Boyd Group Income Fund reports 2006 year end results



    /NOT FOR DISTRIBUTION TO U.S. NEWSWIRE SERVICES OR FOR DISSEMINATION IN
    THE UNITED STATES./

    WINNIPEG, March 20 /CNW/ - Boyd Group Income Fund (TSX: BYD.UN) ("the
Fund") today reported its financial results for the three and twelve-month
periods ended December 31, 2006. The Fund's complete fiscal 2006 financial
statements and MD&A will be filed on www.sedar.com on March 21, 2007.
    For the three months ended December 31, 2006, revenue increased 5.3% to
$46.9 million compared to revenue of $44.5 million in the fourth quarter of
2005, after adjusting for discontinued operations. The increase in revenue was
attributable to new start-up collision repair centers, new glass initiatives
in the U.S developed in late 2005 and early 2006, and same store sales
increases. Excluding the impact of foreign currency translation attributable
to sales generated from the Boyd Group's U.S. operations, overall same store
sales increased $1.2 million or 2.8% during the fourth quarter of 2006, with
both Canadian and U.S. operations reporting same store sales increases.
    For the year ended December 31, 2006, revenue increased to $183.6 million
from $182.2 million in 2005, after adjusting for discontinued operations.
Sales growth was primarily attributable to new revenue from 2005 acquisitions
and new start-up collision repair centres. The new start-ups and acquisitions
include the results of any and all new collision repair facilities which
commenced operations during 2005 or 2006, the acquisition of Gerber National
Glass Services ("GNGS") on January 28, 2005, and all of the new glass
initiatives started during 2005 in the Arizona, Georgia, Nevada and Washington
markets. During 2006, the Boyd Group's same store sales declined $6.4 million
or 3.8% when compared to 2005. Excluding the impact of foreign currency
translation, overall same store sales increased $0.7 million or 0.4% in 2006.
    Earnings before interest, income taxes, depreciation and amortization
("EBITDA")(1) for the fourth quarter of 2006 totalled $2.6 million, or 5.5% of
sales, compared to EBITDA of $3.1 million, or 7.0% of sales, in the fourth
quarter of 2005. This decrease in EBITDA was primarily the result of lower
amortization of prepaid rebates in the amount of $0.3 million and lower
operating margins in the U.S.
    EBITDA(1) for the year ended December 31, 2006 totaled $10.5 million or
5.7% of sales, compared to EBITDA(1) of $12.7 million or 7.0% of sales for
2005. The decline in EBITDA(1) was primarily attributable to a $1.3 million
reduction in the amortization of new replacement unearned rebates received in
2006 and lower operating margins in the U.S.
    "In accordance with the Fund's policy, we completed our annual goodwill
impairment testing during the fourth quarter of 2006 and took a conservative
approach, which resulted in the write-down of $17.8 million of goodwill
associated with our Washington, Georgia, Nevada and Illinois operations. This
write-down is non-cash in nature and does not impact our bank debt covenants,"
said Terry Smith, CEO of Boyd Group. "Looking at our preliminary results for
the first quarter of 2007, we are seeing improvement in a number of key areas
and we are optimistic that we have taken actions and created conditions that
will allow us to achieve a gradual but steady improvement in financial
performance throughout 2007."
    Net loss for the fourth quarter of 2006, after giving effect to the
non-controlling interest, discontinued operations, and a $17.9 million
write-down to goodwill and an intangible asset, was $17.5 million or ($1.69)
per fully diluted unit compared to a net loss of $1.0 million or ($0.12) per
fully diluted unit in the fourth quarter of 2005.
    The Fund's net loss for the year ended December 31, 2006, after giving
effect to the non-controlling interest, discontinued operations, and a
write-down to goodwill in the amount of $20.2 million, was $21.9 million or
($2.12) per fully diluted unit compared to net income of $1.1 million or $0.11
per fully diluted unit in 2005. The net loss in 2006 resulted primarily from
the write-down of goodwill in the Washington, Georgia, Nevada and Illinois
markets as well as impacts associated with the Boyd Group's replacement
trading partner arrangements, losses from discontinued operations and U.S.
losses for which no tax benefit was recorded. Foreign exchange gains realized
on the repayment of U.S. dollar denominated Canadian senior bank debt and U.S.
dollar denominated trading partner rebates during the year partially offset
some of the losses.
    On a segmented basis, sales in Canada in the fourth quarter of 2006
totalled $16.3 million, an increase of 6.3% compared to the fourth quarter a
year ago. Sales in Canada for the year ended December 31, 2006, increased 7.1%
to $65.0 million compared to $60.7 million in 2005. Sales increases in Canada
for both the fourth quarter and year ended December 31, 2006, resulted from
same store sales growth, with increases reported in all four western
provinces.
    Sales in the U.S. in the fourth quarter of 2006 increased 4.5% to
$30.5 million compared to $29.2 million in the fourth quarter of 2005. Sales
growth in the U.S. during the quarter resulted from $2.0 million in new sales
from three new collision repair facilities started up during 2006 and the
additional glass revenues realized in the Arizona, Nevada, Georgia and
Washington markets utilizing the synergies of GNGS. Same store sales in the
U.S. declined $0.6 million or 2.0% compared to the fourth quarter of 2005.
Translation of U.S. revenues at a weaker U.S. dollar exchange rate, relative
to the Canadian dollar, accounted for $0.9 million of the total decline in
U.S. same store sales. Excluding the impact of foreign currency translation,
acquisitions, start-ups and new glass initiatives, U.S. same store sales
increased by $0.3 million or 1.0%, compared to the fourth quarter a year ago.
    Sales in the U.S. for the year ended December 31, 2006, declined to
$118.6 million from $121.5 million in 2005. Sales in the U.S. included new
sales of $7.8 million, from GNGS and three Illinois area start-ups commenced
during 2005 as well as three new Washington and Arizona start-ups in 2006 and
new glass revenues generated in the Arizona, Georgia, Nevada and Washington
markets. Same store sales in the U.S. declined $10.7 million or 9.9% when
compared to the same period in the prior year. Translation of U.S. revenues at
a weaker U.S. dollar exchange rate, relative to the Canadian dollar, accounted
for $7.1 million or 6.5% of this decline. Excluding the impact of foreign
currency translation, GNGS, collision and glass start-ups, U.S. same store
sales declined $3.6 million or 3.4% compared to the same period in the prior
year.
    The Fund had total debt outstanding at December 31, 2006 of
$41.0 million, comprised of: $6.5 million in bank indebtedness; $4.2 million
of Canadian senior bank term debt; $15.1 million of U.S. senior bank term
debt; $0.4 million of supplier debt; $0.7 million of vendor loans;
$1.4 million of obligations under capital lease; and, $12.7 million in
subordinate convertible debentures and exchangeable notes. This compares to
$39.8 million in total debt outstanding as at December 31, 2005.

