FirstService (FSV) 6-K FirstService Reports Very Strong First Quarter Results

Exhibit 99.1

FirstService Reports Very Strong First Quarter Results

22% Revenue Increase and Significant Margin Expansion Drive Strong Profitability

Operating highlights:

	Three months
	ended March 31
	2017		2016
Revenues (millions)	$	376.0	$	307.6
Adjusted EBITDA (millions) (note 1)		20.7		12.7
Adjusted EPS (note 2)		0.17		0.08
GAAP Operating Earnings		9.5		4.3
GAAP EPS		0.13		(0.05	)

TORONTO, April 26, 2017 (GLOBE NEWSWIRE) -- FirstService Corporation (TSX:FSV) (NASDAQ:FSV) today reported very strong results for its first quarter ended March 31, 2017. All amounts are in US dollars.

Revenues for the first quarter were $376.0 million, up 22% relative to the same quarter in the prior year, Adjusted EBITDA (note 1) increased 63% to $20.7 million, and Adjusted EPS (note 2) was $0.17, compared to $0.08 in the prior year quarter. GAAP Operating Earnings were $9.5 million, relative to $4.3 million in the prior year period. GAAP diluted earnings per share was $0.13 per share in the quarter, versus a loss of $0.05 in the same quarter a year ago.

“We reported strong results for the first three months of the year, which is a seasonally light quarter for us in terms of revenues and cash flow,” said Scott Patterson, Chief Executive Officer of FirstService. “Strong organic and acquisition growth at FirstService Brands, together with continued operating margin improvement at FirstService Residential, drove significant increases in profitability during the quarter and establishes the foundation to meet our goals for the balance of 2017.”

About FirstService Corporation
FirstService Corporation is a North American leader in the essential outsourced property services sector, serving its customers through two industry-leading service platforms: FirstService Residential - North America’s largest manager of residential communities; and FirstService Brands - one of North America’s largest providers of essential property services delivered through individually branded franchise systems and company-owned operations.

FirstService generates more than US$1.5 billion in annual revenues and has approximately 17,000 employees across North America. With significant insider ownership and an experienced management team, FirstService has a long-term track record of creating value and superior returns for shareholders. The Subordinate Voting Shares of FirstService trade on the NASDAQ and the Toronto Stock Exchange under the symbol “FSV.”  More information is available at www.firstservice.com.

Segmented Quarterly Results
FirstService Residential revenues were $265.9 million for the first quarter, up 6% versus the prior year quarter. Organic growth for the quarter was 5%, with performance particularly strong in our New York and California markets. Adjusted EBITDA for the quarter was $14.4 million, up from $11.7 million in the prior year period. GAAP Operating earnings were $9.1 million, up 44% versus the prior year period. First quarter profitability was driven by continued margin expansion from ongoing operating efficiencies.

FirstService Brands revenues for the first quarter totalled $110.1 million, up 91% relative to the prior year period. The revenue increase was comprised of 10% organic growth, with the balance coming from recent acquisitions, including the larger Century Fire transaction and several additions to our company-owned platform. Organic growth was strong at Paul Davis Restoration, as well as California Closets, Pillar to Post and Floor Coverings International which continue to benefit from a strong U.S. home improvement market. Adjusted EBITDA was $8.9 million, a significant increase over the $3.2 million in the prior year quarter. GAAP Operating Earnings were $4.5 million, versus $1.4 million in the prior year quarter.

Corporate costs, as presented in Adjusted EBITDA were $2.6 million in the first quarter, relative to $2.2 million in the prior year period. On a GAAP basis, corporate costs for the quarter were $4.1 million, relative to $3.5 million in the prior year period.

Conference Call
FirstService will be holding a conference call on Wednesday, April 26, 2017 at 11:00 a.m. Eastern Time to discuss results for the first quarter of 2017. The call will be simultaneously web cast and can be accessed live or after the call at www.firstservice.com in the “Investors / Newsroom” section.

Forward-looking Statements
This press release includes or may include forward-looking statements. Forward-looking statements include the Company’s financial performance outlook and statements regarding goals, beliefs, strategies, objectives, plans or current expectations. These statements involve known and unknown risks, uncertainties and other factors which may cause the actual results to be materially different from any future results, performance or achievements contemplated in the forward-looking statements. Such factors include: (i) general economic and business conditions, which will, among other things, impact demand for the Company’s services and the cost of providing services; (ii) the ability of the Company to implement its business strategy, including the Company’s ability to acquire suitable acquisition candidates on acceptable terms and successfully integrate newly acquired businesses with its existing businesses; (iii) changes in or the failure to comply with government regulations; and (iv) other factors which are described in the Company’s filings with applicable Canadian and United States securities regulatory authorities (which factors are adopted herein).

