Industrial Distribution Group Inc. reported a 2.8% increase in sales for the second quarter ended June 30, 2006, compared with the same period last year. That figure excludes the company’s Cardinal Machinery business unit, which was sold in the third quarter 2005.
IDG’s net earnings for the second quarter were $1.5 million, down from the $1.6 million in the comparable period of 2005.
For the six months ended June 30, 2006, revenue was $277.3 million, slightly up from the $273.6 million reported in the first half of last year. That includes $4.6 million of revenue attributable to Cardinal Machinery. From its ongoing core operations, the company’s revenue grew 3.1% over the 2005 period. Year-to-date net earnings were $3.1 million, compared to net earnings of $2.1 million for the same period last year.
For the second quarter 2006, revenue from Flexible Procurement Solutions (FPS), IDG’s services-based supply offerings including storeroom management, were $80.4 million, an increase of 6% from last year. Revenue from FPS comprised 58.7% of IDG’s total sales, compared with 55.9% for the comparable period of 2005.
Year-to-date, FPS revenue increased $10.3 million, or 6.9%.
During the second quarter, general MROP sales decreased $3.2 million, or 5.3%, to $56.6 million from the prior-year quarter. However, $2.3 million of that decline reflects sales in the 2005 quarter attributable to Cardinal Machinery. General MROP sales in ongoing core operations declined by $0.8 million, or 1.4% for the 2006 quarter.
Year-to-date 2006, General MROP sales were $116.3 million, a decrease of $6.6 million from last year, which included $4.6 million of General MROP sales attributable to Cardinal Machinery. From its ongoing core operations, the company’s 2006 General MROP sales declined 1.7% relative to the 2005 period.
“During the second quarter, we continued our strategic focus on aligning processes and systems to achieve our ‘One Company’ strategic objective,” said Charles A. Lingenfelter, IDG’s president and CEO. “We made significant operational strides towards achieving our vision of unified processes across IDG by completing the IT systems conversion in our Midwest and Northwest regions.”
The company announced its IT conversion, resulting in a total of 65% of its business operating on Infor’s ERP SX.enterprise software. Three of the company’s four regions are now operating on a common platform with common processes, part numbers and item descriptions. Since activating the conversion May 1, the company has resolved post-conversion issues with its Electronic Data Interchange (EDI) processes that temporarily disrupted the receipt of automated orders from some customers. The disruption reduced the company’s sales for the second quarter by an estimated $2.8 million to $3.2 million.
Industrial Distribution Group, Inc. distributes a full line of MROP products, specializing in cutting tools, abrasives, hand and power tools, coolants, lubricants, adhesives and machine tools. IDG has four operating divisions organized into regional responsibility areas. IDG serves over 20,000 active customers representing a diverse group of large and mid-sized national and international corporations, including Honeywell International, Inc., The Boeing Company, ArvinMeritor, Inc., Borg-Warner Inc., Pentair, Inc., as well as many local and regional businesses.
IDG Reports Small Jump in 1Q Revenues
More Breaking News