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 RECORD SECOND QUARTER RESULTS

 

TORONTO, Ontario (October 26, 1999) -- FirstService Corporation today announced record financial results for the second quarter of fiscal 2000.

At $96.5 million, revenues for the three months ending September 30, 1999 were up 39% over the prior year, while EBITDA increased 37% to $17.0 million from $12.4 million. Net earnings were $6.19 million, up 29% over the prior year, and diluted earnings per share increased 25% to $0.45 from $0.36.

Revenues for the six months ended September 30, 1999 were $181.5 million, a 35% increase from the $134.1 million reported in the comparable prior year period. EBITDA was $28.2 million, up 31% over the $21.6 million reported last year, while earnings grew 22% to $9.8 million from $8.0 million and diluted earnings per share increased 18% to $0.71 from $0.60.

"Second quarter results reflect solid operating performance throughout the company" said Scott Patterson, Senior Vice President and Chief Financial Officer. "All of our service lines continue to meet internal expectations and we are confident that we are on track to again achieve our growth objectives for the full year", he concluded.

The Property Services division generated revenue of $75.6 million for the second quarter, an increase of $20.8 million or 38% over the prior year. Approximately $14.0 million of the revenue increase relates to new acquisitions, including American Pool Enterprises which was completed during the first quarter of this year, with the balance attributable to internal growth.

During the quarter, FirstService completed the acquisition of DDS Southwest Distribution Services Limited. Southwest provides order processing and fulfillment, kit preparation, invoicing and accounts receivable collection to customers in the educational publishing industry from branches in Dallas, Oklahoma City and Albuquerque.

Revenue from the Business Services division rose to $20.9 million for the quarter, a 43% increase over the prior year, reflecting the impact of the acquisition of DDS Southwest and solid internal growth.

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

  Three Month Period
Ended September 30
Six Month Period
Ended September 30
 

1999

1998

1999 1998

Revenue

$96,547 $69,402 $181,454 $134,166

Cost of revenue

59,765

43,141

115,835 85,963

Selling, general and administrative expenses

19,783

13,844

37,376 26,600

EBITDA

16,999

12,417

28,243 21,603

Depreciation

1,615

1,320

3,085 2,512

Amortization

1,050

607

1,864 1,238

Interest

1,959

1,268

3,722 2,568

Earnings before the following:

12,375

9,222

19,572 15,285

Income taxes

4,947

3,672

7,806 6,106

Earnings before minority interest

7,428

5,550

11,766 9,179

Minority interest share of earnings

1,242

754

1,996 1,144

Net Earnings

$6,186

$4,769

$9,770 $8,035

Earnings per share:Basic

$0.48

$0.38

$0.76 $0.65

Diluted

$0.45

$0.36

$0.71 $0.60

Weighted average shares outstanding: Basic

12,933

12,496

12,929 12,421

Diluted

13,733

13,228

13,769 13,304


Condensed Consolidated Balance Sheets (Unaudited)

(in thousands of U.S. dollars)

  As At
September 30
As At
March 31

Assets

1999

1999

Cash

$5,616

$4,627

Accounts receivable (net)

55,067

41,360

Inventory and other current assets

18,174

14,728

Current assets

78,857

60,715

Goodwill

107,626

88,764

Fixed assets

28,132

25,847

Other assets

11,769

8,118

Total Assets

$226,384

$183,444

Liabilities and equity

   

Accounts payable and other current liabilities

$45,502

$27,194

Unearned revenue

3,332

6,099

L.T. debt – current

2,164

1,726

Current liabilities

50,998

35,019

Long term debt net of current portion

101,563

84,516

Minority interest

6,103

4,889

Shareholders’ equity

67,720

59,020

Total liabilities and equity

$266,384

$183,444

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