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- Consistent sales growth provides improvement
in operating expense leverage -
WINNIPEG, MB, Nov. 10,
2023 /CNW/ - Boyd Group Services Inc. (TSX:
BYD.TO) ("BGSI", "the Boyd Group", "Boyd" or "the Company") today
announced the results for the three and nine month period ended
September 30, 2023. The Boyd Group's third quarter 2023
financial statements and MD&A have been filed on SEDAR+
(www.sedarplus.ca). This news release is not in any way a
substitute for reading Boyd's financial statements, including notes
to the financial statements, and Boyd's Management's Discussion
& Analysis.
Results and Highlights for the Third Quarter Ended
September 30, 2023:
- Sales increased by 17.9% to $737.8
million from $625.7 million in
the same period of 2022, including same-store sales1
increases of 11.8%. The third quarter of 2023 recognized one less
selling and production day when compared to the same period of
2022, which decreased selling and production capacity by
approximately 1.6%
- Gross Profit increased by 18.3% to $333.8 million or 45.2% of sales from
$282.3 million or 45.1% of sales in
the same period in 2022
- Adjusted EBITDA1 increased 28.7% to $94.0 million, or 12.7% of sales, compared with
Adjusted EBITDA of $73.0 million, or
11.7% of sales in the same period of 2022
- Adjusted net earnings1 increased to $21.5 million, compared with $12.1 million in the same period of 2022 and
adjusted net earnings per share1 increased to
$1.00, compared with $0.56 in the same period of 2022
- Net earnings increased to $20.5
million, compared with $11.9
million in the same period of 2022 and net earnings per
share increased to $0.95, compared
with $0.55 in the same period of
2022
- Debt, net of cash before lease liabilities increased from
$316.9 million at June 30, 2023 to $356.8
million at September 30,
2023
- Declared third quarter dividend in the amount of C$0.147 per share
- Added 21 collision repair locations, including 17 through
acquisition and four start-up locations
______________________________________________
|
1 Same-store
sales, Adjusted EBITDA, Adjusted net earnings and Adjusted net
earnings per share are non-GAAP financial measures and ratios and
are not standardized financial measures under International
Financial Reporting Standards and might not be comparable to
similar financial measures disclosed by other issuers. For
additional details, including a reconciliation of each non-GAAP
financial measure to its nearest GAAP equivalent, please see
"Non-GAAP financial measures and ratios" section of this news
release.
|
Subsequent to Quarter End
- Added nine collision repair locations, including six through
acquisition and three start-up locations
- Announced a dividend increase of 2.0% to $0.600 per share annualized from $0.588 per share annualized
"We are pleased with the results reported in the third quarter
of 2023, which continue to show increased same-store sales and
steady growth of single locations", said Timothy O'Day, President & Chief Executive
Officer of the Boyd Group. "Gross margin improved in the third
quarter of 2023 when compared to the same period of the prior year,
but reduced slightly when compared to the second quarter of 2023
due to seasonal vacations", added Mr. O'Day. "Improvement in
operating expense leverage resulted in consistent Adjusted EBITDA
margin when comparing the second and third quarters of 2023."
Results of
Operations
|
For the three months
ended,
September 30,
|
For the nine months
ended,
September 30,
|
(thousands of U.S.
