Progress of the Action Plan to Date
1. Closure of 11 stores and one distribution centre resulting in an headcount reduction of 58 people2. Completion of the relocation of US national distribution centre3. Restructuring of operations leading to the elimination of 156 positions
During the last few weeks the Corporation reduced its expenses through these initiatives by approximately $10 million, on an annual basis, of which $5 million will positively affect 2013 results.
Uni-Select is also committed to close 30 stores, another distribution centre and open a new regional distribution centre in the third quarter of 2013.
The Action Plan is in addition to the Network Optimization Plan launched in August 2012 (rationalization and consolidation of distribution network). The annual savings of $20 million expected from the Network Optimization Plan have been realized; unfortunately, the cost reduction stemming from the Network Optimization Plan were largely offset by lower sales in the past three quarters as well as the unfavourable change in the distribution channel mix. These offsetting elements led Uni-Select to implement additional initiatives to improve results.
"With the support of our strong and dedicated team and the help of our advisors, we were able to assess our operations and assets, as well as our potential for growth. We have concluded that the Action Plan is the best alternative to create additional value for our shareholders and offer continued excellent service to our customers." said Richard G. Roy, President and Chief Executive Officer, Uni-Select.
"As we implement these initiatives, we still intend to achieve previously stated goals such as the reduction of indebtedness and carry-out our sales strategy to diversify our market, increase market share and execute accretive acquisitions. FinishMaster and Beck/Arnley are delivering good results on which we plan to capitalize. We are focussed and convinced that we will be able to deliver on expectations and generate beneficial value to all stakeholders. Our search for a new President and COO for our U.S. automotive business is progressing according to our plan and we shortly should be able to make an announcement" added Mr. Roy.
Uni-Select will host a conference call to discuss today's announcement at 1:30 p.m. on July 11, 2013. To join the conference, dial 1 866 696-5910 followed by 5805675.
The information provided in this press release includes some forward-looking information, which includes certain risks and uncertainties, including risks relating to the implementation of the Action Plan resulting from the strategic review process, which may cause the final results to be significantly different from those listed or implied within this news release. For example, the foregoing estimates of cost and inventory reductions may be considered forward-looking information and are based upon certain key assumptions, including (i) the closure, sale or consolidation of the number of stores and distribution centres, and related reduction of headcounts, as planned and within the timeframe contemplated by the Action Plan and (ii) the timely completion of all other components of the Action Plan as planned. Uni-Select cautions that assumptions used to prepare the foregoing estimates, although reasonable at the time they were made, may prove to be incorrect or inaccurate. The foregoing factors could therefore cause the actual cost and inventory reductions to be derived under the Action Plan to differ materially from the amounts set forth in the foregoing estimates. For additional information with respect to risks and uncertainties, refer to the Annual Report filed by Uni-Select with the Canadian securities commissions.