0001573097 false 0001465264 false 8-K 2020-03-16 false false false false false 0001573097 2020-03-15 2020-03-16 0001573097 hds:HDSupplyIncMember 2020-03-15 2020-03-16 iso4217:USD xbrli:shares iso4217:USD xbrli:shares

 

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

 

 

FORM 8-K

 

 

 

CURRENT REPORT

 

PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934

 

Date of Report (Date of earliest event reported): March 16, 2020

 

Commission File
Number
  Exact name of Registrant as specified in its
charter, Address of principal executive offices
and Telephone number
  State of
incorporation
  I.R.S. Employer
Identification
Number
001-35979  

HD SUPPLY HOLDINGS, INC.

3400 Cumberland Boulevard

Atlanta, Georgia 30339

(770) 852-9000

  Delaware   26-0486780
333-159809  

HD SUPPLY, INC.

3400 Cumberland Boulevard

Atlanta, Georgia 30339

(770) 852-9000

  Delaware   75-2007383

 

Not Applicable

(Former name or former address, if changed since last report.)

 

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

 

¨Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
¨Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
¨Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
¨Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

 

Securities registered pursuant to Section 12(b) of the Act:

 

Title of each class Trading Symbol(s) Name of Exchange on which registered
Common stock, $0.01 par value per share HDS The Nasdaq Stock Market LLC

 

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

 

Emerging growth company ¨

 

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ¨

 

 

 

 

 

Co-Registrant CIK 0001465264
Co-Registrant Amendment Flag false
Co-Registrant Form Type 8-K
Co-Registrant DocumentPeriodEndDate 2020-03-16
Co-Registrant Written Communications false
Co-Registrant Solicitating Materials false
Co-Registrant PreCommencement Tender Offer false
Co-Registrant PreCommencement Issuer Tender Offer false
Co-Registrant Emerging Growth Company false
Co-Registrant Memeber: HD Supply, Inc. (Total HDS)

 

Item 2.02. Results of Operations and Financial Condition.

 

On March 17, 2020, HD Supply Holdings, Inc. (the “Company” or “HD Supply”), HD Supply, Inc.’s parent company, will issue a press release, filed as Exhibit 99.1 and incorporated herein by reference, announcing the Company’s financial results for the three months and full year ended February 2, 2020 and certain other information.

 

The information contained in Item 7.01 concerning the presentation to HD Supply investors is hereby incorporated into this Item 2.02 by reference.

 

In accordance with General Instruction B.2 of Form 8-K, the information in this Item 2.02 of this Current Report on Form 8-K, including Exhibit 99.1 attached hereto, shall not be deemed “filed” for the purposes of Section 18 of the Securities Exchange Act of 1934, as amended, or otherwise subject to the liabilities of that section, nor shall it be deemed incorporated by reference in any filing under the Securities Act of 1933, as amended, or the Securities Exchange Act of 1934, as amended, except as shall be expressly set forth by specific reference in such a filing.

 

Item 7.01. Regulation FD Disclosure.

 

The slide presentation attached hereto as Exhibit 99.2, and incorporated herein by reference, will be presented to certain investors of HD Supply on March 17, 2020 and may be used by HD Supply in various other presentations to investors.

 

In accordance with General Instruction B.2 of Form 8-K, the information in this Item 7.01 of this Current Report on Form 8-K, including Exhibit 99.2 attached hereto, shall not be deemed “filed” for the purposes of Section 18 of the Securities Exchange Act of 1934, as amended, or otherwise subject to the liabilities of that section, nor shall it be deemed incorporated by reference in any filing under the Securities Act of 1933, as amended, or the Securities Exchange Act of 1934, as amended, except as shall be expressly set forth by specific reference in such a filing.

 

Item 9.01 Financial Statements and Exhibits.

 

(d) Exhibits

 

Exhibit No.     Description of Exhibit  
99.1   Press Release “HD Supply Holdings, Inc. Announces Fiscal 2019 Full-Year and Fourth-Quarter Results,” dated March 17, 2020
     
99.2   HD Supply presentation to investors
     
104   Cover Page Interactive Data File (embedded within the inline XBRL document)

 

 

 

 

SIGNATURE

 

Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

 

Date: March 16, 2020 HD Supply Holdings, Inc.
     
  By: /s/ Dan S. McDevitt
    Dan S. McDevitt
    General Counsel and Corporate Secretary

 

SIGNATURE

 

Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

 

Date: March 16, 2020 HD Supply, Inc.
     
  By: /s/ Dan S. McDevitt
    Dan S. McDevitt
    General Counsel and Corporate Secretary

 

 

 

 

 

Exhibit 99.1

 

 

Investor Contact:

Charlotte McLaughlin

HD Supply Investor Relations

770-852-9100

InvestorRelations@hdsupply.com

 

Media Contact:

Quiana Pinckney

HD Supply Public Relations

770-852-9057

Quiana.Pinckney@hdsupply.com

 

HD Supply Holdings, Inc. Announces Fiscal 2019 Full-Year and Fourth-Quarter Results

 

Atlanta, GA – March 17, 2020 – HD Supply Holdings, Inc. (NASDAQ: HDS), one of the largest industrial distributors in North America, today reported Net sales of $6.1 billion for the full-year of fiscal 2019 ended February 2, 2020, an increase of $99 million, or 1.6 percent, as compared to the full-year of fiscal 2018. Fiscal 2019 consisted of 52 weeks, as compared to 53 weeks in fiscal 2018. Organic sales growth, on a 52-week basis for the full-year of fiscal 2019 was 3.0 percent, as compared to the full-year of fiscal 2018.

 

"Despite ending 2019 with a solid performance, we enter 2020 with the COVID-19 virus top of mind," stated Joe DeAngelo, Chairman and CEO of HD Supply. "We are committed to helping our customers succeed in these challenging times by doing everything we can to keep our HD Supply family healthy and focused."

 

Gross profit increased $28 million, or 1.2 percent, to $2,403 million in fiscal 2019, as compared to $2,375 million in fiscal 2018. Gross profit was 39.1 percent of Net sales in fiscal 2019, a decrease of approximately 20 basis points from 39.3 percent in fiscal 2018.

 

Operating income decreased $1 million, or 0.1 percent, to $723 million in fiscal 2019, as compared to $724 million in fiscal 2018. Operating income was 11.8 percent of Net sales in fiscal 2019, a decrease of approximately 20 basis points from 12.0 percent in fiscal 2018.

 

Net income increased $58 million, or 14.7 percent, to $452 million in fiscal 2019, as compared to $394 million in fiscal 2018. Net income per diluted share increased $0.54, or 24.9 percent, to $2.71 in fiscal 2019, as compared to $2.17 in fiscal 2018.

