FirstService Reports First Quarter Results

FirstService Reports First Quarter Results

Colliers International Continues to Deliver Strong Growth in Revenues and
Profits

Operating highlights:               

                                   Three months
                                   ended March 31
                                   2013      2012
                                            

Revenues (millions)                 $ 498.1 $ 490.1
Adjusted EBITDA (millions) (note 1) 10.6    10.8
Adjusted EPS (note 2)               (0.20)   (0.10)

TORONTO, April 26, 2013 (GLOBE NEWSWIRE) -- FirstService Corporation (TSX:FSV)
(Nasdaq:FSRV) (TSX:FSV.PR.U) today reported results for its first quarter
ended March 31, 2013. All amounts are in US dollars.

Revenues for the first quarter were $498.1 million, a 2% increase relative to
the same quarter in the prior year, Adjusted EBITDA (note 1) was $10.6
million, down from $10.8 million and Adjusted EPS (note 2) was a loss of
$0.20, versus a loss of $0.10 reported in the prior year quarter. GAAP EPS was
a loss of $0.55 per share in the quarter, flat with the same quarter a year
ago.

"Results for the seasonally slow first quarter were better than anticipated as
revenues at Colliers International, FirstService Residential and FirstService
Brands were all up strongly versus the prior year," said Jay S. Hennick,
Founder and Chief Executive Officer of FirstService. As expected, results from
Field Asset Services were down considerably from the prior year quarter due to
sharp declines in foreclosure volumes associated with the recovery in the US
economy. Colliers International had much stronger bottom line performance
reflecting market share gains and continued growth through multi-market
assignments, corporate services and investment and capital market activities,"
he concluded.

On March 28, 2013, FirstService announced the acquisition of Colliers Germany,
adding market-leading players in Munich, Stuttgart and Berlin and oversight of
important relationships with affiliates in Dusseldorf and Frankfurt. The
acquisition further strengthens Colliers' real estate services platform in
Europe and complements the acquisition of Colliers UK last year.

On April 3, 2013, FirstService also announced plans to simplify its capital
structure and initiate a dividend on its Subordinate Voting Shares and
Multiple Voting Shares (together, the "Common Shares"). The plan involves the
elimination of its 7% Cumulative Preference Shares, Series 1 (the "Preferred
Shares") on May 3, 2013 by way of a partial redemption immediately followed by
a conversion of all remaining Preferred Shares into Subordinate Voting Shares.
The Company expects to pay $39.5 million in cash on redemption, and issue
approximately 2.9 million Subordinate Voting Shares from treasury on the
conversion. Subject to the elimination of the Preferred Shares, the Company
expects to pay its first quarterly Common Share dividend of $0.10 on or about
June 30, 2013.

About FirstService Corporation

FirstService Corporation is a global leader in the rapidly growing real estate
services sector, one of the largest markets in the world. As one of the
largest property managers in the world, FirstService manages more than 2.3
billion square feet of residential and commercial properties through its three
industry-leading service platforms: Colliers International, one of the largest
global players in commercial real estate services; FirstService Residential,
North America's largest manager of residential communities; and the Property
Services division, one of North America's largest providers of essential
property services delivered through company-owned operations, franchise
systems and contractor networks.

FirstService generates over US$2.3 billion in annual revenues and has more
than 23,000 employees worldwide. More information about FirstService is
available at www.firstservice.com

Segmented Quarterly Results

Commercial Real Estate Services revenues totalled $247.1 million for the first
quarter, up 16% relative to the prior year quarter. Internal growth of 5% was
primarily attributable to strong revenue growth in the Asia Pacific region,
particularly in Australia, with the balance of growth coming from acquisitions
completed within the past year. Adjusted EBITDA for the seasonally slow
quarter was $2.6 million, versus a loss of $2.0 million reported in the prior
year quarter and was positively impacted by operating leverage from revenue
growth through multi-market assignments, corporate services and investment and
capital market activities.

Residential Property Management revenues were $206.6 million for the first
quarter, up 8% relative to the prior year quarter. Revenue growth was
comprised of 7% internal growth due to new property management contract wins,
with the balance from acquisitions completed within the past year. Adjusted
EBITDA for the quarter was $10.9 million, versus $12.2 million in the prior
year period, with the decline attributable to a reduction in higher-margin
ancillary services revenues, as well as costs incurred in connection with
rebranding and information technology investments.

