Operating highlights:

		Three months ended						Six months ended
		June 30						June 30
		2016			2015			2016			2015
Revenues (millions)		$	385.1		$	326.3		$	692.7		$	598.4
Adjusted EBITDA (millions) (note 1)			40.2			32.3			53.0			41.6
Adjusted EPS (note 2)			0.52			0.40			0.60			0.41
GAAP Operating Earnings			30.8			23.9			35.1			25.3
GAAP EPS			0.35			0.20			0.30			0.11

TORONTO, July 27, 2016 (GLOBE NEWSWIRE) -- FirstService Corporation (TSX: FSV) (NASDAQ: FSV) today reported strong results for its second quarter ended June 30, 2016. All amounts are in US dollars.

Revenues for the second quarter were $385.1 million, an 18% increase relative to the same quarter in the prior year, Adjusted EBITDA (note 1) increased 25% to $40.2 million, and Adjusted EPS (note 2) was $0.52, a 30% increase versus the prior year quarter. GAAP Operating Earnings were $30.8 million, relative to $23.9 million in the prior year period. GAAP diluted earnings per share was $0.35 in the quarter, versus $0.20 for the same quarter a year ago.

For the six months ended June 30, 2016, revenues were $692.7 million, a 16% increase relative to the comparable prior year period, Adjusted EBITDA was $53.0 million, up 27%, and Adjusted EPS was $0.60, a 46% increase versus the prior year period. GAAP Operating Earnings were $35.1 million, relative to $25.3 million in the prior year period. GAAP diluted EPS for the six month period was $0.30, compared to $0.11 in the prior year period.

“FirstService continued its consistent quarterly performance, with both of our FirstService Residential and FirstService Brands divisions recording double-digit top-line growth,” said Scott Patterson, Chief Executive Officer of FirstService. “Each business delivered in line with our previously established long-term revenue targets through a combination of mid-to-high single digit organic growth and further contribution from tuck-under acquisitions. Our largest acquisition this year, Century Fire, has also been successfully integrated during this quarter, and we view the fire protection market as another important area of future growth for FirstService,” he concluded.

About FirstService CorporationFirstService 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$1.3 billion in annual revenues and has more than 16,000 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”. More information is available at www.firstservice.com.

Segmented Quarterly ResultsFirstService Residential revenues were $288.7 million for the second quarter, up 10% versus the prior year quarter. Revenue growth was comprised of 7% organic growth and the balance from recent acquisitions. Adjusted EBITDA for the quarter was $26.4 million, versus $20.5 million in the prior year period. Second quarter performance was driven by strong and diversified growth across most regions, and further margin expansion from ongoing operating efficiencies. GAAP Operating Earnings were $21.4 million, up 41%.

FirstService Brands revenues grew to $96.4 million, up 52% relative to the prior year period. Revenue growth was comprised of 8% organic growth and the balance from recent acquisitions, including our larger Century Fire Protection transaction. Adjusted EBITDA for the second quarter was $16.7 million, up from $13.7 million in the prior year period. The second quarter included strong performance from CertaPro Painters, California Closets and Pillar to Post Home Inspectors, which continue to benefit from the home improvement environment, as well as margin improvement at our California Closets company-owned operations. The overall margin for the division declined versus the prior year period due to a significant increase in recently acquired company-owned operations, including Century Fire. GAAP Operating Earnings were $13.1 million, versus $11.8 million in the prior year quarter.

Corporate costs, as presented in Adjusted EBITDA, were $2.9 million in the second quarter, relative to $1.9 million in the prior year period. The increase in corporate costs reflects accrued incentive compensation based on year-to-date results. The prior year period was based upon pre-spin-off cost allocations. On a GAAP basis, corporate costs for the quarter were $3.6 million, relative to $3.0 million in the prior period.

Conference CallFirstService will be holding a conference call on Wednesday, July 27, 2016 at 11:00 a.m. Eastern Time to discuss the quarter’s results. The call will be simultaneously webcast and can be accessed live or after the call at www.firstservice.com in the “Investors / Newsroom” section.

Forward-looking StatementsThis press release includes or may include forward-looking statements. Forward-looking statements include the Company’s financial performance outlook and statements regarding goals, beliefs, strategies, objectives, plans or current expectations. 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 the Company’s services and the cost of providing services; (ii) the ability of the Company to implement its business strategy, including the Company’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 the Company’s filings with applicable Canadian and United States securities regulatory authorities (which factors are adopted herein).

