STRONG PERFORMANCE IN THE U.S.
MANUFACTURERS MARKET
HIGHLIGHTS OF THE THIRD QUARTER ENDED AUGUST 31, 2024
- Sales of $467.7 million,
up 1.9%, including $264.6 million in
Canada and US$148.4 million in the
United States, up 4.8% ($US).
- EBITDA of $53.0 million -
EBITDA margin of 11.3%.
- Net income attributable to shareholders of $22.7 million, or $0.41 per diluted share.
- Adjusted cash flows from operating activities of
$42.7 million.
- Agreements in principle signed for four new acquisitions
in Canada and the U.S.
NINE-MONTH PERIOD
- Sales of $1.36 billion, up
1.6%, of which $773.0 million in
Canada and US$428.8 million in the
United States.
- EBITDA of 147.2M$ - EBITDA margin of 10.9%.
- Net income attributable to shareholders of $61.4 million, or $1.09 per diluted share.
- Adjusted cash flows from operating activities of
$122.7 million.
- Healthy and solid financial situation as at August 31, 2024 with working capital of
$632.0 million (ratio of 3.5:1).
Quarterly dividend of $0.15
per share payable on November 7, 2024, to shareholders
registered as of October 24, 2024.
MONTREAL, Oct. 10,
2024 /CNW/ - (TSX: RCH) "Richelieu continued to increase its sales in
the third quarter and maintained a strong financial position. The
1.9% rise in sales is all the more appreciable given the current
market context and reflects the substantial increase of 7.5% ($US)
to manufacturers in the United
States and 0.5% in our market in Canada, while our sales to retailers and
renovation superstores decreased by 16.8%," said Richard Lord, President and Chief Executive
Officer.
PERSPECTIVES – " We believe that the housing
shortage currently affecting North
America will present promising opportunities for
Richelieu. Furthermore, although
the renovation market is currently slowing down, we expect it to
regain momentum in the coming months, leading to increased demand
for our products and services. Sectors such as kitchen cabinets,
closets, space planning, and commercial renovations are
particularly promising and will continue to be crucial for our
future growth. We are well positioned with our North American
network of 112 strategically located centres, a business model that
is well adapted to the needs of our customers, our offer which is
unique due to its great diversity and innovative aspect, and a
distinctive value-added service that is effectively complemented by
our trilingual website richelieu.com. Our expert team is mobilized
to seize the opportunities," added Mr. Lord.
CONTINUATION OF THE ACQUISITION STRATEGY AND OPTIMIZATION OF
THE NORTH AMERICAN DISTRIBUTION CENTRE NETWORK
Richelieu is continuing to
integrate the three acquisitions made since the beginning of the
financial year, namely Allegheny Plywood (Pennsylvania, Ohio) and Rapid Start (Ohio) as well as Olympic Forest Products
(Ontario) and expects to close
four new acquisitions in Canada
and the United States for which
the agreements in principle were signed in the third quarter. In
addition, as part of its distribution network optimization, the
Corporation consolidated two of its distribution centres in the
New York City area and on the West
Coast of Florida during the
quarter.
OPERATING RESULTS FOR THE THIRD QUARTER AND FIRST NINE MONTHS
ENDED AUGUST 31, 2024
The following table provides an overview of Richelieu's sales in its two main markets for
the quarters ended August 31, 2024
and 2023 :
Quarters ended
August 31
|
2024
|
2023
|
∆ %
|
(in millions of
dollars, except exchange rates)
|
Total
|
Internal
|
Acquisitions
|
Consolidated
|
467.7
|
459.0
|
1.9
|
(1.3)
|
3.2
|
Manufacturers
|
415.3
|
396.0
|
4.9
|
1.2
|
3.7
|
Retailers
|
52.4
|
63.0
|
(16.8)
|
(16.8)
|
—
|
Canada
|
264.6
|
270.1
|
(2.0)
|
(3.5)
|
1.5
|
Manufacturers
|
221.9
|
220.8
|
0.5
|
(1.4)
|
1.9
|
Retailers
|
42.7
|
49.3
|
(13.4)
|
(13.4)
|
—
|
United States in
US$
|
148.4
|
141.6
|
4.8
|
(0.6)
|
5.4
|
Manufacturers
|
141.3
|
131.4
|
7.5
|
1.8
|
5.7
|
Retailers
|
7.1
|
10.2
|
(30.4)
|
(30.4)
|
—
|
United States in
CA$
|
203.1
|
188.9
|
7.5
|
|
|
Average exchange
rates
|
1.369
|
1.333
|
|
|
|
For the third quarter ended August 31,
2024, consolidated sales were $467.7M, compared to $459.0M for the third quarter of 2023, an
increase of $8.7M, or 1.9%, resulting
from a positive contribution from the acquisitions of 3.2% and an
internal decrease of 1.3%. In currency comparable to that of the
third quarter of 2023, the increase in consolidated sales would
have been 0.8% for the quarter ended August
31, 2024.
Operating expenses excluding amortization totalled
$414.8M, representing 88.7% of sales,
compared to $398.0M, or 86.7% of
sales, for the same period in 2023. The increase in monetary terms
and as a percentage of sales reflects the growth in sales and
higher costs of goods sold in certain product categories, primarily
sourced from Asia, along with
operating expenses related to consolidation and expansion projects
that are still in the start-up phase.
Earnings before income taxes, interest, and amortization
(EBITDA) was $53.0M, down
$8.0M or 13.2% from the corresponding
quarter of 2023, mainly as a result of lower gross margin caused by
inventories at costs higher than current purchasing costs and the
drop in selling prices of certain products, plus the temporary
increase in some operating expenses resulting from consolidation
and expansion projects. As a result, the EBITDA margin was 11.3%,
compared with 13.3% for the corresponding quarter of 2023.
