Boucherville (Québec), April 1, 2020 – Uni-Select Inc. (TSX: UNS) ("Uni-Select" or the "Corporation") today provided an update regarding its operations, given the recent developments in the COVID-19 global pandemic.
“Our first priority is always to ensure the health, safety and welfare of our 6,000 employees and customers and this is even more true during this crisis,” stated Brent Windom, President and Chief Executive Officer of Uni-Select. “As such, we have been strictly adhering to health authorities and government guidelines, with stringent protocols for social distancing and hygiene precautions, as well as telecommuting, whenever possible. We have a responsibility to provide essential services during these difficult times, but we nonetheless expect demand to experience a marked slowdown given travel restrictions and stay at home guidelines. These are certainly exceptional times which command exceptional measures but the automotive aftermarket has been resilient in the past and we are convinced it won’t be any different this time.”
Uni-Select is taking actions to contribute to the continued mobility of fellow citizens and organisations, especially those who provide essential services. We are working closely with customers to meet their changing needs and have taken prudent action to ensure business continuity and reorganize operations promptly. Recent state of emergency or shutdown declarations by several governments in Canada, the U.S. and the U.K. are having a material impact on Uni-Select’s operations. However, in certain of those jurisdictions, some or all of Uni-Select’s operations are permitted to continue as essential services.
Uni-Select remains in operation where appropriate and permitted, and has reorganized to focus on functions that are critical to essential services leaving a limited number of sites in operation in Canada, the U.S. and the U.K., whether distribution centers or corporate stores. As of this date, this reorganization has resulted in approximately 50% of employees being furloughed and 33% of the sites being temporarily closed. We also have 28% of the sites on reduced hours and 7% operating with very limited activities for the essential services.
In addition, work hours have been reduced by 20% for all employees who remain at work to support current operations and the Board of directors reduced its members’ remuneration by 25% effective from Jan 1st, 2020 until June 30, 2020.
The Corporation will continue to monitor announcements of governmental assistance programs in connection with the COVID-19 crisis, and will seek to benefit from such programs where applicable and appropriate.
Uni-Select is actively managing its liquidity and will provide an update regarding the operational and financial impacts of COVID-19 during its first quarter fiscal 2020 earnings call, to be held on May 14, 2020.
Risks Relating to COVID-19
The extent to which the COVID-19 pandemic impacts Uni-Select’s business, including its operations and the market for its securities, will depend on future developments, which are highly uncertain and cannot be predicted at this time, and include the duration, severity and scope of the pandemic and the actions taken to contain or treat the outbreak. Even at its current scope, together with measures that have been taken globally to counteract it, the COVID-19 pandemic could materially and adversely impact Uni-Select’s business, financial condition and results of operations including, without limitation, through a major decline in economic activity in North America and the United Kingdom resulting in a decline in demand for Uni-Select’s products and services, compromised employee health and workplace productivity, government-ordered business closures and threats to the business continuity of Uni-Select’s stores, suppliers, customers and/or partners. These impacts could in turn, amongst other things, negatively impact Uni-Select’s liquidities and ability to continue to pay dividends and/or remain in compliance with covenants under its Syndicated Credit Agreement.
With over 6,000 employees in Canada, the U.S. and the U.K., Uni-Select is a leader in the distribution of automotive refinish and industrial coatings and related products in North America, as well as a leader in the automotive aftermarket parts business in Canada. Uni-Select is headquartered in Boucherville, Québec, Canada, and its shares are traded on the Toronto Stock Exchange (UNS).
In Canada, Uni-Select supports over 16,000 automotive repair and collision repair shops and more than 4,000 shops through its automotive repair/installer shop banners and automotive refinish banners. Its national network includes over 1,000 independent customer locations and more than 75 company-owned stores, many of which operate under the Uni-Select BUMPER TO BUMPER®, AUTO PARTS PLUS® and FINISHMASTER® store banner programs.
In the United States, Uni-Select, through its wholly-owned subsidiary FinishMaster, Inc., operates a national network of over 175 automotive refinish company-owned stores under the FINISHMASTER® banner, which supports over 30,000 customers annually and is the primary supplier to more than 5,500 collision repair centre customers.
In the U.K. and Ireland, Uni-Select, through its Parts Alliance group of subsidiaries, is a major distributor of automotive parts supporting over 23,000 customer accounts with a network of over 175 company-owned stores.
CAUTION REGARDING FORWARD-LOOKING INFORMATION
Certain statements made in this press release are forward-looking statements. Forward-looking statements are typically identified by the words assumption, goal, guidance, objective, outlook, project, strategy, target and other similar expressions or future or conditional verbs such as aim, anticipate, believe, could, expect, intend, may, plan, seek, should, strive and will. Forward-looking statements in this press release include statements relating to our continued operation as an essential service and potential layoffs or reduction in work hours of employees. All such forward‑looking statements are made pursuant to the “safe harbour” provisions of applicable Canadian securities laws.
Forward-looking statements are, by their very nature, subject to inherent risks and uncertainties and are based on several assumptions, both general and specific, which may cause expressed expectations to be significantly different from those listed or implied within this press release and our business outlook, objectives, plans and strategic priorities may not be achieved. In particular, Uni-Select is presently subject to significant risks relating to the COVID-19 outbreak. As a result, we cannot guarantee that any forward-looking statement will materialize, and we caution you against relying on any of these forward‑looking statements. The forward‑looking information contained herein is made as of the date of this press release, and Uni-Select does not undertake to publicly update such forward-looking information to reflect new information, subsequent or otherwise, unless required by applicable securities laws.