Summary financial information is provided in this press release. This press release should be read in conjunction with the Company's quarterly financial statements and MD&A to be made available on SEDAR at www.sedar.com.

Notes
1. Reconciliation of net earnings (loss) to Adjusted EBITDA:

Adjusted EBITDA is defined as net earnings, adjusted to exclude: (i) income tax; (ii) other (income) expense; (iii) interest expense; (iv) depreciation and amortization; (v) acquisition-related items; and (vi) stock-based compensation expense. The Company uses adjusted EBITDA to evaluate its own operating performance, its ability to service debt, and as an integral part of its planning and reporting systems. Additionally, this measure is used in conjunction with discounted cash flow models to determine the Company’s overall enterprise valuation and to evaluate acquisition targets. Adjusted EBITDA is presented as a supplemental measure because the Company believes such a measure is useful to investors as a reasonable indicator of operating performance, due to the low capital intensity of the Company’s service operations. The Company believes this measure is a financial metric used by many investors to compare companies, especially in the services industry. This measure is not a recognized measure of financial performance under GAAP in the United States, and should not be considered as a substitute for operating earnings, net earnings or cash flow from operating activities, as determined in accordance with GAAP. The Company’s method of calculating adjusted EBITDA may differ from other issuers and accordingly, this measure may not be comparable to measures used by other issuers. A reconciliation of net earnings (loss) to adjusted EBITDA appears below.

	Three months ended
(in thousands of US dollars)	March 31
	2017			2016
Net earnings (loss)	$	8,620		$	1,517
Income tax		(1,302	)		850
Other (income) expense		(95	)		(75	)
Interest expense, net		2,325			1,969
Operating earnings		9,548			4,261
Depreciation and amortization		9,495			7,414
Acquisition-related items		246			71
Stock-based compensation expense		1,415			970
Adjusted EBITDA	$	20,704		$	12,716

2. Reconciliation of net earnings and net earnings per share to adjusted net earnings and adjusted EPS:

Adjusted EPS is defined as diluted net earnings per share, adjusted for the effect, after income tax, of: (i) the non-controlling interest redemption increment; (ii) acquisition-related items; (iii) amortization expense related to intangible assets recognized in connection with acquisitions; (iv) stock-based compensation expense; and (v) a stock-based compensation tax adjustment related to a US GAAP change. The Company believes this measure is useful to investors because it provides a supplemental way to understand the underlying operating performance of the Company and enhances the comparability of operating results from period to period. Adjusted EPS is not a recognized measure of financial performance under GAAP, and should not be considered as a substitute for diluted net earnings per share, as determined in accordance with GAAP. The Company’s method of calculating this non-GAAP measure may differ from other issuers and, accordingly, this measure may not be comparable to measures used by other issuers. A reconciliation of net earnings to adjusted net earnings and of diluted net earnings per share to adjusted EPS appears below.

	Three months ended
(in thousands of US dollars)	March 31
	2017			2016
Net earnings	$	8,620		$	1,517
Non-controlling interest share of earnings		(1,829	)		(808	)
Acquisition-related items		246			71
Amortization of intangible assets		3,186			2,392
Stock-based compensation expense		1,415			970
Stock-based compensation tax adjustment for US GAAP change		(3,743	)		-
Income tax on adjustments		(1,770	)		(1,296	)
Non-controlling interest on adjustments		(71	)		(33	)
Adjusted net earnings	$	6,054		$	2,813
	Three months ended
(in US dollars)	March 31
	2017			2016
Diluted net earnings (loss) per share	$	0.13		$	(0.05	)
Non-controlling interest redemption increment		0.06			0.07
Acquisition-related items		0.01			-
Amortization of intangible assets, net of tax		0.05			0.04
Stock-based compensation expense, net of tax		0.02			0.02
Stock-based compensation tax adjustment for US GAAP change		(0.10	)		-
Adjusted EPS	$	0.17		$	0.08

