Alaris Equity Partners Income Trust (together, as applicable, with
its subsidiaries, “
Alaris” or the
"
Trust") is pleased to announce its results for
the three and six months ended June 30, 2024. The results are
prepared in accordance with IFRS Accounting Standards as issued by
the International Accounting Standards Board. All amounts below are
in Canadian dollars unless otherwise noted.
In January 2024, Alaris determined that it met
the definition of an investment entity, as defined by IFRS 10,
Consolidated financial statements. This change in status has
fundamentally changed how Alaris prepares, presents and discusses
its financial results relative to prior periods. IFRS requires that
this change in accounting be made prospectively and as a result
prior periods are not restated to reflect the change in Alaris’
investment entity status. Accordingly, the readers of this press
release, Alaris’ second quarter interim MD&A and unaudited
condensed consolidated interim financial statements should exercise
significant caution in reviewing, considering, and drawing
conclusions from period-to-period comparisons and changes, as the
direct comparisons between dates or across periods can be
inappropriate if not carefully considered in this context.
Highlights:
-
For the three months ended June 30, 2024 Alaris generated $0.36 per
unit of additional book value, improving this metric to
$22.01;
-
For the three months ended June 30, 2024 the Trust, together with
its wholly owned subsidiaries (the “Acquisition
Entities”), earned a total of $42.1 million of revenue,
including, $41.6 million of Partner Distribution revenue net of
foreign exchange, and $0.5 million of transaction fee income, which
was ahead of previous guidance of $39.3 million, and compares to
$36.9 million of Partner Revenue in Q2 2023, an increase of
14%;
-
During the quarter the Trust, via the Acquisition Entities,
invested $69.8 million of capital including: US$20.0 million in a
new partner Cresa, LLC (“Cresa”), US$27.5 million
to facilitate an acquisition by The Shipyard, LLC
(“Shipyard”) along with smaller follow on
investments into existing partners. This incremental investment
brings the total capital deployed for the six months ended June 30,
2024 to $77.5 million;
-
Alaris net distributable cash flow (6) for the six months ended
June 30, 2024 of $55.2 million or $1.21 per unit increased by 14%
and 13% respectively, from $48.5 million and $1.07 per unit in the
six months ended June 30, 2023 after adjusting the comparable
period for non-recurring settlement and litigation costs that
occurred in 2023;
-
The Actual Payout Ratio (2) for the Trust, based on Alaris net
distributable cash flow (8) for the six months ended June 30, 2024
was 56%;
- The
current weighted average combined Earnings Coverage Ratio (3) for
Alaris’ Partners remains at approximately 1.5x with ten of nineteen
Partners greater than 1.5x. In addition, eleven of our partners
have either no debt or less than 1.0x Senior Debt to EBITDA on a
trailing twelve-month basis.
“Another positive quarter for our company.
Stable portfolio performance, a low payout ratio and ample room on
our balance sheet set us up for continued growth in the second half
of the year. Deployment opportunities into both current and
prospectively new partners are in various stages of their processes
and we continue to be encouraged by the current deal
environment. Having declining borrowing costs in Canada while
being able to invest in a higher rate, higher growth environment in
the U.S. is an excellent position to be in for Alaris.”” said Steve
King President and CEO.
Results of Operations
Note where the financial information for Q2 2024
is comparable to specific information from the prior period Q2 2023
condensed consolidated interim financial statements, amounts have
been provided for comparative purposes. As noted above, users of
this press release, interim management discussion and analysis and
the unaudited condensed consolidated interim financial statements
to which it relates should exercise significant caution in
reviewing, considering and drawing conclusions from
period-to-period comparisons and changes.
