GDI Integrated Facility Services Inc. Releases its Financial Results for the First Quarter Ended March 31, 2024

• Q1 2024 revenue of $644 million, an increase of $53 million, or 9%, over Q1 2023.
• Q1 2024 Adjusted EBITDA^* of $28 million, representing an Adjusted EBITDA* margin of 4%.
• Q1 2024 net income of $0.4 million, or $0.02 per share compared with $4 million or $0.15 per share for the first quarter of 2023.

LASALLE, QC, May 9, 2024 /CNW/ - GDI Integrated Facility Services Inc. ("GDI" or the "Company") (TSX: GDI) is pleased to announce its financial results for the first quarter ended March 31, 2024.

For the first quarter of 2024:

• Revenue reached $644 million, an increase of $53 million, or 9%, over the first quarter of 2023, comprised of 3% organic growth and 6% growth from acquisitions.
• Adjusted EBITDA^* amounted to $28 million, representing an Adjusted EBITDA* margin of 4%.
• Net income was $0.4 million or $0.02 per share compared to $4 million or $0.15 per share in Q1 2023. The decrease in net income in the first quarter of 2024 compared to 2023 is mainly due to lower operating income of $14 million, which is primarily attributable to an increase in amortization and depreciation expense of $9 million mainly due to a significant reduction in the amortized value of a large customer contract in the quarter, which was partially offset by lower net finance expense of $7 million and lower income tax expense of $3 million.

For the first quarters of 2024 and 2023, the business segments performed as follows:

(in millions of Canadian dollars)	Business Services Canada		Business Services USA		Technical Services		Corporate and Other		Consolidated
	2024	2023	2024	2023	2024	2023	2024	2023	2024	2023
Revenue	145	141	225	177	252	252	22	21	644	591
Organic Growth (Decline)	3 %	(1 %)	10 %	(2 %)	(1 %)	43 %	0 %	17 %	3 %	14 %
Adjusted EBITDA^*	11	14	14	12	8	11	(5)	(4)	28	33
Adjusted EBITDA Margin^*	8 %	10 %	6 %	7 %	3 %	4 %	N/A	N/A	4 %	6 %

GDI's Business Services Canada segment recorded $145 million in revenue in the quarter while generating $11 million in Adjusted EBITDA^*, representing an Adjusted EBITDA margin^* of 8%. GDI's Business Services USA segment performed well in Q1 2024, recording revenue of $225 million and Adjusted EBITDA^* of $14 million, representing an Adjusted EBITDA margin^* of 6%.

Both Business Services segments experienced positive organic revenue growth attributable to new customer contracts, while Business Services USA also recorded 18% revenue growth from the Atalian acquisition.

The Technical Services segment recorded revenue of $252 million and Adjusted EBITDA^* of $8 million, representing an Adjusted EBITDA margin^* of 3% which is due to cost overruns experienced on three large projects in its U.S operations. Excluding the cost overrun of these contracts, the Adjusted EBITDA margin^* would have been 5%.

Finally, GDI's Corporate and Other segment recorded revenue of $22 million compared to revenue of $21 million in Q1 2023 attributable to organic growth generated in the U.S. manufacturing operations.

"While our results were impacted by seasonal factors and one-time events, I am relatively satisfied with GDI's performance in the first quarter of fiscal 2024," stated Claude Bigras, President & CEO of GDI. "Our Business Services Canada segment generated modest organic growth and an Adjusted EBITDA margin^* at the low end of our annualized target range as Q1 is traditionally this business segment's seasonally weakest quarter. The first quarter of 2023 benefited from the tail end of COVID extra services at higher margins making quarter-over-quarter comparisons less meaningful. We continue to see a stabilization in occupancy levels in the Class A office market in Canada and expect our Business Services Canada segment to generate Adjusted EBITDA margins^* higher than pre-COVID levels over the near-to-mid term. Our Business Services USA segment had a good quarter, generating revenue growth of 27%, including an organic growth rate of 10%. The segment's Adjusted EBITDA margin* was temporarily impacted as we continue to work on margin improvement initiatives in the Atalian USA business which was acquired on November 1, 2023. We expect Business Services USA margins to improve starting in the second quarter of this year. Finally, as we had pre-announced in our fourth quarter results, Adjusted EBITDA^* in our Technical Services segment was negatively impacted due to the completion of large projects in Ainsworth's U.S. business that suffered cost overruns which also impacted performance in Q4 last year. It is important to reiterate that the challenges this segment faced over the past two quarters resulted from three isolated projects in our Ainsworth's U.S. business which have now substantially been closed out, and the outlook for our Ainsworth business for the remainder of 2024 is quite positive," stated Mr. Bigras.

