Total revenue of $596.6 million, or 1.1% higher versus prior
year
GAAP Net Loss of $3.6 million, or ($0.04) per share, Adjusted
EBITDA of $61.1 million and Adjusted Net Income of $15.6 million,
or $0.15 per share
Adjusted EBITDA and Adjusted EBITDA margin were among the
highest ever for the March quarter
Reaffirms full year fiscal 2019 guidance of $2.4 billion to
$2.47 billion in Total Revenue and $310 million to $318 million in
Adjusted EBITDA
BrightView Holdings, Inc. (NYSE: BV) (the “Company” or
“BrightView”), the leading commercial landscaping services company
in the United States, today reported unaudited results for the
second quarter ended March 31, 2019.
This press release features multimedia. View
the full release here:
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Second Quarter Fiscal 2019
Highlights
- Total Revenues for the quarter totaled
$596.6 million, a 1.1% increase versus the prior year quarter, with
2.9% higher Maintenance Services Segment revenues and 5.4% lower
Development Services Segment revenues;
- Net Loss of $3.6 million, or ($0.04)
per share, and a net loss margin of 0.6%, compared to Net Loss of
$22.1 million, or ($0.29) per share, and a net loss margin of 3.7%,
in the prior year quarter;
- Adjusted EBITDA of $61.1 million, or
18.4% growth over the prior year quarter, with an Adjusted EBITDA
margin of 10.2%, both of which were among the highest ever for the
March quarter;
- Adjusted Net Income of $15.6 million,
or $0.15 per share, compared to Adjusted Net Income of $7.6
million, or $0.10 per share, in the prior year quarter.
Six Months Fiscal 2019
Highlights
- Total Revenues for the six months
totaled $1,122.7 million, a 1.6% decline versus the prior year
period, with nearly flat Maintenance Services Segment revenues and
6.5% lower Development Services Segment revenues;
- Net Loss of $12.4 million, or ($0.12)
per share, and a net loss margin of 1.1%, compared to Net Loss of
$2.7 million, or ($0.04) per share, and a net loss margin of 0.2%,
in the prior year period;
- Adjusted EBITDA of $111.2 million, or
5.8% below the prior year period, with an Adjusted EBITDA margin of
9.9%;
- Adjusted Net Income of $26.0 million,
or $0.25 per share, compared to Adjusted Net Income of $21.0
million, or $0.27 per share, in the prior year period.
“Strong Maintenance Segment revenue and profitability
highlighted our second quarter results and drove growth at the
consolidated level. In fact, we delivered one of our best ever
March quarters, with notable performance in Adjusted EBITDA and
Adjusted EBITDA margin. In addition to gains in our Maintenance
business, the quarter included lower corporate expenses, and more
normalized levels of snowfall,” said Andrew Masterman, BrightView
President and Chief Executive Officer. “With the beginning of the
‘green’ season, we’re pleased with the trends in our Maintenance
landscape revenue and have built a robust book of business for the
remainder of the fiscal year in our Development Segment. We remain
confident in our full-year outlook and are maintaining our guidance
ranges for both total revenue and Adjusted EBITDA for the full-year
fiscal 2019.”
Fiscal 2019 Results – Total BrightView
Total BrightView - Operating Highlights Three
Months Ended March 31, Six Months Ended March 31,
($ in millions, except per share figures)
2019
2018 Change 2019
2018 Change Revenue
$ 596.6 $ 590.4 1.1% $ 1,122.7 $
1,141.5 (1.6%) Net (loss) income $ (3.6 ) $
(22.1 ) nm $ (12.4 ) $ (2.7 ) nm
Adjusted EBITDA $ 61.1 $ 51.6 18.4% $
111.2 $ 118.0 (5.8%) Adjusted EBITDA Margin
10.2 % 8.7 % 150 bps 9.9
% 10.3 % -40 bps Adjusted Net Income $
15.6 $ 7.6 106.3% $ 26.0 $ 21.0
24.1% Earnings per Share, GAAP $ (0.04 ) $ (0.29 )
nm $ (0.12 ) $ (0.04 ) nm Earnings per
Share, Adjusted $ 0.15 $ 0.10 54.6% $
0.25 $ 0.27 (6.9%) Weighted average number of common
shares outstanding 102.8 77.0
33.4% 102.6 77.1 33.2%
For the second quarter fiscal 2019, total revenue increased 1.1%
to $596.6 million due to an increase in Maintenance Services
Segment revenue, partially offset by a decline in Development
Services Segment revenue. Total Adjusted EBITDA increased 18.4%
driven by an increase in the Maintenance Services Segment coupled
with a reduction of corporate expenses, partially offset by a
decrease in the Development Services Segment Adjusted EBITDA, as
discussed further below.
