• Sales up 42.0% to $422.1 million of which The Parts Alliance contribution represented $110.0 million or 37.0%;
• Solid organic growth ⁽¹⁾ of 5.9% from the Canadian operations;
• EBITDA ⁽¹⁾ of $27.0 million up 16.5%; Adjusted EBITDA ⁽¹⁾ of $27.6 million up 19.2%;
• EBITDA margin ⁽¹⁾ at The Parts Alliance UK of 8.7%;
• EPS of $0.25, Adjusted EPS ⁽¹⁾ up 11.5% to $0.29; and
• Reiterating 2018 annual guidance.

BOUCHERVILLE, QC, May 3, 2018 /CNW Telbec/ - Uni-Select Inc. (TSX: UNS) today reported its financial results for the first quarter ended March 31, 2018.

"Overall our first quarter results were in line with our expectations when considering the seasonality of our business. For the quarter, revenues increased by 42.0% and EBITDA by 16.5% when compared to last year fuelled by the UK acquisition," said Henry Buckley, President and Chief Executive Officer of Uni-Select.

"The Parts Alliance continued its strategy of network expansion by opening four greenfields and generated an EBITDA margin of 8.7% in a seasonally strong quarter, as expected. The Canadian business demonstrated robust organic growth of 5.9% and generated an EBITDA margin in line with last year, representative of its seasonally softest quarter of the year. Finally, FinishMaster continued to face some headwinds as it rebuilds sales momentum, with early signs of success as a result of winning new business volume."

"Looking forward, considering first quarter results, our business outlook in the U.K. and in Canada and the progressive improvement expected at FinishMaster throughout 2018, we are confident to achieve our consolidated guidance for the year," concluded Mr. Buckley.

For further information about the Corporation's use of the non-IFRS measures identified in this press release, refer to "Non-IFRS financial measures" section.

FIRST QUARTER RESULTS
Consolidated sales for the first quarter were $422.1 million, a 42.0% increase compared to the same quarter last year, driven by the sales generated from recent business acquisitions, adding sales of $121.6 million or 40.9%, of which The Parts Alliance UK segment represents $110.0 million or 37.0%. The Canadian Automotive Group segment delivered a solid organic growth of 5.9% offsetting the performance of the FinishMaster US segment, which is reporting negative organic growth of 2.8%.

The Corporation generated an EBITDA and EBITDA margin of $27.0 million and 6.4%, respectively. Once adjusted for net transaction charges related to The Parts Alliance acquisition, EBITDA was $27.6 million (6.5% of sales) for the quarter, compared to $23.2 million (7.8% of sales) in 2017, an increase of 19.2%. The adjusted EBITDA margin decreased by 130 basis points and was affected by a revenue mix impact and lower special buys in the FinishMaster US segment as well as by integration efforts to optimize the growing network of company-owned stores in the Canadian Automotive Group segment. These impacts were partially compensated by savings resulting from the 20/20 initiative as well as by an improved cost absorption at the Parts Alliance UK segment benefiting from its peak season.

Net earnings and adjusted earnings were respectively $10.4 million and $12.1 million. Adjusted earnings increased by 10.2% compared to the same quarter last year and mainly resulted from the Parts Alliance UK segment's contribution and the reduction of the Corporation income tax rate for its US operations. These elements were partially offset by additional finance costs as well as depreciation and amortization, all related to recent business acquisitions and investments in capital.

Segmented Results

The FinishMaster US segment recorded sales of $201.4 million, up 0.8% from the same quarter in 2017, supported by recent business acquisitions representing a growth of $7.3 million or 3.6% and compensating the negative organic growth. However, starting in the second quarter, the FinishMaster US segment will benefit from winning new business volume. This is expected to progressively offset the impact of the first quarter by the end of the third quarter. EBITDA for this segment was $19.9 million, compared to $23.3 million in 2017. The EBITDA margin decrease of 180 basis points is the result of lower special buys in the current quarter and an evolving customer mix as a result of recent business acquisitions that have more MSOs and for which discounts are more significant. These elements were partially compensated by savings arising from the 20/20 initiative, with the integration of 3 stores and the alignment of employee benefits and operating expenses to its evolving cost-to-serve model.

