IBI announces 2009 first quarter results - a surge in March overcomes a slow start, producing a solid quarter and promising base for 2009:



    
    -   Revenue at $66.9 million; increase of $15.5 million + 30.3%;

    -   Overall organic revenue growth of $2.1 million + 4.0%

    -   EBITDA at $9.3 million; increase of $ 0.1 million + 1.3%;

    -   Distributable Cash of $6.9 million; increase of $0.4 million + 6.0%

    -   Distributable Cash per unit of $0.4237 vs declared of $0.399 - payout
        ratio of 94.4%
    

    TORONTO, May 7 /CNW/ - IBI Income Fund (the "Fund") (TSX: IBG.UN) today
announced its financial results for the three months ended March 31, 2009.
    Revenue for the three months ended March 31, 2009, was up $15.5 million
(30.3%) to $66.9 million compared to $51.4 million for the three months ended
March 31, 2008. Revenue per day was down in January, increased in February and
surged in March. The three months ended March 31, 2009 had only 62 available
working days compared with 63 days for an average quarter. The one additional
day would have raised revenue to approximately $68.0 million. While revenue is
up over the first quarter of 2008, it is down from the fourth quarter.
    Revenue from strategic growth through acquisitions was approximately
$13.5 million of the increase for the three months ended March 31, 2009. This
strategic growth was generated through the additional revenues resulting from
the acquisitions/mergers of Rhon Ernest-Jones Consulting Engineers and Martin
+ Marcotte in the second quarter of 2008 and Giffels Professional Engineering
practice and Page + Steele Incorporated, Architects in the third quarter of
2008. The organic growth for the quarter of $2.0 million (4.0% growth) was
concentrated in professional services. Revenue for the facilities management
practice down slightly from the previous year. The overall growth in activity
was accomplished through a 29.3% increase in the average number of staff from
1,688 during the three months ended March 31, 2008 to 2,183 during the three
months ended March 31, 2009. The number of staff as of March 31, 2009 was
2,107, up from 1,731 as of March 31, 2008.

    Net earnings before non-controlling interest of the Fund for the three
months ended March 31, 2009 were $4.6 million, or $0.2824 per Unit (on a fully
diluted basis) compared with $6.3 million or $0.4043 per Unit (on a fully
diluted basis) for the three months ended March 31, 2008. As a percentage of
revenue, net earnings before non-controlling interest were 6.9% for the three
months ended March 31, 2009, compared with 12.3% for the three months ended
March 31, 2008. The decrease in earnings was primarily due to the slow down in
revenue that was experienced during January and the improved but still
insufficient revenue relative to staff resources in February. As a consequence
IBI effected reductions in staff resources and incurred corresponding
termination costs which provide a staff complement appropriately sized for the
backlog of ongoing committed work for 2009. In addition, the increase in the
amortization of intangibles has resulted in lower earnings during the first
quarter of 2009

    EBITDA for the three months ended March 31, 2009 was up $0.1 million
(1.3%) to $9.3 million compared with $9.2 million for the three months ended
March 31, 2008. As a percentage of revenue, EBITDA for the three months ended
March 31, 2009 was 13.9% compared with 17.8% for the three months ended March
31, 2008. EBITDA was weak in January and February, but strong in March.
Excluding the impact of the discontinued salaries and termination costs,
EBITDA as a percentage of revenue for the three months ended March 31, 2009
would have been 17.4%, which is slightly below the three months ended March
31, 2008.

    Distributable Cash - For the three months ended March 31, 2009, the Fund
generated $6.9 million of Distributable Cash, up $0.4 million, (6.0%) compared
with $6.5 million for the three months ended March 31, 2008. On a per Unit
basis, based on the weighted average number of Units outstanding,
Distributable Cash was $0.4237 for the three months ended March 31, 2009; an
increase of $0.0077 compared with $0.4160 for the three months ended March 31,
2008. As with Earnings and EBITDA, Distributable Cash earned was impacted
negatively by the slow pace of January and February. This represents a payout
ratio of 94.4% for the three months ended March 31, 2009, compared with 90.3%
for the three months ended March 31, 2008. Excluding the impact of the
discontinued salaries and termination costs, the payout ratio for the three
months ended March 31, 2009 would have been 70.1%.

    Backlog:

    The current backlog of contracted committed fee volume for the next
twelve months has increased to the equivalent approaching eight months of work
from the equivalent of seven months of work at the fee volume of current
activity, since the IBI Group report on the year ended December 31, 2008. This
is very encouraging as it follows the relatively very slow period of January
and most of February and provides a confidence in the revenue IBI Group
anticipates for the remainder of 2009. Backlog for Government and public
institutional clients has increased as the percentage of the total to
approximately 65%. Backlog has continued to increase in building facility
areas in education, in health care and in transportation terminals as well as
in transportation networks and systems technology. In addition, IBI Group has
been recently mandated by entities directly owned or affiliated with pension
institutions, a number of major new high-rise projects in urban areas, as well
as most recently some work for private entrepreneurs. The pace of the increase
in backlog is continuing since the end of the first quarter of 2009.

