Boyd Group Services Q3 2024 Earnings Report

Boyd Group Services EPS Results

• Actual EPS: C$0.20
• Consensus EPS: C$0.66
• Beat/Miss: Missed by -C$0.46
• One Year Ago EPS: N/A

Boyd Group Services Revenue Results

• Actual Revenue: $1.03 billion
• Expected Revenue: $1.03 billion
• Beat/Miss: Missed by -$7.82 million
• YoY Revenue Growth: N/A

Boyd Group Services Announcement Details

• Quarter: Q3 2024
• Date: 11/5/2024
• Time: N/A
• Conference Call Date: Tuesday, November 5, 2024
• Conference Call Time: 9:00AM ET

Boyd Group Services (TSE:BYD) is a Canadian corporation and controls The Boyd Group Inc. and its subsidiaries. Boyd Group Services Inc. shares trade on the Toronto Stock Exchange (TSX) under the symbol BYD.TO and the New York Stock Exchange (NYSE) under the symbol BGSI. For more information on The Boyd Group Inc. or Boyd Group Services Inc., please visit our website at https://www.boydgroup.com .

Boyd Group Services Q3 2024 Earnings Call Transcript

Key Takeaways

• Boyd reported Q3 sales of $752.3 M (up 2% YoY including $41.3 M from 94 new locations), while adjusted EBITDA fell 14.7% to $80.1 M and net earnings declined to $2.9 M (adjusted $3.2 M or $0.15/share) amid low claims volumes.
• Same-store sales (ex-FX) dropped 3.5%, outperforming an industry-wide 12.6% decline in repairable claims (9.5% ex-comprehensive), driven by insurance premium inflation and economic uncertainty.
• Gross margin rose to 45.7% thanks to internalizing scan and calibration, performance-based pricing, and improved glass margins, partially offset by weaker labor and refinish margins.
• Operating expenses increased to 35% of sales (from 32.5%) due to fixed costs at new sites and softer same-store sales; management is pursuing cost structure improvements to drive expense leverage toward a 14% EBITDA margin.
• During Q3, Boyd completed $31.9 M in sale-leasebacks, added 41 new locations YTD and continues greenfield build-outs and strategic acquisitions, remaining committed to its goal of doubling the business by 2025 despite near-term timing risks.

Presentation

[Operator]

Good morning, everyone. Welcome to the Boyd Group Services Inc. Q3 2024 results conference call. Listeners are reminded that certain matters discussed in today's conference call, or answers that may be given to questions asked, could constitute forward-looking statements that are subject to risks and uncertainties related to Boyd's future financial or business performance. Actual results could differ materially from those anticipated in these forward-looking statements.

[Tim O'Day, President and CEO at Boyd Group Services]

Operator? You just gotta have the screen. Operator?

[Tim O'Day, President and CEO at Boyd Group Services]

This is the call.

[Tim O'Day, President and CEO at Boyd Group Services]

Operator?

[Operator]

Apologies for the delay. Mr. O'Day, please begin your conference. Good morning, everyone. Welcome to the Boyd Group Services. Our business performance. Actual results could differ materially from those anticipated forward-looking statements.

[Tim O'Day, President and CEO at Boyd Group Services]

Hello, operator? Hello, operator?

[Tim O'Day, President and CEO at Boyd Group Services]

Let's go to his help line.

[Operator]

Good morning, everyone. Welcome to the Boyd Group Services Inc. Q3 2024 results conference call. Listeners are reminded that certain matters discussed in today's conference call, or answers that may be given to questions asked, could constitute forward-looking statements that are subject to risks and uncertainties related to Boyd's future financial or business performance. Actual results from those anticipated in these forward-looking statements. The risk factors that may affect results are detailed in Boyd's annual information form, in other periodic filings, and registration statements, and you can access these documents at SEDAR+'s database found at sedarplus.ca. I'd like to remind everyone that this conference call is being recorded. Today is Tuesday, November 5, 2024, and I would like to introduce Mr. Tim O'Day, President and Chief Executive Officer of Boyd Group Services. Please go ahead, sir.

[Tim O'Day, President and CEO at Boyd Group Services]

Thank you, operator. I apologize for being late, everyone, and good morning. Thank you for joining us for today's call. On the call with me today is Jeff Murray, our Executive Vice President and Chief Financial Officer, and Brian Kaner, our President and Chief Operating Officer. We released our 2024 Q3 results before markets open today. You can access our news release, as well as our complete financial statements and MD&A on our website at boydgroup.com. Our news release, financial statements, and MD&A have also been filed on SEDAR+ this morning. On today's call, we'll discuss the financial results for the three and nine-month periods ended September 30, 2024, and provide a general business update. We will then open the call for questions. Q3 results continue to be impacted by low claims volumes.

[Tim O'Day, President and CEO at Boyd Group Services]

Although we're disappointed with the Q3 results, the company continues to perform better than the industry and continues to be well-positioned for the future. During the Q3 of 2024, Boyd recorded sales of $752.3 million, adjusted EBITDA of $80.1 million, and net earnings of $2.9 million. During the Q3, the industry experienced higher total loss rates, as well as a deferral in repairs and an increase in non-filed claims, driven, we believe, by significant insurance premium inflation and overall economic uncertainty. Industry sources report a year-over-year decrease in repairable claims of 12.6% for all losses and 9.5% excluding comprehensive claims. Boyd outperformed the industry, posting a year-over-year same-store sales decline of 3.5%. For the Q3 of 2024, sales were $752.3 million, a 2% increase when compared to the same period of 2023. This reflects a $41.3 million incremental contribution from 94 new locations.

[Tim O'Day, President and CEO at Boyd Group Services]

As mentioned earlier, our same-store sales, excluding foreign exchange, decreased by 3.5%. The Q3 recognized one additional selling and production day when compared to the same period of 2023, which increased selling and production capacity by approximately 1.6%. Gross margin was 45.7% in the Q3, compared to 45.2% achieved in the same period of 2023. Gross margin percentage benefited from increased internalization of scanning and calibration, improved performance-based pricing, and improved glass margins, partially offset by reduced labor margin and part margins. Labor rate increases have added to sales and gross profit dollars. However, margins remain below historical levels. Gross margins are within the normal historical range for mix and margin changes period to period. Operating expenses for the Q3 of 2024 were $263.4 million, or 35% of sales, compared to $239.9 million, or 32.5% of sales, in the same period of 2023.

