Operating highlights:

Three months ended

Six months ended

June 30

2024

2023

2024

2023

Revenues (millions)

1,297.5

1,119.7

2,455.5

2,138.2

Adjusted EBITDA (millions) (note 1)

132.5

118.4

215.9

200.4

Adjusted EPS (note 2)

1.36

1.46

2.03

2.31

GAAP Operating Earnings

83.9

82.3

122.0

123.3

GAAP EPS

0.78

1.01

0.92

1.37

TORONTO, July 25, 2024 (GLOBE NEWSWIRE) -- FirstService Corporation (TSX:FSV, NASDAQ:FSV) today reported results for its second quarter ended June 30, 2024. All amounts are in US dollars.

Consolidated revenues for the second quarter were $1.30 billion, a 16% increase relative to the same quarter in the prior year. Adjusted EBITDA (note 1) increased 12% to $132.5 million, and Adjusted EPS (note 2) was $1.36, versus $1.46 in the prior year quarter. During the second quarter, FirstService reported Operating Earnings of $83.9 million, up from $82.3 million in the prior year period. Diluted earnings per share was $0.78 in the quarter, compared to $1.01 for the same quarter a year ago.

For the six months ended June 30, 2024, consolidated revenues were $2.46 billion, a 15% increase relative to the comparable prior year period, Adjusted EBITDA was $215.9 million, up 8%, and Adjusted EPS was $2.03, versus $2.31 in the prior year period. FirstService's Operating Earnings were $122.0 million in the current year period, versus $123.3 million in the prior year. Diluted earnings per share for the six months year-to-date was $0.92, compared to $1.37 in the prior year period.

"We are pleased with our second quarter financial results which were driven by strong revenue growth," said Scott Patterson, Chief Executive Officer of FirstService. "Based on the current momentum and indicators across our businesses, we are optimistic we will hit our top and bottom line targets in the back half of the year," he concluded.

About FirstService Corporation

FirstService Corporation is a North American leader in the essential outsourced property services sector, serving its customers through two industry-leading service 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 company-owned operations and franchise systems.

FirstService generates more than US$4.6 billion in annual revenues and has approximately 30,000 employees across North America. With significant insider ownership and an experienced management team, FirstService has a long-term track 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. More information is available at www.ﬁrstservice.com.

Segmented Quarterly Results

FirstService Residential revenues were $557.5 million for the second quarter, up 8% compared to the prior year quarter, including organic growth of 7%. The growth was driven by new property management contract wins across most markets. Adjusted EBITDA for the quarter was $59.1 million, versus $55.7 million in the prior year period. Operating Earnings were $49.1 million, versus $49.2 million for the second quarter of last year. The Adjusted EBITDA margin for the division was relatively in-line with the prior year, while the operating earnings margin was modestly lower due to amortization expense related to recently completed tuck-under acquisitions.

FirstService Brands revenues during the second quarter grew to $740.0 million, up 23% relative to the prior year period. The revenue increase was driven by solid growth from Century Fire Protection and a significant contribution from our recent Roofing Corp of America acquisition. On an organic basis, division revenues were down 6% versus the prior year second quarter, which benefited from elevated weather-related claims activity at our restoration operations. Adjusted EBITDA for the second quarter was $77.6 million, up from $65.8 million in the prior year period. Operating Earnings were $46.3 million, versus $41.8 million in the prior year quarter. The decline in operating margins was attributable to lower profitability at our restoration brands due to milder weather patterns in the current quarter compared to the prior year period.

Corporate costs, as presented in Adjusted EBITDA (note 1), were $4.2 million in the second quarter, relative to $3.2 million in the prior year period. Corporate costs for the quarter were $11.5 million, relative to $8.6 million in the prior year period, with the year-over-year cost increase driven by the impact of foreign exchange as well as higher stock-based compensation expense.

Conference Call

FirstService will be holding a conference call on Thursday, July 25, 2024 at 11:00 a.m. Eastern Time to discuss the quarter's results. This call is being webcast live at the Company's website at www.firstservice.com. Participants may register for the call here https://register.vevent.com/register/BI3340c2e12de24175a540beba39003a0e to receive the dial-in number and their unique PIN.

To join the webcast in listen only mode, use this link: https://edge.media-server.com/mmc/p/e2z4g4ax . 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).

