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FirstService Corporation (NASDAQ:FSV)
Q2 2020 Earnings Call
Jul 23, 2020, 11:00 a.m. ET

Contents:

  • Prepared Remarks
  • Questions and Answers
  • Call Participants

Prepared Remarks:

Operator

Welcome to the Second 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 materially differ from any future results, performance, or achievements contemplated in the forward-looking statements. Additional information concerning factors that could cause 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 July 23, 2020.

I would now like to turn the call over to Chief Executive Officer, Mr. Scott Patterson. Please go ahead, sir.

D. Scott Patterson -- President & Chief Executive Officer

Thank you, Jessie, and welcome everyone to our Q2 earnings call. Thank you for dialing in. Jeremy Rakusin is on the line with me today. We last spoke on April 23. At that time, we were all right in the middle of lockdown. About 85% of North America was under some sort of lockdown or stay-at-home measure, and really there was no clarity around when these measures would be relaxed. We went through a vigorous reforecasting exercise based on what we were experiencing in mid-April to provide some direction and forward guidance with our Q1 report.

Well, much has changed over the last three months. As you saw in our release this morning, we significantly outperformed our expectations and the guidance we provided. There are a number of factors involved, and Jeremy and I will walk you through them.

In terms of agenda this morning, I will start with the summary overview of the results and variances from our forecast. I will then touch on two important highlights from the quarter, and then Jeremy will follow with a closer review of the financial results.

Total revenues for the quarter were up 8% over the prior year. Organic revenue declined by 9% year-over-year, but this was more than offset by acquisition growth, primarily relating to Global Restoration and several tuck-unders over the last 12 months. EBITDA for the quarter increased by 10%, reflecting a 20-basis point increase in margins.

At FirstService Residential, revenues were down 9% versus our forecast of down 10% to 15%. At FirstService Brands, revenues were up 39% versus our forecast of flat to up 15%. Margins at both divisions were materially higher than forecast. The principal reason for the outperformance was that markets in general opened up more quickly than anticipated, which drove revenue opportunities across both divisions.

At FirstSrvice Residential, ancillary revenues proved to be more resilient during the quarter, particularly transfer and disclosure income, which was down less than forecast in April and May, and then spiked in June, and was up year-over-year. Home sales across the U.S. were up significantly in June, and our results reflected the same trend. At FirstService Brands, our residential property service companies, including California Closets, CertaPro Painters, Paul Davis, Flora Coverings International, and Pillar to Post were welcomed into homes more readily than expected. These brands came out early, with clear communication around our in-home safety protocol, which opened many doors for us. Our lead conversion and closed rates increased across all these businesses.

On the bottom line, the aggressive tact we took in mid-March around cost control set us up to reap the benefits of operating leverage on the stronger-than-expected revenues. Performance during the quarter improved sequentially every month, with June results [Technical Issues] across many of our businesses and regions that were near a year ago in terms of revenue. We're seeing a continuation of these strong levels of activity into July and have not yet seen any pullback relating to the surge in new coronavirus cases across many states.

We are extremely pleased with how the quarter played out relative to early expectations. Our teams were aggressive around cost containment and incredibly tenacious about seizing every revenue opportunity that was presented. And we continue to deliver on our service excellence promise across every brand. Our front line teams are performing heroically and differentiating us from our competition. We feel very confident that we will emerge from this pandemic environment in an improved competitive position.

Looking forward, we are cautiously optimistic about the back half of the year. Jeremy will provide some general direction in his comments, but we will refrain from providing any specific guidance for Q3 or the balance of the year. The economic outlook in North America remains very uncertain, and we have some concern that the strength we saw in June across many of our businesses was driven partially by pent-up demand.

Before I hand off to Jeremy, I want to talk about two important highlights from the quarter. The first is the $150 million private placement that we completed with durable capital partners on May 22. We ended Q1 with debt to EBITDA leverage of 2.4 times, which was right in our target comfort range. The equity raise took us down to 1.8 times on a pro forma basis, and gave us confidence that we could withstand anything the pandemic threw at us, while also be aggressive in terms of add-on acquisitions and strategic investment. We have since greenlighted many initiatives that we paused in the early days of the pandemic, and are driving ahead full steam.

