8-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K

CURRENT REPORT

PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934

Date of Report (Date of earliest event reported): September 8, 2020

Commission File Number	Exact name of Registrant as specified in its charter, Address of principal executive offices and Telephone number	State of incorporation	I.R.S. Employer Identification Number
001-35979	HD SUPPLY HOLDINGS, INC. 3400 Cumberland Boulevard Atlanta, Georgia 30339 (770) 852-9000	Delaware	26-0486780

333-159809 HD SUPPLY, INC. 3400 Cumberland Boulevard Atlanta, Georgia 30339 (770) 852-9000 Delaware 75-2007383

Not Applicable

(Former name or former address, if changed since last report.)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

¨ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

¨ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

¨ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

¨ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Securities registered pursuant to Section 12(b) of the Act:

Title of each class	Trading Symbol(s)	Name of Exchange on which registered
Common stock, $0.01 par value per share	HDS	The Nasdaq Stock Market LLC

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

Emerging growth company ¨

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ¨

Item 2.02. Results of Operations and Financial Condition.

On September 9, 2020, HD Supply Holdings, Inc. (the “Company” or “HD Supply”), HD Supply, Inc.’s parent company, will issue a press release, filed as Exhibit 99.1 and incorporated herein by reference, announcing the Company’s financial results for the three months ended August 2, 2020 and certain other information.

The information contained in Item 7.01 concerning the presentation to HD Supply investors is hereby incorporated into this Item 2.02 by reference.

In accordance with General Instruction B.2 of Form 8-K, the information in this Item 2.02 of this Current Report on Form 8-K, including Exhibit 99.1 attached hereto, shall not be deemed “filed” for the purposes of Section 18 of the Securities Exchange Act of 1934, as amended, or otherwise subject to the liabilities of that section, nor shall it be deemed incorporated by reference in any filing under the Securities Act of 1933, as amended, or the Securities Exchange Act of 1934, as amended, except as shall be expressly set forth by specific reference in such a filing.

Item 7.01. Regulation FD Disclosure.

The slide presentation attached hereto as Exhibit 99.2, and incorporated herein by reference, will be presented to certain investors of HD Supply on September 9, 2020 and may be used by HD Supply in various other presentations to investors.

In accordance with General Instruction B.2 of Form 8-K, the information in this Item 7.01 of this Current Report on Form 8-K, including Exhibit 99.2 attached hereto, shall not be deemed “filed” for the purposes of Section 18 of the Securities Exchange Act of 1934, as amended, or otherwise subject to the liabilities of that section, nor shall it be deemed incorporated by reference in any filing under the Securities Act of 1933, as amended, or the Securities Exchange Act of 1934, as amended, except as shall be expressly set forth by specific reference in such a filing.

Item 9.01 Financial Statements and Exhibits.

(d) Exhibits

Exhibit No.	Description of Exhibit
99.1	Press Release “HD Supply Holdings, Inc. Announces Fiscal 2020 Second-Quarter Results,” dated September 9, 2020
99.2	HD Supply presentation to investors
104	Cover Page Interactive Data File (embedded within the inline XBRL document)

SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

Date: September 8, 2020	HD Supply Holdings, Inc.
	By:	/s/ Dan S. McDevitt
		Dan S. McDevitt
		General Counsel and Corporate Secretary

SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

Date: September 8, 2020	HD Supply, Inc.
	By:	/s/ Dan S. McDevitt
		Dan S. McDevitt
		General Counsel and Corporate Secretary

EX-99.1

Exhibit 99.1

Investor and Media Contact:

Charlotte McLaughlin

HD Supply Investor Relations

770-852-9100

InvestorRelations@hdsupply.com

Charlotte.McLaughlin@hdsupply.com

HD Supply Holdings, Inc. Announces Fiscal 2020 Second-Quarter Results

Atlanta, GA – September 9, 2020 – HD Supply Holdings, Inc. (NASDAQ: HDS), one of the largest industrial distributors in North America, today reported Net sales of $1.6 billion for the second quarter of fiscal 2020 ended August 2, 2020, a decrease of $72 million, or 4.4 percent, as compared to the second quarter of fiscal 2019.

“Our highest priority remains the health and safety of our associates and our customers as we continue to support the operations and re-opening of living spaces, job-sites and work places,” stated Joe DeAngelo, Chairman and CEO of HD Supply. “Our financial strength and steadily improving results reflect the strength of our team and their dedication to safely delivering best-in-class service.”

Gross profit decreased $37 million, or 5.8 percent, to $596 million for the second quarter of fiscal 2020, as compared to $633 million for the second quarter of fiscal 2019. Gross profit was 38.4 percent of Net sales for the second quarter of fiscal 2020, a decrease of approximately 60 basis points from 39.0 percent for the second quarter of fiscal 2019.

Operating income decreased $13 million, or 6.2 percent, to $198 million for the second quarter of fiscal 2020, as compared to $211 million for the second quarter of fiscal 2019. Operating income was 12.8 percent of Net sales for the second quarter of fiscal 2020, down approximately 20 basis points from 13.0 percent for the second quarter of fiscal 2019.

Net income decreased $4 million, or 3.0 percent, to $131 million for the second quarter of fiscal 2020, as compared to $135 million for the second quarter of fiscal 2019.

Net income per diluted share increased $0.02, or 2.5 percent, to $0.81 for the second quarter of fiscal 2020, as compared to $0.79 for the second quarter of fiscal 2019.