For the six months ended March 31, 2019, total revenue decreased
1.6% to $1,122.7 million due to declines in both the Maintenance
Services Segment and Development Services Segment revenues. Total
Adjusted EBITDA was $111.2 million, down 5.8% versus the prior
year, driven by lower revenues, partially offset by a reduction of
corporate expenses.
Fiscal 2019 Results – Segments
Maintenance Services - Operating Highlights Three
Months Ended March 31, Six Months Ended March 31,
($ in millions)
2019 2018
Change 2019 2018
Change Landscape Maintenance $ 281.8
$ 270.0 4.4% $ 626.1 $ 623.1
0.5% Snow Removal $ 191.5 $ 190.1 0.8%
$ 239.7 $ 243.7 (1.6%) Total Revenue $ 473.3
$ 460.1 2.9% $ 865.8 $ 866.8
(0.1%) Adjusted EBITDA $ 65.0 $ 58.3 11.5%
$ 113.7 $ 118.9 (4.4%) Adjusted EBITDA Margin
13.7 % 12.7 % 100 bps
13.1 % 13.7 % -60 bps Capital
Expenditures $ 18.9 $ 12.8 47.8% $ 30.0
$ 19.5 54.2%
For the second quarter fiscal 2019, revenue in the Maintenance
Services Segment increased 2.9% to $473.3 million. Landscape
Maintenance Services revenue increased 4.4%. Acquisitions added
8.4% but were partially offset by a 4.0% negative revenue
contribution from commercial landscaping, including lower revenue
due to Managed Exits as the Company strategically reduced a number
of less profitable accounts established in previous years.
Including revenue contribution from acquisitions, snow removal
services revenue increased 0.8%.
Adjusted EBITDA for the Maintenance Services Segment in the
quarter increased 11.5% to $65.0 million, with the Adjusted EBITDA
margin increasing 100 basis points versus the prior year quarter.
The increase in segment profitability was mainly a result of the
increase in revenue described above, coupled with a continued focus
on efficiency initiatives to reduce overhead, personnel and related
costs across the Company’s core functions.
For the six months ended March 31, 2019, revenue in the
Maintenance Services Segment remained relatively flat at $865.8
million. Landscape Maintenance Services revenue increased 0.5%.
Acquisitions added 7.2% but were mostly offset by a 6.7% negative
revenue contribution from commercial landscaping, including a
difficult comparison with the revenue related to Hurricane Irma and
Maria clean-up, the final impact from the prior-year turnover of
national accounts, and lower revenue due to Managed Exits as the
Company strategically reduced the number of less profitable
accounts established in previous years. Snow removal services
revenue decreased 1.6% due to lower year-over-year snowfall in key
geographies, especially during the first quarter of fiscal
2019.
Adjusted EBITDA for the Maintenance Services Segment for the six
months ended March 31, 2019 decreased 4.4% to $113.7 million, with
the Adjusted EBITDA margin decreasing 60 basis points versus the
prior year period. The decline in segment profitability was mainly
a result of higher-margin hurricane clean-up activity in the first
quarter of fiscal 2018 and a decline in the contribution from snow
removal services due to timing and below average snowfall during
the first quarter compared to the prior year quarter.