dollars, except per share amounts)
|
2023
|
% change
|
2022
|
2023
|
% change
|
2022
|
|
|
|
|
|
|
|
Sales –
Total
|
737,798
|
17.9
|
625,663
|
2,205,974
|
22.9
|
1,795,224
|
Same-store sales –
Total
(excluding foreign
exchange)(1)
|
698,014
|
11.8
|
624,428
|
2,099,938
|
18.3
|
1,774,685
|
|
|
|
|
|
|
|
Gross margin
%
|
45.2 %
|
0.2
|
45.1
|
45.5 %
|
1.3
|
44.9 %
|
Operating expense
%
|
32.5 %
|
(2.7)
|
33.4
|
33.1 %
|
(2.1)
|
33.8 %
|
|
|
|
|
|
|
|
Adjusted EBITDA
(1)
|
93,972
|
28.7
|
73,042
|
274,040
|
37.8
|
198,807
|
Acquisition and
transaction costs
|
1,331
|
447.7
|
243
|
2,859
|
154.4
|
1,124
|
Depreciation and
amortization
|
50,851
|
15.7
|
43,967
|
141,068
|
7.8
|
130,832
|
Fair value
adjustments
|
—
|
N/A
|
—
|
—
|
N/A
|
146
|
Finance
costs
|
13,449
|
35.4
|
9,931
|
37,666
|
37.8
|
27,341
|
Income tax
expense
|
7,843
|
11.6
|
7,029
|
24,857
|
97.5
|
12,586
|
|
|
|
|
|
|
|
Adjusted net
earnings (1)
|
21,483
|
78.3
|
12,052
|
69,706
|
151.1
|
27,756
|
Adjusted net earnings
per share (1)
|
1.00
|
78.6
|
$
0.56
|
3.25
|
151.9
|
1.29
|
|
|
|
|
|
|
|
Net earnings
|
20,498
|
72.7
|
11,872
|
67,590
|
152.4
|
26,778
|
Basic earnings per
share
|
0.95
|
72.7
|
0.55
|
3.15
|
152.0
|
1.25
|
Diluted earnings per
share
|
0.95
|
72.7
|
0.55
|
3.15
|
152.0
|
1.25
|
1. Same-store sales,
Adjusted EBITDA, Adjusted net earnings and Adjusted net earnings
per share are non-GAAP financial measures. Please see "Non-GAAP
Financial Measures and Ratios" section of this news
release.
|
Outlook
"Boyd continues to execute on its growth strategy. During 2023,
the Company has added 78 single locations, while at the same time
achieving same-store sales increases of 18.3% for the year thus
far", said Mr. O'Day. "While quarterly same-store sales
increases have tapered from those experienced during the period
following the pandemic and pandemic related disruptions, over the
past five and ten year periods, the Company has posted average
quarterly same-store sales increases of 6.7% and 5.9% respectively.
Thus far in the fourth quarter, same-store sales increases are
lower than what was experienced in the third quarter of 2023, but
remain ahead of the average five year level of same-store sales
growth."
"Although productive capacity continues to impact sales levels
that can be achieved, workforce initiatives have had a positive
impact and ongoing investments in technology, equipment and
training position the Company well for continued operational
execution", continued Mr. O'Day. "Client pricing increases resulted
in improvement in labor margins; however, margins remain below
historical levels. This remains a key area of focus for the
Company, impacting both the gross margin percentage and Adjusted
EBITDA margin percentage that can be achieved in the short
term."
"The United Auto Workers strike did not impact Boyd's ability to
source parts required to complete collision repairs during the
third quarter of 2023. Despite the tentative settlements underway,
the duration of the strike has resulted in modest delays in the
supply of certain parts, and therefore the completion of a small
number of repairs during the fourth quarter thus far", said
Mr. O'Day.
"The pipeline to add new locations and to expand into new
markets is robust. Boyd has made investments in resources to
support growth through single locations, multi-location businesses,
or a combination of single and multi-location businesses, giving
the Company flexibility on how best to grow. Operationally, we are
focused on optimizing performance of new locations, as well as
scanning and calibration services, and consistent execution of the
WOW Operating Way. Given the high level of location growth in 2021,
the strong same-store sales growth during 2022, and the combination
of same-store sales growth and location growth thus far in 2023, we
remain confident that the Company is on track to achieve its
long-term growth goals, including doubling the size of the business
on a constant currency basis from 2021 to 2025 against 2019
sales."
