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- Demonstrating resilience during
unprecedented times-
WINNIPEG, MB, March 24, 2021 /CNW/ - Boyd Group Services Inc.
(TSX: BYD) ("the Boyd Group", "Boyd" or "the Company") today
announced the results for the three and twelve-month periods ended
December 31, 2020. The Boyd Group's fourth 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.
2020 Results and Highlights:
- Completed the conversion of the Fund from an income trust to a
public corporation named Boyd Group Services Inc., pursuant to the
plan of arrangement under the Canada Business Corporations Act
- Appointed Tim O'Day President
& CEO, in accordance with the previously announced CEO
succession plan with Brock Bulbuck
moving into the role of Executive Chair
- Financial results were significantly impacted by the COVID-19
pandemic
- Sales decreased by 8.5% to $2.1
billion from $2.3 billion in
the same period of 2019, including same-store sales decreases of
15.6%, with Canada having a
greater negative impact due to the slower economic reopening and
more significant restrictions in place when compared to the
U.S.
- Adjusted EBITDA1 decreased 8.2% to $293.6 million, including the benefit of
$16.9 million of Canada Emergency Wage Subsidy ("CEWS"),
compared with Adjusted EBITDA of $319.9
million in 2019
- Adjusted net earnings1 decreased 43.8% to
$54.0 million, compared with
$96.1 million in adjusted net
earnings in 2019 and adjusted net earnings per
share/unit1 decreased 46.8% to $2.57, compared with $4.83 in 2019
- Net earnings decreased 10.0% to $57.7
million, compared with $64.1
million in 2019 and net earnings per share/unit decreased
14.9% to $2.75, compared with
$3.23 in 2019
- Cash balance at quarter end of $77.7
million
- Positive cash flows provided by operating activities of
$307.0 million, an increase from
$295.9 million in 2019
- Net debt of $685.6 million and
net debt excluding lease liabilities of $151.7 million
- Increased and extended its revolving credit facility to
US$550 million, with an accordion
feature which can increase the facility to a maximum of
US$825 million, accompanied by the
addition of a new seven-year fixed-rate Term Loan A in the amount
of US$125 million, maturing in
March 2025 and March 2027, respectively
- Completed a public offering for the issuance of 1,265,000
common shares at a price of $183.00
per share for gross proceeds to the Company of $231.5 million
- Entered into an amendment to the Credit Facility intended to
adjust the covenant calculations for the distorting impact of the
pandemic
- Announced the election of John
Hartmann and William Onuwa to
its Board of Directors, as well as Gene
Dunn's retirement from the Board of Directors
- 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
- Increased quarterly dividends by 2.2% in November 2020, bringing dividends to an
annualized amount of $0.56 per share
from $0.55 per share
- Growth continued, although acquisition activity paused from
late March to mid-August
- Added 54 new locations, including 11 intake centers and entered
the state of Arkansas
- Announced five year growth plan, to double the size of the
business on a constant currency basis from 2021 to 2025, based on
2019 revenues
- Announced conversion to U.S. dollar reporting starting
January 2021
Subsequent to Quarter End
- Added 16 locations, including seven intake centers
- Declared first quarter dividend in the amount of $0.141 per share
- Announced the planned retirement of Independent Board Chair,
Allan Davis
"The steps our team has taken since the onset of the pandemic
have consistently positioned us well during these unprecedented
times, and our 2020 results reflect the impact of these efforts,"
said Tim O'Day, President &
Chief Executive Officer of the Boyd Group. "Through prudent
management of expenses, a focus on liquidity, and our ability to
adjust capacity relative to changes in demand, we have posted
respectable results, in spite of the decline in revenues
caused by COVID-19. Throughout the year, we continued to adjust our
business in accordance with changes in demand for our services,
first decreasing and then subsequently adding back production
capacity as demand for collision repair services rose. 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."
In conjunction with the planned retirement of Allan Davis from the Board, the Board has
nominated David Brown as the
incoming Independent Chair, subject to his re-election at the
upcoming Annual General and Special Meeting. Additionally,
Robert Espey, CEO of Parkland
Corporation has been nominated and will stand for election to the
Board. The Board has also reaffirmed its commitment to
diversity, aspiring to increase from its current 22% to a minimum
of 30% gender diversity on the Board by the Annual General Meeting
of 2024.
