- Revenue of $931.3 million,
increase of 29.2%
- Solid waste price growth of 4.9%
- Adjusted EBITDA of $222.9
million, increase of 24.4% and Net loss of $(277.9) million
- Adjusted Loss per Share of $(0.03) and Loss per share of $(0.77)
VAUGHAN, ON, May 11, 2020 /PRNewswire/ - GFL Environmental
Inc. (NYSE: GFL, TSX: GFL) ("GFL" or the "Company") today announced
its results for the first quarter of 2020.
"When we completed our initial public offering on March 5 of this year, we never thought we would
be reporting our first quarter as a public company in such
unprecedented times. Despite the significant slowdown of the
Canadian and U.S. economies in late March resulting from government
measures to limit the spread of COVID-19, we grew revenue in the
quarter by 29.2% and Adjusted EBITDA by 24.4% compared to the first
quarter of 2019. Our strong results for the quarter demonstrate the
resiliency of our business model," said Patrick Dovigi, Founder and Chief Executive
Officer.
"I am very proud of the hard work and commitment of our over
13,000 employees. Without them, we would not have been able to
successfully continue to provide our essential services to our
customers and communities during these challenging times.
Throughout the outbreak of COVID-19 we have remained focused on
ensuring the health and safety of our employees."
Mr. Dovigi added,"We used the proceeds from our IPO to
significantly de-lever our balance sheet. In April we raised
US$500 million of 4.25% secured bonds
maturing in June 2025, a net leverage
neutral financing. Together, these financings have well positioned
us to further execute our growth strategy and take advantage of
opportunities as they present themselves."
COVID-19 Response and Impact
The spread of COVID-19 has created a global health crisis that
has resulted in widespread disruption to economic activity in
the United States and Canada. The U.S. and Canadian governments as
well as numerous state, provincial and local governments have
implemented certain measures to attempt to slow and limit the
spread of COVID-19, including shelter-in-place and physical
distancing orders. The primary impact to our business has been
reduced commercial and industrial collection volumes as certain of
our customers reduced or suspended their services in response to
measures enacted by local authorities. The magnitude of the impacts
varied by region and were correlated to the timing and nature of
measures enacted. Our primary markets, most notably Toronto and Montreal, were more significantly impacted
than the secondary markets we service throughout Canada and the U.S. where we generate almost
two thirds of our solid waste revenues.
The health and safety of our employees remain our top priority.
In response to the pandemic, we have:
- Established a risk management team of senior leadership and
operational leads to identify, assess and respond to the impact of
COVID-19 on our operations and personnel.
- Implemented physical distancing protocols recommended by local
public health authorities.
- Reinforced proper hygiene practices, increased frequency of
cleaning of facilities, trucks and equipment.
- Ensured appropriate personal protective equipment and
sanitization supplies.
- Enhanced employee communications reinforcing safe
practices.
We have also closely managed our operating expenses and capital
expenditures by deferring non-essential capital expenditures,
reducing variable costs such as overtime, restricting discretionary
spending such as travel and postponing merit increases for salaried
employees.
The first quarter reflected a partial month's impact of COVID-19
whereas the second quarter is expected to include a full quarter of
COVID-19 related impacts. The revenue results for the month of
April 2020 reflected a 15.8% increase
over April 2019.
Excluding the impact of acquisitions and foreign exchange,
April 2020 revenue was 9.9% less than
April 2019, a decline primarily
resulting from reduced commercial and industrial collection volume
that we believe is primarily attributable to the general economic
impact of COVID-19. Solid waste revenue for the month of
April 2020 reflected an 8.7% decline
as compared to April 2019, or a 4.2%
decline when excluding the Canadian solid waste business which was
disproportionately impacted by the shut-down of commercial activity
in the provinces of Ontario and
Quebec. Over the past several
weeks, we have seen sequential increases in commercial and
industrial collection activity. Ultimately the total impact of
COVID-19 on our business will depend on the timing and extent to
which normal economic activity can be restored in the markets in
which we operate.
We believe that we are well capitalized and have ample liquidity
available to us, including over $700
million in cash at April 30,
2020 and over $600 million
available under our revolving credit facility. As a result of the
repayment of debt with the proceeds from our initial public
offering, we have no material debt maturing over the next five
years.