An example was the acquisition of Rolyn Companies at the end of the quarter by Global Restoration, the second highlight I want to talk about. Rolyn is a leading commercial and large loss restoration company in the mid-Atlantic region of the U.S. The acquisition is strategically significant for us, and that it expands our geographic reach, enhances our competitive position across a number of important verticals, and brings in some of the top and most experienced restoration professionals in the industry. Rolyn has nine operation centers in the mid-Atlantic, Northeast, and Southeast of the U.S., which complement our footprint and improve our ability to serve national accounts. They bring a diverse client base across healthcare, hospitality, multi-family, education, and assisted living verticals. We've added many new national relationships that we believe we can grow and further penetrate. In particular, Rolyn has built an exceptionally strong healthcare practice. And the company has been an industry leader supporting healthcare companies and other clients throughout the COVID-19 pandemic. This is an important move for us, and we are very excited about welcoming Sam Bergman, Mark Futrovsky, and the entire Rolyn team into the Global and FirstService families.

On that note, I will pass the floor over to Jeremy.

Jeremy Rakusin -- Chief Financial Officer

Thank you, Scott and good morning, everyone. As you just heard from Scott, we reported financial results that significantly exceeded the expectations we laid out for Q2 during our first quarter call. I will get into more of the specifics around this in a minute, but first a summary of the consolidated headlines for the quarter.

Revenues were $622 million and adjusted EBITDA was $71.2 million, up 8% and 10% respectively. Adjusted EPS came in at $0.86, down 23% from last year's second quarter.

Together with our first quarter results, our six months year-to-date consolidated financial performance is as follows: Revenues of $1.26 billion, an increase of 18% over the $1.06 billion last year. Adjusted EBITDA of $115.1 million, representing 22% growth over the $94.2 million last year, with a margin of 9.2%, up from the 8.9% in the prior year period. And adjusted EPS at $1.23, down 15% versus $1.45 per share reported during our same six month period last year.

Our adjustments to operating earnings and its GAAP EPS to calculate our adjusted EBITDA and adjusted EPS respectively have been summarized in this morning's press release, and remain consistent with our approach and disclosure in prior periods.

I'll now summarize our segmented financial highlights for Q2. Starting with our FirstService Residential division, second quarter revenues came in at $338 million, a 9% decrease over the prior year period. This decline came in slightly better than the 10% to 15% range we provided at Q1. Core management revenues were up modestly, but were more than offset by ancillary revenue declines in areas we previously called out. Specifically, amenity management, that is our management of pool, aquatic, restaurant, spa and fitness facilities was down in line with forecast. Other ancillary services, several of which carry a higher margins, such as transfers and disclosures arising from unit resales within our communities, maintenance, construction, and project management moderated less than expected.

EBITDA for the quarter was $37.2 million, a 5% year-over-year decline, with an 11% margin, up 40 basis points from the 10.6% margin in Q2 of last year. This margin expansion was unexpected, as we anticipated a more significant pandemic-driven fall-off in the quarter in those higher margin ancillary services I just referenced. With the proactive and meaningful headcount and cost reductions we took in areas with reduced activity levels, it more than offset the negative impact to our top line, resulting in the improved margins.

When you look at the quarter-over-quarter results for FirstService Residential in the face of the unprecedented pandemic, it further reinforces the essential services nature and resiliency of this business.

Now onto our FirstService Brands division. In the second quarter, we recorded revenues of $283.4 million, a 39% increase over the prior year period, driven by contribution from the large Global Restoration acquisition, and partially offset by a 10% revenue decline in the division on an organic basis, excluding acquisitions. This overall division top line performance well surpassed our expectations of 0% to 15% revenue growth as communicated to you at Q1.

While our restoration and fire protection platforms performed as expected, our home improvement service lines significantly exceeded their Q2 forecasts. At the time of our Q1 results announcement in late April, with 85% of North America under some form of lockdown, our assumptions were that these measures would remain in place for all or most of Q2. The easing of government-mandated restrictions and social distancing measures across many U.S. states occurred much earlier than expected, which allowed our franchise and Company-owned operations to get into homes, complete jobs, and drive increased sales activity.

