Press Releases

  • Monday, August 10, 2009
    GENIVAR Income Fund Announces Growth in Revenues and Earnings for the Second Quarter of 2009

    MONTREAL, Aug. 10 - GENIVAR Income Fund (the "Fund") announced today its financial and operating results (unaudited) for the second quarter of 2009. These results cover the period from March 29, 2009, to June 27, 2009.

    Highlights
    
        - For the second quarter of 2009, revenues were $120.0 million up from
          $97.3 million for the same period in 2008, representing an increase of
          23.3%. Net revenues were $100.6 million compared to $80.9 million, an
          increase of 24.4% from 2008 to 2009. Organic growth accounted for
          almost half of the increase in revenues and net revenues, the remaining
          increase being generated by the acquisitions completed since the second
          quarter of 2008.
    
        - Net earnings were $7.7 million for the second quarter, a 15.1% increase
          from the amount of $6.7 million achieved for the same period in 2008.
    
        - Earnings before non controlling interest were $12.6 million or $0.54
          per unit on a diluted basis for the second quarter, up 13.9% from
          $11.1 million or $0.52 per unit on a diluted basis generated in the
          same quarter of 2008. EBITDA increased 11.7% from $17.5 million in the
          second quarter of 2008 to $19.5 million for the same period in 2009.
          The results of the second quarter of 2009 were negatively impacted by
          an exchange loss of $1.1 million as a result of the stronger Canadian
          dollar. Without the impact of the exchange loss, EBITDA would have been
          $20.6 million and our earnings before non-controlling interest would
          have been $0.59 per unit on a diluted basis for the second quarter.
    
        - For the second quarter of 2009, adjusted distributable cash totalled
          $14.5 million of which $8.8 million were distributed to unitholders,
          representing an adjusted payout ratio of 60.4%. For the six-month
          period ended June 27, 2009, adjusted distributable cash totalled
          $26.6 million, of which $17.5 million were distributed to unitholders,
          representing an adjusted payout ratio of 65.8%.
    
        - During the second quarter of 2009, the Fund added approximately
          125 employees with the acquisitions of Algal & Associates, a leading
          provider of electrical engineering services for power generation,
          transmission and distribution systems, Jagger Hims Limited, an Ontario-
          based earth and environmental firm, and ENAQ, a specialized nuclear
          engineering firm.
    
        - Subsequent to the quarter-end, the Fund completed the acquisition of
          Walker Engineering, a Sault Ste. Marie multidisciplinary engineering
          firm.
    
        - As of June 27, 2009, backlog remained steady at $321.3 million.
    

    "Despite a challenging business environment and softer conditions in specific market and regions, we see very positive signs during this second quarter as proposal activity remained strong, organic growth was at the higher end of our 5-10% target and private sector showed signs of recovery," said Pierre Shoiry, President and CEO of the GENIVAR Income Fund.

    "These factors provide for a promising base for the remainder of 2009 and beyond, and the pipeline for acquisitions is good, which should yield continued growth for the Fund," concluded Pierre Shoiry.

    Conference call
    
        A conference call will be held on August 11, 2009 at 4:00 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 7283034
    

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

    The 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 complete range of professional consulting services throughout all project phases, including planning, design, construction and maintenance. Ranging in size and scope, GENIVAR's clients primarily operate in the building, industrial, power, municipal infrastructure, transportation and environmental sectors. GENIVAR is one of Canada's largest consulting engineering services firms by number of employees, with around 3,800 managers, professionals, technicians, technologists and support staff in more than 70 locations in Canada and internationally (www.genivar.com).

        RESULTS OF OPERATIONS
        ---------------------
        ---------------------
    
                             ----------------------------------------------------
                                         3 months                  6 months
                             ----------------------------------------------------
                                     2009         2008         2009         2008
                             ----------------------------------------------------
                                  FOR THE      FOR THE      FOR THE      FOR THE
                              PERIOD FROM  PERIOD FROM  PERIOD FROM  PERIOD FROM
        IN THOUSANDS OF          MARCH 29     MARCH 30    JANUARY 1    JANUARY 1
         DOLLARS EXCEPT PER    TO JUNE 27   TO JUNE 28   TO JUNE 27   TO JUNE 28
         UNIT DATA             (UNAUDITED)  (UNAUDITED)  (UNAUDITED)  (UNAUDITED)
        -------------------------------------------------------------------------
        Revenues                $ 120,045     $ 97,348    $ 217,476    $ 167,435
    
        Deduct: Subconsultants
         and other direct
         expenses                $ 19,411     $ 16,479     $ 32,038     $ 26,418
    
