ANNUAL HIGHLIGHTS:
- Consolidated sales of $1,612.8
million, up $141.0 million or
9.6%, driven by organic growth(1) of 6.0% from
increased demand and continued market recovery from the COVID-19
pandemic; and
- Total long-term debt reduction of $87.2 million compared to last year; Net
debt(1) reduction of $61.0
million compared to last year, driven by strong operating
results, working capital management and capital
discipline.
BOUCHERVILLE, QC, Feb. 18, 2022 /CNW/ - Uni-Select Inc. (TSX:
UNS) ("Uni-Select" or "Corporation") today reported
its financial results for the fourth quarter ended
December 31, 2021.
"We ended the year on a very strong note with 2021 sales up
almost 10% year-over-year, adjusted EBITDA of $147 million and net earnings back in positive
territory. These results reflect the successful implementation of
operational improvements, significant savings on borrowing costs
and the dedication and relentless efforts of all our team members,"
stated Brian McManus, Executive
Chair and Chief Executive Officer of Uni-Select.
"In 2021, we generated cash flow(1) from operating
activities of $114 million, which we
used to make strategic investments to grow our business as well as
reduce our total net debt(1) to $309 million, its lowest level since 2017, ending
the period with a leverage ratio of 2.11.
Based on what we currently see, we expect modest improvement in
sales and higher adjusted EBITDA and adjusted EPS in 2022 compared
to 2021. This assumes more intense inflationary pressures and
supply chain and labor challenges. These factors are expected to be
mitigated by a more optimized cost structure and lower financing
costs as we continue to reinvest in the business and drive
operational improvements in our three business units. Looking to
the future, and making use of our improved balance sheet, we are
beginning to consider strategic acquisition opportunities,"
concluded Mr. McManus.
FOURTH QUARTER HIGHLIGHTS (Compared to the Fourth Quarter of
2020):
- Consolidated sales of $400.2
million, up 9.3%, driven by organic growth(1) of
7.5% primarily resulting from increased demand and prices as global
markets continue to recover from the COVID-19 pandemic;
- EBITDA(1) increased 45.9% to $31.3 million or 7.8% of sales from $21.5 million or 5.9% of sales in 2020, as a
result of improvements in gross margin due to volume and enhanced
scaling of payroll and operating expenses; Adjusted
EBITDA(1) increased 47.2% to $37.4 million or 9.4% of sales;
- Basic EPS of $0.21, up
$0.33; Basic adjusted
EPS(1) of $0.36, up
$0.37 due to increased sales,
enhanced scaling of operating costs as a result of disciplined
operational performance and lower interest costs as a result of the
credit facility amendments completed during 2021; and
- Total net debt to adjusted EBITDA(1) ratio of 2.11,
driven by strong operating results, continued focus on working
capital management and capital discipline.
TWELVE-MONTHS HIGHLIGHTS (Compared to the Twelve-Month Period
of 2020):
- Consolidated sales of $1,612.8
million, up 9.6%, driven by organic growth(1) of
6.0% primarily a result of increased demand and price increases as
global markets continue to recover from the COVID-19 pandemic,
offsetting fewer billing days;
- EBITDA(1) increased 42.1% to $91.9 million or 5.7% of sales from $64.6 million or 4.4% of sales in 2020, as a
result of an improvement in gross margin and scaling of operating
costs; Adjusted EBITDA(1) increased 58.1% to
$146.7 million or 9.1% of sales;
and
- Basic EPS of $0.02, up
$0.76; Basic adjusted
EPS(1) of $1.14, up
$1.26 due to increased sales,
enhanced scaling of operating costs as a result of disciplined
operational performance and lower interest costs as a result of the
credit facility amendments completed during 2021 and lower debt
levels.
____________________________
|
(1)
|
1 This is a
non-GAAP financial measure. Refer to the "Non-GAAP Financial
Measures" section for further details.
|
CONSOLIDATED FINANCIAL RESULTS
During the year, the Corporation updated its definition of
adjusted EBITDA, adjusted EBT, adjusted earnings and basic adjusted
earnings (loss), and is now excluding stock-based compensation.
Management believes this new definition better reflects its core
operational performance. Accordingly, comparative figures were
adjusted to reflect this change, including certain ratios such as
total net debt to adjusted EBITDA. (Refer to the "Non-GAAP
Financial Measures" section for further details.)
The following table presents selected consolidated
information:
|
|
|
|
|
|
Fourth
Quarters Ended
December 31,
|
|
Twelve-Month
Periods Ended Dec.
