Q2 2024 revenue of $639 million, an increase of $30 million, or 5%, over Q2 2023. Q2 2024 Adjusted EBITDA* of $34 million, in line with Q2 2023.Q2 2024 net income of $2 million or $0.07 per share compared with $1 million or $0.04 per share for the second quarter of 2023.
LASALLE, QC, Aug. 7, 2024 /CNW/ – GDI Integrated Facility Services Inc. (“GDI” or the “Company”) (TSX: GDI) is pleased to announce its financial results for the second quarter ended June 30, 2024.
For the second quarter of 2024:
Revenue reached $639 million, an increase of $30 million, or 5%, over the second quarter of 2023, comprised of 6% growth from acquisitions and partially offset by 1% organic decline coming from the Technical Services segment.Adjusted EBITDA* amounted to $34 million, in line with the second quarter of 2023.Net income was $2 million or $0.07 per share compared to $1 million or $0.04 per share in Q2 2023.
For the second quarters of 2024 and 2023, the business segments performed as follows:
(in millions of
Canadian dollars)
Business Services
Canada
Business Services
USA
Technical Services
Corporate and
Other
Consolidated
2024
2023
2024
2023
2024
2023
2024
2023
2024
2023
Revenue
145
144
221
180
259
264
14
21
639
609
Organic Growth (Decline)
1 %
(1 %)
1 %
0 %
(5 %)
31 %
14 %
11 %
(1 %)
12 %
Adjusted EBITDA*
12
13
14
13
14
12
(6)
(4)
34
34
Adjusted EBITDA Margin*
8 %
9 %
6 %
7 %
5 %
5 %
N/A
N/A
5 %
6 %
For the six-month period ended June 30, 2024:
Revenue reached $1.3 billion, an increase of $83 million, or 7%, over the corresponding period of 2022, comprised of 1% organic growth and 6% growth from acquisitions.Adjusted EBITDA* amounted to $61 million, a decrease of $6 million, or 9%, over the corresponding period of 2023.Net income was $2 million or $0.09 per share compared to $5 million or $0.19 per share over the corresponding period of 2023. The decrease in net income in the first six months of 2024 compared to 2023 is mainly due to lower operating income of $14 million, which is primarily attributable to an increase in amortization and depreciation expense of $9 million resulting from a significant reduction in the amortized value of a large customer contract in the quarter, which was partially offset by lower net finance expense of $10 million and lower income tax expense of $1 million.
For the first two quarters of 2024 and 2023, the business segments performed as follows:
(in millions of
Canadian dollars)
Business Services
Canada
Business Services
USA
Technical Services
Corporate and
Other
Consolidated
2024
2023
2024
2023
2024
2023
2024
2023
2024
2023
Revenue
290
286
446
356
511
516
36
42
1,283
1,200
Organic Growth (Decline)
1 %
(1 %)
6 %
(1 %)
(3 %)
36 %
10 %
14 %
1 %
13 %
Adjusted EBITDA*
23
27
27
25
22
23
(11)
(8)
61
67
Adjusted EBITDA Margin*
8 %
9 %
6 %
7 %
4 %
4 %
N/A
N/A
5 %
6 %
GDI’s Business Services Canada segment recorded $145 million in revenue in the second quarter while generating $12 million in Adjusted EBITDA*, representing an Adjusted EBITDA margin* of 8%. GDI’s Business Services USA segment performed well in Q2 2024, recording revenue of $221 million and Adjusted EBITDA* of $14 million, representing an Adjusted EBITDA margin* of 6%.
The Technical Services segment recorded revenue of $259 million and Adjusted EBITDA* of $14 million, representing an Adjusted EBITDA margin* of 5%. 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 Corporate and Other recorded revenue of $14 million compared to revenue of $21 million in Q2 2023, the decrease being attributable to the sale of its Superior cleaning and sanitation products distribution business on April 1, 2024, which was partially offset by organic growth generated by GDI’s chemical manufacturing business.
