United Stationers Reports Record Revenue, Earnings
United Stationers Inc. reported record revenue and earnings per share for both the fourth quarter and year ended December 31, 2012. It also announced a workforce reduction and facility closure program to reduce costs while allowing continued investment in growth initiatives. The company intends to record a pre-tax charge in the first quarter of 2013 for expenses related to this program.
For 4Q, net sales increased 3.6% from the prior-year period to $1.24 billion. Operating income increased by 21% to $55.4 million or 4.4% of sales.
Net income rose by 18% to $32.9 million.
The company completed the acquisition of O.K.I. Supply Co. (OKI) during the quarter. In October, the company said it intended to buy 100% of the outstanding shares of O.K.I. for an all-cash purchase price of $90 million.
Based in Cincinnati Ohio, O.K.I. is the largest independently-owned welding, safety and industrial products wholesaler in the country, serving the gases and welding industry for 75 years.
For 2012, net sales for United Stationers rose 1.9% from the prior year to $5.1 billion compared to $5 billion in 2011. Operating income was $200.9 million or 4.0% of sales.
"Our fourth quarter results showed progress on many fronts," said Cody Phipps, president and chief executive officer. "Benefiting from our recent acquisition, United's industrial platform is expected to contribute 12% of total revenues and is well positioned for future growth. Our other businesses also continued to show sales and profit growth. This reflected the success of our cost control and value-adding initiatives, and our continued focus on building capabilities that help customers and suppliers capitalize on opportunities in this evolving market. As a result, we generated record revenue, EPS growth and strong cash flow."
Net sales for the fourth quarter of 2012 were $1.24 billion, up 3.6% from the prior-year period. For the latest three months, industrial supplies sales grew 30.4%, the janitorial & breakroom category expanded 1.9%, office products grew 1.2%, and furniture sales increased 3.9%. The technology category declined 0.1%. Without the effect of the OKI acquisition, consolidated net sales would have increased 1.8%.
Excluding the effect of the OKI acquisition, net sales grew 1.5%.
"Despite the continued weak economy, United Stationers entered 2013 with solid momentum," Phipps stated. "The changing market requires that we adapt and evolve, and we are doing this proactively and from a position of strength. We are optimizing our network of distribution centers and realigning resources to support our growth businesses while keeping core operations strong.
"Our strategy is focused on delivering the capabilities that our business partners need to succeed," he added. "By consistently improving this value, we expect to continue to outperform in the markets in which we compete."
During the first quarter of 2013, the company plans to take a pre-tax charge in the range of $9 million to $11 million for closing certain OKI facilities, severance costs, and other related expenses.