Q4 2025 Boyd Group Services Inc Earnings Call

March 18, 2026

Speaker #3: After the speaker's remarks, there will be a question and answer session. If you'd like to ask a question during this time, simply press star, followed by the number one on your telephone keypad.

Speaker #3: If you would like to withdraw your question, again, press star one. Thank you. I would now like to turn the call over to Linda Funk, VP, Finance.

Speaker #3: You may begin.

Speaker #2: Good morning, everyone. Welcome to the Boyd Group Services, Inc.'s 2025 fourth quarter results conference call. Listeners are reminded that certain matters discussed in today's conference call or answers that may be given to questions asked could constitute forward-looking statements that are subject to risks and uncertainties relating to Boyd's future financial or business performance.

Linda Funk: Good morning, everyone. Welcome to the Boyd Group Services Inc.'s 2025 Q4 results conference call. Listeners are reminded that certain matters discussed in today's conference call or answers that may be given to questions asked could constitute forward-looking statements that are subject to risks and uncertainties relating to Boyd's future financial or business performance. Actual results could differ materially from those anticipated in these forward-looking statements. The risk factors that may affect results are detailed in Boyd's annual information form, other periodic filings, and registration statements, and you can access these documents at SEDAR's database found at sedarplus.ca and EDGAR at sec.gov. I'd like to remind everyone that this conference call is being recorded today, Wednesday, 18 March 2026. I would now like to introduce Mr. Brian Kaner, President and Chief Executive Officer of Boyd Group Services Inc. Please go ahead, Mr. Kaner.

Speaker #2: Actual results could differ materially from those anticipated in these forward-looking statements. The risk factors that may affect results are detailed in Boyd's annual information form and other periodic filings and registration statements, and you can access these documents at CDAR's database found at cdarplus.ca and edgar@sec.gov.

Speaker #3: I'd like to remind everyone that this conference call is being recorded today, Wednesday, March 18th, 2026. I would now like to introduce Mr. Brian Kaner, President and Chief Executive Officer of Boyd Group Services, Inc. Please go ahead, Mr. Kaner.

Speaker #4: Good morning, everyone, and thank you for joining us on today's call. On the call with me today is Jeff Murray, our Executive Vice President and Chief Financial Officer.

Brian Kaner: Good morning, everyone, and thank you for joining us on today's call. On the call with me today is Jeff Murray, our Executive Vice President and Chief Financial Officer. We released our 2025 Q4 and year-end results before markets opened today. You can access our news release as well as our complete financial statements and management discussion and analysis on our website at boydgroup.com. Our news release, financial statements, and MD&A have also been filed on SEDAR+ and EDGAR this morning. On today's call, we will discuss the financial results for the three-month period and the year ended December 31, 2025, provide a general business update, and discuss our long-term growth strategy. We will then open the call up for questions. Our 2025 fiscal year was both busy and highly successful for Boyd.

Speaker #4: We released our 2025 fourth quarter and year-end results before markets opened today. You can access our news release as well as our complete financial statements and management discussion and analysis on our website at boydgroup.com.

Speaker #4: Our news release financial statements and MDNA have also been filed on CDAR Plus and Edgar this morning. On today's call, we will discuss the financial results for the three-month period and the year-ended December 31st, 2025.

Speaker #4: Provide a general business update and discuss the long-term growth strategy. We will then open the call up for questions. Our 2025 fiscal year was both busy and highly successful for Boyd.

Speaker #4: In the first half of the year, we focused on implementing a number of key initiatives, including Project 360, an enhanced go-to-market strategy, and a more localized customer service approach.

Brian Kaner: In the first half of the year, we focused on implementing a number of key initiatives, including Project 360, an enhanced go-to-market strategy, and a more localized customer service approach. As we moved into the second half, we saw strong execution on these initiatives, driving meaningful adjusted EBITDA, margin expansion, and industry outperformance. Combined with the continued improvement in repairable claims, this supported a return to positive same-store sales in the second half of the year, a trend that has continued into early 2026. Alongside these operational improvements, we also took advantage of an improving acquisition environment and our strong balance sheet to complete four small MSO acquisitions and announced the acquisition of Joe Hudson's Collision Center.

Speaker #4: As we moved into the second half, we saw strong execution on these initiatives, driving meaningful adjusted EBITDA, margin expansion, and industry outperformance. Combined with the continued improvement in repairable claims, this supported a return to positive same-store sales in the second half of the year, a trend that has continued into early 2026.

Speaker #4: Alongside these operational improvements, we also took advantage of an improving acquisition environment and our strong balance sheet to complete four small MSO acquisitions and announce the acquisition of Joe Hudson's collision center.

Speaker #4: We also listed our shares on the New York Stock Exchange and completed two unsecured note offerings, important milestones in Boyd's evolution that we expect to be will broaden our access to U.S.

Brian Kaner: We also listed our shares on the New York Stock Exchange and completed two unsecured note offerings, important milestones in Boyd's evolution that will broaden our access to US investors and further strengthen our capital markets profile. Before I discuss our results in more detail, I want to thank our employees and senior leadership team. Their dedication and hard work are the foundation of our success, and these results are a direct reflection of their commitment. Turning to our financial performance, in 2025, we delivered CAD 3.1 billion in revenue, representing growth of 2.4% year-over-year.

Speaker #4: investors and further strengthen our capital markets profile. Before I discuss our results in more detail, I want to thank our employees and senior leadership team.

Speaker #4: Their dedication and hard work are the foundation of our success, and these results are a direct reflection of their commitment. Turning to our financial performance, in 2025, we delivered $3.1 billion in revenue, representing growth of 2.4% year over year.

Speaker #4: An adjusted EBITDA increased by 12.4% with adjusted EBITDA margins expanding by 110 basis points to 12%, driven by the successful execution of Project 360, our cost transformation plan, and the internalization of Scania and Calibration.

Brian Kaner: Adjusted EBITDA increased by 12.4%, with adjusted EBITDA margins expanding by 110 basis points to 12%, driven by the successful execution of Project 360, our cost transformation plan, and the internalization of scanning and calibration. We exited the year with strong momentum. In Q4, we generated our second consecutive quarter of positive same-store sales growth of 2.2% and grew EBITDA by 24.2% year over year. Our EBITDA margin expanded to 13.1% in Q4, up from 11.1% in Q4 of 2024.

Speaker #4: We exited the year with strong momentum. In the fourth quarter, we generated our second consecutive quarter of positive same-store sales growth of 2.2% and grew EBITDA by 24.2% year over year.

Speaker #4: Our EBITDA margin expanded to 13.1% in the fourth quarter, up from 11.1% in the fourth quarter of 2024. As we've discussed on previous calls, throughout 2025, we saw consistent improvement in several of the industry headwinds that had been negatively impacting repairable claims.

Brian Kaner: As we've discussed on previous calls, throughout 2025, we saw consistent improvement in several of the industry headwinds that had been negatively impacting repairable claims, namely moderation of insurance premium growth and increasing used vehicle prices. This resulted in a reduction in estimated declines in claims activity from 9 to 10% in Q1, down to 2 to 4% by Q4 of 2025. I'm pleased to report that this improvement has continued into 2026. Auto insurance premium growth is now running below CPI levels. Insurance carriers have implemented rate reductions, and used car prices are increasing.

Speaker #4: Namely, moderation of insurance premium growth in the increasing used vehicle prices, this resulted in a reduction in estimated declines in claims activity from 9 to 10 percent in the first quarter, down to 2 to 4 percent by the fourth quarter of 2025.

Speaker #4: I'm pleased to report that this improvement is continued into 2026. Auto insurance premium growth is now running below CPI levels; insurance carriers have implemented rate reductions, and used car prices are increasing.

Speaker #4: These improvements, combined with increased activity levels we've seen in our business since the end of the second quarter, give us confidence that the industry conditions continue to normalize.

Brian Kaner: These improvements, combined with increased activity levels we've seen in our business since the end of Q2, give us confidence that the industry conditions continue to normalize. In the early months of 2026, while winter storms benefited our northern regions, this benefit was partially offset by unusual storm activity in the south. These storms resulted in lower driving activity and therefore a short-term reduction in volume in our southern locations, including Joe Hudson's. As the quarter progressed, we've seen the volumes in the south normalize with overall same-store sales thus far tracking similar to Q4 levels. Throughout 2025, we also continued to expand our location footprint through the execution of our long-standing growth strategy. During the year, we opened 70 new locations, including 27 startup locations and 43 through acquisitions.

Speaker #4: In the early months of 2026, while winter storms benefited our northern regions, this benefit was partially offset by unusual storm activity in the south.

Speaker #4: These storms resulted in lower driving activity and therefore a short-term reduction in volume in our southern locations, including Joe Hudson's. As the quarter progressed, we've seen the volumes in the south normalize, with overall same-store sales thus far tracking similar to fourth-quarter levels.

Speaker #4: Throughout 2025, we also continue to expand our location footprint through the execution of our long-standing growth strategy. During the year, we opened 70 new locations including 27 startup locations in 43 through acquisitions.

Speaker #4: Looking ahead, we continue to have a robust pipeline of startup locations under development through 2026. We expect to open eight new locations in the first quarter, with an additional 24 locations in development for the remainder of the year.

Brian Kaner: Looking ahead, we continue to have a robust pipeline of startup locations under development through 2026. We expect to open 8 new locations in Q1, with an additional 24 locations in development for the remainder of the year. In addition, 2025 marked a return to MSO acquisitions for Boyd, as our strong balance sheet enabled us to capitalize on an improved acquisition landscape. In August, we completed our first small acquisition since 2021 with the acquisition of L&M Body Shop in Virginia. We also completed three additional MSO acquisitions in Q4 in Nevada, Hawaii, and Nova Scotia, with the Nova Scotia acquisition representing our initial entry into that province and underscores our commitment to continued growth in the Canadian market.

Speaker #4: In addition, 2025 marked a return to MSO acquisitions for Boyd. As our strong balance sheet enabled us to capitalize on an improved acquisition landscape, in August, we completed our first small acquisition since 2021 with the acquisition of L&M Body Shop in Virginia.

Speaker #4: We also completed three additional MSO acquisitions in the fourth quarter in Nevada, Hawaii, and Nova Scotia. With the Nova Scotia acquisition representing our initial entry into that province and underscores our commitment to continued growth in the Canadian market.

Speaker #4: Looking ahead, our pipeline for single shop and small MSO acquisition remains strong and will continue to complement our startup expansion. Our roadmap focuses on building density in our existing markets and achieving leading positions where we operate.

Brian Kaner: Looking ahead, our pipeline for single shop and small MSO acquisition remains strong and will complement our startup expansion. Our roadmap focuses on building density in our existing markets and achieving leading positions where we operate. Our goal is to establish a number one or two position in all of our markets, which strengthens our ability to serve our insurance company clients and its customers while driving long-term shareholder value through margin expansion and market share gains. Turning now to Joe Hudson's. We successfully closed the acquisition in early January, and the integration is progressing well and in line with our expectations, despite some softness in activity levels early in the quarter due to the unusual winter storm activity in the southern region. I've been very encouraged with the Joe Hudson's team.

