- Strong sales growth combined with sequential
quarterly Adjusted EBITDA improvement -
/NOT FOR DISTRIBUTION TO U.S. NEWSWIRE
SERVICES OR FOR DISSEMINATION IN THE
UNITED STATES/
WINNIPEG, MB, Nov. 9, 2022
/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 periods ended September 30, 2022.
The Boyd Group's third quarter 2022 financial statements and
MD&A have been filed on SEDAR (www.sedar.com). 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, 2022:
- Sales increased by 27.6% to $625.7
million from $490.2 million in
the same period of 2021, including same-store sales[1] increases of
21.9%. The third quarter of 2022 recognized the same number of
selling and production days when compared to the same period of
2021. Sales were modestly impacted by Hurricane Ian, with an
estimated negative impact of $2.1
million during the third quarter
- Gross Profit increased by 30.9% to $282.3 million or 45.1% of sales from
$215.7 million or 44.0% of sales in
the same period in 2021
- Adjusted EBITDA1 increased 41.8% to $73.0 million, or 11.7% of sales, compared with
Adjusted EBITDA of $51.5 million, or
10.5% of sales in the same period of 2021, which included
$0.5 million of the Canada Emergency Wage Subsidy
- Adjusted net earnings1 increased to $12.1 million, compared with $2.4 million in the same period of 2021 and
adjusted net earnings per share1 increased to
$0.56, compared with $0.11 in the same period of 2021
- Net earnings increased to $11.9
million, compared with $0.4
million in the same period of 2021 and net earnings per
share increased to $0.55, compared
with $0.02 in the same period of
2021
- Debt, net of cash before lease liabilities decreased from
$414.4 million at December 31, 2021 to $314.6 million at September 30, 2022
- Declared third quarter dividend in the amount of C$0.144 per share
- Rolled out the expanded Wow Operating Way practices to
corporate business processes
- Added eight locations, including six through acquisition, one
start-up location and one intake center
Subsequent to Quarter End
- Added five locations
- All Gerber Collision & Glass locations that were
temporarily closed due to Hurricane Ian, in the states of
Florida and South Carolina, have re-opened. The impact of
these closures on the fourth quarter results and the ability to
recover some of the costs through insurance is being assessed;
however, the impact on fourth quarter sales has been lower than
that recorded in the third quarter results
- Announced a new Executive Vice President and Chief Operating
Officer for the Collision Business
- Announced a dividend increase of 2.1% to $0.588 per share annualized from $0.576 per share annualized
- Achieved growth in the Technician Development Program, from
approximately 200 apprentices at the beginning of 2022 to 400
apprentices
_________________________________
|
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.
|
"During the third quarter of 2022, we delivered record sales and
Adjusted EBITDA for a second quarter in a row, despite the negative
impact of Hurricane Ian near the end of the quarter. Results
were supported primarily by strong same-store sales growth in both
Canada and the U.S. as well as
contributions from new location growth. The improvement in
gross margin percentage compared to the same quarter of the prior
year is significant and in part is due to the fact that the results
of the third quarter of 2021 were significantly impacted by
challenges in nearly all categories, including a tight labor market
and supply chain disruption. While progress has been made in
these areas, market forces continue to impact the business.
Demand for Boyd's services continued to substantially exceed
capacity in all U.S. markets, while Canadian markets continued to
experience recovery of demand for services as conditions continued
to normalize. While the ability to service demand continues
to be constrained by market conditions, new technician training and
other initiatives are providing some improved capacity.
However, the path to achieving historical levels of performance
continues to require additional labor, pricing increases and
further easing of supply chain pressure," said Timothy O'Day, President & Chief Executive
Officer of the Boyd Group. "Over time, the improvement in
these conditions will result in reduced levels of work-in-process
and improved absorption of fixed costs."