Development Services - Operating Highlights
Three Months Ended March 31, Six Months Ended
March 31, ($ in millions)
2019
2018 Change 2019
2018 Change Revenue $
124.0 $ 131.0 (5.4%) $ 258.4 $ 276.2
(6.5%) Adjusted EBITDA $ 11.0 $ 12.9
(14.3%) $ 28.1 $ 33.3 (15.8%) Adjusted EBITDA
Margin 8.9 % 9.8 % -90 bps
10.9 % 12.1 % -120 bps Capital
Expenditures $ 3.5 $ 0.9 302.1% $ 6.7 $
1.8 275.6%
Revenues for the Development Services Segment decreased 5.4% to
$124.0 million for the second quarter fiscal 2019. Project revenue
derived from acquisitions coupled with commencement of work on new
projects contributed to offset a decrease driven by the timing of
work performed on certain large projects during the prior year
period.
Adjusted EBITDA for the Development Services Segment decreased
14.3% to $11.0 million in the quarter, negatively affected by the
decrease in net revenue described above, as well as an increase in
selling, general and administrative expense, which was the result
of a cash collection in the second quarter of fiscal 2018 on a
previously reserved receivable.
Revenues for the Development Services Segment decreased 6.5% to
$258.4 million for the six months ended March 31, 2019. Project
revenue derived from acquisitions coupled with commencement of work
on new projects partially offset a challenging comparison with
revenues generated from work performed on certain large projects in
the prior year period.
Adjusted EBITDA for the Development Services Segment decreased
15.8% to $28.1 million during the six months ended March 31, 2019,
negatively affected by the decrease in net revenue described above,
as well as an increase in selling, general and administrative
expense as described above.
Total BrightView Cash Flow Metrics Six
Months Ended March 31, ($ in millions)
2019
2018 Change Cash Provided by Operating
Activities $ 64.7 $ 79.2 (18.3%)
Adjusted Free Cash Flow $ 25.1 $ 58.2
(56.9%) Capital Expenditures $ 42.6 $ 44.1
(3.4%)
Net cash provided by operating activities for the six months
ended March 31, 2019 was $64.7 million, compared to $79.2 million
for the prior year. The decrease was primarily due to an increase
in accounts receivable due to timing of collections, partially
offset by an increase in deferred revenue. Adjusted Free Cash Flow
for the six months ended March 31, 2019 was $25.1 million, a
decrease in cash generation of $33.1 million versus the prior year.
The decrease is reflective of the decrease in net cash provided by
operating activities as well as an increase in capital expenditures
excluding the fiscal 2018 purchase of legacy ValleyCrest facilities
of $21.6 million.
For the six months ended March 31, 2019, capital expenditures
were $42.6 million, compared with $44.1 million last year. The
prior year period included the aforementioned purchase of legacy
ValleyCrest facilities. The Company also generated proceeds from
the sale of property and equipment of $3.0 million and $1.5 million
in the first half of fiscal 2019 and 2018, respectively. Net of the
legacy asset purchase and the proceeds from the sale of property
and equipment in each year, capital expenditures represented 3.5%
and 1.8% of revenue in the first half of fiscal 2019 and 2018,
respectively.
Total BrightView Balance Sheet Metrics ($ in
millions)
March 31, 2019 December
31, 2018 September 30, 2018 Total
Financial Debt1 $ 1,185.3 $ 1,179.1 $ 1,184.4
Total Cash & Equivalents $ 11.2 $ 17.1 $
35.2 Total Net Financial Debt2 to Adjusted EBITDA ratio 4.0x
4.1x 3.8x 1Total Financial Debt includes total
long-term debt, net of original issue discount, and capital lease
obligations 2Total Net Financial Debt equals Total Financial Debt
minus Total Cash & Equivalents
As of March 31, 2019, the Company’s Total Net Financial Debt was
$1.174 billion, an increase of $24.9 million compared to $1.149
billion at the fiscal year end. The Company’s Total Net Financial
Debt to Adjusted EBITDA ratio was 4.0x as of March 31, 2019,
compared with 4.1x as of December 31, 2018.
Recent Developments
New Independent Board MembersOn April 15, BrightView announced
the appointment of Jane Okun Bomba, President of Saddle Ridge
Consulting, and Mara Swan, Executive Vice President of Global
Strategy and Talent at ManpowerGroup, as independent members of its
Board of Directors. The appointments of Ms. Okun Bomba and Ms. Swan
expands the size of the board to eight members, four of whom have
been determined to be independent.
