BOYD GROUP SERVICES INC.
2023 Annual Report
BOYD GROUP SERVICES INC.
2023 Annual Report
_____________________________________________________________________
Table of Contents
3
Report to Shareholders……..…………………………………………….……..….
Message from the Independent Board Chair………………..……………….…. 5
6-45
Management’s Discussion & Analysis……………………………..………...…
46-49
Certification of Annual Filings …………..……………………………..…………
Consolidated Financial Statements
51
Management’s Responsibility for Financial Reporting…………...……
Independent Auditor’s Report………………………………………….…
52
Consolidated Statements of Financial Position………………………... 56
57
Consolidated Statements of Changes in Equity….………...………….
58
Consolidated Statements of Earnings……….………………………….
58
Consolidated Statements of Comprehensive Earnings………....…….
Consolidated Statements of Cash Flows…………………………….…
59
Notes to Consolidated Financial Statements………..……………….… 60-95
Board of Directors…………………………………………………………………. 96-98
99
Corporate Directory……………………………………………………….……….
100
Shareholder Information……………………………………………………………..
BOYD GROUP SERVICES INC.
REPORT TO SHAREHOLDERS
_____________________________________________________________________________________________
To our Shareholders,
In 2023, Boyd was able to achieve record sales levels and meaningful improvement in leverage and profitability
when compared to the prior year. We are pleased with the progress we made in 2023 and, in particular, the level of
same-store sales growth and the improved Adjusted EBITDA1 delivered consistently throughout the year, alongside
the addition of 106 locations. We remain focused on our key challenges and opportunities, including building
capacity, negotiating sufficient price increases to recover lost labor margin from wage pressure, growing our
calibration business and continuing to add locations.
We achieved a high level of growth in sales in 2023, with total sales of $2.9 billion, representing a 21.1% increase
when compared to the $2.4 billion achieved in 2022. Same-store sales1 increased 15.8% and contributions from 186
new locations that had not been in operation for the full comparative period added $146.6 million of incremental
sales. Same-store sales growth was positively impacted by pricing increases and high levels of demand for services,
as well as an increase in production capacity related to technician hiring, increased productivity and growth in the
Technician Development Program; however, ongoing staffing constraints continued to impact sales levels that could
be achieved. Sales also increased based on higher repair costs due to increasing vehicle complexity, higher part
content and cost, increased scanning and calibration services, as well as general market inflation.
Adjusted EBITDA1 for 2023 was $368.2 million, or 12.5% of sales, compared with $273.5 million, or 11.2% of
sales in 2022. The increase was primarily the result of growth in sales and improvement in gross margin
percentage, which also provided improved leveraging of certain operating costs.
Boyd posted net earnings of $86.7 million in 2023, or 2.9% of sales, compared to $41.0 million, or 1.7% of sales in
2022 and earnings per share of $4.04 per share for the year ended December 31, 2023 compared to $1.91 for the
same period of 2022. Impacting net earnings were fair value adjustments to financial instruments, as well as
acquisition and transaction costs (net of tax). After adjusting for these items, Adjusted net earnings1 for 2023 was
$89.7 million or 3.0% of sales. This compares to Adjusted net earnings of $42.4 million or 1.7% of sales in 2022.
Adjusted net earnings for the year ended December 31, 2023 was $4.18 per share, compared to $1.97 per share in
2022. Adjusted net earnings for the period was positively impacted by increased sales, higher gross margin
percentage and improved leverage of certain operating expenses. Certain costs, such as depreciation and
amortization, are not variable and same-store sales increases resulted in a decrease in depreciation and amortization
expense as a percentage of sales during 2023. Finance costs increased as a result of increased borrowings during
2023 fiscal.
With respect to the balance sheet, at December 31, 2023, BGSI held total debt, net of cash, of $1,114.5 million,
compared to $963.0 million at December 31, 2022. Total debt, net of cash, includes lease liabilities of $715.3
million at December 31, 2023, compared to $617.9 million at December 31, 2021. Debt, net of cash, increased when
1 Adjusted EBITDA (earnings before interest, income taxes, depreciation and amortization, adjusted for the fair value adjustments related to
contingent consideration, as well as acquisition and transaction costs), adjusted net earnings, adjusted net earnings per share and same-store
sales are non-GAAP financial measures and ratios and are not recognized measures under International Financial Reporting Standards (“IFRS”).
Management believes that in addition to net earnings and cash flows, the supplemental measures of adjusted net earnings 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. Management believes that, in addition to sales, the
supplemental measure of same-store sales is useful as it provides investors with an indication of the increase in sales without accounting for
location growth and the impact of fluctuations in exchange rates during the period. Investors should be cautioned, however, that Adjusted
EBITDA, adjusted net earnings and adjusted net earnings per share should not be construed as an alternative to net earnings determined in
accordance with IFRS as an indicator of Boyd's performance. Investors should also be cautioned that same-store sales should not be construed as
an alternative to sales in accordance with IFRS as an indicator of Boyd’s performance. Boyd's method of calculating these measures 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
Boyd’s non-GAAP financial measures are calculated, please refer to the section titled “Non-GAAP Financial Measures and Ratios” in Boyd’s
MD&A filing (dated March 20, 2024) for the period ended December 31, 2023, starting on page 6 of this Annual Report. A copy of Boyd’s MD&A
for the period ended December 31, 2023 can be accessed via the SEDAR Web site (www.sedarplus.com).
3
compared to the prior year primarily as a result of an increased acquisition activity and increased capital
expenditures, including start-up location growth.
Based on Boyd’s continued growth, the strength of and confidence in the business, Boyd announced a Canadian
dollar dividend increase of 2.0% to 60.0 cents per share annualized, up from 58.8 cents per share.
In November of 2020, we announced our five year growth strategy, in which Boyd intends to again double the size
of the business over the five year period from 2021 to 2025, based on 2019 constant currency revenues, implying a
compound annual growth rate of 15 percent. Given the high level of location growth in 2021, the strong same-store
sales growth during 2022 and the combination of same-store sales growth and location growth in 2023, we are well
on the way to achieving this goal. We remain confident in our business model and its ability to increase market
share by expanding Boyd’s presence in North America through new location and organic growth from Boyd’s
existing operations.
On behalf of myself, the executive team and our Board of Directors, I would like to thank all of our Boyd Group
employees for their hard work and dedication, which allowed Boyd to successfully navigate through the impacts of
the dynamic economic environment. And on behalf of the Directors of Boyd Group Services Inc. and Boyd Group
employees, thank you for your continued support.
Sincerely,
(signed)
Timothy O’Day
President & Chief Executive Officer
4
BOYD GROUP SERVICES INC.
MESSAGE FROM THE INDEPENDENT BOARD CHAIR
______________________________________________________________________________
To our Shareholders,
Boyd’s strong and dedicated management team delivered impressive 2023 results. Boyd posted record high sales,
profitability and unit growth: sales increased 21% to $2.9 billion and Adjusted EBITDA1 increased by 35% to $368
million. The Board is incredibly proud of the commitment and drive demonstrated by the Boyd team in delivering
these results.
Demand continued to outstrip production capacity in 2023 and although further improvements are both required and
expected, Boyd’s workforce and productivity initiatives are continuing to narrow the gap. These initiatives
combined with customer price increases resulted in our Adjusted EBITDA margin increasing 130 basis points to
12.5% of sales.
We remain confident in meeting and exceeding our plan to double the size of the business on a constant currency
basis over the five-year period ending in 2025 and beyond that to continue to increase market share through a
combination of new locations and organic growth.
In July of 2023, Jeff Murray was appointed Chief Financial Officer of Boyd after serving as Interim Chief Financial
Officer for the first half of the year and having been with Boyd since 2004. Jeff’s significant knowledge of the
business along with his strong background in accounting and finance will support the continued execution of our
priorities. We look forward to continuing to work with Jeff over the coming years.
The Board was pleased to welcome Christine Feuell to the Board at the most recent Annual General Meeting in May
of 2023. Christine is the CEO of Chrysler Brand of Stellantis, and she has brought further strength and industry
knowledge to our Board. We look forward to Christine’s valuable contribution to our Board.
On behalf of the Board, I would like to thank the management team and all employees for their continued
commitment and hard work, and our shareholders for their continued support.
Sincerely,
(signed)
David G. Brown
Independent Chair
1 Adjusted EBITDA (earnings before interest, income taxes, depreciation and amortization, adjusted for the fair value adjustments related to
contingent consideration, as well as acquisition and transaction costs), adjusted net earnings, adjusted net earnings per share and same-store
sales are non-GAAP financial measures and ratios and are not recognized measures under International Financial Reporting Standards (“IFRS”).
Management believes that in addition to net earnings and cash flows, the supplemental measures of adjusted net earnings 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. Management believes that, in addition to sales, the
supplemental measure of same-store sales is useful as it provides investors with an indication of the increase in sales without accounting for
location growth and the impact of fluctuations in exchange rates during the period. Investors should be cautioned, however, that Adjusted
EBITDA, adjusted net earnings and adjusted net earnings per share should not be construed as an alternative to net earnings determined in
accordance with IFRS as an indicator of Boyd's performance. Investors should also be cautioned that same-store sales should not be construed as
an alternative to sales in accordance with IFRS as an indicator of Boyd’s performance. Boyd's method of calculating these measures 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
Boyd’s non-GAAP financial measures are calculated, please refer to the section titled “Non-GAAP Financial Measures and Ratios” in Boyd’s
MD&A filing (dated March 20, 2024) for the period ended December 31, 2023, starting on page 6 of this Annual Report. A copy of Boyd’s MD&A
for the period ended December 31, 2023 can be accessed via the SEDAR Web site (www.sedarplus.com).
5
Management’s Discussion & Analysis
OVERVIEW
Boyd Group Services Inc. (“BGSI”), through its operating company, The Boyd Group Inc. and its subsidiaries (“Boyd” or the
“Company”), is one of the largest operators of non-franchised collision repair centers in North America in terms of number of
locations and sales. The Company currently operates locations in Canada under the trade name Boyd Autobody & Glass and
Assured Automotive, as well as in the U.S. under the trade name Gerber Collision & Glass. The Company is also a major
retail auto glass operator in the U.S., under the trade names Gerber Collision & Glass, Glass America, Auto Glass Service,
Auto Glass Authority and Autoglassonly.com. In addition, the Company operates a third party administrator, Gerber National
Claims Services (“GNCS”), that offers glass, emergency roadside and first notice of loss services. The following is a
geographic breakdown of locations by trade name and location as at March 19, 2024.
Alberta
British Columbia
Manitoba
Saskatchewan
Ontario
942 locations
47
locations
16
14
13
4
82
locations
Florida
Michigan
Illinois
California
New York
Washington
Georgia
Wisconsin
82
Texas
North Carolina
Ohio
Indiana
Oklahoma
Arizona
Louisiana
Colorado
South Carolina
813
locations
Maryland
Missouri
Minnesota
Tennessee
Kansas
Oregon
Pennsylvania
Alabama
Nevada
Hawaii
Kentucky
Utah
Iowa
Arkansas
Nebraska
Idaho
77
76
66
49
42
39
38
37
37
36
34
34
27
25
23
22
19
13
13
13
12
11
11
11
10
8
6
6
6
5
3
3
1
The above numbers include 33 intake locations.
The above numbers include 2 intake locations
and two fleet locations co-located with collision repair centers.
Boyd provides collision repair services to insurance companies and individual vehicle owners, with a high percentage of the
Company’s revenue being derived from insurance-paid collision repair services.
BGSI’s shares trade on the Toronto Stock Exchange under the symbol TSX: BYD.TO.
The following review of BGSI’s operating and financial results for the year ended December 31, 2023, including material
transactions and events of BGSI up to and including March 19, 2024, as well as management’s expectations for the year
ahead, should be read in conjunction with the annual audited consolidated financial statements of BGSI for the year ended
December 31, 2023, included on pages 51 to 95 of the annual report, and as filed on SEDAR+ at www.sedarplus.com.
6
SIGNIFICANT EVENTS
On March 17, 2023, the BGSI Board of Directors declared a cash dividend for the first quarter of 2023 of C$0.147 per
common share. The dividend was paid on April 26, 2023 to common shareholders of record at the close of business on March
31, 2023.
On May 11, 2023, BGSI announced the election of Christine Feuell to the Board of Directors.
On June 16, 2023, the BGSI Board of Directors declared a cash dividend for the second quarter of 2023 of C$0.147 per
common share. The dividend was paid on July 27, 2023 to common shareholders of record at the close of business on June
30, 2023.
On July 12, 2023, BGSI announced the appointment of Jeff Murray as Executive Vice-President & Chief Financial Officer,
effective immediately.
On August 10, 2023, BGSI published Boyd’s second Environmental, Social and Governance Report.
On September 15, 2023, the BGSI Board of Directors declared a cash dividend for the third quarter of 2023 of C$0.147 per
common share. The dividend was paid on October 27, 2023 to common shareholders of record at the close of business on
September 30, 2023.
On October 3, 2023, BGSI commented on the potential impact of the United Auto Workers strike.
On December 15, 2023, the BGSI Board of Directors declared a cash dividend for the fourth quarter of 2023 of C$0.15 per
common share. The dividend was paid on January 29, 2024 to common shareholders of record at the close of business on
December 31, 2023.
During 2023, the Company added 78 locations through acquisition and 28 start-up locations, for a total of 106 new collision
repair locations. From January 1, 2024 up to the reporting date of March 19, 2024, the Company added nine locations
through acquisition and one start-up location. These new collision repair locations are as follows:
Date
January 3, 2023
January 6, 2023
January 16, 2023
January 18, 2023
January 18, 2023
February 3, 2023
February 3, 2023
February 3, 2023
February 8, 2023
February 10, 2023
February 10, 2023
February 17, 2023
February 22, 2023
February 27, 2023
Location
Cameron Park, CA
Abilene, TX
Lethbridge, AB
Venice, FL
Park City, UT
Hendersonville, NC
Rogers, MN
Tontitown, AR
Ocala, FL
Lansdale, PA
Sacramento, CA
Murrieta, CA
LaBelle, FL
Perry, GA
Previously operated as
Cameron Park Auto Body
Gibb’s Paint & Body, LLC
n/a start-up
n/a start-up
CKM Collision
Hill's Collision Center
Excalibur Collision & Conversion Center
n/a start-up
n/a start-up
Old Forge Collision Center
Franklin Collision Center
n/a start-up
Direct Repair Collision Center
Cochran Coach Works
7
Date
February 28, 2023
March 17, 2023
March 22, 2023
March 24, 2023
March 24, 2023
March 28, 2023
March 28, 2023
March 28, 2023
March 29, 2023
April 21, 2023
April 21, 2023
April 21, 2023
April 27, 2023
April 28, 2023
April 28, 2023
May 5, 2023
May 9, 2023
May 12, 2023
May 23, 2023
May 26, 2023
May 26, 2023
May 26, 2023
May 31, 2023
June 2, 2023
June 16, 2023
June 16, 2023
June 23, 2023
June 23, 2023
June 27, 2023
June 29, 2023
June 30, 2023
June 30, 2023
July 14, 2023
July 14, 2023
July 21, 2023
July 21, 2023
July 21, 2023
July 28, 2023
July 31, 2023
July 31, 2023
August 15, 2023
August 15, 2023
August 18, 2023
Location
New Port Richey, FL
Rancho Cucamonga, CA
Sacramento, CA
Modesto, CA
Prattville, AL
Longview, TX
Charleroi, PA
Simpsonville, NC
Sharpsburg, GA
Griffin, GA
Huntsville, AL
Baltimore, MD
Stockton, CA
Lake Charles, LA
Kailua-Kona, HI
Puyallup, WA
Iowa City, IA
Mills River, NC
Winterville, NC
Fort Lauderdale, FL
Monroe, MI
Chicago, IL
Albany, NY
Merced, CA
Sacramento, Davis & Yuba City, CA
(3 locations)
Austin, TX
Fridley, MN
Red Bluff, CA
Johnson City, NY
Walla Walla, WA
Woodstock, IL
Ames, IA
Wildwood, FL
Donaldsonville, LA
Perrysburg, OH
Redding, CA
Lafayette & New Iberia, LA (2 locations)
Oroville, CA
Toledo, OH
Joplin, MO
Coon Rapids, MN
Chicago, IL
Lake Park, FL
8
Previously operated as
n/a start-up
Proline Auto Collision Center
Aries Auto Body
The Professionals Auto Body Works
Advanced Collision
One Stop Automotive
Russell’s Body & Frame Service
n/a start-up
B & B Body Shop
Nicolas Auto Repair & Body Shop
Sledge Custom Body Shop
Moore’s Body Shop
Prestige Auto Body
n/a start-up
Auto Body Hawaii
South Hill Collision
Arena Auto Body
n/a start-up
n/a start-up
Hi-Teck Collision Paint & Body Shop
Auto Body Plant Inc.
Paul Ries & Sons
Colby Body & Fender Works
Rumin’s Auto Body
G&R Automotive/Natomas Auto Body
& Paint
Fix A Wreck Collision Center
City Collision & Glass
Gary’s Auto body
n/a start-up
Tietan Auto Body
n/a start-up
n/a start-up
Cartech Collision Wildwood
Donaldsonville Glass & Body Works
n/a start-up
Crossroads Auto Body Repair
Louisiana Auto Collision
Excel Auto Body
n/a start-up
n/a start-up
McKay Collision
Mayer’s Collision Center
n/a start-up
St. Louis, MO (3 locations)
Huntley, IL
Pleasant Hill, IA
Avon, MN
Houston, TX
Portage, MI
Chico, CA
Albertville, MN
Redding, CA
Springfield, MO
Spring, TX
Stafford, TX
Ft. Wayne, IN
Location
Alexandria, MN
Albion, NY
Lincoln Park, MI
River Falls, WI
Troy, MI
Date
August 25, 2023
September 6, 2023
September 8, 2023
September 8, 2023
September 12, 2023
September 22, 2023 Kingston, NY
September 22, 2023
October 6, 2023
October 13, 2023
October 20, 2023
October 27, 2023
November 3, 2023
November 3, 2023
November 7, 2023
November 8, 2023
November 9, 2023
November 10, 2023
November 10, 2023
November 14, 2023
November 16, 2023 Naples, FL
November 17, 2023 North Port, FL
November 17, 2023 Walker, LA
November 25, 2023 Muskegon, MI
November 25, 2023 Owensboro, KY
November 27, 2023 Houston, TX
November 28, 2023
November 29, 2023 Becker, MN
December 1, 2023
December 1, 2023
December 5, 2023
December 6, 2023
December 6, 2023
December 8, 2023
December 15, 2023
December 15, 2023
December 15, 2023
December 19, 2023
December 27, 2023 McDonough, GA
Niagara Falls, ON
December 27, 2023
December 28, 2023
Columbia, MO
December 28, 2023 Winnipeg, MB
December 29, 2023
January 3, 2024
January 23, 2024
Sacramento, CA
Bloomington, MN
Little Falls, MN
Lodi, CA
Elk River, MN
Melrose, MN
Turlock, CA
Warner Robins, GA
Dalton, GA
San Antonio, TX (3 locations)
Kapolei, HI
Golden Valley, MN
Shakopee, MN
Louisville, KY
Previously operated as
Countryside Body Shop
Waters Auto Body & Paint
Down River Collision
Hove Auto Body
Action Collision
Don’s Autobody
Wagner Collision Center
n/a start-up
Pleasant Hill Auto Body
Avon Body Shop
Corona Paint & Body
n/a start-up
JP’s Paint & Body
Albertville Body Shop
Venture II Body & Paint
n/a start-up
LMC Collision Center
Charlton's Body Repair
n/a start-up
Cars-Medics
North Port Auto Body
Collision Specialties
n/a start-up
Greg's Collision Center
Elite Collision Center
Cherokee Auto Body
Becker Collision & Glass
Auto-Rec Body Works
Loren Pundsack Collision Center
Imperiouz Auto Body
n/a start-up
n/a start-up
My Collision Center
n/a start-up
Boulevard Collision
Referral Collision
Touch of Color Collision Center
n/a start-up
Premier Collision
n/a start-up
n/a start-up
Platinum Autoworks
Legend Auto Body
Hilmerson Collision Center
9
Date
January 26, 2024
February 2, 2024
February 2, 2024
February 9, 2024
February 9, 2024
March 1, 2024
Location
Cedar Rapids, IA
Cypress, TX
Lincoln, CA
Clearfield, UT
Sumner, WA
Omaha, NE (3 locations)
Previously operated as
Golden Hammer Collision Center
I.C.A.R. Houston Paint & Body
Eddie's Lincoln Auto Body
Perks Auto Repair
n/a start-up
Wreckamended Collision Repair
During the twelve months ended December 31, 2023, the Company acquired a two location glass business in Minnesota, a
single location glass business in Texas, a single location glass business in New York, a single location glass business in
Virginia, a single location glass business in Pennsylvania and opened 22 start up glass locations.
10
OUTLOOK
Boyd continues to execute on its growth strategy. During 2023, the Company added 78 locations through acquisition and 28
start-up locations, for a total of 106 new collision repair locations. In addition to location growth, Boyd was able to achieve
same-store sales increases of 15.8%. Heading into 2024, the Company is facing strong comparative period same-store sales
results. Thus far in the first quarter of 2024, same-store sales increases, while positive, are lower than the average quarterly
ten year level of same-store sales growth of 5.9%. Mild winter weather impacted demand for glass services, which are
already seasonally low in the fourth and first quarters of the year. The same weather is impacting demand for collision repair
services.
Performance of the business during the first quarter of 2024 has been challenged by a number of factors. During 2023, Boyd
added a record number of new single locations, including 26 locations through acquisition and 11 start-up locations in the
fourth quarter. These new locations negatively impact earnings during the first several quarters of operation, and typically
mature to align with overall company performance over a two to three year period. While Boyd continues to receive pricing
increases, labor margins remain consistent with the previous quarter and below historical levels. This remains a key area of
focus for the Company, impacting both the gross margin percentage and Adjusted EBITDA margin percentage that can be
achieved in the short term. As in prior years, the first quarter is burdened by higher payroll taxes that occur early in the year,
while the fourth quarter of 2023 benefited from expense accrual reductions, as certain expense estimates were firmed up at
amounts that were lower than previously estimated and accrued. As a result, thus far in the first quarter, Adjusted EBITDA
dollars are trending slightly above levels achieved in the first quarter of the prior year, but below the level achieved in the
fourth quarter. Despite these challenges, Boyd remains positive about the future of the business and the opportunities that lie
ahead.
The pipeline to add new locations and to expand into new markets is robust. Boyd has made investments in resources to
support growth through single location, multi-location, or a combination of single and multi-location acquisitions. In
addition, investments have been made to support growth through start-up locations. Together, these investments give the
Company flexibility on how best to grow. Operationally, Boyd is focused on optimizing performance of new locations, as
well as scanning and calibration services, and consistent execution of the WOW Operating Way. Given the high level of
location growth in 2021, the strong same-store sales growth during 2022, and the combination of same-store sales growth and
location growth in 2023, Boyd remains confident that the Company is on track to achieve its long-term growth goals,
including doubling the size of the business on a constant currency basis from 2021 to 2025 against 2019 sales.
In the long-term, management remains confident in its business model and its ability to increase market share by expanding
its presence in North America through strategic acquisitions alongside organic growth from Boyd’s existing operations.
Accretive growth will remain the Company’s long-term focus whether it is through organic growth, new store development,
or acquisitions. The North American collision repair industry remains highly fragmented and offers attractive opportunities
for industry leaders to build value through focused consolidation and economies of scale. As a growth company, Boyd’s
objective continues to be to maintain a conservative dividend policy that will provide the financial flexibility necessary to
support growth initiatives while gradually increasing dividends over time. The Company remains confident in its
management team, systems and experience. This, along with a strong financial position and financing options, positions Boyd
well for success into the future.
BUSINESS ENVIRONMENT & STRATEGY
The collision repair industry in North America is estimated by Boyd to represent over $47.6 billion U.S. in annual revenue.
The industry is highly fragmented, consisting primarily of small independent family owned businesses operating in local
markets. It is estimated that car dealerships have approximately 15% of the total market. It is believed that multi-unit
collision repair operators with greater than $20 million in annual revenues (including multi-unit car dealerships), now have
approximately 36% of the total market.
Customer relationship dynamics in the Company’s principal markets differ from region to region. In the United States,
Ontario, and Alberta, where private insurers operate, a greater emphasis is placed on establishing and maintaining Direct
11
Repair Programs (“DRP’s”) and other referral arrangements with insurance companies. DRP’s are established between
insurance companies and collision repair shops to better manage automobile repair claims and increase levels of customer
satisfaction. Insurance companies select collision repair operators to participate in their programs based on integrity,
convenience and physical appearance of the facility, quality of work, customer service, cost of repair, cycle time and other
key performance metrics. Major insurers use performance-based criteria for selecting collision repair partners. Local and
regional DRP’s, and national and self-managed DRP relationships, represent an opportunity for Boyd to increase its business.
Insurers have also moved to consolidate DRP repair volumes with a fewer number of repair shops. There is some preference
among some insurance carriers to do business with multi-location collision repairers in order to reduce the number and
complexity of contacts necessary to manage their networks of collision repair providers and to achieve a higher level of
consistent performance. Boyd continues to develop and strengthen its DRP relationships with insurance carriers in both
Canada and the United States and believes it is well positioned to take advantage of these trends.
Boyd manages relationships in the government-owned insurance markets through active participation in industry
associations. In three of the Canadian provinces where Boyd operates, government-owned insurance companies have, by
legislation, either exclusive or semi-exclusive rights to provide insurance to automobile owners. Although Boyd’s services in
these markets are predominantly paid for by government-owned insurance companies, these insurers do not typically refer
insured automobile owners to specific collision repair centers. In these markets, business is driven by performance and
through consumer based advertising.
As described further under “Business Risks and Uncertainties”, operating results are expected to be subject to fluctuations or
trends due to a variety of factors including availability of qualified employees, availability of parts, pricing by insurance
companies, general operating effectiveness, automobile technologies, general and regional economic downturns,
unemployment rates and weather conditions. A downturn in the economic climate has the potential to affect results
negatively. Boyd has worked to mitigate this risk by continuing to focus on meeting insurance companies’ performance
requirements, and in doing so, grow market share.
Through these strategies, Boyd expects to generate growth sufficient to double the size of the business on a constant currency
revenue basis from 2021 to 2025, based on 2019 revenues, implying a compound annual growth rate of 15 percent. Boyd will
continue to pursue accretive growth through a combination of organic growth (same-store sales1 growth) as well as adding
new locations to the network in the United States and Canada.
1 As defined in the non-GAAP financial measures and ratios section of the MD&A
12
BUSINESS STRATEGY
Operational Excellence
Operational excellence has been a key component of Boyd’s past success and has contributed to the Company being viewed
as an industry leading service provider. Delivering on our customers’ expectations related to cost of repair, time to repair,
quality and customer service are critical to being successful and being rewarded with same-store sales2 growth. The
Company’s commitment to operational excellence is embodied in its mission and goal, which is condensed into a top of mind
cheer for its employees which is ‘Wow every customer, be the best’. In 2015, Boyd rolled out and implemented its Wow
Operating Way process improvement initiative which is now in place at all of its locations, except newly acquired locations,
where it will be implemented as part of acquisition integration. In 2022, Boyd expanded its Wow Operating Way practices to
corporate business processes. The Wow Operating Way is a series of systems, processes and measurements that drive
excellence in customer satisfaction, repair cycle times and operational metrics.
Boyd also conducts extensive customer satisfaction polling at all operating locations to assist in keeping customer satisfaction
at the forefront of its mandate.
