GFL Environmental Reports First Quarter 2021 Results
GFL Environmental reported a first-quarter revenue of $1,186.6 million, a 27.4% increase year-over-year. Adjusted EBITDA rose 37.6% to $306.6 million, with an Adjusted EBITDA margin of 25.8%, up from 23.9%. Despite a net loss of $226.2 million, Adjusted Net Income stood at $12.7 million. Operating cash flows surged 523.7% to $212.7 million. The company anticipates a guidance increase due to solid waste volume recovery, although challenges persist from COVID-19 restrictions in Canada.
- Revenue increased by 27.4% to $1,186.6 million.
- Adjusted EBITDA rose by 37.6% to $306.6 million.
- Adjusted EBITDA margin expanded to 25.8% from 23.9%.
- Operating cash flows increased by 523.7% to $212.7 million.
- Solid waste Adjusted EBITDA margin reached a historical high of 31.0%.
- Net loss of $226.2 million reported.
- COVID-19 restrictions in Canada hinder recovery.
- Revenue of
$1,186.6 million , increase of27.4% - Adjusted EBITDA1 of
$306.6 million , increase of37.6% ; 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 of31.0% , 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 /PRNewswire/ - GFL Environmental Inc. (NYSE: GFL) (TSX: GFL) ("GFL" or the "Company") today announced its results for the first quarter of 2021.
"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
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
First Quarter Results
Revenue increased by
Adjusted EBITDA1 increased by
Cash flows from operating activities increased by
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 | 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 |
(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.
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