062,794. Total share-based awards of 3,079,540 wereexcluded from our diluted earnings per share calculation because they were anti-dilutive. (e)During the three months ended September 29, 2012, basic and diluted weighted average shares were 60,098,691. (f)During the three months ended October 1, 2011, basic and diluted weighted average shares were 51,182,748. Total share-based awards of 3,076,739were excluded from our diluted earnings per share calculation because they were anti-dilutive. (g)During the three months ended December 29, 2012, basic and diluted weighted average shares were 60,118,183, respectively. Total share-based awardsof 4,460,054 were excluded from our diluted earnings per share calculation because they were anti-dilutive. (h)During the three months ended December 31, 2011, basic and diluted weighted average shares were 59,659,984, respectively. Total share-based awardsof 3,266,740 were excluded from our diluted earnings per share calculation because they were anti-dilutive. 69Table of Contents 19. Supplemental Condensed Consolidating Financial Statements The condensed consolidating financial information as of December 29, 2012 and December 31, 2011 and for fiscal 2012, fiscal 2011, and fiscal 2010 isprovided due to restrictions in our revolving credit facility that limit distributions by BlueLinx Corporation, our operating company and our wholly-ownedsubsidiary, to us, which, in turn, may limit our ability to pay dividends to holders of our common stock (see Note 10, Revolving Credit Facility, for a moredetailed discussion of these restrictions and the terms of the facility). Also included in the supplemental condensed consolidated/combining financialstatements are fifty-six single member limited liability companies, which are wholly owned by us (the “LLC subsidiaries”). The LLC subsidiaries own certainwarehouse properties that are occupied by BlueLinx Corporation, each under the terms of a master lease agreement. The warehouse properties collateralize amortgage loan and are not available to satisfy the debts and other obligations of either us or BlueLinx Corporation. Certain changes have been made to the prioryear presentation to conform to the current year presentation. The condensed consolidating statement of operations for BlueLinx Holdings Inc. for the fiscal year ended December 29, 2012 follows (in thousands): BlueLinxHoldings BlueLinxCorporationand Subsidiaries LLCSubsidiaries Eliminations Consolidated Net sales $— $1,907,842 $28,330 $(28,330) $1,907,842 Cost of sales — 1,677,772 — — 1,677,772 Gross profit — 230,070 28,330 (28,330) 230,070 Operating expenses (income): Selling, general and administrative 3,940 250,098 (9,712) (28,330) 215,996 Depreciation and amortization — 5,040 3,525 — 8,565 Total operating expenses (income) 3,940 255,138 (6,187) (28,330) 224,561 Operating (loss) income (3,940) (25,068) 34,517 — 5,509 Non-operating expenses: Interest expense — 12,159 15,998 — 28,157 Other expense (income), net — 10 (17) — (7)(Loss) income before (benefit from) provision for income taxes (3,940) (37,237) 18,536 — (22,641)(Benefit from) provision for income taxes 386 — — 386 Equity in (loss) income of subsidiaries (18,701) — — 18,701 — Net (loss) income $(23,027) $(37,237) $18,536 $18,701 $(23,027) 70Table of Contents The condensed consolidating statement of operations for BlueLinx Holdings Inc. for the fiscal year ended December 31, 2011 follows (in thousands): BlueLinxHoldings BlueLinxCorporationand Subsidiaries LLCSubsidiaries Eliminations Consolidated Net sales $— $1,755,431 $29,665 $(29,665) $1,755,431 Cost of sales — 1,545,282 — — 1,545,282 Gross profit — 210,149 29,665 (29,665) 210,149 Operating expenses (income): Selling, general and administrative 3,728 244,398 (10,604) (29,665) 207,857 Depreciation and amortization — 6,790 3,772 — 10,562 Total operating expenses (income) 3,728 251,188 (6,832) (29,665) 218,419 Operating (loss) income (3,728) (41,039) 36,497 — (8,270)Non-operating expenses: Interest expense — 12,528 17,982 — 30,510 Changes associated with ineffective interest rate swap — (1,676) — — (1,676)Other expense (income), net — 516 (15) — 501 (Loss) income before (benefit from) provision for income taxes (3,728) (52,407) 18,530 — (37,605)(Benefit from) provision for income taxes 459 503 — — 962 Equity in (loss) income of subsidiaries (34,380) — — 34,380 — Net (loss) income $(38,567) $(52,910) $18,530 $34,380 $(38,567) The condensed consolidating statement of operations for BlueLinx Holdings Inc. for the fiscal year ended January 1, 2011 follows (in thousands): BlueLinxHoldings BlueLinxCorporationand Subsidiaries LLCSubsidiaries Eliminations Consolidated Net sales $— $1,804,418 $29,825 $(29,825) $1,804,418 Cost of sales — 1,593,745 — — 1,593,745 Gross profit — 210,673 29,825 (29,825) 210,673 Operating expenses (income): Selling, general and administrative 9,663 241,152 195 (29,825) 221,185 Depreciation and amortization — 9,524 3,841 — 13,365 Total operating expenses (income) 9,663 250,676 4,036 (29,825) 234,550 Operating (loss) income (9,663) (40,003) 25,789 — (23,877)Non-operating expenses: Interest expense — 14,780 19,008 — 33,788 Changes associated with ineffective interest rate swap — (4,603) — — (4,603)Write-off of debt issuance costs — 183 — — 183 Other expense, net — 576 11 — 587 (Loss) income before (benefit from) provision for income taxes (9,663) (50,939) 6,770 — (53,832)(Benefit from) provision for income taxes 107 (696) — — (589)Equity in (loss) income of subsidiaries (43,473) — — 43,473 — Net (loss) income $(53,243) $(50,243) $6,770 $43,473 $(53,243) 71Table of Contents The condensed consolidating balance sheet for BlueLinx Holdings Inc. as of December 29, 2012 follows (in thousands): BlueLinxHoldings Inc. BlueLinxCorporationandSubsidiaries LLCSubsidiaries Eliminations Consolidated Assets: Current assets: Cash $28 $5,160 $— $— $5,188 Receivables — 157,465 — — 157,465 Inventories — 230,059 — — 230,059 Other current assets 1,596 17,790 41 — 19,427 Intercompany receivable 73,981 28,814 — (102,795) — Total current assets 75,605 439,288 41 (102,795) 412,139 Property and equipment: Land and land improvements — 3,250 39,870 — 43,120 Buildings — 10,213 83,857 — 94,070 Machinery and equipment — 78,674 — — 78,674 Construction in progress — 1,173 — — 1,173 Property and equipment, at cost — 93,310 123,727 — 217,037 Accumulated depreciation — (71,583) (30,101) — (101,684)Property and equipment, net — 21,727 93,626 — 115,353 Investment in subsidiaries (67,053) — — 67,053 — Non-current deferred income tax assets, net — 445 — — 445 Other non-current assets — 10,646 6,153 — 16,799 Total assets $8,552 $472,106 $99,820 $(35,742) $544,736 Liabilities: Current liabilities: Accounts payable $203 $77,257 $390 $— 77,850 Bank overdrafts — 35,384 — — 35,384 Accrued compensation 127 6,043 — — 6,170 Current maturities of long-term debt — — 8,946 — 8,946 Deferred income tax liabilities, net — 449 — — 449 Other current liabilities — 9,831 1,106 — 10,937 Intercompany payable 28,814 73,981 — (102,795) — Total current liabilities 29,144 202,945 10,442 (102,795) 139,736 Non-current liabilities: Long-term debt — 171,412 197,034 — 368,446 Other non-current liabilities — 57,146 — — 57,146 Total liabilities 29,144 431,503 207,476 (102,795) 565,328 Stockholders’ (deficit) equity/Parent’s Investment (20,592) 40,603 (107,656) 67,053 (20,592)Total liabilities and (deficit) equity $8,552 $472,106 $99,820 $(35,742) $544,736 72Table of Contents The condensed consolidating balance sheet for BlueLinx Holdings Inc. as of December 31, 2011 follows (in thousands): BlueLinxHoldings Inc. BlueLinxCorporationandSubsidiaries LLCSubsidiaries Eliminations Consolidated Assets: Current assets: Cash $27 $4,871 $— $— $4,898 Receivables — 138,872 — — 138,872 Inventories — 185,577 — — 185,577 Other current assets 498 17,882 8,761 — 27,141 Intercompany receivable 67,041 18,482 — (85,523) — Total current assets 67,566 365,684 8,761 (85,523) 356,488 Property and equipment: Land and land improvements — 2,938 46,624 — 49,562 Buildings — 10,463 85,189 — 95,652 Machinery and equipment — 75,508 — — 75,508 Construction in progress — 741 — — 741 Property and equipment, at cost — 89,650 131,813 — 221,463 Accumulated depreciation — (70,426) (27,909) — (98,335)Property and equipment, net — 19,224 103,904 — 123,128 Investment in subsidiaries (40,549) — — 40,549 — Non-current deferred income tax assets, net — 358 — — 358 Other non-current assets — 14,747 9,194 — 23,941 Total assets $27,017 $400,013 $121,859 $(44,974) $503,915 Liabilities: Current liabilities: Accounts payable $161 $68,639 $1,428 $— 70,228 Bank overdrafts — 22,364 — — 22,364 Accrued compensation — 4,496 — — 4,496 Current maturities of long-term debt — — 9,046 — 9,046 Deferred income tax liabilities, net — 382 — — 382 Other current liabilities — 15,205 1,353 — 16,558 Intercompany payable 18,482 67,041 — (85,523) — Total current liabilities 18,643 178,127 11,827 (85,523) 123,074 Non-current liabilities: Long-term debt — 94,488 234,207 — 328,695 Other non-current liabilities — 43,772 — — 43,772 Total liabilities 18,643 316,387 246,034 (85,523) 495,541 Stockholders’ equity (deficit)/Parent’s Investment 8,374 83,626 (124,175) 40,549 8,374 Total liabilities and equity (deficit) $27,017 $400,013 $121,859 $(44,974) $503,915 73Table of Contents The condensed consolidating statement of cash flows for BlueLinx Holdings Inc. for the fiscal year ended December 29, 2012 follows (in thousands): BlueLinxHoldings Inc. BlueLinxCorporation LLCSubsidiaries Eliminations Consolidated Cash flows from operating activities: Net (loss)income $(23,027) $(37,237) $18,536 $18,701 $(23,027)Adjustments to reconcile net (loss) income to cash (used in)provided by operations: Depreciation and amortization — 5,040 3,525 — 8,565 Amortization of debt issue costs — 2,471 1,275 — 3,746 Gain from sale of properties — — (9,885) — (9,885)Gain from property insurance settlement — — (476) — (476)Vacant property charges, net — (30) — — (30)Payments on modification of lease agreement — (5,875) — — (5,875)Deferred income tax benefit — (20) — — (20)Share-based compensation 528 2,269 — — 2,797 Decrease in restricted cash related to the ineffective interestswap, insurance, and other — 695 — — 695 Equity (deficit) in earnings of subsidiaries 18,701 — — (18,701) — Changes in assets and liabilities: Receivables — (18,593) — — (18,593)Inventories — (44,482) — — (44,482)Accounts payable 42 8,619 389 — 9,050 Changes in other working capital (971) 1,751 942 1,722 Intercompany receivable (6,940) (10,332) — 17,272 — Intercompany payable 10,332 6,940 — (17,272) — Other — 3,066 (1,503) — 1,563 Net cash (used in) provided by operating activities (1,335) (85,718) 12,803 — (74,250)Cash flows from investing activities: Investment in subsidiaries 1,862 154 (2,016) — — Property, plant and equipment investments — (2,826) — (2,826)Proceeds from disposition of assets — 997 18,198 — 19,195 Net cash provided by (used in) investing activities 1,862 (1,675) 16,182 — 16,369 Cash flows from financing activities: Repurchase of shares to satisfy employee tax withholdings (526) — — — (526)Repayments on revolving credit facilities — (473,349) — — (473,349)Borrowings on revolving credit facilities — 550,270 — — 550,270 Principal payments on mortgage — — (37,272) — (37,272)Payments on capital lease obligations — (2,259) — — (2,259)Increase in bank overdrafts — 13,020 — — 13,020 Decrease in restricted cash related to the mortgage — — 9,970 — 9,970 Debt financing costs — — (1,683) — (1,683)Net cash provided by (used in) financing activities (526) 87,682 (28,985) — 58,171 Increase in cash 1 289 — — 290 Cash and cash equivalents balance, beginning of period 27 4,871 — — 4,898 Cash and cash equivalents balance, end of period $28 $5,160 $— $— $5,188 Supplemental cash flow information: Net income tax refunds (income taxes paid) during the period $— $37 $(545) $— $(508)Interest paid during the period $— $9,309 $14,979 $— $24,288 Noncash transactions: Capital leases $— $5,238 $— $— $5,238 74Table of ContentsThe condensed consolidating statement of cash flows for BlueLinx Holdings Inc. for the fiscal year ended December 31, 2011 follows (in thousands): BlueLinxHoldings Inc. BlueLinxCorporation LLCSubsidiaries Eliminations Consolidated Cash flows from operating activities: Net (loss)income $(38,567) $(52,910) $18,530 $34,380 $(38,567)Adjustments to reconcile net (loss) income to cash providedby (used in) operations: Depreciation and amortization — 6,790 3,772 — 10,562 Amortization of debt issue costs — 1,983 957 — 2,940 Gain from sale of properties — — (10,604) — (10,604)Gain from property insurance settlement — — (1,230) — (1,230)Changes associated with ineffective interest rate swap — (1,676) — — (1,676)Vacant property charges, net — (291) — — (291)Gain on modification of lease agreement — (1,971) — — (1,971)Deferred income tax benefit — (25) — — (25)Share-based compensation — 1,602 372 — 1,974 Decrease in restricted cash related to the ineffective interestswap, insurance, and other — 987 — — 987 Equity in earnings of subsidiaries 34,380 — — (34,380) — Changes in assets and liabilities: Receivables — (19,670) — — (19,670)Inventories — 2,673 — — 2,673 Accounts payable 102 5,871 — — 5,973 Changes in other working capital 167 530 172 (1,244) (375)Intercompany receivable (9,829) (9,727) — 19,556 — Intercompany payable 9,218 9,094 — (18,312) — Other — 1,244 (2,276) — (1,032)Net cash provided by (used in) operating activities (4,529) (55,496) 9,693 — (50,332)Cash flows from investing activities: Investment in subsidiaries (54,349) 55,209 (860) — — Property, plant and equipment investments — (3,203) (3,330) — (6,533)Proceeds from sale of assets — 504 17,851 — 18,355 Net cash (used in) provided by investing activities (54,349) 52,510 13,661 — 11,822 Cash flows from financing activities: Repayments on revolving credit facilities — (478,630) — — (478,630)Borrowings on revolving credit facilities — 475,918 — — 475,918 Principal payments on mortgage — — (42,416) — (42,416)Payments on capital lease obligations — (1,440) — — (1,440)Decrease in bank overdrafts — (725) — — (725)Decrease in restricted cash related to the mortgage — — 20,604 — 20,604 Debt financing costs — (1,179) (1,542) — (2,721)Proceeds from stock offering less expenses paid 58,521 — — — 58,521 Net cash provided by (used in) financing activities 58,521 (6,056) (23,354) — 29,111 Decrease in cash (357) (9,042) — — (9,399)Cash and cash equivalents balance, beginning of period 384 13,913 — — 14,297 Cash and cash equivalents balance, end of period $27 $4,871 $— $— $4,898 Supplemental cash flow information: Net income tax refunds (income taxes paid) during the period $— $231 $(253) $— $(22)Interest paid during the period $— $10,783 $17,315 $— $28,098 Noncash transactions: Capital leases $— $3,131 $— $— $3,131 75Table of Contents The condensed consolidating statement of cash flows for BlueLinx Holdings Inc. for the fiscal year ended January 1, 2011 follows (in thousands): BlueLinxHoldings Inc. BlueLinxCorporation LLCSubsidiaries Eliminations Consolidated Cash flows from operating activities: Net (loss)income $(53,243) $(50,243) $6,770 $43,473 $(53,243)Adjustments to reconcile net (loss) income to cash (used in)provided by operations: Depreciation and amortization — 9,854 3,511 — 13,365 Amortization of debt issue costs — 1,298 665 — 1,963 Payments from terminating the G-P Supply Agreement — 4,706 — — 4,706 Changes associated with ineffective interest rate swap — (4,603) — — (4,603)Write-off of debt issuance costs — 