GENIVAR reports its results for the third quarter and year-to-date period of 2011 and declares a dividend of $0.375 per share

MONTREAL, Nov. 9, 2011 /CNW Telbec/ - GENIVAR Inc. (TSX: GNV) ("GENIVAR" or the "Company"), formerly GENIVAR Income Fund (the "Fund"), today announced its financial and operating results for the third quarter and for the year-to-date periods ended October 1, 2011, under the International Financial Reporting Standards ("IFRS"). The third quarter results cover the period from July 3, 2011, to October 1, 2011.

THIRD QUARTER 2011 HIGHLIGHTS

  • Total revenues were $173.1 million compared to $155.7 million in 2010, an increase of 11.2%. Net revenues, expressed as revenues less direct costs for subconsultants and other direct expenses that are recoverable directly from the clients, amounted to $138.6 million, representing an 11.5% increase as compared to 2010.
  • EBITDA stood at $26.6 million, as compared to $24.2 million in 2010. As a percentage of net revenues, the EBITDA margin stood at 19.2% for 2011, compared to 19.4% for 2010.
  • Net earnings amounted to $14.2 million or $0.54 per share.
  • The backlog stood at $419.3 million compared to a backlog of $427.8 million at the end of the second quarter of 2011 and represented approximately 8.0 months of revenues.
  • During the quarter, GENIVAR strengthened its expertise in the field of automation systems with the acquisition of Dakins Engineering Group Ltd., based in Ontario. Also, ARCOP, a Montreal-based firm, internationally known for design and architectural excellence became GENIVAR's partner.
  • Subsequent to the quarter-end, the Company further diversified its professional services offering by welcoming the entities collectively referred to as "Groupe GIROUX," Quebec-based geomatics and surveying firms. The Company also acquired ISACTION Inc., a Quebec-based firm specialized in instrumentation control and automation systems.
  • These four transactions add 204 employees to our workforce and bring the number of new employees who joined GENIVAR through business acquisitions since the beginning of the year to approximately 340.

2011 YEAR-TO-DATE PERIOD HIGHLIGHTS

  • Total revenues were $479.9 million compared to $425.7 million in 2010, an increase of 12.7%. For the same period, net revenues amounted to $396.3 million, representing a 12.9% increase as compared to 2010 which is within the 10-15% target range set for 2011.
  • EBITDA increased to $68.2 million, up from $64.1 million in 2010. As a percentage of net revenues, the EBITDA margin stood at 17.2% for 2011, compared to 18.3% for 2010.
  • Net earnings amounted to $40.1 million or $1.54 per share.

"During the quarter, we continued to focus on operational excellence and we are pleased with the performance of our team," commented Pierre Shoiry, President and Chief Executive Officer of GENIVAR.  "We are also particularly proud to have received the Schreyer Award, which is the most coveted and the highest form of recognition for the consulting engineering industry in Canada. The Gaspé Mines Rehabilitation project conducted for Xstrata Copper Canada was described by the jury as setting a benchmark for future mine decommissioning projects, which positions the work of our environmental team as the gold standard for any similar projects," he concluded.

DIVIDEND
The Board of GENIVAR declared a dividend of $0.375 per share. This dividend will be payable on or about January 15, 2012, to shareholders of record at the close of business on December 31, 2011.

FINANCIAL REPORT
This release includes, by reference, the third quarter 2011 financial reports, including the unaudited interim consolidated financial statements and the Management Discussion & Analysis ("MD&A").

In 2011, GENIVAR reports its financial results in accordance with IFRS, as required for public companies in Canada. Previously, the Company prepared its financial results under Canadian Generally Accepted Accounting Standards ("GAAP"). The comparative financial information has been restated to reflect the adoption of IFRS, with effect from January 1, 2010.

The Company has included reconciliations between IFRS and the amounts previously reported under GAAP in its third quarter of 2011 interim financial statements. For a copy of our full financial results for the third quarter 2011, including the MD&A and the unaudited interim consolidated financial statements, please visit our Website at www.genivar.com.

CONFERENCE CALL
GENIVAR will hold a conference call at 4 p.m. (Eastern Time) on November 9, 2011, to discuss these results. The telephone numbers to access the conference call are as follows:

  • Montreal and International, please dial 514-861-2909
  • Elsewhere in Canada and United States, please dial 877-695-6175
  • Conference number: 8284786

A presentation highlighting the results of the third quarter 2011 will be available on the same day in the Investor section of GENIVAR's Website (www.genivar.com), under Presentations and Events.

