Boyd Group reports first quarter results

Winnipeg, Manitoba — May 14, 2014 — Boyd Group has reported its financial results for the three-month period ended March 31, 2014. The Fund’s first quarter 2014 financial statements and MD&A have been filed on sedar.com
Q1 2014 Highlights
– Sales increased by 40.6 percent to $183.6 million from $130.6 million in 2013, including same-store sales increases of 7.6 percent.
– Added three single locations during the quarter, with two additional locations added after March 31.
– Adjusted EBITDA1 increased 84.0 percent to $15.0 million, compared with $8.2 million in 2013.
– Adjusted net earnings increased to $7.3 million compared with $3.7 million in 2013.
Subsequent to the end of the quarter, Boyd acquired Collision Revision, with 25 locations in Illinois, Indiana, and Florida.
“We had a very strong start to 2014 with severe weather conditions, in contrast to a mild winter in 2013, driving double-digit sales growth in several of our markets,” said Brock Bulbuck, President and Chief Executive Officer of Boyd Group. “We were also pleased by the positive impact of our new paint supply agreement on our results, as well as our continued progress on many operational and growth initiatives.”
Financial Results
Total sales increased by 40.6 percent to $183.6 million, compared with sales of $130.6 million for the same period last year. The $53.0 million increase was due largely to the contributions from acquisitions of $21.6 million, incremental sales of $11.5 million from the glass business, and same-store sales increases, excluding foreign exchange, of $9.4 million. In addition, Boyd benefited from favourable currency translation in the amount of $10.7 million from same-store sales converted at a higher U.S. dollar exchange rate.
Sales in Canada were $20.5 million, an increase of $1.1 million over the first quarter of 2013. This increase was the result of a $1.2 million contribution from a new location and same-store sales increases of $0.1 million, or 0.9 percent, offset by a $0.2 million decrease from the closure of an underperforming glass facility.
Sales in the U.S. were $163.1 million, an increase of $51.9 million or 46.6 percent, over the same period in 2013. The increase resulted from contributions of $9.4 million from 20 new locations, $11.0 million from 25 Hansen Collision and Glass locations, $11.5 million incremental sales from the glass business, as well as a $9.3 million, or 8.8 percent, increase in same-store sales, excluding foreign exchange. Applying foreign exchange, same-store sales by increased by $10.7 million due to higher U.S. dollar exchange rates.
Earnings before interest, income taxes, depreciation, amortization, adjusted for fair value adjustments to financial instruments and acquisition, transaction and process improvement costs (“Adjusted EBITDA”1) increased to $15.0 million, or 8.2 percent of sales, compared with Adjusted EBITDA of $8.2 million, or 6.3 percent of sales, for the same period a year ago. The increase in Adjusted EBITDA was primarily the result of EBITDA contributions from same-store sales improvements and acquisitions combined with improved gross profit from the new paint supply agreement and a favourable U.S. dollar exchange rate.
The net loss for the first quarter of 2014 was $1.7 million or $0.112 per unit (fully diluted) compared to net earnings of $30 thousand or $0.002 per unit (fully diluted) for the same period last year. The loss was attributable to fair value adjustments to financial instruments of $7.4 million as well as acquisition, transaction and process improvement costs, and brand name amortization. Excluding the impact of these adjustments, adjusted net earnings would have increased to $7.3 million, or $0.486 per unit. This compares to adjusted net earnings of $3.7 million, or $0.292 per unit for the same period in 2013. The increase in adjusted net earnings is the result of acquisition and new location contributions, increases in same-store sales and improved gross profit from the new paint supply agreement. 
During the quarter, the Fund generated adjusted distributable cash of $10.6 million and declared distributions and dividends of $1.8 million, resulting in a payout ratio based on adjusted distributable cash of 17.3 percent for the quarter. This compares with adjusted distributable cash of $2.4 million, distributions and dividends of $1.5 million, and a payout ratio of 64.2 percent a year ago. On a trailing four-quarter basis at March 31, 2014, the Fund’s payout ratio stands at 21.5 percent. 
“The first quarter of 2014 once again demonstrated that our growth strategy, along with our targeted growth goals, remain achievable,” added Bulbuck. “We continue to model 6 percent to 10 percent growth in single location additions. We have added five new single locations so far this year and expect to add a total of 16 to 26 in 2014. Although there is more competition for larger multi-shop operation (“MSO”) acquisitions, we will maintain our discipline to acquire only those that will be accretive to the Fund. Our ability to acquire quality MSOs is again demonstrated by our acquisition of the 25 Collision Revision locations just last month. Our first quarter same-store sales growth of 7.6 percent, while enhanced by some unusual events, demonstrates that we are on track to take advantage of industry trends to achieve same-store sales growth. Our strong balance sheet, along with our expanded credit facility, positions us extremely well for continued growth and continued investment in our business.”
“Looking ahead, we have seen some of the positive impact of the severe winter weather continue into the second quarter, but we expect that its impact will continue to diminish as the second quarter progresses. We therefore expect business conditions to return to more historical norms by the end of the second quarter.” 
2014 First Quarter Conference Call & Webcast
Management held a conference call on Wednesday, May 14, 2014, at 10 a.m. EST to review the Fund’s 2014 first quarter results. A live audio webcast of the conference call will be available through 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 21, 2014, at midnight by calling 1-855-859-2056 or 416-849-0833, reference number 30802811.
For more information on The Boyd Group, please visit boydgroup.com.

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