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 NEWPORT NEWS, Va., Oct. 15 /PRNewswire/ -- Noland Company (NASDAQ-NMS: NOLD) today reported third quarter net income of $1,176,000, or 32 cents per share, equaling last year's third quarter earnings of $1,188,000, or 32 cents.
 These latest results lifted the wholesale distribution firm out of its earlier net-loss position on a year-to-date basis. Through the first six months of 1993, Noland had a net loss of $544,000, or 15 cents per share. Now, through nine months, net income totals $633,000, or 17 cents per share, compared to $2,047,000, or 55 cents per share, in the first nine months of 1992.
 As previously reported, Noland's sales for the third quarter (ending Sept. 30) were $108,997,000, slightly less than the $109,685,000 recorded in 1992's third quarter. For the full nine months, sales were $302,449,000, 3.1 percent less than the year-earlier period's $312,019,000.
 Chairman Lloyd U. Noland III said third quarter sales were disappointing, in light of moderately improving market conditions. "Housing construction is expanding in most of our markets, although at a lackluster pace; and factory production is on the rise. The increased demand in these two key markets gave us at least some measure of opportunity to expand sales, but we didn't fully capitalize on it."
 At the same time, he said, the company continued to focus attention on improving profit margins and better managing its trading assets. "By all measurements, we have made significant progress in these important areas of our business, but this intensive effort may have distracted us from pursuing our main mission; namely, to achieve sales growth."
 He said the company is aggressively working toward identifying and remedying sales problems in a number of ways, including providing extensive sales training and appointing several new branch managers.
 Noland said the company's overall gross margin of profit on sales continued to improve, and operating expenses were held to a modest 2.6 percent increase over the year-earlier period. "However, this combination of slightly higher margins on essentially the same sales, coupled with higher expenses, produced an operating profit of $1,138,000, 7.6 percent less than a year ago."
 Third quarter interest expense declined by 20.5 percent, reflecting lower investments in accounts receivable and inventory, along with lower interest rates. As of Sept. 30, the company had reduced its investments in accounts receivable and inventory by a combined total of $14.6 million, or 10 percent, from the year-earlier date.
 "This is one of our truly bright spots in this third quarter report," Noland said. "Our long-running, back-to-basics approach to managing our trading assets is beginning to pay huge dividends." He added that total borrowings as of Sept. 30 were $14,314,000 less than those of the year-earlier date.
 Noland said the company's economists are generally optimistic about prospects for steadily improving business conditions. "However, it all depends on whether consumers, who have shown they can be fickle during this prolonged recovery, continue to gain confidence in the economy. But regardless of economic conditions, our biggest challenge now is to get our share of the available profitable business that's out there."
 Noland operates 92 branches in 13 southeastern states. The company distributes products in the plumbing, heating, electrical, air conditioning, refrigeration and industrial fields, as well as domestic water systems. The company's stock is traded over the counter as part of NASDAQ's National Market System. Its trading symbol is NOLD.
 Financial Highlights
 For the three months ended
 Sept. 30,
 1993(A) 1992
 Merchandise Sales $108,996,610 $109,685,140
 Net Income $ 1,176,449(B) $ 1,187,650
 Earnings Per Share(C) $0.32(B) $0.32
 For the nine months ended
 Sept. 30,
 1993(A) 1992
 Merchandise Sales $302,449,406 $312,019,008
 Net Income $ 632,738(B) $ 2,047,134
 Earnings Per Share(C) $0.17(B) $0.55
 (A) 1993 results have not been audited and are subject to year-end adjustments.
 (B) Adoption of accounting change regarding reporting of certain postretirement benefits as required by SFAS No. 106 had the effect of reducing net income in the third quarter of 1993 by $84,000, or 2 cents per share, and in the first nine months by $256,000, or 7 cents per share.
 (C) Based on 3,700,876 shares outstanding in both 1993 and 1992.
 -0- 10/15/93
 /CONTACT: John E. Gullett of Noland Company, 804-928-9000/

CO: Noland Company ST: Virginia IN: CST SU: ERN

IH-KD -- DC010 -- 2794 10/15/93 14:02 EDT
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Publication:PR Newswire
Date:Oct 15, 1993

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