Uni-Select Inc.
TSX : UNS

Uni-Select Inc.

August 02, 2011 12:03 ET

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

BOUCHERVILLE, 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 QUARTER 1st SEMESTER
2011 2010 2011 2010
Sales 474.6 349.2 871.4 644.6
Adjusted EBITDA 33.3 24.7 56.4 39.7
EBITDA 32.3 23.6 54.0 37.4
Adjusted earnings 19.1 15.3 30.5 23.2
Net earnings 18.5 14.5 28.2 21.7
Adjusted earnings per share 0.88 0.77 1.41 1.18
Net earnings per share 0.85 0.74 1.30 1.10

The 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.

  1. "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."
  1. "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.
  1. "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 Information

It 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 Community

Tuesday 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 Earnings
Three-month and six-month periods ended June 30, 2011 and 2010
(In thousands of US dollars, except earnings per share, unaudited)
2nd quarter 6 months
Note 2011 2010 2011 2010
$ $ $ $
Sales 474,645 349,184 871,429 644,642
Earnings before the following items: 32,303 23,591 54,003 37,396
Net gain on disposal of property and equipment (1,728 )
Acquisition-related costs 7 2,976
Finance costs, net 5 4,187 1,138 8,715 2,697
Depreciation and amortization 6 5,231 3,128 10,180 6,398
Earnings before income taxes 22,885 19,325 33,860 28,301
Income taxes 9
Current (2,074 ) 2,381 7,840 12,956
Deferred 6,616 2,467 (1,825 ) (6,234 )
4,542 4,848 6,015 6,722
Net earnings 18,343 14,477 27,845 21,579
Attributable to shareholders 18,504 14,521 28,166 21,702
Attributable to non-controlling interests (161 ) (44 ) (321 ) (123 )
18,343 14,477 27,845 21,579
Earnings per share 8
Basic 0.85 0.74 1.30 1.10
Diluted 0.84 0.74 1.30 1.10
Weighted average number of shares outstanding
(in thousands) 8
Basic 21,691 19,722 21,626 19,719
Diluted 22,963 19,730 22,856 19,729
Actual shares outstanding (in thousands) 21,691 19,722 21,691 19,722
The 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 Income
Three-month and six-month periods ended June 30, 2011 and 2010
(In thousands of US dollars, except earnings per share, unaudited)
2nd quarter 6 months
2011 2010 2011 2010
$ $ $ $
Net earnings 18,343 14,477 27,845 21,579
Other comprehensive income
Effective 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




732




1,240




1,480
217 (216 ) 798 (680 )
Unrealized exchange gains (losses) on translation of financial statements to presentation currency
453

463

(2,221

)

(54

)
Unrealized exchange gains (losses) on translation of long-term debt designated as a hedge of net investments in foreign operations

196


(7,469


)


6,053


(2,255


)
Other comprehensive income 866 (7,222 ) 4,630 (2,989 )
Comprehensive income 19,209 7,255 32,475 18,590
Attributable to shareholders 19,370 7,299 32,796 18,713
Attributable to non-controlling interests (161 ) (44 ) (321 ) (123 )
19,209 7,255 32,475 18,590

The accompanying notes are an integral part of the consolidated financial statements.

Uni-Select Inc.
Consolidated Statement of Changes in Equity
Six-month periods ended June 30, 2011 and 2010
(In thousands of US dollars, except earnings per share, unaudited)








Note







Share capital





Cumulative
translation
account
Accumulated
changes in fair
value of
derivative
financial
instrument
designated as
cash flow hedge


Equity
component of
convertible
debentures and
contributed
surplus






Retained
earnings







Total






Non-controlling
interest







Total equity
Balance at January 1, 2010 39,046 (3,515 ) 298 308,326 344,155 3,256 347,411
Net earnings (loss) for the period 21,702 21,702 (123 ) 21,579
Other comprehensive income for the period (2,309 ) (680 ) (2,989 ) (2,989 )
Total comprehensive income for the period (2,309 ) (680 ) 21,702 18,713 (123 ) 18,590
Contributions by and distributions to shareholders
Shares issuance 89 89 89
Dividends (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 37
Balance at June 30, 2010 39,135 (2,309 ) (4,195 ) 335 325,570 358,536 3,092 361,628
Net earnings (loss) for the period 24,192 24,192 (143 ) 24,049
Other comprehensive income for the period 10,525 679 11,204 11,204
Total comprehensive income for the period 10,525 679 24,192 35,396 (143 ) 35,253
Contributions by and distributions to shareholders
Shares 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

162
Stock-based compensation expense 40 40 40
Balance at December 31, 2010 39,099 8,216 (3,516 ) 375 344,933 389,107 2,623 391,730
Net earnings (loss) for the period 28,166 28,166 (321 ) 27,845
Other comprehensive income of the period 3,832 798 4,630 4,630
Total comprehensive income for the period 3,832 798 28,166 32,796 (321 ) 32,475
Contributions by and distributions to shareholders
Shares issuance (net of share issuance costs of $2,706) 12
49,980




49,980

49,980
Issuance of convertible debentures, net of tax effect 11 2,418 2,418 2,418
Dividends (5,393 ) (5,393 ) (5,393 )
49,980 2,418 (5,393 ) 47,005 47,005
Changes in ownership interests in subsidiaries
that do not result in a loss of control
Buy-back of non-controlling interest (229 ) (229 )
Foreign exchange translation adjustment
on non-controlling interest 81 81
Stock-based compensation expense 39 39 39
Balance at June 30, 2011 89,079 12,048 (2,718 ) 2,832 367,706 468,947 2,154 471,101

The accompanying notes are an integral part of the consolidated financial statements.

