EX-4.5


  Exhibit 4.5

 
  
  

 
  
  

 
  
  

FIRSTSERVICE CORPORATION
  

 
  
  

INTERIM CONSOLIDATED FINANCIAL STATEMENTS
  

 
  
  

 
  
  

 
  
  

Second Quarter
  
 June 30, 2020

 
  
  

 
  
  

 
  
 

  


Page
2
 of 14


  
 FIRSTSERVICE CORPORATION

CONSOLIDATED STATEMENTS OF EARNINGS (LOSS)
 (Unaudited)

(in thousands of US dollars, except per share amounts) - in accordance with accounting principles generally accepted in the United States of America
  

	 	 	Three months	 	Six months
	 	 	ended June 30	 	ended June 30
	 	 	 	2020	 	 	 	2019	 	 	 	2020	 	 	 	2019	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Revenues	 	$	621,597	 	 	$	573,908	 	 	$	1,255,428	 	 	$	1,059,563	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Cost of revenues	 	 	412,010	 	 	 	388,656	 	 	 	847,159	 	 	 	729,354	 
	Selling, general and administrative expenses	 	 	140,799	 	 	 	121,976	 	 	 	299,585	 	 	 	240,638	 
	Depreciation	 	 	12,624	 	 	 	9,266	 	 	 	24,770	 	 	 	17,646	 
	Amortization of intangible assets	 	 	10,864	 	 	 	4,899	 	 	 	22,225	 	 	 	9,206	 
	Settlement of long-term incentive arrangement	 	 	-	 	 	 	314,379	 	 	 	-	 	 	 	314,379	 
	Acquisition-related items	 	 	397	 	 	 	3,202	 	 	 	802	 	 	 	3,880	 
	Operating earnings (loss)	 	 	44,903	 	 	 	(268,470	)	 	 	60,887	 	 	 	(255,540	)
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Interest expense, net	 	 	5,530	 	 	 	4,772	 	 	 	14,417	 	 	 	8,341	 
	Other income, net (note 7)	 	 	(147	)	 	 	(6,131	)	 	 	(376	)	 	 	(6,124	)
	Earnings (loss) before income tax	 	 	39,520	 	 	 	(267,111	)	 	 	46,846	 	 	 	(257,757	)
	Income tax (note 8)	 	 	9,603	 	 	 	8,569	 	 	 	11,149	 	 	 	9,778	 
	Net earnings (loss)	 	 	29,917	 	 	 	(275,680	)	 	 	35,697	 	 	 	(267,535	)
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Non-controlling interest share of earnings (note 12)	 	 	3,326	 	 	 	2,409	 	 	 	5,081	 	 	 	4,205	 
	Non-controlling interest redemption increment (decrement) (note 12)	 	 	(531	)	 	 	947	 	 	 	(1,791	)	 	 	4,967	 
	Net earnings (loss) attributable to Company	 	$	27,122	 	 	$	(279,036	)	 	$	32,407	 	 	$	(276,707	)
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Net earnings (loss) per common share (note 13)	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Basic	 	$	0.64	 	 	$	(7.48	)	 	$	0.77	 	 	$	(7.69	)
	Diluted	 	$	0.64	 	 	$	(7.48	)	 	$	0.77	 	 	$	(7.69	)

  
 

The accompanying notes are an integral part of these financial statements.
  

 
  
 

  


Page
3
 of 14


  
 FIRSTSERVICE CORPORATION

CONSOLIDATED STATEMENTS OF COMPREHENSIVE EARNINGS (LOSS)
 (Unaudited)

(in thousands of US dollars) - in accordance with accounting principles generally accepted in the United States of America
  

	 	 	Three months	 	Six months
	 	 	ended June 30	 	ended June 30
	 	 	 	2020	 	 	 	2019	 	 	 	2020	 	 	 	2019	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Net earnings (loss)	 	$	29,917	 	 	$	(275,680	)	 	$	35,697	 	 	$	(267,535	)
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Foreign currency translation gain (loss)	 	 	3,115	 	 	 	1,078	 	 	 	(2,936	)	 	 	1,406	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Comprehensive earnings (loss)	 	 	33,032	 	 	 	(274,602	)	 	 	32,761	 	 	 	(266,129	)
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Less: Comprehensive earnings attributable to non-controlling interests	 	 	2,795	 	 	 	3,356	 	 	 	3,290	 	 	 	9,172	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Comprehensive earnings (loss) attributable to Company	 	$	30,237	 	 	$	(277,958	)	 	$	29,471	 	 	$	(275,301	)

  
 

The accompanying notes are an integral part of these financial statements. 
  

 
  
  
  

 
  
  
  

 
 

  


Page
4
 of 14


  
 FIRSTSERVICE CORPORATION

CONSOLIDATED BALANCE SHEETS
 (Unaudited)
 (in
thousands of US dollars) - in accordance with accounting principles generally accepted in the United States of America
  

	 	 	 	June 30,
 2020
	 	 	 	December 31,
 2019
	 
	Assets	 	 	 	 	 	 	 	 
	Current Assets	 	 	 	 	 	 	 	 
	Cash and cash equivalents	 	$	245,257	 	 	$	121,198	 
	Restricted cash	 	 	20,028	 	 	 	13,093	 
	Accounts receivable, net of allowance of $15,369 (December 31, 2019 - $13,136)	 	 	361,046	 	 	 	393,730	 
	Income tax recoverable	 	 	-	 	 	 	4,147	 
	Inventories	 	 	100,187	 	 	 	94,511	 
	Prepaid expenses and other current assets	 	 	38,010	 	 	 	41,457	 
	 	 	 	764,528	 	 	 	668,136	 
	 	 	 	 	 	 	 	 	 
