BOYD GROUP SERVICES INC.
2024 Annual Report
BOYD GROUP SERVICES INC.
2024 Annual Report
_____________________________________________________________________
Table of Contents
Report to Shareholders……..…………………………………………….……..….
3
Message from the Independent Board Chair………………..……………….…. 5
Management’s Discussion & Analysis……………………………..………...…
7-44
Certification of Annual Filings …………..……………………………..…………
45-48
Consolidated Financial Statements
Management’s Responsibility for Financial Reporting…………...……
50
Independent Auditor’s Report………………………………………….…
51
Consolidated Statements of Financial Position………………………... 55
Consolidated Statements of Changes in Equity….………...………….
56
Consolidated Statements of Earnings……….………………………….
57
Consolidated Statements of Comprehensive Earnings………....…….
57
Consolidated Statements of Cash Flows…………………………….…
58
Notes to Consolidated Financial Statements………..……………….… 59-91
Board of Directors…………………………………………………………………. 92-94
Corporate Directory……………………………………………………….……….
95
Shareholder Information……………………………………………………………..
96
_____________________________________________________________________________________________
To our Shareholders,
Throughout 2024, Boyd consistently posted market share gains in a challenging environment characterized by low
claims volumes, driven by significant insurance premium inflation and overall economic uncertainty, as well as mild
winter weather, with 2024 being the warmest winter in over 129 years. In spite of these factors, in which industry
sources reported a year-over-year decrease in repairable claims of 9.0% for all losses and 7.9% excluding
comprehensive claims, Boyd posted year-over-year same-store sales declines of only 1.8%, demonstrating Boyd’s
ability to gain market share in this very challenging environment.
Total sales for 2024 totaled $3.1 billion, representing a 4.2% increase when compared to the $2.9 billion achieved in
2023. Same-store sales1 decreased 1.8% offset by contributions from 155 new locations that had not been in
operation for the full comparative period, which added $187.2 million of incremental sales. Same-store sales levels
were significantly impacted by low claims volumes throughout the year. The internalization of scanning and
calibration services, progress in Boyd’s repair first strategy and focus on the use of cost effective alternative parts,
continued to deliver strong value by lowering repair costs for the Company’s customers, that, despite being
beneficial to gross margin, reduced sales relative to the prior year. In 2024, 40% of Boyd’s scanning and calibration
services were completed utilizing internal resources, with a near term ambition to grow this to 80%. In order to
support this growth, the workforce providing scanning and calibration services grew by over 100% from January 1,
2024 to December 31, 2024.
Adjusted EBITDA1 for 2024 was $334.8 million, or 10.9% of sales, compared with $368.2 million, or 12.5% of
sales in 2023. The decrease in Adjusted EBITDA was primarily the result of declines in repairable claims volumes
for services, which resulted in same-store sales declines and a high ratio of operating expenses as a percentage of
sales. Although operating expenses as a percentage of sales was positively impacted by reductions in staffing made
to better align with current levels of demand, as well as reduced incentive compensation and recruiting costs, these
impacts were more than offset by fixed costs on existing and new locations.
Boyd posted net earnings of $24.5 million in 2024, or 0.8% of sales, compared to $86.7 million, or 2.9% of sales in
2023 and earnings per share of $1.14 per share for the year ended December 31, 2024 compared to $4.04 for the
same period of 2023. Impacting net earnings were fair value adjustments to financial instruments, as well as
acquisition and transformational cost initiatives (net of tax). After adjusting for these items, Adjusted net earnings1
for 2024 was $30.9 million or 1.0% of sales. This compares to Adjusted net earnings of $89.7 million or 3.0% of
sales in 2023. Adjusted net earnings for the year ended December 31, 2024 was $1.44 per share, compared to $4.18
per share in 2023. Net earnings and Adjusted net earnings for the year were negatively impacted by the decrease in
Adjusted EBITDA, as well as increased depreciation expense and increased finance costs. Depreciation and finance
costs increased as a result of investments in growth and the investment in network technology upgrades during a
period of lower sales and Adjusted EBITDA. These investments align with Boyd’s ESG sustainability roadmap to
responsibly address data privacy and cyber security.
BOYD GROUP SERVICES INC.
REPORT TO SHAREHOLDERS
3
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 transformational cost initiatives), 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 19, 2025) for the period ended December 31, 2024, starting on page 6 of this Annual
Report. A copy of Boyd’s MD&A for the period ended December 31, 2024 can be accessed via the SEDAR Web site (www.sedarplus.com).
With respect to the balance sheet, at December 31, 2024, BGSI held total debt, net of cash, of $1,231.6 million,
compared to $1,114.5 million at December 31, 2023. Total debt, net of cash, includes lease liabilities of $744.3
million at December 31, 2024, compared to $715.3 million at December 31, 2023. Debt, net of cash, before lease
liabilities increased when compared to the prior year primarily as a result of location growth. The Company’s
strategy has been to not hold real estate except where it is necessary for growth opportunities. Certain start-up
locations necessitate short term holding of real estate until the build is complete and operations have begun. During
the year 2024, the Company completed sale leaseback transactions for proceeds of $64.9 million. The sale leaseback
transactions allowed the Company to replenish capital that can be redeployed to further grow the business.
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 61.2 cents per share annualized, up from 60.0 cents per share.
While the Company has been successfully executing on our long-term growth goals, 2024 brought with it some
challenging economic and industry conditions. The Company has focused on increasing value to customers and
shareholders, and has consistently performed above industry, with a focus on emerging from these conditions in a
strong position. In spite of the initiatives in place, current market conditions may cause a slight delay in Boyd
achieving its long-term growth goal of doubling the size of the business on a constant currency basis from 2021 to
2025 against 2019 sales.
Boyd is pleased to have announced a new five-year goal, which includes growing revenue to $5 billion in 2029,
doubling Adjusted EBITDA dollars from 2024-2029, returning to an Adjusted EBITDA margin of 14%, expanding
market share and retaining a leadership position in all markets served, and achieving top-tier profitability in the
North American collision industry (“Double Down”). Boyd is accelerating its focus on operational excellence and
profitability with “Project 360”, a company-wide transformational cost initiative launched in partnership with a
leading global consulting firm during the fourth quarter of 2024 that will support the Double Down goal. Project
360 is projected to result in $100 million in annual recurring cost savings over the plan period with upfront
investment and transition costs incurred to achieve these benefits estimated to be in the $20-$23 million range over
the coming quarters.
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. 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
Chief Executive Officer
4
______________________________________________________________________________
To our Shareholders,
Following Boyd’s delivery of record sales and improved profitability in 2023, benefiting from collision repair
demand outstripping capacity, the collision repair industry experienced an abrupt “about face”. Year-over-year
repairable claims fell 9.0% driven, we believe, by significant insurance premium inflation, overall economic
uncertainty and the warmest winter in the last 129 years. Although the associated fall in demand inevitably brought
with it lower sales and profitability, Boyd delivered significant market share gains – year-over-year same store sales
declined only 1.8% against a 9.0% decline in repairable claims. A strong testament to the resiliency and strength of
the Boyd team and business model.
We remain highly confident in the Industry outlook, Boyd’s position therein and our ability to continue to grow our
market share and profitability through a combination of location and organic growth. Roughly 45% of the $50
billion North American collision repair market is represented by very small players – our thesis is firmly intact.
Consistent with that confidence, Boyd recently announced its new five year targets and the road map to achieve
those targets – grow revenue to $5.0 billion and double Adjusted EBITDA1 by 2029, and return our Adjusted
EBITDA margin to 14% over the next five years.
We recently announced that Tim O’Day will retire as CEO effective May 14th of this year. Over the last twenty plus
years, the last five of which as CEO, Tim has been an integral and imperative part of Boyd’s amazing growth and
success. On behalf of the Board and the entire Boyd team, I would like to thank Tim for his excellent and
unwavering leadership. It has been an absolute pleasure working with Tim and he will be truly missed.
We are very pleased and excited that Brian Kaner, our current President and COO, will succeed Tim as CEO. Since
joining Boyd in 2022, Brian has helped and enabled the Boyd team to navigate ever-changing economic and
industry conditions, brought a laser focus on increasing value to our customers, shareholders and other stakeholders
and has been instrumental in developing Boyd’s near, mid and longer term strategy. We have no doubt that Brian is
the right person for the future.
It is with profound sadness that I communicate that our long-serving Board Member, Robert Gross, unexpectedly
and suddenly passed away on November 18, 2024. Mr. Gross was a dedicated and valued member of our Board,
having served on the Board since 2012, and having held positions on the Governance & Sustainability Committee as
well as the People, Culture and Compensation Committee. He was deeply committed to the success and growth of
Boyd and was widely respected for the guidance and insights he provided. He was an incredible leader and friend,
and his presence on our Board is deeply missed.
BOYD GROUP SERVICES INC.
MESSAGE FROM THE INDEPENDENT BOARD CHAIR
5
1Adjusted EBITDA (earnings before interest, income taxes, depreciation and amortization, adjusted for the fair value adjustments related to
contingent consideration, as well as acquisition and transformational cost initiatives), 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 19, 2025) for the period ended December 31, 2024, starting on page 6 of this Annual
Report. A copy of Boyd’s MD&A for the period ended December 31, 2024 can be accessed via the SEDAR Web site (www.sedarplus.com).
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
6
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 Company also operates
a Mobile Auto Solutions (“MAS”) service that offers scanning and calibration services. The following is a geographic
breakdown of locations by trade name and location as at March 18, 2025.
984 locations
46
locations
856 locations
Alberta
16
Florida ( +4 )*
80
Missouri ( +4 )*
17
British Columbia
13
Michigan ( +1 )*
77
Alabama ( +5 )*
15
Manitoba
13
Illinois
66
Tennessee ( +3 )*
15
Saskatchewan
4
California ( +4 )*
52
Maryland ( +1 )*
14
Texas ( +8 )*
42
Minnesota ( +3 )*
14
82
locations
Georgia ( +4 )*
42
Pennsylvania ( +3 )*
14
New York
41
Kansas
11
Washington ( +1 )*
39
Oregon
11
Ontario
82
Wisconsin ( +1 )*
38
Nevada
8
North Carolina ( +1 )*
37
Hawaii ( +1 )*
6
Indiana ( +1 )*
35
Iowa ( +2 )*
6
Ohio
34
Kentucky
6
Oklahoma ( +1 )*
28
Utah ( +1 )*
6
Louisiana ( +4 )*
27
Arkansas
3
Arizona ( +1 )*
26
Nebraska ( +3 )*
3
Colorado
22
Idaho
1
South Carolina
19
Virginia ( +1 )*
1
The above numbers include 33 intake locations, net of
one closed location
The above numbers include one intake location and two fleet locations co-located
with collision repair centers, net of four closed location
* Locations added in 2024 and up to March 18, 2025
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, 2024, including material
transactions and events of BGSI up to and including March 18, 2025, 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, 2024, included on pages 49 to 91 of the annual report, and as filed on SEDAR+ at www.sedarplus.com.
7
SIGNIFICANT EVENTS
On March 15, 2024, the BGSI Board of Directors declared a cash dividend for the first quarter of 2024 of C$0.15 per
common share. The dividend was paid on April 26, 2024 to common shareholders of record at the close of business on March
31, 2024.
On March 26, 2024, BGSI extended its existing revolving credit facilities in the aggregate amount of $550 million for a four-
year term, with an accordion feature which can increase the credit facilities to a maximum of $850 million (the “Facilities”).
The Facilities will mature in March 2028. The existing $125 million Term Loan A maturing in March 2027 remains
unchanged.
On June 17, 2024, the BGSI Board of Directors declared a cash dividend for the second quarter of 2024 of C$0.15 per
common share. The dividend was paid on July 29, 2024 to common shareholders of record at the close of business on June
30, 2024.
On August 8, 2024, BGSI announced the appointment of Brian Kaner as President & Chief Operating Officer, effective
immediately. Concurrent with this change, Tim O’Day remains Chief Executive Officer (“CEO”), however relinquishes the
“President” title, which he has held since 2017.
On September 17, 2024, the BGSI Board of Directors declared a cash dividend for the third quarter of 2024 of C$0.15 per
common share. The dividend was paid on October 29, 2024 to common shareholders of record at the close of business on
September 30, 2024.
On October 11, 2024, BGSI announced the temporary closure of 47 locations in the states of Florida, Georgia, North Carolina
and South Carolina due to Hurricane Helene, followed by the temporary closure of 52 locations in the state of Florida as a
result of Hurricane Milton.
On December 2, 2024, the BGSI announced that effective May 14, 2025, Chief Executive Officer Timothy O’Day will step
down from his current role, to be succeeded by Brian Kaner, current President and Chief Operating Officer of Boyd. These
changes are planned to be effective as of the date of the Annual General Meeting of Boyd, which is scheduled to occur on
May 14, 2025.
On December 17, 2024, the BGSI Board of Directors declared a cash dividend for the fourth quarter of 2024 of C$0.153 per
common share. The dividend was paid on January 29, 2025 to common shareholders of record at the close of business on
December 31, 2024.
On February 26, 2025, BGSI announced the launch of its latest five-year goal designed to drive growth and enhance
profitability through 2029.
