Operator: Good morning, everyone. Welcome to the Boyd Group Services, Inc. Third Quarter 2025 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 related 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 and other periodic filings and registration statements, and you can access these documents at SEDAR's database found at sedarplus.ca and on EDGAR at sec.gov. I'd like to remind everyone that this conference call is being recorded today, Wednesday, November 12, 2025. I would now like to introduce Mr. Brian Kaner, President and Chief Executive Officer of Boyd Group Services, Inc. Please go ahead, Mr. Kaner.

Brian Kaner: Thank you, operator. Good morning, everyone, and I apologize for my voice. I'm fighting off a bit of a cold, but thank you for joining us for today's call. On the call with me today is Jeff Murray, our Executive Vice President and Chief Financial Officer. We released our third quarter results before market 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'll discuss the financial results for the quarter ended September 30, 2025, and provide a general business update. We will then open the call for questions. It's great to be here today to discuss our third quarter results and what has truly been one of the most exciting and transformative periods in Boyd's history. Since the beginning of the third quarter, we've made significant strides across our business. We announced a return to positive same-store sales on the back of improved industry conditions, executed well on our margin initiatives and reached several exciting milestones, including surpassing our 1,000th location, announcing a definitive agreement to acquire Joe Hudson's Collision Center and listing our stock on the New York Stock Exchange. It's been an exciting quarter, and I'm proud of what the team has accomplished. Turning to our third quarter results. I'm excited to report that the momentum we experienced in our business in July was sustained throughout the quarter and early into the fourth quarter. For the third quarter, we generated positive same-store sales growth of 2.4%, with growth coming from continued market share gains as well as an improvement in industry conditions. While it remains early in the fourth quarter, same-store sales for October continued to show positive growth, delivering further improvement compared to the third quarter, falling within the range outlined in our 5-year plan. Over the past year, we've seen an improvement in several headwinds that have been negatively impacting repairable claims. These include a moderation in insurance premium increases, which are now back in line with historical levels as well as a return to growth in used vehicle prices. Most recently, we've begun to see some insurance carriers in the United States seek regulatory approval to decrease insurance premiums. These trends combined with our return to same-store -- positive same-store sales and support our view that the industry conditions are normalizing and that Boyd is well positioned to continue to outperform. In addition to the top line growth, we generated strong adjusted EBITDA margin improvement during the third quarter, with margins increasing 170 basis points over a year -- on a year-over-year basis to 12.4%. As a result, adjusted EBITDA grew by 22.8% in the third quarter. The margin improvement came from both gross margins and positive operating leverage as we continue to make headway on our Project 360 initiatives, our cost transformation plan and achieved positive operating leverage from the return to same stores -- from the return to positive same-store sales. With Project 360, we've achieved over $30 million in annualized run rate savings and are on track to reach a $70 million run rate by the end of 2026 with the full $100 million of savings expected by 2029. With the indirect staffing model now fully implemented, we continue to focus on direct and indirect procurement savings through centralization of our procurement spending to fully leverage the benefit of Boyd's scale. We also had a busy quarter with new location growth, adding 24 locations with 17 coming from acquisitions, including the acquisition of L&M Autobody in August as well as 7 new start-up locations. In addition, earlier this week, we completed a 5-location multi-store operator acquisition in Nova Scotia, Canada, which marks our initial entry into this province. We continue to target the opening of an average of approximately 8 to 10 new start-up locations per quarter and currently expect to open 13 start-up locations in the fourth quarter with an additional 18 currently in development through the end of September 2026. I'd like to take some time on today's call to discuss our definitive agreement to acquire Joe Hudson's Collision Center and the related financing as they mark a significant milestone in our company. Joe Hudson's is a company we've long respected for its strong operational performance, disciplined growth strategy, culture and concentrated regional footprint in the Southeastern portion of the U.S. With 258 locations, Joe Hudson's brings scale, operational excellence and strong local presence to complement our existing footprint. As we've mentioned in previous calls, we've been patient in waiting for the right complementary MSO to come along, one that made sense strategically and financially, and Joe Hudson's checks both boxes. This acquisition accelerates our growth, solidifies our position as one of the leading players in the highly fragmented North American collision industry and generates meaningful synergies. The anticipated synergies will benefit both Boyd and Joe Hudson's as we look to achieve direct and indirect procurement savings from the combined business as well as achieve operational benefits from our enhanced density. We estimate that these synergies will be between $35 million and $45 million with approximately 50% in the near term and the remainder by 2028. To support the deal, we successfully implemented an $897 million bought deal initial public offering in the U.S. and a CAD 525 million senior unsecured notes offering, which together secured the financing we needed to complete the acquisition. We also completed a CAD 275 million bond offering to refinance existing debt and strengthen our balance sheet earlier in the third quarter. Through these initiatives and based on the exercise in full by the underwriters of their option to purchase additional common shares as part of the public offering, we have maintained a disciplined financial approach and expect our pre-IFRS debt-to-EBITDA ratio to be at 3.1x at the closing of the acquisition, returning to levels -- returning to current levels as early as the end of 2026. Lastly, the listing of our shares on the New York Stock Exchange marks a major milestone in Boyd's journey, increasing our visibility and giving us access to a broader pool of investors as we continue to execute our long-standing growth strategy. I'll now turn it over to Jeff to go through our third quarter financial results in more detail. Jeff?

