EXHIBIT 99.1
[LESCO LOGO]
NEWS RELEASE
FOR IMMEDIATE RELEASE
Contact:
Jeffrey L. Rutherford
Sr. Vice President & Chief Financial Officer
LESCO, Inc.
(216) 706-9250
LESCO ANNOUNCES FOURTH QUARTER & FULL YEAR 2004
RESULTS
- EXCEEDS MOST RECENT FULL YEAR EARNINGS GUIDANCE -
- 2004 NET SALES GREW 7.2% -
- 2004 SAME STORE SALES IMPROVED 3.0% -
- FOURTH QUARTER SAME-STORE SALES INCREASED 11.2% -
CLEVELAND, Ohio -- February 24, 2005 -- LESCO, Inc. (NASDAQ: LSCO), a leading
provider of products for the professional green and pest control industries,
today announced fourth quarter and full year results for the period ending
December 31, 2004.
FULL YEAR 2004 RESULTS
Net sales for the twelve months ended December 31, 2004 increased 7.2% to $561.0
million from $523.5 million in the comparable period a year ago. Lawn Care gross
sales improved 9.5% to $425.4 million from $388.4 million in 2003, while Golf
gross sales grew 1.8% to $140.1 million from $137.6 million in 2003. Total
Service Center gross sales increased 9.5% to $384.4 million with same-store
Service Center sales increasing 3.0% to $351.6 million.
Gross profit (defined as product margin less distribution costs) increased to
24.7% of net sales, or $138.5 million, compared to 23.9% of net sales, or $125.3
million, last year. Product margin was $184.3 million, or 32.9% of net sales,
versus $173.0 million, or 33.0% of net sales, last year. The reduction in margin
rate was due largely to the Company's decision to markdown $0.8 million in
inventory resulting from a supplier contract termination. Distribution expense
declined to $45.8 million, or 8.2% of net sales, in 2004 from $47.7 million, or
9.1% of net sales, in 2003 as the Company continues to optimize its distribution
efficiencies.
"In 2004, we continued to benefit from the growth of the lawn care industry.
LESCO significantly outperformed the industry and gained incremental market
share through the opening of new Service Centers. We also experienced
improvement in Golf sales in the fourth quarter and generated growth of 1.8% for
all of 2004," stated Michael P. DiMino, President and Chief Executive Officer.
1
EXHIBIT 99.1
Selling expense in 2004 was $90.5 million, or 16.1% of net sales, versus $84.7
million, or 16.2% of net sales, in 2003. Excluding new Service Centers (i.e.,
Service Centers opened in 2003 and 2004), selling expense decreased as a
percentage of net sales by approximately 30 basis points to 15.6% from 15.9%.
Merchant discount expense increased to $10.8 million in 2004 from $3.0 million
in 2003, or 1.9% of net sales in 2004 compared to 0.6% of net sales in 2003. In
December 2003, LESCO outsourced its credit function to GE Business Credit
Services (GEBCS). The merchant discount expense for normal payment terms was
approximately $8.5 million or 1.5% of net sales, while promotional discount
expense was approximately $2.3 million or 0.4% of net sales.
The Company incurred pre-opening costs in 2004 of $0.8 million compared to $0.6
million for the same period last year. General and administrative expense in
2004 was $28.3 million, or 5.0% of net sales, compared to $29.4 million, or 5.6%
of net sales, for 2003.
In 2004, as previously disclosed, the Company incurred losses at its Sebring, FL
and Martins Ferry, OH blending facilities due to hurricane activity in Florida
and the related rainfall and flooding activity in Ohio during the third quarter.
The total damages were $1.2 million.
In November 2004, the Company completed the relocation of its corporate
headquarters from Strongsville, Ohio to downtown Cleveland. The relocation costs
during 2004 were $6.9 million. Beginning in 2005, the financial effect of the
relocation will have an approximate $1.0 million positive affect on earnings on
an annual, pre-tax basis.
In December 2004, LESCO announced that it would record estimated charges
associated with its termination of an unfavorable contract with a methylene urea
fertilizer supplier, pending a judicial determination of LESCO's liability. In
addition to the $0.8 million inventory markdown noted above, the Company
incurred charges during the fourth quarter of 2004 of $4.4 million, which
included $2.2 million of costs related to discontinuation of the contract, $1.3
million for forgiveness of a note receivable, and approximately $0.9 million of
miscellaneous costs. The Company has since secured an alternative, lower-cost
source of methylene urea fertilizer and anticipates annual, pre-tax savings of
over $2 million.