Q1 2020 Results
Revenue increased by 29.2% to $931.3
million in the first quarter of 2020 compared to the first
quarter of 2019 driven by significant revenue growth across all
reportable segments both organically and through acquisitions.
Adjusted EBITDA* increased 24.4% to $222.9 million in the first quarter of 2020
compared to the first quarter of 2019, primarily attributable to
strong revenue growth in the quarter. Net loss increased from
$93.4 million in the first quarter of
2019 to $277.9 million in the first
quarter of 2020 driven by costs associated with our initial public
offering, the early redemption of several series of our outstanding
unsecured bonds and the extinguishment of our 11% payment-in-kind
notes as part of the pre-closing capital changes implemented
immediately prior to our initial public offering.
Q1 2020 Earnings Call
GFL will host a conference call related to our first quarter
earnings on Tuesday, May 12, 2020 at
8:00 am Eastern time. Participants
can access the call by dialing (647) 490-5367 or (800) 367-2403
(confirmation code 3736927) approximately 10 minutes prior to
the scheduled start time. A copy of the presentation for the call
will be available on our website at https://investors.gflenv.com or
by clicking here.
About GFL
GFL, headquartered in Vaughan,
Ontario, is the fourth largest diversified environmental
services company in North America,
providing a comprehensive line of non-hazardous solid waste
management, infrastructure & soil remediation and liquid waste
management services through its platform of facilities throughout
Canada and in 23 states in
the United States. Across its
organization, GFL has a workforce of more than 13,000 employees and
provides its broad range of environmental services to more than
135,000 commercial and industrial customers and its solid
waste collection services to more than 4 million
households.
For more information, visit the GFL web site at www.gflenv.com.
To subscribe for investor email alerts please visit
https://investors.gflenv.com or click here.
____________________________
* A non-IFRS measure; see accompanying Non-IFRS Reconciliation
Schedule
Forward-Looking Statements
This release includes certain "forward-looking statements",
including statements relating to the expected impact of the
COVID-19 pandemic on the Company's operations, liquidity and
financial results and the Company's ability to execute on its
growth strategy. In some cases, but not necessarily in all cases,
forward-looking statements can be identified by the use of forward
looking terminology such as "plans", "targets", "expects" or "does
not expect", "is expected", "an opportunity exists", "is
positioned", "estimates", "intends", "assumes", "anticipates" or
"does not anticipate" or "believes", or variations of such words
and phrases or state that certain actions, events or results "may",
"could", "would", "might", "will" or "will be taken", "occur" or
"be achieved". In addition, any statements that refer to
expectations, projections or other characterizations of future
events or circumstances contain forward-looking statements.
Forward-looking statements are not historical facts, nor guarantees
or assurances of future performance but instead represent
management's current beliefs, expectations, estimates and
projections regarding future events and operating performance.
Forward-looking statements are necessarily based on a number of
opinions, assumptions and estimates that, while considered
reasonable by GFL as of the date of this release, are subject to
inherent uncertainties, risks and changes in circumstances that may
differ materially from those contemplated by the forward-looking
statements. Important factors that could cause actual results to
differ, possibly materially, from those indicated by the
forward-looking statements include, but are not limited to, the
"Risk Factors" section of the Company's final prospectus relating
to its initial public offering dated March
2, 2020 and the Company's other periodic filings with the
SEC and the securities commissions or similar regulatory
authorities in Canada. These
factors are not intended to represent a complete list of the
factors that could affect GFL. However, such risk factors should be
considered carefully. There can be no assurance that such estimates
and assumptions will prove to be correct. You should not place
undue reliance on forward-looking statements, which speak only as
of the date of this release. GFL undertakes no obligation to
publicly update any forward-looking statement, except as required
by applicable securities laws.
Non-IFRS Measures
This press release makes reference to certain non-IFRS measures.
These measures are not recognized measures under IFRS and do not
have a standardized meaning prescribed by IFRS and are therefore
unlikely to be comparable to similar measures presented by other
companies. Accordingly, these measures should not be considered in
isolation or as a substitute for analysis of our financial
information reported under IFRS. Rather, these non-IFRS measures
are used to provide investors with supplemental measures of our
operating performance and thus highlight trends in our core
business that may not otherwise be apparent when relying solely on
IFRS measures. We also believe that securities analysts, investors
and other interested parties frequently use non-IFRS measures in
the evaluation of issuers. Our management also uses non-IFRS
measures in order to facilitate operating performance comparisons
from period to period, to prepare annual operating budgets and
forecasts and to determine components of management
compensation.
