GDI Integrated Facility Services Inc. Releases its Financial Results for the Fourth Quarter and the Year Ended December 31, 2022

Posted on: March 01, 2023
  • Q4 2022 revenue of $588 million, an increase of $155 million, or 36%, over Q4 2021.
  • Q4 2022 Adjusted EBITDA1 of $41 million, an increase of $7 million, or 21%, over Q4 2021.
  • Q4 2022 net income of $10 million or $0.41 per share compared with $7 million or $0.30 per share for the fourth quarter of 2021.

  • 2022 revenue of $2.17 billion, an increase of $575 million or 36% over 2021.
  • 2022 Adjusted EBITDA1 of $153 million, an increase of $20 million, or 15%, over 2021.
  • 2022 net income of $36 million or $1.57 per share compared with $43 million or $1.89 per share in 2021.

LASALLE, QC, March 1, 2023 /CNW/ – GDI Integrated Facility Services Inc. (“GDI” or the “Company“) (TSX: GDI) is pleased to announce its financial results for the fourth quarter and the year ended December 31, 2022.

For the fourth quarter of 2022:

  • Revenue reached $588 million, an increase of $155 million, or 36%, over the fourth quarter of 2021, comprised of 10% Organic Growth, 23% growth from acquisitions and 3% growth from the appreciation of the U.S. dollar relative to the Canadian dollar.
  • Adjusted EBITDA1 amounted to $41 million, an increase of $7 million, or 21%, over the fourth quarter of 2021.
  • Net income was $10 million or $0.41 per share compared to $7 million or $0.30 per share in Q4 2021. The increase of net income is mainly attributable to lower income tax expense of $4 million in the fourth quarter of 2022 compared to 2021.

For the fourth 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

144

140

176

89

250

190

25

18

588

433

Organic Growth (Decline)

3 %

1 %

(2 %)

9 %

20 %

14 %

39 %

(40 %)

10 %

5 %

Adjusted EBITDA1

16

18

14

8

17

12

(1)

(1)

41

34

Adjusted EBITDA Margin1

11 %

13 %

8 %

9 %

7 %

6 %

(4 %)

(6 %)

7 %

8 %


For the year ended December 31, 2022:

  • Revenue reached $2.17 billion, an increase of $575 million, or 36%, compared to 2021, comprised of 9% Organic Growth, 26% growth from acquisitions and 1% growth from the appreciation of the U.S. dollar relative to the Canadian dollar.
  • Adjusted EBITDA1 amounted to $153 million, an increase of $20 million, or 15%, compared to 2021.
  • Net income was $36 million or $1.57 per share compared to $43 million or $1.89 per share in 2021. The decrease is mainly due to lower operating income of $15 million, which included a reduction in Canadian Emergency Wage Subsidy and related expenses of $13 million, partially offset by lower income tax expense of $7 million.
  • During Fiscal 2022, GDI acquired Gestion E.C.I. inc., along with its subsidiaries (January 2022), M.T.I. Mechanical Trade Industries Ltd and its subsidiary (March 2022) and Cascadian Building Maintenance, Ltd. (September 2022).

For the years ended December 31, 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

572

533

678

330

851

685

100

65

2,172

1,597

Organic Growth (Decline)

7 %

0 %

8 %

6 %

10 %

11 %

29 %

(31 %)

9 %

4 %

Adjusted EBITDA1

71

77

51

31

47

38

1

(1)

153

133

Adjusted EBITDA Margin1

12 %

14 %

8 %

9 %

6 %

6 %

1 %

(2 %)

7 %

8 %


During Q4 F2022 GDI’s Janitorial Canada segment had another strong quarter, recording $144 million in revenue representing an Organic Growth of 3%, while delivering $16 million in Adjusted EBITDA1, a decrease of $2 million compared to Q4 2021. GDI’s Janitorial USA segment also performed well in Q4 2022, recording revenue of $176 million representing Organic Decline of 2% which is mainly attributable to additional incremental services provided in Q4 2021. The Janitorial USA segment recorded Adjusted EBITDA1 of $14 million in Q4 2022, representing an increase of 75% over Q4 2021, the growth being primarily attributable to the acquisition of IH Services on December 31, 2021. In line with expectations, Adjusted EBITDA margins1 in both Janitorial segments declined as a lower proportion of COVID-19 related services were provided in the quarter compared to the prior year while contractual recurring revenues increased.

