Sales in the United
States reach 40% of total sales
- Total sales for the first quarter ended February 28, 2022 reached $384.5 million, up 29.2%, of which 16.3% was
internal growth and 12.9% by acquisitions. In Canada, sales were $230.5 million, up 19.3%. In the United States, sales rose by 48.0%
(US$) to US$121.2 million, accounting
for 40% of total sales in Canadian currency.
- EBITDA was $53.7
million, up 40.8%, and EBITDA margin increased to
14.0%, compared to 12.8% in Q1 2021.
- Net earnings attributable to shareholders increased
43.4% to $30.1 million, or
$0.53 per share diluted, up
43.2%.
- The three acquisitions concluded in the United States on December 31, 2021 represent additional sales of
approximately $100 million on an
annual basis.
- The financial position remains sound and solid with
working capital of $449.9
million for a ratio of 2.9:1 and an average return on
equity of 24.0% at February 28,
2022.
MONTREAL,
April 7,
2022 /CNW Telbec/ - "Richelieu (RCH: TSX) started the 2022 fiscal
year with sharply improved results, reflecting solid internal
growth as well as a substantial contribution from acquisitions in
the first quarter ended February 28.
Thanks to our interconnected network, our strategies of continuous
innovation, acquisition and multi-access service, we have seized
the opportunities generated by the diversified and vigorous markets
we serve. The financial performance of the first quarter, both in
Canada and the United States, is all the more
satisfactory since the first three months of the year are
historically the weakest", indicated Richard Lord, President and Chief Executive
Officer.
"As previously announced by way of a press
release, on December 31, 2021, we
completed the acquisitions of Compi Distributors (Missouri and Illinois), HGH Hardware Supply (Alabama, Tennessee and Georgia) and National Builders Hardware
(Oregon) - three acquisitions that
add approximately $100 million in
sales on an annual basis and strengthen our positioning in
the United States. Together with
the five acquisitions closed in Canada and the U.S. in fiscal year 2021, they
bring our North American network to 106 strategically located
distribution centers, including 57 in the U.S. In the coming
periods, we will remain focused on creating synergies by
integrating our recent acquisitions, as well as on our innovation
and acquisition strategies », added Richard
Lord.
ANALYSIS OF OPERATING RESULTS FOR
THE FIRST QUARTER ENDED FEBRUARY 28,
2022, COMPARED WITH THE FIRST QUARTER ENDED FEBRUARY 28, 2021
For the first quarter ended February 28, 2022, consolidated sales
reached $384.5 million, compared with
$297.6 million for the corresponding
quarter of 2021, an increase of 29.2%, of which 16.3% from internal
growth and 12.9% from acquisitions. At comparable exchange rates to
the first quarter of 2021, the consolidated sales growth would have
been 29.4% for the quarter ended February
28, 2022.
Richelieu
achieved sales of $326.7 million
in the manufacturers market, compared with $241.7 million for the first quarter of
2021, an increase of $85 million or 35.2% increase, of which
21.8% resulted from internal growth and 13.4% from acquisitions.
Internal growth resulted from strong demand in the renovation
market as well as from higher sales prices. Sales to hardware
retailers and renovation superstores stood at $57.8 million, up $1.9
million or 3.4% over the first quarter of 2021, of which
11.0% resulted from acquisitions and 7.6% from internal decrease on
those of the first quarter of 2021 which had been up sharply.
In Canada, Richelieu recorded sales of $230.5 million, an increase of $37.3 million or 19.3% over the first
quarter of 2021, of which 13.2% from internal growth and 6.1% from
acquisitions. Sales to manufacturers amounted to
$186.7 million compared with
$153.2 million in the first
quarter of 2021, an increase of 21.9% of which 17.7% from internal
growth and 4.2% from acquisitions. Sales to hardware
retailers and renovation superstores grew to $43.8 million, up $3.8
million or 9.5%, mostly resulting from
acquisitions.