Jeff Murray: Thanks, Brian. As Brian highlighted, we had a strong third quarter with positive same-store sales growth and solid margin improvement as we continue to execute on Project 360. During the third quarter, our sales increased by 5% to $790.2 million with same-store sales, excluding foreign exchange, increasing by 2.4%. In addition, $22.2 million in incremental sales were generated from 64 new locations that were not in operation for the full comparative period. As these stores mature over the next 2 to 3 years, we expect that they will contribute meaningfully to sales. Over the past 2 quarters, we have begun to see an improvement in industry conditions. Based on claims processing platform data for the third quarter, we estimate that repairable claims were down in the range of 3% to 5%. This represents a meaningful improvement from both the second quarter of 2025, which experienced an estimated decline of 6% to 8% and the first quarter of 2025 during which claims were down an estimated 9% to 10%. As Brian highlighted, we have seen this strength continue in the early part of the fourth quarter and our same-store sales delivering further improvement when compared to the third quarter, falling within the range outlined in our 5-year plan. Gross margin was 46.3% in the third quarter of 2025, up 60 basis points from the 45.7% achieved in the same period of 2024. Gross margin percentage increased due to several factors, including the benefits of internalization of scanning and calibration and an increase in parts margins. Improvement in parts margin was a result of Project 360 initiatives to enhance parts procurement to drive cost efficiencies. Now turning to operating expenses. For the third quarter of 2025, they were $267.6 million compared to $263.4 million in the same period of 2024. As a percentage of sales, operating expenses declined 110 basis points to 33.9% from 35% last year. Operating expenses as a percentage of sales were positively impacted by the indirect staffing model, which was introduced in the second quarter of 2025 as part of our Project 360 initiative. The full cost savings from the indirect staffing model were successfully realized during the third quarter. Future savings are expected to include additional direct and indirect procurement savings as we focus on a more centralized approach to purchasing in order to fully leverage Boyd's scale. In addition to Project 360, the decrease in operating expenses as a percentage of sales was positively impacted by our return to positive same-store sales growth, which provided improved operating leverage on certain operating costs. Offsetting some of the benefits to operating expenses were incremental costs associated with the internalization of scanning and calibration and new location growth. While the internalization of scanning and calibration contributes positively to gross profit and adjusted EBITDA, it does not contribute incremental sales and therefore, increases operating expenses as a percentage of sales. Adjusted EBITDA or EBITDA adjusted for fair value adjustments to financial instruments and costs related to acquisitions and transformational cost initiatives was $98.4 million, an increase of 22.8% over the same period of 2024. Adjusted EBITDA margins improved 170 basis points to 12.4% in the third quarter, up from 10.7% in the third quarter of 2024. The year-over-year increase in adjusted EBITDA was the result of improvements in gross margin, realization of the cost savings from the indirect staffing model and direct and indirect procurement cost savings. Net earnings for the third quarter of 2025 was $10.8 million compared to $2.9 million in the same period of 2024. Excluding fair value adjustments and acquisition and transformational cost initiatives, adjusted net earnings for the third quarter of 2025 was $13.3 million or $0.62 per share compared to $3.2 million or $0.15 per share in the same period of the prior year. Net earnings and adjusted net earnings for the period benefited from higher adjusted EBITDA, which was partially offset by increased depreciation expense and increased finance costs. The increase in depreciation expense was primarily due to the growth in new locations, investments in network technology upgrades as well as growth related to the calibration business. At the end of the period, we had total debt net of cash of $1.3 billion. Debt net of cash before lease liabilities increased from $487 million at December 31, 2024, to $521 million at September 30, 2025. Debt net of cash before lease liabilities increased as a result of new location growth. During the third quarter of 2025, the company successfully closed a private placement offering of CAD 275 million senior unsecured notes. The net proceeds of the offering were used to repay existing indebtedness. During 2025, the company plans to make cash capital expenditures, excluding those related to network technology upgrades and acquisition and development of new locations within the range of 1.6% and 1.8% of sales. In addition to these capital expenditures, the company plans to invest in network technology upgrades to further strengthen our technology and security infrastructure and prepare for advanced technology needs in the future. Excluding expenditures related to network technology upgrades and acquisition and development, the company spent approximately $16.2 million or 2% of sales on capital expenditures during the third quarter of 2025. The company spent $20.5 million or 2.7% of sales on capital expenditures, excluding expenditures related to acquisition development during the same period of 2024. I will now pass it back to Brian for closing remarks.

