Uni-Select Inc. has reported its financial results for the fourth quarter ended Dec. 31, 2016.
“We are pleased with our sales and earnings growth in the quarter. In Canada, we returned to positive organic growth with the Prairies strengthening. Total sales of FinishMaster US were up 17.7 percent; excluding the impact of the product line changeover, organic sales would have been approximately 4.1 percent,” said Henry Buckley, president and CEO of Uni-Select. “We continue to make great progress building the business at FinishMaster US, and expanding our coverage of the market. In Canada, we are investing in the future, building the BUMPER TO BUMPER brand, for both independent customers and corporates stores, as well as expanding the newly launched FINISHMASTER brand nationally. We continue to be highly committed to building our business for the long term through balanced profitable growth and the expansion of both networks.”
Consolidated sales for the fourth quarter were $291 million, a 12.3 percent increase, mainly driven by the sales generated from recent business acquisitions, for the most part in the US, representing an increase of 15.3 percent. On an organic basis, consolidated sales decreased by 1.1 percent, mainly due to the product line changeover in the Paint and Related Products (US) segment, and partially compensated by the performance of the Western provinces in the Automotive Products (Canada) segment, which regained some strength. Excluding the impact of the product line changeover, consolidated organic growth would have been approximately 2.8 percent.
The corporation generated an EBITDA of $24.6 million for the fourth quarter of 2016, compared to $24 million last year. The adjusted EBITDA margin grew to 8.7 percent, up 100 bps compared to 2015. EBITDA margin enhancement was driven by a combination of optimized buying conditions as well as reduced bonus and other incentive plans following the rightsizing of the corporate office. These factors were partially offset by negative synergies following the sale of net assets, higher professional fees notably for the acquisitions and integration-related costs, and ongoing investments related to the corporate stores initiatives.
Net earnings were $12.7 million compared to $13.9 million last year. Once adjusted for non-recurring items, earnings were 18.3 percent better than last year and reached $13.1 million and adjusted earnings per share grew by 19.2 percent from 26 cents in 2015 to 31 cents.
Consolidated sales for the 12-month period were $1,197.3 million, a 11.7 percent decrease, mainly due to the sale of the net assets in 2015. Consolidated sales grew 13.4 percent compared to last year, once sales of net assets sold are excluded. Sales generated from recent business acquisitions representing $157.9 million or 15 percent exceeded the impact of the Canadian dollar on its conversion to US dollar, which penalized sales by $14.2 million or 1.4 percent. On an organic basis, consolidated sales grew by 0.2 percent, supported by existing customer growth and net customer recruitment in the Paint and Related Products (US) segment, which was partially offset by the product line changeover and the softness of the economic conditions in the Automotive Products (Canada) segment.
The corporation generated an EBITDA of $106.8 million for the 12-month period of 2016, compared to a negative EBITDA of $53.3 million last year affected by impairment and transaction charges related to the sale of net assets. The adjusted EBITDA margin grew to 9 percent, up 190 bps when compared to 2015. That enhancement was driven by the sale of net assets bearing a lower margin compared to the remaining operations, optimized buying conditions, reduced bonus and other incentives plans in relation to the rightsizing of the corporate office, as well as accretive business acquisitions. These factors were partially offset by negative synergies following the sale of net assets, ongoing investments related to the corporate stores initiatives as well as acquisitions and integration related costs.
Net earnings were $58.3 million compared to a net loss of $40.2 million last year, which was affected by impairment and transaction charges related to the sale of net assets. Adjusted earnings amounted to $58.6 million, up 3.2 percent from last year, while adjusted earnings per share increased by 3.8 percent from $1.33 in 2015 to $1.38 as the benefits from recent business acquisitions compensated for the impact of the sale of net assets.
Cash flow from operating activities increased by $117.7 million compared to 2015, due to the benefit of additional vendor financing activities, lower investment in inventory, income tax refunds and higher operating income.