	Other receivables	 	 	3,934	 	 	 	4,033	 
	Other assets	 	 	7,950	 	 	 	7,791	 
	Fixed assets	 	 	128,684	 	 	 	131,545	 
	Operating lease right-of-use assets (note 6)	 	 	139,580	 	 	 	132,893	 
	Intangible assets	 	 	344,545	 	 	 	366,224	 
	Goodwill	 	 	644,794	 	 	 	644,847	 
	 	 	 	1,269,487	 	 	 	1,287,333	 
	 	 	$	2,034,015	 	 	$	1,955,469	 
	 	 	 	 	 	 	 	 	 
	Liabilities and shareholders' equity	 	 	 	 	 	 	 	 
	Current Liabilities	 	 	 	 	 	 	 	 
	Accounts payable	 	$	79,501	 	 	$	76,226	 
	Accrued liabilities	 	 	171,014	 	 	 	165,444	 
	Income taxes payable	 	 	6,476	 	 	 	-	 
	Unearned revenues	 	 	90,082	 	 	 	74,100	 
	Operating lease liabilities - current (note 6)	 	 	33,045	 	 	 	30,622	 
	Long-term debt - current (note 9)	 	 	56,669	 	 	 	5,545	 
	Contingent acquisition consideration - current (note 11)	 	 	3,788	 	 	 	6,269	 
	 	 	 	440,575	 	 	 	358,206	 
	 	 	 	 	 	 	 	 	 
	Long-term debt - non-current (note 9)	 	 	588,525	 	 	 	761,078	 
	Operating lease liabilities - non-current (note 6)	 	 	117,024	 	 	 	111,247	 
	Contingent acquisition consideration (note 11)	 	 	6,478	 	 	 	8,154	 
	Unearned revenues	 	 	12,105	 	 	 	12,593	 
	Other liabilities	 	 	50,315	 	 	 	45,403	 
	Deferred income tax	 	 	54,063	 	 	 	58,239	 
	 	 	 	828,510	 	 	 	996,714	 
	Redeemable non-controlling interests (note 12)	 	 	162,613	 	 	 	174,662	 
	 	 	 	 	 	 	 	 	 
	Shareholders' equity	 	 	602,317	 	 	 	425,887	 
	 	 	$	2,034,015	 	 	$	1,955,469	 

  
 

The accompanying notes are an integral part of these financial statements. 
 

 
 

  


Page
5
 of 14


  
 FIRSTSERVICE CORPORATION

CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY
 (Unaudited)

(in thousands of US dollars, except share information)
  

	 	 	 	Common shares	 	 	 	 	 	 	 	 	 	 	 	Accumulated	 	 	 	 	 
	 	 	 	Issued and	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	other	 	 	 	 	 
	 	 	 	outstanding	 	 	 	 	 	 	 	Contributed	 	 	 	 	 	 	 	comprehensive	 	 	 	 	 
	 	 	 	shares	 	 	 	Amount	 	 	 	surplus	 	 	 	Deficit	 	 	 	loss	 	 	 	Total	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Balance, December 31, 2019	 	 	41,495,957	 	 	$	605,428	 	 	$	50,789	 	 	$	(229,874	)	 	$	(456	)	 	$	425,887	 
	Net earnings	 	 	-	 	 	 	-	 	 	 	-	 	 	 	5,285	 	 	 	-	 	 	 	5,285	 
	Other comprehensive earnings (loss)	 	 	-	 	 	 	-	 	 	 	-	 	 	 	-	 	 	 	(6,051	)	 	 	(6,051	)
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Impact of ASU 2016-13 (Topic 326)	 	 	-	 	 	 	-	 	 	 	-	 	 	 	(53	)	 	 	-	 	 	 	(53	)
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Common Shares:	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Stock option expense	 	 	-	 	 	 	-	 	 	 	3,969	 	 	 	-	 	 	 	-	 	 	 	3,969	 
	Stock options exercised	 	 	120,000	 	 	 	4,535	 	 	 	(924	)	 	 	-	 	 	 	-	 	 	 	3,611	 
	Dividends	 	 	-	 	 	 	-	 	 	 	-	 	 	 	(6,867	)	 	 	-	 	 	 	(6,867	)
	Balance, March 31, 2020	 	 	41,615,957	 	 	$	609,963	 	 	$	53,834	 	 	$	(231,509	)	 	$	(6,507	)	 	$	425,781	 
	Net earnings	 	 	-	 	 	 	-	 	 	 	-	 	 	 	27,122	 	 	 	-	 	 	 	27,122	 
	Other comprehensive earnings	 	 	-	 	 	 	-	 	 	 	-	 	 	 	-	 	 	 	3,115	 	 	 	3,115	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Common Shares:	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Stock option expense	 	 	-	 	 	 	-	 	 	 	2,443	 	 	 	-	 	 	 	-	 	 	 	2,443	 
	Stock options exercised	 	 	26,150	 	 	 	1,310	 	 	 	(295	)	 	 	-	 	 	 	-	 	 	 	1,015	 
	Dividends	 	 	-	 	 	 	-	 	 	 	-	 	 	 	(7,167	)	 	 	-	 	 	 	(7,167	)
	Issued (note 10)	 	 	1,797,359	 	 	 	150,008	 	 	 	-	 	 	 	-	 	 	 	-	 	 	 	150,008	 
	Balance, June 30, 2020	 	 	43,439,466	 	 	$	761,281	 	 	$	55,982	 	 	$	(211,554	)	 	$	(3,392	)	 	$	602,317	 

  
  

 
  
  
  

 
  
  
  

 
  
  
 

  


Page
6
 of 14


  
 FIRSTSERVICE CORPORATION

CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY (continued)
 (Unaudited)