Boyd will also continue to invest in its infrastructure, process improvement initiatives and IT systems to contribute to high
quality service to its customers and improved operational performance.
Expense Management
Boyd continues to manage its operating expenses as a percentage of sales. Over the last few years, Boyd has made
incremental expense investments that are important for the long-term success of the business, including investing in key
support functions. While expense management is critical, so is making the right expense investments. By working
continuously to identify cost savings and to achieve same-store sales2 growth, Boyd will continue to manage this expense
ratio. Operating expenses have a fixed component and therefore same-store sales2 growth contributes to a lower percentage
of operating expenses to sales.
2 As defined in the non-GAAP financial measures and ratios section of the MD&A
13
Same-Store Sales3 / Optimize Returns
Increasing same-store sales3 has a positive impact on financial performance. Boyd continues to pursue and execute on
strategies to help grow same-store sales3 ,including opportunities to grow same-store sales through increased scanning and
calibration services in both collision and glass repair. Boyd is committed to addressing the labor market challenges, that are
currently limiting capacity and same-store sales3, by focusing on retention and recruitment, investing in the Technician
Development Program and focusing on opportunities for productivity improvements.
New Location and Acquisition Growth
In line with stated growth strategies, Boyd was successful in opening 106 new collision repair locations in 2023. Boyd will
continue to pursue accretive growth through a combination of organic growth (same-store sales3 growth) as well as
acquisitions and new store development. Acquisitions will include both single-location acquisitions as well as multi-location
acquisitions. Through organic growth, acquisitions and new store development, Boyd expects to generate growth sufficient
to double the size of its business (measured against its 2019 revenue on a constant currency basis) over the five year period
from 2021-2025, implying a compound annual growth rate of 15%.
CAUTION CONCERNING FORWARD-LOOKING STATEMENTS
Statements made in this annual report, 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.
3 As defined in the non-GAAP financial measures and ratios section of the MD&A
14
The following table outlines forward-looking information included in this MD&A:
Forward-looking Information
The stated objective of generating growth
sufficient to double the size of the business
over the five year period from 2021 to 2025,
based on 2019 revenues
Boyd remains confident in its business
model to increase market share by
expanding its presence in North America
through strategic and accretive acquisitions
alongside organic growth from Boyd’s
existing operations
Key Assumptions
Opportunities continue to be available and are
at acceptable and accretive prices
Most Relevant Risk Factors
Acquisition market conditions change and repair shop
owner demographic trends change
Financing options continue to be available at
reasonable rates and on acceptable terms and
conditions
New and existing customer relationships are
expected to provide acceptable levels of
revenue opportunities
Anticipated operating results would be
accretive to overall Company results
Growth is defined as revenue on a constant
currency basis
Initiatives to increase production capacity are
successful
Credit and refinancing conditions prevent or restrict the
ability of the Company to continue growth strategies
Changes in market conditions and operating environment
Significant decline in the number of insurance claims
Integration of new stores is not accomplished as planned
Increased competition which prevents achievement of
acquisition and revenue goals
Initiatives to increase production capacity take longer than
expected or are not successful
Re-emergence of stability in economic
conditions and employment rates
Economic conditions deteriorate
New and existing customer relationships are
expected to provide acceptable levels of
revenue opportunities
The Company’s customer and supplier
relationships provide it with competitive
advantages to increase sales over time
Market share growth will more than offset
systemic changes in the industry and
environment
Loss of one or more key customers or loss of significant
volume from any customer
Decline in the number of insurance claims
Inability of the Company to pass cost increases to
customers over time
Increased competition which may prevent achievement of
revenue goals
Changes in market conditions and operating environment
Anticipated operating results would be
accretive to overall Company results
Changes in weather conditions
Inability to maintain, replace or grow technician capacity
could impact organic growth
Stated objective to gradually increase
dividends over time
Growing profitability of the Company and its
subsidiaries
BGSI is dependent upon the operating results of the
Company
The continued and increasing ability of the
Company to generate cash available for
dividends
Economic conditions deteriorate
Changes in weather conditions
Balance sheet strength and flexibility is
maintained and the dividend level is
manageable taking into consideration bank
covenants, growth requirements and
maintaining a dividend level that is supportable
over time
Decline in the number of insurance claims
Loss of one or more key customers or loss of significant
volume from any customer
Changes in government regulation
15
During 2024, the Company plans to make
cash capital expenditures, excluding those
related to acquisition and development of
new locations, within the range of 1.8% and
2.0% of sales. In addition to these capital
expenditures, the Company plans to invest
in network technology upgrades to further
strengthen our
technology and security
infrastructure and prepare for advanced
technology needs
future. The
in
investment expected in 2024 is in the range
of $14M to $17M, with similar investments
expected in 2025.
the
Boyd has made good progress with many
clients, but has not achieved the level of
pricing that will return labor margins to
historical levels. Further increases are
needed to address ongoing wage pressure.
The actual cost for these capital expenditures
agrees with the original estimate
Expected actual expenditures could be above or below
1.8% to 2.0% of sales
The purchase, delivery and installation of the
capital items is consistent with the estimated
timeline
No other new capital requirements are
identified or required during the period
The timing of the expenditures could occur on a different
timeline
BGSI may identify additional capital expenditure needs that
were not originally anticipated
All identified capital requirements are required
during the period
BGSI may identify capital expenditure needs that were
originally anticipated; however, are no longer required or
required on a different timeline
Price increases will be negotiated and agreed
upon by key clients
Inability of the Company to pass cost increases to
customers over time
Demand for services will continue to grow,
allowing Boyd to focus on higher margin
business
Wage inflation will return to historical levels
and will not outpace pricing increases
Decline in the number of insurance claims
Loss of one or more key customers or loss of significant
volume from any customer
Changes in market conditions and operating environment
Supply chain disruption is transitory and will
normalize as underlying issues are resolved
Wage inflation continues in excess of historical levels and
outpaces pricing increases
Internal training and development programs,
including the Technician Development
Program, will improve staffing availability
Supply chain remains disrupted
Internal training and development programs do not improve
staffing availability
We caution that the foregoing table contains what BGSI believes are the material forward-looking statements and is not
exhaustive. Therefore when relying on forward-looking statements, investors and others should refer to the “Risk Factors”
section of BGSI’s Annual Information Form, the “Business Risks and Uncertainties” and other sections of our Management’s
Discussion and Analysis and our other periodic filings with Canadian securities regulatory authorities. All forward-looking
statements presented herein should be considered in conjunction with such filings.
16
SELECTED ANNUAL INFORMATION
The following table summarizes selected financial information for BGSI over the prior three years:
For the years ended December 31,
(thousands of U.S. dollars, except per unit/share amounts)
2023
2022
2021
Sales
Net earnings
Adjusted net earnings (2)
Basic and diluted earnings per share
Adjusted net earnings per share (2)
Cash dividends per share declared:
Share dividends (1)
December 31,
(thousands of U.S. dollars)
Total assets
Total long-term financial liabilities
$2,945,988
$2,432,318
$1,872,670
$86,656
$89,683
$4.04
$4.18
$40,962
$42,366
$1.91
$1.97
$23,540
$28,006
$1.10
$1.30
$0.44
$0.45
$0.45
2023
2022
2021
$
$
2,382,416 $
2,102,832 $
2,027,127
1,082,067 $
931,941 $
933,020
(1) Dividends and distributions continue to be declared and paid in Canadian dollars. In 2023, the annual dividend declared totaled C$0.591 (2022 - C$0.579, 2021 - C$0.567)
(2) As defined in the non-GAAP financial measures and ratios section of the MD&A
Financial results, including sales, net earnings, and adjusted net earnings4, improved in 2023 compared to 2022 and 2021.
The increase in sales, net earnings and adjusted net earnings in 2023 is due to increases in same store sales as well as location
growth. In 2021 and 2022, financial results were negatively impacted by the COVID-19 pandemic, supply chain disruption
and a highly competitive labor market which translated into significant wage pressure and labor margin compression. In
addition, a lack of fixed cost absorption due to lower sales per location than pre-pandemic levels impacted financial results in
2021 and 2022. After a temporary pause on acquisitions from March to August of 2020, acquisition activity resumed;
however, new locations experienced the same challenges during 2021 and 2022, which constrained sales and net earnings
levels.
The change in total assets and total long-term financial liabilities was significantly impacted by acquisitions and new location
growth. In addition to these changes, fluctuations in total assets from 2021 to 2023 have primarily related to increases in
property, plant and equipment, intangible assets and goodwill as a result of new location growth. During this timeframe,
long-term financial liabilities were also impacted by financing of acquisitions and new location growth.
Since the end of 2007 through the end of 2023, BGSI increased dividends to shareholders. As of March 19, 2024 the dividend
rate is C$0.15 per quarter or C$0.60 on an annualized basis.
BOYD GROUP SERVICES INC.
The consolidated financial statements of BGSI and its subsidiaries have been prepared in accordance with International
Financial Reporting Standards and contain the consolidated financial position, results of operations and cash flows of BGSI,
the Company and the Company’s subsidiary companies for the year ended December 31, 2023.
4 As defined in the non-GAAP financial measures and ratios section of the MD&A
17
NON-GAAP FINANCIAL MEASURES AND RATIOS
EBITDA AND ADJUSTED EBITDA
Earnings before interest, taxes, depreciation and amortization (“EBITDA”) is not a calculation defined in International
Financial Reporting Standards (“IFRS”). EBITDA should not be considered an alternative to net earnings in measuring the
performance of BGSI, nor should it be used as an exclusive measure of cash flow. BGSI reports EBITDA and Adjusted
EBITDA because they are key measures that management uses to evaluate performance of the business and to reward its
employees. EBITDA is also a concept utilized in measuring compliance with debt covenants. EBITDA and Adjusted
EBITDA are measures commonly reported and widely used by investors and lending institutions as an indicator of a
company’s operating performance and ability to incur and service debt, and as a valuation metric. While EBITDA is used to
assist in evaluating the operating performance and debt servicing ability of BGSI, investors are cautioned that EBITDA and
Adjusted EBITDA as reported by BGSI may not be comparable in all instances to EBITDA as reported by other companies.
CPA Canada’s Canadian Performance Reporting Board defined Standardized EBITDA to foster comparability of the measure
between entities. Standardized EBITDA represents an indication of an entity’s capacity to generate income from operations
before taking into account management’s financing decisions and costs of consuming tangible and intangible capital assets,
which vary according to their vintage, technological age and management’s estimate of their useful life. Accordingly,
Standardized EBITDA comprises sales less operating expenses before finance costs, capital asset amortization and
impairment charges, and income taxes. Adjusted EBITDA is calculated to exclude items of an unusual nature that do not
reflect normal or ongoing operations of BGSI and which should not be considered in a valuation metric or should not be
included in an assessment of the ability to service or incur debt. Included as an adjustment to EBITDA are acquisition and
transaction costs and fair value adjustments to contingent consideration, which do not relate to the current operating
performance of the business units but are typically costs incurred to expand operations. From time to time BGSI may make
other adjustments to its Adjusted EBITDA for items that are not expected to recur.
The following is a reconciliation of BGSI’s net earnings to Standardized EBITDA and Adjusted EBITDA:
ADJUSTED EBITDA
(thousands of U.S. dollars)
Net earnings
Add:
Three Months Ended
December 31,
Year Ended
December 31,
2023
2022
2023
2022
$
19,066 $
14,184 $
86,656 $
40,962
Finance costs
Income tax expense
Depreciation of property, plant and equipment
Depreciation of right of use assets
Amortization of intangible assets
14,052
8,008
16,224
28,663
6,896
9,967
5,179
12,279
26,035
6,473
51,718
32,865
56,863
109,806
26,182
37,308
17,765
47,902
101,150
26,567
Standardized EBITDA
Add:
Fair value adjustments
Acquisition and transaction costs
$
92,909 $
74,117 $
364,090 $
271,654
(189)
1,487
—
576
(189)
4,346
146
1,700
Adjusted EBITDA
$
94,207 $
74,693 $
368,247 $
273,500
18
ADJUSTED NET EARNINGS
In addition to Standardized EBITDA and Adjusted EBITDA, BGSI believes that certain users of financial statements are
interested in understanding net earnings excluding certain fair value adjustments and other items of an unusual or infrequent
nature that do not reflect normal or ongoing operations of the Company. This can assist these users in comparing current
results to historical results that did not include such items. The following is a reconciliation of BGSI’s net earnings to
adjusted net earnings:
(thousands of U.S. dollars, except share and per share
amounts)
Three Months Ended
December 31,
2023
2022
Year Ended
December 31,
2023
2022
Net earnings
Add:
$
19,066 $
14,184 $
86,656 $
40,962
Fair value adjustments (non-taxable)
Acquisition and transaction costs (net of tax)
(189)
1,100
—
426
(189)
3,216
146
1,258
Adjusted net earnings
Weighted average number of shares
Adjusted net earnings per share
$
$
19,977 $
14,610 $
89,683 $
42,366
21,472,194
21,472,194
21,472,194
21,472,194
0.93 $
0.68 $
4.18 $
1.97
SAME-STORE SALES
Same-store sales is a measure of sales that includes only those locations in operation for the full comparative period. Same-
store sales is presented excluding the impact of foreign exchange on the current period. Same-store sales is calculated by
applying the prior period exchange rate to the current year sales. The following is a reconciliation of BGSI’s sales to same-
store sales:
(thousands of U.S. dollars)
Sales
Less:
Three months ended
December 31,
Year ended
December 31,
2023
2022
2023
2022
$
740,014 $
637,094 $
2,945,988 $
2,432,318
Sales from locations not in the comparative period
Sales from under-performing facilities closed during the
period
Foreign exchange
Same-store sales (excluding foreign exchange)
$
(49,434)
(1,360)
(180,560)
(33,978)
(9)
(102)
690,469 $
(359)
—
635,375 $
—
8,736
2,774,164 $
(2,938)
—
2,395,402
19
Dividends
BGSI declared dividends of C$0.147 per share in each of the first, second and third quarters of 2023 and C$0.15 per share in
the fourth quarter of 2023 (2022 - C$0.144 and C$0.147 respectively).
Dividends to shareholders of BGSI were declared and paid as follows:
(thousands of U.S. dollars)
Record date
March 31, 2023
June 30, 2023
September 30, 2023
December 31, 2023
Payment date
April 26, 2023
July 27, 2023
October 27, 2023
January 29, 2024
(thousands of U.S. dollars)
Record date
March 31, 2022
June 30, 2022
September 30, 2022
December 31, 2022
Payment date
April 27, 2022
July 27, 2022
October 27, 2022
January 27, 2023
Dividend amount
2,306
$
2,376
2,333
2,397
$
9,412
Dividend amount
2,441
$
2,413
2,321
2,324
$
9,499
20
RESULTS OF OPERATIONS
Results of Operations
(thousands of U.S. dollars, except per share amounts)
Three months ended December 31,
2022
% change
2023
Year ended December 31,
% change
2023
2022
Sales - Total
Same-store sales - Total (1)
(excluding foreign exchange)
Gross margin %
Operating expense %
Adjusted EBITDA (1)
Acquisition and transaction costs
Depreciation and amortization
Fair value adjustments
Finance costs
Income tax expense
740,014
16.2
637,094
2,945,988
21.1
2,432,318
690,469
8.7
635,375
2,774,164
15.8
2,395,402
45.5
32.7
94,207
1,487
51,783
(189)
14,052
8,008
2.7
0.3
44.3
32.6
45.5
33.0
26.1
158.2
15.6
N/A
41.0
54.6
74,693
576
44,787
—
9,967
5,179
368,247
4,346
192,851
(189)
51,718
32,865
1.8
(1.5)
34.6
155.6
9.8
N/A
38.6
85.0
44.7
33.5
273,500
1,700
175,619
146
37,308
17,765
Adjusted net earnings (1)
19,977
36.7
14,610
89,683
111.7
42,366
Adjusted net earnings per share (1)
0.93
36.8
0.68
4.18
112.2
1.97
Net earnings
Basic and diluted earnings per
share
19,066
34.4
14,184
86,656
111.6
40,962
0.89
34.4
0.66
4.04
111.6
1.91
(1) As defined in the non- GAAP financial measures and ratios section of the MD&A.
21
Sales
Sales totaled $2.9 billion for the year ended December 31, 2023 an increase of $513.7 million or 21.1% when compared to
the same period of 2022. The increase in sales was the result of the following:
•
•
•
Same-store sales5 excluding foreign exchange increased $378.8 million or 15.8%, partially offset by a decrease of
$8.7 million due to the translation of same-store sales5 at a lower Canadian dollar exchange rate. The year ended
December 31, 2023 recognized one less selling and production day when compared to the same period of the prior
year, which decreased selling and production capacity by approximately 0.4%. Same-store sales benefited from high
levels of demand for services, as well as some increase in production capacity related to technician hiring, growth in
the Technician Development Program, as well as productivity improvement, although ongoing staffing constraints
continued to impact sales and service levels that could be achieved. Sales also increased based on higher repair costs
due to increasing vehicle complexity, increased scanning and calibration services, as well as general market
inflation.
$146.6 million of incremental sales were generated from 186 new locations that were not in operation for the full
comparative period.
Sales were affected by the closure of under-performing facilities which decreased sales by $2.9 million.
Same-store sales are calculated by including sales for locations and businesses that have been in operation for the full
comparative period.
Gross Profit
Gross Profit was $1.3 billion or 45.5% of sales for the year ended December 31, 2023 compared to $1.1 billion or 44.7% of
sales for the same period in 2022. Gross profit increased $252.7 million primarily as a result of same-store sales and location
growth when compared to the prior period. The gross margin percentage benefited from improved glass margins, higher paint
and parts margins and increased scanning and calibration. Client pricing increases resulted in improvement in labor margins;
however, margins remain below historical levels. Certain performance based programs, which were suspended during the
pandemic and pandemic related disruptions, have been reinstituted, which partially offset improvements to gross margin
during 2023 as compared to the same period in 2022.
Operating Expenses
Operating Expenses for the year ended December 31, 2023 increased $158.0 million to $971.8 million from $813.8 million
for the same period of 2022. The increase in operating expenses was primarily the result of increased sales based on same-
store sales as well as location growth, in addition to inflationary increases. In addition, Boyd has made incremental expense
investments that are important for the long-term success of the business, including investing in key support functions. Closed
locations lowered operating expenses by $1.7 million.
Operating expenses as a percentage of sales were 33.0% for the year ended December 31, 2023, which compared to 33.5%
for the same period in 2022. The decrease as a percentage of sales was impacted by improved sales levels, which provided
improved leveraging of certain operating costs. This improvement was moderated by incremental expense investments,
including the expansion of certain key support functions, as well as investments to support growth through both acquisition
and start-up locations. During 2023, Boyd added a record number of new single locations. These new locations contributed
sales but with a higher operating expense ratio.
Acquisition and Transaction Costs
Acquisition and Transaction Costs for the year ended December 31, 2023 were $4.3 million compared to $1.7 million
recorded for the same period of 2022. The costs relate to various acquisitions, including acquisitions from prior periods, as
well as other completed or potential acquisitions. Acquisition and transaction costs increased due to increased acquisition
activity in 2023 when compared to 2022.
5 As defined in the non-GAAP financial measures and ratios section of the MD&A
22
Adjusted EBITDA6
Earnings before interest, income taxes, depreciation and amortization, adjusted for contingent consideration, as well as
acquisition and transaction costs (“Adjusted EBITDA6”) for the year ended December 31, 2023 totaled $368.2 million or
12.5% of sales compared to Adjusted EBITDA6 of $273.5 million or 11.2% of sales in the same period of the prior year. The
$94.7 million increase was primarily the result of improved sales levels and gross margin percentage, which also provided
improved leveraging of certain operating costs.
Depreciation and Amortization
Depreciation related to property, plant and equipment totaled $56.9 million or 1.9% of sales for the year ended December 31,
2023, an increase of $9.0 million when compared to the $47.9 million or 2.0% of sales recorded in the same period of the
prior year. The increase in depreciation expense was primarily due to location growth as well as investments in capital
equipment. Same-store sales increases resulted in a decrease in depreciation expense as a percentage of sales during 2023.
Depreciation related to right of use assets totaled $109.8 million, or 3.7% of sales for the year ended December 31, 2023, as
compared to $101.2 million or 4.2% of sales for the same period of the prior year. The increase in depreciation expense was
primarily due to location growth. Same-store sales increases resulted in a decrease in depreciation expense as a percentage of
sales during 2023.
Amortization of intangible assets for the year ended December 31, 2023 totaled $26.2 million or 0.9% of sales, a decrease of
$0.4 million when compared to the $26.6 million or 1.1% of sales expensed for the same period in the prior year. The
decrease in amortization was primarily due to the full amortization of certain non-compete agreements. Same-store sales
increases resulted in a decrease in amortization expense as a percentage of sales during 2023.
Finance Costs
Finance Costs of $51.7 million or 1.8% of sales for the year ended December 31, 2023 increased from $37.3 million or 1.5%
of sales for the same period of the prior year. The increase in finance costs was primarily due to higher variable interest rates
on the revolving credit facility, as well as increased lease liabilities, as a result of acquisition activity and lease renewals.
Income Taxes
Current and Deferred Income Tax Expense of $32.9 million for the year ended December 31, 2023 compared to an expense
of $17.8 million for the same period of the prior year. Income tax expense was impacted by the recording of state-related
adjustments related to the completion and filing of the prior year U.S. tax returns, which increased income tax expense by
approximately $1.2 million for the year ended December 31, 2023 (December 31, 2022 - $2.0 million). Permanent
differences did not have a significant impact on the tax computed on accounting income.
Net Earnings and Earnings Per Share
Net Earnings for the year ended December 31, 2023 was $86.7 million or 2.9% of sales compared to $41.0 million or 1.7% of
sales in the same period of the prior year. The net earnings amount in 2023 was impacted by acquisition and transaction costs
of $3.2 million (net of tax). After adjusting for fair value and other unusual items, Adjusted net earnings7 in 2023 was $89.7
million, or 3.0% of sales. This compares to Adjusted net earnings7 of $42.4 million or 1.7% of sales in 2022. Adjusted net
earnings for the period was positively impacted by increased sales, improvements in gross margin percentage as well as
improved leveraging of operating expenses. Certain costs, such as depreciation and amortization, are not variable and same-
store sales increases resulted in a decrease in depreciation and amortization expense as a percentage of sales during 2023.
6 As defined in the non-GAAP financial measures and ratios section of the MD&A
7 As defined in the non-GAAP financial measures and ratios section of the MD&A
23
Basic and Diluted Earnings Per Share was $4.04 per share for the year ended December 31, 2023 compared to $1.91 for the
same period of 2022. Adjusted net earnings per share7 was $4.18 compared to $1.97 for the same period of 2022. The
increase in adjusted net earnings per share is primarily attributed to increased sales, improvements in gross margin percentage
as well as improved leveraging of operating expenses.
Summary of Quarterly Results
(in thousands of U.S. dollars,
except per share amounts)
Sales
Adjusted EBITDA (1)
Net earnings
Basic and diluted earnings per
share
Adjusted net earnings (1)
Adjusted net earnings per
share (1)
$
$
$
$
$
$
2023 Q4
2023 Q3
2023 Q2
2023 Q1
2022 Q4
2022 Q3
2022 Q2
2022 Q1
740,014 $
737,798 $
753,235 $
714,941 $
637,094 $
625,663 $
612,806 $
556,755
94,207 $
93,972 $
95,374 $
84,694 $
74,693 $
73,042 $
72,003 $
53,762
19,066 $
20,498 $
26,269 $
20,823 $
14,184 $
11,872 $
13,298 $
1,608
0.89 $
0.95 $
1.22 $
0.97 $
0.66 $
0.55 $
0.62 $
0.07
19,977 $
21,483 $
26,988 $
21,234 $
14,610 $
12,052 $
13,558 $
2,145
0.93 $
1.00 $
1.26 $
0.99 $
0.68 $
0.56 $
0.63 $
0.10
(1) As defined in the non-GAAP financial measures and ratios section of the MD&A.
LIQUIDITY AND CAPITAL RESOURCES
Cash flow from operations, together with cash on hand and undrawn credit on existing facilities are expected to be sufficient
to meet operating requirements, capital expenditures and dividends. At December 31, 2023, BGSI had cash, net of
outstanding deposits and cheques, held on deposit in bank accounts totaling $22.5 million (December 31, 2022 - $15.1
million). The increase in the cash balance as at December 31, 2023 is the result of increased cash flows from operations. The
net working capital ratio (current assets divided by current liabilities) was 0.63:1 at December 31, 2023 (December 31, 2022
– 0.65:1).
At December 31, 2023, BGSI had total debt outstanding, net of cash, of $1,114.5 million compared to $1,048.8 million at
September 30, 2023, $1,004.5 million at June 30, 2023, $1,008.8 million at March 31, 2023 and $963.0 million at
December 31, 2022. Debt, net of cash, increased when compared to the prior year primarily as a result of an increased
acquisition activity and increased capital expenditures, including start-up location growth.
24
Total debt, net of cash
(thousands of U.S. dollars)
Revolving credit facility & swing line
(net of financing costs)
Term Loan A (net of financing costs)
Seller notes (1)
December 31,
2023
September 30,
2023
June 30,
2023
March 31,
2023
December 31,
2022
$
264,046 $
219,753 $
174,507 $
184,094 $
124,812
124,802
124,783
124,773
32,847
34,274
37,447
40,295
192,343
124,759
43,069
Total debt before lease liabilities
$
421,705 $
378,829 $
336,737 $
349,162 $
360,171
Cash
22,511
22,059
19,887
11,036
15,068
Total debt, net of cash
before lease liabilities
Lease liabilities
$
399,194 $
356,770 $
316,850 $
338,126 $
345,103
715,277
692,078
687,685
670,629
617,926
Total debt, net of cash
(1) Seller notes are loans granted to the Company by the sellers of businesses related to the acquisition of those businesses.
1,114,471 $
1,004,535 $
1,048,848 $
$
1,008,755 $
963,029
The following table summarizes the undiscounted contractual obligations at December 31, 2023 and required payments over
the next five years:
Contractual Obligations
(thousands of U.S. dollars)
Bank indebtedness
Accounts payable and accrued
liabilities
Long-term debt
Lease liability
Purchase Obligations (1)
Total
$—
Within 1
year
$—
1 to 2
years
$—
2 to 3
years
$—
3 to 4
years
$—
339,823
339,823
—
—
—
421,705
22,038
271,553
2,443
125,582
4 to 5
years
$—
—
89
After 5
years
$—
—
—
883,340
141,905
133,986
117,911
102,699
82,499
304,340
—
unknown
unknown
unknown
unknown
unknown
unknown
$1,644,868 $503,766
$405,539
$120,354
$228,281
$82,588
$304,340
(1) Subject to fulfilling certain conditions such as meeting contractual purchase obligations and no change in control the repayment would be nil
25
Operating Activities
Cash flow generated from operations before considering working capital changes, was $338.5 million for the year ended
December 31, 2023 compared to $265.8 million in 2022.
For the year ended December 31, 2023, changes in working capital items provided net cash of $19.1 million compared with
using net cash of $1.5 million in the same period of 2022. Changes in accounts receivable, inventory, prepaid expenses,
income taxes, accounts payable and accrued liabilities are significantly influenced by timing of collections and expenditures.
Financing Activities
Cash used in financing activities totaled $105.9 million for the year ended December 31, 2023 compared to cash used in
financing activities of $228.4 million for the same period of the prior year. During 2023, cash was provided by draws of the
revolving credit facility in the amount of $260.5 million offset by cash used to repay draws as well as long-term debt
associated with seller notes in the amount of $205.8 million and to fund interest costs on long-term debt of $19.8 million.
