United Stationers Inc. (NASDAQ: USTR) reported solid results for its fourth quarter and record revenues and earnings per share for the year ended December 31, 2011. In addition, the company announced a distribution network optimization and targeted cost reduction program.
Fourth Quarter Financial Summary
- Diluted earnings per share for the fourth quarter of 2011 were $0.65, flat compared with the prior-year quarter. However, adjusted earnings per share were up 10% to $0.64 (1) from $0.58 (1) in 2010. Fourth quarter 2011 results were adjusted down by $0.01 per share for a partial reversal of a workforce realignment charge and the prior-year quarter was adjusted down by $0.07 per share for employee-related items, respectively.
- Net sales increased 1.3% from the prior-year period to $1.2 billion.
- Gross margin was $173.7 million or 14.5% of sales, compared with $189.6 million or 16.0% of sales a year ago.
- Adjusted operating expenses were $128.6 million (1) or 10.7% (1) of sales in the quarter, down from $137.0 million (1) or 11.5% (1) of sales in the prior-year quarter.
- Operating income for the fourth quarter of 2011 was $45.9 million or 3.8% of sales. Adjusted operating income was $45.2 million (1) or 3.8 % (1) of sales, compared with $52.6 million (1) or 4.4% (1) of sales in the prior-year quarter.
2011 Financial Summary
- Diluted earnings per share for 2011 were $2.42, compared with $2.34 in 2010. Adjusted earnings per share in 2011 grew 15% to $2.51 (1) from $2.19 (1) in 2010. Earnings per share in 2011 were adjusted up by $0.09 per share to remove the impact of an equity compensation charge, an asset impairment charge and an employee-related item. For 2010, earnings per share were adjusted down by $0.15 to exclude employee-related items.
- Net sales rose 3.6% from the prior year to $5.0 billion.
- Gross margin was $740.1 million or 14.8% of sales, versus $730.6 million or 15.1% of sales in 2010.
- Adjusted operating expenses were $536.4 million (1) or 10.7% (1) of sales in 2011, compared with $532.4 million (1) or 11.0% (1) of sales in 2010.
- Operating income for 2011 was $198.3 million or 4.0% of sales. Adjusted operating income increased 3% to $203.6 million (1) or 4.1% (1) of sales, compared with $198.2 million (1) or 4.1% (1) of sales in the prior year.
- Net cash provided by operating activities totaled $130.4 million versus $114.8 million last year.
- 5.1 million shares were repurchased at a cost of $162.7 million.
“We had record results in 2011, with outstanding performance in our growth initiatives helping to offset a more challenging office products environment,” said Cody Phipps, president and chief executive officer. “This performance reinforces the effectiveness of our strategy for long-term growth delivered by our associates. We are taking action to accelerate our growth efforts in the industrial and janitorial & breakroom businesses, optimize our distribution network for the future, and drive targeted cost reductions to support margins.”