Press Releases

  • Tuesday, November 9, 2010
    Third quarter yields solid results for GENIVAR Income Fund

    MONTREAL, Nov. 9 - The GENIVAR Income Fund (the "Fund") announced today its financial and operating results (unaudited) for the third quarter of 2010. These results cover the period from July 4, 2010 to October 2, 2010.

    Highlights

        - For the third quarter of 2010, revenues rose to $155.7 million, up from
          $125.4 million, representing an increase of 24.1%. Net revenues were
          $124.3 million, compared to $101.2 million, an increase of 22.8% from
          2009 to 2010. Organic growth accounted for 7.4% of the increase in net
          revenues, the remaining 15.4% resulting from acquisitions.
    
        - Net earnings were $11.1 million or $0.61 per unit on a basic and
          diluted basis for the third quarter, up from $8.8 million or $0.62 per
          unit on a basic and diluted basis achieved for the same period in 2009,
          representing an increase of 25.8%.
    
        - Earnings before non-controlling interest were $17.1 million, up from
          $14.4 million in 2009. EBITDA increased to $24.3 million in the third
          quarter of 2010 from $21.4 million for the same period in 2009.
    
        - For the third quarter of 2010, adjusted distributable cash totalled
          $22.5 million, of which $10.2 million were distributed to unitholders,
          representing an adjusted payout ratio of 45.3%.
    
        - During the third quarter, the Fund completed the acquisition of Pryde
          Schropp McComb Inc. ("PSMI"), an Ontario-based firm specializing in
          engineering, project management, planning and software solutions for
          the aviation industry. PSMI has a staff of over 40 employees based in
          offices in Ontario and Alberta and provides services to airports across
          Canada and internationally.
    
        - As at October 2, 2010, the backlog remained stable and reached
          $401.7 million, compared to $398.6 million at the end of the second
          quarter.
    
        - Subsequent to quarter-end, the Fund entered into new syndicated credit
          facilities, expanding the limit to its credit facilities from
          $82.0 million at the end of the second quarter to $225.0 million and
          extending the maturity date to 2013.
    

    "We are pleased with the robust performance of the Fund over the last nine months. We achieved it through the commitment, passion and dedication of all of our employees," said Pierre Shoiry, President and CEO of the Fund. "As a result of our recent debt financing, our solid balance sheet coupled with a healthy target pipeline, we are confident that we have positioned the firm to pursue its global diversification and growth objectives."

        Conference call
        ---------------
    

    A conference call will be held on November 9, 2010 at 4:00 p.m. (Eastern Time) to discuss these results.

    To participate in the conference call:

        - Montreal region, dial 514-861-2255.
        - Canada and United States, dial 1-866-696-5910.
    

    Enter access code 2122571.

    About GENIVAR

    GENIVAR is a leading Canadian engineering services firm providing private and public-sector clients with a comprehensive 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 and energy, municipal infrastructure, transportation and environmental sectors. GENIVAR is one of Canada's largest engineering services firms based on number of employees, with more than 4,500 managers, professionals, technicians and technologists and support staff in more than 85 locations in Canada and internationally.

    www.genivar.com

    RESULTS OF OPERATIONS

     

    -------------------------------------------------------
                                 Third quarter               Year to date
                          -------------------------------------------------------
                                  2010          2009          2010          2009
                          -------------------------------------------------------
                               FOR THE       FOR THE       FOR THE       FOR THE
        IN THOUSANDS OF    PERIOD FROM   PERIOD FROM   PERIOD FROM   PERIOD FROM
         DOLLARS EXCEPT      JULY 4 TO    JUNE 28 TO  JANUARY 1 TO  JANUARY 1 TO
         NUMBER OF UNITS     OCTOBER 2  SEPTEMBER 26     OCTOBER 2  SEPTEMBER 26
         AND PER UNIT DATA  (UNAUDITED)   (UNAUDITED)   (UNAUDITED)   (UNAUDITED)
        -------------------------------------------------------------------------
        Revenues             $ 155,655     $ 125,426     $ 425,725     $ 342,902
    
        Less:
         Subconsultants
         and other direct
         expenses             $ 31,385      $ 24,245      $ 74,829      $ 56,283
    
        Net revenues         $ 124,270     $ 101,181     $ 350,896     $ 286,619
    
        Direct project
         costs                $ 61,182      $ 49,127     $ 176,940     $ 141,733
        -------------------------------------------------------------------------
        Gross margin          $ 63,088      $ 52,054     $ 173,956     $ 144,866
    
        Marketing,
         general, and
         administrative
         expenses and
         others               $ 38,824      $ 30,669     $ 108,755      $ 87,269
        -------------------------------------------------------------------------
        EBITDA                $ 24,264      $ 21,385      $ 65,201      $ 57,617
        -------------------------------------------------------------------------
        Interest                 $ 325         $ 626         $ 787       $ 1,512
    
        Depreciation of
         property, plant
         and equipment         $ 1,730       $ 1,642       $ 4,935       $ 4,611
    
        Amortization of
         intangible assets     $ 5,102       $ 4,213      $ 14,785      $ 12,317
        -------------------------------------------------------------------------
        Earnings before
         income taxes and
         non-controlling
         interest             $ 17,107      $ 14,904      $ 44,694      $ 39,177
    
