Boyd Group Services (BYD) Q3 2024 earnings summary

Executive summary

• Q3 2024 sales rose 2% year-over-year to $752.3 million, driven by new locations, but same-store sales declined 3.5% amid soft market conditions and lower claims volumes, outperforming the industry’s 12.6% decrease in repairable claims.

• Net earnings dropped to $2.9 million from $20.5 million year-over-year; adjusted net earnings fell to $3.2 million from $21.5 million.

• Gross margin improved slightly to 45.7% from 45.2% year-over-year, aided by internalization of scanning and calibration services.

• Management remains committed to long-term growth, focusing on organic expansion, strategic acquisitions, and operational excellence, though industry softness may delay the goal of doubling business size by 2025.

• Boyd Group operates over 970 locations in North America, is a top-three U.S. auto glass operator, and maintains strong insurer relationships in a fragmented, recession-resilient market.

Financial highlights

• Q3 2024 sales: $752.3 million (+2% YoY); adjusted EBITDA: $80.1 million (-14.7% YoY, 10.7% margin); net earnings: $2.9 million (vs. $20.5 million YoY); adjusted net earnings: $3.2 million ($0.15/share) vs. $21.5 million ($1/share) YoY.

• Gross margin for Q3: 45.7% (vs. 45.2% YoY); operating expenses: $263.4 million (35% of sales) vs. $239.9 million (32.5% of sales) YoY.

• For the nine months ended September 30, 2024: sales $2.3 billion (+5.1% YoY), adjusted EBITDA $251.4 million (vs. $274.0 million YoY), net income $22.1 million (vs. $67.6 million YoY).

• Five-year revenue CAGR is 14.4%, with 2023 revenue at $2,946.0 million and Adjusted EBITDA at $368.2 million.

• Five-year total shareholder return was 145.93%, significantly outperforming the S&P/TSX Composite's 46.33%.

Outlook and guidance

• Q4 same-store sales trends are in line with Q3, with continued industry softness and modest hurricane impact.

• Management expects margin improvement through cost actions and expense leverage, targeting a return to a 14% EBITDA margin over the next 12–18 months.

• Growth through new locations and acquisitions will continue, but at a slower pace due to market conditions and negative claims environment.

• Long-term goal of doubling business size by 2025 may be slightly delayed but remains a focus.

• Focus remains on improving capture rates, leveraging insurance relationships, and expanding fleet business.