Press Releases

  • Wednesday, May 9, 2007
    GENIVAR Income Fund Reports on First Quarter 2007 Results - A Strong Start for 2007

    MONTREAL, May 9 - GENIVAR Income Fund (the Fund) announced, today, its financial and operating results (unaudited) for the period from January 1 to March 31, 2007. This is the fourth reporting period of the Fund since it commenced business operations on May 25, 2006 and, consequently, no comparative information is provided in the Fund's interim consolidated financial statements. However, 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 March 31, 2006.Highlights

    • Net revenues, in the first quarter of 2007, were $44.2 million, up from $27.3 million for the same period, in 2006.
    • EBITDA stood at $8.1 million, a 38.9% increase from $5.8 million in the first quarter of 2006.
    • Distributable cash generated totalled $6.6 million before a non-recurring expenditure, of which $4.7 million was distributed to unitholders, representing a payout ratio of 71.8%.
    • Backlog increased to $156.4 million.
    • The Fund completed the integration of four recent acquisitions.

    Revenues for the period from January 1 to March 31, 2007 were $54.3 million. The net earnings, before non-controlling interest, were $4.6 million or 24 cents per unit.

    "The Fund is off to a strong start with these excellent results and we are pleased with the contribution of our recent acquisitions," said Pierre Shoiry, President and CEO of the GENIVAR Income Fund.

    The Fund continued revenue growth and profitability over its first three complete quarters since its Initial Public Offering of May 25, 2006. Capital expenditures during the first quarter were significant, totalling $2.1 million. A non-recurring expenditure of $0.8 million, net of the sale of a building, was incurred in connection with the expansion of our Quebec City office, which is owned by the Fund. Construction will be completed by July 2007 and all the Quebec City personnel will thereafter be consolidated at that location.

    Gross margins remained stable while management, general and administrative expenses increased following the integration of our four recent acquisitions. "This has been a very active quarter for our team and, we have initiated work on numerous challenging projects in all of our operating regions. Demand for our services is high and the volume of new mandates is indicative of our firm's capacity for service and, the confidence our clients place in our team," concluded Shoiry.

    Recent awards include:

    • The development of a water and wastewater master plan of Trinidad and Tobago and the program management for the modernisation of these installations.
    • Project management services for the CHUM and Grey Bruce Hospital, in Ontario; the John Molson School of Business of Concordia University and the Savannah East Development Project for the National Insurance Bureau of Trinidad and Tobago.
    • A 45.5 MW renewable energy cogeneration plant for the Fort-Frances division of Abitibi-Consolidated, in Ontario.
    • The modernisation and subsequent reduction of greenhouse gases of the SFK Pulp Plant in St-Felicien.
    • The implementation of a water and sewer system for East Selkirk, in Manitoba.

    Subsequent to March 31, 2007, the Fund announced the closing of the acquisition of Nove Environment, a 30-employee firm specialized in environmental studies.

    The Fund will hold its first annual meeting on May 17, 2007, at 10:30 a.m., Montreal Convention Centre, 201 Viger St. West, Room 523, Montreal, Quebec.

    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 1,800 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
        ---------------------
    
                                                ---------------------------------
                                                       FOR THE FIRST QUARTER
                                                ---------------------------------
                                                            2007            2006
                                                ---------------------------------
                                                  FOR THE PERIOD  FOR THE PERIOD
                                                  FROM JANUARY 1  FROM JANUARY 1
                                                     TO MARCH 31     TO MARCH 31
                                                      (UNAUDITED)      (COMBINED-
        IN THOUSANDS OF DOLLARS EXCEPT PER                             UNAUDITED)
         UNIT DATA                                                            (1)
        -------------------------------------------------------------------------
        Revenues                                     $    54,343     $    36,307
        Deduct: Subconsultants and other direct
         expenses                                    $    10,175     $     8,971
        -------------------------------------------------------------------------
        Net revenues                                 $    44,168     $    27,336
        Direct project costs                         $    23,092     $    13,088
        -------------------------------------------------------------------------
        Gross margin                                 $    21,076     $    14,248
        Marketing, general and administrative
         expenses                                    $    12,986     $     8,424
        -------------------------------------------------------------------------
        EBITDA                                       $     8,090     $     5,824
        -------------------------------------------------------------------------
        Interest                                     $       295     $       117
        Depreciation of property, plant and
         equipment                                   $       599     $       381
        Amortization of intangible assets            $     2,458     $     1,241
        -------------------------------------------------------------------------
        Earnings before income tax expense and
         non-controlling interest                    $     4,738     $     4,085
        Income tax expense (2)                       $       141
        -------------------------------------------------------------------------
        Earnings before non-controlling interest     $     4,597
        Non-controlling interest (2)                 $     1,925
        -------------------------------------------------------------------------
        Net earnings (2)                             $     2,672
    
