Exhibit 99.1
[LESCO logo]
NEWS RELEASE
FOR IMMEDIATE RELEASE Contact:
Jeffrey L. Rutherford
Sr. Vice President & Chief Financial Officer
LESCO, Inc.
(440) 783-9250
o LESCO ANNOUNCES INITIATIVES TO RESTRUCTURE DEBT AND IMPROVE BALANCE
SHEET
o RAISES 2003 GUIDANCE, EXCLUDING ANY CHARGES FROM ANNOUNCED INITIATIVES
CLEVELAND, Ohio - December 16, 2003 - LESCO, Inc. (NASDAQ: LSCO), the leading
specialty provider of products for the professional green and pest control
industries, today announced a strategy to restructure debt and strengthen the
Company's balance sheet through a number of initiatives that it expects will
close by the end of the first quarter of 2004, including:
o The sale of its receivables portfolio to GE Business Credit Services
(GEBCS) and outsourcing of its private label credit program.
o Refinancing of its revolving credit facility.
o Buy-out of its interest rate swap agreement.
o Buy-back of its outstanding preferred stock.
Under the terms of its agreements with GEBCS, the Company will sell its existing
accounts receivables portfolio to GEBCS for approximately $55 million and will
outsource its private label credit program through the GE platform. The Company
expects the transaction, which is subject to certain closing conditions, to
close by the end of the first quarter of 2004. All proceeds will be utilized to
reduce outstanding debt. Management expects to incur a one-time charge of $2.0
to $3.0 million in connection with the agreement either in the fourth quarter of
2003 or the first quarter of 2004.
In addition to the GEBCS agreements, the Company has engaged PNC Bank, National
Association to arrange a three-year $50.0 million Senior Secured facility to
replace LESCO's existing bank loan facility. A charge of approximately $1.1
million is expected to be recorded to write-off the deferred financing costs of
the existing credit facility either in the fourth quarter of 2003 or the first
quarter of 2004.
LESCO intends to buy-out and terminate its current interest rate swap agreement
for approximately $1.3 million and buy-back its outstanding preferred stock for
approximately $1.7 million. The swap buy-out is expected to close concurrently
with the new credit facility and a one-time charge of approximately $1.3
million is expected to be taken either in the fourth quarter of 2003 or the
first quarter of 2004. No charge will be necessary for the preferred stock
buy-back.
Michael P. DiMino, president and chief executive officer of LESCO, commented,
"We are excited by our new agreements with GEBCS and PNC. In combination, these
agreements will allow us to reduce debt by over $50 million and increase our
financial flexibility, which is critical for long-term growth. Once complete,
these transactions will also drive cost savings and operational improvements
over time, but even more importantly, will allow us to open new Service Centers
without incurring the additional working capital necessary to finance our own
accounts receivable portfolio. It's a win-win for everyone involved."
LESCO INCREASES 2003 GUIDANCE
Additionally, LESCO announced today, that earnings per share for the year ended
December 31, 2003 will likely range from $0.20 to $0.25 per diluted share before
any charges related to the GE transaction, swap buyout or the revolving credit
refinancing. This is an increase from the previously announced guidance of $0.15
to $0.20 per diluted share.
Mr. DiMino concluded, "We are certainly pleased to increase our guidance for
2003. Continued comparable Service Center growth and our ability to maintain
gross margin amid rising raw material costs, combined with operational
improvements and financial discipline, have resulted in a more efficient and
profitable operation. Furthermore, we expect many of today's announced
initiatives will have a positive effect in 2004 and beyond."
The Company expects to announce its financial results for the fourth quarter and
fiscal 2003 on or about February 23, 2004.
ABOUT GE BUSINESS CREDIT SERVICES
GEBCS based in Jacksonville, Florida, is the commercial unit of GE Consumer
Finance. The company provides business-to-business trade receivables management
solutions, including private label credit programs, account receivable financing
and inventory financing for national and regional clients. More information can
be found online at www.gebcs.com.
ABOUT LESCO, INC.
As of December 15, 2003, LESCO distributes product through nine hubs and serves
more than 130,000 customers worldwide, through 247 LESCO Service Centers(R), 72
LESCO Stores-on-Wheels(R), and other direct sales efforts. Sales in 2002 totaled
$511.7 million. Additional information about LESCO can be found on the Internet
at www.lesco.com.
Statements in this news release relating to the expected reduction in the
Company's debt and improvement in its balance sheet, the expected completion of
the sale of the Company's accounts receivables portfolio to GEBCS, the expected
completion of the refinancing of the Company's revolving credit facility, the
Company's buy-back of its outstanding preferred stock, earnings expectations and
other statements that are not historical information are forward-looking
statements and, as such, reflect only the Company's best assessment at this
time. Investors are cautioned that forward-looking statements involve risks and
uncertainties, that actual results may differ materially from such statements
and that investors should not place undue reliance on such statements. Factors
that may cause actual results to differ materially from those projected or
implied in the forward-looking statements include, but are not limited to, the
satisfaction of certain closing conditions to the GEBCS transaction, including
obtaining
third party consents, the successful negotiation of a definitive agreement with
PNC and the successful syndication of the new credit facility, the satisfaction
of closing conditions to the new credit facility, including obtaining third
party consents or waivers, and the approval from the Company's preferred
shareholders of the Company's buy-back of the outstanding preferred stock. For a
further discussion of risk factors, investors should refer to the Company's
Securities and Exchange Commission reports, including but not limited to, Form
10-K for the year ended December 31, 2002.