- Third quarter revenue of $281.8 million, an increase $40.6 million or 16.8% over Q3 2017
- Third quarter net income of $4.2 million, an increase of $0.5 million over Q3 2017
- Third quarter Adjusted EBITDA1 of $16.5 million, up by $2.9 million or 21.3% over Q3 2017
For the third quarter ended September 30, 2018:
- Revenue reached $281.8 million, an increase of $40.6 million, or 16.8%, compared to the third quarter of 2017. The increase in revenue resulted primarily from organic growth by 8.9% and acquisitions by 6.5%.
- Net income reached $4.2 million or $0.20 per share, compared to $3.7 million, or $0.17 per share for the third quarter of 2017, an increase of 17.7%.
- Adjusted EBITDA1 amounted to a record of $16.5 million, an increase of $2.9 million, or 21.3%, over the third quarter of 2017. Adjusted EBITDA margin1 was 5.8% compared to 5.6% in the third quarter of 2017. The increase in Adjusted EBITDA1 comes mainly from strong performance in the Janitorial USA and Technical Services business segments.
For the nine-month period ended September 30, 2018:
- Revenue reached $800.2 million, an increase of $78.1 million, or 10.8%, over the corresponding period of 2017. The increase in revenue resulted primarily from acquisitions by 6% and organic growth by 5.1%.
- Net income reached $9.1 million, or $0.43 per share, compared to $7.3 million, or $0.34 per share for the corresponding period of 2017, an increase of 26.5%
- Adjusted EBITDA1 amounted to $41.6 million, an increase of $5.5 million, or 15.2%, over the corresponding period of 2017. Adjusted EBITDA margin1 was 5.2% for the nine-month period of 2018 compared with 5.0% in 2017. All reporting segments performed better than the previous year, fueled by strong results in the Technical Services and Janitorial USA business segments.
"I am very pleased to report that GDI delivered record results in the third quarter of 2018 with an Adjusted EBITDA1 of $16.5 million or 5.8% of revenue, compared to a margin of 5.6% recorded in the third quarter of 2017. Each of GDI's business segments reported an increase in Adjusted EBITDA1 over the corresponding quarter of 2017. Our Canadian Janitorial business segment is performing well given prevailing market conditions and our management and operations teams have shown their ability to maintain profitability despite labour cost pressures in certain markets. Our USA Janitorial business segment delivered a record quarter with $5.1 million of Adjusted EBITDA1 and revenue growth of 38.1%, including organic growth of 18.0%. The USA Janitorial business had significant contract wins in the quarter which contributed to this growth. Our Technical Services segment performed very well in the third quarter and is continuing to grow both revenue and profitability in-line with our expectations. The business segment recorded revenue growth of 23.8%, including organic growth of 12.7%, and an Adjusted EBITDA margin1 of 5.0% in the quarter, doubling the margin of 2.5% in the third quarter of 2017. Our Complementary Services segment also had a strong quarter, generating revenue growth of 29% and an Adjusted EBITDA1 of $1.1 million, a 10% improvement over the third quarter of 2017," stated Claude Bigras, President & CEO of GDI.
"During Q3 we continued to execute on our strategy to strengthen GDI's business and services offering through strategic acquisition. Our Ainsworth subsidiary concluded the acquisition of a leading mechanical and electrical services businesses in Montreal, considerably strengthening Ainsworth's platform in Quebec and solidifying GDI's position as the leading fully integrated facility services provider in Quebec as well as in all of Canada. This marks GDI's fifth acquisition of 2018 and our pipeline of strategic opportunities remains strong for the coming year. Overall, I am very pleased with the performance of all of GDI's business segments during the third quarter of 2018. Our outlook for the remainder of the year remains positive, our balance sheet is strong, our leverage ratios are within our comfort zone, and we are well positioned to continue to execute on our business plan," concluded Mr. Bigras.
GDI is a leading 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, hotels, shopping centres, industrial facilities, healthcare establishments, distribution facilities, airports and other transportation facilities. GDI's commercial facility services capabilities include commercial janitorial, installation, maintenance and repair of HVAC-R, mechanical and electrical systems, as well as other complementary services such as damage restoration and janitorial products manufacturing and distribution. GDI's subordinate voting shares are listed on the Toronto Stock Exchange (TSX:GDI.TO - News). Additional information on GDI can be found on its website at www.gdi.com.
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, goodwill impairment, 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 "Non-IFRS financial measures" section of the Company's MD&A.
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. 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:
Thursday November 8, 2018 at 9:00 a.m. (ET)
Investors and Media representatives may attend as listeners only.
Please use the following dial-in number to have access to the conference call by dialing 5 minutes before the start of the conference:
Canada/United States access number: 1-888-224-3719
Confirmation Code: 21899054
A rebroadcast of the conference call will be available until November 15, 2018, by dialing:
Canada and United States Access (English): 1-800-633-8625
Canada and United States access (French): 1-900-977-6910
Confirmation Code: 21899054
September 30, 2018 consolidated financial statements and accompanied Management & Discussion Analysis are filed on www.sedar.com.
SOURCE GDI Integrated Facility Services Inc.
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