GDI Integrated Facility Services Inc. Releases its Financial Results for the Second Quarter Ended June 30, 2022

Posted on: August 05, 2022
  • Q2 2022 revenue of $526 million – an increase of $154 million, or 41%, over Q2 2021.
  • Q2 2022 Adjusted EBITDA1 of $37 million – an increase of $4 million, or 12%, over Q2 2021.
  • Q2 2022 net income of $10 million or $0.40 per share compared with $14 million or $0.61 per share in the second quarter of 2021.

LASALLE, QC, Aug. 5, 2022  /CNW Telbec/ – GDI Integrated Facility Services Inc. (“GDI” or the “Company“) (TSX: GDI) is pleased to announce its financial results for its second quarter ended June 30, 2022.

For the second quarter of 2022:

  • Revenue was $526 million, an increase of $154 million, or 41%, over the second quarter of 2021, which is mainly the result of organic revenue growth of 11% and growth from acquisitions of 29%.

  • Adjusted EBITDA1 amounted to $37 million, an increase of $4 million, or 12%, over the second quarter of 2021.

  • Net income was $10 million or $0.40 per share compared to $14 million or $0.61 per share in Q2 2021.

For the second 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

145

126

164

75

199

160

25

15

526

372

Organic Growth (Decline)

14 %

6 %

12 %

5 %

8 %

22 %

27 %

(42 %)

11 %

8 %

Adjusted EBITDA1

19

18

13

7

8

10

1

1

37

33

Adjusted EBITDA Margin1

13 %

14 %

8 %

9 %

4 %

6 %

4 %

7 %

7 %

9 %


For the six-month period ended June 30, 2022:

  • Revenue reached $1.021 billion, an increase of $265 million, or 35%, over the corresponding period of 2021, which is mainly the result of organic revenue growth of 7% and growth from acquisitions of 27%.

  • Adjusted EBITDA1 amounted to $73 million, an increase of $6 million, or 9%, over the corresponding period of 2021.

  • Net income was $17 million or $0.71 per share compared to $27 million or $1.18 per share in the corresponding period of 2021.

 For the first two 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

287

260

327

155

371

316

50

32

1,021

756

Organic Growth (Decline)

10 %

1 %

13 %

3 %

3 %

10 %

22 %

(24 %)

7 %

3 %

Adjusted EBITDA1

39

40

25

15

14

16

1

2

73

67

Adjusted EBITDA Margin1

14 %

15 %

8 %

10 %

4 %

5 %

2 %

6 %

7 %

9 %


GDI’s Janitorial Canada segment had a strong quarter, recording $145 million in revenue representing an organic growth of 14%, while delivering $19 million in Adjusted EBITDA1, an increase of $1 million compared to Q2 2021. GDI’s Janitorial USA segment also performed well in Q2 2022, recording revenue of $164 million representing organic growth of 12% and Adjusted EBITDA1 of $13 million, an increase of 86% over Q2 2021 primarily due to the acquisition of IH Services, Inc. (“IH Services”) on December 31, 2021.

The Technical Services segment recorded revenue of $199 million or growth of 24% over Q2 2021 with 15% generated from acquisitions and 8% from organic revenue growth. The segment recorded Adjusted EBITDA1 of $8 million which was lower when compared to Q2 2021, which was unusually high due to a positive COVID-19 impact. Historically, the first half of the year in the Technical Services segment is seasonally slower and the business ramps up as the year progresses.

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 second quarter. This segment also recorded organic growth of 27% in Q2 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.

