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

• Q3 2022 revenue of $563 million – an increase of $155 million, or 38%, over Q3 2021.
• Q3 2022 Adjusted EBITDA¹ of $40 million – an increase of $7 million, or 21%, over Q3 2021.
• Q3 2022 net income of $11 million or $0.45 per share compared with $9 million or $0.41 per share in the third quarter of 2021.

LASALLE, QC, Nov. 9, 2022 /CNW/ - GDI Integrated Facility Services Inc. ("GDI" or the "Company") (TSX: GDI) is pleased to announce its financial results for its third quarter ended September 30, 2022.

For the three-month period ended September 30, 2022:

• Revenue was $563 million, an increase of $155 million, or 38%, over the third quarter of 2021, which is mainly the result of growth from acquisitions of 30% and organic growth of 7%.
• Adjusted EBITDA¹ amounted to $40 million, an increase of $7 million, or 21%, over the third quarter of 2021.
• Net income was $11 million or $0.45 per share compared to $9 million or $0.41 per share in Q3 2021.

For the third 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	132	174	86	230	179	24	15	563	408
Organic Growth (Decline)	7 %	(3 %)	(2 %)	8 %	12 %	11 %	33 %	(36 %)	7 %	3 %
Adjusted EBITDA1	17	18	12	8	15	11	1	(1)	40	33
Adjusted EBITDA Margin1	12 %	14 %	7 %	9 %	7 %	6 %	4 %	(7 %)	7 %	8 %

For the nine-month period ended September 30, 2022:

• Revenue reached $1.584 billion, an increase of $420 million, or 36%, over the corresponding period of 2021, which is mainly the result of growth from acquisitions of 28% and organic growth of 7%.
• Adjusted EBITDA¹ amounted to $112 million, an increase of $13 million, or 13%, over the corresponding period of 2021.
• Net income was $27 million or $1.16 per share compared to $36 million or $1.59 per share in the corresponding period of 2021.

For the first three 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	428	392	502	241	602	495	74	47	1,584	1,164
Organic Growth (Decline)	9 %	0 %	7 %	5 %	6 %	10 %	25 %	(28 %)	7 %	3 %
Adjusted EBITDA1	55	59	37	23	30	27	2	−	112	99
Adjusted EBITDA Margin1	13 %	15 %	7 %	10 %	5 %	5 %	3 %	0 %	7 %	9 %

GDI's Janitorial Canada segment had a strong quarter, recording $142 million in revenue representing an organic growth of 7%, while delivering $17 million in Adjusted EBITDA¹, a decrease of $1 million compared to Q3 2021. GDI's Janitorial USA segment also performed well in Q3 2022, recording revenue of $174 million representing organic decline of 2%, which was principally caused by an expected year-over-year reduction in COVID-related services at IH Services, Inc. ("IH Services") which was acquired on December 31, 2021. The Janitorial USA segment recorded Adjusted EBITDA¹ of $12 million in Q3 2021, representing an increase of 50% over Q3 2021, the growth being primarily attributable to the acquisition of IH Services. In line with expectations, Adjusted EBITDA margins1 in both Janitorial segments declined as a lower amount of COVID-19 related services were provided in the quarter compared to the prior year and contractual recurring revenues increased.

The Technical Services segment recorded revenue of $230 million or growth of 28% over Q3 2021, of which 15% was generated from acquisitions and 12% was organic growth. The segment recorded Adjusted EBITDA¹ of $15 million compared to $11 million in Q3 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 revenues of $24 million and Adjusted EBITDA¹ of $1 million compared to revenue of $15 million and Adjusted EBITDA¹ of ($1) million in Q3 2021.  This segment also recorded organic growth of 33% in Q3 2022, the majority of which was due GDI's integrated facility services business unit ("GDI IFS") which was launched at the beginning of 2022.

