Boyd Group Services (BYD) Q3 2024 earnings summary

Executive summary

• Q3 2024 sales rose 2% year-over-year to $752.3 million, driven by new locations, but same-store sales declined 3.5% amid industry-wide repairable claims dropping 12.6%; net earnings fell to $2.9 million from $20.5 million, with adjusted net earnings at $3.2 million.

• Gross margin improved to 45.7% from 45.2% year-over-year, aided by internalization of scanning and calibration services, while operating expenses as a percentage of sales increased to 35%.

• Management remains committed to long-term growth, focusing on organic expansion, strategic acquisitions, and operational excellence, though the goal of doubling business size by 2025 may be slightly delayed due to economic and industry conditions.

• The company operates over 970 locations in North America, with the majority of revenue generated in the U.S. and over 90% of revenue from insurance pay.

• Industry remains highly fragmented, offering consolidation opportunities, but faces headwinds from insurance premium inflation, economic uncertainty, and labor shortages.

Financial highlights

• Q3 2024 sales: $752.3 million (+2% YoY); adjusted EBITDA: $80.1 million (10.7% margin, -14.7% YoY); net earnings: $2.9 million (vs. $20.5 million YoY); adjusted net earnings: $3.2 million ($0.15/share, down from $1.00/share YoY).

• Nine months ended September 30, 2024: sales $2.318 billion (+5.1% YoY), adjusted EBITDA $251.4 million (down from $274.0 million YoY), net income $22.1 million (vs. $67.6 million YoY), adjusted net earnings per share $1.15 (vs. $3.25 YoY).

• Operating expense ratio increased to 35% in Q3 (from 32.5% YoY); gross margin improved to 45.7% (from 45.2% YoY).

• Net debt before lease liabilities rose to $486.2 million (from $399.2 million at year-end 2023); total debt net of cash at period end: $1.225 billion.

• Five-year revenue CAGR is 14.4%, with 2023 revenue at $2.946 billion and five-year total shareholder return at 145.93%.

Outlook and guidance

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

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

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

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

• Focus remains on improving gross margin, cost structure, and leveraging insurance and fleet relationships.