Good afternoon, ladies and gentlemen, welcome to Richelieu Hardware fourth quarter results conference call. At this time, all lines are in listen-only mode. Following the presentation, we will conduct a question-and-answer session, which will be restricted to analysts only. If at any time during this call you require video assistance, please press star zero for the operator. This call is being recorded on January 21st, 2021.
Merci. Thank you. Good afternoon, ladies and gentlemen, and welcome to Richelieu conference call for the fourth quarter and 12-month period ended November 30th, 2020. With me is Antoine Auclair, CFO. As usual, note that some of today's issue include forward-looking information, which is provided with the usual disclaimer as reported in our financial filings. The fourth quarter was another period of high profitability and strong increase in sales, resulting both from internal growth and acquisitions.
Let's take a quick look at the Q4 financial highlights. Total sales increased by 20.4%, including 12% from organic growth and 8.4% from acquisitions. Sales to manufacturers were up 15.7%. Sales rose by 55.4% in the retailers and renovation superstore market. I also point out a 33.5% increase in EBITDA for the year, totaling CAD 150 million, or 13.7%, and a 31.2% increase in net earnings per share, reaching CAD 1.60 compared to CAD 1.16 last year.
These results as an essential service provider were achieved thanks to our business model and strategies, which continue to prove their efficiency, mainly our one-stop approach for the service, our innovation strategy, our market diversification, our acquisition strategy, which made a good contribution to the results for the quarter and whole year. Five acquisitions were completed in fiscal 2020, adding over CAD 70 million in annual sales. Rigorous cost control and finally, the support and dedication of our team. Under the circumstances, we are very satisfied with the results for fiscal 2020, which shows we have spared no effort to continue to provide maximum support to our customers with care and quality. Antoine will now review the fourth quarter and fiscal year results and the financial position as at November 30th, 2020.
Thanks, Richard. Fourth quarter sales reached CAD 319 million, up by 20.4%. Sales to manufacturers stood at CAD 270.2 million, up by 15.7%, 9.8% from internal growth and 5.9% from acquisitions. In the hardware retailers and renovation superstores market, we achieved sales of CAD 48.8 million, up by 55.4%, of which 28.5% resulting from internal growth and 26.9% from acquisitions. In Canada, sales amounted to CAD 215 million, an increase of CAD 35.9 million. Our sales to manufacturers reached CAD 174.5 million, up by 15.8%.
As for the hardware retailers and renovation superstores markets, sales stood at CAD 40.5 million, up by 42.6%. In the U.S., sales totaled $78.9 million, up 21.6%, of which 6.9% resulting from internal growth and 14.7% from acquisitions. Sales to manufacturers reached $72.6 million, up by 15.8%. In the hardware retailers and renovation superstores market, sales were up $4.1 million or 186% for the quarter, resulting mainly from acquisitions.
Total sales in the U.S. reached CAD 104 million, an increase of 21.1%, representing 32.6% of total sales. Total sales in 2020 reached CAD 1.128 billion, up by 8.3%, 0.7% from internal growth and 7.6% from acquisitions. Sales to manufacturers reached CAD 938 million, up by 4.5%, 5.4% from acquisition and 0.9% from internal decrease, resulting from the slowdown in the second quarter due to the pandemic. Sales to hardware retailers and renovation superstores stood at CAD 189.7 million, up by 32.2%, 10.2% from internal growth and 22% from acquisitions. In Canada, sales totaled CAD 730 million, up by 6.4%, of which 5% from acquisition and 1.4% from internal growth. Our sales to manufacturers amounted to CAD 581 million, up by 2.1%, of which 4.1% resulting from acquisition and 2% from internal decrease. Sales to hardware retailers and renovation superstores were CAD 117 million, up by 27%.
In the U.S., sales amounted to $296.3 million, up by 10.8%, 12.6% from acquisition, and 1.9% from internal decrease. They reached CAD 397.9 million in Canadian dollars, up by 11.9%, accounting for 35% of total sales. Sales to manufacturers reached CAD 265.9 million, an increase of 7.3% entirely from acquisition. Sales in the hardware retailers and renovation superstores market were up by 53.5% in U.S. dollars. Fourth quarter EBITDA stood at CAD 46.7 million, compared with CAD 35 million last year, up 33.5%. The EBITDA margin stood at 14.6%, compared with 13.2% for the fourth quarter of 2019, resulting from increased sales together with cost reduction measures implemented. For the year, EBITDA was CAD 154.5 million, up by 24.4%. Gross margin remained stable with 2019. EBITDA margins stood at 13.7%, compared with 11.9%, resulting from increased sales, as well as cost reduction measures and government grants.
Fourth quarter net earnings attributable to shareholders totaled CAD 27.1 million, compared with CAD 19.1 million last year. Net earnings per share reached CAD 0.48 basic and diluted, compared with CAD 0.24 for the same quarter last year, an increase of 41.2%. For the year, net earnings attributable to shareholders reached CAD 85.2 million. Net earnings per share were CAD 1.50 diluted, up by 29.3%. Fourth quarter cash flow from operating activities before net change in non-cash working capital balances were up by 29.5% to CAD 36.2 million or CAD 0.64 per share. Net change in non-cash working capital balances used cash flow of CAD 2.7 million. For the year, they were up 23.5%, totaling CAD 121 million or CAD 2.14 per share. Net change in non-cash working capital balances represented a cash inflow of CAD 24.6 million.
