BOUCHERVILLE, QUEBEC--(Marketwire - Nov. 8, 2012) - Uni-Select Inc. (TSX:UNS)
Highlights
- Implementation of the distribution network optimization plan.
- Restructuring and other costs of $18.5 million, of which $11.4 million will have no impact on cash flows.
- Status report on deployment of the new integrated Enterprise Resource Planning system, more than 23 warehouses and 139 stores have been converted to date.
- $65 million inventory reduction and $37 million reduction in total net indebtedness during the same period.
- Implementation of a new operational structure in all of our activities in order to achieve the strategic objectives of the Corporation with regards to sales and operational efficiency.
| |
| (Unless otherwise indicated, all amounts are expressed in US dollars) |
| (In thousands of dollars, except per share amounts) |
3rd Quarter |
NINE-MONTH PERIOD |
| |
2012 |
|
2011 |
2012 |
2011 |
| Sales |
463,401 |
|
472,491 |
1,396,901 |
1,343,920 |
| |
|
|
|
|
|
| Adjusted EBITDA |
25,464 |
|
30,759 |
84,670 |
87,202 |
| EBITDA |
24,062 |
|
29,904 |
78,877 |
83,907 |
| |
|
|
|
|
|
| Adjusted earnings |
11,511 |
|
17,186 |
40,619 |
47,674 |
| Net earnings (net loss) |
(926 |
) |
16,633 |
25,391 |
44,799 |
| |
|
|
|
|
|
| Adjusted earnings per share |
0.53 |
|
0.79 |
1.87 |
2.20 |
| Earnings per share |
(0.04 |
) |
0.77 |
1.17 |
2.07 |
Uni-Select Inc. generated sales of $463.4 million in the third quarter of 2012, compared to $472.5 million for the same period in 2011. Adjusted EBITDA amounted to $25.5 million this quarter compared to $30.8 million in the third quarter 2011. Adjusted earnings stood at $11.5 million in the third quarter compared to $17.2 million for the same quarter in 2011. During the third quarter, a non-recurring charge net of taxes of $12.4 million was recorded against earnings to cover implementation costs of the distribution network consolidation plan and other non-recurring items. Given this charge, the Corporation recorded a net loss in the third quarter 2012 of $0.9 million or $0.04 per share compared to net earnings of $16.6 million or $0.77 per share for the same period in 2011.
The 1.9% decrease in sales for the quarter is mainly due to a temporary slowdown in the industry. This slowdown has had a greater impact in areas in the North East of the continent. It should also be noted that the third quarter of 2012 had one less billing day as compared to the same period last year. These negative factors were partially offset by sales derived from the assets in Florida purchased in the fourth quarter 2011. Sales of US operations totaled $330 million in the third quarter while sales of Canadian operations totaled $133 million.
The adjusted EBITDA margin stood at 5.5% in the third quarter 2012 compared to 6.5% in the corresponding quarter in 2011. This decrease is mainly attributable to the rapid decline in sales with spending that could not be adjusted at the same rate. In addition, higher IT maintenance and support costs related to the transition to the new ERP system also had an adverse effect on the adjusted EBITDA margin. The optimization plan implemented during the quarter combined with the improved purchasing conditions obtained from our suppliers helped to partially offset the items mentioned above and should contribute to the improvement of our long-term performance.
For the nine-month period ended September 30, 2012, sales grew by 3.9% to $1.397 billion compared to $1.344 billion for the same period of the previous year. This increase is primarily attributable to the assets in Florida purchased in the fourth quarter 2011. This increase was partially offset by one less billing day in Canada and a decrease in organic sales of 0.9% combined with the variations in the value of the Canadian dollar relative to the US dollar which had a negative impact of $10.3 million.
Sales in the United States totaled $1.002 billion for the nine-month period ended September 30, 2012 compared to $929 million for the same period in 2011. Canadian operations generated sales of $394 million for the nine-month period ended September 30, 2012, compared to $415 million in 2011.
For the nine-month period ended September 30, 2012, the adjusted EBITDA margin amounted to 6.1% compared to 6.5% for the corresponding period of 2011. The same factors as those mentioned for the quarter affected the adjusted EBITDA margin for the nine months. However, adverse economic conditions having prevailed only since April, their financial impact was less significant for that period. These items were partially offset by the additional marginal contribution from acquisitions completed in 2011, and their materialized synergies.
"The many initiatives implemented during the quarter and previous quarters, including the optimization of our distribution network, did not offset the weak demand that prevails currently in our industry." says Richard G. Roy, President and CEO of Uni-Select.
