Atlanta-based Zep Inc., a producer of cleaning and maintenance products, reported sales of $145.2 million for the third quarter ended May 31, 2008, down slightly from $145.4 million in the previous year. Profit was $0.2 million, down 94% from third quarter 2007.
Excluding charges for restructuring and special items, Zep had an adjusted profit of $6 million, down 4.8% from the adjusted profit the previous year.
The decline was attributed to higher raw material costs, increased stand-alone public company expenses and investments related to ongoing strategic initiatives.
For the nine months ended May 31, 2008, profit was $8.4 million, up 21.2% over the prior year. Zep reported sales of $421.9 million in the first nine months of fiscal year 2008, an increase of 2.1%.
Expansion of the company into the $6.4 billion industrial distribution channel is progressing as planned, with the establishment of a distributor sales team and the creation of the Zep Professional label, said John K. Morgan, president and CEO.
Our operating results will continue to be inconsistent as we execute the strategic plans we believe are important to improving the near- and long-term profitability of the company," he said. "The third quarter's results are clearly reflective of actions taken and investments made in the pursuit of our transformational objectives."