APi Group Reports Fourth Quarter and Full Year 2020 Financial Results

APi Group Corporation (NYSE: APG) (“APG”, “APi” or the “Company”) today reported its financial results for the three months and full year ended December 31, 2020.

Fourth Quarter 2020 Highlights:

• Reported net revenues declined by 10.5% or $103 million to $882 million, compared to $985 million in the prior year period, primarily driven by COVID-19 related impacts, disciplined project selection and the divestiture of two businesses in Industrial Services
• Adjusted net revenues declined by 5.5% or $51 million to $874 million, compared to $925 million in the prior year period, primarily driven by COVID-19 related impacts and disciplined project selection
• Reported gross margin was 22.4%, representing a 235 basis point increase compared to prior year gross margin of 20.1%, driven by a higher mix of service revenue in Safety Services and disciplined project selection and execution in Industrial Services
• Adjusted gross margin was 25.4%, representing a 183 basis point increase compared to prior year gross margin of 23.6%, driven by a higher mix of service revenue in Safety Services and disciplined project selection and execution in Industrial Services
• Reported operating loss was $21 million, an improvement of $117 million from prior year operating loss of $138 million
• Reported net loss was $22 million, a $128 million improvement from prior year net loss of $150 million and reported net loss was $1.44 per diluted share
• Adjusted net income was $61 million and adjusted diluted EPS was $0.34, representing a $0.02 decline from prior year
• Adjusted EBITDA was $103 million or 11.8%, relatively consistent with prior year adjusted EBITDA of $109 million and adjusted EBITDA margin of 11.8%

Full Year 2020 Highlights:

• Reported net revenues were $3.6 billion compared to $985 million in the prior year (Successor) and $3.1 billion in the period from January 1, 2019 through September 30, 2019 (Predecessor). The change was primarily driven by COVID-19 related impacts, disciplined project selection and the divestiture of two businesses in Industrial Services
• Adjusted net revenues declined by 8.0% or $306 million to $3.5 billion, compared to combined adjusted net revenues of $3.8 billion in the prior year period, primarily driven by COVID-19 related impacts and disciplined project selection
• Reported gross margin was 21.1%, compared to prior year gross margin of 20.1% in the prior year (Successor) and 19.4% in the period from January 1, 2019 through September 30, 2019 (Predecessor). The change was driven by a higher mix of service revenue in Safety Services and disciplined project selection and execution in Industrial Services
• Adjusted gross margin was 24.2%, representing a 260 basis point increase compared to combined prior year gross margin of 21.6%, driven by a higher mix of service revenue in Safety Services and improved project selection and execution in Industrial Services
• Reported operating loss was $166 million compared to an operating loss of $161 million in the prior year (Successor) and operating income of $102 million in the period from January 1, 2019 through September 30, 2019 (Predecessor), largely driven by a $197 million impairment charge and additional amortization expense in 2020
• Reported net loss was $153 million, compared to a net loss of $153 million in the prior year (Successor) and net income of $86 million in the period from January 1, 2019 through September 30, 2019 (Predecessor), primarily driven by a $197 million impairment charge. Reported net loss was $2.21 per diluted share
• Adjusted net income was $215 million and adjusted diluted EPS was $1.22, representing a $0.04 decline from combined EPS in the prior year
• Adjusted EBITDA was $381 million or 10.9%, representing a 56 basis point increase compared to prior year combined adjusted EBITDA margin of 10