MONTREAL, Aug. 10 /CNW Telbec/ - GENIVAR Income Fund ("The Fund") announced, today, its interim consolidated financial and operating results (unaudited) for the period from April 1 to June 30, 2007. This is the fifth reporting period of the Fund since it commenced business operations on May 25, 2006 and the fourth complete consecutive quarters for the period from July 2, 2006 to June 30, 2007. However, for this quarter, the comparative information provided in the Fund's interim consolidated statements is for the 37-day period from May 25 to July 1st, 2006. In order to provide investors with a meaningful assessment of its performance, we have included selected financial information of the Fund and its predecessor company, GENIVAR Inc. (engineering consulting services company), for the three months ended July 1, 2006.
Highlights
- Revenues for the second quarter 2007 were $63.8 million compared to
$47.5 million for the same period in 2006.
- Net revenues, in the second quarter of 2007, were $50.9 million, up
68.5% from $30.2 million for the same period in 2006. Strong organic
growth accounted for $9.5 million of this increase.
- Net earnings before non-controlling interest were $4.5 million or
24 cents per unit.
- EBITDA increased 68.3% from $5.7 million in the second quarter of 2006
to $9.6 million for the same period in 2007.
- Distributable cash generated before a non-recurring capital expenditure
totalled $6.8 million. Distributions to unit holders amounted to
$4.7 million, representing a payout ratio of 69.5%.
- Backlog increased to $176.7 million.
- The Fund completed the integration of Nove Environment and had
2,052 employees as of June 30, 2007.
Net earnings before non-controlling interest include the accounting of a
provision for future income taxes of $1.2 million or 6 cents per unit, as a
cumulative tax expense. This is following the adoption by the Federal
government on June 22, 2007 of legislation to implement taxes for publicly
traded income trusts from 2011. Management does not expect a provision of this
magnitude in the next quarters, unless important acquisitions or capital
expenditures.
"The Fund continued its momentum and maintained its sequential quarterly
revenue and earnings growth since its listing on the Toronto Stock Exchange,"
said Pierre Shoiry, President and CEO of the GENIVAR Income Fund.
The Fund has now reported four full successive quarterly periods and
trailing twelve-month revenues, net revenues and EBITDA are respectively
$210.4 million, $165.5 million and $32.1 million for the period from July 2,
2006 to June 30, 2007. Net earnings during this period were 92 cents per unit.
"We are pleased with the cross-selling opportunities that our recent
acquisitions have provided, especially in mining and renewable energy sectors.
We also continued to demonstrate the value of our services in the development
of winning design-build and public-private partnership proposals," concluded
Shoiry.
Recent awards include:
- GENIVAR has been awarded design, architectural, structural, mechanical
and electrical engineering services for a 7,000-seat entertainment and
sports centre in Abbottsford, BC.
- Infras-Quebec A25 consortium, which includes GENIVAR among its members,
has been chosen by the Quebec government for a public-private
partnership project estimated at $400.0 million, to complete the
highway 25, along with a bridge, in North-eastern Montreal.
- Canadian Royalties Inc. awarded GENIVAR with the detailed engineering
work for the mineral processing facility and the main and secondary
power generating facilities for the Nunavik Nickel project.
- GENIVAR will act as the owner's engineer for the Skukum Creek Project
definitive feasibility study in Yukon Territory of Canada, for
Tagish Lake Gold Corp.
- GENIVAR has been selected by Finavera Renewables Inc. to lead the
engineering development of four wind projects in British Columbia
totalling 366 MW, as well as the 75-MW Ghost Pine wind project in
Alberta.
Subsequent to June 30, 2007, the Fund announced the closing of three
acquisitions: Ottawa-based National Capital Engineering (NCE) and Harmer
Podolak Engineering Consultants, as well as Winnipeg-based SEG Engineering.
NCE and Harmer Podolak Engineering Consultants specialise in transportation
planning and design and, bridge and civil infrastructure design respectively,
while SEG Engineering, specialises in municipal infrastructure. These
acquisitions add 80 employees and about $9.0 million in annual revenue to the
Fund.
