WSP Global Inc.

WSP Global Inc.

May 13, 2008 08:40 ET

First Quarter Yields Strong Results for GENIVAR Income Fund

    MONTREAL, May 13  - GENIVAR Income Fund (The Fund) announced,
today, its financial and operating results (unaudited) for the first quarter
of 2008. These results cover the period from January 1, 2008 to March 29,
2008.Highlights

    - Revenues for the first quarter of 2008 were $70.1 million, up from
      $54.3 million for the same period in 2007, representing an increase of
      29.0%. Net revenues were $60.1 million, representing an increase of
      $15.9 million (36.2%).

    - Earnings before non-controlling interest were $7.6 million or
      $0.36 cents per unit for the first quarter. EBITDA increased 46.8% from
      $8.1 million in the first quarter of 2007 to $11.9 million for the same
      period in 2008.

    - Cash flows from operating activities generated $7.4 million of cash.
      Adjusted distributable cash totalled $9.8 million of which $5.3 million
      was distributed to unitholders, representing an adjusted payout ratio
      of 54.5%.

    - The Fund completed four acquisitions during the first three months of
      2008, adding approximately 365 employees in Ontario, Alberta and
      British Columbia.

    - Backlog stands at $294.1 million as at March 29, 2008 up from
      $207.5 million on December 31, 2007.

    "We are very pleased with these first quarter results that bode well for
the rest of 2008" said Pierre Shoiry, President and CEO of the GENIVAR Income
Fund. "With the recent acquisition of Doucet & Associates, five quality firms
have now joined the Fund so far this year and we are especially pleased to now
have an established presence in Alberta," he added. "We secured several
significant contracts during this period in all of our operating regions,"
concluded Mr. Shoiry.

    Recent awards include:

    - Project and construction management services in environment for the
      Gaspe Reclamation Project in Murdochville for Xstrata Copper.

    - Electrical and mechanical engineering, instrumentation and piping, as
      well as civil technical support for the Twin Rivers canola seed and
      soybean crushing plant in the Mauricie Region, in Quebec.

    - A multidisciplinary mandate in building engineering for two new office
      towers, 21 and 25 storeys respectively, in Quebec City for Cominar.

    - Structural, mechanical and civil engineering and supervision work, as
      well as environmental studies for the new Calypso Park, the future
      largest water park in Canada which will be located in Ottawa, Ontario.

    - In transportation, GENIVAR has been selected by the Quebec Ministry of
      Transportation to provide engineering services, in consortium, for the
      refurbishment of the Dorval Interchange near Montreal's Trudeau
      International Airport in Montreal.

    - International activities were also buoyant as we successfully completed
      the engineering and commissioning of the Mana Mining project in Burkina
      Faso for SEMAFO, a fast-track project, with the first gold output being
      produced in March 2008.

    - GENIVAR was also awarded an important fast-track project management
      assignment for a new Convention Centre, in Oran, Algeria, including a
      multi-purpose conference and convention facility, a five-star 300-room
      hotel, and a hotel-apartment.

    - GENIVAR has been awarded a major project for Trinidad and Tobago's
      Ministry of National Security aimed at redeveloping its security
      facilities including: police stations, fire halls and detention centres
      among others. The scope of the mandate covers the calls for proposals
      and tender documents, in addition to managing the project and
      monitoring the work.

    The Fund will hold its annual meeting on May 22, 2008 at 10:00 a.m., at
the Montreal Convention Centre, Room 520AD.

    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 2,800 managers, professionals, technicians, technologists, and
support staff, in over 60 offices in Canada and abroad.


