IBI Income Fund

IBI Income Fund

March 28, 2005 18:51 ET

IBI Income Fund Announces Results For Fiscal Year 2004


NEWS RELEASE TRANSMITTED BY CCNMatthews

FOR: IBI INCOME FUND

TSX SYMBOL: IBG.UN

MARCH 28, 2005 - 18:51 ET

IBI Income Fund Announces Results For Fiscal Year 2004

TORONTO, ONTARIO--(CCNMatthews - March 28, 2005) - IBI Income Fund (the
"Fund") (TSX:IBG.UN) today announced its financial results for the
period from the closing of its initial public offering on August 31,
2004 to December 31, 2004. This period is the Fund's first annual
reporting period, and, consequently, no comparative information is
provided in the Fund's consolidated financial statements. Comparative
information for the four months ended December 31, 2003 is derived from
the unaudited results of IBI Group Management Partnership, the entity
which carried the business now carried on by the Fund through IBI Group
prepared on a pro forma basis reflecting the new financial structure of
the Fund. Such information is for reference purposes only and is not
intended to represent a comprehensive comparison of the consolidated
financial results.

Revenue - Revenue for the four months ended December 31, 2004 was $30.7
million compared to $22.7 million for the four months ended December 31,
2003. The increase in revenue arose primarily due to the results of the
three businesses acquired prior to the closing of the Fund's IPO, being
Cumming Cockburn Limited, CCL Consultants Inc. and Marshall Cummings &
Associates. Revenue from these three businesses accounted for $6.6
million of the increase. Revenue excluding revenue from the three
acquired businesses was $1.3 million or 5.9% higher than the prior year
period.

Net (loss) earnings - Net (loss) earnings of the Fund for the period
were $(0.5) million or $(0.0494) per Unit (on a fully diluted basis)
compared with $2.9 million for the comparable period. The reduction in
net earnings is primarily the result of the amortization of the
intangible assets in the current period.

Distributable Cash - During the period ended December 31, 2004, the Fund
generated $3.78 million of distributable cash as compared with the
amount anticipated in the Fund's prospectus for a four month period of
$3.77 million. On a per Unit basis, distributable cash was $0.3756 for
the period, compared with $0.3750 anticipated in the Fund's prospectus.
This represents a 0.2% increase in distributable cash over what was
anticipated in the Fund's prospectus.

Liquidity and Capital Resources - During the period ended December 31,
2004, the Fund had negative cash flow of $16.9 million. This was
expected as the Fund commenced operations on August 31, 2004 without any
non-cash working capital and now has $30.7 million in current assets and
$14.4 million of current liabilities excluding bank indebtedness.
Capital expenditures during the period were as expected at $0.48
million. This cash outflow was funded out of the Fund's initial cash
balance on the closing of the IPO of $9.5 million and the Fund's credit
facility.

It is anticipated that working capital levels will stabilise in the
first quarter of 2005 and that the Fund will be able to finance
distributions to Unitholders through the cash generated through
operations. Capital expenditures should remain at a consistent level,
with expected expenditures in 2005 to be $1.3 million.

Declared Distributions - On January 20, 2005, a distribution of $0.09375
per Unit was declared to each Unitholder of record at January 31, 2005
which was paid on March 2, 2005. In addition, on January 20, 2005 IBI
Group declared a distribution of $0.05625 per Class B subordinated
partnership unit of IBI Group (representing 60% of the amount declared
on each Unit of the Fund) payable to each holder of Class B subordinated
partnership units of record at January 31, 2005 which was paid on March
2, 2005. On February 18, 2005, a distribution of $0.09375 per Unit was
declared to each Unitholder of record at February 28, 2005 which is
payable on March 31, 2005. In addition, on February 18, 2005 IBI Group
declared a distribution of $0.05625 per Class B subordinated partnership
unit of IBI Group (representing 60% of the amount declared on each Unit
of the Fund) payable to each holder of Class B subordinated partnership
units of record at February 28, 2005 which is payable on March 30, 2005.

Highlights of the Successful Performance - Major achievements for the
period from the closing of its initial public offering on August 31,
2004 to December 31, 2004 include:

- the objectives of the initial period have been attained with the
retention of existing clients, extension to mandates of existing
projects and the award of some 800 new projects;

- the retention of professional staff, and management of IBI Group and
the three acquired firms;

- the integration of operations of the three acquired firms with IBI;

- the election of additional Directors and Associate Directors of IBI
Group Management Partnership, who now total 44 compared with 39 on the
closing of the Fund's initial public offering; and

- the increase in the backlog from the equivalent of approximately seven
months at the time of the closing of the Fund's initial public offering
to the current backlog in excess of eight months work.