183 — — 183 Vacant property charges, net — 53 — — 53 Deferred income tax provision (benefit) 910 1,041 (2,551) — (600)Share-based compensation 1,856 2,122 — — 3,978 Decrease in restricted cash related to the ineffective interestswap, insurance, and other — 6,556 — — 6,556 Equity in earnings of subsidiaries 43,473 — — (43,473) — Changes in assets and liabilities: Receivables — 145 — — 145 Inventories — (15,065) — — (15,065)Accounts payable 21 (1,812) — — (1,791)Changes in other working capital 279 15,267 (94) — 15,452 Intercompany receivable 8,598 (3,453) — (5,145) — Intercompany payable 6,122 (6,356) (4,911) 5,145 — Other (47) (1,394) 481 — (960)Net cash provided by (used in) operating activities 7,969 (41,701) 3,871 — (29,861)Cash flows from investing activities: Investment in subsidiaries (7,034) — 7,034 — — Property, plant and equipment investments — (4,140) — — (4,140)Proceeds from disposition of assets — 711 — — 711 Net cash (used in) provided by investing activities (7,034) (3,429) 7,034 — (3,429)Cash flows from financing activities: Repurchase of common stock (583) — — — (583)Repayments on revolving credit facility — (466,219) — — (466,219)Borrowings on revolving credit facility — 507,419 — — 507,419 Debt financing costs — (6,521) — — (6,521)Decrease in bank overdrafts — (4,143) — — (4,143)Increase in restricted cash related to the mortgage — — (11,201) — (11,201)Payments on capital lease obligations — (629) — — (629)Other — 7 — — 7 Net cash (used in) provided by financing activities (583) 29,914 (11,201) — 18,130 Increase (decrease) in cash 352 (15,216) (296) — (15,160)Cash and cash equivalents balance, beginning of period 32 29,129 296 — 29,457 Cash and cash equivalents balance, end of period $384 $13,913 $— $— $14,297 Supplemental cash flow information: Net income tax refunds (income taxes paid) during the period $— $20,098 $(115) $— $19,983 Interest paid during the period $— $13,280 $18,395 $— $31,675 Noncash transactions: Capital leases $— $1,889 $— $— $1,889 76Table of Contents The condensed consolidating statement of stockholders’ (deficit) equity for BlueLinx Holdings Inc. for fiscal 2010, fiscal 2011 and fiscal 2012 follows(in thousands): BlueLinxHoldings Inc. BlueLinxCorporationand Subsidiaries LLCSubsidiaries Eliminations Consolidated Balance, January 2, 2010 $50,820 $142,363 $(154,118) $11,755 $50,820 Net income (loss) (53,243) (50,243) 6,770 43,473 (53,243)Foreign currency translation adjustment, net of tax 336 336 — (336) 336 Unrealized loss from pension plan, net of tax (616) (616) — 616 (616)Unrealized gain from cash flow hedge, net of tax 1,297 1,297 — (1,297) 1,297 Issuance of restricted stock 7 — — — 7 Repurchase of restricted stock (583) — — — (583)Compensation related to share-based grants 3,876 — — — 3,876 Reclassification of equity award to liability (903) — — — (903) Net transactions with the Parent — 1,136 7,034 (8,170) — Balance, January 1, 2011 $991 $94,273 $(140,314) $46,041 $991 Net income (loss) (38,567) (52,910) 18,530 34,380 (38,567)Foreign currency translation adjustment, net of tax (92) (92) — 92 (92)Unrealized loss from pension plan, net of tax (14,969) (14,969) — 14,969 (14,969)Unrealized gain from cash flow hedge, net of tax 519 519 — (519) 519 Issuance of restricted stock, net of forfeitures 7 — — — 7 Issuance of stock related to the rights offering, net ofexpenses 58,521 — — — 58,521 Compensation related to share-based grants 2,158 — — — 2,158 Impact of net settled shares for vested grants (194) — — — (194) Net transactions with the Parent — 56,805 (2,391) (54,414) — Balance, December 31, 2011 $8,374 $83,626 $(124,175) $40,549 $8,374 Net income (loss) (23,027) (37,237) 18,536 18,701 (23,027)Foreign currency translation adjustment, net of tax 103 103 — (103) 103 Unrealized loss from pension plan, net of tax (8,245) (8,245) — 8,245 (8,245)Issuance of restricted stock, net of forfeitures 19 19 — (19) 19 Compensation related to share-based grants 2,730 — — — 2,730 Impact of net settled shares for vested grants (526) — — — (526)Other (20) — — — (20) Net transactions with the Parent — 2,337 (2,017) (320) — Balance, December 29, 2012 $(20,592) $40,603 $(107,656) $67,053 $(20,592) 77Table of ContentsITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE. None. ITEM 9A. CONTROLS AND PROCEDURES. Conclusion Regarding the Effectiveness of Disclosure Controls and Procedures We maintain disclosure controls and procedures designed to ensure that information required to be disclosed in our reports pursuant to the SecuritiesExchange Act of 1934, as amended (the “Exchange Act”), is recorded, processed, summarized and reported within the time periods specified in the SEC’srules and forms, and that such information is accumulated and communicated to our management, including our chief executive officer and chief financialofficer, as appropriate, to allow timely decisions regarding required disclosure. Management necessarily applied its judgment in assessing the costs andbenefits of such controls and procedures that, by their nature, can provide only reasonable assurance regarding management’s control objectives. Our management performed an evaluation, as of the end of the period covered by this Annual Report on Form 10-K, under the supervision of our chiefexecutive officer and chief financial officer of the effectiveness of the design and operation of our disclosure controls and procedures (as defined in rule 13a-15(e) and 15d-15(e) of the Exchange Act). Based on that evaluation, our chief executive officer and chief financial officer have concluded that our disclosurecontrols and procedures are effective to ensure that information required to be disclosed by us in reports that we file or submit under the Exchange Act isrecorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms, and is accumulated and communicated to ourmanagement including our chief executive officer and chief financial officer, to allow timely decisions regarding required disclosure. Management’s Report on Internal Control over Financial Reporting Management’s Report on Internal Control Over Financial Reporting and the Report of Independent Registered Public Accounting Firm thereon are set out inItem 8 of this Annual Report on Form 10-K. Changes in Internal Control over Financial Reporting No change in our internal control over financial reporting occurred during the fiscal quarter ended December 29, 2012 that materially affected, or isreasonably likely to materially affect, our internal control over financial reporting. The certifications of our Chief Executive Officer and Chief Financial Officer required by Section 302 of the Sarbanes-Oxley Act of 2002 are filed asExhibits 31.1 and 31.2 to this Annual Report on Form 10-K. Additionally, as required by Section 303A.12 (a) of the NYSE Listed Company Manual, ourChief Executive Officer filed a certification with the NYSE on June 18, 2012 reporting that he was not aware of any violation by us of the NYSE’s CorporateGovernance listing standards. On November 6, 2012, our Chief Executive Officer filed an interim written affirmation with the NYSE reporting that theCompany was out of compliance with the NYSE’s Corporate governance listing standards due to only having two directors on the Company’s AuditCommittee (following the resignation of Charles H. McElrea), rather than the three directors required by Section 303A.07(a) of the NYSE Listed CompanyManual. On February 14, 2013, the Board affirmatively determined Mr. M. Richard Warner to be independent. Mr. Warner joined the Audit Committee as thethird director on the Company’s Audit Committee, bringing the Company back into compliance with Section 303A.07(a) of the NYSE Listed CompanyManual. ITEM 9B. OTHER INFORMATION. None. PART III ITEM 10. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE. 78Table of Contents The following table contains the name, age and position with our company of each of our executive officers and directors as of February 20, 2013. Theirrespective backgrounds are described in the text following the table. Name Age Position Howard S. Cohen66 Chairman of the Board of Directors (Director since September 2007,Chairman since March 2008)George R. Judd51 President, Chief Executive Officer and Director (since October2008)H. Douglas Goforth49 Senior Vice President, Chief Financial Officer and Treasurer (SinceFebruary 2008)Ned M. Bassil47 Chief Supply Chain Officer (since December 2011)Sara E. Epstein35 Vice President, General Counsel and Corporate Secretary (sinceFebruary 2013)Richard S. Grant66 Director (since 2005)Steven F. Mayer53 Director (since 2004)Alan H. Schumacher66 Director (since 2004)Ronald E. Kolka53 Director (since August 2012)M. Richard Warner61 Director (since 2008) Executive Officers George R. Judd has served as our Chief Executive Officer since October 2008 and as our President and Chief Operating Officer since May 2004. Mr.Judd has also served as a member of our board since October 2008. Previously, he worked for Georgia-Pacific Corporation in a variety of positions managingboth inside and outside sales, national accounts and most recently as Vice President of Sales and Eastern Operations since 2002. From 2000 until 2002, Mr.Judd worked as Vice President of the North and Midwest regions of the Distribution Division. He served as Vice President of the Southeast region from 1999to 2000. Mr. Judd serves on the board of directors of Snappy Air Distribution Products, Inc. and on the advisory board of DocuSign Inc. Mr. Judd formerlyserved on the board of the Building Products Institute in Washington, D.C., and he is past Chair of the National Lumber & Building Material DealersAssociation. He graduated from Western Connecticut State University in 1984 with a Bachelor’s degree in Marketing. H. Douglas Goforth has served as our Senior Vice President, Chief Financial Officer and Treasurer since February 2008. From November 2006 untilFebruary 2008, Mr. Goforth served as Vice President and Corporate Controller for Armor Holdings Inc. which was acquired by BAE Systems in July 2007.Previously he served as Corporate Controller for BlueLinx from May 2004 until October 2006, where he played a key role in our 2004 IPO. From 2002 until2004 he served as Controller for the Distribution Division of Georgia-Pacific Corporation. Mr. Goforth has 25 years of combined accounting, finance,treasury, acquisition and management experience with leading distribution and manufacturing companies including Mitsubishi Wireless Communications,Inc., Yamaha Motor Manufacturing, Inc. and Ingersoll-Rand. Mr. Goforth is a North Carolina State Board Certified Public Accountant and earned a Bachelorof Science in Accounting from Mars Hill College in North Carolina. Ned M. Bassil has served as our Senior Vice President, Chief Supply Chain Officer since December 2011. Prior to that, Mr. Bassil was a Senior Partnerat a Bahou Heritage, a boutique firm providing large industrial clients with customized advisory services, from 2006 to 2007 and from 2009 to 2011.Mr. Bassil held the role of Group CEO at Azadea Holdings from 2008 to 2009, overseeing operations at over 350 retail outlets in 12 countries in Europe, theMiddle East, & Africa, in the areas of Fashion, Food & Beverage, and Home Furnishings, in addition to Real Estate development activities. Mr. Bassil alsoheld a number of senior management roles such as VP Global Operations, Senior VP Operations, and General Manager at Black & Decker from 2004 to2005, and Philips Electronics from 1998 to 2004 in durable consumer goods, consumer electronics, and lighting. He also held various operating roles atAllied Signal (Honeywell) from 1993 to 1998 in the automotive industry, including Director of Operational Excellence at Allied Signal from 1996 to 1998,overseeing the Black Belt deployment within the Automotive Products Group. Mr. Bassil received his Masters of Business Administration in Finance from theWharton School at the University of Pennsylvania, a Masters in Engineering fromYoungstown State University, and a Bachelor of Science in ElectricalEngineering from Youngstown State University. Sara E. Epstein has served as our Vice President, General Counsel and Corporate Secretary since February 2013, and our Senior Counsel and CorporateSecretary since March 2010. Prior to joining us, Ms. Epstein was an attorney with Jones Day. Ms. Epstein received a Juris Doctor degree from TulaneUniversity and a Bachelor of Arts degree from Tufts University. 79Table of Contents Directors Howard S. Cohen has served as Chairman of our Board since March 2008 and as a member of our Board since September 2007. He is a Senior Advisorto Cerberus. Mr. Cohen served as our Interim Chief Executive Officer from March 2008 through October 2008 and as our Executive Chairman from March2008 through March 2009. Mr. Cohen possesses 33 years of leadership experience, including service as President and CEO of four publicly-traded companies:GTECH Corporation, from 2001 to 2002; Bell & Howell, from 2000 to 2001; Sidus Systems Inc., from 1998 to 1999; and Peak Technologies Group, Inc.,from 1996 to 1998. Mr. Cohen has also managed independent divisions of three Fortune 500 companies. Mr. Cohen serves as the Chairman of the Board ofDirectors of Albertsons LLC and Equable Ascent Financial, LLC, both of which are Cerberus portfolio companies. Mr. Cohen previously served on the Boardof SSA Global Technologies, Inc. from 2005 until 2007. Mr. Cohen’s past experience as our interim Chief Executive Officer and Executive Chairman, financial expertise, management advisory expertise,experience as a director and officer of public companies, relationship with our largest stockholder and his performance as one of our Board members makehim a valuable member of our Board. George R. Judd has served as a member of our Board since October 2008. As an executive officer of our Company, Mr. Judd’s background is describedabove. Mr. Judd’s experience as our Chief Executive Officer, years of experience with Georgia-Pacific Corporation and BlueLinx in a variety of leadershiproles, institutional knowledge, management skills, industry knowledge and his performance as one of our Board members make him a valuable member ofour Board. Richard S. Grant has served as a member of our Board since December 2005. Previously, Mr. Grant served as a director of The BOC Group plc, untilhis retirement in 2002. Over 30 years of service with The BOC Group, Mr. Grant held various management positions, most recently as Chief Executive ofBOC Process Gas Solutions, Chairman of CNC sa, a Mexican joint venture company, and he had group responsibility for Technology, Latin America andContinental Europe. Previous responsibilities included service as the BOC Regional Director for South Pacific/South Asia, Chairman of Elgas Ltd, anAustralian LPG distributor, and before that as President of Ohmeda Medical Devices and Chief Executive Officer of Glasrock Home Healthcare Inc. Mr. Grantcurrently serves on the Board of Compass Minerals International Inc, where he is lead director, a member of the audit committee and the compensationcommittee, and was previously a member of the nominating corporate governance committee, of which he was Chairman. Mr. Grant previously served as adirector of Distributed Energy Systems Corporation from 2006 to 2007. Mr. Grant’s experience managing distribution businesses, leadership experience, international board experience, transactional experience, financialexpertise, experience as an officer and director of public companies, independence and his performance