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Boyd Group Income Fund reports Q2 net earnings of $2.1 million on lower sales

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WINNIPEG - Boyd Group Income Fund (TSX:BYD.UN), Canada's largest auto body repair company, reports it earned flat profits of $2.1 million for the second quarter as currency effects eroded sales.

The Winnipeg company, which has major operations in Western Canada and in the United States, said Friday its sales fell 5.1 per cent to $52.3 million from $55.1 million, primarily due to the weakness of the U.S. dollar.

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In another development, Boyd also raised its monthly distribution by 4.5 per cent to 2.875 cents from 2.75 cents, beginning in October.

"We are pleased to again report stable net earnings, EBITDA, and operating cash flow during the quarter, despite the negative impact of the weaker U.S. dollar on our U.S. operations, the continuing negative impact of the economy and the carry-over impact of extreme mild and dry winter months in many of our northern markets," Brock Bulbuck, president and CEO, said before stock markets opened Friday.

"As a result of our operational efficiencies and cash flow strength, we have announced a further 4.5 per cent increase in our monthly distributions, which represents the eleventh consecutive quarterly increase."

Breaking down its results, Boyd said sales in Canada totalled $16.5 million, down $2.1 million or 11.3 per cent, mainly because of a softer market and the impacts on the auto body repair business of mild and dry weather.

Mild and dry weather usually produces fewer car accidents and leads to fewer rust repairs on vehicles.

Sales in the U.S. fell 1.9 per cent to $35.8 million. Translation of U.S. revenues at a weaker U.S. dollar exchange rate relative to the Canadian dollar cut top-line sales by $4.6 million.

The Boyd Group operates in the four Western Canadian provinces under the trade name Boyd Autobody & Glass, as well as in 11 U.S. states under the Gerber Collision & Glass and True2Form brands.

The company also operates Gerber National Glass Services, an auto glass repair and replacement referral business.

Looking ahead, Boyd Group said its business outlook remains cautious.

"Despite our positive view on our industry positioning and opportunities as well as some sporadic signs of economic improvement, unemployment rates remain at high levels and our market conditions remain challenging," added Bulbuck.

"As such, until economic conditions stabilize and unemployment rates show steady and sustainable declines, we expect to continue seeing challenges in achieving same-store sales growth.

"Our objective continues to be to gradually increase distributions over time. However, we are also committed to a conservative distribution policy that will provide us financial flexibility, the ability to support our growth initiatives and the ability to maintain distribution levels into 2011 despite any trust taxes that may be payable . . ."

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