QUARTERLY HIGHLIGHTS
(Compared to the First Quarter of 2021):
- Consolidated sales of $409.6 million, up $39.5 million or 10.7%, driven by organic
growth(1) of 11.6%, all three segments reporting
positive organic growth(1);
- EBITDA(1) increased 14.0% to $28.2 million or 6.9% of sales from
$24.8 million or 6.7% of sales,
as a result of sustained strong gross margins, and scaling of
payroll and operating expenses offsetting certain inflationary
costs and one-time change in estimate related to inventory
obsolescence of $10.9 million in the
Canadian Automotive Group; Adjusted EBITDA(1) increased
51.0% to $45.2 million or 11.0%
of sales, compared to $30.0 million
or 8.1% of sales;
- Net earnings of $7.7 million
or $0.17 per diluted common share, an
increase of $7.5 million or
$0.16 per diluted common share;
Adjusted net earnings(1) of $21.2 million or $0.43 per diluted common share, an increase of
$16.2 million or $0.31 per diluted common share;
and
- Total net debt reduction of $56.2
million; Total net debt to adjusted EBITDA(1)
ratio down to 2.02x driven by strong operating results.
BOUCHERVILLE, QC, May 5, 2022
/CNW Telbec/ - Uni-Select Inc. (TSX: UNS) ("Uni-Select" or
"Corporation") today reported its financial results for the
first quarter ended March 31, 2022.
"We had a very strong start to the year with sales up 10.7% to
$409.6 million, adjusted EBITDA up
over 50% to $45.2 million and net
earnings up to $7.7 million. These
results reflect improvements in underlying demand, price increases,
additional vendor rebates, the benefits generated from operational
improvements implemented last year and significant savings on
borrowing costs," stated Brian
McManus, Executive Chair and Chief Executive Officer of
Uni-Select.
"During the quarter, we used our liquidity to support the
seasonal increase in working capital requirements and make
strategic investments to grow the business. While total net debt
edged up, we ended the period in a solid financial position with a
leverage ratio of 2.02x, slightly lower than that of the previous
quarter.
We still expect sales and profitability to improve in 2022,
compared to 2021. However, the magnitude of improvement will likely
be greater in the first half of the year due to the timing of
certain rebates and as we begin to lap certain operational
improvements implemented in the back half of 2021 while continuing
to navigate ongoing supply chain and labor issues. Our
priorities for 2022 will be to continue to focus on organic growth
and drive operational improvements across each business unit.
Making use of our improved balance sheet, we intend to reinvest in
the business through increased capex and customer investments and
begin to consider strategic acquisition opportunities to further
expand and consolidate our market position. We are well-positioned
to drive the business to the next level given the global market
recovery, our healthy balance sheet and the dedication of our
team," concluded Mr. McManus.
____________________________
|
(1) This is a non-GAAP financial measure. Refer to
the "Non-GAAP Financial Measures" section for further
details.
