NEW BRIGHTON, Minn.,
April 8, 2020 /PRNewswire/
-- APi Group Corporation (OTC:JJAQF; LSE:JTWO) ("APG" or the
"Company"), today reported its financial results for the three
months and year ended December 31,
2019.
The Company has classified two subsidiaries in its Industrial
Services segment as assets held-for-sale as of December 31, 2019. The results presented in this
announcement on an as adjusted basis include non-cash and other
specifically identified adjustments in addition to excluding the
impact of these two subsidiaries, which represent a combined
$290 million and $229 million of net revenues in 2019 and 2018,
respectively. In addition, all of the full year 2019 financial
results presented in this announcement combine the results of APi
Group, Inc. (the "Predecessor") for the period prior to the
October 1, 2019 closing of its
acquisition by the Company and the results of the Company following
such acquisition (the "Successor").
Fourth Quarter 2019 Highlights:
- Reported net revenues were $985
million, compared to $992
million in the prior year period
- Adjusted net revenues grew organically by 1.0% or $9.0 million to $926
million, compared to $917
million in the prior year period
- Reported gross margin was 20.1%, representing a 208 basis point
decline compared to prior year gross margin of 22.2%, primarily due
to an additional $22 million in cost
of revenues from the amortization of backlog intangible assets
recorded in purchase accounting
- Adjusted gross margin was 23.4%, compared to 23.3% for the same
period in 2018
- Reported operating loss was $138
million, a $151 million
decline from prior year operating income of $13 million, which was largely impacted by
transaction related and non-recurring expenses
- Adjusted EBITDA was $109 million
or 11.8%, a 97 basis point increase over prior year
- Reported net loss was $150
million, a $145 million
decline from prior year net loss of $5
million, which was largely impacted by transaction related
and non-recurring expenses and reported net loss was $0.89 per diluted share
- Adjusted net income was $61
million, representing a $11
million increase over prior year and adjusted diluted EPS of
$0.35, a $0.06 increase over prior year
Full Year 2019 Highlights:
- Combined net revenues were $4.1
billion (Predecessor $3.1
billion and Successor $985
million), an increase of $364
million or 9.8% over prior year
- Adjusted combined net revenues grew 8.7% or $303 million to $3.8
billion, compared to $3.5
billion in the prior year period with segment growth of 4.2%
in Safety Services, 9.9% in Specialty Services and 10.7% in
Industrial Services
- Adjusted combined net revenues grew organically by 7.7% or
$272 million to $3.8 billion, compared to $3.5 billion in the prior year period with
organic growth of 4.5% in Safety Services, 7.0% in Specialty
Services and 10.9% in Industrial Services
- Reported combined gross margin was 19.6%, representing a 151
basis point decline compared to prior year gross margin of 21.1%,
primarily due to an additional $22
million in cost of revenues from the amortization of backlog
intangible assets recorded in purchase accounting
- Adjusted combined gross margin was 21.5%, compared to 22.0% in
2018, driven primarily by a decline in the Industrial Services
segment
- Reported combined operating loss was $59
million, a $221 million
decline from prior year operating income of $162 million, which was largely impacted by
transaction related and non-recurring expenses
- Adjusted combined EBITDA was $393
million or 10.3%, a 51 basis point increase over prior
year
- Reported combined net loss was $67
million, a $203 million
decline from prior year net income of $136
million, which was largely impacted by transaction related
and non-recurring expenses, and reported net loss was $1.15 per share
- Adjusted combined net income of $212
million, representing a $29
million increase over prior year and adjusted combined
diluted EPS was $1.22, a $0.17 increase over prior year
Russ Becker, APi Group's
President and Chief Executive Officer said, "Our organic revenue
growth and increasing margin profile reflects the continued shift
in our business towards more profitable, recurring service
opportunities while maintaining a strong adjusted
EBITDA margin of 10.3%."
"Facing the worldwide shock wave of COVID-19 has brought out the
best in APi's culture and our leadership organization. I need and
want to thank each of our employees for their sacrifices. They have
put APi first. The safety, health and well-being of all our
employees remains paramount, and we will continue to be proactive
in taking measures that we expect to help protect our business and
all of our constituencies."
APi Co-Chairman James E. Lillie
added, "We continue to be encouraged by the long-term opportunities
that lie ahead for the business. Since joining forces with the APi
leadership team we have made progress as planned on all of the
short-term milestones and objectives for the Company. The financial
results for 2019 speak to the strength of APi's operating model and
the team's focus on driving higher margin growth as well as our
ability to generate cash and run the business with a strong balance
sheet. We believe we are prepared to seize opportunities as we move
through 2020 and continue to execute on our long-term goals for the
business."
Conference Call
APi Group will host a webcast/dial-in conference call to discuss
its 2019 financial results at 8:30 a.m.
(Eastern Time) on Wednesday, April 8, 2020. Participants on
the call will include Russ Becker,
President and Chief Executive Officer; Tom
Lydon, Chief Financial Officer; James E. Lillie and Sir Martin E. Franklin, Co-Chairmen.
To listen to the call by telephone, please dial 833-721-2905 or
929-517-9835 and provide Conference ID 2764874. You may also attend
and view the presentation (live or by replay) via webcast by
accessing the following URL:
https://event.on24.com/wcc/r/2253890/5C1738E2B85521CA6F22DD67A0557E64
A replay of the call will be available shortly after completion
of the live call on the webcast or by telephone, 855-859-2056 or
404-537-3406.
About APi
APi Group is a market-leading business services provider of life
safety, specialty and industrial services in over 200 locations,
primarily in North America. APi
Group provides statutorily mandated services to a strong base of
long-standing customers across industries. We have a winning
leadership culture driven by entrepreneurial business leaders to
deliver innovative solutions for our customers. More information
can be found at https://www.apigroupinc.com/.
Investor Relations Inquiries:
Olivia Walton
Vice President of Investor Relations
+1 814-312-3981
email: investorrelations@apigroupinc.us
Media Contact:
Liz Cohen
Kekst CNC
+1 212-521-4845
Liz.Cohen@kekstcnc.com
Forward-Looking Statements and Disclaimers
This
announcement does not constitute or form part of any offer or
invitation to purchase, otherwise acquire, issue, subscribe for,
sell or otherwise dispose of any securities, nor any solicitation
of any offer to purchase, otherwise acquire, issue, subscribe for,
sell, or otherwise dispose of any securities. The release,
publication or distribution of this announcement in certain
jurisdictions may be restricted by law and therefore persons in
such jurisdictions into which this announcement is released,
published or distributed should inform themselves about and observe
such restrictions.
Certain statements in this announcement are forward-looking
statements which are based on the Company's expectations,
intentions and projections regarding the Company's future
performance, anticipated events or trends and other matters that
are not historical facts, including expectations regarding: (i) the
ability of the Company to meet the eligibility criteria and effect
a registration under the Securities Act of its securities, a
listing of its securities on the New York Stock Exchange, its
domestication and the timing for such registration, listing and
domestication; (ii) the Company's positioning regarding its future
business plans and long-term goals; (iii) the Company's strategies
for each of its segments and the opportunities in the industries
the Company serves; (iv) the impact of the Company's planned
divestiture of two subsidiaries in its Industrial Services segment;
(v) certain expected 2020 financial results and (vi) the impacts of
the COVID-19 pandemic on the future operating and financial
performance of the Company, the Company's plans and strategies to
adapt and respond to the pandemic and the expected impact of those
plans and strategies. These statements are not guarantees of future
performance and are subject to known and unknown risks,
uncertainties and other factors that could cause actual results to
differ materially from those expressed or implied by such
forward-looking statements, including: (i) economic conditions,
competition and other risks that may affect the Company's future
performance, including the impacts of the COVID-19 pandemic on the
Company's business, markets, supply chain, customers and workforce,
on the credit and financial markets, and on the global economy
generally; (ii) the ability to recognize the anticipated benefits
of the acquisition and of the Company to take advantage of
strategic opportunities; (iii) the limited liquidity and trading of
the Company's securities; (iv) changes in applicable laws or
regulations; (v) the possibility that the Company may be adversely
affected by other economic, business, and/or competitive factors;
and (vi) other risks and uncertainties. Given these risks and
uncertainties, prospective investors are cautioned not to place
undue reliance on forward-looking statements. Forward-looking
statements speak only as of the date of such statements and, except
as required by applicable law, the Company does not undertake any
obligation to update or revise publicly any forward-looking
statements, whether as a result of new information, future events
or otherwise. Nothing in this announcement constitutes or should be
construed as constituting a profit forecast. This announcement
contains inside information as defined in article 7 of the Market
Abuse Regulation (EU) No 596/2014.