Sales for the Canadian Automotive Group segment were $110.7 million, compared to $97.5 million in 2017, an increase of approximately 13.5%, the result of a solid organic growth of 5.9% stemming from sales to independent customers as well as from sales through its growing network of company-owned stores, the impact of the Canadian dollar on its conversion to US dollar and recent business acquisitions. The EBITDA margin of the current quarter was slightly below last year, mainly due to the internalization of the servers, which was a favorable one-time saving in 2017 compared to the current quarter, as well as integration efforts to optimize its growing network of company-owned stores, which included severance. These elements were partially counterbalanced by higher volume rebates, improving the gross margin of the current quarter compared to the corresponding quarter last year.

The Parts Alliance UK segment recorded sales of $110.0 million and EBITDA of $9.6 million (8.7% of sales). The peak season of this segment, which typically covers the first and the second quarters, is enabling the leverage of its cost base. Further supported by cost actions taken during the last quarter of 2017, the result was an EBITDA margin of 8.7% for the current quarter, in contrast to the 4.0% recorded in the fourth quarter of 2017. As part of its growth strategy, this segment opened 6 greenfields since the beginning of the year.

DIVIDENDS
On May 3, 2018, the Uni-Select Board of Directors declared a quarterly dividend of C$0.0925 per share payable on July 17, 2018 to shareholders of record as at June 30, 2018. This dividend is an eligible dividend for income tax purposes.

OUTLOOK
The information included within this section contains guidance for Uni-Select in 2018:

Other

As well, Uni-Select anticipates investments between $26.0 million and $29.0 million on vehicle fleet, hardware equipment, software and others.

CONFERENCE CALL
Uni-Select will host a conference call to discuss its first quarter results for 2018 on May 3, 2018 at 8:00 AM Eastern. To join the conference, dial 1 866 865-3087 (or 1 647 427-7450 for International calls).

A recording of the conference call will be available from 11:00 AM Eastern on May 3, 2018 until 11:59 PM Eastern on June 3, 2018. To access the replay, dial 1 855 859-2056 followed by 7386647.

A live webcast of the quarterly results conference call will also be accessible through the "Investors" section of our website at uniselect.com where a replay will also be archived. Listeners should allow ample time to access the webcast and supporting slides.

ABOUT UNI-SELECT
Uni-Select is a leader in the distribution of automotive refinish and industrial paint and related products in North America, as well as a leader in the automotive aftermarket parts business in Canada and in the UK. Uni‑Select is headquartered in Boucherville, Québec, Canada, and its shares are traded on the Toronto Stock Exchange (TSX) under the symbol UNS.

In Canada, Uni-Select supports over 16,000 automotive repair and collision repair shops through a growing national network of more than 1,100 independent customers and over 60 company-owned stores, many of which operate under the Uni-Select BUMPER TO BUMPER^®, AUTO PARTS PLUS^® AND FINISHMASTER^® store banner programs. It also supports over 3,900 shops and stores through its automotive repair/installer shop banners, as well as through its automotive refinish banners.

In the United States, Uni-Select, through its wholly-owned subsidiary FinishMaster, Inc., operates a national network of over 200 automotive refinish company-owned stores under the FINISHMASTER banner which services a network of over 30,000 customers annually, of which it is the primary supplier to over 6,800 collision repair centre customers.

In the UK and Ireland, Uni-Select, through its Parts Alliance group of subsidiaries, is a leading distributor of automotive parts supporting over 23,000 customer accounts with a network of close to 200 locations including over 170 company-owned stores.

