GENIVAR reports fourth quarter and year 2011 results and declares a dividend of $0.375 per share
MONTREAL, March 26, 2012 /PRNewswire/ - GENIVAR Inc. (TSX: GNV) ("GENIVAR" or the "Company"), formerly GENIVAR Income Fund (the "Fund"), today announced its financial and operating results for the fourth quarter and year-end 2011, under the International Financial Reporting Standards ("IFRS"). The fourth quarter results cover the period from October 2, 2011, to December 31, 2011.
FOURTH QUARTER 2011 HIGHLIGHTS
- Total revenues were $172.0 million compared to $154.7 million in 2010, an increase of 11.2%. Net revenues, expressed as revenues less direct costs for subconsultants and other direct expenses that are recoverable directly from the clients, amounted to $132.7 million, representing an 11.9% increase as compared to 2010.
- EBITDA stood at $21.5 million, as compared to $19.3 million in 2010. As a percentage of net revenues, the EBITDA margin stood at 16.2% for 2011, compared to 16.3% for 2010.
- Net earnings amounted to $9.9 million or $0.37 per share.
- The backlog stood at $409.6 million compared to a backlog of $419.3 million at the end of the third quarter of 2011 and represented approximately 7.5 months of revenues.
- During the quarter, GENIVAR received support from Canada's two largest institutional investors, the Canada Pension Plan Investment Board ("CPPIB") and the Caisse de dépôt et placement du Québec (the "Caisse"), each of whom invested a gross amount of $79.9 million. This financing consisted in an equity private placement through the issuance of 6,500,000 common shares from treasury at a price of $24.57 per share for aggregate gross proceeds of $159.7 million. It will allow the Company to continue growing its Canadian business while moving forward on executing its international expansion plans.
- During the quarter, GENIVAR further diversified its professional services offering by welcoming the entities collectively referred to as "Giroux," Quebec-based geomatics and surveying firms. The Company also acquired ISACtion Inc., a Quebec-based firm specialized in instrumentation control and automation systems. Finally, the firm also established its presence in all ten Canadian provinces through a transaction involving AE Consultants Ltd., based in Newfoundland and Labrador. These three transactions bring to 355 the number of new employees who joined GENIVAR through business acquisitions during the year 2011.
- Shortly after the end of the quarter, GENIVAR laid the initial foundations of its international growth strategy through the acquisition of Consultores Regionales Asociados - CRA S.A.S. based in Colombia. This acquisition is in line with the Company's plans, which consist in developing a long-term local presence in Colombia and expand in the neighboring countries. GENIVAR also acquired Les Investissements R.J. Inc., a Quebec-based firm specialized in mechanical and electrical engineering, will enable GENIVAR to meet growing client demand in the Building sector. Furthermore, the Company diversified its services principally in the oil and gas sector in the Alberta region by welcoming GRB Engineering Ltd. ("GRB"). GRB complements the array of services already offered in this flourishing, dynamic and rich-in-opportunities industry. Finally, the Company reinforces its expertise in architecture with the acquisition of Smith Carter Architects and Engineers Inc. and of Smith Carter (USA) LLC, which are specialized in integrated architectural design and engineering. With this acquisition, GENIVAR reinforces its presence in Western Canada and integrates the United States market.
2011 YEAR HIGHLIGHTS
- Total revenues were $651.9 million compared to $580.4 million in 2010, an increase of 12.3%. For the same period, net revenues amounted to $529.0 million, representing a 12.7% increase as compared to 2010.
- EBITDA increased to $89.7 million, up from $83.5 million in 2010. As a percentage of net revenues, the EBITDA margin stood at 17.0% for 2011, compared to 17.8% for 2010.
- Net earnings amounted to $50.1 million or $1.91 per share.
"I am pleased to report fiscal 2011 ended with a good quarter, that is consistent with our year-to-date results and expectations," commented Pierre Shoiry, President and Chief Executive Officer of GENIVAR. "This past year saw GENIVAR strategically position its platform in preparation for future growth. Throughout the year, we remained focused on the fundamentals of our business and continued to strengthen our presence in Canada and abroad. Additionally, we closed 10 transactions and welcomed new solid and committed financial partners. As we progress into 2012, we remain focused on driving growth, further cementing our position as a leader in the field of professional services, while enhancing execution to deliver sustained value creation," he added.
