Press Releases

  • Tuesday, August 10, 2010
    GENIVAR Income Fund Announces Second Quarter Results

    MONTREAL, Aug. 10 - The GENIVAR Income Fund (the "Fund") announced today its financial and operating results (unaudited) for the second quarter of 2010. These results cover the period from April 4, 2010 to July 3, 2010.

    Highlights
    
        -   Revenues for the second quarter of 2010 increased by 20.0% to
            $144.1 million, up from $120.0 million for the same period in 2009.
            Net revenues were $118.8 million compared to $100.6 million,
            an increase of 18.1% from 2009 to 2010. Organic growth for the second
            quarter respectively accounted for 7.2% and 5.2% of the increase of
            revenues and net revenues, the remaining increase being generated by
            the acquisitions completed since the second quarter of 2009.
    
        -   Net earnings were $9.5 million or $0.52 per unit on a basic and
            diluted basis for the second quarter, a 23.2% increase from the
            amount of $7.7 million achieved for the same period in 2009.
    
        -   Earnings before non-controlling interest were $15.0 million for the
            second quarter of 2010. EBITDA increased by 14.9% from $19.5 million
            in the second quarter of 2009 to $22.4 million for the same period
            this year.
    
        -   For the second quarter of 2010, adjusted distributable cash totalled
            $19.6 million or $0.72 per unit, of which $10.2 million was
            distributed to unitholders, representing an adjusted payout ratio of
            52.1%.
    
        -   As at July 3, 2010, backlog stood at $398.6 million and represented
            8.3 months of upcoming work. Several new private sector mandates in
            the industrial, energy and buildings markets were awarded to the Fund
            in this second quarter while public sector work remained steady.
    
        -   The Fund added approximately 235 employees in the second quarter of
            2010 with 4 acquisitions; one of which Terrain Group Inc. provided
            GENIVAR with a platform of 5 offices in New Brunswick and Nova Scotia
            to grow its business in Atlantic Canada.
    
        -   On April 16, 2010, the Fund announced a plan of arrangement to
            convert from an Income Trust structure to a publicly-traded
            corporation on or about January 1, 2011. This plan of arrangement was
            approved by the unitholders of the Fund on May 27, 2010, as well as
            by the Superior Court of Quebec on June 14, 2010.

    "The Fund continued to execute its consolidation strategy in Canada and we believe that the fundamentals of the consulting engineering industry in our country remain solid and that the outlook is positive in our market segments" said Pierre Shoiry, President and CEO of the Fund. "With the addition of Terrain Group Inc., we are now established in Atlantic Canada and in a position to serve our clients from coast to coast", he added. "First semester results for fiscal 2010 are robust which bode well for the full year", concluded Shoiry.

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

    A conference call will be held on August 10, 2010 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 1-888-789-9572

    Enter access code 7287206

    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, 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

    ----------------------------------------------------
                                       Second quarter             Year to date
                             ----------------------------------------------------
                                     2010         2009         2010         2009
                             ----------------------------------------------------
        IN THOUSANDS OF           FOR THE      FOR THE      FOR THE      FOR THE
         DOLLARS EXCEPT       PERIOD FROM  PERIOD FROM  PERIOD FROM  PERIOD FROM
         THE NUMBER OF            APRIL 4     MARCH 29    JANUARY 1    JANUARY 1
         UNITS AND PER          TO JULY 3   TO JUNE 27    TO JULY 3   TO JUNE 27
         UNIT DATA             (UNAUDITED)  (UNAUDITED)  (UNAUDITED)  (UNAUDITED)
        -------------------------------------------------------------------------
        Revenues                $ 144,109    $ 120,045    $ 270,070    $ 217,476
    
        Less: Subconsultants
         and other direct
         expenses                $ 25,295     $ 19,411     $ 43,444     $ 32,038
    
        Net revenues            $ 118,814    $ 100,634    $ 226,626    $ 185,438
    
        Direct project costs     $ 60,228     $ 50,212    $ 115,758     $ 92,606
        -------------------------------------------------------------------------
        Gross margin             $ 58,586     $ 50,422    $ 110,868     $ 92,832
    
