Press Releases

  • Tuesday, May 13, 2008
    First Quarter Yields Strong Results for GENIVAR Income Fund

    MONTREAL, May 13 - GENIVAR Income Fund (The Fund) announced, today, its financial and operating results (unaudited) for the first quarter of 2008. These results cover the period from January 1, 2008 to March 29, 2008.

    Highlights

    • Revenues for the first quarter of 2008 were $70.1 million, up from $54.3 million for the same period in 2007, representing an increase of 29.0%. Net revenues were $60.1 million, representing an increase of $15.9 million (36.2%).
    • Earnings before non-controlling interest were $7.6 million or $0.36 cents per unit for the first quarter. EBITDA increased 46.8% from $8.1 million in the first quarter of 2007 to $11.9 million for the same period in 2008.
    • Cash flows from operating activities generated $7.4 million of cash. Adjusted distributable cash totalled $9.8 million of which $5.3 million was distributed to unitholders, representing an adjusted payout ratio of 54.5%.
    • The Fund completed four acquisitions during the first three months of 2008, adding approximately 365 employees in Ontario, Alberta and British Columbia.
    • Backlog stands at $294.1 million as at March 29, 2008 up from $207.5 million on December 31, 2007.

    "We are very pleased with these first quarter results that bode well for the rest of 2008" said Pierre Shoiry, President and CEO of the GENIVAR Income Fund. "With the recent acquisition of Doucet & Associates, five quality firms have now joined the Fund so far this year and we are especially pleased to now have an established presence in Alberta," he added. "We secured several significant contracts during this period in all of our operating regions," concluded Mr. Shoiry.

    Recent awards include:

    • Project and construction management services in environment for the Gaspe Reclamation Project in Murdochville for Xstrata Copper.
    • Electrical and mechanical engineering, instrumentation and piping, as well as civil technical support for the Twin Rivers canola seed and soybean crushing plant in the Mauricie Region, in Quebec.
    • A multidisciplinary mandate in building engineering for two new office towers, 21 and 25 storeys respectively, in Quebec City for Cominar.
    • Structural, mechanical and civil engineering and supervision work, as well as environmental studies for the new Calypso Park, the future largest water park in Canada which will be located in Ottawa, Ontario.
    • In transportation, GENIVAR has been selected by the Quebec Ministry of Transportation to provide engineering services, in consortium, for the refurbishment of the Dorval Interchange near Montreal's Trudeau International Airport in Montreal.
    • International activities were also buoyant as we successfully completed the engineering and commissioning of the Mana Mining project in Burkina Faso for SEMAFO, a fast-track project, with the first gold output being produced in March 2008.
    • GENIVAR was also awarded an important fast-track project management assignment for a new Convention Centre, in Oran, Algeria, including a multi-purpose conference and convention facility, a five-star 300-room hotel, and a hotel-apartment.
    • GENIVAR has been awarded a major project for Trinidad and Tobago's Ministry of National Security aimed at redeveloping its security facilities including: police stations, fire halls and detention centres among others. The scope of the mandate covers the calls for proposals and tender documents, in addition to managing the project and monitoring the work.

    The Fund will hold its annual meeting on May 22, 2008 at 10:00 a.m., at the Montreal Convention Centre, Room 520AD.

    About GENIVAR

    GENIVAR is a leading Canadian engineering services firm, providing public and private 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 are of varying sizes and fall into diverse market segments, including building, industrial and power, urban infrastructure, transportation, and environment. GENIVAR is one of the largest engineering services firms in Canada, in terms of number of employees, employing over 2,800 managers, professionals, technicians, technologists, and support staff, in over 60 offices in Canada and abroad.

