6 acquisitions completed during financial
year and 2 subsequently
Highlights for Q4 ended November 30,
2023
- Sales of $453.6M.
- EBITDA of $58.8M - EBITDA
margin of 13.0%.
- Net earnings attributable to shareholders of
$28.5M, or $0.51 per diluted share.
- Cash flows from operating activities of $72.7M.
2023 financial year
- Sales of $1.8B.
- EBITDA of $230.4M - EBITDA
margin of 12.9%.
- Net earnings attributable to shareholders of
$111.5 M, or $1.98 per diluted share.
- Cash flows from operating activities of $270.7M.
- Sound financial position as at November 30, 2023, with a working capital
of $621.8M (ratio 3.7 : 1).
Subsequent to November 30,
2023: closing of two new acquisitions, one in
Ontario and one in Ohio.
MONTREAL, Jan. 18,
2024 /CNW/ - "Richelieu posted solid results in the fourth
quarter with sales of $453.6 million, down slightly by 0.8%,
substantially comparable to those of the corresponding quarter of
2022, which posted a 15% increase in a market favorably impacted by
the pandemic. Our performance attests to the strength and expertise
of our team, our ability to differentiate ourselves through
outstanding customer service, and to make growth-enhancing
acquisitions while pursuing innovation for our customers. For the
12 months of 2023, we are satisfied with our sales of $1.8 billion, in line with those of 2022. Despite
the return to pre-pandemic levels of certain operating expenses and
charges related to major expansion projects in our network, we
achieved good net earnings and our financial position remains
solid. The six acquisitions closed in 2023 added to the four
completed in 2022 represent additional annual sales of $152 million. Richelieu is solidly positioned to pursue its
strategies and create further value by building on its solid
financial position," mentioned Richard
Lord, President and Chief Executive Officer.
ACQUISITIONS
Richelieu is currently integrating the
acquisitions closed in 2023, namely Unigrav, Usimm,
Quincaillerie Rabel (QC), Trans-World Distributing (NS), Maverick
Hardware (OR) and Westlund Distributing (MN). Subsequent to
November 30, 2023, two new
acquisitions were completed: Olympic Forest, a distributor of
specialized lumber and panel products operating a distribution
centre in Erin, Ontario, and Rapid
Start, a specialty hardware distributor with a distribution centre
in Rittman, Ohio. These two
recent transactions will add approximately $18 million in annual sales.
EXPANSION AND CONSOLIDATION PROJECTS
In order to
continue to seize market growth opportunities and optimize our
operations and customer service, Richelieu has undertaken several expansion
projects over the past two years. Expansion and modernization
projects for centres in the Atlanta, Nashville, Fort Myers, Pompano and
Seattle regions have been
completed. The brand-new Chicago
centre serving the retail market is fully operational, as are the
two new centres in the Minneapolis
and Carlstadt regions. In December
2023, the Calgary expansion
project was implemented with the refitting of two centres into a
single 250,000 sq. ft. building.
ANALYSIS OF OPERATING RESULTS FOR THE YEAR ENDED NOVEMBER 30, 2023, COMPARED WITH THE YEAR ENDED
NOVEMBER 30, 2022
Sales
The following table provides an overview of Richelieu's sales in its two main
markets for the years ended November 30,
2023 and 2022 :
(in millions of dollars
except exchange
rates)
|
|
∆ %
|
2023
|
2022
|
Total
|
Internal
|
Acquisitions
|
Consolidated
|
1,787.8
|
1,802.8
|
(0.8)
|
(2.6)
|
1.8
|
Manufacturers
|
1,539.6
|
1,552.0
|
(0.8)
|
(2.9)
|
2.1
|
Retailers
|
248.2
|
250.8
|
(1.0)
|
(1.1)
|
0.1
|
Canada
|
1,048.1
|
1,074.7
|
(2.5)
|
(4.4)
|
1.9
|
Manufacturers
|
855.7
|
876.6
|
(2.4)
|
(4.7)
|
2.3
|
Retailers
|
192.4
|
198.1
|
(2.9)
|
(2.9)
|
—
|
United States
$US
|
547.5
|
562.5
|
(2.7)
|
(4.4)
|
1.7
|
Manufacturers
|
506.2
|
521.7
|
(3.0)
|
(4.8)
|
1.8
|
Retailers
|
41.3
|
40.8
|
1.2
|
1.2
|
—
|
United States
$CA
|
739.7
|
728.1
|
1.6
|
|
|
Average exchange
rates
|
1.351
|
1.294
|
|
|
|
Consolidated sales reached $1.8
billion, a decrease of $15.0
million or 0.8% over last year, of which 1.8% from
acquisitions and 2.6% from internal decrease. In comparable
currency to the corresponding period of 2022, the decrease in
consolidated sales for the year ended November 30, 2023, would have been 2.6%.
