- Strong sales growth and gross margin rebound
contribute to Adjusted EBITDA improvement -
/NOT FOR DISTRIBUTION TO U.S. NEWSWIRE
SERVICES OR FOR DISSEMINATION IN THE
UNITED STATES/
WINNIPEG, MB, May 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 month period ended March 31, 2023. The Boyd
Group's first 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 First Quarter Ended
March 31, 2023:
- Sales increased by 28.4% to $714.9
million from $556.8 million in
the same period of 2022, including same-store sales1
increases of 25.2%. The first quarter of 2023 recognized the same
number of selling and production days when compared to the same
period of 2022
- Gross Profit increased by 33.3% to $327.0 million or 45.7% of sales from
$245.4 million or 44.1% of sales in
the same period in 2022
- Adjusted EBITDA1 increased 57.5% to $84.7 million, or 11.8% of sales, compared with
Adjusted EBITDA of $53.8 million, or
9.7% of sales in the same period of 2022
- Adjusted net earnings1 increased to $21.2 million, compared with $2.1 million in the same period of 2022 and
adjusted net earnings per share1 increased to
$0.99, compared with $0.10 in the same period of 2022
- Net earnings increased to $20.8
million, compared with $1.6
million in the same period of 2022 and net earnings per
share increased to $0.97, compared
with $0.07 in the same period of
2022
- Debt, net of cash before lease liabilities decreased from
$345.1 million at December 31, 2022 to $338.1 million at March
31, 2023
- Declared first quarter dividend in the amount of C$0.147 per share
- Added 23 collision repair locations, including 16 through
acquisition and seven start-up locations, as well as four single
location glass businesses
- Closed most intake centers in the U.S. based on demand for
collision repair services exceeding Boyd's collision repair
capacity, as a cost reduction measure
Subsequent to Quarter End
- Added seven locations, including six through acquisition and
one start-up location
"We are pleased with the strong financial results reported in
the first quarter of 2023, achieving record sales and Adjusted
EBITDA, although Adjusted EBITDA margin remains below pre-pandemic
levels. Demand continues to be strong, with results once
again constrained by the tight labor market and accompanying wage
pressure", said Timothy O'Day,
President & Chief Executive Officer of the Boyd Group.
"Supply chain disruption continues to normalize; however, sustained
levels of high demand continue to result in elevated levels of
work-in-process inventory", added Mr. O'Day. "Gross margin
improved in the first quarter of 2023 as a result of improvements
in parts margins, as parts are once again sourced from primary
suppliers and the mix of alternative parts continues to move toward
historical levels. Increased scanning and calibration
services also positively impacted gross margin. Labor margins
have improved, but continue to be negatively impacted by the tight
labor market, which has resulted in continued pressure on wage
costs to both retain and recruit staff."
________________________________________
|
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,
March 31,
|
(thousands of U.S.
dollars, except per share amounts)
|
|
|
|
2023
|
% change
|
2022
|
|
|
|
|
|
|
|
Sales –
Total
|
|
|
|
714,941
|
28.4
|
556,755
|
Same-store sales –
Total
(excluding foreign
exchange)(1)
|
|
|
|
693,541
|
25.2
|
553,739
|
|
|
|
|
|
|
|
Gross margin
%
|
|
|
|
45.7 %
|
3.6
|
44.1 %
|
Operating expense
%
|
|
|
|
33.9 %
|
(1.5)
|
34.4 %
|
|
|
|
|
|
|
|
Adjusted EBITDA
(1)
|
|
|
|
84,694
|
57.5
|
53,762
|
Acquisition and
transaction costs
|
|
|
|
556
|
5.1
|
529
|
Depreciation and
amortization
|
|
|
|
43,795
|
2.5
|
42,746
|
Fair value
adjustments
|
|
|
|
—
|
N/A
|
146
|
Finance
costs
|
|
|
|
12,064
|
45.1
|
8,313
|
Income tax
expense
|
|
|
|
7,456
|
1675.2
|
420
|
|
|
|
|
|
|
|
Adjusted net
earnings (1)
|
|
|
|
21,234
|
889.7
|
2,145
|
Adjusted net earnings
per share (1)
|
|
|
|
0.99
|
890.0
|
0.10
|
|
|
|
|
|
|
|
Net earnings
|
|
|
|
20,823
|
1195.0
|
1,608
|
Basic earnings per
share
|
|
|
|
0.97
|
1285.7
|
0.07
|
Diluted earnings per
share
|
|
|
|
0.97
|
1285.7
|
0.07
|
|
|
|
|
|
|
|
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 challenges of building capacity
through increased staffing and negotiating sufficient price
increases to recover lost labor margin from continuing wage
pressure", said Mr. O'Day. "We continue to experience high volumes
of work and elevated levels of work-in-process inventory.
