- Revenue of $1,186.6 million,
increase of 27.4%
- Adjusted EBITDA1 of $306.6 million, increase of 37.6%; Net loss of
$226.2 million; Adjusted Net
Income1 of $12.7
million
- Adjusted EBITDA margin1 of 25.8%, increase of 190
basis points. Solid waste Adjusted EBITDA margin1 of
31.0%, increase of 260 basis points
- Adjusted Cash Flows from Operating Activities1 of
$229.6 million; cash flows from
operating activities of $212.7
million; Adjusted Free Cash Flow1 of $102.1 million
- Adjusted earnings per share1 of $0.04; Loss per share of $(0.66)
VAUGHAN, ON, May 5, 2021 /CNW/ - GFL Environmental Inc.
(NYSE: GFL) (TSX: GFL) ("GFL" or the "Company") today announced its
results for the first quarter of 2021.
![GFL Environmental Inc. Logo (CNW Group/GFL Environmental Inc.) GFL Environmental Inc. Logo (CNW Group/GFL Environmental Inc.)](https://mma.prnewswire.com/media/1503542/GFL_Environmental_Inc__GFL_Environmental_Reports_First_Quarter_2.jpg)
"We have had an exceptionally strong start to the year, with
solid waste pricing, volume recovery and contribution from
acquisitions all exceeding our expectations and driving a 37.6%
increase in Adjusted EBITDA and a near doubling of Adjusted Cash
Flows from Operating Activities as compared to the first quarter of
2020," said Patrick Dovigi, Founder
and Chief Executive Officer of GFL. "The quality of our revenue
growth, combined with our continued rigorous focus on cost
management, productivity and asset utilization, drove over 210
basis points of organic margin expansion in our solid waste
business. As a result, we saw this segment report 31.0% Adjusted
EBITDA margin, the highest in our history and achieved during the
first quarter, historically our lowest margins period on account of
seasonality. The strength of this performance more than offset
continued COVID related volume headwinds, particularly in our
infrastructure, soil and liquid businesses, driving 190 basis
points of Adjusted EBITDA margin expansion for the consolidated
business."
Mr. Dovigi added, "We have substantially completed the
integration of the acquisitions from the fourth quarter of last
year. In March, we announced the acquisition of Terrapure
Environmental, a transaction that we believe represents a unique
opportunity to acquire a highly complementary, free cash flow
accretive set of assets at a compelling valuation. The acquisition
is still targeted to close in the third or fourth quarter of this
year. We also completed six small tuck in acquisitions during the
quarter and four more acquisitions subsequent to quarter end."
Mr. Dovigi concluded, "We are very encouraged by the solid waste
volume recovery that we saw throughout the quarter, even in the
face of new and more restrictive COVID-19 measures being
implemented in Canada where we
generate almost 40% of our revenue. As a result, we anticipate
being in a position to increase our guidance when we provide our
updated outlook at the time that we report our second quarter
results."
First Quarter Results
Revenue increased by 27.4% to $1,186.6
million in the first quarter of 2021 compared to the first
quarter of 2020. For the first quarter of 2021, solid waste core
price and surcharges were 4.0% and solid waste volumes were
positive 0.4%. Excluding processing volumes in our material
recovery facilities ("MRF"), solid waste volumes were negative
3.2%, representing a 50 basis point sequential improvement compared
to the fourth quarter of 2020, and over 110 basis point sequential
improvement when normalizing for the impact of the leap year in
2020. In March 2021, for the first time since the beginning of
the COVID-19 pandemic, non-MRF solid waste volumes were
positive as compared to the same month of the prior year.
Adjusted EBITDA1 increased by $83.8 million to $306.6
million in the first quarter of 2021 compared to the first
quarter of 2020. Adjusted EBITDA margin1 was 25.8% for
the first quarter of 2021 as compared to 23.9% in the prior year
period. Net loss decreased from $278.0
million for the first quarter of 2020 to $226.2 million for the first quarter of 2021
driven primarily by the changes in Adjusted EBITDA1
partially offset by a mark-to-market loss on our tangible equity
unit ("TEUs") derivative purchase contracts ("Purchase
Contracts").
