Collision Repair Magazine
Boyd Group growth from acquisitions and new single locations continues on plan
News - Collision Repair
Friday, 10 August 2012 13:39

Winnipeg, Manitoba -- August 10, 2012 -- Boyd Group Income Fund today reported its financial results for the three and six-month periods ended June 30, 2012. The Fund's complete fiscal 2012 second quarter financial statements and MD&A have been filed on SEDAR (sedar.com). 

Highlights
 
Added nine new single locations during the first and second quarters and, subsequent to the end of the quarter, two additional single locations; for a total of 11 new single locations year-to-date
Added an additional six locations with the multi-location acquisition of Pearl Auto Body on July 1, 2012
Including the acquisition of Master on January 3, 2012, added a total of 25 locations since the end of 2011
Sales increased by 32.7per cent to $102.9 million from $77.6 million in Q2 2011; Cars Collision, Master, and fourteen new single locations contributed $25.0 million in new sales
Same-store sales decreased by 1.3per cent, excluding the impact of foreign exchange translation
Gross margin increased to $46.4 million, or 45.1per cent, compared with $34.7 million, or 44.7per cent, in Q2 2011
Adjusted EBITDA1 of $6.8 million, compared with $4.9 million in Q2 2011
Net earnings were $1.1 million, or $0.090 per unit (diluted), compared with a net loss of $2.4 million, or $0.221 per unit (diluted), in Q2 2011
Adjusted net earnings1 increased to $3.2 million or 3.1per cent of sales, for Q2 2012 compared to adjusted net earnings of $2.7 million or 3.4per cent of sales for the same period in 2011
Adjusted distributable cash1 of $3.2 million, compared with $2.9 million in Q2 2011
Payout ratio of 46.1per cent, compared with 42.5per cent in Q2 2011
"We continued to execute on our growth strategy through a combination of single location growth as well as through the acquisition of other multi-location collision repair businesses," said Brock Bulbuck, President and Chief Executive Officer of the Boyd Group. "We recorded growth in sales and Adjusted EBITDA as a result of these new locations, but more importantly, we also continued to experience positive same-store sales growth in the U.S., where we have focused our growth. As we had expected last quarter, our overall results were adversely affected by the carry-over effects of the mild and dry winter. These effects were more pronounced in Canada, as they reduced pent-up demand that under normal circumstances would help contribute to second-quarter sales. Overall, we believe that our growth strategy and strong industry position have helped us to gain market share and minimize the weather-related challenges during the first half of the year."
 
Financial Results

For the three-months ended June 30, 2012
 
Sales increased by 32.7per cent to $102.9 million, compared with sales of $77.6 million for the same period last year. The $25.4-million increase was driven largely by sales from Cars Collision, Master Collision, and 14 other new collision repair locations opened since April 1, 2011. 
 
Sales in Canada were $17.2 million for the three months ended June 30, 2012, reflecting a 7.9per cent decline from $18.7 million for the same period in 2011. The decline is primarily due to a same-store decrease of 10.9per cent, or $2.0 million, due to mild winter weather conditions that reduced work-in process and pent-up market demand coming into the quarter followed by a dry spring further reducing claims from normal levels. 
 
Sales in the U.S. totalled $85.7 million, an increase of $26.8 million or 45.6per cent, over the same period in 2011. The increase resulted from $15.6 million of sales from Cars Collision, $5.2 million from Master, $3.2 million from 11 new locations, $0.9 million from 1.7per cent same-store sales growth, and $2.6 million from favourable currency translation of same-store sales, offset by lost sales from the closure of two locations. 
 
Adjusted earnings before interest, income taxes, depreciation and amortization ("Adjusted EBITDA"1) for the second quarter were $6.8 million, or 6.6per cent of sales, compared with Adjusted EBITDA of $4.9 million, or 6.3per cent of sales, for the same period a year ago. The 39.3per cent increase in Adjusted EBITDA was the result of EBITDA contribution from Cars Collision, Master and from other new locations, improved gross margin, and favourable currency translation of same-store sales.
 
The Fund recorded income tax expense in the amount of $0.4 million, compared with $0.2 million for the same period in 2011.
 
Net earnings were $1.1 million, or 1.1per cent of sales, compared with a loss of $2.4 million, or 3.1per cent of sales, for the same period last year. Adjusted net earnings increased to $3.2 million, or 3.1per cent of sales, compared with adjusted earnings of $2.7 million, or 3.4per cent of sales, for the same period in 2011. Adjusted net earnings excludes the impact of fair value adjustments for exchangeable shares and unit options, acquisition costs, a put option adjustment as well as the accelerated amortization of True2Form, Cars and Master brands. 
 
