Uni-Select Inc. reported its financial results for the first quarter ended March 31, 2022, with highlights including a significant increase in sales and net earnings.

“We had a very strong start to the year with sales up 10.7% to $409.6 million, adjusted EBITDA up over 50% to $45.2 million and net earnings up to $7.7 million. These results reflect improvements in underlying demand, price increases, additional vendor rebates, the benefits generated from operational improvements implemented last year and significant savings on borrowing costs,” stated Brian McManus, Executive Chair and Chief Executive Officer of Uni-Select.

“During the quarter, we used our liquidity to support the seasonal increase in working capital requirements and make strategic investments to grow the business. While total net debt edged up, we ended the period in a solid financial position with a leverage ratio of 2.02x, slightly lower than that of the previous quarter.

“We still expect sales and profitability to improve in 2022, compared to 2021. However, the magnitude of improvement will likely be greater in the first half of the year due to the timing of certain rebates and as we begin to lap certain operational improvements implemented in the back half of 2021 while continuing to navigate ongoing supply chain and labor issues. Our priorities for 2022 will be to continue to focus on organic growth and drive operational improvements across each business unit. Making use of our improved balance sheet, we intend to reinvest in the business through increased capex and customer investments and begin to consider strategic acquisition opportunities to further expand and consolidate our market position. We are well-positioned to drive the business to the next level given the global market recovery, our healthy balance sheet and the dedication of our team,” concluded McManus.

QUARTERLY HIGHLIGHTS (Compared to the First Quarter of 2021):
• Consolidated sales of $409.6 million, up $39.5 million or 10.7%, driven by organic growth(1) of 11.6%, all three segments reporting positive organic growth;
• EBITDA increased 14.0% to $28.2 million or 6.9% of sales from $24.8 million or 6.7% of sales, as a result of sustained strong gross margins, and scaling of payroll and operating expenses offsetting certain inflationary costs and one-time change in estimate related to inventory obsolescence of $10.9 million in the Canadian Automotive Group; Adjusted EBITDA increased 51.0% to $45.2 million or 11.0% of sales, compared to $30.0 million or 8.1% of sales;
• Net earnings of $7.7 million or $0.17 per diluted common share, an increase of $7.5 million or $0.16 per diluted common share; Adjusted net earnings(1) of $21.2 million or $0.43 per diluted common share, an increase of $16.2 million or $0.31 per diluted common share; and
• Total net debt reduction of $56.2 million; Total net debt to adjusted EBITDA(1) ratio down to 2.02x driven by strong operating results.

FIRST QUARTER RESULTS
Compared to the First Quarter of 2021:
Consolidated sales of $409.6 million for the quarter increased by 10.7%, driven by organic growth of 11.6%, with all three segments reporting positive organic growth, ranging between 9.2% and 14.8% for the quarter. This was driven primarily by increased demand and the impact of price increases. Organic growth was partially offset by unfavourable currency conversion effects. Consolidated organic growth continues to improve, reflecting the global market recovery from the COVID-19 pandemic.

The Corporation generated EBITDA of $28.2 million for the quarter, which was mainly impacted by the one-time change in estimate charge of $10.9 million related to inventory obsolescence in the Canadian Automotive Group, higher stock-based compensation expense related to an increase in the price of our common shares, and partially offset by lower special item expenses. Once these elements are excluded, adjusted EBITDA and adjusted EBITDA margin increased by $15.2 million and 2.9% respectively to $45.2 million and 11.0% of sales, from $30.0 million and 8.1% of sales in 2021. The increase is the result of sustained strong gross margins, which includes rebates from all three business segments, improved operational performance, scaling of payroll and operating expenses, offset by inflationary pressures on fuel and energy, as well as the timing of certain expenses incurred with respect to new store openings in the U.K. and a small acquisition in Canada.

