Published: 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 Dollars
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.)
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(In million, except earnings
per share) 2nd QUARTER 1st SEMESTER
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2011 2010 2011 2010
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Sales 474.6 349.2 871.4 644.6
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Adjusted EBITDA 33.3 24.7 56.4 39.7
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EBITDA 32.3 23.6 54.0 37.4
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Adjusted earnings 19.1 15.3 30.5 23.2
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Net earnings 18.5 14.5 28.2 21.7
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Adjusted earnings per share 0.88 0.77 1.41 1.18
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Net earnings per share 0.85 0.74 1.30 1.10
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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."
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 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)
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2nd quarter 6 months
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Note 2011 2010 2011 2010
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$ $ $ $
Sales 474,645 349,184 871,429 644,642
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Earnings before the
following items: 32,303 23,591 54,003 37,396
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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
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Earnings before income
taxes 22,885 19,325 33,860 28,301
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Income taxes 9
Current (2,074) 2,381 7,840 12,956
Deferred 6,616 2,467 (1,825) (6,234)
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4,542 4,848 6,015 6,722
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Net earnings 18,343 14,477 27,845 21,579
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Attributable to
shareholders 18,504 14,521 28,166 21,702
Attributable to non-
controlling interests (161) (44) (321) (123)
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18,343 14,477 27,845 21,579
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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.
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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)
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2nd quarter 6 months
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2011 2010 2011 2010
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$ $ $ $
Net earnings 18,343 14,477 27,845 21,579
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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
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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)
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Other comprehensive income 866 (7,222) 4,630 (2,989)
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Comprehensive income 19,209 7,255 32,475 18,590
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Attributable to shareholders 19,370 7,299 32,796 18,713
Attributable to non-
controlling interests (161) (44) (321) (123)
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19,209 7,255 32,475 18,590
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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)
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Accumulated
changes in
fair
value of
derivative Equity
financial component of
instrument convertible
designated debentures
Cumulative as and
Share translation cash flow contributed
Note capital account hedge surplus
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Balance at January 1,
2010 39,046 - (3,515) 298
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Net earnings (loss)
for the period - - - -
Other comprehensive
income for the period - (2,309) (680) -
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Total comprehensive
income for the period - (2,309) (680) -
Contributions by and
distributions to
shareholders
Shares issuance 89 - - -
Dividends - - - -
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89 - - -
Foreign exchange
translation
adjustment on non-
controlling interest - - - -
Stock-based
compensation expense - - - 37
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Balance at June 30,
2010 39,135 (2,309) (4,195) 335
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Net earnings (loss)
for the period - - - -
Other comprehensive
income for the period - 10,525 679 -
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Total comprehensive
income for the period - 10,525 679 -
Contributions by and
distributions to
shareholders
Shares redemption (36) - - -
Dividends - - - -
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(36) - - -
Changes in ownership
interests in
subsidiaries that do
not result in a loss
of control
Buy-back of non-
controlling interest - - - -
Foreign exchange
translation
adjustment on non-
controlling interest - - - -
Stock-based
compensation expense - - - 40
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Balance at December
31, 2010 39,099 8,216 (3,516) 375
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Net earnings (loss)
for the period - - - -
Other comprehensive
income of the period - 3,832 798 -
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Total comprehensive
income for the period - 3,832 798 -
Contributions by and
distributions to
shareholders
Shares issuance (net
of share issuance 12 49,980 - - -
costs of $2,706)
Issuance of
convertible
debentures, net of
tax effect 11 - - - 2,418
Dividends - - - -
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49,980 - - 2,418
Changes in ownership
interests in
subsidiaries
that do not result in
a loss of control
Buy-back of non-
controlling interest - - - -
Foreign exchange
translation
adjustment
on non-controlling
interest - - - -
Stock-based
compensation expense - - - 39
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Balance at June 30,
2011 89,079 12,048 (2,718) 2,832
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Non-
Retained controlling Total
Note earnings Total interest equity
-------------------------------------------------
Balance at January 1,
2010 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 - (2,989) - (2,989)
-------------------------------------------------
Total comprehensive
income for the period 21,702 18,713 (123) 18,590
Contributions by and
distributions to
shareholders
Shares issuance - 89 - 89
Dividends (4,458) (4,458) - (4,458)
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(4,458) (4,369) - (4,369)
Foreign exchange
translation
adjustment on non-
controlling interest - - (41) (41)
Stock-based
compensation expense - 37 - 37
-------------------------------------------------
Balance at June 30,
2010 325,570 358,536 3,092 361,628
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Net earnings (loss)
for the period 24,192 24,192 (143) 24,049
Other comprehensive
income for the period - 11,204 - 11,204
-------------------------------------------------
Total comprehensive
income for the period 24,192 35,396 (143) 35,253
Contributions by and
distributions to
shareholders
Shares redemption (330) (366) - (366)
Dividends (4,499) (4,499) - (4,499)
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(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
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Balance at December
31, 2010 344,933 389,107 2,623 391,730
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Net earnings (loss)
for the period 28,166 28,166 (321) 27,845
Other comprehensive
income of the period - 4,630 - 4,630
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Total comprehensive
income for the period 28,166 32,796 (321) 32,475
Contributions by and
distributions to
shareholders
Shares issuance (net
of share issuance 12 - 49,980 - 49,980
costs of $2,706)
Issuance of
convertible
debentures, net of
tax effect 11 - 2,418 - 2,418
Dividends (5,393) (5,393) - (5,393)
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(5,393) 47,005 - 47,005
Changes in ownership
interests in
subsidiaries
that do not result in
a loss of control
Buy-back of non-
controlling interest - - (229) (229)
Foreign exchange
translation
adjustment
on non-controlling
interest - - 81 81
Stock-based
compensation expense - 39 - 39
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Balance at June 30,
2011 367,706 468,947 2,154 471,101
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The accompanying notes are an integral part of the consolidated financial statements.
Uni-Select Inc. Consolidated Statement of Cash Flows
Three-month and six-month periods ended June 30, 2011 and 2010
(In thousands of US dollars, except earnings per share, unaudited)
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2nd quarter 6 months
------------------------------------------------
Note 2011 2010 2011 2010
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$ $ $ $
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) -
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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)
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Cash flows from
continuing operating
activities 60,307 28,052 6,231 585
Cash flows from
discontinued operating
activities - (9) - (1,067)
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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)
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Cash flows from
investing activities (8,222) (10,042) (241,761) (20,027)
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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)
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Cash flows from
financing activities (51,371) (18,328) 236,003 5,087
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Effect of exchange rate
changes on cash - 477 2 477
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Increase (Decrease) in
cash 714 149 475 (14,945)
Cash, beginning of
period 140 49 379 15,144
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Cash, end of period 854 198 854 198
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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)
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Note December 31, January 1,
June 30, 2011 2010 2010
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$ $ $
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
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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
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TOTAL ASSETS 1,159,193 801,703 733,794
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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
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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
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TOTAL LIABILITIES 688,092 409,973 386,383
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EQUITY
Share capital 12 89,079 39,099 39,046
Contributed surplus 414 375 298
Equity component of 11
convertible debentures 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
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TOTAL EQUITY 471,101 391,730 347,411
---------------------------------------------
TOTAL LIABILITIES AND
EQUITY 1,159,193 801,703 733,794
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The accompanying notes are an integral part of the consolidated financial statements.
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