Press Releases

  • Monday, November 12, 2007
    Genivar Income Fund Announces Third Quarter 2007 Results

    MONTREAL, Nov. 12 - GENIVAR Income Fund (the "Fund") announced today its financial and operating results (unaudited) for the period from July 1st, to September 30, 2007. This is the sixth reporting period of the Fund since it began its business operations on May 25th, 2006 and the first reporting period where complete comparative information for the previous year is available.Highlights

    • Revenues for the third quarter of 2007 were up 61.1% to $68.5 million compared to $42.5 million for the same period in 2006. Year-to-date revenues were $186.7 million compared to $126.4 million for the same nine-month period in 2006.
    • Net earnings before non-controlling interest were $7.4 million or 38 cents per unit for the quarter and $16.5 million or 87 cents per unit for the nine-month period.
    • EBITDA increased 66.4% from $7.0 million in the third quarter of 2006 to $11.7 million for the same period in 2007.
    • Adjusted Distributable Cash generated in the quarter totalled $9.6 million, of which $4.9 million were distributed to unitholders, representing an adjusted payout ratio of 51.5%.
    • The Fund raised $50.0 million through a public offering of approximately 1.9 million units for gross proceeds of $39.0 million and a private placement to the non-controlling unitholder of approximately 0.5 million units for additional proceeds of $11.0 million.
    • Backlog increased to $201.0 million.

    During the third quarter, we welcomed five new firms who joined our team. We completed the acquisitions of two firms active in the Ontario transportation market segment, National Capital Engineering and Harmer Podolak Engineering Consultants, as well as three municipal infrastructure firms, namely SEG Engineering in Winnipeg, and André Simard et Associés (effective October 1, 2007) and TERRA Experts conseils in Quebec City.

    "This was an active quarter for the Fund with record results, sustained organic growth, the completion of a successful financing and the closing of five acquisitions", said Pierre Shoiry, President and CEO of the GENIVAR Income Fund.

    Conference Call

    The Fund will hold a conference call on Tuesday, November 13, 2007, at 11:00 AM EDT. To participate in the conference call, please dial 1-866-999-9779 and enter the password 150522. An audio play of the call will be archived on the Website at www.genivar.com.

    GENIVAR is a leading Canadian engineering services firm providing private and public sector clients with a full range of professional consulting services through all execution phases of a project, including planning, design, construction and maintenance. Its clients, who are of varying sizes, fall into various market segments, such as building, industrial and power, urban infrastructure, transportation, and environment. GENIVAR is one of the largest engineering services firm in Canada, in terms of the number of employees, with more than 2,200 managers, professionals, technicians and technologists, and support staff, in over 40 offices in Canada and abroad.

    The Fund's financial statements, as well as management's discussion and analysis of the reporting period can be obtained via the GENIVAR website, in the Investor Relations section, at www.genivar.com or at www.sedar.com.

    
        RESULTS OF OPERATIONS
    
                             ----------------------------------------------------
                                          3 months                  9 months
                             ----------------------------------------------------
                                     2007         2006         2007         2006
                             ----------------------------------------------------
                                  FOR THE      FOR THE      FOR THE      FOR THE
                              PERIOD FROM  PERIOD FROM  PERIOD FROM  PERIOD FROM
                                JULY 1 TO    JULY 2 TO JANUARY 1 TO JANUARY 1 TO
                             SEPTEMBER 30 SEPTEMBER 30 SEPTEMBER 30 SEPTEMBER 30
        IN THOUSANDS OF       (UNAUDITED)  (UNAUDITED)  (UNAUDITED)    (COMBINED
        DOLLARS EXCEPT                                               -UNAUDITED)
        PER UNIT DATA                                                        (1)
        -------------------------------------------------------------------------
        Revenues              $    68,543  $    42,555  $   186,677  $   126,410
          Deduct: Sub-
           consultants and
           other direct
           expenses           $    14,941  $     8,823  $    38,048  $    35,164
        Net revenues          $    53,602  $    33,732  $   148,629  $    91,246
          Direct project
           costs              $    27,369  $    17,536  $    76,742  $    45,923
        -------------------------------------------------------------------------
        Gross margin          $    26,233  $    16,196  $    71,887  $    45,323
          Marketing,
           general,
           and admi-
           nistrative
           expenses and
           others             $    14,548  $     9,172  $    42,515  $    26,771
        -------------------------------------------------------------------------
        EBITDA                $    11,685  $     7,024  $    29,372  $    18,552
        -------------------------------------------------------------------------
          Interest            $       746  $       245  $     1,493  $       413
          Depreciation of
           property, plant,
           and equipment      $       693  $       512  $     1,969  $     1,333
          Amortization of
           intangible
           assets             $     2,667  $     2,305  $     7,626  $     4,922
          Earnings
           before
           income taxes
           and non-
           controlling
           interest           $     7,579  $     3,962  $    18,284  $    11,884
          Income tax
           expense
           (recovery)(2)(4)   $       161  $      (105) $     1,789            -
        -------------------------------------------------------------------------
          Earnings before
           non-controlling
           interest           $     7,418  $     4,067  $    16,495            -
          Non-controlling
           interest(2)        $     3,074  $     1,703  $     6,876            -
        -------------------------------------------------------------------------
        Net earnings(2)       $     4,344  $     2,364  $     9,619            -
        Basic net earnings
         per unit             $      0.38  $      0.21  $      0.87            -
          Weighted average
           number of units
           (3)(5)              11,305,396   11,000,000   11,100,382            -
          Diluted net
           earnings per
           unit               $      0.38  $      0.21  $      0.87            -
          Diluted weighted
           average number
           of units (3)(5)     19,347,454   18,927,381   19,066,964            -
        -------------------------------------------------------------------------
    
