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MONTREAL, Nov. 12 /CNW Telbec/ - GENIVAR Income Fund (the "Fund") announced today its financial and operating results (unaudited) for the period from July 1st, to September 30, 2007. This is the sixth reporting period of the Fund since it began its business operations on May 25th, 2006 and the first reporting period where complete comparative information for the previous year is available.
Highlights
- Revenues for the third quarter of 2007 were up 61.1% to $68.5 million
compared to $42.5 million for the same period in 2006. Year-to-date
revenues were $186.7 million compared to $126.4 million for the same
nine-month period in 2006.
- Net earnings before non-controlling interest were $7.4 million or
38 cents per unit for the quarter and $16.5 million or 87 cents per
unit for the nine-month period.
- EBITDA increased 66.4% from $7.0 million in the third quarter of 2006
to $11.7 million for the same period in 2007.
- Adjusted Distributable Cash generated in the quarter totalled
$9.6 million, of which $4.9 million were distributed to unitholders,
representing an adjusted payout ratio of 51.5%.
- The Fund raised $50.0 million through a public offering of
approximately 1.9 million units for gross proceeds of $39.0 million and
a private placement to the non-controlling unitholder of approximately
0.5 million units for additional proceeds of $11.0 million.
- Backlog increased to $201.0 million.
During the third quarter, we welcomed five new firms who joined our team.
We completed the acquisitions of two firms active in the Ontario
transportation market segment, National Capital Engineering and Harmer Podolak
Engineering Consultants, as well as three municipal infrastructure firms,
namely SEG Engineering in Winnipeg, and Andre Simard et Associes (effective
October 1, 2007) and TERRA Experts conseils in Quebec City.
"This was an active quarter for the Fund with record results, sustained
organic growth, the completion of a successful financing and the closing of
five acquisitions", said Pierre Shoiry, President and CEO of the GENIVAR
Income Fund.
Conference Call
The Fund will hold a conference call on Tuesday, November 13, 2007, at
11:00 AM EDT. To participate in the conference call, please dial
1-866-999-9779 and enter the password 150522. An audio play of the call will
be archived on the Website at www.genivar.com.
GENIVAR is a leading Canadian engineering services firm providing private
and public sector clients with a full range of professional consulting
services through all execution phases of a project, including planning,
design, construction and maintenance. Its clients, who are of varying sizes,
fall into various market segments, such as building, industrial and power,
urban infrastructure, transportation, and environment. GENIVAR is one of the
largest engineering services firm in Canada, in terms of the number of
employees, with more than 2,200 managers, professionals, technicians and
technologists, and support staff, in over 40 offices in Canada and abroad.
The Fund's financial statements, as well as management's discussion and
analysis of the reporting period can be obtained via the GENIVAR website, in
the Investor Relations section, at www.genivar.com or at www.sedar.com.
RESULTS OF OPERATIONS
----------------------------------------------------
3 months 9 months
----------------------------------------------------
2007 2006 2007 2006
----------------------------------------------------
FOR THE FOR THE FOR THE FOR THE
PERIOD FROM PERIOD FROM PERIOD FROM PERIOD FROM
JULY 1 TO JULY 2 TO JANUARY 1 TO JANUARY 1 TO
SEPTEMBER 30 SEPTEMBER 30 SEPTEMBER 30 SEPTEMBER 30
IN THOUSANDS OF (UNAUDITED) (UNAUDITED) (UNAUDITED) (COMBINED
DOLLARS EXCEPT -UNAUDITED)
PER UNIT DATA (1)
-------------------------------------------------------------------------
Revenues $ 68,543 $ 42,555 $ 186,677 $ 126,410
Deduct: Sub-
consultants and
other direct
expenses $ 14,941 $ 8,823 $ 38,048 $ 35,164
Net revenues $ 53,602 $ 33,732 $ 148,629 $ 91,246
Direct project
costs $ 27,369 $ 17,536 $ 76,742 $ 45,923
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Gross margin $ 26,233 $ 16,196 $ 71,887 $ 45,323
Marketing,
general,
and admi-
nistrative
expenses and
others $ 14,548 $ 9,172 $ 42,515 $ 26,771
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EBITDA $ 11,685 $ 7,024 $ 29,372 $ 18,552
-------------------------------------------------------------------------
Interest $ 746 $ 245 $ 1,493 $ 413
Depreciation of
property, plant,
and equipment $ 693 $ 512 $ 1,969 $ 1,333
Amortization of
intangible
assets $ 2,667 $ 2,305 $ 7,626 $ 4,922
Earnings
before
income taxes
and non-
controlling
interest $ 7,579 $ 3,962 $ 18,284 $ 11,884
Income tax
expense
(recovery)(2)(4) $ 161 $ (105) $ 1,789 -
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Earnings before
non-controlling
interest $ 7,418 $ 4,067 $ 16,495 -
Non-controlling
interest(2) $ 3,074 $ 1,703 $ 6,876 -
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Net earnings(2) $ 4,344 $ 2,364 $ 9,619 -
Basic net earnings
per unit $ 0.38 $ 0.21 $ 0.87 -
Weighted average
number of units
(3)(5) 11,305,396 11,000,000 11,100,382 -
Diluted net
earnings per
unit $ 0.38 $ 0.21 $ 0.87 -
Diluted weighted
average number
of units (3)(5) 19,347,454 18,927,381 19,066,964 -
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(1) This combined financial information is the combination of financial
results of GENIVAR Engineering Services Business PRE-IPO and
financial results of the Fund POST-IPO.
