Q1 2023 revenue of $591 million, an increase of $96 million, or 19%, over Q1 2022. Q1 2023 Adjusted EBITDA* of $33 million, a decrease of $3 million, or 8%, compared to Q1 2022.Q1 2023 net income of $4 million or $0.15 per share compared with $7 million or $0.30 per share for the first quarter of 2022.
LASALLE, QC, May 11, 2023 /CNW/ – GDI Integrated Facility Services Inc. (“GDI” or the “Company”) (TSX: GDI) is pleased to announce its financial results for the first quarter ended March 31, 2023.
For the first quarter of 2023:
Revenue reached $591 million, an increase of $96 million, or 19%, over the first quarter of 2022, comprised of 14% Organic Growth, 2% growth from acquisitions and 3% growth from the appreciation of the U.S. dollar relative to the Canadian dollar.Adjusted EBITDA* amounted to $33 million, a decrease of $3 million, or 8%, compared to the first quarter of 2022.Net income was $4 million or $0.15 per share compared to $7 million or $0.30 per share in Q1 2022. The decrease of net income in the first quarter of 2023 compared to 2022 is mainly attributable to lower operating income of $6 million, partially offset by lower net finance expense of $2 million and lower income tax expense of $1 million.
For the first quarters of 2023 and 2022, the business segments performed as follows:
(in millions of
Canadian dollars)
Business Services
Canada (1)
Business Services
USA (1)
Technical
Services
Corporate and
Other (2)
Consolidated
2023
2022
2023
2022
2023
2022
2023
2022
2023
2022
Revenue
141
142
177
163
252
172
21
18
591
495
Organic (Decline) Growth
(1 %)
5 %
(2 %)
14 %
43 %
(2 %)
17 %
18 %
14 %
4 %
Adjusted EBITDA* (3)
14
19
12
13
11
6
(4)
(2)
33
36
Adjusted EBITDA Margin*
10 %
13 %
7 %
8 %
4 %
3 %
(19 %)
(11 %)
6 %
7 %
(1)
“Business Services Canada” formerly “Janitorial Canada” and “Business Services USA” formerly “Janitorial USA”.
(2)
Comparative results have been recast to reflect a change in our reporting segments, as former Complementary Services and Corporate and eliminations segments are now grouped under Corporate and Other.
(3)
Adjusted EBITDA definition now exclude the strategic information technology projects configuration and customization costs. This change has no impact on the three-month period ended March 31, 2022.
GDI’s Business Services Canada segment had a good quarter, recording $141 million in revenue representing an organic revenue decline of 1%, while delivering $14 million in Adjusted EBITDA*. GDI’s Business Services USA segment also performed well in Q1 2023, recording revenue of $177 million, representing an organic revenue decline of 2%, and Adjusted EBITDA* of $12 million. The organic revenue decline is attributable to a decrease in COVID-19 related extra services as compared to Q1 2022, which also led to lower Adjusted EBITDA* margin in both Business Services segments.
The Technical Services segment had a strong quarter, recording revenues of $252 million or growth of 47% over Q1 2022, including organic revenue growth of 43%. The segment recorded Adjusted EBITDA* of $11 million compared to $6 million in Q1 2022, representing an Adjusted EBITDA margin* of 4%. Revenue growth for the business is attributable to a strong increase in project revenues and higher service revenues compared to previous year.
Finally, GDI’s Corporate and Other segment recorded revenue of $21 million compared to revenue of $18 million in Q1 2022, representing Organic Growth of 17%, mainly due to GDI’s integrated facility services business unit (“GDI IFS”) which was launched at the beginning of 2022. The Corporate and Other segment is composed of GDI IFS, GDI’s janitorial products manufacturing and distribution business as well as GDI’s corporate costs and elimination of intercompany transactions.
