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GDI Integrated Facility Services Inc. releases its financial results for the third quarter ended September 30, 2019

  • Q3 2019 revenue of $322.8 million , an increase $41.0 million or 14.6% over Q3 2018.
  • Q3 2019 Adjusted EBITDA1 of $20.2 million , an increase of $3.8 million , or 22.8%, over Q3 2018; excluding the favourable IFRS 16 impact of $2.3 million , Adjusted EBITDA1 increased by $1 .5 million or 9.1%.
  • Q3 2019 net income of $4.1 million or $0.19 per share compared with $4.2 million or $0.20 per share in the third quarter of 2018, a slight decrease of 2.1%. When excluding the negative impact from the remeasurement of cash settled share-based compensation due to the increase of GDI's stock price in the third quarter of 2019 and 2018, the earnings per share would have been $0.25 and $0.23 respectively.
  • Two acquisitions completed in the quarter

LASALLE, QC , Nov. 7, 2019 /CNW Telbec/ - GDI Integrated Facility Services Inc. ("GDI" or the "Company") (GDI.TO) is pleased to announce its financial results for the third quarter ended September 30, 2019 .

For the third quarter ended September 30, 2019 :

  • Revenue reached $322.8 million , an increase of $41.0 million , or 14.6%, over the third quarter of 2018. Organic growth in the third quarter of 2019 was 4.7%, with the remaining revenue growth coming primarily from acquisitions.
  • Adjusted EBITDA1 amounted to $20.2 million , an increase of $3.8 million , or 22.8%, over the third quarter of 2018. This increase includes a favourable impact of $2.3 million from the adoption of IFRS 16. Excluding this impact, Adjusted EBITDA1 would have been $17.9 million , or 9.1% higher than the third quarter of 2018, driven by strong growth in the Technical services and Janitorial USA business segments. Quarter-over-quarter growth in Adjusted EBITDA1 from janitorial operations was negatively impacted by Q3 2019 having one extra working day than the prior year's quarter.
  • Net income was $4.1 million or $0.19 per share compared to net income of $4.2 million or $0.20 per share in Q3 2018. Net income was negatively impacted by an after-tax $1.3 million in 2019 and $0.7 million in 2018, due to the remeasurement of cash settled share-based compensation due to the increase of GDI's stock price in the third quarter of 2019 and 2018.  Excluding this impact, earnings per share would have been $0.25 and $0.23 in the third quarter of 2019 and 2018 respectively.
  • GDI completed two acquisitions during the third quarter of 2019; one in the Technical services segment in Canada and one in the Janitorial USA segment.

For the third quarter of 2019 and 2018, the business segments performance was as follows:

 

(in thousands of Canadian dollars)

Janitorial

Canada

Janitorial

USA

Technical

services

Complementary
services

Consolidated

2019

2018

2019

2018

2019

2018

2019

2018

2019

2018

Revenue

133,041

131,769

82,168

64,660

97,176

73,140

17,648

18,929

322,814

281,822

Organic growth

1.0%

4.7%

10.4%

18.0%

5.1%

12.7%

11.2%

6.8%

4.7%

8.9%

Adjusted EBITDA1

9,283

9,825

6,038

5,062

5,653

3,639

1,048

1,071

20,224

16,467

Adjusted EBITDA margin1

7.0%

7.5%

7.3%

7.8%

5.8%

5.0%

5.9%

5.7%

6.3%

5.8%

Adjusted EBITDA – Pre-IFRS 161

8,634

9,825

5,495

5,062

4,926

3,639

856

1,071

17,962

16,467

Adjusted EBITDA margin – Pre IFRS 161 

6.5%

7.5%

6.7%

7.8%

5.1%

5.0%

4.9%

5.7%

5.6%

5.8%

 

For the nine-month period ended September 30, 2019 :

  • Revenue reached $940.9 million , an increase of $140.7 million , or 17.6%, compared to the corresponding period of 2018. Organic growth was 6.4%, with the remaining revenue growth coming primarily from acquisitions.
  • Adjusted EBITDA1 amounted to $56.8 million , an increase of $15.1 million , or 36.4%, over the corresponding period of 2018. This increase includes a favourable impact of $6.1 million from the adoption of IFRS 16. Excluding this impact, Adjusted EBITDA1 would have been $50.7 million , or 21.9% higher than the corresponding period of 2018, driven by strong growth in both the Janitorial USA and Technical Services business segments.
  • Net income was $7.7 million or $0.36 per share, compared to $9.0 million , or $0.42 per share for the corresponding period of 2018. Net income was negatively impacted by an after-tax $5.3 million in 2019 and $0.7 million in 2018, due to the remeasurement of cash settled share-based compensation due to the increase of GDI's stock price during the nine-month period ended September 30, 2019 and 2018. Excluding this impact, earnings per share would have been $0.61 and $0.46 for the first nine months of 2019 and 2018 respectively.

