Uni-Select Inc. Announces 2006 Fourth Quarter And Year-End Results

BOUCHERVILLE, QUEBEC -- Uni-Select Inc. (TSX: UNS) announced its fourth quarter and year-end results as at December 31, 2006. Sales for the fourth quarter totalled $279,827,000, a 1.8% increase over sales of $274,928,000 in the fourth quarter of 2005. Sales totalled $1,123,903,000 in 2006, a decrease of 1.4% from sales of $1,139,956,000 in 2005. The US exchange rates negatively impacted the fourth quarter sales by 1.5% and 3.3% for the year. Excluding the foreign exchange effect, sales for the fourth quarter would have been higher by 3.3% and by 1.9% for the year.

Net earnings increased by 17.6% to $16,677,000 or $0.84 per share (earning per share is reported on a diluted basis, except when otherwise specified) in the fourth quarter from $14,186,000 or $0.72 per share in the fourth quarter of 2005. Net earnings for the year were $42,264,000 or $2.14 per share compared to $39,061,000 or $1.99 per share in 2005. Unfavourable exchange rates reduced net profits by $0.01 per share compared to the fourth quarter of 2005 and $0.06 per share for the year.

The Automotive Group USA increased its sales by 6.5% in the fourth quarter of 2006. Sales for the fourth quarter increased from $132,441,000 in 2005 to $141,012,000 in 2006. Excluding the negative impact of the rise in the value of the Canadian dollar, sales (essentially as a result of acquisitions) for the Automotive Group USA increased by 9.9%. Annual revenues for the Group decreased by 0.2% to $567,402,000 from $568,356,000 in 2005. Excluding the negative impact of exchange rate movement, revenues for the Group increased by 6.8% during the year. The operating margin for the Group during the fourth quarter of the year was 7.9% compared to 8.1% in the fourth quarter of 2005. For the year as a whole, operating margin of the Group increased to 6.5% compared to 6.3% in 2005.

The Automotive Group Canada increased year over year sales by 1.4% from the fourth quarter of 2006. Sales for the fourth quarter totalled $120,479,000 compared to $118,873,000 during the same quarter of 2005. This increase is essentially due to acquisitions made during the year and to the transfer of certain operations from the Heavy Duty Group. For the year as a whole, sales for the Group totalled $489,573,000 compared to $497,620,000 in 2005, a decrease of 1.6%. The operating margins of the Group in the fourth quarter were 16.3% compared to 10.8% in the same quarter of 2005. Operating margins in 2006 for the Group were 9.6% compared to 7.5% in 2005.

Sales for the Heavy Duty Group decreased by 22.3% during the fourth quarter to $18,336,000 compared to $23,614,000 during the same quarter in 2005. This decrease is of an organic nature as it reflects the weakness in the sector. Moreover, the postponement of the delivery of wheels from the third quarter to the fourth quarter of 2005 which the Company estimates to be approximately $1.1M and the transfer of certain activities of approximately $1,223,000 to the Automotive Group Canada were also important factors. For the year, total sales decreased by 9.5% from $73,980,000 to $66,928,000. Excluding the sales transferred to the Automotive Group Canada, the decrease would have been of 17.2%. The operating margins of the Group for the fourth quarter were (0.9%) compared to 4.7% in the same quarter last year. In 2006, the operating margins for the Group were (2.9%) compared to 1.6% in 2005.

“Our net earnings for the period attained an historical peak and met our annual objectives. Despite the decline in sales experienced during the year, we improved earnings due to our on-going programs to improve operational efficiencies. In addition to pursuing our expansion program with 16 acquisitions completed during the year combined with our integration programs, Uni-Select continued to adjust its business model to respond to new market trends both in Canada and in the United States,” declared Jacques Landreville, President and Chief Executive Officer. “We are concentrating our effort on new strategies to meet the demands for parts that meet or exceed the specifications of original equipment parts as well as the demand for quality entry-level parts. Our capacity to adapt to new and changing environments which we have demonstrated in the past will guide our success.”