Cash used by financing activities included $99.3 million in repayments of lease liabilities and cash used to fund interest costs
on lease liabilities of $32.1 million. Cash was also used to pay dividends of $9.4 million. During 2022, cash was provided by
draws of the revolving credit facility in the amount of $126.1 million offset by cash used to repay draws as well as long-term
debt associated with seller notes in the amount of $211.9 million and to fund interest costs on long-term debt of $15.5
million. Cash used by financing activities included $95.3 million used to repay lease liabilities and cash used to fund interest
costs on lease liabilities of $21.8 million. Cash was also used to pay dividends of $9.5 million. The Company amended the
revolving credit facility, resulting in the payment of $0.5 million of financing costs.
Debt Financing
On March 17, 2020, the Company entered into a third amended and restated credit agreement (“Credit Agreement”),
increasing the revolving credit facility to $550 million U.S., with an accordion feature which can increase the facility to a
maximum of $825 million U.S. (the “revolving credit facility”, or the “facility”). The revolving credit facility is accompanied
by a seven-year fixed-rate Term Loan A in the amount of $125 million U.S. at an interest rate of 3.455%. The revolving credit
facility is with a syndicate of Canadian and U.S. banks and is secured by the shares and assets of the Company as well as
guarantees by BGSI and subsidiaries, while the Term Loan A is with one of the syndicated banks. The interest rate for draws
on the revolving credit facility are based on a pricing grid of BGSI’s ratio of total funded debt to EBITDA as determined
under the Credit Agreement. The Company can draw the facility in either the U.S. or in Canada, in either U.S. or Canadian
dollars. The Company can make draws in tranches as required. Tranches bear interest only and are not repayable until the
maturity date but can be voluntarily repaid at any time. The Company has the ability to choose the base interest rate between
Prime, Bankers Acceptances (“BA”), U.S. Prime or the Secured Overnight Financing Rate (“SOFR”) at the Company’s
election. The total syndicated facility includes a swing line up to a maximum of $10.0 million U.S. in Canada and $30.0
million U.S. in the U.S. At December 31, 2023, the Company has drawn $264.5 million U.S. (December 31, 2022 - $186.5
million U.S.) and $nil Canadian (December 31, 2022 - $9 million Canadian) on the revolving credit facility and swing line and
$125.0 million U.S. (December 31, 2022 - $125.0 million U.S.) on the Term Loan A.
Under the revolving credit facility, the Company is subject to certain financial covenants which must be maintained to avoid
acceleration of the termination of the Credit Agreement. The financial covenants require BGSI to maintain a senior funded
debt to EBITDA ratio of less than 3.50 and an interest coverage ratio of greater than 2.75. For four quarters following a
material acquisition, the senior funded debt to EBITDA ratio may be increased to less than 4.00. For purposes of covenant
calculations, property lease payments are deducted from EBITDA.
The Company supplements its debt financing by negotiating with sellers in certain acquisitions to provide financing to the
Company in the form of term notes. The notes payable to sellers are typically at favorable interest rates and for terms of one
to 15 years. This source of financing is another means of supporting BGSI’s growth, at a relatively low cost. During the year
ended December 31, 2023, BGSI entered into 33 new seller notes for an aggregate amount of $6.5 million.
26
Shareholders’ Capital
During the first quarter of 2021, the Company instituted a stock option plan for senior management, which was approved by
shareholders on May 12, 2021. The Company's stock option plan allows for the granting of options up to an amount of
250,000 Common shares under this plan. Each tranche of the options vests equally over two, three, four and five year periods.
The term of an option shall be determined and approved by the People, Culture and Compensation Committee; provided that
the term shall be no longer than ten years from the grant date.
On March 31, 2021 the Company issued 13,831 options under the stock option plan with a grant date fair value of C$56.99
per option and an exercise price of C$219.21 per option. As at December 31, 2023, 11,232 options remain issued and
outstanding, 25% of which have vested. Issue costs of $105 were incurred with respect to the stock option plan.
On March 31, 2022, the Company issued an additional 18,878 options under the stock option plan with a grant date fair value
of C$47.08 per option and an exercise price of C$164.68 per option. As at December 31, 2023, 16,533 options remain issued
and outstanding. None of the options are exercisable at period end. Issue costs of $nil were incurred with respect to the 2022
options issued under the stock option plan.
On March 29, 2023 and during the second quarter of 2023 the Company issued 28,292 and 435 options, respectively, under
the stock option plan with a grant date fair value of C$71.64 per option and an exercise price of C$211.26 per option.As at
December 31, 2023, 26,794 options remain issued and outstanding. None of the options are exercisable at period end. Issue
costs of $nil were incurred with respect to the 2023 options issued under the stock option plan.
Investing Activities
Cash used in investing activities totaled $244.4 million for the year ended December 31, 2023. This compares to $47.9
million used in the prior period. The investing activity in both periods related primarily to new location growth that occurred
during these periods. During the year ended December 31, 2022, the Company completed sale leaseback transactions for
proceeds of $55.1 million. The increase in start-up locations resulted in a build up of real estate assets. The Company’s
strategy has been to not hold real estate in the long term, although the increase in new location development may periodically
cause real estate to be held in the short term. The sale leaseback transactions allowed the Company to replenish capital while
continuing to use these properties. The remaining investing activity in both periods related primarily to new location growth
that occurred during these periods.
27
Acquisitions and Development of Businesses
During 2023, the Company added 78 locations through acquisition and 28 start-up locations, for a total of 106 new collision
repair locations. From January 1, 2024 up to the reporting date of March 19, 2024, the Company has added nine locations
through acquisition and one start-up location. These new collision repair locations are as follows:
Date
January 3, 2023
January 6, 2023
January 16, 2023
January 18, 2023
January 18, 2023
February 3, 2023
February 3, 2023
February 3, 2023
February 8, 2023
February 10, 2023
February 10, 2023
February 17, 2023
February 22, 2023
February 27, 2023
February 28, 2023
March 17, 2023
March 22, 2023
March 24, 2023
March 24, 2023
March 28, 2023
March 28, 2023
March 28, 2023
March 29, 2023
April 21, 2023
April 21, 2023
April 21, 2023
April 27, 2023
April 28, 2023
April 28, 2023
May 5, 2023
May 9, 2023
May 12, 2023
May 23, 2023
May 26, 2023
May 26, 2023
May 26, 2023
May 31, 2023
June 2, 2023
June 16, 2023
June 16, 2023
June 23, 2023
June 23, 2023
June 27, 2023
June 29, 2023
Location
Cameron Park, CA
Abilene, TX
Lethbridge, AB
Venice, FL
Park City, UT
Hendersonville, NC
Rogers, MN
Tontitown, AR
Ocala, FL
Lansdale, PA
Sacramento, CA
Murrieta, CA
LaBelle, FL
Perry, GA
New Port Richey, FL
Rancho Cucamonga, CA
Sacramento, CA
Modesto, CA
Prattville, AL
Longview, TX
Charleroi, PA
Simpsonville, NC
Sharpsburg, GA
Griffin, GA
Huntsville, AL
Baltimore, MD
Stockton, CA
Lake Charles, LA
Kailua-Kona, HI
Puyallup, WA
Iowa City, IA
Mills River, NC
Winterville, NC
Fort Lauderdale, FL
Monroe, MI
Chicago, IL
Albany, NY
Merced, CA
Sacramento, Davis & Yuba City, CA
(3 locations)
Austin, TX
Fridley, MN
Red Bluff, CA
Johnson City, NY
Walla Walla, WA
Previously operated as
Cameron Park Auto Body
Gibb’s Paint & Body, LLC
n/a start-up
n/a start-up
CKM Collision
Hill's Collision Center
Excalibur Collision & Conversion Center
n/a start-up
n/a start-up
Old Forge Collision Center
Franklin Collision Center
n/a start-up
Direct Repair Collision Center
Cochran Coach Works
n/a start-up
Proline Auto Collision Center
Aries Auto Body
The Professionals Auto Body Works
Advanced Collision
One Stop Automotive
Russell’s Body & Frame Service
n/a start-up
B & B Body Shop
Nicolas Auto Repair & Body Shop
Sledge Custom Body Shop
Moore’s Body Shop
Prestige Auto Body
n/a start-up
Auto Body Hawaii
South Hill Collision
Arena Auto Body
n/a start-up
n/a start-up
Hi-Teck Collision Paint & Body Shop
Auto Body Plant Inc.
Paul Ries & Sons
Colby Body & Fender Works
Rumin’s Auto Body
G&R Automotive/Natomas Auto Body & Paint
Fix A Wreck Collision Center
City Collision & Glass
Gary’s Auto body
n/a start-up
Tietan Auto Body
28
Location
Woodstock, IL
Ames, IA
Wildwood, FL
Donaldsonville, LA
Perrysburg, OH
Redding, CA
Lafayette & New Iberia, LA (2 locations)
Oroville, CA
Toledo, OH
Joplin, MO
Coon Rapids, MN
Chicago, IL
Lake Park, FL
Alexandria, MN
Albion, NY
Lincoln Park, MI
River Falls, WI
Troy, MI
Date
June 30, 2023
June 30, 2023
July 14, 2023
July 14, 2023
July 21, 2023
July 21, 2023
July 21, 2023
July 28, 2023
July 31, 2023
July 31, 2023
August 15, 2023
August 15, 2023
August 18, 2023
August 25, 2023
September 6, 2023
September 8, 2023
September 8, 2023
September 12, 2023
September 22, 2023 Kingston, NY
September 22, 2023
October 6, 2023
October 13, 2023
October 20, 2023
October 27, 2023
November 3, 2023
November 3, 2023
November 7, 2023
November 8, 2023
November 9, 2023
November 10, 2023
November 10, 2023
November 14, 2023
November 16, 2023 Naples, FL
November 17, 2023 North Port, FL
November 17, 2023 Walker, LA
November 25, 2023 Muskegon, MI
November 25, 2023 Owensboro, KY
November 27, 2023 Houston, TX
November 28, 2023
November 29, 2023 Becker, MN
December 1, 2023
December 1, 2023
December 5, 2023
December 6, 2023
December 6, 2023
December 8, 2023
December 15, 2023
December 15, 2023
December 15, 2023
December 19, 2023
December 27, 2023 McDonough, GA
Niagara Falls, ON
December 27, 2023
Columbia, MO
December 28, 2023
Lodi, CA
St. Louis, MO (3 locations)
Huntley, IL
Pleasant Hill, IA
Avon, MN
Houston, TX
Portage, MI
Chico, CA
Albertville, MN
Redding, CA
Springfield, MO
Spring, TX
Stafford, TX
Ft. Wayne, IN
Elk River, MN
Melrose, MN
Turlock, CA
Warner Robins, GA
Dalton, GA
San Antonio, TX (3 locations)
Kapolei, HI
Golden Valley, MN
Shakopee, MN
Louisville, KY
29
Previously operated as
n/a start-up
n/a start-up
Cartech Collision Wildwood
Donaldsonville Glass & Body Works
n/a start-up
Crossroads Auto Body Repair
Louisiana Auto Collision
Excel Auto Body
n/a start-up
n/a start-up
McKay Collision
Mayer’s Collision Center
n/a start-up
Countryside Body Shop
Waters Auto Body & Paint
Down River Collision
Hove Auto Body
Action Collision
Don’s Autobody
Wagner Collision Center
n/a start-up
Pleasant Hill Auto Body
Avon Body Shop
Corona Paint & Body
n/a start-up
JP’s Paint & Body
Albertville Body Shop
Venture II Body & Paint
n/a start-up
LMC Collision Center
Charlton's Body Repair
n/a start-up
Cars-Medics
North Port Auto Body
Collision Specialties
n/a start-up
Greg's Collision Center
Elite Collision Center
Cherokee Auto Body
Becker Collision & Glass
Auto-Rec Body Works
Loren Pundsack Collision Center
Imperiouz Auto Body
n/a start-up
n/a start-up
My Collision Center
n/a start-up
Boulevard Collision
Referral Collision
Touch of Color Collision Center
n/a start-up
Premier Collision
n/a start-up
Location
Date
December 28, 2023 Winnipeg, MB
December 29, 2023
January 3, 2024
January 23, 2024
January 26, 2024
February 2, 2024
February 2, 2024
February 9, 2024
February 9, 2024
March 1, 2024
Sacramento, CA
Bloomington, MN
Little Falls, MN
Cedar Rapids, IA
Cypress, TX
Lincoln, CA
Clearfield, UT
Sumner, WA
Omaha, NE (3 locations)
Previously operated as
n/a start-up
Platinum Autoworks
Legend Auto Body
Hilmerson Collision Center
Golden Hammer Collision Center
I.C.A.R. Houston Paint & Body
Eddie's Lincoln Auto Body
Perks Auto Repair
n/a start-up
Wreckamended Collision Repair
During the twelve months ended December 31, 2023, the Company acquired a two location glass business in Minnesota, a
single location glass business in Texas, a single location glass business in New York, a single location glass business in
Virginia, a single location glass business in Pennsylvania and opened 22 start up glass locations.
The Company completed the acquisition or start-up of 57 collision repair locations from the beginning of 2022 until the
fourth quarter reporting date of March 21, 2023. Details of these acquisitions can be found in the 2022 Annual Report.
Start-ups
In 2023, the Company commenced operations in 28 new start-up collision repair facilities. The total combined investment in
leaseholds and equipment for these facilities was approximately $45.3 million, including incremental investments in the build
out of certain start-up locations. The Company commenced operations in 12 new start-up collision repair facilities in 2022
with a combined investment of approximately $11.4 million. A portion of the investment in start-ups during 2023 is a result
of timing and will be reimbursed by property owners during 2024. The Company anticipates it will use similar start-up
strategies as part of its continued growth in the future.
Capital Expenditures
Although most of Boyd’s repair facilities are leased, funds are required to ensure facilities are properly repaired and
maintained to ensure the Company’s physical appearance communicates Boyd’s standard of professional service and quality.
The Company’s need to maintain its facilities and upgrade or replace equipment to meet increased complexity of newer
vehicles, signage, computers, software and vehicles forms part of the annual cash requirements of the business. The
Company manages these expenditures by annually reviewing and determining its capital budget needs and then authorizing
major expenditures throughout the year based upon individual business cases. Excluding expenditures related to network
technology upgrades and acquisition and development, the Company spent approximately $57.8 million, or 2.0% of sales on
capital expenditures, compared to $33.6 million or 1.4% of sales during the same period of 2022. During 2023, incremental
capital expenditures were incurred relative to the expected range for capital expenditures as a percentage of sales for 2023.
These capital expenditures included non-routine replacements and repairs. During 2023, the Company spent approximately
$1.4 million on network technology upgrades.
During 2024, the Company plans to make cash capital expenditures, excluding those related to acquisition and development
of new locations, within the range of 1.8% and 2.0% of sales. In addition to these capital expenditures, the Company plans to
invest in network technology upgrades to further strengthen our technology and security infrastructure and prepare for
advanced technology needs in the future. The investment expected in 2024 is in the range of $14M to $17M, with similar
investments expected in 2025. These investments align with Boyd’s ESG sustainability roadmap to responsibly address data
privacy and cyber security.
30
FOURTH QUARTER
Sales for the three months ended December 31, 2023 totaled $740.0 million, an increase of $102.9 million or 16.2%
compared to the same period in 2022. Overall same-store sales excluding foreign exchange increased $55.1 million, or 8.7%
in the fourth quarter of 2023 when compared to the fourth quarter of 2022 and increased a further $0.1 million due to the
translation of same-store sales8 at a higher Canadian dollar exchange rate. The fourth quarter of 2023 recognized the same
number of selling and production days when compared to the same period of the prior year. Same-store sales benefited from
high levels of demand for services, as well as some increase in production capacity related to technician hiring, growth in the
Technician Development Program, as well as productivity improvement, although ongoing staffing constraints continued to
impact sales and service levels that could be achieved. Sales also increased based on higher repair costs due to increasing
vehicle complexity, increased scanning and calibration services, as well as general market inflation. Sales growth of $48.1
million was attributable to incremental sales generated from 142 new locations. The closure of under-performing facilities
accounted for a decrease in sales of $0.3 million. The quarterly same-store sales increase tapered from the levels experienced
during the period following the pandemic and pandemic related disruptions during the fourth quarter of 2023.
Gross Profit was $336.5 million, or 45.5% of sales in the fourth quarter of 2023 compared to $282.1 million or 44.3% in the
same period in 2022. Gross profit increased $54.4 million primarily as a result of increased sales due to same-store sales and
location growth when compared to the prior period. The gross margin percentage for the three months ended December 31,
2023 benefited from improved glass margins, higher parts margins and increased scanning and calibration. The margin for
the fourth quarter ended December 31, 2023 is within the normal range.
Operating expenses as a percentage of sales were 32.7% for the fourth quarter of 2023, which compared to 32.6% for the
same period in 2022. Operating expenses benefited from expense accrual reductions, as certain expense estimates were
firmed up at amounts that were lower than previously estimated and accrued. During 2023, Boyd added a record number of
new single locations. These new locations contributed sales but with a higher operating expense ratio.
Adjusted EBITDA8 for the fourth quarter of 2023 totaled $94.2 million or 12.7% of sales compared to Adjusted EBITDA8 of
$74.7 million or 11.7% of sales in the same period of the prior year. The $19.5 million increase was primarily the result of
higher sales levels and improved gross margins.
Current and Deferred Income Tax Expense for the fourth quarter of $8.0 million in 2023 compared to an expense of $5.2
million in 2022. Income tax expense was impacted by the recording of state-related adjustments related to the completion
and filing of the prior year U.S. tax returns, which increased income tax expense by approximately $1.2 million for the fourth
quarter of 2023. Permanent differences did not have a significant impact on the tax computed on accounting income.
Net Earnings for the fourth quarter was $19.1 million, or 2.6% of sales, or $0.89 per fully diluted share compared to net
earnings of $14.2 million, or 2.2% of sales, or $0.66 per fully diluted share for the same period in the prior year. The net
earnings amount in the fourth quarter of 2023 was impacted by acquisition and transaction costs of $1.1 million (net of tax).
After adjusting for fair value and other unusual items, Adjusted net earnings8 for the fourth quarter of 2023 was $20.0
million, or 2.7% of sales. This compares to Adjusted net earnings8 of $14.6 million or 2.3% of sales in the fourth quarter of
2022. Adjusted net earnings8 for the period was positively impacted by higher levels of sales and a higher gross margin
percentage.
LEGAL PROCEEDINGS
Neither BGSI, nor any of its subsidiaries are involved in any legal proceedings which are material in any respect.
RELATED PARTY TRANSACTIONS
In certain circumstances the Company has entered into property lease arrangements where an employee of the Company is
the landlord. In these instances, the Company assumes these property lease arrangements initially in connection with an
8 As defined in the non-GAAP financial measures and ratios section of the MD&A
31
acquisition. The property leases for these locations do not contain any significant non-standard terms and conditions that
would not normally exist in an arm’s length relationship, and BGSI has determined that the terms and conditions of the leases
are representative of fair market rent values.
The following are the lease payment amounts for facilities under lease with related parties (in thousands of U.S. dollars):
Landlord
Affiliated Person(s)
Gerber Building No. 1
Ptnrp
Timothy O'Day
Location
South Elgin, IL
Lease
Expires
2029
December 31,
2023
December 31,
2022
103
102
FINANCIAL INSTRUMENTS
In order to limit the variability of earnings due to the foreign exchange translation exposure on the income and expenses of
the Canadian operations, the Company may at times enter into foreign exchange contracts. These contracts are marked to
market monthly with unrealized gains and losses included in earnings. The Company did not have any such contracts in
place during 2023 or 2022.
Transactional foreign currency risk exists in limited circumstances where U.S. denominated cash is received in Canada. The
Company monitors U.S. denominated cash flows to be received in Canada and evaluates whether to use forward foreign
exchange contracts. No such foreign exchange contracts were used during 2023 or 2022.
CRITICAL ACCOUNTING ESTIMATES AND JUDGMENTS
Estimates and judgments are continually evaluated and are based on historical experience and other factors, including
expectations of future events that are believed to be reasonable under the circumstances.
Critical accounting estimates
BGSI makes estimates, including the assumptions applied therein, concerning the future. The resulting accounting estimates
will, by definition, seldom equal the related actual results. The estimates and assumptions that have a significant risk of
causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year are addressed
below.
Impairment of Goodwill and Intangible Assets
When testing goodwill and intangibles for impairment, BGSI uses a five year forward looking discounted cash flow of the
cash generating unit (“CGU”) or group of CGU’s to which the asset relate. An estimate of the recoverable amount is then
calculated as the higher of an asset’s fair value less costs to sell and value in use (being the present value of the expected
future cash flows of the relevant asset or CGU). An impairment loss is recognized for the amount by which the asset’s
carrying amount exceeds its recoverable amount. The methods used to value intangible assets and goodwill require critical
estimates to be made regarding the future cash flows and useful lives of the intangible assets. Goodwill and intangible asset
impairments, when recognized, are recorded as a separate charge to earnings, and could materially impact the operating
results of the Company for any particular accounting period.
Impairment of Other Long-lived Assets
BGSI assesses the recoverability of its long-lived assets, other than goodwill and intangibles, after considering the potential
impairment indicated by such factors as business and market trends, the Company’s ability to transfer the assets, future
prospects, current market value and other economic factors. In performing its review of recoverability, management estimates
the future cash flows expected to result from the use of the assets and their potential disposition. If the discounted sum of the
expected future cash flows is less than the carrying value of the assets generating those cash flows, an impairment loss would
32
be recognized based on the excess of the carrying amounts of the assets over their estimated recoverable value. The
underlying estimates for cash flows include estimates for future sales, gross margin rates and operating expenses. Changes
which may impact these estimates include, but are not limited to, business risks and uncertainties and economic conditions.
To the extent that management’s estimates are not realized, future assessments could result in impairment charges that may
have a material impact on the Company’s consolidated financial statements.
Business Combinations
Fair value of assets acquired and liabilities assumed in a business combination is estimated based on information available at
the date of acquisition and involves considerable judgment in determining the fair values assigned to property, plant and
equipment and intangible assets acquired and liabilities assumed on acquisition. The determination of these fair values
involves analysis including the use of discounted cash flows, estimated future margins, future growth rates, market rents and
capitalization rates. There is estimation in this analysis and actual results could differ from estimates.
Fair Value of Financial Instruments
BGSI has applied discounted cash flow methods to establish the fair value of certain financial assets and financial liabilities
recorded on the Consolidated Statement of Financial Position, as well as disclosed in the notes to the consolidated financial
statements. BGSI also establishes mark-to-market valuations for derivative instruments, which are assumed to represent the
current fair value of these instruments. These valuations rely on assumptions regarding interest and exchange rates as well as
other economic indicators, which at the time of establishing the fair value for disclosure, have a high degree of uncertainty.
Unrealized gains or losses on these derivative financial instruments may not be realized as markets change.
Income Taxes
BGSI is subject to income tax in several jurisdictions and estimates are used to determine the provision for income taxes.
During the ordinary course of business, there are transactions and calculations for which the ultimate tax determination is
uncertain. As a result, the Company recognizes tax liabilities based on estimates of whether additional taxes and interest will
be due. Uncertain tax liabilities may be recognized when, despite the Company’s belief that its tax return positions are
supportable, the Company believes that certain positions are likely to be challenged and may not be fully sustained upon
review by tax authorities. The Company believes that its accruals for tax liabilities are adequate for all open audit years based
on its assessment of many factors including past experience and interpretations of tax law. To the extent that the final tax
outcome of these matters is different than the amounts recorded, such differences will impact income tax expense in the
period in which such determination is made.
Critical judgments in applying the entity’s accounting policies
Deferred Tax Assets
The assessment of the probability of future taxable income in which deferred tax assets can be utilized is based on BGSI's
latest forecasts which are adjusted for significant non-taxable income and expenses and specific limits to the use of any
unused tax loss or credit. The tax rules in the numerous jurisdictions in which BGSI operates are also carefully taken into
consideration. If a positive forecast of taxable income indicates the probable use of a deferred tax asset, that deferred tax asset
is recognized in full. The recognition of deferred tax assets that are subject to certain legal or economic limits or uncertainties
is assessed individually by management based on the specific facts and circumstances. The judgments inherent in these
assessments are subject to uncertainty and if changed could materially affect the BGSI’s assessment of its ability to realize
the benefit of these tax assets.
CHANGES IN ACCOUNTING POLICIES
The IASB amendments to IAS 1 - Presentation of Financial Statements and IAS 8 - Changes in Accounting Policies, Changes
in Accounting Estimates and Errors require the disclosure of material accounting policy rather than significant accounting
policies, and help entities to distinguish between accounting policies and accounting estimates. The amendments are effective
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for the annual periods beginning on or after January 1, 2023 and do not materially impact the Company’s financial
disclosures.
The May 2023 IASB amendment to IAS 12 – Income Taxes requires entities to disclose information relating to income taxes
arising from implementation of Pillar Two Model Rules published by the Organization for Economic Co-Operation and
Development. The amendments are effective for annual reporting periods beginning on or after January 1, 2023. Based on the
Company’s assessment and the Pillar Two effective tax rates in all jurisdictions in which the Company is operating, the
Company does not expect a material exposure to Pillar Two top up taxes.
CERTIFICATION OF DISCLOSURE CONTROLS
Management’s responsibility for financial information contained in this Annual Report is described on page 51. In addition,
BGSI’s Audit Committee of the Board of Directors has reviewed this Annual Report, and the Board of Directors has
reviewed and approved this Annual Report prior to its release. BGSI is committed to providing timely, accurate and balanced
disclosure of all material information about BGSI and to providing fair and equal access to such information. As of
December 31, 2023, BGSI’s management evaluated the effectiveness of the design and operation of its disclosure controls
and procedures, as defined under the rules adopted by the Canadian securities regulatory authorities. Disclosure controls are
procedures designed to ensure that information required to be disclosed in reports filed with securities regulatory authorities
is recorded, processed, summarized and reported on a timely basis, and is accumulated and communicated to BGSI’s
management, including the CEO and the CFO, as appropriate, to allow timely decisions regarding required disclosure.
BGSI’s management, including the CEO and the CFO, does not expect that BGSI’s disclosure controls will prevent or detect
all misstatements due to error or fraud. Because of the inherent limitations in all control systems, an evaluation of controls
can provide only reasonable, not absolute assurance, that all control issues and instances of fraud or error, if any, within BGSI
have been detected. BGSI is continually evolving and enhancing its systems of controls and procedures. Based on the
evaluation of disclosure controls, the CEO and the CFO have concluded that, subject to the inherent limitations noted above,
BGSI’s disclosure controls are effective in ensuring that material information relating to BGSI is made known to
management on a timely basis, and is fairly presented in all material respects in this Annual Report.
CERTIFICATION ON INTERNAL CONTROL OVER FINANCIAL REPORTING
Management is responsible for the design and effectiveness of internal control over financial reporting in order to provide
reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external
purposes in accordance with Canadian generally accepted accounting principles which incorporates International Financial
Reporting Standards for publicly accountable enterprises. BGSI’s management, including the CEO and the CFO, does not
expect that BGSI’s internal control over financial reporting will prevent or detect all misstatements due to error or fraud.
Because of the inherent limitations in all control systems, an evaluation of controls can provide only reasonable, not absolute
assurance, that all control issues and instances of fraud or error, if any, within BGSI have been detected. BGSI is continually
evolving and enhancing its systems of internal controls over financial reporting. The CEO and CFO of BGSI have evaluated
the design and effectiveness of BGSI’s internal control over financial reporting as at the end of the period covered by the
annual filings and have concluded that, subject to the inherent limitations noted above, the controls are sufficient to provide
reasonable assurance.