Adjusted EBITDA decreased $6 million, or 2.5 percent, to $238 million for the second quarter of fiscal 2020, as compared to $244 million for the second quarter of fiscal 2019. Adjusted EBITDA was 15.3 percent of Net sales for the second quarter of fiscal 2020, an increase of approximately 30 basis points from 15.0 percent for the second quarter of fiscal 2019.

Adjusted net income decreased $1 million, or 0.7 percent, to $134 million for the second quarter of fiscal 2020, as compared to $135 million for the second quarter of fiscal 2019. Adjusted net income per diluted share increased $0.04, or 5.1 percent, to $0.83 for the second quarter of fiscal 2020, as compared to $0.79 for the second quarter of fiscal 2019.

As of August 2, 2020, our combined liquidity of $995 million was comprised of $71 million in cash and cash equivalents and $924 million of additional available borrowings (excluding $86 million of permitted borrowings on available cash balances) under HD Supply, Inc.'s senior asset-based lending facility, based on qualifying inventory and receivables. Our combined liquidity as of August 2, 2020 increased by $198 million from the end of first-quarter fiscal 2020 and by $367 million from the end of fiscal year 2019.

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Business Unit Performance

Facilities Maintenance

Net sales decreased $69 million, or 8.3 percent, to $761 million for the second quarter of fiscal 2020, as compared to $830 million for the second quarter of fiscal 2019. Adjusted EBITDA decreased $17 million, or 11.4 percent, to $132 million for the second quarter of fiscal 2020, as compared to $149 million for the second quarter of fiscal 2019. Adjusted EBITDA was 17.3 percent of Net sales for the second quarter of fiscal 2020, a decrease of approximately 70 basis points from 18.0 percent for the second quarter of fiscal 2019.

Construction & Industrial

Net sales decreased $2 million, or 0.3 percent, to $793 million for the second quarter of fiscal 2020, as compared to $795 million for the second quarter of fiscal 2019. Adjusted EBITDA increased $11 million, or 11.6 percent, to $106 million for the second quarter of fiscal 2020, as compared to $95 million for the second quarter of fiscal 2019. Adjusted EBITDA was 13.4 percent of Net sales for the second quarter of fiscal 2020, an increase of approximately 150 basis points from 11.9 percent for the second quarter of fiscal 2019.

Second-Quarter Monthly Sales Performance

Net sales for May, June and July of fiscal 2020 were $431 million, $495 million and $626 million, respectively. There were 19 selling days in May, 20 selling days in June and 24 selling days in July of fiscal 2020 and fiscal 2019. Average year-over-year daily sales changes for May, June and July of fiscal 2020 as compared to fiscal 2019 were a decrease of 7.3 percent, a decrease of 4.8 percent and a decrease of 2.0 percent, respectively.

Preliminary August Sales Results

Preliminary Net sales in August 2020 were approximately $518 million, which represents a year-over-year average daily decline of approximately 0.7 percent. Preliminary August year-over-year average daily Net sales change by business segment was 1.1 percent growth in Facilities Maintenance and 2.5 percent decline in Construction & Industrial. There were 20 selling days in both August 2020 and August 2019.

Construction & Industrial Sale Transaction

On August 10, 2020, HD Supply entered into a definitive agreement to sell its Construction & Industrial business to an affiliate of Clayton, Dubilier & Rice for a purchase price of $2.9 billion payable in cash at closing. Net proceeds from the sale are expected to be approximately $2.5 billion after taxes and transaction costs. The transaction is expected to close in October 2020, subject to customary regulatory approvals.

2020 Outlook

The company will not be providing a third quarter 2020 or fiscal full year 2020 outlook in light of the ongoing coronavirus disease (“COVID-19”) outbreak. A further discussion relating to the ongoing impact of COVID-19 will take place on our fiscal 2020 second-quarter conference call.

Fiscal 2020 Second-Quarter Conference Call

As previously announced, HD Supply will hold a conference call on Wednesday, September 9^th, 2020 at 8:00 a.m. (Eastern Time) to discuss its fiscal 2020 second-quarter results. The conference call and presentation materials can be accessed via webcast by logging on from the Investor Relations section of the company's Web site at hdsupply.com. The online replay will remain available for a limited time following the call.

Non-GAAP Financial Measures

HD Supply supplements its reporting of Net income with non-GAAP measurements, including Adjusted EBITDA, Adjusted net income, and Adjusted net income per diluted share. This supplemental information should not be considered in isolation or as a substitute for the GAAP measurements. Additional information regarding Adjusted EBITDA, Adjusted net income, and Adjusted net income per diluted share referred to in this press release is included below under “Reconciliation of Non-GAAP Measures.”

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About HD Supply

HD Supply (www.hdsupply.com) is one of the largest industrial distributors in North America. The company provides a broad range of products and value-add services to approximately 500,000 customers with leadership positions in the maintenance, repair and operations and specialty construction sectors. Through approximately 270 branches and 44 distribution centers in the U.S. and Canada, the company's more than 11,000 associates provide localized, customer-tailored products, services and expertise.

