GDI Integrated Facility Services Inc. (GDI.TO) Earnings Call Transcript & Summary

Thank you, Mr. Leclerc. Do we have a seconder?

Yes, my name is David Hinchey, and I'm a shareholder of the company. I second that KPMG LLP be appointed auditors of the company.

Thank you, Mr. Hinchey. To recap, it has been moved and seconded that KPMG LLP be appointed auditors of the company to hold office until the next Annual Meeting of Shareholders or until its successor is duly appointed and that the directors be authorized to fix the auditor's remuneration. I will ask Claude Bigras to confirm if those registered shareholders or duly appointed proxyholders present in person office voted in favor of the motion please signify by raising their hand. [Voting]

Mr. Chairman, I hereby confirm that all registered shareholders or duly appointed proxy holders present in person at our office voted in favor of the motion.

I would like to invite Claude Bigras, President and Chief Executive Officer, to provide an overview of the company's operations and financial performance for the 2020 fiscal year.

Thank you. Mr. Chairman. Good morning all. I would like to thank everyone for participating in GDI's Annual Meeting of Shareholders. There is no doubt that the year 2020 will be remembered worldwide for the COVID-19 pandemic. The entire world was significantly affected by the pandemic, and COVID had continues to have major implications for GDI business. After having experienced other viral threats such as SARS in 2002 or H1N1 in 2009, as one of the leading facility service provider in North America, GDI had their relatively accurate playbook to face another coronavirus event. We had a robust risk assessment plan that includes a variety of strategies for various potential pandemic environments, ready for immediate implementation to effectively continue our operations. While the scale of the COVID-19 pandemic was unexpected and unprecedented in modern-day society, our focus was set squarely on business continuity for our customers and the health and well-being of both their employees and our own workforce. With our team members and customer facilities trained, equipped, motivated and working to our high standards, we were able to offer customers a unique level of transparency and agility in responding to the pandemic. Thanks to our resilient management team and dedicated workforce, we persevered through the difficult year and have emerged in a strong financial position. I also believe that because GDI was extremely proactive throughout the pandemic, we further differentiated ourselves in the market and has emerged in an even stronger competitive position. We leveraged our depth in-house expertise and cleaning and disinfection to launch a number of initiatives designed to keep our client facilities safe and virus free. This included the launch of our innovative Clean for Health initiative, which combines GDI's expert-level knowledge of cleaning and disinfecting with a number of our -- of the essential facility service and related products offered by GDI business segments in order to provide a complete service solution to meet the new challenge of COVID-19. One particularly innovative part of Clean for Health our smartIAQ program created by our Ainsworth technical service group that combines building automation, UV filtration technology and digital occupancy management to purify the air in a building and minimize the risk of airborne transmission, creating a healthier indoor air environment. We were also very proactive within our industry associations. Several of our in-house experts participated in panel discussions and provided educational webinar for BOMA and the MSCA, helping to further strengthen GDI's position as an industry expert and industry leader. We were also one of the original members of the cleaning coalition of America, a group of the 6 largest cleaning contractors in the United States that was formed to champion the industry and advocate for the interest of contract cleaning services professional nationwide. GDI's value proposition resonates strongly with our key account customers. Facility and workplace services, including leading global cleaning and disinfecting solutions have become more important to customer strategic agendas. Long-term key accounts partnership are more likely to be built around comprehensive integrated facility service and a mutual aim to attain excellence through quality, efficiency and compliance. This approach resulted in greater value for everyone, our customers, our people, our investors and society at large. As we emerge from the worst of the COVID-19 pandemic crisis, technology will play an increasingly key role in our ability to service our customers. Our goal is to become the best tech-enabled facility service company in North America. We are investing in our digital capability and IT architecture, while accelerating the rollout of customer-facing tools. The impact of 2019 pandemic on GDI financial results in 2020 and in the first quarter of 2021 has been significant. Majority of our businesses are delivering improved underlying performance and executing on their strategic objectives. In our Janitorial segment, both in Canada and the U.S., including our Modern franchise group, we have seen continued profitable business growth in a favorable environment as our clients have been requiring significant level of enhanced recurring service and especially specialty one-time services. GDI Technical Services segment was our business that was the most impacted by COVID-19, principally due to a government-mandated shutdown in the market in both Québec and Ontario at the beginning of the pandemic. I'm happy to say that as 2021 begins, the business is performing well and is on track to make a full recovery. Thanks to proactive decision -- proactive and decisive management actions taken earlier in the crisis, our Ainsworth business has been able to navigate around the material decline of its business and emerge from the pandemic with a record backlog and a strong competitive position. Superior Solutions, our manufacturing and distribution business, has been extremely active and busy since the beginning of the pandemic, [indiscernible] personal protection equipment as well as mask and sanitizers across the world for GDI employees and customers. While GDI entered into the pandemic with a strong balance sheet and capital position because of the initial uncertainty surrounding the outcome of the pandemic, we took action early in the crisis to protect our financial position. Our team conducted a thorough analysis of all potential risk related to the pandemic across our businesses, and we took preventative actions to mitigate any negative margin impact of building shutdowns across our market. As a result of those actions and GDI's strong operational performance, GDI ended 2020 in our strongest financial position ever. Our long-term debt decreased by -- to $168.7 million at the end of last year. This decrease was significant given that 2020, we closed the acquisition of ESC Automation in Canada, GDI's largest acquisition to date. At the end of the first quarter of 2021, GDI's leverage ratio was below 1.5x. This position [Audio Gap] very well to accelerate our acquisition strategy by investing our capital into growing and strengthening our business, increasing our value proposition to clients and ultimately deliver -- delivering positive returns to shareholders. We made a large and highly strategic step in this direction with the acquisition of BPAC Group in January of 2021, which marks GDI's first large platform acquisition in the U.S. market. Together, BP and Ainsworth are now major building system and multi-trade facility provider in the Northeast U.S.A., and we are well positioned for further growth. We have already begun consolidating Ainsworth U.S. operations under the BP management team. And together with GDI large existing U.S. Janitorial Service platform, we will continue to make GDI a true one-stop shop for both today and tomorrow's buildings in Northeastern United States. We are encouraged by the solid performance we have seen in all of GDI businesses in 2020 and in the first quarter of this year. And we remain confident that the impact of COVID-19 pandemic will be manageable going forward. Thanks to our disciplined operational management, we are in a strong position to continue to support our clients and deploy capital in an effective manner. Our employees continue to work tirelessly in these challenging times, and we would like to thank all of them for their commitment. We also would like to thank you, our shareholders, for continuing to place your trust in us. Looking ahead, based on the information that we currently have in understanding the inherent uncertainty of the pandemic, as long as the virus remains a threat within our society, we expect that our enhanced service would be required by our clients to continue the fight against COVID-19 pandemic as we simultaneously also recenter our focus on our business plan to continue delivering long-term value to our shareholders. Thank you.