[Tim O'Day, President and CEO at Boyd Group Services]

Operating expenses as a percentage of sales was significantly impacted by the decline in same-store sales and new locations, which contributed sales with an operating expense ratio that was higher than the operating expense ratio of same stores. 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 recruiting costs, these impacts were more than offset by the fixed costs on existing and new locations. On a sequential basis, operating expenses as a percentage of sales increased from 34.1% to 35% from the second to the third quarter of 2024. During this period, operating expenses as a percentage of sales was significantly impacted by the decline in sales on a quarter-over-quarter basis.

[Tim O'Day, President and CEO at Boyd Group Services]

Adjusted EBITDA, or EBITDA adjusted for fair value adjustments to financial instruments and costs related to acquisitions and transactions, was $80.1 million, a decrease of 14.7% over the same period of 2023. The decrease was primarily the result of a decline in repairable claims, which resulted in same-store sales declines and a high ratio of operating expenses as a percentage of sales. Net earnings for the Q3 of 2024 was $2.9 million, compared to $20.5 million in the same period of 2023. Excluding fair value adjustments and acquisition and transaction costs, adjusted net earnings for the Q3 of 2024 was $3.2 million, or $0.15 per share, compared to $21.5 million, or $1 per share in the same period of the prior year.

[Tim O'Day, President and CEO at Boyd Group Services]

Net earnings and adjusted net earnings for the period were negatively impacted by the decrease in Adjusted EBITDA, as well as increased depreciation expense and increased finance costs. Depreciation and finance costs were negatively affected by investments in growth and investment in network technology upgrades during a period of lower sales and Adjusted EBITDA. For the nine months ended September 30, 2024, sales totaled $2.3 billion, an increase of $112 million, or 5.1% when compared to the same period of the prior year, driven by $152.4 million in incremental contributions from 142 new locations that had not been in operation for the full comparative period. Our same-store sales, excluding foreign exchange, decreased by 1.8% for the nine months ended September 30, 2024, recognizing one additional selling and production day when compared to the same period of 2023, which increased selling and production capacity by approximately 0.5%.

[Tim O'Day, President and CEO at Boyd Group Services]

Gross margin decreased to 45.4% of sales compared to 45.5% in the comparative period, while gross profit increased to $1,051,000,000 from $1,003,000,000 when compared to the same period of the prior year. Gross profit increased as a result of increased sales due to location growth when compared to the prior period. Gross margin percentage decreased due to several factors, including lower contributions from a greater number of new locations and labor rate margins, which remained below historical levels. These negative impacts were partially offset by the benefit of increased internalization of scanning and calibration, improved glass margins, and improvements in performance-based pricing. Operating expenses increased $70.7 million when compared to the same period of the prior year, primarily as a result of location growth and inflationary increases.

[Tim O'Day, President and CEO at Boyd Group Services]

Operating expenses as a percentage of sales were 34.5% for the nine months ended September 30, which compared to 33.1% for the same period of 2023. Operating expenses as a percentage of sales was negatively impacted by the decline in same-store sales and new locations, which contributed sales with a higher operating expense ratio. Adjusted EBITDA for the nine months ended September 30, 2024, was $251.4 million, compared to $274.0 million in the same period of the prior year. The $22.6 million decrease was primarily the result of declines in repairable claims for services, which resulted in same-store sales declines and a high ratio of operating expenses as a percentage of sales.

[Tim O'Day, President and CEO at Boyd Group Services]

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 the fixed costs on existing and new locations. We reported net income of $22.1 million compared to $67.6 million for the same period of the prior year. Adjusted net earnings per share decreased from $3.25 to $1.15. The decrease in Adjusted net earnings per share is primarily attributed to the decrease in Adjusted EBITDA, as well as increased finance costs and increased depreciation related to location growth, including additional held real estate assets and our investment in network technology upgrades. At the end of the period, we had total debt net of cash of $1.2 billion.

[Tim O'Day, President and CEO at Boyd Group Services]

Debt net of cash before lease liabilities increased from $399.2 million at December 31, 2023, to $486.2 million at September 30, 2024. Debt net of cash before lease liabilities increased as a result of location growth, including increased real estate assets that pertain to startup locations. The company's strategy has been not to hold real estate except where it is necessary for growth opportunities. Certain startup locations necessitate short-term holding of real estate until the build is complete and operations have begun. During the Q3 of 2024, the company completed sale leaseback transactions for proceeds of $31.9 million. The sale leaseback transactions allowed the company to replenish capital that can be redeployed to further grow the business. At September 30, 2024, the company has held real estate assets totaling $66.3 million.

[Tim O'Day, President and CEO at Boyd Group Services]

During 2024, the company plans to make cash capital expenditures, excluding those related to network technology upgrades and acquisition and development of new locations, within the range of 1.8%-2.0% of sales. Excluding these expenditures, the company spent approximately $52.1 million, or 2.2% of sales, on capital expenditures during the nine months ended September 30, 2024. The company spent $45.1 million, or 2% of sales, on capital expenditures for the same period of 2023. The current rate of capital expenditures as a percentage of sales has been trending above these percentages due to the decreased level of sales that the business is currently generating. The current industry and market conditions are continuing to impact demand for services thus far in the Q4, which has resulted in same-store sales experience in line with Q3 results. Similar to the Q3, the Q4 has also been modestly impacted by hurricane activity.

[Tim O'Day, President and CEO at Boyd Group Services]

In this challenging environment, the company continues to focus on maximizing value to customers and shareholders through initiatives to improve controllable metrics, including sales, with a focus on improving capture rates, leveraging insurance company relationships, and adding and expanding fleet relationships. Boyd is committed to improving gross margin through initiatives such as the internalization of scanning calibration services, executing on Boyd's Repair First strategy, and focusing on the use of cost-effective alternative parts, which also delivers strong value by lowering repair costs for the company's customers. While management took a number of cost-related actions during the Q3, the continuing softer level of demand has caused us to further examine the company's cost structure, as well as cost-saving initiatives to drive improvement in operating expenses as a percentage of sales, and we are confident opportunities exist.

