BlueLinx
Annual Report 2014

Plain-text annual report

UNITED STATESSECURITIES AND EXCHANGE COMMISSIONWashington, D.C. 20549 Form 10-KþANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the fiscal year ended January 3, 2015ORoTRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT 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: 770-953-7000Securities registered pursuant to Section 12(b) of the ActTitle of Each Class Name of Each Exchange on Which Registered Common stock, par value $0.01 per share New York Stock ExchangeSecurities registered pursuant to Section 12(g) of the Act: NoneIndicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes o No þIndicate 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 þIndicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during thepreceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past90 days. Yes þ No oIndicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submittedand posted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit and post suchfiles). Yes þ No oIndicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of registrant’sknowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. oIndicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of“large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act. (Check one):Large accelerated filer oAccelerated filer o Non-accelerated filer oSmaller reporting company þ Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act). Yes o No þThe aggregate market value of the registrant’s common stock held by non-affiliates of the registrant as of July 5, 2014 was $34,205,977, based on the closing price on theNew York Stock Exchange of $1.26 per share on July 3, 2014.As of February 19, 2015, the registrant had 89,415,145 shares of common stock outstanding.DOCUMENTS INCORPORATED BY REFERENCEPart III of this Annual Report on Form 10-K incorporates by reference to the registrant’s definitive Proxy Statement, to be filed with the Securities and ExchangeCommission within 120 days of the close of the fiscal year ended January 3, 2015.BLUELINX HOLDINGS INC.ANNUAL REPORT ON FORM 10-KFor the fiscal year ended January 3, 2015 TABLE OF CONTENTSPART I ITEM 1 Business4ITEM 1A Risk Factors6ITEM 1B Unresolved Staff Comments11ITEM 2 Properties11ITEM 3 Legal Proceedings12ITEM 4 Mine Safety Disclosures12 PART II ITEM 5 Market for Registrant’s Common Equity, Related Stockholder Matters, and Issuer Purchases of Equity Securities13ITEM 6 Selected Financial Data15ITEM 7 Management’s Discussion and Analysis of Financial Condition and Results of Operations16ITEM 7A Quantitative and Qualitative Disclosures about Market Risk26ITEM 8 Financial Statements and Supplementary Data28ITEM 9 Changes in and Disagreements with Accountants on Accounting and Financial Disclosure63ITEM 9A Controls and Procedures63ITEM 9B Other Information63 PART III ITEM 10 Directors, Executive Officers, and Corporate Governance64ITEM 11 Executive Compensation64ITEM 12 Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters64ITEM 13 Certain Relationships and Related Transactions, and Director Independence64ITEM 14 Principal Accounting Fees and Services65 PART IV ITEM 15 Exhibits and Financial Statement Schedules66 Signatures722As used herein, unless the context otherwise requires, “BlueLinx,” the “Company,” “we,” “us,” and “our” refer to BlueLinx Holdings Inc. and itssubsidiaries. 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 2014” refers to the 52-week period ended January 3, 2015. Reference to “fiscal 2013” refers to the 53-weekperiod ended January 4, 2014. Reference to “fiscal 2012” refers to the 52-week period ended December 29, 2012.CAUTIONARY STATEMENT CONCERNING FORWARD-LOOKING STATEMENTS This Annual Report on Form 10-K contains information that may constitute “forward-looking statements.” Generally, the words “believe,” “expect,”“intend,” “estimate,” “anticipate,” “project,” “will” and similar expressions identify forward-looking statements, which generally are not historical in nature.However, the absence of these words or similar expressions does not mean that a statement is not forward-looking. All statements that address operatingperformance, events or developments that we expect or anticipate will occur in the future — including statements relating to volume growth, share of salesand earnings per share growth, and statements expressing general views about future operating results — are forward-looking statements. Managementbelieves that these forward-looking statements are reasonable as and when made. However, caution should be taken not to place undue reliance on any suchforward-looking statements because such statements speak only as of the date when made. Our Company undertakes no obligation to publicly update orrevise any forward-looking statements, whether as a result of new information, future events or otherwise, except as required by law. In addition, forward-looking statements are subject to certain risks and uncertainties that could cause actual results to differ materially from our Company’s historical experienceand our present expectations or projections. These risks and uncertainties include, but are not limited to, those described in Item 1A Risk Factors andelsewhere in this report and those described from time to time in our future reports filed with the Securities and Exchange Commission.3PART IITEM 1. BUSINESSCompany OverviewWe are a leading distributor of building products in North America. The Company is headquartered in Atlanta, Georgia, with executive offices located at4300 Wildwood Parkway, Atlanta, Georgia, and we operate our distribution business through a network of 49 distribution centers. We serve all majormetropolitan areas in the United States (“U.S.”) and, as of January 3, 2015, we distributed approximately 10,000 products from over 750 suppliers to serviceapproximately 11,500 customers nationwide, including dealers, industrial manufacturers, manufactured housing producers, and home improvement retailers.The Company was incorporated on March 8, 2004 as ABP Distribution Holdings, Inc (“ABP”). On May 7, 2004, Georgia-Pacific Corporation (“Georgia-Pacific”) sold the assets of its distribution division to ABP. ABP subsequently merged into BlueLinx Holdings Inc. On December 17, 2004, we consummatedan initial public offering of our common stock.Fiscal YearFiscal 2014 contained 52 weeks, fiscal 2013 contained 53 weeks, and fiscal 2012 contained 52 weeks.Products and ServicesWe distribute products in two principal categories: structural products and specialty products. Structural products, which represented approximately41%, 44%, and 42% of our fiscal 2014, fiscal 2013, and fiscal 2012 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. Additional end uses of ourstructural products include outdoor decks, sheathing, crates, and boxes. Specialty products, which represented approximately 59%, 56%, and 58% of ourfiscal 2014, fiscal 2013, and fiscal 2012 gross sales, respectively, include roofing, insulation, specialty panels, moulding, engineered wood products, vinylproducts (used primarily in siding), outdoor living, particle board, and metal products (excluding rebar and remesh). In some cases, these products arebranded by us.We also provide a wide range of value-added services and solutions to our customers and suppliers 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 usand our customers;•intermodal distribution services, including railcar unloading and cargo reloading onto customers’ trucks; and•backhaul services, when otherwise empty trucks are returning from customer deliveries.Distribution ChannelsWe sell products through three main distribution channels: warehouse sales, reload sales, and direct sales.Warehouse sales are delivered from our warehouses to dealers, home improvement centers, and industrial users. Warehouse sales accounted forapproximately 71% of our fiscal 2014, fiscal 2013, and fiscal 2012 gross sales.Reload sales are similar to warehouse sales but are shipped from third-party warehouses where we store owned product in order to enhance operatingefficiencies. This channel is employed primarily to service strategic customers that would be less economical to service from our warehouses, and todistribute large volumes of imported products from port facilities. Reload sales accounted for approximately10% of our fiscal 2014 and fiscal 2013 grosssales, and 9% of our fiscal 2012 gross 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 19% of our fiscal 2014 and fiscal 2013 gross sales, and 20% of our2012 gross sales.4CompetitionThe U.S. building products distribution market is a highly fragmented market, served by a small number of multi-regional distributors, several regionallyfocused distributors and a large number of independent local distributors. Local and regional distributors tend to be closely held and often specialize in alimited number of segments, in which they offer a broader selection of products. Some of our multi-regional competitors are part of larger companies andtherefore have access to greater financial and other resources than those to which we have access. We compete on the basis of breadth of product offering,consistent availability of product, product price and quality, reputation, service, and distribution facility location.Two of our largest competitors are Boise Cascade Company and Weyerhaeuser Company. Most major markets in which we operate are served by thedistribution arm of at least one of these companies.SeasonalityWe are exposed to fluctuations in quarterly sales volumes and expenses due to seasonal factors common in the building products 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 aretypically our strongest quarters, reflecting a substantial increase in construction due to more favorable weather conditions. Our working capital, accountsreceivable, and accounts payable generally peak in the third quarter, while inventory generally peaks in the second quarter in anticipation of the summerbuilding season.EmployeesAs of January 3, 2015, we employed approximately 1,700 employees. We consider our relationship with our employees generally to be good.Executive OfficersThe following are the current executive officers of our Company as of February 19, 2015:Mitchell B. Lewis, age 52, has served as our President and Chief Executive Officer, and as a Director of BlueLinx Holdings Inc. since January 2014. Mr.Lewis has held numerous leadership positions in the building products industry since 1992, including President and Chief Executive Officer of EuramaxHoldings, Inc. from February 2008, through November 2013. Mr. Lewis also served as Chief Operating Officer in 2005, Executive Vice President in 2002, andgroup Vice President in 1997, of Euramax Holdings, Inc. and its predecessor companies. Prior to being appointed group Vice President, Mr. Lewis served asPresident of Amerimax Building Products, Inc. Prior to 1992, Mr. Lewis served as Corporate Counsel with Alumax Inc. and practiced law with Alston & BirdLLP, specializing in mergers and acquisitions.Susan C. O’Farrell, age 51, has served as our Senior Vice President, Chief Financial Officer, Treasurer, and Principal Accounting Officer since May 2014.Prior to joining us, Ms. O’Farrell was a senior financial executive holding several roles with The Home Depot since 1999. As the Vice President of Finance,she led teams supporting the retail organization. Ms. O’Farrell was also responsible for the finance function for The Home Depot’s At Home Services Group.Ms. O’Farrell led the financial operations of The Home Depot, as well as served as the VP Finance for the $26 billion Northern Division of the company. Ms.O’Farrell began her career with Andersen Consulting, LLP, leaving as an Associate Partner in 1996 for a strategic information systems role with AGLResources. Ms. O’Farrell earned a Bachelor of Science degree in Business Administration from Auburn University and attended Emory University’sExecutive Leadership program.Robert P. McKagen, age 55, has served as our Senior Vice President of Sales and Operations since 2012. Prior to 2012, Mr. McKagan served as theCompany’s Vice President Supply Chain since 2009, and Regional Vice President of the Southern Region from the Company’s inception in 2004. Mr.McKagen has approximately 30 years of industry experience. He received a Bachelor in Business Administration from Florida Atlantic University.Sara E. Epstein, age 37, has served as our Vice President, General Counsel and Corporate Secretary since February 2013, and our Senior Counsel andCorporate Secretary since March 2010. Prior to joining us, Ms. Epstein was an attorney with Jones Day. Ms. Epstein received a Juris Doctor degree fromTulane University and a Bachelor of Arts degree from Tufts University.Environmental and Other Governmental RegulationsThe Company is 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 frequently5and have tended to become more stringent over time. Many of them provide for substantial fines and penalties, orders (including orders to cease operations),and criminal sanctions for violations. They may also impose liability for property damage and personal injury stemming from the presence of, or exposure to,hazardous substances. In addition, certain of our operations require us to obtain, maintain compliance with, and periodically renew permits.Certain of these laws, including the Comprehensive Environmental Response, Compensation, and Liability Act, may require the investigation 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 andseverally, and regardless of fault.We are also subject to the requirements of the U.S. Department of Labor Occupational Safety and Health Administration (“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 (“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 stateregulation.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.Securities Exchange Act ReportsThe Company maintains a website at www.BlueLinxCo.com. The information on the Company’s website is not incorporated by reference in this AnnualReport on Form 10-K. We make available on or through our website certain reports, and amendments to those reports, that we file with or furnish to the U.S.Securities and Exchange Commission (the “SEC”) in accordance with the Securities Exchange Act of 1934. These include our Annual Reports on Form 10-K,Quarterly Reports on Form 10-Q, Current Reports on Form 8-K, and proxy statements. Additionally, our code of ethics, board committee charters, andcorporate governance guidelines are available on our website. If we make substantial amendments to our code of ethics, or grant any waiver, including anyimplicit waiver, we will disclose the nature of such amendment or waiver on our website or in a report on Form 8-K.We make information available on our website free of charge as soon as reasonably practicable after we electronically file the information with, or furnishit to, the SEC. In addition, copies of this information will be made available, free of charge, on written request, by writing to BlueLinx Holdings Inc., Attn:Corporate Secretary, 4300 Wildwood Parkway, Atlanta, Georgia, 30339.ITEM 1A. RISK FACTORSIn addition to the other information contained in this Form 10-K, the following risk factors should be considered carefully in evaluating our business.Our business, financial condition, or results of operations could be materially adversely affected by any of these risks. Additional risks not presently knownto us or 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 may reduceour 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. Market prices of building products historically have been volatile and cyclical, and we have limited ability to control the timing andamount of pricing changes. Demand for building products is driven mainly by factors outside of our control, such as general economic and politicalconditions, interest rates, availability of mortgage financing, the construction, repair and remodeling markets, industrial markets, weather, and populationgrowth. The supply of building products fluctuates based on available manufacturing capacity, and excess capacity in the industry can result in significantdeclines in market prices for those products. To the extent that prices and volumes experience a sustained or sharp decline, our net sales and margins likelywould decline as well. Because we have substantial fixed costs, a decrease in sales and margin generally may have a significant adverse impact on ourfinancial condition, operating results, and cash flows.Additionally, many of the building products which we distribute, including OSB, plywood, lumber, and particleboard, are commodities that are widelyavailable from other distributors or manufacturers, with prices and volumes determined frequently6in an auction market based on participants’ perceptions of short-term supply and demand factors. At times, the purchase price for any one or more of theproducts we produce or distribute may fall below our purchase costs, requiring us to incur short-term losses on product sales.All of these factors make it difficult to forecast our operating results.Our industry is dependent on the homebuilding industry, and any future downturns would materially affect our business, liquidity, and operatingresults.Our sales depend heavily on the strength of national and local new residential construction, home improvement, and remodeling markets. The strength ofthese 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. Our results ofoperations were adversely affected by the severe downturn in new housing activity in the U.S., and, while conditions are improving, any future downturns inthe markets that we serve or in the economy generally may have a material adverse effect on our operating results, liquidity, and financial condition. Reducedlevels of construction activity may result in continued intense price competition among building materials suppliers, which may adversely affect our grossmargins. We cannot provide assurance that our responses to future downturns in the economy in general, and in the residential housing market in particular,will be successful.A significant portion of our sales are on credit to our customers. Material changes in their creditworthiness or our inability to forecast deterioration intheir 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. Market disruptions could cause economic downturns, which may leadto lower demand for our products and increased incidence of customers’ inability to pay their accounts. Bankruptcies by our customers may cause us to incurbad debt expense at levels higher than historically experienced. In fiscal 2014, less than 0.1% in bad debt expense to total net sales was incurred related tocredit sales. Our customers generally are susceptible to the same economic business risks as those to which we are exposed. Furthermore, we may notnecessarily be aware of any deterioration in our customers’ financial position. If our customers’ financial position were to become significantly impaired, itcould have a material impact on our bad debt exposure, which may result in a material adverse effect on our operating results, cash flow and liquidity. Inaddition, certain of our suppliers may be impacted as well, causing disruption or delay of product availability. These events could have a material adverseimpact on our results of operations, cash flow, and financial position.Our cash flows and capital resources may be insufficient to make required payments on our substantial indebtedness, future indebtedness, or tomaintain our required level of excess liquidity.We have a substantial amount of debt which 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 corporaterequirements;•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 flows to payments on our debt, thereby reducing the availability of our cash flows foroperations 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 obtain favorable credit terms.7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;•external factors affecting availability of credit;•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 accomplishedin part through new or additional borrowings or placements of debt or securities. There is no assurance that we could obtain additional capital or refinanceour debt on terms acceptable to us, or at all. In the event that we are required to dispose of material assets or operations to meet our debt service and otherobligations, the value realized on the disposition of such assets or operations will depend on market conditions and the availability of buyers. Accordingly,any such sale may not, among other things, be for a sufficient dollar amount. Our obligations under the revolving credit facilities are secured by a firstpriority security interest in all of our operating subsidiaries and BlueLinx Building Products Canada Ltd.’s (“BlueLinx Canada”) (for the Canadian revolvingcredit facility) inventories, accounts receivable, 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 may incur substantial additional indebtedness in the future,including under the revolving credit facilities. Our incurring additional indebtedness would intensify the risks described above.The instruments governing our indebtedness contain various covenants limiting the discretion of our management in operating our business, includingrequiring 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 forasset-based loans that limit 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.As of January 3, 2015, the U.S. revolving credit facility requires us to maintain a fixed charge coverage ratio of 1.1 to 1.0 in the event our excessavailability under the U.S. revolving credit facility falls below the greater of $33.2 million during the time the Tranche A Loan is outstanding, and $31.8million at all times thereafter; or the amount equal to 12.5% of the lesser of the borrowing base or $467.5 million during the time the Tranche A Loan isoutstanding, and $447.5 million at all times thereafter (the “Excess Availability Threshold”). If we fail to maintain this minimum excess availability, the U.S.revolving credit facility requires us to (i) maintain certain financial ratios, which we would not meet with current operating results, and (ii) limit our capitalexpenditures, which would have a negative impact on our ability to finance working capital needs and capital expenditures. If we fail to comply with the restrictions in the U.S. revolving credit facility, the Canadian revolving credit facility, the mortgage loan documents, or anyother current or future financing agreements, a default may allow the creditors under the relevant instruments to accelerate the related debts and to exercisetheir remedies under these agreements, which typically will include the right to declare the principal amount of that debt, together with accrued and unpaidinterest, and other related amounts, immediately due and payable, to exercise any remedies the creditors may have to foreclose on assets that are subject toliens securing that debt, and to terminate any commitments they had made to supply further funds.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 politicalenvironments in these countries differ from those in the U.S. Our global sourcing strategy is subject to risks and uncertainties, including changes in foreigncountry regulatory requirements; differing business practices associated with foreign operations; imposition of foreign tariffs and other trade barriers;political, legal, and economic instability; foreign8currency exchange rate fluctuations; foreign country tax rules, regulations and other requirements, such as changes in tax rates and statutory and judicialinterpretations in tax laws; inflation; differing labor laws and changes in those laws; government price controls; and work stoppages and disruptions in theshipping of imported and exported products.Our transportation operations are subject to significant governmental regulation.We use our own fleet of tractors and trailers to service customers throughout the U.S. Our transportation operations are subject to the regulatoryjurisdiction and broad administrative powers of the DOT. If we fail to comply adequately with DOT regulations or regulations become more stringent, wecould experience increased inspections, regulatory authorities could take remedial action including imposing fines or shutting down our operations or wecould be subject to increased audit and compliance costs. If any of these events were to occur, our results of operations, business, cash flow, and financialcondition would be adversely affected.