Press Releases

  • Tuesday, November 10, 2009
    Third quarter yields strong results for GENIVAR Income Fund

    MONTREAL, Nov. 10 - GENIVAR Income Fund (the "Fund") announced today its financial and operating results (unaudited) for the third quarter of 2009. These results cover the period from June 28, 2009, to September 26, 2009.

    Highlights
    
        - For the third quarter of 2009, revenues rose to $125.4 million, up from
          $104.7 million, representing an increase of 19.9%. Net revenues were
          $101.2 million, compared to $85.8 million, an increase of 17.9% from
          2008 to 2009. Organic growth accounted for 6.2% of this increase in
          net revenues, the remaining 11.7% resulting from acquisitions.
    
        - Net earnings were $8.8 million in the third quarter, up from the
          $8.3 million achieved for the same period in 2008, representing an
          increase of 6.0%.
    
        - Earnings before non-controlling interest were $14.4 million, or
          $0.62 per unit on a diluted basis for the third quarter, up from
          $13.7 million or $0.65 per unit on a diluted basis generated in the
          same quarter of 2008. EBITDA increased from $19.7 million in the third
          quarter of 2008 to $21.4 million for the same period in 2009. The
          results of the third quarter were negatively impacted by an exchange
          loss of $1.0 million as a result of the stronger Canadian dollar.
    
        - For the third quarter of 2009, adjusted distributable cash totalled
          $18.2 million, of which $8.8 million were distributed to unitholders,
          representing an adjusted payout ratio of 48.2%. For the 2009 nine-month
          period, adjusted distributable cash totalled $44.8 million, of which
          $26.3 million were distributed to unitholders, representing an adjusted
          payout ratio of 58.6%.
    
        - During the third quarter, the Fund completed the acquisitions of
          WM.R. Walker Engineering, an Ontario-based multidisciplinary
          engineering firm in Sault Ste. Marie; Magnate Engineering & Associates
          and Magnate Communication Corp., an Ontario and a British Columbia
          telecommunications firms, and Progemes, a Montreal-based mechanical and
          electrical consulting firm.
    
        - Backlog increased to $334.2 million, up $12.9 million from
          $321.3 million as at the previous quarter, ended June 27, 2009.
    
        - Subsequent to the quarter-end, on October 16, 2009, the Fund completed
          an equity financing of $100.0 million through a public offering of
          3,809,500 units at a price of $26.25.
    
        - Subsequent to the quarter-end, two small firms joined GENIVAR and added
          15 employees: Harp Engineering & Design, a St. Catharines-based
          mechanical and electrical consulting firm, and Gilles Taché & Associés,
          a municipal infrastructure group based in Sainte-Agathe, in the
          province of Quebec.
    

    "We are pleased with these excellent quarterly results, achieved through the commitment, passion and dedication of all of our employees," said Pierre Shoiry, President and CEO of the Fund. "As the result of our recent equity financing, our healthy balance sheet combined with our unused credit facilities will enable us to focus on continuing to develop and grow our firm."

    Conference call

    A conference call will be held on November 10, 2009, at 4 p.m. (Eastern Time) to discuss these results.

    To participate in the conference call:
        - Montreal region, dial 514-861-2909
        - Canada and United States, dial 1-877-695-6175
    
        Enter access code 8744835.
    

    A presentation of the 2009 third quarter highlights and results is available at www.genivar.com in the Investor Relations section, under Presentations and events.

    A replay of the conference call will also be available in the Investor Relations section of the Company's web site in the following days at www.genivar.com.

    About 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, which are of varying sizes, fall into various market segments such as building, industrial and power, municipal infrastructure, transportation and environment. GENIVAR is one of the largest engineering services firm in Canada in terms of number of employees with more than 3,800 managers, professionals, technicians and technologists and support staff in over 70 locations in Canada and abroad.

    RESULTS OF OPERATIONS
    
                          -------------------------------------------------------
                                       3 months                    9 months
                          -------------------------------------------------------
                                  2009          2008          2009          2008
                          -------------------------------------------------------
                               FOR THE       FOR THE       FOR THE       FOR THE
                           PERIOD FROM   PERIOD FROM   PERIOD FROM   PERIOD FROM
        IN THOUSANDS OF     JUNE 28 TO    JUNE 29 TO  JANUARY 1 TO  JANUARY 1 TO
         DOLLARS EXCEPT   SEPTEMBER 26  SEPTEMBER 27  SEPTEMBER 26  SEPTEMBER 27
         PER UNIT DATA      (UNAUDITED)   (UNAUDITED)   (UNAUDITED)   (UNAUDITED)
        -------------------------------------------------------------------------
        Revenues          $    125,426  $    104,650  $    342,902  $    272,085
    
        Deduct:
         Subconsultants
         and other
         direct expenses  $     24,245  $     18,836  $     56,283  $     45,254
    