    
        RESULTS OF OPERATIONS
        ---------------------
                                             ------------------------------------
                                                                3 months
                                             ------------------------------------
                                                         2008               2007
                                             ------------------------------------
                                               FOR THE PERIOD     FOR THE PERIOD
                                               FROM JANUARY 1     FROM JANUARY 1
        IN THOUSANDS OF DOLLARS EXCEPT            TO MARCH 29        TO MARCH 31
         PER UNIT DATA                             (UNAUDITED)        (UNAUDITED)
        -------------------------------------------------------------------------
        Revenues                                     $ 70,087           $ 54,343
        Deduct: Subconsultants and other
         direct expenses                              $ 9,939           $ 10,175
        Net revenues                                 $ 60,148           $ 44,168
        Direct project costs                         $ 30,182           $ 23,092
        -------------------------------------------------------------------------
        Gross margin                                 $ 29,966           $ 21,076
        Marketing, general, and
         administrative expenses and others          $ 18,088           $ 12,986
        -------------------------------------------------------------------------
        EBITDA                                       $ 11,878            $ 8,090
        -------------------------------------------------------------------------
        Interest                                        $ 121              $ 295
        Depreciation of property, plant,
         and equipment                                  $ 854              $ 599
        Amortization of intangible assets             $ 3,440            $ 2,458
        -------------------------------------------------------------------------
        Earnings before income taxes and
         non-controlling interest                     $ 7,463            $ 4,738
        Income tax expense (recovery)(1)               ($ 152)             $ 141
        -------------------------------------------------------------------------
        Earnings before non-controlling interest      $ 7,615            $ 4,597
        Non-controlling interest(2)                   $ 3,017            $ 1,925
        -------------------------------------------------------------------------
        Net earnings                                  $ 4,598            $ 2,672
        Basic net earnings per unit                    $ 0.36             $ 0.24
        Weighted average number of units(2)        12,870,664         11,000,000
        Diluted net earnings per unit                  $ 0.36             $ 0.24
        Diluted weighted average number of
         units(2)                                  21,347,826         18,927,381
        -------------------------------------------------------------------------
    
        (1) See section "Results of operations - Income tax expense."
        (2) As at May 13, 2008, the number of units is identical to what it was
            as at March 29, 2008.
    
    
        DISTRIBUTABLE CASH
        ------------------
                                             ------------------------------------
                                                                3 months
                                             ------------------------------------
                                                         2008               2007
                                             ------------------------------------
                                               FOR THE PERIOD     FOR THE PERIOD
                                               FROM JANUARY 1     FROM JANUARY 1
        IN THOUSANDS OF DOLLARS EXCEPT            TO MARCH 29        TO MARCH 31
         PER UNIT DATA                             (UNAUDITED)        (UNAUDITED)
        -------------------------------------------------------------------------
        Cash flows from operating activities          $ 7,391            $ 1,654
        Capital expenditures paid                    ($ 1,930)          ($ 2,605)
        Standardized distributable cash               $ 5,461             ($ 951)
        Change in non-cash working capital
         items(1)                                     $ 4,337            $ 6,135
        Capital expenditures paid for
         non-recurring items(2)                             -            $ 1,257
    
        Adjusted distributable cash(3)                $ 9,798            $ 6,441
        Adjusted distributable cash, per unit(3)       $ 0.46             $ 0.34
        Payout ratio
          Standardized                                   97.8%             497.4%
          Adjusted                                       54.5%              73.4%
        -------------------------------------------------------------------------
        Distributions
    
        Fund's units distributions                    $ 3,224            $ 2,749
        Class B Non-subordinated Exchangeable LP
         unit distributions                             $ 934              $ 799
        Class C Subordinated Exchangeable LP
         unit distributions                           $ 1,182            $ 1,182
        Aggregate distributions, all units(3)         $ 5,340            $ 4,730
        Aggregate distributions, all units,
         per unit(3)                                   $ 0.25             $ 0.25
        -------------------------------------------------------------------------
    
        (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 Exchangeable LP
            units, which total 21,366,405 as at March 29, 2008 (18,927,381 at the
            same date in 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.
    

    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 sub-consultants 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

    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 CEO,
    GENIVAR Income Fund,
    (514) 340-0046, ext. 5104;

    Marlene Casciaro,
    Director of Communications,
    GENIVAR Income Fund,
    (514) 340-0046, ext. 5184