"GDI delivered another solid quarter of consecutive growth in both revenue and Adjusted EBITDA¹," stated Claude Bigras, President & CEO of GDI. "Both of our Janitorial segments performed well. As expected, we have been seeing a pullback in COVID related services as the threat of the virus dissipates, but we are continuing to deliver strong results as we support our clients as buildings reoccupy and tenants in the commercial office sector roll out bespoke back to work plans for their staff. The IH Services acquisition is continuing to exceed our expectations. Our teams are working well together and are at an advanced stage of sharing client relationships and best practices. During Q3 we welcomed Cascadian Building Maintenance Ltd. to the GDI family, more than doubling our presence in the Greater Seattle area and moving to what we believe is the number two player by size in that market. Our Technical Services segment delivered a record quarter with Adjusted EBITDA¹ of $15 million and an Adjusted EBITDAmargin¹ of 7%. The supply chain challenges it faced earlier in the year are now resolved and the business is operating on all cylinders, and we continue to carry a record backlog. Our Complementary Services segment had a respectable quarter. The outlook for our products manufacturing and distribution business is positive as occupancy rates rise and our new GDI integrated facility services business is executing well on its two inaugural contracts and is actively pursuing more. Finally, the human resource information system ("HRIS") project that we announced earlier this year is proceeding as planned with an expected launch on January 1, 2023, in our US business units, with the Canadian business units to follow in the first half of 2023. The new HRIS will enable all of our business segments to more effectively manage our labour force. During Q3 we recorded one-time costs of approximately $2 million in relation to the HRIS project implementation, in line with our estimate."

"Year-to-date, GDI generated over $1.5 billion in revenue and $112 million in Adjusted EBITDA¹. All our business segments are performing well and the outlook for each is positive. Our balance sheet is strong, our leverage ratio for bank covenant purposes is well within our comfort zone at less than 2,5x, and our ability to deliver on our strategic growth objectives remains intact. I would like to thank all of the team members who make up the GDI family for their hard work and dedication and look forward to a strong finish to 2022." 

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, 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:	November 10, 2022 at 9:00 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: 1-800-239-9838
	Local: 647-484-0478 (Toronto) or 438-320-0340 (Montreal)
	Confirmation Code: 3708260
	A rebroadcast of the conference call will be available until November 17, 2022 by dialing:
	North America Toll-Free: 1-888-203-1112
	Local: 647-436-0148 (Toronto)
	Confirmation Code: 3708260

September 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 September 30, 2022	As at December 31, 2021
Assets
Current assets
Cash	15	24
Trade and other receivables and contract assets	521	431
Current tax assets	6	4
Inventories	45	34
Other financial assets	10	12
Prepaid expenses and other	10	9
Derivatives	3	‒
Total current assets	610	514
Non-current assets
Other long-term assets	9	8
Derivatives	1	‒
Property, plant and equipment	123	117
Deferred tax assets	1	1
Intangible assets	148	143
Goodwill	341	302
Total non-current assets	623	571
Total assets	1,233	1,085
Liabilities and Shareholders' Equity
Current liabilities
Bank indebtedness	‒	3
Trade and other payables	277	250
Provisions	28	28
Contract liabilities	27	43
Current tax liabilities	4	5
Current portion of long-term debt	40	28
Total current liabilities	376	357
Non-current liabilities
Long-term debt	388	299
Long-term payables	4	7
Deferred tax liabilities	36	31
Total non-current liabilities	428	337
Shareholders' equity
Share capital	375	371
Retained earnings	40	13
Contributed surplus	6	6
Accumulated other comprehensive income	8	1
Total shareholders' equity	429	391
Total liabilities and shareholders' equity	1,233	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 September 30,				Nine-month periods ended September 30,
	2022		2021		2022	2021
Revenues	563		408		1,584	1,164
Cost of services	453		326		1,263	911
Selling and administrative expenses	72		51		214	159
Transaction, reorganization and other costs	1		1		2	1
Canadian Emergency Wage Subsidy and related expenses	−		(1)		−	(13)
Amortization of intangible assets	6		5		19	15
Depreciation of property, plant and equipment	12		8		33	22
Operating income	19		18		53	69
Net finance expense	3		5		13	17
Income before income taxes	16		13		40	52
Income tax expense	5		4		13	16
Net income	11		9		27	36
Other comprehensive income
Gains (losses) that are or may be reclassified to earnings:
Foreign currency translation differences for foreign operations	18		4		23	−
Hedge of net investments in foreign operations, net of tax of nil	(15)		(2)		(19)	−
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
	4		2		7	1
Total comprehensive income	15		11		34	37
Earnings per share:
Basic	0.45		0.41		1.16	1.59
Diluted	0.44		0.40		1.13	1.54

 

