{ "market" : {"NAME" : "U.S.", "ID" : "us_market", "TZ" : "ET", "TZOFFSET" : "-18000", "open" : "", "close" : "", "flags" : {}} , "STREAMER_SERVER" : "http://streamerapi.finance.yahoo.com","arrowAsChangeSign" : false,"throttleInterval": "1000"}
globenewswire

FirstService Reports Third Quarter Results

  • Press Release
  • Source: FirstService Corporation
  • On 7:30 am EST, Tuesday November 3, 2009



 ---------------------------------------------------------------------

 Operating highlights:
                               Quarter ended       Nine months ended
                                September 30          September 30
                           ---------------------  --------------------
                              2009       2008        2009      2008
                           ----------  ---------  ---------  ---------
 Revenues (millions)       $    451.1  $   450.1  $ 1,237.4  $ 1,274.0
 EBITDA (millions)         $     43.5  $    47.5  $    97.1  $    94.9
 Adjusted EPS              $     0.60  $    0.68  $    1.15  $    1.08
 ---------------------------------------------------------------------

Related Quotes

SymbolPriceChange
FSRV17.97-0.20
Chart for FirstService Corporation
{"s" : "fsrv,fsv.to","k" : "c10,l10,p20,t10","o" : "","j" : ""}

TORONTO, Nov. 3, 2009 (GLOBE NEWSWIRE) -- FirstService Corporation (TSX:FSV - News) (TSX:FSV.PR.U - News) (Nasdaq:FSRV - News) today reported results for its third quarter ended September 30, 2009. All amounts are in US dollars.

For the quarter ended September 30, 2009, revenues were $451.1 million, a slight increase relative to the same period in the prior year, EBITDA (1) was $43.5 million, down from $47.5 million and Adjusted EPS (2) was $0.60, versus $0.68 reported in the prior year period. GAAP EPS from continuing operations was $0.16 per share in the quarter, compared to $0.36 for the same quarter a year ago.

For the nine months ended September 30, 2009, revenues were $1.237 billion, a decrease of 3% relative to the same period in the prior year, EBITDA (1) was $97.1 million, up 2% from $94.9 million in the prior year and Adjusted EPS (2) was $1.15, up from $1.08 reported in the prior year period. GAAP EPS from continuing operations was a loss of $1.45 for the nine month period, compared to earnings of $0.53 for the same period a year ago.

"During the third quarter once again, we delivered solid results in Residential Property Management and excellent results in Property Services, while Commercial Real Estate continued to be under pressure primarily in North America and Europe," said Jay S. Hennick, Founder and Chief Executive Officer of FirstService Corporation. "We also recently completed several key initiatives including the acquisition of a 29.9% interest in publicly-traded Colliers CRE plc, the Colliers International operating partner in the UK, Ireland and Spain," he concluded.

On October 21, 2009, FirstService announced a $70 million public offering of 6.5% Convertible Unsecured Subordinated Debentures (the "Debentures"). FirstService has granted the underwriters a 10% over-allotment option, which may result in a total offering of up to $77 million. The Debentures are convertible into common shares at a price of US$28.00, and have a maturity date of December 31, 2014. FirstService has the right to pay interest and/or principal in cash or common shares, at its option. The net proceeds of the offering will be used to repay existing debt under the revolving credit facility and for general corporate purposes. On closing, currently expected to be November 10, 2009, FirstService will have in excess of $200 million of capital available for growth and acquisitions, represented by cash on hand and undrawn capacity on its revolving credit facility.

About FirstService Corporation

FirstService is a global diversified leader in the rapidly growing real estate services sector, providing services in the following three areas: commercial real estate; residential property management; and property services. Industry-leading service platforms include: Colliers International and FirstService Real Estate Advisors, together the third largest global player in commercial real estate; FirstService Residential Management, the largest manager of residential communities in North America; and TFC, North America's largest provider of property services through franchise and contractor networks.

FirstService is a diversified property services company with US$1.7 billion in annualized revenues and over 18,000 employees worldwide. More information about FirstService is available at www.firstservice.com.