On July 1, 2022, as part of the expansion of the Wow Operating Way practices to corporate business processes, the Company
transitioned to a new Enterprise Resource Management software system, which resulted in significant changes to the
Company’s business processes, procedures and internal controls, including the areas of order to cash, procurement to
payment and financial reporting. The implementation did not impact underlying operational systems. The Company followed
a robust system design and implementation process which involved experienced advisory resources. The Company replaced
multiple internal controls over financial reporting with similar internal controls.
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BUSINESS RISKS AND UNCERTAINTIES
The following information is a summary of certain risk factors relating to the business of BGSI and its subsidiaries, and is
qualified in its entirety by reference to, and must be read in conjunction with, the detailed information appearing elsewhere in
this Annual Report and the documents incorporated by reference herein.
BGSI and its subsidiaries are subject to certain risks inherent in the operation of the business. BGSI and its subsidiaries
manage risk and risk exposures through a combination of management oversight, insurance, systems of internal controls and
disclosures and sound operating policies and practices.
The Board of Directors has the responsibility to identify the principal risks of BGSI’s business and ensure that appropriate
systems are in place to manage these risks. The Audit Committee has the responsibility to discuss with management BGSI's
major financial risk exposures and the steps management has taken to monitor and control such exposures, including BGSI's
risk assessment and risk management policies. In order to support these responsibilities, management has a risk and
sustainability management committee which meets on an ongoing basis to evaluate and assess BGSI’s risks.
The process being followed by the risk and sustainability management committee is a systematic one which includes
identifying risks; analyzing the likelihood and consequence of risks; and then evaluating risks as to risk tolerance and control
effectiveness. This approach stratifies risks into four risk categories as follows:
Extreme Risks:
High Risks:
Moderate Risks:
Low Risks:
Immediate/ongoing action is required – involvement of senior management is required. Avoidance of
the item may be necessary if risk reduction techniques are insufficient to address the risk.
Risk item is significant and management responsibility should be specified and appropriate action
taken.
Managed by specific monitoring or response procedures. Additional risk mitigation techniques could
be considered if benefits exceed the cost.
Management by routine procedures. No further action is required at this time.
Risks can be reduced by limiting the likelihood or the consequence of a particular risk. This can be achieved by adjusting the
Company’s activities, implementing additional control/monitoring processes, or insuring/hedging against certain outcomes.
Residual risk remains after mitigation and control techniques are applied to an identified risk. Awareness of the residual risk
that BGSI ultimately accepts is a key benefit of the risk management process.
The following describes the risks that are most material to BGSI’s business; however, this is not a complete list of the
potential risks BGSI faces. There may be other risks that BGSI is not aware of, or risks that are not material today that could
become material in the future.
Employee Relations and Staffing
Boyd currently employs approximately 13,475 people, of which 1,541 are in Canada and 11,934 are in the U.S. The current
workforce is not unionized, except for approximately 50 employees located in the U.S. who are subject to collective
bargaining agreements. The collision repair industry is experiencing significant competition for talent, and, in particular, a
limited pool of qualified technicians and estimators. This is resulting in a shortage of qualified employees as well as ongoing
wage pressure, which is adversely impacting the volume and pace at which collision repair shops can fix damaged vehicles
and the Company’s financial results.
Attracting, training, developing and retaining employees at all levels of the organization are required to effectively manage
Boyd’s operations. The Company has rolled out various training, retention and recruitment initiatives to mitigate this risk.
Failure to attract, train, develop and retain employees at all levels of the organization could lead to a lack of production
capacity, knowledge, skills and experience required to effectively manage the business and could have a material adverse
effect on the Company’s business, financial condition and future performance.
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Acquisition and New Location Risk
The Company plans to continue to increase revenues and earnings through the acquisition and start-up of additional collision
repair facilities and other businesses. The Company follows a detailed process of due diligence and approvals to limit the
possibility of acquiring or building out a non-performing location or business. There can be no assurance that the Company
will be able to find suitable acquisition targets at acceptable pricing levels, or that the Company will be able to find and build
out locations without incurring cost overruns, or that the new locations will achieve sales and profitability levels to justify the
Company’s investment.
Boyd views the United States and Canada as having significant potential for further expansion of its business. There can be
no assurance that any market for the Company’s services and products will develop either at the local, regional or national
level. Economic instability, laws and regulations, increasing acquisition valuations and the presence of competition in all or
certain jurisdictions may limit the Company’s ability to successfully expand operations.
The Company has grown rapidly through multi-location acquisitions as well as single location growth opportunities and new
location development. Rapid growth can put a strain on managerial, operational, financial, human and other resources. Risks
related to rapid growth include administrative and operational challenges such as the management of an expanded number of
locations, the assimilation of financial reporting systems, technology and other systems of acquired companies, increased
pressure on senior management and increased demand on systems and internal controls. The ability of the Company to
manage its operations and expansion effectively depends on the continued development and implementation of plans, systems
and controls that meet its operational, financial and management needs. If Boyd is unable to continue to develop and
implement these plans, systems or controls or otherwise manage its operations and growth effectively, the Company will be
unable to maintain or increase margins or achieve sustained profitability, and the business could be harmed.
A key element of the Company’s strategy is to successfully integrate and manage new locations in order to sustain and
enhance profitability. There can be no assurance that the Company will be able to profitably integrate and manage additional
locations. Successful integration and management can depend upon a number of factors, including the ability to establish,
maintain and grow DRP relationships, the ability to attract, retain and motivate certain key management and staff,
establishing, retaining and leveraging client and supplier relationships and implementing standardized procedures and best
practices. In the event that new location growth cannot be successfully integrated into Boyd’s operations or performs below
expectations, the business could be materially and adversely affected.
To the extent that the prior owners of businesses acquired by Boyd failed to comply with or otherwise violated applicable
laws, the Company, as the successor owner, may be financially responsible for these violations and any associated
undisclosed liability. The Company seeks, through systematic investigation and due diligence, and through indemnification
by former owners, to minimize the risk of material undisclosed liabilities associated with acquisitions. The discovery of any
material liabilities, including but not limited to tax, legal and environmental liabilities, could have a material adverse effect on
the Company’s business, financial condition and future prospects.
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Operational Performance
In order to compete in the marketplace, the Company must consistently meet the operational performance metrics expected
by its insurance company clients and its customers. Failing to deliver on metrics such as cycle time, quality of repair,
customer satisfaction and cost of repair can, over time, result in reductions to pricing, repair volumes, or both. The Company
has implemented processes as well as measuring and monitoring systems to assist it in delivering on these key metrics.
However, there can be no assurance that the Company will be able to continue to deliver on these metrics or that the metrics
themselves will not change in the future.
The Company’s principal source of funds is cash generated from operations. Fluctuations in required capital expenditures,
the need to maintain productive capacity, required funding to meet growth targets, and debt repayments expected to be
funded by cash flows generated from operations may potentially impact the amount of cash available for dividends to be
declared and paid by the Company or its subsidiaries in the future.
Brand Management and Reputation
The Company’s success is impacted by its ability to protect, maintain and enhance the value of its brands and reputation.
Brand value and reputation can be damaged by isolated incidents, particularly if the incident receives considerable publicity
or if it draws litigation. Incidents may occur as a result of events beyond the Company’s control or may be isolated to actions
that occur in one particular location. Demand for the Company’s services could diminish significantly if an incident or other
matter damages its brand or erodes the confidence of its insurance company clients or directly with the vehicle owners
themselves. Social media has increased the ability for individuals to adversely affect the brand and reputation of the
Company. There can be no assurance that past or future incidents will not negatively affect the Company’s brand or
reputation.
Market Environment Change
The collision repair industry is subject to continual change in terms of regulations, repair processes and equipment,
technology and changes in the strategic direction of clients, suppliers and competitors. The Company endeavors to stay
abreast of developments and preferences in the industry and make strategic decisions to manage these changes and potential
disruptions to the traditional business model. In certain situations, the Company is involved in leading change by anticipating
or developing new methods to address changing market needs. The Company however, may not be able to correctly
anticipate the need for change, may not effectively implement changes, or may be required to increase spending on capital
equipment to maintain or improve its relative position with competitors. There can be no assurance that market environment
changes will not occur that could negatively affect the financial performance of the Company.
Reliance on Technology
As is the case with most businesses in today’s environment, there is a risk associated with Boyd’s reliance on computerized
operational and reporting systems. Boyd makes reasonable efforts to ensure that back-up systems and redundancies are in
place and functioning appropriately. Boyd has disaster recovery programs to protect against significant system failures.
Although a computer system failure would not be expected to critically damage the Company in the long term, there can be
no assurance that a computer system crash or like event would not have a material impact on its financial results.
Reliance on technology in order to gain or maintain competitive advantage is becoming more significant and therefore the
Company is faced with determining the appropriate level of investment in new technology in order to be competitive. There
can be no assurance that the Company will correctly identify or successfully implement the appropriate technologies for its
operations. In addition, there is a risk that third party provided systems are unable to meet business needs, emerging
requirements or provide support of their product, which could adversely impact Boyd’s performance.
On July 1, 2022, as part of the expansion of the Wow Operating Way practices to corporate business processes, the Company
transitioned to a new Enterprise Resource Management software system, which resulted in significant changes to the
Company’s business processes, procedures and internal controls, including the areas of order to cash, procurement to
payment and financial reporting. The implementation did not impact underlying operational systems. The Company followed
37
a robust system design and implementation process which involved experienced advisory resources. The Company replaced
multiple internal controls over financial reporting with similar internal controls.
Increased reliance on computerized operational and reporting systems also results in increased cyber security risk, including
potential unauthorized access to customer, supplier and employee sensitive information, corruption or loss of data and release
of sensitive or confidential information. Disruptions due to cyber security incidents could adversely affect the business,
results of operations and financial condition of the Company. Cyber security incidents could result in operational delays,
disruption to work flow and reputational harm. There can be no assurance that Boyd will be able to anticipate, prevent or
mitigate rapidly evolving types of cyber-attacks.
Supply Chain Risk
The Company requires access to parts, materials and paint in order to complete repairs. Disruptive events can negatively
impact supply chains, which can adversely impact Boyd’s ability to complete repairs. This may result in increased repair
cycle time, high levels of work-in-process and decreased margins, and could adversely impact the Company’s financial
results.
Certain of the Company’s suppliers operate in unionized environments, where their workers are subject to collective
bargaining agreements. A prolonged strike at a supplier could adversely impact Boyd’s ability to complete repairs. It is
possible that a prolonged strike could disrupt the Company’s supply chain, which could have a material impact on the
Company’s financial results.
The Company sources certain parts and materials from overseas vendors. Global issues, such as outbreaks and the spread of
contagious diseases, political instability, war or other disruptive events can negatively impact global supply chains, which
could adversely impact Boyd’s ability to complete repairs. It is possible that global issues could further disrupt the
Company’s supply chain, which could have a material impact on the Company’s financial results.
Margin Pressure and Sales Mix Changes
The Company’s costs to repair vehicles, including the cost of labor, parts and materials are market driven and can fluctuate.
The collision repair industry is experiencing significant competition for talent, and, in particular, a limited pool of qualified
technicians and estimators. This has resulted in a shortage of qualified employees as well as wage pressure which has
adversely impact the Company’s financial results.
The Company’s margin is also impacted by the mix of collision repair, retail glass and glass network sales, scanning and
calibration, as well as the mix of parts, labor and materials within each business area. There can be no assurance that changes
to sales mix will not occur that could negatively impact the financial performance of the Company.
The Company currently makes its own part sourcing decisions for parts used in the provision of vehicle repair services. The
Company’s clients could, in the future, decide to source products directly, impose the use of certain parts suppliers on the
Company or otherwise change the parts sourcing process. Such a decision could have an adverse effect on the Company’s
margin.
Pandemic Risk and Economic Downturn
Historically the collision repair industry has proven to be resilient to typical economic downturns along with the
accompanying unemployment, and while the Company works to mitigate the effect of economic downturn on its operations,
economic conditions, which are beyond the Company’s control, could lead to a decrease in accident repair claims volumes
due to fewer miles driven, less traffic congestion, or due to vehicle owners being less inclined to have their vehicles repaired.
It is difficult to predict the severity and the duration of any decrease in claims volumes resulting from an economic downturn
and the accompanying unemployment and what effect it may have on the collision repair industry, in general, and the
financial performance of the Company in particular. There can be no assurance that an economic downturn would not
negatively affect the financial performance of the Company.
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A local, regional, national or international outbreak of a contagious disease, such as the COVID-19 coronavirus, Middle East
Respiratory Syndrome, Severe Acute Respiratory Syndrome, H1N1 influenza virus, avian flu or any other similar illness,
could decrease the willingness of the general population to travel or customers to patronize the Company’s facilities, cause
shortages of employees to staff the Company’s facilities, interrupt supplies from third parties upon which the Company relies,
result in governmental regulation adversely impacting the Company’s business and otherwise have a material adverse effect
on the Company’s business, financial condition and results of operations.
Changes in Client Relationships
A high percentage of the Company’s revenues are derived from insurance companies. Over the past 25+ years, many private
insurance companies have implemented customer referral arrangements known as Direct Repair Programs (DRP’s) with
collision repair operators who have been recognized as consistent high quality, performance based repairers in the industry.
The Company’s ability to continue to grow its business, as well as maintain existing business volume and pricing, is largely
reliant on its ability to maintain these DRP relationships. The Company continues to develop and monitor these relationships
through ongoing measurement of the success factors considered critical by insurance clients. The loss of any existing
material DRP relationship, or a material component of a significant DRP relationship, could have a material adverse effect on
Boyd’s operations and business prospects. Of the top five insurance companies that the Company deals with, which in
aggregate account for approximately 53% (2022 – 54%) of total sales, one insurance company represents approximately 19%
(2022 – 18%) of the Company’s total sales, while a second insurance company represents approximately 11% (2022 – 11%).
DRP relationships are governed by agreements that are usually cancellable upon short notice. These relationships can change
quickly, both in terms of pricing and volumes, depending upon collision repair shop performance, cycle time, cost of repair,
customer satisfaction, competition, insurance company management, program changes and general economic activity. To
mitigate this risk, management fosters close working relationships with its insurance company clients and customers and the
Company continually seeks to diversify and grow its client base both in Canada and the U.S. There can be no assurance that
relationships with insurance company clients will not change in the future, which could impair Boyd’s revenues and/or
margins, and result in a material adverse effect on the Company’s business.
Decline in Number of Insurance Claims
The automobile collision repair industry is dependent on the number of accidents which occur and, for the most part, become
repairable insurance claims. The volume of accidents and related insurance claims can be significantly impacted by
technological disruption and changes in technology such as ride sharing, collision avoidance systems, driverless vehicles and
other safety improvements made to vehicles. Other changes which have and can continue to affect insurance claim volumes
include, but are not limited to, weather, general economic conditions, unemployment rates, changing demographics, vehicle
miles driven, new vehicle production, insurance policy deductibles and auto insurance premiums. In addition, repairable
claims volumes have been and can continue to be impacted by an increased number of non-repairable claims or total loss.
There can be no assurance that a continued decline in insurance claims will not occur, which could reduce Boyd’s revenues
and result in a material adverse effect on the Company’s business.
Environmental, Health and Safety Risk
The nature of the collision repair business means that hazardous substances must be used, which could cause damage to the
environment or individuals if not handled properly. The Company’s environmental protection policy requires environmental
site assessments to be performed on all business locations prior to acquisition, start-up or relocation so that any existing or
potential environmental situations can be remedied or otherwise appropriately addressed. It is also Boyd’s practice to secure
environmental indemnification from landlords and former owners of acquired collision repair businesses, where such
indemnification is available. Boyd also engages a private environmental consulting firm to perform regular compliance
reviews to ensure that the Company’s environmental and health and safety policies are followed.
To date, the Company has not encountered any environmental protection requirements or issues which would be expected to
have a material financial or operational effect on its current business and it is not aware of any material environmental issues
that could have a material impact on future results or prospects. No assurance can be given, however, that the prior activities
of Boyd, or its predecessors, or the activities of a prior owner or lessee, have not created a material environmental problem or
39
that future uses or evolving regulations will not result in the imposition of material environmental, health or safety liability
upon Boyd.
The outbreak of a contagious illness, such as the recent COVID-19 pandemic, could require the Company to develop and
execute revised operating procedures intended to mitigate safety and health risks in the work environment. However, there
can be no assurance that the enhanced protocols put in place will protect against an outbreak that could result in lost time and
negatively affect the financial performance of the Company.
Climate Change and Weather Conditions
Climate change is exacerbated in part by the burning of fossil fuels in order to generate electricity for consumers and
industry. Greenhouse gasses from fossil fuels is leading to climate change and global warming, which is leading to increased
frequency and severity of natural disasters and extreme weather condition events. The collision repair industry is not
particularly carbon intensive. The business is focused on the collision repair industry and as such its primary product is
providing a service. In providing this service, major inputs include replacement parts, water-based paint, skilled labor, and
energy to run spray booths, compressors, lighting, HVAC and other equipment. The industry is highly fragmented with
many independent owner operators who are not able to operate at scale. There are efforts to consolidate the industry and the
Company is a leader in this effort. By doing so, the industry can operate more efficiently and have the central coordination
and capital to invest in sustainability areas to reduce the impact the industry has on the environment.
Transitioning to a low carbon environment and sustainable business model will require additional investments in the long-
term. Capital investments in energy saving or renewable energy technologies to operate the shop, can reduce or offset the
contribution to carbon emissions that the Company currently emits. Transitioning the various vehicles used by business to
electric instead of internal combustion engine based is another action that can be taken by the Company to reduce carbon
emissions. Investments could be necessary for sensors and other systems to manage electricity usage or identify future
opportunities. Facility management and landscape management are areas of opportunity to improve the impact Boyd’s
locations have on global warming.
The primary climate related risks for the business relate to the expected increase in extreme weather events, such as blizzards,
hurricanes, torrential rain, and tornadoes. These events can cause physical damage to shops or hinder Boyd’s ability to
process work and also tend to result in higher damage levels that result in more vehicles being non-repairable. Extreme
weather can also slow or halt delivery of parts and in some cases prevent employees from attending work, which slows down
cycle-time and therefore sales.
A number of initiatives related to climate change can benefit the Company. For example investing in LED lighting improves
the working conditions for technicians and can improve the quality of the work they do, as well as lowering operating costs
and reducing emissions. Continuous improvement and efficiency gains can improve quality and reduce repair cycle time,
causing less waste, higher customer satisfaction and generating higher sales with the same level of inputs. A greater focus on
repairing damaged parts as opposed to replacing those parts reduces waste and in some cases can improve profitability.
Alignment with vehicle owner, insurance company and original equipment manufacturer objectives improves Boyd’s
customer relationships and demonstrates an ability to align and partner with these stakeholders.
There is good alignment between climate change initiatives and the Company’s strategy. Core strategies of operational
excellence, expense management and optimizing the business as well as new location and acquisition growth have overlap
with sustainability. Being efficient, reducing waste and bringing corporate resources and investment to a fragmented industry
supports a long-term alignment with sustainability. Environment, social and governance objectives are being integrated into
the Company’s strategic projects. There is often a dimension of each business initiative that relates to sustainability. Boyd is
committed to identifying those dimensions and bringing awareness throughout the company so that business objectives
naturally contribute to our sustainability goals, which have been outlined in Boyd’s Environmental, Social and Governance
Report, which is available on the Boyd website at www.boydgroup.com/sustainability.
The Board is investing more time on sustainability issues and has assigned the oversight responsibility for sustainability,
including climate change risk management and disclosure to the Governance & Sustainability Committee. The topic is a
standing agenda item with internal metrics and reporting being developed. Management has a Risk and Sustainability
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Committee tasked with developing sustainability objectives and processes for the company. Its current mandate is to work
with the various operating groups to identify the key sustainability metrics for future reporting and target setting. These key
metrics and targets will be focused on the priority areas defined for each of the environmental, social and governance pillars
that have been outlined in Boyd’s Environmental, Social and Governance Report.
The effect of global warming and its impact on weather conditions may reduce collision repair volume and represent an
element of risk to the Company’s ability to maintain sales. Historically, extremely mild winters and dry weather conditions
have had a negative impact on collision repair sales volumes. Natural disasters resulting in business interruption, or supply
chain interruption could also negatively impact the Company’s operations. Even with market share gains, weather-related
decline in market size can result in sales declines which could have a material impact on the Company’s business. Business
interruption due to natural disasters and extreme weather condition events, including supply chain interruption, may result in
temporary store closures or limit production volume and could adversely impact Boyd’s ability to complete repairs, which
could have a material adverse effect on the Company’s business.
Competition
The collision repair industry in North America, estimated at almost $47.6 billion U.S. is very competitive. The main
competitive factors are cost of repair, cycle time, quality, customer satisfaction and adherence to various insurance company
processes and performance requirements. There can be no assurance that Boyd’s competitors will not achieve greater market
acceptance due to performance or other factors.
Although competition exists mainly on a regional basis, Boyd competes with a small number of other multi-location collision
repair operators in multiple markets in which it operates.
Given these industry characteristics, existing or new competitors, including other automotive-related businesses, may become
significantly larger and have greater financial and marketing resources than Boyd. Competitors may compete with Boyd in
rendering services in the markets in which Boyd currently operates and also in seeking existing facilities to acquire, or new
locations to open, in markets in which Boyd desires to expand. There can be no assurance that the Company will be able to
maintain or achieve its desired market share.
Access to Capital
The Company grows, in part, through acquisition or start-up of collision and glass repair and replacement businesses. There
can be no assurance that Boyd will have sufficient capital resources available to implement its growth strategy. Inability to
raise new capital, in the form of debt or equity, could limit Boyd’s future growth through acquisition or start-up.
The Company will endeavor, through a variety of strategies, to ensure in advance that it has sufficient capital for growth.
Potential sources of capital that the Company has been successful at accessing in the past include public and private equity
placements, convertible debt offerings, using equity securities to directly pay for a portion of acquisitions, capital available
through strategic alliances with trading partners, lease financing, seller financing and both senior and subordinate debt
facilities or by deferring possible future purchase price payments using contingent consideration and call or put options.
There can be no assurance that the Company will be successful in accessing these or other sources of capital in the future.
The Company and its subsidiaries use financial leverage through the use of debt, which have debt service obligations. The
Company’s ability to refinance or to make scheduled payments of interest or principal on its indebtedness will depend on its
future operating performance and cash flow, which are subject to prevailing economic conditions, prevailing interest rates,
and financial, competitive, business and other factors, many of which are beyond its control.
The Company’s revolving credit facilities contain restrictive covenants that limit the discretion of the Company’s
management and the ability of the Company to incur additional indebtedness, to make acquisitions of collision repair
businesses, to create liens or other encumbrances, to pay dividends, to redeem any equity or debt, or to make investments,
capital expenditures, loans or guarantees and to sell or otherwise dispose of assets and merge or consolidate with another
entity. In addition, the revolving credit facilities contain a number of financial covenants that require BGSI and its
subsidiaries to meet certain financial ratios and financial condition tests. A failure to comply with the obligations under these
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credit facilities could result in an event of default, which, if not cured or waived, could permit acceleration of the relevant
indebtedness. If the indebtedness were to be accelerated, there can be no assurance that the assets of the Company and its
subsidiaries would be sufficient to repay the indebtedness in full. There can also be no assurance that the Company will be
able to refinance the credit facilities as and when they mature. The revolving credit facility is secured by the assets of the
Company.
Dependence on Key Personnel
The success of the Company is dependent on the services of a number of members of management. The experience and
talent of these individuals is a significant factor in Boyd’s continued success and growth. The loss of one or more of these
individuals could have a material adverse effect on the Company’s business operations and prospects. The Company has
entered into management agreements with key members of management and succession plans are in place for key executive
positions, in order to mitigate this risk.
Tax Position Risk
BGSI and its subsidiaries account for income tax positions in accordance with accounting standards for income taxes, which
require that the Company recognize in the financial statements, the impact of a tax position, if that position is more likely
than not of being sustained on examination by taxation authorities, based on the technical merits of the position.
Inherent risks and uncertainties can arise over tax positions taken, or expected to be taken, with respect to matters including
but not limited to acquisitions, transfer pricing, inter-company charges and allocations, financing charges, fees, related party
transactions, tax credits, tax based incentives and stock based transactions. In addition, there are inherent risks and
uncertainties with respect to government assistance received through various programs developed to support the business
during the economic downturn brought about by the COVID-19 pandemic. Management uses tax experts to assist in
correctly applying and accounting for tax and government assistance program rules, however there can be no assurance that a
position taken will not be challenged by the taxation authorities that could result in an unexpected material financial
obligation.
Expenses incurred by BGSI and its subsidiaries are only deductible to the extent they are reasonable. There can be no
assurance that the taxation authorities will not challenge the reasonableness of certain expenses. If such a challenge were
successful, it may materially and adversely affect the financial results of BGSI and its subsidiaries.
BGSI’s shares are qualified investments for a Registered Plan under the Tax Act as the Shares are listed on a “designated
stock exchange” (as defined in the Tax Act).
There can be no assurance that additional changes to the taxation of corporations or changes to other government laws, rules
and regulations, either in Canada or the U.S., will not be undertaken which could have a material adverse effect on BGSI’s
share price and business. There can be no assurance BGSI will benefit from these rules, that the rules will not change in the
future or that BGSI will avail itself of them.
Corporate Governance
Securities law imposes statutory civil liability for misrepresentations in continuous disclosure documents including failure to
make timely disclosure. Investors have a right of action if they are harmed by a misrepresentation in an issuer’s disclosure
document or in a public oral statement relating to an issuer, or the failure of an issuer to make timely disclosure of a material
change. Potentially liable parties include the issuer, each officer, and each Director of the issuer who authorizes, permits or
acquiesces in the release of the document containing a misrepresentation, the making of the public statement containing a
misrepresentation or in the failure to make a timely disclosure.
Under the Ontario Securities Act, section 138.4(6), a due diligence defense is available. The due diligence defense requires
the following items to be addressed:
42
•
•
•
the issuer must have a system designed to ensure the issuer is meeting its disclosure obligations;
the defendant must have conducted a reasonable investigation to support reliance on the system; and
defendants must have no reasonable grounds to believe that the document or a public oral statement contained a
misrepresentation or that the failure to make the required disclosure would occur.
BGSI is keenly aware of the significance of these laws and the interrelationships between civil liability, disclosure controls
and good governance. BGSI has adopted policies, practices and processes to reduce the risk of a governance or control
breakdown. A statement of BGSI’s governance practices is included in its most recent information circular which can be
found at www.sedarplus.com. Although BGSI believes it follows good corporate governance practices, there can be no
assurance that these practices will eliminate or mitigate the impact of a material lawsuit in this area.
The area of governance is growing to encompass not only traditional governance matters, but also environmental and social
matters. This area is often referred to as Environmental, Social and Governance, or “ESG”. Increased awareness and
attention by investors to ESG matters means that the Company needs to become more transparent in developing and reporting
on ESG initiatives and increase or add ESG initiatives where there are significant gaps. BGSI is developing and enhancing
ESG reporting and initiatives. Boyd publishes an ESG report, which complements previously adopted policies on reporting
and anti-retaliation, occupational health and safety, non-discrimination and anti-harassment, human rights, diversity, code of
business conduct and ethics, business partner code of conduct and anti-corruption. These policies, along with the ESG
Report, are available on the Boyd website at www.boydgroup.com/sustainability.
