WSP Global Inc.

WSP Global Inc.

November 10, 2009 02:30 ET

Third quarter yields strong results for GENIVAR Income Fund

MONTREAL, Nov. 10 - GENIVAR Income Fund (the "Fund") announced today its financial and operating results (unaudited) for the third quarter of 2009. These results cover the period from June 28, 2009, to September 26, 2009.

Highlights

    - For the third quarter of 2009, revenues rose to $125.4 million, up from
      $104.7 million, representing an increase of 19.9%. Net revenues were
      $101.2 million, compared to $85.8 million, an increase of 17.9% from
      2008 to 2009. Organic growth accounted for 6.2% of this increase in
      net revenues, the remaining 11.7% resulting from acquisitions.

    - Net earnings were $8.8 million in the third quarter, up from the
      $8.3 million achieved for the same period in 2008, representing an
      increase of 6.0%.

    - Earnings before non-controlling interest were $14.4 million, or
      $0.62 per unit on a diluted basis for the third quarter, up from
      $13.7 million or $0.65 per unit on a diluted basis generated in the
      same quarter of 2008. EBITDA increased from $19.7 million in the third
      quarter of 2008 to $21.4 million for the same period in 2009. The
      results of the third quarter were negatively impacted by an exchange
      loss of $1.0 million as a result of the stronger Canadian dollar.

    - For the third quarter of 2009, adjusted distributable cash totalled
      $18.2 million, of which $8.8 million were distributed to unitholders,
      representing an adjusted payout ratio of 48.2%. For the 2009 nine-month
      period, adjusted distributable cash totalled $44.8 million, of which
      $26.3 million were distributed to unitholders, representing an adjusted
      payout ratio of 58.6%.

    - During the third quarter, the Fund completed the acquisitions of
      WM.R. Walker Engineering, an Ontario-based multidisciplinary
      engineering firm in Sault Ste. Marie; Magnate Engineering & Associates
      and Magnate Communication Corp., an Ontario and a British Columbia
      telecommunications firms, and Progemes, a Montreal-based mechanical and
      electrical consulting firm.

    - Backlog increased to $334.2 million, up $12.9 million from
      $321.3 million as at the previous quarter, ended June 27, 2009.

    - Subsequent to the quarter-end, on October 16, 2009, the Fund completed
      an equity financing of $100.0 million through a public offering of
      3,809,500 units at a price of $26.25.

    - Subsequent to the quarter-end, two small firms joined GENIVAR and added
      15 employees: Harp Engineering & Design, a St. Catharines-based
      mechanical and electrical consulting firm, and Gilles Taché & Associés,
      a municipal infrastructure group based in Sainte-Agathe, in the
      province of Quebec.

"We are pleased with these excellent quarterly results, achieved through the commitment, passion and dedication of all of our employees," said Pierre Shoiry, President and CEO of the Fund. "As the result of our recent equity financing, our healthy balance sheet combined with our unused credit facilities will enable us to focus on continuing to develop and grow our firm."

Conference call

A conference call will be held on November 10, 2009, at 4 p.m. (Eastern Time) to discuss these results.

To participate in the conference call:
    - Montreal region, dial 514-861-2909
    - Canada and United States, dial 1-877-695-6175

    Enter access code 8744835.

A presentation of the 2009 third quarter highlights and results is available at www.genivar.com in the Investor Relations section, under Presentations and events.

A replay of the conference call will also be available in the Investor Relations section of the Company's web site in the following days at www.genivar.com.

About GENIVAR

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, which are of varying sizes, fall into various market segments such as building, industrial and power, municipal infrastructure, transportation and environment. GENIVAR is one of the largest engineering services firm in Canada in terms of number of employees with more than 3,800 managers, professionals, technicians and technologists and support staff in over 70 locations in Canada and abroad.

RESULTS OF OPERATIONS

                      -------------------------------------------------------
                                   3 months                    9 months
                      -------------------------------------------------------
                              2009          2008          2009          2008
                      -------------------------------------------------------
                           FOR THE       FOR THE       FOR THE       FOR THE
                       PERIOD FROM   PERIOD FROM   PERIOD FROM   PERIOD FROM
    IN THOUSANDS OF     JUNE 28 TO    JUNE 29 TO  JANUARY 1 TO  JANUARY 1 TO
     DOLLARS EXCEPT   SEPTEMBER 26  SEPTEMBER 27  SEPTEMBER 26  SEPTEMBER 27
     PER UNIT DATA      (UNAUDITED)   (UNAUDITED)   (UNAUDITED)   (UNAUDITED)
    -------------------------------------------------------------------------
    Revenues          $    125,426  $    104,650  $    342,902  $    272,085

