Mr. Richard Lord reports

FIRST QUARTER RESULTS AND CONTINUED EXPANSION FOR RICHELIEU

Richelieu Hardware Ltd. has released its first quarter results.

"We began fiscal 2024 with sales equivalent to those of the first quarter of 2023 -- a good result since sales in the comparable period of 2023 continued to benefit from favourable market conditions. It should also be noted that the first quarter is historically the weakest period of the year. We have seen the benefits of our recent acquisitions and market development initiatives supported by our strategies of value-added service, innovation, and diversification of customer segments. Despite the significant reduction in our inventories in 2023, we still have some inventories purchased at higher than current cost. Selling these inventories at market prices has had a negative impact on gross margin. This situation will gradually be resolved as those products are reordered. We completed several expansion and modernization projects over the past year and also launched our brand-new Calgary centre last December. The start-up and development of these centres, in addition to being impacted by current market conditions, also affected the EBITDA margin downwards. In terms of acquisitions, we are very pleased with the three companies acquired since the beginning of the fiscal year, which are expected to contribute approximately $60-million in annual sales," said Richard Lord, president and chief executive officer.

Expansion: Three new acquisitions since the beginning of the fiscal year

During the first quarter, Richelieu concluded the acquisition of Olympic Forest, a distributor of specialized lumber and panel products operating a distribution centre located in Erin, Ont. This was followed by the acquisition of Rapid Start, a distributor of a specialty hardware serving a customer base of manufacturers from its distribution centre located in Rittman, Ohio. On March 27, 2024, the corporation closed the acquisition of the main net assets of Allegheny Plywood, a distributor of specialty panels and decorative surfaces, which operates distribution centres in Pittsburgh and Allentown, Penn., as well as in Cleveland, Ohio. These three transactions, along with the $60-million in additional annual sales, add complementary products and expertise and strengthen the corporation's position in these different markets.

Analysis of operating results for the first quarter ended Feb. 29, 2024

For the first quarter ended Feb. 29, 2024, consolidated sales amounted to $406.9-million, compared with $403.0-million for the first quarter of 2023, an increase of $3.9-million, or 1.0 per cent, including a 0.4-per-cent internal decrease offset by 1.4-per-cent growth through acquisitions. In comparable currency to the first quarter of 2023, the increase in consolidated sales for the quarter would have been very similar.

An associated table provides an overview of Richelieu's sales in its two main markets for the quarters ended Feb. 29, 2024, and Feb. 28, 2023.

                     QUARTERS ENDED FEB. 29 AND FEB. 28  
             (in millions of dollars, except exchange rates)
  
                                                                           % Change
                                 2024     2023     Total   Internal    Acquisitions           

Consolidated                    406.9    403.0       1.0       (0.4)            1.4         
Manufacturers                   349.6    344.1       1.6       (0.1)            1.7         
Retailers                        57.3     58.9      (2.7)      (2.7)              -           
Canada                          232.1    230.9       0.5       (1.5)            2.0         
Manufacturers                   187.6    185.5       1.1       (1.4)            2.5         
Retailers                        44.5     45.4      (2.0)      (2.0)              -           
United States in US$            129.9    127.7       1.7        1.1             0.6         
Manufacturers                   120.3    117.7       2.2        1.7             0.5         
Retailers                         9.6     10.0      (4.0)      (4.0)              -           
United States in CA$            174.8    172.1       1.6                        
Average exchange rates            1.345    1.349                            


  
  
   

Earnings before taxes, interest and amortization for the 2024 first quarter were $40.4-million, down $8.7-million or 17.7 per cent compared to the corresponding quarter of 2023, mainly as a result of lower gross margin and increase in certain temporary operating expenses resulting from expansion projects. Consequently, the earnings before interest, taxes, depreciation and amortization margin was 9.9 per cent, compared with 12.2 per cent for the corresponding quarter of 2023.

Net earnings for Q1 were $15.5-million, down 31.4 per cent from the prior year. Including non-controlling interests, net earnings attributable to the corporation's shareholders were $15.2-million, down 32.1 per cent from Q1 2023. Net earnings per share were 27 cents basic and diluted, compared with 40 cents basic and diluted for Q1 2023, down 32.5 per cent.

Financial position

Total assets were $1.34-billion as at Feb. 29, 2024, compared with $1.31-billion as at Nov. 30, 2023, an increase of 2.3 per cent. Current assets were down 0.2 per cent or $1.9-million from Nov. 30, 2023. Non-current assets increased by 7.0 per cent mainly due to the addition of right-of-use assets.

As at Feb. 29, 2024, the bank overdraft, net of cash and cash equivalents, was $10.2-million, compared with net cash of $23.7-million as at Nov. 30, 2023. The corporation had working capital of $623.4-million with a ratio of 3.7:1, compared with $621.8-million (ratio of 3.6:1) as at Nov. 30, 2023.

Share capital

As at Feb. 29, 2024, the corporation's share capital consisted of 56,139,140 common shares (56,088,365 shares as at Nov. 30, 2023). For the three-month period ended Feb. 29, 2024, the weighted average number of diluted shares outstanding was 56,530,470 (56,147,410 in 2023).

Dividends

On April 11, 2024, the board of directors approved the payment of a quarterly dividend of 15 cents per share to shareholders of record as at April 25, 2024, payable on May 9, 2024. Of this declared dividend 7.6 cents per share is designated as an eligible dividend and 7.4 cents per share is not designated as an eligible dividend.

April 11, 2024, conference call at 3:30 p.m. (Eastern Time)

Financial analysts and investors interested in participating in the corporation's earnings conference call, scheduled for April 11, 2024, at 3:30 p.m., can dial 1-888-390-0620 a few minutes before the start of the call. For those unable to participate in real time, a recording will be available starting April 11, 2024, at 5:45 p.m. until midnight on April 18, 2024. Simply dial 1-888-259-6562 and enter the access code: 859985 followed by the pound key to access the recording. Your presence and engagement, including members of the esteemed media, are highly valued and welcomed.

Profile of Richelieu Hardware Ltd. as at Feb. 29, 2024

Richelieu is a leading North American importer, manufacturer and distributor of specialty hardware and complementary products. Its products are targeted to an extensive customer base of kitchen and bathroom cabinet, storage and closet, home furnishing and office furniture manufacturers, residential and commercial woodworkers, door and window, and hardware retailers including renovation superstores. Richelieu offers customers a broad mix of high-end products sourced from manufacturers worldwide. Its product selection consists of over 145,000 different items targeted to a base of more than 120,000 customers which are served by 113 centres in North America -- 50 distribution centres in Canada, 60 in the United States and three manufacturing plants in Canada, specifically, Les Industries Cedan Inc., Menuiserie des Pins Ltee and USIMM/UNIGRAV Inc., which manufacture a variety of veneer sheets and edge-banding products, a broad selection of decorative mouldings, and components for the window and door industry as well as custom products, including a 3-D scanning centre.

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