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 number of employees, with
more than 2,000 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 this 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
---------------------------
2007 2006
---------------------------
FOR THE
PERIOD FROM
FOR THE APRIL 1 TO
PERIOD FROM JULY 1
APRIL 1 TO (COMBINED-
IN THOUSANDS OF DOLLARS, JUNE 30 UNAUDITED)
EXCEPT PER UNIT DATA (UNAUDITED) (1)
-------------------------------------------------------------------------
Revenues $ 63,791 $ 47,548
Deduct: Subconsultants and other direct
expenses $ 12,932 $ 17,371
-------------------------------------------------------------------------
Net revenues $ 50,859 $ 30,177
Direct project costs $ 26,281 $ 15,298
-------------------------------------------------------------------------
Gross margin $ 24,578 $ 14,879
Marketing, general, and administrative
expenses and others $ 14,981 $ 9,176
-------------------------------------------------------------------------
EBITDA $ 9,597 $ 5,703
-------------------------------------------------------------------------
Interest $ 452 $ 50
Depreciation of property, plant,
and equipment $ 677 $ 440
Amortization of intangible assets $ 2,501 $ 1,376
-------------------------------------------------------------------------
Earnings before income taxes and
non-controlling interest $ 5,967 $ 3,837
Income tax expense (recovery)(3)(5) $ 1,487 -
-------------------------------------------------------------------------
Earnings before non-controlling interest $ 4,480 -
Non-controlling interest(3) $ 1,877 -
-------------------------------------------------------------------------
Net earnings(3) $ 2,603 -
Basic net earnings per unit $ 0.24 -
Weighted average number of units(4)(6) 10,992,394 -
Diluted net earnings per unit $ 0.24 -
Diluted weighted average number of
units (4)(6) 18,920,619 -
-------------------------------------------------------------------------
RESULTS OF OPERATIONS
---------------------
---------------------------
2006
---------------------------
PRE-IPO
POST-IPO FOR THE 54
FOR THE 37 DAYS FROM
DAYS FROM APRIL 1 TO
MAY 25 TO MAY 24
IN THOUSANDS OF DOLLARS, JULY 1 (UNAUDITED)
EXCEPT PER UNIT DATA (UNAUDITED) (2)
-------------------------------------------------------------------------
Revenues $ 17,523 $ 30,025
Deduct: Subconsultants and other direct
expenses $ 3,307 $ 14,064
-------------------------------------------------------------------------
Net revenues $ 14,216 $ 15,961
Direct project costs $ 7,040 $ 8,258
-------------------------------------------------------------------------
Gross margin $ 7,176 $ 7,703
Marketing, general, and administrative
expenses and others $ 3,822 $ 5,354
-------------------------------------------------------------------------
EBITDA $ 3,354 $ 2,349
-------------------------------------------------------------------------
Interest $ 35 $ 15
Depreciation of property, plant,
and equipment $ 199 $ 241
Amortization of intangible assets $ 956 $ 420
-------------------------------------------------------------------------
Earnings before income taxes and
non-controlling interest $ 2,164 $ 1,673
Income tax expense (recovery)(3)(5) $ (250) -
-------------------------------------------------------------------------
Earnings before non-controlling interest $ 2,414 -
Non-controlling interest(3) $ 1,011 -
-------------------------------------------------------------------------
Net earnings(3) $ 1,403 -
Basic net earnings per unit $ 0.13 -
Weighted average number of units(4)(6) 11,000,000 -
Diluted net earnings per unit $ 0.13 -
Diluted weighted average number of
units (4)(6) 18,927,381 -
-------------------------------------------------------------------------
RESULTS OF OPERATIONS
---------------------
---------------------------
6 months
-------------------------------------------------------------------------
2007 2006
-------------------------------------------------------------------------
FOR THE
PERIOD FROM
FOR THE JANUARY 1
PERIOD FROM TO JULY 1
JANUARY 1 (COMBINED-
IN THOUSANDS OF DOLLARS, TO JUNE 30 UNAUDITED)
EXCEPT PER UNIT DATA (UNAUDITED) (1)
-------------------------------------------------------------------------
Revenues $ 118,134 $ 83,855
Deduct: Subconsultants and other direct
expenses $ 23,107 $ 26,342
-------------------------------------------------------------------------
Net revenues $ 95,027 $ 57,513
Direct project costs $ 49,373 $ 28,386
-------------------------------------------------------------------------
Gross margin $ 45,654 $ 29,127
Marketing, general, and administrative
