Third quarter yields solid results for GENIVAR Income Fund
MONTREAL, Nov. 9 /CNW Telbec/ - The GENIVAR Income Fund (the "Fund") announced today its financial and operating results (unaudited) for the third quarter of 2010. These results cover the period from July 4, 2010 to October 2, 2010.
Highlights
- For the third quarter of 2010, revenues rose to $155.7 million, up from
$125.4 million, representing an increase of 24.1%. Net revenues were
$124.3 million, compared to $101.2 million, an increase of 22.8% from
2009 to 2010. Organic growth accounted for 7.4% of the increase in net
revenues, the remaining 15.4% resulting from acquisitions.
- Net earnings were $11.1 million or $0.61 per unit on a basic and
diluted basis for the third quarter, up from $8.8 million or $0.62 per
unit on a basic and diluted basis achieved for the same period in 2009,
representing an increase of 25.8%.
- Earnings before non-controlling interest were $17.1 million, up from
$14.4 million in 2009. EBITDA increased to $24.3 million in the third
quarter of 2010 from $21.4 million for the same period in 2009.
- For the third quarter of 2010, adjusted distributable cash totalled
$22.5 million, of which $10.2 million were distributed to unitholders,
representing an adjusted payout ratio of 45.3%.
- During the third quarter, the Fund completed the acquisition of Pryde
Schropp McComb Inc. ("PSMI"), an Ontario-based firm specializing in
engineering, project management, planning and software solutions for
the aviation industry. PSMI has a staff of over 40 employees based in
offices in Ontario and Alberta and provides services to airports across
Canada and internationally.
- As at October 2, 2010, the backlog remained stable and reached
$401.7 million, compared to $398.6 million at the end of the second
quarter.
- Subsequent to quarter-end, the Fund entered into new syndicated credit
facilities, expanding the limit to its credit facilities from
$82.0 million at the end of the second quarter to $225.0 million and
extending the maturity date to 2013.
"We are pleased with the robust performance of the Fund over the last nine months. We achieved it through the commitment, passion and dedication of all of our employees," said Pierre Shoiry, President and CEO of the Fund. "As a result of our recent debt financing, our solid balance sheet coupled with a healthy target pipeline, we are confident that we have positioned the firm to pursue its global diversification and growth objectives."
Conference call
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A conference call will be held on November 9, 2010 at 4:00 p.m. (Eastern Time) to discuss these results.
To participate in the conference call:
- Montreal region, dial 514-861-2255.
- Canada and United States, dial 1-866-696-5910.
Enter access code 2122571.
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 and 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
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Third quarter Year to date
-------------------------------------------------------
2010 2009 2010 2009
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FOR THE FOR THE FOR THE FOR THE
IN THOUSANDS OF PERIOD FROM PERIOD FROM PERIOD FROM PERIOD FROM
DOLLARS EXCEPT JULY 4 TO JUNE 28 TO JANUARY 1 TO JANUARY 1 TO
NUMBER OF UNITS OCTOBER 2 SEPTEMBER 26 OCTOBER 2 SEPTEMBER 26
AND PER UNIT DATA (UNAUDITED) (UNAUDITED) (UNAUDITED) (UNAUDITED)
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Revenues $ 155,655 $ 125,426 $ 425,725 $ 342,902
Less:
Subconsultants
and other direct
expenses $ 31,385 $ 24,245 $ 74,829 $ 56,283
Net revenues $ 124,270 $ 101,181 $ 350,896 $ 286,619
Direct project
costs $ 61,182 $ 49,127 $ 176,940 $ 141,733
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Gross margin $ 63,088 $ 52,054 $ 173,956 $ 144,866
Marketing,
general, and
administrative
expenses and
others $ 38,824 $ 30,669 $ 108,755 $ 87,269
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EBITDA $ 24,264 $ 21,385 $ 65,201 $ 57,617
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Interest $ 325 $ 626 $ 787 $ 1,512
Depreciation of
property, plant
and equipment $ 1,730 $ 1,642 $ 4,935 $ 4,611
Amortization of
intangible assets $ 5,102 $ 4,213 $ 14,785 $ 12,317
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Earnings before
income taxes and
non-controlling
interest $ 17,107 $ 14,904 $ 44,694 $ 39,177
Income taxes $ 29 $ 479 $ 1,576 $ 1,725
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Earnings before
non-controlling
interest $ 17,078 $ 14,425 $ 43,118 $ 37,452
Non-controlling
interest $ 5,978 $ 5,601 $ 15,212 $ 14,550
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Net earnings $ 11,100 $ 8,824 $ 27,906 $ 22,902
Basic net earnings
per unit $ 0.61 $ 0.62 $ 1.54 $ 1.60
Weighted average
number of units 18,103,589 14,276,466 18,103,589 14,276,753
Diluted weighted
average of net
earnings $ 11,100 $ 14,439 $ 35,449 $ 37,473
Diluted net
earnings per unit $ 0.61 $ 0.62 $ 1.54 $ 1.60
Diluted weighted
average number of
units 18,103,589 23,351,903 22,946,778 23,352,088
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DISTRIBUTABLE CASH
-------------------------------------------------------
Third quarter Year to date
-------------------------------------------------------
2010 2009 2010 2009
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FOR THE FOR THE FOR THE FOR THE
PERIOD FROM PERIOD FROM PERIOD FROM PERIOD FROM
IN THOUSANDS OF JULY 4 TO JUNE 28 TO JANUARY 1 TO JANUARY 1 TO
DOLLARS EXCEPT OCTOBER 2 SEPTEMBER 26 OCTOBER 2 SEPTEMBER 26
PER UNIT DATA (UNAUDITED) (UNAUDITED) (UNAUDITED) (UNAUDITED)
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Cash flows from
operating
activities $ 134 $ 2,837 $ 25,815 $ 16,878
Capital
expenditures paid ($ 1,571) ($ 1,898) ($ 8,885) ($ 8,919)
Standardized
distributable
cash ($ 1,437) $ 939 $ 16,930 $ 7,959
Change in non-cash
working capital
items(1) $ 23,770 $ 17,235 $ 37,368 $ 36,852
Capital
expenditures
paid for UNISON
project(2) $ 150 - $ 1,767 -
Adjusted
distributable
cash $ 22,483 $ 18,174 $ 56,065 $ 44,811
Adjusted
distributable
cash, per unit(3) $ 0.83 $ 0.78 $ 2.06 $ 1.92
Payout ratio
Standardized (708.9%) 932.7% 180.5% 330.10%
Adjusted 45.3% 48.2% 54.5% 58.60%
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Distributions
Fund's units
distributions
declared $ 6,789 $ 5,361 $ 20,367 $ 16,081
Class B
Exchangeable LP
Unit distributions
declared $ 1,624 $ 1,624 $ 4,870 $ 4,870
Class C
Exchangeable LP
Unit distributions
declared $ 1,774 $ 1,773 $ 5,323 $ 5,323
Distributions
declared, all
units $ 10,187 $ 8,758 $ 30,560 $ 26,274
Distributions
declared, all
units, per unit(4) $ 0.38 $ 0.38 $ 1.13 $ 1.13
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(1) Distributions are based on the 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 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 third 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, ratio of funded debt to EBITDA 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.
Ratio of funded debt to EBITDA
Ratio of funded debt to EBITDA represents the consolidated aggregate of all interest bearing debt on consolidated EBITDA determined on the basis of the last four full completed quarters.
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; Alexandre L'Heureux, Chief of Financial Operations, GENIVAR Income Fund, Tel.: 514-340-0046, ext. 5310
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