March 22, 2013

Boyd Group Income Fund Reports Fourth Quarter and Full-year Results

- A record year marked by strong growth in new locations and acquisitions -

Not for distribution to U.S. newswire services or for dissemination in the United States

Winnipeg, Manitoba - March 22, 2012 - 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, 2012. The Fund’s complete fiscal 2012 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.

2012 Highlights

• Record sales, Adjusted EBITDA1 and distributable cash1
• Added 54 locations during the year through the acquisitions of Master in January, Pearl in July, The Recovery Room and Autocrafters in November, along with 15 new single location additions
• Sales increased by 21.7% to $434.4 million from $357.0 million in 2011; 24 new single locations in the last two years as well as five multi-location acquisitions (including Cars’ incremental sales) contributed $80.1 million in sales
• Same-store sales increased by 0.3%, excluding the impact of foreign exchange translation
• Gross margin increased to $194.6 million, or 44.8%, compared with $160.1 million, or 44.9%, in 2011
• Adjusted EBITDA1 of $29.8 million, compared with $24.4 million in 2011
• Net earnings were $7.1 million, or $0.563 per unit (diluted), compared with $2.9 million, or $0.262 per unit (diluted) in 2011
• Adjusted net earnings1 increased to $14.7 million, or 3.4% of sales, compared with adjusted net earnings of $11.7 million, or 3.3% of sales, in 2011
• Adjusted distributable cash1 of $17.9 million, compared with $16.0 million in 2011, with the increase largely due to stronger operating cash flow
• Payout ratio of 32.6%, compared with 31.3% in 2011
• In November, Fund Trustees approved a 4.0% increase in monthly distributions to $0.039 per unit

“We are very pleased to report another record year marked by our successful execution of our stated growth strategy,” said Brock Bulbuck, President and Chief Executive Officer of the Boyd Group. “2012 was highlighted by our acquisition of four multi-location collision repair businesses and the addition of 15 new single-location facilities, for a total of 54 new locations, bringing our North American footprint to 221 locations at the end of the year. This platform of acquisition and organic growth has driven our 21.7% growth in sales and 22.4% growth in Adjusted EBITDA. Against a challenging backdrop of an overall softer industry, partly due to prolonged mild and dry weather conditions, we are pleased to record positive same-store sales growth during the year. We believe this reflects increases in market share and the strength of our operations attributable to the quality of our service offerings, the reputation of our brands, and continuing consolidation of our industry.”

Financial Results

For the three months ended December 31, 2012

Sales increased by 14.4% to $115.0 million, compared with sales of $100.5 million for the same period last year. The increase was driven largely by multi-location acquisitions and new single-location additions, along with 2.0% same-store sales growth. Sales in Canada were $20.2 million, reflecting a 5.4% increase from $19.2 million for the same period in 2011. The increase is primarily due to same-store sales growth.

Sales in the U.S. were $94.8 million, an increase of $13.5 million or 16.6%, over the same period in 2011. The increase resulted primarily from acquisitions, new single-location additions, and 1.3% same-store sales growth, offset by $2.5 million from unfavourable currency translation and $1.3 million from the closure of three underperforming locations.

Adjusted earnings before interest, income taxes, depreciation and amortization (“Adjusted EBITDA”1) were $8.6 million, or 7.5% of sales, compared with Adjusted EBITDA of $7.6 million, or 7.6% of sales, for the same period a year ago. The increase in Adjusted EBITDA was primarily the result of EBITDA contribution from multi-location acquisitions and same-store performance, offset by lost contribution from underperforming location closures and foreign currency translation.

The Fund recorded income tax expense in the amount of $0.6 million, slightly below the $0.7 million for the same period a year ago.

Net earnings were $2.4 million, or $0.19 per unit (fully diluted), compared with a net loss of $2.1 million, or a loss of $0.19 per unit (fully diluted), for the same period last year. Net earnings were negatively impacted by fair value adjustments for exchangeable shares and unit options. Excluding the impact of fair value adjustments and other unusual and infrequent items, adjusted net earnings increased to $5.0 million, or $0.386 per unit and Class A share, compared with adjusted earnings of $3.8 million, or $0.291 per unit and Class A share, for the same period in 2011.

During the quarter, the Fund generated adjusted distributable cash of $10.5 million and declared distributions and dividends of $1.5 million, resulting in a payout ratio based on adjusted distributable cash of 14% for the quarter. This compares with adjusted distributable cash of $4.7 million, distributions and dividends of $1.4 million, and a payout ratio of 29.6% a year ago. The increase in distributable cash is primarily due to cash provided from higher earnings and from working capital changes.

For the twelve months ended December 31, 2012

Sales increased by 21.7% to $434.4 million, compared with sales of $357.0 million for the same period last year. The increase was due largely to multi-location acquisitions and new single-location additions, along with 0.3% same-store sales growth.

