March 23, 2012

Boyd Group Income Fund Reports Record Fourth Quarter and Full Year Results

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

- Appoints Tim O’Day to the Board of Trustees of the Boyd Group Income Fund -

Winnipeg, Manitoba — March 23, 2012 — Boyd Group Income Fund (TSX: BYD.UN) (“the Fund”, “the Boyd Group” or “Boyd”) today reported its financial results for the three-month and twelve-month periods ended December 31, 2011. The Fund’s complete fiscal 2011 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.

2011 Highlights
  • Record sales, Adjusted EBITDA1 and distributable cash2
  • Sales increased by 38.9% to $357.0 million from $257.0 million in 2010; True2Form Collision Repair Centers, Inc. (“True2Form”), Cars Collision Center of Colorado, LLC and Cars Collision Center, LLC, (collectively “Cars Collision”), and sixteen other new locations contributed $94.1 million of sales
  • Same-store sales increased by 6.0% (8.0%excluding the impact of Arizona hail in 2010)
  • Gross margin increased to $160.1 million or 44.9% compared with $116.4 million or 45.3% in 2010
  • Adjusted EBITDA1 totalled $24.4 million compared with $18.8 million in 2010
  • Adjusted distributable cash2 totalled $16.0 million, compared with $15.1 million in 2010
  • Payout ratio was 31.3% compared with 24.7% in 2010, due in part, to a higher level of distributions
  • Announced the acquisition of Master Collision Repair, Inc. (“Master”) which added eight locations in Florida. The acquisition was completed subsequent to the end of the year
“2011 was a good year overall, as we achieved record sales, Adjusted EBITDA, and distributable cash for the year,” said Brock Bulbuck, President and Chief Executive Officer of the Boyd Group. “The addition of Cars Collision to our operations had a strong positive impact on our results for the year, as both the performance and integration of this business continues to meet our expectations. We also saw meaningful positive same-store sales growth in 2011 despite the headwinds from persistent challenging market conditions as well as a difficult comparable period in 2010 given a significant hail storm experienced in the Arizona market late in the year. Miles driven continued its trend downwards this past year due, in part, to elevated levels in unemployment and gas prices. However, the merits of our business model and related strong industry position and geographical diversity have proven to counter this downside.”

“We continued to be careful and opportunistic in executing our acquisition and growth strategy for the year, making sure that the growth would add synergistic value to our business as a whole,” continued Mr. Bulbuck. “We added nine new collision repair centers in 2011, in-line with our stated goal of adding eight to 13 new locations per year as part of our unit growth strategy. Additionally, we also completed the large opportunistic and accretive Cars Collision acquisition. With the additional equity injection late in the year, our balance sheet continues to be strong and we will continue to look to leverage our scale to capitalize on attractive opportunities going forward. Our main objective, as a growth company offering an attractive payout, is to maintain a conservative distribution policy that will provide us with the financial flexibility necessary to support our growth initiatives and gradually increase distributions over time.”

The Fund also announced that effective March 22, 2012, Mr. Tim O’Day, has been appointed to the Board of Trustees of the Fund. It is also the intention of the Boyd Group to add one to two additional independent Trustees to the Board in 2012. Mr. O’Day joined Gerber Collision & Glass in February 1998. With Boyd Group’s acquisition of Gerber in 2004, he was appointed Chief Operating Officer for Boyd’s U.S Operations. In 2008, he was appointed President and Chief Operating Officer for U.S. Operations. Earlier in his career, he was with Midas International, where he was elevated to Vice President—Western Division, responsible for a territory that encompassed 500 Midas locations. Mr. O’Day is also a Certified Public Accountant.


Financial Results

For the three-months ended December 31, 2011


Sales for the three-months ended December 31, 2011 increased by 24.4% to $100.5 million, compared with sales of $80.8 million for the same period last year. The increase consisted of $20.4 million in sales generated by Cars Collision and nine other new collision repair locations and $0.6 million due to the effect of the foreign currency translation rate on sales generated from Boyd Group’s U.S. operations, offset by $0.9 million from the closure of two underperforming facilities and a $0.4 million decrease in same-store sales. After adjusting for the impact of foreign currency, overall same-store sales decreased 0.5% when compared to the prior period due to a significant hail storm that was experienced in the Arizona market in 2010 which we estimate increased sales by $3.9 million. After removing the impact of this unusual hail in 2010, same-store sales increased $3.5 million or 4.7%.

Sales in Canada were $19.1 million, an increase of $0.3 million, or 1.6%, over the same period in 2010. The increase came primarily from $1.0 million in sales generated from three new locations, offset by the closure of an underperforming facility which reduced sales by $0.6 million. Same store sales in Canada showed a modest decline of $0.1 million or 0.5% for the quarter.

