Boyd Group Services inc. (BYD) 2024年年度報告「TSX」.pdf

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1、BOYD GROUP SERVICES INC.2024 Annual ReportBOYD GROUP SERVICES INC.2024 Annual Report_Table of ContentsReport to Shareholders.3Message from the Independent Board Chair.5Managements Discussion&Analysis.7-44Certification of Annual Filings.45-48Consolidated Financial Statements Managements Responsibilit

2、y for Financial Reporting.50 Independent Auditors Report.51Consolidated Statements of Financial Position.55 Consolidated Statements of Changes in Equity.56 Consolidated Statements of Earnings.57 Consolidated Statements of Comprehensive Earnings.57 Consolidated Statements of Cash Flows.58 Notes to Co

3、nsolidated Financial Statements.59-91Board of Directors.92-94Corporate Directory.95Shareholder Information.96 _To our Shareholders,Throughout 2024,Boyd consistently posted market share gains in a challenging environment characterized by low claims volumes,driven by significant insurance premium infl

4、ation and overall economic uncertainty,as well as mild winter weather,with 2024 being the warmest winter in over 129 years.In spite of these factors,in which industry sources reported a year-over-year decrease in repairable claims of 9.0%for all losses and 7.9%excluding comprehensive claims,Boyd pos

5、ted year-over-year same-store sales declines of only 1.8%,demonstrating Boyds ability to gain market share in this very challenging environment.Total sales for 2024 totaled$3.1 billion,representing a 4.2%increase when compared to the$2.9 billion achieved in 2023.Same-store sales1 decreased 1.8%offse

6、t by contributions from 155 new locations that had not been in operation for the full comparative period,which added$187.2 million of incremental sales.Same-store sales levels were significantly impacted by low claims volumes throughout the year.The internalization of scanning and calibration servic

7、es,progress in Boyds repair first strategy and focus on the use of cost effective alternative parts,continued to deliver strong value by lowering repair costs for the Companys customers,that,despite being beneficial to gross margin,reduced sales relative to the prior year.In 2024,40%of Boyds scannin

8、g and calibration services were completed utilizing internal resources,with a near term ambition to grow this to 80%.In order to support this growth,the workforce providing scanning and calibration services grew by over 100%from January 1,2024 to December 31,2024.Adjusted EBITDA1 for 2024 was$334.8

9、million,or 10.9%of sales,compared with$368.2 million,or 12.5%of sales in 2023.The decrease in Adjusted EBITDA was primarily the result of declines in repairable claims volumes for services,which resulted in same-store sales declines and a high ratio of operating expenses as a percentage of sales.Alt

10、hough operating expenses as a percentage of sales was positively impacted by reductions in staffing made to better align with current levels of demand,as well as reduced incentive compensation and recruiting costs,these impacts were more than offset by fixed costs on existing and new locations.Boyd

11、posted net earnings of$24.5 million in 2024,or 0.8%of sales,compared to$86.7 million,or 2.9%of sales in 2023 and earnings per share of$1.14 per share for the year ended December 31,2024 compared to$4.04 for the same period of 2023.Impacting net earnings were fair value adjustments to financial instr

12、uments,as well as acquisition and transformational cost initiatives(net of tax).After adjusting for these items,Adjusted net earnings1 for 2024 was$30.9 million or 1.0%of sales.This compares to Adjusted net earnings of$89.7 million or 3.0%of sales in 2023.Adjusted net earnings for the year ended Dec

13、ember 31,2024 was$1.44 per share,compared to$4.18 per share in 2023.Net earnings and Adjusted net earnings for the year were negatively impacted by the decrease in Adjusted EBITDA,as well as increased depreciation expense and increased finance costs.Depreciation and finance costs increased as a resu

14、lt of investments in growth and the investment in network technology upgrades during a period of lower sales and Adjusted EBITDA.These investments align with Boyds ESG sustainability roadmap to responsibly address data privacy and cyber security.BOYD GROUP SERVICES INC.REPORT TO SHAREHOLDERS31 Adjus

15、tedEBITDA(earningsbeforeinterest,incometaxes,depreciationandamortization,adjustedforthefairvalueadjustmentsrelatedtocontingentconsideration,aswellasacquisitionandtransformationalcostinitiatives),adjustednetearnings,adjustednetearningspershareandsame-storesalesarenon-GAAPfinancialmeasuresandratiosand

16、arenotrecognizedmeasuresunderInternationalFinancialReportingStandards(“IFRS”).Managementbelievesthatinadditiontonetearningsandcashflows,thesupplementalmeasuresofadjustednetearningsandAdjustedEBITDAareusefulastheyprovideinvestorswithanindicationofearningsfromoperationsandcashavailablefordistribution,

17、bothbeforeandafterdebtmanagement,productivecapacitymaintenanceandnon-recurringandotheradjustments.Managementbelievesthat,inadditiontosales,thesupplementalmeasureofsame-storesalesisusefulasitprovidesinvestorswithanindicationoftheincreaseinsaleswithoutaccountingforlocationgrowthandtheimpactoffluctuati

18、onsinexchangeratesduringtheperiod.Investorsshouldbecautioned,however,thatAdjustedEBITDA,adjustednetearningsandadjustednetearningspershareshouldnotbeconstruedasanalternativetonetearningsdeterminedinaccordancewithIFRSasanindicatorofBoydsperformance.Investorsshouldalsobecautionedthatsame-storesalesshou

19、ldnotbeconstruedasanalternativetosalesinaccordancewithIFRSasanindicatorofBoydsperformance.Boydsmethodofcalculatingthesemeasuresmaydifferfromotherpublicissuersand,accordingly,maynotbecomparabletosimilarmeasuresusedbyotherissuers.Foradetailed explanation of how Boyds non-GAAP financial measures are ca

20、lculated,please refer to the section titled“Non-GAAP FinancialMeasuresandRatios”inBoydsMD&Afiling(datedMarch19,2025)fortheperiodendedDecember31,2024,startingonpage6ofthisAnnualReport.AcopyofBoydsMD&AfortheperiodendedDecember31,2024canbeaccessedviatheSEDARWebsite().With respect to the balance sheet,a

21、t December 31,2024,BGSI held total debt,net of cash,of$1,231.6 million,compared to$1,114.5 million at December 31,2023.Total debt,net of cash,includes lease liabilities of$744.3 million at December 31,2024,compared to$715.3 million at December 31,2023.Debt,net of cash,before lease liabilities increa

22、sed when compared to the prior year primarily as a result of location growth.The Companys strategy has been to not hold real estate except where it is necessary for growth opportunities.Certain start-up locations necessitate short term holding of real estate until the build is complete and operation

23、s have begun.During the year 2024,the Company completed sale leaseback transactions for proceeds of$64.9 million.The sale leaseback transactions allowed the Company to replenish capital that can be redeployed to further grow the business.Based on Boyds continued growth,the strength of and confidence

24、 in the business,Boyd announced a Canadian dollar dividend increase of 2.0%to 61.2 cents per share annualized,up from 60.0 cents per share.While the Company has been successfully executing on our long-term growth goals,2024 brought with it some challenging economic and industry conditions.The Compan

25、y has focused on increasing value to customers and shareholders,and has consistently performed above industry,with a focus on emerging from these conditions in a strong position.In spite of the initiatives in place,current market conditions may cause a slight delay in Boyd achieving its long-term gr

26、owth goal of doubling the size of the business on a constant currency basis from 2021 to 2025 against 2019 sales.Boyd is pleased to have announced a new five-year goal,which includes growing revenue to$5 billion in 2029,doubling Adjusted EBITDA dollars from 2024-2029,returning to an Adjusted EBITDA

27、margin of 14%,expanding market share and retaining a leadership position in all markets served,and achieving top-tier profitability in the North American collision industry(“Double Down”).Boyd is accelerating its focus on operational excellence and profitability with“Project 360”,a company-wide tran

28、sformational cost initiative launched in partnership with a leading global consulting firm during the fourth quarter of 2024 that will support the Double Down goal.Project 360 is projected to result in$100 million in annual recurring cost savings over the plan period with upfront investment and tran

29、sition costs incurred to achieve these benefits estimated to be in the$20-$23 million range over the coming quarters.On behalf of myself,the executive team and our Board of Directors,I would like to thank all of our Boyd Group employees for their hard work and dedication.And on behalf of the Directo

30、rs of Boyd Group Services Inc.and Boyd Group employees,thank you for your continued support.Sincerely,(signed)Timothy ODayChief Executive Officer 4_To our Shareholders,Following Boyds delivery of record sales and improved profitability in 2023,benefiting from collision repair demand outstripping cap

31、acity,the collision repair industry experienced an abrupt“about face”.Year-over-year repairable claims fell 9.0%driven,we believe,by significant insurance premium inflation,overall economic uncertainty and the warmest winter in the last 129 years.Although the associated fall in demand inevitably bro

32、ught with it lower sales and profitability,Boyd delivered significant market share gains year-over-year same store sales declined only 1.8%against a 9.0%decline in repairable claims.A strong testament to the resiliency and strength of the Boyd team and business model.We remain highly confident in th

33、e Industry outlook,Boyds position therein and our ability to continue to grow our market share and profitability through a combination of location and organic growth.Roughly 45%of the$50 billion North American collision repair market is represented by very small players our thesis is firmly intact.C

34、onsistent with that confidence,Boyd recently announced its new five year targets and the road map to achieve those targets grow revenue to$5.0 billion and double Adjusted EBITDA1 by 2029,and return our Adjusted EBITDA margin to 14%over the next five years.We recently announced that Tim ODay will ret

35、ire as CEO effective May 14th of this year.Over the last twenty plus years,the last five of which as CEO,Tim has been an integral and imperative part of Boyds amazing growth and success.On behalf of the Board and the entire Boyd team,I would like to thank Tim for his excellent and unwavering leaders

36、hip.It has been an absolute pleasure working with Tim and he will be truly missed.We are very pleased and excited that Brian Kaner,our current President and COO,will succeed Tim as CEO.Since joining Boyd in 2022,Brian has helped and enabled the Boyd team to navigate ever-changing economic and indust

37、ry conditions,brought a laser focus on increasing value to our customers,shareholders and other stakeholders and has been instrumental in developing Boyds near,mid and longer term strategy.We have no doubt that Brian is the right person for the future.It is with profound sadness that I communicate t

38、hat our long-serving Board Member,Robert Gross,unexpectedly and suddenly passed away on November 18,2024.Mr.Gross was a dedicated and valued member of our Board,having served on the Board since 2012,and having held positions on the Governance&Sustainability Committee as well as the People,Culture an

39、d Compensation Committee.He was deeply committed to the success and growth of Boyd and was widely respected for the guidance and insights he provided.He was an incredible leader and friend,and his presence on our Board is deeply missed.BOYD GROUP SERVICES INC.MESSAGE FROM THE INDEPENDENT BOARD CHAIR