as one of our Board members make him a valuablemember of our Board. Steven F. Mayer has served as a member of our Board since May 2004. He has been Senior Managing Director or Managing Director of CerberusCalifornia, LLC and predecessor entities since November 2002 and also serves as Co-Head of Private Equity at Cerberus. Prior to joining Cerberus in 2002and since 2001, Mr. Mayer was an Executive Managing Director of Gores Technology Group. Prior to joining Gores, from 1996 to 2001, Mr. Mayer was aManaging Director of Libra Capital Partners, L.P. From 1994 until 1996, Mr. Mayer was a Managing Director of Aries Capital Group, LLC, a private equityinvestment firm that he co-founded. From 1992 until 1994, Mr. Mayer was a principal with Apollo Advisors, L.P. and Lion Advisors, L.P., affiliated privateinvestment firms. Prior to that time, Mr. Mayer was an attorney with Sullivan & Cromwell. Mr. Mayer is a member of the boards of directors of Grifols,S.A., YP Holdings, LLC, TransCentra, Inc., Spyglass Entertainment Holdings, LLC and Innkeepers USA, LLC. Mr. Mayer received his A.B., cum laude,from Princeton University and his juris doctor degree, magna cum laude, from Harvard Law School. Mr. Mayer’s financial expertise, management advisory expertise, experience as a director of public companies, relationship with our largest stockholderand his performance as one of our Board members make him a valuable member of our Board. Alan H. Schumacher has served as a member of our Board since May 2004. He is a director of Noranda Aluminum Holding Corporation, NorthAmerican Bus Industries, Inc., School Bus Holdings Inc. and Quality Distribution Inc. He is also a member of the board of managers of Quality DistributionLLC. Mr. Schumacher was a director of Anchor Glass Container Inc. from 2003 to 2006, and of Equable Ascent Financial, LLC from December 2009through February 27, 2012. Mr. Schumacher was a member of the Federal Accounting Standards Advisory Board from 2002 through June, 2012.Mr. Schumacher has 23 years of experience working in various positions at American National Can Corporation and American National Can Group, where,from 1997 until his retirement in 2000, he served as Executive Vice President and Chief Financial Officer and, from 1988 through 1996, he served as VicePresident, Controller and Chief Accounting Officer. 80Table of Contents Mr. Schumacher’s financial expertise (including his qualification as an audit committee financial expert), experience in the oversight of financial reportingand internal controls, experience as an officer and director of public companies, independence and his performance as one of our Board members make him avaluable member of our Board. Ronald E. Kolka has served as a member of our Board since August 16, 2012. Mr. Kolka has been a Senior Operating Executive at Cerberus Operationsand Advisory Company, LLC (“COAC”) since January 5, 2012. Prior to his tenure with COAC, Mr. Kolka was Executive Vice President and ChiefFinancial Officer of Chrysler LLC beginning in 2007. Mr. Kolka joined Chrysler Corporation in 1986. Mr. Kolka’s financial and management expertise, his relationship with our largest stockholder and his performance as one of our Board members makehim a valuable member of our Board. M. Richard Warner has served as a member of our Board since March 2008. Mr. Warner served as a consultant for Cerberus Capital Management, L.P.,or Cerberus, from May 2007 through June 2011. Prior to his work with Cerberus, Mr. Warner was employed for more than 20 years in a variety of capacitiesat Temple-Inland Inc., most recently as a Senior Advisor during 2006, President from 2003 to 2005, Vice President & Chief Administrative Officer from1999 to 2003 and Vice President & General Counsel from 1994 to 2002. Prior to joining Temple-Inland, Mr. Warner was a commercial lawyer in privatepractice. Mr. Warner currently serves on the boards of Balcones Resources Inc. He was a director of Equable Ascent Financial, LLC, a Cerberus portfoliocompany from 2007 to February 27, 2012. Mr. Warner received his BBA degree, magna cum laude, from Baylor University and his Juris Doctor degree fromBaylor University Law School. Mr. Warner’s financial expertise, management advisory expertise, experience as a director and officer of public companies, industry knowledge andexperience, relationship with our largest stockholder and his performance as one of our Board members make him a valuable member of our Board. Section 16(a) Beneficial Ownership Reporting Compliance Section 16(a) of the Exchange Act requires our directors and officers, and beneficial owners of more than 10% of our equity securities, to file initialreports of ownership and reports of changes in ownership with the SEC. Based solely on our review of the copies of such reports received by us with respect totransactions during 2012, or written representations from certain reporting persons, we believe that our directors, officers and persons who own more than10% of our equity securities have complied with all applicable filing requirements for 2012. Corporate Governance Guidelines and Code of Ethics Our corporate governance guidelines, as in effect from time to time, may be found on our website, www.bluelinxco.com. Our Board intends to review itscorporate governance principles, committee charters and other aspects of governance as often as necessary to remain current in all aspects of corporategovernance for similarly situated companies. Our Board has adopted a policy to self-evaluate its performance on an annual basis. Our code of conduct and ethics, applicable to all employees and officers as well as members of our Board, as in effect from time to time, may be foundon our website, www.bluelinxco.com. Any amendment to or waiver of our code of conduct and ethics for any Board member, our Chief Executive Officer, ourChief Financial Officer as well as any other executive officer will be disclosed on our website, www.bluelinxco.com. Additionally, our corporate governanceguidelines and code of conduct and ethics are available in print to any stockholder who requests them by writing to BlueLinx Holdings Inc., attn: CorporateSecretary, 4300 Wildwood Parkway, Atlanta, Georgia 30339. Our code of conduct and ethics provides a procedure by which employees and others may directly or anonymously, through a secure toll-free phonenumber, inform our management and/or the Audit Committee of any alleged violation of our code of conduct and ethics, including any allegations ofaccounting fraud. Reporting employees are protected from retaliation and any other form of adverse action. 81Table of Contents Communications with the Board of Directors Stockholders and other interested parties who wish to send communications, including recommendations for director nominees, to our Board or anyindividual director may do so by writing to the Board of Directors, in care of our secretary, at our principal executive offices, BlueLinx Holdings Inc., attn:Corporate Secretary, 4300 Wildwood Parkway, Atlanta, Georgia 30339. Your letter should indicate whether you are a stockholder. Depending on the subjectmatter, our Corporate Secretary will, as appropriate: ●forward the communication to the director to whom it is addressed or, in the case of communications addressed to the Board of Directors generally, tothe chairman; ●attempt to handle the inquiry directly where it is a request for information about us; or ●not forward the communication if it is primarily commercial in nature or if it relates to an improper topic. Communications from interested parties that are complaints or concerns relating to financial and accounting methods, internal accounting controls orauditing matters should be sent to the chairman of the Audit Committee, following the procedures set forth above. Director nominations will be reviewed forcompliance with the requirements identified under “Submission of Stockholder Proposals” in the proxy statement to be filed in connection with our 2013annual meeting of stockholders and if they meet such requirements, will be promptly forwarded to the director or directors identified in thecommunication. There have been no material changes to the procedures pursuant to which stockholders may recommend nominees for directors since our2012 annual meeting of stockholders. All communications will be summarized for our Board on a periodic basis and each letter will be made available to any director upon request. Audit Committee Our Board established a separately-designated standing Audit Committee in accordance with Section 3(a)(58)(A) of the Exchange Act. The purpose of theAudit Committee is to assist our Board in fulfilling its responsibilities to oversee our financial reporting process, including monitoring the integrity of ourfinancial statements and the independence and performance of our internal and external auditors. The Audit Committee is directly responsible for theappointment, compensation, retention and oversight of our independent registered public accounting firm. The Audit Committee met eight times in 2012. The Audit Committee currently consists of Messrs. Schumacher, Grant and Warner. Mr. Charles H.McElrea resigned from the Board of Directors and the Audit Committee effective October 30, 2012. As discussed above, our Board has affirmativelydetermined that Messrs. Schumacher, Grant and Warner are each “independent,” as such term is defined under the rules of the SEC and the listing standardsof the NYSE applicable to audit committee membership, and each meets the NYSE’s financial literacy requirements. Mr. McElrea also was deemed to beindependent during his time on the Audit Committee. Our Board has determined that Mr. Schumacher is an “audit committee financial expert,” as such term isdefined under the applicable rules of the SEC. On November 6, 2012, our Chief Executive officer filed an interim written affirmation with the NYSEreporting that the Company was out of compliance with the NYSE’s Corporate governance listing standards due to only having two directors on theCompany’s Audit Committee following Mr. McElrea’s resignation, rather than the three directors required by Section 303A.07(a) of the NYSE ListedCompany Manual. On February 14, 2013, the Board affirmatively determined Mr. M. Richard Warner to be independent. Mr. Warner joined the AuditCommittee as the third director on the Company’s Audit Committee, bringing the Company back into compliance with Section 303A.07(a) of the NYSE ListedCompany Manual. The Audit Committee operates pursuant to a written charter, a copy of which can be found on our website at www.bluelinxco.com. Additionally, the auditcommittee charter is available in print to any stockholder who requests it by writing to BlueLinx Holdings Inc., attn: Corporate Secretary, 4300 WildwoodParkway, Atlanta, Georgia 30339. The Audit Committee has adopted a procedure to receive allegations on any fraudulent accounting issues through a toll-free telephone number as set out inour code of conduct and ethics. See “Corporate Governance Guidelines and Code of Ethics” above. ITEM 11. EXECUTIVE COMPENSATION. COMPENSATION DISCUSSION & ANALYSIS The Compensation Committee of our Board of Directors, referred to in this discussion as the Committee, is responsible for reviewing, establishing andapproving the compensation of our named executive officers. Compensation paid to our Chief Executive Officer, Chief Financial Officer and the other namedexecutive officers identified in the Summary Compensation Table is set forth under “Compensation of Executive Officers” below. The following discussionand analysis focuses on compensation to our named executive officers for 2012. 82Table of Contents The Committee regularly consults with management regarding employee compensation matters. The Chief Executive Officer’s compensation wasprimarily determined, and the material terms of his compensation arrangement are reflected in, his second amended and restated employment agreement enteredinto on January 22, 2013. The terms of the second amended and restated employment agreement are substantially similar to the terms of the employmentagreement we entered into with Mr. Judd in 2008, although it does provide for a slightly higher base salary. In promoting Mr. Judd to serve as our ChiefExecutive Officer in 2008, we established the terms of his employment agreement based on a review of the compensation he was receiving in his capacity asour President and Chief Operating Officer, the compensation necessary to hire a qualified chief executive officer from outside of the Company, as well as ourreview of the market data for chief executive officer compensation at comparator companies which was provided to the Committee by its outside compensationconsultant, Hewitt Associates, in its 2008 compensation benchmarking survey. For further information regarding the terms of the Chief Executive Officer’semployment, see “Amended and Restated Employment Agreement with Chief Executive Officer” below. Our Chief Executive Officer makes compensationrecommendations to the Committee for the other named executive officers. The Committee also considers market factors in making decisions about ourcompensation program. In this regard, in 2005, the Committee retained Hewitt Associates, now Meridian, to advise it on executive compensation matters and toprovide compensation recommendations as to our executive officers. The Committee and the Company periodically discuss compensation issues and solicitcompensation advice and data from Meridian. At the request of the Committee, Meridian provided an updated compensation benchmarking study to theCompany in February 2013. The following discussion and analysis, which was reviewed and approved by the Committee, analyzes the objectives and resultsfor 2012 of our named executive officer compensation policies and procedures. Compensation Policies and Objectives Our primary goal is to establish a compensation program that serves the long-term interests of the Company and our stockholders by aligningmanagement’s interests with that of our stockholders through equity ownership and by promoting the attainment of certain individual and corporate goals. Inaddition, our compensation program is designed to attract and retain top quality executives with the qualifications necessary for the long-term financial successof the Company. Our executive compensation program is based on the following principles: ●Compensation decisions are driven by a pay-for-performance philosophy, which takes into account performance by both the Company and theindividual; ●Performance is determined with reference to pre-established goals, both with respect to the Company and the individual, which we believe enhancesthe individual executive’s performance; ●Where possible, a significant component of total direct compensation should consist of variable compensation; ●Total compensation opportunity should be comparable to the median ranges in the marketplace within which we compete; and ●Increased compensation can be earned through an individual’s increased contribution to the Company. Compensation programs in which our named executive officers participate are designed to be competitive with the compensation programs of companieswith which we compete for executive talent in order to enhance our ability to attract and retain key executive leadership. In this regard, the Committee directedthe Company to engage Hewitt Associates to perform a benchmark study of the Company’s compensation structure in 2008. In evaluating