On March 17, 2025, the BGSI Board of Directors declared a cash dividend for the first quarter of 2025 of C$0.153 per
common share. The dividend will be paid on April 28, 2025 to common shareholders of record at the close of business on
March 31, 2025.
8
The Company completed and opened the following number of collision repair acquisitions and start up locations during the
periods listed:
Location
Number of locations
added through
acquisition
Number of start ups
Total
January 1, 2024 to December 31, 2024
37
12
49
January 1, 2025 to March 18, 2025
3
6
9
Total
40
18
58
During the year ended December 31, 2024, the Company opened seven start-up glass locations, acquired one glass location
and four calibration businesses. From January 1, 2025 up to the reporting date of March 18, 2025, the Company acquired two
glass location.
OUTLOOK
Boyd is pleased to have announced a new five-year goal, which includes growing revenue to $5 billion in 2029, doubling
Adjusted EBITDA1 dollars from 2024-2029, returning to an Adjusted EBITDA margin of 14%, expanding market share and
retaining a leadership position in all markets served, and achieving top-tier profitability in the North American collision
industry (“Double Down”). Boyd is accelerating its focus on operational excellence and profitability with “Project 360”, a
company-wide transformational cost initiative launched in partnership with a leading global consulting firm during the fourth
quarter of 2024 that will support the Double Down goal. Project 360 is expected to result in $100 million in annual recurring
cost savings over the plan period with upfront investment and transition costs incurred to achieve these benefits estimated to
be in the $20-$23 million range over the coming quarters.
In the near term, the market dynamics that impacted results throughout 2024, including a decline in claims volumes due to
insurance premium inflation and overall economic uncertainty, have continued into early 2025, with repairable claims
experiencing a greater year-over-year decline during the first two months of 2025 than was experienced in the fourth quarter
of 2024 in spite of the return of more normal winter weather conditions. Despite this fact, thus far in the first quarter of 2025,
same-store sales has improved compared to the fourth quarter, but is not yet positive; continuing to demonstrate market share
gains. As in prior years, the first quarter is burdened by higher payroll taxes that occur early in the year, while the fourth
quarter of 2024 benefited from expense accrual reductions, as certain expense estimates were firmed up at amounts that were
lower than previously estimated and accrued. These factors, along with the challenging claims environment are resulting in
Adjusted EBITDA dollars, thus far in the first quarter, trending slightly below levels achieved in the first quarter of the prior
year. While it is still too early to determine if claims volumes have bottomed, Boyd remains confident in the industry’s long-
term outlook and believes the transformational cost saving initiatives initiated will drive improved margins in the coming
quarters.
Boyd remains committed to improving gross margin, through initiatives such as the internalization of scanning and
calibration services. The need for scanning and calibration services continue to grow and Boyd’s ability to internalize these
services continues to scale. The Company anticipates achieving 80% internalization of scanning and calibration services
within the next 2-3 years.
Growth through acquisition as well as through start-up sites continues. Although start-up sites have a longer development
cycle and ramp-up period, these locations offer a number of advantages and as a result the Company plans to continue
increasing the proportion of growth using this approach. Over the longer-term, the proportion of acquisition to start-up sites is
expected to be approximately even. The pipeline for start-up sites currently includes scheduled openings of seven locations
in Q1 2025, and an additional 21 locations through the balance of the year.
9
1 As defined in the non-GAAP financial measures and ratios section of the MD&A
While the Company has been successfully executing on Boyd’s long-term growth goal of doubling the size of the business on
a constant currency basis from 2021 to 2025 against 2019 sales, over the past year and into 2025, the market has experienced
unanticipated economic and industry conditions. The Company has focused on increasing value to customers and
shareholders, and has consistently performed above industry, with a focus on emerging from these conditions in a strong
position. In spite of the initiatives in place, current market conditions may cause a slight delay in Boyd achieving its long-
term growth goal of 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 $50 billion in annual revenue. The
industry is highly fragmented, consisting of many 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
39% 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
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.
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.
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, although current market conditions
may cause a slight delay in Boyd achieving this long-term growth goal. Boyd will continue to pursue accretive growth
10
through a combination of organic growth (same-store sales2 growth) as well as adding new locations to the network in the
United States and Canada.
BUSINESS STRATEGY
Boyd is pleased to have announced a new five-year goal, which includes growing revenue to $5 billion in 2029, doubling
Adjusted EBITDA dollars from 2024-2029, returning to an Adjusted EBITDA margin of 14%, expanding market share and
retaining a leadership position in all markets served, and achieving top-tier profitability in the North American collision
industry (“Double Down”). Double Down is supported by “Project 360”, a company-wide transformational cost initiative
launched in partnership with a leading global consulting firm during the fourth quarter of 2024. Project 360 is expected to
result in $100 million in annual recurring cost savings over the plan period with upfront investment and transition costs
incurred to achieve these benefits estimated to be in the $20-$23 million range over the coming quarters.
11
2 As defined in the non-GAAP financial measures and ratios section of the MD&A
People
Having the right people in the right roles with the right capabilities enables Boyd to be a market leading operator delivering
exceptional customer experiences. The workforce drives the success of Boyd’s business, and the Company strives to create
an environment where employees can reach their full potential and build long-term careers. Boyd’s ambition is to be a top
employer in the collision, calibration and glass sector by attracting, developing, and retaining the strongest talent in the
industry enabled by a culture of accountability. Boyd is committed to addressing labor market challenges by focusing on
retention and recruitment, investing in the Technician Development Program and focusing on opportunities for productivity
improvements.
Growth
Boyd’s $5 billion revenue target will be achieved by continuing the Company’s proven growth strategy, namely the
combination of same-store sales growth and new location growth with a focus on securing a number-one or number-two
market position in all markets served. The Company expects to generate 3% to 5% in average annual growth from same-store
sales growth and an additional 5% to 7% in average annual growth through the addition of new locations. Beyond same-store
sales growth and single shop expansion, Boyd will continue to be a strategic buyer of larger multi-location businesses, and if
successful, this would be incremental to the revenue growth goals.
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 a focus on growing car count volume through existing locations and
increasing scanning and calibration services.
Boyd’s inorganic model for growth includes new start-up locations as well as single-location and multi-location acquisitions.
The Company believes that start-up facilities offer a number of advantages and as a result plans to continue increasing the
proportion of growth using this approach. This approach allows Boyd to design and develop a facility that has a preferred
footprint and flow. Being able to accommodate Boyd’s future needs in terms of glass and calibration services is another
benefit. These facilities are also attractive from a customer and employee perspective. When a start-up facility is put into the
market, consideration is given to new growth markets as well as expansion of large markets into areas that do not have body
shops.
12
Operational Excellence & Innovation
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 sales3 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.
Boyd is committed to growing the business through adjacent services, such as the internalization of scanning and calibration
services, which represented 5% of total revenues in 2024. In 2024, 40% of Boyd’s scanning and calibration services were
completed utilizing internal resources, with a near term ambition to grow this to 80%. In order to support this growth, the
workforce providing scanning and calibration services has grown by over 100% from January 1, 2024 to December 31, 2024.
Initiatives such as the internalization of scanning and calibration services, progress in Boyd’s repair first strategy and focus
on the use of cost effective alternative parts, deliver strong value by lowering repair costs for the Company’s customers and
providing incremental gross margin to Boyd.
Maintain Cost Competitiveness
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. The Company is
committed to returning to an Adjusted EBITDA margin of 14%, supported by Project 360, a company-wide transformational
cost initiative launched in partnership with a leading global consulting firm during the fourth quarter of 2024. Project 360 is
expected to result in $100 million in annual recurring cost savings over the plan period with upfront investment and transition
costs incurred to achieve these benefits estimated to be in the $20-$23 million range over the coming quarters.
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.
13
3 As defined in the non-GAAP financial measures and ratios section of the MD&A
The following table outlines forward-looking information included in this MD&A:
Forward-looking Information
Key Assumptions
Most Relevant Risk Factors
Boyd plans to grow revenue to $5 billion in
2029, double Adjusted EBITDA dollars
from 2024-2029, return to an Adjusted
EBITDA margin of 14%, expand market
share and retain a leadership position in all
markets served, and achieve top-tier
profitability in the North American collision
industry
Opportunities continue to be available and are
at acceptable and accretive prices
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
Initiatives to increase production capacity are
successful
Project 360 is successful
Technology is leveraged to optimize mix
decisions
Material spend is optimized
Store operating model is optimized to drive
leverage as volume scales
Acquisition market conditions change and repair shop
owner demographic trends change
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
Insurance premium inflation and overall economic
uncertainty continue to impact claims volumes
Anticipated cost savings take longer than expected or are
not fully realized
Project 360 is expected to require upfront
investment and transition costs in the
$20-$23 million range over the coming
quarters.
The actual cost for these expenditures agrees
with the original estimate
The project is completed according to the
estimated timeline
No other new requirements are identified or
required during the period
All identified costs are required during the
period
BGSI may identify additional expenditure needs that were
not originally anticipated
BGSI may identify expenditure needs that were originally
anticipated; however, are no longer required or required on
a different timeline
Project 360 is expected to result in $100
million in annual recurring cost savings
over the plan period . Reduced operating
expenses and improved operating expense
leverage is expected to be realized gradually
beginning in the second quarter of 2025.
The project is completed according to the
estimated timeline
Cost savings initiatives have been
appropriately identified
Adequate time and resources are dedicated to
achieving cost savings objectives
Cost savings realized differ from amounts originally
anticipated
Timeframe for cost savings differs from original timeline
BGSI is not able to achieve the level of cost savings
anticipated
14
Forward-looking Information
Key Assumptions
Most Relevant Risk Factors
The Company anticipates achieving 80%
internalization of scanning and calibration
services within the next 2-3 years
Staffing to service scanning and calibration
continues to be available
Necessary equipment is readily available
Vehicles requiring scanning and calibration
services increase according to industry and
company projections
Demand for services grows more rapidly than anticipated
during the timeframe
Necessary equipment is not available in the required
timeframe
Vehicles requiring scanning and calibration services
increase at a pace that differs from industry and company
projections
Vehicle population in certain geographies does not support
the investment required to internalize scanning and
calibration services
Current market conditions may cause a
slight delay in Boyd achieving its long-term
growth goal of doubling the size of the
business on a constant currency basis from
2021 to 2025 against 2019 sales
Opportunities continue to be available and are
at acceptable and accretive prices
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
Acquisition market conditions change and repair shop
owner demographic trends change
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
Insurance premium inflation and overall economic
uncertainty continue to impact claims volumes
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
Re-emergence of stability in economic
conditions and employment rates
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
Anticipated operating results would be
accretive to overall Company results
Economic conditions deteriorate
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
Changes in weather conditions
Inability to maintain, replace or grow technician capacity
could impact organic growth
15
Forward-looking Information
Key Assumptions
Most Relevant Risk Factors
Stated objective to gradually increase
dividends over time
Growing profitability of the Company and its
subsidiaries
The continued and increasing ability of the
Company to generate cash available for
dividends
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
BGSI is dependent upon the operating results of the
Company
Economic conditions deteriorate
Changes in weather conditions
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
During 2025, the Company plans to make
cash capital expenditures, excluding those
related to acquisition and development of
new locations, within the range of 1.6% and
1.8% 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 2025 is in the range
of $10M to $12M, with an investment in
2026 in the range of $2 million to $4
million.
The actual cost for these capital expenditures
agrees with the original estimate
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
All identified capital requirements are required
during the period
Actual expenditures could be above or below 1.6% to 1.8%
of sales
The timing of the expenditures could occur on a different
timeline
BGSI may identify additional capital expenditure needs that
were not originally anticipated
BGSI may identify capital expenditure needs that were
originally anticipated; however, are no longer required or
required on a different timeline
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)
2024
2023
2022
Sales
$3,070,342
$2,945,988
$2,432,318
Net earnings
$24,544
$86,656
$40,962
Adjusted net earnings (2)
$30,902
$89,683
$42,366
Basic and diluted earnings per share
$1.14
$4.04
$1.91
Adjusted net earnings per share (2)
$1.44
$4.18
$1.97
Cash dividends per share declared:
Share dividends (1)
$0.44
$0.44
$0.45
December 31,
(thousands of U.S. dollars)
2024
2023
2022
Total assets
$
2,464,189 $
2,382,416 $
2,102,832
Total long-term financial liabilities
$
1,198,258 $
1,082,067 $
931,941
(1) Dividends and distributions continue to be declared and paid in Canadian dollars. In 2024, the annual dividend declared totaled C$0.603 (2023 - C$0.591, 2022 - C$0.579)
(2) As defined in the non-GAAP financial measures and ratios section of the MD&A
Acquisitions and new single location growth had the largest impact on growing sales from 2023 to 2024, this coupled with
same-store sales growth resulted in sales growth from 2022 to 2023. Sales in 2024 compared to 2023 and 2022 were
negatively impacted by a decrease in same-store sales. This is consistent with market trends where this year industry sources
report a year-over-year decrease in repairable claims of 9% for all losses and 7.9% excluding comprehensive claims. In 2023,
same-store sales benefited from high levels of demand for services that created leverage in the absorption of fixed costs. In
2022, sales were negatively impacted by supply chain disruption and a highly competitive labor market which translated into
significant wage pressure and labor margin compression.