        (1) This combined financial information is the combination of financial
            results of GENIVAR Engineering Services Business PRE-IPO and
            financial results of the Fund POST-IPO.
    
        (2) Income taxes, non-controlling interest and net earnings have not been
            presented on a comparative basis due to the changes in the capital
            structure of the preceding entities and the Fund in connection with
            the IPO on May 25, 2006.
    
        (3) The basic and diluted weighted average number of units has been
            adjusted to reflect units purchased in the market in Q2 in connection
            with the long-term incentive plan and units issued pursuant to a
            public offering in Q3.
    
        (4) See section of the Management's Discussion and Analysis "Results of
            operations - Income tax expense."
    
        (5) As at November 9, 2007, the number of units is identical to what it
            was as at September 30, 2007.
    
    
    
        SUMMARY OF QUARTERLY RESULTS
        -------------------------------------------------------------------------
                                                          2007
        -------------------------------------------------------------------------
                                      TTM           Q3           Q2           Q1
        -------------------------------------------------------------------------
                          TRAILING TWELVE      FOR THE      FOR THE      FOR THE
                                   MONTHS       PERIOD  PERIOD FROM  PERIOD FROM
                              (UNAUDITED)    FROM JULY   APRIL 1 TO    JANUARY 1
        IN THOUSANDS                              1 TO      JUNE 30  TO MARCH 31
        OF DOLLARS,                          SEPTEMBER  (UNAUDITED)   (UNAUDITED)
        EXCEPT PER                        30(UNAUDITED)
        UNIT DATA
        -------------------------------------------------------------------------
        Results of operations
        -------------------------------------------------------------------------
          Revenues                236,380       68,543  $    63,791  $    54,343
        -------------------------------------------------------------------------
          Net revenues(1)         185,362       53,602  $    50,859  $    44,168
        -------------------------------------------------------------------------
          Gross margin             89,420       26,233  $    24,578  $    21,076
        -------------------------------------------------------------------------
          EBITDA                   36,809       11,685  $     9,597  $     8,090
        -------------------------------------------------------------------------
          Net earnings             12,196        4,344  $     2,603  $     2,672
        -------------------------------------------------------------------------
          Basic and diluted
           net earnings per
           unit                      1.09         0.38  $      0.24  $      0.24
        -------------------------------------------------------------------------
          Weighted average
           number of
           units(2)                         11,305,396   10,992,394   11,000,000
        -------------------------------------------------------------------------
          Diluted weighted
           average number
           of units (2)                     19,347,454   18,920,619   18,927,381
        -------------------------------------------------------------------------
        -------------------------------------------------------------------------
    
         Distributable Cash
        -------------------------------------------------------------------------
        -------------------------------------------------------------------------
    
          Distributable
           Cash(3)(4)
            Standardized           13,374        4,784  $     1,623       ($ 951)
            Adjusted               29,003        9,575  $     6,718  $     6,441
        -------------------------------------------------------------------------
          Distributable Cash,
           per unit (3)(4)
            Standardized      $      0.68  $      0.22  $      0.09      ($ 0.05)
            Adjusted          $      1.47  $      0.45  $      0.35  $      0.34
        -------------------------------------------------------------------------
          Distributions
           declared                19,123        4,933  $     4,730  $     4,730
        -------------------------------------------------------------------------
          Distributions
           declared, per
           unit               $      1.00  $      0.25  $      0.25  $      0,25
        -------------------------------------------------------------------------
          Payout ratio
           Adjusted                  65.9%        51.5%        70.4%        73.4%
        -------------------------------------------------------------------------
    