[Tim O'Day, President and CEO at Boyd Group Services]

The sales and gross margin initiatives, along with a heightened focus on and a full review of Boyd's operating expenses, will help mitigate the impact of the current environment and put Boyd in the best possible position if conditions improve. On a year-to-date basis, Boyd has added 41 new locations. In the current negative claims environment, Boyd has placed additional focus and attention on the core business. As a result, acquisition activity is running at a slower pace than was the case one year ago. However, Boyd is continuing to identify and pursue opportunities, and the commitment to growth remains. Growth through startup locations is also continuing, in spite of the longer development cycle, ramp-up period, and additional initial capital investment required when compared to single-shop locations.

[Tim O'Day, President and CEO at Boyd Group Services]

Startup locations offer a number of advantages, and as a result, the company plans to continue increasing the proportion of growth using this approach. While the company has been successfully executing on Boyd's long-term growth goals, the current year has brought with it some unanticipated economic and industry conditions. The company has focused on increasing value to our customers and shareholders and has consistently performed above industry, with a focus on emergence 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 goal of doubling the size of the business on a constant currency basis from 2021 to 2025 against 2019 sales. Management remains firmly committed and cautiously optimistic that the company will achieve its long-term goal.

[Tim O'Day, President and CEO at Boyd Group Services]

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's 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 financial options, positions Boyd well for success in the future.

[Tim O'Day, President and CEO at Boyd Group Services]

With that, I would now like to open the call to questions. Operator?

[Operator]

Thank you, sir. Ladies and gentlemen, if you do have a question, please press star followed by one on your touch-tone phone. You will then hear a prompt acknowledging that your hand has been raised. And if you wish to decline from the polling process, please press star followed by two. And if you're using your speakerphone, you will need to lift the handset up first before pressing any keys. Please press star one now if you have any questions. And your first question will be from Sabahat Khan at RBC Capital Markets. Please go ahead.

[Tim O'Day, President and CEO at Boyd Group Services]

Good morning, Sabahat.

[Sabahat Khan, Analyst at RBC Capital Markets]

Good morning. Thanks.

[Sabahat Khan, Analyst at RBC Capital Markets]

I guess maybe just with a higher-level question and to the extent you can comment on it, just in terms of kind of the Q4 outlook and the moderation and continuing that into 2025, how are you viewing 2025? Are the market conditions at a point where you think we could see some level of sequential improvement in store sales? Just I think the overall question is, how long do you expect the current industry dynamics to maybe continue? And when could we see the demand environment turn somewhat to the positive? Thank you.

[Tim O'Day, President and CEO at Boyd Group Services]

Yeah. Sabahat, it's a difficult question to answer. We can't really predict the future. The Q3 claims volume was down significantly, as I communicated, to 12.6%, including comprehensive losses, and 9.5%, excluding comprehensive losses. That was a bit of a surprise. The Q3 of the prior year was down 4.1%.

[Tim O'Day, President and CEO at Boyd Group Services]

Now, Q4, as you may recall, was down 10% last year. We don't have any Q4 data yet. We do expect to get some monthly data as we go through the quarter, but we don't have that yet, but I believe that we must be approaching, if not at the bottom, but time will tell.

[Sabahat Khan, Analyst at RBC Capital Markets]

Great. And then just in terms of some of the cost actions, can you maybe just highlight, as you said, there are some potential opportunities, just some areas, and are there opportunities that you've already executed on and we could see the benefits later, or is it still early in the process to adjust the cost base somewhat?

[Tim O'Day, President and CEO at Boyd Group Services]

Yeah. We actually began to take action in Q2 and normalized staffing to really match the levels of demand that we expected, and we have further opportunity given the current level of demand.

[Tim O'Day, President and CEO at Boyd Group Services]

But more broadly than that, the management team has taken a look more broadly at cost structure to see what other opportunities we've had. We've done some of that assessment. We definitely see opportunity, and we'll take some action on that opportunity, although it won't necessarily impact the business overnight. But there are a number of actions, and I alluded to this in the script, but there are a number of actions that we have taken that have had a positive impact. But it's hard to see that with the decline of repairable claims.

[Sabahat Khan, Analyst at RBC Capital Markets]

Great. And then just one last one. You indicated in your release that there was a focus on the core business and maybe a bit less on M&A and just new store openings versus historical levels. Just what are your thoughts on sort of that side of the business going into 2025?

[Sabahat Khan, Analyst at RBC Capital Markets]

Do you expect to maybe return to historical levels of non-inorganic growth as we look into the next year? Thanks.

[Tim O'Day, President and CEO at Boyd Group Services]

I would say that is my expectation. It will depend in part on market conditions. One of the things, Sabahat, that we're seeing is that sellers that we may enter into a letter of intent with, when we start the due diligence, the performance of their business isn't what may have been represented, and that's really, by and large, due to current market conditions. And we're committed to continuing to grow, but we also want to make sure we do it accretively. And if the business isn't what it was represented to be, then we either need to reprice it or defer on it temporarily. So I think the growth, the slowdown, is partly market conditions with sellers.

[Tim O'Day, President and CEO at Boyd Group Services]

I don't know if you recall that during the pandemic, sellers' price expectations, despite drops in volumes, did not seem to change much. I think we're seeing a bit of that now. But we remain very committed to and expect to be able to grow at historical rates in the not-too-distant future.

[Sabahat Khan, Analyst at RBC Capital Markets]

Great. Thanks very much for the call.

[Tim O'Day, President and CEO at Boyd Group Services]

Thanks, Sabahat.

[Operator]

Next question will be from Derek Lessard at TD Cowen. Please go ahead.

[Derek Lessard, Analyst at TD Cowen]

Yeah. Good morning. Tim. Jeff.

[Tim O'Day, President and CEO at Boyd Group Services]

Good morning. Brian.

[Derek Lessard, Analyst at TD Cowen]

Good morning. So I just maybe wanted to follow up on Sabahat's question. Obviously, I just wanted to get maybe your take on the higher total industry loss rates and whether or not is it just a function of the used car prices normalizing post-COVID, or is there any other sort of underlying forces at play?

