United Stationers – USTR – Strong EPS growth, solid cash generation and gross margin expansion

United Stationers Inc. (NASDAQ: USTR), a leading North American wholesale distributor of business products, reported third quarter 2012 earnings per share up 12% and operating cash flow of $107 million on relatively flat sales.

USTR – Third Quarter 2012 Financial Highlights

• Net sales in the third quarter were $1.3 billion, flat compared with the prior-year quarter, after adjusting for one less selling day in the third quarter of 2012.
• Diluted earnings per share were $0.91, compared with $0.81 in the prior-year quarter.
• Net cash provided by operating activities in the third quarter of 2012 totaled $107.4 million, compared with $26.2 million in the prior-year quarter.
• Gross margin in the third quarter of 2012 was up $4.0 million to $203.8 million, or 15.8% of sales, compared with $199.8 million, or 15.3% of sales, in last year’s third quarter.
• Operating expenses in the quarter were $140.1 million, or 10.9% of sales, compared with $135.1 million, or 10.3% of sales in the prior-year quarter.
• Operating income in the quarter was $63.6 million, or 4.9% of sales, compared with $64.6 million, or 4.9% of sales, in the year-ago quarter.
• Net income was $36.8 million in 2012, compared with $35.8 million in the year-ago quarter.
• Net cash provided by operating activities for the nine months ended September 30, 2012, totaled $155.7 million versus $99.5 million last year.
• Cash paid for share repurchases for the nine months ended September 30, 2012, totaled $67.5 million for 2.4 million shares.  On October 17, 2012, the board of directors approved a $0.14 per share cash dividend, an increase of 8%, to shareholders of record on December 14, 2012 and payable on January 15, 2013.

“Our third quarter results reflect solid progress on our ‘Winning-from-the-Middle’ strategy,” said Cody Phipps president and chief executive officer.  “We drove strong EPS growth, solid cash generation and gross margin expansion. The acquisition of O.K.I. Supply extends our industrial platform in several highly complementary categories and creates compelling growth opportunities and operating efficiencies.  In addition, we continued to drive organic growth in industrial and janitorial & breakroom and from our online and public sector initiatives while supporting our core independent and national accounts customers as they reposition themselves in a rapidly evolving marketplace.”

USTR – Outlook

“We remain committed to our strategy and see attractive opportunities to profitably grow our business,” said Phipps.  ”In this rapidly evolving market, supporting our customers and supplier partners with a variety of solutions to help them succeed is more important than ever.   That is why we continue to focus on initiatives that bring value to our customers while we drive the efficiency improvements that allow reinvestment in the business.”

About United Stationers – USTR

United Stationers Inc. (USTR) is a leading wholesale distributor of business products, with 2011 net sales of $5.0 billion.  The company stocks a broad and deep line of approximately 100,000 items on a national basis, including technology products, traditional office products, janitorial and breakroom supplies, office furniture, and industrial supplies.  A network currently comprised of 60 distribution centers allows it to deliver these products to over 25,000 reseller customers.  This network, combined with United’s depth and breadth of inventory, enables the company to ship most products overnight to more than 90% of the U.S. and major cities in Mexico.

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Post Written By: Ed Liston Ed Liston is a senior contributing editor at TheStockMarketWatch.com. An active market watcher and investor, Ed guides an independent team of experienced analysts and writes for multiple stock trader publications. He is widely quoted in various financial publications on the Internet. When Ed is not writing about stocks, investing in stocks, talking about stocks, or otherwise doing something stock related, he likes to go sailing and fishing in his yacht.