Uni-Select Reports Strong Q1 Financial Results

Uni-Select, which distributes automotive aftermarket components in Canada and auto and industrial refinish products across North America, has reported strong Q1 financial results. (Photo: Huw Evans)

Uni-Select Inc., a leader in the distribution of automotive aftermarket parts in Canada, as well as refinish and industrial paint and related products across North America, has reported strong financial results for the first quarter ended March 31, 2016.

I am extremely pleased with our team’s performance in Q1 and the solid start to the year. Both FinishMaster and the Canadian Automotive Group achieved positive organic growth and improved profitability,” said Henry Buckley, President and Chief Executive Officer of Uni-Select. “Our teams continue to be focused on a balanced growth strategy; organic and select acquisitive growth.”

Buckley also noted that, “despite the impact of the declining Canadian dollar and the economic slowdown in the Prairies, we enter the second quarter with solid momentum. We continue to be highly focused on profitable growth and the integration of our acquisitions.”

Consolidated sales for the first quarter reached $264.0 million, a 35.9 percent decrease mainly due to the sale of the net assets in 2015. Excluding sales from the net assets sold, consolidated sales grew 10.8 percent compared to the same period last year. Additional sales from recent business acquisitions and organic growth exceeded the impact of the declining Canadian dollar, which alone penalized sales by $8.5 million or 3.6 percent.

On an organic basis, consolidated sales grew by 3.2 percent, fuelled primarily by the recruitment of new customers in the paint and related products segment, combined with the results of the development of a customer-centric strategy in the automotive products segment.

The Corporation generated an EBITDA and an adjusted EBITDA of $21.7 million for the first quarter of 2016, compared to a negative EBITDA of $122.3 million and adjusted EBITDA of $19.5 million last year.

The EBITDA margin and adjusted EBITDA margin grew to 8.2 percent, up 3.5 points when compared to the adjusted EBITDA margin of 2015, driven by the sale of net assets bearing a lower margin compared to the remaining operations, as well as by a combination of strategic buying, accretive business acquisitions and lower stock-based compensation expenses in relation to the stock price.

They were partially offset by negative synergies following the sale of net assets, predominantly related to the enterprise resource planning system.

Net earnings grew to $11.5 million from a net loss of $82.3 million last year, while adjusted earnings increased by 14.5 percent. Earnings per share and adjusted earnings per share both reached $0.53 compared to a loss per share of $3.88 and adjusted earnings per share of $0.47 in 2015.

The corporation’s results are presented in U.S. dollars. Once converted to Canadian dollars, adjusted earnings per share reached C$0.73 for the first quarter of 2016, up 25.9 percent compared to C$0.58 for the same quarter in 2015.

The paint and related products segment recorded sales of $173.4 million, up 17.3 percent from 2015, or up 4.2 percent organically, namely as a result of the recruitment of new customers. The segment EBITDA margin reached 12.0 percent, up 1.1 point from last year. This performance is notably attributable to higher gross profit margin due to strategic buying and accretive business acquisitions partially offset by customer mix.

Sales for the automotive products segment reached $90.6 million, from $263.8 million in the prior year. Excluding the impact on sales related to the net assets sold, sales increased by 0.2 percent compared to 2015; organic growth and sales from recent business acquisitions exceeded the weaker Canadian dollar which had an impact of $8.5 million on sales or 9.4 percent Segment organic sales grew 1.5 percent in the first quarter driven by the customer-centric strategy and were partially offset by the challenging economic conditions in the Prairies.

Excluding the impact of the Prairies, organic growth is at 5.3 percent for the quarter. EBITDA and adjusted EBITDA for the automotive products segment amounted to $4.6 million in the first quarter, compared to a negative EBITDA of $130.1 million and adjusted EBITDA of $6.7 million last year. The adjusted EBITDA margin reached 5.1 percent, a 2.6-point increase from 2.5 percent in 2015, a performance attributable to the sale of the net assets, which had a lower EBITDA margin than the ongoing operations, combined with product mix and accretive business acquisitions.

 

 

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