Noland Reports 30% Rise in '03 Earnings
February 23 2004 - 2:30PM
PR Newswire (US)
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/
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