        -------------------------------------------------------------------------
                                                         2006
        -------------------------------------------------------------------------
    
                                                    Q4           Q3           Q2
                                                          (37 days)
        -------------------------------------------------------------------------
    
                                               FOR THE      FOR THE      FOR THE
                                           PERIOD FROM       PERIOD  PERIOD FROM
        IN THOUSANDS                      OCTOBER 1 TO    FROM JULY    MAY 25 TO
        OF DOLLARS,                        DECEMBER 31         2 TO       JULY 1
        EXCEPT PER                         (UNAUDITED) SEPTEMBER 30  (UNAUDITED)
        UNIT DATA                                       (UNAUDITED)
        -------------------------------------------------------------------------
        Results of operations
        -------------------------------------------------------------------------
          Revenues                         $    49,703  $    42,555  $    17,523
        -------------------------------------------------------------------------
          Net revenues(1)                  $    36,733  $    33,732  $    14,216
        -------------------------------------------------------------------------
          Gross margin                     $    17,533  $    16,196  $     7,176
        -------------------------------------------------------------------------
          EBITDA                           $     7,437  $     7,024  $     3,354
        -------------------------------------------------------------------------
          Net earnings                     $     2,577  $     2,364  $     1,403
        -------------------------------------------------------------------------
          Basic and diluted net earnings
           per unit                        $      0.23  $      0.21  $      0.13
        -------------------------------------------------------------------------
          Weighted average number of
           units(2)                         11,000,000   11,000,000   11,000,000
        -------------------------------------------------------------------------
          Diluted weighted average
           number of units(2)               18,927,381   18,927,381   18,927,381
        -------------------------------------------------------------------------
        -------------------------------------------------------------------------
        Distributable Cash
        -------------------------------------------------------------------------
        -------------------------------------------------------------------------
          Distributable
           Cash(3)(4)
            Standardized                   $     7,918  $     5,682     ($ 1,850)
            Adjusted                       $     6,269  $     6,097  $     3,269
        -------------------------------------------------------------------------
          Distributable
           Cash, per unit (3)(4)
            Standardized                   $      0.42  $      0.30      ($ 0.10)
            Adjusted                       $      0.33  $      0.32  $      0.17
        -------------------------------------------------------------------------
          Distributions
           declared                        $     4,730  $     4,730  $     1,934
        -------------------------------------------------------------------------
          Distributions
           declared, per unit              $      0,25  $      0,25  $      0,10
        -------------------------------------------------------------------------
          Payout ratio
           Adjusted                               75.5%        77.6%        59.2%
        -------------------------------------------------------------------------
    
        (1) Net revenues are defined as Revenues less subconsultants and other
            direct expenses (see Non-GAAP measures at the end of the document).
    
        (2) The basic and diluted weighted average number of units has been
            adjusted to reflect units purchased in the market in Q2 in connection
            with the long-term incentive plan and units issued pursuant to a
            public offering in Q3.
    
        (3) The definition of Distributable Cash has been revised to comply with
            the recommendations provided in CICA's publication "Standardized
            Distributable Cash in Income Trusts and Other Flow-Through
            Entities." See section of the Management's Discussion and Analysis
            "Distributable Cash".
    
        (4) Distributable Cash and Distributable Cash per unit amounts are
            calculated for the combined interest of the Fund's units and Non-
            subordinated Exchangeable LP units and Subordinated LP units, which
            total 21,366,405 as at September 30, 2007 (18,927,381 at the same
            date in 2006). Number of units has not been adjusted to reflect units
            purchased in the market in connection with the long-term incentive
            plan since the distributions on these units continue to be declared
            and paid.
    
