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First-quarter record of $2. 2 billion, up 8. 9% from last year’s 42. 0% increase
Record net revenue source of $119. 8 million in the first quarter, up 13. 7% from last year’s 191. 2% increase
Accumulated dividend to shareholders of $135. 6 million, an accrual of 24. 4% over last year’s accrual of 104. 1%
Ranked No. 1 in its category in Entrepreneur’s annual Franchise 500® 2022 ranking
OAK BROOK, Ill. , May 18, 2022 /PRNewswire/ — Ace Hardware Corporation (“Ace” or the “Company”) today reported record profit of $2. 2 billion for the first quarter of 2022, a cumulative of $181. 8 million, or 8. 9%, during the first quarter of 2021. Net income source $119. 8 million for the first quarter of 2022, an accumulation of $14. 4 million compared to the first quarter of 2021. The accumulation in net income includes a $21. 4 million gain from the sale of the former retail store in Gainesville, Georgia. Help Desk (“CSR”). Excluding this profit, net profit source for the quarter $98. 4 million, $7. 0 million less than in the first quarter of 2021.
“Our earnings and earnings increases in the first quarter bring our cumulative two-year expansion to nearly 51% and 205%, respectively,” said John Venhuizen, president and chief executive officer. “Revenue expansion for the 54 new outlets we added in the genuine and gradual first quarter. The rest of the first-quarter earnings expansion, however, is not the result of continued inflation. “
The approximately 3500 Ace stores that are percentage-aware of retail sales reported a 1. 4% increase in same-store retail sales in the U. S. Same-store transactions decreased 7. 8%.
revenues
Consolidated profit for the quarter ended April 2, 2022 totaled $2. 2 billion. Total wholesale profit was $2. 1 billion, an increase of $187. 9 million, or 10. 1%, from the prior year first quarter. Increases were noted in most departments, with outdoor electrical equipment, lawn and garden, and plumbing posting the biggest gains. Wholesale product revenue from new domestic retail outlets activated from January 2021 through March 2022 generated $57. 3 million in incremental revenue in the first quarter of 2022, while wholesale product revenue decreased to 11. 9 million in the first quarter of 2022. first quarter as national retail outlets canceled subscriptions. Domestic same-store wholesale sales increased to $136. 0 million in the quarter. All this accumulation is the result of wholesale inflation of the value estimated at 13. 0%. The company’s subsidiary Ace International Holdings, Ltd. posted a $10. 3 million decrease in wholesale profit compared to the first quarter of 2021, while Ace Wholesale Holdings LLC posted a $13. 8 million increase in wholesale profit compared to the first quarter of 2021. with the first quarter of 2021.
Total retail income for the quarter of $156. 6 million, a decrease of $6. 1 million, or 3. 7%, from the prior year first quarter. Ace Retail Holdings LLC (“ARH”) had a retail profit of $153. 0 million in the first quarter of 2022, down $4. 1 million, or 2. 6%, compared to the first quarter of 2021. The Westlake Ace Hardware (“Westlake”) chain saw a 5. 7% decline in same-store sales, while the Great Lakes Ace Hardware (“GLA”) chain saw a 6. 4% decline in same-store sales in stores in the quarter. New retail outlets opened across Westlake and GLA in the prior year generated an additional $5. 0 million of revenue in the first quarter of 2022, partially offsetting minimum comparable store sales. Westlake and GLA together operated 210 outlets at the end of the first quarter of 2022, compared to 209 outlets at the end of the first quarter of 2021. Ace Ecommerce Holdings LLC retail profit of $3. 6 million in the first quarter of 2022 Generates a minimum of $2. 0 million, or 35. 7%, as of the first quarter of 2021.
Ace added 50 new domestic outlets in the first quarter of 2022 and canceled 11 outlets. Globally, Ace added 54 retail outlets in the first quarter of 2022 and canceled 11, bringing the number of international retail outlets to 5626 by the end of the first quarter of 2022.
Gross profit
Wholesale gross profit for the 3 months ended April 2, 2022 $262. 0 million, a cumulative of $18. 4 million during the first quarter of 2021. Wholesale gross margin percentage 12. 7% of wholesale revenue in the first quarter of 2022, compared to 13. 0%. in the first quarter of 2021. La reduction in wholesale gross margin percentage basically due to an accumulation in LIFO expenses that drove higher supplier costs due to inflation and a reduction in the budget obtained through suppliers.
Retail gross profit for the 3 months ended April 2, 2022 was $73. 0 million, a decrease of $3. 1 million from the first quarter of 2021. in the first quarter of 2021. La decrease in the percentage of retail gross margin was mainly due to product diversity and the liquidation of non-public protective equipment. For ARH, retail gross margin is based on the company’s product wholesale acquisition charge, not the charge to obtain ARH which includes a company’s profit margin.
