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Good morning, everyone. Welcome to the Boyd Group Services, Inc. Fourth Quarter 2019 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 these -- those anticipated in these forward-looking statements. The risk factors that are -- affect results that are detailed in Boyd's Annual Information Form and other periodic findings and registration statements. You can access these documents at SEDAR's database found at sedar.com. I would like to remind everyone that this conference call is being recorded today, Wednesday, March 18, 2020. I would now like to introduce Mr. Tim O'Day, President and Chief Executive Officer of the Boyd Group Services, Inc. Please go ahead, Mr. O'Day.
Thank you, operator. Good morning, everyone, and thank you for joining us on today's call, especially given the turbulent times associated with COVID-19, which I'll be commenting on later in the call. On the call with me today are Pat Pathipati, our Executive Vice President and Chief Financial Officer; and Brock Bulbuck, our Executive Chair. On January 2, 2020, I was appointed President and CEO of Boyd Group Services, Inc., and concurrent with this change, Brock moved into the role of Executive Chair. Therefore, this is my first opportunity to lead our quarterly call. Aside from the COVID-19 issues, the transition's going very well and as planned. Brock and I continue to work well together, and Brock continues to provide me with invaluable support, especially during these challenging times. On January 2, 2020, we completed the conversion of Boyd Group Income Fund to a corporate form, reporting as Boyd Group Services, Inc., effective January 1, 2020. The reasons for and benefits of this conversion include the removal of the restriction on non-Canadian ownership as well as adopting a public company structure more typical, more easily understood and therefore, more accepted by global investors and the capital markets. While this was an important change, it does not impact or change the underlying business or operations of Boyd. We released our 2019 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 www.boydgroup.com. Our news release, financial statements and MD&A have also been filed on SEDAR this morning. On today's call, we will discuss the financial results for the 3-month period and the year ended December 31, 2019, and then provide a general business update, including commenting on our COVID-19 plans. We will then open the call for questions. Overall, we're pleased with our results in 2019. During the past year, we saw meaningful growth in locations, sales, same-store sales, adjusted EBITDA and adjusted net earnings. We added a record 108 locations and entered 3 new states: California, New York and South Carolina, further expanding our market presence while also enhancing our ability to grow in these new geographies. This year builds on our multiyear track record of profitable growth validated by being named in September to the inaugural TSX30, a flagship program recognized in the top-30 performing TSX stocks over a 3-year period based on dividend-adjusted share price appreciation. In fact, Boyd has either been the best or the second best-performing 10-year stock on the TSX for 5 consecutive years. At the beginning of 2019, we adopted the new lease standard IFRS 16, which resulted in the recognition of right-of-use assets in the amount of $452.9 million, and lease liabilities in the amount of $488 million on January 1 of 2019. The adoption of this new standard impacted certain financial metrics, with a decrease in operating expenses and increases in depreciation and finance costs. During 2019, we chose to make adjustments for comparative purposes in disclosing these metrics. However, we will no longer be making such adjustments beginning with the first quarter of 2020. Our adjusted EBITDA and adjusted net earnings going forward will no longer adjust out the impacts of IFRS 16. Also beginning on January 1, 2020, as part of our conversion to a corporate form, we will no longer be reporting distributable cash metrics. And we have moved from a monthly distribution to a quarterly dividend, the first such dividend having been declared yesterday, March 17, 2020. Looking at our results for 2019. Our total sales were $2.3 billion, a 22.5% increase when compared to 2018. This reflects $326.9 million contribution from 175 new locations. Our same-store sales, excluding foreign exchange, increased by 3.3% in 2019. Foreign exchange increased sales by $38.8 million due to the translation of same-store sales at a higher U.S. dollar exchange rate. As previously commented on during our second and third quarter earnings reporting, while demand for our services continue to be healthy in most of our markets, 2019 did present a number of challenges, particularly in the second half of the year, including continuing technician capacity constraints combined with strong comps, the challenges of vacation and softness in some markets. Same-store sales declined in Canada due to a combination of economic challenges in Alberta, technician -- and technician capacity constraints in other Canadian markets. Despite these challenges, we were able to report meaningful same-store sales growth that contributed to double-digit increases in sales and adjusted EBITDA compared to 2018. Gross margin was 45.4% in 2019 compared to 45.2% achieved in 2018. The slight gross margin percentage increase is primarily due to increased DRP pricing as well as improved parts and labor margins, partially