Uni-Select reports double-digit growth in Q3 2016 for its sales, EBITDA and EPS
(firmenpresse) - BOUCHERVILLE, QUEBEC -- (Marketwired) -- 10/26/16 --
Note: The foregoing numbers are compared with Q3 2015.
Unless otherwise indicated in this press release, all amounts are expressed in US dollars.
Uni-Select Inc. (TSX: UNS) today 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 ("sale of the net assets").)
For further information about the Corporation''s use of the non-IFRS measures identified in this press release, refer to "Non-IFRS financial measures" and "Reconciliation of non-IFRS measures" sections.
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.
Segmented Results
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.
NINE-MONTH PERIOD RESULTS
(All percentage increases and decreases represent year-over-year variances for the nine-month period of 2016 compared to the nine-month period of 2015, unless otherwise noted.)
Consolidated sales for the nine-month period were $906.3 million, a 17.3% decrease, mainly due to the sale of the net assets in 2015. Excluding sales from the net assets sold, consolidated sales grew 13.7% compared to last year. Sales generated from recent business acquisitions combined with organic growth and the effect of an additional billing day exceeded the impact of the declining Canadian dollar on its conversion to US dollar, which alone penalized sales by $13.9 million or 1.7%.
On an organic basis, consolidated sales grew by 0.5%, supported by the net customer recruitment and existing customer growth in the Paint and Related Products segment, which was partially offset by the performance in the Automotive Products segment.
The Corporation generated an EBITDA and an adjusted EBITDA of $82.3 million for the nine-month period of 2016, compared to a negative EBITDA of $77.3 million and adjusted EBITDA of $76.6 million last year. The EBITDA margin and adjusted EBITDA margin grew to 9.1%, up 210 points when compared to the adjusted EBITDA margin of 2015. That enhancement was driven by the sale of net assets bearing a lower margin compared to the ongoing operations, accretive business acquisitions, improved ongoing buying conditions and lower stock-based compensation expenses. These factors were partially offset by negative synergies following the sale of net assets, additional investments related to the corporate stores initiatives and acquisitions and integration related costs.
Net earnings grew to $45.6 million from a net loss of $54.2 million last year, while adjusted earnings decreased by 0.5%. Earnings per share and adjusted earnings per share both were $1.07 compared to a loss per share of $1.27 and adjusted earnings per share of $1.07 in 2015.
Segmented Results
The Paint and Related Products segment recorded sales of $572.1 million, up 23.0% from 2015, or up 2.2% organically, namely as a result of the existing customer growth and net customer recruitment. The segment EBITDA margin reached 12.5%, up 90 points from last year. This performance is notably attributable to improved buying conditions, accretive business acquisitions, and lower insurance claims, partially offset by evolving revenue mix and acquisition and integration costs.
Sales for the Automotive Products segment were $334.2 million, from $631.0 million in the prior year. Excluding the impact on sales related to the net assets sold, sales increased by 0.8% compared to 2015. Sales from recent business acquisitions, combined with the effect of additional billing days, exceeded the weaker Canadian dollar which had an impact, on its conversion to US dollar, of $13.9 million on sales or 4.2%. Organic sales decreased by 1.8% in the nine-month period 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 and adjusted EBITDA for the Automotive Products segment amounted to $21.1 million for the nine-month period, compared to a negative EBITDA of $116.9 million and adjusted EBITDA of $29.8 million last year. The adjusted EBITDA margin reached 6.3%, a 160 points increase from 4.7% in 2015, a performance attributable to the weaker performance from the operations sold on June 1, 2015. The increase is partially offset by additional investments required in relation to the corporate stores initiatives, reduced fixed-cost absorption resulting from the negative organic growth, integration costs pertaining to the recent business acquisitions and reduction in benefits from price increases compared to 2015.
DIVIDENDS
On October 26, 2016, the Uni-Select Board of Directors declared a dividend of C$0.085 per share payable on January 17, 2017 to shareholders of record on December 31, 2016. This dividend is an eligible dividend for tax purposes.
CONFERENCE CALL
Uni-Select will host a conference call to discuss its third quarter and nine-month period results for 2016 on October 27, 2016 at 8:00 AM (EDT). To join the conference, dial 1 866 696-5910 followed by 9180682.
A recording of the conference call will be available from 10:00 AM (EDT) on October 27, 2016 until 11:59 PM (EDT) on November 7, 2016. To access the replay, dial 1 800 408-3053 followed by 2596890.
