Thank you, Julie. Good morning, everyone and thank you for joining us for the Uni-Select fourth quarter conference call.

Presenting this morning are Brent Windom, President and CEO of Uni-Select and President and COO of the Canadian Automotive Group; and Eric Bussieres, Executive President and Chief Financial Officer. Following their comments, we will open the call for questions.

Please note that all documents referred to in today’s conference call, including this webcast presentation, can be found on our website at uniselect.com in the Investors section. As noted on slide two, I would like to remind you about the caution regarding forward-looking statements, which is applied to our presentation and comments.

All amounts are expressed in U.S. dollars except as otherwise specified.

As noted on slide three, as the corporation applied for the first time on January 1, 2019, IFRS 16 leases using the modified retrospective transition approach and did not restate comparative amounts for the year prior to its adoption as permitted. As a result, the 2019 condensed consolidated financial statements present significant variances when compared to 2018.

Please refer to the adoption of IFRS 16 leases section in the MD&A for further detail. With that, let me turn the call over to Brent.

Good morning. Thank you everyone for joining us.

Please turn to page five for the fourth quarter results. 2019 was a transformational year and we are pleased with the outcome of the performance improvement plan, realizing $31.9 million in annualized savings in 2019 and reaching our target of $50.6 million in annualized savings since beginning of the plan.

We will continue to realize these annualized impacts throughout 2020. In December we concluded the strategic review process and modified our capital structure.

With the issuance of $125 million Canadian convertible senior subordinated unsecured debenture. The transformation steps undertaken over the past years have been necessary to stabilize the three business segments.

Enabling us to initiate a continuous culture of improvement in our operations and to capitalize on our future growth opportunities. We would like to thank each of our 6000 plus team members for their commitment to resolve during the year.

We would also like to thank them for the dedication to our customers and the continual improvement to our business. Now let us turn to our results.

For the year in constant currencies, sales increased 1.1% driven by the contribution from acquisitions and organic growth, adjusted earnings before tax decreased to $40.7 million impacted by marketing conditions of FinishMaster, network investments and higher borrowing costs. Now let's look at our most recent quarter.

Our fourth quarter is typically our softest quarter of the year, this year was no exception. Combined with the softer market conditions in all three business segments, however, we are seeing encouraging signs as we continue to successfully implement the performance improvement plan, which continue to yield tangible results and the Parts Alliance and especially the FinishMaster where profitability was up year over year for the first time in 2019.

Sales increased 1.6% for the quarter, compared to the same quarter last year, reflecting the soft market conditions as well as erosion sales from the integration of company owned stores, which represented 80 basis points of the decline. These factors were partially offset by the contribution of acquisitions that has previously mentioned.

In the quarter we integrated 14 more stores ending the year with 434 stores and generated an additional $8.2 million in annualized savings for the quarter. On a year over year basis, the adjusted earnings before tax decreased to $5.4 million or a margin of 1.3% mainly explained by the pricing pressures and evolving customer mix at Alliance.

Negative organic growth which impacted buying conditions and the absorption of fixed costs. Let me go into more detail on page six please.

We are pleased to report at the end of the year we surpassed the objective in both terms and timing and savings. We delivered what we set out to do in 2019.

The initiatives were launched -- since the initiatives we launch we generated for the three business units, the annualized savings of $50.6 million. As indicated before we expect the savings to be fully materialized in 2020.

Also, the actions taken and realized in 2019 by the three segments, approximately 50% of the savings found its way to our operating results for the year and about 20% benefited for the fourth quarter. As the current initiatives gradually come to a close, we will continue to strategically look for the optimization opportunities in our network to make continuous improvements as part of our culture and moving forward.

Now let's turn to page seven for FinishMaster. Sales for the fourth quarter decreased 2.5% impacted by the erosion of 1.3% from the integration of company owned stores, and negative organic growth while the erosion of sales was more significant during the fourth quarter, reflecting the full impact of the stores already integrated in the back half of the year.

These results remain in line with our expectations. In the quarter we continue to execute the integration of seven stores for total of 29 stores in 2019 ending the year at 180 stores.

Adjusted earnings before tax related margin reached $9.3 million and 4.7% of sales, respectively, up year-over-year for the first time in 2019. As you recall, in last October, we appointed Rob Molinar as the interim president CEO FinishMaster.

