Orchard Supply Hardware Stores Corporation (Nasdaq:OSH), a neighborhood hardware and garden store focused on paint, repair and the backyard, today announced financial results for the second quarter of fiscal 2012 ended July 28, 2012.
Second Quarter Fiscal 2012 Financial Results
- Second quarter net sales were $194.1 million compared to $196.4 million in the prior year period. Comparable store sales (1) for the quarter increased 0.9%.
- Net loss in the second quarter of fiscal 2012 was $26.7 million compared to net income of $3.9 million in the second quarter of fiscal 2011. Net loss in the 2012 quarterly period includes $26.8 million of non-cash charges comprised of $18.4 million related to the establishment of a valuation allowance for the Company’s deferred tax assets; $7.2 million of store impairment charges; and the write-off of $1.2 million of unamortized transaction costs associated with the pay-off of the Company’s Real Estate Secured Term Loan.
- Non-GAAP Adjusted EBITDA for the quarter was $14.9 million compared to $19.7 million in the second quarter of fiscal 2011. Adjusted EBITDA for the quarterly period includes approximately $1.6 million of incremental costs associated with the effect of having transitioned to a publicly traded company independent from Sears Holdings Corporation and approximately $0.7 million of rent associated with sale-leaseback properties owned by the Company in the prior year period and for which the Company did not pay rent. (see “Non-GAAP Financial Measures” below for a discussion of this non-GAAP measure and reconciliation to its most directly comparable GAAP financial measure and further information on its uses and limitations).
- The Company further reduced long-term debt during the second quarter. As of July 28, 2012, total debt was $170.6 million compared to $254.2 million at July 30, 2011. Subsequent to the close of the second quarter, the Company paid down an additional $7.6 million of debt.
Mark Baker, President and Chief Executive Officer, stated, “We are pleased to have generated positive comp store sales in an economically challenging and highly competitive promotional environment. We continue to make progress against our initiatives to reposition the business, strengthen our financial condition and drive profitable long-term growth. During the period, we monetized Orchard assets through a sale-leaseback transaction on six stores, which provided us with added resources to further reduce debt and invest in our new store format. Most recently, we signed a non-binding commitment letter to refinance our Senior Secured Credit Facility and we’re exploring options to refinance our long-term debt.”
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