Uni-Select Inc.
TSX : UNS

Uni-Select Inc.

November 08, 2011 12:55 ET

Uni-Select Inc.: Third Quarter Results

- Increase in sales of 41%;

- Increase in EBITDA of 27% and;

- Increase in net earnings of 26%

BOUCHERVILLE, 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) 3rdQUARTER NINE-MONTH PERIOD
2011 2010 2011 2010
Sales 472.5 335.3 1,343.9 980.0
Adjusted EBITDA 30.8 25.6 87.2 65.3
EBITDA 29.9 23.5 83.9 60.9
Adjusted earnings 17.2 14.5 47.7 37.7
Net earnings 16.6 13.2 44.8 34.9
Adjusted earnings per share 0.79 0.73 2.20 1.91
Net earnings per share 0.77 0.67 2.07 1.77

The 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-Select

Founded 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.

  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 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."

  2. "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.

  3. "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 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 Community

Tuesday 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 8567461

Uni-Select Inc. Consolidated Statement of Earnings
Three and nine-month periods ended September 30, 2011 and 2010
(In thousands of US dollars, except earnings per share, unaudited)
Three-month period Nine-month period
Note 2011 2010 2011 2010
$ $ $ $
Sales 472,491 335,317 1,343,920 979,959
Earnings before the following items: 29,904 23,542 83,907 60,938
Net gain on disposal of property and equipment (1,728 )
Acquisition-related costs 7 2,976
Finance costs, net 5 4,009 1,939 12,724 4,636
Depreciation and amortization 6 6,248 3,100 16,428 9,498
Earnings before income taxes 19,647 18,503 53,507 46,804
Income taxes 9
Current (127 ) 3,227 1,932 16,183
Deferred 3,298 2,147 7,254 (4,087 )
3,171 5,374 9,186 12,096
Net earnings 16,476 13,129 44,321 34,708
Attributable to shareholders 16,633 13,152 44,799 34,854
Attributable to non-controlling interests (157 ) (23 ) (478 ) (146 )
16,476 13,129 44,321 34,708
Earnings per share 8
Basic 0.77 0.67 2.07 1.77
Diluted 0.75 0.67 2.05 1.77
Weighted average number of shares outstanding
(in thousands) 8
Basic 21,678 19,720 21,643 19,720
Diluted 22,925 19,728 22,863 19,729
Shares outstanding (in thousands) 21,667 19,709 21,667 19,709
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 Consolidated Financial Statements.
Uni-Select Inc.
Consolidated Statement of Comprehensive Income
Three and nine-month periods ended September 30, 2011 and 2010
(In thousands of US dollars, unaudited)
Three-month period Nine-month period
2011 2010 2011 2010
$ $ $ $
Net earnings 16,476 13,129 44,321 34,708
Other comprehensive income
Effective 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




700




1,860




2,180
533 (73 ) 1,331 (753 )
Unrealized exchange gains on the translation of
financial statements to the presentation currency

11,193

427

8,972

373
Unrealized 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
)

2,753
Other comprehensive income (4,466 ) 5,362 164 2,373
Comprehensive income 12,010 18,491 44,485 37,081
Attributable to shareholders 12,167 18,514 44,963 37,227
Attributable to non-controlling interests (157 ) (23 ) (478 ) (146 )
12,010 18,491 44,485 37,081
The accompanying notes are an integral part of the Consolidated Financial Statements.
Uni-Select Inc.
Consolidated Statement of Changes in Equity
Nine-month periods ended September 30, 2011 and 2010
(In thousands of US dollars, unaudited)





Note




Share capital


Cumulative
translation
account
Accumulated changes in
the fair value of
derivative financial
instruments designated
as cash flow hedges

Equity components of
convertible
debentures and
contributed surplus




Retained earnings




Total



Non-controlling
interests




Total equity
Balance at January 1, 2010 39,046 (3,515)298308,326 344,155 3,256 347,411
Net earnings (loss) for the period 34,854 34,854 (146)34,708
Other comprehensive income for the period 3,126 (753) 2,373 2,373
Comprehensive income for the period 3,126 (753)34,854 37,227 (146)37,081
Contributions by and distributions to shareholders
Share issuance 57 57 57
Share 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 56
Balance at September 30, 2010 39,103 3,126 (4,268)354336,203 374,518 2,914 377,432
Net earnings (loss) for the period 11,040 11,040 (120)10,920
Other comprehensive income for the period 5,090 752 5,842 5,842
Comprehensive income for the period 5,090 752 11,040 16,882 (120)16,762
Contributions by and distributions to shareholders
Share 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 317 317
Foreign exchange translation adjustment on non-controlling interest
Stock-based compensation expense
21 21 21
Balance at December 31, 2010 39,099 8,216 (3,516)375344,933 389,107 2,623 391,730
Net earnings (loss) for the period 44,799 44,799 (478)44,321
Other comprehensive income of the period (1,167)1,331 164 164
Comprehensive income for the period (1,167)1,331 44,799 44,963 (478)44,485
Contributions by and distributions to shareholders
Share issuance (net of share issuance costs of $2,706)1249,980 49,980 49,980
Issuance of convertible debentures, net of tax effect11 1,687 1,687 1,687
Share redemptions (117) (541)(658) (658)
Dividends (7,991)(7,991) (7,991)
49,863 1,687(8,532)43,018 43,018
Changes 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 59
Balance at September 30, 2011 88,962 7,049 (2,185)2,121381,200 477,147 1,471 478,618