Brian Kaner: Thanks, Jeff. Looking forward, our outlook remains strong. With a return to positive same-store sales growth on the back of improved industry conditions, a positive start to the fourth quarter, continued progress on Project 360 and a transformative acquisition, Boyd is well positioned for sustainable growth and continued value creation in the coming years. Before I conclude, I want to thank our entire team from technicians and frontline staff to regional leaders and support teams for their hard work and dedication. It's their commitment and collaboration that makes achievements like this possible. With that, I'd now like to turn the call over to the operator for questions.

Operator: [Operator Instructions] Your first question comes from Chris Murray with ATB Capital Markets.

Chris Murray: Maybe turning back to the outlook a little bit. Can you maybe give us some more color on what you're starting to see in the industry in terms of the turn? And you talked about same-store sales growth in line with your historical average, but that's kind of -- that 3% to 5% range is a bit wide. I was wondering if you could maybe help us understand kind of the magnitude of the uplift you're seeing and anything that we should be aware of in terms of thinking about how this might extend into 2026.

Jeff Murray: Sure. Yes. Thanks, Chris. Yes, in terms of what we're seeing, we're really commenting on the fact that the conditions that are improving in terms of seeing the diminishment in the inflation around insurance premiums, stabilization of used car pricing, and those are the dynamics that are helping to -- that we're seeing affect our business. We did see an improvement in the first month of Q4 compared to the Q3, pushing us into that range. And so Q3 was 2.4%. The range -- our long-term outlook range is kind of in that 3% to 5%. So it was only 1 month. It's hard to necessarily provide much clearer guidance than that for just 1 month results. But essentially, we're moving into that 3% to 5% long-term range, which is obviously incredibly positive.

Chris Murray: Okay. And any thoughts around anything you're hearing around industry trends as we extend into 2026?

Brian Kaner: Yes, I'll take that. I mean, look, I think as we've said, the industry drivers around what's happening with used car prices that are up to kind of flat to slightly up, certainly helping the total loss situation. And then I think as insurance premiums come down, our expectation is that people will better insure themselves and put themselves in a better coverage position, which will ultimately result in them being able to file a claim should they get into an accident.

Chris Murray: Okay. That's helpful. One question I just wanted to maybe get some explanation on is with the Joe Hudson's acquisition. You talked about it was about a $1.3 billion purchase price, but then you also mentioned briefly that it was kind of net of tax, it's more like $1.15 billion. Can you just walk us through how that delta works and how we should be thinking about your tax rates and kind of like for what duration or how structural is this going to be on a go-forward basis? And I guess the cash tax impact of all that would be helpful, too.

Jeff Murray: Sure. Yes. Thanks, Chris. So really, what we're talking about is the fact that through the structuring of this transaction, we're able to get full tax shield or tax shelter on approximately $1 billion worth of the purchase price. And so we're going to be able to have tax amortization that's going to shelter not only what we expect to be Joe Hudson's net income, for a period of time to use up that shelter, but also some of Boyd's taxable income as well. So there's going to be this opportunity where from an accounting perspective, we'll still be recognizing tax -- income tax expense at the same level, but it won't be on current tax. We will actually have cash tax savings. And so we'll pay very little cash taxes as long as we have those deductions over the next period of time. And we've essentially done a DCF on those savings to determine that the $1 billion of shelter, it's approximately $250 million, $260 million of actual tax deductions. And when you present value that, it results in $150 million current benefit.

Operator: Your next question comes from Derek Lessard with TD Cowen.

Derek Lessard: Congrats all around. Just a couple of questions for me. Outside of the Joe Hudson's acquisition, it does look like sort of your bread and butter type SSO, MSO acquisitions have picked up the pace in the last couple of quarters. Just wondering if you can maybe talk about the drivers behind that and sort of the outlook going forward.