offset by a higher mix of part sales in relation to labor. Operating expenses for 2019 were $716.6 million or 31.4% of sales compared with 35.9% in 2018. Operating expenses for the year were significantly impacted by the adoption of IFRS 16, which removed $104.3 million of property lease expense from our operating expenses. If we normalize for the adoption of IFRS 16 for comparative purposes, operating expenses would have been $820.9 million or 36% of sales. Adjusted EBITDA or EBITDA adjusted for fair value adjustments to financial instruments, costs related to acquisitions and transactions and the impact of the adoption of IFRS 16 was $215.6 million, an increase of 24.3% over 2018. Adjusted EBITDA growth was primarily due to contributions from new locations and same-store sales growth. Adjusted EBITDA margin improved 14 basis points from 9.30% to 9.44% in 2019. As I've already stated for 2019 reporting, we've chosen to adjust out the impact of IFRS 16 and are reporting for adjusted EBITDA for comparative purposes. Beginning in Q1 2020, we will no longer be adjusting out the impact of IFRS 16. Had we chosen to exclude the impact of IFRS 16 in calculating adjusted EBITDA, adjusted EBITDA would have been $319.9 million in 2019 or 14% of sales. Net earnings for 2019 were $64.1 million compared to $77.6 million in 2018, impacting net earnings in both the current and prior years with the recording of fair value adjustments for exchangeable shares, unit options and the noncontrolling interest put option as well as the recording of acquisition and transaction costs. The net earnings amount in 2019 was also negatively impacted by the adoption of IFRS 16, which reduced net earnings by $4.5 million net of tax or $0.23 per unit. Excluding these impacts, adjusted net earnings for 2019 was $100.5 million or $5.06 per unit compared with adjusted net earnings of $85.6 million or $4.35 per unit in the prior year. The increase in adjusted net earnings is a result of contributions of new location growth and same-store sales growth. Adjusted net earnings was also impacted by increased finance costs on additional borrowing under our credit facility to fund acquisitions. Again, you will note that we've chosen to adjust out the impact of IFRS 16 in reporting our adjusted net earnings for comparative purposes. Although fair value adjustments continue to impact net earnings, their effect will diminish significantly as a result of the corporate conversion, which will eliminate the fair value adjustment for exchangeable Class A shares as well as all unit options, which have now been vested and settled prior to the end of 2019. In 2019, we generated $141 million in adjusted distributable cash compared to $154 million generated in 2018. We paid distributions and dividends of $10.9 million, resulting in a payout ratio of 7.7% compared to a payout ratio of 6.8% in 2018. Our approach to distributions has been to maintain a conservative payout ratio to provide returns for unitholders while preserving capacity to act on growth opportunities. Based on our continued growth, the strength of and confidence in our business, we increased distributions by 2.2% to $0.552 per unit on an annualized basis, effective in November of 2019. This was the 12th consecutive year of increased distributions to unitholders. Now moving on to our Q4 results. For the 3-month period ended December 31, 2019, we reported sales of $586 million, an increase of 18.3% over the same period of the prior year, driven by acquisition growth. During the fourth quarter of 2019, same-store sales declined 0.2, primarily due to economic challenges in Alberta and technician capacity constraints in other markets, along with continuing technician capacity constraints in many U.S. markets. Gross margin increased to 45% of sales from 44.3% of sales in the fourth quarter of 2018. Gross margin percentage increase is due to improved parts and labor margins and a higher mix of retail glass sales. As already noted, operating expenses were impacted by the adoption of the new leasing standard. Removing this impact for comparative purposes, operating expenses were 35.4% of sales as compared to 34.7% in 2018. Adjusted EBITDA was $56.4 million compared with $47.6 million when the impact of IFRS 16 is removed from the 2019 operating results for comparative purposes or $84.1 million on a post-IFRS 16 basis. Net earnings were $14.3 million in Q4 compared to $29.9 million in the same period prior year, with the decrease driven by fair value adjustments, primarily due to an increase in our unit price. Removing the impact of fair value adjustments, acquisition and transaction costs, net of tax, and the impact of IFRS 16 adoption, net of tax, adjusted net earnings per unit increased to $1.25 per unit from $1.17 per unit in Q4 of '18, a 6.8% increase. While we experienced a small same-store sales decline in Q4, it was primarily the result of same-store sales declines in Canada due to a combination of economic challenges in Alberta and technician capacity constraints in other Canadian markets, along with the continuing constraints in many U.S. markets. Prior to the more recent disruption of COVID-19, we were forecasting modest same-store sales growth in both Canada and the U.S. due to a combination of mild winter weather in some northern markets and technician capacity constraints in markets where demand was strong. We are addressing the technician capacity challenges through continued deployment of them and execution of previously disclosed initiatives, such as standardized