CALGARY, ALBERTA--(Marketwired - Nov. 8, 2016) -
NOT FOR DISTRIBUTION IN THE UNITED STATES. FAILURE TO COMPLY WITH THIS RESTRICTION MAY CONSTITUTE A VIOLATION OF UNITED STATES SECURITIES LAW.
Alaris Royalty Corp. ("Alaris" or the "Corporation") (TSX:AD) is pleased to announce its results for the three and nine months ended September 30, 2016. The results are prepared under International Financial Reporting Standards ("IFRS") as issued by the International Accounting Standards Board ("IASB").
2016 Third Quarter Highlights:
- Increased net cash from operating activities by 71% compared to the prior year period, +66.1% on a per share basis, a total of $15.5 million for the period in excess of the $14.7 million in dividends paid.
- Increased Normalized EBITDA by 6.1%, +3.1% on a per share basis.
- Increased gross revenue by 1.2%, -1.7% on a per share basis.
- The Corporation's fixed charge coverage ratio for the last twelve months ending September 30, 2016 is 1.24:1 compared to our minimum bank covenant of 1:1.
- Exited the Solowave Designs, LP ("Solowave") investment after six successful years as a partner. On gross capital contributions of $42.5 million, the Corporation received $31.4 million in distributions and sold its units for $44.6 million for total gross proceeds of $76.0 million and a net gain in the quarter of $1.6 million, and an IRR of 17%.
- Subsequent to period end, Agility Health, LLC ("Agility") restarted regular monthly distributions in October. Alaris also gave Agility notice of default in respect of, among other items, prior unpaid distributions and demanded the repurchase of its units within 90 days as well as payment of US$1.77 million of outstanding distributions.
- Subsequent to period end, Alaris contributed $18 million USD ($23.4 million CAD) to Matisia, LLC ("Matisia") which replaces approximately half of the revenue lost with the Solowave repurchase
- Year to date contributions of over $100 million and $275 million over the last 16 months.
"Q3 results produced improved cash flow, debt covenants and earnings metrics and our payout ratio for the quarter was 94%. With the resumption of the regular Agility distributions as well as the revenue from our new partner in the last month, our run rate payout ratio now sits at just above 100% without any return of capital or revenue collected from KMH, Group SM, Kimco or SCR. This equates to a dividend payment marginally above of our expected net cash from operations by approximately $155,000 per month. In addition to the anticipated resolutions on KMH, Group SM and Agility, as well as industry and operational improvements from SCR and Kimco respectively, we also expect distribution growth from our diversified portfolio as well as continued new capital deployment to decrease that payout ratio over the coming months. With the recent repurchase of our investment in Solowave, we have over $10 million in cash and debt covenants are well within allowable amounts. Current capacity on our debt facility as well as a significant amount of capital expected to return to us from our partner companies, leaves us with an ability to meet all of our growth objectives without the need for equity capital for the foreseeable future", said Steve King, President & Chief Executive Officer, Alaris.
|Per Share||Three months ending Sept 30||Nine months ending Sept 30|
|2016||2015||% Change||2016||2015||% Change|
|Net cash from operating activities||$0.43||$0.26||+66.1%||$1.15||$0.98||+17.2%|
|Weighted average basic shares outstanding (000's)||36,365||35,336||36,326||33,234|
|1Using the weighted average shares outstanding for the period.|
For the three and nine months ended September 30, 2016, the Corporation recorded earnings of $17.0 million and $44.9 million, EBITDA of $24.6 million and $63.9 million and Normalized EBITDA of $21.0 million and $60.5 million compared to earnings of $6.5 million and $37.3 million, EBITDA of $9.8 million and $50.2 million and Normalized EBITDA of $19.8 million and $48.7 million in the prior year periods. The increases in revenue, EBITDA and Normalized EBITDA can be attributed predominantly to the addition of five new partners since June 2015 (DNT Construction, LLC ("DNT"), Federal Resources Supply Company ("Federal Resources"), MAHC Holdings, LLC ("MAHC"), Sandbox Acquisitions LLC ("Sandbox") and M-Rhino Holdings, LLC, operating as Providence Industries ("Providence"), and follow on contributions to PF Growth Partners, LLC ("Planet Fitness"), Federal Resources and LMS Limited Partnership ("LMS"). The increase in net earnings is due to the new revenue streams and the prior year impairment of the KMH Limited Partnership ("KMH") units that reduced the 2015 figure. The results were also impacted by non-cash unrealized foreign exchange gains and losses in each period that are set out below in the reconciliation of earnings to EBITDA table below.
Net cash from operating activities per share exceeded dividends paid in the quarter by $0.81 million and increased as tax refunds in the US offset some of the distributions that were accrued and not received in the quarter. For the nine month period, cash flow from operations increased by 20% on a per share basis but was slightly less than dividends paid due to distributions accrued for certain Partners that were not received in the period. Those accrued distributions are expected to be paid in the next twelve months.