During the year, we paid dividends of CAD 11.3 million, of which CAD 3.8 million were in the fourth quarter, and repurchased common share for CAD 25 million. We have thus distributed a total of CAD 36.3 million to our shareholders this year. We also invested CAD 45.5 million during the year, of which CAD 33.1 million was for business acquisition and CAD 12.4 million for equipment to maintain and improve operational efficiency and for IT equipment. As at November 30th, 2020, cash totaled CAD 73.9 million and our working capital was CAD 377 million for a current ratio of 3.6:1. I now turn it over to Richard.
Thank you, Antoine. In the current situation, we continue to strictly respect all prevention measures issued by the various government to protect our employees, customers, and business partner as much as possible. We will continue to be proactive and manage the business efficiently while remaining very watchful of the evolving health and business environment. We will continue to apply the strategies that have paid off so far, mainly our strategies of innovation, business acquisition, distinctive service, e-commerce with richelieu.com, and market development. Our core strengths provide a sound foundation on which we continue to build steadily. Our business model well adapted to our customers' needs, our value-added service, the quality and efficiency of our network of 84 strategic centers, the number and diversity of our customers, our commitment and dedicated team, and the soundness of our financial position.
In conclusion, I would like to mention that this morning, the board of directors approved a 4.6% increase in the quarterly dividend to CAD 0.07, as well as the payment of a special dividend of CAD 0.0667 as a compensation for the dividend that was not declared in the first quarter of 2020. I take this opportunity to thank our team and business partners for their support in this challenging period. Thanks, everyone. With that, I'll be happy to answer your question.
Thank you. Ladies and gentlemen, we will now begin the question-and-answer session for analysts only. Your first question is from Hamir Patel at CIBC. Please go ahead.
Hi, good afternoon. Congrats on another strong quarter. Richard, could you comment on how sales have fared since the end of November?
I think the trend that we have in the last quarter continued to be strong with sales increase well over double digits. We expect that to continue still for a while. We don't know how long, but we still benefit from the fact that the hardware stores are buying more because we're the suppliers for essential services. We also see an increase with the manufacturers, which is stronger than it was in the last couple of quarters. Just to give you an idea, overall in North America, without acquisition, the kitchen cabinet market increased by 12%, of which 15% in Canada and 7% in the U.S. The architectural woodworking increased global 2.2%. It's flat in the U.S., but we have an increase in Canada for 7%, which is positive that this market is turning.
We have the residential furniture, which is up 8.6% all over North America. Office furniture is down 17%. We understand why this market is down because the offices, with the people working from home, means that they need a desk furniture for the offices. Another interesting aspect of our sales is what we call here the other specialized market. As a matter of fact, this topic, we have to maybe to split the various market segments that are included in this topic. Just to give you an idea, this topic for the other specialized market, our sales increased by 20%. This is due to the closet market, which is all new market, closet market, door and window market, glass hardware market, and retail market. That means the investment that we have made in these new markets are really paying off.
We see that the increases being very strong in those market segments.
Thanks, Richard. That's very helpful. I'm just curious, in Ontario and Quebec, where maybe there's of late more restrictions on construction, what impact are you expecting that to have?
We don't expect much impact with the construction. What we expect, though, is that we see that for the hardware retailers, because we had access to their POS, point of sales figures. We see that because of the restriction that both the government of Ontario and Quebec have imposed to the market, we see sales going down. That thing should last, I think at least for another two or three weeks, if I remember well. That means that we like the slowdown in the sales to the hardware store maybe next month, because so far though, they continue to buy as usual. We see that because of those new restrictions, the market is affected. As far as the construction is concerned, we don't see our customers, like the cabinet manufacturer, we don't see any slowdown so far. Things are going very well.
Okay. Thanks. That's helpful. Richard, on the last conference call, you talked about potential for price hikes on some of the products in 2021. Is that playing out? What's the magnitude of any increases and how much of the portfolio is affected?
We are working on that, actually. We don't know yet what would be the magic numbers because we have not received all the price increases from our various suppliers from around the world. We expect that, I would say that price will increase probably between 4% and 5% in the course of the next few months. Those increases will take place on certain dates. Let's say it takes about 90 days for the hardware retailers and for the manufacturers, most of it, for 80% of the market, it does apply 24 hours after we've made a decision. A few other customers that are manufacturers that we work with contract with, it takes another 60 days. Basically, yes, we have to expect that as far as we see right now.
Okay, great. No, that's helpful. That's all I had for now. I'll get back in the queue. Thanks.
Ladies and gentlemen, as a reminder, should you have a question, please press star followed by the one. Your next question is from Edward Friedman with CWB. Mr. Friedman, you may proceed.
