[EXHIBIT 99.3]
[LOGO] EAGLE SUPPLY GROUP, INC.
CONTACT: INVESTOR RELATIONS COUNSEL:
Douglas P. Fields, Chairman and CEO The Equity Group Inc.
Frederick M. Friedman, Executive VP and CFO Adam Prior
Tel: 212-986-6190 Tel: 212-836-9606
Fax: 212-972-0326 Devin Sullivan
www.eaglesupplygroup.com Tel: 212-836-9608
- ------------------------ www.theequitygroup.com
----------------------
FOR IMMEDIATE RELEASE
---------------------
PRESIDENT AGREES TO $1 MILLION INVESTMENT IN EAGLE SUPPLY GROUP, INC.
- ---------------------------------------------------------------------
Two Other Senior Officers Each Agree To Accept 100,000 Shares of Eagle
- ----------------------------------------------------------------------
Common Stock in Lieu of $100,000 of Cash Compensation
-----------------------------------------------------
Company Opens New Center in Louisiana; Sells Alabama Distribution Center
- ------------------------------------------------------------------------
NEW YORK, N.Y. - February 7, 2003 -- Eagle Supply Group, Inc. ("Eagle"
or the "Company") (NASDAQ SmallCap: EEGL and EEGLW; BSE: EGL and
EGLW), one of the largest wholesale distributors of residential
roofing and masonry supplies and related products in the United
States, today announced that its President, James E. Helzer, has
agreed to invest $1,000,000 in Eagle by purchasing one million newly
issued shares of Eagle common stock. As part of the purchase, he also
will receive newly issued common stock purchase warrants to purchase
1,000,000 shares of Eagle common stock at an exercise price of $1.50
per share for five years from the date of issuance. Eagle's Chairman
and Chief Executive Officer, Douglas P. Fields, and its Executive Vice
President and Chief Financial Officer, Frederick M. Friedman, have
each agreed to accept $100,000 of their cash compensation for Eagle's
current fiscal year ending June 30, 2003 in the form of 100,000 shares
of Eagle's common stock. All of the shares of Eagle's common stock to
be issued are newly issued, unregistered shares.
Mr. Fields stated, "We are gratified that Jim Helzer has agreed to
invest $1,000,000 in Eagle at the current time. The equity funds
being provided by Jim will strengthen Eagle's balance sheet during our
current seasonally slow period. Mr. Friedman and I are also
demonstrating our confidence in Eagle's business by each agreeing to
accept 100,000 shares of Eagle common stock in lieu of cash
compensation of $100,000 each for the current fiscal year ending June
30, 2003. We believe that at current market prices the common stock
is a great investment opportunity."
Mr. Helzer stated, "I believe that, in light of current economic
conditions and the price of the common stock, I agree with Messrs.
Fields and Friedman that this is an opportune time to demonstrate my
belief in Eagle's business plan and my confidence in Eagle's future by
making this $1,000,000 investment in Eagle."
Separately, Eagle announced that it has recently opened a new
distribution center in Lafayette, Louisiana, and has sold its
Birmingham, Alabama, distribution center. Mr. Helzer stated,
"Although we have been in the Birmingham, Alabama, market for a long
time, during the last few years it has become exceedingly competitive.
We concluded that we could not obtain satisfactory profit margins in
this market, particularly in light of our current emphasis on
improving the overall profitability of our business. Based on our
internal, unaudited financial information, we believe that the sale of
this operation will improve our current annual
Eagle Supply Group, Inc. Page 2
February 7, 2003
operating income by approximately $300,000, although we will take a
one-time charge on the sale of the operation of approximately $90,000.
Eagle's historical income from continuing operations will benefit from
the elimination of the results of operations of the Birmingham
business, and this information will be reported in Eagle's quarterly
report on Form 10-Q which will be filed with the SEC in the first half
of February."