|
Per Unit Results |
Three months ended |
Six months ended |
|
Period ending June 30 |
|
2024 |
|
2023 |
% Change |
|
2024 |
|
2023 |
% Change |
|
Partner related changes in net gain on Corporate Investment |
$ |
0.91 |
$ |
1.02 |
-10.8 |
% |
$ |
1.95 |
$ |
1.84 |
+6.0 |
% |
| Adjusted
EBITDA |
$ |
0.79 |
$ |
0.98 |
-19.4 |
% |
$ |
1.65 |
$ |
1.64 |
+0.6 |
% |
|
Alaris net distributable cashflow |
$ |
0.70 |
$ |
0.23 |
+204.3 |
% |
$ |
1.21 |
$ |
0.77 |
+57.1 |
% |
| Fully
diluted earnings |
$ |
0.69 |
$ |
0.61 |
+13.1 |
% |
$ |
2.30 |
$ |
0.74 |
+210.8 |
% |
|
Weighted average basic units (000’s) |
|
45,498 |
|
45,487 |
|
|
45,498 |
|
45,423 |
|
During the three months ended June 30, 2024, Partner related
changes in net gain on Corporate Investments (5), decreased by
10.8% as compared to the three months ended June 30, 2023.
Preferred Partner Distribution revenue increased by 7.5% during the
three months ended Q2 2024, driven by new investments in Federal
Management Partners, LLC (“FMP”), Shipyard and
Cresa, as well as LMS Management LP and LMS Reinforcing Steel USA
LP (collectively, “LMS”) paying full Distributions
as compared to 2023, when LMS had deferred Distributions for the
first half of the year. These increases were partially offset by a
reduction in Partner Distributions in Q2 2024 due to the redemption
of Brown & Settle Investments, LLC and a subsidiary thereof
(collectively, “Brown & Settle”), which
occurred in April 2024, and Heritage deferring Distributions to
support cashflow flexibility. Common distributions received from
Partner investments also increased in the quarter. These increases
were offset by a net impact of realized and unrealized loss on
Partner investments of $0.2 million, which is made up of varying
increases and decreases to the fair value of Partner investments.
During the six months ended June 30, 2024, Partner related changes
in net gain on Corporate Investments (5), increased by 6.0% as
compared to the six months ended June 30, 2023. This increase is
reflective of net increases in revenue and income from Partners,
partially offset by a lower net gain to the realized and unrealized
fair value on Partner investments. Net realized and unrealized
gains on Partner investments decreased in the six months ended June
30, 2024 to $8.4 million, as compared to $10.8 million in the prior
period.
For the three months ended June 30, 2024,
Adjusted EBITDA (1) per unit decreased by 19.4% compared to Q2 2023
primarily due to the net realized and unrealized loss to the fair
value of Partner investments in Q2 2024 and a net realized and
unrealized gain in the prior quarter. Partially offsetting the
decrease in Adjusted EBITDA (1) per unit was an increase in Partner
Distribution revenue in Q2 2024. During the six months ended June
30, 2024, Adjusted EBITDA (1) per unit remained relatively
consistent with a nominal increase year over year. Higher Partner
Distribution revenue in the six months ended June 30, 2024 was
partially offset by a lower net realized and unrealized gain to the
fair value of Partner investments as compared to the prior
year.
Alaris’ net distributable cashflow (6) provides
a summary of third-party cash receipts less operating cash outflows
by the Trust in combination with the Acquisition Entities. Alaris’
net distributable cashflow (6) per unit increased by 57.1% in the
six months ended June 30, 2024 as compared to Q2 2023. The increase
is primarily due to the Sandbox settlement in the prior year and
associated legal costs, as well as higher Partner Distribution
revenue during the current year. These increases in the current
period’s per unit Alaris net distributable cashflow (6) are
partially offset by higher total cash interest paid in in the
period as a result of the senior credit facility having a higher
realized interest rate on a larger average amount of debt
outstanding as compared to Q2 2023. The Actual Payout Ratio (2) for
the Trust, based on Alaris net distributable cashflow (6) for the
six months ended June 30, 2024, is 56%.
As of at June 30, 2024, net book value (4)
increased by $0.90 per unit to $22.01 per unit as compared to
$21.12 per unit at December 31, 2023. The increase in per unit net
book value (4) is the result of the $2.32 basic earnings per unit
in the six months ended June 30, 2024, less the earnings impact of
the gain on reclassification of the translation reserve of $0.74
per unit, and further reduced by the quarterly dividends declared
and paid a total of $0.68 per unit.
Outlook
During the six months ended June 30, 2024, the
Trust, through its Acquisition Entities invested approximately
$77.5 million, which was used in follow-on Partner investments and
the addition of Cresa as a new partner. Also, during the quarter,
the Trust’s investment in Brown & Settle was fully redeemed.