31,
|
|
(in thousands of US
dollars, except per share amounts,
|
2021
|
2020
|
|
2021
|
2020
|
|
percentages and
otherwise specified)
|
$
|
$
|
%
|
$
|
$
|
%
|
OPERATING
RESULTS
|
|
|
|
|
|
|
Sales
|
400,175
|
366,246
|
9.3
|
1,612,800
|
1,471,816
|
9.6
|
EBITDA(1)
|
31,312
|
21,457
|
45.9
|
91,882
|
64,643
|
42.1
|
EBITDA
margin(1)
|
7.8
%
|
5.9
%
|
|
5.7
%
|
4.4
%
|
|
Adjusted
EBITDA(1)
|
37,433
|
25,425
|
47.2
|
146,695
|
92,791
|
58.1
|
Adjusted EBITDA
margin(1)
|
9.4
%
|
6.9
%
|
|
9.1
%
|
6.3
%
|
|
EBT(1)
|
10,311
|
(2,521)
|
509.0
|
1,803
|
(35,304)
|
105.1
|
EBT
margin(1)
|
2.6
%
|
(0.7)
%
|
|
0.1
%
|
(2.4)
%
|
|
Adjusted
EBT(1)
|
19,209
|
2,512
|
664.7
|
62,748
|
(3,010)
|
2,184.7
|
Adjusted EBT margin
(1)
|
4.8
%
|
0.7
%
|
|
3.9
%
|
(0.2)
%
|
|
Change in estimate
related to inventory obsolescence
|
1,019
|
—
|
|
21,619
|
—
|
|
Stock-based
compensation
|
5,177
|
1,525
|
|
11,380
|
3,980
|
|
Special
items
|
(75)
|
2,443
|
|
21,814
|
24,168
|
|
Net earnings
(loss)
|
9,008
|
(5,075)
|
277.5
|
895
|
(31,531)
|
102.8
|
Adjusted earnings
(loss)(1)
|
15,678
|
(292)
|
5,469.2
|
48,885
|
(4,901)
|
1,097.4
|
Free cash
flows(1)
|
19,624
|
46,061
|
(57.4)
|
91,452
|
122,276
|
(25.2)
|
COMMON SHARE
DATA
|
|
|
|
|
|
|
Basic earnings (loss)
per share
|
0.21
|
(0.12)
|
271.8
|
0.02
|
(0.74)
|
102.8
|
Diluted earnings
(loss) per share
|
0.20
|
(0.12)
|
267.0
|
0.02
|
(0.74)
|
102.7
|
Basic adjusted
earnings (loss) per share (1)
|
0.36
|
(0.01)
|
3,756.5
|
1.14
|
(0.12)
|
1,021.0
|
Number of shares
outstanding (in thousands) (3)
|
43,582
|
42,387
|
|
43,582
|
42,387
|
|
Weighted average
number of outstanding shares
|
|
|
|
|
|
|
Basic (in
thousands)
|
43,781
|
42,387
|
|
42,904
|
42,387
|
|
Diluted (in
thousands)
|
52,302
|
42,387
|
|
43,064
|
42,387
|
|
|
As at
December 31,
|
|
2021
|
2020
|
|
$
|
$
|
FINANCIAL
POSITION
|
|
|
Total net
debt(1)
|
309,230
|
370,252
|
Credit facilities
(including revolving and term loans) at nominal value
|
235,384
|
318,379
|
Convertible
debentures
|
78,327
|
87,728
|
|
|
(1)
|
This is a non-GAAP
financial measure. Refer to the "Non-GAAP Financial Measures"
section for further details.
|
(2)
|
On April 20, 2020,
the Board decided to suspend dividend payments.
|
(3)
|
The outstanding
number of shares corresponds to the issued common shares less the
shares in the Share Trust.
|
FOURTH QUARTER RESULTS
Compared to the Fourth Quarter of 2020:
Consolidated sales of $400.2 million for the quarter increased by
9.3%, mainly driven by organic growth of 7.5% and favorable
Canadian and British currency fluctuations, offsetting the adverse
effect of fewer billing days. Consolidated organic growth continued
to improve in the quarter reflecting the global market
recovery.
The Corporation generated EBITDA of $31.3 million for the quarter, which was
mainly impacted by stock-based compensation of $5.2 million primarily due to the
Corporation's share price appreciation, as well as by a change in
estimate related to inventory obsolescence of $1.0 million. Adjusted EBITDA and adjusted
EBITDA margin increased by $12.0 million and 2.5% respectively to
$37.4 million and 9.4% of sales,
from $25.4 million and 6.9% of
sales in 2020. This performance was largely driven by additional
vendor rebates in all segments. Furthermore, the quarter benefited
from scaling benefits linked to organic growth and a streamlined
cost structure. These elements were, in part, offset by a higher
level of expenses during the current quarter of 2021, as the fourth
quarter of 2020 benefited from government assistance programs,
lower labor costs due to temporary employee furloughs and temporary
closure of company-operated stores in response to the reduced
demand effects of the pandemic. The current quarter of 2021 also
had higher short-term incentive expenses, due to operational
performance.
Net earnings for the quarter increased by $14.1 million to $9.0 million and adjusted earnings increased
by $16.0 million to $15.7 million from an adjusted loss of
$(0.3) million in 2020. This performance is primarily
attributable to increased sales, better scaling on operating costs
as a result of disciplined operational performance, lower interest
costs as a result of the credit facility amendments completed
during both the second and the fourth quarters of 2021 and lower
debt levels.
Segmented Fourth Quarter Results
The FinishMaster U.S. segment reported sales of $167.8 million, organically increasing by
8.5%. This segment reported organic growth for a third consecutive
quarter, stimulated by the market recovery across its operations.
EBITDA was $15.4 million for the
quarter, compared to $8.2 million in 2020. Adjusted EBITDA and
adjusted EBITDA margin improved by $7.2 million and 3.9% respectively to
$15.6 million and 9.3% of sales,
from $8.4 million and 5.4% of
sales in 2020. This performance was driven by higher sales volume
and rebates, increasing gross margin and improving fixed cost
absorption. During the same quarter in 2020, this segment was
affected by lower rebates in relation to the optimization of the
inventory levels. Starting in the third quarter of 2020, this
segment has reported improved adjusted EBITDA in each quarter over
the comparable quarter in the prior year, both in dollar and as a
percentage of sales, as a result of measures put in place and a
broader market recovery.
The Canadian Automotive Group segment reported sales of
$136.0 million, an increase of
8.8% supported by organic growth of 5.5%, from higher demand and
price increases during the current quarter as well as the
appreciation of the Canadian dollar, offset by the adverse effect
of a fewer number of billing days. This segment reported EBITDA of
$14.7 million for the quarter,
compared to $12.7 million
in 2020. Adjusted EBITDA and adjusted EBITDA margin increased
by $3.3 million and 1.6%
respectively to $16.8 million or
12.4% of sales, from $13.5 million or 10.8% of sales in 2020. The
variance is mainly explained by additional vendor rebates, product
mix and price increases, which were partially offset by foreign
exchange losses while the fourth quarter of 2020 benefited from
foreign exchange gains, as well as by higher short-term payroll
incentive expenses, in line with the operating performance of the
segment.
