Steve Spinner, president and ceo, attributed the increase to higher margin street sales as well as an expansion of the sales force.
"Sales results in the quarter also reflect our previously announced exit of certain lower margin multi-unit business in the broadline segment. Our customized segment continued to increase sales through account penetration and growth with existing customers. We are maintaining our focus on driving standardized business practices throughout our companies as we implement our operational excellence and category management initiatives." Spinner said in a prepared statement.
"In the broadline segment, our expanded street sales force, combined with our account penetration initiatives with existing customers, contributed to 9% growth in higher margin street business versus the prior year quarter. Overall sales in broadline increased by approximately 1% in the third quarter compared to the same quarter last year, reflecting the impact of our previously announced exit of certain lower margin multi-unit business and current industry trends."
Spinner said broadline segment results were impacted by the company's investment in expanding its sales force, continued investment in information technology and by higher fuel costs, partially offset by favorable trends in insurance costs during the quarter. He said the new sales force is contributing to the third larges distributorship's growing mix of higher margin street sales and he anticipates continued productivity in the firm's sales efforts throughout the year.
"We are also very focused on expense control both in broadline and throughout the company," he said.
According to PFG, consolidated net sales from continuing operations in the third quarter were approximately $1.4 billion, an increase of approximately 2%, compared with the prior year quarter. Inflation was approximately 1.5% for the quarter.
The distributorship said net earnings from continuing operations in the third quarter increased to approximately $12.2 million, an increase of approximately 2%, compared with approximately $11.9 million in the same quarter in the previous year. Net earnings include the impact of pre-tax stock compensation expense of approximately $1.3 million, or $828,000 after tax for the quarter, compared to pre-tax stock compensation expense of approximately $355,000, or $220,000 after tax, in the prior year quarter, the distributorship reported. The company's results in the third quarter of 2005 were negatively impacted by the effects of Hurricane Katrina, offset by incremental interest income related to earnings on cash proceeds from the sale of the fresh-cut segment.
Adjusted for the impact of stock compensation expense, PFG said net earnings from continuing operations in the third quarter amounted to approximately $13.0 million, an increase of approximately 7% versus the prior year quarter.
PFG reported that net earnings per share from continuing operations in the third quarter increased approximately 25% to 35 cents per share diluted, compared to 28 cents per share diluted in the prior year quarter, on approximately 19% fewer shares outstanding. Excluding stock compensation expense in the 2006 quarter, net earnings per share were approximately 38 cents per share diluted, the company said.