- Revenue of $993.3 million,
increase of 19.5%
- Adjusted EBITDA* of $261.5
million, increase of 23.4%
- Adjusted EBITDA* margin of 26.3%, increase of 80 basis
points. Solid Waste Adjusted EBITDA margin of 30.6%, increase of
180 basis points
- Adjusted earnings per share* of $0.03; Loss per share of $(0.32)
- Announced acquisition of divesture package from Waste
Management and ADS
- Cash balance of $724 million
and over $1.3 billion of available
liquidity
VAUGHAN, ON, Aug. 5, 2020 /CNW/ - GFL Environmental Inc.
(NYSE: GTL) (TSX: GFL) ("GFL" or the "Company") today
announced its results for the second quarter of 2020.
"We are very pleased with our strong results for the quarter.
Despite the impacts of COVID-19 on parts of the North American
economy, we were able to grow revenue in the quarter by 19.5% and
Adjusted EBITDA by 23.4%, compared to the second quarter of 2019,
resulting in our highest ever reported revenue, Adjusted EBITDA and
Adjusted EBITDA margin. Our results for the quarter re-inforce the
resiliency of our business model and our success in executing our
margin enhancing strategic initiatives. Our skilled team of
managers and operators exceeded our expectations in responding to
the slowdown resulting from the pandemic" said Patrick Dovigi, Founder and Chief Executive
Officer. "Over the course of the quarter as markets and economies
began to re-open we saw, and continue to see, sequential increases
in commercial activity and volumes in the markets that we
serve."
"In response to the spread of COVID-19 and resulting
governmental measures, we have implemented business continuity
initiatives focused on prioritizing the health and safety of our
workforce. I want to thank our over 13,000 employees for their
continued hard work and commitment during these challenging times.
Without them, we would not be able to provide our essential
services to the customers and communities that depend on us."
Mr. Dovigi added "We remain focused on pursuing our growth
strategies, including through organic revenue growth and
acquisitions. In June we announced the acquisition from Waste
Management, Inc. and Advanced Disposal Services, Inc. of a
portfolio of vertically integrated solid waste collection,
transfer, recycling and disposal assets across 10 states. The
acquisition, which is targeted to close in the third quarter of
2020, is expected to be financed through a combination of capacity
under our revolving credit facility and cash on hand. Following the
acquisition we expect to maintain our current credit rating profile
and leverage within previously stated ranges. With our strong
balance sheet, available liquidity and proven access to the
capital markets, we believe we are well-positioned to continue to pursue strategic and accretive opportunities as they present themselves."
Second Quarter and Year to Date Results
Revenue increased by 19.5% to $993.3
million in the second quarter of 2020 compared to the second
quarter of 2019. Solid waste core price for the second quarter of
2020 was 3.7% compared to 4.4% in the comparable quarter of the
prior year, resulting from our decision to temporarily suspend
pricing initiatives in response to COVID-19 disruptions. Solid
waste volumes declined 8.3% for the second quarter of 2020, with
80% of the decline attributable to our commercial and industrial
collection operations. Revenue for the six months ended
June 30, 2020 was $1,924.6 million, an increase of 24.0% compared
to the same period in 2019. The increase in both periods was driven
by significant revenue growth across all reportable segments both
organically and through acquisitions.
Adjusted EBITDA* increased by 23.4% to $261.5 million in the second quarter of 2020
compared to the second quarter of 2019, primarily attributable to
strong revenue growth in the quarter. Adjusted EBITDA* includes
$2.5 million of COVID-19 related
costs specifically attributable to incremental personal protective
equipment as well as $3.5 million of
incremental bad debt expenses. Adjusted EBITDA* margin was 26.3%
for the second quarter of 2020 as compared to 25.5% in the prior
year period. Net loss increased from $68.1
million for the second quarter of 2019 to $115.5 million for the second quarter of 2020
driven primarily by the changes in Adjusted EBITDA* partially
offset by a mark-to-market loss on our tangible equity unit
derivative purchase contracts.
