Volume 15, Issue 6- November/December 2013

AGR Reports
breaking news

Company News
Glass America Bolsters Business, Says Boyd Group CEO

TThe recent acquisition of Glass America helped bolster quarterly sales for Winnipeg, Manitoba-based Boyd Group Income Fund.

The group, which also owns Boyd Autobody and Glass, Gerber Collision and Glass and Gerber National Glass Services, reports that sales grew 33 percent to $136.9 million, compared to $102.9 million at the same period last year.

During the company’s quarterly conference call, Brock Bulbuck, president and CEO, says the “integration and performance” of Glass America is going “as planned.” He adds that Glass America contributed “meaningfully” to second quarter results.

“The additional of six single locations and the acquisition of Glass America demonstrate our continued commitment to accretive growth,” says Bulbuck. “Our sales and adjusted EBITDA for the second quarter increased by 33 percent and 35 percent, respectively, compared to the same period last year. This reflects not only the contributions of new locations, but also an 8-percent growth in same-store sales.”

Sales in the U.S. came in at $117.2 million, up $31.5 million or 36.7 percent, compared to the same time frame of 2012.

Bulbuck attributed the U.S. growth largely to acquisitions, such as the addition of majority interest in Glass America, as well as a $5.9-million increase in same-store sales.

Bulbuck also noted on the company’s conference call that a recent hail storm in Georgia also impacted sales positively, though he did not offer specifics.

The company reports sales in Canada were $19.6 million, up $2.4 million or 14.2 percent year-over-year.

“This increase is the result of a $2.1 million, or 12.5-percent increase in same-store sales, plus an additional $0.3 million generated by one month of operations from a new [Ontario] location,” officials write in a company statement of the Canadian locations.

For the six-month period, total company sales grew by 27.2 percent to $267.5 million, compared with sales of $210.3 million for the same period of 2012.

“The $57.2-million increase was due largely to sales generated from 24 new single locations and multi-location acquisitions, including the first month of operations for the newly acquired Glass America business, which combined contributed $47.7 million,” officials write in the company statement.

“Same-store sales increased by 4.7 percent, adding another $9.6 million of incremental sales,” they add.

In the U.S., sales were $228.5 million, up $54.9 million or 6.2 percent over the same six-month period in 2012

“Increased sales resulted primarily from $36.1 million of new sales from multi-location acquisitions, including Glass America, $11.2 million of new sales from 23 new single locations and $7.7 million from 4.5 percent same-store sales growth,” officials say.

Sales were also up $1.8 million thanks to the strengthening U.S. dollar but offset by $1.9 million in lost sales due to the closure of three underperforming facilities in 2012, according to officials.

For Canada, sales came in at $39.0 million, up $2.3 million or 6.2 percent year-over-year. Management said the six-month sales increase was driven by same-store sales growth of $2.0 million or 5.4 percent, with the addition of $0.3 million, which represents one month of sales from the new Ontario location.

“The addition of ten new single-store locations in the first half of this year, including an entry into a new market with our Ontario location and the acquisition of Glass America, demonstrate our continuing commitment to grow through accretive acquisitions,” says Bulbuck.

“We will also continue this momentum and maintain our annual target of 6 percent to 10 percent growth through single-location additions in existing and adjacent markets,” he adds.

Groups Agree on One Certification Program
The Auto Glass Safety Council, the Independent Glass Association and the National Windshield Repair Association have signed an agreement consolidating the industry’s technician certification program into one each for repair and one for replacement.

Effective October 1, the Independent Glass Association’s auto glass replacement technician certification program has been absorbed into the Auto Glass Safety Council’s program. Its repair certification program has become part of the National Windshield Repair Association Repair Technician’s program. IGA members are grandfathered into the program and receive discounted rates at renewal time.

“It made sense to have one robust certification program for the industry and to have AGSC administer it for replacement,” said Matt Bailey, IGA president. “NWRA will do the same for repair. It’s one more way in which the industry’s main groups are cooperating with each other and recognizing individuals who do work properly.”

We are pleased that IGA’s certified technicians will now become AGSC-certified as well,” said AGSC education co-chair Jeff Olive. “It is important that the industry have one repository for certification testing and records.”

“We are delighted as well,” said Dave Casey, chair of NWRA’s education committee. “AGSC and NWRA have had reciprocal certification agreements in place for quite a while. It will benefit the industry to include IGA as well.”

The program changes took effect October 1. Bailey said IGA members will receive a fact sheet about the changes as their certification comes up for renewal.

Financial News
D’Ieteren Credits Cold Weather for Belron Growth
Belron’s parent company D`Ieteren reported that Belron’s worldwide sales grew by 5.8 percent to $1,950.06 million USD (1,472.3 million Euros) largely due to the positive impact of colder winter weather.

’Ieteren points out that Belron’s growth included an upswing of 5.4 percent organic and 2.7 percent from acquisitions, offset by a negative currency impact of 1.2 percent and 1.1 percent from fewer trading days.

Belron’s repair and replacement jobs increased by 3.1 percent to 5.6 million jobs, according to D’Ieteren.

European sales were up by 9.9 percent, including an increase in organic sales of 8.7 percent and acquisition growth 3.2 percent. The company reports Belron acquired ADR in the United Kingdom in the second half of 2012 and Doctor Glass in Italy during the first half of 2013, which bolstered results. The European segment of Belron saw a negative currency impact of 0.9 percent and a negative impact of 1.1 percent due to fewer trading days.

“Outside of Europe, sales increased by 1.4 percent, comprising an organic sales increase of 1.9 percent—despite tougher market conditions in Canada and Australia—a positive 2.2-percent impact due to acquisitions in the U.S. and Canada, partially offset by a negative currently impact of 1.7 percent due to the weaker Brazilian Real and an adverse trading days impact of 1 percent,” officials write in the statement.

“Sales for the period benefited from the colder winter weather compared with 2012, together with additional marketing campaigns in several countries, although this was partially offset by organic market declines,” officials added.

Specific numbers were not provided for Belron’s U.S. operations. Belron’s operating result was $128.9 million USD (97.3 million in Euros), compared to $123.2 million USD (93.0 million in Euros) in the previous year.

“The outlook for the remainder of the year remains challenging with continuing pressure expected from the economic conditions and the reduced benefit of the winter weather,” officials write in the statement.

The company also noted that Belron’s net financial debt for vehicle glass decreased to $957.5 million USD (717.9 million in Euros) in June 2013 from $1,062.3 million USD (796.5 million in Euros) in June 2012.

Though sales in the auto glass repair and replacement business are up for Belron, D’Ieteren reported a decrease in its auto distribution business of 7.2 percent year-over-year, attributing the decrease largely to a reduction in dealer inventories.

Overall, D’Ieteren officials predict annual results to be down 10 to 15 percent. “Given the current outlook of its activities as well as the uncertain economic environment, D’Ieteren still expects its 2013 current consolidated result before tax, group’s share, to decline by 10 to 15 percent compared with 2012,” officials write in the statement.


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