For the full year 2004, the Company reported on a generally accepted accounting
principles (GAAP) basis a loss of $0.65 per diluted share versus a loss of $0.63
per diluted share in 2003. Net loss for the twelve-month period was $5.6 million
compared to a net loss of $5.3 million for 2003. Excluding the corporate
headquarters relocation expense, hurricane and flood-related charges, and costs
associated with a supplier contract termination, and assuming a tax provision at
a 39% rate, the Company would have reported full-year 2004 adjusted net income
of $0.55 per diluted share, as reconciled in the attached financial tables.
LESCO's results on a GAAP basis do not reflect a tax provision related to the
Company's 2004 loss before income tax due to the required accounting treatment
of LESCO's deferred tax assets. Excluding the early retirement of debt, the loss
on the sale of accounts receivables and a valuation allowance for deferred tax
assets, the Company would have reported full year 2003 adjusted earnings of
$0.23 per diluted share.
2
EXHIBIT 99.1
FOURTH QUARTER 2004 RESULTS
Net sales in the fourth quarter of 2004 increased 14.2% to $124.2 million from
$108.8 million in the fourth quarter of 2003. Lawn Care gross sales improved
16.7% to $86.1 million versus $73.8 million in the year-ago period, while Golf
gross sales grew 13.6% to $40.0 million compared to $35.2 million last year.
Total Service Center sales increased 18.5% to $81.3 million from $68.6 million,
while same-store Service Center sales gained 11.2%.
Due to the seasonal nature of the green industry, LESCO has historically
recognized a loss in its fourth quarter. The Company reported a 2004 GAAP-basis
loss of $1.49 per diluted share versus a loss of $1.39 per diluted share in
2003. The loss before income tax was $13.0 million in the fourth quarter of 2004
compared to a loss before income tax of $14.4 million in the fourth quarter of
2003. Excluding the corporate headquarters relocation expense, hurricane related
costs and charges associated with a supplier contract termination, and assuming
a tax provision at a 39% rate, the Company would have reported a fourth quarter
adjusted net loss of $0.42 per diluted share, as depicted on the attached
reconciliation. Excluding the early retirement of debt, the loss on the sale of
accounts receivables and a valuation allowance for deferred tax assets, the
Company would have reported a fourth quarter 2003 adjusted loss of $0.54 per
diluted share.
OPERATING CASH FLOW AND BALANCE SHEET
On a GAAP basis, the Company's cash flow from operations was $22.9 million in
2004 and $51.9 million in 2003. When excluding the cash received from the sale
of its accounts receivable for both years, LESCO's 2004 cash flow from
operations was $16.9 million compared to a negative $5.0 million in the same
period last year. The GAAP to Non-GAAP reconciliation for cash flows is
attached. As of December 31, 2004, LESCO's total debt was $7.3 million and
consisted entirely of revolving bank debt. This compares to total debt of $21.4
million as of December 31, 2003. The Company also reported a December 31, 2004
cash and cash equivalent balance of $8.1 million versus $7.5 million at the same
time last year.
Mr. DiMino continued, "We have made substantial progress in strengthening our
balance sheet and positioning ourselves for more aggressive Service Center
expansion. Our debt level is the lowest in 20 years and our cash from operations
was nearly $17 million prior to generating additional cash from the sale of our
accounts receivable."
NEW SERVICE CENTERS
The Company opened one new Service Center during the fourth quarter in
Roseville, California for a total of 27 Service Centers in 2004. On December 31,
2004, there were 274 Service Centers in operation, versus 247 at the end of
2003. For the full year 2004, the 2004 new Service Centers generated net sales
of $13.8 million and a four-wall, pre-tax loss of $1.3 million, while the 21
Service Centers opened in 2003 reported net sales of $19.0 million and
four-wall, pre-tax income of $0.9 million.
Mr. DiMino concluded, "Our investment in new Service Centers over the past two
years has proven to be an appropriate use of capital. The 2003 class is now
accretive to our bottom line, while the 2004 class is performing at the high-end
of our expectations and should contribute to
3
EXHIBIT 99.1
our overall profitability in 2005. This record of success offers us high
expectations as we focus on expanding the national footprint of our Service
Center network."
