HD Supply, Inc. Announces Fiscal 2012 First-Quarter Results; Reports Eighth Consecutive Quarter of Year-over-Year Revenue Growth
Atlanta, GA - HD Supply, Inc. today reported net sales for the fiscal 2012 first quarter ended April 29, 2012 of $1.8 billion, an increase of $228 million, or 14.2 percent, as compared to the first quarter of fiscal 2011. Gross profit for the first quarter of fiscal 2012 increased by $63 million, or 13.7 percent, to $523 million compared to $460 million for the first quarter of fiscal 2011. Gross profit for the first quarter of fiscal 2012 was 28.5 percent of net sales versus 28.6 percent of net sales for the first quarter of fiscal 2011.
Business and Financial Highlights
Highlights during the fiscal 2012 first quarter included:
-- The refinancing of nearly $4 billion in outstanding indebtedness. The debt refinancing effectively extended the maturity dates of the senior portion of the Company's debt structure to the years 2017 through 2020. The Company now has no significant debt maturities until its 13.5% Senior Subordinated Notes mature in mid-2015.
-- The completion of the sale of the Industrial Pipes, Valves and Fittings ("IPVF") business to Shale-Inland Holdings, LLC for proceeds of approximately $469 million, subject to a customary working capital adjustment. Upon closing, the Company received cash proceeds of approximately $464 million, net of $5 million of transaction costs.
-- Net sales and Adjusted EBITDA growth in all four of its core businesses: Facilities Maintenance, Waterworks, Utilities/Electrical, and White Cap.
"I am exceptionally proud of our associates' strong execution and focus on customer success," stated Joe DeAngelo, CEO of HD Supply. "As a result of our team's dedication and performance excellence, we've had eight consecutive quarters of year-over-year sales growth. We have outstanding sales and EBITDA momentum in all of our businesses and have an uncompromised focus on growing our market share in our core leadership businesses. We've positioned HD Supply for future success by delivering quality products, providing outstanding customer service and strengthening our industry-leading businesses."
Mr. DeAngelo added, "As a result of the debt refinancing and sale of our IPVF business, we have added financial strength and flexibility to invest in future growth initiatives and explore future niche acquisition opportunities that will grow our portfolio and continue to enhance market share."
Operating income for the first quarter of fiscal 2012 was $43 million, an improvement of $35 million compared to operating income of $8 million for the first quarter of fiscal 2011. The improvement in operating income reflects sales growth of 14.2 percent and an approximately 190 basis point decline in operating expenses as percent of net sales despite inflationary pressures such as increased medical and fuel costs.
Loss from continuing operations for the first quarter of fiscal 2012 was $376 million, which included a $220 million loss on extinguishment of debt. Excluding the loss on extinguishment of debt, the loss from continuing operations for the first quarter of fiscal 2012 improved $13 million as compared to the first quarter of fiscal 2011.
Adjusted EBITDA for the first quarter of fiscal 2012 increased 38.5 percent to $133 million from $96 million in the first quarter of fiscal 2011. Adjusted EBITDA for the first quarter of fiscal 2012 increased to 7.2 percent of net sales versus 6.0 percent of net sales for the first quarter of fiscal 2011. The increase in the Adjusted EBITDA rate reflects our continued focus on operating efficiency and the leveraging of fixed costs through sales volume increases. The company presents Adjusted EBITDA to provide additional information to evaluate its operating performance and its ability to service its debt. Reconciliations of GAAP measures to non-GAAP Adjusted EBITDA are included at the end of this press release.
In accordance with accounting principles generally accepted in the United States of America, all prior period Consolidated Statements of Operations presented have been revised to reflect the results of the IPVF operations and the gain on the sale of the business as a discontinued operation. HD Supply's fiscal 2011 quarterly results, revised to reflect IPVF as a discontinued operation, are included at the end of this press release.