Adjusted EBITDA is a supplemental measure used by management and
other users of our financial statements including our lenders and
investors, to assess the financial performance of our business
without regard to financing methods or capital structure. Adjusted
EBITDA is also a key metric that management uses prior to execution
of any strategic investing or financing opportunity. For example,
management uses Adjusted EBITDA as a measure in determining the
value of acquisitions, expansion opportunities, and dispositions.
In addition, Adjusted EBITDA is utilized by financial institutions
to measure borrowing capacity. Adjusted EBITDA is calculated by
adding and deducting, as applicable, certain expenses, costs,
charges or benefits incurred in such period which in management's
view are either not indicative of our underlying business
performance or impact the ability to assess the operating
performance of our business.
Net leverage is a supplemental measure used by management to
evaluate the underlying trends in the business and capital
allocation strategies. Net leverage is equal to our gross debt,
reduced by our cash and cash equivalents, divided by Run-Rate
EBITDA.
Run-Rate EBITDA represents Adjusted EBITDA for the applicable
period as adjusted to give effect to management's estimates of (a)
Acquisition EBITDA Adjustments and (b) the impact of annualization
of certain new municipal and disposal contracts and cost savings
initiatives, entered into, commenced or implemented, as applicable,
in such period, as if such contracts or costs savings initiatives
had been entered into, commenced or implemented, as applicable, on
the first day of such period. These adjustments reflect monthly
allocations of Acquisition EBITDA for the acquired businesses based
on straight line proration. As a result, these estimates do not
take into account the seasonality of a particular acquired
business. While we do not believe the seasonality of any one
acquired business is material when aggregated with other acquired
businesses, the estimates may result in a higher or lower
adjustment to our Run-Rate EBITDA than would have resulted had we
adjusted for the actual results of each of the acquired businesses
for the period prior to our acquisition. We primarily use Run-Rate
EBITDA to show how the Company would have performed if each of the
interim acquisitions had been consummated at the start of the
period as well as to show the impact of the annualization of
certain new municipal and disposal contracts and cost savings
initiatives. We also believe that Run-Rate EBITDA is useful to
investors and creditors to monitor and evaluate our borrowing
capacity and compliance with certain of our debt covenants.
Acquisition EBITDA represents, for the applicable period,
management's estimates of the annual Adjusted EBITDA of an acquired
business, based on its most recently available historical financial
information at the time of acquisition, as adjusted to (a) give
effect to the elimination of expenses related to the prior owners
and certain other costs and expenses that are not indicative of the
underlying business performance, if any, as if such business had
been acquired on the first day of such period ("Acquisition EBITDA
adjustments"), and (b) give effect to contract and acquisition
annualization for contracts entered into and acquisitions completed
by such acquired business prior to our acquisition. Further
adjustments are made to such annual Adjusted EBITDA to reflect
estimated operating cost savings and synergies, if any, anticipated
to be realized upon acquisition and integration of the business
into our operations. We use Acquisition EBITDA for the acquired
businesses to adjust our Adjusted EBITDA to include a proportional
amount of the Acquisition EBITDA of the acquired businesses based
upon the respective number of months of operation for such period
prior to the date of our acquisition of each such business.
Adjusted Net Income/Loss represents net income/loss adjusted for
(a) amortization of intangibles, (b) the increase in property,
plant and equipment depreciation as a result of the
recapitalization that occurred on May 31,
2018, (c) the IPO transaction related expenses (d) IPO share
based payments, (e) loss on the extinguishment of debt (f)
amortization of deferred financing costs (g) loss or gain on the
revaluation of the tangible equity units ("TEUs"), (h) foreign
exchange loss or gain, (i) acquisition, rebranding and other
costs, (j) TEU amortization expense, and (k) the tax impact of the
forgoing. Adjusted loss per share is defined as Adjusted Net
Income/Loss divided by the weighted average shares in the period.
We believe that Adjusted loss per share provides a meaningful
comparison of current results to prior periods' results by
excluding items that the Company does not believe reflect its
fundamental business performance.
