Press Releases

  • Tuesday, March 13, 2007
    GENIVAR Income Fund announces strong fourth quarter to close its first year-end results

    MONTREAL, March 13 - GENIVAR Income Fund (the "Fund") announced sustained growth in revenues and EBITDA for its fourth quarter and for the period from May 25, 2006 to December 31, 2006. This is the third reporting period for the Fund since it commenced business operations on May 25, 2006. In order to provide investors with a meaningful assessment of its performance, we have included selected financial information of the Fund, for the 12 months ended December 31, 2006 and its predecessor company GENIVAR inc. (the Engineering services business) for the twelve months ended December 31, 2005.Highlights

    • For the full year 2006, revenues grew from $130.0 million in 2005 to $176.1 million, representing a 35.5% increase. Net revenue was $128.0 million up 32.5% from $96.6 million in 2005. EBITDA stood at $26.0 million (20.2% of net revenues), up 49.4% from $17.4 million in 2005.
    • Revenues in the fourth quarter of 2006 were $49.7 million, up 48.8% for the same period in 2005. Net revenues increased 30.6% to $36.7 million compared to $28.1 million in the fourth quarter of 2005. EBITDA reached $7.4 million (20.2% of net revenues) for the period from October 1 to December 31, 2006.
    • Distributable cash generated in the fourth quarter totalled $6.3 million of which $4.7 million was distributed to Unitholders, representing a payout ratio of 74.7%. Since the May 25, 2006 IPO, EBITDA totalled $17.8 million on net revenues of $84.7 million generating $15.7 million of distributable cash of which $11.4 million was distributed to Unitholders representing a payout ratio of 72.5%.
    • Since its Initial Public Offering (IPO) in May 2006, the Fund completed five acquisitions, adding 415 new employees across Canada.

    "We are pleased with these excellent results for our first annual reporting period," said Pierre Shoiry, President and CEO of the GENIVAR Income Fund. "The industry conditions are excellent in all our market segments, backlog is strong and our staff is highly motivated by the dynamism and growth prospects of the Fund."

    Consolidation in Quebec and Ontario and Expansion in Western Canada

    Since our IPO, the Fund actively pursued its business strategy and reached a significant number of milestones. "We created a solid base in the Toronto region following the acquisition of MacViro, a Toronto-based engineering firm with 170 employees specialized in urban infrastructure, industrial, power and environment.

    Kazmar Associates, another Toronto-based firm with 25 employees in structural engineering, joined GENIVAR as at January 1, 2007, strengthening our national platform in building engineering and enlarging our presence in Ontario.

    The Martoni, Cyr & Associates acquisition, as at December 1, 2006, a Montreal-based firm, consolidated our expertise in building engineering with 70 employees and added internationally recognized know-how in telecommunication tower design," said Shoiry.

    On January 1, 2007, GENIVAR acquired the Western Canada-based engineering consulting firm Cochrane Design Group (CDG) which has over 150 employees with offices in British Columbia, Manitoba, Saskatchewan and Ontario. "The acquisition of CDG represents a major step forward in pursuing strategic growth opportunities. We gained an important foothold in Western Canada where CDG is an industry leader. We also expanded our operations in Ontario," added Shoiry.

    On February 24, 2007, GENIVAR also completed the acquisition of Groupe G.L.D. inc. and established a presence in the Beauce Region, in the province of Quebec and enhanced our building expertise in the greater Quebec City Region. The firm has 50 employees.

    These acquisitions added a solid base of national repeat clients in all of our market segments. The integration of these firms is well advanced and cross-marketing initiatives have been initiated in Ontario, Quebec, in Western Canada, as well as internationally.

    More acquisitions targeted

    The workforce of the GENIVAR Income Fund now totals more than 1,800 employees across Canada and internationally in more than 40 offices. "We will pursue our business strategy and growth in the Canadian marketplace both through organic acquisition by the cross-selling of services and through strategic acquisitions. The Fund expects to pursue its acquisition strategy and has, in that sense, proceeded in identifying potential acquisition targets in all provinces," concluded Shoiry.

