Uni-Select Inc. has reported its financial results for the first quarter ended March 31, 2022.
“We had a very strong start to the year with sales up 10.7% to $409.6 million, adjusted EBITDA up over 50% to $45.2 million and net earnings up to $7.7 million. These results reflect improvements in underlying demand, price increases, additional vendor rebates, the benefits generated from operational improvements implemented last year and significant savings on borrowing costs,” said Brian McManus, executive chair and CEO of Uni-Select.
“During the quarter, we used our liquidity to support the seasonal increase in working capital requirements and make strategic investments to grow the business. While total net debt edged up, we ended the period in a solid financial position with a leverage ratio of 2.02x, slightly lower than that of the previous quarter.
We still expect sales and profitability to improve in 2022, compared to 2021. However, the magnitude of improvement will likely be greater in the first half of the year due to the timing of certain rebates and as we begin to lap certain operational improvements implemented in the back half of 2021 while continuing to navigate ongoing supply chain and labor issues. Our priorities for 2022 will be to continue to focus on organic growth and drive operational improvements across each business unit. Making use of our improved balance sheet, we intend to reinvest in the business through increased capex and customer investments and begin to consider strategic acquisition opportunities to further expand and consolidate our market position. We are well-positioned to drive the business to the next level given the global market recovery, our healthy balance sheet and the dedication of our team,” concluded McManus.
First Quarter Results
Consolidated sales of $409.6 million for the quarter increased by 10.7%, compared to the first quarter of 2021 – driven by organic growth of 11.6%, with all three segments reporting positive organic growth, ranging between 9.2% and 14.8% for the quarter. The company said this was driven primarily by increased demand and the impact of price increases. Organic growth was partially offset by unfavorable currency conversion effects. Consolidated organic growth continues to improve, reflecting the global market recovery from the COVID-19 pandemic.
Net earnings for the quarter increased by $7.5 million to $7.7 million and were impacted by a one-time change in estimate charge net of tax of $8 million related to inventory obsolescence in the Canadian Automotive Group, higher stock-based compensation expense related to an increase in the price of our common shares, and partially offset by lower special item expenses. Once these elements are excluded, adjusted net earnings increased by $16.2 million to $21.2 million from $5 million in 2021. This performance is primarily attributable to higher sales and rebates as well as improved overall operational performance, including reduced net financing costs, net of income tax expense, according to Uni-Select. The first quarter of 2021 benefited from temporary furloughs, bad debt reversal and governmental subsidies for its occupancy costs.
Segmented First Quarter Results
The FinishMaster U.S. segment reported sales of $172.8 million, with organic growth of 9.2%, driven by a general market recovery and price increases.
The Canadian Automotive Group segment reported sales of $129.8 million, an increase of 12.7% largely driven by organic growth of 12.2% and, to a lesser extent, acquisitions over the past 12 months.
The GSF Car Parts U.K. segment reported sales of $107.1 million, an increase of 10.7%, mainly driven by organic growth of 14.8%, offsetting an unfavorable fluctuation of the British pound against the US dollar during the first quarter of 2022.
The first quarter of 2021 benefited from governmental occupancy subsidies of $0.4 million or 0.4% of sales. This was offset by higher sales and rebates in the first quarter of 2022, driving scaling benefits, said Uni-Select.
