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Press release from Marketwire

Uni-Select Inc.: Third Quarter Results

- Increase in sales of 41%; - Increase in EBITDA of 27% and; - Increase in net earnings of 26%

Tuesday, November 08, 2011

Uni-Select Inc.: Third Quarter Results12:55 EST Tuesday, November 08, 2011BOUCHERVILLE, QUEBEC, CANADA--(Marketwire - Nov. 8, 2011) - Uni-Select Inc. (TSX:UNS) had sales of 472 million dollars in the third quarter of 2011, compared to 335 million dollars in 2010. Net earnings increased to 16.6 million dollars in the third quarter of 2011 or $0.77 per share compared to 13.2 million dollars or $0.67 per share last year.(Unless otherwise indicated, all the amounts in this press release are expressed in US dollars.)(In millions, except earnings per share)3rdQUARTERNINE-MONTH PERIOD2011201020112010Sales472.5335.31,343.9980.0Adjusted EBITDA30.825.687.265.3EBITDA29.923.583.960.9Adjusted earnings17.214.547.737.7Net earnings16.613.244.834.9Adjusted earnings per share0.790.732.201.91Net earnings per share0.770.672.071.77The increase in total sales stems primarily from the addition of FinishMaster's operations combined with an organic growth of 4.1%. Sales from Canadian operations reached 149.6 million dollars, an increase of 19 million dollars compared to the corresponding quarter of 2010. This increase arises from an organic growth of 8.2% during the quarter as well as from the positive effects of the variation of the Canadian dollar vis-à-vis the US dollar. American operations, for their part, recorded an organic growth of 2.4% to reach sales of 322.9 million dollars.The EBITDA margin was 6.3% in the third quarter of 2011, a decrease over the corresponding quarter of last year. This variation mainly comes from rising energy prices, decreasing product prices and changes in the product mix."We are pleased to report significant increase in sales resulting from organic and acquisition growth. FinishMaster contributed significantly to the improvement of our quarterly results and the integration of activities such as the consolidation of certain stores is proceeding as planned. 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."Finally, the fourth quarter results will benefit from the implementation in the third quarter of proactive margin improvement, for which we have begun to see the benefits. Moreover, the impact on sales from the operations in Florida acquired from Parts Depot in late October should help results. By the end of 2012, these operations will have been fully integrated within our operations, as well as with those of FinishMaster" added Mr. Roy.For the nine-month period ended September 30, 2011, sales amounted to 1,344 million dollars, compared to 980 million dollars for the same period of last year. Net earnings rose to 44.8 million dollars or $2.07 per share compared to net earnings of 34.9 million dollars or $1.77 per share for the corresponding period of last year.For the nine-month period ended September 30, 2011, Canadian operations reached total sales of 415 million dollars compared to 379 million dollars for the same period of last year. If we exclude the impact of the exchange rate, organic growth was over 4.1%.Total sales from the American operations reached 929 million dollars for the first nine months of 2011 compared to 601 million dollars for the same period of 2010, including an organic growth of 1.5%.Finally, the Board of Directors of Uni-Select Inc. approved the payment on January 20, 2012 of a quarterly dividend of $0.12 Canadian per common share to shareholders of record at December 30, 2011. This dividend is an eligible dividend for tax purposes.About Uni-SelectFounded in 1968, Uni-SelectTM is a Canadian leader in the distribution of automotive replacement parts, equipment, tools and accessories. Uni-Select USA, Inc., a subsidiary of 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 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 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, finance costs, acquisition related costs, income taxes, gains on disposal of fixed assets 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. 