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MONTREAL, Nov. 11 /CNW Telbec/ - GENIVAR Income Fund (the "Fund") announced today its financial and operating results (unaudited) for the third quarter of 2008. These results cover the period from June 29, 2008, to September 27, 2008.
Highlights - For the third quarter of 2008, revenues were $104.7 million, up from $68.5 million for the same period in 2007, representing an increase of 52.7%. Net revenues were $85.8 million, compared to $53.6 million, an increase of 60.1% from 2007 to 2008. Strong organic growth accounted for 22.4% of this increase in net revenues, the remaining 37.7% resulting from acquisitions. - Municipal infrastructure and transportation projects generated 49.9% of net revenues during the third quarter and 45.6% of net revenues for the nine-month period ending September 27, 2008. - Net earnings were $8.3 million for the third quarter, a 93.0% increase from the amount of $4.3 million achieved for the same period in 2007. - Earnings before non-controlling interest were $13.7 million or $0.64 per unit on a diluted basis for the third quarter, up from the amount of $0.38 per unit on a diluted basis generated in the same quarter of 2007. EBITDA increased 68.3% from $11.7 million in the third quarter of 2007 to $19.7 million for the same period in 2008. For the nine-month period ending September 27, 2008, EBITDA stood at $49.0 million, up 66.9% from $29.4 million for the same period in 2007. - Cash flows from operating activities generated $8.9 million of cash. For the third quarter of 2008, adjusted distributable cash totalled $16.1 million, of which $8.0 million were distributed to unitholders, representing an adjusted payout ratio of 49.8%. For the 2008 nine-month period, adjusted distributable cash totalled $39.1 million, of which $18.7 million were distributed to unitholders, representing an adjusted payout ratio of 47.8%. - Subsequent to quarter end, on October 2, 2008, the Fund completed an equity financing with success. The Fund raised $50.0 million through a public offering of 1 391 650 units for gross proceeds of $35.0 million and a private placement by the non-controlling unitholder of 596 421 units for additional gross proceeds of $15.0 million. - During the third quarter, the Fund completed the acquisitions of Peterson Galloway, a British Columbia building engineering firm, Zenix Engineering, an Ontario building engineering firm, Solmers, a Quebec environmental engineering firm, and Henderson Paddon & Associates/Oweson, an Ontario-based civil engineering and environmental consulting firm. - Subsequent to the end of the quarter, the Fund completed the acquisitions of two Quebec-based firms: Consultants GENIPLUS/Nageco, a 68-year old municipal infrastructure, structural building and bridge firm, and Consumaj Estrie, a Sherbrooke-based environmental and municipal infrastructure firm. - As of September 27, 2008, backlog remained strong at $305.0 million.
"In spite of the current financial turbulence, the Fund remains committed to the execution of its growth plan, said Pierre Shoiry, President and CEO of the GENIVAR Income Fund. We have a healthy balance sheet, solid credit facilities, and the pipeline for acquisitions is good," concluded Pierre Shoiry.
About GENIVAR
GENIVAR is a leading Canadian engineering services firm providing private and public sector clients with a comprehensive range of professional consulting services through all execution phases of a project including planning, design, construction and maintenance. The company's clients operate in a wide variety of market segments, such as Building, Industrial and Power, Municipal Infrastructure, Transportation and Environment. GENIVAR is one of the largest engineering services firm in Canada with over 3,400 managers, professionals, technicians and technologists and support staff in more than 80 offices in Canada and abroad. www.genivar.com.
