ATLANTA -- HD Supply, Inc. today reported net sales for the fiscal 2011 fourth quarter ended January 29, 2012 of $1.8 billion, an increase of $236 million, or 14.8 percent, as compared to the fourth quarter of fiscal 2010.
Gross profit for the fourth quarter of fiscal 2011 increased by $70 million, or 15.4 percent, to $525 million compared to $455 million for the fourth quarter of fiscal 2010. Gross profit for the fourth quarter of fiscal 2011 increased to 28.8 percent of net sales versus 28.6 percent of net sales for the fourth quarter of fiscal 2010.
"The HD Supply team delivered outstanding, full-year, financial results. We reported our seventh consecutive quarter of year-over-year sales growth and the largest percentage sales increase since 2006 for both the quarter and full year. In addition, we reported our highest gross profit rate since 2005 and our best operating profit since 2007," stated Joe DeAngelo, CEO of HD Supply. "These results are a testament to our associates' relentless drive to deliver the best performance and to be the industrial distributor of choice for all of our stakeholders, including our customers, suppliers, and the communities where we live and work. We're pleased with our 2011 financial performance, which is a tangible result of the strategic measures taken in prior quarters to sharpen and strengthen our portfolio. This momentum has continued, with double-digit, year-over-year sales growth in February 2012."
Business Highlights
- HD Supply is currently leveraging its enterprise capability by supplying a diverse portfolio of products from multiple HD Supply businesses into the largest single-phase resort development in the history of the Caribbean, Baha Mar. Since the start of construction in early 2011, HD Supply's White Cap, Waterworks and Electrical businesses have all participated in the development of this 1,000-acre, $3.4 billion resort, gaming and entertainment complex, planned to open in late 2014.
- HD Supply Waterworks continues its commitment to modernization and enhancement projects with emphasis on turn-key Automatic Meter Reading (AMR) and Advance Metering Infrastructure (AMI) project implementation and justification, and was recently awarded a contract from the borough of Seaside Heights, NJ for Sensus water and electric meters that utilize FlexNetTM technology, which increases meter reading efficiency, reduces overhead costs and enhances customer service simply, reliably, and with unlimited flexibility. HD Supply Waterworks was also selected to provide project management for this meter installation.
Operating income for the fourth quarter of fiscal 2011 was $24 million, an improvement of $26 million compared to the operating loss of $2 million for the fourth quarter of fiscal 2010. The improvement in operating income reflects a 14.8 percent sales growth and a 130 basis point decline in operating expenses as percent of sales despite inflationary pressures such as increased medical and fuel costs as well as a resumption of the company's 401(k) match.
Loss from continuing operations before income taxes improved $20 million to $139 million in the fourth quarter of fiscal 2011 as compared to the fourth quarter of fiscal 2010. Loss from continuing operations for the fourth quarter of fiscal 2011 was $159 million, compared to a loss from continuing operations of $192 million for the fourth quarter of fiscal 2010.
Adjusted EBITDA for the fourth quarter of fiscal 2011 increased 25.0 percent to $115 million from $92 million in the fourth quarter of fiscal 2010. Adjusted EBITDA for the fourth quarter of fiscal 2011increased to 6.3 percent of net sales versus 5.8 percent of net sales for fourth quarter of fiscal 2010. 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.
Full-Year Results
Net sales for the fiscal year ended January 29, 2012 were $7.7 billion, an increase of $709 million, or 10.1 percent, compared to the fiscal year ended January 30, 2011. Gross profit for fiscal 2011 increased by $210 million, or 10.7 percent, to $2.2 billion compared to $2.0 billion for fiscal 2010. Gross profit for fiscal 2011 increased to 28.2 percent of net sales versus 28.1 percent of net sales for fiscal 2010.
Operating income for fiscal 2011 was $199 million, an improvement of $133 million compared to operating income of $66 million for fiscal 2010. The improvement in operating income reflects a 10.1 percent sales growth and a 150 basis point decline in operating expenses as a percent of sales.
Loss from continuing operations before income taxes was $440 million in fiscal 2011, an improvement of $116 million as compared to fiscal 2010. Loss from continuing operations for fiscal 2011 was $519 million, compared to a loss from continuing operations of $584 million for fiscal 2010.
Adjusted EBITDA for fiscal 2011 increased 24.5 percent to $569 million compared to $457 million for fiscal 2010. Adjusted EBITDA for fiscal 2011 increased to 7.4 percent of net sales versus 6.5 percent of net sales for fiscal 2010.