"I am also pleased to announce that during Q1 and subsequent to quarter-end GDI continued to execute on its commitment to grow strategically and profitability while creating value for our stakeholders. On April 1^st we concluded the sale our Superior Solutions Ltd. janitorial products distribution business. In doing so we generated strong returns on the capital we invested in growing this business and are redeploying the proceeds in our core facility services business that are generating attractive returns. We also completed the acquisition of the Atlantic Canadian refrigeration services business of Hussmann Canada Inc. which has strengthened Ainsworth's leading market position in Atlantic Canada. Additionally, on May 1, 2024, we concluded the acquisition of Paramount Building Services, a commercial janitorial services provider with over 500 employees and offices in Phoenix, AZ and Minneapolis, MN. I would like to take this opportunity to welcome the teams at Hussmann and Paramount to the GDI family."

"While I am satisfied with our results in Q1, I believe that GDI can perform better. We are focusing on initiatives to improve sales and operations within our Business Services Canada segment, improve margins at Ainsworth and increase efficiency in working capital management across all of our business segments. We remain committed to generating at least $30 million of working capital reduction through the remainder of 2024. Our balance sheet at the end of Q1 remained strong, our leverage ratios remain within our comfort zone and we are delivering on our focused and disciplined growth through acquisition strategy. I am looking forward to the remainder of 2024," concluded Mr. Bigras.

^*

The terms "Adjusted EBITDA" and "Adjusted EBITDA Margin" do not have standardized definitions prescribed by International Financial Reporting Standards and therefore, may not be comparable to similar measures presented by other companies. "Adjusted EBITDA" is defined as operating income before depreciation and amortization, transaction, reorganization and other costs, share-based compensation and strategic information technology projects configuration and customization costs. The Adjusted EBITDA Margin is calculated by dividing Adjusted EBITDA by revenues. For more details and for a reconciliation of that measure to the most directly comparable IFRS measure, consult the "Operating and Financial Results" section of the Company's Management Discussion & Analysis (MD&A).

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. 

For more information, please contact:		Investors, Analysts and Media   David Hinchey Executive Vice President of Corporate Development Telephone: [phone]
Analyst Conference Call:		May 10, 2024 at 7:30 A.M. (ET)   Kindly note that Investors and Media representatives may attend as listeners only.
		Please use the following dial-in numbers to have access to the conference call by dialing 10 minutes before the beginning of the conference: North America Toll-Free: 1-888-664-6392 Local: 416-764-8659 (Toronto) or 514-225-6995 (Montreal) Confirmation Code: 86139318 RapidConnect URL: https://emportal.ink/3S8DCWY
		A rebroadcast of the conference call will be available until May 17, 2024 by dialing: North America Toll-Free: 1-888-390-0541 Local: 416-764-8677 (Toronto) Confirmation Code 139318 #

March 31, 2024 unaudited condensed consolidated interim financial statements and accompanied Management & Discussion Analysis are filed on www.sedarplus.ca.

GDI INTEGRATED FACILITY SERVICES INC.
Condensed Consolidated Interim Statements of Financial Position
(Unaudited) (In millions of Canadian dollars)

	As at March 31, 2024	As at December 31, 2023
Assets
Current assets
Cash	29	17
Trade and other receivables and contract assets	600	571
Current tax assets	8	11
Inventories	45	42
Other financial assets	14	13
Prepaid expenses and other	23	11
Derivatives	‒	1
Total current assets	719	666
Non-current assets
Property, plant and equipment	126	127
Intangible assets	119	131
Goodwill	363	356
Other assets	14	12
Total non-current assets	622	626
Total assets	1,341	1,292
Liabilities and Shareholders' Equity
Current liabilities
Bank indebtedness	34	14
Trade and other payables	338	298
Provisions	32	32
Contract liabilities	33	34
Current tax liabilities	5	2
Current portion of long-term debt	41	36
Total current liabilities	483	416
Non-current liabilities
Long-term debt	374	384
Other payables	5	5
Deferred tax liabilities	24	32
Total non-current liabilities	403	421
Shareholders' equity
Share capital	381	380
Retained earnings	68	68
Contributed surplus	2	2
Accumulated other comprehensive income	4	5
Total shareholders' equity	455	455
Total liabilities and shareholders' equity	1,341	1,292

GDI INTEGRATED FACILITY SERVICES INC.
Condensed Consolidated Interim Statements of Comprehensive Income
(Unaudited) (In millions of Canadian dollars, except for earnings per share)

