Press Releases

  • Wednesday, August 10, 2011
    GENIVAR reports its results for the second quarter and first half of the year ended July 2, 2011 and declares a dividend of $0.375 per share

    MONTREAL, Aug. 10, 2011 - GENIVAR Inc. (TSX: GNV) ("GENIVAR" or the "Company"), formerly GENIVAR Income Fund (the "Fund"), today announced its financial and operating results for the second quarter and  first half of the year ended July 2, 2011, under the International Financial Reporting Standards ("IFRS"). The second quarter results cover the period from April 3, 2011, to July 2, 2011.

    SECOND QUARTER 2011 HIGHLIGHTS

    • Total revenues were $157.5 million compared to $144.1 million in 2010, an increase of 9.3%. For the same period, net revenues, expressed as revenues less direct costs for subconsultants and other direct expenses that are recoverable directly from the clients, amounted to $131.1 million, which represents a 10.3% increase as compared to 2010.
    • EBITDA stood at $21.6 million, as compared to $21.5 million in 2010. As a percentage of net revenues, the EBITDA margin stood at 16.5% for 2011, compared to 18.1% for 2010.
    • Net earnings amounted to $9.9 million or $0.38 per share.
    • The backlog slightly increased to $427.8 million as compared to a backlog of $423.7 million at the end of the first quarter of 2011 and represented approximately 8.0 months of revenues.
    • During the quarter, GENIVAR completed the acquisition of two environmental firms, (Groupe OptiVert Inc. in Quebec and JMH Environmental Solutions Ltd. in Alberta) and signed a business partnership agreement with WHW Architects Inc., an Atlantic Canada architectural consulting firm. Subsequent to the end of the quarter, the Company also acquired Dakins Engineering Group Ltd., an Ontario-based engineering firm specialized in controls and automation for the water and wastewater market. These complementary and strategic acquisitions add approximately 110 employees to our workforce and should provide for interesting revenue synergies within our network.

    FIRST HALF OF THE YEAR 2011 HIGHLIGHTS

    • Total revenues were $306.8 million compared to $270.1 million in 2010, an increase of 13.6%. For the same period, net revenues amounted to $257.8 million, which represents a 13.7% increase as compared to 2010.
    • EBITDA increased to $41.6 million, up from $40.0 million in 2010. As a percentage of net revenues, the EBITDA margin stood at 16.2% for 2011, compared to 17.6% for 2010. This decrease is largely due to an increase of the marketing, general and administrative expenses during the first half of the year.
    • Net earnings amounted to $26.0 million or $1.00 per share.

    "After a slow start of the quarter, we ended it on a strong note, which is a positive sign for the second half of 2011," stated Pierre Shoiry, President and Chief Executive Officer of GENIVAR. "We are also noticing increased M&A discussions, hence our confidence to deliver on our strategic plan for 2011 and beyond," he added.

    DIVIDEND
    The Board of GENIVAR declared a dividend of $0.375 per share. This dividend will be payable on or about October 15, 2011, to shareholders of record at the close of business on September 30, 2011.

    FINANCIAL REPORT
    This release includes, by reference, the second quarter 2011 financial reports incorporating the unaudited interim consolidated financial statements and the Management Discussion & Analysis ("MD&A").

    In 2011, GENIVAR reports its financial results in accordance with IFRS, as required for public companies in Canada. Previously, the Company prepared its financial results under Canadian Generally Accepted Accounting Standards (GAAP). The comparative financial information has been restated to reflect the adoption of IFRS, with effect from January 1, 2010.

    The Company has included reconciliations between IFRS and the amounts previously reported under GAAP in its second quarter of 2011 interim financial statements and in the MD&A. For a copy of our full financial results for the second quarter 2011, including the MD&A and the unaudited interim consolidated financial statements, please visit our Website at www.genivar.com.

    CONFERENCE CALL
    GENIVAR will hold a conference call at 4 p.m. (Eastern Time) on August 10, 2011, to discuss these results. The telephone numbers to access the conference call are as follows:

    • Montreal and International, please dial 514-861-2909
    • Elsewhere in Canada and United States, please dial 877-695-6175
    • Conference number: 6026618

    A presentation highlighting the results of the second quarter 2011 will be available on the same day in the Investor section of GENIVAR's Website (www.genivar.com), under Presentations and Events.