recruitment processes and new hire onboarding and orientation as well as continued investment in our technician development program. We remain optimistic that these programs will have a positive impact on our technician capacity as the year progresses. At the end of the year, we had total debt net of cash of $893.2 million compared to $232.1 million at the end of 2018. Total debt increased significantly in 2019 under the new IFRS 16 lease standard, which resulted in recording additional lease liabilities of $488 million on January 1 of 2019. Normalizing for the impact of this new standard, total debt, net of cash, would have been $379.8 million, with the increase over December 31, 2018, being the result of 2019 acquisition activity. We, therefore, continue to have a very strong balance sheet with conservative leverage at the end of 2019 of approximately 1.8x adjusted EBITDA after removing the impacts of IFRS 16. As we announced this morning, we have increased and extended our revolving credit facility to USD 550 million, with an accordion feature, which can increase the facility to a maximum of $825 million, accompanied by the addition of a new 7-year Term Loan A in the amount of $125 million, maturing in March of 2025 and March of 2027, respectively. With these facilities, we now have over $800 million of dry powder available in cash in existing credit facilities for financial flexibility and growth. Now I would like to discuss COVID-19. Worldwide, we are all adjusting and adapting to daily changes as a result of the COVID-19 pandemic. While the impact on our business thus far has not been material, this could change quickly. The outbreak of a contagious illness such as this can impact operations, including staffing and the volume at pace -- and pace at which collision repair shops can fix damaged vehicles and may lead to temporary closure of facilities. The pandemic could also result in decreased demand for services as well as interruptions to the supply chain, including temporary closure of supplier facilities. In fact, over the past few days, we've noted a weakening of demand, possibly from customers deferring repairs to avoid exposure and the result of reduced miles driven and less road congestion, as fewer people travel to schools, offices, sporting and other public events and places. Given this high level of uncertainty surrounding COVID-19 impacts, we're in the process of making proactive changes and contingency plans relating to the current environment, and we will continue to work to address COVID-19 challenges as they evolve, so as to minimize the risk and impact on our employees, customers and shareholders. We have taken specific steps to protect the safety of our team members and our customers. Fortunately, our conservative financial strategy positions us with a strong balance sheet and financial flexibility that has been further enhanced through the increased and extended credit facility previously noted. Over and above our financial flexibility from our strong balance sheet and expanded enhanced credit facilities, we are taking additional steps to preserve and enhance financial flexibility. In the long term, the company will continue to pursue an accretive growth strategy through a combination of organic growth and -- as well as acquisitions and new store development, our immediate focus is on preserving our financial facility -- flexibility as we deal with the uncertain impacts of COVID-19. We will, therefore, be taking a temporary pause on closing and funding acquisitions until we have greater clarity and conditions that will allow our staff to safely integrate acquired businesses. We are also going to be very careful about near-term capital expenditures. Subject to adjustments that may be necessary to preserve financial flexibility due to the COVID-19 pandemic, for 2020, the company plans to make capital expenditures, including those related to acquisition and development -- excluding those related to the acquisition and development of new locations within the range of 1.6% to 1.8% of sales. In addition to normal capital expenditures, the company plans to invest $5 million in LED lighting in order to reduce energy consumption and enhance the shop work environment. This investment will not only provide environmental and social benefits, but also achieve accretive returns on invested capital. Additionally, the company plans to expand its WOW Operating Way practices to incorporate business processes -- to corporate business processes. The related technology and process efficiency project will result in a $9 million to $10 million investment and would also be expected to streamline various processes as well as generate economic returns after the project is fully implemented. Although these are our plans, which we believe to be good for our business, we will also pause on these planned investments until there is greater clarity on the impact of COVID-19. Boyd's practice of prudent financial management positions the company favorably to deal with the uncertain environment. In summary and in closing, while our immediate focus is on preserving financial flexibility to deal with the uncertain aspects of COVID-19, industry dynamics continue to drive consolidation that is favorable to our business model. Long term, the company will continue to pursue accretive growth through a combination of organic growth as well as acquisitions and new store development as a means to enhance shareholder value. With that, I would now like to open the call to questions. Operator?