Brian Kaner: Yes. Well, I think, first of all, we've always suggested that we'd get back to a level where we had been historically, where we're planning for 80 to 100 units a year. We did have a slower start to the quarter or to the first half of the year. That was primarily driven by just what was happening in the market itself, tougher to put new locations in the ground when the market backdrop is soft. It's just tougher to get insurance carrier support when we're doing that. So as the market starts to come back, it comes back to the larger players first. And so what we're seeing is probably a bit of an influx in the pipeline of those kind of smaller MSOs and single shops that are more willing to sell that, coupled with then our confidence in the ability to get those locations ramped to a level that we would expect them to ramp to over our normal maturity curve. That gives us the confidence to be able to turn on the acquisition pipeline a little bit more aggressively. In addition to that, we're starting to see the -- what we've also talked about is half of our growth coming from greenfield locations -- greenfield, brownfield locations, you're starting to see that pipeline mature. And as that pipeline matures to that 8 to 10 locations a quarter, it gives us that insulation that we need to really have almost a guaranteed number of new units opening every single quarter and then really the toggle becomes how are we going to do on the M&A side. And so far, the pipeline remains very robust. As we've outlined in the commentary with Joe Hudson's, we still expect -- even with Joe Hudson's, we still expect to acquire 80 to 100 or acquire or open 80 to 100 new locations every single year as part of our 5-year plan. And the leverage positions that we referenced in the material include us continuing to open 80 to 100 new locations every single year.

Derek Lessard: Great color, Brian. And then one final one for me. Just in terms of returning capital to shareholders, 2% dividend bump. Just how do you think about -- how do you think about that and the balance between growth and acquisitions and buybacks and dividend raises versus your leverage?

Jeff Murray: Yes, Derek. So we've obviously had a very, very conservative dividend payout ratio for a long time, and we've had a history of a very nominal increase annually really to help support the inclusion in certain funds. And so the vast majority of our free cash flow gets reinvested in the business because there's just lots of really attractive investments to be made to grow the business and expand EBITDA. And we think that, that is still our best use of capital, but this notional dividend and the notional increase are just there as part of inclusion in some funds.

Operator: Your next question comes from Mark Jordan with Goldman Sachs.

Mark Jordan: As we think about the impact of tariffs, I'm wondering if you could give us some insight as to what you're seeing in terms of parts price inflation, maybe how much, if any, of it was a benefit to your same-store sales growth during 3Q? And I guess, how should we think about it going forward?

Brian Kaner: Yes. So look, I think parts price inflation continues to kind of creep up. If you look at it over the past -- if you look at a run from July to August, it's 2.9% up in July, 3.4% in August, 3.1% in September. As it relates to how much that's actually helping our same-store sales growth, I would tell you that the average cost of repair continues to be much lower or the average -- the increase in the average cost of repair continues to be much lower than it's been historically. If you look at the first half of the year, it's only up 0.9% and we only talk about the first half because it's the mature data that's out there. And that's coming off of '24 that was 3.7%, a '23 that was 7.4%. So I would tell you right now, what we're benefiting from is taking some market share in a down environment. We're taking market share because we're really focused on the success of our clients. Our stores are really dialed into making sure that they understand how to win with the clients, and that's putting us in a much better position to be able to take share in a down environment.

Mark Jordan: Perfect. And I guess kind of thinking about that in terms of the repair costs you mentioned, how should we view that going forward in terms of total loss rates? Do you expect used vehicle values to be an offset there to raise the pre-collision values? Or how do you expect the repair costs to increase going forward?

Brian Kaner: Yes. I mean I think there's no reason to expect that it won't return back to kind of those normal levels where we always say that our growth algorithm contemplates an average repair cost -- our average repair cost growing at 3% to 5% with the market backdrop from a claims perspective that's down roughly 1%. I think we're headed towards a claims environment where we're now starting to see that 3% to 5%. That's coming off a down 6% to 8% and a down 9% to 10% in Q1 and -- Q2 and Q1, respectively. So we're seeing the claims environment start to come back closer to that down 1% to 2%. I would expect as total loss rates start to react accordingly because used car prices are going up. And I don't think we've seen yet the influx of used car price increases to the extent that I think they will. But as they do continue to go up, I would expect total losses to come down. I'd expect those tickets, those larger tickets to come back into our repair facilities. And as that happens, I'd expect the overall to continue to increase. When you look at what CCC reports the increase in labor rates, that's still up around 4%, 4.5%. So the rates themselves are increasing. The part prices, as I referenced earlier, are still continuing to increase. What's really offsetting that is the larger tickets coming out of the shop and the mix effect of that going backwards.

Operator: Your next question comes from Steve Hansen with Raymond James.

Steven Hansen: Brian and Jeff, your outlook commentary on same-store growth momentum carrying into Q4 is certainly encouraging. I'm just curious if there's any soft spots buried within that just insofar that the weather was a bit slow to emerge through October. It seems to be showing up finally now, but it's still encouraging nonetheless. But do you have any disparity in the regional performance on that recovery?

Brian Kaner: Nothing that's different than what we've seen even historically. I mean the West still remains a little depressed versus the rest of the country, which -- but it has been depressed. But as the markets returned, we see it returning to the same pace as the rest of the country. And to your point, we got a pretty good snowstorm here across much of the Midwest over the last couple of days, which is quite early in the year for us. So we would hope that some of that actually even provides some incremental tailwind to the business in the fourth quarter.