40、51AdjustedEBITDA(earningsbeforeinterest,incometaxes,depreciationandamortization,adjustedforthefairvalueadjustmentsrelatedtocontingentconsideration,aswellasacquisitionandtransformationalcostinitiatives),adjustednetearnings,adjustednetearningspershareandsame-storesalesarenon-GAAPfinancialmeasuresandra

41、tiosandarenotrecognizedmeasuresunderInternationalFinancialReportingStandards(“IFRS”).Managementbelievesthatinadditiontonetearningsandcashflows,thesupplementalmeasuresofadjustednetearningsandAdjustedEBITDAareusefulastheyprovideinvestorswithanindicationofearningsfromoperationsandcashavailablefordistri

42、bution,bothbeforeandafterdebtmanagement,productivecapacitymaintenanceandnon-recurringandotheradjustments.Managementbelievesthat,inadditiontosales,thesupplementalmeasureofsame-storesalesisusefulasitprovidesinvestorswithanindicationoftheincreaseinsaleswithoutaccountingforlocationgrowthandtheimpactoffl

43、uctuationsinexchangeratesduringtheperiod.Investorsshouldbecautioned,however,thatAdjustedEBITDA,adjustednetearningsandadjustednetearningspershareshouldnotbeconstruedasanalternativetonetearningsdeterminedinaccordancewithIFRSasanindicatorofBoydsperformance.Investorsshouldalsobecautionedthatsame-storesa

44、lesshouldnotbeconstruedasanalternativetosalesinaccordancewithIFRSasanindicatorofBoydsperformance.Boydsmethodofcalculatingthesemeasuresmaydifferfromotherpublicissuersand,accordingly,maynotbecomparabletosimilarmeasuresusedbyotherissuers.ForadetailedexplanationofhowBoydsnon-GAAPfinancialmeasuresarecalc

45、ulated,pleaserefertothesectiontitled“Non-GAAPFinancialMeasuresandRatios”inBoydsMD&Afiling(datedMarch19,2025)fortheperiodendedDecember31,2024,startingonpage6ofthisAnnualReport.AcopyofBoydsMD&AfortheperiodendedDecember31,2024canbeaccessedviatheSEDARWebsite().On behalf of the Board,I would like to than

46、k the management team and all employees for their continued commitment and hard work,and our shareholders for their continued support.Sincerely,(signed)David G.Brown Independent Chair6Managements Discussion&AnalysisOVERVIEWBoyd Group Services Inc.(“BGSI”),through its operating company,The Boyd Group

47、 Inc.and its subsidiaries(“Boyd”or the“Company”),is one of the largest operators of non-franchised collision repair centers in North America in terms of number of locations and sales.The Company currently operates locations in Canada under the trade name Boyd Autobody&Glass and Assured Automotive,as

48、 well as in the U.S.under the trade name Gerber Collision&Glass.The Company is also a major retail auto glass operator in the U.S.,under the trade names Gerber Collision&Glass,Glass America,Auto Glass Service,Auto Glass Authority and A.In addition,the Company operates a third party administrator,Ger

49、ber National Claims Services(“GNCS”),that offers glass,emergency roadside and first notice of loss services.The Company also operates a Mobile Auto Solutions(“MAS”)service that offers scanning and calibration services.The following is a geographic breakdown of locations by trade name and location as

50、 at March 18,2025.984 locations46 locations856 locationsAlberta16Florida(+4)*80Missouri(+4)*17British Columbia13Michigan(+1)*77Alabama(+5)*15Manitoba13Illinois66Tennessee(+3)*15Saskatchewan4California(+4)*52Maryland(+1)*14Texas(+8)*42Minnesota(+3)*1482 locationsGeorgia(+4)*42Pennsylvania(+3)*14New Y

51、ork41Kansas11Washington(+1)*39Oregon11Ontario82Wisconsin(+1)*38Nevada8North Carolina(+1)*37Hawaii(+1)*6Indiana(+1)*35Iowa(+2)*6Ohio34Kentucky6Oklahoma(+1)*28Utah(+1)*6Louisiana(+4)*27Arkansas3Arizona(+1)*26Nebraska(+3)*3Colorado22Idaho1South Carolina19Virginia(+1)*1The above numbers include 33 intak

52、e locations,net of one closed locationThe above numbers include one intake location and two fleet locations co-located with collision repair centers,net of four closed location*Locations added in 2024 and up to March 18,2025Boyd provides collision repair services to insurance companies and individua

53、l vehicle owners,with a high percentage of the Companys revenue being derived from insurance-paid collision repair services.BGSIs shares trade on the Toronto Stock Exchange under the symbol TSX:BYD.TO.The following review of BGSIs operating and financial results for the year ended December 31,2024,i

54、ncluding material transactions and events of BGSI up to and including March 18,2025,as well as managements expectations for the year ahead,should be read in conjunction with the annual audited consolidated financial statements of BGSI for the year ended December 31,2024,included on pages 49 to 91 of

55、 the annual report,and as filed on SEDAR+at .7SIGNIFICANT EVENTSOn March 15,2024,the BGSI Board of Directors declared a cash dividend for the first quarter of 2024 of C$0.15 per common share.The dividend was paid on April 26,2024 to common shareholders of record at the close of business on March 31,

56、2024.On March 26,2024,BGSI extended its existing revolving credit facilities in the aggregate amount of$550 million for a four-year term,with an accordion feature which can increase the credit facilities to a maximum of$850 million(the“Facilities”).The Facilities will mature in March 2028.The existi

57、ng$125 million Term Loan A maturing in March 2027 remains unchanged.On June 17,2024,the BGSI Board of Directors declared a cash dividend for the second quarter of 2024 of C$0.15 per common share.The dividend was paid on July 29,2024 to common shareholders of record at the close of business on June 3

58、0,2024.On August 8,2024,BGSI announced the appointment of Brian Kaner as President&Chief Operating Officer,effective immediately.Concurrent with this change,Tim ODay remains Chief Executive Officer(“CEO”),however relinquishes the“President”title,which he has held since 2017.On September 17,2024,the

59、BGSI Board of Directors declared a cash dividend for the third quarter of 2024 of C$0.15 per common share.The dividend was paid on October 29,2024 to common shareholders of record at the close of business on September 30,2024.On October 11,2024,BGSI announced the temporary closure of 47 locations in

60、 the states of Florida,Georgia,North Carolina and South Carolina due to Hurricane Helene,followed by the temporary closure of 52 locations in the state of Florida as a result of Hurricane Milton.On December 2,2024,the BGSI announced that effective May 14,2025,Chief Executive Officer Timothy ODay wil

61、l step down from his current role,to be succeeded by Brian Kaner,current President and Chief Operating Officer of Boyd.These changes are planned to be effective as of the date of the Annual General Meeting of Boyd,which is scheduled to occur on May 14,2025.On December 17,2024,the BGSI Board of Direc

62、tors declared a cash dividend for the fourth quarter of 2024 of C$0.153 per common share.The dividend was paid on January 29,2025 to common shareholders of record at the close of business on December 31,2024.On February 26,2025,BGSI announced the launch of its latest five-year goal designed to drive

63、 growth and enhance profitability through 2029.On March 17,2025,the BGSI Board of Directors declared a cash dividend for the first quarter of 2025 of C$0.153 per common share.The dividend will be paid on April 28,2025 to common shareholders of record at the close of business on March 31,2025.8The Co

64、mpany completed and opened the following number of collision repair acquisitions and start up locations during the periods listed:LocationNumber of locations added through acquisitionNumber of start upsTotalJanuary 1,2024 to December 31,2024371249January 1,2025 to March 18,2025369Total401858During t

65、he year ended December 31,2024,the Company opened seven start-up glass locations,acquired one glass location and four calibration businesses.From January 1,2025 up to the reporting date of March 18,2025,the Company acquired two glass location.OUTLOOK Boyd is pleased to have announced a new five-year

66、 goal,which includes growing revenue to$5 billion in 2029,doubling Adjusted EBITDA1 dollars from 2024-2029,returning to an Adjusted EBITDA margin of 14%,expanding market share and retaining a leadership position in all markets served,and achieving top-tier profitability in the North American collisi

67、on industry(“Double Down”).Boyd is accelerating its focus on operational excellence and profitability with“Project 360”,a company-wide transformational cost initiative launched in partnership with a leading global consulting firm during the fourth quarter of 2024 that will support the Double Down go

68、al.Project 360 is expected to result in$100 million in annual recurring cost savings over the plan period with upfront investment and transition costs incurred to achieve these benefits estimated to be in the$20-$23 million range over the coming quarters.In the near term,the market dynamics that imp

69、acted results throughout 2024,including a decline in claims volumes due to insurance premium inflation and overall economic uncertainty,have continued into early 2025,with repairable claims experiencing a greater year-over-year decline during the first two months of 2025 than was experienced in the

70、fourth quarter of 2024 in spite of the return of more normal winter weather conditions.Despite this fact,thus far in the first quarter of 2025,same-store sales has improved compared to the fourth quarter,but is not yet positive;continuing to demonstrate market share gains.As in prior years,the first

71、 quarter is burdened by higher payroll taxes that occur early in the year,while the fourth quarter of 2024 benefited from expense accrual reductions,as certain expense estimates were firmed up at amounts that were lower than previously estimated and accrued.These factors,along with the challenging c

72、laims environment are resulting in Adjusted EBITDA dollars,thus far in the first quarter,trending slightly below levels achieved in the first quarter of the prior year.While it is still too early to determine if claims volumes have bottomed,Boyd remains confident in the industrys long-term outlook a

73、nd believes the transformational cost saving initiatives initiated will drive improved margins in the coming quarters.Boyd remains committed to improving gross margin,through initiatives such as the internalization of scanning and calibration services.The need for scanning and calibration services c

74、ontinue to grow and Boyds ability to internalize these services continues to scale.The Company anticipates achieving 80%internalization of scanning and calibration services within the next 2-3 years.Growth through acquisition as well as through start-up sites continues.Although start-up sites have a

75、 longer development cycle and ramp-up period,these locations offer a number of advantages and as a result the Company plans to continue increasing the proportion of growth using this approach.Over the longer-term,the proportion of acquisition to start-up sites is expected to be approximately even.Th

76、e pipeline for start-up sites currently includes scheduled openings of seven locations in Q1 2025,and an additional 21 locations through the balance of the year.91 As defined in the non-GAAP financial measures and ratios section of the MD&AWhile the Company has been successfully executing on Boyds l

77、ong-term growth goal of doubling the size of the business on a constant currency basis from 2021 to 2025 against 2019 sales,over the past year and into 2025,the market has experienced unanticipated economic and industry conditions.The Company has focused on increasing value to customers and sharehol

