BlueLinx Holdings Inc. announced today it agreed, in exchange for $18.83 million, to end one year early its agreement with Georgia-Pacific LLC (GP) to distribute GP products.
GP had told BlueLinx last June 6 that it planned to end the agreement effective May 7, 2010. BlueLinx CFO and treasurer Doug Goforth, in an interview with ProSales said the Atlanta-based company decided to agree to early termination because the deal had restricted both parties from selling to certain customers.
"This allows us to strengthen relationships with other suppliers besides GP and sell to people that we prviously had not sold to," he said in the interview.
BlueLinx said in its announcement that it will continue to distribute GP building products, including engineered lumber, which is covered under a separte, three-year agrement signed Feb. 12.
"We have been distributing Georgia-Pacific building products for over 50 years and look forward to continuing what we believe is a more sustainable long-term relationship for both of our companies," BlueLinx CEO George Judd said.
BlueLinx Holdings' BlueLinx Corp. subsidiary says it distributes more than 10,000 products from more than 750 suppliers out of more than 70 warehouses to approximately 11,500 customers nationwide. It was created in July 2004 when BlueLinx purchased GP's building products distribution business for $810 million.
In February, BlueLinx reported a $25.1 million net loss for the fourth quarter ended Jan. 3, 2009, down from a net loss of $34.1 million in the same period a year ago. For the full year, BlueLinx reported a net loss of $31.7 million compared to a net loss of $27.9 million in the prior year. Sales for the year totaled $2.8 billion, down 27.5% from 2007.