    Distributable Cash(2)
    On December 15, 2005, the Fund suspended cash distributions to
unitholders until further notice. The Trustees of the Fund and senior
management of the Boyd Group determined that a temporary suspension of
distributions was in the best interests of unitholders as it would allow the
Boyd Group to strengthen its balance sheet and improve its cash position and
financial flexibility. Based on current financial performance, the Fund does
not anticipate reinstating distributions within the next 6 months. Instead,
Boyd Group will continue to use its cash flow from operations to strengthen
its balance sheet. At the end of this time period, management of the Company
and the Trustees of the Fund will consider resuming distributions at
conservative and sustainable levels.
    On October 31, 2006, the Department of Finance (Canada) announced the
"Tax Fairness Plan" whereby the income tax rules applicable to publicly traded
trusts (other than certain real estate investment trusts) and publicly traded
partnerships will be significantly modified. Under the proposed plan,
distributions made by income trusts and publicly traded partnerships will be
taxed in a manner similar to income earned by and dividends paid by a
corporation. The plan, if adopted, will not become effective until the 2011
taxation year for trusts, such as the Boyd Group Income Fund, that were
publicly traded prior to November 1, 2006. The Fund is currently considering
these proposals and the possible impact they will have on the Fund and its
unitholders, but is unable make an estimate of the impact at this time. The
Trustees of the Fund and senior management of the Boyd Group continue to
monitor this development.