Non-GAAP Financial Measures
This press release
contains non-U.S. GAAP financial measures within the meaning of
Regulation G promulgated by the Securities and Exchange Commission
and includes a reconciliation of these non-U.S. GAAP financial
measures to the most directly comparable financial measures
calculated in accordance with GAAP. The Company uses certain
non-U.S. GAAP financial measures that are included in this press
release and the additional financial information both in explaining
its results to shareholders and the investment community and in its
internal evaluation and management of its businesses. The Company's
management believes that these non-U.S. GAAP financial measures and
the information they provide are useful to investors since these
measures (a) permit investors to view the company's performance
using the same tools that management uses to evaluate the Company's
past performance, reportable business segments and prospects for
future performance, (b) permit investors to compare the Company
with its peers and (c) determine certain elements of management's
incentive compensation. Specifically:
- The Company's management believes that "adjusted" net
revenues, "adjusted" gross margin, "adjusted" SG&A expense,
"adjusted" operating income (loss), "adjusted" earnings per share,
"adjusted" interest and "adjusted" tax rates, which exclude
business transformation and other expenses for the integration of
acquired businesses, the impact and results of two subsidiaries in
the Company's Industrial Services segment which the Company has
classified as assets held-for-sale as of December 31, 2019, and one-time and other events
such as impairment charges, share-based compensation, transaction
and other costs related to acquisitions, amortization of intangible
assets associated with acquisitions, and certain tax benefits from
the APi Acquisition, are useful because they provide investors with
a meaningful perspective on the current underlying performance of
the Company's core ongoing operations.
- The Company also presents changes in organic net revenues to
provide a more complete understanding of underlying revenue trends
by providing net revenues on a consistent basis as it excludes the
impacts of significant acquisitions, planned or completed
divestitures, and changes in foreign currency from year-over-year
comparisons.
- Earnings before interest, taxes, depreciation and
amortization ("EBITDA") is the measure of profitability used by
management to manage its segments and, accordingly, in its segment
reporting. The Company supplements the reporting of its
consolidated financial information with certain non-U.S. GAAP
financial measures, including EBITDA and adjusted EBITDA, which
defined as EBITDA excluding the impact of certain non-cash and
other specifically identified items ("Adjusted EBITDA"). The
Company believes these non-U.S. GAAP measures provide meaningful
information and help investors understand the Company's financial
results and assess its prospects for future performance. The
Company uses EBITDA and Adjusted EBITDA to evaluate its
performance, both internally and as compared with its peers,
because it excludes certain items that may not be indicative of the
Company's core operating results. Consolidated EBITDA is calculated
in a manner consistent with Segment EBITDA, which is a measure of
segment profitability.
- The Company presents free cash flow, adjusted free cash flow
and adjusted free cash flow conversion, which are liquidity
measures used by management as factors in determining the amount of
cash that is available for working capital needs or other uses of
cash, however, it does not represent residual cash flows available
for discretionary expenditures.
- The Company presents non-U.S. GAAP financial measures on a
combined basis to illustrate the impact of the combined Predecessor
and Successor periods as a result of the APi Acquisition. The
Company believes that these combined measures are useful in
understanding the overall operating performance of the combined
business during 2019 as compared to the performance in the prior
year period and provide a more complete picture of the Company's
results after factoring in its current debt and capitalization
structure.
While the Company believes these non-U.S. GAAP measures are
useful in evaluating the Company's performance, this information
should be considered as supplemental in nature and not as a
substitute for or superior to the related financial information
prepared in accordance with U.S. GAAP. Additionally, these
non-U.S. GAAP financial measures may differ from similar measures
presented by other companies. A reconciliation of these
Non-U.S. GAAP financial measures is included later in this press
release.
APi Group
Corporation Condensed Consolidated Statements of
Operations (GAAP) (Amounts in millions, except per share
data)
(Unaudited)
|
|
|
For the
three months ended December 31,
|
|
2019
|
|
2018
|
|
(Successor)
|
|
(Predecessor)
|
Net
revenues
|
$
|
985
|
|
$
|
992
|
Cost of
revenues
|
787
|
|
772
|
Gross
profit
|
198
|
|
220
|
Selling, general and
administrative expenses
|
336
|
|
207
|
Impairment of
goodwill, intangibles and long-lived assets
|
-
|
|
-
|
Operating income
(loss)
|
(138)
|
|
13
|
Interest expense,
net
|
16
|
|
8
|
Investment income and
other, net
|
(6)
|
|
4
|
Income (loss) before
income tax provision
|
(148)
|
|
1
|
Income tax
provision
|
2
|
|
6
|
Net loss
|
$
|
(150)
|
|
$
|
(5)
|
Loss per ordinary
share
|
|
|
|
Basic
|
$
|
(0.89)
|
|
NM
|
Weighted average
shares outstanding
|
|
|
|
Basic
|
169.4
|
|
NM
|
|
|
|
|
* NM -
NOT MEANINGFUL
|
|
|
|
APi Group
Corporation
Condensed
Consolidated Statements of Operations (GAAP)
(Amounts in millions,
except per share data)
(Unaudited)
|
|
|
For the year
ended December 31, 2019
|
|
For the year
ended December 31, 2018
|
|
|
Period
from
|
|
|
|
Year
ended
|
January 1,
2019 to
|
|
Year
ended
|
|
December 31,
2019
|
September
30, 2019
|
|
December 31,
2018
|
|
(Successor)
|
(Predecessor)
|
|
(Predecessor)
|
Net
revenues
|
$
|
985
|
$
|
3,107
|
|
$
|
3,728
|
Cost of
revenues
|
787
|
2,503
|
|
2,941
|
Gross
profit
|
198
|
604
|
|
787
|
Selling, general and
administrative expenses
|
359
|
490
|
|
625
|
Impairment of
goodwill, intangibles and long-lived assets
|
-
|
12
|
|