Forward-Looking Statements and Preliminary Results

This press release includes "forward-looking statements" within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. Forward-looking statements are based on management's beliefs and assumptions and information currently available to management and are subject to known and unknown risks and uncertainties, many of which may be beyond our control. We caution you that the forward-looking information presented in this press release is not a guarantee of future results, and that actual results may differ materially from those made in or suggested by the forward-looking information contained in this press release. Forward-looking statements generally can be identified by the use of forward-looking terminology such as "may," "plan," "seek," "comfortable with," "will," "expect," "intend," "estimate," "anticipate," "believe" or "continue" or the negative thereof or variations thereon or similar terminology. A number of important factors could cause actual events to differ materially from those contained in or implied by the forward-looking statements, including, without limitation, our ability to obtain the required regulatory approvals for the sale of Construction & Industrial business, our ability to satisfy the other closing conditions related to the sale transaction, our ability consummate the sale transaction on the anticipated timing, if at all the impact of the coronavirus disease 2019 outbreak (“COVID-19”) on the maintenance, repair and operations and specialty construction sectors, in general, and the financial position and operating results of our company, in particular, which cannot be predicted and could change rapidly and those "Risk factors" in our annual report on Form 10-K, for the fiscal year ended February 2, 2020, filed on March 17, 2020 and those described from time to time in our, and HD Supply, Inc.'s, other filings with the U.S. Securities and Exchange Commission (the “SEC”), which can be found at the SEC's website www.sec.gov. Any forward-looking information presented herein is made only as of the date of this press release, and we do not undertake any obligation to update or revise any forward-looking information to reflect changes in assumptions, the occurrence of unanticipated events, or otherwise.

August 2020 estimates for Net sales are preliminary estimates and are subject to risks and uncertainties, including, among others, changes in connection with quarter-end adjustments. Any variation between HD Supply’s actual results and the preliminary financial data set forth above may be material.

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HD SUPPLY HOLDINGS, INC.

CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME

Amounts in millions, except share and per share data, Unaudited

	Three Months Ended						Six Months Ended
	August 2, 2020			August 4, 2019			August 2, 2020			August 4, 2019
Net Sales	$	1,552		$	1,624		$	2,947		$	3,117
Cost of sales		956			991			1,801			1,899
Gross Profit		596			633			1,146			1,218
Operating expenses:
Selling, general and administrative		366			396			762			788
Depreciation and amortization		28			26			55			51
Restructuring and separation		4			—			10			(2	)
Total operating expenses		398			422			827			837
Operating Income		198			211			319			381
Interest expense		24			28			49			56
Income Before Provision for Income Taxes		174			183			270			325
Provision for income taxes		43			48			67			83
Net Income	$	131		$	135		$	203		$	242
Other comprehensive income (loss):
Foreign currency translation adjustment		(1	)		—			—			—
Unrealized gain (loss) on cash flow hedge, net of tax of $(1), $5, $5, and $7		2			(16	)		(14	)		(21	)
Total Comprehensive Income	$	132		$	119		$	189		$	221
Weighted Average Common Shares Outstanding (thousands)
Basic		160,925			169,546			160,877			169,773
Diluted		161,282			170,057			161,220			170,386
Earnings Per Share:
Basic earnings per share	$	0.81		$	0.80		$	1.26		$	1.43
Diluted earnings per share	$	0.81		$	0.79		$	1.26		$	1.42

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HD SUPPLY HOLDINGS, INC.

CONSOLIDATED BALANCE SHEETS

Amounts in millions, except per share data, Unaudited

	August 2, 2020			February 2, 2020
ASSETS
Current assets:
Cash and cash equivalents	$	71		$	34
Receivables, less allowance for credit losses of $22 and $19		795			754
Inventories		796			771
Other current assets		84			104
Total current assets		1,746			1,663
Property and equipment, net		375			391
Operating lease right-of-use assets		459			480
Goodwill		1,991			1,991
Intangible assets, net		163			175
Deferred tax asset		2			2
Other assets		15			13
Total assets	$	4,751		$	4,715
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Accounts payable	$	493		$	414
Accrued compensation and benefits		55			71
Current installments of long-term debt		11			11
Current lease liabilities		123			110
Other current liabilities		238			208
Total current liabilities		920			814
Long-term debt, excluding current installments		1,772			2,035
Deferred tax liabilities		36			33
Long-term lease liabilities		352			383
Other liabilities		121			98
Total liabilities		3,201			3,363
Stockholders’ equity:
Common stock, par value $0.01; 1 billion shares authorized; 162.0 million and 161.4 million shares issued and outstanding at August 2, 2020, and February 2, 2020, respectively		2			2
Paid-in capital		4,110			4,097
Accumulated deficit		(919	)		(1,122	)
Accumulated other comprehensive loss		(66	)		(52	)
Treasury stock, at cost, 44.2 million and 44.1 million shares at August 2, 2020 and February 2, 2020, respectively		(1,577	)		(1,573	)
Total stockholders’ equity		1,550			1,352
Total liabilities and stockholders’ equity	$	4,751		$	4,715

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HD SUPPLY HOLDINGS, INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS

