CHICAGO, Jan. 7 /PRNewswire/ -- W.W. Grainger, Inc. (NYSE: GWW) today
announced that its fourth quarter earnings per share could be as much as
45 percent lower than the current First Call consensus estimate of $0.54 when
the Company reports its fourth quarter and year-end results later this month.
The results reflect a negative fourth quarter adjustment to inventory, which
is related to the installation of a new enterprise resource planning system.
In addition, the Company experienced higher operating expenses in the quarter.
During 1999, the Company installed a new enterprise resource planning
system and, as a result of problems with the installation, experienced
substantial systems and transaction processing disruptions including system
slowdowns and outages. After completing a physical count of inventory during
the fourth quarter, the Company found that inventory shrinkage was greater
than expected. The incremental shrinkage can be attributed to transaction
processing failures during the systems installation.
The higher operating expenses are related to Internet initiatives and
employee compensation and benefit costs largely driven by the installation of
the new system and the physical inventory count.
Grainger Chairman and Chief Executive Officer Richard L. Keyser said, "We
have taken the necessary steps to correct the problems and have completed the
rollout of the new system to our 370 branches and six zone distribution
centers." He added, "Despite the challenges experienced during 1999, we are
pleased with the strong sales growth in December, particularly on-line sales
which had an annualized run rate of more than $200 million. We will continue
to aggressively invest in our Internet initiatives to extend our leadership
position."
W.W. Grainger, Inc. (GWW), with 1998 sales of $4.3 billion, is the leading
North American provider of maintenance, repair and operating (MRO) supplies,
services and related information to businesses and institutions. GWW shares
are traded on the New York and Chicago stock exchanges. For more information,
visit Grainger on-line at http://www.grainger.com .
This document contains statements that are not historical facts and are
forward-looking. The forward-looking statements are based on the Company's
current expectations and some of them are subject to risks and uncertainties
the outcome of which could result in actual future performance being
materially different from the performance indicated. They should be read in
conjunction with the Company's most recent annual report, as well as the
Company's Form 10-K and other reports filed with the Securities and Exchange
Commission, containing a discussion of the Company's business and of various
factors that may affect it.
SOURCE W.W. Grainger, Inc.
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Related links:
http://www.Grainger.com
Company News On-Call:
http://www.prnewswire.com/comp/953850.html or fax,
800-758-5804, ext. 953850
CONTACT:
Nancy A. Hobor, Vice President,
Communications and Investor Relations of W.W. Grainger,
847-535-0065
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