HD Supply Q3 Profit Soars, Sales Continue Rise

The now completed sale of its Power Solutions segment to Anixter gained HD Supply income and helped it pay off debt, while sales rose across all three business segments.

Whereas many of the companies on Industrial Distribution's 2015 Big 50 List suffered dwindling sales and profits over the past two quarters, one company – HD Supply – has managed through these tough industrial economic conditions to thrive.

The Atlanta-based company reported a strong third quarter on Tuesday, highlighted by a profit that more than quadrupled from last year and healthy sales growth. HD Supply – No. 4 on ID's Big 50 – posted Q3 sales of $2.1 billion, up 5.1 percent from a year ago, while total profit of $250 million, dwarfing last year's $60 million.

"I am very pleased with the team’s performance in the third quarter," said Joe DeAngelo, HD Supply Chairman and CEO. "We delivered 5 percent sales growth, 15 percent Adjusted EBITDA growth and 61 percent Adjusted Net Income per Diluted Share growth despite a challenging environment."

The company's now completed $825 million sale of its Power Solutions segment to Anixter International (No. 7 on ID's Big 50) gave HD Supply $186 million of pre-tax gain in Q3, while its profit also included $100 million used to modify and extinguish debt.

Adjusted net income in Q3 increased $51 million from last year, or 62.2 percent, to $133 million.

In Q2, HD Supply posted a profit of $102 million, and $2.0 billion in sales.

Q3's operating income increased by $50 million, or 27.9 percent from last year to $229 million.

By month, HD Supply's sales for August, September, and October were $646 million, $605 million, and $761 million, respectively. There were 20 selling days in August, 19 selling days in September and 25 selling days in October. Average year-over-year daily sales growth for August, September and October were 5.9 percent, 4.8 percent and 4.8 percent, respectively.

The company reports that preliminary November sales were $534 million, a 6.0 percent gain over last year. By segment, daily sales growth in November was: Facilities Maintenance - 7.4 percent, Waterworks - 3.9 percent, and Construction & Industrial - 11.5 percent.

BUSINESS SEGMENTS (compared to Q3 2014)

Facility Maintenance: Q3 sales increased by $56 million, or 8.5 percent, to $716 million.

Waterworks: Q3 sales increased by $10 million, or 1.4 percent, to $705 million.

Construction & Industrial - White Cap: Q3 Sales increased by $40 million, or 9.7 percent, to $451 million.

Through the first nine months of 2015, HD Supply's sales of $5.7 billion are up 5.8 percent over last year, while profit of $601 million is up from last year's $96 million.

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