New Corporate Headquarters in Blue Bell, Pa.During the week of
April 29, 2019, the Company relocated its Corporate Headquarters to
a new facility in Blue Bell, Pennsylvania. The new headquarters
consolidates various corporate work groups from around the country.
It is also the new site of the BrightView National Training Center,
which will offer an expanded curriculum and train a larger number
of its field personnel across a number of topics designed to drive
incremental sales, improve customer retention and develop the
Company’s future leaders, among other initiatives.
Conference Call Information
A conference call to discuss the second quarter fiscal 2019
financial results is scheduled for May 8, 2019, at 10 a.m. Eastern
Daylight Time. The U.S. toll free dial-in for the conference call
is (877) 273-7124 and the international dial-in is (647) 689-5396.
The conference passcode is 7885175. A live audio webcast of the
conference call will be available on the Company’s investor website
https://investor.brightview.com, where presentation materials will
be posted prior to the call.
A telephone replay will be available shortly after the broadcast
through May 15, 2019, by dialing 800-585-8367 from the U.S., and
entering conference passcode 7885175. A replay of the audio webcast
also will be archived on the Company’s investor website.
About BrightView
BrightView is the largest provider of commercial landscaping
services in the United States. Through its team of approximately
20,000 employees, BrightView provides services ranging from
landscape maintenance and enhancements to tree care and landscape
development for thousands of customers’ properties, including
corporate and commercial properties, HOAs, public parks, hotels and
resorts, hospitals and other healthcare facilities, educational
institutions, restaurants and retail, and golf courses, among
others.
Forward Looking Statements
This press release contains forward-looking statements within
the meaning of Section 27A of the Securities Act of 1933, as
amended (the “Securities Act”) and Section 21E of the Securities
Exchange Act of 1934. These statements include, but are not limited
to, statements related to our expectations regarding the
performance of our industry, growth strategy, goals and
expectations concerning our market position, future operations,
margins, profitability, capital expenditures, liquidity and capital
resources and other financial and operating information. You can
identify these forward-looking statements by the use of words such
as “outlook,” “guidance,” “believes,” “expects,” “potential,”
“continues,” “may,” “will,” “should,” “could,” “seeks,” “projects,”
“predicts,” “intends,” “plans,” “estimates,” “anticipates” or the
negative version of these words or other comparable words. Such
forward-looking statements are subject to various risks,
uncertainties and factors, including general economic and financial
conditions; competitive industry pressures; the failure to retain
certain current customers, renew existing customer contracts and
obtain new customer contracts; a determination by customers to
reduce their outsourcing or use of preferred vendors; the dispersed
nature of our operating structure; our ability to implement our
business strategies and achieve our growth objectives; acquisition
and integration risks; the seasonal nature of our landscape
maintenance services; our dependence on weather conditions;
increases in prices for raw materials and fuel; product shortages
and the loss of key suppliers; our ability to accurately estimate
costs of a contract; the conditions and periodic fluctuations of
real estate markets, including residential and commercial
construction; our ability to retain our executive management and
other key personnel; our ability to attract and retain trained
workers and third-party contractors and re-employ seasonal workers;
any failure to properly verify employment eligibility of our
employees; subcontractors taking actions that harm our business;
our recognition of future impairment charges; laws and governmental
regulations, including those relating to employees, wage and hour,
immigration, human health and safety and transportation;
environmental, health and safety laws and regulations; the
distraction and impact caused by litigation, of adverse litigation
judgments or settlements resulting from legal proceedings; increase
in on-job accidents involving employees; any failure, inadequacy,
interruption, security failure or breach of our information
technology systems; any failure to protect the security of personal
information about our customers, employees and third parties; our
ability to adequately protect our intellectual property; occurrence
of natural disasters, terrorist attacks or other external events;
our ability to generate sufficient cash flow to satisfy our
significant debt service obligations; our ability to obtain
additional financing to fund future working capital, capital
expenditures, investments or acquisitions, or other general
corporate requirements; restrictions imposed by our debt agreements
that limit our flexibility in operating our business; increases in
interest rates increasing the cost of servicing our substantial
indebtedness; and counterparty credit worthiness risk or risk of
non-performance with respect to derivative financial instruments.
