BLUE BELL, Pa.--(BUSINESS WIRE)--BrightView Holdings, Inc. (NYSE: BV), the leading commercial landscaping services company in the United States, today reported unaudited results for the fourth quarter and audited results for the full fiscal year ended September 30, 2020.
“Our fourth quarter and full year results highlight the continued resiliency of our contract-based business, reflect the positive underlying trends of our strong-on-strong acquisition strategy, and the benefits of the investments we are making in being a best-in-class maintenance services company. This quarter we delivered strong cash generation and liquidity, underpinned by our on-going focus on working capital and reducing capital expenditures,” said Andrew Masterman, BrightView President and Chief Executive Officer. “Our services and results of operations continue to benefit from a designation as an essential service. And our team continues to do an incredible job responding to the COVID-19 crisis by prioritizing health and safety, focusing on our client relationships, and by delivering solid results in a challenging operating environment.”
“Despite ancillary softness and project delays, COVID-19 impacts to date have been modest due to our resilient contract revenue base, and our earnings have benefitted from cost management actions. Cash generation remains healthy, margins strong, our capex requirements remain modest, and we expect our M&A pipeline to continue to be a reliable and sustainable source of revenue growth,” Masterman said. “We expect COVID-19 impacts will continue to be felt over the next few quarters as conditions remain fluid. That said, we believe we are in a strong position to return to positive growth in fiscal 2021, with continued strong cash generation and solid Adjusted EBITDA results. And, we believe the digital, sales, training and other investments we are making in strengthening our business will drive long-term best-in-class performance.”
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 above. 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.
Fourth Quarter Fiscal 2020 Highlights
- Net cash provided by operating activities of $83.2 million, an increase of 37.5% compared to $60.5 million in the prior year period.
- Free Cash Flow of $77.4 million, an increase of 61.9% compared to the prior year period of $47.8 million.
- Total revenue of $608.1 million; a 2.7% decrease compared to the prior year period of $624.8 million.
- Maintenance land revenue of $444.0 million; a 2.6% decrease compared to the prior year period of $455.7 million;
- Development revenue of $165.1 million, a 3.3% decrease compared to the prior year period of $170.7 million.
- Net Loss of $6.1 million, or $(0.06) per share, and a net loss margin of 1.0%, compared to Net Income of $25.1 million, or $0.24 per share, and a net income margin of 4.0%, in the prior year period.
- Adjusted EBITDA of $90.0 million and Adjusted EBITDA margin of 14.8%, compared to Adjusted EBITDA of $91.9 million and Adjusted EBITDA margin of 14.7% in the prior year period.
Full Year Fiscal 2020 Highlights
- Net cash provided by operating activities of $245.1 million, an increase of 44.4% compared to $169.7 million in the prior year.
- Free Cash Flow of $197.2 million, an increase of 127.7% compared to the prior year of $86.6 million.
- Total revenue of $2,346.0 million, a 2.4% decrease compared to $2,404.6 million in the prior year.
- Maintenance revenue of $1,739.1 million, a 4.1% decrease compared to the prior year of $1,813.4 million;
- Land revenue of $1,576.0 million, 0.5% growth compared to the prior year of $1,568.3 million;
- Snow revenue of $163.1 million, a 33.5% decrease compared to the prior year of $245.1 million.
- Development revenue of $610.6 million, a 2.6% increase compared to the prior year of $595.4 million.
- Net Loss of $41.6 million, or $(0.40) per share, and a net loss margin of 1.8%, compared to Net Income of $44.4 million, or $0.43 per share, and a net income margin of 1.8%, in the prior year.
- Adjusted EBITDA of $271.6 million and Adjusted EBITDA margin of 11.6%, compared to Adjusted EBITDA of $305.1 million and Adjusted EBITDA margin of 12.7% in the prior year.
“During the quarter we generated a record $77.4 million in Free Cash Flow, totaling $197.2 million for the full fiscal year, also a record for the Company,” said John Feenan, BrightView Executive Vice President and Chief Financial Officer. “We continue to maintain a disciplined financial policy while remaining intensely focused on accretive transactions and paying down debt. The fundamentals of our business and our industry remain strong and our cash generation, combined with continued modest capital needs, will continue to drive stockholder value.”
