FOR: FIRSTSERVICE CORPORATION

COMPANY CONTACT:
D. Scott Patterson
Senior Vice President & CFO
FirstService Corporation
(416) 960-9500

INVESTOR RELATIONS:
Jeffrey Elliott
Jeffrey Elliott Communications
(416) 250-1078

FOR IMMEDIATE RELEASE

TSE: FSV
Nasdaq: FSRV

 

FIRSTSERVICE REPORTS RECORD THIRD QUARTER RESULTS

 

TORONTO, Ontario (January 25, 2000) -- FirstService Corporation today announced significant year-over-year increases in quarterly results driven primarily by strong internal growth.

Revenue for the three months ending December 31, 1999 grew 21% to US $79.8 million, while EBITDA increased 24% to US $5.8 million from US $4.7 million. Net earnings for the quarter were US $551,000, compared to US $297,000 in the prior year, and earnings per share were US $0.04, versus US $0.02 for the prior year period.

Revenues for the nine months ended December 31, 1999 were US $261.2 million, a 31% increase from the US $200.1 million reported in the comparable period. EBITDA was US $34.1 million, up 31% over the US $26.1 million reported last year, while earnings grew 26% to US $10.3 million from US $8.2 million. Earnings per share for the nine-month period were US $0.75 versus US $0.62 in the prior year.

"We are very pleased with our third quarter results which show significant year-over-year increases despite the impact of our acquisition of American Pool Enterprises which, as a seasonal business, generates losses in the December (third) and March (fourth) quarters," 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 again this year," he concluded.

During the most recent quarter, FirstService completed five tuck-under acquisitions, adding about US $9.5 million in annual revenue. Four of the acquisitions were in Residential Property Management operations and helped increase the number of units under management to more than 325,000. The other -- Edge Security Technologies, a leading provider of security systems to large corporations in the New York and Philadelphia markets -- was acquired by the Company's Intercon Security operations.

The Property Services division generated revenue of US $62.3 million for the third quarter, a 22% increase over the prior year, reflecting strong internal growth as well as incremental revenue from American Pool and the recently completed tuck-under acquisitions.

Revenue from the Business Services division rose to US $17.5 million for the quarter, representing a 16% increase over the prior year reflecting continued steady internal growth and the impact of the acquisition of DDS Southwest Distribution.

FirstService Corporation is a leader in the rapidly growing service sector, providing a variety of specialized Property and Business Services to corporate, government and residential customers throughout North America including residential property management, security, lawn care, franchising, business outsourcing and specialized trade material fulfillment.

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 31

 

1999

1998

1999

1998

Revenue

$ 79,793

$ 66,211

$ 261,247

$ 200,059

Cost of revenue

54,954

46,203

170,789

132,060

Selling, general and administrative expenses

18,994

15,308

56,370

41,901

EBITDA

5,845

4,700

34,088

26,098

Depreciation

1,641

1,384

4,726

3,894

Amortization

957

733

2,821

1,971

Interest

2,047

1,460

5,769

4,027

Earnings before the following

1,200

1,123

20,772

16,206

Income taxes

479

427

8,285

6,451

Earnings before minority interest

721

696

12,487

9,755

Minority interest share of earnings

170

399

2,166

1,536

Net earnings

$ 551

$ 297

$ 10,321

$ 8,219

Earnings per share:Basic

$ 0.04

$ 0.02

$ 0.80

$ 0.66

Diluted

$ 0.04

$ 0.02

$ 0.75

$ 0.62

Weighted average shares outstanding: Basic

12,936

12,547

12,931

12,462

Diluted

13,666

13,363

13,742

13,326

 



Condensed Consolidated Balance Sheets (Unaudited)

(in thousands of U.S. dollars)

Assets

As at December 31
1999

As at March 31
1999

Cash and cash equivalents

$ 12,370

$ 4,627

Accounts receivable (net)

47,365

41,360

Inventory and other current assets

16,122

16,444

Current assets

75,857

62,431

Goodwill

110,609

88,764

Fixed assets

28,859

25,847

Other assets

11,740

7,264

Total assets

$ 227,065

$ 184,306

Liabilities and shareholders' equity

Accounts payable and other current liabilities

$ 38,052

$ 27,737

Unearned revenue

5,721

6,099

Long term debt - current

2,663

1,726

Current liabilities

46,436

35,562

Long term debt net of current portion

105,376

84,516

Deferred income taxes

196

319

Minority interest

6,586

4,889

Shareholders' equity

68,471

59,020

Total liabilities and equity

$ 227,065

$ 184,306

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