    2006 Year End Results Conference call & Web cast
    Management of the Boyd Group Income Fund will host a conference call to
discuss the Fund's 2006 fourth quarter and year end financial results on
March 21, 2007 at 10:00 a.m. EDT. The conference call will be webcast live at
www.boydgroup.com and archived for 90 days. A taped replay of the conference
call will also be available until Wednesday, March 28th at midnight by calling
1-877-289-8525 or 416-640-1917, reference number 21219979 followed by the
number sign.

    
    (1)(2) EBITDA and distributable cash are not recognized measures
           under Canadian generally accepted accounting principles
           (GAAP). Management believes that in addition to revenue, net
           earnings and cash flows, distributable cash and EBITDA are
           useful supplemental measures as they provide investors with an
           indication of earnings from operations and cash available for
           distribution, both before and after debt service, capital
           expenditures and income tax. Investors should be cautioned,
           however, that EBITDA and distributable cash should not be
           construed as an alternative to net earnings determined in
           accordance with GAAP as an indicator of the Fund's
           performance. Boyd's method of calculating distributable cash
           may differ from other public issuers and, accordingly, may not
           be comparable to similar measures used by other issuers. For a
           detailed explanation of how the Fund's distributable cash is
           calculated, please refer to the Fund's MD&A filing for the
           three months ended September 30, 2006, which can be accessed
           via the SEDAR Web site (www.sedar.com).
    

    About The Boyd Group Inc.
    The Boyd Group Inc. is the largest operator of collision repair centres
in Canada and among the largest in North America. The company operates
locations in the four western Canadian provinces principally under the trade
names Boyd Autobody & Glass and Service Collision Repair, as well as in six
U.S. states principally under the trade name Gerber Collision & Glass. The
company also operates Gerber National Glass Services, an auto glass repair and
replacement referral business with affiliated service providers throughout the
United States. For more information on The Boyd Group Inc. or Boyd Group
Income Fund, please visit our Web site at www.boydgroup.com.

    About The Boyd Group Income Fund
    The Boyd Group Income Fund is an unincorporated, open-ended mutual fund
trust created for the purposes of acquiring and holding certain investments,
including a majority interest in The Boyd Group Inc. and its subsidiaries.

    This press release contains forward-looking statements, other than
historical facts, which reflect the view of the Fund's management with respect
to future events. Such forward-looking statements reflect the current views of
the Fund's management and are made on the basis of information currently
available. Although management believes that its expectations are reasonable,
it can give no assurance that such expectations will prove to be correct. The
forward-looking statements contained herein are subject to these factors and
other risks, uncertainties and assumptions relating to the operations, results
of operations and financial position of the Fund. The Fund assumes no
obligation to update the forward-looking statements or to update the reasons
why actual results could differ from those contemplated by the forward-looking
statements.

    
    CONSOLIDATED BALANCE SHEETS
    December 31,
    -------------------------------------------------------------------------
                                                         2006           2005
    -------------------------------------------------------------------------
    Assets
    Current assets:
      Cash                                      $   4,090,443  $   1,076,588
      Accounts receivable                          19,086,709     19,450,519
      Rebates receivable                              431,703              -
      Inventory                                     4,428,595      3,995,960
      Prepaid expenses                              1,468,077      1,331,884
    -------------------------------------------------------------------------
                                                   29,505,527     25,854,951
    Note receivable                                   382,901        383,098
    Property, plant and equipment                  17,616,705     18,086,803
    Future income tax asset                         2,452,111      3,749,522
    Deferred costs                                  1,292,866      1,727,462
    Goodwill                                       16,586,721     36,774,687
    Intangible assets                              16,816,030     18,462,613
    -------------------------------------------------------------------------
                                                $  84,652,861  $ 105,039,136
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    Liabilities and Equity
    Current liabilities:
      Bank indebtedness                         $  10,575,931  $   2,387,260
      Accounts payable and accrued
       liabilities                                 19,709,568     23,761,807
      Income taxes payable                             34,064         64,358
      Current portion of long-term debt             3,029,977      1,652,451
      Current portion of obligations under
       capital leases                                 279,985        641,851
    -------------------------------------------------------------------------
                                                   33,629,525     28,507,727
    Long-term debt                                 17,362,426     22,179,553
    Obligations under capital leases                1,107,168      1,254,664
    Convertible debt                               12,695,065     12,699,584
    Unearned rebates                               13,417,316     10,137,286
    Non-controlling interest                          493,125        446,915
    -------------------------------------------------------------------------
                                                   78,704,625     75,225,729
    -------------------------------------------------------------------------