The GSF Car Parts U.K. segment reported sales of $96.4 million, an increase of 11.2%, mainly
driven by organic growth of 8.6% and a strong British pound against
the US dollar during the current quarter of 2021. Organic growth of
the U.K. segment continued to improve during the quarter and sales
were in line with 2019. This segment reported EBITDA of
$6.5 million for the quarter,
compared to $6.7 million in
2020. Adjusted EBITDA and adjusted EBITDA margin increased by
$0.7 million and decreased by
0.1%, respectively, to $7.4 million and 7.6% of sales, from
$6.7 million and 7.7% of sales
in 2020. This improvement is attributable to additional sales
volume, increasing gross margin due to higher vendor rebates and
improved fixed cost absorption. Furthermore, the fourth quarter of
2020 benefited from government occupancy subsidies of $1.0 million or 1.2% of sales. Starting in
the third quarter of 2020, this segment has reported improved
adjusted EBITDA in each quarter over the comparable quarter in the
prior year in dollar terms.
TWELVE-MONTH PERIOD RESULTS
Compared to the
Twelve-Month Period of 2020:
Consolidated sales increased by $141.0 million or 9.6% to $1,612.8 million for the period, mainly
driven by organic growth of 6.0% as the markets in which the
Corporation operates, continue to recover from the COVID-19
pandemic and the favorable fluctuations of the British and the
Canadian currencies. This performance offsets the adverse impact of
fewer billing days and the expected sales loss from the
consolidation of company-operated stores.
The Corporation reported EBITDA of $91.9 million for the period, which was
impacted by a change in estimates of $21.6 million related to inventory
obsolescence primarily in the FinishMaster U.S. segment, special
items of $21.8 million, mainly
for severance related to changes to executive leadership, as well
as stock-based compensation of $11.4 million primarily as a result of the
strong appreciation of the Corporation's share price. Adjusted
EBITDA and adjusted EBITDA margin increased by $53.9 million and 2.8% respectively to
$146.7 million and 9.1% of
sales, from $92.8 million and
6.3% of sales in 2020. This performance resulted from improved
gross margins due to additional volume rebates and price increases,
a streamlined cost structure, as well as an improved fixed cost
absorption related to organic growth. Furthermore, the results of
the twelve-month period benefited from improved collection of
receivables while additional bad debt expense was recorded during
2020. These elements were partially offset by a higher overall
level of expenses related to the sales recovery and by higher
short-term payroll incentives due to operational performance, while
the same period of 2020 benefited from temporary employee furloughs
and closure of company operated-stores in response to the reduced
demand effects of the pandemic. In 2020, the Corporation also
benefited from governmental assistance programs that were offset by
additional obsolescence.
The Corporation reported net earnings of $0.9 million for the current period compared
to a net loss of $(31.5) million in 2020. Adjusted earnings
for the current period increased by $53.8 million to $48.9 million from an adjusted loss of
$(4.9) million in 2020. This improvement in adjusted earnings
was driven by higher volume of sales and improved overall
operational performance, including reduced net financing costs as a
result of the amendments to the credit facility completed during
the year 2021 and lower debt levels.
Segmented Twelve-Month Period Results
The FinishMaster U.S. segment reported sales of $672.1 million, an increase of 2.8%, driven
by organic growth of 3.6%, or $23.6 million, in part offset by a lower
number of billing days. This segment reported EBITDA of
$31.3 million for the period,
which was impacted by a change in estimates related to inventory
obsolescence, special items and stock-based compensation, totaling
$24.1 million. Adjusted EBITDA
and adjusted EBITDA margin increased by $22.4 million and 3.2% respectively to
$55.4 million and 8.2% of sales,
from $32.9 million and 5.0% of
sales in 2020. This performance is attributable to additional
vendor incentives and price increases, cost reduction initiatives,
including workforce optimization, company-operated store
consolidation, diligent control of overall discretionary expenses
and a partial reversal of bad debt provision due to improved
collection. During the twelve-month period last year, this segment
was affected by additional inventory obsolescence and bad debt
expenses.
The Canadian Automotive Group segment reported sales of
$540.9 million, an increase of
11.4%, driven by the appreciation of the Canadian dollar and
organic growth of 4.2%. The organic increase in sales was the
result of a higher demand and price increases. This segment
reported EBITDA of $59.9 million
for the period, which was impacted by stock-based compensation,
special items and a change in estimate related to inventory
obsolescence. Adjusted EBITDA and adjusted EBITDA margin increased
by $15.3 million and 1.8%
respectively to $63.5 million
and 11.7% of sales, from $48.2 million and 9.9% of sales in 2020.
This performance is mainly attributable to additional vendor
rebates, product mix and price increases. These elements were
partially offset by higher short-term incentive expenses, due to
the operating performance of the segment. Furthermore, the
twelve-month period of 2020 benefited from government payroll
subsidies of $3.3 million.
The GSF Car Parts U.K. segment reported sales of $399.8 million, an increase of 20.2%, mainly
from organic growth of 13.1% and a strong British pound against the
US dollar during the year 2021, exceeding the unfavorable variance
in the number of billing days and the expected sales loss resulting
from the consolidation of company-operated stores. This segment
reported EBITDA of $32.8 million
for the period, which was mainly impacted by special items and
stock-based compensation. Adjusted EBITDA and adjusted EBITDA
margin increased by $16.3 million and 3.0% respectively to
$36.8 million and 9.2% of sales,
from $20.5 million and 6.2% of
sales in 2020. This improvement was driven by additional sales
volume, as well as improved gross margin from higher vendor rebates
and price increases. During the twelve-month period of 2020,
results were affected by additional reserves for inventory
obsolescence and bad debt, which were specific to the economic
slowdown in the U.K.
AMENDMENT CREDIT FACILITY
In December 2021, the Corporation
entered into a second amended and restated credit agreement. Under
this agreement, the aggregate amount available under the credit
facility was reduced to $400,000
(plus an accordion feature of $200,000) through the conversion into one single
secured long-term revolving credit facility, and immediate
cancellation, of the outstanding secured term facilities.
CONFERENCE CALL
Uni-Select will host a conference call
to discuss its fourth-quarter and annual results for 2021 on
February 18, 2022, at 8:00 AM Eastern. To join the
conference, dial 1 888 390-0549 (or 1 416 764-8682 for
international calls).
A recording of the conference call will be available from
11:30 AM Eastern on February 18, 2022, until
11:59 PM Eastern on March 18, 2022. To access the
replay, dial 1 888 390-0541 followed by 630730#.
