Conference Call - October 24, 2000

 

 

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 REPORTS RECORD SECOND QUARTER RESULTS

 

TORONTO, Ontario (October 24, 2000) -- FirstService Corporation today announced record financial results for the second quarter of fiscal 2001.

At US $118.2 million, revenues for the three months ending September 30, 2000 were up 22% over the prior year, while EBITDA increased 15% to US $19.5 million from US $17.0 million. Net earnings were US $6.9 million, an increase of 12%, and diluted earnings per share increased 11% to US $0.50 from US $0.45.

Revenues for the six months ended September 30, 2000 were US $223.6 million, a 23% increase from the US $181.5 million reported in the comparable prior year period. EBITDA was US $33.9 million, up 20% over the US $28.2 million reported last year, while earnings grew 18% to US $11.6 million from US $9.8 million and diluted earnings per share increased 20% to US $0.85 from US $0.71.

"Second quarter results reflect solid operating performance which met internal and external expectations" said Scott Patterson, Senior Vice President and Chief Financial Officer. "Our year-to-date momentum puts us on track to again exceed our 20% growth target for the year."

The Property Services division generated revenue of US $96.0 million for the second quarter, an increase of 27% over the prior year. Approximately US $11.0 million of the revenue increase relates to acquisitions made over the past year, with the balance resulting from internal growth of approximately 12%.

Revenue from the Business Services division was US $22.2 million for the quarter, up from US $20.9 million in the prior year.

During the quarter, FirstService completed five tuck-under acquisitions which added more than US $20.0 million in annual revenue; increased the total number of properties and residential units under management to more than 1,800 and 350,000, respectively; and expanded the breadth of services offered to managed communities.

Subsequent to the end of the second quarter, BDP Business Data Services, a unit of its Business Services Division, announced that it had won two significant contracts, one with the Canadian Government's Department of Justice and the second with the Province of British Columbia. The contracts are evidence that BDP continues its strong record of internal growth.

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. Top and bottom line growth has exceeded the Company's 20% annual growth target for eight years in a row.

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 September 30
Six month
Periods ended September 30
2000 1999 2000 1999

Revenue

$118,166 $96,547 $223,557 $181,454

Cost of revenue

75,286 59,765

144,666 115,835

Selling, general and administrative expenses

23,430 19,783

44,984 37,376

EBITDA

19,450 16,999

33,907 28,243

Depreciation

1,825 1,615 3,566 3,085

Amortization

1,096 1,050 2,073 1,864

Interest

2,477 1,959 4,711 3,722

Earnings before the following:

14,052 12,375 23,557 19,572

Income taxes

5,616 4,947 9,416 7,806

Earnings before minority interest

8,436 7,428 14,141 11,766

Minority interest share of earnings

1,507 1,242 2,533 1,996

Net earnings

$6,929 $6,186

$11,608 $9,770

Earnings per share:Basic

$0.53 $0.48

$0.89 $0.76

Diluted

$0.50 $0.45 $0.85 $0.71

Weighted average shares outstanding: Basic

13,061 12,933 13,052 12,929

Diluted

13,728 13,733

13,684 13,769

Condensed Consolidated Balance Sheets

(in thousands of U.S. dollars)

(Unaudited)
As At
September 30
(Audited)
As at
March 31

Assets

2000 2000

Cash and cash equivalents

$1,460 $ 3,297

Accounts receivable (net)

63,604 53,170

Inventory and other current assets

19,033 18,483

Current assets

84,097 74,950

Fixed assets

31,954 29,693

Other assets

10,532 8,749

Goodwill

133,534 117,495

Total assets

$260,117 $ 230,887

Liabilities and shareholders` equity

Accounts payable and other current liabilities

$41,575 $ 38,103

Unearned revenue

3,992 10,725

Long term debt - current

4,186 2,733

Current liabilities

49,753 51,561

Long term debt net of current portion

119,130 102,177

Deferred income taxes

3,022 1,836

Minority interest

9,522 6,975

Shareholders` equity

78,690 68,338

Total liabilities and equity

$260,117 $ 230,887

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