Selected Consolidated Financial Information



For the For the
For the period from period from
period from August 31 September 1
August 31 to to to
in thousands September 30 4th Quarter December 31 December 31
except for per 2004 2004 2004 2003(1)
unit amounts Unaudited Unaudited Unaudited
---------------------------------------------------------------------

Revenues $ 7,717 $ 22,963 $ 30,680 $ 22,734
---------------------------------------------------------------------
Earnings before income
taxes, interest and
amortization $ 1,353 $ 3,141 $ 4,494 $ 3,636
---------------------------------------------------------------------
Net earnings (loss)
before non-controlling
interest $ 643 $ (1,140) $ (496) $ 2,933
---------------------------------------------------------------------

Basic and diluted net
earnings (loss) per
Unit $ 0.0640 $ (0.1134) $ (0.0494)
---------------------------------------------------------------------


Distributable Cash
Earnings before income
taxes, interest and
amortization $ 1,353 $ 3,141 $ 4,494
---------------------------------------------------------------------
Capital expenditures (33) (451) (484)
---------------------------------------------------------------------
Interest - (36) (36)
---------------------------------------------------------------------
Taxes paid (29) (169) (198)
---------------------------------------------------------------------
Distributable cash $ 1,291 $ 2,485 $ 3,776
---------------------------------------------------------------------
Basic and diluted
distributable cash
per Unit $ 0.1284 $ 0.2472 $ 0.3756
---------------------------------------------------------------------
Aggregate distributions
declared $ 942 $ 2,827 $ 3,769
---------------------------------------------------------------------
Basic and diluted
aggregate distributions
declared per Unit $ 0.0937 $ 0.2812 $ 0.3750
---------------------------------------------------------------------
Total assets $ 134,252 $ 145,949 $ 145,949
---------------------------------------------------------------------


(1) The results of operations of IBI Group Management Partnership have
been adjusted on a pro forma basis to reflect the Fund's current
structure.

Non-GAAP Measures - Distributable Cash

Distributable cash does not have a standardized meaning prescribed by
GAAP, but is a measure generally used by Canadian open-ended income
funds as an indicator of financial performance. The Fund defines
distributable cash as net earnings before interest, depreciation,
amortization, income taxes, and after interest paid, capital
expenditures, taxes paid and contributions to any reserves that the
Trustees of the Fund deem to be reasonable and necessary for the
operation of the Fund.

The Fund's method of calculating distributable cash may differ from
similar computations as reported by other similar entities and,
accordingly, may not be comparable to distributable cash as reported by
such entities. The Fund believes that its distributable cash is a useful
supplemental measure that may assist prospective investors in assessing
the return on their investment in Units.

FORWARD-LOOKING STATEMENTS

Certain statements in this press release may constitute
"forward-looking" statements which involve known and unknown risks,
uncertainties and other factors which may cause actual results,
performance or achievements of the Fund to be materially different from
any future results, performance or achievements expressed or implied by
such forward-looking statements. When used in this press release, such
statements use such words as "may", "will", "expect", "believe",
"anticipate", "project", "plan" and other similar terminology. The risks
and uncertainties are detailed from time to time in reports filed by the
Fund with the securities regulatory authorities in all of the provinces
and territories of Canada to which recipients of this press release are
referred for additional information concerning the Fund, its prospects
and the risks and uncertainties relating to the Fund and its prospects.
New risk factors may arise from time to time and it is not possible for
management to predict all of those risk factors or the extent to which
any factor or combination of factors may cause actual results,
performance and achievements of the Fund to be materially different form
those contained in forward-looking statements. Given these risks and
uncertainties, investors should not place undue reliance on
forward-looking statements as a prediction of actual results.

The forward-looking information contained in this press release is
current only as of the date of the press release. There should not be an
expectation that such information will in all circumstances be updated,
supplemented or revised whether as a result of new information, changing
circumstances, future event or otherwise.


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Contact Information

  • FOR FURTHER INFORMATION PLEASE CONTACT:
    IBI Income Fund
    Allan J. Kamerman
    (416) 596-1930
    230 Richmond Street West, 5th Floor
    Toronto, ON M5V 1V6