The decline in net earnings and adjusted net earnings4 in 2024 compared to 2023 and 2022 were primarily driven by a
decrease in same-store sales which resulted in decreased leverage in the absorption of fixed costs. Net earnings was further
decreased by $3.2 million (net of tax) in transformational cost initiatives carried out by the Company during the fourth
quarter of 2024. Expenses related to the transformational cost initiatives, expected to continue into 2025, are non-recurring
and relate to the execution of Project 360 expected to assist in achieving BGSI’s five-year goal, these expenses have been
removed from the calculation of Adjusted Net Earnings.
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 2022 to 2024 have primarily related to increases in
property, plant and equipment, right of use 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 2024, BGSI increased dividends to shareholders. As of March 18, 2025 the dividend
rate is C$0.153 per quarter or C$0.612 on an annualized basis.
17
4 As defined in the non-GAAP financial measures and ratios section of the MD&A
BOYD GROUP SERVICES INC.
The consolidated financial statements of BGSI and its subsidiaries have been prepared in accordance with IFRS® Accounting
Standards, as issued by the International Accounting Standards Board (“IFRS Accounting 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, 2024.
NON-GAAP FINANCIAL MEASURES AND RATIOS
EBITDA AND ADJUSTED EBITDA
Earnings before interest, taxes, depreciation and amortization (“EBITDA”) is not a calculation defined in IFRS Accounting
Standards. 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
transformational cost initiatives expenses and fair value adjustments to contingent consideration. These adjustments which do
not relate to the current operating performance of the business units but are typically costs incurred to expand operations as
well as execute a transformation plan, expected to assist in achieving BGSI’s five-year goal. From time to time BGSI may
make other adjustments to its Adjusted EBITDA for items that are not expected to recur.
18
The following is a reconciliation of BGSI’s net earnings to Standardized EBITDA and Adjusted EBITDA:
ADJUSTED EBITDA
Three Months Ended
December 31,
Year Ended
December 31,
(thousands of U.S. dollars)
2024
2023
2024
2023
Net earnings
$
2,442 $
19,066 $
24,544 $
86,656
Add:
Finance costs
17,382
14,052
68,913
51,718
Income tax (recovery) expense
(792)
8,008
7,116
32,865
Depreciation of property, plant and equipment
20,907
16,224
75,498
56,863
Depreciation of right of use assets
31,425
28,663
123,512
109,806
Amortization of intangible assets
6,814
6,896
26,309
26,182
Standardized EBITDA
$
78,178 $
92,909 $
325,892 $
364,090
Add:
Fair value adjustments
(144)
(189)
(952)
(189)
Acquisition and transformational cost initiatives
$
5,374
1,487 $
9,879 $
4,346
Adjusted EBITDA
$
83,408 $
94,207 $
334,819 $
368,247
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,
Year Ended
December 31,
2024
2023
2024
2023
Net earnings
$
2,442 $
19,066 $
24,544 $
86,656
Add:
Fair value adjustments (non-taxable)
(144)
(189)
(952)
(189)
Acquisition and transformational cost initiatives
(net of tax)
$
3,977 $
1,100 $
7,310 $
3,216
Adjusted net earnings
$
6,275 $
19,977 $
30,902 $
89,683
Weighted average number of shares
21,472,670
21,472,194
21,472,436
21,472,194
Adjusted net earnings per share
$
0.29 $
0.93 $
1.44 $
4.18
19
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:
Three months ended
December 31,
Year ended
December 31,
(thousands of U.S. dollars)
2024
2023
2024
2023
Sales
$
752,339 $
740,014 $
3,070,342 $
2,945,988
Less:
Sales from locations not in the comparative period
(36,316)
(3,057)
(273,019)
(85,845)
Sales from under-performing facilities closed during the
period
—
(534)
(17)
(7,717)
Foreign exchange
1,509
—
3,436
—
Same-store sales (excluding foreign exchange)
$
717,532 $
736,422 $
2,800,742 $
2,852,425
Dividends
BGSI declared dividends of C$0.150 per share in each of the first, second and third quarters of 2024 and C$0.153 per share in
the fourth quarter of 2024 (2023 - C$0.147 and C$0.150 respectively).
Dividends to shareholders of BGSI were declared and paid as follows:
(thousands of U.S. dollars)
Record date
Payment date
Dividend amount
March 31, 2024
April 26, 2024
$
2,379
June 30, 2024
July 29, 2024
2,350
September 30, 2024
October 29, 2024
2,377
December 31, 2024
January 29, 2025
2,308
$
9,414
(thousands of U.S. dollars)
Record date
Payment date
Dividend amount
March 31, 2023
April 26, 2023
$
2,306
June 30, 2023
July 27, 2023
2,376
September 30, 2023
October 27, 2023
2,333
December 31, 2023
January 29, 2024
2,397
$
9,412
20
RESULTS OF OPERATIONS
Results of Operations
(thousands of U.S. dollars, except per share amounts)
Three months ended December 31,
Year ended December 31,
2024
% change
2023
2024
% change
2023
Sales - Total
752,339
1.7
740,014
3,070,342
4.2
2,945,988
Same-store sales - Total (1)
(excluding foreign exchange)
717,532
(2.6)
736,422
2,800,742
(1.8)
2,852,425
Gross margin %
45.8
0.7
45.5
45.5
—
45.5
Operating expense %
34.8
6.4
32.7
34.6
4.8
33.0
Adjusted EBITDA (1)
83,408
(11.5)
94,207
334,819
(9.1)
368,247
Acquisition and transformational
cost initiatives
5,374
261.4
1,487
9,879
127.3
4,346
Depreciation and amortization
59,146
14.2
51,783
225,319
16.8
192,851
Fair value adjustments
(144)
N/A
(189)
(952)
N/A
(189)
Finance costs
17,382
23.7
14,052
68,913
33.2
51,718
Income tax (recovery) expense
(792)
(109.9)
8,008
7,116
(78.3)
32,865
Adjusted net earnings (1)
6,275
(68.6)
19,977
30,902
(65.5)
89,683
Adjusted net earnings per share (1)
0.29
(68.8)
0.93
1.44
(65.6)
4.18
Net earnings
2,442
(87.2)
19,066
24,544
(71.7)
86,656
Basic and diluted earnings per
share
0.11
(87.2)
0.89
1.14
(71.7)
4.04
(1) As defined in the non- GAAP financial measures and ratios section of the MD&A.
21
Sales
Sales totaled $3.1 billion for the year ended December 31, 2024 an increase of $124.4 million or 4.2% when compared to the
same period of 2023. The increase in sales was the result of the following:
•
$187.2 million of incremental sales were generated from 155 new locations that were not in operation for the full
comparative period.
•
Same-store sales5 excluding foreign exchange decreased $51.7 million or 1.8% and decreased a further $3.4 million
due to the translation of same-store sales5 at a lower Canadian dollar exchange rate. This is consistent with market
trends where this year industry sources report a year-over-year decrease in repairable claims of 9% for all losses and
7.9% excluding comprehensive claims. The year ended December 31, 2024 recognized two additional selling and
productions day when compared to the prior year, which increased selling and production capacity by approximately
0.8%. The internalization of scanning and calibration services, progress in Boyd’s repair first strategy and focus on
the use of cost effective alternative parts, continued to deliver strong value by lowering repair costs for the
Company’s customers, and consequently reduced sales that otherwise could have been achieved despite being
beneficial from a gross margin perspective.
•
Sales were affected by the closure of under-performing facilities which decreased sales by $7.7 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 $1.4 billion or 45.5% of sales for the year ended December 31, 2024 compared to $1.3 billion or 45.5% of
sales for the same period in 2023. While margin rate remained flat year over year, gross profit increased $56.4 million as a
result of location growth when compared to the prior period. The internalization of scanning and calibration contributed to
the increase in gross margin, along with improved performance based pricing; however, these gains were offset by labor rate
margins which remained below historical levels.
Operating Expenses
Operating Expenses for the year ended December 31, 2024 increased $89.9 million to $1,061.7 million from $971.8 million
for the same period of 2023. The increase in operating expenses was primarily the result of location growth and inflationary
increases. Closed locations lowered operating expenses by $4.5 million.
Operating expenses as a percentage of sales were 34.6% for the year ended December 31, 2024 compared to 33.0% for the
same period in 2023. Operating expenses as a percentage of sales was negatively impacted by the decline in same-store sales
and new locations, which contributed sales but with a higher operating expense ratio of 36.9%. Although operating expenses
as a percentage of sales was positively impacted by reductions in staffing made to better align with current levels of demand
as well as reduced incentive compensation and recruiting costs, these impacts were more than offset by fixed costs on
existing and new locations.
Acquisition and Transformational Cost Initiatives
Acquisition and Transformational Cost Initiatives for the year ended December 31, 2024 were $9.9 million compared to $4.3
million recorded for the same period of 2023. Acquisition costs relate to various acquisitions, including acquisitions from
prior periods, as well as other completed or potential acquisitions. Expenses related to the transformational cost initiative of
$4.4 million, expected to continue in 2025, are non-recurring and relate to the execution of a transformation plan expected to
assist in achieving BGSI’s five-year goal. No similar transformation costs were incurred in 2023.
22
5 As defined in the non-GAAP financial measures and ratios section of the MD&A
Adjusted EBITDA6
Earnings before interest, income taxes, depreciation and amortization, adjusted for contingent consideration, as well as
acquisition and transformational cost initiatives (“Adjusted EBITDA6”) for the year ended December 31, 2024 totaled $334.8
million or 10.9% of sales compared to Adjusted EBITDA6 of $368.2 million or 12.5% of sales in the same period of the prior
year. The $33.4 million decrease was primarily the result of declines in repairable claims volumes for services, which
resulted in same-store sales declines and a higher ratio of operating expenses as a percentage of sales. Although operating
expenses as a percentage of sales was positively impacted by reductions in staffing made to better align with current levels of
demand as well as reduced incentive compensation and recruiting costs, these impacts were more than offset by fixed costs
on existing and new locations.
Depreciation and Amortization
Depreciation related to property, plant and equipment totaled $75.5 million or 2.5% of sales for the year ended December 31,
2024, an increase of $18.6 million when compared to the $56.9 million or 1.9% of sales recorded in the same period of the
prior year. The increase in depreciation expense was primarily due to growth in locations, the investments in network
technology upgrades, as well as growth related to the calibration business. Investments in the calibration business pertain
primarily to vehicles and calibration technology equipment. Depreciation expense as a percentage of sales has been impacted
by same-store sales declines.
Depreciation related to right of use assets totaled $123.5 million, or 4.0% of sales for the year ended December 31, 2024, as
compared to $109.8 million or 3.7% of sales for the same period of the prior year. The increase in depreciation expense was
primarily due to location growth and lease renewals. Depreciation expense as a percentage of sales has been impacted by
same-store sales declines.
Amortization of intangible assets for the year ended December 31, 2024 totaled $26.3 million or 0.9% of sales, an increase of
$0.1 million when compared to the $26.2 million or 0.9% of sales expensed for the same period in the prior year.
Finance Costs
Finance Costs of $68.9 million or 2.2% of sales for the year ended December 31, 2024 increased from $51.7 million or 1.8%
of sales for the same period of the prior year. The increase in finance costs was primarily due to increased lease liabilities, as
a result of lease renewals and location growth, as well as higher variable interest rates and increased utilization on the
revolving credit facility.
Income Taxes
Current and Deferred Income Tax Expense of $7.1 million for the year ended December 31, 2024 compared to an expense of
$32.9 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 decreased income tax expense by
approximately $1.5 million for the year ended December 31, 2024 (December 31, 2023 - increased income tax expense by
$1.2 million). In 2024, the recovery of state taxes was due to the recognition of a deferred tax asset related to depreciation
differences in states that do not conform with federal bonus depreciation. Permanent differences did not have a significant
impact on the tax computed on accounting income.
23
6 As defined in the non-GAAP financial measures and ratios section of the MD&A
Net Earnings and Earnings Per Share
Net Earnings for the year ended December 31, 2024 was $24.5 million or 0.8% of sales compared to $86.7 million or 2.9% of
sales in the same period of the prior year. The net earnings amount in 2024 was impacted by acquisition and transformational
cost initiatives of $7.3 million (net of tax). After adjusting for fair value and other unusual items, Adjusted net earnings7 in
2024 was $30.9 million, or 1.0% of sales. This compares to Adjusted net earnings7 of $89.7 million or 3.0% of sales in 2023.
Net earnings and Adjusted net earnings for the period was negatively impacted by the decrease in Adjusted EBITDA, as well
as increased depreciation expense and increased finance cost. Depreciation and finance costs increased due to investments in
growth and the investment in network technology upgrades.
Basic and Diluted Earnings Per Share was $1.14 per share for the year ended December 31, 2024 compared to $4.04 for the
same period of 2023. Adjusted net earnings per share8 was $1.44 compared to $4.18 for the same period of 2023.
