8 acquisitions, including
4
completed in January 2023
Fourth quarter ended November 30,
2022:
- Sales totalled $457.5
million, up 14.9%, including 6.7% from internal growth and
8.2% from acquisitions.
- EBITDA increased 7.5% to $76.7
million.
- Diluted net earnings per share were $0.80.
For Year 2022:
- Sales were $1.8 billion,
up 25.2% %, including 13.4% from internal growth and 11.8% from
acquisitions. 42.2% increase in sales in the United States, representing 40% of total
sales.
- Earnings before interest, income taxes and amortization
(EBITDA) increased to $287.4 million, up 22.6%. The EBITDA margin
was 15.9%.
- Net earnings attributable to shareholders increased by
18.8% to $168.4 million and reached
$2.99 diluted per share, up
19.1%.
- Repurchase of 327,329 common shares for $12.3 million.
- Four acquisitions completed during the year, including
three in the United States and one
in Canada for additional sales of
approximately $125 million on an
annual basis. Four other acquisitions were made in
Canada subsequently to the end of
the fiscal year, in January 2023, for
estimated annual sales of $18
million.
- Sound and robust financial position, with working
capital of $562.5 million (2.6:1
ratio), and a return on average equity of 22.7% as at
November 30, 2022.
Increased dividend by 15.4% to $0.15 per share for the first quarter of
2023.
MONTREAL ,
Jan. 19,
2023 /CNW Telbec/ - "Richelieu (TSX: RCH) has achieved strong
growth in 2022 through the contributions of our recent acquisitions
and our diversified market segments in Canada and the U.S., including our new
specialty markets - thanks also to our ongoing innovation strategy
and the quality of our team's execution. Our sales to
manufacturers were $1.6
billion, up 28.9%, including a 14.2% increase in
Canada and a 49.7% increase (in
U.S. dollars) in the United
States, where our three acquisitions closed in the first
quarter (Compi Distributors, HGH Hardware Supply, and National
Builders Hardware) made a solid contribution to growth. Sales to
retailers totalled $251.5
million, up 6.3%. The increases in EBITDA and the net
earnings reflect the rise in sales and our ongoing efforts to
improve efficiency and control costs," said Richard Lord, president and CEO of Richelieu.
"In addition to the three acquisitions made in the United States, we acquired a specialty
hardware distributor in Canada,
Quincaillerie Deno, last September. In January 2023, we concluded four new acquisitions
that contribute to diversify our offering and our customer base:
Quincaillerie Rabel, a distributor of specialty hardware with a
distribution center in Terrebonne,
QC - Trans-World Distributing, a distributor of industrial
fasteners, with a distribution center in Dartmouth, NS - Unigrav and Usimm, two
companies offering custom products, including a 3D scanning centre,
for the architectural and industrial markets, located respectively
in Drummondville and Montreal, QC. These new transactions will add
approximately $18 million in sales on
an annual basis," added Mr. Lord.
ANALYSIS OF OPERATING RESULTS FOR THE YEAR ENDED NOVEMBER 30, 2022, COMPARED WITH THE YEAR ENDED
NOVEMBER 30, 2021
Consolidated sales
Consolidated sales reached $1.8 billion, an increase of $362.4 million or 25.2% over 2021, of which
13.4% from internal growth and 11.8% from acquisitions. At
comparable exchange rates to 2021, the consolidated sales growth
would have been 23.5% for the year ended
November 30, 2022.
Sales to manufacturers grew to $1.6 billion, compared with $1.2 billion for fiscal 2021, an increase of
$347.5 million or 28.9%, of
which 15.9% from internal growth and 13.0% from acquisitions. These
increases are the result of the sustained demand in the renovation
market as well as higher selling prices. Sales to hardware
retailers and renovation superstores grew by 6.3% or
$14.9 million to total
$251.5 million, entirely from
acquisitions.
