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Press release from Marketwire

Uni-Select Inc./Second Quarter Results: Increase in Sales and EBITDA of 36%, Increase in Net Earnings of 27% and Reduction of Total Debt of 50 Million Dollars

Tuesday, August 02, 2011

Uni-Select Inc./Second Quarter Results: Increase in Sales and EBITDA of 36%, Increase in Net Earnings of 27% and Reduction of Total Debt of 50 Million Dollars12:03 EDT Tuesday, August 02, 2011BOUCHERVILLE, QUEBEC--(Marketwire - Aug. 2, 2011) - Uni-Select Inc. (TSX:UNS) had sales of 475 million dollars in the second quarter of 2011, compared to 349 million dollars in 2010. Net earnings increased to 18.5 million dollars in the second quarter of 2011 or $0.85 per share compared to 14.5 million dollars or $0.74 per share last year. (Unless otherwise indicated, all the amounts in this press release are expressed in US dollars.)(In million, except earnings per share)2nd QUARTER1st SEMESTER2011201020112010Sales474.6349.2871.4644.6Adjusted EBITDA33.324.756.439.7EBITDA32.323.654.037.4Adjusted earnings19.115.330.523.2Net earnings18.514.528.221.7Adjusted earnings per share0.880.771.411.18Net earnings per share0.850.741.301.10The increase in total sales stems primarily from the addition of FinishMaster's operations combined with an organic growth of 1.8%. Sales from Canadian operations reached 149.9 million dollars, an increase of 2.0% compared to the corresponding quarter of 2010. American operations, for their part, recorded an organic increase of 1.8% to attain 324.8 million dollars.The EBITDA margin adjusted for costs related to IT development and reorganisation of the distribution network equal 7.0% in the second quarter of 2011, a slight decrease from the corresponding quarter in 2010. This variation mainly comes from the rising energy prices as well as the negative changes in the product lines sold."We are pleased to report results that show strong growth. The last few months have confirmed the various strategic elements associated with the FinishMaster acquisition. The synergies announced earlier this year for 2011 were realized and those planned for 2012 are already well underway. Synergies will arise from the complementarity of business models, distribution networks and additional sales opportunities. We are very confident that we can reach the expected 10 million per year synergies within three years" declared Mr. Richard G. Roy, President and CEO of Uni-Select. "As mentioned during the last quarters, the implementation of the integrated enterprise resource planning system started in April, as planned. The final testing phase of two pilot warehouses is almost complete and the implementation will gradually continue throughout the year to finish at the end of 2012, in accordance with the initial schedule. The improvement of corporate stores' performance, increase in sales and asset management are at the heart of the initiatives that we will pursue throughout 2011. Finally, total debt has been reduced by 50 million dollars during the second quarter." added Mr. Roy.For the first semester of 2011, sales amounted to 871 million dollars, compared to 645 million dollars for the same period of last year. Net earnings rose to 28.2 million dollars or $1.30 per share compared to net earnings of 21.7 million dollars or $1.10 per share for the corresponding period of last year.Total sales from the American operations reached 606 million dollars for the first semester of 2011 compared to 396 million dollars for the same period of 2010. For the first semester of 2011, Canadian operations reached total sales of 265 million dollars compared to 248 million dollars for the same period of last year. If we exclude the impact of the exchange rate, organic growth was close to 2.0%.Finally, the Board of Directors of Uni-Select Inc. approved the payment on October 19, 2011 of a quarterly dividend of $0.12 Canadian per common share to shareholders of record at September 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, offers the same products and services to its customers in the United States, where it is the 6th largest distributor; in addition, Uni-Select is, in this market, the premier independent distributor of coatings, body and equipment products to the collision repair industry. 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. The information provided in this press release includes some forward-looking information which includes certain risks and uncertainties, which may cause the final results to be significantly different from those listed or implied within this new 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 contained herein is made as of the date of this press release, and Uni-Select does not undertake to publicly update such forward-looking information to reflect new information, subsequent or otherwise, unless required by applicable securities laws.The following terms do not have any standardized meaning according to the International Financial Reporting Standards (IFRS). As a result, they are therefore unlikely to be comparable to similar measures presented by other corporations."EBITDA": This measurement represents operating income before depreciation, amortization, interest, income taxes, non-controlling interest and loss from discontinued operations. 