“I am very pleased with GDI’s performance in the first quarter of 2023,” stated Claude Bigras, President & CEO of GDI. “As expected, we continued to see a reduction in COVID extras year-over-year in our Business Services segments which affected both organic growth and margins, however the base business within both our Canada and USA segments is performing well. Our Technical Services segment had a very strong quarter, nearly doubling Adjusted EBITDA and delivering 43% of organic growth. This growth resulted from Ainsworth executing on its significant projects backlog as well as solid growth on-call services. Even with this strong growth, Ainsworth booked more than it billed and ended the quarter with a backlog at record levels. Q1 remains Ainsworth’s weakest quarter seasonally from a margin perspective as its HVAC service business only begins to ramp up mid-Q2 each year. Within GDI’s new Corporate and Other segment, our IFS business continued to execute on its inaugural contracts while building out its pipeline of client opportunities, and our manufacturing and distribution business is gradually adapting to a lower office occupancy environment,” stated Mr. Bigras.
“The outlook for all of our business segments remains very positive. We have a strong market position in Canada and we are steadily growing our U.S. footprint. The three acquisitions that GDI concluded in 2022 have been successfully onboarded and are all performing well. Our balance sheet, which has been supporting our strong organic growth, has a leverage ratio of less than 3.0x and will provide us with sufficient room to support our M&A team which is actively working on new opportunities. I am very much looking forward to seeing how GDI will perform for the remainder of 2023.” concluded Mr. Bigras.
______________________________
* The terms “Adjusted EBITDA” and “Adjusted EBITDA Margin” do not have standardized definitions prescribed by International Financial Reporting Standards and therefore, may not be comparable to similar measures presented by other companies. “Adjusted EBITDA” is defined as operating income before depreciation and amortization, transaction, reorganization and other costs, share-based compensation and strategic information technology projects configuration and customization costs. The Adjusted EBITDA Margin is calculated by dividing Adjusted EBITDA by revenues. For more details and for a reconciliation of that measure to the most directly comparable IFRS measure, consult the “Operating and Financial Results” section of the Company’s Management Discussion & Analysis (MD&A).
ABOUT GDI
GDI is a leading integrated commercial facility services provider which offers a range of services in Canada and the United States to owners and managers of a variety of facility types including office buildings, educational facilities, distribution centers, industrial facilities, healthcare establishments, stadiums and event venues, hotels, shopping centres, airports and other transportation facilities. GDI’s commercial facility services capabilities include commercial janitorial and building maintenance, energy advisory and system optimization, the installation, maintenance and repair of HVAC-R, mechanical, electrical and building automation systems, as well as other complementary services such as janitorial products manufacturing and distribution. GDI’s subordinate voting shares are listed on the Toronto Stock Exchange (TSX: GDI). Additional information on GDI can be found on its website at www.gdi.com.
CAUTION CONCERNING FORWARD-LOOKING STATEMENTS
Certain statements in this press release may constitute forward-looking information within the meaning of securities laws. Forward looking information may relate to GDI’s future outlook and anticipated events, business, operations, financial performance, financial condition or results and, in some cases, can be identified by terminology such as “may”; “will”; “should”; “expect”; “plan”; “anticipate”; “believe”; “intend”; “estimate”; “predict”; “potential”; “continue”; “foresee”; “ensure” or other similar expressions concerning matters that are not historical facts. In particular, statements regarding GDI’s future operating results and economic performance, and its objectives and strategies are forward-looking statements. These statements are based on certain factors and assumptions including expected growth, results of operations, performance and business prospects and opportunities, which GDI believes are reasonable as of the current date. While management considers these assumptions to be reasonable based on information currently available to the Company, they may prove to be incorrect. It is impossible for GDI to predict with certainty the impact that the current economic uncertainties may have on future results. Forward-looking information is also subject to certain factors, including risks and uncertainties (described in the “Risk Factors” section) that could cause actual results to differ materially from what GDI currently expects. Namely, these factors include risks pertaining to unsuccessful implementation of the business strategy, inherent operating risks of acquisition activity, failure to integrate, decline in commercial real estate occupancy levels, increase in costs which cannot be passed on to customers, labour shortages, disruption in information technology systems and execution issues with Strategic IT projects, increases in interest rates, deterioration in general economic conditions, prolonged armed conflict in Ukraine, COVID-19 and related pandemic, increase in competition, influence of the principal shareholders, loss of key or long-term customers, public procurement laws and regulations, legal proceedings, reputational damage, labour disputes, environmental, social and governance (ESG) considerations, goodwill and long-lived assets impairment charges, tax matters, dependence on key employees, participation in multi-employer pension plans, legislation or other governmental action, exchange rate fluctuations, disputes with franchisees, cybersecurity and data protection, data confidentiality, and public perception of our environmental footprint, many of which are beyond the Company’s control. Therefore, future events and results may vary significantly from what management currently foresees. The reader should not place undue importance on forward-looking information and should not rely upon this information as of any other date. While management may elect to, the Company is under no obligation and does not undertake to update or alter this information at any particular time, except as may be required by law.