Steven Hansen: Very helpful. And just wanted to go back to an enterprise agreement you signed with Mitchell back in October, at least for the Gerber side of your platform. Can you maybe just elaborate on the motivation there and how you think that impacts sort of some of the volume pull into 2026 as you stand that agreement up?

Brian Kaner: Yes. Yes. Well, a couple of things there. I mean you also saw earlier in the -- I think it was in the third quarter that the largest insurance carrier came out and said that they've agreed to allow for -- to allow service providers to use either platform, CCC or Mitchell. And as you well know, the second largest carrier in the U.S. actually exclusively uses Mitchell. So our agreement with Mitchell is really to make sure that we're continuing to position ourselves to meet our customers where they're at regardless of what platform they want to use, we're going to be amenable to that. And I think this just opens up the possibility for us to continue to grow with both of those carriers.

Operator: Your next question comes from Daryl Young with Stifel.

Daryl Young: I just wanted to follow on that Mitchell line of thinking and questioning. Is there any added complexity or cost that's going to be associated with running dual systems going forward?

Brian Kaner: Complexity, yes. I mean it is -- it does create a little bit of complexity. But when we have -- when -- typically, when we have dual platforms in the shops like that, we're really only talking about the estimatics platform, not the shop management. So -- and we do have proficiency in the shop right now to write in Mitchell. We write in Mitchell for other customers as well. And so I don't see that it being an inhibitor to that. And look, at the end of the day, we need to build the proficiency in the shops to make sure that they can write in either platform. I tell our shops, I don't -- it doesn't matter to me if carriers want us to write estimates in Crayon, we have to be in a position where we can meet the customers where they're at and take care of the volume that comes to us. So complexity, a little bit. From a cost perspective, not substantial. We don't expect to see a lot of incremental costs associated with running both platforms.

Daryl Young: Got it. And then one more on margins. The Joe Hudson's platform obviously has very strong margins, and you called out density as a key component. That's also -- density also seems to be a key part of your 5-year plan. Does Joe Hudson's basically lay out the road map for you in terms of what we should expect to see on margins for the Gerber platform in the U.S.? And does this give you optimism you could maybe deliver faster or higher than the 5-year plan on your consolidated margin?

Brian Kaner: Yes. I would -- I mean, look, we have the road map inside of Boyd as well. We talked about on the -- during the Joe Hudson's calls, the one thing that we see in our own business is if you were to look at our North division, which is where we have the most density, particularly around Illinois, Michigan and in markets like that. We have a similar profit profile as Joe Hudson's. So we have the road map. That's why when we came out with our 5-year plan, we talked a lot about building density because we know that density matters both -- it matters to our relationships with carriers and their reliance on us in the marketplace. It matters to us with our dealer relationships where we buy our OE parts from. The denser we are, the bigger we are in the marketplace, the more profitable our parts relationships become. And then we're much more stable from a workforce perspective when we're one of the larger players. So those were the drivers of us acknowledging that in our 5-year plan. Joe Hudson's just happens to be a shining example of when you stay disciplined, what happens. And so I think we have the road map internally. We now have the road map with Joe Hudson's as well or we have another point of validation with Joe Hudson's. Certainly, you would expect that as we blend in 258 new sites at what was reported in the financials at 14.4%, you'd expect that to accelerate our path to -- the timing of our path to 14% because we're blending in a very healthy business and actually have profit to go on top -- have synergies to go on top of that. So yes, I would expect that to be the case.

Operator: Your next question comes from Gary Ho with Desjardins Capital Markets.

Brian Kaner: Hey, Gary.

Gary Ho: Yes. So a couple of questions on my side. First, just maybe just go back to the -- put a finer point on the Mitchell question. So I know in your annual filings, you disclosed the top 2 in terms of contribution to revenue. I'm assuming that's neither of them is kind of related to kind of the Progressive that you kind of mentioned in the past. Can you maybe give us a sense its contribution today, it's the third largest player, where would that be? And how quickly can you ramp up to get to that natural penetration do you think? Is it relatively quick? Is it 12 or 24 months? I just want to pick your brain on that.

Brian Kaner: Yes. Well, look, we're not going to disclose anything more than what we've already disclosed in terms of top carrier relationships. Again, I would just reiterate the point that as one of the larger players in the space, we need to be able to serve our customers the way they want to be served. Opening up Mitchell just gives us the opportunity to do that with -- on a much more broad scale with the second largest -- certainly with the second largest carrier in the U.S. And as it relates to then the first largest carrier in the U.S. their openness and willingness to be able to use both platforms gives us the ability and the confidence then to be able to leverage that platform in our stores and start to build the proficiency on Mitchell that allows us to then be able to -- regardless of platform, be able to take care of customers. So I think I'll leave it at that. I don't -- there's really nothing more to say than we're making sure that we're being responsive to our customers' needs, and we're going to continue to do that, and we're going to continue to train and educate the organization as fast as we possibly can to make sure that's happening.