Summary of Quarterly Results
(in thousands of U.S. dollars,
except per share amounts)
2024 Q4
2024 Q3
2024 Q2
2024 Q1
2023 Q4
2023 Q3
2023 Q2
2023 Q1
Sales
$
752,339 $
752,293 $
779,163 $
786,547 $
740,014 $
737,798 $
753,235 $
714,941
Adjusted EBITDA (1)
$
83,408 $
80,128 $
89,576 $
81,707 $
94,207 $
93,972 $
95,374 $
84,694
Net earnings
$
2,442 $
2,895 $
10,826 $
8,381 $
19,066 $
20,498 $
26,269 $
20,823
Basic and diluted earnings per
share
$
0.11 $
0.13 $
0.50 $
0.39 $
0.89 $
0.95 $
1.22 $
0.97
Adjusted net earnings (1)
$
6,275 $
3,247 $
11,937 $
9,444 $
19,977 $
21,483 $
26,988 $
21,234
Adjusted net earnings per
share (1)
$
0.29 $
0.15 $
0.56 $
0.44 $
0.93 $
1.00 $
1.26 $
0.99
(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, 2024, BGSI had cash, net of
outstanding deposits and cheques, held on deposit in bank accounts totaling $20.0 million (December 31, 2023 - $22.5
million). The decrease in the cash balance as at December 31, 2024 is the result of decreased cash flows from operations.
The net working capital ratio (current assets divided by current liabilities) was 0.62:1 at December 31, 2024 (December 31,
2023 – 0.63:1).
At December 31, 2024, BGSI had total debt outstanding, net of cash, of $1,231.6 million compared to $1,225.1 million at
September 30, 2024, $1,208.7 million at June 30, 2024, $1,163.8 million at March 31, 2024 and $1,114.5 million at
December 31, 2023. Debt, net of cash, before lease liabilities increased when compared to the prior year primarily as a result
of location growth. The Company’s strategy has been to not hold real estate except where it is necessary for growth
opportunities. Certain start-up locations necessitate short term holding of real estate until the build is complete and operations
have begun. During the year 2024, the Company completed sale leaseback transactions for proceeds of $64.9 million. The
sale leaseback transactions allowed the Company to replenish capital that can be redeployed to further grow the business.
24
7 As defined in the non-GAAP financial measures and ratios section of the MD&A
8 As defined in the non-GAAP financial measures and ratios section of the MD&A
Total debt, net of cash
(thousands of U.S. dollars)
December 31,
2024
September 30,
2024
June 30,
2024
March 31,
2024
December 31,
2023
Revolving credit facility & swing line
(net of financing costs)
$
369,333 $
389,774 $
353,724 $
300,171 $
264,046
Term Loan A (net of financing costs)
124,882
124,860
124,847
124,831
124,812
Seller notes (1)
13,068
15,458
17,939
29,870
32,847
Total debt before lease liabilities
$
507,283 $
530,092 $
496,510 $
454,872 $
421,705
Cash
19,997
43,847
15,530
16,380
22,511
Total debt, net of cash
before lease liabilities
$
487,286 $
486,245 $
480,980 $
438,492 $
399,194
Lease liabilities
744,295
738,895
727,703
725,337
715,277
Total debt, net of cash
$
1,231,581 $
1,225,140 $
1,208,683 $
1,163,829 $
1,114,471
(1) Seller notes are loans granted to the Company by the sellers of businesses related to the acquisition of those businesses.
The following table summarizes the undiscounted contractual obligations at December 31, 2024 and required payments over
the next five years:
Contractual Obligations
(thousands of U.S. dollars)
Total
Within 1
year
1 to 2
years
2 to 3
years
3 to 4
years
4 to 5
years
After 5
years
Bank indebtedness
$—
$—
$—
$—
$—
$—
$—
Accounts payable and accrued
liabilities
306,942
306,942
—
—
—
—
—
Long-term debt
507,283
8,994
372,823
125,417
49
—
—
Lease liability
948,906
157,105
143,935
128,045
107,052
83,934
328,835
Purchase Obligations (1)
—
unknown
unknown
unknown
unknown
unknown
unknown
$1,763,131
$473,041
$516,758
$253,462
$107,101
$83,934
$328,835
(1) Subject to fulfilling certain conditions such as meeting contractual purchase obligations and no change in control the repayment would be nil
Operating Activities
Cash flow generated from operations before considering working capital changes, was $319.2 million for the year ended
December 31, 2024 compared to $338.5 million in 2023.
For the year ended December 31, 2024, changes in working capital items used net cash of $5.9 million compared with
providing net cash of $19.1 million in the same period of 2023. Changes in accounts receivable, inventory, prepaid expenses,
income taxes, accounts payable and accrued liabilities are significantly influenced by timing of collections and expenditures.
25
Financing Activities
Cash used in financing activities totaled $106.9 million for the year ended December 31, 2024 compared to cash used in
financing activities of $105.9 million for the same period of the prior year. During 2024, cash was provided by draws of the
revolving credit facility in the amount of $366.0 million offset by cash used to repay draws as well as long-term debt
associated with seller notes in the amount of $283.8 million and to fund interest costs on long-term debt of $29.1 million.
Cash used by financing activities included $109.2 million in repayments of property, vehicle and equipment lease liabilities
and cash used to fund interest costs on these lease liabilities of $40.5 million. Cash was also used to pay dividends of $9.4
million. The Company extended the revolving credit facility, resulting in the payment of $0.8 million of financing costs.
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 used to repay property,
vehicle and equipment lease liabilities and cash used to fund interest costs on these lease liabilities of $32.1 million. Cash was
also used to pay dividends of $9.4 million.
Debt Financing
On March 26, 2024, the Company entered into a fourth amended and restated credit agreement to extend the revolving credit
facilities in the aggregate amount of $550 million with an accordion feature which can increase the facilities to a maximum of
$850 million (the “Facilities”). The Facilities are accompanied by a fixed-rate Term Loan A maturing in March 2027, in the
amount of $125 million at an interest rate of 3.455%. The Facilities are with a syndicate of Canadian and U.S. banks and are
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 Facilities 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 Facilities 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, Canadian Overnight Repo Rate Average (“CORRA”), U.S. Prime or
Secured Overnight Financing Rate (“SOFR”) at the Company’s election. The credit agreement provides for CORRA as the
Canadian benchmark replacement rate on Canadian dollar term advances when the publication of Canadian Dollar Offered
Rate (“CDOR”) ceased in June 2024. The total syndicated Facilities include a swing line up to a maximum of $10.0 million
for the Canadian borrower and $30.0 million for the U.S. borrower. As at December 31, 2024, the Company has drawn $370.0
million U.S. ((December 31, 2023 - $264.5 million) and the Canadian borrower had drawn $nil (December 31, 2023 - $nil) on
the Facilities and $125.0 million (December 31, 2023 - $125.0 million) on the Term Loan A.
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.
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, 2024, BGSI entered into 14 new seller notes for an aggregate amount of $3.5 million. During the year
ended December 31, 2024, BGSI repaid seller notes in the amount of $23.3 million.
Shareholders’ Capital
During the first quarter of 2021, the Company instituted a stock option plan for senior management, which was approved by
shareholders on May 12, 2021. The Company's stock option plan allows for the granting of options up to an amount of
250,000 Common shares under this plan. Each tranche of the options vests equally over two, three, four and five year periods.
The term of an option shall be determined and approved by the People, Culture and Compensation Committee; provided that
the term shall be no longer than ten years from the grant date.
26
Year ended December 31,
2024
2023
Number
Weighted
average exercise
price (C$)
Number
Weighted
average exercise
price (C$)
Balance at the beginning of year
54,559 $
198.78
31,113 $
186.41
Granted during the year
18,269
282.26
28,821
211.13
Forfeited during the year
(4,535)
219.71
(5,375)
193.39
Expired during the year
—
—
—
—
Exercised during the year
(531)
204.83
—
—
Balance at the end of year
67,762 $
219.84
54,559 $
198.78
Exercisable at the end of the year
8,351 $
195.58
2,690 $
219.21
Investing Activities
Cash used in investing activities totaled $207.7 million for the year ended December 31, 2024. This compares to $244.4
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, 2024, the Company completed sale leaseback transactions for
proceeds of $64.9 million. The remainder of the investing activity in both periods related primarily to new location growth as
well as the development of businesses which consisted primarily of property, plant and equipment additions.
Acquisitions and Development of Businesses
The Company completed and opened the following number of collision repair acquisitions and start up locations during the
periods listed:
Location
Number of locations
added through
acquisition
Number of start ups
Total
January 1, 2024 to December 31, 2024
37
12
49
January 1, 2025 to March 18, 2025
3
6
9
Total
40
18
58
During the year ended December 31, 2024, the Company opened seven start-up glass locations, acquired one glass location
and four calibration businesses. From January 1, 2025 up to the reporting date of March 18, 2025, the Company acquired two
glass location.
The Company completed the acquisition or start-up of 116 collision repair locations from the beginning of 2023 until the
fourth quarter reporting date of March 19, 2024. Details of these acquisitions can be found in the 2023 Annual Report.
During 2024 the Company invested in the growth of its scanning and calibration services. Expenditures in this area on
vehicles and scanning and calibration technology equipment is expected to continue into the future as the Company grows its
internalization of this work from 40% to 80% in the near term.
Start-ups
Start-up collision repair facilities include brownfield locations, which are existing buildings converted to Boyd’s use. In some
cases this would include opening in a building that was previously a collision repair facility. The Company will also develop
27
greenfield locations which consist of Boyd’s prototype building from the ground up. In both cases, Boyd ensures the location
is favorable and zoned appropriately to be able to operate upon completion of development. Depending on a variety of
factors including zoning, permitting, supply chain and availability of trades, the development of a start-up facility can take
between 10 and 24 months, with greenfields generally taking longer than brownfields.
The Company believes that start-up facilities offer a number of advantages and as a result plans to continue increasing the
proportion of growth using this approach. This approach provides another option to grow in markets that are new and
growing and also allows Boyd to design and develop a facility that has a preferred footprint and flow. Being able to
accommodate Boyd’s future needs in terms of glass and calibration services is another benefit. These facilities are also
attractive from a customer and employee perspective. Having the capability to grow through start-ups at a higher pace gives
the Company optionality to invest in a way that continues to provide accretive returns when multi-shop or single location
acquisition opportunities are not ideal.
Start-up facilities, whether brownfield or greenfield, have a longer ramp-up period when compared to the Company’s
historical single shop acquisitions. It generally takes longer for sales to build up to steady state levels in start up locations.
Whereas with single store acquisitions, it takes on average between 12-24 months to add the necessary employees and DRP
relationships to drive sales to projected levels, for start-ups it can take between 24-36 months from the time of store opening.
During these ramp up periods, leveraging of fixed costs is limited, which impacts the operating expense ratio and
supplementing production staff wages may be required, which impacts gross margin. For start-up locations, pre-opening
costs such as utilities, core staff, property taxes and shop supplies are incurred without sales revenue to offset these costs.
This pattern of extended ramp up would typically result in losses for the months leading up to the opening and continue at
decreasing levels as the revenue increases. Performance of newly developed locations will vary, but the long-term value
creation of developing start-up sites are very attractive. Based on Boyd’s history, newly developed locations would reach
maturity by the end of their third year.
In 2024, the Company commenced operations in 12 new start-up collision repair facilities. The total combined investment in
leaseholds and equipment for start-up facilities was approximately $23.0 million, including incremental investments in the
build out of certain start-up locations. The Company commenced operations in 28 new start-up collision repair facilities in
2023 with a combined investment of approximately $45.3 million. 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 $62.3 million, or 2.0% of sales on
capital expenditures during 2024, compared to $57.9 million or 2.0% of sales during 2023. In 2024, capital expenditures as a
percentage of sales were impacted by same-store sales declines.
During 2025, the Company plans to make cash capital expenditures, excluding those related to acquisition and development
of new locations, within the range of 1.6% and 1.8% 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. During 2024, the Company spent approximately $18.1 million on network
technology upgrades. The investment expected in 2025 is in the range of $10 million to $12 million, with an investment in
2026 in the range of $2 million to $4 million. These investments align with Boyd’s ESG sustainability roadmap to
responsibly address data privacy and cyber security.
28
FOURTH QUARTER
Sales for the three months ended December 31, 2024 totaled $752.3 million, an increase of $12.3 million or 1.7% compared
to the same period in 2023. Sales growth of $33.3 million was attributable to incremental sales generated from 86 new
locations. The closure of under-performing facilities accounted for a decrease in sales of $0.5 million. Overall same-store
sales excluding foreign exchange decreased $18.9 million, or 2.6% in the fourth quarter of 2024 when compared to the fourth
quarter of 2023 and decreased a further $1.5 million due to the translation of same-store sales5 at a lower Canadian dollar
exchange rate. The fourth quarter of 2024 recognized one more selling and production day when compared to the same
period of the prior year. Industry sources report a fourth quarter year-over-year decrease in repairable claims of 6% for all
losses and 7.9% excluding comprehensive claims. The internalization of scanning and calibration services, progress in
Boyd’s repair first strategy and focus on the use of cost effective alternative parts, continued to deliver strong value by
lowering repair costs for the Company’s customers, and consequently reduced sales that otherwise could have been achieved
despite being beneficial from a gross margin perspective.
