Press Releases

  • Saturday, August 11, 2007
    GENIVAR Income Fund concludes the second quarter with strong financial performance

    MONTREAL, Aug. 10 - GENIVAR Income Fund ("The Fund") announced, today, its interim consolidated financial and operating results (unaudited) for the period from April 1 to June 30, 2007. This is the fifth reporting period of the Fund since it commenced business operations on May 25, 2006 and the fourth complete consecutive quarters for the period from July 2, 2006 to June 30, 2007. However, for this quarter, the comparative information provided in the Fund's interim consolidated statements is for the 37-day period from May 25 to July 1st, 2006. In order to provide investors with a meaningful assessment of its performance, we have included selected financial information of the Fund and its predecessor company, GENIVAR Inc. (engineering consulting services company), for the three months ended July 1, 2006.Highlights

    • Revenues for the second quarter 2007 were $63.8 million compared to $47.5 million for the same period in 2006.
    • Net revenues, in the second quarter of 2007, were $50.9 million, up 68.5% from $30.2 million for the same period in 2006. Strong organic growth accounted for $9.5 million of this increase.
    • Net earnings before non-controlling interest were $4.5 million or 24 cents per unit.
    • EBITDA increased 68.3% from $5.7 million in the second quarter of 2006 to $9.6 million for the same period in 2007.
    • Distributable cash generated before a non-recurring capital expenditure totalled $6.8 million. Distributions to unit holders amounted to $4.7 million, representing a payout ratio of 69.5%.
    • Backlog increased to $176.7 million.
    • The Fund completed the integration of Nove Environment and had 2,052 employees as of June 30, 2007.

    Net earnings before non-controlling interest include the accounting of a provision for future income taxes of $1.2 million or 6 cents per unit, as a cumulative tax expense. This is following the adoption by the Federal government on June 22, 2007 of legislation to implement taxes for publicly traded income trusts from 2011. Management does not expect a provision of this magnitude in the next quarters, unless important acquisitions or capital expenditures.

    "The Fund continued its momentum and maintained its sequential quarterly revenue and earnings growth since its listing on the Toronto Stock Exchange," said Pierre Shoiry, President and CEO of the GENIVAR Income Fund.

    The Fund has now reported four full successive quarterly periods and trailing twelve-month revenues, net revenues and EBITDA are respectively $210.4 million, $165.5 million and $32.1 million for the period from July 2, 2006 to June 30, 2007. Net earnings during this period were 92 cents per unit.

    "We are pleased with the cross-selling opportunities that our recent acquisitions have provided, especially in mining and renewable energy sectors. We also continued to demonstrate the value of our services in the development of winning design-build and public-private partnership proposals," concluded Shoiry.

    Recent awards include:

    • GENIVAR has been awarded design, architectural, structural, mechanical and electrical engineering services for a 7,000-seat entertainment and sports centre in Abbottsford, BC.
    • Infras-Quebec A25 consortium, which includes GENIVAR among its members, has been chosen by the Quebec government for a public-private partnership project estimated at $400.0 million, to complete the highway 25, along with a bridge, in North-eastern Montreal.
    • Canadian Royalties Inc. awarded GENIVAR with the detailed engineering work for the mineral processing facility and the main and secondary power generating facilities for the Nunavik Nickel project.
    • GENIVAR will act as the owner's engineer for the Skukum Creek Project definitive feasibility study in Yukon Territory of Canada, for Tagish Lake Gold Corp.
    • GENIVAR has been selected by Finavera Renewables Inc. to lead the engineering development of four wind projects in British Columbia totalling 366 MW, as well as the 75-MW Ghost Pine wind project in Alberta.

    Subsequent to June 30, 2007, the Fund announced the closing of three acquisitions: Ottawa-based National Capital Engineering (NCE) and Harmer Podolak Engineering Consultants, as well as Winnipeg-based SEG Engineering. NCE and Harmer Podolak Engineering Consultants specialise in transportation planning and design and, bridge and civil infrastructure design respectively, while SEG Engineering, specialises in municipal infrastructure. These acquisitions add 80 employees and about $9.0 million in annual revenue to the Fund.

