GDI Integrated Facility Services Inc. Releases its Financial Results for the First Quarter Ended March 31, 2022

Posted on: May 11, 2022
  • Q1 2022 revenue of $495 million – an increase $111 million, or 29%, over Q1 2021.
  • Q1 2022 Adjusted EBITDA1 of $36 million – an increase of $2 million, or 6%, over Q1 2021.
  • Q1 2022 net income of $7 million or $0.30 per share compared with $13 million or $0.57 per share in the first quarter of 2021.
  • During Q1 2022, GDI acquired Gestion E.C.I. Inc. (“Énergère”) and M.T.I. Mechanical Trade Industries LTD (“MTI”).
  • The Company is announcing a normal course issuer bid (“NCIB”) subject to Toronto Stock Exchange (“TSX”) approval.

LASALLE, QC, May 10, 2022 /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, 2022.

For the first quarter of 2022:

  • Revenue for the first quarter of 2022 was $495 million, an increase of $111 million, or 29%, over the first quarter of 2021. Organic revenue growth was 4% and growth from acquisitions was 25%.
  • Adjusted EBITDA1 for the first quarter of 2022 amounted to $36 million, an increase of $2 million, or 6%, over the first quarter of 2021.
  • Net income was $7 million or $0.30 per share compared to $13 million or $0.57 per share in Q1 2021. The decrease in net income is mainly attributable to CEWS subsidies recorded in 2021.

For the first quarters of 2022 and 2021, the business segments performed as follows:

(in millions of

Canadian dollars)

Janitorial Canada

Janitorial USA

Technical Services

Complementary Services

Consolidated

2022

2021

2022

2021

2022

2021

2022

2021

2022

2021

Revenue

142

134

163

80

172

156

25

17

495

384

Organic Growth (Decline)

5%

(4%)

14%

2%

(2%)

(1%)

18%

3%

4%

(1%)

Adjusted EBITDA1

19

22

13

8

6

6

1

1

36

34

Adjusted EBITDA Margin1

13%

16%

8%

10%

3%

4%

4%

6%

7%

9%


GDI’s Janitorial Canada segment had a strong quarter, recording $142 million in revenue representing an organic growth of 5%, while delivering $19 million in Adjusted EBITDA1, a decline of $3 million compared to Q1 F2021 which was a pandemic-era high for the segment. Adjusted EBITDA1 in Q1 F2022 was higher than in each of the last three quarters.

GDI’s Janitorial USA segment also performed well in Q1 2022, recording revenue of $163 million representing organic growth of 14% and Adjusted EBITDA1 of $13 million, an increase of 63% over Q1 2021 primarily due to the acquisition of IH Services, Inc. (“IH Services”) on December 31, 2021.

The Technical Services segment recorded revenue of $172 million or growth of 10% over Q1 F2021 which was generated mainly from acquisitions. The segment recorded Adjusted EBITDA1 of $6 million which was in-line with the prior year’s quarter. Historically, the first quarter is the businesses weakest quarter as this segment is affected by seasonality.

Finally, GDI’s Complementary Services segment recorded revenues of $25 million and Adjusted EBITDA1 of $1 million. This segment, which has been negatively affected by low demand for daily consumables such as tissue, towels and soaps, started to rebound in the first quarter. This segment also recorded organic growth of 18% in Q1 F2022 mostly due to the new GDI integrated facility services business unit (“GDI IFS”) launched at the beginning of the quarter.

“I am pleased to report that GDI delivered another strong quarter of growth in both revenue and Adjusted EBITDA1,” stated Claude Bigras, President & CEO of GDI. “We are continuing to see a reopening of regional economies and a progressive reoccupation of buildings as 2022 evolves. Our Janitorial Canada business segment delivered a strong quarter with 5% organic growth and Adjusted EBITDA1 that was higher than each of the last three quarters. Our Janitorial USA business enjoyed exceptional growth and more than doubled revenue in the quarter due to the acquisition of IH Services and an impressive organic growth rate of 14%. Together with IH, we can offer the market one of the largest janitorial and sanitation platforms in the eastern half of the USA with a meaningful presence in over 30 States. During the quarter, our Ainsworth Technical Services business experienced delays in a number of projects because of bottlenecks in the global supply chain. Even in the face of these delays the business generated revenue growth of 10% and margins that were in-line with last year’s first quarter and its backlog continues to grow. Our manufacturing and distribution business posted a respectable quarter and is showing early signs of recovery as buildings progressively reoccupy and demand for daily consumables grows. Finally, I am happy to announce that our new GDI IFS business unit, which offers clients a single source supplier for all of their facility services needs, began executing on its inaugural contract in the quarter and is actively pursuing a promising pipeline of new opportunities,” added Mr. Bigras.

