IDG appoints Shearer CEO, Q2 financials

Industrial Distribution Group, Inc., Atlanta, GA, has appointed Andrew B. Shearer as president and CEO. A founding board member and the single largest shareholder in the company, he replaces Patrick S. O'Keefe, who has resigned. Since IDG's formation four years ago, Shearer, 38, has served as president of the IDG division in York, PA, one of the nine original founding companies of IDG. In a separate announcement, the company also said it has had an 8% reduction in head count this year as part of its cost-cutting measures.


Shearer served as president of Shearer Industrial Supply Co. (now IDG York) prior to its acquisition by IDG. Prior to becoming president of Shearer Industrial Supply, Shearer served that company in several managerial roles since 1985.


'Andy has always provided leadership within our organization,' said Richard M. Seigel, chairman of the board. 'As the president of IDG York, he has increased sales despite the poor economic conditions, in large part through the growth of integrated supply. Andy's hands-on operational and sales experience and his dedication to our company are key attributes that are critical to the success of IDG as a whole.'

Q2 financials


IDG reported second quarter 2001 revenues were $131.4 million, as compared to $139.6 million for the same period in 2000. The company's net loss for the second quarter of 2001 was $725,000, compared to net income of $587,000 for the same period in the prior year. For the six months ended Jun. 30, sales were $267.5 million as compared to $280.5 million for the same period in the prior year. The company's 2001 year to date net loss was $1.3 million as compared to net income of $836,000 for the six months ended Jun. 30, 2000.


'We continue to feel the impact of the recessionary environment that surrounds the manufacturing sector,' said Patrick S. O'Keefe, president and CEO. 'Our results for the second quarter of 2001 reflect lower production levels by our customers and the reduction of existing inventories across a broad U.S. manufacturing base. Order quantities are decreasing as manufacturers produce cautiously. In addition, we are seeing the rate of temporary plant closures and furloughs significantly increase.'


'In order to combat the market conditions, we have taken steps to reduce our cost structure. Since Dec. 31, 2000, we have reduced our headcount by approximately 8% and during the second quarter, we incurred $400,000 of severance costs related to our plan to return to profitability in the near term. We continue to evaluate and make changes in our cost structure to maximize the profit potential of our business. We have carefully evaluated each initiative to reduce our selling, general, and administrative expense to ensure that they do not interrupt our level of customer service. We believe that the expense reductions we have made are sustainable and will lower our break-even levels going forward,' O'Keefe said.


'Although we have made expense reductions, we continue to invest in our FPS (Flexible Procurement Systems) program. Our FPS sales increased approximately 6.5% from the second quarter of 2000 and are up 5.6% year to date, despite declines in sales at facilities where we are the sole source supplier, as our customers adapt to the current economic environment. Our FPS programs and our commitment to providing value added services are being recognized across the industry. We continue to aggressively market our FPS program.'
IDG has 12 hub operating companies and approximately 1,400 associates serving 25,000 active customers. With a total of 59 operating locations, the company currently has a presence in 42 of the top 75 industrial markets in the U.S.