Adjusted EBITDA* increased by 23.9% to $484.3 million for the six months ended
June 30, 2020 compared to the same
period in the prior year, primarily attributable to strong revenue
growth in the period. Net loss increased from $161.4 million for the six months ended
June 30, 2019 to $393.5 million for the six months ended
June 30, 2020 driven by costs
associated with our initial public offering and 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.
Cash flow from operating activities increased by 137.3% to
$132.2 million in the second quarter
of 2020 compared to the second quarter of 2019. For the six months
ended June 30, 2020, cash flow from
operating activities was $82.0
million, an increase of 125.9% compared to the same period
in the prior year.
Q2 2020 Earnings Call
GFL will host a conference call related to our second quarter
earnings on Thursday, August 6, 2020
at 8:00 am Eastern time. A live audio
webcast of the conference call can be accessed by logging onto the
Company's Investors page at investors.gflenv.com or by clicking
here or listeners may access the call toll-free by dialing (833)
968-1934 (conference ID 2382886) approximately 15 minutes prior to
the scheduled start time. For those unable to listen live, an audio
replay of the call will be available until August 20, 2020 by dialing (800) 585-8367 or
(416) 621- 4642. 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 timing and financing
of the acquisition described above, our expected credit rating, the
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. Adjusted EBITDA margin represents
Adjusted EBITDA divided by revenue. We use Adjusted EBITDA Margin
to facilitate a comparison of the operating performance of each of
our operating segments on a consistent basis reflecting factors and
trends affecting our business.
Adjusted Net Income (Loss) represents net income (loss) adjusted
for (a) amortization of intangibles, (b) the increase in property,
plant and equipment depreciation, (c) the IPO transaction related
expenses, (d) loss on the extinguishment of debt (e) amortization
of deferred financing costs (f) loss or gain on the revaluation of
the tangible equity units ("TEUs"), (g) foreign exchange loss or
gain, (h) transaction costs, (i) acquisition, rebranding and other
costs, (j) TEU amortization expense, and (k) the tax impact of the
forgoing. Adjusted earnings (loss) per share is defined as Adjusted
Net Income (Loss) divided by the weighted average shares in the
period. We believe that Adjusted earnings (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.
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 (defined below) 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.
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 Loss
(In millions of dollars except per share amounts)
|
|
Three months
ended
June 30,
|
Six months
ended
June 30,
|
|
Notes
|
|
2020
|
|
2019
|
|
2020
|
|
2019
|
Revenue
|
12
|
$
|
993.3
|
$
|
831.4
|
$
|
1,924.6
|
$
|
1,552.3
|
Expenses
|
|
|
|
|
|
Cost of
sales
|
|
881.3
|
739.5
|
1,733.6
|
1,393.0
|
Selling, general and
administrative expenses
|
|
104.1
|
81.4
|
259.2
|
163.6
|
Interest and other
finance costs
|
|
95.4
|
126.9
|
364.8
|
250.9
|
Deferred purchase
consideration
|
|
—
|
—
|
1.0
|
1.0
|
Loss on sale of
property, plant and equipment
|
|
0.5
|
1.8
|
2.1
|
1.5
|
(Gain) loss on foreign
exchange
|
|
(8.4)
|
(28.1)
|
97.6
|
(44.8)
|
Mark-to-market loss
(gain) on TEU derivative
|
|
|
|
|
|
purchase
contract
|
10
|
74.2
|
—
|
(14.2)
|
—
|
|
|
1,147.1
|
921.5
|
2,444.1
|
1,765.2
|
Loss before income
taxes
|
|
(153.8)
|
(90.1)
|
(519.5)
|
(212.9)
|
Current income tax
expense
|
|
2.0
|
0.4
|
3.7
|
0.2
|
Deferred tax
recovery
|
|
(40.3)
|
(22.5)
|
(129.7)
|
(51.7)
|
Income tax
recovery
|
|
(38.3)
|
(22.1)
|
(126.0)
|
(51.5)
|
Net
loss
|
|
(115.5)
|
(68.0)
|
(393.5)
|
(161.4)
|
|
|
|
|
|
|
Items that may be
subsequently reclassified to net
loss
|
|
|
|
|
|
Currency translation
adjustment
|
|
(205.7)
|
(48.4)
|
72.1
|
(84.2)
|
Fair value movements
on cash flow hedges, net of tax
|
|
10.9
|
38.8
|
25.2
|
36.7
|
Other comprehensive
(loss) income
|
|
(194.8)
|
(9.6)
|
97.3
|
(47.5)
|
Total
comprehensive loss
|
|
$
|
(310.3)
|
$
|
(77.6)
|
$
|
(296.2)
|
$
|
(208.9)
|
Loss per
share
|
|
|
|
|
|
Basic
|
11
|
$
|
(0.32)
|
$
|
(0.38)
|
$
|
(1.09)
|
$
|
(0.91)
|
Diluted
|
11
|
(0.32)
|
(0.38)
|
(1.09)
|
(0.91)
|
The accompanying notes are an integral part of the unaudited
interim condensed consolidated financial statements.