|
CONSOLIDATED FINANCIAL
RESULTS
The following table presents selected consolidated
information:
|
First Quarters
Ended March 31,
|
(in thousands of US
dollars, except per share amounts,
percentages and otherwise specified)
|
2022
|
2021
|
|
$
|
$
|
%
|
OPERATING RESULTS
|
|
|
|
|
Sales
|
409,602
|
370,119
|
10.7
|
|
EBITDA(1)
|
28,227
|
24,756
|
14.0
|
|
EBITDA margin(1)
|
6.9%
|
6.7%
|
|
|
Adjusted EBITDA(1)
|
45,239
|
29,965
|
51.0
|
|
Adjusted EBITDA margin(1)
|
11.0%
|
8.1%
|
|
|
EBT(1)
|
9,777
|
507
|
1,828.4
|
|
EBT margin(1)
|
2.4%
|
0.1%
|
|
|
Adjusted EBT(1)
|
27,873
|
6,829
|
308.2
|
|
Adjusted EBT margin (1)
|
6.8%
|
1.8%
|
|
|
Change in estimate
related to inventory obsolescence
|
10,927
|
—
|
|
|
Stock-based
compensation
|
4,919
|
1,783
|
|
|
Special
items
|
1,166
|
3,426
|
|
|
Net earnings
|
7,739
|
213
|
3,533.3
|
|
Adjusted net
earnings
|
21,247
|
5,048
|
320.9
|
|
Free cash
flow(1)
|
1,915
|
(6,159)
|
131.1
|
COMMON SHARE DATA
|
|
|
|
|
Basic net earnings per
common share
|
0.18
|
0.01
|
1,700.0
|
|
Diluted net earnings
per common share
|
0.17
|
0.01
|
1,600.0
|
|
Basic adjusted net
earnings per common share(1)
|
0.49
|
0.12
|
308.3
|
|
Diluted adjusted net
earnings per common share(1)
|
0.43
|
0.12
|
258.3
|
|
Number of common shares
outstanding (in thousands)(2)
|
43,512
|
42,387
|
|
|
Weighted average number
of outstanding common shares
|
|
|
|
|
|
Basic (in thousands)
|
43,446
|
42,387
|
|
|
|
Diluted (in thousands)
|
51,990
|
42,387
|
|
|
As at
March 31,
|
As at
December 31,
|
|
2022
|
2021
|
|
$
|
$
|
FINANCIAL POSITION
|
|
|
|
Total net
debt(1)
|
327,216
|
309,230
|
|
Credit facilities
(including revolving and term loans)
|
252,766
|
235,384
|
|
Convertible
debentures
|
80,389
|
78,327
|
(1)
|
This is a non-GAAP
financial measure. Refer to the "Non-GAAP Financial Measures"
section for further details.
|
(2)
|
The outstanding number
of shares corresponds to the issued common shares less the treasury
shares in the Share Trust.
|
FIRST QUARTER
RESULTS
Compared to the First Quarter of
2021:
Consolidated sales of $409.6 million for the quarter increased by
10.7%, driven by organic growth of 11.6%, with all three segments
reporting positive organic growth, ranging between 9.2% and 14.8%
for the quarter. This was driven primarily by increased demand and
the impact of price increases. Organic growth was partially offset
by unfavourable currency conversion effects. Consolidated organic
growth continues to improve, reflecting the global market recovery
from the COVID-19 pandemic.
The Corporation generated EBITDA of $28.2 million for the quarter, which was
mainly impacted by the one-time change in estimate charge of
$10.9 million related to inventory
obsolescence in the Canadian Automotive Group, higher stock-based
compensation expense related to an increase in the price of our
common shares, and partially offset by lower special item expenses.
Once these elements are excluded, adjusted EBITDA and adjusted
EBITDA margin increased by $15.2 million and 2.9% respectively to
$45.2 million and 11.0% of
sales, from $30.0 million and
8.1% of sales in 2021. The increase is the result of sustained
strong gross margins, which includes rebates from all three
business segments, improved operational performance, scaling of
payroll and operating expenses, offset by inflationary pressures on
fuel and energy, as well as the timing of certain expenses incurred
with respect to new store openings in the U.K. and a small
acquisition in Canada.
Net earnings for the quarter increased by $7.5 million to $7.7 million and were impacted by a one-time
change in estimate charge net of tax of $8.0
million related to inventory obsolescence in the Canadian
Automotive Group, higher stock-based compensation expense related
to an increase in the price of our common shares, and partially
offset by lower special item expenses. Once these elements are
excluded, adjusted net earnings increased by $16.2 million to $21.2 million from $5.0 million in 2021. This performance is
primarily attributable to higher sales and rebates as well as
improved overall operational performance, including reduced net
financing costs, net of income tax expense. The first quarter of
2021 benefited from temporary furloughs, bad debt reversal and
governmental subsidies for its occupancy costs.
Segmented First Quarter
Results
The FinishMaster U.S. segment reported sales of $172.8 million, with organic growth of 9.2%,
driven by a general market recovery and price increases. EBITDA was
$18.6 million for the quarter,
compared to $9.7 million in 2021
impacted by higher stock-based compensation expense primarily
related to an increase in the price of our common shares, and
partially offset by lower special item expenses. Once these
elements are excluded, adjusted EBITDA and adjusted EBITDA margin
improved by $9.5 million and
4.9% respectively to $19.6 million and 11.3% of sales, from
$10.1 million and 6.4% of sales
in 2021. This performance was driven by higher sales and rebates
from higher purchases as well as improved fixed cost absorption
which offset higher delivery cost and bad debt expenses.