(in thousands of US dollars, except share information)
  

	 	 	 	Common shares	 	 	 	 	 	 	 	 	 	 	 	Accumulated	 	 	 	 	 
	 	 	 	Issued and	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	other	 	 	 	 	 
	 	 	 	outstanding	 	 	 	 	 	 	 	Contributed	 	 	 	 	 	 	 	comprehensive	 	 	 	 	 
	 	 	 	shares	 	 	 	Amount	 	 	 	surplus	 	 	 	Deficit	 	 	 	loss	 	 	 	Total	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Balance, December 31, 2018	 	 	35,980,047	 	 	$	148,707	 	 	$	45,097	 	 	$	45,537	 	 	$	(3,115	)	 	$	236,226	 
	Net earnings	 	 	-	 	 	 	-	 	 	 	-	 	 	 	2,329	 	 	 	-	 	 	 	2,329	 
	Other comprehensive earnings	 	 	-	 	 	 	-	 	 	 	-	 	 	 	-	 	 	 	328	 	 	 	328	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Impact of ASC 842 - Leases	 	 	-	 	 	 	-	 	 	 	-	 	 	 	(338	)	 	 	-	 	 	 	(338	)
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Subsidiaries’ equity transactions	 	 	-	 	 	 	-	 	 	 	(19	)	 	 	-	 	 	 	-	 	 	 	(19	)
	Common Shares:	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Stock option expense	 	 	-	 	 	 	-	 	 	 	2,855	 	 	 	-	 	 	 	-	 	 	 	2,855	 
	Stock options exercised	 	 	134,650	 	 	 	5,342	 	 	 	(1,338	)	 	 	-	 	 	 	-	 	 	 	4,004	 
	Dividends	 	 	-	 	 	 	-	 	 	 	-	 	 	 	(5,418	)	 	 	-	 	 	 	(5,418	)
	Balance, March 31, 2019	 	 	36,114,697	 	 	$	154,049	 	 	$	46,595	 	 	$	42,110	 	 	$	(2,787	)	 	$	239,967	 
	Net earnings (loss)	 	 	-	 	 	 	-	 	 	 	-	 	 	 	(279,036	)	 	 	-	 	 	 	(279,036	)
	Other comprehensive earnings	 	 	-	 	 	 	-	 	 	 	-	 	 	 	-	 	 	 	1,078	 	 	 	1,078	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Impact of ASC 842 - Leases	 	 	-	 	 	 	-	 	 	 	-	 	 	 	(52	)	 	 	-	 	 	 	(52	)
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Subsidiaries’ equity transactions	 	 	-	 	 	 	-	 	 	 	39	 	 	 	-	 	 	 	-	 	 	 	39	 
	Common Shares:	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Stock option expense	 	 	-	 	 	 	-	 	 	 	1,755	 	 	 	-	 	 	 	-	 	 	 	1,755	 
	Stock options exercised	 	 	188,400	 	 	 	5,401	 	 	 	(959	)	 	 	-	 	 	 	-	 	 	 	4,442	 
	Dividends	 	 	-	 	 	 	-	 	 	 	-	 	 	 	(5,883	)	 	 	-	 	 	 	(5,883	)
	Issued	 	 	2,918,860	 	 	 	251,503	 	 	 	-	 	 	 	-	 	 	 	-	 	 	 	251,503	 
	Balance, June 30, 2019	 	 	39,221,957	 	 	$	410,953	 	 	$	47,430	 	 	$	(242,861	)	 	$	(1,709	)	 	$	213,813	 

  
  

 
  
  
  

 
  
  
  

  


Page
7
 of 14


  
 
 FIRSTSERVICE CORPORATION

CONSOLIDATED STATEMENTS OF CASH FLOWS
 (Unaudited)

(in thousands of US dollars) - in accordance with accounting principles generally accepted in the United States of America
  

