Jacksonville, FL -- Interline Brands, Inc., a leading distributor and direct marketer of broad-line maintenance, repair and operations ("MRO") products, reported sales and earnings for the fiscal quarter ended June 29, 2012.
"We were pleased to see continued sales growth in the second quarter driven by our strategic investments and further improvement in our end-markets. We will continue to execute on our growth strategy as we seek to further establish Interline Brands as a premier broad-line MRO distributor," commented Michael J. Grebe, Chairman and CEO.
Second Quarter 2012 Performance
Sales for the quarter ended June 29, 2012 were $334.8 million, a 5.4% increase compared to sales of $317.7 million in the comparable 2011 period. The facilities maintenance end-market, which comprised 78% of sales, increased 7.2% for the quarter. The professional contractor end-market, which comprised 13% of sales, increased 2.4% for the quarter. The specialty distributor end-market, which comprised 9% of sales, decreased 3.7% for the quarter.
Gross profit increased $4.9 million, or 4.2%, to $121.1 million for the second quarter of 2012, compared to $116.1 million for the second quarter of 2011. As a percentage of sales, gross profit decreased 40 basis points to 36.2% compared to 36.6% for the second quarter of 2011.
Selling, general and administrative ("SG&A") expenses for the second quarter of 2012 increased $5.9 million, or 6.7%, to $94.2 million from $88.3 million for the second quarter of 2011. As a percentage of sales, SG&A expenses were 28.1% compared to 27.8% for the second quarter of 2011, an increase of 30 basis points. SG&A expenses during the quarter included $2.2 million of fees and expenses, representing approximately 0.7% of sales, associated with the previously disclosed transaction contemplated by the Agreement and Plan of Merger entered into on May 29, 2012.
Second quarter 2012 Adjusted EBITDA of $27.3 million, or 8.2% of sales, decreased 3.3% compared to $28.3 million, or 8.9% of sales, in the second quarter of 2011.
Net income for the second quarter of 2012 decreased $0.8 million to $9.0 million compared to $9.9 million in the comparable 2011 period.
Earnings per diluted share for the second quarter of 2012 were $0.28, a decrease of 3% compared to earnings per diluted share of $0.29 for the second quarter of 2011. Earnings per diluted share for the second quarter of 2012 included a $0.04 per diluted share impact due to fees and expenses associated with the previously disclosed transaction contemplated by the Agreement and Plan of Merger entered into on May 29, 2012. Earnings per diluted share for the second quarter of 2011 included a $0.01 per diluted share charge associated with ongoing improvements to the Company's distribution network.
Cash flow provided by operating activities for the second quarter of 2012 was $15.8 million compared to cash flow provided by operating activities of $14.5 million for the second quarter of 2011. Second quarter 2012 free cash flow generated was $11.4 million compared to free cash flow generated of $9.4 million in the second quarter of 2011.
Year-To-Date 2012 Performance
Sales for the six months ended June 29, 2012 were $648.4 million, a 5.4% increase over sales of $615.1 million in the comparable 2011 period. On an organic basis, sales increased 4.9% for the six months ended June 29, 2012.
Gross profit increased $9.6 million, or 4.2%, to $236.7 million for the six months ended June 29, 2012, compared to $227.1 million in the prior year period. As a percentage of sales, gross profit decreased to 36.5% from 36.9% in the comparable 2011 period.
SG&A expenses for the six months ended June 29, 2012 were $185.7 million, or 28.6% of sales, compared to $176.3 million, or 28.7% of sales, for the six months ended July 1, 2011. SG&A expenses during the six months ended June 29, 2012 included $2.2 million of fees and expenses, representing approximately 0.3% of sales, associated with the previously disclosed transaction contemplated by the Agreement and Plan of Merger entered into on May 29, 2012.
Adjusted EBITDA of $52.0 million, or 8.0% of sales, for the six months ended June 29, 2012 increased 0.9% compared to $51.5 million, or 8.4% of sales, for the six months ended July 1, 2011.
Net income for the six months ended June 29, 2012 decreased $0.3 million to $16.5 million compared to $16.7 million in the comparable 2011 period.
Earnings per diluted share were $0.51 for the six months ended June 29, 2012, an increase of 4% over earnings per diluted share of $0.49 for the six months ended July 1, 2011. Earnings per diluted share for the six months ended June 29, 2012 included a $0.04 per diluted share impact due to fees and expenses associated with the previously disclosed transaction contemplated by the Agreement and Plan of Merger entered into on May 29, 2012. Earnings per diluted share for the six months ended July 1, 2011 included a $0.02 per diluted share charge associated with ongoing efforts to enhance the Company's distribution network.
Cash flow from operating activities for the six months ended June 29, 2012 was $8.5 million compared to $28.0 million for the six months ended July 1, 2011. Free cash flow generated for the six months ended June 29, 2012 was $0.8 million compared to $17.4 million in the comparable 2011 period.
Recent releases and other news, reports and information about the Company can be found on the "Investor Relations" page of the Company's website at http://ir.interlinebrands.com/.
Non-GAAP Financial Information
This press release contains financial information determined by methods other than in accordance with accounting principles generally accepted in the United States of America ("US GAAP"). Interline's management uses non-US GAAP measures in its analysis of the Company's performance. Investors are encouraged to review the reconciliation of non-US GAAP financial measures to the comparable US GAAP results available in the accompanying tables.
Safe Harbor Statement under the Private Securities Litigation Reform Act of 1995
The statements contained in this release which are not historical facts are forward-looking statements that are subject to risks and uncertainties that could cause actual results to differ materially from those set forth in, or implied by, forward-looking statements. The Company has tried, whenever possible, to identify these forward-looking statements by using words such as "projects," "anticipates," "believes," "estimates," "expects," "plans," "intends," and similar expressions. Similarly, statements herein that describe the Company's business strategy, outlook, objectives, plans, intentions or goals are also forward-looking statements. The risks and uncertainties involving forward-looking statements include, for example, economic slowdowns, general market conditions, credit market contractions, consumer spending and debt levels, adverse changes in trends in the home improvement and remodeling and home building markets, the failure to realize expected benefits from acquisitions, material facilities systems disruptions and shutdowns, the failure to locate, acquire and integrate acquisition candidates, commodity price risk, foreign currency exchange risk, interest rate risk, the dependence on key employees and other risks described in the Company's Quarterly Report on Form 10-Q for the quarterly period ended March 30, 2012 and in the Company's Annual Report on Form 10-K for the fiscal year ended December 30, 2011. These statements reflect the Company's current beliefs and are based upon information currently available to it. Be advised that developments subsequent to this release are likely to cause these statements to become outdated with the passage of time. The Company does not currently intend, however, to update the information provided today prior to its next earnings release.
