6309 Monarch Park Place, Suite 203
Niwot, CO 80503, USA
Phone (303) 443-5060
Toll free (888) 742-5060
For the fiscal 2003 third quarter, net sales were $215.6 million, an
increase of 3.3% over net sales of $208.6 million in the third quarter of fiscal 2002. Fiscal 2003 third quarter net income increased 19.1% to $13.2 million, or $0.19 per diluted share, versus net income of $11.1 million, or $0.15 per diluted share in the year ago period.
Net sales for the first nine months of fiscal 2003 rose 7.4% to
$635.9 million, compared to net sales of $592.2 million in the first nine months of last year. Net income for the nine-month period was $38.4 million, or $0.57 per diluted share, an increase of 39.8% over net income of $27.5 million, or $0.39 per diluted share a year ago.
The Company continued to enhance its financial strength during the
quarter, generating free cash flow of $33.1 million (See Note 1). As of May 31, 2003 the Company had a cash balance of $108.8 million.
"We are pleased by our third quarter performance, especially in light of the prolonged downturn that continues to affect the industrial sector," said Mitchell Jacobson, Chairman & Chief Executive Officer. "As expected, we grew revenues by over 3% and generated gross margins of 44.9%, an increase of 140 basis points over the same period last year. Our success in the third quarter
was a result of our ongoing commitment to the basic premises of our business model: maintaining superior customer service, leveraging our market leadership, growing our market share, and ensuring our strong financial position. By continuing to focus on these key initiatives, we were able to convert 42% of incremental revenues into operating income, exceeding our stated leverage goal of 25% for fiscal 2003."
Mr. Jacobson continued, "The fiscal third quarter also illustrates the benefits of our strategy to diversify into the non-manufacturing sector as a way to enhance our growth prospects while also reducing risk. While revenues from the manufacturing sector were relatively flat, reflecting the current economic environment, revenues from the non-manufacturing sector grew 14% versus a year ago. We expect to continue expanding our presence in the non-manufacturing sector, and were recently designated as an approved supplier of MRO products to the United States Postal Service."
As previously announced, the Company's Board of Directors has instituted a policy of quarterly cash dividends to shareholders. The initial quarterly dividend will be $0.05 per share. The first dividend will be payable on August 11, 2003 to shareholders of record at the close of business on July 31, 2003. The Company noted that the dividend declaration is a signal of the Board's confidence in its financial strength, ability to generate significant cash flows, and dedication to enhancing shareholder value. The dividend program will not affect the Company's ability to fund future strategic growth initiatives.
Mr. Jacobson concluded, "Despite anecdotal evidence of optimism, current statistics indicate that the industrial sector remains depressed and the overall business environment has shown few signs of improvement. As we move into the fiscal fourth quarter we expect to see the typical seasonal decline in our business, which may be further impacted by extended plant shutdowns at our customers. Offsetting this is the continued execution of our operating
strategy, which should result in higher revenues over the prior year despite current market conditions. Consequently, we expect fourth quarter 2003 revenues to be in the range of $205 million to $210 million, with earnings per diluted share in the range of $0.17 to $0.19."