	 	 	Three months ended	 	Six months ended
	 	 	June 30	 	June 30
	 	 	 	2020	 	 	 	2019	 	 	 	2020	 	 	 	2019	 
	Cash provided by (used in)	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Operating activities	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Net earnings (loss)	 	$	29,917	 	 	 	(275,680	)	 	$	35,697	 	 	$	(267,535	)
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Items not affecting cash:	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Depreciation and amortization	 	 	23,488	 	 	 	14,164	 	 	 	46,995	 	 	 	26,851	 
	Non-cash settlement of long-term incentive arrangement	 	 	-	 	 	 	289,721	 	 	 	-	 	 	 	289,721	 
	Deferred income tax	 	 	(2,149	)	 	 	992	 	 	 	(4,205	)	 	 	1,465	 
	Other	 	 	1,845	 	 	 	(4,192	)	 	 	5,669	 	 	 	(1,058	)
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Changes in non-cash working capital:	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Accounts receivable	 	 	11,911	 	 	 	(27,828	)	 	 	32,893	 	 	 	(19,228	)
	Inventories	 	 	(3,539	)	 	 	(2,496	)	 	 	(5,669	)	 	 	1,208	 
	Prepaid expenses and other current assets	 	 	3,595	 	 	 	1,045	 	 	 	2,876	 	 	 	806	 
	Payables and accruals	 	 	28,814	 	 	 	11,439	 	 	 	18,335	 	 	 	(4,922	)
	Unearned revenues	 	 	13,088	 	 	 	9,044	 	 	 	15,492	 	 	 	14,700	 
	Other liabilities	 	 	6,252	 	 	 	2,619	 	 	 	4,958	 	 	 	3,340	 
	Contingent acquisition consideration	 	 	-	 	 	 	-	 	 	 	-	 	 	 	(962	)
	Net cash provided by operating activities	 	 	113,222	 	 	 	18,828	 	 	 	153,041	 	 	 	44,386	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Investing activities	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Acquisitions of businesses, net of cash acquired (note 5)	 	 	-	 	 	 	(519,758	)	 	 	-	 	 	 	(545,531	)
	Disposal of business, net of cash disposed (note 7)	 	 	-	 	 	 	13,030	 	 	 	-	 	 	 	13,030	 
	Purchases of fixed assets	 	 	(6,733	)	 	 	(11,551	)	 	 	(22,081	)	 	 	(22,287	)
	Other investing activities	 	 	(603	)	 	 	3,188	 	 	 	(786	)	 	 	859	 
	Net cash used in investing activities	 	 	(7,336	)	 	 	(515,091	)	 	 	(22,867	)	 	 	(553,929	)
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Financing activities	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Increase in long-term debt	 	 	7,887	 	 	 	543,216	 	 	 	25,282	 	 	 	590,750	 
	Repayment of long-term debt	 	 	(112,959	)	 	 	-	 	 	 	(147,206	)	 	 	(1,871	)
	Proceeds received on common share issuance (note 10)	 	 	150,008	 	 	 	-	 	 	 	150,008	 	 	 	-	 
	Purchases of non-controlling interests, net	 	 	(11,316	)	 	 	(14,223	)	 	 	(15,067	)	 	 	(33,210	)
	Contingent acquisition consideration	 	 	(2,179	)	 	 	(2,182	)	 	 	(3,398	)	 	 	(8,035	)
	Proceeds received on exercise of options	 	 	1,015	 	 	 	4,442	 	 	 	4,626	 	 	 	8,446	 
	Financing fees paid	 	 	-	 	 	 	(3,428	)	 	 	-	 	 	 	(3,696	)
	Dividends paid to common shareholders	 	 	(6,867	)	 	 	(5,418	)	 	 	(13,091	)	 	 	(10,275	)
	Distributions paid to non-controlling interests	 	 	-	 	 	 	(3,075	)	 	 	(50	)	 	 	(4,269	)
	Net cash provided by financing activities	 	 	25,589	 	 	 	519,332	 	 	 	1,104	 	 	 	537,840	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Effect of exchange rate changes on cash, cash equivalents and restricted cash	 	 	626	 	 	 	(508	)	 	 	(284	)	 	 	(311	)
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Increase in cash, cash equivalents and restricted cash	 	 	132,101	 	 	 	22,561	 	 	 	130,994	 	 	 	27,986	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Cash, cash equivalents and restricted cash, beginning of period	 	 	133,184	 	 	 	85,269	 	 	 	134,291	 	 	 	79,844	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Cash, cash equivalents and restricted cash, end of period	 	$	265,285	 	 	 	107,830	 	 	$	265,285	 	 	$	107,830	 

  
 

The accompanying notes are an integral part of these financial statements.

 
  
 

  


Page
8
 of 14


 
  

FIRSTSERVICE CORPORATION
 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

June 30, 2020
 (Unaudited)
 (in thousands of US
dollars, except per share amounts)
  
  

1.       DESCRIPTION OF THE BUSINESS – FirstService Corporation (the “Company”) is a North American provider of residential property
management and other essential property services to residential and commercial customers. The Company’s operations are conducted in two segments: FirstService Residential and FirstService Brands. The segments are grouped with reference to the
nature of services provided and the types of clients that use those services.
  
 FirstService Residential is a
full-service property manager and in many markets provides a full range of ancillary services primarily in the following areas: on-site staffing, including building engineering and maintenance, full-service amenity management, security, concierge
and front desk personnel; proprietary banking and insurance products; and energy conservation and management solutions.
  

FirstService Brands provides a range of essential property services to residential and commercial customers in North America through franchise networks and company-owned locations. The
principal brands in this division include Paul Davis Restoration, Global Restoration, California Closets, Century Fire Protection, Certa Pro Painters, Pillar to Post Home Inspectors, and Floor Coverings International.

 
 2.       RISKS and UNCERTAINTIES – Currently, one of the most significant risks and
uncertainties is the potential adverse effect of the current pandemic of the novel coronavirus, or COVID-19. The COVID-19 pandemic in North America has had an impact on most of the Company’s operations, particularly its service lines tied to
home improvement. All of its businesses have been designated essential services in most of their geographic regions. The various “stay-at-home” and social distancing measures continue to impact the Company’s ability to operate on the
premises of its residential and commercial customers. Although many regions where the Company operates have re-opened, it is challenging to predict the financial performance in upcoming reporting periods with reasonable accuracy due to the lack of
visibility around the duration and severity of the crisis and its dynamic changes.
  
 Given the uncertainties
surrounding the impact of the COVID-19 pandemic, the Company took certain actions during the first and second quarters to preserve liquidity, manage cash flow and strengthen its financial flexibility. Such actions included, but were not limited to,
expense containment initiatives in areas including labour costs and other operating expenses, capital expenditures reductions, and management of its working capital requirements, as well as completing a private placement for $150,008 in the second
quarter of the current year. Refer to note 10 for more detail.
  
 3.       SUMMARY OF SIGNIFICANT
ACCOUNTING POLICIES – These condensed consolidated financial statements have been prepared by the Company in accordance with the disclosure requirements for the presentation of interim financial information pursuant to applicable Canadian
securities law. Certain information and footnote disclosures normally included in annual financial statements prepared in accordance with generally accepted accounting principles (“GAAP”) in the United States of America have been condensed
or omitted in accordance with such disclosure requirements, although the Company believes that the disclosures are adequate to make the information not misleading. These interim financial statements should be read in conjunction with the audited
consolidated financial statements for the year ended December 31, 2019.
  