our compensationprogram, the Committee considered the level of compensation paid to executive officers in comparable executive positions within a comparator group consistingof eighteen distribution companies and two building products companies selected by BlueLinx with annual revenues between $645 million and $10.8 billion.The companies within the group were selected based on size, industry focus and organizational status and we believe as a group they represent the appropriatecomparable labor market for executive talent. This group comprised the following companies: Amcon Distributing Company; Andersons Inc.; AppliedIndustrial Technologies Inc.; Beacon Roofing Supply Inc.; Building Materials Holding Corporation; Builders FirstSource Inc.; Fastenal Company; GATXCorp.; Genuine Parts Company; Huttig Building Products Inc.; Interline Brands Inc.; MSC Industrial Direct; Nash Finch Co.; RSC Holdings Inc.; RushEnterprises Inc.; United Rentals Inc.; Universal Forest Products; Watsco Inc.; Wesco International Inc.; and WW Grainger Inc. 83Table of Contents Hewitt’s comprehensive benchmarking study focused on a number of elements to compare the Company to companies within these comparator groups,including base salaries, target bonuses and actual bonuses paid, actual annual equity awards, total cash compensation, benefits and total compensation. TheCompany and the Committee reviewed information from these comparator companies and used the data as a reference point to assist them in establishing thecompensation program for the Company, setting our executive officers’ compensation and benefits to be competitive with those of executive officers in similarpositions at these comparator companies and to achieve a balance of incentives to help achieve our performance objectives. Although the Committee does not tieexecutive compensation to a single reference benchmark or target within the comparator group, the Committee generally considers the 50th and 75th percentilesof companies within the comparator group. The benchmarking study is used as a comparative tool in the Committee’s evaluation of the Company’s executivecompensation in relation to companies believed to represent the appropriate comparable labor market for executive talent. The Committee periodically consults with Meridian on compensation issues and may periodically engage consultants in the future to advise on theongoing competitiveness of our compensation programs as warranted. At the request of the Committee, Meridian provided an updated compensationbenchmarking study to the Company in February 2013. The Company plans to review the updated compensation benchmarking study and utilize this studyas we make future compensation decisions. In addition, the Committee periodically reviews and revises salary ranges and total compensation programs todevelop compensation ranges that it believes will position us within the same range as market salaries for similar positions in our industry based on marketinformation obtained from consultation with, Meridian, informal market surveys, various trade group publications and other publicly available information. At the 2012 Annual Meeting, our stockholders expressed their continued support of our executive compensation programs by approving the non-bindingadvisory vote on our executive compensation. More than 99% of votes cast supported our executive compensation policies and practices. During 2012, wereviewed our executive compensation programs in conjunction with business results and stockholder support of our executive compensation program.Following that review, we continue to believe that our executive compensation programs are designed to support the company and business strategies in concertwith our compensation philosophy described above. Elements of Compensation Compensation for our named executive officers consists of four general components: ●Base salary; ●Annual performance-based cash awards; ●Long-term equity incentive compensation; and ●Other perquisite and benefit programs. The appropriate mix and amount of compensation for each named executive officer varies based on the level of the executive’s responsibilities, asdetermined by the Committee in consultation with our Chief Executive Officer. The compensation structure for each of our named executive officers is largelyestablished by his employment agreement. The Committee may increase any component of compensation provided by an employment agreement to any of ournamed executive officers. There is no established policy or formula for allocating any individual’s total compensation between cash and non-cash, or betweenshort-term and long-term incentives. This approach is designed to provide the Company with flexibility to respond to marketplace and individual factors inattracting and retaining executive talent and encouraging performance. The Committee typically reviews and adjusts base salaries and awards of cash bonuses and equity-based compensation on an annual basis. Our ChiefExecutive Officer presents recommendations and proposals on compensation, which are developed in consultation with our Chief Administrative Officer andother Company representatives, to the Committee, including recommended base salaries, recommended structure, target levels and payout levels for the annualcash bonus program under the Company’s short term incentive plan (“STIP”), and recommended equity awards to executive officers, and management’srationale for its recommendations. The Committee considers these recommendations before determining compensation. 84Table of Contents Base Salary Base salaries represent a fixed portion of named executive officer compensation and vary by job responsibility. We provide base salary because it isstandard in the marketplace and provides a stable part of compensation to encourage retention. Named executive officer salaries generally are reviewed andapproved annually by the Committee. Additionally, periodic salary adjustments are considered upon a promotion, change in job responsibility or whenotherwise necessary for equitable reasons. The Chief Executive Officer’s base salary was initially established in his employment agreement, and the Committeeconsults with the Chief Executive Officer regarding the salaries of the other named executive officers. The Committee then considers such matters andapproves base salary as to the named executive officers. The Committee primarily considers the recommendations of the Chief Executive Officer, market data,a general review of the executive’s compensation (individually and relative to the other executives), and the individual performance of the executive. In May 2012, the Compensation Committee increased Mr. Judd’s salary and Mr. Goforth’s salary. The Compensation Committee had discussed atmultiple meetings that Mr. Judd and Mr. Goforth had not received a recent salary increase. In light of the substantial contributions of Messrs. Judd andGoforth over the past several years, in guiding the Company through one of the most severe downturns in the homebuilding industry while still improving theCompany’s liquidity position, and the Compensation Committee’s determination that Messrs. Judd and Goforth were compensated below market for theirpositions and contributions to the Company, the Compensation Committee decided a salary increase was both appropriate and warranted for both Messrs.Judd and Goforth. Annual Bonuses We utilize cash bonuses as an incentive to promote achievement of individual and Company performance goals. This component of compensation placesmore emphasis on our annual financial performance and the potential rewards associated with future performance of the Company and the individualexecutive. Annual bonuses are determined based on agreements with the individual executive as well as pursuant to the Company’s STIP. Cash incentives aredesigned to: ●Support our strategic business objectives; ●Promote the attainment of specific financial goals; ●Reward achievement of specific performance objectives; and ●Encourage teamwork. Under the STIP, an annual bonus pool is established and funded based solely on performance as measured against established business and/or financialgoals at different levels of the Company’s operating structure. The Committee establishes the bonus pool based on Company performance. In general, thebonus pool is allocated to each participant based on the participant’s “target bonus percentage” (a percentage of such participant’s current base salary) and theextent to which the Company and/or such participant’s operating group(s) meets the established business and/or financial goals. Each of the named executiveofficers is a participant in the STIP, and each of their annual bonuses are subject to adjustment by the Committee, in its discretion, based on the executive’sindividual performance and contribution to the Company during the year. The threshold, target and maximum bonus percentages for 2012 for each of thenamed executive officers as a percentage of each executive’s base salary were as follows: Threshold Target Maximum George R. Judd 50% 100% 200%H. Douglas Goforth 32.5% 65% 130%Dean A. Adelman(1) 25% 50% 100%Ned M. Bassil 32.5% 65% 130% (1) Mr. Adelman resigned from the Company effective February 1, 2013. We are presenting his compensation package for 2012 as he was a namedexecutive officer as of the end of the fiscal year ended December 29, 2012. Generally, the Committee sets the target levels for financial performance metrics for the STIP in alignment with the Company’s strategic plan. In makingthe annual determination of the threshold, target and maximum levels, the Committee may consider specific circumstances facing the Company during theyear. For 2012, 100% of a named executive officer’s potential STIP award was based on corporate earnings before interest, tax, depreciation and amortization(“EBITDA”) targets, as adjusted for non-cash items and other items that are allowed at the discretion of the Committee. This objective is measured separatelyagainst a threshold, target and maximum goal. For 2012, these EBITDA goals were as follows: Threshold ($) Target ($) Maximum ($) (In millions) EBITDA 3.5 10.0 30 85Table of Contents For purposes of STIP calculations, during fiscal 2012 the Company achieved EBITDA of $14.1 million, which includes $9.9 million in gains from thesale of real estate. Based on our financial performance, the named executive officers earned bonuses for fiscal 2012 based on achieved EBITDA which waspaid in the form of restricted stock granted in January of 2013. The officers received restricted stock in lieu of cash to conserve capital for future workingcapital requirements. Officer BaseSalary($)(2) TargetBonus % TotalTargetPayout($) Portion ofTargetPayoutRelated toEBITDAGoal (100%)($) ActualPayoutRelated toEBITDAGoal (0%)($)(1) ActualTotalPayout($) George R. Judd 690,000 100 690,000 690,000 345,000 345,000 H. Douglas Goforth 425,000 65 276,250 276,250 138,125 138,125 Dean A. Adelman 315,000 50 157,500 157,500 78,750 78,750 Ned M. Bassil 400,000 65 260,000 260,000 40,000 40,000 (1)Restricted shares granted in lieu of a cash bonus were based on a total economic value, shown in the above table, of $601,875 ($345,000 for Mr. Judd,$138,125 for Mr. Goforth, $78,750 for Mr. Adelman and $40,000 for Mr. Bassil), which equates to total shares of 182,940 (104,863 shares for Mr.Judd, 41,983 shares for Mr. Goforth, 23,936 shares for Mr. Adelman and 12,158 shares for Mr. Bassil) with a total fair value on the date of grant of$603,702 ($346,048 for Mr. Judd, $138,544 for Mr. Goforth, $78,989 for Mr. Adelman and $40,121 for Mr. Bassil). These restricted shares vest oneyear from the date of grant. As indicated above, Mr. Adelman resigned from the Company effective February 1, 2013. We are presenting hiscompensation package for 2012 as he was a named executive officer as of the end of the fiscal year ended December 29, 2012. He forfeited this restrictedstock bonus as of the date of his resignation. (2)The STIP targets for each named executive officer are based on the each respective officer’s final base salary for fiscal 2012. For 2013, the Committee established the STIP financial performance objectives for Messrs. Judd and Goforth as based on EBITDA and revenue growth,and for Mr. Bassil as based on EBITDA, gross margin performance and inventory performance. We believe it will be a challenge to achieve the target financialgoal in 2013 for funding of the STIP at its target funding level. As demonstrated in connection with the 2012 STIP, the maximum financial goals were designedto be difficult to achieve, and we believe they will be. Long Term Equity Incentive Plan The purpose of our Long Term Equity Incentive Plans, or LTIP, is to provide an incentive to our employees to work towards the achievement of our longterm performance goals. A further purpose of the LTIP is to provide a means through which we may better attract able individuals to become employees of theCompany by providing these individuals with stock ownership. We also consider the program a key retention tool. For all of these reasons, we believe thiscomponent of compensation further advances and aligns the interests of the Company and its stockholders. LTIP grants are made annually. On May 29,2007, the Compensation Committee resolved to set the date on which annual LTIP grants would be made to executive officers and certain members ofmanagement as the second Tuesday of each fiscal year. The Committee has the discretion to make additional LTIP grants at any time during the year. Suchgrants generally will be in connection with new hires or promotions within the Company. In making decisions regarding long-term equity incentive awards for named executive officers, the Committee reviews the comparable equity award datafor similar positions in our industry, market data and data from our compensation consultant, and also considers other relevant factors. On January 10, 2012, the Committee awarded shares of restricted stock to certain of the Company’s named executive officers. Messrs. Judd, Goforth andAdelman received 606,612, 379,133 and 318,471 restricted shares, respectively. The value of these awards was based on the market price of our commonstock at the date of the grant. The Committee considered the total dollar value of each named executive officer’s award when approving each grant. 