Boucherville (Québec), September 30, 2020 – Uni-Select Inc. (TSX: UNS) is providing a business update for July and August, including market conditions in the U.S., Canada and the U.K., its organic sales growth, the status of its Continuous Improvement Plan and its financial position.
- Key industry metrics in the U.S., Canada and the U.K. are showing clear signs of recovery. In the U.S., claim counts are gradually recovering, in Canada, traffic levels are getting closer to the 2019 level and in the U.K., transport use has essentially returned to more normalized levels.
- Uni-Select’s sales trend improved progressively month after month to reach (10.9%) in August since the (45.8%) trough experienced in April.
- As at August 31, 2020, Uni-Select had realized over 90% of the targeted $28 million of annualized cost savings through the Continuous Improvement Plan.
- As at August 31, 2020, driven by better than expected operations, Uni-Select was able to further improve its access to liquidity to reach over $200 million, up from $182 million at the end of the second quarter.
“Market conditions in all three of our segments have improved sequentially since the trough set in April which is encouraging in the current context. In turn, our monthly organic sales growth has mirrored the improvement in the market. As expected, the Canadian Automotive Group and the Parts Alliance U.K. business segments are returning to historical sales levels at a faster rate than the refinish sector FinishMaster U.S., overall demonstrating the resiliency of our automotive aftermarket businesses,” stated Brent Windom, President and Chief Executive Officer of Uni-Select Inc.
“Furthermore, we continued executing our Continuous Improvement Plan, and as at the end of August, realized over 90% of the targeted $28 million annualized cost savings. We will continue to diligently monitor the evolution of COVID-19 and its impact on our business, improve our operations and transition to automation to enhance organizational speed and position the Corporation for growth post-COVID-19. In addition, we continued to focus on our cash management plan. As at the end of August, we had sufficient liquidity and were in compliance with our covenants. I would like to thank our team members for their perseverance and dedication as well as our customers and suppliers for their understanding and support,” concluded Mr. Windom.
Further information will be provided in our third quarter results which will be released November 13, 2020.
Selected Credit Agreement Covenants
Uni-Select must comply with the following credit agreement covenants:
- Liquidity: Greater than $35 million from Q3-20 to Q1-22
- Consolidated EBITDA: Greater than $0 from Q3-20 to Q1-21; greater than $20 million for Q2-21 and greater than $25 million for Q3-21
- Total Debt / EBITDA Ratio: Lower than 4.50:1.00 for Q4-21 and Q1-22; lower than 4.00:1.00 for Q2-22 and Q3-22; lower than 3.50:1.00 for Q4-22 and lower than 3.75:1.00 for Q1-23
- EBITDA / Interest Expense Ratio: Greater than 2.50:1.00 from Q4-21 to Q3-22; greater than 3.00:1.00 for Q4-22 and Q1-23
Please refer to the Credit Agreement on Sedar for a list and description of all covenants and their calculation.
With over 4,800 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 74 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 148 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 171 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. 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.