Good morning. My name Ashley and I will be your conference operator today. At this time, I would like to welcome everyone to the BlueLinx's First Quarter Earnings Release Conference Call. All lines have been placed on mute to prevent any background noise. After the speakers' remarks there will be a question-and-answer period. (Operator Instructions). As a reminder, ladies and gentlemen, this conference is being recorded today Wednesday, May 6, 2009. Thank you. I would now like to introduce Mr. Russ Zukowski with Investor Relations. Mr. Zukowski, you may begin your conference.

Thank you, operator, and welcome everyone to the BlueLinx's first quarter 2009 conference call. With us this morning are George Judd, Chief Executive Officer; and Doug Goforth, Chief Financial Officer. Our press release was issued earlier this morning. For those of you who do not have a copy, it is available on the Investor Relations section of the company's website www.bluelinxco.com. Before starting the call, I need to refer you to our Safe Harbor statement. I would like to remind everyone that on today's, call management may make forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, including all statements concerning future or unexpected events or results. Actual results could differ materially from those projected in the company's forward-looking statements due to known and unknown risks and uncertainties. The discussion of factors that may affect future results is provided in the company's filings with the Securities and Exchange Commission. BlueLinx undertakes no obligation to publicly update or revise any forward-looking statements contained in these presentations based on new information or otherwise except as required by law. With that requirement completed, I'd like to remind our listeners that we have posted slides on our website. We will be referring to these slides during this call and we encourage you to view them during our remarks. Additionally, the slide package contains an appendix of supplementary tables available for your review. Now, let me turn the call over to our CEO, George Judd.

Thank you, Russ. And thank you everyone for joining us this morning for the BlueLinx's first quarter earnings conference call. Our first quarter results reflected extremely difficult business environment and weak demand for housing and industrial products across the country. The market continued to deteriorate throughout the quarter. BlueLinx stayed focused on managing our costs and providing our customers top quality service to help them through this extremely difficult time. For the first quarter, we reported a net loss of $1.95 per diluted share, which includes $1.44 of predominantly non-recurring non-cash charges. These charges include a non-cash deferred tax valuation allowance and interest and restructuring charges that Doug will detail later on the call. Our operating results for the first quarter reflected the continued weakening demand environment, with housing starts declining by 51% from the prior year. Gross margins remained unchanged at 10.9%, in spite of declining structural prices, a result of our focus on price discipline and margin improvement. We continue to tightly manage all costs, resulting in a reduction in operating expenses of $22.9 million. We reduced our debt by $60 million and ended the first quarter with a cash balance of $60 million. At quarter end, our net debt was $313 million. We had approximately $180 million in excess availability at the end of the quarter. We continue to remain focused on building long-term business relationships with our customers and suppliers. We are working with many strategic customers to expand our product penetration, provide reliable just-in-time service and to develop new and additional ways to enhance our services. We also continue to invest in and utilize technology to improve our services to our customers and vendors. We recently launched an improved website that will allow us to better serve our vendors and our customers. This improved website…

Thank you, George. Good morning everyone. As George mentioned earlier and as noted in our press release this morning, our results included the following special items; Valuation allowance on U.S. deferred tax assets of $40.2 million or $1.29 per diluted share. At the end of the first quarter, BlueLinx provided a valuation allowance for 100% of its U.S. deferred tax assets, resulting in a non-cash charge of $40.2 million. As a result, the company's tax provisions in future periods will consist of income taxes on earnings of its Canadian operations and certain state income taxes, but generally will not include any income tax benefit relating to its U.S operations. The company may still utilize available taxable carry forwards to offset future taxable income generated in the U.S. A non-cash interest charge of $2.9 million or $0.10 per diluted share associated with the company reducing its outstanding borrowings under its revolving credit facility resulting in an after-tax charge of approximately $2.9 million related to the ineffective portion of its interest rate swaps. A non-cash interest charge of $900,000 or $0.03 per diluted share for the write-off of a portion of our debt issuance cost related to the company reducing the sealing on its revolving credit facility from $800 million to $500 million resulting in a $900,000 charge. Under the current operating environment, we believed it was prudent to reduce the sealing by $300 million, which will provide annualized savings of approximately $750,000 in interest expense. The company also incurred restructuring and severance expense of $700,000 or $0.02 per diluted share associated with our ongoing actions to lower the company's cost structure. Turning to slide seven. Overall sales for the first quarter ended April 4th, totaled $407 million, down 43% or $310 million from first quarter 2008. Specialty sales declined 34% from…

Thanks Doug. Now we continue to operate in a weak economy and it is the worst housing market on record where the last period over period increase in housing was in March 2006. Our primary focus remains on diligently managing cash and our working capital and working with our customers and suppliers to ensure we are the supply chain choice for all of them. We have continued to take actions since the downturn began to right size our cost structure and believe our financial position and liquidity are a competitive advantage. I feel we're in a trough... in the trough year for the housing -- correction. And although the quick and strong rebound is not predicted, I do feel the worst is just behind us. I believe our efforts will position BlueLinx to participate in that rebound as a leading building products distributor in United States. With that, we'd like to open the call to questions.

(Operator Instructions). Our first question comes from Steve Chercover with D.A. Davidson.