During the quarter, the Fund generated adjusted distributable cash of $3.2 million and declared distributions and dividends of $1.5 million, resulting in a payout ratio based on adjusted distributable cash of 46.1per cent for the quarter. This compares with adjusted distributable cash of $2.9 million and a payout ratio of 42.5per cent a year ago. The increase in adjusted distributable cash was largely due to higher cash flows from operations. However, payout ratio also increased as a result of higher distributions versus the same period last year. 
 
For the six-months ended June 30, 2012
 
Sales increased by 32.2per cent to $210.3 million, compared with sales of $159.1 million for the same period last year. The increase was due largely to $51.1 million in sales generated from 27 Cars locations, 8 Master locations and 14 other new collision repair locations opened since January 1, 2011. 
 
Sales in Canada were $36.7 million for the six months ended June 30, 2011, a decrease of $1.5 million, or 4.0per cent, over the same period in 2011. The decline was due to a same-store sales decrease of 7.1per cent, or $2.7 million resulting from the carryover impact of mild winter weather conditions and unfavourable spring weather, as well as a $1.1-million decrease as a result of a location closure. This was offset by sales of $2.3 million from three new locations.
 
Sales in the U.S. were $173.6 million, an increase of $52.7 million, or 43.6per cent, over the same period in 2011. The increase resulted from $32.9 million of sales from Cars Collision, $10.3 million from Master, $5.7 million from 11 other new locations, $1.7 million from 1.4per cent same-store sales growth, $3.0 million from favourable currency translation of same-store sales, offset by lost sales of $0.9 million from the closure of two locations. 
 
Adjusted EBITDA1 for the first six months of 2012 totalled $13.8 million, or 6.5per cent of sales, compared with Adjusted EBITDA of $10.4 million, or 6.5 per cent of sales, during the same period a year ago. The $3.4 million increase in Adjusted EBITDA was the result of EBITDA contribution from Cars Collision, Master and from other new locations, as well as favourable currency translation of same-store sales.
 
The Fund recorded income tax expense in the amount of $1.1 million, compared with $1.0 million in 2011. The Fund has now used all of its unrestricted U.S. operating loss carry-forward amounts, and only has loss carry-forward amounts remaining from acquisitions which are restricted, in that, their utilization is subject to annual maximum allowable limits. As a result, a portion of U.S. earnings are now subject to current taxes. 
 
Net earnings were $3.2 million, or 1.5per cent of sales, compared with a loss of $1.5 million, or 0.9per cent of sales, for the same period last year. Adjusted net earnings increased to $6.4 million, or 3.1per cent of sales, compared with adjusted earnings of $5.2 million, or 3.3per cent of sales, for the same period in 2011. 
 
As at June 30, 2012, the Fund had total debt outstanding, net of cash, of $30.6 million, compared with $16.9 million at December 31, 2011. The increase in total debt, net of cash, is the result of new debt issued and cash used to fund single-location and multi-location acquisitions during the period. 

Outlook
 
"At the beginning of the year, we announced a growth strategy that includes 6per cent-10per cent growth through new start-up locations or single-location acquisitions, in addition to growth that we may achieve through opportunistic acquisition of multi-location collision operators," commented Mr. Bulbuck. "Year to date, we have added 11 new single locations, which is already within the range of our full-year goal. We have also completed two multi-location acquisitions, Master Collision in January and Pearl Auto Body in July. Increasing our market coverage helps solidify our leadership in the market, and we will continue to look for similar attractive opportunities. We will continue the integration of our acquisitions in order to benefit from operational synergies while growing organically by continuing to add new and carefully selected single locations. We remain positive on the long-term dynamics of our industry and the merits of our business model, despite uncontrollable weather and market factors. The standardization of our management information systems across all of our U.S. repair center locations is in full swing, and we expect this undertaking to enhance our operational and administrative efficiency. We remain committed to being a growth company that offers an attractive payout, while maintaining the financial flexibility to support our growth strategy and gradually increase distributions to our unitholders over time." 
 
Boyd Group growth from acquisitions and new single locations continues on plan
Last Updated on Friday, 10 August 2012 13:40
 

Add comment

Security code
Refresh

Poll

Do you install vehicle wraps?
 


Collision Repair »

Collision Quebec »

Collision Quebec 2#2

Recycler »

Media Matters