78、ders,and has consistently performed above industry,with a focus on emerging from these conditions in a strong position.In spite of the initiatives in place,current market conditions may cause a slight delay in Boyd achieving its long-term growth goal of doubling the size of the business on a constan

79、t currency basis from 2021 to 2025 against 2019 sales.In the long-term,management remains confident in its business model and its ability to increase market share by expanding its presence in North America through strategic acquisitions alongside organic growth from Boyds existing operations.Accreti

80、ve growth will remain the Companys long-term focus whether it is through organic growth,new store development,or acquisitions.The North American collision repair industry remains highly fragmented and offers attractive opportunities for industry leaders to build value through focused consolidation a

81、nd economies of scale.As a growth company,Boyds objective continues to be to maintain a conservative dividend policy that will provide the financial flexibility necessary to support growth initiatives while gradually increasing dividends over time.The Company remains confident in its management team

82、,systems and experience.This,along with a strong financial position and financing options,positions Boyd well for success into the future.BUSINESS ENVIRONMENT&STRATEGY The collision repair industry in North America is estimated by Boyd to represent over$50 billion in annual revenue.The industry is h

83、ighly fragmented,consisting of many small independent family owned businesses operating in local markets.It is estimated that car dealerships have approximately 15%of the total market.It is believed that multi-unit collision repair operators with greater than$20 million in annual revenues(including

84、multi-unit car dealerships),now have approximately 39%of the total market.Customer relationship dynamics in the Companys principal markets differ from region to region.In the United States,Ontario,and Alberta,where private insurers operate,a greater emphasis is placed on establishing and maintaining

85、 Direct Repair Programs(“DRPs”)and other referral arrangements with insurance companies.DRPs are established between insurance companies and collision repair shops to better manage automobile repair claims and increase levels of customer satisfaction.Insurance companies select collision repair opera

86、tors to participate in their programs based on integrity,convenience and physical appearance of the facility,quality of work,customer service,cost of repair,cycle time and other key performance metrics.Major insurers use performance-based criteria for selecting collision repair partners.Local and re

87、gional DRPs,and national and self-managed DRP relationships,represent an opportunity for Boyd to increase its business.Insurers have also moved to consolidate DRP repair volumes with a fewer number of repair shops.There is some preference among some insurance carriers to do business with multi-locat

88、ion collision repairers in order to reduce the number and complexity of contacts necessary to manage their networks of collision repair providers and to achieve a higher level of consistent performance.Boyd continues to develop and strengthen its DRP relationships with insurance carriers in both Can

89、ada and the United States and believes it is well positioned to take advantage of these trends.As described further under“Business Risks and Uncertainties”,operating results are expected to be subject to fluctuations or trends due to a variety of factors including availability of qualified employees

90、,availability of parts,pricing by insurance companies,general operating effectiveness,automobile technologies,general and regional economic downturns,unemployment rates and weather conditions.A downturn in the economic climate has the potential to affect results negatively.Boyd has worked to mitigat

91、e this risk by continuing to focus on meeting insurance companies performance requirements,and in doing so,grow market share.Boyd expects to generate growth sufficient to double the size of the business on a constant currency revenue basis from 2021 to 2025,based on 2019 revenues,implying a compound

92、 annual growth rate of 15 percent,although current market conditions may cause a slight delay in Boyd achieving this long-term growth goal.Boyd will continue to pursue accretive growth 10through a combination of organic growth(same-store sales2 growth)as well as adding new locations to the network i

93、n the United States and Canada.BUSINESS STRATEGYBoyd is pleased to have announced a new five-year goal,which includes growing revenue to$5 billion in 2029,doubling Adjusted EBITDA dollars from 2024-2029,returning to an Adjusted EBITDA margin of 14%,expanding market share and retaining a leadership p

94、osition in all markets served,and achieving top-tier profitability in the North American collision industry(“Double Down”).Double Down is supported by“Project 360”,a company-wide transformational cost initiative launched in partnership with a leading global consulting firm during the fourth quarter

95、of 2024.Project 360 is expected to result in$100 million in annual recurring cost savings over the plan period with upfront investment and transition costs incurred to achieve these benefits estimated to be in the$20-$23 million range over the coming quarters.112 As defined in the non-GAAP financial

96、 measures and ratios section of the MD&APeopleHaving the right people in the right roles with the right capabilities enables Boyd to be a market leading operator delivering exceptional customer experiences.The workforce drives the success of Boyds business,and the Company strives to create an enviro

97、nment where employees can reach their full potential and build long-term careers.Boyds ambition is to be a top employer in the collision,calibration and glass sector by attracting,developing,and retaining the strongest talent in the industry enabled by a culture of accountability.Boyd is committed t

98、o addressing labor market challenges by focusing on retention and recruitment,investing in the Technician Development Program and focusing on opportunities for productivity improvements.GrowthBoyds$5 billion revenue target will be achieved by continuing the Companys proven growth strategy,namely the

99、 combination of same-store sales growth and new location growth with a focus on securing a number-one or number-two market position in all markets served.The Company expects to generate 3%to 5%in average annual growth from same-store sales growth and an additional 5%to 7%in average annual growth thr

100、ough the addition of new locations.Beyond same-store sales growth and single shop expansion,Boyd will continue to be a strategic buyer of larger multi-location businesses,and if successful,this would be incremental to the revenue growth goals.Increasing same-store sales3 has a positive impact on fin

101、ancial performance.Boyd continues to pursue and execute on strategies to help grow same-store sales3,including a focus on growing car count volume through existing locations and increasing scanning and calibration services.Boyds inorganic model for growth includes new start-up locations as well as s

102、ingle-location and multi-location acquisitions.The Company believes that start-up facilities offer a number of advantages and as a result plans to continue increasing the proportion of growth using this approach.This approach allows Boyd to design and develop a facility that has a preferred footprin

103、t and flow.Being able to accommodate Boyds future needs in terms of glass and calibration services is another benefit.These facilities are also attractive from a customer and employee perspective.When a start-up facility is put into the market,consideration is given to new growth markets as well as

104、expansion of large markets into areas that do not have body shops.12Operational Excellence&InnovationOperational excellence has been a key component of Boyds past success and has contributed to the Company being viewed as an industry leading service provider.Delivering on our customers expectations

105、related to cost of repair,time to repair,quality and customer service are critical to being successful and being rewarded with same-store sales3 growth.The Companys commitment to operational excellence is embodied in its mission and goal,which is condensed into a top of mind cheer for its employees

106、which is Wow every customer,be the best.In 2015,Boyd rolled out and implemented its Wow Operating Way process improvement initiative which is now in place at all of its locations,except newly acquired locations,where it will be implemented as part of acquisition integration.In 2022,Boyd expanded its

107、 Wow Operating Way practices to corporate business processes.The Wow Operating Way is a series of systems,processes and measurements that drive excellence in customer satisfaction,repair cycle times and operational metrics.Boyd also conducts extensive customer satisfaction polling at all operating l

108、ocations to assist in keeping customer satisfaction at the forefront of its mandate.Boyd will also continue to invest in its infrastructure,process improvement initiatives and IT systems to contribute to high quality service to its customers and improved operational performance.Boyd is committed to

109、growing the business through adjacent services,such as the internalization of scanning and calibration services,which represented 5%of total revenues in 2024.In 2024,40%of Boyds scanning and calibration services were completed utilizing internal resources,with a near term ambition to grow this to 80

110、%.In order to support this growth,the workforce providing scanning and calibration services has grown by over 100%from January 1,2024 to December 31,2024.Initiatives such as the internalization of scanning and calibration services,progress in Boyds repair first strategy and focus on the use of cost

111、effective alternative parts,deliver strong value by lowering repair costs for the Companys customers and providing incremental gross margin to Boyd.Maintain Cost CompetitivenessBoyd continues to manage its operating expenses as a percentage of sales.Over the last few years,Boyd has made incremental

112、expense investments that are important for the long-term success of the business,including investing in key support functions.While expense management is critical,so is making the right expense investments.The Company is committed to returning to an Adjusted EBITDA margin of 14%,supported by Project

113、 360,a company-wide transformational cost initiative launched in partnership with a leading global consulting firm during the fourth quarter of 2024.Project 360 is expected to result in$100 million in annual recurring cost savings over the plan period with upfront investment and transition costs inc

114、urred to achieve these benefits estimated to be in the$20-$23 million range over the coming quarters.CAUTION CONCERNING FORWARD-LOOKING STATEMENTSStatements made in this annual report,other than those concerning historical financial information,may be forward-looking and therefore subject to various

115、 risks and uncertainties.Some forward-looking statements may be identified by words like“may”,“will”,“anticipate”,“estimate”,“expect”,“intend”,or“continue”or the negative thereof or similar variations.Readers are cautioned not to place undue reliance on such statements,as actual results may differ m

116、aterially from those expressed or implied in such statements.133 As defined in the non-GAAP financial measures and ratios section of the MD&AThe following table outlines forward-looking information included in this MD&A:Forward-looking InformationKey AssumptionsMost Relevant Risk FactorsBoyd plans t

117、o grow revenue to$5 billion in 2029,double Adjusted EBITDA dollars from 2024-2029,return to an Adjusted EBITDA margin of 14%,expand market share and retain a leadership position in all markets served,and achieve top-tier profitability in the North American collision industryOpportunities continue to

118、 be available and are at acceptable and accretive pricesFinancing options continue to be available at reasonable rates and on acceptable terms and conditionsNew and existing customer relationships are expected to provide acceptable levels of revenue opportunitiesAnticipated operating results would b

119、e accretive to overall Company resultsInitiatives to increase production capacity are successfulProject 360 is successfulTechnology is leveraged to optimize mix decisionsMaterial spend is optimizedStore operating model is optimized to drive leverage as volume scalesAcquisition market conditions chan

120、ge and repair shop owner demographic trends changeCredit and refinancing conditions prevent or restrict the ability of the Company to continue growth strategiesChanges in market conditions and operating environmentSignificant decline in the number of insurance claimsIntegration of new stores is not

121、accomplished as plannedIncreased competition which prevents achievement of acquisition and revenue goalsInitiatives to increase production capacity take longer than expected or are not successful Insurance premium inflation and overall economic uncertainty continue to impact claims volumesAnticipate

122、d cost savings take longer than expected or are not fully realizedProject 360 is expected to require upfront investment and transition costs in the$20-$23 million range over the coming quarters.The actual cost for these expenditures agrees with the original estimateThe project is completed according

123、 to the estimated timeline No other new requirements are identified or required during the period All identified costs are required during the period BGSI may identify additional expenditure needs that were not originally anticipated BGSI may identify expenditure needs that were originally anticipat