The Board of Directors of Uni-Select Inc. declared a quarterly dividend of $0.1075 per common share payable on April 20, 2007 to shareholders of record as at March 30, 2007.

Uni-Select is Canada’s second largest distributor of automotive replacement parts, equipment, tools and accessories and through Uni-Select USA, Inc.; the company also provides service to customers in the United States where it is the 8th largest distributor. Its subsidiary, Palmar Inc., sells replacement parts, tools and accessories for heavy-duty vehicles and wheels in Canada. The Uni-Select Network includes over 2,033 independent jobbers and services over 3,063 points of sale in Canada and the United States. Uni-Select is headquartered in Montreal. Uni-Select shares (UNS) are traded on the Toronto Stock Exchange (TSX).


CONSOLIDATED EARNINGS
THREE-MONTH AND TWELVE-MONTH PERIODS ENDED DECEMBER 31, 2006 AND 2005
(in thousands of dollars, except earnings per share, unaudited)


4(TH) QUARTER 12 MONTHS
2006 2005 2006 2005
---------------------------------------------------------------------------
$ $ $ $
SALES 279,827 274,928 1,123,903 1,139,956
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Earnings before the
following items 30,545 24,680 81,894 74,231


---------------------------------------------------------------------------
Interest on bank indebtedness 585 170 1,250 421
Interest on long-term debt 1,018 801 3,809 2,957
Interest on merchant members’
deposits in guarantee funds 119 72 360 263
Interest income from cash and
cash equivalent (203) (255) (991) (547)
Interest income from
merchant members (139) (150) (523) (518)
Amortization (Note 2) 2,058 665 8,045 6,705
Loss on disposal of property,
plant and equipment 66 153 70 89
---------------------------------------------------------------------------
3,504 1,456 12,020 9,370
---------------------------------------------------------------------------
Earnings before income taxes
and non-controlling interest 27,041 23,224 69,874 64,861
Income taxes
Current 12,481 4,201 27,568 18,316
Future (2,941) 3,893 (3,028) 4,397
---------------------------------------------------------------------------
9,540 8,094 24,630 22,713
---------------------------------------------------------------------------
Earnings before non-controlling
interest 17,501 15,130 45,244 42,148
Non-controlling interest 824 944 2,980 3,087
---------------------------------------------------------------------------
Net earnings 16,677 14,186 42,264 39,061
---------------------------------------------------------------------------
Basic earnings per share
(Note 3) 0.85 0.72 2.15 2.00
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Diluted earnings per share
(Note 3) 0.84 0.72 2.14 1.99
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Weighted average number of
outstanding shares 19,699,334 19,573,338 19,674,768 19,516,512
---------------------------------------------------------------------------
Number of issued and
outstanding common
shares 19,699,334 19,599,716 19,699,334 19,599,716
---------------------------------------------------------------------------

The accompanying notes are an integral part of the interim consolidated
financial statements.



CONSOLIDATED RETAINED EARNINGS
TWELVE-MONTH PERIODS ENDED DECEMBER 31, 2006 AND 2005
(in thousands of dollars, unaudited)
12 MONTHS
2006 2005
$ $
---------------------------------------------------------------
Balance, beginning of period 220,966 188,159
Net earnings 42,264 39,061
---------------------------------------------------------------
263,230 227,220
Dividends 7,875 6,254
---------------------------------------------------------------
Balance, end of period 255,355 220,966
---------------------------------------------------------------

The accompanying notes are an integral part of the interim
consolidated financial statements.