 

Adjusted EBITDA increased $2 million, or 0.2 percent, to $873 million in fiscal 2019, as compared to $871 million in fiscal 2018. Adjusted EBITDA was 14.2 percent of Net sales in fiscal 2019, a decrease of approximately 20 basis points from 14.4 percent in fiscal 2018. On a 52-week basis, Adjusted EBITDA growth was 1.7 percent in fiscal 2019, as compared to fiscal 2018.

 

Adjusted net income decreased $23 million, or 3.7 percent, to $596 million in fiscal 2019, as compared to $619 million in fiscal 2018. Adjusted net income per diluted share increased $0.17, or 5.0 percent, to $3.57 in fiscal 2019, as compared to $3.40 in fiscal 2018.

 

Fourth-Quarter 2019 Results

 

Net sales decreased $61 million, or 4.2 percent, to $1,385 million in the fourth quarter of fiscal 2019, as compared to $1,446 million in the fourth quarter of fiscal 2018. The fourth quarter of fiscal 2019 consisted of 13 weeks, as compared to 14 weeks during the fourth quarter of fiscal 2018. Sales growth, on a 13-week basis, in the fourth quarter of fiscal 2019 was 3.2 percent, as compared to the fourth quarter of fiscal 2018.

 

1

 

 

Gross profit decreased $27 million, or 4.7 percent, to $545 million for the fourth quarter of fiscal 2019, as compared to $572 million for the fourth quarter of fiscal 2018. Gross profit was 39.4 percent of Net sales for the fourth quarter of fiscal 2019, down approximately 20 basis points from 39.6 percent for the fourth quarter of fiscal 2018.

 

Operating income decreased $12 million, or 8.1 percent, to $137 million for the fourth quarter of fiscal 2019, as compared to $149 million for the fourth quarter of fiscal 2018. Operating income was 9.9 percent of Net sales for the fourth quarter of fiscal 2019, down approximately 40 basis points from 10.3 percent for the fourth quarter of fiscal 2018.

 

Net income decreased $14 million, or 15.2 percent, to $78 million for the fourth quarter of fiscal 2019, as compared to $92 million for the fourth quarter of fiscal 2018. Net income in the fourth quarter of fiscal 2018 included $2 million of Income from discontinued operations, net of tax.

 

Net income per diluted share decreased $0.04, or 7.7 percent, to $0.48 in the fourth quarter of fiscal 2019, as compared to $0.52 in the fourth quarter of fiscal 2018.

 

Adjusted EBITDA decreased $8 million, or 4.3 percent, to $179 million for the fourth quarter of fiscal 2019, as compared to $187 million for the fourth quarter of fiscal 2018. Adjusted EBITDA was 12.9 percent of Net sales for the fourth quarter of fiscal 2019, flat as compared to the fourth quarter of fiscal 2018. On a 13-week basis, Adjusted EBITDA growth was 2.9 percent in the fourth quarter of fiscal 2019, as compared to the fourth quarter of fiscal 2018.

 

Adjusted net income decreased $19 million, or 15.4 percent, to $104 million for the fourth quarter of fiscal 2019, as compared to $123 million for the fourth quarter of fiscal 2018. Adjusted net income per diluted share decreased -$0.06, or 8.6 percent, to $0.64 in the fourth quarter of fiscal 2019, as compared to $0.70 in the fourth quarter of fiscal 2018.

 

As of February 2, 2020, HD Supply’s combined liquidity of $628 million was comprised of $34 million in cash and cash equivalents and $594 million of additional available borrowings (excluding $4 million of borrowings on available cash balances) under HD Supply, Inc.'s senior asset-based lending facility, based on qualifying inventory and receivables.

 

Business Unit Performance

 

Facilities Maintenance

 

Full-Year Results

 

Net sales increased $41 million, or 1.3 percent, to $3,130 million in the full-year fiscal 2019, as compared to $3,089 million for the full-year fiscal 2018. Sales growth, on a comparable 52-week basis, for fiscal 2019 was 3.1 percent, as compared to fiscal 2018. Adjusted EBITDA was flat at $546 million for the full-year fiscal 2019 as compared to the full-year fiscal 2018. The 53rd week in fiscal 2018 contributed approximately $10 million to Adjusted EBITDA. Adjusted EBITDA was 17.4 percent of Net sales for the full-year fiscal 2019, down approximately 30 basis points from 17.7 percent for the full-year fiscal 2018.

 

Fourth Quarter Results

 

Net sales decreased $34 million, or 4.6 percent, to $702 million in the fourth quarter of fiscal 2019, as compared to $736 million for the fourth quarter of fiscal 2018. Sales growth, on a comparable 13-week basis, for fourth quarter of fiscal 2019 was 2.8 percent, as compared to the fourth quarter of fiscal 2018. Adjusted EBITDA decreased $10 million, or 8.1 percent, to $114 million for the fourth quarter of fiscal 2019, as compared to $124 million for the fourth quarter of fiscal 2018. Adjusted EBITDA was 16.2 percent of Net sales for the fourth quarter of fiscal 2019, down approximately 60 basis points from 16.8 percent for the fourth quarter of fiscal 2018.

 

2

 

 

Construction & Industrial

 

Full-Year Results

 

Net sales increased $58 million, or 2.0 percent, to $3,019 million in the full-year fiscal 2019, as compared to $2,961 million for the full-year fiscal 2018. Organic sales growth, on a comparable 52-week basis, for the full-year fiscal 2019 was 2.9 percent, as compared to the full-year fiscal 2018. Adjusted EBITDA increased $2 million, or 0.6 percent, to $327 million for the full-year fiscal 2019, as compared to $325 million for the full-year fiscal 2018. The 53rd week in fiscal 2018 contributed approximately $3 million to Adjusted EBITDA. Adjusted EBITDA was 10.8 percent of Net sales for the full-year fiscal 2019, down approximately 20 basis points from 11.0 percent for the full-year fiscal 2018.

 

Fourth Quarter Results

 

Net sales decreased $26 million, or 3.7 percent, to $685 million in the fourth quarter of fiscal 2019, as compared to $711 million for the fourth quarter of fiscal 2018. Sales growth, on a comparable 13-week basis, in the fourth quarter of fiscal 2019 was 3.8 percent, as compared to the fourth quarter of fiscal 2018. Adjusted EBITDA increased $2 million, or 3.2 percent, to $65 million for the fourth quarter of fiscal 2019, as compared to $63 million for the fourth quarter of fiscal 2018. Adjusted EBITDA was 9.5 percent of Net sales for the fourth quarter of fiscal 2019, up approximately 60 basis points from 8.9 percent for the fourth quarter of fiscal 2018.