Operator: Okay. Got it. Okay. And then my next question, I know in your Joe Hudson's kind of presentation, you talked about a pro forma 9.3x multiple that kind of bakes in $19 million of EBITDA for mature store contribution. That does seem sizable to me just relative to the $63 million of EBITDA after rent on an LTM basis. So what has to happen for you to hit that $19 million of contribution?

Brian Kaner: Yes. Well, look, it's really more reflective of the fact that Joe Hudson's has bought 140 locations in the last 3 years. So when you think about 140 of the 258 coming in the last 3 years, there's just a lot of locations that are maturing. So nothing, I think, special needs to happen other than that those locations need to reach their full scale. The one benefit I would think we have right now is it feels like the market is kind of at a bit of an inflection point. So it might be that we've actually been able to procure or to buy this business with a set of maturing stores that might be able to accelerate in a much more expedient fashion than we were anticipating. So I think that it's nothing more than just the size, the sheer number of locations that are maturing.

Gary Ho: Okay. Great. Maybe I can sneak in a quick numbers question for Jeff. Just on your slide on pro forma leverage, 3.4x post close, expected to return to 2.7x as early as '27. Correct me if I'm wrong. I don't believe that takes into account kind of the overallotment of the equity raise. So now you have all the final pieces in place and the debt deal, does that change the 3.4x and the timing to get back to the 2.7x?

Jeff Murray: Yes, that's a great pickup, Gary. Yes, we've rerun those numbers based on the overallotment that we executed recently. And so yes, now we believe that at closing, we'd be at 3.1x and believe that we would get to approximately 2.6x within the end of 2026.

Operator: Your next question comes from Bret Jordan with Jefferies.

Bret Jordan: I guess when you think about the comps being within the 3% to 5% range, is it realistic to think about them being above that range in the first half of '26, just given the low bar? Or is what you're seeing in a ramp still pretty modest?

Jeff Murray: Yes. I think it's certainly conceivable given that we're basing it off a lower -- sort of a more challenged environment as a low comp period. A normal level of growth with a low comp could see us exceeding that 3% to 5% for a period of time. We haven't seen that yet. So we're only commenting on what we're seeing thus far this quarter. But we have seen some low comps. And if you look at our history, when you see periods of low comps, they typically are followed by periods of higher same-store sales naturally. But as I said, we can't tell that for sure, but it's a reasonable thing to be considering.

Bret Jordan: Do you have any color on the Joe Hudson's comp, their relative performance versus yours in the period?

Brian Kaner: Yes. We think they were slightly behind where we were at in the current period.

Bret Jordan: And then...

Jeff Murray: I think they had been stronger, though. I think they had been stronger throughout the first part of the year.

Brian Kaner: Yes. They were actually up in the first part of the year and then slightly behind where we finished in the third quarter. But I think, look, I mean, there is obviously going through a lot of distractions and a lot of activity in the third quarter as well. So nothing to really read into that.

Bret Jordan: And then a quick question on the insurance pricing that you were commented on. Do policies need to actually come down on an absolute basis or just moderating or going up less to get the consumer to be either putting deductibles lower or putting comprehensive back on?

Brian Kaner: Well, I think there's a couple of things that will happen. One, there's a tremendous amount of switching that's happening. So as people switch, I think there's going to be a higher propensity to better position themselves from a coverage perspective. There have been 2 of the large carriers have -- State Farm actually filed to -- with the regulatory environment -- regulatory group to put a 10% premium decrease in the state of Florida. And then you also saw that Progressive announced that they were going to put $1 billion, which is roughly $300 a vehicle into the state of Florida as a decrease. So our thought is if you can't afford the insurance coverage that you're in, people need to start -- and we saw this. We saw this coming out of the recession as well. People better insure themselves when they start making switches or they start to see the carrier or the pricing decreases, and that's what we're expecting.

Operator: Your next question comes from Nathan Po with National Bank Capital Markets.

Nathan Po: I just want to pull on that thread a bit more regarding what you saw in the last recession and talk about or ask about kind of the time line that you might expect between insurance companies decreasing rates, people noticing this, better insuring themselves and how that finally translates into more volumes in your repair facilities?