(in millions of
dollars, except per share data)
|
Years ended November
30,
|
2023
|
2022
|
∆ %
|
Sales
|
1,787.8
|
1,802.8
|
(0.8)
|
Operating expenses
excluding amortization
|
1,557.4
|
1,515.3
|
2.8
|
EBITDA
|
230.4
|
287.4
|
(19.8)
|
EBITDA margin
(%)
|
12.9 %
|
15.9 %
|
|
Amortization of
property, plant and equipment and
right-of-use assets
|
50.1
|
38.0
|
31.7
|
Amortization of
intangible assets
|
10.9
|
10.6
|
2.1
|
Net financial
costs
|
13.3
|
7.1
|
85.9
|
|
74.2
|
55.8
|
33.0
|
Earnings before
income taxes
|
156.2
|
231.7
|
(32.6)
|
Income
taxes
|
42.4
|
61.7
|
(31.3)
|
Net
earnings
|
113.8
|
169.9
|
(33.0)
|
|
|
|
|
Net earnings
attributable to:
|
|
|
|
Shareholders of the
Corporation
|
111.5
|
168.4
|
(33.8)
|
Non-controlling
interests
|
2.4
|
1.6
|
50.9
|
|
|
|
|
Net earnings per
share attributable to shareholders of the
Corporation
|
|
|
|
Basic
|
2.00
|
3.01
|
(33.6)
|
Diluted
|
1.98
|
2.99
|
(33.8)
|
Earnings before interest, income taxes and amortization
(EBITDA) totalled $230.4 million, down by $57.0 million or 19.8% over 2022. This can
be explained by the increase in operating costs including external
warehousing resulting from the temporary increase in inventories,
in expenses specific to major expansion projects undertaken during
the 2023 financial year and by the effect of the increase in the US
foreign exchange rate compared to the CA$ currency on the
translation of the operating expenses in US currency. The gross
margin is also slightly down, therefore EBITDA margin stood
at 12.9%, compared with 15.9% for 2022.
Amortization expenses amounted to $60.9 million compared with $48.6 million for 2022, an increase of
$12.3 million, a result of the
increase in property, plant and equipment and right-of-use assets
stemming mainly from recent business acquisitions and expansion and
modernization projects. Net financial costs were $13.3 million compared to $7.1 million, an increase of $6.1 million resulting mainly from the use of
lines of credit and the increase in lease obligations. Income
taxes amounted to $42.4 million, a decrease of $19.3 million over 2022.
Net earnings were down 33.0%. Considering non-controlling
interests, net earnings attributable to shareholders of the
Corporation totalled $111.5 million, a decrease of 33.8% compared
to 2022. Net earnings per share amounted to $2.00 basic and $1.98 diluted, compared with $3.01 basic and $2.99 diluted for 2022, a decrease of 33.6%
and 33.8% respectively.
FOURTH QUARTER ENDED NOVEMBER 30,
2023
Sales
The following table provides an overview of Richelieu's sales in its two main
markets for the quarters ended November 30,
2023 and 2022 :
(in millions of dollars
except exchange rates)
|
|
∆ %
|
2023
|
2022
|
Total
|
Internal
|
Acquisitions
|
Consolidated
|
453.7
|
457.5
|
(0.8)
|
(2.2)
|
1.4
|
Manufacturers
|
393.1
|
397.7
|
(1.2)
|
(2.8)
|
1.6
|
Retailers
|
60.6
|
59.8
|
1.3
|
1.4
|
(0.1)
|
Canada
|
267.5
|
273.5
|
(2.2)
|
(4.0)
|
1.8
|
Manufacturers
|
220.3
|
226.0
|
(2.5)
|
(4.7)
|
2.2
|
Retailers
|
47.2
|
47.5
|
(0.6)
|
(0.8)
|
0.2
|
United States
$US
|
136.3
|
136.4
|
(0.1)
|
(0.9)
|
0.8
|
Manufacturers
|
126.4
|
127.3
|
(0.7)
|
(1.6)
|
0.9
|
Retailers
|
9.9
|
9.1
|
8.8
|
8.8
|
—
|
United States
$CA
|
186.2
|
184.0
|
1.2
|
|
|
Average exchange
rates
|
1.366
|
1.349
|
|
|
|
Fourth-quarter consolidated sales amounted to
$453.6 million, compared with
$457.5 million for the
corresponding quarter of 2022, a decrease of $3.8 million or 0.8%, of which 2.2%
resulting from internal decrease and partially offset by 1.4%
growth from acquisitions. At comparable exchange rates to the
fourth quarter of 2022, the consolidated sales decrease would have
been 1.3% for the quarter ended November 30, 2023.
