Mr. Timothy O'Day reports

BOYD GROUP SERVICES INC. REPORTS FOURTH QUARTER AND FULL YEAR 2023 RESULTS

Boyd Group Services Inc. has released the results for the three- and 12-month periods ended Dec. 31, 2023. The Boyd Group's fourth quarter 2023 financial statements and management's discussion and analysis have been filed on SEDAR+. This news release is not in any way a substitute for reading Boyd's financial statements, including notes to the financial statements, and Boyd's management's discussion and analysis. All amounts are in U.S. dollars unless otherwise stated.

2023 results and highlights:

• Sales increased by 21.1 per cent to $2.9-billion from $2.4-billion in the same period of 2022, including same-store sales increases of 15.8 per cent. Fiscal 2023 recognized one less selling and production day when compared with fiscal 2022, which decreased selling and production capacity by 0.4 per cent in 2023 when compared with 2022.
• Adjusted EBITDA (earnings before interest, taxes, depreciation and amortization) increased 34.6 per cent to $368.2-million, compared with adjusted EBITDA of $273.5-million in 2022.
• Adjusted net earnings increased 111.7 per cent to $89.7-million, compared with $42.4-million in adjusted net earnings in 2022 and adjusted net earnings per share1 increased 112.2 per cent to $4.18, compared with $1.97 in 2022.
• Net earnings increased 111.6 per cent to $86.7-million, compared with $41-million in 2022 and net earnings per share increased 111.6 per cent to $4.04, compared with $1.91 in 2022.
• Positive cash flows provided by operating activities of $357.5-million, compared with $264.2-million in 2022.
• Increased quarterly dividends by 2 per cent in November, 2023, bringing dividends to an annualized amount of 60 Canadian cents per share from 59 Canadian cents per share.
• Added 106 new locations, including 78 acquisition locations and 28 start-up locations.
• Published Boyd's second environmental, social and governance report.
• Announced the election of Christine Feuell to the board of directors.
• Announced the appointment of Jeff Murray as executive vice-president and chief financial officer.

Subsequent to quarter-end:

• Added 10 locations;
• Declared first quarter dividend in the amount of 15 Canadian cents per share.

"We are pleased with the strong financial results reported in 2023, once again achieving record sales and showing meaningful improvement in leverage and profitability when compared with the prior year," said Timothy O'Day, president and chief executive officer of the Boyd Group. "Demand for services remained high throughout 2023," added Mr. O'Day. "We were able to continue successfully negotiating selling rate increases from our insurance company clients to better reflect the labour cost increases we have been experiencing, although further increases are necessary to bring our labour margin back into the normal range."

Outlook

Boyd continues to execute on its growth strategy. During 2023, the company added 78 locations through acquisition and 28 start-up locations, for a total of 106 new collision repair locations. In addition to location growth, Boyd was able to achieve same-store sales increases of 15.8 per cent. Heading into 2024, the company is facing strong comparative period same-store sales results. Thus far in the first quarter of 2024, same-store sales increases, while positive, are lower than the average quarterly 10-year level of same-store sales growth of 5.9 per cent. Mild winter weather impacted demand for glass services, which are already seasonally low in the fourth and first quarters of the year. The same weather is impacting demand for collision repair services.

Performance of the business during the first quarter of 2024 has been challenged by a number of factors. During 2023, Boyd added a record number of new single locations, including 26 locations through acquisition and 11 start-up locations in the fourth quarter. These new locations negatively impact earnings during the first several quarters of operation, and typically mature to align with overall company performance over a two-to-three-year period. While Boyd continues to receive pricing increases, labour margins remain consistent with the previous quarter and below historical levels. This remains a key area of focus for the company, impacting both the gross margin percentage and adjusted EBITDA margin percentage that can be achieved in the short term. As in prior years, the first quarter is burdened by higher payroll taxes that occur early in the year, while the fourth quarter of 2023 benefited from expense accrual reductions, as certain expense estimates were firmed up at amounts that were lower than previously estimated and accrued. As a result, thus far in the first quarter, adjusted EBITDA dollars are trending slightly above levels achieved in the first quarter of the prior year, but below the level achieved in the fourth quarter. Despite these challenges, Boyd remains positive about the future of the business and the opportunities that lie ahead.

The pipeline to add new locations and to expand into new markets is robust. Boyd has made investments in resources to support growth through single-location, multilocation, or a combination of single and multilocation acquisitions. In addition, investments have been made to support growth through start-up locations. Together, these investments give the company flexibility on how best to grow. Operationally, Boyd is focused on optimizing performance of new locations, as well as scanning and calibration services, and consistent execution of the WOW Operating Way. Given the high level of location growth in 2021, the strong same-store sales growth during 2022, and the combination of same-store sales growth and location growth in 2023, Boyd remains confident that the company is on track to achieve its long-term growth goals, including doubling the size of the business on a constant currency basis from 2021 to 2025 against 2019 sales.

2023 fourth quarter conference call and webcast

As previously announced, management will hold a conference call on Wednesday, March 20, 2024, at 10 a.m. (ET) to review the company's 2023 fourth quarter results. You can join the call by dialling 888-390-0546 or 416-764-8688. To join the conference call without operator assistance, you may register and enter your phone number to receive an instant automated call back. A live audio webcast of the conference call will be available through the Boyd Group website. An archived replay of the webcast will be available for 90 days. A taped replay of the conference call will also be available until Wednesday, March 27, 2024, at midnight by calling 888-390-0541 or 416-764-8677, replay code 840503, reference No. 48840503.

About Boyd Group Services Inc.

Boyd Group Services is a Canadian corporation and controls The Boyd Group Inc. and its subsidiaries. Boyd Group shares trade on the Toronto Stock Exchange under the symbol BYD.TO.

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