FirstService Reports First Quarter Results

Solid Top-Line Growth Across Both Divisions April 24, 2025 07:30 ET | Source: FirstService Corporation Operating highlights: Three monthsended March 31 2025 2024 Revenues (millions)$1,250.8 $1,158.0 Adjusted EBITDA (millions) (note 1) 103.3 83.4 Adjusted EPS (note 2) 0.92 0.67 GAAP Operating Earnings (millions) 39.3 38.1 GAAP EPS 0.06 0.14 TORONTO, April 24, 2025 (GLOBE NEWSWIRE) -- FirstService Corporation (TSX: FSV; NASDAQ: FSV) today reported operating and financial results for its first quarter ended March 31, 2025. All amounts are in US dollars. Consolidated revenues for the first quarter were $1.25 billion, up 8% relative to the same quarter in the prior year. Adjusted EBITDA (note 1) increased 24% to $103.3 million, and Adjusted EPS (note 2) was $0.92, reflecting 37% growth over the prior year quarter. GAAP Operating Earnings were $39.3 million, relative to $38.1 million in the prior year period. GAAP diluted earnings per share was $0.06 per share in the quarter, versus $0.14 in the same quarter a year ago. “We are pleased with our reported financial results, which were buoyed by strong margins and earnings growth,” said Scott Patterson, Chief Executive Officer of FirstService. “Despite the uncertain macroeconomic environment, our operating leaders and teams continued to drive disciplined execution and healthy profitability. Our performance during the quarter keeps us on track to hit our targets for the year,” he concluded. About FirstService CorporationFirstService Corporation is a North American leader in the essential outsourced property services sector, serving its customers through two industry-leading service platforms: FirstService Residential - North America’s largest manager of residential communities; and FirstService Brands - one of North America’s largest providers of essential property services delivered through individually branded company-owned operations and franchised systems. FirstService generates more than US$5.3 billion in annual revenues and has approximately 30,000 employees across North America. With significant insider ownership and an experienced management team, FirstService has a long-term track record of creating value and superior returns for shareholders. The Common Shares of FirstService trade on the NASDAQ and the Toronto Stock Exchange under the symbol “FSV”, and are included in the S&P/TSX 60 Index. More information is available at www.ﬁrstservice.com. Segmented Quarterly ResultsFirstService Residential revenues were $525.1 million for the first quarter, an increase of 6% versus the prior year, including 3% organic growth. Adjusted EBITDA for the quarter was $41.6 million, an increase of 17% compared to the prior year period. Operating Earnings were $29.3 million, versus $26.7 million in the first quarter of last year. The year-over-year division margin improvement was due to realized operating efficiencies in our property management client service delivery model. FirstService Brands revenues for the first quarter totalled $725.7 million, up 10% relative to the prior year period. On an organic basis, division revenues declined 2%, with solid organic growth at Century Fire Protection, offset by flat or modestly lower year-over-year results in our other service lines. Reported revenue growth also reflected the contribution from recent tuck-under acquisitions within Roofing Corp of America. Adjusted EBITDA was $67.8 million, up 22% versus the first quarter of 2024. The Adjusted EBITDA margin expansion was largely driven by continued improvements in our operating processes and cost structure at our restoration and home services brands. Operating Earnings were $24.5 million, compared to $26.8 million in the prior year quarter. The Operating Earnings margin decline resulted from increased contingent upside earn-out adjustments tied to certain recently completed acquisitions. Corporate costs, as presented in Adjusted EBITDA (note 1), were $6.1 million in the first quarter, relative to $7.7 million in the prior year period. Corporate costs for the quarter were $14.5 million, relative to $15.4 million in the prior year period. Conference CallFirstService will be holding a conference call on Thursday, April 24, 2025 at 11:00 a.m. ET to discuss results for the first quarter of 2025. This call is being webcast live at the Company’s website at www.firstservice.com. Participants may register for the call here https://register.vevent.com/register/BI35805f23ec814a5088dcde8f166eb24f to receive the dial-in number and their unique PIN. To join the webcast in listen only mode, use this link: https://edge.media-server.com/mmc/p/6tn3nf33. Forward-looking StatementsThis press release includes or may include forward-looking statements. Much of this information can be identified by words such as “expect to,” “expected,” “will,” “estimated” or similar expressions suggesting future outcomes or events. FirstService believes the expectations reflected in such forward-looking statements are reasonable but no assurance can be given that these expectations will prove to be correct and such forward-looking statements should not be unduly relied upon. These statements involve known and unknown risks, uncertainties and other factors which may cause the actual results to be materially different from any future results, performance or achievements contemplated in the forward-looking