The Canadian Automotive Group segment reported sales of
$129.8 million, an increase of
12.7% largely driven by organic growth of 12.2% and, to a lesser
extent, acquisitions over the last twelve months. The increase in
organic sales was mainly driven by higher demand and price
increases that began during the third quarter of 2021 and continued
into the first quarter of 2022. This segment reported EBITDA and
EBITDA margin of $5.5 million
and 4.2% respectively for the quarter, a decrease of $6.2 million or 6.0%, compared to $11.7 million and 10.2% in 2021. The
variance is mainly attributable to a one-time change in estimate
charge of $10.9 million to
inventory and higher stock-based compensation expense primarily
related to an increase in the price of our common shares, and
partially offset by lower special items expenses. Once these
elements are excluded, adjusted EBITDA and adjusted EBITDA margin
increased by $5.2 million and
2.7% respectively to $17.2 million or 13.2% of sales, from
$12.0 million or 10.5% of sales
in 2021. The variance is mainly attributable to additional vendor
rebates, as well as higher sales, driving scaling benefits.
The GSF Car Parts U.K. segment reported sales of $107.1 million, an increase of 10.7%, mainly
driven by organic growth of 14.8%, offsetting an unfavourable
fluctuation of the British pound against the US dollar during the
first quarter of 2022. Organic growth continued to improve in the
quarter from higher demand and price increases. This segment
reported EBITDA and EBITDA margin of $9.6 million and 9.0% respectively for the
quarter, a decrease of $0.3 million
or 1.2% compared to $9.9 million
and 10.2% in 2021 impacted by higher stock-based compensation
expense primarily related to an increase in the price of our common
shares and higher special items expenses in relation to the
rebranding. Once these elements are excluded, adjusted EBITDA
increased by $0.9 million and
adjusted EBITDA margin decreased by 0.1%, respectively, to
$10.9 million and 10.2% of
sales, from $10.0 million and
10.3% of sales in 2021. The first quarter of 2021 benefited from
governmental occupancy subsidies of $0.4
million or 0.4% of sales. This was offset by higher sales
and rebates in the first quarter of 2022, driving scaling
benefits.
CONFERENCE CALL
Uni-Select will host a conference call to discuss its results
for the first quarter of 2022 on May 5, 2022, at 8:00 AM
Eastern Time. 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 Time on May 5, 2022, until 11:59 PM
Eastern Time on June 5, 2022. To access the replay, dial
1 888 390-0541 followed by 569924#.
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 5,000 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 80
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 Uni-Select's
MD&A for the year ended December 31, 2021 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 information, 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 net earnings (loss), basic
adjusted net earnings (loss) per common share and diluted adjusted
net earnings (loss) per common share – Management uses
adjusted net earnings before taxes "EBT", adjusted net earnings
(loss), basic adjusted net earnings (loss) per common share and
diluted adjusted net earnings (loss) per common share to assess
earnings before taxes, net earnings (loss) and net earnings (loss)
per common share from core operating activities, containing certain
adjustments, net of income taxes for adjusted net earnings (loss)
and adjusted net earnings (loss) per common 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). For diluted adjusted net earnings, adjusted net earnings
are further adjusted for the after-tax interest on the convertible
debentures. 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 flow – 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 flow 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 flow 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.
|
First
Quarters
Ended March
31,
|
|
2022
|
2021
|
|
$
|
$
|
FinishMaster
U.S.
|
172,756
|
158,203
|
Canadian Automotive
Group
|
129,764
|
115,162
|
GSF Car Parts
U.K.