Property Services revenues totalled $44.3 million, versus $84.8 million in the
prior year period. FirstService Brands generated $26.8 million of revenues, up
13% due to improvements in franchisee productivity, while Field Asset Services
revenues were down due to a significant decline in volumes of distressed
properties under management. Adjusted EBITDA for the quarter was a loss of
$0.4 million, versus a profit of $2.9 million in the prior year quarter.
FirstService Brands generated a loss of $0.2 million in this seasonally slow
quarter, an improvement from the loss of $0.8 million generated in the prior
year period, while Field Asset Services results were impacted by the revenue
decline.

Corporate costs were $2.6 million in the first quarter, up from $2.2 million
in the prior year period and were impacted by deal costs for an acquisition
that was ultimately not completed.

Conference Call

FirstService will be holding a conference call on Friday, April 26, 2013 at
11:00 a.m. Eastern Time to discuss results for the first quarter. 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 (loss), 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 loss to
Adjusted EBITDA appears below.

                                
                                Three months ended
(in thousands of US dollars)     March 31
                                2013      2012
                                         

Net loss                         $ (8,219) $ (10,837)
Income tax                       (2,054)  (2,706)
Other (income) expense           (234)    (163)
Interest expense, net            5,172   4,507
Operating earnings               (5,335)  (9,199)
Depreciation and amortization    13,498  12,469
Acquisition-related items        2,206   6,553
Stock-based compensation expense 185     1,008
Adjusted EBITDA                  $ 10,554 $ 10,831

2. Reconciliation of net earnings (loss) and diluted net earnings (loss) per
common share to adjusted net earnings (loss) and adjusted earnings (loss) per
common share:

Adjusted earnings (loss) per share is defined as diluted net earnings (loss)
per common 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 and (iv) stock-based compensation expense. 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 earnings per share is not a recognized measure of financial
performance under GAAP, and should not be considered as a substitute for
diluted net earnings per common 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 loss attributable to common
shareholders to adjusted net earnings (loss) and of diluted net earnings
(loss) per common share to adjusted earnings (loss) per common share appears
below.

                                             
                                             Three months ended
(in thousands of US dollars)                  March 31
                                             2013      2012
                                                       
Net loss attributable to common shareholders  $ (16,527) $ (16,407)
Non-controlling interest redemption increment 5,580    3,633
Acquisition-related items                     2,206    6,553
Amortization of intangible assets             4,568    4,798
Stock-based compensation expense              185      1,008
Income tax on adjustments                     (2,039)   (2,093)
Non-controlling interest on adjustments       (101)     (524)
Adjusted net loss                             $ (6,128)  $ (3,032)
                                                       
                                             Three months ended
(in US dollars)                               March 31
                                             2013       2012
                                                       
Net loss per common share                     $ (0.55)   $(0.55)
Non-controlling interest redemption increment 0.19     0.12
Acquisition-related items                     0.07     0.21
Amortization of intangible assets, net of tax 0.09     0.10
Stock-based compensation expense, net of tax  --       0.02
Adjusted loss per common share                $ (0.20)   $ (0.10)

                                                                
                                                                
FIRSTSERVICE CORPORATION                                         
Condensed Consolidated Statements of Earnings (Loss)             
(in thousands of US dollars, except per share                    
amounts)
                                                     Three months
                                                     ended March 31
(unaudited)                                           2013       2012
                                                                
Revenues                                              $ 498,052  $ 490,056
                                                                
Cost of revenues                                      339,877    331,145
Selling, general and administrative expenses          147,806    149,088
Depreciation                                         8,930      7,671
Amortization of intangible assets                     4,568      4,798
Acquisition-related items (1)                         2,206      6,553
Operating loss                                        (5,335)    (9,199)
Interest expense, net                                 5,172     4,507
Other (income) expense                                (234)      (163)
Loss before income tax                                (10,273)   (13,543)
Income tax                                            (2,054)    (2,706)
Net loss                                              (8,219)    (10,837)
Non-controlling interest share of earnings            440       (523)
Non-controlling interest redemption increment        5,580     3,633
Net loss attributable to Company                     (14,239)   (13,947)
Preferred share dividends                             2,288     2,460
Net loss attributable to common shareholders          $ (16,527) $ (16,407)
                                                                
Net loss per common share                                       
Basic                                                 $ (0.55)   $ (0.55)
Diluted                                               $ (0.55)   $ (0.55)
                                                                
                                                                
Adjusted loss per common share (2)                    $ (0.20)   $ (0.10)
                                                                
Weighted average common shares (thousands)                       
Basic                                                 30,101    29,983
Diluted                                               30,448    30,384


Notes to Condensed Consolidated Statements of Earnings (Loss)
(1) Acquisition-related items include contingent acquisition consideration
fair value adjustments, contingent acquisition consideration-related
compensation expense, and transaction costs. In the quarter ended March 31,
2012, these amounts included transaction costs of $2,075 and a
reclassification of accumulated other comprehensive earnings of $2,553, both
related to Colliers International UK.
(2)See definition and reconciliation above.