All references to "$" in this press release are to Canadian
dollars, unless otherwise noted.
GFL Environmental
Inc.
|
|
Unaudited interim
condensed consolidated statements of operations and comprehensive
income (loss)
|
|
Three month period
ended March 31, 2020
|
|
(In thousands of
dollars except per share amounts)
|
|
|
March
31,
2020
|
|
March
31,
2019
|
|
$
|
|
$
|
Revenue
|
931,324
|
|
720,898
|
Expenses
|
|
|
|
Cost of
sales
|
852,303
|
|
653,459
|
Selling, general and
administrative expenses
|
155,059
|
|
82,127
|
Interest and other
finance costs
|
269,409
|
|
123,947
|
Deferred purchase
consideration
|
1,000
|
|
1,000
|
Loss (gain) on sale of
property, plant and equipment
|
1,629
|
|
(180)
|
Loss (gain) on foreign
exchange
|
106,039
|
|
(16,627)
|
Mark-to-market gain on
TEU derivative purchase contract
|
(88,439)
|
|
—
|
|
1,297,000
|
|
843,726
|
Loss before income
taxes
|
(365,676)
|
|
(122,828)
|
Current income tax
expense (recovery)
|
1,690
|
|
(182)
|
Deferred tax
recovery
|
(89,416)
|
|
(29,254)
|
Income tax
recovery
|
(87,726)
|
|
(29,436)
|
Net
loss
|
(277,950)
|
|
(93,392)
|
Items that may be
subsequently reclassified to net loss
|
|
|
|
Currency translation
adjustment
|
277,842
|
|
(35,806)
|
Fair value movements
on cash flow hedges, net of tax
|
14,326
|
|
(2,091)
|
Other comprehensive
income (loss)
|
292,168
|
|
(37,897)
|
Total
comprehensive income (loss)
|
14,218
|
|
(131,289)
|
Loss per
share
|
|
|
|
Basic
|
(0.77)
|
|
(0.64)
|
Diluted
|
(0.77)
|
|
(0.64)
|
GFL
Environmental Inc.
|
|
Unaudited interim
condensed consolidated statements of financial
position
|
|
As at March
31, 2020
|
|
(In thousands of
dollars except as otherwise stated)
|
|
|
|
|
|
March
31,
2020
|
|
December
31,
2019
|
|
$
|
|
$
|
Assets
|
|
|
|
Current
assets
|
|
|
|
Cash
|
91,356
|
|
574,797
|
Trade and other
receivables, net of allowance
|
761,973
|
|
713,356
|
Prepaid expenses and
other assets
|
150,430
|
|
132,112
|
|
1,003,759
|
|
1,420,265
|
Non-current
assets
|
|
|
|
Property, plant, and
equipment, net
|
3,362,774
|
|
2,850,062
|
Intangible assets,
net
|
3,293,118
|
|
2,848,024
|
Other long-term
assets
|
33,541
|
|
31,672
|
Goodwill
|
6,009,488
|
|
5,173,780
|
|
13,702,680
|
|
12,323,803
|
Liabilities
|
|
|
|
Current
liabilities
|
|
|
|
Accounts payable and
accrued liabilities
|
749,464
|
|
732,041
|
Income taxes
payable
|
1,402
|
|
2,885
|
Current portion of
long term debt
|
4,769
|
|
64,385
|
Current portion of
lease obligations
|
39,931
|
|
33,150
|
Current portion of due
to related party
|
9,900
|
|
7,000
|
Current portion of
tangible equity unit amortizing note
|
67,801
|
|
—
|
Current portion of
landfill closure and post-closure obligations
|
19,034
|
|
25,624
|
|
892,301
|
|
865,085
|
Non-current
liabilites
|
|
|
|
Long-term
debt
|
4,484,326
|
|
7,560,660
|
Lease
obligations
|
163,473
|
|
158,872
|
Other long-term
liabilities
|
12,975
|
|
12,496
|
Due to related
party
|
40,100
|
|
14,000
|
Deferred income tax
liabilities
|
803,633
|
|
733,787
|
Tangible equity unit
amortizing note
|
103,883
|
|
—
|
Tangible equity units
purchase contract
|
823,826
|
|
—
|
Landfill closure and
post-closure obligations
|
245,194
|
|
210,970
|
|
7,569,711
|
|
9,555,870
|
Shareholders'
equity
|
|
|
|
Share
capital
|
6,859,674
|
|
3,524,532
|
Contributed
surplus
|
32,119
|
|
16,443
|
Deficit
|
(1,048,266)
|
|
(770,316)
|
Accumulated other
comprehensive income (loss)
|
289,442
|
|
(2,726)
|
|
6,132,969
|
|
2,767,933
|
|
13,702,680
|
|
12,323,803
|
GFL Environmental
Inc.
