Thursday, wholesale business product distributor United Stationers Inc. (USTR) reported an increase in third quarter profit, benefited by lower amount of charges compared to last year, despite a 6.8% decline in revenues affected by weak economic conditions.
Net income for the quarter was $33.5 million or $1.38 per share, compared with $33.1 million or $1.39 per share in the same quarter last year, positively affected by lower charges related to the receivables securitization facility due to significantly lower funding needs and a lower effective tax rate from favorable income tax resolutions.
Adjusted net income increased to $33.5 million or $1.38 per share from $29.9 million or $1.26 per share in the year-ago period. Excluding a year-ago gain on selling two distribution centers,earnings per share rose nearly 10% .
Net sales for the quarter declined to $1.25 billion from $1.34 billion in the prior-year.
Richard Gochnauer, president and chief executive officer,"While market conditions remained difficult, United's sales results showed modest sequential improvement from the second quarter. This reflected the progress made on the growth initiatives and continued high demand for flu-related jan/san products. Our strong execution of diligent cost management and working capital controls helped us counter the effects of lower sales compared with last year."
Gross margin was $184.9 million, down from $197.9 million for the same quarter last year, affected by downward pressure from a lower margin sales mix and a significant decline in the year-over-year effect of inflation resulting from continued cost reduction strategies, lower fuel costs, reduced inventory obsolescence and lower LIFO inventory reserve requirements.
Operating expenses for the quarter declined to $126.3 million from $136.1 million in the same quarter last year, reflecting the cost containment actions within payroll and payroll-related areas, as well as other discretionary items. Operating income was $58.6 million, compared with $61.8 million in the year-ago period.
For the nine months, net income declined to $68.14 million or $2.85 per share from $75.85 million or $3.18 per share in the prior-year. Adjusted net income declined to $70.2 million or $2.94 per share from $74 million or $3.10 per share last year. Net sales were $3.52 billion, compared with $3.84 billion in the prior-year. USTR closed Thursday's regular trading at $46.58, up $1.54 or 3.42% on a volume of 0.15 million shares and in after hours its trading up by $2.17 or 4.66% at $48.75 on the Nasdaq.
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