86Table of Contents The Compensation Committee recognized that many employees have made significant contributions to the Company over the past several years, but havenot received recognition for their effort through additional compensation. In an effort to provide recognition of these employees’ contributions and as a part ofthe Company’s retention strategy, the Compensation Committee decided to award performance shares to these employees, including the named executiveofficers, in January 2013. The performance shares vest over three years based on the Company’s achievement of EBITDA targets, providing additionalincentive to the employees to achieve such targets. Further information on equity ownership can be found below in “Executive Compensation.” Defined Contribution Plan The Company historically provides retirement benefits to the named executive officers, including matching contributions, under the terms of its tax-qualified 401(k) defined contribution plan. In 2009, the Company suspended its matching contributions to the 401(k) plan for all employees until businessconditions improve. This suspension continued in effect for fiscal 2011 and continued for all or part of fiscal 2012 for the named executive officers. Thissuspension is expected to continue for fiscal 2013 for the named executive officers. The named executive officers participate in the plan on substantially thesame terms as our other participating employees. We believe that these benefits are comparable to those provided by comparable companies. The Companydoes not maintain any defined benefit or supplemental retirement plans for its executive officers. Perquisites and Other Personal Benefits The Company provides the named executive officers with perquisites and other personal benefits that the Company believes are reasonable, competitive inthe market and consistent with its overall compensation program to better enable the Company to attract and retain superior employees for key positions. Thenamed executive officers generally are provided a car allowance, payment of certain club dues, life insurance and reimbursement for relocation expenses, ifapplicable. The Committee periodically reviews the levels of perquisites and other personal benefits provided to named executive officers. Costs of the perquisites and personal benefits described above for the named executive officers for 2012 that meet the threshold established by SECregulations are included in the Summary Compensation Table in the “All Other Compensation” column. See “Executive Compensation.” Employment Agreements We use employment agreements to attract and/or retain executive officers to BlueLinx. We primarily serve the housing and remodeling industries which arehistorically cyclical industries. Employment agreements enhance our ability to attract and retain top executive talent by providing some degree of certainty inlight of these major cycles. The Committee, with assistance from our human resources department and legal counsel both inside and outside of the Company,establish and negotiate the terms of the employment agreements. The Committee believes multi-year employment agreements are necessary to secure executivetalent for the long-term benefit of the Company and our stockholders. The Committee further believes that not utilizing employment agreements would put us ata competitive disadvantage to our peers in recruiting executives. Our employment agreements also include confidentiality, non-competition and non-solicitationprovisions, all for the benefit of the Company. Consistent with our compensation philosophy, the employment agreements provide for a significant componentof each executive’s annual compensation to be variable, as cash bonuses under our STIP are awarded based on Company performance against pre-establishedfinancial or operational goals. For example, no cash bonuses were paid to our named executive officers based on our fiscal 2011 financial performance. Basedon improvements in our business during fiscal 2012, cash bonuses became payable to our named executive officers in fiscal 2013. However, these cashbonuses were paid in the form of restricted stock grants. Additionally, the value of annual equity compensation is determined by our common stock price soour executives’ interests are aligned with those of our stockholders in this regard. Second Amended and Restated Employment Agreement with Chief Executive Officer On January 22, 2013, we entered into a Second Amended and Restated Employment Agreement with George R. Judd, our Chief Executive Officer. TheSecond Amended and Restated Employment Agreement expires on January 22, 2015, except that it will be renewed automatically for an additional one-yearperiod unless ninety days prior written notice is given by either party in advance of the expiration date of any such extended term. The Second Amended andRestated Employment Agreement provides that Mr. Judd will receive a base salary at the rate of $690,000 per year, subject to increase at the discretion of theCommittee. Mr. Judd shall also be eligible to receive an annual bonus pursuant to the terms of our annual bonus plan, with the annual bonus potential to be atarget of 100% of his base salary up to a maximum of 200% of base salary, based upon satisfaction of performance goals and bonus criteria to be defined andapproved by the Compensation Committee in advance for each fiscal year in accordance with the terms of the applicable bonus plan. In addition, the SecondAmended and Restated Employment Agreement provides that Mr. Judd is eligible to participate in all benefit programs for which senior executives are generallyeligible. The Committee reviewed the Hewitt Associates benchmark study and considered the level of compensation paid to chief executive officers within thecomparator group of companies as a factor in establishing his compensation. 87Table of Contents Under his Second Amended and Restated Employment Agreement, the Company may terminate Mr. Judd’s employment for cause or without cause. IfMr. Judd’s employment is terminated without cause or he resigns for good reason, the Second Amended and Restated Employment Agreement providesMr. Judd with, among other things, payment equal to one time his annual base salary in effect immediately prior to the date of termination, plus one time thecash bonus amount equal to the target bonus amount Mr. Judd was eligible to receive for the fiscal year prior to the year of the termination of his employment.Such sum is payable in twelve equal monthly installments commencing on the earlier to occur of the first business day of the seventh month after the date oftermination or Mr. Judd’s death. The Second Amended and Restated Employment Agreement also contains confidentiality provisions, as well as a covenant notto compete during the employment term and continuing for a period of one year following his date of termination. The Second Amended and RestatedEmployment Agreement supercedes and replaces Mr. Judd’s Amended and Restated Employment Agreement with the Company dated January 21, 2011. Second Amended and Restated Employment Agreement with Chief Financial Officer On January 22, 2013, we entered into a Second Amended and Restated Employment Agreement with H. Douglas Goforth, our Senior Vice President, ChiefFinancial Officer and Treasurer. The Second Amended and Restated Employment Agreement expires on January 23, 2015, except that it will be renewedautomatically for an additional one-year period unless ninety days prior written notice is given by either party in advance of the expiration date of any suchextended term. The Second Amended and Restated Employment Agreement provides that Mr. Goforth’s annual base salary shall be paid at the rate of $425,000per year, subject to increase at the discretion of the Committee. Mr. Goforth shall also be eligible to receive an annual bonus pursuant to the terms of theCompany’s annual bonus plan, with the annual bonus potential to be a target of 65% of his base salary up to a maximum of 130% of base salary, based uponsatisfaction of performance goals and bonus criteria to be defined and approved by the Compensation Committee in advance for each fiscal year in accordancewith the terms of the bonus plan. In addition, the Second Amended and Restated Employment Agreement provides that Mr. Goforth is eligible to participate inall benefit programs for which senior executives are generally eligible. Under his Second Amended and Restated Employment Agreement, the Company may terminate Mr. Goforth’s employment for cause or without cause. IfMr. Goforth’s employment is terminated without cause or he resigns for good reason, the Second Amended and Restated Agreement provides Mr. Goforth with,among other things, payment equal to one time his annual base salary in effect immediately prior to the date of termination, plus one time the cash bonusamount equal to the target bonus amount Mr. Goforth was eligible to receive for the prior fiscal year. Such sum is payable in twelve equal monthly installmentscommencing on the earlier to occur of the first business day of the seventh month after the date of termination or Mr. Goforth’s death. The Second Amendedand Restated Employment Agreement also contains confidentiality provisions, as well as a covenant not to compete during the employment term andcontinuing for a period of one year following his date of termination. The Second Amended and Restated Employment Agreement supercedes and replacesMr. Goforth’s Amended and Restated Employment Agreement with the Company dated January 21, 2011. 88Table of Contents Amended and Restated Employment Agreement with Chief Administrative Officer Mr. Adelman resigned from the Company effective February 1, 2013. We are presenting his compensation package for 2012 as he was a named executiveofficer as of the end of the fiscal year ended December 29, 2012. On January 21, 2011, we entered into an Amended and Restated Employment Agreement with Dean A. Adelman, our Chief Administrative Officer. TheAmended and Restated Employment Agreement expires on January 20, 2013, except that it will be renewed automatically for an additional one-year periodunless ninety days prior written notice is given by either party in advance of the expiration date of any such extended term. Mr. Adelman’s annual base salaryshall be paid at the rate of $315,000 per year. Mr. Adelman shall also be eligible to receive an annual bonus pursuant to the terms of our annual bonus plan,with the annual bonus potential to be a target of 50% of his base salary up to a maximum of 100% of base salary, based upon satisfaction of performancegoals and bonus criteria to be defined and approved by the Compensation Committee in advance for each fiscal year in accordance with the terms of theapplicable bonus plan. In addition, the Amended and Restated Employment Agreement provides that Mr. Adelman is eligible to participate in all benefitprograms for which senior executives are generally eligible. The Compensation Committee reviewed the Hewitt Associates benchmark study and considered thelevel of compensation paid to executive officers in comparable executive positions to Mr. Adelman within the comparator group of companies to establish hiscompensation under the Amended and Restated Employment Agreement. Under his Amended and Restated Employment Agreement, the Company may terminate Mr. Adelman’s employment for cause or without cause. IfMr. Adelman’s employment is terminated without cause or he resigns for good reason, the Amended and Restated Employment Agreement providesMr. Adelman with, among other things, payment equal to one time his annual base salary in effect immediately prior to the date of termination, plus one timethe cash bonus amount equal to the target bonus amount Mr. Adelman was eligible to receive for the fiscal year prior to the year of the termination of hisemployment, payable in twelve equal monthly installments commencing on the earlier to occur of the first business day of the seventh month after the date oftermination or Mr. Adelman’s death. The Employment Agreement also contains confidentiality provisions, as well as a covenant not to compete during theemployment term and continuing for a period of one year following his date of termination. The Amended and Restated Employment Agreement supercedes andreplaces Mr. Adelman’s Employment Agreement with the Company dated June 4, 2009. Employment Agreement with Chief Supply Chain Officer On October 31, 2011, we entered into an Employment Agreement with Ned M. Bassil, our new Senior Vice-President and Chief Supply Chain Officer.The Employment Agreement became effective on December 1, 2011 and expires on December 1, 2013, except that the Employment Agreement will be renewedautomatically for successive additional one-year periods unless ninety days prior written notice is given by either party in advance of the expiration date of anysuch extended term. The Employment Agreement provides that Mr. Bassil will receive a base salary at the rate of $400,000 per year, subject to increase at thediscretion of the Committee. Mr. Bassil shall also be eligible to receive an annual bonus pursuant to the terms of our annual bonus plan, with the annualbonus potential to be a target of 65% of his base salary up to a maximum of 130% of base salary, based upon satisfaction of performance goals and bonuscriteria to be defined and approved by the Compensation Committee in advance for each fiscal year in accordance with the terms of the applicable bonus plan.Upon Mr. Bassil commencing employment, Mr. Bassil received a payment of $100,000 less applicable taxes. In addition, Mr. Bassil received an additionalpayment of $100,000 less applicable taxes on the first anniversary of the effective date of his Employment Agreement. The Employment Agreement providesthat Mr. Bassil is eligible to participate in all benefit programs for which senior executives are generally eligible. Mr. Bassil also received 200,000 restricted shares of the Company’s common stock on December 1, 2011 as part of his incentive package to join theCompany. The shares were issued pursuant to the Company’s 2006 Long Term Equity Incentive Plan. The shares vest over a three-year period commencingon the effective date of his Employment Agreement. Under the Employment Agreement, the Company may terminate Mr. Bassil’s employment for cause or without cause. If Mr. Bassil’s employment isterminated without cause or he resigns for good reason, the Employment Agreement provides Mr. Bassil with, among other things, payment equal to one timehis annual base salary in effect immediately prior to the date of termination, plus one time the amount equal to the target bonus for Mr. Bassil for the fiscalyear prior to the year of the termination of his employment, payable in twelve equal monthly installments commencing on the earlier to occur of the firstbusiness day of the seventh month after the date of termination or Mr. Bassil’s death. The Employment Agreement also contains confidentiality provisions, aswell as a covenant not to compete during the employment term and continuing for a period of one year following his date of termination in the event Mr. Bassilis terminated without cause, he voluntarily resigns or resigns for good reason, or the employment period ends. 89Table of Contents Risk Analysis of Compensation Program The Compensation Committee has reviewed our compensation program to determine if the elements encourage excessive or unnecessary risk taking thatreasonably could have a material adverse effect on the Company. There is no objective way to measure risk resulting from a company’s compensationprogram; therefore, such analysis is subjective in nature. After reviewing our compensation program, the Compensation Committee believes that the onlyelements that could incentivize risk taking are the annual cash incentives under the STIP and awards made under the LTIP with payouts dependent on theachievement of certain performance levels by the Company. Since base salaries are fixed, they do not encourage risk taking. The same is true of awards underthe LTIP that include only time-based vesting. Based upon the value of each of these elements to the overall compensation mix and the relative value each has tothe other, the Compensation Committee believes that the Company’s compensation program is appropriately balanced. The Compensation Committee believesthat the mix of short- and long-term awards minimizes risks that may be taken, as any risks taken for short-term gains ultimately could jeopardize not onlythe Company’s ability to meet the long-term performance objectives, but also appreciation in the Company’s stock price. In addition, the CompensationCommittee believes that the establishment of reasonable performance goals, the capping of payouts and the avoidance of any steep payout changes at thevarious payout levels of the performance-based STIP and LTIP compensation components further reduce any risk-taking incentive that may be associatedwith these compensation elements. As a result, the Compensation Committee does not believe that our compensation program incentivizes unreasonable risktaking. Internal Revenue Code Section 162(m) In making compensation decisions, the Compensation Committee also considers the potential impact of Section 162(m) of the Internal Revenue Code of1986, as amended (“Section 162(m)”). Section 162(m) disallows a tax deduction for any publicly held corporation for individual compensation exceeding$1 million in any taxable year for the Chief Executive Officer and the other executive officers, other than compensation that is performance-based under a planthat is approved by the stockholders of the Company and meets other technical requirements. However, the Committee reserves the right to provide forcompensation to executive officers that may not be deductible if it believes such compensation is in the best interests of the Company and its stockholders. Compensation Committee Report The Compensation Committee reviewed and discussed the “Compensation Discussion and Analysis” set forth above with management. Based on suchreview and discussions, the Compensation Committee recommended to the Board that such Compensation Discussion and Analysis be included in thisAnnual Report on Form 10-K and our 2013 Proxy Statement. Richard Warner, ChairmanHoward CohenAlan Schumacher 2012 SUMMARY COMPENSATION TABLE The following table sets forth the cash and non-cash compensation for 2012, 2011 and 2010, awarded to our Chief Executive Officer, our Chief FinancialOfficer, our Chief Administrative Officer and our Chief Supply Chain Officer. We refer to these individuals as our “named executive officers.” Name and Principal Position Year Salary($) Bonus($) StockAwards($)(1) Non-EquityIncentivePlan Comp.