Analyst Conference Call:
May 12, 2023 at 7:30 A.M. (ET)
Kindly note that Investors and Media representatives may attend as listeners only.
Please use the following dial-in numbers to have access to the conference call by dialing 10 minutes before the beginning of the conference:
North America Toll-Free: 1-888-664-6392
Local: 416-764-8659 (Toronto) or 514-225-6995 (Montreal)
Confirmation Code: 81654032
A rebroadcast of the conference call will be available until May 19, 2023 by dialing:
North America Toll-Free: 1-888-390-0541
Local: 416-764-8677 (Toronto)
Confirmation Code: 654032 #
March 31, 2023 unaudited condensed consolidated interim financial statements and accompanied Management & Discussion Analysis are filed on www.sedar.com.
GDI INTEGRATED FACILITY SERVICES INC.
Condensed Consolidated Interim Statements of Financial Position
(Unaudited) (In millions of Canadian dollars)
As at March 31,
2023
As at December 31,
2022
Assets
Current assets
Cash
6
7
Trade and other receivables and contract assets
564
524
Current tax assets
4
7
Inventories
47
45
Other financial assets
11
11
Prepaid expenses and other
12
9
Derivatives
3
3
Total current assets
647
606
Non-current assets
Property, plant and equipment
123
122
Intangible assets
134
139
Goodwill
344
344
Derivatives
‒
1
Other assets
10
8
Total non-current assets
611
614
Total assets
1,258
1,220
Liabilities and Shareholders’ Equity
Current liabilities
Bank indebtedness
1
10
Trade and other payables
295
286
Provisions
24
26
Contract liabilities
32
30
Current tax liabilities
3
2
Current portion of long-term debt
39
43
Total current liabilities
394
397
Non-current liabilities
Long-term debt
386
345
Long-term payables
6
5
Deferred tax liabilities
30
34
Total non-current liabilities
422
384
Shareholders’ equity
Share capital
379
379
Retained earnings
53
49
Contributed surplus
4
4
Accumulated other comprehensive income
6
7
Total shareholders’ equity
442
439
Total liabilities and shareholders’ equity
1,258
1,220
GDI INTEGRATED FACILITY SERVICES INC.
Condensed Consolidated Interim Statements of Comprehensive Income
(Unaudited) (In millions of Canadian dollars, except for earnings per share)
Three-month periods ended March 31,
2023
2022
Revenues
591
495
Cost of services
483
394
Selling and administrative expenses
77
67
Strategic information technology projects configuration and customization costs
1
‒
Transaction, reorganization and other costs
1
‒
Amortization of intangible assets
5
6
Depreciation of property, plant and equipment
12
10
Operating income
12
18
Net finance expense
6
8
Income before income taxes
6
10
Income tax expense
2
3
Net income
4
7
Other comprehensive (loss) income
(Losses) gains that are or may be reclassified to earnings:
Foreign currency translation differences for foreign operations
‒
(4)
Hedge of net investments in foreign operations, net of tax of nil
‒
4
Cash flow hedges, effective portion of changes in fair value,
net of tax of nil (2022 ‒ ($1))
(1)
2
(1)
2
Total comprehensive income
3
9
Earnings per share:
Basic
0.15
0.30
Diluted
0.15
0.30
GDI INTEGRATED FACILITY SERVICES INC.
