FirstService, Corp. (NASDAQ:FSV) Q3 2022 Earnings Conference Call October 26, 2022 11:00 AM ET

Company Participants

Scott Patterson - CEO

Jeremy Rakusin - CFO

Conference Call Participants

Michael Doumet - Scotiabank

Stephen MacLeod - BMO Capital

Faiza Alwy - Deutsche Bank

Daryl Young - TD Securities

Stephen Sheldon - William Blair

Frederic Bastien - Raymond James

Operator

Welcome to the Third Quarter Investors Conference Call. Today's call is being recorded. Legal counsel requires us to advise that the discussion scheduled to take place today may contain forward-looking statements that involve known and unknown risks and uncertainties. Actual results may be materially different from any future results, performance, or achievements contemplated in the forward-looking statements.

Additional information concerning factors that could cause actual results to materially differ from those in the forward-looking statements is contained in the company's annual information form as filed with the Canadian Securities Administrators and in the company's Annual Report on Form 40-F as filed with the U.S. Securities and Exchange Commission. As a reminder, today's call is being recorded. Today is October 26, 2022.

And I would like to turn the call over to Chief Executive Officer, Mr. Scott Patterson. Please go ahead, sir.

Scott Patterson

Thank you, Chris. Good morning everyone. Thank you for joining our third quarter conference call. I'm on the line today with our CFO, Jeremy Rakusin. Let me open by saying that we're pleased with the results for the quarter. We show continued strong organic growth, attribute to our teams and the quality of our service delivery. Our service excellence culture drives customer retention, repeat business and word-of-mouth referral and our high-single digit organic growth for the quarter and year-to-date is a reflection of that. Total revenues for the quarter up 13% over the prior year with organic revenue growth at 8%, just about evenly between our two divisions. EBITDA for the quarter was $95.5 million, a modest leap from 2021 reflecting a margin of 9.9% compared to an 11.1% in the prior year. Jeremy will walk you through the year-over-year margin variance.

At FirstService Residential, revenues were up 13% with organic growth over 8%. Organic growth was driven by solid year-over-year increases and amenity management and again this quarter by strong net new contract wins leading to higher management fee and labor related revenue. We achieved particularly robust growth in Florida and the Southeast where we have a very strong presence. Again this quarter, we estimate that price accounted for between 2% and 3% of the quarterly gain. Looking to the fourth quarter at FirstService Residential, we expect to show mid to high-single digit revenue growth all organic. Moving on to FirstService Brands, revenues for the quarter were also up by 13%, approximately half of which was organic. Our home improvement brands led by California Closets were again very strong this quarter with year-over-year growth of near 30%.