CONSOLIDATED CASH FLOWS
THREE-MONTH AND TWELVE-MONTH PERIODS ENDED DECEMBER 31, 2006 AND 2005
(in thousands of dollars, except dividends paid on common shares, unaudited)


4(th) QUARTER 12 MONTHS
2006 2005 2006 2005
$ $ $ $

------------------------------------------------------------------------
OPERATING ACTIVITIES
Net earnings 16,677 14,186 42,264 39,061
Non-cash items
Amortization 2,058 665 8,045 6,705
Future income taxes (2,941) 3,893 (3,028) 4,397
Loss on disposal of property, plant
and equipment 66 153 70 89
Non-controlling interest 824 944 2,980 3,087
------------------------------------------------------------------------
16,684 19,841 50,331 53,339
Changes in working capital items (12,969) (5,626) (76) (9,626)
------------------------------------------------------------------------
CASH FLOWS FROM OPERATING
ACTIVITIES 3,715 14,215 50,255 43,713
------------------------------------------------------------------------
INVESTING ACTIVITIES
Temporary investments (6,898) (4,942) (1,955) (4,942)
Business acquisitions (Note 4) (14,869) (7,326) (76,218) (13,034)
Non-controlling interest - (152) - (152)
Advances to merchant members (601) (732) (4,737) (3,406)
Receipts on advances to merchant
members 949 1,087 7,061 4,469
Shares of companies and advances - - - 20
Property, plant and equipment (4,714) (1,451) (9,510) (8,782)
Disposal of property, plant and
equipment 371 - 633 77
------------------------------------------------------------------------
CASH FLOWS FROM INVESTING
ACTIVITIES (25,762) (13,516) (84,726) (25,750)
------------------------------------------------------------------------
FINANCING ACTIVITIES
Bank indebtedness 25,930 1,077 24,914 (1,260)
Due to a joint venturer - - - (2,500)
Balance of purchase price - - - (4,104)
Financing costs - (149) - (288)
Long-term debt 486 700 2,002 4,289
Repayment of long-term debt (1,644) (119) (4,033) (1,226)
Merchant members’ deposits in
guarantee
fund (71) (62) (205) (28)
Issuance of shares - 604 1,288 2,455
Dividends paid (1,970) (1,565) (7,473) (6,114)
------------------------------------------------------------------------
CASH FLOWS FROM FINANCING
ACTIVITIES 22,731 486 16,493 (8,776)
------------------------------------------------------------------------
Net increase (decrease) in cash and
cash
equivalents 684 1,185 (17,978) 9,187
Cash and cash equivalents,
beginning of
period 446 17,923 19,108 9,921
------------------------------------------------------------------------
Cash and cash equivalents, end of
period 1,130 19,108 1,130 19,108
------------------------------------------------------------------------
------------------------------------------------------------------------
Cash and cash equivalents include cash and
temporary investments maturing
in less than three months.
Dividends paid on common shares 0.100 0.080 0.380 0.314
------------------------------------------------------------------------
------------------------------------------------------------------------

The accompanying notes are an integral part of the interim consolidated
financial statements.


CONSOLIDATED BALANCE SHEETS
DECEMBER 31, 2006 AND DECEMBER 31, 2005
(in thousands of dollars, unaudited)
DECEMBER 31, DECEMBER 31,
2006 2005
------------------------------------------------------------------------
$ $
ASSETS
CURRENT ASSETS
Cash and cash equivalents 1,130 19,108
Temporary investments 6,897 4,942
Accounts receivable 136,834 132,251
Income taxes receivable 7,398 5,352
Inventory 313,384 260,156
Prepaid expenses 4,737 3,885
Future income taxes 6,332 3,093
------------------------------------------------------------------------
476,712 428,787
Investments and volume discounts
receivable, at cost 6,575 7,798
Property, plant and equipment 41,714 36,246
Financing costs 893 1,321
Covenants not to compete 578
Goodwill 44,257 17,996
Future income taxes 1,806 1,876
------------------------------------------------------------------------
572,535 494,024
------------------------------------------------------------------------
------------------------------------------------------------------------
LIABILITIES
CURRENT LIABILITIES
Bank indebtedness 27,860 1,932
Accounts payable 136,197 130,687
Income taxes payable 8,268 -
Dividends payable 1,970 1,568
Instalments on long-term debt and on
merchant members’
deposits in guarantee fund 529 373
Future income taxes 19
------------------------------------------------------------------------
174,843 134,560
Deferred government grants 395
Long-term debt 63,275 64,349
Merchant members’ deposits in guarantee
funds 7,814 7,334
Future income taxes 5,082 4,837