Gross Profit was $344.9 million, or 45.8% of sales in the fourth quarter of 2024 compared to $336.5 million or 45.5% in the
same period in 2023. Gross profit increased $8.4 million primarily as a result of location growth when compared to the prior
period. The gross margin percentage for the three months ended December 31, 2024 benefited from internalization of
scanning and calibration and improved performance based pricing, partially offset by lower paint margins.
Operating expenses as a percentage of sales were 34.8% for the fourth quarter of 2024 compared to 32.7% for the same
period in 2023. Operating expenses as a percentage of sales was significantly impacted by the decline in same-store sales and
location growth. Although operating expenses as a percentage of sales was positively impacted by reductions in staffing made
to better align with current levels of demand as well as reduced incentive compensation and recruiting costs, these impacts
were more than offset by fixed costs on existing and new locations. New locations contributed sales but with a higher
operating expense ratio of 37.5% during the fourth quarter of 2024.
Adjusted EBITDA9 for the fourth quarter of 2024 totaled $83.4 million or 11.1% of sales compared to Adjusted EBITDA8 of
$94.2 million or 12.7% of sales in the same period of the prior year. The $10.8 million decrease was primarily the result of
lower same-store sales levels and a high ratio of operating expenses as a percentage of sales for both existing and new stores.
Current and Deferred Income Tax (Recovery) for the fourth quarter of $(0.8) million in 2024 compared to an income tax
expense of $8.0 million in 2023. 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 decreased income tax expense by approximately $1.5
million for the fourth quarter of 2024 (December 31, 2023 - increased income tax expense by $1.2 million). In 2024, the
recovery of state taxes was due to the recognition of a deferred tax asset related to depreciation differences in states that do
not conform with federal bonus depreciation. Permanent differences did not have a significant impact on the tax computed on
accounting income.
Net Earnings for the fourth quarter was $2.4 million, or 0.3% of sales, or $0.11 per fully diluted share compared to net
earnings of $19.1 million, or 2.6% of sales, or $0.89 per fully diluted share for the same period in the prior year. The net
earnings amount in the fourth quarter of 2024 was impacted by acquisition and transformational cost initiatives of $4.0
million (net of tax). After adjusting for fair value and other unusual items, Adjusted net earnings8 for the fourth quarter of
2024 was $6.3 million, or 0.8% of sales. This compares to Adjusted net earnings8 of $20.0 million or 2.7% of sales in the
fourth quarter of 2023. Net earnings and Adjusted net earnings8 for the period was negatively impacted by the decrease in
Adjusted EBITDA, as well as increased depreciation expense and increased finance costs. Depreciation and finance costs
experienced increases primarily driven by investments in growth and the investment in network technology upgrades during a
period of lower sales and Adjusted EBITDA.
29
9 As defined in the non-GAAP financial measures and ratios section of the MD&A
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
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)
Location
Lease
Expires
December 31,
2024
December 31,
2023
Gerber Building No. 1
Ptnrp
Timothy O'Day
South Elgin, IL
2029
105
103
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 2024 or 2023.
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 2024 or 2023.
30
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 CGUs 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 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.
31
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
Adoption of new and amended IFRS Accounting Standards
The IASB amendments to IAS 1 - Presentation of Financial Statements (Classification of liabilities as Current or Non-
Current and Non-current Liabilities with Covenants), IFRS 16 - Leases (Lease Liability in a Sale and Leaseback) and IAS 7 -
Statement of Cash Flows and IFRS 7 - Financial Instruments: Disclosures – Supplier Finance Arrangements are effective for
the annual periods beginning on or after January 1, 2024. The Company assessed the impact of the amendments to the above
standards and they did not have a material impact on the Company’s financial statements.
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. For the year
ended December 31, 2024, the Company has assessed the impact of Pillar Two and continues to monitor legislative
developments in relevant jurisdictions. Based on the Company’s assessment and the enacted or substantively enacted tax
rates in the jurisdictions in which it operates, the Company does not expect a material exposure to Pillar Two top-up taxes.
The Company has also assessed the applicability of the OECD’s transitional safe harbor rules and, where applicable, expects
to rely on these provisions to reduce compliance complexity. The Company will continue to evaluate potential future impacts
as jurisdictions finalize their Pillar Two legislation and implementation guidance.
Future Accounting Policies
The following accounting standards under IFRS Accounting Standards have been issued or amended that are not mandatory
for the current period and have not been applied to the consolidated financial statements.
IFRS 18 - Presentation and Disclosure in Financial Statements
The new standard replaces IAS 1 - Presentation of Financial Statements while carrying forward many of the requirements in
IAS 1. IFRS 18 sets out the requirements for the presentation and disclosure of information in general purpose financial
statements to help ensure they provide relevant information that faithfully represents an entity’s assets, liabilities, equity,
income and expenses. It introduces requirements to classify income and expenses into categories and defined subtotals in the
32
statement of earnings, provide disclosures on management-defined performance measures (“MPMs”), along with enhanced
guidance on aggregation and disaggregation of information. BGSI is required to apply IFRS 18 for annual reporting periods
on or after January 1, 2027 with early adoption permitted. BGSI is currently assessing the impact of this standard on its
financial statements.
Amendments to IFRS 9 and IFRS 7 - Classification and Measurement of Financial Instruments
The amendments deal with the recognition and derecognition of financial liability at settlement date and when settled through
an electronic cash transfer system, further guidance regarding the classification of financial assets, and additional disclosure
requirements for financial instruments with contingent features and equity instruments classified at FVTOCI. These
amendments are effective for the annual reporting periods beginning on or after January 1, 2026 with early adoption
permitted. BGSI is currently assessing the impact of the these amendments on its financial statements.
CERTIFICATION OF DISCLOSURE CONTROLS
Management’s responsibility for financial information contained in this Annual Report is described on page 48. 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, 2024, 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.
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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:
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.
High Risks:
Risk item is significant and management responsibility should be specified and appropriate action
taken.
Moderate Risks:
Managed by specific monitoring or response procedures. Additional risk mitigation techniques could
be considered if benefits exceed the cost.
Low Risks:
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.
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 automobile collision repair industry could experience a decrease in repairable claims, higher
total loss rates as well as a deferral in repairs and an increase in non-filed claims. This could be driven by several factors
including significant insurance premium inflation and overall economic uncertainty. 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.
The volume of accidents and related insurance claims can also 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
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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.
Employee Relations and Staffing
Boyd currently employs approximately 13,449 people, of which 1,558 are in Canada and 11,891 are in the U.S. The current
workforce is not unionized, except for approximately 62 employees located in the U.S. who are subject to collective
bargaining agreements. The collision repair industry typically experiences competition for talent, and, in particular, a limited
pool of qualified technicians and estimators. This can result in a shortage of qualified employees as well as wage pressure,
which could adversely impact 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.
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 BGSI 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
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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.
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.
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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.
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.
There can be no assurance that increases in the costs to repair vehicles will ultimately be recoverable from the Company’s
clients or customers.
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.
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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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 51% (2023 – 53%) of total sales, one insurance company represents approximately 16%
(2023 – 19%) of the Company’s total sales, while a second insurance company represents approximately 12% (2023 – 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.
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
that future uses or evolving regulations will not result in the imposition of material environmental, health or safety liability
upon Boyd.
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. Investments could be necessary for sensors and other
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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, wild-fires, 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
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.
Pandemic Risk
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.
The outbreak of a contagious illness, such as the 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
39
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.
Competition
The collision repair industry in North America, estimated by Boyd to represent over $50 billion in annual revenue, 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
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.
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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. 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:
•
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
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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.
BGSI and its subsidiaries operate distinct businesses in Canada and the U.S. The Company operates a service business and a
major component of our services is labor which would not be subject to tariffs. The Company sources parts and materials
from domestic vendors in Canada and the U.S. Any changes in tariffs on exports or imports to and from Canada and the U.S
may impact the cost of repairs and decrease margins. There can be no assurance that the changes in tariffs would not
negatively affect the financial performance of the Company.
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.
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.
42
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.
43
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).
44
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,
2024.
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.
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
ii.
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
45
6.
Evaluation: The issuer’s other certifying officer(s) and I have
a.
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
b.
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.
our conclusions about the effectiveness of ICFR at the financial year end based on that
evaluation; and
ii.
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, 2024 and ended on December 31, 2024 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 19, 2025
(signed)
Timothy O’Day
Chief Executive Officer
46
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,
2024.
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.
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
ii.
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
47
6.
Evaluation: The issuer’s other certifying officer(s) and I have
a.
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
b.
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.
our conclusions about the effectiveness of ICFR at the financial year end based on that
evaluation; and
ii.
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, 2024 and ended on December 31, 2024 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 19, 2025
(signed)
Jeff Murray
Executive Vice President & Chief Financial Officer
48
BOYD GROUP SERVICES INC.
Consolidated Financial Statements
Year Ended December 31, 2024
49
MANAGEMENT’S RESPONSIBILITY FOR FINANCIAL REPORTING
These consolidated financial statements have been prepared by management in accordance with IFRS® Accounting
Standards, as issued by the International Accounting Standards Board (“IASB”). 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
Jeff Murray
Chief Executive Officer
Executive Vice President & Chief Financial Officer
Winnipeg, Manitoba
March 18, 2025
50
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, 2024 and 2023, and
the consolidated statements of income, comprehensive income, changes in equity and cash flows for the
years ended December 31, 2024 and 2023, 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, 2024 and 2023, and its financial performance and its cash
flows for the years ended December 31, 2024 and 2023 in accordance with IFRS Accounting Standards as
issued by the International Accounting Standards Board ("IASB").
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, 2024. 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.
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
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
Independent Auditor’s Report
To the Shareholders and the Board of Directors of
Boyd Group Services Inc.
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
o Internal communications to management and the Board of Directors.
•
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 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.
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 Accounting Standards as issued by the IASB, 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.
•
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 Paul Stauch.
/s/ Deloitte LLP
Chartered Professional Accountants
Winnipeg, Manitoba
March 18, 2025
BOYD GROUP SERVICES INC.
CONSOLIDATED STATEMENTS OF FINANCIAL POSITION
As at December 31,
(thousands of U.S. dollars)
2024
2023
Note
Assets
Current assets:
Cash
$
19,997 $
22,511
Accounts receivable
17
120,616
145,793
Income taxes recoverable
9
12,307
7,721
Inventory
6
73,134
78,532
Prepaid expenses
44,663
41,728
270,717
296,285
Property, plant and equipment
7
529,673
438,981
Right of use assets
8
668,101
654,347
Deferred income tax asset
9
2,840
4,316
Intangible assets
10
336,943
342,781
Goodwill
11
643,864
633,986
Other long-term assets
12
12,051
11,720
$
2,464,189 $
2,382,416
Liabilities and Equity
Current liabilities:
Accounts payable and accrued liabilities
$
306,942 $
339,823
Dividends payable
13
2,283
2,435
Current portion of long-term debt
14
8,994
22,038
Current portion of lease liabilities
15
116,849
107,727
435,068
472,023
Long-term debt
14
498,289
399,667
Lease liabilities
15
627,446
607,550
Deferred income tax liability
9
68,559
70,271
Unearned rebates
16
3,964
4,579
1,633,326
1,554,090
Equity
Accumulated other comprehensive earnings
44,792
58,313
Retained earnings
180,557
165,427
Shareholders’ capital
18
600,047
600,047
Contributed surplus
19
5,467
4,539
830,863
828,326
$
2,464,189 $
2,382,416
The accompanying notes are an integral part of these consolidated financial statements
Approved by the Board:
TIMOTHY O’DAY
DAVID BROWN
Director
Director
55
BOYD GROUP SERVICES INC.
CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY
(thousands of U.S. dollars except share amounts)
Shareholders’ Capital
Accumulated
Other
Comprehensive
Earnings
Retained
Earnings
Total Equity
Shares
Amount
Contributed
Surplus
Note
Balances - January 1, 2023
21,472,194 $
600,047 $
4,037 $
54,330 $
88,183 $
746,597
Other comprehensive earnings
3,983
3,983
Net earnings
86,656
86,656
Comprehensive earnings
3,983
86,656
90,639
Stock option accretion
19
502
502
Dividends to shareholders
13
(9,412)
(9,412)
Balances - December 31, 2023
21,472,194 $
600,047 $
4,539 $
58,313 $
165,427 $
828,326
Other comprehensive loss
(13,521)
(13,521)
Net earnings
24,544
24,544
Comprehensive (loss) earnings
(13,521)
24,544
11,023
Shares issued through exercise of stock options
531
79
79
Stock option accretion
19
849
849
Dividends to shareholders
13
(9,414)
(9,414)
Balance - December 31, 2024
21,472,725 $
600,047 $
5,467 $
44,792 $
180,557 $
830,863
The accompanying notes are an integral part of these consolidated financial statements
56
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)
2024
2023
Note
Sales
22
$
3,070,342 $
2,945,988
Cost of sales
1,673,834
1,605,924
Gross profit
1,396,508
1,340,064
Operating expenses
1,061,689
971,817
Acquisition and transformational cost initiatives
9,879
4,346
Depreciation of property, plant and equipment
7
75,498
56,863
Depreciation of right of use assets
8
123,512
109,806
Amortization of intangible assets
10
26,309
26,182
Fair value adjustments
(952)
(189)
Finance costs
68,913
51,718
1,364,848
1,220,543
Earnings before income taxes
31,660
119,521
Income tax expense (recovery)
Current
9
7,667
25,872
Deferred
9
(551)
6,993
7,116
32,865
Net earnings
$
24,544 $
86,656
The accompanying notes are an integral part of these consolidated financial statements
Basic and diluted earnings per share
27
$
1.14 $
4.04
Basic number of shares outstanding
27
21,472,436
21,472,194
Diluted weighted average number of shares outstanding
27
21,477,021
21,475,864
BOYD GROUP SERVICES INC.