[Operator Instructions]Your first question comes from the line of Dave Newman of Desjardins.
I guess the first question is going to be related to activity levels. I know you can't -- you don't have a crystal ball, for sure, neither do any of us, but more along the lines of your cost structure on fixed versus variable? And any cost that you can layup if your activity levels diminish pretty significantly here as people aren't driving, et cetera. So anything that you can do to layup costs? And maybe if you can just kind of give us a sense of the nature of the labor relationships in a third home, are you paying them or things like that?
Yes. First of all, we have not closed any facilities at this point in time, nor have we been directly impacted or our team members have been impacted by COVID-19. So we're operating generally as normal. We have effective just today, reduced our standard operating hours to Monday through Friday, 8 to 5 p.m. from more extended hours, including Saturdays previously. That will help us deal with both the likely short-term decline in business and to more effectively manage and provide flexibility to our teams. Our workforce is largely commission-based, so our variable expenses can go down fairly meaningfully. But obviously, we've got to consider all factors, including the long-term relationship and the importance our employees have on our business over time.
Okay. And then just maybe, Tim, just looking at mitigants here, risk mitigants, overall. I'm thinking you've got 700 centers, you've got great geographic separations. And I would assume on the shop floor that you've got social distancing. So operationally, how are you guys handling, I guess, the potential impact?
Well, we've taken a number of steps. Many of them following government guidelines and government advice. First of all, a couple of weeks ago, we canceled all nonessential travel. So none of our team members are traveling. And for the most part, none of our operating team leadership is visiting store to store right now in an effort to make sure that we don't do anything that might spread COVID-19. We've shared and educated our staff on the CDC guidelines and specific practices that we have asked them to take to keep our work environment safe. We're obviously practicing social distancing within our shops. Our shops tend to be fairly large with not that many people so that's not an overly significant challenge. We've set up a team that meets twice a day right now to evaluate the environment and provide communications and advice out to the field. And we've got a number of other protocols set up to respond in the event that we have more impact from it. So I feel like to the extent that a company can be prepared to deal this -- deal with this, I feel as if we're pretty well prepared. But time will tell as this unfolds.
Yes, and your balance sheet's in perfect shape. And then last question for me, and I'll hand over the line. If you're looking at the sort of insurance relationships that you have today, the insurers, have they eased up on, I guess, some of the criteria that they follow? I'm thinking like, cycle times and things like that? Like are they giving you a bit of a break in the event it takes a longer time to actually get a vehicle fixed?
Yes, I'd say the conversations we've been having with our clients have not focused on metrics such as that. It's more our ability to continue to service their customers and do the right thing and have a safe environment. So to date, we've had no clients express concerns that it might take a couple of days longer to fix cars. I think really, everybody is pretty focused on a safe work environment and taking care of customers right now.
Okay. So just to reiterate then that they won't hold you to, I guess, criteria under some of the performance-based agreements?
No, I didn't say that. I think the -- we haven't even had those discussions with them, and we probably won't have those discussions. We really haven't seen an impact yet. I suppose if we're impacted, we could consider doing that. But our focus right now is really on taking care of our team members and our customers and operating as well as we can.
Your next question comes from the line of Michael Doumet of Scotiabank.