 

Fourth-Quarter Monthly Sales Performance

 

Net sales for November, December and January of fiscal 2019 were $436 million, $403 million and $546 million, respectively. There were 18 selling days in November, 19 selling days in December and 24 selling days in January of fiscal 2019, compared to 18 selling days in November, 20 selling days in December and 28 selling days in January of fiscal 2018. Average year-over-year daily sales changes for November, December and January were an increase of 2.5 percent, a decrease of 6.8 percent and an increase of 12.7 percent, respectively.

 

Preliminary February Sales Results

 

Preliminary Net sales in February 2020 were approximately $460 million, which represents year-over-year average daily sales growth of approximately 8.8 percent. Preliminary February year-over-year average daily sales by business segment was a 4.1 percent increase in Facilities Maintenance and a 14.2 percent increase in Construction & Industrial. There were 20 selling days in both February 2020 and February 2019.

 

Share Repurchase Program

 

During the fourth quarter of fiscal 2019, the Company completed the $500 million of share repurchases authorized by the Board of Directors in November 2018, purchasing approximately 13.0 million shares at an average price of $38.61 per share.

 

On March 12, 2020, the Company’s Board of Directors authorized a new share repurchase program for the repurchase of up to an aggregate $500 million of its common stock. The Company will conduct repurchases under the share repurchase program in the open market and through broker-negotiated purchases in compliance with Rule 10b5-1 as part of the Company’s ongoing capital allocation program.

 

2020 Outlook

 

The company will not be providing a first quarter 2020 or fiscal full year 2020 outlook in light of the ongoing coronavirus disease 2019 (“COVID-19”) outbreak. A further discussion relating to the potential impact of COVID-19 will take place on our fiscal 2019 fourth-quarter conference call.

 

Fiscal 2019 Fourth-Quarter Conference Call

 

As previously announced, HD Supply will hold a conference call on Tuesday, March 17th, 2020 at 8:00 a.m. (Eastern Time) to discuss its fourth-quarter and full-year fiscal 2019 results. The conference call and presentation materials can be accessed via webcast by logging on from the Investor Relations section of the company's Web site at hdsupply.com. The online replay will remain available for a limited time following the call.

 

3

 

 

Non-GAAP Financial Measures

 

HD Supply supplements its reporting of Net income with non-GAAP measurements, including Adjusted EBITDA, Adjusted net income, and Adjusted net income per diluted share. This supplemental information should not be considered in isolation or as a substitute for the GAAP measurements. Additional information regarding Adjusted EBITDA, Adjusted net income, and Adjusted net income per diluted share referred to in this press release is included below under “Reconciliation of Non-GAAP Measures.”

 

About HD Supply

 

HD Supply (www.hdsupply.com) is one of the largest industrial distributors in North America. The company provides a broad range of products and value-add services to approximately 500,000 customers with leadership positions in the maintenance, repair and operations and specialty construction sectors. Through approximately 270 branches and 44 distribution centers in the U.S. and Canada, the company's approximately 11,500 associates provide localized, customer-tailored products, services and expertise.

 

Forward-Looking Statements and Preliminary Results

 

This press release includes "forward-looking statements" within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. Forward-looking statements are based on management's beliefs and assumptions and information currently available to management and are subject to known and unknown risks and uncertainties, many of which may be beyond our control. We caution you that the forward-looking information presented in this press release is not a guarantee of future results, and that actual results may differ materially from those made in or suggested by the forward-looking information contained in this press release. Forward-looking statements generally can be identified by the use of forward-looking terminology such as "may," "plan," "seek," "comfortable with," "will," "expect," "intend," "estimate," "anticipate," "believe" or "continue" or the negative thereof or variations thereon or similar terminology. A number of important factors could cause actual events to differ materially from those contained in or implied by the forward-looking statements, including, without limitation, the impact of the coronavirus disease 2019 outbreak on the maintenance, repair and operations and specialty construction sectors, in general, and the financial position and operating results of our company, in particular, which cannot be predicted and could change rapidly and those "Risk factors" in our annual report on Form 10-K, for the fiscal year ended February 2, 2020, filed on March 17, 2020 and those described from time to time in our, and HD Supply, Inc.'s, other filings with the U.S. Securities and Exchange Commission (the “SEC”), which can be found at the SEC's website www.sec.gov. Any forward-looking information presented herein is made only as of the date of this press release, and we do not undertake any obligation to update or revise any forward-looking information to reflect changes in assumptions, the occurrence of unanticipated events, or otherwise.

 

February 2020 estimates for Net sales are preliminary estimates and are subject to risks and uncertainties, including, among others, changes in connection with quarter-end adjustments. Any variation between HD Supply’s actual results and the preliminary financial data set forth above may be material.

 

4

 

 

HD SUPPLY HOLDINGS, INC.

CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME

Amounts in millions, except share and per share data, Unaudited

 

   Three Months Ended   Fiscal Year Ended 
  

February 2,

2020

   February 3,
2019
   February 2,
2020
   February 3,
2019
 
Net Sales  $1,385   $1,446   $6,146   $6,047 
Cost of sales   840    874    3,743    3,672 
Gross Profit   545    572    2,403    2,375 
Operating expenses:                    
Selling, general and administrative   373    396    1,566    1,543 
Depreciation and amortization   29    27    106    99 
Restructuring and separation   6        8    9 
Total operating expenses   408    423    1,680    1,651 
Operating Income   137    149    723    724 
Interest expense   27    29    110    130 
Interest (income)               (1)
Loss on extinguishment & modification of debt               69 
Income from Continuing Operations Before Provision for Income Taxes   110    120    613    526 
Provision for income taxes   32    30    162    135 
Income from Continuing Operations   78    90    451    391 
Income from discontinued operations, net of tax       2    1    3 
Net Income  $78   $92   $452   $394 
Other comprehensive income (loss):                    
Foreign currency translation adjustment               2 
Unrealized loss on cash flow hedge, net of tax of $1, $4, $8, $5   (1)   (11)   (22)   (15)
Total Comprehensive Income  $77   $81   $430   $381 
                     
Weighted Average Common Shares Outstanding (thousands)                    
Basic   161,436    174,831    166,405    181,099 
Diluted   162,040    175,593    166,989    181,929 
                     
Basic Earnings Per Share(1):                     
Income from Continuing Operations  $0.48   $0.51   $2.71   $2.16 
Income from Discontinued Operations      $0.01   $0.01   $0.02 
Net Income  $0.48   $0.53   $2.72   $2.18 
Diluted Earnings Per Share(1):                     
Income from Continuing Operations  $0.48   $0.51   $2.70   $2.15 
Income from Discontinued Operations      $0.01   $0.01   $0.02 
Net Income  $0.48   $0.52   $2.71   $2.17 

 

(1)Due to rounding, amounts may not add to totals

 

5

 

 

HD SUPPLY HOLDINGS, INC.