Segmented Quarterly Results

Commercial Real Estate Services revenues totalled $156.0 million for the quarter, down 16% relative to the prior year quarter. Excluding the impact of acquisitions, revenues declined 23% (16% on a local currency basis) as a result of a reduction in investment sales and leasing activity, primarily in North America and Europe, due to the global economic slowdown and the depreciation of foreign currencies relative to the US dollar. Quarterly EBITDA, before a non-recurring $1.8 million cost containment charge, was $3.8 million, versus EBITDA of $12.3 million in the year-ago period.

Residential Property Management revenues increased to $174.8 million for the quarter, up 4% versus the prior year period, attributable to a 5% increase in property management contract revenue, offset by a decline in ancillary service revenues. EBITDA for the quarter was $17.6 million, versus $17.7 million in the prior year period.

Property Services revenues totalled $120.3 million, an increase of 23% over the prior year period. The revenue increase was attributable primarily to Field Asset Services. Revenues from the segment's consumer-oriented franchise operations declined 25% as a result of the continued weakness in the US economy. EBITDA in the third quarter was $24.2 million, an increase of 19% versus $20.3 million in the prior year.

Quarterly corporate costs were $3.6 million, relative to $3.2 million in the prior year period.

Deferred Income Tax Charge

During the quarter, the Company recorded a non-cash valuation allowance with respect to deferred income tax assets, which increased income tax expense by $3.6 million and reduced GAAP earnings per share by $0.11. For the nine month period ended September 30, 2009, the valuation allowance amounted to $18.5 million, or $0.58 per share. The valuation allowance relates to tax loss carry-forwards in the Company's North American Commercial Real Estate operations. The loss carry-forwards remain available to offset taxes over the next 20 years.

Conference Call

FirstService will be holding a conference call on Tuesday, November 3, 2009 at 11:00 a.m. Eastern Time to discuss results for the third quarter. The call will be simultaneously web cast and can be accessed live or after the call at www.firstservice.com in the "Investors / Newsroom" section.

Footnotes

1. Reconciliation of net earnings (loss) from continuing operations to EBITDA: 



                             Three months ended     Nine months ended
 (in thousands of US            September 30          September 30
   dollars)                ---------------------  --------------------
 (unaudited)                  2009        2008       2009     2008
                           ----------  ---------  ---------  ---------

 Net earnings (loss) from
  continuing operations    $   16,678  $  19,257  $ (15,990) $  36,904
 Income tax                    12,036      8,151     31,220      8,330
 Other income                      46     (1,354)       (65)    (3,274)
 Integrated Security
  division divesture bonus         --      5,715         --      5,715
 Impairment loss on
  available-for-sale
  securities                   (3,545)     2,485     (4,488)     2,485
 Interest expense, net          2,928      1,188      8,622      8,757
                           ----------  ---------  ---------  ---------
 Operating earnings            28,143     35,442     19,299     58,917
 Depreciation                   7,128      5,592     19,492     17,217
 Amortization of
  intangible assets             4,949      4,457     16,202     13,744
 Goodwill impairment
 charge                            --         --     29,583         --
                           ----------  ---------  ---------  ---------
                               40,220     45,491     84,576     89,878
 Stock-based
  compensation expense          1,525        326     4,696       2,646
 Cost containment               1,766      1,634     7,841       2,424
                           ----------  ---------  ---------  ---------
 EBITDA                    $   43,511   $ 47,451  $  97,113  $  94,948
                           ----------  ---------  ---------  ---------

EBITDA is defined as net earnings from continuing operations before income taxes, interest, depreciation and amortization, stock-based compensation expense and other non-cash or non-recurring expenses. The Company uses EBITDA to evaluate operating performance. EBITDA is an integral part of the Company's planning and reporting systems. Additionally, the Company uses multiples of current and projected EBITDA in conjunction with discounted cash flow models to determine its overall enterprise valuation and to evaluate acquisition targets. The Company believes EBITDA is a reasonable measure of operating performance because of the low capital intensity of its service operations. The Company also believes EBITDA is a financial metric used by many investors to compare companies, especially in the services industry, on the basis of operating results and the ability to incur and service debt. EBITDA is not a recognized measure of financial performance under United States generally accepted accounting principles (GAAP), and should not be considered as a substitute for operating earnings, net earnings or cash flows from operating activities, as determined in accordance with GAAP. The Company's method of calculating EBITDA may differ from other issuers and accordingly, EBITDA may not be comparable to measures used by other issuers.