124、ed;however,are no longer required or required on a different timeline Project 360 is expected to result in$100 million in annual recurring cost savings over the plan period.Reduced operating expenses and improved operating expense leverage is expected to be realized gradually beginning in the second

125、 quarter of 2025.The project is completed according to the estimated timeline Cost savings initiatives have been appropriately identifiedAdequate time and resources are dedicated to achieving cost savings objectivesCost savings realized differ from amounts originally anticipated Timeframe for cost s

126、avings differs from original timelineBGSI is not able to achieve the level of cost savings anticipated 14Forward-looking InformationKey AssumptionsMost Relevant Risk FactorsThe Company anticipates achieving 80%internalization of scanning and calibration services within the next 2-3 yearsStaffing to

127、service scanning and calibration continues to be available Necessary equipment is readily availableVehicles requiring scanning and calibration services increase according to industry and company projectionsDemand for services grows more rapidly than anticipated during the timeframeNecessary equipmen

128、t is not available in the required timeframeVehicles requiring scanning and calibration services increase at a pace that differs from industry and company projectionsVehicle population in certain geographies does not support the investment required to internalize scanning and calibration servicesCur

129、rent market conditions may cause a slight delay in Boyd achieving its long-term growth goal of doubling the size of the business on a constant currency basis from 2021 to 2025 against 2019 salesOpportunities continue to be available and are at acceptable and accretive pricesFinancing options continu

130、e to be available at reasonable rates and on acceptable terms and conditionsNew and existing customer relationships are expected to provide acceptable levels of revenue opportunitiesAnticipated operating results would be accretive to overall Company resultsGrowth is defined as revenue on a constant

131、currency basisInitiatives to increase production capacity are successfulAcquisition market conditions change and repair shop owner demographic trends changeCredit and refinancing conditions prevent or restrict the ability of the Company to continue growth strategiesChanges in market conditions and o

132、perating environmentSignificant decline in the number of insurance claimsIntegration of new stores is not accomplished as plannedIncreased competition which prevents achievement of acquisition and revenue goalsInitiatives to increase production capacity take longer than expected or are not successfu

133、l Insurance premium inflation and overall economic uncertainty continue to impact claims volumesBoyd remains confident in its business model to increase market share by expanding its presence in North America through strategic and accretive acquisitions alongside organic growth from Boyds existing o

134、perationsRe-emergence of stability in economic conditions and employment ratesNew and existing customer relationships are expected to provide acceptable levels of revenue opportunitiesThe Companys customer and supplier relationships provide it with competitive advantages to increase sales over timeM

135、arket share growth will more than offset systemic changes in the industry and environmentAnticipated operating results would be accretive to overall Company resultsEconomic conditions deteriorateLoss of one or more key customers or loss of significant volume from any customerDecline in the number of

136、 insurance claimsInability of the Company to pass cost increases to customers over timeIncreased competition which may prevent achievement of revenue goalsChanges in market conditions and operating environmentChanges in weather conditions Inability to maintain,replace or grow technician capacity cou

137、ld impact organic growth15Forward-looking InformationKey AssumptionsMost Relevant Risk FactorsStated objective to gradually increase dividends over timeGrowing profitability of the Company and its subsidiariesThe continued and increasing ability of the Company to generate cash available for dividend

138、sBalance sheet strength and flexibility is maintained and the dividend level is manageable taking into consideration bank covenants,growth requirements and maintaining a dividend level that is supportable over timeBGSI is dependent upon the operating results of the CompanyEconomic conditions deterio

139、rateChanges in weather conditionsDecline in the number of insurance claimsLoss of one or more key customers or loss of significant volume from any customerChanges in government regulation During 2025,the Company plans to make cash capital expenditures,excluding those related to acquisition and devel

140、opment of new locations,within the range of 1.6%and 1.8%of sales.In addition to these capital expenditures,the Company plans to invest in network technology upgrades to further strengthen our technology and security infrastructure and prepare for advanced technology needs in the future.The investmen

141、t expected in 2025 is in the range of$10M to$12M,with an investment in 2026 in the range of$2 million to$4 million.The actual cost for these capital expenditures agrees with the original estimateThe purchase,delivery and installation of the capital items is consistent with the estimated timeline No

142、other new capital requirements are identified or required during the period All identified capital requirements are required during the period Actual expenditures could be above or below 1.6%to 1.8%of sales The timing of the expenditures could occur on a different timeline BGSI may identify addition

143、al capital expenditure needs that were not originally anticipated BGSI may identify capital expenditure needs that were originally anticipated;however,are no longer required or required on a different timeline We caution that the foregoing table contains what BGSI believes are the material forward-l

144、ooking statements and is not exhaustive.Therefore when relying on forward-looking statements,investors and others should refer to the“Risk Factors”section of BGSIs Annual Information Form,the“Business Risks and Uncertainties”and other sections of our Managements Discussion and Analysis and our other

145、 periodic filings with Canadian securities regulatory authorities.All forward-looking statements presented herein should be considered in conjunction with such filings.16SELECTED ANNUAL INFORMATIONThe following table summarizes selected financial information for BGSI over the prior three years:For t

146、he years ended December 31,(thousands of U.S.dollars,except per unit/share amounts)202420232022Sales$3,070,342$2,945,988$2,432,318Net earnings$24,544$86,656$40,962Adjusted net earnings (2)$30,902$89,683$42,366Basic and diluted earnings per share$1.14$4.04$1.91Adjusted net earnings per share(2)$1.44$

147、4.18$1.97Cash dividends per share declared:Share dividends(1)$0.44$0.44$0.45December 31,(thousands of U.S.dollars)202420232022Total assets$2,464,189$2,382,416$2,102,832 Total long-term financial liabilities$1,198,258$1,082,067$931,941(1)Dividends and distributions continue to be declared and paid in

148、 Canadian dollars.In 2024,the annual dividend declared totaled C$0.603(2023-C$0.591,2022-C$0.579)(2)As defined in the non-GAAP financial measures and ratios section of the MD&AAcquisitions and new single location growth had the largest impact on growing sales from 2023 to 2024,this coupled with same

149、-store sales growth resulted in sales growth from 2022 to 2023.Sales in 2024 compared to 2023 and 2022 were negatively impacted by a decrease in same-store sales.This is consistent with market trends where this year industry sources report a year-over-year decrease in repairable claims of 9%for all

150、losses and 7.9%excluding comprehensive claims.In 2023,same-store sales benefited from high levels of demand for services that created leverage in the absorption of fixed costs.In 2022,sales were negatively impacted by supply chain disruption and a highly competitive labor market which translated int

151、o significant wage pressure and labor margin compression.The decline in net earnings and adjusted net earnings4 in 2024 compared to 2023 and 2022 were primarily driven by a decrease in same-store sales which resulted in decreased leverage in the absorption of fixed costs.Net earnings was further dec

152、reased by$3.2 million(net of tax)in transformational cost initiatives carried out by the Company during the fourth quarter of 2024.Expenses related to the transformational cost initiatives,expected to continue into 2025,are non-recurring and relate to the execution of Project 360 expected to assist

153、in achieving BGSIs five-year goal,these expenses have been removed from the calculation of Adjusted Net Earnings.The change in total assets and total long-term financial liabilities was significantly impacted by acquisitions and new location growth.In addition to these changes,fluctuations in total

154、assets from 2022 to 2024 have primarily related to increases in property,plant and equipment,right of use assets and goodwill as a result of new location growth.During this timeframe,long-term financial liabilities were also impacted by financing of acquisitions and new location growth.Since the end

155、 of 2007 through the end of 2024,BGSI increased dividends to shareholders.As of March 18,2025 the dividend rate is C$0.153 per quarter or C$0.612 on an annualized basis.174 As defined in the non-GAAP financial measures and ratios section of the MD&ABOYD GROUP SERVICES INC.The consolidated financial

156、statements of BGSI and its subsidiaries have been prepared in accordance with IFRS Accounting Standards,as issued by the International Accounting Standards Board(“IFRS Accounting Standards”)and contain the consolidated financial position,results of operations and cash flows of BGSI,the Company and t

157、he Companys subsidiary companies for the year ended December 31,2024.NON-GAAP FINANCIAL MEASURES AND RATIOS EBITDA AND ADJUSTED EBITDAEarnings before interest,taxes,depreciation and amortization(“EBITDA”)is not a calculation defined in IFRS Accounting Standards.EBITDA should not be considered an alt

158、ernative to net earnings in measuring the performance of BGSI,nor should it be used as an exclusive measure of cash flow.BGSI reports EBITDA and Adjusted EBITDA because they are key measures that management uses to evaluate performance of the business and to reward its employees.EBITDA is also a con

159、cept utilized in measuring compliance with debt covenants.EBITDA and Adjusted EBITDA are measures commonly reported and widely used by investors and lending institutions as an indicator of a companys operating performance and ability to incur and service debt,and as a valuation metric.While EBITDA i

160、s used to assist in evaluating the operating performance and debt servicing ability of BGSI,investors are cautioned that EBITDA and Adjusted EBITDA as reported by BGSI may not be comparable in all instances to EBITDA as reported by other companies.CPA Canadas Canadian Performance Reporting Board def

161、ined Standardized EBITDA to foster comparability of the measure between entities.Standardized EBITDA represents an indication of an entitys capacity to generate income from operations before taking into account managements financing decisions and costs of consuming tangible and intangible capital as

162、sets,which vary according to their vintage,technological age and managements estimate of their useful life.Accordingly,Standardized EBITDA comprises sales less operating expenses before finance costs,capital asset amortization and impairment charges,and income taxes.Adjusted EBITDA is calculated to

163、exclude items of an unusual nature that do not reflect normal or ongoing operations of BGSI and which should not be considered in a valuation metric or should not be included in an assessment of the ability to service or incur debt.Included as an adjustment to EBITDA are acquisition and transformati

164、onal cost initiatives expenses and fair value adjustments to contingent consideration.These adjustments which do not relate to the current operating performance of the business units but are typically costs incurred to expand operations as well as execute a transformation plan,expected to assist in

165、achieving BGSIs five-year goal.From time to time BGSI may make other adjustments to its Adjusted EBITDA for items that are not expected to recur.18The following is a reconciliation of BGSIs net earnings to Standardized EBITDA and Adjusted EBITDA:ADJUSTED EBITDAThree Months EndedDecember 31,Year Ende

166、dDecember 31,(thousands of U.S.dollars)2024202320242023Net earnings$2,442$19,066$24,544$86,656 Add:Finance costs17,38214,05268,91351,718Income tax(recovery)expense(792)8,0087,11632,865Depreciation of property,plant and equipment20,90716,22475,49856,863Depreciation of right of use assets31,42528,6631

