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HD Supply Reports Tenth Consecutive Quarter Of Year-over-Year Revenue Growth

Thu, 12/06/2012 - 4:25pm
HD Supply

HD Supply, Inc. Announces Fiscal 2012 Third-Quarter Results Reports Tenth Consecutive Quarter of Year-over-Year Revenue Growth

  • Net sales increased 13.4 percent to $2.1 billion
  • Operating income improved 75.4 percent to $114 million
  • Adjusted EBITDA increased 31.6 percent to $204 million
  • $982 million of liquidity

Atlanta, GA – HD Supply, Inc. today reported net sales for the fiscal 2012 third quarter ended October 28, 2012 of $2.1 billion, an increase of $253 million, or 13.4 percent, as compared to the third quarter of fiscal 2011. Gross profit for the third quarter of fiscal 2012 increased by $81 million, or 15.1 percent, to $616 million compared to $535 million for the third quarter of fiscal 2011. Gross profit for the third quarter of fiscal 2012 was 28.7 percent of net sales compared to 28.3 percent of net sales for the third quarter of fiscal 2011.

Business and Financial Highlights

  • August 2012 issuance of $300 million Add-on 8 ⅛ percent First Priority Notes due 2019 at a premium of 107.5 percent. The net proceeds were applied to reduce outstanding borrowings under the company’s revolving asset-based lending (ABL) facility.
  • October 2012 issuance of $1 billion 11.5 percent Senior Notes due 2020 at par. The net proceeds were used to redeem $930 million of the company’s 13.5 percent Senior Subordinated Notes during November 2012.
  • Net sales and Adjusted EBITDA growth in all four of the company’s core businesses: Facilities Maintenance, Waterworks, Power Solutions, and White Cap.

Operating income for the third quarter of fiscal 2012 increased by $49 million, or 75.4 percent, to $114 million compared to $65 million for the third quarter of fiscal 2011. The improvement in operating income reflects sales growth of 13.4 percent and an approximately 140 basis point decline in operating expenses as a percent of net sales. Loss from continuing operations for the third quarter of fiscal 2012 was $53 million, an improvement of $66 million as compared to the third quarter of fiscal 2011.
“A true measurement of the team’s success is our improved year-over-year performance. We’re very pleased that our business has experienced ten consecutive quarters of continuous growth, an outstanding accomplishment, achieved via our associates’ unwavering hard work and dedication,” stated Joe DeAngelo, CEO of HD Supply. “We believe our performance momentum, coupled with our relentless focus on our customers and the expanding depth and breadth of our products and services offerings, will result in continued operational performance improvement for the remainder of the fiscal year.”
Adjusted EBITDA for the third quarter of fiscal 2012 increased 31.6 percent to $204 million from $155 million in the third quarter of fiscal 2011. Adjusted EBITDA for the third quarter of fiscal 2012 increased to 9.5 percent of net sales versus 8.2 percent of net sales for the third 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.
Year-to-Date Results
Net sales for the first nine months of fiscal 2012 of $6.0 billion, increased $665 million, or 12.4 percent, as compared to the first nine months of fiscal 2011. Gross profit for the first nine months of fiscal 2012 increased by $205 million, or 13.4 percent, to $1.7 billion compared to $1.5 billion for the first nine months of fiscal 2011. Gross profit for the first nine months of fiscal 2012 was 28.7 percent of net sales versus 28.4 percent of net sales for the first nine months of fiscal 2011.
Operating income for the first nine months of fiscal 2012 increased by $121 million, or 87.1 percent, to $260 million compared to $139 million for the first nine months of fiscal 2011. The improvement in operating income reflects sales growth of 12.4 percent and an approximately 140 basis point decline in operating expenses as a percent of net sales.
Loss from continuing operations for the first nine months of fiscal 2012 was $485 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 nine months of fiscal 2012 improved $131 million as compared to the first nine months of fiscal 2011.
Adjusted EBITDA for the first nine months of fiscal 2012 increased 30.3 percent to $529 million from $406 million in the first nine months of fiscal 2011. Adjusted EBITDA for the first nine months of fiscal 2012 increased to 8.8 percent of net sales versus 7.6 percent of net sales for the first nine months of fiscal 2011.

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