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- A strong finish to an exceptional year -
WINNIPEG, March 21, 2014 /CNW/ - Boyd Group Income Fund (TSX: BYD.UN)
("the Fund", "the Boyd Group" or "Boyd") today reported its financial
results for the three and twelve-month periods ended December 31, 2013.
The Fund's complete fiscal 2013 financial statements and MD&A have been
filed on SEDAR (www.sedar.com). This news release is not in any way a substitute for reading the Boyd
Group's financial statements, including notes to the financial
statements, and Management's Discussion & Analysis.
2013 Highlights
-
Sales increased by 33.1% to $578.3 million from $434.4 million in 2012,
including same-store sales increases of 4.1%
-
Adjusted EBITDA1 increased 39.1% to $41.5 million, compared with $29.8 million in 2012
Adjusted net earnings1 increased to $18.5 million compared with $14.7 million in 2012
-
Acquired controlling interest in Glass America to become second largest
auto glass retailer in the U.S. and acquired Hansen Collision and Glass
with 25 locations, to enter the Michigan market
-
Achieved single location growth target with 17 single location additions
-
Completed a $63.5 million bought deal equity financing in October to
repay unamortized prepaid rebates and position for enhanced
profitability and further growth
-
Entered into a new five year $100 million U.S. ($135 million U.S. with
accordion) revolving credit facility to facilitate growth
-
Increased distributions in November by 2.6% from $0.039 to $0.04
-
Added to S&P/TSX Dividend Aristocrats Index in December
-
Unit price increased 103% from $16.29 to $33.15 during the year
"Last year truly was an incredible year for the Boyd Group on multiple
fronts: in terms of organic growth, executing on our growth strategy
and taking prudent steps to position the Company for enhanced
profitability and continued growth in the future," said Brock Bulbuck,
President and Chief Executive Officer of Boyd Group. "The successful
completion of the multi-location Glass America and Hansen Collision and
Glass acquisitions combined with steady increases in same-store sales
and the continued addition of single locations contributed to strong
year-over-year sales growth. Additionally, the completion of our bought
deal equity financing and our new credit facility together increased
our financial flexibility and put Boyd in a strong position to continue
to execute on accretive opportunities to achieve our growth
objectives. And finally, our unitholders were rewarded with a 103%
increase in unit price over the course of the year, along with an
increase in monthly distributions that came into effect in November and
contributed to the Fund's addition to the S&P/TSX Canadian Dividend
Aristocrats Index."
Financial Results
For the three months ended December 31, 2013
Total sales increased by 40.1% to $161.1 million, compared with sales of
$115.0 million for the same period last year. The $46.1 million
increase was due largely to the contributions from acquisitions of
$35.7 million and improvement in same-store sales excluding the combined glass business, of 5.2% or $5.5 million compared to the same period a year ago. In
addition, Boyd benefited from favourable currency translation in the
amount of $5.4 million from same-store sales converted at a higher U.S.
dollar exchange rate.
Sales in Canada were $20.7 million, an increase of $0.6 million or 2.9%
over the fourth quarter of 2012. This increase was the result of a $1.1
million contribution from a new location, offset by a decrease of $0.2
million, or 1.0%, from a same-store sales decline and a $0.3 million
decrease from the closure of an underperforming glass facility.
Sales in the U.S. were $140.4 million, an increase of $45.6 million or
48.1%, over the same period in 2012. The increase resulted from
contributions of $34.6 million from acquisitions, including Glass
America and Hansen Collision and Glass, as well as a $5.7 million, or
6.7%, increase in same-store sales. Additionally, foreign exchange
positively impacted sales by $5.4 million due to higher U.S. dollar
exchange rates.
Earnings before interest, income taxes, depreciation, amortization,
adjusted for fair value adjustments to financial instruments,
write-down of goodwill and acquisition, transaction and process
improvement costs ("Adjusted EBITDA"1) increased to $13.5 million, or 8.4% of sales, compared with Adjusted
EBITDA of $8.6 million, or 7.5% of sales, for the same period a year
ago. The increase in Adjusted EBITDA was primarily the result of EBITDA
contributions from acquisitions, improvements in same-store sales,
improved gross margins and the translation of U.S. results to Canadian
dollars at higher exchange rates.
The Fund recorded income tax expense in the amount of $1.3 million,
compared with $0.6 million for the same period a year ago resulting
from increased taxable income from the growth of the business.
The net loss was $6.9 million or $0.48 per unit (fully diluted) compared
to net earnings of $2.4 million or $0.19 per unit (fully diluted) for
the same period last year. The loss was attributable to non-cash
expenses for fair value adjustments to financial instruments of $11.9
million which resulted primarily from a 20.5% appreciation in the
Fund's unit price during the quarter, acquisition, transaction and
process improvement costs, and brand name amortization. Excluding the
impact of these adjustments, adjusted net earnings would have increased
to $6.4 million, or $0.446 per unit. This compares to adjusted net
earnings of $5.0 million, or $0.398 per unit for the same period in
2012. The increase in adjusted net earnings of $1.4 million is the
result of higher Adjusted EBITDA partly offset by higher depreciation,
amortization, finance costs and income taxes.