167、23,512109,806Amortization of intangible assets6,8146,89626,30926,182Standardized EBITDA$78,178$92,909$325,892$364,090 Add:Fair value adjustments(144)(189)(952)(189)Acquisition and transformational cost initiatives$5,374 1,487$9,879$4,346 Adjusted EBITDA$83,408$94,207$334,819$368,247 ADJUSTED NET EAR

168、NINGSIn addition to Standardized EBITDA and Adjusted EBITDA,BGSI believes that certain users of financial statements are interested in understanding net earnings excluding certain fair value adjustments and other items of an unusual or infrequent nature that do not reflect normal or ongoing operatio

169、ns of the Company.This can assist these users in comparing current results to historical results that did not include such items.The following is a reconciliation of BGSIs net earnings to adjusted net earnings:(thousands of U.S.dollars,except share and per share amounts)Three Months EndedDecember 31

170、,Year EndedDecember 31,2024202320242023Net earnings$2,442$19,066$24,544$86,656 Add:Fair value adjustments(non-taxable)(144)(189)(952)(189)Acquisition and transformational cost initiatives(net of tax)$3,977$1,100$7,310$3,216 Adjusted net earnings$6,275$19,977$30,902$89,683 Weighted average number of

171、shares21,472,67021,472,19421,472,43621,472,194Adjusted net earnings per share$0.29$0.93$1.44$4.18 19SAME-STORE SALESSame-store sales is a measure of sales that includes only those locations in operation for the full comparative period.Same-store sales is presented excluding the impact of foreign exc

172、hange on the current period.Same-store sales is calculated by applying the prior period exchange rate to the current year sales.The following is a reconciliation of BGSIs sales to same-store sales:Three months ended December 31,Year ended December 31,(thousands of U.S.dollars)2024202320242023Sales$7

173、52,339$740,014$3,070,342$2,945,988 Less:Sales from locations not in the comparative period(36,316)(3,057)(273,019)(85,845)Sales from under-performing facilities closed during the period (534)(17)(7,717)Foreign exchange 1,509 3,436 Same-store sales(excluding foreign exchange)$717,532$736,422$2,800,74

174、2$2,852,425 Dividends BGSI declared dividends of C$0.150 per share in each of the first,second and third quarters of 2024 and C$0.153 per share in the fourth quarter of 2024(2023-C$0.147 and C$0.150 respectively).Dividends to shareholders of BGSI were declared and paid as follows:(thousands of U.S.d

175、ollars)Record datePayment dateDividend amountMarch 31,2024April 26,2024$2,379 June 30,2024July 29,2024 2,350 September 30,2024October 29,2024 2,377 December 31,2024January 29,2025 2,308$9,414(thousands of U.S.dollars)Record datePayment dateDividend amountMarch 31,2023April 26,2023$2,306 June 30,2023

176、July 27,2023 2,376 September 30,2023October 27,2023 2,333 December 31,2023January 29,2024 2,397$9,412 20RESULTS OF OPERATIONSResults of Operations(thousands of U.S.dollars,except per share amounts)Three months ended December 31,Year ended December 31,2024%change20232024%change2023Sales-Total 752,339

177、 1.7 740,014 3,070,342 4.2 2,945,988 Same-store sales-Total(1)(excluding foreign exchange)717,532 (2.6)736,422 2,800,742 (1.8)2,852,425 Gross margin%45.8 0.7 45.5 45.5 45.5 Operating expense%34.8 6.4 32.7 34.6 4.8 33.0 Adjusted EBITDA(1)83,408 (11.5)94,207 334,819 (9.1)368,247 Acquisition and transf

178、ormational cost initiatives 5,374 261.4 1,487 9,879 127.3 4,346 Depreciation and amortization 59,146 14.2 51,783 225,319 16.8 192,851 Fair value adjustments(144)N/A (189)(952)N/A (189)Finance costs 17,382 23.7 14,052 68,913 33.2 51,718 Income tax(recovery)expense(792)(109.9)8,008 7,116 (78.3)32,865

179、Adjusted net earnings(1)6,275 (68.6)19,977 30,902 (65.5)89,683 Adjusted net earnings per share(1)0.29 (68.8)0.93 1.44 (65.6)4.18 Net earnings 2,442 (87.2)19,066 24,544 (71.7)86,656 Basic and diluted earnings per share 0.11 (87.2)0.89 1.14 (71.7)4.04(1)As defined in the non-GAAP financial measures an

180、d ratios section of the MD&A.21Sales Sales totaled$3.1 billion for the year ended December 31,2024 an increase of$124.4 million or 4.2%when compared to the same period of 2023.The increase in sales was the result of the following:$187.2 million of incremental sales were generated from 155 new locati

181、ons that were not in operation for the full comparative period.Same-store sales5 excluding foreign exchange decreased$51.7 million or 1.8%and decreased a further$3.4 million due to the translation of same-store sales5 at a lower Canadian dollar exchange rate.This is consistent with market trends whe

182、re this year industry sources report a year-over-year decrease in repairable claims of 9%for all losses and 7.9%excluding comprehensive claims.The year ended December 31,2024 recognized two additional selling and productions day when compared to the prior year,which increased selling and production

183、capacity by approximately 0.8%.The internalization of scanning and calibration services,progress in Boyds repair first strategy and focus on the use of cost effective alternative parts,continued to deliver strong value by lowering repair costs for the Companys customers,and consequently reduced sale

184、s that otherwise could have been achieved despite being beneficial from a gross margin perspective.Sales were affected by the closure of under-performing facilities which decreased sales by$7.7 million.Same-store sales are calculated by including sales for locations and businesses that have been in

185、operation for the full comparative period.Gross ProfitGross Profit was$1.4 billion or 45.5%of sales for the year ended December 31,2024 compared to$1.3 billion or 45.5%of sales for the same period in 2023.While margin rate remained flat year over year,gross profit increased$56.4 million as a result

186、of location growth when compared to the prior period.The internalization of scanning and calibration contributed to the increase in gross margin,along with improved performance based pricing;however,these gains were offset by labor rate margins which remained below historical levels.Operating Expens

187、esOperating Expenses for the year ended December 31,2024 increased$89.9 million to$1,061.7 million from$971.8 million for the same period of 2023.The increase in operating expenses was primarily the result of location growth and inflationary increases.Closed locations lowered operating expenses by$4

188、.5 million.Operating expenses as a percentage of sales were 34.6%for the year ended December 31,2024 compared to 33.0%for the same period in 2023.Operating expenses as a percentage of sales was negatively impacted by the decline in same-store sales and new locations,which contributed sales but with

189、a higher operating expense ratio of 36.9%.Although operating expenses as a percentage of sales was positively impacted by reductions in staffing made to better align with current levels of demand as well as reduced incentive compensation and recruiting costs,these impacts were more than offset by fi

190、xed costs on existing and new locations.Acquisition and Transformational Cost InitiativesAcquisition and Transformational Cost Initiatives for the year ended December 31,2024 were$9.9 million compared to$4.3 million recorded for the same period of 2023.Acquisition costs relate to various acquisition

191、s,including acquisitions from prior periods,as well as other completed or potential acquisitions.Expenses related to the transformational cost initiative of$4.4 million,expected to continue in 2025,are non-recurring and relate to the execution of a transformation plan expected to assist in achieving

192、 BGSIs five-year goal.No similar transformation costs were incurred in 2023.225 As defined in the non-GAAP financial measures and ratios section of the MD&AAdjusted EBITDA6 Earnings before interest,income taxes,depreciation and amortization,adjusted for contingent consideration,as well as acquisitio

193、n and transformational cost initiatives(“Adjusted EBITDA6”)for the year ended December 31,2024 totaled$334.8 million or 10.9%of sales compared to Adjusted EBITDA6 of$368.2 million or 12.5%of sales in the same period of the prior year.The$33.4 million decrease was primarily the result of declines in

194、repairable claims volumes for services,which resulted in same-store sales declines and a higher ratio of operating expenses as a percentage of sales.Although operating expenses as a percentage of sales was positively impacted by reductions in staffing made to better align with current levels of dema

195、nd as well as reduced incentive compensation and recruiting costs,these impacts were more than offset by fixed costs on existing and new locations.Depreciation and AmortizationDepreciation related to property,plant and equipment totaled$75.5 million or 2.5%of sales for the year ended December 31,202

196、4,an increase of$18.6 million when compared to the$56.9 million or 1.9%of sales recorded in the same period of the prior year.The increase in depreciation expense was primarily due to growth in locations,the investments in network technology upgrades,as well as growth related to the calibration busi

197、ness.Investments in the calibration business pertain primarily to vehicles and calibration technology equipment.Depreciation expense as a percentage of sales has been impacted by same-store sales declines.Depreciation related to right of use assets totaled$123.5 million,or 4.0%of sales for the year

198、ended December 31,2024,as compared to$109.8 million or 3.7%of sales for the same period of the prior year.The increase in depreciation expense was primarily due to location growth and lease renewals.Depreciation expense as a percentage of sales has been impacted by same-store sales declines.Amortiza

199、tion of intangible assets for the year ended December 31,2024 totaled$26.3 million or 0.9%of sales,an increase of$0.1 million when compared to the$26.2 million or 0.9%of sales expensed for the same period in the prior year.Finance CostsFinance Costs of$68.9 million or 2.2%of sales for the year ended

200、 December 31,2024 increased from$51.7 million or 1.8%of sales for the same period of the prior year.The increase in finance costs was primarily due to increased lease liabilities,asa result of lease renewals and location growth,as well as higher variable interest rates and increased utilization on t

201、he revolving credit facility.Income Taxes Current and Deferred Income Tax Expense of$7.1 million for the year ended December 31,2024 compared to an expense of$32.9 million for the same period of the prior year.Income tax expense was impacted by the recording of state-related adjustments related to t

202、he completion and filing of the prior year U.S.tax returns,which decreased income tax expense by approximately$1.5 million for the year ended December 31,2024(December 31,2023-increased income tax expense by$1.2 million).In 2024,the recovery of state taxes was due to the recognition of a deferred ta

203、x asset related to depreciation differences in states that do not conform with federal bonus depreciation.Permanent differences did not have a significant impact on the tax computed on accounting income.236 As defined in the non-GAAP financial measures and ratios section of the MD&ANet Earnings and

204、Earnings Per Share Net Earnings for the year ended December 31,2024 was$24.5 million or 0.8%of sales compared to$86.7 million or 2.9%of sales in the same period of the prior year.The net earnings amount in 2024 was impacted by acquisition and transformational cost initiatives of$7.3 million(net of t

205、ax).After adjusting for fair value and other unusual items,Adjusted net earnings7 in 2024 was$30.9 million,or 1.0%of sales.This compares to Adjusted net earnings7 of$89.7 million or 3.0%of sales in 2023.Net earnings and Adjusted net earnings for the period was negatively impacted by the decrease in