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

Notes1. 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; (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
		2016					2015					2016					2015
Net earnings		$		18,072			$		11,808			$		19,589			$	11,374
Income tax				10,262					9,488					11,112				9,259
Other income, net				(26	)				(83	)				(101	)			119
Interest expense, net				2,486					2,723					4,455				4,591
Operating earnings				30,794					23,936					35,055				25,343
Depreciation and amortization				8,494					7,135					15,908				14,133
Acquisition-related items				322					36					393				283
Stock-based compensation expense				635					465					1,605				1,134
Spin-off transaction costs				-					740					-				740
Adjusted EBITDA		$		40,245			$		32,312			$		52,961			$	41,633

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 (loss) 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 (loss) per share to adjusted earnings per share appears below.

		Three months ended										Six months ended
(in thousands of US$)		June 30										June 30
		2016					2015					2016					2015
Net earnings		$		18,072			$		11,808			$		19,589			$		11,374
Non-controlling interest share of earnings				(1,508	)				(1,294	)				(2,316	)				(2,413	)
Acquisition-related items				322					36					393					283
Amortization of intangible assets				2,833					2,391					5,225					4,941
Stock-based compensation expense				635					465					1,605					1,134
Spin-off transaction costs				-					740					-					740
Spin-off tax charge				-					1,646					-					1,646
Income tax on adjustments				(1,355	)				(1,266	)				(2,651	)				(2,520	)
Non-controlling interest on adjustments				(62	)				(45	)				(95	)				(90	)
Adjusted net earnings		$		18,937			$		14,481			$		21,750			$		15,095
		Three months ended										Six months ended
(in US$)		June 30										June 30
		2016					2015					2016					2015
Diluted net earnings per share		$		0.35			$		0.20			$		0.30			$		0.11
Non-controlling interest redemption increment				0.10					0.08					0.17					0.13
Acquisition-related items				0.01					-					0.01					0.01
Amortization of intangible assets, net of tax				0.05					0.04					0.09					0.07
Stock-based compensation expense, net of tax				0.01					0.01					0.03					0.02
Spin-off transaction costs, net of tax				-					0.02					-					0.02
Spin-off tax charge				-					0.05					-					0.05
Adjusted earnings per share		$		0.52			$		0.40			$		0.60			$		0.41

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
(unaudited)						2016					2015					2016				2015
Revenues				$		385,104			$		326,251			$		692,690			$	598,440
Cost of revenues						266,434					224,142					488,940				421,449
Selling, general and administrative expenses						79,060					70,262					152,394				136,492
Depreciation						5,661					4,744					10,683				9,192
Amortization of intangible assets						2,833					2,391					5,225				4,941
Acquisition-related items (1)						322					36					393				283
Spin-off transaction costs						-					740					-				740
Operating earnings						30,794					23,936					35,055				25,343
Interest expense, net						2,486					2,723					4,455				4,591
Other expense (income)						(26	)				(83	)				(101	)			119
Earnings before income tax						28,334					21,296					30,701				20,633
Income tax						10,262					9,488					11,112				9,259
Net earnings						18,072					11,808					19,589				11,374
Non-controlling interest share of earnings						1,508					1,294					2,316				2,413
Non-controlling interest redemption increment						3,857					3,137					6,223				4,895
Net earnings attributable to Company				$		12,707			$		7,377			$		11,050			$	4,066
Net earnings per common share
	Basic			$		0.35			$		0.21			$		0.31			$	0.11
	Diluted					0.35					0.20					0.30				0.11
Adjusted earnings per share (2)				$		0.52			$		0.40			$		0.60			$	0.41
Weighted average common shares (thousands)
		Basic				36,000					35,971					35,984				35,971
		Diluted				36,423					36,601					36,380				36,619