Sales in the U.S. totalled $81.4 million, an increase of $19.4 million, or 31.3%, over the same period in 2010. Sales in the U.S. included $17.2 million from Cars Collision as well as $2.2 million from six additional new locations. Translation of U.S. revenues at a higher U.S. dollar exchange rate relative to the Canadian dollar resulted in an increase of $0.6 million. The increase in U.S. sales was offset by a $0.3 million decrease in same-store sales and $0.3 million from the closure of an underperforming facility. After adjusting for the impact of foreign currency, same store sales decreased 0.5% compared to 2010 due to the significant hail storm experienced in Arizona. After removing this impact of hail in 2010, same-store sales increased by $3.6 million, or 6.3% compared with the same period in 2010.

Earnings before interest, income taxes, depreciation and amortization, adjusted for the fair value adjustments related to the exchangeable shares, unit options, a non-controlling interest put option liability as well as acquisition, transaction and settlement costs (“Adjusted EBITDA”1) totalled $7.6 million, or 7.6% of sales, compared with Adjusted EBITDA of $7.0 million, or 8.7% of sales, for the same period in 2010. The 8.6% increase in Adjusted EBITDA was the result of the acquisition of Cars Collision and other new location growth. This increase was offset by the impact of the significant hailstorm in the Arizona market, which we estimate increased EBITDA between $1.1 million and $1.3 million in the comparable period in 2010.

During the fourth quarter, the Fund announced the retirement of its Executive Chairman. The Fund is obligated to continue with the payment of the Executive Chairman’s compensation until January 31, 2014. A full provision for these continuing payments has been expensed and accrued in the fourth quarter as a $3.3 million settlement cost.

In the fourth quarter of 2011, the Fund recorded income tax expense in the amount of $0.7 million, compared to a $6.7 million recovery in 2010.

Net loss was $2.1 million, or $0.188 per diluted unit, compared to net earnings of $7.9 million, or $0.800 per diluted unit for the same period last year. Net loss was impacted by recording fair value adjustments for exchangeable shares in the amount of $1.0 million and unit options in the amount of $0.6 million, the recording of non-controlling interest put options liability related to our glass operations of $0.2 million as well as the recording of acquisition and transaction costs of $0.3 million, settlement costs of $3.3 million, the accelerated amortization of the True2Form and Cars of $0.5 million and income tax expense of $0.7 million. Additionally, net earnings for the comparable period in 2010 were primarily impacted by the recognition of $6.7 million of future income tax benefits as well as from the $1.3 million write off of goodwill. Excluding the impact of these adjustments, net earnings would have increased to $4.5 million, compared with adjusted earnings of $4.9 million for the same period in 2010. This decrease is primarily due to increased depreciation and amortization expense related to new acquisitions and start ups as well as the impact of the significant hail storm experienced in the Arizona market in the same period last year.

During the fourth quarter, the Fund generated adjusted distributable cash of $4.7 million, which includes adjustments for the collection of additional prepaid rebates, proceeds on the sale of equipment, payments related to acquisition search and transaction costs and capital lease repayments. The Fund paid distributions and dividends of $1.4 million, representing a payout ratio of 29.6% for the quarter.

For the twelve-months ended December 31, 2011

Sales for the year ended December 31, 2011 increased by 38.9% to $357.0 million, compared with sales of $257.0 million in the prior year. The increase consisted of $94.1 million in sales generated from True2Form, Cars Collision, and sixteen other new collision repair locations as well as $13.0 million in same-store sales growth, offset by $5.6 million due to a lower U.S. dollar translation rate on sales generated from Boyd Group’s U.S. operations and another $1.5 million from the closure of two underperforming facilities Excluding the effect of foreign currency translation, same-store sales grew by 6.0% (8.0% after removing the impact of Arizona hail in 2010).

Sales in Canada were $75.4 million, an increase of $3.3 million, or 4.6%, over the prior year. Sales growth in Canada consisted of $2.9 million or 4.1% in same-store sales and $1.1 million generated from three new locations, offset by a decrease of $0.7 million from a location closure.

Sales in the U.S. totalled $281.6 million, an increase of $96.7 million, or 52.2%, over the prior year. Sales in the U.S. included sales of $81.1 million from 37 True2Form locations, $34.0 million from 28 Cars Collision locations, as well as $11.6 million from new locations in Cartersville, Georgia; Owasso, Oklahoma; Evanston, Illinois; Las Vegas, Nevada; two new locations in the Atlanta, Georgia area; Bellingham, Washington; Yuma, Arizona; Savannah, Georgia; McDonough, Georgia; Everett, Washington; Seattle, Washington; and Grove City, Ohio. Translation of U.S. revenues at a lower U.S. dollar exchange rate relative to the Canadian dollar resulted in a decrease of $5.6 million. Excluding the impact of currency translation, same-store sales in the U.S. increased by $10.1 million, or 6.9%, over the same period in 2010 (9.9% after removing the impact of Arizona hail in 2010).

Adjusted EBITDA1 totalled $24.4 million, or 6.8% of sales, compared with Adjusted EBITDA of $18.8 million, or 7.3% of sales, during the prior year. The 29.8% increase in Adjusted EBITDA was the result of improvements in same-store sales which contributed $3.2 million, combined with $1.4 million of incremental EBITDA contribution from the acquisition of True2Form, $2.8 million of EBITDA contribution from the acquisition of Cars Collision, and $0.4 million contribution from other new locations. Adjusted EBITDA was negatively impacted by changes in the U.S. dollar and foreign exchange losses in the amount of $0.9 million. The overall increase in Adjusted EBITDA was offset by the impact of a significant hailstorm experienced in the Arizona market, which we estimate increased EBITDA between $1.1 million and $1.3 million in the comparable period in 2010.

