Press Releases

  • Thursday, August 9, 2012
    GENIVAR Reports its Results for the Second Quarter and First Half of the Year 2012 and Declares a Dividend of $0.375 per Share

    MONTREAL, QUEBEC--(Aug. 9, 2012) - GENIVAR Inc. (TSX:GNV) ("GENIVAR" or the "Corporation") today announced its financial and operating results for the second quarter and first half of the year ended June 30, 2012. The second quarter results cover the period from April 1, 2012, to June 30, 2012.

    The main highlight of the quarter was GENIVAR's announcement of its intention to acquire all issued and outstanding shares of WSP Group plc ("WSP"), a global multi-disciplinary professional services consultancy based in London, U.K. This combination has positioned GENIVAR as a leading global firm with broadened services, end markets and a worldwide operating platform. Financial results for the second quarter and first half of 2012 include $12.3 million in non-recurring transaction costs related to the acquisition of WSP, which was closed on August 1, 2012.

    SECOND QUARTER OF 2012 HIGHLIGHTS

    • Total revenues were $181.2 million compared to $157.5 million in 2011, an increase of 15.0%. Net revenues, expressed as revenues less direct costs for subconsultants and other direct expenses that are recoverable directly from the clients, amounted to $149.6 million, representing a 14.1% increase as compared to 2011. Organic growth on net revenues accounted for 2.6% of the increase, while the remaining 11.5% was generated through business combinations.
    • Adjusted EBITDA stood at $21.0 million, compared to $21.6 million in 2011. Taking non-recurring transaction costs into account, EBITDA for the quarter was $8.8 million.
    • The Company reported adjusted net earnings of $8.6 million or $0.26 per share, on a basic and diluted basis, as compared to net earnings of $9.9 million or $0.38 per share, on a basic and diluted basis, in 2011. The reduction in the adjusted net earnings per share is a result of the additional 6,500,000 shares issued on December 2011. Taking non-recurring transaction costs into account, the Company reported a net loss of $3.0 million or $0.09 per share.
    • The backlog stood at $468.8 million compared to a backlog of $454.0 million at the end of the first quarter of 2012, representing an increase of 3.3%, and approximately 8.0 months of revenues.
    • As part of the financing of the WSP transaction, GENIVAR completed a $225.0 million public bought deal offering of subscription receipts, a $197.1 million concurrent private placement of subscription receipts with the Canada Pension Plan Investment Board ("CPPIB") and the Caisse de dépôt et placement du Québec ("the Caisse"), as well as obtaining new credit facilities. CPPIB and the Caisse now beneficially own, or exercise control or direction over, directly or indirectly, an aggregate of 7,491,787 and 7,483,953 common shares, respectively, representing approximately 14.8% each, of the issued and outstanding common shares, which amounts to 50,751,899 shares as at August 8, 2012.
    • The Company also implemented a Dividend Reinvestment Plan (the "DRIP") to enable eligible holders of common shares to reinvest cash dividends into additional common shares. For the July 15, 2012, declared dividend and dividend equivalent, 34.3% of common shares issued and outstanding have been enrolled in the DRIP.
    • GENIVAR acquired North 46 Architecture Inc., a Charlottetown, Prince Edward Island-based professional services firm specialized in architecture, thus strengthening its building expertise in Atlantic Canada.

    FIRST HALF OF THE YEAR 2012 HIGHLIGHTS

    • Total revenues were $344.9 million compared to $306.8 million in 2011, an increase of 12.4%. For the same period, net revenues amounted to $286.8 million, which represents an 11.3% increase as compared to 2011.
    • Adjusted EBITDA stood at $42.3 million, up from $41.6 million in 2011. Taking non-recurring transaction costs into account, EBITDA for the first half of the year stood at $30.1 million.
    • Adjusted net earnings amounted to $18.7 million or $0.57 per share, as compared to $18.8 million or $0.72 per share in 2011. The reduction in the adjusted net earnings per share is a result of the additional 6,500,000 shares issued on December 2011. Taking non-recurring transactions costs into account, net earnings for the first half of the year amounted to $7.1 million or $0.22 per share.

    "This has been a transformational quarter for GENIVAR with the announcement and the subsequent closing of the WSP transaction. This combination allows us to immediately achieve our 2015 stated international expansion plan. We could not have found a better partner to do so, as WSP and GENIVAR are totally aligned in terms of business model, culture and vision, while our geographies and markets are complementary. Now that the transaction is closed, we are delighted to welcome Christopher Cole to our Board of Directors and are already at work with the integration of our businesses," stated Pierre Shoiry, President and Chief Executive Officer of GENIVAR. "On the operational front, we saw strong growth in our revenues during the quarter. However, our net earnings were soft because of a more competitive environment and transportation investment changes in Alberta. As a result, we have adjusted our resources accordingly. However, with the increase of our backlog and an active prospect and proposal demand, we remain positive for the rest of the year's outlook and the corresponding financial performance," he added.