expenses and others $ 27,967 $ 17,600
-------------------------------------------------------------------------
EBITDA $ 17,687 $ 11,527
-------------------------------------------------------------------------
Interest $ 747 $ 167
Depreciation of property, plant,
and equipment $ 1,276 $ 821
Amortization of intangible assets $ 4,959 $ 2,617
-------------------------------------------------------------------------
Earnings before income taxes and
non-controlling interest $ 10,705 $ 7,922
Income tax expense (recovery)(3)(5) $ 1,628 -
-------------------------------------------------------------------------
Earnings before non-controlling interest $ 9,077 -
Non-controlling interest(3) $ 3,802 -
-------------------------------------------------------------------------
Net earnings(3) $ 5,275 -
Basic net earnings per unit $ 0.48 -
Weighted average number of units(4)(6) 10,996,176 -
Diluted net earnings per unit $ 0.48 -
Diluted weighted average number of
units (4)(6) 18,923,982 -
-------------------------------------------------------------------------
(1) These 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) This financial information was carved out from GENIVAR Engineering
Services Business regrouping all of the engineering activities of
GENIVAR inc., the Non-controlling Unitholder.
(3) 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.
(4) Basic and diluted weighted average number of units have been adjusted
to reflect units purchased in the market in connection with the long-
term incentive plan.
(5) See section "Results of operations - Income tax expense".
(6) As at August 10, 2007, the number of units is identical to what it
was as at June 30, 2007.
SUMMARY OF QUARTERLY RESULTS
----------------------------
---------------------------
2007
----------------------------------------
TTM Q2 Q1
----------------------------------------
FOR THE FOR THE
TRAILING PERIOD FROM PERIOD FROM
TWELVE APRIL 1 TO JANUARY 1
IN THOUSANDS OF DOLLARS, MONTHS JUNE 30 TO MARCH 31
EXCEPT PER UNIT DATA (UNAUDITED) (UNAUDITED) (UNAUDITED)
-------------------------------------------------------------------------
Results of operations
-------------------------------------------------------------------------
Revenues $ 210,392 $ 63,791 $ 54,343
-------------------------------------------------------------------------
Net revenues(1) $ 165,492 $ 50,859 $ 44,168
-------------------------------------------------------------------------
Gross margin $ 79,383 $ 24,578 $ 21,076
-------------------------------------------------------------------------
EBITDA $ 32,148 $ 9,597 $ 8,090
-------------------------------------------------------------------------
Net earnings $ 10,216 $ 2,603 $ 2,672
-------------------------------------------------------------------------
Basic and diluted net
earnings per unit $ 0.92 $ 0.24 $ 0.24
-------------------------------------------------------------------------
Weighted average number
of units(2) 10,992,394 11,000,000
-------------------------------------------------------------------------
Diluted weighted average
number of units(2) 18,920,619 18,927,381
-------------------------------------------------------------------------
SUMMARY OF QUARTERLY RESULTS
----------------------------
------------------------------------------
2006
------------------------------------------
Q4 Q3 Q2
------------------------------------------
FOR THE FOR THE FOR THE
PERIOD FROM PERIOD FROM PERIOD FROM
OCTOBER 1 TO JULY 2 TO MAY 25 TO
IN THOUSANDS OF DOLLARS, DECEMBER 31 SEPTEMBER 30 JULY 1
EXCEPT PER UNIT DATA (UNAUDITED) (UNAUDITED) (UNAUDITED)
-------------------------------------------------------------------------
Results of operations
-------------------------------------------------------------------------
Revenues $ 49,703 $ 42,555 $ 17,523
-------------------------------------------------------------------------
Net revenues(1) $ 36,733 $ 33,732 $ 14,216
-------------------------------------------------------------------------
Gross margin $ 17,533 $ 16,196 $ 7,176
-------------------------------------------------------------------------
EBITDA $ 7,437 $ 7,024 $ 3,354
-------------------------------------------------------------------------
Net earnings $ 2,577 $ 2,364 $ 1,403
-------------------------------------------------------------------------
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
-------------------------------------------------------------------------
(1) Net revenues are defined as Revenues less subconsultants and other
direct expenses.