Forward-looking Statements

This press release includes or may include forward-looking statements. Much of this information can be identified by words such as "expect to," "expected," "will," "estimated" or similar expressions suggesting future outcomes or events. FirstService believes the expectations reflected in such forward-looking statements are reasonable but no assurance can be given that these expectations will prove to be correct and such forward-looking statements should not be unduly relied upon. These statements involve known and unknown risks, uncertainties and other factors which may cause the actual results to be materially different from any future results, performance or achievements contemplated in the forward-looking statements. Such factors include: (i) general economic and business conditions, which will, among other things, impact demand for FirstService's services and the cost of providing services; (ii) the ability of FirstService to implement its business strategy, including FirstService's ability to acquire suitable acquisition candidates on acceptable terms and successfully integrate newly acquired businesses with its existing businesses; (iii) changes in or the failure to comply with government regulations; and (iv) other factors which are described in FirstService's annual information form for the year ended December 31, 2023 under the heading "Risk factors" (a copy of which may be obtained at www.sedarplus.ca) and Annual Report on Form 40-F filed with the United States Securities and Exchange Commission (a copy of which may be obtained at www.sec.gov), and subsequent filings (which factors are adopted herein). Forward-looking statements contained in this press release are made as of the date hereof and are subject to change. All forward-looking statements in this press release are qualified by these cautionary statements. Unless otherwise required by applicable securities laws, we do not intend, nor do we undertake any obligation, to update or revise any forward-looking statements contained in this press release to reflect subsequent information, events, results or circumstances or otherwise.

Summary financial information is provided in this press release. This press release should be read in conjunction with the Company's consolidated financial statements and MD&A to be made available on SEDAR+ at www.sedarplus.ca.

Notes

1. Reconciliation of net earnings to adjusted EBITDA:

Adjusted EBITDA is defined as net earnings, adjusted to exclude: (i) income tax; (ii) other expense (income); (iii) interest expense, net; (iv) depreciation and amortization; (v) acquisition-related items; and (vi) stock-based compensation expense. We use adjusted EBITDA to evaluate our own operating performance and our ability to service debt, as well as an integral part of our planning and reporting systems. Additionally, we use this measure in conjunction with discounted cash flow models to determine the Company's overall enterprise valuation and to evaluate acquisition targets. We present adjusted EBITDA as a supplemental measure because we believe such measure is useful to investors as a reasonable indicator of operating performance because of the low capital intensity of the Company's service operations. We believe this measure is a financial metric used by many investors to compare companies, especially in the services industry. This measure is not a recognized measure of financial performance under GAAP in the United States, and should not be considered as a substitute for operating earnings, net earnings or cash flow from operating activities, as determined in accordance with GAAP. Our method of calculating adjusted EBITDA may differ from other issuers and accordingly, this measure may not be comparable to measures used by other issuers. A reconciliation of net earnings to adjusted EBITDA appears below.

	Three months ended						Six months ended
(in thousands of US$)	June 30						June 30
	2024			2023			2024			2023

Net earnings	$	44,937		$	54,713		$	59,834		$	77,380
Income tax		18,584			19,903			24,599			27,819
Other income, net		(115	)		(4,249	)		(1,995	)		(4,513	)
Interest expense, net		20,531			11,954			39,557			22,585
Operating earnings		83,937			82,321			121,995			123,271
Depreciation and amortization		39,225			29,034			76,032			60,916
Acquisition-related items		2,306			1,651			3,906			3,758
Stock-based compensation expense		7,019			5,347			13,927			12,504
Adjusted EBITDA	$	132,487		$	118,353		$	215,860		$	200,449

A reconciliation of segment operating earnings to segment Adjusted EBITDA appears below.

(in thousands of US$)

Three months ended, June 30, 2024		FirstService		FirstService
		Residential		Brands		Corporate ⁽¹⁾

Operating earnings (loss)	$	49,107	$	46,308	$	(11,478	)
Depreciation and amortization		9,773		29,429		23
Acquisition-related items		207		1,827		272
Stock-based compensation expense		-		-		7,019
Adjusted EBITDA	$	59,087	$	77,564	$	(4,164	)


Three months ended, June 30, 2023		FirstService		FirstService
		Residential		Brands		Corporate ⁽¹⁾

Operating earnings (loss)	$	49,195	$	41,770	$	(8,644	)
Depreciation and amortization		6,029		22,981		24
Acquisition-related items		514		1,048		89
Stock-based compensation expense		-		-		5,347
Adjusted EBITDA	$	55,738	$	65,799	$	(3,184	)


Six months ended, June 30, 2024		FirstService		FirstService
		Residential		Brands		Corporate ⁽¹⁾

Operating earnings (loss)	$	75,765	$	73,107	$	(26,877	)
Depreciation and amortization		18,196		57,790		46
Acquisition-related items		725		2,129		1,052
Stock-based compensation expense		-		-		13,927
Adjusted EBITDA	$	94,686	$	133,026	$	(11,852	)


Six months ended, June 30, 2023		FirstService		FirstService
		Residential		Brands		Corporate ⁽¹⁾

Operating earnings (loss)	$	71,907	$	71,930	$	(20,566	)
Depreciation and amortization		14,822		46,048		46
Acquisition-related items		977		2,614		167
Stock-based compensation expense		-		-		12,504
Adjusted EBITDA	$	87,706	$	120,592	$	(7,849	)

(1) Corporate costs represent corporate overhead expenses not directly attributable to reportable segments and are therefore unallocated within segment operating earnings (loss) and Adjusted EBITDA.