EBITDA for the Brand segment during the quarter came in at $35.8 million, up 26% year-over-year, and yielding a 12.6% margin lower than the 14% margin in last year's second quarter. The year-over-year margin decline is due to acquisition mix, reflecting the addition of Global's lower margin this quarter to the higher Q2 margin profile for the balance of the division. The current quarter margin, as with the top line performance, significantly exceeded the expectations we provided on our Q1 conference call. The early reopening of many markets blunted our forecast to decline in systemwide sales and revenues within our home improvement brands, and our operators were nimble in reaccelerating their activity levels in markets where governments and homeowners permitted access. This more modest impact to the top line together with pre-emptive and aggressive cost reduction initiatives drove the Brands division to solid profitability in a challenging environment.

Free cash flow was also exceptionally strong during the quarter. Operating cash flow before working capital changes more than doubled to $53 million over the prior year quarter. With increased focus on cash management and working capital, we saw a very strong surge in cash flow after working capital changes to $113 million. For the six months year-to-date, we have delivered $153 million of operating cash flow, up significantly over the prior year period.

We previously also communicated on our Q1 call the intention to trim our capex for the balance of the year. This was reflected in our results with $7 million invested during the second quarter and $22 million year-to-date, thus tracking to our reduced full-year capex estimate of approximately $45 million.

The strong internal cash flow performance helped keep our balance sheet in very good shape throughout the quarter. And then, as Scott highlighted, we further fortified our financial position with $150 million equity private placement, allowing us to pivot from defense to offense as we gained greater confidence from our own financial performance and better visibility around tuck-under target prospects.

We exited the second quarter with our net debt at $400 million, down significantly from over $630 million at Q1. As a result, our leverage, as measured by net debt to EBITDA, is now at 1.5 times, a decline from the 2.4 times level in the first quarter. Our liquidity, reflecting total undrawn availability under our revolver and cash on hand, was $625 million at quarter-end and remains at a record level even after the capital deployed for the Rolyn acquisition post Q2, which Scott earlier described. Maintaining financial flexibility to further pursue our growth objectives is a cornerstone of our business model, and we are as well positioned as ever to drive forward on these opportunities.

We are very pleased with our overall results to date in the face of COVID-19, and we maintain a positive yet cautious stance on the outlook for the back half of the year. There are obviously many uncertainties around the path of the pandemic with numerous possible outcomes. However, if the current macro environment remains largely intact, we believe that for the current full year, we will be down modestly year-over-year on an organic basis on the top line, but with the full year contribution of Global Restoration versus half year in 2019, our revenues are expected to marginally exceed the 2019 reported level. We also anticipate that our consolidated EBITDA margin will be largely in line with prior year.

That now concludes our prepared comments. I would ask the operator to please open the call to questions. Thank you.

Questions and Answers:

Operator

Thank you. [Operator Instructions] Your first question comes from George Doumet with Scotiabank. Your line is open.

George Doumet -- Scotiabank -- Analyst

Yeah, good morning, guys. Congrats on a very resilient quarter.

D. Scott Patterson -- President & Chief Executive Officer

Thanks, George.

George Doumet -- Scotiabank -- Analyst

Scott, I wanted to touch on your comments that you mentioned earlier. You said there's a possibility for some pent-up demand, but you also -- your comments also said that it was a really strong momentum that continued into July. So, can you maybe help us understand maybe where you see that potential for that pent-up demand? Is it the lead orders at California Closets or maybe anything around the commentary there?

D. Scott Patterson -- President & Chief Executive Officer

Well, we improved sequentially April, May, June, and June was particularly strong in terms of leads and book sales. And I think that, while we've seen it continue, I think there is a feeling that it will be tough to sustain through the balance of the year at current levels. We may see it sustained, but with the surge in cases and reading economic reports from other industries in generally, I think we share some of the concern that's out there generally that we might see some pullback in the economy. In addition, we're watching closely the decline in dollar [Phonetic], weak unemployment benefit, and when that might end and whether that's propping up some of the home improvement spend.

George Doumet -- Scotiabank -- Analyst

Okay, great. Last quarter, I believe the number for -- of -- furloughed, sorry, employees around 3,200. Do you guys have that number where we sit today, and as those folks come back to work just kind of wondering, how we should think of the evolution of maybe the margins this year and next?

Jeremy Rakusin -- Chief Financial Officer

Yes, George, I'll take that. Yeah, furloughs reduced hours terminations in aggregate, you're right, over 3,000 at Q1. We've got roughly a third of those back. And incrementally, we see more coming back as activity levels continue to increase. If we see the opening up of a lot of our amenity-related services at FirstService Residential, for example, particularly in areas like the Northeast, where pools and aquatic areas are still remain closed.

