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Industrial Distribution Group, Atlanta, GA, reported fourth quarter 2001 revenues of $123.0 million compared to $132.5 million for the same period in 2000. The company's net income for the fourth quarter of 2001 was $76,000 compared to a net loss of $10.7 million for the comparable period in 2000. The fourth quarter and full year 2000 results include non-recurring expenses of $15.1 million related to a write off of the company's ERP project and to executive level separation expenses.
Revenues from Flexible Procurement Solutions(TM) (FPS), IDG's services-based supply offerings, including integrated supply, increased 8.3% or $4.3 million and comprised 45.6% of IDG's total sales for the fourth quarter of 2001 compared to 39.1% for the comparable period in 2000. This performance reflects growth opportunities IDG has identified in the FPS services area. The company aggressively managed its cost structure in order to meet the challenges of the continuing slower manufacturing environment.
Selling, general and administrative reductions and productivity efforts enabled the company to reduce its SG&A expenses by $2.5 million or 8.8% during the fourth quarter of 2001 compared to the fourth quarter of 2000. The employee furlough programs enacted earlier in the year and continuing into the fourth quarter, and lower variable sales expenses due to the decline in revenues, were primary contributors to the reduction in SG&A.
"The fourth quarter was important from a strategic, operating and financial perspective," said Andrew Shearer, IDG's president and CEO. "We announced our new corporate vision, began the internal restructuring of the company and achieved a profitable quarter in spite of the continuing economic recession. During the quarter we announced our accelerated focus on Flexible Procurement Solutions, positioning IDG to lead the next evolution of supply. We expect FPS to drive future profits for our shareholders by providing high quality, value-added services that solve customer needs," Mr. Shearer continued.
For the year ended December 31, 2001, sales were $514.4 million compared to $546.7 million for 2000. The company's net loss for the year 2001 was $1.4 million compared to a net loss of $9.6 million for the year ended 2000. The year 2000 results include the aforementioned non-recurring expense of $15.1 million, while the full year results for 2001 include $512,000 of non-recurring expense associated with executive severance costs. Excluding the non-recurring expenses, the net loss per diluted share for 2001 is $0.12 compared to earnings for 2000 of $0.11 per diluted share.
Total FPS revenues, including integrated supply, for the full year 2001 were up 7.4% over the prior year and comprised a growing 43.6% of total revenues compared to 38.2% for 2000. 2001 SG&A expenses were down from the prior year by 4.2%, reflecting the furlough programs, lower variable sales expenses and other cost reduction efforts.
Cash flow from operations and the balance of long-term debt both showed significant improvement during 2001. Cash flow from operations increased $18.3 million for the year ended December 31, 2001 as compared to the prior year, and IDG's debt balance declined from $53.3 million at the end of 2000 to $42.8 million at December 31, 2001.
"We look at the year 2001 as the inflection point of significant change for IDG, and we expect 2002 to be a year of continued transition," commented Shearer. "We're building IDG's future around a solid understanding of our FPS capabilities, and we expect to accomplish our objectives through a focused leadership team within a new and consistent organizational structure. Our customers are telling us we're on the right track as we solve their challenges and bring more value to their businesses. Importantly, we're creating the appropriate metrics to measure our customer's needs and our own performance," stated Shearer. "I'm pleased with our progress thus far, and we continue on track to meet our objectives," Mr. Shearer concluded.