A replay of the call will be available until November 16, 2011. The telephone numbers to access the replay of the call are 514-861-2272 or 800-408-3053, password 1421250. The replay of the conference call will also be available in the Investor section of the Website under Presentations and Events, in the days following the event.

RESULTS OF OPERATIONS

   
  Third quarter Year-to-date
  2011 2010 Variation 2011 2010 Variation

IN THOUSANDS OF DOLLARS EXCEPT PER SHARE/UNIT DATA

FOR THE PERIOD 
FROM JULY 3
TO OCTOBER 1
(UNAUDITED)
FOR THE PERIOD
FROM JULY 4
TO OCTOBER 2
(UNAUDITED)
% FOR THE PERIOD  
FROM JANUARY 1
TO OCTOBER 1
(UNAUDITED)
FOR THE PERIOD
FROM JANUARY 1
TO OCTOBER 2
(UNAUDITED)
%
Revenues $ 173,088 $ 155,655 11.2% $ 479,905 $ 425,725 12.7%
             
Less: Subconsultants and other direct expenses $ 34,522 $ 31,385 10.0% $ 83,584 $ 74,829 11.7%
             
Net revenues* $ 138,566 $ 124,270 11.5% $ 396,321 $ 350,896 12.9% 
             
Direct project costs $ 72,472 $ 61,182 18.5% $ 204,041 $ 176,940 15.3%
Gross margin $ 66,094 $ 63,088 4.8% $ 192,280 $ 173,956  10.5%
             
Marketing, general and administrative expenses(1) $ 39,498 $ 38,933 1.5% $ 124,055 $ 109,807 13.0%
EBITDA* $ 26,596 $ 24,155 10.1% $ 68,225 $ 64,149 6.4% 
Amortization of intangible assets $ 4,246 $ 3,845 10.4% $ 12,832 $ 11,995 7.0% 
             
Depreciation of property, plant and equipment $ 2,054 $ 1,593 28.9% $ 5,582 $ 4,523 23.4%
             
Financial expenses $ 1,212 $ 350 246.3% $ 3,403 ($ 3,038) (212.0%)
Earnings before income taxes $ 19,084 $ 18,367 3.9% $ 46,408 $ 50,669  (8.4%)
             
Income tax expenses $ 4,932 $ 307 1,506.5% $ 6,267 $ 2,415 159.5%
Net earnings $ 14,152 $ 18,060 (21.6%) $ 40,141 $ 48,254 (16.8%)
             
Attributable to the:            

- shareholders/unitholders $ 14,152 $ 11,954 18.4% $ 40,141 $ 40,373 (0.6%)
  - non-controlling interest - $ 6,106 (100.0%) - $ 7,881 (100.0%)
Basic net earnings per share/unit $ 0.54 $ 1.00 (46.0%) $ 1.54 $ 2.67  (42.3%)
             
Diluted net earnings per share/unit $ 0.54 $ 1.00 (46.0%) $ 1.54 $ 1.95 (21.0%)
             
Adjusted net earnings* $ 14,152 $ 18,060 (21.6%) $ 40,141 $ 44,404 (9.6%)
             
Adjusted net earnings per share/unit* $ 0.54 $ 0.66 (18.2%) $ 1.54 $ 1.63 (5.5%)

*  Non-IFRS measures.

(1)     The marketing, general and administrative expenses include the exchange loss or gain.

FUNDS FROM OPERATIONS AND FREE CASH FLOW

     
  Third quarter Year-to-date
  2011 2010 2011 2010

IN THOUSANDS OF DOLLARS

FOR THE PERIOD 
FROM JULY 3
TO OCTOBER 1
(UNAUDITED)
FOR THE PERIOD 
FROM JULY 4
TO OCTOBER 2
(UNAUDITED)
FOR THE PERIOD 
FROM JANUARY 1
TO OCTOBER 1
(UNAUDITED)
FOR THE PERIOD
FROM JANUARY 1
TO OCTOBER 2
(UNAUDITED)
Cash flows from operating activities $ 13,225 $ 390 $ 19,257 $ 26,012

Change in non-cash working capital items

$ 6,822

$ 23,687

$ 35,602

$ 36,826
Funds from operations* $ 20,047 $ 24,077 $ 54,859 $ 62,838

Funds from operations per share/unit*

$ 0.77
 
$ 0.89
 
$ 2.11
 
$ 2.31
Less:
Change in non-cash working capital items
($ 6,822) ($ 23,687) ($ 35,602) ($ 36,826)

Capital expenditures

($ 1,997)

($ 1,726)

($ 6,414)

($ 9,493)
Free cash flow* $ 11,228 ($ 1,336) $ 12,843 $ 16,519

Free cash flow per share/unit*
 
$ 0.43

($ 0.05)
 
$ 0.49
 
$ 0.61

* Non-IFRS measures.