“I am pleased with GDI’s overall performance in Q2 2024, we were able to overcome specific challenges that affected our business in recent quarters and delivered solid results,” stated Claude Bigras, President & CEO of GDI. “Our Business Services Canada segment performed well with a sequential increase in Adjusted EBITDA* and Adjusted EBITDA* margin over the first quarter of 2024. Occupancy levels in the Class A office market in Canada are remaining stable and we continue to expect Adjusted EBITDA* margin in the segment to remain higher than pre-COVID levels for the near-to-mid term. Adjusted EBITDA* and Adjusted EBITDA Margin* were slightly lower than Q2 2023 due to COVID-related gains realized in the prior year’s quarter. Our Business Services USA segment performed well during the quarter to mitigate the revenue and Adjusted EBITDA* impact of the previously announced supplier realignment of one of the segment’s largest clients which became effective just prior to the start of Q2. In fact, the business delivered both positive organic revenue growth and an increase in Adjusted EBITDA* compared to Q2 2023 despite the revenue loss experienced during the quarter, which serves to demonstrate the resiliency of the business and the strength of our team. The integration of the Atalian acquisition has been progressing as planned and our margin improvement initiatives are progressively being realized. The previously announced Paramount Building Solutions acquisition, that closed on May 1, 2024, has been substantially integrated and has been performing in-line with expectations. Our Technical Services segment had a very good quarter with Adjusted EBITDA* growth of 75% over Q1 2024 and 17% over Q2 2023. The three projects in our U.S. business that negatively impacted the segment’s results in the past two quarters were successfully closed out in Q1, and enhanced procedures were put in place to augment project management in the region. The business delivered Adjusted EBITDA* margin of 5% which was in-line with historic levels in the segment’s seasonally weak second quarter. We are continuing to improve pricing and margins and still selling as much new contracts as in the past producing a near record backlog. Finally, Ainsworth completed the acquisition of RYCOM Corporation on June 1, 2024. RYCOM develops, deploys, and manages smart building solutions that enable the end-to-end transformation of real estate assets into smart buildings and is recognized as the leader in smart building solutions in Canada. This acquisition considerably strengthens Ainsworth’s Energy & Technology business unit and positions GDI as a leading player in the Canadian marketplace in building technologies, data analytics and advisory services for energy and greenhouse gas reduction,” continued Mr. Bigras.
“With the recent challenges behind us, the outlook for all of GDI’s business segments is positive for the remainder of 2024. Our initiatives to reduce working capital requirements during 2024 are continuing and we remain committed to deliver a total reduction in operating working capital in the second half of the year. Our balance sheet remains healthy and we have sufficient room on our existing credit facilities to continue to execute on our strategic growth plans. I look forward to GDI’s performance through the remainder of 2024,” 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 MD&A 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:
August 8, 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: 995327 #
RapidConnect URL: https://emportal.ink/40clg9j
A rebroadcast of the conference call will be available until August 15, 2024 by dialing:
North America Toll-Free: 1-888-390-0541
Local: 416-764-8677 (Toronto)
Confirmation Code: 995327 #
June 30, 2024 unaudited condensed consolidated interim financial statements and accompanied Management & Discussion Analysis are filed on www.sedarplus.ca.
GDI INTEGRATED FACILITY SERVICES INC.