    Equity
      Unitholders' capital                         53,059,819     53,130,354
      Shareholders' capital                            58,362         66,003
      Contributed surplus                             107,067         78,352
      Warrants                                        421,500        421,500
      Deficit                                     (37,509,258)   (15,599,879)
      Cumulative translation adjustment           (10,189,254)    (8,282,923)
    -------------------------------------------------------------------------
                                                    5,948,236     29,813,407
    -------------------------------------------------------------------------
                                                $  84,652,861  $ 105,039,136
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------



    CONSOLIDATED STATEMENTS OF DEFICIT
    Years Ended December 31,
    -------------------------------------------------------------------------
                                                         2006           2005
    -------------------------------------------------------------------------
    Deficit, beginning of year                  $ (15,599,879) $  (9,232,183)

    Net (loss) earnings for year                  (21,909,379)     1,050,666

    Dividends on BGHI Class A common shares                 -       (611,977)

    Distributions to unitholders                            -     (6,806,385)
    -------------------------------------------------------------------------
    Deficit, end of year                        $ (37,509,258) $ (15,599,879)
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------



    CONSOLIDATED STATEMENTS OF (LOSS) EARNINGS
    Years Ended December 31,
    -------------------------------------------------------------------------
                                                         2006           2005
    -------------------------------------------------------------------------
    Sales                                       $ 183,620,692  $ 182,194,646
    Cost of sales                                 104,350,045     98,336,899
    -------------------------------------------------------------------------
    Gross margin                                   79,270,647     83,857,747
    -------------------------------------------------------------------------
    Operating expenses                             71,754,378     71,438,049
    Foreign exchange gains                         (2,934,111)      (281,154)
    Depreciation and amortization                   3,545,985      3,950,038
    Amortization of deferred costs and other
     intangible assets                              2,359,467      2,110,051
    Interest expense                                3,163,838      2,992,944
    Interest income                                  (143,679)       (86,537)
    Write down of goodwill and intangible asset    20,197,184      2,037,207
    -------------------------------------------------------------------------
                                                   97,943,062     82,160,598
    -------------------------------------------------------------------------
    (Loss) earnings before income taxes and
     non-controlling interest                     (18,672,415)     1,697,149
    -------------------------------------------------------------------------
    Income tax expense (recovery)
    Current                                           390,646        474,088
    Future                                          1,297,607       (506,561)
    -------------------------------------------------------------------------
                                                    1,688,253        (32,473)
    -------------------------------------------------------------------------
    Net (loss) earnings before non-controlling
     interest                                     (20,360,668)     1,729,622
    Non-controlling interest                          (45,410)       234,676
    -------------------------------------------------------------------------
    Net (loss) earnings from continuing
     operations                                   (20,406,078)     1,964,298
    Loss from discontinued operations              (1,503,301)      (913,632)
    -------------------------------------------------------------------------
    Net (loss) earnings                         $ (21,909,379) $   1,050,666
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    Weighted average number of units and
     Class A common shares outstanding             10,342,630      9,614,116
    Basic (loss) earnings per unit from
     continuing operations                      $      (1.973) $       0.204
    Loss per unit from discontinued operations         (0.145)        (0.095)
    -------------------------------------------------------------------------
    Basic (loss) earnings per unit and Class A
     common share                               $      (2.118) $       0.109
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    Diluted (loss) earnings per unit from
     continuing operations                      $      (1.973) $       0.200
    Loss per unit from discontinued operations         (0.145)        (0.093)
    -------------------------------------------------------------------------
    Diluted (loss) earnings per unit and
     Class A common share                       $      (2.118)        $0.107
    -------------------------------------------------------------------------