Amortization expense for the third quarter of
2024 amounted to $17.4M, up
$1.7M over the corresponding period
of 2023, as a result of the increase in property, plant and
equipment, and right-of-use assets stemming from expansion and
modernization projects completed in 2023 and early this year.
Net financial costs were $3.0M
for this quarter of 2024, compared to $3.1M in 2023, a decrease of $0.1M.
Net earnings were $24.0M, a
decrease of 21.8% from the corresponding quarter of 2023. Including
non-controlling interests, net earnings attributable to
shareholders of the Corporation were $22.7M, a decrease of 23.9% from Q3 2023. Net
earnings per share were $0.41,
basic and diluted, compared to $0.53,
basic and diluted, for Q3 2023, a decrease of 22.6%.
Cash flow from operating activities, before net change in
non-cash working capital balances, was $42.7M or $0.76 per
diluted share compared to $49.8M or
$0.88 per diluted share for the third
quarter of 2023. This 13.6% decrease mainly reflects the decrease
in net earnings. The net change in non-cash working capital items
used cash flows of $7.5M, reflecting
the changes in accounts receivable and payable of $23.7M, while inventories used cash flows of
$16.2M. As a result, operating
activities provided a cash inflow of $50.2M, compared to a cash inflow of
$104.8M in Q3 2023.
In the first nine months of 2024, consolidated sales
reached $1.4B, up $21.9M or 1.6% over the first nine months of
2023, of which 2.4% from acquisitions and 0.8% from an internal
decrease. In currency comparable to that of the corresponding
period of 2023, the increase in consolidated sales would have been
1.2%.
Operating expenses excluding amortization totalled
$1.21B, representing 89.1% of sales,
compared to $1.16B, or 87.1% of
sales, for the same period in 2023. This variation in monetary
terms and as a percentage of sales reflects the slight increase in
sales, the higher costs of goods sold, as well as the costs
associated with projects in the start-up phase.
EBITDA was $147.2M, down
$24.4M or 14.2% from the
corresponding nine-month period of 2023 and net earnings
attributable to shareholders of the Corporation were
$61.4M, down 26.0% from the prior
year. Net earnings per share were $1.10 basic and $1.09 diluted, compared to $1.49 basic and $1.47 diluted for the same period of 2023,
representing a decrease of 26.2% and 25.9% respectively.
Cash flow from operating activities, before net change in
non-cash working capital balances, was $122.7M or $2.18
per diluted share compared to $141.2M
or $2.51 per diluted share for the
first nine months of 2023. The net change in non-cash working
capital items used cash flows of $16.3M, mainly reflecting the change in accounts
receivable, inventories, and other items which used cash flows of
$19.9M, while accounts payable
represented a cash inflow of $3.6M.
As a result, operating activities generated a cash inflow of
$106.4M, compared to a cash
inflow of $198.0M in the first nine
months of 2023.
FINANCIAL POSITION
Total assets were $1.37B as
at August 31, 2024, compared to
$1.31B as at November 30, 2023, an increase of 4.5%. Current
assets increased by 3.5% or $29.8M
from November 30, 2023. Non-current
assets increased by 6.5% mainly due to the addition of right-of-use
assets. As at August 31, 2024, the
Corporation had a working capital of $632.0M, for a ratio of 3.5:1, compared to
$621.8M (ratio of 3.6:1) as at
November 30, 2023, and an average
return on shareholders' equity of 10.0%.
SHARE CAPITAL
As at August 31, 2024, the
Corporation's share capital consisted of 55,722,695 common shares
[56,088,365 common shares as at November 30,
2023]. For the three and nine-month periods ended
August 31, 2024, the weighted average
number of diluted shares outstanding was 55,971,750 and 56,260,000
[56,346,260 and 56,225,410 in 2023].
DIVIDENDS
On October 10, 2024, the Board of Directors approved the
payment of a quarterly dividend of 0.15$ per share to shareholders
of record as at October 24, 2024, payable on November 7,
2024. The declared dividend is designated as an eligible dividend
under the Income Tax Act of Canada.
MAIN TRADEMARKS
PROFILE AS AT AUGUST 31, 2024
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 cabinets,
storage and closets, home furnishing and office furniture
manufacturers, residential and commercial woodworkers, doors and
windows, 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 145,000 different items targeted
to a base of more than 120,000 customers who are served by 112
centres in North America – 48
distribution centres in Canada, 61
in the United States and three
manufacturing plants in Canada,
specifically, Les Industries Cedan Inc., Menuiserie des Pins Ltée
and USIMM UNIGRAV Inc., which manufacture a variety of veneer
sheets and edge banding products, a broad selection of decorative
moldings 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 assets, 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 ended August
31, 2024 will be available on SEDAR+ at www.sedarplus.com
and on the Corporation's website at www.richelieu.com.
OCTOBER 10,
2024, CONFERENCE CALL AT 2:30 P.M. (EASTERN
TIME)
|
|
Financial analysts and
investors interested in participating in the Corporation's earnings
conference call, scheduled for October 10, 2024, at 2:30 p.m.,
can dial 1-888-510-2154 a few minutes before the start of
the call. For those unable to participate in real-time, a recording
will be available starting October 10, 2024, at 5:45 p.m.
until midnight on October 17, 2024. Simply dial
1-888-660-6345 and enter the access code: 60070# to
access the recording. Members of the media are invited to listen
in.
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|
|
SOURCE Richelieu Hardware Ltd.