GFL Environmental Inc.
Unaudited Interim Condensed Consolidated Statements of Financial
Position
(In millions of dollars)
|
Notes
|
June 30,
2020
|
December 31,
2019
|
Assets
|
|
|
|
Current
assets
|
|
|
|
Cash
|
|
$
|
723.9
|
$
|
574.8
|
Trade and other
receivables, net of allowance
|
|
744.0
|
713.4
|
Prepaid expenses and
other assets
|
|
150.6
|
132.1
|
|
|
1,618.5
|
1,420.3
|
Non-current
assets
|
|
|
|
Property, plant, and
equipment, net
|
4
|
3,301.3
|
2,850.1
|
Intangible assets,
net
|
5
|
3,121.1
|
2,848.0
|
Other long-term
assets
|
|
33.5
|
31.6
|
Goodwill
|
6
|
5,823.3
|
5,173.8
|
|
|
13,897.7
|
12,323.8
|
Liabilities
|
|
|
|
Current
liabilities
|
|
|
|
Accounts payable and
accrued liabilities
|
|
701.5
|
732.0
|
Income taxes
payable
|
|
2.6
|
2.9
|
Current portion of
long term debt
|
8
|
3.9
|
64.4
|
Current portion of
lease obligations
|
9
|
38.7
|
33.2
|
Current portion of due
to related party
|
18
|
12.8
|
7.0
|
Current portion of
tangible equity units
|
10
|
63.4
|
—
|
Current portion of
landfill closure and post-closure obligations
|
7
|
18.6
|
25.6
|
|
|
841.5
|
865.1
|
Non-current
liabilities
|
|
|
|
Long-term
debt
|
8
|
5,084.3
|
7,560.7
|
Lease
obligations
|
9
|
151.4
|
158.9
|
Other long-term
liabilities
|
|
9.0
|
12.4
|
Due to related
party
|
18
|
37.2
|
14.0
|
Deferred income tax
liabilities
|
|
746.8
|
733.8
|
Tangible equity
units
|
10
|
959.0
|
—
|
Landfill closure and
post-closure obligations
|
7
|
241.7
|
211.0
|
|
|
8,070.9
|
9,555.9
|
Shareholders'
equity
|
|
|
|
Share
capital
|
14
|
6,859.7
|
3,524.5
|
Contributed
surplus
|
14
|
36.3
|
16.4
|
Deficit
|
|
(1,163.8)
|
(770.3)
|
Accumulated other
comprehensive income (loss)
|
|
94.6
|
(2.7)
|
|
|
5,826.8
|
2,767.9
|
|
|
$
|
13,897.7
|
$
|
12,323.8
|
The accompanying notes are an integral part of the unaudited
interim condensed consolidated financial statements.
GFL Environmental Inc.