        Marketing, general,
         and administrative
         expenses and others     $ 36,177     $ 30,915     $ 69,931     $ 56,600
        -------------------------------------------------------------------------
        EBITDA                   $ 22,409     $ 19,507     $ 40,937     $ 36,232
        -------------------------------------------------------------------------
        Interest                    $ 201        $ 567        $ 462        $ 886
    
        Depreciation of
         property, plant
         and equipment            $ 1,695      $ 1,571      $ 3,205      $ 2,969
    
        Amortization of
         intangible assets        $ 4,951      $ 3,961      $ 9,683      $ 8,104
        -------------------------------------------------------------------------
        Earnings before
         income taxes and
         non-controlling
         interest                $ 15,562     $ 13,408     $ 27,587     $ 24,273
    
        Income taxes                $ 548        $ 799      $ 1,547      $ 1,246
        -------------------------------------------------------------------------
        Earnings before
         non-controlling
         interest                $ 15,014     $ 12,609     $ 26,040     $ 23,027
    
        Non-controlling
         interest                 $ 5,557      $ 4,935      $ 9,234      $ 8,949
        -------------------------------------------------------------------------
        Net earnings              $ 9,457      $ 7,674     $ 16,806     $ 14,078
    
        Basic net earnings
         per unit                  $ 0.52       $ 0.54       $ 0.93       $ 0.99
    
        Weighted average
         number of units       18,103,589   14,276,730   18,103,589   14,276,900
    
        Diluted net earnings
         per unit                  $ 0.52       $ 0.54       $ 0.93       $ 0.99
    
        Diluted weighted
         average number
         of units              23,480,082   23,348,960   25,342,050   23,348,944
        -------------------------------------------------------------------------

    DISTRIBUTABLE CASH

    ----------------------------------------------------
                                       Second 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           APRIL 4     MARCH 29    JANUARY 1    JANUARY 1
         DOLLARS EXCEPT         TO JULY 3   TO JUNE 27    TO JULY 3   TO JUNE 27
         PER UNIT DATA         (UNAUDITED)  (UNAUDITED)  (UNAUDITED)  (UNAUDITED)
        -------------------------------------------------------------------------
        Cash flows from
         operating activities     $ 9,481        $ 991     $ 25,681     $ 14,041
    
        Capital expenditures
         paid                    ($ 2,864)    ($ 3,475)    ($ 7,314)    ($ 7,021)
    
        Standardized
         distributable cash       $ 6,617     ($ 2,484)    $ 18,367      $ 7,020
    
        Change in non-cash
         working capital
         items(1)                $ 12,396     $ 16,996     $ 13,598     $ 19,617
    
        Capital expenditures
         paid for UNISON
         project(2)                 $ 545            -      $ 1,617            -
    
        Adjusted
         distributable cash      $ 19,558     $ 14,512     $ 33,582     $ 26,637
    
        Adjusted
         distributable cash,
         per unit(3)               $ 0.72       $ 0.62       $ 1.24       $ 1.14
    
        Payout ratio
    
          Standardized              154.0%      (352.6%)      110.9%       249.5%
    
          Adjusted                   52.1%        60.4%        60.7%        65.8%
        -------------------------------------------------------------------------
        Distributions
    
        Fund's units
         distributions declared   $ 6,789      $ 5,360     $ 13,578     $ 10,720
    
        Class B Exchangeable
         LP Unit distributions
         declared                 $ 1,623      $ 1,623      $ 3,246      $ 3,246
    
        Class C Exchangeable
         LP Unit distributions
         declared                 $ 1,775      $ 1,775      $ 3,549      $ 3,550
    
        Distributions declared,
         all units               $ 10,187      $ 8,758     $ 20,373     $ 17,516
    
        Distributions declared,
         all units, per unit(4)    $ 0.38       $ 0.38       $ 0.75       $ 0.75
        -------------------------------------------------------------------------
        (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) 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 weighted
            average 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 second 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 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.

    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; Marlene Casciaro, Director of Communications, GENIVAR Income Fund, Tel.: 514-340-0046, ext. 5184