Only 64% of the b-to-b catalogers tracked grew their first-quarter sales, but 71% managed to boost their bottom line.
Consumer catalogers aren’t the only ones suffering from lackluster sales. During the first quarter of 2001, only 64% of the business-to-business catalogers tracked by investment bank Ulin & Holland for Catalog Age managed to improve upon last year’s first-quarter sales. In comparison, last year 77% of the b-to-bers enjoyed increased first-quarter revenue.
But on the income side of the ledger, the b-to-bers as a whole are performing better than they had a year ago. Seventy-one percent have boosted first-quarter net income or cut their net loss, whereas last year just 56% had.
CATALOG AGE SPOTLIGHT ON FINANCIALS
Connectivity Projects Boost Black Box
The Numbers: For the quarter ended March 31, networking products and services provider Black Box Corp. saw double-digit growth in both income and revenue. March 31 also marked the end of the Lawrence, PA-based company’s fiscal year, and its growth for the year was equally impressive. Annual income jumped 31%, to $64.2 million from $48.9 million. Meanwhile, annual revenue climbed 63%, from $508.3 million to $826.9 million. And Black Box doesn’t believe that the economic slowdown will hurt it much: The company expects to finish the current fiscal year with sales of at least $1 billion.
The Skinny: Sell them the product, then provide the service: Much of Black Box’s revenue growth resulted from sales of its technical services.
Sales Decline, but Systemax
Returns to Profitability
The Numbers: Despite a nearly 10% drop in first-quarter sales, Port Washington, NY-based computer and industrial products manufacturer/marketer Systemax managed to reverse last year’s first-quarter loss. For the three months ended March 31, Systemax earned $363,000 on $405.9 million in net sales. For the first quarter of 2000, the company had posted a net loss of $2.6 million on net sales of $448.9 million.
The Skinny: The company blamed the sales decline on the sluggish domestic computer market. Sales in Europe, on the other hand, grew 11% since last year.
Schein Shines Once Again
The Numbers: With a 7% rise in first-quarter net sales and a 24% jump in net income, medical, dental, and veterinary supplies cataloger Henry Schein got the year off to a healthy start. For the three months ended March 31, the Melville, NY-based company reported net income of $14.1 million on net sales of $593.9 million. For the first quarter of 2000, it had net income of $11.4 million on sales of $554.1 million. Henry Schein’s medical division benefited from the largest sales gain — more than 15% — to bring in $195.9 million in revenue for the quarter. On the down side, veterinary sales fell nearly 5%.
The Skinny: In addition to increasing its market share in the medical arena, Henry Schein reaped the rewards of last year’s cost-saving initiatives.
MSC Bests Sales and Income
The Numbers: First-quarter growth at industrial tools supplier MSC Industrial Direct wasn’t spectacular, but it was growth nonetheless. The Melville, NY-based cataloger boosted net sales 7%, to $211.5 million, and net income 5%, to $14.4 million.
The Skinny: With this statement, MSC chairman/CEO Mitchell Jacobson proves the winner of the Silk Purse/Sow’s Ear Award: “We have been able to capitalize on this economic weakness and the adverse effects on our customers by aggressively growing our sales force and expanding our prospecting for new customers.”
PC Connection Takes a Hit
The Numbers: First, the bad news: Merrimack, NH-based PC Connection saw first-quarter net sales drop 10%, to $301.8 million from $333.8 million last year. Now, the worst news: Including the one-time $851,000 charge related to reductions in nonsales staffing designed to cut operating costs, the computer cataloger’s net income plunged 66%, from $7.1 million to $2.4 million.
The Skinny: Blame it on what CEO Patricia Gallup in a statement called “a wait-and-see attitude toward IT spending as [customers] try to determine what their own demand, technology budgets, and staffing levels will be for the year.’
NEBS Sees Net Income Fall
The Numbers: Groton, MA-based New England Business Service (NEBS) doesn’t have much good news to report either. The business forms, supplies, and clothing cataloger cited weak economic conditions across all its channels as the culprit behind its 53% plummet in net income, from $7.5 million for the first quarter of 2000 to $3.5 million for the three months ended March 24. True, revenue grew 5%, to $123.2 million, but that’s due mainly to its PremiumWear catalog, which NEBS acquired in July 2000.
The Skinny: “NEBS hasn’t as yet trimmed its infrastructure enough to accommodate slow sales,” says Jim Adams, managing director of Ulin & Holland. But he adds that the company is now working to cut costs, by laying off staff among other tactics.
Transmation Measures a Profit
The Numbers: Test, measurement, and calibration equipment manufacturer/marketer Transmation climbed out of the red and into the black. For the quarter ended March 31, the Rochester, NY-based company posted net income of $655,092, compared to a loss of $52,684 the previous first quarter. And the turnaround came despite a 1% dip in sales, to $20.2 million.
The Skinny: During the past year, reviewed its core business processes with an eye to containing costs. Its efforts paid off with decreases in selling, general, and administrative expenses.
FINANCIAL REPORT
| REVENUE $000 | NET INCOME $000 | ||||||||
|---|---|---|---|---|---|---|---|---|---|
| 12 Months Prior | Current Quarter | Improvement (Decline) | 12 Months Prior | Current Quarter | Improvement (Decline) | Info as of Quarter Ended | P/E (as of 5/17/01) | ||
| BUSINESS-TO-BUSINESS | Henry Schein | 554,139 | 593,895 | 7% | 11,398 | 14,132 | 24% | 3/31/01 | 28.19 |
| Moore Medical Corp. | 29,517 | 32,249 | 9% | (255) | (1,097) | (330%) | 3/31/01 | N/A | |
| MSC Industrial | 198,233 | 211,536 | 7% | 13,613 | 14,350 | 5% | 2/24/01 | 19.27 | |
| New England Business Service | 117,367 | 123,179 | 5% | 7,481 | 3,547 | (53%) | 3/24/01 | 11.11 | |
| Systemax | 448,870 | 405,898 | (10%) | (2,552) | 363 | NM | 3/31/01 | N/A | |
| Tessco Technologies | 56,253 | 59,988 | 7% | 1,444 | 220 | (85%) | 4/1/01 | 11.28 | |
| Transmation | 20,350 | 20,171 | (1%) | (53) | 655 | NM | 3/31/01 | 27.67 | |
| COMPUTER PRODUCTS | Black Box Corp. | 159,376 | 225,157 | 41% | 14,330 | 17,106 | 19% | 3/31/01 | 20.40 |
| CDW Computer Centers | 863,988 | 987,245 | 14% | 35,291 | 40,476 | 15% | 3/31/01 | 21.74 | |
| IdeaMall | 237,137 | 198,351 | (16%) | (7,472) | 1,232 | NM | 3/31/01 | N/A | |
| Insight Enterprises | 467,303 | 557,503 | 19% | 12,326 | 14,286 | 16% | 3/31/01 | 17.99 | |
| PC Connection | 333,799 | 301,775 | (10%) | 7,119 | 2,433 | (66%) | 3/31/01 | 13.93 | |
| Programmer’s Paradise | 52,686 | 24,164 | (54%) | (699) | (156) | NM | 3/31/01 | N/A | |
| Zones | 126,306 | 161,169 | 28% | (673) | 104 | NM | 3/31/01 | 54.85 | |
| MARKET INDICES | Dow Jones Industrial Average | 24.23 | |||||||
| Standard & Poor’s 500 Index | 25.84 | ||||||||
| Notes: Price-to-earnings ratios are from various sources NM = not meaningful NA = not available Source: Ulin & Holland |
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