These transactions, along with Alaris’ total investment portfolio
are included in Run Rate Revenue (7) for the next twelve months,
which is expected to be approximately $163 million as detailed in
the outlook below. This includes current contracted amounts, an
additional US$0.5 million from Ohana related to Distributions
deferred during the COVID-19 pandemic, and an estimated $12.5
million of common dividends. In Q2 2024, the Trust together with
its Acquisition Entities earned $42.1 million, $41.6 million in
Partner Distributions net of foreign exchange and $0.5 million of
third party transaction fee revenue, which was ahead of previous
guidance of $39.3 million, primarily due to Shipyard’s follow on
investments that occurred subsequent to Q1 2024 as well a higher
exchange rate on US denominated distributions. Alaris expects total
revenue from its Partners in Q3 2024 of approximately $38.7
million.
The Run Rate Cash Flow (8) table below outlines
the Trust and its Acquisitions Entities combined expectation for
Partners Distribution revenue, transaction fee revenue, general and
administrative expenses, third party interest expense, tax expense
and distributions to unitholders for the next twelve months. The
Run Rate Cash Flow (8) is a forward looking supplementary financial
measure and outlines the net cash from operating activities, less
the distributions paid, that Alaris is expecting to generate over
the next twelve months. The Trust’s method of calculating this
measure may differ from the methods used by other issuers.
Therefore, it may not be comparable to similar measures presented
by other issuers.
Run rate general and administrative expenses are
currently estimated at $16.5 million and include all public company
costs incurred by the Trust and its Acquisition Entities. The
Trust’s Run Rate Payout Ratio (9) is expected to be within a range
of 65% and 70% when including Run Rate Revenue (7), overhead
expenses and its existing capital structure. The table below sets
out our estimated Run Rate Cash Flow (8) as well as the after-tax
impact of positive net investment, the impact of every 1% increase
in Secure Overnight Financing Rate (“SOFR”) based
on current outstanding USD debt and the impact of every $0.01
change in the USD to CAD exchange rate.
|
Run Rate Cash Flow ($ thousands except per
unit) |
Amount ($) |
$ / Unit |
|
Run Rate Revenue, Partner Distribution
revenue |
$ |
162,600 |
|
$ |
3.57 |
|
|
General and administrative expenses |
|
(16,500 |
) |
|
(0.36 |
) |
|
Third party Interest and taxes |
|
|
(56,100 |
) |
|
(1.23 |
) |
|
Net cash from operating activities |
$ |
90,000 |
|
$ |
1.98 |
|
|
Distributions paid |
|
|
(61,900 |
) |
|
(1.36 |
) |
|
Run Rate Cash Flow |
|
$ |
28,100 |
|
$ |
0.62 |
|
|
|
|
|
|
|
Other considerations (after taxes and
interest): |
|
|
|
New investments |
Every $50
million deployed @ 14% |
|
+2,325 |
|
|
+0.05 |
|
|
Interest rates |
Every 1.0%
increase in SOFR |
|
-2,400 |
|
|
-0.05 |
|
|
USD to CAD |
Every $0.01 change of USD to CAD |
+/- 900 |
+/- 0.02 |
Alaris’ financial statements and MD&A are available on
SEDAR+ at www.sedarplus.ca and on our website at
www.alarisequitypartners.com.
Earnings Release Date and Conference
Call Details
Alaris management will host a conference call at
9am MT (11am ET), Friday, August 2, 2024 to discuss the financial
results and outlook for the Trust.
Participants must register for the call using
this link: Q2 2024 Conference Call. Pre-register to receive the
dial-in numbers and unique PIN to access the call seamlessly. It is
recommended that you join 10 minutes prior to the event start
(although you may register and dial in at any time during the
call). Participants can access the webcast here: Q2 Webcast. A
replay of the webcast will be available two hours after the call
and archived on the same web page for six months. Participants can
also find the link on our website, stored under the “Investors”
section – “Presentations and Events”, at
www.alarisequitypartners.com.
An updated corporate presentation will be posted
to the Trust’s website within 24 hours at
www.alarisequitypartners.com.