During the quarter, the Fund generated adjusted distributable cash of
$10.3 million and declared distributions and dividends of $1.7 million,
resulting in a payout ratio based on adjusted distributable cash of
16.6% for the quarter. This compares with adjusted distributable cash
of $10.5 million, distributions and dividends of $1.5 million, and a
payout ratio of 14.0% a year ago. On a trailing four-quarter basis at
December 31, 2013, the Fund's payout ratio stands at 28.0%.
For the twelve months ended December 31, 2013
Total sales increased by 33.1% to $578.3 million, compared with sales of
$434.4 million for the same period last year. The $143.8 million
increase was due largely to sales generated from 33 new single
locations, six Pearl locations, 11 The Recovery Room locations, 14
Autocrafters locations, and 25 Hansen locations which combined
contributed $96.6 million of additional sales. With the acquisition of
Glass America, the glass business contributed incremental sales of
$24.6 million over the $22.2 million contributed last year. Same-store
sales, excluding the combined glass business, increased $16.0 million or 4.1% and increased a further $10.1 million
due to translation of same-store sales at a higher U.S. dollar exchange
rate.
Sales in Canada were $79.8 million, an increase of $5.6 million or 7.6%,
over the same period in 2012. The increase was driven by increased
same-store sales of $4.0 million or 5.5% plus $2.4 million of sales
from one new location partially offset by the closure of an
underperforming glass facility that decreased sales by $0.8 million.
Sales in the U.S. were $498.5 million, an increase of $138.2 million or
38.4% over the same period in 2012. Increased sales resulted from
incremental sales from new locations, which together contributed
additional sales of $94.1 million. The new combined glass business
contributed $24.6 million of incremental sales. Same-store sales
growth of 3.8% increased $12.1 million. Sales also increased by $10.1
million due to the strengthening U.S dollar, offset by $2.5 million in
lost sales due to the closure of three underperforming facilities in
2012.
Adjusted EBITDA1 totaled $41.5 million, or 7.2% of sales, compared with Adjusted EBITDA
of $29.8 million, or 6.9% of sales, for the same period one year ago.
The $11.7 million increase in Adjusted EBITDA was the result of EBITDA
contributions from improved same-store sales, new locations, and the
translation of U.S. results to Canadian dollars at higher exchange
rates.
The Fund recorded income tax expense in the amount of $4.0 million in
2013, compared with $2.4 million for the same period last year. The
increase was primarily the result of increased taxable income from the
growth in business.
The net loss was $11.6 million, or $0.89 per unit (fully diluted)
compared to net earnings of $7.1 million, or $0.56 per unit (fully
diluted) for the same period last year. The loss in the current year
resulted primarily from non-cash expenses for fair value adjustments of
$27.1 million due to the Fund's unit price appreciation from $16.29 at
the beginning of the year to $33.15 at December 31, 2013, or 103%.
Acquisition, transaction and process improvement costs, gain on sale of
software, write-down of goodwill and amortization of brands associated
with the re-branding of acquired businesses also impacted earnings. Net
earnings adjusted for these items, or adjusted net earnings, increased
to $18.5 million, or 3.2% of sales, compared with adjusted earnings of
$14.7 million, or 3.4% of sales, for the same period in 2012.
At December 31, 2013, the Fund had total debt outstanding, net of cash,
of $48.4 million, compared to $47.1 million at December 31, 2012 and
$70.5 million at September 30, 2013. The decrease in debt from
September 30, 2013 was primarily due to the repayment of U.S. senior
debt in the fourth quarter of 2013.
Outlook
"We expect the momentum gained by the Company in 2013 to continue into
2014," added Mr. Bulbuck. "With three single-location acquisitions
already completed in 2014, we are on track to meet our 6% to 10% single
location growth target for 2014. And while the market for larger
multi-shop operator ('MSO") acquisitions is becoming more competitive,
we continue to believe that there are opportunities for accretive MSO
acquisition growth. We intend to remain disciplined and selective in
pursuit of those opportunities, and the increased borrowing capacity
afforded by our expanded credit facility, combined with our strong
balance sheet, will allow us to continue to execute on these
opportunities as they arise. We remain confident in the ability of our
business model to increase market share in both Canada and the U.S.
through strategic acquisitions, single location growth and organic
growth from existing locations, and to continue to deliver solid value
for our unitholders going forward."