Cash flows from operating activities increased by 523.7% to
$212.7 million in the first quarter
of 2021 compared to the first quarter of 2020. This increase was
predominantly attributable to the increase in Adjusted
EBITDA1, lower interest expense, and improved working
capital during the period.
Financial Impact from COVID-19
Since the outbreak of the COVID-19 pandemic in March 2020, the U.S. and Canadian governments, as
well as numerous state, provincial and local governments,
implemented certain measures to slow the spread of the virus,
including shelter-in-place and physical distancing orders as well
as closure restrictions or requirements. In the first quarter of
2021, we saw certain of these measures lifted or scaled back in
many U.S. states resulting in an accelerated economic recovery. In
Canada, many provincial
governments, including those in Ontario and Quebec, and municipal governments in major
metropolitan areas, introduced new increased measures and
re-introduced former measures, resulting in a slower recovery. The
impact of the COVID-19 pandemic on our business and future results
of operations, financial condition and cash flows will depend
largely on future developments, which are uncertain and continue to
evolve, including the duration and spread of the virus in
Canada and the United States, the introduction, execution
and effectiveness of vaccination programs, particularly in
Canada, the severity of and
actions taken to limit the spread of COVID-19, including variants,
and the pace and extent to which normal economic and operating
conditions resume in the markets that we serve.
Q1 2021 Earnings Call
GFL will host a conference call related to our
first quarter earnings on Thursday May 6, 2021 at
8:30 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
1-844-824-3839 or 1-855-669-9657 (conference ID:10153788)
approximately 15 minutes prior to the scheduled start time.
The Company encourages participants who will be dialing in to
pre-register for the conference call using the following link:
https://dpregister.com/sreg/10153788/e5ae40613c. Callers who
pre-register will be given a conference passcode and PIN to gain
immediate access to the call and bypass the live operator on the
day of the call. Participants may pre-register at any time,
including up to and after the call start time. For those unable to
listen live, an audio replay of the call will be available until
May 20, 2021 by dialing
1-877-344-7529 or 1-855-669-9658 (access code 10153788). 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 and soil remediation and liquid waste
management services through its platform of facilities throughout
Canada and in 27 states in
the United States. Across its
organization, GFL has a workforce of more than 15,000
employees.
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.
Forward-Looking Statements
This release includes certain "forward-looking statements",
including statements relating to the benefits from recently
completed acquisitions, 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, the timing and
completion of acquisitions, and the Company's expectations
regarding its financial guidance. 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 statements 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 annual report for the 2020
fiscal year filed on Form 20-F and the Company's other periodic
filings with the U.S. Securities and Exchange Commission 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.
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 give effect
to (a) 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) 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 Free Cash Flow and Adjusted Cash Flows from Operating
Activities are supplemental measures used by investors as a
valuation and liquidity measure in our industry. Management uses
Adjusted Free Cash Flow and Adjusted Cash Flows from Operating
Activities to evaluate and monitor the ongoing financial
performance of the Company.
Adjusted Net Income (Loss) represents net income (loss) adjusted
for (a) amortization of intangibles, (b) ARO discount rate
depreciation adjustment, (c) property and equipment depreciation
due to recapitalization, (d) transaction costs related to our
initial public offering ("IPO"), (e) loss on the extinguishment of
debt (f) amortization of deferred finance costs (g) mark-to-market
loss on Purchase Contracts, (h) foreign exchange loss or gain, (i)
transaction costs, (j) acquisition, rebranding and other
integration costs, (k) TEU amortization expense, and (l) 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 borrowing capacity and capital allocation strategies. Net
Leverage is equal to our total long term debt, as adjusted for fair
value, deferred financings and other adjustments and 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 (as defined above) 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.
