Uni-Select Inc. has reported its financial results for the second quarter ended June 30, 2017.
“We are very pleased with the improved performance in our Canadian business on both sales and EBITDA. We are seeing strong performance from our independent customers as well as our Bumper to Bumper and FinishMaster corporate stores in all regions. Commercial customers represent more than 90 percent of our business, and our growth initiatives are positively impacting our performance. FinishMaster USA is highly focused on growth for all customer segments to overcome the product line changeover headwinds. Our industrial product and customer initiative is showing strong early signs of success,” said Henry Buckley, president and CEO of Uni-Select. “As we expect to close The Parts Alliance acquisition in August, we are excited to welcome all the new team members and customers of The Parts Alliance business in the U.K. This will be a substantial new runway for profitable growth at Uni-Select.”
Consolidated sales for the second quarter were $340.3 million, a 5.1 percent increase compared to the same quarter last year, driven by the sales generated mainly from recent U.S. business acquisitions, adding sales of $33.7 million or 10.4 percent as well as by the organic growth of 6.2 percent in the Canadian Automotive Group. The consolidated organic sales of -2.8 percent were affected, as expected, by the product line changeover in the FinishMaster U.S. segment. Without this impact, the consolidated organic growth would have been approximately 2.1 percent.
The corporation generated an EBITDA and EBITDA margin of $29.5 million and 8.7 percent, respectively. Once adjusted for net charges related to The Parts Alliance acquisition, adjusted EBITDA was $32.5 million or 9.5 percent of sales for the quarter, compared to $29.7 million or 9.2 percent of sales in 2016. The EBITDA margin increase of 0.3 percent is the result of optimized buying conditions, lower stock-based compensation in 2017 as 2016 expenses were impacted by a share price appreciation as well as by a reduction in commissions and bonuses to align with the level of sales. These factors were partially offset by a lower absorption of employee benefits and fixed costs in relation to the organic growth and by a different revenue mix.
Net earnings and adjusted earnings were respectively $13.7 million and $16.6 million. Adjusted earnings decreased by 1 percent compared to the same quarter last year, and were impacted by additional amortization on customer relationships and finance costs related to recent business acquisitions.
Six-month period results
Consolidated sales for the six-month period were $637.5 million, an 8.5 percent increase compared to the same period last year, driven by the sales generated mainly from recent U.S. business acquisitions, resulting in additional sales of $78.3 million or 13.3 percent as well as by the organic sales of 3.1 percent from the Canadian Automotive Group that overcame its loss of an independent member. The consolidated organic sales were affected, as expected, by the product line changeover in the FinishMaster U.S. segment. Without this impact, the consolidated organic growth would have been approximately 0.7 percent.
The corporation generated an EBITDA of $52.7 million, while adjusted EBITDA amounted to $55.6 million, representing an increase of 8.1 percent compared to the same period last year. Adjusted EBITDA margin decrease of 0.1 percent is mainly attributable to lower absorption of employee benefits and fixed costs in relation to the organic growth and a different revenue mix, which were partially compensated by optimized buying conditions and lower information technology expenses.
Net earnings and adjusted earnings were $24.7 million and $27.6 million, respectively, compared to $28.3 million last year. Additional amortization on customer relationships and finance costs related to recent business acquisitions explain the decrease in adjusted earnings.
Uni-Select also announced the appointment of George Heath as a director of the corporation effective immediately. As president of the Global Finishes Group at Sherwin-Williams until his retirement in 2015, Heath is a broad-gauged commercial leader with deep and relevant coatings experience both in North America and abroad.