Good morning. My name is Tunica and I will be your conference operator today. At this time, I would like to welcome everyone to the Second Quarter Investor Relations 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 session [Operator Instructions] Thank you. Ms. Natalie Poulos, you may begin your conference.

Thank you, Tunica and good morning everyone. We appreciate you joining us for the BlueLinx second quarter 2016 earnings conference call. This call is being webcast on the company's website at www.bluelinxco.com. The earnings release and presentation slides for this call can be found in the Investor Relations section of the company's website. Joining us on our call today are Mitch Lewis, CEO and Susan O'Farrell, CFO. I will also remind you that this presentation includes forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, including statements about our future operations and financial performance. These statements are subject to risks and uncertainties that could cause our actual results to differ materially from those provided, including, but not limited to those identified in our press release and discussed in our filings within the SEC. Forward-looking statements speak only as of the date of this presentation and we undertake no obligation to revise them in light of new information and today's presentation includes references to non-GAAP financial measures. With that, I'll turn the call over to Mitch.

Thank you Natalie and good morning. We are very pleased to once again report a good quarter for BlueLinx, while we have a net loss $3.1 million it would have exceeded $4 million of net income without the $7.7 million and charges associated with our facility closures and inventory rationalization. Although, these charges hurt us in the second quarter, we fully expect our net income to be positively impacted well in excess of these charges in the second half of 2016 as we sell the properties associated with the facility closures. The good news is that our adjusted EBITDA for the second quarter was $12.7 million a $2.9 million improvement from the second quarter of 2015. Our adjusted EBITDA for the quarter is actually our best quarterly performance in the last eight years and continues the strong performance we delivered in the first quarter. We were particularly pleased with our ability to maintain the momentum we have enjoyed over the last four quarters in light of the time and energy spent on the important operational initiatives we embarked on in the second quarter. As we discussed previously, a strategic priority for BlueLinx is to reduce our leverage and over the last few months we have made great progress. We made the decision during the second quarter to close four distribution centers that were generating low returns on invested capital. In addition, we exited our Canadian operation, which was basically a brokerage business with the sales office based in Vancouver. All of these facilities have now been closed on schedule and our inventory recovery from these closures exceeded our expectations. The closures will have an adverse impact on our revenue and EBITDA as they represented approximately a $130 million in annual revenue and $2 million in annual EBITDA. Our strategy of…

Thank you Mitch and good morning everyone. It is a pleasure for me to speak to you today and to review our second quarter results. On Page 6, let’s review some of our highlights before we get into the more detail review of our results. As Mitch mentioned, we are advancing our strategic initiative and successfully executing our strategic product deployment, facility optimization and real estate monetization efforts. Taking these initiatives into account, this quarter was a pivotal quarter for us and one that we believe will pay long-term benefits. [indiscernible] sales were down for the quarter, our same country sales were up significantly by $8.3 million from this time a year ago presenting centers that was also a unit volume increase of 4.1%. When we look at our second quarter performance, we had a net loss of $3.1 million which was largely impacted by the strategic initiative costs we incurred of $7.7 million. Although we reported a net loss of $3.1 million this quarter, we reported more EBITDA in this quarter than we did since 2008. A really terrific quarter for us. Adjusted EBITDA was $12.7 million up $2.9 million from the same period a year ago. Our debt principal balance is down $63.6 from the same period a year ago. our mortgage principal was down $10.4 million and our [indiscernible] revolver balance was down by $53.2 million with the property sales we generated from our real estate monetization efforts previously mentioned, we expect to meet our principal payment reduction obligation of $60 million by July 2017. Moving to Page 7, our revenues for the quarter on a reported basis as well as comparable same center basis we show you on this table. Revenue for the second quarter ended was $509 million, with an increase in new volumes of…

[Operator Instructions] Your first question comes from the line of [Mitchell Scott] (Ph).

Looks like really god progress on all across the Board. So just appreciate the color on kind of lumping all of the capital and debt reduction and that shows together. So thinking about that I just want to make sure I kind of heard you guys clearly. So the mortgage principal balance of about $159 million, the reasonable effect of that, you take about $60 off of that around Q1 of 2017?