        Basic net earnings per Unit                  $      0.24
        Weighted average number of Units (3)          11,000,000
        Diluted net earnings per Unit                $      0.24
        Diluted weighted average number of Units (3)  18,927,381
        -------------------------------------------------------------------------
    
        (1) This combined financial information was carved out from GENIVAR
            Engineering Services Business regrouping all of the engineering
            activities of GENIVAR Inc., the Non-controlling Unitholder.
        (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) As at May 8, 2007, the number of Units is identical to what it was as
            at March 31, 2007.
    
    
        SUMMARY OF QUARTERLY RESULTS
        ----------------------------
    
                                 ------------------------------------------------
                                       2007                     2006
                                 ------------------------------------------------
                                         Q1          Q4           Q3          Q2
                                 ------------------------------------------------
                                    FOR THE     FOR THE      FOR THE     FOR THE
                                     PERIOD      PERIOD       PERIOD      PERIOD
                                       FROM        FROM         FROM        FROM
                                  JANUARY 1   OCTOBER 1       JULY 2      MAY 25
                                         TO          TO           TO          TO
        IN THOUSANDS OF DOLLARS    MARCH 31 DECEMBER 31 SEPTEMBER 3O      JULY 1
         EXCEPT PER UNIT DATA    (UNAUDITED) (UNAUDITED)  (UNAUDITED) (UNAUDITED)
        -------------------------------------------------------------------------
        Revenues               $    54,343  $    49,703  $   42,555  $    17,523
        Net revenues (1)       $    44,168  $    36,733  $   33,732  $    14,216
        -------------------------------------------------------------------------
        Gross margin           $    21,076  $    17,533  $   16,196  $     7,176
        -------------------------------------------------------------------------
        EBITDA                 $     8,090  $     7,437  $    7,024  $     3,354
        -------------------------------------------------------------------------
        Net earnings           $     2,672  $     2,577  $    2,364  $     1,403
        -------------------------------------------------------------------------
    
        Basic net earnings
         per unit              $      0.24  $      0.23  $     0.21  $      0.13
        Weighted average
         number of units         11,000,000  11,000,000   11,000,000  11,000,000
        Diluted net earnings
         per unit              $      0.24  $      0.23  $     0.21  $      0.13
        Diluted weighted
         average number
         of units                18,927,381  18,927,381   18,927,381  18,927,381
        -------------------------------------------------------------------------
    
        (1) Net revenues are defined as revenues less subconsultants and other
            direct expenses.
    
    
        DISTRIBUTABLE CASH
        ------------------
                                                ---------------------------------
                                                                 2007
                                                ---------------------------------
                                                  FOR THE PERIOD
                                                  FROM JANUARY 1
        IN THOUSANDS OF DOLLARS EXCEPT PER           TO MARCH 31        PER UNIT
         UNIT DATA                                    (UNAUDITED)     (UNAUDITED)
        -------------------------------------------------------------------------
        Cash flows
        Cash flows from operating activities         $     1,654
        Change in non-cash working capital items     $     6,135
        Current income tax expense                   $        75
        Income taxes paid                            $       (50)
        Capital expenditures paid                    $    (1,348)
        Capital expenditures paid for
         non-recurring items (2)                     $      (808)
        Interest unpaid                              $       120
        -------------------------------------------------------------------------
        Distributable cash (1)                       $     5,778     $    0.3053
    
        Actual payout ratio                                 81.9%
        Actual payout ratio adjusted for
         non-recurring items (2)                            71.8%
        -------------------------------------------------------------------------
        Fund's Units distributions                   $     2,749     $    0.2500
        Class B Non-subordinated Exchangeable LP     $       799     $    0.2500
         Units distributions
        Class C Subordinated Exchangeable LP Units
         distributions                               $     1,182     $    0.2500
        -------------------------------------------------------------------------
        Aggregate distributions, all Units (1)       $     4,730     $    0.2500
        -------------------------------------------------------------------------
        Distributable cash (1)                       $     5,778     $    0.3053
        Capital expenditures paid                    $    (1,348)
        Capital expenditures paid for non-recurring
         items (2)                                   $      (808)
        Long-term incentive plan unpaid              $        69
        Interest paid                                $      (175)
        Income taxes paid                            $       (50)
        -------------------------------------------------------------------------
        EBITDA                                       $     8,090
        -------------------------------------------------------------------------
    
        (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.
        (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 disposal of a second
            building of $449.

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

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