($)(2) All OtherComp.($) Total($) George R. Judd, 2012 645,000 — 891,720 345,000 19,095 1,900,815 President and Chief 2011 600,000 — 691,839 — 22,542 1,314,381 Executive Officer(3) 2010 600,000 — 631,872 — 16,089 1,247,961 H. Douglas Goforth, 2012 400,000 — 557,326 138,125 19,310 1,114,761 CFO & Treasurer(4) 2011 375,000 — 372,527 — 16,321 763,848 2010 375,000 — 368,592 — 18,537 762,129 Dean A. Adelman, 2012 315,000 — 468,152 78,750 6,148 868,050 Chief Administrative 2011 315,000 — 319,308 — 6,960 641,268 Officer(5) 2010 315,000 — 315,936 — 2,047 632,983 Ned M. Bassil, 2012 400,000 — — 40,000 106,421 546,421 Chief Supply ChainOfficer(6) 2011 26,154 — 290,000 — 100,000 416,154 90Table of Contents (1)The amounts in this column were calculated based on the grant date fair value of our common stock, in accordance with FASB ASC Topic 718. Stockawards generally vest in various increments over multi-year periods. As a result, this grant date fair value may not be indicative of the ultimate valuethe executive may receive under these grants. (2)Under the fiscal 2012 STIP, the Committee determined that based on the Company’s financial performance, including EBITDA achievement,restricted stock awards were made to the named executive officers during January 2013 in lieu of a cash bonus otherwise payable under the fiscal 2012STIP. The economic value of this bonus, presented in the above table, for Messrs. Judd, Goforth, Adelman and Bassil was $345,000, $135,125,$78,750 and $40, 000, respectively. Total restricted shares granted in January of 2013 were 182,940 (104,863 shares for Mr. Judd, 41,983 shares forMr. Goforth, 23,936 shares for Mr. Adelman and 12,158 shares for Mr. Bassil) with a total fair value on the date of grant of $603,702 ($346,048 forMr. Judd, $138,544 for Mr. Goforth, $78,989 for Mr. Adelman and $40,121 for Mr. Bassil). These awards vest one year from the date of grant. Asindicated above, Mr. Adelman resigned from the Company on February 1, 2013. We are presenting his compensation package for 2012 as he was anamed executive officer as of the end of the fiscal year ended December 29, 2012. He forfeited this restricted stock bonus as of the date of hisresignation. (3)Mr. Judd’s “Base Salary” for 2012 includes a $90,000 compensation increase that went into effect mid year of fiscal 2012. He therefore received halfof this increase ($45,000) in fiscal 2012 as it was not retrospective. Mr. Judd’s “All Other Compensation” for 2012 includes an auto allowance of$7,620; a club dues allowance of $6,000 and health benefits paid by the Company of $5,475. (4)Mr. Goforth’s “Base Salary” for 2012 includes a $50,000 compensation increase that went into effect mid year of fiscal 2012. He therefore receivedhalf of this increase ($25,000) in fiscal 2012 as it was not retrospective. Mr. Goforth’s “All Other Compensation” for 2012 includes an auto allowanceof $7,500; a club dues allowance of $6,000 and health benefits paid by the Company of $5,809. (5)Mr. Adelman’s “All Other Compensation” for 2011 includes health benefits paid by the Company of $6,148. Mr. Adelman resigned from theCompany effective February 1, 2013. (6)Mr. Bassil’s “All Other Compensation” for 2012 represents the amount earned by Mr. Bassil in accordance with his employment agreement, which isbased upon his continued employment with the Company through the first anniversary of the effective date of that agreement, as well as $6,421 ofhealth benefits paid by the Company. We have only presented two years of compensation for Mr. Bassil as his employment with the Company did notbegin until December of 2011. 91Table of Contents GRANTS OF PLAN-BASED AWARDS FOR 2012 The table below sets forth information regarding all grants of awards made to the named executive officers during 2012. For further information regardingthe terms of certain of these grants, see “Compensation Discussion and Analysis” above. Estimated Possible PayoutsUnder Non-Equity IncentivePlan Awards(1) Estimated Future Payouts UnderEquity Incentive Plan Awards All OtherStock Awards# ofShares(2) All OtherOption Awards# of SharesUnderlyingOption Exercise orBase Priceof OptionAwards($/sh) Grant DateFair Valueof Stockand OptionAwards($) Name GrantDate Threshold($) Target($) Max($) Threshold(#) Target(#) Max(#) George R. Judd N/A 345,000 690,000 1,380,000 — — — N/A — — N/A 1/10/12 606,612 891,720 Howard D.Goforth N/A 138,125 276,250 552,500 — — — N/A — — N/A 1/10/12 379,133 557,326 Dean A.Adelman N/A 78,750 157,500 315,000 — — — N/A — — N/A 1/10/12 318,471 468,152 Ned M. Bassil N/A 130,000 260,000 520,000 — — — N/A — — N/A N/A N/A N/A (1)These columns show the range of possible payouts which were targeted for 2012 performance under the Company’s STIP as described in the sectiontitled “Annual Bonuses” in the Compensation Discussion and Analysis and are based on the named executive officer’s final base salary for 2012. TheCommittee awarded restricted stock during January of fiscal 2013 in lieu of cash bonuses based on the Company’s fiscal 2012 financialresults. These restricted stock awards vest one year from the date of grant. We have not presented this award in the table above, or in the “2012Outstanding Equity Awards Table” below as it was not granted until fiscal 2013. (2)The restricted stock grants disclosed in the table were all issued pursuant to the Company’s 2004 or 2006 LTIP. Each of the restricted stock awardscliff vest three years from the date of grant. 2012 OUTSTANDING EQUITY AWARDS AT YEAR END The following table sets forth certain information with respect to unexercised stock options and unvested shares of restricted stock held on December 29,2012 by each of our named executive officers. Option Awards Stock Awards Name Number ofSecuritiesUnderlyingUnexercisedOptionsExercisable Number ofSecuritiesUnderlyingUnexercisedOptionsUnexercisable OptionExercisePrice ($) OptionExpirationDate Number ofShares ofStock ThatHave NotVested MarketValue ofShares ofStock ThatHave NotVested($)(1) EquityIncentivePlan Awards:Number ofUnearnedShares, Units,or OtherRights ThatHave NotVested (#) EquityIncentivePlan Awards:Market orPayout Valueof UnearnedShares, Unitsor OtherRights ThatHave NotVested ($)(1) George R. Judd 78,647 — 14.01 6/5/16 1,060,453 2,979,873 — — Howard D. Goforth — — — — 628,522 1,766,147 — — Dean A. Adelman(2) 14,000 — 10.29 11/9/15 524,845 1,474,814 — — 21,169 — 14.01 6/5/16 Ned M. Bassil — — — — 200,000 562,000 — — (1)Computed based on the closing price of our common stock on December 29, 2012 of $2.81.(2)Mr. Adelman forfeited all unvested restricted stock and all unexpired options as of the date of his resignation, described further above, effectiveFebruary 1, 2013. 92Table of Contents OPTION EXERCISES AND STOCK VESTED The following table sets forth information with respect to shares of restricted stock that vested in 2012. No stock options held by the named executiveofficers were exercised in 2012. Stock Awards Number of SharesAcquired on Vesting (#) Value Realizedon Vesting ($) George R. Judd 270,095 539,498 H. Douglas Goforth 138,123 262,434 Dean A. Adelman 127,266 248,817 Ned M. Bassil — — Payments upon Certain Events of Termination or Change-in-Control As described above under “Employment Agreements,” certain of our named executive officers are entitled to receive payments in connection with thetermination of their employment by the Company in certain circumstances. Additionally, our named executive officers hold equity awards issued pursuant toour 2004 LTIP and our 2006 LTIP. Options and restricted stock issued pursuant to these plans generally vest automatically upon a change in control of theCompany. The following table describes the estimated present value of unvested restricted stock awards that would have immediately vested in the event that thenamed executive officer’s employment was terminated by reason of death or disability on December 29, 2012 or if a change in control of the Companyoccurred on such date. All outstanding option awards held by the named executive officers were fully vested at December 29, 2010. Value ofRestricted Stock(1) Total(1) George R. Judd $2,979,873 $2,979,873 H. Douglas Goforth $1,766,147 $1,766,147 Dean A. Adelman $1,474,814 $1,474,814 Ned M. Bassil $562,000 $562,000 (1)Computed based on the closing price of our common stock on December 29, 2012 of $2.81.(2)Mr. Adelman forfeited all unvested restricted stock as of the date of his resignation, described further above, effective February 1, 2013. In addition to accelerated vesting of outstanding equity awards upon a change in control, our named executive officers are entitled to receive certain otherpayments in connection with certain termination events specified in their employment agreements. As described above under “Compensation Disclosure &Analysis — Employment Agreements,” in the case of Messrs. Judd, Goforth, Adelman and Bassil, any of the Company’s obligations to make cash paymentsfollowing the termination of their respective employment is contingent upon the executive complying with the restrictive covenants contained in their respectiveemployment agreements. These restrictive covenants prohibit, during periods defined in the agreements and subject to certain limited exceptions, (i) competingwith the Company, (ii) employing or soliciting Company employees, (iii) interfering with Company relationships with its customers or vendors and(iv) disclosing or using in an unauthorized manner any of the Company’s confidential or proprietary information. These restrictive covenants generally limitthe employee’s competitive activities for a period of one year following the later of the expiration or termination of employment under the employment agreement. In the event that any of the named executive officers’ employment is terminated by the Company “for cause,” we are only obligated to pay the executive hissalary and provide the executive with fringe benefits through the date of termination. 93Table of Contents The following table describes the estimated present value of payments that would have been due to the named executive officers in the event that theiremployment was terminated by the Company due to a “termination without cause” (as defined in the employment agreement) or by the executive for “goodreason” (as defined in the employment agreement) and that such termination occurred on December 29, 2012. Such amounts would be payable pursuant to theterms of their agreements with the Company as described in the footnotes to the table as well as above under “Employment Agreements.” Salary andBonus ContinuingMedicalCoverage OutplacementServicesAllowance George R. Judd $1,380,000 $19,606 $25,000 H. Douglas Goforth $701,250 $19,985 $25,000 Dean A. Adelman(1) $472,500 $12,321 $25,000 Ned. M. Bassil $660,000 $17,596 $25,000 (1)As Mr. Adelman resigned effective February 1, 2013, and was not terminated by the Company, amounts shown above will not be paid to this namedexecutive officer. DIRECTOR COMPENSATION FOR 2012 Shown below is information concerning the compensation for each member of the Board for 2012. Mr. Judd’s compensation is reported above in the 2012Summary Compensation Table. Name Fees Earnedor Paidin Cash($)(1) StockAwards($)(2) All OtherCompensation($) Total($) Howard S. Cohen(3) 258,000 — — 258,000 Richard S. Grant(4) 77,500 10,544 — 88,044 Ronald E. Kolka — — — — Charles H. McElrea (6) 75,000 10,544 — 85,544 Steven F. Mayer — — — — Alan H. Schumacher(5) 103,750 15,816 — 119,566 Robert G. Warden — — — — M. Richard Warner(7) 80,000 — — 80,000 (1)Our directors who are not current employees of the Company, current employees or members of Cerberus’ operations team, or the Chairman of ourBoard, referred to as our outside directors, receive an annual director’s retainer fee. For 2012, these fees were paid in restricted stock that equated to35,864 shares for each applicable director with a grant date fair value of $52,720 and an economic value of $50,000. These awards vested on January10, 2013. The Chairman of our Board receives an annual chairman’s fee that has an economic value of $258,000 in consideration of the additionaltime and commitment attendant to the duties of the position of Chairman of the Board. For 2012, this fee was paid in 185,058 shares of restrictedstock with a grant date fair value of $272,035. This restricted stock award vested on January 10, 2013. In addition, each outside director receives afee of $1,250 in cash for each directors’ meeting attended. Outside directors also receive a fee of $20,000 in cash for serving as chairperson of acommittee or $10,000 in cash for being a member of a committee. In addition, members of our Audit Committee received shares of restricted stock(which will vest three years from the date of grant). These additional awards are described within footnotes 4, 5 and 6 of this table. Other than ourChairman of the Board, directors who are currently employed by the Company or Cerberus, or who are members of Cerberus’ operations team, do notreceive additional consideration for serving as directors, except that all directors are entitled to reimbursement for travel and out-of-pocket expenses inconnection with their attendance at board and committee meetings. The grant date fair value of awards granted during 2012, other than those awardsdiscussed in this footnote, is included in the “Stock Awards” column of the above table.