November 13, 2007
Boyd Group Income Fund reports 2007 third quarter results
Not For Distribution To U.S. Newswire Services Or For Dissemination In The United States.
WINNIPEG, Nov. 13, 2007 - Boyd Group Income Fund (TSX: BYD.UN) (“the Fund”) today reported its financial results for the three and nine-month periods endedSeptember 30, 2007. The Fund’s complete fiscal 2007 third quarter financial statements and MD&A will be available on www.sedar.com
on November 14, 2007.
2007 Third Quarter Highlights
- Revenue increased 6.4% to $47.7 million compared to $44.8 million in Q3 2006
- Same store sales growth during the quarter of 8.3% in the U.S. and 14.0% in Canada
- Net earnings increased to $1.0 million from a net loss of $2.0 million in Q3 2006
- Distributable cash of $2.2 million compared to $0.7 million in Q3 2006
- Repayment of $0.6 million U.S. of Canadian senior debt facility
- Declared on November 13, 2007 a distribution to unitholders and dividend to Boyd Group Holdings Inc. (“BGHI”) Class A shareholders of $0.015 per unit and/or Class A share
“We continued to build on our positive momentum with a fourth consecutive quarter of same store sales growth in both the U.S. andCanada and our third consecutive profitable quarter. Our improved financial performance has been achieved despite a weaker U.S. dollar exchange rate. We believe our financial results demonstrate the considerable progress we have made in optimizing the performance of our collision repair, auto glass and network glass businesses,” saidTerry Smith , Chief Executive Officer of the Boyd Group. “As a result of the ongoing improvement in our financial performance and strengthened balance sheet, the Trustees of the Fund have approved the reinstatement of monthly distributions of$0.015 per unit, commencing in December 2007. This annualized distribution of $0.18 represents a payout ratio estimated to be in the low to mid 30% range, being a conservative and sustainable level that allows for continued balance sheet improvement. With stable to improving financial performance, we expect that distributions will be gradually increased over time.”Financial Results
For the third quarter ended September 30, 2007, revenue increased 6.4% to $47.7 million, compared to revenue of $44.8 million in the third quarter of 2006. The increase in revenue resulted from same store sales growth, both in Canada and the U.S., as well as new sales generated from start-ups in the U.S.
On a regional basis, sales in Canada in the third quarter of 2007 totalled $17.2 million, an increase of $2.1 million or 14.0%, compared to the third quarter a year ago. Sales increases in Canada are entirely due to same store sales growth, with continued increases reported in all four western provinces.
Sales in the U.S. in the third quarter of 2007 increased 2.5% to $30.5 million from $29.7 million in the third quarter a year ago. Excluding the impact of foreign currency translation, U.S. same store sales increased by $2.5 million or 8.3%, compared to the third quarter a year ago.
Earnings before interest, income taxes, depreciation and amortization (“EBITDA”)(1) for the third quarter of 2007 totalled $3.1 million or 6.5% of sales compared to EBITDA of $3.4 million or 7.7% of sales in the same period of the prior year. The decrease in EBITDA was primarily the result of lower foreign exchange gains in 2007. Excluding foreign exchange gains, EBITDA was up 22% from the third quarter in 2006.
Net earnings for the three months ended September 30, 2007 totalled $1.0 million or $0.10 per diluted unit compared to a net loss of $2.0 million or ($0.20) per diluted unit for the same period in the prior year. The increase in net earnings reflects the strong same store sales growth for the third quarter of 2007, in bothCanada and the U.S., coupled with reductions in operating costs as a percentage of sales, as well as lower depreciation, amortization and income tax expenses.
For the nine months ended September 30, 2007 revenue increased 9.9% to $149.8 million compared to revenue of $136.4 million in the same period a year ago. EBITDA for the nine months ended September 30, 2007 totalled $9.3 million, or 6.2% of sales, compared to EBITDA of $7.9 million, or 5.8% of sales, in the corresponding period a year ago. The Fund’s net earnings for the nine months ended September 30, 2007 were $2.6 million or $0.25 per diluted unit compared to a net loss of $4.4 million or $(0.43) per diluted unit in the same period a year ago.
The Fund had total debt outstanding at September 30, 2007 of $33.0 million, comprised of: $5.1 million in net bank indebtedness; $1.8 million of Canadian senior bank term debt; $12.8 million of U.S. senior bank debt; $0.2 million of supplier debt; $0.5 million of vendor loans; $1.3 million of obligations under capital lease; and $11.3 million in subordinate convertible debentures and exchangeable notes. This compares to $36.1 million in total debt outstanding as at June 30, 2007 and $40.3 million at March 31, 2007. Positive cash flow for the year was used to repay $1.8 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 Cash(2)
Based on increased cash flow and continued improvement in year-over-year performance, the Trustees of the Fund approved the reinstatement of distributions in the fourth quarter of 2007. OnNovember 13, 2007, the Fund declared a distribution to its unitholders and BGHI declared a dividend to its Class A shareholders of $0.015 per Unit and/or Class A share, payable on December 21, 2007 to unitholders and BGHI shareholders of record on November 30, 2007.2007 Third Quarter Conference call & Web cast
Management of the Boyd Group Income Fund will host a conference call to discuss the Fund’s 2007 third quarter financial results on Wednesday, November 14, 2007 at10:00 a.m. ET. 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 Wednesday, November 21, 2007 at midnight by calling 1-877-289-8525 or 416-640-1917, reference number 21251357 followed by the number sign.
(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 September 30, 2007, which can be accessed via the SEDAR Web site (www.sedar.com).
To view Boyd Group Income Fund’s third quarter financial statements,
please click here: http://www.boydgroup.com/assets/docs/fs/2007-q3-report.pdfAbout 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 theUnited 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.
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.
For further information: Terry Smith, CEO, Tel: (204) 895-1244, firstname.lastname@example.org; Dan Dott, Vice President & CFO, Tel: (204) 895-1244, email@example.com; Bruce Wigle, Investor Relations, Tel: (416) 815-0700 or toll free 1-800-385-5451 (ext.228), firstname.lastname@example.org