BrightView Reports Second Quarter Fiscal 2021 Results

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, 2021.

This press release features multimedia. View the full release here: https://www.businesswire.com/news/home/20210506005467/en/

(Graphic: Business Wire)

(Graphic: Business Wire)

“We are very pleased with an exceptional quarter and our continued strong performance in fiscal year 2021. These results are due to the team executing on our strategy and we believe underpins our guidance going forward. Despite ongoing COVID-19 headwinds, our fiscal second quarter performance was driven by meaningful growth in our annual contract snow business and continued improvement in Maintenance Land organic growth, a testament to the investments made in our expanded sales teams and sales enablement technologies. In addition, the significant Adjusted EBITDA margin expansion versus the prior year and continued strong cash generation are a result of the ongoing leverage of our technology and productivity initiatives," said Andrew Masterman, BrightView President and Chief Executive Officer. “BrightView’s success comes from the efforts of every one of our 20,000 plus team members and they continue to do an incredible job by prioritizing health and safety, focusing on client relationships, and by delivering solid results in a challenging operating environment. The consistency and resiliency of our model continues to reflect fundamental strengths. Coupled with ongoing execution of our M&A strategy, we remain confident in our ability to create significant shareholder value.”

1 Adjusted EBITDA is a non-GAAP measure. Refer to the “Non-GAAP Financial Measures” section for more information. The Company is not providing a quantitative reconciliation of its financial outlook for Adjusted EBITDA to net income (loss), its corresponding GAAP measure, because the GAAP measure that is excluded from its non-GAAP financial outlook is difficult to reliably predict or estimate without unreasonable effort due to its dependence on future uncertainties, such as items discussed below. Additionally, information that is currently not available to the Company could have a potentially unpredictable and potentially significant impact on its future GAAP financial results.

Adjusted EBITDA, Adjusted EBITDA Margin, Adjusted Net Income, Free Cash Flow and Adjusted Earnings per Share are non-GAAP measures. Refer to the “Non-GAAP Financial Measures” and “Reconciliation of GAAP to Non-GAAP Financial Measures” sections for more information.

Second Quarter Fiscal 2021 Highlights

  • Total revenue of $651.9 million, a 16.6% increase compared to $559.1 million in the prior year.
  • Maintenance revenue of $535.7 million, a 29.6% increase compared to $413.5 million in the prior year;
    • Land revenue of $309.7 million compared to the prior year of $311.0 million;
    • Snow revenue of $226.0 million compared to the prior year of $102.5 million.
  • Development revenue of $117.1 million compared to the prior year of $146.3 million.
  • Net Income of $6.3 million, or $0.06 per share, compared to Net Loss of $20.5 million, or $(0.20) per share in the prior year; Net Income Margin of 1.0%, an improvement of 470 basis points compared to prior year Net Loss Margin of 3.7%.
  • Adjusted EBITDA of $66.8 million, an increase of $27.9 million or 71.7% compared to Adjusted EBITDA of $38.9 million in the prior year; Adjusted EBITDA margin of 10.2%, an increase of 320 basis points compared to Adjusted EBITDA margin of 7.0% in the prior year.
  • Net cash provided by operating activities of $78.3 million and Free Cash Flow generation of $62.9 million.

Six Months Fiscal 2021 Highlights

  • Total revenue of $1,206.3 million, a 6.8% increase compared to $1,129.8 million in the prior year.
  • Maintenance revenue of $953.8 million, a 14.6% increase compared to $832.4 million in the prior year;
    • Land revenue of $672.0 million compared to the prior year of $674.3 million;
    • Snow revenue of $281.8 million compared to the prior year of $158.1 million.
  • Development revenue of $254.4 million compared to the prior year of $299.1 million.
  • Net Loss of $5.7 million, or ($0.05) per share, and a net loss margin of 0.5%, compared to Net Loss of $33.1 million, or ($0.32) per share, and a net loss margin of 2.9%, in the prior year.
  • Adjusted EBITDA of $119.3 million, an increase of $28.8 million or 31.8% compared to Adjusted EBITDA of $90.5 million in the prior year; Adjusted EBITDA margin of 9.9%, an increase of 190 basis points compared to Adjusted EBITDA margin of 8.0% in the prior year.
  • Net cash provided by operating activities of $83.4 million and Free Cash Flow generation of $58.9 million.