Additional factors that could cause BrightView’s results to differ
materially from those described in the forward-looking statements
can be found under “Item 1A. Risk Factors” in our Form 10-K for the
fiscal year ended September 30, 2018, as such factors may be
updated from time to time in our periodic filings with the SEC,
which are accessible on the SEC’s website at www.sec.gov.
Accordingly, there are or will be important factors that could
cause actual outcomes or results to differ materially from those
indicated in these statements. These factors should not be
construed as exhaustive and should be read in conjunction with the
other cautionary statements that are included in this release and
in our filings with the SEC. Any forward-looking statement made in
this press release speaks only as of the date on which it was made.
We undertake no obligation to publicly update or review any
forward-looking statement, whether as a result of new information,
future developments or otherwise, except as required by law.
Non-GAAP Financial Measures
To supplement the Company’s financial information presented in
accordance with GAAP and aid understanding of the Company’s
business performance, the Company uses certain non-GAAP financial
measures, namely “Adjusted EBITDA”, “Adjusted EBITDA Margin”,
“Adjusted Net Income” “Adjusted Earnings per Share” and “Adjusted
Free Cash Flow”. We believe Adjusted EBITDA, Adjusted EBITDA
Margin, Adjusted Net Income, Adjusted Earnings per Share and
Adjusted Free Cash Flow assist investors and in comparing our
results across reporting periods on a consistent basis by excluding
items that we do not believe are indicative of our core operating
performance. Management believes these non-GAAP financial measures
are useful to investors in highlighting trends in our operating
performance, while other measures can differ significantly
depending on long-term strategic decisions regarding capital
structure, the tax jurisdictions in which we operate and capital
investments. Management regularly uses these measures as tools in
evaluating our operating performance, financial performance and
liquidity. Management uses Adjusted EBITDA, Adjusted EBITDA Margin,
Adjusted Net Income, Adjusted Earnings per Share and Adjusted Free
Cash Flow to supplement comparable GAAP measures in the evaluation
of the effectiveness of our business strategies, to make budgeting
decisions, to establish discretionary annual incentive compensation
and to compare our performance against that of other peer companies
using similar measures. In addition, we believe that Adjusted
EBITDA, Adjusted EBITDA Margin, Adjusted Net Income, Adjusted Net
Income per Share and Adjusted Free Cash Flow are frequently used by
investors and other interested parties in the evaluation of
issuers, many of which also present Adjusted EBITDA, Adjusted
EBITDA Margin, Adjusted Net Income, Adjusted Earnings per Share and
Adjusted Free Cash Flow when reporting their results in an effort
to facilitate an understanding of their operating and financial
results and liquidity. Management supplements GAAP results with
non-GAAP financial measures to provide a more complete
understanding of the factors and trends affecting the business than
GAAP results alone.
Adjusted EBITDA: We define Adjusted EBITDA as net income (loss)
before interest, taxes, depreciation and amortization, as further
adjusted to exclude certain non-cash, non-recurring and other
adjustment items.
Adjusted EBITDA Margin: We define Adjusted EBITDA Margin as
Adjusted EBITDA, defined above, divided by Net Service
Revenues.
Adjusted Net Income: We define Adjusted Net Income as net income
(loss) including interest and depreciation, and excluding other
items used to calculate Adjusted EBITDA and further adjusted for
the tax effect of these exclusions and the removal of the discrete
tax items.
Adjusted Earnings per Share: We define Adjusted Earnings per
Share as Adjusted Net Income divided by the weighted average number
of common shares outstanding for the period.
Adjusted Free Cash Flow: We define Adjusted Free Cash Flow as
cash flows from operating activities less capital expenditures, net
of proceeds from the sale of property and equipment, further
adjusted for the acquisition of certain legacy properties
associated with our acquired ValleyCrest business.
Adjusted EBITDA, Adjusted EBITDA Margin, Adjusted Net Income,
Adjusted Earnings per Share and Adjusted Free Cash Flow are not
recognized terms under GAAP and should not be considered as an
alternative to net income (loss) or the ratio of net income (loss)
to net revenue as a measure of financial performance, cash flows
provided by operating activities as a measure of liquidity, or any
other performance measure derived in accordance with GAAP.