Expenses and others
Wholesale operating expenses increased to $15. 8 million, or 10. 9%, through the first quarter of 2021. This accumulation is due to the higher prices of hard work in the warehouses due to the accumulation of personnel in anticipation of the spring sales season. Wholesale operating expenses as a percentage of wholesale revenue remained unchanged at 7. 8% in the first quarter of 2022 and 2021.
Retail operating expenses increased $6. 1 million, or 9. 9%, compared to the first quarter of 2021. This accumulation is basically due to an expected accumulation in the store payroll, as well as expenses incurred similar to the new points of sale opened in 2021. Retail operating expenses as a percentage of retail revenue increased to 43. 3% in the first quarter of 2022, from 37. 9% in the first quarter of 2021.
During the first quarter, the Company sold its CSR in Gainesville, Georgia and posted a profit of $21. 7 million which is classified as Other Revenue, Net.
Balance and cash flow
Accounts receivable increased to $116. 5 million in the first quarter of 2021 due to higher sales volumes.
Inventories increased to $216. 5 million in the first quarter of 2021 due to the intentional accumulation of stock as a hedge against supplier shortages and to increase filling rates for our Ace owners.
Long-term debt, adding up existing maturities, decreased $4. 8 million through the first quarter of 2021. At the end of the first quarter of 2022, long-term debt consisted of a remarkable $121. 9 million in the revolving credit facility, $37. 6 million in Westlake facility and $32. 9 million owed to former retailers.
About Ace Hardware
Ace Hardware is the world’s largest retail-owned hardware cooperative with more than 5600 proprietary and operating hardware retail outlets in approximately 65 countries. Headquartered in Oak Brook, Illinois, Ace and its subsidiaries operate an extensive network of distribution centers in the United States and have distribution functions in Ningbo, China; Santa Catarina, Mexico; Colon, Panama; and Dubai, United Arab Emirates. Since 1924, Ace has been part of local communities around the world and is known as the place where other people of useful hardware meet. For more information, visit acehardware. com or newsroom. acehardware. com.
Contacts:
Shareholder/Investor Inquiries: William Guzik, Executive Vice President, Chief Financial Officer and Chief Risk Officer630-990-3325, guzik@acehardware. com
Media Inquiries: Jeff Gooding, Vice President of Consumer Marketing 630-990-3600, media@acehardware. com
ACE HARDWARE CORPORATION
CONSOLIDATED INCOME STATEMENTS
(Unaudited, in millions)
Three months completed
April 2,
April 3,
2022
2021
(13 weeks)
(13 weeks)
Revenue:
Wholesale revenue
$2,057. 0
$1,869. 1
Retail revenue
156,6
162. 7
Total revenue
2 213,6
2 031,8
Cost of income:
Revenue Wholesale
1 795,0
1 625,5
Retail of revenue
83,6
86,6
Total revenue
1 878,6
1 712,1
Gross profit:
wholesale gross profit
262. 0
243. 6
Retail Gross Profit
73,0
76. 1
Total gross profit
335,0
319. 7
Wholesale Operating Expenses:
Distribution operations expenses
61,5
54,4
Selling and administrative expenses
57. 2
52,6
Commercial success and development spending
42,7
38,6
Retail Operating Expenses
67,8
61,7
Retail pre-opening expenses
0,2
0,6
Total expenses
229. 4
207. 9
Operating income
105. 6
111,8
Interest expense
(4. 0)
(4. 0)
interest income
1. 6
1. 2
Other income, net
21. 7
0,5
Income tax burden
(5. 1)
(4. 1)
Net losses
119,8
105. 4
Less: loss attributable to non-controlling interests
(0. 3)
(0. 1)
Net source of revenue attributable to Ace Hardware Corporation
$120. 1
$105. 5
Distributions of accumulated praise
$135. 6
$109. 0
Cumulative sponsorship distributions for third-party retailers
$130. 9
$106. 1
ACE HARDWARE CORPORATION
CONSOLIDATED BALANCE SHEET
(In millions, shared data)
April 2,
January 1,
April 3,
2022
2022
2021
Assets
(Unaudited)
(Verified)
(Unaudited)
Cash and money equivalents
$47. 5
$37. 6
$37. 4
negotiable securities
56,3
58,0
59,8
