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Net earnings for the first quarter were $14.0 million compared to $5.3 million the previous year. First quarter 2003 results include an after-tax gain of $10.1 million from the sale of the company's Electromagnetics Development Center (EDC) in January. Net sales for the first quarter were $216.0 million, compared to $223.1 million in the 2002 quarter.
Paul R. Kuhn, chairman, president and CEO, said, "While continuing economic uncertainty, war concerns, and rising energy costs impacted all of our businesses to varying degrees during the first quarter, as discussed below, I believe our practice of conservative financial management and the application of lean-thinking principles throughout the company have helped us weather these circumstances. We have taken advantage of this period of economic uncertainty by selectively acquiring businesses over the past 18 months that are already contributing and will increasingly help each of our segments as the economy eventually improves. We also divested two non-core elements of the business, including EDC, that were no longer considered strategic assets."
REPORT BY SEGMENT
First quarter operating profits for the Industrial Distribution segment were $2.8 million, compared to $2.6 million in the 2002 period. Sales were $120.3 million in the first quarter, including $1.3 million from an acquisition made in March 2002, compared to $117.4 million a year ago.
Kuhn said, "The Industrial Distribution segment's quarterly performance was consistent with our expectations. The broad sectors of American industry served by the segment continued to be affected by the uncertain economic environment, and that has held customer spending down in the quarter."
Pricing pressures continue to reflect the highly competitive nature of this business. The industry's practice of providing vendor incentives continues to be an important contributor to the segment's operating profits.
"For the company overall," Kuhn concluded, "the business climate has not improved as many had hoped, and we now have the additional factor of the nation's response to the war and its effects to consider. While we will continue to operate conservatively, which is our tradition, we will also aggressively seek out business opportunities in the form of new programs and selective acquisitions."