|
|
Consolidated
statements of cash flows
|
|
Three month
period ended March 31, 2020
|
|
(In thousands of
dollars except as otherwise stated)
|
|
|
March 31,
2020
|
|
March 31,
2019
|
|
$
|
|
$
|
|
|
|
|
Operating
activities
|
|
|
|
Net
loss
|
(277,950)
|
|
(93,392)
|
Adjustments for
non-cash items
|
|
|
|
Depreciation
and amortization of property, plant and equipment
|
122,691
|
|
94,126
|
Amortization of
intangible assets
|
99,114
|
|
80,719
|
Interest and
other finance costs
|
269,409
|
|
123,947
|
Share based
payments
|
15,676
|
|
3,619
|
Loss (gain) on
unrealized foreign exchange on long-term debt
|
71,160
|
|
(21,021)
|
Loss (gain) on
sale of property, plant and equipment
|
1,629
|
|
(180)
|
Mark-to-market
gain on TEU purchase contract
|
(88,439)
|
|
—
|
Mark-to-market
loss on fuel hedge
|
1,206
|
|
—
|
Current income
tax expense (recovery)
|
1,690
|
|
(182)
|
Deferred tax
recovery
|
(89,417)
|
|
(29,254)
|
Interest paid in cash, net
|
(159,689)
|
|
(77,179)
|
Income taxes paid in cash, net
|
(3,173)
|
|
—
|
Changes in non-cash working capital items
|
(53,976)
|
|
(99,798)
|
Landfill closure and post-closure expenditures
|
(1,222)
|
|
(771)
|
|
(91,291)
|
|
(19,366)
|
Investing
activities
|
|
Proceeds
on sale of property, plant and equipment
|
400
|
|
1,000
|
Purchase
of property, plant and equipment and intangible assets
|
(100,151)
|
|
(99,580)
|
Business
acquisitions, net of cash acquired
|
(1,125,985)
|
|
(113,986)
|
|
(1,225,736)
|
|
(212,566)
|
Financing
activities
|
|
|
|
Repayment of lease
obligations
|
(31,337)
|
|
(7,788)
|
Issuance of long-term
debt
|
815,730
|
|
221,043
|
Repayment of long-term
debt
|
(4,317,094)
|
|
(9,388)
|
Issuance of share
capital, net of issuance costs
|
3,257,512
|
|
—
|
Issuance of tangible
equity units, net of issuance costs
|
1,006,923
|
|
—
|
Return of
capital
|
(804)
|
|
(804)
|
Payment of financing
costs
|
(295)
|
|
(2,685)
|
Issuance of loan from
related party
|
29,000
|
|
—
|
Repayment of loan to
related party
|
—
|
|
(3,500)
|
Cheques issued in
excess of cash on hand
|
—
|
|
18,932
|
|
759,635
|
|
215,810
|
Decrease in
cash
|
(557,392)
|
|
(16,122)
|
Changes due to
foreign exchange revaluation of cash
|
73,951
|
|
8,687
|
Cash, beginning of
period
|
574,797
|
|
7,445
|
Cash, end of
period
|
91,356
|
|
10
|
Supplementary
information
|
|
|
|
Business acquisitions
financed through issuance of share capital
|
78,434
|
|
—
|
Asset additions
financed through leases
|
14,906
|
|
26,658
|
SUPPLEMENTAL DATA
You should read the following information in conjunction with
our audited consolidated financial statements and notes thereto as
of and for the year ended December 31,
2019 as well as our unaudited interim financial statements
and notes thereto for the quarter ended March 31, 2020.
