10/10/2020 | 04:05pm EDT

Press release

for immediate release

Solid performance in third quarter 2020 for Richelieu.

Two new acquisitions in Canada and the U. S.

Five acquisitions since the beginning of the year,

adding over $70 million in annual sales.

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  • Total salesamounted to $311.2 million in the third quarter ended August 31, 2020, up 15.6% over the third quarter of 2019. For the first nine months of the fiscal year, sales totalled $808.8 million, up 4.1%.
  • EBITDAincreased 44.8% to $49.1 million in the third quarter and the EBITDA margin improved to 15.8% from 12.6% in Q3 2019. The EBITDA margin for the first nine months was 13.3%, up from 11.5% for the first nine months of 2019, and EBITDA was $107.7 million, up 20.8%.
  • Diluted net earnings per shareincreased 56.3% to $0.50 for the third quarter. They were $1.03 for the first nine months, up 24.1%.
  • Sound and solid financial positionwith $74.5 million in cash and $376.2 million in working capital, up 12.1% (3.6:1 ratio).
  • A quarterly dividendof $0.0667 per share was declared.
    _____________________________________________________________________________
    Montreal, October 8, 2020 – – “Third quarter performance was very satisfactory for Richelieu (RCH: TSX), notably in terms of profitability and expansion. Total sales increased by 15.6%, of which 6.9% from internal growth and 8.7% from acquisitions. Third quarter sales increased by 82.3% in the hardware retailers and renovation superstores market, of which 36.0% is attributable to the Mibro acquisition completed in the first quarter and 46.3% to a strong increase in demand and higher cyclical sales. Similarly, our EBITDA margin improved significantly to 15.8% and our diluted net earnings per share increased to 56.3%. These results notably reflect our One-stopshop approach, the diversification of our market segments and our operational agility, which allows us to react quickly to current market conditions,” said Richard Lord, President and Chief Executive Officer.

“We acquired two new distributors of specialty hardware in the third quarter, for a total of five since the beginning of the year, thereby bringing additional annual sales of over $70 million. Central Wholesale Supply in Richmond, Virginia, which we purchased on June 29, gave us access to a new geographic market. It was followed by Lion Hardware on August 4. This distributor in Saint- Jacques, New Brunswick, serves a clientele of windows and doors manufacturers in eastern Canada. It adds to our offerings and customer base in this market segment, in which we had already acquired two distributors in 2019. This completes our Canadian coverage of this market segment.

As the health and safety of our employees and partners remain our top priority, in the current pandemic environment, we continue to rigorously apply the measures implemented by the relevant authorities. In addition, we still have some 600 of our employees who continue to work from home. With Richelieu’s healthy and solid financial position, we are well positioned to pursue our growth strategy by constantly introducing innovations to meet customer needs and anticipate their expectations and seizing acquisition opportunities that meet our criteria. Our innovation and acquisition strategies remain our two main drivers for long-term growth and value creation,” concluded Mr. Lord.

RICHELIEU – Press Release

ANALYSIS OF OPERATING RESULTS FOR THE THIRD QUARTER AND FIRST NINE MONTHS ENDED AUGUST 31, 2020, COMPARED TO THE THIRD QUARTER AND FIRST NINE MONTHS ENDED AUGUST 31, 2019

Third-quarter consolidated sales amounted to $311.2 million, compared to $269.2 million for the corresponding quarter of 2019, an increase of $42.0 million or 15.6%, of which 6.9% from an internal growth and 8.7% from acquisitions. It should be noted that this quarter had one additional business day than the third quarter of 2019. At comparable exchange rates to the third quarter of 2019, consolidated sales increase would have been 15.0% for the quarter ended August 31, 2020.

Richelieu achieved sales of $246.5 million in the manufacturers market, compared to $233.8 million for the third quarter of 2019, an increase of $12.7 million or 5.4%, of which 0.9% from an internal growth and 4.5% from acquisitions. Sales to hardware retailers and renovation superstores stood at $64.7 million, up $29.3 million or 82.8% over the third quarter of 2019, of which 46.3% from internal growth and 36.5% from acquisitions. This substantial increase in sales is attributable to the favourable fallout from strong demand in the renovation market in the context of the COVID-19 pandemic.

In Canada, Richelieu recorded sales of $203.0 million, an increase of $23.1 million or 12.8% over the third quarter of 2019, of which 8.2% from internal growth and 4.6% from acquisitions. Sales to manufacturers amounted to $154.3 million, compared to $148.1 million for the third quarter of 2019, an increase of 4.2%, of which 1.1% from an internal growth and 3.1% from acquisitions. Sales to hardware retailers and renovation superstores reached $48.7 million, up $16.8 million or 52.7% over the corresponding quarter of 2019, of which 40.7% from an internal growth and 12.0% from acquisitions. This significant increase is the result of major growth in the renovation market in Canada as well as higher cyclical sales than in the corresponding quarter of 2019.