CONSOLIDATED BALANCE SHEETS

Amounts in millions, except per share data, Unaudited

 

   February 2,
2020
   February 3,
2019
 
ASSETS          
Current assets:          
Cash and cash equivalents  $34   $38 
Receivables, less allowance for doubtful accounts of $19 and $18   754    732 
Inventories   771    766 
Other current assets   104    50 
Total current assets   1,663    1,586 
Property and equipment, net   391    370 
Operating lease right-of-use assets   480     
Goodwill   1,991    1,990 
Intangible assets, net   175    191 
Deferred tax asset   2    78 
Other assets   13    18 
Total assets  $4,715   $4,233 
LIABILITIES AND STOCKHOLDERS’ EQUITY          
Current liabilities:          
Accounts payable  $414   $367 
Accrued compensation and benefits   71    109 
Current installments of long-term debt   11    11 
Current lease liabilities   110     
Other current liabilities   208    259 
Total current liabilities   814    746 
Long-term debt, excluding current installments   2,035    2,129 
Deferred tax liabilities   33     
Long-term lease liabilities   383     
Other liabilities   98    77 
Total liabilities   3,363    2,952 
Stockholders’ equity:          
Common stock, par value $0.01; 1 billion shares authorized; 161.4 million and 170.7 million shares issued and outstanding at February 2, 2020, and February 3, 2019, respectively   2    2 
Paid-in capital   4,097    4,067 
Accumulated deficit   (1,122)   (1,572)
Accumulated other comprehensive loss   (52)   (30)
Treasury stock, at cost, 44.1 and 34.2 million shares at February 2, 2020 and February 3, 2019, respectively   (1,573)   (1,186)
Total stockholders’ equity   1,352    1,281 
Total liabilities and stockholders’ equity  $4,715   $4,233 

 

6

 

 

HD SUPPLY HOLDINGS, INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS

Amounts in millions, Unaudited

 

   Fiscal Year Ended 
   February 2,
2020
   February 3,
2019
 
CASH FLOWS FROM OPERATING ACTIVITIES:          
Net income  $452   $394 
Reconciliation of net income to net cash provided by operating activities:          
Depreciation and amortization   113    106 
Provision for uncollectibles   9    12 
Non-cash interest expense   6    17 
Payment of discounts upon extinguishment of debt       (4)
Loss on extinguishment & modification of debt       69 
Stock-based compensation expense   23    26 
Deferred income taxes   119    122 
Other   3     
Changes in assets and liabilities, net of the effects of acquisitions & dispositions:          
(Increase) decrease in receivables   (27)   (79)
(Increase) decrease in inventories   (4)   (59)
(Increase) decrease in other current assets   (3)   (1)
(Increase) decrease in other assets   (1)   (2)
Increase (decrease) in accounts payable and accrued liabilities   (12)   (18)
Increase (decrease) in other long-term liabilities   (1)   1 
Net cash provided by operating activities   677    584 
CASH FLOWS FROM INVESTING ACTIVITIES:          
Capital expenditures   (106)   (115)
Payments for businesses acquired, net   (9)   (362)
Proceeds from sales of property and equipment   3     
Net cash provided by (used in) investing activities   (112)   (477)
CASH FLOWS FROM FINANCING ACTIVITIES:          
Purchase of treasury shares   (385)   (596)
Borrowings of long-term debt       930 
Repayments of long-term debt   (11)   (1,243)
Repayments of financing liabilities   (88)    
Borrowings on long-term revolver debt   1,310    523 
Repayments on long-term revolver debt   (1,397)   (229)
Proceeds from issuance of common stock under employee benefit plans   9    13 
Tax withholdings on stock-based awards   (6)   (7)
Debt issuance and modification costs       (19)
Other financing activities   (1)   1 
Net cash provided by (used in) financing activities   (569)   (627)
Effect of exchange rates on cash and cash equivalents        
Increase (decrease) in cash and cash equivalents  $(4)  $(520)
Cash and cash equivalents at beginning of period   38    558 
Cash and cash equivalents at end of period  $34   $38 

 

7

 

 

 

HD SUPPLY HOLDINGS, INC.

SEGMENT REPORTING

Amounts in millions, Unaudited

 

   Facilities
Maintenance
   Construction
& Industrial
   Eliminations   Total
Continuing
Operations
 
Three Months Ended February 2, 2020                
Net sales  $702   $685   $(2)  $1,385 
Adjusted EBITDA   114    65        179 
Depreciation(1) & Software Amortization   14    10        24 
Other Intangible Amortization   2    4        6 
                     
Three Months Ended February 3, 2019                    
Net sales  $736   $711   $(1)  $1,446 
Adjusted EBITDA   124    63        187 
Depreciation(1) & Software Amortization   12    10        22 
Other Intangible Amortization   2    4        6 
                     

Fiscal Year Ended February 2, 2020

                    
Net sales  $3,130   $3,019   $(3)  $6,146 
Adjusted EBITDA   546    327        873 
Depreciation1 & Software Amortization   46    44        90 
Other Intangible Amortization   8    15        23 
                     
Fiscal Year Ended February 3, 2019                    
Net sales  $3,089   $2,961   $(3)  $6,047 
Adjusted EBITDA   546    325        871 
Depreciation1 & Software Amortization   40    44        84 
Other Intangible Amortization   8    14        22 

 

(1)Depreciation includes amounts recorded within Cost of sales in the Consolidated Statements of Operations.

 

Reconciliation of Non-GAAP Measures

 

Adjusted EBITDA and Adjusted net income are not recognized terms under GAAP and do not purport to be alternatives to Net income as a measure of operating performance. We present Adjusted EBITDA and Adjusted net income because each is a primary measure used by management to evaluate operating performance. In addition, we present Adjusted net income to measure our overall profitability as we believe it is an important measure of our performance. We believe the presentation of Adjusted EBITDA and Adjusted net income enhances investors' overall understanding of the financial performance of our business.

 

Adjusted EBITDA is based on "Consolidated EBITDA," a measure which is defined in our senior credit facilities and used in calculating financial ratios in several material debt covenants. Adjusted EBITDA is defined as Net income less Income from discontinued operations, net of tax, plus (i) Interest expense and Interest income, net, (ii) Provision for income taxes, (iii) depreciation and amortization and further adjusted to exclude loss on extinguishment of debt, non-cash items and certain other adjustments to Consolidated Net Income permitted in calculating Consolidated EBITDA under our senior credit facilities.

 

Adjusted net income is defined as Net income less Income from discontinued operations, net of tax, further adjusted for loss on extinguishment of debt, certain non-cash, non-recurring or unusual items, net of tax.