|
107,082
|
96,754
|
Sales
|
409,602
|
370,119
|
|
|
%
|
Sales
variance
|
39,483
|
10.7
|
Translation effect of the Canadian dollar and the British
pound
|
3,169
|
0.9
|
Impact of
number of billing days
|
479
|
0.1
|
Loss of
sales from the consolidation of company-operated stores
|
485
|
0.1
|
Acquisitions
|
(675)
|
(0.2)
|
Consolidated organic
growth
|
42,941
|
11.6
|
The following is a reconciliation of EBITDA and adjusted
EBITDA.
|
First
Quarters
Ended March
31,
|
|
|
2022
|
2021
|
|
|
$
|
$
|
%
|
Net
earnings
|
7,739
|
213
|
|
Income
tax expense
|
2,038
|
294
|
|
Net
financing costs
|
4,540
|
8,878
|
|
Depreciation and amortization
|
13,910
|
15,371
|
|
EBITDA
|
28,227
|
24,756
|
14.0
|
EBITDA
margin
|
6.9%
|
6.7%
|
|
Change in
estimate related to inventory obsolescence
|
10,927
|
—
|
|
Stock-based compensation
|
4,919
|
1,783
|
|
Special
items
|
1,166
|
3,426
|
|
Adjusted
EBITDA
|
45,239
|
29,965
|
51.0
|
Adjusted EBITDA
margin
|
11.0%
|
8.1%
|
|
The following is a reconciliation of EBT and adjusted EBT.
|
First
Quarters
Ended March
31,
|
|
|
2022
|
2021
|
|
|
$
|
$
|
%
|
Net
earnings
|
7,739
|
213
|
|
Income
tax expense
|
2,038
|
294
|
|
EBT
|
9,777
|
507
|
1,828.4
|
EBT
margin
|
2.4%
|
0.1%
|
|
Change in
estimate related to inventory obsolescence
|
10,927
|
—
|
|
Stock-based compensation
|
4,919
|
1,783
|
|
Special
items
|
1,166
|
3,426
|
|
Amortization of intangible assets related to the acquisition of GSF
Car Parts
|
1,084
|
1,113
|
|
Adjusted
EBT
|
27,873
|
6,829
|
308.2
|
Adjusted EBT
margin
|
6.8%
|
1.8%
|
|
The following is a reconciliation of net earnings, adjusted net
earnings and net earnings considered for diluted adjusted net
earnings per common share:
|
First
Quarters
Ended March
31,
|
|
|
2022
|
2021
|
|
|
$
|
$
|
%
|
Net
earnings
|
7,739
|
213
|
3,533.3
|
Change in
estimate related to inventory obsolescence, net of taxes
|
8,031
|
—
|
|
Stock-based compensation, net of
taxes
|
3,658
|
1,317
|
|
Special
items, net of taxes
|
941
|
2,616
|
|
Amortization of intangible assets related to the acquisition of GSF
Car Parts, net of taxes
|
878
|
902
|
|
Adjusted net
earnings
|
21,247
|
5,048
|
320.9
|
Conversion impact of convertible debentures, net of taxes
(1)
|
1,197
|
—
|
|
Net earnings
considered for diluted adjusted net earnings per common
share
|
22,444
|
5,048
|
344.6
|
Basic net earnings
per common share
|
0.18
|
0.01
|
1,700.0
|
Change in
estimate related to inventory obsolescence, net of taxes
|
0.19
|
—
|
|
Stock-based compensation, net of
taxes
|
0.08
|
0.03
|
|
Special
items, net of taxes
|
0.02
|
0.06
|
|
Amortization of intangible assets related to the acquisition of GSF
Car Parts, net of taxes
|
0.02
|
0.02
|
|
Basic adjusted net
earnings per common share
|
0.49
|
0.12
|
308.3
|
Conversion impact of convertible debentures, net of taxes
(1)
|
(0.06)
|
—
|
|
Diluted adjusted net
earnings per common share
|
0.43
|
0.12
|
258.3
|
The following table presents a reconciliation of the weighted
average number of common shares outstanding (in thousands) for
diluted adjusted net earnings per common share:
|
First
Quarters
Ended March
31,
|
|
2022
|
2021
|
Weighted average
number of common shares outstanding for basic net earnings per
common share
|
43,446
|
42,387
|
Conversion impact of convertible debentures
(1)
|
8,106
|
—
|
Impact of
stock options (2)
|
438
|
—
|
Weighted average
number of common shares outstanding for diluted adjusted net
earnings per common share
|
51,990
|
42,387
|
(1)
|
For the quarter ended
March 31, 2021, the conversion impact of convertible
debentures was excluded from the calculation of diluted net
earnings per common share as the conversion impact was
anti-dilutive. For the purpose of calculating diluted net earnings
per common shares, the after-tax effect of interest on convertible
debentures recognized in the quarter was excluded.
