GENIVAR Income Fund
TSX : GNV.UN

GENIVAR Income Fund

August 14, 2006 17:26 ET

GENIVAR Income Fund Announces Results for its First Reporting Period

MONTREAL, QUEBEC--(CCNMatthews - Aug. 14, 2006) - NOT FOR DISTRIBUTION TO U.S. NEWS WIRE SERVICES OR FOR DISSEMINATION IN THE U.S.

GENIVAR Income Fund (TSX:GNV.UN) (The Fund) announced today financial and operating results (unaudited) for the period from May 25 to July 1, 2006. This is the first 37-day reporting period of the Fund since it commenced business operations on May 25, 2006 and, consequently, no comparative information is provided in the Fund's interim consolidated financial statements. This 37-day period is not representative of a normal quarter of operations. However, in order to provide investors with a meaningful assessment of its performance, we have included selected financial information of the Fund and its predecessor company for the six months ended July 1, 2006 and compared them to the six months ended June 30, 2005 of the predecessor company.

Revenues for the period from May 25 to July 1, 2006 were $17.5 million. The net earnings before non-controlling interest were $2,4 million. EBITDA, for this 37-day period, was $3.4 million and the Fund generated distributable cash of $3.4 million or 17.81 cents per unit, higher than declared distributions of 10.22 cents.

"We are pleased with our successful initial public offering of $110 million and the strong support of our investors into our first months as a public entity. The Fund is off to a strong start and management is optimistic in implementing its plan to create a national platform through organic growth and strategic acquisitions", said Pierre Shoiry, President and CEO of the GENIVAR Income Fund.

Revenues for the six months ended July 1, 2006 were up 33% to $83.9 million, compared to $62.9 million for the six months ended June 30, 2005. Net revenues also increased by 33% from $43.2 million to $57.5 million for the same reporting period. EBITDA, for the same six months period, was $ 11.5 million compared to $ 6.5 million in 2005.

"During this first reporting period, all our market segments and our regions performed well and we are very pleased with the successful integration of MacViro within the GENIVAR family", said Shoiry "Our staff and our 153 active partners, who indirectly own a 41.88% retained ownership of the Fund, are motivated by our successful IPO and enthusiastic about the numerous opportunities provided by the strong business outlook of our Industry".

The Fund's interim consolidated financial statements, as well as management's discussion and analysis of this first reporting period can be obtained via the GENIVAR website at www.genivar.com or at www.sedar.com.

The GENIVAR Income Fund will hold a conference call on Tuesday, August 15, 2006 at 4:00 PM EDT to discuss these results. The conference call is open to all those wishing to attend with a Question and Answer period to follow the presentation. In order to participate in the live conference call, please call (416) 340-2216, if in the Toronto area, or 1 (866) 898-962 throughout the rest of Canada. A replay of the call will be available via the GENIVAR website at www.genivar.com.

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, who are of varying sizes, fall into various market segments such as, building, industrial and power, urban infrastructure, transportation and environment. GENIVAR is one of the largest engineering services firm in Canada, in terms of number of employees, with approximately 1,500 managers, professionals, technicians and technologists and support staff, in over 30 offices in Canada and abroad. The Fund's units trade on the Toronto Stock Exchange under the symbol GNV.UN



SELECTED CONSOLIDATED FINANCIAL INFORMATION

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2006 2005
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PRE-IPO POST-IPO FOR THE FOR THE
FOR THE FOR THE SIX MONTHS SIX MONTHS
IN THOUSANDS PERIOD FROM PERIOD FROM ENDED ENDED
EXCEPT FOR PER JANUARY 1 MAY 25 JULY 1 JUNE 30
UNIT AMOUNTS TO MAY 24 TO JULY 1
(UNAUDITED) (UNAUDITED) (UNAUDITED) (UNAUDITED)
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Revenues $66,332 $17,523 $83,855 (4) $62,929
Deduct:
Subconsultants and
other direct expenses 23,035 3,307 26,342 19,682
Net revenues (1) 43,297 14,216 57,513 43,247
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Expenses
Direct project costs $21,346 $7,040 $28,386 $22,983
Marketing, general and
administrative
13,778 3,822 17,600 13,744
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EBITDA (2) $8,173 $3,354 $11,527 $6,520
Interest 132 35 167 199
Depreciation of
property, plant and
equipment 622 199 821 637
Amortization of
intangible assets 1,661 956 2,617 723
Net earnings before
income taxes and non-
controlling interest 5,758 2,164 7,922 4,961
Income taxes
recovery (3) (250)
Net earnings before
non-controlling
interest 2,414
Non-controlling
interest (3) 1,011
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Net earnings (3) $ $1,403 $ $

Basic net earnings
per unit 0.13
Weighted average
number of units 11,000,000
Diluted net
earnings per unit 0.13
Diluted weighted
average number of
units 18,927,381
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(1) Net revenues are not a measure in accordance with GAAP and do not have a 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 year (as determined in accordance with GAAP) as an indicator of the Fund's performance.

(2) EBITDA is defined as earnings before interest expense, income taxes recovery, depreciation, amortization and non-controlling interest. 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.

(3) Income taxes non-controlling interest and net earnings have not been presented on a comparative basis due to the changes in the capital structure of the preceding entities and the Fund in connection with the IPO on May 25, 2006.

(4) Supplementary Non-GAAP Combined Information for the six-month period ended July 1, 2006 is the combination of financial results of GENIVAR Engineering Services Business PRE-IPO and financial results of the Fund POST-IPO. Such combination is for illustrative purpose only. As a result of this combined presentation, the results POST- IPO have been affected by the additional amortization and depreciation of intangible assets and property, plant and equipment assets considering that these assets are recorded at fair value at the acquisition date.



DISTRIBUTABLE CASH

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2006
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FOR THE PERIOD FROM
MAY 25 TO JULY 1
IN THOUSANDS EXCEPT FOR PER (UNAUDITED) PER UNIT
UNIT AMOUNTS
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EBITDA $3,354
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Capital expenditures (29)
Interest (35)
Income tax recovered 81
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Distributable cash (1) (2) $3,371 $0.1781
Actual payout ratio 57%
Aggregate distributions, all units (1) 1,934 0.1022
Fund's units 1,124 0.1022
Class B exchangeable unsubordinated units
of the LP 326 0.1022
Class C exchangeable subordinated units
of the LP 484 0.1022
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Cash flows $
Cash flows used by operating activities (1,821)
Change in non-cash working capital items
(see note 16a in interim financial statements) 5,119
Current income tax expense 21
Income taxes recovered 81
Capital expenditures paid (29)
Distributable cash (1) 3,371
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(1) 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 LP Units, which total 18,927,381.

(2) This apparent favourable difference can be explained by the fact that the 37-day period extending from May 25 to July 1, 2006 is shorter than the Fund's normal annual working capital cycle and may not be representative of the Fund's distributable cash over a normal annual cycle.

Contact Information

  • GENIVAR Income Fund
    Pierre Shoiry
    President and CEO
    (514) 340-0046, ext. 104
    or
    For media inquiries:
    Marlene Casciaro
    Director, Communications
    (514) 340-0046, ext. 184