Brian Kaner: Yes. Well, look, I'd start off by saying the reasons for the softness in those 2 periods was very different. During the recession, people were out of work, unemployment was high. And what really brought it back in line was people actually getting back to work and then kind of getting themselves back into a better financial position in order to be able to better insure themselves. So that took a longer period of time. It took roughly 2 to 3 years for that to really work itself out of the system. And what we've talked about historically is what you see when that's working itself out as you see collision claims, which is the first-party claim, the one that's the at-fault party go down disproportionate to the liability claims, liability claims being the best indication of accident frequency. So as liability claims have been much more stable in that kind of down 3-ish percent even through this period, the same thing we saw was happening on collision claims, which leads us to believe that when collision claims are filed, it's because the at-fault party can't afford their deductible or they don't have collision coverage. So as the second part of the question, when does it return? The immediacy of nobody would take the premium decrease and then go back later on and add the coverage. So my suspicion is that what's happening is as people go to switch their insurance, the carriers are having conversations around I can save you a couple of hundred dollars. And at the same time, I can actually put you in a lower deductible plan, and I can add back collision coverage and the consumers are generally making decisions at that point in time. When they get a premium decrease, probably -- look, the point of having insurance is to be able to use it if you need it. So if you have insurance and you put yourself in a position where you can't afford the deductible should you get into an accident, it's kind of pointless to have it. So I think, generally speaking, I would assume that people are trying to educate the agents and the insurance carriers are educating consumers around get yourself in a position to where if something did happen, you can actually use it. And I think when they've got the ability to have that conversation with decreases coming in, obviously, their objective is going to be to preserve the amount of premium that they can. The way they can preserve some premium is to increase the coverage.

Nathan Po: Got you. I'll swap over to M&A. So with Joe Hudson's padding out your Southeastern presence, where does your focus now shift geographically after that's been integrated or in the books?

Brian Kaner: Yes. Look, I don't see any meaningful shift. There's still plenty of -- given how fragmented the market is, there's still plenty of growth opportunities for us across the Southeast as well as the rest of the United States. So I would expect us to continue to be active in the Southeast. We pick up 2 new states with Joe Hudson's, West Virginia, and Mississippi. So I'd expect to see continued growth. It just really opens up a lot more white space for us to be able to build out density. So it puts us in -- as we talked about on the call, it puts us in the #1 position in 14 new markets and the #2 position in 2 new markets continuing to build out those markets and fill in any white space really is part of our market planning initiative that we kicked off earlier this year.

Nathan Po: Excellent. And with Joe Hudson's now out of the MSO pool, are you able to describe what the MSO pipeline looks like now in terms of size?

Brian Kaner: Yes. Well, I mean, Joe Hudson was one of the assets that was longer in their hold period with private equity. So the pipeline of larger transactions, most of them are fairly immature in their hold period. So the pipeline of larger deals like that is probably pushed out to the, call it, the 2- to 5-year period of time. But there are still plenty of, call it, 3 to 10 store locations that are out there that you're seeing us be a lot more active in right now. Obviously, the L&M transaction gave us 8 new locations. The new -- the business in Nova Scotia gave us five locations. So we're starting to get a lot more active, and they're starting to see a lot more activity in that kind of, call it, smaller MSO, smaller regional MSO category that we're going to continue to be very active in while the other ones get longer in their hold period and come back to the market again. And if they make sense for us, then we'll continue to be participative at that point in time.

Nathan Po: Got you. And one last one for me. With the new entry into Nova Scotia, if you take a step back, are you seeing any major valuation differentials between Canada and the U.S. between like single stores or multi-stores?

Brian Kaner: Well, I mean, no. And we haven't been as active in Canada recently. But I think as our leader in Canada has really gotten that business back on track, we've seen the Canadian marketplace emerge the same way we've seen some of the benefits we've seen in the U.S., we're really refocusing in on continuing to build out the Canadian market. And I'm really happy that we open up a new province with a lot of white space for us to be able to go build out.

Operator: Your next question comes from Tristan Thomas-Martin with BMO Capital Markets.

Tristan Thomas-Martin: I think it's kind of been asked in a couple of ways. I was just curious, is there any -- outside of insurance pricing and used car values, is there any correlation between consumer confidence levels and claims volumes?

Brian Kaner: Probably, but harder to -- certainly harder to quantify. I mean the one thing that we can correlate and we have seen move as the drivers have moved is those drivers being what's happening with premiums and what's happening with used car prices. We've said those were the 2 kind of cyclical things that were happening that were driving the claims softness. And as those things have started to show signs of improvement, so have the claims environment. So I think it gives us a fairly high degree of confidence in the correlation between those 2 drivers and what's happening in the industry. Does it -- is there some incremental positive or negative associated with consumer sentiment, as I said, probably, but much harder to quantify.

Tristan Thomas-Martin: Okay. And then just one more. The $35 million to $45 million of potential synergies, my understanding is it's all operational. Is there any way to think about maybe potential top line synergies or market share from this densification?

