Auto Service World
News   October 29, 2015   by Steve Pawlett

Uni-Select Announces Strong Q3 2015 Financial Results


 

 

 

Uni-Select Inc. has reported solid financial results with increased profitability for the third quarter ended September 30, 2015.

“I am very pleased with the performance displayed by our automotive and paint and related products businesses in the third quarter and particularly delighted that both sectors are delivering healthy organic growth, said Henry Buckley, president and chief executive officer of Uni-Select.” We now turn to the fourth quarter with confidence that our continued focus on growth initiatives, accretive acquisitions and our commitment to the continued expansion of a network of corporate stores will all contribute to our successes in the months ahead.”

The 2015 results in dollars vary compared to last year’s figures, since the 2015 nine-month period includes five months of operations from the net assets of Uni-Select USA, Inc. and Beck/Arnley Worldparts, Inc., sold on June 1, 2015.

THIRD QUARTER RESULTS

(All percentage increases and decreases represent year-over-year changes for the third quarter of 2015 compared to the third quarter of 2014, unless otherwise noted.)

Consolidated sales for the third quarter reached $276.2 million, a 40.6% decrease mainly due to the sale of the net assets of Uni-Select USA, Inc. and Beck/Arnley Worldparts, Inc. and to a weaker Canadian dollar. The decline was partly compensated by additional sales from recent acquisitions and organic growth. On an organic basis, consolidated sales grew 4.0%, fuelled namely by the recruitment of new customers in the paint and related products segment and by the success of the Corporation’s fill rate commitment to its customers in the automotive products segment.

The Corporation generated an EBITDA of $25.9 million (including restructuring and other charges of $0.1 million resulting from the relocation of certain stores), compared to $29.9 million last year, while adjusted EBITDA reached $26.0 million from $31.4 million last year. The EBITDA margin and adjusted EBITDA margin grew to a solid 9.4%, fuelled by a combination of organic growth across both segments as well as by the recent accretive acquisitions.

Net earnings grew by 6.1% to $15.7 million from $14.8 million last year, while adjusted earnings grew slightly by 0.4%. EPS and adjusted EPS are $0.73 ($0.70 and $0.74 respectively in 2014).

As indicated above, the Corporation’s results are presented in US dollars. Once converted to Canadian dollars, adjusted earnings per share reached C$0.95 for the third quarter of 2015, up 18.8% compared to C$0.80 for the same quarter in 2014.

Segmented Results

Sales for the automotive products segment declined to $114.2 million, from $316.5 million in the prior year. Excluding the impact of the net assets sold and the weaker Canadian dollar, this alone accounted for 17.5% of the decrease, sales decreased by 9.3% compared to 2014, partly offset by organic growth and sales from recent acquisitions. Segment organic sales grew 4.4% in the third quarter, driven by an increased focus on customer needs through enhanced product offering and pricing increases. EBITDA for the automotive products segment decreased to $9.1 million in the third quarter, from $15.8 million last year, while adjusted EBITDA decreased to $9.1 million from $17.3 million in 2014. The EBITDA margin and adjusted EBITDA margin both reached 8.0%, up 3.0 and 3.5 points from 5.0% and 5.5% respectively in 2014.

The paint and related products segment recorded sales of $162.0 million, up 8.8% from 2014, or 3.8% organically as a result of the recruitment of new customers. Segment EBITDA reached $18.3 million, up 15.1% from $15.9 million last year, while adjusted EBITDA grew 15.7% to $18.4 million from $15.9 million last year. The segment EBITDA margin and adjusted EBITDA margin reached 11.3% and 11.4% respectively, up 0.6 and 0.7 point from last year. This performance is namely attributable to enhanced gross margins resulting from purchases made in advance of pricing increases (partially offset by an unfavorable customer mix due to the growth of large national accounts with different buying conditions), improved fixed expenses coverage in relation to organic growth, as well as accretive business acquisitions.

NINE-MONTH PERIOD RESULTS

(All percentage increases and decreases represent year-over-year changes for the nine-month period of 2015 compared to the nine-month period of 2014, unless otherwise noted. The 2015 nine?month period results include five months of operations from the net assets sold.)

Consolidated sales for the first nine months of 2015 decreased by 19.2% to $1,096.2 million, representing an increase of 0.2% when excluding the impact of the sales from the net assets sold, a performance explained by the same factors as for the third quarter. On an organic basis, sales grew 3.2% in the first nine months of the year.

The Corporation recorded a negative EBITDA of $77.3 million for the first nine months of 2015, compared to an EBITDA of $78.2 million last year. This is explained by non recurring charges of $150.8 million consisting of impairment and transaction charges in connection with the sale of the net assets of the US automotive products distribution business activities and restructuring charges to rightsize the corporate operations recorded over the course of the first semester. Adjusted EBITDA for the first nine months of the year decreased by 8.4%, while the adjusted EBITDA margin increased by 0.8 points, from 6.2% to 7.0%.

The Corporation recorded a net loss of $54.2 million in the first nine months of the year while adjusted earnings grew 9.2% to $45.8 million ($2.14 on a per share basis) from $41.9 million ($1.97 on a per share basis) for the corresponding period last year.

As indicated above, the Corporation’s results are presented in US dollars. Once converted to Canadian dollars, adjusted earnings per share for the nine-month period amount to C$2.71 compared to C$2.16 in 2014, up 25.5%.

Segmented Results

Prior to their disposal on June 1, 2015, the net assets sold over the course of the first half of the year were included in the automotive products group for segmented reporting. Accordingly, sales of the automotive products segment were down 31.8% for the first nine months of 2015 to $631.0 million, or down 8.9% excluding the impact of net assets sold, mainly related to the impact of the weaker Canadian dollar and partially compensated by the organic growth and sales from recent acquisitions. On an organic basis, sales grew 1.6% in the first nine months of the year. A negative segment EBITDA of $116.9 million was recorded in the first nine months of the year, down from $39.4 million last year, a decline explained by impairment and transaction charges. Adjusted EBITDA decreased to $29.8 million, a performance mainly attributable to the inclusion of five months of lower productivity of the net assets sold on June 1, 2015.

The paint and related products segment recorded sales of $465.3 million in the first nine months of the year, up 7.8%. Segment sales grew 4.6% organically, driven mainly by the recruitment of new customers. Segment EBITDA reached $53.6 million, up 18.7% from 2014, while adjusted EBITDA reached $54.1 million, up 19.7%, mainly attributable to the sales leverage and accretive business acquisitions. Segment EBITDA margin and adjusted EBITDA margin reached 11.5% and 11.6% respectively, up from 10.5% for the corresponding period last year.

 


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