(2) Income taxes, non-controlling interest and net earnings have not been
presented on a comparative basis due to the changes in the capital
structure of the preceding entities and the Fund in connection with
the IPO on May 25, 2006.
(3) The basic and diluted weighted average number of units has been
adjusted to reflect units purchased in the market in Q2 in connection
with the long-term incentive plan and units issued pursuant to a
public offering in Q3.
(4) See section of the Management's Discussion and Analysis "Results of
operations - Income tax expense."
(5) As at November 9, 2007, the number of units is identical to what it
was as at September 30, 2007.
SUMMARY OF QUARTERLY RESULTS
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2007
-------------------------------------------------------------------------
TTM Q3 Q2 Q1
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TRAILING TWELVE FOR THE FOR THE FOR THE
MONTHS PERIOD PERIOD FROM PERIOD FROM
(UNAUDITED) FROM JULY APRIL 1 TO JANUARY 1
IN THOUSANDS 1 TO JUNE 30 TO MARCH 31
OF DOLLARS, SEPTEMBER (UNAUDITED) (UNAUDITED)
EXCEPT PER 30(UNAUDITED)
UNIT DATA
-------------------------------------------------------------------------
Results of operations
-------------------------------------------------------------------------
Revenues 236,380 68,543 $ 63,791 $ 54,343
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Net revenues(1) 185,362 53,602 $ 50,859 $ 44,168
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Gross margin 89,420 26,233 $ 24,578 $ 21,076
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EBITDA 36,809 11,685 $ 9,597 $ 8,090
-------------------------------------------------------------------------
Net earnings 12,196 4,344 $ 2,603 $ 2,672
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Basic and diluted
net earnings per
unit 1.09 0.38 $ 0.24 $ 0.24
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Weighted average
number of
units(2) 11,305,396 10,992,394 11,000,000
-------------------------------------------------------------------------
Diluted weighted
average number
of units (2) 19,347,454 18,920,619 18,927,381
-------------------------------------------------------------------------
-------------------------------------------------------------------------
Distributable Cash
-------------------------------------------------------------------------
-------------------------------------------------------------------------
Distributable
Cash(3)(4)
Standardized 13,374 4,784 $ 1,623 ($ 951)
Adjusted 29,003 9,575 $ 6,718 $ 6,441
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Distributable Cash,
per unit (3)(4)
Standardized $ 0.68 $ 0.22 $ 0.09 ($ 0.05)
Adjusted $ 1.47 $ 0.45 $ 0.35 $ 0.34
-------------------------------------------------------------------------
Distributions
declared 19,123 4,933 $ 4,730 $ 4,730
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Distributions
declared, per
unit $ 1.00 $ 0.25 $ 0.25 $ 0,25
-------------------------------------------------------------------------
Payout ratio
Adjusted 65.9% 51.5% 70.4% 73.4%
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-------------------------------------------------------------------------
2006
-------------------------------------------------------------------------
Q4 Q3 Q2
(37 days)
-------------------------------------------------------------------------
FOR THE FOR THE FOR THE
PERIOD FROM PERIOD PERIOD FROM
IN THOUSANDS OCTOBER 1 TO FROM JULY MAY 25 TO
OF DOLLARS, DECEMBER 31 2 TO JULY 1
EXCEPT PER (UNAUDITED) SEPTEMBER 30 (UNAUDITED)
UNIT DATA (UNAUDITED)
-------------------------------------------------------------------------
Results of operations
-------------------------------------------------------------------------
Revenues $ 49,703 $ 42,555 $ 17,523
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Net revenues(1) $ 36,733 $ 33,732 $ 14,216
-------------------------------------------------------------------------
Gross margin $ 17,533 $ 16,196 $ 7,176
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EBITDA $ 7,437 $ 7,024 $ 3,354
-------------------------------------------------------------------------
Net earnings $ 2,577 $ 2,364 $ 1,403
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Basic and diluted net earnings
per unit $ 0.23 $ 0.21 $ 0.13
-------------------------------------------------------------------------
Weighted average number of
units(2) 11,000,000 11,000,000 11,000,000
-------------------------------------------------------------------------
Diluted weighted average
number of units(2) 18,927,381 18,927,381 18,927,381
-------------------------------------------------------------------------
-------------------------------------------------------------------------
Distributable Cash
-------------------------------------------------------------------------
-------------------------------------------------------------------------
Distributable
Cash(3)(4)
Standardized $ 7,918 $ 5,682 ($ 1,850)
Adjusted $ 6,269 $ 6,097 $ 3,269
-------------------------------------------------------------------------
Distributable
Cash, per unit (3)(4)
Standardized $ 0.42 $ 0.30 ($ 0.10)
Adjusted $ 0.33 $ 0.32 $ 0.17
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Distributions
declared $ 4,730 $ 4,730 $ 1,934
-------------------------------------------------------------------------
Distributions
declared, per unit $ 0,25 $ 0,25 $ 0,10
-------------------------------------------------------------------------
Payout ratio
Adjusted 75.5% 77.6% 59.2%
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(1) Net revenues are defined as Revenues less subconsultants and other
direct expenses (see Non-GAAP measures at the end of the document).
