Segments

9 Months Ended

Jun. 30, 2021

Segment Reporting [Abstract]

Segments

12. Segments

The operations of the Company are conducted through two operating segments: Maintenance Services and Development Services, which are also its reportable segments.

Maintenance Services primarily consists of recurring landscape maintenance services and snow removal services as well as supplemental landscape enhancement services.

Development Services primarily consists of landscape architecture and development services for new construction and large scale redesign projects.

The operating segments identified above are determined based on the services provided, and they reflect the manner in which operating results are regularly reviewed by the Chief Operating Decision Maker (“CODM”) to allocate resources and assess performance. The CODM is the Company’s Chief Executive Officer. The CODM evaluates the performance of the Company’s operating segments based upon Net Service Revenues, Adjusted EBITDA and Capital Expenditures. Management uses Adjusted EBITDA to evaluate performance and profitability of each operating segment.

The accounting policies of the segments are the same as those described in Note 2 “Summary of Significant Accounting Policies” in the notes to our consolidated financial statements in the Annual Report on Form 10-K for the fiscal year ended September 30, 2020. Corporate includes corporate executive compensation, corporate finance, legal and information technology which are not allocated to the segments. Eliminations represent eliminations of intersegment revenues. The Company does not currently provide asset information by segment, as this information is not used by management when allocating resources or evaluating performance.

During the second quarter of fiscal 2021, to align with changes in how we manage our business, the Company reclassified Net service revenues and expenses related to a second quarter fiscal 2020 acquisition from the Maintenance Services segment to the Development Services segment. Prior period segment results have been reclassified with no significant impact on segment results. There were no changes to the Company’s consolidated financial statements.

The following is a summary of certain financial data for each of the segments:

	Three Months Ended June 30,						Nine Months Ended June 30,
	2021			2020			2021			2020
Maintenance Services	$	524.6		$	456.3		$	1,478.4		$	1,288.7
Development Services		150.3			152.8			404.7			451.9
Eliminations		(1.3	)		(1.0	)		(3.2	)		(2.7	)
Net service revenues	$	673.6		$	608.1		$	1,879.9		$	1,737.9
Maintenance Services	$	90.6		$	83.3		$	212.5		$	171.7
Development Services		18.7			21.8			46.6			55.1
Corporate		(15.7	)		(14.1	)		(46.3	)		(45.2	)
Adjusted EBITDA(1)	$	93.6		$	91.0		$	212.8		$	181.6
Maintenance Services	$	13.3		$	8.0		$	37.5		$	34.0
Development Services		2.7			1.6			5.0			9.5
Corporate		0.8			1.2			2.2			2.4
Capital expenditures	$	16.8		$	10.8		$	44.7		$	45.9

(1)Presented below is a reconciliation of Net income (loss) to Adjusted EBITDA:

	Three Months Ended June 30,					Nine Months Ended June 30,
	2021		2020			2021		2020
Net income (loss)	$	25.2	$	(2.4	)	$	19.5	$	(35.5	)
Interest expense		9.4		15.4			32.5		49.9
Income tax expense (benefit)		9.5		(0.3	)		8.1		(11.9	)
Depreciation expense		21.3		20.9			63.6		60.4
Amortization expense		12.6		13.6			39.0		40.6
Establish public company financial reporting compliance (a)		—		—			—		0.9
Business transformation and integration costs (b)		7.2		8.2			20.0		25.8
Offering-related expenses (c)		0.3		2.6			0.5		4.1
Equity-based compensation (d)		5.3		4.9			15.5		18.2
COVID-19 related expenses (e)		2.8		4.0			14.1		5.0
Changes in self-insured liability estimates (f)		—		24.1			—		24.1
Adjusted EBITDA	$	93.6	$	91.0		$	212.8	$	181.6

(a)Represents costs incurred to establish public company financial reporting compliance, including costs to comply with the requirements of Sarbanes-Oxley and the accelerated adoption of the revenue recognition standard (ASC 606 – Revenue from Contracts with Customers) and other miscellaneous costs.

(b)Business transformation and integration costs consist of (i) severance and related costs; (ii) vehicle fleet rebranding costs; (iii) business integration costs and (iv) information technology infrastructure, transformation costs, and other.

	Three Months Ended June 30,				Nine Months Ended June 30,
(In millions)	2021		2020		2021		2020
Severance and related costs	$	0.1	$	2.7	$	0.3	$	3.3
Business integration (g)		3.4		1.8		9.2		10.6
IT infrastructure, transformation, and other (h)		3.7		3.7		10.5		11.9
Business transformation and integration costs	$	7.2	$	8.2	$	20.0	$	25.8

(c)Represents transaction related expenses incurred for IPO related litigation and completed or contemplated subsequent registration statements. 

(d)Represents equity-based compensation expense and related taxes recognized for equity incentive plans outstanding.

(e)Represents expenses related to the Company’s response to the COVID-19 pandemic, principally temporary and incremental salary and related expenses, personal protective equipment and cleaning and supply purchases, and other.

(f)Represents expenses related to changes in estimates and actuarial assumptions associated with the Company’s self-insured liability amounts for workers’ compensation, general liability, auto liability, and employee health care insurance programs, to reflect uncertainties associated with the current environment, including the COVID-19 pandemic.

(g)Represents isolated expenses specifically related to the integration of acquired companies such as one-time employee retention costs, employee onboarding and training costs, and fleet and uniform rebranding costs. The Company excludes Business integration costs from the measures disclosed above since such expenses vary in amount due to the number of acquisitions and size of acquired companies as well as factors specific to each acquisition, and as a result lack predictability as to occurrence and/or timing, and create a lack of comparability between periods.

(h)Represents expenses related to distinct initiatives, typically significant enterprise-wide changes. Such expenses are excluded from the measures disclosed above since such expenses vary in amount based on occurrence as well as factors specific to each of the activities, are outside of the normal operations of the business, and create a lack of comparability between periods.