FULL YEAR HIGHLIGHTS (Compared to 2021):
- Consolidated sales of $1,731.4
million, up $118.6 million or
7.4%; Sales increased by 11.7% excluding the impact of unfavorable
fluctuation of the British pound and the Canadian dollar against
the US dollar; Organic growth(1) of 10.7% with all three
segments reporting positive organic growth(1);
and
- Total net debt(1) reduction of $74.8 million; Total net debt to adjusted
EBITDA ratio(1) down to 1.27x driven by strong operating
results and sound working capital management, offsetting capital
deployed for acquisitions.
BOUCHERVILLE, QC, Feb. 17,
2023 /CNW/ - Uni-Select Inc. (TSX: UNS)
("Uni-Select" or "Corporation") today reported its
financial results for the fourth quarter ended December 31,
2022.
"Uni-Select generated solid operating results in 2022 driven
primarily by organic growth(1). Sales increased by 11.7%
in constant currency terms, Adjusted EBITDA(1) improved
by 26.1% to exceed $185.0 million and
all three business units achieved higher year-over-year adjusted
EBITDA margins(1). The year also marked an important
turning point, as we gradually transitioned to growth, completing
strategic acquisitions in Canada
and opening select greenfield stores in the U.K. Our ongoing focus
on operational excellence and working capital produced strong cash
flow, enabling us to significantly reduce debt and enter 2023 in a
position of strength to continue executing our strategy. Despite
persisting labor and inflation challenges, our teams continue to
deliver impactful operational improvements as they increasingly
embrace our core values to provide enhanced value to our customers
and members," said Brian McManus,
Executive Chair and Chief Executive Officer of
Uni-Select.
"Our key priorities for 2023 remain to improve profitability by
focusing on organic growth(1), continue operational
improvement and leverage synergies from recent acquisitions.
Although we expect to face headwinds from persisting currency
translation impacts, we continue to believe our positive momentum
will allow us to achieve higher adjusted EBITDA(1) and
adjusted EPS(1) compared to 2022. Finally, our solid
financial position allows us to actively seek acquisition
opportunities to further drive our growth," concluded Mr.
McManus.
FOURTH QUARTER HIGHLIGHTS (Compared to the Fourth
Quarter of 2021):
- Consolidated sales of $424.8
million, up $24.6 million or
6.2%; Sales increased by 12.7% excluding the impact of unfavorable
fluctuation of the British pound and the Canadian dollar against
the US dollar; Organic growth(1) of 10.6% with all three
segments reporting positive organic growth(1);
- EBITDA(1) increased to $35.2 million or 8.3% of sales from
$31.3 million or 7.8% of
sales; Adjusted EBITDA(1) was $39.3 million or 9.2% of sales, compared to
$37.4 million or 9.4% of sales;
and
- Net earnings of $12.1 million or
$0.25 per diluted common share, an
increase of $3.1 million or
$0.05 per diluted common share;
Adjusted net earnings(1) of $15.7 million or $0.32 per diluted common share, compared to
$15.7 million or $0.32 per diluted common share.
FULL YEAR HIGHLIGHTS (Compared to 2021):
- Consolidated sales of $1,731.4
million, up $118.6 million or
7.4%; Sales increased by 11.7% excluding the impact of unfavorable
fluctuation of the British pound and the Canadian dollar against
the US dollar; Organic growth(1) of 10.7% with all three
segments reporting positive organic growth(1);
- EBITDA(1) increased 73.7% to $159.6 million or 9.2% of sales from
$91.9 million or 5.7% of
sales; Adjusted EBITDA(1) increased 26.1% to
$185.0 million or 10.7% of
sales, compared to $146.7 million or 9.1% of sales;
- Net earnings of $65.0 million or
$1.32 per diluted common share, an
increase of $64.1 million or
$1.30 per diluted common share;
Adjusted net earnings(1) of $86.8 million or $1.74 per diluted common share, an increase of
$37.9 million or $0.70 per diluted common share; and
- Total net debt(1) reduction of $74.8 million; Total net debt to adjusted
EBITDA ratio(1) down to 1.27x driven by strong operating
results and sound working capital management, offsetting capital
deployed for acquisitions.
______________________________
|
(1)
|
This information
represents a non-GAAP or other financial measure. Non-GAAP and
other 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. Refer to "Non-GAAP
and other financial measures" section for reconciliation and
further details.
