FOR: FIRSTSERVICE CORPORATION

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

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

FOR IMMEDIATE RELEASE

TSE: FSV
Nasdaq: FSRV

 

FIRSTSERVICE POSTS RECORD YEAR-END RESULTS EARNINGS INCREASE 37%

 

TORONTO, Ontario (May 17, 2000) -- FirstService Corporation ("FirstService") today announced record results for the fiscal year ended March 31, 2000.

For the year, revenue grew to US$340.0 million, up 29% from the US$263.4 million reported a year ago -- leading to earnings before interest, taxes, depreciation and amortization (EBITDA) of US$38.0 million, an increase of 32% over US$28.8 million in the previous year. EBITDA margin increased by 30 basis points to 11.2% of revenue.

Net earnings were US$9.9 million, up 37% over the prior year, while diluted earnings per share grew by 33% to US$0.72 from US$0.54.

Revenue for the final quarter was US$78.8 million, a 24% gain over the prior year, while EBITDA was US$3.9 million, up 44%. Net loss for this seasonally low quarter was US$453,000, compared to a US$911,000 loss in the prior year period -- or US($0.03) versus US($0.07) on a per share basis.

"This is the eighth year in a row that we have exceeded our target of 20% annual growth in all key earnings statement indicators," said Jay Hennick, President and Chief Executive Officer. "Our business plan is proven, internal growth remains strong and we are confident in our ability to achieve our objectives again this year."

Revenue from the Property Services division was US$267.0 million for the year, an increase of US$61.9 million or 30%. Approximately US$35.0 million of the increase resulted from the acquisition of American Pool Enterprises and several tuck-under acquisitions, with the balance from internal growth. The community association management operations achieved internal growth in excess of 20%, while the security, lawn care and franchise operations averaged high single-digit internal growth.

For the quarter, the Property Services division posted revenue of US$60.0 million, up 24% over the prior year reflecting 13% internal growth and the impact of acquisitions.

Revenue from the Business Services division was US$73.0 million for the year, an increase of 25% or US$14.8 million over 1999-reflecting strong double-digit internal growth and the impact of the acquisition of DDS Southwest Distribution. Revenue for the quarter was US$18.8 million, up 26% over the prior year period.

FirstService Corporation is a leader in the rapidly growing service sector, providing a variety of specialized property and business outsourcing services--including residential property management, security, consumer services and data processing and specialized trade material fulfillment--to a variety of 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 March 31 Years ended March 31
 

2000

1999

2000

1999

Revenue

$78,788

$63,313

$340,035

$ 263,361

Cost of revenue

55,365

44,028

226,154

176,089

Selling, general and administrative expenses

19,534

16,590

75,904

58,505

EBITDA

3,889

2,695

37,977

28,767

Depreciation

1,760

1,500

6,486

5,395

Amortization

800

758

3,621

2,750

Interest

2,080

1,561

7,849

5,589

Earnings (loss) before the following:

(751)

(1,124)

20,021

15,033

Income taxes

(296)

(154)

7,989

6,402

Earnings (loss) before minority interest

(455)

(970)

12,032

8,631

Minority interest share of earnings

(2)

(59)

2,164

1,409

Earnings (loss)

($453)

($911)

$9,868

$7,222

Basic earnings per share

($0.03)

($0.07)

$0.76

$0.57

Diluted

($0.03)

($0.07)

$0.72

$0.54

Basic Weighted average shares outstanding

13,000

12,876

12,948

12,564

Diluted

13,000

12,876

13,708

13,475

Condensed Balance Sheet).

(in thousands of U.S. dollars)

As at March 31

Assets

2000

1999

Cash

$3,297

$4,627

Accounts Receivable (net)

53,170

41,360

Inventory and Other Current Assets

18,483

16,444

Current Assets

74,950

62,431

Goodwill

117,495

88,764

Fixed Assets

29,693

25,847

Other Assets

8,749

7,264

Total Assets

$230,887

$184,306

Liabilities and Shareholders' Equity

Accounts Payable and Other Current liabilities

$38,103

$27,737

Unearned Revenue

10,725

6,099

L.T. Debt - Current

2,733

1,726

Current Liabilities

51,561

35,562

Long Term Debt Less Current Portion

102,177

84,516

Deferred Income Taxes

1,836

319

Minority Interest

6,975

4,889

Shareholders' Equity

68,338

59,020

Total Liabilities and Equity

$230,887

$184,306

U.S. Dollar Reporting

The unaudited statements of earnings reporting in U.S. dollars are prepared under Canadian generally accepted accounting principles.

The amounts shown in U.S. dollars have been translated into U.S. dollars at the average exchange rate for the periods, except for income taxes which have also been adjusted as applicable, in accordance with U.S. GAAP.