GDI Integrated Facility Services Inc. Releases its Financial Results for the Second Quarter Ended June 30, 2020

• Q2 2020 revenue of $326.7 million - an increase of $14.0 million or 4.4% over Q2 2019.
• Q2 2020 Adjusted EBITDA¹ of $22.5 million - an increase of $4.0 million, or 21.3%, over Q2 2019.
• Q2 2020 net income of $13.5 million or $0.63 per share compared with $2.1 million or $0.10 per share in the second quarter of 2019.

LASALLE, QC, Aug. 6, 2020 /CNW Telbec/ - GDI Integrated Facility Services Inc. ("GDI" or the "Company") (TSX: GDI) is pleased to announce its financial results for the second quarter ended June 30, 2020.

For the second quarter ended June 30, 2020:

• Revenue reached $326.7 million, an increase of $14.0 million, or 4.4%, over the second quarter of 2019. Organic decline in the second quarter of 2020 was 9.8%, offset by revenue growth coming primarily from acquisition. The organic decline was driven by COVID-19 pandemic related impacts.
  
  
• Adjusted EBITDA¹ amounted to $22.5 million, an increase of $4.0 million, or 21.3%, over the second quarter of 2019.
  
  
• Net income was $13.5 million or $0.63 per share compared to net income of $2.1 million or $0.10 per share in Q2 2019.
  
  
• On June 30, 2020, GDI exercised its right to redeem all of its issued and outstanding 5.00% convertible unsecured subordinated debentures maturing in December 2021. Following GDI's exercise of its redemption right and during the 30-day notice period, holders of an aggregate notional amount of $25.7 million in debentures exercised their conversion right and 1,057,975 subordinate voting shares in the capital of GDI were issued. On July 30, 2020, GDI redeemed the remaining non-converted aggregate notional amount of $0.5 million in debentures by paying holders a redemption price in cash equal to the principal amount of the debentures, plus accrued and unpaid interest.
  
  
• Long-term debt decreased by $23.2 million from $264.4 million on March 31, 2020 to $241.2 million on June 30, 2020.

For the second quarter of 2020 and 2019, the business segments performance was as follows:

(in thousands of Canadian dollars)	Janitorial Canada		Janitorial USA		Technical services		Complementary services		Consolidated
	2020	2019	2020	2019	2020	2019	2020	2019	2020	2019
Revenue	118,956	132,613	80,359	80,121	107,362	87,268	25,233	19,520	326,732	312,756
Organic growth (decline)	(11.0%)	0.7%	(5.8%)	27.8%	(22.6%)	4.7%	34.2%	3.6%	(9.8%)	7.0%
Adjusted EBITDA^1	15,165	8,005	6,884	6,819	84	4,739	4,289	1,574	22,544	18,584
Adjusted EBITDA margin^1	12.7%	6.0%	8.6%	8.5%	0.1%	5.4%	17.0%	8.1%	6.9%	5.9%

For the six-month period ended June 30, 2020:

• Revenue reached $681.6 million, an increase of $63.5 million, or 10.2%, compared to the corresponding period of 2019. Organic decline was 3.0%, offset by revenue growth coming primarily from acquisition. The organic decline was driven by COVID-19 pandemic related impacts.
  
  
• Adjusted EBITDA¹ amounted to $42.6 million, an increase of $6.1 million, or 16.6%, over the corresponding period of 2019.
  
  
• Net income was $17.8 million or $0.83 per share, compared to $3.6 million, or $0.17 per share for the corresponding period of 2019.

For the six-month periods ended June 30, 2020 and 2019, the business segments performance was as follows:

(in thousands of Canadian dollars)	Janitorial Canada		Janitorial USA		Technical services		Complementary services		Consolidated
	2020	2019	2020	2019	2020	2019	2020	2019	2020	2019
Revenue	258,149	265,488	163,479	159,143	229,037	167,932	41,870	39,384	681,584	618,070
Organic growth (decline)	(3.4%)	0.5%	(2.2%)	27.6%	(8.8%)	5.5%	15.3%	11.1%	(3.0%)	7.4%
Adjusted EBITDA^1	24,548	17,593	13,025	12,957	4,769	7,875	5,688	2,676	42,581	36,526
Adjusted EBITDA margin^1	9.5%	6.6%	8.0%	8.1%	2.1%	4.7%	13.6%	6.8%	6.2%	5.9%

GDI delivered another very good quarter in Q2 2020 despite the impact of COVID-19, recording $326.7 million of revenue and Adjusted EBITDA¹ of $22.5M, increases of 4.4% and 21.3% respectively compared to the second quarter of 2019. In the first half of 2020 GDI recorded revenue and Adjusted EBITDA¹ of $681.6 million and $42.6 million, increases of 10.2% and 16.6% respectively, over the corresponding period of 2019.