 

We compensate for the limitations of using non-GAAP financial measures by using them to supplement GAAP results to provide a more complete understanding of the factors and trends affecting the business than GAAP results alone. Because not all companies use identical calculations, our presentation of Adjusted EBITDA and Adjusted net income may not be comparable to other similarly titled measures of other companies.

 

8

 

 

Adjusted EBITDA and Adjusted net income have limitations as analytical tools and should not be considered in isolation or as substitutes for analyzing our results as reported under GAAP. Some of these limitations are:

 

·Adjusted EBITDA and Adjusted net income do not reflect changes in, or cash requirements for, our working capital needs;

 

·Adjusted EBITDA does not reflect our interest expense, or the requirements necessary to service interest or principal payments on our debt;

 

·Adjusted EBITDA does not reflect our income tax expenses or the cash requirements to pay our taxes; and

 

·Adjusted EBITDA and Adjusted net income do not reflect historical cash expenditures or future requirements for capital expenditures or contractual commitments; and although depreciation and amortization charges are non-cash charges, the assets being depreciated and amortized will often have to be replaced in the future, and Adjusted EBITDA does not reflect any cash requirements for such replacements.

 

Adjusted EBITDA

 

The following table presents a reconciliation of Net income and Income from Continuing Operations, the most directly comparable financial measures under GAAP, to Adjusted EBITDA for the periods presented (amounts in millions):

 

   Three Months Ended   Fiscal Year Ended 
   February 2,
2020
   February 3,
2019
   February 2,
2020
   February 3,
2019
 
Net income (loss)  $78   $92   $452   $394 
Less income from discontinued operations, net of tax       2    1    3 
Income (loss) from continuing operations   78    90    451    391 
Interest expense, net   27    29    110    129 
Provision for income taxes   32    30    162    135 
Depreciation and amortization (1)   30    28    113    106 
Loss on extinguishment & modification of debt (2)               69 
Restructuring and separation charges (3)   6        8    9 
Stock-based compensation   5    7    23    26 
Acquisition and integration costs (4)       1    5    6 
Other   1    2    1     
Adjusted EBITDA  $179   $187   $873   $871 

 

(1)Depreciation and amortization includes amounts recorded within Cost of sales in the Consolidated Statements of Operations.

(2)Represents the loss on extinguishment of debt including the premium paid to repurchase or call the debt as well as the write-off of unamortized deferred financing costs, original issue discount, and other assets or liabilities associated with such debt. Also includes the costs of debt modification.

(3)Represents the costs incurred for separation activities and strategic alignment of workforce.

(4)Represents the costs incurred in the acquisition and integration of business acquisitions, including A.H. Harris.

 

9

 

 

Adjusted Net Income

 

The following table presents a reconciliation of Net income and Income from Continuing Operations, the most directly comparable financial measures under U.S. GAAP, to Adjusted net income for the periods presented (amounts in millions):

 

   Three Months Ended   Fiscal Year Ended 
   February 2,
2020
   February 3,
2019
   February 2,
2020
   February 3,
2019
 
Net income (loss)  $78   $92   $452   $394 
Less income from discontinued operations, net of tax       2    1    3 
Income (loss) from continuing operations   78    90    451    391 
Plus: Provision for income taxes   32    30    162    135 
Less: Cash income taxes   (18)   (4)   (53)   (13)
Plus: Amortization of acquisition-related intangible assets (other than software)   6    6    23    22 
Plus: Loss on extinguishment & modification of debt (1)               69 
Plus: Restructuring and separation charges (2)   6        8    9 
Plus: Acquisition and integration costs (3)       1    5    6 
Adjusted Net Income  $104   $123   $596   $619 
                     
Diluted weighted average common shares outstanding   162,040    175,593    166,989    181,929 
Adjusted net income per share – diluted  $0.64   $0.70   $3.57   $3.40 

 

(1)Represents the loss on extinguishment of debt including the premium paid to repurchase or call the debt as well as the write-off of unamortized deferred financing costs, original issue discount, and other assets or liabilities associated with such debt. Also includes the costs of debt modification.
(2)Represents the costs incurred for separation activities and strategic alignment of workforce.
(3)Represents the costs incurred in the acquisition and integration of business acquisitions, including A.H. Harris.

 

10

 

 

 

 

Exhibit 99.2

 

FINANCIAL RESULTS AND COMPANY OVERVIEW 2019 Fourth - Quarter and Fiscal Year Performance March 17 th , 2020

 

2 Disclaimer Forward - Looking Statements and Preliminary Results This presentation includes “forward - looking statements” within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. Forward - looking statements are based on management’s beliefs and assumptions and information currently available to management and are subject to known and unknown risks and uncertainties, many of which may be beyond o ur control. We caution you that the forward - looking information presented in this presentation is not a guarantee of future results , and that actual results may differ materially from those made in or suggested by the forward - looking information contained in this presen tation. Forward - looking statements generally can be identified by the use of forward - looking terminology such as “may,” “plan,” “seek,” “comfortable with,” “will,” “expect,” “intend,” “estimate,” “anticipate,” “believe” or “continue” or the negative thereof or var iations thereon or similar terminology. A number of important factors could cause actual events to differ materially from those contained in or imp lied by the forward - looking statements, including, without limitation, the impact of the coronavirus disease 2019 outbreak “COVID - 19” on the maintenance, repair and operations and specialty construction sectors, in general, and the financial position and operating r esu lts of our company, in particular, which cannot be predicted and could change rapidly and those “Risk factors” in our annual report on F orm 10 - K, for the fiscal year ended February 2, 2020, filed on March 17, 2020 and those described from time to time in our, and HD Supply, Inc.’s, other filings with the U.S. Securities and Exchange Commission (the “SEC”), which can be found at the SEC’s website www.sec.gov. Any forward - looking information presented herein is made only as of the date of this presentation, and we do not undertake any oblig ation to update or revise any forward - looking information to reflect changes in assumptions, the occurrence of unanticipated events, or o therwise. Estimates for February 2020 Net sales are preliminary estimates and are subject to risks and uncertainties, including, among others, changes in connection with quarter - end and year - end adjustments . Any variation between HD Supply’s actual results and the preliminary financial data set forth herein may be material. Non - GAAP Financial Measures HD Supply supplements its financial results that are determined in accordance with accounting principles generally accepted i n t he United States of America (“GAAP”) with non - GAAP measurements, including Adjusted EBITDA, Adjusted net income, Adjusted net income per diluted share, Net debt and Free cash flow . This supplemental information should not be considered in isolation or as a substitute for the GAAP measurements presented herein. Additional information regarding Adjusted EBITDA, Adjusted net income, Adjusted net income per diluted share, Net debt, and Free cash flow referred to in this presentation is included at the end of this presentation under “Capital Structure Overview” and “Reconciliation of Non - GAAP Measures.”