EXPLORATION OF STRATEGIC ALTERNATIVES
As previously disclosed, LESCO has retained Western Reserve Partners LLC to
advise the Company as it explores supply chain alternatives, including the
possibility of the disposition of all or a portion of its distribution and
manufacturing assets. LESCO is currently evaluating its options to harvest the
working and fixed capital of its supply chain and redeploy the capital to fund
new Service Center growth.
FULL YEAR 2005 GUIDANCE
The Company announced preliminary guidance for 2005 of full-year revenue growth
between 7.0% to 8.0%, including a 3.0% to 4.0% increase in same-store sales. By
customer sector, Lawn Care sales are expected to increase 8.0% to 10.0% while
Golf is anticipated to be flat to down slightly. For the full year, the Company
estimates a diluted EPS range of $0.60 to $0.70.
This outlook is based upon various assumptions, which include industry trends
and internal expectations, including, but not limited to the following: 1) the
opening of up to 35 new Service Centers in 2005, 2) gross profit, including
distribution costs, of 24.7% to 25.0%, 3) selling expense continuing to increase
to approximately 17.0% of net sales due to new Service Centers, 4) merchant
discount expense of approximately 1.8% of net sales related to the outsourcing
of the Company's accounts receivable program, 5) general and administrative
expenses flat on a comparable basis, 6) average borrowings being $10.0 million
at an effective interest rate cost of approximately 7%, 7) an income tax rate of
39%, 8) no material change in the products or services offered at the Company's
locations as of December 31, 2004 or in the terms or procedures for offering
such products and services; and 9) no material adverse results from any
litigation or regulatory proceedings against the Company, either currently
existing or that may arise in the future.
CONFERENCE CALL
The Company will host a conference call and webcast with investors, analysts and
other interested parties today at 4:30 PM (Eastern). The live call can be
accessed by dialing 800-659-2056, and entering the passcode 94967652.
Management's slide presentation will be available for downloading beginning
Thursday, February 24, 2005 at 4:00 p.m. at LESCO's web site, www.lesco.com.
Participants should allow at least fifteen minutes prior to the commencement of
the call to register. The conference call will include a question and answer
session.
Additionally, a live webcast will be available to interested parties at
www.lesco.com. Participants should allow at least fifteen minutes prior to the
commencement of the call to register, download and install necessary audio
software. Questions can be submitted either in advance or during the webcast via
email to ir@lesco.com or through the Company's corporate web site where a link
will be provided on the "Home" page.
LESCO's culture demands the highest of ethical standards and accountability
manifested in full and fair financial disclosure to our shareholders. LESCO
management encourages the participation of our shareholders and other interested
parties in our conference calls and live
4
EXHIBIT 99.1
webcasts. For those who cannot participate in the conference call or the live
webcast, a replay will be available beginning approximately one hour after the
conclusion of the event on LESCO's web site.
ABOUT LESCO, INC.
LESCO serves more than 130,000 customers worldwide, through 275 LESCO Service
Centers(R), 72 LESCO Stores-on-Wheels(R), the Internet, and other direct sales
efforts, all of which are serviced by the support of eight distribution hubs.
Additional information about LESCO can be found on the Internet at
www.lesco.com.
Statements in this news release under the heading 2005 Guidance and other
statements relating to sales and earnings expectations, new Service Center
openings and profitability, 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 may cause actual
results to 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 final resolution of certain
contingencies relative to the collection of identified accounts receivable, the
Company's ability to add new Service Centers in accordance with its plans, which
can be affected by local zoning and other governmental regulations and its
ability to find favorable store locations, to negotiate favorable leases, to
hire qualified individuals to operate the Service Centers, and to integrate new
Service Centers into the Company's systems; competitive factors in the Company's
business, including pricing pressures; lack of availability or instability in
the cost of raw materials which affects the costs of certain products; the
Company's ability to consummate a transaction regarding its manufacturing and
distribution assets on acceptable conditions; the possibility that the Court
could disagree with the Company's assessment of its liability to its former
methylene urea supplier; the Company's ability to impose price increases on
customers without a significant loss in revenues; potential rate increases by
third-party carriers which affect the cost of delivery of products; changes in
existing law; the Company's ability to effectively manufacture, market and
distribute new products; the success of the Company's operating plans; any
litigation or regulatory proceedings against the Company; regional weather
conditions; and the condition of the industry and the economy. 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, 2003.
