New acquisition and three indications of
interest signed in Canada and the U.S.
- For the third quarter ended August
31, 2022, sales reached $472.9 million, up 26.7%, of which 15.8% from
internal growth and 10.9% from acquisitions. In Canada, sales rose by 14.8% to
$279.6 million. In the United States, sales climbed 43.7%
(US$) to US$150.0 million,
representing 41% of total sales.
- EBITDA increased by 23.8% to $79.2 million and the EBITDA margin stood
at 16.7%.
- Net income attributable to shareholders rose 19.6% to
$46.4 million, or $0.82 diluted per share, up 18.8%.
- For the first nine months, total sales increased
to $1.3 billion, up 29.1%, of which
16.2% from internal growth and 12.9% from acquisitions. Net
income attributable to shareholders was up 27.1% to
$123.4 million, or $2.19 diluted per share, up 27.3%.
- The financial position remains sound and solid with a
working capital of $525.7 million
for a ratio of 2.8:1 and an average return on equity of
24.1% at August 31, 2022.
MONTREAL, Oct. 6, 2022
/CNW Telbec/ - "Richelieu (TSX:
RCH) delivered a solid performance in the third quarter, in line
with previous periods. Our steady growth and impeccable financial
position attest to the efficiency of our business model, tailored
to the specific needs of our diversified customer base, to our
ability to react quickly and adapt to changing market conditions,
as well as our resolute focus on customer service. Our results
reflect the substantial impact of our acquisition, innovation and
diversification strategies in specialized segments that are
complementary to our operations. We continue to integrate our
acquisitions in accordance with our criteria for optimizing
performance while pursuing our strategies of expansion, innovation
and market development in North
America with a quality of service that sets us apart in our
markets», indicated Richard Lord,
President and Chief Executive Officer.
New developments in North
America – Richelieu completed its fourth acquisition
since the beginning of the fiscal year – the 80th since 1988
– Quincaillerie Deno is a distributor of specialty hardware
products operating in Quebec. In
addition, the Corporation signed indications of interest for three
new acquisitions, two in Canada
and one in the United States.
Together, this recent acquisition and the three transactions in
progress would represent sales of approximately $23 million on an annual basis. In order to
further seize and create growth opportunities in the short and long
term, Richelieu is pursuing
several expansion projects in the United
States where it currently operates 57 strategically located
distribution centers. In addition to the expansion of its Fort
Myers, Atlanta and Chicago centers, Richelieu has begun the expansion of its
Pompano and Nashville centers, and
is also planning to open new centers in Carlstadt and Minneapolis.
3rd Quarter Results
Third-quarter consolidated sales reached
$472.9 million, compared to
$373.3 million for the
corresponding quarter of 2021, an increase of $99.6 million or 26.7%, of which 15.8% from
internal growth and 10.9% from acquisitions. At comparable exchange
rates to the third quarter of 2021, the consolidated sales increase
would have been 24.9% for the quarter ended August 31, 2022.
Richelieu achieved sales of
$409.6 million in the
manufacturers market, compared to $313.5 million for the third quarter of
2021, an increase of $96.1 million or 30.7%, of which 17.7% from
internal growth and 13.0% from acquisitions. Sales to hardware
retailers and renovation superstores stood at $63.3 million, up $3.5 million or 5.9% over the third quarter
of 2021, entirely from internal growth.
In Canada, Richelieu recorded sales of $279.6 million, an increase of $36.2 million or 14.8% over the third
quarter of 2021, of which 13.8% from internal growth and 1.0% from
acquisitions. Sales to manufacturers amounted to
$228.0 million, compared to
$197.0 million in the third
quarter of 2021, an increase of 15.7%, of which 14.5% from internal
growth and 1.2% from acquisitions. Sales to hardware
retailers and renovation superstores reached $51.6 million, up $5.2 million or 11.2% over the corresponding
quarter of 2021, entirely from internal growth.