Fiscal 2020 Results – Total BrightView
| Total BrightView - Operating Highlights | ||||||||||||||||||||
| Three Months Ended September 30, | Fiscal Year Ended September 30, | |||||||||||||||||||
| ($ in millions, except per share figures) | 2020 | 2019 | Change | 2020 | 2019 | Change | ||||||||||||||
| Revenue | $ | 608.1 | $ | 624.8 | (2.7%) | $ | 2,346.0 | $ | 2,404.6 | (2.4%) | ||||||||||
| Net (Loss) Income | $ | (6.1 | ) | $ | 25.1 | (124.3%) | $ | (41.6 | ) | $ | 44.4 | (193.7%) | ||||||||
| Net (Loss) Income Margin | (1.0 | %) | 4.0 | % | (500) bps | (1.8 | %) | 1.8 | % | (360) bps | ||||||||||
| Adjusted EBITDA | $ | 90.0 | $ | 91.9 | (2.1%) | $ | 271.6 | $ | 305.1 | (11.0%) | ||||||||||
| Adjusted EBITDA Margin | 14.8 | % | 14.7 | % | 10 bps | 11.6 | % | 12.7 | % | (110) bps | ||||||||||
| Adjusted Net Income | $ | 38.3 | $ | 45.0 | (14.9%) | $ | 94.7 | $ | 118.0 | (19.7%) | ||||||||||
| (Loss) Earnings per Share, GAAP | $ | (0.06 | ) | $ | 0.24 | 125.0% | $ | (0.40 | ) | $ | 0.43 | 193.0% | ||||||||
| Earnings per Share, Adjusted | $ | 0.37 | $ | 0.44 | (15.9%) | $ | 0.91 | $ | 1.15 | (20.9%) | ||||||||||
| Weighted average number of common shares outstanding | 103.9 | 102.8 | 1.1% | 103.7 | 102.7 | 1.0% | ||||||||||||||
Fiscal 2020 Results – Segments
| Maintenance Services - Operating Highlights | ||||||||||||||||||||
| Three Months EndedSeptember 30, | Fiscal Year EndedSeptember 30, | |||||||||||||||||||
| ($ in millions) | 2020 | 2019 | Change | 2020 | 2019 | Change | ||||||||||||||
| Landscape Maintenance | $ | 444.0 | $ | 455.7 | (2.6%) | $ | 1,576.0 | $ | 1,568.3 | 0.5% | ||||||||||
| Snow Removal | $ | (0.1 | ) | $ | (0.3 | ) | 66.7% | $ | 163.1 | $ | 245.1 | (33.5%) | ||||||||
| Total Revenue | $ | 443.9 | $ | 455.4 | (2.5%) | $ | 1,739.1 | $ | 1,813.4 | (4.1%) | ||||||||||
| Adjusted EBITDA | $ | 77.2 | $ | 77.2 | 0.0% | $ | 250.1 | $ | 282.0 | (11.3%) | ||||||||||
| Adjusted EBITDA Margin | 17.4 | % | 17.0 | % | 40 bps | 14.4 | % | 15.6 | % | (120) bps | ||||||||||
| Capital Expenditures | $ | 6.6 | $ | 10.9 | (39.4%) | $ | 40.6 | $ | 65.4 | (37.9%) | ||||||||||
For the fiscal year ended September 30, 2020, revenue in the Maintenance Services Segment decreased 4.1% to $1,739.1 million. Revenues from snow removal services were $163.1 million, a decrease of $82.0 million over the 2019 period and revenues from landscape services were $1,576.0 million, an increase of $7.7 million over the 2019 period. The decrease in snow removal services was primarily attributable to a decreased frequency of snowfall events, the geographical distribution of the snowfall events which negatively impacted the Mid-Atlantic, Northeast, and Midwest regions, the lower volume of snowfall per event and the lower relative snowfall in the fiscal year ended September 30, 2020 (for our current branch structure, snowfall for the fiscal years ended September 30, 2020 and 2019 was 61.6% and 86.3%, respectively, of the historical 10-year average for that twelve-month period). The increase in landscape services revenues was driven by a $101.9 million revenue contribution from acquired businesses, partially offset by a decrease of $94.2 million, the majority of which was due to a reduction in demand for ancillary services as a result of the COVID-19 pandemic.
Adjusted EBITDA for the Maintenance Services Segment for the fiscal year ended September 30, 2020 decreased 11.3% to $250.1 million. Segment Adjusted EBITDA Margin decreased 120 basis points to 14.4% versus 15.6% in the prior year. The decreases in Segment Adjusted EBITDA and Segment Adjusted EBITDA Margin were due to the decrease in net service revenues described above.
| Development Services - Operating Highlights | ||||||||||||||||||||
| Three Months EndedSeptember 30, | Fiscal Year EndedSeptember 30, | |||||||||||||||||||
| ($ in millions) | 2020 | 2019 | Change | 2020 | 2019 | Change | ||||||||||||||
| Revenue | $ | 165.1 | $ | 170.7 | (3.3%) | $ | 610.6 | $ | 595.4 | 2.6% | ||||||||||
| Adjusted EBITDA | $ | 26.3 | $ | 26.7 | (1.5%) | $ | 80.2 | $ | 81.7 | (1.8%) | ||||||||||
| Adjusted EBITDA Margin | 15.9 | % | 15.7 | % | 20 bps | 13.1 | % | 13.7 | % | (60) bps | ||||||||||
| Capital Expenditures | $ | (0.2 | ) | $ | 0.7 | (128.6%) | $ | 9.4 | $ | 10.6 | (11.3%) | |||||||||
For the fiscal year ended September 30, 2020, revenue in the Development Services Segment increased 2.6% to $610.6 million. The increase in Development Services revenues was driven by higher first half project volumes and a stronger first half project completion percentage compared to the prior year.
