Boyd Group Services Inc.

Good morning, everyone. Welcome to the Boyd Group Services, Inc. First Quarter 2025 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. The risk factors that may affect results are detailed in Boyd's annual information form and other periodic filings and registration statements, and you can access these documents at CEDAR's database found at cedarplus.ca. I'd like to remind everyone that this conference call is being recorded today, Wednesday, May 14, 2025. I would now like to introduce Mr. Tim O'Day, President and Chief Executive Officer of Boyd Group Services, Inc. Please go ahead, Mr. O'Day.

Thank you, Operator, and good morning, everyone, and 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 2025 first quarter results before markets opened today. You can access our news release, as well as our complete financial statements and management discussion and analysis on our website at boydgroup.com. Our news release, financial statements, and MD&A have also been filed on CDAR Plus this morning. On today's call, we'll discuss the financial results for the three-month period end of March 31st and provide a general business update. We'll then open the call for questions. Boyd continued to deliver market share gains during the first quarter of 2025, posting same-store sales declines of only 2.8%, in a market where declines in repairable claims were estimated by industry sources to be down in the range of 9% to 10%. Gross profit showed an increase of 6.7 million, demonstrating significant improvement at 46.2%, an increase of 140 basis points over the same period of the prior year, bolstered by internalization of scanning and calibration services as well as improvements in performance-based pricing. While we continue to face some market headwinds, we are pleased with our ability to continue to outperform the market, as well as the improvement in our gross margins, and importantly, early signs of success from Project 360. I would now like to turn the call over to Jeff Murray to discuss our first quarter financial results.

Thanks, Tim. For the first quarter of 2025, sales were $778.3 million, a 1% increase when compared to the same period of 2024. This reflects a $20.4 million of incremental sales from 58 new locations that were not in operation for the full comparative period. Our same store sales, excluding foreign exchange, decreased by 2.8% in the first quarter, recognizing one less selling production day when compared to the same period of 2024. Gross margin was 46.2% in the first quarter of 2025 compared to 44.8% achieved in the same period of 2024. Gross margin percentage increased due to several factors, including the benefits of internalization of scanning and calibration, improvements to performance-based pricing, and improved glass margins. Operating expenses for the first quarter of 2025 were $278.7 million, or 35.8% of sales. compared to $270.9 million, or 34.4% of sales in the same period of 2024. Operating expenses as a percentage of sales was negatively impacted by the decline in same-store sales, and new locations which contributed positively to sales but had a higher operating ratio of 38.4%. In addition, while the internalization of scanning and calibration contributes positively to gross profit and adjusted EBITDA, It does not contribute incremental sales and therefore increases operating expenses as a percentage of sales. Lastly, operating expenses were also impacted by additional fixed costs, in particular in the area of occupancy costs from new locations. As Tim mentioned in his opening remarks, we have begun to see some early signs of success with Project 360. During the quarter, a new indirect staffing model was piloted and a temporary hiring freeze was placed on non-production roles. in preparation for the full rollout of the model in the second quarter of 2025. Adjusted EBITDA, or EBITDA adjusted for fair value adjustments to financial instruments and costs related to acquisitions and transformation cost initiatives, was $80.5 million, a decrease of 1.4% over the same period of 2024. The $1.2 million decrease was primarily the result of a decline in same-store sales and lower contributions from new locations. Market dynamics, including continued declines in claims volumes and overall economic uncertainty, continue to impact demand for services. However, Boyd continues to outperform the industry, consistently demonstrating market share gains and is positioning itself well for when conditions improve. Net loss for the first quarter of 2025 was $2.6 million compared to net earnings of $8.4 million in the same period of 2024. Excluding fair value adjustments and acquisition and transformation costs, Adjusted net earnings for the first quarter of 2025 was $2.2 million or $0.10 per share compared to $9.4 million or $0.44 per share in the same period of the prior year. Adjusted net earnings for the period was negatively impacted by the decrease in adjusted EBITDA as well as increased depreciation and finance costs. At the end of the period, we had total debt of cash of $1.3 billion. Debt net of cash increased when compared to the prior quarter, primarily a result of of acquisition activity and other investments in the business. I would now like to turn the call over to Brian Kamen to provide a general business update and discuss our long-term growth strategy.