True Value 2010 Annual Report Download - page 3

Sustaining our momentum. This describes True Value – and how its strong financial footing, retail
focus and commitment to profitable growth continue to position the co-op competitively within the
home improvement industry. In light of a challenging economy, we’re expanding our retail footprint
and investing in our future. This includes providing the necessary financing and full retail support to
adopt Destination True Value (DTV), our recommended store layout. With DTV, retailers are in prime
position to stay ahead of the competition, win with customers and drive consistent margins.
TO OUR RETAILERS:
Like 2009, 2010 presented economic challenges and con-
sumers became increasingly value conscious – factors that
took a toll on the industry. While the nation’s jobless rate
hovered around 9 percent, encouraging business barome-
ters emerged later in the year. Retail and home sales im-
proved and consumer confidence increased.
Despite the recession’s lingering effects, the co-op contin-
ued to post improved results in 2010 – a testament to our
strategic partnership with, and the financial acumen of, our
retailers. True Value’s net revenue rose 2.5 percent in the
fourth quarter to $417.7 million from $407.7 million in the
prior year, and net margin increased to $8.9 million, an in-
crease of 32.8 percent. For the year ending Jan. 1, 2011,
revenue decreased by 1.1 percent to $1,804.0 million from
$1,823.3 million the prior year. However, total comp store
sales were up 0.3 percent and for the second consecutive
year, we ended the year with a zero balance on our $250
million credit facility. With a new five-year bank agreement
and a better-than-expected interest rate, True Value is on
solid financial footing to continue investing in both co-op
and retailer growth. Looking back at our 2010 financial per-
formance, True Value retailers and associates can be proud
of our collective retail and financial achievements.
CO-OP OF CHOICE
We take your satisfaction personally. Just as our retailers
strive to satisfy their customers, the co-op is committed
to retailer satisfaction. And our associates deliver on this
commitment. From the truck driver delivering inventory,
to a call center associate helping answer your questions,
we’re there with you every day. Our retail implementa-
tion specialists and retail consultants guide stores through
every step of the DTV adoption process – from securing
financing to determining planograms and keeping shelves
stocked. We’re equipping you
with the most competitive retail
assortments, digital marketing
tools and an unmatched line of
credit to adopt the return-on-
investment-proven DTV store
format. We make True Value
easy to do business with.
We also deliver retailer satis-
faction in the form of an annual
dividend check. For the fifth consecutive year, we’ve de-
livered our retailers a consistent patronage dividend and
added additional value in membership credits and dis-
counts for a total of $136.5 million during 2010.
Because our retailers choose to partner with True Value, we
continually assess your satisfaction with our performance
through your eyes. Retailer feedback indicates increased
satisfaction overall, including marked increases in key areas,
such as ease of ordering; reliable, on-time delivery; order
lead time and fill rates.
More specifically, in the past year we:
• Achieved fill rate goals for every demand class, resulting
in an overall fill rate of 96.1 percent – an improvement
from last year’s 96.0 percent.
THOUSAND
900
SQUARE F E E T OF
DTV SELLING SPACE
WAS ADDED IN 2010
CLOSE TO
ANNUAL REPORT 2010 1