Adjusted EBITDA for the Development Services Segment decreased 1.8% to $80.2 million during the fiscal year ended September 30, 2020. Segment Adjusted EBITDA Margin decreased 60 basis points, to 13.1%, in the fiscal year ended September 30, 2020, from 13.7% in the 2019 period. The decreases in Segment Adjusted EBITDA and Segment Adjusted EBITDA Margin were due principally to the completion of certain large projects in the prior year and construction delays as a result of the COVID-19 pandemic, partially offset by the increase in net service revenues described above.
| Total BrightView Cash Flow Metrics | ||||||||
| Fiscal Year Ended September 30, | ||||||||
| ($ in millions) | 2020 | 2019 | Change | |||||
| Cash Provided by Operating Activities | $ | 245.1 | $ | 169.7 | 44.4% | |||
| Free Cash Flow | $ | 197.2 | $ | 86.6 | 127.7% | |||
| Capital Expenditures | $ | 52.7 | $ | 89.9 | (41.4%) | |||
For the fiscal year ended September 30, 2020, capital expenditures were $52.7 million, compared with $89.9 million in the prior year. The Company also generated proceeds from the sale of property and equipment of $4.8 million and $6.8 million in fiscal 2020 and 2019, respectively. Net of the proceeds from the sale of property and equipment in each year, net capital expenditures represented 2.0% and 3.5% of revenue in fiscal 2020 and 2019, respectively.
| Total BrightView Balance Sheet Metrics | ||||||
| ($ in millions) | September 30, 2020 | September 30, 2019 | ||||
| Total Financial Debt1 | $ | 1,172.3 | $ | 1,170.2 | ||
| Total Cash & Equivalents | $ | 157.1 | $ | 39.1 | ||
| Total Net Financial Debt2 | $ | 1,015.2 | $ | 1,131.1 | ||
| Total Net Financial Debt to Adjusted EBITDA ratio3 | 3.7x | 3.7x | ||||
| 1Total Financial Debt includes total long-term debt, net of original issue discount, and finance/capital 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 September 30, 2020, the Company’s Total Net Financial Debt was $1,015.2 million, a decrease of $115.9 million compared to $1,131.1 million as of September 30, 2019. The Company’s Total Net Financial Debt to Adjusted EBITDA ratio was 3.7x as of September 30, 2020 and September 30, 2019.
Recent Developments
Acquisition of Commercial Landscaping Company – All Commercial Landscaping Services (ACLS)
In September 2020, BrightView acquired ACLS, a full-service landscaping company specializing in landscape maintenance, irrigation, enhancement, arbor care and water management. Their clients include commercial, municipal, multi-family and retail organizations throughout the greater Fresno market.
Disposal of BrightView Tree Company, and Acquisition of Commercial Landscaping Company – Commercial Tree Care, Inc. (CTC)
In September 2020, BrightView sold its tree nursery business, BrightView Tree Company, and in October 2020, BrightView acquired CTC, a full-service tree care company based in San Jose, Calif. Founded in 1992, CTC is a full-service tree care provider specializing in pruning, tree removal, stump grinding, cabling, bracing, fertility treatment, pest and disease control, install and transplant, forestry fire fighting and timber harvesting. CTC also consults for development, appraisal, maintenance plans and overall site evaluation. The combination of these two transactions support BrightView’s overall strategic growth plan to redeploy assets from the Development segment to the Maintenance segment, as CTC will be accounted for in the Maintenance segment and BrightView Tree Company was accounted for in the Development segment.
Acquisition of Commercial Landscaping Company – Water, Land, Environment (WLE), LLC
In October 2020, BrightView acquired WLE, a commercial landscape maintenance and development company headquartered in Austin, Texas. Founded in 2003, WLE (Water | Land | Environment) is a full-service commercial landscape management company, whose 250-member team serves HOA, developer, commercial, and municipal clients across three markets in Central Texas.
COVID-19 Update
- Throughout the entire country, landscape maintenance is recognized as an essential service.
- All branches are operational with no limitations on scope of services.
- Executed downturn playbook and are continuing to exercise prudence, limiting discretionary spending, managing capital expenditures and working capital, and enhancing liquidity.
- Prioritizing additional actions to protect revenue and margins, and preserve cash in the event of a continued and prolonged resurgence.
- Specific Health and Safety actions include:
- Proactively communicating critical information from CDC to employees.
- Implemented branch based social distancing and hygiene and sanitization procedures.
- Continuing to prohibit non-essential travel and mandated work from home policies as applicable.
- Adhering to state and local mandates and guidelines.
- Tracking current and potential exposures, imposing quarantine measures, and assigning case workers.
- Implemented protocols requiring face coverings.
About BrightView
BrightView is the largest provider of commercial landscaping services in the United States. Through its team of approximately 19,700 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.
