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Total revenues for IDG during the third quarter were down 3.8% over the prior year quarter, in part a result of IDG's customers continuing to experience the impacts of a weak manufacturing environment. In response, the company has placed additional focus on its mid-market FPS services to ensure that customers recognize IDG's full range of core offerings. IDG's internal efforts will focus on leveraging current and new customer relationships to support top line sales growth. Heightened internal activities will include objectives to better define sales expectations and processes, while additional resources will be used to identify new industries and customers that can benefit from IDG's FPS services.
FPS revenues, including integrated supply, improved 6.6% over the prior year quarter and comprised 55.7% of IDG's total sales for the third quarter of 2003 compared to 50.3% of IDG's total sales for the comparable period of 2002. The increase in FPS revenues reflects a mix of new customer FPS sites, which was offset, in part, by decreases in volume from existing customers due to lower production levels in the current environment.
Year-to-date, FPS revenues grew 8.5% compared to the prior year. The decline in year-to-date total revenues was a result of the continuing soft manufacturing environment and greater than expected declines in IDG's traditional products business. Traditional MROP sales declined 12.2% for the nine months of 2003, as compared to the same period in the prior year.
"FPS continues to be a growth opportunity in our business, yet it is clear we must maintain our focus and presence before customers with both our services offerings and our traditional business," said Andrew Shearer, IDG's president and CEO. "We believe our actions over the past year, to place greater focus on our FPS services, are beginning to gain the attention we sought. Customers and prospects can continue to look to IDG as a source for value-added FPS solutions and as a committed partner and supplier. We simply need to combine that focus with continued attention to our traditional supply business so that manufacturers will look to IDG as the comprehensive MROP and FPS services provider that can help them gain efficiencies and lower their costs."
During the third quarter, IDG continued to manage and optimize its expense and cost structure in response to the business environment. Selling, general and administrative expense reductions, reductions in facility related expenses and continuing productivity efforts enabled the company to lower SG&A expenses by 3.6% compared to the prior year third quarter. In addition, absolute headcount reductions, a result of productivity efforts, reduced headcount by 6.2% over the prior year third quarter.