2. Reconciliation of net earnings (loss) and net earnings (loss) per common share from continuing operations to adjusted net earnings and adjusted net earnings per share: 



 (in thousands of US dollars)
 (unaudited)                 Three months ended     Nine months ended
                                September 30           September 30
                           ---------------------  --------------------
                             2009         2008      2009       2008
                           ----------  ---------  ---------  ---------

 Net earnings (loss)
  attributable to common
  shareholders             $    4,793  $ 115,128  $ (45,604) $ 106,332
 Non-controlling interest
  redemption increment          6,940    (36,344)    17,787    (24,276)
 Company share of net
  (earnings) loss from
  discontinued operations,
  net of tax                       19    (68,074)     2,973    (66,218)
 Amortization of
  intangible assets             4,949      4,457     16,202     13,744
 Goodwill impairment
  charge                           --         --     29,583         --
 Integrated Security
  division divestiture
  bonus                            --      5,715         --      5,715
 Stock-based
  compensation expense          1,525        326      4,696      2,646
 Cost containment               1,766      1,634      7,841      2,424
 (Gain) loss on AFS
  securities                   (3,545)     2,485     (4,488)     2,485
 Income tax on adjustments     (1,534)    (4,705)    (8,187)    (8,954)
 Deferred income tax
  valuation allowance           3,563         --     18,521         --
 Non-controlling
  interest on adjustments        (672)      (479)    (5,381)    (1,420)
                           ----------  ---------  ---------  ---------
 Adjusted net earnings
  from continuing
  operations               $   17,804  $  20,143  $  33,943  $  32,478
                           ----------  ---------  ---------  ---------

 (in US dollars)
 (unaudited)

                             Three months ended    Nine months ended
                                September 30           September 30
                           ---------------------  --------------------
                              2009       2008        2009      2008
                           ----------  ---------  ---------  ---------
 Diluted net earnings
  (loss) per common
  share from
  continuing operations    $     0.16  $    0.36  $   (1.45) $    0.53
 Non-controlling interest
  redemption increment           0.24         --       0.60         --
 Amortization of
  intangible assets,
  net of income tax              0.10       0.09       0.33       0.26
 Goodwill impairment charge        --         --       0.93         --
 Integrated Security
  division divestiture
  bonus, net
  of income tax                    --       0.12         --       0.12
 Stock-based compensation
  expense, net of
  income tax                     0.03       0.01       0.09       0.05
 Cost containment,
  net of income tax              0.04       0.03       0.17       0.05
 (Gain) loss on AFS
  securities, net of
  income tax                    (0.08)      0.07      (0.10)      0.07
 Deferred income tax
  valuation allowance            0.11         --       0.58         --
                           ----------  ---------  ---------  ---------
 Adjusted diluted net
  earnings per common
  share from               $     0.60  $    0.68  $    1.15  $    1.08
  continuing operations    ----------  ---------  ---------  ---------

The Company is presenting adjusted earnings measures to eliminate the impact of: (i) the non-controlling interest ("NCI") redemption increment in connection with ASC 810-10 and related guidance; (ii) amortization expense related to intangible assets recognized in connection with acquisitions; (iii) a non-recurring goodwill impairment charge; (iv) stock-based compensation expense; (v) non-recurring cost containment expenses; (vi) any realized gains on sale or unrealized losses on impairment of available-for-sale securities and (vii) a deferred income tax valuation allowance related to tax loss carry-forwards. All of the adjustments are considered "non-GAAP financial measures" under applicable securities regulatory authority policies and guidelines.

Forward-looking Statements

This press release includes or may include forward-looking statements. Forward-looking statements include the Company's financial performance outlook and statements regarding goals, beliefs, strategies, objectives, plans or current expectations. These statements involve known and unknown risks, uncertainties and other factors which may cause the actual results to be materially different from any future results, performance or achievements contemplated in the forward-looking statements. Such factors include: (i) general economic and business conditions, which will, among other things, impact demand for the Company's services and the cost of providing services; (ii) the ability of the Company to implement its business strategy, including the Company's ability to acquire suitable acquisition candidates on acceptable terms and successfully integrate newly acquired businesses with its existing businesses; (iii) changes in or the failure to comply with government regulations; and (iv) other factors which are described in the Company's filings with applicable Canadian and United States securities regulatory authorities (which factors are adopted herein).