In the United
States, sales totalled US$150.0 million, compared to
US $104.3 million for the third quarter of 2021, up
US$45.7 million or 43.7%, of
which 15.3% from internal growth and 28.4% from acquisitions. Sales
to manufacturers amounted to US$140.9 million, compared to US$93.5 million, an increase of 50.7% over
the third quarter of 2021, of which 18.7% from internal growth and
32.0% from acquisitions. Sales in US$ to hardware retailers
and renovation superstores reached $9.1 million. Total U.S. sales in Canadian
dollars stood at $193.3 million,
compared to $129.9 million in
the third quarter of 2021, an increase of 48.9%. These sales
accounted for 40.9% of consolidated sales for the third quarter of
2022, compared to 34.8% of consolidated sales for the third quarter
of 2021.
Third quarter earnings before income taxes, interest
and amortization ("EBITDA") reached $79.2 million and were up $15.2 million or 23.8% over the third
quarter of 2021, resulting mainly from increased sales. Gross
margin decreased slightly from the third quarter of 2021 and
EBITDA margin stood at 16.7%, compared to 17.1% for the
corresponding quarter of 2021. Net earnings grew 20.1%.
Considering non-controlling interests, net earnings attributable
to shareholders of the Corporation amounted to $46.4 million, up 19.6% over the third
quarter of 2021. Net earnings per share rose to $0.83 basic and $0.82 diluted, compared to $0.69 basic and diluted for the third quarter of
2021, increases of 20.3% and 18.8%, respectively.
Third quarter cash flows from operating
activities (before net change in non-cash working capital
balances) amounted to $60.9 million or $1.08 diluted per share, an increase of 23.5%,
compared to $49.3 million, or
$0.87 diluted per share for the
corresponding quarter of 2021, stemming primarily from the net
earnings growth. Net change in non-cash working capital
balances used cash flows of $58.2 million, reflecting the increase in
inventories of $92.6 million,
whereas change in accounts receivable and other items represented
cash inflows of $34.4 million.
Consequently, operating activities represented a cash inflow of
$2.7 million, compared to a
cash inflow of $34.5 million in
the third quarter of 2021.
Nine-months Results
For the first nine months, consolidated sales
reached $1.3 billion, an
increase of $303.0 million or
29.1% over the first nine months of 2021, of which 16.2% from
internal growth and 12.9% from acquisitions. At comparable exchange
rates to the first nine months of 2021, the consolidated sales
increase would have been 28.0%.
EBITDA totalled $210.8 million, up $47.7 million or 29.3% over the first nine
months of 2021. Gross margin declined slightly over
the corresponding nine-month period of 2021. As for EBITDA
margin, it stood at 15.7%, compared to 15.6% for the first nine
months of 2021. Net earnings increased 27.4%. Considering
non-controlling interests, net earnings attributable to
shareholders of the Corporation totalled $123.4 million, up 27.1% over the
corresponding nine months of 2021. Net earnings per share
amounted to $2.21 basic and
$2.19 diluted, compared to
$1.74 basic and $1.72 diluted for the first nine months of 2021,
up 27.0% and 27.3%, respectively.
Assets
Total assets amounted to $1.2 billion as at August 31, 2022, compared with $964.2 million as at November 30, 2021,
an increase of 23.0%. Current assets grew by 25.2% or
$166.3 million over
November 30, 2021. This increase stems from the addition of
current assets following the business acquisitions made during the
first quarter and from the rise in inventories resulting from the
increase in demand and in supply costs. Non-current assets
increased 18.2% mainly due to the addition of intangible assets and
goodwill related to the business acquisitions.
The Corporation continues to benefit from a healthy and solid
financial position. As at August 31,
2022, total debt was $5.4 million, mainly representing balances
payable on acquisitions.
Dividends
On October 6, 2022, the Board of Directors approved the
payment of a quarterly dividend of 0.13$ per share to shareholders
of record as at October 20, 2022, payable on November 3,
2022. The declared dividend is designated as an eligible dividend
within the meaning of the Income Tax Act (Canada).
PROFILE AS AT AUGUST 31,
2022
Richelieu is a leading North
American distributor, manufacturer and importer 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,
residential and commercial woodworkers, door and window, and
hardware retailers including renovation superstores. Richelieu offers customers a broad mix of
high-end 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 the amortization of property, plant and equipment, intangible
assets and right-of-use asset, 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. The unaudited interim consolidated financial
statements, accompanying notes and interim MD&A for the third
quarter and first nine months of 2022 will be available
shortly on the website of the System for Electronic Document
Analysis and Retrieval ("SEDAR") at www.sedar.com and on the
Corporation's website at www.richelieu.com.