As to the margin outlook in conjunction with that, a lot of the cost savings that we realized should remain in place. Some of those costs we're learning through this pandemic to manage with less resources for a given level of revenue than we have before. And so, we think some of those efficiencies and cost reductions will be permanent. Parsing out how much is permanent and how much is going to come back, that's too early to tell, but we think there will be some permanent cost reductions that will be reflected in margins going forward.

George Doumet -- Scotiabank -- Analyst

Okay, great. Just one last one, if I may. Jeremy, on the working capital, it was a really big source of cash halfway through the year. Do you expect that to, I guess, to revert to a typical, I guess, 1% to 2% of revenue drag that we've kind of seen a lot in the last few years?

Jeremy Rakusin -- Chief Financial Officer

Yes. I mean, the two biggest areas of the pickup in the working capital piece of the cash flow statement was focused collection and AR collection, particularly in this environment. And obviously, with a bit slower growth, you're not investing as much on that front and you're more collecting and harvesting off the revenues that have previously been generated.

But also on tax, some of the government stimulus packages on both sides of the border afford us the opportunity to defer taxes, which will be paid in their normal course in the back half of the year. So, I would say Q2 is an anomaly on the working capital pickup, but it did help us with the balance sheet and our financial position.

George Doumet -- Scotiabank -- Analyst

All right, guys. Thanks for your answers and good luck.

Jeremy Rakusin -- Chief Financial Officer

Thank you.

Operator

And your next question comes from Frederic Bastien with Raymond James. Your line is open.

Frederic Bastien -- Raymond James Ltd. -- Analyst

Thank you. Jeremy, you touched on some of the costs that you believe you'll be able to permanently take out of the equation. Can you provide a bit more color on the sort of where is that coming from? Is that corporate level or are you able to squeeze some costs out of every brand and across the organization?

Jeremy Rakusin -- Chief Financial Officer

Yes. I mean, it's areas like marketing, legal, finance, HR, so a lot of those support functions we're just working with leaner costs. But there's going to be a lot less travel, whether it's business development, air travel, a lot more virtual business development. But even executing on work, Cal Closets, as an example, our designers are able to do a lot more virtual consults versus spending time going home-to-home. So, it's just efficient. They're getting a lot more done in a given day, a lot more productive and without the associated travel costs. Those are some of the examples. Even in the ancillary services side and FirstService Residential, again, the teams found ways to optimize the cost structure and I think they're going to be able to generate as much or more revenue with less resources going forward.

D. Scott Patterson -- President & Chief Executive Officer

I would add, I think this situation has enabled all of our businesses to reevaluate and redefine their staffing models. I don't know that there's going to be any particular area that we can pinpoint with accuracy going forward, but this will be a very interesting budgeting season for us as we take a fresh look at how we staff.

Frederic Bastien -- Raymond James Ltd. -- Analyst

Thanks for that. My other question relates to your comment about going from defense to offense. Obviously, we saw that with the Rolyn acquisition. As we look into the second half leading to next year, I mean, how's your appetite right now for acquisition? Do we see you continue the growth at Global and into more restoration businesses or are we going other -- are we going to see you active in other market segments?

D. Scott Patterson -- President & Chief Executive Officer

Well, the appetite is definitely there. And as you heard, we have liquidity, we have the balance sheet. So, we're prepared to be aggressive, but not necessarily more aggressive than we have been over the last several years. But we're not slowing down as a result of the pandemic or pausing in any way. We've restarted all of our significant strategic initiatives. A lot of them have to do or are part of the restoration strategy, the rebranding and the investment in the infrastructure. And then we continue to work on our acquisition pipeline. Again, certainly restoration is part of that, but we have opportunities in really every other platform as well that we're working on.

Frederic Bastien -- Raymond James Ltd. -- Analyst

Thank you. Very impressive quarter. Well done.

D. Scott Patterson -- President & Chief Executive Officer

Thanks, Frederic.

Operator

Your next question comes from Stephen MacLeod with BMO Capital Markets. Your line is open.

Stephen MacLeod -- BMO Capital Markets -- Analyst

Thank you. Good morning, guys.

D. Scott Patterson -- President & Chief Executive Officer

Good morning.

Jeremy Rakusin -- Chief Financial Officer

Good morning, Steve.