2023 Third Quarter Conference Call & Webcast
As previously announced, management will hold a conference call
on Friday, November 10, 2023, at
10:00 a.m. (ET) to review the
Company's 2023 third quarter results. You can join the call by
dialing 888-390-0546 or 416-764-8688. To join the conference call
without operator assistance, you may register and enter your phone
number at https://emportal.ink/3Mbh9Vw to receive an instant
automated call back. A live audio webcast of the conference call
will be available through www.boydgroup.com. An archived replay of
the webcast will be available for 90 days. A taped replay of the
conference call will also be available until Friday, November 17, 2023, at midnight by calling
888-390-0541 or 416-764-8677, replay entry code 114778#, reference
number 07114778.
About Boyd Group Services Inc.
Boyd Group Services Inc. is a Canadian corporation and controls
The Boyd Group Inc. and its subsidiaries. Boyd Group Services Inc.
shares trade on the Toronto Stock Exchange (TSX) under the symbol
BYD.TO. For more information on The Boyd Group Inc. or Boyd Group
Services Inc., please visit our website at
https://www.boydgroup.com.
About The Boyd Group Inc.
The Boyd Group Inc. (the "Company") is one of the largest
operators of non-franchised collision repair centres in
North America in terms of number
of locations and sales. The Company operates locations in
Canada under the trade names Boyd
Autobody & Glass (https://www.boydautobody.com) and Assured
Automotive (https://www.assuredauto.ca) as well as in the U.S.
under the trade name Gerber Collision & Glass
(https://www.gerbercollision.com). In addition, the Company is a
major retail auto glass operator in the U.S. with operations under
the trade names Gerber Collision & Glass, Glass America, Auto
Glass Service, Auto Glass Authority and Autoglassonly.com. The
Company also operates a third party administrator, Gerber National
Claims Services ("GNCS"), that offers glass, emergency roadside and
first notice of loss services. For more information on The Boyd
Group Inc. or Boyd Group Services Inc., please visit our website at
(https://www.boydgroup.com).
Non-GAAP Financial Measures and Ratios
Same-store sales, Adjusted EBITDA, Adjusted net earnings and
Adjusted net earnings per share are non-GAAP financial measures.
Boyd's management uses certain non-GAAP financial measures to
evaluate the performance of the business and to reward employees.
These non-GAAP financial measures are not defined in International
Financial Reporting Standards ("IFRS") and should not be considered
an alternative to net earnings or sales in measuring the
performance of BGSI.
The following is a reconciliation of BGSI's non-GAAP financial
measures and ratios:
ADJUSTED EBITDA
Standardized EBITDA and Adjusted EBITDA are measures commonly
reported and widely used by investors and lending institutions as
an indicator of a company's operating performance and ability to
incur and service debt, and as a valuation metric. They are also
key measures that management uses to evaluate performance of the
business and to reward its employees. While EBITDA is used to
assist in evaluating the operating performance and debt servicing
ability of BGSI, investors are cautioned that EBITDA and
Adjusted EBITDA as reported by BGSI may not be comparable in all
instances to EBITDA as reported by other companies.
|
Three months
ended
September
30,
|
|
Nine months
ended
September
30,
|
(thousands of U.S.
dollars)
|
2023
|
2022
|
|
2023
|
2022
|
|
|
|
|
|
|
Net earnings
|
$
20,498
|
$
11,872
|
|
$
67,590
|
$
26,778
|
Add:
|
|
|
|
|
|
Finance
costs
|
13,449
|
9,931
|
|
37,666
|
27,341
|
Income tax
expense
|
7,843
|
7,029
|
|
24,857
|
12,586
|
Depreciation of
property, plant and
equipment
|
15,884
|
11,824
|
|
40,639
|
35,623
|
Depreciation of right
of use assets
|
28,443
|
25,798
|
|
81,143
|
75,115
|
Amortization of
intangible assets
|
6,524
|
6,345
|
|
19,286
|
20,094
|
Standardized
EBITDA
|
$
92,641
|
$
72,799
|
|
$
271,181
|
$
197,537
|
Add:
|
|
|
|
|
|
Fair value
adjustments
|
—
|
—
|
|
—
|
146
|
Acquisition and
transaction costs
|
1,331
|
243
|
|
2,859
|
1,124
|
Adjusted
EBITDA
|
$
93,972
|
$
73,042
|
|
$
274,040
|
$
198,807
|
ADJUSTED NET EARNINGS
BGSI believes that certain users of financial statements are
interested in understanding net earnings excluding certain fair
value adjustments and other items of an unusual or infrequent
nature that do not reflect normal or ongoing operations of the
Company. This can assist these users in comparing current results
to historical results that did not include such items.