-
|
Operating income
(loss)
|
(161)
|
102
|
|
162
|
Investment income and
other, net
|
15
|
20
|
|
22
|
Other (income)
expense, net
|
(25)
|
(11)
|
|
(6)
|
Income (loss) before
income tax provision
|
(151)
|
93
|
|
146
|
Income tax
provision
|
2
|
7
|
|
10
|
Net income
(loss)
|
$
|
(153)
|
$
|
86
|
|
$
|
136
|
Loss per ordinary
share
|
|
|
|
|
Basic and
diluted
|
$
|
(1.15)
|
NM
|
|
NM
|
Weighted average
shares outstanding
|
|
|
|
|
Basic and
diluted
|
133.1
|
NM
|
|
NM
|
|
|
|
|
|
* NM -
NOT MEANINGFUL
|
|
|
|
|
APi Group
Corporation
Condensed
Consolidated Balance Sheets (GAAP)
(Amounts in
millions)
(Unaudited)
|
|
|
December 31,
2019
|
|
December 31,
2018
|
|
|
|
|
Assets
|
(Successor)
|
|
(Predecessor)
|
Current
assets:
|
|
|
|
Cash and cash
equivalents
|
$
|
256
|
|
$
|
54
|
Accounts receivable,
net
|
730
|
|
765
|
Inventories,
net
|
58
|
|
56
|
Contract
assets
|
245
|
|
240
|
Prepaid expenses and
other current assets
|
33
|
|
27
|
Assets held for
sale
|
20
|
|
-
|
Total current
assets
|
1,342
|
|
1,142
|
Property, plant and
equipment, net
|
402
|
|
328
|
Operating lease right
of use assets
|
105
|
|
-
|
Goodwill
|
980
|
|
320
|
Intangible assets,
net
|
1,121
|
|
204
|
Other
assets
|
61
|
|
47
|
Total
assets
|
$
|
4,011
|
|
$
|
2,041
|
Liabilities and
Shareholders' Equity
|
|
|
|
Current
liabilities:
|
|
|
|
Short-term debt and
current portion of long-term debt
|
$
|
19
|
|
$
|
295
|
Accounts
payable
|
156
|
|
174
|
Other accrued
liabilities
|
355
|
|
327
|
Deferred
consideration
|
73
|
|
-
|
Contract
liabilities
|
193
|
|
203
|
Operating and finance
leases
|
27
|
|
-
|
Total current
liabilities
|
823
|
|
999
|
Long-term debt, less
current portion
|
1,171
|
|
305
|
Deferred income
taxes
|
23
|
|
-
|
Operating and finance
leases
|
95
|
|
-
|
Other noncurrent
liabilities
|
142
|
|
104
|
Total
liabilities
|
2,254
|
|
1,408
|
Total shareholders'
equity
|
1,757
|
|
633
|
Total liabilities and
shareholders' equity
|
$
|
4,011
|
|
$
|
2,041
|
APi Group
Corporation
Condensed
Consolidated Statements of Cash Flows (GAAP)
(Amounts in
millions)
(Unaudited)
|
|
|
For the years
ended
|
|
|
Period
from
|
|
|
|
Year
ended
|
January 1,
2019 to
|
|
Year
ended
|
|
December 31,
2019
|
September
30, 2019
|
|
December 31,
2018
|
|
(Successor)
|
(Predecessor)
|
|
(Predecessor)
|
Cash flows from
operating activities:
|
|
|
|
|
Net income (loss) as
reported
|
$
|
(153)
|
$
|
86
|
|
$
|
136
|
Adjustments to
reconcile net income (loss) to net cash provided by operating
activities:
|
|
|
|
|
Depreciation and
amortization
|
69
|
78
|
|
109
|
Impairment of
goodwill, intangibles and long-lived assets
|
-
|
12
|
|
-
|
Deferred
taxes
|
(2)
|
1
|
|
-
|
Share-based
compensation expense
|
156
|
35
|
|
3
|
Other, net
|
(2)
|
-
|
|
(1)
|
Changes in operating
assets and liabilities, net of effects of business
acquisitions
|
82
|
(67)
|
|
(135)
|
Net cash provided
by operating activities
|
150
|
145
|
|
112
|
Cash flows from
investing activities:
|
|
|
|
|
Acquisitions, net of
cash acquired
|
(2,565)
|
(6)
|
|
(234)
|
Purchases of property
and equipment
|
(11)
|
(53)
|
|
(74)
|
Proceeds from sales
of property and equipment
|
5
|
7
|
|
5
|
Advances (payments)
on notes receivable, net
|
27
|
1
|
|
3
|
Proceeds of
marketable securities, net
|
816
|
-
|
|
-
|
Net cash used in
investing activities
|
(1,728)
|
(51)
|
|
(300)
|
Cash flows from
financing activities:
|
|
|
|
|
Proceeds from
issuance of long-term borrowings and revolving credit
line
|
1,214
|
76
|
|
315
|
Payments on long-term
borrowings
|
-
|
(17)
|
|
(12)
|
Deferred financing
costs paid
|
(24)
|
-
|
|
(1)
|
Payments of
acquisition-related contingent consideration
|
(2)
|
(16)
|
|
(25)
|
Proceeds from
issuance of ordinary shares and warrant exercise
|
210
|
-
|
|
-
|
Distributions
paid
|
-
|
(53)
|
|
(74)
|
Net cash provided
by (used in) financing activities
|
1,398
|
(10)
|
|
203
|
Effect of foreign
currency exchange rate change on cash and cash
equivalents
|
(1)
|
-
|
|
(2)
|
Net increase
(decrease) in cash and cash equivalents
|
(181)
|
84
|
|
13
|
Cash and cash
equivalents at beginning of period
|
437
|
54
|
|
41
|
Cash and cash
equivalents at end of period
|
$
|
256
|
$
|
138
|
|
$
|
54
|
APi Group
Corporation
Adjusted Condensed
Consolidated Statements of Operations (non-GAAP)
For the Three
Months Ended December 31, 2019 and 2018
(Amounts in
millions, except per share data)
(Unaudited)
|
|
|
For the
three months ended December 31, 2019
|
|
For the
three months ended December 31, 2018
|
|
AS
REPORTED
|
|
|
|
AS
ADJUSTED
|
|
AS
REPORTED
|
|
|
|
AS
ADJUSTED
|
|
Three months
ended
|
|
|
|
Three months
ended
|
|
Three months
ended
|
|
|
|
Three months
ended
|
|
December 31,
2019
|
Adjustments
|
|
|
December 31,
2019
|
|
December 31,
2018
|
Adjustments
|
|
|
December 31,
2018
|
|
(Successor)
|
|
|
|
(Successor)
|
|
(Predecessor)
|
|
|
|
(Predecessor)
|
Net
revenues
|
$
|
985
|
$
|
(59)
|
|
(a)
|
$
|
926
|
|
$
|
992
|
$
|
(75)
|
|
(a)
|
$
|
917
|
Cost of
revenues
|
787
|
(56)
|
|
(a)
|
709
|
|
772
|
(69)
|
|
(a)
|
703
|
|
|
(22)
|
|
(b)
|
|
|
|
|
|
|
|
Gross
profit
|
198
|
19
|
|
|
217
|
|
220
|
(6)
|
|
|
214
|
Selling, general and
administrative expenses
|
336
|
(5)
|
|
(a)
|
131
|
|
207
|
(6)
|
|
(a)
|
132
|
|
|
(29)
|
|
(b)
|
|
|
|
(11)
|
|
(b)
|
|
|
|
(156)
|
|
(c)
|
|
|
|
(58)
|
|
(d)
|
|
|
|
(15)
|
|
(d)
|
|
|
|
|
|
|
|
Operating income
(loss)
|
(138)
|
224
|
|
|
86
|
|
13
|
69
|
|
|
82
|
Interest expense,
net
|
16
|
-
|
|
|
16
|
|
8
|
8
|
|
(e)
|
16
|
Other (income)
expense, net
|
(6)
|
-
|
|
|
(6)
|
|
4
|
-
|
|
|
4
|
Income (loss) before
income tax provision
|
(148)
|
224
|
|
|
76
|
|
1
|
61
|
|
|
62
|
Income tax
provision
|
2
|
13
|
|
(f)
|
15
|
|
6
|
6
|
|
(f)
|
12
|
Net income
(loss)
|
$
|
(150)
|
$
|
211
|
|
|
$
|
61
|
|
$
|
(5)
|
$
|
55
|
|
|
$
|
50
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings (loss)
per share
|
|
|
|
|
|
|
|
|
|
|
|
Basic and
diluted
|
$
|
(0.89)
|
NM
|
|
|
$
|
0.35
|
|
NM
|
NM
|
|
|
$
|
0.29
|
Weighted average
shares outstanding
|
|
|
|
|
|
|
|
|
|
|
|
Basic and
diluted
|
169.4
|
4.5
|
|
(h)
|
173.9
|
|
NM
|
173.9
|
|
(i)
|
173.9
|
|
|
|
|
|
|
|
|
|
|
|
|
* NM -
NOT MEANINGFUL
|
|
|
|
|
|
|
|
|
|
|
|
Notes:
|
|
(a)
|
Adjustment to reflect
the elimination of amounts related to businesses classified as
held-for-sale as of December 31, 2019.