Unaudited Interim Condensed Consolidated Statements of Cash
Flows
(In millions of
dollars)
|
|
Three months ended
June 30,
|
Six months ended
June 30,
|
|
Notes
|
2020
|
2019
|
2020
|
2019
|
Operating
activities
|
|
|
|
|
|
Net loss
|
|
$
|
(115.5)
|
$
|
(68.0)
|
$
|
(393.5)
|
$
|
(161.4)
|
Adjustments for
non-cash items
|
|
|
|
|
|
Depreciation and
amortization of property, plant
|
|
|
|
|
|
and
equipment
|
4
|
123.6
|
101.3
|
246.3
|
195.5
|
Amortization of
intangible assets
|
5
|
111.1
|
80.3
|
210.2
|
161.0
|
Interest and other
finance costs
|
|
95.4
|
126.9
|
364.8
|
250.9
|
Share based
payments
|
14
|
4.2
|
3.6
|
19.9
|
7.2
|
(Gain) loss on
unrealized foreign exchange on
|
|
|
|
|
|
long-term
debt
|
|
(7.5)
|
(23.2)
|
104.8
|
(44.2)
|
Loss on sale of
property, plant and equipment
|
|
0.5
|
1.8
|
2.1
|
1.5
|
Mark-to-market loss
(gain) on TEU purchase
|
|
|
|
|
|
contract
|
10
|
74.2
|
—
|
(14.2)
|
—
|
Mark-to-market loss on
fuel hedge
|
|
0.6
|
0.3
|
1.8
|
0.3
|
Current income tax
expense
|
|
2.0
|
0.4
|
3.7
|
0.2
|
Deferred tax
recovery
|
|
(40.3)
|
(22.5)
|
(129.7)
|
(51.7)
|
Interest paid in cash,
net
|
|
(84.9)
|
(86.8)
|
(244.6)
|
(164.0)
|
Income taxes paid in
cash, net
|
|
(0.8)
|
(1.8)
|
(4.0)
|
(1.8)
|
Changes in non-cash
working capital items
|
15
|
(28.5)
|
(54.2)
|
(82.5)
|
(154.0)
|
Landfill closure and
post-closure expenditures
|
7
|
(1.9)
|
(2.4)
|
(3.1)
|
(3.2)
|
|
|
132.2
|
55.7
|
82.0
|
36.3
|
Investing
activities
|
|
|
|
|
|
Proceeds on sale of
property, plant and equipment
|
|
4.0
|
14.3
|
4.4
|
15.3
|
Purchase of property,
plant and equipment and
|
|
|
|
|
|
intangible
assets
|
|
(119.8)
|
(107.3)
|
(220.0)
|
(206.9)
|
Business acquisitions,
net of cash acquired
|
3
|
(12.3)
|
(73.3)
|
(1,138.3)
|
(187.2)
|
|
|
(128.1)
|
(166.3)
|
(1,353.9)
|
(378.8)
|
Financing
activities
|
|
|
|
|
|
Repayment of lease
obligations
|
|
(16.1)
|
(25.7)
|
(47.4)
|
(33.5)
|
Issuance of long-term
debt
|
|
785.2
|
803.8
|
1,600.9
|
1,024.9
|
Repayment of long-term
debt
|
|
(80.7)
|
(425.8)
|
(4,397.8)
|
(435.2)
|
Issuance of share
capital, net of issuance costs
|
|
—
|
—
|
3,257.6
|
—
|
Issuance of tangible
equity units, net of issuance
|
|
|
|
|
|
costs
|
10
|
—
|
—
|
1,006.9
|
—
|
Repayment of tangible
equity unit amortizing note
|
|
(15.8)
|
—
|
(15.8)
|
—
|
Return of
capital
|
|
—
|
—
|
(0.8)
|
(0.8)
|
Payment of financing
costs
|
|
(10.2)
|
(9.0)
|
(10.5)
|
(11.8)
|
Issuance of loan from
related party
|
18
|
—
|
—
|
29.0
|
—
|
Repayment of loan to
related party
|
|
—
|
—
|
—
|
(3.5)
|
Cheques issued in
excess of cash on hand
|
|
—
|
(19.0)
|
—
|
—
|
|
|
662.4
|
324.3
|
1,422.1
|
540.1
|
|
|
|
|
|
|
Increase in
cash
|
|
666.5
|
213.7
|
150.2
|
197.6
|
Changes due to
foreign exchange revaluation of cash
|
|
(34.0)
|
(4.4)
|
(1.1)
|
4.3
|
Cash, beginning of
period
|
|
91.4
|
—
|
574.8
|
7.4
|
Cash, end of
period
|
|
$
|
723.9
|
$
|
209.3
|
$
|
723.9
|
$
|
209.3
|
Supplementary
information
|
|
|
|
|
|
Business acquisitions
financed through issuance of
|
|
|
|
|
|
share
capital
|
|
$
|
—
|
$
|
—
|
$
|
78.4
|
$
|
—
|
Asset additions
financed through leases
|
|
0.8
|
25.7
|
31.4
|
25.7
|
The accompanying notes are an integral part of the unaudited
interim condensed consolidated financial statements.