 These interim financial
statements follow the same accounting policies as the most recent audited consolidated financial statements, with the exception of the change described below. In the opinion of management, the condensed consolidated financial statements contain all
adjustments necessary to present fairly the financial position of the Company as at June 30, 2020 and the results of operations and its cash flows for the three and six month periods ended June 30, 2020 and 2019. All such adjustments are of a
normal recurring nature. The results of operations for the three and six month periods ended June 30, 2020 are not necessarily indicative of the results to be expected for the year ending December 31, 2020.

 
 

  


Page
9
 of 14


 
  
 Credit Losses

 On January 1, 2020, the Company adopted ASU 2016-13, Measurement of Credit Losses on Financial Instruments (Topic 326), which replaces existing incurred loss impairment guidance
and establishes a single allowance framework for financial assets carried at amortized cost. The Company adopted Topic 326 using a modified retrospective approach, which requires a cumulative-effect adjustment, if any, to the opening balance of
retained earnings (deficit) to be recognized on the date of adoption with prior periods not restated. The cumulative-effect adjustment recorded on January 1, 2020 was not material.

 
 Accounting policy for Credit Losses
 Accounts
receivable: The allowance for doubtful accounts is based on the Company’s assessment of the collectability of customer accounts. The measurement of expected credit losses is based on relevant information about past events, including historical
experience, credit quality, the age of the accounts receivable balances, and current economic conditions that may impact a customer’s ability to pay.
  

A reconciliation of our allowance for doubtful accounts is found below: 
  

	(In thousands)	 	 	2020	 
	 	 	 	 	 
	Allowance for doubtful accounts, December 31, 2019	 	$	13,136	 
	Bad debt expense	 	 	5,295	 
	Write-offs to accounts receivable	 	 	(3,266	)
	Recoveries to accounts receivable	 	 	495	 
	Adjustment to opening retained earnings	 	 	53	 
	Other	 	 	(344	)
	Allowance for doubtful accounts, June 30, 2020	 	$	15,369	 

  

4.       REVENUE RECOGNITION STANDARD – Within the FirstService Brands segment, franchise fee revenue recognized during the six months ended
June 30, 2020 that was included in deferred revenue at the beginning of the period was $2,387 (2019 - $2,062). These fees are recognized over the life of the underlying franchise agreement, usually between 5 - 10 years.

 
 External broker costs and employee sales commissions in obtaining new franchisees are capitalized in accordance
with the new revenue standard and are amortized over the life of the underlying franchise agreement. Costs amortized during the six months ended June 30, 2020 were $1,047 (2019 - $934). The closing amount of the capitalized costs to obtain
contracts on the balance sheet as at June 30, 2020 was $5,981 (December 31, 2019 - $6,711). There were no impairment losses recognized related to those assets in the quarter.

 
 The Company’s backlog represents remaining performance obligations and is defined as contracted work yet to
be performed. As at June 30, 2020, the aggregate amount of backlog was $332,530. The Company expects to recognize revenue on the remaining backlog over the next 12 months.

 
 Disaggregated revenues are as follows:

 

	 	 	Three months	 	Six months
	 	 	ended June 30	 	ended June 30
	 	 	 	2020	 	 	 	2019	 	 	 	2020	 	 	 	2019	 
	Revenues	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	FirstService Residential	 	$	338,153	 	 	$	370,405	 	 	$	677,816	 	 	$	689,715	 
	FirstService Brands company-owned	 	 	252,261	 	 	 	162,862	 	 	 	516,361	 	 	 	298,563	 
	FirstService Brands franchisor	 	 	29,538	 	 	 	39,413	 	 	 	58,813	 	 	 	69,223	 
	FirstService Brands franchise fee	 	 	1,645	 	 	 	1,228	 	 	 	2,438	 	 	 	2,062	 

  
 The Company disaggregates revenue by segment, and within the
FirstService Brands segment, further disaggregates its company-owned operations revenue; these businesses primarily recognize revenue over time as they perform because of continuous transfer of control to the customer. As such, revenue is recognized
based on the extent of progress towards completion of the performance obligation. The Company generally uses the cost-to-cost measure of progress method. The extent of progress towards completion is measured based on the ratio of costs incurred to
date to the total estimated costs at completion of the performance obligation. Revenues, including estimated fees or profits, are recorded proportionally as costs are incurred.

 
 

  


Page
10
 of 14


  
 We believe this disaggregation best depicts how the nature, amount, timing and uncertainty
of the Company’s revenue and cash flows are affected by economic factors.
  

5.       ACQUISITIONS – During the six months ended June 30, 2020, the Company did not complete any acquisitions. In the prior year period, the
Company completed eleven acquisitions, including three in the FirstService Residential segment and eight in the FirstService Brands segment; the acquisition date fair value of consideration transferred was as follows: cash of $545,531, and
contingent consideration of $4,605.
  
 Certain vendors, at the time of acquisition, are entitled to receive a contingent
consideration payment if the acquired businesses achieve specified earnings levels during the one- to two-year periods following the dates of acquisition. The ultimate amount of payment is determined based on a formula, the key inputs to which are
(i) a contractually agreed maximum payment; (ii) a contractually specified revenue or earnings level; and (iii) the actual revenue or earnings for the contingency period. If the acquired business does not achieve the specified revenue or earnings
level, the maximum payment is reduced for any shortfall, potentially to nil.
  
 Contingent consideration is
recorded at fair value each reporting period. The fair value recorded on the consolidated balance sheet as at June 30, 2020 was $10,266 (see note 11). The estimated range of outcomes (undiscounted) for these contingent consideration arrangements is
$10,303 to a maximum of $12,121. The contingencies will expire during the period extending to September 2023. During the six months ended June 30, 2020, $3,398 was paid with reference to such contingent consideration (2019 - $8,997).