Amounts in millions, Unaudited

	Six Months Ended
	August 2, 2020			August 4, 2019
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income	$	203		$	242
Reconciliation of net income to net cash provided by operating activities:
Depreciation and amortization		59			54
Provision for credit losses		10			5
Non-cash interest expense		3			3
Stock-based compensation expense		12			12
Deferred income taxes		—			75
Other		1			1
Changes in assets and liabilities, net of the effects of acquisitions & dispositions:
(Increase) decrease in receivables		(51	)		(133	)
(Increase) decrease in inventories		(25	)		(56	)
(Increase) decrease in other current assets		7			(2	)
Increase (decrease) in accounts payable and accrued liabilities		104			85
Increase (decrease) in other long-term liabilities		16			—
Net cash provided by operating activities		339			286
CASH FLOWS FROM INVESTING ACTIVITIES:
Capital expenditures		(33	)		(54	)
Proceeds from sales of property and equipment		—			2
Payments for businesses acquired, net of cash acquired		—			3
Net cash provided by (used in) investing activities		(33	)		(49	)
CASH FLOWS FROM FINANCING ACTIVITIES:
Purchase of treasury shares		(3	)		(78	)
Repayments of long-term debt		(5	)		(5	)
Repayments of financing liabilities		—			(88	)
Borrowings on long-term revolver debt		409			578
Repayments on long-term revolver debt		(669	)		(642	)
Proceeds from issuance of common stock under employee benefit plans		3			7
Tax withholdings on stock-based awards		(4	)		(5	)
Other financing activities		—			(1	)
Net cash provided by (used in) financing activities		(269	)		(234	)
Effect of exchange rates on cash and cash equivalents		—			—
Increase (decrease) in cash and cash equivalents	$	37		$	3
Cash and cash equivalents at beginning of period		34			38
Cash and cash equivalents at end of period	$	71		$	41

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HD SUPPLY HOLDINGS, INC.

SEGMENT REPORTING

Amounts in millions, Unaudited

	Facilities Maintenance		Construction & Industrial		Eliminations			Total Operations
Three Months Ended August 2, 2020
Net sales	$	761	$	793	$	(2	)	$	1,552
Adjusted EBITDA		132		106		—			238
Depreciation(1) & Software Amortization		12		12		—			24
Other Intangible Amortization		3		3		—			6
Three Months Ended August 4, 2019
Net sales	$	830	$	795	$	(1	)	$	1,624
Adjusted EBITDA		149		95		—			244
Depreciation(1) & Software Amortization		11		10		—			21
Other Intangible Amortization		2		4		—			6
Six Months Ended August 2, 2020
Net sales	$	1,443	$	1,506	$	(2	)	$	2,947
Adjusted EBITDA		230		171		—			401
Depreciation(1) & Software Amortization		25		22		—			47
Other Intangible Amortization		5		7		—			12
Six Months Ended August 4, 2019
Net sales	$	1,602	$	1,516	$	(1	)	$	3,117
Adjusted EBITDA		283		164		—			447
Depreciation(1) & Software Amortization		21		21		—			42
Other Intangible Amortization		4		8		—			12

(1) Depreciation includes amounts recorded within Cost of sales in the Consolidated Statements of Operations.

Reconciliation of Non-GAAP Measures

Adjusted EBITDA and Adjusted net income are not recognized terms under GAAP and do not purport to be alternatives to Net income as a measure of operating performance. We present Adjusted EBITDA and Adjusted net income because each is a primary measure used by management to evaluate operating performance. In addition, we present Adjusted net income to measure our overall profitability as we believe it is an important measure of our performance. We believe the presentation of Adjusted EBITDA and Adjusted net income enhances investors' overall understanding of the financial performance of our business.

Adjusted EBITDA is based on "Consolidated EBITDA," a measure which is defined in our senior credit facilities and used in calculating financial ratios in several material debt covenants. Adjusted EBITDA is defined as Net income less Income from discontinued operations, net of tax, plus (i) Interest expense and Interest income, net, (ii) Provision for income taxes, (iii) Depreciation and amortization and further adjusted to exclude loss on extinguishment of debt, non-cash items and certain other adjustments to Consolidated Net Income permitted in calculating Consolidated EBITDA under our senior credit facilities.

Adjusted net income is defined as Net income less Income from discontinued operations, net of tax, further adjusted for loss on extinguishment of debt, certain non-cash, non-recurring or unusual items, net of tax.

We compensate for the limitations of using non-GAAP financial measures by using them to supplement GAAP results to provide a more complete understanding of the factors and trends affecting the business than GAAP results alone. Because not all companies use identical calculations, our presentation of Adjusted EBITDA and Adjusted net income may not be comparable to other similarly titled measures of other companies.

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Adjusted EBITDA and Adjusted net income have limitations as analytical tools and should not be considered in isolation or as substitutes for analyzing our results as reported under GAAP. Some of these limitations are:

· Adjusted EBITDA and Adjusted net income do not reflect changes in, or cash requirements for, our working capital needs;

· Adjusted EBITDA does not reflect our interest expense, or the requirements necessary to service interest or principal payments on our debt;

· Adjusted EBITDA does not reflect our income tax expenses or the cash requirements to pay our taxes;

· Adjusted EBITDA and Adjusted net income do not reflect historical cash expenditures or future requirements for capital expenditures or contractual commitments; and

· although depreciation and amortization charges are non-cash charges, the assets being depreciated and amortized will often have to be replaced in the future, and Adjusted EBITDA does not reflect any cash requirements for such replacements.

