Uni-Select Inc.
TSX : UNS

Uni-Select Inc.

March 08, 2012 11:13 ET

2011, A Record-Breaking Year for Uni-Select

BOUCHERVILLE, QUEBEC--(Marketwire - March 8, 2012) -

  • Revenue increase of 39%
  • EBITDA increase of 40%
  • Net earnings increase of 28%

Dividend raise of 8.3%

Uni-Select Inc. (TSX:UNS) generated sales of 436.7 million dollars in the fourth quarter of 2011, compared to 305.4 million dollars in the same period of 2010. Net earnings increased to 11.7 million dollars in the fourth quarter of 2011 or $0.54 per share compared to 10.2 million dollars or $0.52 per share for the same quarter of the previous year.

(Unless otherwise indicated, all amounts in this press release are expressed in US dollars and are presented in keeping with International Financial Reporting Standards (IFRS).)

(In millions, except earnings per share)4thQUARTERTWELVE-MONTH PERIOD
2011201020112010
Sales436.7305.41,780.61,285.4
Adjusted EBITDA22.715.3109.980.6
EBITDA21.414.2105.375.1
Adjusted earnings12.810.860.548.5
Earnings from continuing operations11.710.256.545.1
Adjusted earnings per share0.590.552.792.46
Earnings per share from continuing operations0.540.522.612.29

The increase in total sales stems primarily from the addition of FinishMaster's operations and the acquisition of the activities of Parts Depot in the last quarter combined with organic growth of 3.4%. The Canadian operations, with sales amounting to 123.5 million dollars, recorded organic growth of 1.6% during the fourth quarter. The American operations recorded organic sales growth of 4.2% to reach 313.2 million dollars.

The adjusted EBITDA margin was 5.2% in the fourth quarter of 2011, an increase of 0.2% compared to the same quarter in 2010. This increase is mainly the result of improvements in the terms and conditions extended by suppliers of products partially offset by pressures on margins resulting from an unfavourable variation in the mix of customers.

"We are proud to record improved sales and net earnings for the eighth quarter in a row. Growth has come from an increase in organic sales and a contribution of recently acquired businesses. FinishMaster largely contributed to the improvement of our quarterly results. The integration plan of FinishMaster, including store consolidation, evolves as planned. We remain confident that the target of 10 million dollars in annual synergies within two years is attainable." said Mr. Richard G. Roy, President and Chief Executive Officer of Uni-Select.

"In addition, the fourth quarter results were favourably impacted by the operations derived from the assets acquired from Parts Depot in the last quarter. The 2012 results will also benefit from the contribution of this latest addition and from the proactive margin management initially reflected in the results of the last quarter." added Mr. Roy.

Financial Highlights for Fiscal Year Ended December 31, 2011

For the period ended December 31, 2011, sales amounted to 1,780.6 million dollars compared to sales of 1,285.4 million in 2010. Net earnings totalled 56.5 million dollars or $2.61 per share compared to 45.1 million dollars or $2.29 per share for the same period in 2010.

Canadian operations recorded sales of 538.3 million dollars compared to 503.5 million dollars in the previous year. Organic growth was in excess of 3.5%. The organic growth calculation takes into account that there were two business days less in 2011 and excludes the exchange rate fluctuation from Canadian to American dollar.

Sales from American operations during the same period in 2011 reached 1,242.3 million dollars compared to 781.8 million dollars in 2010, including an organic growth of 2.1%.

The adjusted EBITDA margin stood at 6.2% in 2011, a slight decrease when compared to 6.3% recorded in 2010. This decrease is mainly due to an increase in fuel cost that negatively impacted delivery charges and to pressures on margins resulting from an unfavourable variation in customer mix. These items were partially offset by improvements in the terms and conditions extended by suppliers.

In closing, the Board of Directors of Uni-Select declared a dividend of CDN$0.13 per share payable on April 20, 2012 to common shareholders of record on March 30, 2012. This improvement in the dividend represents an increase of 8.3% compared to the preceding quarter. This dividend is an eligible dividend for tax purposes.

About Uni-Select

Founded in 1968, Uni-Select is a major distributor of replacement parts, equipment, tools and accessories for motor vehicles in North America. Leader in the Canadian industry, Uni-Select is the 6th largest distributor in the United States and the leading independent distributor of automotive paint and related products. With 6,600 employees, 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 Boucherville and its shares are traded on the Toronto Stock Exchange (TSX) under the symbol UNS.

