Uni-Select Inc. has reported its financial results for the fourth quarter and the year ended Dec. 31, 2019.
“2019 was a transformational year and we are on the right track. We are pleased with the outcome of the PIP realizing $31.9 million in annualized savings in 2019 and reaching a total of $50.6 million in annualized savings at the end of 2019. The transformational steps undertaken over the past years have been necessary to stabilize the three business segments, enabling the corporation to initiate a culture of continuous improvement in its operations and to capitalize on growth opportunities,” said Brent Windom, president and CEO, Uni-Select Inc. and president and chief operating officer, Canadian Automotive Group.
During 2019, Uni-Select realized annualized savings of $31.9 million, bringing the total annualized savings to $50.6 million since the inception of the plan in 2017, exceeding the targeted outcome.
During 2019, the corporation streamlined its workforce and integrated 41 company-owned stores. In addition, to optimize its logistical processes, the corporation integrated three smaller distribution centers into two larger ones, permitting increased competitiveness and efficiency. These new distribution centers were operational during the first quarter of 2019.
These initiatives resulted in the recognition of restructuring and other charges totaling $17.5 million for the year, of which $5.9 million was non-cash relating to the write‑down of assets.
Fourth-Quarter Results
Consolidated sales of $412.6 million for the fourth quarter decreased by 1.6% compared to the same quarter last year, reflecting soft markets in all three segments and resulting in a negative consolidated organic growth of 1.1% for the quarter. Sales were also impacted by the erosion of sales arising from the integration of company‑owned stores, which represented 0.8% of the decline. A total of 14 company-owned stores were integrated during the fourth quarter, bringing the total number of store integrations to 41 at December 31, 2019.
Net loss and adjusted earnings were respectively $(49.4) million and $4.6 million, compared to $(2.4) million and $5.4 million in 2018. Adjusted earnings decreased by $0.8 million compared to the same quarter last year, mainly due to a lower adjusted EBT and a different income tax rate.
Twelve-Month Period Results
Consolidated sales were $1,739.6 million for the 12-month period, representing an increase of 1.1% on a constant currency basis, when compared to the same period last year. This growth is principally attributable to the contribution of business acquisitions of 0.8% and organic growth of 0.5%. For the 12-month period, the Canadian Automotive Group and the FinishMaster U.S. segments, respectively reported organic growth of 2.4% and 0.5%, offsetting the negative organic growth of 1.9% at The Parts Alliance U.K. segment.
Consolidated EBT of $(17.4) million for the 12-month period of 2019 was impacted by special items for the impairment loss on goodwill of $45 million related to the U.K., a net gain on the disposal of the ProColor program of $18.8 million, restructuring and other charges related to the PIP of $17.5 million and charges related to the review of strategic alternatives of $9.8 million. Once adjusted, consolidated EBT and EBT margin were $40.7 million and 2.3% respectively, compared to $64.4 million and 3.7% in 2018. This variance is mainly explained by pricing pressure and evolving customer mix in the FinishMaster U.S. segment, the opening of greenfields in the U.K., as well as higher borrowing costs, in relation to the debt level. These elements were partially compensated by overall savings related to the PIP.
A net loss of $(19.8) million was recorded for the year 2019, affected by the special items mentioned above. Once adjusted, earnings were $30.8 million, compared to $51.5 million in 2018.
