Interline Brands Announces First Quarter 2012 Sales

Sales for the quarter ended March 30, 2012 were $313.6 million, a 5.4% increase compared to sales of $297.4 million in the comparable 2011 period . . .

Jacksonville, FL - Interline Brands, Inc. ("Interline" or the "Company"), a leading distributor and direct marketer of broad-line maintenance, repair and operations ("MRO") products, reported sales and earnings for the fiscal quarter ended March 30, 2012.

"We are pleased with our performance during the first quarter of 2012. In particular, we delivered our highest quarterly organic sales growth in our Facilities Maintenance end-market since the fourth quarter of 2007. The strategic investments we made last year have provided us with strong momentum to start the year. In particular, the new sales hires within our multi-family housing business contributed to nearly double-digit organic sales growth in that market this quarter. Additionally, we continue to benefit from our CleanSource and Northern Colorado Paper acquisitions in the janitorial and sanitation space, where we have strengthened our leadership position in a stable and healthy end-market. We are encouraged by our start to the year, and remain focused on our strategic imperatives that will drive profitable growth in 2012 and beyond," commented Michael J. Grebe, Chairman and CEO.

First Quarter 2012 Performance

Sales for the quarter ended March 30, 2012 were $313.6 million, a 5.4% increase compared to sales of $297.4 million in the comparable 2011 period. On an organic basis, sales increased 4.3% for the quarter. The facilities maintenance end-market, which comprised 76% of sales, increased 7.8% during the first quarter, and 6.2% on an organic basis. The professional contractor end-market, which comprised 14% of sales, increased 2.5% for the quarter. The specialty distributor end-market, which comprised 10% of sales, decreased 5.4% for the quarter.

"The multi-family market continues to show signs of strength, and we are well positioned for growth with a broad and compelling product, technology and service offering. In the institutional market, we are localizing even more inventory and leveraging our recent new sales hires to expand customer relationships and offer a broader product bundle across our market-leading brands. Operationally, we are also beginning to see the benefits of scale within our cost structure as our growth rate increases," commented Kenneth D. Sweder, Interline's President and Chief Operating Officer.

Gross profit increased $4.7 million, or 4.2%, to $115.6 million for the first quarter of 2012, compared to $110.9 million for the first quarter of 2011. As a percentage of net sales, gross profit decreased 40 basis points to 36.9% compared to 37.3% for the first quarter of 2011.

Selling, general and administrative ("SG&A") expenses for the first quarter of 2012 increased $3.4 million, or 3.9%, to $91.5 million from $88.1 million for the first quarter of 2011. As a percentage of net sales, SG&A expenses were 29.2% compared to 29.6% for the first quarter of 2011, an improvement of 40 basis points.

First quarter 2012 Adjusted EBITDA of $24.7 million, or 7.9% of sales, increased 6.1% compared to $23.3 million, or 7.8% of sales, in the first quarter of 2011.

Net income for the first quarter of 2012 increased $0.6 million to $7.5 million compared to $6.9 million in the comparable 2011 period.

Earnings per diluted share for the first quarter of 2012 were $0.23, an increase of 15% compared to earnings per diluted share of $0.20 for the first quarter of 2011. Earnings per diluted share for the first quarter of 2011 included a $0.01 per diluted share charge associated with ongoing improvements to our distribution network.

Cash flow used in operating activities for the first quarter of 2012 was $7.3 million compared to cash flow provided by operating activities of $13.5 million for the first quarter of 2011, due to the timing of inventory investments to support sales growth. First quarter 2012 free cash flow used was $10.6 million compared to free cash flow generated of $8.1 million in the first quarter of 2011.

Business Outlook

Mr. Grebe stated, "We remain encouraged by the improving fundamentals in our markets and the early success of our investments. We look to build on our momentum as market conditions continue to improve, and we realize the full benefits of our investments. We will continue to execute on our strategic imperatives and are committed to generating better growth and profitability as we further position ourselves as a premier broad-line MRO distributor."

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