Noland (NASDAQ:NOLD)
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Noland Reports First-Quarter Earnings
NEWPORT NEWS, Va., April 22 /PRNewswire-FirstCall/ -- Noland Company today
reported first-quarter net income of $2,106,000, or 63 cents per share
(diluted), 38 percent less than the year-earlier period's $3,420,000, or 97
cents per share.
The wholesale distribution firm attributed the earnings decline to first-
quarter 2003's $3,421,000 gain from the sale of property. After-tax gains from
the sale of property totaled $7,000 in the first quarter of 2004 versus
$2,122,000 in the first quarter of 2003.
Sales for the first quarter totaled $122,766,000, 11 percent greater than
first-quarter 2003's $110,163,000.
"We are very pleased with our sales performance in the first quarter," said
Chairman Lloyd U. Noland III, "especially since it was so widespread." He said
an improving economy and good weather fueled strong construction activity,
benefiting all three product categories. He said rising prices also helped
boost sales.
Plumbing sales rose 12 percent, due to a more aggressive sales effort, three
additional satellite branches and strong demand by customers buying in advance
of price increases. Air conditioning sales were up 11 percent, despite a drop
in equipment sales in Florida due to unusually mild weather, and
electrical/industrial sales rose 12 percent.
Gross profit was $2,471,000, or 10 percent, higher than the year-earlier
period's. Noland said gross margins declined slightly, reflecting intense
competition -- especially on commodity products.
Operating expenses rose by $1,122,000, or 5 percent, due to higher
personnel-related expenses stemming in part from new operations. Operating
profit declined by $1,936,000, or 36 percent, due to a $3,410,000 year-to-year
reduction in gains from the sale of property.
Interest expense rose $81,000, or 27 percent, due to higher average borrowings
to finance higher inventories and capital expenditures.
Noland said he is optimistic about the company's short-term sales prospects.
"We finished the first quarter with a very strong March, and our customer
orders for future delivery are much higher than a year ago. Assuming the
weather cooperates, we expect to continue our recent sales momentum in the
second quarter."
Noland operates 102 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.
UNAUDITED FINANCIAL HIGHLIGHTS
For the Three Months
Ended March 31 2004 2003
Merchandise Sales $122,765,791 $110,162,607
Net Income $2,106,087 $3,420,218
Basic Earnings Per Share(1) $.63 $.98
Diluted Earnings Per Share(2) $.63 $.97
(1) Based on 3,333,358 shares outstanding in 2004 and 3,485,676 shares
outstanding in 2003.
(2) Based on 3,360,230 shares outstanding in 2004 and 3,512,538 shares
outstanding in 2003.
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/