Earnings before interest, income taxes and amortization
(EBITDA) amounted to $58.8 million compared with $76.7 million in the fourth quarter of 2022,
down 23.3%. The gross margin reduced compared to the previous year
and EBITDA margin stood at 13.0%, compared with 16.8% for
the fourth quarter of 2022, influenced by the return to
pre-pandemic levels of certain operating expenses as well as to
expenses specific to major expansion projects undertaken during the
quarter.
Amortization expenses amounted to $16.4 million compared with $13.1 million for the corresponding quarter
of 2022, an increase of $3.3 million. Net financial costs are
down $0.6 million mainly due to the
significant reduction in line of credit balances. Income
taxes amounted to $10.8 million compared with $15.0 million for the fourth quarter of 2022.
Net earnings were $29.4 million, down by 35.7% over the
corresponding quarter of 2022. Considering non-controlling
interests, net earnings attributable to shareholders of the
Corporation amounted to $28.5 million, down by 36.5% over the fourth
quarter of 2022. Net earnings per share were $0.51 basic and diluted, compared with
$0.80 basic and diluted for the
fourth quarter of 2022.
Cash flows from operating activities (before net
change in non-cash working capital balances) amounted to
$49.3 million or $0.88 per share, compared with $62.2 million or $1.11 per share for the fourth quarter of 2022, a
decrease of 20.7% resulting primarily from net earnings decrease.
Net change in non-cash working capital balances represented a cash
inflow of $23.3 million,
reflecting the change in inventory and accounts receivable of
$25.3 million, whereas the
change in accounts payable and other items used cash flows of
$1.9 million. Consequently,
operating activities provided cash flows of $72.7 million, compared with $3.6 million for the fourth quarter of
2022.
Financing activities used cash flows of $14.3 million, compared with $21.6 million for the fourth quarter of
2022. This change primarily resulted from $4.7 million of issued shares in the fourth
quarter compared to $0.2 million in
the corresponding quarter, and common shares repurchases of
$4.4 million for the fourth
quarter of 2022 while no share repurchases were made in the fourth
quarter of 2023.
Investing activities used cash flows of $19.2 million in the fourth quarter mainly
for the purchase of a building housing USIMM/UNIGRAV operations in
addition to adding storage space, as well as for the acquisition of
various tangible assets related to expansion and construction
projects as well as for the purchase of equipment to maintain and
improve operational efficiency.
FINANCIAL POSITION
Analysis of significant cash flows
(in millions of
dollars)
|
Years closed on
November 30,
|
2023
|
2022
|
Cash flows provided
by (used in):
|
|
|
Operating
activities
|
270.7
|
(32.9)
|
Financing
activities
|
(72.4)
|
(70.0)
|
Investing
activities
|
(61.8)
|
(66.8)
|
Effect of exchange
rate changes on cash and cash equivalents
|
(0.8)
|
(1.1)
|
Net change in cash
and cash equivalents (bank overdraft)
|
135.7
|
(170.7)
|
Net cash and cash
equivalents (net bank overdraft), beginning of
period
|
(112.0)
|
58.7
|
Net cash and cash
equivalents (net bank overdraft), end of
period
|
23.7
|
(112.0)
|
Reconciliation of cash flow from operating activities to
adjusted cash flow from operating activities :
(in millions of
dollars)
|
Years closed on
November 30,
|
2023
|
2022
|
Cash flow from
operating activities
|
270.7
|
(32.9)
|
Net change in
non-cash working capital balances (inflow)
|
(80.2)
|
260.7
|
Adjusted cash flows
from operating activities
|
190.5
|
227.8
|
Operating activities
Cash flows from operating activities (before net change
in non-cash working capital balances) reached $190.5 million or $3.39 diluted per share, compared with
$227.8 million or $4.04 diluted per share for 2022, a decrease of
16.4% mainly reflecting the net earnings decrease. Net change in
non-cash working capital balances represented a cash inflow of
$80.2 million, mainly
representing changes in inventory of $97.1 million whereas accounts receivable,
payable and other items used cash flows of $16.9 million. Consequently, operating
activities generated a cash inflow of $270.7 million compared to a cash outflow of
$32.9 million for 2022.