Condensed Consolidated Interim Statements of Financial Position
(Unaudited) (In millions of Canadian dollars)
As at June 30,
2024
As at December 31,
2023
Assets
Current assets
Cash
29
17
Trade and other receivables and contract assets
600
571
Current tax assets
9
11
Inventories
37
42
Other financial assets
14
13
Prepaid expenses and other
16
11
Derivatives
–
1
Total current assets
705
666
Non-current assets
Property, plant and equipment
125
127
Intangible assets
121
131
Goodwill
373
356
Other assets
15
12
Total non-current assets
634
626
Total assets
1,339
1,292
Liabilities and Shareholders’ Equity
Current liabilities
Bank indebtedness
6
14
Trade and other payables
303
298
Provisions
33
32
Contract liabilities
29
34
Current tax liabilities
6
2
Current portion of long-term debt
27
36
Total current liabilities
404
416
Non-current liabilities
Long-term debt
444
384
Other payables
6
5
Deferred tax liabilities
27
32
Total non-current liabilities
477
421
Shareholders’ equity
Share capital
381
380
Retained earnings
70
68
Contributed surplus
3
2
Accumulated other comprehensive income
4
5
Total shareholders’ equity
458
455
Total liabilities and shareholders’ equity
1,339
1,292
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,
2024
2023
2024
2023
Revenues
639
609
1,283
1,200
Cost of services
526
497
1,063
979
Selling and administrative expenses
81
81
163
159
Transaction, reorganization and other costs
2
1
3
2
Strategic information technology projects configuration and customization costs
1
1
1
2
Amortization of intangible assets
5
6
17
11
Depreciation of property, plant and equipment
14
13
28
25
Operating income
10
10
8
22
Net finance expense
5
8
4
14
Income before income taxes
5
2
4
8
Income tax expense
3
1
2
3
Net income
2
1
2
5
Other comprehensive income (loss)
Gains (losses) that are or may be reclassified to earnings:
Foreign currency translation differences for foreign operations
3
(7)
9
(7)
Hedge of net investments in foreign operations, net of tax
(3)
7
(9)
7
Cash flow hedges, effective portion of changes in fair value, net of tax
–
–
(1)
(1)
–
–
(1)
(1)
Total comprehensive income
2
1
1
4
Earnings per share:
Basic
0.07
0.04
0.09
0.19
Diluted
0.07
0.04
0.09
0.19
GDI INTEGRATED FACILITY SERVICES INC.
Condensed Consolidated Interim Statements of Changes in Equity
Six-month periods ended June 30, 2024 and 2023
(Unaudited) (In millions of Canadian dollars, except for number of shares)
Share capital
Retained
earnings
Contributed
surplus
Accumulated
other
comprehensive
income
Total
Number
(in thousands
of shares)
Amount
Balance, January 1, 2023
23,414
379
49
4
7
439
Net income
–
–
5
–
–
5
Other comprehensive loss
–
–
–
–
(1)
(1)
Total comprehensive income for the period
–
–
5
–
(1)
4
Transactions with owners of the Company:
Stock options exercised
66
1
–
–
–
1
Share-based compensation
–
–
–
1
–
1
Shares repurchased for cancellation
(98)
(1)
–
(3)
–
(4)
Balance, June 30, 2023
23,382
379
54
2
6
441
Balance, January 1, 2024
23,414
380
68
2
5
455
Net income
–
–
2
–
–
2
Other comprehensive loss
–
–
–
–
(1)
(1)
Total comprehensive income for the period
–
–
2
–
(1)
1
Transactions with owners of the Company:
Stock options exercised
66
1
–
–
–
1
Share-based compensation
–
–
–
1
–
1
Balance, June 30, 2024
23,480
381
70
3
4
458
GDI INTEGRATED FACILITY SERVICES INC.
Condensed Consolidated Interim Statements of Cash Flows
(Unaudited) (In millions of Canadian dollars)
Six-month periods ended June 30,
2024
2023
Cash flows from (used in) operating activities
Net income
2
5
Adjustments for:
Depreciation and amortization
45
36
Equity portion of share-based compensation
1
1
Net finance expense
4
14
Income tax expense
2
3
Income taxes paid
(2)
(11)
Net changes in non-cash operating assets and liabilities
(24)
(49)
Net cash from (used in) operating activities
28
(1)
Cash flows from (used in) financing activities
Proceeds from issuance of long-term debt
201
177
Repayment of long-term debt
(157)
(118)
Payment of lease liabilities
(19)
(16)
Interest paid
(15)
(10)
Other
1
(4)
Net cash from financing activities
11
29
Cash flows (used in) from investing activities
Business acquisitions and disposal, net of cash acquired
(7)
(2)
Additions to property, plant and equipment
(8)
(11)
Additions to intangible assets
(1)
(3)
Proceeds on disposal of property, plant and equipment
2
1
Net cash used in investing activities
(14)
(15)
Foreign exchange (loss) gain on cash held in foreign currencies
(5)
2
Net change in cash
20
15
Cash (Bank indebtedness), beginning of period:
Cash
17
7
Bank indebtedness
(14)
(10)
3
(3)
Cash, end of period:
Cash
29
15
Bank indebtedness
(6)
(3)
23
12
GDI INTEGRATED FACILITY SERVICES INC.
