GENIVAR Income Fund Announces Second Quarter Results
MONTREAL, Aug. 10 /CNW Telbec/ - The GENIVAR Income Fund (the "Fund") announced today its financial and operating results (unaudited) for the second quarter of 2010. These results cover the period from April 4, 2010 to July 3, 2010.
Highlights
- Revenues for the second quarter of 2010 increased by 20.0% to
$144.1 million, up from $120.0 million for the same period in 2009.
Net revenues were $118.8 million compared to $100.6 million,
an increase of 18.1% from 2009 to 2010. Organic growth for the second
quarter respectively accounted for 7.2% and 5.2% of the increase of
revenues and net revenues, the remaining increase being generated by
the acquisitions completed since the second quarter of 2009.
- Net earnings were $9.5 million or $0.52 per unit on a basic and
diluted basis for the second quarter, a 23.2% increase from the
amount of $7.7 million achieved for the same period in 2009.
- Earnings before non-controlling interest were $15.0 million for the
second quarter of 2010. EBITDA increased by 14.9% from $19.5 million
in the second quarter of 2009 to $22.4 million for the same period
this year.
- For the second quarter of 2010, adjusted distributable cash totalled
$19.6 million or $0.72 per unit, of which $10.2 million was
distributed to unitholders, representing an adjusted payout ratio of
52.1%.
- As at July 3, 2010, backlog stood at $398.6 million and represented
8.3 months of upcoming work. Several new private sector mandates in
the industrial, energy and buildings markets were awarded to the Fund
in this second quarter while public sector work remained steady.
- The Fund added approximately 235 employees in the second quarter of
2010 with 4 acquisitions; one of which Terrain Group Inc. provided
GENIVAR with a platform of 5 offices in New Brunswick and Nova Scotia
to grow its business in Atlantic Canada.
- On April 16, 2010, the Fund announced a plan of arrangement to
convert from an Income Trust structure to a publicly-traded
corporation on or about January 1, 2011. This plan of arrangement was
approved by the unitholders of the Fund on May 27, 2010, as well as
by the Superior Court of Quebec on June 14, 2010.
"The Fund continued to execute its consolidation strategy in Canada and we believe that the fundamentals of the consulting engineering industry in our country remain solid and that the outlook is positive in our market segments" said Pierre Shoiry, President and CEO of the Fund. "With the addition of Terrain Group Inc., we are now established in Atlantic Canada and in a position to serve our clients from coast to coast", he added. "First semester results for fiscal 2010 are robust which bode well for the full year", concluded Shoiry.
Conference call
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A conference call will be held on August 10, 2010 at 4:00 p.m. (Eastern Time) to discuss these results.
To participate in the conference call:
- Montreal region, dial 514-861-2909
- Canada and United States, dial 1-888-789-9572
Enter access code 7287206
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, 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
----------------------------------------------------
Second quarter Year to date
----------------------------------------------------
2010 2009 2010 2009
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IN THOUSANDS OF FOR THE FOR THE FOR THE FOR THE
DOLLARS EXCEPT PERIOD FROM PERIOD FROM PERIOD FROM PERIOD FROM
THE NUMBER OF APRIL 4 MARCH 29 JANUARY 1 JANUARY 1
UNITS AND PER TO JULY 3 TO JUNE 27 TO JULY 3 TO JUNE 27
UNIT DATA (UNAUDITED) (UNAUDITED) (UNAUDITED) (UNAUDITED)
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Revenues $ 144,109 $ 120,045 $ 270,070 $ 217,476
Less: Subconsultants
and other direct
expenses $ 25,295 $ 19,411 $ 43,444 $ 32,038
Net revenues $ 118,814 $ 100,634 $ 226,626 $ 185,438
Direct project costs $ 60,228 $ 50,212 $ 115,758 $ 92,606
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Gross margin $ 58,586 $ 50,422 $ 110,868 $ 92,832
Marketing, general,
and administrative
expenses and others $ 36,177 $ 30,915 $ 69,931 $ 56,600
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EBITDA $ 22,409 $ 19,507 $ 40,937 $ 36,232
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Interest $ 201 $ 567 $ 462 $ 886
Depreciation of
property, plant
and equipment $ 1,695 $ 1,571 $ 3,205 $ 2,969
Amortization of
intangible assets $ 4,951 $ 3,961 $ 9,683 $ 8,104
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Earnings before
income taxes and
non-controlling
interest $ 15,562 $ 13,408 $ 27,587 $ 24,273
Income taxes $ 548 $ 799 $ 1,547 $ 1,246
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Earnings before
non-controlling
interest $ 15,014 $ 12,609 $ 26,040 $ 23,027
Non-controlling
interest $ 5,557 $ 4,935 $ 9,234 $ 8,949
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Net earnings $ 9,457 $ 7,674 $ 16,806 $ 14,078
Basic net earnings
per unit $ 0.52 $ 0.54 $ 0.93 $ 0.99
Weighted average
number of units 18,103,589 14,276,730 18,103,589 14,276,900
Diluted net earnings
per unit $ 0.52 $ 0.54 $ 0.93 $ 0.99
Diluted weighted
average number
of units 23,480,082 23,348,960 25,342,050 23,348,944
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DISTRIBUTABLE CASH
----------------------------------------------------
Second 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 APRIL 4 MARCH 29 JANUARY 1 JANUARY 1
DOLLARS EXCEPT TO JULY 3 TO JUNE 27 TO JULY 3 TO JUNE 27
PER UNIT DATA (UNAUDITED) (UNAUDITED) (UNAUDITED) (UNAUDITED)
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Cash flows from
operating activities $ 9,481 $ 991 $ 25,681 $ 14,041
Capital expenditures
paid ($ 2,864) ($ 3,475) ($ 7,314) ($ 7,021)
Standardized
distributable cash $ 6,617 ($ 2,484) $ 18,367 $ 7,020
Change in non-cash
working capital
items(1) $ 12,396 $ 16,996 $ 13,598 $ 19,617
Capital expenditures
paid for UNISON
project(2) $ 545 - $ 1,617 -
Adjusted
distributable cash $ 19,558 $ 14,512 $ 33,582 $ 26,637
Adjusted
distributable cash,
per unit(3) $ 0.72 $ 0.62 $ 1.24 $ 1.14
Payout ratio
Standardized 154.0% (352.6%) 110.9% 249.5%
Adjusted 52.1% 60.4% 60.7% 65.8%
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Distributions
Fund's units
distributions declared $ 6,789 $ 5,360 $ 13,578 $ 10,720
Class B Exchangeable
LP Unit distributions
declared $ 1,623 $ 1,623 $ 3,246 $ 3,246
Class C Exchangeable
LP Unit distributions
declared $ 1,775 $ 1,775 $ 3,549 $ 3,550
Distributions declared,
all units $ 10,187 $ 8,758 $ 20,373 $ 17,516
Distributions declared,
all units, per unit(4) $ 0.38 $ 0.38 $ 0.75 $ 0.75
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(1) 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.
(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 weighted
average 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 second 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 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.
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; Marlene Casciaro, Director of Communications, GENIVAR Income Fund, Tel.: 514-340-0046, ext. 5184
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