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 previousowner or operator of real property, and parties that generate or transport hazardous substances that are disposed of at that real property, may be held liable forthe cost to investigate or clean up such real property, and for related damages to natural resources. We may be subject to liability, including liability forinvestigation and cleanup costs, if contamination is discovered at one of our current or former warehouse facilities, or at a landfill or other location where wehave disposed of, or arranged for the disposal of, wastes. We have an indemnification agreement with Georgia-Pacific, which has agreed to indemnify usagainst any claim arising from environmental conditions in connection with the properties we acquired when we purchased the assets of its distributiondivision on May 7, 2004. However, any remediation costs either not related to conditions existing prior to May 7, 2004 or on properties acquired after May 7,2004 may not be covered by indemnification. We also carry environmental insurance, but certain remediation costs may not be covered by insurance. Inaddition, we could be subject to claims brought pursuant to applicable laws, rules, or regulations for property damage or personal injury resulting from theenvironmental impact of our operations. Increasingly stringent environmental requirements, more aggressive enforcement actions, the discovery of unknownconditions, or the bringing of future claims may cause our expenditures for environmental matters to increase, and we may incur material costs associatedwith these matters.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. Failureby our suppliers to continue to supply us with products on commercially reasonable terms, or at all, could have a material adverse effect on our financialcondition, 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, customer relationships, geographiccoverage, and breadth of product offerings. Also, financial stability is important to suppliers and customers in choosing distributors for their products, andaffects the favorability of the terms on which we are able to obtain our products from our suppliers and sell our products to our customers.Some of our competitors are part of larger companies, and therefore have access to greater financial and other resources than those to which we haveaccess. In addition, certain product manufacturers sell and distribute their products directly to customers. Additional manufacturers of products distributed byus may elect to sell and distribute directly to end-users in the future or enter into exclusive supply arrangements with other distributors. Finally, we may notbe able to maintain our costs at a level sufficiently low for us to compete effectively. If we are unable to compete effectively, our net sales and net income willbe reduced.9A significant percentage of our employees are unionized. Wage increases or work stoppages by our unionized employees may reduce our results ofoperations.As of January 3, 2015, we employed approximately 1,700 persons. Approximately 34% of our employees were represented by various labor unioncollective bargaining agreements, of which approximately 30% are up for renewal in fiscal 2015. Although we have generally had good relations with ourunionized employees, and expect to renew collective bargaining agreements as they expire, no assurances can be provided that we will be able to reach atimely agreement as to the renewal of the agreements, and their expiration or continued work under an expired agreement, as applicable, could result in awork stoppage. In addition, we may become subject to material cost increases, or additional work rules imposed by agreements with labor unions. Theforegoing 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 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 adversely impact ourfinancial results and cash flow. We sponsor a defined benefit pension plan covering many of our hourly unionized employees. Our estimates of the amountand timing of our future funding obligations for our defined benefit pension plans are based upon various assumptions. These assumptions include, but arenot limited to, the discount rate, projected return on plan assets, compensation increase rates, mortality rates, retirement patterns, and turnover rates. Inaddition, the amount and timing of our pension funding obligations are influenced by funding requirements that are established by the Employee RetirementIncome and Security Act of 1974 (“ERISA”), the Pension Protection Act, Congressional Acts, or other governing bodies.We participate in various multi-employer pension plans in the U.S. The majority of these plans are underfunded. If, in the future, we choose to withdrawfrom these plans, we likely would need to record a withdrawal liability, which may be material to our financial results.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 monitoringand enforcing 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 financialcondition could be materially adversely affected. In addition, responding to any actions would likely result in a significant diversion of management’sattention and resources, and an increase in professional fees. Enforcement actions and sanctions could harm our business, operating results, and financialcondition.Affiliates of Cerberus control us and may have conflicts of interest with other stockholders.Cerberus Capital Management, L.P. (“Cerberus”), a private investment firm, beneficially owned approximately 53% of our common stock as ofJanuary 3, 2015. As a result, Cerberus is able to control the election of our directors, determine our corporate and management policies and determine,without the consent of our other stockholders, the outcome of most corporate transactions or other matters submitted to our stockholders for approval,including potential mergers or acquisitions, asset sales, and other significant corporate transactions. This concentrated ownership position limits otherstockholders’ ability to influence corporate matters and, as a result, we may take actions that some of our stockholders may not view as beneficial.Two of our nine directors are employees of or current advisors to Cerberus. Cerberus also has sufficient voting power to amend our organizationaldocuments. The interests of Cerberus may not coincide with the interests of other holders of our common stock. Additionally, Cerberus is in the business ofmaking investments in companies, and may, from time to time, acquire and hold interests in businesses that compete directly or indirectly with us. Cerberusmay also pursue, for its own account, acquisition opportunities that may be complementary to our business, and as a result, those acquisition opportunitiesmay not be available to us. So long as Cerberus continues to own a significant amount of the outstanding shares of our common stock, it will continue to beable to strongly influence or effectively control our decisions, including potential mergers or acquisitions, asset sales, and other significant corporatetransactions. In addition, because we are a controlled company within the meaning of the New York Stock Exchange rules, we are exempt from the NYSErequirements that our board be composed of a majority of independent directors, that our compensation committee be composed entirely of independentdirectors, and that we maintain a nominating/corporate governance committee composed entirely of independent directors.10Even if Cerberus no longer controls us in the future, certain provisions of our charter documents and agreements and Delaware law could discourage,delay, or prevent a merger or acquisition at a premium price.Our Second Amended and Restated Certificate of Incorporation and Amended and Restated Bylaws contain provisions that:•permit us to issue, without any further vote or action by the stockholders, up to 30 million shares of preferred stock in one or more series and,with respect to each series, to fix the number of shares constituting the series and the designation of the series, the voting powers (if any) ofthe shares of such series, and the preferences and other special rights, if any, and any qualifications, limitations or restrictions, of the shares ofthe 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 certainrestrictions on mergers and other business combinations between us and any holder of 15% or more of our common stock. Further, certain of our incentiveplans provide for vesting of stock options and/or payments to be made to our employees in connection with a change of control, which could discourage,delay or prevent a merger or acquisition at a premium price.We are subject to information technology security risks and business interruption risks, and may incur increasing costs in an effort to minimize thoserisks.Our business employs information technology systems and a website that allow for the secure storage and transmission of customers’ proprietaryinformation. We also employ information technology systems to secure other confidential information, such as employee data. Security breaches couldexpose 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.Additionally, our business is reliant upon information technology systems to place orders with our vendors and process orders from our customers.Disruption in these systems could materially impact our ability to buy and sell our products.ITEM 1B. UNRESOLVED STAFF COMMENTSNone.ITEM 2. PROPERTIESWe operate our business out of 49 warehouse facilities. Additionally, two owned properties are held for sale, in Newtown, Connecticut, and Shreveport,Louisiana; and our leased Stockton, California property, is being marketed for sublease. The total square footage under roof at our owned warehouses isapproximately 9.3 million square feet. Certain of our owned warehouse facilities secure our mortgage loan. The following table summarizes our real estatefacilities including their inside square footage:Property TypeNumber OwnedFacilities(sq. ft.) LeasedFacilities(sq. ft.)Office Space (1)3 — 167,308Warehouses and other real property52 9,257,366 340,600TOTAL55 9,257,366 507,908(1)Includes corporate headquarters in Atlanta, and sales centers in Denver and Vancouver.We also store materials, such as lumber and rebar, outdoors at all of our warehouse locations, which increases warehouse distribution and storagecapacity. We believe that substantially all of our property and equipment is in good condition, subject to normal wear and tear. We believe that our facilitieshave sufficient capacity to meet current and projected distribution needs.11ITEM 3. LEGAL PROCEEDINGSWe 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. Legal expenses incurred related to these contingencies generally are expensed as incurred. We establish reserves forpending or threatened proceedings when the costs associated with such proceedings become probable and reasonably can be estimated. ITEM 4. MINE SAFETY DISCLOSURESNot applicable.12PART II ITEM 5. MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITYSECURITIESOur equity securities consist of one class of common stock, which 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 LowFiscal Year Ended January 3, 2015 First Quarter$1.96 $1.25Second Quarter$1.47 $1.07Third Quarter$1.39 $1.11Fourth Quarter$1.35 $1.11Fiscal Year Ended January 4, 2014 First Quarter$3.48 $2.42Second Quarter$3.10 $1.90Third Quarter$2.29 $1.56Fourth Quarter$2.14 $1.57As of February 19, 2015, there were 44 shareowner accounts of record, and, as of that date we estimate there were approximately 2,200 beneficial ownersholding our common stock in nominee or “street” name.We do not pay dividends on our common stock. Future dividend payments, if dividends are declared at a future date, are subject to contractualrestrictions under our U.S. revolving credit facility.13Performance GraphThe 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 S&P 1500 Building Products Index for the period commencing January 2, 2010, and ending January 3, 2015, assumingan investment of $100 and the reinvestment of dividends (if any).Cumulative Total ReturnYears Ending Base Period Company Name/Index1/2/2010 1/1/2011 12/31/2011 12/29/2012 1/4/2014 1/3/2015BlueLinx Holdings Inc. $100 $132.13 $68.25 $127.86 $100.97 $59.34Russell 2000 Index$100 $126.85 $121.56 $138.56 $195.07 $204.94S&P 1500 Building Products Index$100 $107.38 $93.42 $137.26 $208.72 $223.7614ITEM 6. SELECTED FINANCIAL DATAThe following tables sets forth certain historical financial data of our Company. The selected financial data for the fiscal years ended January 3, 2015,January 4, 2014, December 29, 2012, December 31, 2011, and January 1, 2011, have been derived from our audited financial statements included elsewherein this Annual Report on Form 10-K, or from prior financial statements. The following information should be read in conjunction with our financialstatements and “Management’s Discussion and Analysis of Financial Condition and Results of Operations.” Year EndedJanuary 3,2015 Year EndedJanuary 4,2014 Year EndedDecember 29,2012 Year EndedDecember 31,2011 Year EndedJanuary 1,2011 (In thousands, except per share data)Statements of Operations Data: Net sales$1,979,393 $2,151,972 $1,907,842 $1,755,431 $1,804,418Net income (loss)$(13,872) $(40,618) $(23,027) $(38,567) $(53,243)Per Share Data: Basic net income (loss) per share applicable to common stock$(0.16) $(0.51) $(0.35) $(0.82) $(1.59)Diluted net income (loss) per share applicable to common stock$(0.16) $(0.51) $(0.35) $(0.82) $(1.59)Other Financial Data: EBITDA (1)22,684 (12,490) 14,081 1,791 (11,099)Adjusted EBITDA (1)24,583 1,324 6,028 (8,181) (10,138)Balance Sheet Data (at end of period): Cash and cash equivalents$4,522 $5,034 $5,188 $4,898 $14,297Working capital297,652 294,899 272,403 233,414 236,168Total assets538,982 528,489 542,451 501,282 525,019Total debt (2)413,976 405,077 381,498 338,384 384,256Stockholders’ equity (deficit)(36,026) (5,898) (20,592) 8,374 $991 (1)EBITDA is an amount equal to net income (loss) plus interest expense and all interest expense related items (e.g. write-off of debt issuance costs,charges associated with mortgage refinancing), income taxes, and depreciation and amortization. Adjusted EBITDA is an amount equal to netincome (loss) plus interest expense and all interest expense related items (e.g. write-off of debt issuance costs, charges associated with mortgagerefinancing), income taxes, depreciation and amortization, and further adjusted to exclude non-cash items and certain other adjustments toConsolidated Net Income (Loss). We present EBITDA and Adjusted EBITDA because they are important measures used by management toevaluate operating performance and helps to enhance investors’ overall understanding of the financial performance of our business. However,EBITDA and Adjusted EBITDA are not presentations made in accordance with accounting principles generally accepted in the United States(“GAAP”), and are not intended to present a superior measure of the financial condition from those determined under GAAP. EBITDA andAdjusted EBITDA, as used herein, are not necessarily comparable to other similarly titled captions of other companies due to differences inmethods of calculation.We believe EBITDA and Adjusted EBITDA are helpful in highlighting operating trends. We further believe that EBITDA and AdjustedEBITDA are frequently used by securities analysts, investors, and other interested parties in their evaluation of companies, many of whichpresent an EBITDA or Adjusted EBITDA measure when reporting their results. We compensate for the limitations of using non-GAAP financialmeasures by using them to supplement GAAP results to provide a more complete understanding of the factors and trends affecting the businessthan using GAAP results alone.(2)Total debt represents long-term debt related to our mortgage and revolving credit facilities, including current maturities and capital leaseobligations.15A reconciliation of net income (loss) to EBITDA and Adjusted EBITDA for each of the respective periods indicated is as follows: Year EndedJanuary 3,2015 Year EndedJanuary 4,2014 Year EndedDecember 29,2012 Year EndedDecember 31,2011 Year EndedJanuary 1,2011 (In thousands)Net income (loss)$(13,872) $(40,618) $(23,027) $(38,567) $(53,243)Interest expense26,771 28,024 28,157 28,834 29,368Provision for (benefit from) income taxes312 (9,013) 386 962 (589)Depreciation and amortization9,473 9,117 8,565 10,562 13,365EBITDA (1)22,684(12,490)14,0811,791(11,099)Gain on sale of properties(5,251) (5,220) (9,885) (10,604) —Share-based compensation expense, excluding restructuring2,351 3,222 2,797 1,974 3,978Restructuring, severance, debt fees, and other4,799 12,123 — 1,382 1,092Loss (gain) from closed distribution centers— 3,689 (489) 477 (1,933)Gain from insurance settlement— — (476) (1,230) —Gain from modification of lease agreement— — — (1,971) —OSB lawsuit settlement gain— — — — (5,206)Tender offer expenses— — — — 3,030Adjusted EBITDA (1)$24,583$1,324$6,028$(8,181)$(10,138) (1)See above regarding calculation and presentation of EBITDA and Adjusted EBITDA.ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONSThe following discussion should be read in conjunction with our consolidated financial statements and related notes and other financial informationappearing elsewhere in this Form 10-K. In addition to historical information, the following discussion and other parts of this Form 10-K contain forward-looking information that involves risks and uncertainties. Our actual results could differ materially from those anticipated by this forward-lookinginformation due to the factors discussed under “Risk Factors,” “Cautionary Statement Concerning Forward-Looking Statements”, and elsewhere in thisForm 10-K. Executive Level OverviewCompany BackgroundBlueLinx is a leading distributor of building products in North America. With a combination of market position and coverage, the strength of a local andnational sales force, the buying power of centralized procurement, and the efficiencies of centralized accounting and systems technologies, BlueLinx is ableto provide a wide range of value-added services and solutions to our customers and suppliers.Industry ConditionsMany of the factors that cause our operations to fluctuate are seasonal or cyclical in nature. Conditions in the U.S. housing market continue to be athistorically low levels. Nevertheless, we believe that the housing recovery is progressing, and that U.S. housing demand will improve in the long term.16Factors That Affect Our Operating ResultsOur results of operations and financial performance are influenced by a variety of factors, including the following:•changes in the prices, supply and/or demand for products which we distribute;•inventory management and commodities pricing;•new housing starts and inventory levels of existing homes for sale;•general economic and business conditions in the U.S.;•acceptance by our customers of our privately branded products;•financial condition and credit worthiness of our customers;•continuation of supply from our key vendors;•reliability of the technologies we utilize;•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;•adverse weather patterns or conditions;•acts of cyber intrusion;•variations in the performance of the financial markets, including the credit markets; and•risk factors discussed under Item 1A Risk Factors and elsewhere in this Annual Report on Form 10-K.Key Business MetricsNet SalesNet sales result primarily from the distribution of products to dealers, industrial manufacturers, manufactured housing producers, and home improvementretailers. All revenues recognized are net of trade allowances, cash discounts, and sales returns. In addition, we provide inventory to certain customersthrough pre-arranged agreements on a consignment basis. When the consigned inventory is sold by the customer, we recognize revenue on a gross basis. Netsales may not be comparable year-over-year due to closed facilities, fiscal calendar weeks in the year, and market-driven fluctuations in the prices of theinventories we sell.Gross ProfitGross profit primarily represents revenues less the product cost from our suppliers (net of earned rebates and discounts), including the cost of inboundfreight. The cost of outbound freight, purchasing, receiving, and warehousing are included in selling, general, and administrative expenses within operatingexpenses. Our gross profit may not be comparable to that of other companies, as other companies may include all or some of the costs related to theirdistribution network in cost of sales. Market price fluctuations, particularly on structural products vulnerable to commodity price variability, may impact ourgross profit.Adjusted EBITDAAdjusted EBITDA is an amount equal to net income (loss) plus interest expense and all interest expense related items (e.g., write-off of debt issuancecosts, charges associated with mortgage refinancing), income taxes, depreciation and amortization, and further adjusted to exclude non-cash items and certainother adjustments to Consolidated Net Income (Loss). We present Adjusted EBITDA because it is a primary measure used by management to evaluateoperating performance and helps to enhance investors’ overall understanding of the financial performance of our business. However, Adjusted EBITDA is nota presentation made in accordance with GAAP, and is not intended to present a superior measure of the financial condition from those determined underGAAP. Adjusted EBITDA, as used herein, is not necessarily comparable to other similarly titled captions of other companies due to differences in methods ofcalculation.We believe Adjusted EBITDA is helpful in highlighting operating trends. We further believe that Adjusted EBITDA is frequently used by securitiesanalysts, investors and other interested parties in their evaluation of companies, many of which present an Adjusted EBITDA measure when reporting theirresults. We compensate for the limitations of using non-GAAP financial measures by using them to supplement GAAP results to provide a more completeunderstanding of the factors and trends affecting the business than using GAAP results alone.17Results of OperationsFiscal 2014 Compared to Fiscal 2013 The following table sets forth our results of operations for fiscal 2014 and fiscal 2013. Fiscal 2014 contained 52 weeks, and fiscal 2013 contained 53weeks. Fiscal 2014 % ofNetSales Fiscal 2013 % ofNetSales (Dollars in thousands)Net sales $1,979,393 100.0 % $2,151,972 100.0 %Gross profit229,104 11.6 % 228,483 10.6 %Selling, general, and administrative206,095 10.4 % 240,667 11.2 %Depreciation and amortization9,473 0.5 % 9,117 0.4 %Operating (loss) income13,536 0.7 % (21,301) (1.0)%Interest expense, net26,771 1.4 % 28,024 1.3 %Other expense (income), net 325 — % 306 — %Loss before (benefit from) provision for income taxes(13,560) (0.7)% (49,631) (2.3)%(Benefit from) provision for income taxes312 — % (9,013) (0.4)%Net income (loss)$(13,872) (0.7)% $(40,618) (1.9)% The following table sets forth changes in net sales by product category, sales variances due to changes in unit volume, and dollar and percentagechanges in unit volume and price versus comparable prior periods. Certain prior year amounts have been reclassified to conform to the current year productmix of structural and specialty products. Fiscal 2014 Fiscal 2013 (Dollars in millions)Sales by category Structural products$831 $966Specialty products1,169 1,202Other (1)(21) (16)Total sales$1,979 $2,152Sales variances $ Unit volume $ change$(90) $182Price/other (2)(83) 62Total $ change$(173) $244Sales variances % Unit volume % change(4.3)% 10.0%Price/other % change (1)(3.7)% 2.8%Total % change(8.0)% 12.8%(1)“Other” includes unallocated allowances and discounts.(2)“Other” includes unallocated allowances, discounts, and the impact of unit volume changes related to the five distribution centers closed as partof the restructuring activities in fiscal 2013 (the “2013 restructuring”).18The following table sets forth changes in gross margin dollars and percentages by product category, and percentage changes in unit volume growth byproduct, versus comparable prior periods. Certain prior year amounts have been reclassified to conform to the current year product mix of structural andspecialty products. Fiscal 2014 Fiscal 2013 (Dollars in millions)Gross Profit $ by category Structural products$69 $69Specialty products156 155Other (1)4 4Total gross profit$229 $228Gross margin % by category Structural products8.3 % 7.2%Specialty products13.4 % 12.9%Total gross margin %11.6 % 10.6%Unit volume % change by product (2) Structural products(9.9)% 12.2%Specialty products0.1 % 8.4%Total unit volume % change(4.3)% 10.0%(1)“Other” includes unallocated allowances and discounts.