RESULTS OF OPERATIONS
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3 months 9 months
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2008 2007 2008 2007
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FOR THE FOR THE FOR THE FOR THE
PERIOD PERIOD PERIOD PERIOD
FROM FROM FROM FROM
JUNE 29 JULY 1 JANUARY 1 JANUARY 1
IN THOUSANDS OF TO TO TO TO
DOLLARS EXCEPT SEPTEMBER 27 SEPTEMBER 30 SEPTEMBER 27 SEPTEMBER 30
PER UNIT DATA (UNAUDITED) (UNAUDITED) (UNAUDITED) (UNAUDITED)
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Revenues $ 104,650 $ 68,543 $ 272,085 $ 186,677
Deduct:
Subconsultants
and other direct
expenses $ 18,836 $ 14,941 $ 45,254 $ 38,048
Net revenues $ 85,814 $ 53,602 $ 226,831 $ 148,629
Direct project
costs $ 42,022 $ 27,369 $ 112,633 $ 76,742
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Gross margin $ 43,792 $ 26,233 $ 114,198 $ 71,887
Marketing, general,
and administrative
expenses and
others $ 24,122 $ 14,548 $ 65,187 $ 42,515
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EBITDA $ 19,670 $ 11,685 $ 49,011 $ 29,372
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Interest $ 778 $ 746 $ 1,491 $ 1,493
Depreciation of
property, plant,
and equipment $ 1,171 $ 693 $ 3,058 $ 1,969
Amortization of
intangible assets $ 3,818 $ 2,667 $ 11,041 $ 7,626
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Earnings before
income taxes and
non-controlling
interest $ 13,903 $ 7,579 $ 33,421 $ 18,284
Income taxes $ 205 $ 176 $ 1,084 $ 1,442
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Earnings before
non-controlling
interest $ 13,698 $ 7,403 $ 32,337 $ 16,842
Non-controlling
interest $ 5,373 $ 3,059 $ 12,748 $ 7,223
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Net earnings $ 8,325 $ 4,344 $ 19,589 $ 9,619
Basic net earnings
per unit $ 0.65 $ 0.38 $ 1.52 $ 0.87
Weighted average
number of units 12,870,030 11,305,396 12,870,350 11,100,382
Diluted net
earnings per unit $ 0.64 $ 0.38 $ 1.51 $ 0.88
Diluted weighted
average number
of units 21,352,768 19,347,454 21,353,568 19,066,964
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DISTRIBUTABLE CASH
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3 months 9 months
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2008 2007 2008 2007
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FOR THE FOR THE FOR THE FOR THE
PERIOD PERIOD PERIOD PERIOD
FROM FROM FROM FROM
JUNE 29 JULY 1 JANUARY 1 JANUARY 1
IN THOUSANDS OF TO TO TO TO
DOLLARS EXCEPT SEPTEMBER 27 SEPTEMBER 30 SEPTEMBER 27 SEPTEMBER 30
PER UNIT DATA (UNAUDITED) (UNAUDITED) (UNAUDITED) (UNAUDITED)
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Cash flows from $ 8,908 $ 6,400 $ 24,253 $ 12,066
operating
activities
Capital
expenditures paid ($ 2,084) ($ 1,616) ($ 6,690) ($ 6,610)
Standardized
distributable
cash(1) $ 6,824 $ 4,784 $ 17,563 $ 5,456
Change in non-cash
working capital
items(2) $ 9,254 $ 4,523 $ 21,555 $ 15,672
Capital expenditures
paid for
non-recurring
items(3) - $ 268 - $ 2,431
Purchase of units
in the market under
the long-term
incentive plan - - - ($ 825)
Adjusted
distributable
cash(1)(4) $ 16,078 $ 9,575 $ 39,118 $ 22,734
Adjusted
distributable
cash, per
unit(1)(4) $ 0.75 $ 0.45 $ 1.83 $ 1.06
Payout ratio
Standardized 117.4% 103.1% 106.4% 263.8%
Adjusted 49.8% 51.5% 47.8% 63.3%
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Distributions
Fund's units
distributions $ 4,839 $ 2,907 $ 11,287 $ 8,405
Class B
Non-subordinated
Exchangeable
LP Unit
distributions $ 1,397 $ 844 $ 3,265 $ 2,440
Class C
Subordinated
Exchangeable
LP Unit
distributions $ 1,775 $ 1,182 $ 4,139 $ 3,548
Aggregate
distributions,
all units(4) $ 8,011 $ 4,933 $ 18,691 $ 14,393
Aggregate
distributions,
all units,
per unit(4) $ 0.37 $ 0.25 $ 0.87 $ 0.75
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(1) Calculation of the distributable cash included a withholding tax of
$0.6 million for the three-month period and of $1.4 million for the
nine-month period ended September 27, 2008.
(2) 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.
(3) Non-recurring capital expenditures pertain to a construction project
which had for objective to expand square footage of the main office
in Quebec City.
(4) Distributable cash and distributable cash per unit amounts are
calculated for the combined interest of the Fund's units and Non-
subordinated Exchangeable Class B LP units and Subordinated
Exchangeable Class C LP Units (for which Subordination End Date was
June 30, 2008), which total 21,366,405 as at September 27, 2008
(21,366,405 as at September 30, 2007). Number of units has not been
adjusted to reflect units purchased in the market in connection with
the long-term incentive plan since the distributions on these units
continue to be declared and paid. As at November 10, 2008, the
number of units is 23,354,476.
NON-GAAP MEASURES
The Fund uses non-GAAP measures that are used by Canadian open-ended income funds as indicators of financial performance measures 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 of the Fund.
Non-GAAP measures used by the Fund are net revenues, EBITDA, distributable cash, and payout ratio. These measures are defined below.
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 our 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. Therefore, EBITDA may not be comparable to similar measures presented by other issuers.
Distributable cash
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.
Payout ratio
Standardized payout ratio is defined as aggregate cash distributions divided by standardized distributable cash. Adjusted payout ratio is defined as aggregate cash distributions divided by adjusted distributable cash.