 

3 COVID - 19 Update Focused on Controllable Execution x Robust Action Plan x Cross - Functional Response Team x Business Continuity Plans x Communications Outreach to Associates and Customers x Restricted Travel x Self - Quarantine Resources x Heightened Hygiene Standards x Additional Hand Sanitizer Stations x Increased DC Cleanings x Daily Truck Cleanings

 

4 Financial Highlights Focused on Controllable Execution 1 Organic, 52 - week sales, Adj. EBITDA and Adj. Net Income per Diluted Share adjusted for the 53 rd week in 2018; see appendix slide 18 for more information 2 See appendix slides 19 and 20 for a reconciliation of Adjusted EBITDA, Adjusted net income and Adjusted net income per diluted share to Net income and Income from continuing operations 3 Free Cash Flow is defined as Operating Cash Flow of $180M and $677M, less Capital Expenditures of $17M and $106M, respectivel y, in Q4’19 and FY’19 x +3% Sales Growth 1 Versus Prior Year (“VPY”) x $78M Net Income , a decrease of $14M VPY x +3% Adjusted EBITDA 2 Growth 1 VPY x +$0.01 Adjusted Net Income per Diluted Share 2 Growth 1 VPY x $ 163M Free Cash Flow 3 Q4’19 FY’19 x +3% Net Sales Growth 1 VPY x $452M Net Income , an increase of $ 58M VPY x +2% Adjusted EBITDA 2 Growth 1 VPY x +$0.24 Adjusted Net Income per Diluted Share 2 Growth 1 VPY x $571M Free Cash Flow 3

 

5 Expanding Products and Services; Delivering Synergies and Returns Facilities Maintenance: Areas of Focus Topic Improvement 3. National Accounts 4. M&A Differentiated Value Proposition Driving Compliance Focused on Shareholder Value Creation Dependability, Investment and Readiness 2. Order Fulfillment Technology Development; Tailored Marketing and More Personalized Relationships 1. Improved Customer Experience

 

6 Transaction On Track for Completion by Middle of Fiscal 2020 Transaction Update Transaction Structure Timing / Other Matters Financial Implications ▪ Pro - rata distribution expected to be tax - free to HD Supply shareholders for U.S. tax purposes ▪ Both companies’ shares expected to be listed on national securities exchanges ▪ Closing subject to customary conditions, including final HD Supply Board approval ▪ Both companies expected to be well - capitalized and well - positioned for growth ▪ Targeting high non - investment grade credit rating at both companies within 2 - 3x Net debt to LTM EBITDA ▪ Expecting dis - synergies of 30 - 60 basis points of sales for Facilities Maintenance and an estimated 50 - 80 basis points for White Cap, including public company costs, sourcing, and technology ▪ Positions both companies for success with best - in - class margin profiles ▪ Strong cash flow generation with attractive opportunities for capital deployment ▪ The separation is expected to be completed by the middle of Fiscal 2020, subject to customary closing conditions ▪ Separation planning and implementation underway with significant progress made on talent alignment, systems, and processes ▪ Form 10 Registration Statement filed with the SEC in early 2020 ▪ Investor meetings to be held in the middle of 2020, subject to travel restrictions

 

7 ($ in millions, except per share data) Net Sales 1 For 53 rd week adjustments in 2018, see appendix slide 18 for more information 2 See appendix slides 19 and 20 for a reconciliation of Adjusted EBITDA, Adjusted net income and Adjusted net income per dilute d s hare to Net income and Income from continuing operations +3.2% Net Sales Growth 1 in Q4’18 Q4’19 Financial Results $1,446 $1,385 Gross Profit Gross Margin % Operating Income Adj. EBITDA % Op . Income % $ 572 $545 39 .6 % 39.4 % $ 187 $ 179 $149 $ 137 12.9% 12.9 % 9.9 % - 5% - 20 BPs - - $8 $123 $ 104 - 8 % Q4’18 Adj. EBITDA 2 VPY Adj. Net Income 2 10.3 % Q4’19 $0.70 $ 0.64 - $0.06 Per Diluted Share 2 - $61 - $19 Net Income $92 $78 - $14 $0.52 $0.48 - $ 0.04 Per Diluted Share - 40 BPs +3% 1 Adjusted for 53 rd Week 1 +$5 +$ 43 +$0.01 Ex. 53 rd Week

 

8 ($ in millions, except per share data) Net Sales 1 Organic sales, on a 52 - week basis, exclude $24M of A.H. Harris sales 2 For 53 rd week adjustments in 2018, see appendix slide 18 for more information 3 See appendix slides 19 and 20 for a reconciliation of Adjusted EBITDA, Adjusted net income and Adjusted net income per diluted share to Net income and Income from continuing operations +3.4% Net Sales Growth 1 in FY’19 FY’19 Financial Results $6,047 $6,146 Gross Profit Gross Margin % Operating Income Adj. EBITDA % Op . Income % $2,375 $2,403 39 .3 % 39.1 % $ 871 $ 873 $724 $ 723 14.4% 14.2 % 11.8 % +1% - 20 BPs - 20 BPs +$2 $619 $ 596 - $1 FY’18 Adj. EBITDA 3 VPY Adj. Net Income 3 12.0 % FY’19 $3.40 $ 3.57 +$0.17 Per Diluted Share 3 +$ 99 - $23 Net Income $ 394 $452 +$58 $2.17 $2.71 +$0.54 Per Diluted Share - 20 BPs +3% 1 Adjusted for 53 rd Week 2 +$ 203 Ex. 53 rd Week +$15 +$0.24 Organic

 

9 Growth in Both Business Units Q4’19 and FY’19 Segment Performance Adj. EBITDA, As Reported Net Sales ($ in millions) Q4’19 $702 $114 Q4’18 $736 $ 124 VPY 1 + 3 % FY’19 $3,130 $546 FY’18 $ 546 +3% $3,089 VPY 1 Q4’19 $685 $65 Q4’18 $711 $63 VPY 1 +4% FY’19 $3,019 $327 FY’18 $ 325 +4% $2,961 VPY 1 Note: Organic sales in FY’19 exclude A.H. Harris contribution through March 4, 2019 1 Growth rates adjusted for 53 rd Week in Q4’18; please see slide 18 for more information Adj. EBITDA 1 on a 52 - week Basis $114 $ 114 - $546 $ 536 +2% $65 $60 +8% $327 $ 322 +2% Ex. 53 rd Week Ex. 53 rd Week Ex. 53 rd Week Ex. 53 rd Week Organic

 