Increased Government Regulation and Tax Risk
BGSI and its subsidiaries are subject to various federal, provincial, state and local laws, regulations and taxation authorities.
Various federal, provincial, state and local agencies as well as other governmental departments administer such laws,
regulations and their related rules and policies. New laws governing BGSI or its business could be enacted or changes or
amendments to existing laws and regulations could be enacted which could have a significant impact on Boyd. For example,
privacy legislation continues to evolve rapidly and tariff changes are being introduced with greater frequency. BGSI utilizes
the services of professional advisors in the areas of taxation, environmental, health and safety, labor and general business law
to mitigate the risk of non-compliance. Failure to comply with the applicable laws, regulations or tax changes may subject
BGSI to civil or regulatory proceedings and no assurance can be given that this will not have a material impact on financial
results.
A number of jurisdictions in which the Company operates have regulations to limit emissions and pollutants. The Company
has adapted its processes in an effort to comply with these regulations. Although to date, there have been no negative
consequences as a result of these regulations, there can be no assurance that these regulations will not have a material adverse
impact on BGSI’s business or financial results. Future emission or pollutant regulation compliance requirements may have a
material adverse impact on BGSI’s business or financial results.
Fluctuations in Operating Results and Seasonality
The Company’s operating results have been and are expected to continue to be subject to quarterly fluctuations due to a
variety of factors including changes in customer purchasing patterns, pricing paid to insurance companies, general operating
effectiveness, automobile technologies, general and regional economic downturns, unemployment rates, employee vacation
timing and weather conditions. These factors can affect Boyd’s financial results.
Risk of Litigation
BGSI and its subsidiaries could become involved in various legal actions in the ordinary course of business. Litigation loss
accruals may be established if it becomes probable that BGSI will incur an expense and the amount can be reasonably
estimated. BGSI’s management and internal and external experts are involved in assessing the probability of litigation loss
and in estimating any amounts involved. Changes in these assessments may lead to changes in recorded litigation loss
accruals. Claims are reviewed on a case by case basis, taking into consideration all information available to BGSI.
43
The actual costs of resolving claims could be substantially higher or lower than the amounts accrued. In certain cases, legal
claims may be covered under BGSI’s various insurance policies.
Execution on New Strategies
New initiatives are introduced from time to time in order to grow Boyd’s business. Initiatives such as entering new markets,
introducing and improving related products and services, or identifying new strategies to capture additional market share
have the potential to be accretive to the Company’s business when the opportunity is accurately identified and executed.
There can be no assurance that the Company identifies new strategies that are accretive to the business or that it is successful
in implementing such initiatives.
Insurance Risk
BGSI insures its property, plant and equipment, including vehicles, through insurance policies with insurance carriers located
in Canada and the U.S. Included within these policies is insurance protection against property loss and general liability.
BGSI also insures its directors and officers against liabilities arising from errors, omissions and wrongful acts. Management
uses its knowledge, as well as the knowledge of experienced brokers, to ensure that insurable risks are insured appropriately
under terms and conditions that would protect BGSI and its subsidiaries from losses. There can be no assurance that all perils
would be fully covered or that a material loss would be recoverable under such insurance policies.
Interest Rates
The Company occasionally fixes the interest rate on its debt using interest rate swap contracts or other provisions available in
its debt facilities. There can be no guarantee that interest rate swaps or other contract terms that effectively turn variable rate
debt into fixed rates will be an effective hedge against long-term interest rate fluctuations.
The Company has not fixed interest rates within its revolving credit facility. There can be no assurance that interest rates
either in Canada or the U.S. will not increase in the future, which could result in a material adverse effect on the Company’s
business.
U.S. Health Care Costs and Workers Compensation Claims
BGSI accrues for the estimated amount of U.S. health care claims and workers compensation claims that may have occurred
but were not reported at the end of the reporting period under its health care and workers compensation plans. The accruals
are based upon the Company’s knowledge of current claims as well as third party estimates derived from past experience.
Significant claim occurrences which remain unreported for a number of months could materially impact this accrual. In
addition, as U.S health care costs increase, there can be no assurance given that the Company can continue to offer health
care insurance to its employees at a reasonable cost.
Foreign Currency Risk
A substantial portion of Boyd’s revenue and cash flow are now, and are expected to continue to be, generated in U.S. dollars.
Fluctuations in the exchange rates between the Canadian dollar and the U.S. currency may have a material adverse effect on
BGSI’s share price, which is denominated and trades in Canadian dollars as well as BGSI’s ability to make future Canadian
dollar cash dividends.
Capital Expenditures
The business of the Company requires ongoing capital maintenance. Moreover, opportunities may arise for capital upgrades
providing returns or cost savings that may not be realized in the immediate future, but rather over several years. As vehicle
technology advances and market needs change, the capital intensity of the industry is changing, requiring expenditures in
excess of historical capital maintenance levels. To the extent that capital expenditures are in excess of amounts budgeted, the
amounts of cash available for dividends may decrease.
44
Low Capture Rates
Sales growth can be enhanced if the Company is effective at booking repair orders for all sales opportunities that are
identified. The Company is exposed to missed jobs when capacity is constrained and to the extent that employees are
ineffective at capturing all sales opportunities. Measurement of capture rates, management support and training are methods
that are employed to enhance capture rates. Efforts to increase capacity are limited by availability of qualified labor. It is
possible that the Company may not be able to capture sales effectively enough to maximize sales.
Energy Costs
The Company is exposed to fluctuations in the price of energy. These costs not only impact the costs associated with
occupying and operating collision repair facilities but may also affect costs of parts and materials used in the repair process as
well as miles driven by automobile owners. There can be no assurance that escalating costs which cannot be offset by energy
conservation practices, price increases to clients and customers or productivity gains, would not result in materially lower
operating margins. As well, there can be no assurance that escalating energy costs will not materially reduce automobile
miles driven and in turn reduce the number of collisions.
ADDITIONAL INFORMATION
BGSI’s shares trade on the Toronto Stock Exchange under the symbol TSX: BYD.TO. Additional information relating to the
BGSI is available on SEDAR+ (www.sedarplus.com) and the Company website (www.boydgroup.com).
45
FORM 52-109F1
CERTIFICATION OF ANNUAL FILINGS
FULL CERTIFICATE
I, Timothy O’Day, Chief Executive Officer, Boyd Group Services Inc., certify the following:
1. Review: I have reviewed the AIF, if any, annual financial statements and annual MD&A, including, for
greater certainty, all documents and information that are incorporated by reference in the AIF (together, the
“annual filings”) of Boyd Group Services Inc. (the “issuer”) for the financial year ended December 31,
2023.
2. No misrepresentations: Based on my knowledge, having exercised reasonable diligence, the annual filings
do not contain any untrue statement of a material fact or omit to state a material fact required to be stated or
that is necessary to make a statement not misleading in light of the circumstances under which it was made,
for the period covered by the annual filings.
3. Fair presentation: Based on my knowledge, having exercised reasonable diligence, the annual financial
statements together with other financial information included in the annual filings present fairly in all
material respects the financial condition, financial performance and cash flows of the issuer, as of the date
of and for the periods presented in the annual filings.
4. Responsibility: The issuer’s other certifying officer(s) and I are responsible for establishing and
maintaining disclosure controls and procedures (DC&P) and internal control over financial reporting
(ICFR), as those terms are defined in National Instrument 52-109 Certification of Disclosure in Issuers’
Annual and Interim Filings, for the issuer.
5. Design: Subject to the limitations, if any, described in paragraphs 5.2 and 5.3, the issuer’s other certifying
officer(s) and I have, as at the financial year end
a.
designed DC&P, or caused it to be designed under our supervision, to provide reasonable
assurance that
i.
ii.
material information relating to the issuer is made known to us by others, particularly
during the period in which the annual filings are being prepared; and
information required to be disclosed by the issuer in its annual filings, interim filings or
other reports filed or submitted by it under securities legislation is recorded, processed,
summarized and reported within the time periods specified in securities legislation; and
b.
designed ICFR, or caused it to be designed under our supervision, to provide reasonable assurance
regarding the reliability of financial reporting and the preparation of financial statements for
external purposes in accordance with the issuer’s GAAP.
5.1 Control framework: The control framework the issuer’s other certifying officer(s) and I used to design the
issuer’s ICFR is the Internal Control – Integrated Framework (COSO 2013 Framework), published by The
Committee of Sponsoring Organizations of the Treadway Commission.
5.2 ICFR – material weakness relating to design: N/A
5.3 Limitation on scope of design: N/A
46
6. Evaluation: The issuer’s other certifying officer(s) and I have
a.
b.
evaluated, or caused to be evaluated under our supervision, the effectiveness of the issuer’s DC&P
at the financial year end and the issuer has disclosed in its annual MD&A our conclusions about
the effectiveness of DC&P at the financial year end based on that evaluation; and
evaluated, or caused to be evaluated under our supervision, the effectiveness of the issuer’s ICFR
at the financial year end and the issuer has disclosed in its annual MD&A
i.
ii.
our conclusions about the effectiveness of ICFR at the financial year end based on that
evaluation; and
N/A
c. N/A
7. Reporting changes in ICFR: The issuer has disclosed in its annual MD&A any change in the issuer’s
ICFR that occurred during the period beginning on October 1, 2023 and ended on December 31, 2023 that
has materially affected, or is reasonably likely to materially affect, the issuer’s ICFR.
8. Reporting to the issuer’s auditors and board of directors or audit committee: The issuer’s other certifying
officer(s) and I have disclosed, based on our most recent evaluation of ICFR, to the issuer’s auditors, and
the board of directors or the audit committee of the board of directors any fraud that involves management
or other employees who have a significant role in the issuer’s ICFR.
Date: March 20, 2024
(signed)
Timothy O’Day
President & Chief Executive Officer
47
FORM 52-109F1
CERTIFICATION OF ANNUAL FILINGS
FULL CERTIFICATE
I, Jeff Murray, Chief Financial Officer, Boyd Group Services Inc., certify the following:
1. Review: I have reviewed the AIF, if any, annual financial statements and annual MD&A, including, for
greater certainty, all documents and information that are incorporated by reference in the AIF (together, the
“annual filings”) of Boyd Group Services Inc. (the “issuer”) for the financial year ended December 31,
2023.
2. No misrepresentations: Based on my knowledge, having exercised reasonable diligence, the annual filings
do not contain any untrue statement of a material fact or omit to state a material fact required to be stated or
that is necessary to make a statement not misleading in light of the circumstances under which it was made,
for the period covered by the annual filings.
3. Fair presentation: Based on my knowledge, having exercised reasonable diligence, the annual financial
statements together with other financial information included in the annual filings present fairly in all
material respects the financial condition, financial performance and cash flows of the issuer, as of the date
of and for the periods presented in the annual filings.
4. Responsibility: The issuer’s other certifying officer(s) and I are responsible for establishing and
maintaining disclosure controls and procedures (DC&P) and internal control over financial reporting
(ICFR), as those terms are defined in National Instrument 52-109 Certification of Disclosure in Issuers’
Annual and Interim Filings, for the issuer.
5. Design: Subject to the limitations, if any, described in paragraphs 5.2 and 5.3, the issuer’s other certifying
officer(s) and I have, as at the financial year end
a.
designed DC&P, or caused it to be designed under our supervision, to provide reasonable
assurance that
i.
ii.
material information relating to the issuer is made known to us by others, particularly
during the period in which the annual filings are being prepared; and
information required to be disclosed by the issuer in its annual filings, interim filings or
other reports filed or submitted by it under securities legislation is recorded, processed,
summarized and reported within the time periods specified in securities legislation; and
b.
designed ICFR, or caused it to be designed under our supervision, to provide reasonable assurance
regarding the reliability of financial reporting and the preparation of financial statements for
external purposes in accordance with the issuer’s GAAP.
5.1 Control framework: The control framework the issuer’s other certifying officer(s) and I used to design the
issuer’s ICFR is the Internal Control – Integrated Framework (COSO 2013 Framework), published by The
Committee of Sponsoring Organizations of the Treadway Commission.
5.2 ICFR – material weakness relating to design: N/A
5.3 Limitation on scope of design: N/A
48
6. Evaluation: The issuer’s other certifying officer(s) and I have
a.
b.
evaluated, or caused to be evaluated under our supervision, the effectiveness of the issuer’s DC&P
at the financial year end and the issuer has disclosed in its annual MD&A our conclusions about
the effectiveness of DC&P at the financial year end based on that evaluation; and
evaluated, or caused to be evaluated under our supervision, the effectiveness of the issuer’s ICFR
at the financial year end and the issuer has disclosed in its annual MD&A
i.
ii.
our conclusions about the effectiveness of ICFR at the financial year end based on that
evaluation; and
N/A
c. N/A
7. Reporting changes in ICFR: The issuer has disclosed in its annual MD&A any change in the issuer’s
ICFR that occurred during the period beginning on October 1, 2023 and ended on December 31, 2023 that
has materially affected, or is reasonably likely to materially affect, the issuer’s ICFR.
8. Reporting to the issuer’s auditors and board of directors or audit committee: The issuer’s other certifying
officer(s) and I have disclosed, based on our most recent evaluation of ICFR, to the issuer’s auditors, and
the board of directors or the audit committee of the board of directors any fraud that involves management
or other employees who have a significant role in the issuer’s ICFR.
Date: March 20, 2024
(signed)
Jeff Murray
Executive Vice President & Chief Financial Officer
49
BOYD GROUP SERVICES INC.
Consolidated Financial Statements
Year Ended December 31, 2023
50
MANAGEMENT’S RESPONSIBILITY FOR FINANCIAL REPORTING
These consolidated financial statements have been prepared by management in accordance with International
Financial Reporting Standards. Management is responsible for their integrity, objectivity and reliability, and for the
maintenance of financial and operating systems, which include effective controls, to provide reasonable assurance
that Boyd Group Services Inc.’s assets are safeguarded and that reliable financial information is produced.
The Board of Directors is responsible for ensuring that management fulfills its responsibilities for financial
reporting, disclosure control and internal control. The Board exercises these responsibilities through its Audit
Committee, all members of which are not involved in the daily activities of Boyd Group Services Inc. The Audit
Committee meets with management and, as necessary, with the independent auditors, Deloitte LLP, to satisfy itself
that management’s responsibilities are properly discharged and to review and report to the Board on the consolidated
financial statements.
In accordance with Canadian Generally Accepted Auditing Standards, the independent auditors conduct an
examination each year in order to express a professional opinion on the consolidated financial statements.
(signed)
(signed)
Timothy O’Day
President & Chief Executive Officer
Jeff Murray
Executive Vice President & Chief Financial Officer
Winnipeg, Manitoba
March 19, 2024
51
Deloitte LLP
360 Main Street
Suite 2300
Winnipeg MB R3C 3Z3
Canada
Tel: 1-204-942-0051
Fax: 1-204-947-9390
www.deloitte.ca
March 19, 2024
Independent Auditor’s Report
To the Shareholders and the Board of Directors of
Boyd Group Services Inc.
Opinion
We have audited the consolidated financial statements of Boyd Group Services Inc. (the "Company"), which comprise
the consolidated statements of financial position as at December 31, 2023 and 2022, and the consolidated statements
of income, comprehensive income, changes in equity and cash flows for the years ended December 31, 2023 and
2022, and notes to the consolidated financial statements, including a summary of material accounting policies
(collectively referred to as the "financial statements").
In our opinion, the accompanying financial statements present fairly, in all material respects, the financial position of
the Company as at December 31, 2023 and 2022, and its financial performance and its cash flows for the years ended
December 31, 2023 and 2022 in accordance with International Financial Reporting Standards ("IFRS").
Basis for Opinion
We conducted our audit in accordance with Canadian generally accepted auditing standards ("Canadian GAAS"). Our
responsibilities under those standards are further described in the Auditor’s Responsibilities for the Audit of the
Financial Statements section of our report. We are independent of the Company in accordance with the ethical
requirements that are relevant to our audit of the financial statements in Canada, and we have fulfilled our other
ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is
sufficient and appropriate to provide a basis for our opinion.
Key Audit Matters
A key audit matter is a matter that, in our professional judgment was of most significance in our audit of the
consolidated financial statements for the year ended December 31, 2023. This matter was addressed in the context of
our audit of the consolidated financial statements as a whole, and in forming our opinion thereon, and we do not
provide a separate opinion on this matter.
52
Boyd Group Services Inc.
March 19, 2024
Page 53
Goodwill and Intangible Assets — Canadian CGU— Refer to the Financial Statement Notes 3 and 11
Key Audit Matter Description
The Company’s evaluation of goodwill and intangible assets for impairment involves the comparison of the recoverable
amount of each cash generating unit (“CGU”) to their carrying value. The recoverable amount of a CGUs is determined
as the greater of the fair value less costs to sell and value in use. The Company used a discounted cash flow model to
determine the recoverable amounts of both the U.S. CGU and Canadian CGU, which required management to make
estimates and assumptions related to future cash flows, taxes, future acquisition growth, future capital expenditures,
terminal growth rate, and discount rate. As a result of the annual assessments of impairment of goodwill and
intangible assets for the U.S. CGU and Canadian CGU, management has determined that there was no impairment of
goodwill or intangible assets.
While there are several estimates and assumptions that are required to determine the recoverable amount of the
Canadian CGU, the estimates, and assumptions with the highest degree of subjectivity are future revenue and adjusted
EBITDA margins forecasts and the selection of the discount rate. Auditing these estimates and assumptions required a
high degree of auditor judgment and an increased extent of audit effort, including the involvement of fair value
specialists.
How the Key Audit Matter Was Addressed in the Audit
Our audit procedures related to the future revenue and adjusted EBITDA margins forecasts and the selection of the
discount rate used to determine the recoverable amount for the Canadian CGU included the following, among others:
• Evaluated management’s ability to accurately forecast future revenues and Adjusted EBITDA margins by
comparing actual results to management’s historical forecasts.
• Evaluated the reasonableness of the forecast of future revenues and adjusted EBITDA margins by comparing
the forecasts to:
o Historical revenues and operating margins.
o Known changes in the Company’s operations and its industry, which are expected to impact future
operating performance; and
Internal communications to management and the Board of Directors.
o
• With the assistance of fair value specialists, evaluated the reasonableness of the discount rate by testing the
source information underlying the determination of the discount rate, developing a range of independent
estimates, and comparing those to the discount rate selected by management.
Other Information
Management is responsible for the other information. The other information comprises:
• Management's Discussion and Analysis
• The information, other than the financial statements and our auditor’s report thereon, in the Annual Report.
Our opinion on the financial statements does not cover the other information and we do not and will not express any
form of assurance conclusion thereon. In connection with our audit of the financial statements, our responsibility is to
read the other information identified above and, in doing so, consider whether the other information is materially
inconsistent with the financial statements or our knowledge obtained in the audit, or otherwise appears to be
materially misstated.
53
Boyd Group Services Inc.
March 19, 2024
Page 54
We obtained Management’s Discussion and Analysis prior to the date of this auditor’s report. If, based on the work we
have performed on this other information, we conclude that there is a material misstatement of this other
information, we are required to report that fact in this auditor’s report. We have nothing to report in this regard.
The Annual Report is expected to be made available to us after the date of the auditor's report. If, based on the work
we will perform on this other information, we conclude that there is a material misstatement of this other information,
we are required to report that fact to those charged with governance.
Responsibilities of Management and Those Charged with Governance for the Financial
Statements
Management is responsible for the preparation and fair presentation of the financial statements in accordance with
IFRS, and for such internal control as management determines is necessary to enable the preparation of financial
statements that are free from material misstatement, whether due to fraud or error.
In preparing the financial statements, management is responsible for assessing the Company’s ability to continue as a
going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of
accounting unless management either intends to liquidate the Company or to cease operations, or has no realistic
alternative but to do so.
Those charged with governance are responsible for overseeing the Company's financial reporting process.
Auditor's Responsibilities for the Audit of the Financial Statements
Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from
material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinion.
Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with
Canadian GAAS will always detect a material misstatement when it exists. Misstatements can arise from fraud or error
and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the
economic decisions of users taken on the basis of these financial statements.
As part of an audit in accordance with Canadian GAAS, we exercise professional judgment and maintain professional
skepticism throughout the audit. We also:
• Identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error,
design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and
appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from
fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions,
misrepresentations, or the override of internal control.
• Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are
appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the
Company's internal control.
• Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and
related disclosures made by management.
54
Boyd Group Services Inc.
March 19, 2024
Page 55
• Conclude on the appropriateness of management’s use of the going concern basis of accounting and, based on the
audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast
significant doubt on the Company's ability to continue as a going concern. If we conclude that a material
uncertainty exists, we are required to draw attention in our auditor’s report to the related disclosures in the
financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the
audit evidence obtained up to the date of our auditor’s report. However, future events or conditions may cause the
Company to cease to continue as a going concern.
• Evaluate the overall presentation, structure and content of the financial statements, including the disclosures, and
whether the financial statements represent the underlying transactions and events in a manner that achieves fair
presentation.
• Obtain sufficient appropriate audit evidence regarding the financial information of the entities or business activities
within the Company to express an opinion on the financial statements. We are responsible for the direction,
supervision and performance of the group audit. We remain solely responsible for our audit opinion.
We communicate with those charged with governance regarding, among other matters, the planned scope and timing
of the audit and significant audit findings, including any significant deficiencies in internal control that we identify
during our audit.
We also provide those charged with governance with a statement that we have complied with relevant ethical
requirements regarding independence, and to communicate with them all relationships and other matters that may
reasonably be thought to bear on our independence, and where applicable, related safeguards.
From the matters communicated with those charged with governance, we determine those matters that were of most
significance in the audit of the consolidated financial statements of the current period and are therefore the key audit
matters. We describe these matters in our auditor's report unless law or regulation precludes public disclosure about
the matter or when, in extremely rare circumstances, we determine that a matter should not be communicated in our
report because the adverse consequences of doing so would reasonably be expected to outweigh the public interest
benefits of such communication.
The engagement partner on the audit resulting in this independent auditor’s report is Michael Boucher.
/s/ Deloitte LLP
Chartered Professional Accountants
Winnipeg, Manitoba
March 19, 2024
55
BOYD GROUP SERVICES INC.
CONSOLIDATED STATEMENTS OF FINANCIAL POSITION
As at December 31,
(thousands of U.S. dollars)
Assets
Current assets:
Cash
Accounts receivable
Income taxes recoverable
Inventory
Prepaid expenses
Property, plant and equipment
Right of use assets
Deferred income tax asset
Intangible assets
Goodwill
Other long-term assets
Liabilities and Equity
Current liabilities:
Accounts payable and accrued liabilities
Dividends payable
Current portion of long-term debt
Current portion of lease liabilities
Long-term debt
Lease liabilities
Deferred income tax liability
Unearned rebates
Equity
Accumulated other comprehensive earnings
Retained earnings
Shareholders’ capital
Contributed surplus
The accompanying notes are an integral part of these consolidated financial statements
Approved by the Board:
TIMOTHY O’DAY
Director
56
2023
2022
Note
18
9
6
7
8
9
10
11
12
13
14
15
14
15
9
16
19
20
$
$
$
22,511 $
145,793
7,721
78,532
41,728
296,285
438,981
654,347
4,316
342,781
633,986
11,720
2,382,416 $
339,823 $
2,435
22,038
107,727
472,023
399,667
607,550
70,271
4,579
15,068
139,266
5,666
78,784
36,520
275,304
314,564
568,437
3,815
332,939
601,706
6,067
2,102,832
307,729
2,330
15,365
98,870
424,294
344,806
519,056
62,885
5,194
1,554,090
1,356,235
58,313
165,427
600,047
4,539
54,330
88,183
600,047
4,037
828,326
2,382,416 $
746,597
2,102,832
$
DAVID BROWN
Director
BOYD GROUP SERVICES INC.
CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY
(thousands of U.S. dollars except share amounts)
Balances - January 1, 2022
Stock option accretion
Other comprehensive loss
Net earnings
Comprehensive earnings
Dividends to shareholders
Balances - December 31, 2022
Stock option accretion
Other comprehensive earnings
Net earnings
Comprehensive earnings
Dividends to shareholders
Balance - December 31, 2023
Shareholders’ Capital
Shares
Amount
Contributed
Surplus
Accumulated
Other
Comprehensive
Earnings
Retained
Earnings
Total Equity
21,472,194 $
600,047 $
3,680 $
357
65,987 $
56,720 $
(11,657)
(11,657)
40,962
40,962
(9,499)
21,472,194 $
600,047 $
4,037 $
502
54,330 $
88,183 $
3,983
3,983
21,472,194 $
600,047 $
4,539 $
58,313 $
86,656
86,656
(9,412)
165,427 $
726,434
357
(11,657)
40,962
29,305
(9,499)
746,597
502
3,983
86,656
90,639
(9,412)
828,326
Note
20
13
20
13
The accompanying notes are an integral part of these consolidated financial statements
57
BOYD GROUP SERVICES INC.
CONSOLIDATED STATEMENTS OF EARNINGS
For the years ended December 31,
(thousands of U.S. dollars, except share and per share amounts)
2023
2022
Note
23
$
2,945,988 $
1,605,924
7
8
10
17
9
9
28
28
28
2,432,318
1,344,998
1,087,320
813,820
1,700
47,902
101,150
26,567
146
37,308
1,028,593
58,727
5,712
12,053
17,765
1,340,064
971,817
4,346
56,863
109,806
26,182
(189)
51,718
1,220,543
119,521
25,872
6,993
32,865
$
86,656 $
40,962
$
4.04 $
21,472,194
21,475,864
1.91
21,472,194
21,472,194
2023
2022
$
86,656 $
40,962
3,983
3,983
90,639 $
(11,657)
(11,657)
29,305
$
Sales
Cost of sales
Gross profit
Operating expenses
Acquisition and transaction costs
Depreciation of property, plant and equipment
Depreciation of right of use assets
Amortization of intangible assets
Fair value adjustments
Finance costs
Earnings before income taxes
Income tax expense
Current
Deferred
Net earnings
The accompanying notes are an integral part of these consolidated financial statements
Basic and diluted earnings per share
Basic number of shares outstanding
Diluted weighted average number of shares outstanding
BOYD GROUP SERVICES INC.
CONSOLIDATED STATEMENTS OF COMPREHENSIVE EARNINGS
For the years ended December 31,
(thousands of U.S. dollars)
Net earnings
Other comprehensive earnings
Items that may be reclassified subsequently to Consolidated Statements of Earnings
Statements of Earnings
Change in unrealized earnings on foreign currency translation (net of tax of $nil)
Other comprehensive earnings (loss)
Comprehensive earnings
The accompanying notes are an integral part of these consolidated financial statements
58
BOYD GROUP SERVICES INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
For the years ended December 31,
(thousands of U.S. dollars)
Cash flows from operating activities
Net earnings
Adjustments for
Fair value adjustments
Deferred income taxes
Finance costs
Amortization of intangible assets
Depreciation of property, plant and equipment
Depreciation of right of use assets
Other
Changes in non-cash working capital items
Cash flows used in financing activities
Increase in obligations under long-term debt
Repayment of long-term debt, principal
Repayment of obligations under property leases, principal
Repayment of obligations under vehicle and equipment leases, principal
Interest on long-term debt
Interest on property leases
Interest on vehicle and equipment leases
Dividends paid
Payment of financing costs
Cash flows used in investing activities
Proceeds on sale of equipment and software
Equipment purchases and facility improvements
Acquisition and development of businesses (net of cash acquired)
Software purchases and licensing
Increase in other long-term assets
Proceeds on sale / leaseback agreements
Effect of foreign exchange rate changes on cash
Net increase (decrease) in cash position
Cash, beginning of year
Cash, end of year
Income taxes paid
Interest paid
The accompanying notes are an integral part of these consolidated financial statements
59
2023
2022
Note
$
86,656 $
40,962
17
9
10
7
8
30
14
14
15
15
14
15
15
14
7
5
10
12
7
(189)
6,993
51,718
26,182
56,863
109,806
444
338,473
19,072
357,545
260,473
(205,848)
(95,441)
(3,863)
(19,814)
(31,328)
(728)
(9,382)
—
(105,931)
560
(57,482)
(180,293)
(1,684)
(8,334)
2,832
(244,401)
230
7,443
15,068
22,511 $
27,909 $
51,507 $
$
$
$
146
12,053
37,308
26,567
47,902
101,150
(318)
265,770
(1,523)
264,247
126,093
(211,863)
(92,203)
(3,047)
(15,495)
(21,363)
(432)
(9,545)
(514)
(228,369)
2,745
(33,370)
(71,706)
(259)
(475)
55,140
(47,925)
(599)
(12,646)
27,714
15,068
3,857
36,911
BOYD GROUP SERVICES INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
For the years ended December 31, 2023 and 2022
(thousands of U.S. dollars, except share and per share amounts)
1. GENERAL INFORMATION
Boyd Group Services Inc. (“BGSI” or the “Company”) is a Canadian corporation and controls The Boyd
Group Inc. and its subsidiaries.
