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[TRU-SERV LOGO]
EARNINGS RELEASE
TRUSERV REPORTS JULY RESULTS
CHICAGO, AUGUST 20, 2001 -- TruServ Corporation reported today revenue for the
month ended July 28, 2001 of $199.5 million, down 6.6 percent after excluding
net sales from the lumber business, sold in December of 2000. Revenue compared
to the same period a year ago, which includes the lumber business was down 32.4
percent.
The co-op reported a net loss for the month of $2.3 million, versus a
loss of $0.1 million in the same period a year ago. After excluding the direct
earnings of $1.2 million from the lumber business in July of last year and after
excluding restructuring charges of $0.1 million and unusual legal and
refinancing costs of $0.8 million incurred in July of this year, on a
comparative basis, the net loss was only $0.1 million greater than a year ago.
An improved mix of warehouse sales versus manufacturer direct sales to
members, together with the effect of cost reductions partially offset the loss
increase from lower overall volumes. Reductions in both corporate staff and the
distribution network, together with lower advertising expense, all helped in
reducing the co-op's ongoing costs.
TruServ's membership decline in the first seven months lessened by 1.1
percent compared with the same period last year.
"We were especially encouraged to see an increase in handled hardware
and paint revenue of $2.2 million on a same store basis," said Pamela Forbes
Lieberman, Chief Operating Officer and Chief Financial Officer. "Our members are
clearly pulling the volume lever and we'll continue to pull the efficiency
lever."
Senior note and revolver debt was $409 million at the end of July,
compared with $510 million outstanding at July month end a year ago.
"Our re-financing process continues on track," said Lieberman, "and we
anticipate receiving an extension to our current lenders' reservation of rights
letters by the end of August."
The original letters, which are still in force, have been extended
several times previously.
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July Earnings Report
August 20, 2001
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MONTH OF JULY SUMMARY RESULTS
($ IN MILLIONS)
July July $ %
2001 2000 Change Change
------- ------- -------- ------
Comparative Revenue $ 199.5 $ 213.5 $ (14.0) -6.6%
Lumber Business Revenue $ -- $ 81.7 $ (81.7)
------- ------- -------
Reported Revenue $ 199.5 $ 295.2 $ (95.7) -32.4%
Comparative Net Loss $ (1.4) $ (1.3) $ (0.1) -7.7%
Lumber Business Earnings $ - $ 1.2 $ (1.2)
Restructuring Expense $ (0.1) $ - $ (0.1)
Unusual Refinancing and Legal Fees $ (0.8) $ - $ (0.8)
------- ------- -------
Reported Net Loss $ (2.3) $ (0.1) $ (2.2) nm
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This earnings release may contain forward-looking statements that involve risks
and uncertainties. The following factors could cause results to differ
materially from management expectations as projected in such forward-looking
statements: seasonal variations, competition, risks of new business areas, the
availability and cost of real estate and construction, and changes in federal or
state legislation or regulations. Members are referred to the "Cautionary" Note
Regarding Forward-Looking Statements" in the Company's most recent Form 10-K
which Note is incorporated into this news release by reference.
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