Exhibit 99.1
Kathleen S. Dvorak
Sr. Vice President, Investor Relations
and Financial Administration
or
Randall W. Larrimore
President and Chief Executive Officer
United Stationers Inc.
(847) 699-5000
FOR IMMEDIATE RELEASE
UNITED STATIONERS REPORTS
RECORD THIRD-QUARTER SALES AND EARNINGS
AND ANNOUNCES SHARE REPURCHASE PROGRAM
DES PLAINES, Ill., Oct. 23, 2000--United Stationers Inc. (Nasdaq: USTR) today
reported record sales and earnings for the three and nine months ended September
30, 2000. The company also announced that its board of directors has authorized
a $50 million share repurchase program.
RECORD SALES AND EARNINGS FOR THIRD QUARTER AND YEAR-TO-DATE
Sales rose 13.8%, and earnings per share were up 16.9% for the latest quarter.
Net sales reached a record $999.0 million--up 15.6% when adjusted for equivalent
workdays--versus $877.8 million in the prior-year quarter. Net income was $26.4
million for the three months, an increase of 18.5% compared with $22.3 million
in 1999. Diluted earnings per share reached $0.76 for the quarter, compared with
$0.65 for the same period last year.
Year-to-date sales increased 16.2% to $2.9 billion, compared with $2.5 billion
for the first three quarters in 1999. Nine-month net income was $73.1 million
(excluding the second quarter 2000 extraordinary item of $6.5 million, net of
tax), up 25.4% from $58.3 million. Earnings per share on a diluted basis were
$2.10 for the nine months (excluding the extraordinary item), up 28.0%, versus
$1.64 for the same period last year.
RECORD RESULTS IN THE FACE OF STRONG PRIOR-YEAR PERFORMANCE
"This is our 18th consecutive quarter of record sales and earnings," said
Randall Larrimore, president and chief executive officer. "This performance
demonstrates that United Stationers' commitment to provide high service levels,
combined with fulfillment excellence, is being well-received by our customers.
"We are pleased that our rate of sales growth has remained solid even as we
compare against strong revenues in the prior year. Our July 2000 acquisitions of
Azerty Canada and CallCenter Services accounted for approximately 4% of the
15.6% growth in the quarter," Larrimore added. "Our sales increase reflects high
levels of demand in all product categories and across all business units. In
particular, we have seen sustained strength in office furniture and janitorial
and sanitation products.
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"Our gross margin and operating expense ratios for the third quarters of 2000
and 1999 remained flat at 16.4% and 11.0%, respectively. We incurred
approximately $1.7 million of expenses in the third quarter of 2000 for our
third-party fulfillment and logistics business, bringing year-to-date expenses
to approximately $3.9 million. Excluding these expenses for the current quarter,
our operating expense ratio would have been 10.8%," Larrimore explained.
SHARE REPURCHASE PROGRAM
The Board of Directors has authorized a share repurchase program of up to $50.0
million of the company's common stock. Purchases will be made from time-to-time
in the open market or in privately negotiated transactions. United Stationers
currently has 34.3 million shares outstanding.
"We continuously explore acquisition and growth opportunities, and evaluate the
best use of our capital," Larrimore said. "Given current market conditions, we
believe the repurchase of our stock is a timely investment at an extremely
attractive valuation. The repurchase program will be funded through the
company's senior revolving credit facility."
THE ORDER PEOPLE
In July, United Stationers established THE ORDER PEOPLE to operate as its
third-party fulfillment provider for items other than office products. This
operation is designed to capitalize on United Stationers' core competencies in
fulfillment and distribution, value-added marketing services and customer care.
THE ORDER PEOPLE expanded its breadth of services by acquiring CallCenter
Services and purchasing a powerful enterprise eCRM software package, also in
July. This positions THE ORDER PEOPLE for rapid growth by adding cutting-edge
technology, size, and scalability.
