CALGARY, ALBERTA--(Marketwire - April 30, 2012) - Alaris Royalty Corp. ("Alaris" or the "Corporation") (TSX:AD) today announced its results for the three months ended March 31, 2012.
The Corporation's revenue from partner companies increased 23% to $6.93 million compared to $5.64 million in the prior year period. The increase was due to the addition of two new private company partners in the last half of 2011: Killick Aerospace Limited Partnership ("Killick") in July 2011 and Quetico, LLC ("Quetico") in December 2011. The Corporation also completed a follow on contribution into KMH Limited Partnership ("KMH") in October 2011.
For the three months ended March 31, 2012, the Corporation recorded earnings of $3.96 million and EBITDA of $5.64 million compared to earnings of $2.93 million and EBITDA of $4.51 million in the prior year. The 35% increase to earnings and the 25% increase in EBITDA in the current period is predominantly due to having a full quarter of revenues from Killick and Quetico as well as the increased distributions from KMH.
"Our first quarter was again as expected given the contractual and predictable nature of our revenues from our partners. As well, our recent increase of our credit facility from $30 million to $50 million gives us additional capacity as we continue to evaluate new opportunities in Canada and the United States" said Darren Driscoll, CFO, Alaris Royalty Corp.
| Reconciliation of Earnings to EBITDA (thousands) |
March 31, 2012 |
March 31, 2011 |
|||
| Earnings | $ | 3,957 | $ | 2,926 | |
| Adjustments to Earnings: | |||||
| Amortization | 27 | 47 | |||
| Interest expense | 116 | 419 | |||
| Deferred income tax expense | 1,538 | 1,117 | |||
| EBITDA | $ | 5,638 | $ | 4,509 | |
Outlook
Alaris' agreements with its partner companies (its "Private Company Partners") provide for estimated revenues to Alaris of approximately $27.8 million for 2012. Revenues from our Private Company Partners for the three months ended June 30, 2012 are expected to be $6.9 million. The Corporation has $45.5 million remaining on its $50 million credit facility for use in future transactions. General and administrative expenses are currently estimated to be $3.2 million for 2012, inclusive of all public company costs. Cash requirements after earnings are expected to remain at minimal levels.
The Consolidated Statement of Financial Position, Statement of Comprehensive Income, and Statement of Cash Flows are attached to this news release. Alaris' financial statements and MD&A are available on SEDAR at www.sedar.com and on our website at www.alarisroyalty.com.
About the Corporation:
Alaris provides alternative financing to the Private Company Partners in exchange for royalties or distributions with the principal objective of generating stable and predictable cash flows for dividend payments to its shareholders. Royalties or distributions from the Private Company Partners are structured as a percentage of a "top line" financial performance measure such as gross margin and same-store sales and rank in priority to the owners' common equity position.
Non-IFRS Measure
The term EBITDA is a financial measure used in this news release that is not a standard measure under International Financial Reporting Standards ("IFRS"). The Corporation's method of calculating EBITDA may differ from the methods used by other issuers. Therefore, the Corporation's EBITDA may not be comparable to similar measures presented by other issuers.
EBITDA refers to net earnings (loss) determined in accordance with IFRS, before depreciation and amortization, net of gain or loss on disposal of capital assets, interest expense and income tax expense. EBITDA is used by management and many investors to determine the ability of an issuer to generate cash from operations. Management believes EBITDA is a useful supplemental measure from which to determine the Corporation's ability to generate cash available for debt service, working capital, capital expenditures, income taxes and dividends. The Corporation has provided a reconciliation of net income to EBITDA in this news release.
The term EBITDA should only be used in conjunction with the Corporation's annual audited and quarterly reviewed financial statements, excerpts of which are available below, while complete versions are available on SEDAR at www.sedar.com.
Forward-Looking Statements
This news release contains forward-looking statements under applicable securities laws. 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 Corporation and the Private Company Partners, the, the future financial position or results of the Corporation, business strategy, and plans and objectives of or involving the Corporation or the Private Company 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 revenues to be received by Alaris and its general and administrative expenses in 2012, and the cash requirements of Alaris in 2012.