Solid Waste Growth
The following table summarizes the components of our solid waste
growth for the periods indicated:
|
March 31, 2020
|
|
March 31, 2019
|
Price and
surcharges
|
4.9%
|
|
4.0%
|
Volume
|
(0.1%)
|
|
(3.3%)
|
Recycling
|
(0.2%)
|
|
(1.0%)
|
Foreign exchange
impact
|
0.8%
|
|
1.2%
|
Acquisitions
|
26.5%
|
|
134.9%
|
Total
growth
|
31.9%
|
|
135.8%
|
Net Leverage
The following table presents the calculation of Net Leverage for
the periods indicated (all amounts are in millions of dollars
unless otherwise stated):
|
March 31, 2020
|
|
December 31, 2019
|
Total debt,
gross
|
$
|
4,725.3
|
|
$
|
7,675.7
|
Less cash and cash
equivalents
|
(91.4)
|
|
(574.8)
|
|
4,634.0
|
|
7,100.9
|
|
|
|
|
Trailing twelve
months Adjusted EBITDA
|
869.4
|
|
825.8
|
Acquisition EBITDA
adjustments
|
190.1
|
|
98.9
|
Run rate
EBITDA
|
$
|
1,059.5
|
|
$
|
924.7
|
|
|
|
|
|
|
Net
Leverage
|
4.37x
|
|
7.68x
|
April Flash Results
The following table summarizes the components of our revenue
growth in April 2020 compared to
April 2019.
|
Contribution
from
Acquisitions
|
|
Organic Growth
|
|
Foreign Exchange
|
|
Total
Revenue Growth
|
Solid
waste:
|
|
|
|
|
|
|
|
Canada
|
28.6%
|
|
(15.6%)
|
|
0.0%
|
|
13.0%
|
USA
|
20.9%
|
|
(4.2%)
|
|
4.9%
|
|
21.6%
|
Total solid
waste
|
23.9%
|
|
(8.7%)
|
|
3.0%
|
|
18.2%
|
Infrastructure and
soil remediation
|
11.6%
|
|
(4.4%)
|
|
0.0%
|
|
7.3%
|
Liquid
waste
|
34.8%
|
|
(26.4%)
|
|
0.9%
|
|
9.3%
|
Total
|
23.3%
|
|
(9.9%)
|
|
2.4%
|
|
15.8%
|
NON-IFRS RECONCILIATION SCHEDULE
Reconciliation of Adjusted EBITDA to Net Loss
The following table provides a reconciliation of our net loss to
EBITDA and Adjusted EBITDA for the periods presented:
|
The first quarter
of
|
(expressed in
millions of dollars)
|
2020
|
|
2019
|
Net Loss
|
$
|
(277.9)
|
|
$
|
(93.4)
|
Add:
|
|
|
|
Interest and other
finance costs
|
269.4
|
|
123.9
|
Depreciation and
amortization
|
122.7
|
|
94.1
|
Amortization of
intangible assets
|
99.1
|
|
80.7
|
Income tax
recovery
|
(87.7)
|
|
(29.4)
|
EBITDA
|
125.5
|
|
176.0
|
Add:
|
|
|
|
Loss (gain) on sale of
property, plant and equipment
|
1.6
|
|
(0.2)
|
Loss (gain) on foreign
exchange(1)
|
106.0
|
|
(16.6)
|
Share-based
payments(2)
|
15.7
|
|
3.6
|
Mark to market — fuel
hedge
|
1.2
|
|
—
|
Transaction
costs(3)
|
11.2
|
|
8.3
|
IPO transaction
costs(4)
|
41.3
|
|
—
|
Acquisition,
rebranding and other integration costs(5)
|
7.7
|
|
7.0
|
Mark-to-market gain on
TEU derivative purchase contract(6)
|
(88.4
)
|
|
—
|
Deferred purchase
considerations
|
1.0
|
|
1.0
|
Adjusted
EBITDA
|
$
|
222.9
|
|
$
|
179.1
|
_____________________________
|
(1)
|
Consists of (i)
non-cash gains and losses on foreign exchange and interest rate
swaps entered into in connection with our debt instruments, (ii)
and gains and losses attributable to foreign exchange rate
fluctuations.
|
|
|
(2)
|
This is a non-cash
item and consists of the amortization of the estimated fair market
value of share-based options granted to certain members of
management under share-based option plans.
