Noland's Q3 Earnings Lower; Sales Remain Strong
October 22 2004 - 3:00PM
PR Newswire (US)
Noland's Q3 Earnings Lower; Sales Remain Strong NEWPORT NEWS, Va.,
Oct. 22 /PRNewswire-FirstCall/ -- Noland Company (NASDAQ:NOLD)
today reported third-quarter net income of $1,941,000, or 57 cents
per share (diluted), 41 percent less than the year-earlier period's
$3,265,000, or 97 cents per share. Third-quarter sales rose 15
percent, from $121,771,000 in the third quarter of 2003 to
$140,260,000. The wholesale distribution firm attributed the
earnings decline to lower gross profit margins, higher operating
expenses and a $587,000 decline in the gains from the disposal of
surplus real property compared to the year-earlier period. Chairman
Lloyd U. Noland III said the hurricanes and related bad weather in
August and September disrupted business for days in several
southern markets. "Air conditioning sales in Florida were
especially hard hit," he said. "But the inroads we are making with
HVAC dealers in other parts of our territory allowed us to continue
our growth with an 11 percent increase in air conditioning sales
for the quarter." He said continued strength in the construction
market and rising prices helped the company's plumbing operations
to an 18 percent improvement in third-quarter sales.
Electrical/industrial, which also benefited from strong
construction levels, reported a 15 percent increase in
third-quarter sales. Gross profit for the quarter rose a modest 4
percent, or $1,057,000, over the year-earlier period, as gross
profit margins declined, in part, due to costs associated with the
LIFO method of accounting. Noland said the lower margins also
reflected higher freight costs and the company's pursuit of
lower-profit commodity sales. Operating expenses rose by
$2,184,000, or 9 percent, primarily due to higher personnel-related
expenses stemming from the company's new central distribution
center and five new branches opened since the summer of 2003. The
higher operating expenses, combined with gains from the disposal of
surplus real property totaling $85,000 versus $672,000 in the
year-earlier period, led to an operating profit total of
$3,405,000, which was $1,782,000, or 34 percent, less than the
year-earlier period. Through the first nine months, Noland's sales
totaled $408,657,000, 15 percent greater than the $354,466,000
total in the first nine months of 2003. Net income was $11,783,000,
or $3.50 per share (diluted), 28 percent more than the $9,190,000,
or $2.67, for the year-earlier period. After-tax gains from the
disposal of surplus real property totaled $5,817,000 in the first
nine months of 2004 versus $2,803,000 in the year-earlier period.
Noland said customer orders for future delivery as of Sept. 30 were
15 percent higher than a year ago, "reflecting a continued bright
outlook for construction activity for the remainder of the year. We
believe we are still on track to turn in a solid performance in
2004, on top of our record earnings year in 2003." 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.
UNAUDITED FINANCIAL HIGHLIGHTS For the Three Months Ended September
30 2004 2003 Merchandise Sales $140,260,444 $121,771,477 Net Income
$1,941,435 $3,265,416 Basic Earnings Per Share(1) $.58 $.98 Diluted
Earnings Per Share(2) $.57 $.97 For the Nine Months Ended September
30 2004 2003 Merchandise Sales $408,656,948 $354,466,120 Net Income
$11,782,569 $9,189,905 Basic Earnings Per Share(3) $3.53 $2.69
Diluted Earnings Per Share(4) $3.50 $2.67 (1) Based on 3,340,672
shares outstanding in 2004 and 3,329,515 shares outstanding in
2003. (2) Based on 3,377,478 shares outstanding in 2004 and
3,365,328 shares outstanding in 2003. (3) Based on 3,337,459 shares
outstanding in 2004 and 3,412,619 shares outstanding in 2003. (4)
Based on 3,370,010 shares outstanding in 2004 and 3,443,630 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/
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