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The Atlanta-based cleaning and maintenance chemicalscompan (NYSE: ZEP) had net incomr of $5.4 million and earnings of 25 centss a share, compared with net income of $168,00 0 and earnings of 1 cent a share in the thirde quarter of 2008. However, sales in the third quarter dropped 15.3 percent to $123 million. Raw material costsz in the third quartefr of 2009 wentup $4.4 million. But the company has consolidatef facilities to reduce its overalo size by about15 percent. The results for the third quarter of 2008included $9.3 million in restructuringf charges.
“Weak customer demand across a numbed ofour end-markets coupled with high raw material costs continued to place downward pressure on our operatinyg margins,” said John K. Morgan, president and CEO of Zep, in an earningsa statement. “However, our restructuring and cost reductionb measures have gainedadditional traction, and our third-quarterd gross profit margin exceeded that of the second quarter by 2.7 percentage points.
I believe our ability to generatee robust cash flow and strengthen our balance sheet durinhg these challenging economic times is a testamentto Zep’sd associates, our business model and our ability to continue to execut despite the recessionary environment.” Looking ahead, Morgan said the compangy will be profitable in all four quarters next barring further deterioration in currenft economic conditions.
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