(2) The basic and diluted weighted average number of units has been
adjusted to reflect units purchased in the market in Q2 in connection
with the long-term incentive plan and units issued pursuant to a
public offering in Q3.
(3) The definition of Distributable Cash has been revised to comply with
the recommendations provided in CICA's publication "Standardized
Distributable Cash in Income Trusts and Other Flow-Through
Entities." See section of the Management's Discussion and Analysis
"Distributable Cash".
(4) Distributable Cash and Distributable Cash per unit amounts are
calculated for the combined interest of the Fund's units and Non-
subordinated Exchangeable LP units and Subordinated LP units, which
total 21,366,405 as at September 30, 2007 (18,927,381 at the same
date in 2006). 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.
DISTRIBUTABLE CASH
--------------------------------------
3 months 9 months
--------------------------------------
2007 2006 2007
--------------------------------------
FOR THE FOR THE FOR THE
PERIOD FROM PERIOD FROM PERIOD FROM
IN THOUSANDS JULY 1 TO JULY 2 TO JANUARY 1 TO
OF DOLLARS EXCEPT SEPTEMBER 30 SEPTEMBER 30 SEPTEMBER 30
PER UNIT DATA (UNAUDITED) (UNAUDITED) (UNAUDITED)
-------------------------------------------------------------------------
Cash flows from operating $ 6,400 $ 6,321 $ 12,066
activities
Capital expenditures paid ($ 1,616) ($ 639) ($ 6,610)
Standardized Distributable
Cash $ 4,784 $ 5,682 $ 5,456
Change in non-cash working
capital items(1) $ 4,523 $ 415 $ 15,672
Purchase of units in the
market under the
long-term incentive
plan - - ($ 825)
Capital expenditures
paid for non-
recurring items(2) $ 268 - $ 2,431
Adjusted Distributable Cash(3) $ 9,575 $ 6,097 $ 22,734
Adjusted Distributable Cash,
per unit (3) $ 0.45 $ 0.32 $ 1.06
Payout ratio
Adjusted 51.5% 77.6% 63.3%
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Distributions
Fund's units distributions $ 2,907 $ 2,749 $ 8,405
Class B Non-subordinated
Exchangeable LP unit
distributions $ 844 $ 799 $ 2,440
Class C Subordinated
Exchangeable LP unit
distributions $ 1,182 $ 1,182 $ 3,548
Aggregate distributions,
all units(3) $ 4,933 $ 4,730 $ 14,393
Aggregate distributions,
all units, per unit(3) $ 0.25 $ 0.25 $ 0.75
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(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) Non-recurring capital expenditures pertain to a construction project
which had for objective to expand square footage of the main office
in Quebec City.
(3) Distributable Cash and Distributable Cash per unit amounts are
calculated for the combined interest of the Fund's units and Non-
subordinated Exchangeable LP units and Subordinated LP units, which
total 21,366,405 as at September 30, 2007 (18,927,381 at the same
date in 2006). 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.
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 unit of the fund.
Non-GAAP measures used by the fund are net revenues, EBITDA, Distributable
Cash, and Payout ratio. In the third quarter, the definitions of Distributable
Cash and Payout ratio have been revised to comply with the recommendations
provided in CICA's publication "Standardized Distributable Cash in Income
Trusts and Other Flow-Through Entities." 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.
Disbributable 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 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 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.