Third Quarter 2002Third Quarter 2002Investor UpdateInvestor Update

October 2002

2

Safe Harbor StatementSafe Harbor Statement

PPortions of this presentation are forward-looking and, as such, reflect

only the Company’s best assessment at this time. Investors are

cautioned that forward-looking statements involve risks and uncertainty,

that actual results may differ materially from such statements and that

investors should not place undue reliance on such statements. Factors

that may affect actual results include, but are not limited to potential

regulations; the Company’s ability to effectively manufacture, market and

distribute new products; the success of the Company’s operating plans;

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 quarter ended June 30,

2001.

Third Quarter 2002Third Quarter 2002Operating ResultsOperating Results

4

Income Statement - 3rd QuarterIncome Statement - 3rd Quarter

Reported Results Three Months(GAAP) One Time Excluding Ended %

(In thousands, except per share data) Results Gain Gains (a) September 30, 2001 Change

Net sales $ 144,009 $ - $ 144,009 $ 144,084 0%

Gross profit on sales 48,647 - 48,647 41,563 17.0%

Expenses, excluding severance 39,987 - 39,987 40,052 (0.1%)

Severance expense - - - 139

Other, net (625) 185 (440) (622) (29.3%)

Earnings (loss) before interest and taxes 9,285 (185) 9,100 1,994 356.4%

Interest expense 1,122 - 1,122 1,493 (24.8%)

Income tax expense (benefit) 3,069 (69) 3,000 164

Income $ 5,094 $ (116) $ 4,978 $ 337 1,377.2%

Fully Diluted EPS $ 0.58 $ (0.01) $ 0.57 $ 0.04

(a)Excludes one-time gain on sale of former corporate offices

Three Months Ended September 30, 2002

5

80

100

120

140

160

180

1st Qtr 2nd Qtr 3rd Qtr 4th Qtr

$'s

in m

illi

on

s

1999 2000 2001 *2002 Forecast

*2002 (First Nine Months Actual & 4th Quarter Forecast)

Sales SeasonalitySales Seasonality

6

$144.0

$144.1

$139.6

$130.9

$77.0

$74.3

$71.8

$67.1$130

$135

$140

$145

1999 2000 2001 2002

$65

$70

$75

$80

3rd Quarter Sales Service Center Sales

Third Quarter SalesThird Quarter Sales

Service Center Sales3rd Quarter Sales

7

68.071.5

74.3 77.0

44.6 47.2 47.1 48.0

19.520.9 23.1

19.4

$0

$10

$20

$30

$40

$50

$60

$70

$80

$'s

in m

illio

ns

Lawn Care Golf National Accounts

1999 2000 2001 2002

Third Quarter SalesThird Quarter Sales - Channels - Channels

3.6%

2.0%

(16.2)%

8

35.8

42.8

46.2 44.644.0

45.547.3 48.4

15.2 14.814.2

16.2

23.926.0

26.925.9

12.0 10.5 9.5 8.9

$0

$5

$10

$15

$20

$25

$30

$35

$40

$45

$50

$'s

in m

illio

ns

Fertilizer &Combination

Control Equipment,Parts &Service

TurfgrassSeed

Other*

1999 2000 2001 2002

Third Quarter Sales - Third Quarter Sales - ProductsProducts

*Other includes Pest Control, Golf Accessories, Irrigation, and Miscellaneous.

(6.3)%

2.3%

14.0%

(3.7)%

(3.5%)

9

3rd Quarter

$48.6

$41.6

$46.1

$44.4

$40.0

$42.0

$44.0

$46.0

$48.0

$50.0

1999 2000 2001 2002

$'s

in m

illi

on

s

Gross Profit on SalesGross Profit on Sales

33.8%28.9%33.0%33.9%

%’s are percent of sales.

10

3rd Quarter

$34.0

$38.4

$40.1 $40.0

$30

$35

$40

$45

1999 2000 2001 2002

$ in

Mil

lio

ns

Expenses - Total Expenses - Total

11

3rd Quarter

$19.4$18.4$19.3

$17.6

$11.8$11.9$9.3

$11.4

$8.8$9.7$7.6$7.1

$0

$10

$20

1999 2000 2001 2002

$ in

Mil

lio

ns

Selling Warehouse & Delivery General & Administrative

Expenses - ComponentsExpenses - Components

12

$1.3

$1.1

$1.9

$1.7

$1.5

$1.1

$1.3

$1

$2

1Q01 2Q01 3Q01 4Q01 1Q02 2Q02 3Q02

$ in

Mil

lio

ns

Interest ExpenseInterest Expense

13

3rd Quarter

$5.8 $4.2

$0.3

$5.0

$0

$3

$6

1999 2000 2001 2002

$ in

Mil

lio

ns

Net IncomeNet IncomeBefore One-time GainBefore One-time Gain

Note: Excludes one-time gain for sale of former corporate offices of $0.2 million.