    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 number of employees, with more than 2,000 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 this 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
                                                      ---------------------------
                                                              2007          2006
                                                      ---------------------------
                                                                         FOR THE
                                                                     PERIOD FROM
                                                           FOR THE    APRIL 1 TO
                                                       PERIOD FROM        JULY 1
                                                        APRIL 1 TO     (COMBINED-
        IN THOUSANDS OF DOLLARS,                           JUNE 30     UNAUDITED)
         EXCEPT PER UNIT DATA                           (UNAUDITED)           (1)
        -------------------------------------------------------------------------
        Revenues                                       $    63,791   $    47,548
        Deduct: Subconsultants and other direct
         expenses                                      $    12,932   $    17,371
        -------------------------------------------------------------------------
        Net revenues                                   $    50,859   $    30,177
        Direct project costs                           $    26,281   $    15,298
        -------------------------------------------------------------------------
        Gross margin                                   $    24,578   $    14,879
        Marketing, general, and administrative
         expenses and others                           $    14,981   $     9,176
        -------------------------------------------------------------------------
        EBITDA                                         $     9,597   $     5,703
        -------------------------------------------------------------------------
        Interest                                       $       452   $        50
        Depreciation of property, plant,
         and equipment                                 $       677   $       440
        Amortization of intangible assets              $     2,501   $     1,376
        -------------------------------------------------------------------------
        Earnings before income taxes and
         non-controlling interest                      $     5,967   $     3,837
        Income tax expense (recovery)(3)(5)            $     1,487             -
        -------------------------------------------------------------------------
        Earnings before non-controlling interest       $     4,480             -
        Non-controlling interest(3)                    $     1,877             -
        -------------------------------------------------------------------------
        Net earnings(3)                                $     2,603             -
    
        Basic net earnings per unit                    $      0.24             -
        Weighted average number of units(4)(6)          10,992,394             -
        Diluted net earnings per unit                  $      0.24             -
        Diluted weighted average number of
         units (4)(6)                                   18,920,619             -
        -------------------------------------------------------------------------
    
    
        RESULTS OF OPERATIONS
        ---------------------
    
    
                                                      ---------------------------
                                                                   2006
                                                      ---------------------------
                                                                         PRE-IPO
                                                          POST-IPO    FOR THE 54
                                                        FOR THE 37     DAYS FROM
                                                         DAYS FROM    APRIL 1 TO
                                                         MAY 25 TO        MAY 24
        IN THOUSANDS OF DOLLARS,                            JULY 1    (UNAUDITED)
         EXCEPT PER UNIT DATA                           (UNAUDITED)           (2)
        -------------------------------------------------------------------------
        Revenues                                       $    17,523   $    30,025
        Deduct: Subconsultants and other direct
         expenses                                      $     3,307   $    14,064
        -------------------------------------------------------------------------
        Net revenues                                   $    14,216   $    15,961
        Direct project costs                           $     7,040   $     8,258
        -------------------------------------------------------------------------
        Gross margin                                   $     7,176   $     7,703
        Marketing, general, and administrative
         expenses and others                           $     3,822   $     5,354
        -------------------------------------------------------------------------
        EBITDA                                         $     3,354   $     2,349
        -------------------------------------------------------------------------
        Interest                                       $        35   $        15
        Depreciation of property, plant,
         and equipment                                 $       199   $       241
        Amortization of intangible assets              $       956   $       420
        -------------------------------------------------------------------------
        Earnings before income taxes and
         non-controlling interest                      $     2,164   $     1,673
        Income tax expense (recovery)(3)(5)            $      (250)            -
        -------------------------------------------------------------------------
        Earnings before non-controlling interest       $     2,414             -
        Non-controlling interest(3)                    $     1,011             -
        -------------------------------------------------------------------------
        Net earnings(3)                                $     1,403             -
    
        Basic net earnings per unit                    $      0.13             -
        Weighted average number of units(4)(6)          11,000,000             -
        Diluted net earnings per unit                  $      0.13             -
        Diluted weighted average number of
         units (4)(6)                                   18,927,381             -
        -------------------------------------------------------------------------
    
