WSP Global Inc.

WSP Global Inc.

May 07, 2010 03:00 ET

GENIVAR Income Fund Announces Growth in Revenues and Net Earnings for the First Quarter of 2010

MONTREAL, May 7 - The GENIVAR Income Fund (the "Fund") announced today its financial and operating results (unaudited) for the first quarter of 2010. These results cover the period from January 1, 2010, to April 3, 2010.

Highlights
    ----------

    - For the first quarter of 2010, revenues grew to $126.0 million from
      $97.4 million in 2009, representing a 29.3% increase compared to the
      first quarter of 2009. Net revenues were $107.8 million, up 27.1% from
      $84.8 million in the first quarter of 2009. Of the total 27.1% increase
      in net revenues, 12.2% came from the acquisitions completed since the
      first quarter of 2009 and two acquisitions completed in this reporting
      period; the remaining 14.9% being achieved through organic growth, of
      which 7.8% was a result of four extra working days in the first quarter
      of 2010 as compared to the same period in 2009.

    - EBITDA increased to $18.5 million in the first quarter of 2010 from
      $16.7 million for the same period in 2009. These first quarter results
      were negatively impacted by an exchange loss of $1.3 million as a
      result of the continued strength of the Canadian dollar. Without this
      negative impact, EBITDA would have increased by 18.4% to $19.8 million
      between the first quarter of 2009 and 2010.

    - Earnings before non-controlling interest were $11.0 million, or $0.41
      per unit on a diluted basis as compared to $10.4 million or $0.45 per
      unit on a diluted basis for the first quarter of 2009.

    - In the first quarter of 2010, the Fund generated adjustable
      distributable cash of $14.0 million or $0.52 per unit, of which
      $10.2 million was distributed to unitholders, representing an adjusted
      payout ratio of 72.6%.

    - As at April 3, 2010, the total workforce of the Fund was more than
      4,200, following the addition of approximately 210 employees during the
      quarter through the acquisitions of V.B. Cook Engineering and the
      Thompson Rosemount Group and the remaining 90 employees through organic
      growth.

    - Subsequent to the quarter-end, the Fund announced its intention to
      convert to a dividend-paying corporation as of January 1, 2011 and
      proceeded with the acquisition of two Alberta based building firms,
      Beaubien Glover Maskell Engineering North Inc. and Bearden Engineering
      Consultants Ltd., who together add approximately 50 employees to the
      Fund.

    - As at April 3, 2010, backlog increased at $377.2 million, representing
      8.3 months of work.

"We are pleased with these first quarter results that bode well for the rest of 2010," said Pierre Shoiry, President and CEO of the GENIVAR Income Fund. "This was an active quarter for the Fund as we completed the agreements for the conversion of the Fund into a corporate structure for 2011 and maintained our growth objectives by adding approximately 300 people to our team," he added.

Annual Meeting
    --------------

The Fund will hold its annual and special meeting of unitholders on May 27, 2010, at 10:00 a.m. (Eastern time) at the McCord Museum (J. Armand Bombardier Hall), at 690 Sherbrooke Street West, Montreal, Quebec.

Conference call
    ---------------

The Fund will hold a conference call at 11:00 a.m. (Eastern time) on May 7, 2010, to discuss these results.

To participate in the conference call:
    Canada and United States, please dial 1-888-231-8191.
    International, please dial 514-807-9895.
    Conference number: 72464803

A presentation of the 2010 first quarter highlights and results will be available early in the morning the same day at: www.genivar.com in the Investor Relations section, under Presentations and events.

The replay of the conference call will also be available in the Investor Relations section of the Company's web site in the days following the event.

