Third quarter yields strong results for GENIVAR Income Fund
Highlights
- For the third quarter of 2009, revenues rose to $125.4 million, up from
$104.7 million, representing an increase of 19.9%. Net revenues were
$101.2 million, compared to $85.8 million, an increase of 17.9% from
2008 to 2009. Organic growth accounted for 6.2% of this increase in
net revenues, the remaining 11.7% resulting from acquisitions.
- Net earnings were $8.8 million in the third quarter, up from the
$8.3 million achieved for the same period in 2008, representing an
increase of 6.0%.
- Earnings before non-controlling interest were $14.4 million, or
$0.62 per unit on a diluted basis for the third quarter, up from
$13.7 million or $0.65 per unit on a diluted basis generated in the
same quarter of 2008. EBITDA increased from $19.7 million in the third
quarter of 2008 to $21.4 million for the same period in 2009. The
results of the third quarter were negatively impacted by an exchange
loss of $1.0 million as a result of the stronger Canadian dollar.
- For the third quarter of 2009, adjusted distributable cash totalled
$18.2 million, of which $8.8 million were distributed to unitholders,
representing an adjusted payout ratio of 48.2%. For the 2009 nine-month
period, adjusted distributable cash totalled $44.8 million, of which
$26.3 million were distributed to unitholders, representing an adjusted
payout ratio of 58.6%.
- During the third quarter, the Fund completed the acquisitions of
WM.R. Walker Engineering, an Ontario-based multidisciplinary
engineering firm in Sault Ste. Marie; Magnate Engineering & Associates
and Magnate Communication Corp., an Ontario and a British Columbia
telecommunications firms, and Progemes, a Montreal-based mechanical and
electrical consulting firm.
- Backlog increased to $334.2 million, up $12.9 million from
$321.3 million as at the previous quarter, ended June 27, 2009.
- Subsequent to the quarter-end, on October 16, 2009, the Fund completed
an equity financing of $100.0 million through a public offering of
3,809,500 units at a price of $26.25.
- Subsequent to the quarter-end, two small firms joined GENIVAR and added
15 employees: Harp Engineering & Design, a St. Catharines-based
mechanical and electrical consulting firm, and Gilles Taché & Associés,
a municipal infrastructure group based in Sainte-Agathe, in the
province of Quebec.
"We are pleased with these excellent quarterly results, achieved through the commitment, passion and dedication of all of our employees," said Pierre Shoiry, President and CEO of the Fund. "As the result of our recent equity financing, our healthy balance sheet combined with our unused credit facilities will enable us to focus on continuing to develop and grow our firm."
Conference call
A conference call will be held on
To participate in the conference call:
- Montreal region, dial 514-861-2909
- Canada and United States, dial 1-877-695-6175
Enter access code 8744835.
A presentation of the 2009 third quarter highlights and results is available at www.genivar.com in the Investor Relations section, under Presentations and events.
A replay of the conference call will also be available in the Investor Relations section of the Company's web site in the following days at www.genivar.com.