About the Trust:
Alaris’ investment and investing activity refers
to providing, through the Acquisition Entities, alternative equity
to private companies (“Partners”) to meet their
business and capital objectives, which includes management buyouts,
dividend recapitalization, growth and acquisitions. Alaris achieves
this by investing its unitholder capital, as well as debt, through
the Acquisition Entities, in exchange for distributions, dividends
or interest (collectively, “Distributions”) as
well as capital appreciation on both preferred and common equity,
with the principal objectives of generating predictable cash flows
for distribution payments to its unitholders and growing net book
value through returns from capital appreciation. Distributions,
other than common equity Distributions, from the Partners are
adjusted annually based on the percentage change of a “top-line”
financial performance measure such as gross margin or same store
sales and rank in priority to common equity position.
Non-GAAP and Other Financial
Measures
The terms Adjusted Earnings, components of
Corporate investments, EBITDA, Adjusted EBITDA, Extended group net
distributable cashflow, Earnings Coverage Ratio, Run Rate Payout
Ratio, Actual Payout Ratio, Run Rate Revenue, Run Rate Cash Flow,
and Per Unit amounts (collectively, the “Non-GAAP and Other
Financial Measures”) are financial measures used in this
MD&A that are not standard measures under International
Financial Reporting Standards (“IFRS”) . The
Trust’s method of calculating the Non-GAAP and Other Financial
Measures may differ from the methods used by other issuers.
Therefore, the Trust’s Non-GAAP and Other Financial Measures may
not be comparable to similar measures presented by other
issuers.
(1) “Adjusted EBITDA” and
“EBITDA: are Non-GAAP financial measures and refer
to earnings determined in accordance with IFRS, before depreciation
and amortization, interest expense (finance costs) and income tax
expense. EBITDA is used by management and many investors to
determine the ability of an issuer to generate cash from
operations. “Adjusted EBITDA” and
“Adjusted EBITDA per unit”, which is a non-GAAP
ratio that removes the impact from unrealized fluctuations in
exchange rates and their impact on the Trust’s investments at fair
value, as well as one time items and the impact of finance costs
and taxes included within the net gain on Corporate Investments
incurred by the Acquisition Entities and, on a per unit basis, is
and the same amount divided by weighted average basic units
outstanding. Management believes Adjusted EBITDA, EBITDA and
Adjusted EBITDA per unit are useful supplemental measures from
which to determine the Trust’s ability to generate cash available
for servicing its loans and borrowings, income taxes and
distributions to unitholders. The Trust’s method of calculating
these Non-GAAP financial measures may differ from the methods used
by other issuers. Therefore, they may not be comparable to similar
measures and ratios presented by other issuers.
|
|
Three months ended June 30 |
Six months ended June 30 |
|
$ thousands except per unit amounts |
|
2024 |
|
|
2023 |
% Change |
|
2024 |
|
|
2023 |
% Change |
|
Earnings |
$ |
31,675 |
|
$ |
28,387 |
|
$ |
105,448 |
|
$ |
33,940 |
|
|
Depreciation and amortization |
|
135 |
|
|
55 |
|
|
261 |
|
|
111 |
|
|
Finance costs |
|
1,150 |
|
|
6,882 |
|
|
2,295 |
|
|
13,399 |
|
|
Total income tax expense |
|
585 |
|
|
4,593 |
|
|
303 |
|
|
9,291 |
|
|
EBITDA |
$ |
33,545 |
|
$ |
39,917 |
-16.0 |
% |
$ |
108,307 |
|
$ |
56,741 |
+90.9 |
% |
|
Adjustments: |
|
|
|
|
|
|
|
Gain on derecognition of previously consolidated entities |
$ |
- |
|
$ |
- |
|
$ |
(30,260 |
) |
$ |
- |
|
|
Foreign exchange |
|
(9,779 |
) |
|
3,888 |
|
|
(30,558 |
) |
|
4,103 |
|
|
Sandbox litigation and legal costs |
|
- |
|
|
576 |
|
|
- |
|
|
13,676 |
|
|
Finance costs, senior credit facility and convertible
debentures |
|
7,220 |
|
|
- |
|
|
15,231 |
|
|
- |
|
|
Acquisition Entities income tax expense - current |
|
2,000 |
|
|
- |
|
|
7,031 |
|
|
- |
|
|
Acquisition Entities income tax expense - deferred |
|
2,838 |
|
|
- |
|
|
5,163 |
|
|
- |
|
|
Adjusted EBITDA |
$ |
35,824 |
|
$ |
44,381 |
-19.3 |
% |
$ |
74,914 |
|
$ |
74,520 |
+0.5 |
% |
|
Adjusted EBITDA per unit |
$ |
0.79 |
|
$ |
0.98 |
-19.4 |
% |
$ |
1.65 |
|
$ |
1.64 |
+0.6 |
% |
(2) “Actual Payout Ratio” is a supplementary
financial measure and refers to Alaris’ total distributions paid
during the period (annually or quarterly) divided by the actual net
cash from operating activities Alaris generated for the period. It
represents the net cash from operating activities after
distributions paid to unitholders available for either repayments
of senior debt and/or to be used in investing activities.