Notes to Condensed Consolidated Statements of Earnings (Loss)(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)
(unaudited)		June 30, 2016			December 31, 2015
Assets
Cash and cash equivalents		$	36,285		$	45,560
Accounts receivable			155,608			114,521
Inventories			26,089			16,155
Prepaid expenses and other current assets			61,406			53,986
	Current assets		279,388			230,222
Other non-current assets			5,333			6,009
Fixed assets			68,825			57,575
Deferred income tax			7,142			6,553
Goodwill and intangible assets			377,141			300,124
	Total assets	$	737,829		$	600,483
Liabilities and shareholders' equity
Accounts payable and accrued liabilities		$	131,977		$	102,043
Other current liabilities			38,018			24,015
Long-term debt - current			1,178			4,041
	Current liabilities		171,173			130,099
Long-term debt - non-current			259,485			197,158
Other liabilities			15,443			14,670
Deferred income tax			29,841			13,971
Redeemable non-controlling interests			88,783			77,559
Shareholders' equity			173,104			167,026
	Total liabilities and equity	$	737,829		$	600,483
Supplemental balance sheet information
Total debt		$	260,663		$	201,199
Total debt, net of cash			224,378			155,639

Consolidated Statements of Cash Flows
(in thousands of US dollars)
				Three months ended										Six months ended
				June 30										June 30
(unaudited)					2016					2015					2016					2015
Cash provided by (used in)
Operating activities
Net earnings			$		18,072			$		11,808			$		19,589			$		11,374
Items not affecting cash:
	Depreciation and amortization				8,493					7,135					15,907					14,133
	Deferred income tax				(558	)				(657	)				(1,094	)				223
	Other				630					(486	)				536					180
					26,637					17,800					34,938					25,910
Changes in non-cash working capital
	Accounts receivable				(17,462	)				(9,076	)				(20,851	)				619
	Payables and accruals				22,993					3,504					19,566					342
	Other				6,288					10,980					6,641					15,007
Net cash provided by operating activities					38,456					23,208					40,294					41,878
Investing activities
Acquisition of businesses, net of cash acquired					(72,043	)				(4,298	)				(77,081	)				(8,500	)
Purchases of fixed assets					(7,078	)				(6,821	)				(13,978	)				(10,407	)
Other investing activities					(2,867	)				(2,414	)				(7,448	)				(1,473	)
Net cash used in investing activities					(81,988	)				(13,533	)				(98,507	)				(20,380	)
Financing activities
Increase in long-term debt, net					49,298					(24,880	)				59,374					(17,263	)
Net contributions from Old FSV					-					31,906					-					1,995
Sale (purchases) of non-controlling interests, net					13					(9,750	)				259					(17,386	)
Financing fees paid					-					(1,086	)				-					(1,086	)
Dividends paid to common shareholders					(3,960	)				-					(7,421	)				-
Distributions paid to non-controlling interests					(1,832	)				(737	)				(3,064	)				(2,287	)
Repurchases of Subordinate Voting Shares					(1,349	)				-					(1,349	)				-
Other financing activities					399					(151	)				842					(1,769	)
Net cash (used in) provided by financing activities					42,569					(4,698	)				48,641					(37,796	)
Effect of exchange rate changes on cash					173					1,719					297					1,346
Increase (decrease) in cash and cash equivalents					(790	)				6,696					(9,275	)				(14,952	)
Cash and cash equivalents, beginning of period					37,075					45,142					45,560					66,790
Cash and cash equivalents, end of period			$		36,285			$		51,838			$		36,285			$		51,838

Segmented Results
(in thousands of US dollars)
		FirstSevice			FirstService
(unaudited)		Residential			Brands			Corporate					Consolidated
Three months ended June 30
2016
	Revenues	$	288,658		$	96,446		$		-			$	385,104
	Adjusted EBITDA		26,376			16,730				(2,861	)			40,245
	Operating earnings		21,380			13,056				(3,642	)			30,794
2015
	Revenues	$	262,794		$	63,457		$		-			$	326,251
	Adjusted EBITDA		20,502			13,734				(1,924	)			32,312
	Operating earnings		15,122			11,844				(3,030	)			23,936
		FirstService			FirstService
		Residential			Brands			Corporate					Consolidated
Six months ended June 30
2016
	Revenues	$	538,464		$	154,226		$		-			$	692,690
	Adjusted EBITDA		38,113			19,925				(5,077	)			52,961
	Operating earnings		27,737			14,447				(7,129	)			35,055
2015
	Revenues	$	488,596		$	109,844		$		-			$	598,440
	Adjusted EBITDA		29,831			15,009				(3,207	)			41,633
	Operating earnings		19,099			11,373				(5,129	)			25,343

COMPANY CONTACTS:

Scott Patterson
President & CEO

Jeremy Rakusin
Chief Financial Officer

(416) 960-9500

Source: FirstService Corporation

Press Releases

FirstService (FSV) Reports In-Line Q2 EPSJuly 27, 2016 7:42 AM