IBI Income Fund
TSX : IBG.UN

IBI Income Fund

August 03, 2005 19:41 ET

IBI Income Fund Announces Results for Second Quarter 2005

TORONTO, ONTARIO--(CCNMatthews - Aug. 3, 2005) - IBI Income Fund (TSX:IBG.UN)

Financial Highlights

- Revenue for the quarter ended June 30, 2005 increased 32.3% compared to the prior year period.

- Earnings before income taxes, interest and amortization increased 41.6% compared with the prior year period.

- Distributable cash was 4.3% higher than declared distributions.

IBI Income Fund (the "Fund") (TSX: IBG.UN) today announced its financial results for the quarter ended June 30, 2005 and the six months ended June 30, 2005. This period is the Fund's first second quarter reporting period, and, consequently, no comparative information is provided in the Fund's interim consolidated financial statements. Comparative information for the quarter ended June 30, 2004 and the six months ended June 30, 2004 is derived from the unaudited results of IBI Group Management Partnership, the entity which carried on 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 for the quarter ended June 30, 2005 was up $5.8 million compared with the quarter ended June 30, 2004. Year to date, revenue is up $11.6 million compared with the same period in 2004. The increase over the prior year periods 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 $4.5 million of the increase in the quarter and $9.6 million of the increase for the year to date. Revenue excluding revenue from the three acquired businesses was $1.3 million or 7% higher than the prior year quarter and $2.0 million or 5.6% higher than the prior year to date.

Net earnings of the Fund for the quarter were $2.5 million or $0.2467 per Unit (on a fully diluted basis) compared with $2.2 million for the quarter ended June 30, 2004. Year to date, net earnings were $2.7 million or $0.2638 per Unit (on a fully diluted basis) compared with $3.9 million for the same period in 2004.

Distributable Cash - During the quarter ended June 30, 2005, the Fund generated $2.95 million of distributable cash as compared with the amount anticipated in the Fund's prospectus for the quarter of $2.82 million. On a per Unit basis, distributable cash was $0.2934 for the quarter, compared with $0.2812 anticipated in the Fund's prospectus. This represents a 4.3% increase in distributable cash over what was anticipated in the Fund's prospectus and an actual payout ratio of 96% for the quarter. Year to date, the Fund has generated $5.86 million in distributable cash compared with $5.65 million in actual distributions declared and paid. This represents a payout ratio for the year to date of 96%.

Liquidity and Capital Resources - During the quarter ended June 30, 2005, the Fund had positive cash flow of $3.1 million. This positive cash flow was the result of an increase in current liabilities. Current assets were stable through the quarter at $43.3 million. Capital expenditures during the quarter were at $0.4 million.

Working capital levels have now stabilised and the Fund believes that it will be able to continue to finance distributions to Unitholders through the cash generated through operations.

Performance Highlights - Major achievements for the quarter include:

- generating distributable cash of 29.33 cents per Unit, which was 4.3% higher than declared distributions, which were in accordance with the amounts anticipated in the Fund's prospectus;

- achieving revenue growth of 32.3% over the prior year period, of which 24.5% was the attributable to the revenue of the three acquired firms; and

- achieving 41.6% increase in earnings before income tax, interest and amortization over the prior year period, of which 24.8% of this increase was attributable to the three acquired firms.

Selected Consolidated Financial Information and Reconciliation of Non-GAAP Measures



Three Three Six Six
months months months months
ended ended ended ended
June 30 June 30 June 30 June 30
2005 2004(1) 2005 2004(1)
Unaudited Unaudited Unaudited Unaudited
in thousands except
for per unit
amounts

Revenues $ 23,905 $ 18,069 $ 47,178 $ 35,532
----------------------------------------------
Earnings before income
taxes, interest
and amortization 3,604 2,545 7,228 4,790
----------------------------------------------
Net earnings before
non-controlling
interest $ 2,480 $ 2,217 $ 2,652 $ 3,988
----------------------------------------------
Basic and diluted net
earnings per Unit $ 0.2467 $ 0.2638
----------------------------------------------
Distributable Cash
Cash flow from operating
activities $ 8,332 $ 2,837
Add (deduct):

Change in non-cash
working capital (4,872) 3,758
Capital expenditures (392) (755)
Income taxes (66) 240
Taxes paid (53) (217)
----------------------------------------------

Distributable cash $ 2,949 $ 5,863
----------------------------------------------
Basic and diluted
distributable cash
per Unit (2) $ 0.2934 $ 0.5833
----------------------------------------------
Aggregate distributions
declared $ 2,827 $ 5,654
----------------------------------------------
Basic and diluted
aggregate distributions
declared per Unit (2) $ 0.2812 $ 0.5625
----------------------------------------------

(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.

(2) Distributable cash per Unit amounts are calculated by including
both the Class A partnership units and the Class B subordinated
partnership units in the denominator.


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. A reconciliation of distributable cash to cash flow from operation activities has been provided under the heading "Selected Consolidated Financial Information and Reconciliation of Non-GAAP Measures".

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.

Contact Information

  • IBI Income Fund
    Allan J. Kamerman
    230 Richmond Street West, 5th Floor, Toronto, ON M5V 1V6
    (416) 596-1930
    (416) 596-0644 (FAX)