Run-Rate EBITDA has not been adjusted to take into account the
impact of the cancellation of contracts and cost increases
associated with these contracts. 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.
Run-Rate EBITDA as presented herein is calculated in accordance
with the terms of our revolving credit agreement.
All references to "$" in this press release are to Canadian
dollars, unless otherwise noted.
For further information:
Patrick Dovigi, Founder and Chief
Executive Officer,
+1 905-326-0101
pdovigi@gflenv.com
_______________________________
|
1 A
non-IFRS measure; see accompanying Non-IFRS Reconciliation
Schedule
|
GFL Environmental Inc.
Unaudited Interim Condensed Consolidated Statements of Operations
and Comprehensive (Loss) Income
(In millions of dollars except per share amounts)
|
|
Three months
ended
March
31,
|
|
2021
|
|
2020
|
Revenue
|
|
$
|
1,186.6
|
|
$
|
931.3
|
Expenses
|
|
|
|
|
Cost of
sales
|
|
1,086.7
|
|
852.3
|
Selling, general and
administrative expenses
|
|
133.2
|
|
155.1
|
Interest and other
finance costs
|
|
92.1
|
|
269.4
|
Deferred purchase
consideration
|
|
—
|
|
1.0
|
Loss on sale of
property and equipment
|
|
0.8
|
|
1.6
|
(Gain) loss on foreign
exchange
|
|
(39.0)
|
|
106.0
|
Mark-to-market loss
(gain) on Purchase Contracts
|
|
228.3
|
|
(88.4)
|
|
|
1,502.1
|
|
1,297.0
|
Loss before income
taxes
|
|
(315.5)
|
|
(365.7)
|
Current income tax
expense
|
|
2.0
|
|
1.7
|
Deferred tax
recovery
|
|
(91.3)
|
|
(89.4)
|
Income tax
recovery
|
|
(89.3)
|
|
(87.7)
|
Net
loss
|
|
(226.2)
|
|
(278.0)
|
|
|
|
|
|
Items that may be
subsequently reclassified to net loss
|
|
|
|
|
Currency translation
adjustment
|
|
(76.8)
|
|
277.8
|
Fair value movements
on cash flow hedges, net of tax
|
|
(5.8)
|
|
14.4
|
Other comprehensive
(loss) income
|
|
(82.6)
|
|
292.2
|
Total
comprehensive (loss) income
|
|
$
|
(308.8)
|
|
$
|
14.2
|
|
|
|
|
|
Loss per
share
|
|
|
|
|
Basic and diluted
(1)
|
|
$
|
(0.66)
|
|
$
|
(0.77)
|
Weighted average
number of shares, basic and diluted(2)
|
|
360,377,813
|
|
360,412,254
|
|
|
(1)
|
Basic and diluted
loss per share is calculated on net loss adjusted for amounts
attributable to preferred shareholders.
|
(2)
|
Weighted and diluted
weighted average number of shares includes 33,662,500 subordinate
voting shares, representing the minimum conversion of the TEUs as
at March 31, 2021 and 33,991,500 subordinate voting shares,
representing the minimum conversion of the TEUs as at March 31,
2020.
|
GFL Environmental Inc.