We are currently in the recruitment process and making good progress. The refinish markets continued to be soft as a result of lower collision claims, ongoing consolidation in refinish market and the advancing technologies.

Although, we expect the market to be slightly down in terms of volume in 2020, we will continue to drive our top-line by executing on our sales strategies and the various refinished channels at which we serve. Please turn to page 8 for Canada.

Sales for the fourth quarter were stable year-over-year as a contribution from acquisitions offset the negative organic growth in the fourth quarter. Organic growth was impacted by the different timing of the sales of PBE, as indicated in the previous quarter, which was partially offset by the higher sales of our private brand products.

When you look at the full year of 2019 in constant currencies, sales were up 4.8% driven by solid organic growth of 2.4% and the contribution of the business acquisitions. In the quarter, we continue to grow Bumper to Bumper membership and loyalty.

We also experienced another strong quarter of improvement of our company owned stores, which bodes well for us in 2020. We continued with the integration of one store, the completion of the integration of the parts watch point-of-sales system in all the legacy Bumper to Bumper company-owned stores.

We also continue with a successful integration of the Autochoice acquisition last year. Our adjusted earnings before tax reached $3.6 million or 3% of sales, down from $6.5 million or 5.3% of sales last year.

Realized savings from the PIP and the contribution from acquisition were more than compensated by the stable one-time items of the fourth quarter of last year. However, when comparing to last year adjusted earnings before tax were up 27.8% to $25.3 million and the related margin reached 4.9% up 100 basis points.

Now turn to page 9 for The Parts Alliance please. In constant currency sales decreased 1.3% versus the same period last year due to the erosion of the sales of 80 basis points, resulting from the integration of that company-owned stores and the negative organic growth.

Organic growth continued to be impacted by the macroeconomic challenges in the UK, partially offset by the contribution of the recently opened greenfields. In the quarter we opened two for a total of five for the year and 20 since we acquired TPA.

To address the new market realities, we accelerated the PIP. We reshaped our regional management teams, improved our productivity in our logistics to support our sales and network efficiencies.

We also integrated six stores in the quarter for a total of 10 for the year, ending the year at 179 stores. These initiatives will not only benefit TPA in the short term, but they will position the business positively as the market gradually recovers.

On a year-over-year basis, the adjusted earnings before tax for the quarter was $300,000 or 0.3% of sales, compared to $1.2 million or 1.2% of sales last year. The decrease was primarily due to lower sales volume, recent investment in our supply chain of five greenfields, our new national distribution center, the 18 converted branches into regional hubs, partially offset by the savings of the PIP, which starting to materialize as expected in a more meaningful way.

The UK left the EU on January the 31st entering into 11 month transition period, which could also create an ongoing uncertainty. Having said this, it is important to understand that, the long-term fundamentals of the UK autoparts market remains sound and we'll continue to execute our business strategy.

In fact, with a recent greenfields open, we were able to further support the national account business in the quarter. We expect to see that to continue in 2020.

Furthermore, in 2020 we integrated -- we will integrate the last operating entity to TPA's point of sale systems, which will lead to additional operating benefits and greater efficiency. I will now turn the call over to Eric to complete the financial review.

Eric?

Thank you, Brent. Good morning, everyone.

Please turn to page 13 for the consolidated profits. For the fourth quarter, we reported a loss of $49.4 million or $1.17 per share versus the loss of $2.4 million or $0.006 per share last year, mainly due to special non-recurring costs, in particular an impairment loss on goodwill related to the UK totalling $45 million or $1.06 per share.

Adjusted earnings for the quarter totalled $4.6 million or $0.11 per share versus $5.4 million or $0.13 per share last year. The decrease in adjusted earnings was mainly attributable to lower adjusted earnings before tax and a different income tax rate.

In addition, additional information is available on Slide 21, including pro forma adjusted EBITDA to help you better understand our results. Now, let me comment on our cash flow on page 14.

The fourth quarter of 2019, cash flow provided by operating activities were $3.5 million versus $13.4 million last year. This variation was mainly attributable to different timing of purchases and vendor financing transaction, partly offset by reduced purchases of inventory and lower corporate tax installment.

In fact, we continue to optimize our inventory throughout the three operating segments. We generated $24.1 million of free cash flow for the quarter compared to $7.8 million last year due to lower level of corporate tax installment and investment in capital expenditure.