    DIVIDEND

    The Board of GENIVAR declared a dividend of $0.375 per share. This dividend will be payable on or around October 15, 2012, to shareholders of record at the close of business on September 30, 2012.

    FINANCIAL REPORT

    This release includes, by reference, the 2012 second quarter financial reports, including the unaudited condensed interim consolidated financial statements and the Management Discussion & Analysis ("MD&A") of the Company.

    For a copy of our full financial results for the second quarter 2012, 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 9, 2012, 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 877-405-9213.
    • Conference number: 2130794

    A presentation highlighting the results of the second quarter of 2012 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 16, 2012. The telephone numbers to access the replay of the call are 514-861-2272 or 800-408-3053, password 9967574. 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
        2012     2012
    without transaction costs*
      2011   2012   2012
    without transaction costs*
      2011
    IN THOUSANDS OF DOLLARS EXCEPT NUMBER OF SHARES AND PER SHARE DATA  
    FOR THE PERIOD FROM
    APRIL 1 TO JUNE 30
       
    FOR THE
    PERIOD FROM APRIL 1 TO
    JUNE 30
     
    FOR THE PERIOD FROM APRIL 3 TO JULY 2
     
    FOR THE PERIOD FROM JANUARY 1 TO JUNE 30
     
    FOR THE
    PERIOD FROM JANUARY 1 TO JUNE 30
     
    FOR THE PERIOD FROM JANUARY 1 TO JULY 2
    Revenues   $ 181,198     $ 181,198   $ 157,496   $ 344,934   $ 344,934   $ 306,817
    Less: Subconsultants and other direct expenses   $ 31,570     $ 31,570   $ 26,394   $ 58,115   $ 58,115   $ 49,062
    Net revenues**   $ 149,628     $ 149,628   $ 131,102   $ 286,819   $ 286,819   $ 257,755
    Direct project costs   $ 80,492     $ 80,492   $ 67,438   $ 150,053   $ 150,053   $ 131,569
    Gross margin   $ 69,136     $ 69,136   $ 63,664   $ 136,766   $ 136,766   $ 126,186
    Marketing, general and administrative expenses(1)   $ 60,370     $ 48,101   $ 42,049   $ 106,702   $ 94,433   $ 84,557
    EBITDA**   $ 8,766     $ 21,035   $ 21,615   $ 30,064   $ 42,333   $ 41,629
    Amortization of intangible assets   $ 4,492     $ 4,492   $ 4,019   $ 8,763   $ 8,763   $ 8,586
    Depreciation of property, plant and equipment   $ 2,528     $ 2,528   $ 1,665   $ 4,758   $ 4,758   $ 3,528
    Financial expenses   $ 1,842     $ 1,842   $ 1,193   $ 2,544   $ 2,544   $ 2,191
    Earnings (loss) before income taxes   ($ 96 )   $ 12,173   $ 14,738   $ 13,999   $ 26,268   $ 27,324
    Income tax expenses   $ 2,893     $ 3,563   $ 4,863   $ 6,890   $ 7,560   $ 1,335
    Net earnings (loss)   ($ 2,989 )       $ 9,875   $ 7,109       $ 25,989
    Attributable to:                          
      - Shareholders   ($ 3,002 )       $ 9,875   $ 7,083       $ 25,989
      - Non-controlling interest   $ 13         -   $ 26       -
    Basic and diluted net earnings (loss) per share   ($ 0.09 )       $ 0.38   $ 0.22       $ 1.00
    Basic and diluted weighted average number of shares   32,856,856     32,856,856   26,021,567   32,762,467   32,762,467   26,018,733
    * The financial results are presented before the impact of the transaction costs amounting to $12,269, net of income taxes of $670, pertaining to the acquisition of WSP.
       
    ** Non-IFRS measures are described below.
       
    (1) The marketing, general and administrative expenses include the exchange loss or gain and the interest revenues.

    RECONCILIATION OF NET EARNINGS AND ADJUSTED NET EARNINGS

      Second quarter   Year-to-date  
      2012   2011   2012   2011  
    IN THOUSANDS OF DOLLARS EXCEPT PER SHARE DATA
    FOR THE PERIOD FROM APRIL 1 TO JUNE 30
     
    FOR THE PERIOD FROM APRIL 3 TO JULY 2
     
    FOR THE PERIOD FROM JANUARY 1 TO JUNE 30
     
    FOR THE PERIOD FROM JANUARY 1 TO JULY 2
     
    Net earnings (loss) ($ 2,989 ) $ 9,875   $ 7,109   $ 25,989  
    Transaction Costs of WSP $ 12,269   -   $ 12,269   -  
    Income taxes related to Transaction Costs ($ 670 ) -   ($ 670 ) -  
    Deferred income tax recovery -   -   -   ($ 7,180 )
    Adjusted net earnings* $ 8,610   $ 9,875   $ 18,708   $ 18,809  
    Adjusted net earnings per share* $ 0.26   $ 0.38   $ 0.57   $ 0.72  
    * Non-IFRS measures are described below.