206、Adjusted EBITDA,as well as increased depreciation expense and increased finance cost.Depreciation and finance costs increased due to investments in growth and the investment in network technology upgrades.Basic and Diluted Earnings Per Share was$1.14 per share for the year ended December 31,2024 com

207、pared to$4.04 for the same period of 2023.Adjusted net earnings per share8 was$1.44 compared to$4.18 for the same period of 2023.Summary of Quarterly Results(in thousands of U.S.dollars,except per share amounts)2024 Q42024 Q32024 Q22024 Q12023 Q42023 Q32023 Q22023 Q1Sales$752,339$752,293$779,163$786

208、,547$740,014$737,798$753,235$714,941 Adjusted EBITDA(1)$83,408$80,128$89,576$81,707$94,207$93,972$95,374$84,694 Net earnings$2,442$2,895$10,826$8,381$19,066$20,498$26,269$20,823 Basic and diluted earnings per share$0.11$0.13$0.50$0.39$0.89$0.95$1.22$0.97 Adjusted net earnings(1)$6,275$3,247$11,937$9

209、,444$19,977$21,483$26,988$21,234 Adjusted net earnings per share(1)$0.29$0.15$0.56$0.44$0.93$1.00$1.26$0.99(1)As defined in the non-GAAP financial measures and ratios section of the MD&A.LIQUIDITY AND CAPITAL RESOURCESCash flow from operations,together with cash on hand and undrawn credit on existin

210、g facilities are expected to be sufficient to meet operating requirements,capital expenditures and dividends.At December 31,2024,BGSI had cash,net of outstanding deposits and cheques,held on deposit in bank accounts totaling$20.0 million(December 31,2023-$22.5 million).The decrease in the cash balan

211、ce as at December 31,2024 is the result of decreased cash flows from operations.The net working capital ratio(current assets divided by current liabilities)was 0.62:1 at December 31,2024(December 31,2023 0.63:1).At December 31,2024,BGSI had total debt outstanding,net of cash,of$1,231.6 million compa

212、red to$1,225.1 million at September 30,2024,$1,208.7 million at June 30,2024,$1,163.8 million at March 31,2024 and$1,114.5 million at December 31,2023.Debt,net of cash,before lease liabilities increased when compared to the prior year primarily as a result of location growth.The Companys strategy ha

213、s been to not hold real estate except where it is necessary for growth opportunities.Certain start-up locations necessitate short term holding of real estate until the build is complete and operations have begun.During the year 2024,the Company completed sale leaseback transactions for proceeds of$6

214、4.9 million.The sale leaseback transactions allowed the Company to replenish capital that can be redeployed to further grow the business.247 As defined in the non-GAAP financial measures and ratios section of the MD&A8 As defined in the non-GAAP financial measures and ratios section of the MD&ATotal

215、 debt,net of cash(thousands of U.S.dollars)December 31,2024September 30,2024June 30,2024March 31,2024December 31,2023Revolving credit facility&swing line (net of financing costs)$369,333$389,774$353,724$300,171$264,046 Term Loan A(net of financing costs)124,882 124,860 124,847 124,831 124,812 Seller

216、 notes(1)13,068 15,458 17,939 29,870 32,847 Total debt before lease liabilities$507,283$530,092$496,510$454,872$421,705 Cash 19,997 43,847 15,530 16,380 22,511 Total debt,net of cash before lease liabilities$487,286$486,245$480,980$438,492$399,194 Lease liabilities 744,295 738,895 727,703 725,337 71

217、5,277 Total debt,net of cash$1,231,581$1,225,140$1,208,683$1,163,829$1,114,471(1)Seller notes are loans granted to the Company by the sellers of businesses related to the acquisition of those businesses.The following table summarizes the undiscounted contractual obligations at December 31,2024 and r

218、equired payments over the next five years:Contractual Obligations(thousands of U.S.dollars)TotalWithin 1year1 to 2years2 to 3years3 to 4years4 to 5yearsAfter 5yearsBank indebtedness$Accounts payable and accrued liabilities 306,942306,942Long-term debt507,2838,994372,823125,41749Lease liability948,90

219、6157,105143,935128,045107,05283,934328,835Purchase Obligations(1)unknownunknownunknownunknownunknownunknown$1,763,131$473,041$516,758$253,462$107,101$83,934$328,835(1)Subject to fulfilling certain conditions such as meeting contractual purchase obligations and no change in control the repayment woul

220、d be nilOperating Activities Cash flow generated from operations before considering working capital changes,was$319.2 million for the year ended December 31,2024 compared to$338.5 million in 2023.For the year ended December 31,2024,changes in working capital items used net cash of$5.9 million compar

221、ed with providing net cash of$19.1 million in the same period of 2023.Changes in accounts receivable,inventory,prepaid expenses,income taxes,accounts payable and accrued liabilities are significantly influenced by timing of collections and expenditures.25Financing ActivitiesCash used in financing ac

222、tivities totaled$106.9 million for the year ended December 31,2024 compared to cash used in financing activities of$105.9 million for the same period of the prior year.During 2024,cash was provided by draws of the revolving credit facility in the amount of$366.0 million offset by cash used to repay

223、draws as well as long-term debt associated with seller notes in the amount of$283.8 million and to fund interest costs on long-term debt of$29.1 million.Cash used by financing activities included$109.2 million in repayments of property,vehicle and equipment lease liabilities and cash used to fund in

224、terest costs on these lease liabilities of$40.5 million.Cash was also used to pay dividends of$9.4 million.The Company extended the revolving credit facility,resulting in the payment of$0.8 million of financing costs.During 2023,cash was provided by draws of the revolving credit facility in the amou

225、nt of$260.5 million offset by cash used to repay draws as well as long-term debt associated with seller notes in the amount of$205.8 million and to fund interest costs on long-term debt of$19.8 million.Cash used by financing activities included$99.3 million used to repay property,vehicle and equipme

226、nt lease liabilities and cash used to fund interest costs on these lease liabilities of$32.1 million.Cash was also used to pay dividends of$9.4 million.Debt FinancingOn March 26,2024,the Company entered into a fourth amended and restated credit agreement to extend the revolving credit facilities in

227、the aggregate amount of$550 million with an accordion feature which can increase the facilities to a maximum of$850 million(the“Facilities”).The Facilities are accompanied by a fixed-rate Term Loan A maturing in March 2027,in the amount of$125 million at an interest rate of 3.455%.The Facilities are

228、 with a syndicate of Canadian and U.S.banks and are secured by the shares and assets of the Company as well as guarantees by BGSI and subsidiaries,while the Term Loan A is with one of the syndicated banks.The interest rate for draws on the Facilities are based on a pricing grid of BGSIs ratio of tot

229、al funded debt to EBITDA as determined under the credit agreement.The Company can draw on the Facilities in either the U.S.or in Canada,in either U.S.or Canadian dollars.The Company can make draws in tranches as required.Tranches bear interest only and are not repayable until the maturity date but c

230、an be voluntarily repaid at any time.The Company has the ability to choose the base interest rate between Prime,Canadian Overnight Repo Rate Average(“CORRA”),U.S.Prime or Secured Overnight Financing Rate(“SOFR”)at the Companys election.The credit agreement provides for CORRA as the Canadian benchmar

231、k replacement rate on Canadian dollar term advances when the publication of Canadian Dollar Offered Rate(“CDOR”)ceased in June 2024.The total syndicated Facilities include a swing line up to a maximum of$10.0 million for the Canadian borrower and$30.0 million for the U.S.borrower.As at December 31,2

232、024,the Company has drawn$370.0 million U.S.(December 31,2023-$264.5 million)and the Canadian borrower had drawn$nil(December 31,2023-$nil)on the Facilities and$125.0 million(December 31,2023-$125.0 million)on the Term Loan A.The Company is subject to certain financial covenants which must be mainta

233、ined to avoid acceleration of the termination of the credit agreement.The financial covenants require BGSI to maintain a senior funded debt to EBITDA ratio of no greater than 3.50 and an interest coverage ratio of not less than 2.75.For four quarters following a material acquisition,the senior funde

234、d debt to EBITDA ratio may be increased to less than 4.00.For purposes of covenant calculations,property lease payments are deducted from EBITDA,and EBITDA is further adjusted to reflect pro-forma annualized acquisition results.The Company supplements its debt financing by negotiating with sellers i

235、n certain acquisitions to provide financing to the Company in the form of term notes.The notes payable to sellers are typically at favorable interest rates and for terms of one to 15 years.This source of financing is another means of supporting BGSIs growth,at a relatively low cost.During the year e

236、nded December 31,2024,BGSI entered into 14 new seller notes for an aggregate amount of$3.5 million.During the year ended December 31,2024,BGSI repaid seller notes in the amount of$23.3 million.Shareholders Capital During the first quarter of 2021,the Company instituted a stock option plan for senior

237、 management,which was approved by shareholders on May 12,2021.The Companys stock option plan allows for the granting of options up to an amount of 250,000 Common shares under this plan.Each tranche of the options vests equally over two,three,four and five year periods.The term of an option shall be

238、determined and approved by the People,Culture and Compensation Committee;provided that the term shall be no longer than ten years from the grant date.26Year ended December 31,20242023NumberWeighted average exercise price(C$)NumberWeighted average exercise price(C$)Balance at the beginning of year54,

239、559$198.78 31,113$186.41 Granted during the year18,269282.2628,821211.13Forfeited during the year(4,535)219.71(5,375)193.39Expired during the year Exercised during the year(531)204.83 Balance at the end of year67,762$219.84 54,559$198.78 Exercisable at the end of the year8,351$195.58 2,690$219.21 In

240、vesting ActivitiesCash used in investing activities totaled$207.7 million for the year ended December 31,2024.This compares to$244.4 million used in the prior period.The investing activity in both periods related primarily to new location growth that occurred during these periods.During the year end

241、ed December 31,2024,the Company completed sale leaseback transactions for proceeds of$64.9 million.The remainder of the investing activity in both periods related primarily to new location growth as well as the development of businesses which consisted primarily of property,plant and equipment addit

242、ions.Acquisitions and Development of BusinessesThe Company completed and opened the following number of collision repair acquisitions and start up locations during the periods listed:LocationNumber of locations added through acquisitionNumber of start upsTotalJanuary 1,2024 to December 31,2024371249

243、January 1,2025 to March 18,2025369Total401858During the year ended December 31,2024,the Company opened seven start-up glass locations,acquired one glass location and four calibration businesses.From January 1,2025 up to the reporting date of March 18,2025,the Company acquired two glass location.The