Speaker #4: Our goal is to establish a number one or two position in all of our markets, which strengthens our ability to serve our insurance company clients and its customers while driving long-term shareholder value through margin expansion and market share gains.

Speaker #4: Turning now to Joe Hudson's, we successfully closed the acquisition in early January and the integration is progressing well and in line with our expectations despite some softness in activity levels early in the quarter due to the unusual winter storm activity in the southern region.

Speaker #4: It's been the Joe Hudson's team. From the outset, they have shown strong enthusiasm about joining Boyd, and the teams have worked well together, combining the strengths of both organizations as we continue to integrate and operate as one team.

Brian Kaner: From the outset, they have shown strong enthusiasm about joining Boyd, and the teams have worked well together, combining the strengths of both organizations as we continue to integrate and operate as one team. Our initial focus has been on converting Joe Hudson's location to Boyd's information technology platforms and branding. Similar to the successful rollout of our indirect staffing model in 2025, we began this process gradually to ensure operational stability. We initially converted six stores in our first week and have steadily increased the pace. We are now converting approximately 30 stores per week, which will remain the cadence until the process is completed. To date, we have converted approximately 44% of the stores and expect the remaining locations to be completed early in Q2 2026.

Speaker #4: Our initial focus has been on converting Joe Hudson's location to Boyd's information technology platforms and branding. Similar to the successful rollout of our indirect staffing model in 2025, we began this process gradually to ensure operational stability.

Speaker #4: We initially converted six stores in our first week and have steadily increased the pace. We are now converting approximately 30 stores per week, which will continue which will remain the cadence until the process is completed.

Speaker #4: To date, we have converted approximately 44% of the stores, and expect the remaining locations to be completed early in the second quarter of 2026.

Speaker #4: We have also begun realizing early synergy capture through direct procurement savings to date in the first quarter. Synergy realization is expected to accelerate once store conversions are complete.

Brian Kaner: We have also begun realizing early synergy capture through direct procurement savings to date in Q1. Synergy realization is expected to accelerate once store conversions are complete and we are able to fully leverage our scale and market position. We remain on track to achieve approximately 50% of the $35 to 45 million in expected synergies in 2026. Before turning the call over to Jeff, I'd like to provide a brief update on Project 360. When we launched the $100 million cost transformation plan in Q4 2024, we set ambitious targets. I'm pleased to report that we delivered on those targets in 2025. We realized $40 million in annualized cost savings in 2025 from the successful implementation of our indirect staffing model, as well as procurement savings.

Speaker #4: And we are able to fully leverage our scale and market achieve approximately 50% of the $35 to $45 million in expected synergies in fourth quarter of 2024, we set ambitious targets.

Speaker #4: I'm pleased to report that we delivered on those targets in 2025. We realized $40 million in annualized cost savings in 2025 from the successful implementation of our indirect staffing model as well as procurement savings.

Speaker #4: Going forward, 360. million cost transformation plan in the When we launched the $100 we will report Project 360 savings and Joe Hudson's synergies together.

Brian Kaner: Going forward, we will report Project 360 savings and Joe Hudson's synergies together as the team will oversee both initiatives. This team has successfully executed our Project 360 transformation since its launch and will now also lead the realization of Joe Hudson's synergies. As a result, these initiatives will be managed and disclosed as a single integrated cost program totaling $140 million, consisting of $100 million from Project 360 and approximately $40 million in synergies. To date, $40 million of the Project 360 savings were realized in 2025, with an additional $50 million expected in 2026 and the remaining $50 million to be realized between 2027 and 2029. With that, I'll turn the call over to Jeff.

Speaker #4: As the team will oversee both initiatives. This team has been has successfully executed our Project 360 transformation since its launch, and will now also lead the realization of Joe Hudson's synergies.

Speaker #4: As a result, these initiatives will be managed and disclosed as a single integrated cost program totaling $140 million. Consisting of $100 million from Project 360 and approximately $40 million in synergies.

Speaker #4: To date, $40 million of the Project 360 savings were realized in 2025, with an additional $50 million expected in 2026, and the remaining $50 million to be realized between 2027 and 2029.

Speaker #4: With that, I'll turn the call over to Jeff. Thanks, Brian. I will start off with an overview of our fourth-quarter results, followed by a brief summary of our full-year 2025 results.

Jeff Murray: Thanks, Brian. I will start off with an overview of our Q4 results, followed by a brief summary of our full year 2025 results. As Brian highlighted, we had a strong Q4, positive same-store sales growth, and solid margin improvement as we continued to execute on Project 360. During the Q4, our sales increased by 5.5% year-over-year to $793.9 million, with the same-store sales excluding foreign exchange increasing by 2.2%. In addition, $26.9 million in incremental sales were generated from 83 new locations that were not in operation for the full comparative period. Industry conditions continued to improve in the Q4.

Speaker #4: As Brian highlighted, we had a strong fourth quarter and positive same-store sales growth, along with solid margin improvement, as we continued to execute on Project 360.

Speaker #4: During the fourth quarter, our sales increased by 5.5% year over year, to $793.9 million, with the same-store sales excluding foreign exchange increasing by 2.2%.

Speaker #4: In addition, 26.9 million in incremental sales were generated from 83 new locations, that were not in operation for the full comparative period. Industry conditions continued to improve in the fourth quarter.

Speaker #4: Based on claims processing platform data, we estimate that repairable claims declined by approximately 2 to 4 percent. A meaningful improvement from the first three quarters of 2025, with claims volume improving sequentially each quarter.

Jeff Murray: Based on claims processing platform data, we estimate that repairable claims declined by approximately 2 to 4%, a meaningful improvement from the first three quarters of 2025, with claims volume improving sequentially each quarter. Boyd continued to solidly outperform the industry during the Q4. Gross margin was 46.3% in the Q4 of 2025, compared to 45.8% achieved in the same period of 2024. The gross margin percentage benefited from internalization of scanning and calibration, an increase in parts margins, and improvements in performance-based pricing. The improvement in parts margin was a result of Project 360 initiatives, while the improvement in performance-based pricing was driven by improved alignment across our regional teams to meet the unique KPIs of their insurance company clients. Turning to operating expenses.

Speaker #4: Boyd continued to solidly outperform the industry during the fourth quarter. Gross margin was 46.3% in the fourth quarter of 2025, compared to 45.8% achieved in the same period of 2024.

Speaker #4: Gross margin percentage benefited from internalization of scanning and calibration, an increase in parts margins, and improvements in performance-based pricing. The improvement in parts margin was a result of Project 360 initiatives, while the improvement in performance-based pricing was driven by improved alignment across our regional teams to meet the unique KPIs of their insurance company clients.

Speaker #4: Turning to operating expenses, for the fourth quarter of 2025, operating expenses as a percentage of sales were 33.3%, down 150 basis points from 34.8% of sales for the same period in 2024.

Jeff Murray: For Q4 2025, operating expenses as a percentage of sales were 33.3%, down 150 basis points from 34.8% of sales for the same period in 2024. Operating expenses as a percentage of sales were positively impacted by Project 360 and our return to positive same-store sales growth, which provided improved operating leverage on certain operating costs. Adjusted EBITDA increased 24.2% year-over-year to CAD 103.6 million. Adjusted EBITDA margins improved 200 basis points to 13.1% in Q4, up from 11.1% in the same period of the prior year. The increase was a result of an improvement in same-store sales, benefits from the internalization of scanning and calibration, and cost savings from Project 360.

Speaker #4: Operating expenses as a percentage of sales were positively impacted by Project 360 and our return to positive same-store sales growth, which provided improved operating leverage on certain operating costs.

Speaker #4: Adjusted EBITDA increased 24.2% year over year to $103.6 million. Adjusted EBITDA margins improved 200 basis points to 13.1% in the fourth quarter. Up from 11.1% in the same period of the prior year.

Speaker #4: The increase was a result of an improvement in same-store sales, benefits from the internalization of scanning and calibration, and cost savings from Project 360.

Speaker #4: In 2026, we expect to achieve additional cost savings from Project 360, including continued procurement savings and operational efficiencies. I would like to highlight that as we enter 2026, first-year quarter expenses consistent with prior years are impacted by higher payroll taxes that occur early in the year.

Jeff Murray: In 2026, we expect to achieve additional cost savings from Project 360, including continued procurement savings and operational efficiencies. I would like to highlight that as we enter 2026, Q1 expenses consistent with prior years are impacted by higher payroll taxes that occur early in the year. In addition, Q4 of 2025 benefited from reductions in expense accruals as certain estimates were finalized at amounts lower than previously accrued. These items should be considered when comparing sequential margin performance between Q4 of 2025 and Q1 of 2026. Net earnings for Q4 of 2025 was $4.8 million compared to $2.4 million in the same period of 2024.

Speaker #4: In addition, the fourth quarter of 2025 benefited from reductions in expense accruals, as certain estimates were finalized at amounts lower than previously accrued. These items should be considered when comparing sequential margin performance between the fourth quarter of 2025 and the first quarter of 2026.

Speaker #4: Net earnings for the fourth quarter of 2025 was $4.8 million, compared to $2.4 million in the same period of 2024. Net earnings for the period benefited from higher operating income, partially offset by an increase in depreciation expense due to location growth, an acquisition and transformation cost.

Jeff Murray: Net earnings for the period benefited from higher operating income, partially offset by an increase in depreciation expense due to location growth and acquisition and transformation costs. Excluding fair value adjustments, acquisition and transformational cost initiatives, and amortization of intangibles arising from acquisitions, adjusted net earnings for Q4 2025 were $22.8 million or $0.90 per share, compared to adjusted net earnings of $10.8 million or $0.50 per share in the same period of the prior year. Commencing in Q4 2025 and to align with many other growth companies, the calculation of adjusted net earnings now also excludes amortization of intangibles arising on acquisitions. Comparative periods have been restated for consistency. Now moving on to our annual results.

Speaker #4: Excluding fair value adjustments, acquisition and transformational cost initiatives, and amortization of intangibles arising from acquisitions, adjusted net earnings for the fourth quarter of 2025 were $22.8 million, or 90 cents per share, compared to adjusted net earnings of $10.8 million, or 50 cents per share in the same period of the prior year.

Speaker #4: Commencing in the fourth quarter of 2025, and to align with many other growth companies, the calculation of adjusted net earnings now also excludes amortization of intangibles arising on acquisitions.

Speaker #4: Comparative periods have been restated for consistency. Now, moving on to our annual results. For the year ended December 31st, 2025, we reported sales of $3.1 billion.