A live webcast of the quarterly results conference call will also be accessible through the of our website where a replay will also be archived. Listeners should allow ample time to access the webcast and supporting slides.
ABOUT UNI-SELECT
Uni-Select is a leader in the distribution of automotive refinish and industrial paint and related products in North America, as well as a leader in the automotive aftermarket parts business in Canada. In Canada, Uni-Select supports over 3,900 automotive repair and collision repair shops through a growing national network of more than 1,150 independent customers and corporate stores, many of which operating under Uni-Select store banner programs, Bumper to Bumper®, Auto Parts Plus® and FinishMaster®. In the United States, Uni-Select, through its wholly-owned subsidiary FinishMaster, Inc., operates a national network of automotive refinish corporate stores under the FinishMaster banner and supports more than 6,000 collision repair centre customers. Uni-Select is headquartered in Boucherville, Quebec, Canada, and its shares are traded on the Toronto Stock Exchange (TSX) under the symbol UNS.
FORWARD-LOOKING INFORMATION
The information provided in this press release may include some forward-looking information, which could include certain risks and uncertainties, which may cause the final results to be significantly different from those listed or implied within this news release. For additional information with respect to risks and uncertainties, refer to the Annual Report filed by Uni-Select with the Canadian securities commissions. The forward-looking information contained herein is made as of the date of this press release, and Uni-Select does not undertake to publicly update such forward-looking information to reflect new information, subsequent or otherwise, unless required by applicable securities laws.
ADDITIONAL INFORMATION
The Management''s Discussion and Analysis (MD&A), interim consolidated financial statements and related notes for the third quarter and nine-month period of 2016 are available in the "Investors" section on the Corporation''s website at uniselect.com as well as on SEDAR at sedar.com. The Corporation''s Annual Report may also be found on these websites as well as other information related to Uni-Select, including its Annual Information Form.
NON-IFRS FINANCIAL MEASURES
The information included in this press release contains certain measures that are inconsistent with IFRS. Non-IFRS financial measures do not have any standardized meaning prescribed by IFRS and are, therefore, unlikely to be comparable to similar measures presented by other entities.
Organic growth - This measure consists of quantifying the increase in pro forma consolidated sales between two given periods, excluding the impact of acquisitions, sales and disposals of stores, net assets sold, exchange-rate fluctuations and when necessary, the variance in the number of billing days. This measure enables Uni-Select to evaluate the intrinsic trend in the sales generated by its operational base in comparison with the rest of the market. Determining the rate of organic growth, based on findings that Management regards as reasonable, may differ from the actual rate of organic growth.
EBITDA - This measure represents net earnings excluding finance costs, depreciation and amortization, equity income and income taxes. This measure is a financial indicator of a corporation''s ability to service and incur debt. It should not be considered by an investor as an alternative to sales or net earnings, as an indicator of operating performance or cash flows, or as a measure of liquidity, but as additional information.
Adjusted EBITDA, adjusted earnings and adjusted earnings per share - Management uses adjusted EBITDA, adjusted earnings and adjusted earnings per share to assess EBITDA, net earnings and net earnings per share from operating activities, excluding certain adjustments, net of income taxes (for adjusted earnings and adjusted earnings per share), which may affect the comparability of the Corporation''s financial results. Management considers that these measures are more representative of the Corporation''s operational performance and more appropriate in providing additional information. These adjustments include, among other things, restructuring and other charges, impairment and transaction charges related to the sale of net assets and costs related to the closure and disposal of stores. The exclusion of these items does not indicate that they are non-recurring.
EBITDA margin and adjusted EBITDA margin - The EBITDA margin is a percentage corresponding to the ratio of the EBITDA to sales. The adjusted EBITDA margin is a percentage corresponding to the ratio of adjusted EBITDA to sales.
Total net debt - This measure consists of long-term debt, including the portion due within a year, net of cash.
RECONCILIATION OF NON-IFRS MEASURES
The following table presents a reconciliation of organic growth.
The following table presents a reconciliation of EBITDA and adjusted EBITDA.
The following table presents a reconciliation of adjusted earnings and adjusted earnings per share.
The effect of the declining Canadian dollar on its conversion to US dollar was nil on earnings per share for the quarter compared to the same period of 2015, while the effect for the nine-month period was $(0.01) compared to the same period last year.
Contacts:
Eric Bussieres
Chief Financial Officer
450 641-6958
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Datum: 26.10.2016 - 17:03 Uhr
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