JACKSONVILLE -- Interline Brands, Inc., a leading distributor and direct marketer of maintenance, repair and operations ("MRO") products, reported sales and earnings for the quarter ended June 25, 2010.
Sales for the second quarter of 2010 increased 0.1% compared to the second quarter of 2009. Earnings per diluted share were $0.27 for the second quarter of 2010, an increase of 35% compared to earnings per diluted share of $0.20 for the same period last year. Earnings per diluted share for the second quarter of 2010 included a $0.02 per diluted share charge associated with ongoing improvements to our distribution network. Earnings per diluted share for the second quarter of 2009 included charges for similar distribution network enhancements totaling $0.04 per diluted share.
"Overall, we are pleased to report further signs of market stabilization, as well as improved financial results driven by our strategic initiatives," said Michael J. Grebe, Interline's Chairman and Chief Executive Officer. "We achieved significant year-over-year margin expansion in the second quarter, generating a gross margin of 37.6%, up 120 basis points, and improving our EBITDA margin by 170 basis points to 9.1%. We remain encouraged by some important trends this quarter, and we are pleased to deliver improved operational performance as we continue to bring more products to more customers from a single platform."
Sales for the quarter ended June 25, 2010 were $270.2 million, a 0.1% increase compared to sales of $269.9 million in the comparable 2009 period. Interline's facilities maintenance end-market, which comprised 74% of sales, declined 0.7% during the second quarter. The professional contractor end-market, which comprised 15% of sales, increased 1.1% for the quarter. The specialty distributor end-market, which comprised 11% of sales, increased 3.2% for the quarter.
"Although not broad-based, certain markets returned to modest growth this quarter - including the multi-family housing, professional contractor, and specialty distributor markets,” said Grebe. “Importantly, within multi-family housing we were pleased to see an improving renovation environment, which was adversely impacted during the height of the economic crisis.”
Gross profit increased $3.3 million, or 3.3%, to $101.6 million for the second quarter of 2010, compared to $98.3 million for the second quarter of 2009. As a percentage of net sales, gross profit increased 120 basis points to 37.6% compared to 36.4% for the second quarter of 2009.
"We are continuing to improve Interline's competitive position by strengthening our customer capabilities, improving our operating scale, and reducing the capital requirements of our business," said Kenneth D. Sweder, Interline's Chief Operating Officer. "In particular, we have reduced our fixed cost base with the introduction of larger, more efficient distribution centers across our network. These newer distribution centers will enable us to maximize near-term cost savings while facilitating additional organic growth opportunities and greater profitability as we provide our customers access to even more products that can be delivered quickly."
Selling, general and administrative ("SG&A") expenses for the second quarter of 2010 decreased $1.4 million, or 1.8%, to $77.5 million from $78.9 million for the second quarter of 2009. As a percentage of net sales, SG&A expenses were 28.7% compared to 29.2% for the second quarter of 2009.
As a result, second quarter 2010 operating income of $19.2 million, or 7.1% of sales, increased 27.5% compared to $15.0 million, or 5.6% of sales, in the second quarter of 2009.Sales for the six months ended June 25, 2010 were $515.4 million, a 2.2% decrease over sales of $526.7 million in the comparable 2009 period.
Gross profit increased $1.8 million, or 0.9%, to $196.7 million for the six months ended June 25, 2010, compared to $194.9 million in the prior year period. As a percentage of sales, gross profit increased to 38.2% from 37.0% in the comparable 2009 period.
SG&A expenses for the six months ended June 25, 2010 were $154.7 million, or 30.0% of sales, compared to $162.8 million, or 30.9% of sales, for the six months ended June 26, 2009.
Operating income was $32.3 million, or 6.3% of sales, for the six months ended June 25, 2010 compared to $23.1 million, or 4.4% of sales, for the six months ended June 26, 2009, representing an increase of 40.2%.
