Mr. Robert Sawyer reports

RONA ANNOUNCES ITS FIRST QUARTER 2015 RESULTS

Rona Inc. has released the results for its operations for the 13-week period ended March 29, 2015.

First-quarter highlights:

• Increase of 5.0 per cent in same-store sales in the retail segment;
• Increase of 22 per cent in adjusted EBITDA (earnings before interest, taxes, depreciation and amortization) compared with last year to $12.2-million, and adjusted EBITDA margin up by 30 basis points;
• Adjusted net loss down by $3.2-million to minus $11.2-million, compared with minus $14.4-million last year;
• Improvement of 16.7 per cent in adjusted net loss per share, or minus 10 cents, compared with minus 12 cents in the first quarter of 2014;
• Repurchase of more than 5.6 million common shares in the normal course of business during the first quarter, for a cash consideration of $77.4-million.

"For the third consecutive quarter, Rona recorded solid growth in same-store sales throughout its retail network. The 5.0-per-cent increase reflects the success of our merchandising and banner repositioning strategies, as well as successful initiatives to meet the needs of our different customers and improve our competitive positioning. These elements, combined with strict management of operations and an early spring in Western Canada, resulted in a significant increase in sales in that region. Furthermore, Quebec's Reno-Depot stores continue to generate solid growth in same-store sales despite market conditions, which are still difficult in this market. Results in recent quarters confirm our strategy decisions, and the Rona team is always looking for ways to profitably stimulate sales; we are leveraging our banners in order to optimize network efficiency so that we can meet the needs of our customers even better," said Robert Sawyer, president and chief executive officer of Rona.

                           FINANCIAL HIGHLIGHTS
             (in millions of dollars, except per-share data)             
                           
                                                       First quarters ended
                                              March 29, 2015 March 30, 2014

Revenues                                              $778.8         $764.3
EBITDA                                                  12.1            7.9
Adjusted EBITDA (1)                                     12.2           10.0
Net (loss) attributable to participating shares        (11.7)         (16.5)
Per share -- basic and diluted ($)                     (0.11)         (0.14)
Adjusted net (loss) attributable to
participating shares (1)                               (11.2)         (14.4)
Per share -- basic and diluted ($)                     (0.10)         (0.12)

(1) Non-international financial reporting standards performance measures

"The improved profitability reflects the stringent application of our business strategies. Rona improved its consolidated gross margin by 100 basis points over the same period last year. Furthermore, our solid financial position has allowed us to take opportunistic action with respect to our normal course issuer bid. The combined impact of these two factors contributes to value creation for our shareholders, as shown by the increase of more than 42.5 per cent in return on capital from 4.0 per cent to 5.7 per cent over the last year," said Dominique Boies, executive vice-president and chief financial officer of Rona.

First-quarter 2015 results

Consolidated revenues rose to $778.8-million, up 1.9 per cent over $764.3-million for the first quarter of 2014. This mainly reflects an increase of $29.3-million, or 5.9 per cent, in the retail segment, stemming from a solid performance in Western Canada and repositioning of the Reno-Depot banner in Quebec. These factors led to a 5.0-per-cent increase in same-store sales in Rona's retail segment in the first quarter of 2015. In the distribution segment, revenues were down 5.6 per cent, primarily due to the net change in the number of dealer-owners and poor weather conditions in Quebec.

Adjusted EBITDA rose to $12.2-million, or 1.6 per cent of revenues, compared with $10.0-million, or 1.3 per cent of revenues, in the first quarter of 2014. The increase reflects the positive impact of comparable sales growth in the retail segment on the consolidated gross margin, which rose 100 basis points over the same period a year earlier. This element was partially offset by an increase in adjusted selling, general and administrative expense due to the rise in the cost of share units related to the long-term incentive plan, stemming from the increase in the Rona share price, as well as more aggressive marketing strategies. Adjusted EBITDA margin rose 110 basis points in the retail segment and fell 120 basis points in the distribution segment.

Adjusted net loss attributable to participating shares for the first quarter of 2015 amounted to ($11.2)-million, or (10 cents) per share basic and diluted, compared with ($14.4)-million, or (12 cents) per share basic and diluted, in the first quarter of 2014.

Solid financial situation

As at March 29, 2015, Rona's financial situation remained healthy, with net debt of $402.3-million and $423.2-million available on its authorized credit facility of $700.0-million. The ratio of net debt to adjusted EBITDA for the past 12 months was 1.7 times at March 29, 2015, compared with 1.6 times at March 30, 2014. The ratio of net debt to total capital was 0.21 times as at March 29, 2015, up from 0.16 times as at March 30, 2014.

The increase in the ratios compared with a year earlier reflects the continued optimization of Rona's capital structure through the purchase of over 5.6 million common shares during the quarter for a cash consideration of $77.4-million under the normal course issuer bid established in November, 2014. Since the start of the program, Rona has bought back 8.1 million common shares, or 88 per cent of the total program, for a cash consideration of $109.7-million. Rona is authorized to purchase a maximum of 9.2 million common shares up to Nov. 17, 2015.

Dividend on preferred shares

At its meeting on May 11, 2015, Rona's board of directors declared a quarterly dividend of 32.81 cents per share on cumulative, five-year, rate-reset Class A preferred shares, Series 6. The dividend will be paid on June 30, 2015, to shareholders of record on June 15, 2015.

Additional information

Management's discussion and analysis (MD&A), financial statements, and related notes for the first quarter of 2015 can be found in the investor relations section of the corporation's website and on the SEDAR website. The corporation's annual information form, along with other information about Rona, can also be found on the Rona and SEDAR websites.

Conference call with the financial community

On Tuesday, May 12, 2015, at 3 p.m. EDT, Rona will hold a conference call for the financial community. To join the conference, please call 416-340-2217 or 1-866-696-5910. The call is available on-line.

A replay will be available from 7 p.m. on Tuesday, May 12, 2015, until May 19, 2015. It can be heard by dialling 905-694-9451 or 1-800-408-3053 and entering the password 3322001 on the telephone keypad.

We seek Safe Harbor.