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 Third 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 November 8, 2011, at 3 pm (EST), Uni-Select will host a conference call for the financial community. To join the conference, dial 1-866-696-5910 followed by 8567461Uni-Select Inc. Consolidated Statement of EarningsThree and nine-month periods ended September 30, 2011 and 2010(In thousands of US dollars, except earnings per share, unaudited)Three-month periodNine-month periodNote2011201020112010$$$$Sales472,491335,3171,343,920979,959Earnings before the following items:29,90423,54283,90760,938Net gain on disposal of property and equipment––(1,728)–Acquisition-related costs7––2,976–Finance costs, net54,0091,93912,7244,636Depreciation and amortization66,2483,10016,4289,498Earnings before income taxes19,64718,50353,50746,804Income taxes9Current(127)3,2271,93216,183Deferred3,2982,1477,254(4,087)3,1715,3749,18612,096Net earnings16,47613,12944,32134,708Attributable to shareholders16,63313,15244,79934,854Attributable to non-controlling interests(157)(23)(478)(146)16,47613,12944,32134,708Earnings per share8Basic0.770.672.071.77Diluted0.750.672.051.77Weighted average number of shares outstanding(in thousands)8Basic21,67819,72021,64319,720Diluted22,92519,72822,86319,729Shares outstanding (in thousands)21,66719,70921,66719,709The Statement of Earnings by nature required by International Financial Reporting Standards ("IFRS") is presented in Note 19.The accompanying notes are an integral part of the Consolidated Financial Statements.Uni-Select Inc.Consolidated Statement of Comprehensive IncomeThree and nine-month periods ended September 30, 2011 and 2010(In thousands of US dollars, unaudited)Three-month periodNine-month period2011201020112010$$$$Net earnings16,47613,12944,32134,708Other comprehensive incomeEffective portion of changes in fair value of cash flow hedges (net of incomes taxes of $37 and $196 for the three and nine-month periods ($286 and $958 in 2010))(87) (773)(529) (2,933)Net change in fair value of derivative financial instruments designated as cash flow hedges transferred to earnings (net of income taxes of $254 and $707 for the three and nine-month periods ($259 and $780 in 2010))620 7001,860 2,180533(73)1,331(753)Unrealized exchange gains on the translation of financial statements to the presentation currency11,193 4278,972 373Unrealized exchange gains (losses) on the translation of long-term debt designated as a hedge of net investments in foreign operations(16,192) 5,008(10,139) 2,753Other comprehensive income(4,466)5,3621642,373Comprehensive income12,01018,49144,48537,081Attributable to shareholders12,16718,51444,96337,227Attributable to non-controlling interests(157)(23)(478)(146)12,01018,49144,48537,081The accompanying notes are an integral part of the Consolidated Financial Statements.Uni-Select Inc.Consolidated Statement of Changes in EquityNine-month periods ended September 30, 2011 and 2010 (In thousands of US dollars, unaudited) NoteShare capitalCumulativetranslationaccountAccumulated changes inthe fair value ofderivative financialinstruments designatedas cash flow hedgesEquity components ofconvertibledebentures andcontributed surplusRetained earningsTotalNon-controllinginterestsTotal equityBalance at January 1, 201039,046–(3,515)298308,326344,1553,256347,411Net earnings (loss) for the period––––34,85434,854(146)34,708Other comprehensive income for the period–3,126(753)––2,373–2,373Comprehensive income for the period–3,126(753)–34,85437,227(146)37,081Contributions by and distributions to shareholdersShare issuance57––––57–57Share redemptions––––(296)(296)–(296)Dividends––––(6,681)(6,681)–(6,681)57–––(6,977)(6,920)–(6,920)Foreign exchange translation adjustment on non-controlling interests––––––(196)(196)Stock-based compensation expense–––56–56–56Balance at September 30, 201039,1033,126(4,268)354336,203374,5182,914377,432Net earnings (loss) for the period––––11,04011,040(120)10,920Other comprehensive income for the period–5,090752––5,842–5,842Comprehensive income for the period–5,090752–11,04016,882(120)16,762Contributions by and distributions to shareholdersShare redemptions(4)–––(34)(38)–(38)Dividends––––(2,276)(2,276)–(2,276)(4)–––(2,310)(2,314)–(2,314)Changes in ownership interests in subsidiaries that do not result in a loss of control––––––(488)(488)Repurchase of non-controlling interest––––––317317Foreign exchange translation adjustment on non-controlling interest Stock-based compensation expense–––21–21–21Balance at December 31, 201039,0998,216(3,516)375344,933389,1072,623391,730Net earnings (loss) for the period––––44,79944,799(478)44,321Other comprehensive income of the period–(1,167)1,331––164–164Comprehensive income for the period–(1,167)1,331–44,79944,963(478)44,485Contributions by and distributions to shareholdersShare issuance (net of share issuance costs of $2,706)1249,980––––49,980–49,980Issuance of convertible debentures, net of tax effect11–––1,687–1,687–1,687Share