Fiscal 2021 Results – Total BrightView

Total BrightView - Operating Highlights

Three Months Ended
March 31,

Six Months Ended
March 31,

($ in millions, except per share figures)

2021

2020

Change

2021

2020

Change

Revenue

$

651.9

$

559.1

16.6%

$

1,206.3

$

1,129.8

6.8%

Net Income (Loss)

$

6.3

$

(20.5

)

130.7%

$

(5.7

)

$

(33.1

)

82.8%

Net Income (Loss) Margin

1.0

%

(3.7

%)

470 bps

(0.5

%)

(2.9

%)

240 bps

Adjusted EBITDA

$

66.8

$

38.9

71.7%

$

119.3

$

90.5

31.8%

Adjusted EBITDA Margin

10.2

%

7.0

%

320 bps

9.9

%

8.0

%

190 bps

Adjusted Net Income

$

27.2

$

1.9

1,331.6%

$

40.1

$

12.5

220.8%

Earnings (Loss) per Share, GAAP

$

0.06

$

(0.20

)

130.0%

$

(0.05

)

$

(0.32

)

84.4%

Earnings per Share, Adjusted

$

0.26

$

0.02

1,200.0%

$

0.38

$

0.12

216.7%

Weighted average number of
common shares outstanding

105.2

103.7

1.4%

105.2

103.5

1.6%

For the second quarter of fiscal 2021, total revenue increased 16.6% to $651.9 million driven principally by an increase in Maintenance Services revenues of $122.2 million. Net Income was $6.3 million compared to Net Loss of $20.5 million in the prior year period. Total Adjusted EBITDA increased $27.9 million, or 71.7%, to $66.8 million from $38.9 million in the prior year period. Maintenance Services Segment Adjusted EBITDA increased $31.6 million, or 77.6%, to $72.3 million compared to $40.7 in the prior year period, principally driven by the increase in snow removal revenue. Development Services Segment Adjusted EBITDA decreased $3.3 million to $10.9 million from $14.2 million in the prior year period due principally to a decrease in net service revenues. The Segment Adjusted EBITDA results are discussed further below.

For the six months ended March 31, 2021, total revenue increased 6.8% to $1,206.3 million driven principally by an increase in Maintenance Services revenues of $121.4 million. Net Loss was $5.7 million compared to Net Loss of $33.1 million in the prior year period. Total Adjusted EBITDA increased $28.8 million, or 31.8%, to $119.3 million from $90.5 million in the prior year period. Maintenance Services Segment Adjusted EBITDA increased $33.5 million, or 37.9%, to $121.9 million compared to $88.4 million in the prior year period, principally driven by the increase in snow removal revenue. Development Services Segment Adjusted EBITDA decreased to $27.9 million from $33.3 million in the prior year period due principally to a decrease in net service revenues. The Segment Adjusted EBITDA results are discussed further below.

Fiscal 2021 Results – Segments

Maintenance Services - Operating Highlights

Three Months Ended
March 31,

Six Months Ended
March 31,

($ in millions)

2021

2020

Change

2021

2020

Change

Landscape Maintenance

$

309.7

$

311.0

(0.4%)

$

672.0

$

674.3

(0.3%)

Snow Removal

$

226.0

$

102.5

120.5%

$

281.8

$

158.1

78.2%

Total Revenue

$

535.7

$

413.5

29.6%

$

953.8

$

832.4

14.6%

Adjusted EBITDA

$

72.3

$

40.7

77.6%

$

121.9

$

88.4

37.9%

Adjusted EBITDA Margin

13.5

%

9.8

%

370 bps

12.8

%

10.6

%

220 bps

Capital Expenditures

$

15.3

$

14.3

7.0%

$

24.2

$

26.1

(7.3%)