At each quarter end, the Corporation reviews the fair value of the preferred units in each of the Partners. At September 30, 2016, there were five changes to the fair values of the Partners (four increases and one decrease) resulting in a net CAD reduction of total preferred units of less than half of one percent (approximately $3.1 million CAD). For further clarity, these are not permanent impairments but rather regular changes to the value of the units required at each quarter end. Alaris bases its fair value on many factors including: 1) a discounted cash flow model for Partners that are expected to be Partners with Alaris over the long-term (based on estimates for annual growth or decline in annual distributions); 2) a redemption value (is the Corporation expecting a repurchase of its units); and 3) a liquidation value (based on an assessment as to whether there is a process that would see the business sold or recapitalized alongside a repurchase of Alaris' units). These regular quarterly changes (non-permanent) result in a change in the balance sheet accounts as well as a gain or loss in other comprehensive income on the income statement, which is non-cash and below the earnings line thus not impacting any earnings metrics. The (non-cash, temporary) fair value changes at September 30, 2016 were as follows: an increase to Labstat International, ULC's ("Labstat") units of $2.2 million CAD due to increased expectations on the variable portion of the 2016 distributions; an increase in the Planet Fitness units of $0.8 million USD as we get closer to an expected maximum reset for 2017; an increase in DNT's units of $1.6 million USD as we get closer to an expected reset for 2017; an increase in Federal Resources' units of $1.6 million USD as we get closer to an expected maximum preferred dividend for 2017; and a reduction to the Kimco units of $7.8 million USD due to decreased expectations for distributions for the remainder of 2016 and into 2017.
More information is provided in the Private Company Partner Update portion of the Corporation's Management's discussion and analysis for the period (a copy of which is available under Alaris' profile at www.sedar.com).
|3 months ending Sept 30||9 months ending Sept 30|
|Reconciliation of Earnings to EBITDA (thousands)||2016||2015||2016||2015|
|Adjustments to Earnings:|
|Income tax expense||6,028||2,387||14,340||10,389|
|Unrealized foreign exchange loss/(gain)||(2,074)||(14,037)||8,353||(22,682)|
|(Gain)/loss on reduction of Partner interests||(1,589)||-||(20,177)||(2,792)|
|Impairment of Partner interest||-||20,460||7,000||20,460|
|Penalties and fees||-||-||656||-|
Alaris is pleased to announce today that Mr. Michael Ervin has been promoted from VP Legal to Chief Legal Officer & Corporate Secretary. Mr. Ervin has been with Alaris since October 2013 and had previously been external legal counsel to Alaris for several years while working at Burnett, Duckworth & Palmer, LLP.
Ms. Elizabeth McCarthy has also been hired as VP, Legal. Prior to joining Alaris in October of 2016, Elizabeth spent 7 years working as a tax lawyer with Burnet, Duckworth and Palmer, LLP. Elizabeth received her Bachelor of Arts degree from the University of Calgary in 2006 and her Law Degree from the University of British Columbia in 2009 and was called to the Alberta Bar in 2010.
1) DNT, Federal Resources, PF Growth Partners, Sequel, Labstat, Providence, LMS, Sandbox and End of the Roll - These companies, representing 81% of our Q3 revenue, continue to operate at or above expectations. The majority of these companies (and therefore the majority of our portfolio) are performing above the upper collar of our distribution reset and have improved their earnings coverage ratios during the period.
2) KMH & Agility - Alaris continues to work to exit its partnerships with KMH & Agility. However, Alaris does not have step in rights relating to KMH (as it does with all other partners) due to the nature of certain requirements of regulatory bodies regarding certain licenses owned by KMH. These restrictions have made an exit more difficult than it would be with all other partners as Alaris has been relying on KMH and its lenders to arrange the sale of certain assets, which will generate the $28 million Alaris expects to receive. The process continues to progress toward closing and all stakeholders, including KMH and its senior lenders, still expect this to be resolved as previously disclosed.
Agility restarted the payment of regular distributions to Alaris in October but Alaris has also issued a notice of default for, among other items, prior unpaid distributions giving Agility 90 days to complete the repurchase of the Alaris units. Unlike with KMH, Alaris has full step-in rights relating to its investment in Agility where there has been an event of a default and Alaris' units are not repurchased. The Corporation currently expects a repurchase of its units at a premium to its investment cost and fair value as well as collection of the unpaid distributions.
No expectations on timing for both of these processes will be given and an update will only be provided when a definitive outcome is reached.