        Net revenues      $    101,181  $     85,814  $    286,619  $    226,831
    
        Direct project
         costs            $     49,127  $     42,022  $    141,733  $    112,633
        -------------------------------------------------------------------------
        Gross margin      $     52,054  $     43,792  $    144,866  $    114,198
    
        Marketing,
         general, and
         administrative
         expenses and
         others           $     30,669  $     24,122  $     87,269  $     65,187
        -------------------------------------------------------------------------
        EBITDA            $     21,385  $     19,670  $     57,617  $     49,011
        -------------------------------------------------------------------------
        Interest          $        626  $        778  $      1,512  $      1,491
    
        Depreciation of
         property, plant
         and equipment    $      1,642  $      1,171  $      4,611  $      3,058
    
        Amortization of
         intangible
         assets           $      4,213  $      3,818  $     12,317  $     11,041
        -------------------------------------------------------------------------
        Earnings before
         income taxes
         and
         non-controlling
         interest         $     14,904  $     13,903  $     39,177  $     33,421
    
        Income taxes      $        479  $        205  $      1,725  $      1,084
        -------------------------------------------------------------------------
        Earnings before
         non-controlling
         interest         $     14,425  $     13,698  $     37,452  $     32,337
    
        Non-controlling
         interest         $      5,601  $      5,373  $     14,550  $     12,748
        -------------------------------------------------------------------------
        Net earnings      $      8,824  $      8,325  $     22,902  $     19,589
    
        Basic net
         earnings per
         unit             $       0.62  $       0.65  $       1.60  $       1.52
    
        Weighted average
         number of units    14,276,466    12,870,030    14,276,753    12,870,350
    
        Diluted net
         earnings per
         unit             $       0.62  $       0.64  $       1.60  $       1.51
    
        Diluted weighted
         average number
         of units           23,351,903    21,352,768    23,352,088    21,353,568
        -------------------------------------------------------------------------
    
    
        DISTRIBUTABLE CASH
    
                          -------------------------------------------------------
                                       3 months                    9 months
                          -------------------------------------------------------
                                  2009          2008          2009          2008
                          -------------------------------------------------------
                               FOR THE       FOR THE       FOR THE       FOR THE
                           PERIOD FROM   PERIOD FROM   PERIOD FROM   PERIOD FROM
        IN THOUSANDS OF     JUNE 28 TO    JUNE 29 TO  JANUARY 1 TO  JANUARY 1 TO
         DOLLARS EXCEPT   SEPTEMBER 26  SEPTEMBER 27  SEPTEMBER 26  SEPTEMBER 27
         PER UNIT DATA      (UNAUDITED)   (UNAUDITED)   (UNAUDITED)   (UNAUDITED)
        -------------------------------------------------------------------------
        Cash flows from
         operating
         activities       $      2,837  $      8,908  $     16,878  $     24,253
    
        Capital
         expenditures
         paid             $     (1,898) $     (2,084) $     (8,919) $     (6,690)
    
        Standardized
         distributable
         cash             $        939  $      6,824  $      7,959  $     17,563
    
        Change in
         non-cash
         working capital
         items (1)        $     17,235  $      9,254  $     36,852  $     21,555
    
        Adjusted
         distributable
         cash             $     18,174  $     16,078  $     44,811  $     39,118
    
        Adjusted
         distributable
         cash, per
         unit (2)         $       0.78  $       0.75  $       1.92  $       1.83
    
        Payout ratio
          Standardized           932.7%        117.4%        330.1%        106.4%
          Adjusted                48.2%         49.8%         58.6%         47.8%
    
        -------------------------------------------------------------------------
        Distributions
    
        Fund's units
         distributions    $      5,361  $      4,839  $     16,081  $     11,287
    
        Class B
         Exchangeable
         LP Unit
         distributions    $      1,624  $      1,397  $      4,870  $      3,265
    
        Class C
         Exchangeable
         LP Unit
         distributions    $      1,773  $      1,775  $      5,323  $      4,139
    
        Aggregate
         distributions,
         all units        $      8,758  $      8,011  $     26,274  $     18,691
    
        Aggregate
         distributions,
         all units,
         per unit (2)     $       0.38  $       0.37  $       1.13  $       0.87
    
        -------------------------------------------------------------------------
    
        (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) Distributable cash per unit and distributions declared per unit
            amounts are calculated using the diluted weighted average number of
            units.
    

    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.

    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 the 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. Investors are cautioned that EBITDA should not be construed as an alternative to net earnings for the year (as determined in accordance with GAAP) as an indicator of the Fund's performance, or as an alternative to cash flows from operating, financing and investing activities as a measure of the Fund's liquidity and cash flows. The Fund's method of calculating EBITDA may differ from the methods used by other issuers and, accordingly, the Fund's EBITDA may not be comparable to similar measures used by other issuers.

    Distributable cash

    The Fund views distributable cash as an operating performance measure and it is a non-GAAP measure generally used by Canadian income funds as an indicator of financial performance.

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

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