 
 6.       LEASES – The Company has operating leases for corporate offices, copiers, and
certain equipment. Its leases have remaining lease terms of 1 year to 10 years, some of which may include options to extend the leases for up to 8 years, and some of which may include options to terminate the leases within 1 year. The Company
evaluates renewal terms on a lease by lease basis to determine if the renewal is reasonably certain. The amount of operating lease expense recorded in the statement of earnings for the six months ended June 30, 2020 was $18,371 (2019 -
$14,635).
  
 Other information related to leases was as follows (in thousands, except lease term and discount
rate):
  

	Supplemental Cash Flows Information, six months ended June 30	 	 	2020	 
	 	 	 	 	 
	Cash paid for amounts included in the measurement of operating lease liabilities	 	$	18,151	 
	Right-of-use assets obtained in exchange for operating lease obligation	 	$	22,226	 

  
 7.      OTHER INCOME - Other
income is comprised of the following: 
  

	 	 	Three months ended	 	Six months ended
	 	 	June 30	 	June 30
	 	 	 	2020	 	 	 	2019	 	 	 	2020	 	 	 	2019	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Gain on disposal of business	 	$	-	 	 	$	(6,082	)	 	$	-	 	 	$	(6,082	)
	Other (income) expense	 	 	(147	)	 	 	(49	)	 	 	(376	)	 	 	(42	)
	 	 	$	(147	)	 	$	(6,131	)	 	$	(376	)	 	$	(6,124	)

  
 During the second quarter of the
prior year, the Company completed the divestiture of two non-core businesses. The Company sold its national accounts commercial painting operations for cash consideration of $3,386 and notes receivable of $2,800. The pre-tax gain on disposal was
$1,406. The Company also completed the sale of its Florida and Arizona-based landscaping operations for cash consideration of $9,644 (net of cash disposed of $600). The pre-tax gain on disposal was $4,676.

 
 

  


Page
11
 of 14


  
 8.       INCOME TAX – The provision for income tax for the six months
ended June 30, 2020 reflected an effective tax rate of 24% (2019 - negative 4%) relative to the statutory rate of approximately 27% (2019 - 27%). The difference between the effective rate and the statutory rate relates to the differential between
tax rates in certain jurisdictions, as well as taxable permanent differences.
  

9.       LONG-TERM DEBT – The Company has $150,000 of senior secured notes (the “Senior Notes”) bearing interest at a rate of 3.84%. The
Senior Notes are due on January 16, 2025, with five annual equal repayments beginning on January 16, 2021.
  

The Company has a Credit Agreement with a syndicate of lenders. The Credit Agreement is comprised of a committed multi-currency revolving credit facility of $450,000
(the “Facility”) and a term loan (drawn in a single advance) in the aggregate amount of $440,000 (the “Term Loan”). The Facility portion of the Credit Agreement has a term ending on January 17, 2023 and bears interest at 0.25% to
2.50% over floating preference rates, depending on certain leverage ratios. The Term Loan portion of the Credit Agreement has a term ending on June 21, 2024, with repayments of 5% per annum, paid quarterly, beginning in September 2020, with the
balance payable at maturity, and bears interest at 0.25% to 2.50% over floating preference rates, depending on certain leverage ratios. The Credit Agreement requires a commitment fee of 0.25% to 0.50% of the unused portion, depending on certain
leverage ratios. The Company may repay amounts owing under the Credit Agreement at any time without penalty. The Facility is available to fund working capital requirements (including acquisitions and any associated contingent purchase consideration)
and other general corporate purposes.
  
 The indebtedness under the Credit
Agreement and the Senior Notes rank equally in terms of seniority. The Company has granted the lenders under the Credit Agreement and the holders of the Senior Notes various security, including an interest in all of our assets. The Company is
prohibited under the Credit Agreement and the Senior Notes from undertaking certain acquisitions and dispositions, and incurring certain indebtedness and encumbrances, without prior approval of the lenders under the Credit Agreement and the holders
of the Senior Notes.
  
 10.       PRIVATE PLACEMENT – On May 22, 2020, the Company completed
the sale, on a private placement basis, of a total of 1,797,359 common shares of FirstService, at a price of US$83.46 per share, to Durable Capital Partners LP, for proceeds of $150,008. The net proceeds of the private placement were used to repay
existing indebtedness under the Facility.
  
 11.       FAIR VALUE MEASUREMENTS – The
following table provides the financial assets and liabilities carried at fair value measured on a recurring basis as of June 30, 2020:
  

	 	 	 	 	Fair value measurements at June 30, 2020
	 	 	 	 	 	 	 	 	 
	 	 	 	Carrying value at	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	June 30, 2020	 	 	 	Level 1	 	 	 	Level 2	 	 	 	Level 3	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Contingent consideration liability	 	$	10,266	 	 	$	-	 	 	$	-	 	 	$	10,266	 
	Interest rate swap liability	 	 	2,572	 	 	 	-	 	 	 	2,572	 	 	 	-	 

  
 

The Company has one interest rate swap in place to exchange the floating interest rate on $100,000 of debt under its Credit Agreement for a fixed rate. The fair value of the interest
rate swap liability was determined using widely accepted valuation techniques. The inputs to the measurement of the fair value of contingent consideration related to acquisitions are Level 3 inputs using a discounted cash flow model; significant
model inputs were expected future operating cash flows (determined with reference to each specific acquired business) and discount rates (which range from 8% to 10%). The range of discount rates is attributable to level of risk related to economic
growth factors combined with the length of the contingent payment periods; and the dispersion was driven by unique characteristics of the businesses acquired and the respective terms for these contingent payments. Within the range of discount rates,
there is a data point concentration at 9%. A 2% increase in the weighted average discount rate would not have a significant impact on the fair value of the contingent consideration balance.