    GENIVAR

    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 units trade on the Toronto Stock Exchange under the symbol GNV.UN.

    The Fund's audited consolidated financial statements, as well as management's discussion and analysis of this year-end reporting period can be obtained via the GENIVAR website, in the Investor Relations section, at http://www.genivar.com or at www.sedar.com.

        RESULTS OF OPERATIONS
                                      -------------------------------------------
                                                                            2006
                                      -------------------------------------------
                                           PRE-IPO       POST-IPO          TOTAL
                                      -------------------------------------------
                                           FOR THE        FOR THE        FOR THE
                                       PERIOD FROM    PERIOD FROM         TWELVE
                                         JANUARY 1    FROM MAY 25   MONTHS ENDED
                                         TO MAY 24             TO    DECEMBER 31
                                         (COMBINED    DECEMBER 31      (COMBINED
        IN THOUSANDS OF DOLLARS          UNAUDITED)      (AUDITED)     UNAUDITED)
        EXCEPT PER UNIT DATA                    (5)                           (4)
                                      -------------------------------------------
        Revenues                       $    66,332    $   109,781    $   176,113
        Deduct: Subconsultants and
         other direct expenses         $    23,035    $    25,099    $    48,134
                                      -------------------------------------------
        Net revenues (1)               $    43,297    $    84,682    $   127,979
        Direct project costs           $    21,346    $    43,777    $    65,123
                                      -------------------------------------------
        Gross margin                   $    21,951    $    40,905    $    62,856
        Marketing, general and
         administrative expenses       $    13,778    $    23,089    $    36,867
                                      -------------------------------------------
        EBITDA (2)                     $     8,173    $    17,816    $    25,989
        Interest                       $       132    $       476    $       608
        Depreciation of property,
         plant and equipment           $       622    $     1,245    $     1,867
        Amortization of intangible
         assets                        $     1,661    $     5,391    $     7,052
                                      -------------------------------------------
        Earnings before income taxes
        and non-controlling interest   $     5,758    $    10,704    $    16,462
        Income tax (recovery) (3)                     $      (211)
                                      -------------------------------------------
        Earnings before non-controlling
         interest                                     $    10,915
        Non-controlling interest (3)                  $     4,571
                                      -------------------------------------------
        Net earnings (3)                              $     6,344
    
        Basic net earnings per unit                   $      0.58
        Weighted average number of
         Units (6)                                     11,000,000
        Diluted net earnings per Unit                 $      0.58
        Diluted weighted average
         number of Units (6)                           18,927,381
        -------------------------------------------------------------------------
    
    
                                      -------------------------------------------
                                              2005           2006           2005
                                      -------------------------------------------
                                             TOTAL             Q4             Q4
                                      -------------------------------------------
                                           FOR THE                       FOR THE
                                            TWELVE        FOR THE    PERIOD FROM
                                      MONTHS ENDED    PERIOD FROM   OCTOBER 1 TO
                                       DECEMBER 31   OCTOBER 1 TO    DECEMBER 31
                                         (COMBINED    DECEMBER 31      (COMBINED
                                         UNAUDITED)    (UNAUDITED)     UNAUDITED)
                                                (5)                           (5)
        -------------------------------------------------------------------------
        Revenues                       $   129,997    $    49,703    $    33,447
        Deduct: Subconsultants and
         other direct expenses         $    33,446    $    12,970    $     5,343
                                      -------------------------------------------
        Net revenues (1)               $    96,551    $    36,733    $    28,104
        Direct project costs           $    50,942    $    19,200    $    14,313
                                      -------------------------------------------
        Gross margin                   $    45,609    $    17,533    $    13,791
        Marketing, general and
         administrative expenses       $    28,169    $    10,096    $     7,698
                                      -------------------------------------------
        EBITDA (2)                     $    17,440    $     7,437    $     6,093
        Interest                       $       488    $       195    $       158
        Depreciation of property,
         plant and equipment           $     1,449    $       534    $       424
        Amortization of intangible
         assets                        $     2,173    $     2,130    $       547
                                      -------------------------------------------
        Earnings before income taxes
        and non-controlling interest   $    13,330    $     4,578    $     4,964
        Income tax (recovery) (3)                     $       144
                                      -------------------------------------------
        Earnings before non-controlling
         interest                                     $     4,434
        Non-controlling interest (3)                  $     1,857
                                      -------------------------------------------
        Net earnings (3)                              $     2,577
    
