True Value revenue, profits rise in third quarter
Despite the depressed economy and home market, True Value reported positive results for the third quarter ending Sept. 27, including revenue of $493.1 million for an increase of 3 percent — or $14.6 million — from $478.5 million for the same period a year ago.
Comp-store sales to members rose 0.5 percent in the quarter, driven primarily by an increase in the lawn and garden category. New store revenue exceeded lost revenue from member terminations by $8.8 million in the quarter, which the co-op attributes to the success of the new Destination True Value format.
True Value posted a quarterly net margin of $20.5 million, an increase of 70.8 percent, or $8.5 million, versus $12 million a year ago. The profit increase was the result of higher sales, a higher gross margin rate, continued control of overhead expenses and the effect of $1.7 million of non-recurring expenses in 2007 related to a facility lease and a legal matter.
“I am pleased with the strength of our third-quarter financial performance,” said president and CEO Lyle Heidemann. “Positive comp-store sales growth and the opening of 14 new True Value stores in the third quarter is a very positive statement about the health of the co-op given the condition of the U.S. economy.”
Compiled results for the first three quarters of 2008 were not as positive. For the nine months ending Sept. 27, True Value reported revenue of $1,529.2 million, a decrease of 2.1 percent, or $32.2 million, from $1,561.4 million for the same period a year ago. Comp-store sales to members decreased 2.5 percent year-to-date. Categories with the largest declines include hand and power tools, seasonal, paint and electrical. New store revenue exceeded lost revenue from member terminations by $2.4 million for the year-to-date.
The 2008 year-to-date net margin was $44.2 million, down 7.3 percent, or $3.5 million, from $47.7 million in 2007. The year-to-date profit decline was driven primarily by lower sales volume and higher fuel costs, offset in part by $2.9 million in recoveries related to arbitration proceedings.
“Clearly, the Destination True Value store format has been well received by our retail members and consumers, alike,” said Heidemann. “The solid performance of these stores played a part in offsetting the impact of the slowing economy and the unfavorable sales comparison of a late spring in many areas of the country.”
Whirlpool earnings down 7 percent
Appliances giant Whirlpool posted third-quarter earnings of $163 million, down 7 percent from $175 million in the same period last year. Revenue was $4.9 billion, up 1 percent from $4.8 billion in the year-ago period.
The company attributed its earnings to lower global unit volumes, higher material and oil-related costs and lower asset sale gains compared to last year. However, these factors were partially offset by an income tax benefit, favorable price/mix and productivity initiatives during the quarter.
“We are in the midst of a rapidly changing and very challenging economic environment,” said Jeff M. Fettig, Whirlpool chairman and CEO. “We have seen a sharp drop in demand in North America and Europe during the third quarter, and we do not expect demand conditions to improve in the near term.”
“We will reduce our global work force by approximately 5,000 positions by the end of 2009,” he added. “In addition to the four facility closures we have announced earlier this year, we are also closing our Jackson, Tenn, facility and transferring production into our Findlay, Ohio, location.”
In addition, sales for Whirlpool’s North American unit were $2.7 billion, down 7 percent from the prior year. Whirlpool Europe had sales of $1.1 billion, up 9 percent from last year. Whirlpool Latin America reported sales of $1.0 billion, up 22 percent from the year-ago period.
Local NADRA chapter breaks ground on deck for soldier
The New Jersey chapter of the North American Deck and Railing Association (NADRA) is set to break ground on its first “Deck for a Soldier” project, the Millstone, N.J.-based chapter announced.
Construction begins the first week in November on a deck in Green Brook, N.J., and is expected to be completed before Thanksgiving. The recipient is Herman Cabeza, an Army ranger who lost a limb in Vietnam and has been living with his son’s family since suffering a stroke in 2001.
NADRA started its Deck for a Soldier program in 2007 as a way to “give back to the men and women of our armed forces.” There have been three projects completed by the Quakertown, Pa.-based organization — in Oklahoma, Pennsylvania and Maryland. The NADRA New Jersey chapter was formed in 2008.
NADRA New Jersey chapter president Gus de la Cruz is the general contractor for the Green Brook project. Volunteers from the New Jersey chapter are donating labor, materials, tools, trucks, dumpsters and food for the ribbon cutting, which is scheduled for Nov. 18 at the Cabeza home.
“In coordinating Mr. Cabeza’s deck, it has truly been rewarding to see all of the manufacturers and contractors from various local areas pull together to donate labor and materials,” said Lainie Sleppin, vp-NADRA New Jersey chapter and a decking specialist team leader at Parksite, a building materials company. “It is only with the help of everyone involved can we make these projects happen.”
NADRA is a not-for-profit corporation that serves as a unified source for the professional development, promotion, growth and sustenance of the deck and railing building industry in North America.