BOARD OF DIRECTORS
Ali Ettehadieh notified the Board of Directors of the Company that he will not stand for re-election at the next annual meeting of shareholders. Mr. Ettehadieh's term will expire effective upon conclusion of the Company's 2012 annual meeting of shareholders, which is scheduled to be held on May 26, 2012. Mr. Ettehadieh will continue to hold the position of Executive Vice President of GENIVAR.
Commenting on this announcement on behalf of the Board, Richard Bélanger, Chairman, said "We greatly appreciate the energy and the contribution Ali has made to the Board. We thank him for his outstanding service and dedication for the past 6 years."
DIVIDEND
The Board of GENIVAR declared a dividend of $0.375 per share. This dividend will be payable on or about April 15, 2012, to shareholders of record at the close of business on March 31, 2012.
FINANCIAL REPORT
This release includes, by reference, the year 2011 financial reports, including the audited consolidated financial statements and the Management Discussion & Analysis ("MD&A") of the Company.
In 2011, GENIVAR reports its financial results in accordance with IFRS, as required for public companies in Canada. Previously, the Company prepared its financial results under Canadian Generally Accepted Accounting Standards ("GAAP"). The comparative financial information has been restated to reflect the adoption of IFRS, with effect from January 1, 2010.
The Company has included reconciliations between IFRS and the amounts previously reported under GAAP in its 2011 financial statements. For a copy of our full financial results for the year 2011, including the MD&A and the audited consolidated financial statements, please visit our Website at www.genivar.com.
CONFERENCE CALL
GENIVAR will hold a conference call at 4 p.m. (Eastern Time) on March 26, 2012, to discuss these results. The telephone numbers to access the conference call are as follows:
- Montreal and International, please dial 514-861-2909
- Elsewhere in Canada and United States, please dial 877-695-6175
- Conference number: 8284786
A presentation highlighting the results of the fourth quarter and year 2011 will be available on the same day in the Investor section of GENIVAR's Website (www.genivar.com), under Presentations and Events.
A replay of the call will be available until April 2, 2012. The telephone numbers to access the replay of the call are 514-861-2272 or 800-408-3053, password 1421250. The replay of the conference call will also be available in the Investor section of the Website under Presentations and Events, in the days following the event.
RESULTS OF OPERATIONS
| Fourth quarter | Year | |||||||||||
| 2011 | 2010 | Variation | 2011 | 2010 | Variation | |||||||
| IN THOUSANDS OF DOLLARS EXCEPT PER SHARE/UNIT DATA AND PERCENTAGES | FOR THE PERIOD FROM OCTOBER 2 TO DECEMBER 31 (UNAUDITED) |
FOR THE PERIOD FROM OCTOBER 3 TO DECEMBER 31 (UNAUDITED) |
% | FOR THE PERIOD FROM JANUARY 1 TO DECEMBER 31 (AUDITED*) |
FOR THE PERIOD FROM JANUARY 1 TO DECEMBER 31 (AUDITED*) |
% | ||||||
| Revenues | $ 171,980 | $ 154,706 | 11.2% | $ 651,885 | $ 580,431 | 12.3% | ||||||
| Less: Subconsultants and other direct expenses | $ 39,299 | $ 36,103 | 8.9% | $ 122,883 | $ 110,932 | 10.8% | ||||||
| Net revenues** | $ 132,681 | $ 118,603 | 11.9% | $ 529,002 | $ 469,499 | 12.7% | ||||||
| Direct project costs | $ 68,371 | $ 61,597 | 11.0% | $ 272,412 | $ 238,537 | 14.2% | ||||||
| Gross margin | $ 64,310 | $ 57,006 | 12.8% | $ 256,590 | $ 230,962 | 11.1% | ||||||
| Marketing, general and administrative expenses(1) | $ 42,846 | $ 37,673 | 13.7% | $ 166,901 | $ 147,480 | 13.2% | ||||||
| EBITDA** | $ 21,464 | $ 19,333 | 11.0% | $ 89,689 | $ 83,482 | 7.4% | ||||||
