Essendant 2017 sales down 6.2 percent
Essendant Inc. reported 2017 sales of $5.0 billion were down 6.2 percent from $5.4 billion in 2016.
A net loss of $243.4 million, or a loss of $7.27 per share, compared to net income of $63.8 million, or $1.73 per share, in 2016.
Fourth quarter revenue decreased 4.5 percent to $1.2 billion, compared to $1.25 billion in 2016.
A loss of $1.5 million in the quarter, or 4 cents per share, showed improvement from a loss of $2.3 million, or 6 cents, in the same period last year.
"We are continuing to implement the strategic drivers that I described last quarter: 1) improving efficiency across our distribution network and reducing our cost base, 2) accelerating sales performance in key channels where we are positioned to grow, and 3) advancing supplier partnerships that leverage our network and capabilities," said Ric Phillips, president and chief executive officer of Essendant.
Sales of industrial supplies increased by 11 percent to $154.1 million in the quarter, while sales of jan/san products decreased 9.4 percent to $304 million.
Essendant has launched a restructuring program to advance the company's strategic drivers by reducing its cost base, aligning organizational infrastructure and leadership with the company's growth channels to drive sales, and providing capacity to invest in products with preferred suppliers and in growth categories. The company expects the restructuring program and other initiatives to reduce costs beginning in 2018 and reach run-rate annual savings of more than $50 million by 2020, with more than half achieved in 2018.
The program includes facility consolidations and workforce reductions with an estimated cash cost of $30 million to $40 million over the restructuring period, which began in the first quarter of 2018.
Product assortment refinements are also planned to eliminate items that have limited availability and lower sales. This is expected to improve service levels while having a minimal impact on sales. It will also increase capacity to support expansion into new categories to support customer growth, and is also necessary to execute the planned facility consolidations.
INDUSTRIAL SUPPLY MAGAZINE
The March/April issue of Industrial Supply magazine features an in-depth cover story about Joyce Lansdale and Vallen. Plus, we're featuring articles by contributing writers Dirk Beveridge, Frank Hurtte, and David Kahle, as well as interviews with numerous product and distribution industry experts.