    FUNDS FROM OPERATIONS AND FREE CASH FLOW

        Second quarter     Year-to-date  
        2012     2012 without transaction costs*     2011     2012     2012 without transaction costs*     2011  
    IN THOUSANDS OF DOLLARS EXCEPT PER SHARE DATA   FOR THE PERIOD FROM APRIL 1 TO JUNE 30     FOR THE PERIOD FROM APRIL 1 TO JUNE 30     FOR THE PERIOD FROM APRIL 3 TO JULY 2     FOR THE PERIOD FROM JANUARY 1 TO JUNE 30     FOR THE PERIOD FROM JANUARY 1 TO JUNE 30     FOR THE PERIOD FROM JANUARY 1 TO JULY 2  
    Cash flows from operating activities   $ 3,001     $ 3,001     $ 3,967     $ 8,977     $ 8,977     $ 6,032  
    Excluding:                                    
    Change in non-cash working capital items   ($ 41 )   $ 12,228     $ 12,307     $ 8,868     $ 21,137     $ 22,994  
    Funds from operations**   $ 2,960     $ 15,229     $ 16,274     $ 17,845     $ 30,114     $ 29,026  
    Funds from operations per share**   $ 0.09     $ 0.46     $ 0.63     $ 0.54     $ 0.92     $ 1.12  
    Plus (less):                                    
    Change in non-cash working capital items   $ 41     ($ 12,228 )   ($ 12,307 )   ($ 8,868 )   ($ 21,137 )   ($ 22,994 )
    Capital expenditures   ($ 3,735 )   ($ 3,735 )   ($ 2,259 )   ($ 5,831 )   ($ 5,831 )   ($ 4,417 )
    Free cash flow**   ($ 734 )   ($ 734 )   $ 1,708     $ 3,146     $ 3,146     $ 1,615  
    Free cash flow per share**   ($ 0.02 )   ($ 0.02 )   $0.07     $ 0.10     $ 0.10     $0.06  
    * Funds from operations and free cash flows are presented before the impact of the transaction costs amounting to $12,269, net of income taxes of $670, pertaining to the acquisition of WSP.
       
    ** Non-IFRS measures are described below.

    NON-IFRS MEASURES

    GENIVAR uses non-IFRS measures that are considered 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 the Company's shares.

    Non-IFRS measures used by GENIVAR are net revenues, EBITDA, EBITDA per share, adjusted net earnings, adjusted net earnings per share, funds from operations, funds from operations per share, free cash flow, and free cash flow per share.

    Net revenues

    Net revenues are defined as revenues from professional 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 advised 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

    EBITDA is defined as earnings before financial expenses, income tax expenses, 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 is calculated using the basic weighted average number of shares.

    Adjusted net earnings and adjusted net earnings per share

    Adjusted net earnings is not an IFRS measure. This measure provides Management with net earnings without the effect of significant non-recurring items. The adjusted net earnings is defined as the net earnings for the period, excluding the effect in the financial results of the significant items identified.

    Adjusted net earnings per share is calculated using the basic weighted average number of shares.

    Funds from operations and funds from operations per share

    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 items.

    Funds from operations per share is calculated using the basic weighted average number of shares.

    Free cash flow and free cash flow per share

    Free cash flow is not an IFRS measure. It provides a consistent and comparable measurement of free cash flow generated from operations across entities and is used as an indicator of financial strength and performance. Free cash flow is defined as cash flows from operating activities as reported in accordance with IFRS, less total capital expenditures as reported in the financial statements.

    Free cash flow per share is calculated using the basic weighted average number of shares.

    ABOUT GENIVAR

    GENIVAR, through its combination with WSP, is one of the world's leading professional services firms, working with governments, businesses, architects and planners and providing integrated solutions across many disciplines. The firm provides services to transform the built environment and restore the natural environment, and its expertise ranges from environmental remediation to urban planning, from engineering iconic buildings to designing sustainable transport networks, and from developing the energy sources of the future to enabling new ways of extracting essential resources. It has 14,500 employees, mainly engineers, technicians, scientists and architects, as well as various environmental experts, based in more than 300 offices, across 35 countries, on every continent. www.genivar.com

    Forward-looking information

    Certain information regarding GENIVAR contained herein may constitute forward-looking statements. Forward-looking statements may include statements with respect to, among other things, 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. The forward-looking statements contained in this press release are made as of the date hereof and GENIVAR does not assume any obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise unless expressly required by applicable securities laws.

     
    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