Stephen MacLeod -- BMO Capital Markets -- Analyst

Good morning. I just had a couple of questions, specifically around -- just a couple around the outlook. Jeremy, you gave some consolidated color. I just wanted to confirm or just clarify this, does the top line impact include the Rolyn acquisition? And then secondly, with respect to the outlook, are you able to give some sort of broad strokes outlook as to how that second half view or full-year view are supported by the FirstService Residential and FirstService Brands divisions?

Jeremy Rakusin -- Chief Financial Officer

Yes, it does include Rolyn. So, that would be the -- my comments around us being higher versus reported '19 with Global, and they're down on an organic basis, but including Global and it's tuck-unders. That would be in those numbers. It is not too much to say on parsing out the divisions. I mean, I would just say that the back half of the year is largely pretty flat profile on the top line. FirstService Residential flat to slightly down, most likely. And FirstService Brands would be down without the Global contribution, if you add in Global, it would be relatively flat. So, consolidated flat on the back half on the top line. And again, the margins are not going to materially differ, when we finish the year from last year.

Stephen MacLeod -- BMO Capital Markets -- Analyst

Okay. Okay, that's helpful. Thank you. And then I just wanted to talk -- just clarify kind of the outlook on the FirstService Brands division. Look, did I understand correctly that you did see momentum continue into July, but then, you're sort of feeling a bit more cautious from kind of July onwards. Is that the way to think about how you're expecting the back half of the year in the FirstService Brands division?

D. Scott Patterson -- President & Chief Executive Officer

Well, we saw -- specifically speaking about the home improvement brands, we saw strong June, strong activity in July, but recognize that June was still down year-over-year, just significantly better than April and better than expectation. So, if it -- if we sustain at these levels, it's still down year-over-year on the home improvement side and in restoration and fire part of that division also.

Stephen MacLeod -- BMO Capital Markets -- Analyst

Right, OK. And that brings on to my final question. On restoration and fire, I think you cited that the trends were in line with what you would have expected for the broader Brands division in Q2. But did you see any impact around like deep cleaning or sanitation on the Paul Davis or Global side?

D. Scott Patterson -- President & Chief Executive Officer

Yeah, we did. We did -- both platforms benefited from the COVID work. Global, maybe I can start, they are generally in line with expectation. As you suggest, it was up modestly over the first quarter. And interestingly, it was up organically over the prior year, a period when we didn't own it. But commercial property claims, we believe were down at least 20% in North America, in part due to COVID, in part due to weather. And so, for Global to show growth year-over-year, is something we were very pleased about. And part of the reason is the COVID-related work. It's thousands of different discrete jobs that we performed. They tend to be smaller jobs, lower revenue, but it did fill that gap for us and enabled us to show some growth year-over-year or otherwise we might have been down. We have a strong hospitality practice at Global and that was down materially because of COVID. So, it definitely benefited, and it also importantly opened up doors for us and enabled us to engage with new clients that we have since leveraged into national accounts and mitigation work.

Paul Davis, similarly, down only slightly from prior year. We expected it to be down more dramatically due to shutdowns and inability to access homes. But it, as we've discussed, the markets rebounded. Paul Davis was able to get into homes and perform work. And then the COVID definitely helped it claw its way back to near year ago. So, it's certainly been part of the quarter for us.

And it -- and on the FirstService Residential side, we're obviously doing janitorial as part of that service offering. So the protocols have all changed and we're obviously performing COVID cleaning for our communities. It doesn't drive top line revenue, but it's certainly part of their service offering now.

Stephen MacLeod -- BMO Capital Markets -- Analyst

Okay. Okay, that's great. And maybe just one more, if I could. With respect to Rolyn, you talked a lot about the global sanitation work. Can you talk a bit about, I know you didn't own it for -- in the quarter, but do you have any insight or any data you can provide around how Rolyn has done with their healthcare exposure?

D. Scott Patterson -- President & Chief Executive Officer

Similar to Global. They otherwise would have been perhaps down year-over-year, but the COVID gave it a real boost, probably more so with Rolyn on a pro rata basis than Global.

Stephen MacLeod -- BMO Capital Markets -- Analyst

That's very helpful. Thanks guys and congratulations on the quarter.

D. Scott Patterson -- President & Chief Executive Officer

Thanks, Steve.

Operator

You next question comes from Stephen Sheldon with William Blair. Your line is open.