CAUTION REGARDING FORWARD-LOOKING INFORMATION
Certain statements made in this press release are forward-looking statements. These statements include, without limitation, statements relating to our 2018 financial guidance (including, without limitation, adjusted EBITDA margin and organic sales by business unit) and other statements that are not historical facts. Forward-looking statements are typically identified by the words assumption, goal, guidance, objective, outlook, project, strategy, target and other similar expressions or future or conditional verbs such as aim, anticipate, believe, could, expect, intend, may, plan, seek, should, strive and will. All such forward-looking statements are made pursuant to the "safe harbour" provisions of applicable Canadian securities laws.

Forward-looking statements are, by their very nature, subject to inherent risks and uncertainties and are based on several assumptions, both general and specific, which may cause expressed expectations to be significantly different from those listed or implied within this press release and our business outlook, objectives, plans and strategic priorities may not be achieved. As a result, we cannot guarantee that any forward-looking statement will materialize and we caution you against relying on any of these forward‑looking statements. The forward-looking information contained herein is made as of the date of this press release, and Uni-Select does not undertake to publicly update such forward-looking information to reflect new information, subsequent or otherwise, unless required by applicable securities laws. Forward‑looking statements are presented in this press release for the purpose of assisting investors and others in understanding certain key elements of our expected 2018 financial results, as well as our objectives, strategic priorities and business outlook for 2018, and in obtaining a better understanding of our anticipated operating environment. Readers are cautioned that such information may not be appropriate for other purposes.

MATERIAL ASSUMPTIONS
A number of economic, market, operational and financial assumptions were made by Uni-Select in preparing its forward-looking statements contained in this press release, including, but not limited to:

Economic Assumptions:

• Economic conditions in Canada, the United States and the United Kingdom will remain stable;
• The current negotiations for the exit of the United Kingdom from European Union do not result in economic uncertainty;
• Interest rates expected to slightly increase in 2018;
• Canadian dollar and the British pound are expected to remain at, or around, near current levels. Further fluctuations may be impacted by the degree of strength of the US dollar, interest rates and changes in commodity prices.

Market Assumptions:

Our 2018 forward-looking statements also reflect various market assumptions, in particular:

• New-car sales in the three business segments are expected to be similar in 2018 to those of 2017;
• For all 3 operational segments, fuel costs at the pump are not expected to increase significantly beyond current levels; distance travelled and accident rates to remain within those experienced in 2017;
• No material, operational or competitive consequence resulting from changes in regulations or the insurance market affecting the automotive aftermarket businesses.

Operational and Financial Assumptions:

The 2018 forward-looking statements are also based on various internal operational and financial assumptions, including, but not limited to:

• Maintaining market share in the 3 operational segments;
• Uni-Select will be able to realize efficiency gains in its cost structure to support the profitability and cash flow generation expected from its 20/20 initiative;
• The revenue mix between Uni-Select's operations and within its 3 operational segments will not materially change from anticipated levels;
• No introduction of disruptive technologies during the year;
• No significant change in the buying conditions beyond current levels;
• It is important to note that organic sales and EBITDA margin of the business segments are affected by seasonality and are impacting the consolidated results:
• FinishMaster US tends to have softer first and fourth quarters, with its third quarter being the strongest;
• Canadian Automotive Group tends to have softer first and fourth quarters than second and third quarters; and
• The Parts Alliance UK tends to have softer third and fourth quarters than first and second quarters;
• No significant acquisition; and
• Guidance is based on current accounting standards and policies including Uni-Select non-IFRS measures.

The foregoing assumptions, although considered reasonable by Uni-Select on May 3, 2018, may prove to be inaccurate. Accordingly, our actual results could differ materially from our expectations set forth in this press release.

MATERIAL RISKS
Important risk factors that could cause our assumptions and estimates to be inaccurate and actual results of events to differ materially from those expressed in, or implied by, our forward-looking statements, including our 2018 financial guidance, are listed below. The realization of our forward-looking statements, including our ability to meet our 2018 financial guidance, essentially depends on our business performance which, in turn, is subject to many risks. Accordingly, readers are cautioned that any of the following risks could have a material adverse effect on our forward-looking statements. These risks include, but are not limited to economic climate, changes in legislation or government regulations or policies, inflation, distance travelled, growth in vehicle fleet, products supply and inventory management, distribution by the manufacturer directly to consumers, technology, environmental risks, legal and tax risks, risks related to Uni-Select's business model and strategy, integration of acquired business, competition, business and financial systems, human resources, liquidity risk, credit risk, foreign exchange risk and interest rates.