    CONSOLIDATED STATEMENTS OF CASH FLOWS
    Years Ended December 31,
    -------------------------------------------------------------------------
                                                         2006           2005
    -------------------------------------------------------------------------
    CONTINUING OPERATIONS
    Cash flows from operating activities
      Net (loss) earnings from continuing
       operations                               $ (20,406,078) $   1,964,298
      Items not affecting cash
        Non-controlling interest                       45,410      (234,676)
        Write down of goodwill and intangible
         asset                                     20,197,184      2,037,207
        Future income taxes                         1,297,607       (506,561)
        Amortization of deferred costs and other
         intangible assets                          2,359,467      2,110,051
        Depreciation and amortization               3,545,985      3,950,038
        Amortization of unearned rebates, net of
         settlement amounts                           662,283     (2,702,023)
        Unit option compensation expense               17,594         11,452
        Loss (gain) on disposal of equipment           91,656        (10,139)
    -------------------------------------------------------------------------
                                                    7,811,108      6,619,647
      Changes in non-cash working capital items    (4,378,264)        95,469
    -------------------------------------------------------------------------
                                                    3,432,844      6,715,116
    -------------------------------------------------------------------------
    Cash flows provided by (used in) financing
     activities
      Redemption of fund units                         (3,114)             -
      Issue of fund units                                   -      4,594,051
      Issue costs                                           -        (22,799)
      Increase in obligations under long-term
       debt                                        14,935,700      4,040,226
      Repayment of long-term debt                 (18,228,128)    (2,018,422)
      Increase (decrease) in bank indebtedness      8,188,671     (1,642,046)
      Repayment of obligations under capital
       leases                                      (1,493,898)      (761,419)
      Unit price guarantee                           (244,180)       (48,355)
      Dividends received on Class B common
       shares                                               -        722,894
      Dividends paid on Class A and B common
       shares                                               -     (1,645,339)
      Distributions paid to unitholders                     -     (7,545,339)
      Increase in unearned rebates                 13,289,382        316,927
      Repayment of unearned rebates               (11,801,274)             -
      Trading partner conversion costs               (913,391)             -
      Decrease in non-controlling interest                  -        (71,316)
      Decrease in other long-term liabilities               -       (187,124)
      Collection of notes receivable                        -        245,550
      Increase in financing costs                    (233,922)      (187,520)
      Collection of rebates receivable                802,940              -
    -------------------------------------------------------------------------
                                                    4,298,786     (4,210,031)
    -------------------------------------------------------------------------
    Cash flows used in investing activities
      Proceeds on sale of equipment                   127,302        130,349
      Equipment purchases and facility
       improvements                                (1,316,863)    (1,361,522)
      Acquisition and development of businesses    (1,196,256)    (1,427,055)
      Deferred costs                                 (297,556)      (461,419)
      Acquisition of other assets                      (6,000)    (3,135,728)
    -------------------------------------------------------------------------
                                                   (2,689,373)    (6,255,375)
    -------------------------------------------------------------------------
    Foreign exchange                               (1,606,798)       265,051
    -------------------------------------------------------------------------
    Cash received upon combining of Boyd Group
     Holdings Inc.                                          -         38,751
    -------------------------------------------------------------------------
      Net increase (decrease) in cash position
       used in continuing operations                3,435,459     (3,446,488)
    -------------------------------------------------------------------------
    DISCONTINUED OPERATIONS
      Operating activities                           (524,398)      (137,168)
      Financing activities                             (1,680)             -
      Investing activities                            104,474         52,390
    -------------------------------------------------------------------------
      Net decrease in cash position from
       discontinued operations                       (421,604)       (84,778)
    -------------------------------------------------------------------------
    Net increase (decrease) in cash position        3,013,855     (3,531,266)
    Cash, beginning of period                       1,076,588      4,607,854
    -------------------------------------------------------------------------
    Cash, end of period                         $   4,090,443  $   1,076,588
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    Income taxes paid                           $     421,973  $     359,524
    -------------------------------------------------------------------------
    Interest paid                               $   3,759,635  $   2,538,706
    -------------------------------------------------------------------------
    

    %SEDAR: 00018929E




For further information:

For further information: Terry Smith, CEO, Tel: (204) 895-1244,
terry.smith@boydgroup.com; Bruce Wigle, Investor Relations, Tel: (416)
815-0700 or toll free 1-800-385-5451 (ext.228), bwigle@equicomgroup.com; Dan
Dott, Chief Financial Officer, Tel: (204) 895-1244, dan.dott@boydgroup.com


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