LESCO Reports Record First Quarter Sales

Net sales for the first quarter of 2000 increased 19 percent to a record $98.9 million, compared with net sales of $83.1 million for the same period last year, reflecting growth in all major product categories. Year-to-date sales of consumable goods were $80.4 million, an increase of 17 percent, compared with a year ago, and sales of hard goods were $18.5 million, an increase of 27 percent, compared with a year ago. For the quarter, comparable store sales increased approximately 20 percent over the same period a year ago.

LESCO reported a loss for the first quarter of $1.2 million, compared with a loss of $1.8 million, in the same period a year ago, a 33 percent improvement. According to LESCO, due to the seasonality of its business the company typically reports a loss in the first three months of its fiscal year. The results are 42 percent better than analysts’ consensus estimates.

"We are encouraged by the significant progress at Commercial Turf Products and are optimistic that LESCO’s 2000 results will continue to show improvement throughout the year," said William A. Foley, LESCO chairman, president and CEO.

LESCO noted that positive factors for year-over-year profitability included improved sales mix, price increases and cost controls. The company also said that its quarter-over-quarter improvement was achieved while it absorbed start-up costs at its new technology fertilizer plant near Richmond, Va., and higher interest costs due to higher outstanding debt to support increased seasonal working capital needs.

Over the 12 months ended on March 31, 2000, LESCO recorded an 11.5 percent increase in sales, a 200-basis-point improvement in operating margins to 4.9 percent, a net income increase of 118 percent to $12.2 million and an EBITDA increase of 65 percent to $34.0 million.