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.

  1. "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 corporation'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."

  2. "Adjusted EBITDA": This measurement corresponds to EBITDA resulting from operational activities, excluding some adjustments. 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.

  3. "Adjustments": 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 resource planning software and costs related to the reorganisation of the distribution network. Excluding these items does not mean that they are not recurrent.

Adjustments have been made to some 2010 figures in order to reflect the transition from Canadian Generally Accepted Accounting Principles (GAAP) to international standards.

Additional Information

It is possible to consult the management report and the unaudited financial statements as well as accompanying notes for the Fourth Quarter of 2011 in the "Investor Information" section found at the Corporation's website at: www.uniselect.com as well as on SEDAR's: www.sedar.com. The reader will also find on these websites the Corporation's audited Annual Report as well as other information related to Uni-Select, including the Annual Notice.

Conference Call

Thursday, March 8, 2012 at 3 PM (EST), Uni-Select will host a conference call to discuss the 2011 Fourth Quarter financial results. To join the conference, dial 1 866 696-5910 followed by 8567461.

UNI-SELECT INC.
CONSOLIDATED STATEMENTS OF EARNINGS
Three and twelve-month periods ended December 31, 2011 and 2010
(In thousands of US dollars, except earnings per share, unaudited)
Three-month period Twelve-month
period
Note 2011 2010 2011 2010
$ $ $ $
Sales 436,650 305,416 1,780,570 1,285,375
Earnings before the following items: 21,361 14,180 105,268 75,118
Net gain on disposal of property and equipment - - (1,728 ) -
Acquisition-related costs 7 301 - 3,277 -
Finance costs, net 5 4,559 2,245 17,283 6,948
Depreciation and amortization 6 5,738 2,701 22,166 12,132
Earnings before income taxes 10,763 9,234 64,270 56,038
Income taxes 10
Current (7,376 ) (2,346 ) (5,444 ) 13,837
Deferred 6,480 1,460 13,734 (2,627 )
(896 ) (886 ) 8,290 11,210
Earnings from continuing operations 11,659 10,120 55,980 44,828
Loss from discontinued operations 8 - (914 ) - (914 )
Net earnings 11,659 9,206 55,980 43,914
Attributable to shareholders 11,746 9,326 56,545 44,180
Attributable to non-controlling interests (87 ) (120 ) (565 ) (266 )
11,659 9,206 55,980 43,914
Earnings per share 9
Basic
From continuing operations 0.54 0.52 2.61 2.29
From discontinued operations - (0.05 ) - (0.05 )
Net earnings 0.54 0.47 2.61 2.24
Diluted
From continuing operations 0.54 0.52 2.59 2.29
From discontinued operations - (0.05 ) - (0.05 )
Net earnings 0.54 0.47 2.59 2.24
Weighted average number of shares outstanding
(in thousands) 9
Basic 21,653 19,708 21,646 19,717
Diluted 21,655 19,716 22,871 19,725

The 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 Interim Consolidated Financial Statements.

UNI-SELECT INC.
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
Three and twelve-month periods ended December 31, 2011 and 2010
(In thousands of US dollars, unaudited)
Three-month period Twelve-month period
2011 2010 2011 2010
$ $ $ $
Net earnings 11,659 9,206 55,980 43,914
Other comprehensive income
Effective portion of changes in fair value of cash flow hedges (net of incomes taxes of $57 and $254 for the three and twelve-month periods ($17 and $935 in 2010))

(156


)


(42


)


(685


)


(2,975


)
Net change in fair value of derivative financial instruments designated as cash flow hedges transferred to earnings (net of income taxes of $168 and $875 for the three and twelve-month periods ($290 and $1,070 in 2010))


512



794



2,372



2,974
356 752 1,687 (1 )
Unrealized exchange gains (losses) on the translation of financial statements to the presentation currency
(3,921

)

9

5,051

382
Unrealized exchange gains (losses) on the translation of debt designated as a hedge of net investments in foreign operations
4,917

5,081

(5,222

)

7,834
Defined benefit plan actuarial losses (net of income taxes of $2,601 ($1,184 in 2010))
(7,069

)

(3,217

)

(7,069

)

(3,217

)
Other comprehensive income (5,717 ) 2,625 (5,553 ) 4,998
Comprehensive income 5,942 11,831 50,427 48,912
Attributable to shareholders 6,029 11,951 50,992 49,178
Attributable to non-controlling interests (87 ) (120 ) (565 ) (266 )
5,942 11,831 50,427 48,912

The accompanying notes are an integral part of the Interim Consolidated Financial Statements.

