Boyd Group focuses on scanning, calibrations and acquisitions
Boyd Group slightly increased revenue in its second quarter with $780.4 million recorded, yet saw a 2.1% decrease in same-store sales.
Net earnings were down $10.8 million to $5.4 million compared to Q2 last year. Adjusted net earnings were $10.8 million, compared to $11.9 million in Q2 2024.
CEO Brian Kaner said the company continued to gain market share despite industry headwinds and expanded its gross margins by 120 basis points through continued internalization of scanning and calibrations during an earnings call last week.
The company increased adjusted EBITDA margins by 12%, the highest quarterly adjusted EBITDA margin performance since 2023, he said. He said the company also closed on its first MSO acquisition since 2021, surpassing the company’s 1,000-location milestone. Kaner doesn’t note which MSO was purchased in the call.
Kaner also announced it has completed the acquisition of L&M Body Shop in Virginia, which includes eight shops, at the start of the third quarter.
“On the acquisition side, we do still believe that, again, our objective is to get to 1,400-plus locations in our five-year plan,” Kaner said. “That’s what enables us to get to the $5 billion of revenue in the next five years and what allows us to essentially double our EBITDA.”
He said the company is on track to open an average of eight to 10 new startup locations per quarter.
“While the industry volumes continue to be challenged in the second quarter, over the past six months, we’ve seen an improvement in several factors that contributed to the industry decline, namely a return to positive growth in used car pricing and moderating growth rates in insurance premiums,” Kaner said.
Jeff Murray, executive vice president and chief financial officer, said industry volumes for claims were down 6-8%.
Murray elaborated that gross margin percentages increased due to the internalization of scanning and calibration, improvements to performance-based pricing, and an increase in parts margins. He said the company has enhanced parts procurement to drive cost efficiencies.
“To date, the company has not experienced any material impact as a result of tariffs,” Murray said.
He said the company did experience incremental costs associated with internalization of scanning and calibration, and higher information technology expenses related to additional licensing and security costs.
During Boyd’s Q1 earnings call in May, Murray said a new indirect staffing model had been piloted and a temporary hiring freeze placed on non-production roles. He said Boyd is working on changing its store staffing model, including right-sizing indirect staff numbers, to match the volume of work under the project.
IMAGE
Featured image: A Gerber Collision shop in Manistee, Michigan. (Repairer Driven News file photo)