14

3rd Quarter

$0.57$0.68

$0.49

$0.04

$0.00

$0.15

$0.30

$0.45

$0.60

$0.75

1999 2000 2001 2002

EPS Before One-time GainEPS Before One-time Gain(fully diluted)(fully diluted)

Note: Excludes one-time gain for sale of corporate offices of $0.2 million.

First Nine Months 2002First Nine Months 2002Operating ResultsOperating Results

16

Income StatementIncome StatementFirst Nine Months 2002First Nine Months 2002

Reported Results Nine Months(GAAP) One Time Excluding Ended %

(In thousands, except per share data) Results Charges Charges (b) September 30, 2001 Change

Net sales $ 403,981 $ - $ 403,981 $ 398,941 1.3%

Gross profit on sales 126,117 (9,581) 135,698 123,806 9.6%

Expenses, excluding severance and 117,483 - 117,483 116,355 1.0% asset rationalization

Asset rationalization 12,044 (12,044) - -

Severance expense 3,866 (3,866) - 636

Other, net (1,164) 185 (979) (1,793) (45.4%)

Earnings (loss) before interest and taxes (6,112) 25,306 19,194 8,608 123.0%

Interest expense 3,779 - 3,779 5,061 (25.3%)

Income tax expense (benefit) (3,719) 9,515 5,796 1,277 353.9%

Income (Loss) before extraordinary charge and cumulative effect of accounting change (a) $ (6,172) $ 15,791 $ 9,619 $ 2,270 323.7%

Fully Diluted EPS (a) $ (0.73) $ 1.83 $ 1.10 $ 0.26

Nine Months Ended September 30, 2002

(a) Net loss before extraordinary charge, cumulative effect of accounting change is not a measure of financial performance under GAAP.

(b) Results exclude third quarter one-time pre-tax gain for sale of the Company’s former headquarters of $0.2 million; second quarter total one-time charges of $23.4 million comprised of inventory markdown of $9.6 million, manufacturing rationalization of $12.0 million, and severance expense of $1.8 million; and first quarter charges of severance expense of $2.0 million, extraordinary charge for debt refinancing of $4.6 million, $2.9 million net of tax, and cumulative effect of accounting change for goodwill charge of $7.3 million, $4.6 million net of tax

17

$403.9$398.9

$367.7

$396.8$224.4

$213.5$210.9

$194.1$350.0

$370.0

$390.0

$410.0

1999 2000 2001 2002

$190.0

$200.0

$210.0

$220.0

First Nine Month Sales Service Center Sales

First Nine Months SalesFirst Nine Months Sales(1999 - 2002)(1999 - 2002)

Service Center SalesFirst Nine Months

Sales

18

194.8210.6

213.5 224.4

110.3 116.6 117.5116.7

59.669.6 69.7

64.5

$0

$50

$100

$150

$200

$250

$'s

in m

illio

ns

Lawn Care Golf National Accounts

1999 2000 2001 2002

First Nine Months SalesFirst Nine Months Sales - Channels - Channels(1999 - 2002)(1999 - 2002)

5.1%

(0.7)%

(7.5)%

19

128.1

145.0

156.2 156.9

113.4120.7116.0 121.0

47.7 50.6 47.6 49.440.4

48.448.9

48.5

35.1 32.1 30.6 28.1

$0

$20

$40

$60

$80

$100

$120

$140

$160

$'s

in m

illio

ns

Fertilizer &Combination

Control Equipment,Parts &Service

TurfgrassSeed

Other*

1999 2000 2001 2002

First Nine Months Sales - First Nine Months Sales - ProductsProducts(1999 - 2002)(1999 - 2002)

*Other includes Pest Control, Golf Accessories, Irrigation, and Miscellaneous.

(7.0)%

4.3%

2.0%(1.3)%

0.4%

20

First Nine Months

$135.7

$123.8

$135.0

$124.2

$120.0

$130.0

$140.0

1999 2000 2001 2002*

$'s

in m

illi

on

s

Gross Profit on SalesGross Profit on Sales

33.6%31.0%34.0%34.1%

%’s are percent of sales.

* Excluding inventory markdown charges

21

First Nine Months

$100.4

$111.2

$116.4

$117.5

$100

$110

$120

1999 2000 2001 2002*

$ in

Mil

lio

ns

Expenses - Total Expenses - Total

* Excluding one-time charges.