Jeff Murray: For the year ended December 31, 2025, we reported sales of $3.1 billion, an increase of 2.4% over the prior year, driven by contributions from 119 new locations that had not been in operation for the full comparative period, partially offset by same-store sales declines of 0.2%. It is important to note that fiscal 2025 included one fewer selling and production day compared to fiscal 2024, which reduced capacity by approximately 0.4% and resulted in the decline in same-store sales. I'm pleased to report that we once again outperformed the industry in 2025 with our same-store sales performance exceeding the ex-estimated 5% to 7% decline in repairable claims.

Speaker #4: An increase of 2.4% over the prior year, driven by contributions from $119 new locations, that had not been in operation for the full comparative period, partially offset by same-store sales declines of 0.2%.

Speaker #4: It is important to note that fiscal 2025 included one fewer selling and production day compared to fiscal 2024, which reduced capacity by approximately 0.4%.

Speaker #4: And resulted in the decline in same-store sales. I'm pleased to report that we once again outperformed the industry in 2025, with our same-store sales performance exceeding the estimated 5% to 7% decline in repairable claims.

Speaker #4: Gross margin increased by 90 basis points year over year to 46.4% of sales compared to the prior period. Reflecting the benefits from internalization of scanning and calibration, improved parts margins, and improvement in performance-based pricing.

Jeff Murray: Gross margin increased by 90 basis points year-over-year to 46.4% of sales compared to the prior period, reflecting the benefits from internalization of scanning and calibration, improved parts margins, and improvement in performance-based pricing. Operating expenses as a percentage of sales declined 20 basis points to 34.4% for the year ended 31 December 2025, compared to 34.6% for the same period in 2024, primarily driven by Project 360 cost savings. These improvements were partially offset by negative leverage on lower same-store sales, incremental costs from scanning and calibration, and an investment in facilities maintenance costs.

Speaker #4: Operating expenses as a percentage of sales declined 20 basis points to 34.4% for the year ended December 31st, 2025, compared to 34.6% for the same period in 2024, primarily driven by Project 360 cost savings.

Speaker #4: These improvements were partially offset by negative leverage on lower same-store sales, incremental costs from scanning and calibration, and an investment in facilities maintenance costs.

Speaker #4: Adjusted EBITDA for the year ended December 31st, 2025, increased 12.4% year over year to $376.3 million, while adjusted EBITDA margins expanded to 12% from 10.9% in the same period of the prior year.

Jeff Murray: Adjusted EBITDA for the year ended December 31, 2025 increased 12.4% year-over-year to $376.3 million, while adjusted EBITDA margins expanded to 12% from 10.9% in the same period of the prior year. The improvement in adjusted EBITDA was a result of an increase in sales from new location growth, gross margin improvement, and the significant cost savings achieved through Project 360. We reported net earnings of $18.4 million compared to $24.5 million in the prior year. The decline was driven in part due to acquisition and transformational cost initiatives of $22.6 million net of tax, including $9.1 million related to the Joe Hudson's acquisition and $9.9 million related to Project 360 implementation.

Speaker #4: The improvement in adjusted EBITDA was a result of increased sales from new location growth, gross margin improvement, and the significant cost savings achieved through Project 360.

Speaker #4: We reported net earnings of $18.4 million compared to $24.5 million in the prior year. The decline was driven in part due to acquisition and transformational cost initiatives of $22.6 million net of tax, including $9.1 million related to the Joe Hudson's acquisition and $9.9 million related to Project 360 implementation.

Speaker #4: Adjusted net earnings in 2025 increased 28.8% year over year to $62.4 million while adjusted net earnings per share increased to $2.78 in 2025 from $2.26 in 2024.

Jeff Murray: Adjusted net earnings in 2025 increased 28.8% year-over-year to $62.4 million, while adjusted net earnings per share increased to $2.78 in 2025 from $2.26 in 2024. The growth in adjusted net earnings came from increased sales, improvement in gross margins, and cost efficiencies from Project 360. As previously noted, commencing in Q4, we have begun to exclude amortization of intangibles arising from acquisitions from adjusted net earnings, and comparative periods have also been restated.

Speaker #4: The growth in adjusted net earnings came from increased sales, improvement in gross margins, and cost efficiencies from Project 360. As previously noted, commencing in the fourth quarter, we have begun to exclude amortization of intangibles arising from acquisitions from adjusted net earnings, and comparative periods have also been restated.

Speaker #4: At the end of 2025, we had total debt net of cash of $488.1 million, compared to $1.28 billion at the end of the third quarter of 2025.

Jeff Murray: At the end of 2025, we had total debt, net of cash of $488.1 million compared to $1.28 billion at the end of Q3 2025. Before lease liabilities, we exited 2025 with net cash of $290.7 million compared to net debt of $521.1 million at the end of September 2025. The decrease in debt net of cash was a result of the proceeds received from the CAD 525 million Canadian dollar senior unsecured note offering and the $897 million bought deal initial public offering in the US that reduced draws on the credit facilities, and partially offset by location growth.

Speaker #4: Before lease liabilities, we exited 2025 with net cash of $290.7 million, compared to net debt of $521.1 million at the end of September 2025.

Speaker #4: The decrease in debt net of cash was a result of the proceeds received from the $525 million Canadian dollar senior unsecured note offering and the $897 million bought deal initial public offering in the US that reduced draws on the credit facilities at partially offset by location growth.

Speaker #4: The net proceeds of these offerings were used to fund the $1.3 billion acquisition of Joe Hudson's Collision Center on January 9, 2026. During 2026, the company plans to make capital expenditures, excluding those related to acquisition development of new locations, within the range of 1.6% and 1.8% of sales.

Jeff Murray: The net proceeds of these offerings were used to fund the $1.3 billion acquisition of Joe Hudson's Collision Center on 9 January 2026. During 2026, the company plans to make capital expenditures, excluding those related to the 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 expects to incur approximately $30 million related to the Joe Hudson's acquisition, as well as completing our planned investment in network technology updates. In 2026, we also expect to incur one-time costs related to the Project 360 cost savings initiative and the realization of the synergies from the Joe Hudson's acquisition.

Speaker #4: In addition to these capital expenditures, the company expects to incur approximately $30 million related to the Joe Hudson's acquisition, as well as completing our planned investment in network technology updates.

Speaker #4: In 2026, we also expect to incur one-time costs related to the Project 360 cost savings initiatives and the realization of the synergies from the Joe Hudson's acquisition.

Speaker #4: For Project 360, the total cost to achieve our expected to be between $20 million to $23 million, of which $13.4 million were incurred in 2025.

Jeff Murray: For Project 360, the total costs to achieve are expected to be between $20 to 23 million, of which $13.4 million were incurred in 2025. In 2024, similar transformation costs were incurred totaling $4.4 million. The cost to achieve the Joe Hudson's synergies are estimated at approximately $30 million in one-time costs. I will now pass it back to Brian for closing remarks.

Speaker #4: In 2024, similar transformation costs were incurred totaling $4.4 million. The cost to achieve the Joe Hudson synergies is estimated at approximately $30 million in one-time costs.

Speaker #4: I will now pass it back to Brian for closing remarks.

Speaker #5: Thank you, Jeff. Throughout 2025, we significantly strengthened our business through improved profitability, a more focused location growth strategy centered on densification, a meaningfully expanded footprint, and a stronger capital markets profile.

Brian Kaner: Thank you, Jeff. Throughout 2025, we significantly strengthened our business through improved profitability, a more focused location growth strategy centered on densification, a meaningfully expanded footprint, and a stronger capital markets profile. Looking ahead to 2026 and beyond, we believe our strength and position enables us to deliver even greater value as we leverage our leadership in the highly fragmented North American collision repair industry and continue executing the disciplined growth strategy that has driven Boyd's success for more than three decades. With that, I would now like to open the call to questions.

Speaker #5: Looking ahead to 2026 and beyond, we believe our strengthened position enables us to deliver even greater value as we leverage our leadership in the highly fragmented North American collision repair industry and continue executing the disciplined growth strategy that has driven Boyd's success for more than three

Speaker #1: Three decades with that , I would now like to open the call to questions

Speaker #2: Thank you . We will now begin the question and answer session . If you would like to ask a question , please press star one on your telephone keypad .

Operator 3: Thank you. We will now begin the question-and-answer session. If you'd like to ask a question, please press star one on your telephone keypad. If you'd like to withdraw your question, simply press star one again. Your first question today comes from the line of Krista Friesen from CIBC. Your line is open.

Operator: Thank you. We will now begin the question-and-answer session. If you'd like to ask a question, please press star one on your telephone keypad. If you'd like to withdraw your question, simply press star one again. Your first question today comes from the line of Krista Friesen from CIBC. Your line is open.

Speaker #2: If you'd like to withdraw your question , simply press star one again . Your first question today comes from the line of Krista Friesen from CIBC .

Speaker #2: Your line is open

Speaker #1: Hi , Krista .

Brian Kaner: Hi, Krista.

Speaker #3: Hi . Thanks for taking my question . Good morning Can you give a little bit more color on what you're seeing for same store sales growth ?

Krista Friesen: Hi. Thanks for taking my question. Good morning. Can you give a little bit more color on what you're seeing for same-store sales growth right now? I appreciate there were some storms in January, but just curious how you view Boyd exiting Q1 and maybe what the run rate is in March, if you can share that.

Speaker #3: Right now ? I appreciate there were some storms in January , but just curious how you how you view Boyd exiting Q1 and maybe what the run rate is in March .

Speaker #3: If you can share that

Speaker #1: Yeah . Well , obviously we won't share the run rate in March , but as we as we look at the first two months of the year , you know , what we saw was what we said , you know , strength in the northern markets partially offset by just a couple day period of time where , you know , the storms in the South .

Brian Kaner: Yeah. Well, obviously, we won't show the run rate in March, but as we look at the first two months of the year, you know, what we saw was what we said. You know, strength in the northern markets, partially offset by just a couple day period of time where, you know, the storms in the south, there was a batch of storms that hit the south, you know, late in January that just negatively affected our arrivals for a couple of day period of time, and that partially offset, you know, our ability to, you know, to get back into the range.

Speaker #1: There was a batch of storms that hit the south . You know , late in January that that just negatively affected our arrivals for a couple of day period of time .

Speaker #1: And that partially offset , you know , our ability to , you know , to get back into the range . I think without that , I would suggest we probably would have been , you know , talking about something that was more in line with the range , which is reflective of which is certainly reflective of of the macro backdrop that we're experiencing .

Brian Kaner: I think without that, I would suggest we probably would have been, you know, talking about something that was more in line with the range, which is certainly reflective of the macro backdrop that we're experiencing. You know, we've continued to outperform the market, you know, by somewhere around five points. You know, so if the market's down 2 to 4%, you'd expect us to be, you know, in that, you know, kind of 3 to 3+ % range. With, you know, the storms that affected the south, it just put us in a position where we saw that, you know, very temporarily impact the business. The growth in the, you know, our northern markets where we've had snow, and pretty consistent weather has been very strong.

