BrightView Reports Fourth Quarter and Full Year Fiscal 2021 Results

BrightView Holdings

BLUE BELL, PA — BrightView Holdings, Inc. (NYSE: BV) recently reported unaudited results for the fourth quarter and audited results for the full fiscal year ended September 30, 2021.

“We are very pleased with a strong quarter driven by Maintenance Land organic revenue growth of 9.2% and record full year revenues for the Company approaching $2.6 billion. Net new sales in fiscal Q4 were the highest ever fourth quarter for BrightView since going public. 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 our expanded sales team and sales enablement technologies. Our recurring revenue model drives profitable top line growth which delivers strong cash generation and liquidity,” said Andrew Masterman, BrightView President and Chief Executive Officer. “As I look back on the last year, it is remarkable how much we persevered and have accomplished. Ultimately, the basis of our success is our people who continue to navigate challenging circumstances and remain dedicated to professional excellence. Our people, their performance, and their intense customer focus is why I am confident in our ability to deliver continued profitable growth.”

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.

Fourth Quarter Fiscal 2021 Highlights

  • Total revenue of $673.7 million, a $65.6 increase compared to $608.1 million in the prior year.
  • Maintenance revenue of $504.5 million, a 14.5% increase compared to $440.7 million in the prior year, underpinned by organic revenue growth of 9.2%.
  • Development revenue of $170.2 million compared to $168.4 million in the prior year.
  • Net Income of $26.8 million, or $0.26 per share, compared to Net Loss of $6.1 million, or $(0.06) per share in the prior year; Net Income Margin of 4.0%, an improvement of 500 basis points compared to prior year Net Loss Margin of 1.0%.
  • Adjusted EBITDA of $89.5 million compared to Adjusted EBITDA of $90.0 million in the prior year.

Full Year Fiscal 2021 Highlights

  • Total revenue of $2,553.6 million, an 8.8% increase compared to $2,346.0 million in the prior year.
  • Maintenance revenue of $1,982.9 million, a 14.7% increase compared to $1,729.4 million in the prior year;
    • Land revenue of $1,698.0 million compared to the prior year of $1,566.3 million, underpinned by organic revenue growth of 3.7%.
    • Snow revenue of $284.9 million compared to the prior year of $163.1 million.
  • Development revenue of $574.9 million, compared to $620.3 million in the prior year.
  • Net Income of $46.3 million, or $0.44 per share, and a Net Income Margin of 1.8%, compared to Net Loss of $41.6 million, or ($0.40) per share, and a net loss margin of 1.8%, in the prior year.
  • Adjusted EBITDA of $302.3 million, an increase of $30.7 million or 11.3% compared to Adjusted EBITDA of $271.6 million in the prior year; Adjusted EBITDA margin of 11.8%, an increase of 20 basis points compared to Adjusted EBITDA margin of 11.6% in the prior year.
  • Net cash provided by operating activities of $148.4 million and Free Cash Flow generation of $96.7 million.
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Fiscal 2021 Results – Total BrightView

Total BrightView – Operating Highlights
Three Months Ended September 30, Year Ended September 30,
($ in millions, except per share figures) 2021 2020 Change 2021 2020 Change
Revenue $ 673.7 $ 608.1 10.8% $ 2,553.6 $ 2,346.0 8.8%
Net Income (Loss) $ 26.8 $ (6.1 ) 539.3% $ 46.3 $ (41.6 ) 211.3%
Net Income (Loss) Margin 4.0 % (1.0 %) 500 bps 1.8 % (1.8 %) 360 bps
Adjusted EBITDA $ 89.5 $ 90.0 (0.6%) $ 302.3 $ 271.6 11.3%
Adjusted EBITDA Margin 13.3 % 14.8 % (150) bps 11.8 % 11.6 % 20 bps
Adjusted Net Income $ 39.6 $ 38.3 3.4% $ 126.3 $ 94.7 33.4%
Basic Earnings (Loss) per Share $ 0.26 $ (0.06 ) 533.3% $ 0.44 $ (0.40 ) 210.0%
Earnings per Share, Adjusted $ 0.38 $ 0.37 2.7% $ 1.20 $ 0.91 31.9%
Weighted average number of common shares outstanding 105.2 103.9 1.3% 105.2 103.7 1.4%
For the fourth quarter of fiscal 2021, total revenue increased 10.8% to $673.7 million driven principally by an increase in Maintenance Services revenues of $63.8 million. Net Income was $26.8 million compared to Net Loss of $6.1 million in the prior year period. Total Adjusted EBITDA of $89.5 million was relatively flat compared to $90.0 million in the prior year period. Maintenance Services Segment Adjusted EBITDA increased $10.1 million, or 13.1%, to $87.1 million compared to $77.0 in the prior year period. Development Services Segment Adjusted EBITDA decreased $7.9 million to $18.6 million from $26.5 million in the prior year period due principally to a decrease in organic project revenues and higher materials cost as a percentage of revenue. The Segment Adjusted EBITDA results are discussed further below.

