Uni-Select Inc. has reported its financial results for the third quarter ended September 30, 2016.
“We are continuing to make very good progress in Q3 on multiple fronts, including earnings growth,
acquisition and integration execution. Organic sales results were below our expectations, as a result
of softer economic conditions in our Canadian business and a product line changeover in our US business,” said Henry Buckley, president and chief executive officer of Uni-Select. “We remain highly focused on delivering profitable growth and extending our market share through our growth initiatives and by acquiring and integrating those select acquisitions. We have a sound strategy, a strong balance sheet and a terrific team providing an ideal platform for continued growth.
(The 2016 results in dollars vary compared to last year’s figures, since the nine-month period of 2015 included five months of
operations from the net assets of Uni-Select USA, Inc. and Beck/Arnley Worldparts, Inc., sold on June 1, 2015. All amounts are expressed in U.S. dollars.
Third Quarter Results
(All percentage increases and decreases represent year-over-year variances for the third quarter of 2016 compared to the third
quarter of 2015, unless otherwise noted.)
Consolidated sales for the third quarter were $318.5 million, a 15.3% increase, mainly driven by the sales generated from recent business acquisitions, for the most part in the US, representing an increase of 17.6%.
On an organic basis, consolidated sales decreased by 1.3%, mainly due to the soft economic conditions in the Automotive Products segment, and partially compensated by the net customer recruitment and
existing customer growth in the Paint and Related Products segment.
The Corporation generated an EBITDA of $30.8 million for the third quarter of 2016, compared to
$25.9 million last year. The EBITDA margin grew to 9.7%, up 30 points compared to 2015. EBITDA margin
enhancement was driven by a combination of accretive business acquisitions and ongoing buying
conditions improvement. These factors were partially offset by negative synergies following the sale of net assets, additional investments related to the corporate stores initiatives and lower organic sales.
Net earnings were $17.3 million compared to $15.7 million last year. Earnings per share were $0.41
compared to $0.37 in 2015.
The Paint and Related Products segment recorded sales of $202.2 million, up 24.8% from 2015, or up 0.7% organically, primarily from existing customer growth combined with net customer recruitment. The
segment EBITDA margin and adjusted EBITDA margin were 13.2%, up 180 points from last year’s adjusted EBITDA margin. Accretive business acquisitions, improved buying conditions and lower insurance claims were mainly offset by evolving revenue mix and acquisition and integration costs.
Sales for the Automotive Products segment were $116.3 million, from $114.2 million in 2015, an increase of 1.9%, mainly derived from recent business acquisitions. Organic sales decreased by 4.1% due to a reduced volume from existing customers in relation to the softer economic conditions, delivery delays on some products and reduction in benefits from price increases compared to 2015. EBITDA for the Automotive Products segment amounted to $7.6 million in the third quarter, compared to $9.1 million last year. The EBITDA margin decreased to 6.5% from 8.0% in 2015, attributable to additional investments required in relation to the corporate stores initiatives, reduced fixed-cost absorption resulting from the negative organic growth, integration costs, net of synergies, pertaining to the recent business acquisitions and reduction in benefits from price increases compared to 2015.
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