Boyd Group Services Inc. Reports Second Quarter 2024 Results
/NOT FOR DISTRIBUTION TO
- Sequential Gross Margin Percentage and Adjusted EBITDA Margin Improvement-
Results and Highlights for the Second Quarter Ended
- Sales increased by 3.4% to
$779.2 million from$753.2 million in the same period of 2023 with same-store sales1 declining 3.2%. The second quarter of 2024 recognized the same number of selling and production days when compared to the same period of 2023 - Gross Profit increased by 3.7% to
$355.5 million or 45.6% of sales from$342.7 million or 45.5% of sales in the same period in 2023 - Adjusted EBITDA1 decreased 6.1% to
$89.6 million , or 11.5% of sales, compared with Adjusted EBITDA of$95.4 million , or 12.7% of sales in the same period of 2023 - Adjusted net earnings1 decreased to
$11.9 million , compared with$27.0 million in the same period of 2023 and adjusted net earnings per share1 decreased to$0.56 , compared with$1.26 in the same period of 2023 - Net earnings decreased to
$10.8 million , compared with$26.3 million in the same period of 2023 and net earnings per share decreased to$0.50 , compared with$1.22 in the same period of 2023 - Debt, net of cash before lease liabilities increased from
$438.5 million atMarch 31, 2024 to$481.0 million atJune 30, 2024 - Declared second quarter dividend in the amount of
C$0.15 per share - Added 13 collision repair locations, including 10 through acquisition and three start-up locations
Subsequent to Quarter End
- Added four collision repair locations, including three through acquisition and one start-up location
- Announced the appointment of
Brian Kaner as President and Chief Operating Officer of the Company
___________________________________________ |
"As reported by industry sources, repairable claims continued to be down, declining 7% on a year over year basis. By contrast, our same-store sales experienced a decline of only 3.2%, demonstrating Boyd's ability to gain market share, even in a difficult environment. Under normal conditions, the decline in repairable appraisals due to ADAS and higher loss rates would be more than offset by increased miles driven and increased costs of repair. However, weather related factors, changes in consumer behavior due to economic uncertainty and higher insurance premiums, resulted in the deferral and non-filing of claims, which further negatively impacted repairable appraisals in the second quarter of 2024. The internalization of scanning and calibration services, progress in Boyd's repair first strategy and focus on the use of cost effective alternative parts, delivered strong value by lowering repair costs for the Company's customers, and consequently reduced sales that otherwise could have been achieved while benefiting the gross margin percentage.", said Timothy O'Day, Chief Executive Officer of the
Results of Operations |
For the three months ended, |
For the six months ended, |
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(thousands of |
2024 |
% change |
2023 |
2024 |
% change |
2023 |
|
|
|
|
|
|
|
Sales – Total |
779,163 |
3.4 |
753,235 |
1,565,710 |
6.6 |
1,468,176 |
Same-store sales – Total (excluding foreign exchange)(1) |
726,930 |
(3.2) |
750,709 |
1,441,535 |
(0.7) |
1,452,210 |
|
|
|
|
|
|
|
Gross margin % |
45.6 % |
0.2 |
45.5 % |
45.2 % |
(0.9) |
45.6 % |
Operating expense % |
34.1 % |
4.0 |
32.8 % |
34.3 % |
2.7 |
33.4 % |
|
|
|
|
|
|
|
Adjusted EBITDA (1) |
89,576 |
(6.1) |
95,374 |
171,283 |
(4.9) |
180,068 |
Acquisition and transaction costs |
1,501 |
54.4 |
972 |
2,947 |
92.9 |
1,528 |
Depreciation and amortization |
55,824 |
20.3 |
46,422 |
108,442 |
20.2 |
90,217 |
Fair value adjustments |
— |
N/A |
— |
(7) |
N/A |
— |
Finance costs |
17,210 |
41.6 |
12,153 |
33,332 |
37.6 |
24,217 |
Income tax expense |
4,215 |
(55.9) |
9,558 |
7,362 |
(56.7) |
17,014 |
|
|
|
|
|
|
|
Adjusted net earnings (1) |
11,937 |
(55.8) |
26,988 |
21,381 |
(55.7) |
48,223 |
Adjusted net earnings per share (1) |
0.56 |
(55.6) |
1.26 |
1.00 |
(55.6) |
2.25 |
|
|
|
|
|
|
|
Net earnings |
10,826 |
(58.8) |
26,269 |
19,207 |
(59.2) |
47,092 |
Basic and diluted earnings per share |
0.5 |
(59.0) |
1.22 |
0.89 |
(59.4) |
2.19 |
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 have a number of initiatives underway to ensure the business is well-positioned for long-term success. During the second quarter, we made progress in improving gross margins and keeping costs down for our customers", continued
"On a year-to-date basis, we have added or acquired 30 new locations. While this activity is running at a slower pace than was the case one year ago, opportunities and Boyd's commitment to growth remain. We have a robust pipeline of new location growth, including greenfield and brownfield development sites. While start-up sites experience a longer development cycle and ramp-up period when compared to single shop acquisitions, these facilities offer a number of advantages and as a result we plan to continue increasing the proportion of growth using this approach. Deploying this strategy allows Boyd to build density in existing markets and enter new high growth markets with a facility designed with an ideal flow that allows for coverage of all three lines of business, including accommodating Boyd's future needs as it relates to glass and calibration services. These facilities are also attractive from a customer and employee perspective. Having the capability to grow through start-ups at a higher pace gives the Company optionality to invest at attractive returns."