(3) “Earnings Coverage Ratio
(“ECR”)” is a supplementary financial measure and refers
to the EBITDA of a Partner divided by such Partner’s sum of debt
servicing (interest and principal), unfunded capital expenditures
and distributions to Alaris. Management believes the earnings
coverage ratio is a useful metric in assessing our partners
continued ability to make their contracted distributions.
(4) “Net book value” and
“net book value per unit” are Non-GAAP financial
measures and represents the equity value of the company or total
assts less total liabilities and the same amount divided by
weighted average basic units outstanding. Net book value and net
book value per unit are used by management to determine the growth
in assets over the period net of amounts paid out to unitholders as
distributions. Management believes net book value and net book
value per unit are useful supplemental measures from which to
compare the Trust’s growth period over period. The Trust’s method
of calculating these Non-GAAP financial measures may differ from
the methods used by other issuers. Therefore, they may not be
comparable to similar measures presented by other issuers.
|
|
30-Jun |
31-Dec |
|
|
|
|
$ thousands except per unit amounts |
|
2024 |
|
2023 |
|
Change in |
% Change |
|
Total Assets |
$ |
1,093,177 |
$ |
1,474,894 |
|
|
|
|
Total Liabilities |
$ |
91,556 |
$ |
514,071 |
|
|
|
|
Net book value |
$ |
1,001,621 |
$ |
960,823 |
|
$ |
40,798 |
+4.2 |
% |
|
Weighted average basic units (000's) |
|
45,498 |
|
45,498 |
|
|
|
|
Net book value per unit |
$ |
22.01 |
$ |
21.12 |
|
$ |
0.90 |
+4.2 |
% |
(5) “Partner related changes in net gain on Corporate
Investments” The components of Corporate Investments are
Non-GAAP financial measures and are presented for better
comparability to prior year reporting. These amounts are reconciled
to information from note 3 of the condensed consolidated interim
financial statements below. The Trust’s method of calculating these
Non-GAAP financial measures may differ from the methods used by
other issuers. Therefore, they may not be comparable to similar
measures presented by other issuers.
|
|
Three months ended June 30 |
Six months ended June 30 |
|
$ thousands |
|
2024 |
|
|
2023 |
% Change |
|
2024 |
|
|
2023 |
|
% Change |
|
Partner Distribution revenue - Preferred, including realized
foreign exchange Note 1 |
$ |
37,848 |
|
$ |
35,204 |
+7.5 |
% |
$ |
76,041 |
|
$ |
70,700 |
|
+7.6 |
% |
|
Partner Distribution revenue - Common |
$ |
3,705 |
|
$ |
1,152 |
+221.6 |
% |
$ |
4,306 |
|
$ |
2,088 |
|
+106.2 |
% |
|
Net realized gain from Partners investments Note
2 |
$ |
7,017 |
|
$ |
49 |
+14220.4 |
% |
$ |
8,976 |
|
$ |
12,549 |
|
-28.5 |
% |
|
Net unrealized gain / (loss) on Partners investments Note
2 |
$ |
(7,218 |
) |
$ |
9,938 |
-172.6 |
% |
$ |
(543 |
) |
$ |
(1,740 |
) |
+68.8 |
% |
|
Partner related changes in net gain on Corporate
Investment |
$ |
41,352 |
|
$ |
46,343 |
-10.8 |
% |
$ |
88,780 |
|
$ |
83,597 |
|
+6.2 |
% |
|
Partner related changes in net gain on Corporate Investment per
unit |
$ |
0.91 |
|
$ |
1.02 |
-10.8 |
% |
$ |
1.95 |
|
$ |
1.84 |
|
+6.0 |
% |
Note 1 – In Q2 2023, Partner
Distribution revenue – Preferred, including realized foreign
exchange and Partner Distribution revenue - Common were presented
as one line on the face of the income statement titled “Revenues,
including realized foreign exchange gain” in the amount of $36,853
for the three months ended and $73,541 for the six months ended.
