School Specialty posts lower-than-expected Q1 results

(Reuters) - School Specialty Inc (SCHS.O: Quote, Profile, Research, Stock Buzz), a school products supplier, posted lower-than-expected first-quarter results, weighed down by delayed shipments, and said it would close one of its six distribution centers, affecting 40 jobs.

For the first quarter ended July 26, earnings fell to $35.1 million, or $1.84 a share, compared with $40.3 million, or $1.86 a share, a year earlier. Revenue fell 2 percent to $378.8 million.

Analysts on average were expecting earnings of $2 a share, before items, on revenue of $386.7 million, according to Reuters Estimates.

The company said timing delays of its shipments moved deliveries into the second quarter.

"We also experienced higher transportation costs and unexpected raw material price increases from suppliers that we were not able to immediately pass on due to fixed pricing within contract agreements and longer-lived catalogs," CEO David Vander Zanden said.

School Specialty said it would close its Lyon, New York distribution center by the end of October, a move that would affect 40 full-time associates, and that it sees a related charge of 4 cents a share in the second quarter.

The company now sees fiscal 2009 earnings from continuing operations of $2.23 to $2.39 a share, reflecting the charge, compared with its prior view of $2.27 to $2.43 a share.

The Greenville, Wisconsin-based company said it still sees 2009 revenue of $1.077 billion to $1.110 billion.

Analysts were expecting earnings of $2.32 a share, before items, on revenue of $1.085 billion.

Shares of the company fell 43 cents to $32.98 in morning trade on Nasdaq.

(Reporting by Shivani Singh in Bangalore; Editing by Deepak Kannan)