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)
|
2022
|
% change
|
2021
|
2022
|
% change
|
2021
|
|
|
|
|
|
|
|
Sales –
Total
|
625,663
|
27.6
|
490,178
|
1,795,224
|
32.3
|
1,356,464
|
Same-store sales –
Total
(excluding foreign
exchange)(1)
|
571,680
|
21.9
|
468,786
|
1,535,633
|
19.5
|
1,284,611
|
|
|
|
|
|
|
|
Gross margin
%
|
45.1 %
|
2.5
|
44.0 %
|
44.9 %
|
(0.9)
|
45.3 %
|
Operating expense
%
|
33.4 %
|
(0.3)
|
33.5 %
|
33.8 %
|
1.2
|
33.4 %
|
|
|
|
|
|
|
|
Adjusted EBITDA
(1)
|
73,042
|
41.8
|
51,500
|
198,807
|
22.5
|
162,244
|
Acquisition and
transaction costs
|
243
|
(90.6)
|
2,574
|
1,124
|
(74.7)
|
4,444
|
Depreciation and
amortization
|
43,967
|
7.1
|
41,038
|
130,832
|
16.6
|
112,169
|
Fair value
adjustments
|
—
|
N/A
|
50
|
146
|
(1.4)
|
148
|
Finance
costs
|
9,931
|
38.0
|
7,198
|
27,341
|
36.8
|
19,980
|
Income tax
expense
|
7,029
|
3,312.1
|
206
|
12,586
|
83.4
|
6,864
|
|
|
|
|
|
|
|
Adjusted net
earnings (1)
|
12,052
|
404.5
|
2,389
|
27,756
|
25.7
|
22,076
|
Adjusted net earnings
per share (1)
|
0.56
|
409.1
|
0.11
|
1.29
|
25.2
|
1.03
|
|
|
|
|
|
|
|
Net earnings
|
11,872
|
2,635.5
|
434
|
26,778
|
43.7
|
18,639
|
Basic earnings per
share
|
0.55
|
2,650.0
|
0.02
|
1.25
|
43.7
|
0.87
|
Diluted earnings per
share
|
0.55
|
2,650.0
|
0.02
|
1.25
|
43.7
|
0.87
|
|
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
"We are pleased that the Gerber Collision &
Glass locations that were temporarily closed in the states of
Florida and South Carolina have re-opened," said Mr.
O'Day. "In total, 62 collision locations were ultimately impacted
by temporary closures as well as the Florida Glass America
business. The temporary closures modestly impacted results in
both the third and fourth quarters of 2022."
"I am excited to have Brian Kaner
join the Boyd team as Executive Vice President and Chief Operating
Officer for the Boyd Group's collision business," continued Mr.
O'Day. "Having Brian in this position will further strengthen our
executive team and align our organization with the needs of the
business, given our planned growth and the changes we have
experienced over recent years. At this time, the previously
announced search to succeed Pat
Pathipati in the role of Executive Vice President and Chief
Financial Officer is proceeding along planned timelines and will be
announced upon its conclusion."
"Entering the fourth quarter, there continues to be strong
demand for our services; however, technician capacity as well as
the impact of inflation on costs and ongoing wage pressure continue
to impact results that can be achieved. Boyd continues to
negotiate and receive price increases, which are necessary in order
to support the attraction of talent to the industry and the
retention of the current talent pool. We continue to make progress,
but further pricing increases are needed to address ongoing wage
pressure. During recent quarters, Boyd has benefited from
performance based credit relief, put in place to address the
constraints caused by current market conditions, which continue to
impact the business" said Mr. O'Day. "Although it is early in
the quarter, we are experiencing same-store sales growth that is
modestly below that experienced during the first nine months
of the year," added Mr. O'Day. "Our pipeline to add new locations
in existing markets and to expand into new markets is robust. Our
workforce initiatives, such as the Technician Development Program,
are having some impact and the ongoing investments we are making in
technology, equipment and training position us well for continued
operational execution."
