MONTREAL, Aug. 5 /CNW Telbec/ - GENIVAR Income Fund (the "Fund") announced today its financial and operating results (unaudited) for the second quarter of 2008. These results cover the period from March 30, 2008 to June 28, 2008.
Highlights
- For the second quarter of 2008, revenues were $97.3 million, up from
$63.8 million for the same period in 2007, representing an increase of
52.6%. Net revenues were $80.9 million, compared to $50.9 million, an
increase of 59.0% from 2007 to 2008. Strong organic growth accounted
for half of this increase.
- Net earnings were $6.7 million for the second quarter, a 156.1%
increase from the amount of $2.6 million achieved for the same period
in 2007.
- Earnings before non-controlling interest were $11.0 million or
$0.52 per unit on a diluted basis for the second quarter, more than
double the amount of $0.24 per unit on a diluted basis generated in the
same quarter of 2007. EBITDA increased 82.0% from $9.6 million in the
second quarter of 2007 to $17.5 million for the same period in 2008.
- Cash flows from operating activities generated $8.0 million of cash.
Adjusted distributable cash totalled $13.2 million, of which
$5.3 million were distributed to unitholders, representing an adjusted
payout ratio of 40.3%.
- The Fund announced an increase of its annual distributions from
$1.00 per unit to $1.50 per unit, or from $0.0833 to $0.125 per unit
per month. This increase will be effective for the Fund's July
distribution to be paid on August 15, 2008.
- During the quarter, the Fund amended its credit facilities, increasing
its operating line from $40.0 million to $80.0 million.
- The Fund completed two acquisitions during the second quarter of 2008,
adding approximately 70 employees in British Columbia and Quebec. The
total workforce of the Fund, as at June 28, 2008, was more than
3,100 employees.
- Subsequent to the end of the quarter, the Fund completed the
acquisitions of Peterson Galloway, a British Columbia building firm,
ZENIX Engineering, an Ontario building firm, and Solmers, a Quebec
environmental engineering firm.
- As of June 28, 2008, backlog increased slightly to $300.4 million up
from $294.1 million as of March 29, 2008.
"The Fund continued delivering on its business plan fuelled by a strong
demand for our services in all our operating regions," said Pierre Shoiry,
President and CEO of the Fund. "These excellent results are achieved through
the commitment, passion and dedication of all of our employees," he added. "We
believe that the fundamentals of the consulting engineering industry in Canada
are solid and that the outlook is positive in the market segments in which we
operate," concluded Pierre Shoiry.
For the six months ended June 28, 2008, total revenues were
$167.4 million, up 41.7% for the same period one year ago. Net revenues rose
from $95.0 million to $141.0 million, a 48.4% increase, during the same
period. Earnings before non-controlling interest totalled $18.7 million or
$0.88 cents per unit compared to $9.1 million or $0.48 cents per unit for the
same period in 2007, an increase of 105.5%. EBITDA was $29.3 million for the
period from January 1, 2008, to June 28, 2008, an increase of 65.9% over the
same period of last year.
About GENIVAR
GENIVAR is a leading Canadian engineering services firm, providing public
and private 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 are of varying sizes and
fall into diverse market segments, including building, industrial and power,
urban infrastructure, transportation, and environment. GENIVAR is one of the
largest engineering services firms in Canada, in terms of number of employees,
employing over 3,100 managers, professionals, technicians, technologists, and
support staff, in over 75 offices in Canada and abroad. www.genivar.com
RESULTS OF OPERATIONS
---------------------
----------------------------------------------------
3 months 6 months
----------------------------------------------------
2008 2007 2008 2007
----------------------------------------------------
FOR THE FOR THE FOR THE FOR THE
PERIOD PERIOD PERIOD PERIOD
FROM FROM FROM FROM
IN THOUSANDS OF MARCH 30 APRIL 1 JANUARY 1 JANUARY 1
DOLLARS EXCEPT TO JUNE 28 TO JUNE 30 TO JUNE 28 TO JUNE 30
PER UNIT DATA (UNAUDITED) (UNAUDITED) (UNAUDITED) (UNAUDITED)