    Operating Highlights and Major Achievements:

    In the months of January and February of 2009, IBI Group was impacted by
the recession, primarily arising from the delay in investments/expenditures by
public agency clients. A notable example was the delay in the approval of the
annual budget by the State of California which was finally approved in
February 2009. These delays in investments/expenditures extended the timeframe
of the authorization of work proceeding and/or in the pace of work and,
therefore, cash flow to IBI Group. The situation changed materially in the
latter part of February which resulted in a strong performance in the month of
March, 2009 and has been continuing at a stronger pace.
    In response to the slowdown, IBI Group trimmed staff levels, particularly
in those offices affected by the delay in work. Staff reductions totalled 163
people from 2,270 as of December 31, 2008 to 2,107 as of March 31, 2009.
    There were one time costs of $0.6 million incurred during the quarter to
affect this reduction in staff, as well as an ongoing reduction in payroll
costs on a quarterly basis of approximately $1.8 million.
    Through this reduction in staffing levels and payroll costs, IBI Group
significantly improved its financial results in March and provided a basis for
financially successful results for the balance of 2009.
    During this first quarter, IBI Group progressed with the integration of
firms acquired in 2008. Young + Wright/IBI Group Architects relocated to the
main offices of IBI Group and IBI Group Architects in Toronto. This physical
integration has heightened the synergy of operations.
    During the first quarter, professional efforts in transportation/transit
planning and design of Giffels Professional Engineering and IBI Group
intensified with the collaboration on significant light rail transit and other
transportation/transit projects that are part of Transit City Toronto.
    Progress was achieved during the quarter on the major McGill University
Medical Centre involving a number of IBI Group offices including Martin
Marcotte Architects who became affiliated with IBI Group in May, 2008, (now
operating as Martin Marcotte/Beinhaker Architectes).
    These are examples representative of the progress in integration of the
components of the firm.
    On January 30, 2009, IBI entered into a new credit agreement with a
syndicate of three banks. This agreement highlighted the lending support and
confidence expressed by the banks in the operation of the Fund.

    Investor Conference Call

    The Fund will hold a conference call on Friday, May 8, 2009 at 8:30 a.m.
Eastern Standard Time (EST). To participate in the conference call, please
dial in before 8:30 a.m. EST to 800 909-4252 for local and toll-free North
American access, or 1 212 231 2901 for international access.
    An audio replay of the call will be available for 14 days, by dialling
416-626-4100 for local and international access, or 1 800 558-5253 for
toll-free North American access, passcode 21422940 followed by the number sign
on your telephone keypad.


    
    Selected Consolidated Financial Information and Reconciliation of
    Non-GAAP Measures

                                                  Three months  Three months
                                                   ended March   ended March
                                                      31, 2009      31, 2008
                                                     Unaudited     Unaudited
    in thousands of dollars
     except for per Unit amounts

    Revenue                                           $ 66,914      $ 51,369
                                                     ------------------------
    Expenses                                            57,643        42,204
                                                     ------------------------
    Earnings before income taxes,
     interest and amortization (EBITDA)                  9,271         9,165
    Interest                                             1,183           703
    Income taxes                                           468           335
    Amortisation of property and
     equipment and intangible assets                     3,040         1,839
    Amortization of deferred credit - leases               (28)          (51)
                                                     ------------------------

    Net earnings before non-controlling interest      $  4,608      $  6,339
                                                     ------------------------
    Basic and diluted net earnings per Unit           $ 0.2824      $ 0.4043
                                                     ------------------------
    Distributable Cash
    Cash flow used in operating activities            $ (1,378)     $(13,642)
    Less: Capital expenditures                            (470)       (1,147)
                                                     ------------------------
    Standardized Distributable Cash                   $ (1,848)     $(14,789)
    Add (deduct):
      Change in non-cash operating working capital       8,516        21,557
      Current income tax expense                           950           547
      Income taxes paid                                   (703)         (794)
                                                     ------------------------
    Distributable Cash                                $  6,915      $  6,521
                                                     ------------------------
    Weighted average basic and diluted
    Distributable Cash per Unit(1)                    $ 0.4237      $ 0.4160
                                                     ------------------------
    Aggregate distributions declared                  $  6,526      $  5,892
                                                     ------------------------
    Basic and diluted aggregate
     distributions declared per Unit(1)               $ 0.3999      $ 0.3758
                                                     ------------------------

    (1) Distributable Cash per Unit amounts are calculated by including both
        the Class A partnership units and the Class B partnership units in
        the denominator.
    

    Non-GAAP Measures - Distributable Cash

    Distributable Cash does not have a 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 defines Distributable Cash as
cash flow from operating activities before change in non-cash working capital
and income taxes and after capital expenditures and income taxes paid. A
reconciliation of Distributable Cash to cash flow from operating activities
has been provided under the heading "Selected Consolidated Financial
Information and Reconciliation of Non-GAAP Measures".
    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. The
Fund believes that its distributable cash is a useful supplemental measure
that may assist prospective investors in assessing the return on their
investment in Units.
    References to "EBITDA" are to earnings before interest, income taxes,
depreciation and amortization. Management of the Fund believes that in
addition to net earnings, EBITDA is a useful supplemental measure as it
provides readers with an indication of cash available for distribution prior
to debt service, capital expenditures and income taxes. Readers should be
cautioned, however, that EBITDA should not be construed as an alternative to
net earnings determined in accordance with GAAP as an indicator of the Fund's
performance or to cash flows from operating, investing and financing
activities as a measure of liquidity and cash flows. EBITDA is not a
recognized measure under GAAP and does not have a standardized meaning
prescribed by GAAP, and the Fund's method of calculating EBITDA may differ
from other issuers. Accordingly, EBITDA may not be comparable to similar
measures used by other issuers. A reconciliation of net earnings with EBITDA
has been provided under the heading "Selected Consolidated Financial
Information and Reconciliation of Non-GAAP Measures"

    %SEDAR: 00021044E




For further information:

For further information: Allan J. Kamerman, IBI Income Fund, 230
Richmond Street West, 5th Floor, Toronto, ON, M5V 1V6, Tel: (416) 596-1930

Organization Profile

IBI Group Inc.

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