    A replay of the call will be available until August 17, 2011. The telephone numbers to access the replay of the call are 514-861-2272 or 800-408-3053, password 8735125. The replay of the conference call will also be available in the Investor section of the Website under Presentations and Events, in the days following the event.

    RESULTS OF OPERATIONS

         
         
      Second quarter Year to date
      2011 2010 2011 2010

    IN THOUSANDS OF DOLLARS EXCEPT NUMBER OF
    SHARES/UNITS AND PER SHARE/UNIT DATA

    FOR THE PERIOD
    FROM APRIL 3
    TO JULY 2
    (UNAUDITED)
    FOR THE PERIOD
    FROM APRIL 4
    TO JULY 3
    (UNAUDITED)
    FOR THE PERIOD
    FROM JANUARY 1
    TO JULY 2
    (UNAUDITED)
    FOR THE PERIOD
    FROM JANUARY 1
    TO JULY 3
    (UNAUDITED)
    Revenues $ 157,496 $ 144,109 $ 306,817 $ 270,070
    Less: Subconsultants and other direct expenses $ 26,394 $ 25,295 $ 49,062 $ 43,444
    Net revenues $ 131,102 $ 118,814 $ 257,755 $ 226,626
    Direct project costs $ 67,438 $ 60,228 $ 131,569 $ 115,758
    Gross margin $ 63,664 $ 58,586 $ 126,186 $ 110,868
    Marketing, general and administrative expenses $ 42,049 $ 37,056 $ 84,557 $ 70,874
    EBITDA $ 21,615 $ 21,530 $ 41,629 $ 39,994
    Amortization of intangible assets $ 4,019 $ 4,007 $ 8,586 $ 8,150
    Depreciation of property, plant and equipment $ 1,665 $ 1,563 $ 3,528 $ 2,930
    Financial expenses* $ 1,193 ($ 20,183) $ 2,191 ($ 3,388)
    Earnings before income taxes $ 14,738 $ 36,143 $ 27,324 $ 32,302
    Income tax expenses $ 4,863 $ 721 $ 1,335 $ 2,108
    Net earnings $ 9,875 $ 35,422 $ 25,989 $ 30,194
    Basic net earnings per share/unit $ 0.38 $ 1.96 $ 1.00 $ 1.67
    Diluted net earnings per share/unit $ 0.38 $ 0.65 $ 1.00 $ 1.05
    Adjusted net earnings $ 9,875 $ 15,038 $ 25,989 $ 26,344
    Adjusted net earnings per share/unit $ 0.38 $ 0.55 $ 1.00 $ 0.97
    Weighted average number of shares/units 26,021,567 18,103,589 26,018,733 18,103,589
    Diluted weighted average number of shares/units  26,021,567 23,480,082 26,018,733 25,342,050

    In 2011, the financial expenses included interest expenses only. The 2010 financial expenses included the unrealized gain arising from changes in fair value of financial liability related to LP Units of $22,650 for the second quarter and $9,513 for the first half of the year, less the distributions on this financial liability of $2,266 for the second quarter and $5,663 for the first half of the year and the interest expenses.

    FUNDS FROM OPERATIONS AND FREE CASH FLOW

         
      Second quarter Year to date
      2011 2010 2011 2010

    IN THOUSANDS OF DOLLARS

    FOR THE PERIOD
    FROM APRIL 3
    TO JULY 2
    (UNAUDITED)
    FOR THE PERIOD
    FROM APRIL 4
    TO JULY 3
    (UNAUDITED)
    FOR THE PERIOD
    FROM JANUARY 1
    TO JULY 2
    (UNAUDITED)
    FOR THE PERIOD
    FROM JANUARY 1
    TO JULY 3
    (UNAUDITED)
    Cash flows from operating activities $ 3,967 $ 9,238 $ 6,032 $ 25,622
    Change in non-cash working capital items $ 12,067 $ 11,937 $ 28,780 $ 13,139
    Funds from operations $ 16,034 $ 21,175 $ 34,812  $ 38,761
    Funds from operations per share/unit $ 0.62 $ 0.78 $ 1.34  $ 1.43
    Less:        
    Change in non-cash working capital items ($ 12,067) ($ 11,937) ($ 28,780) ($ 13,139)
    Capital expenditures ($ 2,259) ($ 3,106) ($ 4,417) ($ 7,767)
    Free cash flow $ 1,708 $ 6,132 $ 1,615 $ 17,855
    Free cash flow per share/unit $ 0.07 $ 0.23 $ 0.06 $ 0.66

    NON-IFRS MEASURES

    GENIVAR uses non-IFRS measures that are used by Canadian companies as indicators of financial performance measures which are not recognized under IFRS and may differ from similar computations as reported by other similar entities and, accordingly, may not be comparable. GENIVAR believes these measures are useful supplemental information that may assist investors in assessing an investment in shares.