Unaudited Interim Condensed Consolidated Statements of Financial
Position
(In millions of dollars)
|
|
March 31,
2021
|
|
December 31,
2020
|
Assets
|
|
|
|
|
Cash
|
|
$
|
11.1
|
|
$
|
27.2
|
Trade and other
receivables, net
|
|
816.1
|
|
867.3
|
Prepaid expenses and
other assets
|
|
135.6
|
|
133.7
|
Current
assets
|
|
962.8
|
|
1,028.2
|
|
|
|
|
|
Property and
equipment, net
|
|
5,052.3
|
|
5,074.8
|
Intangible assets,
net
|
|
2,994.5
|
|
3,093.4
|
Other long-term
assets
|
|
35.8
|
|
33.2
|
Goodwill
|
|
6,463.7
|
|
6,500.4
|
Non-current
assets
|
|
14,546.3
|
|
14,701.8
|
Total
assets
|
|
15,509.1
|
|
15,730.0
|
|
|
|
|
|
Liabilities
|
|
|
|
|
Accounts payable and
accrued liabilities
|
|
950.0
|
|
1,014.8
|
Income taxes
payable
|
|
11.9
|
|
9.1
|
Long-term
debt
|
|
17.0
|
|
4.6
|
Lease
obligations
|
|
39.8
|
|
37.5
|
Due to related
party
|
|
12.8
|
|
12.8
|
Tangible equity
units
|
|
54.8
|
|
59.2
|
Landfill closure and
post-closure obligations
|
|
61.5
|
|
55.3
|
Current
liabilities
|
|
1,147.8
|
|
1,193.3
|
|
|
|
|
|
Long-term
debt
|
|
6,203.6
|
|
6,161.5
|
Lease
obligations
|
|
142.0
|
|
153.7
|
Other long-term
liabilities
|
|
35.6
|
|
37.2
|
Due to related
party
|
|
24.4
|
|
30.8
|
Deferred income tax
liabilities
|
|
369.3
|
|
466.0
|
Tangible equity
units
|
|
1,517.2
|
|
1,327.9
|
Landfill closure and
post-closure obligations
|
|
677.6
|
|
680.3
|
Non-current
liabilities
|
|
8,969.7
|
|
8,857.4
|
Total
liabilities
|
|
10,117.5
|
|
10,050.7
|
|
|
|
|
|
Shareholders'
equity
|
|
|
|
|
Share
capital
|
|
7,660.4
|
|
7,644.8
|
Contributed
surplus
|
|
64.0
|
|
54.3
|
Deficit
|
|
(2,008.7)
|
|
(1,778.3)
|
Accumulated other
comprehensive loss
|
|
(324.1)
|
|
(241.5)
|
Total
shareholders' equity
|
|
5,391.6
|
|
5,679.3
|
Total liabilities
and shareholders' equity
|
|
$
|
15,509.1
|
|
$
|
15,730.0
|
GFL Environmental Inc.
Unaudited Interim Condensed Consolidated Statements of Cash
Flows
(In millions of dollars)
|
|
Three months
ended
March
31,
|
|
|
2021
|
|
2020
|
Operating
activities
|
|
|
|
|
Net loss
|
|
$
|
(226.2)
|
|
$
|
(278.0)
|
Adjustments for
non-cash items
|
|
|
|
|
Depreciation of
property and equipment
|
|
203.6
|
|
122.7
|
Amortization of
intangible assets
|
|
111.0
|
|
99.1
|
Interest and other
finance costs
|
|
92.1
|
|
269.4
|
Share-based
payments
|
|
9.7
|
|
15.7
|
(Gain) loss on
unrealized foreign exchange on long-term debt and TEUs
|
|
(38.9)
|
|
112.3
|
Loss on sale of
property and equipment
|
|
0.8
|
|
1.6
|
Mark-to-market loss
(gain) on Purchase Contracts
|
|
228.3
|
|
(88.4)
|
Mark-to-market loss on
fuel hedges
|
|
—
|
|
1.2
|
Current income tax
expense
|
|
2.0
|
|
1.7
|
Deferred tax
recovery
|
|
(91.3)
|
|
(89.4)
|
Interest paid in cash,