A webcast of the quarterly results conference call will also be
accessible through the "Investors" section of our website at
uniselect.com where a replay will also be archived. Listeners
should allow ample time to access the webcast and supporting
slides.
ABOUT UNI-SELECT
With over 4,800 employees in Canada, the U.S. and the U.K., Uni-Select is a
leader in the distribution of automotive refinish and industrial
coatings and related products in North
America, as well as a leader in the automotive aftermarket
parts business in Canada and in
the U.K. Uni-Select is headquartered in Boucherville, Québec, Canada, and its shares are traded on the
Toronto Stock Exchange under the symbol UNS.
In Canada, Uni-Select supports
over 16,000 automotive repair and collision repair shops and more
than 4,000 shops through its automotive repair/installer shop
banners and automotive refinish banners. Its national network
includes over 1,000 independent customer locations and more than 75
company-operated stores, many of which operate under the Uni-Select
BUMPER TO BUMPER®, AUTO PARTS PLUS® and FINISHMASTER® store banner
programs.
In the United States,
Uni-Select, through its wholly-owned subsidiary FinishMaster, Inc.,
operates a national network of over 145 automotive refinish
company-operated stores under the FINISHMASTER® banner, which
supports over 30,000 customers annually.
In the U.K., Uni-Select, through GSF Car Parts, is a major
distributor of automotive parts supporting over 20,000 customer
accounts with a network of over 170 company-operated stores.
www.uniselect.com
CAUTION REGARDING FORWARD-LOOKING INFORMATION
Certain statements made in this press release are
forward-looking information within the meaning of Canadian
securities laws. All such forward-looking information is made and
disclosed in reliance upon the "safe harbour" provisions of
applicable Canadian securities laws.
Forward-looking information includes all information and
statements regarding Uni-Select's intentions, plans, expectations,
beliefs, objectives, future performance, and strategy, as well as
any other information or statements that relate to future events or
circumstances and which do not directly and exclusively relate to
historical facts. Forward-looking statements often, but not always,
use words such as "believe", "estimate", "expect", "intend",
"anticipate", "foresee", "plan", "predict", "project", "aim",
"seek", "strive", "potential", "continue", "target", "may",
"might", "could", "should", and similar expressions and variations
thereof. In addition, statements with respect to management
expectations in terms of sales, adjusted EBITDA and adjusted EPS
for 2022 constitute forward-looking information and financial
outlook within the meaning of Canadian securities laws.
Forward-looking information is based on Uni-Select's perception
of historic trends, current conditions and expected future
developments, as well as other assumptions, both general and
specific, that Uni-Select believes are appropriate in the
circumstances. Such information is, by its very nature, subject to
inherent risks and uncertainties, many of which are beyond the
control of Uni‑Select, and which give rise to the possibility that
actual results could differ materially from Uni-Select's
expectations expressed in, or implied by, such forward-looking
information. Uni-Select cannot guarantee that any forward-looking
information will materialize, and we caution readers against
relying on any forward-looking information.
These risk and uncertainties include, but are not restricted to:
risks associated with the COVID-19 pandemic, reduced demand for our
products, disruptions of our supplier relationships or of our
suppliers' operations or supplier consolidation, disruption of our
customer relationships, competition in the industries in which we
do business, security breaches, information security malfunctions
or integration issues, the demand for e-commerce and failure to
provide adequate e-commerce solutions, retention of employees,
labor costs, union activities and labor and employment laws,
failure to realize benefits of acquisitions and other strategic
transactions, product liability claims, credit risk, loss of right
to operate at key locations, failure to implement business
initiatives, failure to maintain effective internal controls,
macro-economic conditions such as unemployment, inflation, changes
in tax policies and uncertain credit markets, operations in foreign
jurisdictions, inability to service our debt or fulfill financial
covenants, litigation, legislation or government regulation or
policies, compliance with environmental laws and regulations,
compliance with privacy laws, global climate change, changes in
accounting standards, share price fluctuations, corporate social
responsibility and reputation and activist investors as well as
other risks identified or incorporated by reference in this press
release and in other documents that we make public, including our
filings with the Canadian Securities Administrators (on SEDAR at
www.sedar.com).
Unless otherwise stated, the forward-looking information
contained in this press release is made as of the date hereof and
Uni-Select disclaims any intention or obligation to publicly update
or revise any forward-looking statements, whether as a result of
new information, future events or otherwise, except as required by
applicable law. While we believe that our assumptions on which the
forward-looking information is based were reasonable as at the date
of this press release, readers are cautioned not to place undue
reliance on the forward-looking information.
Furthermore, readers are reminded that forward-looking
information is presented for the sole purpose of assisting
investors and others in understanding Uni-Select's expected
financial results, as well as our objectives, strategic priorities
and business outlook and our anticipated operating environment.
Readers are cautioned that such information may not be appropriate
for other purposes and should not be relied upon as necessarily
being indicative future financial results.
Further information on the risks that could cause our actual
results to differ significantly from our current expectations may
be found in the section titled "Risk Management" of our MD&A,
for the year ended December 31, 2021,
which is incorporated by reference in this cautionary
statement.
We also caution readers that the above-mentioned risks and the
risks disclosed in our MD&A for the year ended December 31, 2021 and other documents and filings
are not the only ones that could affect us. Additional risks and
uncertainties not currently known to us or that we currently deem
to be immaterial could also have a material adverse effect on our
business, operating results, cash flows and financial
condition.
NON-GAAP FINANCIAL MEASURES
The information included in this Press release contains certain
financial measures that are inconsistent with GAAP. Non-GAAP
financial measures do not have any standardized meaning
prescribed by GAAP and are therefore unlikely to be comparable to
similar measures presented by other entities. The Corporation is of
the opinion that users of its Press release may analyze its results
based on these measurements. The following presents
performance measures used by the Corporation which are not defined
by GAAP.
Organic growth – This measure consists of
quantifying the increase in consolidated sales between two given
periods, excluding the impact of acquisitions, the loss of sales
from the consolidation of company-operated stores, 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. Organic growth is based on
what management regards as reasonable and may not be comparable to
other corporations' organic growth.
