UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)

☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended March 31, 2021

OR

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from      to     

Commission File Number: 001-38579

BrightView Holdings, Inc.

(Exact name of Registrant as specified in its Charter)

Delaware	46-4190788
( State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)
980 Jolly Road Blue Bell, Pennsylvania	19422
(Address of principal executive offices)	(Zip Code)

Registrant’s telephone number, including area code: (484) 567-7204

Securities registered pursuant to Section 12(b) of the Act:

Title of Each Class	Trading Symbol	Name of exchange on which registered
Common Stock, Par Value $0.01 Per Share	BV	New York Stock Exchange

Securities registered pursuant to Section 12(g) of the Act: None

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.     Yes  ☒    No  ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).    Yes  ☒    No  ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer	☐	Accelerated filer	☒
Non-accelerated filer	☐	Smaller reporting company	☐
Emerging growth company	☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).    Yes  ☐    No  ☒

The number of shares of Registrant’s Common Stock outstanding as of April 30, 2021 was 105,184,466.

Table of Contents

		Page
PART I.	FINANCIAL INFORMATION	4
Item 1.	Financial Statements (Unaudited)	4
	Consolidated Balance Sheets	4
	Consolidated Statements of Operations	5
	Consolidated Statements of Comprehensive Income (Loss)	6
	Consolidated Statements of Stockholders’ Equity	7
	Consolidated Statements of Cash Flows	8
	Notes to Unaudited Consolidated Financial Statements	9
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	22
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	36
Item 4.	Controls and Procedures	36
PART II.	OTHER INFORMATION	37
Item 1.	Legal Proceedings	37
Item 1A.	Risk Factors	37
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	37
Item 3.	Defaults Upon Senior Securities	37
Item 4.	Mine Safety Disclosures	37
Item 5.	Other Information	37
Item 6.	Exhibits	38
Signatures		39

1

SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS

This Quarterly Report on Form 10-Q (this “Form 10-Q”) contains “forward-looking statements” within the meaning of the safe harbor provision of the U.S. Private Securities Litigation Reform Act of 1995, Section 27A of the Securities Act of 1933, as amended (the “Securities Act”), and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), which are subject to the “safe harbor” created by those sections. All statements, other than statements of historical facts included in this Form 10-Q, including statements concerning our plans, objectives, goals, beliefs, business strategies, future events, business conditions, results of operations, financial position, business outlook, business trends and other information, may be forward-looking statements.

Words such as “believes,” “expects,” “may,” “will,” “should,” “seeks,” “intends,” “plans,” “estimates,” or “anticipates,” and variations of such words or similar expressions are intended to identify forward-looking statements. The forward-looking statements are not historical facts, or guarantees of future performance and are based upon our current expectations, beliefs, estimates and projections, and various assumptions, many of which, by their nature, are inherently uncertain and beyond our control. Our expectations, beliefs, and projections are expressed in good faith and we believe there is a reasonable basis for them. However, there can be no assurance that management’s expectations, beliefs and projections will result or be achieved and actual results may vary materially from what is expressed in or indicated by the forward-looking statements.

There are a number of risks, uncertainties and other important factors, many of which are beyond our control, that could cause our actual results to differ materially from the forward-looking statements contained in this Form 10-Q. Such risks, uncertainties and other important factors that could cause actual results to differ include, among others, the risks, uncertainties and factors set forth under the heading “Business”, “Risk Factors” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and elsewhere in this Form 10-Q. New risk factors and uncertainties may emerge from time to time, and it is not possible for management to predict all risk factors and uncertainties. Some of the key factors that could cause actual results to differ from our expectations include risks related to:

• general business economic and financial conditions;

• the duration and extent of the novel coronavirus (COVID-19) pandemic and its resurgence, and the impact of federal, state and local governmental actions and customer behavior in response to the pandemic, including possible additional or reinstated restrictions as a result of a resurgence of the pandemic;

• competitive industry pressures;

• the failure to retain current customers, renew existing customer contracts and obtain new customer contracts;

• the failure to enter into profitable contracts, or maintaining customer contracts that are unprofitable;

• a determination by customers to reduce their outsourcing or use of preferred vendors;

• the dispersed nature of our operating structure;

• our ability to implement our business strategies and achieve our growth objectives;

• acquisition and integration risks;

• the seasonal nature of our landscape maintenance services;

• our dependence on weather conditions;

• increases in prices for raw materials and fuel;

• changes in our ability to source adequate supplies and materials in a timely manner;

• any failure to accurately estimate the overall risk, requirements, or costs when we bid on or negotiate contracts that are ultimately awarded to us;

• the conditions and periodic fluctuations of real estate markets, including residential and commercial construction;

• our ability to retain our executive management and other key personnel;

• our ability to attract and retain trained workers and third-party contractors and re-employ seasonal workers;

• any failure to properly verify employment eligibility of our employees;

• subcontractors taking actions that harm our business;

2

• our recognition of future additional impairment charges;

• laws and governmental regulations, including those relating to employees, wage and hour, immigration, human health and safety and transportation;