Three-month periods ended March 31,
	2024	2023
Revenues	644	591
Cost of services	538	483
Selling and administrative expenses	80	77
Transaction, reorganization and other costs	1	1
Strategic information technology projects configuration and customization costs	1	1
Amortization of intangible assets	12	5
Depreciation of property, plant and equipment	14	12
Operating (loss) income	(2)	12
Net finance (income) expense	(1)	6
(Loss) income before income taxes	(1)	6
Income tax (benefit) expense	(1)	2
Net income	‒	4
Other comprehensive loss
Gains (losses) that are or may be reclassified to earnings:
Foreign currency translation differences for foreign operations	6	‒
Hedge of net investments in foreign operations, net of tax of nil	(6)	‒
Cash flow hedges, effective portion of changes in fair value, net of tax of nil (2023 ‒ nil)	(1)	(1)
	(1)	(1)
Total comprehensive (loss) income	(1)	3
Earnings per share:
Basic	0.02	0.15
Diluted	0.02	0.15

GDI INTEGRATED FACILITY SERVICES INC.
Condensed Consolidated Interim Statements of Changes in Equity
Three-month periods ended March 31, 2024 and 2023
(Unaudited) (In millions of Canadian dollars, except for number of shares)

	Share capital		Retained earnings	Contributed surplus		Accumulated other comprehensive income ^(1)		Total
	Number (in thousands of shares)	Amount
Balance, January 1, 2023	23,414	379	49	4		7		439
Net income	–	–	4	–		–		4
Other comprehensive loss	–	–	–	–		(1)		(1)
Total comprehensive income for the period	–	–	4	–		(1)		3
Transactions with owners of the Company:
Stock options exercised	20	–	–	–		–		–
Balance, March 31, 2023	23,434	379	53	4		6		442
Balance, January 1, 2024	23,414	380	68	2		5		455
Net income	–	–	–	–		–		–
Other comprehensive loss	–	–	–	–		(1)		(1)
Total comprehensive income for the period	–	–	–	–		(1)		(1)
Transactions with owners of the Company:
Stock options exercised	35	1	–	–		–		1
Balance, March 31, 2024	23,449	381	68	2		4		455

GDI INTEGRATED FACILITY SERVICES INC.
Condensed Consolidated Interim Statements of Cash Flows
(Unaudited) (In millions of Canadian dollars)

Three-month periods ended March 31,
	2024	2023
Cash flows from (used in) operating activities
Net income	–	4
Adjustments for:
Depreciation and amortization	26	17
Net finance (income) expense	(1)	6
Income tax (benefit) expense	(1)	2
Income taxes paid	–	(1)
Net changes in non-cash operating assets and liabilities	(3)	(37)
Net cash from (used in) operating activities	21	(9)
Cash flows from (used in) financing activities
Proceeds from issuance of long-term debt	99	102
Repayment of long-term debt	(107)	(68)
Payment of lease liabilities	(9)	(8)
Interest paid	(7)	(4)
Other	1	–
Net cash (used in) from financing activities	(23)	22
Cash flows (used in) investing activities
Additions to property, plant and equipment	(4)	(4)
Additions to intangible assets	(1)	(1)
Other	2	–
Net cash used in investing activities	(3)	(5)
Foreign exchange loss on cash held in foreign currencies	(3)	–
Net change in cash (bank indebtedness)	(8)	8
Cash (bank indebtedness), beginning of period:
Cash	17	7
Bank indebtedness	(14)	(10)
	3	(3)
(Bank indebtedness) cash, end of period:
Cash	29	6
Bank indebtedness	(34)	(1)
	(5)	5

GDI INTEGRATED FACILITY SERVICES INC.
Segmented information
(In millions of Canadian dollars) 

	Three-month period ended March 31, 2024
	Business Services Canada	Business Services USA	Technical Services	Corporate and Other	Total
Recurring/contractual services	126	203	28	7	364
On-call services	9	22	73	1	105
Project	–	–	151	–	151
Manufacturing and distribution	–	–	–	17	17
Other revenues	7	–	–	–	7
Total external revenues	142	225	252	25	644
Inter-segment revenues	3	–	–	(3)	–
Revenues	145	225	252	22	644
Income (loss) before income taxes	8	4	(1)	(12)	(1)
Net finance expense	–	–	(1)	-	(1)
Operating income (loss)	8	4	(2)	(12)	(2)
Depreciation and amortization	3	9	10	4	26
Transaction, reorganization, and other costs	–	–	–	–	1
Share-based compensation ^(1)	–	–	–	2	2
Strategic information technology projects configuration and customization costs	–	–	–	1	1
Adjusted EBITDA	11	14	8	(5)	28
Total assets	269	363	545	164	1,341
Total liabilities	73	118	256	439	886
Additions to property, plant and equipment	2	1	8	1	12
Additions to intangible assets	–	–	–	1	1
Goodwill recorded on business acquisition ^(2)	–	3	–	–	3

^(1)	^Includes stock option, performance share unit and restricted share unit plans.
^(2)	^During the three-month period ended March 31, 2024, the goodwill was also increased by foreign currency translation for $4.