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 condensed consolidated
financial statements and notes thereto for the three and six months
ended June 30, 2020.
Solid Waste Growth
The following table summarizes the components of our solid waste
growth for the periods indicated:
|
June
30, 2020
|
June
30, 2019
|
Price and
surcharges
|
3.7%
|
4.4%
|
Volume
|
(8.3)%
|
2.6%
|
Recycling
|
0.4%
|
(0.9)%
|
Foreign exchange
impact
|
2.1%
|
0.9%
|
Acquisitions
|
24.1%
|
114.2%
|
Total
growth
|
22.0%
|
121.2%
|
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):
|
|
June
30,
2020
|
December
31,
2019
|
Total debt,
gross
|
|
$
|
5,217.0
|
$
|
7,675.7
|
Less cash and cash
equivalents
|
|
(723.9)
|
(574.8)
|
|
|
4,493.1
|
7,100.9
|
Trailing twelve months
Adjusted EBITDA
|
|
919.4
|
825.8
|
Acquisition EBITDA
adjustments
|
|
116.9
|
98.9
|
Run rate
EBITDA
|
|
$
|
1,036.3
|
$
|
924.7
|
Net
Leverage
|
|
4.34x
|
7.68x
|
NON-IFRS RECONCILIATION SCHEDULE
Adjusted EBITDA
The following tables provide a reconciliation of our net loss to
EBITDA and Adjusted EBITDA for the periods presented:
|
Three months
ended
|
Three months
ended
|
($
millions)
|
June 30, 2020
|
June
30, 2019
|
Net loss
|
$
|
(115.5)
|
$
|
(68.0)
|
Add:
|
|
|
Interest and other
finance costs
|
95.4
|
126.9
|
Depreciation and
amortization
|
123.6
|
101.3
|
Amortization of
intangible assets
|
111.1
|
80.3
|
Income tax
recovery
|
(38.3)
|
(22.1)
|
EBITDA
|
176.3
|
218.4
|
Add:
|
|
|
Gain on foreign
exchange(1)
|
(8.4)
|
(28.1)
|
Loss on sale of
property, plant and equipment
|
0.5
|
1.8
|
Mark-to-market loss on
fuel hedge
|
0.6
|
0.3
|
Mark-to-market loss on
TEU purchase contract(2)
|
74.2
|
—
|
Share-based
payments(3)
|
4.2
|
3.6
|
Transaction
costs(4)
|
7.7
|
9.1
|
IPO transaction
costs(5)
|
4.9
|
—
|
Acquisition,
rebranding and other integration costs(6)
|
1.5
|
6.8
|
Adjusted
EBITDA
|
$
|
261.5
|
$
|
211.9
|
|
Six months
ended
|
Six months
ended
|
($
millions)
|
June 30,
2020
|
June 30,
2019
|
Net loss
|
$
|
(393.5)
|
$
|
(161.4)
|
Add:
|
|
|
Interest and other
finance costs
|
364.8
|
250.9
|
Depreciation and
amortization
|
246.3
|
195.5
|
Amortization of
intangible assets
|
210.2
|
161.0
|
Income tax
recovery
|
(126.0)
|
(51.5)
|
EBITDA
|
301.8
|
394.5
|
Add:
|
|
|
Loss (gain) on foreign
exchange(1)
|
97.6
|
(44.8)
|
Loss on sale of
property, plant and equipment
|
2.1
|
1.5
|
Mark-to-market loss on
fuel hedge
|
1.8
|
0.2
|
Mark-to-market gain on
TEU purchase contract(2)
|
(14.2)
|
—
|
Share-based
payments(3)
|
19.9
|
7.2
|
Transaction
costs(4)
|
18.9
|
18.6
|
IPO transaction
costs(5)
|
46.2
|
—
|
Acquisition,
rebranding and other integration costs(6)
|
9.2
|
12.8
|
Deferred purchase
consideration
|
1.0
|
1.0
|
Adjusted
EBITDA
|
$
|
484.3
|
$
|
391.0
|
(1)
|
Cosists of (i)
non-cash gains and losses on foreign exchange and interest rate
swaps entered into in connection with our debt instruments, and
(ii) gains and losses attributable to foreign exchange
rate fluctuations.