 
 

  


Page
12
 of 14


  
 Changes in the fair value of the contingent consideration liability are comprised of the
following:
  

	 	 	 	2020	 
	 	 	 	 	 
	Balance, January 1	 	$	14,423	 
	Fair value adjustments	 	 	(1,723	)
	Resolved and settled in cash	 	 	(3,398	)
	Other	 	 	964	 
	Balance, June 30	 	$	10,266	 
	 	 	 	 	 
	Less: Current portion	 	 	3,788	 
	Non-current portion	 	$	6,478	 

  
 The
carrying amounts for cash and cash equivalents, restricted cash, accounts receivable, accounts payable and accrued liabilities approximate fair values due to the short maturity of these instruments, unless otherwise indicated. The inputs to the
measurement of the fair value of long term debt are Level 3 inputs. The fair value measurements were made using a net present value approach; significant model inputs were expected future cash outflows and discount rates (which range from 1.5% to
2.0%).
  

	 	 	June 30, 2020	 	December 31, 2019
	 	 	 	Carrying	 	 	 	Fair	 	 	 	Carrying	 	 	 	Fair	 
	 	 	 	amount	 	 	 	value	 	 	 	amount	 	 	 	value	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Other receivables	 	$	3,934	 	 	$	3,934	 	 	$	4,033	 	 	$	4,033	 
	Long-term debt	 	 	645,194	 	 	 	663,685	 	 	 	766,623	 	 	 	779,279	 

  
 12.       REDEEMABLE
NON-CONTROLLING INTERESTS – The minority equity positions in the Company’s subsidiaries are referred to as redeemable non-controlling interests (“RNCI”). The RNCI are considered to be redeemable securities. Accordingly, the RNCI
is recorded at the greater of: (i) the redemption amount; or (ii) the amount initially recorded as RNCI at the date of inception of the minority equity position. This amount is recorded in the “mezzanine” section of the balance sheet,
outside of shareholders’ equity. Changes in the RNCI amount are recognized immediately as they occur. The following table provides a reconciliation of the beginning and ending RNCI amounts:

 

	 	 	 	2020	 
	 	 	 	 	 
	Balance, January 1	 	$	174,662	 
	RNCI share of earnings	 	 	5,081	 
	RNCI redemption increment (decrement)	 	 	(1,791	)
	Distributions paid to RNCI	 	 	(50	)
	Purchases of interests from RNCI, net	 	 	(15,067	)
	Other	 	 	(222	)
	Balance, June 30	 	$	162,613	 

  
 The
Company has shareholders’ agreements in place at each of its non-wholly owned subsidiaries. These agreements allow the Company to “call” the non-controlling interest at a price determined with the use of a formula price, which is
usually equal to a fixed multiple of trailing two-year average earnings before income taxes, interest, depreciation, and amortization, less debt. The agreements also have redemption features which allow the owners of the RNCI to “put”
their equity to the Company at the same price subject to certain limitations. The formula price is referred to as the redemption amount and may be paid in cash or in the Company’s Common Shares. The redemption amount as of June 30, 2020 was
$159,160. The redemption amount is lower than that recorded on the balance sheet as the formula prices of certain RNCI are lower than the amount initially recorded at the inception of the minority equity position. If all put or call options were
settled with Common Shares as at June 30, 2020, approximately 1,600,000 such shares would be issued; this would be accretive to net earnings per common share.
  

Increases or decreases to the formula price of the underlying shares are recognized in the statement of earnings as the NCI redemption increment.

 
 

  


Page
13
 of 14


  
 13.       NET EARNINGS PER COMMON SHARE – Earnings
per share calculations cannot be anti-dilutive, therefore diluted shares are not used in the denominator when the numerator is in a loss position. The following table reconciles the basic and diluted common shares outstanding:

 

	 	 	Three months ended	 	Six months ended
	(in thousands)	 	June 30	 	June 30
	 	 	 	2020	 	 	 	2019	 	 	 	2020	 	 	 	2019	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Basic shares	 	 	42,397	 	 	 	37,284	 	 	 	41,977	 	 	 	36,002	 
	Assumed exercise of Company stock options	 	 	313	 	 	 	431	 	 	 	345	 	 	 	450	 
	Diluted shares	 	 	42,710	 	 	 	37,715	 	 	 	42,322	 	 	 	36,452	 

  

14.       STOCK-BASED COMPENSATION
  

Company stock option plan
 The Company has a stock option plan for certain directors, officers and full-time employees of the Company
and its subsidiaries, other than its Founder and Chairman. The stock option plan came into existence on June 1, 2015. Options are granted at the market price for the underlying shares on the date of grant. Each option vests over a four-year
term, expires five years from the date granted and allows for the purchase of one Common Share. All Common Shares issued are new shares. Grants under the Company’s stock option plan are equity-classified awards. As at June 30, 2020, there were
214,500 options available for future grants.
  
