May 10, 2007
Boyd Group Income Fund Reports 2007 First Quarter ResultsNot for distribution to U.S. newswire services or for dissemination in the United States.
Winnipeg, Manitoba — May 10, 2007 — Boyd Group Income Fund (TSX: BYD.UN) (“the Fund”) today reported its financial results for the three-month period ended March 31, 2007. The Fund’s complete fiscal 2007 first quarter financial statements and MD&A will be filed on www.sedar.com on May 11, 2007.
2007 First Quarter Highlights
- Revenue increased 12.3% to $52.8 million compared to $47.0 million in Q1 2006
- Same store sales growth of 5.6% in the U.S. and 6.5% in Canada
- Net earnings increased to $0.8 million from a net loss of $1.8 million in Q1 2006
- Repayment of US$0.6 million of Canadian senior debt facility
- New collision repair centre opened in Glenview, Illinois
“Our Canadian and U.S. business segments achieved strong consolidated same store sales growth in the quarter, leading to growth in the Fund’s overall revenue, margins and net earnings.” said Terry Smith, CEO of the Boyd Group. “We are generally pleased with our financial performance for the quarter and subject to continued improvement in financial performance in our second and third quarters, we look forward to reinstating distributions at some time in the fourth quarter of this year. Over the intervening period, 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.”
For the first quarter ended March 31, 2007, revenue increased 12.3% to $52.8 million, compared to revenue of $47.0 million in the first quarter of 2006. The increase in revenue resulted from same store sales growth, both in Canada and the U.S., as well as $2.5 million in new sales generated from start-up collision repair centres in the U.S.
On a regional basis, sales in Canada in the first quarter of 2007 totalled $18.3 million, an increase of $1.1 million or 6.5%, compared to the first 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 first quarter of 2007 increased 15.6% to $34.5 million from $29.8 million in the first quarter a year ago. Sales increases in the U.S. included $2.5 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 $2.2 million or 7.1%, compared to the same period of the prior year. Translation of U.S. revenues at a stronger U.S. dollar exchange rate, relative to the Canadian dollar, during the first quarter of 2007 accounted for $0.5 million, or 1.5% of this increase. Excluding the impact of foreign currency translation, and start-ups, U.S. same store sales increased by $1.7 million or 5.6%, compared to the first quarter a year ago.
Earnings before interest, income taxes, depreciation and amortization (“EBITDA”)¹ for the first quarter of 2007 totalled $3.2 million or 6.1% of sales compared to EBITDA of $2.0 million or 4.2% of sales in the same period of the prior year. The increase in EBITDA was in part the result of sales growth in the period. EBITDA in 2006 was in part impacted by changes associated with replacing trading partners.
Net earnings for the three months ended March 31, 2007 were $0.8 million or $0.07 per fully diluted unit compared to a net loss of ($1.8) million or ($0.17) 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 first quarter of 2007, in both Canada and the U.S., coupled with reductions in operating costs as a percentage of sales.
The Fund had total debt outstanding at March 31, 2007 of $40.0 million, comprised of: $7.1 million in net bank indebtedness; $3.4 million of Canadian senior bank term debt; $14.9 million of U.S. senior bank debt; $0.3 million of supplier debt; $0.6 million of vendor loans; $1.4 million of obligations under capital lease; and, $12.3 million in subordinate convertible debentures and exchangeable notes. This compares to $41.0 million in total debt outstanding as at December 31, 2006. On January 16, 2007, the Company repaid US$0.6 million of its Canadian senior debt facility, leaving US$3.0 million to be repaid in five additional quarterly payments of US$0.6 million up to and including April 15, 2008.
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 and third quarters, the Fund anticipates reinstating distributions at some time in the fourth quarter 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 First Quarter Conference call & Web cast
Management of the Boyd Group Income Fund will host a conference call to discuss the Fund’s 2007 first quarter financial results on Friday, May 11, 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 May 18th at midnight by calling 1-877-289-8525 or 416-640-1917, reference number 21232068#.
(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 March 31, 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:
Tel: (204) 895-1244
Tel: (416) 815-0700 or toll free 1-800-385-5451 (ext.228)
Chief Financial Officer
Tel: (204) 895-1244
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.
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Boyd Group Services Inc.
1745 Ellice Avenue
Boyd Group Services Inc.
1745 Ellice Avenue
Winnipeg, Manitoba, R3H 1A6