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Press release from Marketwire

Uni-Select inc.: Increase in Revenues and Net Earnings of Over 34% in the First Quarter

Wednesday, May 11, 2011

Uni-Select inc.: Increase in Revenues and Net Earnings of Over 34% in the First Quarter11:44 EDT Wednesday, May 11, 2011BOUCHERVILLE, QUEBEC--(Marketwire - May 11, 2011) - Uni-Select inc. (TSX:UNS) reported sales of US$397 million in the first quarter of 2011, compared to US$295 million in 2010. Net earnings increased to US$9.7 million in the first quarter of 2011 or US$0.45 per share compared to US$7.2 million or US$0.36 per share last year. Earnings for the period, adjusted for non-recurring items, namely the costs related to the acquisition of FinishMaster, a gain on disposal of a building and other less significant elements were US$11.3 million or US$0.53 per share compared to US$0.40 in 2010.All figures in this release are in US dollars and presented according to IRFS accounting standards.1st QUARTER(in millions of US $, except earnings per share)20112010Sales396.8295.5Adjusted EBITDA23.115.0EBITDA21.713.8Adjusted earnings11.37.9Net earnings9.77.2Adjusted earnings per share0.530.40Net earnings per share0.450.36The increase in sales primarily stems from the addition of FinishMaster and organic growth of 1%. If the impact of the exchange rate is excluded, sales from Canadian operations reached US$115.3 million, representing an organic increase of 1.9% compared to the same period of last year. American operations recorded an organic sales increase of 0.4% to reach US$281.4 million.The operating margin, adjusted for costs related to IT development, increased from 5.1% in the first quarter of 2010 to 5.8% for this year first quarter. The FinishMaster contribution and cost reduction programs combined with improved buying conditions offset lower margin pressure related to changes in the product mix and market conditions."We are pleased to report a strong growth in sales. We remain enthusiastic about the potential benefit associated with FinishMaster. The management team is actively working at the integration program of the FinishMaster operations while remaining dedicated to increase the efficiency of existing Uni-Select operations. Synergies will arise from the complementarity of business models, distribution networks and clientele. As portrayed by our financial statements, the acquisition was immediately accretive. We remain confident that the annual synergies will reach US$10 million within three years" declared Mr. Richard G. Roy, President and CEO of Uni-Select."As mentioned during the last quarters, the implementation of the enterprise resource planning system was initiated last month, on time, and will continue gradually throughout the next few months to finish by the end of 2012 keeping with our initial timeline. The improvement of stores' performance, the optimization of sales; distribution activities and assets management are at the heart of the initiatives that we will pursue throughout 2011" added Mr. Roy.Finally, the Board of Directors of Uni-Select Inc. has approved the payment on July 20, 2011 of a quarterly dividend of $0.12 Canadian per common share to shareholders of record as of June 30, 2011. This dividend is an eligible dividend for tax purposes.About Uni-Select Inc. Founded in 1968, Uni-Select™ is a Canadian leader in the distribution of automotive replacement parts, equipment, tools and accessories. Uni-Select USA, Inc., a subsidiary of the Uni-Select, provides services to customers in the United States, where it is the 6th largest distributor. The Uni-Select network includes over 2,500 independent jobbers and services more than 3,500 points of sale in North America. Uni-Select is headquartered in Montreal. Uni-Select shares (UNS) are traded on the TSX. With the acquisition of FinishMaster, the proportion of sales of Uni-Select generated in the USA attains approximately 70%; it is the opinion of management that, from hereon, it is appropriate to report on the activities of Uni-Select in US dollars, the functional currency where the majority of its sales are made. As a result, unless otherwise indicated, all the amounts listed in this press release are in US dollars. The information in this press release includes some forward-looking statements which, by nature, include