"Looking ahead to our first quarter, the unusually severe winter weather
conditions experienced in both Canada and many parts of the U.S. have
increased demand for our collision services in many of our markets,
however this has been somewhat offset by weather related production
challenges and business interruption that we have also experienced in
multiple markets." added Mr. Bulbuck. "We need to also bear in mind the
seasonality of some of our operating expenses, including payroll taxes,
which are typically highest during the first quarter, as well as the
seasonality of our expanded glass business, which experiences its
lowest demand in the winter months."
2014 Fourth Quarter and Full Year Conference Call & Webcast
Management will hold a conference call on Friday, March 21, 2014, at
10:00 a.m. (ET) to review the Fund's 2013 fourth quarter and full year
financial 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 www.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
Friday, March 28, 2014, at midnight by calling 1-855-859-2056 or
416-849-0833, reference number 3484406.
(¹) EBITDA, Adjusted EBITDA, distributable cash, adjusted distributable
cash and adjusted net earnings are not recognized measures under
International Financial Reporting Standards ("IFRS"). Management
believes that in addition to revenue, net earnings and cash flows, the
supplemental measures of distributable cash, adjusted distributable
cash, adjusted net earnings, EBITDA and Adjusted EBITDA are useful as
they provide investors with an indication of earnings from operations
and cash available for distribution, both before and after debt
management, productive capacity maintenance and non-recurring and other
adjustments. Investors should be cautioned, however, that EBITDA,
Adjusted EBITDA, distributable cash, adjusted distributable cash and
adjusted net earnings should not be construed as an alternative to net
earnings determined in accordance with IFRS as an indicator of the
Fund's performance. Boyd's method of calculating these measures may
differ from other public issuers and, accordingly, may not be
comparable to similar measures used by other issuers. For a detailed
explanation of how the Fund's non-GAAP measures are calculated, please
refer to the Fund's MD&A filing for the period ended December 31, 2013,
which can be accessed via the SEDAR Web site (www.sedar.com).
About The Boyd Group Inc.
In terms of locations, The Boyd Group Inc. is the largest operator of
non-franchised collision repair centers in North America and one of the
largest in terms of sales. The Company operates locations in five
Canadian provinces under the trade name Boyd Autobody & Glass (http://www.boydautobody.com), as well as in 15 U.S. states under the trade names Gerber Collision &
Glass (http://www.gerbercollision.com) and Hansen Collision. The Company is also a major retail auto glass
operator in the U.S. with locations across 28 U.S. states under the
trade names Gerber Collision & Glass, Glass America, Auto Glass
Services, Auto Glass Only, Auto Glass Authority, S&L Glass and Hansen
Auto Glass. The Company also operates Gerber National Glass Services,
an auto glass repair and replacement referral business with
approximately 3,000 affiliated service providers throughout the U.S.
under the "Gerber National Glass Services" name. For more information
on The Boyd Group Inc. or Boyd Group Income Fund, please visit our
website at (http://www.boydgroup.com).
To view Boyd Group Income Fund's Q4 and Year-end 2013 financial
statements and notes, please click here: http://files.newswire.ca/476/BGIFFinancials2013.pdf
About The Boyd Group Income Fund
The Boyd Group Income Fund is an unincorporated, open-ended mutual fund
trust created for the purposes of acquiring and holding certain
investments, including a majority interest in The Boyd Group Inc. and
its subsidiaries. The Boyd Group Income Fund units trade on the Toronto
Stock Exchange (TSX) under the symbol BYD.UN. For more information on
The Boyd Group Inc. or Boyd Group Income Fund, please visit our website
at http://www.boydgroup.com.
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: ability to
successfully complete paint supply arrangement restructuring on an
accretive basis; dependence upon The Boyd Group Inc. and its
Subsidiaries; cash distributions not guaranteed; inability to
successfully integrate acquisitions; economic downturn; operational
performance; rapid growth; loss of key customers; brand management and
reputation; insurance risk; quality of corporate governance; tax
position risk; risk of litigation; acquisition risk; credit &
refinancing risks; dependence on key personnel; employee relations;
decline in number of insurance claims; market environment change;
reliance on technology; weather conditions; expansion into new markets;
fluctuations in operating results and seasonality; increased government
regulation and tax risk; Canadian tax related risk; execution on new
strategies; operating hazards; energy costs; U.S. health care costs and
workers compensation claims; low capture rates; key supplier
relationships; capital expenditures; competition; potential undisclosed
liabilities associated with acquisitions; foreign currency risk; margin
pressure; acquisition and start-up growth and ongoing access to
capital; environmental, health and safety risk; interest rates;
unitholder liability limitation and the Fund's success in anticipating
and managing the foregoing risks.
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 the Fund'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 Boyd Group Income Fund
PDF available at: http://stream1.newswire.ca/media/2014/03/21/20140321_C6430_DOC_EN_38218.pdf