        Income taxes              $ 29         $ 479       $ 1,576       $ 1,725
        -------------------------------------------------------------------------
        Earnings before
         non-controlling
         interest             $ 17,078      $ 14,425      $ 43,118      $ 37,452
    
        Non-controlling
         interest              $ 5,978       $ 5,601      $ 15,212      $ 14,550
        -------------------------------------------------------------------------
        Net earnings          $ 11,100       $ 8,824      $ 27,906      $ 22,902
    
        Basic net earnings
         per unit               $ 0.61        $ 0.62        $ 1.54        $ 1.60
    
        Weighted average
         number of units    18,103,589    14,276,466    18,103,589    14,276,753
    
        Diluted weighted
         average of net
         earnings             $ 11,100      $ 14,439      $ 35,449      $ 37,473
    
        Diluted net
         earnings per unit      $ 0.61        $ 0.62        $ 1.54        $ 1.60
    
        Diluted weighted
         average number of
         units              18,103,589    23,351,903    22,946,778    23,352,088
        -------------------------------------------------------------------------

     

     

    DISTRIBUTABLE CASH

     

    -------------------------------------------------------
                                 Third quarter               Year to date
                          -------------------------------------------------------
                                  2010          2009          2010          2009
                          -------------------------------------------------------
                               FOR THE       FOR THE       FOR THE       FOR THE
                           PERIOD FROM   PERIOD FROM   PERIOD FROM   PERIOD FROM
        IN THOUSANDS OF      JULY 4 TO    JUNE 28 TO  JANUARY 1 TO  JANUARY 1 TO
         DOLLARS EXCEPT      OCTOBER 2  SEPTEMBER 26     OCTOBER 2  SEPTEMBER 26
         PER UNIT DATA      (UNAUDITED)   (UNAUDITED)   (UNAUDITED)   (UNAUDITED)
        -------------------------------------------------------------------------
        Cash flows from
         operating
         activities              $ 134       $ 2,837      $ 25,815      $ 16,878
    
        Capital
         expenditures paid    ($ 1,571)     ($ 1,898)     ($ 8,885)     ($ 8,919)
    
        Standardized
         distributable
         cash                 ($ 1,437)        $ 939      $ 16,930       $ 7,959
    
        Change in non-cash
         working capital
         items(1)             $ 23,770      $ 17,235      $ 37,368      $ 36,852
    
        Capital
         expenditures
         paid for UNISON
         project(2)              $ 150             -       $ 1,767             -
    
        Adjusted
         distributable
         cash                 $ 22,483      $ 18,174      $ 56,065      $ 44,811
    
        Adjusted
         distributable
         cash, per unit(3)      $ 0.83        $ 0.78        $ 2.06        $ 1.92
    
        Payout ratio
    
          Standardized          (708.9%)       932.7%        180.5%       330.10%
          Adjusted                45.3%         48.2%         54.5%        58.60%
        -------------------------------------------------------------------------
        Distributions
    
        Fund's units
         distributions
         declared              $ 6,789       $ 5,361      $ 20,367      $ 16,081
    
        Class B
         Exchangeable LP
         Unit distributions
         declared              $ 1,624       $ 1,624       $ 4,870       $ 4,870
    
        Class C
         Exchangeable LP
         Unit distributions
         declared              $ 1,774       $ 1,773       $ 5,323       $ 5,323
    
        Distributions
         declared, all
         units                $ 10,187       $ 8,758      $ 30,560      $ 26,274
    
        Distributions
         declared, all
         units, per unit(4)     $ 0.38        $ 0.38        $ 1.13        $ 1.13
        -------------------------------------------------------------------------
        (1) Distributions are based on the 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) The Fund is working towards the implementation of a new information
            management system called the UNISON project. Costs incurred for this
            project are non-recurrent and therefore are removed from the
            calculation of the Adjusted distributable cash.
        (3) Adjusted distributable cash per unit is calculated using the adjusted
            weighted average number of units, which represents the number of
            units receiving distributions.
        (4) Distributions declared per unit represent the monthly distributions
            declared. Distributions declared per unit, calculated using the
            adjusted weighted average number of units, were $0.38 per unit for
            the third quarter.

     

    NON-GAAP MEASURES

    The Fund uses Non-GAAP measures that are used by Canadian open-ended income funds as indicators of financial performance measures which are not recognized 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.

    Non-GAAP measures used by the Fund are net revenues, EBITDA, distributable cash, adjusted weighted average number of units, ratio of funded debt to EBITDA 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 period (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.

    Adjusted weighted average number of units

    Adjusted weighted average number of units represents the weighted average number of unit receiving distributions.

    Ratio of funded debt to EBITDA

    Ratio of funded debt to EBITDA represents the consolidated aggregate of all interest bearing debt on consolidated EBITDA determined on the basis of the last four full completed quarters.

    Payout ratio

    Standardized payout ratio is defined as aggregate cash distributions declared divided by standardized distributable cash. Adjusted payout ratio is defined as aggregate cash distributions declared divided by adjusted distributable cash.

    Pierre Shoiry,
    President and CEO,
    GENIVAR Income Fund,
    Tel.: 514-340-0046, ext. 5104;

    Alexandre L'Heureux,
    Chief of Financial Operations,
    GENIVAR Income Fund,
    Tel.: 514-340-0046, ext. 5310