BrightView Reports Strong Third Quarter Fiscal 2018 Results and Record Revenues

BrightView Holdings, Inc. (NYSE: BV) (“BrightView” or the “Company”) today reported results for the third fiscal quarter ended June 30, 2018.

BrightView Chief Executive Officer, Andrew Masterman stated: “Our third quarter was another strong period for us. We successfully grew top-line revenue from the same period of 2017, recognizing $630.3 million in revenues which is the highest revenue generating quarter in our history, led by growth in our Maintenance Services segment. We generated Adjusted EBITDA of $97.8 million during the quarter and had a 15.5% Adjusted EBITDA Margin. We also continue to execute on our ‘strong-on-strong’ acquisition strategy, successfully acquiring two landscape service companies during the quarter enabling us to further expand our business. Since the quarter end we successfully completed our IPO, generating net proceeds of $501.2 million. We are excited to embark on this new chapter for the Company.”

Unless indicated otherwise, the information in this release has been adjusted to give effect to a 2.33839-for-one reverse stock split of the Company’s common stock effected on June 8, 2018.

Adjusted EBITDA, Adjusted EBITDA Margin, Adjusted Net Income, and Adjusted Free Cash Flow are not measures recognized under generally accepted accounting principles (“GAAP”). Please see “Non-GAAP Financial Measures” and “Reconciliation of GAAP to Non-GAAP Financial Measures” below for more information.

Third Fiscal Quarter Results

For the third quarter of fiscal 2018, the Company’s consolidated revenues increased 0.4% to $630.3 million compared to the same period in 2017 due to 2.9% revenue growth within the Maintenance Services segment primarily driven by incremental revenues from businesses acquired of $26.1 million. Revenues from the Development Services segment declined 5.7% compared to the same period last year due to winding down production on certain large projects that reached substantial completion during the quarter, coupled with the timing of commencing work on new projects.

On a GAAP basis, net loss was $1.4 million, compared to net income of $15.4 million for the third quarter of fiscal 2017, primarily driven by an increase in equity-based compensation costs incurred in connection with our IPO and other one-time IPO expenses.

Adjusted EBITDA for the third fiscal quarter was $97.8 million, compared to $98.5 million for the third quarter of fiscal 2017. Adjusted Net Income was $33.2 million, compared to $35.2 million in the 2017 period.

Net cash provided by operating activities for the nine months ended June 30, 2018 was $123.7 million, compared to $69.0 million for the same period last year. Adjusted Free Cash Flow for the nine months ended June 30, 2018 was $77.5 million, an increase in cash generation of $54.2 million over the same period last year. The increases are reflective of improvements in working capital management. For the nine months ended June 30, 2018, capital expenditures were $71.7 million, compared with $51.0 million last year, driven by the purchase of legacy ValleyCrest facilities for $21.6 million in October 2017.

Recent Developments

On July 2, 2018, the Company completed an IPO in which it issued and sold 24,495,000 shares of common stock at an offering price of $22.00 per share, which generated net proceeds of approximately $501.2 million after deducting underwriting discounts and commissions and other offering expenses.

Proceeds from the IPO were used exclusively to pay down debt, resulting in a total debt to Adjusted EBITDA leverage ratio post-IPO of 4.0x, compared with 5.7x pre-IPO.

Conference Call Information

A conference call to discuss the third fiscal quarter 2018 financial results is scheduled for August 9, 2018, at 10 a.m. Eastern Daylight Time. The U.S. toll free dial-in for the conference call is 866-393-4306 and the international dial-in is 734-385-2616. The conference passcode is 3147928. 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 telephone replay will be available shortly after the broadcast through Thursday, August 16, 2018, by dialing 800-585-8367 from the U.S., and entering conference passcode 3147928. A replay of the audio webcast also will be archived on the Company’s investor website.

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