Strategic Distribution Reports Second Quarter Financials

Strategic Distribution, Inc., Bristol, PA, a provider of maintenance, repair and operating (MRO) supply chain management services, reported revenues for the second quarter ended Jun. 30, 2005 of $33.7 million, compared to $27.4 million for the second quarter of 2004. The increase in revenue for the second quarter of 2005 over the second quarter of 2004 was substantially attributable to $8.4 million of revenue growth within the existing customer base, partially offset by a $2.2 million decline in revenues relating to contracts terminated in prior periods.

 

The company reported a net loss of $1.1 million in the second quarter of 2005 compared to a net loss of $0.7 million in the same quarter of 2004. The results for the second quarter of 2005 include an increase to the company's allowance for doubtful accounts of $0.7 million primarily driven by one of the company's customers that filed for protection under Chapter 11 of the U.S. Bankruptcy Code. The results for the second quarter of 2004 included a $0.4 million benefit related to the favorable settlement of a disputed liability with a vendor.

 

For the first half of 2005, the company reported revenues of $62.7 million compared to $59.4 million reported during the first half of 2004. The increase in revenues for the first six months of 2005 compared to the first six months of 2004 is primarily attributed to revenue growth within the company's existing customer base. Revenues for the first six months of 2004 included the recognition of $5.7 million of revenue in the first quarter of 2004, related to supplies shipped during the third quarter of 2003. This $5.7 million in revenue was not recognized until the first quarter of 2004 when all of the criteria of SEC Staff Accounting Bulletin No. 104, Revenue Recognition, were met.

 

The company reported a net loss of $2.7 million in the first half of 2005 compared to a net loss of $1.2 million in the same period of 2004. The results for the first half of 2005 include an increase to the company's allowance for doubtful accounts of $0.7 million. The results for the first six months of 2004 included a $0.4 million benefit related to the favorable settlement of a disputed liability with a vendor.

 

At Jun. 30, 2005, the company reported total cash and cash equivalents of $25.0 million compared to $28.9 million at Mar. 31, 2005. The decrease in cash is primarily attributable to the net operating loss reported for the quarter ended Jun. 30, 2005 and working capital requirements to support the company's revenue growth during the quarter.