UNI-SELECT INC.
CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY
Years ended December 31, 2011 and 2010
(In thousands of US dollars, unaudited)
Equity
Accumulated component of
other convertible
comprehensive debentures and Non-
Share income (loss) contributed Retained controlling Total
Note capital (note 14) surplus earnings Total interests equity
$ $ $ $ $ $ $
Balance at January 1, 2010 39,046 (3,515 ) 298 306,119 341,948 3,256 345,204
Net earnings - - - 44,180 44,180 (266 ) 43,914
Other comprehensive income - 8,215 - (3,217 ) 4,998 - 4,998
Total comprehensive income - 8,215 - 40,963 49,178 (266 ) 48,912
Contributions by and distributions to shareholders
Share issuances 13 89 - - - 89 - 89
Share redemptions 13 (36 ) - - (330 ) (366 ) - (366 )
Dividends - - - (8,957 ) (8,957 ) - (8,957 )
Stock-based compensation expense - - 77 - 77 - 77
53 - 77 (9,287 ) (9,157 ) - (9,157 )
Changes in ownership interests in subsidiaries that do not result in a loss of control
Buy-back of non-controlling interests 7 - - - - - (508 ) (508 )
Foreign exchange translation adjustmenton non-controlling interests
-

-

-

-

-

141

141
Balance at December 31, 2010 39,099 4,700 375 337,795 381,969 2,623 384,592
Net earnings - - - 56,545 56,545 (565 ) 55,980
Other comprehensive income - 1,516 - (7,069 ) (5,553 ) - (5,553 )
Total comprehensive income - 1,516 - 49,476 50,992 (565 ) 50,427
Contributions by and distributions to shareholders
Share issuances 13 50,215 - - - 50,215 - 50,215
Issuance of convertible debentures 13 - - 1,687 - 1,687 - 1,687
Share redemptions 13 (374 ) - - (1,481 ) (1,855 ) - (1,855 )
Dividends - - - (10,528 ) (10,528 ) - (10,528 )
Stock-based compensation expense - - 77 - 77 - 77
49,841 - 1,764 (12,009 ) 39,596 - 39,596
Changes in ownership interests in subsidiaries that do not result in a loss of control
Buy-back of non-controlling interests 7 - - - - - (1,009 ) (1,009 )
Foreign exchange translation adjustment on non-controlling interests
-

-

-

-

-

(16
)
(16
)
Balance at December 31, 2011 88,940 6,216 2,139 375,262 472,557 1,033 473,590

The accompanying notes are an integral part of the Interim Consolidated Financial Statements.

UNI-SELECT INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
Three and twelve-month periods ended December 31, 2011 and 2010
(In thousands of US dollars, unaudited)
Three-month period Twelve-month period
Note 2011 2010 2011 2010
$ $ $ $
OPERATING ACTIVITIES
Earnings from continuing operations 11,659 10,120 55,980 44,828
Non-cash items
Depreciation and amortization 6 5,738 2,701 22,166 12,132
Income tax expense (896 ) (886 ) 8,290 11,210
Finance costs, net 5 4,559 2,245 17,283 6,948
Net gain on disposal of property and equipment - - (1,728 ) -
Other non-cash items (177 ) 213 210 814
Changes in working capital items (5,102 ) (8,563 ) (34,384 ) (24,519 )
Interest paid (2,549 ) (2,424 ) (14,865 ) (6,939 )
Income taxes paid (199 ) (7,038 ) (9,158 ) (17,123 )
Cash flows from operating activities from continuing operations
13,033