“I am pleased to say that GDI delivered another consecutive quarter of solid results with all of our business segments performing well”, stated Claude Bigras, President & CEO of GDI. “Our Janitorial Canada business generated an impressive organic growth rate of 14% in Q2 which was largely the result of an increase in occupancy in the commercial office market as many employers introduced hybrid return to work programs. Our Janitorial USA business also generated strong organic growth in the quarter, which was the combination of new business wins and periodically recurring services with certain clients. The acquisition of IH Services that closed at the end of 2021 continues to exceed our expectations, our teams are working closely together, and we are beginning to realize revenue synergies from sharing client relationships geographically and by cross-selling services and capabilities. Ainsworth, our Technical Services business, generated solid results which continued to be slightly weighed down by delays in project execution due to slow deliveries of materials in the quarter. I am pleased to report that our Ainsworth team is seeing an improvement in their supply chain in Q3 and expect project execution to improve as the year progresses. Finally, our Complementary Services segment, composed of our manufacturing and distribution business and our new GDI IFS business had a good quarter. Our manufacturing and distribution business is benefitting from the gradual increase in occupancy rates in the office market, and our GDI IFS business recently was awarded its second contract, providing an integrated facility services solution to a client in the aerospace sector”, added Mr. Bigras.

“I remain very positive about GDI’s business through the remainder of 2022. Our Janitorial Canada business is well positioned to support clients as office occupancy rates rise and employers roll-out a variety of hybrid return to work programs. Our Janitorial USA business has almost doubled with the IH Services acquisition and both businesses are stronger together with broader geographic coverage and a more comprehensive service offering. Ainsworth, which typically performs better in the second half of the year, is poised to perform well as their supply chain challenges mitigate. Our manufacturing and distribution business is rebounding and our new IFS business is garnering interest from clients and has momentum in the sales pipeline. GDI’s balance sheet remains strong with a covenant leverage ratio below 2,5X, and in July, we began to execute on the Normal Course Issuer Bid program that was implemented in Q2 as GDI’s share price fell to levels that our management team felt were attractive from an internal rate of return perspective. I would like to conclude by thanking all of our GDI team members across Canada and the USA, it is your hard work and dedication to our clients that makes GDI who we are today”, stated Mr. Bigras.

Board of Directors

On August 5, 2022, Robert J. McGuire was appointed to our Board of Directors.

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).

 



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June 30, 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 June 30,

2022

As at December 31,

2021

Assets






Current assets



Cash

4

24

Trade and other receivables and contract assets

466

431

Current tax assets

7

4

Inventories

40

34

Other financial assets

10

12

Prepaid expenses and other

12

9

Derivatives

2

Total current assets

541

514




Non-current assets



Other long-term assets

9

8

Derivatives

1

Property, plant and equipment

119

117

Deferred tax assets

1

1

Intangible assets

145

143

Goodwill

329

302

Total non-current assets

604

571




Total assets

1,145

1,085




Liabilities and Shareholders’ Equity






Current liabilities



Bank indebtedness

4

3

Trade and other payables

245

250

Provisions

29

28

Contract liabilities

27

43

Current tax liabilities

2

5

Current portion of long-term debt

40

28

Total current liabilities

347

357




Non-current liabilities



Long-term debt

343

299

Long-term payables

3

7

Deferred tax liabilities

36

31

Total non-current liabilities

382

337




Shareholders’ equity



Share capital

375

371

Retained earnings

30

13

Contributed surplus

6

6

Accumulated other comprehensive income

5

1

Total shareholders’ equity

416

391




Total liabilities and shareholders’ equity

1,145

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 June 30,

Six-month periods

ended June 30,


2022

2021

2022

2021








Revenues

526

372

1,021

756








Cost of services

415

289

809

585


Selling and administrative expenses

75

52

142

108


Transaction, reorganization and other costs

1

1

1


Canadian Emergency Wage Subsidy and related expenses

(5)

(13)


Amortization of intangible assets

6

5

12

10


Depreciation of property, plant and equipment

12

7

22

14


Operating income

17

24

35

51








Net finance expense

2

3

10

12


Income before income taxes

15

21

25

39








Income tax expense

5

7

8

12


Net income

10

14

17

27








Other comprehensive income (loss)






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






Foreign currency translation differences for foreign
     operations

8

(2)

4

(4)


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

(7)

1

(3)

2


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

1

3

1



2

(1)

4

(1)








Total comprehensive income

12

13

21

26














Earnings per share:






Basic

0.40

0.61

0.71

1.18


Diluted

0.40

0.59

0.69

1.15










 

GDI INTEGRATED FACILITY SERVICES INC.