In the United
States, sales totalled US$121.2 million, compared with US$81.9 million for the first quarter of
2021, an increase of US$39.3 million or 48.0%, of which 22.5%
from internal growth and 25.5% from acquisitions. Sales to
manufacturers amounted to US$110.2
million compared with US$69.4
million in the first quarter of 2021, an increase of 58.8%,
of which 29.3% from internal growth and 29.5% from acquisitions. In
the retailers and renovation superstores market, sales in US
dollars are down by 12.0% as a result of the internal decrease
compared to those of the first quarter of 2021, which were up
sharply. Considering applicable exchange rates, total U.S. sales
expressed in Canadian dollars stood at $154.0 million, compared with $104.4 million for the first quarter of 2021, an
increase of 47.5%, and they accounted for 40.0% of consolidated
sales for the first quarter of 2022, whereas they represented 35.1%
of the period's consolidated sales for the first quarter of
2021.
First-quarter earnings before income taxes,
interest and amortization (EBITDA) amounted to $53.7 million, up $15.6 million or 40.8% over the first
quarter of 2021. Gross margin increased slightly and
EBITDA margin improved mainly due to the increase in sales
and costs control. EBITDA margin stood at 14.0%,
compared to 12.8% for the corresponding quarter of 2021.
Amortization expenses for the first
quarter of 2022 amounted to $11.1 million compared with $8.5 million for the corresponding quarter
of 2021, up $2.6 million,
resulting from an increase in amortization of intangible assets and
right-of-use assets mainly due to recent business acquisitions as
well as lease renewals and expansions made in the second half of
last year.
First-quarter net earnings grew by 44.0%.
Considering non-controlling interests, net earnings attributable
to shareholders of the Corporation amounted to $30.1 million, up 43.4% over the first
quarter of 2021. Net earnings per share rose to $0.54 basic and $0.53 diluted, compared with $0.38 basic and $0.37 diluted for the first quarter of 2021, an
increase of 42.1% and 43.2 % respectively.
Comprehensive income amounted to
$28.8 million, considering a negative
adjustment of $1.5 million on
translation of the financial statements of the subsidiary in
the United States, compared with
$18.0 million for the first quarter
of 2021, considering a negative adjustment of $3.1 million on translation of the financial
statements of the subsidiary in the
United States.
FINANCIAL POSITION
Operating activities
First-quarter
cash flows from operating activities (before net change in
working capital balances) amounted to $42.6
million or $0.75 diluted per
share, compared with $30.7 million or
$0.54 diluted per share for the first
quarter of 2021, an increase of 38.5% stemming primarily from the
net earnings growth. Net change in non-cash working capital
balances used cash flows of $80.1
million, reflecting the $73.2
million change in inventories and accounts payable, and the
change in accounts receivable and other items which used cash flows
of $6.9 million. Consequently,
operating activities used cash flows of $37.5 million, whereas they had represented a
cash inflow of $7.8 million for the
first quarter of 2021.
Financing activities
First-quarter
cash flows from financing activities used cash flows of
$8.3 million, compared with
$16.5 million for the first quarter
of 2021. The Corporation paid lease obligations of $5.7 million, issued shares for $5.8 million and made a long-term debt repayment
of $1.1 million, compared to lease
obligation payments of $4.6
million, a share issuance for $0.8 million and a long-term debt repayment of
$1.3 million in the first quarter of
2021. Dividends paid to shareholders of the Corporation amounted to
$7.3 million compared to $7.6 million in the same period of 2021. In
2021 the Corporation paid a special dividend of $0.0667 per share in addition to a dividend of
$0.07 per share. The Corporation also
repurchased common shares for an amount of $3.3 million in the first quarter of 2021, while
it did not make any share repurchases in 2022.
Investing activities
First-quarter
cash flows from investing activities represented a cash
outflow of $46.2 million,
including $42.4 million for three
business acquisitions made early during the current quarter and
$3.8 million primarily for the
purchase of new equipment to maintain and improve operational
efficiency.
Sources of financing
As at February 28, 2022, the bank overdraft amounted to
$33.5 million, compared with a
cash balance of $58.7 million as
at November 30, 2021. This change mainly results from business
acquisitions made during the first quarter of 2022 as well as the
increase in non-cash working capital items during the quarter,
primarily inventories. The Corporation posted working
capital of $449.9 million for a
current ratio of 2.9:1, compared with $456.4
million (current ratio of 3.3:1 ) as at November 30, 2021.