Stephen Sheldon -- William Blair & Co. -- Analyst

Hi guys. Thanks. With some economies reopening and then shutting back down, wanted to ask how it impacted community plans for some of the amenities you operate in the Residential segment like pools, gyms, and spas. Is there any way you can frame roughly what percentage are open now? And how do you expect trends to play out over the rest of the year with the visibility that you have at this point?

D. Scott Patterson -- President & Chief Executive Officer

Yeah. Stephen, I can't give you a percentage accurately. I can sort of talk regionally. I mean, the amenity spaces are still shut down here in Ontario and in the Northeast, particularly New York City, and in a number of other pockets and jurisdictions around North America. But otherwise, they are open and operating. And I think our expectation at this point is that they will stay open. The safety protocols may change in terms of utilization of the amenities, the capacity restrictions may change. But we have not seen any rollback of the amenities at this point. I think it -- once they open within the community, it might be tough unless it's legislated. But that hasn't happened in yet. I don't know [Speech Overlap].

Stephen Sheldon -- William Blair & Co. -- Analyst

Got it. That's helpful.

D. Scott Patterson -- President & Chief Executive Officer

Yeah, OK.

Stephen Sheldon -- William Blair & Co. -- Analyst

Yeah, that's perfect. And then wanted to ask about the new contract side for Residential. Any signs of activity there could pick back up again like it did in late 2018 and early 2019 or most property -- or owners kind of remaining in maintenance mode and hesitant to switch providers right now? I guess that that's also a boost to retention, but just curious about the new contract win [Phonetic].

D. Scott Patterson -- President & Chief Executive Officer

Yeah. We had thought that the -- that our sales would decline in the quarter, and it did. The boards of HOAs and condos today are under incredible pressure in this environment. Just trying -- resident alignment around safety protocol and rules within the community, whether they're too stringent or not stringent enough, it's -- they are under pressure and they are generally not focused on changing out management company. So it's been hard to get attention, but we do -- we're staying on it and we do expect improved sales balance of the year. It's our hope.

Stephen Sheldon -- William Blair & Co. -- Analyst

Great. Thanks, guys.

Jeremy Rakusin -- Chief Financial Officer

Thanks.

Operator

Your next question comes from Stephanie Price with CIBC. Your line is open.

Stephanie Price -- CIBC World Markets -- Analyst

Good morning.

D. Scott Patterson -- President & Chief Executive Officer

Hi, Stephanie.

Jeremy Rakusin -- Chief Financial Officer

Good morning, Stephanie.

Stephanie Price -- CIBC World Markets -- Analyst

I wanted to ask maybe that amenity question just little more broadly. And just wondering what you've seen in areas that have seen COVID spikes across both divisions and what the environment has been like post Q2.

D. Scott Patterson -- President & Chief Executive Officer

It's -- those amenities have remained open, Stephanie, and it's -- they are in a very, very important aspect of the community. And so there was pressure within really all the communities to open amenities as soon as possible. And then residents can make their own decision around whether they want to use them or not. But again, we haven't seen any pullback and aren't aware of any changes in terms of capacity restrictions or even utilization, whether they are less active than they were. We just haven't seen any change yet.

Stephanie Price -- CIBC World Markets -- Analyst

Okay. And then -- what about on the Brands side in terms of areas that are seeing COVID spikes. Have you seen any change in activity there?

D. Scott Patterson -- President & Chief Executive Officer

We get leads and metrics every day and it's holding steady.

Stephanie Price -- CIBC World Markets -- Analyst

Okay, great. And then in your prepared remarks, you mentioned the possibility of market share gains for the year. Just wondering if you can talk a bit about the competitive environment and where you're seeing the possibility for these types of gains?

D. Scott Patterson -- President & Chief Executive Officer

I don't have -- certainly, we don't have any hard data on whether we're gaining share. But I do know that we are performing. And I think we're positioning ourselves very well to gain more share. I mean -- so I just think that we are delivering on our promise. I'm very proud of the way we're delivering on our promise. And I'm not sure our competition across the board are delivering in the same way. So it's my hypothesis, Stephanie, more than anything.

Stephanie Price -- CIBC World Markets -- Analyst

Fair enough. All right. Well, the results this quarter were definitely above expectation. So thank you very much.

D. Scott Patterson -- President & Chief Executive Officer

Thanks.

