Orchard Supply Hardware Stores Corporation (Nasdaq:OSH), a specialty retailer focused on the consumer segment of the home improvement market, today announced financial results for the fourth quarter and fiscal year ended January 28, 2012.
Fiscal Year 2011 Highlights
- Completed spin-off from Sears, becoming an independent, publicly-traded company
- Strengthened the Company’s financial position by reducing long-term debt
- Began implementation of a turnaround strategy to restore growth
- Opened a new, productive store format that will be expanded in 2012
Fiscal Year 2011 Financial Results
Full-year net sales were $660.5 million compared to $660.7 million in fiscal 2010. Comparable store sales (1) decreased 0.6%, reflecting an increase in comparable average ticket, which was offset by a decline in comparable transaction volume.Full year net loss was $14.5 million and includes $18.1 million of pre-tax, non-cash loss on sale of real property and store impairment charges. This compares to net income of $8.7 million in fiscal year 2010. Fiscal 2011 Non-GAAP Adjusted EBITDA (see reconciliation of Non-GAAP Adjusted EBITDA to net loss, below) was $45.0 million compared to $69.4 million in fiscal 2010. The year-over-year decline was primarily driven by reductions in gross margin and investments in the Company’s turnaround strategy, including costs associated with establishing and expanding its corporate support infrastructure and strengthening its financial position. Mark Baker, President and Chief Executive Officer, stated, “During fiscal 2011, we initiated a turnaround strategy designed to restore growth and increase Orchard’s market share. As part of our strategy, we enhanced our organizational structure with key additions to the management team, we improved our in-stock inventory levels on core products while reducing overall inventory levels, and we strengthened the service and shopping environment in our stores. We also took actions to improve the Company’s financial position, including the strategic decision to execute sale-leaseback transactions on five Orchard properties, which generated $57.8 million of proceeds that were used to pay down debt.”