Newport Partners Income Fund

December 14, 2006 17:00 ET

Newport Invests $14.75 Million in Further Consolidation of ATM Industry

EZEE to Acquire TRM Corp.'s ATM Assets in Canada

TORONTO, ONTARIO--(CCNMatthews - Dec. 14, 2006) -


Newport Partners Income Fund (TSX:NPF.UN) ("Newport" or "the Fund") announced today that its operating partnership, EZEE ATM LP ("EZEE"), Canada's second largest operator of non-financial institution automated teller machines ("ATMs"), has signed a definitive agreement to acquire the Canadian ATM assets of TRM Corp. (Q:TRMM)("TRM") for approximately $14.75 million. The final purchase price is subject to adjustments upon closing which is expected to occur in January 2007. The transaction, which is EZEE's thirteenth acquisition since its founding in 2001, will add approximately 1,500 operating ATM locations to EZEE's portfolio resulting in a total of approximately 3800 locations across Canada.

In accordance with the terms of the transaction, Newport will invest approximately $14.75 million cash into EZEE to acquire the Canadian ATM business of TRM Corp. The addition of the TRM ATM business to EZEE is expected to improve the gross profit from operations with little increase in general and administration expenses. The cash flows from the TRM investment are expected to produce a return on invested capital of 16 - 20%, consistent with Newport's target return for all investments.

"This acquisition increases our installation footprint in Canada by 65 percent and solidifies our position as a leading consolidator in this industry," noted Chris Chandler, President & CEO of EZEE. "At the same time it offers immediate benefits in terms of improved transaction margins; geographic diversification - particularly in the Ontario market; and ownership of one of the best known ATM brands in the country - Access Cash."

Following the completion of this transaction, Newport will have approximately $45 million invested in a100 percent equity interest in EZEE. This investment represents approximately 8 percent of the Fund's total invested capital.

"Chris and his team have identified a number of areas where cost reductions and increased profit margins can be achieved from the combination of these operations," added Peter Wallace, Newport's President & CEO. "We expect this acquisition and the implementation of these initiatives to give EZEE significant earnings momentum in 2007."


Newport is an unincorporated, open-ended trust created to hold through the Company's investment in Newport Partners Commercial Trust, interests in Newport Private Yield LP, ("NPY") a limited partnership established under the laws of the Province of Ontario. Newport began trading on the TSX on August 8, 2005 under the symbol NPF.UN.

Newport is a leading Canadian asset manager. Newport invests in the private business asset class -- a major growth engine of the Canadian economy. Our objective is to make long-term equity investments in leading private businesses that have a track record of strong earnings and potential for future growth. Newport's portfolio currently consists of 17 high-quality businesses representing a diverse cross-section of the Canadian economy. Newport unitholders participate in the cash flows, growth and diversification of the portfolio through monthly distributions. Newport's management has decades of investment experience and a significant ownership position.

The terms "EBITDA", "Distributable Cash" and "Invested Capital" (collectively the "Non-GAAP Measures") are financial measures used in this release that are not standard measures under Canadian GAAP. Newport's method of calculating Non-GAAP Measures may differ from the methods used by other issuers. Therefore, Newport's Non-GAAP Measures, as presented in this release may not be comparable to similar measures presented by other issuers.

EBITDA refers to net earnings of Newport and NPY determined in accordance with generally accepted accounting principles, before depreciation and amortization, net of gain or loss on disposal of capital assets, interest expense and income tax expense. Management believes that EBITDA is a useful supplemental measure of performance and is the primary basis on which management assesses financial performance and cash available for debt service, working capital, capital expenditures, income taxes and distributions.

Distributable Cash is not a standard measure under GAAP and is generally used by Canadian income funds as an indicator of financial performance. The method of calculating Newport's Distributable Cash may differ from similar computations as reported by other similar entities and, accordingly, may not be comparable to distributable cash flow as reported by such entities. Newport's method of calculating Distributable Cash is disclosed in its third quarter 2006 Management Discussion and Analysis. Management believes that Distributable Cash is a useful supplemental measure that provides investors with information on cash available for distribution.

Invested capital includes the cost to acquire the equity interest in an investment and any monies advanced to repay existing long-term debt. It excludes transaction costs and any working capital provided to the invested business.

Investors are cautioned that the Non-GAAP Measures are not alternatives to measures under GAAP and should not, on their own, be construed as an indicator of Newport's or NPY's performance or cash flows, a measure of liquidity or as a measure of actual return on the Units.

Certain statements in this news release may include "forward-looking" statements that relate to future events or future performance and reflect management's expectations and assumptions regarding the growth, results of operations, performance and business prospects and opportunities of Newport and the operating partnerships in which it holds an ownership interest (the "Operating Partnerships"). Such forward-looking statements reflect management's current beliefs and are based on information currently available to management of Newport and the Operating Partnerships. In some cases, forward-looking statements can be identified by terminology such as "may", "will", "should", "expect", "plan", "anticipate", "believe", "estimate", "predict", "potential", "continue" or the negative of these terms or other similar expressions concerning matters that are not historical facts. In particular, statements regarding the future operating results and economic performance of Newport and the Operating Partnerships are forward-looking statements. A number of factors could cause actual events or results to differ materially from the events and results discussed in the forward-looking statements. In evaluating these statements, prospective purchasers should specifically consider various factors, including the risks outlined under "Risk Factors" in Management's Discussion and Analysis, which may cause actual events or results to differ materially from any forward-looking statement. Although the forward-looking statements are based on what management of Newport and the Operating Partnerships consider to be reasonable assumptions based on information currently available to it, there can be no assurance that actual events or results will be consistent with these forward-looking statements, and management's assumptions may prove to be incorrect. These forward-looking statements are made as of the date of this news release, and Newport does not assume any obligation to update or revise them to reflect new events or circumstances.

Contact Information