6309 Monarch Park Place, Suite 203
Niwot, CO 80503, USA
Phone (303) 443-5060
Toll free (888) 742-5060
Revenues for the fourth quarter 2002 were $121.1 million compared to $123.0 million reported for the comparable period in 2001. The company's net income for the fourth quarter of 2002 was $531,000 compared to net income of $76,000 for the comparable period in 2001.
For the twelve months ended Dec. 31, 2002, revenues were $492.5 million compared to $514.4 million for the comparable period in the prior year. Before the effect of a change in accounting principle, the company reported net income of $1.6 million compared to a net loss of $1.4 million for the year ended Dec. 31, 2001.
The company's 2002 net loss, 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 $48.7 million.
The company achieved its objective of returning IDG's operations to profitability during 2002. Excluding the change in accounting principle recorded during the first quarter, the company's fourth quarter was the fifth consecutive quarter in which the company achieved profitable results.
''I am pleased to report that IDG is now seeing proactive interest from customers, prospective customers and others within the industry for our value-added Flexible Procurement Solutions(TM)(FPS) services as companies seek ways to achieve further cost savings,'' said Andrew B. Shearer, IDG's president and chief executive officer.
''We see this as validation of our business model -- one that continues IDG's long-term commitment to the traditional MROP product business and one that is enhanced by a growth-oriented FPS and integrated supply services business,'' noted Shearer.
For the fourth quarter, total FPS revenues, including integrated supply, were 50.3 percent of total revenues compared to 45.6 percent of total revenues for the comparable period in 2001.
Total FPS revenues, including integrated supply, were up 7.7 percent for the full year 2002 over the prior year and comprised a growing 49.1 percent of total 2002 revenues compared to 43.6 percent for 2001. Traditional MROP revenues declined in 2002 reflecting the continued soft economic manufacturing environment. The company implemented 43 new integrated supply sites during 2002.
During 2002 the company focused on operating expense containment and achieved a reduction in SG&A of $7.5 million. As a percentage of sales SG&A decreased from 21.6% in 2001 to 21.1% during 2002. For the fourth quarter, SG&A decreased from $25.8 million in 2001 to $25.6 million, marking the second consecutive quarter that the company achieved relatively flat comparisons over the prior year quarter. SG&A as a percentage of sales increased from 21.0% for the 2001 fourth quarter to 21.2% for 2002. The quarterly comparisons are noteworthy because the 2001 fourth quarter SG&A reflected the benefits of certain non-recurring savings programs, including extensive employee furlough programs that were not in place during the fourth quarter of 2002. Management believes that the temporary reductions of 2001 have now become sustainable. For the full year, SG&A expenses declined 6.7% from the prior year reflecting the effect of furlough programs primarily in the early part of the year, the non-amortization of goodwill, lower variable sales expenses, and other cost reduction efforts.
Cash flow from operations remained strong during 2002 and for the year, cash flow from operations was $10.4 million. IDG's long-term debt balance declined from $42.0 million at the end of 2001 to $35.7 million at Dec. 31, 2002, the lowest level of long-term debt since 1999.
''A year ago I characterized 2002 as a year of transition for IDG and in fact it was a year in which