    Non-IFRS measures used by GENIVAR are net revenues, EBITDA, EBITDA per share/unit, income taxes per share/unit, adjusted net earnings, adjusted net earnings per share/unit, funds from operations, funds from operations per share/unit, free cash flow, free cash flow per share/unit and adjusted weighted average number of shares/units.

    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 is not an IFRS measure and does not have a standardized definition within IFRS. Therefore, net revenues may not be comparable to similar measures presented by other issuers. Investors are warned that net revenues should not be construed as an alternative to revenues for the period (as determined in accordance with IFRS) as an indicator of GENIVAR's performance.

    EBITDA and EBITDA per share/unit
    EBITDA is defined as earnings before financial expenses, tax, depreciation and amortization. EBITDA is not an IFRS measure and does not have a standardized definition within IFRS. Investors are cautioned that EBITDA should not be considered an alternative to net earnings for the period (as determined in accordance with IFRS) as an indicator of GENIVAR's performance, or an alternative to cash flows from operating, financing and investing activities as a measure of GENIVAR's liquidity and cash flows. GENIVAR's method of calculating EBITDA may differ from the methods used by other issuers and, accordingly, GENIVAR's EBITDA may not be comparable to similar measures used by other issuers.

    EBITDA per share/unit is calculated using the adjusted weighted average number of shares/units.

    Income taxes per share/unit
    Income taxes per share/unit is defined as the income tax expenses on the diluted weighted average number of shares/units.

    Adjusted net earnings
    Adjusted net earnings is not an IFRS measure and is defined as net earnings without the income and expenses of the financial liability related to LP Units under IFRS and the share in earnings of the non-controlling interest under the Canadian GAAP.

    Adjusted net earnings per share/unit
    Adjusted net earnings per share/unit is calculated using the adjusted net earnings divided by the adjusted weighted average number of shares/units.

    Funds from operations and funds from operations per share/unit
    Funds from operations is not an IFRS measure. It provides management and investors with a proxy for the amount of cash generated from operating activities before changes in non-cash working capital. Funds from operations per share/unit is calculated using the adjusted weighted average number of shares/units.

    Free cash flow and free cash flow per share/unit
    Free cash flow is not an IFRS measure. It provides a consistent and comparable measurement of free cash flow across entities generated from operations and is used as an indicator of financial strength and performance.

    Free cash flow is defined as cash flows from operating activities, including operating cash flows provided from or used in discontinued operations as reported in accordance with IFRS, less total capital expenditures as reported in the financial statements.

    Free cash flow per share/unit is calculated using the adjusted weighted average number of shares/units.

    Adjusted weighted average number of shares/units
    The adjusted weighted average number of shares/units represents the weighted average number of shares/units receiving dividends/distributions.

    ABOUT GENIVAR INC.
    GENIVAR is a leading Canadian 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 and energy, municipal infrastructure, transportation and environmental sectors. GENIVAR is one of Canada's largest services firm by number of employees, with approximately 4,700 managers, professionals, technicians, technologists and support staff in more than 100 offices in Canada and internationally.
    www.genivar.com

    Forward-Looking Statements
    Certain information regarding GENIVAR contained herein may constitute forward-looking statements. Forward-looking statements may include estimates, plans, expectations, opinions, forecasts, projections, guidance or other statements that are not statements of fact. Although GENIVAR believes that the expectations reflected in such forward-looking statements are reasonable, it can give no assurance that such expectations will prove to have been correct. These statements are subject to certain risks and uncertainties and may be based on assumptions that could cause actual results to differ materially from those anticipated or implied in the forward-looking statements. GENIVAR's forward-looking statements are expressly qualified in their entirety by this cautionary statement.

    Alexandre L'Heureux
    Chief Financial Officer
    GENIVAR Inc.
    Tel.: 514-340-0046, ext. 5310
    alexandre.lheureux@genivar.com

    Isabelle Adjahi
    Director, Communications and Investor Relations
    GENIVAR Inc.
    Tel.: 514-340-0046, ext. 5648
    isabelle.adjahi@genivar.com