Press Releases

  • Wednesday, March 16, 2011
    GENIVAR REPORTS FOURTH QUARTER AND YEAR 2010 RESULTS AND DECLARES A DIVIDEND OF $0.375 PER SHARE

    MONTREAL, March 16 - GENIVAR Inc. (TSX: GNV) ("GENIVAR" or the "Corporation"), formerly GENIVAR Income Fund (the "Fund"), today announced its financial and operating results for the fourth quarter and year-end 2010. The fourth quarter results cover the period from October 3, 2010, to December 31, 2010.

    HIGHLIGHTS

    • Total revenues for the three months ended December 31, 2010, was $154.7 million, compared to $135.0 million for the fourth quarter of 2009, an increase of 14.6%. 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 $118.6 million, which represents a 9.1% increase as compared to the quarter ended December 31, 2009.
    • Revenues for the year ended December 31, 2010, were $580.4 million, compared to $477.9 million for 2009, which represents an increase of 21.4%. For the same period, net revenues amounted to $469.5 million, as compared to $395.3 million in 2009, an 18.8% increase. Of the total increases, organic growth amounted to 7.8% and 5.2% on revenues and net revenues respectively.
    • For the fourth quarter of 2010, EBITDA decreased to $19.7 million, from $21.0 million in the fourth quarter of 2009, a 6.1% decrease, largely due to the fewer number of working days during the quarter, to the slowdown of the Fund's international operations and to foreign exchange loss. For the year ended December 31, 2010, EBITDA increased by 8.0% to $84.9 million, compared with $78.6 million for the full year 2009.
    • For the fourth quarter ended December 31, 2010, net earnings amounted to $2.9 million, or $0.16 per unit, compared to net earnings of $8.2 million, or $0.47 per unit a year earlier. For 2010, net earnings amounted to $30.8 million, or $1.70 per unit, compared with net earnings of $31.1 million, or $2.06 per unit a year earlier. A future income tax liability of $5.8 million or $0.32 per unit was registered in the fourth quarter of 2010 as the result of the income trust taxation rule.
    • In 2010, the Fund generated adjustable distributable cash of $72.3 million or $2.66 per unit, of which $55.7 million was distributed to unitholders, representing annual distributions of $2.05 per unit and an adjusted payout ratio of 77.0%.
    • As at December 31, 2010, the backlog amounted to $420.0 million (8.0 months of upcoming work), compared to a backlog of $401.7 million (8.0 months of work) for the third quarter of 2010.
    • During the quarter ended December 31, 2010, the Fund extended its presence in Canada through the acquisition of three firms located in British Columbia, Alberta and Quebec. In total, during 2010, the Fund added more than 650 employees to its team, through nine acquisitions and one business partnership. Subsequent to the year-end, GENIVAR also completed an acquisition in Quebec and one in Prince Edward Island.
    • During the quarter, the Fund entered into new syndicated credit facilities, expanding the limit of its revolving credit facility from $80.0 million to $225.0 million and extending the maturity date to 2013. The agreement also included a provision to increase the new facilities from $225.0 million to $275.0 million, subject to certain conditions.
    • The Fund's income trust structure was reorganized into a public corporation known as GENIVAR Inc. The conversion, which was approved at the last unitholders meeting, took effect on January 1, 2011.

    "In line with our accomplishments since the beginning of the year, our fourth quarter performance was good, as we achieved continued growth in revenues, despite headwinds in our international operations. We are very pleased to have delivered on the financial and operating commitments that we established at the start of the year. Not only did we strengthen our core business in Canada, but we successfully implemented our Enterprise Resource Planning ("ERP") system and converted from an income fund to a corporation after the year-end. We also strengthened our balance sheet by expanding our credit facilities," stated Pierre Shoiry, President and Chief Executive Officer of GENIVAR. "We are truly excited about the prospects and growth opportunities across the firm and 2011 should be an exciting time for GENIVAR, both from a business and shareholder perspective," he added.