Speaker #1: You know , we've continued to outperform the market , you know , by somewhere around five , five points , you know , so if the market's down 2 to 4% , you'd expect us to be , you know , in that , you know , kind of 3 to 3 plus percent range .

Speaker #1: But with , you know , the storms that affected the South , it just , it put us in a position where we saw that , you know , very temporarily impact the , business .

Speaker #1: The growth in the in the , you know , our northern markets where we've had snow in pretty consistent weather has been very strong .

Brian Kaner: I think we're, you know, all we're really flagging there is a short term, very short term impact, you know, from the weather.

Speaker #1: So I think we're , you know , all we're really flagging . There is a is a short term , very short term impact to , you know , from the weather .

Brian Kaner: I think we're, you know, all we're really flagging there is a short term, very short term impact, you know, from the weather.

Speaker #3: Okay . Thank you . And then maybe just on the on the Q4 same store sales growth , I believe when you had reported Q3 in mid-November , you talked about Q4 kind of being back within the the target range and just wondering if you can speak to kind of what caused that difference in the last half of Q4 Thank you

Krista Friesen: Okay. Thank you. Maybe just on the Q4 same-store sales growth. I believe when you had reported Q3 in mid-November, you talked about Q4 kind of being back within the target range. Just wondering if you can speak to kind of what caused that difference in the last half of Q4. Thank you.

Speaker #1: Yeah , yeah . I mean , I think the only thing I can really point to that , that caused any sort of , you know , we , we had when we reported , we certainly were in the range that we talked about as we progressed throughout the quarter , you know , we saw a little bit more , you know , a little bit more vacation time from the technicians .

Brian Kaner: Yeah. I mean, I think that the only thing I can really point to that caused any sort of. You know, we had, when we had reported, we certainly were in the range that we talked about as we progressed throughout the quarter. You know, we saw a little bit more, you know, a little bit more vacation time from the technicians and, you know, that put us slightly behind where we expected to be. Really had nothing to do with the work coming into the shops or a slowdown in work coming into the shops. It had more to do with our ability to get through it in light of just the way that the holidays fell and, so, nothing really more to note than that.

Speaker #1: And , you know , that that put us slightly behind where we expect it to be really had nothing to do with the the work coming into the shops or a slowdown in work coming into the shops .

Speaker #1: It had more to do with our ability to get through it in light of just the the way that the holidays fell and so nothing , nothing really .

Speaker #1: More to note than that.

Speaker #3: Okay . Thank you for the color . I'll leave it there

Krista Friesen: Okay. Thank you for the color. I'll leave it there.

Speaker #1: Okay . Thank you .

Brian Kaner: Yeah. Thank you.

Speaker #2: Your next question comes from the line of Sabahat Khan from RBC Capital Markets . Your line open .

Operator 3: Your next question comes from a line of Sabahat Khan from RBC Capital Markets. Your line is open.

Operator: Your next question comes from a line of Sabahat Khan from RBC Capital Markets. Your line is open.

Speaker #4: Great . Thanks and good morning . Maybe . I guess just kind of continuing on 26 , you know , with sort of that operating backdrop , you just talked about and the integration of Jhudson , how are you thinking about just run rate M&A of smaller shops ?

Jeff Murray: Great. Thanks and good morning. Maybe, I guess, just kind of continuing on 26, you know, with sort of that operating backdrop you just talked about in the integration of Joe Hudson's, how are you thinking about just run rate M&A of smaller shops? You know, what is kind of the capacity or just the willingness to sort of pursue that, over the course of this year while you integrate the Joe Hudson's transaction? Thanks.

Sabahat Khan: Great. Thanks and good morning. Maybe, I guess, just kind of continuing on 26, you know, with sort of that operating backdrop you just talked about in the integration of Joe Hudson's, how are you thinking about just run rate M&A of smaller shops? You know, what is kind of the capacity or just the willingness to sort of pursue that, over the course of this year while you integrate the Joe Hudson's transaction? Thanks.

Speaker #4: You know , what is kind of the capacity or just the willingness to sort of pursue that over the course of this year while you integrate the Jhudson transaction ?

Speaker #4: Thanks

Speaker #1: Yeah . Well , look , I think , as we've said , a couple of on a couple of different occasions , we intend to integrate the JOA Hudsons business with , you know , a separate team of people that then that that's focused on , you know , the base business acquisition activity that we do .

Brian Kaner: Yeah. Well, look, I think if we, as we've said on a couple different occasions, we intend to integrate the Joe Hudson's business with you know, a separate team of people that's focused on you know, the base business acquisition activity that we do. We don't expect to see a big slowdown in activity as it relates to acquisitions driven by what we're driven by the integration. As I said in the prepared remarks, our intention is to get through the integration of Joe Hudson's by early in the Q2, to have all the shops converted and have that business kind of up on our operating platform and running and ready to go. The organization is already put in place.

Speaker #1: So we don't expect to see a big slowdown in , in activity as it relates to acquisitions driven by what we're , you know , driven by the integration , as I said , in the prepared remarks , our intention is to get , you know , get through the integration of Jo Hudson by , you know , early in the second quarter to have all the shops converted and have that business kind of up on our operating platform and running and ready to go .

Speaker #1: The organization that has been put in is already in place, so I don't expect it to be distracting throughout the year. You know, the pipeline for activity remains very robust.

Brian Kaner: I don't expect it to be distracting throughout the year. You know, the pipeline for activity remains very robust. Our balance sheet still remains very well positioned to be able to take advantage of those opportunities. As we've said, we've already got 32 startup locations already planned for 2026 and would expect to infill the balance of our expected 80 to 100 unit growth, you know, with acquisitions or even further startups to pull in.

Speaker #1: Our balance sheet still remains very well positioned to be able to take advantage of those opportunities . As we've said , we've already got 32 , 32 startup locations already planned for for 2026 .

Speaker #1: And and would expect to infill the balance of the , you know , the balance of our expected 80 to 100 unit growth with , with acquisitions or even further startups to pull in

Speaker #4: Great . And then I guess just to put a finer point on the same store sales discussion that you outlined a bit earlier , you know , is I guess the expectation based on the operating backdrop and how you're sort of evolving through Q1 that you could still be within that sort of 3 to 5% range for the year or too early to sort of comment on that .

Sabahat Khan: Great. I guess just to put a finer point on the same-store sales discussion that you outlined a bit earlier. You know, is the expectation based on the operating backdrop and how you're sort of evolving through Q1 that you could still be within that sort of 3 to 5% range for the year, or too early to sort of comment on that? Thanks.

Speaker #4: Thanks .

Speaker #1: Yeah . I mean , look , I think we , you know , we , we've , we've said we expect to be , you know , 3 to 5% , you know , range over , you know , our long term , you know , over the long term horizon .

Brian Kaner: Yeah. I mean, look, I think we, you know, we've said we expect to be in a 3% to 5% range over, you know, our long-term horizon. I think the market backdrop continues to progressively move positively towards that. You know, the claims environment continues to get better quarter after quarter after quarter. You know, which gives us confidence that we can get back into that range. As I said, without the impact of, you know, this couple-day impact of just really odd storm activity that hit the south, you know, we very much would have likely been in that position in Q1. I don't expect us to be out of that range.

Speaker #1: I think the market backdrop continues to progress to move positively towards that You know , the , the , the claims environment continues to get better quarter after quarter after quarter You know , which gives us , you know , which gives us confidence that we can get back into that range .

Speaker #1: As I said , with without the impact of , you know , this couple day impact of just really odd storm activity that hit the South .

Speaker #1: You know , we very much we very much would have likely been in that , you know , position in the first quarter .

Speaker #1: So I don't I don't expect us to to be out of that range

Speaker #4: Okay, great. Thanks very much.

Sabahat Khan: Okay, great. Thanks very much.

Speaker #5: Yep .

Speaker #2: Your next question comes from the line of Chris Murray from ATB Carmart Capital Markets . Your line is open

Operator 3: Your next question comes from the line of Chris Murray from ATB Capital Markets. Your line is open.

Operator: Your next question comes from the line of Chris Murray from ATB Capital Markets. Your line is open.

Speaker #6: Thanks , folks . You know , maybe Brian , going back to maybe some of the bigger macro pieces , you know , it's sort of feels like you are seeing the improvement in it in the , in the underlying .

Chris Murray: Yeah, thanks, folks. You know, maybe Brian, going back to maybe some of the bigger macro pieces, you know, it sort of feels like you are seeing the improvement in the underlying. I guess a couple pieces of this. One, you know, is your expectation that sort of the claims volume numbers, I mean, at least they're trending to be positive. Would you expect that the kind of the spread between what Boyd has historically been doing versus the industry to continue?

Speaker #6: So I guess a couple pieces of this one , you know , is your expectation that through the claims volume numbers , I mean , at least they're trending to be positive .

Speaker #6: And would you expect that the kind of the spread between what Boyd has historically been doing versus the industry to continue

Brian Kaner: Yeah, I would expect the spread to continue. I don't know that the claims environment is going to go positive. You know, I think it's progressing less negative, which is, you know, what we expect it to do. You know, we've always said that, you know, based on collision avoidance systems, we expect the underlying marketplace to be negative by 2%. You know, we expect that to be offset by 1%, you know, 1% improvement in miles driven as well as a 1% increase in the car park, you know, which leaves the market kind of down 1%. You know, as we suggested in Q4, we're starting to near that 1%.

Speaker #1: Yeah , I would expect the the spread to continue . I don't know that the claims environment is going to go positive . You know , I think it's progressing less negative , which is , you know , what we expect it to do .

Speaker #1: You know , we've always said that , you know , based on collision avoidance systems , we expect the underlying marketplace to be negative by 2% .

Speaker #1: We expect that to be offset by 1% . You know , 1% . Improvement in miles driven as well as a 1% increase in the car park .

Speaker #1: You know , which leaves the market kind of down 1% . You know , as , as we suggested in the fourth quarter , we're we're starting to near that 1% .

Speaker #1: So , you know , we would , we wouldn't expect , you know , to give up the share gains that we're getting right now .

Brian Kaner: You know, we wouldn't expect, you know, to give up the share gains that we're getting right now, you know, in the down environment. We'd expect that to continue even as the market improves.

Speaker #1: You know , in the down environment , we'd expect that to continue even as the market improves . And maybe I'd just add to .

Jeff Murray: Maybe I'd just add to that, Brian, is that we certainly have seen sort of a delay in the maturation of some of the stores we've added over the last, you know, few years. I think that's also something to take into account, is that we could benefit just from maturation of those stores.

Speaker #7: That , Brian , is that we certainly have seen sort of a delay in the maturation of some of the stores we've added over the last , few years .

Speaker #7: So I think that's also something to take into account is that is that we could benefit just from a maturation of those stores

Speaker #6: Okay . That's helpful . And then maybe just looking at operating expenses , you know , certainly some really good performance in the quarter .