The Company’s business consists of the ownership and operation of autobody/autoglass repair facilities and
related services. At the reporting date, the Company operated locations in Canada under the trade name Boyd
Autobody & Glass and Assured Automotive, as well as in the U.S. under the trade name Gerber Collision &
Glass. In addition, the Company is a major retail auto glass operator in the U.S. under the trade names Gerber
Collision & Glass, Glass America, Auto Glass Service, Auto Glass Authority and Autoglassonly.com. The
Company also operates Gerber National Claim Services (“GNCS”), that offers glass, emergency roadside and
first notice of loss services.
The shares of the Company are listed on the Toronto Stock Exchange and trade under the symbol “BYD.TO”.
The head office and principal address of the Company are located at 1745 Ellice Avenue, Unit C1, Winnipeg,
Manitoba, Canada, R3H 1A6.
The consolidated financial statements for the year ended December 31, 2023 (including comparatives) were
approved and authorized for issue by the Board of Directors on March 19, 2024.
2. MATERIAL ACCOUNTING POLICIES
a) Basis of presentation
The consolidated financial statements of BGSI have been prepared in accordance with International
Financial Reporting Standards (“IFRS”) as issued by the International Accounting Standards Board
(“IASB”). The functional currency of Boyd Group Services Inc. is the Canadian dollar (“CAD”). These
consolidated financial statements are presented in thousands of U.S. dollars (“USD”), except share and per
share amounts.
b) Revenue recognition
BGSI is in the business of collision repair. The Company recognizes revenue upon completion and delivery
of the repair to the customer, which has been determined to be the performance obligation that is distinct
and the point at which control of the asset passes to the customer. Revenue is measured at the fair value of
the consideration received.
c) Inventory
Inventory is valued at the lower of cost and net realizable value. Cost is determined on the first-in, first-out
basis. Net realizable value is the estimated selling price in the ordinary course of business less any
applicable selling expenses.
d) Property, plant and equipment
Property, plant and equipment assets are stated at cost less accumulated depreciation and accumulated
impairment losses. The cost of an item of property, plant and equipment consists of the purchase price, any
costs directly attributable to bringing the asset to the location and condition necessary for its intended use
and an estimate of the costs of dismantling and removing the item and restoring the site on which it is
60
BOYD GROUP SERVICES INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
For the years ended December 31, 2023 and 2022
(thousands of U.S. dollars, except share and per share amounts)
located. Construction-in-Progress (CIP) is a component of property, plant and equipment that represents
assets or capital projects under construction.
Depreciation is calculated using the declining balance and straight line rates as disclosed in the property,
plant and equipment note. Leasehold improvements are amortized on the straight line basis over the period
of estimated benefit.
An item of property, plant and equipment is reclassified as held for sale or when no future economic
benefits are expected to arise from the continued use of the asset. Any gain or loss arising on disposal of the
asset, determined as the difference between the net disposal proceeds and the carrying amount of the asset,
is recognized in the Consolidated Statement of Earnings.
The Company conducts an annual assessment of the residual balances, useful lives and depreciation
methods being used for property, plant and equipment and any changes arising from the assessment are
applied by BGSI prospectively.
e) Leases
At inception, the Company assesses whether a contract is or contains a lease. Leases are recognized as a
right of use asset and a lease liability at the lease commencement date.
The Company recognizes a right of use asset and a corresponding lease liability with respect to all lease
arrangements in which it is the lessee, except for short term leases, defined as leases with a lease term of 12
months or less, and leases of low value assets. For these leases, the Company recognizes the lease payments
as operating expenses on a straight-line basis over the term of the lease unless another systematic basis is
more representative of the time pattern in which economic benefits from the leased asset are consumed.
Right of use assets are subsequently measured at cost less accumulated depreciation and impairment losses.
Depreciation is recorded on a straight line basis over the term of the lease.
The lease liability is initially measured at the present value of the lease payments that are not paid at the
commencement date, discounted by using the rate implicit in the lease. If the interest rate implicit in the
leases cannot be readily determined, the Company uses its incremental borrowing rate. In order to calculate
the incremental borrowing rate, reference interest rates are derived from the yields of corporate bonds in
Canada and the U.S. The reference interest rates are supplemented by a leasing risk premium. The lease
liability is subsequently measured by increasing the carrying amount to reflect interest on the lease liability
and by reducing the carrying amount to reflect lease payments made.
For sale leaseback transactions, the Company applies the requirements of IFRS 15 Revenue from Contracts
with Customers to determine if the transfer qualifies as a sale. If the transfer qualifies as a sale, the
Company derecognizes the asset and recognizes a right of use asset equal to the retained portion of the
previous carrying amount of the sold asset. The residual is recognized as a gain on sale leaseback.
f) Consolidation
The financial statements of the Company consolidate the accounts of the Company and its subsidiaries. All
intercompany transactions, balances and unrealized gains and losses from intercompany transactions are
eliminated on consolidation.
Subsidiaries are those entities which the Company controls by having the power to govern the financial and
operating policies. The existence and effect of potential voting rights that are currently exercisable or
convertible are considered when assessing whether the Company controls another entity. Subsidiaries are
61
BOYD GROUP SERVICES INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
For the years ended December 31, 2023 and 2022
(thousands of U.S. dollars, except share and per share amounts)
fully consolidated from the date on which control is obtained by the Company and are de-consolidated from
the date that control ceases.
g) Business combinations, goodwill and other intangible assets
Acquisitions of subsidiaries and businesses are accounted for using the acquisition method of accounting.
The cost of the acquisition is measured at the aggregate of the fair values (at the acquisition date) of assets
transferred, liabilities incurred or assumed, and equity instruments issued by the Company in exchange for
control of the acquired company. Acquisition costs are expensed as incurred. The acquired company’s
identifiable assets (including previously unrecognized intangible assets), liabilities and contingent liabilities
are recognized at their fair values at the acquisition date.
Goodwill represents the excess of the cost of an acquisition over the fair value of BGSI’s share of the net
identifiable assets of the acquired subsidiary at the date of acquisition. Goodwill is carried at cost less
accumulated impairment losses.
Intangible assets are recognized only when it is probable that the expected future economic benefits
attributable to the assets will accrue to the Company and the cost can be reliably measured. Intangible
assets acquired in a business combination are recorded at fair value. Intangible assets that do not have
indefinite lives are amortized over their useful lives using an amortization method which reflects the
economic benefit of the intangible asset. Customer relationships are amortized on a straight-line basis over
the expected period of benefit of 20 years. Contractual rights, which consist of non-compete agreements
and favourable lease agreements, are amortized on a straight-line basis over the term of the contract.
Software is amortized on a straight-line basis over periods of three and five years. Brand names which the
Company continues to use in the conduct of its business are considered indefinite life because their value is
not expected to degrade over time. To the extent the Company decides to discontinue the use of a certain
brand, an estimate of the remaining useful life is made and the intangible asset is amortized over the
remaining period.
h) Impairment of non-financial assets
Property, plant and equipment and definite life intangible assets are tested for impairment when events or
changes in circumstances indicate that the carrying amount may not be recoverable. For the purpose of
measuring recoverable amounts, assets are grouped at the lowest levels for which there are separately
identifiable cash inflows (cash-generating unit or “CGU”). The recoverable amount is the higher of an
asset’s fair value less costs to sell and value in use (being the present value of the expected future cash
flows of the relevant asset or CGU). An impairment loss is recognized for the amount by which the asset’s
carrying amount exceeds its recoverable amount.
Goodwill and indefinite lived intangible assets are reviewed for impairment annually or at any time if an
indicator of impairment exists. As well, newly acquired goodwill is reviewed for impairment at the end of
the year in which it was acquired.
Goodwill acquired through a business combination is allocated to each CGU, or group of CGUs, that are
expected to benefit from the related business combination. A group of CGUs represents the lowest level
within the entity at which the goodwill is monitored for internal management purposes, which is not higher
than an operating segment. Impairment losses on goodwill are not reversed.
The Company evaluates impairment losses, other than goodwill impairment, for potential reversals when
events or circumstances warrant such consideration.
62
BOYD GROUP SERVICES INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
For the years ended December 31, 2023 and 2022
(thousands of U.S. dollars, except share and per share amounts)
i) Cash and cash equivalents
Cash and cash equivalents include cash on hand, deposits held with banks, and other short-term highly
liquid investments with original maturities of three months or less.
j) Income taxes
Income tax comprises current and deferred tax. Income tax is recognized in the Consolidated Statement of
Earnings except to the extent that it relates to items recognized directly in equity, in which case the income
tax is recognized directly in equity.
Current tax is the expected tax payable on the taxable income for the year, using tax rates enacted, or
substantively enacted, at the end of the reporting period, and any adjustment to tax payable in respect of
previous years.
In general, deferred tax is recognized in respect of temporary differences arising between the tax bases of
assets and liabilities and their carrying amounts in the consolidated financial statements. Deferred income
tax is determined on a non-discounted basis using tax rates and laws that have been enacted or
substantively enacted at the statement of financial position date and are expected to apply when the
deferred tax asset or liability is settled. Deferred tax assets are recognized to the extent that it is probable
that the assets can be recovered.
Deferred income tax is provided on temporary differences arising on investments in subsidiaries except, in
the case of subsidiaries, where the timing of the reversal of the temporary difference is controlled by BGSI
and it is probable that the temporary difference will not reverse in the foreseeable future.
k) Unearned rebates
Prepaid purchase rebates are recorded as unearned rebates on the statement of financial position and
amortized, as a reduction of the cost of purchases, on a straight-line basis over the term of the contract.
l) Shareholders’ capital
Common shares are classified as equity. Incremental costs directly attributable to the issuance of shares are
recognized as a deduction from equity.
m) Share-based compensation plans
Equity settled plans
The Company's stock option plan allows for the granting of options up to an amount of 250,000 Common
shares. The fair value of each option is measured at the date of grant using the Black-Scholes option pricing
model. Compensation expense is recognized over the option vesting period, based on the number of options
expected to vest, with the offset credited to contributed surplus.
Cash settled plans
The Company’s Performance Share Units, Restricted Share Units and Directors Deferred Share Unit Plan
are cash settled share-based payments. The fair value of each outstanding Performance Share Unit and
Restricted Share Unit is estimated based on the fair market value of the Company’s units/shares at the grant
date, subsequently adjusted for additional shares granted based on the reinvestment of notional dividends
and the market value of the shares at the end of each reporting period. The associated compensation
expense is recognized over the vesting period, factoring in the probability of the performance criteria being
met during that period. The fair value of each outstanding Director Deferred Share Unit is estimated based
63
BOYD GROUP SERVICES INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
For the years ended December 31, 2023 and 2022
(thousands of U.S. dollars, except share and per share amounts)
on the fair market value of the BGSI’s shares at the grant date, subsequently adjusted for additional shares
granted based on the reinvestment of notional dividends and the market value of the shares at the end of
each reporting period.
n) Earnings per share
Basic earnings per share (“EPS”) is calculated by dividing the net earnings for the period attributable to
equity owners of the Company by the weighted average number of shares outstanding during the period.
Diluted EPS is calculated by adjusting the weighted average number of shares outstanding and
corresponding earnings impact for dilutive instruments. The Company’s potentially dilutive instruments
consist of stock options. The dilutive impact of the stock options are calculated using the treasury stock
method.
o) Foreign currency translation
Items included in the financial statements of each subsidiary are measured using the currency of the
primary economic environment in which the entity operates (the “functional currency”). The Company
operates with multiple functional currencies. The consolidated financial statements are presented in U.S.
dollars as this provides a better reflection of the Company’s business activities, given the significance of
revenues denominated in U.S. dollars. Entities that have a functional currency different from that of U.S.
dollars are translated into U.S. dollars. Assets and liabilities are translated into U.S. dollars at the noon rate
of exchange prevailing at the statement of financial position dates and income and expense items are
translated at the average exchange rate during the period (as this is considered a reasonable approximation
to actual rates). The adjustment arising from the translation of these accounts is recognized in other
comprehensive earnings (loss) as cumulative translation adjustments.
Foreign currency transactions are translated into the functional currency using the exchange rates prevailing
at the dates of the transactions. Generally, foreign exchange gains and losses resulting from the settlement
of foreign currency transactions and from the translation at year-end exchange rates of monetary assets and
liabilities denominated in currencies other than an operation’s functional currency are recognized in
earnings.
p) Financial instruments
Recognition
Financial assets and liabilities are recognized when the Company becomes a party to the contractual
provisions of the instrument.
Classification
BGSI classifies its financial assets and liabilities in the following categories depending on the Company’s
business model for managing the financial assets and the contractual terms of the cash flows:
•
•
Those to be measured subsequently at fair value, either through profit or loss (“FVPL”) or through
OCI, and
Those to be measured at amortized cost
Cash and accounts receivable are classified as amortized cost. After their initial fair value measurement,
they are measured at amortized cost using the effective interest method, as reduced by appropriate
allowances for estimated lifetime expected credit losses.
Investments which do not qualify for equity treatment are recorded as other long term assets at FVPL. As
there is no ready secondary market, the fair value is estimated using the discounted cash flow method.
64
BOYD GROUP SERVICES INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
For the years ended December 31, 2023 and 2022
(thousands of U.S. dollars, except share and per share amounts)
Accounts payable and accrued liabilities, dividends payable, and long-term debt are classified as amortized
cost and are net of any related financing fees or issue costs. After their initial fair value measurement, they
are measured at amortized cost using the effective interest method.
Derivative contracts are classified as financial assets or financial liabilities at FVPL with mark-to-market
adjustments being recorded to net earnings at each period end.
Measurement
At initial recognition, BGSI measures a financial asset at its fair value. In the case of a financial asset not
measured at FVPL, transaction costs that are directly attributable to the acquisition of the financial asset are
included in the initial fair value. Transaction costs of financial assets carried at FVPL are expensed in profit
or loss.
For those financial instruments where fair value is recognized in the Consolidated Statement of Financial
Position the methods and assumptions used to develop fair value measurements have been classified into
one of the three levels of the fair value hierarchy for financial instruments:
•
•
•
Level 1 includes quoted prices (unadjusted) in active markets for identical assets or liabilities
Level 2 includes inputs that are observable other than quoted prices included in Level 1
Level 3 includes inputs that are not based on observable market data
q) Pensions and other post-retirement benefits
The Company contributes to defined contribution pension plans of certain employees. Contributions are
recognized within operating expenses at an amount equal to contributions payable for the period. Any
outstanding contributions are recognized as liabilities within accrued liabilities.
r) Provisions
Provisions are recognized when BGSI has a present legal or constructive obligation that has arisen as a
result of a past event and it is probable that a future outflow of resources will be required to settle the
obligation, provided that a reliable estimate can be made of the amount of the obligation.
Provisions are measured at management’s best estimate of the expenditure required to settle the obligation
at the end of the reporting period, and are discounted to present value where the effect is material. The
increase in the provision due to the passage of time is recognized as a finance cost.
s) Segment reporting
The chief operating decision-maker is responsible for allocating resources and assessing performance of the
operating segments and has been identified as the joint responsibility of the President and Chief Executive
Officer of BGSI and the Executive Vice President and Chief Financial Officer of BGSI.
The Company’s primary line of business is automotive collision and glass repair and related services, with
the majority of revenues relating to this group of similar services. This line of business operates in Canada
and the U.S. and both regions exhibit similar long-term economic characteristics. In this circumstance,
IFRS requires the Company to provide specific geographical disclosure. For the years reported, the
Company’s revenues were derived within Canada or the U.S. and all property, plant and equipment, right of
use assets, goodwill and intangible assets are located within these two geographic areas.
65
BOYD GROUP SERVICES INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
For the years ended December 31, 2023 and 2022
(thousands of U.S. dollars, except share and per share amounts)
t) Reporting Interest Paid on the Statement of Cash Flows
In accordance with IAS 7 Statement of Cash Flows, the Company has made the accounting policy choice to
disclose these amounts as “Financing Activities” in the cash flow statement as this best reflects the nature
of these expenses.
3. CRITICAL ACCOUNTING ESTIMATES AND JUDGMENTS
Estimates and judgments are continually evaluated and are based on historical experience and other factors,
including expectations of future events that are believed to be reasonable under the circumstances.
Critical accounting estimates
BGSI makes estimates, including the assumptions applied therein, concerning the future. The resulting
accounting estimates will, by definition, seldom equal the related actual results. The estimates and assumptions
that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities
within the next financial year are addressed below.
Impairment of Goodwill and Intangible Assets
When testing goodwill and intangibles for impairment, BGSI uses a five year forward looking discounted cash
flow of the cash generating unit (“CGU”) or group of CGU’s to which the asset relate. An estimate of the
recoverable amount is then calculated as the higher of an asset’s fair value less costs to sell and value in use
(being the present value of the expected future cash flows of the relevant asset or CGU). An impairment loss is
recognized for the amount by which the asset’s carrying amount exceeds its recoverable amount. The methods
used to value intangible assets and goodwill require critical estimates to be made regarding the future cash
flows and useful lives of the intangible assets. Goodwill and intangible asset impairments, when recognized,
are recorded as a separate charge to earnings, and could materially impact the operating results of the
Company for any particular accounting period.
Impairment of Other Long-lived Assets
BGSI assesses the recoverability of its long-lived assets, other than goodwill and intangibles, after considering
the potential impairment indicated by such factors as business and market trends, the Company’s ability to
transfer the assets, future prospects, current market value and other economic factors. In performing its review
of recoverability, management estimates the future cash flows expected to result from the use of the assets and
their potential disposition. If the discounted sum of the expected future cash flows is less than the carrying
value of the assets generating those cash flows, an impairment loss would be recognized based on the excess of
the carrying amounts of the assets over their estimated recoverable value. The underlying estimates for cash
flows include estimates for future sales, gross margin rates and operating expenses. Changes which may
impact these estimates include, but are not limited to, business risks and uncertainties and economic
conditions. To the extent that management’s estimates are not realized, future assessments could result in
impairment charges that may have a material impact on the Company’s consolidated financial statements.
Business Combinations
Fair value of assets acquired and liabilities assumed in a business combination is estimated based on
information available at the date of acquisition and involves considerable judgment in determining the fair
values assigned to property, plant and equipment and intangible assets acquired and liabilities assumed on
66
BOYD GROUP SERVICES INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
For the years ended December 31, 2023 and 2022
(thousands of U.S. dollars, except share and per share amounts)
acquisition. The determination of these fair values involves analysis including the use of discounted cash
flows, estimated future margins, future growth rates, market rents and capitalization rates. There is estimation
in this analysis and actual results could differ from estimates.
Fair Value of Financial Instruments
BGSI has applied discounted cash flow methods to establish the fair value of certain financial assets and
financial liabilities recorded on the Consolidated Statement of Financial Position, as well as disclosed in the
notes to the consolidated financial statements. BGSI also establishes mark-to-market valuations for derivative
instruments, which are assumed to represent the current fair value of these instruments. These valuations rely
on assumptions regarding interest and exchange rates as well as other economic indicators, which at the time
of establishing the fair value for disclosure, have a high degree of uncertainty. Unrealized gains or losses on
these derivative financial instruments may not be realized as markets change.
Income Taxes
BGSI is subject to income tax in several jurisdictions and estimates are used to determine the provision for
income taxes. During the ordinary course of business, there are transactions and calculations for which the
ultimate tax determination is uncertain. As a result, the Company recognizes tax liabilities based on estimates
of whether additional taxes and interest will be due. Uncertain tax liabilities may be recognized when, despite
the Company’s belief that its tax return positions are supportable, the Company believes that certain positions
are likely to be challenged and may not be fully sustained upon review by tax authorities. The Company
believes that its accruals for tax liabilities are adequate for all open audit years based on its assessment of many
factors including past experience and interpretations of tax law. To the extent that the final tax outcome of
these matters is different than the amounts recorded, such differences will impact income tax expense in the
period in which such determination is made.
Critical judgments in applying the entity’s accounting policies
Deferred Tax Assets
The assessment of the probability of future taxable income in which deferred tax assets can be utilized is based
on BGSI's latest forecasts which are adjusted for significant non-taxable income and expenses and specific
limits to the use of any unused tax loss or credit. The tax rules in the numerous jurisdictions in which BGSI
operates are also carefully taken into consideration. If a positive forecast of taxable income indicates the
probable use of a deferred tax asset, that deferred tax asset is recognized in full. The recognition of deferred tax
assets that are subject to certain legal or economic limits or uncertainties is assessed individually by
management based on the specific facts and circumstances. The judgments inherent in these assessments are
subject to uncertainty and if changed could materially affect the BGSI’s assessment of its ability to realize the
benefit of these tax assets.
4. CHANGES IN ACCOUNTING POLICIES
The IASB amendments to IAS 1 - Presentation of Financial Statements and IAS 8 - Changes in Accounting
Policies, Changes in Accounting Estimates and Errors require the disclosure of material accounting policy
rather than significant accounting policies, and help entities to distinguish between accounting policies and
accounting estimates. The amendments are effective for the annual periods beginning on or after January 1,
2023 and do not materially impact the Company’s financial disclosures.
67
BOYD GROUP SERVICES INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
For the years ended December 31, 2023 and 2022
(thousands of U.S. dollars, except share and per share amounts)
The May 2023 IASB amendment to IAS 12 – Income Taxes requires entities to disclose information relating to
income taxes arising from implementation of Pillar Two Model Rules published by the Organization for
Economic Co-Operation and Development. The amendments are effective for annual reporting periods
beginning on or after January 1, 2023. Based on the Company’s assessment and the Pillar Two effective tax
rates in all jurisdictions in which the Company is operating, the Company does not expect a material exposure
to Pillar Two top up taxes.
5. ACQUISITIONS
The Company completed 71 acquisitions that added 78 collision repair locations during the year ended
December 31, 2023 as follows:
Acquisition Date
January 3, 2023
January 6, 2023
January 18, 2023
February 3, 2023
February 3, 2023
February 10, 2023
February 10, 2023
February 22, 2023
February 27, 2023
March 17, 2023
March 22, 2023
March 24, 2023
March 24, 2023
March 28, 2023
March 28, 2023
March 29, 2023
April 21, 2023
April 21, 2023
April 21, 2023
April 27, 2023
April 28, 2023
May 5, 2023
May 9, 2023
May 26, 2023
May 26, 2023
May 26, 2023
May 31, 2023
Location
Cameron Park, CA
Abilene, TX
Park City, UT
Hendersonville, NC
Rogers, MN
Lansdale, PA
Sacramento, CA
LaBelle, FL
Perry, GA
Rancho Cucamonga, CA
Sacramento, CA
Modesto, CA
Prattville, AL
Longview, TX
Charleroi, PA
Sharpsburg, GA
Griffin, GA
Huntsville, AL
Baltimore, MD
Stockton, CA
Kailua-Kona, HI
Puyallup, WA
Iowa City, IA
Ft. Lauderdale, FL
Monroe, MI
Chicago, IL
Albany, NY
68
BOYD GROUP SERVICES INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
For the years ended December 31, 2023 and 2022
(thousands of U.S. dollars, except share and per share amounts)
Acquisition Date
June 2, 2023
June 16, 2023
June 16, 2023
June 23, 2023
June 23, 2023
June 29, 2023
July 14, 2023
July 14, 2023
July 21, 2023
July 21, 2023
July 28, 2023
August 15, 2023
August 15, 2023
August 25, 2023
September 6, 2023
September 8, 2023
September 8, 2023
September 12, 2023
September 22, 2023
September 22, 2023
October 13, 2023
October 20, 2023
October 27, 2023
November 3, 2023
November 7, 2023
November 8, 2023
November 10, 2023
November 10, 2023
November 16, 2023
November 17, 2023
November 17, 2023
November 25, 2023
November 27, 2023
November 28, 2023
November 29, 2023
December 1, 2023
December 1, 2023
Location
Merced, CA
Sacramento, Davis, and Yuba City, CA (3 locations)
Austin, TX
Fridley, MN
Red Bluff, CA
Walla Walla, WA
Wildwood, FL
Donaldsonville, LA
Redding, CA
Lafayette and New Iberia, LA (2 locations)
Oroville, CA
Coon Rapids, MN
Chicago, IL
Alexandria, MN
Albion, NY
Lincoln Park, MI
River Falls, WI
Troy, MI
Kingston, NY
Arnold, Imperial, and St. Louis, MO (3 locations)
Pleasant Hill, IA
Avon, MN
Houston, TX
Chico, CA
Albertville, MN
Redding, CA
Spring, TX
Stafford, TX
Naples, FL
North Port, FL
Walker, LA
Owensboro, KY
Houston, TX
Lodi, CA
Becker, MN
Elk River, MN
Melrose, MN
69
BOYD GROUP SERVICES INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
For the years ended December 31, 2023 and 2022
(thousands of U.S. dollars, except share and per share amounts)
Acquisition Date
December 5, 2023
December 8, 2023
December 15, 2023
December 15, 2023
December 19, 2023
December 27, 2023
December 29, 2023
Location
Turlock, CA
San Antonio, TX (3 locations)
Golden Valley, MN
Shakopee, MN
Louisville, KY
Niagara Falls, ON
Sacramento, CA
During the first quarter of 2023, the company acquired a two location glass business in Minnesota and a single
location glass business in Texas. During the third quarter of 2023, the company acquired a single location glass
business in New York, a single location glass business in Virginia and invested in a long term asset to support
the continued growth in the glass business. During the fourth quarter of 2023, the company acquired a single
location glass business in Pennsylvania.