OCTOBER 6,
2022, CONFERENCE CALL AT 2:30 P.M. (EASTERN
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
October 6, 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 October 6, 2022, until midnight
on October 13, 2022, by dialling
1-888-390-0541, access code: 729037 #. Members of the media
are invited to listen in.
Photos are available
under "About Richelieu" – "Media" section at
www.richelieu.com
|
CONSOLIDATED STATEMENTS OF FINANCIAL POSITION
[In thousands of
dollars]
[Unaudited]
|
As at
August 31,
2022
|
As at
November 30,
2021
|
|
$
|
$
|
ASSETS
|
|
|
Current
assets
|
|
|
Cash and cash
equivalents
|
—
|
58,707
|
Accounts
receivable
|
214,359
|
199,585
|
Inventories
|
603,953
|
395,464
|
Prepaid
expenses
|
7,170
|
5,423
|
|
825,482
|
659,179
|
Non-current
assets
|
|
|
Property, plant and
equipment
|
52,328
|
46,239
|
Intangible
assets
|
67,155
|
53,910
|
Right-of-use
assets
|
108,192
|
87,013
|
Goodwill
|
125,093
|
110,776
|
Deferred
taxes
|
7,669
|
7,063
|
|
1,185,919
|
964,180
|
LIABILITIES AND
EQUITY
|
|
|
Current
liabilities
|
|
|
Bank
overdraft
|
85,918
|
—
|
Accounts payable and
accrued liabilities
|
169,454
|
155,009
|
Income taxes
payable
|
12,134
|
21,281
|
Current portion of
long-term debt
|
5,350
|
5,339
|
Current portion of
lease obligation
|
26,949
|
21,174
|
|
299,805
|
202,803
|
Non-current
liabilities
|
|
|
Long-term
debt
|
95
|
1,100
|
Lease
obligation
|
89,145
|
71,880
|
Deferred
taxes
|
9,758
|
9,868
|
Other
liabilities
|
9,926
|
9,592
|
|
408,729
|
295,243
|
Equity
|
|
|
Share
capital
|
61,680
|
54,610
|
Contributed
surplus
|
7,787
|
7,046
|
Retained
earnings
|
684,506
|
590,522
|
Accumulated other
comprehensive income
|
20,252
|
14,264
|
Equity attributable to
shareholders of the
Corporation
|
774,225
|
666,442
|
Non-controlling
interests
|
2,965
|
2,495
|
|
777,190
|
668,937
|
|
1,185,919
|
964,180
|
CONSOLIDATED STATEMENTS OF EARNINGS
[In thousands of
dollars, except earnings per share]
[Unaudited]
|
For the three
months
ended August 31,
|
For the nine
months
ended August 31,
|
|
2022
|
2021
|
2022
|
2021
|
|
$
|
$
|
$
|
$
|
Sales
|
472,883
|
373,298
|
1,345,284
|
1,042,263
|
Operating expenses
excluding amortization
|
393,703
|
309,361
|
1,134,521
|
879,210
|
Earnings before
amortization, financial
costs and income taxes
|
79,180
|
63,937
|
210,763
|
163,053
|
Amortization of
property, plant and equipment
and right-of-use assets
|
9,950
|
7,291
|
27,667
|
21,167
|
Amortization of
intangible assets
|
2,674
|
2,009
|
7,879
|
5,179
|
Net financial costs and
other
|
2,097
|
656
|
4,277
|
1,943
|
|
14,721
|
9,956
|
39,823
|
28,289
|
Earnings before
income taxes
|
64,459
|
53,981
|
170,940
|
134,764
|
Income taxes
|
17,727
|
15,073
|
46,698
|
37,263
|
Net
earnings
|
46,732
|
38,908
|
124,242
|
97,501
|
Net earnings
attributable to:
|
|
|
|
|
Shareholders of the
Corporation
|
46,363
|
38,749
|
123,445
|
97,158
|
Non-controlling
interests
|
369
|
159
|
797
|
343
|
|
46,732
