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.