|
|
|
CONSOLIDATED FINANCIAL
RESULTS
The following table presents selected consolidated
information:
|
Fourth Quarters
Ended
December
31,
|
|
Years
Ended
December
31,
|
|
(in thousands of US
dollars, except per share amounts,
percentages and otherwise specified)
|
2022
|
2021
|
|
2022
|
2021
|
|
$
|
$
|
%
|
$
|
$
|
%
|
OPERATING
RESULTS
|
|
|
|
|
|
|
Sales
|
424,812
|
400,175
|
6.2
|
1,731,420
|
1,612,800
|
7.4
|
EBITDA(1)
|
35,169
|
31,312
|
12.3
|
159,601
|
91,882
|
73.7
|
EBITDA
margin(1)
|
8.3 %
|
7.8 %
|
|
9.2 %
|
5.7 %
|
|
Adjusted
EBITDA(1)
|
39,264
|
37,430
|
4.9
|
185,024
|
146,695
|
26.1
|
Adjusted EBITDA
margin(1)
|
9.2 %
|
9.4 %
|
|
10.7 %
|
9.1 %
|
|
EBT(1)
|
17,618
|
10,311
|
70.9
|
87,414
|
1,803
|
4,748.3
|
EBT
margin(1)
|
4.1 %
|
2.6 %
|
|
5.0 %
|
0.1 %
|
|
Adjusted
EBT(1)
|
22,356
|
19,206
|
16.4
|
116,329
|
62,748
|
85.4
|
Adjusted EBT margin
(1)
|
5.3 %
|
4.8 %
|
|
6.7 %
|
3.9 %
|
|
Change in estimate
related to inventory
obsolescence
|
—
|
1,019
|
|
10,927
|
21,619
|
|
Stock-based
compensation
|
4,095
|
5,174
|
|
13,269
|
11,380
|
|
Restructuring and
other charges
|
—
|
(75)
|
|
1,227
|
21,814
|
|
Net
earnings
|
12,066
|
9,008
|
33.9
|
65,005
|
895
|
7,163.1
|
Adjusted net
earnings(1)
|
15,654
|
15,675
|
(0.1)
|
86,778
|
48,885
|
77.5
|
Cash flows from
operating activities
|
44,885
|
28,462
|
57.7
|
178,068
|
114,069
|
56.1
|
Free cash
flow(1)
|
40,354
|
19,624
|
105.6
|
152,494
|
91,452
|
66.7
|
COMMON SHARE
DATA
|
|
|
|
|
|
|
Basic net earnings per
common share
|
0.28
|
0.21
|
33.3
|
1.49
|
0.02
|
7,350.0
|
Diluted net earnings
per common share
|
0.25
|
0.20
|
25.0
|
1.32
|
0.02
|
6,500.0
|
Basic adjusted net
earnings per common share(1)
|
0.36
|
0.36
|
—
|
1.99
|
1.14
|
74.6
|
Diluted adjusted net
earnings per common share(1)
|
0.32
|
0.32
|
—
|
1.74
|
1.04
|
67.3
|
Number of common
shares outstanding(2)
|
43,865,983
|
43,582,380
|
|
43,865,983
|
43,582,380
|
|
Weighted average
number of outstanding common
shares
|
|
|
|
|
|
|
Basic
|
43,807,030
|
43,781,156
|
|
43,612,399
|
42,903,523
|
|
Diluted
|
52,718,668
|
52,301,924
|
|
52,616,267
|
43,064,341
|
|
Diluted
adjusted
|
52,718,668
|
52,301,924
|
|
52,616,267
|
51,863,970
|
|
|
|
|
|
|
|
|
|
|
As at
December 31,
|
|
2022
|
2021
|
|
$
|
$
|
FINANCIAL
POSITION
|
|
|
Long-term debt,
including the current portion
|
258,356
|
337,386
|
Total net
debt(1)
|
234,437
|
309,230
|
Credit
facilities
|
159,808
|
235,384
|
(1)
|
This information
represents a non-GAAP or other financial measure. Non-GAAP and
other 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. Refer to "Non-GAAP
and other financial measures" section for reconciliation and
further details.
|
(2)
|
The outstanding number
of shares corresponds to the issued common shares less the treasury
shares in the Share Trust.
|
|
|
FOURTH QUARTER
RESULTS
Compared to the Fourth Quarter of 2021:
Consolidated sales increased by $24.6 million or 6.2% to $424.8 million. Excluding the impact of
unfavorable fluctuation of the British pound and the Canadian
dollar against the US dollar of $26.1 million or 6.5%, consolidated sales
increased by $50.7 million
or 12.7%, compared to the same quarter in 2021, driven by
organic growth, from all three segments, ranging between 5.0% and
20.6% for the quarter, as well as by acquisitions, offsetting an
unfavorable variance in the number of billing days. Consolidated
organic growth of 10.6% was driven primarily by price
increases.
The Corporation generated EBITDA of $35.2 million for the quarter. Excluding
impacts of change in estimate related to inventory obsolescence,
stock-based compensation and restructuring and other charges,
adjusted EBITDA and adjusted EBITDA margin were $39.3 million and 9.2% of sales,
compared to $37.4 million and
9.4% of sales in 2021. The adjusted EBITDA margin was impacted by
inflationary costs, including fuel and wages, and timing of
rebates, offset by price increases, product mix and scaling of
payroll and operating expenses.
Net earnings for the quarter increased by $3.1 million to $12.1 million. Excluding impacts of
change in estimate related to inventory obsolescence, stock-based
compensation, restructuring and other charges, amortization of
intangibles assets related to the acquisition of GSF Car Parts and
write-off of deferred financing costs, adjusted net earnings were
$15.7 million, same as 2021, due
to a higher tax rate offsetting operational and financing cost
gains.
Segmented Fourth Quarter Results
The FinishMaster U.S. segment reported sales of $173.4 million, an increase of 3.4%, mainly from
organic growth of 5.0%, offsetting an unfavorable variance in the
number of billing days. The increase in organic growth was mainly
driven by price increases. EBITDA was $12.9 million for the quarter compared to
$15.4 million in 2021. Excluding
impacts of stock-based compensation and restructuring and other
charges, adjusted EBITDA and adjusted EBITDA margin decreased by
$1.2 million and 1.0%
respectively to $14.4 million
and 8.3% of sales, from $15.6 million and 9.3% of sales in 2021.