For the second quarter of fiscal 2021, revenue in the Maintenance Services Segment increased by $122.2 million, or 29.6%, from the 2020 period. Revenues from snow removal services were $226.0 million, an increase of $123.5 million over the 2020 period and revenues from landscape services were $309.7 million, a decrease of $1.3 million over the 2020 period. The increase in snow removal services is primarily attributable to the increased frequency of snowfall events and the higher relative snowfall in the three months ended March 31, 2021 compared to the 2020 period (for our current geographic structure, snowfall for the three months ended March 31, 2021 and 2020 was 97.8% and 49.6%, respectively, of the historical 10-year average for that three-month period per NOAA1). The decrease in landscape services revenues was primarily driven by a $12.2 million decline in commercial landscape services, offset by a $11.7 million revenue contribution from acquired businesses.

Adjusted EBITDA for the Maintenance Services Segment for the three months ended March 31, 2021 increased by $31.6 million to $72.3 million from $40.7 million in the 2020 period. Segment Adjusted EBITDA Margin increased 370 basis points, to 13.5%, in the three months ended March 31, 2021, from 9.8% in the 2020 period. The increases in Segment Adjusted EBITDA and Segment Adjusted EBITDA Margin were principally driven by the increase in Maintenance Services revenues discussed above.

For the six months ended March 31, 2021, revenue in the Maintenance Services Segment increased by $121.4 million, or 14.6%, from the 2020 period. Revenues from snow removal services were $281.8 million, an increase of $123.7 million over the 2020 period and revenues from landscape services were $672.0 million, a decrease of $2.3 million over the 2020 period. The increase in snow removal services is primarily attributable to the increased frequency of snowfall events and the higher relative snowfall in the six months ended March 31, 2021 compared to the 2020 period (for our current geographic structure, snowfall for the six months ended March 31, 2021 and 2020 was 102.1% and 62.2%, respectively, of the historical 10-year average for that six-month period per NOAA). The decrease in landscape services revenues was driven by a $35.9M decrease in commercial landscape services and $1.7 million due to divestitures, offset by an increase of $35.3 million revenue contribution from acquired businesses.

Adjusted EBITDA for the Maintenance Services Segment for the six months ended March 31, 2021 increased $33.5 million, to $121.9 million, compared to $88.4 million in the 2020 period. Segment Adjusted EBITDA Margin increased 220 basis points, to 12.8%, in the six months ended March 31, 2021, from 10.6% in the 2020 period. The increases in Segment Adjusted EBITDA and Segment Adjusted EBITDA Margin was principally driven by the increase in snow removal revenues described above and the decrease in Selling, general, and administrative expenses due to cost containment actions.

Development Services - Operating Highlights

Three Months Ended
March 31,

Six Months Ended
March 31,

($ in millions)

2021

2020

Change

2021

2020

Change

Revenue

$

117.1

$

146.3

(20.0%)

$

254.4

$

299.1

(14.9%)

Adjusted EBITDA

$

10.9

$

14.2

(23.2%)

$

27.9

$

33.3

(16.2%)

Adjusted EBITDA Margin

9.3

%

9.7

%

(40) bps

11.0

%

11.1

%

(10) bps

Capital Expenditures

$

2.0

$

5.9

(66.1%)

$

2.3

$

7.9

(70.9%)

For the second quarter of fiscal 2021, revenue in the Development Services Segment decreased $29.2 million, or 20.0%, compared to the 2020 period. The decrease in Development Services revenues was principally driven by a $33.4 million reduction due to reduced backlog as a result of the COVID-19 pandemic, partially offset by a $10.3 million revenue contribution from acquired businesses. In addition, the sale of BrightView Tree Company in September 2020 reduced revenues by $6.1 million for the three months ended March 31, 2021.

Adjusted EBITDA for the Development Services Segment for the three months ended March 31, 2021 decreased $3.3 million, to $10.9 million, compared to the 2020 period due to the decrease in net service revenues described above, partially offset by a decrease in Selling, general, and administrative expenses due to cost containment actions. Segment Adjusted EBITDA Margin decreased 40 basis points, to 9.3% for the quarter from 9.7% in the 2020 period.