Non-controlling interest 29,588 26,932
------------------------------------------------------------------------
280,602 238,407
------------------------------------------------------------------------
SHAREHOLDERS’ EQUITY
Capital stock (Note 5) 49,344 48,056
Retained earnings 255,355 220,966
Cumulative translation adjustments (12,766) (13,405)
------------------------------------------------------------------------
291,933 255,617
------------------------------------------------------------------------
572,535 494,024
------------------------------------------------------------------------
------------------------------------------------------------------------

The accompanying notes are an integral part of the interim consolidated
financial statements.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 2006 AND 2005

(in thousands of dollars, except for per share amounts, unaudited)

1. BASIS OF PRESENTATION

The accompanying unaudited interim consolidated financial statements are in accordance with Canadian generally accepted accounting principles for interim financial statements and do not include all the information required for complete financial statements. They are also consistent with the accounting policies outlined in the Company’s audited financial statements for the year ended December 31, 2005. The interim financial statements and related notes should be read in conjunction with the Company’s audited financial statements for the year ended December 31, 2005. When necessary, the financial statements include amounts based on informed estimates and management’s best judgements. The operating results for the interim periods reported are not necessarily indicative of results to be expected for the year.

Certain comparative figures have been reclassified to conform with the presentation adopted in the current year.


2. INFORMATION INCLUDED IN THE CONSOLIDATED STATEMENT OF EARNINGS

4th QUARTER 12 MONTHS
2006 2005 2006 2005
-----------------------------------------------------------------------
Amortization of property, plant and
equipment 1,792 576 7,459 6,373
Amortization of financing costs 99 89 419 332
Amortization of covenant not to compete 167 167
-----------------------------------------------------------------------
2,058 665 8,045 6,705
-----------------------------------------------------------------------
-----------------------------------------------------------------------


3. EARNINGS PER SHARE
The following table presents a reconciliation of basic and
diluted earnings per share:
4th QUARTER
--------------------------------------------------------------------------
2006
--------------------------------------------------------------------------

Weighted
average Earnings
number per
Net earnings of shares share
--------------------------------------------------------------------------
--------------------------------------------------------------------------
$ $
Basic earnings per share 16,677 19,699,334 0.85
Impact of stock options exercised 44,924
--------------------------------------------------------------------------
Diluted earnings per share 16,677 19,744,258 0.84
--------------------------------------------------------------------------
--------------------------------------------------------------------------

4th QUARTER
--------------------------------------------------------------------------
2005
--------------------------------------------------------------------------
Weighted
average Earnings
number per
Net earnings of shares share
--------------------------------------------------------------------------
$ $
--------------------------------------------------------------------------
Basic earnings per share 14,186 19,573,338 0.72
Impact of stock options exercised 114,175
--------------------------------------------------------------------------
Diluted earnings per share 14,186 19,687,513 0.72
--------------------------------------------------------------------------
--------------------------------------------------------------------------


12 MONTHS
--------------------------------------------------------------------------
2006
--------------------------------------------------------------------------
Weighted
average Earnings
number per
Net earnings of shares share
--------------------------------------------------------------------------
$ $
--------------------------------------------------------------------------
Basic earnings per share 42,264 19,674,768 2.15
Impact of stock options exercised 60,899
--------------------------------------------------------------------------
Diluted earnings per share 42,264 19,735,667 2.14
--------------------------------------------------------------------------
--------------------------------------------------------------------------

