Louis Juneau – Chief Legal Officer and Corporate Secretary Henry Buckley – President and CEO Eric Bussières – CFO Steve Arndt – President and COO, FinishMaster

Leon Aghazarian – National Bank Financial Sara O’Brien – RBC Capital Markets Elizabeth Johnston – Laurentian Bank Securities Jonathan Lamers – Bank of Montreal

Thank you, Julie. Good morning, everyone and welcome the Uni-Select 2016 first quarter financial results conference call.

Before we proceed with the presentation, I would like to remind you that certain information discussed during this call may constitute forward-looking information within the meaning of securities legislation. Caution should be used in the interpretation of such information.

For details, please refer to our disclaimer regarding the forward-looking information in our latest Annual Report available on SEDAR, as well as in the press release issued yesterday. Joining me in Boucherville, this morning, are Henry Buckley, President and CEO; Eric Bussières, CFO; Steve Arndt, President and COO, FinishMaster; Gary O’Connor, President and COO, Automotive Canada.

I will first turn the call over to Henry, who will discuss the key highlights of the last quarter. Eric will then discuss a few important financial elements for Q1.

After their presentation, we will open up the call to questions. Over to you, Henry.

Thank you, Louis and good morning, everyone. Thank you for joining us.

I want to begin my remarks today by expressing how pleased I am with our overall performance in Q1 and delighted to see both our businesses deliver healthy growth. Excluding the sales from the sold operations on June 1, 2015, our consolidated sales for the quarter grew 10.8%, led by our FinishMaster paint and related product segment at up 17.3%.

On a consolidated organic basis, we achieved growth3.2% driven by 4.2% at FinishMaster and 1.5% growth for Automotive Canada. Our EBITDA margin reached 8.2%, up 350 basis points from our adjusted EBITDA last year.

Earnings grew to a $11.5 million, up a robust 14.5% from our adjusted earnings last year. And finally, earnings per share reached $0.53 versus adjusted earnings of $0.47 last year.

That’s up 12.8%. Our teams are highly focused on executing our plan and our plan in simple, it’s accelerating profitably growth which means the balance of organic and acquisitive grow, effectively integrating our acquisitions and building the best team in the business.

We made very good progress in all these fronts in the first quarter despite headwinds related to the Canadian dollar currency and the economic slowdown in the Canadian [indiscernible]. Over the course of the first quarter, FinishMaster achieved balanced growth by continuing to focus on adding new customers in both our traditional and our MSO customer segments, combined with acquiring strong performing companies in alignment with our growth strategy.

We have continued to evolve our organization to better our service customers. Our regional sales teams are laser-focused on delivering exceptional customer service, be they large MSO operations or traditional collision repair customers.

Our goal is accelerating profitable growth by ensuring we have the best team delivering the best service. In terms of acquisitions, we continue to add key companies to our family to build density in larger important markets as well as filling out our geographical coverage of the USA.

We welcome all of our new team members and learn from each of them as they join our family. Now, acquisition integration is a key part of our strategy and we're extremely focused on ensuring we have robust integration processes for all our new customers and team members.

Equally, we're ensuring we are delivering on our plan synergies. In Canada, we continue to reinforce our customer centric value proposition as part of our commitment to build a strong, unified and synergistic brand across Canada.

We announced in March the launch of reimaged full marketing brand Bumper To Bumper. Today, we have more than 113 independent jobber locations already branded under the popular name In the Canadian Prairies.

We are refreshing and relaunching this brand nationally adding independent jobbers across Canada, as well as converting all of our 48 corporate stores. More than ever before, we are sending a strong message that we are Canada's Parts People.

We continue to support the balance of our independent customers with our current menu-driven Auto Parts Plus across Canada. These two brands in Canada allow us to serve our customers the way they want, a truly national full marketing brand with Bumper to Bumper and an Auto Parts Plus brand to service independent customers choosing a menu-driven approach.

In Canada, we achieved solid organic growth at 1.5% despite challenging economic conditions. If you exclude the Prairies, which is impacted by the oil and gas market slowdown, organic sales in the balance of Canada grew at an impressive 5.3%.

We're making very good progress. In addition, we are steadily building the foundation of our corporate store group and now operate 48 stores nationally.

Turning to acquisition, we completed several strategic acquisitions in both businesses over the course Q1 and shortly after the quarter end. In Canada, we announced the acquisition of M.A.G Auto Parts, a highly regarded one store jobber in Sherbrooke, Quebec.

