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- Preparing for a Post Pandemic Collision
Recovery-
WINNIPEG, MB, May 12, 2021 /CNW/ - Boyd Group Services Inc.
(TSX: BYD) ("the Boyd Group", "Boyd" or "the Company") today
announced the results for the three month period ended
March 31, 2021. The Boyd Group's first quarter 2021 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 First Quarter Ended
March 31, 2021:
- U.S. dollar reporting was adopted, beginning January 1, 2021
- Financial results were significantly impacted by the COVID-19
pandemic
- Sales decreased by 9.9% to $421.6
million from $467.8 million in
the same period of 2020, including same-store sales decreases of
14.2%, with Canada having a
significantly greater negative impact due to the slower economic
reopening and more significant restrictions in place when compared
to the U.S. Same-store sales decreased 12.6% on a days adjusted
basis, recognizing one less selling and production day in the U.S.
and Canada in the first quarter of
2021 when compared to the same period of 2020.
- Adjusted EBITDA1 decreased 12.8% to $52.7 million, or 12.5% of sales, including,
$3.4 million of Canada Emergency Wage Subsidy ("CEWS"),
compared with Adjusted EBITDA of $60.5
million, or 12.9% of sales in the same period of 2020
- Adjusted net earnings1 decreased 45.4% to
$8.3 million, compared with
$15.2 million in adjusted net
earnings in the same period of 2020 and adjusted net earnings per
share1,2 decreased 48.0% to $0.39, compared with $0.75 in the same period of 2020
- Net earnings decreased 54.4% to $7.7
million, compared with $17.0
million in the same period of 2020 and net earnings per
share2 decreased 57.1% to $0.36, compared with $0.84 in the same period of 2020
- Cash balance at quarter end of $61.5
million
- Net debt of $539.9 million, with
no significant maturities until March
2025
- Declared first quarter dividend in the amount of C$0.141 per share
- Added 22 locations, including 10 through acquisition, eight
intake centers and four start-up locations
Subsequent to Quarter End
- Added an additional 13 locations, including 10 through
acquisition and three intake centers, as well as a mobile scanning
and calibration business
- Entered into the state of Hawaii, with a three location acquisition,
included above
"Early in the pandemic, Boyd moved quickly and decisively to
take aggressive action to both preserve liquidity and to reduce
expenses in preparation for the demand and revenue decline
anticipated as the result of the pandemic, which actions included
converting a large number of our production facilities to skeleton
staffed intake centers, in most cases staffed with a single
employee. In late Q4, we made the decision to ready ourselves for
higher post pandemic demand levels expected in 2021. This included
converting all temporary intake centers in the U.S. back to full
production centers, thereby adding back most of the expenses that
were temporarily eliminated. Our first quarter results reflect the
expense impact of this strategic decision", said Timothy O'Day, President and Chief Executive
Officer of the Boyd Group. "At the same time we were adding back
the resources necessary to convert facilities back to production
facilities, following steady improvement in demand in the last half
of 2020, as we had guided in mid-March of 2021, this improvement
trend flattened out in Q1 as we experienced a surge in COVID-19
infections and the reinstatement of restrictions in many of our
markets, particularly Canada,
where same-store sales declines were more significant in the first
quarter of 2021 when compared to the fourth quarter of 2020.
Compounding the demand challenges of COVID-19, we also experienced
more than a normal quarterly level of production challenges,
including technician capacity constraints in select markets,
weather events in the southern states and supply chain
disruptions. These factors, combined with the normal
seasonally higher expense burden of our first quarter, has resulted
in a lower Adjusted EBITDA margin than we had experienced in both
Q3 and Q4 2020."
Results of
Operations
|
For the three
months ended,
March 31,
|
(thousands of U.S.
dollars, except per share amounts)
|
2021
|
% change
|
2020
|
|
|
|
|
Sales –
Total
|
421,643
|
(9.9)
|
|
467,837
|
Same-store sales –
Total
(excluding foreign
exchange)
|
398,274
|
(14.2)
|
|
464,226
|
|
|
|
|
Gross margin
%
|
46.0
|
%
|
2.7
|
|
44.8
|
%
|
Operating expense
%
|
33.5
|
%
|
5.3
|
|
31.8
|
%
|
|
|
|
|
Adjusted EBITDA
1
|
52,748
|
(12.8)
|
|
60,489
|
Acquisition and
transaction costs
|
768
|
30.4
|
|
589
|
Depreciation and
amortization
|
34,736
|
9.6
|
|
31,692
|
Fair value
adjustments
|
—
|
(100.0)
|
|
(2,191)
|
Finance
costs
|
6,732
|
(18.6)
|
|
8,272
|
Income tax
expense
|
2,769
|
(46.2)
|
|
5,151
|
|
|
|
|
Adjusted net earnings
1
|
8,311
|
(45.4)
|
|
15,221
|
Adjusted net earnings
per share 1, 2
|
0.39
|
(48.0)
|
|
0.75
|
|
|
|
|
Net
earnings
|
7,743
|
(54.4)
|
|
16,976
|
Basic earnings per
share 2
|
0.36
|
(57.1)
|
|
0.84
|
Diluted earnings per
share 2
|
0.36
|
(49.3)
|
|
0.71
|
1.Standardized
EBITDA, Adjusted EBITDA (earnings before interest, income taxes,
depreciation and amortization, adjusted for the non-controlling
interest call liability and contingent consideration, as well as
acquisition and transaction costs), adjusted net earnings and
adjusted net earnings per share 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 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 March 31, 2021, which can be accessed via the
SEDAR Web site (www.sedar.com).
|
2. Basic earnings
per share, diluted earnings per share and Adjusted net earnings per
share for the three months ended March 31, 2021 include 1,265,000
shares issued in the public offering, which was completed in May
2020.
|
Outlook
While the pandemic continues to significantly
impact our business as additional waves have resulted in increased
restrictions and continued reduced collision demand, we are excited
and optimistic about our positioning for the post pandemic
future.
"We continue to prepare for this future. While we have
converted all of our temporary intake centers in the U.S. back to
full production facilities and added back most of our indirect and
support staffing resources in anticipation of a return to normal
demand for our services, we are still in the process of the more
difficult task of adding back technician capacity and re-engaging
in the initiatives that we had undertaken pre-COVID to address
technician capacity constraints, including but not limited to our
technician development program. This may result in us experiencing
technician capacity constraints in some markets in the near term,
notwithstanding a return to continued improvement in demand in most
of our U.S. markets. This, combined with worsening demand in
Canada, as restrictions either
continue or are tightened, has resulted in overall sales
performance to date in Q2 that is only marginally higher than our
Q1 sales," said Timothy O'Day.
"We continue to execute on our growth plans with 35 locations
opened year to date, the majority being single shop growth. Our
pipeline, including acquisitions as well as greenfield and
brownfield locations is healthy and we are confident in our ability
to achieve our five-year plan," continued Timothy O'Day. "As vaccination rates
increase and as market demand returns to normal levels, we are well
positioned for the future with our leadership position, our growth
pipeline and many business initiatives, including our WOW Operating
Way, scalable technician development program, scanning and
calibration, OE certifications and intake center strategy to name a
few."
2021 First Quarter Conference Call & Webcast
As previously announced, management will hold a conference call
on Wednesday, May 12, 2021, at
10:00 a.m. (ET) to review the
Company's 2021 first 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, May
19, 2021, at midnight by calling 1-855-859-2056 or
416-849-0833, reference number 8085209.
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. Q1 2021 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; changes in client relationships;
decline in number of insurance claims; margin pressure and sales
mix changes; environmental, health and safety risk; climate change
and weather conditions; 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 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.