Zep Q1 Profit Down - Quick Facts

(RTTNews) - Zep Inc. (ZEP), consumable chemical packaged goods company that manufactures a wide variety of high-performance maintenance and cleaning chemicals, reported that net income for the first-quarter ended November 30, 2013 declined to $3.10 million or $0.14 per share, from $3.48 million or $0.16 per share in the same quarter last year.

Adjusted earnings per share were $0.17, down from $0.20 last year. Analysts polled by Thomson Reuters expected the company to report earnings of $0.15 per share for the quarter. Analysts' estimates typically exclude special items.

Net sales grew 4.3% in the first fiscal quarter of 2014 to $164.9 million from last year's $158.03 million, due to increases in its Transportation business, primarily as a result of the inclusion of Zep Vehicle Care, which added $16.1 million to net sales. This increase was partially offset by a decline in Jan/San & Institutional sales combined with an Industrial/MRO business that ended the quarter essentially flat. Three analysts estimated revenues of $160.27 million for the quarter.

Gross profit margin in the first quarter of fiscal 2014 also benefitted from the inclusion of Zep Vehicle Care, increasing 70 basis points to 48.1% compared to the prior year. Selling, distribution and administrative expenses increased $4.6 million, primarily due to the inclusion of Zep Vehicle Care, legal expenses associated with California sales representative litigation, and increased depreciation expense resulting from recent ERP implementation.

"We continue to execute plans for a variety of complexity-reduction activities, including facilities consolidation, process simplification, product-line and customer rationalization and headcount reductions related to such activities. Restructuring actions taken in the fourth quarter of fiscal year 2013 continue to progress as originally expected. We remain on target to realize approximately $9 million of these savings during fiscal 2014, a portion of which will be reinvested in the business," the company said.