“Our third quarter provided mixed financial results. I am very pleased that free cash flow generated in the quarter was an impressive 260% of net income. I am, however, very disappointed in our lower earnings per share, even recognizing that more than half of the decline was occasioned by our planned inventory reduction,” said John K. Morgan, chairman, president and CEO of Zep Inc.
Q3 net sales included $17.9 million from acquisitions (Zep Vehicle Care and Mykal Industries), which were accretive to earnings in the quarter. This was partially offset by an $8.5 million decline in all other areas, for a net increase of $9.4 million in the quarter.
Morgan added, “Progress has been made transforming our business through both acquisitions and organic initiatives in key markets.”