“I am very encouraged about the outlook for our business for the remainder of 2022 and in the years that will follow. Our Canadian janitorial business is showing resilience as most restrictive COVID regulations have been lifted and buildings progressively reoccupy. Thanks to the addition of IH Services, our U.S. janitorial business is in a significantly stronger position and our team is now working hand-in-hand with their partners at IH to identify revenue synergies and grow market share. With the addition of Energere in January adding energy advisory and energy engineering capabilities, Ainsworth continues to strengthen its value proposition to clients and its position in the market. We are exiting the COVID-19 pandemic with all of GDI’s business units performing well, with a healthy balance sheet that can comfortably support a significant amount of additional growth, and an overall business that has never been in a stronger competitive position. I am very much looking forward to seeing how the year will evolve,” concluded Mr. Bigras.

NCIB

The Company announced today that its Board of Directors approved a NCIB to purchase for cancellation during the next 12 months up to 500,000 Subordinate Voting Shares, representing approximately 3.6% of the Company’s public float as of the close of business on May 10, 2022, the whole subject to approval by the TSX and the issuance of a press release with all the required details concerning the NCIB prior to the start of the bid. GDI’s management and Board of Directors believe that the purchase for cancellation of the Company’s Subordinate Voting Shares falls within its criteria for capital allocation. The NCIB will provide the ability for the Company to purchase Subordinate Voting Shares from time to time at its di

scretion as part of its mandate to increase shareholder value.

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, industrial facilities, healthcare establishments, stadiums and event venues, hotels, shopping centres, distribution facilities, airports and other transportation facilities. GDI’s commercial facility services capabilities include commercial janitorial and building maintenance, 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 of the MD&A) that could cause actual results to differ materially from what GDI currently expects. Namely, these factors include risks pertaining to COVID-19 and related pandemic, 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, 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, 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.

___________________________________

1   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, Canadian Emergency Wage Subsidy and related expenses, transaction, reorganization and other costs and share-based compensation. 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).


 

Analyst Conference Call:

May 11, 2022 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:

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Confirmation Code: 03250161


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Confirmation Code: 250161#


March 31, 2022 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,
2022

As at December 31,
2021


Assets










Current assets





     Cash


9


24

     Trade and other receivables and contract assets


470


431

     Current tax assets


2


4

     Inventories


37


34

     Other financial assets


12


12

     Prepaid expenses and other


12


9

     Derivatives


1


     Total current assets


543


514






Non-current assets





     Other long-term assets


9


8

     Derivatives


1


     Property, plant and equipment


120


117

     Deferred tax assets


1


1

     Intangible assets


151


143

     Goodwill


321


302

     Total non-current assets


603


571






Total assets


1,146


1,085






Liabilities and Shareholders’ Equity










Current liabilities





     Bank indebtedness



3

     Trade and other payables


266


250

     Provisions


28


28

     Contract liabilities


39


43

     Current tax liabilities


4


5

     Current portion of long-term debt


39


28

     Total current liabilities


376


357






Non-current liabilities





     Long-term debt


324


299

     Long-term payables


9


7

     Deferred tax liabilities


35


31

Total non-current liabilities


368


337






Shareholders’ equity





     Share capital


374


371

     Retained earnings


20


13

     Contributed surplus


5


6

     Accumulated other comprehensive income


3


1

     Total shareholders’ equity


402


391






Total liabilities and shareholders’ equity


1,146


1,085








 

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,


2022

2021




Revenues

495

384




Cost of services

394

295

Selling and administrative expenses

67

56

Transaction, reorganization and other costs

1

Canadian Emergency Wage Subsidy and related expenses

(7)

Amortization of intangible assets

6

5

Depreciation of property, plant and equipment

10

7

Operating income

18

27




Net finance expense

8

9

Income before income taxes

10

18




Income tax expense

3

5

Net income

7

13




Other comprehensive income



     (Losses) gains that are or may be reclassified to earnings:



          Foreign currency translation differences for foreign operations

(4)

(2)

          Hedge of net investments in foreign operations, net of tax of nil

4

1

          Cash flow hedges, effective portion of changes in fair value,  net of tax of ($1) (2021 – nil)

2

1


2




Total comprehensive income

9

13




Earnings per share:



     Basic

0.30

0.57

     Diluted

0.30

0.56

 

GDI INTEGRATED FACILITY SERVICES INC.
Condensed Consolidated Interim Statements of Changes in Equity
Three-month periods ended March 31, 2022 and 2021
(Unaudited) (In millions of Canadian dollars, except for number of shares)


Share capital

Retained
earnings
(deficit)

Contributed
surplus

Accumulated
other
comprehensive
income

Total


Number
(in thousands
of shares)

Amount

Balance, January 1, 2021

22,780

364

(31)

6

339

Net income

13

13

Total comprehensive income for the period

13

13

Transactions with owners of the Company:






Stock options exercised

151

3

(1)

2

Balance, March 31, 2021

22,931

367

(18)

5

354








Balance, January 1, 2022

23,121

371

13

6

1

391

Net income

7

7

Other comprehensive loss

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

 

GDI INTEGRATED FACILITY SERVICES INC.
Condensed Consolidated Interim Statements of Cash Flows
(Unaudited) (In millions of Canadian dollars)

Three-month periods ended March 31,



2022

2021






Cash flows from (used in) operating activities




Net income

7

13


Adjustments for:




     Depreciation and amortization

16

12


     Net finance expense

8

9


     Income tax expense

3

5


Income taxes paid

(1)