10 Q4’19 and FY’19 Taxes and Cash Flow ▪ Cash Taxes $18 in Q4’19 $53 in FY’19 ▪ $2,057 Net Debt 1 at the End of Q4’19 2.4x Net Debt to Adj. EBITDA ▪ Free Cash Flow $163 in Q4’19 $571 in FY’19 ▪ Capital Expenditures $17 in Q4’19 $106 in FY’19 1 Reconciled on slide 15. “Net Debt” defined as Total Debt before unamortized deferred financing costs and discounts, plus letters of credit, less cash an d cash equivalents Full Federal Tax Payer in 2020 ($ in millions)

 

11 +8.8% February Average Daily Sales Growth Q4’19 Monthly Average Daily Sales (%) 9.6% 16.1% Feb. 4.1% 14.2% (4.9%) ’18 Selling Days 28 1 20 20 (8.6%) Facilities Maintenance Construction & Industrial (Preliminary) 2.5% (6.8%) 12.7% 2.5% 2.4% 18 14.6% 8.1% Nov. Jan. Prior Year $546 $460 $403 HD Supply Net Sales $436 16.7% 10.3% Q4’19 6.0% 10.5% $423 3.2% 19.3% $565 9.2% 25.2% $455 7.0% 23.1% $426 HD Supply Average Daily Sales Growth VPY ’19 Selling Days 24 20 19 18 Current Year 1 Contains an extra selling week as compared with other years. Fiscal 2018 contains 53 weeks Note: Contains forward - looking information; please see Disclaimer on slide 2 24 20 19 18 ’20 Selling Days Q1’20 6.8% organic 8.8% ($ in millions) 6.8% 9.5% organic 4.3% organic 2.2% organic Combined Dec. & Jan. Growth Rates Facilities Maintenance: ~3% Constr. & Industrial : ~4% HD Supply: ~4% Dec.

 

12 Q&A Q&A

 

13 Concluding Remarks Priority is Health and Safety of our Associates and Customers ▪ Solid End to 2019 and Good Start to 2020 ▪ No 2020 Guidance Provided at this Time ▪ Team is Preparing to Deal with Widespread Effects of COVID - 19 ▪ Priority is the Health and Safety of our Associates and Customers

 

14 Q&A APPENDIX

 

15 2.4x Net Debt to Adjusted EBITDA Capital Structure Overview Debt as of Feb. 2, 2020 Senior ABL Facility Term B - 5 Loans Oct. 2018 Senior Unsecured Notes Outstanding Debt 4 Less: Cash and Cash Equivalents Net Debt Balance Maturity 1 Represents the stated rate of interest, without including the effect of discounts or interest rate swaps 2 Subject to applicable redemption price terms 3 Ratings per Moody’s Investor’s Service (“Moody’s”) and S&P Global Ratings (“S&P”). Corporate family ratings shown for Outsta nd ing Debt. 4 Excludes unamortized discounts of $3 and unamortized deferred financing costs of $18 ($ in millions) Interest Rate 1 Soft Call Date 2 3.15% 3.40% 5.375% 4/5/ 22 10/17/ 23 10/15/ 26 n/a Now 10/15/ 21 Plus: Letters of Credit $260 750 $2,057 (34) $2,067 1,057 24 Moody’s / S&P 3 Not Rated, BBB – Ba1, BBB – Ba2, BB – Ba1 Stable, BB+ Stable

 

16 8.1% 8.8% 6.1% 0.2% 1.9% 2.1% 1.6% 2.6% 1.7% 2.5% (6.8%) 12.7% 8.8% 2.2% 8.6% 1 2 3 4 5 6 7 8 9 10 11 12 13 +8.8% Preliminary Average Daily Sales Growth in February Average Daily Sales – Organic 1 (VPY%) (Preliminary) Facil . Maint . Const. & Ind. HD Supply Organic Average Daily Sales (“ADS”) Growth VPY 1 Total ADS Growth VPY% Organic ADS Growth VPY% (VPY%) 1 Adjusted for acquisitions and selling days, but not the 53 rd week in FY’18. Gray figures denote total average daily sales growth VPY; black numbers represent organic average daily sales g rowth VPY 2 Contains an extra selling week as compared with other years. Fiscal 2018 contains 53 weeks Note : Contains forward - looking information; please see Disclaimer on slide 2 FY’19 ’20 Selling Days ’19 Selling Days 20 20 25 19 20 24 20 19 25 18 19 24 20 20 20 25 20 19 24 20 19 25 18 20 28 2 20 ’18 Selling Days 20 20 25 19 20 24 20 19 25 18 19 24 20 6.0% 6.0% 7.9% (2.4%) 2.2% 3.0% 1.2% 1.7% 2.7% 2.5% (4.9%) 9.6% 4.1% (2.4%) 11.6% 4.3% 2.8% 1.7% 1.0% 2.0% 3.5% 0.6% 2.4% (8.6%) 16.1% 14.2% FY’20 Combined Dec. & Jan. Growth Rates Facilities Maintenance: ~3% Constr. & Industrial : ~4% HD Supply: ~4% Feb. Mar. Apr. May Jun. Jul. Aug. Sep. Oct. Nov. Dec. Jan. Feb.

 

17 $460M Preliminary February Sales Monthly Net Sales ($) (Preliminary) Facil . Maint . Const. & Ind. ’20 Selling Days ’19 Selling Days 20 20 25 19 20 24 20 19 25 18 19 24 20 20 20 25 20 19 24 20 19 25 18 20 28 2 20 ’18 Selling Days 20 20 25 19 20 24 20 19 25 18 19 24 20 $423M $460M $610M $464M $521M $639M $521M $494M $629M $436M $403M $546M $460M $400M 1 2 3 4 5 6 7 8 9 10 11 12 13 organic $225 $238 $309 $228 $268 $334 $266 $249 $311 $216 $205 $281 $234 $198 $222 $301 $237 $253 $305 $255 $245 $318 $221 $198 $266 $226 HD Supply Net Sales Total Net Sales Organic Net Sales ($ in millions) 1 Contains an extra selling week as compared with other years . Fiscal 2018 contains 53 weeks Note : Contains forward - looking information; please see Disclaimer on slide 2 FY’20 FY’19 organic $459M Feb. Mar. Apr. May Jun. Jul. Aug. Sep. Oct. Nov. Dec. Jan. Feb.