Shortly after that, we acquired Jean Talon Auto Parts and [indiscernible] operating seven well-known locations in the Greater Montréal area. In the US, we completed the acquisition announced last December of ColorMaster Automotive Paint, a regional leader in the automotive refinish business, with activities in 15 locations across four states.

In February, we completed the acquisition of 80-year old market leader Johnson Michigan Automotive & Industrial Coatings, thereby strengthening our footprint in Eastern and Central Michigan. Shortly after quarter end, we announced the acquisition of Annex Group, operating nine locations in metropolitan areas in the states of Washington and California.

We also acquired Lowell's PCE, a one store operator in Minnesota. We truly welcome these new talented team members to the Uni-Select family and we are thrilled to have them help us accelerate profitable growth.

Before I conclude my remarks and discuss our priorities and focus going forward, let me now turn the call over to Eric.

Thank you, Henry. Good morning, everyone.

Before anything, let me begin [ph] my comments by mentioning that the results discussed on this call are compared to last year adjusted results which included operation of Uni-Select USA and Beck/Arnley Worldparts sold on June 1, 2015. As you have certainly noted, the lower Canadian dollar has continued to impact our results as presented in an important way, [ph] yet not operationally.

In Q1 alone, the declining Canadian dollar penalized sales by $8.5 million or 3.6% at the consolidated level which translate into a negative impact of 9.4% on the sale of the auto products segment. You will also have noticed from analyzing our results that our results performance was impacted by difference in the numbers of days of billing between Q1 2016 on Q1 2015.

The additional billing day in Q1 this year had a positive comparative impact of $2.8 million. We are pleased by the EBITDA margin of two operating units, our paint and related products and our automotive products with 12% and 5.1%, respectively.

Our accounts receivables increased by $13.6 million against last quarter. That a third of this increase is attributable to the appreciation of the Canadian dollar, about a third is from the ongoing operation and the last third is from the latest acquisition closed during the quarter.

In winter increased by $7.4 million compared to last quarter. An increase related to our business acquisition of $12.2 million, appreciation in the Canadian dollar by $8.9 million that was partly offset by our continuous optimization of our same-store operations.

Cash flow from operating activities was negative $8.5 million. However, this is an improvement of a $11.1 million compared to the same period last year.

Furthermore, this quarter, like for the preceding two quarters, we had large payments under the vendor financing program for the sold operation and this line, the amount was $11 million. Accordingly, cash flow from ongoing operating activities before this payment was positive $2.5 million.

We are now left with one financial installment under the vendor financing program – one financing program tied to the sold assets of $2.5 million, payment that will be done in a second quarter. I would also like to point out that the free cash flow increased by 90% from $10.2 million last year to $19.4 million, due to the lower CapEx, lower interest and income tax paid, as well as improved earnings.

Some of you will have noticed that Uni-Select has been fairly active under our NCID [ph] program during the first quarter. We purchased 303,210 common shares during the quarter at an approximate average price of CAD 56.44 Canadian or equivalent to $42.31 for a total consideration of CAD 17.1 million or $12.8 million.

As you know, our share price has been fairly volatile during the quarter and we have the opportunity to purchase some shares as we felt the stock was undervalued. We are now increasing our revenue guidance and EBITDA margin guidance as follows.

An average exchange rate of CAD 0.75 [ph] to the US dollar for the full year, we now expect sales to range between $1.175 billion and $2 billion. We are increasing our EBITDA margin guidance from 2016 from a range of 7.5% to 8.5% to a range of 7.75% to 8.75%.

Our guidance on CapEx remains unchanged at $20 million. As you are aware, we started providing guidance after the announcement of the dispositions of the Uni-Select USA and Beck/Arnley Worldparts and we will continue to do so throughout 2016, but will no longer pursue this practice thereafter.

As of March 31, our pending net debt stood at $79.5 million, cash mainly used for financing a series of accretive business acquisitions, payment under the vendor financing program and share buyback under the NCID [ph]. Our excessive liquidity is very strong $324 million in available credit facility.

This puts Uni-Select in a very favorable position to actively seek and seize growth opportunity to better density in key markets, increase geographic coverage and build market shares. This completes my financial review.

Back to you, Henry.

Let me conclude my remarks today by reaffirming our strong commitment to pursuing our profitable growth efforts, both organically and through accretive business acquisitions. This is a commitment to shareholders and the number one objective pursued by each of our Uni-Select 2800 team members.

On this note, I’m extremely pleased to announce the Board’s decision to increase our quarterly dividend to $0.17 from $0.16. This decision reflects the Board’s and management’s ongoing commitment and level of confidence in our future.

