True Value Company Announces 2009 Year-End Results

Monday, March 01, 2010

Co-op posts higher profits on lower revenue

CHICAGO , March 1, 2010 – True Value Company today reported revenue of $1,823.3 million for the year ending January 2, 2010, a decrease of 9.4 percent or $189.4 million compared to $2,012.7 million for the prior year ending January 3, 2009. Fiscal 2008 was a 53-week year. Excluding the 53rd week, revenue was down 8.5 percent. Comp store sales to core domestic hardware stores were down 5.4 percent on a comparable 52-week basis.

The co-op posted earnings of $65.4 million, an increase of 1.9 percent or $1.2 million versus $64.2 million one year ago. The 2008 earnings included a $3.0 million gain from a favorable ruling on an appeal from a previous arbitration matter. Excluding this prior year gain, earnings were up 6.9 percent or $4.2 million.

Total year-end debt was $121.5 million, down 14.0 percent or $19.7 million and cash reserves increased by almost $20 million. The company had no borrowings outstanding on its $250 million credit facility at year end.

"Clearly the recession made 2009 a challenging year. High unemployment and increased savings rates reduced consumer spending. The weak housing and construction industries slowed contractor purchases. In addition, our retailers managed their inventories and cash flow tightly. All of these factors put downward pressure on our revenue," said President and Chief Executive Officer Lyle Heidemann. "However, in spite of the revenue decline, we improved our net profit through our extensive expense control and enhanced inventory management and we reduced our debt, strengthening our balance sheet."

"At the same time we increased our financial support of our retailers' implementation of Destination True Value (DTV), our new store format. We opened a new or remodeled DTV at the rate of one per week in 2009," added Heidemann.

True Value Company, headquartered in Chicago, is one of the world's largest retailer-owned wholesale hardware cooperatives with sales of $1.8 billion in 2009. The cooperative includes approximately 5,000 independent retailer locations worldwide operating under the store identities of True Value, Grand Rental Station, Taylor Rental, Party Central, Home & Garden Showplace and Induserve Supply. Additional information on True Value and its retail identities is available at www.truevaluecompany.com.

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