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.

___________________________

* 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).

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

(in millions of Canadian dollars)	Business Services Canada ^(1)		Business Services USA ^(1)		Technical Services		Corporate and Other ^(2)		Consolidated
	2023	2022	2023	2022	2023	2022	2023	2022	2023	2022
Revenue	146	144	215	176	239	250	22	18	622	588
Organic Growth (Decline)	1 %	3 %	10 %	(2 %)	(5 %)	20 %	22 %	39 %	2 %	10 %
Adjusted EBITDA^* ^(3)	13	16	16	14	14	17	(6)	(5)	37	42
Adjusted EBITDA Margin^*	9 %	11 %	7 %	8 %	6 %	7 %	N/A	N/A	6 %	7 %

(1)	"Business Services Canada" formerly "Janitorial Canada" and "Business Services USA" formerly "Janitorial USA".
(2)	Comparative results have been recast to reflect a change in our reporting segments, as former Complementary Services and Corporate and eliminations segments are now grouped under Corporate and Other.
(3)	Adjusted EBITDA definition exclude the strategic information technology projects configuration and customization costs. 2022 results were recast to align with the revised definition.

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:

(in millions of Canadian dollars)	Business Services Canada ^(1)		Business Services USA ^(1)		Technical Services		Corporate and Other ^(2)		Consolidated
	2023	2022	2023	2022	2023	2022	2023	2022	2023	2022
Revenue	578	572	756	678	1,024	851	79	71	2,437	2,172
Organic Growth (Decline)	1 %	7 %	2 %	8 %	18 %	10 %	10 %	29 %	8 %	9 %
Adjusted EBITDA^* ^(3)	54	71	55	51	53	47	(19)	(13)	143	156
Adjusted EBITDA Margin^*	9 %	12 %	7 %	8 %	5 %	6 %	N/A	N/A	6 %	7 %

(1)	"Business Services Canada" formerly "Janitorial Canada" and "Business Services USA" formerly "Janitorial USA".
(2)	Comparative results have been recast to reflect a change in our reporting segments, as former Complementary Services and Corporate and eliminations segments are now grouped under Corporate and Other.
(3)	Adjusted EBITDA definition now exclude the strategic information technology projects configuration and customization costs. 2022 results were recast to align with the revised definition.

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.  

_______________________

* 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. 

Analyst Conference Call:	February 29, 2024 at 9:00 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:  72270118
	A rebroadcast of the conference call will be available until March 7, 2024 by dialing: North America Toll-Free: 1-888-390-0541 Local: 416-764-8677 (Toronto) Confirmation Code 271982 #

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)

	2023	2022
Assets
Current assets
Cash	17	7
Trade and other receivables and contract assets	571	524
Current tax assets	11	7
Inventories	42	45
Other financial assets	13	11
Prepaid expenses and other	11	9
Derivatives	1	3
Total current assets	666	606
Non-current assets
Property, plant and equipment	127	122
Intangible assets	131	139
Goodwill	356	344
Derivatives	‒	1
Other assets	12	8
Total non-current assets	626	614
Total assets	1,292	1,220
Liabilities and Shareholders' Equity
Current liabilities
Bank indebtedness	14	10
Trade and other payables	298	286
Provisions	32	26
Contract liabilities	34	30
Current tax liabilities	2	2
Current portion of long-term debt	36	43
Total current liabilities	416	397
Non-current liabilities
Long-term debt	384	345
Long-term payables	5	5
Deferred tax liabilities	32	34
Total non-current liabilities	421	384
Shareholders' equity
Share capital	380	379
Retained earnings	68	49
Contributed surplus	2	4
Accumulated other comprehensive income	5	7
Total shareholders' equity	455	439
Total liabilities and shareholders' equity	1,292	1,220

GDI INTEGRATED FACILITY SERVICES INC.
Consolidated Statements of Comprehensive Income
Years ended December 31, 2023 and 2022
(In millions of Canadian dollars, except for earnings per share)

	2023	2022
Revenues	2,437	2,172
Cost of services	1,987	1,733
Selling and administrative expenses	316	291
Transaction, reorganization and other costs	4	3
Strategic information technology projects configuration and customization costs	6	3
Amortization of intangible assets	24	28
Depreciation of property, plant and equipment	53	46
Operating income	47	68
Net finance expense	18	19
Income before income taxes	29	49
Income tax expense	10	13
Net income	19	36
Other comprehensive (loss) income
(Losses) gains that are or may be reclassified to earnings:
Foreign currency translation differences for foreign operations	(7)	19
Hedge of net investments in foreign operations, net of tax of nil	7	(16)
Cash flow hedges, effective portion of changes in fair value, net of tax of $1        (($1) in 2022)	(2)	3
	(2)	6
Total comprehensive income	17	42
Earnings per share:
Basic	0.80	1.57
Diluted	0.79	1.53

