Mr. Scott Patterson reports

FIRSTSERVICE REPORTS FOURTH QUARTER AND FULL YEAR RESULTS

FirstService Corp. has released fourth quarter and full-year results for the year ended Dec. 31, 2023. All amounts are in U.S. dollars.

Consolidated revenues for the fourth quarter were $1.08-billion, a 6-per-cent increase relative to the same quarter in the prior year. Adjusted EBITDA (earnings before interest, taxes, depreciation and amortization) was $103.3-million, up 1 per cent, and adjusted EPS (earnings per share) was $1.11, versus $1.22 in the prior-year quarter.

Operating earnings for the quarter were $48.1-million, relative to $67.5-million in the prior-year period, with the decrease attributable to contingent acquisition consideration fair value adjustments on prior tuck-under acquisitions. Diluted EPS was 14 cents per share in the quarter, compared with 86 cents for the same quarter a year ago.

For the year ended Dec. 31, 2023, consolidated revenues were $4.33-billion, a 16-per-cent increase relative to the prior year, including 10-per-cent organic growth. Adjusted EBITDA was $415.7-million, up 18 per cent, and adjusted EPS was $4.66, versus the prior year of $4.24. Operating earnings were $244.9-million, versus $219-million in the prior-year period. Diluted earnings per share was $2.24, compared with $2.72 in the prior year.

"We are pleased with our fourth quarter performance, which lined up with our expectations," said Scott Patterson, chief executive officer of FirstService. "For the full year, we delivered double-digit organic top-line growth and strong profitability across both divisions, as our brands continued to realize share gains in their respective markets," he concluded.

About FirstService Corp.

FirstService is a North American leader in the property services sector serving its customers through two industry-leading platforms: FirstService Residential -- North America's largest manager of residential communities; and FirstService Brands -- one of North America's largest providers of essential property services delivered through individually branded franchise systems and company-owned operations.

FirstService generates more than $4.3-billion in annual revenues and has approximately 29,000 employees across North America. With significant insider ownership and an experienced management team, FirstService has a long-term record of creating value and superior returns for shareholders. The common shares of FirstService trade on the Nasdaq under the symbol FSV and on the Toronto Stock Exchange under the symbol FSV, and are included in the S&P/TSX 60 Index.

Segmented fourth quarter results

FirstService Residential generated revenues of $496.3-million for the fourth quarter, up 12 per cent relative to the prior-year quarter, including 9-per-cent organic growth. Growth was driven by new contract wins, with particularly strong performance at the company's sited labour communities. Adjusted EBITDA was $43.5-million, an increase of 14 per cent compared with $38.1-million reported in the prior-year period. Operating earnings were $34.1-million, versus $30.6-million for the fourth quarter of last year. Operating margins were relatively in line with the prior-year quarter.

FirstService Brands recorded revenues of $583-million, up 1 per cent versus $578-million in the prior-year period. Revenues declined 7 per cent on an organic basis due to milder weather patterns at FirstService's restoration operations, compared with the significant loss claims activity from hurricanes Ian and Fiona in the prior-year quarter. The division top-line performance included very strong growth at Century Fire together with solid contribution from the company's home services brands, partially offsetting the restoration-driven headwinds. Adjusted EBITDA for the quarter was $61.1-million, compared with $67.4-million in the prior-year quarter. Operating earnings were $20.6-million, versus $44.0-million in the prior-year quarter. The segment adjusted EBITDA margin decline was primarily attributable to lower profitability in FirstService's restoration operations due to the reduced weather-related activity during the period. The operating earnings margin was further impacted by contingent acquisition consideration fair value adjustments.

Corporate costs, as presented in adjusted EBITDA, were $1.2-million in the fourth quarter, relative to $3-million in the prior-year period. Corporate costs for the quarter were $6.7-million, relative to $7.1-million in the prior-year period.

Segmented full-year results

FirstService Residential reported revenues of $2-billion, up 13 per cent relative to 2022, including 10-per-cent organic growth and the balance from tuck-under acquisitions. The strong organic growth was primarily driven by new contract wins, together with contribution from increased labour-related and ancillary services with FirstService's existing clients. Adjusted EBITDA was $187.8-million, up 11 per cent versus the prior year. Operating earnings were $155-million, compared with $138.9-million in the prior year. Operating margins were in line with the prior year.

FirstService Brands revenues were $2.34-billion, up 18 per cent versus the prior year, and comprising 11-per-cent organic growth with the balance from acquisitions. All service lines contributed to the division's organic revenue growth, including an exceptionally strong increase over the prior year at the company's Century Fire Protection operations. Adjusted EBITDA for the year was $242.4-million, up 23 per cent relative to the prior year. Operating earnings were $126.5-million, versus $111.6-million a year ago. The segment adjusted EBITDA margin was positively impacted by operating leverage realized from the strong top-line performance in FirstService's restoration and Century Fire businesses. The operating earnings margin was slightly down due to acquisition-related items, primarily contingent acquisition consideration fair value adjustments.

Corporate costs, as presented in adjusted EBITDA, were $14.4-million for the full year, relative to $13.2-million in the prior year. Corporate costs were $36.6-million, relative to $31.5-million a year ago, with the increase driven primarily by stock-based compensation expense.

Conference call and presentation

FirstService will be holding a conference call on Tuesday, Feb. 6, 2024, at 11 a.m. Eastern Time to discuss the results for the fourth quarter and full year.

This call is being webcast live at the company's website. Participants may register for the call to receive the dial-in number and their unique PIN. To join the webcast in listen-only mode, go on-line. It is recommended that you join 10 minutes prior to the event start (although you may register and dial in at any time during the call).

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