net
|
|
(42.0)
|
|
(159.7)
|
Income taxes paid in
cash, net
|
|
(0.2)
|
|
(3.2)
|
Changes in non-cash
working capital items
|
|
(34.1)
|
|
(54.0)
|
Landfill closure and
post-closure expenditures
|
|
(2.1)
|
|
(1.2)
|
|
|
212.7
|
|
(50.2)
|
Investing
activities
|
|
|
|
|
Proceeds on disposal
of assets
|
|
3.8
|
|
0.4
|
Purchase of property
and equipment and intangible assets
|
|
(131.3)
|
|
(100.1)
|
Business acquisitions,
net of cash acquired
|
|
(68.3)
|
|
(1,126.0)
|
|
|
(195.8)
|
|
(1,225.7)
|
Financing
activities
|
|
|
|
|
Repayment of lease
obligations
|
|
(14.8)
|
|
(31.3)
|
Issuance of long-term
debt
|
|
447.4
|
|
815.7
|
Repayment of long-term
debt
|
|
(418.5)
|
|
(4,317.1)
|
Payment of contingent
purchase consideration
|
|
(15.0)
|
|
—
|
Issuance of share
capital, net of issuance costs
|
|
—
|
|
3,257.5
|
Issuance of TEUs, net
of issuance costs
|
|
—
|
|
1,006.9
|
Repayment of
Amortizing Notes
|
|
(13.5)
|
|
—
|
Dividends issued and
paid
|
|
(4.2)
|
|
—
|
Return of
capital
|
|
—
|
|
(0.8)
|
Payment of financing
costs
|
|
(3.7)
|
|
(0.3)
|
Issuance of loan from
related party
|
|
—
|
|
29.0
|
Repayment of loan to
related party
|
|
(6.4)
|
|
—
|
|
|
(28.7)
|
|
759.6
|
|
|
|
|
|
Decrease in
cash
|
|
(11.8)
|
|
(516.3)
|
Changes due to
foreign exchange revaluation of cash
|
|
(4.3)
|
|
32.9
|
Cash, beginning of
quarter
|
|
27.2
|
|
574.8
|
Cash, end of
quarter
|
|
$
|
11.1
|
|
$
|
91.4
|
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,
2020 as well as our unaudited interim condensed consolidated
financial statements and notes thereto for the three months ended
March 31, 2021.
Revenue Growth
The following table summarizes the revenue growth in our
operating segments for the period indicated:
|
Three months ended
March 31, 2021
|
|
Contribution
from Acquisitions
|
|
Organic
Growth
|
|
Foreign
Exchange
|
|
Total Revenue
Growth
|
Solid
waste
|
|
|
|
|
|
|
|
Canada
|
1.6
|
%
|
|
9.2
|
%
|
|
—
|
%
|
|
10.8
|
%
|
USA
|
60.3
|
%
|
|
2.5
|
%
|
|
(5.9)
|
%
|
|
56.9
|
%
|
Solid
waste
|
37.7
|
%
|
|
5.1
|
%
|
|
(3.6)
|
%
|
|
39.2
|
%
|
Infrastructure and
soil remediation
|
1.4
|
%
|
|
(17.9)
|
%
|
|
(0.5)
|
%
|
|
(17.0)
|
%
|
Liquid
waste
|
10.4
|
%
|
|
(8.0)
|
%
|
|
(1.6)
|
%
|
|
0.8
|
%
|
Total
|
29.9
|
%
|
|
0.5
|
%
|
|
(3.0)
|
%
|
|
27.4
|
%
|
Detail of Solid Waste Organic Growth
The following table summarizes the components of our solid waste
organic growth for the period indicated:
|
|
Three months
ended
March 31,
2021
|
Price and
surcharges
|
|
|
4.0
%
|
Volume
|
|
|
0.4
|
Commodity
price
|
|
|
0.7
|
Total organic
growth
|
|
|
5.1
%
|
Operating Segment Results
The following table summarizes our operating segment results for
