Boyd Group Services Q1 Earnings Call Highlights

Boyd Group Services TSE: BYD reported record first-quarter revenue and adjusted EBITDA, helped by the January acquisition of Joe Hudson’s Collision Center, ongoing cost-savings initiatives and a return to positive same-store sales growth.

President and Chief Executive Officer Brian Kaner said the company “delivered all-time record first quarter results,” citing record revenue and adjusted EBITDA, a 33% increase in the company’s location footprint, the third consecutive quarter of positive same-store sales growth and a 200-basis-point expansion in adjusted EBITDA margin.

For the quarter ended March 31, 2026, Boyd generated revenue of CAD 996.7 million, up 28.1% from the prior-year period. Adjusted EBITDA rose 51.9% to CAD 122.4 million, while adjusted EBITDA margin improved to 12.3% from 10.3% a year earlier.

Joe Hudson’s Acquisition Drives Footprint Growth

Boyd closed its acquisition of Joe Hudson’s on Jan. 9, a transaction Kaner described as “the largest MSO transaction in the company’s history.” The acquisition added 258 locations and contributed CAD 168 million in first-quarter sales.

At quarter-end, Boyd operated 1,312 locations, up 33% from a year earlier. The company also added three single-shop acquisitions and opened eight startup locations during the quarter. Kaner said Boyd expects to open five additional startup locations in the second quarter and has 17 more under development for the remainder of 2026.

Kaner said the integration of Joe Hudson’s was completed after quarter-end, including the conversion of all Joe Hudson’s locations to Boyd’s systems. He said the acquired stores experienced some sales disruption from storms in the first quarter and from the conversion process through the end of April, but added that the conversions are now complete and sales are expected to return to normal projections shortly.

Boyd continues to expect approximately CAD 40 million in synergies from the Joe Hudson’s acquisition, with about half realized in 2026 and the remainder by 2028.

Same-Store Sales Improve Despite Weather Impact

Same-store sales increased 1.7% in the first quarter, excluding foreign exchange. Management estimated that same-store sales would have increased approximately 2.6% without the negative impact of winter storm activity in the U.S. South.

Kaner said repairable claims volumes declined by an estimated 0% to 2% in the quarter, which he said is back in line with the company’s long-term growth framework. That framework assumes average same-store sales growth of 3% to 5%, supported by market share gains, insurance client performance and operational execution.

The company said April same-store sales approached the low end of its long-term range. Kaner said Boyd’s same-store sales performance has benefited from continued market share gains and an improvement in repairable claims volumes through 2025 and into the first quarter of 2026.

In response to analyst questions, Kaner said Boyd’s initiatives to support sales growth include a focus on client performance, including linking general manager compensation to performance with top insurance clients. He said strong client performance “drives an outsized volume” and helps Boyd gain market share.

Cost Savings Lift Margins

Boyd said it realized an incremental CAD 20 million in savings during the quarter from Project 360 and Joe Hudson’s synergies, bringing total savings achieved to date to more than CAD 60 million. The company expects another CAD 30 million in savings in 2026 and CAD 50 million more between 2027 and 2029, for total anticipated savings of CAD 140 million.

Chief Financial Officer Jeff Murray said gross profit increased 29.1% year over year to CAD 463.7 million. Gross margin was 46.5%, compared with 46.2% a year earlier. Murray said gross margin benefited from increased parts and paint margins from Project 360 and Joe Hudson’s synergy realization, partly offset by a lower mix of glass sales, variability in performance-based pricing and lower gross margins inherent in the Joe Hudson’s business.

Operating expenses were 34.2% of sales, down from 35.8% in the prior-year period. Murray attributed the improvement to Project 360, the inclusion of Joe Hudson’s, which had a lower operating expense ratio, and the impact of same-store sales growth.

Boyd reported a net loss of CAD 7.9 million, compared with a net loss of CAD 2.6 million a year earlier. Murray said the loss was negatively affected by acquisition and transformational cost initiatives, which are expected to decline as integration work finalizes. Adjusted net earnings were CAD 16.1 million, or CAD 0.58 per share, compared with CAD 6.6 million, or CAD 0.31 per share, in the prior-year quarter.

Debt Rises After Acquisition, Leverage Expected to Decline

At the end of the quarter, Boyd had total debt net of cash of CAD 2.0 billion, compared with CAD 488 million at the end of the fourth quarter of 2025 and CAD 1.3 billion at the end of the first quarter of 2025. Excluding lease liabilities, net debt was CAD 946 million, compared with net cash of CAD 290.1 million at the end of 2025.

Murray said the increase reflected the closing of the Joe Hudson’s acquisition, which had a total transaction value of approximately CAD 1.3 billion. He said Boyd maintained strong liquidity and had “ample room” under its credit facility.

Pro forma debt leverage declined to approximately 2.9 times at quarter-end from 3.1 times at the end of the fourth quarter. Boyd continues to expect leverage to reach 2.6 times as early as the end of 2026.

Management Discusses Claims, Repair Costs and M&A

During the question-and-answer portion of the call, analysts focused on claims activity, total cost of repair, acquisition opportunities and margins. Kaner said the company continues to see a strong opportunity for tuck-in acquisitions in a fragmented industry with more than 30,000 locations. He said Boyd’s growth strategy includes single-shop acquisitions, smaller multi-shop operators and new greenfield and brownfield locations.

Kaner also said total cost of repair has been muted by elevated total losses and the age of the vehicle fleet, which can lead to more aftermarket parts usage and more repair-versus-replace decisions. He said Boyd expects repair costs to return to its long-term framework as used car prices rise, vehicle complexity increases and parts and labor inflation continue.

On calibration services, Kaner said Boyd has reached its 80% internalization goal but will continue hiring technicians where needed. Murray added that the calibration market continues to expand, which should provide further gross margin benefits.

Looking ahead, Kaner said Boyd remains focused on customer and insurance client experience, Project 360, Joe Hudson’s integration and acquisition-led growth. He said the company is “well-positioned to execute on our strategy and continue to grow in the highly fragmented North American collision industry.”

About Boyd Group Services TSE: BYD

Boyd Group Services Inc 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 .

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