(2)The amounts in this column were calculated based on the grant date fair value of our common stock, in accordance with FASB ASC Topic 718. Stockawards generally vest in various increments over multi-year periods. As a result, this grant date fair value may not be indicative of the ultimate value theexecutive may receive under these grants. The grant date fair value of awards granted during 2012, other than those described in Footnote 1, is includedin the “Stock Awards” column of the above table. 94Table of Contents (3)Mr. Cohen serves as non-executive Chairman of the Board. At December 29, 2012, Mr. Cohen held 185,058 shares of restricted stock and fully vestedoptions to acquire 750,000 shares of common stock. The economic value of awards granted during 2012 is included in the “Fees Earned or Paid inCash” column in the above table. (4)Mr. Grant serves as a member of the Audit Committee of the Board. At December 29, 2012, Mr. Grant held 45,838 shares of restricted stock, andfully vested options to purchase 10,000 shares of the Company’s common stock. Included in the total shares are 7,173 shares of restricted stockreceived for additional fees related to serving on the Audit Committee, which had grant date fair value of $10,544. This award cliff vests three yearsfrom the date of grant. The grant date fair value of these awards is included in the “Stock Awards” column in the above table. During fiscal 2012, asdiscussed in Footnote 1, Mr. Grant also received 35,864 shares with a grant date fair value of $52,720. These awards vest on January 10, 2013. Theeconomic value of awards granted during 2012 is included in the “Fees Earned or Paid in Cash” column in the above table. (5)Mr. Schumacher serves as the Chairman of the Audit Committee of the Board and as a member of the Compensation Committee of the Board ofDirectors. At December 29, 2012, Mr. Schumacher held 50,824 shares of restricted stock. Included in the total shares above are 10,759 shares ofrestricted stock received for additional fees related to serving as chairperson of the Audit Committee, which had grant date fair value of $15,816. Thisaward cliff vests three years from the date of grant. The grant date fair value of these awards is included in the “Stock Awards” column in the abovetable. During fiscal 2012, as discussed in Footnote 1, Mr. Schumacher also received 35,864 shares with a grant date fair value of $52,720. Theseawards vest on January 10, 2013. The economic value of awards granted during 2012 is included in the “Fees Earned or Paid in Cash” column in theabove table. (6)Mr. McElrea served as a member of the Audit Committee of the Board through October 30, 2012. Subsequent to Mr. McElrea’s resignation, he forfeitedthe 43,037 shares of restricted stock granted to him in January of 2012. Included in the total number of shares forfeited are 7,173 shares of restrictedstock received for additional fees related to serving on the Audit Committee, which had grant date fair value of $10,544. The grant date fair value ofthese awards is included in the “Stock Awards” column in the above table. During fiscal 2012, as discussed in Footnote 1, Mr. McElrea also receivedand subsequently forfeited 35,864 shares with a grant date fair value of $52,720. The economic value of awards granted during 2012 is included inthe “Fees Earned or Paid in Cash” column in the above table. (7)On February 14, 2013, Mr. Warner joined the Audit Committee as the third director on the Company’s Audit Committee. At December 29, 2012,Mr. Warner held 35,864 shares of restricted stock. As discussed in Footnote 1, these awards, which were received in fiscal 2012, had a grant date fairvalue of $52,720 and vest on January 10, 2013. The economic value of awards granted during 2012 is included in the “Fees Earned or Paid in Cash”column in the above table. Compensation Committee Interlocks and Insider Participation Messrs. Cohen, Schumacher and Warner are the current members of the Compensation Committee. Mr. Cohen served as our interim Chief ExecutiveOfficer from March 2008 through October 2008 and as our Executive Chairman from March 2008 through March 2009, and is an advisor to Cerberus.Mr. Warner was a consultant for Cerberus until June 2011. Beginning in fiscal 2013, directors may elect to receive their annual director retainer in either cash, shares of common stock, or a combination thereof. ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDERMATTERS. SECURITY OWNERSHIP OF MANAGEMENT AND CERTAIN BENEFICIAL OWNERS The following table sets forth, as of February 20, 2013 (unless otherwise indicated in the footnotes), certain information with respect to our common stockowned beneficially by (1) each director or director nominee, (2) each named executive officer, (3) all executive officers and directors as a group, and (4) eachperson known by us to be a beneficial owner of more than 5% of our outstanding common stock. Unless otherwise noted, each of the persons listed has soleinvestment and voting power with respect to the shares of common stock included in the table. Beneficial ownership has been determined in accordance withRule 13d-3 of the Exchange Act. Pursuant to the rules of the SEC, shares of our common stock that a beneficial owner has a right to acquire within 60 dayspursuant to the exercise of stock options are deemed to be outstanding for the purpose of computing percentage ownership of such owner. 95Table of Contents Name of Beneficial Owner Number of SharesBeneficially Owned Percentage of SharesOutstanding(1) Stephen Feinberg(2)(3) 33,651,979 52.06%Stadium Capital Management, LLC(4) 4,977,133 7.70%Group Capital Management, LLC(11) 4,506,123 6.97%Howard S. Cohen(5) 1,753,632 2.71%George R. Judd(6) 2,037,203 3.15%Howard D. Goforth 900,867 1.39%Dean A. Adelman(7) 189,468 * Ned M. Bassil 256,027 * Sara E. Epstein(10) 39,401 * Richard S. Grant(8) 71,264 * Steven F. Mayer(9) 0 0 Alan H. Schumacher 68,262 * Ronald E. Kolka(3) 0 0 M. Richard Warner 43,463 * All executive officers and directors as a group (11 persons) 5,359,587 8.29% * Less than one percent. (1)The percentage ownership calculations are based on 64,636,413 shares of our stock outstanding on February 20, 2013. This total includes options topurchases 870,147 shares of our common stock which are exercisable within 60 days of that date. (2)Cerberus ABP Investor LLC is the record holder of 33,651,979 shares of our common stock. Mr. Feinberg exercises sole voting and investmentauthority over all of our securities owned by Cerberus ABP Investor LLC. Thus, pursuant to Rule 13d-3 under the Exchange Act, Mr. Feinberg isdeemed to beneficially own 33,651,979 shares of our common stock. (3)The address for Messrs. Feinberg and Kolka is c/o Cerberus Capital Management, L.P., 299 Park Avenue, New York, NY 10171. (4)Stadium Capital Management, LLC exercises shared voting and investment authority over 4,977,133 shares of our stock in conjunction withAlexander M. Seaver and Bradley R. Kent. In addition, Stadium Capital Partners, L.P., also exercises shared voting and investment authority over4,434,149 of these shares of our stock. The address for Stadium Capital Management, LLC, Alexander M. Seaver, Bradley R. Kent and StadiumCapital Partners L.P. is 199 Elm Street, New Canaan, Connecticut 06840-5321. (5)Mr. Cohen’s ownership includes options to purchase 750,000 shares of our common stock which are exercisable within 60 days of February 20, 2013. (6)Mr. Judd’s ownership includes options to purchase 78,647 shares of our common stock which are exercisable within 60 days of February 20, 2013. (7)Mr. Adelman’s resigned from the Company effective February 1, 2013. All shares of unvested restricted stock and unexercised options expired as ofthe date of his resignation. These awards are therefore no longer included in the above number of shares beneficially owned. (8)Mr. Grant’s ownership includes options to purchase 10,000 shares of our common stock which are exercisable within 60 days of February 20, 2013. (9)The address for Mr. Mayer is c/o Cerberus California, LLC, 11812 San Vicente Boulevard, Los Angeles, CA 90049. (10)Ms. Epstein has served as our Vice President, General Counsel and Corporate Secretary since February 2013, and our Senior Counsel and CorporateSecretary since March 2010. (11)Prescott Group Aggressive Small Cap, L.P. and Prescott Group Aggressive Small Cap II, L.P., through the account of Prescott Group Aggressive SmallCap Master Fund, G.P., exercises shared voting and investment authority over 4,506,123 shares of our stock, representing approximately6.97%. Prescott Group Capital Management, L.L.C. serves as the general partner of each of Prescott Group Aggressive Small Cap, L.P. and PrescottGroup Aggressive Small Cap II, L.P. and may direct the vote and disposition of the 4,506,123 shares of our common stock. As the principal ofPrescott Group Capital Management, L.L.C., Mr. Phil Frohlich may direct the vote and disposition of the 4,506,123 shares of our commonstock. The address for Prescott Group Aggressive Small Cap, L.P., Prescott Group Aggressive Small Cap II, L.P., Prescott Group Aggressive SmallCap Master Fund, G.P., Prescott Group Capital Management, L.L.C. and Mr. Phil Frohlich is 1924 South Utica, Suite 1120, Tulsa, Oklahoma74104-6529. 96Table of Contents Equity Compensation Plan Information The following table provides information about the shares of our common stock that may be issued upon the exercise of options and other awards underour existing equity compensation plans as of December 29, 2012. Our stockholder-approved equity compensation plans are the 2004 Equity Incentive Planand the 2006 Long-Term Equity Incentive Plan. We do not have any non-stockholder approved equity compensation plans. (a) (b) (c) Plan Category Number of Securitiesto be Issued UponExercise ofOutstanding Options,Warrants and Rights Weighted-AverageExercise Price ofOutstandingOptions, Warrantsand Rights Number of Securities RemainingAvailable for Future Issuance UnderEquity Compensation Plans(Excluding Securities Reflected inColumn (a))Equity compensation plans approved by security holders 905,316 $6.18 7,622,080 Equity compensation plans not approved by security holders — n/a — Total 905,316 $6.18 7,622,080 ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE. Review and Approval or Ratification of Related Person Transactions Our legal department and Corporate Secretary are primarily responsible for identifying and reviewing relationships and transactions in which theCompany and our directors, executive officers, certain of our stockholders or their immediate family members are participants to determine whether any ofthese “related persons” had or will have a direct or indirect material interest. In order to identify potential related person transactions, our legal departmentannually prepares and distributes to all directors and executive officers a written questionnaire which includes questions intended to elicit information aboutany related person transactions. Information regarding transactions with related persons or any violation of policy, including transactions involving a potentialconflict of interest in violation of our Code of Ethical Conduct, may be anonymously reported by employees through our Business Conduct and EthicsHotline. If a related person transaction is identified by the legal department as one which must be reported in our Annual Report on Form 10-K or our ProxyStatement, as applicable, pursuant to applicable SEC regulations, we present the transaction to the Audit Committee for its review and approval or ratification.In evaluating related person transactions, our Audit Committee members apply the same standards of good faith and fiduciary duty they apply to their generalresponsibilities as a committee of the Board and as individual directors. The Audit Committee may approve a related person transaction when, in its good faithjudgment, the transaction is in the best interests of the Company. Cerberus Capital Management, L.P., our equity sponsor, retains consultants that specialize in operations management and support and who provideCerberus with consulting advice concerning portfolio companies in which funds and accounts managed by Cerberus or its affiliates have invested. From timeto time, Cerberus makes the services of these consultants available to Cerberus portfolio companies. We believe that the terms of these consulting arrangementsare favorable to us, or, alternatively, are materially consistent with those terms that would have been obtained by us in an arrangement with an unaffiliatedthird party. We have normal service, purchase and sales arrangements with other entities that are owned or controlled by Cerberus. We believe that thesetransactions are not material to our results of operations or financial position. Other than the transactions discussed above, for the last fiscal year there has not been, nor is there currently proposed, any “transaction,” as defined bythe SEC: ●to which we are or will be a participant; ●in which the amount involved exceeded or will exceed $120,000; and ●in which any “related person,” as defined by the SEC, had or will have a direct or indirect material interest. Directors Independence We believe that, as of the date of this Annual Report on Form 10-K, four of the current members of our Board do not meet the independence standardspromulgated under the listing standards of the NYSE. Three of the current members of our Board are employees of or advisors to Cerberus. Messrs. Mayerand Kolka are currently employed by Cerberus and Mr. Cohen is an advisor to Cerberus. Mr. Judd is the Company’s President and Chief Executive Officer. 97Table of Contents ITEM 14. PRINCIPAL ACCOUNTING FEES AND SERVICES. The following table presents the aggregate fees billed by Ernst & Young LLP for professional services for fiscal years 2012 and 2011, by category asdescribed in the notes to the table: 2012 2011 Audit Fees(1) $1,603,124 $1,614,758 Audit-Related Fees(2) 152,129 159,000 Tax Fees — — All Other Fees(3) 1,995 1,995 TOTAL $1,757,248 $1,775,753 (1)Consists of fees related to audits of our consolidated financial statements, reviews of interim financial statements and disclosures in filings with theSecurities and Exchange Commission (“SEC”). Audit fees also included fees related to the audit of internal control over financial reporting, as requiredby Section 404 of the Sarbanes-Oxley Act of 2002. (2)Consists of fees billed for services related to benefit plan audits. (3)Consists of fees billed for services related to certain transactional services and certain research related products. Pre-Approval of Audit and Non-Audit Services The charter of the Audit Committee provides that the Audit Committee is responsible for the pre-approval of all material audit services and non-auditservices to be performed for us by our independent registered public accounting firm. All audit and non-audit work described above was pre-approved by theAudit Committee. The Audit Committee may delegate to one or more of its members the authority to grant such pre-approvals. The decisions of any suchmember shall be presented to the full Audit Committee at each of its scheduled meetings. PART IV ITEM 15. EXHIBITS, FINANCIAL STATEMENT SCHEDULES. (a) Financial Statements, Schedules and Exhibits 1. Financial Statements. The Financial Statements of BlueLinx Holdings Inc. and the Reports of Independent Registered Public Accounting Firm arepresented under Item 8 of this Form 10-K. 2. Financial Statement Schedules. Not applicable. 3. Exhibits. 