Boucherville (Québec), June 22, 2020 – Uni-Select Inc. (TSX-UNS) is providing a business update for April and May. Following the implementation of a number of actions to respond to the COVID-19 pandemic as previously reported, Uni-Select’s operating performance was better than anticipated with sales for April and May as well as cash management better than the internal forecast set in late March in response to the uncertainty surrounding the pandemic. We believe that all operating units have performed either in line with their respective markets or ahead.
“We are very proud of how the entire organization successfully implemented the actions required to deal with the impacts of the pandemic that hit all of us over the past three months, enabling us to adjust quickly, to continue to serve our customers and resulting in a much better performance than anticipated at the end of March,” said Brent Windom, President and Chief Executive Officer of Uni-Select Inc. “Strong cash management and a renegotiation of our credit facilities has ensured that we have the liquidity required to manage through this period and for the longer term. We are equally appreciative of the collaboration with our customers and suppliers as we work together through these changing times.”
The steps taken over the past few months have stabilized the businesses and are now allowing us to focus our attention on the Continuous Improvement Plan that was announced before the COVID-19 pandemic. This plan is based on a long-term approach to improving the productivity and efficiency of our three businesses while ensuring that the needs of our customers remain the focus. The main objectives of the plan are to ensure that our customers are served to the highest standards, that our operations and service model are positioned to meet the long-term demands and expectations of the markets in which we operate, and that the Corporation continues to be a strong market leader, while ensuring a safe and healthy environment for all parties. To accomplish these objectives, an in-depth review of the operations was undertaken by each business unit team, resulting in a number of key initiatives that will be implemented over the next several months including the way we serve our customers, right-sizing where required, automation and supply chain logistics.
As previously reported, the Performance Improvement Plan which began in 2018 and was completed in Q1 2020 generated $53 million in annualized savings. We expect the newly-implemented Continuous Improvement Plan to generate a further $28 to $30 million in annualized savings. Uni-Select expects to record restructuring and other one-time charges of approximately $20 million in 2020 mainly due to right-sizing initiatives.
“Despite the challenges related to the COVID-19 crisis, the focus and commitment of our teams has been unwavering. We could not be prouder of what we have accomplished so far and we are confident we will deliver on the Continuous Improvement Plan as we did with the previous plan,” said Mr. Windom.
With over 5,000 employees in Canada, the U.S. and the U.K., Uni-Select is a leader in the distribution of automotive refinish and industrial coatings and related products in North America, as well as a leader in the automotive aftermarket parts business in Canada and in the U.K. Uni-Select is headquartered in Boucherville, Québec, Canada, and its shares are traded on the Toronto Stock Exchange (UNS).
In Canada, Uni-Select supports over 16,000 automotive repair and collision repair shops and more than 4,000 shops through its automotive repair/installer shop banners and automotive refinish banners. Its national network includes over 1,000 independent customer locations and more than 75 company-owned stores, many of which operate under the Uni-Select BUMPER TO BUMPER®, AUTO PARTS PLUS® and FINISHMASTER® store banner programs.
In the United States, Uni-Select, through its wholly-owned subsidiary FinishMaster, Inc., operates a national network of over 175 automotive refinish company-owned stores under the FINISHMASTER® banner, which supports over 30,000 customers annually and is the primary supplier to more than 5,500 collision repair centre customers.
In the U.K. and Ireland, Uni-Select, through its Parts Alliance group of subsidiaries, is a major distributor of automotive parts supporting over 23,000 customer accounts with a network of over 175 company-owned stores. www.uniselect.com
CAUTION REGARDING FORWARD-LOOKING INFORMATION
Certain statements made in this press release are forward-looking statements. 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. Forward-looking statements in this press release include statements relating to our expectation as to the expected cost savings resulting from the Continuous Improvement Plan, productivity, efficiency and right-sizing initiatives and the expected timing of those savings and related costs, and our ability to face the ongoing economic uncertainty. 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. In particular, Uni-Select is facing significant impacts on its business as a result of the COVID-19 pandemic, witnessing a severe decline in revenue commencing mainly in the last half of March 2020. The COVID-19 pandemic has resulted in a major decline in economic activity in North America and the United Kingdom resulting in a decline in demand for Uni‑Select's products and services, reduced workplace productivity resulting from government-ordered business closures and enhanced health and safety measures and compromised business continuity of certain of Uni-Select's stores, suppliers, customers and/or partners. The duration and extent of the impact of the COVID-19 pandemic on Uni-Select's business, including its operations and the market for its securities, will depend on future developments, which are highly uncertain and cannot be predicted at this time, and include the duration, severity and scope of the pandemic and the actions taken in various jurisdictions to contain or treat the outbreak. These impacts could in turn, amongst other things, negatively impact Uni-Select's liquidities and/or its ability to remain in compliance with covenants under its indebtedness. Risks and uncertainties to which the forward-looking statements are subject also include the risk factors described in the Corporation’s Management’s Discussion & Analysis for the year ended December 31, 2019 under the heading “Risk Management” available on www.sedar.com as well as on Uni-Select’s website at www.uniselect.com. 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.