Thank you, Claude. As mentioned at the beginning of the meeting, we have now reached the open period for questions. At this point, we would be happy to answer any questions registered shareholders, duly appointed proxyholders and guests may have. We'll answer questions until the end of the meeting being 10 a.m. I ask that all persons who would like to take the floor clearly identify themselves by indicating their name, the entity they represent, if any, and confirm whether they are registered shareholder, a duly appointed proxyholder or a guest. As mentioned at the beginning of the meeting, questions from registered shareholders and duly appointed proxy holders will be answered first, and questions from guests will be answered if time allows. And we'll start with questions from registered shareholders and duly appointed proxyholders. [Operator Instructions]. Are there any -- any questions?

There are no questions at this time. [Operator Instructions]

Okay. Thank you. If there are no further -- no questions, we'll terminate the meeting. The formal items of business as set out in the notice of meeting have now been dealt with. As there is no further business to come before the meeting, I declare the meeting concluded. On behalf of the Board of Directors and everyone at GDI, I would like to take this opportunity to thank everyone for being here today. I would also like to thank all of our shareholders for their commitment and continued support. Most of all, I would like to thank our employees. The past 15 months have been challenging for everyone. It is in navigating troubling times that you really see the fabric and solidity of the company. And I can say that we are solid. Our employees are resilient. They are dedicated. They show up for work with the same will as before. It's incredible. And for that, I want to thank them. We are lucky to have each and every one of you. We look forward to seeing you again next year, hopefully, in person. Stay safe, everyone.

Ladies and gentlemen, this concludes your conference call for today. We thank you participating, and ask could you to please disconnect your lines.