For the six months ended March 31, 2021, revenues for the Development Services Segment decreased $44.7 million, or 14.9%, compared to the 2020 period. The decrease in Development Services revenues was principally driven by a $46.7 million reduction due to reduced backlog as a result of the COVID-19 pandemic, partially offset by a $14.7 million revenue contribution from acquired businesses. In addition, the sale of BrightView Tree Company in September 2020 reduced net service revenues by $12.7 million for the six months ended March 31, 2021.

Adjusted EBITDA for the Development Services Segment for the six months ended March 31, 2021 decreased $5.4 million, to $27.9 million, compared to the 2020 period. The decrease in Segment Adjusted EBITDA was due to the decrease in net service revenues described above, partially offset by a decrease in Selling, general, and administrative expenses due to cost containment actions. Segment Adjusted EBITDA Margin remained relatively flat at 11.0% in the six months ended March 31, 2021, from 11.1% in the 2020 period.

Total BrightView Cash Flow Metrics

Six Months Ended
March 31,

($ in millions)

2021

2020

Change

Net Cash Provided by Operating Activities

$

83.4

$

85.7

(2.7%)

Free Cash Flow

$

58.9

$

53.3

10.5%

Capital Expenditures

$

27.9

$

35.1

(20.5%)

Net cash provided by operating activities for the six months ended March 31, 2021 decreased $2.3 million, to $83.4 million, from $85.7 million in the 2020 period. This decrease was due to a reduction in the cash provided by accounts receivable and unbilled and deferred revenue, offset by a decrease in cash used by other operating assets and accounts payable and other operating liabilities.

Free Cash Flow increased $5.6 million to $58.9 million for the six months ended March 31, 2021 from $53.3 million in the 2020 period. The increase in Free Cash Flow was due to a decrease in cash used in capital expenditures, partially offset by a decrease in cash provided by operating activities as described above.

For the six months ended March 31, 2021, capital expenditures were $27.9 million, compared with $35.1 million in the prior year. The Company also generated proceeds from the sale of property and equipment of $3.4 million and $2.7 million during the six months ended March 31, 2021 and 2020, respectively. Net of the proceeds from the sale of property and equipment, net capital expenditures represented 2.0% and 2.9% of revenue in the six months ended March 31, 2021 and 2020, respectively.

Total BrightView Balance Sheet Metrics

($ in millions)

March 31, 2021

March 31, 2020

September 30, 2020

Total Financial Debt1

$

1,171.3

$

1,254.4

$

1,172.3

Total Cash & Equivalents

123.8

88.0

157.1

Total Net Financial Debt2

$

1,047.5

$

1,166.4

$

1,015.2

Total Net Financial Debt to Adjusted EBITDA ratio3

3.5x

4.1x

3.7x

1Total Financial Debt includes total long-term debt, net of original issue discount, and finance lease obligations

2Total Net Financial Debt equals Total Financial Debt minus Total Cash & Equivalents

3Total Net Financial Debt to Adjusted EBITDA ratio equals Total Net Financial Debt divided by the trailing twelve month Adjusted EBITDA.

As of March 31, 2021, the Company’s Total Net Financial Debt was $1,047.5 million, a decrease of $118.9 million compared to $1,166.4 million as of March 31, 2020. The Company’s Total Net Financial Debt to Adjusted EBITDA ratio was 3.5x and 4.1x as of March 31, 2021 and March 31, 2020, respectively.

Recent M&A Activity

In April 2021, BrightView acquired Birch, Incorporated based in St. Paul, Minnesota. Founded in 1978, Birch provides a full suite of winter services, landscape maintenance and enhancements, tree care and irrigation services. Combined with our December 2020 acquisition of Cutting Edge, this transaction further solidifies BrightView as the service leader in a desirable Upper Midwest market.

COVID-19

  • Throughout the entire country, landscape maintenance continues to be recognized as an essential service.
  • All branches are operational with no limitations on the scope of services we can provide.
  • Executed downturn playbook and are continuing to exercise prudence, limiting discretionary spending, and managing capital expenditures and working capital.

