Zep 4Q profit rises 79 pct despite sales drop
ATLANTA -- Zep Inc., which makes cleaners, pest and weed control products and disinfectants, said Thursday that its fiscal fourth-quarter net income jumped 79 percent despite a drop in revenue.
The company credited the profit bump to higher prices and improved manufacturing productivity. It cut selling and administrative expenses by 6 percent to $66.6 million.
For the quarter ended Aug. 31, the Atlanta-based company earned $7.3 million, or 33 cents per share, up from $4.1 million, or 18 cents per share, in the same quarter last year.
Analysts, on average, expected a profit of 35 cents per share, according to a FactSet poll.
Revenue fell 1 percent to $171.7 million from $173.8 million, while analysts expected an increase to $175.1 million. Acquisitions and higher prices helped revenue, but fluctuations in currency values hurt revenue. Stripping out newly acquired divisions, sales fell.
Zep, like other companies that do significant business outside the U.S., can be hurt by a rising dollar because income earned in foreign currencies shrinks when it's translated back into a stronger U.S. dollar. Excluding the effects of exchange rates, Zep said its sales were essentially flat.
For the full fiscal year ended in August, Zep said its net income rose to $21.9 million, or 98 cents per share, from $17.4 million, or 78 cents per share, the year before. Revenue rose to $653.5 million from $646 million.