BOUCHERVILLE, Quebec – Uni-Select Inc. generated sales of $476.2 million in the second quarter of 2013, similar to the comparable period of 2012, an overall organic growth of 1.2 percent. Sales of the U.S. operations totaled $339.5 million in the second quarter, with an organic sales growth of 2.7 percent.
Uni-Select said this positive organic growth is the result of sales’ programs and overall better execution combined with improved service level in the operations permitted by a more stable ERP system. As a result of store closures, sales decreased by 1.6 percent. Store closures are related to the company’s internal strategic and operational plan (the "Action Plan") announced July 11, 2013. Sales from the Canadian operations totaled $136.6 million compared to $139.4 million in the second quarter of 2012, including a negative organic growth of 2.5 percent.
As part of the Action Plan, Uni-Select recognized restructuring charges, write-off and others of $35.2 million in the second quarter. These charges are related to liquidation of redundant inventory, site closures, consolidation costs, employee termination benefits, recognition of future lease obligations, write-down of certain property and equipment to their net realizable value, and write-off in the value of certain software, which will no longer be used.
"We are pleased that sales organically grew in the U.S. We are confident that our recent performance in the U.S., together with our new Action Plan will lead to improved results over the next quarters," said Richard Roy, president and CEO.
"We are progressing in a solid industry that offers growth opportunities. We believe in our ability to meet expectations and generate beneficial value to all stakeholders. We remain committed to achieving previously stated goals such as the reduction of indebtedness and carrying out our sales strategy to diversify our market, increase market share and pursue our development" added Roy.
During the quarter, Uni-Select announced the completion of its formal strategic review process and the optimization of its distribution network in the U.S. The Action Plan derived from this in-depth analysis is in progress, and completion is expected in late 2014. As of June 30, 2013, 11 stores and one warehouse were closed. The relocation of the company’s U.S. national distribution center is completed, and 156 positions were eliminated. These actions reduced expenses by approximately $10 million, on an annual basis, of which $5 million will positively affect 2013 results.
For the six-month period ended June 30, 2013, sales totaled $898 million, a 2.6 percent decrease compared to the same period of 2012. The decline is explained by store closures related to the Action Plan, less billing days as well as the decline in the overall organic growth of 0.2 percent. Uni-Select noted that sales at the beginning of the year were affected by softer demand on seasonal repairs reflecting challenging economic conditions as well as extended winter weather conditions compared to last year. The corporation also experienced business disruptions due to the deployment of its enterprise resource planning system. These issues were resolved at the end of January 2013.
Despite a positive organic growth of 0.2 percent, sales of the U.S. operations for the six-month period totaled $655.1 million, 2.6 percent lower than for the same period in 2012. Sales of the Canadian operations for the period under review in 2013 amounted to $242.9 million, lower than the previous year, with an organic sales decline of 1.3 percent.
Since the beginning of fiscal 2013, Uni-Select reduced its debt by $24.9 million and generated cash from operating activities of $50 million compared to $35 million for the same period last year.
In conjunction with announcing its second quarter financial results yesterday, Uni-Select has announced two new appointments to the leadership of its U.S. automotive business.
Brent Windom has been named president and chief operating officer (COO) for Uni-Select’s U.S. automotive business. Windom has been with Uni-Select for nine years, previously serving as senior vice president, sales and marketing, U.S. Automotive. With nearly 30 years in the automotive aftermarket, Windom served as vice president of marketing and merchandising for MAWDI from 1994 to 2004, when it was sold to Uni-Select. In announcing his appointment, Uni-Select said it is confident that Windom’s experience and abilities will bring added value to the U.S. automotive parts distribution activities. His appointment is effective July 31.
Uni-Select’s board of directors also announced the appointment of a new director to the board, effective July 31. Dennis Welvaert was appointed in place of Joseph Felicelli, who resigned in the second quarter. Welvaert, who was acting president and COO for the U.S. automotive business until July 31, also will serve as chairman of Uni-Select USA Inc. As acting president and COO, Welvaert replaced former Uni-Select USA President and COO Willi Alexander, who stepped down in April.
As the new chairman of Uni-Select USA, Welvaert’s main responsibility will be to monitor and ensure the execution of the company’s recently announced Action Plan, which includes the closure, divestiture or consolidation of roughly 48 stores in its U.S. network.
Welvaert retired as president of Dayco North American Aftermarket Division in 2011. He is chairman of the Global Automotive Aftermarket Symposium and former chairman of the Automotive Aftermarket Suppliers Association (AASA). While at Dayco, Welvaert held senior executive-level positions in the OEM, industrial and aftermarket divisions. He has more than 40 years of experience in the automotive industry.