    DIVIDEND
    The Board of GENIVAR declared a dividend of $0.375 per share. This dividend will be payable on or about April 15, 2011, to shareholders of record at the close of business on March 31, 2011.

    Dividends paid by GENIVAR to Canadian residents on its common shares are "eligible dividends" for Canadian income tax purposes.

    FINANCIAL REPORT
    This release includes, by reference, the fourth quarter and year 2010 financial reports incorporating the financial statements in accordance with Canadian GAAP, as well as the Management Discussion & Analysis. For a copy of our full financial results for the fourth quarter and year 2010, including the Management's Discussion and Analysis and the audited Financial Statements, please visit our website at www.genivar.com or SEDAR at www.sedar.com.

    CONFERENCE CALL
    GENIVAR will hold a conference call at 4 p.m. (Eastern Time) on March 16, 2011, to discuss these results. The telephone numbers to access the conference call are as follows:

    • Montreal and International, please dial 514-861-2255
    • Elsewhere in Canada and United States, please dial 1-888-696-5910
    • Conference number: 6026618

    A presentation highlighting the results of the fourth quarter and year 2010 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 March 23, 2011. The telephone numbers to access the replay of the call are 514-861-2272 or 1-800-408-3053, passcode 6773822. 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.

    NON-GAAP MEASURES
    GENIVAR uses Non-GAAP measures that are used by Canadian corporations as indicators of financial performance measures which are not recognized under Canadian GAAP 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 measures that may assist investors in assessing an investment in shares.

    Non-GAAP measures used by GENIVAR 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 Canadian GAAP and do not have standardized meaning prescribed by Canadian 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 year (as determined in accordance with Canadian GAAP), as an indicator of GENIVAR'S performance.

    EBITDA
    EBITDA is defined as earnings before interest, tax, depreciation and amortization. EBITDA is not an earnings measure in accordance with Canadian GAAP and does not have a standardized meaning prescribed by Canadian GAAP. Investors are cautioned that EBITDA should not be construed as an alternative to net earnings for the year (as determined in accordance with Canadian GAAP) as an indicator of GENIVAR's performance, or as an alternative to cash flows from operating, financing and investing activities as a measure of the GENIVAR's liquidity and cash flows. GENIVAR's method of calculating EBITDA may differ from the methods used by other issuers and, accordingly, the GENIVAR's EBITDA may not be comparable to similar measures used by other issuers.

    Distributable cash
    GENIVAR views distributable cash as an operating performance measure. 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 Canadian 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 Canadian 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

    GENIVAR 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 units 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.

    About GENIVAR Inc.
    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 and energy, municipal infrastructure, transportation and environmental sectors. GENIVAR is one of Canada's largest engineering services firm by number of employees, with approximately 4,500 managers, professionals, technicians, technologists and support staff in more than 90 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.