This variance is attributable to higher fuel and energy costs, bad
debt expenses as opposed to recovery in 2021, as well as higher
performance bonuses and timing of rebates. These elements were
offset by price increases and higher sales, driving scaling
benefits.
The Canadian Automotive Group segment reported sales of
$150.4 million. Excluding the
impact of unfavorable fluctuation of the Canadian dollar against
the US dollar of $10.7 million
or 7.9% during the fourth quarter of 2022, sales increased by
$25.1 million or 18.5%, compared
to the same quarter last year, driven by organic growth of 10.5%
and acquisitions over the last twelve months representing 9.1%,
offsetting an unfavorable variance in the number of billing days.
The increase in organic growth was mainly driven by price
increases. This segment reported EBITDA and EBITDA margin of
$17.2 million and 11.5%
respectively for the quarter compared to $14.7 million and 10.8% in 2021. Excluding
impacts of change in estimate related to inventory
obsolescence,
stock-based compensation and restructuring and other charges,
adjusted EBITDA and adjusted EBITDA margin were respectively
$18.1 million and 12.0% of
sales, compared to $16.8 million
and 12.4% of sales in 2021. Adjusted EBITDA margin decreased by
0.4% from foreign currency losses due to the depreciation of the
Canadian dollar, higher delivery and travel costs, as well as
higher performance bonuses. This was partially offset by price
increases, favorable product mix and higher sales, driving scaling
benefits.
The GSF Car Parts U.K. segment reported sales of $101.0 million. Excluding the impact of
unfavorable fluctuation of the British pound against the US dollar
of $15.4 million or 16.0% during
the fourth quarter of 2022, sales increased by $19.9 million or 20.7%, mainly driven by
organic growth of 20.6%. The increase in organic growth was mainly
driven by price increases, the contribution of recently opened
greenfield stores, as well as e-commerce sales. This segment
reported EBITDA and EBITDA margin of $9.8 million and 9.7% respectively for
the quarter compared to $6.5 million and 6.8% in 2021.
Excluding impacts of stock-based compensation and restructuring and
other charges, adjusted EBITDA and adjusted EBITDA margin improved
by $2.8 million and 2.5%
respectively to $10.2 million and 10.1% of sales, from
$7.4 million and 7.6% of
sales in 2021. This performance was mainly driven by higher sales
driving scaling benefits, timing of vendor rebates , offsetting
inflationary fuel and utility costs, higher repair costs due to
fleet replacement delays, as well as higher payroll costs.
YEAR RESULTS
Compared to the Year of 2021:
Consolidated sales of $1,731.4 million increased by $118.6 million or 7.4%. Excluding the impact
of unfavorable fluctuation of the British pound and the Canadian
dollar against the US dollar of $70.0 million or 4.3%, consolidated sales
increased by $188.6 million or
11.7%, driven by organic growth with all three segments reporting
positive organic growth, ranging between 7.8% and 15.1% for the
year. Consolidated organic growth of 10.7% was driven primarily by
price increases.
The Corporation generated EBITDA of $159.6 million for the year. Excluding
impacts of change in estimate related to inventory obsolescence,
stock-based compensation and restructuring and other charges,
adjusted EBITDA and adjusted EBITDA margin increased by
$38.3 million and 1.6%
respectively to $185.0 million and 10.7% of sales, from
$146.7 million and 9.1% of
sales in 2021. This increase is the result of price increases,
rebates, improved operational performance, scaling of payroll and
operating expenses, offset by certain inflationary costs, including
fuel and wages, as well as the timing of certain expenses incurred
with respect to new store openings in the U.K. and acquisitions in
Canada.
Net earnings for the year increased by $64.1 million to $65.0 million. Excluding impacts of change
in estimate related to inventory obsolescence, stock-based
compensation, restructuring and other charges, amortization of
intangibles assets related to the acquisition of GSF Car Parts,
write-off of deferred financing costs and net tax impact of change
in rates and reversal of a contingency provision, adjusted net
earnings for the current period increased by $37.9 million to $86.8 million from $48.9 million in 2021. This increase is
primarily attributable to price increases as well as improved
overall operational performance, including reduced depreciation,
amortization and net financing costs, net of income tax
expense.
Segmented Year Results
The FinishMaster U.S. segment reported sales of $721.7 million, an increase of 7.4%, mainly
from organic growth of 7.8%, or $52.3 million, offsetting an unfavorable
variance in the number of billing days. Organic growth was mainly
driven by price increases. EBITDA was $69.7 million for the period, compared
to $31.3 million in 2021.
Excluding impacts of a change in estimate related to inventory
obsolescence, stock-based compensation and restructuring and other
charges, adjusted EBITDA and adjusted EBITDA margin improved by
$18.5 million and 2.0%
respectively to $73.9 million and 10.2% of sales, from
$55.4 million and 8.2% of
sales in 2021. This performance was driven by additional rebates,
price increases and higher sales, scaling benefits, offsetting
higher fuel and energy costs, as well as higher performance
bonuses, while 2021 benefited from bad debt recovery.