5
LESCO, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS - UNAUDITED
THREE MONTHS ENDED DECEMBER 31, 2004 THREE MONTHS ENDED DECEMBER 31, 2003
------------------------------------------ ------------------------------------------
RESULTS RESULTS
GAAP (A) INCLUDING GAAP (B) INCLUDING
(DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA) RESULTS ADJUSTMENTS ADJUSTMENTS RESULTS ADJUSTMENTS ADJUSTMENTS
----------- ------------ ------------- ----------- ------------ -----------
Net sales $ 124,152 $ $ 124,152 $ 108,758 $ $ 108,758
Cost of product (86,522) (86,522) (74,915) (74,915)
Product markdown-contract termination (799) 799 - - -
Distribution cost (9,639) (9,639) (10,525) (10,525)
----------- ----------- ----------- ----------- ----------- -----------
Gross profit on sales 27,192 799 27,991 23,318 - 23,318
Selling expense (22,144) (22,144) (21,255) (21,255)
General & administrative expense (7,380) (7,380) (7,515) (7,515)
Corporate relocation expense (1,937) 1,937 - - -
Hurricane/flood expense 107 (107) - - -
Vendor contract termination (4,404) 4,404 - - -
Merchant discounts and provision
for doubtful accounts (3,898) (3,898) (619) (619)
Early retirement of debt agreement - - (2,333) 2,333 -
Loss on sale of accounts receivable - - (4,626) 4,626 -
Pre-opening expense (107) (107) (180) (180)
Other expense (422) (422) (431) (431)
Other income 150 150 312 312
----------- ----------- ----------- ----------- ----------- -----------
Earnings (loss) before interest and taxes (12,843) 7,033 (5,810) (13,329) 6,959 (6,370)
Interest expense, net (151) (151) (1,096) (1,096)
----------- ----------- ----------- ----------- ----------- -----------
Earnings (loss) before taxes (12,994) 7,033 (5,961) (14,425) 6,959 (7,466)
Income tax (provision) benefit:
Current 2,825 2,325 5,150 1,452 424 1,876
Deferred 2,205 - 2,205 3,810 - 3,810
Change in valuation allowance (5,030) - (5,030) (2,816) - (2,816)
----------- ----------- ----------- ----------- ----------- -----------
Net income (loss) $ (12,994) $ 9,358 $ (3,636) $ (11,979) $ 7,383 $ (4,596)
=========== =========== =========== =========== =========== ===========
Earnings (loss) per share of common stock:
Diluted $ (1.49) $ 1.07 $ (0.42) $ (1.39) $ 0.85 $ (0.54)
=========== =========== =========== =========== =========== ===========
Basic $ (1.49) $ 1.07 $ (0.42) $ (1.39) $ 0.85 $ (0.54)
=========== =========== =========== =========== =========== ===========
Average number of common shares and common
share equivalents outstanding
Diluted 8,705,527 8,705,527 8,625,851 8,625,851
=========== =========== =========== ===========
Basic 8,705,527 8,705,527 8,625,851 8,625,851
=========== =========== =========== ===========
(a) 2004 adjustments include $1.9 million for corporate relocation, $(.1)
million for hurricane and flood damage, $5.2 million for a vendor
contract termination, and $2.2 million for valuation allowance of
deferred tax assets.
(b) 2003 adjustments include $2.3 million for early retirement of debt,
$4.6 million for loss on sale of accounts receivable and $.4 million
for valuation allowance of deferred tax assets.
