Welcome to the first quarter investors conference call. Today's call is being recorded. Legal counsel requires us to advise that the discussion scheduled to take place today may contain forward-looking statements that involve known and unknown risks and uncertainties. Actual results may be materially different from any future results, performance or achievements contemplated in the forward-looking statements. Additional information concerning factors that could cause the actual results to materially differ from those in the forward-looking statements is contained in the company's annual information form, as filed with the Canadian securities administrators, and in the company's annual report on Form 40-F, as filed with the U.S. Securities and Exchange Commission. As a reminder, today's call is being recorded. Today is April 25, 2018. I would like to turn the call over to Chief Executive Officer, Mr. Scott Patterson. Please go ahead, sir.

Thank you, operator, and welcome, everyone, to our first quarter call. Thank you for joining. This morning, we announced very strong results for the March quarter, driven primarily by the same themes that we have seen really over the last three years, and that is, strong organic growth at FirstService Brands; year-over-year margin improvement at FirstService Residential; and solid tuck-under acquisition activity, which enhances our top line growth. We're very pleased with the way we started fiscal 2018 and believe the momentum bodes well for achieving our full year objectives. I will spend the next few minutes taking you through some of our highlights for the quarter. And then Jeremy Rakusin, our CFO, will follow with the financial review. Revenues for the quarter were up 12% over the prior year, with organic growth at 6%, and the balance from several tuck-under acquisitions closed over the last year. EBITDA was up significantly, 26% versus 2017, driven by continuing margin improvement at FirstService Residential, but also by margin expansion at FirstService Brands, which is more mix related. Jeremy will provide more detailed commentary on divisional margins in a few minutes. And finally, our earnings per share for the quarter increased 56% to $0.25 from $0.16. Again, this quarter, both our divisions generated strong results. At FirstService Residential, revenues grew by 7%, with the organic growth accounting for about half, which is generally consistent with the growth rates we've seen over the last year. Organic growth was balanced geographically, with every region up over the prior year, and also by service line, with ancillary service revenue up generally, in lockstep with management fee revenue. Top line growth benefited from the addition of 5 tuck-unders over the last year. Notable additions were Zalco Realty, a leading high-rise management company in Washington, D.C., and Paradise…

Thank you, Scott, and good morning, everyone. As summarized in this morning's press release and reaffirming Scott's comments, we reported another quarter a very strong results. I will walk through our overall consolidated and segmented financial results for the quarter, our cash flow and capital deployment, and finally wrap up with our balance sheet position. First, let me highlight our consolidated first quarter financial results. FirstService reported revenues of $426 million, up 12% over the $380 million in Q1 2017. Adjusted EBITDA was $25.4 million, representing 26% growth over the prior-year's $20.1 million, with a 6% margin for the quarter up 70 basis points year-over-year. And our adjusted EPS was $0.25, a 56% increase over the $0.16 per share reported for the same period last year. Adjustments to operating earnings and GAAP EPS in arriving at adjusted EBITDA and adjusted EPS, respectively, are outlined in our press release issued this morning and are consistent with our approach and disclosures adopted in prior periods. One other accounting driven point I'd like to highlight before diving into our segmented performance is a new required U.S. GAAP change to revenue recognition in effect as of January 1, 2018. The effect of this accounting change is relatively insignificant to our consolidated financial results. The impact is confined to our franchised operations within our FirstService Brands division, particularly as it relates to the timing and recognition of franchise and marketing fund fees. In accordance with U.S. GAAP, we have recast our prior-year period results to allow for an apples-to-apples comparison to the current year results with the new standard in effect. The aggregate impact on the recast Q1 2017 consolidated results was a $4.4 million increase in revenues, a $600,000 decrease to the adjusted EBITDA line and $0.01 decrease to our adjusted EPS. The implied…

[Operator Instructions]. Your first question comes from the line of Stephen Sheldon from William Blair.

I guess, first your margins within the residential segment continued to trend up nicely year-over-year, and you've talked about still having room to improve margins, especially in regards to client accounting. So just curious if you saw any impact from efficiencies in client accounting in the quarter, and maybe just some more color on how the accounting platform and standardization across regions could drive margin improvement there over the next few years.