Oh, sorry, I was on mute. The most famous sentence in 2020, I was on mute. Sorry. Again, congratulations for a very good strong quarter.
Thank you.
I have two questions. One is on the U.S. market. I was wondering if you can give some sort of an update on how the U.S. market is behaving, because when I look at your results in the U.S., your results were a little bit weaker than compared to Canada. I was just wondering if you can give an update on how the retail market is behaving in the U.S. compared to Canada. Second, about capital allocation. You did an NCIB of CAD 25 million this year and also announced another one in December. Given I imagine that you have many opportunities of acquisitions, which you did also in 2020, I was wondering if it's not better to spend the money on acquisition than to do buyback given that your flow is not enormous. That's all. Thank you.
Okay. Regarding the U.S. market, maybe Antoine will answer the second part of the question. The U.S. market, yes, we don't have the growth that we have in Canada, but the more we go since the beginning of the COVID, the more we see the sales improving in the U.S. It's hard to precisely mention what is the big difference between the Canadian and U.S. market. We thought as well that the growth could be similar, that's not the case. The more we go, though, the more it's increasing. Basically, hopefully, that will continue to improve for the next quarter, and we could have different explanation for our next call. We're on the right track in the U.S., and that's about what I can say about that. Antoine?
Yeah. If I may, for the second portion of the question. For sure that the priority for capital allocation is acquisition. The pipeline is still healthy. We have nice opportunities in the States and in Canada as well. This is the priority. We have a buyback program in place, when we have opportunities to buy back blocks, we're there, and we have a quarterly dividend policy. It's been the recipe for the past many years, and it's still the recipe. For sure, the priority is the acquisition.
Okay, thank you.
The next question is from Zachary Evershed with National Bank. Please proceed.
Good afternoon. It's actually Thomas calling in for Zachary. My two main questions have been answered. Maybe if I may ask you mentioned some cost-saving initiatives. Could you give us more color on that and what you may or may not be able to retain after the pandemic?
Yeah. With the cost-saving initiatives, it's basically in terms of resources and also travel expenses. Certainly, some of these expenses will come back to normal, but we still have measures in place to make sure that first of all, we follow the rules. We implement ban on travel. Those are still in place, and we're gonna be monitoring what's the different laws from various governments to make sure that we monitor this very carefully. Those cost reductions are still in place.
Okay. You mentioned that you still have travel ban in place. Does this make it harder for you to conduct due diligence in your M&A pipeline?
No. Okay. We have local people almost everywhere. We have our people that sit in the U.S. that go and visit the places, and the rest is done as well by phone and Teams. Antoine, could you add something to that?
Yeah. No, that's it. We've been able to close many acquisitions this year. We've done things differently. We've used our teams that are on-site. We've done things differently. It does not stop us for making acquisitions.
Fantastic. Maybe two last from me. The stress and the higher pace of activity due to COVID-19, do you think older owner operators, have you seen them come forward and maybe start discussions? Or is it unchanged and people keep their heads down and keep working?
No, not yet. Basically, like I said, the pipeline is still healthy. What you just described might happen, but not necessarily right away, because it's not necessarily the time to sell your business. You'll want to rebuild it. We think that probably some owners will have enough, and will decide that they don't want to live that again and to start a discussion with us. Like we've seen in 2009, 2010, 2011, after this period, we've seen a lot of acquisition mainly in the U.S. This could happen again, but as we speak, this did not happen yet.
Okay. Maybe my last one. We've seen some activity with bigger deals in the industry. Has Richelieu received any inbound interest to be acquired?
No. Not really.
No?
I think a lot of people are looking at Richelieu with a lot of interest. I think that because of you, that Richelieu is very well evaluated in the market so far, and the future remains great, and Richelieu would continue to be on its own as we are now. I think that's the best way to go. Whatever is going to happen in the course of 2021 and after in 2022, you've seen, that's not the first crisis that we have to live with Richelieu. We've always been successful during and after the crisis. I think all the crisis are reinforcing Richelieu. We really have the feeling that we're gaining market share because we have continued our best effort to maintain a very high service for all our customers. All our warehouses are connected together.
If a customer needs a product, wherever the product is, we make sure that the customer will receive the product as quick as possible. I don't know of that many suppliers that could achieve some good deliveries like we're doing actually to the market. We don't try to save any effort to satisfy our customer. Our warehouses are all connected together. The customer might be in Boston. The stock is not available in Boston. That's gonna come from Detroit. It could come from Toronto, from Montreal as well, if necessary. That does result in increased sales and increase of loyalty from our customers, and we keep gaining customers. That should continue on in the months to come.
Fantastic. That's all I had. Thank you very much.
Thanks.
Ladies and gentlemen, as a reminder, should you have a question, please press the star followed by the one. There are no further questions at this time. You may proceed.
Okay. If there's no more question, we'd like to thank you very much for your support, your good questions, and hopefully, we're gonna have another chance to talk to you soon, maybe to meet you soon, eventually. Thanks a lot and have a nice day.
Ladies and gentlemen, this concludes your conference call for today. We thank you for your participating and ask that you please disconnect your lines.