244、Company completed the acquisition or start-up of 116 collision repair locations from the beginning of 2023 until the fourth quarter reporting date of March 19,2024.Details of these acquisitions can be found in the 2023 Annual Report.During 2024 the Company invested in the growth of its scanning and

245、calibration services.Expenditures in this area on vehicles and scanning and calibration technology equipment is expected to continue into the future as the Company grows its internalization of this work from 40%to 80%in the near term.Start-upsStart-up collision repair facilities include brownfield l

246、ocations,which are existing buildings converted to Boyds use.In some cases this would include opening in a building that was previously a collision repair facility.The Company will also develop 27greenfield locations which consist of Boyds prototype building from the ground up.In both cases,Boyd ens

247、ures the location is favorable and zoned appropriately to be able to operate upon completion of development.Depending on a variety of factors including zoning,permitting,supply chain and availability of trades,the development of a start-up facility can take between 10 and 24 months,with greenfields

248、generally taking longer than brownfields.The Company believes that start-up facilities offer a number of advantages and as a result plans to continue increasing the proportion of growth using this approach.This approach provides another option to grow in markets that are new and growing and also all

249、ows Boyd to design and develop a facility that has a preferred footprint and flow.Being able to accommodate Boyds future needs in terms of glass and calibration services is another benefit.These facilities are also attractive from a customer and employee perspective.Having the capability to grow thr

250、ough start-ups at a higher pace gives the Company optionality to invest in a way that continues to provide accretive returns when multi-shop or single location acquisition opportunities are not ideal.Start-up facilities,whether brownfield or greenfield,have a longer ramp-up period when compared to t

251、he Companys historical single shop acquisitions.It generally takes longer for sales to build up to steady state levels in start up locations.Whereas with single store acquisitions,it takes on average between 12-24 months to add the necessary employees and DRP relationships to drive sales to projecte

252、d levels,for start-ups it can take between 24-36 months from the time of store opening.During these ramp up periods,leveraging of fixed costs is limited,which impacts the operating expense ratio and supplementing production staff wages may be required,which impacts gross margin.For start-up location

253、s,pre-opening costs such as utilities,core staff,property taxes and shop supplies are incurred without sales revenue to offset these costs.This pattern of extended ramp up would typically result in losses for the months leading up to the opening and continue at decreasing levels as the revenue incre

254、ases.Performance of newly developed locations will vary,but the long-term value creation of developing start-up sites are very attractive.Based on Boyds history,newly developed locations would reach maturity by the end of their third year.In 2024,the Company commenced operations in 12 new start-up c

255、ollision repair facilities.The total combined investment in leaseholds and equipment for start-up facilities was approximately$23.0 million,including incremental investments in the build out of certain start-up locations.The Company commenced operations in 28 new start-up collision repair facilities

256、 in 2023 with a combined investment of approximately$45.3 million.The Company anticipates it will use similar start-up strategies as part of its continued growth in the future.Capital ExpendituresAlthough most of Boyds repair facilities are leased,funds are required to ensure facilities are properly

257、 repaired and maintained to ensure the Companys physical appearance communicates Boyds standard of professional service and quality.The Companys need to maintain its facilities and upgrade or replace equipment to meet increased complexity of newer vehicles,signage,computers,software and vehicles for

258、ms part of the annual cash requirements of the business.The Company manages these expenditures by annually reviewing and determining its capital budget needs and then authorizing major expenditures throughout the year based upon individual business cases.Excluding expenditures related to network tec

259、hnology upgrades and acquisition and development,the Company spent approximately$62.3 million,or 2.0%of sales on capital expenditures during 2024,compared to$57.9 million or 2.0%of sales during 2023.In 2024,capital expenditures as a percentage of sales were impacted by same-store sales declines.Duri

260、ng 2025,the Company plans to make cash capital expenditures,excluding those related to acquisition and development of new locations,within the range of 1.6%and 1.8%of sales.In addition to these capital expenditures,the Company plans to invest in network technology upgrades to further strengthen our

261、technology and security infrastructure and prepare for advanced technology needs in the future.During 2024,the Company spent approximately$18.1 million on network technology upgrades.The investment expected in 2025 is in the range of$10 million to$12 million,with an investment in 2026 in the range o

262、f$2 million to$4 million.These investments align with Boyds ESG sustainability roadmap to responsibly address data privacy and cyber security.28FOURTH QUARTERSales for the three months ended December 31,2024 totaled$752.3 million,an increase of$12.3 million or 1.7%compared to the same period in 2023

263、.Sales growth of$33.3 million was attributable to incremental sales generated from 86 new locations.The closure of under-performing facilities accounted for a decrease in sales of$0.5 million.Overall same-store sales excluding foreign exchange decreased$18.9 million,or 2.6%in the fourth quarter of 2

264、024 when compared to the fourth quarter of 2023 and decreased a further$1.5 million due to the translation of same-store sales5 at a lower Canadian dollar exchange rate.The fourth quarter of 2024 recognized one more selling and production day when compared to the same period of the prior year.Indust

265、ry sources report a fourth quarter year-over-year decrease in repairable claims of 6%for all losses and 7.9%excluding comprehensive claims.The internalization of scanning and calibration services,progress in Boyds repair first strategy and focus on the use of cost effective alternative parts,continu

266、ed to deliver strong value by lowering repair costs for the Companys customers,and consequently reduced sales that otherwise could have been achieved despite being beneficial from a gross margin perspective.Gross Profit was$344.9 million,or 45.8%of sales in the fourth quarter of 2024 compared to$336

267、.5 million or 45.5%in the same period in 2023.Gross profit increased$8.4 million primarily as a result of location growth when compared to the prior period.The gross margin percentage for the three months ended December 31,2024 benefited from internalization of scanning and calibration and improved

268、performance based pricing,partially offset by lower paint margins.Operating expenses as a percentage of sales were 34.8%for the fourth quarter of 2024 compared to 32.7%for the same period in 2023.Operating expenses as a percentage of sales was significantly impacted by the decline in same-store sale

269、s and location growth.Although operating expenses as a percentage of sales was positively impacted by reductions in staffing made to better align with current levels of demand as well as reduced incentive compensation and recruiting costs,these impacts were more than offset by fixed costs on existin

270、g and new locations.New locations contributed sales but with a higher operating expense ratio of 37.5%during the fourth quarter of 2024.Adjusted EBITDA9 for the fourth quarter of 2024 totaled$83.4 million or 11.1%of sales compared to Adjusted EBITDA8 of$94.2 million or 12.7%of sales in the same peri

271、od of the prior year.The$10.8 million decrease was primarily the result of lower same-store sales levels and a high ratio of operating expenses as a percentage of sales for both existing and new stores.Current and Deferred Income Tax(Recovery)for the fourth quarter of$(0.8)million in 2024 compared t

272、o an income tax expense of$8.0 million in 2023.Income tax expense was impacted by the recording of state-related adjustments related to the completion and filing of the prior year U.S.tax returns,which decreased income tax expense by approximately$1.5 million for the fourth quarter of 2024(December

273、31,2023-increased income tax expense by$1.2 million).In 2024,the recovery of state taxes was due to the recognition of a deferred tax asset related to depreciation differences in states that do not conform with federal bonus depreciation.Permanent differences did not have a significant impact on the

274、 tax computed on accounting income.Net Earnings for the fourth quarter was$2.4 million,or 0.3%of sales,or$0.11 per fully diluted share compared to net earnings of$19.1 million,or 2.6%of sales,or$0.89 per fully diluted share for the same period in the prior year.The net earnings amount in the fourth

275、quarter of 2024 was impacted by acquisition and transformational cost initiatives of$4.0 million(net of tax).After adjusting for fair value and other unusual items,Adjusted net earnings8 for the fourth quarter of 2024 was$6.3 million,or 0.8%of sales.This compares to Adjusted net earnings8 of$20.0 mi

276、llion or 2.7%of sales in the fourth quarter of 2023.Net earnings and Adjusted net earnings8 for the period was negatively impacted by the decrease in Adjusted EBITDA,as well as increased depreciation expense and increased finance costs.Depreciation and finance costs experienced increases primarily d

277、riven by investments in growth and the investment in network technology upgrades during a period of lower sales and Adjusted EBITDA.299 As defined in the non-GAAP financial measures and ratios section of the MD&ALEGAL PROCEEDINGSNeither BGSI,nor any of its subsidiaries are involved in any legal proc

278、eedings which are material in any respect.RELATED PARTY TRANSACTIONS In certain circumstances the Company has entered into property lease arrangements where an employee of the Company is the landlord.In these instances,the Company assumes these property lease arrangements initially in connection wit

279、h an acquisition.The property leases for these locations do not contain any significant non-standard terms and conditions that would not normally exist in an arms length relationship,and BGSI has determined that the terms and conditions of the leases are representative of fair market rent values.The

280、 following are the lease payment amounts for facilities under lease with related parties(in thousands of U.S.dollars):LandlordAffiliated Person(s)LocationLeaseExpiresDecember 31,2024December 31,2023Gerber Building No.1 PtnrpTimothy ODaySouth Elgin,IL2029105 103 FINANCIAL INSTRUMENTS In order to limi

281、t the variability of earnings due to the foreign exchange translation exposure on the income and expenses of the Canadian operations,the Company may at times enter into foreign exchange contracts.These contracts are marked to market monthly with unrealized gains and losses included in earnings.The C

282、ompany did not have any such contracts in place during 2024 or 2023.Transactional foreign currency risk exists in limited circumstances where U.S.denominated cash is received in Canada.The Company monitors U.S.denominated cash flows to be received in Canada and evaluates whether to use forward forei

283、gn exchange contracts.No such foreign exchange contracts were used during 2024 or 2023.30CRITICAL ACCOUNTING ESTIMATES AND JUDGMENTSEstimates and judgments are continually evaluated and are based on historical experience and other factors,including expectations of future events that are believed to

284、be reasonable under the circumstances.Critical accounting estimates BGSI makes estimates,including the assumptions applied therein,concerning the future.The resulting accounting estimates will,by definition,seldom equal the related actual results.The estimates and assumptions that have a significant

285、 risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year are addressed below.Impairment of Goodwill and Intangible AssetsWhen testing goodwill and intangibles for impairment,BGSI uses a five year forward looking discounted cash flow of t

286、he cash generating unit(“CGU”)or group of CGUs to which the asset relate.An estimate of the recoverable amount is then calculated as the higher of an assets fair value less costs to sell and value in use(being the present value of the expected future cash flows of the relevant asset or CGU).An impai

287、rment loss is recognized for the amount by which the assets carrying amount exceeds its recoverable amount.The methods used to value intangible assets and goodwill require critical estimates to be made regarding the future cash flows and useful lives of the intangible assets.Goodwill and intangible

