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Industrial Distribution Group, Inc., Atlanta, reported its first quarter revenues for the period ended March 31, 2006, were $140.3 million compared with $137.9 million in the comparable quarter in 2005.
Revenue for the three months ended March 31, 2005 includes $2.3 million associated with the company's Cardinal Machinery business unit which was sold during the third quarter 2005. The company's net income for the first quarter of 2006 increased 25.8% to $1.5 million compared to net income of $1.2 million for the comparable period of the prior year.
For the first quarter, revenues from Flexible Procurement Solutions(TM) (FPS), IDG's services-based supply offerings that include storeroom management, were $80.6 million, an increase of $5.8 million or 7.7% compared to the first quarter of 2005. These revenues comprised 57.4% of IDG's total sales for the first quarter of 2006 compared to 54.2% for the comparable period of 2005. As of March 31, 2006, the company had 338 total FPS sites, including 102 storeroom management arrangements. The revenue growth was due to both increased market penetration within existing customers, as well as new storeroom management sites.
General MROP sales declined from the prior year first quarter by $3.4 million to $59.7 million in the current quarter, for a total decline of 5.4%. However, $2.3 million of that decline reflects sales in the 2005 quarter attributable to IDG's former Cardinal Machinery business unit. As a result, General MROP sales attributed to IDG's ongoing core operations declined by $1.2 million or 1.9% in the 2006 quarter due to customer pricing sensitivity and reclassification of customer accounts to our more value added FPS solutions.
"We expect our organizational changes and move to a single IT platform will enable IDG to fully realize the operating benefits inherent in our business model. The results we are seeking, including improved operating performance, stronger sales growth, and a more profitable business require an intense focus on both near-term priorities and broader operating goals. Our executive team and associates are committed to these priorities and operating goals as the way to deliver greater value for all of our constituencies," noted CEO and President Charles Lingenfelter. "While we proceed through this near-term organizational transition period, we are very mindful of the need to maintain a tight rein on our discretionary spending while not curtailing strategic investment in our business.'
For more details on IDG's first quarter earnings, click here.