True Value posts gains in full year and fourth quarter
Chicago-based True Value Co. reported “gross billings” of $451.9 million for the fourth quarter, up 2.3% from the same quarter last year.
“Gross billings” — a term not used in the co-op’s 2012 earnings announcement — is a measure of the total amount invoiced to customers, without subtracting discounts or adjustments.
The company’s revenue was $340.4 million, up 3.3% from the prior-year quarter.
Quarterly earnings of $29.1 million increased from $12.4 million in the same quarter last year. The company said the earnings increased primarily as a result of a “fourth-quarter litigation settlement gain of an ongoing matter.”
True Value did not elaborate on the nature of the litigation, which included a confidentiality clause.
For the year ended Dec. 29, gross billings were $1.88 billion, up 1.1% from the prior year. The co-op posted earnings of $74.9 million, up 24.2%.
“This was one of the most profitable years in the company’s history,” said president and CEO Lyle Heidemann. “Our largest increase in both retail and wholesale comp-store sales were in the paint, seasonal, and farm, ranch, auto and pet product categories.”
True Value added 44 new stores in 2012, while providing more than $25 million in loans, free inventory and other incentives to retailers who rolled out the Destination True Value retail format, Heidemann said.
Comp-store sales to retailers were up 2.0% on a gross billing basis, and up 1.4% on a revenue basis, the co-op reported.
Total year-end debt was $185.1 million, up 29.3% or $41.9 million, from $143.2 million a year ago. The company issued $28.1 million of new notes to its retailers as part of the year-end patronage dividend distribution and invested an incremental $11.5 million of inventory in new and expanded assortments in its farm, ranch, auto and pet business.
Regarding the use of the term "gross billings," a True Value spokeswoman explained that co-op management and its auditors have reassessed how True Value reports sales. "What we have reported as revenue in the past is now called ‘gross billings,’" said Chris Taylor. "What we now call revenue is the same as in the past, except we are now reporting the vendor direct shipment portion of our sales on a net basis. This means only our profit on vendor direct shipment sales is reported as revenue, not the full amount we bill our retailers."
She said the change of terminology and reporting has no impact on gross margin or profit.
True Value elects new chairman of the board
Chicago-based True Value Co. tapped Brent Burger, owner of hardware stores in Maine, as chairman of the board.
Burger replaces outgoing chairman Brian Webb, owner of Krueger’s True Value in Neenah, Wis. and Grand Rental Station in Appleton, Wis.
Burger has served on the board since 2007, sitting on the compensation and corporate governance committees. He also serves on the board of the True Value Foundation.
“Brent brings a wealth of hardware knowledge and leadership experience to our board,” said Lyle Heidemann, president and CEO of True Value. “As a local store owner and dedicated board member, I know he will provide great insights into the future growth of True Value Co.”
Burger joined the co-op in 1999. He owns and operates five Maine-based Destination True Value stores in Madison, Skowhegan, Winslow and Farmingdale, and a Just Ask Rental store in Skowhegan. Prior to joining the hardware business, Burger worked with Starbucks Corp. and TCBY Enterprises. He began his career in 1985 as the youngest TCBY franchisee in the company’s history.
Burger currently serves on two not-for-profit boards — the YMCA/Boys and Girls Club of America and Mount Merici Academy. His leadership experience includes serving on the board of directors for the Greater Blacksburg, Va., Chamber of Commerce and positions on advisory boards for Agway Dealer Stores and TCBY franchises.
“The opportunity to serve True Value as chairman of the board and contribute to shaping the future of our organization is an enormous honor,” said Burger. “I look forward to continuing to represent our membership while helping grow True Value and meet our customers’ needs.”
Ace recognizes smooth operation in Tampa
Ace Hardware announced that its Retail Support Center (RSC) in Tampa, Fla., has been named the Ace Hardware RSC of the Year.
Ace operates a total of 14 RSCs. The Oak Brook, Ill.-based co-op said its Tampa facility is a key component in Ace’s global retail distribution network. As a warehouse operation, it has access to more than 70,000 products.
“Our Retail Support Center in Tampa consistently delivers some of the highest service levels in the industry, vital to the operations of our supply chain and meeting the demands of our valued retailers,” said Rick Whitson, VP retail support, Ace Hardware.
In addition, the Tampa RSC has also been named the best overall traffic-operating performance facility for 2012.
In Tampa, retail support manager Dave Milner and his staff have been formally awarded the Bud Picone Award, which recognizes outstanding achievement in safety, operations, finance and inventory management. Ace’s overall traffic operating performance award is given to the facility that best demonstrates excellence in safety, delivery and operations ratios.
“These awards are well-deserved by our dedicated, hardworking team members,” said Milner. “Without their efforts these achievements would not be possible. We want to thank our team for their commitment to excellence each and every day.”
Currently, the Tampa RSC supplies 181 domestic and 121 international retailers in 60 countries with the product they need to successfully operate their independently owned businesses. The facility was also recently named a Top Workplace by Workplace Dynamics.
Ace’s 391,700-sq.-ft. Retail Support Center in Tampa was acquired by Ace in July 1977 and began distribution to Ace retailers in the surrounding areas. The center is located on 17 acres of land and has a fleet of 17 tractors and 28 trailers, as well as 31 shipping and receiving docks.