    RESULTS OF OPERATIONS

         
        Fourth quarter   Year
      2010 2009 2010 2009

    IN THOUSANDS OF DOLLARS EXCEPT NUMBER OF UNITS AND PER UNIT DATA

    FOR THE PERIOD
    FROM OCTOBER 3 TO
    DECEMBER 31
    (UNAUDITED)
    FOR THE PERIOD
       FROM SEPTEMBER 27 TO
    DECEMBER 31
    (UNAUDITED)
    FOR THE PERIOD
       FROM JANUARY 1 TO
    DECEMBER 31
    (AUDITED*)
    FOR THE PERIOD
       FROM JANUARY 1 TO
    DECEMBER 31
    (AUDITED*)
    Revenues $ 154,706 $ 135,022 $ 580,431 $ 477,924
    Less: Subconsultants and other direct expenses $ 36,103 $ 26,314 $ 110,932 $ 82,597
    Net revenues $ 118,603 $ 108,708 $ 469,499 $ 395,327
    Direct project costs $ 61,597 $ 54,911 $ 238,537 $ 196,644
    Gross margin $ 57,006 $ 53,797 $ 230,962 $ 198,683
    Marketing, general, and administrative expenses (1) $ 37,338 $ 32,845 $ 146,093 $ 120,114
    EBITDA $ 19,668 $ 20,952 $ 84,869 $ 78,569
    Interest $ 696 $ 386 $ 1,483 $ 1,898
    Depreciation of property, plant and equipment $ 1,927 $ 1,676 $ 6,862 $ 6,287
    Amortization of intangible assets $ 5,099 $ 4,719 $ 19,884 $ 17,036
    Earnings before income taxes and non-controlling interest $ 11,946 $ 14,171 $ 56,640 $ 53,348
    Income taxes $ 4,923 $ 1,556 $ 6,499 $ 3,281
    Earnings before non-controlling interest $ 7,023 $ 12,615 $ 50,141 $ 50,067
    Non-controlling interest $ 4,090 $ 4,424 $ 19,302 $ 18,974
    Net earnings $ 2,933 $ 8,191 $ 30,839 $ 31,093
    Basic net earnings per unit $ 0.16 $ 0.47 $ 1.70 $ 2.06
    Weighted average number of units 18,103,589 17,297,253 18,103,589 15,071,186
    Diluted weighted average of net earnings $ 2,933 $ 12,594 $ 37,069 $ 50,067
    Diluted net earnings per unit $ 0.16 $ 0.47 $ 1.70 $ 2.06
    Diluted weighted average number of units  18,103,589 26,357,640 21,752,567 24,131,573
    * Except for non-GAAP measures.        
     
    (1) The marketing, general and administrative expenses include the exchange loss or gain.
     
    DISTRIBUTABLE CASH
     
             
        Fourth quarter   Year
      2010 2009 2010 2009
    IN THOUSANDS OF DOLLARS EXCEPT PER UNIT DATA FOR THE PERIOD
    FROM OCTOBER 3 TO
    DECEMBER 31
    (UNAUDITED)
    FOR THE PERIOD
    FROM SEPTEMBER 27 TO
    DECEMBER 31
    (UNAUDITED)
    FOR THE PERIOD
    FROM JANUARY 1 TO
    DECEMBER 31
    (AUDITED*)
    FOR THE PERIOD
    FROM JANUARY 1 TO
    DECEMBER 31
    (AUDITED*)
    Cash flows from operating activities $ 35,284 $ 35,703 $ 61,099 $ 52,581
    Capital expenditures paid ($ 3,014) ($ 3,868) ($ 11,899) ($ 12,787)

           
    Standardized distributable cash $ 32,270 $ 31,835 $ 49,200 $ 39,794
    Change in non-cash working capital items (1) ($ 16,730) ($ 16,473) $ 20,638 $ 20,379
    Capital expenditures paid for UNISON project (2) $ 737 $ 1,531 $ 2,504 $ 1,531
    Adjusted distributable cash $ 16,277 $ 16,893 $ 72,342 $ 61,704
    Adjusted distributable cash, per unit (3) $ 0.60 $ 0.64 $ 2.66 $ 2.56
    Payout ratio        
      Standardized 77.9% 70.4% 113.2% 122.3%
      Adjusted 154.4% 132.7% 77.0% 78.9%
    Distributions        
    Fund's unit distributions declared $ 16,745 $ 14,935  $ 37,112 $ 31,016
    Class B Exchangeable LP Unit distributions declared $ 4,004 $ 3,571  $ 8,874 $ 8,441
    Class C Exchangeable LP Unit distributions declared $ 4,377 $ 3,904 $ 9,700 $ 9,227
    Distributions declared, all units $ 25,126 $ 22,410 $ 55,686 $ 48,684
    Distributions declared, all units, per unit (4) $ 0.92 $ 0.83 $ 2.05 $ 1.95
    *  Except for non-GAAP measures.      
    (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 implemented 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 $2.05 per unit for the year.

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

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