        Net revenues            $ 100,634     $ 80,869    $ 185,438    $ 141,017
    
        Direct project costs     $ 50,212     $ 40,429     $ 92,606     $ 70,611
        -------------------------------------------------------------------------
        Gross margin             $ 50,422     $ 40,440     $ 92,832     $ 70,406
    
        Marketing, general,
         and administrative
         expenses and others     $ 30,915     $ 22,977     $ 56,600     $ 41,065
        -------------------------------------------------------------------------
        EBITDA                   $ 19,507     $ 17,463     $ 36,232     $ 29,341
        -------------------------------------------------------------------------
        Interest                    $ 567        $ 592        $ 886        $ 713
    
        Depreciation of
         property, plant
         and equipment            $ 1,571      $ 1,033      $ 2,969      $ 1,887
    
        Amortization of
         intangible assets        $ 3,961      $ 3,783      $ 8,104      $ 7,223
        -------------------------------------------------------------------------
        Earnings before
         income taxes and
         non-controlling
         interest                $ 13,408     $ 12,055     $ 24,273     $ 19,518
    
        Income taxes                $ 799        $ 986      $ 1,246        $ 879
        -------------------------------------------------------------------------
        Earnings before
         non-controlling
         interest                $ 12,609     $ 11,069     $ 23,027     $ 18,639
    
        Non-controlling interest  $ 4,935      $ 4,403      $ 8,949      $ 7,375
        -------------------------------------------------------------------------
        Net earnings              $ 7,674      $ 6,666     $ 14,078     $ 11,264
    
        Basic net earnings
         per unit                  $ 0.54       $ 0.52       $ 0.99       $ 0.88
    
        Weighted average
         number of units       14,276,730   12,870,364   14,276,900   12,870,512
    
        Diluted net earnings
         per unit                  $ 0.54       $ 0.52       $ 0.99       $ 0.88
    
        Diluted weighted
         average number
         of units              23,348,960   21,350,781   23,348,944   21,350,786
        -------------------------------------------------------------------------
    
    
    
        DISTRIBUTABLE CASH
        ------------------
        ------------------
    
                             ----------------------------------------------------
                                         3 months                  6 months
                             ----------------------------------------------------
                                     2009         2008         2009         2008
                             ----------------------------------------------------
                                  FOR THE      FOR THE      FOR THE      FOR THE
                              PERIOD FROM  PERIOD FROM  PERIOD FROM  PERIOD FROM
        IN THOUSANDS OF          MARCH 29      MARCH 30   JANUARY 1    JANUARY 1
         DOLLARS EXCEPT        TO JUNE 27    TO JUNE 28  TO JUNE 27   TO JUNE 28
         PER UNIT DATA         (UNAUDITED)   (UNAUDITED) (UNAUDITED)  (UNAUDITED)
        -------------------------------------------------------------------------
        Cash flows from
         operating activities       $ 991       $ 7,954    $ 14,041     $ 15,345
    
        Capital expenditures
         paid                    ($ 3,475)     ($ 2,676)   ($ 7,021)    ($ 4,606)
    
        Standardized
         distributable cash      ($ 2,484)      $ 5,278     $ 7,020     $ 10,739
    
        Change in non-cash
         working capital
         items(1)                $ 16,996       $ 7,964    $ 19,617     $ 12,301
    
        Adjusted distributable   $ 14,512      $ 13,242    $ 26,637     $ 23,040
         cash
    
        Adjusted distributable
         cash, per unit(2)         $ 0.62        $ 0.62      $ 1.14       $ 1.08
    
        Payout ratio
    
          Standardized             (352.6%)       101.2%      249.5%        99.5%
          Adjusted                   60.4%         40.3%       65.8%        46.4%
        -------------------------------------------------------------------------
        Distributions
    
        Fund's units
         distributions             $ 5,360      $ 3,224    $ 10,720      $ 6,448
    
        Class B Exchangeable
         LP Unit distributions     $ 1,623        $ 934     $ 3,246      $ 1,868
    
        Class C Exchangeable
         LP Unit distributions     $ 1,775      $ 1,182     $ 3,550      $ 2,364
    
        Aggregate distributions,
         all units                 $ 8,758      $ 5,340    $ 17,516     $ 10,680
    
        Aggregate distributions,
         all units, per unit(2)     $ 0.38       $ 0.25      $ 0.75       $ 0.50
        -------------------------------------------------------------------------
        (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 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 CEO,
    GENIVAR Income Fund,
    (514) 340-0046, ext. 5104;

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