IBI announces much improved 2009 second quarter results



    
    - Revenue at $69.0 million; increase of $14.3 million + 26.1%;

    - EBITDA at $12.0 million; increase of $ 1.2 million + 11.2%;

    - Distributable Cash of $10.1 million; increase of $2.6 million + 34.0%

    - Distributable Cash per unit of $0.6040 vs declared of $0.3999 - payout
      ratio of 66.2%.
    

    TORONTO, Aug. 5 /CNW/ - IBI Income Fund (the "Fund") (TSX: IBG.UN) today
announced its financial results for the three and six months ended June 30,
2009
    Revenue for the three months ended June 30, 2009 was up $14.3 million
(26.1%) to $69.0 million compared to $54.7 million for the three months ended
June 30, 2008. For the six months ended June 30, 2009, revenue was up $29.8
million (28.1%) to $135.9 million compared to $106.0 million for the six
months ended June 30, 2008.
    Revenue from strategic growth through acquisitions was approximately
$14.0 million of the increase for the three months ended June 30, 2009. This
strategic growth was generated through the additional revenues resulting from
the integration of Rhon Ernest-Jones Consulting Engineers and Martin +
Marcotte, Architects (now operating as Martin Marcotte Beinhaker Architects)
in the second quarter of 2008 and Giffels Professional Engineering practice
and Page + Steele Incorporated, Architects in the third quarter of 2008 and
Gruzen Samton in the second quarter of 2009. The overall growth in activity
was accomplished through a 20.4% increase in the average number of staff from
1,788 during the three months ended June 30, 2008 to 2,152 during the three
months ended June 30, 2009. The number of staff as of June 30, 2009 was 2,212,
up from 1,857 as of June 30, 2008, an increase of 19.1%

    EBITDA for the three months ended June 30, 2009 was up $1.2 million
(11.2%) to $12.0 million compared with $10.8 million for the three months
ended June 30, 2008. For the six months ended June 30, 2009, EBITDA was up
$1.3 million (6.6%) to $21.1 million compared with $19.9 million for the six
months ended June 30, 2008. As a percentage of revenue, EBITDA for the three
months ended June 30, 2009 was 17.3% compared with 19.7% for the three months
ended June 30, 2008. As a percentage of revenue, EBITDA for the six months
ended June 30, 2009 was 15.6% compared with 18.8% for the six months ended
June 30, 2008.

    Net earnings before non-controlling interest of the Fund for the three
months ended June 30, 2009 were $5.7 million, or $0.3380 per Unit (on a fully
diluted basis) compared with $7.7 million or $0.4922 per Unit (on a fully
diluted basis) for the three months ended June 30, 2008. For the six months
ended June 30, 2009, net earnings before non-controlling interest were $10.3
million or $0.6215 per Unit (on a fully diluted basis) compared with $14.1
million or $0.8965 per Unit (on a fully diluted basis) for the three months
ended June 30, 2008. As a percentage of revenue, net earnings before
non-controlling interest were 8.2% for the three months ended June 30, 2009,
compared with 14.1% for the three months ended June 30, 2008. For the six
months ended June 30, 2009, net earnings before non-controlling interest as a
percentage of revenue were 7.6% compared with 13.3% for the six months June
30, 2008. The increases in taxes, amortization of intangibles and interest
have resulted in lower earnings during the first half of 2009.

    Distributable Cash - For the three months ended June 30, 2009, the Fund
generated $10.1 million of Distributable Cash, up $2.6 million, (34.0%)
compared with $7.6 million for the three months ended June 30, 2008. For the
six months ended June 30, 2009, Distributable Cash was up $3.0 million (21.1%)
to $17.1 million compared with $14.1 million for the six months ended June 30,
2008. On a per Unit basis, based on the weighted average number of Units
outstanding, Distributable Cash was $0.6040 for the three months ended June
30, 2009; an increase of $0.1210 compared with $0.4829 for the three months
ended June 30, 2008. Distributable cash for 2009 has been positively impacted
by the reduction in capital expenditures together with the reduction of the
overall taxes paid which was the result of a tax refund received during the
quarter. This represents a payout ratio of 66.2% for the three months ended
June 30, 2009, compared with 79.2% for the three months ended June 30, 2008.

    Backlog:

    As of June 30, 2009, the overall backlog of IBI Group increased at the
end of the second quarter to a level in excess of the equivalent of eight
months from a level of the equivalent of eight months of work at the end of
the first quarter. The backlog has been increasing steadily since the month of
March. This is very encouraging as compared to the relatively very slow period
of January and most of February and provides confidence in the revenue IBI
Group anticipates for the remainder of 2009 and into 2010, based on committed
contract fee work. Backlog for Government and public institutional clients has
increased as the percentage of the total to now exceed 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. Since the month of March, IBI Group has been mandated with
new project assignments by entities directly owned or affiliated with pension
institutions, a number of major new high-rise projects in urban areas.
Additionally, recently new assignments have been mandated to IBI Group from
private development companies for the first time since the fourth quarter of
2008.