Condensed Consolidated Interim Statements of Changes in Equity
Three-month periods ended March 31, 2023 and 2022
(Unaudited) (In millions of Canadian dollars, except for number of shares)
Share capital
Retained
earnings
Contributed
surplus
Accumulated
other
comprehensive
income
Total
Number (in
thousands
of shares)
Amount
Balance, January 1, 2022
23,121
371
13
6
1
391
Net income
–
–
7
–
–
7
Other comprehensive income
–
–
–
–
2
2
Total comprehensive income
for the period
–
–
7
–
2
9
Transactions with owners of the
Company:
Stock options exercised
136
3
–
(1)
–
2
Balance, March 31, 2022
23,257
374
20
5
3
402
Balance, January 1, 2023
23,414
379
49
4
7
439
Net income
–
–
4
–
–
4
Other comprehensive loss
–
–
–
–
(1)
(1)
Total comprehensive income
for the period
–
–
4
–
(1)
3
Transactions with owners of the
Company:
Stock options exercised
20
–
–
–
–
–
Balance, March 31, 2023
23,434
379
53
4
6
442
GDI INTEGRATED FACILITY SERVICES INC.
Condensed Consolidated Interim Statements of Cash Flows
(Unaudited) (In millions of Canadian dollars)
Three-month periods ended March 31,
2023
2022
Cash flows from (used in) operating activities
Net income
4
7
Adjustments for:
Depreciation and amortization
17
16
Net finance expense
6
8
Income tax expense
2
3
Income taxes paid
(1)
(1)
Net changes in non-cash operating assets and liabilities
(37)
(27)
Net cash (used in) from operating activities
(9)
6
Cash flows from (used in) financing activities
Proceeds from issuance of long-term debt
102
80
Repayment of long-term debt
(68)
(53)
Payment of lease liabilities
(8)
(6)
Interest paid
(4)
(2)
Other
–
2
Net cash from financing activities
22
21
Cash flows (used in) investing activities
Business acquisitions, net of cash acquired
–
(33)
Additions to property, plant and equipment
(4)
(5)
Additions to intangible assets
(1)
(2)
Net cash used in investing activities
(5)
(40)
Foreign exchange gain on cash held in foreign currencies
–
1
Net change in cash (bank indebtedness)
8
(12)
(Bank indebtedness) cash, beginning of period:
Cash
7
24
Bank indebtedness
(10)
(3)
(3)
21
Cash, end of period:
Cash
6
9
Bank indebtedness
(1)
–
5
9
GDI INTEGRATED FACILITY SERVICES INC.
Segmented information
(In millions of Canadian dollars)
Three-month period ended March 31, 2023
Business
Services
Canada
Business
Services
USA
Technical
Services
Corporate
and Other (1)
Total
Recurring/contractual services
120
168
20
6
314
On-call services
11
9
75
1
96
Project
–
–
157
–
157
Manufacturing and distribution
–
–
–
16
16
Other revenues
7
–
–
1
8
Total external revenues
138
177
252
24
591
Inter-segment revenues
3
–
–
(3)
–
Revenues
141
177
252
21
591
Income (loss) before income taxes
11
8
2
(15)
6
Net finance expense
–
–
1
5
6
Operating income (loss)
11
8
3
(10)
12
Depreciation and amortization
3
4
8
2
17
Transaction, reorganization, and other costs
–
–
–
1
1
Share-based compensation (2)
–
–
–
2
2
Strategic information technology projects configuration and customization costs
–
–
–
1
1
Adjusted EBITDA (3)
14
12
11
(4)
33
Total assets
259
354
526
119
1,258
Total liabilities
76
84
253
403
816
Additions to property, plant and equipment
1
2
7
3
13
Additions to intangible assets
–
–
–
1
1
(1)
Comparative results have been recast to reflect a change in our reporting segments, as former Complementary Services and Corporate and eliminations segments are now grouped under Corporate and Other.
(2)
Includes stock option, performance share unit and restricted share unit plans.
(3)
Adjusted EBITDA definition now exclude the strategic information technology projects configuration and customization costs. This change has no impact on the three-month period ended March 31, 2022.
GDI INTEGRATED FACILITY SERVICES INC.
