Sales in the second quarter of 2010 increased 2% when compared to the second quarter of 2009, as the depressed economic environment curtailed demand and competitive pricing pressured sales. Based on our estimates, copper had a positive impact on sales of approximately 5% during the second quarter. However, product pricing on several shipments for major projects was based on previously committed copper futures, which mitigated the effect of commodity inflation in the quarter.

Management estimates that sales in our core Repair and Replacement business, also referred to as Maintenance, Repair and Operations (MRO), were essentially flat with the second quarter of 2009 due to the continuing soft levels of industrial demand and lower discretionary spending. Sales within our Project business, principally from our five growth initiatives of Utility Power Generation, Environmental Compliance, Engineering & Construction, Industrials and LifeGuard(TM), our proprietary private-label product, were estimated to be up approximately 5% to 10% over the prior year quarter.

Despite acquisition expenses of $0.3 million, operating expenses decreased by 1% from the second quarter of 2009. We continued to manage spending and maintained personnel counts from the first quarter, excluding personnel from the acquisition. Interest expense was 33% lower than second quarter 2009, as average debt levels fell 51%, from $19.5 million in 2009 to $9.5 million in 2010, absent the late quarter acquisition. Operating income and net income each declined 3.7% due to the small decrease in gross profit.

Chuck Sorrentino, President and Chief Executive Officer, commented, “Sales and operating income in the second quarter, excluding acquisition expenses, were up modestly over the prior year quarter as product demand remained soft, principally in our Repair and Replacement business.

“We continued to increase market share by adding more than 30 new customers in the quarter, not counting those added through the acquisition. Additionally, I am delighted that we were able to complete the acquisition of Southwest Wire Rope and Southern Wire before the close of the second quarter. Our teams have been working diligently toward a seamless transition and we appreciate their support. This acquisition expands our product offering within the industrial, infrastructure, and utility markets and we expect will increase our revenues by an estimated 20-25% over the next several quarters, absent a change in the business climate.

“For the balance of the year, we will focus on integrating SWWR and SW into our distribution platform and forge ahead in our goals to increase market share, aggressively manage expenses, maintain strong customer service metrics and improve balance sheet liquidity.”