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. In the Corporation's statement of earnings, EBITDA corresponds to "Earnings before the following items." "Adjusted EBITDA": This measurement corresponds to EBITDA plus non-recurring costs. According to management, adjusted EBITDA is more representative of the Corporation's operational performance and more appropriate in providing additional information to investors because it gives an indication of the Corporation's ability to repay its debts. "Non-recurring items": These are unusual incurred costs that Management regards as not being characteristic or representative of the Corporation's regular operations. They include the following costs: those incurred when disposing of or closing stores, non-capitalizable costs related to the implementation of the enterprise management software suite, costs of integrating recently acquired companies and costs related to the reorganisation of the distribution network. Additional InformationIt is possible to consult the management report and the unaudited financial statements as well as accompanying notes for the second quarter of 2011 in the "Investor Information" section found at the Corporation's website at: www.uniselect.com as well as on SEDAR's website: www.sedar.com. The reader will also find on these websites the Corporation's annual management report as well as other information related to Uni-Select, including the annual notice. Conference Call with the Financial CommunityTuesday August 2, 2011, at 3:00 pm (EST), Uni-Select will host a conference call for the financial community. To join the conference, dial 1-866-696-5910 followed by the access code 8567461. Uni-Select Inc. Consolidated Statement of EarningsThree-month and six-month periods ended June 30, 2011 and 2010(In thousands of US dollars, except earnings per share, unaudited)2nd quarter6 monthsNote2011201020112010$$$$Sales474,645349,184871,429644,642Earnings before the following items:32,30323,59154,00337,396Net gain on disposal of property and equipment––(1,728)–Acquisition-related costs7––2,976–Finance costs, net54,1871,1388,7152,697Depreciation and amortization65,2313,12810,1806,398Earnings before income taxes22,88519,32533,86028,301Income taxes9Current(2,074)2,3817,84012,956Deferred6,6162,467(1,825)(6,234)4,5424,8486,0156,722Net earnings18,34314,47727,84521,579Attributable to shareholders18,50414,52128,16621,702Attributable to non-controlling interests(161)(44)(321)(123)18,34314,47727,84521,579Earnings per share8Basic0.850.741.301.10Diluted0.840.741.301.10Weighted average number of shares outstanding(in thousands)8Basic21,69119,72221,62619,719Diluted22,96319,73022,85619,729Actual shares outstanding (in thousands)21,69119,72221,69119,722The statement of earnings by nature required by International Financial Reporting Standards (IFRS) is presented in Note 17.The accompanying notes are an integral part of the consolidated financial statements.Uni-Select Inc.Consolidated Statement of Comprehensive IncomeThree-month and six-month periods ended June 30, 2011 and 2010(In thousands of US dollars, except earnings per share, unaudited)2nd quarter6 months2011201020112010$$$$Net earnings18,34314,47727,84521,579Other comprehensive incomeEffective portion of changes in fair value of cash flow hedges (net of incomes taxes of $140 and $159 for the three-month and six-month periods ($146 and $672 in 2010))(390) (948 )(442) (2,160 )Net change in fair value of derivative financial instrument designated as cash flow hedges transferred to earnings (net of income taxes of $219 and $453 for the three-month and six-month periods ($264 and $521 in 2010))607 7321,240 1,480217(216)798(680)Unrealized exchange gains (losses) on translation of financial statements to presentation currency453 463(2,221) (54 )Unrealized exchange gains (losses) on translation of long-term debt designated as a hedge of net investments in foreign operations196 (7,469 )6,053 (2,255 )Other comprehensive income866(7,222)4,630(2,989)Comprehensive income19,2097,25532,47518,590Attributable to shareholders19,3707,29932,79618,713Attributable to non-controlling interests(161)(44)(321)(123)19,2097,25532,47518,590The accompanying notes are an integral part of the consolidated financial statements.Uni-Select Inc.Consolidated Statement of Changes in EquitySix-month periods ended June 30, 2011 and 2010(In thousands of US dollars, except earnings per share, unaudited) NoteShare capitalCumulativetranslationaccountAccumulatedchanges in fairvalue ofderivativefinancialinstrumentdesignated ascash flow hedgeEquitycomponent ofconvertibledebentures andcontributedsurplusRetainedearningsTotalNon-controllinginterestTotal equityBalance at January 1, 201039,046–(3,515)298308,326344,1553,256347,411Net earnings (loss) for the period––––21,70221,702(123)21,579Other comprehensive income for the period–(2,309)(680)––(2,989)–(2,989)Total comprehensive income for the period–(2,309)(680)–21,70218,713(123)18,590Contributions by and distributions to shareholdersShares issuance89––––89–89Dividends––––(4,458)(4,458)–(4,458)89–––(4,458)(4,369)–(4,369)Foreign exchange translation adjustment on non-controlling interest–––––– (41) (41)Stock-based compensation expense–––37–37–37Balance at June 30, 201039,135(2,309)(4,195)335325,570358,5363,092361,628Net earnings (loss) for the period––––24,19224,192(143)24,049Other comprehensive income for the period–10,525679––11,204–11,204Total comprehensive income for the period–10,525679–24,19235,396(143)35,253Contributions by and distributions to shareholdersShares