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FirstService Reports Very Strong First Quarter Results

Robust Organic Top-Line Growth Drives Profitability

Operating highlights:

 Three months 
 ended March 31 
 2023 2022 
Revenues (millions)$1,018.4 $834.6 
Adjusted EBITDA (millions) (note 1) 82.1  62.3 
Adjusted EPS (note 2) 0.85  0.73 
GAAP Operating Earnings (millions) 41.0  29.0 
GAAP EPS 0.36  0.32 

TORONTO, April 26, 2023 (GLOBE NEWSWIRE) -- FirstService Corporation (TSX: FSV; NASDAQ: FSV) today reported operating and financial results for its first quarter ended March 31, 2023. All amounts are in US dollars.

Consolidated revenues for the first quarter were $1.02 billion, up 22% relative to the same quarter in the prior year, including 17% from organic growth. Adjusted EBITDA (note 1) increased 32% to $82.1 million, and Adjusted EPS (note 2) was $0.85, representing 16% growth over the prior year quarter. GAAP Operating Earnings were $41.0 million, relative to $29.0 million in the prior year period. GAAP diluted earnings per share was $0.36 per share in the quarter, versus $0.32 in the same quarter a year ago.

“We are very pleased with our first quarter, building upon the strong results we delivered in Q4,” said Scott Patterson, Chief Executive Officer of FirstService. “The impressive organic growth and early year momentum across our brands sets us up for a strong expected performance in 2023,” 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 franchise systems and company-owned operations.

FirstService generates more than US$3.9 billion in annual revenues and has approximately 27,000 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 and the Toronto Stock Exchange under the symbol “FSV”, and are included in the S&P/TSX 60 Index. More information is available at

Segmented Quarterly Results
FirstService Residential revenues were $445.6 million for the first quarter, an increase of 13% versus the prior year, including 11% organic growth. Top-line performance was driven by new property management contract wins and very strong growth in our labour-related services across most markets. Adjusted EBITDA for the quarter was $32.0 million, up from $30.4 million in the prior year period. GAAP Operating Earnings were $22.7 million, versus $23.4 million in the first quarter of last year. Operating margins were impacted by the strong year-over-year growth of lower margin labour-driven services, including the ramp-up of certain seasonal amenity management operations.

FirstService Brands revenues for the first quarter totalled $572.9 million, up 30% relative to the prior year period. The revenue increase was comprised of 23% organic growth, with the balance from recent tuck-under acquisitions. Top-line organic growth was exceptionally strong within our Century Fire Protection and restoration brands, the latter of which benefited from significant activity arising from area-wide weather events. Adjusted EBITDA was $54.8 million, up from $36.1 million in the prior year quarter. GAAP Operating Earnings were $30.2 million, versus $15.8 million in the prior year quarter. Operating margins increased primarily as a result of operating leverage driven by the strong revenue growth across our service lines.

Corporate costs, as presented in Adjusted EBITDA, were $4.7 million in the first quarter, relative to $4.2 million in the prior year period. On a GAAP basis, corporate costs for the quarter were $11.9 million, relative to $10.1 million in the prior year period, with the increase primarily due to stock-based compensation expense.

Conference Call
FirstService will be holding a conference call on Wednesday, April 26, 2023 at 11:00 a.m. ET to discuss results for the first quarter of 2023. This call is being webcast live at the Company’s website at Participants may register for the call here to receive the dial-in number and their unique PIN.

To join the webcast in listen only mode, use this link: .

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, 2022 under the heading “Risk factors” (a copy of which may be obtained at and Annual Report on Form 40-F filed with the United States Securities and Exchange Commission (a copy of which may be obtained at, 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. Our interim consolidated financial statements and related management’s discussion and analysis will be made available on SEDAR at

1. Reconciliation of net earnings to Adjusted EBITDA:

Adjusted EBITDA is defined as net earnings, adjusted to exclude: (i) income tax; (ii) other (income) expense; (iii) interest expense; (iv) depreciation and amortization; (v) acquisition-related items; and (vi) stock-based compensation expense. The Company uses adjusted EBITDA to evaluate its own operating performance, its ability to service debt, and as an integral part of its planning and reporting systems. Additionally, this measure is used in conjunction with discounted cash flow models to determine the Company’s overall enterprise valuation and to evaluate acquisition targets. Adjusted EBITDA is presented as a supplemental measure because the Company believes such a measure is useful to investors as a reasonable indicator of operating performance, due to the low capital intensity of the Company’s service operations. The Company believes 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. The Company’s 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
(in thousands of US dollars)March 31
 2023  2022 
Net earnings$22,667  $18,821 
Income tax 7,916   6,394 
Other income (264)  (535)
Interest expense, net 10,631   4,366 
Operating earnings 40,950   29,046 
Depreciation and amortization 31,882   25,910 
Acquisition-related items 2,107   1,561 
Stock-based compensation expense 7,157   5,821 
Adjusted EBITDA$82,096  $62,338 

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

Adjusted EPS 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. The Company believes 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 EPS 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. The Company’s 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 EPS appears below.