Conference Call Information

A conference call to discuss the first quarter fiscal 2021 financial results is scheduled for May 6, 2021, at 10 a.m. EDT. 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 1459347. 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 replay of the call will be available from 1 p.m. EDT on May 6, 2021 to 11:59 p.m. EDT on May 13, 2021. To access the recording, dial (800) 585-8367 or (416) 621-4642 (Conference ID 1459347).

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. BrightView is the Official Field Consultant to Major League Baseball.

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 that involve substantial risks and uncertainties. All statements, other than statements of historical facts, contained in this presentation, including statements relating to our third quarter fiscal 2021 and full year fiscal 2021 guidance and other statements related to our expectations regarding our industry, strategy, future operations, future liquidity and financial position, future revenues, projected costs, prospects, plans and objectives of management, are forward-looking statements. The words such as “outlook,” “guidance,” “projects,” “continues,” “believes,” “expects,” “may,” “will,” “should,” “seeks,” “intends,” “plans,” “estimates,” or “anticipates,” or the negative version of these words or similar expressions are intended to identify forward-looking statements, although not all forward-looking statements contain these identifying words. By their nature, forward-looking statements: speak only as of the date they are made; are not statements of historical fact or guarantees of future performance; and are subject to risks, uncertainties, assumptions, or changes in circumstances that are difficult to predict or quantify. Our expectations, beliefs, and projections are expressed in good faith and we believe there is a reasonable basis for them. However, there can be no assurance that management’s expectations, beliefs and projections will result or be achieved and actual results may vary materially from what is expressed in or indicated by the forward-looking statements. Factors that could cause actual results to differ materially from those projected include, but are not limited to: general business economic and financial conditions; the duration and extent of the novel coronavirus (COVID-19) pandemic and its resurgence, and the impact of federal, state and local governmental actions and customer behavior in response to the pandemic, including possible additional or reinstated restrictions as a result of a resurgence of the pandemic; competitive industry pressures; the failure to retain current customers, renew existing customer contracts and obtain new customer contracts; the failure to enter into profitable contracts, or maintaining customer contracts that are unprofitable; 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; changes in our ability to source adequate supplies and materials in a timely manner; any failure to accurately estimate the overall risk, requirements, or costs when we bid on or negotiate contracts that are ultimately awarded to us; 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 additional 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, including regulatory costs, claims and litigation related to the use of chemicals and pesticides by employees and related third-party claims; the distraction and impact caused by litigation, of adverse litigation judgments and 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; our ability to adequately protect our intellectual property; restrictions imposed by our debt agreements that limit our flexibility in operating our business; 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; increases in interest rates governing our variable rate indebtedness increasing the cost of servicing our substantial indebtedness including proposed changes to LIBOR; ownership of our common stock; occurrence of natural disasters, terrorist attacks or other external events; changes in generally accepted accounting principles in the United States; and costs and requirements imposed as a result of maintaining the requirement of being a public company. Additional factors that could cause our 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, 2020 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”, “Free Cash Flow”, Total Financial Debt”, “Total Net Financial Debt” and “Total Net Financial Debt to Adjusted EBITDA ratio”. We believe Adjusted EBITDA, Adjusted EBITDA Margin, Adjusted Net Income, Adjusted Earnings per Share, Free Cash Flow, Total Financial Debt, Total Net Financial Debt, and Total Net Financial Debt to Adjusted EBITDA ratio 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, Free Cash Flow, Total Financial Debt, Total Net Financial Debt, and Total Net Financial Debt to Adjusted EBITDA ratio 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 Earnings per Share, Free Cash Flow, Total Financial Debt, Total Net Financial Debt, and Total Net Financial Debt to Adjusted EBITDA ratio 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, Free Cash Flow, Total Financial Debt, Total Net Financial Debt, and Total Net Financial Debt to Adjusted EBITDA ratio 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.

Free Cash Flow: We define Free Cash Flow as cash flows from operating activities less capital expenditures, net of proceeds from the sale of property and equipment.

Total Financial Debt: We define Total Financial Debt as total long-term debt, net of original issue discount, and finance/capital lease obligations.

