GDI Integrated Facility Services Inc. Releases its Financial Results for the Fourth Quarter and the Year Ended December 31, 2023

Q4 2023 revenue of $622 million, an increase of $34 million, or 6%, over Q4 2022.
Q4 2023 Adjusted EBITDA* of $37 million, representing an Adjusted EBITDA* margin of 6%.
Q4 2023 net income of $6 million or $0.26 per share compared with $10 million or $0.41 per share for the fourth quarter of 2022.
Q4 2023 decrease in net working capital of $36 million, resulting in long-term debt repayment of $33 million.
2023 revenue of $2.44 billion, an increase of $265 million or 12% over 2022.
2023 Adjusted EBITDA* of $143 million, a decrease of $13 million, or 8%, over 2022.
2023 net income of $19 million or $0.80 per share compared with $36 million or $1.57 per share in 2022.

LASALLE, QC, Feb. 28, 2024 /CNW/ – GDI Integrated Facility Services Inc. (“GDI” or the “Company”) (TSX:GDI) is pleased to announce its financial results for the fourth quarter and the year ended December 31, 2023.

For the fourth quarter of 2023:

Revenue reached $622 million, an increase of $34 million, or 6%, over the fourth quarter of 2022, comprised of 2% organic growth and 4% growth from acquisitions.
Adjusted EBITDA* amounted to $37 million, representing an Adjusted EBITDA* margin of 6%.
Net income was $6 million or $0.26 per share compared to $10 million or $0.41 per share in Q4 2022. The decrease of net income in the fourth quarter of 2023 compared to 2022 is mainly due to lower operating income of $7 million and higher income tax expense of $4 million, offset by lower net finance expense of $7 million.
Net working capital reduction of $36 million, resulting in long-term debt repayment of $33 million before business acquisition payment.

For the fourth quarters of 2023 and 2022, the business segments performed as follows:

For the year ended December 31, 2023:

Revenue reached $2.44 billion, an increase of $265 million, or 12%, compared to 2022, comprised of 8% organic growth, 2% growth from acquisitions and 2% growth from the appreciation of the U.S. dollar relative to the Canadian dollar.
Adjusted EBITDA* amounted to $143 million, a decrease of $13 million, or 8%, compared to 2022.
Net income was $19 million or $0.80 per share compared to $36 million or $1.57 per share in 2022. The decrease is mainly due to lower operating income of $21 million, partially offset by lower income tax expense of $3 million.

For the years ended December 31, 2023 and 2022, the business segments performed as follows:

GDI’s Business Services Canada segment delivered another solid fourth quarter, recording $146 million in revenue while generating $13 million in Adjusted EBITDA*, representing an Adjusted EBITDA margin* of 9%. GDI’s Business Services USA segment also performed well in Q4 2023, recording revenue of $215 million and Adjusted EBITDA* of $16 million, representing an Adjusted EBITDA margin* of 7%. Business Services Canada experienced slightly positive organic revenue growth that is attributable to some customers now operating at pre-COVID-19 levels.  Business Services USA recorded 10% organic revenue growth which is due to increases in revenue with new customers, and 12% revenue growth that was generated from acquisitions.

The Technical Services segment recorded revenue of $239 million and Adjusted EBITDA* of $14 million, representing an Adjusted EBITDA margin* of 6%. The segment experienced an organic revenue decline of 5% which is attributed to lower project revenues.

Finally, GDI’s Corporate and Other segment recorded revenue of $22 million compared to revenue of $18 million in Q4 2022 with the difference mainly attributable to organic growth generated by GDI’s integrated facility services business (“GDI IFS”) launched at the beginning of 2022.

“I am satisfied with GDI’s overall performance in Q4 and fiscal 2023,” stated Claude Bigras, President & CEO of GDI. “For the full year revenue increased to more than $2.4 billion or 12% over 2022, including organic growth of 8%. Adjusted EBITDA grew in both our Business Services USA and Technical Services segments, and while an expected decline in COVID-related incremental services caused Business Services Canada’s Adjusted EBITDA to decrease year-over-year, the business still generated an Adjusted EBITDA margin of 9% for both the full year and in Q4 2023. Our Business Services USA segment also generated strong results in the fourth quarter with organic growth of 10% and a 14% increase in Adjusted EBITDA. Ainsworth, our Technical Services segment, had a challenging Q4 as it experienced cost overruns on a few large projects in their U.S operations that caused Adjusted EBITDA to fall short of expectations. Ainsworth has been moving away from large projects in certain markets while focusing on increasing the margin profile of project work, and while Q4 was below expectations the segment still delivered Adjusted EBITDA margin of 6% during the quarter.”