Good morning. Didn't think my fingers were that fast.

Hi Steve.

My first question. Can you maybe elaborate or discuss the competitive landscape. How are the things changing amongst the distributors? Because most of them are not publics. We don't really know what's going on.

Yes. You don't really know what's going on and quite frankly we don't know either because our visibility is not quite as clear. I think I heard a few calls ago the biggest surprise that I've had is the fortitude of many distributors is to survive, if not prosper in this economic period. But it's tough for everybody. There's been lots of locations closed. They continue to close. There's been rationalizations of inventories and exiting our specific business by market. And we continue to evaluate each one of those situations and changes as an opportunity and adjust our strategy by market accordingly. But it's tough out there for everybody. And then on the customer front, there has been over 500 customer locations that have closed or consolidated since the peak. And we have to remember that peak is now over 39 month ago.

Sure. What I mean, you guys are clearly surviving but I don't think anyone would say you're prospering. How do you think some other guys if I heard you right are prospering in this environment.

Well, it's regional specialty business and that's just speculation. I also said our visibility into their performance is subject to the same visibility that many of you have. So we have loss in business in some particular markets and I'd have view that as them prospering. But we've managed our margins. And we've shared with you two years ago that we were going to manage our business profitably. We're going to walk from some unprofitable business and if it's profitable for our competitor that we don't have visibility into. That's just pure speculation on my part.

Got you. And also could you please elaborate on GP's decision to pay more than $18 million. Are they just trying to be in a position where they wanted to close a mill. They could do so and you wouldn't be able to say what panels at dislocation.

Yes, it's a complex agreement and arrangement. And as I've said in the prepared comments it was written back when things were very, very different. So their commitment to supply us with product and our inability to buy from others. And they decided that it was a good time to try to change that. And we began negotiations to do that. We've been working for 2.5 years to try to come up with something that works in the environment, kept on progressively getting worse. So, this was the option that we chose and we've chose it together. And we're still a key customer of theirs and they're a key supplier of ours and I expect that relationship to continue.

Sounds like a pretty good deal from your end. Have your cake and eating it too. And I guess my last question would be for Doug just to make sure I understand on the loss carry forward. Did you have really any profits that you could have gone back to claim from a tax perspective maybe prior to the IPO?

We have... for 2004 and 2005; we have approximately $89 million of taxable income. If anything is done on a five year carry back, we would be able to benefit from that. In addition to that, we will be carrying back our 2008 losses we had carried back available for from '06 and '07. So we will be getting a tax refund probably in the second quarter of this year between Federal and State, probably approximately $12 million. Does that clarify for you, Steve?

Pretty much, yes. So going forward, its just you got a sort of making money to crystallize those tax benefits.

Congress passed us the five-year carry back.

Great. Thanks. I'll get back in the queue.

Our next question comes from Alex Tobshe (ph) with Goldman Sachs.

Good morning. Thanks for taking my question. My first question is around geographic demand trends, whether or not you're seeing any pockets of weakness across different regions of the U.S. that you're currently selling into.

Pockets of more severe weakness?

More severe. Yes, exactly.

There is weakness everywhere. Yes. The floor market remains very, very weak. Phoenix in Las Vegas continue to be very, very weak and parts of California are very, very weak. That being said, probably the only market where there has been new housing activity that's measurably improved is kind of the Northern Mid-Atlantic around Washington. And that was one of the more severely declining markets couple of years back. So we have... found just in that market and most severely impacted markets were the ones that grew the highest.

That's interesting. And just want to get a sense of how should we be thinking about impact to volumes as a result of the termination of the GP agreement, especially from a near term point of view?

Yes. Well, we had arrangements with Georgia-Pacific that they would supply us basically structural products, plywood and OSB. And that's really what the supply agreement had evolved to since we had carved that into lumbar separately, announced a few months back. With those structural products, there are many other producers and we're optimistic that we will have the ability to maintain and if not grow, our structural business not only with Georgia-Pacific but with other producers.

Okay. And that from a seasonal perspective, we tend to see a pickup in building activities as well as with products prices here in the spring and in December months. Have you started to see any of that here. So the first part of the spring is there an anticipation that you will see any of that this year given the weakness in the overall market.

In the markets that have winter, the severe winter markets, there's always going to be a slight seasonal up tick and we have experienced some of that. But it's not what we would traditionally see in a normalized housing market.

And then lastly on working capital, the company did a great job of reducing working capital and it being a source of cash for them in 2008. How are you thinking about your working capital changes here in 2009? Do you anticipate it to be a source of cash for you in 2009 as well? Thanks.

Our working capital levels particularly at the end of first quarter were at extremely low levels on inventory, although the guys at the operations surprised me almost every week in how well that they're doing and controlling our inventory. So we're close to the bottom. So I wouldn't see that as a significant opportunity for us in 2009.

Okay. Thank you.

Anytime.

(Operator Instructions). And there are no further questions. I will now turn the conference over to BlueLinx for any closing remarks.

Yeah, thank you, operator. Thanks everybody for joining our call. We look forward to talking to you again next quarter.

This concludes today's BlueLinx's first quarter earnings release conference call. You may now disconnect.