    
        RESULTS OF OPERATIONS
        ---------------------
                                                      ---------------------------
                                                                 6 months
        -------------------------------------------------------------------------
                                                              2007          2006
        -------------------------------------------------------------------------
                                                                         FOR THE
                                                                     PERIOD FROM
                                                           FOR THE     JANUARY 1
                                                       PERIOD FROM     TO JULY 1
                                                         JANUARY 1     (COMBINED-
        IN THOUSANDS OF DOLLARS,                        TO JUNE 30     UNAUDITED)
        EXCEPT PER UNIT DATA                            (UNAUDITED)           (1)
        -------------------------------------------------------------------------
        Revenues                                       $   118,134   $    83,855
        Deduct: Subconsultants and other direct
         expenses                                      $    23,107   $    26,342
        -------------------------------------------------------------------------
        Net revenues                                   $    95,027   $    57,513
        Direct project costs                           $    49,373   $    28,386
        -------------------------------------------------------------------------
        Gross margin                                   $    45,654   $    29,127
        Marketing, general, and administrative
         expenses and others                           $    27,967   $    17,600
        -------------------------------------------------------------------------
        EBITDA                                         $    17,687   $    11,527
        -------------------------------------------------------------------------
        Interest                                       $       747   $       167
        Depreciation of property, plant,
         and equipment                                 $     1,276   $       821
        Amortization of intangible assets              $     4,959   $     2,617
        -------------------------------------------------------------------------
        Earnings before income taxes and
         non-controlling interest                      $    10,705   $     7,922
        Income tax expense (recovery)(3)(5)            $     1,628             -
        -------------------------------------------------------------------------
        Earnings before non-controlling interest       $     9,077             -
        Non-controlling interest(3)                    $     3,802             -
        -------------------------------------------------------------------------
        Net earnings(3)                                $     5,275             -
    
        Basic net earnings per unit                    $      0.48             -
        Weighted average number of units(4)(6)          10,996,176             -
        Diluted net earnings per unit                  $      0.48             -
        Diluted weighted average number of
         units (4)(6)                                   18,923,982             -
        -------------------------------------------------------------------------
        (1) These 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) This financial information was carved out from GENIVAR Engineering
            Services Business regrouping all of the engineering activities of
            GENIVAR inc., the Non-controlling Unitholder.
        (3) 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.
        (4) Basic and diluted weighted average number of units have been adjusted
            to reflect units purchased in the market in connection with the long-
            term incentive plan.
        (5) See section "Results of operations - Income tax expense".
        (6) As at August 10, 2007, the number of units is identical to what it
            was as at June 30, 2007.
    
    
        SUMMARY OF QUARTERLY RESULTS
        ----------------------------
                                                      ---------------------------
                                                              2007
                                         ----------------------------------------
                                                 TTM            Q2            Q1
                                         ----------------------------------------
                                                           FOR THE       FOR THE
                                            TRAILING   PERIOD FROM   PERIOD FROM
                                              TWELVE    APRIL 1 TO     JANUARY 1
        IN THOUSANDS OF DOLLARS,              MONTHS       JUNE 30   TO MARCH 31
         EXCEPT PER UNIT DATA             (UNAUDITED)   (UNAUDITED)   (UNAUDITED)
        -------------------------------------------------------------------------
        Results of operations
        -------------------------------------------------------------------------
        Revenues                         $   210,392   $    63,791   $    54,343
        -------------------------------------------------------------------------
        Net revenues(1)                  $   165,492   $    50,859   $    44,168
        -------------------------------------------------------------------------
        Gross margin                     $    79,383   $    24,578   $    21,076
        -------------------------------------------------------------------------
        EBITDA                           $    32,148   $     9,597   $     8,090
        -------------------------------------------------------------------------
        Net earnings                     $    10,216   $     2,603   $     2,672
        -------------------------------------------------------------------------
        Basic and diluted net
         earnings per unit               $      0.92   $      0.24   $      0.24
        -------------------------------------------------------------------------
        Weighted average number
         of units(2)                                    10,992,394    11,000,000
        -------------------------------------------------------------------------
        Diluted weighted average
         number of units(2)                             18,920,619    18,927,381
        -------------------------------------------------------------------------
    
    
        SUMMARY OF QUARTERLY RESULTS
        ----------------------------
                                       ------------------------------------------
                                                              2006
                                       ------------------------------------------
                                                  Q4            Q3            Q2
                                       ------------------------------------------
                                             FOR THE       FOR THE       FOR THE
                                         PERIOD FROM   PERIOD FROM   PERIOD FROM
                                        OCTOBER 1 TO     JULY 2 TO     MAY 25 TO
        IN THOUSANDS OF DOLLARS,         DECEMBER 31  SEPTEMBER 30        JULY 1
        EXCEPT PER UNIT DATA              (UNAUDITED)   (UNAUDITED)   (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
        -------------------------------------------------------------------------
        (1) Net revenues are defined as Revenues less subconsultants and other
            direct expenses.
        (2) Basic and diluted weighted average number of units have been adjusted
            to reflect units purchased in the market in connection with the long-
            term incentive plan.
    