GDI INTEGRATED FACILITY SERVICES INC.
Condensed Consolidated Interim Statements of Changes in Equity
Nine-month periods ended September 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	–	–	36	–	–	36
Other comprehensive income	–	–	–	–	1	1
Total comprehensive income for the period	–	–	36	–	1	37
Transactions with owners of the Company:
Share-based compensation	–	–	–	1	–	1
Stock options exercised	325	7	–	(1)	–	6
Balance, September 30, 2021	23,105	371	5	6	1	383
Balance, January 1, 2022	23,121	371	13	6	1	391
Net income	–	–	27	–	–	27
Other comprehensive income	–	–	–	–	7	7
Total comprehensive income for the period	–	–	27	–	7	34
Transactions with owners of the Company:
Share-based compensation	–	–	–	1	–	1
Stock options exercised	185	5	–	(1)	–	4
Shares repurchased for cancellation	(12)	(1)	–	–	–	(1)
Balance, September 30, 2022	23,294	375	40	6	8	429

 

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

Nine-month periods ended September 30,
	2022	2021
Cash flows from (used in) operating activities
Net income	27	36
Adjustments for:
Depreciation and amortization	52	37
Equity portion of share-based compensation	1	1
Net finance expense (note 8)	13	17
Income tax expense	13	16
Income taxes paid	(16)	(30)
Net changes in non-cash operating assets and liabilities	(75)	5
Net cash from operating activities	15	82
Cash flows from (used in) financing activities
Proceeds from issuance of long-term debt	169	117
Repayment of long-term debt	(108)	(112)
Payment of lease liabilities	(20)	(13)
Interest paid	(7)	(3)
Other	2	6
Net cash from (used in) financing activities	36	(5)
Cash flows from (used in) investing activities
Business acquisitions, net of cash acquired	(37)	(63)
Additions to property, plant and equipment	(15)	(10)
Additions to intangible assets	(5)	(2)
Other	–	1
Net cash used in investing activities	(57)	(74)
Net change in cash	(6)	3
Cash (bank indebtedness), beginning of period:
Cash	24	3
Bank indebtedness	(3)	(5)
	21	(2)
Cash (bank indebtedness), end of period:
Cash	15	10
Bank indebtedness	–	(9)
	15	1

 

GDI INTEGRATED FACILITY SERVICES INC.
Segmented information
Three-month and nine-month periods ended September 30, 2022 and 2021
(Unaudited) (In millions of Canadian dollars)

				Three-month period ended September 30, 2022
	Janitorial Canada	Janitorial USA	Technical services	Complementary services	Corporate and eliminations	Total
Recurring/contractual services	118	160	24	3	–	305
On-call services	14	14	64	–	–	92
Project	–	–	137	–	–	137
Manufacturing and distribution	–	–	–	17	–	17
Other revenues	7	–	5	–	–	12
Total external revenues	139	174	230	20	–	563
Inter-segment revenues	3	–	–	4	(7)	–
Revenues	142	174	230	24	(7)	563
Income (loss) before income taxes	13	7	7	–	(11)	16
Net finance expense	–	1	–	–	2	3
Operating income (loss)	13	8	7	–	(9)	19
Depreciation and amortization	4	4	8	1	1	18
Transaction, reorganization and other costs	–	–	–	–	1	1
Share-based compensation (1)	–	–	–	–	2	2
Adjusted EBITDA	17	12	15	1	(5)	40
Total assets	475	334	360	17	47	1,233
Total liabilities	78	102	227	16	381	804
Additions to property, plant and equipment	4	5	12	2	1	24
Additions to intangible assets	–	4	–	–	1	5
Goodwill recorded on business acquisition	–	4	(1)	–	–	3

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

 

				Three-month period ended September 30, 2021
	Janitorial Canada	Janitorial USA	Technical services	Complementary services	Corporate and eliminations	Total
Recurring/contractual services	104	77	21	–	–	202
On-call services	20	9	46	–	–	75
Project	–	–	112	–	–	112
Manufacturing and distribution	–	–	–	11	–	11
Other revenues	8	–	–	–	–	8
Total external revenues	132	86	179	11	–	408
Inter-segment revenues	–		–	4	(4)	–
Revenues	132	86	179	15	(4)	408
Income (loss) before income taxes	15	5	4	(2)	(9)	13
Net finance expense	–	1	1	–	3	5
Operating income (loss)	15	6	5	(2)	(6)	18
Depreciation and amortization	3	2	6	1	1	13
Canadian Emergency Wage Subsidy and related expenses	–	–	–	–	(1)	(1)
Transaction, reorganization and other costs	–	–	–	–	1	1
Share-based compensation (1)	–	–	–	–	2	2
Adjusted EBITDA	18	8	11	(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	1	7	11	1	22
Additions to intangible assets	–	–	5	1	1	7
Goodwill recorded on business acquisition	–	–	11	1	–	12

