FOR: FIRSTSERVICE CORPORATION

COMPANY CONTACT:
Jay S. Hennick
President & Chief Executive Officer
FirstService Corporation
(416) 960-9500

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 31% REVENUE GROWTH IN FIRST QUARTER

 

TORONTO, Ontario (July 22, 1999) -- FirstService Corporation (NASDAQ: FSRV; TSE: FSV) today announced record financial results for the first three months of fiscal 2000 - its initial quarter reporting in US dollars and under US GAAP.

Revenues for the three months ending June 30, 1999 were US $84.9 million, an increase of 31% from the US $64.7 million generated a year earlier, while EBITDA increased 23% to US $11.2 million from US $9.1 million.

Net earnings were US $3.6 million, up 12% over the prior year, while diluted earnings per share increased 8% to US $0.26 impacted by higher minority interest expense and by an additional 0.5 million weighted average shares outstanding.

"The first quarter results reflect a continuation of the strong operating performance experienced during the year ended March 31, 1999", said Scott Patterson, Senior Vice President and Chief Financial Officer. "All of our service lines are meeting or exceeding expectation and we are confident that we are on track to achieving our financial growth targets for the fiscal year", he concluded.

During the quarter, FirstService completed the acquisition of American Pool Enterprises, the largest commercial swimming pool and recreation facility management operation in the U.S. In addition, the Company amended and restated its lending agreement to increase credit availability to approximately US $165 million.

On July 7, 1999, subsequent to quarter-end, FirstService also completed the acquisition of DDS Southwest Distribution Services Limited, a specialty fulfillment operation with branches in Dallas, Oklahoma City and Albuquerque.

Revenue from the Property Services division was US $69.1 million, an increase of US $18.0 million or 35% over the prior year. Approximately $11.0 million of the revenue increase resulted from acquisitions, including California Closets and American Pool Enterprises, which closed effective June 1, 1999. The balance of the increase resulted from strong internal growth.

Revenue for the Business Services division grew internally by 16% for the first quarter to $15.8 million, compared to $13.6 million in the prior year.

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 community association 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 Income (Unaudited)

Three month

periods ended June 30

 

1999

1998

Revenue

$84,907

$64,686

Cost of revenue

56,070

42,836

Selling, general and administrative expenses

17,593

12,736

EBITDA

11,244

9,114

Depreciation

1,470

1,192

Amortization

814

629

Interest

1,763

1,302

Earnings before the following:

7,197

5,991

Income taxes

2,859

2,406

Earnings before minority interest

4,338

3,585

Minority interest share of earnings

754

382

Net Earnings

$3,584

$3,203

Earnings per share:Basic

$0.28

$0.26

Diluted

$0.26

$0.24

Weighted average shares outstanding: Basic

12,924

12,346

Diluted

13,788

13,263



Condensed Consolidated Balance Sheets (Unaudited)

(in thousands of U.S. dollars)

As At June 30As At March 31

Assets

1999

1999

Cash

$10,290

$4,627

Accounts receivable (net)

54,321

41,360

Inventory and other current assets

15,611

14,728

Current assets

80,222

60,715

Goodwill

100,272

88,764

Fixed assets

27,605

25,847

Other assets

10,406

8,118

Total Assets

$218,505

$183,444

Liabilities and equity

Accounts payable and other current liabilities

$33,869

$27,194

Unearned revenue

13,287

6,099

L.T. debt - current

2,572

1,726

Current liabilities

49,728

35,019

Long term debt net of current portion

99,711

84,516

Minority interest

5,525

4,889

Shareholders` equity

63,541

59,020

Total liabilities and equity

$218,505

$183,444