GDI Integrated Facility Services Inc. Releases its Financial Results for the First Quarter Ended March 31, 2023

• 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.

Cision

View original content: http://www.newswire.ca/en/releases/archive/May2023/11/c6301.html