Over the next few weeks we will be discussing the Boyd Group Income Fund (“Boyd”), one of the world’s largest collision repair operators. As of the date I’m writing this, Boyd owns and operates 340 collision repair facilities in North America under the names Boyd Autobody & Glass in Canada and Gerber Collision & Glass in the U.S. (amongst other co-branded names such as Champ’s Collision Centers and Craftmaster Auto Body). Boyd also has a significant retail auto glass operation in the U.S. The company trades as a unit trust on the Toronto Stock Exchange and has an enterprise value of over a $1 billion (all values are in Canadian dollars unless otherwise indicated). Enterprise value is the total value of the company, including net debt (total debt – cash) and equity.
Because Boyd is publically traded, it is required to file quarterly and annual reports outlining the financial performance of the company. Every three months the company files a report that includes an income statement (also called a Statement of Profit/Loss or a profit and loss statement), a balance sheet (also called a Statement of Financial Position), and a statement of cash flows. It also includes a rather lengthy section of Notes to Consolidated Financial Statements where management discusses the results along with numerous footnotes further explaining the results from operations. You can access Boyd’s recent financial reports on their investor relations website.
This week we are going to review the first of the three key three financial statements from the 2014 annual report and compare the results to some industry averages. Next week we will look at the cash flow statement followed by the balance sheet. We also will calculate some operating and financial metrics used by Wall Street analysts to measure the health of a company. We will compare those to similar industry KPI’s that you may be more familiar with and perhaps give you a few new metrics in which to evaluate your company. After that we will look at what is perhaps my favorite section, acquisition history, and with a little bit of math, divine some general observations about price and terms in collision repair transactions. But before we can talk about acquisitions, we have to cover some basics in the income statement.
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