Release Date: August 08, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Boyd Group Services Inc (BYDGF, Financial) recorded sales of $779.2 million in Q2 2024, a 3.4% increase compared to the same period in 2023.
- The company gained market share with a same-store sales decline of only 3.2%, compared to a 7% decline in repairable claims industry-wide.
- Gross margin improved sequentially from 44.8% in Q1 to 45.6% in Q2 2024.
- Boyd Group Services Inc (BYDGF) added 109 new locations, contributing $50.9 million in incremental sales.
- The company remains confident in its long-term growth strategy, aiming to double its business size from 2021 to 2025 against 2019 sales.
Negative Points
- Adjusted EBITDA decreased by 6.1% to $89.6 million in Q2 2024 compared to the same period in 2023.
- Net earnings for Q2 2024 were $10.8 million, a significant drop from $26.3 million in Q2 2023.
- Operating expenses increased to $265.9 million, representing 34.1% of sales, up from 32.8% in the same period of 2023.
- The company experienced a decline in same-store sales, excluding foreign exchange, by 0.7% for the first half of 2024.
- Increased finance costs and depreciation related to new location growth negatively impacted net earnings.
Q & A Highlights
Q: With the current trend of people not bringing their cars for repair, do you expect this behavior to normalize as the macroeconomic environment improves?
A: Timothy O'Day, President and CEO, explained that the reluctance to file claims is likely tied to economic concerns and rising insurance premiums. Historically, such behavior tends to revert over time as economic conditions stabilize.
Q: How are insurance partners reacting to the current dynamics of lower volumes and costs?
A: Timothy O'Day noted that while profitability swings have been significant for insurers, Boyd Group continues to pursue fair pricing aggressively, regardless of the current volume trends.
Q: Regarding the internalization of scanning and calibration services, is there a plan to accelerate this process?
A: Timothy O'Day stated that Boyd Group aims to service the majority of this business within 2 to 3 years and is interested in accelerating this growth while managing it properly.
Q: How is Boyd Group approaching the technician development program amid current economic conditions?
A: Brian Kaner, Executive Vice President and COO, mentioned that while they have pulled back on the Level 1 portion due to costs, they remain committed to the program for long-term technician development.
Q: Can you provide insights into the acquisition pace and expectations for the rest of the year?
A: Timothy O'Day indicated that acquisitions are inherently lumpy, but he expects stronger activity in the latter half of the year, supported by a robust pipeline of greenfield and brownfield developments.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