|
(2)
|
For the quarter ended
March 31, 2022, options to
acquire 60,322 common shares (1,244,163 in
2021) were excluded from the calculation of diluted net earnings
per common share as the strike price of the options was higher than
the average market price of the shares.
|
The following table presents a reconciliation of free cash
flow.
|
First
Quarters
Ended March
31,
|
|
2022
|
2021
|
|
$
|
$
|
Cash flows from
(used in) operating activities
|
7,803
|
(540)
|
Advances
to merchant members and incentives granted to customers
|
(2,564)
|
(4,687)
|
Reimbursement of advances to merchant members and liquidation
proceeds of incentives granted to customers returned
|
1,208
|
716
|
Acquisitions of property and equipment
|
(3,672)
|
(1,220)
|
Proceeds
from disposal of property and equipment
|
430
|
246
|
Acquisitions and development of intangible assets
|
(1,290)
|
(674)
|
Free cash
flow
|
1,915
|
(6,159)
|
INTERIM CONSOLIDATED STATEMENTS OF
NET EARNINGS
(In thousands of US
dollars, except per share amounts, unaudited)
|
First Quarters
Ended
March
31,
|
|
2022
|
2021
|
|
$
|
$
|
Sales
|
409,602
|
370,119
|
Purchases, net of
changes in inventories
|
281,826
|
253,486
|
Gross margin
|
127,776
|
116,633
|
|
|
|
Salaries and employee
benefits
|
68,902
|
62,475
|
Other operating
expenses
|
29,481
|
25,976
|
Special
items
|
1,166
|
3,426
|
Earnings before net
financing costs, depreciation and amortization and income
taxes
|
28,227
|
24,756
|
|
|
|
Depreciation and
amortization
|
13,910
|
15,371
|
Net financing
costs
|
4,540
|
8,878
|
Earnings before income
taxes
|
9,777
|
507
|
Income tax
expense
|
2,038
|
294
|
Net
earnings
|
7,739
|
213
|
|
|
|
Net earnings per
common share
|
|
|
Basic
|
0.18
|
0.01
|
Diluted
|
0.17
|
0.01
|
|
|
|
Weighted average
number of common shares outstanding
(in thousands)
|
|
|
Basic
|
43,446
|
42,387
|
Diluted
|
51,990
|
42,387
|
|
|
|
|
|
|
INTERIM CONSOLIDATED STATEMENTS OF
COMPREHENSIVE INCOME
(In thousands of US
dollars, unaudited)
|
First Quarters
Ended
March
31,
|
|
2022
|
2021
|
|
$
|
$
|
|
|
|
Net
earnings
|
7,739
|
213
|
|
|
|
Other comprehensive
income
|
|
|
Items that will
subsequently be reclassified to net earnings:
|
|
|
Effective
portion of changes in the fair value of cash flow hedges (net of
income tax of $1,276 ($4 in 2021))
|
3,576
|
11
|
|
|
|
Net
change in the fair value of derivative financial instruments
designated as cash flow hedges transferred to net earnings (net of
income tax of $64 ($60 in 2021))
|
176
|
162
|
|
|
|
Unrealized exchange gains (losses) on the translation of financial
statements to the presentation currency
|
(7,095)
|
1,058
|
|
|
|
Unrealized exchange gains on the translation of debt designated as
a hedge of net investments in foreign operations
|
4,868
|
1,425
|
|
1,525
|
2,656
|
|
|
|
Items that will not
subsequently be reclassified to net earnings:
|
|
|