For the year, we generated $32.3 million in cash flow from operations, down from $95.6 million last year, mainly as a result of a onetime $55 million cash outflow due to change in payment terms for one of our large supplier. Excluding this factor, we would have ended the year literally in line with 2018.

Given the situation, we managed our balance sheet very prudently throughout the year. As shown on our consolidated cash flow statements, we reduce our net investment in merchant advances from $32.6 million in 2018 to $10.4 million in 2019 spending marginally less than our normal run rate.

We also did not make any material acquisition and maintained our net investment in CapEx at $22.1 million. A similar level to 2018.

Dividends were also maintained at similar level of $11.9 million. In fact, when taking these individual item as a whole, we invested $55 million less in 2019 than in 2018 and generated $19.5 million with a sale of ProColor banner program.

Today, the board of directors declared a quarterly dividends of $0.0925 per share valuable on April 21, 2020 to shareholders of record as of March 31, 2020. This represents a dividend yield of 2.79% at the yesterday closing price.

Turning to page 15. As of December 31, 2019, our outstanding total net debt stood at $449 million, including $101 million of lease obligation versus $530 million including $104 million of lease obligations three months earlier.

And our funded debt to adjusted EBITDA ratio stood at 3.46 times versus 4.09 time last quarter. This reduced average is a direct result of the convertible debenture financing company did in December.

In addition to providing us with greater flexibility, this financial instrument immediately improve our leverage ratio and bank covenants as it is considered quasi equity for both bank covenant operation and for our reported ratios. This completes the financial review for the fourth quarter.

I will now turn the call over to Brent to conclude.

Thank you, Eric. The successful execution of the performance improvement plans in each of the businesses the strategic review now being concluded, the new financing in place, we are well-positioned for continued transformation of our operations and set the path forward for our future growth.

In 2020, we will build on the work we've accomplished in 2019 by executing our sales initiatives which will continue to position the business for strategic growth. Our new continuous improvement culture will continue to improve our profitability in all three business segments and maximize our shareholder value.

I would like to take a moment to discuss the Investor Relation activities. We're taking the opportunity to inform you that, we're looking into an Investor Day in the coming months.

We will provide more detail once we finalize the date. In closing, we want to thank our shareholders, our customers, our team members, and our suppliers for their ongoing support.

This concludes the presentation. We're now ready for your questions.

Thank you.

Good morning, gentleman.

Good morning Benoit.

Yeah. Could you talk a little bit about the expectation for 2020 in terms of organic growth given this soft finish we saw toward the end of 2019, and maybe what kind of color you can provide in terms of the organic growth expectation.

Thank you.

So, Benoit, we're not giving guidance or outlook on 2020 at this time. We're pretty much focused on the continual improvement to the business and operating at this point.

So at this point, we're not giving outlook.

Okay, perfect. And when I look at the PIP, obviously you are now closer to 51 million, what would be the incremental contribution in terms of cost saving that we should see in 2020, that would come from the PIP?

Benoit, if you you're looking at our remarks during the call, where we said is the actions taken in 2019 and realized in 2019, which is basically $31.9 million, about half of that was actually impacted our 2019 results. And off that amount of the $31.9 million, 20% was actually finance in Q4.

So the fact that it tells you a bit about the run rate going forward with that, what was strategic initiatives that we've done.

Okay. Okay, perfect.

And given the softer markets environment, when I look at the organic growth, would it be fair to expect further cost reduction initiative on top of the $51 million that you've announced so far?

I would just simply say yes, Benoit, we believe that, there's plenty of opportunities for us to continue to optimize the three business segments. Our culture really be about a continual improvement process, so that it's just not an event or it will be a part of our ongoing process.

Okay. Perfect.

And Eric, when I look at your balance sheet 3.5 time at the end of the year, if you exclude the convertible debt, could you talk a little bit about the free cash flow expectation for 2020, and the flexibility that your balance sheet provides right now to invest in the business organically or through M&A?

Yeah. So look, first of all, in 2020, there's nothing that we are aware at this point that would impact from a supplier perspective and supply chain perspective, payment terms that we have, right?

So the event that we experienced in 2019 with the reversal of some of the payables into payment terms, we don't expect that in 2020. So that's the first thing.