EBITDA and adjusted EBITDA – EBITDA
represents net earnings (loss) excluding depreciation and
amortization, net financing costs and income tax expense
(recovery). 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 contains certain adjustments, which may affect
the comparability of the Corporation's financial results. These
adjustments include, among other things, restructuring and other
charges, stock-based compensation expenses, write-off of assets as
well as change in estimate related to inventory obsolescence.
EBITDA margin and adjusted EBITDA margin – EBITDA
margin is a percentage corresponding to the ratio of EBITDA to
sales. Adjusted EBITDA margin is a percentage corresponding to the
ratio of adjusted EBITDA to sales.
EBT, adjusted EBT, adjusted earnings and adjusted earnings
per share – Management uses adjusted earnings before
taxes "EBT", adjusted earnings (loss) and adjusted earnings
(loss) per share to assess earnings before taxes, net earnings
(loss) and net earnings (loss) per share from core operating
activities, containing certain adjustments, net of income taxes for
adjusted earnings(loss) and adjusted earnings (loss) per share,
which may affect the comparability of the Corporation's financial
results. Management considers that these measures facilitate the
analysis and understanding of the Corporation's operational
performance. The intent of these measures is to provide additional
information.
These adjustments include, among other things, restructuring and
other charges, stock-based compensation expenses, change in
estimate related to inventory obsolescence, write-off of deferred
financing costs, as well as amortization of intangible assets
related to The Parts Alliance acquisition (now known as GSF Car
Parts). The exclusion of these items does not indicate that they
are non-recurring.
EBT margin and adjusted EBT margin –EBT
margin is a percentage corresponding to the ratio of EBT to sales.
Adjusted EBT margin is a percentage corresponding to the ratio of
adjusted EBT to sales.
Free cash flows – This measure corresponds to the
cash flows from operating activities according to the consolidated
statements of cash flows adjusted for the following items: net
acquisitions of property and equipment, net advances to merchant
members and incentives granted to customers, as well as net
acquisitions and development of intangible assets. Uni-Select
considers the free cash flows to be an indicator of financial
strength and of operating performance because it shows the amount
of funds available to manage growth, repay debt, reinvest in the
Corporation and capitalize on various market opportunities that
arise.
The free cash flows exclude certain other funds generated and
used according to the consolidated statements of cash flows.
Therefore, it should not be considered as an alternative to the
consolidated statements of cash flows, or as a measure of
liquidity, but as additional information.
Total net debt – This measure corresponds to the sum
of the revolving credit facility, term facilities, lease
obligations (including the portion due within a year), net of
deferred financing costs and cash.
Total net debt to adjusted EBITDA ratio – This ratio
corresponds to total net debt (as defined above) divided by
adjusted EBITDA.
The following is a reconciliation of organic growth.
|
Fourth
Quarters Ended
December 31,
|
Twelve-Month
Periods Ended Dec.
31,
|
|
2021
|
2020
|
2021
|
2020
|
|
$
|
$
|
$
|
$
|
FinishMaster
U.S.
|
167,788
|
154,657
|
672,124
|
653,720
|
Canadian Automotive
Group
|
135,961
|
124,908
|
540,879
|
485,388
|
GSF Car Parts
U.K.
|
96,426
|
86,681
|
399,797
|
332,708
|
Sales
|
400,175
|
366,246
|
1,612,800
|
1,471,816
|
|
|
%
|
|
%
|
Sales
variance
|
33,929
|
9.3
|
140,984
|
9.6
|
Translation effect of
the Canadian dollar and the British pound
|
(6,981)
|
(1.9)
|
(60,911)
|
(4.1)
|
Impact of number of
billing days
|
1,089
|
0.3
|
9,023
|
0.6
|
Loss of sales from the
consolidation of company-operated stores
|
—
|
—
|
1,185
|
0.1
|
Acquisitions
|
(520)
|
(0.2)
|
(2,659)
|
(0.2)
|
Consolidated organic
growth
|
27,517
|
7.5
|
87,622
|
6.0
|
The following is a reconciliation of EBITDA and adjusted
EBITDA.
|
Fourth
Quarters Ended
December 31,
|
|
Twelve-Month
Periods Ended Dec.
31,
|
|
|
2021
|
2020
|
|
2021
|
2020
|
|
|
$
|
$
|
%
|
$
|
$
|
%
|
Net earnings
(loss)
|
9,008
|
(5,075)
|
|
895
|
(31,531)
|
|
Income tax expense
(recovery)
|
1,303
|
2,554
|
|
908
|
(3,773)
|
|
Net financing
costs
|
6,595
|
9,087
|
|
30,224
|
37,350
|
|
Depreciation and
amortization
|
14,406
|
14,891
|
|
59,855
|
62,597
|
|
EBITDA
|
31,312
|
21,457
|
45.9
%
|
91,882
|
64,643
|
42.1
%
|
EBITDA
margin
|
7.8
%
|
5.9
%
|
|
5.7
%
|
4.4
%
|
|
Change in estimate
related to inventory obsolescence
|
1,019
|
—
|
|
21,619
|
—
|
|
Stock-based
compensation
|
5,177
|
1,525
|
|
11,380
|
3,980
|
|
Special
items
|
(75)
|
2,443
|
|
21,814
|
24,168
|
|
Adjusted
EBITDA
|
37,433
|
25,425
|
47.2
%
|
146,695
|
92,791
|
58.1
%
|
Adjusted EBITDA
margin
|
9.4
%
|
6.9
%
|
|
9.1
%
|
6.3
%
|
|
The following is a reconciliation of EBT and adjusted EBT.
|
Fourth
Quarters Ended
December 31,
|
|
Twelve-Month
Periods Ended Dec.