Remeasurements of long-term employee benefit obligations (net of
income tax of $2,353 ($2,924 in 2021))
|
6,527
|
8,109
|
|
|
|
Total other
comprehensive income
|
8,052
|
10,765
|
Comprehensive
income
|
15,791
|
10,978
|
|
|
|
|
|
|
INTERIM CONSOLIDATED STATEMENTS OF
CHANGES IN SHAREHOLDERS' EQUITY
(In thousands of US
dollars, unaudited)
|
Common
shares
|
Treasury
shares
|
Contributed
surplus
|
Equity
component of
the convertible
debentures
|
Retained
earnings
|
Accumulated
other
comprehensive
loss
|
Total
|
|
$
|
$
|
$
|
$
|
$
|
$
|
$
|
|
|
|
|
|
|
|
|
Balance as at
December 31, 2020
|
100,244
|
—
|
8,404
|
8,232
|
378,196
|
(21,021)
|
474,055
|
|
|
|
|
|
|
|
|
Net earnings
|
—
|
—
|
—
|
—
|
213
|
—
|
213
|
Other comprehensive
income
|
—
|
—
|
—
|
—
|
8,109
|
2,656
|
10,765
|
Comprehensive
income
|
—
|
—
|
—
|
—
|
8,322
|
2,656
|
10,978
|
|
|
|
|
|
|
|
|
Contributions by and
distributions to shareholders:
|
|
|
|
|
|
|
|
Stock-based compensation
|
—
|
—
|
188
|
—
|
—
|
—
|
188
|
|
|
|
|
|
|
|
|
Balance as at March
31, 2021
|
100,244
|
—
|
8,592
|
8,232
|
386,518
|
(18,365)
|
485,221
|
|
|
|
|
|
|
|
|
Balance as at
December 31, 2021
|
116,051
|
(4,169)
|
11,016
|
7,244
|
388,241
|
(22,418)
|
495,965
|
|
|
|
|
|
|
|
|
Net earnings
|
—
|
—
|
—
|
—
|
7,739
|
—
|
7,739
|
Other comprehensive
income
|
—
|
—
|
—
|
—
|
6,527
|
1,525
|
8,052
|
Comprehensive
income
|
—
|
—
|
—
|
—
|
14,266
|
1,525
|
15,791
|
|
|
|
|
|
|
|
|
Contributions by and
distributions to shareholders:
|
|
|
|
|
|
|
|
Acquisition of treasury shares by Share Trust
|
—
|
(4,091)
|
—
|
—
|
—
|
—
|
(4,091)
|
Transfer
upon exercise of stock options
|
3,101
|
—
|
(4,227)
|
—
|
—
|
—
|
(1,126)
|
Stock-based compensation
|
—
|
—
|
914
|
—
|
—
|
—
|
914
|
|
3,101
|
(4,091)
|
(3,313)
|
—
|
—
|
—
|
(4,303)
|
|
|
|
|
|
|
|
|
Balance as at March
31, 2022
|
119,152
|
(8,260)
|
7,703
|
7,244
|
402,507
|
(20,893)
|
507,453
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
INTERIM CONSOLIDATED STATEMENTS OF
CASH FLOWS
(In thousands of US
dollars, unaudited)
|
First Quarters
Ended
March
31,
|
|
2022
|
2021
|
|
$
|
$
|
OPERATING
ACTIVITIES
|
|
|
Net earnings
|
7,739
|
213
|
Adjustment
for:
|
|
|
Special
items and others
|
12,093
|
3,426
|
Depreciation and amortization
|
13,910
|
15,371
|
Net
financing costs
|
4,540
|
8,878
|
Income
tax expense
|
2,038
|
294
|
Amortization and reserves related to incentives granted to
customers
|
3,565
|
4,680
|
Stock-based compensation
|
4,919
|
1,783
|
Other
items
|
775
|
(962)
|
Changes in working
capital items
|
(36,978)
|
(26,901)
|
Stock-based
compensation paid
|
(2,689)
|
—
|
Interest
paid
|
(2,820)
|
(6,906)
|
Income tax recovered
(paid)
|
711
|
(416)
|
Cash flows from (used
in) operating activities
|
7,803
|
(540)
|
|
|
|
INVESTING
ACTIVITIES
|
|
|
Business
acquisition
|
(4,412)
|
—
|
Net balance of purchase
price
|
—
|
(58)
|