Additionally, these measures are not intended to be a measure of
free cash flow available for management’s discretionary use as they
do not consider certain cash requirements such as interest
payments, tax payments and debt service requirements. The
presentations of these measures have limitations as analytical
tools and should not be considered in isolation, or as a substitute
for analysis of our results as reported under GAAP. Because not all
companies use identical calculations, the presentations of these
measures may not be comparable to other similarly titled measures
of other companies and can differ significantly from company to
company.
BrightView Holdings, Inc. Consolidated
Balance Sheets
(Unaudited)
March 31, September 30, (in millions)*
2019 2018 Assets Current assets: Cash and cash
equivalents $ 11.2 $ 35.2 Accounts receivable, net 353.1 317.1
Unbilled revenue 93.8 99.9 Inventories 24.5 23.8 Other current
assets 52.5 55.2 Total current assets 535.1 531.2
Property and equipment, net 266.7 256.8 Intangible assets, net
274.6 290.5 Goodwill 1,799.2 1,766.8 Other assets 43.0
46.7 Total assets 2,918.6 2,891.9
Liabilities and Stockholders’ Equity Current liabilities:
Accounts payable $ 94.6 $ 93.6 Current portion of long-term debt
10.4 13.0 Deferred revenue 100.1 72.5 Current portion of
self-insurance reserves 42.9 34.5 Accrued expenses and other
current liabilities 130.2 117.9 Total current
liabilities 378.2 331.5 Long-term debt, net 1,147.5 1,141.3
Deferred tax liabilities 59.2 67.2 Self-insurance reserves 84.0
93.4 Other liabilities 25.8 31.2 Total liabilities
1,694.6 1,664.6 Stockholders’ equity:
Preferred stock, $0.01 par value; 50
shares authorized; no shares issued or outstanding as of December
31, 2018 and September 30, 2018
— —
Common stock, $0.01 par value; 500 shares
authorized; 105 and 104 shares issued and outstanding as of
December 31, 2018 and September 30, 2018, respectively
1.1 1.0 Additional paid-in-capital 1,437.9 1,426.3 Accumulated
deficit (203.2 ) (189.6 ) Accumulated other comprehensive loss
(11.8 ) (10.4 ) Total stockholders’ equity
1,224.0 1,227.3 Total liabilities and stockholders’ equity $
2,918.6 $ 2,891.9
(*) Amounts may not total due to rounding.
BrightView Holdings, Inc. Consolidated
Statements of Operations
(Unaudited)
Three Months Ended Six Months Ended March
31,
2019
March 31,
2018
March 31,
2019
March 31,
2018
(in millions)* Net service revenues $ 596.6 $ 590.4 $
1,122.7 $ 1,141.5 Cost of services provided 450.6
448.1 844.7 856.7 Gross profit 146.1 142.2 278.0
284.8 Selling, general and administrative expense 119.4 117.8 229.6
237.6 Amortization expense 13.8 29.3 28.9
60.4 Income (loss) from operations 12.8 (4.9 ) 19.5 (13.2 )
Other income (expense) 1.2 - (0.3 ) 1.0 Interest expense
18.9 25.1 36.1 50.0 Loss before income taxes
(4.9 ) (29.9 ) (16.9 ) (62.1 ) Income tax benefit 1.3
7.9 4.5 59.4 Net loss $ (3.6 ) $ (22.1 ) $ (12.4 ) $
(2.7 ) Loss per share: Basic and Diluted $ (0.04 ) $ (0.29 ) $
(0.12 ) $ (0.04 )
BrightView Holdings, Inc. Segment Reporting
(Unaudited)
Three Months Ended Six Months Ended March
31,
2019
March 31,
2018
March 31,
2019
March 31,
2018
(in millions)* Maintenance Services $ 473.3 $ 460.1 $ 865.8
$ 866.8 Development Services 124.0 131.0 258.4 276.2 Eliminations
(0.7 ) (0.7 ) (1.6 ) (1.6 ) Net Service
Revenues $ 596.6 $ 590.4 $ 1,122.7 $ 1,141.5 Maintenance Services $
65.0 $ 58.3 $ 113.7 $ 118.9 Development Services 11.0 12.9 28.1
33.3 Corporate (14.9 ) (19.5 ) (30.5 )
(34.2 ) Adjusted EBITDA $ 61.1 $ 51.6 $ 111.2 $ 118.0 Maintenance
Services 18.9 12.8 30.0 19.5 Development Services 3.5 0.9 6.7 1.8
Corporate 2.9 0.6 5.9 22.9 Capital
Expenditures $ 25.3 $ 14.3 $ 42.6 $ 44.1
(*) Amounts may not total due to rounding.