(3,632
)
43,794

27,351
Cash flows from operating activities from discontinued operations
-

(1,053
)
-

(2,105
)
Cash flows from operating activities 13,033 (4,685 ) 43,794 25,246
INVESTING ACTIVITIES
Business acquisitions 7 (32,606 ) - (255,608 ) (4,008 )
Repurchase of non-controlling interests 7 (204 ) (255 ) (636 ) (255 )
Proceeds from business disposals 7 - 729 157 2,914
Balance of purchase price 283 359 737 1,557
Investments and advances to merchant members (2,822 ) (800 ) (11,073 ) (2,601 )
Receipts on advances to merchant members 566 635 2,368 3,392
Acquisitions of property and equipment (2,745 ) (1,844 ) (10,702 ) (8,203 )
Disposal of property and equipment - 506 5,984 1,606
Development of intangible assets 11 (3,690 ) (8,622 ) (24,847 ) (37,119 )
Cash flows from investing activities (41,218 ) (9,292 ) (293,620 ) (42,717 )
FINANCING ACTIVITIES
Net increase (decrease) in bank indebtedness (10,736 ) 10,658 (10,681 ) 11,118
Increase in long-term debt 12 45,559 297 373,033 322
Repayment of long-term debt (1,640 ) (17 ) (198,585 ) (90 )
Merchant members' deposits in the guarantee fund (31 ) (60 ) 147 319
Issuance of convertible debentures, net ofissuance costs 12
-

-

49,741

-
Share issuances, net of issuance costs 13 235 - 49,596 89
Share redemptions 13 (1,197 ) (130 ) (1,855 ) (366 )
Dividends paid (2,590 ) (2,177 ) (10,270 ) (8,858 )
Cash flows from financing activities 29,600 8,571 251,126 2,534
Effect of fluctuations in exchange rates on cash 12 29 (8 ) 172
Increase (decrease) in cash 1,427 (5,377 ) 1,292 (14,765 )
Cash, beginning of period 244 5,756 379 15,144
Cash, end of period 1,671 379 1,671 379

The accompanying notes are an integral part of the Interim Consolidated Financial Statements.

UNI-SELECT INC.
CONSOLIDATED STATEMENTS OF FINANCIAL POSITION
December 31, 2011 and 2010 and January 1, 2010
(In thousands of US dollars, unaudited)
December 31, December 31,
January 1,
Note 2011 2010 2010
$ $ $
ASSETS
Current assets
Cash 1,671 379 15,144
Trade and other receivables 198,495 157,219 143,742
Income taxes receivable 25,234 7,020 3,687
Inventory 579,246 404,336 375,255
Prepaid expenses 11,358 7,492 6,052
Assets related to discontinued operations 8 - - 2,863
Total current assets 816,004 576,446 546,743
Investments and advances to merchant members 22,149 16,854 16,082
Property and equipment 43,134 32,472 35,075
Intangible assets 11 156,958 61,181 29,418
Goodwill 11 184,734 94,725 89,777
Deferred tax assets 24,242 23,849 18,216
TOTAL ASSETS 1,247,221 805,527 735,311
LIABILITIES
Current liabilities
Bank indebtedness 497 11,455 42
Trade and other payables and provisions 301,415 190,525 174,947
Dividends payable 2,552 2,294 2,195
Instalments on long-term debt and on merchant members'deposits in the guarantee fund
15,694

269

385
Liabilities related to discontinued operations 8 - - 1,532
Total current liabilities 320,158 204,543 179,101
Post-employment benefit obligations 24,590 15,413 10,464
Long-term debt 12 337,319 170,610 170,373
Convertible debentures 12 47,225 - -
Merchant members' deposits in the guarantee fund 7,757 7,723 6,963
Derivative financial instruments 2,505 4,816 4,951
Deferred tax liabilities 34,077 17,830 18,255
TOTAL LIABILITIES 773,631 420,935 390,107
EQUITY
Share capital 13 88,940 39,099 39,046
Contributed surplus 452 375 298
Equity component of convertible debentures 12 1,687 - -
Retained earnings 375,262 337,795 306,119
Accumulated other comprehensive income (loss) 14 6,216 4,700 (3,515 )
TOTAL SHAREHOLDERS' EQUITY 472,557 381,969 341,948
Non-controlling interest 1,033 2,623 3,256
TOTAL EQUITY 473,590 384,592 345,204
TOTAL LIABILITIES AND EQUITY 1,247,221 805,527 735,311

The accompanying notes are an integral part of the Interim Consolidated Financial Statements.

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