NON-IFRS MEASURES

GENIVAR uses non-IFRS measures that are used by Canadian companies as indicators of financial performance measures which are not recognized under IFRS and may differ from similar computations as reported by other similar entities and, accordingly, may not be comparable. GENIVAR believes these measures are useful supplemental information that may assist investors in assessing an investment in shares.

Non-IFRS measures used by GENIVAR are net revenues, EBITDA, EBITDA per share/unit, adjusted net earnings, adjusted net earnings per share/unit, funds from operations, funds from operations per share/unit, free cash flow, and free cash flow per share/unit.

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 is not an IFRS measure and does not have a standardized definition within IFRS. Therefore, net revenues may not be comparable to similar measures presented by other issuers. Investors are warned that net revenues should not be construed as an alternative to revenues for the period (as determined in accordance with IFRS) as an indicator of GENIVAR's performance.

EBITDA and EBITDA per share/unit
EBITDA is defined as earnings before financial expenses, tax, depreciation and amortization. EBITDA is not an IFRS measure and does not have a standardized definition within IFRS. Investors are cautioned that EBITDA should not be considered an alternative to net earnings for the period (as determined in accordance with IFRS) as an indicator of GENIVAR's performance, or an alternative to cash flows from operating, financing and investing activities as a measure of GENIVAR's liquidity and cash flows. GENIVAR's method of calculating EBITDA may differ from the methods used by other issuers and, accordingly, GENIVAR's EBITDA may not be comparable to similar measures used by other issuers.

EBITDA per share/unit is calculated using the weighted average number of shares/units receiving dividends/distributions.

Adjusted net earnings and adjusted net earnings per share/unit
Adjusted net earnings is not an IFRS measure and is defined as net earnings without the income and expenses of the financial liability related to LP Units under IFRS and the share in earnings of the non-controlling interest under the Canadian GAAP.

Adjusted net earnings per share/unit is calculated using the adjusted net earnings divided by the weighted average number of shares/units receiving dividends/distributions.

Funds from operations and funds from operations per share/unit
Funds from operations is not an IFRS measure. It provides Management and investors with a proxy for the amount of cash generated from operating activities before changes in non-cash working capital.

Funds from operations per share/unit is calculated using the weighted average number of shares/units receiving dividends/distributions.

Free cash flow and free cash flow per share/unit
Free cash flow is not an IFRS measure. It provides a consistent and comparable measurement of free cash flow across entities generated from operations and is used as an indicator of financial strength and performance. Free cash flow is defined as cash flows from operating activities, including operating cash flows provided from or used in discontinued operations as reported in accordance with IFRS, less total capital expenditures as reported in the financial statements.

Free cash flow per share/unit is calculated using the weighted average number of shares/units receiving dividends/distributions.

ABOUT GENIVAR INC.
GENIVAR is a leading Canadian consulting services firm providing private and public-sector clients with a full range of professional consulting services through all project phases, including planning, design, construction and maintenance. Ranging in size, its clients operate in various market segments, including the building, industrial and energy, municipal infrastructure, transportation and environmental sectors. GENIVAR is one of the largest engineering services companies in Canada by number of employees, with more than 5,000 managers, professionals, technicians, technologists and support staff in over 100 cities in Canada and internationally.
www.genivar.com

Forward-Looking Statements
Certain information regarding GENIVAR contained herein may constitute forward-looking statements. Forward-looking statements may include estimates, plans, expectations, opinions, forecasts, projections, guidance or other statements that are not statements of fact. Although GENIVAR believes that the expectations reflected in such forward-looking statements are reasonable, it can give no assurance that such expectations will prove to have been correct. These statements are subject to certain risks and uncertainties and may be based on assumptions that could cause actual results to differ materially from those anticipated or implied in the forward-looking statements. GENIVAR's forward-looking statements are expressly qualified in their entirety by this cautionary statement.   

SOURCE GENIVAR INC.

For further information:

Alexandre L'Heureux
Chief Financial Officer
GENIVAR Inc.
Tel.: 514-340-0046, ext. 5310
alexandre.lheureux@genivar.com

Isabelle Adjahi
Director, Communications and Investor Relations
GENIVAR Inc.
Tel.: 514-340-0046, ext. 5648
isabelle.adjahi@genivar.com

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GENIVAR INC.

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