GDI INTEGRATED FACILITY SERVICES INC.
Consolidated Statements of Changes in Equity
Years ended December 31, 2023 and 2022
(In millions of Canadian dollars)

	Share Capital		Retained earnings	Contributed surplus	Accumulated other comprehensive income (loss)	Total
	Number (in thousands of shares)	Amount
Balance, January 1, 2022	23,121	371	13	6	1	391
Net income	‒	‒	36	‒	‒	36
Other comprehensive income	‒	‒	‒	‒	6	6
Total comprehensive income for the year	‒	‒	36	‒	6	42
Transactions with owners of the Company:
Share-based compensation	‒	‒	‒	1	‒	1
Stock options exercised	340	9	‒	(2)	‒	7
Shares repurchased for cancellation	(47)	(1)	‒	(1)	‒	(2)
Balance, December 31, 2022	23,414	379	49	4	7	439
Net income	‒	‒	19	‒	‒	19
Other comprehensive loss	‒	‒	‒	‒	(2)	(2)
Total comprehensive income for the year	‒	‒	19	‒	(2)	17
Transactions with owners of the Company:
Share-based compensation	‒	‒	‒	1	‒	1
Stock options exercised	98	2	‒	‒	‒	2
Shares repurchased for cancellation	(98)	(1)	‒	(3)	‒	(4)
Balance, December 31, 2023	23,414	380	68	2	5	455

GDI INTEGRATED FACILITY SERVICES INC.
Consolidated Statements of Cash Flows
Years ended December 31, 2023 and 2022
(In millions of Canadian dollars)

	2023	2022
Cash flows from (used in) operating activities
Net income	19	36
Adjustments for:
Depreciation and amortization	77	74
Equity portion of share-based compensation	1	1
Net finance expense	18	19
Income tax expense	10	13
Income taxes paid	(14)	(23)
Net changes in non-cash operating assets and liabilities	(46)	(70)
Net cash from operating activities	65	50
Cash flows from (used in) financing activities
Proceeds from issuance of long-term debt	401	217
Repayment of long-term debt	(370)	(192)
Payment of lease liabilities	(31)	(29)
Interest paid	(23)	(11)
Other	(2)	5
Net cash used in financing activities	(25)	(10)
Cash flows from (used in) investing activities
Business acquisitions, net of cash and bank indebtedness acquired	(11)	(37)
Additions to property, plant and equipment	(21)	(19)
Additions to intangible assets	(6)	(7)
Other	1	‒
Net cash used in investing activities	(37)	(63)
Foreign exchange gain (loss) on cash held in foreign currencies	3	(1)
Net change in cash (bank indebtedness)	6	(24)
(Bank indebtedness) cash, beginning of year:
Cash	7	24
Bank indebtedness	(10)	(3)
	(3)	21
Cash (bank indebtedness), end of year:
Cash	17	7
Bank indebtedness	(14)	(10)
	3	(3)

GDI INTEGRATED FACILITY SERVICES INC.
Segmented information
Years ended December 31, 2023 and 2022
(In millions of Canadian dollars)

	2023
	Business Services Canada	Business Services USA	Technical Services	Corporate and Other ^(1)	Total
Recurring/contractual services	498	719	83	18	1,318
On-call services	45	37	291	5	378
Projects	–	–	650	–	650
Manufacturing and distribution	–	–	–	62	62
Other revenues	24	–	–	5	29
Total external revenues	567	756	1,024	90	2,437
Inter-segment revenues	11	–	–	(11)	–
Revenues	578	756	1,024	79	2,437
Income (loss) before income taxes	42	36	17	(66)	29
Net finance expense	–	1	(1)	18	18
Operating income (loss)	42	37	16	(48)	47
Depreciation and amortization	11	18	36	12	77
Transaction, reorganization, and     other costs	1	–	1	2	4
Share-based compensation ^(2)	–	–	–	9	9
Strategic information technology projects      configuration and customization costs	–	–	–	6	6
Adjusted EBITDA ^(3)	54	55	53	(19)	143
Total assets	267	359	544	122	1,292
Total liabilities	69	109	253	406	837
Additions to property, plant and equipment	8	13	32	8	61
Additions to intangible assets	–	10	2	6	18
Goodwill recorded on business      acquisition	–	14	2	–	16

(1)	Comparative results have been recast to reflect a change in our reporting segments, as former Complementary Services and Corporate and eliminations segments are now grouped under Corporate and Other.
(2)	Includes stock option, performance share unit and restricted share unit plans.
(3)	Adjusted EBITDA definition now excludes the strategic information technology projects configuration and customization costs.

