MONTREAL, Aug. 10 /CNW Telbec/ - The GENIVAR Income Fund (the "Fund") announced today its financial and operating results (unaudited) for the second quarter of 2010. These results cover the period from April 4, 2010 to July 3, 2010.
Highlights - Revenues for the second quarter of 2010 increased by 20.0% to $144.1 million, up from $120.0 million for the same period in 2009. Net revenues were $118.8 million compared to $100.6 million, an increase of 18.1% from 2009 to 2010. Organic growth for the second quarter respectively accounted for 7.2% and 5.2% of the increase of revenues and net revenues, the remaining increase being generated by the acquisitions completed since the second quarter of 2009. - Net earnings were $9.5 million or $0.52 per unit on a basic and diluted basis for the second quarter, a 23.2% increase from the amount of $7.7 million achieved for the same period in 2009. - Earnings before non-controlling interest were $15.0 million for the second quarter of 2010. EBITDA increased by 14.9% from $19.5 million in the second quarter of 2009 to $22.4 million for the same period this year. - For the second quarter of 2010, adjusted distributable cash totalled $19.6 million or $0.72 per unit, of which $10.2 million was distributed to unitholders, representing an adjusted payout ratio of 52.1%. - As at July 3, 2010, backlog stood at $398.6 million and represented 8.3 months of upcoming work. Several new private sector mandates in the industrial, energy and buildings markets were awarded to the Fund in this second quarter while public sector work remained steady. - The Fund added approximately 235 employees in the second quarter of 2010 with 4 acquisitions; one of which Terrain Group Inc. provided GENIVAR with a platform of 5 offices in New Brunswick and Nova Scotia to grow its business in Atlantic Canada. - On April 16, 2010, the Fund announced a plan of arrangement to convert from an Income Trust structure to a publicly-traded corporation on or about January 1, 2011. This plan of arrangement was approved by the unitholders of the Fund on May 27, 2010, as well as by the Superior Court of Quebec on June 14, 2010.
"The Fund continued to execute its consolidation strategy in Canada and we believe that the fundamentals of the consulting engineering industry in our country remain solid and that the outlook is positive in our market segments" said Pierre Shoiry, President and CEO of the Fund. "With the addition of Terrain Group Inc., we are now established in Atlantic Canada and in a position to serve our clients from coast to coast", he added. "First semester results for fiscal 2010 are robust which bode well for the full year", concluded Shoiry.
Conference call ---------------
A conference call will be held on August 10, 2010 at 4:00 p.m. (Eastern Time) to discuss these results.
To participate in the conference call:
- Montreal region, dial 514-861-2909
- Canada and United States, dial 1-888-789-9572
Enter access code 7287206
About GENIVAR
GENIVAR is a leading Canadian engineering services firm providing private and public-sector clients with a comprehensive range of professional consulting services throughout all project phases, including planning, design, construction and maintenance. Ranging in size and scope, GENIVAR's clients primarily operate in the building, industrial, energy, municipal infrastructure, transportation and environmental sectors. GENIVAR is one of Canada's largest engineering services firms based on number of employees, with more than 4,500 managers, professionals, technicians and technologists and support staff in more than 85 locations in Canada and internationally.
RESULTS OF OPERATIONS
---------------------------------------------------- Second quarter Year to date ---------------------------------------------------- 2010 2009 2010 2009 ---------------------------------------------------- IN THOUSANDS OF FOR THE FOR THE FOR THE FOR THE DOLLARS EXCEPT PERIOD FROM PERIOD FROM PERIOD FROM PERIOD FROM THE NUMBER OF APRIL 4 MARCH 29 JANUARY 1 JANUARY 1 UNITS AND PER TO JULY 3 TO JUNE 27 TO JULY 3 TO JUNE 27 UNIT DATA (UNAUDITED) (UNAUDITED) (UNAUDITED) (UNAUDITED) ------------------------------------------------------------------------- Revenues $ 144,109 $ 120,045 $ 270,070 $ 217,476 Less: Subconsultants and other direct expenses $ 25,295 $ 19,411 $ 43,444 $ 32,038 Net revenues $ 118,814 $ 100,634 $ 226,626 $ 185,438 Direct project costs $ 60,228 $ 50,212 $ 115,758 $ 92,606 ------------------------------------------------------------------------- Gross margin $ 58,586 $ 50,422 $ 110,868 $ 92,832 Marketing, general, and administrative expenses and others $ 36,177 $ 30,915 $ 69,931 $ 56,600 ------------------------------------------------------------------------- EBITDA $ 22,409 $ 19,507 $ 40,937 $ 36,232 ------------------------------------------------------------------------- Interest $ 201 $ 567 $ 462 $ 886 Depreciation of property, plant and equipment $ 1,695 $ 1,571 $ 3,205 $ 2,969 Amortization of intangible assets $ 4,951 $ 3,961 $ 9,683 $ 8,104 ------------------------------------------------------------------------- Earnings