(18)


Net changes in non-cash operating assets and liabilities

(27)

32


Net cash from operating activities

6

53






Cash flows from (used in) financing activities




Proceeds from issuance of long-term debt                                                         

80

53


Repayment of long-term debt

(53)

(42)


Payment of lease liabilities

(6)

(4)


Interest paid

(2)

(1)


Proceeds from issuance of subordinate voting shares

2

2


Net cash from financing activities

21

8






Cash flows from (used in) investing activities




Business acquisitions, net of cash acquired

(33)

(34)


Additions to property, plant and equipment

(5)

(3)


Additions to intangible assets

(2)


Net cash used in investing activities

(40)

(37)






Foreign exchange gain on cash held in foreign currencies

1






Net change in cash

(12)

24






Cash (bank indebtedness), beginning of period:




Cash

24

3


Bank indebtedness

(3)

(4)



21

(1)







Cash, end of period

9

23



 

GDI INTEGRATED FACILITY SERVICES INC.
Segmented information
Three-month periods ended March 31, 2022 and 2021
(Unaudited) (In millions of Canadian dollars)





Three-month period ended March 31, 2022


Janitorial
Canada

Janitorial
USA

Technical
Services

Complementary
Services

Corporate and
eliminations

     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

5

(7)

Revenues

142

163

172

25

(7)

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

1

1

16

Share-based compensation (1)

2

2

Adjusted EBITDA

19

13

6

1

(3)

36








Total assets

277

313

446

68

42

1,146

Total liabilities

87

86

224

13

334

744

Additions to property, plant and equipment

2

2

9

1

14

Additions to intangible assets

13

2

15

Addition of goodwill

21

21

(1)  Includes stock option, performance share unit and restricted share unit plans.

 





Three-month period ended March 31, 2021


Janitorial
Canada

Janitorial
USA

Technical
Services

Complementary
Services

Corporate and
eliminations

Total








Recurring/contractual services

98

69

19

­ –­

­ –­

186

On-call services

22

11

51

­ –­

­ –­

84

Project

86

86

Manufacturing and distribution

14

14

Other revenues

14

14








Total external revenues

134

80

156

14

384

Inter-segment revenues

3

(3)

Revenues

134

80

156

17

(3)

384








Income (loss) before income taxes

19

5

(6)

18

Net finance expense

1

1

7

9

Operating income

19

6

1

1

27

Depreciation and amortization

3

2

5

1

1

12

Canadian Emergency Wage Subsidy and related expenses

(7)

(7)

Transaction, reorganization and other costs

1

1

Share-based compensation (1)

1

1

Adjusted EBITDA

22

8

6

1

(3)

34








Total assets (2)

262

323

398

70

32

1,085

Total liabilities (2)

83

91

204

15

301

694

Additions to property, plant and equipment

1

9

1

11

Additions to intangible assets

18

1

19

Addition of goodwill

21

21

(1)  Includes stock option, performance share unit and restricted share unit plans.

(2)  As at December 31, 2021

 

GDI INTEGRATED FACILITY SERVICES INC.
Business acquisitions
Three-month periods ended March 31, 2022 and 2021
(Unaudited) (In millions of Canadian dollars)

Acquisition date

Company acquired

Location

Segment
reporting

Purchase price
allocation status

2022 Acquisitions





January 21, 2022

Gestion E.C.I. Inc. and its subsidiaries (“Énergère“)

Montreal, Quebec

Technical

Services

Preliminary

March 1, 2022

M.T.I. Mechanical Trade Industries LTD and its subsidiary (“MTI“)

Markham, Ontario

Technical

Services

Preliminary

2021 Acquisitions





January 1, 2021

The BPAC Group, Inc. and its subsidiaries (“BP“)

New York, New York

Technical Services

Completed

September 1, 2021

Enginuity, LLC (“Enginuity“)

Mechanicsburg, Pennsylvania

Technical Services

Preliminary

September 15, 2021

Fuller Industries, LLC (“Fuller“)

Great Bend, Kansas

Complementary Services

Preliminary

December 31, 2021

IH Services, Inc. and its subsidiaries (“IH“)

Greenville, South Carolina

Janitorial USA

Preliminary

 

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

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

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

Three months ended





(in millions of Canadian dollars, except per share data) (1)

March

2021

December

2020

September

2020

June

2020

Revenue

384

365

365

327

Operating income

27

28

25

30

     Depreciation and amortization

12

10

10

12

     Canadian Emergency Wage Subsidy and related expenses

(7)

(9)

(6)

(23)

     Transaction, reorganization and other costs

1

2

2

     Share-based compensation

1

1

1

2

Adjusted EBITDA

34

32

30

23

Net income for the period

13

17

13

13

Earnings per share





     Basic

0.57

0.75

0.59

0.63

     Diluted

0.56

0.73

0.57

0.61











(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, 2020, September 30, 2020, December 31, 2020, March 31, 2021, June 30, 2021 and September 30, 2021 were favourably impacted by the Canadian Emergency Wage Subsidy and related expenses.

 

 

SOURCE GDI Integrated Facility Services Inc.

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