FinishMaster US segment was up 6.7%.
Uni-Select Inc. today reported consolidated sales increased by $39.9 million or 9.7% to $449.5 million in the first quarter ended March 31. Excluding the impact of unfavorable fluctuation of the British pound and the Canadian dollar against the US dollar of $21.6 million or 5.3%, consolidated sales increased by $61.5 million or 15.0%, compared to the same quarter in 2022, driven by organic growth, from all three segments, ranging between 5.1% and 22.1%, as well as acquisitions and a favorable variance in the number of billing days.
Consolidated organic growth of 10.6% was driven primarily by price increases.
Earnings before interest, taxes, depreciation and amortization (EBITDA) increased to $40.3 million or 9.0% of sales from $28.2 million or 6.9% of sales last year. Adjusted EBITDA was $48.1 million or 10.7% of sales, compared to $45.2 million or 11.0% of sales the in 2022.
According to the company, the adjusted EBITDA margin was impacted by costs related to a software implementation project in the Canadian Automotive Group and the FinishMaster U.S. segments, as well as timing of insurance costs. This was partially offset by scaling of payroll and operating expenses.
Net earnings in the first quarter were $16.7 million or $0.34 per diluted common share, an increase of $9.0 million or $0.17 per diluted common share last year.
“Uni-Select reported solid first-quarter results with all three business units achieving organic growth, mainly attributable to price increases. We are particularly pleased with e-commerce sales in the U.K. and with the performance of our private brands in Canada. While we proceed towards the closing of the transaction with LKQ Corporation, we remain focused on operational performance and on managing the business profitably,” said Brian McManus, Executive Chair and Chief Executive Officer of Uni-Select.
Net earnings for the quarter increased by $9.0 million to $16.7 million. Excluding impacts of change in estimate related to inventory obsolescence, stock-based compensation, costs related to the acquisition by LKQ Corporation, restructuring and other charges and amortization of intangibles assets related to the acquisition of GSF Car Parts, adjusted net earnings increased by $1.8 million or 8.4% to $23.0 million primarily due to higher sales.
In February, LKQ and Uni-Select announced that they have entered into a definitive agreement for LKQ to acquire all of Uni-Select’s issued and outstanding shares for CA$48.00 ($35.41) per share in cash, representing a total enterprise value of approximately CA$2.8 billion ($2.1 billion).
Segmented First Quarter Results
The FinishMaster U.S. segment reported sales of $184.3 million, an increase of 6.7%, from organic growth of 5.1% and a favorable variance in the number of billing days. The increase in organic growth was mainly driven by price increases. EBITDA was $16.4 million for the quarter compared to $18.6 million in 2022. Excluding impacts of stock-based compensation and restructuring and other charges, adjusted EBITDA and adjusted EBITDA margin decreased by $1.9 million and 1.7% respectively to $17.7 million and 9.6% of sales, from $19.6 million and 11.3% of sales in 2022. This variance is mainly attributable to the unfavorable customer mix, costs related to a software implementation project, as well as timing of medical and vehicle insurance costs. These elements were offset by higher rebates and higher sales, driving scaling benefits.
The Canadian Automotive Group segment reported sales of $145.4 million. Excluding the impact of unfavorable fluctuation of the Canadian dollar against the US dollar of $9.1 million or 7.0% during the first quarter of 2023, sales increased by $24.7 million or 19.0%, compared to the same quarter last year, driven by acquisitions over the last twelve months representing 9.5%, organic growth of 8.4%, as well as a favorable variance in the number of billing days. The increase in organic growth was mainly driven by price increases. This segment reported EBITDA and EBITDA margin of $15.3 million and 10.5% respectively for the quarter compared to $5.5 million and 4.2% in 2022. Excluding impacts of change in estimate related to inventory obsolescence, stock-based compensation and restructuring and other charges, adjusted EBITDA and adjusted EBITDA margin were respectively $15.7 million and 10.8% of sales, compared to $17.2 million and 13.2% of sales in 2022. This variance is mainly attributable to costs related to a software implementation project, while 2022 benefited from favorable timing of rebates, lower variable compensation and foreign currency gains. This was partially offset by recent accretive business acquisitions, lower bad debt expenses and higher sales driving scaling benefits.
The GSF Car Parts U.K. segment reported sales of $119.8 million. Excluding the impact of unfavorable fluctuation of the British pound against the US dollar of $12.5 million or 11.7% during the first quarter of 2023, sales increased by $25.3 million or 23.6%, driven by organic growth of 22.1% and a favorable variance in the number of billing days. The increase in organic growth was mainly driven by e-commerce sales, price increases, as well as the contribution of recently opened greenfield stores. This segment reported EBITDA and EBITDA margin of $16.6 million and 13.8% respectively for the quarter compared to $9.6 million and 9.0% in 2022. Excluding impacts of stock-based compensation and restructuring and other charges, adjusted EBITDA and adjusted EBITDA margin improved by $6.1 million and 4.0% respectively to $17.0 million and 14.2% of sales, from $10.9 million and 10.2% of sales in 2022. This performance was mainly driven by higher sales driving scaling benefits and timing of rebates, offsetting inflationary utility costs, higher marketing costs to promote e-commerce sales, as well as foreign currency losses due to the volatility of the British pound.