"During the third quarter, we have focused on laying the groundwork for
rock-solid operations and customer care functionality for the clients of THE
ORDER PEOPLE. In the next few months, THE ORDER PEOPLE will have the
infrastructure necessary to execute its business plan," Larrimore continued.
"This will include a unique set of cutting-edge outsourcing solutions, plus a
state-of-the-art distribution and service center in Memphis, Tennessee, that
will be operational in early November, followed by a facility in Harrisburg,
Pennsylvania, that is scheduled to open in March 2001. With the addition of a
planned West Coast facility, we believe we will have the optimal distribution
model for third-party logistics and fulfillment. As a result of all these
initiatives, we are well positioned for growth in the coming year."
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2000 AND 2001 OUTLOOK
"Looking ahead, we remain confident that United Stationers will achieve record
sales and earnings for the fourth quarter and full year," Larrimore added.
"Earnings per share for 2000 are expected to be in the range of $2.87 to $2.90.
"The strength of our business has enabled us to make strategic investments in
THE ORDER PEOPLE. Capital expenditures for 2000 of $25 million--related to our
core business--will be significantly lower than originally anticipated. Capital
expenditures for 2000 related to THE ORDER PEOPLE will be approximately $15
million, bringing 2000 capital expenditures to a total of $40 million,"
Larrimore said. "We anticipate capital expenditures for 2001--including capital
necessary to complete the infrastructure for THE ORDER PEOPLE--to be
approximately $45 million.
"Moving into 2001, we believe that United Stationers will achieve its goal of
6-to-9% organic sales growth, and an earnings per share increase of
approximately 15%," Larrimore concluded.
CONFERENCE CALL
United Stationers will host a conference call on Wednesday, Oct. 25, at 8:00
a.m. (Central Time) to discuss third quarter performance and the outlook for the
full year. To listen to the conference call, visit the investor relations
section of the company's Website at www.unitedstationers.com at least 15 minutes
before the call, and follow the instructions provided to ensure that the
necessary audio application is downloaded and installed. This program is
provided at no charge to the user. In addition, interested parties can access an
archived version of the call, which will also be located on the investor
relations section of United Stationers' Website, approximately two hours after
the call's conclusion and will remain available for one week.
FORWARD-LOOKING STATEMENTS
WITH THE EXCEPTION OF STATEMENTS ON HISTORICAL EVENTS, THE INFORMATION PRESENTED
IN THIS NEWS RELEASE CONTAINS FORWARD-LOOKING STATEMENTS WITHIN THE MEANING OF
SECTION 21E OF THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED. THESE STATEMENTS
INVOLVE RISKS AND UNCERTAINTIES THAT COULD CAUSE ACTUAL RESULTS TO DIFFER
MATERIALLY FROM THE INFORMATION PRESENTED HERE. THE RISKS AND UNCERTAINTIES
AFFECTING THIS RELEASE INCLUDE, BUT ARE NOT LIMITED TO, ASSESSING THE MARKET
POTENTIAL FOR THIRD-PARTY SERVICE PROVIDERS, THE SUCCESS OF THE ORDER PEOPLE AND
e-NITED, THE INTEGRATION OF ACQUISITIONS, CHANGES IN END-USERS' DEMANDS FOR
BUSINESS PRODUCTS, CUSTOMER CREDIT RISK, THE COMPANY'S RELIANCE ON CERTAIN KEY
SUPPLIERS, THE EFFECTS OF FLUCTUATIONS IN MANUFACTURERS' PRICING AND GENERAL
ECONOMIC CONDITIONS, AND THE HIGHLY COMPETITIVE ENVIRONMENT IN WHICH THE COMPANY
OPERATES. A DESCRIPTION OF THESE AND OTHER FACTORS THAT COULD AFFECT THE
COMPANY'S BUSINESS ARE SET FORTH IN FILINGS WITH THE SECURITIES AND EXCHANGE
COMMISSION INCLUDING THE COMPANY'S LATEST 10-K AND 10-Q.