So just given the prevalence of private equity players and the collision repair business and their use of higher leverage. And as well as less well-financed mom-and-pops, I mean, what are your overall thoughts on the ability of the industry to withstand a short-term economic shock?
I think that's difficult for us to say. I will say that we're comforted by our balance sheet and our financial position. And I -- and that's probably what I would say on it. I guess further to that, many of the single shops that we've spoken to and that we've acquired over the years, have very little leverage often on their own properties outright. But this situation is going to put a strain on really almost all players, probably all players in the industry.
Well, Michael, if you look at the #2, 3 -- if you look at the 4 of the big players, they're all privately owned, and they're all highly levered. And the leverage varies from 4 to 7.5x us. So certainly, it's going to put a strain on their balance sheet as well as their financial condition. So beyond that, it's very difficult to handicap because their sponsors are -- how they're going to act. Are they going to infuse more capital during these uncertain times or not? It's going to be a big wild card.
No, that's helpful color. I mean, presumably, whatever the impact, Boyd comes out stronger on the other side, but...
Absolutely, yes. Yes, we are very well positioned compared to the competition.
Okay. Just changing topics entirely here, maybe I want to drill down on the quarter specifically and in particular, Alberta. I mean, Note 25 in your disclosures, you can calculate that the Canadian sales were down 5% in Q4. Alberta accounts for approximately 10% of the locations in the country. So I'm just wondering how much of those declines were contained specifically to Alberta? And as a follow-up, I mean, particularly in light of the lower oil prices, which was a 2020 event. I mean, how should we think about Canada relative to the gas for 2020?
We really are breaking it out market by market. But I think that Alberta has been under significant economic pressure, really, for some time, and it's worsened. And the decrease in oil prices aren't likely to help that. But the -- it was really a combination of soft economy in some areas and technician constraints in other areas.
Okay. Okay. And then maybe just one last question. I mean, FX, that's presumably going to be a nice tailwind for you guys, or at least as an offset. I'm just wondering for -- as it relates to the U.S.-Canada translation. I mean, is that all translation? Or is there some transactional benefits as well, I mean, outside your corporate costs?
No, I think it's mostly translation because our revenues and costs are denominated in the respective dollars. Like in the U.S., if you take 85% of revenues as far as the cost. So we have a natural hedge built in, it's mostly translational. But the other point you made is true. Like right now, the Canadian dollar is CAD 1.40, CAD 1.41. So to that extent, we'll have a tailwind compared to the first quarter for last year.
Your next question comes from the line of Furaz Ahmad of Laurentian Bank Securities.
Just first question, with regards to the drop-off in demand that you mentioned over the last couple of days, would you be able to quantify the magnitude of that decline?
We're not prepared to do that right now. It's -- we're looking at a very, very small amount of data. But we have seen a decrease in demand in the short term. We don't know how long that will be sustained or if it's even a real trend. It's just too short term to note
Okay, that's fair. And secondly, just on acquisitions. With regards to the pause in acquisitions, does that mean that you're going to just stop closing and funding the acquisitions? Or will there also be a pause in sourcing and having discussions with potential inquiries?
Yes, that's a great question. Thank you. Our intent is to continue to pursue acquisitions with our business development team as we have. And once we have greater clarity on the impact of COVID-19, and we know we can get team members safely into markets for integration, then we'll be prepared to move forward again. There's just enough uncertainty right now on both fronts that we're pausing for the time being. But we're going to continue to build relationships and prepare ourselves to move forward again with growth.
okay. And then I guess well -- sorry, go ahead.
If we're -- I mean it's difficult -- yes, while it's difficult to handicap the short-term impact of COVID-19 on acquisitions, our long-term thesis for growth remains intact. If any, it's in a better situation. So please keep that in mind, take a longer-term view.
Yes, absolutely. And I imagine perhaps the pricing might come down for some of the smaller shops that might have some liquidity concerns. And given your strong balance sheet, those might be more readily available, I imagine?
Yes. And there could be challenges with capital available for financing acquisitions from others, so...