Yes, Stephen. Yes, a portion of the margin improvement for the quarter in residential was client accounting and other modest operating efficiencies. The rest, as I mentioned, was due to the mix and seasonality. The opportunity to ramp client accounting, we believe we've still got a couple years of that. It is going to drive margin improvements, albeit at significantly smaller increments than what we've seen in the last 3 years where we had many other initiatives in place. So the opportunity is still there. It's a journey. It's going to be done region by region. And we believe that we're going to be able to incrementally improve margins quarterly and annually for the most part.

Your next question comes from the line of Frederic Bastien from Raymond James.

I was wondering if you could give us an idea of where you're seeing the best opportunities for M&A growth beyond your company-owned initiative. Is it still on the fire protection side?

Fire protection and FirstService Residential is certainly a focus for us. In addition to the company-owned, it would be those 4 areas, tuck-unders, in every case, as opposed to new business lines or new service lines. But really no change from the past few quarters in terms of our pipeline, and those would be the 4 principle areas.

And Scott, how easy is it to get that incremental growth out of FirstService Residential? You are obviously the biggest fish in the pond there. Are you still seeing good opportunities to affect some changes there and do some more tuck-ins?

Yes, absolutely. There are thousands of management companies. We've made tuck-unders every year since we started in this business in '96, and we expect we'll make tuck-unders every year in the future. They are certainly periodic, and they include management companies. As I've said in my prepared remarks, that will primarily add market share to leadership positions in existing markets. Also, ancillary service companies, I think we have a lot of room there to add, to fill out our service offering in various markets through ancillary service companies.

And I guess, we've discussed in the past your focus on North America. Is it still sort of the area of focus? Do you discuss the possibility of going abroad?

Well, we are open-minded to it. Over the years, we've looked at a number of opportunities, but it's not active for us today. We feel like we have -- at 7% market share or thereabouts, we feel like we have lots and lots of running room in North America in this business.

Okay. The last one for me, it's just I was curious here. I was browsing through the FirstService Brand's website this morning. I noticed a business that wasn't previously aware of, Brandpoint Services. Can you speak to that business there?

Sure. When you see Brandpoint, think of Serva National, which is what the name used to be. And it is a business which -- a business development primary -- it is the primary focus, looking for a national paying contracts, retailers that are national, other businesses which have locations across North America, and then Brandpoint serves as the point, if you will, pulling together these sort of franchisees to deliver the service.

Your next question comes from the line of Stephen MacLeod from BMO Capital.

This is [indiscernible] filling in for Stephen. Just the first question I have is, in terms of the seasonality of the recent acquisitions, how much of a contribution were they in the quarter?

In terms of margin?

Margin, yes, or the portion of the acquisition growth.

Well, the acquisition growth, we spoke to earlier. About half of the FirstService Residential growth was acquisitions and half was organic. And in the case of FirstService Brands, we had 10% organic growth and 24% all-in growth, so 14% acquisition growth. In terms of the impact on margins, roughly, on the FirstService Residential side, the seasonality and the mix, about 50% of the margin improvement was operational and about the other half being due to the mix on acquisitions coming in. And on the FirstService Brands side, where there was 60 basis points of margin expansion, most of it would have been acquisition driven on the margin expansion front.

Okay. And has your outlook for the margin for each of the segments changed for the full year?

No. I mean, aside from the adjustments driven by the revenue recognition change, everything else would be in line with our expectations at the beginning of the year.

Okay. And just the last one for me. Could you provide an update on the Grand Rapids and Phoenix Manufacturing facilities? And how those are progressing in terms of getting operating efficiencies out of them?

I think that we're progressing well on track. Grand Rapids, we opened last year at around this time. And recently, we added a second line. And we're in the process of moving our Massachusetts-owned facility to Grand Rapids. And so capacity utilization is expanding. And we'll look to add our Florida operations to the Grand Rapids facility later this year. And then Phoenix, we -- our 2 lines moving to 3 lines, and we'll be focused for the balance of the year in transitioning our Orange County operation, which is a substantial one. And that will, in both cases, take our capacity utilization up towards 75%-ish. And then it's onward from there, we look to have five lines in both and supporting at least 25 operations when we're through.

Your next question comes from the line of Marc Riddick from Sidoti & Company.