Adjusted EBITDA

The following table presents a reconciliation of Net income, the most directly comparable financial measure under GAAP, to Adjusted EBITDA for the periods presented (amounts in millions):

	Three Months Ended				Six Months Ended
	August 2, 2020		August 4, 2019		August 2, 2020		August 4, 2019
Net income	$	131	$	135	$	203	$	242
Interest expense, net		24		28		49		56
Provision for income taxes		43		48		67		83
Depreciation and amortization (1)		30		27		59		54
Restructuring and separation charges (2)		4		—		10		(2	)
Stock-based compensation		5		5		12		12
Acquisition and integration costs (3)		—		—		—		1
Other		1		1		1		1
Adjusted EBITDA	$	238	$	244	$	401	$	447

(1) Depreciation and amortization includes amounts recorded within Cost of sales in the Consolidated Statements of Operations

(2) Represents the costs related to separation activities and personnel changes, primarily severance and other employee-related costs, and costs related to deferring certain projects during the separation preparations. For the six months ended August 4, 2019, the Company recognized a favorable termination of the lease for its former corporate headquarters

(3) Represents the costs incurred in the acquisition and integration of business acquisitions, including A.H. Harris Construction Supplies

Adjusted Net Income

The following table presents a reconciliation of Net income, the most directly comparable financial measure under U.S. GAAP, to Adjusted net income for the periods presented (amounts in millions):

	Three Months Ended					Six Months Ended
	August 2, 2020			August 4, 2019		August 2, 2020			August 4, 2019
Net income	$	131		$	135	$	203		$	242
Plus: Restructuring and separation charges (1)		4			—		10			(2	)
Plus: Acquisition and integration costs (2)		—			—		—			1
Plus: Tax benefit for adjustments (3)		(1	)		—		(2	)		—
Adjusted Net Income	$	134		$	135	$	211		$	241
Diluted weighted average common shares outstanding		161,282			170,057		161,220			170,386
Adjusted net income per share – diluted	$	0.83		$	0.79	$	1.31		$	1.41

(1) Represents the costs related to separation activities and personnel changes, primarily severance and other employee-related costs, and costs related to deferring certain projects during the separation preparations. For the six months ended August 4, 2019, the Company recognized a favorable termination of the lease for its former corporate headquarters

(2) Represents the costs incurred in the acquisition and integration of business acquisitions, including A.H. Harris Construction Supplies

(3) Adjustments to Net income have been tax effected at the Company’s combined annual federal and state tax rates of 25.8% for the three and six months ended August 2, 2020 and 25.7% for the three and six months ended August 4, 2019

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EX-99.2

Exhibit 99.2

FINANCIAL RESULTS AND COMPANY OVERVIEW 2020 Second - Quarter Performance September 9 th , 2020

2 Disclaimer Forward - Looking Statements and Preliminary Results This presentation includes “forward - looking statements” within the meaning of Section 27A of the Securities Act of 1933 and Sect ion 21E of the Securities Exchange Act of 1934. Forward - looking statements are based on management’s beliefs and assumptions and informatio n currently available to management and are subject to known and unknown risks and uncertainties, many of which may be beyond o ur control. We caution you that the forward - looking information presented in this presentation is not a guarantee of future results , and that actual results may differ materially from those made in or suggested by the forward - looking information contained in this presen tation. Forward - looking statements generally can be identified by the use of forward - looking terminology such as “may,” “plan,” “seek,” “comfortable with,” “will,” “expect,” “intend,” “estimate,” “anticipate,” “believe” or “continue” or the negative thereof or var iations thereon or similar terminology. A number of important factors could cause actual events to differ materially from those contained in or implied by the forward - looking statements, including, without limitation, our ability to obtain the required regulatory approvals for the sale of Construction & Industrial business, our ability to satisfy the other closing conditions related to the sale transaction, our ability to consummate the sale transaction on the anticipated timing, if at all, the impact of the coronavirus disease 2019 outbreak (“COVID - 19”) on the maintenance, repair and operations and specialty construction sectors, in general, and the financial position and operating results of our co mpany, in particular, which cannot be predicted and could change rapidly and those “Risk factors” in our annual report on Form 10 - K, for t he fiscal year ended February 2, 2020, filed on March 17, 2020 and those described from time to time in our, and HD Supply, Inc.’s, oth er filings with the U.S. Securities and Exchange Commission (the “SEC”), which can be found at the SEC’s website www.sec.gov. Any forwar d - looking information presented herein is made only as of the date of this presentation, and we do not undertake any obligation to update or revise any forward - looking information to reflect changes in assumptions, the occurrence of unanticipated events, or otherwise. Estimates for August 2020 Net sales are preliminary estimates and are subject to risks and uncertainties, including, among others, changes in connection with quarter - end adjustments. Any variation between HD Supply’s actual results and the preliminary financi al data set forth herein may be material. Non - GAAP Financial Measures HD Supply supplements its financial results that are determined in accordance with accounting principles generally accepted i n t he United States of America (“GAAP”) with non - GAAP measurements, including Adjusted EBITDA, Adjusted net income, Adjusted net income per diluted share, Net debt and Free cash flow. This supplemental information should not be considered in isolation or as a subst itu te for the GAAP measurements presented herein. Additional information regarding Adjusted EBITDA, Adjusted net income, Adjusted net inco me per diluted share, Net debt, and Free cash flow referred to in this presentation is included at the end of this presentation unde r “ Capital Structure Overview” and “Reconciliation of Non - GAAP Measures.”