Cash held in
escrow
|
294
|
—
|
Advances to merchant
members and incentives granted to customers
|
(2,564)
|
(4,687)
|
Reimbursement of
advances to merchant members and liquidation proceeds of incentives
granted to customers returned
|
1,208
|
716
|
Acquisitions of
property and equipment
|
(3,672)
|
(1,220)
|
Proceeds from disposal
of property and equipment
|
430
|
246
|
Acquisitions and
development of intangible assets
|
(1,290)
|
(674)
|
Other provisions
paid
|
—
|
(216)
|
Cash flows used in
investing activities
|
(10,006)
|
(5,893)
|
|
|
|
FINANCING
ACTIVITIES
|
|
|
Increase in long-term
debt
|
127,238
|
2,793
|
Repayment of long-term
debt
|
(116,018)
|
(15,122)
|
Net increase (decrease)
in merchant members' deposits in the guarantee fund
|
186
|
(438)
|
Acquisition of treasury
shares by Share Trust
|
(4,091)
|
—
|
Cash flows from (used
in) financing activities
|
7,315
|
(12,767)
|
Effects of fluctuations
in exchange rates on cash
|
(560)
|
293
|
Net increase (decrease)
in cash
|
4,552
|
(18,907)
|
Cash, beginning of
period
|
28,156
|
54,379
|
Cash, end of
period
|
32,708
|
35,472
|
|
|
|
|
|
|
INTERIM CONSOLIDATED STATEMENTS OF
FINANCIAL POSITION
(In thousands of US
dollars, unaudited)
|
As at
March
31,
|
As at
December 31,
|
|
2022
|
2021
|
ASSETS
|
$
|
$
|
Current
assets:
|
|
|
Cash
|
32,708
|
28,156
|
Cash held
in escrow
|
214
|
503
|
Trade and
other receivables
|
200,333
|
195,490
|
Income
taxes receivable
|
2,834
|
4,502
|
Inventory
|
361,095
|
343,759
|
Prepaid
expenses
|
9,601
|
6,324
|
Derivative financial instruments
|
218
|
75
|
Total
current assets
|
607,003
|
578,809
|
Investments, advances
to merchant members and other assets
|
22,072
|
23,565
|
Property and
equipment
|
154,536
|
147,654
|
Intangible
assets
|
169,000
|
171,814
|
Goodwill
|
342,816
|
339,910
|
Derivative financial
instruments
|
5,279
|
223
|
Deferred tax
assets
|
37,015
|
38,842
|
TOTAL
ASSETS
|
1,337,721
|
1,300,817
|
LIABILITIES
|
|
|
Current
liabilities:
|
|
|
Trade and
other payables
|
326,736
|
328,122
|
Balance
of purchase price, net
|
2,666
|
43
|
Provision
for restructuring charges
|
363
|
1,060
|
Income
taxes payable
|
10,133
|
6,872
|
Current
portion of long-term debt and merchant members' deposits in the
guarantee fund
|
27,494
|
27,108
|
Derivative financial instruments
|
1,195
|
5
|
Total
current liabilities
|
368,587
|
363,210
|
Long-term employee
benefit obligations
|
15,819
|
20,360
|
Long-term
debt
|
332,545
|
310,371
|
Convertible
debentures
|
80,389
|
78,327
|
Merchant members'
deposits in the guarantee fund
|
5,781
|
5,492
|
Balance of purchase
price
|
400
|
—
|
Other
provisions
|
3,258
|
3,092
|
Deferred tax
liabilities
|
23,489
|
24,000
|
TOTAL
LIABILITIES
|
830,268
|
804,852
|
TOTAL SHAREHOLDERS'
EQUITY
|
507,453
|
495,965
|
TOTAL LIABILITIES
AND SHAREHOLDERS' EQUITY
|
1,337,721
|
1,300,817
|
|
|
|
SOURCE Uni-Select Inc.