6309 Monarch Park Place, Suite 203
Niwot, CO 80503, USA
Phone (303) 443-5060
Toll free (888) 742-5060
For the six months ended June 30, 2003, revenues were $244.1 million compared to $247.4 million for the comparable period of the prior year. The company's 2003 year-to-date net income was $803,000 or $0.09 per diluted share compared to a net loss for the six months ended June 30, 2002 of $49.8 million or $5.58 per diluted share. The 2002 six months results reflect the cumulative effect of the mandatory change in accounting principle required by Statement of Financial Accounting Standards No. 142, 'Goodwill and Other Intangible Assets,' that was adopted by the company during the first quarter of 2002. Net income for the six months ended June 30, 2002, before the effect of the change in accounting principle, was $583,000 or $0.07 per diluted share.
Revenues from Flexible Procurement Solutions(TM) (FPS), IDG's services- based supply offerings including integrated supply comprised 52.3% of IDG's total sales for the second quarter of 2003 compared to 48.6% of IDG's total sales for the comparable period in 2002. Year-to-date, FPS revenues increased $9.0 million or 7.6% compared to the prior year.
''During the second quarter, IDG and the industrial supply industry continued to look for signs of economic growth from the manufacturing sector. As we await the return to customer growth, we are positioning IDG as the partner of choice for manufacturers that want higher value services and cost savings from their suppliers,'' said Andrew Shearer, president and CEO of IDG.
''At IDG, we'll continue to offer manufacturers two ways to gain enhanced value and cost savings from partnering with us. Our FPS services, like integrated supply, deliver documented cost savings that can help manufacturers' competitive position. We also remain committed to our traditional MROP sales activities, where we offer customers competitive service on a wide variety of products,'' noted Shearer.
Traditional MROP sales declined $7.8 million or 11.9% during the second quarter over the prior year quarter, due to continued weakness in the manufacturing sector. However, IDG's FPS solutions are proving to be an important differentiator for the company. As customers await the recovery in their own businesses, IDG is actively identifying solutions that can provide customers with current documented cost savings and the potential for higher savings when manufacturing capacity ramps up with increased production in the future.
''FPS sales trended up 2.3% for the second quarter as manufacturers continued to seek IDG for our capability to deliver cost saving solutions. We continue to maintain a positive view that our new sales pipeline and sales volume from existing customers will improve as the manufacturing sector rebounds,'' stated Shearer.
During the second quarter the company continued to closely manage its expense and cost structure and its efforts to further rationalize its operations. The company centralized certain of its distribution operations and realigned its sales offices by selling two properties, one in Connecticut and the other in Georgia.
''The centralization of these operations will provide internal efficiencies and annualized cost savings through more efficient distribution while maintaining sales activities