[Tim O'Day, President and CEO at Boyd Group Services]

Yeah. Total loss rates in the most recent quarter are pretty close to where they were in 2019. They changed year over year by 180 basis points. I would say the vast majority of that is related to lower used car prices, making those less economical to repair. A year ago, when the total loss rates were quite low, although they elevated a little bit from where they bottomed out, we were repairing vehicles that historically we would not have seen in our business. While total loss rates have increased, and that's part of what we saw in the 9.5% repairable claims decline, excluding comprehensive claims, they really aren't elevated from historical levels.

[Derek Lessard, Analyst at TD Cowen]

Okay. That's helpful. One last one before I re-queue. Obviously, a healthy dose of cautiousness to your 2025 outlook.

[Derek Lessard, Analyst at TD Cowen]

I was just wondering if maybe you could speak to some of your assumptions and the thought process there and just maybe talk about what your expectations around M&A were to set that benchmark.

[Tim O'Day, President and CEO at Boyd Group Services]

Yeah. I think, first of all, we're optimistic that we can achieve the goal, but we're also faced with market conditions that we didn't anticipate. When we went into the Q3, I think we expected claim volumes to begin to return to normal. So we're really just saying that we're going to continue to grow both organically and inorganically. We believe we have an opportunity to achieve the goal as scheduled, but there's some risk given current market conditions. If claim volumes don't begin to return to normal levels in Q4 or, worse, it persists to some degree in Q1, it may make it more challenging.

[Tim O'Day, President and CEO at Boyd Group Services]

So we're not giving up on the goal, and we remain committed to it, but we also felt an obligation to say that there is some risk.

[Derek Lessard, Analyst at TD Cowen]

Awesome. And maybe I'll squeeze one last one in here. On your same-store sales growth outlook, you did note, obviously, Q4 was so far in line with Q3. I was just wondering, is this inclusive of the hurricane impact? And I guess while we're on it, I was wondering if you could maybe give us the Q3 hurricane impact on EBITDA or margin.

[Tim O'Day, President and CEO at Boyd Group Services]

Yeah. First of all, I would say that our guidance on what we've seen thus far in the quarter, given that it includes the hurricane period, would have included the impact of the hurricane on Q4. What was your second question, Derek?

[Derek Lessard, Analyst at TD Cowen]

Yeah. I was wondering, you gave the revenue or the same-store sales impact on Q3.

[Derek Lessard, Analyst at TD Cowen]

Just wondering if you have it for EBITDA or margin.

[Tim O'Day, President and CEO at Boyd Group Services]

Yeah. It's difficult to know exactly what the impact was. We said it was less than $4 million on the revenue side. We did also incur some expenses for property damage and wages for our team members who were impacted by it. We do pay people when they have to evacuate for a hurricane. So we have both some damage operating expenses, some wage operating expenses, and lost revenue. But it wasn't material enough to separately disclose.

[Derek Lessard, Analyst at TD Cowen]

Okay. Thanks for that.

[Tim O'Day, President and CEO at Boyd Group Services]

Thanks, Derek.

[Operator]

Next question will be from Tammy Chen at BMO Capital Markets. Please go ahead.

[Tim O'Day, President and CEO at Boyd Group Services]

Morning, Tammy.

[Tammy Chen, Analyst at BMO Capital Markets]

Hi, Tim. Good morning. Thanks for the question. So I just want to revisit and confirm on the Q4 guide. I'm a little confused. You said in an earlier question that so far you've got no monthly data on Q4.

[Tammy Chen, Analyst at BMO Capital Markets]

Did I hear that right? Because I'm wondering then how you came with the expectation that right now it's similar same-store sales than Q3. So I just wanted to first clarify that.

[Tim O'Day, President and CEO at Boyd Group Services]

Yeah. We don't have any visibility over repairable claims data in the market thus far in Q4. We do have visibility over our revenue trends internally.

[Tammy Chen, Analyst at BMO Capital Markets]

Okay. Got it. Thanks for the clarification here. The other question is on the OpEx, going back to that. Yes, I can see that the dollar amount slightly came off sequentially, Q3 from Q2. I assume that is the several actions you've taken. But just the magnitude of the deleveraging was quite material here. So how should we think about that? Is there anything else to call out here? I heard startup costs as well.

[Tammy Chen, Analyst at BMO Capital Markets]

Is this the drive that you've previously talked about now that you've got these cohorts of greenfield, brownfields? They're adding to this, and we should expect this when we think about your EBITDA margin going forward.

[Jeff Murray, EVP and CFO at Boyd Group Services]

Hi, Tammy. It's Jeff Murray here. So what you can see is that we've continued to add locations, and so adding locations does add some layer of fixed costs. We've also seen same-store sales declines across the entire network, and there's a significant fixed cost base there as well. So you're right. We did take actions, which have helped and have come through to a minor degree, but not sufficient really to offset what we're seeing with the high fixed costs that the business has and the sales levels that we're currently operating at. So we need to get back to positive same-store sales to help us get there.

[Jeff Murray, EVP and CFO at Boyd Group Services]

But having said that, we also know that we do have other opportunities to look at. And so we'll be focused on that going forward.

[Tammy Chen, Analyst at BMO Capital Markets]

And the other opportunities, how are you thinking about this? Is there a target of, "We're aiming for this OPEX rate of sales that you're going for"? I think any sort of quantification you can give when you talk about these additional actions would be helpful. It's just difficult for us to gauge the magnitude of these additional opportunities that you feel are there in the OPEX line.

[Tim O'Day, President and CEO at Boyd Group Services]

Tammy, I would say our objective is to move back toward a 14% EBITDA margin. And that will take meaningful expense leverage to achieve that. During the quarter, we undertook to have a comprehensive look at our expense base and see where we have opportunities to help make progress toward that.

[Tim O'Day, President and CEO at Boyd Group Services]

We've identified a number of areas that we feel confident over time we can drive better expense leverage. And we'll be working on that really in the Q4 and throughout probably the next 12 to 18 months.

[Tammy Chen, Analyst at BMO Capital Markets]

And the last question for me here is on new stores on the M&A side. You mentioned part of the slowdown is when you do further due diligence, the operations of stores not what was represented, but largely because of the current environment, which would suggest it's temporary. So I'm curious, why not look to possibly accelerate some M&A in this macro environment? Thanks.

[Tim O'Day, President and CEO at Boyd Group Services]

Yeah. It's a great question. We consider that internally.