Summary financial information is provided in this press release. This press release should be read in conjunction with the Company's full quarterly financial statements and MD&A to be made available on SEDAR at www.sedar.com. 



 FIRSTSERVICE CORPORATION
 Condensed Consolidated Statements of Earnings
 ---------------------------------------------
 (in thousands of US dollars, except per share amounts)

                           Three months ended      Nine months ended
                             September 30            September 30
                        ----------------------  ----------------------
 (unaudited)                2009         2008       2009      2008
                        ----------  ----------  ----------  ----------

 Revenues               $  451,080  $  450,051  $1,237,433  $1,273,951
 
 Cost of revenues          275,469     267,635     762,397     773,499
 Selling, general and
  administrative
  expenses                 135,391     136,925     390,460     410,574
 Depreciation                7,128       5,592      19,492      17,217
 Amortization of
  intangible assets          4,949       4,457      16,202      13,744
 Goodwill
  impairment charge             --          --      29,583          --
                        ----------  ----------  ----------  ----------
 Operating earnings         28,143      35,442      19,299      58,917
 Integrated Security
  division divestiture
  bonus                         --       5,715          --       5,715
 (Gain) loss on
  available-for-sale
  securities                (3,545)      2,485      (4,488)      2,485
 Interest expense, net       2,928       1,188       8,622       8,757
 Other expense (income)         46      (1,354)        (65)     (3,274)
                        ----------  ----------  ----------  ----------
                            28,714      27,408      15,230      45,234
 Income tax (1)             12,036       8,151      31,220       8,330
                        ----------  ----------  ----------  ----------
 Net earnings (loss)
  from continuing
  operations                16,678      19,257     (15,990)     36,904
 Discontinued operations,
  net of tax (2)               (19)     67,628      (3,248)     64,410
                        ----------  ----------  ----------  ----------
 Net earnings (loss)        16,659      86,885     (19,238)    101,314
 Non-controlling
  interest share
  of earnings (loss)         2,401       5,563       1,003      11,488
 Non-controlling interest
  redemption increment       6,940     (36,344)     17,787     (24,276)
                        ----------  ----------  ----------  ----------
 Net earnings (loss)
  attributable to
  Company                 $  7,318  $  117,666  $  (38,028) $  114,102
 Preferred share
 dividends                   2,525       2,538       7,576       7,770
                        ----------  ----------  ----------  ----------
 Net earnings (loss)
  attributable to
  common shareholders   $    4,793  $  115,128  $  (45,604) $  106,332
                        ==========  ==========  ==========  ==========
 Net earnings (loss)
  per common share (3)
  Basic
   Continuing
    operations          $     0.16  $     0.36  $    (1.45) $     0.53
   Discontinued
    operations                  --        2.32       (0.10)       2.22
                        ----------  ----------  ----------  ----------
                        $     0.16  $     2.68  $    (1.55) $     2.75
                        ==========  ==========  ==========  ==========

  Diluted (4)
   Continuing
    operations          $     0.16  $    0.36   $    (1.45) $     0.53
   Discontinued
    operations                  --        2.30       (0.10)       2.20
                        ----------  ----------  ----------  ----------
                        $     0.16  $    2.66   $    (1.55) $     2.73
                        ==========  ==========  ==========  ==========

 Adjusted diluted net
  earnings per common
  share from
  continuing operations
  (5)                   $     0.60  $    0.68   $     1.15  $     1.08
                        ==========  ==========  ==========  ==========

 Weighted average
  common shares 
  outstanding: (in
  thousands)
  Basic                     29,441      29,395      29,401      29,824   
  Diluted                   29,548      29,568      29,443      30,055