(2)Excludes the impact of unit volume changes related to the five distribution centers closed as part of the 2013 restructuring.Net sales. Net sales decreased by 8.0%, or $172.6 million, from $2.2 billion in fiscal 2013 to $2.0 billion in fiscal 2014. This decrease was primarilyrelated to the $85.6 million impact of the five distribution centers closed as part of the 2013 restructuring and the $19.2 million impact from fiscal 2013containing 53 weeks versus 52 weeks in fiscal 2014. In addition, the Company focused on the profitability of every sale, and pursued low profit structuralbusiness less aggressively. As a result, structural unit volumes were down approximately $83.0 million for the year, partially offset by unit volume increasesin specialty products.Gross profit. Total gross profit for fiscal 2014 was $229.1 million, or 11.6% of sales, compared to $228.5 million and 10.6% in fiscal 2013. The increasein gross profit primarily was due to an improvement in the gross margin of structural products. Structural products were 42.0% of sales in fiscal 2014, and45.0% of sales in fiscal 2013. Structural gross margin percentage increased 110 basis points year over year to 8.3% in fiscal 2014 from 7.2% in fiscal2013. Specialty gross margin percentage improved 50 basis points year over year to 13.4% in fiscal 2014 from 12.9% in fiscal 2013.Selling, general, and administrative. Selling, general, and administrative expenses for fiscal 2014 were $206.1 million, or 10.4% of net sales, comparedto $240.7 million, or 11.2% of net sales, during fiscal 2013. The decrease in selling, general, and administrative expenses primarily was due to cost controlmeasures implemented in fiscal 2014, including cost savings realized from fiscal 2013 restructuring efforts of $3.3 million in fiscal 2014. Payroll,commissions, and incentives decreased year over year by $16.3 million. Third party freight improved by $3.4 million, of which $2.3 million is specificallyrelated to discontinued operations, and the remaining $1.1 million improvement is driven by lower sales volume and cost control efforts. Additionally, baddebt expense improved by $1.6 million due to continued favorable accounts receivable performance.Interest expense, net. Interest expense for fiscal 2014 was $26.8 million compared to $28.0 million for fiscal 2013. The decrease of $1.2 million relates toa decrease in interest expense related to our mortgage, due to principal payments on the mortgage. Although borrowings on the U.S. revolving credit facilityincreased by a net $18.4 million during fiscal 2014, a decline in interest rates resulted in interest expense on the U.S. revolving credit facility remaining flatfrom fiscal 2013 to fiscal 2014, at approximately $11.4 million for both years.Provision for (benefit from) income taxes. Our effective tax rate was (2.3)% and 18.2% for fiscal 2014 and fiscal 2013, respectively. The effective tax ratefor fiscal 2014 largely is due to a full valuation allowance recorded against our tax benefit related to our fiscal 2014 loss. The effective tax rate for fiscal 2013largely is due to a full valuation allowance recorded against our tax benefit and an allocation of income tax expense to other comprehensive income (loss) foran actuarial gain associated with our pension plan which resulted in a benefit to continuing operations. The effect of the valuation allowance for fiscal 2014and fiscal 2013 was offset by state income taxes, gross receipts taxes, and foreign income taxes recorded on a separate company basis partially offset byvarious refundable tax credits. 19Fiscal 2013 Compared to Fiscal 2012The following table sets forth our results of operations for fiscal 2013 and fiscal 2012. Fiscal 2013 contained 53 weeks, and fiscal 2012 contained 52weeks. Fiscal 2013 % ofNetSales Fiscal 2012 % ofNetSales (Dollars in thousands)Net sales $2,151,972 100.0 % $1,907,842 100.0 %Gross profit228,483 10.6 % 230,070 #VALUE!Selling, general, and administrative240,667 11.2 % 215,996 11.3 %Depreciation and amortization9,117 0.4 % 8,565 0.4 %Operating (loss) income(21,301) (1.0)% 5,509 0.3 %Interest expense, net28,024 1.3 % 28,157 1.5 %Other expense (income), net 306 — % (7) — %Loss before (benefit from) provision for income taxes(49,631) (2.3)% (22,641) (1.2)%(Benefit from) provision for income taxes(9,013) (0.4)% 386 — %Net income (loss)$(40,618) (1.9)% $(23,027) (1.2)% 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 versus comparable prior periods. Certain prior year amounts have been reclassified to conform to the current year product mix ofstructural and specialty products. Fiscal 2013 Fiscal 2012 (Dollars in millions)Sales by category Structural products$966 $804Specialty products1,202 1,112Other (1)(16) (8)Total sales$2,152 $1,908Sales variances $ Unit volume $ change$182 $42Price/other (2)62 111Total $ change$244 $153Sales variances % Unit volume % change10.0% 2.5%Price/other % change (1)2.8% 6.2%Total % change12.8% 8.7%(1)“Other” includes unallocated allowances and discounts.(2)“Other” includes unallocated allowances, discounts, and the impact of unit volume changes related to the five distribution centers closed as partof the 2013 restructuring.20The following table sets forth changes in gross profit dollars and gross margin percentages by product category, and percentage changes in unit volumegrowth by product, versus comparable prior periods. Certain prior year amounts have been reclassified to conform to the current year product mix of structuraland specialty products. Fiscal 2013 Fiscal 2012 (Dollars in millions)Gross Profit $ by category Structural products$69 $77Specialty products155 146Other (1)4 7Total gross profit$228 $230Gross margin % by category Structural products7.2% 9.5%Specialty products12.9% 13.2%Total gross margin %10.6% 12.1%Unit volume % change by product (2) Structural products12.2% 0.8%Specialty products8.4% 3.6%Total unit volume % change10.0% 2.5%(1)“Other” includes unallocated allowances and discounts.(2)Excludes the impact of unit volume changes related to the five distribution centers closed as part of the 2013 restructuring.Net sales. For fiscal year 2013, net sales increased by 12.8%, or $244.1 million, to $2.2 billion. Sales during the fiscal year were positively impacted by a15.5% increase in single family housing starts. Structural sales increased by $162.1 million, or 20.2% from 2012, as a result of a 10.1% increase in structuralproduct prices and a 12.2% increase in unit volume. In addition, specialty sales increased $86.0 million, or 7.7% from 2012, as a result of a 8.4% increase inunit volume and a 0.6% increase in specialty product prices.Gross profit. Gross profit for fiscal 2013 was $228.5 million, or 10.6% of sales, compared to $230.1 million and #VALUE! 2012. Declines in grossmargin were driven by volatility in wood-based structural product pricing, primarily during the second quarter of fiscal 2013. The declines in gross marginfurther were impacted by a greater percentage of our sales being comprised of lower gross margin structural products. In addition, we experienced lowermargin sales as we sold through inventory at the five distribution centers we closed during the third quarter of fiscal 2013.Selling, general, and administrative. Selling, general, and administrative expenses for fiscal 2013 were $240.7 million, or 11.2% of net sales, comparedto $216.0 million, or 11.3% of net sales, during fiscal 2012. The increase in selling, general, and administrative expenses primarily was due to $11.2 millionof restructuring and other charges associated with the fiscal 2013 restructuring and a change in executive leadership. During fiscal 2013 there were alsoincreases in third party freight, professional fees, and general maintenance and supplies of $2.3 million, $1.9 million, and $1.3 million, respectively. Thesechanges were partially offset by a decrease in payroll of $1.2 million related to a reduced headcount from the 2013 restructuring and change in executiveleadership. The gain recorded in selling, general and administrative expenses during fiscal 2013 was a $5.2 million gain on sales of properties. During fiscal 2012,other gains recorded in selling, general, and administrative expenses were comprised primarily of $9.9 million in gain on sales of properties. The increases tothird party freight and general maintenance and supplies largely are due to the increase in revenue during fiscal 2013. The increase in professional fees relatesto certain non-recurring activities requiring the services of various professionals. These activities included capital raising initiatives, freeze of the non-unionparticipants in the pension plan, contribution of certain real properties to the pension plan, and the waiver process for the 2012 minimum requiredcontribution of the pension plan.Provision for (benefit from) income taxes. Our effective tax rates were 18.2% and (1.7)% for fiscal 2013 and fiscal 2012, respectively. The effective taxrate for fiscal 2013 largely is due to a full valuation allowance recorded against our tax benefit and an allocation of income tax expense to othercomprehensive income (loss) for an actuarial gain associated with our pension plan resulting in a benefit to continuing operations. The main driver of theactuarial pension gain is an increase in the market value of the underlying assets and a decrease in the pension liability resulting largely from the change inthe underlying21discount rate assumption, which increased from 4.24% in fiscal 2012 to 5.00% in fiscal 2013. The effective tax rate for fiscal 2012 largely is due to a fullvaluation allowance recorded against our tax benefit related to our fiscal 2012 loss. Liquidity and Capital ResourcesWe expect our primary sources of liquidity to be cash flows from sales in the normal course of our operations, and borrowings under our revolving creditfacilities, and we expect that these sources will fund our ongoing cash requirements for the foreseeable future. As the Company’s revenue performanceimproves as expected, increases in inventory to meet demand and resulting increases in accounts receivable from sales may cause the excess availability todecrease. While the Company believes that the amounts currently available from its revolving credit facilities and other sources would be sufficient to fundits routine operations and working capital requirements for at least the next 12 months, the Company believes that additional working capital will provide itwith a stronger liquidity position and allow it to more fully participate in the improving housing market.Sources and Uses of CashOperating ActivitiesDuring fiscal 2014, cash flows used in operating activities totaled $12.3 million. The primary driver of cash flows used in operations was a net loss of$13.9 million, which included non-cash charges of $7.3 million, a decrease in receivables of $5.8 million, and an increase in inventories of $19.0 million.These changes were partially offset by an increase in accounts payable of $7.0 million. Our cash flows used in operations continue to improve year over year,as 2014 cash flows from operating activities improved by $27.6 million compared to the fiscal 2013 cash used in operations of $39.9 million, which largelywere driven by a net loss of $40.6 million. Cash used in operations in fiscal 2012 was $74.3 million, which was primarily a result of large increases inaccounts receivable and inventories during that year, of $18.6 million and $44.5 million, respectively.Investing ActivitiesDuring fiscal 2014, our net cash provided by investing activities was $4.4 million, which included expenditures for property and equipment ofapproximately $3.0 million, and proceeds from the disposition of property and equipment of $7.4 million, which included $6.9 million related to the sale ofthe Portland, Oregon distribution center. The fiscal 2014 expenditures were primarily to purchase information technology, leasehold improvements, andcertain machinery and equipment. The majority of our capital expenditures for fiscal 2014 and 2013 have been and likely will continue to be paid from ourU.S. revolving credit facility. In fiscal 2015, we intend to make additional investments in information technology for our sales force. Additionally, we intendto lease additional vehicles under capital leases with a third party leasing company as part of our efforts to continually replenish our fleet.During fiscal 2013 and 2012, net cash provided by investment activities of $5.5 million and $16.4 million, respectively, substantially were driven by thesale of real properties.Financing ActivitiesNet cash provided by financing activities was $7.4 million during fiscal 2014, which primarily reflected net borrowings on our revolving credit facilitiesof $18.3 million and an increase in bank overdrafts of $7.9 million, offset by payments of principal on our mortgage of $9.2 million, and payments toincrease restricted cash related to the mortgage of $6.1 million.Working CapitalWorking capital is an important measurement used in determining the efficiencies of our operations and our ability to readily convert assets into cash.The material components of working capital for us include accounts receivable, inventory, accounts payable, bank overdrafts, and the current portion of ourlong-term debt. Working capital management helps to ensure the organization can maximize our return and continue to invest in the operations for futuregrowth.Our working capital requirements reflect the seasonal nature of our business. Working capital decreased by $2.8 million to $297.7 million as of January3, 2015, from $294.9 million as of January 4, 2014. The decrease in working capital primarily reflected a decrease in the current maturities of long-term debtof $6.5 million, an increase in bank overdrafts of $7.9 million, an increase in accounts payable of $6.9 million and an increase in inventories of $19.0million; offset by a decrease of $5.8 million in accounts receivable. We anticipate the current portion of long-term debt component of the working capitalcalculation to continue to fluctuate on a seasonal basis.22Debt and Credit SourcesOn August 4, 2006, we entered into our U.S. revolving credit facility, as later amended, with several lenders including Wells Fargo Bank, NationalAssociation. The U.S. revolving credit facility has a final maturity of April 15, 2016, and maximum available credit of $467.5 million, which includesthe $20.0 million Tranche A Loan, the maturity date of which is described below. The U.S. revolving credit facility also includes an additional $75.0 millionuncommitted accordion credit facility, which permits us to increase the maximum available credit up to $542.5 million. Amounts outstanding under the U.S.revolving credit facility are secured on a first priority basis, by substantially all of our personal property and trade fixtures, including all accounts receivable,general intangibles, inventory, and equipment.On August 14, 2014, we amended our U.S. revolving credit facility, extending the final maturity date of the Tranche A Loan to June 30, 2015, andadjusting the credit limits of the loan to step down the available credit by $2.0 million per month beginning April 1, 2015, unless the principal paymentscause excess availability to become less than $50.0 million, or an event of default exists.As of January 3, 2015, we had outstanding borrowings of $225.6 million and excess availability of $58.5 million under the terms of the U.S. revolvingcredit facility. The interest rate on the U.S. revolving credit facility was 3.9% at January 3, 2015. Our subsidiary BlueLinx Canada has the Canadian revolving credit facility with Canadian Imperial Bank of Commerce due upon the the earlier ofAugust 12, 2016, or the maturity date of the U.S. revolving credit facility. The Canadian revolving credit facility has a maximum available credit of $10.0million. The Canadian revolving credit facility also provides for an additional $5.0 million uncommitted accordion credit facility, which permits us toincrease the maximum available credit up to $15.0 million.As of January 3, 2015, we had outstanding borrowings of $4.0 million and excess availability of $1.0 million under the terms of our Canadian revolvingcredit facility. The interest rate on the Canadian revolving credit facility was 4.0% at January 3, 2015.Our U.S. and Canadian revolving credit facilities contain customary negative covenants and restrictions for asset based loans. The only covenant wedeem material is a requirement that we maintain a fixed charge coverage ratio of 1.1 to 1.0 in the event our excess availability under the U.S. revolving creditfacility falls below the greater of $33.2 million during the time the Tranche A Loan is outstanding, and $31.8 million at all times thereafter; or the amountequal to 12.5% of the lesser of the borrowing base or $467.5 million during the time the Tranche A Loan is outstanding, and $447.5 million at all timesthereafter. We do not anticipate that our excess availability will drop below the Excess Availability Threshold as defined in the U.S. revolving credit facilityin the foreseeable future; however, if we did fall below this threshold, we currently would not meet the required fixed charge coverage ratio. We are incompliance with all covenants under these revolving credit facilities.Under the terms of our mortgage, as amended, we are required to transfer certain funds to be held as collateral. Any cash remaining in the collateralaccount under the mortgage agreement, up to an aggregate of $10.0 million, was released to the Company on the last business day of each calendar quarter,up to the third quarter of fiscal 2014. All funds released pursuant to these provisions could only be used by the Company to pay for usual and customaryoperating expenses. During the periods in which cash in the collateral account is used for certain activities, such as prepayment of indebtedness under themortgage agreement, the lenders would not release any of the cash collateral to the Company for specified capital expenditures as previously provided underthe mortgage agreement. During the second quarter of fiscal 2014, we sold our closed facility in Portland, Oregon, and used the $6.9 million received, whichrepresents the required release price related to the property, to pay down the outstanding principal of the mortgage without penalty. Approximately $6.1million of cash held in collateral was released to the Company through the second quarter of 2014 to pay for usual and customary operating expenses. TheCompany will not receive any additional collateral releases. Under the terms of our mortgage agreement, we estimate that we will transfer approximately$13.3 million into the mortgage escrow as collateral during the next twelve month period.During 2015, the Company plans to refinance the mortgage which carries a prepayment penalty of approximately $1.0 million per month until December31, 2015.On February 18, 2015, we refinanced our U.S. revolving credit facility, including the Tranche A Loan, with the Tenth Amendment to the U.S. revolvingcredit facility (the “Tenth Amendment”).The Tenth Amendment extends the maturity date of the U.S. revolving credit facility to April 15, 2017; requires the refinancing, extension orreplacement of our current mortgage on or before May 1, 2016, such that the maturity date of the new mortgage facility is not sooner than July 15, 2017; andrequires the repayment of not less than $35 million by May 1, 2016.23Additionally, the Tenth Amendment extends the maturity date of the Tranche A Loan to June 30, 2016, with the principal amount decreasing by $2.0million each month beginning on April 1, 2016, but such step downs will not occur if, after giving effect to the applicable reduction, excess availability (asdefined, see Note 6) will be less than $50.0 million; amends the interest rate for the Tranche A Loan to begin increasing by .25 each 90 days, beginning onApril 1, 2015, with a maximum increase of 1; and, while the Tranche A Loan is outstanding, increases our fixed charge coverage ratio to 1.2 to 1.0 in certainsituations.Pension Funding ObligationsWe currently are required to make four quarterly cash contributions during fiscal 2015 and 2016 of approximately $1.5 million related to our 2015minimum required contribution, which totals $6.1 million. In 2013, the Company contributed real property to the pension plan to satisfy minimumcontribution requirements; and the Company had also, in 2012, obtained a funding waiver for that plan year, which will be repaid over a successive five-yearperiod, through 2017, with principal and interest payments totaling $0.7 million each year. The Company continues to evaluate pension funding obligationsand requirements in order to meet our obligations while maintaining flexibility for working capital requirements. See Item 8, Note 9, which is incorporatedherein by reference.Contractual CommitmentsThe following table represents our contractual commitments associated with our debt and other obligations disclosed above as of the fiscal year end ofeach year set forth below: 20152016201720182019ThereafterTotal (In thousands)Revolving credit facilities (1)$20,000$209,513$—$—$—$—$229,513Mortgage indebtedness2,678175,044————177,722Interest payments on our revolving credit facilities (2)8,2802,247————10,527Interest payments on our mortgage12,3275,602————17,929Subtotal43,285392,406————435,691Operating leases5,7295,4705,3104,8391,79910,27333,420Capital leases2,0481,9931,4991,5636922288,023Interest payments on our capital leases4633212111122981,144Fuel purchase obligation (3)6,308—————6,308Pension benefits to be paid to participants5,3995,7056,0006,2816,49135,58165,457Total$63,232$405,895$13,020$12,795$9,011$46,090$550,043(1)Payments for both the U.S. and Canadian revolving credit facilities are included.(2)Interest rates on the revolving credit facilities are variable, based on LIBOR or prime plus the applicable margin. The interest rates on the U.S.revolving credit facility and the Canadian revolving credit facility were 3.9% and 4.0%, respectively, as of January 3, 2015. The final maturity dateboth on our U.S. and Canadian revolving credit facilities is April 15, 2016.(3)Purchase obligations include agreements to purchase goods that are enforceable and legally binding on us and that specify all significant terms,including fixed or minimum quantities to be purchased; fixed, minimum or variable price provisions; and the approximate timing of the transaction.See Note 14.