Noland (NASDAQ:NOLD)
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Noland Reports 30% Rise in '03 Earnings
NEWPORT NEWS, Va., Feb. 23 /PRNewswire-FirstCall/ -- Noland Company today
reported 2003 net income of $12,442,000, or $3.64 per share (diluted), 30
percent more than 2002's $9,561,000, or $2.70 per share.
The Newport News-based wholesale distribution firm said the earnings improvement
stemmed largely from higher profit margins, tightly controlled operating
expenses and gains on the sale of property.
Sales for the year were down 3 percent, from $485,663,000 in 2002 to
$471,757,000 in 2003.
"Our air conditioning sales rose 10 percent," said Chairman Lloyd U. Noland III,
"reflecting our continued success in growing that major part of our business."
He said a weakness in commercial construction, coupled with record rainfall in
most of Noland's territory that delayed numerous construction projects during
the year, reduced demand for the company's plumbing equipment and supplies. As
a result, plumbing sales declined by 5 percent.
He added that the company's electrical/industrial operations, which were
downsized in 2002 by the cancellation of several unprofitable integrated supply
accounts, had 20 percent lower sales than the year before.
Despite an overall decline in sales, higher gross profit margins led to a
$2,596,000 increase in the company's gross profit in 2003, "indicating success
with our focus on improving the profitability of our sales," said Noland.
Operating expenses were up $1,311,000, or 1 percent, primarily because of a $1.7
millionincrease in non-cash pension charges. Operating profit improved by
$4,346,000, or 30 percent. Gains from the sale of property were $4,252,000,
$3,061,000 more than 2002's gains of $1,191,000. Excluding the non-cash pension
charges and gains from thesale of property in both years, 2003 operating profit
rose 25 percent.
Interest expense rose $162,000, or 14 percent, due to higher average borrowings
to finance higher inventories and a $16 million increase in capital
expenditures.
In the fourth quarter, sales totaled $117,290,000, 1 percent more than the
year-earlier period's $116,391,000. Net income totaled $3,252,000, or 97 cents
per share (diluted), 9 percent less than the $3,586,000, or $1.02 per share, for
the fourth quarter of 2002.
Noland said housing construction activity should remain at healthy levels in
2004, while commercial construction is expected to gain strength later in the
year. "Against this backdrop," he said, "there should be ample opportunities
for us to improve on lastyear's disappointing sales performance."
Noland operates 101 branches in 13 states, and distributes products in the
plumbing, HVAC, water systems, electrical, and industrial fields. The company's
stock is traded on NASDAQ's SmallCap Market. Its trading symbol is NOLD.
UNAUDITED FINANCIAL HIGHLIGHTS
For the Three Months
Ended December 31 2003 2002
Merchandise Sales(1) $117,290,391 $116,390,867
Net Income $3,251,785 $3,586,085
Basic Earnings Per Share(2) $.98 $1.03
Diluted Earnings Per Share(3) $.97 $1.02
For the Twelve Months
Ended December 31 2003 2002
Merchandise Sales(1) $471,756,511 $485,663,120
Net Income(4) $12,441,690 $9,561,260
Basic Earnings Per Share(5) $3.67 $2.72
Diluted Earnings Per Share(6) $3.64 $2.70
(1) Beginning in the first quarter of 2003, the company classified cash
discounts allowed on customer payments as a reduction of sales. Prior
to that, these amounts were included in other income. Accordingly,
merchandise sales for the three months and twelve months ended
December 31, 2002, reflect this reclassification.
(2) Based on 3,331,964 shares outstanding in 2003 and 3,487,334 shares
outstanding in 2002.
(3) Based on 3,363,641 shares outstanding in 2003 and 3,521,232 shares
outstanding in 2002.
(4) Net income was impacted by gains from the sale of property in 2003 by
$2,641,000 and in 2002 by $740,000.
(5) Based on 3,392,924 shares outstanding in 2003 and 3,509,554 shares
outstanding in 2002.
(6) Based on 3,422,390 shares outstanding in 2003 and 3,541,362 shares
outstanding in 2002.
Note: Included in this news release are forward-looking management comments and
other statements which reflect management's current outlook for the future.
Such forward-looking statements are not guarantees of future performance and are
subject to risks and uncertainties that could cause actual results to differ
materially from those anticipated in the statements. Such risks and
uncertainties include, but are not limited to, general business and economic
conditions, climatic conditions, competitive pricing pressures, and product
availability.
DATASOURCE:Noland Company
CONTACT: John E. Gullett of Noland Company, +1-757-928-9000
Web site: http://www.noland.com/