"On behalf of our entire Company, as well as all of our
Stakeholders, I would like to thank Al for the many years of
dedicated service he has provided to Boyd. I also look
forward to working with Dave as incoming Independent Chair and Bob
as a new member of our Board," said Tim
O'Day.
Results of
Operations
|
For the three
months ended,
December 31,
|
For the years
ended,
December 31,
|
(thousands of
Canadian dollars, except per
unit amounts)
|
2020
|
% change
|
2019
|
2020
|
% change
|
2019
|
|
|
|
|
|
|
|
Sales –
Total
|
526,003
|
(10.2)
|
585,966
|
2,089,115
|
(8.5)
|
2,283,325
|
Same-store sales –
Total (excluding foreign
exchange)
|
507,313
|
(12.6)
|
580,550
|
1,771,294
|
(15.6)
|
2,099,505
|
|
|
|
|
|
|
|
Gross margin
%
|
45.8
%
|
1.8
|
45.0 %
|
46.0
%
|
1.3
|
45.4 %
|
Operating expense
%
|
30.9
%
|
0.7
|
30.7 %
|
32.0
%
|
1.9
|
31.4 %
|
|
|
|
|
|
|
|
Adjusted EBITDA
(1)
|
78,433
|
(6.7)
|
84,053
|
293,551
|
(8.2)
|
319,872
|
Acquisition and
transaction costs
|
487
|
(50.9)
|
991
|
1,999
|
(58.8)
|
4,850
|
Depreciation and
amortization
|
44,555
|
5.4
|
42,273
|
176,676
|
14.0
|
154,958
|
Fair value
adjustments
|
(2,513)
|
(128.6)
|
8,799
|
(5,191)
|
(118.3)
|
28,330
|
Finance
costs
|
8,259
|
(18.5)
|
10,129
|
42,596
|
11.6
|
38,185
|
Income tax
expense
|
6,603
|
(13.2)
|
7,608
|
19,737
|
(32.9)
|
29,402
|
Adjusted net earnings
(1)
|
18,889
|
(20.6)
|
23,785
|
54,022
|
(43.8)
|
96,066
|
Adjusted net earnings
per share/unit (1)
|
0.88
|
(26.1)
|
1.19
|
2.57
|
(46.8)
|
4.83
|
|
|
|
|
|
|
|
Net
earnings
|
21,042
|
47.6
|
14,253
|
57,734
|
(10.0)
|
64,147
|
Basic earnings per
share/unit
|
0.98
|
36.1
|
0.72
|
2.75
|
(14.9)
|
3.23
|
Diluted earnings per
share/unit
|
0.98
|
36.1
|
0.72
|
2.60
|
(16.6)
|
3.12
|
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 December 31, 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 first quarter of 2021, same-store
sales activity is at a similar level to that achieved in the fourth
quarter of 2020. Canada continues
to have tighter restrictions and a slower economic reopening when
compared to the U.S. This has had a significant impact on
same-store sales activity in Canada. These declines have been partially
offset by the Canada Emergency
Wage Subsidy ("CEWS"), which has been extended to June 2021. Boyd will continue to make
applications under the CEWS program as long as eligibility criteria
are met. However, amounts expected to be received in 2021
will be significantly lower than those recorded in 2020 due to
program changes announced to date. In the U.S., sales
activity has experienced variability throughout the various states
in which we operate. Variability has been caused by different
levels of restrictions by state, a significant surge in COVID-19
infections, and unusual weather events in southern states, which
contributed to power outages experienced in Texas.
"Despite the COVID-19 pandemic, our results demonstrate that
Boyd is well positioned to continue to navigate through this
challenging environment," said O'Day. "During 2021, we will focus
on our growth strategy, to double the size of the business on a
constant currency basis from 2021 to 2025, based on 2019 revenues,
implying a compound annual growth rate of 15 percent. 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. As previously announced, in order to reduce
volatility from exchange rates, effective January 1, 2021, and beginning with the reporting
of results for the first quarter of 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 Fourth Quarter Conference Call & Webcast
As previously announced, management will hold a conference call
on Wednesday, March 24, 2021, at
10:00 a.m. (ET) to review the
Company's 2020 fourth 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,
March 31, 2021, at midnight by calling 1-855-859-2056 or
416-849-0833, reference number 6346108.
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. 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; loss of key
customers; decline in number of insurance claims; margin pressure
and sales mix changes; environmental, health and safety risk;
weather conditions and climate change; competition; access to
capital; foreign currency risk; 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; low capture rates; supply chain risk; 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.