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INDUSTRY NEWS HD Supply announces fiscal 2010 3Q results


ATLANTA— HD Supply Inc. reported net sales for the 2010 fiscal third quarter ended October 31, 2010 of $2.0 billion, an increase of $61 mil- lion, or 3.2%, compared to the third quarter of fiscal 2009. Operating in- come for the fiscal third quarter of 2010 was $38 million, an increase of $256 million compared to the third quarter of fiscal 2009, which in- cluded a $224 million pre-tax good- will impairment charge. Excluding the goodwill impairment charge in fiscal 2009, operating income for the third quarter of fiscal 2010 increased $32 million compared to the third quarter of fiscal 2009. Liquidity at the end of the third


quarter of fiscal 2010 was $1.3 bil- lion, an increase of over $33 million versus the second quarter of fiscal 2010, and $436 million versus the end of fiscal 2009. Consolidated loss from continuing


operations for the third quarter of fis- cal 2010 was $99 million, compared to a loss from continuing operations of $258 million for the same period in fiscal 2009. Loss from continuing operations in the third quarter of fis- cal 2010 and fiscal 2009 included non-cash charges of $25 million and $1 million, respectively, to increase the valuation allowance against the company’s deferred tax assets. Ex- cluding the 2010 and 2009 charges for valuation allowances and the goodwill impairment charge in fiscal 2009 ($186 million net of tax), the loss from continuing operations of $74 million in the third quarter of fis- cal 2010 compares with a loss from continuing operations of $71 million in the third quarter of fiscal 2009. “In the face of continued economic


headwinds, the third quarter’s im- proved results reflect HD Supply’s initiatives to accelerate sales and


grow market share with unparalleled customer service. These measurable results and the teams’ corresponding profitable growth momentum posi- tion the company well for immediate and long-term success,” said CEO Joe DeAngelo. Net sales for the first nine months


of fiscal 2010 were $5.8 billion, a de- cline of $48 million, or 0.8%, com- pared to the first nine months of fiscal 2009. Operating income in the first nine months of fiscal 2010 was $43 million, an increase of $267 million compared to the first nine months of fiscal 2009, which included a $224 million pre-tax goodwill impairment charge. Excluding the goodwill im- pairment charge in fiscal 2009, oper- ating income for the first nine months of fiscal 2010 increased $43 million compared to the first nine months of fiscal 2009. Consolidated loss from continuing


•THE WHOLESALER® — JANUARY 2011


operations for the first nine months of fiscal 2010 was $416 million, com- pared to a loss from continuing oper- ations of $337 million for the same period in fiscal 2009. Loss from con- tinuing operations in the first nine months of fiscal 2010 and 2009 in- cluded $142 million and $6 million, respectively, of non-cash charges to increase the valuation allowance against the company’s deferred tax assets. In addition, loss from contin- uing operations in the first nine months of fiscal 2009 included a goodwill impairment charge ($186 million after-tax) and a non-operat- ing, non-cash pre-tax gain of $200 million ($123 million after-tax) re- sulting from the extinguishment of senior subordinated debt. Excluding these items, loss from continuing op- erations of $274 million in the first nine months of fiscal 2010 compares with a loss from continuing opera- tions of $268 million in the first nine months of fiscal 2009. Visit www.hdsupply.com.


See contact information on page 98 • Be sure to visit www.thewholesaler.com for web exclusive articles and videos! •


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