Boyd Group Services Inc · TSX:BYD
Boyd Group Services — Boyd Group Income Fund — Investor Presentation (January 2014)
38 slides from Boyd Group Services's investor presentation, January 2014
Slide 1: Investor Presentation January 2014
Investor Presentation January 2014
Slide 2: Forward-Looking Statements
Forward-Looking Statements This presentation 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 o
Slide 3: Capital Markets Profile
Capital Markets Profile Stock Symbol: TSX: BYD.UN Units and Shares Outstanding: 15.3 million Price (January 17, 2014): $32.52 52-Week Low / High: $16.63 / $33.98 Market Capitalization: $497.6 million Annualized Distribution (per unit): $0.48 Current Yield: 1.5% Payout Ratio (TTM*): 26.7% * Trailing
Slide 4: Company Overview
Company Overview • Own and operate collision repair centres in the U.S. and Canada • Largest operator of collision repair shops in North America by number of locations • Highly fragmented $33.5 billion market • Collision repair companies that derive a high percentage of their revenue from insurance
Slide 5: North American Collision Repair Footprint
North American Collision Repair Footprint Canada • Manitoba (14) 39 centres • Alberta (12) • B.C. (10) • Saskatchewan (2) • Ontario (1) U.S. • Florida (38) • Illinois (35) 220 centres • Michigan (24) • North Carolina (24) • Arizona (15) • Georgia (15) • Washington (15) • Colorado (13) • Indiana (10)
Slide 6: North American Glass Footprint
North American Glass Footprint U.S. • Alabama • Arizona • Colorado • Connecticut • District of Columbia • Florida • Georgia • Illinois • Indiana • Kansas • Kentucky • Massachusetts • Maryland • Michigan • Missouri • Nevada • New Hampshire • New York • North Carolina • Ohio • Oklahoma • Pennsylvania
Slide 7: U.S. Operations
U.S. Operations • 220 collision locations across fifteen U.S. states • Operate full-service repair centres offering collision repair, glass repair and replacement services • Strong relationships with insurance carriers • Advanced management system technology • Single brand strategy 7
Slide 8: Canadian Operations
Canadian Operations • 39 Company-owned/operated centres; 8 franchise locations • Operate full-service repair centres offering collision repair, glass repair and replacement • Customer focused: Modern retail locations ISO 9002 certified Standard operating procedures MIS Systems 8
Slide 9: Market Overview & Business Strategy
Market Overview & Business Strategy
Slide 10: Large, Fragmented Market
Large, Fragmented Market • Revenue for North American collision repair industry is estimated to be approximately $33.5 billion annually (US$30.7B, CDA $2.8B) • Car dealerships are estimated to have approximately 22.5% of the total US market • Multi-shop operators and dealerships with revenues > $20
Slide 11: Importance of Direct Repair Programs
Importance of Direct Repair Programs • Direct Repair Programs (DRPs) are established between insurance companies and collision repair shops to better manage auto repair claims and the level of customer satisfaction • Auto insurers utilize DRPs for a growing percentage of collision repair claims volu
Slide 12: Business Strategy
Business Strategy Same-store sales growth and optimize Expense returns from existing management operations Operational New location and excellence acquisition growth 12
Slide 13: Growth Strategy
Growth Strategy • 6-10% growth in new start-ups or single-location acquisitions • Large, accretive acquisitions • Same-store sales growth 13
Slide 14: New Start-Ups
New Start-Ups Growth through Greenfield & Brownfield development of collision facilities • Low-cost growth • No dilution • High ROI Typical New Start-Up Funding Model: Funded By: Revolving credit facility US$300,000 Seller Financing/Capital Leases US$200,000 Total Capital Investment US$500,000 14
Slide 15: Evolving Collision Repair Market
Evolving Collision Repair Market U.S. Collision Repair Market • Estimated market size in 2012 of 35,200 total collision repair locations Long-Term Decline of Independent and Dealership Repair Facilities • Total number of independent and dealership collision repair locations has declined by 22% from
Slide 16: True2Form Acquisition – August 2010
True2Form Acquisition – August 2010 Strategic Benefits • Added 37 locations in four new eastern U.S. states • Complements existing Boyd U.S. footprint • Strong management, operational expertise Financial Benefits • Immediately accretive to earnings and cash flow • US$16.8-mm transaction (net purchas
Slide 17: Cars Collision Acquisition – June 2011
Cars Collision Acquisition – June 2011 Strategic Benefits • Added 28 locations • Increased locations to 45 from 23 in the Chicagoland market (IL and northern IN) • New Colorado market with 6 locations • Similar business model and long-term vision as Boyd Group Financial Benefits • Immediately accret
Slide 18: Master Collision Acquisition – January 2012
Master Collision Acquisition – January 2012 Strategic Benefits • First entry into the Florida market with the addition of 8 new locations • Complementary business model providing a similar fully-integrated service offering Financial Benefits • Immediately accretive to earnings and cash flow • US$11.
