Mr. Jay Hennick reports

FIRSTSERVICE REPORTS RECORD FIRST QUARTER RESULTS

FirstService Corp. has released results for its first quarter ended March 31, 2015. All amounts are in United States dollars and all percentage revenue variances are calculated on a local currency basis.

Revenues for the first quarter were $608.0-million, up 17 per cent relative to the same quarter in the prior year, adjusted EBITDA (earnings before interest, taxes, depreciation and amortization) was $23.9-million, up 7 per cent from $22.3-million, and adjusted EPS (earnings per share) was 11 cents, up 38 per cent versus eight cents reported in the prior-year quarter. GAAP (generally accepted accounting principles) EPS from continuing operations was 17 cents per share in the quarter, versus a loss of 15 cents in the same quarter a year ago.

"FirstService achieved record results for the seasonally slow first quarter, continuing the momentum from the prior fiscal year, despite currency translation headwinds. Each of our service lines generated solid revenue growth and is well positioned to deliver continued growth in revenues, EBITDA and earnings per share for the balance of the year," said Jay S. Hennick, founder and chief executive officer of FirstService. "Last week, shareholders overwhelmingly approved a proposal to separate FirstService into two independent, public companies: Colliers International, a global leader in commercial real estate; and new FirstService Corp. comprised of the FirstService Residential and FirstService Brands business units. Subject to final regulatory and court approval, we anticipate completing the tax-free distribution to shareholders on June 1, 2015. We are excited about the future prospects for both companies. Stand-alone, each will have sharper focus, more flexibility and be better able to deliver value to shareholders," he concluded.

Segmented quarterly results

Colliers International revenues totalled $335.7-million for the first quarter, compared with $299.5-million in the prior-year quarter, up 22 per cent on a local currency basis. The revenue increase comprised 11-per-cent internal growth and 11-per-cent growth from recent acquisitions. Internal growth was led by the Americas region which experienced strong gains in leasing activity, and the EMEA (Europe, Middle East and Africa) region which reported gains in both project management and leasing activity. Adjusted EBITDA for the seasonally slow quarter was $16.3-million, versus $15.8-million reported in the prior-year quarter.

FirstService Residential revenues were $225.8-million for the first quarter, up 11 per cent from $204.8-million in the prior quarter. Internal revenue growth was 8 per cent, attributable to strong new property management contract wins. Adjusted EBITDA for the quarter was $9.3-million, up 22 per cent from $7.6-million in the prior-year period.

FirstService Brands revenues for the first quarter totalled $46.3-million, up 15 per cent from $40.8-million in the prior-year quarter. Internal growth was 10 per cent, led by California Closets and CertaPro Painters. Adjusted EBITDA for the seasonally slow first quarter was $1.3-million, versus $1.5-million in the prior-year quarter.

Corporate costs were $3.0-million in the first quarter, relative to $2.6-million in the prior-year period.

Plan to separate into two independent public companies

On April 21, 2015, shareholders overwhelmingly approved a plan to separate the company into two independent public companies: Colliers International, a global leader in commercial real estate services, and new FirstService, to comprise the company's FirstService Residential and FirstService Brands operations. The plan, which remains subject to certain conditions, including final court approval, is expected to be completed on June 1, 2015.

Conference call

FirstService will be holding a conference call on Tuesday, April 28, 2015, at 11 a.m. Eastern Time to discuss results for the first quarter of 2015. The call will be simultaneously webcast and can be accessed live or after the call at the company's website in the investors/newsroom section.

                                 OPERATING RESULTS
                  (in thousands of dollars, except per share amounts) 
                                                                            Three months
                                                                         ended March 31,
                                                                  2015              2014

Revenues                                                      $607,951          $545,112
Cost of revenues                                               405,428           361,690
Selling, general and administrative expenses                   180,114           164,676
Depreciation                                                     9,589             8,878
Amortization of intangible assets                                5,977             4,898
Acquisition-related items                                          993                45
Operating earnings                                               5,850             4,925
Interest expense, net                                            4,203             2,981
Other (income) expense                                             686             (641)
Earnings before income tax                                         961             2,585
Income tax (loss)                                                 (18)             1,125
Net earnings from continuing operations                            979             1,460
Discontinued operations, net of income tax (loss)                   --             (486)
Net earnings                                                       979               974
Non-controlling interest share of earnings                       2,518             4,841
Non-controlling interest redemption increment (loss)           (7,583)             2,014
Net earnings (loss) attributable to company                      6,044           (5,881)
Net earnings (loss) per share
Basic (loss)
Continuing operations (loss)                                      0.17            (0.15)
Discontinued operations (loss)                                      --            (0.01)
                                                                  0.17            (0.16)
Diluted (loss)
Continuing operations (loss)                                      0.17            (0.15)
Discontinued operations (loss)                                      --            (0.01)
                                                                  0.17            (0.16)
Adjusted EPS                                                      0.11              0.08

 

We seek Safe Harbor.