Prior period Partner Distribution revenue – Preferred, including
realized foreign exchange for the three and six months ended June
30, 2024 above has been adjusted to exclude Sono Bello’s management
fee income (Q2 2023 three months - $496, Q2 2023 six months ended -
$753) for period over period comparability, which in 2024 is
recognized in the Trust’s Management and advisory fee income.
Note 2 - The Net realized and
unrealized gain / (loss) on Partner investments, which is the sum
of Net realized gain from Partner investments and Net unrealized
gain / ( loss) on Partner Investments, for the three and six months
ended June 30, 2024 is a loss of $0.2 million and gain of $8.4
million respectively, and for the three and six months ended June
30, 2023 are gains of $10.0 million and $10.8 million
respectively.
(6) “Alaris net distributable
cashflow” is a non-GAAP measure that refers to all sources
of external revenue in both the Trust and the Acquisition Entities
less all general and administrative expenses, third party interest
expense and tax expense. Alaris net distributable cashflow is a
useful metric for management and investors as it provides a summary
of the total cash from operating activities that can be used to pay
the Trust distribution, repay senior debt and/or be used for
additional investment purposes. The Trust’s method of calculating
this Non-GAAP measure may differ from the methods used by other
issuers. Therefore, it may not be comparable to similar measures
presented by other issuers. The 2023 comparatives are presented
prior to the Trust’s change in status as a investment entity and
have been aligned with the most comparative balance in the 2024
presentation.
|
|
Six months ended June 30 |
|
$ thousands except per unit amounts |
|
2024 |
|
|
2023 |
|
% Change |
|
Partner Distribution revenue - Preferred, including realized
foreign exchange |
$ |
76,041 |
|
$ |
70,700 |
|
|
|
Partner Distribution revenue - Common |
|
4,306 |
|
|
2,088 |
|
|
|
Third party management and advisory fees |
|
1,022 |
|
|
753 |
|
|
|
|
|
|
|
|
Expenditures of the Trust: |
|
|
|
|
General and administrative |
|
(8,824 |
) |
|
(20,389 |
) |
|
|
Current income tax expense |
|
(836 |
) |
|
- |
|
|
|
Third party cash interest paid by the Trust |
|
(2,031 |
) |
|
(2,030 |
) |
|
|
|
|
|
|
|
Expenditures incurred by Acquisition Entities: |
|
|
|
|
Operating costs and other |
|
(1,759 |
) |
|
(1,118 |
) |
|
|
Transactions costs |
|
(2,153 |
) |
|
(1,511 |
) |
|
|
Acquisition Entities income tax expense - current |
|
(7,031 |
) |
|
(6,202 |
) |
|
|
Cash interest paid, senior credit facility and convertible
debentures |
|
(11,370 |
) |
|
(6,257 |
) |
|
|
|
|
|
|
|
Alaris' changes in net working capital |
|
7,816 |
|
|
(1,190 |
) |
|
|
Alaris net distributable cashflow |
$ |
55,181 |
|
$ |
34,844 |
|
+58.4 |
% |
|
Alaris net distributable cashflow per unit |
$ |
1.21 |
|
$ |
0.77 |
|
+57.1 |
% |
(7) “Run Rate Revenue” is a supplementary
financial measure and refers to Alaris’ total revenue expected to
be generated over the next twelve months based on contracted
distributions from current Partners, excluding any potential
Partner redemptions, it also includes an estimate for common
dividends or distributions based on past practices, where
applicable. Run Rate Revenue is a useful metric as it provides an
expectation for the amount of revenue Alaris can expect to generate
in the next twelve months based on information known.
