BOUCHERVILLE, Quebec – Uni-Select has reported for the year ended Dec. 31, 2007, sales were $1.17 billion, an increase of $44 million or 3.9 percent compared to the previous period. Net earnings, for their part, were recorded at $41 million or $2.07 per share, a 3.4 percent decrease compared to net earnings of $42 million or $2.15 per share in 2006.
The results for the 2007 period include the contribution to earnings resulting from recent acquisitions significantly reduced by the unfavorable U.S. exchange rate compared to the Canadian dollar. Excluding the impact of the exchange rate, sales for the company would have increased by 6.9 percent to reach $1.2 billion and net earnings would have been $43 million or $2.20 per share, an increase of 2.3 percent.
Sales for Automotive Group USA increased by 7 percent in 2007 to reach $607 million compared to $567 million in 2006. Acquisitions completed in recent quarters contributed to an increase in sales of $75 million in the period. Excluding the impact of the exchange rate, sales for Automotive Group USA would have increased by 12.5 percent. The operating margin of Automotive Group USA was 6.2 percent compared to 6.5 percent in 2006.
Automotive Group Canada reported an increase in sales of 1.7 percent in 2007 to reach $498 million compared to $490 million during the corresponding period last year. This increase stems from the impact of acquisitions completed during the course of the period. The operating margin went from 9.6 percent in 2006 to 8.5 percent in 2007.
Sales for the Heavy Duty Group decreased by 5.6 percent compared to 2006 to reach $63 million. This decrease is attributable to the transfer in 2006 of some distribution activities to Automotive Group Canada. This transfer represents a 4.3 percent decrease in sales for this division. The efforts made by employees and management to improve both inventory management and the margin have borne fruit, while the operating loss of the Heavy Duty Group was reduced by almost $2 million to reach a break-even point.
“These results are irrefutably below our expectations. In fact, we have already set in motion the initial phases of our triennial plan which targets, amongst other things, the improvement of profitability. The performance of our corporate stores, the optimization of our distribution network, the integration of acquisitions and the usage of technology in the management of our assets are at the heart of the initiatives we are forging ahead with.” said Richard Roy, president and chief executive officer of Uni-Select Inc.
“Several expansion projects were completed and three acquisitions were announced during the period. The integration into our existing operations of the acquisitions will redesign our distribution network in eastern United States and allow us to benefit from savings as of this year. Economic conditions in the US, which contribute to the decrease in our organic growth, should provide us with acquisition opportunities. In addition, the results of our US operations will benefit, for a full year in 2008, from the contribution of Consumer Auto Parts and Parts Distributors, respectively acquired in August and September. Our Canadian operations will benefit from the contribution of Replacement Parts Depot Limited, an Ontario distributor acquired in January and from the execution of national distribution agreements, among which that of Canadian Tire Corporation” continued Roy.
For the quarter ended Dec. 31, 2007, sales were $283 million an increase of $3.3 million or 1.2 percent compared to the same period in 2006. Net earnings, for their part, were $13 million or 66 cents per share, a decrease of 21.6 percent compared to net earnings of $17 million or 85 cents per share in 2006. Furthermore, the results of the 2007 quarter include the contribution to earnings resulting from recent acquisitions partly offset by the unfavorable U.S. exchange rate compared to the Canadian dollar. Excluding the impact of the exchange rate, sales for the company would have increased by 8.9 percent to reach $305 million and net earnings would have been $15 million or 78 cents per share.
Automotive Group USA enjoyed an increase in sales of 6.2 percent in the last quarter of 2007 to reach $150 million compared to $141 million during the corresponding quarter last year. Acquisitions completed during the last quarters contributed $29 million to the increase in sales for the quarter. Excluding the impact of the exchange rate, sales for Automotive Group USA would have increased by 20.2 percent. The operating margin of Automotive Group USA was 6.7 percent compared to 7.8 percent in 2006.
Automotive Group Canada reported a 6 percent negative organic growth in sales. Sales reached $114 million in the fourth quarter while they were $120 million during the corresponding quarter last year. This decrease in sales is as a consequence of a slowdown in activities resulting from a perceived deflation in the value of certain products. The Ontario region was even more so affected as merchants decreased their inventory levels and by weak sales to certain national account clients. The downward pressure on prices as a result of deflation on certain product lines caused by the stronger Canadian dollar, reduced earnings for the quarter by $1.8 million. The operating margin of the Group went from 16.3 percent in 2006 to 10.4 percent in 2007 and excluding the impact of the exchange rate, the margin would have been 12 percent for the quarter.
Sales for the Heavy Duty Group increased by 4.7 percent compared to 2006 to reach $19 million compared to $18 million. As a result of efforts made since the start of the quarter, the operating margin of the Heavy Duty Group went from (0.9 percent) in 2006 to 8.0 percent in 2007, an improvement of close to $1.7 million.
The Board of Directors of Uni-Select Inc. declared a quarterly dividend of $0.1075 per common share payable on April 21 to shareholders of record as at March 31.
