Le Lézard
Classified in: Business, Covid-19 virus
Subject: ERN

GDI Integrated Facility Services Inc. Releases its Financial Results for the Fourth Quarter and the Year Ended December 31, 2023


LASALLE, QC, Feb. 28, 2024 /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, 2023.

For the fourth quarter of 2023:

___________________________

* 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, transaction, reorganization and other costs, share-based compensation and strategic information technology projects configuration and customization costs. 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).

For the fourth quarters of 2023 and 2022, the business segments performed as follows:

(in millions of

Canadian dollars)

Business Services
Canada (1)

Business Services
USA (1)

Technical Services

Corporate and
Other (2)

Consolidated

2023

2022

2023

2022

2023

2022

2023

2022

2023

2022

Revenue

146

144

215

176

239

250

22

18

622

588

Organic Growth (Decline)

1 %

3 %

10 %

(2 %)

(5 %)

20 %

22 %

39 %

2 %

10 %

Adjusted EBITDA* (3)

13

16

16

14

14

17

(6)

(5)

37

42

Adjusted EBITDA Margin*

9 %

11 %

7 %

8 %

6 %

7 %

N/A

N/A

6 %

7 %

(1)

"Business Services Canada" formerly "Janitorial Canada" and "Business Services USA" formerly "Janitorial USA".

(2)

Comparative results have been recast to reflect a change in our reporting segments, as former Complementary Services and Corporate and eliminations segments are now grouped under Corporate and Other. 

(3)

Adjusted EBITDA definition exclude the strategic information technology projects configuration and customization costs. 2022 results were recast to align with the revised definition. 

For the year ended December 31, 2023:

For the years ended December 31, 2023 and 2022, the business segments performed as follows:

(in millions of

Canadian dollars)

Business Services
Canada (1)

Business Services
USA (1)

Technical Services

Corporate and
Other (2)

Consolidated

2023

2022

2023

2022

2023

2022

2023

2022

2023

2022

Revenue

578

572

756

678

1,024

851

79

71

2,437

2,172

Organic Growth (Decline)

1 %

7 %

2 %

8 %

18 %

10 %

10 %

29 %

8 %

9 %

Adjusted EBITDA* (3)

54

71

55

51

53

47

(19)

(13)

143

156

Adjusted EBITDA Margin*

9 %

12 %

7 %

8 %

5 %

6 %

N/A

N/A

6 %

7 %

(1)

"Business Services Canada" formerly "Janitorial Canada" and "Business Services USA" formerly "Janitorial USA".

(2)

Comparative results have been recast to reflect a change in our reporting segments, as former Complementary Services and Corporate and eliminations segments are now grouped under Corporate and Other. 

(3)

Adjusted EBITDA definition now exclude the strategic information technology projects configuration and customization costs. 2022 results were recast to align with the revised definition.

GDI's Business Services Canada segment delivered another solid fourth quarter, recording $146 million in revenue while generating $13 million in Adjusted EBITDA*, representing an Adjusted EBITDA margin* of 9%. GDI's Business Services USA segment also performed well in Q4 2023, recording revenue of $215 million and Adjusted EBITDA* of $16 million, representing an Adjusted EBITDA margin* of 7%. Business Services Canada experienced slightly positive organic revenue growth that is attributable to some customers now operating at pre-COVID-19 levels.  Business Services USA recorded 10% organic revenue growth which is due to increases in revenue with new customers, and 12% revenue growth that was generated from acquisitions.

The Technical Services segment recorded revenue of $239 million and Adjusted EBITDA* of $14 million, representing an Adjusted EBITDA margin* of 6%. The segment experienced an organic revenue decline of 5% which is attributed to lower project revenues.

Finally, GDI's Corporate and Other segment recorded revenue of $22 million compared to revenue of $18 million in Q4 2022 with the difference mainly attributable to organic growth generated by GDI's integrated facility services business ("GDI IFS") launched at the beginning of 2022.