Chris Murray: Okay, that's helpful. Maybe just looking at operating expenses, you know, certainly some really good performance in the quarter. I'm just wondering, you know, how you're thinking about it. There were a lot of things called out. I mean, you talked about scanning and calibration helped you, but it also hurts you a little bit. That maturation piece. Like, if we were thinking about net-net, that kind of pace of or directionality of margin improvement, you know, if you were to kind of back out the, call it the one-time accrual adjustments, like how are we thinking about kind of progressive margin improvement through the balance of the year?

Speaker #6: I'm just wondering , you know , how you're thinking about it . There are a lot a lot of things called out . I mean , you talked about scanning and calibration helped you , but it also hurts you a little bit .

Speaker #6: And then that maturation piece , like if we were thinking about net net , that kind of pace of or directionality of margin improvement , you know , if you were to kind of back out the call it the one time accrual adjustments , like how do you , how are we thinking about kind of progressive margin improvement through the balance of the year

Speaker #7: Well , I think I would go back to our looking at our , just our project 360 , you know , ambition that we've talked about of getting back to 14% by 2029 .

Jeff Murray: Well, I think I would go back to looking at just our Project 360, you know, ambition that we've talked about of getting back to 14% by 2029. We've also really highlighted the improvements in terms of Project 360 and Joe Hudson's that we expect to realize in 2026. That number is $50 million. I would just layer that $50 million improvement into your assumptions around OpEx, and that'll give you your answer.

Speaker #7: And we've also really highlighted the , the improvements in terms of project 360 . And Jo , that we expect to realize in 2026 .

Speaker #7: And so that number is 50 , $50 million . So I would just layer that $50 million improvement into the into your assumptions around opex .

Speaker #7: And that give you your answer .

Speaker #6: Okay . I'll leave it there . Thanks , folks .

Chris Murray: Okay. I'll leave it there. Thanks, folks.

Speaker #5: Thanks

Brian Kaner: Thanks.

Speaker #2: Your next question comes from the line of Mark Jordan from Goldman Sachs . Your line is open

Operator 3: Your next question comes from a line of Mark Jordan from Goldman Sachs. Your line is open.

Operator: Your next question comes from a line of Mark Jordan from Goldman Sachs. Your line is open.

Speaker #8: Hey . Good morning . Thank you very much . You know , as we think about the same store sales growth , are you able to talk about the pricing benefit that you're seeing from the pass through of parts inflation ?

Mark Jordan: Hey, good morning. Thank you very much. You know, as we think about the same-store sales growth, are you able to talk about the pricing benefit that you're seeing from the pass-through of parts inflation, and maybe how we should think about that tailwind going forward?

Speaker #8: And maybe how would you think about that tailwind going forward

Speaker #5: Yeah . Well , if you look at what's happening .

Brian Kaner: Yeah. Well, if you look at what's happening with you know, parts prices, as you've highlighted, they continue to go up. You know, parts pricing CPI in February was 2.6%. We also continue to see labor price increases. We still believe that, you know, that's still partially being offset by the blending down of the overall claims population driven by the elevated total losses. We still haven't really seen. I think the tailwind is as total losses start to come down, reflecting the used car price increases that are now in the marketplace. You know, Manheim would suggest those are up 4% in the month of February, which is really probably the first meaningful improvement in or increase in used car prices that we've seen over the past few months.

Speaker #1: With with , you know , parts prices as you've highlighted , they continue to go up , you know , parts pricings , CPI in February was 2.6% .

Speaker #1: We also continue to see labor price increases . We still believe that , you know , that's still partially being offset by the blending down of the overall claims population driven by the elevated total losses .

Speaker #1: So we still haven't really seen , I think the tailwind is as total losses continue , as total losses start to come down , reflecting the used car price increases that are now in the marketplace .

Speaker #1: And you know , Manheim would suggest those are up 4% in the in the in the month of February , which is really probably the first meaningful improvement in or increase in used car prices that we've seen over the past few months .

Brian Kaner: I'd expect that to come through more visibly as we start to see total losses come down. We haven't yet seen it in our results to date. You know, right now, if you look at, you know, through Q3 of 2025, the industry claims or the industry cost to repair was up about 1.7%. That's still far off of the 3% to 5% that we would expect it to be driven by the factors that you just articulated.

Speaker #1: So I'd expect that to kind of to come through more It would , I'd expect that to come through more visibly as we start to see total losses come down .

Speaker #1: We haven't yet seen it in our results to date . You know , right now , if you look at , you know , through Q3 of 2025 , the industry claims or the industry cost of repair was up about 1.7% .

Speaker #1: That's that's still far off of the , the 3 to 5% that we would expect it to be driven by the factors that you just articulated .

Speaker #8: Okay . Perfect . Thank you very much . You know , as we think about the synergies that are expected for Joe Hudson , midpoint 40 million , half are expected to be realized this year .

Mark Jordan: Okay, perfect. Thank you very much. You know, as we think about the synergies that are expected for Joe Hudson, midpoint $40 million, half are expected to be realized this year. You know, it kind of sounds like you've realized some already, but is it fair to say the majority of that should be more back half-weighted?

Speaker #8: You know, it kind of sounds like you've realized some already, but it's fair to say the majority of that should be more back-half weighted.

Brian Kaner: No. I mean, I think some of the savings that we're expecting for 2026 are really largely driven by procurement savings. Those procurement savings, you know, were starting to be realized as early as the time we closed on the transaction. We had very good visibility to where those opportunities were at. The team worked very quickly to put those best of the best contracts in place, and I think we'll start to see some of that benefit even in Q1. You know, fair to say that some of the other synergies would be, you know, more likely executed towards the back half, I wouldn't weight it so heavily to the back half.

Speaker #1: No , no . I mean , I think some of the the savings that we're expecting for 2026 are really largely driven by procurement savings in those procurement savings .

Speaker #1: You know , we're starting to be realized as early as the time we closed on the transaction , we had very good visibility to where those opportunities were at .

Speaker #1: The team worked very , very quickly to to those best of the best contracts in place . And I think we're we'll start to see some of that benefit even in the first quarter .

Speaker #1: You know , fair to say that some of the some of the other synergies would be , you know , more likely executed towards the back half .

Speaker #1: But I wouldn't—I wouldn't, I wouldn't weight it so heavily to the back half.

Speaker #8: Perfect . Thank you very much .

Mark Jordan: Perfect. Thank you very much.

Speaker #1: Yep .

Brian Kaner: Yep.

Speaker #2: Your next question comes from the line of Thomas Wendler from Stephens . Your line is open .

Operator 3: Your next question comes from a line of Thomas Wendler from Stephens. Your line is open.

Operator: Your next question comes from a line of Thomas Wendler from Stephens. Your line is open.

Speaker #9: Hey , good morning everyone . We've heard some chatter that OEMs intend to raise their prices with the 2027 model year . You know , as new prices kind of increase , the use generally follow suit .

Thomas Wendler: Hey, good morning, everyone.

Brian Kaner: Hey.

Thomas Wendler: We've heard some chatter that OEMs intend to raise their prices with the 2027 model year. You know, as new prices kind of increase, the used generally follows suit. Do you think the company could see a bit of a bump up in the back half of the year as the repair versus replace dynamics kind of start leaning towards repairing?

Speaker #9: Do you think the company could see a bit of a bump up in the back half of the year as the repair versus replace dynamics kind of start leaning towards repairing

Brian Kaner: It's very possible. I mean, I've been surprised that the used car prices haven't moved more meaningfully even this year as, you know, as the tariffs have impacted the, you know, the new car pricing. New car prices are at, you know, an all-time high even as we sit here today. It wouldn't surprise me that as total losses or as used car prices go up in a more meaningful way that, you know, total losses come down. I think what the way that manifests itself is, it just shows itself as, you know, a higher average cost to repair.

Speaker #1: It's very possible . I mean , I , I've been surprised that the used car prices haven't moved more meaningfully even this year .

Speaker #1: As you know , as the tariffs have impacted the , you know , the new car pricing , new car prices . Are , you know , an all time high .

Speaker #1: Even as we sit here today . So it wouldn't surprise me that as total losses or as used car prices go up in a more meaningful way that , you know , total losses come down .

Speaker #1: And I think what the , the way that manifests itself is that just it shows itself as , you know , a higher average cost of repair .

Speaker #1: And instead of instead of total losses , muting the benefit we're seeing from just the , the , the previously mentioned , you know , parts price increases and labor price increases , they may actually put us in a position , you know , similar to what we saw in , you know , 2022 and 2023 , where the prices actually elevate greater than that 3 to 5% .

Brian Kaner: Instead of total losses muting the benefit we're seeing from just the previously mentioned, you know, parts price increases and labor price increases, they may actually put us in a position, you know, similar to what we saw in, you know, 2022 and 2023, where the prices actually elevate greater than that 3% to 5%.

Speaker #9: Perfect. Thank you. And maybe just one more. It's been almost a year since you've kind of aligned the regional and field management compensation to key performance metrics from the insurance partners.

Thomas Wendler: Perfect. Thank you. Maybe just one more. It's been almost a year since you've kind of aligned the regional and field management compensation to key performance metrics from the insurance partners. Can you maybe talk about how this has impacted your volumes, maybe some wins you've seen on the market share side from this?

Speaker #9: Can you talk about how this is impacting your volumes ? Maybe some wins you've seen on the market share side from this ?

Speaker #1: Yeah . I mean , look , I , I would tell you that I think that's what's driving the outperformance to the market as we sit here today , you know , the client performance metrics have moved very positively over the past 12 months .

Brian Kaner: Yeah. I mean, look, I would tell you that I think that's what's driving the outperformance to the market as we sit here today. You know, the client performance metrics have moved very positively over the past 12 months. The team has done a phenomenal job of focusing in on, you know, on what I call majoring in the minors and making sure that we're not just winning on the big three things that are important to insurance carriers, but we're winning on all of the smaller things that are important to them as well.

Speaker #1: The team has done a phenomenal job of of focusing in on , you know , on what I call majoring in the minors and making sure that not we're not just winning on the big three things that are important to insurance carriers , but we're winning on all of the smaller things that that are important to them as well .

Speaker #1: And as we've done that , we've seen meaningful progress with , you know , with one of our largest carrier . But , but all of the other carriers as well have benefited by , you know , a team that's just Uber focused on , you know , driving a great result with our customers

Brian Kaner: As we've done that, we've seen meaningful progress with, you know, our largest carrier, but all of the other carriers as well have benefited by, you know, a team that's just uber-focused on, you know, driving a great result with our customers.

Speaker #9: Perfect . I appreciate you answering my questions .

Thomas Wendler: Perfect. I appreciate you answering my questions.

Speaker #1: Yep . Thank you .

Brian Kaner: Yep. Thank you.

Speaker #2: Your next question comes from the line of Steve Hansen from Raymond James . Your line is open .

