Gross profit for the second quarter of fiscal 2013 increased by $67 million, or 11 percent, to $661 million compared to $594 million for the second quarter of fiscal 2012. Gross profit for the second quarter of fiscal 2013 was 29.3 percent of net sales compared to 28.8 percent of net sales for the second quarter of fiscal 2012.

Business and financial highlights

• Continued net sales growth in all four of the company’s largest businesses: Facilities Maintenance, Waterworks, Power Solutions, and White Cap.

• Achieved 14 percent adjusted EBITDA growth while simultaneously investing in the company’s future growth, including:

- Distribution center expansions and additional associates to support growth initiatives in the Facilities Maintenance business;

- Sales training enhancements and investments in storm drainage, meters, plant works and fusible plastics in the Waterworks business;

- Branch expansions, a new location serving oil and gas activities, and additional category management and marketing associates in the Power Solutions business; and,

- New dedicated safety catalog and additional sales associates in the White Cap business

“We continue to deliver above market revenue growth in all of our primary business units,” stated Joe DeAngelo, CEO of HD Supply. “The fiscal 2013 second quarter was another strong performance for HD Supply despite limited non-residential and municipal end market growth in addition to unusually cooler and wetter weather affecting outdoor construction and HVAC product sales in various parts of the country. We continue to deliver on our controllable execution and growth initiatives to drive growth regardless of the market environment.”

Operating income increased $47 million, or 46 percent, during the second quarter of fiscal 2013 as compared to the second quarter of fiscal 2012.The improvement was due to higher net sales and gross profit and a reduction in depreciation and amortization expense. Operating income as a percentage of net sales increased approximately 160 basis points during the second quarter of fiscal 2013 as compared to the second quarter of fiscal 2012.The improvement was driven by the reduction in depreciation and amortization expense and improvements in gross margins.

Year-to-date results

Net sales for the first half of fiscal 2013 increased $430 million, or 11 percent to $4.3 billion, as compared to $3.9 billion the first half of fiscal 2012. Gross profit for the first half of fiscal 2013 increased by $142 million, or 13 percent, to $1.3 billion compared to $1.1 billion for the first half of fiscal 2012. Gross profit for the first half of fiscal 2013 was 29.1 percent of net sales versus 28.7 percent of net sales for the first half of fiscal 2012.

Operating income for the first half of fiscal 2013 was $250 million, an improvement of $104 million compared to operating income of $146 million for the first half of fiscal 2012. The improvement in operating income reflects sales growth of 11 percent and an approximately 170 basis point decline in operating expenses as a percent of net sales.

Net loss for the first half of fiscal 2013 was $203 million, which included an $87 million loss on extinguishment and modification of debt. Excluding the loss on extinguishment and modification of debt in both years and the income from discontinued operations in the first half of fiscal 2012, the net loss in the first half of fiscal 2013 improved $96 million as compared to the prior period.

Adjusted EBITDA for the first half of fiscal 2013 increased 18 percent to $382 million from $325 million in the first half of fiscal 2012. This increase includes an unfavorable impact of $12 million resulting from the 2012 amendment and extension of the strategic purchase agreement between our Crown Bolt business and The Home Depot. Adjusted EBITDA for the first half of fiscal 2013 increased to 8.8 percent of net sales versus 8.3 percent of net sales for the first half of fiscal 2012.

About HD Supply

HD Supply is one of the largest industrial distribution companies in North America. With more than 600 locations across 46 states and nine Canadian provinces, the company’s approximately 15,000 associates provide services including jobsite delivery, will call or direct-ship options, diversified logistics and innovative solutions that contribute to customer success.