[Tim O'Day, President and CEO at Boyd Group Services]

Not only do we see sellers with less revenue than what they may have believed that they had, but we also know in the current market environment, it's harder for us to leverage our relationships and drive rapid incremental revenue after we close on a business because the business is being spread across. There is less business to spread across the network. So it's both. We're very capable of stepping up the M&A activity rapidly. We've still got the team in place. We've got a pipeline of opportunities. So we can restart the M&A activity at higher levels. We're not stopping the M&A activity at all, but we can restart it and move to higher levels rapidly. So I think we'd like to focus on the core, make sure that we're making progress against our expense ratios.

[Tim O'Day, President and CEO at Boyd Group Services]

It's hard for you and others to understand the impact of the new stores, but as we've communicated over several quarters now, they do have an impact. And we need to balance out our energy on driving the performance of our business overall with the growth side. But we remain very committed to growth.

[Tammy Chen, Analyst at BMO Capital Markets]

Thank you.

[Tim O'Day, President and CEO at Boyd Group Services]

Thanks, Tammy.

[Operator]

Thank you. Next question will be from Gary Ho at Desjardins Capital Markets. Please go ahead.

[Tim O'Day, President and CEO at Boyd Group Services]

Morning, Gary.

[Gary Ho, Analyst at Desjardins Capital Markets]

Morning. Thanks for taking my questions. Maybe just continuing on that theme of location adds. So it feels like it's slowing down the last couple of quarters in that 10-13 location adds per quarter. And you've talked about focusing in on the core business. Can we see a further slowdown to maybe single-digit range when you look out?

[Gary Ho, Analyst at Desjardins Capital Markets]

And can you maybe provide some comments in terms of what your other kind of larger MSOs are doing in the current environment at a similar strategy in terms of slowing down their M&A? Any commentary on that would be helpful.

[Tim O'Day, President and CEO at Boyd Group Services]

Yeah. On your second question, I think we don't have perfect visibility over what our competitors are doing. But I would say the intelligence in the industry is that growth generally has slowed down. In our case, it's a choice based on priorities and current market conditions. In other cases, there could be capital constraints related to growth as well. But on your question on whether the deterioration of the count may continue, I would not expect that. As we've talked over the last several quarters, we've been stepping up our efforts to build new sites.

[Tim O'Day, President and CEO at Boyd Group Services]

We have a number of new sites in the pipeline, many under construction, many ready to go under construction. Even without acquisitions, those would provide a fairly steady stream of growth going into the future.

[Gary Ho, Analyst at Desjardins Capital Markets]

Okay. That's helpful, and then maybe as a related question to your comments there, I know there's an OpEx ratio difference between your new locations and your existing ones. Any way you can maybe divvy up the different cohorts and kind of shed some color in terms of how the two vary, whether it's on a relative basis or absolute?

[Jeff Murray, EVP and CFO at Boyd Group Services]

Are you talking, Gary, on the call, or are you talking in the future disclosure?

[Gary Ho, Analyst at Desjardins Capital Markets]

Maybe just now, no, just on today and what you're running at in terms of your new locations, your OpEx ratio difference between your existing stores and new locations.

[Jeff Murray, EVP and CFO at Boyd Group Services]

I mean, it does have an impact. Obviously, the lower sales that you have on a new store that's building does affect that individual OpEx ratio for those locations in that cohort. But if you look at the breakdown of new locations compared to the total, it's maybe roughly back of the envelope, 10%. And so you're looking at 10% versus the 90%. And so there's still right now a significant impact in the core stores that are not achieving their sales objectives either. So I would definitely skew it to the core stores in the current environment.

[Gary Ho, Analyst at Desjardins Capital Markets]

Okay. And then maybe just final question, just going back to the OpEx questions. Any color you can provide in terms of your buckets? You mentioned staffing. You mentioned incentive comps. Could you perhaps look at curtailing your technician training program? Any examples that you can give would be great.

[Tim O'Day, President and CEO at Boyd Group Services]

I think the technician training program we've talked about prior quarters, when we were growing that rapidly, our level one technicians, which is the component of the program that's the most expensive and had the highest turnover, we had a significant investment in level one technicians. That, we have reduced the number of people in level one with an intense focus on making sure that when they enter level one, we feel good about their ability to get to level two and ultimately graduate, so we've already taken some action to reduce our cost for TDP, but we are still committed to it, and we have a number of people in level two and level three. I'd say our focus was really making sure that we more thoroughly vet entrants into level one.

[Tim O'Day, President and CEO at Boyd Group Services]

We've done that in part by moving most of the people that move into our Technician Development Program now have been employed in a different position in the company for some period of time before they move into our training program.

[Gary Ho, Analyst at Desjardins Capital Markets]

Okay. That's helpful. Thank you very much.

[Tim O'Day, President and CEO at Boyd Group Services]

Thanks, Gary.

[Operator]

Next question will be from Chris Murray at ATB Capital Markets. Please go ahead.

[Tim O'Day, President and CEO at Boyd Group Services]

Yeah. Chris. Good morning, folks.

[Chris Murray, Analyst at ATB Capital Markets]

Good morning. So, Tim, kind of maybe trying to think about this. Some of your industry competitors have talked about a lot of this. The volume is being driven a little bit by consumer behavior and insurance levels. There's also been some discussion about perhaps P&C rates might actually start reversing next year.

[Chris Murray, Analyst at ATB Capital Markets]

But you also made the comment that at least you feel for what's going on, even though we don't have exact quarterly data, is that we're closer to the bottom than not. You've been in the industry a long time. And I guess I'd like, if you could, maybe your perspective maybe broader on, is there something kind of long-term broken here, or is this just kind of a reaction to kind of high inflation, high insurance costs? Because we've seen these cycles before. So just any thoughts about kind of the viability, the longer-term strategy maybe is a way to think about it.

[Tim O'Day, President and CEO at Boyd Group Services]

Yeah. Thanks for the question, Chris. I guess when you think back to the Great Recession, we saw consumer behavior that was similar, deferring repairs, cashing out deductibles. But the level of inflation on premiums back then was pretty modest. So that really wasn't the driver.