"I am satisfied with GDI's overall performance in Q4 and fiscal 2023," stated Claude Bigras, President & CEO of GDI. "For the full year revenue increased to more than $2.4 billion or 12% over 2022, including organic growth of 8%. Adjusted EBITDA grew in both our Business Services USA and Technical Services segments, and while an expected decline in COVID-related incremental services caused Business Services Canada's Adjusted EBITDA to decrease year-over-year, the business still generated an Adjusted EBITDA margin of 9% for both the full year and in Q4 2023. Our Business Services USA segment also generated strong results in the fourth quarter with organic growth of 10% and a 14% increase in Adjusted EBITDA. Ainsworth, our Technical Services segment, had a challenging Q4 as it experienced cost overruns on a few large projects in their U.S operations that caused Adjusted EBITDA to fall short of expectations. Ainsworth has been moving away from large projects in certain markets while focusing on increasing the margin profile of project work, and while Q4 was below expectations the segment still delivered Adjusted EBITDA margin of 6% during the quarter."

"I am happy to report that the working capital management strategies that we began to implement at Ainsworth in Q2 last year are beginning to bear fruit with a $36 million decrease in net working capital between September 30 and December 31, 2023. We expect to continue to see a decline in working capital usage in the upcoming quarters which should result in incrementally positive effects on free cash flows. During Q4, GDI announced the acquisition of the U.S. business services of Atalian operating across 25 States, adding more than 2,500 team members and considerably strengthening GDI's Business Services platform in the Northeast. Additionally, subsequent to Q4 GDI announced the sale of its Superior Sany Solutions janitorial products distribution business, which is expected to close at the end of Q1 2024. This will enable GDI to allocate more capital to support the growth of its core facility services businesses. GDI is retaining ownership of Superior's chemical manufacturing business which has attractive growth and margin profiles and has recently seen good success in winning new clients for its white label product offering."

"I feel that GDI is starting fiscal 2024 in a strong competitive and financial position. We are the largest facility services provider in Canada and among the largest in North America, our reputation is excellent, our culture is entrepreneurial and dynamic and we have a flexible cost structure that enables our business to be resilient. The working capital initiatives we implemented mid-last year are improving our free cash flow generation, our leverage ratios are within our comfort zone, our balance sheet has sufficient capacity to support our growth through acquisition strategy and our pipeline is healthy. I look forward to seeing GDI's business continue to develop during 2024," concluded Mr. Bigras.  

_______________________

* 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, transaction, reorganization and other costs, share-based compensation and strategic information technology projects configuration and customization costs. 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).

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) 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, changes to business structure, inherent operating risks from acquisition activity, failure to integrate an acquired company, 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, exchange rate fluctuations, deterioration in 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, disputes with franchisees, environmental, social and governance ("ESG") considerations, goodwill and long-lived assets impairment charges, tax matters, key employees, participation in multi-employer pension plans, legislation or other governmental action, cybersecurity, data confidentiality and data protection, 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. 

Analyst Conference Call:

February 29, 2024 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: 1-888-664-6392

Local: 416-764-8659 (Toronto) or 514-225-6995 (Montreal)

Confirmation Code:  72270118

A rebroadcast of the conference call will be available until March 7, 2024 by dialing:

North America Toll-Free: 1-888-390-0541

Local: 416-764-8677 (Toronto)

Confirmation Code 271982 #

December 31, 2023 consolidated financial statements and accompanied Management & Discussion Analysis are filed on www.sedarplus.ca.

GDI INTEGRATED FACILITY SERVICES INC.
Consolidated Statements of Financial Position
December 31, 2023 and 2022
(In millions of Canadian dollars)





2023

2022

Assets






Current assets



Cash

17

7

Trade and other receivables and contract assets

571

524

Current tax assets

11

7

Inventories

42

45

Other financial assets

13

11

Prepaid expenses and other

11

9

Derivatives

1

3

Total current assets

666

606




Non-current assets



Property, plant and equipment

127

122

Intangible assets

131

139

Goodwill

356

344

Derivatives

?