(8) “Run Rate Cash Flow” is a
Non-GAAP financial measure and outlines the net cash from operating
activities, net of distributions paid, that Alaris is expecting to
have after the next twelve months. This measure is comparable to
net cash from operating activities less distributions paid, as
outlined in Alaris’ consolidated statements of cash flows.
(9) “Run Rate Payout Ratio” is
a Non-GAAP financial ratio that refers to Alaris’ distributions per
unit expected to be paid over the next twelve months divided by the
net cash from operating activities per unit calculated in the Run
Rate Cash Flow table. Run Rate Payout Ratio is a useful metric for
Alaris to track and to outline as it provides a summary of the
percentage of the net cash from operating activities that can be
used to either repay senior debt during the next twelve months
and/or be used for additional investment purposes. Run Rate Payout
Ratio is comparable to Actual Payout Ratio as defined above.
(10) “Per Unit” values, other
than earnings per unit, refer to the related financial statement
caption as defined under IFRS or related term as defined herein,
divided by the weighted average basic units outstanding for the
period.
The terms Net Book Value, Components of
Corporate investments, EBITDA, Adjusted EBITDA, Alaris net
distributable cashflow, Earnings Coverage Ratio, Run Rate Payout
Ratio, Actual Payout Ratio, Run Rate Revenue, Run Rate Cash Flow
and Per Unit amounts should only be used in conjunction with the
Trust’s unaudited interim condensed consolidated financial
statements, complete versions of which available on SEDAR+ at
www.sedarplus.ca.
Forward-Looking Statements
This news release contains forward-looking
information and forward-looking statements (collectively,
“forward-looking statements”) under applicable securities laws,
including any applicable “safe harbor” provisions. Statements other
than statements of historical fact contained in this news release
are forward-looking statements, including, without limitation,
management's expectations, intentions and beliefs concerning the
growth, results of operations, performance of the Trust and the
Partners, the future financial position or results of the Trust,
business strategy and plans and objectives of or involving the
Trust or the Partners. Many of these statements can be identified
by looking for words such as "believe", "expects", "will",
"intends", "projects", "anticipates", "estimates", "continues" or
similar words or the negative thereof. In particular, this news
release contains forward-looking statements regarding: the
anticipated financial and operating performance of the Partners;
the attractiveness of Alaris’ capital offering; the Trust’s Run
Rate Payout Ratio, Run Rate Cash Flow, Run Rate Revenue and total
revenue; the impact of recent new investments and follow-on
investments; expectations regarding receipt (and amount of) any
common equity distributions or dividends from Partners in which
Alaris holds common equity, including the impact on the Trust’s net
cash from operating activities, Run Rate Revenue, Run Rate Cash
Flow and Run Rate Payout Ratio; the use of proceeds from the senior
credit facility; use of proceeds from Partner redemptions; impact
of future deployment; the Trust’s ability to deploy capital; the
yield on the Trust’s investments and expected resets on
Distributions; changes in SOFR and exchange rates; the impact of
deferred Distributions and the timing of repayment there of; the
Trust’s return on its investments; and Alaris’ expenses for 2024.
To the extent any forward-looking statements herein constitute a
financial outlook or future oriented financial information
(collectively, “FOFI”), including estimates
regarding revenues, Distributions from Partners (including expected
resets, restarting full or partial Distributions and common equity
distributions), Run Rate Payout Ratio, Run Rate Cash Flow, net cash
from operating activities, expenses and impact of capital
deployment, they were approved by management as of the date hereof
and have been included to provide an understanding with respect to
Alaris' financial performance and are subject to the same risks and
assumptions disclosed herein. There can be no assurance that the
plans, intentions or expectations upon which these forward-looking
statements are based will occur.