LESCO, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS - UNAUDITED
FOR THE YEAR ENDED DECEMBER 31, 2004 FOR THE YEAR ENDED DECEMBER 31, 2003
--------------------------------------- ---------------------------------------
RESULTS RESULTS
(A) INCLUDING (B) INCLUDING
(DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA) GAAP RESULTS ADJUSTMENTS ADJUSTMENTS GAAP RESULTS ADJUSTMENTS ADJUSTMENTS
------------ ----------- ----------- ------------ ----------- -----------
Net sales $ 561,041 $ $ 561,041 $ 523,489 $ $ 523,489
Cost of product (375,896) (375,896) (350,476) (350,476)
Product markdown-contract termination (799) 799 -
Distribution cost (45,844) (45,844) (47,669) (47,669)
------------ ----------- ----------- ------------ ----------- -----------
Gross profit on sales 138,502 799 139,301 125,344 125,344
Selling expense (90,505) (90,505) (84,713) (84,713)
General & administrative expense (28,326) (28,326) (29,389) (29,389)
Corporate relocation expense (6,878) 6,878 - - -
Hurricane/flood expense (1,243) 1,243 - - -
Vendor contract termination (4,404) 4,404 - - -
Merchant discounts and provision
for doubtful accounts (10,758) (10,758) (3,045) (3,045)
Early retirement of debt - - (2,333) 2,333 -
Loss on sale of accounts receivable - - (4,626) 4,626 -
Pre-opening expense (770) (770) (601) (601)
Other expense (664) (664) (1,065) (1,065)
Other income 508 508 1,521 1,521
------------ ----------- ----------- ------------ ----------- -----------
Earnings (loss) before interest and taxes (4,538) 13,324 8,786 1,093 6,959 8,052
Interest expense, net (747) (747) (4,730) (4,730)
------------ ----------- ----------- ------------ ----------- -----------
Earnings (loss) before taxes (5,285) 13,324 8,039 (3,637) 6,959 3,322
Income tax (provision) benefit: -
Current (340) (2,795) (3,135) 1,452 424 1,876
Deferred 2,363 - 2,363 (270) - (270)
Change in valuation allowance (2,363) - (2,363) (2,816) - (2,816)
------------ ----------- ----------- ------------ ----------- -----------
Net income (loss) $ (5,625) $ 10,529 $ 4,904 $ (5,271) $ 7,383 $ 2,112
============ =========== =========== ============ =========== ===========
Earnings (loss) per share of common stock:
Diluted $ (0.65) $ 1.20 $ 0.55 $ (0.63) $ 0.86 $ 0.23
============ =========== =========== ============ =========== ===========
Basic $ (0.65) $ 1.21 $ 0.56 $ (0.63) $ 0.86 $ 0.23
============ =========== =========== ============ =========== ===========
Average number of common shares and common
share equivalents outstanding
Diluted 8,696,356 8,943,205 8,550,414 8,689,983
============ =========== ============ ===========
Basic 8,696,356 8,696,356 8,550,414 8,550,414
============ =========== ============ ===========
(a) 2004 adjustments include $6.9 million for corporate relocation, $1.2
million for hurricane and flood damage, $5.2 million for a vendor
contract termination, and $2.8 million for estimated tax provision at
39% rate.
(b) 2003 adjustments include $2.3 million for early retirement of debt,
$4.6 million for loss on sale of accounts receivable and $.4 million
for valuation allowance of deferred tax assets.
LESCO, INC.
CONSOLIDATED BALANCE SHEETS
December 31,
(DOLLARS IN THOUSANDS) 2004 2003
--------- ---------
CURRENT ASSETS:
Cash and cash equivalents $ 8,101 $ 7,505
Accounts receivable 16,931 19,278
Inventories 100,582 93,580
Other 3,126 6,980
--------- ---------
TOTAL CURRENT ASSETS 128,740 127,343
Property, plant and equipment, net 26,019 31,481
Other 1,234 2,541
--------- ---------
$ 155,993 $ 161,365
========= =========
CURRENT LIABILITIES:
Accounts payable $ 56,371 $ 53,082
Accrued liabilities 24,184 15,418
Revolving credit facility 7,303 15,513
Current portion of debt -- 28
--------- ---------
TOTAL CURRENT LIABILITIES 87,858 84,041
Long-term debt -- 5,875
Deferred - other 1,612 179
SHAREHOLDERS' EQUITY:
Common shares--without par value--
19,500,000 shares authorized; 8,674,194 shares issued and