CONSOLIDATED STATEMENTS OF COMPREHENSIVE EARNINGS
For the years ended December 31,
(thousands of U.S. dollars)
2024
2023
Net earnings
$
24,544 $
86,656
Other comprehensive earnings
Items that may be reclassified subsequently to Consolidated Statements of Earnings
Change in unrealized earnings on foreign currency translation (net of tax of $nil)
(13,521)
3,983
Other comprehensive (loss) earnings
(13,521)
3,983
Comprehensive earnings
$
11,023 $
90,639
The accompanying notes are an integral part of these consolidated financial statements
57
BOYD GROUP SERVICES INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
For the years ended December 31,
(thousands of U.S. dollars)
2024
2023
Note
Cash flows from operating activities
Net earnings
$
24,544 $
86,656
Adjustments for
Fair value adjustments
(952)
(189)
Deferred income taxes
9
(551)
6,993
Finance costs
68,913
51,718
Amortization of intangible assets
10
26,309
26,182
Depreciation of property, plant and equipment
7
75,498
56,863
Depreciation of right of use assets
8
123,512
109,806
Other
1,961
444
319,234
338,473
Changes in non-cash working capital items
29
(5,909)
19,072
313,325
357,545
Cash flows used in financing activities
Increase in obligations under long-term debt
14
365,994
260,473
Repayment of long-term debt, principal
14
(283,790)
(205,848)
Repayment of obligations under property leases, principal
15
(103,888)
(95,441)
Repayment of obligations under vehicle and equipment leases, principal
15
(5,283)
(3,863)
Interest on long-term debt
14
(29,149)
(19,814)
Interest on property leases
15
(39,464)
(31,328)
Interest on vehicle and equipment leases
15
(1,021)
(728)
Dividends paid
(9,445)
(9,382)
Payment of financing costs
14
(829)
—
(106,875)
(105,931)
Cash flows used in investing activities
Proceeds on sale of equipment and software
7
718
560
Equipment purchases and facility improvements
(77,333)
(57,482)
Acquisition and development of businesses (net of cash acquired)
5
(192,486)
(180,293)
Software purchases and licensing
10
(3,124)
(1,684)
Increase in other long-term assets
12
(368)
(8,334)
Proceeds on sale / leaseback agreements
7
64,854
2,832
(207,739)
(244,401)
Effect of foreign exchange rate changes on cash
(1,225)
230
Net (decrease) increase in cash position
(2,514)
7,443
Cash, beginning of year
22,511
15,068
Cash, end of year
$
19,997 $
22,511
Income taxes paid
$
12,295 $
27,909
Interest paid
$
68,395 $
51,507
The accompanying notes are an integral part of these consolidated financial statements
58
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 names 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 Gerber National Claim Services (“GNCS”), that offers glass, emergency
roadside and first notice of loss services. The Company also operates Mobile Auto Solutions (“MAS”) that
offers mobile calibration and diagnostic 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, 2024 (including comparatives) were
approved and authorized for issue by the Board of Directors on March 18, 2025.
2.
MATERIAL ACCOUNTING POLICIES
a) Basis of presentation
The consolidated financial statements of BGSI have been prepared in accordance with IFRS® Accounting
Standards, as issued by the International Accounting Standards Board (“IFRS Accounting Standards”). 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 and auto glass 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
BOYD GROUP SERVICES INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
For the years ended December 31, 2024 and 2023
(thousands of U.S. dollars, except share and per share amounts)
59
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 if its carrying amount will be
recovered principally through a sale transaction rather than through continuing use. The asset must be
available for immediate sale in its present condition subject only to terms that are usual and customary for
sales of such assets and its sale must be highly probable. 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 gain or loss recognized on the sale leaseback is limited to
the rights transferred to the buyer.
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.
BOYD GROUP SERVICES INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
For the years ended December 31, 2024 and 2023
(thousands of U.S. dollars, except share and per share amounts)
60
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
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.
BOYD GROUP SERVICES INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
For the years ended December 31, 2024 and 2023
(thousands of U.S. dollars, except share and per share amounts)
61
The Company evaluates impairment losses, other than goodwill impairment, for potential reversals when
events or circumstances warrant such consideration.
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. On exercise date, proceeds from exercise
are 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
BOYD GROUP SERVICES INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
For the years ended December 31, 2024 and 2023
(thousands of U.S. dollars, except share and per share amounts)
62
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
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 (“FVTPL”) or
through OCI (“FVTOCI”), and
•
Those to be measured at amortized cost
BOYD GROUP SERVICES INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
For the years ended December 31, 2024 and 2023
(thousands of U.S. dollars, except share and per share amounts)
63
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 method treatment are recorded as other long term assets at
FVTPL. As there is no ready secondary market, the fair value is estimated using the discounted cash flow
method.
Accounts payable and accrued liabilities, dividends payable, and long-term debt are classified as amortized
cost, net of any related financing fees or issue costs. These financial instruments are measured at amortized
cost using the effective interest method.
Derivative contracts are classified as financial assets or financial liabilities at FVTPL 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 FVTPL, 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 FVTPL 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 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
BOYD GROUP SERVICES INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
For the years ended December 31, 2024 and 2023
(thousands of U.S. dollars, except share and per share amounts)
64
and the U.S. and both regions exhibit similar long-term economic characteristics. In this circumstance,
IFRS Accounting Standards 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.
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 CGUs 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.
BOYD GROUP SERVICES INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
For the years ended December 31, 2024 and 2023
(thousands of U.S. dollars, except share and per share amounts)
65
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.
BOYD GROUP SERVICES INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
For the years ended December 31, 2024 and 2023
(thousands of U.S. dollars, except share and per share amounts)
66
4. CHANGES IN ACCOUNTING POLICIES
Adoption of new and amended IFRS Accounting Standards
The IASB amendments to IAS 1 - Presentation of Financial Statements (Classification of liabilities as Current
or Non-Current and Non-current Liabilities with Covenants), IFRS 16 - Leases (Lease Liability in a Sale and
Leaseback) and IAS 7 - Statement of Cash Flows and IFRS 7 - Financial Instruments: Disclosures – Supplier
Finance Arrangements are effective for the annual periods beginning on or after January 1, 2024. The
Company assessed the impact of the amendments to the above standards and they did not have a material
impact on the Company’s financial statements.
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. For the year ended December 31, 2024, the Company has assessed the
impact of Pillar Two and continues to monitor legislative developments in relevant jurisdictions. Based on the
Company’s assessment and the enacted or substantively enacted tax rates in the jurisdictions in which it
operates, the Company does not expect a material exposure to Pillar Two top-up taxes. The Company has also
assessed the applicability of the OECD’s transitional safe harbor rules and, where applicable, expects to rely
on these provisions to reduce compliance complexity. The Company will continue to evaluate potential future
impacts as jurisdictions finalize their Pillar Two legislation and implementation guidance.
Future Accounting Policies
The following accounting standards under IFRS Accounting Standards have been issued or amended that are
not mandatory for the current period and have not been applied to the consolidated financial statements.
IFRS 18 - Presentation and Disclosures in Financial Statements
The new standard replaces IAS 1 - Presentation of Financial Statements while carrying forward many of the
requirements in IAS 1. IFRS 18 sets out the requirements for the presentation and disclosure of information in
general purpose financial statements to help ensure they provide relevant information that faithfully represents
an entity’s assets, liabilities, equity, income and expenses. It introduces requirements to classify income and
expenses into categories and defined subtotals in the statement of earnings, provide disclosures on
management-defined performance measures (“MPMs”), along with enhanced guidance on aggregation and
disaggregation of information. BGSI is required to apply IFRS 18 for annual reporting periods on or after
January 1, 2027 with early adoption permitted. BGSI is currently assessing the impact of this standard on its
financial statements.
Amendments to IFRS 9 and IFRS 7 - Classification and Measurement of Financial Instruments
The amendments deal with the recognition and derecognition of financial liabilities at settlement date and
when settled through an electronic cash transfer system, further guidance regarding the classification of
financial assets, and additional disclosure requirements for financial instruments with contingent features and
equity instruments classified at FVTOCI. These amendments are effective for the annual reporting periods
beginning on or after January 1, 2026 with early adoption permitted. BGSI is currently assessing the impact of
the these amendments on its financial statements.
BOYD GROUP SERVICES INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
For the years ended December 31, 2024 and 2023
(thousands of U.S. dollars, except share and per share amounts)
67
5.
ACQUISITIONS
The Company completed 33 acquisitions that added 37 collision repair locations and four calibration
businesses during the year ended December 31, 2024. During the second quarter of 2024, the Company
acquired a single location glass business in New Jersey.
The Company has accounted for the 2024 acquisitions using the acquisition method as follows:
Acquisitions in 2024
Total
acquisitions
Identifiable net assets acquired at fair value:
Other currents assets
884
Property, plant and equipment
24,753
Right of use assets
20,098
Identified intangible assets
Customer relationships
19,975
Non-compete agreements
980
Intellectual property
7
Lease liabilities
(20,098)
Identifiable net assets acquired
$
46,599
Goodwill
17,721
Total purchase consideration
$
64,320
Consideration provided
Cash paid or payable
$
60,803
Seller notes
3,517
Total consideration provided
$
64,320
BOYD GROUP SERVICES INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
For the years ended December 31, 2024 and 2023
(thousands of U.S. dollars, except share and per share amounts)
68
The Company completed 71 acquisitions that added 78 locations during the year ended December 31, 2023.
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.
The Company has accounted for the 2023 acquisitions using the acquisition method as follows:
Acquisitions in 2023
Total
acquisitions
Identifiable net assets acquired at fair value:
Cash
$
11
Other currents assets
1,818
Property, plant and equipment
27,219
Right of use assets
49,916
Identified intangible assets
Customer relationships
25,158
Non-compete agreements
1,372
Intellectual property
6,414
Current liabilities
(48)
Lease liabilities
(49,916)
Identifiable net assets acquired
$
61,944
Goodwill
29,996
Total purchase consideration
$
91,940
Consideration provided
Cash paid or payable
$
85,393
Seller notes
6,547
Total consideration provided
$
91,940
The preliminary purchase prices for the 2024 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.
BOYD GROUP SERVICES INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
For the years ended December 31, 2024 and 2023
(thousands of U.S. dollars, except share and per share amounts)
69
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 2024 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 2024, revenue contributed by 2024 acquisitions since being acquired were $43,141. Net losses incurred
by 2024 acquisitions since being acquired were $2,507. If 2024 acquisitions had been acquired on January 1,
2024, BGSI’s revenue and net earnings for the year ended December 31, 2024 would have been $3,116,508
and $19,946 (unaudited), respectively.
6.
INVENTORY
As at
December 31,
2024
December 31,
2023
Parts and materials
$
26,667 $
23,864
Work in process
46,467
54,668
$
73,134 $
78,532
Included in cost of sales for the year ended December 31, 2024 are parts and material costs of $956,398 (2023
– $931,089) and labour costs of $506,162 (2023 – $471,451) with the balance of cost of sales primarily made
up of sublet charges.
BOYD GROUP SERVICES INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
For the years ended December 31, 2024 and 2023
(thousands of U.S. dollars, except share and per share amounts)
70
7.
PROPERTY, PLANT AND EQUIPMENT
Land
Buildings
Shop
Equipment
Office
Equipment
Computer
Hardware
Signage
Vehicles
Leasehold
Improvements
CIP
Total
Depreciation rates
5%
15%
20%
30%
15%
30%
10 to 25 years
straight line
As at January 1, 2024
Cost
$21,011
$27,448
$312,529
$23,828
$38,728
$22,302
$12,051
$275,027
$26,412
$759,336
Accumulated
depreciation
—
(4,502)
(147,294)
(13,909)
(27,227)
(10,901)
(7,124)
(109,398)
—
(320,355)
Net book value
$21,011
$22,946
$165,235
$9,919
$11,501
$11,401
$4,927
$165,629
$26,412
$438,981
For the year ended
December 31, 2024
Acquired through
business
combinations
4,054
9,861
7,042
—
—
—
502
3,294
—
24,753
Additions
7,646
9,072
63,437
4,732
21,995
3,485
6,794
43,632
46,342
207,135
Transfers
—
4,160
5,587
137
62
146
295
10,800
(20,892)
295
Proceeds on
disposal
(19,519)
(37,288)
(22)
—
—
—
(623)
—
(8,120)
(65,572)
Gain (loss) on
disposal
(921)
2,618
(151)
(1)
(2)
(2)
199
(347)
(545)
848
Depreciation
—
(2,823)
(32,785)
(2,650)
(7,280)
(2,058)
(2,348)
(25,554)
—
(75,498)
Foreign exchange
(41)
(81)
(576)
(34)
(65)
(41)
(11)
(420)
—
(1,269)
Net book value
$12,230
$8,465
$207,767
$12,103
$26,211
$12,931
$9,735
$197,034
$43,197
$529,673
As at December 31, 2024
Cost
$12,230
$10,206
$386,048
$28,516
$60,457
$25,802
$18,512
$329,377
$43,197
$914,345
Accumulated
depreciation
—
(1,741)
(178,281)
(16,413)
(34,246)
(12,871)
(8,777)
(132,343)
—
(384,672)
Net book value
$12,230
$8,465
$207,767
$12,103
$26,211
$12,931
$9,735
$197,034
$43,197
$529,673
During the year ended December 31, 2024, BGSI completed sale and leaseback transactions for 33 properties (2023
- two properties) for total proceeds of $64,854 (2023 - $2,832). The gains (losses) arising from sale and leaseback
transactions in 2024 were $1,153 (2023 - ($68)).