| Amortization of intangible assets | $ 4,479 | $ 4,864 | (7.9%) | $ 17,311 | $ 16,859 | 2.7% | ||||||
| Depreciation of property, plant and equipment | $ 2,389 | $ 1,789 | 33.5% | $ 7,971 | $ 6,312 | 26.3% | ||||||
| Financial expenses(2) | $ 1,003 | $ 671 | 49.5% | $ 4,406 | ($ 2,367) | 286.1% | ||||||
| Earnings before income taxes | $ 13,593 | $ 12,009 | 13.2% | $ 60,001 | $ 62,678 | (4.3%) | ||||||
| Income tax expenses | $ 3,678 | $ 9,313 | (60.5%) | $ 9,945 | $ 11,728 | (15.2%) | ||||||
| Net earnings | $ 9,915 | $ 2,696 | 267.8% | $ 50,056 | $ 50,950 | (1.8%) | ||||||
| Attributable to the: | ||||||||||||
| - shareholders/unitholders | $ 9,911 | ($ 1,154) | 958.8% | $ 50,052 | $ 39,219 | 27.6% | ||||||
| - non-controlling interest | $ 4 | $ 3,850 | (99.9%) | $ 4 | $ 11,731 | (100.0%) | ||||||
| Basic net earnings per share/unit | $ 0.37 | $ 0.15 | 146.7% | $ 1.91 | $ 2.81 | (32.0%) | ||||||
| Diluted net earnings per share/unit | $ 0.37 | $ 0.15 | 146.7% | $ 1.91 | $ 2.26 | (15.5%) | ||||||
| Adjusted net earnings** | $ 9,915 | $ 2,696 | 267.8% | $ 50,056 | $ 47,100 | 6.3% | ||||||
| Adjusted net earnings per share/unit** | $ 0.37 | $ 0.10 | 270.0% | $ 1.91 | $ 1.73 | 10.4% | ||||||
| Weighted average number of shares/units | 26,841,888 | 18,103,589 | 26,233,234 | 18,103,589 | ||||||||
| Diluted weighted average number of shares/units | 26,841,888 | 18,103,589 | 26,233,234 | 21,752,567 | ||||||||
| Adjusted weighted average number of shares/units(3) | 26,841,888 | 27,163,976 | 26,233,234 | 27,163,976 | ||||||||
| * | Except for non-IFRS measures. |
| ** | Non-IFRS measures are described below. |
| (1) | The marketing, general and administrative expenses include the exchange loss or gain and the interest revenues. |
| (2) | In 2011, the financial expenses only included the interest expenses. The 2010 financial expenses included the unrealized gain arising from changes in fair value of financial liability related to LP Units of $9,513, less the distributions on this financial liability of $5,663 and the interest expenses. |
| (3) | Adjusted weighted average number of shares/units represents the weighted average number of shares/units receiving dividends/distributions. |
FUNDS FROM OPERATIONS AND FREE CASH FLOW
| Fourth quarter | Year | ||||||
| 2011 | 2010 | 2011 | 2010 | ||||
| IN THOUSANDS OF DOLLARS | FOR THE PERIOD FROM OCTOBER 2 TO DECEMBER 31 (UNAUDITED) |
FOR THE PERIOD FROM OCTOBER 3 TO DECEMBER 31 (UNAUDITED) |
FOR THE PERIOD FROM JANUARY 1 TO DECEMBER 31 (AUDITED*) |
FOR THE PERIOD FROM JANUARY 1 TO DECEMBER 31 (AUDITED*) |
|||
| Cash flows from operating activities | $ 53,278 | $ 35,750 | $ 72,535 | $ 61,762 | |||
| Change in non-cash working capital items | ($ 36,827) | ($ 18,005) | ($ 4,793) | $ 17,994 | |||
| Funds from operations** | $ 16,451 | $ 17,745 | $ 67,742 | $ 79,756 | |||
| Funds from operations per share/unit** | $ 0.61 | $ 0.65 | $ 2.58 | $ 2.94 | |||
| Less: | |||||||
| Change in non-cash working capital items | $ 36,827 | $ 18,005 | $ 4,793 | ($ 17,994) | |||
| Capital expenditures | ($ 5,814) | ($ 3,171) | ($ 12,228) | ($ 12,664) | |||
| Free cash flow** | $ 47,464 | $ 32,579 | $ 60,307 | $ 49,098 | |||
| Free cash flow per share/unit** | $ 1.82 | $ 1.20 | $ 2.30 | $ 1.81 | |||
| * | Except non-IFRS measures. |
| ** | Non-IFRS measures are described below. |
NON-IFRS MEASURES
GENIVAR uses non-IFRS measures that are considered by Canadian companies as indicators of financial performance measures which are not recognized under IFRS and may differ from similar computations as reported by other similar entities and, accordingly, may not be comparable. GENIVAR believes these measures are useful supplemental information that may assist investors in assessing an investment in Company's shares.