"Despite the recent same-store sales growth challenges, 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."
President and Chief Operating Officer Appointment
Boyd also is pleased to announce the appointment of
"This change is being made to position Brian with company-wide operating oversight, responsibility and influence," said
"I am excited to be taking on this expanded role," added
2024 Second Quarter Conference Call & Webcast
As previously announced, management will hold a conference call on
About
About The
The
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.
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Three months ended
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Six months ended
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(thousands of |
2024 |
2023 |
|
2024 |
2023 |
|
|
|
|
|
|
Net earnings |
$ 10,826 |
$ 26,269 |
|
$ 19,207 |
$ 47,092 |
Add: |
|
|
|
|
|
Finance costs |
17,210 |
12,153 |
|
33,332 |
24,217 |
Income tax expense |
4,215 |
9,558 |
|
7,362 |
17,014 |
Depreciation of property, plant and |
17,902 |
12,839 |
|
34,302 |
24,755 |
Depreciation of right of use assets |
31,098 |
26,923 |
|
60,757 |
52,700 |
Amortization of intangible assets |
6,824 |
6,660 |
|
13,383 |
12,762 |
Standardized EBITDA |
$ 88,075 |
$ 94,402 |
|
$ 168,343 |
$ 178,540 |
Add: |
|
|
|
|
|
Fair value adjustments |
— |
— |
|
(7) |
— |
Acquisition and transaction costs |
1,501 |
972 |
|
2,947 |
1,528 |
Adjusted EBITDA |
$ 89,576 |
$ 95,374 |
|
$ 171,283 |
$ 180,068 |
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 |
Three months ended
|
Six months ended
|
||
|
2024 |
2023 |
2024 |
2023 |
|
|
|
|
|
Net earnings |
$ 10,826 |
$ 26,269 |
$ 19,207 |
$ 47,092 |
Add: |
|
|
|
|
Fair value adjustments (non-taxable) |
— |
— |
(7) |
— |
Acquisition and transaction costs (net of tax) |
1,111 |
719 |
2,181 |
1,131 |
|
|
|
|
|
Adjusted net earnings |
$ 11,937 |
$ 26,988 |
$ 21,381 |
$ 48,223 |
Weighted average number of shares |
21,472,288 |
21,472,194 |
21,472,241 |
21,472,194 |
Adjusted net earnings per share |
$ 0.56 |
$ 1.26 |
$ 1.00 |
$ 2.25 |
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.
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Three months ended
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Six months ended
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(thousands of |
2024 |
2023 |
2024 |
2023 |
|
|
|
|
|
Sales |
$ 779,163 |
$ 753,235 |
$ 1,565,710 |
$ 1,468,176 |
Less: |
|
|
|
|
Sales from locations not in the comparative |
(53,418) |
(2,528) |
(125,173) |
(15,975) |
Sales from under-performing facilities closed |
— |
2 |
— |
9 |
Foreign exchange |
1,185 |
— |
998 |
— |
|
|
|
|
|
Same-store sales (excluding foreign exchange) |
$ 726,930 |
$ 750,709 |
$ 1,441,535 |
$ 1,452,210 |
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; acquisition and new location risk; operational performance; brand management and reputation; market environment change; reliance on technology; supply chain risk; margin pressure and sales mix changes; 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;
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