GDI INTEGRATED FACILITY SERVICES INC.
Segmented information
(In millions of Canadian dollars)

	Three-month period ended March 31, 2023
	Business Services Canada	Business Services USA	Technical Services	Corporate and Other	Total
Recurring/contractual services	120	168	20	6	314
On-call services	11	9	75	1	96
Project	–	–	157	–	157
Manufacturing and distribution	–	–	–	16	16
Other revenues	7	–	–	1	8
Total external revenues	138	177	252	24	591
Inter-segment revenues	3	–	–	(3)	–
Revenues	141	177	252	21	591
Income (loss) before income taxes	11	8	2	(15)	6
Net finance expense	–	–	1	5	6
Operating income (loss)	11	8	3	(10)	12
Depreciation and amortization	3	4	8	2	17
Transaction, reorganization, and other costs	–	–	–	1	1
Share-based compensation ^(1)	–	–	–	2	2
Strategic information technology projects configuration and customization costs	–	–	–	1	1
Adjusted EBITDA	14	12	11	(4)	33
Total assets ^(2)	267	359	544	122	1,292
Total liabilities ^(2)	69	109	253	406	837
Additions to property, plant and equipment	1	2	7	3	13
Additions to intangible assets	–	–	–	1	1

^(1)	^Includes stock option, performance share unit and restricted share unit plans.
^(2)	^As at December 31, 2023

GDI INTEGRATED FACILITY SERVICES INC.
Business acquisitions

Acquisition date	Company acquired	Location	Segment reporting	Purchase price allocation status
2024 Acquisition
None
2023 Acquisitions
June 1, 2023	React Technical, Inc. ("React")	New York, New York	Technical Services	Completed
November 1, 2023	La Financière Atalian ("Atalian")	Multi-sites in USA	Business Services USA	Preliminary

On February 1, 2024, the Company entered into a definitive agreement to complete the sale of its Superior Solutions LP ("Superior") janitorial products distribution business. Closing of the transaction is subject to closing conditions. Superior's chemical manufacturing business was not included in the transaction.

Subsequent event

On April 1, 2024, the Company completed the sale of its Superior janitorial products distribution business.

On May 1, 2024, the Company concluded the acquisition of Paramount Building Services, a commercial janitorial services provider with over 500 employees and offices in Phoenix, AZ and Minneapolis, MN.

GDI INTEGRATED FACILITY SERVICES INC.
Supplementary Quarterly Financial Information
Three-month periods
(Unaudited) (In millions of Canadian dollars, except per share data) 

Three months ended
(in millions of Canadian dollars, except per share data) ^(1)	March 2024	December 2023	September 2023	June 2023
Revenue	644	622	615	609
Operating income	(2)	9	16	10
Depreciation and amortization	26	22	19	19
Transaction, reorganization and other costs	1	2	‒	1
Share-based compensation	2	2	2	3
Strategic information technology projects configuration and customization costs	1	2	2	1
Adjusted EBITDA ^(2)	28	37	39	34
Net income for the period	‒	6	8	1
Earnings per share
Basic	0.02	0.26	0.35	0.04
Diluted	0.02	0.25	0.35	0.04

Three months ended
(in millions of Canadian dollars, except per share data) ^(1)	March 2023	December 2022	September 2022	June 2022
Revenue	591	588	563	526
Operating income	12	15	19	17
Depreciation and amortization	17	22	18	18
Transaction, reorganization and other costs	1	1	1	1
Share-based compensation	2	3	2	1
Strategic information technology projects configuration and customization costs	1	1	2	1
Adjusted EBITDA ^(2)	33	42	42	38
Net income for the period	4	10	11	10
Earnings per share
Basic	0.15	0.41	0.45	0.40
Diluted	0.15	0.40	0.44	0.40

(1)

The differences between the quarters are mainly the results of business acquisitions, as well as seasonality in the Technical Services segment. The quarters from June 2022 to June 2023 were also favorably impacted from COVID-19 related additional services that were rendered by our Business Services business, which continuously decreased each quarter.

SOURCE GDI Integrated Facility Services Inc.

Investors, Analysts and Media, David Hinchey, Executive Vice President of Corporate Development, Telephone: [phone]