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- Delivers positive growth in earnings -
Announces five year growth strategy -
WINNIPEG, MB, Nov. 11, 2020 /CNW/ - Boyd Group Services Inc.
(TSX: BYD.TO) ("the Boyd Group", "Boyd" or "the Company") today
announced the results for the three and nine month periods ended
September 30, 2020. The Boyd Group's third quarter 2020
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, 2020:
- Financial results were significantly impacted by the COVID-19
pandemic
- Sales decreased by 10.3% to $508.3
million from $567.0 million in
the same period of 2019, including same-store sales decreases of
15.0%, with Canada having a
greater negative impact due to the slower economic reopening
- Adjusted EBITDA1 increased 9.2% to $84.5 million, including, $9.9 million of Canada Emergency Wage Subsidy ("CEWS"),
compared with Adjusted EBITDA of $77.4
million in the same period of 2019
- Adjusted net earnings1 increased 5.7% to
$21.8 million, compared with
$20.7 million in adjusted net
earnings in the same period of 2019 and adjusted net earnings per
share/unit1 decreased 1.9% to $1.02, compared with $1.04 in the same period of 2019
- Net earnings increased 42.9% to $21.1
million, compared with $14.8
million in the same period of 2019 and net earnings per
share/unit increased 32.4% to $0.98,
compared with $0.74 in the same
period of 2019
- Cash balance at quarter end of $141.5
million
- Net debt of $672.0 million and
net debt excluding lease liabilities of $140.6 million, with no significant maturities
until March 2025
- Settled the call option transaction to acquire the 21.16%
non-controlling interest in Gerber Glass LLC held by a member of
the U.S. management team
- Declared third quarter dividend in the amount of $0.138 per share
- Added six locations, including one intake center
Subsequent to Quarter End
- Added five locations, including one intake center
- Announced a dividend increase of 2.2% to $0.564 per share annualized from $0.552 per share
- Announced five year growth plan
- Announced U.S. dollar reporting starting January 2021
"The steps our team has taken since the onset of the pandemic
have positioned us well, and our third quarter results are a direct
result of these efforts," said Tim
O'Day, President & Chief Executive Officer of the Boyd
Group. "In the third quarter of 2020, we have posted strong
results, in spite of the decline in revenues caused by
COVID-19. Throughout the quarter, we continued to adjust our
business in accordance with changes in demand for our services,
increasing production capacity as demand for collision repair
services rose. During the quarter, we were also able to recommence
the completion of acquisitions and entered into the state of
Arkansas. As we continue to navigate through this pandemic
environment, our priorities remain taking care of the health and
safety of both our team members and our customers and preparing for
the future that lies ahead."
Results of
Operations
|
For the three
months ended,
September 30,
|
For the nine
months ended,
September 30,
|
(thousands of
Canadian dollars, except per
unit amounts)
|
2020
|
% change
|
2019
|
2020
|
% change
|
2019
|
|
|
|
|
|
|
|
Sales –
Total
|
508,289
|
(10.3)
|
566,957
|
1,563,112
|
(7.9)
|
1,697,359
|
Same-store sales –
Total (excluding foreign
exchange)
|
470,551
|
(15.0)
|
553,687
|
1,329,146
|
(16.5)
|
1,590,907
|
|
|
|
|
|
|
|
Gross margin
%
|
47.2%
|
4.2
|
45.3%
|
46.1%
|
1.3
|
45.5%
|
Operating expense
%
|
30.6%
|
(3.5)
|
31.7%
|
32.4%
|
2.5
|
31.6%
|
|
|
|
|
|
|
|
Adjusted
EBITDA
|
84,519
|
9.2
|
77,398
|
215,118
|
(8.8)
|
235,819
|
Acquisition and
transaction costs
|
348
|
(69.9)
|
1,156
|
1,512
|
(60.8)
|
3,859
|
Depreciation and
amortization
|
44,423
|
12.3
|
39,574
|
132,121
|
17.2
|
112,685
|
Fair value
adjustments
|
477
|
(90.5)
|
5,029
|
(2,678)
|
(113.7)
|
19,531
|
Finance
costs
|
10,134
|
5.0
|
9,647
|
34,337
|
22.4
|
28,056
|
Income tax
expense
|
8,041
|
11.3
|
7,226
|
13,134
|
(39.7)
|
21,794
|
Adjusted net
earnings
|
21,831
|
5.7
|
20,650
|
35,133
|
(51.4)
|
72,281
|
Adjusted net earnings
per share/unit
|
1.02
|
(1.9)
|
1.04
|
1.69
|
(53.6)
|
3.64
|
|
|
|
|
|
|
|
Net
earnings
|
21,096
|
42.9
|
14,766
|
36,692
|
(26.5)
|
49,894
|
Basic earnings per
share/unit
|
0.98
|
32.4
|
0.74
|
1.76
|
(29.9)
|
2.51
|
Diluted earnings per
share/unit
|
0.98
|
32.4
|
0.74
|
1.61
|
(32.6)
|
2.39
|
|
|
1. Standardized EBITDA, Adjusted EBITDA
(earnings before interest, income taxes, depreciation and
amortization, adjusted for the fair value adjustments related to
the exchangeable share liability, unit option liability,
non-controlling interest call liability / put option and contingent
consideration, as well as acquisition and transaction costs),
adjusted net earnings and adjusted net earnings per
share/unit are not recognized measures under International
Financial Reporting Standards ("IFRS"). Management believes that in
addition to revenue, net earnings and cash flows, the supplemental