For the year ended December 31, 2011, the Fund recorded income tax expense in the amount of $2.5 million, compared to a recovery of $6.6 million in 2010.

Net earnings were $2.9 million, or $0.262 per diluted unit, compared with net earnings of $13.5 million, or $1.249 per diluted unit, for the same period last year. The decrease in net earnings was the result of recording fair value adjustments for exchangeable shares in the amount of $1.9 million, unit options in the amount of $0.9 million as well as a non-controlling interest put option cost of $0.2 million, the recording of acquisition and transaction costs of $1.9 million, settlement costs of $3.3 million, the accelerated amortization of True2Form and Cars brand of $0.5 million and income tax expense of $2.5 million. Excluding the impact of these adjustments, net earnings would have increased to $14.2 million, or $1.256 per unit, compared to adjusted earnings of $11.9 million, or $1.104 per unit in the prior year if the same items were adjusted as well as including an additional $1.3 million write down of goodwill. This increase is the result of the contribution of new acquisitions and new location growth as well as increases in same-store sales.

During 2011 the Fund generated adjusted distributable cash of $16.0 million. The Fund paid distributions and dividends of $5.0 million, representing a payout ratio of 31.3% for the year.

As at December 31, 2011, the Fund had total debt outstanding, net of cash, of $16.9 million, compared with $19.2 million at September 30, 2011, $31.2 million at June 30, 2011, $14.4 million at March 31, 2011 and $16.0 million at December 31, 2010. The Fund has a cash position, net of bank indebtedness, of 18.4 million, compared with a cash position of $17.0 million at September 30, 2011 and $9.4 million a year ago. The decrease in debt and increase in cash in the fourth quarter was due to solid operations during the quarter. The increase in debt during the year related to our new store growth including Cars Collision and the increase in our cash position during 2011 related to a bought deal public offering of trust units in September.

Outlook

“We achieved many important milestones in 2011 and plan to use those experiences to fuel our continued progress in 2012,” said Mr. Bulbuck. “We clearly demonstrated our further commitment to our growth strategy in 2011 by completing the acquisition of Cars, which added 28 new locations across three states, and announcing our intention to acquire Master, which added eight new locations in Florida with the close of the transaction coming subsequent to year-end. Along with our focus on growth through the acquisition of other multi-location businesses, our goal in 2011 was to also add eight to 13 new single collision repair locations. In 2012, and for the foreseeable future, our goal for the addition of new single repair locations will be in the range of 6-10% new unit growth annually. The nine new locations that we added in 2011 represented 7% growth in this respect and the 6-10% growth target will translate into 11-18 new single locations for 2012. Additionally, an important initiative we have undertaken for 2012 is the standardization of our management information systems. The conversion of a collection of systems being utilized today into a common management platform will better position our business for the integration of future acquisitions as well as help to increase our operational and administrative efficiency. “

“The extremely warm winter weather conditions seen in late 2011, which has continued into 2012, is in contrast to the strong winter that helped drive our results last year,” continued Mr. Bulbuck. “This undoubtedly will have some impact on our first and perhaps second quarter results for 2012. Notwithstanding the mild winter, the strength in our core business is very encouraging as we continue to increase our market share and expand throughout the U.S. with key strategic acquisitions and single location unit growth. Our focus for 2012 is on growing our revenues, both organically and through new locations and acquisitions, while working to enhance margins by increasing efficiency throughout our operations. We believe we have the management team, systems, experience and the market opportunity, along with a strong balance sheet, to continue to successfully grow our business. In this respect, our long-term objective remains to increase distributions over time, while maintaining the financial flexibility to support our stated growth strategy.”

2011 Fourth Quarter and Year-End Results Conference Call & Webcast

Management will hold a conference call on Friday, March 23, 2012, at 10:00 a.m. (ET) to review the Fund’s 2011 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 30, 2012, at midnight by calling 1-855-859-2056 or 416-849-0833, reference number 59499855.

(¹)(²) EBITDA, Adjusted EBITDA, distributable cash and adjusted distributable cash 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, 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 IFRS 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 non-GAAP measures are calculated, please refer to the Fund’s MD&A filing for the year ended December 31, 2011, 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, as well as in 14 U.S. states under the trade names Gerber Collision & Glass, True2Form, and Master Collision Repair. 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 atwww.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.

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 / 1-800-385-5451 (ext. 242)
sdiaz@equicomgroup.com

Dan Dott
VP & CFO
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; 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; 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; 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
The Boyd Group Inc.

3570 Portage Avenue
Winnipeg, Manitoba, R3K 0Z8
Email: info@boydgroup.com
Tel: 204-895-1244
Fax: 204-895-1283