For additional information with respect to risks and uncertainties, refer to the Annual Report filed by Uni-Select with the Canadian securities commissions.

ADDITIONAL INFORMATION
The Management's Discussion and Analysis (MD&A), consolidated financial statements and related notes for the first quarter of 2018 are available in the "Investors" section on the Corporation's website at uniselect.com as well as on SEDAR at sedar.com. The Corporation's Annual Report may also be found on these websites as well as other information related to Uni-Select, including its Annual Information Form.

NON-IFRS FINANCIAL MEASURES

The information included in this Press release contains certain financial measures that are inconsistent with IFRS. Non‑IFRS financial measures do not have any standardized meaning prescribed by IFRS and are therefore unlikely to be comparable to similar measures presented by other entities.

Organic growth – This measure consists of quantifying the increase in pro forma consolidated sales between two given periods, excluding the impact of acquisitions, sales and disposals of stores, exchange-rate fluctuations and when necessary, the variance in the number of billing days. This measure enables Uni-Select to evaluate the intrinsic trend in the sales generated by its operational base in comparison with the rest of the market. Determining the rate of organic growth, based on findings that Management regards as reasonable, may differ from the actual rate of organic growth.

EBITDA – This measure represents net earnings excluding finance costs, depreciation and amortization and income taxes. This measure is a financial indicator of a corporation's ability to service and incur debt. It should not be considered by an investor as an alternative to sales or net earnings, as an indicator of operating performance or cash flows, or as a measure of liquidity, but as additional information.

Adjusted EBITDA, adjusted earnings and adjusted earnings per share – Management uses adjusted EBITDA, adjusted earnings and adjusted earnings per share to assess EBITDA, net earnings and net earnings per share from operating activities, excluding certain adjustments, net of income taxes (for adjusted earnings and adjusted earnings per share), which may affect the comparability of the Corporation's financial results. Management considers that these measures are more representative of the Corporation's operational performance and more appropriate in providing additional information. These adjustments include, among other things, restructuring and other charges as well as net transaction charges, amortization of the premium on foreign currency options and amortization of intangible assets related to The Parts Alliance acquisition. The Management consider The Parts Alliance acquisition as transformational. The exclusion of these items does not indicate that they are non-recurring.

EBITDA margin and adjusted EBITDA margin – The EBITDA margin is a percentage corresponding to the ratio of the EBITDA to sales. The adjusted EBITDA margin is a percentage corresponding to the ratio of adjusted EBITDA to sales.

Free cash flows - This measure corresponds to the cash flows from operating activities according to the consolidated statements of cash flows adjusted for the following items: changes in working capital items, acquisitions of property and equipment and difference between amounts paid for post-employment benefits and current period expenses. Uni-Select considers the free cash flows to be a good indicator of financial strength and of operating performance because it shows the amount of funds available to manage growth in working capital, pay dividends, repay debt, reinvest in the Corporation and capitalize on various market opportunities that arise. The free cash flows exclude certain variances in working capital items (such as trade and other receivables, inventory and trade and other payables) and other funds generated and used according to the consolidated statements of cash flows. Therefore, it should not be considered as an alternative to the consolidated statements of cash flows, or as a measure of liquidity, but as additional information.

The following table presents a reconciliation of organic growth.

The following table presents a reconciliation of EBITDA and adjusted EBITDA.

The following table presents a reconciliation of adjusted earnings and adjusted earnings per share.

The following table presents a reconciliation of free cash flows.

SOURCE Uni-Select Inc.

View original content: http://www.newswire.ca/en/releases/archive/May2018/03/c4676.html