I’m also delighted to announce that our Board has also approved a two for one stock split effective May 6, 2016 and subject to customary completion and approval of regulatory filings with the TSX. Turning to the second quarter of 2016, we will continue working toward building our leadership positions in both businesses.

You truly committed to further developing our customer-centric culture, facilitating the effective integration of our newly acquired companies, and finally, building the best teams in the business. In closing, I wish to sincerely thank the entire Uni-Select team for their continued commitment, dedication, and passion towards delivering the industry’s best customer experiences.

We are now ready to answer your questions. Julian, could you please open the lines to questions?

Hi, good morning, guys and congratulations on a good quarter. My first question is regarding the margins for the paint side, I mean, you mentioned that it was helped by strategic buying or as you say, improve buying conditions and the FinishMaster’s margins are on 12%, I mean we are quite solid.

So I just want to figure out kind of what happened there and if that number is sustainable or if there was anything kind of unusually high in that quarter.

Yes, I think the -- good morning. That’s a question we get -- I think we’ve had that question pretty much every quarter.

So, given we have the question every quarter and we are posting results every quarter, this is just we operate quite frankly. Our job is to make sure we optimize both the buy side and the sell side.

So, I’ll tell you straight up that we are doing that in both businesses, FinishMaster included. So, we think advantage of any opportunities to optimize the buy side, whether they be an event of price increases, whether they just be – did a buying [ph] negotiating with our vendor partners, that’s just really part of the DNA of our business.

There’s nothing in our view anything exceptional there. In fact, I think we’ve talked about this every quarter for probably the last six or eight.

Is that fair?

Yes. Well, fair enough.

Moving on to the parts site, I mean, you did mention here that there was enhanced volume on the private label side which have helped margins, where and what were some of the main private label initiatives currently and like, what’s the potential here for the private label site, because that’s really one of the reasons that it’s pushing margins on the parts side?

Well, I think the potential is somewhat limited because we had a national brand house and we want to continue that strategy. But having said that, that our strategic product opportunities that we are pursuing and really trying to help our customers buy into these strategies.

So, slowly as they move over these private opportunity that we are presenting them, obviously our margin would be positively impacted. So, it’s somewhat limited, but it’s something we are focusing on.

Yes. And I would just add that we’re doing that quite frankly in both businesses.

We have a very good private brand portfolio at FinishMaster, we have a good one in Canada, and I think they’re both, I would say, complementary, because both businesses are focused on supporting the national brand. So, it’s a very good complementary program for both businesses.

Okay. If I can, one final one for me before I turn it over, would be on the acquisitions, right, I mean, we see that you made obviously five acquisitions in the quarter, I think you’re on 26 locations, you paid around $50 million or so in the quarter for that, but we do see in the subsequent events for you do complete two more acquisitions for I think combined roughly 10 locations, but you did pay a purchase price of roughly $57 million.

So, just trying to understand what went on there, like [indiscernible] different types of circumstances there, it’s different margins. I know you don’t normally provide a lot of information on in terms of their position and in terms of multiples, but a bit more color here please.

I think the message is going to be exactly the same, Leon. Yes, we don’t disclose the individual transactions.

We have competitors out there who would love to know what we’re up to and we are just not going to do that. But what I can tell you is that, we’ve committed to everybody and we have stated all along that we are acquiring companies, that FinishMaster as an example, in the range of six to nine times EBITDA pre-synergy and we have not gone outside of that range.

I’ll discuss it if that happens, but that has not happened so far. So, I think you can take from that the fact as we are continuing to be disciplined in terms of the acquisitions we are making, we are disciplined in terms of the values we are paying for them and our cash [ph] dispositions will reflect that, that sort of performance.

So was a lot – I mean, okay. Were they – was a lot of them unusually high in terms of the revenue or in terms of the EBITDA or I might just maybe misunderstanding the sign here?

I mean, it seems to me like it’s quite a high purchase price for like 10 locations.

Your can’t go by our locations this is a discussion that we’ve had in numerous cases, because – and people have tried to peg an average sales value for individual locations, and those vary all over the map, they get [ph] small automotive jobbers and we could have $10 million-plus locations in either side of the business. So, having a correlation between the number of locations and the size of the business, you’re going to struggle with that.

I think I would go back to the values we were paying, we are very, very pleased with our approach in terms of what we pay, the margins or the ranges we are paying within the EBITDA margins. And we are not looking at this on a per store sales basis.