31,
|
|
|
2021
|
2020
|
|
2021
|
2020
|
|
|
$
|
$
|
%
|
$
|
$
|
%
|
Net earnings
(loss)
|
9,008
|
(5,075)
|
|
895
|
(31,531)
|
|
Income tax expense
(recovery)
|
1,303
|
2,554
|
|
908
|
(3,773)
|
|
EBT
|
10,311
|
(2,521)
|
509.0
%
|
1,803
|
(35,304)
|
105.1
%
|
EBT
margin
|
2.6
%
|
(0.7)
%
|
|
0.1
%
|
(2.4)
%
|
|
Change in estimate
related to inventory obsolescence
|
1,019
|
—
|
|
21,619
|
—
|
|
Stock-based
compensation
|
5,177
|
1,525
|
|
11,380
|
3,980
|
|
Special
items
|
(75)
|
2,443
|
|
21,814
|
24,168
|
|
Amortization of
intangible assets related to the
|
|
|
|
|
|
|
acquisition of
GSF Car Parts
|
1,089
|
1,065
|
|
4,444
|
4,146
|
|
Write-off of deferred
financing costs
|
1,688
|
—
|
|
1,688
|
—
|
|
Adjusted
EBT
|
19,209
|
2,512
|
664.7
%
|
62,748
|
(3,010)
|
2,184.7
%
|
Adjusted EBT
margin
|
4.8
%
|
0.7
%
|
|
3.9
%
|
(0.2)
%
|
|
The following is a reconciliation of adjusted earnings
(loss).
|
Fourth
Quarters Ended
December 31,
|
|
Twelve-Month
Periods Ended Dec.
31,
|
|
|
2021
|
2020
|
|
2021
|
2020
|
|
|
$
|
$
|
%
|
$
|
$
|
%
|
Net earnings
(loss)
|
9,008
|
(5,075)
|
277.5
%
|
895
|
(31,531)
|
102.8
%
|
Change in estimate
related to inventory obsolescence, net of taxes
|
764
|
—
|
|
16,379
|
—
|
|
Stock-based
compensation, net of taxes
|
3,858
|
1,116
|
|
8,457
|
2,931
|
|
Special items, net of
taxes
|
(79)
|
2,976
|
|
16,285
|
19,546
|
|
Amortization of
intangible assets related to the acquisition of GSF Car Parts, net
of taxes
|
882
|
691
|
|
3,630
|
4,153
|
|
Write-off of deferred
financing costs, net of taxes
|
1,245
|
—
|
|
1,245
|
—
|
|
Net tax impact of
changes in rates and reversal of a contingency provision
|
—
|
—
|
|
1,994
|
—
|
|
Adjusted earnings
(loss)
|
15,678
|
(292)
|
5,469.2
%
|
48,885
|
(4,901)
|
1,097.4
%
|
Basic earnings
(loss) per share
|
0.21
|
(0.12)
|
271.8
%
|
0.02
|
(0.74)
|
102.8
%
|
Change in estimate
related to inventory obsolescence, net of taxes
|
0.02
|
—
|
|
0.38
|
—
|
|
Stock-based
compensation, net of taxes
|
0.09
|
0.03
|
|
0.20
|
0.07
|
|
Special items, net of
taxes
|
(0.01)
|
0.06
|
|
0.38
|
0.45
|
|
Amortization of
intangible assets related to the acquisition of GSF Car Parts, net
of taxes
|
0.02
|
0.02
|
|
0.08
|
0.10
|
|
Write-off of deferred
financing costs, net of taxes
|
0.03
|
—
|
|
0.03
|
—
|
|
Net tax impact of
changes in rates and reversal of a contingency provision
|
—
|
—
|
|
0.05
|
—
|
|
Basic adjusted
earnings (loss) per share
|
0.36
|
(0.01)
|
3,756.5
%
|
1.14
|
(0.12)
|
1,021.0
%
|
The following table presents a reconciliation of free cash
flows.
In June 2021, the Corporation
reviewed its definition of free cash flows to better reflect the
amount of funds available to manage growth, repay debt, reinvest in
the Corporation and capitalize on various market opportunities that
arise. Accordingly, the comparative figures presented below were
adjusted.
|
Fourth
Quarters Ended
December 31,
|
Twelve-Month
Periods Ended Dec.
31,
|
|
2021
|
2020
|
2021
|
2020
|
|
$
|
$
|
$
|
$
|
Cash flows from
operating activities
|
28,462
|
48,341
|
114,069
|
132,613
|
Advances to merchant
members and incentives granted to customers
|
(3,558)
|
(1,844)
|
(13,118)
|
(7,412)
|
Reimbursement of
advances to merchant members
|
520
|
953
|
4,897
|
3,485
|
Acquisitions of
property and equipment
|
(5,097)
|
(1,479)
|
(11,056)
|
(5,932)
|
Proceeds from disposal
of property and equipment
|
283
|
1,044
|
1,152
|
1,813
|
Acquisitions and
development of intangible assets
|
(986)
|
(954)
|
(4,492)
|
(2,291)
|
Free cash
flows
|
19,624
|
46,061
|
91,452
|
122,276
|
UNI-SELECT INC.
CONSOLIDATED STATEMENTS OF NET EARNINGS (LOSS)
(In thousands of US
dollars, except per share amounts)
|
Fourth
Quarters Ended
December 31,
|
Years
Ended December 31,
|
|
2021
|
2020
|
2021
|
2020
|
|
unaudited
|
unaudited
|
audited
|
audited
|
|
$
|
$
|
$
|
$
|
Sales
|
400,175
|
366,246
|
1,612,800
|
1,471,816
|
Purchases, net of
changes in inventories
|
271,319
|
255,859
|
1,119,303
|
1,037,741
|
Gross
margin
|
128,856
|
110,387
|
493,497
|
434,075
|
|
|
|
|
|
Salaries and employee
benefits
|
69,090
|
61,899
|
268,203
|
235,996
|
Other operating
expenses
|
28,529
|
24,588
|
111,598
|
109,268
|
Special
items
|
(75)
|
2,443
|
21,814
|
24,168
|
Earnings before net
financing costs, depreciation and amortization and income
taxes
|
31,312
|
21,457
|
91,882
|
64,643
|
|
|
|
|
|
Depreciation and
amortization
|
14,406
|
14,891
|
59,855
|
62,597
|
Net financing
costs
|
6,595
|
9,087
|
30,224
|
37,350
|
Earnings (loss)
before income taxes
|
10,311
|
(2,521)
|
1,803
|
(35,304)
|
Income tax expense
(recovery)
|
1,303
|
2,554
|
908
|
(3,773)
|
Net earnings
(loss)
|
9,008
|
(5,075)
|
895
|
(31,531)
|
|
|
|
|
|
Earnings (loss)
per share
|
|
|
|
|
Basic
|
0.21
|
(0.12)
|
0.02
|
(0.74)
|
Diluted
|
0.20
|
(0.12)
|
0.02
|
(0.74)
|
|
|
|
|
|
Weighted average
number of common shares outstanding
(in thousands)
|
|
|
|
|
Basic
|
43,781
|
42,387
|
42,904
|
42,387
|
Diluted
|
52,302
|
42,387
|
43,064
|
42,387
|
|
|
|
|
|
UNI-SELECT INC.
