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8 TRUE VALUE 2013 ANNUAL REPORT
2013 performance—a foundation to build upon
We had no shortage of challenges in 2013, but the improvement we saw as the year
progressed was something to build upon. Together we grew retail comparable-store
sales by 2.1 percent. We also saw a healthy increase in our wholesale comparable-store
sales of 2.4 percent on a gross billings basis. Our net margin was down for the year by
5.3 percent not including last year’s one-time gain and was on plan. We will be issuing
a $54.3 million patronage dividend at the end of March. While on plan, the dividend
is less than last year’s primarily due to the 2012 special dividend paid on that year’s
litigation settlement gain.
Most of our merchandise categories did well in 2013, led by Farm and Ranch,
Automotive and Pet, which grew by 11.2 percent over 2012. We continued to invest in
our retailers’ success, loaning $15.6 million to help finance Destination True Value (DTV)
new stores and remodels. We ended the year with 31 new stores and 51 remodels,
adding approximately 864,000 square feet of DTV space with good momentum going
into 2014.
We were particularly encouraged by the 137 new hardware stores that joined True Value
in 2013. Forty-one were brand new stores with the remainder being conversions from
other co-ops and buying organizations. Included in these conversions to True Value was
new affiliate member Family Farm & Home, a 28-store chain based in Michigan, which
was a significant win for the co-op.
The value of True Value
Our future is bright. We have a well-known and iconic brand, and we are doing great
work to focus and strengthen it. We are financially solid, with the resources we need to
invest in our success. We have an excellent leadership team, a group of bright, highly
committed associates, a network of great suppliers and, most important, a family
of True Value retailers and affiliates who are truly dedicated to their customers and
communities.
We talk about change, but we want to remind you of what won’t change: Our values.
Customer first, respect, integrity, driven to succeed, teamwork and stewardship. They
are the bedrock of our business, and the chairman and I share them personally. In fact,
along with my passion for the independent retailer, the company values are one of the
main reasons I chose to join True Value.
We have an exciting journey in front of us. It will not be easy, but we have an opportunity
to build something better, something more relevant, something that endures.
Together we are going to demonstrate that True Value’s best years are ahead.
Sincerely,
John R. Hartmann Brent A. Burger
President and Chief Executive Officer Chairman of the Board