Financing activities
Financing activities used cash flows of $72.4 million, compared with $70.0 million for 2022. During the year,
Richelieu repaid long-term debt of
$5.3 million, paid lease
obligations of $34.1 million and
issued shares for $8.6 million,
compared to a long-term debt repayment of $5.2 million, lease obligations payments of
$25.9 million and a $6.3 million share issue in 2022. Dividends
paid to shareholders of the Corporation amounted to $33.5 million compared to $29.1 million up 15.3% over 2022. The
Corporation also repurchased common shares for an amount of
$0.8 million compared with
$12.3 million in 2022.
Investing activities
Investing activities used cash flows of $61.8 million, of which $19.7 million for the six business
acquisitions completed in fiscal 2023 and $42.1 million, mainly for equipment to
maintain and improve operational efficiency including additions
resulting from expansion projects and for the purchase of a
building in Drummondville.
Analysis of financial position
(in millions of
dollars, except exchange rates)
|
2023
|
2022
|
∆ %
|
Current
assets
|
859.5
|
910.8
|
(5.6)
|
Non-current
assets
|
455.5
|
373.1
|
22.1
|
Total
|
1,315.0
|
1,283.9
|
2.4
|
Current
liabilities
|
237.7
|
348.2
|
(31.7)
|
Non-current
liabilities
|
169.1
|
115.8
|
46.0
|
Equity attributable
to shareholders of the Corporation
|
904.9
|
817.2
|
10.7
|
Non-controlling
interests
|
3.3
|
2.7
|
22.5
|
Total
|
1,315.0
|
1,283.9
|
2.4
|
Exchange rates on
translation of subsidiaries in the United States
|
1.358
|
1.351
|
|
Assets
Total assets amounted to $1.3
billion as at November 30,
2023, an increase of 2.4 %. Current assets were down
by 5.6% or $51.3 million from
November 30, 2022, mainly resulting from the decrease in
inventories. Non-current assets increased by 22.1% mainly
due to the addition of right-of-use assets and property, plant and
equipment related to lease renewals and expansion projects.
Cash position and long-term debt
(in millions of
dollars)
|
2023
|
2022
|
Current portion of
long-term debt
|
2.9
|
5.2
|
Long-term
debt
|
2.4
|
0.9
|
Total
debt
|
5.3
|
6.1
|
Net cash and cash
equivalents (net bank overdraft)
|
23.7
|
(112.0)
|
Shareholders' equity and share capital
Equity attributable to shareholders of the Corporation
totalled $904.9 million as at
November 30, 2023, compared with $817.2 million as at November 30, 2022,
an increase of $87.7 million.
This increase is mainly due to a rise of $75.8 million in retained earnings, which
amounted to $795.0 million, and
of $11.1 million in share
capital and contributed surplus, while accumulated other
comprehensive income increased by $0.9 million. As at
November 30, 2023, the book value per share was
$16.13, up by 10.1% over
November 30, 2022, and the return on average shareholders'
equity was 12.9%.
As at November 30, 2023, the Corporation's share
capital consisted of 56,088,365 common shares
(55,784,790 shares as at November 30, 2022). In 2023,
upon the exercise of stock options under the stock option plan,
Richelieu issued 323,575 common
shares at an average price of $26.43 (271,000 in 2022 at
an average price of $23.19). The
Corporation granted 306,500 stock options in fiscal 2023 (276,000
in 2022) and cancelled 41,000 (17,125 in 2022). Consequently, as at
November 30, 2023, 1,620,925 stock options were
outstanding (1,679,000 as at November 30, 2022).
DIVIDENDS
On January 18, 2024, the Board of Directors approved the
payment of a quarterly dividend of $0.15 per share to shareholders of record as at
February 1, 2024, payable on
February 15, 2024. The declared
dividend is designated as an eligible dividend within the meaning
of the Income Tax Act (Canada).
MAIN TRADEMARKS
PROFILE AS AT NOVEMBER 30,
2023
Richelieu is a leading North
American importer, manufacturer and distributor 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 its 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 110,000 customers who are served by 112 centres
in North America – 50 distribution
centres in Canada, 59 in
the United States and 3
manufacturing plants in Canada,
specifically, Les Industries Cedan Inc., Menuiserie des Pins Ltée
and USIMM/UNIGRAV, which manufacture a variety of veneer sheets and
edge banding products, a broad selection of decorative mouldings
and components for the window and door industry as well as custom
products, including a 3D scanning centre.
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 net 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.
JANUARY 18,
2024
|
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
January 18, 2024, 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 January 18, 2024 until midnight
on January 25, 2024, by dialing
1-888-259-6562, access code: 153396 #. Members
of the media are invited to listen in.
Photos are available
on www.richelieu.com
|
SOURCE Richelieu Hardware Ltd.