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)
|
|
|
(In thousands of US
dollars)
|
Fourth
Quarters Ended
December 31,
|
Years
Ended December 31,
|
|
2021
|
2020
|
2021
|
2020
|
|
unaudited
|
unaudited
|
audited
|
audited
|
|
$
|
$
|
$
|
$
|
|
|
|
|
|
Net earnings
(loss)
|
9,008
|
(5,075)
|
895
|
(31,531)
|
|
|
|
|
|
Other comprehensive
income (loss)
|
|
|
|
|
Items that will
subsequently be reclassified to net earnings (loss):
|
|
|
|
|
Effective portion of
changes in the fair value of cash flow hedges (net of income tax of
$45 and $48 respectively for the quarter and the year ($14 and $191
in 2020))
|
126
|
(38)
|
134
|
(530)
|
|
|
|
|
|
Net change in the fair
value of derivative financial instruments designated as cash flow
hedges transferred to net earnings (loss) (net of income tax of $11
and $129 respectively for the quarter and the year ($57 and $158 in
2020))
|
38
|
155
|
365
|
437
|
|
|
|
|
|
Unrealized exchange
gains (losses) on the translation of financial statements to the
presentation currency
|
574
|
7,903
|
(2,180)
|
4,104
|
|
|
|
|
|
Unrealized exchange
gains on the translation of debt designated as a hedge of net investments in foreign
operations
|
(752)
|
4,903
|
284
|
1,798
|
|
(140)
|
12,961
|
(1,397)
|
5,809
|
|
|
|
|
|
Items that will not
subsequently be reclassified to net earnings (loss):
|
|
|
|
|
Remeasurements of
long-term employee benefit obligations (net of income tax of $570
and $3,299 respectively for the quarter and the year ($212 and
$2,154 in 2020))
|
(1,581)
|
589
|
9,150
|
(5,974)
|
|
|
|
|
|
Total other
comprehensive income (loss)
|
(1,595)
|
13,512
|
7,753
|
(165)
|
Comprehensive
income (loss)
|
7,413
|
8,437
|
8,648
|
(31,696)
|
|
|
|
|
|
UNI-SELECT INC.
CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY
(In thousands of US
dollars, audited)
|
Common shares
|
Treasury
shares
|
Contributed
surplus
|
Equity component of
the convertible debentures
|
Retained
earnings
|
Accumulated other
comprehensive loss
|
Total
|
|
$
|
$
|
$
|
$
|
$
|
$
|
$
|
|
|
|
|
|
|
|
|
Balance as at
December 31, 2019
|
100,244
|
—
|
6,724
|
8,232
|
418,624
|
(26,830)
|
506,994
|
|
|
|
|
|
|
|
|
Net loss
|
—
|
—
|
—
|
—
|
(31,531)
|
—
|
(31,531)
|
Other comprehensive
income (loss)
|
—
|
—
|
—
|
—
|
(5,974)
|
5,809
|
(165)
|
Comprehensive income
(loss)
|
—
|
—
|
—
|
—
|
(37,505)
|
5,809
|
(31,696)
|
|
|
|
|
|
|
|
|
Contributions by and
distributions to shareholders:
|
|
|
|
|
|
|
|
Dividends
|
—
|
—
|
—
|
—
|
(2,923)
|
—
|
(2,923)
|
Stock-based
compensation
|
—
|
—
|
1,680
|
—
|
—
|
—
|
1,680
|
|
—
|
—
|
1,680
|
—
|
(2,923)
|
—
|
(1,243)
|
|
|
|
|
|
|
|
|
Balance as at
December 31, 2020
|
100,244
|
—
|
8,404
|
8,232
|
378,196
|
(21,021)
|
474,055
|
|
|
|
|
|
|
|
|
Net
earnings
|
—
|
—
|
—
|
—
|
895
|
—
|
895
|
Other comprehensive
income (loss)
|
—
|
—
|
—
|
—
|
9,150
|
(1,397)
|
7,753
|
Comprehensive income
(loss)
|
—
|
—
|
—
|
—
|
10,045
|
(1,397)
|
8,648
|
|
|
|
|
|
|
|
|
Contributions by and
distributions to shareholders:
|
|
|
|
|
|
|
|
Conversion of
convertible debentures into common shares
|
12,202
|
—
|
—
|
(988)
|
—
|
—
|
11,214
|
Acquisition of shares
by Share Trust
|
—
|
(4,169)
|
—
|
—
|
—
|
—
|
(4,169)
|
Issuance of common
shares
|
2,993
|
—
|
—
|
—
|
—
|
—
|
2,993
|
Transfer upon exercise
of stock options
|
612
|
—
|
(612)
|
—
|
—
|
—
|
—
|
Stock-based
compensation
|
—
|
—
|
3,224
|
—
|
—
|
—
|
3,224
|
|
15,807
|
(4,169)
|
2,612
|
(988)
|
—
|
—
|
13,262
|
|
|
|
|
|
|
|
|
Balance as at
December 31, 2021
|
116,051
|
(4,169)
|
11,016
|
7,244
|
388,241
|
(22,418)
|
495,965
|
|
|
|
|
|
|
|
|
UNI-SELECT INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands of US
dollars)
|
Fourth
Quarters Ended
December 31,
|
Years
Ended December 31,
|
|
2021
|
2020
|
2021
|
2020
|
|
unaudited
|
unaudited
|
audited
|
audited
|
|
$
|
$
|
$
|
$
|
OPERATING
ACTIVITIES
|
|
|
|
|
Net earnings
(loss)
|
9,008
|
(5,075)
|
895
|
(31,531)
|
Adjustment
for:
|
|
|
|
|
Special items and
others
|
944
|
2,443
|
43,433
|
24,168