Segmented information
(In millions of Canadian dollars)
Three-month period ended March 31, 2022
Business
Services
Canada
Business
Services
USA
Technical
Services
Corporate
and Other (1)
Total
Recurring/contractual services
114
148
24
4
290
On-call services
19
15
51
1
86
Project
–
–
97
–
97
Manufacturing and distribution
–
–
–
15
15
Other revenues
7
–
–
–
7
Total external revenues
140
163
172
20
495
Inter-segment revenues
2
–
–
(2)
–
Revenues
142
163
172
18
495
Income (loss) before income taxes
16
7
(2)
(11)
10
Net finance expense
–
2
1
5
8
Operating income (loss)
16
9
(1)
(6)
18
Depreciation and amortization
3
4
7
2
16
Share-based compensation (2)
–
–
–
2
2
Adjusted EBITDA
19
13
6
(2)
36
Total assets (3)
267
320
515
118
1,220
Total liabilities (3)
81
68
232
400
781
Additions to property, plant and equipment
2
2
9
1
14
Additions to intangible assets
–
–
13
2
15
Addition of goodwill
–
–
21
–
21
(1)
Comparative results have been recast to reflect a change in our reporting segments, as former Complementary Services and Corporate and eliminations segments are now grouped under Corporate and Other.
(2)
Includes stock option, performance share unit and restricted share unit plans.
(3)
As at December 31, 2022
GDI INTEGRATED FACILITY SERVICES INC.
Business acquisitions
(In millions of Canadian dollars)
Acquisition date
Company acquired
Location
Segment reporting
Purchase price allocation status
2023 Acquisition
None
2022 Acquisitions
January 21, 2022
Gestion E.C.I. inc. and its subsidiaries (“Énergère”)
Montréal,
Quebec
Technical
Services
Completed
March 1, 2022
M.T.I. Mechanical Trade Industries Ltd. and its subsidiary (“MTI”)
Markham,
Ontario
Technical
Services
Completed
September 1, 2022
Cascadian Building Maintenance, Ltd. (“Cascadian“)
Bellevue,
Washington
Business
Services USA
Completed
GDI INTEGRATED FACILITY SERVICES INC.
Supplementary Quarterly Financial Information
Three-month periods
(Unaudited) (In millions of Canadian dollars, except per share data)
Three months ended
(in millions of Canadian dollars, except per share data) (1)
March
2023
December
2022
September
2022
June
2022
Revenue
591
588
563
526
Operating income
12
15
19
17
Depreciation and amortization
17
22
18
18
Transaction, reorganization and other costs
1
1
1
1
Share-based compensation
2
3
2
1
Strategic information technology projects configuration and customization costs
1
1
2
1
Adjusted EBITDA (2)
33
42
42
38
Net income for the period
4
10
11
10
Earnings per share
Basic
0.15
0.41
0.45
0.40
Diluted
0.15
0.40
0.44
0.40
Three months ended
(in millions of Canadian dollars, except per share data) (1)
March
2022
December
2021
September
2021
June
2021
Revenue
495
433
408
372
Operating income
18
15
18
24
Depreciation and amortization
16
15
13
12
Canadian Emergency Wage Subsidy and related expenses
‒
‒
(1)
(5)
Transaction, reorganization and other costs
‒
2
1
‒
Share-based compensation
2
2
2
2
Adjusted EBITDA (2)
36
34
33
33
Net income for the period
7
7
9
14
Earnings per share
Basic
0.30
0.30
0.41
0.61
Diluted
0.30
0.29
0.40
0.59
(1)
The differences between the quarters are mainly the results of business acquisitions, as well as seasonality in the Technical Services segment. The net income for the three-month periods ended June 30, 2021 and September 30, 2021 were favourably impacted by the Canadian Emergency Wage Subsidy and related expenses.
(2)
Adjusted EBITDA definition now exclude the strategic information technology projects configuration and customization costs. This change has no impact on the three-month periods ended June 30, 2021, September 30, 2021, December 31, 2021, and March 31, 2022.
SOURCE GDI Integrated Facility Services Inc.