Uni-Select Inc. Consolidated Statement of Cash Flows
Three-month and six-month periods ended June 30, 2011 and 2010
(In thousands of US dollars, except earnings per share, unaudited)
2nd quarter 6 months
Note 2011 2010 2011 2010
$ $ $ $
OPERATING ACTIVITIES
Net earnings 18,343 14,477 27,845 21,579
Non-cash items
Depreciation and amortization 6 5,231 3,128 10,180 6,398
Income tax expense 4,542 4,848 6,015 6,722
Compensation cost relating to stock option plans 20 18 39 37
Pension expense in excess of contributions (182 ) 283 (90 ) 531
Finance costs, net 5 4,187 1,138 8,715 2,697
Net gain on disposal of property and equipment - - (1,728 )
32,141 23,892 50,976 37,964
Changes in working capital items 34,759 7,303 (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 activities 60,307 28,052 6,231 585
Cash flows from discontinued operating activities (9 ) (1,067 )
Cash flows from operating activities 60,307 28,043 6,231 (482 )
INVESTING ACTIVITIES
Business acquisitions 7 - - (222,765 ) (4,008 )
Buyback of non-controlling interests 7 (229 ) - (229 ) -
Business disposals 157 803 157 2,168
Balance of purchase price 80 196 117 1,109
Advances to merchant members (3,836 ) (342 ) (6,607 ) (1,026 )
Receipts on advances to merchant members 699 651 1,609 1,700
Property and equipment (1,413 ) (2,938 ) (4,586 ) (5,740 )
Disposal of property and equipment 4,271 366 5,681 725
Intangible assets 10 (7,951 ) (8,778 ) (15,138 ) (14,955 )
Cash flows from investing activities (8,222 ) (10,042 ) (241,761 ) (20,027 )
FINANCING ACTIVITIES
Bank indebtedness (6,658 ) (16,286 ) (7,524 ) 9,250
Long-term debt 11 876 33 363,211 33
Repayment of long-term debt (42,936 ) (36 ) (213,975 ) (62 )
Merchant members' deposits in guarantee fund 125 176 227 237
Issuance of convertible debentures, net of issuance costs 11 - - 49,777
Issuance of shares, net of issuance costs 12 - - 49,361 89
Dividends paid (2,778 ) (2,215 ) (5,074 ) (4,460 )
Cash flows from financing activities (51,371 ) (18,328 ) 236,003 5,087
Effect of exchange rate changes on cash - 477 2 477
Increase (Decrease) in cash 714 149 475 (14,945 )
Cash, beginning of period 140 49 379 15,144
Cash, end of period 854 198 854 198

The accompanying notes are an integral part of the consolidated financial statements.

Uni-Select Inc.
Consolidated Statement of Financial Position
June 30, 2011, December 31, 2010 and January 1, 2010
(In thousands of US dollars, except earnings per share, unaudited)
Note June 30, 2011 December 31, 2010 January 1, 2010
$ $ $
ASSETS
Current assets
Cash 854 379 15,144
Trade and other receivables 228,340 157,219 143,742
Income taxes receivable 11,067 7,020 3,687
Inventory 493,778 404,336 375,255
Prepaid expenses 11,965 7,492 6,052
Assets related to discontinued operations 2,863
Total current assets 746,004 576,446 546,743
Investments and advances to merchant members 21,404 16,854 16,082
Property and equipment 40,923 34,389 37,092
Intangible assets 10 146,502 59,264 27,401
Goodwill 10 184,229 94,725 89,777
Deferred tax assets 20,131 20,025 16,699
TOTAL ASSETS 1,159,193 801,703 733,794
LIABILITIES
Current liabilities
Bank indebtedness 4,191 11,455 42
Trade and other payables 280,121 194,976 181,687
Dividends payable 2,682 2,294 2,195
Instalments on long-term debt and on merchant members'deposits in guarantee fund
10,969

269

385
Liabilities related to discontinued operations 1,532
Total current liabilities 297,963 208,994 185,841
Long-term debt 11 312,724 170,610 170,373
Convertible debentures 11 48,155
Merchant members' deposits in guarantee fund 8,056 7,723 6,963
Derivative financial instruments 3,724 4,816 4,951
Deferred tax liabilities 17,470 17,830 18,255
TOTAL LIABILITIES 688,092 409,973 386,383
EQUITY
Share capital 12 89,079 39,099 39,046
Contributed surplus 414 375 298
Equity component of convertible debentures 11 2,418
Retained earnings 367,706 344,933 308,326
Accumulated other comprehensive income 9,330 4,700 (3,515 )
TOTAL SHAREHOLDERS' EQUITY 468,947 389,107 344,155
Non-controlling interest 2,154 2,623 3,256
TOTAL EQUITY 471,101 391,730 347,411
TOTAL LIABILITIES AND EQUITY 1,159,193 801,703 733,794

The accompanying notes are an integral part of the consolidated financial statements.

Contact Information

  • Source: UNI-SELECT INC.
    (450) 641-6903
    www.uni-select.com

    Mr. Richard G. Roy
    President and CEO

    Mr. Denis Mathieu
    Vice President and Chief Financial Officer