70
BOYD GROUP SERVICES INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
For the years ended December 31, 2023 and 2022
(thousands of U.S. dollars, except share and per share amounts)
The company has accounted for the 2023 acquisitions using the acquisition method as follows:
Total
acquisitions
$
$
$
$
$
11
1,818
27,219
49,916
25,158
1,372
6,414
(48)
(49,916)
61,944
29,996
91,940
85,393
6,547
91,940
Acquisitions in 2023
Identifiable net assets acquired at fair value:
Cash
Other currents assets
Property, plant and equipment
Right of use assets
Identified intangible assets
Customer relationships
Non-compete agreements
Intellectual property
Current liabilities
Lease liabilities
Identifiable net assets acquired
Goodwill
Total purchase consideration
Consideration provided
Cash paid or payable
Seller notes
Total consideration provided
71
BOYD GROUP SERVICES INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
For the years ended December 31, 2023 and 2022
(thousands of U.S. dollars, except share and per share amounts)
The Company completed 20 acquisitions that added 23 locations during the year ended December 31, 2022 as
follows:
Acquisition Date
January 3, 2022
February 11, 2022
March 18, 2022
March 28, 2022
March 31, 2022
April 29, 2022
May 13, 2022
May 31, 2022
July 8, 2022
July 29, 2022
September 2, 2022
September 6, 2022
September 9, 2022
September 30, 2022
October 7, 2022
November 4, 2022
November 28, 2022
November 28, 2022
December 30, 2022
December 30, 2022
Location
Springhill & Thompson’s Station, TN (2 locations)
Signal Hill, CA
Bossier City & Shreveport, LA (2 locations)
New Smyrna Beach, FL
Eau Claire and Plover, WI (2 locations)
Indian Trail, NC
Marion, NC
Elkhorn, WI
Roseville, CA
Orangevale, CA
La Crosse, WI
Brownwood, TX
Yakima, WA
Sacramento, CA
Tulsa, OK
Wausau, WI
Sulphur, LA
Lake Charles, LA
Tallahassee, FL
Colorado Springs, CO
During the first quarter of 2022, the company also acquired a single location glass business in Minnesota.
During the third quarter of 2022, the company opened a single location glass business in California and
acquired a four location glass business in Florida. During the fourth quarter of 2022, the company acquired a
single location glass business in Wisconsin.
72
BOYD GROUP SERVICES INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
For the years ended December 31, 2023 and 2022
(thousands of U.S. dollars, except share and per share amounts)
The company has accounted for the 2022 acquisitions using the acquisition method as follows:
Acquisitions in 2022
Identifiable net assets acquired at fair value:
Other currents assets
Property, plant and equipment
Right of use assets
Identified intangible assets
Customer relationships
Non-compete agreements
Lease liabilities
Identifiable net assets acquired
Goodwill
Total purchase consideration
Consideration provided
Cash paid or payable
Seller notes
Total consideration provided
Total
acquisitions
960
11,055
18,179
13,903
466
(18,179)
26,384
6,190
32,574
28,699
3,875
32,574
$
$
$
$
The preliminary purchase prices for the 2023 acquisitions may be revised as additional information becomes
available. Further adjustments may be recorded in future periods as purchase price adjustments are finalized.
Canadian acquisition transactions are initially recognized in U.S. dollars at the rates of exchange in effect on
the transaction dates. Subsequently, the assets and liabilities are translated at the rate in effect at the
Consolidated Statement of Financial Position date.
A significant part of the goodwill recorded on the acquisitions can be attributed to the assembled workforce
and the operating know-how of key personnel. However, no intangible assets qualified for separate recognition
in this respect.
Goodwill recognized during 2023 is expected to be deductible for tax purposes.
On the statement of cash flows, included as part of cash used for acquisition and development of business were
costs related to the acquisition of businesses, as well as the development of businesses which consisted
primarily of property, plant and equipment additions.
The results of operations reflect the revenues and expenses of acquired operations from the date of acquisition.
During 2023, revenue contributed by 2023 acquisitions since being acquired were $68,171. Net losses incurred
73
BOYD GROUP SERVICES INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
For the years ended December 31, 2023 and 2022
(thousands of U.S. dollars, except share and per share amounts)
by 2023 acquisitions since being acquired were $4,809. If 2023 acquisitions had been acquired on January 1,
2023, BGSI’s revenue and net earnings for the year ended December 31, 2023 would have been $3,062,647
and $72,368 (unaudited), respectively.
6.
INVENTORY
As at
Parts and materials
Work in process
December 31,
2023
December 31,
2022
$
$
23,864 $
54,668
78,532 $
20,734
58,050
78,784
Included in cost of sales for the year ended December 31, 2023 are parts and material costs of $931,089 (2022
– $794,017) and labour costs of $471,451 (2022 – $389,609) with the balance of cost of sales primarily made
up of sublet charges.
74
BOYD GROUP SERVICES INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
For the years ended December 31, 2023 and 2022
(thousands of U.S. dollars, except share and per share amounts)
7. PROPERTY, PLANT AND EQUIPMENT
Land
Buildings
Shop
Equipment
Office
Equipment
Computer
Hardware
Signage
Vehicles
Depreciation rates
5%
15%
20%
30%
15%
30%
Leasehold
Improvements
10 to 25 years
straight line
CIP
Total
As at January 1, 2023
Cost
Accumulated
depreciation
Net book value
For the year ended
December 31, 2023
Acquired through
business
combinations
Additions
Proceeds on
disposal
Gain (loss) on
disposal
Transfers from
right of use
assets
Depreciation
Foreign exchange
$11,114
$19,519
$246,930
$19,406
$35,441
$19,421
$9,218
$201,642
$16,841
$579,532
—
(3,160)
(122,358)
(11,910)
(23,058)
(9,109)
$11,114
$16,359
$124,572
$7,496
$12,383
$10,312
(6,133)
$3,085
(89,240)
—
(264,968)
$112,402
$16,841
$314,564
1,086
1,050
4,499
7,066
11,933
53,457
(47)
(102)
—
—
4,431
—
(9)
—
11
3,316
—
(11)
—
—
2,981
—
—
—
286
2,932
(568)
195
297
—
—
—
—
—
—
—
12
(1,331)
(24,740)
(2,008)
(4,216)
(1,904)
(1,302)
(21,362)
24
162
9
18
12
2
48
9,404
65,229
—
27,219
16,519
156,981
—
(92)
—
(2,832)
(3,447)
(38)
(57)
—
—
—
297
(56,863)
287
Net book value
$13,262
$26,617
$165,235
$9,919
$11,501
$11,401
$4,927
$165,629
$30,490
$438,981
As at December 31, 2023
Cost
Accumulated
depreciation
Net book value
$13,262
$31,119
$312,529
$23,828
$38,728
$22,302
$12,051
$275,027
$30,490
$759,336
—
(4,502)
(147,294)
(13,909)
(27,227)
(10,901)
(7,124)
(109,398)
—
(320,355)
$13,262
$26,617
$165,235
$9,919
$11,501
$11,401
$4,927
$165,629
$30,490
$438,981
75
BOYD GROUP SERVICES INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
For the years ended December 31, 2023 and 2022
(thousands of U.S. dollars, except share and per share amounts)
Land
Buildings
Shop
Equipment
Office
Equipment
Computer
Hardware
Signage
Vehicles
Depreciation rates
5%
15%
20%
30%
15%
30%
Leasehold
Improvements
10 to 25 years
straight line
CIP
Total
As at January 1, 2022
Cost
$25,774
$46,783
$224,253
$17,437
$30,355
$15,828
$7,430
$176,203
$14,938
$559,001
Accumulated
depreciation
Net book value
For the year ended
December 31, 2022
Acquired through
business
combinations
Additions
Proceeds on
disposal
Gain (loss) on
disposal
Transfers from
right of use
assets
Depreciation
—
(5,195)
(104,415)
(10,402)
(19,171)
(7,715)
(5,504)
(74,416)
—
(226,818)
$25,774
$41,588
$119,838
$7,035
$11,184
$8,113
$1,926
$101,787
$14,938
$332,183
1,034
—
1,416
1,899
4,326
21,510
—
2,281
—
5,811
—
3,798
253
1,738
4,026
31,421
—
8,758
11,055
77,216
(15,661)
(26,282)
(27)
(373)
(17)
(460)
—
—
—
—
(6)
20
—
—
(22)
—
—
(2)
38
Foreign exchange
(33)
(69)
(456)
(26)
(50)
(36)
(1,361)
(20,601)
(1,810)
(4,539)
(1,599)
(825)
(8,229)
(6,855)
(57,885)
528
369
279
(808)
(5)
422
(17,184)
(210)
—
—
—
—
503
279
(47,902)
(885)
Net book value
$11,114
$16,358
$124,573
$7,494
$12,384
$10,312
$3,086
$112,402
$16,841
$314,564
As at December 31, 2022
Cost
$11,114
$19,519
$246,930
$19,406
$35,441
$19,421
$9,218
$201,642
$16,841
$579,532
Accumulated
depreciation
—
(3,160)
(122,358)
(11,910)
(23,058)
(9,109)
(6,133)
(89,240)
—
(264,968)
Net book value
$11,114
$16,359
$124,572
$7,496
$12,383
$10,312
$3,085
$112,402
$16,841
$314,564
76
BOYD GROUP SERVICES INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
For the years ended December 31, 2023 and 2022
(thousands of U.S. dollars, except share and per share amounts)
8. RIGHT OF USE ASSETS
As at
Property
Vehicles and
Equipment
December 31,
2023
Balance, beginning of period
Acquired through business
combinations
Additions and modifications
Depreciation
Transfers to property, plant and
equipment
Foreign exchange
Net book value
$
559,254 $
9,183 $
568,437
49,916
137,892
(106,004)
—
1,231
642,289 $
$
—
6,972
(3,802)
(297)
2
12,058 $
49,916
144,864
(109,806)
(297)
1,233
654,347
As at
Property
Vehicles and
Equipment
December 31,
2022
Balance, beginning of period
Acquired through business
combinations
Additions and modifications
Depreciation
Loss on disposal
Transfers to property, plant and
equipment
Foreign exchange
$
494,700 $
7,336 $
502,036
18,179
148,047
(98,179)
—
—
(3,493)
—
5,102
(2,971)
—
(279)
(5)
18,179
153,149
(101,150)
—
(279)
(3,498)
Net book value
$
559,254 $
9,183 $
568,437
77
BOYD GROUP SERVICES INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
For the years ended December 31, 2023 and 2022
(thousands of U.S. dollars, except share and per share amounts)
9.
INCOME TAXES
BGSI accounts for deferred income tax assets and liabilities in respect of accounting and tax basis differences.
Deferred income tax assets and liabilities which relate to the same jurisdiction are netted on the Consolidated
Statement of Financial Position.
a. The reconciliation between income tax expense and the accounting earnings multiplied by the combined
basic Canadian and U.S. federal, provincial and state tax rates is as follows:
For the years ended
December 31,
2023
2022
Earnings before income taxes
Combined basic Canadian and U.S. federal, provincial and state tax
rates
$
119,521
$
58,727
26.12 %
26.19 %
Income tax expense at combined statutory tax rates
$
31,219
$
15,381
Adjustments for the tax effect of:
Additional state tax liability
Other non-deductible expenses
Other
Income tax expense
1,177
289
180
2,039
285
60
$
32,865
$
17,765
b. Deferred income taxes consist of the Canadian and U.S. tax jurisdictions, respectively, as follows:
As at
Property, plant and equipment
Intangible assets
Right of use assets net of lease liabilities
Accrued liabilities
Issue costs
Director Share Units
Non-capital losses carried forward
Other
Deferred income tax asset
December 31,
2023
December 31,
2022
$
$
(409) $
(5,239)
1,969
—
461
1,639
5,473
422
4,316 $
(32)
(4,589)
1,630
198
900
969
4,635
104
3,815
78
BOYD GROUP SERVICES INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
For the years ended December 31, 2023 and 2022
(thousands of U.S. dollars, except share and per share amounts)
As at
Property, plant and equipment
Intangible assets
Right of use assets net of lease liabilities
Accrued liabilities
Acquisition costs
Other
Deferred income tax liability
December 31,
2023
December 31,
2022
$
54,702 $
52,158
(13,799)
(16,796)
(4,203)
(1,791)
$
70,271 $
45,808
44,280
(11,224)
(10,989)
(3,713)
(1,277)
62,885
c. The movement in deferred income tax assets and liabilities in Canada and U.S. tax jurisdictions,
respectively, during the year is as follows:
Deferred income tax asset as at
Balance, beginning of year
Deferred income tax recovery
Foreign exchange
Balance, end of year
Deferred income tax liability as at
Balance, beginning of year
Deferred income tax expense
Balance, end of year
December 31,
2023
December 31,
2022
$
$
3,815 $
393
108 $
4,316 $
1,737
2,230
(152)
3,815
December 31,
2023
December 31,
2022
$
$
62,885 $
7,386
70,271 $
48,602
14,283
62,885
d. Deferred income tax assets are recognized to the extent it is probable that sufficient future taxable income
will be available to allow a deferred income tax asset to be realized. At December 31, 2023 BGSI has
recognized all of its deferred income tax assets with the exception of $5,678 (2022 - $5,545) in capital losses
available in Canada. At December 31, 2023 the Company has non-capital losses in Canada of $21,019 (2022 -
$17,770) and net operating losses in the U.S. of $nil (2022 - $nil).
The losses in Canada expire as follows:
Year of expiry
2039
2040
2041
2042
2043
$
$
$
$
$
1,478
—
1,909
15,382
2,250
79
BOYD GROUP SERVICES INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
For the years ended December 31, 2023 and 2022
(thousands of U.S. dollars, except share and per share amounts)
10. INTANGIBLE ASSETS
Customer
Relationships
Brand
Name
As at January 1, 2022
Cost
Accumulated amortization
Net book value
For the year ended
December 31, 2022
Acquired through business combinations
Additions
Amortization
Foreign exchange
Net book value
As at December 31, 2022
Cost
Accumulated amortization
Net book value
For the year ended
December 31, 2023
Acquired through business combinations
Additions
Amortization
Foreign exchange
Net book value
As at December 31, 2023
Cost
Accumulated amortization
Net book value
$402,598
(89,539)
$313,059
13,903
—
(20,563)
(2,855)
$303,544
$412,705
(109,161)
$303,544
25,158
—
(21,272)
928
$308,358
$439,201
(130,843)
$308,358
$23,681
(5,170)
$18,511
—
—
(292)
(706)
$17,513
$22,974
(5,461)
$17,513
—
—
—
249
$17,762
$23,223
(5,461)
$17,762
Non-
compete
Agreements
Favourable
Lease
Agreements
$23,353
(16,625)
$6,728
466
7
(2,608)
(17)
$4,576
$23,203
(18,627)
$4,576
1,372
—
(1,864)
1
$4,085
$24,722
(20,637)
$4,085
$6,301
(2,514)
$3,787
—
—
(420)
(3)
$3,364
$6,305
(2,941)
$3,364
—
—
(420)
(2)
$2,942
$6,305
(3,363)
$2,942
Total
$468,397
(119,670)
$348,727
14,369
259
(26,567)
(3,849)
$332,939
$476,827
(143,888)
$332,939
32,944
1,684
(26,182)
1,396
$342,781
$513,274
(170,493)
$342,781
Software
$12,464
(5,822)
$6,642
—
252
(2,684)
(268)
$3,942
$11,640
(7,698)
$3,942
6,414
1,684
(2,626)
220
$9,634
$19,823
(10,189)
$9,634
80
BOYD GROUP SERVICES INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
For the years ended December 31, 2023 and 2022
(thousands of U.S. dollars, except share and per share amounts)
11. GOODWILL
As at
Balance, beginning of year
Acquired through business combination
Foreign exchange
Balance, end of period
December 31,
2023
December 31,
2022
$
601,706 $
601,991
29,996
2,284
6,190
(6,475)
$
633,986 $
601,706
When testing goodwill for impairment, BGSI uses a five year forward looking discounted cash flow of the
cash generating unit (“CGU”) or group of CGUs to which the asset relate. BGSI has used the fair value less
costs to sell method to evaluate the carrying amount of goodwill. The key assumptions used in the assessment
include an estimate of current and future cash flows, taxes, future acquisition growth, future capital
expenditures, a terminal growth rate of 3% and a weighted average cost of capital of 9% to 11%. BGSI
concluded that there was no impairment to the carrying amount of goodwill as at December 31, 2023. The
carrying amount of goodwill for the Canadian CGU was $97,044 as at December 31, 2023.
Sensitivity testing is conducted as part of the annual impairment tests. After considering all key assumptions,
management considers that a reasonably possible change in only the following assumptions would cause the
Canadian CGU’s carrying amount to exceed its recoverable amount:
•
•
If the discount rate increased by approximately 2.8%.
If Adjusted EBITDA margins are lower by approximately 2.4% throughout the forecast period,
representing a 18% decline in Adjusted EBITDA.
Earnings before interest, taxes, depreciation and amortization (“EBITDA”) is not a calculation defined in
IFRS. EBITDA comprises sales less operating expenses before finance costs, amortization and depreciation,
and income taxes. Adjusted EBITDA is calculated to exclude acquisition and transaction costs and fair value
adjustments to contingent consideration, which do not relate to the current operating performance of the
business units but are typically costs incurred to expand operations.
81
BOYD GROUP SERVICES INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
For the years ended December 31, 2023 and 2022
(thousands of U.S. dollars, except share and per share amounts)
12. OTHER LONG TERM ASSETS
Other long term assets consist primarily of rent deposits in the amount of $3,720 (2022 - $3,463) and an
investment of $8,000 (2022 - $nil) to support the growth of the glass business. Investments which do not
qualify for equity treatment are recorded as other long term assets.
13. DIVIDENDS
The Company’s Directors have discretion in declaring dividends. The Company declares and pays dividends
from its available cash from operations taking into account current and future performance amounts necessary
for principal and interest payments on debt obligations, amounts required for maintenance capital expenditures
and amounts allocated to reserves.
The Company declared dividends of C$0.147 per share in the first, second and third quarters of 2023 and
C$0.150 in the fourth quarter of 2023. The Company declared dividends of C$0.144 per share in the first,
second and third quarter of 2022 and C$0.147 in the fourth quarter of 2022.
The following is the balance of dividends payable:
As at
December 31,
2023
December 31,
2022
Balance, beginning of period
$
2,330 $
Declared
Payments
Foreign exchange
Balance, end of period
9,412
(9,382)
75
$
2,435 $
2,439
9,499
(9,545)
(63)
2,330
Dividends to shareholders were declared and paid in thousands of U.S. dollars as follows:
Record date
March 31, 2023
June 30, 2023
September 30, 2023
December 31, 2023
Record date
March 31, 2022
June 30, 2022
September 30, 2022
December 31, 2022
Payment date
April 26, 2023
July 27, 2023
October 27, 2023
January 29, 2024
Payment date
April 27, 2022
July 27, 2022
October 27, 2022
January 27, 2023
82
Dividend amount
$
$
2,306
2,376
2,333
2,397
9,412
Dividend amount
$
$
2,441
2,413
2,321
2,324
9,499
BOYD GROUP SERVICES INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
For the years ended December 31, 2023 and 2022
(thousands of U.S. dollars, except share and per share amounts)
14. LONG-TERM DEBT
The Company has a credit agreement maturing in March 2025 which consists of a revolving credit facility of
$550,000 with an accordion feature which can increase the facility to a maximum of $825,000 (the “revolving
credit facility”, or the “facility”). The revolving credit facility is accompanied by a seven-year fixed-rate Term
Loan A in the amount of $125,000 at an interest rate of 3.455%. The revolving credit facility is with a
syndicate of Canadian and U.S. banks and is secured by the shares and assets of the Company as well as
guarantees by BGSI and subsidiaries, while Term Loan A is with one of the syndicated banks. The interest rate
for draws on the revolving credit facility are based on a pricing grid of BGSI’s ratio of total funded debt to
EBITDA as determined under the credit agreement. The Company can draw on the facility in either the U.S. or
in Canada, in either U.S. or Canadian dollars. The Company can make draws in tranches as required. Tranches
bear interest only and are not repayable until the maturity date but can be voluntarily repaid at any time. The
Company has the ability to choose the base interest rate between Prime, Bankers’ Acceptances (“BA”), U.S.
Prime or Secured Overnight Financing Rate (“SOFR”) at the Company’s election. SOFR was introduced in
May 2023, where previously the Company had the option to choose London Inter Bank Offer Rate (“LIBOR”)
until it was decommissioned. The total syndicated facility includes a swing line up to a maximum of $10,000
for the Canadian borrower and $30,000 for the U.S. borrower. As at December 31, 2023, the U.S. borrower
had drawn $264,500 (December 31, 2022 - $186,500) and the Canadian borrower had drawn $nil
(December 31, 2022 - C$9,000) on the revolving credit facility and swing line and $125,000 (December 31,
2022 - $125,000) on the Term Loan A.
Under the revolving credit facility, the Company is subject to certain financial covenants which must be
maintained to avoid acceleration of the termination of the credit agreement. The financial covenants require
BGSI to maintain a senior funded debt to EBITDA ratio of no greater than 3.50 and an interest coverage ratio
of not less than 2.75. For four quarters following a material acquisition, the senior funded debt to EBITDA
ratio may be increased to less than 4.00. For purposes of covenant calculations, property lease payments are
deducted from EBITDA, and EBITDA is further adjusted to reflect pro-forma annualized acquisition results.
On March 21, 2022, the Company amended the credit agreement to provide for a covenant flex period from
January 1, 2022 to March 30, 2023 and to provide for revisions to interest rates, allowing for the use of LIBOR
until it was decommissioned and allowing for the use of the SOFR at the Company’s election. During the
covenant flex period, the financial covenants required BGSI to maintain a senior funded debt to EBITDA ratio
of no greater than 4.00 from March 21, 2022 to March 30, 2022, no greater than 4.50 from March 31, 2022 to
September 29, 2022, no greater than 4.25 from September 30, 2022 to December 30, 2022 and no greater than
4.00 from December 31, 2022 to March 30, 2023. For four quarters following a material acquisition during the
covenant flex period, the senior funded debt to EBITDA ratio may be increased by up to 0.50, never exceeding
4.50.
Financing fees of $1,909 are amortized to finance costs on a straight-line basis over the five year term of the
third amended and restated credit agreement and over the seven year term for fees incurred related to Term
Loan A. The unamortized deferred financing costs of $642 have been netted against the debt drawn as at
December 31, 2023.
As at December 31, 2023, the Company was in compliance with all financial covenants.
Seller notes payable of $32,847 on the financing of certain acquisitions are unsecured, at interest rates ranging
from 3% to 8%. The notes are repayable from January 2024 to May 2028.
83
BOYD GROUP SERVICES INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
For the years ended December 31, 2023 and 2022
(thousands of U.S. dollars, except share and per share amounts)
Long-term debt is comprised of the following:
As at
Revolving credit facility & swing line (net of financing costs)
Term Loan A (net of financing costs)
Seller notes
Current portion
The following is the continuity of long-term debt:
As at
Balance, beginning of period
Consideration on acquisition
Draws
Repayments
Deferred financing costs
Amortization of deferred financing costs
Foreign exchange
December 31,
2023
December 31,
2022
$
$
$
264,046 $
124,812
32,847
421,705 $
22,038
399,667 $
192,343
124,759
43,069
360,171
15,365
344,806
December 31,
2023
December 31,
2022
$
360,171 $
6,547
260,473
(205,848)
—
418
(56)
442,073
3,875
126,093
(211,863)
(514)
406
101
Balance, end of period
$
421,705 $
360,171
Included in finance costs for the year ended December 31, 2023 is interest on long-term debt of $19,814 (2022
- $15,495).
84
BOYD GROUP SERVICES INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
For the years ended December 31, 2023 and 2022
(thousands of U.S. dollars, except share and per share amounts)
15. LEASE LIABILITIES
The following is the continuity of lease liabilities:
As at
Balance, beginning of period
Assumed on acquisition
Additions and modifications
Repayments
Financing costs
Foreign exchange
Balance, end of period
Current portion
December 31,
2023
December 31,
2022
$
617,926 $
49,916
145,327
543,347
18,179
155,560
(131,360)
(117,045)
32,056
1,412
715,277 $
107,727
607,550 $
21,795
(3,910)
617,926
98,870
519,056
$
$
Lease expenses are presented in the Consolidated Statement of Earnings as follows:
Operating expenses
Depreciation of right of use assets
Finance costs
Year ended December 31,
2023
2022
$
$
$
7,808 $
109,806 $
32,056 $
6,037
101,150
21,795
Included in operating expenses are short-term and low-value asset lease expenses of $7,711 for the year ended
December 31, 2023 (2022 - $5,908).
85
BOYD GROUP SERVICES INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
For the years ended December 31, 2023 and 2022
(thousands of U.S. dollars, except share and per share amounts)
16. UNEARNED REBATES
In connection with a 2019 acquisition, the Company recognized prepaid rebates received from a trading partner
of $7,500. These rebates have been deferred as unearned rebates. Under the terms of this agreement, the
Company will amortize the unearned rebate on a straight line basis over a term of 12 years, as a reduction of
cost of sales.
The Company is obliged to purchase the suppliers’ products on an exclusive basis over this term. In exchange
for this exclusive arrangement, and subject to certain conditions, the trading partners are required to continue to
price their products competitively to the Company. Termination of the arrangement by the Company, the
occurrence of an event of default or a change in control, as defined by the agreement, require the Company to
repay all unamortized balances and all other amounts as outlined within the agreement.
At December 31, 2023, the Company has unearned rebates of $4,579 (December 31, 2022 – $5,194).
17. FAIR VALUE ADJUSTMENTS
Contingent consideration
Total fair value adjustments
Year ended December 31,
2023
2022
$
$
(189) $
(189) $
146
146
86
BOYD GROUP SERVICES INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
For the years ended December 31, 2023 and 2022
(thousands of U.S. dollars, except share and per share amounts)
18. FINANCIAL INSTRUMENTS
Carrying value and estimated fair value of financial instruments
December 31, 2023
December 31, 2022
Classification
Fair value
hierarchy
Carrying
amount
Fair
value
Carrying
amount
Fair
value
Financial assets
Cash
Amortized cost
Accounts receivable
Amortized cost
Long-term asset
FVPL (1)
Financial liabilities
Accounts payable and
accrued liabilities
Amortized cost
Dividends payable
Amortized cost
Long-term debt
Amortized cost
(1) Fair Value Through Profit or Loss
n/a
n/a
3
n/a
n/a
n/a
22,511
22,511
15,068
15,068
145,793
145,793
139,266
139,266
8,000
8,000
—
—
339,823
339,823
307,729
307,729
2,435
2,435
2,330
2,330
421,705
409,212
360,171
355,815
For the Company’s current financial assets and liabilities, including accounts receivable, accounts payable and
accrued liabilities, and dividends payable, which are short term in nature and subject to normal trade terms, the
carrying values approximate their fair value. The fair value of BGSI’s long-term debt has been determined by
calculating the present value of the interest rate spread that exists between the actual Term Loan A and the rate
that would be negotiated with the economic conditions at the reporting date. As there is no ready secondary
market for BGSI’s other long-term debt and other long term asset, the fair value has been estimated using the
discounted cash flow method.
Collateral
The Company’s syndicated loan facility is collateralized by a General Security Agreement. The carrying
amount of the financial assets pledged as collateral for this facility at December 31, 2023 was approximately
$168,304 (December 31, 2022 - $154,334).
Interest rate risk
The Company’s operating line and syndicated loan facility are exposed to interest rate fluctuations and the
Company does not hold any financial instruments to mitigate this risk. Seller notes and Term Loan A are at
fixed interest rates.
87
BOYD GROUP SERVICES INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
For the years ended December 31, 2023 and 2022
(thousands of U.S. dollars, except share and per share amounts)
Foreign currency risk
The Company’s operations in Canada are more closely tied to its domestic currency. Accordingly, the Canadian
operations are measured in Canadian dollars and the Company’s foreign exchange translation exposure relates
to these operations. When the Canadian operation’s net asset values are converted to U.S. dollars, currency
fluctuations result in period to period changes in those net asset values. BGSI’s equity position reflects these
changes in net asset values as recorded in accumulated other comprehensive earnings. The income and expenses
of the Canadian operations are translated into U.S. dollars at the average rate for the period in order to include
their financial results in the consolidated financial statements. Period to period changes in the average exchange
rates cause translation effects that have an impact on net earnings. Unlike the effect of exchange rate
fluctuations on transaction exposure, the exchange rate translation risk does not affect local currency cash flows.