BOYD GROUP SERVICES INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
For the years ended December 31, 2024 and 2023
(thousands of U.S. dollars, except share and per share amounts)
71
Land
Buildings
Shop
Equipment
Office
Equipment
Computer
Hardware
Signage
Vehicles
Leasehold
Improvements
CIP
Total
Depreciation rates
5%
15%
20%
30%
15%
30%
10 to 25 years
straight line
As at January 1, 2023
Cost
$13,365
$17,918
$246,930
$19,406
$35,441
$19,421
$9,218
$201,642
$16,191
$579,532
Accumulated
depreciation
—
(3,160)
(122,358)
(11,910)
(23,058)
(9,109)
(6,133)
(89,240)
—
(264,968)
Net book value
$13,365
$14,758
$124,572
$7,496
$12,383
$10,312
$3,085
$112,402
$16,191
$314,564
For the year ended
December 31, 2023
Acquired through
business
combinations
1,086
4,499
11,933
—
11
—
286
9,404
—
27,219
Additions
6,548
4,996
53,457
4,431
3,316
2,981
2,932
65,229
13,091
156,981
Proceeds on
disposal
—
—
(47)
—
—
—
(568)
—
(2,832)
(3,447)
Gain (loss) on
disposal
—
—
(102)
(9)
(11)
—
195
(92)
(38)
(57)
Transfers from
right of use
assets
—
—
—
—
—
—
297
—
—
297
Depreciation
—
(1,331)
(24,740)
(2,008)
(4,216)
(1,904)
(1,302)
(21,362)
—
(56,863)
Foreign exchange
12
24
162
9
18
12
2
48
—
287
Net book value
$21,011
$22,946
$165,235
$9,919
$11,501
$11,401
$4,927
$165,629
$26,412
$438,981
As at December 31, 2023
Cost
$21,011
$27,448
$312,529
$23,828
$38,728
$22,302
$12,051
$275,027
$26,412
$759,336
Accumulated
depreciation
—
(4,502)
(147,294)
(13,909)
(27,227)
(10,901)
(7,124)
(109,398)
—
(320,355)
Net book value
$21,011
$22,946
$165,235
$9,919
$11,501
$11,401
$4,927
$165,629
$26,412
$438,981
BOYD GROUP SERVICES INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
For the years ended December 31, 2024 and 2023
(thousands of U.S. dollars, except share and per share amounts)
72
8.
RIGHT OF USE ASSETS
As at
Property
Vehicles and
Equipment
December 31,
2024
Balance, beginning of period
$
642,289 $
12,058 $
654,347
Acquired through business
combinations
20,098
—
20,098
Additions and modifications
114,237
7,225
121,462
Depreciation
(118,505)
(5,007)
(123,512)
Transfers to property, plant and
equipment
—
(295)
(295)
Foreign exchange
(3,994)
(5)
(3,999)
Net book value
$
654,125 $
13,976 $
668,101
During the year ended December 31, 2024, BGSI completed sale and leaseback transactions for 33 properties (2023 -
two properties) for total proceeds of $64,854 (2023 - $2,832). The gains (losses) arising from sale and leaseback
transactions in 2024 were $1,153 (2023 - ($68)).
As at
Property
Vehicles and
Equipment
December 31,
2023
Balance, beginning of period
$
559,254 $
9,183 $
568,437
Acquired through business
combinations
49,916
—
49,916
Additions and modifications
137,892
6,972
144,864
Depreciation
(106,004)
(3,802)
(109,806)
Transfers to property, plant and
equipment
—
(297)
(297)
Foreign exchange
1,231
2
1,233
Net book value
$
642,289 $
12,058 $
654,347
BOYD GROUP SERVICES INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
For the years ended December 31, 2024 and 2023
(thousands of U.S. dollars, except share and per share amounts)
73
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,
2024
2023
Earnings before income taxes
$
31,660
$
119,521
Combined basic Canadian and U.S. federal, provincial and state tax
rates
26.53 %
26.12 %
Income tax expense at combined statutory tax rates
$
8,398
$
31,219
Adjustments for the tax effect of:
State tax (recovery) liability
(1,539)
1,177
Other non-deductible expenses
226
289
Other
31
180
Income tax expense
$
7,116
$
32,865
In 2024, the recovery of state taxes was due to the recognition of a deferred tax asset related to depreciation
differences in states that do not conform with federal bonus depreciation.
b. Deferred income taxes consist of the Canadian and U.S. tax jurisdictions, respectively, as follows:
As at
December 31,
2024
December 31,
2023
Property, plant and equipment
$
(711) $
(409)
Intangible assets
(5,301)
(5,239)
Right of use assets net of lease liabilities
1,932
1,969
Issue costs
5
461
Director Share Units
1,309
1,639
Non-capital losses carried forward
4,556
5,473
Stock options
491
378
Other
559
44
Deferred income tax asset
$
2,840 $
4,316
BOYD GROUP SERVICES INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
For the years ended December 31, 2024 and 2023
(thousands of U.S. dollars, except share and per share amounts)
74
As at
December 31,
2024
December 31,
2023
Property, plant and equipment
$
56,703 $
54,702
Intangible assets
62,097
52,158
Right of use assets net of lease liabilities
(17,701)
(13,799)
Accrued liabilities
(25,023)
(16,796)
Acquisition costs
(5,288)
(4,203)
Other
(2,229)
(1,791)
Deferred income tax liability
$
68,559 $
70,271
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
December 31,
2024
December 31,
2023
Balance, beginning of year
$
4,316 $
3,815
Deferred income tax recovery
(1,162)
393
Foreign exchange
(314) $
108
Balance, end of year
$
2,840 $
4,316
Deferred income tax liability as at
December 31,
2024
December 31,
2023
Balance, beginning of year
$
70,271 $
62,885
Deferred income tax expense
(1,712)
7,386
Balance, end of year
$
68,559 $
70,271
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, 2024 BGSI has
recognized all of its deferred income tax assets with the exception of $5,219 (2023 - $5,678) in capital losses
available in Canada. At December 31, 2024 the Company has non-capital losses in Canada of $17,682 (2023 -
$21,019) and state net operating losses in the U.S. of $1,275 (2023 - $nil).
The losses in Canada expire as follows:
Year of expiry
2039
$
1,364
2041
$
2,111
2042
$
9,196
2043
$
2,492
2044
$
2,519
BOYD GROUP SERVICES INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
For the years ended December 31, 2024 and 2023
(thousands of U.S. dollars, except share and per share amounts)
75
10. INTANGIBLE ASSETS
Customer
Relationships
Brand
Name
Software
Non-
compete
Agreements
Favourable
Lease
Agreements
Total
As at January 1, 2023
Cost
$412,705
$22,974
$11,640
$23,203
$6,305
$476,827
Accumulated amortization
(109,161)
(5,461)
(7,698)
(18,627)
(2,941)
(143,888)
Net book value
$303,544
$17,513
$3,942
$4,576
$3,364
$332,939
For the year ended
December 31, 2023
Acquired through business combinations
25,158
—
6,414
1,372
—
32,944
Additions
—
—
1,684
—
—
1,684
Amortization
(21,272)
—
(2,626)
(1,864)
(420)
(26,182)
Foreign exchange
928
249
220
1
(2)
1,396
Net book value
$308,358
$17,762
$9,634
$4,085
$2,942
$342,781
As at December 31, 2023
Cost
$439,201
$23,223
$19,823
$24,722
$6,305
$513,274
Accumulated amortization
(130,843)
(5,461)
(10,189)
(20,637)
(3,363)
(170,493)
Net book value
$308,358
$17,762
$9,634
$4,085
$2,942
$342,781
For the year ended
December 31, 2024
Acquired through business combinations
19,975
—
7
980
—
20,962
Additions
—
—
4,029
—
—
4,029
Amortization
(22,022)
—
(2,137)
(1,730)
(420)
(26,309)
Foreign exchange
(3,016)
(855)
(647)
(2)
—
(4,520)
Net book value
$303,295
$16,907
$10,886
$3,333
$2,522
$336,943
As at December 31, 2024
Cost
$454,581
$22,368
$22,803
$25,195
$6,305
$531,252
Accumulated amortization
(151,286)
(5,461)
(11,917)
(21,862)
(3,783)
(194,309)
Net book value
$303,295
$16,907
$10,886
$3,333
$2,522
$336,943
BOYD GROUP SERVICES INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
For the years ended December 31, 2024 and 2023
(thousands of U.S. dollars, except share and per share amounts)
76
11. GOODWILL
As at
December 31,
2024
December 31,
2023
Balance, beginning of year
$
633,986 $
601,706
Acquired through business combination
17,721
29,996
Foreign exchange
(7,843)
2,284
Balance, end of period
$
643,864 $
633,986
The recoverable amount of the Company’s cash generating units (“CGU”) is determined based on the greater
of value-in-use calculations and fair value less costs to sell. When testing goodwill for impairment, BGSI uses
a five year forward looking discounted cash flow of the 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 for
either the US or Canadian CGU as at December 31, 2024. The carrying amount of goodwill for the Canadian
CGU was $89,202 as at December 31, 2024.
Sensitivity testing is conducted as part of the annual impairment tests. No reasonably possible change in
assumptions would result in an impairment in the US CGU. 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 2.6%.
•
If Adjusted EBITDA margins are lower by approximately 2.1% throughout the forecast period,
representing a 15% decline in Adjusted EBITDA.
Earnings before interest, taxes, depreciation and amortization (“EBITDA”) is not a calculation defined in
IFRS Accounting Standards. 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.
BOYD GROUP SERVICES INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
For the years ended December 31, 2024 and 2023
(thousands of U.S. dollars, except share and per share amounts)
77
12. OTHER LONG TERM ASSETS
Other long term assets consist primarily of rent deposits in the amount of $4,051 (2023 - $3,720) and an
investment of $8,000 (2023 - $8,000) 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$0.150 per share in the first, second and third quarters of 2024 and
C$0.153 in the fourth quarter of 2024. The Company declared dividends of C$0.147 per share in the first,
second and third quarter of 2023 and C$0.150 in the fourth quarter of 2023.
The following is the balance of dividends payable:
As at
December 31,
2024
December 31,
2023
Balance, beginning of year
$
2,435 $
2,330
Declared
9,414
9,412
Payments
(9,445)
(9,382)
Foreign exchange
(121)
75
Balance, end of year
$
2,283 $
2,435
Dividends to shareholders were declared and paid in thousands of U.S. dollars as follows:
Record date
Payment date
Dividend amount
March 31, 2024
April 26, 2024
$
2,379
June 30, 2024
July 29, 2024
2,350
September 30, 2024
October 29, 2024
2,377
December 31, 2024
January 29, 2025
2,308
$
9,414
Record date
Payment date
Dividend amount
March 31, 2023
April 26, 2023
$
2,306
June 30, 2023
July 27, 2023
2,376
September 30, 2023
October 27, 2023
2,333
December 31, 2023
January 29, 2024
2,397
$
9,412
BOYD GROUP SERVICES INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
For the years ended December 31, 2024 and 2023
(thousands of U.S. dollars, except share and per share amounts)
78
14. LONG-TERM DEBT
The Company has a credit agreement maturing in March 2028 which consists of revolving credit and swing
line facilities aggregating $550,000 with an accordion feature which can increase the facilities to a maximum
of $850,000 (the “Facilities”). The Facilities are accompanied by a fixed-rate Term Loan A maturing in March
2027, in the amount of $125,000 at an interest rate of 3.455%. The Facilities are with a syndicate of Canadian
and U.S. banks and are 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
Facilities 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 Facilities 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, Canadian Overnight Repo Rate Average (“CORRA”), U.S. Prime
or Secured Overnight Financing Rate (“SOFR”) at the Company’s election. The credit agreement provided for
CORRA as the Canadian benchmark replacement rate on Canadian dollar term advances when the publication
of Canadian Dollar Offered Rate (“CDOR”) ceased in June 2024. The total syndicated Facilities include 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, 2024, the U.S. borrower had drawn $370,000 (December 31, 2023 - $264,500) and the Canadian
borrower had drawn $nil (December 31, 2023 - $nil) on the Facilities and $125,000 (December 31, 2023 -
$125,000) on the Term Loan A.
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.
As at December 31, 2024, the Company was in compliance with all financial covenants.