22

First Nine Months

$57.4$56.1$56.8

$51.4

$34.6$35.3$28.4

$32.5

25.525.021.9

20.7$20

$40

$60

1999 2000 2001 2002

$ in

Mil

lio

ns

Selling Warehouse & Delivery General & Administrative

Expenses - ComponentsExpenses - Components

23

First Nine Months

$13.0

$13.0

$2.3

$9.6

$0

$5

$10

$15

1999 2000 2001 2002

$ in

Mil

lio

ns

Net IncomeNet IncomeBefore One-time Gain and ChargesBefore One-time Gain and Charges

Note: Excluding third quarter one-time pre-tax gain for sale of the Company’s former headquarters of $0.2 million; second quarter total one-time charges of $23.4 million comprised of inventory markdown of $9.6 million, manufacturing rationalization of $12.0 million, and severance expense of $1.8 million; and first quarter charges of severance expense of $2.0 million, extraordinary charge for debt refinancing of $4.6 million, $2.9 million net of tax, and cumulative effect of accounting change for goodwill charge of $7.3 million, $4.6 million net of tax.

24

First Nine Months

$1.10$1.51$1.51

$0.26$0.00

$0.40

$0.80

$1.20

$1.60

1999 2000 2001 2002

EPS EPS Before One-time Gain and ChargesBefore One-time Gain and Charges

Note: Excludes third quarter one-time pre-tax gain for sale of the Company’s former headquarters of $0.2 million; second quarter total one-time charges of $23.4 million comprised of inventory markdown of $9.6 million, manufacturing rationalization of $12.0 million, and severance expense of $1.8 million; and first quarter charges of severance expense of $2.0 million, extraordinary charge for debt refinancing of $4.6 million, $2.9 million net of tax, and cumulative effect of accounting change for goodwill charge of $7.3 million, $4.6 million net of tax).

September 30, 2002September 30, 2002Balance Sheet &Balance Sheet &

Cash FlowsCash Flows

26

Consolidated Balance SheetConsolidated Balance Sheet

(a) As of 6/30/01 and 12/31/01, LESCO had sold trade receivables in securitization transactions totaling $35.0 million and $31.2 million, respectively.

September 30 September 30 December 312002 2001 2001

(Audited)ASSETSCURRENT ASSETS: Cash $ 5,782 $ 4,521 $ 5,035 Accounts receivable - net 80,402 51,503 (a) 37,571 Inventories 97,401 110,104 92,996 Other current assets 8,003 4,407 8,086 TOTAL CURRENT ASSETS 191,588 170,535 143,688

Net property, plant and equipment 34,459 48,700 49,260 Other assets 6,422 10,476 11,648 TOTAL ASSETS $ 232,469 $ 229,711 $ 204,596

LIABILITIES & SHAREHOLDERS' EQUITYCURRENT LIABILITIES: Accounts Payable $ 68,320 $ 67,045 $ 46,847 Other current liabilities 18,093 9,305 9,181 Current portion of debt 1,140 50,974 970 TOTAL CURRENT LIABILITIES 87,553 127,324 56,998

Long-term debt 64,102 161 50,141Deferred income taxes - 3,176 3,541

Shareholders' equity 80,814 99,050 93,916 TOTAL LIABILITIES & SHAREHOLDERS' EQUITY $ 232,469 $ 229,711 $ 204,596

(Unaudited)

27

Consolidated StatementConsolidated Statementof Cash Flowof Cash Flow

2002 2001

OPERATING ACTIVITIES: Net income (loss) before extraordinary charge and cumulative effect of accounting change $ (6,172) $ 2,270 Depreciation and amortization 7,284 7,151 Asset rationalization 12,044 - Provision for inventory markdown 9,581 - Net change in working capital 108 14,996 Other - net (1,835) (1,195) NET CASH PROVIDED BY OPERATING ACTIVITIES 21,010 23,222

INVESTING ACTIVITIES: Purchase of property, plant and equipment (1,296) (7,144)

NET CASH USED IN INVESTING ACTIVITIES (1,296) (7,144)

FINANCING ACTIVITIES: Borrowings - net reduction (17,067) (11,672) Cash dividends - (639) Deferred financing and other (1,900) (95)NET CASH USED BY FINANCING ACTIVITIES (18,967) (12,406)

Net Increase in Cash 747 3,672

Cash -- Beginning of the Period 5,035 849

CASH - END OF THE PERIOD $ 5,782 $ 4,521

(Unaudited)

Nine months ended September 30

28

$110.1 (b)

$109.1 (a)

$128.6

$118.9

$131.2

$130.8

$148.6

$100

$125

$150

1Q01 2Q01 3Q01 4Q01 1Q02 2Q02 3Q02

$ in

Mil

lio

ns

Working Capital InvestmentWorking Capital Investment

(a) Excludes $5.8 million of accruals relative to asset rationalization and severance costs and $1.1 million of the current portion of long-term debt.