outstanding at December 31, 2004; 8,668,914 shares issued and
outstanding at December 31, 2003 870 867
Paid-in capital 34,846 34,619
Retained earnings 31,637 37,262
Unearned compensation (830) (1,478)
--------- ---------
TOTAL SHAREHOLDERS' EQUITY 66,523 71,270
--------- ---------
$ 155,993 $ 161,365
========= =========
EXHIBIT 99.1
LESCO, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE YEAR ENDED DECEMBER 31,
(DOLLARS IN THOUSANDS) 2004 2003
----------- -----------
OPERATING ACTIVITIES:
Net loss $ (5,625) $ (5,271)
Adjustments to reconcile net loss to net cash provided by operating activities:
Depreciation 7,289 7,724
Amortization of deferred financing fees and other 168 1,043
Inventory markdown 799 --
Early retirement of debt expense -- 2,333
Loss from sale of credit portfolio -- 4,626
Loss on sale/disposal of fixed assets 658 313
Deferred income taxes -- 2,351
Increase in accounts receivable (3,599) (14,353)
Sale of accounts receivable 5,946 56,881
Provision for uncollectible accounts receivable -- 2,140
Increase in inventories (7,801) (6,743)
Increase in accounts payable 9,202 4,763
Amortization of unearned compensation 607 87
Decrease (increase) in current income tax 3,961 (669)
Increase (decrease) in other items 11,269 (3,335)
----------- -----------
NET CASH PROVIDED BY OPERATING ACTIVITIES 22,874 51,890
INVESTING ACTIVITIES:
Proceeds on the sale of fixed assets 1,822 --
Purchase of property, plant and equipment (4,345) (5,580)
----------- -----------
NET CASH USED IN INVESTING ACTIVITIES (2,523) (5,580)
FINANCING ACTIVITIES:
(Decrease) increase in overdraft balances (5,913) 9,866
Proceeds from borrowings 647,187 604,183
Reduction of borrowings (661,300) (651,194)
Exercised stock options, net of treasury shares 271 23
Deferred financing fees -- (416)
Payment to terminate interest rate swap -- (1,248)
Repurchase of preferred stock -- (1,739)
----------- -----------
NET CASH USED IN FINANCING ACTIVITIES (19,755) (40,525)
----------- -----------
Net change in cash and cash equivalents 596 5,785
Cash and cash equivalents - Beginning of the period 7,505 1,720
----------- -----------
CASH AND CASH EQUIVALENTS - END OF THE PERIOD $ 8,101 $ 7,505
=========== ===========
Supplemental disclosure of cash flow information:
Interest paid, including letters of credit and unused facility fees $ 776 $ 5,579
=========== ===========
Income taxes refunded $ (3,575) $ (68)
=========== ===========
GAAP TO NON-GAAP CASH FLOWS RECONCILIATION - UNAUDITED
FOR THE YEAR ENDED DECEMBER 31,
(Dollars in thousands) 2004 2003
----------- -----------
CASH PROVIDED BY OPERATING ACTIVITIES - GAAP $ 22,874 $ 51,890
Less: Cash received for sale of accounts receivable (5,946) (56,881)
----------- -----------
ADJUSTED CASH PROVIDED BY (USED IN) OPERATING ACTIVITIES - NON-GAAP $ 16,928 $ (4,991)
=========== ===========
9
EXHIBIT 99.1
LESCO, INC
SALES BY CUSTOMER SECTOR AND TRANSACTING LOCATION
FOR THE YEAR ENDED DECEMBER 31,
------------------------------------------------------
2004
------------------------------------------------------
OTHER
SERVICE SELLING
(DOLLARS IN MILLIONS) CENTERS LOCATIONS TOTAL
----------- -------------- ------------
Lawn care $ 349.9 $ 75.5 $ 425.4
Golf 34.5 105.6 140.1
------------ -------------- ------------
Gross sales $ 384.4 $ 181.1 565.5
============ ==============
Agency sales (2.1)
Freight revenue 1.4
Customer discounts and rebates (3.8)
------------
Net sales $ 561.0
============
FOR THE YEAR ENDED DECEMBER 31,
------------------------------------------------------
2003
------------------------------------------------------
OTHER
SERVICE SELLING
(DOLLARS IN MILLIONS) CENTERS LOCATIONS TOTAL
----------- -------------- ------------
Lawn care $ 322.1 $ 66.3 $ 388.4
Golf 29.1 108.5 137.6
----------- ------------- -------------
Gross sales $ 351.2 $ 174.8 526.0
=========== =============
Agency sales -
Freight revenue 1.5
