JACKSONVILLE -- Interline Brands, Inc., a leading distributor and direct marketer of maintenance, repair and operations products, recently reported sales and earnings for the fiscal quarter ended April 1, 2011.
"Our first quarter results reflect broad-based improvement, and we are encouraged to report organic growth in all of our end-markets. As the market environment continues to improve, we are focused on the execution of key initiatives that will enable us to generate long-term shareholder value," commented Michael Grebe, Chairman and CEO.
First Quarter 2011 Performance
Sales for the quarter ended April 1, 2011 were $297.4 million, a 21.3% increase compared to sales of $245.2 million in the comparable 2010 period. Interline's facilities maintenance end-market, which comprised 75% of sales, increased 26.4% during the first quarter. The professional contractor end-market, which comprised 14% of sales, increased 9.1% for the quarter. The specialty distributor end-market, which comprised 11% of sales, increased 6.3% for the quarter. Not including the acquisitions of CleanSource and Northern Colorado Paper and taking into account an additional shipping day in the first quarter of 2011, average organic daily sales increased 4.3% for the quarter."Overall trends remain positive in our end-markets, and we have witnessed a meaningful change in the confidence levels of our customers. We continue to leverage our recent acquisitions in the jan-san space to drive cross-selling opportunities and expand into underpenetrated geographies," said Mr. Grebe.
Gross profit increased $15.8 million, or 16.6%, to $110.9 million for the first quarter of 2011, compared to $95.1 million for the first quarter of 2010. As a percentage of net sales, gross profit decreased 150 basis points to 37.3% compared to 38.8% for the first quarter of 2010.
"The transformation of our distribution network is progressing on plan as we implement our larger regional replenishment centers," commented Kenneth D. Sweder, Interline's President and Chief Operating Officer. "With these centers, we have achieved some of the highest customer fill rates in our history as a company, and we expect to see continued improvements to our inventory management as the year progresses."
Selling, general and administrative ("SG&A") expenses for the first quarter of 2011 increased $10.9 million, or 14.1%, to $88.1 million from $77.2 million for the first quarter of 2010. As a percentage of net sales, SG&A expenses were 29.6% compared to 31.5% for the first quarter of 2010.
First quarter 2011 operating income of $17.1 million, or 5.8% of sales, increased 29.9% compared to $13.2 million, or 5.4% of sales, in the first quarter of 2010.
Earnings per diluted share for the first quarter of 2011 were $0.20, an increase of 18% compared to earnings per diluted share of $0.17 for the first quarter of 2010. Earnings per diluted share for the first quarters of 2011 and 2010 include a $0.01 per diluted share charge associated with ongoing improvements to our distribution network. Earnings per diluted share for the first quarter of 2010 also included a $0.02 per diluted share charge associated with previously announced changes in the Company's executive management.
First quarter 2011 free cash flow was $8.1 million compared to $12.3 million in the first quarter of 2010. Cash flow from operating activities for the first quarter of 2011 was $13.5 million compared to $16.1 million for the first quarter of 2010.
Business Outlook
Mr. Grebe stated, "Looking ahead, we recognize that our end-markets are still in the early stage of a recovery. Though we have not yet hit our full stride, we are encouraged by the progress within our business to become more efficient as we grow. We remain confident in our direction and our ability to execute against our initiatives to strengthen Interline's position as a premier, broad-line MRO distributor."