statements. Such factors include: (i) general economic and business conditions, which will, among other things, impact demand for FirstService’s services and the cost of providing services; (ii) the ability of FirstService to implement its business strategy, including FirstService’s ability to acquire suitable acquisition candidates on acceptable terms and successfully integrate newly acquired businesses with its existing businesses; (iii) changes in or the failure to comply with government regulations; and (iv) other factors which are described in FirstService’s annual information form for the year ended December 31, 2024 under the heading “Risk factors” (a copy of which may be obtained at www.sedarplus.ca) and Annual Report on Form 40-F filed with the United States Securities and Exchange Commission (a copy of which may be obtained at www.sec.gov), and subsequent filings (which factors are adopted herein). Forward-looking statements contained in this press release are made as of the date hereof and are subject to change. All forward-looking statements in this press release are qualified by these cautionary statements. Unless otherwise required by applicable securities laws, we do not intend, nor do we undertake any obligation, to update or revise any forward-looking statements contained in this press release to reflect subsequent information, events, results or circumstances or otherwise. Summary financial information is provided in this press release. Our interim consolidated financial statements and related management’s discussion and analysis will be made available on SEDAR+ at www.sedarplus.ca. Notes1. Reconciliation of net earnings to Adjusted EBITDA: Adjusted EBITDA is defined as net earnings, adjusted to exclude: (i) income tax; (ii) other (income) expense; (iii) interest expense; (iv) depreciation and amortization; (v) acquisition-related items; and (vi) stock-based compensation expense. The Company uses adjusted EBITDA to evaluate its own operating performance, its ability to service debt, and as an integral part of its planning and reporting systems. Additionally, this measure is used in conjunction with discounted cash flow models to determine the Company’s overall enterprise valuation and to evaluate acquisition targets. Adjusted EBITDA is presented as a supplemental measure because the Company believes such a measure is useful to investors as a reasonable indicator of operating performance, due to the low capital intensity of the Company’s service operations. The Company believes this measure is a financial metric used by many investors to compare companies, especially in the services industry. This measure is not a recognized measure of financial performance under GAAP in the United States, and should not be considered as a substitute for operating earnings, net earnings or cash flow from operating activities, as determined in accordance with GAAP. The Company’s method of calculating adjusted EBITDA may differ from other issuers and accordingly, this measure may not be comparable to measures used by other issuers. A reconciliation of net earnings to adjusted EBITDA appears below. (in thousands of US dollars)Three months endedMarch 31 2025 2024 Net earnings$14,080 $14,897 Income tax 6,000 6,015 Other income, net (86) (1,880) Interest expense, net 19,264 19,026 Operating earnings 39,258 38,058 Depreciation and amortization 44,176 36,807 Acquisition-related items 12,233 1,600 Stock-based compensation expense 7,599 6,908 Adjusted EBITDA$103,266 $83,373 A reconciliation of segment operating earnings to segment Adjusted EBITDA appears below. (in thousands of US$) Three months ended, March 31, 2025 FirstServiceResidential FirstServiceBrands Corporate (1) Operating earnings (loss)$29,267 $24,486 $(14,495) Depreciation and amortization 10,636 33,517 23 Acquisition-related items 1,728 9,764 741 Stock-based compensation expense - - 7,599 Adjusted EBITDA$41,631 $67,767 $(6,132) Three months ended, March 31, 2024 FirstServiceResidential FirstServiceBrands Corporate (1) Operating earnings (loss)$26,658 $26,799 $(15,399) Depreciation and amortization 8,423 28,361 23 Acquisition-related items 518 302 780 Stock-based compensation expense - - 6,908 Adjusted EBITDA$35,599 $55,462 $(7,688) Segment Adjusted EBITDA margin is defined as segment Adjusted EBITDA divided by segment revenues. (1) Corporate is not an operating segment, but rather represent corporate overhead expenses not directly attributable to reportable segments and are therefore unallocated within segment operating earnings (loss) and Segment Adjusted EBITDA. 2. Reconciliation of net earnings and net earnings per share to adjusted net earnings and adjusted EPS: Adjusted EPS is defined as diluted net earnings per share, adjusted for the effect, after income tax, of: (i) the non-controlling interest redemption increment; (ii) acquisition-related items; (iii) amortization expense related to intangible assets recognized in connection with acquisitions; and (iv) stock-based compensation expense. The Company believes this measure is useful to investors because it provides a supplemental way to understand the underlying operating performance of the Company and enhances the comparability of operating results from period to period. Adjusted EPS is not a recognized measure of financial performance under GAAP, and should not be considered as a substitute for diluted net earnings per