WSP Global Inc.

WSP Global Inc.

May 09, 2007 06:50 ET

GENIVAR Income Fund Reports on First Quarter 2007 Results - A Strong Start for 2007

    MONTREAL, May 9  - GENIVAR Income Fund (the Fund) announced,
today, its financial and operating results (unaudited) for the period from
January 1 to March 31, 2007. This is the fourth 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. 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, GENIVAR Inc. (Engineering consulting
services company), for the three months ended March 31, 2006.Highlights

    - Net revenues, in the first quarter of 2007, were $44.2 million, up from
      $27.3 million for the same period, in 2006.
    - EBITDA stood at $8.1 million, a 38.9% increase from $5.8 million in the
      first quarter of 2006.
    - Distributable cash generated totalled $6.6 million before a
      non-recurring expenditure, of which $4.7 million was distributed to
      unitholders, representing a payout ratio of 71.8%.
    - Backlog increased to $156.4 million.
    - The Fund completed the integration of four recent acquisitions.

    Revenues for the period from January 1 to March 31, 2007 were
$54.3 million. The net earnings, before non-controlling interest, were
$4.6 million or 24 cents per unit.
    "The Fund is off to a strong start with these excellent results and we are
pleased with the contribution of our recent acquisitions," said Pierre Shoiry,
President and CEO of the GENIVAR Income Fund.
    The Fund continued revenue growth and profitability over its first three
complete quarters since its Initial Public Offering of May 25, 2006. Capital
expenditures during the first quarter were significant, totalling
$2.1 million. A non-recurring expenditure of $0.8 million, net of the sale of
a building, was incurred in connection with the expansion of our Quebec City
office, which is owned by the Fund. Construction will be completed by July
2007 and all the Quebec City personnel will thereafter be consolidated at that
location.
    Gross margins remained stable while management, general and administrative
expenses increased following the integration of our four recent acquisitions.
    "This has been a very active quarter for our team and, we have initiated
work on numerous challenging projects in all of our operating regions. Demand
for our services is high and the volume of new mandates is indicative of our
firm's capacity for service and, the confidence our clients place in our
team," concluded Shoiry.

    Recent awards include:

    - The development of a water and wastewater master plan of Trinidad and
      Tobago and the program management for the modernisation of these
      installations.
    - Project management services for the CHUM and Grey Bruce Hospital, in
      Ontario; the John Molson School of Business of Concordia University and
      the Savannah East Development Project for the National Insurance Bureau
      of Trinidad and Tobago.
    - A 45.5 MW renewable energy cogeneration plant for the Fort-Frances
      division of Abitibi-Consolidated, in Ontario.
    - The modernisation and subsequent reduction of greenhouse gases of the
      SFK Pulp Plant in St-Felicien.
    - The implementation of a water and sewer system for East Selkirk, in
      Manitoba.

    Subsequent to March 31, 2007, the Fund announced the closing of the
acquisition of Nove Environment, a 30-employee firm specialized in
environmental studies.
    The Fund will hold its first annual meeting on May 17, 2007, at
10:30 a.m., Montreal Convention Centre, 201 Viger St. West, Room 523,
Montreal, Quebec.

    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
more than 1,800 managers, professionals, technicians and technologists and
support staff, in over 40 offices in Canada and abroad.
    The Fund's financial statements, as well as management's discussion and
analysis of this reporting period can be obtained via the GENIVAR website, in
the Investor Relations section, at www.genivar.com or at www.sedar.com.


    RESULTS OF OPERATIONS
    ---------------------

                                            ---------------------------------
                                                   FOR THE FIRST QUARTER
                                            ---------------------------------
                                                        2007            2006
                                            ---------------------------------
                                              FOR THE PERIOD  FOR THE PERIOD
                                              FROM JANUARY 1  FROM JANUARY 1
                                                 TO MARCH 31     TO MARCH 31
                                                  (UNAUDITED)      (COMBINED-
    IN THOUSANDS OF DOLLARS EXCEPT PER                             UNAUDITED)
     UNIT DATA                                                            (1)
    -------------------------------------------------------------------------
    Revenues                                     $    54,343     $    36,307
    Deduct: Subconsultants and other direct
     expenses                                    $    10,175     $     8,971
    -------------------------------------------------------------------------
    Net revenues                                 $    44,168     $    27,336
    Direct project costs                         $    23,092     $    13,088
    -------------------------------------------------------------------------
    Gross margin                                 $    21,076     $    14,248
    Marketing, general and administrative
     expenses                                    $    12,986     $     8,424
    -------------------------------------------------------------------------
    EBITDA                                       $     8,090     $     5,824
    -------------------------------------------------------------------------
    Interest                                     $       295     $       117
    Depreciation of property, plant and
     equipment                                   $       599     $       381
    Amortization of intangible assets            $     2,458     $     1,241
    -------------------------------------------------------------------------
    Earnings before income tax expense and
     non-controlling interest                    $     4,738     $     4,085
    Income tax expense (2)                       $       141
    -------------------------------------------------------------------------
    Earnings before non-controlling interest     $     4,597
    Non-controlling interest (2)                 $     1,925
    -------------------------------------------------------------------------
    Net earnings (2)                             $     2,672

