Not for distribution to U.S. newswire services or for dissemination in the United States
– Fund Trustees approve fifth consecutive quarterly increase to distributions –
Winnipeg, Manitoba – March 26, 2009 – Boyd Group Income Fund (TSX: BYD.UN) (“the Fund” or “the Boyd Group”) today reported its financial results for the three and twelve-month periods ended December 31, 2008. The Fund’s complete fiscal 2008 financial statements and MD&A have been filed on SEDAR (www.sedar.com). Boyd Group also announced that the Trustees of the Fund have approved a 6.3% increase in monthly distributions from $0.02 per unit to $0.02125 per unit commencing May 2009 for unitholders of record on April 30, 2009.
2008 Highlights
- Record sales, net earnings and distributable cash
- Sales increased 10.2% to $209.7 million from $190.3 million in 2007
- Same store sales growth of 6.9% in the U.S. and 3.1% in Canada
- Net earnings increased 39.2% to $4.8 million from $3.4 million in 2007
- Adjusted EBITDA1 totalled $13.8 million compared to $13.2 million in 2007
- Adjusted distributable cash2 increased to $11.8 million from $5.9 million in 2007
- Trustees of the Fund approved four separate increases to monthly cash distributions during the year, increasing distributions 33.3% from $0.015 per unit to $0.02 per unit
- Commenced operations at four new start-up facilities located in Kansas, Washington, Nevada and Alberta as well as a glass repair and replacement services business located in Texas
“We are pleased to report record levels of sales, net earnings, adjusted EBITDA and cash available for distribution for the year ended December 31, 2008. Despite a weakening North American economy, we have increased collision repair volumes year over year, which is reflected in our same store sales growth in both our U.S. and Canadian operations,” said Terry Smith, CEO of the Boyd Group. “As a testament to our continued momentum and commitment to building unitholder value, we increased distributions four times during the year, representing an aggregate increase of 33%. With stable to improving financial performance, we expect that distributions will continue to be gradually increased over time. We will continue to closely monitor our payout ratio to insure that it is at a stable and sustainable level, especially in light of current economic conditions.”
Brock Bulbuck, President and Chief Operating Officer of the Boyd Group added “the Fund has continued to strengthen its balance sheet while at the same time growing by adding new collision repair start-up locations. Throughout 2008, we made considerable progress in our growth initiatives, including the opening of four new collision repair start-ups – three in the U.S. and one in Canada. We are confident that we have the balance sheet strength and the market opportunity to accelerate our previously announced expansion program of opening four to six new facilities in strategic markets each year for the next five years.”
Financial Results
Three Months Ended December 31, 2008
Sales for the three months ended December 31, 2008 increased 22.3% to $56.3 million, after adjusting for the effect of discontinued operations, compared to sales of $46.0 million for the three months ended December 31, 2007. This increase resulted from same store sales growth, both in Canada and the U.S., as well as new sales generated from collision repair start-ups in the U.S. and Canada as well as a new glass repair and replacement services business in the U.S.
Earnings from continuing operations before interest, income taxes, depreciation and amortization (“adjusted EBITDA”)1 for the fourth quarter of 2008 totalled $3.4 million or 6.0% of sales compared to adjusted EBITDA of $3.5 million or 7.5% of sales in the same period a year ago.
For the fourth quarter of 2008, net earnings from continuing operations were $1.7 million or 3.0% of sales compared to $1.0 million of 2.2% of sales for the fourth quarter of 2007.
For the three months ended December 31, 2008, net earnings after discontinued operations were $0.8 million or $0.068 per diluted unit and Class A common share, compared to net earnings of $0.8 million or $0.075 per diluted unit and Class A common share in the same period in 2007.
Adjusted distributable cash2 for the fourth quarter of 2008, increased to $2.7 million from $1.0 million in the fourth quarter a year ago.
Twelve Months Ended December 31, 2008
For the twelve months ended December 31, 2008 sales increased 10.2% to $209.7 million compared to sales of $190.3 million in the same period a year ago, after adjusting for the effect of discontinued operations. This increase resulted primarily from same store sales growth, both in Canada and the U.S., as well as new sales generated from four new collision repair start-ups in the U.S. and Canada located in Wichita, Kansas; Lacey, Washington; Las Vegas, Nevada and Calgary, Alberta, as well as new sales generated from a glass repair and replacement services business in Texas. Same store sales increased $10.3 million or 5.5% for the year ended December 31, 2008, after adjusting for the effect of discontinued operations.
Sales in Canada totalled $72.8 million in 2008, an increase of 4.5%, compared to $69.6 million a year ago. Sales increases in Canada were due to same store sales growth and new sales of $1.0 million from one 2008 start-up in Calgary, Alberta. Same store sales in Canada increased $2.2 million or 3.1% when compared to the prior year.