Due to the COVID-19 pandemic, the second quarter of 2020 was extremely challenging for commercial real estate. GDI's business segments were affected differently based on both region and market sector. The Janitorial Canada segment experienced a revenue impact as certain client facilities were temporarily closed due to the COVID-19 pandemic, while profitability was positively impacted as many facilities that remained open required additional  services and specialty services, such as higher frequency cleaning, disinfection and decontamination services. The COVID-19 pandemic affected the Janitorial USA segment differently due to a different end market mix, however the business was able to maintain revenue and profitability that was comparable to last year despite the market disruption created by the pandemic. GDI's Technical Services segment was the most impacted by COVID-19 as the construction industries in Quebec and Ontario were temporarily shut down and certain projects were moved into future quarters. Ainsworth's backlog currently stands close to its highest point in history, the business has been experiencing a strong rebound in service work, and GDI expects that business will return to normal activity levels as the different regional economies progressively reopen. The Complementary Services segment, comprising of GDI's manufacturing and distribution business, had an exceptional quarter. Large market demand created shortages of supply for products such as gloves, masks, hand sanitizer and disinfectants, and the businesses management team was able to secure significant levels of supply of most of these products to satisfy the needs of GDI and its clients, while also generating strong sales volumes to a number of new clients.   

"Going forward, we believe that the worst of the COVID-19 pandemic is behind us. Although the number of reported cases is increasing in certain regions, we feel that regional governments, businesses, and real estate owners are better prepared to manage through the next stages of the pandemic," stated Mr. Claude Bigras, President & CEO of GDI. "As buildings continue to reopen and occupancy rates rise, we expect that the base level of services required by our clients will be higher than it was prior to the COVID-19 pandemic, and we expect the level of specialty work experienced during the peak of the pandemic will decline. While there remains a high degree of uncertainty over the impact that the COVID-19 pandemic will have on the real estate industry for the remainder of 2020, we worked very hard during the pandemic to differentiate GDI as a leader in the marketplace and feel that we are well positioned as a key advisor to our clients as the essential services rules are being lifted and occupancy rates continue to rise," stated Mr. Bigras.

"Early in the second quarter, we took proactive measures to reduce costs and mitigate the impact of business volume declines to preserve profitability and ensure our financial health. I am very happy with the results we generated in the quarter. GDI's balance sheet remains healthy, our leverage ratios are well within our comfort zone and we are in a strong financial position.  I would like to thank our dedicated employees who have been working on the front lines of this pandemic. All of you have risen to the occasion to help keep our clients safe and our business operating effectively in these challenging times. I am very proud of your efforts. I am extremely proud to see how our entire team has been stepping up to the challenge," 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, industrial facilities, healthcare establishments, stadiums and event venues, hotels, shopping centres, distribution facilities, airports and other transportation facilities. GDI's commercial facility services capabilities include commercial janitorial and building maintenance, 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. 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:	August 7, 2020 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: 74327669
	A rebroadcast of the conference call will be available until August 14, 2020 by dialing:
	North America Toll-Free: 1-888-390-0541
	Local: 416-764-8677 (Toronto)
	Confirmation Code: 327669 #

June 30, 2020 unaudited condensed consolidated interim financial statements and accompanied Management & Discussion Analysis are filed on www.sedar.com. 

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¹ 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, Canadian Emergency Wage Subsidy, transaction, reorganization and other costs and share-based compensation. 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).

SOURCE GDI Integrated Facility Services Inc.

Investors, Analysts and Media, David Hinchey, Senior Vice President, Strategic Development, Telephone: [phone] ext. 282

Related Links

https://gdi.com/