Interline Brands: The Worst May Be Behind Us
"We believe the worst may now be behind us, but visibility remains low and we anticipate continued variability within our end-markets,” said Michael Grebe, chairman and CEO, in a statement. “Looking ahead to the first quarter of 2010, we expect the demand environment to remain similar to what we experienced over the past few months."
Interline's facilities maintenance end-market, which comprised 71% of sales, declined 3.7% during the fourth quarter on an average daily sales basis. The professional contractor end-market, which comprised 17% of sales, declined 20.2% for the quarter. The specialty distributor end-market, which comprised 12% of sales, declined 15% for the quarter.
"Institutional sales were essentially flat compared to the fourth quarter of 2008, driven by the strength of our core MRO and janitorial-sanitation products,” Grebe said.
Multi-family housing sales were down about 3% for the quarter when excluding Interline’s Renovations Plus business, which focuses on larger discretionary multi-family housing remodeling projects, he noted.
“During 2009 we made significant progress towards streamlining our distribution platform and improving our working capital efficiency,” said Kenneth D. Sweder, chief operating officer. “In 2010, we will continue to pursue our strategy of larger and more productive distribution centers that will enable us to further improve the customer experience and enhance our ability to scale our business as conditions improve."
Sales for the fourth quarter of 2009 decreased 8.3% vs. the fourth quarter of 2008. Earnings per diluted share were down 14% for the quarter compared with the same period last year.
"While cash flow generation remains a key focus for us, we do not expect to duplicate the record free cash flow we generated in 2009 as we enter the year leaner and more efficient from a working capital perspective,” Grebe said. “However, we will continue to carefully manage our working capital, which in combination with our more streamlined distribution network, will yield productivity gains over time. I am proud of the dedication and leadership that my teammates displayed in 2009, and I am encouraged by our execution of key efficiency actions, all aimed at strengthening our position in 2010 and beyond."
Interline Brands is an international distributor and direct marketer that provides maintenance, repair and operations products to a customer base that includes facilities maintenance professionals, professional contractors, and specialty distributors primarily throughout North America, Central America and the Caribbean.