before income taxes and non-controlling interest $ 15,562 $ 13,408 $ 27,587 $ 24,273 Income taxes $ 548 $ 799 $ 1,547 $ 1,246 ------------------------------------------------------------------------- Earnings before non-controlling interest $ 15,014 $ 12,609 $ 26,040 $ 23,027 Non-controlling interest $ 5,557 $ 4,935 $ 9,234 $ 8,949 ------------------------------------------------------------------------- Net earnings $ 9,457 $ 7,674 $ 16,806 $ 14,078 Basic net earnings per unit $ 0.52 $ 0.54 $ 0.93 $ 0.99 Weighted average number of units 18,103,589 14,276,730 18,103,589 14,276,900 Diluted net earnings per unit $ 0.52 $ 0.54 $ 0.93 $ 0.99 Diluted weighted average number of units 23,480,082 23,348,960 25,342,050 23,348,944 -------------------------------------------------------------------------
DISTRIBUTABLE CASH
---------------------------------------------------- Second quarter Year to date ---------------------------------------------------- 2010 2009 2010 2009 ---------------------------------------------------- FOR THE FOR THE FOR THE FOR THE PERIOD FROM PERIOD FROM PERIOD FROM PERIOD FROM IN THOUSANDS OF APRIL 4 MARCH 29 JANUARY 1 JANUARY 1 DOLLARS EXCEPT TO JULY 3 TO JUNE 27 TO JULY 3 TO JUNE 27 PER UNIT DATA (UNAUDITED) (UNAUDITED) (UNAUDITED) (UNAUDITED) ------------------------------------------------------------------------- Cash flows from operating activities $ 9,481 $ 991 $ 25,681 $ 14,041 Capital expenditures paid ($ 2,864) ($ 3,475) ($ 7,314) ($ 7,021) Standardized distributable cash $ 6,617 ($ 2,484) $ 18,367 $ 7,020 Change in non-cash working capital items(1) $ 12,396 $ 16,996 $ 13,598 $ 19,617 Capital expenditures paid for UNISON project(2) $ 545 - $ 1,617 - Adjusted distributable cash $ 19,558 $ 14,512 $ 33,582 $ 26,637 Adjusted distributable cash, per unit(3) $ 0.72 $ 0.62 $ 1.24 $ 1.14 Payout ratio Standardized 154.0% (352.6%) 110.9% 249.5% Adjusted 52.1% 60.4% 60.7% 65.8% ------------------------------------------------------------------------- Distributions Fund's units distributions declared $ 6,789 $ 5,360 $ 13,578 $ 10,720 Class B Exchangeable LP Unit distributions declared $ 1,623 $ 1,623 $ 3,246 $ 3,246 Class C Exchangeable LP Unit distributions declared $ 1,775 $ 1,775 $ 3,549 $ 3,550 Distributions declared, all units $ 10,187 $ 8,758 $ 20,373 $ 17,516 Distributions declared, all units, per unit(4) $ 0.38 $ 0.38 $ 0.75 $ 0.75 ------------------------------------------------------------------------- (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) The Fund is working towards the implementation of a new information management system called the UNISON project. Costs incurred for this project are non-recurrent and therefore are removed from the calculation of the Adjusted distributable cash. (3) Adjusted distributable cash per unit is calculated using the adjusted weighted average number of units, which represents the weighted average number of units receiving distributions. (4) Distributions declared per unit represent the monthly distributions declared. Distributions declared per unit, calculated using the adjusted weighted average number of units, were $0.38 per unit for the second quarter.
NON-GAAP MEASURES
The Fund uses Non-GAAP measures that are used by Canadian open-ended income funds as indicators of financial performance measures which are not recognized 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.
Non-GAAP measures used by the Fund are Net revenues, EBITDA, Distributable cash, adjusted weighted average number of units and Payout ratio.
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 the 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. Investors are cautioned that EBITDA should not be construed as an alternative to net earnings for the period (as determined in accordance with GAAP) as an indicator of the Fund's performance, or as an alternative to cash flows from operating, financing and investing activities as a measure of the Fund's liquidity and cash flows. The Fund's method of calculating EBITDA may differ from the methods used by other issuers and, accordingly, the Fund's EBITDA may not be comparable to similar measures used by other issuers.
Distributable cash
The Fund views distributable cash as an operating performance measure and it is a non-GAAP measure generally used by Canadian income funds as an indicator of financial performance.
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.
Adjusted weighted average number of units
Adjusted weighted average number of units represents the weighted average number of unit receiving distributions.
Payout ratio
Standardized payout ratio is defined as aggregate cash distributions declared divided by standardized distributable cash. Adjusted payout ratio is defined as aggregate cash distributions declared divided by adjusted distributable cash.
For further information: Pierre Shoiry, President and CEO, GENIVAR Income Fund, Tel.: 514-340-0046, ext. 5104; Marlene Casciaro, Director of Communications, GENIVAR Income Fund, Tel.: 514-340-0046, ext. 5184
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