Gross profit increased to $75.5 million for the fourth quarter of 2004 vs. $61.3 million in 2003. As a percentage of net sales, gross profit improved by 10 basis points in the recent fourth quarter. The improvement in the gross profit percentage was due to better pricing and increased sales of private label products, offset by strong sales of heating, ventilation and air conditioning equipment and water heaters, which generally carry lower gross margins, the company said.
“We are very pleased with our sales performance and operating results as we report earnings for the first time after completing our initial public offering (IPO) Dec. 21,” Michael Grebe, president/CEO said in a statement. “We continued to experience strong sales and earnings growth during the fourth quarter, with average daily sales up 15.5%. Our overall business momentum positions us well for sustained success in 2005,” he said.
The company launched an aggressive national accounts program in the contractor market at the beginning of 2004 and signed agreements with contractor buying groups in the United States and Canada, William Sanford, chief operating officer, said in a conference call in March. “These markets continue to consolidate and Interline capitalized on this,” Sanford said. “We opened nine free-standing Pro Centers to provide convenient will-call service for contractors.” Interline plans to open eight to 10 more Pro Centers in 2005, coordinated with large regional customers, many located onsite with the customer. “We stock only what they agree to buy in advance from us,” Sanford said. “That gives us more critical mass.” Pro Centers located adjacent to customers show faster growth than freestanding units, he noted.
Grebe said multi-family housing, residential repair and remodeling will remain strong.
Interline Brands is a national distributor and direct marketer, providing maintenance, repair and operations products to professional contractors, facilities maintenance professionals, hardware stores and other customers across North America and Central America. For more information, visit: www.interlinebrands.com.