About GENIVAR
GENIVAR is a leading Canadian engineering services firm providing private and public 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, which are of varying sizes, fall into various market segments such as building, industrial and power, municipal infrastructure, transportation and environment. GENIVAR is one of the largest engineering services firm in
RESULTS OF OPERATIONS
-------------------------------------------------------
3 months 9 months
-------------------------------------------------------
2009 2008 2009 2008
-------------------------------------------------------
FOR THE FOR THE FOR THE FOR THE
PERIOD FROM PERIOD FROM PERIOD FROM PERIOD FROM
IN THOUSANDS OF JUNE 28 TO JUNE 29 TO JANUARY 1 TO JANUARY 1 TO
DOLLARS EXCEPT SEPTEMBER 26 SEPTEMBER 27 SEPTEMBER 26 SEPTEMBER 27
PER UNIT DATA (UNAUDITED) (UNAUDITED) (UNAUDITED) (UNAUDITED)
-------------------------------------------------------------------------
Revenues $ 125,426 $ 104,650 $ 342,902 $ 272,085
Deduct:
Subconsultants
and other
direct expenses $ 24,245 $ 18,836 $ 56,283 $ 45,254
Net revenues $ 101,181 $ 85,814 $ 286,619 $ 226,831
Direct project
costs $ 49,127 $ 42,022 $ 141,733 $ 112,633
-------------------------------------------------------------------------
Gross margin $ 52,054 $ 43,792 $ 144,866 $ 114,198
Marketing,
general, and
administrative
expenses and
others $ 30,669 $ 24,122 $ 87,269 $ 65,187
-------------------------------------------------------------------------
EBITDA $ 21,385 $ 19,670 $ 57,617 $ 49,011
-------------------------------------------------------------------------
Interest $ 626 $ 778 $ 1,512 $ 1,491
Depreciation of
property, plant
and equipment $ 1,642 $ 1,171 $ 4,611 $ 3,058
Amortization of
intangible
assets $ 4,213 $ 3,818 $ 12,317 $ 11,041
-------------------------------------------------------------------------
Earnings before
income taxes
and
non-controlling
interest $ 14,904 $ 13,903 $ 39,177 $ 33,421
Income taxes $ 479 $ 205 $ 1,725 $ 1,084
-------------------------------------------------------------------------
Earnings before
non-controlling
interest $ 14,425 $ 13,698 $ 37,452 $ 32,337
Non-controlling
interest $ 5,601 $ 5,373 $ 14,550 $ 12,748
-------------------------------------------------------------------------
Net earnings $ 8,824 $ 8,325 $ 22,902 $ 19,589
Basic net
earnings per
unit $ 0.62 $ 0.65 $ 1.60 $ 1.52
Weighted average
number of units 14,276,466 12,870,030 14,276,753 12,870,350
Diluted net
earnings per
unit $ 0.62 $ 0.64 $ 1.60 $ 1.51
Diluted weighted
average number
of units 23,351,903 21,352,768 23,352,088 21,353,568
-------------------------------------------------------------------------
DISTRIBUTABLE CASH
-------------------------------------------------------
3 months 9 months
-------------------------------------------------------
2009 2008 2009 2008
-------------------------------------------------------
FOR THE FOR THE FOR THE FOR THE
PERIOD FROM PERIOD FROM PERIOD FROM PERIOD FROM
IN THOUSANDS OF JUNE 28 TO JUNE 29 TO JANUARY 1 TO JANUARY 1 TO
DOLLARS EXCEPT SEPTEMBER 26 SEPTEMBER 27 SEPTEMBER 26 SEPTEMBER 27
PER UNIT DATA (UNAUDITED) (UNAUDITED) (UNAUDITED) (UNAUDITED)
-------------------------------------------------------------------------
Cash flows from
operating
activities $ 2,837 $ 8,908 $ 16,878 $ 24,253
Capital
expenditures
paid $ (1,898) $ (2,084) $ (8,919) $ (6,690)
Standardized
distributable
cash $ 939 $ 6,824 $ 7,959 $ 17,563
Change in
non-cash
working capital
items (1) $ 17,235 $ 9,254 $ 36,852 $ 21,555
Adjusted
distributable
cash $ 18,174 $ 16,078 $ 44,811 $ 39,118
Adjusted
distributable
cash, per
unit (2) $ 0.78 $ 0.75 $ 1.92 $ 1.83
Payout ratio
Standardized 932.7% 117.4% 330.1% 106.4%
Adjusted 48.2% 49.8% 58.6% 47.8%
-------------------------------------------------------------------------
Distributions
Fund's units
distributions $ 5,361 $ 4,839 $ 16,081 $ 11,287
Class B
Exchangeable
LP Unit
distributions $ 1,624 $ 1,397 $ 4,870 $ 3,265
Class C
Exchangeable
LP Unit
distributions $ 1,773 $ 1,775 $ 5,323 $ 4,139
Aggregate
distributions,
all units $ 8,758 $ 8,011 $ 26,274 $ 18,691
Aggregate
distributions,
all units,
per unit (2) $ 0.38 $ 0.37 $ 1.13 $ 0.87
-------------------------------------------------------------------------
(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) Distributable cash per unit and distributions declared per unit
amounts are calculated using the diluted weighted average number of
units.
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.
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 year (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.
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: Pierre Shoiry, President and CEO, GENIVAR Income Fund, (514) 340-0046, ext. 5104; Marlene Casciaro, Director of Communications, GENIVAR Income Fund, (514) 340-0046, ext. 5184
Share this article