BOYD GROUP SERVICES INC.
INTERIM REPORT TO SHAREHOLDERS
Second Quarter and Six Months Ended June 30, 2023
BOYD GROUP SERVICES INC.
REPORT TO SHAREHOLDERS
_____________________________________________________________________________________________
To our Shareholders,
During the second quarter of 2023, Boyd Group Services Inc. ("BGSI") recorded sales of $753.2 million, Adjusted EBITDA1 of $95.4 million and net earnings of $26.3 million.
The initiatives put in place to improve throughput and increase capacity, along with solid execution, have resulted in record sales levels and improved profitability during the second quarter. Our team continues to adapt to challenging market conditions and deliver results, including doubling the level of Adjusted net earnings per share when compared to the same period of the prior year.
Total sales in the second quarter of 2023 were $753.2 million, a 22.9% increase when compared to the $612.8 million achieved in the same period of 2022, with same-store sales increasing 18.9% and new locations that were not in operation for the full comparative period generating $29.1 million of incremental sales.
Adjusted EBITDA for the second quarter of 2023 was $95.4 million, or 12.7% of sales, compared with $72.0 million, or 11.7% of sales in the same period of 2022. The $23.4 million increase was primarily the result of improved sales levels and improved leveraging of certain operating costs.
BGSI posted net earnings of $26.3 million in the second quarter of 2023, compared to $13.3 million in the same period of 2022. Impacting net earnings were acquisition and transaction costs and fair value adjustments on contingent consideration. After adjusting for these items, Adjusted net earnings for the second quarter of 2023 was $27.0 million or 3.6% of sales. This compares to Adjusted net earnings of $13.6 million or 2.2% of sales in the same period of 2022. Adjusted net earnings for the period was positively impacted by increased sales and improved leveraging of certain operating costs. Adjusted net earnings for the three months ended June 30, 2023 was $1.26 per share, compared to $0.63 per share in the same period of 2022.
With respect to the balance sheet, at June 30, 2023, BGSI held total debt, net of cash, of $1,004.5 million, compared to $1,008.8 million at March 31, 2023 and $973.7 million at June 30, 2022. Debt, net of cash before lease liabilities decreased from $345.1 million at December 31, 2022 to $316.9 million at June 30, 2023. During the second quarter of 2023, the Company was able to reduce the level of long term debt held under the revolving credit facility (net of financing costs) from $184.1 million to $174.5 million.
Throughout 2022, we made progress on the priority areas in each of the environmental, social and governance pillars outlined in our first ESG report, published in March 2022, and we are pleased to have now published our second ESG report. We recognize that we have the potential to deliver significant, positive impacts to society and the
- Adjusted EBITDA (earnings before interest, income taxes, depreciation and amortization, adjusted for the fair value adjustments related to contingent consideration, as well as acquisition and transaction costs), adjusted net earnings, adjusted net earnings per share and same-store sales are non-GAAP financial measures and ratios and are not recognized measures under International Financial Reporting Standards ("IFRS"). Management believes that in addition to net earnings and cash flows, the supplemental measures of adjusted net earnings 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. Management believes that, in addition to sales, the supplemental measure of same-store sales is useful as it provides investors with an indication of the increase in sales without accounting for location growth and the impact of fluctuations in exchange rates during the period. Investors should be cautioned, however, that 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. Investors should also be cautioned that same-store sales should not be construed as an alternative to sales 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 financial measures are calculated, please refer to the section titled "Non-GAAP Financial Measures and Ratios" in Boyd's MD&A filing (dated August 10, 2023) for the period ended June 30, 2023, starting on page 9 of this Report. A copy of Boyd's MD&A for the period ended June 30, 2023 can be accessed via the SEDAR Web site (www.sedar.com).
2
environment and are pleased to share the progress we have made thus far on our ESG journey, while acknowledging there is always more work to be done. We remain dedicated to integrating ESG considerations into our business practices and disclosing our ESG performance. We are committed to continuously improving and look forward to the opportunities ahead.
I am excited to have Mr. Jeff Murray appointed to the permanent role of Executive Vice President & Chief Financial Officer after seamlessly taking on the position of Interim Chief Financial Officer since the beginning of 2023. Mr. Murray's significant knowledge of the business along with his strong background in accounting and finance support the continued execution of our priorities.
On behalf of myself, the executive team and our Board of Directors, I would like to thank all of our Boyd Group employees for their hard work and dedication, which continued to allow Boyd to successfully navigate through the impacts of the dynamic economic environment. And on behalf of the Directors of Boyd Group Services Inc. and Boyd Group employees, thank you for your continued support.
Sincerely,
(signed)
Timothy O'Day
President & Chief Executive Officer
3
Management's Discussion & Analysis
OVERVIEW
Boyd Group Services Inc. ("BGSI"), through its operating company, The Boyd Group Inc. and its subsidiaries ("Boyd" or the "Company"), is one of the largest operators of non-franchised collision repair centers in North America in terms of number of locations and sales. The Company currently operates locations in Canada under the trade names Boyd Autobody & Glass and Assured Automotive, as well as in the U.S. under the trade name Gerber Collision & Glass. The Company is also a major retail auto glass operator in the U.S. under the trade names Gerber Collision & Glass, Glass America, Auto Glass Service, Auto Glass Authority and Autoglassonly.com. In addition, the Company operates a third party administrator, Gerber National Claims Services ("GNCS"), that offers glass, emergency roadside and first notice of loss services. The following is a geographic breakdown of the collision repair locations by trade name and location as at August 9, 2023.