the periods indicated (all amounts are in millions of dollars,
unless otherwise stated):
|
Three months ended
March 31, 2021
|
|
Three months ended
March 31, 2020
|
|
Revenue
|
|
Adjusted
EBITDA
|
|
Adjusted EBITDA
margin
|
|
Revenue
|
|
Adjusted
EBITDA
|
|
Adjusted EBITDA
margin
|
Solid
waste
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Canada
|
$
|
302.3
|
|
$
|
83.0
|
|
27.5
|
%
|
|
$
|
272.8
|
|
$
|
65.9
|
|
24.2
|
%
|
USA
|
682.4
|
|
222.2
|
|
32.6
|
|
|
434.9
|
|
134.9
|
|
31.0
|
|
Solid
waste
|
984.7
|
|
305.2
|
|
31.0
|
|
|
707.7
|
|
200.8
|
|
28.4
|
|
Infrastructure and
soil remediation
|
108.4
|
|
14.0
|
|
12.9
|
|
|
130.7
|
|
21.5
|
|
16.4
|
|
Liquid
waste
|
93.5
|
|
17.1
|
|
18.3
|
|
|
92.9
|
|
16.9
|
|
18.2
|
|
Corporate
|
—
|
|
(29.7)
|
|
—
|
|
|
—
|
|
(16.4)
|
|
—
|
|
Total
|
$
|
1,186.6
|
|
$
|
306.6
|
|
25.8
|
%
|
|
$
|
931.3
|
|
$
|
222.8
|
|
23.9
|
%
|
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,
2021
|
|
December 31,
2020
|
Total long-term
debt
|
$
|
6,220.6
|
|
$
|
6,166.1
|
Fair value, deferred
finance costs and other adjustments
|
99.5
|
|
58.5
|
Total long-term debt
excluding fair value, deferred finance costs and other
adjustments
|
$
|
6,121.1
|
|
$
|
6,107.6
|
Less cash
|
(11.1)
|
|
(27.2)
|
|
6,110.0
|
|
6,080.4
|
Trailing twelve
months Adjusted EBITDA
|
1,158.7
|
|
1,076.7
|
Acquisition EBITDA
Adjustments
|
175.6
|
|
238.3
|
Run Rate
EBITDA
|
$
|
1,334.3
|
|
$
|
1,315.0
|
Net
Leverage
|
4.58x
|
|
4.62x
|
NON-IFRS RECONCILIATION SCHEDULE
Adjusted EBITDA
The table below sets forth the reconciliation of our net loss to
EBITDA and Adjusted EBITDA for the periods indicated (all amounts
are in millions of dollars):
($
millions)
|
Three months
ended
March 31,
2021
|
|
Three months
ended
March 31,
2020
|
Net loss
|
$
|
(226.2)
|
|
$
|
(278.0)
|
Add:
|
|
|
|
Interest and other
finance costs
|
92.1
|
|
269.4
|
Depreciation of
property and equipment
|
203.6
|
|
122.7
|
Amortization of
intangible assets
|
111.0
|
|
99.1
|
Income tax
recovery
|
(89.3)
|
|
(87.7)
|
EBITDA
|
91.2
|
|
125.5
|
Add:
|
|
|
|
(Gain) loss on foreign
exchange(1)
|
(39.0)
|
|
106.0
|
Loss on sale of
property and equipment
|
0.8
|
|
1.6
|
Mark-to-market loss on
fuel hedges
|
—
|
|
1.2
|
Mark-to-market loss
(gain) on Purchase Contracts(2)
|
228.3
|
|
(88.4)
|
Share-based
payments(3)
|
9.7
|
|
15.7
|
Transaction
costs(4)
|
12.1
|
|
11.2
|
IPO transaction
costs(5)
|
—
|
|
41.3
|
Acquisition,
rebranding and other integration costs(6)
|
3.5
|
|
7.7
|
Deferred purchase
consideration
|
—
|
|
1.0
|
Adjusted
EBITDA
|
$
|
306.6
|
|
$
|
222.8
|
|
|
(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 that consists of the fair value "mark-to-market" adjustment on
the Purchase Contracts.