288、asset impairments,when recognized,are recorded as a separate charge to earnings,and could materially impact the operating results of the Company for any particular accounting period.Impairment of Other Long-lived AssetsBGSI assesses the recoverability of its long-lived assets,other than goodwill and

289、 intangibles,after considering the potential impairment indicated by such factors as business and market trends,the Companys ability to transfer the assets,future prospects,current market value and other economic factors.In performing its review of recoverability,management estimates the future cash

290、 flows expected to result from the use of the assets and their potential disposition.If the discounted sum of the expected future cash flows is less than the carrying value of the assets generating those cash flows,an impairment loss would be recognized based on the excess of the carrying amounts of

291、 the assets over their estimated recoverable value.The underlying estimates for cash flows include estimates for future sales,gross margin rates and operating expenses.Changes which may impact these estimates include,but are not limited to,business risks and uncertainties and economic conditions.To

292、the extent that managements estimates are not realized,future assessments could result in impairment charges that may have a material impact on the Companys consolidated financial statements.Business CombinationsFair value of assets acquired and liabilities assumed in a business combination is estim

293、ated based on information available at the date of acquisition and involves considerable judgment in determining the fair values assigned to property,plant and equipment and intangible assets acquired and liabilities assumed on acquisition.The determination of these fair values involves analysis inc

294、luding the use of discounted cash flows,estimated future margins,future growth rates,market rents and capitalization rates.There is estimation in this analysis and actual results could differ from estimates.Fair Value of Financial InstrumentsBGSI has applied discounted cash flow methods to establish

295、 the fair value of certain financial assets and financial liabilities recorded on the Consolidated Statement of Financial Position,as well as disclosed in the notes to the consolidated financial statements.BGSI also establishes mark-to-market valuations for derivative instruments,which are assumed t

296、o represent the current fair value of these instruments.These valuations rely on assumptions regarding interest and exchange rates as well as other economic indicators,which at the time of establishing the fair value for disclosure,have a high degree of uncertainty.Unrealized gains or losses on thes

297、e derivative financial instruments may not be realized as markets change.31Income TaxesBGSI is subject to income tax in several jurisdictions and estimates are used to determine the provision for income taxes.During the ordinary course of business,there are transactions and calculations for which th

298、e ultimate tax determination is uncertain.As a result,the Company recognizes tax liabilities based on estimates of whether additional taxes and interest will be due.Uncertain tax liabilities may be recognized when,despite the Companys belief that its tax return positions are supportable,the Company

299、believes that certain positions are likely to be challenged and may not be fully sustained upon review by tax authorities.The Company believes that its accruals for tax liabilities are adequate for all open audit years based on its assessment of many factors including past experience and interpretat

300、ions of tax law.To the extent that the final tax outcome of these matters is different than the amounts recorded,such differences will impact income tax expense in the period in which such determination is made.Critical judgments in applying the entitys accounting policiesDeferred Tax AssetsThe asse

301、ssment of the probability of future taxable income in which deferred tax assets can be utilized is based on BGSIs latest forecasts which are adjusted for significant non-taxable income and expenses and specific limits to the use of any unused tax loss or credit.The tax rules in the numerous jurisdic

302、tions in which BGSI operates are also carefully taken into consideration.If a positive forecast of taxable income indicates the probable use of a deferred tax asset,that deferred tax asset is recognized in full.The recognition of deferred tax assets that are subject to certain legal or economic limi

303、ts or uncertainties is assessed individually by management based on the specific facts and circumstances.The judgments inherent in these assessments are subject to uncertainty and if changed could materially affect the BGSIs assessment of its ability to realize the benefit of these tax assets.CHANGE

304、S IN ACCOUNTING POLICIESAdoption of new and amended IFRS Accounting StandardsThe IASB amendments to IAS 1-Presentation of Financial Statements(Classification of liabilities as Current or Non-Current and Non-current Liabilities with Covenants),IFRS 16-Leases(Lease Liability in a Sale and Leaseback)an

305、d IAS 7-Statement of Cash Flows and IFRS 7-Financial Instruments:Disclosures Supplier Finance Arrangements are effective for the annual periods beginning on or after January 1,2024.The Company assessed the impact of the amendments to the above standards and they did not have a material impact on the

306、 Companys financial statements.The May 2023 IASB amendment to IAS 12 Income Taxes requires entities to disclose information relating to income taxes arising from implementation of Pillar Two Model Rules published by the Organization for Economic Co-Operation and Development.The amendments are effect

307、ive for annual reporting periods beginning on or after January 1,2023.For the year ended December 31,2024,the Company has assessed the impact of Pillar Two and continues to monitor legislative developments in relevant jurisdictions.Based on the Companys assessment and the enacted or substantively en

308、acted tax rates in the jurisdictions in which it operates,the Company does not expect a material exposure to Pillar Two top-up taxes.The Company has also assessed the applicability of the OECDs transitional safe harbor rules and,where applicable,expects to rely on these provisions to reduce complian

309、ce complexity.The Company will continue to evaluate potential future impacts as jurisdictions finalize their Pillar Two legislation and implementation guidance.Future Accounting PoliciesThe following accounting standards under IFRS Accounting Standards have been issued or amended that are not mandat

310、ory for the current period and have not been applied to the consolidated financial statements.IFRS 18-Presentation and Disclosure in Financial StatementsThe new standard replaces IAS 1-Presentation of Financial Statements while carrying forward many of the requirements in IAS 1.IFRS 18 sets out the

311、requirements for the presentation and disclosure of information in general purpose financial statements to help ensure they provide relevant information that faithfully represents an entitys assets,liabilities,equity,income and expenses.It introduces requirements to classify income and expenses into

312、 categories and defined subtotals in the 32statement of earnings,provide disclosures on management-defined performance measures(“MPMs”),along with enhanced guidance on aggregation and disaggregation of information.BGSI is required to apply IFRS 18 for annual reporting periods on or after January 1,2

313、027 with early adoption permitted.BGSI is currently assessing the impact of this standard on its financial statements.Amendments to IFRS 9 and IFRS 7-Classification and Measurement of Financial InstrumentsThe amendments deal with the recognition and derecognition of financial liability at settlement

314、 date and when settled through an electronic cash transfer system,further guidance regarding the classification of financial assets,and additional disclosure requirements for financial instruments with contingent features and equity instruments classified at FVTOCI.These amendments are effective for

315、 the annual reporting periods beginning on or after January 1,2026 with early adoption permitted.BGSI is currently assessing the impact of the these amendments on its financial statements.CERTIFICATION OF DISCLOSURE CONTROLSManagements responsibility for financial information contained in this Annua

316、l Report is described on page 48.In addition,BGSIs Audit Committee of the Board of Directors has reviewed this Annual Report,and the Board of Directors has reviewed and approved this Annual Report prior to its release.BGSI is committed to providing timely,accurate and balanced disclosure of all mate

317、rial information about BGSI and to providing fair and equal access to such information.As of December 31,2024,BGSIs management evaluated the effectiveness of the design and operation of its disclosure controls and procedures,as defined under the rules adopted by the Canadian securities regulatory au

318、thorities.Disclosure controls are procedures designed to ensure that information required to be disclosed in reports filed with securities regulatory authorities is recorded,processed,summarized and reported on a timely basis,and is accumulated and communicated to BGSIs management,including the CEO

319、and the CFO,as appropriate,to allow timely decisions regarding required disclosure.BGSIs management,including the CEO and the CFO,does not expect that BGSIs disclosure controls will prevent or detect all misstatements due to error or fraud.Because of the inherent limitations in all control systems,a

320、n evaluation of controls can provide only reasonable,not absolute assurance,that all control issues and instances of fraud or error,if any,within BGSI have been detected.BGSI is continually evolving and enhancing its systems of controls and procedures.Based on the evaluation of disclosure controls,t

321、he CEO and the CFO have concluded that,subject to the inherent limitations noted above,BGSIs disclosure controls are effective in ensuring that material information relating to BGSI is made known to management on a timely basis,and is fairly presented in all material respects in this Annual Report.C

322、ERTIFICATION ON INTERNAL CONTROL OVER FINANCIAL REPORTINGManagement is responsible for the design and effectiveness of internal control over financial reporting in order to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for e

323、xternal purposes in accordance with Canadian generally accepted accounting principles which incorporates International Financial Reporting Standards for publicly accountable enterprises.BGSIs management,including the CEO and the CFO,does not expect that BGSIs internal control over financial reportin

324、g will prevent or detect all misstatements due to error or fraud.Because of the inherent limitations in all control systems,an evaluation of controls can provide only reasonable,not absolute assurance,that all control issues and instances of fraud or error,if any,within BGSI have been detected.BGSI

325、is continually evolving and enhancing its systems of internal controls over financial reporting.The CEO and CFO of BGSI have evaluated the design and effectiveness of BGSIs internal control over financial reporting as at the end of the period covered by the annual filings and have concluded that,sub

326、ject to the inherent limitations noted above,the controls are sufficient to provide reasonable assurance.33BUSINESS RISKS AND UNCERTAINTIESThe following information is a summary of certain risk factors relating to the business of BGSI and its subsidiaries,and is qualified in its entirety by referenc

327、e to,and must be read in conjunction with,the detailed information appearing elsewhere in this Annual Report and the documents incorporated by reference herein.BGSI and its subsidiaries are subject to certain risks inherent in the operation of the business.BGSI and its subsidiaries manage risk and r

328、isk exposures through a combination of management oversight,insurance,systems of internal controls and disclosures and sound operating policies and practices.The Board of Directors has the responsibility to identify the principal risks of BGSIs business and ensure that appropriate systems are in pla

329、ce to manage these risks.The Audit Committee has the responsibility to discuss with management BGSIs major financial risk exposures and the steps management has taken to monitor and control such exposures,including BGSIs risk assessment and risk management policies.In order to support these responsi

330、bilities,management has a risk and sustainability management committee which meets on an ongoing basis to evaluate and assess BGSIs risks.The process being followed by the risk and sustainability management committee is a systematic one which includes identifying risks;analyzing the likelihood and c

331、onsequence of risks;and then evaluating risks as to risk tolerance and control effectiveness.This approach stratifies risks into four risk categories as follows:Extreme Risks:Immediate/ongoing action is required involvement of senior management is required.Avoidance of the item may be necessary if r

332、isk reduction techniques are insufficient to address the risk.High Risks:Risk item is significant and management responsibility should be specified and appropriate action taken.Moderate Risks:Managed by specific monitoring or response procedures.Additional risk mitigation techniques could be conside

333、red if benefits exceed the cost.Low Risks:Management by routine procedures.No further action is required at this time.Risks can be reduced by limiting the likelihood or the consequence of a particular risk.This can be achieved by adjusting the Companys activities,implementing additional control/monitoring processes,or insuring/hedging against certain outcomes.Residual risk remains after mitigation