(2) Basic and diluted weighted average number of units have been adjusted
to reflect units purchased in the market in connection with the long-
term incentive plan.
DISTRIBUTABLE CASH
------------------
------------------ -------------
3 months 6 months
----------------------------------------------
2007 2006 2007
----------------------------------------------
POST-IPO
FOR THE 37 FOR THE
FOR THE PERIOD DAYS FROM PERIOD FROM
FROM APRIL 1 MAY 25 TO JANUARY 1 TO
IN THOUSANDS OF DOLLARS, TO JUNE 30 JULY 1 JUNE 30
EXCEPT PER UNIT DATA (UNAUDITED) (UNAUDITED) (UNAUDITED)
-------------------------------------------------------------------------
Cash flows
Cash flows from
operating activities $ 4,012 ($ 1,821) $ 5,666
Change in non-cash
working capital items $ 5,014 $ 5,119 $ 11,149
Current income tax expense $ 188 $ 21 $ 263
Income taxes recovered (paid) ($ 217) $ 81 ($ 267)
Capital expenditures paid ($ 1,483) ($ 29) ($ 2,831)
Capital expenditures paid for
non-recurring items(2) ($ 906) - ($ 1,714)
Interest unpaid $ 114 - $ 234
Purchase of units in the
market under the
long-term incentive plan ($ 825) - ($ 825)
-------------------------------------------------------------------------
Distributable cash(1) $ 5,897 $ 3,371 $ 11,675
Distributable cash, per unit(1) $ 0.3116 $ 0.1781 $ 0.6168
Actual payout ratio 80.2% 57.4% 81.0%
Actual payout ratio adjusted
for non-recurring items(2) 69.5% 57.4% 70.7%
-------------------------------------------------------------------------
Fund's units distributions $ 2,749 $ 1,124 $ 5,498
Class B Non-subordinated
Exchangeable LP unit distributions $ 799 $ 326 $ 1,598
Class C Subordinated
Exchangeable LP unit distributions $ 1,182 $ 484 $ 2,364
-------------------------------------------------------------------------
Aggregate distributions,
all units(1) $ 4,730 $ 1,934 $ 9,460
Aggregate distributions,
all units, per unit(1) $ 0.2500 $ 0.1022 $ 0.5000
-------------------------------------------------------------------------
Distributable cash(1) $ 5,897 $ 3,371 $ 11,675
Capital expenditures paid $ 1,483 ($ 29) $ 2,831
Capital expenditures paid for
non-recurring items(2) $ 906 - $ 1,714
Purchase of units in the market
under the long-term incentive plan $ 825 - $ 825
Compensation costs under the
long-term incentive plan ($ 69) - ($ 138)
Interest paid $ 338 ($ 35) $ 513
Income taxes recovered (paid) $ 217 $ 81 $ 267
-------------------------------------------------------------------------
EBITDA $ 9,597 $ 3,354 $ 17,687
-------------------------------------------------------------------------
(1) 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 18,927,381. 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.
(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, net of the proceeds from the disposal of a second
building of $449.
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 defined as cash flows from operating activities
adjusted for change in non-cash working capital items, income taxes paid,
capital expenditures paid (net of the proceeds from the disposal of capital
assets), interest unpaid and purchase of units in the market under the
long-term incentive plan. Distributable cash does not have standardized
meaning prescribed by GAAP, but is a measure generally used by Canadian
open-ended income funds as an indicator of financial performance. The Fund's
method of calculating distributable cash may differ from similar computations
as reported by other similar entities and, accordingly, may not be comparable
to distributable cash as reported by such entities.
Payout ratio
Payout ratio is defined as aggregate distributions divided by
distributable cash.