Winnipeg, Manitoba — August 14, 2014 — Second quarter sales at Boyd Group have increased by 48.2 percent over the same period in 2013. In dollars, sales increased by $202.8 million from $136.9 million. Boyd Group recently reported its financial results for the three and six-month periods ended June 30, 2014. The Fund’s second quarter 2014 financial statements and MD&A have been filed on SEDAR.
For the three months ended June 30, 2014, total sales increased by 48.2 percent to $202.8 million, compared with sales of $136.9 million for the same period last year. The $65.9 million increase was due largely to the contributions of $37.8 million from acquisitions, incremental sales of $12.8 million from the glass business compared to $10.3 million contributed in the same period last year, and same-store sales increases, excluding foreign exchange, of $9.1 million.
In addition, Boyd benefited from favourable currency translation in the amount of $7.5 million from same-store sales converted at a higher U.S. dollar exchange rate. Sales were affected by the closure of under-performing facilities which decreased sales by $1.3 million.
Sales in Canada were $20.0 million, an increase of $0.4 million over the second quarter of 2013. This increase was the result of a $0.9 million contribution from one new location offset by same-store sales decreases of $0.2 million, and a $0.3 million decrease from the closure of an underperforming glass facility.
Sales in the U.S. were $182.8 million, an increase of $65.6 million or 55.9 percent, over the same period in 2013. The increase resulted from contributions of $7.1 million from 17 new single locations, $29.8 million from Hansen, Collision Revision and Collex, $12.8 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 increased by $7.5 million due to higher U.S. dollar exchange rates. Sales decreased by $1.0 million due to closures of underperforming repair facilities.
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 97.0 percent to $18.1 million, or 8.9 percent of sales, compared with Adjusted EBITDA of $9.2 million, or 6.7 percent of sales, for the same period a year ago. The increase in Adjusted EBITDA was primarily the result of same-store sales improvements, higher back-end paint discounts and incremental EBITDA contribution from the glass business, Hansen, Collision Revision, and Collex acquisitions as well as other single location growth.
The net loss for the second quarter of 2014 was $11.2 million or $0.749 per unit (fully diluted) compared to net loss of $2.6 million or $0.205 per unit (fully diluted) for the same period last year. The loss was attributable to fair value adjustments to financial instruments of $17.5 million primarily due to the increase in unit price during the quarter, along with acquisition, transaction and process improvement costs of $1.8 million. Excluding the impact of these adjustments as well as the amortization of brand names, adjusted net earnings would have increased to $8.5 million, or $0.567 per unit. This compares to adjusted net earnings of $3.8 million, or $0.302 per unit for the same period in 2013. The increase in adjusted net earnings is the result of new acquisition contributions, new location growth and increases in same-store sales.
During the quarter, the Fund generated adjusted distributable cash of $16.7 million and declared distributions and dividends of $1.8 million, resulting in a payout ratio based on adjusted distributable cash of 11.0 percent for the quarter. This compares with adjusted distributable cash of $5.2 million, distributions and dividends of $1.5 million, and a payout ratio of 29.0 percent a year ago. On a trailing four-quarter basis at June 30, 2014, the Fund’s payout ratio stands at 16.4 percent.
For the six months ended June 30, 2014, total sales increased by 44.5 percent, or $118.9 million, to 386.5 million, compared to the same period last year. The increase was due largely to sales generated from 23 new single locations, 25 Hansen locations, 25 Collision Revision locations and 16 Collex locations, which combined contributed $60.6 million of incremental sales. The glass business contributed incremental sales of $24.3 million. Same store sales increased by 7.3 percent adding another $17.9 million excluding foreign exchange and increased a further $18.0 million due to the translation of same-store sales at a higher U.S. dollar exchange rate. Sales were affected by the closure of under-performing facilities which decreased sales by $1.9 million.
Sales in Canada were $40.5 million, an increase of $1.5 million or 3.9 percent, over the same period in 2013. The increase was driven by $2.1 million sales from a new location and same-store sales increases of $0.1 million or 0.3 percent, offset by $0.7 million decrease in sales due to the closure of one underperforming glass facility.
Sales in the U.S. were $345.9 million, an increase of $117.4 million or 51.4 percent compared with the same period in 2013. Increased sales resulted primarily from $16.5 million generated from 22 new locations, $42.0 million incremental sales from Hansen, Collision Revision and Collex, as well as $24.3 million incremental sales from the glass business. Sales also benefitted from same-store increases of $17.8 million or 8.6 percent excluding foreign exchange, and increased another $18.0 million due to translation of same-store sales at a higher U.S. dollar exchange rate. Sales were affected by the closure of underperforming facilities resulting in a sales decrease of $1.2 million.
Adjusted EBITDA1 totalled $33.1 million, or 8.6 percent of sales, compared with Adjusted EBITDA of $17.3 million, or 6.5 percent of sales, for the same period one year ago. The $15.8 million increase in Adjusted EBITDA was primarily the result of same-store sales growth, higher back-end paint discounts and incremental EBITDA contribution from the glass business, Hansen, Collision Revision, and Collex acquisitions as well as other single location growth.
The net loss of $12.9 million or $0.861 per unit (fully diluted) compared to the net loss of $2.5 million or $0.202 for the same period last year. This decrease was the result of fair value adjustments to financial instruments of $24.9 million primarily due to the increase in unit price during the quarter, along with acquisition, transaction and process improvement costs of $3.1 million. Net earnings adjusted for these items as well as the amortization of brand names increased to $15.7 million, or $1.052 per unit, compared with adjusted earnings of $7.4 million, or $0.594 per unit, for the same period in 2013.
As at June 30, 2014, the Fund had total debt outstanding, net of cash, of $109.9 million, compared to $44.8 million at March 31, 2014 and $48.4 million at December 31, 2013. The increase in debt was due to additional seller loans and draws on the revolving bank debt facility related to the acquisitions of Collision Revision and Collex.
Outlook
“During 2014 we have executed on our growth strategy by acquiring 41 locations through multi-shop acquisitions. We remain disciplined in our approach to acquiring quality multi-shop operations to achieve accretive growth,” says Bulbuck. “Additionally we added seven single-store locations as we continue to model 6 percent to 10 percent growth in single location additions for a total of 16 to 26 in 2014. Our second quarter same-store sales growth of 7.3 percent system wide, with 8.8 percent growth in the U.S., is a testament to our ability to make accretive acquisitions that consistently contribute over time.”
“Looking to the rest of the year, we will continue to focus on our three-pronged growth strategy to continue to add single store locations, accretively acquire multi-shop operations and achieve same-store sales growth.”
2014 Second Quarter Conference Call & Webcast
Management will hold a conference call on Thursday, August 14, 2014, at 10:00 a.m. (EST) to review the Fund’s 2014 second quarter results. You can join the call by dialing 888-231-8191 or 647-427-7450. 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 Thursday, August 21, 2014, at midnight by calling 1-855-859-2056 or 416-849-0833, reference number 74176603.