Richelieu
believes it has the capital resources to fulfill its ongoing
commitments and obligations and to assume the funding requirements
needed for its growth and the expected financing and investing
activities between now and the end of 2022. The Corporation
continues to benefit from an authorized line of credit of
$85 million [$65 million as at November 30 2021] as well as a line of credit of
US$6 million renewable annually and bearing interest at prime
and base rates respectively. In addition, Richelieu considers it could obtain additional
external financing if necessary.
Summary financial
position
|
(in thousands of $,
except exchange rates)
|
As at
|
February
28,
|
November 30,
|
|
2022
|
2021
|
|
$
|
$
|
|
|
|
Current
assets
|
686,790
|
659,179
|
Non-current
assets
|
347,559
|
305,001
|
Total
|
1,034,349
|
964,180
|
Current
liabilities
|
236,876
|
202,803
|
Non-current
liabilities
|
100,895
|
92,440
|
Equity attributable to
shareholders of the Corporation
|
693,998
|
666,442
|
Non-controlling
interests
|
2,580
|
2,495
|
Total
|
1,034,349
|
964,180
|
Exchange rates on
translation of a subsidiary in the United States
|
1.270
|
1.279
|
Assets
Total assets amounted to $1.0 billion as at February 28, 2022, compared with $964.2 million as at November 30, 2021,
an increase of 7.3%. Current assets grew by 4.2% or
$27.6 million over
November 30, 2021. This increase stems from the addition of
current assets following the business acquisitions made during the
period and from the rise in inventories resulting from the increase
in demand and supply costs. Non-current assets increased
14.0% mainly due to the addition of intangible assets and goodwill
related to the business acquisitions.
Cash
position
|
|
|
(in thousands of
$)
|
|
|
As at
|
February
28
|
November 30
|
|
2022
|
2021
|
|
$
|
$
|
Current portion of
long-term debt
|
8,649
|
5,339
|
Long-term
debt
|
—
|
1,100
|
Total
debt
|
8,649
|
6,439
|
Cash and cash
equivalents (bank overdraft)
|
(33,534)
|
58,707
|
The Corporation continues to benefit from a
healthy and solid financial position. As at February 28, 2022, total debt was
$8.6 million representing
balances payable on acquisitions.
Equity attributable to shareholders of the
Corporation totalled $694.0 million as at February 28, 2022, compared with $666.4 million as at November 30, 2021,
an increase of $27.6 million
stemming primarily from a $22.8 million growth in retained earnings
which amounted to $613.3 million, and of a $6.3 million growth in share capital and
contributed surplus, whereas accumulated other comprehensive income
was down by $1.5 million.
As at February 28, 2022, the book
value per share was $12.37, up by
3.7% over November 30, 2021.
As at February 28,
2022, at the close of markets, the Corporation's share
capital consisted of 56,093,619 common shares [55,841,119
shares as at November 30, 2021]. Weighted average number of
diluted outstanding shares for the three-month periods ended
February 28, 2022 was 56,574,430
[2021 - 56,408,470]. During the first quarter ended February 28, 2022, the Corporation issued 252,500
common shares at an average price of $22.31 [263,925 in fiscal 2021 at an average
price of $19.54] upon the exercise of
stock options under its stock option plan. During the quarter ended
February 28, 2022, the Corporation
granted 276,000 stock options [289,000 in fiscal 2021] and
cancelled 4,000 stock options. As a result, as at
February 28, 2022, 1,710,875 stock
options were outstanding [1,691,125 as at November 30, 2021]
.
Dividends
On April 7, 2022, the Board of
Directors approved the payment of a quarterly dividend of 0.13$ per
share to shareholders of record as at April 21, 2022, payable
on May 5, 2022. The declared dividend is designated as an
eligible dividend within the meaning of the Income Tax Act
(Canada).
PROFILE AS AT FEBRUARY 28,
2022
Richelieu is a
leading North American importer, distributor and manufacturer of
specialty hardware and complementary products. Its products are
targeted to an extensive customer base of kitchen and bathroom
cabinet, storage and closet, home furnishing and office furniture
manufacturers, door and window, residential and commercial
woodworkers, and hardware retailers including renovation
superstores. Richelieu offers
customers a broad mix of products sourced from manufacturers
worldwide. Its product selection consists of over 130,000 different
items targeted to a base of more than 100,000 customers who are
served by 106 centers in North
America – 47 distribution centers in Canada, 57 in the
United States and two manufacturing plants in Canada, specifically Cedan Industries Inc.
which specializes in the manufacturing of a wide variety of veneer
sheets and edgebanding products and Menuiserie des Pins Ltée which
manufactures components for the window and door industry and a
broad selection of decorative mouldings.
