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NOLAND REPORTS EARNINGS

 NEWPORT NEWS, Va., April 19 /PRNewswire/ -- Citing unusually wet, wintry weather that disrupted the economic recovery and led to an unexpected sales slump, Noland Company (NASDAQ-NMS: NOLD) today reported a first quarter 1993 net loss of $976,000, or 26 cents per share. In the year-earlier period, Noland had net income of $205,000, or 6 cents per share.
 The wholesale distribution firm said sales for the first quarter totaled $88,303,000, 7.1 percent less than first-quarter 1992's $95,100,000.
 "It was one of the wettest first quarters on record," said Chairman Lloyd U. Noland III, "and virtually all types of construction were adversely affected. This, in turn, reduced demand for our products and services at a time when we had structured our expenses for improving market conditions."
 Noland cited an upbeat economic outlook, including rising consumer confidence and a strong fourth quarter 1992, as reason to believe that the economic recovery was fully in place at the beginning of this year. "But the bad weather, combined with an unexpected decline in consumer confidence, thwarted those expectations."
 He said the company's overall gross margin of profit on sales improved slightly over the year-earlier period, reflecting renewed emphasis on improving profitability on sales.
 Operating expenses rose 5 percent, in large part because of a somewhat larger work force than a year ago. Also increasing operating expenses was a $137,000 charge for the Jan. 1, 1993, adoption of Financial Accounting Standard 106, which requires recognizing projected postretirement health and life insurance benefits for employees. The net charge for the Accumulated Postretirement Benefit Obligation (APBO), which the company will amortize over the next 20 years, amounts to $4.1 million. This is considerably less than the company's preliminary estimate of approximately $8 million, reflecting first quarter amendments to the company's health and life benefit plans for retirees.
 The rise in operating expenses, combined with the lower gross profits generated by lower sales, resulted in a $2.2 million operating loss for the first quarter.
 Lower investments in inventory and accounts receivable, along with lower interest rates, reduced first-quarter interest expense by 21 percent, "which documents our continued improvement in the management of our trading assets," said Noland.
 Noland said the company continued to reduce its debt in the first quarter, lowering total borrowings as of March 31 by $10 million over a year ago.
 He said some recent economic indicators suggest the recovery may be stalling, "but until someone can convince us otherwise, we are preparing for a reasonably strong level of construction activity in the spring and summer months -- assuming we can get some dry weather."
 Noland has 93 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.
 NOLAND COMPANY
 FINANCIAL HIGHLIGHTS
 For the three months ended
 March 31,
 1993(A) 1992
 Merchandise Sales $88,302,657 $95,072,776
 Net Income (loss) $ (976,008)(B) $ 205,360
 Earnings (loss) per share(C) $ (0.26)(B) $ 0.06
 (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 $86,000, or 2 cents per share.
 (C) Based on 3,700,876 shares outstanding in both 1992 and 1993.
 -0- 4/19/93
 /CONTACT: John E. Gullett of Noland Company, 804-928-9000/
 (NOLD)


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

DC-MH -- DC017 -- 7489 04/19/93 14:31 EDT
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Publication:PR Newswire
Date:Apr 19, 1993
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