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 in 2012 and how that will affect Alaris' business and that of its Private Company Partners are material factors considered by Alaris management when setting the outlook for Alaris. Key assumptions include, but are not limited to, assumptions that the Canadian and U.S. economies will grow moderately in 2012, that interest rates will remain low, that the Private Company Partners will continue to make distributions to Alaris as and when required, that the businesses of the Private Company Partners will continue to grow, that the Corporation will experience positive resets to its annual royalties and distributions from its Private Company Partners in 2012, 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 capital markets will continue to improve and that the Canadian dollar will strengthen modestly relative to the U.S. dollar. 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.
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 Corporation and the Private Company 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: the dependence of Alaris on the Private Company Partners; reliance on key personnel; general economic conditions; failure to complete or realize the anticipated benefit of Alaris' financing arrangements with the Private Company Partners; government regulations; and risks relating to the Private Company Partners and their businesses. Additional risks that may cause actual results to vary from those indicated are discussed under the heading "Risk Factors" in the Corporation's Annual Information Form for the year ended December 31, 2011, which is filed under the Corporation's profile at www.sedar.com. Accordingly, readers are cautioned not to place undue reliance on any forward-looking information contained in this news release. Statements containing forward-looking information reflect management's current beliefs and assumptions based on information in its possession on the date of this news release. Although management believes that the expectations represented in such forward-looking statements are reasonable, there can be no assurance that such expectations will prove to be correct.
| Alaris Royalty Corp. |
| Condensed consolidated statement of financial position (unaudited) |
| March 31 | December 31 | |||||
| 2012 | 2011 | |||||
| Assets | ||||||
| Cash and cash equivalents | $ | 4,061,990 | $ | 3,888,465 | ||
| Prepayments | 81,240 | 119,508 | ||||
| Trade and other receivables | 376,904 | 3,443,679 | ||||
| Current Assets | 4,520,134 | 7,451,652 | ||||
| Equipment | 67,602 | 66,743 | ||||
| Intangible assets | 6,638,404 | 6,661,138 | ||||
| Preferred LP Units | 207,106,599 | 207,408,290 | ||||
| Investment tax credit receivable | 10,922,393 | 10,922,393 | ||||
| Deferred income taxes | 12,567,029 | 13,967,984 | ||||
| Non-current assets | 237,302,031 | 239,026,548 | ||||
| Total Assets | $ | 241,822,165 | $ | 246,478,200 | ||
| Liabilities | ||||||
| Accounts payable and accrued liabilities | $ | 345,641 | $ | 1,546,705 | ||
| Dividends payable | 1,850,362 | 1,850,145 | ||||
| Income taxes payable | 134,266 | 67,590 | ||||
| Loans and borrowings | 375,000 | - | ||||
| Current Liabilities | 2,705,269 | 3,464,440 | ||||
| Loans and borrowings | 4,125,000 | 6,500,000 | ||||
| Non-current liabilities | 4,125,000 | 6,500,000 | ||||
| Total Liabilities | $ | 6,830,269 | $ | 9,964,440 | ||
| Equity | ||||||
| Share capital | $ | 200,863,565 | $ | 200,822,160 | ||
| Equity reserve | 4,934,588 | 4,626,500 | ||||
| Fair value reserve | 2,292,939 | 2,292,939 | ||||
| Translation reserve | (334,563 | ) | (124,947 | ) | ||
| Retained Earnings | 27,235,367 | 28,897,108 | ||||
| Total Equity | $ | 234,991,896 | $ | 236,513,760 | ||