BrightView Holdings, Inc. Consolidated Statements
of Cash Flows
(Unaudited)
Six Months Ended March 31,
2019
March 31,
2018
(in millions)* Cash flows from operating activities: Net
loss $ (12.4 ) $ (2.7 ) Adjustments to reconcile net loss to net
cash provided by operating activities: Depreciation 41.0 38.8
Amortization of intangible assets 28.9 60.4 Amortization of
financing costs and original issue discount 1.9 5.3 Deferred taxes
(7.6 ) (59.9 ) Equity-based compensation 11.5 5.8 Hedge
ineffectiveness and realized gains 0.7 4.8 Provision for doubtful
accounts 1.0 0.7 Other non-cash activities, net (0.9 ) 3.7 Change
in operating assets and liabilities: Accounts receivable (33.5 )
(0.3 ) Unbilled and deferred revenue 31.9 18.6 Inventories (0.8 )
2.9 Other operating assets 4.0 (4.5 ) Accounts payable and other
operating liabilities (0.8 ) 5.5 Net cash provided by
operating activities 64.7 79.2 Cash flows from
investing activities: Purchase of property and equipment (42.6 )
(44.1 ) Proceeds from sale of property and equipment 3.0 1.5
Business acquisitions, net of cash acquired (49.3 ) (44.7 ) Other
investing activities, net 1.3 (0.4 ) Net cash used in
investing activities (87.7 ) (87.7 ) Cash flows from
financing activities: Repayments of capital lease obligations (2.8
) (3.2 ) Repayments of debt (92.8 ) (46.2 ) Proceeds from issuance
of common stock, net of share issuance costs — 0.1 Proceeds from
receivables financing agreement, net of financing costs 84.6 55.0
Proceeds from revolving credit facility 10.0 — Repurchase of common
stock and distributions — (0.5 ) Net cash (used in)
provided by financing activities (1.0 ) 5.3 Net
change in cash and cash equivalents (24.0 ) (3.2 ) Cash and cash
equivalents, beginning of period 35.2 12.8 Cash and
cash equivalents, end of period $ 11.2 $ 9.5
(*) Amounts may not total due to rounding.
BrightView Holdings, Inc.
Reconciliation of GAAP to Non-GAAP Financial Measures
(Unaudited)
Three Months Ended
March 31,
Six Months Ended
March 31,
(in millions)* 2019 2018 2019
2018 Adjusted EBITDA Net loss $ (3.6 ) $ (22.1
) $ (12.4 ) $ (2.7 ) Plus: Interest expense, net 18.9 25.1 36.1
50.0 Income tax benefit (1.3 ) (7.9 ) (4.5 ) (59.4 ) Depreciation
expense 21.7 17.7 41.0 38.8 Amortization expense 13.8 29.3 28.9
60.4 Establish public company financial reporting compliance (a)
1.3 0.2 1.7 2.8 Business transformation and integration costs (b)
4.7 2.1 8.9 18.9 Expenses related to initial public offering (c) —
2 — 2 Equity-based compensation (d) 5.6 4.3 11.5 5.8 Management
fees (e) — 0.7 — 1.3
Adjusted
EBITDA $ 61.1 $ 51.6 $
111.2 $ 118.0 Adjusted Net Income Net
loss $ (3.6 ) $ (22.1 ) $ (12.4 ) $ (2.7 ) Plus: Amortization
expense 13.8 29.3 28.9 60.4 Establish public company financial
reporting compliance (a) 1.3 0.2 1.7 2.8 Business transformation
and integration costs (b) 4.7 2.1 8.9 18.9 Expenses related to
initial public offering (c) — 2.1 — 2.1 Equity-based compensation
(d) 5.6 4.3 11.5 5.8 Management fees (e) — 0.7 — 1.3 Income tax
adjustment (f) (6.2 ) (9.1 ) (12.6 )
(67.7 )
Adjusted Net Income $ 15.6 $
7.5 $ 26.0 $ 21.0
Free Cash Flow and Adjusted Free Cash
Flow
Cash flows from operating activities $ 58.3 $ (3.3 ) $ 64.7 $ 79.2
Minus: Capital expenditures 25.3 14.3 42.6 44.1 Plus: Proceeds from
sale of property and equipment 1.2 0.8 3.0
1.5
Free Cash Flow $ 34.2 $
(16.8 ) $ 25.1 $ 36.6
Plus: ValleyCrest land and building acquisition (g) —
— — 21.6
Adjusted Free Cash Flow $
34.2 $ (16.8 ) $ 25.1
$ 58.2
(*) Amounts may not total due to rounding.