GDI INTEGRATED FACILITY SERVICES INC.
Segmented information
Years ended December 31, 2023 and 2022
(In millions of Canadian dollars)

	2022
	Business Services Canada	Business Services USA	Technical Services	Corporate and Other ^(1)	Total
Recurring/contractual services	473	624	90	15	1,202
On-call services	62	53	241	3	359
Projects	–	–	511	–	511
Manufacturing and distribution	–	–	–	63	63
Other revenues	28	1	7	1	37
Total external revenues	563	678	849	82	2,172
Inter-segment revenues	9	–	2	(11)	–
Revenues	572	678	851	71	2,172
Income (loss) before income taxes	59	29	8	(47)	49
Net finance expense	(1)	6	3	11	19
Operating income (loss)	58	35	11	(36)	68
Depreciation and amortization	13	16	35	10	74
Transaction, reorganization, and     other costs	–	–	1	2	3
Share-based compensation ^(2)	–	–	–	8	8
Strategic information technology projects configuration and customization costs	–	–	–	3	3
Adjusted EBITDA ^(3)	71	51	47	(13)	156
Total asset	267	320	515	118	1,220
Total liabilities	81	68	232	400	781
Additions to property, plant      and equipment	8	9	24	8	49
Additions to intangible assets	–	2	10	7	19
Goodwill recorded on business      acquisition	–	6	27	–	33

(1)	Comparative results have been recast to reflect a change in our reporting segments, as former Complementary Services and Corporate and eliminations segments are now grouped under Corporate and Other.
(2)	Includes stock option, performance share unit and restricted share unit plans.
(3)	The above table was revised to reflect the fact that the Adjusted EBITDA definition now exclude the strategic information technology projects configuration and customization costs.

GDI INTEGRATED FACILITY SERVICES INC.
Business acquisitions
Years ended December 31, 2023 and 2022
(In millions of Canadian dollars)

Acquisition date	Company acquired	Location	Segment reporting	Purchase price allocation status
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
2022 Acquisitions
January 21, 2022	Gestion E.C.I. inc. and its subsidiaries ("Énergère")	Montréal, Quebec	Technical Services	Completed
March 1, 2022	M.T.I. Mechanical Trade Industries Ltd. and its subsidiary ("MTI")	Markham, Ontario	Technical Services	Completed
September 1, 2022	Cascadian Building Maintenance, Ltd. ("Cascadian")	Bellevue, Washington	Business Services USA	Completed

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)	December 2023	September 2023	June 2023	March 2023
Revenue	622	615	609	591
Operating income	9	16	10	12
Depreciation and amortization	22	19	19	17
Transaction, reorganization and other costs	2	‒	1	1
Share-based compensation	2	2	3	2
Strategic information technology projects      configuration and customization costs	2	2	1	1
Adjusted EBITDA ^(2)	37	39	34	33
Net income for the period	6	8	1	4
Earnings per share
Basic	0.26	0.35	0.04	0.15
Diluted	0.25	0.35	0.04	0.15
Three months ended (in millions of Canadian dollars, except per share data) ^(1)	December 2022	September 2022	June 2022	March 2022
Revenue	588	563	526	495
Operating income	15	19	17	18
Depreciation and amortization	22	18	18	16
Transaction, reorganization and other costs	1	1	1	‒
Share-based compensation	3	2	1	2
Strategic information technology projects      configuration and customization costs	1	1	1	‒
Adjusted EBITDA ^(2)	42	41	38	36
Net income for the period	10	11	10	7
Earnings per share
Basic	0.41	0.45	0.40	0.30
Diluted	0.40	0.44	0.40	0.30

(1)	The differences between the quarters are mainly the results of business acquisitions, as well as seasonality in the Technical Services segment.
(2)	Adjusted EBITDA definition now exclude the strategic information technology projects configuration and customization costs. This change has no impact on the three-month period ended March 31, 2022.

SOURCE GDI Integrated Facility Services Inc.

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