August 5, 2008
Montreal, August 5, 2008 – GENIVAR Income Fund (the “Fund”) announced today its financial and operating results (unaudited) for the second quarter of 2008. These results cover the period from March 30, 2008 to June 28, 2008.
Highlights
• For the second quarter of 2008, revenues were $97.3 million, up from $63.8 million for the same period in 2007, representing an increase of 52.6%. Net revenues were $80.9 million, compared to $50.9 million, an increase of 59.0% from 2007 to 2008. Strong organic growth accounted for half of this increase.
• Net earnings were $6.7 million for the second quarter, a 156.1% increase from the amount of $2.6 million achieved for the same period in 2007.
• Earnings before non-controlling interest were $11.0 million or $0.52 per unit on a diluted basis for the second quarter, more than double the amount of $0.24 per unit on a diluted basis generated in the same quarter of 2007. EBITDA increased 82.0% from $9.6 million in the second quarter of 2007 to $17.5 million for the same period in 2008.
• Cash flows from operating activities generated $8.0 million of cash. Adjusted distributable cash totalled $13.2 million, of which $5.3 million were distributed to unitholders, representing an adjusted payout ratio of 40.3%.
• The Fund announced an increase of its annual distributions from $1.00 per unit to $1.50 per unit, or from $0.0833 to $0.125 per unit per month. This increase will be effective for the Fund's July distribution to be paid on August 15, 2008.
• During the quarter, the Fund amended its credit facilities, increasing its operating line from $40.0 million to $80.0 million.
• The Fund completed two acquisitions during the second quarter of 2008, adding approximately 70 employees in British Columbia and Quebec. The total workforce of the Fund, as at June 28, 2008, was more than 3,100 employees.
• Subsequent to the end of the quarter, the Fund completed the acquisitions of Peterson Galloway, a British Columbia building firm, ZENIX Engineering, an Ontario building firm, and Solmers, a Quebec environmental engineering firm.
• As of June 28, 2008, backlog increased slightly to $300.4 million up from $294.1 million as of March 29, 2008.
“The Fund continued delivering on its business plan fuelled by a strong demand for our services in all our operating regions,” said Pierre Shoiry, President and CEO of the Fund. “These excellent results are achieved through the commitment, passion and dedication of all of our employees,” he added. “We believe that the fundamentals of the consulting engineering industry in Canada are solid and that the outlook is positive in the market segments in which we operate,” concluded Pierre Shoiry.
For the six months ended June 28, 2008, total revenues were $167.4 million, up 41.7% for the same period one year ago. Net revenues rose from $95.0 million to $141.0 million, a 48.4% increase, during the same period. Earnings before non-controlling interest totalled $18.7 million or $0.88 cents per unit compared to $9.1 million or $0.48 cents per unit for the same period in 2007, an increase of 105.5%. EBITDA was $29.3 million for the period from January 1, 2008, to June 28, 2008, an increase of 65.9% over the same period of last year.
About GENIVAR
GENIVAR is a leading Canadian engineering services firm, providing public and private 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 are of varying sizes and fall into diverse market segments, including building, industrial and power, urban infrastructure, transportation, and environment. GENIVAR is one of the largest engineering services firms in Canada, in terms of number of employees, employing over 3,100 managers, professionals, technicians, technologists, and support staff, in over 75 offices in Canada and abroad. www.genivar.com
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. These measures are defined below.
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 our 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. Therefore, EBITDA may not be comparable to similar measures presented by other issuers.
Distributable cash
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.
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For further information, contact:
Pierre Shoiry, President and CEO
GENIVAR Income Fund
Tel.: (514) 340-0046, ext. 5104
Marlène Casciaro, Director of Communications
GENIVAR Income Fund
Tel.: (514) 340-0046, ext. 5104