FIRSTSERVICE CORPORATION
Operating Results
(in thousands of US dollars, except per share amounts)
				Three months
				ended March 31
(unaudited)				2017			2016
Revenues			$	375,969		$	307,586
Cost of revenues				272,412			222,506
Selling, general and administrative expenses				84,268			73,334
Depreciation				6,309			5,022
Amortization of intangible assets				3,186			2,392
Acquisition-related items (1)				246			71
Operating earnings				9,548			4,261
Interest expense, net				2,325			1,969
Other (income) expense				(95	)		(75	)
Earnings before income tax				7,318			2,367
Income tax				(1,302	)		850
Net earnings				8,620			1,517
Non-controlling interest share of earnings				1,829			808
Non-controlling interest redemption increment				2,147			2,366
Net earnings (loss) attributable to Company				4,644			(1,657	)
Net earnings (loss) per share
	Basic		$	0.13		$	(0.05	)
	Diluted			0.13			(0.05	)
Adjusted EPS (2)			$	0.17		$	0.08
Weighted average common shares (thousands)
		Basic		35,880			35,991
		Diluted		36,561			36,368
(1) Acquisition-related items include contingent acquisition consideration fair value adjustments, and transaction costs.
(2) See definition and reconciliation above.

Condensed Consolidated Balance Sheets
(in thousands of US dollars)
(unaudited)		March 31, 2017		December 31, 2016
Assets
Cash and cash equivalents		$	45,675	$	43,384
Restricted cash			14,587		13,450
Accounts receivable			159,985		164,074
Prepaid and other current assets			69,996		58,146
Deferred income tax			-		24,738
	Current assets		290,243		303,792
Other non-current assets			5,171		5,115
Fixed assets			77,107		73,083
Deferred income tax			477		1,693
Goodwill and intangible assets			400,747		387,281
	Total assets	$	773,745	$	770,964
Liabilities and shareholders' equity
Accounts payable and accrued liabilities		$	136,246	$	142,966
Other current liabilities			38,365		38,813
Long-term debt - current			1,312		1,043
	Current liabilities		175,923		182,822
Long-term debt - non-current			283,950		249,866
Other liabilities			27,226		23,729
Deferred income tax			7,551		31,167
Non-controlling interests			100,692		102,352
Shareholders' equity			178,403		181,028
	Total liabilities and equity	$	773,745	$	770,964
Supplemental balance sheet information
Total debt		$	285,262	$	250,909
Total debt, net of cash			239,587		207,525

Condensed Consolidated Statements of Cash Flows
(in thousands of US dollars)
			Three months ended
			March 31
(unaudited)			2017			2016
Cash provided by (used in)
Operating activities
Net earnings		$	8,620		$	1,517
Items not affecting cash:
	Depreciation and amortization		9,494			7,414
	Deferred income tax		(3,817	)		(536	)
	Other		1,670			(94	)
			15,967			8,301
Changes in non cash working capital
	Accounts receivable		4,090			(3,389	)
	Payables and accruals		(16,778	)		(3,427	)
	Other		4,325			353
Net cash provided by operating activities			7,604			1,838
Investing activities
Acquisition of businesses, net of cash acquired			(10,363	)		(5,038	)
Purchases of fixed assets			(9,968	)		(6,900	)
Other investing activities			(4,318	)		(4,581	)
Net cash used in investing activities			(24,649	)		(16,519	)
Financing activities
Increase in long-term debt, net			34,353			10,076
Sale (purchases) of non-controlling interests, net			(3,780	)		246
Dividends paid to common shareholders			(3,943	)		(3,461	)
Other financing activities			(7,317	)		(789	)
Net cash provided by financing activities			19,313			6,072
Effect of exchange rate changes on cash			23			124
Increase (decrease) in cash and cash equivalents			2,291			(8,485	)
Cash and cash equivalents, beginning of period			43,384			45,560
Cash and cash equivalents, end of period		$	45,675		$	37,075

Segmented Results
(in thousands of US dollars)
		FirstService		FirstService
(unaudited)		Residential		Brands		Corporate			Consolidated
Three months ended March 31
2017
	Revenues	$	265,853	$	110,116	$	-		$	375,969
	Adjusted EBITDA		14,433		8,876		(2,605	)		20,704
	Operating earnings		9,127		4,474		(4,053	)		9,548
2016
	Revenues	$	249,806	$	57,780	$	-		$	307,586
	Adjusted EBITDA		11,738		3,195		(2,217	)		12,716
	Operating earnings		6,357		1,391		(3,487	)		4,261

COMPANY CONTACTS:

D. Scott Patterson
Chief Executive Officer

Jeremy Rakusin
Chief Financial Officer

(416) 960-9500