Operator

Your next question comes from Daryl Young with TD Securities. Your line is open.

Daryl Young -- TD Securities -- Analyst

Good morning, guys. Just a couple of quick ones from me. On the Residential side, has there been any increase in opportunities for M&A as a result of some of the other smaller residential providers maybe struggling through this environment?

D. Scott Patterson -- President & Chief Executive Officer

We have not seen it, Daryl. It's not yet and I'm not sure we will honestly. This is a recurring revenue model and it is for all our competitors. So, I think they'll be fine.

Daryl Young -- TD Securities -- Analyst

Okay. And then just in terms of storm activity, is it correct that in 2019, basically restoration had almost zero benefit from storm activity?

D. Scott Patterson -- President & Chief Executive Officer

Early in the year, hangover from fourth quarter of '18, we had some, but year-to-date in '20, almost nil.

Daryl Young -- TD Securities -- Analyst

Okay. And as we -- so as we head into the back half of the year then, that could potentially provide some upside to the outlook as well, if everything lines up on that front?

D. Scott Patterson -- President & Chief Executive Officer

Yes, definitely.

Daryl Young -- TD Securities -- Analyst

And just one last one. So would Rolyn, given their niche focus on healthcare, whatnot, would they still have the same benefits from storm activity as the Global does?

D. Scott Patterson -- President & Chief Executive Officer

They would, because they have national accounts and relationships. So, if a storm were to impact any of their customers, then we will benefit.

Daryl Young -- TD Securities -- Analyst

Okay, great. Thanks very much, guys.

D. Scott Patterson -- President & Chief Executive Officer

Thank you.

Operator

Your next question comes from Marc Riddick with Sidoti. Your line is open.

Marc Riddick -- Sidoti & Company, LLC -- Analyst

Hi, good morning.

D. Scott Patterson -- President & Chief Executive Officer

Good morning, Marc.

Jeremy Rakusin -- Chief Financial Officer

Good morning.

Marc Riddick -- Sidoti & Company, LLC -- Analyst

I wanted to just go over, if you could talk a little bit about the evolution of the investment plans. As we are ending last year going into this year, there was the announced plans of investing behind Global and some other initiatives and some IT spending, what have you. And then that got postponed obviously -- well, at least some of it did. I was wondering if you could talk about now. It sounds as though you're going to be reaccelerating that or -- and then putting that investment to work going forward. I was wondering if you could talk about how -- maybe what those investments are and how that's evolved from maybe the way you might have been at the end of last year. As far as dollar amount, is it different? Is the scope and scale different? Or is it kind of similar to what you already had planned and now everything just kind of shifted to the right for a couple of quarters?

D. Scott Patterson -- President & Chief Executive Officer

It's everything we had planned, but it's been stretched out over a longer period of time. We have continued to nourish these initiatives along March and April, May. And then when we started to see our results come in, when we did the private placement, it gave us confidence to start to accelerate them again. So the rebranding for one will -- is now scheduled for the first quarter of 2021. And -- but we are continuing the work on the national infrastructure and the systems that we need to support that unified brand, sales, CRM, HR, enterprisewide platform, consolidated financial system, that sort of thing, which will -- a lot of that would have taken place in '20 now, it's all being sort of over the next 12 months to 18 months, I would say, but the dollars are the same.

Marc Riddick -- Sidoti & Company, LLC -- Analyst

Okay, that makes sense. I appreciate that. Thank you. And then the last thing for me is, I was wondering if you could talk about pricing dynamic in both Residential and Brands, if there was anything notable or any changes or if it's been steady as far as the general pricing dynamic that you're seeing. Thank you.

D. Scott Patterson -- President & Chief Executive Officer

I think the pricing has been steady. We are looking forward to renewals at FirstService Residential and budgets for our communities at FirstService Residential. And whether there will be a heightened sensitivity around pricing in this environment, if that's even possible, because that is a -- is and always has been a very price-sensitive business. But I would say we haven't seen anything yet.

Marc Riddick -- Sidoti & Company, LLC -- Analyst

Okay, great. Thank you very much.

D. Scott Patterson -- President & Chief Executive Officer

Thanks, Marc.

Operator

Your next question comes from Matt Logan with RBC. Your line is open.

Matt Logan -- RBC Capital Markets -- Analyst

Thank you and good morning.

