LESCO Sees 3Q Boost, Sells Venture

CLEVELAND, Ohio – While posting improved third-quarter earnings, LESCO Inc. has announced plans to sell its sizable investment in a joint venture.

The green industry provider’s net sales for the quarter increased 2.6 percent to $147.7 million from $144.0 million in last year’s equivalent quarter.

Lawn Care sales increased to $105.2 million, up 6.3 percent from 2002 ($99 million). Comparable Service Center sales increased 6.4 percent and new Service Centers generated $3.7 million in sales. These increases were offset by decreases in Lawn Care direct sales and national accounts. Year to date, the LESCO has opened 20 new service centers and closed one. The company ended the quarter with 246 service centers and plans to open one more in Las Vegas in mid-November.

“The trend we experienced in the first half of 2003 has continued in the third quarter,” stated Michael P. DiMino, president and chief executive officer. “The Lawn Care industry is growing and we are capturing incremental market share through our existing and new stores … This experience, most notably the promising trends of our new service centers, confirms our strategy of investing capital in Lawn Care while continuing to explore ways to improve the operations of our golf business.”

Gross profit increased for the quarter to $50.6 million from $48.6 million in 2002. As a percentage of sales, gross profit increased 47 basis points to 34.25 percent from 33.78 percent.

LESCO also announced that is has reached a definitive agreement to sell its investment in Commercial Turf Products, Ltd. to the other principal CTP investor, MTD Consumer Group Inc. LESCO will sell its investment for a $935,000 promissory note and a release from its 50-percent guarantee of certain CTP liabilities. The transaction is subject to customary conditions and is expected to close by mid-November. There will be an immaterial gain on the sale.

LESCO has also entered into a new five-year supply agreement with MTD and CTP to source certain equipment under terms and pricing similar to its historical relationship with CTP.