Operator 3: Your next question comes from a line of Steve Hansen from Raymond James. Your line is open.

Operator: Your next question comes from a line of Steve Hansen from Raymond James. Your line is open.

Speaker #1: Hey , Steve

Brian Kaner: Hey, Steve.

Speaker #10: Yeah . Thanks for your time , Brian . Not to beat the same source horse too hard here , but is it fair to say that the activity levels in March have improved back to the range you would have expected ?

Steve Hansen: Yeah. Hi, guys. Thanks for the time. Brian, not to beat the same horse too hard here, but is it fair to say that the activity levels in March have improved back to the range you would have expected, absent the weather stuff you saw earlier in the year? I'm just trying to understand sort of the cadence through the quarter.

Speaker #10: Absent the weather stuff you saw earlier in the year ? I'm just trying to understand sort of the cadence through the quarter and

Brian Kaner: Yeah. We actually.

Speaker #1: Yeah , I would say that it's not it's less about March . And frankly , more about we saw the activity bounce back pretty quickly , even as we got into February .

Steve Hansen: It-

Brian Kaner: Yes. I would say that it's not. It's less about March and frankly more about we saw the activity bounce back pretty quickly even as we got into February. It was very much so that impact was very much so isolated to a, you know, few days of really just a marketplace that got shut down from, frankly, Texas all the way to the Carolinas. You know, it was just a very odd storm that just had an impact on, you know, the southern region that, you know. It was very short-term in nature, and as we came out of it, we saw the dip, and then we saw, you know, the bounce back pretty quickly.

Speaker #1: It was very much so the that impact was very much so isolated to a , you know , to a few days of , of really just a marketplace that got shut down from , from , frankly , from Texas all the way to the Carolinas And , you know , it was , it was just a very odd storm that , that just had an impact on , you know , the southern region that , you know , but it was very short term in nature .

Speaker #1: And as we came out of it , we saw we saw the dip , and then we saw the , you know , the bounce back pretty quickly

Speaker #10: Okay . That's helpful . And just wanted to circle back on the M&A side again , the small MSOs become more thematic or topical here .

Jeff Murray: Okay, that's helpful. Just wanted to circle back on the M&A side again. These small MSOs become more thematic or topical here. I mean, how competitive are they? The broader landscape has had some challenges, of course, but are you having to pay up for these small MSOs, or are you finding there's still good value to be had there?

Steve Hansen: Okay, that's helpful. Just wanted to circle back on the M&A side again. These small MSOs become more thematic or topical here. I mean, how competitive are they? The broader landscape has had some challenges, of course, but are you having to pay up for these small MSOs, or are you finding there's still good value to be had there?

Speaker #10: I mean , how competitive are they ? The broader landscape has had some challenges of course , but are you are you having to pay up for these small MSOs or are you finding they're still good value to be had ?

Speaker #10: There

Speaker #1: Yeah , I think there's there's actually , as time goes on , there's even more value to be had . There . The competitive backdrop is , is , is less competitive right now , as you know , as a few of the major players in the business are in the , in the industry or are going through different things .

Brian Kaner: Yeah, I think there's actually, as time goes on, there's even more value to be had there. The competitive backdrop is less competitive right now as, you know, as a few of the major players in the business or in the industry are going through different things. You know, I think it's putting us in a position to be, you know, a bit of the acquirer of choice and, you know, as you well can appreciate, as that happens, the competitive environment actually starts to slant more towards the buyer versus the seller.

Speaker #1: You know , I think it's putting us in a position to be , you know , a bit of the acquirer of choice and , you know , as you well can appreciate as that happens , the competitive environment actually starts to slant more towards the buyer versus the seller

Speaker #10: Appreciate the time. Thanks.

Jeff Murray: Appreciate the time. Thanks.

Steve Hansen: Appreciate the time. Thanks.

Speaker #1: Yep .

Brian Kaner: Yep.

Speaker #2: Your next question comes from the line of Derek Lessard from TD Cowan . Your line is open .

Operator 3: Your next question comes from the line of Derek Lessard from TD Cowen. Your line is open.

Operator: Your next question comes from the line of Derek Lessard from TD Cowen. Your line is open.

Speaker #11: Yeah . Good morning everybody . So I just want to switch gears here and focus on your your strong excuse me , your strong margin performance in the quarter .

Derek Lessard: Yeah, good morning, everybody. I wanna switch gears here and focus on, excuse me, your strong margin performance in the quarter. Can you just maybe break down how much of the remaining is driven by?

Speaker #11: Can you just maybe break down how much of the remaining Is driven by

Speaker #1: Hey , Derek , you're breaking it up . You're breaking up . Derek .

Brian Kaner: Hey, Derek, you're breaking up. You're breaking up, Derek.

Speaker #11: Can you hear me now ?

Derek Lessard: Can you hear me now?

Speaker #1: Yeah , we can hear you now . We we heard everything up to , you know , how much of the strong performance is driven by .

Brian Kaner: Yeah, we can hear you now. We heard everything up to, you know, how much of the strong performance is driven by. Then you broke up.

Speaker #1: And then you broke up .

Speaker #11: Yeah . So how much ? I guess the remaining path to to your 14% target . How much of that is being driven by project three ?

Derek Lessard: Yeah. How much, I guess, the remaining path to your 14% target, how much of that is being driven by Project 360 versus mix and scale and Joe Hudson's synergies?

Speaker #11: 60 versus mix and scale ? And Jo Hudson synergies

Brian Kaner: Good question. I mean, we still expect the pathway to 14% in the base business to be paved by Project 360. No doubt that Joe Hudson's profit profile enhances and accelerates our ability to get to that objective. So we're not slowing anything down relative to the benefits we would expect Project 360 to deliver, and frankly would expect, you know, as we get further out into the plan period, you know, that plus we have at the end of the 14% to be positively impacted by, you know, Joe Hudson mixing into the business.

Speaker #1: Good question . I mean , we , we , we still expect the pathway to 14% in the base business to be paved by project 360 .

Speaker #1: No doubt that that Jo Hudson's profit profile enhances and accelerates our ability to get to that objective . So we're not we're not slowing anything down relative to the benefits we would expect .

Speaker #1: Project 360 to deliver . And frankly , would expect , you know , as we get further out into the plan period , you know , that plus that we have at the end of the 14% to be positively impacted by , you know , Jo Hudson mixing into the business .

Speaker #11: Okay . And then , and when you think about the internalization of your scanning and , and calibration , I think you , you put out in the press release , you're at 75% in Q4 .

Derek Lessard: Okay. When you think about the internalization of your scanning and calibration, I think you put out in the press release, you're at 75% in Q4. Where does this, I guess, ultimately plateau, and how should we be thinking about the incremental margin and competitive benefits from further internalization?

Speaker #11: Where does this , I guess ultimately plateau and how should we be thinking about the incremental margin and competitive benefits from from further internalization ?

Speaker #1: Yeah . Well , we've talked about the , the , the benefits associated with it are certainly related to shifting that , you know , that labor or that revenue category from a sublet category , which is our lowest margin category to a labor margin .

Brian Kaner: Yeah. Well, we've talked about the benefits associated with it are certainly related to shifting that, you know, that revenue category from a sublet category, which is our lowest margin category, to a labor margin. You know, we've talked about that being anywhere from 25 to 30 points of difference between those two categories. From a customer benefit, what we do know is when we do it internally, we're able to offer better pricing because we offer our menu-based pricing as well as drive down the cycle time for repair because we're not beholden to somebody else to actually complete that repair. Lots of benefits there.

Speaker #1: And, you know, we've talked about that being anywhere from 25 to 30 points of difference between those two categories from a customer benefit.

Speaker #1: What we do know is when we do it internally , we're you know , we're , we're able to , you know , we're , we're able to offer better pricing because we offer our menu based pricing as well as , you know , drive down the cycle time for repair because we're not beholden to somebody else to actually , to actually complete that repair .

Speaker #1: So lots of benefits there as far as where it plateaus , you know , we've said we want it to be at 80% by the end of , I believe by the end of this year , we're , we're clearly on track to be able to do that .

Brian Kaner: As far as where it plateaus, you know, we've said we wanted to be at 80% by the end of, I believe, by the end of this year. We're clearly on track to be able to do that. I don't know that that's the plateau. I think as the car park continues to require more calibration services, over time, what'll happen is that will migrate into a shop. We've talked about how that migration into a shop will offer up, then will open up the opportunity for us to leverage the mobile capabilities that we have to expose that more to the external market and maybe even potentially take care of mom and pop shops that don't have the financial wherewithal to invest in this type of equipment.

Speaker #1: I don't know that that's the plateau . I think as the car park continues to , you know , continues to require more calibration services over time , what will happen is that will migrate into a shop .

Speaker #1: And we've talked about how that migration into a shop will offer up . Then will open up the opportunity for us to leverage the the mobile capabilities that we have to expose that more to the external market and maybe even potentially take care of mom and pop shops that don't have the , the financial wherewithal to invest in this type of equipment .

Brian Kaner: I do believe that, you know, over time you'll see us doing even greater than 80%. But for now, we flagged the 80% until the car park continues to mature.

Speaker #1: So I , I do believe that , you know , over time , you'll , you'll see us doing even greater than 80% .

Brian Kaner: I do believe that, you know, over time you'll see us doing even greater than 80%. But for now, we flagged the 80% until the car park continues to mature.

Speaker #1: But for now , we flagged the 80% until the car park continues as the car park continues , continues to mature . .

Speaker #7: And Brian , maybe I'll highlight though , there's really there's two components . There's the internalization piece , which offers a margin uplift , but there is also just the growth in the in the volume of , of calibrations , the number of cars that require calibrations .

Jeff Murray: Brian, maybe I'd highlight, though, there is two components. There's the internalization piece, which offers a margin uplift, but there is also just the growth in the volume of calibrations, the number of cars that require calibrations. Since it is a higher margin category, just higher margin, or sorry, higher volumes over time is also gonna help provide additional margin lift going forward.

Speaker #7: And since it is a higher margin category , just higher margin or sorry , higher volumes over time is also going to help provide additional margin lift going forward

Speaker #11: Awesome . Thanks for the color , guys .

Derek Lessard: Awesome. Thanks for the color, guys.

Speaker #1: Thanks .

Brian Kaner: Thanks.

Speaker #2: Your next question comes from the line of Darryl Young from Stifel . Your line is open .

Operator 3: Your next question comes from a line of Daryl Young from Stifel. Your line is open.

Operator: Your next question comes from a line of Daryl Young from Stifel. Your line is open.

Speaker #12: Hey , good morning everyone . Just as it relates to the insurance pricing , I know we talk a lot about the macro and pricing coming down , but are you seeing any signs of customer behavior around customer cash pay or any previous deferrals that are starting to come back through the shops ?