Brian Kaner: There certainly is probably synergy opportunity as it relates to revenue. We haven't baked any of that into our thinking at this point. But we certainly believe that there's a benefit to densification and would anticipate that being upside to the transaction.

Operator: Your next question comes from Razi Hasan with Paradigm Capital.

Razi Hasan: Could you maybe just highlight the added relationships with insurance carriers that Joe Hudson's brings and the net new opportunities for Boyd? Is there much overlap between the 2 companies?

Brian Kaner: There's -- from an overlap of insurance carrier relationships, I mean, they're doing business with all the same carriers that we do business with. So there's no meaningful difference in the carrier makeup. So we don't see anything kind of anomalous there.

Razi Hasan: Okay. Great. And then just moving on to operating expenses as a percentage of sales. You mentioned indirect and direct procurement savings going forward. Could you maybe quantify that a bit just in terms of the impact in the coming quarters?

Jeff Murray: Yes. I guess we'll stick to our -- the guidance that we've been providing all along that we sort of expect to get to $70 million worth of run rate benefit by the end of 2026. The indirect staffing model that we put through in Q2 of 2025 resulted in approximately $30 million of that $70 million. So we are expecting to be factoring another $40 million between the end of Q2 of 2025 and the end of 2026 is kind of the way we're thinking kind of in a ratable way is how we're modeling out so that by the end of 2026, you've got a run rate of $70 million.

Razi Hasan: Okay. And that would impact the operating expense line, right?

Jeff Murray: Yes, primarily. There'll still be a little bit of wins on the gross margin side as well, but the majority of it would be coming from the OpEx line.

Razi Hasan: Okay. Great. And maybe just lastly, I think on your presentation deck, you mentioned with Joe Hudson's acquisition, market share in the U.S. close to 7.6%. Do I have that number right?

Brian Kaner: Yes, that is what we referenced in the materials.

Operator: [Operator Instructions] Your next question comes from Sabahat Khan with RBC Capital Markets.

Sabahat Khan: Just on the Project 360 kind of the execution and as you look ahead to the integration of Joe Hudson's, I think there were some comments that it could be similar teams that execute this. Can you maybe just talk about the team that's going to deliver the synergies? Will you just sort of beef up your existing team? Will it be a separate integration team as we sort of work through 2026 to deliver on these targets and the synergies?

Brian Kaner: Yes. So there are 2 things I'd add to that. One is, as part of Project 360, we opened up what's called a results delivery office to execute on those initiatives. What we're doing with Joe Hudson's is we're combining the results delivery office with an integration management office, and we're going to have that team responsible for going after now not just the $100 million that we committed to from a Project 360 perspective, but now the incremental $35 million to $45 million of synergies that we're anticipating from the Joe Hudson's transaction. So that team and that process is very, very robust. The results delivery office, obviously, has proven that we can get the type of traction that we need. So many of the same resources that we're working on that are going to be what's now helping us with the actual synergy realization of the Joe Hudson's transaction. The leader of that, which is Kim Morin, who's done a phenomenal job of managing through the RDO process is also going to lead the IMO process now. That will be a much more fulsome approach to not just synergy realization, but making sure that we integrate the Joe Hudson's transaction properly. The most important thing that we need to do in the short term is preserve the base business that we just bought and make sure that we keep the team stable in that organization because really our desire is to put the best of the best people on the field when we're done with the transaction. So the team has really dialed into making sure that happens. And I couldn't have any -- I couldn't be more confident in the leader that we have running it.

Sabahat Khan: Great. And then just continuing on that discussion, particularly as it relates to the procurement savings and maybe consolidating some of the purchasing, are the agreements with your vendors and the suppliers? Is there sort of a time line to these? Is it something you can following a major transaction, sort of call them all to the table? Understanding the Project 360 savings are quite front-end loaded. Just wondering if the procurement savings related to Joe Hudson's could also maybe come a bit sooner than the rest of the synergies.

Brian Kaner: Yes. I mean we've talked about slightly more than 50% of the savings coming in the first year when we talked about the Joe Hudson's transaction and our confidence in that really comes from the fact that we know that some of those procurement relationships will have an immediate benefit. So yes, you're right. We do expect some of that to be front-end loaded, and we expect the kind of more of the back-end synergies to be really more realized at the -- towards the tail end of the integration process.

Operator: There are no further questions at this time. I will now turn the call over to Brian for closing remarks.

Brian Kaner: All right. Well, thank you, operator, and thank you all once again for joining our call today, and we look forward to reporting our fourth quarter results in March. Thanks again, and have a great day.

Operator: Ladies and gentlemen, this concludes your conference call for today. We thank you for participating and ask that you please disconnect your lines.