[Tim O'Day, President and CEO at Boyd Group Services]

But I think now we have some economic uncertainty. Obviously, we have an election today. I think that's probably impacted consumer behavior. The shock of premium increases that were mid-upper teens, even into the 20-plus% range in some cases, I think has just caused a disruption that I wouldn't have anticipated, and I have not seen it before. I would expect that as people absorb that, claims will return to more normal levels. One thing that we do see in the data is that liability claims are down significantly less than collision claims. And a liability claim would be for the party that was not at fault, which suggests it helps to confirm the deferral component of the claim. That did happen during the Great Recession. So we've seen periods where that's occurred before. So I would expect that to normalize.

[Tim O'Day, President and CEO at Boyd Group Services]

I think the other piece is that if you look at a year and two years ago, consumers in the market were fairly flush with cash. There had been a lot of money poured into the economy. And now we have one where there's political uncertainty. And I think consumers are just generally a bit nervous. So I think as we go through the next few months, hopefully, that will be resolved, and we'll begin to see a return to more normal behavior. On your comment on premiums coming down, I hope that happens. I think that would be good for consumers. But I do know that in the reports that I read, that there's a record number of consumers that are shopping their insurance to look for better premiums, which if the claims volumes are lower, you would think that insurers may respond to that with lower premiums.

[Chris Murray, Analyst at ATB Capital Markets]

Okay. That's helpful. And I guess maybe following on a little bit on this, we've been going through a few quarters, I guess, where it almost feels like you're kind of protecting the core in the operating margins on the expectation that this is going to normalize. Is there a certain point where you kind of get to the recognition or that you have to be a little more aggressive in right-sizing the business?

[Tim O'Day, President and CEO at Boyd Group Services]

Well, I think we've been in a period coming out of the pandemic, we've been in a period of demand that we couldn't service. And I do think that what we're seeing now is maybe it's not normal, but it is closer to what we would have seen over many years with just moderate growth available to us and looking to take market share.

[Tim O'Day, President and CEO at Boyd Group Services]

But as we've looked at the business, I would say that we are confident that we have opportunities to leverage our EBITDA margin up, not just through revenue. And those aren't necessarily extraordinary things that we need to do. I think it's just prudent management of the business. And we are absolutely committed to that.

[Chris Murray, Analyst at ATB Capital Markets]

Okay. I'll leave it there. Thanks, folks.

[Tim O'Day, President and CEO at Boyd Group Services]

Thanks, Chris.

[Operator]

Next question will be from Kate McShane at Goldman Sachs. Please go ahead.

[Kate McShane, Analyst at Goldman Sachs]

Hi. Good morning. Thanks for taking our questions. Our first question just with the outperformance versus the industry during the quarter. Can you help us understand how much was driven by better volumes versus price?

[Tim O'Day, President and CEO at Boyd Group Services]

The price did not move much in the quarter. For the industry, I do recall the up two and a half quarters year to date through the second quarter. So price is not the driving factor.

[Tim O'Day, President and CEO at Boyd Group Services]

As we've suggested in our disclosures, we've had significant efforts underway for initiatives that are good for our gross profit margin and actually gross profit dollars, but not good for revenue, including the internalization of calibration, which we've made great progress on. It does reduce the average cost of a calibration operation. We also have increased our alternative part usage, and we outperform the industry pretty meaningfully in the use of alternative parts. We've continued to make progress on a Repair First strategy, which is focused around plastic repairs, which means we're reducing our reliance on parts and increasing our repair operations, which is also really good for our customers and reduces average cost of repair, but puts further pressure on same-store sales. So, price is not. We've gained share on units available to drive the outperformance.

[Kate McShane, Analyst at Goldman Sachs]

Okay. Thank you.

[Kate McShane, Analyst at Goldman Sachs]

And that actually dovetails nicely with our second question where you did talk about your improved glass gross margins in the quarter. Was that from the calibration, or was it driven by something else? And just given some of the changes we've seen in the competitive market, what are you seeing right now when it comes to glass?

[Tim O'Day, President and CEO at Boyd Group Services]

Yeah. The improvement of glass margin year over year is in part related to growth of calibration in that business. But it's also some more effective buying of parts by our glass retail team that's helped to drive that improvement. And in terms of what we're seeing in the auto glass business, I think similar to what the major competitor in the U.S. is seeing, the auto glass market has also contracted a bit. And so we've seen pressure on our revenue growth in auto glass as well.

[Tim O'Day, President and CEO at Boyd Group Services]

It has not been impacted to the same extent as the collision business, but it's been under pressure as well this year.

[Kate McShane, Analyst at Goldman Sachs]

Thank you.

[Tim O'Day, President and CEO at Boyd Group Services]

Thank you.

[Operator]

Next question will be from Krista Friesen at CIBC. Please go ahead.

[Tim O'Day, President and CEO at Boyd Group Services]

Good morning, Krista.

[Krista Friesen, Analyst at CIBC]

Thanks for taking my question. I was just wondering, as we think about what's going on in the industry right now and the deferral of some claims, would you anticipate that there would be a catch-up at some point in time, whether it's kind of first half or back half of 2025?

[Tim O'Day, President and CEO at Boyd Group Services]

I think when we came out of the Great Recession, there was some evidence of some catch-up of claims. So I'd say that's a possibility. But there's not great data on that.

[Tim O'Day, President and CEO at Boyd Group Services]

Now, obviously, for people that have a vehicle that's leased and that they have minor damage and chosen to repair, when it gets turned in from its lease, they'll either have to repair it or they'll pay for the cost of it anyway. So I think there is some opportunity for that.

[Krista Friesen, Analyst at CIBC]

Okay. Great. And then maybe just on the EBITDA margin, should we think of Q3 as maybe a bit of a floor? And just given the initiatives that you've enacted in the quarter, and it sounds like more initiatives that you'll enact in Q4, would you expect your margin to at least hold or be able to improve from there?

[Jeff Murray, EVP and CFO at Boyd Group Services]

I think you could assume that. I mean, we've seen pretty serious reduction in the overall market in terms of the volume of claims. We're going to be lapping sort of those weaker comps starting really in Q1.

[Jeff Murray, EVP and CFO at Boyd Group Services]

And so I think it's probably reasonable to think that we're not going to continue to see that.

[Tim O'Day, President and CEO at Boyd Group Services]

Yeah. I think one of the dynamics of the fourth quarter last year is that claim volumes, and this was before we had the data readily available to us, but claim volumes were down about 10% in Q4. But our revenue was actually pretty solid because we had a build-up of work in process from the period where demand was very, very high. So when we get to Q1, we'll be facing a period that demand was relatively low. And if we start to see a recovery in claims volume, that'll be a positive for us.