1

Other assets

12

8

Total non-current assets

626

614




Total assets

1,292

1,220




Liabilities and Shareholders' Equity






Current liabilities



Bank indebtedness

14

10

Trade and other payables

298

286

Provisions

32

26

Contract liabilities

34

30

Current tax liabilities

2

2

Current portion of long-term debt

36

43

Total current liabilities

416

397




Non-current liabilities



Long-term debt

384

345

Long-term payables

5

5

Deferred tax liabilities

32

34

Total non-current liabilities

421

384




Shareholders' equity



Share capital

380

379

Retained earnings

68

49

Contributed surplus

2

4

Accumulated other comprehensive income

5

7

Total shareholders' equity

455

439




Total liabilities and shareholders' equity

1,292

1,220

GDI INTEGRATED FACILITY SERVICES INC.
Consolidated Statements of Comprehensive Income
Years ended December 31, 2023 and 2022
(In millions of Canadian dollars, except for earnings per share)





2023

2022




Revenues

2,437

2,172




Cost of services

1,987

1,733

Selling and administrative expenses

316

291

Transaction, reorganization and other costs

4

3

Strategic information technology projects configuration and customization costs

6

3

Amortization of intangible assets

24

28

Depreciation of property, plant and equipment

53

46

Operating income

47

68




Net finance expense

18

19

Income before income taxes

29

49




Income tax expense

10

13

Net income

19

36




Other comprehensive (loss) income



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



    Foreign currency translation differences for foreign operations

(7)

19

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

7

(16)

  Cash flow hedges, effective portion of changes in fair value, net of tax of $1
       (($1) in 2022)

(2)

3


(2)

6




Total comprehensive income

17

42




Earnings per share:



  Basic

0.80

1.57

  Diluted

0.79

1.53




GDI INTEGRATED FACILITY SERVICES INC.
Consolidated Statements of Changes in Equity
Years ended December 31, 2023 and 2022
(In millions of Canadian dollars)








Share Capital

Retained
earnings

Contributed
surplus

Accumulated
other
comprehensive
income

(loss)

Total


Number

(in thousands

of shares)

Amount

Balance, January 1, 2022

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








Net income

?

?

19

?

?

19

Other comprehensive loss

?

?

?

?

(2)

(2)

Total comprehensive income for the year

?

?

19

?

(2)

17

Transactions with owners of the Company:






Share-based compensation

?

?

?

1

?

1

Stock options exercised

98

2

?

?

?

2

 Shares repurchased for cancellation 

(98)

(1)

?

(3)

?

(4)

Balance, December 31, 2023

23,414

380

68

2

5

455

GDI INTEGRATED FACILITY SERVICES INC.
Consolidated Statements of Cash Flows
Years ended December 31, 2023 and 2022
(In millions of Canadian dollars)





2023

2022




Cash flows from (used in) operating activities



Net income

19

36

Adjustments for:



Depreciation and amortization

77

74

Equity portion of share-based compensation

1

1

Net finance expense

18

19

Income tax expense

10

13

Income taxes paid

(14)

(23)

Net changes in non-cash operating assets and liabilities   

(46)

(70)

Net cash from operating activities

65

50




Cash flows from (used in) financing activities



Proceeds from issuance of long-term debt

401

217

Repayment of long-term debt

(370)

(192)

Payment of lease liabilities

(31)

(29)

Interest paid

(23)

(11)

Other

(2)

5

Net cash used in financing activities

(25)

(10)




Cash flows from (used in) investing activities



Business acquisitions, net of cash and bank indebtedness acquired

(11)

(37)

Additions to property, plant and equipment

(21)

(19)

Additions to intangible assets

(6)

(7)

Other

1

?

Net cash used in investing activities

(37)

(63)




Foreign exchange gain (loss) on cash held in foreign currencies

3

(1)




Net change in cash (bank indebtedness)

6

(24)




(Bank indebtedness) cash, beginning of year:



Cash

7

24

Bank indebtedness

(10)

(3)


(3)

21




Cash (bank indebtedness), end of year:



Cash

17

7

Bank indebtedness

(14)

(10)


3

(3)




GDI INTEGRATED FACILITY SERVICES INC.
Segmented information
Years ended December 31, 2023 and 2022
(In millions of Canadian dollars)




2023


Business
Services
Canada

Business
Services

USA

Technical
Services

Corporate
and Other (1)

     Total







Recurring/contractual services

498

719

83

18

1,318

On-call services

45

37

291

5

378

Projects

?

?

650

?

650

Manufacturing and distribution

?

?

?

62

62

Other revenues

24

?

?

5

29







Total external revenues

567

756

1,024

90

2,437

Inter-segment revenues

11

?

?

(11)

?

Revenues

578

756

1,024

79

2,437







Income (loss) before income taxes

42

36

17

(66)

29

Net finance expense

?