Yes by Q1 of 2017, is how I described that. By the end of Q1 should, say.

Okay helpful, and then on the revolver, a couple of moving pieces on there and I know that there is going to be some seasonality. But when you put the skew rationalization initiatives together in there and some of the inventory run off from sold distribution centers. Can you sort of aggregate those anticipated effects and sort of give us an estimate on what the revolver might look like around Q4 or Q1 and the winter? Susan O’Farrell: So I’ll just kind of walk you through some of the numbers we have shared and see if we get you there, but when you think about facility closers, we sold through inventory there that we would have selling to anyway, may be at slightly faster pace. So the benefit there to revolver is converting the inventory more quickly to receivables. So there is a short-term benefit in the timing of that, but if are you looking towards the end of the year, obviously there is an overall and working capital reduction related to those facilities. And then, thus far, we saw actually made a strategic product assortment and skew rationalization efforts or ongoing and those efforts will sustain overtime, so you will see that with our normal seasonality throughout the year.

Okay helped.

Yes it does, it’s very helpful. it kind of leads me to my next question. So just thinking about the typical seasonality of the business and I know it’s very helpful to you guys call it out sort of the annualize effects of the DC sales, but can you give us a sense for, even if it’s just first half versus second half, what proportion of sales on EBITDA typically come in those periods? Susan O’Farrell: Yes we have gone back and looked and as you might imagine there is some variation based on seasonality as well as commodity pricing, but in general, I’m also looking at EBITDA and bottom line, you will see about 40% to 50% of our EBITDA in the past two years being in the first half of the year.

Okay. That's very helpful. I will jump back in the queue. Thanks.

Thank you. Susan O’Farrell: Thank you.

Your next question comes from the line of [Mark Coffman] (Ph)

Hi good morning. Nice job. I have a question, I believe and correct me if I’m wrong, you had said on the last call or maybe it was call before that that the DCs were going to be operating through the end of the year. Do you accelerated the closures of those or is it still the same plan and what I’m really thinking about here is how to think about what the back half looks like and/or after there any additional right offs that are necessary because they haven't been closed yet?

Yes, so we, I think the way we articulated it was that we expected to have them close by the end of the last year and we try to under promise never delivers as much as possible. So we feel good that the teams were able to accelerate that and obviously closing in a matter that we were very pleased with. So as we look at the other the facility this was the major process I think as we described on the last call and so we don't anticipate certainly today that kind of major change to any of our facilities. We will obviously always discuss the remaining 40 facilities that we have and look at the return on invested capital and make sure that they are performing well and it makes sense for the business strategically. But I would not anticipate the same kind of activity that we recently had in the back half of the year. Susan O’Farrell: And Mark specifically to your question about should you expect further charges because those activities are done any remaining slight follow on charges have already been fully accrued forces, no additional impact beyond these facilities for the rest of the year.

So would you say that you have been able to basically move as you said under promise and over deliver, they have been able to move the whole process forward somewhat advantageously?

Yes, absolutely. I mean it was of course good thing to exit inventory at a time when the market is actually relatively robust from a seasonal standpoint. It helps certainly from a recovery standpoint. So the fact that we were able to move it in the second quarter as oppose to for example the fourth quarter I think in all likelihood help from a recovery standpoints. So obviously the goal of the organization is to delever the company, reduce our debt and the faster we do that, the faster we are able to do some more exciting things going forward.

So, can I assume operational then as this third quarter commences we get a fairly clean look at what the company looks like going forward not assuming any additional improvements operationally but this is your new baseline working off that at least until the next round.

Yes, I think that's a fair assumption with again the caveat that we are working every day to operate more efficiently and have some issues to do that, but I think generally from a based on standpoint that will be a good way to look at it. Susan O’Farrell: And Mark we will continue to give you the comparable center numbers so that way you can see the operational improvements. So until we fully complete a full-year of these closures, you will continue to see the tables that we provide to help separate out the noise if you will that comes through of having closed centers in our consolidated results.

