updated 11/1/2010 7:46:49 AM ET 2010-11-01T11:46:49

JACKSONVILLE, Fla., Nov. 1, 2010 (GLOBE NEWSWIRE) -- Interline Brands, Inc. (NYSE:IBI) ("Interline" or the "Company"), a leading distributor and direct marketer of maintenance, repair and operations ("MRO") products, reported sales and earnings for the fiscal quarter ended September 24, 2010.

Sales for the third quarter of 2010 decreased 0.4% compared to the third quarter of 2009. Earnings per diluted share were $0.34 for the third quarter of 2010, an increase of 6% compared to earnings per diluted share of $0.32 for the same period last year. Earnings per diluted share for the third quarter of 2010 included a $0.02 per diluted share charge associated with ongoing improvements to our distribution network. 

Michael J. Grebe, Interline's Chairman and Chief Executive Officer, commented, "We've made meaningful progress over the past year toward improving our operating model, which has resulted in better value and service to our customers, and improved margins at all levels of the business.  Although we generated only modest growth in certain areas of our business during the third quarter, we have achieved significant productivity gains as evidenced by our 10.3% EBITDA margin. These productivity gains have been driven, in part, by our sales professionals who are focused on building high-quality relationships with targeted customers. This has taken considerable effort over the past few quarters, but we are now better positioned for it. With our end markets continuing to stabilize, we expect to accelerate proven targeted investments to drive growth. We have successfully done this in the past and are confident these investments will yield strong results given the improvements in our operating model."

Third Quarter 2010 Performance

Sales for the quarter ended September 24, 2010 were $276.8 million, a 0.4% decrease compared to sales of $277.9 million in the comparable 2009 period. Interline's facilities maintenance end-market, which comprised 74% of sales, declined 1.5% during the third quarter. The professional contractor end-market, which comprised 15% of sales, increased 0.1% for the quarter. The specialty distributor end-market, which comprised 11% of sales, increased 4.1% for the quarter.

Gross profit increased $2.6 million, or 2.6%, to $104.8 million for the third quarter of 2010, compared to $102.2 million for the third quarter of 2009.  As a percentage of net sales, gross profit increased 110 basis points to 37.9% compared to 36.8% for the third quarter of 2009.

"Our supply chain efforts remain highly focused on reducing our fixed cost structure, driving operating efficiencies, and improving our customer experience through enhanced technology and inventory management. We accomplish this with larger, more sophisticated distribution centers, such as our newest facility in Jacksonville, Florida, which became fully operational during the third quarter. As initial evidence of the success of these types of facilities, in Jacksonville we are now delivering some of the best fill-rates to our customers in the history of our company," commented Kenneth D. Sweder, Interline's Chief Operating Officer. 

Selling, general and administrative ("SG&A") expenses for the third quarter of 2010 increased $0.8 million, or 1.0%, to $77.0 million from $76.2 million for the third quarter of 2009. As a percentage of net sales, SG&A expenses were 27.8% compared to 27.4% for the third quarter of 2009. 

As a result, third quarter 2010 operating income of $22.9 million, or 8.3% of sales, increased 6.4% compared to $21.5 million, or 7.7% of sales, in the third quarter of 2009.

Year-To-Date 2010 Performance

Sales for the nine months ended September 24, 2010 were $792.2 million, a 1.5% decrease over sales of $804.7 million in the comparable 2009 period.

Gross profit increased $4.4 million, or 1.5%, to $301.5 million for the nine months ended September 24, 2010, compared to $297.1 million in the prior year period. As a percentage of sales, gross profit increased to 38.1% from 36.9% in the comparable 2009 period.

SG&A expenses for the nine months ended September 24, 2010 were $231.7 million, or 29.2% of sales, compared to $239.0 million, or 29.7% of sales, for the nine months ended September 25, 2009. 

Operating income was $55.2 million, or 7.0% of sales, for the nine months ended September 24, 2010 compared to $44.6 million, or 5.5% of sales, for the nine months ended September 25, 2009, representing an increase of 23.8%.

Earnings per diluted share were $0.78 for the nine months ended September 24, 2010, an increase of 30% over earnings per diluted share of $0.60 for the nine months ended September 25, 2009.

Earnings per diluted share for the nine months ended September 24, 2010 included a $0.05 per diluted share charge associated with ongoing efforts to enhance the Company's distribution network and a $0.02 per diluted share charge associated with previously announced changes in the Company's executive management. Earnings per diluted share for the nine months ended September 25, 2009 included a $0.06 per diluted share charge associated with higher reserves for bad debt expense resulting from a customer seeking Chapter 11 bankruptcy protection, a $0.09 per diluted share charge associated with a reduction in force and consolidation of certain distribution centers, a $0.01 per diluted share charge associated with the adoption of a new accounting standard on business combinations, and a $0.03 per diluted share gain on the early extinguishment of debt. 

During the nine months ended September 24, 2010, cash and cash equivalents increased $5.1 million to $104.3 million. 

Business Outlook

Mr. Grebe stated, "The market environment appears to have stabilized somewhat, and we are encouraged to see certain underlying trends continue to improve. We have industry-leading distribution capabilities, a broad suite of products and supply chain solutions, robust national account expertise, and a platform that continues to drive even higher levels of profitability. These competitive advantages give us confidence for the future of our business and we remain committed to strengthening Interline Brands' position as a premier, broad-line MRO distributor."

Conference Call

Interline will host a conference call on November 1, 2010 at 9:00 a.m. Eastern Time. Interested parties may listen to the call toll free by dialing 1-800-427-0638 or 1-706-634-1170. A digital recording will be available for replay two hours after the completion of the conference call by calling 1-800-642-1687 or 1-706-645-9291 and referencing Conference I.D. Number 18711446. This recording will expire on November 15, 2010.

About Interline

Interline Brands, Inc. is a leading distributor and direct marketer with headquarters in Jacksonville, Florida. Interline provides maintenance, repair and operations products to a diversified customer base made up of facilities maintenance professionals, professional contractors, and specialty distributors primarily throughout North America, Central America and the Caribbean.  For more information, visit the Company's website at http://www.interlinebrands.com .  

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 September 24, 2010 and in the Company's Annual Report on Form 10-K for the fiscal year ended December 25, 2009. 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.

© Copyright 2012, GlobeNewswire, Inc. All Rights Reserved

Discuss:

Discussion comments

,

Most active discussions

  1. votes comments
  2. votes comments
  3. votes comments
  4. votes comments

Data: Latest rates in the US

Home equity rates View rates in your area
Home equity type Today +/- Chart
$30K HELOC FICO 3.79%
$30K home equity loan FICO 4.99%
$75K home equity loan FICO 4.69%
Credit card rates View more rates
Card type Today +/- Last Week
Low Interest Cards 13.83%
13.79%
Cash Back Cards 17.80%
17.78%
Rewards Cards 17.18%
17.17%
Source: Bankrate.com