12 MONTHS
--------------------------------------------------------------------------
2005
--------------------------------------------------------------------------
Weighted
average Earnings
number per
Net earnings of shares share
--------------------------------------------------------------------------
$ $
--------------------------------------------------------------------------
Basic earnings per share 39,061 19,516,512 2.00
Impact of stock options exercised 141,815
--------------------------------------------------------------------------
Diluted earnings per share 39,061 19,658,327 1.99
--------------------------------------------------------------------------
--------------------------------------------------------------------------

4. BUSINESS ACQUISITIONS
USI-AGI Prairies Inc. (USI-AGI):

On May 31, 2006, the Company acquired the shares held by its partners in the USI-AGI joint venture and now owns 100% of the shares. This company operates distribution centres and stores in the Automotive Canada segment.

Auto Craft Automotive Products, LLC (Auto Craft):

On June 1, 2006, the Company acquired the assets and assumed a portion of the liabilities of Auto Craft. This company operates distribution centres and stores in the Automotive USA segment.

Asher Management Group Ltd and Gator Inc. (Asher):

On November 1, 2006, the Company acquired the assets and assumed a portion of the liabilities of Asher. This company operates one distribution centre and stores in the Automotive USA segment.

In addition, the Company acquired the issued shares of three companies operating in the Automotive Canada segment and the assets and assumed a portion of the liabilities of ten companies operating in the Automotive USA segment.


The operating results are consolidated in the statement of earnings
since the respective acquisition dates.

The preliminary purchase prices are allocated as follows:

USI-AGI Auto Asher Autres Total
Craft
-------------------------------------------------------------------------
Current assets 28,345 14,919 6,867 14,880 65,011
Property, plant and
equipement 1,165 673 336 1,934 4,108
Covenant not to compete 523 184 707
Other long-term assets 318 102 30 450
Goodwill 12,016 4,209 2,605 6,996 25,826
-------------------------------------------------------------------------
41,844 20,324 9,910 24,024 96,102
-------------------------------------------------------------------------
Current liabilities (9,801) (81) (54) (2,379) (12,315)
Long-term liabilities (1,049) -- (758) (1,807)
-------------------------------------------------------------------------
(10,850) (81) (54) (3,137) (14,122)
-------------------------------------------------------------------------
Net assets acquired 30,994 20,243 9,856 20,887 81,980
Cash of company acquired (2,047) -- (7) (17) (2,071)
Settlement of accounts
receivable of company
acquired (134) (113) (2,492) (2,739)
-------------------------------------------------------------------------
Net acquisition 28,947 20,109 9,736 18,378 77,170
Total consideration
paid cash less cash
acquired 28,947 20,109 9,863 17,299 76,218
-------------------------------------------------------------------------
Balance of purchase price
payable -- -- (127) 1,079 952
-------------------------------------------------------------------------
-------------------------------------------------------------------------

Uni-Select USA, Inc.:
The Company acquired a non-controlling interest for a balance of
purchase price payable of $391 as of December 31. Following this
acquisition, the Company’s interest in it’s subsidiary increased
by 0,21%, from 85,65% to 85,81%.


5. CAPITAL STOCK

Authorized
Unlimited number of shares
Preferred shares, issuable in series
Common shares

DECEMBER 31, DECEMBER 31,
2006 2005
--------------------------------------------------------------------------
Issued and fully paid
Balance, beginning of year:
19,599,716 common shares
(19,423,289 in 2005) 48,056 45,601

Issue of 1,303 common shares
for cash (1,717 in 2005) 40 50

Issue of 98,315 common shares
on the exercise of stock
options (174,710 in 2005) 1,248 2,405
-------------------------------------------------------------------------
Balance, end of period:
19,699,334 common shares
(19,599,716 in 2005) 49,344 48,056
-------------------------------------------------------------------------
-------------------------------------------------------------------------

6. EMPLOYEE FUTURE BENEFITS
As at December 31, 2006, the Company’s pension plans are defined benefit and defined contributions plans.