"We remain confident that the outlook for our business remains positive. However, we expect that our results for the balance of the year will continue to be affected by the slowdown in sales. We will pursue our efforts to provide excellent service to our customers while exercising tight control of our costs to return quickly to our usual levels of profitability. The reorganization of our sales team in the United States combined with the network consolidation plan will result in a significant reduction in our costs both operational and administrative. "says Mr. Roy.
Finally, the Board of Directors, of Uni-Select declared a dividend of CDN$0.13 per share payable on January 22, 2013 to shareholders of record on December 30, 2012. 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 leader independent distributor of automotive paint and related products in the country. With 6,200 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", represents operating profit before finance costs, depreciation and amortization, restructuring charges, write-off of assets and others, net gain on disposal of property and equipment, income taxes and net earnings attributable to non-controlling interests. This measure is a financial indicator of a corporation's ability to service and incur debt. It should not be considered by an investor as an alternative to sales or net earnings, as an indicator of operating performance or cash flows, or as a measure of liquidity, but as additional information.
(2) "Adjusted EBITDA", used to assess adjusted EBITDA, adjusted earnings and adjusted earnings per share to assess EBITDA from operating activities, excluding certain adjustments which may affect the comparability of the Corporation's financial results. Management is of the view that these measures are more representative of the Corporation's operational performance and more appropriate in providing additional information.
(3) "Adjustements", are unusual incurred costs that Management regards as not being characteristic or representative of the Corporation's regular operations. They include, amongst others, the non-capitalizable costs related to the development and implementation of the ERP system, costs related to the closure and disposal of stores, restructuring charges, write-off of assets and others, as well as net gain on disposal of property and equipment. The exclusion of these items does not indicate that they are non-recurring.
(4) "Total net indebtedness", consists of bank indebtedness, long-term debt and merchant members' deposits in the guarantee fund (including short-term portions), net of cash.
Additional Information
The management report and the unaudited financial statements as well as accompanying notes for the Second Quarter of 2012 are available in the "Investor Information" section on 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 Annual Report as well as other information related to Uni-Select, including its Annual Information Form.
Conference Call
Thursday, November 8, 2012 at 3 PM (EST), Uni-Select will host a conference call to discuss the 2012 Third Quarter financial results. To join the conference, dial 1 866 696-5910 followed by 8567461.
| UNI-SELECT INC. |
| CONSOLIDATED STATEMENT OF EARNINGS (LOSS) |
| (In thousands of US dollars, except per share amounts, unaudited) |
| |
| | Three-month period
ended September 30, | | Nine-month period
ended September 30, | |
| | 2012 | | 2011 | | 2012 | | 2011 | |
| | $ | | $ | | $ | | $ | |
| Sales | 463,401 | | 472,491 | | 1,396,901 | | 1,343,920 | |
| | | | | | | | | |
| Earnings before the following items: | 24,062 | | 29,904 | | 78,877 | | 83,907 | |
| | | | | | | | | |
| Finance costs, net (Note 5) | 4,661 | | 4,009 | | 14,061 | | 12,724 | |
| Depreciation and amortization (Note 6) | 7,157 | | 6,248 | | 20,325 | | 16,428 | |
| Restructuring charges, write-off of assets and others (Note 7) | 18,458 | | - | | 18,458 | | 2,976 | |