Notes to readers — Richelieu uses earnings before interest,
income taxes and amortization ("EBITDA") because this measure
enables management to assess the Corporation's operational
performance. This measure is a financial indicator of a
corporation's ability to service its debt. However, EBITDA should
not be considered by an investor as an alternative to operating
income, net earnings, cash flows or as a measure of liquidity.
Because EBITDA is not a standardized measurement as prescribed by
IFRS, it may not be comparable to the EBITDA of other companies.
Richelieu also uses adjusted cash
flows from operating activities, which are based on net earnings
plus amortization, deferred tax expense (or recovery), share-based
compensation expense and financial costs. These additional measures
do not account for net change in non-cash working capital items to
exclude seasonality effects and are used by management in its
assessments of cash flows from long-term operations. Therefore,
adjusted cash flows from operating activities may not be comparable
to those of other companies. Certain statements set forth in this
report (generally identified by terms such as "may", "could",
"might", "intend", "expect", "believe", "estimate" or comparable
variants) constitute forward-looking statements which, by their
very nature, remain subject to other risks and uncertainties as set
forth in the Corporation's annual and quarterly reports. Although
management considers these assumptions and expectations reasonable
based on the information available at the time they are provided,
such assumptions and expectations could prove inaccurate and actual
results could differ materially. Richelieu is under no obligation to update or
revise any forward-looking statements made herein to account for
future events or circumstances, except as required by applicable
legislation.
APRIL 7,
2022, CONFERENCE CALL AT 2:30 P.M. (EASTERN DAYLIGHT
TIME)
|
Financial analysts and investors interested in participating in
the conference call on Richelieu's
results to be held at 2:30 p.m. on
April 7, 2022, may dial 1-888-390-0620 a few minutes
before the start of the call. For those unable to participate, a
taped rebroadcast will be available as of 5:45 p.m. on April 7, 2022, until midnight
on April 14, 2022 by dialling
1-888-259-6562, access code: 064702 #. Members of the media
are invited to listen in.
Photos are available
at www.richelieu.com
|
CONSOLIDATED STATEMENTS OF FINANCIAL
POSITION
|
|
[In thousands of
dollars]
[Unaudited]
|
As
at
February
28,
2022
|
As at
November 30,
2021
|
|
$
|
$
|
ASSETS
|
|
|
Current
assets
|
|
|
Cash and cash
equivalents
|
—
|
58,707
|
Accounts
receivable
|
211,394
|
199,585
|
Inventories
|
466,874
|
395,464
|
Prepaid
expenses
|
8,522
|
5,423
|
|
686,790
|
659,179
|
Non-current
assets
|
|
|
Property, plant and
equipment
|
47,178
|
46,239
|
Intangible
assets
|
70,176
|
53,910
|
Right-of-use
assets
|
99,111
|
87,013
|
Goodwill
|
123,922
|
110,776
|
Deferred
taxes
|
7,172
|
7,063
|
|
1,034,349
|
964,180
|
LIABILITIES AND
EQUITY
|
|
|
Current
liabilities
|
|
|
Bank
overdraft
|
33,534
|
—
|
Accounts payable and
accrued liabilities
|
159,624
|
155,009
|
Income taxes
payable
|
10,710
|
21,281
|
Current portion of
long-term debt
|
8,649
|
5,339
|
Current portion of
lease obligation
|
24,359
|
21,174
|
|
236,876
|
202,803
|
Non-current
liabilities
|
|
|
Long-term
debt
|
—
|
1,100
|
Lease
obligation
