JACKSONVILLE -- Interline Brands, Inc., a leading distributor and direct marketer of maintenance, repair and operations products, reported sales and earnings for the fiscal quarter ended July 1, 2011.
"We executed well on a number of fronts during the second quarter, and our recent CleanSource and NCP acquisitions are off to great starts. We continue to face some challenges posed by the broader macroeconomic environment, but we remain confident that the strategic initiatives we have underway will help us deliver improved efficiencies, customer services, technology and sales performance," commented Michael J. Grebe, Chairman and Chief Executive Officer.
Second Quarter 2011 Performance
Sales for the quarter ended July 1, 2011 were $317.7 million, a 17.6% increase compared to sales of $270.2 million in the comparable 2010 period. Interline's facilities maintenance end-market, which comprised 77% of sales, increased 24.9% during the second quarter, and 3.7% on an average organic daily sales basis. The professional contractor end-market, which comprised 13% of sales, decreased 0.3% for the quarter. The specialty distributor end-market, which comprised 10% of sales, decreased 3.3% for the quarter. Not including the acquisitions of CleanSource and Northern Colorado Paper ("NCP"), average organic daily sales increased 2.2% for the quarter.
"We continue to be encouraged by the trends within the institutional and multi-family facilities maintenance end-markets, though our large customers remain focused on cost control. In addition, our recent acquisitions in the jan-san space are contributing to our growth and broadening our reach in underpenetrated markets and geographies," said Mr. Grebe.
Gross profit increased $14.6 million, or 14.3%, to $116.1 million for the second quarter of 2011, compared to $101.6 million for the second quarter of 2010. As a percentage of net sales, gross profit decreased 100 basis points to 36.6% compared to 37.6% for the second quarter of 2010. This decrease was related to the CleanSource and NCP acquisitions, as they have lower gross profit margins due to their product mix.
"From our regional replenishment strategy to our investments in sales professionals and e-commerce sites, we are building the foundation for scalable growth," commented Kenneth D. Sweder, Interline's President and Chief Operating Officer. "In addition, our two recent acquisitions, CleanSource and NCP, continue to progress well. Through these acquisitions, we are extending our national capabilities into the Western United States, enabling more MRO product sales, and benefiting from operating and merchandising opportunities."
Year-To-Date 2011 Performance
Sales for the six months ended July 1, 2011 were $615.1 million, a 19.3% increase over sales of $515.4 million in the comparable 2010 period. Not including the acquisitions of CleanSource and NCP, average organic daily sales increased 3.2% for the six months ended July 1, 2011.
Gross profit increased $30.4 million, or 15.4%, to $227.1 million for the six months ended July 1, 2011, compared to $196.7 million in the prior year period. As a percentage of sales, gross profit decreased to 36.9% from 38.2% in the comparable 2010 period.
Business Outlook
Mr. Grebe stated, "Looking ahead, we have a cautious stance on the broader macroeconomic environment and the pace of recovery in our end-markets. Nevertheless, we are driving permanent improvements in our business that will enable us to grow more efficiently and deliver incremental operating leverage over time. We remain confident in our ability to execute against our strategy and we are excited to realize the full benefits of our efforts as we work to strengthen Interline's position as a premier, broad-line MRO distributor."