For the nine-month period ended September 30, 2019 and 2018, the business segments performance was as follows:

 

 (in thousands of Canadian dollars)

Janitorial

Canada

Janitorial

USA

Technical

services

Complementary
services

Consolidated

2019

2018

2019

2018

2019

2018

2019

2018

2019

2018

Revenue

398,529

395,805

241,311

169,566

265,108

201,229

57,032

51,436

940,884

800,186

Organic growth

0.7%

5.6%

21.0%

5.0%

5.4%

2.8%

11.1%

15.6%

6.4%

5.1%

Adjusted EBITDA1

26,876

26,857

18,995

11,798

13,528

8,236

3,724

2,940

56,750

41,608

Adjusted EBITDA margin1

6.7%

6.8%

7.9%

7.0%

5.1%

4.1%

6.5%

5.7%

6.0%

5.2%

Adjusted EBITDA – Pre-IFRS 161

25,499

26,857

17,814

11,798

11,410

8,236

3,123

2,940

50,701

41,608

Adjusted EBITDA margin – Pre IFRS 161 

6.4%

6.8%

7.4%

7.0%

4.3%

4.1%

5.5%

5.7%

5.4%

5.2%

 

"We had another very good quarter in Q3. Our Technical Services segment performed very well, with a 32.9% increase in revenue and an increase in Adjusted EBITDA – Pre IFRS 161 of 35.4%, compared to Q3 2018. We continue to develop and grow our Technical Services platform across the country. Our Janitorial USA business also performed well in the quarter and recorded another quarter of double-digit organic growth. The business reported lower quarter-over-quarter Adjusted EBITDA – Pre IFRS 161 margin principally because there was one extra working day in Q3 2019 compared to the prior year, which had a negative impact on this margin by approximately 0.8%. The extra day also had a 0.8% impact on the Adjusted EBITDA – Pre IFRS 161 margin of our Janitorial Canada business, which delivered $8.6 million of Adjusted EBITDA – Pre IFRS 161 in the third quarter representing a margin of 6.5% compared to $9.8 million or a margin of 7.5% in the corresponding period of 2018. As mentioned last quarter, we are investing to build our Modern territory franchise model and our operating margins have decreased due to revenue mix change and higher operating costs. Finally, our Complementary Services segment had a good quarter, but slightly lower than last year due to some margin pressure" stated Claude Bigras , President & CEO of GDI. 

"GDI's outlook for the remainder of 2019 remains positive, we are working on growing our business both organically and through acquisitions while also managing our costs. During the third quarter we continued to execute our growth strategy. Our Janitorial USA segment acquired a business which has helped expand GDI's platform into the State of Maine , and our Ainsworth business strengthened its presence in Winnipeg through the acquisition of an HVAC and building automation company. During the first three quarters of 2019, GDI generated cash flow from operating activities of $41.4 million , an increase of $40.1 million compared to the corresponding period of 2018. While we have invested $29.2 million in business acquisitions in 2019 to-date, our debt increase was limited to $20.9 million , when excluding the impact of IFRS 16. We are comfortable with our debt leverage ratios and we are well positioned to continue to execute on our business plan and capitalize on strategic growth opportunities as they arise," concluded Mr. Bigras.

ABOUT GDI

GDI is a leading 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, hotels, shopping centres, industrial facilities, healthcare establishments, distribution facilities, airports and other transportation facilities. GDI's commercial facility services capabilities include commercial janitorial, installation, maintenance and repair of HVAC-R, mechanical and electrical 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 (GDI.TO). 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. 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:

November 8, 2019 at 9:00 a.m. (ET)




Investors and Media representatives may attend as listeners only.




Please use the following dial-in number to have access to the conference call by dialing 5 minutes before the start of the conference:




Canada/United States access number: 1 888-224-3760




Confirmation Code: 21932438




A rebroadcast of the conference call will be available until November 15, 2019, by dialing:




Canada and United States Access (English): 1 800-633-8625




Canada and United States access (French): 1-800-997-6910




Confirmation Code: 21932438

 

September 30, 2019 unaudited condensed consolidated interim financial statements and accompanied Management & Discussion Analysis are filed on www.sedar.com.

 


1 The terms "Adjusted EBITDA", "Adjusted EBITDA margin", "Adjusted EBITDA – Pre IFRS 16" and "Pre-IFRS 16 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, goodwill impairment, transaction, reorganization and other costs and share-based compensation. The Adjusted EBITDA Margin is calculated by dividing Adjusted EBITDA by revenues. Adjusted EBITDA – Pre-IFRS 16 is defined as Adjusted EBITDA without application of IFRS 16 to make it comparable to prior year figures. The Adjusted EBITDA Margin – Pre IFRS 16 is calculated by dividing Adjusted EBITDA – Pre IFRS 16 by revenues. For more details and for a reconciliation of these measures to the most directly comparable IFRS measure, consult the "Operating and Financial Results" section of the Company's MD&A.  

 

SOURCE GDI Integrated Facility Services Inc.


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