Condensed Consolidated Interim Statements of Changes in Equity


Six-month periods ended June 30, 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

27

27

Other comprehensive loss

(1)

(1)

Total comprehensive income for the period

27

(1)

26

Transactions with owners of the Company:






Stock options exercised

185

4

(1)

3

Share-based compensation

1

1

Balance, June 30, 2021

22,965

368

(4)

6

(1)

369








Balance, January 1, 2022

23,121

371

13

6

1

391

Net income

17

17

Other comprehensive loss

4

4

Total comprehensive income for the period

17

4

21

Transactions with owners of the Company:






Stock options exercised

148

4

(1)

3

Share-based compensation

1

1

Balance, June 30, 2022

23,269

375

30

6

5

416

 

GDI INTEGRATED FACILITY SERVICES INC.


Condensed Consolidated Interim Statements of Cash Flows


(Unaudited) (In millions of Canadian dollars)




Six-month periods ended June 30,


2022

2021




Cash flows from (used in) operating activities



     Net income

17

27

     Adjustments for:



     Depreciation and amortization

34

24

     Equity portion of share-based compensation

1

1

     Net finance expense

10

12

     Income tax expense

8

12

     Income taxes paid

(13)

(25)

     Net changes in non-cash operating assets and liabilities          

(57)

14

     Net cash from operating activities

65




Cash flows from (used in) financing activities



     Proceeds from issuance of long-term debt                                                              

125

78

     Repayment of long-term debt

(87)

(72)

     Payment of lease liabilities

(13)

(9)

     Interest paid

(4)

(2)

     Proceeds from issuance of subordinate voting shares

3

3

     Net cash from (used in) financing activities

24

(2)




Cash flows from (used in) investing activities



     Business acquisitions, net of cash acquired

(33)

(34)

     Additions to property, plant and equipment

(9)

(7)

     Additions to intangible assets

(4)

(1)

     Proceeds on disposal of property, plant and equipment

1

     Net cash used in investing activities

(45)

(42)




Net change in cash

(21)

21




Cash (bank indebtedness), beginning of period:



Cash

24

3

Bank indebtedness

(3)

(4)


21

(1)




Cash, end of period:



Cash

4

22

Bank indebtedness

(4)

(2)


20

 

GDI INTEGRATED FACILITY SERVICES INC.


Segmented information


Three-month and six-month periods ended June 30, 2022 and 2021


(Unaudited) (In millions of Canadian dollars)








Three-month period ended June 30, 2022


Janitorial
Canada

Janitorial
USA

Technical
services

Complementary
services

Corporate and
eliminations

      Total








Recurring/contractual services

118

152

18

3

291

On-call services

17

12

57

1

87

Project

123

123

Manufacturing and distribution

17

17

Other revenues

7

1

8








Total external revenues

142

164

198

22

526

Inter-segment revenues

3

1

3

(7)

Revenues

145

164

199

25

(7)

526








Income (loss) before income taxes

15

7

(1)

(6)

15

Net finance expense

3

1

(2)

2

Operating income (loss)

15

10

(8)

17

Depreciation and amortization

4

3

8

1

2

18

Transaction, reorganization and other
     costs

1

1

Share-based compensation (1)

1

1

Adjusted EBITDA

19

13

8

1

(4)

37








Total assets

262

318

444

70

51

1,145

Total liabilities

73

86

213

13

344

729

Additions to property, plant and
     equipment

1

1

4

1

3

10

Additions to intangible assets

(3)

2

(1)

Goodwill recorded on business
     acquisition

3

3

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

 





Three-month period ended June 30, 2021


Janitorial
Canada

Janitorial
USA

Technical
services

Complementary
services

Corporate and
eliminations

      Total








Recurring/contractual services

95

67

20

182

On-call services

22

8

46

76

Project

93

93

Manufacturing and distribution

11

11

Other revenues

9

1

10








Total external revenues

126

75

160

11

372

Inter-segment revenues

4

(4)

Revenues

126

75

160

15

(4)

372








Income (loss) before income taxes

15

5

3

(2)

21

Net finance expense

1

2

3

Operating income

15

6

3

24

Depreciation and amortization

3

1

7

1

12

Canadian Emergency Wage Subsidy
     and related expenses

(5)

(5)

Transaction, reorganization and other
     costs

Share-based compensation (1)

2

2

Adjusted EBITDA

18

7

10

1

(3)

33








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

2

4

1

7

Additions to intangible assets

1

1

(1)       

Includes stock option, performance share unit and restricted share unit plans.

