Posted October 25, 2017

Essendant sees sales decline of 5.5 percent

Essendant's third-quarter net sales decreased 5.5 percent  to $1.3 billion compared to $1.4 billion in the prior year quarter.

The decline was driven by reduced sales in JanSan, traditional office products and technology categories, partly offset by growth in industrial products and cut-sheet paper products categories.

The company reported a loss of $81.9 million for the quarter, or a loss of $2.23 per share, compared to a gain of $36.7 million, or income of 99 cents, in the same period last year.

"Challenging industry dynamics and sales declines persisted, particularly in our national accounts channel," said Ric Phillips, president and chief executive officer of Essendant. "This year's sales declines were largely unanticipated and outpaced our ability to reduce costs. Accordingly, I have worked with our leadership team and our board to identify and launch the key strategic drivers that will improve our performance: improving efficiency across our distribution network and aligning our cost base, driving sales performance in key growth channels, and developing supplier partnerships that leverage our network and capabilities. We will act with urgency to execute against these priorities and reset our cost structure. We are targeting annualized cost savings in excess of $50 million by 2020. We have launched efforts to achieve these savings and will continue to refine this savings target and provide updates as we develop our detailed plans."

Industrial products revenues of $143.4 million increased 3.8 percent, due to growth initiatives and energy market recovery.