    RESULTS OF OPERATIONS
    ---------------------
                                         ------------------------------------
                                                            3 months
                                         ------------------------------------
                                                     2008               2007
                                         ------------------------------------
                                           FOR THE PERIOD     FOR THE PERIOD
                                           FROM JANUARY 1     FROM JANUARY 1
    IN THOUSANDS OF DOLLARS EXCEPT            TO MARCH 29        TO MARCH 31
     PER UNIT DATA                             (UNAUDITED)        (UNAUDITED)
    -------------------------------------------------------------------------
    Revenues                                     $ 70,087           $ 54,343
    Deduct: Subconsultants and other
     direct expenses                              $ 9,939           $ 10,175
    Net revenues                                 $ 60,148           $ 44,168
    Direct project costs                         $ 30,182           $ 23,092
    -------------------------------------------------------------------------
    Gross margin                                 $ 29,966           $ 21,076
    Marketing, general, and
     administrative expenses and others          $ 18,088           $ 12,986
    -------------------------------------------------------------------------
    EBITDA                                       $ 11,878            $ 8,090
    -------------------------------------------------------------------------
    Interest                                        $ 121              $ 295
    Depreciation of property, plant,
     and equipment                                  $ 854              $ 599
    Amortization of intangible assets             $ 3,440            $ 2,458
    -------------------------------------------------------------------------
    Earnings before income taxes and
     non-controlling interest                     $ 7,463            $ 4,738
    Income tax expense (recovery)(1)               ($ 152)             $ 141
    -------------------------------------------------------------------------
    Earnings before non-controlling interest      $ 7,615            $ 4,597
    Non-controlling interest(2)                   $ 3,017            $ 1,925
    -------------------------------------------------------------------------
    Net earnings                                  $ 4,598            $ 2,672
    Basic net earnings per unit                    $ 0.36             $ 0.24
    Weighted average number of units(2)        12,870,664         11,000,000
    Diluted net earnings per unit                  $ 0.36             $ 0.24
    Diluted weighted average number of
     units(2)                                  21,347,826         18,927,381
    -------------------------------------------------------------------------

    (1) See section "Results of operations - Income tax expense."
    (2) As at May 13, 2008, the number of units is identical to what it was
        as at March 29, 2008.


    DISTRIBUTABLE CASH
    ------------------
                                         ------------------------------------
                                                            3 months
                                         ------------------------------------
                                                     2008               2007
                                         ------------------------------------
                                           FOR THE PERIOD     FOR THE PERIOD
                                           FROM JANUARY 1     FROM JANUARY 1
    IN THOUSANDS OF DOLLARS EXCEPT            TO MARCH 29        TO MARCH 31
     PER UNIT DATA                             (UNAUDITED)        (UNAUDITED)
    -------------------------------------------------------------------------
    Cash flows from operating activities          $ 7,391            $ 1,654
    Capital expenditures paid                    ($ 1,930)          ($ 2,605)
    Standardized distributable cash               $ 5,461             ($ 951)
    Change in non-cash working capital
     items(1)                                     $ 4,337            $ 6,135
    Capital expenditures paid for
     non-recurring items(2)                             -            $ 1,257

    Adjusted distributable cash(3)                $ 9,798            $ 6,441
    Adjusted distributable cash, per unit(3)       $ 0.46             $ 0.34
    Payout ratio
      Standardized                                   97.8%             497.4%
      Adjusted                                       54.5%              73.4%
    -------------------------------------------------------------------------
    Distributions

    Fund's units distributions                    $ 3,224            $ 2,749
    Class B Non-subordinated Exchangeable LP
     unit distributions                             $ 934              $ 799
    Class C Subordinated Exchangeable LP
     unit distributions                           $ 1,182            $ 1,182
    Aggregate distributions, all units(3)         $ 5,340            $ 4,730
    Aggregate distributions, all units,
     per unit(3)                                   $ 0.25             $ 0.25
    -------------------------------------------------------------------------

    (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) Non-recurring capital expenditures pertain to a construction project
        which had for objective to expand square footage of the main office
        in Quebec City.
    (3) Distributable cash and distributable cash per unit amounts are
        calculated for the combined interest of the Fund's units and Non-
        subordinated Exchangeable LP units and Subordinated Exchangeable LP
        units, which total 21,366,405 as at March 29, 2008 (18,927,381 at the
        same date in 2007). Number of units has not been adjusted to reflect
        units purchased in the market in connection with the long-term
        incentive plan since the distributions on these units continue to be
        declared and paid.

    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 sub-consultants 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

    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.

Contact 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