Interline Brands, Inc. Announces Business Update and $16 Million of Additional Annualized Cost Actions
Inc. (NYSE: IBI) (“Interline” or the “Company”), a leading distributor and
direct marketer of maintenance, repair and operations products, today
announced an update on business performance for the fourth quarter of 2008 and
a comprehensive plan focused on additional expense reduction and efficiency
gains across its operating platform.
Based on unaudited results, the Company anticipates reporting net sales
for its fourth quarter ended
and gross profit in the range of
Company expects to report a strong cash position of over
Commenting on current business conditions, Interline Chairman and Chief
Executive Officer
impacted by macroeconomic headwinds that intensified throughout the quarter.
Accordingly, we will not meet our previously issued earnings per share range
of
through difficult times before and will continue to prudently manage the
business by adjusting our cost structure and maximizing cash flow generation.
We have a strong cash balance, and we are well on track to meet the high end
of our previously stated goal of generating
flow over the six-month period ending
In response to the challenging environment, the Company today announced
the implementation of several cost actions, including the elimination of 85
full-time positions. As a result of the workforce reduction and other expense
control actions, the Company expects to generate annualized savings of
approximately
record one-time severance charges totaling approximately
resulting from these actions.
“The decision to downsize is never easy to make, and we thank our affected
employees for their many important contributions. However, these actions are
necessary to ensure that our cost structure aligns with current and expected
market dynamics,” added Grebe.
In an effort to further improve the long-term efficiency of its operating
platform, Interline also announced that it will accelerate the streamlining of
its distribution and logistics network by consolidating 10 distribution
centers over the next six months. These consolidations are in addition to
those included in Project 20/20, the Company’s previously announced cost-
savings and efficiency plan. Interline expects to realize annualized savings
of approximately
record one-time severance and other charges totaling approximately
million
distribution footprint for optimal efficiency and scale.
Grebe continued, “With these consolidations, we have a great opportunity
to reduce our fixed cost structure and to improve our scale. As important, we
will continue to provide excellent customer service because we are not exiting
any geographic markets. Streamlining our distribution network is the right
decision regardless of present market conditions, and we are very excited by
the prospect of establishing a more profitable operating platform. We will
execute this plan in an orderly fashion, taking into consideration seasonality
of demand and other market dynamics, and by timing the consolidations with
lease expirations to minimize associated costs.”
Grebe concluded, “I am confident the actions announced today reinforce our
continued focus on prudent expense controls and underscore our ongoing
commitment to operational excellence. I look forward to discussing more of
the specifics of today’s announced actions, as well as our full fourth quarter
2008 results, on our quarterly conference call next month.”
Conference Call
The Company expects to release fourth quarter and full year 2008 results
on
a.m. Eastern Time
About Interline
Interline Brands, Inc. is a leading national distributor and direct
marketer with headquarters in
maintenance, repair and operations (MRO) products to a diversified customer
base made up of professional contractors, facilities maintenance
professionals, and specialty distributors across
America
Non-GAAP Financial Information
This press release contains financial information determined by methods
other than in accordance with generally accepted accounting principles
(“GAAP”). Free Cash Flow is a non-GAAP financial measure. The Company defines
Free Cash Flow as Net cash provided by operating activities, as defined under
Generally Accepted Accounting Principles, less capital expenditures.
Management believes that Free Cash Flow is an important measure of its
liquidity and therefore its ability to reduce debt and make strategic
investments after considering the capital expenditures necessary to operate
the business. The Company uses Free Cash Flow in the evaluation of the
Company’s business performance. A limitation of this measure, however, is that
it does not reflect payments made in connection with investments and
acquisitions, which reduce liquidity. To compensate for this limitation,
management evaluates its investments and acquisitions through other return on
capital measures.
Safe Harbor Statement under the Private Securities Litigation Reform Act
of 1995
The statements contained in this release which are not historical facts
are forward-looking statements that are subject to risks and uncertainties
that could cause actual results to differ materially from those set forth in,
or implied by, forward-looking statements. The Company has tried, whenever
possible, to identify these forward-looking statements by using words such as
“projects,” “anticipates,” “believes,” “estimates,” “expects,” “plans,”
“intends,” and similar expressions. Similarly, statements herein that describe
the Company’s business strategy, outlook, objectives, plans, intentions or
goals are also forward-looking statements. The risks and uncertainties
involving forward-looking statements include, for example, economic slowdowns,
general market conditions, credit market contractions, consumer spending and
debt levels, adverse changes in trends in the home improvement and remodeling
and home building markets, the failure to realize expected benefits from the
AmSan acquisition, material facilities systems disruptions and shutdowns, the
failure to locate, acquire and integrate acquisition candidates, commodity
price risk, foreign currency exchange risk, interest rate risk, the dependence
on key employees and other risks described in the Company’s Quarterly Report
on Form 10-Q for the period ended
Annual Report on Form 10-K for the fiscal year ended
statements reflect the Company’s current beliefs and are based upon
information currently available to it. Be advised that developments subsequent
to this release are likely to cause these statements to become outdated with
the passage of time. The Company does not currently intend, however, to update
the information provided today prior to its next earnings release.
CONTACT:
PHONE: (904) 421-1441
SOURCE Interline Brands, Inc.