2. Reconciliation of net earnings and diluted net earnings per share to adjusted net earnings and adjusted net earnings per share:

Adjusted earnings per share is defined as diluted net earnings per share, adjusted for the effect, after income tax, of: (i) the non-controlling interest redemption increment; (ii) acquisition-related items; (iii) amortization expense related to intangible assets recognized in connection with acquisitions; and (iv) stock-based compensation expense. We believe this measure is useful to investors because it provides a supplemental way to understand the underlying operating performance of the Company and enhances the comparability of operating results from period to period. Adjusted earnings per share is not a recognized measure of financial performance under GAAP, and should not be considered as a substitute for diluted net earnings per share, as determined in accordance with GAAP. Our method of calculating this non-GAAP measure may differ from other issuers and, accordingly, this measure may not be comparable to measures used by other issuers. A reconciliation of net earnings to adjusted net earnings and of diluted net earnings per share to adjusted earnings per share appears below.

	Three months ended						Six months ended
(in thousands of US$)	June 30						June 30
	2024			2023			2024			2023

Net earnings	$	44,937		$	54,713		$	59,834		$	77,380
Non-controlling interest share of earnings		(2,696	)		(3,376	)		(4,229	)		(5,809	)
Acquisition-related items		2,306			1,651			3,906			3,758
Amortization of intangible assets		17,009			11,556			32,240			25,842
Stock-based compensation expense		7,019			5,347			13,927			12,504
Income tax on adjustments		(6,968	)		(4,395	)		(13,389	)		(9,970	)
Non-controlling interest on adjustments		(320	)		(249	)		(584	)		(531	)
Adjusted net earnings	$	61,287		$	65,247		$	91,705		$	103,174

	Three months ended						Six months ended
(in US$)	June 30						June 30
	2024			2023			2024			2023

Diluted net earnings per share	$	0.78		$	1.01		$	0.92		$	1.37
Non-controlling interest redemption increment		0.16			0.13			0.32			0.23
Acquisition-related items		0.05			0.04			0.08			0.08
Amortization of intangible assets, net of tax		0.26			0.19			0.49			0.42
Stock-based compensation expense, net of tax		0.11			0.09			0.22			0.21
Adjusted earnings per share	$	1.36		$	1.46		$	2.03		$	2.31

FIRSTSERVICE CORPORATION
Condensed Consolidated Statements of Earnings
(in thousands of US dollars, except per share amounts)
				Three months						Six months
				ended June 30						ended June 30
				2024			2023			2024			2023

Revenues			$	1,297,459		$	1,119,734		$	2,455,504		$	2,138,179

Cost of revenues				862,463			754,263			1,651,040			1,454,527
Selling, general and administrative expenses				309,528			252,465			602,531			495,707
Depreciation				22,216			17,478			43,792			35,074
Amortization of intangible assets				17,009			11,556			32,240			25,842
Acquisition-related items (1)				2,306			1,651			3,906			3,758
Operating earnings				83,937			82,321			121,995			123,271
Interest expense, net				20,531			11,954			39,557			22,585
Other income, net				(115	)		(4,249	)		(1,995	)		(4,513	)
Earnings before income tax				63,521			74,616			84,433			105,199
Income tax				18,584			19,903			24,599			27,819
Net earnings				44,937			54,713			59,834			77,380
Non-controlling interest share of earnings				2,696			3,376			4,229			5,809
Non-controlling interest redemption increment				7,183			5,977			14,239			10,093
Net earnings attributable to Company			$	35,058		$	45,360		$	41,366		$	61,478

Net earnings per common share
	Basic		$	0.78		$	1.02		$	0.92		$	1.38
	Diluted			0.78			1.01			0.92			1.37


Adjusted earnings per share (2)			$	1.36		$	1.46		$	2.03		$	2.31

Weighted average common shares (thousands)
		Basic		44,984			44,574			44,917			44,486
		Diluted		45,100			44,800			45,087			44,733

Notes to Condensed Consolidated Statements of Earnings

(1) Acquisition-related items include transaction costs, and contingent acquisition consideration fair value adjustments.

(2) See definition and reconciliation above.