The Canadian Automotive Group segment reported sales of
$601.4 million, an increase of
11.2%. Excluding the impact of unfavorable fluctuation of the
Canadian dollar against the US dollar of $22.8 million or 4.2% during the year of
2022, sales increased by $83.3 million or 15.4%, compared to the same
period last year, largely driven by organic growth of 11.0% and
acquisitions over the last twelve months representing 4.7%. The
increase in organic growth was mainly driven by price increases.
This segment reported EBITDA and EBITDA margin of $69.2 million and 11.5% respectively
for the period compared to $59.9 million and 11.1% in 2021.
Excluding impacts of change in estimate related to inventory
obsolescence, stock-based compensation and restructuring and other
charges, adjusted EBITDA and adjusted EBITDA margin improved by
$18.8 million and 2.0%
respectively to $82.3 million and 13.7% of sales, from
$63.5 million and 11.7% of
sales in 2021. This increase is mainly attributable to price
increases, favorable product mix, and higher sales, scaling
benefits, offset by foreign currency losses due to the depreciation
of the Canadian dollar during the period, higher delivery and
travel costs, as well as transaction costs related to recent
acquisitions.
The GSF Car Parts U.K. segment reported sales of $408.3 million, an increase of 2.1%.
Excluding the impact of the unfavorable fluctuation of the British
pound against the US dollar of $47.1 million or 11.8% during the year of
2022, sales increased by $55.7 million or 13.9%, mainly driven by
organic growth of 15.1%, offsetting an unfavorable variance in the
number of billing days. The increase in organic growth was mainly
driven by price increases, the contribution of recently opened
greenfield stores
and
e-commerce sales. This segment reported EBITDA and EBITDA margin of
$36.3 million and 8.9%
respectively for the period compared to $32.8 million and 8.2% in 2021.
Excluding impacts of stock-based compensation and restructuring and
other charges, adjusted EBITDA and adjusted EBITDA margin increased
by $1.9 million and 0.3%
respectively to $38.7 million and 9.5% of sales, from
$36.8 million and 9.2% of
sales in 2021. This performance was driven by higher sales, scaling
benefits and rebates, partially offset by inflationary fuel and
utility costs, higher repair costs due to fleet replacement delays,
as well as higher payroll costs. 2021 also benefited from
governmental occupancy subsidies of $0.8
million, which were not repeated in 2022.
CONFERENCE CALL
Uni-Select will host a conference call to discuss its results
for the fourth quarter of 2022 on February 17, 2023, 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 February 17, 2023, until
11:59 PM Eastern Time on March 17,
2023. To access the replay, dial 1 888 390-0541 followed by
678035#.
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 5,200 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 95 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 175 company-operated stores.
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, adjusted EPS or
other financial results for 2023 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 risks and uncertainties include, but are not restricted
to: risks associated with reduced demand for our products,
disruptions of our supplier relationships or of our suppliers'
operations or supplier consolidation, increases in shipping costs,
disruption of our customer relationships, competition in the
industries in which we do business, the COVID-19 pandemic or other
pandemics, reliance on information technology systems, 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 and
availability, union activities and labor and employment laws,
failure to realize benefits of acquisitions and other strategic
transactions, product liability claims, product recalls, credit
risk, termination or reduction of our vendor financing program,
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, foreign exchange,
inability to service our debt or fulfill financial covenants,
litigation, changes in 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, environmental,
social and governance activities and reputation and activist
investors as well as other risks identified or incorporated by
reference in our MD&A for the year ended December 31, 2022
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 of 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, 2022, 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, 2022, 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 AND OTHER FINANCIAL
MEASURES
The financial information included in the Corporation's
documents contains certain performance measures that are
inconsistent with GAAP ("non-GAAP and other financial measures").
Non-GAAP and other financial measures are mainly derived from the
consolidated financial statements, but do not have any
standardized meaning prescribed by GAAP. The Corporation considers
that users may analyze its results based on these measurements, but
they should not be used in isolation or as a substitute for
financial measures prepared under GAAP.
The Corporation's definitions of non-GAAP and other financial
measures are based on what management regards as reasonable and are
unlikely to be comparable to similar measures presented by other
entities.
NON-GAAP MEASURES
NON-GAAP FINANCIAL
MEASURES
|
NON-GAAP
RATIOS
|
EBITDA
|
EBITDA
margin
|
Adjusted
EBITDA
|
Adjusted EBITDA
margin
|
EBT
|
EBT margin
|
Adjusted EBT
|
Adjusted EBT
margin
|
Adjusted net
earnings
|
Adjusted net earnings
per common share - basic and diluted
|
Free cash
flow
|
Total net debt to
adjusted EBITDA ratio
|
Available
liquidity
|
|
|
|
|
|
OTHER FINANCIAL MEASURES
CAPITAL MANAGEMENT
MEASURES
|
SUPPLEMENTARY
FINANCIAL MEASURES
|
Total net
debt
|
Organic
growth
|
|
|
|
|
The section below presents definitions of non-GAAP and other
financial measures as required by National Instrument 52-112 and
their reconciliation to the most directly comparable GAAP
measures.
Organic growth
This measure consists of quantifying the increase in 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, 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.
