Press Releases

  • Tuesday, November 11, 2008
    GENIVAR Income Fund announces strong third quarter results

    MONTREAL, Nov. 11 - GENIVAR Income Fund (the "Fund") announced today its financial and operating results (unaudited) for the third quarter of 2008. These results cover the period from June 29, 2008, to September 27, 2008.Highlights

    • For the third quarter of 2008, revenues were $104.7 million, up from $68.5 million for the same period in 2007, representing an increase of 52.7%. Net revenues were $85.8 million, compared to $53.6 million, an increase of 60.1% from 2007 to 2008. Strong organic growth accounted for 22.4% of this increase in net revenues, the remaining 37.7% resulting from acquisitions.
    • Municipal infrastructure and transportation projects generated 49.9% of net revenues during the third quarter and 45.6% of net revenues for the nine-month period ending September 27, 2008.
    • Net earnings were $8.3 million for the third quarter, a 93.0% increase from the amount of $4.3 million achieved for the same period in 2007.
    • Earnings before non-controlling interest were $13.7 million or $0.64 per unit on a diluted basis for the third quarter, up from the amount of $0.38 per unit on a diluted basis generated in the same quarter of 2007. EBITDA increased 68.3% from $11.7 million in the third quarter of 2007 to $19.7 million for the same period in 2008. For the nine-month period ending September 27, 2008, EBITDA stood at $49.0 million, up 66.9% from $29.4 million for the same period in 2007.
    • Cash flows from operating activities generated $8.9 million of cash. For the third quarter of 2008, adjusted distributable cash totalled $16.1 million, of which $8.0 million were distributed to unitholders, representing an adjusted payout ratio of 49.8%. For the 2008 nine-month period, adjusted distributable cash totalled $39.1 million, of which $18.7 million were distributed to unitholders, representing an adjusted payout ratio of 47.8%.
    • Subsequent to quarter end, on October 2, 2008, the Fund completed an equity financing with success. The Fund raised $50.0 million through a public offering of 1 391 650 units for gross proceeds of $35.0 million and a private placement by the non-controlling unitholder of 596 421 units for additional gross proceeds of $15.0 million.
    • During the third quarter, the Fund completed the acquisitions of Peterson Galloway, a British Columbia building engineering firm, Zenix Engineering, an Ontario building engineering firm, Solmers, a Quebec environmental engineering firm, and Henderson Paddon & Associates/Oweson, an Ontario-based civil engineering and environmental consulting firm.
    • Subsequent to the end of the quarter, the Fund completed the acquisitions of two Quebec-based firms: Consultants GENIPLUS/Nageco, a 68-year old municipal infrastructure, structural building and bridge firm, and Consumaj Estrie, a Sherbrooke-based environmental and municipal infrastructure firm.
    • As of September 27, 2008, backlog remained strong at $305.0 million."In spite of the current financial turbulence, the Fund remains committed to the execution of its growth plan, said Pierre Shoiry, President and CEO of the GENIVAR Income Fund. We have a healthy balance sheet, solid credit facilities, and the pipeline for acquisitions is good," concluded Pierre Shoiry.

    About GENIVAR

    GENIVAR is a leading Canadian engineering services firm providing private and public sector clients with a comprehensive range of professional consulting services through all execution phases of a project including planning, design, construction and maintenance. The company's clients operate in a wide variety of market segments, such as Building, Industrial and Power, Municipal Infrastructure, Transportation and Environment. GENIVAR is one of the largest engineering services firm in Canada with over 3,400 managers, professionals, technicians and technologists and support staff in more than 80 offices in Canada and abroad. www.genivar.com.

    RESULTS OF OPERATIONS
        ---------------------
        ---------------------
    
                          -------------------------------------------------------
                                      3 months                    9 months
                          -------------------------------------------------------
                                  2008          2007          2008          2007
                          -------------------------------------------------------
                               FOR THE       FOR THE       FOR THE       FOR THE
                                PERIOD        PERIOD        PERIOD        PERIOD
                                  FROM          FROM          FROM          FROM
                               JUNE 29        JULY 1     JANUARY 1     JANUARY 1
        IN THOUSANDS OF             TO            TO            TO            TO
         DOLLARS EXCEPT   SEPTEMBER 27  SEPTEMBER 30  SEPTEMBER 27  SEPTEMBER 30
         PER UNIT DATA      (UNAUDITED)   (UNAUDITED)   (UNAUDITED)   (UNAUDITED)
        -------------------------------------------------------------------------
        Revenues             $ 104,650     $  68,543     $ 272,085     $ 186,677
    
        Deduct:
         Subconsultants
         and other direct
         expenses            $  18,836     $  14,941     $  45,254     $  38,048
    
        Net revenues         $  85,814     $  53,602     $ 226,831     $ 148,629
    
        Direct project
         costs               $  42,022     $  27,369     $ 112,633     $  76,742
        -------------------------------------------------------------------------
        Gross margin         $  43,792     $  26,233     $ 114,198     $  71,887
    