    
        DISTRIBUTABLE CASH
        ------------------
    
                                   ------------------               -------------
                                            3 months                    6 months
                                   ----------------------------------------------
                                                2007          2006          2007
                                   ----------------------------------------------
                                                          POST-IPO
                                                        FOR THE 37       FOR THE
                                      FOR THE PERIOD     DAYS FROM   PERIOD FROM
                                        FROM APRIL 1     MAY 25 TO  JANUARY 1 TO
         IN THOUSANDS OF DOLLARS,         TO JUNE 30        JULY 1       JUNE 30
          EXCEPT PER UNIT DATA            (UNAUDITED)   (UNAUDITED)   (UNAUDITED)
        -------------------------------------------------------------------------
        Cash flows
        Cash flows from
         operating activities                $ 4,012      ($ 1,821)      $ 5,666
        Change in non-cash
         working capital items               $ 5,014       $ 5,119      $ 11,149
        Current income tax expense             $ 188          $ 21         $ 263
        Income taxes recovered (paid)         ($ 217)         $ 81        ($ 267)
        Capital expenditures paid           ($ 1,483)        ($ 29)     ($ 2,831)
        Capital expenditures paid for
         non-recurring items(2)               ($ 906)            -      ($ 1,714)
        Interest unpaid                        $ 114             -         $ 234
        Purchase of units in the
         market under the
         long-term incentive plan             ($ 825)            -        ($ 825)
        -------------------------------------------------------------------------
        Distributable cash(1)                $ 5,897      $  3,371      $ 11,675
    
        Distributable cash, per unit(1)     $ 0.3116      $ 0.1781      $ 0.6168
    
        Actual payout ratio                     80.2%         57.4%         81.0%
    
        Actual payout ratio adjusted
         for non-recurring items(2)             69.5%         57.4%         70.7%
        -------------------------------------------------------------------------
        Fund's units distributions           $ 2,749       $ 1,124       $ 5,498
        Class B Non-subordinated
         Exchangeable LP unit distributions    $ 799         $ 326       $ 1,598
        Class C Subordinated
         Exchangeable LP unit distributions  $ 1,182         $ 484       $ 2,364
        -------------------------------------------------------------------------
        Aggregate distributions,
         all units(1)                        $ 4,730       $ 1,934       $ 9,460
        Aggregate distributions,
         all units, per unit(1)             $ 0.2500      $ 0.1022      $ 0.5000
        -------------------------------------------------------------------------
        Distributable cash(1)                $ 5,897       $ 3,371      $ 11,675
    
        Capital expenditures paid            $ 1,483         ($ 29)      $ 2,831
        Capital expenditures paid for
         non-recurring items(2)                $ 906             -       $ 1,714
        Purchase of units in the market
         under the long-term incentive plan    $ 825             -         $ 825
        Compensation costs under the
         long-term incentive plan              ($ 69)            -        ($ 138)
        Interest paid                          $ 338         ($ 35)        $ 513
        Income taxes recovered (paid)          $ 217          $ 81         $ 267
        -------------------------------------------------------------------------
        EBITDA                               $ 9,597       $ 3,354      $ 17,687
        -------------------------------------------------------------------------
        (1) 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 18,927,381. 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.
        (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, net of the proceeds from the disposal of a second
            building of $449.
    
    

    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 units of the Fund.

    Non-GAAP measures used by the Fund are net revenues, EBITDA, distributable cash and payout ratio. 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.

    Distributable cash

    Distributable cash is defined as cash flows from operating activities adjusted for change in non-cash working capital items, income taxes paid, capital expenditures paid (net of the proceeds from the disposal of capital assets), interest unpaid and purchase of units in the market under the long-term incentive plan. Distributable cash does not have standardized meaning prescribed by GAAP, but is a measure generally used by Canadian open-ended income funds as an indicator of financial performance. The Fund's method of calculating distributable cash may differ from similar computations as reported by other similar entities and, accordingly, may not be comparable to distributable cash as reported by such entities.

    Payout ratio

    Payout ratio is defined as aggregate distributions divided by distributable cash.

    Pierre Shoiry,
    President and CEO,
    GENIVAR Income Fund,
    (514) 340-0046, ext. 5104;
     
    Marlene Casciaro,
    Director of Communications,
    GENIVAR Income Fund,
    (514) 340-0046, ext. 5184