Uni-Select Reports Sales Up, Net Earnings Down

Automotive service parts distributor Uni-Select has declared a year-end sales increase of 13% for 2009, but a drop in net earnings due to discontinued operations and other factors.

For the period ended December 31, 2009, Uni-Select’s sales were $1.4 billion, an increase of $162.3 million or 13% compared to 2008. All figures are in Canadian dollars.

Although net earnings reached $38.6 million or $1.96 per share, a decrease of 16% compared to net earnings of $45.9 million or $2.33 per share recorded in 2008, the 2009 year-end results take into account the loss from discontinued operations in the amount of $4.8 million and non-recurring expenses of $4.3 million incurred during the course of the period.

Excluding the impact from these two items, net earnings would have been $47.7 million or $2.42 per share, for an increase of 1.0%.

Sales for Automotive Group USA increased by 23.1% in 2009 to reach $884.2 million, compared to $718.1 million in 2008.

Acquisitions completed during the course of recent quarters contributed $144.7 million to the increase in sales for the period. Excluding the impact from foreign exchange rate fluctuations, sales for Automotive Group USA would have increased by 17.2%. The operating margin of Automotive Group USA, adjusted to account for non-recurring items, was 5.3% compared to 6.6% in 2008.

This decrease is essentially due to pricing pressures and a change in the mix of products sold, combined with inventory losses which were more significant than those of the preceding period.

Automotive Group Canada recorded a slight decrease in sales in 2009 to total $525.7 million compared to $529.4 million during the course of the previous period. Organic sales grew 2%, but were offset by the effect from the disposition of 14 corporate stores in 2009.

The group’s operating margin, adjusted to account for non-recurring items, increased from 8.6% in 2008 to 9.3% in 2009.

“While these results include various non-recurring items, including the disposal of the Heavy Duty division and costs related to the closure and sale of corporate stores, they are, nevertheless, below expectations. Significant efforts were made in 2009 to reduce our excess asset base and to redistribute funds towards more profitable investments, such as the repurchase of the minority shareholders of Uni-Select USA and the development of an integrated management system which will be gradually launched during the course of the year. Improvement in store performance, distribution optimization, and the use of technology in asset management are at the heart of our 2010 initiatives,” said Richard G. Roy, president and chief executive officer of Uni-Select, in a statement.

“The results of the U.S. operations are not indicative of the coming quarters and combined with the positive performance of the Canadian operations, we are confident that 2010 will return to a level of profitability that our shareholders have become accustomed to,” added Roy.