BrightView(BV) - 2021 Q1 - Quarterly Report

PART I. FINANCIAL INFORMATION Item 1. Financial Statements (Unaudited) This section presents the unaudited consolidated financial statements of BrightView Holdings, Inc. for the quarter ended December 31, 2020, including balance sheets, statements of operations, comprehensive income (loss), stockholders' equity, and cash flows, along with detailed notes explaining accounting policies, revenue recognition, debt, equity, and segment information Consolidated Balance Sheets Consolidated Balance Sheets (In millions) | Assets/Liabilities (In millions) | Dec 31, 2020 | Sep 30, 2020 | |:---------------------------------|:-------------|:-------------| | Assets: | | | | Cash and cash equivalents | $81.6 | $157.1 | | Accounts receivable, net | $346.2 | $319.2 | | Unbilled revenue | $74.6 | $94.6 | | Total current assets | $567.6 | $633.1 | | Property and equipment, net | $255.8 | $251.5 | | Intangible assets, net | $223.9 | $221.3 | | Goodwill | $1,900.3 | $1,859.3 | | Total assets | $3,057.2 | $3,071.0 | | Liabilities: | | | | Accounts payable | $117.4 | $116.8 | | Current portion of long-term debt| $10.4 | $12.3 | | Deferred revenue | $67.1 | $57.1 | | Total current liabilities | $432.3 | $450.1 | | Long-term debt, net | $1,125.8 | $1,127.5 | | Total liabilities | $1,788.5 | $1,799.5 | | Stockholders' Equity: | | | | Total stockholders' equity | $1,268.7 | $1,271.5 | | Total liabilities and equity | $3,057.2 | $3,071.0 | - Total assets decreased from $3,071.0 million to $3,057.2 million, primarily due to a decrease in cash and cash equivalents from $157.1 million to $81.6 million[15] - Goodwill increased from $1,859.3 million to $1,900.3 million, reflecting recent acquisitions[15] Consolidated Statements of Operations Consolidated Statements of Operations (In millions, except per share data) | (In millions, except per share data) | Three Months Ended Dec 31, 2020 | Three Months Ended Dec 31, 2019 | |:-------------------------------------|:--------------------------------|:--------------------------------| | Net service revenues | $554.4 | $570.7 | | Cost of services provided | $420.8 | $427.7 | | Gross profit | $133.6 | $143.0 | | Selling, general and administrative expense | $123.3 | $130.3 | | Amortization expense | $13.9 | $13.5 | | (Loss) from operations | $(3.6) | $(0.8) | | Interest expense | $13.6 | $17.4 | | Net (loss) | $(12.0) | $(12.6) | | Basic and diluted (Loss) per share | $(0.11) | $(0.12) | - Net service revenues decreased by $16.3 million (2.9%) from $570.7 million in 2019 to $554.4 million in 2020[17] - Net loss improved slightly from $(12.6) million in 2019 to $(12.0) million in 2020, and loss per share improved from $(0.12) to $(0.11)[17] Consolidated Statements of Comprehensive (Loss) Income Consolidated Statements of Comprehensive (Loss) Income (In millions) | (In millions) | Three Months Ended Dec 31, 2020 | Three Months Ended Dec 31, 2019 | |:--------------|:--------------------------------|:--------------------------------| | Net (loss) | $(12.0) | $(12.6) | | Other comprehensive income | $3.6 | $2.1 | | Comprehensive (loss) | $(8.4) | $(10.5) | - Comprehensive loss improved from $(10.5) million in 2019 to $(8.4) million in 2020, primarily due to higher other comprehensive income[20] Consolidated Statements of Stockholders' Equity Consolidated Statements of Stockholders' Equity (In millions) | (In millions) | Balance, Sep 30, 2020 | Net (loss) | Other comprehensive income, net of tax | Capital contributions and issuance of common stock | Equity-based compensation | Repurchase of common stock and distributions | Balance, Dec 31, 2020 | |:--------------|:----------------------|:-----------|:---------------------------------------|:---------------------------------------------------|:--------------------------|:---------------------------------------------|:----------------------| | Common Shares | 104.9 | — | — | 0.2 | — | — | 105.1 | | Stock Amount | $1.0 | — | — | $0.1 | — | — | $1.1 | | Additional Paid-In Capital | $1,467.8 | — | — | $1.7 | $4.9 | — | $1,474.4 | | Accumulated Deficit | $(187.9) | $(12.0) | — | — | — | — | $(199.9) | | Accumulated Other Comprehensive Loss | $(6.9) | — | $3.6 | — | — | — | $(3.3) | | Treasury Stock | $(2.5) | — | — | — | — | $(1.1) | $(3.6) | | Total Stockholders' Equity | $1,271.5 | $(12.0) | $3.6 | $1.8 | $4.9 | $(1.1) | $1,268.7 | - Total stockholders' equity decreased slightly from $1,271.5 million at September 30, 2020, to $1,268.7 million at December 31, 2020, primarily due to net loss and stock repurchases, partially offset by other comprehensive income and equity-based compensation[23] Consolidated Statements of Cash Flows Consolidated Statements of Cash Flows (In millions) | (In millions) | Three Months Ended Dec 31, 2020 | Three Months Ended Dec 31, 2019 | |:--------------|:--------------------------------|:--------------------------------| | Operating activities | $5.1 | $7.3 | | Investing activities | $(71.4) | $(31.9) | | Financing activities | $(9.2) | $(4.2) | | Net change in cash and cash equivalents | $(75.5) | $(28.8) | | Cash and cash equivalents, end of period | $81.6 | $10.3 | - Net cash provided by operating activities decreased from $7.3 million in 2019 to $5.1 million in 2020[28] - Net cash used in investing activities significantly increased from $(31.9) million in 2019 to $(71.4) million in 2020, primarily due to higher business acquisitions[28] - Cash and cash equivalents at period-end increased substantially from $10.3 million in 2019 to $81.6 million in 2020, despite a larger net change in cash and cash equivalents[28] Notes to Unaudited Consolidated Financial Statements 1. Business and Basis of Presentation - BrightView Holdings, Inc. provides landscape maintenance, enhancements, development, and snow removal services for commercial customers across the U.S., operating through two segments: Maintenance Services and Development Services[31] - The financial statements are unaudited and prepared in accordance with GAAP for interim reporting, with management making estimates and assumptions that affect reported amounts[32][33][35] 2. Recent Accounting Pronouncements - The Company adopted ASU No. 2016-13 (Credit Losses) and ASU No. 2018-13 (Fair Value Measurement) in Q1 fiscal 2021, neither of which had a material impact on financial statements[36][39] - The Company is evaluating ASU No. 2019-12 (Income Taxes), effective Q1 fiscal 2022, and has applied hedge accounting expedients from ASU No. **202