Ace enjoys record year
Ace Hardware’s unique value proposition allowed it to withstand strong competition from Home Depot and Lowe’s in 2013 and grow annual sales by a 8.2% to a record $4.2 billion.
“We outperformed our operating plan, exceeding $4 billion in consolidated revenues and $100 million in net income for the first time in our history,” said president and CEO John Venhuizen.
Net income was $104.5 million for fiscal 2013, an increase of $22.7 million, or 27.8%, compared with $81.8 million in fiscal 2012.
The results for fiscal 2013 included a charge of $6.2 million related to the estimated costs to close the Toledo, Ohio, Retail Support Center (RSC), while fiscal 2012 included a charge for the loss on the early extinguishment of debt of $19.9 million.
The results for fiscal 2012 also included a $7.0 million gain on the sale of paint assets, net of acquisition and disposition costs.
Total revenues for the fourth quarter of 2013 were $1.0 billion, an increase of 12.1%. Net income was $23.4 million for the fourth quarter of 2013, an increase of 4.5% from the $22.4 million earned in 2012.
“Ace retailers also had a very good year,” continued Venhuizen. “Comparable-store retail sales were up 3.5% in the fourth quarter and up 4.3% for the year, with 75% of retailers surveyed reporting record net profits.”
The December 2012 acquisition by Ace of WHI Holdings Corp., the indirect owner of the 85 store Westlake Ace Hardware retail chain, resulted in the consolidation of WHI’s financial statements into Ace’s financial statements for 2013. This affects the comparability of the 2013 and 2012 financial statements and results in a reduction of reported wholesale revenues, as wholesale revenues from Ace to WHI are now eliminated. This elimination totaled $83.7 million in wholesale revenues for all of 2013 and $21.6 million for the fourth quarter of 2013.
Ace added 152 new domestic stores and canceled 85 domestic stores in fiscal 2013 for a net increase in store count of 67. This brought the company’s total domestic store count to 4,171 at the end of 2013.