Grainger sales rise 8%
Grainger reported sales for the 2012 third quarter rose by 8 percent to $2.3 billion.
During the third quarter, the company recorded a $70 million pre-tax reserve for a settlement in principle to resolve pricing disclosure issues relating to government contracts with General Services Administration (GSA) and United States Postal Service (USPS). The proposed settlement, which covers 12 years of sales to the GSA and 10 years of sales to the USPS, remains subject to the approval of the U.S. Department of Justice (DOJ). In addition, the company has established a $6 million pre-tax reserve for resolving tax, freight and miscellaneous billing issues with these government customers.
Excluding the reserve, net earnings increased 11 percent and earnings per share of $2.81 increased 12 percent. Including the reserve, reported net earnings for the third quarter decreased 15 percent to $155 million versus $182 million in 2011 and earnings per share of $2.15 decreased 14% versus $2.51 in 2011.
"We delivered a solid quarter, with stronger organic sales growth in September than in August and continued to gain market share, expand margins and generate nearly $100 million in operating cash flow over the prior year. We are also resolving an ongoing dispute with the GSA and USPS and are pleased to be near final settlement with the DOJ. We value our long-standing relationship with these important federal government customers and look forward to continuing to expand the products and services we provide to them in the future," said chairman, president and chief executive officer Jim Ryan.
Sales for the United States segment increased 4 percent to $1.77 billion, driven by gains in the heavy manufacturing, light manufacturing, commercial, government and retail end markets.
In Canada, sales at Acklands-Grainger increased 10 percent to $272.9 million, led by strong growth to customers in the commercial services, oil and gas, forestry, contractor and utilities end markets.
For the first nine months of the year, sales of $6.7 billion increased 12 percent, versus $6.0 billion for the same period in 2011.
INDUSTRIAL SUPPLY MAGAZINE
The May/June issue of Industrial Supply magazine features an in-depth cover story about GHX Industrial. Plus, we're featuring articles by contributing writers Dr. Bharani Nagarathnam and Frank Hurtte, as well as interviews with numerous product and distribution industry experts.