|
(b)
|
Adjustment to reflect
the addback of amortization expense related to intangibles
assets.
|
(c)
|
Adjustment to reflect
the elimination of non-cash, share-based compensation costs,
primarily including $155 million for the Founder Preferred Shares
dividend rights.
|
(d)
|
Adjustment to reflect
the elimination of the following non-recurring costs in 2019: $5
million of costs related to business process transformation and
public company registration, listing and compliance and $10 million
of potential and completed acquisition-related costs, and
elimination of the following non-recurring costs in 2018: $33
million of contingent consideration related to acquired businesses
and $25 million of charges and costs under prior ownership not
expected to continue or recur following the APi
Acquisition.
|
(e)
|
Adjustment to reflect
an increase in interest expense of $14 million related to the $1.2
billion of Term Loan at a rate of 4.29% issued in connection with
the APi Acquisition and $2 million related to amortization of debt
issuance costs and commitment fees, offset by elimination of $8
million of interest expense related to the Predecessor's Term Loan
and Revolving Credit Facility.
|
(f)
|
Adjustment to reflect
the tax effect of adjustments and a restatement of the Company's
tax expense to the Company's adjusted effective tax rate of 20%
(taking into consideration the approximately $350 million tax asset
acquired with the APi Acquisition and including the period from
January 1 through September 30, 2019 for both Successor and
Predecessor).
|
(g)
|
Not used.
|
(h)
|
Adjustment to reflect
the diluted weighted average shares outstanding following the APi
Acquisition and includes the dilutive impact associated with the
deemed conversion of Founder Preferred Shares and restricted stock
units.
|
(i)
|
Adjustment to reflect
the adjusted, diluted weighted average shares outstanding as if the
APi Acquisition had occurred on January 1, 2018. Excludes 64.5
million warrants outstanding, which are exercisable at a price of
$11.50 per share for a total of 21.5 million ordinary
shares.
|
APi Group
Corporation
Adjusted Condensed
Consolidated Statements of Operations (non-GAAP)
For the Year Ended
December 31, 2019
(Amounts in
millions, except per share data)
(Unaudited)
|
|
|
AS
REPORTED
|
AS
REPORTED
|
|
|
|
|
AS
ADJUSTED
|
|
|
Period
from
|
|
|
|
|
|
|
Year
ended
|
January 1,
2019 to
|
Year
ended
|
|
|
|
Year
Ended
|
|
December 31,
2019
|
September
30, 2019
|
December 31,
2019
|
Adjustments
|
|
|
December 31,
2019
|
|
(Successor)
|
(Predecessor)
|
(Combined)
|
|
|
|
(Combined)
|
Net
revenues
|
$
|
985
|
$
|
3,107
|
$
|
4,092
|
$
|
(290)
|
|
(a)
|
$
|
3,802
|
Cost of
revenues
|
787
|
2,503
|
3,290
|
(283)
|
|
(a)
|
3,007
|
|
|
|
|
(22)
|
|
(b)
|
(22)
|
Gross
profit
|
198
|
604
|
802
|
15
|
|
|
817
|
Selling, general and
administrative expenses
|
359
|
490
|
849
|
(33)
|
|
(a)
|
509
|
|
|
|
|
(54)
|
|
(b)
|
|
|
|
|
|
(193)
|
|
(c)
|
|
|
|
|
|
(60)
|
|
(d)
|
|
Impairment of
goodwill, intangibles and other assets
|
-
|
12
|
12
|
(12)
|
|
(e)
|
|
Operating income
(loss)
|
(161)
|
102
|
(59)
|
367
|
|
|
308
|
Interest expense,
net
|
15
|
20
|
35
|
24
|
|
(f)
|
59
|
Other (income)
expense, net
|
(25)
|
(11)
|
(36)
|
20
|
|
(g)
|
(16)
|
Income (loss) before
income tax provision
|
(151)
|
93
|
(58)
|
323
|
|
|
265
|
Income tax
provision
|
2
|
7
|
9
|
44
|
|
(h)
|
53
|
Net income
(loss)
|
$
|
(153)
|
$
|
86
|
$
|
(67)
|
$
|
279
|
|
|
$
|
212
|
Earnings (loss)
per share
|
|
|
|
|
|
|
|
Diluted
|
$
|
(1.15)
|
NM
|
$
|
(0.50)
|
NM
|
|
|
$
|
1.22
|
Weighted average
shares outstanding
|
|
|
|
|
|
|
|
Diluted
|
133.1
|
NM
|
133.1
|
40.5
|
|
(i)
|
173.6
|
|
|
|
|
|
|
|
|
* NM -
NOT MEANINGFUL
|
|
|
|
|
|
|
|
Notes:
|
|
(a)
|
Adjustment to reflect
the elimination of amounts related to businesses classified as
held-for-sale as of December 31, 2019.
|
(b)
|
Adjustment to reflect
the addback of amortization expense related to intangibles
assets.
|
(c)
|
Adjustment to reflect
the elimination of non-cash, share-based compensation costs,
primarily including $155 million for the Founder Preferred Shares
dividend rights in 2019 and equity-based compensation related to
prior ownership.
|
(d)
|
Adjustment to reflect
the elimination of the following non-recurring costs: $17 million
of costs related to business process transformation and public
company registration, listing and compliance, $18 million of
charges and costs under prior ownership not expected to continue or
recur following the APi Acquisition, and $25 million of potential
and completed acquisition-related costs.
|
(e)
|
Adjustment to reflect
the elimination of non-cash impairment charges related to goodwill
and intangibles attributable to one of the Predecessor's acquired
business during the period from January 1, 2019 to September 30,
2019.
|
(f)
|
Adjustment to reflect
an increase in interest expense of $38 million related to the $1.2
billion of Term Loan at a rate of 4.29% issued in connection with
the APi Acquisition and $5 million related to amortization of
debt issuance costs and commitment fees, offset by elimination of
$19 million of interest expense related to the Predecessor's Term
Loan and Revolving Credit Facility.
|
(g)
|
Adjustment to reflect
the elimination of APG investment income prior to the APi
Acquisition that is not expected to recur. Cash from these
investments was used to fund a portion of the cash consideration
for the APi Acquisition.
|
(h)
|
Adjustment to reflect
the tax effect of adjustments and a restatement of the Company's
tax expense to the Company's adjusted effective tax rate of 20%
(taking into consideration the approximately $350 million tax asset
acquired with the APi Acquisition and including the period from
January 1 through September 30, 2019 for both Successor and
Predecessor).
|
(i)
|
Adjustment to reflect
the inclusion of 4 million Founder Preferred Shares, convertible to
common on a 1:1 basis and the full year impact of 48.5 million
shares issued in connection with the APi Acquisition. Excludes 64.5
million warrants outstanding, which are exercisable at a price of
$11.50 per share for a total of 21.5 million ordinary
shares.