The Technical Services segment recorded revenue of $250 million or growth of 32% over Q4 2021, of which 20% comes from Organic Growth and 9% was generated from acquisitions. The segment recorded Adjusted EBITDA1 of $17 million compared to $12 million in Q4 2021, representing an Adjusted EBITDA margin1 of 7%. The Technical Services Segment is now operating at normal seasonal capacity levels after being weighted down by supply chain challenges at the beginning of the year.

Finally, GDI’s Complementary Services segment recorded revenue of $25 million and a negative Adjusted EBITDA1 of $1 million compared to revenue of $18 million and a negative Adjusted EBITDA1 of $1 million in Q4 2021. This segment also recorded Organic Growth of 39% in Q4 2022, the majority of which was due to GDI’s integrated facility services business unit (“GDI IFS”) which was launched at the beginning of 2022.

“GDI performed extremely well during F2022,” stated Claude Bigras, President & CEO of GDI. “For the first time in our history, we surpassed the $2 billion revenue milestone, cementing GDI’s position as one of the largest and the leading facility services provider in North America with the capability to offer a complete range of fully integrated services on a self-perform basis. F2022 also saw our Janitorial USA business grow larger than our Canadian Janitorial business thanks in large part to the IH Services acquisition segment which continues to exceed our expectations.”

“During Q4 F2022, each of our core business segments delivered strong results. Our Janitorial businesses in Canada and the USA continued to support clients as occupancy rates in the office market gradually increase as the majority of tenants have instituted hybrid work plans for returning staff, while our clients outside of the office market have largely returned to pre-pandemic occupancy levels. We have seen a progressive pullback in COVID-19 extra services through F2022 in our Canadian Janitorial business which is reflected in the year-over-year margin comparisons, yet the business remains resilient and is delivering solid results. Our Ainsworth Technical Services segment had a very strong quarter with 20% Organic Growth and Adjusted EBITDA margin1 of 7%. While Q4 is traditionally the strongest quarter for this business segment, the outstanding level of Organic Growth is the result of Ainsworth’s formidable competitive positioning in the market. To our knowledge, no other company offers Ainsworth’s full suite of multi-trade services across Canada and into the USA on a self-perform basis, which is enabling Ainsworth to win new clients and gain market share. Finally, the outlook for our Complementary Services segment remains positive, with the janitorial products manufacturing and distribution business slowly recovering from it’s COVID-19 lows and our IFS business unit building out its pipeline of sales opportunities,” stated Mr. Bigras.

“As we begin F2023, I have never seen GDI in a stronger position. We are by far the leading facility services provider in Canada and have a very strong and growing platform in the United States. All of our business segments are performing well and the outlook for each is positive. Our leverage ratio is well within our comfort zone at approximately 2.5x and we have significant capacity on our credit facilities, providing us with the ability to continue to execute on our strategic growth strategy. I would like to take the opportunity to thank all of the team members at GDI for their hard work and dedication, they are the heart of our business and make GDI the company it is today,” concluded Mr. Bigras.

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 of the MD&A) 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.

_____________________________

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:

March 2, 2023 at 9:00 A.M. (ET)

Kindly note that Investors and Media representatives may attend as listeners only.


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December 31, 2022 consolidated financial statements and accompanied Management & Discussion Analysis are filed on www.sedar.com.

 

GDI INTEGRATED FACILITY SERVICES INC.
Consolidated Statements of Financial Position
December 31, 2022 and 2021
(In millions of Canadian dollars)


2022

2021

Assets






Current assets



Cash

7

24

Trade and other receivables and contract assets

524

431

Current tax assets

7

4

Inventories

45

34

Other financial assets

11

12

Prepaid expenses and other

9

9

Derivatives

3

Total current assets

606

514




Non-current assets



Property, plant and equipment

122

117

Deferred tax assets

1

Intangible assets

139

143

Goodwill

344

302

Derivatives

1

Other assets

8

8

Total non-current assets

614

571




Total assets

1,220

1,085




Liabilities and Shareholders’ Equity






Current liabilities



Bank indebtedness

10

3

Trade and other payables

286

250

Provisions

26

28

Contract liabilities

30

43

Current tax liabilities

2

5

Current portion of long-term debt

43

28

Total current liabilities

397

357




Non-current liabilities



Long-term debt

345

299

Long-term payables

5

7

Deferred tax liabilities

34

31

Total non-current liabilities

384

337




Shareholders’ equity



Share capital

379

371

Retained earnings

49

13

Contributed surplus

4

6

Accumulated other comprehensive income

7

1

Total shareholders’ equity

439

391




Total liabilities and shareholders’ equity

1,220

1,085


GDI INTEGRATED FACILITY SERVICES INC.
Consolidated Statements of Comprehensive Income
Years ended December 31, 2022 and 2021
(In millions of Canadian dollars, except for earnings per share)