 Notes to Condensed Consolidated Statements of Earnings

 (1) Income tax expense for the three months ended September 30, 2009
 includes a $3,563 non-cash valuation allowance charge related to
 deferred income tax assets (2008 - nil); income tax expense for the
 nine months ended September 30, 2009 includes a $18,521 non-cash
 valuation allowance charge related to deferred income tax assets (2008
 - nil).
 (2) Reflects (i) the Integrated Security segment; (ii) the Canadian
 commercial mortgage securitization operation; and (iii) the Chicago-
 based US mortgage brokerage and servicing operation.   Amounts shown
 are before NCI share.  For the three months ended September 30, 2009,
 NCI share was nil (2008 - $445) and for the nine months ended
 September 30, 2009 NCI share was $(275) (2008 - $1,808).
 (3) Based on the implementation rules within ASC 810-10 and related
 guidance, comparative earnings per share for both the three month and
 nine month periods ended September 30, 2008 were not restated for the
 changes in accounting for NCI.
 (4) Numerators for diluted earnings per share calculations have been
 adjusted to reflect dilution from stock options at a subsidiary.  The
 adjustment for the three months ended September 30, 2009 was nil (2008
 - $62) and nine months ended September 30, 2009 was nil (2008 - $79).
 (5) See definition and reconciliation above.


 Condensed Consolidated Balance Sheets
 -------------------------------------
 (in thousands of US dollars)


                                            September 30   December 31
 (unaudited)                                        2009          2008
                                            ------------  ------------

 Assets
 ------
 Cash and cash equivalents                  $     63,274  $     79,642
 Restricted cash                                   3,715        10,240
 Accounts receivable                             212,597       175,520
 Inventories                                      10,213        10,572
 Prepaids and other current assets                48,016        50,674
 Assets held for sale                                415        14,210
                                            ------------  ------------
  Current assets                                 338,230       340,858
 Fixed assets                                     76,310        76,789
 Other non-current assets                         23,754        39,363
 Goodwill and intangibles                        501,316       527,124
 Assets held for sale                              2,205         6,503
                                            ------------  ------------
  Total assets                              $    941,815  $    990,637
                                            ============  ============

 Liabilities and shareholders' equity
 ------------------------------------
 Accounts payable and accrued liabilities   $    219,882  $    215,992
 Other current liabilities                        39,197        35,242
 Long term debt - current                         23,181        20,899
 Liabilities related to assets held for sale          10        12,946
                                            ------------  ------------
  Current liabilities                            282,270       285,079
 Long term debt - non-current                    261,540       245,470
 Other liabilities                                24,792        21,832
 Deferred income tax                              41,999        42,072
 Liabilities related to assets held for sale          --           278
 Non-controlling interests                       162,316       196,765
 Shareholders' equity                            168,898       199,141
                                            ------------  ------------
  Total liabilities and equity              $    941,815  $    990,637
                                            ============  ============


 Supplemental Balance Sheet information
 Total debt                                 $    284,721  $    266,369
                                            ------------  ------------
 Total debt, net of cash                         221,447       186,727
                                            ------------  ------------


 Condensed Consolidated Statements of Cash Flows
 -----------------------------------------------
 (in thousands of US dollars)

                                Three months ended   Nine months ended
 (unaudited)                       September 30        September 30
                                ------------------  ------------------
                                  2009      2008      2009      2008
                                --------  --------  --------  --------
 Operating activities
 Net earnings (loss) from
  continuing operations         $ 16,678  $ 19,257  $(15,990) $ 36,904
 Items not affecting cash:
  Depreciation and amortization   12,077    10,051    35,694    30,963
  Goodwill impairment charge          --        --    29,583        --
  Deferred income tax             (1,547)   (3,047)      879   (22,641)
  Other                              721       190     1,837     3,986
                                --------  --------  --------  --------
                                  27,929    26,451    52,003    49,212
 Changes in operating assets
  and liabilities                  4,905     4,089   (26,572)  (38,810)
 Discontinued operations           6,573       381       621     7,688
                                --------  --------  --------  --------
 Net cash provided by operating
  activities                      39,407    30,921    26,052    18,090
                                --------  --------  --------  --------
 Investing activities
 Acquisitions of businesses,
  net of cash acquired            (9,044)  (15,189)  (34,323)  (43,716)
 Purchases of fixed assets, net   (7,233)   (4,010)  (18,548)  (19,285)
 Other investing activities       11,456     1,218     8,442     8,612
 Discontinued operations             307   155,101      (167)  154,413
                                --------  --------  --------  --------
 Net cash (used in) provided by
  investing activities            (4,514)  137,120   (44,596)  100,024
                                --------  --------  --------  --------
 Financing activities
 (Decrease) increase in
  long-term debt, net            (32,035) (136,357)   15,786   (87,778)
 Preferred share dividends        (2,525)   (2,538)   (7,576)   (7,770)
 Other financing activities       (3,900)   (3,374)   (9,444)  (27,308)
 Discontinued operations              --        --        --       140
                                --------  --------  --------  --------
 Net cash used in financing
  activities                     (38,460) (142,269)   (1,234) (122,716)
                                --------  --------  --------  --------
 Effect of exchange rate
  changes on cash                  1,757        56     3,149    (2,379)
                                --------  --------  --------  --------
 (Decrease) increase in cash
  and cash equivalents            (1,810)   25,828   (16,629)   (6,981)
 Cash and cash equivalents,
  beginning of period including
  cash held by discontinued
  operations                    $ 65,230  $ 69,227  $ 80,049  $102,036
                                --------  --------  --------  --------
 Cash and cash equivalents, end
  of period including cash held
  by discontinued operations    $ 63,420  $ 95,055  $ 63,420  $ 95,055
                                ========  ========  ========  ========

