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.