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COMPANY OVERVIEW
United Stationers Inc., with trailing 12-month sales of $3.8 billion, is North
America's largest distributor of business products to resellers. Its integrated
computer-based distribution system makes more than 35,000 items available to
20,000 resellers. United is able to ship products within 24 hours of order
placement because of its 39 United Stationers Supply Co. regional distribution
centers, 21 Lagasse distribution centers that serve the janitorial and
sanitation industry, six Azerty distribution centers that serve computer supply
resellers, and three distribution centers that serve the Canadian marketplace.
Its focus on fulfillment excellence has given the company a 98+ percent order
fill rate, a 99.5 percent order accuracy rate, and a 99 percent on-time delivery
rate. For more information, visit www.unitedstationers.com.
The company's common stock trades on the Nasdaq National Market System
under the symbol USTR and is included in the S&P SmallCap 600 Index.
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UNITED STATIONERS INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(in thousands, except per share data)
(unaudited)
FOR THE THREE MONTHS ENDED FOR THE NINE MONTHS ENDED
------------------------------- --------------------------------
Sept. 30, 2000 Sept. 30, 1999 Sept. 30, 2000 Sept. 30, 1999
-------------- -------------- -------------- --------------
Net sales $ 998,976 $ 877,802 $ 2,907,261 $ 2,502,816
Cost of goods sold 835,080 733,752 2,437,234 2,096,609
-------------- -------------- -------------- --------------
Gross profit 163,896 144,050 470,027 406,207
Operating expenses:
Warehousing, marketing and
administrative expenses 110,015 96,200 319,376 276,713
-------------- -------------- -------------- --------------
Income from operations 53,881 47,850 150,651 129,494
Interest expense, net 6,855 6,853 19,826 21,963
Other expense 2,834 2,575 8,215 7,032
-------------- -------------- -------------- --------------
Income before income taxes
and extraordinary item 44,192 38,422 122,610 100,499
Income taxes 17,765 16,129 49,491 42,201
-------------- -------------- -------------- --------------
Income before extraordinary item 26,427 22,293 73,119 58,298
Extraordinary item - loss on early
retirement of debt, net of tax
benefit of $4,248 -- -- 6,476 --
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Net income $ 26,427 $ 22,293 $ 66,643 $ 58,298
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Net income (loss) per common share -
assuming dilution:
Income before extraordinary item $ 0.76 $ 0.65 $ 2.10 $ 1.64
Extraordinary item -- -- (0.19) --
-------------- -------------- -------------- --------------
Net income per share $ 0.76 $ 0.65 $ 1.91 $ 1.64
============== ============== ============== ==============
Average number of common shares
(in thousands) 34,926 34,472 34,890 35,448
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UNITED STATIONERS INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(dollars in thousands, except share data)
(unaudited)
September 30,
----------------------------
2000 1999
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ASSETS
Current assets:
Cash and cash equivalents $ 22,525 $ 12,601
Accounts receivable, net 342,977 257,419
Inventories 597,484 536,841
Other current assets 24,348 32,760
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Total current assets 987,334 839,621
Property, plant and equipment, net 186,059 170,317
Goodwill, net 181,326 177,986
Other 18,650 18,355
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Total assets $ 1,373,369 $ 1,206,279
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LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable $ 377,577 $ 346,043
Accrued liabilities 152,273 146,952
Current maturities of long-term debt 38,220 8,462
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Total current liabilities 568,070 501,457
Deferred income taxes 21,382 28,886
Long-term obligations 308,563 295,108
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Total liabilities 898,015 825,451
Stockholders' equity:
Common stock, $0.10 par value; authorized -
100,000,000 shares, issued - 37,213,207 in 2000 and
37,212,178 in 1999 3,721 3,721
Additional paid-in capital 301,579 303,366
Treasury stock, at cost - shares outstanding -
2,940,330 in 2000 and 3,237,667 in 1999 (44,851) (49,410)
Retained earnings 214,905 123,151
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Total stockholders' equity 475,354 380,828
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Total liabilities and stockholders' equity $ 1,373,369 $ 1,206,279
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