Net earnings for the quarter increased by $7.5 million to $7.7 million and were impacted by a one-time change in estimate charge net of tax of $8.0 million related to inventory obsolescence in the Canadian Automotive Group, higher stock-based compensation expense related to an increase in the price of our common shares, and partially offset by lower special item expenses. Once these elements are excluded, adjusted net earnings increased by $16.2 million to $21.2 million from $5.0 million in 2021. This performance is primarily attributable to higher sales and rebates as well as improved overall operational performance, including reduced net financing costs, net of income tax expense. The first quarter of 2021 benefited from temporary furloughs, bad debt reversal and governmental subsidies for its occupancy costs.

Segmented First Quarter Results
The FinishMaster U.S. segment reported sales of $172.8 million, with organic growth of 9.2%, driven by a general market recovery and price increases. EBITDA was $18.6 million for the quarter, compared to $9.7 million in 2021 impacted by higher stock-based compensation expense primarily related to an increase in the price of our common shares, and partially offset by lower special item expenses. Once these elements are excluded, adjusted EBITDA and adjusted EBITDA margin improved by $9.5 million and 4.9% respectively to $19.6 million and 11.3% of sales, from $10.1 million and 6.4% of sales in 2021. This performance was driven by higher sales and rebates from higher purchases as well as improved fixed cost absorption which offset higher delivery cost and bad debt expenses.

The Canadian Automotive Group segment reported sales of $129.8 million, an increase of 12.7% largely driven by organic growth of 12.2% and, to a lesser extent, acquisitions over the last twelve months. The increase in organic sales was mainly driven by higher demand and price increases that began during the third quarter of 2021 and continued into the first quarter of 2022. This segment reported EBITDA and EBITDA margin of $5.5 million and 4.2% respectively for the quarter, a decrease of $6.2 million or 6.0%, compared to $11.7 million and 10.2% in 2021.

The variance is mainly attributable to a one-time change in estimate charge of$10.9 million to inventory and higher stock-based compensation expense primarily related to an increase in the price of our common shares, and partially offset by lower special items expenses. Once these elements are excluded, adjusted EBITDA and adjusted EBITDA margin increased by $5.2 million and 2.7% respectively to $17.2 million or 13.2% of sales, from $12.0 million or 10.5% of sales in 2021. The variance is mainly attributable to additional vendor rebates, as well as higher sales, driving scaling benefits.

The GSF Car Parts U.K. segment reported sales of $107.1 million, an increase of 10.7%, mainly driven by organic growth of 14.8%, offsetting an unfavourable fluctuation of the British pound against the US dollar during the first quarter of 2022. Organic growth continued to improve in the quarter from higher demand and price increases.

This segment reported EBITDA and EBITDA margin of $9.6 million and 9.0% respectively for the quarter, a decrease of $0.3 million or 1.2% compared to $9.9 million and 10.2% in 2021 impacted by higher stock-based compensation expense primarily related to an increase in the price of our common shares and higher special items expenses in relation to the rebranding. Once these elements are excluded, adjusted EBITDA increased by $0.9 million and adjusted EBITDA margin decreased by 0.1%, respectively, to $10.9 million and 10.2% of sales, from $10.0 million and 10.3% of sales in 2021. The first quarter of 2021 benefited from governmental occupancy subsidies of $0.4 million or 0.4% of sales. This was offset by higher sales and rebates in the first quarter of 2022, driving scaling benefits.

CONFERENCE CALL
Uni-Select hosted a conference call to discuss its results for the first quarter of 2022 on May 5, 2022, at 8:00 AM Eastern Time. To join the conference, dial 1 888 390-0549 (or 1 416 764-8682 for international calls).
A recording of the conference call will be available from 11:30 AM Eastern Time on May 5, 2022, until 11:59 PM Eastern Time on June 5, 2022. To access the replay, dial 1 888 390-0541 followed by 569924#. A webcast of the quarterly results conference call will also be accessible through the “Investors” section of www.uniselect.com where a replay will also be archived. Listeners should allow ample time to access the webcast and supporting slides.

ABOUT UNI-SELECT

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 under the symbol 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 80 company-operated 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
145 automotive refinish company-operated stores under the FINISHMASTER® banner, which supports over 30,000 customers
annually.

In the U.K., Uni-Select, through GSF Car Parts, is a major distributor of automotive parts supporting over 20,000 customer accounts
with a network of over 170 company-operated stores.

www.uniselect.com