certain risks and uncertainties, that may cause the final results to be significantly different from those listed or implied within this news release. For additional information with respect to risks and uncertainties, refer to the Annual Report filed by Uni-Select with the Canadian Securities Commissions. The forward-looking information or statements contained herein is made as of the date of this press release, and Uni-Select does not undertake to update such forward-looking information or statements to reflect new information, subsequent or otherwise, unless required by applicable securities laws.The following expressions do not have any standardised meaning according to the International Financial Reporting Standards (IFRS). As a result, they may be unlikely to be comparable to similar measures presented by other corporations."EBITDA": represents operating income before depreciation, amortization, financing costs, income taxes, acquisition related costs, gain on disposal of property and equipment and non-controlling interest. This measurement is a widely accepted financial indicator of a company's ability to service and incur debt. It should not be considered by an investor as an alternative to operating income or net earnings, as an indicator of operating performance or cash flows, or as a measurement of liquidity, but as additional information. Because EBITDA is not a measurement defined by IFRS, it may not be comparable to the EBITDA of other companies. In the Corporation's statement of earnings, EBITDA corresponds to "Earnings before the following items." "Adjusted EBITDA": corresponds to EBITDA plus non-recurring costs. Management is of the view that adjusted EBITDA is more representative of the Corporation's operational performance and is appropriate additional information to investors because it gives an indication of the Corporation's ability to repay its debts. "Non-recurring items": are unusual incurred costs that management regards as not being characteristic or representative of the Corporation's regular operations. They include, without limitation, the following: costs incurred when disposing of or closing stores, non-capitalizable costs related to the implementation of the enterprise management software, costs associated with the integration of recently acquired companies, and changes in estimates of provisions for obsolescence of inventory. Additional informationThe Management Report and unaudited interim consolidated financial statements with notes for the first quarter of 2011 can be found in the "Investor Relations" section of the Corporation's website at and on the SEDAR website at The Corporation's Annual Report, along with other information about Uni-Select, including its Annual Information Form, can also be found on the Uni-Select and SEDAR websites. Telephone conference with the financial communityOn Wednesday May 11, 2011, at 3:30 p.m. (EST), Uni-Select will hold a telephone conference for the financial community. To join the conference, please call 1-877-385-4099 followed by the access code 1286598 #. Uni-Select Inc. Consolidated Statement of EarningsThree-month periods ended March 31, 2011 and 2010(In thousands of US dollars, except earnings per share, unaudited)Note20112010$$Sales396,784295,458Earnings before the following items:21,70013,805Net gain on disposal of property and equipment8(1,728)–Acquisition-related costs72,976–Finance costs, net54,5281,559Depreciation and amortization64,9493,270Earnings before income taxes10,9758,976Income taxes9Current9,91410,575Deferred(8,441)(8,701)1,4731,874Net earnings9,5027,102Attributable to shareholders9,6627,183Attributable to non-controlling interests(160)(81)9,5027,102Net earnings per shareBasic and diluted0.450.36Weighted average shares outstanding (in thousands)Basic21,55919,716Diluted21,56819,716Actual shares outstanding (in thousands)21,69119,708The statement of earnings by nature required by International Financial Reporting Standards is presented in Note 17.The accompanying notes are an integral part of the consolidated financial statements.Uni-Select Inc.Consolidated Statement of Comprehensive IncomeThree-month periods ended March 31, 2011 and 2010(In thousands of US dollars, unaudited)20112010$$Net earnings9,5027,102Other comprehensive incomeEffective portion of changes in fair value of cash flow hedges (net