redemptions(117)–––(541)(658)–(658)Dividends––––(7,991)(7,991)–(7,991)49,863––1,687(8,532)43,018–43,018Changes in ownership interests in subsidiaries that do not result in a loss of control–––––-(634)(634)Repurchase of non-controlling interests–––––-(40)(40)Foreign exchange translation adjustment on non-controlling interests Stock-based compensation expense––-59-59–59Balance at September 30, 201188,9627,049(2,185)2,121381,200477,1471,471478,618The accompanying notes are an integral part of the Consolidated Financial Statements.Uni-Select Inc. Consolidated Statement of Cash FlowsThree and nine-month periods ended September 30, 2011 and 2010(In thousands of US dollars, unaudited)Three-month periodNine-month periodNote2011201020112010$$$$OPERATING ACTIVITIESNet earnings16,47613,12944,32134,708Non-cash itemsDepreciation and amortization66,2483,10016,4289,498Income tax expense3,1715,3749,18612,096Finance costs, net54,0091,93912,7244,636Net gain on disposal of property and equipment––(1,728)–Other non-cash items4323638160430,33623,57881,31261,542Changes in working capital items(461)11,336(29,296)(15,958)Interest paid(6,168)(1,577)(12,316)(4,517)Income taxes recovered (paid)799(2,947)(8,959)(10,085)Cash flows from operating activities from continuing operations24,506 30,39030,741 30,982Cash flows from operating activities from discontinued operations– 15– (1,052)Cash flows from operating activities24,50630,40530,74129,930INVESTING ACTIVITIESBusiness acquisitions7(237)–(223,002)(4,008)Repurchase of non-controlling interests7(203)–(432)–Proceeds from business disposals–171572,185Balances of purchase prices335894541,198Investments and advances to merchant members(1,644)(775)(8,251)(1,801)Receipts on advances to merchant members1771,0571,8022,757Acquisitions of property and equipment(3,363)(492)(7,936)(6,232)Disposal of property and equipment3023755,9841,100Intangible assets10(6,038)(13,668)(21,157)(28,623)Cash flows from investing activities(10,671)(13,397)(252,381)(33,424)FINANCING ACTIVITIESNet increase (decrease) in bank indebtedness886(8,790)55460Increase in long-term debt1117,232–373,74425Repayment of long-term debt(29,242)(11)(243,216)(73)Merchant members' deposits in the guarantee fund(37)142178379Issuance of convertible debentures, net of issuance costs11––49,741–Share issuances, net of issuance costs12––49,36189Share redemptions(658)(236)(658)(236)Dividends paid(2,604)(2,221)(7,680)(6,681)Cash flows from financing activities(14,423)(11,116)221,525(6,037)Effect of exchange rate changes on cash(22)(334)(20)143Increase (Decrease) in cash(610)5,558(135)(9,388)Cash, beginning of period85419837915,144Cash, end of period2445,7562445,756The accompanying notes are an integral part of the Consolidated Financial Statements.Uni-Select Inc.Consolidated Statement of Financial PositionSeptember 30, 2011, December 31, 2010 and January 1, 2010(In thousands of US dollars, unaudited)September 30,December 31,January 1,Note201120102010$$$ASSETSCurrent assetsCash24437915,144Trade and other receivables223,681157,219143,742Income taxes receivable10,4297,0203,687Inventory506,292404,336375,255Prepaid expenses10,9807,4926,052Assets related to discontinued operations––2,863Total current assets751,626576,446546,743Investments and advances to merchant members20,71216,85416,082Property and equipment42,17634,38937,092Intangible assets10148,86059,26427,401Goodwill10181,68094,72589,777Deferred tax assets18,87920,02516,699TOTAL ASSETS1,163,933801,703733,794LIABILITIESCurrent liabilitiesBank indebtedness11,11911,45542Trade and other payables287,679194,976181,687Dividends payable2,5162,2942,195Instalments on long-term debt and on merchant members'deposits in the guarantee fund13,749269385Liabilities related to discontinued operations––1,532Total current liabilities315,063208,994185,841Long-term debt11293,853170,610170,373Convertible debentures1146,299––Merchant members' deposits in the guarantee fund7,6737,7236,963Derivative financial instruments2,9934,8164,951Deferred tax liabilities19,43417,83018,255TOTAL LIABILITIES685,315409,973386,383EQUITYShare capital1288,96239,09939,046Contributed surplus434375298Equity component of convertible debentures111,687––Retained earnings381,200344,933308,326Accumulated other comprehensive income4,8644,700(3,515)TOTAL SHAREHOLDERS' EQUITY477,147389,107344,155Non-controlling interests1,4712,6233,256TOTAL EQUITY478,618391,730347,411TOTAL LIABILITIES AND EQUITY1,163,933801,703733,794The 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 Chief Executive OfficerMr. Richard G. RoyORVice President and Chief Financial OfficerMr. Denis Mathieu