Industrial Distribution Group Sales Down 3% YTD

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October 30, 2007

Industrial Distribution Group Sales Down 3% YTD

Industrial Distribution Group, Inc., Atlanta, GA, reported sales fell 3% to $134.3 million in the third quarter ended Sept. 30, 2007. Profit was $1.3 million, compared with profit of $1.8 million in the prior-year period.

Year-to-date, sales were $402 million, down 3% from the prior-year period. Profit for the nine-month period was $2.8 million, down from the $4.9 million in the prior-year period.

Revenues from Flexible Procurement Solutions, IDG's integrated supply offerings including storeroom management, comprised 61.9% of IDG's total sales for the third quarter 2007, up from 60.3% of sales in the same period 2006. Comparing ongoing activities unrelated to one-time 2006 inventory sales, FPS sales for the third quarter 2007 increased $1.4 million or 1.8% compared to the prior year third quarter.

Year-to-date, FPS revenues were $246.1 million, an increase of $1.3 million compared to $244.8 million for the prior year. At Sept. 30, 2007, the Company had 327 FPS sites, including 101 storeroom management arrangements.

Revenues from IDG's General MROP business fell $4 million or 7.3% to $51.2 million for the third quarter. Of the decline, $2 million was related to attrition of smaller customers due to the closure of facilities, competitive pricing, and a delay in regaining business lost due to service issues encountered with the company's 2006 IT system conversion.

Lower revenues were also attributed to a $1.3 million decline in revenue from customers in the automotive and heavy duty truck manufacturing industries in response to lower production levels at certain customer facilities. In addition, $0.7 million of the variance from prior year results was due to higher recreational vehicle and manufactured housing market revenues during the prior year.

Industrial Distribution Group is a nationwide distributor of maintenance, repair, operating and production (MROP) products.

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