Industrial Distribution Group, Inc., Atlanta, GA, reported second-quarter sales were $132.6 million, down from $137 million in the same period a year ago. Profit was $0.1 million.
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For the six months ended June 30, 2007, sales were $267.7 million, compared with $277.3 million in the same period a year ago. Profit was $1.5 million, about half the profit of a year ago.
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For the second quarter of 2007, revenues from Flexible Procurement Solutions, IDG’s integrated supply business, were $81.8 million, an increase of 1.7%. Revenue from FPS comprised 61.7% of IDG’s total sales for the second quarter of 2007 compared to 58.7% for the comparable period of 2006.
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Year-to-date 2007, FPS revenues increased $1.9 million or 1.2%. At June 30, 2007, the company had 325 total FPS sites, including 101 storeroom management arrangements.
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During the second quarter, General MROP sales decreased 10.3% to $50.8 million. Year-to-date, General MROP sales were $104.8 million, representing a decrease of 9.9%. The decreases in revenue for both the three and six-month periods are attributable to declines in the automotive, heavy truck, and manufactured housing sectors as well as the residual effects from lost market share resulting from service issues following the system conversion in 2006.
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IDG’s performance for the second quarter was clearly a disappointment. The combination of strains on our customers in the automotive, heavy truck and manufactured housing sectors and the related suppliers to these sectors, as well as internal process issues, presented us with obstacles that we were unable to overcome,” said Charles Lingenfelter, IDG’s president and CEO.
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“While we have made many significant, operational strides towards achieving our vision, it became apparent to me that IDG needs a broader, more strategic approach to our business and opportunities. To this end I took two actions. The first was a cost-reduction program aimed at generating approximately $6.0 million of annual cost savings, including $1.0 to $1.8 million for the remainder of 2007. The second was to engage my fellow Board members in a discussion about a formal and full assessment of IDG’s strategic alternatives and opportunities to achieve acceptable financial results and unlock the value we believe is inherent in the company. Both of these actions were previously announced on July 30, 2007.