In Canada, Richelieu achieved sales of $1.1 billion, compared with $944.8 million for fiscal 2021, up by
$129.9 million or 13.7%, of
which 10.3% from internal growth and 3.4% from acquisitions. Sales
to manufacturers rose to $876.7 million, up by $109.1 million or 14.2%, of which 11.7% from
internal growth and 2.5% from acquisitions. Sales to hardware
retailers and renovation superstores reached $198.0 million, compared with $177.2 million, up by $20.8 million or 11.7% over fiscal 2021, of
which 4.4% from internal growth and 7.3% from acquisitions.
In the United
States, the Corporation recorded sales of
US$562.5 million, compared with
US$395.6 million for fiscal
2021, an increase of US$166.9 million or 42.2%, of which 15.4%
from internal growth and 26.8% from acquisitions. Sales to
manufacturers totalled US$521.2 million, compared with US$348.2 million, an increase of
US$173.0 million or 49.7% over
fiscal 2021, of which 19.4% from internal growth and 30.3%
from acquisitions. Sales to hardware retailers and
renovation superstores were down by 12.9% compared to fiscal 2021.
Considering exchange rates, U.S. sales expressed in Canadian
dollars amounted to $728.1 million, compared with $495.6 million for 2021, an increase of
46.9%. They accounted for 40.4% of consolidated sales in fiscal
2022, whereas they represented 34.4% of the consolidated sales
in fiscal 2021.
EBITDA and net earnings
Earnings before interest, income taxes and amortization
(EBITDA) totalled $287.4 million, up by $53.0 million or 22.6% over 2021 resulting
mainly from the increase in sales. The gross margin remained stable
compared to the previous year and EBITDA margin stood at
15.9%, compared with 16.3% for 2021.
Amortization expenses amounted to $48.6 million compared with $37.0 million for 2021, an increase of
$11.6 million resulting from the
increase in the amortization of intangible assets and right-of-use
assets mainly relating to business acquisitions as well as lease
renewals and expansions made during the previous periods. Financial
costs were $7.1 million compared with
$2.7 million, an increase of
$4.4 million resulting mainly from
the use of lines of credit and the increase in lease obligations.
Income taxes amounted to $61.7 million, an increase of $9.3 million over 2021.
Net earnings rose 19.4%. Considering non-controlling
interests, net earnings attributable to shareholders of the
Corporation totalled $168.4 million, an increase of 18.8%
compared to 2021. Net earnings per share amounted to
$3.01 basic and $2.99 diluted, compared with $2.54 basic and $2.51 diluted for 2021, an increase of 18.5%
and 19.1% respectively.
FOURTH QUARTER ENDED
NOVEMBER 30, 2022
Fourth-quarter consolidated sales amounted to
$457.5 million, compared with
$398.2 million for the
corresponding quarter of 2021, an increase of $59.3 million or 14.9%, of which 6.7%
resulting from internal growth and 8.2% from acquisitions. At
comparable exchange rates to the fourth quarter of 2021, the
consolidated sales growth would have been 11.7% for the quarter
ended November 30, 2022.
Richelieu achieved sales of
$398 million in the manufacturers market, compared with
$338.9 million for the fourth
quarter of 2021, an increase of $59.1 million or 17.4%, of which 7.8% from
internal growth and 9.6% from acquisitions. Sales to hardware
retailers and renovation superstores stood at $59.5 million, equivalent to the fourth
quarter of 2021.
In Canada, Richelieu recorded sales of $273.5 million, an increase of $13.4 million, or 5.2%, over the fourth
quarter of 2021. Sales to manufacturers amounted to
$226.0 million, an increase of
5.0% of which 4.5% resulting from internal growth and 0.5% from
acquisitions. Sales to hardware retailers and renovation
superstores reached $47.5 million, up by $2.6 million or 5.8%.
In the United
States, sales totalled US$136.4 million, compared with US$109.9 million for the fourth quarter of
2021, an increase of US$26.5 million or 24.1%, of which 2.8%
resulting from internal growth and 21.3% from acquisitions. Sales
to manufacturers amounted to US$127.5 million, an increase of
US$29.0 million or 29.4% over
the fourth quarter of 2021. Sales to hardware retailers and
renovation superstores were down by US$2.5 million, or 21.9%, from the
corresponding quarter of 2021. Considering exchange rates, total
U.S. sales expressed in Canadian dollars stood at $184.0 million, an increase of 33.2%. They
accounted for 40.2% of consolidated sales for the fourth quarter of
2022, whereas they had represented 34.7% of the period's
consolidated sales for the fourth quarter of 2021.