|
81,318
|
71,880
|
Deferred
taxes
|
9,868
|
9,868
|
Other
liabilities
|
9,709
|
9,592
|
|
337,771
|
295,243
|
Equity
|
|
|
Share
capital
|
61,606
|
54,610
|
Contributed
surplus
|
6,306
|
7,046
|
Retained
earnings
|
613,342
|
590,522
|
Accumulated other
comprehensive income
|
12,744
|
14,264
|
Equity attributable to
shareholders of the
Corporation
|
693,998
|
666,442
|
Non-controlling
interests
|
2,580
|
2,495
|
|
696,578
|
668,937
|
|
1,034,349
|
964,180
|
CONSOLIDATED
STATEMENTS OF EARNINGS
|
[In thousands of
dollars, except earnings per share]
[Unaudited]
|
For the
three-month periods ended
February 28,
|
|
2022
|
2021
|
|
$
|
$
|
Sales
|
384,466
|
297,581
|
Operating expenses
excluding amortization
|
330,738
|
259,419
|
Earnings before
amortization, financial costs and
income taxes
|
53,728
|
38,162
|
Amortization of
property, plant and equipment and
right-of-use asset
|
8,535
|
6,928
|
Amortization of
intangible assets
|
2,517
|
1,593
|
Financial costs,
net
|
1,082
|
657
|
|
12,134
|
9,178
|
Earnings before
income taxes
|
41,594
|
28,984
|
Income taxes
|
11,294
|
7,942
|
Net earnings
|
30,300
|
21,042
|
Net earnings
attributable to:
|
|
|
Shareholders of the
Corporation
|
30,098
|
20,984
|
Non-controlling
interests
|
202
|
58
|
|
30,300
|
21,042
|
Net earnings per
share attributable to
shareholders of the Corporation
|
|
|
Basic
|
0.54
|
0.38
|
Diluted
|
0.53
|
0.37
|
CONSOLIDATED
STATEMENTS OF COMPREHENSIVE INCOME
|
[In thousands of
dollars]
[Unaudited]
|
For the
three-month periods ended
February 28,
|
|
2022
|
2021
|
|
$
|
$
|
Net
earnings
|
30,300
|
21,042
|
|
|
|
Other comprehensive
income (loss) that will be
reclassified to net earnings
|
|
|
Exchange differences on
translation of foreign
operations
|
(1,520)
|
(3,092)
|
Comprehensive
income
|
28,780
|
17,950
|
Comprehensive income
attributable to:
|
|
|
Shareholders of the
Corporation
|
28,578
|
17,892
|
Non-controlling
interests
|
202
|
58
|
|
28,780
|
17,950
|
CONSOLIDATED
STATEMENTS OF CASH FLOWS
|
[In thousands of
dollars]
[Unaudited]
|
|
|
For the
three-month periods ended
February 28,
|
|
2022
|
2021
|
|
$
|
$
|
OPERATING
ACTIVITIES
|
|
|
Net earnings
|
30,300
|
21,042
|
Items not affecting
cash
|
|
|
Amortization of
property, plant and equipment and
right-of-use asset
|
8,535
|
6,928
|
Amortization of
intangible assets
|
2,517
|
1,593
|
Deferred
taxes
|
(126)
|
—
|
Share-based
compensation expense
|
450
|
421
|
Frais
financiers
|
874
|
748
|
|
42,550
|
30,732
|
Net change in non-cash
working capital balances
|
(80,077)
|
(22,979)
|
|
(37,527)
|
7,753
|
FINANCING
ACTIVITIES
|
|
|
Repayment of long-term
debt
|
(1,079)
|
(1,328)
|
Dividends paid to
shareholders of the Corporation
|
(7,278)
|
(7,634)
|
Payment of lease
obligation
|
(5,742)
|
(4,583)
|
Other dividends
paid
|
—
|
(511)
|
Common shares
issued
|
5,806
|
848
|
Common shares
repurchased for cancellation
|
—
|
(3,257)
|
|
(8,293)
|
(16,465)
|
|
|
|
INVESTING
ACTIVITIES
|
|
|
Business
acquisitions
|
(42,350)
|
—
|
Additions to property,
plant and equipment and
intangible assets
|
(3,800)
|
(2,852)
|
|
(46,150)
|
(2,852)
|
Effect of exchange rate
changes on cash and cash
equivalents
|
(271)
|
32
|
|
|
|
Net change in cash
and cash equivalents
|
(92,241)
|
(11,532)
|
Cash and cash
equivalents, beginning of period
|
58,707
|
73,928
|
Cash and cash
equivalents (bank overdraft), end of
period
|
(33,534)
|
62,396
|
SOURCE Richelieu Hardware Ltd.