"In addition to addressing the labor shortage for the core
business, we plan to increase location growth during 2023 in
relation to 2022", added Mr. O'Day. "Other focus areas
include 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 combined with strong same-store sales growth during 2022 thus
far, Boyd remains confident that we are on track to achieve our
long-term goals, including doubling the size of the business on a
constant currency basis from 2021 to 2025 against 2019 sales of
US$1.7 billion. Accretive growth will
remain the Company's long-term focus whether it is through organic
growth, new store development, or acquisitions."
2022 Third Quarter Conference Call & Webcast
As
previously announced, management will hold a conference call on
Wednesday, November 9, 2022, at
10:00 a.m. (ET) to review the
Company's 2022 third quarter results. You can join the call by
dialing 1-888-575-6539 or 647-794-4605. 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 Wednesday,
November 16, 2022, at midnight by calling 1-888-203-1112 or
647-436-0148, reference number 7787025#.
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).
To view Boyd Group Services Inc. Q3 2022 financial statements
and notes, please click here:
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)
|
2022
|
2021
|
|
2022
|
2021
|
|
|
|
|
|
|
Net earnings
|
$
11,872
|
$
434
|
|
$
26,778
|
$
18,639
|
Add:
|
|
|
|
|
|
Finance
costs
|
9,931
|
7,198
|
|
27,341
|
19,980
|
Income tax
expense
|
7,029
|
206
|
|
12,586
|
6,864
|
Depreciation of
property, plant and equipment
|
11,824
|
11,313
|
|
35,623
|
30,879
|
Depreciation of right
of use assets
|
25,798
|
23,342
|
|
75,115
|
64,346
|
Amortization of
intangible assets
|
6,345
|
6,383
|
|
20,094
|
16,944
|
Standardized
EBITDA
|
$
72,799
|
$
48,876
|
|
$
197,537
|
$
157,652
|
Add:
|
|
|
|
|
|
Fair value
adjustments
|
—
|
50
|
|
146
|
148
|
Acquisition and
transaction costs
|
243
|
2,574
|
|
1,124
|
4,444
|
Adjusted
EBITDA
|
$
73,042
|
$
51,500
|
|
$
198,807
|
$
162,244
|
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,
|
|
2022
|
2021
|
2022
|
2021
|
|
|
|
|
|
Net earnings
|
$
11,872
|
$
434
|
$
26,778
|
$
18,639
|
Add:
|
|
|
|
|
Fair value adjustments
(non-taxable)
|
—
|
50
|
146
|
148
|
Acquisition and
transaction costs (net of tax)
|
180
|
1,905
|
832
|
3,289
|
|
|
|
|
|
Adjusted net
earnings
|
$
12,052
|
$
2,389
|
$
27,756
|
$
22,076
|
Weighted average number
of shares
|
21,472,194
|
21,472,194
|
21,472,194
|
21,472,194
|
Adjusted net earnings
per share
|
$
0.56
|
$
0.11
|
$
1.29
|
$
1.03
|
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)
|
2022
|
2021
|
2022
|
2021
|
|
|
|
|
|
Sales
|
$
625,663
|
$
490,178
|
$
1,795,224
|
$ 1,356,464
|
Less:
|
|
|
|
|
Sales from locations
not in the comparative period
|
(55,631)
|
(20,241)
|
(261,450)
|
(67,226)
|
Sales from
under-performing facilities closed during the period
|
(72)
|
(1,151)
|
(1,606)
|
(4,627)
|
Foreign
exchange
|
1,720
|
—
|
3,465
|
—
|
|
|
|
|
|
Same-store sales
(excluding foreign exchange)
|
$
571,680
|
$
468,786
|
$
1,535,633
|
$ 1,284,611
|
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; supply chain risk; pandemic risk
& economic downturn; acquisition risk; operational performance;
brand management and reputation; market environment change;
reliance on technology; 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.