The following tables reconcile sales to organic growth by
segment and on a consolidated basis:
|
|
|
|
Fourth Quarters
Ended
December
31,
|
|
FinishMaster
U.S.
|
Canadian
Automotive Group
|
GSF Car Parts
U.K.
|
Total
|
|
2022
|
2021
|
2022
|
2021
|
2022
|
2021
|
2022
|
2021
|
|
$
|
$
|
$
|
$
|
$
|
$
|
$
|
$
|
Sales
|
173,430
|
167,788
|
150,414
|
135,961
|
100,968
|
96,426
|
424,812
|
400,175
|
|
|
%
|
|
%
|
|
%
|
|
%
|
Sales
variance
|
5,642
|
3.4
|
14,453
|
10.6
|
4,542
|
4.7
|
24,637
|
6.2
|
Translation effect of
the Canadian dollar
and the British pound
|
—
|
—
|
10,688
|
7.9
|
15,398
|
16.0
|
26,086
|
6.5
|
Impact of number of
billing days
|
2,751
|
1.6
|
1,483
|
1.1
|
(492)
|
(0.5)
|
3,742
|
0.9
|
Loss of sales from the
consolidation of
company-operated stores
|
—
|
—
|
—
|
—
|
382
|
0.4
|
382
|
0.1
|
Net
acquisitions
|
—
|
—
|
(12,323)
|
(9.1)
|
—
|
—
|
(12,323)
|
(3.1)
|
Organic growth
|
8,393
|
5.0
|
14,301
|
10.5
|
19,830
|
20.6
|
42,524
|
10.6
|
|
|
|
|
|
|
|
|
|
NON-GAAP AND OTHER FINANCIAL MEASURES (CONTINUED)
|
|
|
|
Years
Ended
December
31,
|
|
FinishMaster
U.S.
|
Canadian
Automotive Group
|
GSF Car Parts
U.K.
|
Total
|
|
2022
|
2021
|
2022
|
2021
|
2022
|
2021
|
2022
|
2021
|
|
$
|
$
|
$
|
$
|
$
|
$
|
$
|
$
|
Sales
|
721,719
|
672,124
|
601,375
|
540,879
|
408,326
|
399,797
|
1,731,420
|
1,612,800
|
|
|
%
|
|
%
|
|
%
|
|
%
|
Sales
variance
|
49,595
|
7.4
|
60,496
|
11.2
|
8,529
|
2.1
|
118,620
|
7.4
|
Translation effect of
the Canadian dollar
and the British pound
|
—
|
—
|
22,828
|
4.2
|
47,123
|
11.8
|
69,951
|
4.3
|
Impact of number of
billing days
|
2,678
|
0.4
|
1,485
|
0.3
|
2,991
|
0.8
|
7,154
|
0.5
|
Loss of sales from the
consolidation of
company-operated stores
|
—
|
—
|
—
|
—
|
1,670
|
0.4
|
1,670
|
0.1
|
Net
acquisitions
|
—
|
—
|
(25,317)
|
(4.7)
|
—
|
—
|
(25,317)
|
(1.6)
|
Organic growth
|
52,273
|
7.8
|
59,492
|
11.0
|
60,313
|
15.1
|
172,078
|
10.7
|
|
|
|
|
|
|
|
|
|
EBITDA, EBITDA margin, adjusted EBITDA and adjusted EBITDA
margin
EBITDA represents Earnings before net financing costs,
depreciation and amortization and income taxes per the Consolidated
Financial Statements. EBITDA margin is a percentage corresponding
to the ratio of EBITDA to sales.
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.
Adjusted EBITDA margin is a percentage corresponding to the ratio
of adjusted EBITDA to sales.
The Corporation uses EBITDA and adjusted EBITDA as well as their
corresponding margins to assess its performance and that of its
business segments. Management believes these non-GAAP and other
financial measures, in addition to GAAP measures, provide users
with an enhanced understanding of its operating results and
increase the transparency of its core results as well as of its
segments. Management also believes these measures provide better
comparability of its results from one period to another.
The following tables reconcile the EBITDA to adjusted EBITDA by
segment and on a consolidated basis:
|
|
|
|
|
|
|
Fourth Quarters
Ended
December 31,
|
|
FinishMaster
U.S.
|
Canadian
Automotive Group
|
GSF Car Parts
U.K.
|
Corporate Office
and Others
|
Total
|
|
2022
|
2021
|
2022
|
2021
|
2022
|
2021
|
2022
|
2021
|
2022
|
2021
|
|
$
|
$
|
$
|
$
|
$
|
$
|
$
|
$
|
$
|
$
|
EBITDA
|
12,868
|
15,387
|
17,243
|
14,702
|
9,793
|
6,519
|
(4,735)
|
(5,296)
|
35,169
|
31,312
|
EBITDA
margin
|
7.4 %
|
9.2 %
|
11.5 %
|
10.8 %
|
9.7 %
|
6.8 %
|
— %
|
— %
|
8.3 %
|
7.8 %
|
Change in estimate
related to inventory
obsolescence
|
—
|
—
|
—
|
948
|
—
|
71
|
—
|
—
|
—
|
1,019
|
Stock-based
compensation
|
1,572
|
842
|
830
|
1,091
|
438
|
527
|
1,255
|
2,714
|
4,095
|
5,174
|
Restructuring and
other
charges
|
—
|
(635)
|
—
|
73
|
—
|
247
|
—
|
240
|
—
|
(75)
|
Adjusted
EBITDA
|
14,440
|
15,594
|
18,073
|
16,814
|
10,231
|
7,364
|
(3,480)
|
(2,342)
|
39,264
|
37,430
|
Adjusted EBITDA
margin
|
8.3 %
|
9.3 %
|
12.0 %
|
12.4 %
|
10.1 %
|
7.6 %
|
— %
|
— %
|
9.2 %
|
9.4 %
|
|
|
|
|
|
|
|
|
|
|
|
NON-GAAP AND OTHER FINANCIAL MEASURES (CONTINUED)
|
|
|
|
|
|
|
Years
Ended
December 31,
|
|
FinishMaster
U.S.
