Noland 2002 sales rise 2%

Chairman Lloyd U. Noland III said higher sales in the wholesale distribution firm's core businesses of plumbing and air conditioning, combined with tightly controlled operating expenses and gains from the sale of property, led to the improved earnings picture.

'Our plumbing operations took full advantage of a strong residential construction market and severe drought conditions in many parts of our 13- state territory,' said Noland, 'boosting plumbing sales by 3.2%. In addition, the long, hot summer, coupled with the continued expansion of our air conditioning operations in Florida, resulted in a 10.9% rise in air conditioning sales.'

Offsetting much of these gains was a 13.1% decline in electrical/industrial sales, due to a combination of sluggish manufacturing activity and a shift away from the integrated supply business. 'We cancelled several unprofitable integrated supply accounts in 2002,' said Noland, 'as we moved to eliminate these as a source of future profit drains.'

Overall, full-year 2002 company sales totaled $488,715,000, or 2% more than 2001's $477,911,000.

The company's gross profit was 4% higher than the prior year due to the combination of higher sales and slightly higher gross margins.

Operating expenses rose by $1,823,000, or 2%, in part due to a decline in non-cash pension credits and increases in casualty insurance, additional bad debts, and personnel-related costs. 'From an operations standpoint, we continued to hold down the cost of doing business through aggressive expense-control measures we implemented in the second half of 2001,' said Noland.

The sale of surplus property produced a $1,192,000 pre-tax gain. Excluding gains from the sale of property in both years, 2002 operating profit rose 26% over 2001.

Noland said lower interest rates and reduced borrowings resulted in a $569,000, or 33 percent, drop in interest expense. 'Borrowings were down, in part, because of lower average inventory investments,' said Noland. 'We continued to improve the management of our inventories last year, achieving the highest inventory turns in 20 years.'

Fourth-quarter 2002 sales totaled $117,191,000, or 3.6% greater than the year-earlier period's $113,173,000. Net income totaled $3,586,000, 36 % more than the $2,630,000, for the fourth quarter of 2001.

Noland said the uncertain economy, coupled with rising unemployment and concerns about a potential war in Iraq, make it difficult to predict market conditions in 2003. 'But we enjoyed a very solid year in 2002,' said Noland, 'and we are confident that the fundamental improvements we have made in our business in recent years will allow us to compete effectively for the available business.'

Noland operates 98 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 National Market System. Its trading symbol is NOLD.