Non-IFRS measures used by GENIVAR are net revenues, EBITDA, EBITDA per share/unit, income tax expenses per share/unit, adjusted net earnings, adjusted net earnings per share/unit, funds from operations, funds from operations per share/unit, free cash flow, and free cash flow per share/unit.
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 is not an IFRS measure and does not have a standardized definition within IFRS. Therefore, net revenues may not be comparable to similar measures presented by other issuers. Investors are warned that net revenues should not be construed as an alternative to revenues for the year (as determined in accordance with IFRS) as an indicator of GENIVAR's performance.
EBITDA and EBITDA per share/unit
EBITDA is defined as earnings before financial expenses, income tax expenses, depreciation and amortization. EBITDA is not an IFRS measure and does not have a standardized definition within IFRS. Investors are cautioned that EBITDA should not be considered an alternative to net earnings for the year (as determined in accordance with IFRS) as an indicator of GENIVAR's performance, or an alternative to cash flows from operating, financing and investing activities as a measure of GENIVAR's liquidity and cash flows. GENIVAR's method of calculating EBITDA may differ from the methods used by other issuers and, accordingly, GENIVAR's EBITDA may not be comparable to similar measures used by other issuers.
EBITDA per share/unit is calculated using the weighted average number of shares/units receiving dividends/distributions.
Income tax expenses per share/unit
Income tax expenses per share/unit is defined as the income tax expenses on the diluted weighted average number of shares/units.
Adjusted net earnings and adjusted net earnings per share/unit
Adjusted net earnings is not an IFRS measure and is defined as net earnings without the income and expenses of the financial liability related to LP Units.
Adjusted net earnings per share/unit is calculated using the adjusted net earnings divided by the weighted average number of shares/units receiving dividends/distributions.
Funds from operations and funds from operations per share/unit
Funds from operations is not an IFRS measure. It provides Management and investors with a proxy for the amount of cash generated from operating activities before changes in non-cash working capital items.
Funds from operations per share/unit is calculated using the weighted average number of shares/units receiving dividends/distributions.
Free cash flow and free cash flow per share/unit
Free cash flow is not an IFRS measure. It provides a consistent and comparable measurement of free cash flow generated from operations across entities and is used as an indicator of financial strength and performance. Free cash flow is defined as cash flows from operating activities, including operating cash flows provided from or used in discontinued operations as reported in accordance with IFRS, less total capital expenditures as reported in the financial statements.
Free cash flow per share/unit is calculated using the weighted average number of shares/units receiving dividends/distributions.
ABOUT GENIVAR INC.
GENIVAR is a leading Canadian engineering company providing private and public-sector clients with a full range of professional consulting services throughout all project phases, including planning, design, construction and maintenance. Ranging significantly in size, GENIVAR's clients operate in various different market segments, including the building, industrial, energy, municipal infrastructure, transportation and environmental sectors. GENIVAR is one of the largest engineering companies in Canada by number of employees, with more than 5,500 managers, professionals, technicians, technologists and support staff in over 100 cities in Canada and internationally.
www.genivar.com
Forward-looking statements
Certain information regarding GENIVAR contained herein may constitute forward-looking statements. Forward-looking statements may include estimates, plans, expectations, opinions, forecasts, projections, guidance or other statements that are not statements of fact. Although GENIVAR believes that the expectations reflected in such forward-looking statements are reasonable, it can give no assurance that such expectations will prove to have been correct. These statements are subject to certain risks and uncertainties and may be based on assumptions that could cause actual results to differ materially from those anticipated or implied in the forward-looking statements. GENIVAR's forward-looking statements are expressly qualified in their entirety by this cautionary statement. The complete version of the cautionary note regarding forward-looking statements as well as a description of the relevant assumptions and risk factors likely to affect GENIVAR's actual or projected results are included in the Management Discussion and Analysis for the fourth quarter and year 2011 ended December 31, 2011, which are available on SEDAR at www.sedar.com. The forward-looking statements contained in this press release are made as of the date hereof and GENIVAR does not assume any obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise unless expressly required by applicable securities laws.
SOURCE GENIVAR INC.
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