I wanted to touch on the labor picture at the moment. I just wonder if you could sort of give us some more -- it could be a broad overview, so maybe what you're seeing with labor? And if there are any particular pockets that are maybe a bit more challenging, either geographically or by service line. And then I have a follow-up to that.

The labor market remains very tight and a challenge. And I think I've mentioned in prior quarters that we have open positions really across the board at every business. We are primarily a labor-based company, 19,000 employees, 75% plus of our cost structure is labor. So it remains a challenge. We have invested significantly in recruiting and onboarding over the last couple of years, and we're seeing the results of that in our ability to bring on -- talent has certainly improved, but it does remain a challenge.

Okay. And then switching gears over to residential for a moment. I was wondering if you could sort of give us a bit of an update on some of the efforts that have been underway on the renewals, and I guess sort of that discipline around the pricing around renewals in the residential area, sort of where you think you are on that process, and how much room do you think there is for upside on that.

I would describe it as a process. It's really just a increased discipline on our part in terms of approaching renewals and ensuring that we're allocating our labor effectively. It's a very price competitive business. And if on renewal, we believe we're not getting the price that we should, that gives us an adequate margin, we may look to reallocate that labor. And we're being very conservative about it. But what you've seen over the last couple of years and what we've talked about on several occasions is that it served to bring our retention rate down a couple of points to the 93, 94 level, but it's also played a big part in our margin. And Jeremy referenced client accounting, but -- and then 50% being seasonal impact, but a big part of that other 50%, it's not all the client accounting infrastructure. It's allocating that to labor effectively.

[Operator Instructions]. Your next question comes from the line of Michael Smith from RBC Capital Markets.

Just wondering if you could give us a little bit of color on the growth opportunities around fire protection, your pipeline or adding new services in some of your offices, I guess?

Sure. I didn't reference Century in particular in our prepared comments, but a very strong quarter in fire protection, a continued strength there. And a big part of it is driven by our success in adding service revenues, repair service and inspection revenues. And we've done that largely through recruiting and hiring specific talent in our different offices, so that we can introduce that service as a complement to our installation services on the sprinkler and alarm side. We've also had success in winning national accounts and large regional accounts. Particularly since we acquired Century over the last couple of years, it was something that they were starting to work on, and it's really accelerated and it's had a big impact on our organic growth. In terms of acquisitions, working actively with the management team there in the Southeast of the U.S. to target complementary businesses that both expand the geographic footprint, but also add to the service line. And we expect -- and we haven't announced anything in the last couple of quarters, but we expect it will -- we'll close a few tuck-unders this year, so we feel good about it.

Good. And just switching gears. Could you give us an idea or just talk about the growth opportunities in Canada? Is it large? Like is it just too small of a market to -- or there's so much more in the U.S.? Or how does it sort of stack up?

Well, in Canada, we have our franchise operations, CertaPro, California Closets, Paul Davis, Floor Coverings, Pillar To Post. We had strong, strong businesses, College Pro, of course. And we're also the leader in residential property management through FirstService residential. We think we have great opportunities in Canada. And we're actively growing across the board. We -- I mentioned the acquisition of our first company-owned Paul Davis operation in Western Canada, and we expect that -- certainly, we have a target to have a national company-owned Paul Davis operation in this country, and that was our first step towards that effort. So that said, we've gained a lot of opportunity. Did you have any specifics, in particular, in terms of the one or the other brands, Michael?

Yes. So the Paul Davis, so it was in Western Canada, was that Alberta, BC or...

Alberta. It's the largest. It's our largest franchisee in that region. And the strategy is the same, as we've articulated for the U.S., and that is to have a national coverage, so that we can approach Canadian national insurance companies and be their #1 service provider.

And just on the residential, I know you've got a pretty big presence in Toronto and Vancouver. But those markets are growing quite rapidly. Are you -- is it -- your growth there, is it from winning, like basically taking share? Or basically new builds?

It's both. We're also the leader in Calgary. And I would say, in all 3 new developments does augment our organic growth. But first and foremost, our focus is on taking share in existing buildings.

There are no further questions at this time. I turn the call back over to Chief Executive Officer, Mr. Scott Patterson, for final comments. Go ahead, sir.

Thank you, operator. That's all we have on this end. Thank you for joining and we look forward to reporting our second quarter at the end of July.

This concludes today's conference call. You may now disconnect.