Uni-Select Inc. reported its results for the first quarter ended March 31, 2015 and announced the July 31 retirement of President and CEO Richard G. Roy.
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“The first quarter was a time of transition for the corporation. We started 2015 with the confidence that our new sales and banner programs would enable us to attract new customers and lead to positive topline growth”, Roy said. “The somewhat lower growth achieved during the quarter was mainly due to the timing of delayed seasonal maintenance on vehicle impacting customer sales in many of our markets compared to 2014”.
"As for the agreement to sell our U.S. parts distribution activities announced on February 9, 2015, we expect the closing of the transaction to occur by the end of the first semester as disclosed. We now turn to the development of our businesses, Uni-Select Canada and FinishMaster, where we are leaders. Our intention is to strengthen these leadership positions. The same key attributes which have earned us our recognition as the partner of choice in the industry, among which flexibility, superior customer service, sought-after banner programs, efficient logistics and complete product assortment will be the foundation of our future success,” added Roy.
First quarter results
(All percentage increases and decreases represent year-over-year changes for the first quarter of 2015 compared to the first quarter of 2014, unless otherwise noted.)
Uni-Select recorded a slight decrease in sales of 0.3% to $412 million in the first quarter of 2015, resulting from a substantially weaker Canadian dollar, compensated only in part by sales from business acquisitions and organic growth. In the first quarter, consolidated organic sales grew by 0.5%, driven by the recruitment of new customers in the paint and related products segment and partly offset by a temporary decline in the automotive products segment.
For the first quarter, the corporation reported a negative EBITDA of $122 million resulting from impairment and transaction charges of $134 million in connection with the sale of the net assets of the US automotive parts distribution business activities, in addition to restructuring charges of $5 million to right size the corporate operations. Adjusted EBITDA reached $19.5 million, down 6.4% from the $20.8 million recorded in the first quarter of 2014, mainly resulting from unfavorable customer mix, and timing of internal resources utilization for which benefits will arise in future quarters. These factors were partly offset by the impacts of business acquisitions, additional profits from inventory purchased before expected price increase and lower operating expenses.
Adjusted earnings before tax were up 24.9% due to the lower depreciation, amortization and financial costs.
Earnings per share were negative $3.88 due to the impairment and transaction charges of $90 million. After excluding these non-recurrent items, adjusted earnings per share were $0.47 compared to $0.46 last year.
As indicated above, the corporation’s results are presented in US dollars. The declining Canadian dollar impacted sales by $11 million and adjusted earnings per share by $0.01. Once converted to Canadian dollars, adjusted earnings per share reached C$0.58 for the first quarter, up 13.7% compared to C$0.51 in 2014.
On February 1, 2015, the corporation redeemed for cancellation all of its outstanding 5.9% convertible debentures for an aggregate principal amount of C$52 million.
Moreover, during the first quarter, Uni-Select inaugurated its new, state-of-the-art, national distribution center for the Canadian market. At 100,000 square feet and featuring an inventory of over $14 million, the new facility dramatically expands the corporation's reach, the availability of its products and the quality of the customer experience it offers.
Roy will be retiring on July 31, 2015 after a bright career of more than 17 years at Uni-Select, including over 7 years as the corporation’s CEO. The Board of Directors announced that Uni-Select’s current COO, Henry Buckley, will take over the role of CEO effective August 1, 2015.
“The corporation being in great position, I have decided to retire after spending some 17 years with this fantastic organization. I trust that Henry Buckley and the senior leadership team will guide Uni-Select to new heights. I wish them all the best. They have my full support and I am absolutely convinced that an exciting future awaits Uni-Select," Roy said.
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