    Deduct:
     Subconsultants
     and other
     direct expenses  $     24,245  $     18,836  $     56,283  $     45,254

    Net revenues      $    101,181  $     85,814  $    286,619  $    226,831

    Direct project
     costs            $     49,127  $     42,022  $    141,733  $    112,633
    -------------------------------------------------------------------------
    Gross margin      $     52,054  $     43,792  $    144,866  $    114,198

    Marketing,
     general, and
     administrative
     expenses and
     others           $     30,669  $     24,122  $     87,269  $     65,187
    -------------------------------------------------------------------------
    EBITDA            $     21,385  $     19,670  $     57,617  $     49,011
    -------------------------------------------------------------------------
    Interest          $        626  $        778  $      1,512  $      1,491

    Depreciation of
     property, plant
     and equipment    $      1,642  $      1,171  $      4,611  $      3,058

    Amortization of
     intangible
     assets           $      4,213  $      3,818  $     12,317  $     11,041
    -------------------------------------------------------------------------
    Earnings before
     income taxes
     and
     non-controlling
     interest         $     14,904  $     13,903  $     39,177  $     33,421

    Income taxes      $        479  $        205  $      1,725  $      1,084
    -------------------------------------------------------------------------
    Earnings before
     non-controlling
     interest         $     14,425  $     13,698  $     37,452  $     32,337

    Non-controlling
     interest         $      5,601  $      5,373  $     14,550  $     12,748
    -------------------------------------------------------------------------
    Net earnings      $      8,824  $      8,325  $     22,902  $     19,589

    Basic net
     earnings per
     unit             $       0.62  $       0.65  $       1.60  $       1.52

    Weighted average
     number of units    14,276,466    12,870,030    14,276,753    12,870,350

    Diluted net
     earnings per
     unit             $       0.62  $       0.64  $       1.60  $       1.51

    Diluted weighted
     average number
     of units           23,351,903    21,352,768    23,352,088    21,353,568
    -------------------------------------------------------------------------


    DISTRIBUTABLE CASH

                      -------------------------------------------------------
                                   3 months                    9 months
                      -------------------------------------------------------
                              2009          2008          2009          2008
                      -------------------------------------------------------
                           FOR THE       FOR THE       FOR THE       FOR THE
                       PERIOD FROM   PERIOD FROM   PERIOD FROM   PERIOD FROM
    IN THOUSANDS OF     JUNE 28 TO    JUNE 29 TO  JANUARY 1 TO  JANUARY 1 TO
     DOLLARS EXCEPT   SEPTEMBER 26  SEPTEMBER 27  SEPTEMBER 26  SEPTEMBER 27
     PER UNIT DATA      (UNAUDITED)   (UNAUDITED)   (UNAUDITED)   (UNAUDITED)
    -------------------------------------------------------------------------
    Cash flows from
     operating
     activities       $      2,837  $      8,908  $     16,878  $     24,253

    Capital
     expenditures
     paid             $     (1,898) $     (2,084) $     (8,919) $     (6,690)

    Standardized
     distributable
     cash             $        939  $      6,824  $      7,959  $     17,563

    Change in
     non-cash
     working capital
     items (1)        $     17,235  $      9,254  $     36,852  $     21,555

    Adjusted
     distributable
     cash             $     18,174  $     16,078  $     44,811  $     39,118

    Adjusted
     distributable
     cash, per
     unit (2)         $       0.78  $       0.75  $       1.92  $       1.83

    Payout ratio
      Standardized           932.7%        117.4%        330.1%        106.4%
      Adjusted                48.2%         49.8%         58.6%         47.8%

    -------------------------------------------------------------------------
    Distributions

    Fund's units
     distributions    $      5,361  $      4,839  $     16,081  $     11,287

    Class B
     Exchangeable
     LP Unit
     distributions    $      1,624  $      1,397  $      4,870  $      3,265

    Class C
     Exchangeable
     LP Unit
     distributions    $      1,773  $      1,775  $      5,323  $      4,139

    Aggregate
     distributions,
     all units        $      8,758  $      8,011  $     26,274  $     18,691

    Aggregate
     distributions,
     all units,
     per unit (2)     $       0.38  $       0.37  $       1.13  $       0.87

    -------------------------------------------------------------------------

    (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) Distributable cash per unit and distributions declared per unit
        amounts are calculated using the diluted weighted average number of
        units.

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.

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 year (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 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