|
|
|
(3)
|
Consists of
acquisition, integration and other costs such as legal, consulting
and other fees and expenses incurred in respect of acquisitions and
financing activities completed during the applicable period. We
expect to incur similar costs in connection with other acquisitions
in the future and, under IFRS, such costs relating to acquisitions
are expensed as incurred and not capitalized. This is part of
SG&A.
|
|
|
(4)
|
Consists of costs
associated with the IPO, such as legal, audit, regulatory and other
fees and expenses incurred in connection with the IPO, as well as
underwriting fees related to the TEUs that were expensed as
incurred.
|
|
|
(5)
|
Consists of costs
related to the rebranding of equipment acquired through business
acquisitions. We may incur similar expenditures in the future in
connection with other acquisitions. This is part of cost of goods
sold.
|
|
|
(6)
|
This is a non-cash
item that consists of the fair value "mark to market" adjustment on
the TEU Purchase Contract.
|
Reconciliation of Adjusted net loss to net loss
The following table provides a reconciliation of our net loss to
Adjusted net loss and Adjusted loss per share basic and diluted for
the periods presented:
|
The first quarter
of
|
($ millions unless
otherwise noted)
|
2020
|
|
2019
|
Net
loss
|
$
(277.9)
|
|
$
(93.4)
|
Adjustments:
|
|
|
|
Plus: Amortization of
intangibles(1)
|
99.1
|
|
80.7
|
Plus: PP&E
depreciation increase due to recapitalization
|
4.7
|
|
4.7
|
Plus: IPO transaction
costs(2)
|
41.3
|
|
—
|
Plus: Loss on
extinguishment on debt(3)
|
133.2
|
|
—
|
Plus: Amortization of
deferred financing costs
|
17.4
|
|
—
|
Plus: Mark-to-market
gain on TEU derivative purchase contract(4)
|
(88.4)
|
|
—
|
Plus: Foreign exchange
loss (gain)(5)
|
106.0
|
|
(16.6)
|
Plus: Transaction
costs(6)
|
11.2
|
|
8.3
|
Plus: Acquisition
rebranding and other integration
costs(7)
|
7.7
|
|
7.0
|
Plus: TEU amortization
expense
|
0.2
|
|
—
|
Plus: Tax
effect(8)
|
$
(66.0)
|
|
$
(22.3)
|
Adjusted net loss
|
(11.5)
|
|
(31.5)
|
Adjusted loss per
share basic and diluted ($)
|
$
(0.03)
|
|
$
(0.18)
|
Weighted
Average number of shares basic and diluted
|
326,420,754
|
|
177,734,367
|
|
(1)
|
This is a non-cash
item and consists of the amortization of intangible assets such as
customer lists, municipal contracts, non-complete agreements, trade
name, certificates of approval and other licenses.
|
|
|
(2)
|
Consists of costs
associated with the IPO, such as legal, audit, regulatory and other
fees and expenses incurred in connection with the IPO, as well as
underwriting fees related to the TEUs that were expensed as
incurred.
|
|
|
(3)
|
This consists of
interest and penalties related to loss on extinguishment of the PIK
Notes and the redemption of the 2022 Notes and the 2023 Notes in
their entirety and partial early repayment of the 2026 Notes and
2027 Notes.
|
|
|
(4)
|
This is a non-cash
item that consists of the fair value "mark to market" adjustment on
the TEU Purchase Contract.
|
|
|
(5)
|
Consists of (i)
non-cash gains and losses on foreign exchange and interest rate
swaps entered into in connection with our debt instruments, (ii)
and gains and losses attributable to foreign exchange rate
fluctuations.
|
|
|
(6)
|
Consists of
acquisition, integration and other costs such as legal, consulting
and other fees and expenses incurred in respect of acquisitions and
financing activities completed during the applicable period. We
expect to incur similar costs in connection with other acquisitions
in the future and, under IFRS, such costs relating to acquisitions
are expensed as incurred and not capitalized. This is part of
SG&A.
|
|
|
(7)
|
Consists of costs
related to the rebranding of equipment acquired through business
acquisitions. We may incur similar expenditures in the future in
connection with other acquisitions. This is part of cost of goods
sold.
|
|
|
(8)
|
Consists of the tax
effect of the adjustments to net loss.
|
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SOURCE GFL Environmental Inc.