May 14, 2010

Boyd Group Income Fund Reports First Quarter Results

- Fund Trustees approve tenth consecutive increase to distributions -

Winnipeg, Manitoba — May 14, 2010 — Boyd Group Income Fund (TSX: BYD.UN) (“the Fund” or “the Boyd Group”) today reported its financial results for the three-month period ended March 31, 2010. The Fund’s complete fiscal 2010 first quarter financial statements and MD&A have been filed on SEDAR ( Boyd Group also announced that the Trustees of the Fund have approved a 4.8% increase in monthly distributions from $0.02625 per unit to $0.0275 per unit commencing July 2010 for unitholders of record on June 30, 2010.

Q1 2010 Highlights

  • Adjusted EBITDA1 totalled $3.4 million compared to Adjusted EBITDA1 of $3.5 million in Q1 2009
  • Adjusted distributable cash2 increased to $2.8 million from $2.1 million in Q1 2009
  • Payout ratio of 31.5% compared to 34.2% in Q1 2009
  • Sales decreased by 13.6% to $54.7 million from $63.3 million in Q1 2009, significantly impacted by the weakness of the U.S. dollar
  • Same-store sales declined by 6.3%, excluding the impact of foreign exchange translation
  • Net earnings were $1.9 million, or 3.4% of sales, compared to $2.0 million, or 3.2% of sales, in Q1 2009

“We are pleased to report stable net earnings and EBITDA, as well as increased cash available for distribution to begin 2010, despite the negative impact of the weakening U.S. dollar on our U.S. operations and the continuing negative impact of the economy combined with extremely mild and dry winter weather in many of our northern markets during the quarter,” said Brock Bulbuck, President and Chief Executive Officer of the Boyd Group. “As a result of our operational efficiencies and cash flow strength, we have announced a further 4.8% increase in our monthly distributions, which represents the tenth consecutive quarterly increase.”

“In addition to posting good results in a challenging market environment in the first quarter, we are also pleased with our progress in advancing both our operational and growth initiatives. In May 2010 we opened a new start-up facility in Georgia and acquired the assets and business of a collision repair facility in Oklahoma. We believe that, despite current market challenges, we are well positioned to benefit from long-term opportunities in our highly fragmented industry through consolidation and economies of scale,” added Mr. Bulbuck.

Financial Results

Three Months Ended March 31, 2010

Sales for the three months ended March 31, 2010 decreased by 13.6% to $54.7 million, compared to sales of $63.3 million for the three months ended March 31, 2009, after adjusting for the effect of discontinued operations. This decrease resulted from a lower U.S. dollar translation rate on sales generated from Boyd Group’s U.S. operations of $6.6 million, a same store sales decline of $4.0 million or 6.3%, offset by sales generated from new collision repair start-ups that commenced operations in 2009 of $2.0 million.

On a segmented basis, sales in Canada totalled $19.0 million for the three months ended March 31, 2010, a decrease of $0.9 million or 4.6%. Sales decreases in Canada were due to same-store sales declines as a result of soft market conditions as well as extremely mild and dry winter weather.

Sales in the U.S. totalled $35.7 million in the first quarter of 2010, a decrease of $7.7 million, or 17.7%, over the same period in 2009. Translation of U.S. revenues at a weaker U.S. dollar exchange rate relative to the Canadian dollar resulted in a decrease in same-store sales of $6.6 million. Same-store sales in the U.S. declined by a further $3.1 million or 7.1% when compared to Q1 2009 due to weak market conditions as well as mild and dry winter weather in our northern markets. Sales in the U.S. included sales of $2.0 million from new locations in Glendale, Arizona; Anthem, Arizona; Rome, Georgia; Avondale, Arizona; and three new locations in Tucson, Arizona.

Adjusted earnings before interest, income taxes, depreciation and amortization (“Adjusted EBITDA”)1 for the first quarter of 2010 totalled $3.4 million, or 6.3% of sales, compared to Adjusted EBITDA of $3.5 million, or 5.6% of sales, in the same period a year ago. Adjusted EBITDA was impacted by lower same store sales and the translation of the U.S. dollar, however this reduction was offset by improvements in gross margin percentage due to better parts discounts and mix in types of parts, changes to labour pay plans and improved paint and material usage. The increase in Adjusted EBITDA as a percentage of sales was affected by foreign exchange gains of $0.1 million recorded in the current period compared to foreign exchange losses of $0.1 million recorded in the prior year as well as the improved gross margin percentage.