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 accruedliabilities.Off-Balance Sheet ArrangementsAs of January 3, 2015, we did not have any material off-balance sheet arrangements.24Critical Accounting PoliciesOur consolidated financial statements are prepared in accordance with accounting principles generally accepted in the U.S, which require management tomake estimates, judgments and assumptions that affect the amounts reported in the consolidated financial statements and accompanying notes. We believethat our most critical accounting policies and estimates relate to (1) revenue recognition; (2) defined benefit pension plans; and (3) income taxes.Management has discussed the development, selection and disclosure of critical accounting policies and estimates with the Audit Committee of theCompany’s Board of Directors. While our estimates and assumptions are based on our knowledge of current events and actions we may undertake in thefuture, actual results ultimately may differ from these estimates and assumptions. For a discussion of the Company’s significant accounting policies, refer tothe Notes to the Consolidated Financial Statements in Item 8, which is incorporated herein by reference.Revenue RecognitionWe recognize revenue when persuasive evidence of an arrangement exists, delivery of products has occurred, the sales price is fixed or determinable andcollectability is reasonably assured. For us, this generally means that we recognize revenue when title to our products is transferred to our customers. Titleusually transfers upon shipment to or receipt at our customers’ locations, as determined by the specific sales terms of each transaction. Our customers can earncertain incentives including, but are not limited to, cash and functional discounts. In preparing the financial statements, management must make estimatesrelated to the contractual terms, customer performance and sales volume to determine the total amounts recorded as deductions from revenue. Managementalso considers past results in making such estimates. The actual amounts ultimately paid may be different from our estimates, and recorded once they havebeen determined.Pension Plan ValuationWe sponsor and contribute to a defined benefit pension plan covering some of our unionized employees. Additionally, certain unionized employeesparticipate in multi-employer pension plans. Management is required to make certain critical estimates related to actuarial assumptions used to determine ourpension expense and related obligation. We believe the most critical assumptions are related to (1) the discount rate used to determine the present value ofthe liabilities and (2) the expected long-term rate of return on plan assets. All of our actuarial assumptions are reviewed annually. Changes in theseassumptions could have a material impact on the measurement of our pension expense and related obligation. At each measurement date, we determine thediscount rate by reference to rates of high-quality, long-term corporate bonds that mature in a pattern similar to the future payments we anticipate makingunder the plan. As of January 3, 2015, and January 4, 2014, the weighted-average discount rate used to compute our benefit obligation was 4.19% and 5.0%,respectively. The expected long-term rate of return on plan assets is based upon the long-term outlook of our investment strategy as well as our historicalreturns and volatilities for each asset class. We also review current levels of interest rates and inflation to assess the reasonableness of our long-term rates. Ourpension plan investment objective is to ensure our plan has sufficient funds to meet its benefit obligations when they become due. As a result, the Companyperiodically revises asset allocations, where appropriate, to improve returns and manage risk. The weighted-average expected long-term rate of return used tocalculate our pension expense was 7.85% percent in fiscal years 2014 and 2013. The impact of a 0.25% change in these critical assumptions is as follows:Change in AssumptionEffect on 2015 Pension ExpenseEffect on Accrued Pension Liability at January 3,2015 (In thousands)0.25% decrease in discount rate744,1180.25% increase in discount rate(74)(3,905)0.25% decrease in expected long-term rate of return on assets202—0.25% increase in expected long-term rate of return on assets(202)—As of January 3, 2015, the Company determined that almost all of the participants in the pension plan were inactive. Accordingly, beginning in fiscal2015, and subsequent periods, the Company will begin amortizing actuarial gains and losses over the estimated average remaining life expectancy of theinactive participants, rather than the estimated average remaining service period of the active participants. The impact of this change will reduce net pensionexpense by approximately $3.2 million in fiscal 2015.25Additionally, for fiscal 2015, and subsequent years, the Company adopted the most recent mortality tables issued by the Society of Actuaries, the RP-2014 mortality tables with blue-collar adjustment.The sensitivity analysis presented, above, reflects these updated assumptions.Income TaxesOur annual tax rate is based on our income, statutory tax rates and tax planning opportunities available to us in the various jurisdictions in which weoperate. Significant judgment is required in determining our annual tax expense and in evaluating our tax positions. We establish reserves to remove some orall of the tax benefit of any of our tax positions at the time we determine that the positions become uncertain based upon one of the following: (1) the taxposition is not “more likely than not’’ to be sustained, (2) the tax position is “more likely than not’’ to be sustained, but for a lesser amount, or (3) the taxposition is “more likely than not’’ to be sustained, but not in the financial period in which the tax position was originally taken. For purposes of evaluatingwhether or not a tax position is uncertain, (1) we presume the tax position will be examined by the relevant taxing authority that has full knowledge of allrelevant information, (2) the technical merits of a tax position are derived from authorities such as legislation and statutes, legislative intent, regulations,rulings and case law and their applicability to the facts and circumstances of the tax position, and (3) each tax position is evaluated without considerations ofthe possibility of offset or aggregation with other tax positions taken. We adjust these reserves, including any impact on the related interest and penalties, inlight of changing facts and circumstances, such as the progress of a tax audit. Refer to Note 5 of Notes to Consolidated Financial Statements.A number of years may elapse before a particular matter for which we have established a reserve is audited and finally resolved. The number of years withopen tax audits varies depending on the tax jurisdiction. The tax benefit that has been previously reserved because of a failure to meet the “more likely thannot’’ recognition threshold would be recognized in our income tax expense in the first interim period when the uncertainty disappears under any one of thefollowing conditions: (1) the tax position is “more likely than not’’ to be sustained, (2) the tax position, amount, and/or timing is ultimately settled throughnegotiation or litigation, or (3) the statute of limitations for the tax position has expired. Settlement of any particular issue would usually require the use ofcash.Tax law requires items to be included in the tax return at different times than when these items are reflected in the consolidated financial statements. As aresult, the annual tax rate reflected in our consolidated financial statements is different from that reported in our tax return (our cash tax rate). Some of thesedifferences are permanent, such as expenses that are not deductible in our tax return, and some differences reverse over time, such as depreciation expense.These timing differences create deferred tax assets and liabilities. Deferred tax assets and liabilities are determined based on temporary differences betweenthe financial reporting and tax bases of assets and liabilities. The tax rates used to determine deferred tax assets or liabilities are the enacted tax rates in effectfor the year and manner in which the differences are expected to reverse. Based on the evaluation of all available information, the Company recognizes futuretax benefits, such as net operating loss carryforwards, to the extent that realizing these benefits is considered more likely than not.We evaluate our ability to realize the tax benefits associated with deferred tax assets by analyzing our forecast taxable income using both historical andprojected future operating results; the reversal of existing taxable temporary differences; taxable income in prior carryback years (if permitted); and theavailability of tax planning strategies. A valuation allowance is required to be established unless management determines that it is more likely than not thatthe Company will ultimately realize the tax benefit associated with a deferred tax asset. As of January 3, 2015, the Company had fully reserved its deferredtax assets. The Company may not generate sufficient future taxable income to realize the tax benefits related to the remaining net deferred tax assets in ourconsolidated balance sheets.Recently Issued Accounting PronouncementsFor a summary of recent accounting pronouncements applicable to our consolidated financial statements see Note 1 to the Consolidated FinancialStatements in Item 8, which is incorporated herein by reference.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 do not currently employderivative instruments for risk management purposes, although we sometimes currently enter into supply agreements in the normal course of business, whichare not considered derivative instruments. The following discussion provides additional information regarding our market risk exposures.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 facilities would have an impact on our26results of operations. However, a change of 100 basis points in the market rate of interest would have an impact of $2.3 million and $2.1 million based onborrowings outstanding at January 3, 2015, and January 4, 2014, respectively, which we do not believe to be material. Additionally, to the extent changes ininterest rates impact the housing market, we may be impacted by such changes.Foreign Exchange Rates. 2.1% of our net sales are denominated in currencies other than the U.S. dollar, and we do not believe our total exposure tocurrency fluctuations to be significant.Commodity Prices. Many of the products we purchase and resell are commodities whose price is determined by market supply and demand for suchproducts. Commodity price fluctuations have, from time to time, created cyclicality in our financial performance and may do so in the future. The markets formost of these commodities are cyclical and are affected by factors such as global economic conditions, including the strength of the U.S. housing market,changes in or disruptions to industry production capacity, changes in inventory levels, and other factors beyond our control. For the year ended January 3,2015, we believe that a 10% change in the prices underlying our structural wood products would have resulted in a $71.5 million, $65.4 million, and $6.1million change in revenue, cost of sales and gross margin, respectively. For the year ended January 4, 2014, we believe that a 10% change in the pricesunderlying our structural wood products would have resulted in a $82.3 million, $76.5 million, and $5.9 million change in revenue, cost of sales and grossmargin, respectively.We occasionally manage our exposure to certain commodity risks through the use of purchase commitments that enable us to establish the purchaseprices for certain inputs that are used in our distribution business. For additional information about our 2015 fuel purchase commitment, see Note 14.27ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA Index to Financial Statements and Supplemental Data PageManagement’s Report on Internal Control Over Financial Reporting 29Reports of Independent Registered Public Accounting Firm 30Consolidated Balance Sheets 31Consolidated Statements of Operations and Comprehensive Income (Loss) 33Consolidated Statements of Cash Flows 34Consolidated Statements of Stockholders’ Equity (Deficit) 35Notes to Consolidated Financial Statements 36 28BLUELINX HOLDINGS INC.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 managementand board 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 financialreporting will prevent all errors and all fraud. Internal controls, no matter how well designed and operated, can provide only reasonable, not absolute,assurance that the objectives of the internal controls are met. Given the inherent limitations of internal controls, internal controls over financial reporting maynot prevent or detect all misstatements or fraud. Therefore, no evaluation of internal control can provide absolute assurance that all control issues or instancesof fraud will be prevented or detected. Management assessed the effectiveness of our internal control over financial reporting as of January 3, 2015. In making this assessment, managementused the criteria established by the Committee of Sponsoring Organizations of the Treadway Commission set forth in Internal Control — IntegratedFramework (2013 framework). Based on our assessment, our management concluded that, as of January 3, 2015, our internal control over financial reportingwas effective. Ernst & Young LLP, an independent registered public accounting firm that audited our consolidated financial statements as of and for the year endedJanuary 3, 2015, included in this Annual Report on Form 10-K, has issued an attestation report on our internal control over financial reporting as ofJanuary 3, 2015, dated February 19, 2015. /s/ Ernst & Young LLPAtlanta, GeorgiaFebruary 19, 2015 29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 January 3, 2015, based on criteria established inInternal Control—Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013 framework) (the “COSOcriteria”). BlueLinx Holdings Inc. and subsidiaries’ management is responsible for maintaining effective internal control over financial reporting, and for itsassessment of the effectiveness of internal control over financial reporting included in the accompanying Management’s Report on Internal Control OverFinancial Reporting. Our responsibility 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 aswe considered 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 financialreporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’sinternal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail,accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded asnecessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of thecompany are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assuranceregarding prevention or timely detection of unauthorized acquisition, use or disposition of the company’s assets that could have a material effect on thefinancial statements. Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluationof effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree ofcompliance with 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 ofJanuary 3, 2015, based on the COSO criteria. We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States), the 2014 ConsolidatedFinancial Statements of BlueLinx Holdings Inc., and our report dated February 19, 2015, expressed an unqualified opinion thereon. /s/ Ernst & Young LLP Atlanta, GeorgiaFebruary 19, 2015 30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 January 3, 2015, and January 4, 2014,and the related consolidated statements of operations, and comprehensive income (loss), stockholders’ equity (deficit), and cash flows for the fiscal yearsended January 3, 2015, January 4, 2014, and December 29, 2012. 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 January 3, 2015 and January 4, 2014, and the consolidated results of their operations and their cash flows for the fiscal years endedJanuary 3, 2015, January 4, 2014, and December 29, 2012, 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 January 3, 2015, based on criteria established in Internal Control-Integrated Framework issued bythe Committee of Sponsoring Organizations of the Treadway Commission (2013 framework), and our report dated February 19, 2015, expressed anunqualified opinion thereon. /s/ Ernst & Young LLP Atlanta, GeorgiaFebruary 19, 2015 BLUELINX HOLDINGS INC.CONSOLIDATED BALANCE SHEETS31 January 3, 2015 January 4, 2014 (In thousands, except per share data)ASSETSCurrent assets: Cash$4,522 $5,034Accounts receivable, less allowances of $3,112 in fiscal 2014 and $4,359 in fiscal 2013144,537 150,297Inventories, net242,546 223,580Other current assets23,289 22,814Total current assets414,894 401,725Property, plant, and equipment: Land and land improvements41,095 41,176Buildings90,161 90,082Machinery and equipment77,279 73,004Construction in progress1,188 3,028Property, plant, and equipment, at cost209,723 207,290Accumulated depreciation(104,456) (96,171)Property, plant, and equipment, net105,267 111,119Non-current deferred income tax assets, net501 824Other non-current assets18,320 14,821Total assets$538,982 $528,489LIABILITIES AND STOCKHOLDERS’ EQUITY (DEFICIT)Current liabilities: Accounts payable$67,291 $60,363Bank overdrafts27,280 19,377Accrued compensation5,643 4,173Current maturities of long-term debt2,679 9,141Deferred income taxes, net518 823Other current liabilities13,831 12,949Total current liabilities117,242 106,826Non-current liabilities: Long-term debt403,274 387,238Other non-current liabilities54,492 40,323Total liabilities575,008 534,387STOCKHOLDERS’ EQUITY (DEFICIT) Common Stock, $0.01 par value, 200,000,000 shares authorized; 88,748,638 and 86,545,000 shares issued andoutstanding at January 3, 2015 and January 4, 2014, respectively888 866Additional paid-in capital253,051 251,150Accumulated other comprehensive income (loss)(34,425) (16,293)Accumulated stockholders’ equity (deficit)(255,540) (241,621)Total stockholders’ equity (deficit) (36,026) (5,898)Total liabilities and stockholders’ equity (deficit) $538,982 $528,48932BLUELINX HOLDINGS INC.CONSOLIDATED STATEMENTS OF OPERATIONS ANDCOMPREHENSIVE INCOME (LOSS) Fiscal YearEnded January 3, 2015 Fiscal YearEnded January 4, 2014 Fiscal YearEndedDecember 29, 2012 (In thousands, except per share data)Net sales$1,979,393 $2,151,972 $1,907,842Cost of sales1,750,289 1,923,489 1,677,772Gross profit229,104 228,483 230,070Operating expenses: Selling, general, and administrative206,095 240,667 215,996Depreciation and amortization9,473 9,117 8,565Total operating expenses215,568 249,784 224,561Operating income (loss)13,536 (21,301) 5,509Non-operating expenses (income): Interest expense26,771 28,024 28,157Other expense (income), net325 306 (7)Income (loss) before provision for (benefit from) income taxes(13,560) (49,631) (22,641)Provision for (benefit from) income taxes312 (9,013) 386Net income (loss)$(13,872) $(40,618) $(23,027) Basic and diluted weighted average number of common shares outstanding86,001 80,163 65,452Basic and diluted net income (loss) per share applicable to common stock$(0.16) $(0.51) $(0.35) Comprehensive income (loss): Net income (loss)$(13,872) $(40,618) $(23,027)Other comprehensive income (loss): Foreign currency translation, net of taxes(481) (161) 103Unrealized gain (loss) from pension plan, net of taxes(17,651) 13,910 (8,245)Total other comprehensive income (loss)(18,132) 13,749 (8,142)Comprehensive income (loss)$(32,004) $(26,869) $(31,169) 33BLUELINX HOLDINGS INC.CONSOLIDATED STATEMENTS OF CASH FLOWS Fiscal YearEnded January 3, 2015 Fiscal YearEnded January 4, 2014 Fiscal YearEndedDecember 29, 2012 (In thousands)Cash flows from operating activities: Net income (loss)$(13,872) $(40,618) $(23,027)Adjustments to reconcile net income (loss) to cash used in operations: Depreciation and amortization9,473 9,117 8,565Amortization of debt discount and issuance costs3,156 3,184 3,746Write-off of debt issuance costs— 119 —Gain from sale of properties(5,251) (5,220) (9,885)Gain from property insurance settlements— — (476)Vacant property charges— 1,321 (30)Severance charges2,067 5,607 —Payments on modification on lease agreement— (300) (5,875)Deferred income tax benefit charge (benefit)17 (5) (20)Restructuring payments(2,805) (3,057) (6,084)Intraperiod income tax allocation related to hourly pension plan— (8,894) —Pension expense901 4,591 3,942Share-based compensation, excluding restructuring related3,840 3,222 2,797Share-based compensation, restructuring related— 2,895 —Decrease (increase) in restricted cash related to insurance and other(263) (1,810) 695Decrease (increase) in prepaid assets(942) (3,062) 889Accrued compensation and other(2,442) (3,033) 4,538Change in net cash used in other operating activities(6,121) (35,943) (20,225)Changes in assets and liabilities: Accounts receivable5,760 7,168 (18,593)Inventories(18,966) 6,479 (44,482)Accounts payable7,026 (17,585) 9,050Net cash used in operating activities(12,301) (39,881) (74,250)Cash flows from investing activities: Property, plant, and equipment investments(3,016) (4,912) (2,826)Proceeds from disposition of assets7,368 10,365 19,195Net cash provided by investing activities4,352 5,453 16,369Cash flows from financing activities: Excess tax benefits from share-based compensation arrangements(16) 16 —Repurchase of shares to satisfy employee tax withholdings(957) (3,192) (526)Repayments on revolving credit facilities(476,473) (560,186) (473,349)Borrowings from revolving credit facilities494,794 599,968 550,270Principal payments on mortgage(9,220) (19,038) (37,272)Payments on capital lease obligations(2,228) (3,142) (2,259)Increase (decrease) in bank overdrafts7,902 (16,007) 13,020Increase (decrease) in restricted cash related to the mortgage (6,066) 40 9,970Debt financing costs(201) (2,900) (1,683)Proceeds from stock offering less expenses paid(98) 38,715 —Net cash provided by financing activities7,437 34,274 58,171Increase (decrease) in cash(512) (154) 290Cash balance, beginning of period5,034 5,188 4,898Cash balance, end of period$4,522 $5,034 $5,188Supplemental Cash Flow Information Net income tax payments during the period$(210) $(332) $(508)Interest paid during the period$23,147 $24,706 $24,288Noncash transactions: Capital leases$1,108 $5,069 $5,23834BLUELINX HOLDINGS INC.CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY (DEFICIT) Common Stock AdditionalPaid-In- AccumulatedOtherComprehensive Accumulated Stockholders’Equity (Deficit) Shares Amount Capital Income (Loss) Deficit Total (In thousands)Balance, December 31, 201162,013 $620 $207,626 $(21,900) $(177,972) $8,374Net income (loss)— — — — (23,027) (23,027)Foreign currency translation adjustment, net of tax— — — 103 — 103Unrealized loss from pension plan, net of tax— — — (8,245) — (8,245)Issuance of restricted stock, net of forfeitures1,875 19 — — — 19Compensation related to share-based grants— — 2,730 — — 2,730Impact of net settled shares for vested grants(224) (2) (524) — — (526)Other— — (17) — (3) (20)Balance, December 29, 201263,664637209,815(30,042)(201,002)(20,592)Net income (loss)— — — — (40,618) (40,618)Foreign currency translation adjustment, net of tax— — — (161) — (161)Unrealized gain (loss) from pension plan, net of tax— — — 13,910 — 13,910Issuance of restricted stock, net of forfeitures651 6 — — — 6Impact of performance shares628 6 — — — 6Issuance of stock related to rights offerings, net ofexpenses22,857 229 38,384 — — 38,613Compensation related to share-based grants— — 6,117 — — 6,117Impact of net settled shares for vested grants(1,255) (12) (3,181) — — (3,193)Excess tax benefits from share-based compensationarrangements— — 16 16Other— — (1) — (1) (2)Balance, January 4, 201486,545866251,150(16,293)(241,621)(5,898)Net income (loss)— — — — (13,872) (13,872)Foreign currency translation adjustment, net of tax— — — (481) — (481)Unrealized gain (loss) from pension plan, net of tax— — — (17,651) — (17,651)Issuance of restricted stock, net of forfeitures1,827 18 — — — 18Issuance of performance shares1,039 10 — — — 10Issuance of stock related to rights offerings, net ofexpenses— — — — — —Compensation related to share-based grants— — 2,896 — — 2,896Impact of net settled shares for vested grants(662) (6) (957) — — (963)Excess tax benefits from share-based compensationarrangements— — (16) — — (16)Other— — (22) — (47) (69)Balance, January 3, 201588,749$888$253,051$(34,425)$(255,540) $(36,026) 35BLUELINX HOLDINGS INC.NOTES TO CONSOLIDATED FINANCIAL STATEMENTS1. Summary of Significant Accounting PoliciesBasis of PresentationBlueLinx is a wholesale supplier of building products in North America. Our Consolidated Financial Statements include the accounts of BlueLinxHoldings Inc. and its wholly owned subsidiaries. These financial statements have been prepared in accordance with U.S. GAAP. All significant intercompanyaccounts and transactions have been eliminated.Fiscal 2014 contained 52 weeks, fiscal 2013 contained 53 weeks, and fiscal 2012 contained 52 weeks.Use of EstimatesWe are required to make estimates and assumptions when preparing our Consolidated Financial Statements in accordance with U.S. GAAP. Theseestimates and assumptions affect the amounts reported in our Consolidated Financial Statements and the accompanying notes. Actual results could differmaterially from those estimates.Recently Adopted Accounting StandardsIn July 2013, the Financial Accounting Standards Board (the “FASB”) issued Accounting Standards Update (“ASU”) 2013-11, Presentation of anUnrecognized Tax Benefit When a Net Operating Loss Carryforward, a Similar Tax Loss, or a Tax Credit Carryforward Exists. Under ASU 2013-11, entitiesare required to present unrecognized tax benefits as a decrease in a net operating loss, a similar tax loss or a tax credit carryforward, if certain criteria are met.The determination of whether a deferred tax asset is available is based on the unrecognized tax benefit and the deferred tax asset that exists at the reportingdate and presumes disallowance of the tax position at the reporting date. The amendment, which did not materially impact our