GDI Integrated Facility Services Inc.

To start the playback, press 1. For playback instructions, press 0. Recorded on the 12th of May, 2023. The length of the recording is 37 minutes, 15 seconds.

Good morning, ladies and gentlemen, and welcome to the GDI Integrated Facility Service First Quarter 2023 Results Conference Call. At this time, online is a listen-only mode. Following the presentation, we will conduct a question and answer session. If at any time during this call you require immediate assistance, please press star zero for the operator. This call is being recorded on Friday, May 12, 2023. I would now like to turn the conference over to Mr. Stéphane Lavigne, Senior Vice President and Chief Financial Officer. Please go ahead, sir.

Thank you, Porter. Good morning, all, and welcome to GDI's conference call to discuss our results for the first quarter of this call, 2023. My name is Stéphane Leving. I'm Senior Vice President, Chief Financial Officer of GDI. I'm with Claude Liga, President and CEO of GDI, and David Enchi, Aggregate Vice President of Corporate Development. Before we begin, I would like to make you aware that this call contains forward-looking information, and we ask listeners to refer to the full description of the forward-looking safe harbour provision that is fully described at the beginning in the NDNA file on CEDAR at the end of last night. I will begin the call with an overview of GDI's financial results for the first quarter of 2023, and will then invite Claude to provide his comments on the business. In the first quarter, GDI recorded revenue of $591 million, an increase of $96 million, or 19% over Q1 of last year. made up mainly of organic growth of 14% and growth from acquisitions of 2%. We recorded an adjusted EBITDA of $33 million in the quarter, a decrease of $3 million or 8% over Q1 of last year. In Q1, we modified our adjusted EBITDA definition to exclude configuration and customization costs for our strategic information technology project, which presently is the HRIS project that we began implementation planning in 2022, and launched on January 1st of this year. So far, we have spent $7 million on this project, which includes a $2 million capex, on a total budget of $10 million, and there were $1 million of costs in Q1 of 2023 that were excluded from adjusted EBITDA. Presently, approximately 5,500 people have been onboarded into our HRS platform, and the remainder of our employees are expected to be onboarding during 2023. Also in Q1, we made the decision to rename our business segments to more adequately describe their services offering. Gentle Sir Canada is now Business Services Canada, and Gentle US is Business Services USA. In addition, complementary service and corporate and elimination segments are now grouped under corporate and other segments. Then to our business segment. Our Business Service Canada segment recorded revenue of $141 million in Q1, a decrease of $1 million or 1% compared to the first quarter of 2022, and reported adjusted EBITDA of $14 million compared to $19 million in the first quarter of 2022, representing a decrease of $5 million. Our business service USA segment recorded revenue of $177 million in Q1, representing an increase of $14 million when compared to Q1 of 2022, increased partially attributable to the 2022 acquisitions, and the appreciation of the U.S. dollar relative to the Canadian dollar. The segment reported adjusted EBITDA of $12 million compared to $13 million in the first quarter of 2022, representing a decrease of $1 million. The organic revenue decline in Business Service Canada and Business Service USA segment is attributable to a decrease in COVID-related extra services as compared to Q1 of last year, which also led to lower adjusted income margin in both business service segments. Base service revenue is up both in Canada and in the U.S. Our technical service segment recorded revenue of $252 million, or growth of 47% over Q1 of 2022, including organic revenue growth of 43%. The segment generated an adjusted EBITDA of $11 million, representing an adjusted EBITDA margin of 4%. Revenue growth for the business is attributable to a strong increase in project revenue and higher service revenues compared to previous years. Finally, our corporate and other segments reported revenue of $21 million and a negative adjusted EBITDA of $4 million, compared to revenue of $18 million and negative adjusted EBITDA of $2 million in the Q1 of 2022. This segment also recorded organic growth of 17% in Q1 of 2023, mainly due to GDI's integrated specialty service business unit, which was launched at the beginning of 2022. The corporate and order segment is composed of our integrated specialty business service, our general products manufacturing and distribution business, as well as our corporate costs and elimination of intercompany transactions. I would like now to turn the call to Flo, who will provide further comments on GDI's performance during the quarter.