Earnings before interest, income taxes and amortization
(EBITDA) amounted to $76.7 million compared with $71.3 million in the fourth quarter of 2021,
up 7.5%. The gross margin remained stable compared to the previous
year and EBITDA margin stood at 16.8%, compared with 17.9%
for the fourth quarter of 2021, influenced by slightly lower margin
of certain acquisitions.
Amortization expenses amounted to $13.1 million compared with $10.6 million for the corresponding quarter
of 2021, an increase of $2.5 million. Financial costs are up
$2.1 million mainly due to the use of
credit lines and the increase in lease obligations. Income
taxes amounted to $15.0 million, compared with $15.1 million for the fourth quarter of 2021.
Net earnings were up by 2.0%. Considering
non-controlling interests, net earnings attributable to
shareholders of the Corporation amounted to $44.9 million, up by 0.8% over the fourth
quarter of 2021. Net earnings per share were $0.80 basic and diluted, compared with
$0.80 basic and $0.79 diluted for the fourth quarter of 2021.
Cash flows from operating activities (before net change
in non-cash working capital balances) amounted to $60.4 million or $1.07 per share, compared with $55.7 million or $0.99 per share for the fourth quarter of 2021,
an increase of 8.3% resulting primarily from net earnings and items
not affecting cash and cash equivalent increases. Net change in
non-cash working capital balances used cash flows of $58.6 million, reflecting the change in
inventory and accounts receivable of $54.9 million, whereas the change in
accounts payable and other items used cash flows of $3.7 million. Consequently, operating
activities provided cash flows of $1.7 million, compared with $14.1 million for the fourth quarter of
2021.
Financing activities used cash flows of $19.7 million, compared with $11.9 million for the fourth quarter of
2021. This change primarily resulted from common shares repurchases
of $4.4 million for the fourth
quarter of 2022 while no share repurchases were made in the fourth
quarter of 2021.
Investing activities used cash flows of $7.6 million in the fourth quarter, of which
$1.8 million for business
acquisitions and $5.8 million
mainly for equipment to maintain and improve operational efficiency
including additions resulting from ongoing expansion projects.
FINANCIAL POSITION
Cash flows from operating activities (before net change
in non-cash working capital balances) reached $224.5 million or $3.98 diluted per share, compared with
$183.0 million or $3.24 diluted per share for 2021, an increase of
22.7% stemming primarily from an increase in net earnings. Net
change in non-cash working capital balances used cash flows of
$260.7 million, mainly
representing changes in inventory of $240.5 million whereas accounts receivable,
accounts payable and other items used cash flows of $20.2 million. Consequently, operating
activities used cash flows of $36.2 million compared with a cash
inflow of $104.4 million for
2021.
Financing activities used cash flows of $66.6 million, compared with $53.7 million for 2021. During the year,
Richelieu repaid long-term debt of
$5.2 million, paid lease
obligations of $25.9 million and
issued shares for $6.3 million,
compared to a long-term debt repayment of $6.4 million, lease obligations payments of
$19.4 million and a $5.2 million share issue in 2021. Dividends
paid to shareholders of the Corporation amounted to $29.1 million compared to $19.4 million up 50.1% over 2021. The
Corporation also repurchased common shares for an amount of
$12.3 million compared with
$13.1 million in 2021.
Investing activities used cash flows of $66.8 million, of which $44.3 million for business acquisitions and
$22.6 million, mainly for
equipment to maintain and improve operational efficiency including
additions resulting from ongoing expansion projects.
Assets
Total assets amounted to $1.3 billion as at
November 30, 2022, compared with $964.2 million as at November 30, 2021.
Current assets increased by 38.2% or $251.6 million from 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 higher cost of
products and easing of the supply chain challenges including the
acceleration of delivery times, especially from Asia. Non-current assets increased by
22.3% mainly due to the business acquisitions.