Accounts receivable, net provisioning for doubtful accounts of $5. 8, $4. 3 and $6. 1, respectively
853. 6
533. 6
737. 1
Inventories
1 520,0
1 224,3
1 303,5
Expenses paid in advance and existing assets
68,4
63,9
62. 1
Total assets
2 545,8
1 917,4
2 199,9
Ownership and equipment, net
453. 7
453. 4
433. 1
Assets by operating rights, net
493. 4
497. 3
485. 4
Financial assets by right of use, net
73,9
68. 1
35,9
Capital gains and intangible assets, net
99. 1
99,5
100,8
Other assets
118. 3
105. 7
119. 1
Total assets
$3,784. 2
$3,141. 4
$3,374. 2
Commitments and equity
Current maturities of long-term debt
$50. 1
$17. 1
$41. 5
Accounts payable
1 586,1
1 095,2
1 407,9
Refunds payable in cash
174. 4
120,6
138. 9
Refund certificate payable
27. 2
27. 2
26.5
Current operating lease liabilities
68.0
64.3
65,7
Outstanding financial debts
12. 3
10. 9
5.4
Accrued expenses
184.4
282.9
145,9
Total liability
2 102,5
1 618,2
1 831,8
Long-term debt
142. 3
18.6
155.7
Refund certificate payable
103,5
92,8
102. 6
Long-term lease debts
448. 4
456. 3
441. 0
Long-term financial debt
60,7
56,4
30. 0
Other long-term liabilities
94. 2
91,0
76,0
Total responsibilities
2 951,6
2 333,3
2 637,1
Have member retailers:
Class A voting common stock, $1,000 par value, 10,000 shares authorized, 2,680, 2,681 and 2,686 issued and outstanding, respectively
2.7
2.7
2. 7
Class C Non-Voting Common Shares, Face Value of $100, 10,000,000 Authorized Shares, 5,672,347, 5,838,265 and 4,921,646 Issued and Outstanding, respectively,
567. 2
583. 8
492. 2
Class C Non-Voting Common Shares, nominal price of $100, which would possibly be issued to stores for dividend distribution, would be issued 1,752,589, 1,209,075 and 1,779,506 shares, respectively,
175. 2
120,9
178,0
Contributed capital
19. 0
19. 1
18. 9
Retained earnings
58. 1
68,9
31. 6
(Losses) cumulative comprehensive result
(1. 2)
1. 0
1. 3
Equity attributable to Ace member retailers
821. 0
796. 4
724. 7
Equity attributable to non-controlling interests
11. 6
11. 7
12. 4
Total funds
832. 6
808. 1
737. 1
Total liabilities and equity
$3,784. 2
$3,141. 4
$3,374. 2
ACE HARDWARE CORPORATION
CONSOLIDATED CASH FLOW STATEMENTS
(Unaudited, in millions)
Three months completed
April 2,
April 3,
2022
2021
(13 weeks)
(13 weeks)
Operational activities
Net losses
$119. 8
$105. 4
Adjustments to bring the net source of income closer to the net money used in operating activities:
Depreciation and amortization
19. 0
17. 4
Amortization of deferred financing costs
0,1
0,1
Gain on disposal of assets, net
(21. 8)
(0. 1)
Provision for doubtful accounts
1. 1
1. 0
Other, net
3. 8
1. 8
Changes in operating assets and liabilities, the effects of acquisitions:
Claim (en
(346. 7)
(241. 5)
Inventories
(295. 7)
(168,9)
Other assets
(4. 6)
(6. 9)
Other long-term assets
(3. 4)
4. 0
Accounts payable and liabilities
419. 5
222. 6
Other long-term liabilities
3. 3
2. 4
deferred taxes
(1. 0)
0,1
Net money used in operational activities
(106. 6)
(62. 6)
Investment activities
Purchases of securities
(3. 3)
(22. 2)
Proceeds from the sale of securities
1. 8
7. 4
Purchases of and equipment
(25. 5)
(25. 4)
Cash paid for acquired businesses, from money received
–
(2. 6)
Increase in accounts receivable, net
(3. 6)
(4. 6)
Proceeds from the sale of assets
27. 2
–
Other, net
(0,7)
(0. 2)
Net money used in investment activities
(4. 1)
(47. 6)
Fundraising activities
Net debt in revolving lines
154. 6
141,8
Capital bills on long-term debt
(3. 6)
(2. 6)
Discount certificate payments
(25. 9)
(16. 9)
share buybacks
(1. 1)
(2. 3)
Buyback of minority interests
(0. 2)
(0. 1)
Other, net
(3. 2)
(1. 2)
Net money from funding activities
120,6
118,7
Increase in money and money equivalents
9. 9
8. 5
Cash and cash equivalents at the beginning of the period
37,6
28. 9
Cash and cash equivalents at the end of the period
$47. 5
$37. 4
Additional Disclosure of Monetary Information:
Interested payment
$6. 6
$7. 1
Income taxes paid
$0. 3
$0. 3
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SOURCE Ace Hardware Corporation