2022

2021




Revenues

2,172

1,597




Cost of services

1,733

1,257

Selling and administrative expenses

294

214

Transaction, reorganization and other costs

3

3

Canadian Emergency Wage Subsidy and related expenses

(13)

Amortization of intangible assets

28

20

Depreciation of property, plant and equipment

46

33

Operating income

68

83




Net finance expense

19

20

Income before income taxes

49

63




Income tax expense

13

20

Net income

36

43




Other comprehensive income



Gains (losses) that are or may be reclassified to earnings:



    Foreign currency translation differences for foreign operations

19

(1)

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

(16)

1

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

3

2


6

2




Total comprehensive income

42

45




Earnings per share:



  Basic

1.57

1.89

Diluted

1.53

1.84


GDI INTEGRATED FACILITY SERVICES INC.
Consolidated Statements of Changes in Equity
Years ended December 31, 2022 and 2021
(In millions of Canadian dollars)


Share capital

Retained
earnings
(deficit)

Contributed
surplus

Accumulated
other
comprehensive
income (loss)

Total


Number

(in
thousands
of shares)

Amount

Balance, January 1, 2021

22,780

363

(30)

6

(1)

338

Net income

43

43

Other comprehensive income

2

2

Total comprehensive income for the year

43

2

45

Transactions with owners of the Company:






Share-based compensation

2

2

Stock options exercised

341

8

(2)

6

Balance, December 31, 2021

23,121

371

13

6

1

391








Net income

36

36

Other comprehensive income

6

6

Total comprehensive income for the year

36

6

42

Transactions with owners of the Company:






Share-based compensation

1

1

Stock options exercised

340

9

(2)

7

Shares repurchased for cancellation

(47)

(1)

(1)

(2)

Balance, December 31, 2022

23,414

379

49

4

7

439


GDI INTEGRATED FACILITY SERVICES INC.
Consolidated Statements of Cash Flows
Years ended December 31, 2022 and 2021
(In millions of Canadian dollars)


2022

2021




Cash flows from (used in) operating activities



Net income

36

43

Adjustments for:



Depreciation and amortization

74

53

Equity portion of share-based compensation

1

2

Net finance expense

19

20

Income tax expense

13

20

Income taxes paid

(23)

(33)

Net changes in non-cash operating assets and liabilities   

(70)

12

Net cash from operating activities

50

117




Cash flows from (used in) financing activities



Proceeds from issuance of long-term debt  

217

247

Repayment of long-term debt

(192)

(141)

Payment of lease liabilities

(29)

(20)

Interest paid

(11)

(4)

Other

5

6

Net cash (used in) from financing activities

(10)

88




Cash flows from (used in) investing activities



Business acquisitions, net of cash and bank indebtedness acquired

(37)

(164)

Additions to property, plant and equipment

(19)

(15)

Additions to intangible assets

(7)

(4)

Other

1

Net cash used in investing activities

(63)

(182)




Foreign exchange loss on cash held in foreign currencies

(1)




Net change in cash (bank indebtedness) 

(24)

23




Cash (bank indebtedness), beginning of period:



Cash

24

3

Bank indebtedness

(3)

(5)


21

(2)




(Bank indebtedness) cash, end of period:



Cash

7

24

Bank indebtedness

(10)

(3)


(3)

21





GDI INTEGRATED FACILITY SERVICES INC.
Segmented information
Years ended December 31, 2022 and 2021
(In millions of Canadian dollars) 







2022


Janitorial
Canada

Janitorial
USA

Technical
Services

Complementary
Services

Corporate and
Eliminations

Total








Recurring/contractual services

473

624

90

15

1,202

On-call services

62

53

241

3

359

Project

511

511

Manufacturing and distribution

63

63

Other revenues

28

1

7

1

37








Total external revenues

563

678

849

82

2,172

Inter-segment revenues

9

2

18

(29)