We are very happy, in fact, the less stores they have, sometimes a less complicated it has, there are more throughput in individual stores and it really depends on the markets we are operating in. So, clearly, if you looked at the individual acquisitions, we had one multi-store one and then the single one out in Minnesota.

So, they are two different businesses.

Thank you. That was very helpful.

You bet. Thanks, Leon.

Hi, good morning.

Good morning, Sara.

Can you comment on your Canadian strategy for corporate stores sort of what’s left to do in-house in terms of forming your team and are there any investments that are needed for that strategy?

Yes, that’s something that we’ve talked about over the coming quarters. We are not sort of running hard to acquire every store we can get our hands-on right now.

We’ve said we’re going to take this at a sort of very measured pace, because like a business in the US, the FinishMaster, it’s critical that we are able to integrate those ones successfully into our network. Given Canada, we’ve said this is very much a transformational strategy for us.

In other words, we’ve been supporting independent jobbers from the outset of this organization and we’ve moved to a strategy where we are going to have a second lane on the highway of discussion [ph] which is really the opportunity of corporate stores across Canada. We are not shifting lanes in the sense that they are closing the first lane with independent jobbers.

We’re just adding this opportunity for us to have corporate stores across Canada. So, being out [ph] at the strategy, we are starting to roll some of our opportunities into that lane, into the corporate store group, but we are in the process of building a robust integration processes.

And I’ll you the easy things to do that that we can do a little bit quicker which is integrating the back office and getting the product synergies and we are working on those immediately. The stuff that that we would like to do, but we’re taking a measured pace at, is putting in the sort of JMS or Jobber Management System or point-of-sale system into each of the stores.

We are in the process right now of evaluating point-of-sale systems and that will be a fairly significant next step in our progression towards integrating those stores. We’re not going to be running down that road.

We are making decisions for the long-term. So, we are operating those stores as they are, integrating everything we can, but we are making very good progress in terms of getting at those synergies.

Okay. And then maybe just on the jobbers side, how is the recruitment process going year to date in terms of getting new job was to join the Uni-Select brands?

I would tell you probably it has been a little slower this year than the previous years. There is not a lot of activity going on.

We’ve added a few, but it has been somewhat slow [indiscernible]

Okay. Are you losing any?

No.

No.

Okay. And then on FinishMaster, I just wondered if you could comment on the mix of MSO customers and the likelihood – the likely rate of growth and if that’s expected to have some kind of margin pressure over the longer term?

Hi, Sara. This is Steve.

The MSO segment continues to grow within FinishMaster and we see a slowing of that over the next 18 months, the consolidation there slows down, but we’re still going to be active, very active in that. It’s a large portion of a growth right now.

The most important part of our growth comes from all the segments, so they are traditional as well as the MSO, very active in both of those segments right now.

Okay.

Sara, we’ve talked about FinishMaster business growing at mid-singles in the 4% to 6% and we are in that range right now which is terrific and we are very pleased with that because it’s a mixed growth. The MSO strategy continues as Steve said, but if you go back to sort of 18 months ago, we had a very big quarter or two in the organic side and that was driven by the MSO market consolidating themselves.

So, we added a lot more individual MSOs and that accrued to the organic growth. So, as Steve said, that slowed off a little bit, probably stabilized quite frankly, more than slowed off, it’s more normal pace.

So, we are happy to take those spikes anytime we can get them, but this is probably a more normal pace of MSO. Would you agree, Steve?

I definitely agree with that. We are on that level right now [indiscernible] with that segment.

Okay. Great.

And then just lastly on the Canadian margin, just wondering how we should think about a 5% range margin, the EBITDA, is that queries [ph] related, is it seasonally related, how should we think about how that kind of ramps through the year?

Well, look, as we have said numerous time, our Q4 and Q1 are typically our slowest quarter and especially to on the Canadian side. So, we would expect the Q2, Q3 from revenue and margin standpoint to be higher than that and it’s been the behavior of that business for a number of years.

So, our view is Q2 and Q3 should show some interesting progress and Q4, because it’s a seasonal business will have a slower quarter.

And is it – are the Prairies impacting the margin, or is this just a sales impact that you are seeing?

They are impacting both, Sara. Prairies is an important market for us from a revenue standpoint and also from a margin standpoint, it is a market that our margin tends to be a little bit higher than the average national, so a bit [ph] definitely on both sides.

Okay, thank you.

Thanks, Sara.

Hi, good morning.

Good morning, Elizabeth.