Daryl Young: Hey, good morning, everyone. Just as it relates to the insurance pricing, I know we talk a lot about the macro and pricing coming down, but are you seeing any signs of customer behavior around customer cash pay or any previous deferrals that are starting to come back through the shops? Or is there any green shoots there that you can speak to that kinda corroborate the upside that should come?

Speaker #12: Or is there any green shoots there that you can speak to that that kind of corroborate the upside that should come

Brian Kaner: I don't know that we're seeing anything differently as it relates to customer pay or, obviously, the claims environment is getting less negative, which, you know, would indicate that people are more likely to file that they're more likely filing claims when they get into an accident. You know, whether or not there's a deferral benefit, you know, as we look back to the last two times we saw, you know, the industry kind of react or behave this way, there was a period of time, you know, in the coming out of the recession, there was a period of time, I think it was two years after the recession ended, that we saw an outsized growth in the market.

Speaker #1: I don't know that we're seeing anything differently as it relates to customer pay or obviously the claims environment is , is getting less negative , which , you know , would indicate that people are more likely to file their more likely filing claims when they get into an accident .

Speaker #1: You know , whether or not there's , there's a deferral benefit . You know , as we look back to the last two times we saw , you know , the industry kind of react or behave this way , there was a period of time , you know , in the coming out of the recession , there was a period of time .

Speaker #1: I think it was two years after the the recession we saw an outsized growth in the market . Certainly Covid , you know , we saw , you know , in the year right after Covid , we saw an exact inverse of what we were experiencing in the Covid period .

Brian Kaner: Certainly COVID, you know, we saw, you know, in the year right after COVID, we saw an exact inverse of what we were experiencing in the COVID period. Then the period after, you know, 2020 and 2023, we saw an outsized performance. If you look at history, you might believe that there's something there. Right now, the focus of our organization is just to make sure that we're taking care of the volume that's coming in and that we're continuing to deepen the relationships we have with our insurance partners. As we do that, we know that we're continuing to outpace the market and would expect to continue to do that if the market continues to get more positive.

Speaker #1: And then the period after , you know , 20 and 2023 , we saw an outsized performance . So if you look at history , you might believe that there's something there right now , the focus of our organization is just to make sure that we're taking care of the volume that's coming in and that we're continuing to to deepen the relationships we have with our insurance partners .

Speaker #1: And as we do that , we know that we're continuing to outpace the market and would expect to continue to do that if the market continues to get more positive

Speaker #12: Got it . Okay . And then one one other question just around labor rates , we've seen some news headlines around regional pressure on labor rates and actually coming down from insurance companies .

Daryl Young: Got it. Okay. One other question just around labor rates. Seen some news headlines around regional pressure on labor rates, and they're actually coming down from insurance companies. Is that something that's more idiosyncratic, or are you seeing pressure on labor rates from your insurance partners?

Speaker #12: Is that something that's more idiosyncratic, or are you seeing pressure on labor rates from your insurance partners?

Brian Kaner: We are not seeing pressure from labor rates with our insurance carriers. I mean, I think the insurance carriers recognize that the cost of labor continues to move at, generally speaking, inflationary levels. You know, the cost of a labor hour or the price of a labor hour is gonna have to move commensurate with that.

Speaker #1: We are not seeing pressure from labor rates with our insurance carriers . I mean , I think the insurance carriers recognize that the cost of labor continues to move at , generally speaking , at at inflationary levels .

Speaker #1: And , you know , the the cost of labor , our that or the price of labor , our is going to have to move commensurate with that .

Speaker #12: Got it . Okay . Thanks very much .

Daryl Young: Got it. Okay. Thanks very much.

Speaker #13: Yep .

Brian Kaner: Yep.

Speaker #2: Your next question comes from the line of Bret Jordan from Jefferies . Your line is open .

Operator 3: Your next question comes from a line of Bret Jordan from Jefferies. Your line is open.

Operator: Your next question comes from a line of Bret Jordan from Jefferies. Your line is open.

Speaker #14: Hey , good morning guys . Just to flog Obviously , the impact on arrivals that you had on the very short term , does the longer term impact from higher weather related crash become a net positive , or do you think the driving reduction makes weather a net negative in Q1

Bret Jordan: Hey, good morning, guys. Obviously, the impact on arrivals that you had on the very short term, does the longer-term impact from higher weather-related crash become a net positive, or do you think the driving reduction makes weather a net negative in Q1?

Brian Kaner: You broke up on, like, one piece of your question. I don't know.

Speaker #1: I think you broke up on, like, one piece of your question. I don't know.

Brian Kaner: You broke up on, like, one piece of your question. I don't know.

Speaker #14: I was saying does the does the weather related collision create a net positive in Q1 ? Or was the , the timing of the arrivals and , and lack of driving a negative ?

Bret Jordan: I was saying, does the weather-related collision create a net positive in Q1, or was the timing of the arrivals and lack of driving a negative?

Speaker #1: Yeah , I think it probably creates a slight net negative in Q1 , but the . But the benefit we're seeing in the North probably extends into the second quarter and creates a little bit of a , of a whip tailwind as we get into the second quarter

Brian Kaner: Yeah, I think it probably creates a slight net negative in Q1. The benefit we're seeing in the North probably extends into Q2 and creates a little bit of a tailwind as we get into Q2.

Speaker #14: About scanning and calibration , you know , it is outgrowing the underlying market . Do you have a feeling for what the maybe three year outlook for scanning in calibration growth might be just as more cars require it

Bret Jordan: About scanning and calibration, you know, it is outgrowing the underlying market. Do you have a feeling for what the maybe three-year outlook for scanning and calibration growth might be, just as more cars require it?

Brian Kaner: There's been research, you know, reports processed or done on this that would suggest that that piece of business is growing at, you know, 20 to 25% a year. I think we saw, you know, something very early on that said, you know, it would grow from $1 billion to $5 billion. I believe the timeframe was till 2029.

Speaker #1: There's been research , you know , reports processed or or done on this that would suggest that that piece of business is growing at , you know , 20 to 25% a year .

Speaker #1: So I , you know , I think we saw , you know , something very early on that said , you know , would grow from $1 billion to 5 billion .

Speaker #1: I believe the time frame was till 2029 .

Speaker #14: Okay , great . Thanks

Bret Jordan: Okay, great. Thanks.

Speaker #2: Your next question comes from the line of Rozi Hassan from Paradigm Capital . Your line is open .

Operator 3: Your next question comes from a line of Razi Hasan from Paradigm Capital. Your line is open.

Operator: Your next question comes from a line of Razi Hasan from Paradigm Capital. Your line is open.

Speaker #15: Good morning . Thanks for taking my questions . Could you maybe just talk about the operating leverage potential as same store sales grow and which costs you saw improve in the quarter related to leverage , if any color there would be helpful ?

Speaker 18: Good morning. Thanks for taking my questions. Could you maybe just talk about operating leverage potential as same-store sales grow, and which costs you saw improve in the quarter, related to leverage? If any color there would be helpful.

Razi Hasan: Good morning. Thanks for taking my questions. Could you maybe just talk about operating leverage potential as same-store sales grow, and which costs you saw improve in the quarter, related to leverage? If any color there would be helpful.

Speaker #7: Yeah , I think we've always continued to well , we've always really discussed what we would expect from an operating leverage perspective and same store sales based on what you've seen historically .

Jeff Murray: Yeah. Well, I think we've always really discussed what we would expect from an operating leverage perspective in same-store sales based on what you've seen historically. If you see a steady level of same-store sales growth in that 2 to 4% range over time, we've seen kind of a 20 basis point improvement in operating leverage. It really just comes down to, you know, we do have fixed costs that we can leverage, like general manager salaries and other occupancy type costs that don't flex at all with growth. That's where we get that leverage from. You could see, you know, a 20%, a year.

Speaker #7: If you see a steady level of same store sales growth in that 2 to 4% range over time , we've seen kind of a 20 basis point improvement in operating leverage .

Speaker #7: And it really just comes down to , you know , we do have a fixed costs that we can leverage like general manager salaries and , and other occupancy type costs that don't flex at all with growth .

Speaker #7: And so that's where we get that , that leverage from . So , so you could see , you know , a 20% a year , you could see sort of a 1% overall improvement over a five year period .

Jeff Murray: You could see sort of a 1% overall improvement over a five-year period if you get consistent same-store sales growth.

Speaker #7: If you've got consistent same-store sales growth,

Speaker #15: Okay , great . That's helpful . And then maybe just your cash position , expect that to get back to . Historical levels going forward .

Speaker 18: Okay, great. That's helpful. Maybe just your cash position. Expect that to get back to historical levels going forward?

Razi Hasan: Okay, great. That's helpful. Maybe just your cash position. Expect that to get back to historical levels going forward?

Speaker #7: Sorry , could you repeat the question or cash our cash flow ? Yeah , yeah , it's certainly this year . This this end of this year was , was an anomaly in terms of , of the cash on the balance sheet .

Jeff Murray: Sorry, could you repeat the question?

Speaker 18: Cash.

Brian Kaner: Cash.

Jeff Murray: Our cash flow? Yeah. Yeah. It's certainly this year, this end of this year was an anomaly in terms of the cash on the balance sheet, as a result of preparing for the closure of the transaction with Joe Hudson's. Yes, going forward, we would expect to have the cash balances come back to their normal range.

Speaker #7: As a result of preparing for the closure of the transaction with Jo Hudson's . So yes , going forward , we would expect to have the cash balances come back to their normal range .

Speaker #15: Okay, great. Thanks for taking my questions.

Speaker 18: Okay, great. Thank you for taking my questions.

Razi Hasan: Okay, great. Thank you for taking my questions.

Speaker #7: Sure .

Jeff Murray: Sure.

Speaker #2: Your next question comes from the line of Tristan Thomas Martin from BMO Capital Markets . Your line is open .

Operator 3: Your next question comes from a line of Tristan Thomas-Martin from BMO Capital Markets. Your line is open.

Operator: Your next question comes from a line of Tristan Thomas-Martin from BMO Capital Markets. Your line is open.

Speaker #16: Hey , good morning Ryan , I think you called out in kind of an a normalized year , basically 1% benefit from miles driven .

Daryl Young: Hey, good morning. Brian, I think you called out in a normalized year, basically 1% benefit for miles driven. Should we think about that for this year as well, given we've just seen such an increase in gas prices recently?

Tristan Thomas-Martin: Hey, good morning. Brian, I think you called out in a normalized year, basically 1% benefit for miles driven. Should we think about that for this year as well, given we've just seen such an increase in gas prices recently?

Speaker #16: Should we think about that for this year as well, given that we've seen such an increase in gas prices recently?

Speaker #1: Yeah . I mean , look over a long term over a long period of time . You know , that's what we expect .