    
        DISTRIBUTABLE CASH
    
                                           --------------------------------------
                                                    3 months            9 months
                                           --------------------------------------
                                                  2007         2006         2007
                                           --------------------------------------
                                               FOR THE      FOR THE      FOR THE
                                           PERIOD FROM  PERIOD FROM  PERIOD FROM
        IN THOUSANDS                         JULY 1 TO    JULY 2 TO JANUARY 1 TO
        OF DOLLARS EXCEPT                 SEPTEMBER 30 SEPTEMBER 30 SEPTEMBER 30
        PER UNIT DATA                       (UNAUDITED)  (UNAUDITED)  (UNAUDITED)
        -------------------------------------------------------------------------
        Cash flows from operating          $     6,400  $     6,321  $    12,066
         activities
        Capital expenditures paid             ($ 1,616)      ($ 639)    ($ 6,610)
        Standardized Distributable
         Cash                              $     4,784  $     5,682  $     5,456
          Change in non-cash working
           capital items(1)                $     4,523  $       415  $    15,672
          Purchase of units in the
           market under the
           long-term incentive
           plan                                      -            -       ($ 825)
          Capital expenditures
           paid for non-
           recurring items(2)              $       268            -  $     2,431
        Adjusted Distributable Cash(3)     $     9,575  $     6,097  $    22,734
        Adjusted Distributable Cash,
         per unit (3)                      $      0.45  $      0.32  $      1.06
        Payout ratio
          Adjusted                                51.5%        77.6%        63.3%
        -------------------------------------------------------------------------
        Distributions
          Fund's units distributions       $     2,907  $     2,749  $     8,405
          Class B Non-subordinated
           Exchangeable LP unit
           distributions                   $       844  $       799  $     2,440
          Class C Subordinated
           Exchangeable LP unit
           distributions                   $     1,182  $     1,182  $     3,548
        Aggregate distributions,
         all units(3)                      $     4,933  $     4,730  $    14,393
        Aggregate distributions,
         all units, per unit(3)            $      0.25  $      0.25  $      0.75
        -------------------------------------------------------------------------
    
        (1) Distributions are based on actual historical and estimated future
            performance of the Fund on a full-year basis. Consequently, periodic
            fluctuations in non-cash working capital are not considered when
            evaluating the cash flows available for distribution.
    
        (2) Non-recurring capital expenditures pertain to a construction project
            which had for objective to expand square footage of the main office
            in Quebec City.
    
        (3) Distributable Cash and Distributable Cash per unit amounts are
            calculated for the combined interest of the Fund's units and Non-
            subordinated Exchangeable LP units and Subordinated LP units, which
            total 21,366,405 as at September 30, 2007 (18,927,381 at the same
            date in 2006). Number of units has not been adjusted to reflect units
            purchased in the market in connection with the long-term incentive
            plan since the distributions on these units continue to be declared
            and paid.
    

    NON-GAAP MEASURES

    The Fund uses non-GAAP measures that are used by Canadian open-ended income funds as indicators of financial performance measures under GAAP and may differ from similar computations as reported by other similar entities and, accordingly, may not be comparable. The Fund believes these measures are useful supplemental measures that may assist investors in assessing an investment in unit of the fund.

    Non-GAAP measures used by the fund are net revenues, EBITDA, Distributable Cash, and Payout ratio. In the third quarter, the definitions of Distributable Cash and Payout ratio have been revised to comply with the recommendations provided in CICA's publication "Standardized Distributable Cash in Income Trusts and Other Flow-Through Entities." These measures are defined below.

    Net revenues

    Net revenues are defined as revenues from consulting services less direct costs for subconsultants and other direct expenses that are recoverable directly from our clients. Net revenues are not a measure in accordance with GAAP and do not have standardized meaning prescribed by GAAP. Therefore, net revenues may not be comparable to similar measures presented by other issuers. Investors are cautioned that net revenues should not be construed as an alternative to revenues for the period (as determined in accordance with GAAP), as an indicator of the Fund's performance.

    EBITDA

    EBITDA is defined as earnings before interest, tax, depreciation, and amortization. EBITDA is not an earnings measure in accordance with GAAP and does not have a standardized meaning prescribed by GAAP. Therefore, EBITDA may not be comparable to similar measures presented by other issuers.

    Disbributable cash

    Distributable cash is calculated in accordance with the recommendations provided in CICA's publication "Standardized Distributable Cash in Income Trusts and Other Flow-Through Entities." Standardized Distributable Cash is defined as cash flows from operating activities as reported in the GAAP financial statements, including the effects of changes in non-cash working capital and any operating cash flows provided from or used in discontinued operations, less adjustments for:

    
        (a) total capital expenditures as reported in the GAAP financial
            statements; and
        (b) restrictions on distributions arising from compliance with financial
            covenants restrictive at the date of the calculation of Standardized
            Distributable Cash and limitations arising from the existence of a
            minority interest in a subsidiary.
    

    The Fund also calculated an Adjusted Distributable Cash, which is defined as Standardized Distributable Cash adjusted for items that management believes are appropriate for the determination of levels of distributions.

    Payout ratio

    Standardized payout ratio is defined as aggregate cash distributions divided by standardized distributable cash. Adjusted payout ratio is defined as aggregate cash distributions divided by Adjusted Distributable Cash.

    Pierre Shoiry,
    President and CEO,
    (514) 340-0046, ext. 5104;

    For media inquiries:
    Marlène Casciaro,
    Director of Communications,
    (514) 340-0046, ext. 5184