• environmental, health and safety laws and regulations, including regulatory costs, claims and litigation related to the use of chemicals and pesticides by employees and related third-party claims;

• the distraction and impact caused by litigation, of adverse litigation judgments and settlements resulting from legal proceedings;

• increase in on-job accidents involving employees;

• any failure, inadequacy, interruption, security failure or breach of our information technology systems;

• our ability to adequately protect our intellectual property;

• restrictions imposed by our debt agreements that limit our flexibility in operating our business;

• our ability to generate sufficient cash flow to satisfy our significant debt service obligations;

• our ability to obtain additional financing to fund future working capital, capital expenditures, investments or acquisitions, or other general corporate requirements;

• increases in interest rates governing our variable rate indebtedness increasing the cost of servicing our substantial indebtedness including proposed changes to LIBOR;

• ownership of our common stock;

• occurrence of natural disasters, terrorist attacks or other external events;

• changes in generally accepted accounting principles in the United States; and

• costs and requirements imposed as a result of maintaining the requirement of being a public company.

We caution you that the risks, uncertainties, and other factors referenced above may not contain all of the risks, uncertainties and other factors that are important to you. In addition, we cannot assure you that we will realize the results, benefits, or developments that we expect or anticipate or, even if substantially realized, that they will result in the consequences or affect us or our business in the way expected. We undertake no obligation to publicly update or revise any forward-looking statements to reflect subsequent events or circumstances, any change in assumptions, beliefs or expectations or any change in circumstances upon which any such forward-looking statements are based, except as required by law.

3

PART I—FINANCIAL INFORMATION

Item 1. Financial Statements.

BrightView Holdings, Inc.

Consolidated Balance Sheets

(Unaudited)

(In millions, except par value and share data)

	March 31, 2021			September 30, 2020
Assets
Current assets:
Cash and cash equivalents	$	123.8		$	157.1
Accounts receivable, net		376.4			319.2
Unbilled revenue		74.4			94.6
Other current assets		61.1			62.2
Total current assets		635.7			633.1
Property and equipment, net		261.8			251.5
Intangible assets, net		214.1			221.3
Goodwill		1,919.6			1,859.3
Operating lease assets		65.1			58.8
Other assets		42.1			47.0
Total assets	$	3,138.4		$	3,071.0
Liabilities and stockholders’ equity
Current liabilities:
Accounts payable	$	144.3		$	116.8
Current portion of long-term debt		10.4			12.3
Deferred revenue		74.3			57.1
Current portion of self-insurance reserves		52.3			48.4
Accrued expenses and other current liabilities		206.8			197.2
Current portion of operating lease liabilities		20.8			18.3
Total current liabilities		508.9			450.1
Long-term debt, net		1,123.4			1,127.5
Deferred tax liabilities		40.1			38.9
Self-insurance reserves		98.4			102.7
Long-term operating lease liabilities		51.2			47.5
Other liabilities		34.6			32.8
Total liabilities		1,856.6			1,799.5
Stockholders’ equity:
Preferred stock, $0.01 par value; 50,000,000 shares authorized; no shares    issued or outstanding as of March 31, 2021 and September 30, 2020		—			—
Common stock, $0.01 par value; 500,000,000 shares authorized;   105,200,000 and 104,900,000 shares issued and outstanding as of    March 31, 2021 and September 30, 2020, respectively		1.1			1.0
Treasury stock, at cost; 237,000 and 91,000 shares as of    March 31, 2021 and September 30, 2020, respectively		(3.6	)		(2.5	)
Additional paid-in-capital		1,479.4			1,467.8
Accumulated deficit		(193.6	)		(187.9	)
Accumulated other comprehensive loss		(1.5	)		(6.9	)
Total stockholders’ equity		1,281.8			1,271.5
Total liabilities and stockholders’ equity	$	3,138.4		$	3,071.0

The accompanying notes are an integral part of these unaudited consolidated financial statements.

4

BrightView Holdings, Inc.

Consolidated Statements of Operations

(Unaudited)

(In millions, except per share data)

	Three Months Ended March 31,					Six Months Ended March 31,
	2021		2020			2021			2020
Net service revenues	$	651.9	$	559.1		$	1,206.3		$	1,129.8
Cost of services provided		493.8		426.8			914.6			854.5
Gross profit		158.1		132.3			291.7			275.3
Selling, general and administrative expense		127.9		126.9			251.3			257.1
Amortization expense		12.5		13.6			26.4			27.1
Income (loss) from operations		17.7		(8.2	)		14.0			(8.9	)
Other income (expense)		0.5		(1.9	)		2.0			(1.3	)
Interest expense		9.6		17.1			23.1			34.5
Income (loss) before income taxes		8.6		(27.2	)		(7.1	)		(44.7	)
Income tax expense (benefit)		2.3		(6.7	)		(1.4	)		(11.6	)
Net income (loss)	$	6.3	$	(20.5	)	$	(5.7	)	$	(33.1	)
Income (loss) per share:
Basic and diluted	$	0.06	$	(0.20	)	$	(0.05	)	$	(0.32	)

The accompanying notes are an integral part of these unaudited consolidated financial statements.