Just in terms of your updated guidance for [indiscernible] EBITDA, you’ve indicated 7.75% to 8.75% range, can you give any insight as to the segment you see driving this improvement or are they coming from both segments overall?

Well, we expect both segments to be able to achieve those type of results on a consolidated basis. So, I think the answer is, for us is, we should see some improvements on both side of the business throughout the year.

I think we just talked about the seasonality. So, I think both of them and particularly the Canadian business is affected by that in the sort of Q4 and Q1.

Okay, great. And just looking at the operating expenses and the impact of the negative synergies from the ERP system, do you expect that these costs continue for the balance 2016, or is it more front end loaded?

Any additional color there would be helpful.

Yes. Well, as we indicated before following the disposition of the USA operation, we’re left with about $4.3 million of negative synergies.

We will be working extremely hard over the coming months and years, because this is not going to go away anytime soon. So, that is to is that we are tackling those costs.

The actual structural cost by changing the composition of the services we’re getting or buying our own solution in some cases and the other part is obviously volume growth will help absorb those additional costs. So, over a period of time, we have not stated and we can’t give you guidance as to how long those costs will be in the business and at the corporate, but the reality is those costs are real and it’s not a one-time costs.

Okay, great. Just turning -- going back to Canada and we’ve talked a bit about the Prairies already and [indiscernible] you’ve seen there, do you have any strategy in place with region in terms of supporting growth or maintaining growth there?

Our view is very simple, it’s a long-term play. I mean, we’ve had some amazing years in the Prairies and we are still very happy with the business out there.

Quite frankly, we’re off – at the end of last year, I think we were up 6.7% [ph], call it, that’s pretty darn good in terms of what has been happening out in the Prairies and we expect that softness to continue, but vis-à-vis some other areas, industrial markets, those guys are up very significant double digits. So, we are pretty pleased with our progress out there.

They’re going to manage through the economic situation and we are investing in this business for the long run. So, we’ll mitigate any other costs, we would do it normally, expect to do variable costs such as warehouse labor, we’ll adjust accordingly.

But we are very committed to this key market for us long term.

Okay, great. That’s all for me.

Thank you.

Thanks, Elizabeth.

Sort of the revised guidance, I saw you are assuming a CAD USD rate of $0.75, what FX rate were you assuming in the previous guidance?

Right around the 73.5 [ph] as I recall, I would have to double-check, but it’s in that range.

Okay, thank you. Can you quantify the impact of the lower share based compensation year over year?

Well, let me first say that I’m pleased the Board of Directors has approved the policy, so that we can mitigate some of the volatility associated with the share price on our DSU and PSU program. And in the coming months, we will start putting a program in place to mitigate some of the volatility.

The impact against Q4 to Q1 was about $900,000 positive to our results in the quarter. And as you may recall, Q4 was particularly punitive for us from a P&L standpoint.

So, we will start with the DSU program and actually, start doing some volatility, I would say, protection on the PSU over time.

Okay. And in the US paint business, can you tell us how many months of inventory you have remaining at the strategic purchase prices?

No, we don’t disclose that information, Jonathan.

We are very, very happy with our churn level in the business. We are very happy with the supplier dating terms we get.

So, we are very, very disciplined in terms of how we do that. So, we are not worried about that.

That’s just a – in terms of how we operate that business, it’s ongoing as I said earlier. We continually optimize our buy side and we’ll continue to do that and take advantage of any opportunities we see, but all within a range of discipline where we don’t get ourselves stretched out.

So, our churn rate is very good.

Okay. Do you have any indications from the manufacturers of further price increases later this year?

Jonathan, it’s Steve. Price increases, we’ll continue this year.

They’ve indicated that in the same timeframes as the past several years that we’ll have price increases.

Yes, they don’t come out once a year, one specific time of the year, like every June or every May, they come out at various times by various manufacturers.

Okay. So, last year, there was an impact reflected in the results in Q2, would that be seasonally normal timing for price increases?

For – on the manufacture, yes.

Okay. And last question, in the Canadian business, I believe you noted in the disclosure that private label products benefitted sales year over year, can you tell us how much of Canadian sales private label products now represent?

I believe in the past, you indicated kind of 8% to 9% of Canadian sales.

Yes, that’s about it. And it hasn’t really grown much from there, it’s probably 8% to 9% is probably the number.

Okay, thanks.

Thanks, Jonathan.

All right. Thanks, everyone.

I want to thank everyone who joined us this afternoon and we look forward to speaking to you in July and have great rest of your day. Thanks, everyone.