Sales in Canada were $74.2 million, a decrease of $1.3 million or 1.7%, over the same period in 2011. The decline was due to a same-store sales decrease of 3.9%, or $2.8 million, resulting from mild and dry conditions, as well as a $2.3 million decrease as a result of a location closure. This was offset by sales of $3.9 million from three new locations.

Sales in the U.S. were $360.3 million, an increase of $78.7 million or 28.0%, over the same period in 2011. The growth resulted primarily from multi-location acquisitions and new single-location additions which contributed $76.1 million, 1.5% same-store sales growth or $3.7 million, and $2.4 million from favourable currency translation, offset by $3.5 million from the closure of four underperforming locations.

Adjusted EBITDA1 for 2012 totalled $29.8 million, or 6.9% of sales, compared with Adjusted EBITDA of $24.4 million, or 6.8% of sales, in 2011. The $5.5 million increase in Adjusted EBITDA was primarily attributed to EBITDA contribution from multi-location acquisitions and new single-location additions, along with EBITDA contribution from same-store sales increases and favourable currency translation.

Net earnings were $7.1 million, or 1.6% of sales, compared with $2.9 million, or 0.8% of sales, in 2011. Adjusted net earnings increased to $14.7 million, or 3.4% of sales, compared with adjusted net earnings of $11.7 million, or 3.3% of sales, in 2011.

As at December 31, 2012, the Fund had total debt outstanding, net of cash, of $47.0 million, compared with $16.9 million at December 31, 2011. The increase in total debt, net of cash, is the result of new senior debt, seller notes and convertible debentures issued to fund multi-location acquisitions and new single location growth, offset by cash on hand.

Outlook

“As we enter a new year, we will continue to execute the growth strategy that we have proven successful over the past few years,” added Mr. Bulbuck. “We will continue to target 6%-10% growth through single-location additions in existing and adjacent markets. Last year, we added 15 new single locations under this strategy, representing in excess of 8% growth, which was towards the high end of our target. We continue to see many low-cost opportunities in the market for these additions. The second component of our strategy is accelerated growth through opportunistic acquisitions of multi-location businesses. Since the second half of 2010, we have completed six of these large transactions and have successfully integrated and rebranded most of them. While we sense that sellers of these businesses may have growing price expectations, we continue to believe that there are many opportunities for this kind of growth and we will continue to be prudent in identifying and assessing these potential acquisitions. Overall, we remain positive about long-term market conditions remaining favourable to grow our business.”

“Looking ahead to our first quarter, weather has continued to be a challenge in many of our markets. While the second half of the quarter began with some inclement weather in some of our northern markets, this weather has not generally been sustained and we have, therefore, seen little positive impact on our business,” added Mr. Bulbuck. “I would also like to remind everyone of the seasonality of some of our operating expenses. In particular, employee payroll taxes are typically highest during the first quarter and then decline over the course of the year as their maximum amounts are reached. Lastly, the positive impact of our recent acquisitions of The Recovery Room and Autocrafters is expected to be tempered in early 2013 by a gradual ramp up in sales as well as by planned integration and systems conversions. Notwithstanding these short-term headwinds, our business model remains strong, the long-term industry dynamics are favorable, and our management team remains committed to executing on value-building growth.”

“It is with regret that we announce the decision of Robert Chipman to retire from the Board effective May 27, 2013,” said Mr. Bulbuck. “Mr. Chipman has been a key member of the Board since the Fund’s predecessor became a public company in 1998. We would like to express our sincerest gratitude to Mr. Chipman for his many years of dedication and service to the Board, and wish him the very best for the future. During 2012, we were pleased to add Tim O’Day, Dave Brown, and Rob Gross to our Board, who collectively brought deep, solid, and extensive management experience to our Board and will help compensate for the retirement of Mr. Chipman.”

2012 Fourth Quarter and Year-end Results Conference Call & Webcast

Management will hold a conference call on Friday, March 22, 2013, at 10:00 a.m. (ET) to review the Fund’s 2012 fourth quarter and year-end 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 29, 2013, at midnight by calling 1-855-859-2056 or 416-849-0833, reference number 17987940.


(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 year ended December 31, 2012, 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 North America. The Company operates locations in the four Western Canadian provinces under the trade name Boyd Autobody & Glass (http://www.boydautobody.com), as well as in 14 U.S. states under the trade names Gerber Collision & Glass (http://www.gerbercollision.com), The Recovery Room and Autocrafters. 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 http://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. The Boyd Group Income Fund units trade on the Toronto Stock Exchange (TSX) under the symbol BYD.UN. The Boyd Group Income Fund convertible debentures trade on the TSX under the symbol BYD.DB.

For further information, please contact:
Brock Bulbuck
President & CEO
Tel: (204) 895-1244
brock.bulbuck@boydgroup.com

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