(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 nine-month periods ended September 30, 2022 and 2021
(Unaudited) (In millions of Canadian dollars)

				Nine-month period ended September 30, 2022
	Janitorial Canada	Janitorial USA	Technical services	Complementary services	Corporate and eliminations	Total
Recurring/contractual services	350	460	66	10	–	886
On-call services	49	41	173	2	–	265
Project	–	–	357	–	–	357
Manufacturing and distribution	–	–	–	48	–	48
Other revenues	21	1	5	1	–	28
Total external revenues	420	502	601	61	–	1,584
Inter-segment revenues	8	–	1	13	(22)	–
Revenues	428	502	602	74	(22)	1,584
Income (loss) before income taxes	45	19	4	(2)	(26)	40
Net finance expense	–	6	2	–	5	13
Operating income (loss)	45	25	6	(2)	(21)	53
Depreciation and amortization	10	12	23	4	3	52
Transaction, reorganization and other costs	–	–	1	–	1	2
Share-based compensation (1)	–	–	–	–	5	5
Adjusted EBITDA	55	37	30	2	(12)	112
Total assets	475	334	360	17	47	1,233
Total liabilities	78	102	227	16	381	804
Additions to property, plant and equipment	6	7	17	2	5	37
Additions to intangible assets	–	4	10	–	5	19
Goodwill recorded on business acquisition	–	4	23	–	–	27

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

 

				Nine-month period ended September 30, 2021
	Janitorial Canada	Janitorial USA	Technical services	Complementary services	Corporate and eliminations	Total
Recurring/contractual services	298	214	60	–	–	572
On-call services	64	27	143	–	–	234
Project	–	–	291	–	–	291
Manufacturing and distribution	–	–	–	36	–	36
Other revenues	30	–	1	–	–	31
Total external revenues	392	241	495	36	–	1,164
Inter-segment revenues	–	–	–	11	(11)	–
Revenues	392	241	495	47	(11)	1,164
Income (loss) before income taxes	49	15	7	(2)	(17)	52
Net finance expense	–	3	2	–	12	17
Operating income	49	18	9	(2)	(5)	69
Depreciation and amortization	10	5	18	2	2	37
Canadian Emergency Wage Subsidy and related expenses	–	–	–	–	(13)	(13)
Transaction, reorganization and other costs	–	–	–	–	1	1
Share-based compensation (1)	–	–	–	–	5	5
Adjusted EBITDA	59	23	27	–	(10)	99
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	4	2	19	12	4	41
Additions to intangible assets	–	–	23	2	2	27
Goodwill recorded on business acquisition	–	–	31	1	–	32

(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
Nine-month periods ended September 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
September 1, 2022	Cascadian Building Maintenance, Ltd. ("Cascadian")	Bellevue, Washington	Janitorial USA	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 (4)	Technical Services	Completed
September 15, 2021	Fuller Industries, LLC ("Fuller")	Great Bend, Kansas	Complementary Services	Completed
December 31, 2021	IH Services, Inc. and its subsidiaries ("IH")	Greenville, South Carolina (5)	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)	September 2022		June 2022		March 2022		December 2021
Revenue	563		526		495		433
Operating income	19		17		18		15
Depreciation and amortization	18		18		16		15
Canadian Emergency Wage Subsidy and related expenses	‒		‒		‒		‒
Transaction, reorganization and other costs	1		1		‒		2
Share-based compensation	2		1		2		2
Adjusted EBITDA	40		37		36		34
Net income for the period	11		10		7		7
Earnings per share
Basic	0.45		0.40		0.30		0.30
Diluted	0.44		0.40		0.30		0.29
Three-month periods ended (in millions of Canadian dollars, except per share data)(1)	September 2021		June 2021		Mars 2021		December 2020
Revenue	408		372		384		365
Operating income	18		24		27		28
Depreciation and amortization	13		12		12		10
Canadian Emergency Wage Subsidy and related expenses	(1)		(5)		(7)		(9)
Transaction, reorganization and other costs	1		‒		1		2
Share-based compensation	2		2		1		1
Adjusted EBITDA	33		33		34		32
Net income for the period	9		14		13		17
Earnings per share
Basic	0.41		0.61		0.57		0.75
Diluted	0.40		0.59		0.56		0.73

(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 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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