United Stationers 3Q earning up despite flast sales

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DEERFIELD — United Stationers Inc. reported third quarter 2012 earnings per share up 12 percent and operating cash flow of $107 million on relatively flat sales.

Net sales in the third quarter were $1.3 billion, flat compared with the prior-year quarter, after adjusting for one less selling day in the third quarter of 2012, the company said in a statement. Diluted earnings per share were 91 cents, compared with 81 cents in the prior-year quarter.

"Our third quarter results reflect solid progress on our 'Winning-from-the-Middle' strategy," said Cody Phipps, president and chief executive officer. "We drove strong EPS growth, solid cash generation and gross margin expansion. The acquisition of O.K.I. Supply extends our industrial platform in several highly complementary categories and creates compelling growth opportunities and operating efficiencies.

"In addition, we continued to drive organic growth in industrial and janitorial & breakroom and from our online and public sector initiatives while supporting our core independent and national accounts customers as they reposition themselves in a rapidly evolving marketplace," Phipps added.

Sales growth in the industrial supplies and janitorial/breakroom categories were 7 percent and 2.3 percent, respectively, from last year, the company said. Office products improved by 1.3 percent growth while technology and furniture category sales were down 4.5 percent and 2.9 percent, respectively, versus the prior year.

Net income was $36.8 million in 2012, compared with $35.8 million in the year-ago quarter. Operating income for the latest quarter was $63.6 million, or 4.9 percent of sales, compared with $64.6 million or 4.9% of sales in the same quarter last year.

Gross margin in the third quarter of 2012 was up $4 million to $203.8 million, or 15.8 percent of sales, compared with $199.8 million, or 15.3 percent of sales, in last year's third quarter. Operating expenses in the quarter were $140.1 million, or 10.9% of sales, compared with $135.1 million, or 10.3% of sales in the prior-year quarter.