Zep Inc. posts 1.9 percent sales drop
Zep Inc. reported operating profit of $8.8 million during the first quarter of fiscal year 2010 compared with a loss of $0.8 million in the first quarter of 2009.
Net sales totaled $126.8 million compared with $129.2 million in the first quarter of 2009, representing a decrease of $2.4 million or 1.9%. The company experienced double-digit growth in sales to retail customers but declining sales to industrial and institutional customers more than offset those gains. "While demand for Zep’s products in certain of its industrial and institutional end markets, including schools, government, and food, is stabilizing, the company continues to face challenges within other end markets, including transportation and industrial operations," the company said.
“During the past year we meaningfully lowered the breakeven point of the business through the execution of sustainable restructuring and cost reduction initiatives," saidJohn K. Morgan, chairman, president and CEO . "We continue to benefit from and remain committed to those actions, and are pleased to announce substantial earnings and cash flow improvement despite slightly lower comparative first quarter sales.”
Zep consolidated two facilities during the first quarter, and anticipates consolidation of at least three more locations in fiscal year 2010. The company said it continues to pursue new industrial distribution partnerships with its Zep Professional product line. Late in the second quarter, the Zep Professional product line will be made available to customers of W.W. Grainger online and through its catalog and branch network.
INDUSTRIAL SUPPLY MAGAZINE
The May/June issue of Industrial Supply magazine features an in-depth cover story about GHX Industrial. Plus, we're featuring articles by contributing writers Dr. Bharani Nagarathnam and Frank Hurtte, as well as interviews with numerous product and distribution industry experts.