|
APi Group
Corporation
Adjusted Condensed
Consolidated Statements of Operations (non-GAAP)
For the Year Ended
December 31, 2018
(Amounts in
millions, except per share data)
(Unaudited)
|
|
|
|
For the year
ended December 31, 2018
|
|
AS
REPORTED
|
|
|
|
AS
ADJUSTED
|
|
Year
ended
|
|
|
|
Year
ended
|
|
December 31,
2018
|
Adjustments
|
|
|
December 31,
2018
|
|
(Predecessor)
|
|
|
|
(Predecessor)
|
Net
revenues
|
$
|
3,728
|
$
|
(229)
|
|
(a)
|
$
|
3,499
|
Cost of
revenues
|
2,941
|
(211)
|
|
(a)
|
2,730
|
Gross
profit
|
787
|
(18)
|
|
|
769
|
Selling, general and
administrative expenses
|
625
|
(15)
|
|
(a)
|
489
|
|
|
(47)
|
|
(b)
|
|
|
|
(74)
|
|
(d)
|
|
Operating income
(loss)
|
162
|
118
|
|
|
280
|
Interest expense,
net
|
22
|
35
|
|
(f)
|
57
|
Other (income)
expense, net
|
(6)
|
-
|
|
|
(6)
|
Income (loss) before
income tax provision
|
146
|
83
|
|
|
229
|
Income tax
provision
|
10
|
36
|
|
(h)
|
46
|
Net income
(loss)
|
$
|
136
|
$
|
47
|
|
|
$
|
183
|
Earnings (loss)
per share
|
|
|
|
|
|
Diluted
|
NM
|
NM
|
|
|
$
|
1.05
|
Weighted average
shares outstanding
|
|
|
|
|
|
Diluted
|
NM
|
173.6
|
|
(i)
|
173.6
|
|
|
|
|
|
|
* NM -
NOT MEANINGFUL
|
|
|
|
|
|
Notes:
|
|
(a)
|
Adjustment to reflect
the elimination of amounts related to businesses classified as
held-for-sale as of December 31, 2019.
|
(b)
|
Adjustment to reflect
the addback of amortization expense related to intangibles
assets.
|
(c)
|
Not used.
|
(d)
|
Adjustment to reflect
the elimination of the following non-recurring costs: $10 million
of costs related to non-recurring operational matters, $30 million
of charges and costs under prior ownership not expected to continue
or recur following the APi Acquisition, and $34 million of
potential and completed acquisition-related costs.
|
(e)
|
Not used.
|
(f)
|
Adjustment to reflect
an increase in interest expense of $51 million related to the $1.2
billion of Term Loan at a rate of 4.29% issued in connection with
the APi Acquisition and $6 million related to amortization of debt
issuance costs and commitment fees, offset by elimination of $22
million of interest expense related to the Predecessor's Term Loan
and Revolving Credit Facility.
|
(g)
|
Not used.
|
(h)
|
Adjustment to reflect
the tax effect of adjustments and a restatement of the Company's
tax expense to the Company's adjusted effective tax rate of 20%
(taking into consideration the approximately $350 million tax asset
acquired with the APi Acquisition and including the period from
January 1 through September 30, 2019 for both Successor and
Predecessor).
|
(i)
|
Adjustment to reflect
the adjusted, diluted weighted average shares outstanding as if the
APi Acquisition had occurred on January 1, 2018. Excludes 64.5
million warrants outstanding, which are exercisable at a price of
$11.50 per share for a total of 21.5 million ordinary
shares.
|
APi Group
Corporation
Reconciliations of
GAAP to Non-GAAP Financial Measures
EBITDA and
Adjusted EBITDA (non-GAAP)
(Amounts in
millions)
(Unaudited)
|
|
|
|
For the
three months ended
|
|
For the
years ended
|
|
|
|
|
|
|
|
Period
from
|
|
|
|
|
|
|
|
|
|
Year
ended
|
January 1,
2019 to
|
Year
ended
|
|
Year
ended
|
|
|
December 31,
2019
|
|
December 31,
2018
|
|
December 31,
2019
|
September
30, 2019
|
December 31,
2019
|
|
December 31,
2018
|
|
|
(Successor)
|
|
(Predecessor)
|
|
(Successor)
|
(Predecessor)
|
(Combined)
|
|
(Predecessor)
|
Net income (loss) as
reported
|
|
$
|
(150)
|
|
$
|
(5)
|
|
$
|
(153)
|
$
|
86
|
$
|
(67)
|
|
$
|
136
|
Adjustments to
reconcile to net income (loss)
|
|
|
|
|
|
|
|
|
|
|
Interest expense,
net
|
|
16
|
|
8
|
|
15
|
20
|
35
|
|
22
|
Income tax
provision
|
|
2
|
|
6
|
|
2
|
7
|
9
|
|
10
|
Depreciation and
amortization
|
|
69
|
|
33
|
|
69
|
78
|
147
|
|
109
|
EBITDA
|
|
$
|
(63)
|
|
$
|
42
|
|
$
|
(67)
|
$
|
191
|
$
|
124
|
|
$
|
277
|
Adjustments to
reconcile EBITDA to adjusted EBITDA:
|
|
|
|
|
|
|
|
|
|
|
Businesses classified
as held-for-sale
|
(a)
|
1
|
|
(1)
|
|
1
|
23
|
24
|
|
(7)
|
Impairment of
goodwill, intangibles and long-lived assets
|
(b)
|
-
|
|
-
|
|
-
|
12
|
12
|
|
-
|
Share-based
compensation costs
|
(c)
|
156
|
|
4
|
|
156
|
37
|
193
|
|
4
|
Potential and
completed acquisitions expenses
|
(d)
|
10
|
|
33
|
|
21
|
4
|
25
|
|
34
|
Expenses related to
prior ownership
|
(e)
|
-
|
|
21
|
|
-
|
18
|
18
|
|
36
|
Public company
registration, listing and compliance
|
(f)
|
5
|
|
-
|
|
17
|
-
|
17
|
|
-
|
Investment
income
|
(g)
|
-
|
|
-
|
|
(20)
|
-
|
(20)
|
|
-
|
Adjusted
EBITDA
|
|
$
|
109
|
|
$
|
99
|
|
$
|
108
|
$
|
285
|
$
|
393
|
|
$
|
344
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted net
revenues
|
|
$
|
926
|
|
$
|
917
|
|
|
|
$
|
3,802
|
|
$
|
3,499
|
Adjusted EBITDA as
a percentage of adjusted net revenues
|
11.8%
|
|
10.8%
|
|
|
|
10.3%
|
|
9.8%
|
Notes:
|
|
(a)
|
Adjustment to reflect
the elimination of amounts related to businesses classified as
held-for-sale as of December 31, 2019.
|
(b)
|
Adjustment to reflect
the elimination of non-cash impairment charges related to goodwill
and intangibles attributable to one of the Predecessor's acquired
business during the period from January 1, 2019 to September 30,
2019.
|
(c)
|
Adjustment to reflect
the elimination of non-cash, share-based compensation costs,
primarily including $155 million for the Founder Preferred Shares
dividend rights in 2019 and equity-based compensation related to
prior ownership.
|
(d)
|
Adjustment to reflect
the elimination of contingent consideration related to acquired
businesses, transaction expenses associated with the APi
Acquisition and other potential and completed acquisition-related
costs.
|
(e)
|
Adjustment to reflect
the elimination of charges and costs under prior ownership not
expected to continue or recur following the APi
Acquisition.
|
(f)
|
Adjustment to reflect
the elimination of costs relating to public company registration,
listing and compliance.
|
(g)
|
Adjustment to reflect
the elimination of APG investment income prior to the APi
Acquisition that is not expected to recur. Cash from these
investments was used to fund a portion of the cash consideration
for the APi Acquisition.