3 Q2’20 Overview Solid Improvement and Share Gains Through Q2’20 1 See appendix slides 16 and 17 for a reconciliation of Adjusted EBITDA, Adjusted Net Income and Adjusted Net Income per Diluted Share to Net Income 2 Free Cash Flow is defined as LTM Operating Cash Flow $730M, Less Capital Expenditures $85M 3 As of August 2, 2020, our combined liquidity of approximately $995 million was comprised of $71 million in cash and cash equi va lents and $924 million of additional available borrowings (excluding $86 million of borrowings on available cash balances) under our Senior ABL Facility, based on qualifying inventory and receivables Note: “VPY” denotes Versus Prior Year, “LTM” denotes Last Twelve Months ▪ 4% Net Sales Decline VPY ▪ 6% Operating Income Decline VPY ▪ 3% Net Income Decline VPY ▪ 2% Adjusted EBITDA 1 Decline VPY ▪ +3% Net Income per Diluted Share VPY ▪ $645M LTM Free Cash Flow 2 ▪ Liquidity of $995M 3 ; $198M increase from May 3, 2020 Financial ▪ Sale of Construction and Industrial ▪ $2.5 Billion After Tax and Transaction Costs ▪ Use of Proceed: Share Repurchases ; Debt Repayment; M&A Strategy; Ongoing Capex Investment at 2 Percent of Sales ▪ Significant Improvement in Facilities Maintenance Performance ▪ Successful Navigation of Durable Goods Shortages and Shipping Delays ▪ Debt Repayment Business Update

4 Facilities Maintenance: COVID - 19 Impact Health and Safety of Our Associates Remains a Priority ▪ No Disruption to Distribution Centers ; Successful Continuance of Working from Home Plan; Maintain Infection Controls in all Locations ▪ Customer Focus on Safe Reopening and Operating of their Living Space Properties ▪ Gross Margin Headwinds to Business include: – Increased Demand for Safety and Infection Control – Sales Mix Skewed Towards Big Ticket Items – Slower Recovery in Traditional MRO ▪ Hospitality Market Remains Significantly Impacted but Improving; Decline in Revenue per Available Room of Approximately 60 percent 1 in Q2’20 ▪ Healthcare Market Occupancy Rate Decline VPY 2 in Q2’20 1 Data from STR: “Total U.S . hotel performance for Q2;20 2020“ 2 Data from NIC: Q2’20 Assisted Living Occupancy Rates Down 390 Basis Points VPY; Independent Living Occupancy Rates Down 270 B asi s Points VPY

5 Improvement in each Vertical Throughout Q2 Facilities Maintenance Vertical Performance 1 Gross Sales after Returns (GSAR) excludes customer rebates, discounts, and allowances GSAR 1 Versus Prior Year Multifamily; ~60% of FM Sales Hospitality; ~18% of FM Sales Healthcare; ~7% of FM Sales Institutional; ~8% of FM Sales FM Net Sales (7.7%) (6.3%) 0.1% 2.1% (48.4%) (33.8%) (26.1%) (13.9%) (0.4%) (5.7%) (4.0%) 3.4% (6.9%) 4.6% 6.2% 14.3% (13.4%) (9.0%) (4.4%) 1.1% May Jun. Jul. Aug.

6 ($ in millions, except per share data) Net Sales 1 See appendix slides 16 and 17 for a reconciliation of Adjusted EBITDA, Adjusted net income and Adjusted net income per diluted share to Net income 4.4% Net Sales Decline in Q2’20 Q2’20 Financial Results $1,624 $1,552 Q2’19 VPY Q2’20 - $ 72 - 4% Gross Profit $633 $596 - 6% Gross Margin % 39.0% 38.4% - 60 BPs Operating Income $211 $198 - 6% Op. Income % 13.0% 12.8% - 20 BPs Net Income $135 $131 - 3% Per Diluted Share $0.79 $0.81 +$0.02 Adj. EBITDA 1 $244 $238 - 2% Adj. EBITDA % 15.0% 15.3% +30 BPs Adj. Net Income 1 $135 $134 - 1% Per Diluted Share 1 $0.79 $0.83 +$0.04

7 Q2’20 Segment Performance Q2’20 Adj. EBITDA $132 $106 Net Sales Q2’19 $149 VPY - 8% - 11% VPY flat +12% $95 Q2’20 Q2’19 $795 $793 $830 $761 organic ($ in millions)

8 Q2’20 Taxes, Cash Flow, and Capitalization ▪ Cash Taxes $36 in Q2’20 ▪ $1,754 Net Debt 1 at the End of Q2’20 2.1x Net Debt to LTM Adj. EBITDA ▪ Free Cash Flow 2 $190 in Q2’20 ▪ Capital Expenditures vv $12 in Q2’20 1 Reconciled on slide 13. “Net Debt” defined as Total Debt before unamortized deferred financing costs and discounts, plus letters of credit, less cash an d cash equivalents 2 Free Cash Flow is defined as Quarterly Operating Cash Flow $202M , Less Capital Expenditures $12M 3 As of August 2, 2020, our combined liquidity of approximately $995 million was comprised of $71 million in cash and cash equival ent s and $924 million of additional available borrowings (excluding $86 million of borrowings on available cash balances) under our Senior ABL Facility, based on qualifying inventory and receivables Drawn ABL includes $24 in Letters of Credit Strong Liquidity and No Significant Maturities until 2022 ($ in millions) ’20 ’21 ’22 ’23 ’24 ’25 ’26 ABL Commitment $1,000 $1,024 $750 $24 HD Supply Debt Maturities $11 $11 $1.0 billion ABL Revolver $1.1 billion Term Loan B $750 million Sr. Notes ▪ Liquidity - As of May 3, 2020 was $ 995 3 , +$367 as compared to February 2, 2020 - No Significant Maturities until Apr. 2022 $11