of income taxes of $(19) (($472) in 2010))(52)(1,212)Net change in fair value of derivative financial instrument designated as cash flow hedges transferred to earnings (net of income taxes of $234 ($248 in 2010))633748581(464)Unrealized exchange losses on translation of financial statements to presentation currency(2,674)(517)Unrealized exchange gains on translation of long-term debt designated as a hedge of net investments in foreign operations7,8045,214Other comprehensive income5,7114,233Comprehensive income15,21311,335Attributable to shareholders15,37311,416Attributable to non-controlling interests(160)(81)15,21311,335The accompanying notes are an integral part of the consolidated financial statements. Uni-Select Inc. Consolidated Statement of Cash Flows Three-month periods ended March 31, 2011 and 2010 (In thousands of US dollars, unaudited)Note20112010$$OPERATING ACTIVITIESNet earnings9,5027,102Non-cash itemsDepreciation and amortization64,9493,270Income tax expense1,4731,874Compensation cost relating to stock option plans1919Pension expense in excess of contributions92328Finance costs54,5281,559Net gain on disposal of property and equipment8(1,728)–18,83514,152Changes in working capital items(61,272)(34,685)Interests paid(3,157)(1,438)Income taxes paid(8,478)(5,497)Cash flows from continuing operating activities(54,072)(27,468)Cash flows from discontinued operating activities–(1,058)Cash flows from operating activities(54,072)(28,526)INVESTING ACTIVITIESBusiness acquisitions7(222,765)(4,008)Business disposals–1,365Balance of purchase price37913Advances to merchant members(2,771)(684)Receipts on advances to merchant members9101,050Property and equipment(3,173)(2,802)Disposal of property and equipment81,410359Intangible assets10(7,187)(6,177)Cash flows from investing activities(233,539)(9,984)FINANCING ACTIVITIESBank indebtedness(866)25,536Long-term debt11362,335–Repayment of long-term debt(171,039)(26)Merchant members' deposits in guarantee fund9861Issuance of convertible debentures, net of issuance costs1149,777–Issuance of shares, net of issuance costs1249,36189Dividends paid(2,296)(2,245)Cash flows from financing activities287,37023,415Effect of exchange rate changes on cash2–Decrease in cash(239)(15,095)Cash, beginning of period37915,144Cash, end of period14049The accompanying notes are an integral part of the consolidated financial statements. Uni-Select Inc.Consolidated Statement of Financial PositionMarch 31, 2011, December 31, 2010 and January 1, 2010(In thousands of US dollars, unaudited)NoteMarch 31, 2011December 31, 2010January 1, 2010$$$ASSETSCurrent assetsCash14037915,144Trade and other receivables213,248157,219143,742Income taxes receivable5,2877,0203,687Inventory482,262404,336375,255Prepaid expenses15,9277,4926,052Assets related to discontinued operations––2,863Total current assets716,864576,446546,743Investments and advances to merchant members19,22416,85416,082Property and equipment40,18734,38937,092Intangible assets10141,77559,26427,401Goodwill10184,18094,72589,777Deferred tax assets25,06420,02516,699TOTAL ASSETS1,127,294801,703733,794LIABILITIESCurrent liabilitiesBank indebtedness11,39511,45542Trade and other payables215,805194,976181,687Dividends payable2,6792,2942,195Instalments on long-term debt and on merchant members' deposits in guarantee fund9,208269385Liabilities related to discontinued operations––1,532Total current liabilities239,087208,994185,841Long-term debt11356,290170,610170,373Convertible debentures1147,832––Merchant members' deposits in guarantee fund7,8877,7236,963Derivative financial instruments4,0204,8164,951Deferred tax liabilities15,40417,83018,255TOTAL LIABILITIES670,520409,973386,383EQUITYShare capital1289,07939,09939,046Contributed surplus394375298Equity component of convertible debentures112,418––Retained earnings351,899344,901308,283Accumulated other comprehensive income10,4094,698(3,515)TOTAL SHAREHOLDERS' EQUITY454,199389,073344,112Non-controlling interest2,5752,6573,299TOTAL EQUITY456,774391,730347,411TOTAL LIABILITIES AND EQUITY1,127,294801,703733,794The accompanying notes are an integral part of the consolidated financial statements.FOR FURTHER INFORMATION PLEASE CONTACT: Mr. Richard G. RoyUni-Select Inc.President and Chief Executive Officer(450) 641-6903ORMr. Denis MathieuUni-Select Inc.Vice President and Chief Financial Officer(450)