|
APi Group
Corporation
Adjusted Segment
Financial Information (non-GAAP)
(Amounts in
millions)
(Unaudited)
|
|
|
For the
three months ended
|
|
For the
years ended
|
|
AS
ADJUSTED
|
|
AS
ADJUSTED
|
|
AS
ADJUSTED
|
|
AS
ADJUSTED
|
|
December 31,
2019
|
|
December 31,
2018
|
|
December 31,
2019
|
|
December 31,
2018
|
|
|
|
|
|
|
|
|
Safety
Services
|
|
|
|
|
|
|
|
Adjusted net
revenues
|
$
|
435
|
|
$
|
435
|
|
$
|
1,777
|
|
$
|
1,705
|
Adjusted gross
profit
|
135
|
|
134
|
|
533
|
|
499
|
Adjusted
EBITDA
|
59
|
|
53
|
|
233
|
|
202
|
|
|
|
|
|
|
|
|
Adjusted gross
profit as a percentage of adjusted net revenues
|
31.0%
|
|
30.8%
|
|
30.0%
|
|
29.3%
|
Adjusted EBITDA as
a percentage of adjusted net revenues
|
13.6%
|
|
12.2%
|
|
13.1%
|
|
11.8%
|
|
|
|
|
|
|
|
|
Specialty
Services
|
|
|
|
|
|
|
|
Adjusted net
revenues
|
$
|
386
|
|
$
|
334
|
|
$
|
1,493
|
|
$
|
1,359
|
Adjusted gross
profit
|
70
|
|
61
|
|
238
|
|
219
|
Adjusted
EBITDA
|
50
|
|
38
|
|
174
|
|
146
|
|
|
|
|
|
|
|
|
Adjusted gross
profit as a percentage of adjusted net revenues
|
18.1%
|
|
18.3%
|
|
15.9%
|
|
16.1%
|
Adjusted EBITDA as
a percentage of adjusted net revenues
|
13.0%
|
|
11.4%
|
|
11.7%
|
|
10.7%
|
|
|
|
|
|
|
|
|
Industrial
Services (a)
|
|
|
|
|
|
|
|
Adjusted net
revenues
|
$
|
108
|
|
$
|
152
|
|
$
|
547
|
|
$
|
494
|
Adjusted gross
profit
|
12
|
|
19
|
|
46
|
|
51
|
Adjusted
EBITDA
|
12
|
|
15
|
|
36
|
|
38
|
|
|
|
|
|
|
|
|
Adjusted gross
profit as a percentage of adjusted net revenues
|
11.1%
|
|
12.5%
|
|
8.4%
|
|
10.3%
|
Adjusted EBITDA as
a percentage of adjusted net revenues
|
11.1%
|
|
9.9%
|
|
6.6%
|
|
7.7%
|
|
|
|
|
|
|
|
|
Corporate and
Eliminations
|
|
|
|
|
|
|
|
Adjusted net
revenues
|
$
|
(3)
|
|
$
|
(4)
|
|
$
|
(15)
|
|
$
|
(59)
|
Adjusted
EBITDA
|
(12)
|
|
(7)
|
|
(50)
|
|
(42)
|
|
|
|
|
|
|
|
|
Adjusted EBITDA as
a percentage of adjusted net revenues
|
NM
|
|
NM
|
|
NM
|
|
NM
|
|
|
|
|
|
|
|
|
Total Consolidated
(a)
|
|
|
|
|
|
|
|
Adjusted net
revenues
|
$
|
926
|
|
$
|
917
|
|
$
|
3,802
|
|
$
|
3,499
|
Adjusted gross
profit
|
217
|
|
214
|
|
817
|
|
769
|
Adjusted
EBITDA
|
109
|
|
99
|
|
393
|
|
344
|
|
|
|
|
|
|
|
|
Adjusted gross
profit as a percentage of adjusted net revenues
|
23.4%
|
|
23.3%
|
|
21.5%
|
|
22.0%
|
Adjusted EBITDA as
a percentage of adjusted net revenues
|
11.8%
|
|
10.8%
|
|
10.3%
|
|
9.8%
|
|
|
|
|
|
|
|
|
* NM -
NOT MEANINGFUL
|
|
|
|
|
|
|
|
Notes:
|
|
(a)
|
Adjusted financial
information reflects the elimination of amounts related to
businesses classified as held-for-sale as of December 31,
2019.
|
APi Group
Corporation
Adjusted Segment
Financial Information (non-GAAP)
Reconciliations of
GAAP to Non-GAAP Financial Measures
(Amounts in
millions)
(Unaudited)
|
|
|
|
For the
three months ended
|
|
For the
years ended
|
|
|
|
|
|
|
|
Period
from
|
|
|
|
|
|
|
|
|
|
Year
ended
|
January 1,
2019 to
|
Year
ended
|
|
Year
ended
|
|
|
December 31,
2019
|
|
December 31,
2018
|
|
December 31,
2019
|
September
30, 2019
|
December 31,
2019
|
|
December 31,
2018
|
|
|
(Successor)
|
|
(Predecessor)
|
|
(Successor)
|
(Predecessor)
|
(Combined)
|
|
(Predecessor)
|
Safety
Services
|
|
|
|
|
|
|
|
|
|
|
Safety Services
EBITDA
|
|
$
|
59
|
|
$
|
48
|
|
$
|
59
|
$
|
170
|
$
|
229
|
|
$
|
197
|
Adjustments to
reconcile EBITDA to adjusted EBITDA:
|
|
|
|
|
|
|
|
|
|
Share-based
compensation costs
|
(a)
|
-
|
|
-
|
|
-
|
2
|
2
|
|
-
|
Expenses related to
prior ownership
|
(b)
|
|
|
|
|
|
2
|
2
|
|
-
|
Potential and
completed acquisitions expenses
|
(d)
|
-
|
|
5
|
|
-
|
-
|
-
|
|
5
|
Safety Services
adjusted EBITDA
|
|
$
|
59
|
|
$
|
53
|
|
$
|
59
|
$
|
174
|
$
|
233
|
|
$
|
202
|
Specialty
Services
|
|
|
|
|
|
|
|
|
|
|
Specialty Services
EBITDA
|
|
$
|
50
|
|
$
|
18
|
|
$
|
50
|
$
|
111
|
$
|
161
|
|
$
|
125
|
Adjustments to
reconcile EBITDA to adjusted EBITDA:
|
|
|
|
|
|
|
|
|
|
Impairment of
goodwill, intangibles and long-lived assets
|
(c)
|
-
|
|
-
|
|
-
|
12
|
12
|
|
-
|
Potential and
completed acquisitions expenses
|
(d)
|
-
|
|
20
|
|
-
|
-
|
-
|
|
21
|
Expenses related to
prior ownership
|
(b)
|
-
|
|
-
|
|
-
|
1
|
1
|
|
-
|
Specialty Services
adjusted EBITDA
|
|
$
|
50
|
|
$
|
38
|
|
$
|
50
|
$
|
124
|
$
|
174
|
|
$
|
146
|
Industrial
Services
|
|
|
|
|
|
|
|
|
|
|
Industrial Services
EBITDA
|
|
$
|
9
|
|
$
|
8
|
|
$
|
9
|
$
|
21
|
$
|
30
|
|
$
|
37
|
Adjustments to
reconcile EBITDA to adjusted EBITDA:
|
|
|
|
|
|
|
|
|
|
Businesses classified
as held-for-sale
|
(e)
|
1
|
|
(1)
|
|
1
|
4
|
5
|
|
(7)
|
Potential and
completed acquisitions expenses
|
(d)
|
2
|
|
8
|
|
2
|
(1)
|
1
|
|
8
|
Industrial Services
adjusted EBITDA
|
|
$
|
12
|
|
$
|
15
|
|
$
|
12
|
$
|
24
|
$
|
36
|
|
$
|
38
|
Notes:
|
|
(a)
|
Adjustment to reflect
the elimination of non-cash, equity-based compensation related to
prior ownership.
|
(b)
|
Adjustment to reflect
the elimination of charges and costs under prior ownership not
expected to continue or recur following the APi
Acquisition.