[Krista Friesen, Analyst at CIBC]

Okay. Great. Thank you. I'll jump back in the queue.

[Tim O'Day, President and CEO at Boyd Group Services]

Thanks, Krista.

[Operator]

Next question will be from Bret Jordan at Jefferies. Please go ahead.

[Bret Jordan, Managing Director and Senior Equity Research Analyst at Jefferies]

Good morning, guys.

[Tim O'Day, President and CEO at Boyd Group Services]

Hey, Bret. Hey, Bret.

[Bret Jordan, Managing Director and Senior Equity Research Analyst at Jefferies]

Could you talk about this outperformance and alternative parts? What is your mix there, and what is the margin delta between that and traditional?

[Tim O'Day, President and CEO at Boyd Group Services]

We don't disclose the specifics of it, but Boyd has always outperformed on alternative parts. We know that we even outperform major operators. So we do a really good job of identifying and using alternative parts to drive repair costs down. From a gross margin standpoint, the analysis that we've done would say that our gross profit margins would be a bit better because of the use of aftermarket parts. But the gross margin dollars are fairly comparable. So when we shift to an aftermarket part, it's a lower price, but the dollar amount of the gross profit's pretty similar.

[Bret Jordan, Managing Director and Senior Equity Research Analyst at Jefferies]

Okay. Then I guess as we think about, I think the beginning of this year, a lot of folks were pointing to weather to explain the weak first quarter, but it seems to be more than that. With a few quarters of experience since then, I guess, what do you think you're lapping in the first quarter of 2025? Consumer behavior shift versus weather, and is that likely to be an inflection, or do you think we still sort of bounce on the bottom?

[Tim O'Day, President and CEO at Boyd Group Services]

Yeah. It's tough to predict, Bret, but there's no question that weather last year was a negative factor for our business. I mean, as we talked about when we reported Q4 and Q1, particularly Q1, there was almost no weather in the northern markets. So assuming that we have a more normal winter, we would expect some pickup from that.

[Tim O'Day, President and CEO at Boyd Group Services]

But as far as consumer behavior and when that really impacted it, it's difficult to know for sure. But I would say that given that Q4 was down 10 points, there was weather and consumer behavior changes in that number. And loss rates. And total loss rates, yeah.

[Bret Jordan, Managing Director and Senior Equity Research Analyst at Jefferies]

Okay. Great. And I guess one question, sort of big picture, I think you called out total loss rates being sort of back to pre-pandemic levels. Are you seeing any impact on crash rates around ADAS? Is there anything? Obviously, if total loss rates are not the structural change, is there something else going on in vehicle technology that is somehow structurally limiting the business?

[Tim O'Day, President and CEO at Boyd Group Services]

No. In fact, I appreciate that question because our perspective is that the impact of ADAS, which net of miles and increase of miles driven, we believe will have about a one-point impact on claim volume.

[Tim O'Day, President and CEO at Boyd Group Services]

That's continued, and we don't see any change in that. The issues that we're dealing with, the lower claims volumes, the kind of abrupt change in total loss rates over a year due to the decline in used car prices, and the consumer behavior, the consumer behavior in particular, and the weather, we don't view those as long-term issues at all. So structurally, we feel really good about the industry, where we are, and our opportunity to continue to execute on the strategy that we've been successful with.

[Bret Jordan, Managing Director and Senior Equity Research Analyst at Jefferies]

Great. Thank you.

[Tim O'Day, President and CEO at Boyd Group Services]

Thanks, Bret.

[Operator]

Next question will be from Steve Hansen at Raymond James. Please go ahead.

[Steve Hansen, Analyst at Raymond James]

Yeah. Good morning, guys. Thanks for the time. Tim or Brian, do you want to comment on the activity levels across the network? How consistent is it?

[Steve Hansen, Analyst at Raymond James]

It sounds like the data, well, it appears the data across the industry is highly variable, even conflicting in some cases. Is Canada outperforming? How are the different regional markets in the U.S. performing? How should we think about that from sort of your broader network perspective?

[Tim O'Day, President and CEO at Boyd Group Services]

Yeah, so on the U.S. side, we obviously see the biggest impact from the decline in repairable claims that Tim articulated. Canada is slightly better than that, although there are similar signs of weakening in terms of the overall demand in Canada, and then our glass business remains fairly consistent with where it's been at historic levels, which is kind of at this point, it's kind of flattish, and then obviously, on the scanning and calibration side, we're experiencing tremendous growth, albeit most of that is just internalizing revenue that we had previously had been doing externally.

[Steve Hansen, Analyst at Raymond James]

Understood. Thanks.

[Steve Hansen, Analyst at Raymond James]

And if we think about the greenfield strategy, which is clearly evolving, how long does it take for you guys to get up to a rateable pace? And should we expect that to be consistent on a quarterly basis? Does it typically end up being back-end loaded? Or is the goal to ultimately have five a quarter, seven a quarter? I don't know what the number is ultimately, but can we get to a rateable consistent pace there? Is that the target?

[Tim O'Day, President and CEO at Boyd Group Services]

Yeah. That is absolutely the target. And I think given the timing by which we started, I would expect that we'd be meaningfully in that pace by this time next year.

[Steve Hansen, Analyst at Raymond James]

Okay. Great. And maybe just for a broader perspective, because I think one of the common pushbacks we all face around the greenfield, there's this ramp-up issue that's part of it.

[Steve Hansen, Analyst at Raymond James]

But I think the bigger issue or the question often comes up is you're adding capacity to an industry as opposed to taking some capacity through M&A. How do you feel about that pushback, and what would you point to as being the key benefits to building greenfield versus buying?

[Tim O'Day, President and CEO at Boyd Group Services]

Yeah. I mean, our greenfield strategy is really focused on densifying markets that we already have that we have a strong presence in. So our belief is that we can take volume out of the market and, frankly, put it into a box that fits the criteria that drives long-term success for us. It's the right-sized box. It's easily. It's a lot easier for us to attract talent to the location. It allows us to get all three lines of business in.

