GENIVAR Income Fund Announces Second Quarter Results: Net Earnings Up by 156%



    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.




For further information:

For further information: Pierre Shoiry, President and CEO, GENIVAR
Income Fund, (514) 340-0046, ext. 5104; Marlène Casciaro, Director of
Communications, GENIVAR Income Fund, (514) 340-0046, ext. 5104

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