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- Navigating through uncertain times -
WINNIPEG, MB, Aug. 12, 2020 /CNW/ - Boyd Group Services Inc.
(TSX: BYD) ("the Boyd Group", "Boyd" or "the Company") today
announced the results for the three and six month periods ended
June 30, 2020. The Boyd Group's second 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 Second Quarter Ended
June 30, 2020:
- Financial results were significantly impacted by the COVID-19
pandemic
- Sales decreased by 25.5% to $426.5
million from $572.5 million in
the same period of 2019, including same-store sales decreases of
33.0%, which was negatively impacted by the slower economic
reopening in Canada
- Adjusted EBITDA1 decreased 38.6% to $49.2 million, compared with $80.1 million in the same period of 2019
- Adjusted net earnings1 decreased 129.3% to an
adjusted net loss of $6.9 million,
compared with $23.5 million in
adjusted net earnings in the same period of 2019 and adjusted net
earnings per share/unit1 decreased 127.9% to an adjusted
net loss per share of $0.33, compared
with adjusted net earnings per unit of $1.18 in the same period of 2019
- Net earnings decreased 151.4% to a net loss of $7.1 million, compared with $13.7 million of net earnings in the same period
of 2019 and net earnings per share/unit decreased 149.3% to a net
loss per share of $0.34, compared
with net earnings per unit of $0.69
in the same period of 2019
- Cash balance at quarter end of $510.2
million
- Net debt of $708.7 million and
net debt excluding lease liabilities of $170.1 million, with no significant maturities
until March 2025
- Completed a "bought-deal" 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
prevent the effects of the COVID-19 pandemic from distorting the
covenant calculations and distracting the Company or its lenders
from the prudent management of the business over the quarters
ahead
- 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
- Declared second quarter dividend in the amount of $0.138 per share
Subsequent to Quarter End
- 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
- Repaid an additional $167.5
million U.S. of the revolving credit facility
- Added one intake center
"The proactive steps our team has taken throughout the second
quarter of 2020 have allowed us to continuously adapt to the
COVID-19 pandemic impacted environment in which we are currently
operating and thereby demonstrate our resilience as a business and
as a team," said Tim O'Day,
President & Chief Executive Officer of the Boyd Group. "Our
efforts delivered positive operating cash flow, notwithstanding the
substantial decline in the revenues caused by COVID-19. We continue
to adjust our business in accordance with changes in demand for our
services, increasing production capacity as demand for collision
repair services rises and beginning to evaluate growth
opportunities as they emerge. Boyd team members have continued
to demonstrate exceptional perseverance and entrepreneurial spirit
throughout these challenging times. I am extremely pleased
that recent demand levels have allowed us to reinstate many of
those who were laid off. As we return closer to normal levels
of demand and many of our workforce and customers return to our
locations, 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,
June 30,
|
For the six months
ended,
June 30,
|
(thousands of
Canadian dollars, except
per unit amounts)
|
2020
|
% change
|
2019
|
2020
|
% change
|
2019
|
|
|
|
|
|
|
|
Sales –
Total
|
426,473
|
(25.5)
|
572,505
|
1,054,823
|
(6.7)
|
1,130,402
|
Same-store sales –
Total (excluding
foreign exchange)
|
378,528
|
(33.0)
|
565,019
|
896,212
|
(17.0)
|
1,079,228
|
|
|
|
|
|
|
|
Gross margin
%
|
46.8%
|
2.0
|
45.9%
|
45.6%
|
—
|
45.6%
|
Operating expense
%
|
35.3%
|
10.7
|
31.9%
|
33.2%
|
5.1
|
31.6%
|
|
|
|
|
|
|
|
Adjusted
EBITDA
|
49,182
|
(38.6)
|
80,099
|
130,599
|
(17.6)
|
158,421
|
Acquisition and
transaction costs
|
378
|
(73.8)
|
1,444
|
1,164
|
(56.9)
|
2,703
|
Depreciation and
amortization
|
45,047
|
17.9
|
38,214
|
87,698
|
20.0
|
73,111
|
Fair value
adjustments
|
(95)
|
(101.1)
|
8,689
|
(3,155)
|
(121.8)
|
14,502
|
Finance
costs
|
13,005
|
24.1
|
10,480
|
24,203
|
31.5
|
18,409
|
Income tax (recovery)
expense
|
(2,094)
|
(127.8)
|
7,533
|
5,093
|
(65.0)
|
14,568
|
Adjusted net (loss)
earnings
|
(6,874)
|
(129.3)
|
23,497
|
13,302
|
(74.2)
|
51,630
|
Adjusted net (loss)
earnings per share/unit
|
(0.33)
|
(127.9)
|
1.18
|
0.65
|
(75.0)
|
2.60
|
|
|
|
|
|
|
|
Net (loss)
earnings
|
(7,059)
|
(151.4)
|
13,739
|
15,596
|
(55.6)
|
35,128
|
Basic (loss) earnings
per share/unit
|
(0.34)
|
(149.3)
|
0.69
|
0.76
|
(57.1)
|
1.77
|
Diluted (loss)
earnings per share/unit
|
(0.34)
|
(154.0)
|
0.63
|
(52.2)
|
1.59
|
|
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 (loss) earnings and adjusted net
(loss) earnings per share/unit are not recognized measures under
International Financial Reporting Standards ("IFRS"). Management
believes that in addition to revenue, net (loss) earnings and cash
flows, the supplemental measures of adjusted net (loss) 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 (loss) earnings
and adjusted net (loss) earnings per share/unit should not be
construed as an alternative to net (loss) 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 June 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 third quarter of 2020,
same-store sales activity has continued below normal levels,
approximately 14-16% below the same period of the prior year.
As demand has gradually recovered from the lows experienced in
early April, Boyd has been able to convert many locations back from
temporary intake facilities to full production facilities and
recall many employees who had previously been laid off.
During the second quarter, demand gradually improved from the
previously disclosed initial COVID-19 pandemic related decreases
and has recently begun to stabilize in certain markets.
Notwithstanding the actions taken by Boyd, 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.
"Our team has demonstrated that Boyd is well prepared to
navigate through this challenging environment, scaling our business
according to fluctuating levels of demand," said O'Day. "Our
capital raise, together with our revised credit agreement provides
Boyd with available dry powder of over $1
billion. Boyd's ample liquidity combined with our scalable
operating model, will continue to allow us to adjust and adapt, and
take advantage of market opportunities as they present
themselves."
2020 Second Quarter Conference Call & Webcast
As previously announced, management will hold a conference call
on Wednesday, August 12, 2020, at
10:00 a.m. (ET) to review the
Company's 2020 second 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,
August 19, 2020, at midnight by calling 1-855-859-2056 or
416-849-0833, reference number 2683894.
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. 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. Q2 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.