UPDATE: Zep Reports FQ1 Profit

Zep Inc.

reported a profit in the fiscal first quarter. The Atlanta, Georgia-based company posted quarterly net income of $3.14 million, or $0.14 per share, compared to $3.1 million, or $0.14 per share, in the year-ago period. The latest quarter profit included acquisition and integration costs of $0.6 million and $0.8 million in legal fees associated with the California Sales Representative Litigation. Zep's adjusted EPS came in at $0.17, while adjusted diluted cash EPS came in at $0.26. Its revenue gained 2.1% to $168.3 million in the quarter from $164.9 million. However, analysts were expecting a profit of $0.14 per share on revenue of $163.25 million. Gross profit slipped 0.6% to $78.8 million from $79.3 million, while gross profit as a percentage of net sales shrank to 46.8%. Operating profit climbed to $7.4 million from $7.3 million. As of November 30, 2014, Zep had $4.2 million in cash and cash equivalents. “Our first fiscal quarter success was driven by our shift into strategic end-markets with favorable trends, the success of our sales pipeline process and the quality and speed of our fire-recovery effort,” said John K. Morgan, Chairman, President and Chief Executive Officer of Zep Inc. Zep shares fell 3.23% to close at $14.98 yesterday.