|
(2)
|
This is a non-cash
item that consists of the fair value "mark to market" adjustment on
the TEU Purchase Contract.
|
(3)
|
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.
|
(4)
|
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.
|
(5)
|
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.
|
(6)
|
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.
|
Adjusted Net Income (Loss)
The following tables provide a reconciliation of our net loss to
Adjusted Net Income (Loss) for the periods presented:
|
Three months
ended
|
Three months
ended
|
($
millions)
|
June 30,
2020
|
June 30,
2019
|
Net Loss
|
$
|
(115.5)
|
$
|
(68.0)
|
Add:
|
|
|
Amortization of
intangibles
|
111.1
|
80.3
|
PP&E depreciation
increase due to recapitalization
|
4.7
|
4.7
|
IPO transaction
costs
|
4.9
|
—
|
Loss on extinguishment
on debt
|
—
|
—
|
Amortization of
deferred financing costs
|
2.9
|
2.4
|
Mark-to-market gain on
TEU derivative purchase contract
|
74.2
|
—
|
Foreign exchange
loss
|
(8.4)
|
(28.1)
|
Transaction
costs
|
7.7
|
9.1
|
Acquisition rebranding
and other integration costs
|
1.5
|
6.8
|
TEU amortization
expense
|
0.9
|
—
|
Tax effect
|
(72.2)
|
(20.0)
|
Adjusted Net Income
(Loss)
|
$
|
11.8
|
$
|
(12.8)
|
Adjusted earnings
(loss) per share basic and diluted
|
$
|
0.03
|
$
|
(0.07)
|
|
Six months
ended
|
Six months
ended
|
($
millions)
|
June 30,
2020
|
June 30,
2019
|
Net Loss
|
$
|
(393.5)
|
$
|
(161.4)
|
Add:
|
|
|
Amortization of
intangibles
|
210.2
|
161.0
|
PP&E depreciation
increase due to recapitalization
|
9.4
|
9.4
|
IPO transaction
costs
|
46.2
|
—
|
Loss on extinguishment
on debt
|
133.2
|
—
|
Amortization of
deferred financing costs
|
22.6
|
4.7
|
Mark-to-market gain on
TEU derivative purchase contract
|
(14.2)
|
—
|
Foreign exchange
loss
|
97.6
|
(44.8)
|
Transaction
costs
|
18.9
|
18.6
|
Acquisition rebranding
and other integration costs
|
9.2
|
12.8
|
TEU amortization
expense
|
1.1
|
—
|
Tax effect
|
(138.2)
|
(42.9)
|
Adjusted Net Income
(Loss)
|
$
|
2.5
|
$
|
(42.6)
|
Adjusted earnings
(loss) per share basic and diluted
|
$
|
0.01
|
$
|
(0.24)
|
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SOURCE GFL Environmental Inc.