Ace Hardware Corporation, the largest retailer-owned hardware cooperative in the industry, has reported net income of $42.2 million for the second quarter of 2009—an increase of $8.7 million or 26.2 percent, compared to $33.4 million in the second quarter of 2008.
For the six-month period ended July 4, 2009, net income was $56.6 million, an increase of $12.4 million or 28.1 percent over 2008, reported the company, based in Oak Brook, Ill.
After excluding certain non-comparable items, Ace reported adjusted EBITDA of $60.2 million for the second quarter of 2009 as compared to $63.5 million in 2008. For the six- month period ended July 4, 2009, adjusted EBITDA was $91.1 million as compared to $94.7 million in 2008.
“Our overall performance in the second quarter of 2009 is solid relative to the economic environment, the unusually cool weather, and the current state of consumer spending in general at retail,” said Ray Griffith, Ace president and chief executive officer. “Consumers are taking on more home maintenance projects themselves, they need advice, and we have an undisputed position in the market as the helpful hardware professionals which has and will continue to serve us well.”
Earnings for Ace Paint, a division of Ace Hardware, were included in the earnings report but not detailed.
Total revenues for the second quarter of 2009 were $973.1 million, a decrease of $91.8 million or 8.6 percent from $1.065 billion in 2008. For the six-month period ended July 4, 2009, total revenues were $1.824 billion, a decrease of $111.1 million or 5.7 percent from 2008.
Ace added 25 new stores and cancelled 53 stores in the second quarter, bringing its total store count to 4,530 at the end of the second quarter.
Gross profit in the second quarter of 2009 was $132.5 million, a decrease of $3.5 million from 2008, and the gross profit percentage was 13.61 percent as compared to 12.77 percent in 2008. The increase in gross profit percentage in 2009 was attributable to a shift from direct ship sales toward a higher percentage of warehouse sales that carry higher handling charges and a benefit related to certain costs capitalized into inventory as compared to the prior year.
Operating expenses decreased $1.5 million, or 1.7 percent, to $82.6 million in the second quarter of 2009 and increased to 8.49 percent as a percentage of revenues as compared to 7.90 percent in 2008.
Inventories decreased $20.9 million to $446.9 million at the end of the second quarter of 2009 as compared to the second quarter of 2008. However, service levels (fill rates) to Ace retailers improved to 96.8 percent for the second quarter compared to 96.6 percent for the prior year reflecting Ace’s ongoing commitment to support its retailers’ needs.
Total debt including patronage refund certificates, net of cash, decreased $66.4 million to $169.7 million at the end of the second quarter of 2009 as compared to the second quarter of 2008.