 

18 53 rd Week: Net Sales ~$104, Adj. EBITDA ~$13, Adj. Dil. EPS ~$0.07 Items Affecting Comparability ($ in millions, except per share amounts) Q4’18 Q4’19 Versus Prior Year FY’18 FY’19 Versus Prior Year Reported 52 - Week Basis Reported 52 - Week Basis Organic, 52 - Week Basis Reported 53rd Week Adjusted Reported VPY $ VPY % VPY $ VPY % Reported 53rd Week Adjusted Reported A.H. Harris Inorganic Adjusted VPY $ VPY % VPY $ VPY % VPY $ VPY % Net Sales Facil. Maint. $ 736 ($ 53) $ 683 $ 702 ($ 34) (4.6%) $ 19 2.8% $ 3,089 ($ 53) $ 3,036 $ 3,130 - $ 3,130 $ 41 1.3% $ 94 3.1% $ 94 3.1% Const. & Ind. 711 (51) 660 685 (26) (3.7%) 25 3.8% 2,961 (51) 2,910 3,019 (24) 2,995 58 2.0% 109 3.7% 85 2.9% Corp. & Elim. (1) - (1) (2) (1) * (1) * (3) - (3) (3) - (3) - * - * - * HD Supply $ 1,446 ($ 104) $ 1,342 $ 1,385 ($ 61) (4.2%) $ 43 3.2% $ 6,047 $ 5,943 $ 6,146 ($ 24) $ 6,122 $ 99 1.6% $ 203 3.4% $ 179 3.0% Adjusted EBITDA Facil. Maint. $ 124 ($ 10) $ 114 $ 114 ($ 10) (8.1%) - - $ 546 $ 536 $ 546 - - $ 10 1.9% Const. & Ind. 63 (3) 60 65 2 3.2% 5 8.3% 325 322 327 2 0.6% 5 1.6% Corp. & Elim. - - - - - * 0 * - - - - * - * HD Supply $ 187 ($ 13) $ 174 $ 179 ($ 8) (4.3%) $ 5 2.9% $ 871 $ 858 $ 873 $ 2 0.2% $ 15 1.7% HD Supply $ 0.70 ($ 0.07) $ 0.63 $ 0.64 ($ 0.06) (8.6%) $ 0.01 1.6% $ 3.40 $ 3.33 $ 3.57 $ 0.17 5.0% $ 0.24 7.2% * not meaningful Adjusted Net Income per Diluted Share ($ 104) ($ 10) (3) - ($ 13) ($ 0.07)

 

19 Reconciliation of Non - GAAP Measures: Net Income to Adjusted EBITDA ($ in millions) 1 Depreciation and amortization includes amounts recorded within Cost of sales in the Consolidated Statements of Operations 2 Represents the loss on extinguishment of debt including the premium paid to repurchase or call the debt as well as the write - off of unamort ized deferred financing costs, original issue discount, and other assets or liabilities associated with such debt. Also includes the costs of debt modification 3 Represents the costs incurred for separation activities and strategic alignment of workforce 4 Represents the costs incurred in the acquisition and integration of business acquisitions, including A.H. Harris Twelve Months Three Months Ended Ended Feb. 2, 2020 Feb. 3, 2019 Feb. 2, 2020 Feb. 3, 2019 Net income $78 $92 $452 $394 Less income from discontinued operations, net of tax - 2 1 3 Income from continuing operations 78 90 451 391 Interest expense, net 27 29 110 129 Provision for income taxes 32 30 162 135 Depreciation and amortization 1 30 28 113 106 Loss on extinguishment & modification of debt 2 - - - 69 Restructuring and separation charges 3 6 - 8 9 Stock - based compensation 5 7 23 26 Acquisition and integration costs 4 - 1 5 6 Other 1 2 1 - Adjusted EBITDA $179 $187 $873 $871

 

20 Reconciliation of Non - GAAP Measures: Net Income to Adjusted Net Income and Adjusted Net Income Per Share ($ in millions, except share and per share amounts) 1 Represents the loss on extinguishment of debt including the premium paid to repurchase or call the debt as well as the write - off of unamort ized deferred financing costs, original issue discount, and other assets or liabilities associated with such debt. Also includes the costs of debt modification 2 Represents the costs incurred for separation activities and strategic alignment of workforce 3 Represents the costs incurred in the acquisition and integration of business acquisitions, including A.H. Harris Twelve Months Three Months Ended Ended Feb. 2, 2020 Feb. 3, 2019 Feb. 2, 2020 Feb. 3, 2019 Net income $78 $92 $452 $394 Less income from discontinued operations, net of tax - 2 1 3 Income from continuing operations 78 90 451 391 Provision for income taxes 32 30 162 135 Cash paid for income taxes (18) (4) (53) (13) Amortization of acquisition - related intangible assets (other than software) 6 6 23 22 Loss on extinguishment & modification of debt 1 - - - 69 Restructuring and separation charges 2 6 - 8 9 Acquisition and integration costs 3 - 1 5 6 Adjusted Net Income $104 $123 $596 $619 Weighted average common shares outstanding (in thousands) Basic 161,436 174,831 166,405 181,099 Diluted 162,040 175,593 166,989 181,929 Adjusted Net Income Per Share - Basic $0.64 $0.70 $3.58 $3.42 Adjusted Net Income Per Share - Diluted $0.64 $0.70 $3.57 $3.40

v3.20.1
Cover
Mar. 16, 2020
Document Information [Line Items]  
Document Type 8-K
Amendment Flag false
Document Period End Date Mar. 16, 2020
Entity File Number 001-35979
Entity Registrant Name HD SUPPLY HOLDINGS, INC.
Entity Central Index Key 0001573097
Entity Tax Identification Number 26-0486780
Entity Incorporation, State or Country Code DE
Entity Address, Address Line One 3400 Cumberland Boulevard
Entity Address, City or Town Atlanta
Entity Address, State or Province GA
Entity Address, Postal Zip Code 30339
City Area Code 770
Local Phone Number 852-9000
Written Communications false
Soliciting Material false
Pre-commencement Tender Offer false
Pre-commencement Issuer Tender Offer false
Title of 12(b) Security Common stock, $0.01 par value per share
Trading Symbol HDS
Security Exchange Name NASDAQ
Entity Emerging Growth Company false
HD Supply, Inc. (Total HDS)  
Document Information [Line Items]  
Document Type 8-K
Amendment Flag false
Document Period End Date Mar. 16, 2020
Entity File Number 333-159809
Entity Registrant Name HD SUPPLY, INC.
Entity Central Index Key 0001465264
Entity Tax Identification Number 75-2007383
Entity Incorporation, State or Country Code DE
Entity Address, Address Line One 3400 Cumberland Boulevard
Entity Address, City or Town Atlanta
Entity Address, State or Province GA
Entity Address, Postal Zip Code 30339
City Area Code 770
Local Phone Number 852-9000
Written Communications false
Soliciting Material false
Pre-commencement Tender Offer false
Pre-commencement Issuer Tender Offer false
Entity Emerging Growth Company false