Sales in the U.S. totalled $137.0 million for the year ended December 31, 2008, up 13.5% from $120.7 million a year ago. Sales increases in the U.S. included new sales of $9.7 million from: two 2007 start-ups in Tempe, Arizona and Glenview, Illinois; three 2008 start-ups in Wichita, Kansas, Lacey, Washington, and Las Vegas, Nevada; as well as a glass repair and replacement services business located in Texas. Excluding the impact of foreign currency translation, same store sales in the U.S. increased $8.2 million or 6.9% when compared to 2007. Translation of U.S. revenues at a weaker U.S. dollar exchange rate, relative to the Canadian dollar, resulted in an offsetting decrease in same store sales of $1.6 million.
The Fund’s adjusted EBITDA for the twelve months ended December 31, 2008 totalled $13.8 million, or 6.6% of sales, compared to adjusted EBITDA of $13.2 million, or 6.9% of sales, for the twelve months ended December 31, 2007. The increase in adjusted EBITDA was primarily the result of increased sales and lower operating expenses as a percentage of sales. The decrease in adjusted EBITDA as a percentage of sales is primarily the result of higher foreign exchange gains in the prior year compared to the current year.
For the year ended December 31, 2008, net earnings from continuing operations were $7.6 million or 3.6% of sales compared to $4.3 million or 2.3% of sales for the year ended December 31, 2007. Net earnings were $4.8 million or $0.39 per diluted unit and Class A common share, compared to $3.4 million or $0.32 per diluted unit and Class A common share in the same period a year ago.
For the twelve months ended December 31, 2008, adjusted distributable cash2, which includes adjustments for the collection of additional prepaid rebates, cash flow used in discontinued operations, proceeds on the sale of equipment, reserves for working capital requirements and capital lease repayments, increased to $11.8 million from $5.9 million a year ago.
As at December 31, 2008, the Fund had total debt outstanding of $21.6 million compared to $20.2 million at September 30, 2008, $21.8 million at June 30, 2008, $22.6 million at March 31, 2008 and $30.1 million at December 31, 2007. The increase in total debt in the fourth quarter of 2008 was primarily due to the translation of U.S. denominated debt to Canadian dollars at a higher exchange rate.
Subsequent Events
Based on continued improvement in the Fund’s financial performance, on March 25, 2009, the Trustees of the Fund approved a fifth consecutive quarterly increase in monthly distributions and dividends to $0.02125 per unit commencing May 2009, for unitholders and shareholders of record on April 30, 2009.
2008 Year End Results Conference Call & Webcast
Management will hold a conference call on Thursday, March 26, 2009 at 10:00 a.m. (ET) to review the Fund’s 2008 fourth quarter and year end financial results. 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 Thursday, April 2, 2009 at midnight by calling 1-877-289-8525 or 416-640-1917, reference number 21300738#.
(¹)(²) Adjusted EBITDA, distributable cash and adjusted 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, the supplemental measures of distributable cash, adjusted distributable cash 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 adjusted EBITDA, distributable cash and adjusted 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 and adjusted 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 and adjusted distributable cash is calculated, please refer to the Fund’s MD&A filing for the three and twelve-month period ended December 31, 2008, 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 seven 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:
Brock Bulbuck
President & COO
Tel: (204) 895-1244
brock.bulbuck@boydgroup.com
Bruce Wigle or Adriana Braczek
Investor Relations
Tel: (416) 815-0700 or toll free 1-800-385-5451 (ext. 228 / 240)
bwigle@equicomgroup.com / abraczek@equicomgroup.com
Dan Dott
Chief Financial Officer
Tel: (204) 895-1244
dan.dott@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: the economic downturn; loss of key customers; fluctuations in cash distributions; dependence on the Fund’s operating subsidiary to pay its interest obligations; loss of services of key senior management personnel; damage to the Company’s brand; variation in the number of insurance claims; margin pressure; management of credit and refinancing risks; responding to changes in the market environment; technology risks; the management of key supplier relationships; capital expenditures; competition from established competitors and new entrants in the businesses in which the Company operates; employee relations; the ability to complete acquisitions of collision repair facilities and other businesses and to integrate these acquisitions successfully; the ability to identify start-up locations and reach anticipated profitability levels; potential discovery of undisclosed liabilities associated with acquisitions; energy costs; weather conditions; operational and infrastructure risks including possible equipment failure and performance of information technology systems; fluctuations in operating results and seasonality; ability to expand into the United States; insurance coverage of sufficient scope to satisfy any liability claims; environmental risk; interest rate fluctuations and general economic conditions; quality of corporate governance; pending and proposed legislative or regulatory developments including the impact of changes in laws, regulations and the enforcement thereof; quality of internal control systems; fluctuations in foreign currencies; fluctuations in the cost of benefit plans; impact of government owned insurance; and the possible impacts from public health emergencies, international conflicts and other developments including those relating to terrorism; 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. The Fund does not undertake to update any forward-looking statements; such statements speak only as of the date made.