|
(c)
|
Adjustment to reflect
the elimination of non-cash impairment charges related to goodwill
and intangibles attributable to one of the Predecessor's business
during the period from January 1, 2019 to September 30,
2019.
|
(d)
|
Adjustment to reflect
the elimination of potential and completed acquisition-related
costs.
|
(e)
|
Adjustment to reflect
the elimination of amounts related to businesses classified as
held-for-sale as of December 31, 2019.
|
APi Group
Corporation
Adjusted Segment
Financial Information (non-GAAP)
Reconciliations of
GAAP to Non-GAAP Financial Measures
(Amounts in
millions)
(Unaudited)
|
|
|
For the year
ended December 31, 2019
|
|
AS
REPORTED
|
AS
REPORTED
|
|
|
|
|
|
AS
ADJUSTED
|
|
Year
ended
|
January 1,
2019 to
|
Year
ended
|
|
|
|
|
Year
ended
|
|
December 31,
2019
|
September
30, 2019
|
December 31,
2019
|
|
Adjustments
|
|
|
December 31,
2019
|
Safety
Services
|
(Successor)
|
(Predecessor)
|
(Combined)
|
|
|
|
|
(Combined)
|
Net
revenues
|
$
435
|
$
1,342
|
$
1,777
|
|
$
-
|
|
|
$
1,777
|
Cost of
revenues
|
310
|
944
|
1,254
|
|
(10)
|
|
(a)
|
1,244
|
Gross
profit
|
$
125
|
$
398
|
$
523
|
|
$
10
|
|
|
$
533
|
Gross profit as a
percentage of net revenues
|
28.7%
|
29.7%
|
29.4%
|
|
|
|
|
30.0%
|
|
|
|
|
|
|
|
|
|
Specialty
Services
|
|
|
|
|
|
|
|
|
Net
revenues
|
$
386
|
$
1,107
|
$
1,493
|
|
$
-
|
|
|
$
1,493
|
Cost of
revenues
|
324
|
939
|
1,263
|
|
(8)
|
|
(a)
|
1,255
|
Gross
profit
|
$
62
|
$
168
|
$
230
|
|
$
8
|
|
|
$
238
|
Gross profit as a
percentage of net revenues
|
16.1%
|
15.2%
|
15.4%
|
|
|
|
|
15.9%
|
|
|
|
|
|
|
|
|
|
Industrial
Services
|
|
|
|
|
|
|
|
|
Net
revenues
|
$
167
|
$
670
|
$
837
|
|
$
(290)
|
|
(b)
|
$
547
|
Cost of
revenues
|
156
|
632
|
788
|
|
(283)
|
|
(b)
|
501
|
|
|
|
|
|
(4)
|
|
(a)
|
|
Gross
profit
|
$
11
|
$
38
|
$
49
|
|
$
(3)
|
|
|
$
46
|
Gross profit as a
percentage of net revenues
|
6.6%
|
5.7%
|
5.9%
|
|
|
|
|
8.4%
|
|
|
|
|
|
|
|
|
|
Corporate and
Eliminations
|
|
|
|
|
|
|
|
|
Net
revenues
|
$
(3)
|
$
(12)
|
$
(15)
|
|
$
-
|
|
|
$
(15)
|
Cost of
revenues
|
(3)
|
(12)
|
(15)
|
|
-
|
|
|
(15)
|
|
|
|
|
|
|
|
|
|
Total
Consolidated
|
|
|
|
|
|
|
|
|
Net
revenues
|
$
985
|
$
3,107
|
$
4,092
|
|
$
(290)
|
|
(b)
|
$
3,802
|
Cost of
revenues
|
787
|
2,503
|
3,290
|
|
(283)
|
|
(b)
|
2,985
|
|
|
|
|
|
(22)
|
|
(a)
|
|
Gross
profit
|
$
198
|
$
604
|
$
802
|
|
$
15
|
|
|
$
817
|
Gross profit as a
percentage of net revenues
|
20.1%
|
19.4%
|
19.6%
|
|
|
|
|
21.5%
|
Notes:
|
|
(a)
|
Adjustment to reflect
the addback of amortization expense related to the backlog
intangibles assets.
|
(b)
|
Adjustment to reflect
the elimination of amounts related to businesses classified as
held-for-sale as of December 31, 2019.
|
APi Group
Corporation
Adjusted Segment
Financial Information (non-GAAP)
Reconciliations of
GAAP to Non-GAAP Financial Measures
For the Year Ended
December 31, 2018
(Amounts in
millions)
(Unaudited)
|
|
|
For the year
ended December 31, 2018
|
|
AS
REPORTED
|
|
|
|
|
AS
ADJUSTED
|
|
Year
ended
|
|
|
|
|
Year
ended
|
|
December 31,
2018
|
|
Adjustments
|
|
|
December 31,
2018
|
Safety
Services
|
(Predecessor)
|
|
|
|
|
(Predecessor)
|
Net
revenues
|
$
1,705
|
|
-
|
|
|
$
1,705
|
Cost of
revenues
|
1,206
|
|
-
|
|
|
1,206
|
Gross
profit
|
$
499
|
|
-
|
|
|
$
499
|
Gross profit as a
percentage of net revenues
|
29.3%
|
|
|
|
|
29.3%
|
|
|
|
|
|
|
|
Specialty
Services
|
|
|
|
|
|
|
Net
revenues
|
$
1,359
|
|
-
|
|
|
$
1,359
|
Cost of
revenues
|
1,140
|
|
-
|
|
|
1,140
|
Gross
profit
|
$
219
|
|
-
|
|
|
$
219
|
Gross profit as a
percentage of net revenues
|
16.1%
|
|
|
|
|
16.1%
|
|
|
|
|
|
|
|
Industrial
Services
|
|
|
|
|
|
|
Net
revenues
|
$
723
|
|
(229)
|
|
(a)
|
$
494
|
Cost of
revenues
|
654
|
|
(211)
|
|
(a)
|
443
|
Gross
profit
|
$
69
|
|
(18)
|
|
|
$
51
|
Gross profit as a
percentage of net revenues
|
9.5%
|
|
|
|
|
10.3%
|
|
|
|
|
|
|
|
Corporate and
Eliminations
|
|
|
|
|
|
|
Net
revenues
|
$
(59)
|
|
-
|
|
|
$
(59)
|
Cost of
revenues
|
(59)
|
|
-
|
|
|
(59)
|
|
|
|
|
|
|
|
Total
Consolidated
|
|
|
|
|
|
|
Net
revenues
|
$
3,728
|
|
(229)
|
|
(a)
|
$
3,499
|
Cost of
revenues
|
2,941
|
|
(211)
|
|
(a)
|
2,730
|
Gross
profit
|
$
787
|
|
$
(18)
|
|
|
$
769
|
Gross profit as a
percentage of net revenues
|
21.1%
|
|
|
|
|
22.0%
|
Notes:
|
|
(a)
|
Adjustment to reflect
the elimination of amounts related to businesses classified as
held-for-sale as of December 31, 2019.
