- Consistent growth in sales results in
sequential Adjusted EBITDA margin improvement -
/NOT FOR DISTRIBUTION TO U.S. NEWSWIRE
SERVICES OR FOR DISSEMINATION IN THE
UNITED STATES/
WINNIPEG, MB, Aug. 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 six month period ended
June 30, 2023. The Boyd Group's
second quarter 2023 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 Second Quarter Ended
June 30, 2023:
- Sales increased by 22.9% to $753.2
million from $612.8 million in
the same period of 2022, including same-store sales1
increases of 18.9%. The second quarter of 2023 recognized the same
number of selling and production days when compared to the same
period of 2022
- Gross Profit increased by 23.5% to $342.7 million or 45.5% of sales from
$277.5 million or 45.3% of sales in
the same period in 2022
- Adjusted EBITDA1 increased 32.5% to $95.4 million, or 12.7% of sales, compared with
Adjusted EBITDA of $72.0 million, or
11.7% of sales in the same period of 2022
- Adjusted net earnings1 increased to $27.0 million, compared with $13.6 million in the same period of 2022 and
adjusted net earnings per share1 increased to
$1.26, compared with $0.63 in the same period of 2022
- Net earnings increased to $26.3
million, compared with $13.3
million in the same period of 2022 and net earnings per
share increased to $1.22, compared
with $0.62 in the same period of
2022
- Debt, net of cash before lease liabilities decreased from
$338.1 million at March 31, 2023 to $316.9
million at June 30, 2023
- Declared second quarter dividend in the amount of C$0.147
per share
- Added 25 collision repair locations, including 19 through
acquisition and six start-up locations
Subsequent to Quarter End
- Added nine collision repair locations, including six through
acquisition and three start-up locations
- Announced the appointment of Jeff
Murray as Executive Vice-President & Chief Financial
Officer
- Published Boyd's second Environmental, Social and Governance
("ESG") Report
"We are pleased with the strong financial results reported in
the second quarter of 2023, achieving record sales and Adjusted
EBITDA and showing continued improvement in the Adjusted EBITDA
margin, although the Adjusted EBITDA margin remains below
pre-pandemic levels", said Timothy
O'Day, President & Chief Executive Officer of the Boyd
Group. "Gross margin improved in the second quarter of 2023 when
compared to the same period of the prior year, but reduced slightly
when compared to the first quarter of 2023", added Mr. O'Day. "This
reduction in gross margin percentage was offset by increased sales,
which provided improved leverage of certain operating expenses and
resulted in sequential Adjusted EBITDA margin improvement. Labor
margins were flat with client pricing increases not sufficient to
move labor margins to historical levels."
____________________________________________
|
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.
|
Results of
Operations
|
For the three months
ended,
June 30,
|
For the six months
ended,
June 30,
|
(thousands of U.S.
dollars, except per share amounts)
|
2023
|
% change
|
2022
|
2023
|
% change
|
2022
|
|
|
|
|
|
|
|
Sales –
Total
|
753,235
|
22.9
|
612,806
|
1,468,176
|
25.5
|
1,169,561
|
Same-store sales –
Total
(excluding foreign
exchange)(1)
|
726,899
|
18.9
|
611,258
|
1,411,971
|
21.9
|
1,158,403
|
|
|
|
|
|
|
|
Gross margin
%
|
45.5 %
|
0.4
|
45.3
|
45.6 %
|
2.0
|
44.7 %
|
Operating expense
%
|
32.8 %
|
(2.1)
|
33.5
|
33.4 %
|
(1.8)
|
34.0 %
|
|
|
|
|
|
|
|
Adjusted EBITDA
(1)
|
95,374
|
32.5
|
72,003
|
180,068
|
43.2
|
125,765
|
Acquisition and
transaction costs
|
972
|
176.1
|
352
|
1,528
|
73.4
|
881
|
Depreciation and
amortization
|
46,422
|
5.2
|
44,119
|
90,217
|
3.9
|
86,865
|
Fair value
adjustments
|
—
|
N/A
|
—
|
—
|
N/A
|
146
|
Finance
costs
|
12,153
|
33.6
|
9,097
|
24,217
|
39.1
|
17,410
|
Income tax
expense
|
9,558
|
86.1
|
5,137
|
17,014
|
206.2
|
5,557
|
|
|
|
|
|
|
|
Adjusted net
earnings (1)
|
26,988
|
99.1
|
13,558
|
48,223
|
207.1
|
15,704
|
Adjusted net earnings
per share (1)
|
1.26
|
100.0
|
$
0.63
|
2.25
|
208.2
|
0.73
|
|
|
|
|
|
|
|
Net earnings
|
26,269
|
97.5
|
13,298
|
47,092
|
215.9
|
14,906
|
Basic earnings per
share
|
1.22
|
96.8
|
0.62
|
2.19
|
217.4
|
0.69
|
Diluted earnings per
share
|
1.22
|
96.8
|
0.62
|
2.19
|
217.4
|
0.69
|
|
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 remain focused on the key challenge of building capacity
through increased staffing, including negotiating sufficient client
price increases to attract the requisite talent into the industry
and recover lost labor margin from wage pressure", said Mr. O'Day.
