Boyd Group Reports 41-Percent Growth in Quarterly Sales

Brock Bulbuck

Boyd Group Income Fund, parent company to U.S.-based Gerber Collision & Glass, Glass America, Hansen Collision and Glass among others, has reported a 41-percent increase in sales to $183.6 million for the first quarter, compared to sales of $130.6 million in the same quarter of the prior year. The glass business contributed incremental sales of $11.5 million, primarily attributable to the acquisition of Glass America, according to officials.

The glass side of the business generates its strongest sales during the spring and summer months, according to Brock Bulbuck, president and CEO.

Same-store sales for the overall business increased $9.3 million, or 8.8 percent, excluding foreign exchange, and increased $10.7 million due to the translation of same-store sales at higher U.S. dollar exchange rates, management reported.

Gross profit for the period was $85.7 million, or 46.7 percent of sales, compared to $58.8 million, or 45 percent of sales in the same period last year.

“Gross profit dollars increased as a result of higher sales compared to the prior period,” according to company documents filed with SEDAR, which is where Canadian organizations file securities-related information. “The gross margin percentage increased when compared with the prior period due to higher margins in the glass business and the impact of higher mix of these higher margin glass sales in relation to collision sales, as well as higher back-end paint discounts.”

For the overall company, sales in the U.S. came in at $163.1 million, an increase of $51.9 million, or 46.6 percent, compared to the same period last year.

“All of our stores located in the North and Atlantic region, as far South as North Carolina and Georgia, were affected by the severe weather and poor road conditions prevalent in the first three months of 2014, resulting in double-digit sales growth for many of our Northern markets,” Bulbuck said in a company conference call.

Canadian sales were $20.5 million, up $1.1 million over the same time frame of 2013.

The company posted a net loss for the quarter of $1.7 million, compared to net earnings of $30,000 for the same quarter in 2013.

“The loss was attributable to fair value adjustments to financial instruments of $7.4 million as well as acquisition, transaction and process improvement costs and brand name amortization,” officials wrote in a company statement. “Excluding the impact of these adjustments, adjusted net earnings would have increased to $7.3 million, or $0.486 per unit. This compares to adjusted net earnings of $3.7 million, or $0.292 per unit for the same period in 2013.”

“We continue to model six to ten percent growth in single location additions,” Bulbuck said, noting that his company looks to add 16 to 26 new locations over the year.

“There remain many attractive single-store operations in North America and we will look to add those that will increase our scale and market share in select regions,” he said. “Although there is more competition for MSO acquisitions, we will maintain our discipline to only acquire those that will be accretive to the Fund. Our ability to acquire quality MSOs has again been demonstrated by our acquisition of the 25 Collision Revision locations just last month.

“Looking ahead, we have seen some of the positive impact of the severe winter weather continue into the second quarter, but we expect that its impact will continue to diminish as the second-quarter progresses. We therefore expect business conditions to return to more historical norms by the end of the second quarter,” Bulbuck said.

Here is an overview of the company’s acquisitions, openings and closings, based on the SEDAR filing:

—On January 31, 2014, the company completed the acquisition of Kustom Koachworks Inc., a two-location collision repair business in Phoenix, Ariz.;

—On February 5, 2014, as part of a new start-up, the company commenced operations in a new collision repair facility in Ellicott City, Md.;

—On April 2, 2014, as part of a new start-up, the company commenced operations in a new collision repair facility in Fayetteville, N.C.;

—On April 7, 2014, the company ceased operations in one of its collision repair facilities in Glenview, Ill.

—On April 14, 2014, the company signed a definitive agreement and concurrently closed the acquisition of Dora Holdings Inc. and Collision Revision 13081 Inc., which collectively owned and operated 25 collision repair centers in Illinois, Indiana and Florida under the trade name “Collision Revision.” Collision Revision generated sales of approximately $50 million U.S. for the trailing twelve months ended December 31, 2013;

—On April 30, 2014, the company ceased operations in its collision repair facilities in Rockdale and Spring Grove, Ill; and

—On May 1, 2014, the company completed the acquisition of Performance Restorations Inc., a single-location collision repair business in Mundelein, Ill.