For the fiscal year ended September 30, 2021, total revenue increased 8.8% to $2,553.6 million driven principally by an increase in Maintenance Services revenues of $253.5 million. Net Income was $46.3 million compared to a Net Loss of $41.6 million in the prior year period. Total Adjusted EBITDA increased $30.7 million, or 11.3%, to $302.3 million from $271.6 million in the prior year period. Maintenance Services Segment Adjusted EBITDA increased $50.9 million, or 20.5%, to $299.6 million compared to $248.7 million in the prior year period. Development Services Segment Adjusted EBITDA decreased to $65.2 million from $81.6 million in the prior year period due principally to a decrease in net service revenues and higher materials cost as a percentage of revenue. The Segment Adjusted EBITDA results are discussed further below.

Fiscal 2021 Results – Segments

Maintenance Services – Operating Highlights
Three Months Ended September 30, Year Ended September 30,
($ in millions) 2021 2020 Change 2021 2020 Change
Landscape Maintenance $ 504.8 $ 440.8 14.5% $ 1,698.0 $ 1,566.3 8.4%
Snow Removal $ (0.3 ) $ (0.1 ) (200.0%) $ 284.9 $ 163.1 74.7%
Total Revenue $ 504.5 $ 440.7 14.5% $ 1,982.9 $ 1,729.4 14.7%
Adjusted EBITDA $ 87.1 $ 77.0 13.1% $ 299.6 $ 248.7 20.5%
Adjusted EBITDA Margin 17.3 % 17.5 % (20) bps 15.1 % 14.4 % 70 bps
Capital Expenditures $ 14.9 $ 6.6 125.8% $ 52.4 $ 40.6 29.1%
For the fourth quarter of fiscal 2021, revenue in the Maintenance Services Segment increased by $63.8 million, or 14.5%, from the 2020 period. The increase was primarily driven by a $40.7 million increase in commercial landscape services underpinned by a combination of contract and ancillary services growth, as well as a $24.0 million revenue contribution from acquired businesses.

Adjusted EBITDA for the Maintenance Services Segment for the three months ended September 30, 2021 increased by $10.1 million to $87.1 million from $77.0 million in the 2020 period. The increase in Segment Adjusted EBITDA was principally driven by the increase in Maintenance Services revenues discussed above. Segment Adjusted EBITDA Margin decreased slightly, by 20 basis points, to 17.3%, in the three months ended September 30, 2021, from 17.5% in the 2020 period.

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For the fiscal year ended September 30, 2021, revenue in the Maintenance Service Segment increased by $253.5 million, or 14.7%, compared to the 2020 period. Revenues from landscape maintenance services were $1,698.0 million for the fiscal year ended September 30, 2021, an increase of $131.7 million over the 2020 period. Revenues from snow removal services were $284.9 million, an increase of $121.8 million over the 2020 period. The increase in landscape maintenance service revenues was driven by an increase in commercial landscaping revenues of $57.6 million underpinned by a combination of contract and ancillary revenue growth. In addition, acquisitions contributed $77.2 million of incremental landscape maintenance service revenues. The increase in snow removal services was primarily attributable to growth in the Company’s snow contract book of business coupled with the increased frequency of snowfall events and the higher relative snowfall compared to the 2020 period.

Adjusted EBITDA for the Maintenance Services Segment for the fiscal year ended September 30, 2021 increased $50.9 million, to $299.6 million, compared to $248.7 million in the 2020 period. Segment Adjusted EBITDA Margin increased 70 basis points, to 15.1%, in the fiscal year ended September 30, 2021, from 14.4% in the 2020 period. The increases in Segment Adjusted EBITDA and Segment Adjusted EBITDA Margin were due to the increase in net service revenues described above.