In the first quarter of 2010, earnings from continuing operations were $2.1 million, or 3.9% of sales, compared to $2.1 million, or 3.3% of sales in the same quarter a year ago.

During the quarter the Fund closed one under-performing facility in Illinois.

For the three months ended March 31, 2010, net earnings after discontinued operations were $1.9 million or $0.159 per diluted unit and Class A common share, compared to net earnings of $2.0 million or $0.170 per diluted unit and Class A common share in the same period in 2009.

In the first three months of 2010, the Fund generated 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, adjustments to reserves for working capital changes, and capital lease repayments, of $2.8 million and declared distributions of $0.9 million, representing a payout ratio of 31.5% for the quarter.

As at March 31, 2010, the Fund had total debt outstanding, net of cash, of $13.6 million, compared to $16.7 million at December 31, 2009, $17.2 million at September 30, 2009, $19.8 million at June 30, 2009, and $22.2 million at March 31, 2009. The change is due to reductions in bank indebtedness and the repayment of U.S. senior bank debt.


“Despite our positive view on industry opportunities and sporadic signs of economic improvement, unemployment rates remain at high levels and our market conditions remain soft. As such, until economic conditions stabilize and unemployment rates show steady and sustainable declines, we expect to continue seeing challenges in achieving same-store sales growth,” said Mr. Bulbuck. “Nonetheless, we believe that we have the management team, systems, experience and long-term market opportunity, along with a strong balance sheet, to continue to successfully grow our business. In fact, subsequent to the end of the quarter, we opened two new facilities in Cartersville, Georgia and Tulsa, Oklahoma. We are confident that we will achieve our expansion plan of adding eight to 10 locations in 2010.”

“Our objective continues to be to gradually increase distributions over time. However, we are also committed to a conservative distribution policy that will provide us financial flexibility and the ability to support our growth initiatives,” Mr. Bulbuck added. “We will, therefore, continue our prudent approach and give full consideration as to whether further distribution increases are appropriate during these challenging times.”

“Lastly, we would also like to take this opportunity to reiterate our plans for our structure with respect to the imminent 2011 Tax Fairness Law. At this time, the Fund does not intend to convert into a corporation. We believe that this decision is in the best interest of our unitholders for several reasons. First, we believe that the Fund will not achieve any net tax savings by converting. In fact, we are continuing to explore opportunities to utilize our current structure and significant base of U.S. operations to reduce tax paid on distributions. Second, we believe that the cost of conversion, which we estimate to be between $500,000 and $1 million, is not a prudent use of cash and is not justified by any perceived benefits from conversion for a fund of our size. Third, we believe that our taxable unitholders will benefit from the lower tax rate on distributions received, as we expect to be able to maintain our distributions, despite any trust tax that the Fund will incur. We would stress that there is no requirement for income trusts to convert into a corporation. However, we will continue to monitor the market and tax laws, and evaluate alternatives at the appropriate time if it becomes clear that a different structure would be in our unitholders’ best interest,” concluded Mr. Bulbuck.

Subsequent Event

On May 13, 2010, the Trustees of the Fund approved the tenth consecutive quarterly increase in monthly distributions and dividends to $0.0275 per unit commencing July 2010, for unitholders and shareholders of record on June 30, 2010.

Q1 2010 Results Conference Call & Webcast

Management will hold a conference call on Friday, May 14, 2010 at 10:00 a.m. (ET) to review the Fund’s 2009 first quarter financial results. You can join the call by dialling 888-231-8191 or 647-427-7450. A live audio webcast of the conference call will be available through 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, May 21, 2010 at midnight by calling 800-642-1687 or 416-849-0833, reference number 70150448.

(¹)(²) EBITDA, 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, 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 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-month period ended March 31, 2010, which can be accessed via the SEDAR Web site (

To view Boyd Group Income Fund’s Q1 2010 financial statements and notes, please click here:

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 under the trade name Boyd Autobody & Glass, as well as in seven U.S. states under the trade name Gerber Collision & 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 United States. For more information on The Boyd Group Inc. or Boyd Group Income Fund, please visit our website at

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 & CEO
Tel: (204) 895-1244

Salvador Diaz
Investor Relations
Tel: (416) 815-0700 or toll free 1-800-385-5451 (ext. 242)

Dan Dott
Chief Financial Officer
Tel: (204) 895-1244

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, health & safety 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.

Corporate Headquarters
Boyd Group Services Inc.

1745 Ellice Avenue
Winnipeg, Manitoba, R3H 1A6
Tel: 204-895-1244
Fax: 204-895-1283