Auto Service World
News   March 9, 2012   by Auto Service World

Acquisitions Push Results for Uni-Select Skyward but Pressure on Margins Increasing

Uni-Select’s addition of two U.S. businesses and organic have combined to generate record results for the Boucherville, Que., based distribution network. However, EBITDA results remained largely unchanged as improvements in terms and conditions were offset by unfavourable changes in customer mix that pushed margins downward.

Uni-Select Inc. generated sales of 436.7 million dollars in the fourth quarter of 2011, compared to 305.4 million dollars in the same period of 2010. All figures in Canadian dollars.

Net earnings increased to 11.7 million dollars in the fourth quarter of 2011 or $0.54 per share compared to 10.2 million dollars or $0.52 per share for the same quarter of the previous year.

The increase in total sales stems primarily from the addition of FinishMaster’s operations and the acquisition of the activities of Parts Depot in the last quarter, combined with organic growth of 3.4%.

The Canadian operations, with sales amounting to 123.5 million dollars, recorded organic growth of 1.6% during the fourth quarter. The American operations recorded organic sales growth of 4.2% to reach 313.2 million dollars.

The adjusted EBITDA margin was 5.2% in the fourth quarter of 2011, an increase of 0.2% compared to the same quarter in 2010. This increase is mainly the result of improvements in the terms and conditions extended by suppliers of products partially offset by pressures on margins resulting from an unfavourable variation in the mix of customers.

“We are proud to record improved sales and net earnings for the eighth quarter in a row. Growth has come from an increase in organic sales and a contribution of recently acquired businesses. FinishMaster largely contributed to the improvement of our quarterly results. The integration plan of FinishMaster, including store consolidation, evolves as planned. We remain confident that the target of 10 million dollars in annual synergies within two years is attainable.” said Richard G. Roy, president and chief executive officer of Uni-Select.

“In addition, the fourth quarter results were favourably impacted by the operations derived from the assets acquired from Parts Depot in the last quarter. The 2012 results will also benefit from the contribution of this latest addition and from the proactive margin management initially reflected in the results of the last quarter.” added Roy.

Financial Highlights for Fiscal Year Ended December 31, 2011

For the period ended December 31, 2011, sales amounted to 1,780.6 million dollars compared to sales of 1,285.4 million in 2010. Net earnings totalled 56.5 million dollars or $2.61 per share compared to 45.1 million dollars or $2.29 per share for the same period in 2010.

Canadian operations recorded sales of 538.3 million dollars compared to 503.5 million dollars in the previous year. Organic growth was in excess of 3.5%. The organic growth calculation takes into account that there were two business days less in 2011 and excludes the exchange rate fluctuation from Canadian to American dollar.

Sales from American operations during the same period in 2011 reached 1,242.3 million dollars compared to 781.8 million dollars in 2010, including an organic growth of 2.1%.

The adjusted EBITDA margin stood at 6.2% in 2011, a slight decrease when compared to 6.3% recorded in 2010. This decrease is mainly due to an increase in fuel cost that negatively impacted delivery charges and to pressures on margins resulting from an unfavourable variation in customer mix. These items were partially offset by improvements in the terms and conditions extended by suppliers.

In closing, the board of directors of Uni-Select declared a dividend of CDN$0.13 per share payable on April 20, 2012 to common shareholders of record on March 30, 2012. This improvement in the dividend represents an increase of 8.3% compared to the preceding quarter.

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