FOR: FIRSTSERVICE CORPORATION

COMPANY CONTACT:
D. Scott Patterson
Senior Vice President & Chief Financial Officer
(416) 960-9500

INVESTOR RELATIONS:
Jeffrey Elliott
Jeffrey Elliott Communications
(919) 968-4085

FOR IMMEDIATE RELEASE

TSE: FSV
Nasdaq: FSRV

 

FIRSTSERVICE REPORTS RECORD THIRD QUARTER RESULTS

 

TORONTO, Ontario (January 24, 2001)-- FirstService Corporation today announced significant year-over-year increases in revenue and earnings for the third quarter of fiscal 2001.

Revenue for the three months ending December 31, 2000 grew 21.5% to US $97.0 million, while EBITDA increased 32.4% to US $7.7 million from US $5.8 million. Net earnings for the quarter were US $1.1 million, compared to US $551,000 in the prior year. Diluted earnings per share doubled to US $0.08 from US $0.04.

Revenues for the nine months ended December 31, 2000 were US $320.5 million, a 22.7% increase from the US $261.2 million reported in the comparable period. EBITDA was US $41.6 million, up 22.2% over the US $34.1 million reported last year, while net earnings grew 22.7% to US $12.7 million from US $10.3 million. Diluted earnings per share for the nine-month period were US $0.92 versus US $0.75 in the prior year.

"We are very pleased with our third quarter results which show significant year-over-year increases," said Scott Patterson, Chief Financial Officer. "Overall, our operations continue to perform strongly and we are confident that we are on track to achieve our financial objectives for the year ending March 31.

" The Property Services division generated revenue of US $78.3 million for the third quarter, a 25.7% increase over the prior year, reflecting internal growth of approximately 11% and the impact of several acquisitions including Security Services and Technologies.

Revenue from the Business Services division was US $18.6 million for the quarter, representing an increase of 6.3% from US $17.5 million in the prior year.

During the third quarter, BDP Business Data Services, a unit of FirstService's Business Services division, announced three significant contract wins: one with the Canadian Department of Justice and two contracts to process and administer student loans; one with the Province of British Columbia and the other with Human Resources Development Canada. The aggregate value of the contracts is between Cdn. $55.0 million and Cdn. $65.0 million over five years.

Subsequent to the end of the third quarter, FirstService announced the completion of three tuck-under acquisitions adding approximately US $10.0 million in annual revenue to its Property Services division.

FirstService Corporation is a leader in the rapidly growing service sector, providing a variety of property and business services -- including residential property management, security, and consumer services as well as information processing and specialized trade material fulfillment -- to customers throughout North America.

Certain statements included in this release constitute "forward-looking statements" within the meaning of the U.S. Private Securities Litigation Reform Act of 1995 (the "Reform Act"). Such forward-looking statements involve known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements of the Company, or industry results, to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements. Such factors include, among others, the following: general economic and business conditions, which will, among other things, impact demand for the Company's services, service industry conditions and capacity; the ability of the Company to implement its business strategy, including the Company's ability to acquire suitable acquisition candidates on acceptable terms and successfully integrate newly acquired businesses with its existing businesses; changes in or the failure to comply with government regulations (especially safety and environmental laws and regulations); and other factors which are described in the Company's filings with the Securities and Exchange Commission.

FirstService Corporation

Consolidated Statements of Earnings (Unaudited)

(in thousands of U.S. dollars)

Three month
Periods ended December 31
Nine month
Periods ended December
2000 1999 2000 1999

Revenue

$96,957 $79,793 $320,514 $261,247

Cost of revenue

66,879 54,954

211,545 170,789

Selling, general and administrative expenses

22,339 18,994

67,323 56,370

EBITDA

7,739 5,845

41,646 34,088

Depreciation

1,914 1,641 5,480 4,726

Amortization

1,046 957 3,119 2,821

Interest

2,489 2,047 7,200 5,769

Earnings before the following:

2,290 1,200 25,847 20,772

Income taxes

916 479 10,332 8,285

Earnings before minority interest

1,374 721 15,515 12,487

Minority interest share of earnings

319 170 2,852 2,166

Net earnings

$1,055 $551

$12,663 $10,321

Earnings per share:Basic

$0.08 $0.04

$0.97 $0.80

Diluted

$0.08 $0.04 $0.92 $0.75

Weighted average shares outstanding: Basic

13,057 12,936 13,054 12,931

Diluted

13,908 13,666

13,772 13,742

Condensed Consolidated Balance Sheets

(in thousands of U.S. dollars)

(Unaudited)
As At
December 31
(Audited)
As at
March 31

Assets

2000 2000

Cash and cash equivalents

$5,218 $ 3,297

Accounts receivable (net)

63,673 53,170

Inventory and other current assets

19,691 18,483

Current assets

88,582 74,950

Fixed assets

32,259 29,693

Other assets

10,872 8,749

Goodwill

137,301 117,495

Total assets

$269,014 $ 230,887

Liabilities and shareholders' equity

Accounts payable and other current liabilities

$42,533 $ 38,103

Unearned revenue

5,878 10,725

Long term debt - current

4,054 2,733

Current liabilities

52,465 51,561

Long term debt net of current portion

123,056 102,177

Deferred income taxes

3,712 1,836

Minority interest

9,811 6,975

Shareholders' equity

79,970 68,338

Total liabilities and equity

$269,014 $ 230,887

The Consolidated Statements of Earnings and Balance Sheets have been prepared in accordance with U.S. GAAP.