Right, as a comparative, is that right? Susan O’Farrell: Yes.

Thank you.

Sure. Thank you. Susan O’Farrell: Thank you.

[Operator Instructions] Your next question comes from the line of [Alan Weber] (Ph).

I have two questions, when you look out, you are making a lot of, you know you changed the company, reorganized it more decentralized and obviously delivering, what did you think, when you look out, whether it’s a few years, if the housing recovery continue? What do you think the operating margins for the business probably should be?

Okay, on that first question, I will say with the one the that can be out being that we usually don’t give forward looking guidance but I would, I guess were the accounts will be the same, we track have historically tracked a pretty close for either single family housing starts. And so you just took a percentage of incremental growth that you saw on single family housing starts and applied it across the top-line of the business and looking at the variable cost that we have, we will indicate what deleverage that we got on the fix cost of the business.

So you should get over time and improvement in gross margins and assuming the housing recovery continues, your gross profit and actually down. Once you kind of get out of somebody’s closing facilities should increase and then the question, I guess really is how much additional SG&A is there to support, even its 5% in year growth and you pick a number?

So I want to make sure, I understand the question, on the SG&A, are you asking, do we have sufficient SG&A to support incremental growth that were we need to incrementally increase SG&A business gross.

But basically once you kind of like, how would you think it’s a right footprint, what you think the additional SG&A is, and is the support, you call it 5% or 6% of growth in year?

So because we and we have done it and we conducted exercises, last year we look very top of we are organizational structure that we have from SG&A standpoint and made some changes there. And because we are taken out these facilities, we feel pretty good about, I feel very good about the current SG&A we have for the Company and while we will continue to invest in development opportunities and in that anticipate the material, SG&A increase with the expected modest housing recovery that we are seeing going ahead. But obviously it’s housing jumps up by 40% in the year and that will hesitate some pretty big increases in SG&A which would be easily update for by the incremental volume.

Okay and I guess my other on related is kind of the consolidation among some of your customers, what impact is that having on the company, or what do you expect going forward?

It creates opportunities, as you would expect or no, when you look at there, the public documentation from or public reporting from, the two large consolidators in the industry they talk about rationalization and trying to save money. So they have come out with line reviews kind of classic company line reviews where they trying to reduce cost and it has caused on disruption in the market. The good news and the bad news for our business whole distribution is and historically low margins and provides a valuable service to the Company, so there is not really a lot of opportunity to squeeze BlueLinx for example in that situation. So, there are situations where you lose some business, well we have actually experienced some lost some business and we have gained some business. And the fact the volume of activity that will continue to go through wholesale distribution is certainly sufficient for us to continue grow share with these large consolidated results we move forward.

Okay. I guess my final question. As you talk about decentralizing the company, are you satisfied kind of about where you are at the local level with local management of most of the facilities, has that change taken place?

I would say that again, alluded to the continuous improvement philosophy there we have at BlueLinx. I feel really good that on a comprehensive basis that we have as experienced team that exist in the industry. But I would also say that there is always room for improvement and we are constantly assessing not only the performance of the facilities, but the performance of each of us as associates of BlueLinx to make sure that we improve and that would include general managers in the field.

Okay. Great. Thank you very much. Susan O’Farrell: Thanks Alan.

Thank you.

[Operator Instructions] We have a question from the line of [Mitchell Scott] (Ph). Susan O’Farrell: Hi Mitchell.

And he withdrew his question. You have a question from the line of [Mark Coffman] (Ph)

Hi, again just a follow-up. Are you going to make the announcements when the sales of the DCs are completed or when you actually put together a sale lease back or rather than wait till the end of the quarter if they are meaningful?

I think what we are going to do is be guided by the SEC guidelines and to the extent the material will certainly report that.

Okay. Thank you.

Sure.

And there are no further questions at this time.

Okay. Well thank you Tunica. Thank you for your continued interest in BlueLinx. Again we certainly enjoy giving you good news and we look forward to sharing our third quarter results with you later this year. So thank you very much.

This concludes today's call. You may now disconnect.