BrightView Holdings, Inc.
Reconciliation of GAAP to Non-GAAP
Financial Measures
(Unaudited) (a) Represents costs incurred to establish
public company financial reporting compliance, including costs to
comply with the requirements of Sarbanes-Oxley and the accelerated
adoption of the new revenue recognition standard (ASU 2014-09 –
Revenue from Contracts with Customers), and other miscellaneous
costs. (b) Business transformation and integration costs
consist of (i) severance and related costs; (ii) vehicle fleet
rebranding costs; (iii) business integration costs and (iv)
information technology infrastructure transformation costs and
other.
Three Months Ended
March 31,
Six Months Ended
March 31,
(in millions)* 2019 2018
2019 2018 Severance and related costs $
1.0 $ (0.4 ) $ 1.5 $ 2.2 Rebranding of vehicle fleet 0.1 1.9 0.4
12.1 Business integration 2.7 0.2 3.7 0.2 IT Infrastructure
transformation and other 0.9 0.4 3.3
4.4
Business transformation and integration costs $
4.7 $ 2.1 $ 8.9 $
18.9 (c) Represents expenses incurred for the
Company’s initial public offering (“IPO”) (d) Represents
equity-based compensation expense recognized for equity incentive
plans outstanding, including $3.1 million and $7.0 million related
to the IPO in the three and six months ended March 31, 2019.
(e) Represents fees paid pursuant to a monitoring agreement
terminated on July 2, 2018 in connection with the completion of the
IPO. (f) Represents the tax effect of pre-tax items excluded
from Adjusted Net Income and the removal of the applicable discrete
tax items, which collectively result in a reduction of income tax.
The tax effect of pre-tax items excluded from Adjusted Net Income
is computed using the statutory rate related to the jurisdiction
that was impacted by the adjustment after taking into account the
impact of permanent differences and valuation allowances. Discrete
tax items include changes in laws or rates, changes in uncertain
tax positions relating to prior years and changes in valuation
allowances. The six months ended March 31, 2018 amount includes a
$41.4 million benefit recognized as a result of the reduction in
the U.S. corporate income tax rate from 35% to 21% under the Tax
Act.
Three Months Ended
March 31,
Six Months Ended
March 31,
(in millions)* 2019 2018
2019 2018 Tax impact of pre-tax income
adjustments $ 6.1 $ 7.9 $ 11.9 $ 25.9 Discrete tax items 0.1
1.2 0.7 41.8
Income tax adjustment
$ 6.2 $ 9.1 $ 12.6
$ 67.7 (g) Represents the acquisition of
legacy ValleyCrest land and buildings in October 2017.
(*) Amounts may not total due to rounding.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20190508005140/en/
INVESTOR RELATIONS CONTACT:Daniel Schleiniger, VP of
Investor Relations484.567.7148Daniel.Schleiniger@BrightView.com
MEDIA CONTACT:Fred Jacobs, VP of Communications &
Public Affairs484.567.7244Fred.Jacobs@BrightView.com
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