Winnipeg, Manitoba — August 9, 2007 — Boyd Group Income Fund (TSX: BYD.UN) (“the Fund”) today reported its financial results for the three and six-month periods ended June 30, 2007. The Fund’s complete fiscal 2007 second quarter financial statements and MD&A will be available on www.sedar.com on August 10, 2007.
2007 Second Quarter Highlights
– Revenue increased 10.9% to $49.7 million compared to $44.8 million in Q2 2006
– Same store sales growth of 5.8% in the U.S. and 11.0% in Canada
– Net earnings increased to $0.9 million from a net loss of $0.7 million in Q2 2006
– Repayment of $0.6 million U.S. of Canadian senior debt facility
“For the third consecutive quarter, both our Canadian and U.S. operations achieved strong same store sales growth, leading to growth in the Fund’s overall revenue, margins and net earnings,” said Terry Smith, CEO of the Boyd Group. “Looking ahead, we will continue to utilize cash flow from operations to strengthen the Fund’s balance sheet while monitoring the Fund’s financial position to assess the appropriate time to resume distributions at conservative and sustainable levels. With continued positive financial performance in the second half of 2007, we would expect to resume distributions sometime in the fourth quarter of this year. ”
Financial Results
For the second quarter ended June 30, 2007, revenue increased 10.9% to $49.7 million, compared to revenue of $44.8 million in the second quarter of 2006. The increase in revenue resulted from same store sales growth, both in Canada and the U.S., as well as $2.1 million in new sales generated from start-up collision repair centres in the U.S.
On a regional basis, sales in Canada in the second quarter of 2007 totalled $18.3 million, an increase of $1.8 million or 11.0%, compared to the second quarter a year ago. Sales increases in Canada are entirely due to same store sales growth, with increases reported in all four western provinces.
Sales in the U.S. in the second quarter of 2007 increased 10.8% to $31.4 million from $28.3 million in the second quarter a year ago. Sales increases in the U.S. included $2.1 million in new sales from three 2006 start-ups in Tacoma and Renton, Washington, and Scottsdale, Arizona, as well as one new 2007 start-up located in Glenview, Illinois. Same store sales in the U.S. increased $1.0 million or 3.5%, compared to the same period of the prior year. Excluding the impact of foreign currency translation, U.S. same store sales increased by $1.6 million or 5.8%, compared to the second quarter a year ago.
Earnings before interest, income taxes, depreciation and amortization (“EBITDA”)¹ for the second quarter of 2007 totalled $3.0 million or 6.0% of sales compared to EBITDA of $2.5 million or 5.5% of sales in the same period of the prior year. The increase in EBITDA was primarily the result of higher sales and lower operating expenses as a percentage of sales.
Net earnings for the three months ended June 30, 2007 totalled $0.9 million or $0.08 per fully diluted unit compared to a net loss of ($0.7) million or ($0.06) per fully diluted unit for the same period in the prior year. The increase in net earnings reflects the strong same store sales growth for the second quarter of 2007, in both Canada and the U.S., coupled with reductions in operating costs as a percentage of sales.
For the six months ended June 30, 2007 revenue increased 11.6% to $102.5 million compared to revenue of $91.9 million in the same period a year ago. EBITDA for the six months ended June 30, 2007 totalled $6.2 million, or 6.1% of sales, compared to EBITDA of $4.4 million, or 4.8% of sales, in the corresponding period a year ago. The Fund’s net earnings for the six months ended June 30, 2007 were $1.6 million or $0.15 per fully diluted unit compared to a net loss of $2.4 million or $(0.24) per fully diluted unit in the same period a year ago.