Total Net Financial Debt: We define Total Net Financial Debt as Total Financial Debt minus total cash and cash equivalents.

Total Net Financial Debt to Adjusted EBITDA ratio: We define Total Net Financial Debt to Adjusted EBITDA ratio as Total Net Financial Debt divided by the trailing twelve month Adjusted EBITDA.

Adjusted EBITDA, Adjusted EBITDA Margin, Adjusted Net Income, Adjusted Earnings per Share, Free Cash Flow, Total Financial Debt, Total Net Financial Debt, and Total Net Financial Debt to Adjusted EBITDA ratio 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)

(in millions)*

March 31,
2021

September 30,
2020

Assets

Current assets:

Cash and cash equivalents

$

123.8

$

157.1

Accounts receivable, net

376.4

319.2

Unbilled revenue

74.4

94.6

Other current assets

61.1

62.2

Total current assets

635.7

633.1

Property and equipment, net

261.8

251.5

Intangible assets, net

214.1

221.3

Goodwill

1,919.6

1,859.3

Operating lease assets

65.1

58.8

Other assets

42.1

47.0

Total assets

$

3,138.4

$

3,071.0

Liabilities and stockholders’ equity

Current liabilities:

Accounts payable

$

144.3

$

116.8

Current portion of long-term debt

10.4

12.3

Deferred revenue

74.3

57.1

Current portion of self-insurance reserves

52.3

48.4

Accrued expenses and other current liabilities

206.8

197.2

Current portion of operating lease liabilities

20.8

18.3

Total current liabilities

508.9

450.1

Long-term debt, net

1,123.4

1,127.5

Deferred tax liabilities

40.1

38.9

Self-insurance reserves

98.4

102.7

Long-term operating lease liabilities

51.2

47.5

Other liabilities

34.6

32.8

Total liabilities

1,856.6

1,799.5

Stockholders’ equity:

Preferred stock, $0.01 par value; 50,000,000 shares authorized; no shares

issued or outstanding as of March 31, 2021 and September 30, 2020

Common stock, $0.01 par value; 500,000,000 shares authorized; 105,200,000

and 104,900,000 shares issued and outstanding as of March 31, 2021 and September 30, 2020, respectively

1.1

1.0

Treasury stock, at cost; 237,000 and 91,000 shares as of

March 31, 2021 and September 30, 2020, respectively

(3.6

)

(2.5

)

Additional paid-in-capital

1,479.4

1,467.8

Accumulated deficit

(193.6

)

(187.9

)

Accumulated other comprehensive loss

(1.5

)

(6.9

)

Total stockholders’ equity

1,281.8

1,271.5

Total liabilities and stockholders’ equity

$

3,138.4

$

3,071.0

(*) Amounts may not total due to rounding.

BrightView Holdings, Inc.

Consolidated Statements of Operations

(Unaudited)

 

Three Months Ended
March 31,

Six Months Ended
March 31,

2021

2020

2021

2020

(in millions)*

Net service revenues

$

651.9

$

559.1

$

1,206.3

$

1,129.8

Cost of services provided

493.8

426.8

914.6

854.5

Gross profit

158.1

132.3

291.7

275.3

Selling, general and administrative expense

127.9

126.9

251.3

257.1

Amortization expense

12.5

13.6

26.4

27.1

Income (loss) from operations

17.7

(8.2

)

14.0

(8.9

)

Other income (expense)

0.5

(1.9

)

2.0

(1.3

)

Interest expense

9.6

17.1

23.1

34.5

Income (loss) before income taxes

8.6

(27.2

)

(7.1

)

(44.7

)

Income tax expense (benefit)

2.3

(6.7

)

(1.4

)

(11.6

)

Net income (loss)

$

6.3

$

(20.5

)

$

(5.7

)

$

(33.1

)

Income (loss) per share:

Basic and diluted

$

0.06

$

(0.20

)

$

(0.05

)

$

(0.32

)

BrightView Holdings, Inc.

