HD Supply Holdings, Inc. (NASDAQ: HDS), Announces Financial 2k19 1st-Quarter Results

HD Supply Holdings, Inc. (NASDAQ: HDS), one of the largest industrial distributors in North America, reported Net sales of $1.5(B) for the 1st quarter of Financial 2k19 ended May 5, 2k19, an incline of $104(M), or 7.5 percent, as compared to the 1st quarter of Financial 2k18.

Organic sales development for the 1st quarter of Financial 2k19 was 5.8 percent, as compared to the 1st quarter of Financial 2k18.

“The team overcame significant unfavorable weather in February to deliver on our promises throughout the 1st quarter of 2k19,” stated Joe DeAngelo, Chairman, and CEO of HD Supply.

“In this current dynamic environment, we are intensely focused on what we can control, delivering profitable development and executing on our capital allocation strategy.”

Gross profit inclined $33(M), or 6.0 percent, to $585(M) for the 1st quarter of Financial 2k19, as compared to $552(M) for the 1st quarter of Financial 2k18. Gross profit was 39.2 percent of Net sales for the 1st quarter of Financial 2k19, down approximately 50 basis points from 39.7 percent for the 1st quarter of Financial 2k18.

Operating income inclined $19(M), or 12.6 percent, to $170(M) for the 1st quarter of Financial 2k19, as compared to $151(M) for the 1st quarter of Financial 2k18. Operating income was 11.4 percent of Net sales for the 1st quarter of Financial 2k19, up approximately 50 basis points from 10.9 percent for the 1st quarter of Financial 2k18.

Net income inclined $18(M), or 20.2 percent, to $107(M) for the 1st quarter of Financial 2k19, as compared to $89(M) for the 1st quarter of Financial 2k18. Net income per diluted share inclined $0.15, or 31.3 percent, to $0.63 in the 1st quarter of Financial 2k19, as compared to $0.48 in the 1st quarter of Financial 2k18.

Adjusted EBITDA inclined $13(M), or 6.8 percent, to $203(M) for the 1st quarter of Financial 2k19, as compared to $190(M) for the 1st quarter of Financial 2k18. Adjusted EBITDA was 13.6 percent of Net sales for the 1st quarter of Financial 2k19, down approximately 10 basis points from 13.7 percent for the 1st quarter of Financial 2k18.

Adjusted net income inclined $13(M), or 10.0 percent, to $143(M) for the 1st quarter of Financial 2k19, as compared to $130(M) for the 1st quarter of Financial 2k18.  Adjusted net income per diluted share inclined $0.14, or 20.0 percent to $0.84 in the 1st quarter of Financial 2k19, as compared to $0.70 in the 1st quarter of Financial 2k18.

As of May 5, 2k19, HD Supply’s combined liquidity of $580(M) was comprised of $40(M) in cash and cash equivalents and $540(M) of additional available borrowings (excluding $6(M) of borrowings on available cash balances) under HD Supply, Inc.’s senior asset-based lending facility, based on qualifying inventory and receivables.

Business Unit Performance

Facilities Maintenance

Net sales inclined $49(M), or 6.8 percent, to $772(M) in the 1st quarter of Financial 2k19, as compared to $723(M) for the 1st quarter of Financial 2k18.

Adjusted EBITDA inclined $11(M), or 8.9 percent, to $134(M) for the 1st quarter of Financial 2k19, as compared to $123(M) for the 1st quarter of Financial 2k18.  Adjusted EBITDA was 17.4 percent of Net sales for the 1st quarter of Financial 2k19, up approximately 40 basis points from 17.0 percent for the 1st quarter of Financial 2k18.

Construction & Industrial

Net sales inclined $55(M), or 8.3 percent, to $721(M) in the 1st quarter of Financial 2k19, as compared to $666(M) for the 1st quarter of Financial 2k18.  Organic sales development was approximately 4.7 percent in the 1st quarter of Financial 2k19 as compared to the 1st quarter of Financial 2k18. Adjusted EBITDA inclined $2(M), or 3.0 percent, to $69(M) for the 1st quarter of Financial 2k19, as compared to $67(M) for the 1st quarter of Financial 2k18.

Adjusted EBITDA was 9.6 percent of Net sales for the 1st quarter of Financial 2k19, down approximately 50 basis points from 10.1 percent for the 1st quarter of Financial 2k18.

1st-Quarter Monthly Sales Performance

Net sales for February, March, and April of Financial 2k19 were $423(M), $460(M) and $610(M), respectively.  There were 20 selling days in February, 20 selling days in March and 25 selling days in April in both Financial 2k19 and Financial 2k18.

Average Y-o-Y daily sales development for February, March, and April was 8.1 percent, 8.8 percent, and 6.1 percent, respectively. On an organic basis, average Y-o-Y daily sales development for February and March was 2.2 percent and 8.6 percent respectively. April did not include any non-organic sales.

Preliminary May Sales Results

Preliminary Net sales in May 2k19 were approximately $464(M), which represents Y-o-Y average daily sales development of approximately 0.2 percent.

Preliminary May Y-o-Y average daily sales by business segment was a 2.4 percent decline in Facilities Maintenance and a 2.8 percent incline in Construction & Industrial.  There were 19 selling days in May of Financial 2k19 and 20 selling days in May of Financial 2k18.

Facilities Maintenance’s May sales were unfavorably impacted by weak HVAC sales due to unusually cool weather, a temporary disruption in order fulfillment in the Southeast due to a vendor software issue in our Atlanta distribution center and a calendar shift due to 2k18’s 53-week year.

2nd-Quarter 2k19 and Financial Year 2k19 Outlook

In Financial year 2k19, the company continues to estimate end market development of approximately 2-3 percent.

The company will provide further specifics on its end markets, the 2nd-quarter 2k19 outlook and the full-year Financial 2k19 outlook throughout the 1st-quarter 2k19 incomes conference call and in the incomes call presentation materials.

Financial 2k19 1st-Quarter Conference Call

As previously announced, HD Supply will hold a conference call on Tuesday, June 11th, 2k19 at 8:00 a.m. (Eastern Time) to discuss its 1st-quarter Financial 2k19 results.

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