In the United States, sales totalled US$80.6 million, compared to US $67.5 million for the third quarter of 2019, up US$13.1 million or 19.3%, of which 2.7% from internal growth and 16.6% from acquisitions. Sales to manufacturers amounted to US$68.7 million, compared to US$64.8 million, an increase of 6.0% over the third quarter of 2019, of which 7.1% growth from acquisitions and 1.1% from internal decrease . Sales in US$ to hardware retailers and renovation superstores reached $11.9 million, compared to $2.7 million for the corresponding quarter of 2019, an increase of $9.2 million, up 340.7% from the corresponding quarter of 2019, including 93.3% from an internal growth and 247.4% from acquisitions. As in Canada, the renovation market in the United States has been growing strongly, resulting in a major increase in sales in this market. The Company also benefited in the quarter from higher cyclical sales compared to those achieved during the corresponding period of 2019. Total U.S. sales in Canadian dollars stood at $108.2 million, compared to $89.3 million year over year, an increase of 21.1%. They accounted for 34.8% of consolidated sales for the third quarter of 2020, compared to 33.2% of consolidated sales for the third quarter of 2019.

For the first nine months, consolidated sales reached $808.8 million, an increase of $32.1 million or 4.1% over the first nine months of 2019, of which 7.4% growth from acquisitions and 3.3% from internal decrease. At comparable exchange rates to the first nine months of 2019, consolidated sales increase would have been 3.6%.

Sales to manufacturers reached $663.9 million, compared to $664.4 million for the first nine months of 2019, a decrease of $0.5 million or 0.1%, of which 4.5% growth from acquisitions and 4.6% from internal decrease. Sales to hardware retailers and renovation superstores grew by 29.0% or $32.6 million to total $144.9 million.

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RICHELIEU – Press Release

In Canada, Richelieu recorded sales of $514.9 million, compared to $506.7 million for the first nine months of 2019, up by $8.2 million or 1.6%, of which 4.8% growth from acquisitions and 3.2% from internal decrease. Sales to manufacturers reached $406.4 million, down by $11.5 million or 2.8%, of which 4.1% growth from acquisitions and 6.9% from internal decrease. Sales to hardware retailers and renovation superstores reached $108.5 million, compared to $88.8 million, up $19.7 million or 22.2% over the first nine months of 2019.

In the United States, the Corporation recorded sales of US$217.4 million, compared to US$202.8 million for the first nine months of 2019, an increase of US$14.6 million or 7.2%, of which 11.9% growth from acquisitions and 4.7% from internal decrease. Sales to manufacturers totalled US$190.4 million, compared to US$185.1 million, an increase of US$5.3 million or 2.9% over the first nine months of 2019, of which 5.2% resulted from acquisitions and 2.3% from internal decrease. Sales to hardware retailers and renovation superstores were up 52.5% from the corresponding period of 2019. Total U.S. sales in Canadian dollars amounted to $293.9 million, compared to $270.0 million for the corresponding nine months of 2019, an increase of 8.8%. They accounted for 36.3% of consolidated sales for the first nine months of 2020, compared to 34.8% of the period consolidated sales for the first nine months of 2019.

Third quarter earnings before income taxes, interest and amortization (“EBITDA”) reached $49.1 million and was up $15.2 million or 44.8% over the third quarter of 2019, resulting from significant increase in sales in the retailers market together with actions to reduce costs and government subsidies. Gross margin remained stable from the third quarter of 2019. EBITDA margin stood at 15.8%, compared to 12.6% for the corresponding quarter of 2019.

Amortization expense for the third quarter of 2020 amounted to $8.8 million, up $1.2 million compared to the corresponding quarter of 2019. Income tax expense amounted to $10.8 million, up $3.8 million from the third quarter of 2019. Financial costs amounted to $0.6 million.

For the first nine months earnings before income taxes, interest and amortization (“EBITDA”) totalled $107.7 million, up $18.5 million or 20.8% over the first nine months of 2019. The gross margin remained stable with the corresponding nine-month period of 2019. As for the EBITDA margin, it stood at 13.3%, compared to 11.5% for the first nine months of 2019 as a result of cost control measures.

Amortization expense for the first nine months of 2020 amounted to $25.3 million, up $3.9 million compared to the same period of 2019, resulting from the increase in the amortization of intangible assets and right-to-use assets mainly relating to business acquisitions made in fiscal 2019 and in 2020. Income tax expense amounted to $22.0 million, up $4.1 million from the first nine months of 2019. Financial costs amounted to $2.1 million for the first nine months of 2020.

Third quarter net earnings grew 56.3%. Including non-controlling interests, net earnings attributable to shareholders of the Corporation amounted to $28.7 million, up 56.6% over the third quarter of 2019. Net earnings per share amounted to $0.51 basic and $0.50 diluted, compared to $0.32 basic and diluted for the third quarter of 2019, an increase of 59.4%.

Comprehensive income amounted to $20.9 million, including a negative adjustment of $7.9 million on translation of the financial statements of the United States subsidiary, compared to $16.0 million for the third quarter of 2019, including a negative adjustment of $2.4 million on translation of the financial statements of the United States subsidiary.

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Richelieu Hardware Ltd. published this content on 08 October 2020 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 10 October 2020 20:04:03 UTC

All news about RICHELIEU HARDWARE LTD.

Sales 2020 1 089 M
829 M
829 M
Net income 2020 73,0 M
55,6 M
55,6 M
Net Debt 2020 20,5 M
15,6 M
15,6 M
P/E ratio 202030,3x
Yield 20200,51%
Capitalization 2 227 M
1 695 M
1 696 M
EV / Sales 20202,06x
EV / Sales 20211,83x
Nbr of Employees
Free-Float92,1%

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