D. Scott Patterson -- President & Chief Executive Officer

Good morning, Matt.

Jeremy Rakusin -- Chief Financial Officer

Good morning.

Matt Logan -- RBC Capital Markets -- Analyst

Following up on some of your sales store, same-store sales figures within the Brands division. Can you talk about your non-restoration brands such as Century Fire, Cal Closets and CertaPro and maybe just give us a sense for how those are performing?

D. Scott Patterson -- President & Chief Executive Officer

The Century was up year-over-year modestly for the quarter and it's primarily relating to its installation business, which is largely tied to new construction. They -- early on in the quarter, there were construction sites that were shut down, but only for a very short time. And so, they entered the quarter with a strong backlog and we're able to generate solid revenues during the period and the backlog remained solid. But I think we generally expected that. So they were -- might have been a bit better than our expectation.

And the other part of the business is the service and repair business, which was down and is down and we expect to slowly claw its way back to year-over-year over the balance of the year.

And the home improvement brands, rather than slice and dice between Cal Closets and Certa, because they're all very similar, as a group, they were down 20% for the quarter. We expected them to be down much more significantly, but big improvement as the quarter went on, as I said earlier.

Jeremy, I don't know if you have anything to add to that.

Jeremy Rakusin -- Chief Financial Officer

No. That's exactly right, Scott. 20% down versus more than 50% to 60% expectation. So that's really where the pickup was and fire as you characterize it, the two segments performing.

Matt Logan -- RBC Capital Markets -- Analyst

And following up on some of the questions with regards to storm activity. Could you help us frame the potential upside from a normalization and weather patterns? When we look at your H2 guidance, A, would that be included? And if we looked at revenue from restoration over the past 12 months, what would that figure be, both on an actual basis and on a normalized basis?

D. Scott Patterson -- President & Chief Executive Officer

Jeremy, want to leave that to you.

Jeremy Rakusin -- Chief Financial Officer

Yeah. So, Matt, first question in terms of the guidance, what I said earlier in my prepared comments, we wouldn't expect any significant degree of storm activity in those numbers. Both of those are hard to forecast. But typically, as we've said before, if we get a normal level of activity, again, we did not see it in 2019 and it normally plays out in the back half of the year, high-teens contribution from storm activity. If you look at the last five years to 10 years, high-teens with it weighted a bit more to the back-end of the year. In the first half of the year, in a normal year, we would normally see potentially 10% from storm or cat-related activity contributing. This year, it's pretty well zero.

What was the other? Did I answer all of your pieces or is there another component I missed, Matt?

Matt Logan -- RBC Capital Markets -- Analyst

That helps. Jeremy, appreciate that. But in terms of the high-teens contribution, what percentage would that be out of, would that we out of Restoration or the total piece of revenue?

Jeremy Rakusin -- Chief Financial Officer

That would be out of Global Restoration's numbers.

Matt Logan -- RBC Capital Markets -- Analyst

Out of Global Restoration. So, what percentage did Global represent over the last 12 months?

Jeremy Rakusin -- Chief Financial Officer

I mean, when [Phonetic] we bought them, they had $400 million plus of revenues, they've done roughly that.

Matt Logan -- RBC Capital Markets -- Analyst

Okay. That certainly helps in terms of framing the potential upside. So, I'll leave it there. I appreciate the color.

Jeremy Rakusin -- Chief Financial Officer

Yep.

Operator

There are no further questions at this time.

D. Scott Patterson -- President & Chief Executive Officer

Thank you, Jessie, and thank you everyone for joining. Once again, we're very pleased with the quarter. Extremely proud of our teams and how they've executed. We look forward to communicating next in October around Q3. Thank you.

Operator

[Operator Closing Remarks]

Duration: 52 minutes

Call participants:

D. Scott Patterson -- President & Chief Executive Officer

Jeremy Rakusin -- Chief Financial Officer

George Doumet -- Scotiabank -- Analyst

Frederic Bastien -- Raymond James Ltd. -- Analyst

Stephen MacLeod -- BMO Capital Markets -- Analyst

Stephen Sheldon -- William Blair & Co. -- Analyst

Stephanie Price -- CIBC World Markets -- Analyst

Daryl Young -- TD Securities -- Analyst

Marc Riddick -- Sidoti & Company, LLC -- Analyst

Matt Logan -- RBC Capital Markets -- Analyst

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