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

Uni-Select Inc.
Consolidated Statement of Cash Flows
Three and nine-month periods ended September 30, 2011 and 2010
(In thousands of US dollars, unaudited)
Three-month period Nine-month period
Note 2011 2010 2011 2010
$ $ $ $
OPERATING ACTIVITIES
Net earnings 16,476 13,129 44,321 34,708
Non-cash items
Depreciation and amortization 6 6,248 3,100 16,428 9,498
Income tax expense 3,171 5,374 9,186 12,096
Finance costs, net 5 4,009 1,939 12,724 4,636
Net gain on disposal of property and equipment (1,728 )
Other non-cash items 432 36 381 604
30,336 23,578 81,312 61,542
Changes 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
operations

24,506

30,390

30,741

30,982
Cash flows from operating activities from discontinued
operations


15


(1,052
)
Cash flows from operating activities 24,506 30,405 30,741 29,930
INVESTING ACTIVITIES
Business acquisitions 7 (237 ) (223,002 ) (4,008 )
Repurchase of non-controlling interests 7 (203 ) (432 )
Proceeds from business disposals 17 157 2,185
Balances of purchase prices 335 89 454 1,198
Investments and advances to merchant members (1,644 ) (775 ) (8,251 ) (1,801 )
Receipts on advances to merchant members 177 1,057 1,802 2,757
Acquisitions of property and equipment (3,363 ) (492 ) (7,936 ) (6,232 )
Disposal of property and equipment 302 375 5,984 1,100
Intangible assets 10 (6,038 ) (13,668 ) (21,157 ) (28,623 )
Cash flows from investing activities (10,671 ) (13,397 ) (252,381 ) (33,424 )
FINANCING ACTIVITIES
Net increase (decrease) in bank indebtedness 886 (8,790 ) 55 460
Increase in long-term debt 11 17,232 373,744 25
Repayment of long-term debt (29,242 ) (11 ) (243,216 ) (73 )
Merchant members' deposits in the guarantee fund (37 ) 142 178 379
Issuance of convertible debentures, net of issuance costs 11 49,741
Share issuances, net of issuance costs 12 49,361 89
Share 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 ) 143
Increase (Decrease) in cash (610 ) 5,558 (135 ) (9,388 )
Cash, beginning of period 854 198 379 15,144
Cash, end of period 244 5,756 244 5,756
The accompanying notes are an integral part of the Consolidated Financial Statements.
Uni-Select Inc.
Consolidated Statement of Financial Position
September 30, 2011, December 31, 2010 and January 1, 2010
(In thousands of US dollars, unaudited)
September 30, December 31, January 1,
Note 2011 2010 2010
$ $ $
ASSETS
Current assets
Cash 244 379 15,144
Trade and other receivables 223,681 157,219 143,742
Income taxes receivable 10,429 7,020 3,687
Inventory 506,292 404,336 375,255
Prepaid expenses 10,980 7,492 6,052
Assets related to discontinued operations 2,863
Total current assets 751,626 576,446 546,743
Investments and advances to merchant members 20,712 16,854 16,082
Property and equipment 42,176 34,389 37,092
Intangible assets 10 148,860 59,264 27,401
Goodwill 10 181,680 94,725 89,777
Deferred tax assets 18,879 20,025 16,699
TOTAL ASSETS 1,163,933 801,703 733,794
LIABILITIES
Current liabilities
Bank indebtedness 11,119 11,455 42
Trade and other payables 287,679 194,976 181,687
Dividends payable 2,516 2,294 2,195
Instalments on long-term debt and on merchant members'
deposits in the guarantee fund 13,749 269 385
Liabilities related to discontinued operations 1,532
Total current liabilities 315,063 208,994 185,841
Long-term debt 11 293,853 170,610 170,373
Convertible debentures 11 46,299
Merchant members' deposits in the guarantee fund 7,673 7,723 6,963
Derivative financial instruments 2,993 4,816 4,951
Deferred tax liabilities 19,434 17,830 18,255
TOTAL LIABILITIES 685,315 409,973 386,383
EQUITY
Share capital 12 88,962 39,099 39,046
Contributed surplus 434 375 298
Equity component of convertible debentures 11 1,687
Retained earnings 381,200 344,933 308,326
Accumulated other comprehensive income 4,864 4,700 (3,515)
TOTAL SHAREHOLDERS' EQUITY 477,147 389,107 344,155
Non-controlling interests 1,471 2,623 3,256
TOTAL EQUITY 478,618 391,730 347,411
TOTAL LIABILITIES AND EQUITY 1,163,933 801,703 733,794
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 Chief Executive Officer

    Mr. Denis Mathieu
    Vice President and Chief Financial Officer