|
(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 expect to incur similar costs in connection with
other acquisitions in the future. This is part of cost of
sales.
|
Adjusted Net Income (loss)
The table below sets forth the reconciliation of our net loss to
Adjusted Net Income (loss) for the periods indicated (all amounts
are in millions of dollars, except per share amounts):
($
millions)
|
|
Three months
ended
March 31,
2021
|
|
Three months
ended
March 31,
2020
|
Net loss
|
|
$
|
(226.2)
|
|
$
|
(278.0)
|
Add:
|
|
|
|
|
Amortization of
intangible assets
|
|
111.0
|
|
99.1
|
Incremental
depreciation of property and equipment due to
recapitalization
|
|
4.7
|
|
4.7
|
IPO transaction
costs
|
|
—
|
|
41.3
|
Loss on extinguishment
of debt
|
|
—
|
|
133.2
|
Amortization of
deferred finance costs
|
|
2.8
|
|
19.7
|
Mark-to-market loss
(gain) on Purchase Contracts
|
|
228.3
|
|
(88.4)
|
(Gain) loss on foreign
exchange
|
|
(39.0)
|
|
106.0
|
Transaction
costs
|
|
12.1
|
|
11.2
|
Acquisition rebranding
and other integration costs
|
|
3.5
|
|
7.7
|
TEU amortization
expense
|
|
0.6
|
|
0.2
|
Tax effect
|
|
(85.1)
|
|
(66.6)
|
Adjusted Net Income
(Loss)
|
|
$
|
12.7
|
|
$
|
(9.9)
|
Adjusted earnings
(loss) per share, basic
|
|
$
|
0.04
|
|
$
|
(0.03)
|
Adjusted Cash Flows from Operating Activities and Adjusted
Free Cash Flow
The table below sets forth the reconciliation of our cash flows
from operating activities to Adjusted Cash Flows from Operating
Activities and Adjusted Free Cash Flow, for the periods indicated
(all amounts are in millions of dollars):
($
millions)
|
|
Three months
ended
March 31,
2021
|
|
Three months
ended
March 31,
2020
|
Cash flows from
operating activities
|
|
$
|
212.7
|
|
$
|
(50.2)
|
Add:
|
|
|
|
|
Costs associated with
IPO related debt repayments (1)
|
|
—
|
|
106.6
|
IPO Transaction Costs
(2)
|
|
—
|
|
41.3
|
Transaction costs
(3)
|
|
12.1
|
|
11.2
|
Acquisition rebranding
and other integration costs (4)
|
|
3.5
|
|
7.7
|
Cash interest paid on
TEUs (5)
|
0
|
1.3
|
|
—
|
Adjusted Cash Flows
from Operating Activities
|
|
229.6
|
|
116.6
|
Less:
|
|
|
|
|
Proceeds on disposal
of assets
|
|
3.8
|
|
0.4
|
Purchase of property
and equipment and intangible assets
|
|
(131.3)
|
|
(100.1)
|
Adjusted Free Cash
Flow
|
|
$
|
102.1
|
|
$
|
16.9
|
|
|
(1)
|
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. Also includes costs associated with the
extinguishment of our 11.000% paid-in-kind notes ("PIK Notes"),
5.625% USD senior usecured notes due 2022 ("2022 Notes"), and our
5.375% USD senior unsecured notes due 2023 ("2023 Notes"), the
termination of the swap arrangements associated with the 2022 Notes
and the 2023 Notes, and accelerated interest payments of the PIK
Notes, the 2022 Notes and the 2023 Notes.
|
(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)
|
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
related to the rebranding of equipment acquired through business
acquisitions. We expect to incur similar costs in connection with
other acquisitions in the future. This is part of cost of
sales.
|
(5)
|
Consists of interest
paid in cash on the senior unsecured amortizing notes forming part
of the TEUs.
|
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SOURCE GFL Environmental Inc.