Lesco reports higher sales, dramatic expansion plan

CLEVELAND - In its full-year 2002 report, Lesco Inc. said it posted higher sales and net income for 2002. The company also announced that it has opened three new regional distribution hubs and that it was moving forward with plans to dramatically expand its Service Center outlets.

Net sales were $511.7 million, up 1.5 percent from the $504.3 million reported in 2001. Lawn care sales increased 5.4 percent to $281.7 million, but golf sales remained flat for the year ($152.7 million versus $152.6 million).

Fourth quarter results, however, were promising with lawn care and golf sales up 5.9 percent and 2.7 percent, respectively.

"We used the second half of 2002 to position Lesco for growth in 2003," said president and CEO Michael P. DiMino. "We have restructured the sales force, increasing our direct sales force by 60 and changing our commission programs to reward superior performance. These efforts have already contributed to sales growth as demonstrated by the sales increase in the fourth quarter."

To increase sales, Lesco has added new distribution hubs in Chicago, Atlanta and Plano, Texas. The hubs are state-of-the-art distribution facilities, each designed to serve more than 70 Lesco Service Centers and 30 Lesco Stores-on-Wheels with regional stocking assortments and improved transportation services.

The company is also opening new Service Centers, which are expected to generate approximately $10 million of net sales in 2003, bringing the total net sales increase to a range of 6 to 8 percent. Lesco opened a new Service Center in Haverhill, Mass., on April 2, the first of 25 new outlets that the company plans to open in 2003. DiMino said Lesco has identified major U.S. markets that could support more than 500 additional stores.

"In order to maximize the long-term value inherent in the Lesco model, we have to open additional Service Centers. We should always have a group of stores entering their third year of operation," said DiMino. "In the third year stores become profitable and defray the costs of new stores. Unfortunately, Lesco has not opened new stores since 1998 and for the next two years we will have to pay for store openings through the sacrifice of short-term earnings."