Development Services – Operating Highlights
Three Months Ended September 30, Year Ended September 30,
($ in millions) 2021 2020 Change 2021 2020 Change
Revenue $ 170.2 $ 168.4 1.1% $ 574.9 $ 620.3 (7.3%)
Adjusted EBITDA $ 18.6 $ 26.5 (29.8%) $ 65.2 $ 81.6 (20.1%)
Adjusted EBITDA Margin 10.9 % 15.7 % (480) bps 11.3 % 13.2 % (190) bps
Capital Expenditures $ 1.2 $ (0.2 ) 700.0% $ 6.2 $ 9.4 (34.0%)
For the fourth quarter of fiscal 2021, revenue in the Development Services Segment increased $1.8 million, or 1.1%, compared to the 2020 period. The increase in Development Services revenues was principally driven by a $20.2 million revenue contribution from acquired companies, partially offset by a decline of $12.3 million due to lower project volumes compared to the prior year. Additionally, the sale of BrightView Tree Company in September 2020 reduced net service revenues by $6.1 million for the fourth quarter of fiscal 2021.

Adjusted EBITDA for the Development Services Segment for the three months ended September 30, 2021 decreased $7.9 million, to $18.6 million, compared to the 2020 period. Segment Adjusted EBITDA Margin decreased 480 basis points, to 10.9% for the quarter from 15.7% in the 2020 period. Segment Adjusted EBITDA and Segment Adjusted EBITDA Margin decreased due to the decrease in net service revenues described above coupled with higher material costs.

For the fiscal year ended September 30, 2021, revenue in the Development Services Segment decreased $45.4 million, or 7.3%, compared to the 2020 period. The decrease in Development Services revenues was principally driven by a $70.5 million reduction due to reduced backlog as a result of the COVID-19 pandemic, partially offset by $49.8 million of revenue contributions from acquired businesses. In addition, the sale of BrightView Tree Company in September 2020 reduced net service revenues by $24.7 million for the fiscal year ended September 30, 2021.

Adjusted EBITDA for the Development Services Segment for the fiscal year ended September 30, 2021 decreased $16.4 million, to $65.2 million, compared to $81.6 million in the 2020 period. Segment Adjusted EBITDA Margin decreased 190 basis points, to 11.3%, in the fiscal year ended September 30, 2021, from 13.2% in the 2020 period. The decreases in Segment Adjusted EBITDA and Segment Adjusted EBITDA Margin were primarily due to the decrease in net service revenues described above coupled with higher material costs experienced in the second half of the fiscal year, partially offset by a decrease in Selling, general, and administrative expenses due to cost containment actions.

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Total BrightView Cash Flow Metrics
Year Ended September 30,
($ in millions) 2021 2020 2019
Net Cash Provided by Operating Activities $ 148.4 $ 245.1 $ 169.7
Free Cash Flow $ 96.7 $ 197.2 $ 86.6
Capital Expenditures $ 61.2 $ 52.7 $ 89.9
Net cash provided by operating activities for the fiscal year ended September 30, 2021 decreased $96.7 million, to $148.4 million, from $245.1 million in the 2020 period. This decrease was primarily due to a decrease in cash provided by net working capital, including accounts payable and other operating liabilities, accounts receivable, unbilled and deferred revenue, and other operating assets. The decrease was partially offset by an increase in cash provided by net income (loss).

Free Cash Flow decreased $100.5 million to $96.7 million for the fiscal year ended September 30, 2021 from $197.2 million in the 2020 period. The decrease in Free Cash Flow was principally due to the decrease in cash flows from operating activities of $96.7 million as described above.

For the fiscal year ended September 30, 2021, capital expenditures were $61.2 million, compared with $52.7 million in the prior year. The Company also generated proceeds from the sale of property and equipment of $9.5 million and $4.8 million during the fiscal year ended September 30, 2021 and 2020, respectively. Net of the proceeds from the sale of property and equipment, net capital expenditures represented 2.0% of revenue in each of the fiscal years ended September 30, 2021 and 2020.

Total BrightView Balance Sheet Metrics
($ in millions) September 30, 2021 September 30, 2020
Total Financial Debt1 $ 1,179.7 $ 1,172.3
Total Cash & Equivalents 123.7 157.1
Total Net Financial Debt2 $ 1,056.0 $ 1,015.2
Total Net Financial Debt to Adjusted EBITDA ratio3 3.5x 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 September 30, 2021, the Company’s Total Net Financial Debt was $1,056.0 million, an increase of $40.8 million compared to $1,015.2 million as of September 30, 2020. The Company’s Total Net Financial Debt to Adjusted EBITDA ratio was 3.5x and 3.7x as of September 30, 2021 and September 30, 2020, respectively.

Recent M&A Activity

In September 2021, BrightView acquired OnSite Facility Services, a full-service commercial landscaping, snow removal and facility services company that expands both the Company’s landscape portfolio and their snow and ice management services in a key Northeast market. OnSite has a skilled labor force of approximately 120 team members and is among the largest facility services providers in central New York.

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