|
38,908
|
124,242
|
97,501
|
Net earnings per
share attributable to
shareholders of the Corporation
|
|
|
|
|
Basic
|
0.83
|
0.69
|
2.21
|
1.74
|
Diluted
|
0.82
|
0.69
|
2.19
|
1.72
|
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
[In thousands of
dollars]
[Unaudited]
|
For the three
months
ended August 31,
|
For the nine
months
ended August 31,
|
|
2022
|
2021
|
2022
|
2021
|
|
$
|
$
|
$
|
$
|
Net
earnings
|
46,732
|
38,908
|
124,242
|
97,501
|
|
|
|
|
|
Other comprehensive
income that will be
reclassified to net earnings
|
|
|
|
|
Exchange differences on
translation of foreign
operations
|
8,479
|
6,540
|
5,988
|
(3,609)
|
Comprehensive
income
|
55,211
|
45,448
|
130,230
|
93,892
|
Comprehensive income
attributable to:
|
|
|
|
|
Shareholders of the
Corporation
|
54,842
|
45,289
|
129,433
|
93,549
|
Non-controlling
interests
|
369
|
159
|
797
|
343
|
|
55,211
|
45,448
|
130,230
|
93,892
|
CONSOLIDATED STATEMENTS OF CASH FLOWS
[In thousands of
dollars]
[Unaudited]
|
For the three
months
ended August 31,
|
For the nine
months
ended August 31,
|
|
2022
|
2021
|
2022
|
2021
|
|
$
|
$
|
$
|
$
|
OPERATING
ACTIVITIES
|
|
|
|
|
Net earnings
|
46,732
|
38,908
|
124,242
|
97,501
|
Items not affecting
cash
|
|
|
|
|
Amortization of property, plant and
equipment and
right-of-use assets
|
9,950
|
7,291
|
27,667
|
21,167
|
Amortization of
intangible assets
|
2,674
|
2,009
|
7,879
|
5,179
|
Deferred
taxes
|
(160)
|
(78)
|
(463)
|
(209)
|
Share-based
compensation expense
|
696
|
482
|
1,986
|
1,458
|
Financial
costs
|
1,001
|
712
|
2,808
|
2,181
|
|
|
|
|
|
|
60,893
|
49,324
|
164,119
|
127,277
|
Net change in non-cash
working capital
balances
|
(58,235)
|
(14,857)
|
(202,007)
|
(36,928)
|
|
2,658
|
34,467
|
(37,888)
|
90,349
|
FINANCING
ACTIVITIES
|
|
|
|
|
Repayment of long-term
debt
|
(3,135)
|
—
|
(4,393)
|
(3,139)
|
Dividends paid to
Shareholders of the
Corporation
|
(7,267)
|
(3,914)
|
(21,823)
|
(15,465)
|
Payment of principal
portion of lease
obligations
|
(6,893)
|
(4,939)
|
(18,864)
|
(14,240)
|
Other dividends
paid
|
—
|
—
|
—
|
(511)
|
Common shares
issued
|
128
|
718
|
6,054
|
4,643
|
Common shares
repurchased for cancellation
|
—
|
(9,837)
|
(7,902)
|
(13,094)
|
|
(17,167)
|
(17,972)
|
(46,928)
|
(41,806)
|
|
|
|
|
|
INVESTING
ACTIVITIES
|
|
|
|
|
Business
acquisitions
|
—
|
(34,387)
|
(42,432)
|
(44,229)
|
Additions to property,
plant and equipment
and intangible assets
|
(6,770)
|
(5,191)
|
(16,781)
|
(12,077)
|
|
(6,770)
|
(39,578)
|
(59,213)
|
(56,306)
|
Effect of exchange rate
changes on cash and
cash equivalents
|
(413)
|
179
|
(596)
|
517
|
|
|
|
|
|
Net change in cash
and cash equivalents
(bank overdraft)
|
(21,692)
|
(22,904)
|
(144,625)
|
(7,246)
|
Cash and cash
equivalents (bank overdraft),
beginning of period
|
(64,226)
|
89,586
|
58,707
|
73,928
|
Cash and cash
equivalents (bank
overdraft) end of period
|
(85,918)
|
66,682
|
(85,918)
|
66,682
|
SOURCE Richelieu Hardware Ltd.