| Net gain on the disposal of property and equipment | - | | - | | - | | (1,728 | ) |
| Earnings (Loss) before income taxes | (6,214 | ) | 19,647 | | 26,033 | | 53,507 | |
| Income taxes (Note 10) | | | | | | | | |
| | Current | (5,297 | ) | (127 | ) | 4,716 | | 1,932 | |
| | Deferred | 9 | | 3,298 | | (3,982 | ) | 7,254 | |
| | (5,288 | ) | 3,171 | | 734 | | 9,186 | |
| Net earnings (loss) | (926 | ) | 16,476 | | 25,299 | | 44,321 | |
| | | | | | | | | |
| Attributable to shareholders | (926 | ) | 16,633 | | 25,390 | | 44,799 | |
| Attributable to non-controlling interests | - | | (157 | ) | (91 | ) | (478 | ) |
| | (926 | ) | 16,476 | | 25,299 | | 44,321 | |
| | | | | | | | | |
| Earnings (Loss) per share (in US dollars) (Note 9) | | | | | | | | |
| | Basic | (0.04 | ) | 0.77 | | 1.17 | | 2.07 | |
| | Diluted | (0.04 | ) | 0.75 | | 1.17 | | 2.05 | |
| | | | | | | | | |
| Weighted average number of shares outstanding (in thousands) (Note 9) | | | | | | | | |
| | Basic | 21,629 | | 21,678 | | 21,634 | | 21,643 | |
| | Diluted | 21,629 | | 22,925 | | 21,635 | | 22,863 | |
| | | | | | | | | |
| The Consolidated Statement of Earnings (Loss) by nature is presented in Note 18. |
| | |
| | | | | | | | | |
| The accompanying notes are an integral part of the Interim Consolidated Financial Statements. |
| |
| |
| UNI-SELECT INC. |
| CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME |
| (In thousands of US dollars, unaudited) |
| | Three-month period
ended September 30, | | Nine-month period
ended September 30, | |
| | 2012 | | 2011 | | 2012 | | 2011 | |
| | $ | | $ | | $ | | $ | |
| Net earnings (loss) | (926 | ) | 16,476 | | 25,299 | | 44,321 | |
| | | | | | | | | |
| Other comprehensive income | | | | | | | | |
| | Effective portion of changes in the fair value of cash flow hedges (net of income taxes of $173 and $496 for the three and nine-month periods ($37 and $196 in 2011)) | (471 | ) | (87 | ) | (1,348 | ) | (529 | ) |
| | | | | | | | | |
| | Net change in the fair value of derivative financial instruments designated as cash flow hedges transferred to earnings (net of income taxes of $168 and $512 for the three and nine-month periods ($254 and $707 in 2011)) | 456 | | 620 | | 1,391 | | 1,860 | |
| | (15 | ) | 533 | | 43 | | 1,331 | |
| | | | | | | | | |
| | Unrealized exchange gains (losses) on the translation of financial statements to the presentation currency | (8,296 | ) | 11,395 | | (7,984 | ) | 9,074 | |
| | | | | | | | | |
| | Unrealized exchange gains (losses) on the translation of debt designated as a hedge of net investments in foreign operations | 11,603 | | (16,192 | ) | 11,108 | | (10,139 | ) |
| | | | | | | | | |
| | Actuarial loss on defined benefit pension plans (net of income taxes of $806 and $1,336 for the three and nine-month periods) | (2,083 | ) | - | | (3,523 | ) | - | |
| | | | | | | | | |
| Other comprehensive income (loss) | 1,209 | | (4,264 | ) | (356 | ) | 266 | |
| Comprehensive income | 283 | | 12,212 | | 24,943 | | 44,587 | |
| | | | | | | | | |
| Attributable to shareholders | 283 | | 12,369 | | 25,034 | | 45,065 | |
| Attributable to non-controlling interests | - | | (157 | ) | (91 | ) | (478 | ) |
| | 283 | | 12,212 | | 24,943 | | 44,587 | |
| | | |
| | | | | | | | | |
| The accompanying notes are an integral part of the Interim Consolidated Financial Statements. |
| | | | | | | | | |
| | | | | | | | | |
| UNI-SELECT INC. |
| CONSOLIDATED STATEMENT OF CHANGES IN EQUITY |
| (In thousands of US dollars, unaudited) |
| |
| | Attributable to shareholders | | | | | |
| | Share capital | | Accumulated other comprehensive income
(Note 14) | Equity component of convertible debentures and contributed surplus | | Retained earnings | | Attributable to non-controlling interests
(Note 8) | | Total equity | |
| | $ | | $ | $ | | $ | | $ | | $ | |
| Balance, December 31, 2010 | 39,099 | | 4,700 | 375 | | 337,795 | | 2,623 | | 384,592 | |
| Net earnings | - | | - | - | | 44,799 | | (478 | ) | 44,321 | |
