CHICAGO, April 17 /PRNewswire/ -- Grainger (NYSE: GWW) today reported a
sales increase of 10 percent for the first quarter ended March 31, 2000. Net
earnings, however, declined by 27 percent primarily as a result of investments
the Company continues to make in its Internet businesses. Earnings per fully
diluted share were also down 27 percent.
Sales increased to $1.2 billion for the first quarter of 2000, versus
$1.1 billion for the first quarter of 1999. Net earnings for the quarter were
$41.2 million, compared to $56.3 million for the prior year quarter. Earnings
per fully diluted share were $0.44 versus $0.60 in the comparable quarter in
1999.
"I am pleased by the strong sales results for the quarter," said Richard
L. Keyser, Grainger's Chairman and Chief Executive Officer. "We saw the
branch-based businesses improve sales growth sequentially throughout the first
quarter, with sales up 9 percent over last year's first quarter. We also
continued to invest heavily in our Internet businesses, which will help
position us for the future."
Sales processed through the Company's Internet businesses continued to
grow, reaching $62 million during the quarter versus $10 million for the
1999 first quarter. The Company invested $25 million in its various Internet
initiatives compared to $7 million in the first quarter last year.
Grainger.com recorded its first-ever million dollar sales day during the
quarter. FindMRO.com, Grainger's solution for sourcing hard-to-find
maintenance, repair, and operating (MRO) items, also grew rapidly.
At the end of March, the Company's latest Internet initiative,
TotalMRO.com, went live with a major customer, providing it with an MRO
marketplace. Sales processed through the Company's suite of five
business-to-business e-commerce sites (FindMRO.com, Grainger.com, Grainger
Auction, OrderZone.com, and TotalMRO.com) ended the quarter with an annualized
run rate around $300 million.
Added Keyser, "We have fully embraced the Internet as a way to gain market
share. All of the studies we've done show that companies can save on the
process costs of buying MRO products when they use the Internet and the rich
product information we provide."
The Company experienced double-digit sales growth in several of its
businesses including its two foreign operations, Acklands-Grainger Inc.
(Canada) and Grainger, S.A. de C.V. (Mexico). Grainger Integrated Supply, the
Company's outsourcing unit, continued its rapid growth fueled by new contracts
and scope expansions, growing sales by 51 percent. Grainger Industrial Supply
saw sales improve sequentially during each month of the quarter.
W.W. Grainger, Inc. (GWW), with 1999 sales of $4.5 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 (generally identified by
words or phrases indicating a projection or future expectation such as "is
planning to" or "estimates") 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.
CONSOLIDATED STATEMENTS OF EARNINGS (Unaudited)
(In thousands of dollars except for per share amounts)
Three Months ended March 31
2000 1999
Net sales $1,195,194 $1,090,843
Cost of merchandise sold 773,647 687,981
Gross profit 421,547 402,862
Warehousing, marketing, and
administrative expenses 346,770 306,596
Operating earnings 74,777 96,266
Other income or (deductions)
Interest income 497 410
Interest expense (6,102) (1,733)
Unclassified-net 91 (384)
(5,514) (1,707)
Earnings before
income taxes 69,263 94,559
Income taxes 28,052 38,296
Net earnings $41,211 $56,263
Net earnings per share
- Basic $0.44 $0.61
- Diluted $0.44 $0.60
Average number of shares
outstanding
- Basic 92,917,780 92,833,727
- Diluted 94,416,374 94,210,765
Supplemental financial information concerning the Quarter ended March 31,
2000 is available upon request. Contact Dileep Gangolli, Manager, Investor
Relations, at 847-535-0879 or gangolli.d@grainger.com.
SOURCE W.W. Grainger, Inc.
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http://www.Grainger.com
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http://www.prnewswire.com/comp/953850.html or fax,
800-758-5804, ext. 953850
CONTACT:
William D. Chapman, Director, Investor
Relations of W.W. Grainger, Inc., 847-535-0881
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