By their nature, forward-looking statements
require Alaris to make assumptions and are subject to inherent
risks and uncertainties. Assumptions about the performance of the
Canadian and U.S. economies over the next 24 months and how that
will affect Alaris’ business and that of its Partners (including,
without limitation, the impact of any global health crisis, like
COVID-19, and global economic and political factors) are material
factors considered by Alaris management when setting the outlook
for Alaris. Key assumptions include, but are not limited to,
assumptions that: the Russia/Ukraine conflict, conflicts in the
Middle East, and other global economic pressures over the next
twelve months will not materially impact Alaris, its Partners or
the global economy; interest rates will not rise in a matter
materially different from the prevailing market expectation over
the next 12 months; global heath crises, like COVID-19 or variants
there of will not impact the economy or our partners operations in
a material way in the next 12 months; the businesses of the
majority of our Partners will continue to grow; more private
companies will require access to alternative sources of capital;
the businesses of new Partners and those of existing Partners will
perform in line with Alaris’ expectations and diligence; and that
Alaris will have the ability to raise required equity and/or debt
financing on acceptable terms. Management of Alaris has also
assumed that the Canadian and U.S. dollar trading pair will remain
in a range of approximately plus or minus 15% of the current rate
over the next 6 months. In determining expectations for economic
growth, management of Alaris primarily considers historical
economic data provided by the Canadian and U.S. governments and
their agencies as well as prevailing economic conditions at the
time of such determinations.
There can be no assurance that the assumptions,
plans, intentions or expectations upon which these forward-looking
statements are based will occur. Forward-looking statements are
subject to risks, uncertainties and assumptions and should not be
read as guarantees or assurances of future performance. The actual
results of the Trust and the Partners could materially differ from
those anticipated in the forward-looking statements contained
herein as a result of certain risk factors, including, but not
limited to, the following: widespread health crisis, like COVID-19
(or its variants), other global economic factors (including,
without limitation, the Russia/Ukraine conflict, conflicts in the
Middle East, inflationary measures and global supply chain
disruptions on the global economy, Trust and the Partners
(including how many Partners will experience a slowdown of their
business and the length of time of such slowdown), the dependence
of Alaris on the Partners, including any new investment structures;
leverage and restrictive covenants under credit facilities;
reliance on key personnel; failure to complete or realize the
anticipated benefit of Alaris’ financing arrangements with the
Partners; a failure to obtain required regulatory approvals on a
timely basis or at all; changes in legislation and regulations and
the interpretations thereof; risks relating to the Partners and
their businesses, including, without limitation, a material change
in the operations of a Partner or the industries they operate in;
inability to close additional Partner contributions or collect
proceeds from any redemptions in a timely fashion on anticipated
terms, or at all; a failure to settle outstanding litigation on
expected terms, or at all; a change in the ability of the Partners
to continue to pay Alaris at expected Distribution levels or
restart distributions (in full or in part); a failure to collect
material deferred Distributions; a change in the unaudited
information provided to the Trust; and a failure to realize the
benefits of any concessions or relief measures provided by Alaris
to any Partner or to successfully execute an exit strategy for a
Partner where desired. Additional risks that may cause actual
results to vary from those indicated are discussed under the
heading “Risk Factors” and “Forward Looking Statements” in Alaris’
Management Discussion and Analysis and Annual Information Form for
the year ended December 31, 2023, which is or will be (in the case
of the AIF) filed under Alaris’ profile at www.sedarplus.ca and on
its website at www.alarisequitypartners.com.
Readers are cautioned that the assumptions used
in the preparation of forward-looking statements, including FOFI,
although considered reasonable at the time of preparation, based on
information in Alaris’ possession as of the date hereof, may prove
to be imprecise. In addition, there are a number of factors that
could cause Alaris’ actual results, performance or achievement to
differ materially from those expressed in, or implied by, forward
looking statements and FOFI, or if any of them do so occur, what
benefits the Trust will derive therefrom. As such, undue reliance
should not be placed on any forward-looking statements, including
FOFI.
The Trust has included the forward-looking
statements and FOFI in order to provide readers with a more
complete perspective on Alaris’ future operations and such
information may not be appropriate for other purposes. The
forward-looking statements, including FOFI, contained herein are
expressly qualified in their entirety by this cautionary statement.
Alaris disclaims any intention or obligation to update or revise
any forward-looking statements, whether as a result of new
information, future events or otherwise, except as required by
law.
For more information please contact:
Investor RelationsAlaris Equity Partners Income
Trust403-260-1457ir@alarisequity.com