Slide 19: Pearl Auto Body Acquisition – July 2012
Pearl Auto Body Acquisition – July 2012 Strategic Benefits • Added 6 locations in Denver, Colorado • Doubled number of locations in the market to 12 • Similar business model and customer care as Boyd Group Financial Benefits • Immediately accretive to earnings and cash flow • US$4.1-mm transaction (
Slide 20: The Recovery Room Acquisition – November 2012
The Recovery Room Acquisition – November 2012 Strategic Benefits • Added 11 locations in Orlando, Florida • Similar business model and customer care as Boyd Group Financial Benefits • Expected to be accretive to earnings and cash flow in first year of operations • US$7.3-mm transaction (net purchase
Slide 21: Autocrafters Acquisition – November 2012
Autocrafters Acquisition – November 2012 Strategic Benefits • Added another 14 Florida locations in Jacksonville, Tallahassee, and Gainesville • Increased total Florida locations to 37 (from none one year earlier) • Similar business model and customer care as Boyd Group Financial Benefits • Immediat
Slide 22: Glass America Inc. Acquisition – May 2013
Glass America Inc. Acquisition – May 2013 Strategic Benefits •Added 61 retail auto glass locations in 23 U.S. states •Complimentary extension of collision repair business •Better positions glass business for growth Financial Benefits •Immediately accretive to earnings and cash flow •Significant syne
Slide 23: Hansen Collision and Glass Acquisition – September 2013
Hansen Collision and Glass Acquisition – September 2013 Strategic Benefits • Added 24 locations in Michigan and 1 location in Indiana • Entered Michigan collision repair market Financial Benefits • Immediately accretive to earnings and cash flow • US$23.6-mm transaction total purchase price 23
Slide 24: Financial Review
stud J FUND Financial Review
Slide 25: Revenue Growth
Revenue Growth (C$ millions) 25
Slide 26: Same-Store Sales Growth
SSSG - Optimizing Returns from Existing Ops Same-store sales increases in 26 of 35 most recent quarters Same-Store Sales Growth* *Total Company, excluding FX. **Adjusting for the positive impact of hail in Q4-10, Q4-11 SSSG was 4.7%. 26
Slide 27: Operating Expenses as % of Sales
Expense Management Well managed operating expenses as a % of sales Operating Expenses as % of Sales 27
Slide 28: Financial Summary
Financial Summary Three-months ended Nine-months ended (C$ millions, except per unit and percent amounts) Sept. 30, Sept. 30, Sept. 30, Sept. 30, 2013 2012 2013 2012 Sales $149.6 $109.1 $417.1 $319.4 Gross Margin $69.6 $49.4 $190.6 $144.8 Adjusted EBITDA* $10.6 $7.5 $28.0 $21.2 Adjusted EBITDA Margi
Slide 29: Balance Sheet
Balance Sheet (in C$ millions) Sept 30, 2013 Dec 31, 2012 Cash $25.6 $39.0 Long-Term Debt $55.9 $49.5 Convertible Debentures $30.8 $30.3 Obligations Under Finance Leases $9.3 $6.2 Net Debt (total debt, including current portion and bank indebtedness, $70.4 $47.0 net of cash) Current Ratio 1.12 1.41
Slide 30: Distributions
Distributions Annualized Distribution per Unit (C$) Annualized distributions have increased by 167% since December 2007 30
Slide 31: Convertible Debentures
Convertible Debentures • Announced a ‘bought deal’ $30-million 5.75% convertible unsecured subordinated debenture offering on Nov. 29, 2012 • Further announced an additional $4.2 million of convertible debentures to be issued pursuant to over-allotment option • Due Dec. 31, 2017 with a conversion pr
Slide 32: Equity Offering
Equity Offering • Completed a ‘bought deal’ equity offering on October 22, 2013 • Issued 2,000,000 Units from treasury at a price of C$27.60 per Unit for net proceeds of $52.4 million • Upon closing Underwriters exercised over-allotment option purchasing an additional 300,000 Units and increasing ne
Slide 33: Interim Paint Arrangement
Interim Paint Arrangement • Amended agreement with paint supplier moving from a pre-purchase rebate system to a higher post-purchase discount system • Effective October 1, 2013 to January 31, 2014 while Boyd and its paint supplier negotiate a final agreement and Boyd validates the market competitive
Slide 34: $100 Million Credit Facility
$100 Million Credit Facility • Announced a new $100 million revolving facility on December 20, 2013 • 5 year committed facility which can increase to $135 million with accordion • Combined with strong balance sheet, provides financial flexibility (funding) to further execute growth strategy for a nu
Slide 35: Tax Efficient Trust Structure
Tax Efficient Trust Structure Boyd Group Income Fund The Boyd Group Inc. U.S. to fund distributions Canada Canadian Operations & Operating Entities U.S. The Boyd Group (U.S.) Inc. U.S. Operations & Operating Entities 35
Slide 36: Five-Year Outlook
Five-Year Outlook • 6-10% growth in new collision repair locations per year • Increase North American presence through: Targeted start-ups and/or acquisitions in existing and adjacent markets • Drive same-store sales growth through enhanced capacity utilization, development of DRP arrangements and
Slide 37: Experienced & Committed Management Team
Experienced & Committed Management Team Brock Bulbuck President & CEO Dan Dott Chief Financial Officer Tim O’Day President & Chief Operating Officer (U.S. Operations) Eric Danberg President, Canadian Operations 37
Slide 38: Summary
Summary Balance sheet strength Stability Insurer preference for professional, multi-unit operators + Recession resilient $33.5-billion fragmented industry Growth High ROI growth strategy + Cash Distributions Conservative payout ratio = A Strong Foundation for Future Growth 38
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