6309 Monarch Park Place, Suite 203
Niwot, CO 80503, USA
Phone (303) 443-5060
Toll free (888) 742-5060
For the nine months ended
Sept. 30, 2002, revenues were $371.3 million compared to $391.4 million for the comparable period in the prior year. Before the effect of a change in accounting principle, the company reported net income of $1.1 million compared to a net loss of $1.4 million for the nine months ended Sept. 30, 2001. The company's 2002 net loss for the nine months ended Sept. 30, 2002, after the cumulative effect of the mandatory change in accounting principle recorded in the first quarter of 2002 as required by Statement of Financial Accounting Standards No. 142, "Goodwill and Other Intangible Assets," was $49.3 million or $5.50 per diluted share.
"I am pleased to report another quarter of profitable results, IDG's fourth consecutive quarter of profitability," said Andrew Shearer, IDG's president and CEO. "We accomplished this in spite of an ongoing soft economy in North America. We continue to position IDG for above- average revenue growth when the economy strengthens. This includes the execution of our long-term business strategy that focuses on our Flexible Procurement Solutions(TM) (FPS), IDG's services-based supply offerings," commented Shearer.
"The management and organizational changes we instituted have made IDG a leaner, more efficient and sharply focused company with one vision and a consistent set of overall objectives. These actions enabled our team to implement and realize our FPS capabilities and services across the IDG organization and deliver these value-added services to more customers. The result is FPS is our competitive advantage and the value driver for our company," Mr. Shearer continued.
Total revenues for IDG during the third quarter were flat over the prior year quarter as IDG's customers continued to experience the impact of the soft economy. Actions across the company's broad customer base to curtail production, reduce headcount, and institute plant closures had a significant impact on the company's sales. This impact was, to a large degree, offset by an increase in FPS revenues during the quarter.
FPS revenues, including integrated supply, improved 10.4% over the prior year quarter and comprised 50.3% of IDG's total sales for the third quarter of 2002 compared to 45.6% of IDG's total sales for the comparable period in 2001. The increase in FPS revenues reflects the ramp up of new customer FPS sites.
Year-to-date, FPS revenues grew 7.3% compared to the prior year. The company added 20 new integrated supply sites during the quarter, bringing the total number of new sites for the year to 40. The decline in year-to-date total revenues was a result of the continued soft economic environment and notable declines in certain industry sectors including aerospace, energy, and automotive.
"FPS continues to be a growth driver in our business. Customers and prospects are increasingly looking to IDG and FPS as a source of value-added MROP solutions," commented Shearer. "We believe that our actions this year, to place greater focus on our FPS solutions with industrial and manufacturing businesses, are beginning to gain the mind-share and prospect attention we sought. Increasingly we are receiving solicitations from larger companies interested in our FPS solutions. These manufacturers are looking to IDG as the MROP services-provider that can help them gain efficiencies and lower their costs," noted Shearer.
During the third quarter, IDG continued to successfully manage its expense and cost structure in response to the external environment impacting its