Source Releases Q3 Results — Cites Plan to Consolidate Mainstream and Specialty Magazine Distribution Platforms
Source Interlink Companies Chairman Mike Duckworth cited the consolidation plan as one of the company’s major initiatives in its magazine distribution business segment during a 3rd quarter earnings conference call, late yesterday. Third quarter revenue in the segment increased by 8.6% to $222.2 million, mostly because the company’s Anderson News acquisitions were only on its books for one month during the prior-year period. EBITDA in Source’s magazine distribution business increased by $3.4 million, or 56.4%, which Duckworth cited as “…strong indication that our cost savings initiatives are improving margins dramatically, in viturally all aspects of this business.” Source expanded its relationships with national clients during the quarter, picking up Walgreens stores in northern California and Ohio, Safeway stores in Arizona, and Paradies shops at the Detroit airpot. It added magazines to its book distribution business at Kroger and, on September 1st, became the exclusive magazine supplier for Borders. The company expects to realize greater efficiencies from its new McCook, Illinois, distribution center, which replaces older facilities in Chicago and Brainerd, Minnesota. In another effiency-enhancing measure, Source has introduced a new, web-based reporting system for its 4,000 in-store merchandisers.
Companywide, Source’s adusted income from continuing operations for the third quarter totaled $12.6 million — $0.24 per diluted share, a 60% increase per share over the prior-year period. On the call, executives reported strong sales in the third quarter and reiterated their guidance for fiscal 2008. Complete third quarter results are available in the press release. In addition, the earnings conference call was recorded and can be accessed through a link on the company’s website here. (Registration required.) Source Interlink Companies Press Release .PDF File Download (Dec. 6, 2007)