                                                           
                                                           
Condensed Consolidated Balance Sheets                       
(in thousands of US dollars)                                
(unaudited)                                   March 31, 2013 December 31, 2012
                                                           
Assets                                                      
Cash and cash equivalents                     $ 87,558     $ 108,684
Restricted cash                               6,268        3,649
Accounts receivable                           337,529      328,455
Prepaid and other current assets              47,833       51,618
Deferred income tax                           18,133       18,135
Current assets                                497,321      510,541
Other non-current assets                      22,403       20,300
Fixed assets                                  105,115      107,011
Deferred income tax                           106,959      99,464
Goodwill and intangible assets                659,076      580,594
Total assets                                  $ 1,390,874  $ 1,317,910
                                                           
                                                           
Liabilities and shareholders' equity                        
Accounts payable and accrued liabilities      $ 368,337    $ 401,805
Other current liabilities                     26,780       27,054
Long-term debt - current                     36,798       39,038
Current liabilities                           431,915      467,897
Long-term debt - non-current                 392,805      298,167
Convertible unsecured subordinated debentures 76,992       77,000
Other liabilities                             33,711       48,259
Deferred income tax                           49,618       34,683
Non-controlling interests                    180,647      151,969
Shareholders' equity                          225,186      239,935
Total liabilities and equity                  $ 1,390,874  $ 1,317,910
                                                           
                                                           
Supplemental balance sheet information                      
Total debt                                    $ 506,595    $ 414,205
Total debt excluding convertible debentures   429,603      337,205
Total debt, net of cash                       419,037      305,521
Total debt excluding convertible debentures,  342,045      228,521
net of cash

                                                         
                                                         
Condensed Consolidated Statements of Cash Flows           
(in thousands of US dollars)                              
                                                Three months ended
                                                March 31
(unaudited)                                      2013     2012
                                                         
Cash provided by (used in)                                
                                                         
Operating activities                                      
Net loss                                         $ (8,219) $ (10,837)
Items not affecting cash:                                 
Depreciation and amortization                    13,498   12,469
Deferred income tax                              (5,005)  (7,197)
Other                                           1,222    992
                                                1,496    (4,573)
                                                         
Changes in non cash working capital                       
Accounts receivable                              7,003    26,430
Payables and accruals                            (83,535) (72,585)
Other                                            8,235    (3,577)
Net cash used in operating activities            (66,801) (54,305)
                                                         
Investing activities                                      
Acquisition of businesses, net of cash acquired (27,189) (12,651)
Purchases of fixed assets                        (5,661)  (6,870)
Other investing activities                       (4,057)  (128)
Net cash used in investing activities            (36,907) (19,649)
                                                         
Financing activities                                      
Increase in long-term debt, net                  92,398   55,934
Purchases of non-controlling interests           (989)    961
Dividends paid to preferred shareholders        (2,288)  (2,460)
Other financing activities                       (5,340)  (11,072)
Net cash provided by financing activities        83,781   43,363
                                                         
Effect of exchange rate changes on cash          (1,199)  789
                                                         
Decrease in cash and cash equivalents            (21,126) (29,802)
                                                         
Cash and cash equivalents, beginning of period   108,684  97,799
                                                         
Cash and cash equivalents, end of period         $87,558  $ 67,997

                                                             
                                                             
Segmented Revenues,
Adjusted EBITDA and                                           
Operating Earnings
(Loss)
(in thousands of US                                           
dollars)
                     Commercial  Residential                   
                     Real Estate Property    Property           
(unaudited)           Services    Management  Services  Corporate Consolidated
                                                             
Three months ended                                            
March 31
                                                             
2013                                                         
Revenues              $ 247,089  $ 206,571   $ 44,336  $ 56      $498,052
Adjusted EBITDA       2,617      10,935     (356)    (2,642)  10,554
                                                             
Operating earnings    (6,575)    7,751      (2,530)  (3,981)  (5,335)
(loss)
                                                             
2012                                                         
Revenues              $ 213,270  $ 191,889  $ 84,846 $ 51      $ 490,056
Adjusted EBITDA       (1,968)    12,158     2,874    (2,233)  10,831
                                                             
Operating earnings    (14,369)   8,068      604      (3,502)  (9,199)
(loss)

CONTACT: Jay S. Hennick
         Founder & CEO
        
         D. Scott Patterson
         President & COO
        
         John B. Friedrichsen
         Senior Vice President & CFO
        
         (416) 960-9500