9 1.1% Preliminary FM August Average Daily Sales Growth VPY Q2’20 Monthly Average Daily Sales (%) Facilities Maintenance Construction & Industrial Prior Year HD Supply Net Sales HD Supply Average Daily Sales Growth VPY Current Year Note: Contains forward - looking information; please see Disclaimer on slide 2 ($ in millions) 1.1% ( 2.5%) 20 (Preliminary) (4.8%) (2.0%) 1.6% May Jul. $ 518 1.9% 2.1% Q2’20 1.2% 2.0% $521 20 20 Q3’20 (0.7%) Jun. (7.3%) Aug. 0.2% (2.4%) (13.4%) 2.2% (9.0%) 3.0% (4.4%) 2.8% (1.4%) 1.7% (0.4%) 1.0% 0.5% $464 $431 $521 $495 $639 $626 19 20 24 19 20 24 20 19 24 ’20 Selling Days ’19 Selling Days ’18 Selling Days

10 Q&A Q&A

11 Concluding Remarks Priority is Health and Safety of our Associates and Customers ▪ Facilities Maintenance Return to Growth in August 2020, +1.1% VPY ▪ Completion of Construction and Industrial Sale Expected by End of October ▪ Re - launch HDS Story Later in 2020 - Strong ROIC of 36% 1 - Enhance Number One Position in MRO Living Space 1 Reconciled on Slide 18

12 Q&A APPENDIX

13 2.1x Net Debt to LTM Adjusted EBITDA Capital Structure Overview Debt as of Aug. 2, 2020 Senior ABL Facility Term B - 5 Loans Oct. 2018 Senior Unsecured Notes Outstanding Debt 4 Less: Cash and Cash Equivalents Net Debt Balance Maturity 1 Represents the stated rate of interest, without including the effect of discounts or interest rate swaps 2 Subject to applicable redemption price terms 3 Ratings per Moody’s Investor’s Service (“Moody’s”) and S&P Global Ratings (“S&P”). Corporate family ratings shown for Outsta nd ing Debt. 4 Excludes unamortized discounts of $2 and unamortized deferred financing costs of $16 ($ in millions) Interest Rate 1 Soft Call Date 2 n/a 1.91% 5.375% 4/5/ 22 10/17/ 23 10/15/ 26 n/a Now 10/15/ 21 Plus: Letters of Credit - 750 $1,754 (71) $1,801 1,051 24 Moody’s / S&P 3 Not Rated, BBB – Ba1, BBB – Ba2, BB – Ba1 Stable, BB+ Negative

14 1.6% 2.6% 1.7% 2.5% (6.8%) 12.7% 8.8% 0.5% (22.6%) (7.3%) (4.8%) (2.0%) (0.7%) Aug. Sep. Oct. Nov. Dec. Jan. Feb. Mar. Apr. May Jun. Jul. Aug. 0.7% Preliminary Average Daily Sales Decline VPY in August Average Daily Sales – Organic 1 (VPY%) (Preliminary) Facil . Maint . Const. & Ind. HD Supply Organic Average Daily Sales (“ADS”) Growth VPY 1 (VPY%) 1 Contains an extra selling week as compared with other years. Fiscal 2018 contains 53 weeks Note: Contains forward - looking information; please see Disclaimer on slide 2 FY’19 ’20 Selling Days ’19 Selling Days ’18 Selling Days FY’20 Dec. Apr. May Jun. 1.2% 1.7% 2.7% 2.5% (4.9%) 9.6% 4.1% (0.4%) (31.9%) (13.4%) (9.0%) (4.4%) 1.1% 2.0% 3.5% 0.6% 2.4% (8.6%) 16.1% 14.2% 1.4% (13.0%) (1.4%) (0.4%) 0.5% (2.5%) 20 19 25 18 19 24 20 20 25 19 20 24 20 20 19 25 18 19 24 20 20 25 19 20 24 20 20 19 25 18 20 28 1 20 20 25 20 19 24 20

15 $518M Preliminary August Sales Monthly Net Sales ($) (Preliminary) Facil . Maint . Const. & Ind. ’20 Selling Days ’19 Selling Days ’18 Selling Days organic HD Supply Net Sales ($ in millions) 1 Contains an extra selling week as compared with other years. Fiscal 2018 contains 53 weeks Note: Contains forward - looking information; please see Disclaimer on slide 2 FY’20 FY’19 $521 $494 $629 $436 $403 $546 $461 $462 $472 $431 $495 $626 $518 Aug. Sep. Oct. Nov. Dec. Jan. Feb. Mar. Apr. May Jun. Jul. Aug. $266 $249 $311 $216 $205 $281 $235 $236 $211 $198 $243 $320 $269 $255 $245 $318 $221 $198 $266 $226 $226 $261 $234 $252 $307 $249 20 19 25 18 19 24 20 20 25 19 20 24 20 20 19 25 18 19 24 20 20 25 19 20 24 20 20 19 25 18 20 28 1 20 20 25 20 19 24 20

