Uni-Select Sales Up 32% in 2008

Uni-Select reports that acquisitions were the main driving force behind a 32% increase in sales and 13% increase in net earnings.

The North American distribution network is reporting sales of $373,873,000 for the fourth quarter of 2008, an increase of 32.1% compared to sales of $283,111,000 in 2007.

The increase in sales for the company is primarily due to the various acquisitions completed in recent quarters.

Net earnings increased to $14,816,000 in the fourth quarter of 2008 or $0.75 per share compared to $13,080,000 or $0.66 per share last year, an increase of 13.3%.

For the year ended December 31, sales were $1,316,930,000, an increase of $148,641,000 or 12.7% over the same period last year.

The consolidated operating margin has increased by $12,479,000 to 7% compared to 6.8% in 2007.

Net earnings increased 12.4%, to reach $45,920,000 or $2.33 per share compared to net earnings of $40,841,000 or $2.07 per share in 2007. Excluding the impact of non-recurring costs related to store closures in lesser performing markets, net earnings for the year would have been $2.37 per share and 0.79$ for the quarter.

“2008 was a good year performance wise as we were able to meet the objectives of increasing the net revenue, optimizing our asset base, reducing our expenses and successfully integrating the businesses acquired during the last few years. These objectives were met despite the challenging economic situation in North America” said Richard G. Roy, president and chief executive officer of Uni-Select Inc. “In this 40th year of our foundation, we remain optimistic as to our results for 2009. We will benefit from a full year of sales and synergies derived from our acquisitions completed in 2008 and the continued improvement of our operating margins throughout our network. The closure of a few stores in 2008, in areas with lesser potential, is a reflection of our asset management guidelines. While the reduction of the asset base and the disposal of specific stores will once again be on the agenda for 2009.”

Roy also reported that more than 237 Parts Depot independent customers out of 242 have changed over to the Auto-Plus trademark and programs during the fourth quarter. This latest acquisition increased the company’s customers to 2,550 and the number of stores serviced to more than 3,500.

Automotive Group USA

Sales for Automotive Group USA reached $227,940,000 in the fourth quarter compared to $149,740,000 in the fourth quarter of 2007, an increase of 52.2%. The acquisitions completed in recent quarters contributed $57,196,000 to the increase in sales of the fourth quarter. The operating margin for the Group reached 5.8% in the fourth quarter. Excluding the latest two acquisitions whose integration is just underway, the margin is 7.2% an improvement compared to 6.7% in 2007. This improvement is essentially the result of continued improvement programs on margins and cost reduction.

For the year ended December 31, 2008, sales for Automotive Group USA reached $718,132,000, an increase of 18.3% compared to the same period of 2007. This increase essentially stems from the acquisitions completed during the course of the period which contributed $143,317,000. The fluctuations in the exchange rate had a non-significant impact on the annual sales (the impact was favorable by $35,569,000 for the fourth quarter). The operating margin of the Group reached 6.5% in 2008. Excluding the last two acquisitions whose integration started late 2008 the margin is 7.0% an improvement of nearly 1% compared to 6.2% in 2007.

Automotive Group Canada

Automotive Group Canada reported an increase in sales of 9.6% in the fourth quarter of 2008 to reach $125,081,000 compared to $114,167,000 in the fourth quarter of 2007. The acquisitions completed in the recent quarters contributed $7,072,000 to the increase in sales in the quarter. The operating margin of the Group was 11.6% compared to 10.4% in the fourth quarter last year.

For the year ended December 31, 2008, sales for Automotive Group Canada were $529,420,000, an increase of 6.3% compared to the same period in 2007. This increase is essentially the result of the acquisitions completed during the period which contributed $38,800,000 in sales. The operating margin remained stable at 8.5% compared to 2007.

Heavy Duty Group

Sales for the Heavy Duty Group increased by 8.6% in the fourth quarter of 2008 to reach $20,852,000 compared to $19,204,000 in 2007. The operating margin for the Heavy Duty Group was 7.4% in the fourth quarter of 2008 compared to 8.0% last year. This decrease in the margin stems essentially from the effects of the current economic situation which affects the heavy duty transport industry and the strong competition in that business segment.

For the year ended December 31 2008, sales for the Heavy Duty Group were $69,378,000, an increase of 9.8% compared to the same period in 2007. The operating margin was 1.2% an improvement of 1.5% compared to (0.3%) recorded in 2007.

During the fourth quarter, the company generated more than $60,000,000 in cash flow resulting from operating activities with more than $43,000,000 used to reduce the bank indebtedness. Uni-Select benefits from a strong balance sheet and its long term credit facility is not up for renewal before October 2011 allowing for room to pursue its development plan.

The board of directors of Uni-Select Inc. declared a quarterly dividend of $0.1165 per common share payable on April 21, 2009 to shareholders of record as at March 31, 2009. This dividend is eligible. The annual shareholders meeting will be held in Montreal on May 5, 2009.

Uni-Select is Canada’s second largest distributor of automotive replacement parts, equipment, tools and accessories and, through Uni-Select USA, Inc., the company also provides services to customers in the United States where it is the 7th largest distributor.