    Basic net earnings per Unit                  $      0.24
    Weighted average number of Units (3)          11,000,000
    Diluted net earnings per Unit                $      0.24
    Diluted weighted average number of Units (3)  18,927,381
    -------------------------------------------------------------------------

    (1) This combined financial information was carved out from GENIVAR
        Engineering Services Business regrouping all of the engineering
        activities of GENIVAR Inc., the Non-controlling Unitholder.
    (2) 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.
    (3) As at May 8, 2007, the number of Units is identical to what it was as
        at March 31, 2007.


    SUMMARY OF QUARTERLY RESULTS
    ----------------------------

                             ------------------------------------------------
                                   2007                     2006
                             ------------------------------------------------
                                     Q1          Q4           Q3          Q2
                             ------------------------------------------------
                                FOR THE     FOR THE      FOR THE     FOR THE
                                 PERIOD      PERIOD       PERIOD      PERIOD
                                   FROM        FROM         FROM        FROM
                              JANUARY 1   OCTOBER 1       JULY 2      MAY 25
                                     TO          TO           TO          TO
    IN THOUSANDS OF DOLLARS    MARCH 31 DECEMBER 31 SEPTEMBER 3O      JULY 1
     EXCEPT PER UNIT DATA    (UNAUDITED) (UNAUDITED)  (UNAUDITED) (UNAUDITED)
    -------------------------------------------------------------------------
    Revenues               $    54,343  $    49,703  $   42,555  $    17,523
    Net revenues (1)       $    44,168  $    36,733  $   33,732  $    14,216
    -------------------------------------------------------------------------
    Gross margin           $    21,076  $    17,533  $   16,196  $     7,176
    -------------------------------------------------------------------------
    EBITDA                 $     8,090  $     7,437  $    7,024  $     3,354
    -------------------------------------------------------------------------
    Net earnings           $     2,672  $     2,577  $    2,364  $     1,403
    -------------------------------------------------------------------------

    Basic net earnings
     per unit              $      0.24  $      0.23  $     0.21  $      0.13
    Weighted average
     number of units         11,000,000  11,000,000   11,000,000  11,000,000
    Diluted net earnings
     per unit              $      0.24  $      0.23  $     0.21  $      0.13
    Diluted weighted
     average number
     of units                18,927,381  18,927,381   18,927,381  18,927,381
    -------------------------------------------------------------------------

    (1) Net revenues are defined as revenues less subconsultants and other
        direct expenses.


    DISTRIBUTABLE CASH
    ------------------
                                            ---------------------------------
                                                             2007
                                            ---------------------------------
                                              FOR THE PERIOD
                                              FROM JANUARY 1
    IN THOUSANDS OF DOLLARS EXCEPT PER           TO MARCH 31        PER UNIT
     UNIT DATA                                    (UNAUDITED)     (UNAUDITED)
    -------------------------------------------------------------------------
    Cash flows
    Cash flows from operating activities         $     1,654
    Change in non-cash working capital items     $     6,135
    Current income tax expense                   $        75
    Income taxes paid                            $       (50)
    Capital expenditures paid                    $    (1,348)
    Capital expenditures paid for
     non-recurring items (2)                     $      (808)
    Interest unpaid                              $       120
    -------------------------------------------------------------------------
    Distributable cash (1)                       $     5,778     $    0.3053

    Actual payout ratio                                 81.9%
    Actual payout ratio adjusted for
     non-recurring items (2)                            71.8%
    -------------------------------------------------------------------------
    Fund's Units distributions                   $     2,749     $    0.2500
    Class B Non-subordinated Exchangeable LP     $       799     $    0.2500
     Units distributions
    Class C Subordinated Exchangeable LP Units
     distributions                               $     1,182     $    0.2500
    -------------------------------------------------------------------------
    Aggregate distributions, all Units (1)       $     4,730     $    0.2500
    -------------------------------------------------------------------------
    Distributable cash (1)                       $     5,778     $    0.3053
    Capital expenditures paid                    $    (1,348)
    Capital expenditures paid for non-recurring
     items (2)                                   $      (808)
    Long-term incentive plan unpaid              $        69
    Interest paid                                $      (175)
    Income taxes paid                            $       (50)
    -------------------------------------------------------------------------
    EBITDA                                       $     8,090
    -------------------------------------------------------------------------

    (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) Non-recurring capital expenditures pertain to a construction project
        which had for objective to expand square footage of the main office
        in Quebec City, net of the proceeds from disposal of a second
        building of $449.

Contact Information

  • Pierre Shoiry, President and CEO, GENIVAR,
    (514) 340-0046, ext. 5104; For media inquiries: Marlene Casciaro, Director of
    Communications, GENIVAR, (514) 340-0046, ext. 5184