{mosimage}"Our business outlook in 2007 is for solid sales and earnings growth, significantly ahead of anticipated industry growth," Spinner said in published remarks today. "We expect to begin a return to our long-term objectives of sales and earnings growth in 2007 as we continue to expand sales to higher margin street customers in our broadline segment and utilize available capacity in our customized segment with the addition of anticipated new business. We remain focused on driving efficiency through operational excellence and aggressively managing our overall expense leverage. Based on our current view of the business, we anticipate net earnings per share to be in the range of $1.34-$1.42 for the full year. We also expect net earnings per share to be in the range of 17-20 cents for the first quarter of 2007."
In the broadline segment, Spinner said internal sales growth is expected to be in the mid to upper single digits for the year. Broadline operating margins are expected to improve in the range of approximately 25-35 basis points for the year as a result of the continued implementation of the company's core strategies, offset by higher anticipated insurance costs, according to him. The company will continue its focus on growing higher margin street sales, driving improvements in category management and maintaining its focus on operational efficiency, he said.
Turning to the customized segment, Spinner expects sales growth with existing customers to be in the mid single digits for the year. Internal sales growth is expected to be in the high single to low double digits for the year as the company anticipates the addition of new customized business during the second half of the year, he said. Customized operating margins are expected to decline slightly for the year as a result of higher insurance costs, while the company maintains its focus on further leveraging available capacity and improving efficiencies, he said.
Pre-tax stock compensation expense is expected to be approximately $7-$7.5 million for the 2007 year, reflecting an incremental increase of approximately $2-$2.5 million compared to anticipated stock compensation expense for the 2006 year. Depreciation is expected to be approximately $25-$28 million, amortization approximately $3-$4 million and capital expenditures approximately $75-$85 million for the year.
On a consolidated basis, internal sales growth is expected to be in the upper single digits for the year, driven primarily by our focus on street sales growth, increasing sales to existing customers, and new account gains. Overall industry growth is expected to remain moderate in the coming year. Consolidated operating margins are expected to improve by approximately 5-15 basis points for the year, compared with anticipated 2006 results.
"We remain focused on our overall expense leverage, category management and customer excellence initiatives, which will be accomplished through enhanced technology, training and development of our associates. We expect our investment in these areas to fuel solid sales and earnings growth in 2007 and over the next several years," Spinner noted.
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