| Other comprehensive income | - | | 266 | - | | - | | - | | 266 | |
| Comprehensive income | - | | 266 | - | | 44,799 | | (478 | ) | 44,587 | |
| | | | | | | | | | | | |
| Contributions by and distributions to shareholders | | | | | | | | | | | |
| | Share issuances | 49,980 | | - | - | | - | | - | | 49,980 | |
| | Share redemptions | (117 | ) | - | - | | (541 | ) | - | | (658 | ) |
| | Issuance of convertible debentures | - | | - | 1,687 | | - | | - | | 1,687 | |
| | Dividends | - | | - | - | | (7,991 | ) | - | | (7,991 | ) |
| | Stock-based compensation expense | - | | - | 59 | | - | | - | | 59 | |
| | 49,863 | | - | 1,746 | | (8,532 | ) | - | | 43,077 | |
| Changes in ownership interests in subsidiaries that do not result in a loss of control | | | | | | | | | | | |
| | Buy-back of non-controlling interests | - | | - | - | | - | | (634 | ) | (634 | ) |
| | Foreign exchange translation adjustment on non-controlling interests | - | | - | - | | - | | (40 | ) | (40 | ) |
| Balance, September 30, 2011 | 88,962 | | 4,966 | 2,121 | | 374,062 | | 1,471 | | 471,582 | |
| | | | | | | | | | | | |
| | | | | | | | | | | | |
| Balance, December 31, 2011 | 88,940 | | 6,216 | 2,139 | | 375,262 | | 1,033 | | 473,590 | |
| Net earnings | - | | - | - | | 25,390 | | (91 | ) | 25,299 | |
| Other comprehensive income | - | | 3,167 | - | | (3,523 | ) | - | | (356 | ) |
| Comprehensive income | - | | 3,167 | - | | 21,867 | | (91 | ) | 24,943 | |
| | | | | | | | | | | | |
| Contributions by and distributions to shareholders | | | | | | | | | | | |
| | Share issuances | 29 | | - | - | | - | | - | | 29 | |
| | Share redemptions | (136 | ) | - | - | | (612 | ) | - | | (748 | ) |
| | Dividends | - | | - | - | | (8,435 | ) | - | | (8,435 | ) |
| | Stock-based compensation expense | - | | - | 28 | | - | | - | | 28 | |
| | (107 | ) | - | 28 | | (9,047 | ) | - | | (9,126 | ) |
| Changes in ownership interests in subsidiaries that do not result in a loss of control | | | | | | | | | | | |
| | Buy-back of non-controlling interests | - | | - | (98 | ) | - | | (1,053 | ) | (1,151 | ) |
| | Foreign exchange translation adjustment on non-controlling interests | - | | - | - | | - | | 111 | | 111 | |
| Balance, September 30, 2012 | 88,833 | | 9,383 | 2,069 | | 388,082 | | - | | 488,367 | |
| | | | | | | | | | | | |
| | | | | | | | | | | | |
| The accompanying notes are an integral part of the Interim Consolidated Financial Statements. |
| |
| |
| UNI-SELECT INC. |
| CONSOLIDATED STATEMENT OF CASH FLOWS |
| (In thousands of US dollars, unaudited) |
| |
| | Three-month period
ended September 30, | | Nine-month period
ended September 30, | |
| | 2012 | | 2011 | | 2012 | | 2011 | |
| | $ | | $ | | $ | | $ | |
| OPERATING ACTIVITIES | | | | | | | | |
| Net earnings (loss) | (926 | ) | 16,476 | | 25,299 | | 44,321 | |
| Non-cash items | | | | | | | | |
| | Depreciation and amortization (Note 6) | 7,157 | | 6,248 | | 20,325 | | 16,428 | |
| | Income tax expense (Note 10) | (5,288 | ) | 3,171 | | 734 | | 9,186 | |
| | Finance costs, net (Note 5) | 4,661 | | 4,009 | | 14,061 | | 12,724 | |
| | Restructuring charges, write-off of assets and others (Note 7) | 17,357 | | - | | 17,357 | | - | |
| | Net gain on the disposal of property and equipment | - | | - | | - | | (1,728 | ) |
| | Other non-cash items | 1,716 | | 432 | | 2,633 | | 381 | |
| Changes in working capital items | 26,002 | | (461 | ) | 18,126 | | (29,296 | ) |
| Interest paid | (5,014 | ) | (6,168 | ) | (15,145 | ) | (12,316 | ) |
| Income taxes (paid) recovered | (200 | ) | 799 | | (1,604 | ) | (8,959 | ) |
| Cash flows from operating activities | 45,465 | | 24,506 | | 81,786 | | 30,741 | |
| | | | | | | | | |
| INVESTING ACTIVITIES | | | | | | | | |
| Business acquisitions (Note 8) | (2,918 | ) | (237 | ) | (5,247 | ) | (223,002 | ) |
| Repurchase of non-controlling interests (Note 8) | - | | (203 | ) | (1,053 | ) | (432 | ) |
| Proceeds from business disposals | 423 | | - | | 423 | | 157 | |