(b) Excludes $4.9 million of accruals relative to asset rationalization and severance cost and $1.1 million on the current portion of long-term debt.

29

$98.1

$65.4

$112.1

$86.1(a)

$88.2 (a)

$82.3 (a)

$65.20$50

$70

$90

$110

$130

1Q01 2Q01 3Q01 4Q01 1Q02 2Q02 3Q02

$ in

Mil

lio

ns

Borrowings Under Debt FacilitiesBorrowings Under Debt Facilities

(a) The above has been adjusted for the asset securitization: 2Q01 of $35.0 million, 3Q01of $37.0 million and 4Q01 of $31.2 million.

30

2002 Full Year 2002 Full Year GuidanceGuidance

31

• Sales growth 0-1%; was 2-4%Sales growth 0-1%; was 2-4%• GM% increase over 200 bps; was 150 bpsGM% increase over 200 bps; was 150 bps• ExpensesExpenses

• Non-selling - flatNon-selling - flat• Selling - $3.0 million increaseSelling - $3.0 million increase

• EPS in the range of $0.60 - $0.70*EPS in the range of $0.60 - $0.70*• ROIC - greater than 5%ROIC - greater than 5%

2002 Forecast2002 Forecast

* Excludes third quarter one-time pre-tax gain for the sale of the company’s Excludes third quarter one-time pre-tax gain for the sale of the company’s

former headquarters of $0.2 millionformer headquarters of $0.2 million and one-time charges for inventory and one-time charges for inventory markdown of $9.6 million, manufacturing rationalization of $12.0 million, markdown of $9.6 million, manufacturing rationalization of $12.0 million, severance expense of $3.8 million, debt restructuring of $2.9 million, net of severance expense of $3.8 million, debt restructuring of $2.9 million, net of taxes, and FASB No. 142 of $4.6 million, net of taxes. taxes, and FASB No. 142 of $4.6 million, net of taxes.

32

New StoreNew Store ModelModel

33

IInnvveesstteedd CCaappiittaall RReeqquuiirreemmeennttssFFiixxeedd CCaappiittaall $55

WWoorrkkiinngg CCaappiittaall

IInnvveennttoorryy ((uunnlleevveerraaggeedd)) $145AAccccoouunnttss RReecceeiivvaabblleess ((5555 DDSSOO)) $60 (Year 1)

to $190 (maturity)$205 to $335

LLeeaasseedd CCaappiittaall RReeqquuiirreemmeennttssRReeaall EEssttaattee ((55,,000000 –– 66,,000000 fftt22 aatt $$77//fftt22)) $35 – 42 / year

PPrree--ooppeenniinngg CCoossttss $30

New Store Model - AssumptionsNew Store Model - Assumptions($’s in 000’s)($’s in 000’s)

34

$375.0

$700.0

$950.0

$1,075.0

$1,200.0

$1,250.0

$350

$700

$1,050

$1,400

1 2 3 4 5 6

Year

New Store Model - Sales RampNew Store Model - Sales Ramp($’s in 000’s)($’s in 000’s)

Note: Average store cannibalization of existing stores is included in the above sales numbers.

35

$170.0$150.0

$120.0

$80.0

$0.0

($80.0)($90)

$0

$90

$180

1 2 3 4 5 6

Year

New Store Model - EBIT RampNew Store Model - EBIT Ramp($’s in 000’s)($’s in 000’s)

36

31%29%23%

17%

3%

-22%-25%

-10%

5%

20%

35%

1 2 3 4 5 6

Year

New Store Model - ROICNew Store Model - ROIC($’s in 000’s)($’s in 000’s)

37

Hub and SpokeHub and SpokeUpdateUpdate

38

• Retrofitted Manufacturing Warehouses into Distribution Hubs – Avon Lake, Sebring, Hamilton

• Implemented Off-Hour Replenishments to Service Centers

• Implemented Back Haul Transportation Program • Implemented Regional Logistical Management

Network with Sales Force Realignment • Implemented Strategic Forecasting Tool (GAINS)

Throughout the Supply Chain Network

Accomplishments to DateAccomplishments to Date

39

• Opened Westfield Distribution Hub (August 2002)

• Hub Leases Signed (September 2002) – Atlanta, GA – Chicago, IL– Plano, TX

• Relocated Stockton Distribution Hub (September 2002)

Accomplishments to DateAccomplishments to Date

40

Future Service NetworkFuture Service Network

Blue circle - one day delivery

Red circle - two day delivery

PLANO, TX

STOCKTON, CA

CHICAGO, IL

SEBRING, FL

MINNEAPOLIS, MN (3pl)

AVON LAKE, OH

CENTRAL ISLIP, NY (3pl)

WESTFIELD, MA

HAMILTON, NJ

CHARLOTTE, NC

ATLANTA, GA

41

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