Boyd Group Services Inc.

Good morning, everyone. Welcome to the Boyd Group Services Inc.'s 2026 Second Quarter 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 relating 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 CDAR's database found at cdarplus.ca and EDGAR at www.sec.gov. Boyd released its 2026 second quarter results before markets opened today. You can access the news release as well as the complete financial statements and management discussion and analysis on the company's website at BoydGroup.com. The news release, financial statements, and MD&A have also been filed on Siddharth Plus and EDGAR this morning. On today's call, Boyd will discuss the financial results for the quarter ended June 30th, 2026 and provide a general business update. We will then open the call for questions. I'd like to remind everyone that this conference call is being recorded today, Wednesday, August 12th, 2026. I would now like to introduce Mr. Brian Kaner, President and Chief Executive Officer of Boyd Group Services Inc. Please go ahead, Mr. Kaner.

Thank you, operator. Good morning, everyone, and thank you for joining us on today's call. On the call with me today is Jeff Murray, our Executive Vice President and Chief Financial Officer, and Steve Savard, who recently joined our team to lead our investor relations and capital markets efforts. We look forward to Steve maturing and professionalizing this function and driving direct and meaningful engagement with our shareholders. Our second quarter results reflect deliberate execution across our business, evidenced by strong revenue growth meaningful margin expansion, and measurable progress against our strategic priorities. Revenue increased 30% year over year, exceeding $1 billion for the first time in Boyd's history, while adjusted EBITDA grew 45%. Adjusted EBITDA margin expanded to 13.4%, up from 12% in the second quarter of 2025, and 11.5% in Q2 of 24, prior to the launch of Project 360, our cost transformation program. Our top line performance reflects continued market share gains, as well as ongoing execution of our densification strategy, driving a 32% year-over-year expansion of our location footprint, anchored by the acquisition of Joe Hudson's Collision Center alongside new location development. Importantly, this top line expansion was paired with strong margin gains, The 140 basis point year-over-year increase in adjusted EBITDA margin reflects the continued execution of Project 360 alongside accelerated synergy realization from the Joe Hudson's acquisition. As a result, we are raising our 2026 synergy target to $35 million, up from our previous estimate of $20 million. During the quarter, we successfully completed the system conversion across all Joe Hudson's locations. This marks a critical integration milestone, establishing a unified operating platform that will drive greater consistency, productivity, and margin expansion across the entire business. While the conversion resulted in temporary sales disruption, we have implemented target initiatives to strengthen throughput and local execution. These actions are now gaining traction and driving revenue on a more profitable foundation. Turning to the broader operating environment, based on second quarter claims processing data, we estimate that repairable claims volumes were flat to down 2% year over year. This represents a meaningful improvement compared to the decline seen in Q2 of 2025 and points to the ongoing stabilization consistent with our long-term planning assumptions. Against this backdrop, we generated 2.9% same store sales growth in the second quarter, with limited contribution from total cost of repair. This performance confirms continued market share gains, reflecting the strength of the company's insurer relationships, continued improvement in carrier performance, and the benefits of our 2025 regional incentive realignment. In July 2026, same store sales remained positive in the low single digits, continuing to reflect the aforementioned market share gains. Monthly results can vary widely. Consequently, we track same store sales trends over broader horizons and do not view any single month's performance as indicative of full quarter's results. Our continued outperformance relative to the industry repair volumes reflects the strength of our strategy and execution. We remain focused on driving sustainable, profitable growth by improving capacity utilization, capturing local market share, and selectively expanding our footprint through disciplined acquisitions and new location development, all while driving profitability and cash flow. Given the highly fragmented nature of our industry, we see a significant runway to expand our market share both organically and through disciplined M&A while leveraging our network scale to drive further operational efficiencies. I will now pass the call over to Jeff who will provide a more detailed analysis of our second quarter results. Jeff? Thanks, Brian.

As highlighted, we delivered strong second quarter performance marked by robust top line growth, positive same store sales, and strong margin expansion. Second quarter revenue increased 30% year over year to $1 billion and $13 million. Growth was driven by $211 million in incremental contributions from 340 new locations not in operation for the full prior year period, alongside 2.9% same-store sales growth as Boyd continued to outperform the broader industry. During the quarter, Joe Hudson's locations contributed $175 million to total sales. Gross profit increased 31% year-over-year to $480 million, representing a gross margin of 47.4%, up 60 basis points compared to 46.8% in the second quarter of 2025. This margin expansion was driven by higher paint and parts margins supported by accelerated synergies and Project 360 cost savings, as well as increased scanning, calibration, and sublet margins. Turning to operating expenses, for the second quarter of 2026, operating expenses of the percentage of sales improved to 33.9% compared to 34.8% in the prior year period. This 90 basis point improvement was driven by Project 360 and Joe Hudson's synergy realization. Adjusted EBITDA grew 45% to $135.9 million, outpacing revenue growth. Adjusted EBITDA margin expanded 140 basis points to 13.4%, up from 12% in the prior period. These gains were anchored by approximately $15 million in combined Project 360 cost savings and Joe Hudson synergies realized during the quarter. Net earnings for the second quarter of 2026 were $1.3 million compared to $5.4 million in the same period of 2025. Net earnings were impacted by higher amortization and depreciation costs related to new location growth as well as higher financing costs. An adjustment was made in the quarter to revise the initial purchase price allocation, which negatively impacted amortization in the quarter in the amount of $5 million. Net earnings adjusted for this incremental intangible amortization would have resulted in net earnings of $6.4 million, up $1 million from the same period of 2025. Adjusted net earnings for the second quarter increased 47% year-over-year to $22.4 million, and adjusted EPS increased to 80 cents from 71 cents in the same period of the prior year. For full year 2026, the company continues to expect maintenance capital expenditures to range between 1.6% and 1.8% of sales. Additionally, capital expenditures associated with the Joe Hudson's acquisition remain on track at an estimated $30 million of which approximately $9.8 million has been invested through Q2 of 2026. Boyd's balance sheet remains strong providing the financial flexibility to fund our future growth initiatives. Robust earnings growth in the first half of the year combined with our capital life business model drove an improvement in pro forma net leverage to approximately 2.8 times at quarter end, down from 3.1 times at the close of fiscal 2025. I will now pass it back to Brian for closing remarks.