 Segmented Revenues, EBITDA and Operating Earnings
 -------------------------------------------------
 (in thousands of US dollars)

             Commercial
                   Real Residential 
                 Estate    Property  Property
 (unaudited)   Services  Management  Services  Corporate  Consolidated
             ---------------------------------------------------------

 Three 
  months 
  ended 
  September 
  30

 2009
 Revenues    $ 155,984    $ 174,757 $ 120,305       $ 34     $ 451,080
 EBITDA          2,008       17,646    24,180     (3,614)       40,220
 Stock-based 
  compen-
  sation                                                         1,525
 Cost 
  containment    1,766                                           1,766
             ---------                                       ---------
                 3,774                                          43,511
             ---------                                       ---------
 Operating 
  earnings 
  (loss)        (4,338)      14,720    21,457     (3,696)       28,143

 2008
 Revenues    $ 185,158    $ 167,388  $ 97,467       $ 38     $ 450,051
 EBITDA         10,649       17,744    20,266     (3,168)       45,491
 Stock-based 
  compen-
  sation                                                          326
 Cost 
  containment    1,634                                           1,634
             ---------                                       ---------
                12,283                                          47,451
             ---------                                       ---------
 Operating 
  earnings       5,250       15,039    18,408     (3,255)       35,442

             Commercial
                   Real Residential 
                 Estate    Property  Property
 (unaudited)   Services  Management  Services  Corporate  Consolidated
             ---------------------------------------------------------
 Nine months 
  ended 
  September 
  30

 2009
 Revenues     $ 417,043   $ 489,271 $ 331,020       $ 99   $ 1,237,433
 EBITDA         (13,516)     46,074    60,414     (8,396)       84,576
 Stock-based 
  compen-
  sation                                                         4,696
 Cost 
  containment     7,841                                          7,841
             ----------                                    -----------
                 (5,675)                                        97,113
             ----------                                    -----------
 Operating 
  earnings 
  (loss) (1)    (62,827)     37,402    53,351     (8,627)      19,299


 2008
 Revenues     $ 564,342  $  471,038 $ 238,412      $ 159   $ 1,273,951
 EBITDA          19,321      43,626    35,369     (8,438)       89,878
 Stock-based 
  compen-
  sation                                                         2,646
 Cost 
  containment     2,424                                          2,424
             ----------                                    -----------
                 21,745                                         94,948
             ----------                                    -----------
 Operating 
  earnings        2,729      35,009    29,932     (8,753)       58,917


 (1) Includes goodwill impairment charge in the amount of $29,583
     recorded in the Commercial Real Estate Services segment during 
     the quarter ended March 31, 2009.

Contact:

FirstService Corporation
Jay S. Hennick, Founder & CEO
D. Scott Patterson, President & COO
John B. Friedrichsen, Senior Vice President & CFO
(416) 960-9500

Related Headlines

Top Stories

Related Message Boards

Sponsored Links

Copyright © 2009 GlobeNewswire. All rights reserved. Redistribution of this content is expressly prohibited without prior written consent. GlobeNewswire makes no claims concerning the accuracy or validity of the information, and shall not be held liable for any errors, delays, omissions or use thereof.