Cash position and long-term
debt
|
|
|
(in thousands of $)
|
|
|
|
2022
|
2021
|
As at November 30
|
$
|
$
|
Current portion of
long-term debt
|
5,208
|
5,339
|
Long-term
debt
|
859
|
1,100
|
Total debt
|
6,067
|
6,439
|
Cash and cash equivalents and bank
overdraft
|
(111,988)
|
58,707
|
As at November 30, 2022, bank overdraft, net of
cash and cash equivalent, amounted to $112.0 million, compared with cash of
$58.7 million as at
November 30, 2021, the Corporation had a working
capital of $562.5 million
for a current ratio of 2.6 : 1, compared with $456.4 million (3.3:1 ratio) and the
return on average shareholders' equity was 22.7%.
As at November 30, 2022, the Corporation's share
capital consisted of 55,784,790 common shares
(55,841,119 shares as at November 30, 2021). In 2022,
upon the exercise of stock options under the stock option plan,
Richelieu issued 271,000 common
shares at an average price of $23.19 (263,925 in 2021 at
an average price of $19.54). In
addition, 327,329 common shares were repurchased for cancellation
for a cash consideration of $12.3 million in 2022
(316,374 common shares for a cash consideration of $13.1 million in 2021). The Corporation
granted 276,000 stock options in fiscal 2022 (289,000 in 2021) and
cancelled 17,125 (31,875 in 2021). Consequently, as at
November 30, 2022, 1,679,000 stock options were
outstanding (1,691,125 as at November 30, 2021).
Dividends
On January 19, 2023, the Board of Directors approved the
payment of a quarterly dividend of $0.15 per share to shareholders of record as at
February 2, 2023, payable on
February 16, 2023. The declared
dividend is designated as an eligible dividend within the meaning
of the Income Tax Act (Canada).
PROFILE AS AT NOVEMBER 30, 2022
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 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 107 centres
in North America – 48 distribution
centres 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 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 19, 2023
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 19, 2023, 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 19, 2023 until midnight
on January 26, 2023, by dialing
1-888-259-6562, access code: 635654 #. Members of the
media are invited to listen in.
Photos are available on www.richelieu.com
CONSOLIDATED
STATEMENTS OF FINANCIAL POSITION
|
|
|
[In thousands of
dollars]
|
|
|
As at November
30
|
|
|
|
2022
|
2021
|
|
$
|
$
|
ASSETS
|
|
|
Current assets
|
|
|
Cash and cash
equivalents
|
21,220
|
58,707
|
Accounts
receivable
|
222,238
|
199,585
|
Inventories
|
660,242
|
395,464
|
Prepaid
expenses
|
7,071
|
5,423
|
|
910,771
|
659,179
|
Non-current assets
|
|
|
Property, plant and
equipment
|
54,832
|
46,239
|
Intangible
assets
|
66,603
|
53,910
|
Right-of-use
assets
|
116,204
|
87,013
|
Goodwill
|
127,457
|
110,776
|
Deferred
taxes
|
7,998
|
7,063
|
|
1,283,865
|
964,180
|
LIABILITIES AND EQUITY
|
|
|
Current liabilities
|
|
|
Bank
overdraft
|
133,208
|
—
|
Accounts payable and
accrued liabilities
|
169,913
|
155,009
|
Income taxes
payable
|
10,749
|
21,281
|
Current portion of
long-term debt
|
5,208
|
5,339
|
Current portion of
lease obligations
|
29,145
|
21,174
|
|
348,223
|
202,803
|
Non-current liabilities
|
|
|
Long-term
debt
|
859
|
1,100
|
Lease
obligations
|
95,705
|
71,880
|
Deferred
taxes
|
10,052
|
9,868
|
Other
liabilities
|
9,204