|
APi Group
Corporation
Adjusted Segment
Financial Information (non-GAAP)
Reconciliations of
GAAP to Non-GAAP Financial Measures
For the Three
Months Ended December 31, 2019 and 2018
(Amounts in
millions)
(Unaudited)
|
|
|
For the
three months ended December 31, 2019
|
|
For the
three months ended December 31, 2018
|
|
AS
REPORTED
|
|
|
|
AS
ADJUSTED
|
|
AS
REPORTED
|
|
|
|
AS
ADJUSTED
|
|
Three months
ended
|
|
|
|
Three months
ended
|
|
Three months
ended
|
|
|
|
Three months
ended
|
|
December 31,
2019
|
Adjustments
|
|
|
December 31,
2019
|
|
December 31,
2018
|
Adjustments
|
|
|
December 31,
2018
|
|
(Successor)
|
|
|
|
(Successor)
|
|
(Predecessor)
|
|
|
|
(Predecessor)
|
Safety
Services
|
|
|
|
|
|
|
|
|
|
|
|
Net
revenues
|
$
435
|
$
-
|
|
|
$
435
|
|
$
435
|
$
-
|
|
|
$
435
|
Cost of
revenues
|
310
|
(10)
|
|
(a)
|
300
|
|
301
|
-
|
|
|
301
|
Gross
profit
|
$
125
|
$
10
|
|
|
$
135
|
|
$
134
|
$
-
|
|
|
$
134
|
Gross profit as a
percentage of net revenues
|
28.7%
|
|
|
|
31.0%
|
|
30.8%
|
|
|
|
30.8%
|
|
|
|
|
|
|
|
|
|
|
|
|
Specialty
Services
|
|
|
|
|
|
|
|
|
|
|
|
Net
revenues
|
$
386
|
$
-
|
|
|
$
386
|
|
$
334
|
$
-
|
|
|
$
334
|
Cost of
revenues
|
324
|
(8)
|
|
(a)
|
316
|
|
273
|
-
|
|
|
273
|
Gross
profit
|
$
62
|
$
8
|
|
|
$
70
|
|
$
61
|
$
-
|
|
|
$
61
|
Gross profit as a
percentage of net revenues
|
16.1%
|
|
|
|
18.1%
|
|
18.3%
|
|
|
|
18.3%
|
|
|
|
|
|
|
|
|
|
|
|
|
Industrial
Services
|
|
|
|
|
|
|
|
|
|
|
|
Net
revenues
|
$
167
|
$
(59)
|
|
(b)
|
$
108
|
|
$
227
|
$
(75)
|
|
(b)
|
$
152
|
Cost of
revenues
|
156
|
(56)
|
|
(b)
|
96
|
|
202
|
(69)
|
|
(b)
|
133
|
|
|
(4)
|
|
(a)
|
|
|
-
|
-
|
|
|
-
|
Gross
profit
|
$
11
|
$
1
|
|
|
$
12
|
|
$
25
|
$
(6)
|
|
|
$
19
|
Gross profit as a
percentage of net revenues
|
6.6%
|
|
|
|
11.1%
|
|
11.0%
|
|
|
|
12.5%
|
|
|
|
|
|
|
|
|
|
|
|
|
Corporate and
Eliminations
|
|
|
|
|
|
|
|
|
|
|
|
Net
revenues
|
$
(3)
|
$
-
|
|
|
$
(3)
|
|
$
(4)
|
$
-
|
|
|
$
(4)
|
Cost of
revenues
|
(3)
|
-
|
|
|
(3)
|
|
(4)
|
-
|
|
|
(4)
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
Consolidated
|
|
|
|
|
|
|
|
|
|
|
|
Net
revenues
|
$
985
|
$
(59)
|
|
(b)
|
$
926
|
|
$
992
|
$
(75)
|
|
(b)
|
$
917
|
Cost of
revenues
|
787
|
(22)
|
|
(a)
|
709
|
|
772
|
(69)
|
|
(b)
|
703
|
|
|
(56)
|
|
(b)
|
|
|
|
|
|
|
|
Gross
profit
|
$
198
|
$
19
|
|
|
$
217
|
|
$
220
|
$
(6)
|
|
|
$
214
|
Gross profit as a
percentage of net revenues
|
20.1%
|
|
|
|
23.4%
|
|
22.2%
|
|
|
|
23.3%
|
Notes:
|
|
(a)
|
Adjustment to reflect
the addback of amortization expense related to the backlog
intangibles assets.
|
(b)
|
Adjustment to reflect
the elimination of amounts related to businesses classified as
held-for-sale as of December 31, 2019.
|
APi Group
Corporation
Reconciliations of
GAAP to Non-GAAP Financial Measures
EBITDA, Adjusted
EBITDA, Free Cash Flow and Adjusted Free Cash Flow and Conversion
(non-GAAP)
For the Year Ended
December 31, 2019
(Amounts in
millions)
(Unaudited)
|
|
|
|
For the year
ended December 31,
|
|
|
|
Period
from
|
|
|
|
Year
ended
|
January 1,
2019 to
|
Year
ended
|
|
|
December 31,
2019
|
September
30, 2019
|
December 31,
2019
|
|
|
(Successor)
|
(Predecessor)
|
(Combined)
|
Net cash provided by
operating activities (As Reported)
|
|
$
|
150
|
$
|
145
|
$
|
295
|
Less: Purchases of
property and equipment
|
|
(11)
|
(53)
|
(64)
|
Free cash
flow
|
|
$
|
139
|
$
|
92
|
$
|
231
|
Add: Cash payments
related to following items:
|
|
|
|
|
Potential and
completed acquisitions expenses
|
(a)
|
19
|
5
|
24
|
Expenses related to
prior ownership
|
(b)
|
-
|
18
|
18
|
Public company
registration, listing and compliance
|
(c)
|
17
|
-
|
17
|
Settlement of
Predecessor stock options
|
(d)
|
62
|
-
|
62
|
Adjusted free cash
flow
|
|
$
|
237
|
$
|
115
|
$
|
352
|
|
|
|
|
|
Adjusted
EBITDA
|
|
$
|
108
|
$
|
285
|
$
|
393
|
Adjusted free cash
flow conversion
|
|
|
|
90%
|
Notes:
|
|
(a)
|
Adjustment to reflect
the elimination of potential and completed acquisition-related
costs.
|
(b)
|
Adjustment to reflect
the elimination of charges and costs under prior ownership not
expected to continue or recur following the APi
Acquisition.
|
(c)
|
Adjustment to reflect
the elimination of costs relating to public company registration,
listing and compliance.
|
(d)
|
Adjustment to
eliminate the cash settlement of equity compensation paid by prior
ownership at the closing of the APi Acquisition.
|
APi Group
Corporation
Reconciliations of
GAAP to Non-GAAP Financial Measures
Organic Revenue
Growth (non-GAAP)
(Unaudited)
|
|
|
For the year
ended December 31, 2019
|
|
(Combined)
|
|
AS
REPORTED
|
Acquisitions
|
|
|
|
Net
revenue
|
and
planned
|
Foreign
currency
|
Organic
net
|
|
growth
|
divestitures, net
(a)
|
translation
(b)
|
revenue growth
(c)
|
Safety
Services
|
4.2%
|
0.0%
|
(0.3%)
|
4.5%
|
Specialty
Services
|
9.9%
|
2.9%
|
-
|
7.0%
|
Industrial
Services
|
15.8%
|
5.1%
|
(0.2%)
|
10.9%
|
Combined
consolidated
|
9.8%
|
2.2%
|
(0.1%)
|
7.7%
|
Notes:
|
|
(a)
|
Acquisitions include
pre-acquisition net revenues in their respective years of
acquisition. Planned divestitures exclude net revenues for
both 2019 and 2018 for the Company's businesses held for
sale.
|
(b)
|
Represents the effect
of foreign currency on 2019 reported net revenues, calculated as
the difference between the 2019 reported net revenues and the 2019
local currency net revenues converted at the prior year average
monthly exchange rates (excluding acquisitions and
divestitures).
|
(c)
|
Organic net revenue
growth provides a consistent basis for year-over-year comparisons
in net revenues as it excludes the impacts of acquisitions, planned
and completed divestitures, and the impact of changes due to
foreign currency translation.
|
View original
content:http://www.prnewswire.com/news-releases/api-group-reports-fourth-quarter-and-full-year-2019-financial-results-301037417.html
SOURCE APi Group Corporation