-------------------------------------------------------------------------
Revenues $ 97,348 $ 63,791 $167,435 $118,134
Deduct:
Sub-consultants
and other direct
expenses $ 16,479 $ 12,932 $ 26,418 $ 23,107
Net revenues $ 80,869 $ 50,859 $141,017 $ 95,027
Direct project
costs $ 40,429 $ 26,281 $ 70,611 $ 49,373
-------------------------------------------------------------------------
Gross margin $ 40,440 $ 24,578 $ 70,406 $ 45,654
Marketing, general,
and administrative
expenses and
others $ 22,977 $ 14,981 $ 41,065 $ 27,967
-------------------------------------------------------------------------
EBITDA $ 17,463 $ 9,597 $ 29,341 $ 17,687
-------------------------------------------------------------------------
Interest $ 592 $ 452 $ 713 $ 747
Depreciation
of property, plant,
and equipment $ 1,033 $ 677 $ 1,887 $ 1,276
Amortization
of intangible
assets $ 3,783 $ 2,501 $ 7,223 $ 4,959
-------------------------------------------------------------------------
Earnings before
income taxes and
non-controlling
interest $ 12,055 $ 5,967 $ 19,518 $ 10,705
Income tax
expense(1) $ 1,017 $ 1,487 $ 865 $ 1,628
-------------------------------------------------------------------------
Earnings before
non-controlling
interest $ 11,038 $ 4,480 $ 18,653 $ 9,077
Non-controlling
interest $ 4,372 $ 1,877 $ 7,389 $ 3,802
-------------------------------------------------------------------------
Net earnings $ 6,666 $ 2,603 $ 11,264 $ 5,275
Basic net earnings
per unit $ 0.52 $ 0.24 $ 0.88 $ 0.48
Weighted average
number of units 12,870,364 10,992,394 12,870,512 10,996,176
Diluted net
earnings per unit $ 0.52 $ 0.24 $ 0.88 $ 0.48
Diluted weighted
average number
of units 21,350,781 18,920,619 21,350,786 18,923,982
-------------------------------------------------------------------------
(1) See section "Results of operations - Income tax expense."
DISTRIBUTABLE CASH
------------------
----------------------------------------------------
3 months 6 months
----------------------------------------------------
2008 2007 2008 2007
----------------------------------------------------
FOR THE FOR THE FOR THE FOR THE
PERIOD PERIOD PERIOD PERIOD
FROM FROM FROM FROM
IN THOUSANDS OF MARCH 30 APRIL 1 JANUARY 1 JANUARY 1
DOLLARS EXCEPT TO JUNE 28 TO JUNE 30 TO JUNE 28 TO JUNE 30
PER UNIT DATA (UNAUDITED) (UNAUDITED) (UNAUDITED) (UNAUDITED)
-------------------------------------------------------------------------
Cash flows from
operating
activities $ 7,954 $ 4,012 $ 15,345 $ 5,666
Capital
expenditures paid ($ 2,676) ($ 2,389) ($ 4,606) ($ 4,994)
Standardized
distributable
cash(1) $ 5,278 $ 1,623 $ 10,739 $ 672
Change in non-cash
working capital
items(2) $ 7,964 $ 5,014 $ 12,301 $ 11,149
Capital expenditures
paid for
non-recurring
items(3) - $ 906 - $ 2,163
Purchase of units
in the market under
the long-term
incentive plan - ($ 825) - ($ 825)
Adjusted distributable
cash (1)(4) $ 13,242 $ 6,718 $ 23,040 $ 13,159
Adjusted
distributable cash,
per unit(1)(4) $ 0.62 $ 0.35 $ 1.08 $ 0.69
Payout ratio
Standardized 101.2% 291.4% 99.5% 1,407.7%
Adjusted 40.3% 70.4% 46.4% 71.9%
-------------------------------------------------------------------------
Distributions
Fund's units
distributions $ 3,224 $ 2,749 $ 6,448 $ 5,498
Class B
Non-subordinated
Exchangeable
LP unit
distributions $ 934 $ 799 $ 1,868 $ 1,598
Class C Subordinated
Exchangeable
LP unit
distributions $ 1,182 $ 1,182 $ 2,364 $ 2,364
Aggregate
distributions,
all units(4) $ 5,340 $ 4,730 $ 10,680 $ 9,460
Aggregate
distributions,
all units,
per unit(4) $ 0.25 $ 0.25 $ 0.50 $ 0.50
-------------------------------------------------------------------------
(1) Calculation of the distributable cash included a withholding tax of
$0.8 million for both the three- and six-month periods ended June
28, 2008. This withholding tax should be included at the end of the
year on the unitholders' T3 slip as a foreign income tax.
(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 LP units and Subordinated Exchangeable
LP units, which total 21,366,405 as at June 28, 2008 (18,927,381 at
the same date in 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 August 4, 2008, the number of units is
identical to what it was as at June 28, 2008.
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.