|
9,592
|
|
464,043
|
295,243
|
Equity
|
|
|
Share
capital
|
61,829
|
54,610
|
Contributed
surplus
|
8,400
|
7,046
|
Retained
earnings
|
719,185
|
590,522
|
Accumulated other
comprehensive income
|
27,743
|
14,264
|
Equity attributable to
shareholders of the Corporation
|
817,157
|
666,442
|
Non-controlling
interests
|
2,665
|
2,495
|
|
819,822
|
668,937
|
|
1,283,865
|
964,180
|
CONSOLIDATED
STATEMENTS OF EARNINGS
|
|
|
[In thousands of
dollars, except earnings per share]
|
|
|
Years ended
November 30
|
|
|
|
2022
|
2021
|
|
$
|
$
|
Sales
|
1,802,787
|
1,440,416
|
Operating expenses
excluding amortization
|
1,515,345
|
1,206,018
|
Earnings before amortization, financial costs and
income taxes
|
287,442
|
234,398
|
Amortization of
property, plant and equipment and right-
of-use assets
|
38,010
|
29,059
|
Amortization of
intangible assets
|
10,636
|
7,898
|
Financial costs,
net
|
7,144
|
2,700
|
|
55,790
|
39,657
|
Earnings before income taxes
|
231,652
|
194,741
|
Income taxes
|
61,703
|
52,410
|
Net earnings
|
169,949
|
142,331
|
Net earnings attributable to:
|
|
|
Shareholders of the
Corporation
|
168,390
|
141,764
|
Non-controlling
interests
|
1,559
|
567
|
|
169,949
|
142,331
|
Net earnings per share attributable to
shareholders
of the Corporation
|
|
|
Basic
|
3.01
|
2.54
|
Diluted
|
2.99
|
2.51
|
CONSOLIDATED
STATEMENTS OF COMPREHENSIVE INCOME
|
|
|
[In thousands of
dollars]
|
|
|
Years ended
November 30
|
|
|
|
2022
|
2021
|
|
$
|
$
|
Net earnings
|
169,949
|
142,331
|
|
|
|
Other comprehensive income (loss) that will be
reclassified to net
earnings
|
|
|
Exchange differences on
translation of foreign
operations
|
13,479
|
(1,220)
|
Comprehensive income
|
183,428
|
141,111
|
Comprehensive income attributable
to:
|
|
|
Shareholders of the
Corporation
|
181,869
|
140,544
|
Non-controlling
interests
|
1,559
|
567
|
|
183,428
|
141,111
|
CONSOLIDATED
STATEMENTS OF CASH FLOWS
|
|
|
[In thousands of
dollars]
|
|
|
Years ended
November 30
|
|
|
|
2022
|
2021
|
|
$
|
$
|
OPERATING ACTIVITIES
|
|
|
Net earnings
|
169,949
|
142,331
|
Items not affecting
cash and cash equivalent
|
|
|
Amortization of
property, plant and equipment and
right-of-use assets
|
38,010
|
29,059
|
Amortization of
intangible assets
|
10,636
|
7,898
|
Deferred
taxes
|
(594)
|
(1,216)
|
Share-based
compensation expense
|
2,650
|
1,991
|
Financial
costs
|
3,832
|
2,928
|
|
224,483
|
182,991
|
Net change in non-cash
working capital balances
|
(260,652)
|
(78,585)
|
|
(36,169)
|
104,406
|
FINANCING ACTIVITIES
|
|
|
Repayment of long-term
debt
|
(5,152)
|
(6,424)
|
Dividends paid to
Shareholders of the Corporation
|
(29,083)
|
(19,374)
|
Payment of lease
obligations
|
(25,908)
|
(19,446)
|
Other dividends
paid
|
(493)
|
(511)
|
Common shares
issued
|
6,284
|
5,158
|
Common shares
repurchased for cancellation
|
(12,289)
|
(13,094)
|
|
(66,641)
|
(53,691)
|
|
|
|
INVESTING ACTIVITIES
|
|
|
Business
acquisitions
|
(44,255)
|
(49,436)
|
Additions to property,
plant and equipment and
intangible assets
|
(22,578)
|
(17,054)
|
|
(66,833)
|
(66,490)
|
Effect of exchange rate
changes on cash and cash
equivalents
|
(1,052)
|
554
|
|
|
|
Net change in cash and cash
equivalents
|
(170,695)
|
(15,221)
|
Cash and cash
equivalents, beginning of year
|
58,707
|
73,928
|
Cash and cash equivalents and bank overdraft, end
of year
|
(111,988)
|
58,707
|
SOURCE Richelieu Hardware Ltd.