The Fund had total debt outstanding at June 30, 2007 of $36.1 million, comprised of: $5.8 million in net bank indebtedness; $2.6 million of Canadian senior bank term debt; $13.8 million of U.S. senior bank debt; $0.3 million of supplier debt; $0.6 million of vendor loans; $1.3 million of obligations under capital lease; and $11.7 million in subordinate convertible debentures and exchangeable notes. This compares to $40.3 million in total debt outstanding as at March 31, 2007 and $41.0 million at December 31, 2006. Positive cash flow for the year was used to repay $1.2 million U.S. of Canadian senior bank debt, $0.6 million U.S. per quarter, and reduce net bank indebtedness. The translation of U.S. debt with a weaker U.S. dollar, relative to the Canadian dollar, also helped reduce the total debt outstanding.
Distributable Cash²
On December 15, 2005, the Fund suspended cash distributions to unitholders until further notice. The Trustees of the Fund and senior management of the Boyd Group determined that a temporary suspension of distributions was in the best interests of unitholders as it would allow the Boyd Group to strengthen its balance sheet and improve its cash position and financial flexibility. Subject to continued improvement in year-over-year financial performance in the second half of 2007, the Fund anticipates reinstating distributions at some time in the fourth quarter of 2007. Over the intervening period, Boyd Group will continue to use its cash flow from operations to strengthen its balance sheet while monitoring its financial position to assess the appropriate time to resume distributions at conservative and sustainable levels.
2007 Second Quarter Conference call & Web cast
Management of the Boyd Group Income Fund will host a conference call to discuss the Fund’s 2007 second quarter financial results on Friday, August 10, 2007 at 10:00 a.m. EDT. The conference call will be webcast live at www.boydgroup.com and archived for 90 days. A taped replay of the conference call will also be available until Friday August 17, 2007 at midnight by calling 1-877-289-8525 or 416-640-1917, reference number 21240776#.
(¹)(²) EBITDA and distributable cash are not recognized measures under Canadian generally accepted accounting principles (GAAP). Management believes that in addition to revenue, net earnings and cash flows, distributable cash and EBITDA are useful supplemental measures as they provide investors with an indication of earnings from operations and cash available for distribution, both before and after debt service, capital expenditures and income tax. Investors should be cautioned, however, that EBITDA and distributable cash should not be construed as an alternative to net earnings determined in accordance with GAAP as an indicator of the Fund’s performance. Boyd’s method of calculating distributable cash 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 distributable cash is calculated, please refer to the Fund’s MD&A filing for the three months ended June 30, 2007, which can be accessed via the SEDAR Web site (www.sedar.com).
About The Boyd Group Inc.
The Boyd Group Inc. is the largest operator of collision repair centres in Canada and among the largest in North America. The company operates locations in the four western Canadian provinces principally under the trade names Boyd Autobody & Glass and Service Collision Repair, as well as in six U.S. states principally under the trade name Gerber Collision & Glass. The company also operates Gerber National Glass Services, an auto glass repair and replacement referral business with affiliated service providers throughout the United States. For more information on The Boyd Group Inc. or Boyd Group Income Fund, please visit our Web site at www.boydgroup.com .
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.
For further information, please contact:
Terry Smith
CEO
Tel: (204) 895-1244 (ext. 222)
terry.smith@boydgroup.com
Bruce Wigle
Investor Relations
Tel: (416) 815-0700 or toll free 1-800-385-5451 (ext. 228)
bwigle@equicomgroup.com
Dan Dott
Chief Financial Officer
Tel: (204) 895-1244
dan.dott@boydgroup.com
This press release contains forward-looking statements, other than historical facts, which reflect the view of the Fund’s management with respect to future events. Such forward-looking statements reflect the current views of the Fund’s management and are made on the basis of information currently available. Although management believes that its expectations are reasonable, it can give no assurance that such expectations will prove to be correct. The forward-looking statements contained herein are subject to these factors and other risks, uncertainties and assumptions relating to the operations, results of operations and financial position of the Fund. The Fund assumes no obligation to update the forward-looking statements or to update the reasons why actual results could differ from those contemplated by the forward-looking statements.