|
Canadian
Automotive Group
|
GSF Car Parts
U.K.
|
Corporate Office
and Others
|
Total
|
|
2022
|
2021
|
2022
|
2021
|
2022
|
2021
|
2022
|
2021
|
2022
|
2021
|
|
$
|
$
|
$
|
$
|
$
|
$
|
$
|
$
|
$
|
$
|
EBITDA
|
69,737
|
31,280
|
69,225
|
59,872
|
36,252
|
32,796
|
(15,613)
|
(32,066)
|
159,601
|
91,882
|
EBITDA
margin
|
9.7 %
|
4.7 %
|
11.5 %
|
11.1 %
|
8.9 %
|
8.2 %
|
— %
|
— %
|
9.2 %
|
5.7 %
|
Change in estimate
related to inventory
obsolescence
|
—
|
20,600
|
10,927
|
948
|
—
|
71
|
—
|
—
|
10,927
|
21,619
|
Stock-based
compensation
|
4,107
|
1,367
|
2,578
|
1,649
|
1,568
|
948
|
5,016
|
7,416
|
13,269
|
11,380
|
Restructuring and
other
charges
|
79
|
2,119
|
(439)
|
1,032
|
913
|
3,006
|
674
|
15,657
|
1,227
|
21,814
|
Adjusted
EBITDA
|
73,923
|
55,366
|
82,291
|
63,501
|
38,733
|
36,821
|
(9,923)
|
(8,993)
|
185,024
|
146,695
|
Adjusted EBITDA
margin
|
10.2 %
|
8.2 %
|
13.7 %
|
11.7 %
|
9.5 %
|
9.2 %
|
— %
|
— %
|
10.7 %
|
9.1 %
|
|
|
|
|
|
|
|
|
|
|
|
EBT, EBT margin, adjusted EBT and adjusted EBT margin
EBT represents Earnings before income taxes per Consolidated
statement of earnings and for segments EBT represents Segment
income (loss) reported per note 26 in the Consolidated Financial
Statements. EBT margin is a percentage corresponding to the ratio
of EBT to sales.
Adjusted EBT contains certain adjustments, which may affect the
comparability of the Corporation's financial results. These
adjustments include restructuring and other charges, stock-based
compensation expenses, change in estimate related to inventory
obsolescence, as well as amortization of intangible assets related
to The Parts Alliance acquisition (now known as GSF Car Parts).
Adjusted EBT margin is a percentage corresponding to the ratio of
adjusted EBT to sales.
The Corporation uses EBT and adjusted EBT as well as their
respective margins to assess its performance and that of its
business segments. Management believes these non-GAAP and other
financial measures, in addition to GAAP measures, provide users
with an enhanced understanding of its operating results and
increase the transparency of its core results as well as of its
segments. Management also believes these measures provide better
comparability of its results from one period to another.
The following tables reconcile the EBT to adjusted EBT by
segment and on a consolidated basis:
|
|
|
|
|
|
|
Fourth Quarters
Ended
December 31,
|
|
FinishMaster
U.S.
|
Canadian
Automotive Group
|
GSF Car Parts
U.K.
|
Corporate Office
and Others
|
Total
|
|
2022
|
2021
|
2022
|
2021
|
2022
|
2021
|
2022
|
2021
|
2022
|
2021
|
|
$
|
$
|
$
|
$
|
$
|
$
|
$
|
$
|
$
|
$
|
EBT
|
7,313
|
9,573
|
12,657
|
9,733
|
5,834
|
2,338
|
(8,186)
|
(11,333)
|
17,618
|
10,311
|
EBT
margin
|
4.2 %
|
5.7 %
|
8.4 %
|
7.2 %
|
5.8 %
|
2.4 %
|
— %
|
— %
|
4.1 %
|
2.6 %
|
Change in estimate
related to inventory
obsolescence
|
—
|
—
|
—
|
948
|
—
|
71
|
—
|
—
|
—
|
1,019
|
Stock-based
compensation
|
1,572
|
842
|
830
|
1,091
|
438
|
527
|
1,255
|
2,714
|
4,095
|
5,174
|
Restructuring and
other
charges
|
—
|
(635)
|
—
|
73
|
—
|
247
|
—
|
240
|
—
|
(75)
|
Amortization of
intangible assets
related to the
acquisition of GSF
Car Parts
|
—
|
—
|
—
|
—
|
—
|
—
|
643
|
1,089
|
643
|
1,089
|
Write-off of
deferred
financing costs
|
—
|
—
|
—
|
—
|
—
|
—
|
—
|
1,688
|
—
|
1,688
|
Adjusted
EBT
|
8,885
|
9,780
|
13,487
|
11,845
|
6,272
|
3,183
|
(6,288)
|
(5,602)
|
22,356
|
19,206
|
Adjusted EBT
margin
|
5.1 %
|
5.8 %
|
9.0 %
|
8.7 %
|
6.2 %
|
3.3 %
|
— %
|
— %
|
5.3 %
|
4.8 %
|
|
|
|
|
|
|
|
|
|
|
|
NON-GAAP AND OTHER FINANCIAL MEASURES (CONTINUED)
|
|
|
|
|
|
|
Years
Ended
December 31,
|
|
FinishMaster
U.S.
