Third Quarter 2011 Results Compared to Third Quarter 2010
(See accompanying financial schedules for full financial details and reconciliations of Non-GAAP financial measures to their GAAP equivalents.)
• Sales were $217.2 million compared to $180.4 million last year, an increase of $36.8 million, or 20.4 percent. We estimate sales increased approximately 22 percent due to increased sales volume, and was partially offset by commodity price deflation.
• Gross margin percentage was 20.5 percent, up from 19.7 percent, a 0.8 percentage point increase from the third quarter of 2010. Specifically, margins improved 1.1 percentage points due to increased sales volume combined with a decrease of fixed costs in costs of goods sold, which was offset slightly by a 0.4 percentage point decrease in sales price.
• Selling, general and administrative ("SG&A") expenses increased $2.6 million, or 5.5 percent from the same quarter last year. As a percentage of sales, SG&A expense, excluding stock compensation expense and the benefit of a $1.2 million litigation settlement recorded in the third quarter of 2010, decreased from 26.4 percent in the third quarter of 2010, to 22.3 percent in 2011. For the current quarter, our salaries and benefits expense, excluding stock compensation expense, was $28.8 million, an increase of $0.3 million when compared to the third quarter of 2010. Delivery expense increased approximately $0.5 million, largely due to higher fuel costs.
• Interest expense was $5.3 million in the current quarter, a decrease of $1.6 million from the third quarter of 2010, which was primarily due to the expiration of our interest rate swaps during 2011.
• We recorded $0.3 million of income tax expense in the third quarter of 2011, compared to a $0.5 million income tax benefit in the third quarter of 2010. We recorded an after-tax, non-cash valuation allowance of $4.7 million and $7.2 million in 2011 and 2010, respectively, related to our net deferred tax assets. Absent this valuation allowance, our tax benefit rate would have been 39.2 percent and 38.4 percent in 2011 and 2010, respectively.
• Loss from continuing operations was $11.5 million, or $0.12 loss per diluted share, compared to $19.7 million, or $0.21 loss per diluted share, for the third quarter of 2010. Excluding the valuation allowance, our loss from continuing operations per diluted share was $0.07 and $0.13 for 2011 and 2010, respectively.
• Net loss for the third quarter of 2011 was $11.6 million, or $0.12 loss per diluted share, compared to net loss of $20.5 million, or $0.22 loss per diluted share, in the third quarter of 2010.
• Diluted weighted average shares outstanding were 95.0 million compared to 94.9 million in the third quarter of 2010.
• Adjusted EBITDA was a loss of $0.7 million compared to a loss of $8.3 million last year. See reconciliation attached.
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