Finally, GDI's Corporate and Other segment recorded revenue of $22 million compared to revenue of $21 million in Q1 2023 attributable to organic growth generated in the U.S. manufacturing operations.

"While our results were impacted by seasonal factors and one-time events, I am relatively satisfied with GDI's performance in the first quarter of fiscal 2024," stated Claude Bigras, President & CEO of GDI. "Our Business Services Canada segment generated modest organic growth and an Adjusted EBITDA margin^* at the low end of our annualized target range as Q1 is traditionally this business segment's seasonally weakest quarter. The first quarter of 2023 benefited from the tail end of COVID extra services at higher margins making quarter-over-quarter comparisons less meaningful. We continue to see a stabilization in occupancy levels in the Class A office market in Canada and expect our Business Services Canada segment to generate Adjusted EBITDA margins^* higher than pre-COVID levels over the near-to-mid term. Our Business Services USA segment had a good quarter, generating revenue growth of 27%, including an organic growth rate of 10%. The segment's Adjusted EBITDA margin* was temporarily impacted as we continue to work on margin improvement initiatives in the Atalian USA business which was acquired on November 1, 2023. We expect Business Services USA margins to improve starting in the second quarter of this year. Finally, as we had pre-announced in our fourth quarter results, Adjusted EBITDA^* in our Technical Services segment was negatively impacted due to the completion of large projects in Ainsworth's U.S. business that suffered cost overruns which also impacted performance in Q4 last year. It is important to reiterate that the challenges this segment faced over the past two quarters resulted from three isolated projects in our Ainsworth's U.S. business which have now substantially been closed out, and the outlook for our Ainsworth business for the remainder of 2024 is quite positive," stated Mr. Bigras.

"I am also pleased to announce that during Q1 and subsequent to quarter-end GDI continued to execute on its commitment to grow strategically and profitability while creating value for our stakeholders. On April 1^st we concluded the sale our Superior Solutions Ltd. janitorial products distribution business. In doing so we generated strong returns on the capital we invested in growing this business and are redeploying the proceeds in our core facility services business that are generating attractive returns. We also completed the acquisition of the Atlantic Canadian refrigeration services business of Hussmann Canada Inc. which has strengthened Ainsworth's leading market position in Atlantic Canada. Additionally, on May 1, 2024, we concluded the acquisition of Paramount Building Services, a commercial janitorial services provider with over 500 employees and offices in Phoenix, AZ and Minneapolis, MN. I would like to take this opportunity to welcome the teams at Hussmann and Paramount to the GDI family."

"While I am satisfied with our results in Q1, I believe that GDI can perform better. We are focusing on initiatives to improve sales and operations within our Business Services Canada segment, improve margins at Ainsworth and increase efficiency in working capital management across all of our business segments. We remain committed to generating at least $30 million of working capital reduction through the remainder of 2024. Our balance sheet at the end of Q1 remained strong, our leverage ratios remain within our comfort zone and we are delivering on our focused and disciplined growth through acquisition strategy. I am looking forward to the remainder of 2024," 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, 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.

March 31, 2024 unaudited condensed consolidated interim financial statements and accompanied Management & Discussion Analysis are filed on www.sedarplus.ca.

GDI INTEGRATED FACILITY SERVICES INC.
Condensed Consolidated Interim Statements of Financial Position
(Unaudited) (In millions of Canadian dollars)

GDI INTEGRATED FACILITY SERVICES INC.
Condensed Consolidated Interim Statements of Comprehensive Income
(Unaudited) (In millions of Canadian dollars, except for earnings per share)

GDI INTEGRATED FACILITY SERVICES INC.
Condensed Consolidated Interim Statements of Changes in Equity
Three-month periods ended March 31, 2024 and 2023
(Unaudited) (In millions of Canadian dollars, except for number of shares)

GDI INTEGRATED FACILITY SERVICES INC.
Condensed Consolidated Interim Statements of Cash Flows
(Unaudited) (In millions of Canadian dollars)

GDI INTEGRATED FACILITY SERVICES INC.
Segmented information
(In millions of Canadian dollars)

GDI INTEGRATED FACILITY SERVICES INC.
Segmented information
(In millions of Canadian dollars)

GDI INTEGRATED FACILITY SERVICES INC.
Business acquisitions

On February 1, 2024, the Company entered into a definitive agreement to complete the sale of its Superior Solutions LP ("Superior") janitorial products distribution business. Closing of the transaction is subject to closing conditions. Superior's chemical manufacturing business was not included in the transaction.

Subsequent event

On April 1, 2024, the Company completed the sale of its Superior janitorial products distribution business.

On May 1, 2024, the Company concluded the acquisition of Paramount Building Services, a commercial janitorial services provider with over 500 employees and offices in Phoenix, AZ and Minneapolis, MN.

GDI INTEGRATED FACILITY SERVICES INC.
Supplementary Quarterly Financial Information
Three-month periods
(Unaudited) (In millions of Canadian dollars, except per share data)

 

 

SOURCE GDI Integrated Facility Services Inc.

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