| Total Liabilities and Equity | $ | 241,822,165 | $ | 246,478,200 | ||
| Alaris Royalty Corp. |
| Condensed consolidated statement of comprehensive income (unaudited) |
| For the three months ended March 31 |
| 2012 | 2011 | |||||
| Revenues | ||||||
| Royalties and distributions | $ | 6,931,784 | $ | 5,635,319 | ||
| Interest and other | 106,534 | - | ||||
| Total Revenue | 7,038,317 | 5,635,319 | ||||
| Salaries and benefits | 232,810 | 223,337 | ||||
| Corporate and office | 307,157 | 277,140 | ||||
| Legal and accounting fees | 185,327 | 113,049 | ||||
| Non-cash stock-based compensation | 349,488 | 513,065 | ||||
| Depreciation and amortization | 26,539 | 47,171 | ||||
| Subtotal | 1,101,321 | 1,173,762 | ||||
| Earnings from operations | 5,936,996 | 4,461,557 | ||||
| Finance cost | 116,178 | 419,400 | ||||
| Unrealized foreign exchange loss | 325,988 | - | ||||
| Earnings before taxes | 5,494,830 | 4,042,157 | ||||
| Deferred income tax expense | 1,400,958 | 1,116,653 | ||||
| Current income tax expense | 137,232 | - | ||||
| Earnings | $ | 3,956,640 | $ | 2,925,504 | ||
| Other comprehensive income | ||||||
| Net change in fair value of Preferred LP units | - | 1,736,546 | ||||
| Tax impact of change in fair value | - | (217,068 | ) | |||
| Foreign currency translation differences | (209,616 | ) | - | |||
| Other comprehensive income for the period, net of income tax | (209,616 | ) | 1,519,478 | |||
| Total comprehensive income for the period | $ | 3,747,024 | $ | 4,444,982 | ||
| Earnings per share | ||||||
| Basic earnings per share | $ | 0.20 | $ | 0.17 | ||
| Fully diluted earnings per share | $ | 0.20 | $ | 0.17 | ||
| Weighted average shares outstanding | ||||||
| Basic | 19,476,369 | 16,814,002 | ||||
| Fully Diluted | 20,135,586 | 17,319,932 | ||||
| Alaris Royalty Corp. |
| Condensed consolidated statement of cash flows (unaudited) |
| For the three months ended March 31 |
| 2012 | 2011 | |||||
| Cash flows from operating activities | ||||||
| Earnings from the period | $ | 3,956,640 | $ | 2,925,504 | ||
| Adjustments for: | ||||||
| Finance costs | 116,178 | 419,400 | ||||
| Deferred income taxes | 1,400,958 | 1,116,653 | ||||
| Depreciation and amortization | 26,539 | 47,171 | ||||
| Unrealized foreign exchange loss | 325,988 | - | ||||
| Gain on forward contract | (106,534 | ) | - | |||
| Non-cash stock based compensation | 349,488 | 513,065 | ||||
| $ | 6,069,257 | $ | 5,021,793 | |||
| Change in: | ||||||
| -trade and other receivables | $ | 3,082,362 | $ | 505,679 | ||
| -prepayments | 38,268 | 165,643 | ||||
| -trade and other payables | (1,066,494 | ) | (1,114,034 | ) | ||
| Cash generated from operating activities | 8,123,393 | 4,579,081 | ||||
| Finance costs | (116,178 | ) | (419,400 | ) | ||
| Net cash from operating activities | $ | 8,007,215 | $ | 4,159,681 | ||
| Cash flows from investing activities | ||||||
| Acquisition of equipment | $ | (4,665 | ) | $ | (4,150 | ) |
| Acquisition of Preferred LP Units | (210,223 | ) | (66,455 | ) | ||
| Net cash used in investing activities | $ | (214,888 | ) | $ | (70,605 | ) |
| Cash flows from financing activities | ||||||
| Proceeds from exercise of warrants | $ | - | $ | 3,580,500 | ||
| Repayment of debt | (2,000,000 | ) | (3,000,000 | ) | ||
| Dividends paid | (5,550,656 | ) | (4,267,452 | ) | ||
| Payments in lieu of dividends on RSUs | (68,146 | ) | (60,966 | ) | ||
| Net cash used in financing activities | $ | (7,618,802 | ) | $ | (3,747,918 | ) |
| Net increase in cash and cash equivalents | $ | 173,525 | $ | 341,158 | ||
| Cash and cash equivalents, Beginning of period | 3,888,465 | 1,816,868 | ||||
| Cash and cash equivalents, End of period | $ | 4,061,990 | $ | 2,158,026 | ||
Contact Information:
Curtis Krawetz
Manager, Investor Relations
403.221.7305
www.alarisroyalty.com