For the three-month period ended December 31, 2006, the total expense for the defined contribution pension plans was ($61) ($339 in 2005) and $346 (($4) in 2005) for the defined benefit pension plans.

For the twelve-month period ended December 31, 2006, the total expense for the defined contribution pension plans was $898 ($1,093 in 2005) and $1,913 ($1,191 in 2005) for the defined benefit pension plans.

7. GUARANTEES

Per inventory repurchase agreements, the Company has made a commitment to financial institutions to repurchase inventories from some of its customers at a rate of 60% to 75% of the value of cost of the inventories for a maximum amount of $68,286 ($61,007 as at December 31, 2005). In the event of proceedings, the inventories would be liquidated in the normal course of the Company’s business. These agreements are for an undetermined period of time. In management’s opinion, the likelihood of major payments being made and losses being absorbed is low, since the value of the assets held in guarantee is significantly higher than the Company’s commitments.

As at December 31, 2006, the Company was contingently liable for letters of credit issued in the aggregate amount of $5,118 ($4,186 in 2005).


8. SEGMENTED INFORMATION
4th QUARTER
--------------------------------------------------------------------------
Automotive Canada Automotive USA
2006 2005 2006 2005
$ $ $ $
--------------------------------------------------------------------------
SALES 120,479 118,873 141,012 132,441

Earnings before interest,
amortization, loss on
disposal of property, plant and
equipment, income taxes and
non-controlling interest 19,518 12,842 11,187 10,724

Assets 226,837 193,456 307,390 252,466

Acquisition of property, plant
and equipment 3,065 651 2,154 1,102

Acquisition (disposal) of goodwill 1,237 -- 6,330 --

Acquisition of covenant
not to compete -- -- 728 --
--------------------------------------------------------------------------


4th QUARTER
--------------------------------------------------------------------------
Heavy Duty Consolidated
2006 2005 2006 2005
$ $ $ $
--------------------------------------------------------------------------
SALES 18,336 23,614 279,827 274,928

Earnings before interest,
amortization, loss on
disposal of property, plant and
equipment, income taxes and
non-controlling interest (160) 1,114 30,545 24,680

Assets 38,308 48,102 572,535 494,024
Acquisition of property, plant
and equipment 22 94 5,241 1,847

Acquisition (disposal) of
goodwill -- -- 7,567 --

Acquisition of covenant
not to compete -- -- 728 --
--------------------------------------------------------------------------


12 MONTHS
--------------------------------------------------------------------------
Automotive Canada Automotive USA
2006 2005 2006 2005
$ $ $ $
--------------------------------------------------------------------------
SALES 489,573 497,620 567,402 568,356

Earnings before interest,
amortization, loss on
disposal of property, plant and
equipment, income taxes and
non-controlling interest 47,078 37,245 36,779 35,762

Assets 226,837 193,456 307,390 252,466

Acquisition of property, plant
and equipment 6,883 4,251 6,542 4,379

Acquisition (disposal) of goodwill 17,477 173 11,239 --

Acquisition of covenant
not to compete -- -- 728 --
--------------------------------------------------------------------------
--------------------------------------------------------------------------


12 MONTHS
--------------------------------------------------------------------------
Heavy Duty Consolidated
2006 2005 2006 2005
$ $ $ $
--------------------------------------------------------------------------
SALES 66,928 73,980 1,123,903 1,139,956

Earnings before interest,
amortization, loss on
disposal of property, plant and
equipment,
income taxes and
non-controlling interest (1,963) 1,224 81,894 74,231

Assets 38,308 48,102 572,535 494,024

Acquisition of property, plant
and equipment 193 718 13,618 9,348

Acquisition (disposal) of goodwill (2,890) -- 25,826 173

Acquisition of covenant not to
compete -- -- 728 --
--------------------------------------------------------------------------

The Automotive USA segment includes property, plant and equipment for an
amount of $l7,599 ($14,668 as at December 31, 2005) and goodwill for an
amount of $17,885 ($6,211 as at December 31, 2005).