Okay, perfect. And last question for me. Have you seen any weakness in your supply chain for parts thus far? And just to add to that, in terms of your inventory levels for parts, how much of a runway do you think you have before you start to run into potential issues if there is an issue in supply chain?
Yes. So on your first question, we've not yet seen any issue in the availability of parts in the marketplace, nor have we had an issue with delivery of parts to our facilities. On the second point, so the suppliers really stock the inventory that we need. We do not buy parts and stock them for repairs because each repair is unique. But we're really reliant on the supply chain to get us the needed parts as we identify them.
Your next question comes from the line of Bret Jordan of Jefferies.
When you think about the -- your comment about weakness in the last 5 days or so, is that -- I think -- do you think that's tied to lower driving rates? I mean, when you think about the flow-through of a crash to work for you? Or is that just people being distracted in using their car to stockpile toilet paper as opposed to getting a repair done? Yes, I guess, at what point will you see the impact of miles driven?
Yes. To be clear, we didn't say 5 days. We said very recent. And I think in our MD&A, we commented that it's likely related to the fewer people on the roads, traveling to work, school, sporting events, public events and things of that nature. There are just fewer miles being driven right now. And our business is really predicated upon miles driven. So with the slowdown in miles driven, I think we can anticipate a slowdown in available opportunities.
Okay. And then I guess --
Tim -- sorry, Tim, It's Brock. Just to add, we did comment as well that it is likely, Brett, in the early going here. That we're seeing potentially some people just defer on bringing their vehicle in for service because people are staying home. People are attending. As you point out, they're being distracted with other things, and they're not going about their daily life in a normal fashion. And that's causing -- we suspect that, that would be causing some of the recent activity that we're seeing as well. We're not sure that it's yet a flow-through of a reduction in miles driven, although that certainly could be part of it as well.
Okay. And then I guess, in past quarters, we commented about labor shortage driving more parts replacement than repair and a negative impact to margin. Is there a tipping point where a little bit lower volume would be beneficial to your margin, a 3-year 5% reduction, is that a positive in the sense that it's lower sales with better profit?
I'd rather have the sales, I think. So I mean, it's probably better to have more revenue throughput and repair as much as we can anyway, which is always our focus.
Okay, great. And I think Pat had commented about the large competitors leverage ratios. Are you seeing any changing operation execution with any of the large competitors, either labor availability coming from maybe the third largest player or anything changing in that scenario?
I would say it's too early to know whether there's any impact like that. This is -- has moved so quickly that, that has really not been on our radar.
Your next question comes from the line of Zachary Evershed of National Bank Finance.
Congrats on the quarter. Can you run us through how your backlog changed over Q4 and how it's acting in Q1 thus far?
I don't know that -- we don't normally disclose backlog. So I don't have a specific answer for you on that. Our backlog has remained healthy. But I'd remind everyone that when we talk about backlog, we don't have a 3-month backlog. Our backlog is measured in days, not weeks. So we don't have the kind of backlog a manufacturer might have.
And then what kind of additional color can you give us on how technician capacity constraint differed in Q4 versus the first 3 quarters of 2019?
I would say they were fairly similar. We were up against pretty high comps in the prior year, and we weren't successful at building our workforce up at the same rate we had been in the first half of the year. But I did mention in my comments that we've done -- we have a number of initiatives in place that are ongoing that I'm optimistic will help us, including some of the things to allow people to feel more comfortable when they first join our company. And I'm also very pleased with our technician development program. And while that doesn't have an immediate impact on capacity, it does help us grow our patent capacity at a reasonable pace over several months. So I think we've got some good programs in place to address that.
Perfect. Then one last one for me. What metrics are you guys going to be watching to determine when to start the M&A machine back up?
Pat, I don't know if you have a specific comment on that.
There are 2 aspects to the acquisitions. One is the liquidity. We have ample liquidity. The second one is when we acquire a shop. So we send people for integration, and we need to make sure people are safe to travel because employee safety is very important to us. So when we are comfortable that that's going to happen, we'll dial it back up.