|
Canadian
Automotive Group
|
GSF Car Parts
U.K.
|
Corporate Office
and Others
|
Total
|
|
2022
|
2021
|
2022
|
2021
|
2022
|
2021
|
2022
|
2021
|
2022
|
2021
|
|
$
|
$
|
$
|
$
|
$
|
$
|
$
|
$
|
$
|
$
|
EBT
|
47,545
|
7,386
|
50,879
|
40,053
|
20,236
|
14,101
|
(31,246)
|
(59,737)
|
87,414
|
1,803
|
EBT
margin
|
6.6 %
|
1.1 %
|
8.5 %
|
7.4 %
|
5.0 %
|
3.5 %
|
— %
|
— %
|
5.0 %
|
0.1 %
|
Change in estimate
related to inventory
obsolescence
|
—
|
20,600
|
10,927
|
948
|
—
|
71
|
—
|
—
|
10,927
|
21,619
|
Stock-based
compensation
|
4,107
|
1,367
|
2,578
|
1,649
|
1,568
|
948
|
5,016
|
7,416
|
13,269
|
11,380
|
Restructuring and
other charges
|
79
|
2,119
|
(439)
|
1,032
|
913
|
3,006
|
674
|
15,657
|
1,227
|
21,814
|
Amortization of
intangible assets
related to the
acquisition of GSF
Car Parts
|
—
|
—
|
—
|
—
|
—
|
—
|
3,492
|
4,444
|
3,492
|
4,444
|
Write-off of
deferred
financing costs
|
—
|
—
|
—
|
—
|
—
|
—
|
—
|
1,688
|
—
|
1,688
|
Adjusted
EBT
|
51,731
|
31,472
|
63,945
|
43,682
|
22,717
|
18,126
|
(22,064)
|
(30,532)
|
116,329
|
62,748
|
Adjusted EBT
margin
|
7.2 %
|
4.7 %
|
10.6 %
|
8.1 %
|
5.6 %
|
4.5 %
|
— %
|
— %
|
6.7 %
|
3.9 %
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted net earnings and adjusted net earnings per common
share (basic and diluted)
Adjusted net earnings and adjusted net earnings per common share
(basic and diluted) contain certain adjustments, which may affect
the comparability of the Corporation's financial results. These
adjustments include, net of income taxes, restructuring and other
charges, stock-based compensation expenses, change in estimate
related to inventory obsolescence, 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.
The Corporation uses adjusted net earnings and adjusted net
earnings per common share (basic and diluted) to assess its
performance. Management believes these non-GAAP measures, in
addition to GAAP measures, provide users enhanced understanding of
its operating results and increase the transparency of its core
results. Management also believes these measures provide better
comparability of its results from one period to another.
NON-GAAP AND OTHER FINANCIAL MEASURES (CONTINUED)
The following is a reconciliation of net earnings, adjusted net
earnings and net earnings considered for diluted adjusted net
earnings per common share:
|
Fourth Quarters
Ended
December
31,
|
|
Years
Ended
December
31,
|
|
|
2022
|
2021
|
|
2022
|
2021
|
|
|
$
|
$
|
%
|
$
|
$
|
%
|
Net
earnings
|
12,066
|
9,008
|
33.9
|
65,005
|
895
|
7,163.1
|
Change in estimate
related to inventory obsolescence,
net of taxes
|
—
|
764
|
|
8,031
|
16,379
|
|
Stock-based
compensation, net of
taxes
|
3,068
|
3,856
|
|
9,936
|
8,457
|
|
Restructuring and
other charges, net of taxes
|
—
|
(80)
|
|
978
|
16,285
|
|
Amortization of
intangible assets related to the
acquisition of GSF Car Parts, net of taxes
|
520
|
882
|
|
2,828
|
3,630
|
|
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 net
earnings
|
15,654
|
15,675
|
(0.1)
|
86,778
|
48,885
|
77.5
|
Conversion impact of
convertible debentures, net of
taxes
|
1,088
|
1,194
|
|
4,633
|
5,194
|
|
Net earnings
considered for diluted adjusted net
earnings per common share
|
16,742
|
16,869
|
(0.8)
|
91,411
|
54,079
|
69.0
|
Basic net earnings
per common share
|
0.28
|
0.21
|
33.3
|
1.49
|
0.02
|
7,350.0
|
Change in estimate
related to inventory obsolescence,
net of taxes
|
—
|
0.02
|
|
0.19
|
0.38
|
|
Stock-based
compensation, net of
taxes
|
0.07
|
0.09
|
|
0.23
|
0.20
|
|
Restructuring and
other charges, net of taxes
|
—
|
(0.01)
|
|
0.02
|
0.38
|
|
Amortization of
intangible assets related to the
acquisition of GSF Car Parts, net of taxes
|
0.01
|
0.02
|
|
0.06
|
0.08
|
|
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 net
earnings per common share
|
0.36
|
0.36
|
—
|
1.99
|
1.14
|
74.6
|
Conversion impact of
convertible debentures, net of
taxes
|
(0.04)
|
(0.04)
|
|
(0.25)
|
(0.10)
|
|
Diluted adjusted net
earnings per common share
|
0.32
|
0.32
|
—
|
1.74
|
1.04
|
67.3
|
|
|
|
|
|
|
|
The following table presents a reconciliation of the weighted
average number of common shares outstanding for diluted adjusted
net earnings per common share:
|
Fourth Quarters
Ended
December
31,
|
Years
Ended
December
31,
|
|
2022
|
2021
|
2022
|
2021
|
Weighted average
number of common shares outstanding for basic adjusted
net earnings per common share
|
43,807,030
|
43,781,156
|
43,612,399
|
42,903,523
|
Conversion impact of
convertible debentures
|
7,822,243
|
8,106,116
|
8,008,480
|
8,799,629
|
Impact of stock
options (1)
|
451,606
|
414,652
|
433,343
|
160,818
|
Impact of dilutive
deferred share units ("DSUs")
|
305,017
|
—
|
209,388
|
—
|
Impact of dilutive
restricted share units ("RSUs")
|
332,772
|
—
|
352,657
|
—
|
Weighted average
number of common shares outstanding for diluted adjusted
net earnings per common share
|
52,718,668
|
52,301,924
|
52,616,267
|
51,863,970
|
(1)
|
For the fourth
quarter of 2021, options to acquire 60,322 common
shares 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. For the year ended
December 31, 2021, options to acquire 113,221 common
shares 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.