If you look at our cash generation in 2018-2019. It's somewhat similar.

So I think it's a good guidance to think about this going forward. And the other factor you have to keep in mind is we use about 55% of the CAD125 million, convertible bond was used to apply against the debt.

The balance is money that was applied against the revolver, but can be used, obviously, for M&A or growth opportunities, including continuous improvement initiatives that we have throughout the three businesses. So I think we have the flexibility in 2020 to do what we are set up to do and also provide additional return to the shareholders as advisors activities that we're conducting.

Okay, could you talk a little bit about your organic growth opportunities, your CapEx expectation for 2020. And maybe the potential capital and low geared toward M&A that you foresee for 2020 Eric?

Well, all I can tell you is my expectation terms of CapEx is very much in line with what we spent in 2018 and 2019. As it relates to organic growth, it's a big question right Benoit with what's going on worldwide, who knows what will be the impact on the GDP growth of their different countries.

But no, all things being equal I would expect similar trends in 2020 than we experienced in 2019. And we're, we're well positioned in the UK for recovery.

And we've done a lot of work to make sure that whatever we did under fifth would not impact the business negatively if there is a recovery. That's a good thing, getting businesses is healthy and performing and we there's nothing in horizon they will tell me that this should be materially different.

And FinishMaster as we all know, and we've done a lot of work at FinishMaster. And expect to reap some of the benefits of that in the coming quarters.

Okay, and lastly for me. Could you maybe provide some color about the retention, the capabilities to retain employee and dependent cover given you went through this strategic review.

I'm just curious whether it has impacted some key matrix or going our turnover ratios. Any select given the strategic review that was completed?

Excellent question, Benoit. I would say from a customer point of view, our customers have never been stronger.

Our loyalty is at a high rate today higher than in the past. And I think we've continued to invest in a value proposition for them so that they can grow their business and we can be a better supplier to them.

From an employee engagement point of view, certainly, as we went through the plans in each one of the three businesses, it's had an impact to our overall turnover rate. But our key employees are certainly secure.

And they're driving the change and leading the continual improvements inside the businesses. So no fear from that.

Perfect. Thank you very much for the time.

My first question is on the competitive dynamics in the paint industry and specifically, I guess what percentage of your sales today are being made MSOs. I know in the past, you've defined MSO anything three stores or more.

But I guess what I'm trying to figure out is how much further margins can potentially erode as this consolidation team continues at the MSO level? And yeah what the kind of mix of your existing revenue is from MSO versus the true large MSOs who would be getting a lower fee versus the mom and pops?

Look, I think it depends somewhat on the activities that the MSO may or may not pursuing in 2020, right? As you probably know, we are more exposed to national MSOs.

We have a high concentration on that type of business at FinishMaster perhaps then did the market as a whole. It's a question of alignment with our paint manufacturers.

I will tell you that, a lot of it is driven by what happens in the market at a fair level, which we can't predict this, one would consolidate this market or that market. When that happens, it certainly has some impact on our business model and our margins and we'd have to adapt to that reality.

As it relates to the speed of migration, look, fundamentally speaking, there is a trend that trend's been around for the last couple of years. We expect this trend to continue and part of the restructuring that we conducted in 2019 was to allow us to be successful in that segment.

Okay. And then, in terms of the increase in the competitive dynamic is in the industry, can you just give him a bit of color on where that's coming from?

Yeah. I think it's important to keep in mind that, when you have a consolidating market, the way we're experiencing in the paint business, some of the independent distributors will focus on some niche markets or down markets in some cases.

And that is certainly a competitive area where a lot of the distribution is focusing because of what's going on in the national and regional level, right? This is just a normal outcome of that competitive landscape.

So, in a way, that's where I would say the bigger pressure is, that we tend to see on the smaller accounts, and then you have the fundamental trend of a consolidation happening. So, you've got sort of two different factors going on in the industry.

Got it. Okay.

And then in terms of in the UK, are you seeing increased competition there as the macro headwinds evolve or is it mostly just a lower top level demand from the macro headwinds?

I would say, we really haven't. I think all of our competitors are going through the same things that we're going through.

Certainly everything's being indicated us that we're not experiencing anything different than they are. So, I think it's purely a top line that is in the entire country at this point.