Seller notes payable of $13,068 on the financing of certain acquisitions are unsecured, at interest rates ranging
from 3% to 8%. The notes are repayable from January 2025 to May 2028.
Long-term debt is comprised of the following:
As at
December 31,
2024
December 31,
2023
Revolving credit facility & swing line (net of financing costs)
$
369,333 $
264,046
Term Loan A (net of financing costs)
124,882
124,812
Seller notes
13,068
32,847
$
507,283 $
421,705
Current portion
8,994
22,038
$
498,289 $
399,667
BOYD GROUP SERVICES INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
For the years ended December 31, 2024 and 2023
(thousands of U.S. dollars, except share and per share amounts)
79
The following is the continuity of long-term debt:
As at
December 31,
2024
December 31,
2023
Balance, beginning of year
$
421,705 $
360,171
Consideration on acquisition
3,517
6,547
Draws
365,994
260,473
Repayments
(283,790)
(205,848)
Deferred financing costs
(829)
—
Amortization of deferred financing costs
656
418
Foreign exchange
30
(56)
Balance, end of year
$
507,283 $
421,705
Included in finance costs for the year ended December 31, 2024 is interest on long-term debt of $29,149 (2023
- $19,814).
15. LEASE LIABILITIES
The following is the continuity of lease liabilities:
As at
December 31,
2024
December 31,
2023
Balance, beginning of year
$
715,277 $
617,926
Assumed on acquisition
20,098
49,916
Additions and modifications
122,761
145,327
Repayments
(149,656)
(131,360)
Financing costs
40,485
32,056
Foreign exchange
(4,670)
1,412
Balance, end of year
$
744,295 $
715,277
Current portion
116,849
107,727
$
627,446 $
607,550
BOYD GROUP SERVICES INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
For the years ended December 31, 2024 and 2023
(thousands of U.S. dollars, except share and per share amounts)
80
Lease expenses are presented in the Consolidated Statement of Earnings as follows:
Year ended December 31,
2024
2023
Operating expenses
$
9,414 $
7,808
Depreciation of right of use assets
$
123,512 $
109,806
Finance costs
$
40,485 $
32,056
Included in operating expenses are short-term and low-value asset lease expenses of $9,312 for the year ended
December 31, 2024 (2023 - $7,711).
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, 2024, the Company has unearned rebates of $3,964 (2023 – $4,579).
BOYD GROUP SERVICES INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
For the years ended December 31, 2024 and 2023
(thousands of U.S. dollars, except share and per share amounts)
81
17. FINANCIAL INSTRUMENTS
Carrying value and estimated fair value of financial instruments
December 31, 2024
December 31, 2023
Classification
Fair value
hierarchy
Carrying
amount
Fair
value
Carrying
amount
Fair
value
Financial assets
Cash
Amortized cost
n/a
19,997 19,997
22,511
22,511
Accounts receivable
Amortized cost
n/a
120,616 120,616
145,793 145,793
Long-term asset
FVTPL (1)
3
8,000
8,000
8,000
8,000
Financial liabilities
Accounts payable and
accrued liabilities
Amortized cost
n/a
306,942 306,942
339,823 339,823
Dividends payable
Amortized cost
n/a
2,283
2,283
2,435
2,435
Long-term debt
Amortized cost
n/a
507,283 499,427
421,705 409,212
(1) Fair Value Through Profit or Loss
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 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, 2024 was approximately
$140,613 (December 31, 2023 - $168,304).
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.
BOYD GROUP SERVICES INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
For the years ended December 31, 2024 and 2023
(thousands of U.S. dollars, except share and per share amounts)
82
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 2024 or
2023.
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, 2024 and December 31, 2023, promissory notes denominated in Canadian
dollars are as follows:
Promissory notes
As at
December 31,
2024
December 31,
2023
Promissory note at 5.0% due September 29, 2027
$
108,000 $
108,000
Promissory note at 5.75% due January 1, 2030
41,800
41,800
Promissory note at 9.22% due January 1, 2029
61,800
61,800
Promissory note at 4.3% due December 30, 2030
70,000
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
December 31,
2024
December 31,
2023
Neither impaired nor past due
$
117,800 $
141,148
Past due:
Over 90 days
7,654
8,159
$
125,454 $
149,307
Allowance for doubtful accounts
(4,838)
(3,514)
Accounts receivable
$
120,616 $
145,793
BOYD GROUP SERVICES INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
For the years ended December 31, 2024 and 2023
(thousands of U.S. dollars, except share and per share amounts)
83
BGSI uses an allowance account to record an estimate of potential impairment for accounts receivables.
Allowance for doubtful accounts
As at
December 31,
2024
December 31,
2023
Balance, beginning of year
$
3,514 $
3,679
Increase (decrease) in the allowance (net of recoveries and amounts
written off)
1,324
(165)
Balance, end of year
$
4,838 $
3,514
Liquidity risk
The following table details the Company’s remaining undiscounted contractual maturities for its financial
liabilities.
Total
Within 1
year
1 to 2
years
2 to 3
years
3 to 4
years
4 to 5
years
After 5
years
Accounts payable and
accrued liabilities
$306,942
$306,942
$—
$—
$—
$—
$—
Long-term debt
507,283
8,994
372,823
125,417
49
—
—
Lease liabilities
948,906
157,105
143,935
128,045
107,052
83,934
328,835
$1,763,131 $473,041
$516,758
$253,462
$107,101
$83,934
$328,835
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, 2024 it is estimated that the impact of a 1% increase to
market rates would result in a $3,308 decrease (2023 – $1,948 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, 2024 as well as comprehensive earnings would have changed by $nil
due to no foreign exchange contracts being in place at the end of 2024 and 2023.
BOYD GROUP SERVICES INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
For the years ended December 31, 2024 and 2023
(thousands of U.S. dollars, except share and per share amounts)
84
18. 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.
19. CONTRIBUTED SURPLUS
During the year, stock option accretion (net of issue costs) of $849 (2023 - $502) was credited to contributed
surplus.
20. 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.
BOYD GROUP SERVICES INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
For the years ended December 31, 2024 and 2023
(thousands of U.S. dollars, except share and per share amounts)
85
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.
21. 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
Affiliated Person(s)
Location
Lease
Expires
December 31,
2024
December 31,
2023
Gerber Building No. 1
Ptnrp
Timothy O'Day
South Elgin, IL
2029
105
103
22. 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.
Year ended December 31,
Sales
2024
2023
Canada
$
244,715 $
231,601
United States
2,825,627
2,714,387
$
3,070,342 $
2,945,988
Reportable Assets
December 31,
2024
December 31,
2023
As at
Canada
$
199,299 $
220,786
United States
1,979,282
1,849,309
$
2,178,581 $
2,070,095
BOYD GROUP SERVICES INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
For the years ended December 31, 2024 and 2023
(thousands of U.S. dollars, except share and per share amounts)
86
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 51% (2023 – 53%) of total sales, one insurance company represents approximately 16% (2023
– 19%) of the Company’s total sales, while a second insurance company represents approximately 12% (2023
– 11%).
23. COMPENSATION OF KEY MANAGEMENT
For the years ended December 31,
2024
2023
Salaries and short-term employee benefits
$
5,302 $
7,531
Long-term incentive plan
3,801
3,155
Share options
582
1,119
$
9,561 $
11,805
Key management includes BGSI’s Directors as well as the most senior officers of the Company and
Subsidiary Companies.
24. 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, 2022, January 1, 2023, and January 1, 2024, Performance Share Unit awards were granted to
certain executive officers for the 2022, 2023 and 2024 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 2022, 2023, and 2024 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.
BOYD GROUP SERVICES INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
For the years ended December 31, 2024 and 2023
(thousands of U.S. dollars, except share and per share amounts)
87
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, 2022, January 1, 2023, and January 1, 2024 Restricted Share Units were granted to certain
executive officers for the 2022, 2023 and 2024 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.
25. EMPLOYEE EXPENSES
For the years ended December 31,
2024
2023
Salaries and short-term employee benefits
$
1,227,586 $
1,149,282
Post-employment benefits
8,784
5,757
Long-term incentive plan
509
6,025
Share options
857
436
$
1,237,736 $
1,161,500
26. DEFINED CONTRIBUTION PENSION PLANS
The Company has defined contribution pension plans for employees. The Company matches employee
contributions at rates up to 3% of the employees’ salary. The expense and payments for the year were $8,784
(2023 - $5,757).
BOYD GROUP SERVICES INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
For the years ended December 31, 2024 and 2023
(thousands of U.S. dollars, except share and per share amounts)
88
27. EARNINGS PER SHARE
Year ended December 31,
2024
2023
Net earnings
$
24,544 $
86,656
Basic weighted average number of shares
21,472,436
21,472,194
Add:
Stock Option Plan
4,585
3,670
Average number of shares outstanding - diluted basis
21,477,021
21,475,864
Basic earnings per share
$
1.14 $
4.04
Diluted earnings per share
$
1.14 $
4.04
For the year ended December 31, 2024, 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 and 2024 could have
potentially diluted the basic earnings per share, but their impact was anti-dilutive during this period.
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.
BOYD GROUP SERVICES INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
For the years ended December 31, 2024 and 2023
(thousands of U.S. dollars, except share and per share amounts)
89
28. 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.
The information on the outstanding options are as follows:
Year ended December 31,
2024
2023
Number
Weighted
average exercise
price (C$)
Number
Weighted
average exercise
price (C$)
Balance at the beginning of year
54,559 $
198.78
31,113 $
186.41
Granted during the year
18,269
282.26
28,821
211.13
Forfeited during the year
(4,535)
219.71
(5,375)
193.39
Expired during the year
—
—
—
—
Exercised during the year
(531)
204.83
—
—
Balance at the end of year
67,762 $
219.84
54,559 $
198.78
Exercisable at the end of the year
8,351 $
195.58
2,690 $
219.21
The weighted average grant date fair value of stock options granted during fiscal year 2024 was $97.75 per
option (2023 - $71.64). The fair value of each option granted was determined using a Black-Scholes option
pricing model. The option valuation was based on the following assumptions:
2024
2023
Risk-free interest rate
3.61%
3.48%
Expected life (years)
5.5
5.5
Expected stock price volatility
30.68%
30.40%
Expected dividend yield
0.193%
0.272%
BOYD GROUP SERVICES INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
For the years ended December 31, 2024 and 2023
(thousands of U.S. dollars, except share and per share amounts)
90
29. CHANGES IN NON-CASH OPERATING WORKING CAPITAL ITEMS
For the years ended December 31,
2024
2023
Accounts receivable
$
23,436 $
(5,962)
Inventory
5,652
2,288
Prepaid expenses
(3,174)
(5,153)
Accounts payable and accrued liabilities
(27,199)
29,946
Income taxes, net
(4,624)
(2,047)
$
(5,909) $
19,072
BOYD GROUP SERVICES INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
For the years ended December 31, 2024 and 2023
(thousands of U.S. dollars, except share and per share amounts)
91
BOARD OF DIRECTORS
Boyd Group Services Inc. Board of Directors consists of nine members – two that are officers or retired officers of
BGSI and seven 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 David Brown
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 as 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.
92
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. Ms. Feuell is currently the CEO for Chrysler and Alfa Romeo. 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.
John Hartmann currently serves on the Boards of Franchise Group, Inc., a private holding company which owns
The Vitamin Shoppe, Pet Supplies Plus and Buddy’s Home Furnishings; and Ascend Wellness Holdings Inc., a U.S.
publicly listed company, where he was previously Chief Executive Officer. 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.
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 two privately held companies including
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 Bailey Metal Products, 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 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. On August 7, 2024,
Mr. O’Day relinquished the “President” title. 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.
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. Mr. Onuwa also
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served on the subsidiary boards of various RBC insurance companies as an executive director from 2007 to 2016.
Mr. Onuwa is currently a member of the board of governors at University of Guelph and also on the board of Plan
International Canada where he sits on various committees.
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 corporate governance and sustainability, executive compensation design and
implementation, executive level succession planning, global talent management, leadership development, global
benefits design, and diversity and inclusion efforts.
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CORPORATE DIRECTORY
COMPANY EXECUTIVE OFFICERS
Timothy O’Day
Chief Executive Officer
Jeff Murray
Executive Vice President & Chief
Financial Officer
Brian Kaner
President & Chief Operating
Officer
Creighton Warren*
Chief Information Officer
Kim Morin*
Vice President & Chief Human
Resources Officer
Paul Gange*
Chief Operating Officer, USA
Collision
Stephen Boyd*
Senior Vice President, Canada
Collision
*
*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
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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
Legal Counsel
Auditors
Computershare Trust Company
8th Floor, 100 University Avenue
Toronto, Ontario
M5J 2Y1
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
The Toronto-Dominion Bank
TD North Tower
77 King Street West, 25th Floor
Toronto, Ontario
M5K 1A2
Additional Bank Syndicate Members
Bank of America N.A.
The Bank of Nova Scotia
National Bank of Canada
Canadian Imperial Bank of Commerce
———————————————————————————————————————
Annual Meeting and Special Meeting
www.virtualshareholdermeeting.com/BOYD2025
Wednesday, May 14, 2025
1:00 p.m. (CT)
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