Segment Reporting

(Unaudited)

 

Three Months Ended
March 31,

Six Months Ended
March 31,

2021

2020

2021

2020

(in millions)*

Maintenance Services

$

535.7

$

413.5

$

953.8

$

832.4

Development Services

117.1

146.3

254.4

299.1

Eliminations

(0.9

)

(0.7

)

(1.9

)

(1.7

)

Net Service Revenues

$

651.9

$

559.1

$

1,206.3

$

1,129.8

Maintenance Services

$

72.3

$

40.7

$

121.9

$

88.4

Development Services

10.9

14.2

27.9

33.3

Corporate

(16.4

)

(16.0

)

(30.5

)

(31.2

)

Adjusted EBITDA

$

66.8

$

38.9

$

119.3

$

90.5

Maintenance Services

$

15.3

$

14.3

$

24.2

$

26.1

Development Services

2.0

5.9

2.3

7.9

Corporate

0.9

0.4

1.4

1.1

Capital Expenditures

$

18.2

$

20.6

$

27.9

$

35.1

(*) Amounts may not total due to rounding.

BrightView Holdings, Inc.

Consolidated Statements of Cash Flows

(Unaudited)

Six Months Ended
March 31,

2021

2020

(in millions)*

Cash flows from operating activities:

Net income (loss)

$

(5.7

)

$

(33.1

)

Adjustments to reconcile net (loss) to net cash provided by operating activities:

Depreciation

42.3

39.5

Amortization of intangible assets

26.4

27.1

Amortization of financing costs and original issue discount

1.9

1.8

Deferred taxes

(0.8

)

(11.6

)

Equity-based compensation

10.2

13.1

Realized loss on hedges

5.6

6.6

Other non-cash activities, net

1.2

(0.3

)

Change in operating assets and liabilities:

Accounts receivable

(48.7

)

8.1

Unbilled and deferred revenue

37.0

63.9

Other operating assets

8.1

(18.3

)

Accounts payable and other operating liabilities

5.9

(11.1

)

Net cash provided by operating activities

83.4

85.7

Cash flows from investing activities:

Purchase of property and equipment

(27.9

)

(35.1

)

Proceeds from sale of property and equipment

3.4

2.7

Business acquisitions, net of cash acquired

(75.7

)

(87.1

)

Other investing activities, net

0.2

0.6

Net cash (used) by investing activities

(100.0

)

(118.9

)

Cash flows from financing activities:

Repayments of finance lease obligations

(8.8

)

(3.2

)

Repayments of term loan

(5.2

)

(5.2

)

Repayments of receivables financing agreement, net of issue costs

(24.6

)

(50.0

)

Repayments of revolving credit facility

(10.0

)

Proceeds from receivables financing agreement

24.0

80.0

Proceeds from revolving credit facility

70.0

Proceeds from issuance of common stock, net of share issuance costs

1.0

0.1

Repurchase of common stock and distributions

(1.1

)

Other financing activities, net

(2.0

)

0.4

Net cash (used) provided by financing activities

(16.7

)

82.1

Net change in cash and cash equivalents

(33.3

)

48.9

Cash and cash equivalents, beginning of period

157.1

39.1

Cash and cash equivalents, end of period

$

123.8

$

88.0

(*) 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)*

2021

2020

2021

2020

Adjusted EBITDA

Net income (loss)

$

6.3

$

(20.5

)

$

(5.7

)

$

(33.1

)

Plus:

Interest expense, net

9.6

17.1

23.1

34.5

Income tax expense (benefit)

2.3

(6.7

)

(1.4

)

(11.6

)

Depreciation expense

20.7

19.3

42.3

39.5

Amortization expense

12.5

13.6

26.4

27.1

Establish public company financial reporting compliance (a)

0.9

Business transformation and integration costs (b)

6.2

8.9

12.8

17.3

Offering-related expenses (c)

1.2

0.2

1.5

Equity-based compensation (d)

5.3

4.9

10.2

13.3

COVID-19 related expenses (e)

3.9

1.1

11.4

1.1

Adjusted EBITDA

$

66.8

$

38.9

$

119.3

$

90.5

Adjusted Net Income

Net income (loss)

