Playing Through: Boyd grows Q1 profits despite outbreak

Winnipeg, Manitoba — May 6, 2020 — It might take more than a global pandemic to stop Boyd Group Services which owns both Gerber Collision and Glass and Assured Automotive.

This week, the company released a preview of its Q1 report, showing a 12.6 percent increase in sales from the same period in 2019. In total, the company saw sales reach $628.4 million, from $557.9 million in Q1 of 2019. Its net earnings increased by almost six percent, up from $21.4 million in 2019, to $22.7 million.

“Our team has undertaken proactive steps to adapt to the current environment, and to maintain our strong financial position,” said Tim O’Day, the Boyd Group’s president and CEO. “We have ample liquidity and we have been able to adjust our business to manage through this challenging situation, while also preparing to ramp back up as the demand for collision repair services begins to rise.”

While it was not until the end of late February that the coronavirus began to have a major impact on businesses, the automotive aftermarket behemoth is not expecting it to have devastating effects on its second-quarter performance either.

“Boyd team members have demonstrated exceptional perseverance and entrepreneurial spirit to adapt our operational excellence strategy by developing and executing revised operating procedures that provide a safe and healthy work environment while maximizing the business opportunities that exist,” O’Day said. “As a result, thus far in April our sales have been stable at the favourable end of the range outlined in our March 27th announcement.”

Our priorities remain taking care of the health and safety of our team members and guests while scaling our business appropriately during this pandemic, as well as preserving financial flexibility and preparing for the opportunities that lie ahead.”

It finished the quarter with a cash balance of $576 million. It has $950 million in liabilities–$550 million from leases–with no significant maturities until 2025.

Despite the strong numbers, the Boyd Group did announce it had taken steps to amend its terms of credit, in order to provide additional emergency headroom and provide increased financial flexibility.

“While the company has not breached any covenants to date, nor is it forecasting any breach for Q2 based on current sales levels, this amendment is intended to prevent the effects of the COVID-19 pandemic from distorting the covenant calculations and distracting the company or its lenders from the prudent management of the business over the quarters ahead,” Boyd Group press officers wrote.

Through the 2010s, the Boyd Group’s performance made it one of the best investments sold on the TSX as far as unit value was concerned.

 

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