And it's Brock, just if I might add, obviously, we're all trying -- every business is trying to figure out the overall impact on demand for services because that will be a driving factor in determining every company's matter in which they're dealing with liquidity. So we'll be obviously watching business activity levels in the stores and extend of store closures, if any. Demand levels, assignment count levels, employee absentee levels, all of those things will -- which are inputs into the overall productivity and financial outcome of our business. So all of those things will be considered as inputs into determining when we feel that we have enough confidence in order to start deploying significant amounts of capital towards growth again.
Your next question comes from the line of Jonathan Lamers of BMO Capital Markets.
Tim, and maybe Brock, if you think back to prior periods over your career with Boyd when collision claims volumes decline generally, how -- and seller multiples declined, how long did it take before you started to see seller multiples come down in those periods?
Brock, I'll -- maybe I'll start and let you add-on to that.
Sure.
I think in the early days of our growth, seller multiples were considerably lower. They increased over a number of years relatively slowly, and I think they've been fairly stable since that time. What impact the current COVID crisis will have on multiples and -- I guess, we don't know yet. But Brock, I would invite you to add anything on to that, that you're seeing.
Yes. I think you've outlined sort of valuation multiples, particularly as it related to sort of the 2008, 2009. We were a different company at that time. We were emerging from more difficult times and being very cautious on our growth, and we were operating in an environment where valuation multiples had been historically low. In terms of recovery on demand for services, I don't think any of us have seen sort of the unprecedented impact on business that we're now seeing with COVID-19 before. So I think we're all being optimistic that globally, we're going to get through this in a -- in some relatively short period of time so that business can return. And certainly, we'll have to deal with some of the lasting effects of the toll that this will take on the economy. But I think we really -- I don't think anyone has visibility into sort of how deep demand declines can be and how quickly they can recover. This is unprecedented.
Your next question comes from the line of Chris Murray of AltaCorp.
Just -- I mean thinking about the uncertainty, is it fair to think that as you get better clarity that you're going to be able to give us some updates as we move through the quarter?
We haven't discussed when we would provide updates on clarity. So I'm not sure that I can answer that right now, Chris. If there's something material and meaningful update, we would do that.
Sorry, Pat, did you have something that you wanted to add or...
No, no, I think that's what I was going to say that if it's going to have a material impact, and certainly, we'll have an update.
Okay, fair enough. Then just maybe just going back to the new financing package. Just Pat, if you can give us of couple more points, if you don't mind. Are there any material changes in the cost of this debt, both the revolver and the Term Loan A? Is it similar to your grid? Or where would you think that the pricing is? And can you give us a rough idea, is it -- the accordion feature, is it mainly only for acquisitions? Or is it something that you could tap as necessary?
There are I think a couple of questions. One is the pricing. The pricing is more attractive on the pricing grade for the revolving credit facility. And for the Term Loan A, we actually disclosed in the MD&A. So it's the 3.455%, which is a 7-year fixed with no prepayment penalty. So it's a very attractive loan we have. That's question number one. And the second one is in terms of the use of proceeds used for general corporate purposes, so we can exercise the accordion. We don't have to use it for solely acquisitions. So we can use it for general corporate purposes.
All right, great. That's helpful. And then I guess my last question. With all the uncertainty, one of the pieces of discussion is that this could actually cause a general recession, not just related to the COVID-19 period, but even follow-on. Can you remind us maybe going back and thinking about even your early days, but -- or even maybe, Tim, your previous history in the industry, how should we be thinking about just consumer behavior, buyer behavior, in terms of just the industry as a whole?
Yes. I would say what we experienced in the great recession, miles driven decreased and that has an impact on the number of available claims. And then there was likely a greater tendency for people that did have a claim to consider deferring repair if they weren't working because they may have needed the cash for other purposes. So we did see some same-store sales declines based on that back in 2008 and '09. They weren't all that dramatic. And so I think I would expect a similar pattern, although it's difficult to tell exactly what's going to happen with the combination of the COVID-19 and then whatever economic challenges occur as a result of that. But that would be the history that we've seen.