Condensed Consolidated Balance Sheets

(in thousands of US dollars)

June 30, 2024

December 31, 2023

Assets

Cash and cash equivalents

210,918

187,617

Restricted cash

20,591

19,260

Accounts receivable

895,182

842,236

Prepaid and other current assets

354,824

311,889

Current assets

1,481,515

1,361,002

Other non-current assets

34,516

34,418

Fixed assets

237,755

204,188

Operating lease right-of-use assets

227,230

218,299

Goodwill and intangible assets

2,065,169

1,807,836

Total assets

4,046,185

3,625,743

Liabilities and shareholders' equity

Accounts payable and accrued liabilities

502,549

471,083

Other current liabilities

254,937

211,661

Operating lease liabilities - current

50,266

50,898

Long-term debt - current

41,985

37,132

Current liabilities

849,737

770,774

Long-term debt - non-current

1,289,151

1,144,975

Operating lease liabilities - non-current

194,668

183,923

Other liabilities

131,692

115,938

Deferred income tax

83,908

53,024

Redeemable non-controlling interests

415,559

332,963

Shareholders' equity

1,081,470

1,024,146

Total liabilities and equity

4,046,185

3,625,743

Supplemental balance sheet information

Total debt

1,331,136

1,182,107

Total debt, net of cash

1,120,218

994,490

Consolidated Statements of Cash Flows
(in thousands of US dollars)
			Three months ended						Six months ended
			June 30						June 30
		2024			2023			2024			2023

Cash provided by (used in)

Operating activities
Net earnings		$	44,937		$	54,713		$	59,834		$	77,380
Items not affecting cash:
	Depreciation and amortization		39,225			29,034			76,032			60,916
	Deferred income tax		(2,275	)		(419	)		(4,549	)		(691	)
	Other		8,052			1,995			14,384			10,998
			89,939			85,323			145,701			148,603

Changes in non-cash working capital
	Accounts receivable		(22,637	)		(73,765	)		(2,640	)		(122,353	)
	Payables and accruals		33,002			41,398			(23,282	)		10,992
	Other		30,440			33,296			2,165			48,707
Net cash provided by operating activities			130,744			86,252			121,944			85,949

Investing activities
Acquisition of businesses, net of cash acquired			(123,031	)		(11,099	)		(154,649	)		(93,450	)
Purchases of fixed assets			(29,301	)		(22,723	)		(54,322	)		(44,204	)
Other investing activities			(299	)		6,560			(1,000	)		1,256
Net cash used in investing activities			(152,631	)		(27,262	)		(209,971	)		(136,398	)

Financing activities
Increase (decrease) in long-term debt, net			90,473			(18,855	)		136,728			85,045
Purchases of non-controlling interests, net			(10,221	)		(891	)		(21,442	)		(3,610	)
Dividends paid to common shareholders			(11,244	)		(10,024	)		(21,298	)		(18,980	)
Distributions paid to non-controlling interests			(3,817	)		(4,114	)		(4,470	)		(4,472	)
Other financing activities			3,987			1,664			22,790			17,144
Net cash provided by (used in) financing activities			69,178			(32,220	)		112,308			75,127

Effect of exchange rate changes on cash			123			(591	)		351			(604	)

Increase in cash, cash equivalents and restricted cash			47,414			26,179			24,632			24,074

Cash, cash equivalents and restricted cash, beginning of period			184,095			157,243			206,877			159,348

Cash, cash equivalents and restricted cash, end of period		$	231,509		$	183,422		$	231,509		$	183,422

Segmented Results
(in thousands of US dollars)


		FirstService		FirstService
		Residential		Brands		Corporate			Consolidated

Three months ended June 30

2024
	Revenues	$	557,504	$	739,955	$	-		$	1,297,459
	Adjusted EBITDA		59,087		77,564		(4,164	)		132,487

	Operating earnings		49,107		46,308		(11,478	)		83,937

2023
	Revenues	$	517,134	$	602,600	$	-		$	1,119,734
	Adjusted EBITDA		55,738		65,799		(3,184	)		118,353

	Operating earnings		49,195		41,770		(8,644	)		82,321



		FirstService		FirstService
		Residential		Brands		Corporate			Consolidated

Six months ended June 30

2024
	Revenues	$	1,053,628	$	1,401,876	$	-		$	2,455,504
	Adjusted EBITDA		94,686		133,026		(11,852	)		215,860

	Operating earnings		75,765		73,107		(26,877	)		121,995

2023
	Revenues	$	962,714	$	1,175,465	$	-		$	2,138,179
	Adjusted EBITDA		87,706		120,592		(7,849	)		200,449

	Operating earnings		71,907		71,930		(20,566	)		123,271

COMPANY CONTACTS:

D. Scott Patterson

Chief Executive Officer

Jeremy Rakusin

Chief Financial Officer

(416) 960-9566

FirstService Reports Second Quarter 2024 Results