financial statements, iseffective for public companies in fiscal years, and interim periods within those years, beginning after December 15, 2013. Early adoption is permitted. Weadopted this guidance during the first quarter of fiscal 2014.In April 2014, the FASB issued ASU 2014-08, Reporting Discontinued Operations and Disclosures of Disposals of Components of an Entity. Under ASU2014-08, only disposals representing a strategic shift in operations should be presented as discontinued operations. Those strategic shifts should have a majoreffect on the organization’s operations and financial results. Additionally, ASU 2014-08 requires expanded disclosures about discontinued operations thatwill provide financial statement users with more information about the assets, liabilities, income and expenses of discontinued operations. This accountingstandard, which did not materially impact our financial statements, is effective for fiscal and interim periods beginning on or after December 15, 2014. Earlyadoption is permitted, but only for disposals (or classifications as held for sale) that have not been reported in financial statements previously issued oravailable for issuance. We adopted this guidance during the fourth quarter of fiscal 2014.New Accounting StandardsIn May 2014, the FASB issued ASU 2014-09, Revenue from Contracts with Customers, which will replace most existing revenue recognition guidance inU.S. GAAP and is intended to improve and converge with international standards the financial reporting requirements for revenue from contracts withcustomers. The core principle of the ASU is that an entity should recognize revenue for the transfer of goods or services equal to the amount that it expects tobe entitled to receive for those goods or services. ASU 2014-09 also requires additional disclosures about the nature, timing and uncertainty of revenue andcash flows arising from customer contracts, including significant judgments and changes in judgments. The ASU allows for both retrospective andprospective methods of adoption and is effective for periods beginning after December 15, 2016. The Company is currently evaluating the impact that theadoption of this ASU will have on our consolidated financial statements.In September 2014, the FASB issued ASU 2014-15, Presentation of Financial Statements - Going Concern. The ASU requires management to evaluaterelevant conditions, events and certain management plans that are known or reasonably knowable as of the evaluation date when determining whethersubstantial doubt about an entity’s ability to continue as a going concern exists within one year from the date that the financial statements are issued. ASU2014-15 is effective for annual periods ending after December 15, 2016, and for annual and interim periods thereafter. Early adoption is permitted. TheCompany is currently evaluating the impact the adoption of this ASU will have on its consolidated financial statements.ReclassificationsCertain other amounts in the prior years’ consolidated financial statements and notes have been revised to conform to the current year presentation.During fiscal 2014, we separately have detailed certain amounts, which historically had been presented as “Other” changes in the “Cash flows from operatingactivities.” To conform the historical presentation to the current and future presentation, we separately have detailed similar items, including certain prepaidassets and inventory in prior periods from “Other” changes in the “Cash flows from operating activities.”36Additionally, during fiscal 2014, we reclassified certain amounts relating to debt discount, which historically had been presented as “Other non-currentassets” to “Long-term debt” on the Consolidated Balance Sheets. To conform the historical presentation to the current and future presentation, we reclassifiedsimilar items in prior periods from “Other non-current assets” to “Long-term debt” on the Consolidated Balance Sheets.Revenue RecognitionWe recognize revenue when the following criteria are met: persuasive evidence of an agreement exists, delivery has occurred or services have beenrendered, our price to the buyer is fixed and determinable, and collectability is reasonably assured. Delivery is not considered to have occurred until thecustomer takes title and assumes the risks and rewards of ownership. The timing of revenue recognition largely is dependent on shipping terms. Revenue isrecorded at the time of shipment for terms designated free on board (“FOB”) shipping point. For sales transactions designated FOB destination, revenue isrecorded when the product is delivered to the customer’s delivery site.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 consigned inventory is sold by the customer, werecognize 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 earnings resulting from revisions to estimateson discounts and returns have been insignificant for each of the reported periods.Accounts ReceivableAccounts receivable are stated at net realizable value, do not bear interest, and consist of amounts owed for orders shipped to customers. Managementestablishes an overall credit policy for sales to customers. The allowance for doubtful accounts is determined based on a number of factors including specificcustomer account reviews, historical loss experience, current economic trends, and the creditworthiness of significant customers based on ongoing creditevaluations.Inventory ValuationThe cost of all inventories is determined by the moving average cost method. We have included all material charges directly or indirectly incurred inbringing inventory to its existing condition and location. We evaluate our inventory value at the end of each quarter to ensure that inventory, when viewedby category, is carried at the lower of cost or market. Additionally, we estimate and maintain a reserve for damaged, excess and obsolete inventory.Consideration Received from Vendors and Paid to CustomersEach year, we enter into agreements with many of our vendors providing for inventory purchase rebates, generally based on achievement of specifiedvolume purchasing levels. We also receive rebates related to price protection and various marketing allowances that are common industry practice. We accruefor the receipt of vendor rebates based on purchases, and also reduce inventory to reflect the net acquisition cost (purchase price less expected purchaserebates). As of January 3, 2015, and January 4, 2014, the vendor rebate receivable totaled $7.1 million and $7.6 million, respectively. Adjustments toearnings 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 sales levels andvarious marketing allowances that are common industry practice. We accrue for the payment of customer rebates based on sales to the customer, and alsoreduce sales to reflect the net sales (sales price less expected customer rebates). As of January 3, 2015, and January 4, 2014, the customer rebate payabletotaled $6.4 million and $6.3 million, respectively. Adjustments to earnings resulting from revisions to rebate estimates have been immaterial.Shipping and HandlingAmounts 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 $91.8 million, $99.7 million, and $91.2 million for fiscal 2014, fiscal 2013, and fiscal 2012,respectively.Advertising CostsAdvertising costs are expensed as incurred. Advertising expenses of $0.6 million, $1.2 million, and $1.1 million were included in “Selling, general andadministrative” expenses for fiscal 2014, fiscal 2013, and fiscal 2012, respectively.37Property, Plant, and EquipmentProperty, plant, and equipment are recorded at cost. Lease obligations for which we assume or retain substantially all the property rights and risks ofownership are capitalized. Amortization of assets recorded under capital leases is included in “Depreciation and amortization” expense. Replacements ofmajor units of property are capitalized and the replaced properties are retired. Replacements of minor components of property and repair and maintenancecosts are charged to expense as incurred.Depreciation is computed using the straight-line method over the estimated useful lives of the related assets. Upon retirement or disposition of assets,cost and accumulated depreciation are removed from the related accounts and any gain or loss is included in income.Share-Based CompensationWe recognize compensation expense equal to the grant-date fair value for all share-based payment awards that are expected to vest. This expense isrecorded on a straight-line basis over the requisite service period of the entire award, unless the awards are subject to market or performance conditions, inwhich case we recognize compensation expense over the requisite service period of each separate vesting tranche to the extent market and performanceconditions are considered probable. The calculation of fair value related to share-based compensation is subject to certain assumptions discussed in moredetail in Note 10. Management updates such estimates when circumstances warrant. All compensation expense related to our share-based payment awards isrecorded in “Selling, general and administrative” expense in the Consolidated Statements of Operations and Comprehensive Income (Loss).Income TaxesWe account for deferred income taxes using the liability method. Accordingly, we recognize deferred tax assets and liabilities based on the tax effects oftemporary differences between the financial statement and tax bases of assets and liabilities, as measured by current enacted tax rates. Deferred tax assets andliabilities are recorded net, as current and noncurrent. A valuation allowance is recorded to reduce deferred tax assets when necessary. For additionalinformation about our income taxes, see Note 5.Self-InsuranceThe Company is self-insured, up to certain limits, for most workers’ compensation losses, employee health benefits, general liability, and automotiveliability losses, all subject to varying “per occurrence” retentions or deductible limits. The Company provides for estimated costs to settle both known claimsand claims incurred but not yet reported. Liabilities associated with these claims are estimated, in part, by considering the frequency and severity of historicalclaims, both specific to us, as well as industry-wide loss experience and other actuarial assumptions. We determine our insurance obligations with theassistance of actuarial firms. Since there are many estimates and assumptions involved in recording insurance liabilities and in the case of workers’compensation a significant period of time elapses before the ultimate resolution of claims, differences between actual future events and prior estimates andassumptions could result in adjustments to these liabilities.2. Assets Held for SaleIn fiscal 2014, we designated certain assets as held for sale, due to strategic realignments of our business. At the time of designation, we ceasedrecognizing depreciation expense on these assets. As of January 3, 2015, and January 4, 2014, total assets held for sale were $0.9 million and $2.6 million,respectively, and were included in “Other current assets” in our Consolidated Balance Sheets.During the second quarter of fiscal 2014, we finalized the sale of the Portland, Oregon, facility, which had a carrying amount of $1.9 million, andrecognized a gain of $5.1 million on the sale in “Selling, general, and administrative” expenses in the Consolidated Statements of Operations andComprehensive Income (Loss). We also designated our Shreveport, Louisiana, distribution center as held for sale during the second quarter of fiscal2014. This property has a total carrying amount of $0.2 million, and we plan to finalize a sale of the facility within the next 12 months. We continue toactively market all properties that are designated as held for sale.383. Restricted CashRestricted cash primarily includes amounts held in escrow related to our mortgage and insurance for workers’ compensation, auto liability, and generalliability. Restricted cash is included 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: January 3, 2015 January 4, 2014 (In thousands)Cash in escrow: Mortgage$6,067 $—Insurance7,430 7,921Other4,513 3,760Total$18,010 $11,6814. Restructuring ChargesWe 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 whichit is incurred, or when the we cease using the right conveyed by a contract (i.e., the right to use a leased property). We account for severance andoutplacement costs by recognizing a liability for employees’ rights to post-employment benefits when management has committed to a plan, due to theexistence of a post-employment benefit agreement. These costs are included in “Selling, general, and administrative” expenses in the ConsolidatedStatements of Operations and Comprehensive Income (Loss), and in “Accrued compensation” on the Consolidated Balance Sheets.During fiscal 2013, we strategically reviewed our distribution centers, which resulted in designating five distribution centers to be sold or closed. Thesedistribution centers were closed or ceased operations during the third quarter of fiscal 2013. Also during fiscal 2013, we announced a change in executiveleadership and reduction in force. These events are referred to as the “2013 restructuring”. In connection with the 2013 restructuring the Company recognizedseverance-related charges of $5.7 million, $2.9 million of related share-based compensation, and $1.4 million of other restructuring charges during fiscal2013. In addition, the Company recognized facility lease obligation charges of $1.4 million for two closed facilities during fiscal 2013.The table below summarizes our restructuring activity: Reduction inForceActivities Facility LeaseObligation Total (In thousands)Balance at December 29, 2012$— $— $—Charges5,709 1,398 7,107Adjustments to reserves(102) (68) (170)Payments(3,057) (402) (3,459)Balance at January 4, 2014$2,550 $928 $3,478Charges— — —Adjustments to reserves(168) 32 (136)Payments(2,069) (413) (2,482)Balance at January 3, 2015$313 $547 $860395. Income TaxesOur provision for (benefit from) income taxes consisted of the following: Fiscal YearEnded January 3, 2015 Fiscal YearEnded January 4, 2014 Fiscal YearEnded December 29,2012 (In thousands)Federal income taxes: Current$— $(492) $16Deferred— (7,385) —State income taxes: Current160 192 334Deferred— (1,343) —Foreign income taxes: Current134 19 56Deferred18 (4) (20)Provision for (benefit from) income taxes$312 $(9,013) $386 The federal statutory income tax rate was 35%. Our provision for (benefit from) income taxes is reconciled to the federal statutory amount as follows: Fiscal YearEnded January 3, 2015 Fiscal YearEnded January 4, 2014 Fiscal YearEndedDecember 29, 2012 (In thousands)Benefit from income taxes computed at the federal statutory tax rate$(4,746) $(17,371) $(7,924)Benefit from state income taxes, net of federal benefit(623) (1,991) (866)Valuation allowance change5,656 19,445 8,820Nondeductible items232 270 484Benefit from allocation of income taxes to other comprehensive income (loss)— (8,726) —Other(207) (640) (128)Provision for (benefit from) income taxes$312 $(9,013) $386In accordance with the intraperiod tax allocation provisions of GAAP, we are required to consider all items (including items recorded in othercomprehensive income) in determining the amount of tax benefit resulting from a loss from continuing operations that should be allocated to continuingoperations. In fiscal 2014 and fiscal 2012, there were no intraperiod tax allocations, since there was a loss in other comprehensive income for these periods. Infiscal 2013, a non-cash tax benefit was recorded on the loss from continuing operations in the amount of $8.7 million, which was offset in full by income taxexpense recorded in other comprehensive income. While the income tax benefit from continuing operations is reported in our Consolidated Statements ofOperations and Comprehensive Income (Loss), the income tax expense on other comprehensive income is recorded directly to accumulated othercomprehensive income (loss), which is a component of stockholders’ equity (deficit).Our financial statements contain certain deferred tax assets which primarily resulted from tax benefits associated with the loss before income taxes, aswell as net deferred income tax assets resulting from other temporary differences related to certain reserves, pension obligations, and differences betweenbook and tax depreciation and amortization. We record a valuation allowance against our net deferred tax assets when we determine that based on the weightof available evidence, it is more likely than not that our net deferred tax assets will not be realized.40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 negativeevidence associated with 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 fiscal years 2014 and 2013, we weighed all available positive and negative evidence, and concluded that the weight of the negative evidence ofcumulative losses over several years continued to outweigh the positive evidence. Based on the conclusions reached, we maintained a full valuationallowance during fiscal years 2014 and 2013.The components of our net deferred income tax assets (liabilities) are as follows: January 3, 2015 January 4, 2014 (In thousands)Deferred income tax assets: Inventory reserves$3,333 $2,832Compensation-related accruals5,434 4,893Accruals and reserves787 1,030Accounts receivable728 1,291Restructuring costs212 488Property and equipment16 —Pension13,214 8,245Benefit from net operating loss (“NOL”) carryovers (1)76,264 70,169Other685 703Total gross deferred income tax assets100,673 89,651Less: Valuation allowances(99,979) (88,279)Total net deferred income tax assets$694 $1,372Deferred income tax liabilities: Property and equipment— (365)Other(711) (1,006)Total deferred income tax liabilities(711) (1,371)Deferred income tax assets (liabilities), net$(17) $1(1)Our federal NOL carryovers are $184.2 million and will expire in 14 to 20 years. Our state NOL carryovers are $238.5 million and will expire in 1 to20 years.Activity in our deferred tax asset valuation allowance for fiscal years 2014 and 2013 was as follows: Fiscal YearEnded January 3, 2015 Fiscal YearEnded January 4, 2014 (In thousands)Balance at beginning of the year$88,279 $78,050Valuation allowance provided for taxes related to: Loss before income taxes11,700 10,229Balance at end of the year$99,979 $88,279 41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 December 31, 2011$873Increases 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 statue of limitations(47)Settlements—Balance at December 29, 2012826Increases 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 statue of limitations(567)Settlements—Balance at January 4, 2014259Increases 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(75)Settlements—Balance at January 3, 2015$184Included in the unrecognized tax benefits at January 3, 2015, and January 4, 2014, were $0.2 million and $0.3 million, respectively, of tax benefits that,if recognized, would reduce our annual effective tax rate. We also accrued an immaterial amount of interest related to these unrecognized tax benefits duringfiscal 2014 and 2013, and this amount is reported in “Interest expense” in our Consolidated Statements of Operations and Comprehensive Income (Loss). Wedo not expect our unrecognized tax benefits 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 2011 through 2014 tax years generally remainsubject to examination by federal and most state and foreign tax authorities.6. Revolving Credit FacilitiesOn August 4, 2006, we entered into our U.S. revolving credit facility, as later amended, with several lenders including Wells Fargo Bank, NationalAssociation. The U.S. revolving credit facility has a final maturity of April 15, 2016, and maximum available credit of $467.5 million, which includesthe $20.0 million Tranche A Loan, the maturity date of which is described below. The U.S. revolving credit facility also includes an additional $75.0 millionuncommitted accordion credit facility, which permits us to increase the maximum available credit up to $542.5 million. Amounts outstanding under the U.S.revolving credit facility are secured on a first priority basis, by substantially all of our personal property and trade fixtures, including all accounts receivable,general intangibles, inventory, and equipment.On August 14, 2014, we amended our U.S. revolving credit facility, extending the final maturity date of the Tranche A Loan to June 30, 2015, andadjusting the credit limits of the loan to step down the available credit by $2.0 million per month beginning April 1, 2015, unless the principal paymentscause excess availability to become less than $50.0 million, or an event of default exists.As of January 3, 2015, we had outstanding borrowings of $225.6 million and excess availability of $58.5 million under the terms of the U.S. revolvingcredit facility. The interest rate on the U.S. revolving credit facility was 3.9% at January 3, 2015. Our subsidiary BlueLinx Canada has the Canadian revolving credit facility with Canadian Imperial Bank of Commerce due upon the the earlier ofAugust 12, 2016, or the maturity date of the U.S. revolving credit facility. The Canadian revolving credit facility has a maximum available credit of $10.0million. The Canadian revolving credit facility also provides for an additional $5.0 million uncommitted accordion credit facility, which permits us toincrease the maximum available credit up to $15.0 million.42As of January 3, 2015, we had outstanding borrowings of $4.0 million and excess availability of $1.0 million under the terms of our Canadian revolvingcredit facility. The interest rate on the Canadian revolving credit facility was 4.0% at January 3, 2015.Our U.S. and Canadian revolving credit facilities contain customary negative covenants and restrictions for asset based loans. The only covenant wedeem material is a requirement that we maintain a fixed charge coverage ratio of 1.1 to 1.0 in the event our excess availability under the U.S. revolving creditfacility falls below the greater of $33.2 million during the time the Tranche A Loan is outstanding, and $31.8 million at all times thereafter; or the amountequal to 12.5% of the lesser of the borrowing base or $467.5 million during the time the Tranche A Loan is outstanding, and $447.5 million at all timesthereafter. We do not anticipate that our excess availability will drop below the Excess Availability Threshold as defined in the U.S. revolving credit facilityagreement in the foreseeable future; however, if we did fall below this threshold, we currently would not meet the required fixed charge coverage ratio. We arein compliance with all covenants under these revolving credit facilities.7. MortgageWe have a ten year mortgage loan with German American Capital Corporation and Wells Fargo Bank. The mortgage matures on July 1, 2016, and issecured by the Company’s 49 distribution facilities. The stated interest rate on the mortgage is fixed at 6.35%. Loan principal will be paid in the followingincrements: Principal Payments (In thousands)2015$2,6782016175,044Total$177,7228. Fair Value MeasurementsWe 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 quotedprices for identical assets or liabilities in an active market (Level 1), (ii) quoted prices in markets that are not active or inputs that are observable eitherdirectly or indirectly for substantially the full term of the asset or liability (Level 2), and (iii) prices or valuation techniques that require inputs that are bothunobservable and significant to the overall fair value measurement (Level 3).Fair value measurements for defined benefit pension planThe fair value hierarchy discussed above not only is applicable to assets and liabilities that are included in our consolidated balance sheets, but also isapplied to certain other assets that indirectly impact our consolidated financial statements. For example, we sponsor and contribute to a single-employerdefined benefit pension plan (see Note 9). Assets contributed by us become the property of the pension plan. Even though the Company no longer hascontrol over these assets, we are indirectly impacted by subsequent fair value adjustments to these assets. The actual return on these assets impacts our futurenet periodic benefit cost, as well as amounts recognized in our consolidated balance sheets. The Company uses the fair value hierarchy to measure the fairvalue of assets held by our pension plan. We believe the pension plan asset fair value valuation to be Level 