 Grants under the Company’s stock option plan are
equity-classified awards. There were no stock options granted during the three months ended June 30, 2020 (2019 - nil). Stock option activity for the six months ended June 30, 2020 was as follows:

 

	 	 	 	 	 	 	 	 	 	 	 	Weighted	 	 	 	 	 
	 	 	 	 	 	 	 	 	 	 	 	average	 	 	 	 	 
	 	 	 	 	 	 	 	Weighted	 	 	 	remaining	 	 	 		 
	 	 	 		 	 	 	average	 	 	 	contractual 	 	 	 	Aggregate	 
	 	 	 	Number of	 	 	 	exercise	 	 	 	life	 	 	 	intrinsic	 
	 	 	 	options	 	 	 	price	 	 	 	(years)	 	 	 	value	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Shares issuable under options -	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Beginning of period	 	 	1,639,100	 	 	$	60.26	 	 	 	 	 	 	 	 	 
	Granted	 	 	475,000	 	 	 	111.36	 	 	 	 	 	 	 	 	 
	Exercised	 	 	(146,150	)	 	 	33.98	 	 	 	 	 	 	 	 	 
	Shares issuable under options -	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	End of period	 	 	1,967,950	 	 	$	74.55	 	 	 	2.84	 	 	$	56,604	 
	Options exercisable - End of period	 	 	856,527	 	 	$	57.59	 	 	 	1.90	 	 	$	37,470	 

  
 The amount of compensation
expense recorded in the statement of earnings for the six months ended June 30, 2020 was $6,412 (2019 - $4,610). As of June 30, 2020, there was $16,588 of unrecognized compensation cost related to non-vested awards which is expected to be recognized
over the next 5 years. During the six month period ended June 30, 2020, the fair value of options vested was $6,837 (2019 - $4,591).
  

15.       CONTINGENCIES – In the normal course of operations, the Company is subject to routine claims and litigation incidental to its business.
Litigation currently pending or threatened against the Company includes disputes with former employees and commercial liability claims related to services provided by the Company. The Company believes resolution of such proceedings, combined with
amounts set aside, will not have a material impact on the Company’s financial condition or the results of operations.
  

16.       SEGMENTED INFORMATION – The Company has two reportable operating segments. The segments are grouped with reference to the nature of
services provided and the types of clients that use those services. The Company assesses each segment’s performance based on operating earnings or operating earnings before depreciation and amortization. FirstService Residential provides
property management and related property services to residential communities in North America. FirstService Brands provides franchised and company-owned essential property services to residential and commercial customers in North America. Corporate
includes the costs of operating the Company’s corporate head office.
  
 

  


Page
14
 of 14


  
 OPERATING SEGMENTS 
  

	 	 	 	FirstService	 	 	 	FirstService	 	 	 	 	 	 	 	 	 
	 	 	 	Residential	 	 	 	Brands	 	 	 	Corporate	 	 	 	Consolidated	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Three months ended June 30	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	2020	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Revenues	 	$	338,153	 	 	$	283,444	 	 	$	-	 	 	$	621,597	 
	Depreciation and amortization	 	 	7,260	 	 	 	16,208	 	 	 	20	 	 	 	23,488	 
	Operating earnings	 	 	31,980	 	 	 	17,364	 	 	 	(4,441	)	 	 	44,903	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	2019	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Revenues	 	$	370,405	 	 	$	203,503	 	 	$	-	 	 	$	573,908	 
	Depreciation and amortization	 	 	6,696	 	 	 	7,458	 	 	 	11	 	 	 	14,165	 
	Operating earnings	 	 	32,278	 	 	 	20,705	 	 	 	(321,453	)	 	 	(268,470	)

  

	 	 	 	FirstService	 	 	 	FirstService	 	 	 	 	 	 	 	 	 
	 	 	 	Residential	 	 	 	Brands	 	 	 	Corporate	 	 	 	Consolidated	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Six months ended June 30	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	2020	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Revenues	 	$	677,816	 	 	$	577,612	 	 	$	-	 	 	$	1,255,428	 
	Depreciation and amortization	 	 	13,136	 	 	 	33,811	 	 	 	48	 	 	 	46,995	 
	Operating earnings	 	 	49,404	 	 	 	22,271	 	 	 	(10,788	)	 	 	60,887	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	2019	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Revenues	 	$	689,715	 	 	$	369,848	 	 	$	-	 	 	$	1,059,563	 
	Depreciation and amortization	 	 	12,662	 	 	 	14,168	 	 	 	22	 	 	 	26,852	 
	Operating earnings	 	 	47,926	 	 	 	24,597	 	 	 	(328,063	)	 	 	(255,540	)

  
 GEOGRAPHIC INFORMATION 

 

	 	 	 	United States	 	 	 	Canada	 	 	 	Consolidated	 
	 	 	 	 	 	 	 	 	 	 	 	 	 
	Three months ended June 30	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 	 	 	 	 
	2020	 	 	 	 	 	 	 	 	 	 	 	 
	Revenues	 	$	546,191	 	 	$	75,406	 	 	$	621,597	 
	Total long-lived assets	 	 	987,499	 	 	 	270,104	 	 	 	1,257,603	 
	 	 	 	 	 	 	 	 	 	 	 	 	 
	2019	 	 	 	 	 	 	 	 	 	 	 	 
	Revenues	 	$	534,180	 	 	$	39,728	 	 	$	573,908	 
	Total long-lived assets	 	 	992,705	 	 	 	255,520	 	 	 	1,248,225	 

  

	 	 	 	United States	 	 	 	Canada	 	 	 	Consolidated	 
	 	 	 	 	 	 	 	 	 	 	 	 	 
	Six months ended June 30	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 	 	 	 	 
	2020	 	 	 	 	 	 	 	 	 	 	 	 
	Revenues	 	$	1,105,326	 	 	$	150,102	 	 	$	1,255,428	 
	 	 	 	 	 	 	 	 	 	 	 	 	 
	2019	 	 	 	 	 	 	 	 	 	 	 	 
	Revenues	 	$	989,478	 	 	$	70,085	 	 	$	1,059,563	 

 
  

17.       SUBSEQUENT EVENT – On July 2, 2020, the Company’s subsidiary, Global Restoration Holdings, acquired a controlling interest in Rolyn
Companies, Inc. (“Rolyn”), a leading commercial and large loss restoration services provider in the Mid-Atlantic region of the United States. Rolyn generates annual run-rate revenues of approximately $75,000.