Essendant Inc. (NASDAQ:ESND) Q4 2015 Earnings Conference Call - Final Transcript

Feb 17, 2016 • 08:30 am ET

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Essendant Inc. (NASDAQ:ESND) Q4 2015 Earnings Conference Call - Final Transcript

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Q & A
Operator
Operator

[Operator Instructions] First question comes from Dan Binder of Jefferies. Please go ahead.

Analyst
Daniel Binder

Thanks and good morning. I just wanted to touch on a few things. First on the sales and earnings build up, appreciate the high level color you just provided. I'm curious, are the recent account wins enough to get to that top line guidance that you spoke to or does more have to be done?

And then as you look at the margin and expense profile, on an annual basis, can you give us some rough color on what we should expect on that front?

Executive
Bob Aiken

A great Good morning, Dan. This is Bob. I'll take the first part of the question on sales and then turn it to Earl on the OpeX. You know, I would say on the sales line, the color we've given reflects some repositioning activities that we took last year also reflects the impact of ORS industrial business, we factor the cycling of those impacts into our sales guidance.

And then look at the pipeline that we've built, the recent account wins and the momentum that we have in the pipeline. And that's what gives us confidence in the guidance that we've given around revenue growth for the year.

And then relative to margin and expense directionally as a percentage of revenue, we don't expect a lot of changes we look into next year, we'll get a little bit of operating leverage on the operating expense line. But we do have some cost increases that are built into that too.

And obviously, the margins will be directionally similar in order to get to the performance. So this is largely driven the earnings improvement as far as what driven on the revenue growth as we talked about.

Analyst
Daniel Binder

And then with regard to the it platform integration, because my understanding was that, you know, these systems would run in parallel and then you make this transition and there would be relatively little risk. You did sight a little bit of disruption. I'm just curious, the nature of that. And then what the timing looks like on the industrial integration and how the risks look with that as well. If you can include in that discussion that the timing and cost, CapEx, etc. That'd be helpful.

Executive
Bob Aiken

Yeah. Let me start with work done today. As we said, we completed the physical conversion of 14 facilities, last year with continued with conversions into this year. The physical conversions of the facilities have gone well, as we said, we're on time and on budget. As we look at the customer experience of our JanSan distributors, there's some functionality that's really critical to their businesses, that as we made the conversions, we weren't delivering the customer experience that we wanted to for those JanSan distributors.

So we're going back over the next 8 to 10 weeks and building that functionality in, to help resolve the disruption that we've created in their businesses. We're not losing accounts, we're just making it