Customer discounts and rebates (4.0)
-------------
Net sales $ 523.5
=============
FOR THE YEAR ENDED DECEMBER 31,
------------------------------------------------------
% CHANGE
------------------------------------------------------
OTHER
SERVICE SELLING
(DOLLARS IN MILLIONS) CENTERS LOCATIONS TOTAL
----------- -------------- ------------
Lawn care 8.6% 13.9% 9.5%
Golf 18.6 (2.7) 1.8
------------------------------------------------------
Gross sales 9.5% 3.6% 7.5
==============================
Agency sales -
Freight revenue (6.7)
Customer discounts and rebates (5.0)
-----------
Net sales 7.2%
===========
FOR THE THREE MONTHS ENDED DECEMBER 31,
------------------------------------------------------
2004
------------------------------------------------------
OTHER
SERVICE SELLING
(DOLLARS IN MILLIONS) CENTERS LOCATIONS TOTAL
----------- -------------- ------------
Lawn care $ 73.5 $ 12.6 $ 86.1
Golf 7.8 32.2 40.0
------------ ------------- -----------
Gross sales $ 81.3 $ 44.8 126.1
============ =============
Agency sales (1.1)
Freight revenue 0.2
Customer discounts and rebates (1.0)
-----------
Net sales $ 124.2
===========
FOR THE THREE MONTHS ENDED DECEMBER 31,
------------------------------------------------------
2003
------------------------------------------------------
OTHER
SERVICE SELLING
(DOLLARS IN MILLIONS) CENTERS LOCATIONS TOTAL
----------- -------------- ------------
Lawn care $ 62.4 $ 11.4 $ 73.8
Golf 6.2 29.0 35.2
----------- ------------ ----------
Gross sales $ 68.6 $ 40.4 109.0
=========== ============
Agency sales -
Freight revenue 0.3
Customer discounts and rebates (0.5)
Net sales ----------
$ 108.8
==========
FOR THE THREE MONTHS ENDED DECEMBER 31,
------------------------------------------------------
% CHANGE
------------------------------------------------------
OTHER
SERVICE SELLING
(DOLLARS IN MILLIONS) CENTERS LOCATIONS TOTAL
----------- -------------- ------------
Lawn care 17.8% 10.5% 16.7%
Golf 25.8 11.0 13.6
-------------------------------------
Gross sales 18.5% 10.9% 15.7
=====================================
Agency sales -
Freight revenue (33.3)
Customer discounts and rebates 100.0
---------
Net sales 14.2%
=========
EXHIBIT 99.1
LESCO, INC.
NEW SERVICE CENTERS FOUR-WALL PRE-TAX OPERATING RESULTS
FOR THE YEARS ENDED DECEMBER 31,
-----------------------------------------------------------------------------
2004 2003
----------------------------------------------------------- --------------
(DOLLARS IN THOUSANDS) CLASS OF 2004 CLASS OF 2003 CLASS OF 2003
(27 STORES) (21 STORES) TOTAL (21 STORES)
------------- ------------- -------- --------------
Sales $ 13,834 $ 18,990 $ 32,824 $ 9,827
Cost of product (9,369) (13,035) (22,404) (6,799)
Distribution cost (830) (809) (1,639) (441)
-------- -------- -------- --------
Gross profit on sales 3,635 5,146 8,781 2,587
Selling expense (3,969) (3,990) (7,959) (2,795)
Pre-opening expense (770) -- (770) (600)
Merchant discount expense (190) (264) (454) (26)
-------- -------- -------- --------
Earnings before interest
and taxes $ (1,294) $ 892 $ (402) $ (834)
======== ======== ======== ========
FOR THE THREE MONTHS ENDED DECEMBER 31,
---------------------------------------------------------------------
2004 2003
---------------------------------------------------- -------------
(DOLLARS IN THOUSANDS) CLASS OF 2004 CLASS OF 2003 CLASS OF 2003
(27 STORES) (21 STORES) TOTAL (21 STORES)
------------- ------------- ------- -------------
Sales $ 3,930 $ 4,130 $ 8,060 $ 2,693
Cost of product (2,689) (2,936) (5,625) (1,885)
Distribution cost (262) (211) (473) (113)
------- ------- ------- -------
Gross profit on sales 979 983 1,962 695
Selling expense (1,388) (991) (2,379) (934)
Pre-opening expense (107) -- (107) (180)
Merchant discount expense (57) (62) (119) (7)
------- ------- ------- -------
Earnings before interest
and taxes $ (573) $ (70) $ (643) $ (426)
======= ======= ======= =======
11