"Relative to the second quarter, the third quarter of 2023 will
have one less selling and production day and will also be
negatively impacted by seasonal vacations that have a dampening
effect on sales. Thus far in the third quarter, same-store
sales increases are approximately half of what has been experienced
in the first six months of 2023."
"As labor capacity constraints continue to impact our business,
workforce initiatives continue to have a positive impact and
ongoing investments in technology, equipment and training position
us well for continued operational execution", continued Mr.
O'Day. "We remain committed to addressing the labor market
challenges so that we can service additional demand."
"We are pleased to have opened or acquired 57 collision repair
locations thus far in 2023 and the pipeline to add new locations
and to expand into new markets is robust", added Mr. O'Day.
"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 Second Quarter Conference Call & Webcast
As previously announced, management will hold a conference call
on Thursday, August 10, 2023, at
10:00 a.m. (ET) to review the
Company's 2023 second 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/3D9Ir9B 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
Thursday, August 17, 2023, at
midnight by calling 888-390-0541 or 416-764-8677, replay entry code
566450#, reference number 73566450.
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.
To view Boyd Group Services Inc. Q2 2023 financial
statements and notes, please click here:
https://mma.prnewswire.com/media/2183022/Boyd_Group_Services_Inc__Boyd_Group_Services_Inc__Reports_Second.pdf
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
June
30,
|
|
Six months
ended
June
30,
|
(thousands of U.S.
dollars)
|
2023
|
2022
|
|
2023
|
2022
|
|
|
|
|
|
|
Net earnings
|
$
26,269
|
$
13,298
|
|
$
47,092
|
$
14,906
|
Add:
|
|
|
|
|
|
Finance
costs
|
12,153
|
9,097
|
|
24,217
|
17,410
|
Income tax
expense
|
9,558
|
5,137
|
|
17,014
|
5,557
|
Depreciation of
property, plant and
equipment
|
12,839
|
12,276
|
|
24,755
|
23,799
|
Depreciation of right
of use assets
|
26,923
|
25,174
|
|
52,700
|
49,317
|
Amortization of
intangible assets
|
6,660
|
6,669
|
|
12,762
|
13,749
|
Standardized
EBITDA
|
$
94,402
|
$
71,651
|
|
$
178,540
|
$
124,738
|
Add:
|
|
|
|
|
|
Fair value
adjustments
|
—
|
—
|
|
—
|
146
|
Acquisition and
transaction costs
|
972
|
352
|
|
1,528
|
881
|
Adjusted
EBITDA
|
$
95,374
|
$
72,003
|
|
$
180,068
|
$
125,765
|
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
June
30,
|
Six months
ended
June
30,
|
|
2023
|
2022
|
2023
|
2022
|
|
|
|
|
|
Net earnings
|
$
26,269
|
$
13,298
|
$
47,092
|
$
14,906
|
Add:
|
|
|
|
|
Fair value adjustments
(non-taxable)
|
—
|
—
|
—
|
146
|
Acquisition and
transaction costs (net of tax)
|
$
719
|
$
260
|
1,131
|
652
|
|
|
|
|
|
Adjusted net
earnings
|
$
26,988
|
$
13,558
|
$
48,223
|
$
15,704
|
Weighted average number
of shares
|
21,472,194
|
21,472,194
|
21,472,194
|
21,472,194
|
Adjusted net earnings
per share
|
$
1.26
|
$
0.63
|
$
2.25
|
$
0.73
|
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
June
30,
|
Six months
ended
June
30,
|
(thousands of U.S.
dollars)
|
2023
|
2022
|
2023
|
2022
|
|
|
|
|
|
Sales
|
$
753,235
|
$
612,806
|
$
1,468,176
|
$ 1,169,561
|
Less:
|
|
|
|
|
Sales from locations
not in the comparative
period
|
(29,644)
|
(575)
|
(63,601)
|
(8,976)
|
Sales from
under-performing facilities closed
during the period
|
2
|
(973)
|
9
|
(2,182)
|
Foreign
exchange
|
3,306
|
—
|
7,387
|
—
|
Same-store sales
(excluding foreign exchange)
|
$
726,899
|
$
611,258
|
$
1,411,971
|
$ 1,158,403
|
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.