About GENIVAR
    -------------

GENIVAR is a leading Canadian consulting engineering firm providing private and public-sector clients with a comprehensive range of professional services covering all project phases, including planning, design, construction and maintenance. GENIVAR's clients range in size and scope and primarily operate in the building, industrial, power, municipal infrastructure, transportation and environmental sectors. GENIVAR is one of Canada's largest consulting engineering firms in terms of number of employees, with over 4,200 managers, professionals, technicians, technologists and support staff in more than 80 locations in Canada and abroad. www.genivar.com

RESULTS OF OPERATIONS

                                                 ----------------------------
                                                         First quarter
                                                 ----------------------------
                                                          2010         2009
                                                 ----------------------------
                                                       FOR THE      FOR THE
                                                   PERIOD FROM  PERIOD FROM
                                                     JANUARY 1    JANUARY 1
    IN THOUSANDS OF DOLLARS EXCEPT THE NUMBER       TO APRIL 3  TO MARCH 28
     OF UNITS AND PER UNIT DATA                     (UNAUDITED)  (UNAUDITED)
    -------------------------------------------------------------------------
    Revenues                                         $ 125,961     $ 97,431

    Less: Subconsultants and other direct expenses    $ 18,149     $ 12,627

    Net revenues                                     $ 107,812     $ 84,804

    Direct project costs                              $ 55,530     $ 42,394
    -------------------------------------------------------------------------
    Gross margin                                      $ 52,282     $ 42,410

    Marketing, general, and administrative
     expenses and others                              $ 33,754     $ 25,685
    -------------------------------------------------------------------------
    EBITDA                                            $ 18,528     $ 16,725
    -------------------------------------------------------------------------
    Interest                                             $ 261        $ 319

    Depreciation of property, plant and equipment      $ 1,510      $ 1,398

    Amortization of intangible assets                  $ 4,732      $ 4,143
    -------------------------------------------------------------------------
    Earnings before income taxes  and
     non-controlling interest                         $ 12,025     $ 10,865

    Income taxes                                         $ 999        $ 447
    -------------------------------------------------------------------------
    Earnings before non-controlling interest          $ 11,026     $ 10,418

    Non-controlling interest                           $ 3,677      $ 4,014
    -------------------------------------------------------------------------
    Net earnings                                       $ 7,349      $ 6,404

    Basic net earnings per unit                         $ 0.41       $ 0.45

    Weighted average number of units                18,103,589   14,277,078

    Diluted net earnings per unit                       $ 0.41       $ 0.45

    Diluted weighted average number of units        27,163,976   23,345,696
    -------------------------------------------------------------------------



    DISTRIBUTABLE CASH

                                                 ----------------------------
                                                         First quarter
                                                 ----------------------------
                                                          2010         2009
                                                 ----------------------------
                                                       FOR THE      FOR THE
                                                   PERIOD FROM  PERIOD FROM
                                                     JANUARY 1    JANUARY 1
                                                    TO APRIL 3  TO MARCH 28
    IN THOUSANDS OF DOLLARS EXCEPT PER UNIT DATA    (UNAUDITED)  (UNAUDITED)
    -------------------------------------------------------------------------
    Cash flows from operating activities              $ 16,200     $ 13,050

    Capital expenditures paid                         ($ 4,450)    ($ 3,546)

    Standardized distributable cash                   $ 11,750      $ 9,504

    Change in non-cash working capital items(1)        $ 1,202      $ 2,621

    Capital expenditures paid for UNISON project(2)    $ 1,072            -

    Adjusted distributable cash                       $ 14,024     $ 12,125

    Adjusted distributable cash, per unit(3)            $ 0.52       $ 0.52

    Payout ratio

      Standardized                                        86.7%        92.2%
      Adjusted                                            72.6%        72.2%
    -------------------------------------------------------------------------
    Distributions

    Fund's units distributions declared                $ 6,789      $ 5,360

    Class B Exchangeable LP Unit distributions
     declared                                          $ 1,623      $ 1,623

    Class C Exchangeable LP Unit distributions
     declared                                          $ 1,774      $ 1,775

    Distributions declared, all units                 $ 10,186      $ 8,758

    Distributions declared, all units, per unit(4)      $ 0.38       $ 0.38
    -------------------------------------------------------------------------
    (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) Distributable cash per unit is calculated using the diluted weighted
        average number of units.

    (4) Distributions declared per unit represent the monthly distributions
        declared. Distributions declared per unit, calculated using the
        diluted weighted average number of units, were $0.38 per unit for the
        period.

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, 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.

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.

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