Essendant income falls in 2Q
Essendant reported second quarter sales increased by 0.9 percent $1.35 billion, driven principally by the automotive acquisition and increased sales of office products.
Sales in the industrial segment declined by 4.1 percent to $144.5 million.
Net income decreased to $12.9 million from $29.8 million, resulting from lower gross profit and approximately $7.3 million in after-tax settlement charge related to offering a limited-time voluntary lump-sum pension plan payment to eligible, terminated, vested plan participants.
"In light of the challenges we faced in the quarter and our reduced outlook for the balance of the year, we are accelerating efforts to advance our strategy, improve margins and reduce costs," said Robert B. Aiken, Jr., president and chief executive officer of Essendant. "We plan to execute these actions while reducing our inventory levels over the balance of the year to improve the company's return on investment. Building on our core capabilities while increasing operating and working capital efficiency is the right path forward. With the common platform implementation of our office products and janitorial/sanitation businesses now complete, several large accounts wins on boarded and our industrial business making progress in its recovery plan, our company's core capabilities continue to offer a competitive advantage in the marketplace," Aiken continued.