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JLK Reports Second-Quarter Results
LATROBE, Pa., Jan. 24 /PRNewswire/ -- JLK Direct Distribution Inc. (NYSE: JLK) reported net income for the second quarter ended December 31, 1999 of $4.3 million or $0.18 per share, compared to $5.2 million or $0.21 per share last year. For the first six months, net income was $8.5 million or $0.35 per share compared to $8.9 million or $0.36 per share in the first half of last year.
President and Chief Executive Officer Richard J. Orwig said, "I am pleased that we were able to meet our earnings commitment through reduced costs and operational improvements. Although market conditions continue to be tough, we are beginning to see signs of increased activity in our served markets. This trend is consistent with our expectations for continually improving order rates in the coming months."
Sales for the quarter were $119.7 million, down ten percent from $133.7 million in the comparable quarter last year, reflecting the continuing slowdown in industrial demand. Sales for the first six months were $238.0 million, down ten percent from $265.5 million in the first half of last year. Excluding sales of the Strong Tool Co. steel mill business, which was divested in the March 1999 quarter, sales were down seven percent for both the quarter and the six months.
Mr. Orwig commented, "We launched our website last summer which included an E-Order pad to enable customers to place orders online. Customer response has been outstanding and has exceeded our expectations. This spring, we plan to add our online catalog with all 145,000 SKUs and a highly sophisticated search engine. This summer, we expect to fully integrate the online catalog and customer order process into the e-commerce module of our new state-of-the-art management information system which is specifically designed for distribution companies. This will enable customers to use the Internet to seamlessly place orders, check inventory for price and availability, get quotes, and check the status of existing orders. We plan to supplement these basic features with complementary value-added online services which we believe the market will find extremely attractive. These e-commerce initiatives will strengthen our competitive position in the marketplace and improve our internal operational effectiveness. In addition, they will give us a strong platform to capitalize on other e-commerce strategic opportunities as they develop."
JLK sells a broad range of metalworking consumables and related products, including a full line of cutting tools, carbide and other metalworking inserts, abrasives, drills, machine tool accessories and other industrial supplies. The company markets to the needs of the small- and medium-sized customers through its direct marketing catalog and showroom programs and serves medium- and large-sized industrial manufacturers through integrated industrial supply programs and distributor-based direct field sales.
This release contains "forward-looking statements" as defined by Section
21E of the Securities Exchange Act of 1934. Actual results may differ
materially from those expressed or implied in the forward-looking statements.
Factors that could cause actual results to differ materially include, but are
not limited to, the extent that the economic conditions in the United States
and, to a lesser extent, Europe are not sustained, risks associated with
integrating businesses, demands on management resources and competition. The
company undertakes no obligation to publicly release any revisions to
forward-looking statements to reflect events or circumstances occurring after
the date hereof.
FINANCIAL HIGHLIGHTS Consolidated financial highlights for JLK Direct Distribution Inc. (NYSE: JLK) for the quarter and six months ended December 31, 1999, and 1998 are shown in the following tables (in thousands, except per share amounts). All fiscal year data is subject to year-end (June 30) adjustment and audit by independent public accountants. Consolidated Statements of Income Quarter Ended Six Months Ended December 31, December 31, Operations: 1999 1998 1999 1998 Net sales $119,729 $133,735 $238,044 $265,497 Cost of goods sold 81,715 90,738 161,452 179,710 Gross profit 38,014 42,997 76,592 85,787 Operating expenses 30,925 34,060 62,524 70,436 Operating income 7,089 8,937 14,068 15,351 Interest expense (income) and other (42) 325 75 615 Income before provision for income taxes 7,131 8,612 13,993 14,736 Provision for income taxes 2,819 3,400 5,527 5,800 Net income $ 4,312 $ 5,212 $ 8,466 $ 8,936 Per Share Data: Diluted earnings per share $ 0.18 $ 0.21 $ 0.35 $ 0.36 Diluted average shares outstanding 24,510 24,510 24,510 24,510
SOURCE JLK Direct Distribution Inc.
CONTACT: Mary C. Stanutz, Manager, Investor Relations, of JLK Direct Distribution, 724-539-5638