16 Reconciliation of Non - GAAP Measures: Net Income to Adjusted Net Income and Adjusted Net Income Per Share ($ in millions, except share and per share amounts) 1 Represents the costs related to separation activities and personnel changes, primarily severance and other employee - related cos ts, and costs related to deferring certain projects during the separation preparations. For the six months ended August 4, 2019, the Company recognized a favorable termination of the lease fo r its former corporate headquarters 2 Represents the costs incurred in the acquisition and integration of business acquisitions, including A.H. Harris Construction Supplies 3 Adjustments to Net income have been tax effected at the Company’s combined annual federal and state tax rates of 25.8% for the three and six months ended August 2, 2020 and 25.7% for the three and six months ended August 4, 2019 Six Months Three Months Ended Ended Aug. 2, 2020 Aug. 4, 2019 Aug. 2, 2020 Aug. 4, 2019 Net income $131 $135 $203 $242 Restructuring charges 1 4 - 10 (2) Acquisition and integration costs 2 - - - 1 Tax expense on adjustments 3 (1) - (2) - Adjusted Net Income $134 $135 $211 $241 Weighted average common shares outstanding (in thousands) Basic 160,925 169,546 160,877 169,773 Diluted 161,282 170,057 161,220 170,386 Net Income Per Share - Basic $ 0.81 $ 0.80 $ 1.26 $ 1.43 Net Income Per Share - Diluted $ 0.81 $0.79 $ 1.26 $ 1.42 Adjusted Net Income Per Share - Basic $0.83 $0.80 $1.31 $1.42 Adjusted Net Income Per Share - Diluted $0.83 $0.79 $1.31 $1.41

17 Reconciliation of Non - GAAP Measures: Net Income to Adjusted EBITDA ($ in millions) 1 Depreciation and amortization includes amounts recorded within Cost of sales in the Consolidated Statements of Operations 2 Represents the costs related to separation activities and personnel changes, primarily severance and other employee - related cost s, and costs related to deferring certain projects during the separation preparations. For the six months ended August 4, 2019, the Company recognized a favorable termination of the lease fo r its former corporate headquarters. 3 Represents the costs incurred in the acquisition and integration of business acquisitions, including A.H. Harris Construction Supplies. Six Months Three Months Ended Ended Aug. 2, 2020 Aug. 4, 2019 Aug. 2, 2020 Aug. 4, 2019 Net income $131 $135 $203 $242 Interest expense, net 24 28 49 56 Provision for income taxes 43 48 67 83 Depreciation and amortization 1 30 27 59 54 Restructuring charges 2 4 - 10 (2) Stock - based compensation 5 5 12 12 Acquisition and integration costs 3 - - - 1 Other 1 1 1 1 Adjusted EBITDA $238 $244 $401 $447

18 Return on Invested Capital ($ in millions) Twelve Months Ended Three Months Ended Aug. 2, 2020 Aug. 2, 2020 May. 3, 2020 Feb. 2, 2020 Nov. 3, 2019 Operating Income $661 $198 $121 $137 $205 ( - ) Income Taxes 1 173 49 30 40 54 Net Operating Profit, After Tax $488 $149 $91 $97 $151 Four Qtr. Avg. Short - term Debt $11 $11 $11 $11 $11 ( + ) Long - term Debt 2 1,995 1,772 2,033 2,035 2,138 ( + ) Capital Leases - - - - - ( + ) Book Equity 1,411 1,550 1,413 1,352 1,328 ( - ) Goodwill 1,991 1,991 1,991 1,991 1,991 ( - ) Cash 72 71 147 34 37 Invested Capital $1,353 $1,271 $1,319 $1,373 $1,449 Return on Invested Capital 36.1% Strong Return Profile 1 Calculated using effective tax rate of each quarter 2 Includes discounts and deferred financing costs for each quarter

XML

Cover	Sep. 08, 2020
Document Information [Line Items]
Document Type	8-K
Amendment Flag	false
Document Period End Date	Sep. 08, 2020
Entity File Number	001-35979
Entity Registrant Name	HD SUPPLY HOLDINGS, INC.
Entity Central Index Key	0001573097
Entity Tax Identification Number	26-0486780
Entity Incorporation, State or Country Code	DE
Entity Address, Address Line One	3400 Cumberland Boulevard
Entity Address, City or Town	Atlanta
Entity Address, State or Province	GA
Entity Address, Postal Zip Code	30339
City Area Code	770
Local Phone Number	852-9000
Written Communications	false
Soliciting Material	false
Pre-commencement Tender Offer	false
Pre-commencement Issuer Tender Offer	false
Title of 12(b) Security	Common stock, $0.01 par value per share
Trading Symbol	HDS
Security Exchange Name	NASDAQ
Entity Emerging Growth Company	false
HD Supply, Inc. (Total HDS)
Document Information [Line Items]
Document Type	8-K
Amendment Flag	false
Document Period End Date	Sep. 08, 2020
Entity File Number	333-159809
Entity Registrant Name	HD SUPPLY, INC.
Entity Central Index Key	0001465264
Entity Tax Identification Number	75-2007383
Entity Incorporation, State or Country Code	DE
Entity Address, Address Line One	3400 Cumberland Boulevard
Entity Address, City or Town	Atlanta
Entity Address, State or Province	GA
Entity Address, Postal Zip Code	30339
City Area Code	770
Local Phone Number	852-9000
Written Communications	false
Soliciting Material	false
Pre-commencement Tender Offer	false
Pre-commencement Issuer Tender Offer	false
Entity Emerging Growth Company	false