        Basic net earnings per unit                   $      0.24
        Weighted average number
         of Units (6)                                  11,000,000
        Diluted net earnings per Unit                 $      0.24
        Diluted weighted average
         number of Units (6)                           18,927,381
        -------------------------------------------------------------------------
    
        (1) 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.
        (2) 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.
        (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) Supplementary Non-GAAP Combined Information for the twelve-month
            period ended December 31, 2006 is the combination of financial
            results of GENIVAR Engineering Services Business PRE-IPO and
            financial results of the Fund POST-IPO. Such combination is for
            illustrative purposes only. As a result of this combined
            presentation, the POST-IPO earnings have been affected by the
            additional amortization and depreciation of intangible assets and
            property, plant and equipment assets considering that these assets
            are recorded at fair value at the acquisition date.
        (5) 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.
        (6) As at March 12, 2007, the number of Units is the same as it was as at
            December 31, 2006.
    
    
         DISTRIBUTABLE CASH
                                    ---------------------------------------------
                                                                            2006
                                    ---------------------------------------------
                                                POST-IPO                      Q4
                                    ---------------------------------------------
                                     FOR THE         PER     FOR THE         PER
                                      PERIOD        UNIT      PERIOD        UNIT
                                      MAY 25               OCTOBER 1
                                          TO                      TO
        IN THOUSANDS OF DOLLARS  DECEMBER 31             DECEMBER 31
        EXCEPT PER UNIT DATA        (AUDITED)             (UNAUDITED)
        -------------------------------------------------------------------------
        Cash flows
        Cash flows from operating
         activities                 $ 13,333                $  8,833
        Change in non-cash
         working capital items         3,886                  (1,648)
        Current income tax expense       121                      57
        Income taxes paid               (327)                    (70)
        Capital expenditures paid     (1,583)                   (915)
        Interest unpaid                  282                      72
        -------------------------------------------------------------------------
        Distributable cash (1)(2)   $ 15,712    $ 0.8301    $  6,329    $ 0.3344
        Actual payout ratio (3)         72.5%                   74.7%
        Fund's Units distributions     6,622    $ 0.6022       2,749    $ 0.2500
        Class B Non-subordinated
         Exchangeable LP Units
         distributions                 1,924    $ 0.6022         799    $ 0.2500
        Class C Subordinated
         Exchangeable LP Units
         distributions                 2,848    $ 0.6022       1,182    $ 0.2500
                                    ---------------------------------------------
        Aggregate distributions,
         all Units (1)                11,394      0.6022       4,730      0.2500
        -------------------------------------------------------------------------
        Distributable cash (1)      $ 15,712    $ 0.8301    $  6,329    $ 0.3344
        Capital expenditures paid      1,583                     915
        Interest paid                    194                     123
        Income taxes paid                327                      70
        -------------------------------------------------------------------------
        EBITDA (4)                    17,816                   7,437
        -------------------------------------------------------------------------
    
        (1) 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 defines
            distributable cash as cash flows from operating activities adjusted
            for change in non-cash working capital items, income taxes paid,
            capital expenditures paid, current income tax expense and interest
            unpaid. 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. The Fund believes that its
            distributable cash is a useful supplemental measure that may assist
            investors in assessing the return on their investment in Units.
        (2) 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.
        (3) Payout ratio is defined as aggregate distributions divided by
            distributable cash.
        (4) 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

    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