    Operating Highlights and Major Achievements:

    The second quarter results have evidenced a strong improvement in
operating results, as compared to the first quarter. IBI Group was impacted by
the recession in the first quarter and in particular in the months of January
and February of 2009, and the consequential drastic slowdown in activity in
the private sector and in delays in investments/expenditures announced by
public agency clients. A notable example was the delay in the approval of the
2008 Annual Budget by the State of California, which budget was not approved
until February 2009. The State of California has just recently approved the
2009 budget with significant cutbacks in social spending in order to achieve a
balanced budget. Capital spending for educational facilities continues to be
supported by dedicated bonds, issued to raise the funds for school and
community college projects and is not directly affected by such budgetary
cuts. As noted in the MD&A of the first quarter, the situation changed
materially for IBI Group in the latter part of February, which resulted in a
strong performance in the month of March, 2009 and was stated then as being
continuing at a stronger pace. This stronger pace is now reflected in the
improved second quarter results.
    In response to the slowdown, IBI Group trimmed staff levels, particularly
in those offices affected by the delay in work.  Staff reductions in the first
quarter resulted in a staff level of 2,107 as of March 31, 2009.  Staffing
increased in the second quarter ending the quarter at 2,212. The substantial
majority of the increase was from the integration of Gruzen Samton Architects
Planners.  Current staff complement is appropriately sized for the backlog of
the ongoing committed work at the professional standards of the firm, with
some spare capacity.
    The improvement in the latter part of February, 2009 was evidenced not
only through the increase of cash flow from existing projects, but also
through the positive commitment of new professional contracts for IBI Group.
As of June 30, 2009, the overall backlog of IBI Group increased from a level
of the equivalent of eight months of work at the end of the first quarter to
now exceed the equivalent of eight months. The backlog has been increasing
steadily since the month of March.
    During this second quarter, IBI progressed with the closing of the
strategic alliance of Gruzen Samton Archictects, Planners and IBI Group. This
included Gruzen Samton Architects, Planners and Interior Designers, PC in New
York City and Gruzen Samton, LLP in Washington DC. The closing of this
strategic alliance was effective May 2009 and provided IBI Group with
participation in the New York / New Jersey Metropolitan Region as well as the
important market of the US capital with particular focus in the architecture
of educational facilities; planning and interior design for major government
offices and other public facilities; and design of transportation facilities.
    The progress in professional work of IBI Group in the quarter included:
    
      - A large and expanding suite of projects in Greece in tolling and
        traffic management systems for highways;
      - Further progress in the transportation/transit planning and design of
        a significant light rail transit line and other projects that are
        part of Transit City in Toronto;
      - Progress to substantial completion of the submission for the major
        McGill University Medical Centre for which numerous IBI Group offices
        have collaborated.
    

    IBI also initiated discussions with the syndicate of banks providing its
credit facilities which have now led to an agreement in principle for:

    
      - The extension in the term of the credit facilities for three years
        from the closing of the new arrangements expected in August 2009;
      - The increase in the upper limit of the facility from $100 million to
        $150 million.
    

    Further progress and strategic growth continued subsequent to the second
quarter with the merger within IBI Group of the architectural practice of BFGC
Architects Planners Inc., with offices in San Jose, Bakersfield, and San Luis
Obispo, effective August 2009. This firm has been in practice for some 60
years with a complement of approximately 70 people serving clients in the
design of schools and community college facilities as well as architectural
services in other building types.
    On May 28, 2009, IBI Group concluded a private placement financing and
issued 1,124,038 units at $12.90 for proceeds of $14.5 million.

    Investor Conference Call

    The Fund will hold a conference call on Thursday, August 6, 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 800 758-5606 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 21431233 followed by the number sign
on your telephone keypad.

    
       Selected Consolidated Financial Information and Reconciliation
                             of Non-GAAP Measures

                                 Three       Three        Six         Six
                                 months      months      months      months
    in thousands of              ended       ended       ended       ended
     dollars except               June        June        June        June
     for per Unit               30, 2009    30, 2008    30, 2009    30, 2008
     amounts                   Unaudited   Unaudited   Unaudited   Unaudited

    Revenue                   $   68,957  $   54,678  $  135,871  $  106,047
                             ------------------------------------------------
    Expenses                      57,008      43,932     114,651      86,136
                             ------------------------------------------------
    Earnings before income
     taxes, interest and
     amortization (EBITDA)        11,949      10,746      21,220      19,911
    Interest                       1,451         728       2,634       1,431
    Income taxes                   1,716         211       2,184         547
    Amortisation of property
     and equipment and
     intangible assets             3,132       2,143       6,172       3,981
    Amortization of deferred
     credit - leases                 (28)        (52)        (56)       (103)
                             ------------------------------------------------

    Net earnings before
     non-controlling interest $    5,678  $    7,716  $   10,286  $   14,055
                             ------------------------------------------------
    Basic and diluted net
     earnings per Unit        $   0.3380  $   0.4922  $   0.6215  $   0.8965
                             ------------------------------------------------
    Distributable Cash
    Cash flow used in
     operating activities     $     (520) $    1,507  $   (1,897) $  (12,136)
    Less: Capital expenditures      (413)     (1,813)       (883)     (2,960)
                             ------------------------------------------------
    Standardized
     Distributable Cash       $     (933) $     (306) $   (2,780) $  (15,096)
    Add (deduct):
    Change in non-cash
     operating working capital     8,796       7,891      17,311      29,448
      Current income tax expense   2,222         620       3,172       1,168
      Income taxes paid               62        (634)       (641)     (1,428)
                             ------------------------------------------------
    Distributable Cash        $   10,147  $    7,571  $   17,062  $   14,092
                             ------------------------------------------------
    Weighted average basic
     and diluted Distributable
     Cash per Unit(1)         $   0.6040  $   0.4829  $   1.0278  $   0.8989
                             ------------------------------------------------
    Aggregate distributions
     declared                 $    6,853  $    5,996  $   13,379  $   11,888
                             ------------------------------------------------
    Basic and diluted
     aggregate distributions
     declared per Unit(1)     $   0.3999  $   0.3825  $   0.7998  $   0.7583
                             ------------------------------------------------
    (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.

More on this organization


Custom Packages

Browse our custom packages or build your own to meet your unique communications needs.

Start today.

CNW Membership

Fill out a CNW membership form or contact us at 1 (877) 269-7890

Learn about CNW services

Request more information about CNW products and services or call us at 1 (877) 269-7890