Okay. And then on M&A potential, in the past, we've mentioned there's a lot of opportunities in the jobber network in Canada.

Is that still a priority focus to continue working with the jobbers on succession planning?

Absolutely, yes. I mean, we're looking at it from a strategic point of view and not opportunistic standpoint.

So, I would tell you it's clearly it's part of the growth strategy for Canada moving forward.

And then on the dividends, I mean, the payout ratio is fairly low at fortyish percent. Any plans to sort of rethink the dividend strategy at all?

Well that that will be something at the Board meeting, we're looking to foreseeable future. But for now, based on where we know we're opening our dividend numbers as we stated in the Q4.

Okay, great. Thanks very much.

Good morning. Two quick ones for me.

Could you give us some examples of the optimization opportunities you'll be pursuing in 2020 in each segment?

Well, I would say that we're continuing to look at further automation in all of our processes, certainly whether it's back office or in our distribution in our branch network. We're also looking at workforce planning and how we optimize our workforces.

And also we're looking at our route optimization. So we can be really not only environmentally friendly but also benefit from our P&L point of view.

So those are three major initiatives that we're looking at in all three businesses.

And freight rates have come off quite a bit from where they were last year. Is that having a significant impact on your bottom line?

I haven't seen that yet. So I think you know, it's not been materialized -- a material impact to us at this point.

Okay, thanks. And then one last one.

Do you expecting any incremental contribution from ramping industrial paint distribution in 2020.

Certainly it is one of our growth sectors that we mentioned that we're supporting. And we're looking for that to continue to grow.

And we've made a significant investments in our sales organization around that as well as operationally. So yes, we're looking for that to continue to grow at a rapid rate.

Hopefully,

Good morning. I appreciate that you'll be holding an investor day in the coming months.

But sorry, can you just review for us what areas, the further strategic initiatives this year might cover? Will they be -- maybe which dividends will be?

Are you mentioned the route optimization for FinishMaster? I missed the first part of your comments there.

No. So they're not.

They're just all three business segments. We're looking at route optimization and all of our branches.

And we have branches in all three businesses today. We're certainly looking at automation in all of our back-office processes.

We're looking at investing in to BI and all three of our businesses to further drive efficiencies and be able to manage more effectively. So I mean all three of the things that we have a list of network initiatives in all three businesses that will continue to move the service in a more efficient manner in a more effective manner for both our customers as well as our benefit to our profitability.

Thanks, I appreciate that you're not providing guidance. But I believe the paint suppliers generally are looking for volumes to be sort of flat to maybe down slightly to market level and pricing to be up modestly.

In 2020 do you have any thoughts as to the outlook for the overall market for 2020? And over the medium term?

Yeah, look, we said in the speech, if you think about collision claims, we've seen some reduction collision change in the last few years and we don't expect that trend necessarily to change. Volume I think that as we discussed in the past is fairly stable to reducing.

So the reality is the organic growth so to speak, is typically coming from price increase, and then the question becomes when is a time middle price versus envisioned? There's probably more in the second half.

As we know at this point, having said that the manufacturer could decide to push price increases sooner or not. But based on what we know at the paint level, it should be more in the second half of the year.

Thanks. And on the competition, I believe this is the second quarter where that's been called out.

Was there a step change in competitive dynamics at some point last year, that there will be lapped sort of by the second half of this year?

No, I wouldn't say there's been an event or, I think it's what we're seeing in the market and as I was explaining earlier on the fact that, you got some more localized distributors that are fighting for a market share in a local market that is getting smaller and smaller, right? And that's where we seen to market, because those national accounts or regional accounts have been consolidating, and that what we're referring to in terms of pricing pressure in that tier of traditional smaller accounts.

Thanks. And, if I could just ask about the Board changes, how many Board Meetings have there been since January 1st and Birch Hill provided any indication of changes they would like to see?

So I would say this is our first Board Meeting since the first of the year, and Birch Hill, we're very excited to have them to be part of the Board and certainly, we have 9 Board members and they have their position and all of them speak their mind. So, I'm not worried about two.

I have nine, but, no, not at this point. It's all good.

Okay. Thanks for your comments.

Thank you very much. We look forward to seeing you and talking to you in the very near future and certainly as we indicated, as soon as we get the finalized date for the Investor Day, Eric and I will be sharing that with you.

Thank you for your support.