(2)       

As at December 31, 2021.

 

GDI INTEGRATED FACILITY SERVICES INC.


Segmented information


Three-month and six-month periods ended June 30, 2022 and 2021


(Unaudited) (In millions of Canadian dollars)








Six-month period ended June 30, 2022


Janitorial
Canada

Janitorial
USA

Technical
services

Complementary
services

Corporate and
eliminations

      Total








Recurring/contractual services

232

300

42

7

581

On-call services

36

27

108

2

173

Project

220

220

Manufacturing and distribution

32

32

Other revenues

14

1

15








Total external revenues

282

327

370

42

1,021

Inter-segment revenues

5

1

8

(14)

Revenues

287

327

371

50

(14)

1,021








Income (loss) before income taxes

32

13

(3)

(1)

(16)

25

Net finance expense

5

2

3

10

Operating income (loss)

32

18

(1)

(1)

(13)

35

Depreciation and amortization

7

7

15

2

3

34

Transaction, reorganization and other
     costs

1

1

Share-based compensation (1)

3

3

Adjusted EBITDA

39

25

14

1

(6)

73








Total assets

262

318

444

70

51

1,145

Total liabilities

73

86

213

13

344

729

Additions to property, plant and

     equipment

3

3

13

1

4

24

Additions to intangible assets

10

4

14

Goodwill recorded on business

     acquisition

24

24

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



Six-month period ended June 30, 2021

 


Janitorial
Canada

Janitorial
USA

Technical
services

Complementary
services

Corporate and

eliminations

      Total








Recurring/contractual services

193

137

39

369

On-call services

44

18

97

159

Project

179

179

Manufacturing and distribution

25

25

Other revenues

23

1

24








Total external revenues

260

155

316

25

756

Inter-segment revenues

7

(7)

Revenues

260

155

316

32

(7)

756








Income (loss) before income taxes

34

10

3

(8)

39

Net finance expense

2

1

9

12

Operating income

34

12

4

1

51

Depreciation and amortization

6

3

12

2

1

24

Canadian Emergency Wage Subsidy
     and related expenses

(13)

(13)

Transaction, reorganization and other
     costs

1

1

Share-based compensation (1)

4

4

Adjusted EBITDA

40

15

16

2

(6)

67








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

2

1

12

3

18

Additions to intangible assets

18

1

19

Goodwill recorded on business

     acquisition

20

20

(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


Six-month periods ended June 30, 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-month periods ended





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

(1)

June

2022

March

2022

December

2021

September

2021

Revenue

526

495

433

408

Operating income

17

18

15

18

Depreciation and amortization

18

16

15

13

Canadian Emergency Wage Subsidy and related
     expenses

(1)

Transaction, reorganization and other costs

1

2

1

Share-based compensation

1

2

2

2

Adjusted EBITDA

37

36

34

33

Net income for the period

10

7

7

9

Earnings per share





   Basic

0.40

0.30

0.30

0.41

   Diluted

0.40

0.30

0.29

0.40

Three-month periods ended





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

(1)

June

2021

March

2021

December

2020

September

2020

Revenue

372

384

365

365

Operating income

24

27

28

25

Depreciation and amortization

12

12

10

10

Canadian Emergency Wage Subsidy and related
     expenses

(5)

(7)

(9)

(6)

Transaction, reorganization and other costs

1

2

Share-based compensation

2

1

1

1

Adjusted EBITDA

33

34

32

30

Net income for the period

14

13

17

13

Earnings per share





   Basic

0.61

0.57

0.75

0.59

   Diluted

0.59

0.56

0.73

0.57
















(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 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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