Atlanta-based Zep's fiscal Q4 net income rose 93% year-over-year to US$4.1M, due in part to higher revenue from acquisitions and price increases; revenue jumped 8% to US$173.8M from US$161.4M a year ago
October 17, 2011
– Zep Inc. said Thursday that its fiscal fourth quarter net income rose 93 percent, helped by higher revenue from acquisitions and price increases, and the fact that year-ago results include restructuring charges.
But when adjusted to exclude special charges, profit declined from a year ago, and shares tumbled 9 percent in premarket trading.
The Atlanta company makes cleaners, pest and weed control products, and disinfectants.
Zep said the uncertain economy and high unemployment hurt sales volumes. The tough economy made it difficult to raise prices enough to offset higher raw material costs.
"While we were successful in instituting price increases in our sales and service channel, the benefits of price increases we initiated in the retail and distribution channels were not enough to mitigate higher raw materials costs to the extent we had envisioned," said CEO John Morgan. He said that the company expects higher materials costs and difficulty raising prices will continue to weigh on margins.
Net income nearly doubled to $4.1 million, or 18 cents per share, in the three months ended Aug. 31, from $2.1 million, or 9 cents per share, in the same period a year ago. Excluding one-time items, net income fell to 24 cents per share from 33 cents per share last year.
Revenue rose 8 percent to $173.8 million from $161.4 million last year, helped by acquisitions and price increases.
Analysts expected earnings of 37 cents per share on revenue of $175.8 million, according to Fact Set.
For the fiscal year, the Atlanta company said net income rose 29 percent to $17.4 million, or 78 cents per share, from $13.5 million, or 61 cents per share, in 2010.
Revenue rose 14 percent to $646 million from $568.5 million last year.
The stock fell $1.58, or 9 percent, to $16 in premarket trading. It closed down at $17.58 Wednesday, and has ranged from $13.33 to $20.95 in the past 12 months.
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