(thousands of U.S.
dollars, except share and per share amounts)
|
Three months
ended
September
30,
|
Nine months
ended
September
30,
|
|
2023
|
2022
|
2023
|
2022
|
|
|
|
|
|
Net earnings
|
$
20,498
|
$
11,872
|
$
67,590
|
$
26,778
|
Add:
|
|
|
|
|
Fair value adjustments
(non-taxable)
|
—
|
—
|
—
|
146
|
Acquisition and
transaction costs (net of tax)
|
985
|
180
|
2,116
|
832
|
|
|
|
|
|
Adjusted net
earnings
|
$
21,483
|
$
12,052
|
$
69,706
|
$
27,756
|
Weighted average number
of shares
|
21,472,194
|
21,472,194
|
21,472,194
|
21,472,194
|
Adjusted net earnings
per share
|
$
1.00
|
$
0.56
|
$
3.25
|
$
1.29
|
SAME-STORE SALES
Same-store sales is a non-GAAP measure that includes only those
locations in operation for the full comparative period. Same-store
sales is presented excluding the impact of foreign exchange
fluctuation on the current period.
|
Three months
ended
September
30,
|
Nine months
ended
September
30,
|
(thousands of U.S.
dollars)
|
2023
|
2022
|
2023
|
2022
|
|
|
|
|
|
Sales
|
$
737,798
|
$
625,663
|
$
2,205,974
|
$ 1,795,224
|
Less:
|
|
|
|
|
Sales from locations
not in the comparative
period
|
(41,273)
|
(752)
|
(115,886)
|
(17,874)
|
Sales from
under-performing facilities closed
during the
period
|
—
|
(483)
|
9
|
(2,665)
|
Foreign
exchange
|
1,489
|
—
|
9,841
|
—
|
|
|
|
|
|
Same-store sales
(excluding foreign exchange)
|
$
698,014
|
$
624,428
|
$
2,099,938
|
$ 1,774,685
|
Caution concerning forward-looking statements
Statements made in this press release, other than those
concerning historical financial information, may be forward-looking
and therefore subject to various risks and uncertainties. Some
forward-looking statements may be identified by words like "may",
"will", "anticipate", "estimate", "expect", "intend", or "continue"
or the negative thereof or similar variations. Readers are
cautioned not to place undue reliance on such statements, as actual
results may differ materially from those expressed or implied in
such statements. Factors that could cause results to vary include,
but are not limited to: employee relations and staffing; margin
pressure and sales mix changes; acquisition risk; operational
performance; brand management and reputation; market environment
change; reliance on technology; supply chain risk; pandemic risk
& economic downturn; changes in client relationships; decline
in number of insurance claims; environmental, health and safety
risk; climate change and weather conditions; competition; access to
capital; dependence on key personnel; tax position risk; corporate
governance; increased government regulation and tax risk;
fluctuations in operating results and seasonality; risk of
litigation; execution on new strategies; insurance risk; interest
rates; U.S. health care costs and workers compensation claims;
foreign currency risk; low capture rates; capital expenditures; and
energy costs and BGSI's success in anticipating and managing the
foregoing risks.
We caution that the foregoing list of factors is not
exhaustive and that when reviewing our forward-looking statements,
investors and others should refer to the "Risk Factors" section of
BGSI's Annual Information Form, the "Risks and Uncertainties" and
other sections of our Management's Discussion and Analysis of
Operating Results and Financial Position and our other periodic
filings with Canadian securities regulatory authorities. All
forward-looking statements presented herein should be considered in
conjunction with such filings.
SOURCE Boyd Group Services Inc.