redemption(36)–––(330)(366)–(366)Dividends––––(4,499)(4,499)–(4,499)(36)–––(4,829)(4,865)–(4,865)Changes in ownership interests in subsidiaries that do not result in a loss of control Buy-back of non-controlling interest–––––– (488) (488)Foreign exchange translation adjustment on non-controlling interest–––––– 162 162Stock-based compensation expense–––40–40–40Balance at December 31, 201039,0998,216(3,516)375344,933389,1072,623391,730Net earnings (loss) for the period––––28,16628,166(321)27,845Other comprehensive income of the period–3,832798––4,630–4,630Total comprehensive income for the period–3,832798–28,16632,796(321)32,475Contributions by and distributions to shareholdersShares issuance (net of share issuance costs of $2,706)1249,980––––49,980–49,980Issuance of convertible debentures, net of tax effect11–––2,418–2,418–2,418Dividends––––(5,393)(5,393)–(5,393)49,980––2,418(5,393)47,005–47,005Changes in ownership interests in subsidiariesthat do not result in a loss of controlBuy-back of non-controlling interest––––––(229)(229)Foreign exchange translation adjustmenton non-controlling interest––––––8181Stock-based compensation expense–––39–39–39Balance at June 30, 201189,07912,048(2,718)2,832367,706468,9472,154471,101The accompanying notes are an integral part of the consolidated financial statements.Uni-Select Inc. Consolidated Statement of Cash FlowsThree-month and six-month periods ended June 30, 2011 and 2010(In thousands of US dollars, except earnings per share, unaudited)2nd quarter6 monthsNote2011201020112010$$$$OPERATING ACTIVITIESNet earnings18,34314,47727,84521,579Non-cash itemsDepreciation and amortization65,2313,12810,1806,398Income tax expense4,5424,8486,0156,722Compensation cost relating to stock option plans20183937Pension expense in excess of contributions(182)283(90)531Finance costs, net54,1871,1388,7152,697Net gain on disposal of property and equipment--(1,728)–32,14123,89250,97637,964Changes in working capital items34,7597,303(26,517)(27,301)Interests paid(2,989)(1,502)(6,146)(2,940)Income taxes paid(3,604)(1,641)(12,082)(7,138)Cash flows from continuing operating activities60,30728,0526,231585Cash flows from discontinued operating activities–(9)–(1,067)Cash flows from operating activities60,30728,0436,231(482)INVESTING ACTIVITIESBusiness acquisitions7--(222,765)(4,008)Buyback of non-controlling interests7(229)-(229)-Business disposals1578031572,168Balance of purchase price801961171,109Advances to merchant members(3,836)(342)(6,607)(1,026)Receipts on advances to merchant members6996511,6091,700Property and equipment(1,413)(2,938)(4,586)(5,740)Disposal of property and equipment4,2713665,681725Intangible assets10(7,951)(8,778)(15,138)(14,955)Cash flows from investing activities(8,222)(10,042)(241,761)(20,027)FINANCING ACTIVITIESBank indebtedness(6,658)(16,286)(7,524)9,250Long-term debt1187633363,21133Repayment of long-term debt(42,936)(36)(213,975)(62)Merchant members' deposits in guarantee fund125176227237Issuance of convertible debentures, net of issuance costs11--49,777–Issuance of shares, net of issuance costs12--49,36189Dividends paid(2,778)(2,215)(5,074)(4,460)Cash flows from financing activities(51,371)(18,328)236,0035,087Effect of exchange rate changes on cash-4772477Increase (Decrease) in cash714149475(14,945)Cash, beginning of period1404937915,144Cash, end of period854198854198The accompanying notes are an integral part of the consolidated financial statements.Uni-Select Inc.Consolidated Statement of Financial PositionJune 30, 2011, December 31, 2010 and January 1, 2010(In thousands of US dollars, except earnings per share, unaudited)NoteJune 30, 2011December 31, 2010January 1, 2010$$$ASSETSCurrent assetsCash85437915,144Trade and other receivables228,340157,219143,742Income taxes receivable11,0677,0203,687Inventory493,778404,336375,255Prepaid expenses11,9657,4926,052Assets related to discontinued operations––2,863Total current assets746,004576,446546,743Investments and advances to merchant members21,40416,85416,082Property and equipment40,92334,38937,092Intangible assets10146,50259,26427,401Goodwill10184,22994,72589,777Deferred tax assets20,13120,02516,699TOTAL ASSETS1,159,193801,703733,794LIABILITIESCurrent liabilitiesBank indebtedness4,19111,45542Trade and other payables280,121194,976181,687Dividends payable2,6822,2942,195Instalments on long-term debt and on merchant members'deposits in guarantee fund10,969 269 385Liabilities related to discontinued operations––1,532Total current liabilities297,963208,994185,841Long-term debt11312,724170,610170,373Convertible debentures1148,155––Merchant members' deposits in guarantee fund8,0567,7236,963Derivative financial instruments3,7244,8164,951Deferred tax liabilities17,47017,83018,255TOTAL LIABILITIES688,092409,973386,383EQUITYShare capital1289,07939,09939,046Contributed surplus414375298Equity component of convertible debentures112,418––Retained earnings367,706344,933308,326Accumulated other comprehensive income9,3304,700(3,515)TOTAL SHAREHOLDERS' EQUITY468,947389,107344,155Non-controlling interest2,1542,6233,256TOTAL EQUITY471,101391,730347,411TOTAL LIABILITIES AND EQUITY1,159,193801,703733,794 The accompanying notes are an integral part of the consolidated financial statements.FOR FURTHER INFORMATION PLEASE CONTACT: (450) 641-6903Source: UNI-SELECT INC.www.uni-select.comORPresident and CEOMr. Richard G. RoyORVice President and Chief Financial OfficerMr. Denis Mathieu