Mr. Helzer continued, "Offsetting the sale of our Birmingham operation
is the new distribution center that Eagle has established in
Lafayette, Louisiana. In addition, we are currently assessing some of
our distribution facilities in other cities with the objective of
assuring that the costs of operations of those facilities is
consistent with our levels of business in their marketplaces. We
believe that we have an opportunity to create some important cost
efficiencies in those market areas. We are, however, not planning to
sell any other distribution centers during the remainder of this
fiscal year."
Mr. Helzer added, "The anticipated improvement in Eagle's operating
results from the sale of our Birmingham business is in addition to the
previously reported cost reductions and other profit enhancements,
estimated to be at an annual rate of approximately $2,700,000, which
Eagle has been implementing since July 2002 and which are now in
place. Profit margins in a number of our market areas continue to be
under competitive pressure. As a result, we are continuing to seek to
improve our profit margins. We have a program to assess the
profitability of our customers, and, if necessary, seek price
increases on accounts which we deem are not providing a proper return
to the Company. In addition, we are working to increase our profit
margins by improving our product mix in certain market areas,
relinquishing or repricing some lower margin business, and repricing
our product lines at appropriate opportunities."
Mr. Fields summarized, stating, "It is an important objective of Eagle
to obtain visible and foreseeable, favorable quarter-over-quarter
comparisons in results of operations and earnings per share by this
summer, and we believe that the efforts and decisions that management
is making this fiscal year will enable Eagle to meet that objective."
All financial information stated in this release is unaudited unless
expressly stated otherwise.
This document includes statements that may contain forward-looking
statements within the meaning of Section 27A of the Securities Act of
1933 and Section 21E of the Securities Exchange Act of 1934, such as
statements relating to our financial condition, results of operations,
plans, objectives, future performance and business operations. These
statements relate to expectations concerning matters that are not
historical facts. Accordingly, statements that are based on
management's projections, estimates, assumptions, and judgments are
forward-looking statements. These forward-looking statements are
typically identified by words or phrases such as "believes,"
"expects," "anticipates," "plans," "estimates,"
"approximately," "intend," and other similar words and phrases, or
future or conditional verbs such as "will," "should," "would,"
"could," and "may." These forward-looking statements are based
largely on our current expectations, assumptions, estimates,
judgments, and projections about our business and our industry, and
they involve inherent risks and uncertainties. Although we believe
our expectations are based on reasonable assumptions, judgments, and
estimates, forward-looking statements involve known and unknown risks,
uncertainties, contingencies, and other factors that could cause our
or our industry's actual results, level of activity, performance or
achievement to differ materially from those discussed in or implied by
any forward-looking statements made by or on behalf of Eagle Supply
Group, Inc. and could cause our
Eagle Supply Group, Inc. Page 3
February 7, 2003
financial condition, results of operations, or cash flows to be
materially adversely affected. In evaluating these statements, some
of the factors that you should consider include the following:
* general economic and market conditions, either nationally or in
the markets where we conduct our business, may be less favorable
than expected;
* we may be unable to find suitable equity or debt financing when
needed on terms commercially reasonable to us;
* we may be unable to locate suitable facilities or personnel to
open or maintain distribution center locations;
* we may be unable to identify suitable acquisition candidates or,
if identified, unable to consummate any such acquisitions;
* there may be interruptions or cancellations of sources of supply
of products to be distributed or significant increases in the
costs of such products;
* there may be changes in the cost or pricing of, or consumer
demand for, our industry's distributed products;
* we may be unable to collect our accounts or notes receivables
when due or within a reasonable period of time after they become
due and payable;
* there may be a significant increase in competitive pressures; and
* there may be changes in accounting policies and practices, as may
be adopted by regulatory agencies as well as the Financial
Accounting Standards Board.
Please see the "Risk Factors" in Eagle's filings (including Forms 10-K
and registration statements) with the Securities and Exchange
Commission for a description of some, but not all, risks,
uncertainties and contingencies. We do not undertake any obligation
to update or revise any forward-looking statements to reflect events
or circumstances occurring after the date of this document or to
reflect the occurrence of unanticipated events.
###