| Balances of purchase or sale price | (165 | ) | 335 | | (1,062 | ) | 454 | |
| Advances to merchant members | (2,324 | ) | (1,644 | ) | (9,377 | ) | (8,251 | ) |
| Receipts on investments and advances to merchant members | 2,307 | | 177 | | 4,256 | | 1,802 | |
| Acquisitions of property and equipment (Note 11) | (2,112 | ) | (3,363 | ) | (7,782 | ) | (7,936 | ) |
| Disposals of property and equipment (Note 11) | 422 | | 302 | | 642 | | 5,984 | |
| Acquisitions and development of intangible assets (Note 12) | (4,575 | ) | (6,038 | ) | (11,648 | ) | (21,157 | ) |
| Cash flows from (used in) investing activities | (8,942 | ) | (10,671 | ) | (30,848 | ) | (252,381 | ) |
| | | | | | | | | |
| FINANCING ACTIVITIES | | | | | | | | |
| Net increase in bank indebtedness | 120 | | 886 | | 100 | | 55 | |
| Increase in long-term debt | 564 | | 17,232 | | 41,358 | | 373,744 | |
| Repayment of long-term debt | (33,585 | ) | (29,242 | ) | (83,865 | ) | (243,216 | ) |
| Merchant members' deposits in the guarantee fund | (63 | ) | (37 | ) | (138 | ) | 178 | |
| Issuance of convertible debentures, net of issuance costs | - | | - | | - | | 49,741 | |
| Share issuances, net of issuance costs | - | | - | | 29 | | 49,361 | |
| Share redemptions | (735 | ) | (658 | ) | (748 | ) | (658 | ) |
| Dividends paid | (2,871 | ) | (2,604 | ) | (8,222 | ) | (7,680 | ) |
| Cash flows from financing activities | (36,570 | ) | (14,423 | ) | (51,486 | ) | 221,525 | |
| Effects of fluctuations in exchange rates on cash | 40 | | (22 | ) | 44 | | (20 | ) |
| Decrease in cash | (7 | ) | (610 | ) | (504 | ) | (135 | ) |
| Cash, beginning of period | 1,174 | | 854 | | 1,671 | | 379 | |
| Cash, end of period | 1,167 | | 244 | | 1,167 | | 244 | |
| | | |
| | | | | | | | | |
| The accompanying notes are an integral part of the Interim Consolidated Financial Statements. |
| | | | | | | | | |
| | | | | | | | | |
| UNI-SELECT INC. |
| CONSOLIDATED STATEMENT OF FINANCIAL POSITION |
| (In thousands of US dollars, unaudited) |
| |
| | September 30,
2012 | December 31, 2011 |
| | $ | $ |
| ASSETS | | |
| Current assets | | |
| | Cash | 1,167 | 1,671 |
| | Trade and other receivables | 209,251 | 198,495 |
| | Income taxes receivable | 23,999 | 25,234 |
| | Inventory | 513,775 | 579,246 |
| | Prepaid expenses | 10,866 | 11,358 |
| | Total current assets | 759,058 | 816,004 |
| Investments and advances to merchant members | 27,282 | 22,149 |
| Property and equipment (Note 11) | 48,186 | 43,134 |
| Intangible assets (Note 12) | 154,487 | 156,958 |
| Goodwill (Note 12) | 187,698 | 184,734 |
| Deferred tax assets | 27,433 | 24,242 |
| TOTAL ASSETS | 1,204,144 | 1,247,221 |
| | | |
| LIABILITIES | | |
| Current liabilities | | |
| | Bank indebtedness | 614 | 497 |
| | Trade and other payables and other provisions | 270,807 | 298,686 |
| | Dividends payable | 2,857 | 2,552 |
| | Current portion of long-term debt and merchant members' deposits in the guarantee fund | 19,218 | 15,694 |
| | Total current liabilities | 293,496 | 317,429 |
| Long-term employee benefit obligations | 33,073 | 27,319 |
| Long-term debts | 296,130 | 337,319 |
| Convertible debentures | 49,547 | 47,225 |
| Merchant members' deposits in the guarantee fund | 7,886 | 7,757 |
| Derivative financial instruments | 2,447 | 2,505 |
| Deferred tax liabilities | 33,198 | 34,077 |
| TOTAL LIABILITIES | 715,777 | 773,631 |
| EQUITY | | |
| Share capital | 88,833 | 88,940 |
| Contributed surplus | 382 | 452 |
| Equity component of the convertible debentures | 1,687 | 1,687 |
| Retained earnings | 388,082 | 375,262 |
| Accumulated other comprehensive income (Note 14) | 9,383 | 6,216 |
| TOTAL SHAREHOLDERS' EQUITY | 488,367 | 472,557 |
| Non-controlling interests | - | 1,033 |
| TOTAL EQUITY | 488,367 | 473,590 |
| | | |
| TOTAL LIABILITIES AND EQUITY | 1,204,144 | 1,247,221 |
| | | |
| |
| The accompanying notes are an integral part of the Interim Consolidated Financial Statements. |