Segmented information
(Unaudited) (In millions of Canadian dollars)
Three-month period ended June 30, 2024
Business
Services
Canada
Business
Services
USA
Technical
Services
Corporate
and Other
Total
Recurring/contractual services
127
200
32
4
363
On-call services
10
21
68
1
100
Project
–
–
159
–
159
Manufacturing and distribution
–
–
–
12
12
Other revenues
5
–
–
–
5
Total external revenues
142
221
259
17
639
Inter-segment revenues
3
–
–
(3)
–
Revenues
145
221
259
14
639
Income (loss) before income taxes
9
8
3
(15)
5
Net finance expense
–
1
2
2
5
Operating income (loss)
9
9
5
(13)
10
Depreciation and amortization
3
5
9
2
19
Transaction, reorganization, and other costs
–
–
–
2
2
Share-based compensation
–
–
–
2
2
Strategic information technology projects configuration and customization costs
–
–
–
1
1
Adjusted EBITDA
12
14
14
(6)
34
Total assets
271
409
560
99
1,339
Total liabilities
68
119
256
438
881
Additions to property, plant and equipment
1
5
8
2
16
Additions to intangible assets
–
1
3
–
4
Goodwill recorded on business acquisition
–
7
2
–
9
GDI INTEGRATED FACILITY SERVICES INC.
Segmented information
(Unaudited) (In millions of Canadian dollars)
Three-month period ended June 30, 2023
Business
Services
Canada
Business
Services
USA
Technical
Services
Corporate
and Other
Total
Recurring/contractual services
124
170
21
4
319
On-call services
11
10
73
2
96
Project
–
–
170
–
170
Manufacturing and distribution
–
–
–
18
18
Other revenues
6
–
–
–
6
Total external revenues
141
180
264
24
609
Inter-segment revenues
3
–
–
(3)
–
Revenues
144
180
264
21
609
Income (loss) before income taxes
10
8
2
(18)
2
Net finance expense
–
1
1
6
8
Operating income (loss)
10
9
3
(12)
10
Depreciation and amortization
3
4
9
3
19
Transaction, reorganization, and other costs
–
–
–
1
1
Share-based compensation
–
–
–
3
3
Strategic information technology projects configuration and customization costs
–
–
–
1
1
Adjusted EBITDA
13
13
12
(4)
34
Total assets
267
359
544
122
1,292
Total liabilities
69
109
253
406
837
Additions to property, plant and equipment
3
3
6
2
14
Additions to intangible assets
–
–
1
2
3
Goodwill recorded on business acquisition
–
–
2
–
2
GDI INTEGRATED FACILITY SERVICES INC.
Segmented information (continued)
(Unaudited) (In millions of Canadian dollars)
Six-month period ended June 30, 2024
Business
Services
Canada
Business
Services
USA
Technical
Services
Corporate
and Other
Total
Recurring/contractual services
253
403
62
10
728
On-call services
18
43
140
3
204
Project
–
–
309
–
309
Manufacturing and distribution
–
–
–
29
29
Other revenues
13
–
–
–
13
Total external revenues
284
446
511
42
1,283
Inter-segment revenues
6
–
–
(6)
–
Revenues
290
446
511
36
1,283
Income (loss) before income taxes
17
11
2
(26)
4
Net finance expense
–
1
1
2
4
Operating income (loss)
17
12
3
(24)
8
Depreciation and amortization
6
14
19
6
45
Transaction, reorganization, and other costs
–
1
–
2
3
Share-based compensation
–
–
–
4
4
Strategic information technology projects configuration and customization costs
–
–
–
1
1
Adjusted EBITDA
23
27
22
(11)
61
Total assets
271
409
560
99
1,339
Total liabilities
68
119
256
438
881
Additions to property, plant and equipment
3
6
16
3
28
Additions to intangible assets
–
1
3
1
5
Goodwill recorded on business acquisition
–
10
2
–
12
GDI INTEGRATED FACILITY SERVICES INC.
