Uni-Select Reports Strong Third Quarter Profit, Automotive Margins Down

Uni-Select’s financial results for the third quarter of 2002 show a strong increase in profits over the previous year, with significant growth occurring in its automotive segment.
Net profits increased by 21.0% to attain $5,856,000 or $0.32 per share compared to $4,840,000 or $0.27 per share in the previous year. Net profits for the nine-month period ended September 30, 2002 reached $14,550,000 or $0.81 per share compared to $11,458,000 and $0.64 per share during the course of the preceding year. Sales in the third quarter were $180,585,000, an increase of 10.8% compared to sales of $162,997,000 realized in the third quarter of 2001. Sales reached $508,877,000 for the nine-month period ended September 30, 2002, an increase of 7.6% compared to sales of $472 874,000 realized in 2001. All figures are in Canadian dollars.
Sales for Automotive Group Canada increased by 12.8% during the course of the third quarter to reach $128,925,000. Organic growth for the group was 1.2% when compared to the same number of days as in the third quarter of 2001. The remainder of the growth is attributable to the joint venture created in the Prairies on February 1st with Acklands-Grainger Inc. offset, in part, by a change in the estimate of rebates earned by our merchant members.
The third quarter also included an additional billing day when compared to the same period in 2001.
The operating margin of Automotive Group Canada in the third quarter was reported at 6.1%, down from to 7.1% a year earlier, due to the lower margin on additional revenues of the new joint venture and related non-recurring integration expenses, bad debt charges and expenses related to the implementation of the warehouse management system.
The contribution of Automotive Group USA to Uni-Select’s sales increased by 3.7% to attain $37,189,000 compared to $35,850,000 in the same quarter of the preceding year. This increase is mainly due to the effects of the exchange rate as well as an additional billing day when compared to the same period in 2001. Aside from these elements, sales of Automotive Group USA remained stable. The negative trend experienced during the previous quarters has been reversed. The impact of several new clients recruited in the course of recent months is now being felt. Automotive Group USA’s operating margin in the third quarter remained unchanged at 5.1%.
The Heavy-Duty Group enjoyed sales of $14,471,000 in the third quarter of 2002, an increase of 12.6% compared to sales of $12,852,000 in the corresponding period a year earlier. This growth is essentially organic and would have been 11.4% had the same number of days been compared. The group increased its operating margin by 168% in the third quarter. On an annual basis, the group will continue to improve its operating profit and expects to generate profit for the year with respect to both its operating and net profit.
Finally, the board of directors of Uni-Select declared a quarterly dividend of $0.056 per common share payable on January 20, 2003 to shareholders of record as at December 31, 2002.