1 in the fair value hierarchy, as the assets held inthe pension plan under GAAP consist of publicly traded securities.Fair value measurements for financial instrumentsCarrying 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, asthe valuation model has inputs that are observable for substantially the full term of the liability. Assumptions critical to our fair value measurements in theperiod are present value factors used in determining fair value and an interest rate. At January 3, 2015, the discounted carrying amount and fair value of ourmortgage was $177.7 million and $183.0 million, respectively.439. Employee BenefitsSingle-Employer Defined Benefit Pension PlanSome of our hourly employees participate in a noncontributory defined benefit pension plan administered solely by us (the “pension plan”). Our fundingpolicy for the pension plan is based on actuarial calculations and the applicable requirements of federal law. Benefits under the pension plan primarily arerelated to years of service.The following tables set forth the change in projected benefit obligation and the change in plan assets for the pension plan: January 3, 2015 January 4, 2014 (In thousands)Change in projected benefit obligation: Projected benefit obligation at beginning of period$104,924 $114,330Service cost1,056 2,193Interest cost5,123 4,750Actuarial (gain) loss15,797 (10,710)Curtailment— (910)Benefits paid(4,945) (4,729)Projected benefit obligation at end of period121,955 104,924Change in plan assets: Fair value of assets at beginning of period77,039 67,760Actual return on plan assets3,422 13,536Employer contributions4,676 472Benefits paid(4,945) (4,729)Fair value of assets at end of period80,192 77,039Net (unfunded) status of plan$(41,763) $(27,885)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 inour Consolidated Balance Sheets, with a corresponding adjustment to accumulated other comprehensive income (loss), net of tax. On January 3, 2015, wemeasured the fair value of our plan assets and benefit obligations. As of January 3, 2015, and January 4, 2014, the net unfunded status of our benefit plan was$41.8 million and $27.9 million, respectively. These amounts were included in “Other non-current liabilities” on our Consolidated Balance Sheets.Actuarial gains and losses occur when actual experience differs from the estimates used to determine the components of net periodic pension cost, andwhen certain assumptions used to determine the fair value of the plan assets or projected benefit obligation are updated; including but not limited to, changesin the discount rate, plan amendments, differences between actual and expected returns on plan assets, mortality assumptions, and plan remeasurement.We amortize a portion of unrecognized actuarial gains and losses for the pension plan into our Consolidated Statements of Operations andComprehensive Income (Loss). The amount recognized in the current year’s operations is based on amortizing the unrecognized gains or losses for thepension plan that exceed the larger of 10% of the projected benefit obligation or the fair value of plan assets, also known as the corridor. In the current fiscalyear, the amount representing the unrecognized gain or loss that exceeds the corridor is amortized over the average future service of the active planparticipants.The net adjustment to other comprehensive income (loss) for fiscal 2014, fiscal 2013, and fiscal 2012 was a $17.7 million loss; $13.9 million gain ($22.8million gain, net of tax of $8.9 million); and a $8.2 million loss, primarily from the net recognized and unrecognized actuarial gain (loss) for those fiscalperiods. Refer to footnote 16 for further discussion.The increase in the unfunded obligation for the period was approximately $13.9 million and was comprised of $15.8 million of actuarial losses, $3.4million of asset returns, $4.7 million of pension contributions, and a charge of $6.2 million due to current year service and interest cost. The main driver ofthe increase in the liability related to the actuarial loss was the change in the underlying discount rate assumption which decreased to 4.19% in fiscal 2014from 5.00% in fiscal 2013. The net periodic pension cost also decreased to $0.9 million in fiscal 2014 from $4.6 million in fiscal 2013 and primarily wasdriven by amortization of actuarial losses and an increase in the discount rate.44In fiscal 2013, a freeze of non-union participants in the pension plan resulted in a reduction in future years of service for the active participants in theplan, which triggered a curtailment. As a result, there was a curtailment gain from the event which resulted in a decrease to the projected benefit obligation of$0.9 million in fiscal 2013.The unfunded status and the amounts recognized on our Consolidated Balance Sheets for the pension plan are set forth in the following table: January 3, 2015 January 4, 2014 (In thousands)Unfunded status $(41,763) $(27,885)Unrecognized prior service cost1 1Unrecognized actuarial loss32,309 14,656Net amount recognized$(9,453) $(13,228)Amounts recognized on the balance sheet consist of: Accrued pension liability(41,763) (27,885)Accumulated other comprehensive loss (pre-tax)32,310 14,657Net amount recognized$(9,453) $(13,228)As of January 3, 2015, the amortization of unrecognized actuarial gains and losses will be recognized over the average remaining life expectancy ofinactive plan participants, as almost all of the plan participants are inactive. The portion of estimated net loss for the pension plan that is expected to beamortized from accumulated other comprehensive income (loss) into net periodic cost over the next fiscal year is approximately $1.0 million.The accumulated benefit obligation for the pension plan was $120.5 million and $103.7 million at January 3, 2015, and January 4, 2014, respectively.Net periodic pension cost for the pension plan included the following: Fiscal Year EndedJanuary 3, 2015 Fiscal Year EndedJanuary 4, 2014 Fiscal Year EndedDecember 29, 2012 (In thousands)Service cost $1,056 $2,193 $1,878Interest cost on projected benefit obligation5,123 4,750 4,885Expected return on plan assets(6,041) (5,225) (4,897)Amortization of unrecognized loss763 2,873 2,077Net periodic pension cost$901 $4,591 $3,943 The following assumptions were used to determine the projected benefit obligation at the measurement date and the net periodic pension cost: January 3, 2015 January 4, 2014Projected benefit obligation: Discount rate4.19% 5.00%Average rate of increase in future compensation levelsGraded 5.5-2.5% Graded 5.5-2.5%Net periodic pension cost: Discount rate5.00% 4.24%Average rate of increase in future compensation levelsGraded 5.5-2.5% 3.00%Expected long-term rate of return on plan assets7.54% 7.85%Our estimates of the amount and timing of our future funding obligations for our defined benefit pension plan 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.45Determination of expected long-term rate of returnIn 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.The three 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 2.75%, the expected overall portfolio return is 8.29% offset by 0.75% expense estimate, resulting in a 7.54% net long term rate of return as ofJanuary 3, 2015.Our percentage of fair value of total assets by asset category as of the applicable measurement dates are as follows:Asset CategoryJanuary 3, 2015 January 4, 2014Equity securities — domestic 57% 55%Equity securities — international15% 16%Fixed income24% 24%Other4% 5%Total100% 100%The fair value of our plan assets are by asset category as of the applicable measurement dates are as follows:Asset CategoryJanuary 3, 2015 January 4, 2014 (In thousands)Equity securities — domestic $45,950 $42,710Equity securities — international11,924 12,067Fixed income19,161 18,836Other3,157 3,426Total$80,192 $77,039 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. See Note 8for a discussion of the levels of inputs to determine fair value.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 is to maximize the long-term real growth of fund assets, while the role of fixed income investments is to generate current income,provide for more stable periodic returns, and provide some downside protection against the possibility of a prolonged decline in the market value of equityinvestments. We review this investment policy statement at least once per year. In addition, the portfolio is reviewed quarterly to determine the deviationfrom target weightings and is rebalanced as necessary. Target allocations for fiscal 2015 are 55% domestic and 10% international equity investments, 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 of each of the abovecategories, weighted based on the target allocation for each class. 46Our estimated future benefit payments reflecting expected future service are as follows (in thousands):Fiscal Year Ending(In thousands)January 2, 20165,399December 31, 20165,705December 30, 20176,000December 29, 20186,281December 28, 20196,491Thereafter35,581The Company’s minimum required contribution for plan year 2012 was $3.2 million. In an effort to preserve additional cash for operations, we appliedfor and were granted a waiver from the Internal Revenue Service for our 2012 minimum required contribution. Therefore, contributions waived for 2012 havebeen amortized over the succeeding five years, from 2013 to 2017, increasing our minimum required contributions in those years. The Company’s minimum required contribution for plan year 2013 was $6.0 million. During fiscal 2013, we contributed certain qualifying employer realproperty located in Charleston, S.C. and Buffalo, N.Y. to the pension plan. The properties had a fair market value of approximately $6.8 million byindependent appraisals prior to the contribution and were recorded by the pension plan at fair market value. We are leasing back the contributed propertiesfor an initial term of twenty years with two five-year extension options and continue to use the properties in our distribution operations. The pension planengaged an independent fiduciary who evaluated the transaction, negotiated the terms of the property contribution and the leases, and also manages theproperties on behalf of the pension plan. Portions of the property contribution were designated to the 2014 and 2013 plan years.We determined that the contribution of the properties does not meet the accounting definition of a plan asset, within the scope of relevant accountingguidance, due to continuing involvement of the Company and the leaseback of the properties. Accordingly, the contributed properties are not considered acontribution for financial reporting purposes and, as a result, are not included in plan assets and have no impact on the net pension liability recorded on ourConsolidated Balance Sheets. Therefore, these assets continue to be recorded as assets of the Company, and we depreciate the carrying value of the propertiesin our financial statements. No gain or loss was recognized at the contribution date for financial reporting purposes. Rent payments are made on a monthlybasis and are recorded as contributions to the pension plan, of which $0.6 million and $0.5 million has been recorded for the years ended January 3, 2015,and January 4, 2014, respectively. These rental payments reduce our unfunded obligation to the pension plan.We currently are required to make four quarterly cash contributions during fiscal 2015 and 2016 of approximately $1.5 million related to our 2015minimum required contribution, which totals $6.1 million.Multiemployer Pension PlansWe participate in several multiemployer pension plans (“MEPPs”) administered by labor unions that provide retirement benefits to certain unionemployees in accordance with various collective bargaining agreements (“CBAs”). Approximately 34% of our employees are covered by CBAs, of whichapproximately 30% are covered by CBAs that expire within one year. As one of many participating employers in these MEPPs, we are generally responsiblewith the other participating employers for any plan underfunding. Our contributions to a particular MEPP are established by the applicable CBAs; however,our required contributions may increase based on the funded status of an MEPP and legal requirements such as those of the Pension Protection Act of 2006(“Pension Act”), which requires substantially underfunded MEPPs to implement a funding improvement plan (“FIP”) or a rehabilitation plan (“RP”) toimprove their funded status. Factors that could impact funded status of an MEPP include, without limitation, investment performance, changes in theparticipant demographics, decline in the number of contributing employers, changes in actuarial assumptions and the utilization of extended amortizationprovisions. A FIP or RP requires a particular MEPP to adopt measures to correct its underfunded status. These measures may include, but are not limited to: anincrease in our contribution rate to the applicable CBA, a reallocation of the contributions already being made by participating employers for variousbenefits to individuals participating in the MEPP, and/or a reduction in the benefits to be paid to future and/or current retirees. In addition, the Pension Actrequires that a 5% surcharge be levied on employer contributions for the first year commencing shortly after the date the employer receives notice that theMEPP is in critical status (also referred to as red status) and a 10% surcharge on each succeeding year until a CBA is in place with terms and conditionsconsistent with the RP. We have not been subject to any such surcharges, as the MEPP to which we are individually significant has not been considered in“critical” status.47We could also be obligated to make future payments to MEPPs if we either cease to have an obligation to contribute to the MEPP or significantly reduceour contributions to the MEPP because we reduce our number of employees who are covered by the relevant MEPP for various reasons, including, but notlimited to, layoffs or closures, assuming the MEPP has unfunded vested benefits. The amount of such payments (known as a complete or partial withdrawalliability) generally would equal our proportionate share of the MEPPs' unfunded vested benefits. We believe that one of the MEPP's in which we participatehas material unfunded vested benefits. Our share of the contributions in this plan exceeded 5% of total plan contributions for certain plan years. Due touncertainty regarding future factors that could trigger a withdrawal liability, as well as the absence of specific information regarding matters such as theMEPP's current financial situation due in part to delays in reporting, the potential withdrawal or bankruptcy of other contributing employers, the impact offuture plan performance or the success of current and future funding improvement or rehabilitation plans to restore solvency to the plan, we are unable todetermine with certainty the amount and timing of any future withdrawal liability, changes in future funding obligations, or the impact of increasedcontributions, including those that could be triggered by a mass withdrawal of other employers from a MEPP. There can be no assurance that the impact ofincreased contributions, future funding obligations or future withdrawal liabilities will not be material to our results of operations, financial condition or cashflows. We believe that the probability of a withdrawal is remote, and therefore, we have not recorded a liability for the material MEPP on our ConsolidatedBalance Sheets. The following table lists our participation in our multiemployer plan that is individually significant, and other MEPP plans for the yearsended, as follows: Contributions (in thousands)Pension Fund:EIN/Pension PlanNumberPension Act ZoneStatusFIP Status201420132012Lumber Employees Local 786 RetirementFund516067407Yellow(2009 - 2014)Implemented$0.4$0.4$0.4Other 0.60.90.9Total $1.0$1.3$1.3Contributions represent the amounts contributed to the plan during the fiscal years presented. Our contributions for fiscal year 2014 exceeded 5% oftotal plan contributions. Although the plan data for fiscal 2015 is not yet available, we would expect to continue to exceed 5% of total plan contributions.Defined Contribution PlansOur employees also participate in two defined contribution plans: the “hourly savings plan” covering hourly employees, and the “salaried savings plan”covering salaried employees. Contributions to the plans are based on employee contributions and compensation. Employer contributions to the hourlysavings plan totaled $0.1 million, $0.1 million, and $0.1 million for fiscal 2014, fiscal 2013, and fiscal 2012, respectively. Employer contributions to thesalaried savings plan totaled $0.9 million, $1.1 million, and $1.0 million for fiscal 2014, fiscal 2013, and fiscal 2012, respectively. 10. Share-Based CompensationWe have two share-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 areresponsible for the attainment of our primary long-term performance goals. The plans provide a means whereby our employees and directors develop a senseof proprietorship and personal involvement in our development and financial success and encourage them to devote their best efforts to our business.Although we do not have a formal policy on the matter, we issue new shares of our common stock to participants upon the exercise of options, settlement ofrestricted stock units, granting of restricted stock, or vesting of performance shares, out of the total amount of common shares authorized for issuance underthe 2004 Plan or 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 Compensation Committee.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 share-based awards to participants of the 2006 Plan selected by our Board of Directors ora 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 Compensation Committee. Some of the awards issued under the 2006 Plan are subject toaccelerated vesting in the event of a change in control as such an event is defined in the 2006 Plan.48We recognize compensation expense equal to the grant-date fair value for all share-based payment awards that are expected to vest. This expense isrecorded on a straight-line basis over the requisite service period of the entire award, unless the awards are subject to market or performance conditions, inwhich case we recognize compensation expense over the requisite service period of each separate vesting tranche, to the extent the occurrence of suchconditions are probable. All compensation expense related to our share-based payment awards is recorded in “Selling, general, and administrative” expensein the Consolidated Statements of Operations and Comprehensive Income (Loss).Restricted StockDuring fiscal 2014, the Board of Directors granted certain of our employees, executive officers, and directors restricted stock awards. The restricted stockawards vest in equal annual increments over three years, vest in one year, or vest three years after the date of grant. These awards are time-based and are notbased upon attainment of performance goals.As of January 3, 2015, there was $1.9 million of total unrecognized compensation expense related to restricted stock. The unrecognized compensationexpense is expected to be recognized over a weighted average term of 1.9 years. As of January 3, 2015, the weighted average remaining contractual term forour restricted stock was 1.7 years and the maximum contractual term is 3.0 years.The following table summarizes activity for our restricted stock awards during fiscal 2014: Restricted Stock Number ofAwards WeightedAverage FairValueOutstanding at January 4, 20141,618,283 $2.50Granted1,969,712 1.53Vested (1)(1,256,147) 1.93Forfeited(142,670) 1.99Outstanding at January 3, 20152,189,178 $1.68(1)The total fair value vested in fiscal 2014, fiscal 2013, and fiscal 2012 was $2.4 million, $6.4 million, and $2.3 million, respectively.Performance sharesDuring fiscal 2013, the Board of Directors granted certain of our executive officers and directors awards of performance shares of our common stock. Theperformance shares are released only upon the successful achievement of specific, measurable performance criteria approved by the CompensationCommittee. The performance shares, when earned, vest in three equal tranches. If the performance targets are not met, the awards will be canceled, although2013 performance criteria for the first tranche of the performance shares granted in fiscal 2013 was waived.As of January 3, 2015, there was $0.5 million of total unrecognized compensation expense related to performance shares. The unrecognizedcompensation expense is expected to be recognized over weighted average term of 0.9 years. As of January 3, 2015, the weighted average remainingcontractual term for our performance shares was 0.7 years and the maximum contractual term is 3.0 years.The following table summarizes activity for our performance share awards during fiscal 2014: Performance Shares Number ofAwards WeightedAverage FairValueOutstanding at January 4, 20142,192,868 $2.50Granted— —Vested (1) (2)(1,038,958) 1.64Forfeited(51,821) 2.49Outstanding at January 3, 2015 (2)1,102,089 $1.56(1)The total fair value vested in fiscal 2014 and fiscal 2013 was $1.7 million and $1.5 million, respectively.49(2)During fiscal 2014, four employees participating in the plan no longer were employed by the Company, and one director did not stand for re-election. The Compensation Committee approved an amendment to their Performance Share Award Agreements to allow their shares to vest, whenthey vest for individuals still employed by the Company. These amendments were determined to be modifications of the awards, and an adjustmentrelated to the difference in fair value was recorded in fiscal 2014. The awards were classified as liability awards, and were marked to market. As ofJanuary 3, 2015, the fair value of these awards was based on the opening price of our common stock on January 2, 2015, of $1.14. There were161,024 of these shares that vested in fiscal 2014, and 828,568 of these shares remaining as of January 3, 2015.OptionsThe tables below summarize activity and include certain additional information related to our outstanding employee stock options for the year endedJanuary 3, 2015. The maximum contractual term for stock options is ten years. There have been no new employee stock option grants and no stock optionexercises during fiscal years 2014, 2013, and 2012. Options Shares WeightedAverageExercisePriceOutstanding at January 4, 2014784,500 $5.05Granted— —Exercised— —Forfeited— —Expired— —Outstanding at January 3, 2015784,500 5.05Exercisable at January 3, 2015784,500 $5.05 Outstanding Exercisable Price Range Number ofOptions WeightedAverageExercisePrice Weighted AverageRemainingContractual Life(in Years) Number ofOptions WeightedAverageExercisePrice Weighted AverageRemainingContractual Life(in Years)$4.66 750,000 $4.66 3.2 750,000 $4.66 3.2$11.40-$14.01 34,500 $13.25 1.3 34,500 $13.25 1.3 784,500 3.1 784,500 3.1 Compensation ExpenseShare-based compensation expense is recognized only for those awards that are expected to vest, with forfeitures estimated at the date of grant based onour historical experience and future expectations. We recognize the effect of adjusting the estimated forfeiture rates in the period in which we change suchestimated rates. Total share-based compensation expense from restricted stock, performance shares, and stock options, net of estimated forfeitures, was asfollows: Fiscal YearEnded January 3,2015 (1) Fiscal YearEnded January 4,2014 (2) Fiscal Year EndedDecember 29,2012 (In thousands)Restricted Stock$1,941 $3,521 $2,730Performance Shares1,725 2,596 —Options and other (3)174 — 67Total$3,840 $6,117 $2,797(1)During fiscal 2014, four employees participating in the plan no longer were employed by the Company, and one director did not stand for re-election. See “Performance shares” above. The Compensation Committee approved an amendment to their Restricted Share Award Agreements toaccelerate the vesting of their restricted shares. These50amendments were determined to be modifications of the awards, and an adjustment related to the difference in fair value was recorded in fiscal 2014.Share-based compensation expense of $1.2 million was accordingly recorded during fiscal 2014.(2)Approximately $2.9 million of total share-based compensation during fiscal 2013 is related to the 2013 restructuring and change in executiveleadership.