Segmented information (continued)
(Unaudited) (In millions of Canadian dollars)
Six-month period ended June 30, 2023
Business
Services
Canada
Business
Services
USA
Technical
Services
Corporate
and Other
Total
Recurring/contractual services
244
337
42
11
634
On-call services
23
19
147
3
192
Project
–
–
327
–
327
Manufacturing and distribution
–
–
–
33
33
Other revenues
13
–
–
1
14
Total external revenues
280
356
516
48
1,200
Inter-segment revenues
6
–
–
(6)
–
Revenues
286
356
516
42
1,200
Income (loss) before income taxes
22
16
3
(33)
8
Net finance expense
–
1
3
10
14
Operating income (loss)
22
17
6
(23)
22
Depreciation and amortization
5
8
16
7
36
Transaction, reorganization, and other costs
–
–
1
1
2
Share-based compensation
–
–
–
5
5
Strategic information technology projects configuration and customization costs
–
–
–
2
2
Adjusted EBITDA
27
25
23
(8)
67
Total assets
267
359
544
122
1,292
Total liabilities
69
109
253
406
837
Additions to property, plant and equipment
4
5
13
5
27
Additions to intangible assets
–
–
1
3
4
Goodwill recorded on business acquisition
–
–
2
–
2
GDI INTEGRATED FACILITY SERVICES INC.
Business acquisitions
Acquisition
date
Company acquired
Location
Segment
reporting
Purchase price
allocation status
2024 Acquisitions
April 1, 2024
Hussmann Canada Inc.
(“Hussmann”)
Darthmouth, Nova
Scotia
Technical
Services
Preliminary
May 1, 2024
Jade Opco, LLC, doing business
as Paramount Building Solutions
(“Paramount”)
Phoenix, Arizona
Business
Services USA
Preliminary
June 1, 2024
RYCOM Corporation (“RYCOM”)
Toronto, Ontario
Technical
Services
Preliminary
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
Business disposal
On April 1, 2024, the Company completed the sale of its Superior cleaning and sanitation supplies distribution business and transferred some of its related liabilities.
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)
June
2024
March
2024
December
2023
September
2023
Revenue
639
644
622
615
Operating (loss) income
10
(2)
9
16
Depreciation and amortization
19
26
22
19
Transaction, reorganization and other costs
2
1
2
‒
Share-based compensation
2
2
2
2
Strategic information technology projects
configuration and customization costs
1
1
2
2
Adjusted EBITDA
34
28
37
39
Net income for the period
2
‒
6
8
Earnings per share
Basic
0.07
0.02
0.26
0.35
Diluted
0.07
0.02
0.25
0.35
Three months ended
(in millions of Canadian dollars, except per share data) (1)
June
2023
March
2023
December
2022
September
2022
Revenue
609
591
588
563
Operating income
10
12
15
19
Depreciation and amortization
19
17
22
18
Transaction, reorganization and other costs
1
1
1
1
Share-based compensation
3
2
3
2
Strategic information technology projects
configuration and customization costs
1
1
1
2
Adjusted EBITDA
34
33
42
42
Net income for the period
1
4
10
11
Earnings per share
Basic
0.04
0.15
0.41
0.45
Diluted
0.04
0.15
0.40
0.44
______________________________
* 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 “Segmented Information” tables at the end of this press release.
SOURCE GDI Integrated Facility Services Inc.
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