Transactional foreign currency risk also exists in circumstances where U.S. denominated cash is received in
Canada. The Company monitors U.S. denominated cash flows to be received in Canada and evaluates whether
to use forward foreign exchange contracts. No forward foreign exchange contracts were used during 2023 or
2022.
BGSI earns interest on promissory notes issued to The Boyd Group (U.S.) Inc., the parent of the Company’s
U.S. operations. As at December 31, 2023 and December 31, 2022, promissory notes denominated in Canadian
dollars are as follows:
Promissory notes
As at
December 31,
2023
December 31,
2022
Promissory note at 5.0% due September 29, 2027
$
108,000 $
108,000
Promissory note at 5.75% due January 1, 2030
Promissory note at 9.22% due January 1, 2029
Promissory note at 4.3% due December 30, 2030
41,800
61,800
70,000
41,800
61,800
70,000
$
281,600 $
281,600
BGSI’s U.S. operations purchase Canadian dollars at market rates to fund the monthly interest payments.
Credit risk
The carrying amount of financial assets represents the maximum credit exposure. Cash is in the form of deposits
on demand with major financial institutions that have strong long-term credit ratings. BGSI is subject to risk of
non-payment of accounts receivable; however, the Company’s receivables are largely collected from the
insurers of its customers. Accordingly, the Company’s accounts receivable comprises mostly amounts due from
national and international insurance companies or provincial crown corporations.
Aging of accounts receivable
As at
Neither impaired nor past due
Past due:
Over 90 days
Allowance for doubtful accounts
Accounts receivable
December 31,
2023
December 31,
2022
$
$
$
141,148 $
132,017
8,159
149,307 $
(3,514)
145,793 $
10,928
142,945
(3,679)
139,266
88
BOYD GROUP SERVICES INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
For the years ended December 31, 2023 and 2022
(thousands of U.S. dollars, except share and per share amounts)
BGSI uses an allowance account to record an estimate of potential impairment for accounts receivables.
Allowance for doubtful accounts
As at
Balance, beginning of period
(Decrease) increase in the allowance (net of recoveries and amounts
written off)
Balance, end of period
December 31,
2023
December 31,
2022
$
$
3,679 $
2,954
(165)
3,514 $
725
3,679
Liquidity risk
The following table details the Company’s remaining undiscounted contractual maturities for its financial
liabilities.
Accounts payable and
accrued liabilities
Long-term debt
Lease liabilities
Total
Within 1
year
1 to 2
years
2 to 3
years
3 to 4
years
4 to 5
years
After 5
years
$339,823
421,705
883,340
$339,823
22,038
141,905
$1,644,868 $503,766
$—
271,553
133,986
$405,539
$—
2,443
117,911
$120,354
$—
125,582
102,699
$228,281
$—
89
82,499
$82,588
$—
—
304,340
$304,340
Obligations of the Company are generally satisfied through future operating cash flows and the collection of
accounts receivable.
Market Risk and Sensitivity Analysis
Market risk is the risk that the fair value or future cash flows of financial instruments will fluctuate because of
changes in market prices. Components of market risk to which the Company is exposed are interest rate risk and
foreign exchange rate risk as discussed above.
BGSI has used a sensitivity analysis technique that measures the estimated change to net earnings and equity of
a 1% (100 basis points) difference in market interest rates. The sensitivity analysis assumes that changes in
market interest rates only affect interest income or expense of variable financial instruments not covered by
hedging instruments. For the year ended December 31, 2023 it is estimated that the impact of a 1% increase to
market rates would result in a $1,948 decrease (2022 – $2,201 decrease) to net earnings as well as
comprehensive earnings.
The currency risk sensitivity analysis is based on a 5% strengthening or weakening of the Canadian Dollar
against the U.S. Dollar and assumes that all other variables remain constant. Under this assumption, net
earnings for the year ended December 31, 2023 as well as comprehensive earnings would have changed by $nil
due to no foreign exchange contracts being in place at the end of 2023 and 2022.
89
BOYD GROUP SERVICES INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
For the years ended December 31, 2023 and 2022
(thousands of U.S. dollars, except share and per share amounts)
19.
CAPITAL
Shareholders’ Capital
Authorized:
Unlimited number of common shares
An unlimited number of common shares are authorized and may be issued pursuant to the Articles of
Incorporation of BGSI. All common shares have equal rights and privileges. Each common share is
redeemable and transferable. A common share entitles the holder thereof to participate equally in dividends,
including the dividends of net earnings and net realized capital gains of BGSI and dividends on termination or
winding-up of BGSI, is fully paid and non-assessable and entitles the holder thereof to one vote at all meetings
of shareholders for each share held.
20.
CONTRIBUTED SURPLUS
During the year, stock option accretion (net of issue costs) of $502 (2022 - $357) was credited to contributed
surplus.
21. CAPITAL STRUCTURE
The Company’s objective when managing capital is to maintain a flexible capital structure which optimizes the
cost of capital at acceptable risk. The Company includes in its definition of capital: equity, long-term debt,
convertible debentures, convertible debenture conversion features, non-controlling interest put options and call
liability, share based payment obligations, non-property obligations under lease liabilities, and unearned
rebates, net of cash.
The Company manages the capital structure and makes adjustments to it by taking into account changing
economic conditions, operating performance and growth opportunities. In order to maintain or adjust the
capital structure, the Company may adjust the amount of dividends it pays, purchase shares for cancellation
pursuant to a normal course issuer bid, issue new shares, issue new debt or replace existing debt with different
characteristics, issue convertible debentures, issue share options, expand the revolver, increase or decrease its
non-property lease liabilities, pursue alternative structuring of acquisitions, trigger call options on certain
acquisition obligations, negotiate unearned rebates, or settle certain acquisition obligations using a greater
amount of cash, or shares.
The Company monitors capital on a number of bases, including an interest coverage ratio, total debt to
Adjusted EBITDA ratios, return on invested capital, a debt to capital ratio, a current ratio, diluted earnings per
share and dividends per share. Total debt to Adjusted EBITDA is calculated as the Company’s total debt and
non-property lease liabilities but excluding convertible debentures divided by Adjusted EBITDA. Return on
invested capital is the ratio of Adjusted EBITDA to average invested capital. Adjusted EBITDA is a non-
GAAP financial measure, whose nearest GAAP measure is Cash Flow from Operations.
The Company’s strategy has been to maintain a strong statement of financial position including its cash
position and financial flexibility while maintaining consistent dividends in order to capitalize on growth
opportunities. In addition, the Company believes that, from time to time, the market price of the shares may
not fully reflect the underlying value of the shares and that at such times the purchase of shares would be in the
best interest of BGSI. Such purchases increase the proportionate ownership interest of all remaining
shareholders.
90
BOYD GROUP SERVICES INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
For the years ended December 31, 2023 and 2022
(thousands of U.S. dollars, except share and per share amounts)
The Company grows, in part, through the acquisition or start-up of collision and glass repair and replacement
businesses, or other businesses. Sources of capital that the Company has been successful at accessing in the
past include public and private equity placements, convertible debt offerings, the use of equity securities to
directly pay for a portion of acquisitions, capital available through strategic alliances with trading partners,
non-property lease financing, seller financing and both senior and subordinate debt facilities or deferring
possible future purchase price payments using contingent consideration and call or put options.
22. RELATED PARTY TRANSACTIONS
In certain circumstances the Company has entered into property lease arrangements where an employee of the
Company is the landlord. In most cases, the Company assumes these property lease arrangements initially in
connection with an acquisition. The property leases for these locations do not contain any significant non-
standard terms and conditions that would not normally exist in an arm’s length relationship, and the Company
has determined that the terms and conditions of the leases are representative of fair market rent values.
The following are the lease payment amounts for facilities under lease with related parties:
Landlord
Gerber Building No. 1
Ptnrp
Affiliated Person(s) Location
Lease
Expires
December 31,
2023
December 31,
2022
Timothy O'Day
South Elgin, IL
2029
103
102
23. SEGMENTED REPORTING
BGSI has one reportable line of business, being automotive collision repair and related services, with all
revenues relating to a group of similar services. In this circumstance, IFRS requires BGSI to provide
geographical disclosure. For the periods reported, all of BGSI’s sales were derived within Canada or the
United States of America. Reportable assets include property, plant and equipment, right of use assets,
goodwill and intangible assets which are all located within these two geographic areas.
Sales
Canada
United States
Reportable Assets
As at
Canada
United States
Year ended December 31,
2023
2022
$
231,601 $
194,415
2,714,387
2,237,903
$
2,945,988 $
2,432,318
December 31,
2023
December 31,
2022
$
220,786 $
213,392
1,849,309
1,604,254
$
2,070,095 $
1,817,646
91
BOYD GROUP SERVICES INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
For the years ended December 31, 2023 and 2022
(thousands of U.S. dollars, except share and per share amounts)
BGSI’s revenues are largely derived from the insurers of its customers, who are generally automobile owners.
Formal relationships with insurance companies such as Direct Repair Programs (“DRPs”) play an important
role in generating sales volumes for the Company. Although automobile owners still have the freedom of
choice of repair provider, insurance companies may educate the owner on the benefits of choosing a repairer in
their DRP network. Of the top five insurance companies that BGSI deals with, which in aggregate account for
approximately 53% (2022 – 54%) of total sales, one insurance company represents approximately 19% (2022
– 18%) of the Company’s total sales, while a second insurance company represents approximately 11% (2022
– 11%).
24. COMPENSATION OF KEY MANAGEMENT
Salaries and short-term employee benefits
Long-term incentive plan
Share options
For the years ended December 31,
2023
2022
$
$
7,531 $
3,155
1,119
11,805 $
5,264
2,263
399
7,926
Key management includes BGSI’s Directors as well as the most senior officers of the Company and
Subsidiary Companies.
25. SHARE-BASED COMPENSATION
Certain members of the management team of the Company, as well as the Board of Directors of the Company
participate in share-based compensation plans. These plans are cash-settled, with compensation expense
determined based on the fair value of the associated liability at the end of the reporting period until the awards
are settled.
Long-term incentive plan
On January 1, 2021, January 1, 2022, and January 1, 2023, Performance Share Unit awards were granted to
certain executive officers for the 2021, 2022 and 2023 grant years. Performance Share Units are tied to share
value from date of grant to the date of vesting and will be paid out in cash over a three-year period, subject to
the terms of the plan. Performance Share Units represent the right to receive payments linked to BGSI’s share
value, conditional upon the achievement of one or more objective performance goals. The dividend rate
declared by BGSI on issued and outstanding shares of the Company is also applied to the Performance Share
Units. The dividend amount on the Performance Share Units is converted into additional Performance Share
Units based on the market value of the Company’s shares at the time of the dividend. These additional
Performance Share Units vest at the same time as the Performance Share Units that the dividend rate was
applied on.
The 2021, 2022, and 2023 awards granted include non-market performance conditions. The impact of market
and non-market performance conditions is recognized through the adjustment of the award that is expected to
vest. At the end of each reporting period, BGSI re-assesses its estimates of the number of Performance Share
Units that are expected to vest and recognizes the impact of the revision to compensation expense in earnings
over the vesting period.
92
BOYD GROUP SERVICES INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
For the years ended December 31, 2023 and 2022
(thousands of U.S. dollars, except share and per share amounts)
The fair value of each outstanding Performance Share Unit is estimated based on the fair market value of the
Company’s shares at the grant date, subsequently adjusted for additional shares granted based on the
reinvestment of notional dividends and the market value of the shares at the end of each reporting period. The
associated compensation expense is recognized over the vesting period, factoring in the probability of the
performance criteria being met during that period.
On January 1, 2021, January 1, 2022, and January 1, 2023 Restricted Share Units were granted to certain
executive officers for the 2021, 2022 and 2023 grant years. Restricted Share Units are valued by reference to
share value from date of grant to the date of vesting and will be paid out in cash over a two to three-year
period, subject to the terms of the plan. The dividend rate declared by BGSI on issued and outstanding shares
of the Company is also applied to the Restricted Share Units. The dividend amount on the Restricted Share
Units is converted into additional Restricted Share Units based on the market value of the Company’s shares at
the time of the dividend. These additional Restricted Share Units vest at the same time as the Restricted Share
Units that the dividend rate was applied on.
Directors Deferred Share Unit Plan
A Directors Deferred Share Unit Plan (“DSUP”) is administered through BGSI and requires independent
Directors to receive at least 60% of their Director compensation in the form of deferred shares, which are
essentially notional shares of BGSI and are redeemable for cash on termination. Directors may elect to receive
up to 100% of their Director compensation in the form of deferred shares. The number of deferred shares to
which a Director is entitled will be adjusted for the payment of dividends.
The fair value of each outstanding Director Deferred Share Unit is estimated based on the fair market value of
BGSI’s shares at the grant date, subsequently adjusted for additional shares granted based on the reinvestment
of notional dividends and the market value of the shares at the end of each reporting period.
26. EMPLOYEE EXPENSES
Salaries and short-term employee benefits
Post-employment benefits
Long-term incentive plan
Share options
For the years ended December 31,
2023
2022
$
1,149,282 $
944,862
5,757
6,025
436
5,017
2,600
399
$
1,161,500 $
952,878
93
BOYD GROUP SERVICES INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
For the years ended December 31, 2023 and 2022
(thousands of U.S. dollars, except share and per share amounts)
27. DEFINED CONTRIBUTION PENSION PLANS
The Company has defined contribution pension plans for certain employees. The Company matches U.S.
employee contributions at rates up to 6.0% of the employees’ salary. The expense and payments for the year
were $5,757 (2022 - $5,017).
28. EARNINGS PER SHARE
Net earnings
Basic weighted average number of shares
Add:
Stock Option Plan
Average number of shares outstanding - diluted basis
Basic earnings per share
Diluted earnings per share
Year ended December 31,
2023
2022
$
86,656 $
40,962
21,472,194
21,472,194
3,670
21,475,864
$
$
4.04 $
4.04 $
—
21,472,194
1.91
1.91
For the year ended December 31, 2023, the impact of the stock options issued in 2021 and 2022 were included
in the diluted average number of shares outstanding. The stock options issued in 2023 could have potentially
diluted the basic earnings per share, but their impact was anti-dilutive during this period.
For the year ended December 31, 2022, the impact of the stock options issued in 2021 and 2022 could have
potentially diluted the basic earnings per share, but their impact was anti-dilutive during this period.
29. STOCK OPTION PLAN
During the first quarter of 2021, the Company instituted a stock option plan for senior management, which was
approved by shareholders on May 12, 2021. The Company's stock option plan allows for the granting of options
up to an amount of 250,000 Common shares under this plan. Each tranche of the options vests equally over two,
three, four and five year periods. The term of an option shall be determined and approved by the People,
Culture and Compensation Committee; provided that the term shall be no longer than ten years from the grant
date.
On March 31, 2021 the Company issued 13,831 options under the stock option plan with a grant date fair value
of C$56.99 per option and an exercise price of C$219.21 per option. As at December 31, 2023, 11,232 options
remain issued and outstanding, 25% of which have vested. Issue costs of $105 were incurred with respect to the
stock option plan.
On March 31, 2022 the Company issued 18,878 options under the stock option plan with a grant date fair value
of C$47.08 per option and an exercise price of C$164.68 per option. As at December 31, 2023, 16,533 options
remain issued and outstanding. None of the options are exercisable at period end. Issue costs of $nil were
incurred with respect to the 2022 options issued under the stock option plan.
94
BOYD GROUP SERVICES INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
For the years ended December 31, 2023 and 2022
(thousands of U.S. dollars, except share and per share amounts)
On March 29, 2023 and during the second quarter of 2023 the Company issued 28,292 and 435 options,
respectively, under the stock option plan with a grant date fair value of C$71.64 per option and an exercise price
of C$211.26 per option. As at December 31, 2023, 26,794 options remain issued and outstanding. None of the
options are exercisable at period end. Issue costs of $nil were incurred with respect to the 2023 options issued
under the stock option plan.
30. CHANGES IN NON-CASH OPERATING WORKING CAPITAL ITEMS
Accounts receivable
Inventory
Prepaid expenses
Accounts payable and accrued liabilities
Income taxes, net
For the years ended December 31,
2023
2022
$
(5,962) $
2,288
(5,153)
29,946
(2,047)
$
19,072 $
(37,641)
(11,649)
(7,062)
52,964
1,865
(1,523)
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BOARD OF DIRECTORS
Boyd Group Services Inc. Board of Directors consists of ten members – two that are officers or retired officers of
BGSI and eight that are independent Directors. The Independent Chair of the Board is David Brown. Boyd Group
Services Inc. Board of Directors has established three standing committees: The Corporate Governance and
Sustainability Committee, The Audit Committee, and the People, Culture and Compensation Committee.
The Corporate Governance and Sustainability Committee is chaired by Sally Savoia and includes Robert Espey and
William Onuwa. The Audit Committee is chaired by William Onuwa and includes John Hartmann and Christine
Feuell. The People, Culture and Compensation Committee is chaired by Violet Konkle and includes Robert Gross
and John Hartman.
David Brown is an Executive Vice-President of Richardson Financial Group Limited and a Managing Director of
RBM Capital Limited (a private investment firm). He was previously the CEO of Richardson Capital Limited, a
private equity arm of James Richardson & Sons, Limited, the Corporate Secretary of James Richardson & Sons,
Limited, and a partner in the independent law and accounting firm of Gray & Brown. Mr. Brown has considerable
experience in private equity investment and management, senior management and in advising and working with
family businesses in the areas of taxation, mergers, acquisitions, divestitures, corporate reorganizations, financings,
management, ownership transitions and estate planning. Mr. Brown also has considerable public company
experience. He currently serves as the Independent Chair of the Board of Boyd Group Services Inc. and serves as a
director and Chair of the Audit Committee of Pollard Banknote Limited and a director of RF Capital Group Inc. He
previously served on the Manitoba Hydro- Electric Board. He has served various Manitoba charities including acting
as a director of the Misericordia Hospital and Pavilion Gallery Museum, Inc. and as Co-chair of Major Donors for
the Children’s Hospital Foundation’s Capital Campaign. He is a graduate of the University of Manitoba law school
(gold medalist), and is a Chartered Professional Accountant.
Brock Bulbuck served as Executive Chair of BGSI from 2020 to 2021. Prior to this role, Mr. Bulbuck served as
Chief Executive Officer from 2010 to 2020. After joining Boyd in 1993, Mr. Bulbuck served in many senior
leadership roles and played a leading role in the overall development and growth of the business. Mr. Bulbuck also
serves as Independent Board Chair of North West Company. He is also a past Chairperson of the Winnipeg Football
Club Board of Directors, a past member of the Canadian Football League Board of Governors and a current
Director of Pan Am Clinic Foundation. Mr. Bulbuck has a Bachelor of Commerce (Honors) degree from the
University of Manitoba and is a Chartered Professional Accountant.
Robert Espey was appointed President and Chief Executive Officer in 2011 of Parkland Corporation ("Parkland")
and has successfully led the transformation of Parkland from a Western Canadian regional independent into a
leading international consolidator of convenience retail and fuel marketing businesses with operations in 25
countries. Under Mr. Espey's leadership, and in addition to network of over 4,000 retail locations, Parkland is a
leader in manufacturing low carbon fuels and is rapidly building an ultrafast electric vehicle charging network to
serve growing demand in select markets. Mr. Espey has overseen over 60 acquisitions, including of Chevron
Canada’s convenience retail and downstream fuel business, the Ultramar retail business from CST brands, the
expansion of Parkland into the U.S., and in January 2019 the addition of the Sol which expanded Parkland’s
operations into the Caribbean region. Previously, Mr. Espey served as Chief Operating Officer from 2010 to 2011,
and Vice President, Retail Markets from 2008 to 2010. Prior to joining Parkland, Mr. Espey held a variety of senior
management roles across a diverse group of industry sectors, both internationally and domestically, including as
President and Chief Executive Officer of FisherCast Global Corporation. Mr. Espey holds a Bachelor of Engineering
(Mechanical) from Royal Military College and a Masters in Business Administration from the University of Western
Ontario. Mr. Espey is a senior advisor to Enzinc, an advanced developer of metal air battery technology, a member
of the Board of Directors of Parkland Corporation and past Chair of the Canadian Fuels Association.
96
Christine Feuell has nearly 30 years of career experience transforming brands and business units to deliver strong
customer value and profitable growth in the automotive, supply chain automation and building technologies
industries. Ms. Feuell’s automotive industry experiences include OEMs (Ford, Stellantis) and Tier 1 Suppliers
(Johnson Controls, Adient) in which she created and launched innovative products, technologies and services for the
OEM and Aftermarket Channels. Since 2021, she has been serving as CEO, Chrysler Brand at Stellantis, a leading
global automotive mobility and technology leader, where she is transforming the Chrysler brand to full-
electrification and delivering break-through seamlessly connected technologies and experiences. Prior to her role at
Chrysler, Ms. Feuell was the Chief Commercial Officer at Honeywell, where she was responsible for creating and
delivering advanced automation software and technology solutions for E-Commerce, Retail, Logistics, Health and
Pharma industries. Ms. Feuell also serves as an Advisory Board Member for the Michigan State University Broad
School of Business, Board Director for Friends of the Children Detroit Chapter Non-Profit, and is a champion for
diversity and mentoring programs at Stellantis, Michigan State and her local communities. Ms. Feuell is the
Executive Sponsor for the Women of Stellantis and Diversibilities Business Resource Groups.
Robert Gross is the past Executive Chair of Monro, Inc., the largest chain of company-operated automotive
undercar repair and tire service facilities in the United States. He served as CEO of Monro from 1999 until October
2012 and as Executive Chair from October 2012 to August 2017. Prior to his time at Monro, he served as Chair and
CEO at Tops Appliance City, Inc. and before that as President and COO at Eye Care Centers of America, Inc., a
Sears, Roebuck & Co. company.
John Hartmann is Chief Executive Officer of Ascend Wellness Holdings Inc., a U.S. publicly listed company with
assets in seven states. Mr. Hartmann is the former President of buybuyBaby and COO of Bed Bath & Beyond from
2020 to 2022. Previously, from 2013-2020, he was the President & Chief Executive Officer at True Value Company,
a privately owned U.S. hardware wholesaler and manufacturer. Mr. Hartmann also led New Zealand-based Mitre 10
as Chief Executive Officer from 2010 to 2013, and held various executive positions at HD Supply, The Home
Depot, and Cardinal Health. Prior to his corporate career, he served as a special agent of the Federal Bureau of
Investigation. Mr. Hartmann previously served on the Board and Audit Committee of AmeriGas, prior to UGI’s
acquisition, and Board of HD Supply. In addition to serving on the Board of BGSI, Mr. Hartmann currently serves
as an Independent Director of Freedom VCM Holdings, owners of The Vitamin Shoppe, American Freight, Pet
Supplies Plus, amongst others.
Violet Konkle is the past President and Chief Executive Officer of The Brick Ltd. Prior to joining The Brick in
2010 as President, Business Support, she held a number of positions with Walmart Canada, including Chief
Operating Officer and Chief Customer Officer. Ms. Konkle also held a number of senior executive positions with
Loblaw Companies Ltd., including Executive Vice President, Atlantic Wholesale Division. Ms. Konkle is a director
of The North West Company Inc. and GFL Environmental, as well as three privately held companies including
Bailey Metal Products, Elswood Investment Corporation and Abarta. Ms. Konkle previously served on the Advisory
Board of Longo’s Brothers Fruit Markets Inc., a privately held company. She is a past director of Dare Foods, The
Brick Ltd., Trans Global Insurance, the Canadian Chamber of Commerce and the National Board of Habitat for
Humanity.
Timothy O’Day is the President and CEO of BGSI. He joined Gerber Collision & Glass in February 1998. With
Boyd Group’s acquisition of Gerber in 2004, he was appointed COO for Boyd’s U.S Operations. In 2008, he was
appointed President and COO for U.S. Operations. On January 4, 2017, Mr. O’Day was appointed President and
COO of Boyd Group Income Fund, and on January 2, 2020, he was appointed President and CEO of BGSI. In
addition, Mr. O’Day serves on the Board of Directors of RB Global, Inc. 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 also served on the I-CAR Board as Immediate Past Chair until
August 2022 and served on the Board of the Collision Repair Education Foundation until March 2016.
97
William Onuwa is currently EVP and Chief Audit Executive at Royal Bank of Canada (“RBC”). Prior to this role,
he was the SVP & Chief Risk Officer for Wealth Management, RBC Georgia and the Insurance Group. He held a
number of executive positions for GE Capital Corporation in both the U.S. and the U.K. before joining RBC in
2007. He holds a Doctorate degree from the University of Surrey, U.K. Mr. Onuwa was recently the Chair of two
not-for-profit boards, Yonge Street Mission and Holland Bloorview Kids Rehabilitation Hospital, and had also
served on the subsidiary boards of various RBC insurance companies as a director from 2007 to 2016. Mr. Onuwa is
currently a member of the board of governors at University of Guelph and sits on various committees as well.
Sally Savoia is a former Vice President and Chief Human Resource Officer for Praxair Inc. Subsequent to her
retirement in 2014, and until 2020, Ms. Savoia served as an independent corporate consultant. Ms. Savoia’s human
resources experience includes diversity and inclusion efforts, executive compensation design and implementation,
executive level succession planning, global talent management, leadership development, and global benefits design.
98
CORPORATE DIRECTORY
COMPANY EXECUTIVE OFFICERS
Timothy O’Day
President & Chief Executive Officer
Jeff Murray
Executive Vice President & Chief
Financial Officer
Brian Kaner*
Executive Vice President & Chief
Operating Officer, Boyd Group
Collision
Creighton Warren*
Chief Information Officer
Jason Hope*
Vice President, Corporate
Development and Strategic Projects
Kim Morin *
Vice President & Chief Human
Resources Officer
John Wysseier *
Chief Operating Officer, Glass
*
*Officers of subsidiary companies only
———————————————————————————————————————
CORPORATE OFFICE
1745 Ellice Avenue, Unit C1
Telephone: (204) 895-1244
Winnipeg, Manitoba, Canada
Fax: (204) 895-1283
R3H 1H9
Website: www.boydgroup.com
———————————————————————————————————————
For location information, please visit us at www.boydgroup.com
99
SHAREHOLDER INFORMATION
BOYD GROUP SERVICES INC. SHARES AND EXCHANGE LISTING
Shares of BGSI are listed on the Toronto Stock Exchange under the symbol BYD.TO.
Registrar, Transfer Agents and
Distribution Agents
Computershare Trust Company
8th Floor, 100 University Avenue
Toronto, Ontario
M5J 2Y1
Legal Counsel
Auditors
Thompson Dorfman Sweatman LLP
1700-242 Hargrave Street
Winnipeg, Manitoba
R3C 0V1
Deloitte LLP
2200 – 360 Main Street
Winnipeg, Manitoba
R3C 3Z3
Bank Syndicate Lead Member
Additional Bank Syndicate Members
The Toronto-Dominion Bank
TD North Tower
77 King Street West, 25th Floor
Toronto, Ontario
M5K 1A2
Bank of America N.A.
The Bank of Nova Scotia
National Bank of Canada
Canadian Imperial Bank of Commerce
———————————————————————————————————————
Annual General Meeting
www.virtualshareholdermeeting.com/BOYD2024
Wednesday, May 15, 2024
1:00 p.m. (CT)
100