1

(1)

18

18

Operating income (loss)

42

37

16

(48)

47

Depreciation and amortization

11

18

36

12

77

Transaction, reorganization, and

    other costs

1

?

1

2

4

Share-based compensation (2)

?

?

?

9

9

Strategic information technology projects
     configuration and customization costs

?

?

?

6

6

Adjusted EBITDA (3)

54

55

53

(19)

143







Total assets

267

359

544

122

1,292

Total liabilities

69

109

253

406

837

Additions to property, plant and equipment

8

13

32

8

61

Additions to intangible assets

?

10

2

6

18

Goodwill recorded on business
     acquisition

?

14

2

?

16

(1)

Comparative results have been recast to reflect a change in our reporting segments, as former Complementary Services and Corporate and eliminations segments are now grouped under Corporate and Other.

(2)

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

(3)

Adjusted EBITDA definition now excludes the strategic information technology projects configuration and customization costs.

GDI INTEGRATED FACILITY SERVICES INC.
Segmented information
Years ended December 31, 2023 and 2022
(In millions of Canadian dollars)




2022


Business
Services
Canada

Business
Services

USA

Technical
Services

Corporate
and Other (1)

     Total







Recurring/contractual services

473

624

90

15

1,202

On-call services

62

53

241

3

359

Projects

?

?

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

(11)

?

Revenues

572

678

851

71

2,172







Income (loss) before income taxes

59

29

8

(47)

49

Net finance expense

(1)

6

3

11

19

Operating income (loss)

58

35

11

(36)

68

Depreciation and amortization

13

16

35

10

74

Transaction, reorganization, and

    other costs

?

?

1

2

3

Share-based compensation (2)

?

?

?

8

8

Strategic information technology projects configuration and customization costs

?

?

?

3

3

Adjusted EBITDA (3)

71

51

47

(13)

156







Total asset

267

320

515

118

1,220

Total liabilities

81

68

232

400

781

Additions to property, plant

     and equipment

8

9

24

8

49

Additions to intangible assets

?

2

10

7

19

Goodwill recorded on business
     acquisition

?

6

27

?

33

(1)

Comparative results have been recast to reflect a change in our reporting segments, as former Complementary Services and Corporate and eliminations segments are now grouped under Corporate and Other. 

(2)

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

(3)

The above table was revised to reflect the fact that the Adjusted EBITDA definition now exclude the strategic information technology projects configuration and customization costs.

GDI INTEGRATED FACILITY SERVICES INC.
Business acquisitions
Years ended December 31, 2023 and 2022
(In millions of Canadian dollars)






Acquisition date

Company acquired

Location

Segment reporting

Purchase price
allocation
status

2023 Acquisitions





June 1, 2023

React Technical, Inc. ("React")

New York,

New York

Technical Services

Completed






November 1, 2023

La Financière Atalian
("Atalian"
)

Multi-sites in
USA

Business Services USA

Preliminary

2022 Acquisitions





January 21, 2022

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

Montréal,
Quebec

Technical Services

Completed






March 1, 2022

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

Markham, Ontario

Technical Services

Completed






September 1, 2022

Cascadian Building
Maintenance, Ltd.
("Cascadian"
)

Bellevue,
Washington

Business Services USA

Completed

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)

December

2023

September

2023

June

2023

March

2023

Revenue

622

615

609

591

Operating income

9

16

10

12

     Depreciation and amortization

22

19

19

17

     Transaction, reorganization and other costs

2

?

1

1

     Share-based compensation

2

2

3

2

 Strategic information technology projects
     configuration and customization costs

2

2

1

1

Adjusted EBITDA (2)

37

39

34

33

Net income for the period

6

8

1

4

Earnings per share





   Basic

0.26

0.35

0.04

0.15

   Diluted

0.25

0.35

0.04

0.15

Three months 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

Strategic information technology projects
     configuration and customization costs

1

1

1

?

Adjusted EBITDA (2)

42

41

38

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

(1)

The differences between the quarters are mainly the results of business acquisitions, as well as seasonality in the Technical Services segment.

(2)

Adjusted EBITDA definition now exclude the strategic information technology projects configuration and customization costs. This change has no impact on the three-month period ended March 31, 2022.

 

SOURCE GDI Integrated Facility Services Inc.


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