“I am happy to report that the working capital management strategies that we began to implement at Ainsworth in Q2 last year are beginning to bear fruit with a $36 million decrease in net working capital between September 30 and December 31, 2023. We expect to continue to see a decline in working capital usage in the upcoming quarters which should result in incrementally positive effects on free cash flows. During Q4, GDI announced the acquisition of the U.S. business services of Atalian operating across 25 States, adding more than 2,500 team members and considerably strengthening GDI’s Business Services platform in the Northeast. Additionally, subsequent to Q4 GDI announced the sale of its Superior Sany Solutions janitorial products distribution business, which is expected to close at the end of Q1 2024. This will enable GDI to allocate more capital to support the growth of its core facility services businesses. GDI is retaining ownership of Superior’s chemical manufacturing business which has attractive growth and margin profiles and has recently seen good success in winning new clients for its white label product offering.”

“I feel that GDI is starting fiscal 2024 in a strong competitive and financial position. We are the largest facility services provider in Canada and among the largest in North America, our reputation is excellent, our culture is entrepreneurial and dynamic and we have a flexible cost structure that enables our business to be resilient. The working capital initiatives we implemented mid-last year are improving our free cash flow generation, our leverage ratios are within our comfort zone, our balance sheet has sufficient capacity to support our growth through acquisition strategy and our pipeline is healthy. I look forward to seeing GDI’s business continue to develop during 2024,” concluded Mr. Bigras.  

ABOUT GDI

GDI is a leading integrated commercial facility services provider which offers a range of services in Canada and the United States to owners and managers of a variety of facility types including office buildings, educational facilities, distribution centers, industrial facilities, healthcare establishments, stadiums and event venues, hotels, shopping centres, airports and other transportation facilities. GDI’s commercial facility services capabilities include commercial janitorial and building maintenance, energy advisory and system optimization, the installation, maintenance and repair of HVAC-R, mechanical, electrical and building automation systems, as well as other complementary services such as janitorial products manufacturing and distribution. GDI’s subordinate voting shares are listed on the Toronto Stock Exchange (TSX:GDI). Additional information on GDI can be found on its website at www.gdi.com.

CAUTION CONCERNING FORWARD-LOOKING STATEMENTS

Certain statements in this press release may constitute forward-looking information within the meaning of securities laws. Forward–looking information may relate to GDI’s future outlook and anticipated events, business, operations, financial performance, financial condition or results and, in some cases, can be identified by terminology such as “may”; “will”; “should”; “expect”; “plan”; “anticipate”; “believe”; “intend”; “estimate”; “predict”; “potential”; “continue”; “foresee”; “ensure” or other similar expressions concerning matters that are not historical facts. In particular, statements regarding GDI’s future operating results and economic performance, and its objectives and strategies are forward-looking statements. These statements are based on certain factors and assumptions including expected growth, results of operations, performance and business prospects and opportunities, which GDI believes are reasonable as of the current date. While management considers these assumptions to be reasonable based on information currently available to the Company, they may prove to be incorrect. It is impossible for GDI to predict with certainty the impact that the current economic uncertainties may have on future results. Forward-looking information is also subject to certain factors, including risks and uncertainties (described in the “Risk Factors” section) that could cause actual results to differ materially from what GDI currently expects. Namely, these factors include risks pertaining to unsuccessful implementation of the business strategy, changes to business structure, inherent operating risks from acquisition activity, failure to integrate an acquired company, decline in commercial real estate occupancy levels, increase in costs which cannot be passed on to customers, labour shortages, disruption in information technology systems and execution issues with Strategic IT projects, increases in interest rates, exchange rate fluctuations, deterioration in economic conditions, increase in competition,  influence of the principal shareholders, loss of key or long-term customers, public procurement laws and regulations, legal proceedings, reputational damage, labour disputes, disputes with franchisees, environmental, social and governance (“ESG”) considerations, goodwill and long-lived assets impairment charges, tax matters, key employees, participation in multi-employer pension plans, legislation or other governmental action, cybersecurity, data confidentiality and data protection, and public perception of our environmental footprint, many of which are beyond the Company’s control. Therefore, future events and results may vary significantly from what management currently foresees. The reader should not place undue importance on forward-looking information and should not rely upon this information as of any other date. While management may elect to, the Company is under no obligation and does not undertake to update or alter this information at any particular time, except as may be required by law. 

December 31, 2023 consolidated financial statements and accompanied Management & Discussion Analysis are filed on www.sedarplus.ca.

GDI INTEGRATED FACILITY SERVICES INC.
Consolidated Statements of Financial Position
December 31, 2023 and 2022
(In millions of Canadian dollars)

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