Yes. In terms of -- Chris, if you go back and look at the great recision, I'm not suggesting that it's a good proxy for what we are likely to experience here. In 2008, actually, we had a positive same-store sales growth. We had 5.5%. But 2009, we had a 2 quarters -- back-to-back quarters of decline. In Q2 of '09, we had a 5.7% decline and Q3 3.6%. For the year as a whole, it declined by 2.4% in 2009 and 2010, again, it was positive. So you could experience a small decline, but as I say, it's difficult to say it's going to repeat itself.
Yes, I just might -- sorry, Chris, I just might add that in all of our commentary surrounding our same-store sale declines for that period of time, '08-'09, the market, based on inflation that we had, the collision market was down more significantly than that. But the consolidation trends, the industry tailwinds that were serving us well allowed us to outperform the market. And in a meaningful way, minimize the same-store sales decline relative to what we sort of saw overall industry decline to be.
Okay. And along those lines, just a quick question for you. I mean, do you think there's a possibility that your penetration into DRPs as you get a lot of shift in the industry could actually accelerate? Where you could actually capture additional growth? Are they growing on they -- the insurance companies wanted to keep their issues down would accelerate transferring business to you from other repair shops?
As we've discussed before, most of the DRP programs that we participate in are performance-based. So we can earn a greater share of the business by having superior metrics to the competition in the marketplace. Our WOW Operating Way helps us achieve that. And so we'll continue to focus on delivering the value to our customers, and I think that will allow for share gains. There are some benefits to insurance carriers for concentrating volume in terms of their overhead and administration to manage claims through a company like Boyd, which I think also provides a bit of a tailwind. But I think the opportunity for us to grow our share remains -- it has been there, and I think it remains going into the future.
Your next question comes from the line of Daryl Young of TD Securities.
Just one quick one for me. On the same-store sales growth, you'd mentioned that you were forecasting moderate growth ex COVID-19 impact. Presumably, that is mostly technician weakness, but maybe you could just provide a little bit more color and if that has anything to do with the declines in collision repair claims we're seeing industry-wide?
Well, I think the comment that we made was that we were seeing modest same-store sales growth before COVID-19 hit. We don't really know where the quarter will end as a result of that. What we've experienced is in the northern part of North America, including much of Canada. It's been a pretty mild winter, which is not great for us. And we still have technician capacity constraints in markets that have had good volumes of work. And it's really that combination that was -- put us on a path toward modest same-store sales growth. So it's really a combination of those 2 factors.
Okay. And then on the general recession discussion for same-store sales growth, you're obviously still outperforming the market today, but given how much a larger scale you have, would you expect to be closer to the market, I guess, in a downturn versus 2008, 2009 period?
I don't have any reason to think that we can't continue to outperform the market and take share. But so -- no, I don't think that -- we're not really that large in any of our markets. Our share of the market is still not so large that I think we have to follow the market.
Yes, Daryl, still the Big 3 has only 8% of the shops and 16% of the revenues. So it's not -- it doesn't represent a substantial chunk of the market. So as Tim pointed, I think, no, we still believe we can outperform the market.
[Operator Instructions] Your next question comes from the line of Steve Hansen of Raymond James.
Just a single one for me. Just curious about your decision to enter California earlier this year, and I know it's early, but just any experience you've had thus far in that market? Given a relatively new operating environment for you. And COVID notwithstanding, just maybe perhaps a growth path for a market like that, it's been absent from your map for so long. It's a big market. You're there now. Just trying to understand what the growth plan or trajectory might be in a bigger market like that.
Yes. We actually closed on the California acquisition before the end of last year. So it was not a Q1, it was a Q4 acquisition. I'd say we've been pleased with the initial entry into California. The businesses, operationally, are performing quite well. It's a small footprint. 9 shops in the state the size of California is pretty insignificant, and we look forward to further growth in that market. I think you noted that it is a different environment. We've certainly -- we knew that going in. I think we are well prepared to understand and kind of deal with the different regulatory and business environment that we have in California. And I look forward to using that as a platform for growth.
There are no further questions over the phone lines at this time. I turn the call back over to the presenters.
Very good. Well, thank you, operator, and thanks to all of you once again for joining our call today. We look forward to reporting our first quarter results to you in May. Thanks again, and have a great day. Bye-bye.
This concludes today's conference call. You may now disconnect. Thanks, everyone.