889 locations
46 | 761 | ||||
locations | locations | ||||
Alberta | 16 | Florida | 75 | South Carolina | 20 |
British Columbia | 14 | Michigan | 72 | Maryland | 13 |
Manitoba | 12 | Illinois | 66 | Tennessee | 12 |
Saskatchewan | 4 | California | 43 | Kansas | 11 |
New York | 40 | Oregon | 11 | ||
82 | Washington | 38 | Pennsylvania | 11 | |
North Carolina | 36 | Alabama | 10 | ||
locations | |||||
Wisconsin | 36 | Missouri | 8 | ||
Ontario | 82 | Georgia | 35 | Nevada | 8 |
Ohio | 34 | Hawaii | 5 | ||
Indiana | 33 | Utah | 5 | ||
Texas | 29 | Kentucky | 4 | ||
Oklahoma | 28 | Arkansas | 3 | ||
Arizona | 25 | Iowa | 3 | ||
Colorado | 22 | Minnesota | 2 | ||
Louisiana | 22 | Idaho | 1 | ||
The above numbers include 34 intake locations. | The above numbers include 4 intake locations | ||||
and two fleet locations co-located with collision repair centers. | |||||
Boyd provides collision repair and glass services to insurance companies, individual vehicle owners, as well as fleet and lease customers, with a high percentage of the Company's revenue being derived from insurance-paid collision repair services.
BGSI's shares trade on the Toronto Stock Exchange under the symbol TSX: BYD.TO.
The following review of BGSI's operating and financial results for the period ended June 30, 2023, including material transactions and events of BGSI up to and including August 9, 2023, should be read in conjunction with the unaudited interim condensed consolidated financial statements for the three and six months ended June 30, 2023, as well as the annual audited consolidated financial statements, management discussion & analysis ("MD&A") and annual information form ("AIF") of BGSI, as filed on SEDAR at www.sedar.com.
4
SIGNIFICANT EVENTS
On March 17, 2023, the BGSI Board of Directors declared a cash dividend for the first quarter of 2023 of C$0.147 per common share. The dividend was paid on April 26, 2023 to common shareholders of record at the close of business on March 31, 2023.
On May 11, 2023, BGSI announced the election of Christine Feuell to the Board of Directors.
On June 16, 2023, the BGSI Board of Directors declared a cash dividend for the second quarter of 2023 of C$0.147 per common share. The dividend was paid on July 27, 2023 to common shareholders of record at the close of business on June 30, 2023.
On July 12, 2023, BGSI announced the appointment of Jeff Murray as Executive Vice-President & Chief Financial Officer, effective immediately.
On August 10, 2023, BGSI published Boyd's second Environmental, Social and Governance Report.
During the six months ended June 30, 2023, the Company added 35 locations through acquisition and 13 start-up locations, for a total of 48 new locations. From January 1, 2023 up to the reporting date of August 9, 2023, the Company has added 41 locations through acquisition and 16 start-up locations, for a total of 57 new locations. These new locations are as follows:
Date | Location | Previously operated as |
January 3, 2023 | Cameron Park, CA | Cameron Park Auto Body |
January 6, 2023 | Abilene, TX | Gibb's Paint & Body, LLC |
January 16, 2023 | Lethbridge, AB | n/a start-up |
January 18, 2023 | Venice, FL | n/a start-up |
January 18, 2023 | Park City, UT | CKM Collision |
February 3, 2023 | Hendersonville, NC | Hill's Collision Center |
February 3, 2023 | Rogers, MN | Excalibur Collision & Conversion Center |
February 3, 2023 | Tontitown, AR | n/a start-up |
February 8, 2023 | Ocala, FL | n/a start-up |
February 10, 2023 | Lansdale, PA | Old Forge Collision Center |
February 10, 2023 | Sacramento, CA | Franklin Collision Center |
February 17, 2023 | Murrieta, CA | n/a start-up |
February 22, 2023 | LaBelle, FL | Direct Repair Collision Center |
February 27, 2023 | Perry, GA | Cochran Coach Works |
February 28, 2023 | New Port Richey, FL | n/a start-up |
March 17, 2023 | Rancho Cucamonga, CA | Proline Auto Collision Center |
March 22, 2023 | Sacramento, CA | Aries Auto Body |
March 24, 2023 | Modesto, CA | The Professionals Auto Body Works |
March 24, 2023 | Prattville, AL | Advanced Collision |
March 28, 2023 | Longview, TX | One Stop Automotive |
March 28, 2023 | Charleroi, PA | Russell's Body & Frame Service |
March 28, 2023 | Simpsonville, NC | n/a start-up |
March 29, 2023 | Sharpsburg, GA | B & B Body Shop |
April 21, 2023 | Griffin, GA | Nicolas Auto Repair & Body Shop |
April 21, 2023 | Huntsville, AL | Sledge Custom Body Shop |
April 21, 2023 | Baltimore, MD | Moore's Body Shop |
April 27, 2023 | Stockton, CA | Prestige Auto Body |
April 28, 2023 | Lake Charles, LA | n/a start-up |
April 28, 2023 | Kailua-Kona, HI | Auto Body Hawaii |
May 5, 2023 | Puyallup, WA | South Hill Collision |
May 9, 2023 | Iowa City, IA | Arena Auto Body |
5
Attachments
- Original Link
- Original Document
- Permalink
Disclaimer
Boyd Group Services Inc. published this content on 10 August 2023 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 10 August 2023 10:32:04 UTC.