share, as determined in accordance with GAAP. The Company’s method of calculating this non-GAAP measure may differ from other issuers and, accordingly, this measure may not be comparable to measures used by other issuers. A reconciliation of net earnings to adjusted net earnings and of diluted net earnings per share to adjusted EPS appears below. (in thousands of US dollars)Three months endedMarch 31 2025 2024 Net earnings$14,080 $14,897 Non-controlling interest share of earnings (1,243) (1,533) Acquisition-related items 12,233 1,600 Amortization of intangible assets 18,517 15,231 Stock-based compensation expense 7,599 6,908 Income tax on adjustments (8,575) (6,421) Non-controlling interest on adjustments (542) (264) Adjusted net earnings$42,069 $30,418 (in US dollars)Three months endedMarch 31 2025 2024 Diluted net earnings per share$0.06 $0.14 Non-controlling interest redemption increment 0.22 0.16 Acquisition-related items 0.21 0.03 Amortization of intangible assets, net of tax 0.28 0.23 Stock-based compensation expense, net of tax 0.15 0.11 Adjusted EPS$0.92 $0.67 FIRSTSERVICE CORPORATIONOperating Results(in thousands of US dollars, except per share amounts) Three monthsended March 31 (unaudited) 2025 2024 Revenues$1,250,826 $1,158,045 Cost of revenues 841,468 788,577 Selling, general and administrative expenses 313,691 293,003 Depreciation 25,659 21,576 Amortization of intangible assets 18,517 15,231 Acquisition-related items (1) 12,233 1,600 Operating earnings 39,258 38,058 Interest expense, net 19,264 19,026 Other income, net (86) (1,880) Earnings before income tax 20,080 20,912 Income tax 6,000 6,015 Net earnings 14,080 14,897 Non-controlling interest share of earnings 1,243 1,533 Non-controlling interest redemption increment 10,034 7,056 Net earnings attributable to Company 2,803 6,308 Net earnings per share Basic$0.06 $0.14 Diluted 0.06 0.14 Adjusted EPS (2)$0.92 $0.67 Weighted average common shares (thousands) Basic 45,368 44,850 Diluted 45,610 45,111 (1) Acquisition-related items include contingent acquisition consideration fair value adjustments, and transaction costs.(2) See definition and reconciliation above. Condensed Consolidated Balance Sheets(in thousands of US dollars) (unaudited)March 31, 2025 December 31, 2024 Assets Cash and cash equivalents$217,200 $227,598 Restricted cash 23,078 16,088 Accounts receivable 946,398 947,517 Prepaid and other current assets 375,130 368,150 Current assets 1,561,806 1,559,353 Other non-current assets 27,141 28,007 Deferred income tax 2,121 2,114 Fixed assets 260,582 253,994 Operating lease right-of-use assets 258,015 240,518 Goodwill and intangible assets 2,125,084 2,110,866 Total assets$4,234,749 $4,194,852 Liabilities and shareholders' equity Accounts payable and accrued liabilities$496,661 $541,509 Unearned revenues 210,989 190,885 Other current liabilities 31,899 23,690 Operating lease liabilities - current 54,643 53,115 Long-term debt - current 11,515 41,567 Current liabilities 805,707 850,766 Long-term debt - non-current 1,297,132 1,257,143 Operating lease liabilities - non-current 232,443 214,423 Other liabilities 152,686 150,542 Deferred income tax 88,008 84,895 Non-controlling interests 453,039 449,337 Shareholders' equity 1,205,734 1,187,746 Total liabilities and equity$4,234,749 $4,194,852 Supplemental balance sheet information Total debt$1,308,647 $1,298,710 Total debt, net of cash 1,091,447 1,071,112 Condensed Consolidated Statements of Cash Flows(in thousands of US dollars) Three months endedMarch 31 (unaudited) 2025 2024 Cash provided by (used in) Operating activities Net earnings$14,080 $14,897 Items not affecting cash: Depreciation and amortization 44,176 36,807 Deferred income tax (819) (2,274) Other 18,199 6,332 75,636 55,762 Changes in non cash working capital Accounts receivable 9,994 19,997 Payables and accruals (69,736) (56,284) Other 25,356 (8,920) Contingent acquisition consideration - (19,355) Net cash provided by (used in) operating activities 41,250 (8,800) Investing activities Acquisition of businesses, net of cash acquired (8,636) (31,618) Purchases of fixed assets (29,563) (25,021) Other investing activities (7,046) (701) Net cash used in investing activities (45,245) (57,340) Financing activities Increase in long-term debt, net 13,006 46,255 Purchases of non-controlling interests, net (14,496) (11,221) Dividends paid to common shareholders (11,317) (10,054) Other financing activities 13,409 18,150 Net cash provided by financing activities 602 43,130 Effect of exchange rate changes on cash (15) 228 Decrease in cash, cash equivalents and restricted cash (3,408) (22,782) Cash, cash equivalents and restricted cash, beginning of period 243,686 206,877 Cash, cash equivalents and restricted cash, end of period$240,278 $184,095 Segmented Results(in thousands of US dollars) (unaudited)FirstServiceResidential FirstServiceBrands Corporate Consolidated Three months ended March 31 2025 Revenues$525,087 $725,739 $- $1,250,826 Adjusted EBITDA 41,631 67,767 (6,132) 103,266 Operating earnings 29,267 24,486 (14,495) 39,258 2024 Revenues$496,124 $661,921 $- $1,158,045 Adjusted EBITDA 35,599 55,462 (7,688) 83,373 Operating earnings 26,658 26,799 (15,399) 38,058 COMPANY CONTACTS: D. Scott PattersonChief Executive Officer Jeremy RakusinChief Financial Officer (416) 960-9566

FirstService Reports First Quarter Results

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