 Three months ended
(in thousands of US dollars)March 31
 2023  2022 
Net earnings$22,667  $18,821 
Non-controlling interest share of earnings (2,433)  (565)
Acquisition-related items 2,107   1,561 
Amortization of intangible assets 14,286   11,466 
Stock-based compensation expense 7,157   5,821 
Income tax on adjustments (5,575)  (4,495)
Non-controlling interest on adjustments (282)  (228)
Adjusted net earnings$37,927  $32,381 
 Three months ended
(in US dollars)March 31
 2023  2022 
Diluted net earnings per share$0.36  $0.32 
Non-controlling interest redemption increment 0.09   0.09 
Acquisition-related items 0.05   0.03 
Amortization of intangible assets, net of tax 0.23   0.19 
Stock-based compensation expense, net of tax 0.12   0.10 
Adjusted EPS$0.85  $0.73 

Operating Results       
(in thousands of US dollars, except per share amounts)       
 Three months
 ended March 31
(unaudited) 2023   2022 
Revenues$1,018,445  $834,572 
Cost of revenues 700,264   575,834 
Selling, general and administrative expenses 243,242   202,221 
Depreciation 17,596   14,444 
Amortization of intangible assets 14,286   11,466 
Acquisition-related items (1) 2,107   1,561 
Operating earnings 40,950   29,046 
Interest expense, net 10,631   4,366 
Other income, net (264)  (535)
Earnings before income tax 30,583   25,215 
Income tax 7,916   6,394 
Net earnings 22,667   18,821 
Non-controlling interest share of earnings 2,433   565 
Non-controlling interest redemption increment 4,116   4,171 
Net earnings attributable to Company  16,118   14,085 
Net earnings per share        
Basic$0.36  $0.32 
Diluted 0.36   0.32 
Adjusted EPS (2)$0.85  $0.73 
Weighted average common shares (thousands)       
Basic 44,396   44,085 
Diluted 44,661   44,500 

(1) Acquisition-related items include contingent acquisition consideration fair value adjustments, and transaction costs.
(2) See definition and reconciliation above.

Condensed Consolidated Balance Sheets     
(in thousands of US dollars)
(unaudited)March 31, 2023 December 31, 2022
Cash and cash equivalents$131,350 $136,219
Restricted cash 25,893  23,129
Accounts receivable 690,342  635,942
Prepaid and other current assets 336,511  313,582
 Current assets 1,184,096  1,108,872
Other non-current assets 23,019  36,853
Deferred income tax 1,688  1,696
Fixed assets 171,577  167,012
Operating lease right-of-use assets 211,284  205,544
Goodwill and intangible assets 1,365,154  1,254,537
 Total assets$2,956,818 $2,774,514
Liabilities and shareholders' equity     
Accounts payable and accrued liabilities$374,245 $398,313
Unearned revenues 161,284  125,542
Other current liabilities 25,834  28,324
Operating lease liabilities - current 49,951  49,145
Long-term debt - current 35,320  35,665
 Current liabilities 646,634  636,989
Long-term debt - non-current 803,261  698,798
Operating lease liabilities - non-current 174,186  168,557
Other liabilities 80,783  78,178
Deferred income tax 65,069  51,097
Non-controlling interests 244,675  233,429
Shareholders' equity 942,210  907,466
 Total liabilities and equity$2,956,818 $2,774,514
Supplemental balance sheet information     
Total debt$838,581 $734,463
Total debt, net of cash 707,231  598,244

Condensed Consolidated Statements of Cash Flows       
(in thousands of US dollars)       
 Three months ended
 March 31
(unaudited) 2023   2022 
Cash provided by (used in)       
Operating activities       
Net earnings$22,667  $18,821 
Items not affecting cash:       
Depreciation and amortization 31,882   25,910 
Deferred income tax (272)  (623)
Other 9,003   6,773 
  63,280   50,881 
Changes in non cash working capital       
Accounts receivable (48,588)  24,834 
Payables and accruals (30,406)  (39,950)
Other 15,411   (34,264)
Net cash provided by (used in) operating activities (303)  1,501 
Investing activities       
Acquisition of businesses, net of cash acquired (82,351)  - 
Purchases of fixed assets (21,481)  (16,583)
Other investing activities (5,304)  (6,114)
Net cash used in investing activities (109,136)  (22,697)
Financing activities       
Increase in long-term debt, net 103,900   29,910 
Purchases of non-controlling interests, net (2,719)  (5,764)
Dividends paid to common shareholders (8,956)  (8,032)
Other financing activities 15,122   7,539 
Net cash provided by financing activities 107,347   23,653 
Effect of exchange rate changes on cash (13)  (134)
Increase (decrease) in cash, cash equivalents and restricted cash (2,105)  2,323 
Cash, cash equivalents and restricted cash, beginning of period 159,348   194,271 
Cash, cash equivalents and restricted cash, end of period$157,243  $196,594 

Segmented Results           
(in thousands of US dollars)           
 FirstService FirstService      
(unaudited) Residential  Brands Corporate  Consolidated
Three months ended March 31           
Revenues$445,580 $572,865 $- $1,018,445
Adjusted EBITDA 31,968  54,793  (4,665) 82,096
Operating earnings 22,712  30,160  (11,922) 40,950
Revenues$394,083 $440,489 $- $834,572
Adjusted EBITDA 30,410  36,082  (4,154) 62,338
Operating earnings 23,397  15,751  (10,102) 29,046


D. Scott Patterson
Chief Executive Officer

Jeremy Rakusin
Chief Financial Officer

(416) 960-9566

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