Brian Kaner: Yeah, I mean, look, over a long term, over a long period of time, you know, that's what we expect. I don't know that I haven't seen any data relative to what's happened thus far, given the gas price movement. I also wouldn't want to predict how long that's going to be. So I'd, you know, it'd be speculative for me to suggest that, you know, we're gonna see any negative associated with that. You know, people also do tend to drive more when, you know, you're also seeing inflation on, you know, airline tickets as well, driven by the price of gas, which, you know, puts people in their cars more for vacations and things like that, particularly as we get into these types of months. So I think that might be an offset anyways.

Speaker #1: I don't know that . I haven't seen any data relative to what's happened thus far . Given the gas price movement . I also don't wouldn't want to predict how long that's going to be .

Speaker #1: So I , you know , it'd be speculatory for me , speculative for me to suggest that , you know , we're going to see any negative associated with that .

Speaker #1: You know , people also do tend to drive more when , you know , you're also seeing inflation on , on , you know , airline tickets as well , driven by the price of gas , which , you know , puts people in their cars more for vacations and things like that .

Speaker #1: Particularly as we get into these types of months . So I'm , I think that might be an offset anyways

Speaker 19: Okay. No, that makes sense. Just kinda curious, as you continue to do work on the Joe Hudson's integration, anything that surprised you or any sources of, like, incremental upside from when you last updated us? Thanks.

Tristan Thomas-Martin: Okay. No, that makes sense. Just kinda curious, as you continue to do work on the Joe Hudson's integration, anything that surprised you or any sources of, like, incremental upside from when you last updated us? Thanks.

Speaker #16: That makes sense. And then, just kind of curious, as you continue to do work on the Jhudson integration, has anything surprised you or have there been any sources of incremental upside from when you last updated us?

Speaker #16: Thanks .

Speaker #1: Yeah . I mean , Jeff mentioned earlier the the notion that there's , you know , they bought a , you know , they just , they not dissimilar to us have a lot of stores that are in the maturation process still believe those stores .

Brian Kaner: Yeah. I mean, Jeff mentioned earlier the notion that there's you know, they bought a you know, they not dissimilar to us, have a lot of stores that are in the maturation process. Still believe those stores have you know, good opportunity for to be a tailwind to the business. They certainly were purchased. We bought 140 locations, you know, over the last three years leading up to 2025. There's probably some untapped value there. But the team has been very positive, very accepting of the Boyd organization. The integration is progressing very well. Couldn't frankly be happier with the pacing of the integration process at this point in time. You know, the synergies that we were expecting are real.

Speaker #1: Have , you know , good opportunity for , to , to be a tailwind to the , to the business . They certainly were purchased .

Speaker #1: We bought 140 locations . You know , over the last three years leading up to 2025 . So there's , there's probably some untapped value there , but the team has been very positive , very accepting of the Boyd organization , the , integration is progressing very well .

Speaker #1: Couldn't frankly , be happier with the pacing of the integration process at this point in time . And , you know , the synergies that we were expecting are real .

Speaker #1: And , you know , so we're very , very positive about what's what we're seeing thus far

Brian Kaner: You know, we're very, very positive about what we're seeing thus far.

Speaker #16: Okay , great . Thanks , everyone .

Speaker 19: Okay, great. Thanks, everyone.

Tristan Thomas-Martin: Okay, great. Thanks, everyone.

Speaker #13: Yep .

Brian Kaner: Yep.

Speaker #2: Again, if you'd like to ask a question, press star one on your telephone keypad. Your next question comes from the line of Zachary Evershed from National Bank Financial.

Operator 3: Again, if you'd like to ask a question, press star one on your telephone keypad. Your next question comes from the line of Zachary Evershed from National Bank Financial. Your line is open.

Operator: Again, if you'd like to ask a question, press star one on your telephone keypad. Your next question comes from the line of Zachary Evershed from National Bank Financial. Your line is open.

Speaker #2: Your line is open .

Speaker #1: Hey , Zach .

Brian Kaner: Hey, Zach.

Speaker #17: Morning , everyone . Congrats on the quarter . I'm hoping you could quantify the in impact of paint rebates in gross margins . And what are your expectations of changes there as supply consolidates

Operator 1: Morning, everyone. Congrats on the quarter. Hoping you could quantify the impact of paint rebates in gross margins. What are your expectations of changes there as supply consolidates?

Zachary Evershed: Morning, everyone. Congrats on the quarter. Hoping you could quantify the impact of paint rebates in gross margins. What are your expectations of changes there as supply consolidates?

Brian Kaner: I mean, when you're talking about rebates, are you talking about rebates from suppliers or are you talking about rebates elsewhere?

Speaker #1: I mean , when you meet , when you're talking about rebates , are you talking about rebates from suppliers or are you talking about rebates elsewhere

Brian Kaner: I mean, when you're talking about rebates, are you talking about rebates from suppliers or are you talking about rebates elsewhere?

Speaker #17: From suppliers ?

Operator 1: From suppliers.

Zachary Evershed: From suppliers.

Speaker #13: Yeah .

Brian Kaner: Yeah. I don't think we'll really talk about what's happening with rebates with suppliers. I mean, obviously we have some volume-triggered rebates that will benefit from continued growth in the, you know, in our purchases. You know, frankly, as we integrate Joe Hudson's, those things can be a benefit for us as well. Nothing on the specific numbers.

Speaker #1: I , I don't think we'll really talk about what's happening with rebates with suppliers . I mean , obviously we have some volume triggered rebates that are benefit that will benefit from continued growth in the , you know , in our purchases .

Speaker #1: And , you know , frankly , as we integrate Jo Hudson , those things can be can be a benefit for us as well .

Speaker #1: But nothing on the specific numbers

Speaker #17: And any downdraft expected as supply consolidates

Operator 1: Any downdraft expected as supply consolidates?

Zachary Evershed: Any downdraft expected as supply consolidates?

Speaker #1: No , no , I don't there's nothing that we would nothing that we see from that perspective .

Brian Kaner: No. No, there's nothing that we see from that perspective.

Speaker #17: Beauty . Thanks . I'll turn it over .

Operator 1: Beauty. Thanks. I'll turn it over.

Zachary Evershed: Beauty. Thanks. I'll turn it over.

Speaker #13: Thank you .

Brian Kaner: Yep. Thank you.

Speaker #2: Your next question comes from the line of Jonathan Goldman from Scotiabank . Your line is open .

Operator 3: Your next question comes from the line of Jonathan Goldman from Scotiabank. Your line is open.

Operator: Your next question comes from the line of Jonathan Goldman from Scotiabank. Your line is open.

Speaker #18: Hey . Good morning team , and thanks for taking my questions . Good morning . Maybe just the first one , Brian . I understand all the comments around the weather in Q1 .

Operator 2: Hey, good morning, team, and thanks for taking my questions.

Jonathan Goldman: Hey, good morning, team, and thanks for taking my questions.

Brian Kaner: Hey.

Operator 2: Good morning. Maybe just the first one. Brian, like, I understand all the comments around the weather in Q1, and obviously no one has a crystal ball. You know, going back to your comments, you know, back on the Q3 earnings call about kind of trending back to the 3 to 5% same-store sales range based on what you saw in October and the industry fundamentals, did you have any visibility on the vacation schedule and how that would line up for Q4 and the impact on that?

Jonathan Goldman: Good morning. Maybe just the first one. Brian, like, I understand all the comments around the weather in Q1, and obviously no one has a crystal ball. You know, going back to your comments, you know, back on the Q3 earnings call about kind of trending back to the 3 to 5% same-store sales range based on what you saw in October and the industry fundamentals, did you have any visibility on the vacation schedule and how that would line up for Q4 and the impact on that?

Speaker #18: And obviously no one has a crystal ball , but , you know , going back to your comments , you know , back on the Q3 earnings call about kind of trending back to the 3 to 5% same store sales range based on what you saw in October and the industry fundamentals .

Speaker #18: Did you have any visibility on the vacation schedule and how that would line up for Q4 and the impact on that ?

Brian Kaner: Not good visibility. You know, we made some changes to the way that we pay out vacation. We used to pay out vacation, you know, for people that had unused vacation time. We stopped doing that last year, and it probably had a bit of a short-term negative impact on the business, but would have been difficult for us to see that ahead of time. No real visibility. As we exited the month of October, we did see, you know, we had seen, you know, a nice bounce back in the activity in the month of October. Nothing really, you know, from a arrivals perspective really slowed as we got into November, December.

Speaker #1: Not not , not good visibility ? You know , we made some changes to the way that we , you know , that we pay out vacation .

Speaker #1: We used to pay out vacation , you know , in the for people that had unused vacation time , we stopped doing that last year .

Speaker #1: And it probably had a bit of a short term negative impact on , on the business , but would have been difficult for us to see that ahead of time .

Speaker #1: So no , no real visibility . As we exited the , you know , as we exited the month of October , we did see , you know , we had seen , you know , a nice bounce back in in the activity in the month of October , but nothing really , you know , nothing from a our rivals perspective really slowed as we got into November , December .

Speaker #1: It was really more a function of our ability to get through the work that was coming in.

Brian Kaner: It was really more a function of our ability to get through the work that was coming in.

Speaker #18: Okay . And then maybe one more for me . So if we were to strip out the noise from the vacation schedules and the weather in Q1 , would you have seen a sequential improvement in same store sales in Q4 versus Q3 ?

Operator 2: Okay, and then maybe one more for me. If we were to strip out the noise from vacation schedules and the weather in Q1, would you have seen a sequential improvement in same-store sales in Q4 versus Q3, and then again, sequential improvement from Q1 versus Q4?

Jonathan Goldman: Okay, and then maybe one more for me. If we were to strip out the noise from vacation schedules and the weather in Q1, would you have seen a sequential improvement in same-store sales in Q4 versus Q3, and then again, sequential improvement from Q1 versus Q4?

Speaker #18: And then again , sequential improvement from Q1 versus Q4

Brian Kaner: Probably, yes. Yeah, probably.

Speaker #1: Probably , yes . Yeah , probably .

Brian Kaner: Probably, yes. Yeah, probably.

Speaker #18: Okay . Thanks for taking my questions . Yep

Operator 2: Okay, thanks for taking my questions.

Jonathan Goldman: Okay, thanks for taking my questions.

Brian Kaner: Yep.

Speaker #2: And that concludes our question-and-answer session. I will now turn the call back over to Brian for closing remarks.

Operator 3: That concludes our question and answer session. I will now turn the call back over to Brian for closing remarks.

Operator: That concludes our question and answer session. I will now turn the call back over to Brian for closing remarks.

Speaker #1: Okay . All right . Well , thank you all again for joining the call today . We look forward to reporting our first quarter results in May .

Brian Kaner: Okay. All right. Well, thank you all again for joining the call today. We look forward to reporting our Q1 results in May. Thanks again. Have a great day.

Speaker #1: And thanks again and have a great day .

Operator 3: This concludes today's conference call. Thank you for your participation. You may now disconnect.

Operator: This concludes today's conference call. Thank you for your participation. You may now disconnect.

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