measures of adjusted net earnings, Standardized EBITDA and Adjusted
EBITDA are useful as they provide investors with an indication of
earnings from operations and cash available for distribution, both
before and after debt management, productive capacity maintenance
and non-recurring and other adjustments. Investors should be
cautioned, however, that Standardized EBITDA, Adjusted EBITDA,
adjusted net earnings and adjusted net earnings per share/unit
should not be construed as an alternative to net earnings
determined in accordance with IFRS as an indicator of Boyd's
performance. Boyd's method of calculating these measures may differ
from other public issuers and, accordingly, may not be comparable
to similar measures used by other issuers. For a detailed
explanation of how Boyd's non-GAAP measures are calculated, please
refer to Boyd's MD&A filing for the period ended
September 30, 2020, which can be accessed via the SEDAR Web
site (www.sedar.com).
|
Outlook
The COVID-19 pandemic continues to impact
Boyd's business. Thus far in the fourth quarter of 2020, same-store
sales activity has continued below normal levels, although slightly
better than reported in the third quarter. CEWS has been extended
to June 2021, including redesigned
program details to November 21, 2020;
however, changes have been made to the program such that the
subsidy is now determined by the particular employer's revenue
reduction percentage in each qualifying period rather than
providing a subsidy amount based on a minimum decline in revenues.
This change will negatively impact the subsidy that Boyd will be
entitled to receive with respect to the fourth quarter of 2020.
Additionally, Boyd took a cautious approach to bringing back
resources as revenue grew, which benefited Q3 earnings, but is not
sustainable. Certain operating expenses and personnel costs, along
with continued reduced demand for services will continue to impact
the levels of Adjusted EBITDA that can be achieved during
2020.
"We are pleased to announce our new five year growth strategy.
Despite the COVID-19 pandemic, our results demonstrate that Boyd is
well positioned to continue to navigate through this challenging
environment," said O'Day. "Our new growth strategy is to double the
size of the business on a constant currency basis from 2021 to
2025, based on 2019 revenues, implying an average annual growth
rate of 15 percent. In order to achieve this, we will pursue
accretive growth through a combination of organic growth
(same-store sales growth) as well as adding new locations to our
network in the United States and
Canada. New location growth will
continue to include single location acquisitions, as well as
brownfield and greenfield start-ups, and multi location
acquisitions. Additionally, to reduce volatility from exchange
rates, effective January 1, 2021, we
will change our presentation currency and begin reporting our
results in U.S. Dollars. Given almost 90% of our revenues come from
the U.S., this is an appropriate currency for reporting purposes.
With prudent financial management and our strong balance sheet,
including dry powder of over $1
billion, we are well-positioned to take advantage of
acquisition opportunities as they arise."
2020 Third Quarter Conference Call & Webcast
As
previously announced, management will hold a conference call on
Wednesday, November 11, 2020, at
10:00 a.m. (ET) to review the
Company's 2020 third quarter results. You can join the call by
dialing 888-231-8191 or 647-427-7450. 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 18, 2020, at midnight by calling 1-855-859-2056 or
416-849-0833, reference number 7195476.
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 http://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 (http://www.boydautobody.com) and Assured Automotive
(http://www.assuredauto.ca) as well as in the U.S. under the trade
name Gerber Collision & Glass (http://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 (http://www.boydgroup.com).
To view Boyd Group Services Inc. Q3 2020 financial statements
and notes, please click here:
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: pandemic risk
& economic downturn; operational performance; acquisition risk;
employee relations and staffing; brand management and reputation;
market environment change; reliance on technology; foreign currency
risk; loss of key customers; decline in number of insurance claims;
margin pressure and sales mix changes; weather conditions and
climate change; competition; access to capital; dependence on key
personnel; tax position risk; corporate governance; increased
government regulation and tax risk; environmental, health and
safety risk; fluctuations in operating results and seasonality;
risk of litigation; execution on new strategies; insurance risk;
dividends not guaranteed; interest rates; U.S. health care costs
and workers compensation claims; low capture rates; supply chain
risk; capital expenditures; and energy costs and the 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.