FirstService Corporation

Welcome to the first quarter investors conference call. Today's call is being recorded. Legal counsel requires us to advise that the discussion scheduled to take place today may contain forward-looking statements that involve known and unknown risks and uncertainties. Actual results may materially differ from any future results, performance, or achievements contemplated in the forward-looking statements. Additional information concerning factors that could cause actual results to materially differ from those in the forward-looking statements is contained in the company's annual information Thank you, Jesse. Welcome, ladies and gentlemen, to our first quarter conference call. Thank you for dialing in.

Jeremy Rakusin, our CFO, is on the line with me today. In terms of an agenda for the call this morning, I'm going to open and start right into a COVID-19 update. Talk about the impact the pandemic is having on our businesses, the actions we're taking, and a look forward. We will then circle back and talk to you about our Q1 results. As we normally do, Jeremy and I in tandem, and then Jeremy will close with a focus on our balance sheet and liquidity. Let me start by saying that all of our businesses have been designated essential services in at least some of their geographic regions with most being granted essential status across every market. In particular, our management, janitorial, security, Restoration and Fire Safety businesses are delivering services that are protecting the health and safety of our customers during this crisis. I can tell you I am so proud and inspired by our frontline teams that show up every day and continue to deliver on our service excellence promise. Our customers are depending on us now more than ever, and I want to personally thank our operating teams for their resilience and commitment during this time. Although our services are deemed essential, they are certainly not immune to the impacts of a pandemic. While COVID-19 did not materially affect our first quarter results, we will see a negative impact in future reporting periods, in particular the second quarter. The various lockdown, stay at home, and social distancing measures are negatively impacting our ability to do work on the premises of both residential and commercial customers. All of our service lines are being impacted with a more pronounced effect being felt within our brands division. Let me get a little more specific and talk about each of our divisions. We believe our first service residential division will be relatively resilient. Most of the revenue is essential and contractual and relates to community management. Our boards are counting on us to deliver seamless management services through this period. We will, however, see declines in certain ancillary services, including amenity management, project management, and a number of administrative services. and as a result, we expect year over year revenue decline in the second quarter of 10 to 15%.

The ancillary services generally carry a higher average margin.