5

BrightView Holdings, Inc.

Consolidated Statements of Comprehensive Income (Loss)

(Unaudited)

(In millions)

	Three Months Ended March 31,					Six Months Ended March 31,
	2021		2020			2021			2020
Net income (loss)	$	6.3	$	(20.5	)	$	(5.7	)	$	(33.1	)
Net derivative gains (losses) arising during the period, net of tax expense (benefit) of $0.5; $(3.7); $0.5; and $(3.7), respectively		1.6		(9.9	)		1.3			(9.7	)
Reclassification of losses into Net income (loss), net of tax expense of $0.1; $1.0; $1.5; and $1.8, respectively		0.2		2.9			4.1			4.8
Other comprehensive income (loss)		1.8		(7.0	)		5.4			(4.9	)
Comprehensive income (loss)	$	8.1	$	(27.5	)	$	(0.3	)	$	(38.0	)

The accompanying notes are an integral part of these unaudited consolidated financial statements.

6

BrightView Holdings, Inc.

Consolidated Statements of Changes in Stockholders’ Equity

Three and Six Months Ended March 31, 2021 and 2020

(Unaudited)

(In millions)

	Common Stock				Additional Paid-In			Accumulated			Accumulated Other Comprehensive			Treasury			Total Stockholders’
	Shares		Amount		Capital			Deficit			Loss			Stock			Equity
Balance, December 31, 2020		105.1	$	1.1	$	1,474.4		$	(199.9	)	$	(3.3	)	$	(3.6	)		1,268.7
Net income		—		—		—			6.3			—			—			6.3
Other comprehensive income, net of tax		—		—		—			—			1.8			—			1.8
Capital contributions and issuance of common stock		0.1		—		(0.3	)		—			—			—			(0.3	)
Equity-based compensation		—		—		5.3			—			—			—			5.3
Repurchase of common stock and distributions		—		—		—			—			—			—			—
Balance, March 31, 2021		105.2	$	1.1	$	1,479.4		$	(193.6	)	$	(1.5	)	$	(3.6	)	$	1,281.8
Balance, September 30, 2020		104.9	$	1.0	$	1,467.8		$	(187.9	)	$	(6.9	)	$	(2.5	)	$	1,271.5
Net (loss)		—		—		—			(5.7	)		—			—			(5.7	)
Other comprehensive income, net of tax		—		—		—			—			5.4			—			5.4
Capital contributions and issuance of common stock		0.3		0.1		1.4			—			—			—			1.5
Equity-based compensation		—		—		10.2			—			—			—			10.2
Repurchase of common stock and distributions		—		—		—			—			—			(1.1	)		(1.1	)
Balance, March 31, 2021		105.2	$	1.1	$	1,479.4		$	(193.6	)	$	(1.5	)	$	(3.6	)	$	1,281.8
	Common Stock				Additional Paid-In			Accumulated			Accumulated Other Comprehensive			Treasury			Total Stockholders’
	Shares		Amount		Capital			Deficit			Loss			Stock			Equity
Balance, December 31, 2019		104.9	$	1.0	$	1,452.3		$	(158.9	)	$	(9.6	)	$	(1.7	)	$	1,283.1
Net (loss)		—		—		—			(20.5	)		—			—			(20.5	)
Other comprehensive (loss), net of tax		—		—		—			—			(7.0	)		—			(7.0	)
Capital contributions and issuance of common stock		—		—		0.1			—			—			—			0.1
Equity-based compensation		—		—		4.9			—			—			—			4.9
Repurchase of common stock and distributions		—		—		—			—			—			—			—
Balance, March 31, 2020		104.9	$	1.0	$	1,457.3		$	(179.4	)	$	(16.6	)	$	(1.7	)	$	1,260.6
Balance, September 30, 2019		104.7	$	1.0	$	1,441.8		$	(146.3	)	$	(11.7	)	$	(1.0	)	$	1,283.8
Net (loss)		—		—		—			(33.1	)		—			—			(33.1	)
Other comprehensive (loss), net of tax		—		—		—			—			(4.9	)		—			(4.9	)
Capital contributions and issuance of common stock		0.2		—		2.4			—			—			—			2.4
Equity-based compensation		—		—		13.1			—			—			—			13.1
Repurchase of common stock and distributions		—		—		—			—			—			(0.7	)		(0.7	)
Balance, March 31, 2020		104.9	$	1.0	$	1,457.3		$	(179.4	)	$	(16.6	)	$	(1.7	)	$	1,260.6

The accompanying notes are an integral part of these unaudited consolidated financial statements.

7

BrightView Holdings, Inc.

Consolidated Statements of Cash Flows

(Unaudited)

(In millions)

	Six Months Ended March 31,
	2021			2020
Cash flows from operating activities:
Net income (loss)	$	(5.7	)	$	(33.1	)
Adjustments to reconcile net (loss) to net cash provided by operating activities:
Depreciation		42.3			39.5
Amortization of intangible assets		26.4			27.1
Amortization of financing costs and original issue discount		1.9			1.8
Deferred taxes