$

6.3

$

(20.5

)

$

(5.7

)

$

(33.1

)

Plus:

Amortization expense

12.5

13.6

26.4

27.1

Establish public company financial reporting compliance (a)

0.9

Business transformation and integration costs (b)

6.2

8.9

12.8

17.3

Offering-related expenses (c)

1.2

0.2

1.5

Equity-based compensation (d)

5.3

4.9

10.2

13.3

COVID-19 related expenses (e)

3.9

1.1

11.4

1.1

Income tax adjustment (f)

(7.0

)

(7.3

)

(15.2

)

(15.6

)

Adjusted Net Income

$

27.2

$

1.9

$

40.1

$

12.5

Free Cash Flow

Cash flows from operating activities

$

78.3

$

78.4

$

83.4

$

85.7

Minus:

Capital expenditures

18.2

20.6

27.9

35.1

Plus:

Proceeds from sale of property and equipment

2.8

1.6

3.4

2.7

Free Cash Flow

$

62.9

$

59.4

$

58.9

$

53.3

(*) 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 revenue recognition standard (ASC 606 – 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)*

2021

2020

2021

2020

Severance and related costs

$

-

$

0.4

$

0.2

$

0.6

Business integration (g)

2.1

3.5

5.7

8.9

IT infrastructure, transformation, and other (h)

4.1

5.0

6.9

7.8

Business transformation and integration costs

$

6.2

$

8.9

$

12.8

$

17.3

(c)

Represents expenses incurred for IPO related litigation and subsequent registration statements.

(d)

Represents equity-based compensation expense and related taxes recognized for equity incentive plans outstanding.

(e)

Represents expenses related to the Company’s response to the COVID-19 pandemic, principally temporary and incremental salary and related expenses, personal protective equipment and cleaning and supply purchases, and other.

(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.

Three Months Ended
March 31,

Six Months Ended
March 31,

(in millions)*

2021

2020

2021

2020

Tax impact of pre-tax income adjustments

$

7.2

$

7.3

$

14.9

$

15.3

Discrete tax items

(0.2

)

0.3

0.3

Income tax adjustment

$

7.0

$

7.3

$

15.2

$

15.6

(g)

Represents isolated expenses specifically related to the integration of acquired companies such as one-time employee retention costs, employee onboarding and training costs, and fleet and uniform rebranding costs. The Company excludes Business integration costs from the measures disclosed above since such expenses vary in amount due to the number of acquisitions and size of acquired companies as well as factors specific to each acquisition, and as a result lack predictability as to occurrence and/or timing, and create a lack of comparability between periods.

(h)

Represents expenses related to distinct initiatives, typically significant enterprise-wide changes. Such expenses are excluded from the measures disclosed above since such expenses vary in amount based on occurrence as well as factors specific to each of the activities, are outside of the normal operations of the business, and create a lack of comparability between periods.

Total Financial Debt and Total Financial Net Debt

(in millions)*

March 31, 2021

March 31, 2020

September 30, 2020

Long-term debt, net

$

1,123.4

$

1,220.8

$

1,127.5

Plus:

Current portion of long-term debt

10.4

10.4

12.3

Financing costs, net

12.8

15.5

13.9

Present value of net minimum payment - finance lease obligations

24.7

7.7

18.6

Total Financial Debt

1,171.3

1,254.4

1,172.3

Less: Cash and cash equivalents

(123.8

)

(88.0

)

(157.1

)

Total Net Financial Debt

$

1,047.5

$

1,166.4

$

1,015.2

Total Net Financial Debt to Adjusted EBITDA ratio

3.5x

4.1x

3.7x

(*) Amounts may not total due to rounding.

_____________________

1 NOAA - National Oceanic and Atmospheric Administration

Contacts:

INVESTOR RELATIONS:
John E. Shave, VP of Investor Relations
484.567.7148
John.Shave@BrightView.com

Data & News supplied by www.cloudquote.io
Stock quotes supplied by Barchart
Quotes delayed at least 20 minutes.
By accessing this page, you agree to the following
Privacy Policy and Terms and Conditions.