Cleveland-While Lesco Inc. reported a 4.1 percent increase in sales during the third quarter, it said high urea prices, along with grass seed margins and indirect supply chain costs, helped put it in the loss column for the quarter. Specifically, Lesco cited a decline in gross profit due to a $1.8 million decrease in product margin from higher urea costs. Lesco said market costs for urea have been significantly lower than the cost it has been paying under its contract. It said that when its contract expires at the end of the year, it plans to buy urea at closer to market costs. Lesco reported a third-quarter loss of $2.3 million on sales of $165.4 million, versus the year-ago loss of $16.2 million and sales of $158.9 million. The year-ago results were reduced by $19 million due to the company’s sale of its supply chain assets and a $3.8 million markdown restructure. Lesco had a nine-month loss of $4 million on sales of $447.2 million, versus the year-ago $11.1 million and $447.1 million. Lesco said during the quarter it made progress in restoring its sales representative structure and now has 34 direct sales representatives. The company estimates it lost $60 million in sales in 2006 by previously disbanding the structure. In addition, the company said it had 332 service centers at the end of the third quarter, versus 294 at the year-ago period. Lesco estimates that some $15 million in fourth quarter sales and costs will shift into 2007 due to customer delays in purchasing, and has extended its early order program into 2007 as a result.
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