|
|
|
NON-GAAP AND OTHER FINANCIAL MEASURES (CONTINUED)
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 acquisitions and development of intangible
assets.
Management believes this non-GAAP cash flow measure 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. Management considers this measure,
in addition to GAAP measures, to provide investors a perspective on
its ability to generate liquidity, after making capital investments
required to support business operations and long-term value
creation.
The following table reconciles cash flows from operating
activities to free cash flow:
|
Fourth Quarters
Ended
December
31,
|
Years
Ended
December
31,
|
|
2022
|
2021
|
2022
|
2021
|
|
$
|
$
|
$
|
$
|
Cash flows from
operating activities
|
44,885
|
28,462
|
178,068
|
114,069
|
Advances to merchant
members and incentives granted to customers
|
(2,378)
|
(3,558)
|
(12,879)
|
(13,118)
|
Reimbursement of
advances to merchant members and liquidation
proceeds of incentives granted to customers
returned
|
833
|
520
|
4,785
|
4,897
|
Acquisitions of
property and equipment
|
(3,166)
|
(5,097)
|
(15,707)
|
(11,056)
|
Proceeds from disposal
of property and equipment
|
932
|
283
|
2,237
|
1,152
|
Acquisitions and
development of intangible assets
|
(752)
|
(986)
|
(4,010)
|
(4,492)
|
Free cash
flow
|
40,354
|
19,624
|
152,494
|
91,452
|
|
|
|
|
|
Available liquidity
This measure, representing cash plus amounts available under the
credit facilities in respect of financial covenants, less amounts
used under the credit facilities and letters of credit issued, is
considered useful by the Corporation to evaluate its ability to
meet its short-term liquidity needs as well as to support its
growth. Available liquidity is subject to compliance with various
covenants contained in the credit facilities agreement.
The following table reconciles the available liquidity:
|
As at
December 31,
|
As at
December 31,
|
|
2022
|
2021
|
|
$
|
$
|
Amounts available under
the credit facilities (1)
|
422,246
|
408,100
|
Amounts used under the
credit facilities (1)
|
(159,808)
|
(235,384)
|
Letters of credit
issued (1)
|
(4,970)
|
(6,346)
|
Cash
|
23,919
|
28,156
|
Available
liquidity
|
281,387
|
194,526
|
(1)
|
Refer to
Note 18 to the Consolidated Financial Statements for further
details.
|
|
|
NON-GAAP AND OTHER FINANCIAL MEASURES (CONTINUED)
Total net debt and total net debt to adjusted EBITDA
ratio
Total net debt represents the sum of the credit facilities,
lease obligations (including the portion due within a year), net of
deferred financing costs and cash. Total net debt excludes
convertible debentures since they are convertible into common
shares of the Corporation. Refer to Note 18 to the
Consolidated Financial Statements for further details.
Total net debt to adjusted EBITDA ratio represents total net
debt divided by the trailing last four quarters' adjusted EBITDA.
This ratio is used by management to evaluate the Corporation's
financial leverage, capital structure and financing strategies.
The following table presents a reconciliation of the components
and the calculation of Total net debt to adjusted EBITDA ratio:
|
As at
December 31,
|
As at
December 31,
|
|
2022
|
2021
|
|
$
|
$
|
Long-term debt,
including the current portion (1)
|
258,356
|
337,386
|
Cash
|
23,919
|
28,156
|
Total net
debt
|
234,437
|
309,230
|
|
|
|
Adjusted EBITDA -
trailing last four quarters (2)
|
185,024
|
146,695
|
Total net debt to
adjusted EBITDA ratio
|
1.27x
|
2.11x
|
(1)
|
Refer to Note 18
to the Consolidated Financial Statements for further
details.
|
(2)
|
Refer to the "Selected
quarterly consolidated financial information" section of the
Interim Management Discussion and Analysis for more information on
the results of each of the last eight quarters.
|
SOURCE Uni-Select Inc.