Boyd continues to benefit from increased scanning and calibration
revenue. Thus far in the second quarter, our sales run rate
is modestly above that experienced in the first quarter of 2023 and
same-store sales results have been slightly lower than the growth
experienced recently. The balance of 2023, beginning in May
and June, has higher comparative periods for which same-store sales
will be measured against."
"As labor capacity constraints continue to impact our business,
workforce initiatives, such as the Technician Development Program,
continue to have a positive impact on capacity 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. Price increases for
labor continue to work their way through the system market by
market and client by client. Modest improvements in labor
margins have been experienced; however, pricing increases have not
been sufficient to attract the requisite talent into the industry
and offset the wage increases experienced to date. As
communicated previously, performance based programs may cause
margin to vary on a quarter by quarter basis."
"Our intake location strategy is intended to drive same-store
sales growth at times when capacity is not constrained. In late
2022 and early 2023, we decided to close many intake locations in
the U.S. based on the reality of current capacity constraints we
face", added Mr. O'Day. "On the other hand, we are pleased to
have opened or acquired 30 collision repair locations thus far in
2023 and the pipeline to add new locations and to expand into new
markets is robust. 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 First Quarter Conference Call & Webcast
As previously announced, management will hold a conference call
on Wednesday, May 10, 2023, at
10:00 a.m. (ET) to review the
Company's 2023 first 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/3H3GHkG 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
Wednesday, May 17, 2023, at midnight
by calling 888-390-0541 or 416-764-8677, reference number
26114039.
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. Q1 2023 financial statements
and notes, please click here:
https://mma.prnewswire.com/media/2073767/Boyd_Group_Services_Inc__Boyd_Group_Services_Inc__Reports_First.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
March
31,
|
(thousands of U.S.
dollars)
|
|
|
|
2023
|
2022
|
|
|
|
|
|
|
Net earnings
|
|
|
|
$
20,823
|
$
1,608
|
Add:
|
|
|
|
|
|
Finance
costs
|
|
|
|
12,064
|
8,313
|
Income tax
expense
|
|
|
|
7,456
|
420
|
Depreciation of
property, plant and
equipment
|
|
|
|
11,916
|
11,523
|
Depreciation of right
of use assets
|
|
|
|
25,777
|
24,143
|
Amortization of
intangible assets
|
|
|
|
6,102
|
7,080
|
Standardized
EBITDA
|
|
|
|
$
84,138
|
$
53,087
|
Add:
|
|
|
|
|
|
Fair value
adjustments
|
|
|
|
—
|
146
|
Acquisition and
transaction costs
|
|
|
|
556
|
529
|
Adjusted
EBITDA
|
|
|
|
$
84,694
|
$
53,762
|
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
March
31,
|
|
|
|
2023
|
2022
|
|
|
|
|
|
Net earnings
|
|
|
$
20,823
|
$
1,608
|
Add:
|
|
|
|
|
Fair value adjustments
(non-taxable)
|
|
|
—
|
146
|
Acquisition and
transaction costs (net of tax)
|
|
|
411
|
391
|
|
|
|
|
|
Adjusted net
earnings
|
|
|
$
21,234
|
$
2,145
|
Weighted average number
of shares
|
|
|
21,472,194
|
21,472,194
|
Adjusted net earnings
per share
|
|
|
$
0.99
|
$
0.10
|
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
March
31,
|
(thousands of U.S.
dollars)
|
|
|
2023
|
2022
|
|
|
|
|
|
Sales
|
|
|
$
714,941
|
$
556,755
|
Less:
|
|
|
|
|
Sales from locations
not in the comparative
period
|
|
|
(25,271)
|
(1,612)
|
Sales from
under-performing facilities closed
during the period
|
|
|
7
|
(1,404)
|
Foreign
exchange
|
|
|
3,864
|
—
|
|
|
|
|
|
Same-store sales
(excluding foreign exchange)
|
|
|
$
693,541
|
$
553,739
|
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.