Revenues

572

678

851

100

(29)

2,172








Income (loss) before income taxes

59

29

8

(3)

(44)

49

Net finance expense

(1)

6

3

11

19

Operating income (loss)

58

35

11

(3)

(33)

68

Depreciation and amortization

13

16

35

4

6

74

Transaction, reorganization and other costs

1

2

3

Share-based compensation (1)

8

8

Adjusted EBITDA

71

51

47

1

(17)

153








Total assets

267

320

515

74

44

1,220

Total liabilities

81

68

232

15

385

781

Additions to property, plant and equipment

8

9

24

2

6

49

Additions to intangible assets

2

10

7

19

Additions to goodwill

6

27

33









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


GDI INTEGRATED FACILITY SERVICES INC.
Segmented information
Years ended December 31, 2022 and 2021
(In millions of Canadian dollars)







2021


Janitorial
Canada

Janitorial
USA

Technical
Services

Complementary
Services

Corporate and
Eliminations

Total








Recurring/contractual services

411

291

90

792

On-call services

83

39

188

310

Project

406

406

Manufacturing and distribution

50

50

Other revenues

38

1

39








Total external revenues

532

330

685

50

1,597

Inter-segment revenues

1

15

(16)

Revenues

533

330

685

65

(16)

1,597








Income (loss) before income taxes

64

20

9

(4)

(26)

63

Net finance expense

4

2

14

20

Operating income (loss)

64

24

11

(4)

(12)

83

Depreciation and amortization

13

7

26

3

4

53

Canadian Emergency Wage Subsidy and related expenses

(13)

(13)

Transaction, reorganization and other costs

1

2

3

Share-based compensation (1)

7

7

Adjusted EBITDA

77

31

38

(1)

(12)

133








Total assets

262

323

398

70

32

1,085

Total liabilities

83

91

204

15

301

694

Additions to property, plant and equipment

5

13

28

14

6

66

Additions to intangible assets

2

36

24

3

3

68

Additions to goodwill

2

54

32

1

89










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


GDI INTEGRATED FACILITY SERVICES INC.
Business acquisitions
Years ended December 31, 2022 and 2021
(In millions of Canadian dollars)

Acquisition date

Company acquired

Location

Segment reporting


2022 Acquisitions

January 21, 2022

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

Montréal, Quebec

Technical

Services


March 1, 2022

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

Markham, Ontario

Technical

Services


September 1, 2022

Cascadian Building Maintenance, Ltd. (“Cascadian“)

Bellevue, Washington

Janitorial USA


2021 Acquisitions

January 1, 2021

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

New York, New York

Technical Services


September 1, 2021

Enginuity, LLC (“Enginuity“)

Mechanicsburg, Pennsylvania

Technical Services


September 15, 2021

Fuller Industries, LLC (“Fuller“)

Great Bend, Kansas

Complementary Services


December 31, 2021

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

Greenville, South Carolina

Janitorial USA



GDI INTEGRATED FACILITY SERVICES INC.
Supplementary Quarterly Financial Information
Three-month periods
(Unaudited) (In millions of Canadian dollars, except per share data)

Three-month periods ended

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

December

2022

September

2022

June

2022

March

2022

Revenue

588

563

526

495

Operating income

15

19

17

18

Depreciation and amortization

22

18

18

16

Transaction, reorganization and other costs

1

1

1

Share-based compensation

3

2

1

2

Adjusted EBITDA

41

40

37

36

Net income for the period

10

11

10

7

Earnings per share





   Basic

0.41

0.45

0.40

0.30

   Diluted

0.40

0.44

0.40

0.30

Three-month periods ended

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

December

2021

September

2021

June

2021

March
2021

Revenue

433

408

372

384

Operating income

15

18

24

27

Depreciation and amortization

15

13

12

12

Canadian Emergency Wage Subsidy and related expenses

(1)

(5)

(7)

Transaction, reorganization and other costs

2

1

1

Share-based compensation

2

2

2

1

Adjusted EBITDA

34

33

33

34

Net income for the period

7

9

14

13

Earnings per share





   Basic

0.30

0.41

0.61

0.57

   Diluted

0.29

0.40

0.59

0.56









(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 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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