(3)As of January 3, 2015, there was no future compensation expense remaining for options.We recognized related income tax benefits in fiscal years 2014, 2013, and 2012 of $1.5 million, $2.4 million, and $1.1 million, respectively, which havebeen offset by a valuation allowance. We present the benefits of tax deductions in excess of recognized compensation expense as both a financing cashinflow and an operating cash outflow in our Consolidated Statements of Cash Flows when present. There were no material excess tax benefits in fiscal years2014, 2013, and 2012.11. Income (Loss) per Common ShareWe calculate our basic income (loss) per share by dividing net income (loss) by the weighted average number of common shares and participatingsecurities outstanding for the period. Restricted stock granted by us to certain management employees and non-employee directors participate in dividendson the same basis as common shares. The unvested restricted stock contains non-forfeitable rights to dividends or dividend equivalents. As a result, theseshare-based awards meet the definition of a participating security and are included in the weighted average number of common shares outstanding, pursuantto the two-class method, for the periods that present net income. The two-class method is an earnings allocation formula that treats a participating security ashaving rights to earnings that otherwise would have been available to common stockholders.Given that the restricted stockholders do not have a contractual obligation to participate in the losses and the inclusion of such unvested restricted sharesin our basic and dilutive per share calculations would be anti-dilutive, we have not included these amounts in our weighted average number of commonshares outstanding for periods in which we report a net loss. Therefore, we have not included 2,189,177, 1,618,283, and 3,554,738 of unvested restrictedshares that had the right to participate in dividends in our basic and dilutive calculations for fiscal years 2014, 2013, and 2012, respectively, because allperiods 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 and performance shares using the treasury stock method. During fiscal 2013, we granted performance shares under our 2006 Plan, in whichperformance shares are issuable upon satisfaction of certain performance criteria. As of January 3, 2015, and January 4, 2014, we assumed that 1,102,091 and2,192,868, respectively, of these performance shares will vest, net of forfeitures and vestings to date, based on our assumption that meeting the performancecriteria is probable. The performance shares are not considered participating shares under the two-class method because they do not receive any non-transferable rights to dividends. The performance shares we assume will vest were not included in the computation of diluted earnings per share calculationbecause they were antidilutive.Except when the effect would be anti-dilutive, the diluted earnings per share calculation includes the dilutive effect of the assumed exercise of stockoptions and vesting of performance shares using the treasury stock method. As we experienced losses in all periods, basic and diluted loss per share arecomputed by dividing net loss by the weighted average number of common shares outstanding for the period. For fiscal years 2014, 2013, and 2012, weexcluded 4,129,822, 4,595,650, and 4,460,054 unvested share-based awards, respectively, from the diluted earnings per share calculation because they wereanti-dilutive. The unvested share-based awards total excludes the assumed exercise of unexpired stock options.12. Related Party TransactionsCerberus Capital Management, L.P., our majority shareholder, retains consultants who specialize in operations management and support, and whoprovide Cerberus with consulting advice concerning portfolio companies in which funds and accounts managed by Cerberus or its affiliates have invested.From time to time, Cerberus makes the services of these consultants available to Cerberus portfolio companies. We believe that the terms of these consultingarrangements are favorable to us, or, alternatively, are materially consistent with those terms that would have been obtained by us in an arrangement with anunaffiliated third party. We have normal service, purchase, and sales arrangements with other entities that are owned or controlled by Cerberus. We believethat these transactions are not material to our results of operations or financial position. 5113. Lease CommitmentsOperating LeasesThe Company leases real property, logistics equipment, and office equipment under long-term, non-cancelable operating leases. Certain of our operatingleases have extension options and escalation clauses. Our real estate leases also provide for payments of other costs such as real estate taxes, insurance, andcommon area maintenance, which are not included in rental expense, sublease income, or the future minimum rental payments as set forth below. Total rentalexpense was approximately $4.5 million for fiscal 2014, and $4.8 million for both fiscal 2013 and fiscal 2012.At January 3, 2015, our total operating lease commitments were as follows: (In thousands)2015$5,72920165,47020175,31020184,83920191,799Thereafter10,273Total$33,420Capital LeasesWe have entered into certain long-term, non-cancelable capital leases for certain logistics equipment and vehicles. These capital leases have maturitiesof 5 to 7 years and interest rates ranging from 4.0% to 7.6%. As of January 3, 2015, the acquisition value and net book value of assets under capital leases was$16.4 million and $9.0 million, respectively. As of January 4, 2014, the basis and net book value of assets under capital leases was $15.4 million and $11.1million, respectively.At January 3, 2015, our total commitments under capital leases were as follows: Principal Interest (In thousands)2015$2,048 $46320161,993 32120171,499 21120181,563 1122019692 29Thereafter228 8Total$8,023 $1,14414. Commitments and ContingenciesFuel Purchase ObligationOn December 19, 2014, the Company entered into a commitment to purchase fuel from a vendor for a set price and quantity of fuel, beginning in January2015. The contract has a one-year term, ending December 2015.Environmental and Legal MattersFrom time to time, we are involved in various proceedings incidental to our businesses, and we are subject to a variety of environmental and pollutioncontrol laws and regulations in all jurisdictions in which we operate. Although the ultimate outcome of these proceedings cannot be determined withcertainty, based on presently available information management believes that adequate reserves have been established for probable losses with respectthereto. Management further believes that the ultimate outcome of these matters could be material to operating results in any given quarter but will not havea materially adverse effect on our long-term financial condition, our results of operations, or our cash flows.Collective Bargaining Agreements52As of January 3, 2015, we employed approximately 1,700 persons on a full-time basis. Approximately 34% of our employees were represented by variouslabor unions, of which approximately 30% of the union contracts are up for renewal in fiscal 2015. We consider our relationship with our employeesgenerally to be good.15. Subsequent EventsOn February 18, 2015, we refinanced our U.S. revolving credit facility, including the Tranche A Loan, with the Tenth Amendment to the U.S. revolvingcredit facility (the “Tenth Amendment”).The Tenth Amendment extends the maturity date of the U.S. revolving credit facility to April 15, 2017; requires the refinancing, extension orreplacement of our current mortgage on or before May 1, 2016, such that the maturity date of the new mortgage facility is not sooner than July 15, 2017; andrequires the repayment of not less than $35 million by May 1, 2016.Additionally, the Tenth Amendment extends the maturity date of the Tranche A Loan to June 30, 2016, with the principal amount decreasing by $2.0million each month beginning on April 1, 2016, but such step downs will not occur if, after giving effect to the applicable reduction, excess availability (asdefined, see Note 6) will be less than $50.0 million; amends the interest rate for the Tranche A Loan to begin increasing by 25 basis points each 90 days,beginning on April 1, 2015, with a maximum increase of 100 basis points; and, while the Tranche A Loan is outstanding, increases our fixed charge coverageratio to 1.2 to 1.0 in certain situations.16. Accumulated Other Comprehensive Income (Loss)Comprehensive income (loss) is a measure of income which includes both net income (loss) and other comprehensive income (loss). Othercomprehensive income (loss) results from items deferred from recognition into our Consolidated Statements of Operations and Comprehensive Income (Loss).Accumulated other comprehensive income (loss) is separately presented on our Consolidated Balance Sheets as part of common stockholders’ equity(deficit). Other comprehensive income (loss) was $(18.1) million, $13.7 million, and $(8.1) million for fiscal 2014, fiscal 2013, and fiscal 2012, respectively.The changes in accumulated balances for each component of other comprehensive income (loss) for fiscal years 2012, 2013, and 2014 were as follows: Foreign currency, netof tax Definedbenefit pensionplan, net oftax Other, net oftax Total (In thousands)January 1, 2012, beginning balance$1,694 $(23,806) $212 $(21,900)Other comprehensive income (loss), net of tax (1)103 (10,322) — (10,219)Amounts reclassified from accumulated other comprehensive income (loss), net of tax (1)— 2,077 — 2,077December 29, 2012, ending balance, net of tax$1,797 $(32,051) $212 $(30,042)Other comprehensive income (loss), net of tax (2)(161) 12,158 — 11,997Amounts reclassified from accumulated other comprehensive income (loss), net of tax (2)— 1,752 — 1,752January 4, 2014, ending balance, net of tax$1,636 $(18,141) $212 $(16,293)Other comprehensive income (loss), net of tax (3)(481) (18,416) — (18,897)Amounts reclassified from accumulated other comprehensive income (loss), net of tax (3)— 765 — 765January 3, 2015, ending balance, net of tax$1,155$(35,792)$212$(34,425)(1) For the fiscal year ended 2012, there was $2.1 million of actuarial loss recognized in the statements of operations as a component of net periodicpension cost. There was $10.3 million of unrecognized actuarial loss based on updated actuarial assumptions (see Note 9). There was no intraperiod incometax allocation and the deferred tax benefit was fully offset by a valuation allowance.(2) For the fiscal year ended 2013, there was $1.8 million (net of tax of $1.1 million) of actuarial loss recognized in the statements of operations as acomponent of net periodic pension cost. There was $12.2 million (net of tax of $7.8 million) of unrecognized actuarial gains based on updated actuarialassumptions included in other comprehensive income (see Note 9). We53allocated income tax expense to accumulated other comprehensive income (loss) to the extent income was recorded in accumulated other comprehensiveincome (loss) and we have a loss in continuing operations (see Note 5).(3) For the fiscal year ended 2014, there was $0.8 million of actuarial loss recognized in the statements of operations as a component of net periodicpension cost. There was $18.4 million of unrecognized actuarial loss based on updated actuarial assumptions (see Note 9). There was no intraperiod incometax allocation and the deferred tax benefit was fully offset by a valuation allowance.17. Unaudited Selected Quarterly Financial DataFiscal 2014 contained 52 weeks and fiscal 2013 contained 53 weeks. Our fiscal quarters are based on a 5-4-4 week period, with the exception of thefourth fiscal quarter of fiscal years containing 53 weeks, which are based on a 5-4-5 week period. First Quarter Second Quarter Third Quarter Fourth Quarter Three MonthsEndedApril 5,2014 Three MonthsEndedMarch 30,2013 Three MonthsEndedJuly 5,2014 Three MonthsEndedJune 29,2013 Three MonthsEndedOctober 4,2014 Three MonthsEndedSeptember 28,2013 Three MonthsEndedJanuary 3, 2015 Three MonthsEndedJanuary 4, 2014 (In thousands, except per share amounts)Net sales$443,944 $503,153 $531,494 $604,592 $549,845 $557,952 $454,110 $486,275Gross profit$52,676 $56,458 $62,033 $55,185 $64,580 $62,492 $49,815 $54,348Net (loss) income$(8,608) $(12,649) $3,236 $(22,306) $(860) $(3,206) $(7,640) $(2,457)Basic and dilutedweighted averagenumber of commonshares outstanding85,187 66,714 85,874 84,167 86,399 84,596 86,545 84,818Basic and diluted net(loss) income per shareapplicable to commonshares$(0.10) $(0.19) $0.04 $(0.27) $(0.01) $(0.04) $(0.09) $(0.03)18. Supplemental Condensed Consolidating Financial Statements The condensed consolidating financial information as of January 3, 2015, and January 4, 2014, and for fiscal 2014, fiscal 2013, and fiscal 2012 isprovided due to restrictions in our U.S. revolving credit facility that limit distributions by BlueLinx Corporation, our operating company and our wholly-owned subsidiary, to us; which, in turn, may limit our ability to pay dividends to holders of our common stock. Also included in the supplemental condensedconsolidated/combining financial statements are fifty-two single member limited liability companies, which are wholly owned by us (the “LLCsubsidiaries”). The LLC subsidiaries own certain warehouse properties that are occupied by BlueLinx Corporation, each under the terms of a master leaseagreement. The warehouse properties collateralize a mortgage loan and are not available to satisfy the debts and other obligations of either us or BlueLinxCorporation. Certain changes have been made to the prior year presentation to conform to the current year presentation.54The condensed consolidating statement of operations for BlueLinx Holdings Inc. for the fiscal year ended January 3, 2015, follows: BlueLinxHoldings BlueLinxCorporationand Subsidiaries LLCSubsidiaries Eliminations Consolidated (In thousands)Net sales $— $1,979,393 $26,329 $(26,329) $1,979,393Cost of sales— 1,750,289 — — 1,750,289Gross profit— 229,104 26,329 (26,329) 229,104Operating expenses: Selling, general, and administrative5,498 232,186 (5,260) (26,329) 206,095Depreciation and amortization— 6,405 3,068 — 9,473Total operating expenses5,498 238,591 (2,192) (26,329) 215,568Operating income (loss)(5,498) (9,487) 28,521 — 13,536Non-operating expenses: Interest expense— 13,688 13,083 — 26,771Other expense (income), net— 337 (12) — 325Income (loss) before provision for (benefit from) income taxes(5,498) (23,512) 15,450 — (13,560)Provision for (benefit from) income taxes(160) 22 450 — 312Equity income (loss) of subsidiaries(8,534) — — 8,534 —Net income (loss)$(13,872) $(23,534) $15,000 $8,534 $(13,872)The condensed consolidating statement of operations for BlueLinx Holdings Inc. for the fiscal year ended January 4, 2014, follows: BlueLinxHoldings BlueLinxCorporationand Subsidiaries LLCSubsidiaries Eliminations Consolidated (In thousands)Net sales $— $2,151,972 $27,363 $(27,363) $2,151,972Cost of sales— 1,923,489 — — 1,923,489Gross profit— 228,483 27,363 (27,363) 228,483Operating expenses: Selling, general, and administrative5,913 267,232 (5,115) (27,363) 240,667Depreciation and amortization— 5,700 3,417 — 9,117Total operating expenses5,913 272,932 (1,698) (27,363) 249,784Operating income (loss)(5,913) (44,449) 29,061 — (21,301)Non-operating expenses: Interest expense— 13,686 14,338 — 28,024Other expense (income), net— 318 (12) — 306Income (loss) before provision for (benefit from) income taxes(5,913) (58,453) 14,735 — (49,631)Provision for (benefit from) income taxes(157) (9,248) 392 — (9,013)Equity income (loss) of subsidiaries(34,862) — — 34,862 —Net income (loss)$(40,618) $(49,205) $14,343 $34,862 $(40,618)55The condensed consolidating statement of operations for BlueLinx Holdings Inc. for the fiscal year ended December 29, 2012, follows: BlueLinxHoldings BlueLinxCorporationand Subsidiaries LLCSubsidiaries Eliminations Consolidated (In thousands)Net sales $— $1,907,842 $28,330 $(28,330) $1,907,842Cost of sales— 1,677,772 — — 1,677,772Gross profit— 230,070 28,330 (28,330) 230,070Operating expenses: Selling, general, and administrative3,940 250,098 (9,712) (28,330) 215,996Depreciation and amortization— 5,040 3,525 — 8,565Total operating expenses3,940 255,138 (6,187) (28,330) 224,561Operating income (loss)(3,940) (25,068) 34,517 — 5,509Non-operating expenses: Interest expense— 12,159 15,998 — 28,157Other expense (income), net— 10 (17) — (7)Income (loss) before provision for (benefit from) income taxes(3,940) (37,237) 18,536 — (22,641)Provision for (benefit from) income taxes386 — — — 386Equity income (loss) of subsidiaries(18,701) — — 18,701 —Net income (loss)$(23,027) $(37,237) $18,536 $18,701 $(23,027) 56The condensed consolidating balance sheet for BlueLinx Holdings Inc. as of January 3, 2015, follows: BlueLinxHoldings Inc. BlueLinxCorporationandSubsidiaries LLCSubsidiaries Eliminations Consolidated (In thousands)Assets: Current assets: Cash$27 $4,495 $— $— $4,522Receivables— 144,537 — — 144,537Inventories— 242,546 — — 242,546Deferred income tax asset, net— — 50 (50) —Other current assets228 22,353 708 — 23,289Intercompany receivable74,071 30,634 — (104,705) —Total current assets74,326 444,565 758 (104,755) 414,894Property and equipment: Land and land improvements— 4,061 37,034 — 41,095Buildings— 11,367 78,794 — 90,161Machinery and equipment— 77,279 — — 77,279Construction in progress— 1,188 — — 1,188Property and equipment, at cost— 93,895 115,828 — 209,723Accumulated depreciation— (70,077) (34,379) — (104,456)Property and equipment, net— 23,818 81,449 — 105,267Investment in subsidiaries(78,264) — — 78,264 —Non-current deferred income tax assets, net— 551 — (50) 501Other non-current assets— 9,739 8,581 — 18,320Total assets$(3,938) $478,673 $90,788 $(26,541) $538,982Liabilities: Current liabilities: Accounts payable$606 $66,685 $— $— $67,291Bank overdrafts— 27,280 — — 27,280Accrued compensation23 5,620 — — 5,643Current maturities of long-term debt— — 2,679 — 2,679Deferred income tax liabilities, net— 568 — (50) 518Other current liabilities413 12,342 1,076 — 13,831Intercompany payable30,633 74,072 — (104,705) —Total current liabilities31,675 186,567 3,755 (104,755) 117,242Non-current liabilities: Long-term debt— 229,353 173,921 — 403,274Non-current deferred income taxes— — 50 (50) —Other non-current liabilities413 54,079 — — 54,492Total liabilities32,088 469,999 177,726 (104,805) 575,008Stockholders’ equity (deficit)/Parent’s investment(36,026) 8,674 (86,938) 78,264 (36,026)Total liabilities and equity (deficit)$(3,938) $478,673 $90,788 $(26,541) $538,982 57The condensed consolidating balance sheet for BlueLinx Holdings Inc. as of January 4, 2014, follows: BlueLinxHoldings Inc. BlueLinxCorporationandSubsidiaries LLCSubsidiaries Eliminations Consolidated (In thousands)Assets: Current assets: Cash$47 $4,987 $— $— $5,034Receivables— 150,297 — — 150,297Inventories— 223,580 — — 223,580Deferred income tax asset, net— — 397 (397) —Other current assets790 20,208 1,816 — 22,814Intercompany receivable68,454 26,374 — (94,828) —Total current assets69,291425,4462,213(95,225)401,725Property and equipment: Land and land improvements— 4,040 37,136 — 41,176Buildings— 10,839 79,243 — 90,082Machinery and equipment— 73,004 — — 73,004Construction in progress— 3,028 — — 3,028Property and equipment, at cost—90,911116,379— 207,290Accumulated depreciation— (64,557) (31,614) — (96,171)Property and equipment, net—26,35484,765— 111,119Investment in subsidiaries(47,735) — — 47,735 —Non-current deferred income tax assets, net— 1,221 — (397) 824Other non-current assets— 11,768 3,053 — 14,821Total assets$21,556$464,789$90,031$(47,887)$528,489Liabilities: Current liabilities: Accounts payable$1,080 $59,283 $— $— $60,363Bank overdrafts— 19,377 — — 19,377Accrued compensation— 4,173 — — 4,173Current maturities of long-term debt— — 9,141 — 9,141Deferred income tax liabilities, net— 1,220 — (397) 823Other current liabilities— 11,727 1,222 — 12,949Intercompany payable26,374 68,454 — (94,828) —Total current liabilities27,454164,23410,363(95,225) 106,826Non-current liabilities: Long-term debt— 211,193 176,045 — 387,238Non-current deferred income taxes— — 397 (397) —Other non-current liabilities— 40,323 — — 40,323Total liabilities27,454415,750186,805(95,622)534,387Stockholders’ equity (deficit)/Parent’s investment(5,898) 49,039 (96,774) 47,735 (5,898)Total liabilities and equity (deficit)$21,556$464,789$90,031$(47,887)$528,48958The condensed consolidating statement of cash flows for BlueLinx Holdings Inc. for the fiscal year ended January 3, 2015, follows (in thousands): BlueLinxHoldings Inc. BlueLinxCorporation LLCSubsidiaries Eliminations ConsolidatedCash flows from operating activities: Net (loss) income$(13,872) $(23,534) $15,000 $8,534 $(13,872)Adjustments to reconcile net (loss) income to cash (used in)provided by operating activities: Depreciation and amortization— 6,405 3,068 — 9,473Amortization of debt issue costs— 1,735 1,421 — 3,156Loss (gain) from sale of properties— — (5,251) — (5,251)Severance charges— 2,067 — — 2,067Restructuring payments— (2,805) — — (2,805)Deferred income tax benefit— 17 — — 17Pension expense— 901 — — 901Share-based compensation, excluding restructuring related1,590 2,250 — — 3,840Increase in restricted cash related to insurance and other— (263) — — (263)Decrease (increase) in prepaid assets89 (1,031) — — (942)Accrued compensation and other1,322 (2,857) (907) — (2,442)Equity in earnings of subsidiaries8,534 — — (8,534) —Intercompany receivable(5,617) (4,262) — 9,879 —Intercompany payable4,259 5,620 — (9,879) — (3,695) (15,757) 13,331 — (6,121)Changes in primary working capital components: Receivables— 5,760 — — 5,760Inventories— (18,966) — — (18,966)Accounts payable(376) 7,402 — — 7,026Net cash (used in) provided by operating activities(4,071) (21,561) 13,331 — (12,301)Cash flows from investing activities: Investment in subsidiaries4,359 806 (5,165) — —Property, plant and equipment investments— (3,016) — — (3,016)Proceeds from disposition of assets— 248 7,120 — 7,368Net cash provided by (used in) investing activities4,359 (1,962)1,955 — 4,352Cash flows from financing activities: Excess tax benefits from share-based compensation arrangements— (16) — — (16)Repurchase of shares to satisfy employee tax withholdings(210) (747) — — (957)Repayments on revolving credit facilities— (476,473) — — (476,473)Borrowings on revolving credit facilities— 494,794 — — 494,794Payments of principal on mortgage— — (9,220) — (9,220)Payments on capital lease obligations— (2,228) — — (2,228)(Decrease) increase in bank overdrafts— 7,902 — — 7,902Increase in restricted cash related to the mortgage— — (6,066) — (6,066)Proceeds from rights offering, less expenses paid(98) — — — (98)Debt issuance costs— (201) — — (201)Net cash provided by (used in) financing activities(308) 23,031 (15,286) — 7,437Increase (decrease) in cash(20)(492)—— (512)Balance, beginning of period47 4,987 — — 5,034Balance, end of period$27 $4,495 $— $— $4,522Supplemental cash flow information: Net income tax refunds (income taxes paid) during the period$— $40 $(250) $— $(210)Interest paid during the period$— $11,490 $11,657 $— $23,147Noncash transactions: Capital leases$— $1,108 $— $— $1,10859The condensed consolidating statement of cash flows for BlueLinx Holdings Inc. for the fiscal year ended January 4, 2014, follows (in thousands): BlueLinxHoldings Inc. BlueLinxCorporation LLCSubsidiaries Eliminations ConsolidatedCash flows from operating activities: Net (loss) income$(40,618) $(49,205) $14,343 $34,862 $(40,618)Adjustments to reconcile net (loss) income to cash (used in) providedby operating activities: Depreciation and amortization— 5,700 3,417 — 9,117Amortization of debt issue costs— 1,841 1,343 — 3,184Write-off of debt issuance costs— 119 — — 119Loss (gain) from sale of properties— 554 (5,774) — (5,220)Vacant property charges, net— 1,321 — — 1,321Severance charges— 5,607 — — 5,607Payments on modification of lease agreement— (300) — — (300)Deferred income tax benefit— (5) (397) 397 (5)Restructuring payments— (3,057) — — (3,057)Intraperiod income tax allocation related to the hourly pension plan— (8,894) — — (8,894)Pension expense— 4,591 — — 4,591Share-based compensation, excluding restructuring related904 2,318 — — 3,222Share-based compensation, restructuring related— 2,895 — — 2,895Increase in restricted cash related to insurance and other— (1,810) — — (1,810)Decrease (increase) in prepaid assets(14) (3,048) — — (3,062)Accrued compensation and other698 (3,959) 625 (397) (3,033)Equity (deficit) in earnings of subsidiaries34,862 — — (34,862) —Intercompany receivable5,527 2,440 — (7,967) —Intercompany payable(2,440) (5,527) — 7,967 — (1,081) (48,419) 13,557 — (35,943)Changes in primary working capital components: Receivables— 7,168 — — 7,168Inventories— 6,479 — — 6,479Accounts payable779 (17,973) (391) — (17,585)Net cash (used in) provided by operating activities(302) (52,745) 13,166 — (39,881)Cash flows from investing activities: Investment in subsidiaries(35,202) 38,663 (3,461) — —Property, plant and equipment investments— (4,912) — — (4,912)Proceeds from disposition of assets— 1,072 9,293 — 10,365Net cash provided by (used in) investing activities(35,202) 34,823 5,832 — 5,453Cash flows from financing activities: Excess tax benefits from share-based compensation arrangements— 16 — — 16Repurchase of shares to satisfy employee tax withholdings(3,192) — — — (3,192)Repayments on revolving credit facilities— (560,186) — — (560,186)Borrowings on revolving credit facilities— 599,968 — — 599,968Payments of principal on mortgage— — (19,038) — (19,038)Payments on capital lease obligations— (3,142) — — (3,142)(Decrease) increase in bank overdrafts— (16,007) — — (16,007)Increase in restricted cash related to the mortgage— — 40 — 40Proceeds from rights offering, less expenses paid38,715 — — — 38,715Debt issuance costs— (2,900) — — (2,900)Net cash provided by (used in) financing activities35,523 17,749 (18,998) — 34,274Increase (decrease) in cash19 (173) — — (154)Balance, beginning of period28 5,160 — — 5,188Balance, end of period$47 $4,987 $— $— $5,034Supplemental cash flow information: Net income taxes paid during the period$— $(61) $(271) $— $(332)Interest paid during the period$— $11,226 $13,480 $— $24,706Noncash transactions: Capital leases$— $5,069 $— $— $5,06960The condensed consolidating statement of cash flows for BlueLinx Holdings Inc. for the fiscal year ended December 29, 2012, follows (in thousands): BlueLinxHoldings Inc. BlueLinxCorporation LLCSubsidiaries Eliminations ConsolidatedCash flows from operating activities: Net (loss) income$(23,027) $(37,237) $18,536 $18,701 $(23,027)Adjustments to reconcile net (loss) income to cash (used in) provided byoperations: Depreciation and amortization— 5,040 3,525 — 8,565Amortization of debt issue costs— 2,471 1,275 — 3,746Gain from sale of properties— — (9,885) — (9,885)Gain from property insurance settlement— — (476) — (476)Vacant property charges, net— (30) — — (30)Payments on modification of lease agreement— (5,875) — — (5,875)Deferred income tax benefit— (20) — — (20)Restructuring payments— (6,084) — — (6,084)Pension expense— 3,942 — — 3,942Share-based compensation, excluding restructuring related528 2,269 — — 2,797Decrease (increase) in restricted cash related to insurance and other— 695 — — 695Decrease (increase) in prepaid assets189 700 — — 889Accrued compensation and other(1,160) 6,259 (561) — 4,538Equity (deficit) in earnings of subsidiaries18,701 — — (18,701) —Intercompany receivable(6,940) (10,332) — 17,272 —Intercompany payable10,332 6,940 — (17,272) — (1,377) (31,262) 12,414 — (20,225)Changes in primary working capital components: Receivables— (18,593) — — (18,593)Inventories— (44,482) — — (44,482)Accounts payable42 8,619 389 — 9,050Net cash (used in) provided by operating activities(1,335) (85,718) 12,803 — (74,250)Cash flows from investing activities: Investment in subsidiaries1,862 154 (2,016) — —Property, plant and equipment investments— (2,826) — — (2,826)Proceeds from disposition of assets— 997 18,198 — 19,195Net cash provided by (used in) investing activities1,862 (1,675) 16,182 — 16,369Cash 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 — — 550,270Principal payments on mortgage— — (37,272) — (37,272)Payments on capital lease obligations— (2,259) — — (2,259)Increase in bank overdrafts— 13,020 — — 13,020Decrease in restricted cash related to the mortgage— — 9,970 — 9,970Debt financing costs— — (1,683) — (1,683)Net cash (used in) provided by financing activities(526) 87,682 (28,985) — 58,171Increase in cash1 289 — — 290Cash balance, beginning of period27 4,871 — — 4,898Cash and cash equivalents balance, end of period$28 $5,160 $— $— $5,188Supplemental cash flow information: Net income tax refunds (income taxes paid) during the period$— $37 $(545) $— $(508)Interest paid during the period$— $9,309 $14,979 $— $24,288Noncash transactions: Capital leases$— $5,238 $— $— $5,23861The condensed consolidating statement of stockholders’ equity (deficit) for BlueLinx Holdings Inc. for fiscal 2012, fiscal 2013, and fiscal 2014 follows: BlueLinxHoldings Inc. BlueLinxCorporationand Subsidiaries LLCSubsidiaries Eliminations Consolidated (In thousands)Balance, December 31, 2011$8,374 $83,626 $(124,175) $40,549 $8,374Net (loss) income (23,027) (37,237) 18,536 18,701 (23,027)Foreign currency translation adjustment, net of tax103 103 — (103) 103Unrealized loss (income) from pension plan, net of tax(8,245) (8,245) — 8,245 (8,245)Issuance of restricted stock, net of forfeitures19 19 — (19) 19Compensation related to share-based grants2,730 — — — 2,730Impact of net settled shares for vested grants(526) — — — (526)Other(20) — — — (20)Net transactions with the Parent— 2,337 (2,017) (320) —Balance, December 29, 2012$(20,592) $40,603 $(107,656) $67,053 $(20,592)Net (loss) income (40,618) (49,205) 14,343 34,862 (40,618)Foreign currency translation adjustment, net of tax(161) (161) — 161 (161)Unrealized income (loss) from pension plan, net of tax13,910 13,910 — (13,910) 13,910Issuance of restricted stock, net of forfeitures6 6 — (6) 6Issuance of performance shares6 6 — (6) 6Issuance of stock related to the rights offering, net of expenses38,613 — — — 38,613Compensation related to share-based grants6,117 — — — 6,117Impact of net settled shares for vested grants(3,193) — — — (3,193)Excess tax benefits from share-based compensationarrangements16 — — — 16Other(2) — — — (2)Net transactions with the Parent— 43,880 (3,461) (40,419) —Balance, January 4, 2014$(5,898) $49,039 $(96,774) $47,735 $(5,898)Net (loss) income (13,872) (23,534) 15,000 8,534 (13,872)Foreign currency translation adjustment, net of tax(481) (481) — 481 (481)Unrealized income (loss) from pension plan, net of tax(17,651) (17,651) — 17,651 (17,651)Issuance of restricted stock, net of forfeitures18 — — — 18Issuance of performance shares10 — — — 10Issuance of stock related to the rights offering, net of expenses— — — — —Compensation related to share-based grants2,896 — — — 2,896Impact of net settled shares for vested grants(963) — — — (963)Excess tax benefits from share-based compensationarrangements(16) — — — (16)Other(69) — — — (69)Net transactions with the Parent— 1,301 (5,164) 3,863 —Balance, January 3, 2015$(36,026) $8,674 $(86,938) $78,264 $(36,026) 62ITEM 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 ProceduresWe 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 ReportingManagement’s Report on Internal Control Over Financial Reporting and the Report of Independent Registered Public Accounting Firm thereon are setout in Item 8 of this Annual Report on Form 10-K.Changes in Internal Control over Financial ReportingNo change in our internal control over financial reporting occurred during the fiscal quarter ended January 3, 2015, 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 July 7, 2014, reporting that he was not aware of any violation by us of the NYSE’s CorporateGovernance listing standards. ITEM 9B. OTHER INFORMATIONNone.63PART III ITEM 10. DIRECTORS, EXECUTIVE OFFICERS, AND CORPORATE GOVERNANCECertain information required by this Item will be set forth in our definitive proxy statement for the 2015 Annual Meeting of Stockholders of BlueLinxHoldings Inc. to be held on May 21, 2015, and is incorporated herein by reference. Information regarding executive officers is included under Item 1 of thisreport and is incorporated herein by reference. ITEM 11. EXECUTIVE COMPENSATIONInformation regarding compensation of officers and directors of BlueLinx Holdings Inc. is set forth under the captions entitled “CompensationDiscussion and Analysis,” “Compensation Committee Report,” and “Compensation of Executive Officers” in the Proxy Statement, and is incorporated hereinby reference.ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERSSecurity Ownership of Certain Beneficial Owners, Management, and Related Stockholders Matters Information regarding ownership of BlueLinxHoldings Inc. common stock is set forth under the captions entitled “Security Ownership of Management and Certain Beneficial Owners” and “Section 16(a)Beneficial Ownership Reporting Compliance” in the Proxy Statement, and is incorporated herein by reference.Equity Compensation Plan InformationThe 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 January 3, 2015. Our stockholder-approved equity compensation plans are the 2004 Plan and the 2006 Plan. Wedo 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(1) Weighted-AverageExercise Price ofOutstandingOptions, Warrantsand Rights Number of SecuritiesRemainingAvailable for FutureIssuance UnderEquity CompensationPlans(Excluding SecuritiesReflected inColumn (a)) (2)Equity compensation plans approved by security holders 1,940,645 $5.05 4,386,542Equity compensation plans not approved by security holders — n/a —Total 1,940,645 $5.05 4,386,542(1)Includes a maximum of 1,102,091 shares of common stock that may be issued upon the achievement of certain performance conditions underoutstanding performance share awards and 54,054 of time-based restricted stock units that may be issued upon meeting the contractual term as ofJanuary 3, 2015.(2)Reflects shares remaining available for issuance under the 2004 Plan and the 2006 Plan. If any shares of our common stock are covered by an awardunder our plans that is canceled, forfeited, or otherwise terminates without delivery of shares (including shares surrendered or withheld for paymentof the exercise price of an award or taxes related to an award), then such shares will again be available for issuance under the 2004 Plan and the 2006Plan. Because 2,189,177 shares of restricted stock remain unvested and subject to forfeiture, these shares could again be available for issuance.Other information required by this item is set forth under the heading “Security Ownership of Management and Certain Beneficial Owners” in the ProxyStatement, and is incorporated herein by reference.ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCECertain Relationships, Related Transactions, and Director Independence Information regarding certain relationships, related transactions with BlueLinxHoldings Inc., and director independence is set forth under the captions entitled “Certain Relationships and Related Transactions,” in the Proxy Statement,and is incorporated herein by reference.64ITEM 14. PRINCIPAL ACCOUNTANT FEES AND SERVICESInformation regarding principal accountant fees and services is set forth under the caption “Certain Relationships and Related Transactions” in the ProxyStatement, and is incorporated herein by reference.65PART IV ITEM 15. EXHIBITS AND 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.66ExhibitNumber Item3.1 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 signaturepages thereto (C)10.1 Asset Purchase Agreement, dated as of March 12, 2004, by and among Georgia-Pacific Corporation, Georgia-Pacific BuildingMaterials Sales, Ltd. and BlueLinx Corporation (C) 10.2 First Amendment to Asset Purchase Agreement, dated as of May 6, 2004, by and among Georgia-Pacific Corporation, Georgia-PacificBuilding Materials Sales, Ltd. and BlueLinx Corporation (C) 10.3 Form of Director and Officer Indemnification Agreement (incorporated by reference to Form 8-K filed with the Securities andExchange Commission on January 13, 2011) 10.4 BlueLinx Holdings Inc. Amended and Restated Short-Term Incentive Plan (incorporated by reference to Attachment B to theDefinitive Proxy Statement for the 2011 Annual Meeting of Stockholders, filed with the Securities and Exchange Commission onApril 18, 2011) 10.5 BlueLinx Holdings Inc. 2004 Long Term Equity Incentive Plan (C) 10.6 BlueLinx Holdings Inc. 2004 Long-Term Equity Incentive Plan Form of Restricted Stock Award Agreement (incorporated by referenceto Form 8-K filed with the Securities and Exchange Commission on January 11, 2008) 10.7 Amended and Restated Bluelinx Holdings Inc. 2006 Long-Term Equity Incentive Plan (as amended through May 17, 2012 andrestated solely for purposes of filing pursuant to Item 601 of Regulation S-K) (incorporated by reference to Appendix A to theDefinitive Proxy Statement for the 2012 Annual Meeting of Stockholders, filed with the Securities and Exchange Commission onApril 16, 2012) 10.8 BlueLinx Holdings Inc. 2006 Long-Term Equity Incentive Plan Nonqualified Stock Option Award Agreement (incorporated byreference to Form 8-K filed with the Securities and Exchange Commission on June 9, 2006)10.9 BlueLinx Holdings Inc. 2006 Long-Term Equity Incentive Plan Form of Performance Share Award Agreement (incorporated byreference to Form 8-K filed with the Securities and Exchange Commission on January 4, 2013) 67ExhibitNumber Item10.10 Amendment No. 1 to BlueLinx Holdings Inc. Amended and Restated 2006 Long-Term Equity Incentive Plan Performance ShareAward Agreement (incorporated by reference to Form 8-K filed with the Securities and Exchange Commission on January 3, 2014) 10.11 BlueLinx Holdings Inc. Amended and Restated 2006 Long-Term Equity Incentive Plan Restricted Stock Award Agreement(incorporated by reference to Form 8-K filed with the Securities and Exchange Commission on January 17, 2014)10.12 BlueLinx Holdings Inc. 2006 Long-Term Equity Incentive Plan Restricted Stock Unit Award Agreement for Executives andEmployees (incorporated by reference to Form 8-K filed with the Securities and Exchange Commission on December 17, 2014)10.13 BlueLinx Holdings Inc. 2006 Long-Term Equity Incentive Plan Restricted Stock Unit Award Agreement for Non-Employee Directors(incorporated by reference to Form 8-K filed with the Securities and Exchange Commission on December 17, 2014)10.14 Canadian Credit Agreement, dated August 12, 2011, by and among Bluelinx Canada, CIBC Asset-Based Lending Inc. and the lendersfrom time to time parties thereto (incorporated by reference to Form 8-K filed with the Securities and Exchange Commission on August16, 2 011)10.15 First Amending Agreement among BlueLinx Corporation and Canadian Imperial Bank of Commerce as successor to CIBC Asset-Based Lending Inc., dated August 16, 2013 (incorporated by reference to Form 8-K filed with the Securities and ExchangeCommission on August 19, 2013)10.16† Loan and Security Agreement, dated as of June 9, 2006, between the entities set forth therein collectively as borrower and GermanAmerican Capital Corporation as Lender (incorporated by reference to Form 10-Q filed with the Securities and Exchange Commissionon 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 asborrower and German American Capital Corporation as Lender (incorporated by reference to Form 8-K filed with the Securities andExchange Commission on September 20, 2012) 10.18 Guaranty of Recourse Obligations, dated as of June 9, 2006, by BlueLinx Holdings Inc. for the benefit of German American 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 CapitalCorporation (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 andthe other signatories listed therein (incorporated by reference to Form 10-Q filed with the Securities and Exchange Commission onNovember 6, 2009) 10.21 Second Amendment to Amended and Restated Loan and Security Agreement, dated August 4, 2006, by and between BlueLinxCorporation, Wells Fargo, as successor in interest to Wachovia, and the other signatories listed therein, dated July 7, 2010(incorporated by reference to Form 8-K filed with the Securities and Exchange Commission on July 7, 2010) 68ExhibitNumber Item10.22 Third Amendment to Amended and Restated Loan and Security Agreement, dated August 4, 2006, by and between BlueLinxCorporation, Wells Fargo, as successor in interest to Wachovia, and the other signatories listed therein, dated May 10,2011(incorporated by reference to Form 8-K filed with the Securities and Exchange Commission on May 12, 2011) 10.23 Fourth Amendment to Amended and Restated Loan and Security Agreement, dated August 4, 2006, by and between BlueLinxCorporation, Wells Fargo, as successor in interest to Wachovia, and the other signatories listed therein, dated August 11, 2011(incorporated by reference to Form 8-K filed with the Securities and Exchange Commission on August 16, 2011)10.24 Fifth Amendment to Loan and Security Agreement, dated July 14, 2011, by and between BlueLinx Corporation and certain of itssubsidiaries and U.S. Bank National Association in its capacity as trustee for the registered holders of Wachovia Bank CommercialMortgage Trust, Commercial Mortgage Pass Through Certificates, Series 2006-C 27, as successor in interest to German AmericanCapital Corporation (incorporated by reference to Form 8-K filed with the Securities and Exchange Commission on July 14, 2011)10.25 Sixth Amendment to Amended and Restated Loan and Security Agreement by and among Wells Fargo Bank, National Association, anational banking association, in its capacity as administrative and collateral agent for the Lenders (incorporated by reference to Form8-K filed with the Securities and Exchange Commission on June 28, 2013)10.26 Seventh Amendment to Amended and Restated Loan and Security Agreement, dated March 14, 2014, by and among Wells FargoBank, National Associations, the Lenders named therein, BlueLinx Corporation, BlueLinx Florida LP, BlueLinx Florida Holding No.1 Inc. and BlueLinx Florida Holding No. 2 Inc. (incorporated by reference to Exhibit 10.1 to the Company’s Form 8-K filed March 17,201410.27 The Ninth Amendment, dated August 14, 2014, to the Amended Loan and Security Agreement, dated August 4, 2006, as amended byand between BlueLinx Corporation, Wells Fargo, and the other signatories listed therein (incorporated by reference to Exhibit 10.1 tothe Company’s Form 8-k filed on August 14, 2014) 10.28 Fifth Amendment to Amended and Restated Loan and Security Agreement and Lender Joinder , dated March 29, 2013 (incorporatedby reference to Form 8-K filed with the Securities and Exchange Commission on March 29, 2013) 10.29 Lender Joinder Agreement by and between PNC Bank, National Association and BlueLinx Corporation , dated June 28, 2013(incorporated by reference to Form 8-K filed with the Securities and Exchange Commission on June 28, 2013) 10.30 Employment Agreement between BlueLinx Corporation and Mitchell Lewis, dated January 15, 2014 (incorporated by reference toForm 8-K filed with the Securities and Exchange Commission on January 17, 2014) 10.31 Employment Agreement between BlueLinx Corporation and Susan C. O’Farrell, dated May 5, 2014 (incorporated by reference to Form10-Q filed with the Securities and Exchange Commission on May 8, 2014) 69ExhibitNumber Item10.32 Third Amended and Restated Employment Agreement, dated December 9, 2013 between BlueLinx Corporation and Robert McKagen(incorporated by reference to Form 8-K filed with the Securities and Exchange Commission on December 13, 2013) 10.33 Employment Agreement between BlueLinx Corporation and Sara Epstein, dated May 15, 2013 (incorporated by reference to Form 8-Kfiled with the Securities and Exchange Commission on May 17, 2013) 10.34 Separation Agreement between George Judd and BlueLinx Corporation, dated June 5, 2013 (incorporated by reference to Form 8-Kfiled with the Securities and Exchange Commission on June 11, 2013) 10.35 Release Agreement by and between Ned M. Bassil and BlueLinx Corporation, dated December 30, 2013 (incorporated by reference toForm 8-K filed with the Securities and Exchange Commission on January 3, 2014) 10.36 Release Agreement by and between the Company and H. Douglas Goforth, dated May 30, 2014 (incorporated by reference to Exhibit10.1 to the Company’s Form 8-K filed on June 5, 2014) 21.1 List of subsidiaries of the Company * 23.1 Consent of Ernst & Young LLP* 31.1 Certification of Mitchell B. Lewis, Chief Executive Officer, pursuant to Section 302 of the Sarbanes-Oxley Act of 2002* 31.2 Certification of Susan C. O’Farrell, Chief Financial Officer and Treasurer, pursuant to Section 302 of the Sarbanes-Oxley Act of 2002* 32.1 Certification of Mitchell B. Lewis, Chief Executive Officer, pursuant to Section 906 of the Sarbanes-Oxley Act of 2002* 32.2 Certification of Susan C. O’Farrell, 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 January 3, 2015,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 ofCash Flows and (v) Notes to Consolidated Financial Statements.**70 †Portions of this document were omitted and filed separately with the SEC pursuant to a request for confidential treatment inaccordance with Rule 24b-2 of the Exchange Act. *Filed herewith. **Pursuant to Rule 406T of Regulation S-T, these interactive data files are deemed not to be “filed” or part of a registrationstatement or prospectus for purposes of Sections 11 or 12 of the Securities Act of 1933, as amended, or Section 18 of theSecurities Act of 1934, as amended, and otherwise are not subject to liability under these sections. (A)Previously filed as Appendix B to the proxy statement for the 2012 Annual Meeting of Stockholders filed on Schedule 14A withthe Securities and Exchange Commission on April 16, 2012. (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 the Securities 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 the Securities and Exchange Commission on October 1, 2004.71SignaturesPursuant 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/ Mitchell B. LewisMitchell B. LewisPresident and Chief Executive OfficerDate: February 19, 2015Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of theregistrant and in the capacities and on the dates indicated.SignatureCapacityDateName /s/ Mitchell B. LewisPresident, Chief Executive Officer, and DirectorFebruary 19, 2015Mitchell B. Lewis /s/ Susan C. O’FarrellSenior Vice President, Chief Financial Officer, Treasurer(Principal Accounting Officer)February 19, 2015Susan C. O’Farrell /s/ Roy W. HaleyChairmanFebruary 19, 2015Roy W. Haley /s/ Kim S. FennebresqueDirectorFebruary 19, 2015Kim S. Fennebresque /s/ Richard S. GrantDirectorFebruary 19, 2015Richard S. Grant /s/ Ronald E. KolkaDirectorFebruary 19, 2015Ronald E. Kolka /s/ Steven F. MayerDirectorFebruary 19, 2015Steven F. Mayer /s/ Gregory S. NixonDirectorFebruary 19, 2015Gregory S. Nixon /s/ Alan H. SchumacherDirectorFebruary 19, 2015Alan H. Schumacher /s/ M. Richard WarnerDirectorFebruary 19, 2015M. Richard Warner 72Exhibit 31.1 CERTIFICATION REQUIRED BY RULE 13a-14(a) OR RULE 15d-14(a) OF THE SECURITIESEXCHANGE ACT OF 1934 I, Mitchell B. Lewis 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 theeffectiveness of 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 recentfiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materiallyaffect, 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 controlover financial reporting.February 19, 2015 /s/ Mitchell B. Lewis Mitchell B. Lewis BlueLinx 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 1934 I, Susan C. O'Farrell 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 theeffectiveness of 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 recentfiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materiallyaffect, 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 controlover financial reporting.February 19, 2015 /s/ Susan C. O'Farrell Susan C. O'Farrell BlueLinx 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 2002 In connection with the annual report of BlueLinx Holdings Inc. (the “Company”) on Form 10-K for the year ending January 4, 2014, as filed with the UnitedStates Securities and Exchange Commission on the date hereof (the “Report”), I, Mitchell B. Lewis, 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 19, 2015By:/s/ Mitchell B. Lewis Mitchell B. Lewis 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 2002 In connection with the annual report of BlueLinx Holdings Inc. (the “Company”) on Form 10-K for the year ending January 4, 2014, as filed with the UnitedStates Securities and Exchange Commission on the date hereof (the “Report”), I, Susan C. O'Farrell, Chief Financial Officer and Treasurer of the Company, dohereby 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 19, 2015By:/s/ Susan C. O'Farrell Susan C. O'Farrell Senior Vice President, Chief Financial Officer, and Treasurer 

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