|
Depreciation and
amortization
|
14,406
|
14,891
|
59,855
|
62,597
|
Net financing
costs
|
6,595
|
9,087
|
30,224
|
37,350
|
Income tax expense
(recovery)
|
1,303
|
2,554
|
908
|
(3,773)
|
Amortization and
reserves related to incentives granted to customers
|
3,021
|
4,021
|
15,516
|
18,182
|
Other items
|
4,662
|
1,142
|
1,703
|
3,216
|
Changes in working
capital items
|
(5,298)
|
31,093
|
(8,300)
|
54,268
|
Interest
paid
|
(5,555)
|
(12,128)
|
(26,765)
|
(30,837)
|
Income taxes
recovered (paid)
|
(624)
|
313
|
(3,400)
|
(1,027)
|
Cash flows from
operating activities
|
28,462
|
48,341
|
114,069
|
132,613
|
|
|
|
|
|
INVESTING
ACTIVITIES
|
|
|
|
|
Business
acquisitions
|
—
|
(2,987)
|
(1,501)
|
(7,662)
|
Business
disposal
|
—
|
—
|
—
|
258
|
Net balance of
purchase price
|
—
|
112
|
(613)
|
112
|
Cash held in
escrow
|
—
|
(1,448)
|
(214)
|
(701)
|
Proceeds from sale of
investment
|
—
|
—
|
396
|
—
|
Advances to merchant
members and incentives granted to customers
|
(3,558)
|
(1,844)
|
(13,118)
|
(7,412)
|
Reimbursement of
advances to merchant members
|
520
|
953
|
4,897
|
3,485
|
Acquisitions of
property and equipment
|
(5,097)
|
(1,479)
|
(11,056)
|
(5,932)
|
Proceeds from
disposal of property and equipment
|
283
|
1,044
|
1,152
|
1,813
|
Acquisitions and
development of intangible assets
|
(986)
|
(954)
|
(4,492)
|
(2,291)
|
Other provisions
paid
|
(375)
|
79
|
(957)
|
(252)
|
Cash flows used in
investing activities
|
(9,213)
|
(6,524)
|
(25,506)
|
(18,582)
|
|
|
|
|
|
FINANCING
ACTIVITIES
|
|
|
|
|
Increase in long-term
debt
|
12,448
|
11,558
|
89,916
|
554,680
|
Repayment of
long-term debt
|
(22,661)
|
(18,917)
|
(202,996)
|
(645,334)
|
Net increase
(decrease) in merchant members' deposits in the guarantee
fund
|
47
|
70
|
(515)
|
283
|
Issuance of common
shares
|
—
|
—
|
2,993
|
—
|
Acquisition of shares
by Share Trust
|
|
|
(4,169)
|
—
|
Dividends
paid
|
—
|
—
|
—
|
(5,803)
|
Cash flows used in
financing activities
|
(10,166)
|
(7,289)
|
(114,771)
|
(96,174)
|
Effects of
fluctuations in exchange rates on cash
|
20
|
1,249
|
(15)
|
814
|
Net increase
(decrease) in cash
|
9,103
|
35,777
|
(26,223)
|
18,671
|
Cash, beginning of
year
|
23,222
|
18,602
|
54,379
|
35,708
|
Cash, end of
year
|
32,325
|
54,379
|
28,156
|
54,379
|
|
|
|
|
|
UNI-SELECT INC.
CONSOLIDATED STATEMENTS OF FINANCIAL POSITION
(In thousands of US
dollars)
|
As
at December 31,
|
|
2021
|
2020
|
|
audited
|
audited
|
ASSETS
|
$
|
$
|
Current
assets:
|
|
|
Cash
|
28,156
|
54,379
|
Cash held in
escrow
|
503
|
1,475
|
Trade and other
receivables
|
195,490
|
188,808
|
Income taxes
receivable
|
4,502
|
2,025
|
Inventory
|
343,759
|
368,992
|
Prepaid
expenses
|
6,324
|
9,520
|
Derivative financial
instruments
|
75
|
—
|
Total current
assets
|
578,809
|
625,199
|
Investments, advances
to merchant members and other assets
|
23,565
|
27,106
|
Property and
equipment
|
147,654
|
155,071
|
Intangible
assets
|
171,814
|
186,863
|
Goodwill
|
339,910
|
340,328
|
Derivative financial
instruments
|
223
|
—
|
Deferred tax
assets
|
38,842
|
40,705
|
TOTAL
ASSETS
|
1,300,817
|
1,375,272
|
LIABILITIES
|
|
|
Current
liabilities:
|
|
|
Trade and other
payables
|
328,122
|
313,600
|
Balance of purchase
price, net
|
43
|
1,796
|
Provision for
restructuring charges
|
1,060
|
3,246
|
Income taxes
payable
|
6,872
|
8,359
|
Current portion of
long-term debt and merchant members' deposits in the guarantee
fund
|
27,108
|
28,406
|
Derivative financial
instruments
|
5
|
4,579
|
Total current
liabilities
|
363,210
|
359,986
|
Long-term employee
benefit obligations
|
20,360
|
28,337
|
Long-term
debt
|
310,371
|
396,289
|
Convertible
debentures
|
78,327
|
87,728
|
Merchant members'
deposits in the guarantee fund
|
5,492
|
6,041
|
Other
provisions
|
3,092
|
1,395
|
Deferred tax
liabilities
|
24,000
|
21,441
|
TOTAL
LIABILITIES
|
804,852
|
901,217
|
TOTAL
SHAREHOLDERS' EQUITY
|
495,965
|
474,055
|
TOTAL LIABILITIES
AND SHAREHOLDERS' EQUITY
|
1,300,817
|
1,375,272
|
|
|
|
SOURCE Uni-Select Inc.