        Marketing, general,
         and administrative
         expenses and
         others              $  24,122     $  14,548     $  65,187     $  42,515
        -------------------------------------------------------------------------
        EBITDA               $  19,670     $  11,685     $  49,011     $  29,372
        -------------------------------------------------------------------------
        Interest             $     778     $     746     $   1,491     $   1,493
    
        Depreciation of
         property, plant,
         and equipment       $   1,171     $     693     $   3,058     $   1,969
    
        Amortization of
         intangible assets   $   3,818     $   2,667     $  11,041     $   7,626
        -------------------------------------------------------------------------
        Earnings before
         income taxes and
         non-controlling
         interest            $  13,903     $   7,579     $  33,421     $  18,284
    
        Income taxes         $     205     $     176     $   1,084     $   1,442
        -------------------------------------------------------------------------
        Earnings before
         non-controlling
         interest            $  13,698     $   7,403     $  32,337     $  16,842
    
        Non-controlling
         interest            $   5,373     $   3,059     $  12,748     $   7,223
        -------------------------------------------------------------------------
        Net earnings         $   8,325     $   4,344     $  19,589     $   9,619
    
        Basic net earnings
         per unit            $    0.65     $    0.38     $    1.52     $    0.87
    
        Weighted average
         number of units    12,870,030    11,305,396    12,870,350    11,100,382
    
        Diluted net
         earnings per unit   $    0.64     $    0.38     $    1.51     $    0.88
    
        Diluted weighted
         average number
         of units           21,352,768    19,347,454    21,353,568    19,066,964
        -------------------------------------------------------------------------
    
    
        DISTRIBUTABLE CASH
        ------------------
        ------------------
    
                          -------------------------------------------------------
                                      3 months                    9 months
                          -------------------------------------------------------
                                  2008          2007          2008          2007
                          -------------------------------------------------------
                               FOR THE       FOR THE       FOR THE       FOR THE
                                PERIOD        PERIOD        PERIOD        PERIOD
                                  FROM          FROM          FROM          FROM
                               JUNE 29        JULY 1     JANUARY 1     JANUARY 1
        IN THOUSANDS OF             TO            TO            TO            TO
         DOLLARS EXCEPT   SEPTEMBER 27  SEPTEMBER 30  SEPTEMBER 27  SEPTEMBER 30
         PER UNIT DATA      (UNAUDITED)   (UNAUDITED)   (UNAUDITED)   (UNAUDITED)
        -------------------------------------------------------------------------
        Cash flows from      $   8,908     $   6,400     $  24,253     $  12,066
         operating
         activities
    
        Capital
         expenditures paid  ($   2,084)   ($   1,616)   ($   6,690)   ($   6,610)
    
        Standardized
         distributable
         cash(1)             $   6,824     $   4,784     $  17,563     $   5,456
        Change in non-cash
         working capital
         items(2)            $   9,254     $   4,523     $  21,555     $  15,672
        Capital expenditures
         paid for
         non-recurring
         items(3)                    -     $     268             -     $   2,431
        Purchase of units
         in the market under
         the long-term
         incentive plan              -             -             -    ($     825)
    
        Adjusted
         distributable
         cash(1)(4)          $  16,078     $   9,575     $  39,118     $  22,734
    
        Adjusted
         distributable
         cash, per
         unit(1)(4)          $    0.75     $    0.45     $    1.83     $    1.06
    
        Payout ratio
          Standardized           117.4%        103.1%        106.4%        263.8%
          Adjusted                49.8%         51.5%         47.8%         63.3%
        -------------------------------------------------------------------------
        Distributions
    
        Fund's units
         distributions       $   4,839     $   2,907     $  11,287     $   8,405
    
        Class B
         Non-subordinated
         Exchangeable
         LP Unit
         distributions       $   1,397     $     844     $   3,265     $   2,440
    
        Class C
         Subordinated
         Exchangeable
         LP Unit
         distributions       $   1,775     $   1,182     $   4,139     $   3,548
    
        Aggregate
         distributions,
         all units(4)        $   8,011     $   4,933     $  18,691     $  14,393
    
        Aggregate
         distributions,
         all units,
         per unit(4)         $    0.37     $    0.25     $    0.87     $    0.75
        -------------------------------------------------------------------------
    
        (1)  Calculation of the distributable cash included a withholding tax of
             $0.6 million for the three-month period and of $1.4 million for the
             nine-month period ended September 27, 2008.
    
        (2)  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.
    
        (3)  Non-recurring capital expenditures pertain to a construction project
             which had for objective to expand square footage of the main office
             in Quebec City.
    
        (4)  Distributable cash and distributable cash per unit amounts are
             calculated for the combined interest of the Fund's units and Non-
             subordinated Exchangeable Class B LP units and Subordinated
             Exchangeable Class C LP Units (for which Subordination End Date was
             June 30, 2008), which total 21,366,405 as at September 27, 2008
             (21,366,405 as at September 30, 2007). 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. As at November 10, 2008, the
             number of units is 23,354,476.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 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 items 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 entity-specific adjustment 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 Chief Executive Officer,
    GENIVAR Income Fund,
    (514) 340-0046, ext. 5104;
     
    Marlene Casciaro,
    Director of Communications,
    GENIVAR Income Fund,
    (514) 340-0046, ext. 5184