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 pagesthereto(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) 98Table of Contents Exhibit Number Item 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) 10.1 Asset Purchase Agreement, dated as of March 12, 2004, by and among Georgia-Pacific Corporation, Georgia-Pacific Building MaterialsSales, 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-PacificBuilding 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 ExchangeCommission 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 ProxyStatement 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 Form8-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 referenceto Appendix A to the Definitive Proxy Statement for the 2011 Annual Meeting of Stockholders, filed with the Securities and ExchangeCommission on April 18, 2011) 10.9 Amended and Restated Bluelinx Holdings Inc. 2006 Long-Term Equity Incentive Plan (as amended through May 17, 2012 and restated solelyfor purposes of filing pursuant to Item 601 of Regulation S-K) (Incorporated by reference to Appendix A to the Definitive Proxy Statement forthe 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-Kfiled 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 toForm 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 toForm 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 AppendixB to the Definitive Proxy Statement for the 2011 Annual Meeting of Stockholders, filed with the Securities and Exchange Commission onApril 18, 2011) 99Table of Contents Exhibit Number Item 10.14 Canadian Credit Agreement, dated August 12, 2011, by and among Bluelinx Canada, CIBC Asset-Based Lending Inc. and the lenders fromtime to time parties thereto (Incorporated by reference to Form 8-K filed with the Securities and Exchange Commission on August 16, 2 011) 10.15 Letter Agreement, dated December 18, 2006, relating to and amending the Master Purchase, Supply and Distribution Agreement betweenGeorgia-Pacific Corporation and BlueLinx Corporation dated May 7, 2004 (incorporated by reference to Form 8-K filed with the Securitiesand 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 AmericanCapital 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 borrowerand German American Capital Corporation as Lender (incorporated by reference to Form 8-K filed with the Securities and ExchangeCommission 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 CapitalCorporation (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 othersignatories 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 onForm 10-K for the year ended January 1, 2011, filed with the Securities and Exchange Commission on February 25, 2011) 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 toForm 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 toForm 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 toForm 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 subsidiariesand 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) 100Table of Contents Exhibit Number Item 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 (incorporatedby 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-Kfiled 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* 23.1 Consent of Ernst & Young LLP* 31.1 Certification of George R. Judd, Chief Executive Officer, pursuant to Section 302 of the Sarbanes-Oxley Act of 2002* 31.2 Certification of Howard D. Goforth, Chief Financial Officer and Treasurer, pursuant to Section 302 of the Sarbanes-Oxley Act of 2002* 32.1 Certification of George R. Judd, Chief Executive Officer, pursuant to Section 906 of the Sarbanes-Oxley Act of 2002* 32.2 Certification of Howard D. Goforth, Chief Financial Officer and Treasurer, pursuant to Section 906 of the Sarbanes-Oxley Act of 2002* 101 The following financial information from the Registrant’s Annual Report on Form 10-K for the fiscal year ended December 29, 2012,formatted in Extensible Business Reporting Language (“XBRL”): (i) Consolidated Statements of Operations and Comprehensive Loss, (ii)Consolidated Balance Sheets, (iii) Consolidated Statements of Stockholders’ (Deficit) Equity, (iv) Consolidated Statements of Cash Flowsand (v) Notes to Consolidated Financial Statements.** *Filed herewith. **Pursuant to Rule 406T of Regulation S-T, these interactive data files are deemed not to be “filed” or part of a registration statement or prospectus forpurposes of Sections 11 or 12 of the Securities Act of 1933, as amended, or Section 18 of the Securities Act of 1934, as amended, andotherwise are not subject to liability under these sections. † Portions of this document were omitted and filed separately with the SEC pursuant to a request for confidential treatment in accordance with Rule 24b-2of 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 andExchange Commission on April 16, 2012. 101Table of Contents (B)Previously filed as an exhibit to Amendment No. 3 to the Company’s Registration Statement on Form S-1 (Reg. No. 333-118750) filed with theSecurities and Exchange Commission on November 26, 2004. (C)Previously filed as an exhibit to Amendment No. 1 to the Company’s Registration Statement on Form S-1 (Reg. No. 333-118750) filed with theSecurities and Exchange Commission on October 1, 2004. (D)Previously filed as an exhibit to Amendment No. 2 to the Company’s Registration Statement on Form S-1 (Reg. No. 333-118750) filed with theSecurities and Exchange Commission on October 8, 2004. 102Table of ContentsSIGNATURES Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on itsbehalf by the undersigned, thereunto duly authorized. BLUELINX HOLDINGS INC.(Registrant) By:/s/ George R. Judd George R. Judd President and Chief Executive Officer Date: February 20, 2013 Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrantand in the capacities and on the dates indicated. SignatureName Capacity Date /s/ George R. Judd President and Chief Executive Officer and Director (Principal Executive Officer) February 20, 2013George R. Judd /s/ Howard D. Goforth Senior Vice President, Chief Financial Officer andTreasurer (Principal Financial Officer) February 20, 2013Howard D. Goforth /s/ Scott T. Phillips Chief Accounting Officer (Principal AccountingOfficer) February 20, 2013Scott T. Phillips /s/ Howard S. Cohen Chairman February 20, 2013Howard S. Cohen /s/ Richard S. Grant Director February 20, 2013Richard S. Grant /s/ Steven F. Mayer Director February 20, 2013Steven F. Mayer /s/ Ronald E. Kolka Director February 20, 2013Ronald E. Kolka /s/ Alan H. Schumacher Director February 20, 2013Alan H. Schumacher /s/ M. Richard Warner Director February 20, 2013M. Richard Warner 103 Exhibit 21.1 LIST OF SUBSIDIARIES Jurisdiction of Name of Subsidiary Organization1. BLUELINX CORPORATION Georgia 2. BLUELINX SERVICES INC. Georgia 3. BLUELINX FLORIDA LP Florida 4. BLUELINX FLORIDA HOLDING NO. 1 INC. Georgia 5. BLUELINX FLORIDA HOLDING NO. 2 INC. Georgia 6. BLUELINX BUILDING PRODUCTS CANADA LTD. British Columbia, Canada 7. BLX REAL ESTATE LLC Delaware 8. ABP AL (MIDFIELD) LLC Delaware 9. ABP AR (LITTLE ROCK) LLC Delaware 10. ABP CA (CITY OF INDUSTRY) LLC Delaware 11. ABP CA (NATIONAL CITY) LLC Delaware 12. ABP CA (NEWARK) LLC Delaware 13. ABP CO I (DENVER) LLC Delaware 14. ABP CO II (DENVER) LLC Delaware 15. ABP FL (LAKE CITY) LLC Delaware 16. ABP FL (MIAMI) LLC Delaware 17. ABP FL (PENSACOLA) LLC Delaware 18. ABP FL (TAMPA) LLC Delaware 19. ABP FL (YULEE) LLC Delaware 20. ABP GA (LAWRENCEVILLE) LLC Delaware 21. ABP IA (DES MOINES) LLC Delaware 22. ABP IL (UNIVERSITY PARK) LLC Delaware 23. ABP IN (ELKHART) LLC Delaware  24. ABP KY (INDEPENDENCE) LLC Delaware 25. ABP LA (SHREVEPORT) LLC Delaware 26. ABP LA (NEW ORLEANS) LLC Delaware 27. ABP MA (BELLINGHAM) LLC Delaware 28. ABP MD (BALTIMORE) LLC Delaware 29. ABP ME (PORTLAND) LLC Delaware 30. ABP MI (DETROIT) LLC Delaware 31. ABP MI (GRAND RAPIDS) LLC Delaware 32. ABP MN (MAPLE GROVE) LLC Delaware 33. ABP MO (BRIDGETON) LLC Delaware 34. ABP MO (KANSAS CITY) LLC Delaware 35. ABP MO (SPRINGFIELD) LLC Delaware 36. ABP MS (PEARL) LLC Delaware 37. ABP NC (BUTNER) LLC Delaware 38. ABP NC (CHARLOTTE) LLC Delaware 39. ABP NJ (DENVILLE) LLC Delaware 40. ABP NY (YAPHANK) LLC Delaware 41. ABP OH (TALMADGE) LLC Delaware 42. ABP OK (TULSA) LLC Delaware 43. ABP OR (BEAVERTON) LLC Delaware 44. ABP PA (ALLENTOWN) LLC Delaware 45. ABP PA (STANTON) LLC Delaware 46. ABP SC (CHARLESTON) LLC Delaware 47. ABP SD (SIOUX FALLS) LLC Delaware 48. ABP TN (ERWIN) LLC Delaware 49. ABP TN (MEMPHIS) LLC Delaware  50. ABP TN (MADISON) LLC Delaware 51. ABP TX (EL PASO) LLC Delaware 52. ABP TX (FORT WORTH) LLC Delaware 53. ABP TX (HARLINGEN) LLC Delaware 54. ABP TX (HOUSTON) LLC Delaware 55. ABP TX (LUBBOCK) LLC Delaware 56. ABP TX (SAN ANTONIO) LLC Delaware 57. ABP VA (RICHMOND) LLC Delaware 58. ABP VA (VIRGINIA BEACH) LLC Delaware 59. ABP VT (SHELBURNE) LLC Delaware 60. ABP WI (WAUSAU) LLC Delaware 61. ABP MD (BALTIMORE) SUBSIDIARY LLC Delaware 62. BLUELINX LANDLORD AGENT Delaware 63. BLX SC (CHARLESTON) LLC Delaware Exhibit 23.1 Consent of Independent Registered Public Accounting FirmWe consent to the incorporation by reference in the following Registration Statements:(1) Registration Statement (Form S-3 No. 333-176131) of BlueLinx Holdings Inc., (2) Registration Statement (Form S-8 No. 333-183027) pertaining to the BlueLinx Holdings Inc. 2006 Long-Term Equity Incentive Plan (3) Registration Statement (Form S-8 No. 333-176130) pertaining to the BlueLinx Holdings Inc. 2006 Long-Term Equity Incentive Plan, (4) Registration Statement (Form S-8 No. 333-151529) pertaining to the BlueLinx Holdings Inc. 2006 Long-Term Equity Incentive Plan; (5) Registration Statement (Form S-8 No. 333-134612) pertaining to the BlueLinx Holdings Inc. 2006 Long-Term Equity Incentive Plan, and (6) Registration Statement (Form S-8 No. 333-124721) pertaining to the BlueLinx Holdings Inc. Equity Incentive Plan; of our reports dated February 20, 2013, with respect to the consolidated financial statements of BlueLinx Holdings Inc. and subsidiaries and the effectivenessof internal control over financial reporting of BlueLinx Holdings Inc. and subsidiaries included in this Annual Report (Form 10-K) for the year endedDecember 29, 2012. /s/ Ernst & Young LLP Atlanta, GeorgiaFebruary 20, 2013 Exhibit 31.1 CERTIFICATION REQUIRED BY RULE 13a-14(a) OR RULE 15d-14(a) OF THE SECURITIESEXCHANGE ACT OF 1934I, George R. Judd certify that: (1)I have reviewed this annual report on Form 10-K of BlueLinx Holdings Inc; (2)Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make thestatements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by thisreport; (3)Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects thefinancial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; (4)The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined inExchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f))for the registrant and have: (a)Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, toensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within thoseentities, particularly during the period in which this report is being prepared; (b)Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under oursupervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for externalpurposes in accordance with generally accepted accounting principles; (c)Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectivenessof the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and (d)Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscalquarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect,the registrant’s internal control over financial reporting; and (5)The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to theregistrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions): (a)All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonablylikely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and (b)Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control overfinancial reporting.February 20, 2013 /s/ George R. JuddGeorge R. JuddBlueLinx Holdings Inc.Chief Executive Officer Exhibit 31.2 CERTIFICATION REQUIRED BY RULE 13a-14(a) OR RULE 15d-14(a) OF THE SECURITIESEXCHANGE ACT OF 1934I, H. Douglas Goforth certify that: (1)I have reviewed this annual report on Form 10-K of BlueLinx Holdings Inc; (2)Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make thestatements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by thisreport; (3)Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects thefinancial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; (4)The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined inExchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f))for the registrant and have: (a)Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, toensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within thoseentities, particularly during the period in which this report is being prepared; (b)Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under oursupervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for externalpurposes in accordance with generally accepted accounting principles; (c)Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectivenessof the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and (d)Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscalquarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect,the registrant’s internal control over financial reporting; and (5)The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to theregistrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions): (a)All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonablylikely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and (b)Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control overfinancial reporting.February 20, 2013 /s/ H. Douglas GoforthH. Douglas GoforthBlueLinx Holdings Inc.Senior Vice President,Chief Financial Officer and Treasurer Exhibit 32.1 BLUELINX HOLDINGS INC.CERTIFICATION PURSUANT TO18 U.S.C. SECTION 1350AS ADOPTED PURSUANT TOSECTION 906 OF THE SARBANES-OXLEY ACT OF 2002In connection with the annual report of BlueLinx Holdings Inc. (the “Company”) on Form 10-K for the year ending December 29, 2012, as filed with theUnited States Securities and Exchange Commission on the date hereof (the “Report”), I, George R. Judd, Chief Executive Officer of the Company, do herebycertify, pursuant to 18 U.S.C. 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that: (1)The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and (2)The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company. February 20, 2013By:/s/ George R. Judd George R. Judd Chief Executive OfficerExhibit 32.2 BLUELINX HOLDINGS INC.CERTIFICATION PURSUANT TO18 U.S.C. SECTION 1350AS ADOPTED PURSUANT TOSECTION 906 OF THE SARBANES-OXLEY ACT OF 2002In connection with the annual report of BlueLinx Holdings Inc. (the “Company”) on Form 10-K for the year ending December 29, 2012, as filed with theUnited States Securities and Exchange Commission on the date hereof (the “Report”), I, H. Douglas Goforth, Chief Financial Officer and Treasurer of theCompany, do hereby certify, pursuant to 18 U.S.C. 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that: (1)The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and (2)The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company. February 20, 2013By:/s/ H. Douglas Goforth H. Douglas Goforth Senior Vice President, Chief Financial Officer and Treasurer 

Continue reading text version or see original annual report in PDF format above