[Tim O'Day, President and CEO at Boyd Group Services]

So I do think that just given the fact that, again, it's really focused on the densification of a market that we have a strong presence in. I think that that gives us confidence that we can take the share from the market as opposed to just adding capacity to a market that right now feels like it's obviously capacity exceeding demand. And Brian, I would say that with our experience to date would support that. I mean, while it takes time, our greenfield locations, despite the current environment, I would say we continue to make good progress on our greenfield locations.

[Steve Hansen, Analyst at Raymond James]

Yeah. Okay. Appreciate your time, guys. Thanks.

[Tim O'Day, President and CEO at Boyd Group Services]

Thanks, Steve.

[Operator]

Next question is from Zachary Evershed at National Bank Financial. Please go ahead.

[Tim O'Day, President and CEO at Boyd Group Services]

Morning, Zach.

[Zachary Evershed, Managing Director and Equity Research Analyst at National Bank Financial]

Morning, everyone. How much of a gap still remains on labor rates, and are your insurance partners still cooperating there?

[Tim O'Day, President and CEO at Boyd Group Services]

We continue to receive labor rate increases every quarter. So I would say that there's still cooperation. The gap has narrowed from where it was, but we still have work to do to get it back to where we expect it to be.

[Zachary Evershed, Managing Director and Equity Research Analyst at National Bank Financial]

Gotcha. Thanks. And then while you guys are focused on cost control, do you think that'll have an impact on the pace of bringing scanning and calibration in-house?

[Tim O'Day, President and CEO at Boyd Group Services]

Absolutely not. No.

[Zachary Evershed, Managing Director and Equity Research Analyst at National Bank Financial]

Then the last one for me, oh, go ahead.

[Tim O'Day, President and CEO at Boyd Group Services]

The calibration business, Zach, is very accretive. I mean, it lowers costs for our customers, and it improves both gross profit percentage and gross profit dollars for our business. So we're fully committed to that.

[Zachary Evershed, Managing Director and Equity Research Analyst at National Bank Financial]

That's clear. Thanks.

[Zachary Evershed, Managing Director and Equity Research Analyst at National Bank Financial]

And then last one for me. As you're adding and expanding fleet relationships, does that revenue come in at lower gross margins?

[Tim O'Day, President and CEO at Boyd Group Services]

Not really.

[Tim O'Day, President and CEO at Boyd Group Services]

I mean, we're really focused on some fleet relationships that we're kind of resetting the customer expectation on what we're willing to do that work for and really focus on a better customer experience for them, but at maybe slightly below, but certainly not at the levels that it's been historically.

[Zachary Evershed, Managing Director and Equity Research Analyst at National Bank Financial]

Good. Okay thanks. I'll turn it over.

[Tim O'Day, President and CEO at Boyd Group Services]

Thanks, guys.

[Operator]

Next question is from Daryl Young at Scotiabank. Please go ahead.

[Daryl Young, Equity Research Analyst at Scotiabank]

Hey, good morning, everyone. Just wanted to follow up on Kate's question around price versus volume and maybe ask a little more directly. Are there signs of competitors getting more aggressive on price to take market share? Is there anything they can offer to your insurance partners that might be more aggressive that would stimulate share loss in the future? Or is it still pretty much the core KPIs on the DRPs that are driving those market share wins?

[Tim O'Day, President and CEO at Boyd Group Services]

I think it's still core KPIs. I mean, price, when you talk about negotiating a labor rate or whatever it might be, that isn't what drives great results from a total cost of repair standpoint. It's really effective use of alternative parts, repairing what can be properly repaired. The offset is that companies like Boyd would be at a higher level on scanning and calibration just because we have the tools and systems that does drive repair costs up. But what I think is important to our clients is that we make our customers happy, which we do, that we repair their cars quickly, which we do an excellent job of, and that we do it at a competitive total cost of repair, not necessarily related to the labor rate or other elements of pricing, but by the business practices that we've got.

[Tim O'Day, President and CEO at Boyd Group Services]

So that's what our clients care about, and that's really where we place our focus.

[Daryl Young, Equity Research Analyst at Scotiabank]

Got it. And then one last one, just dovetailing on that fleet question. Are there other initiatives out there that you can turn back on, such as the dealer intake center, that would accumulate greater volumes going forward, or are we pretty much back to sort of 2019 initiatives?

[Tim O'Day, President and CEO at Boyd Group Services]

I don't know. I mean, there may be some other opportunities. I mean, right now, what we're focusing really heavily on is improving the capture rates within the stores that we operate today. That's part of the reason for the over or the outperformance of the industry is we're just getting a lot more aggressive at taking what is coming to us. Dealer intake centers, when demand is soft, I'm not sure that that's going to provide a meaningful opportunity for us.

[Tim O'Day, President and CEO at Boyd Group Services]

It certainly has provided some good coverage for us in Canada, but frankly, wasn't as effective in the U.S. as it was in Canada and we continue to use it in Canada.

[Daryl Young, Equity Research Analyst at Scotiabank]

Got it. That's great. Thanks very much.

[Tim O'Day, President and CEO at Boyd Group Services]

Thank you. Thanks, Daryl..

[Operator]

And at this time, Mr. O'Day, we have no further questions. Please proceed.

[Tim O'Day, President and CEO at Boyd Group Services]

All right. Well, thank you, operator, and thanks to all of you for once again joining our call today. And we look forward to reporting our fourth quarter and year-end results in March. Have a great day.

[Operator]

Thank you, sir. Ladies and gentlemen, this does indeed conclude your conference call for today. Once again, thank you for attending. And at this time, we do ask that you please disconnect your lines.

Participants

Executives

• Tim O'Day, President and CEO
• Jeff Murray, EVP and CFO

Analysts

• Tammy Chen, Analyst at BMO Capital Markets
• Zachary Evershed, Managing Director and Equity Research Analyst at National Bank Financial
• Steve Hansen, Analyst at Raymond James
• Chris Murray, Analyst at ATB Capital Markets
• Krista Friesen, Analyst at CIBC
• Gary Ho, Analyst at Desjardins Capital Markets
• Derek Lessard, Analyst at TD Cowen
• Daryl Young, Equity Research Analyst at Scotiabank
• Kate McShane, Analyst at Goldman Sachs
• Sabahat Khan, Analyst at RBC Capital Markets
• Bret Jordan, Managing Director and Senior Equity Research Analyst at Jefferies