3) SM Group - As previously disclosed, SM is involved in an international legal dispute that has taken considerable capital and time resulting in challenges with its senior lenders and not having the cash flow to pay regular distributions to Alaris. All information provided to Alaris indicates that the process will be resolved favourably and should result in the repayment of Alaris' $17 million in promissory notes plus interest and fees on a loan, as well as unpaid distributions. A resolution alone, regardless of a cash award to SM, is expected to allow for the refinancing of SM's existing senior debt and the restart of regular monthly distributions as SM has remained profitable throughout. Due to the difficulty of predicting timing, an update on the legal dispute will only be given upon a definitive outcome being reached but based on communication with SM's management and legal counsel, the process is nearing conclusion.
4) SCR & Kimco - SCR and Kimco are both not paying current distributions to Alaris. SCR has no debt, owns all of its equipment, has a highly variable work force and has sufficient cash on its balance sheet to fund working capital that will be needed to fund the business on an eventual turnaround in the mining sector. The owners of SCR have done a great job of managing expenses and have returned to profitability in recent months, albeit at levels not sufficient to cover a distribution to Alaris. SCR has recently increased its work force after being awarded several new contracts as the industry is starting to recover.
Kimco began deferring distributions to Alaris in July 2015 when it breached certain financial covenants with its lender (a total of US$4.4 million is outstanding at September 30, 2016). The breach of covenant was due to operational performance relating to expenses and operating margin. Although the top-line of the business remains relatively flat, and the business remains profitable, it continues to underperform on profitability and still doesn't have the required availability on their bank line nor the free cash flow to make regular distributions to Alaris. Alaris has a strong relationship with Kimco's lenders and has recently been working with all parties to make certain changes to management at Kimco including the appointment of an independent third party to assist in the cash flow management of the business. Due to the decreased expectations for distributions from Kimco in 2016 and into 2017, Alaris has reduced the fair value by US$7.8 million this quarter.
Timing expectations for receiving a distribution (partial or full) for SCR and Kimco cannot be made at this time. Alaris will update the market when these expectations change but for now, Alaris is operating with the assumptions that it will not receive meaningful distributions from SCR and Kimco for the remainder of 2016 and into 2017 and the fair value calculations are reflective of this.
5) MAHC - MAHC has notified Alaris that it is close to completing a full sale of its business (the "MAHC Sale"), which would result in the repurchase of Alaris' units (the "MAHC Units") for a total of over US$18 million on Alaris' original investment of US$13.25 million (the "MAHC Contribution"). As contemplated at the time Alaris completed the MAHC Contribution, MAHC had been working on a full sale of their business prior to Alaris closing the MAHC Contribution in December 2015. If the sale was completed by June 1, 2016, the MAHC Units would have been repurchased at cost; however, since the transaction was not completed by June 1, 2016, the repurchase price for the MAHC Units on an exit event will be in line with the metrics for Alaris' other partners, which includes the payment of all distributions for the first three years of a partnership. The closing of the MAHC sale is subject to several conditions and cannot be guaranteed at this time. However, if approvals are granted it is expected to close in December 2016.
"With the majority of our portfolio performing at or above expectations and supporting our current dividend stream, we look forward to announcing resolutions on lingering issues as well as the deployment of new capital. Each of those initiatives will reduce portfolio risk and put the Company in a position to continue with our long track record of dividend growth", said King.
Based on Alaris' current agreements with its partners, it expects revenues of approximately $93.7 million for 2016 (no revenue to be accrued for Kimco and SCR in the 4th quarter, only amounts received will be recorded). For the fourth quarter of 2016, those same agreements provide for revenues of approximately $21.9 million for the Corporation. Annual general and administrative expenses are currently estimated at $8.3 million annually and include all public company costs.
After the restart of the Agility distributions and the addition of Matisia in October, the Corporation's current run-rate payout ratio is just over 100% with no distributions being collected from SM, Kimco, SCR & KMH. In addition, the gains on the LifeMark and Solowave redemptions have the bank covenants well within allowable levels. The table below sets out our estimated current run rate of net cash from operating activities alongside the after-tax impact of the various resolutions management is working toward:
|Run rate financial summary (1)||$000's||$ Share||Comments|
|Interest & Taxes||(17,400)||(0.48)|
|Net Cash from Operations||56,985||1.57|
|Annual Difference||($1,880)||($0.05)||Approximately $155K per month|
|Other Considerations:||Cash Flow $000's||$ Share|
|KMH||+$1,250||+$0.03||Receive $28 million for units, reduce debt and interest expense|
|SM||+5,760||+0.16||Restart distributions & receive $27 million of proceeds|
|SCR (2)||+5,410||+0.15||Every $2 million in distributions received is $0.05/share|
|Kimco (3)||+5,080||+0.14||Every $2 million in distributions received is $0.04/share|
|New Investments||+1,515||+0.05||Every $20 million deployed @ 15%|
|Distribution Resets||+1,400||+0.04||Effective Jan 1/17|
|(1) The above table has been included for illustrative purposes, based on management's current expectations and assumptions. It should not be taken as a guarantee of future performance. See "Forward-Looking Statements" below for information that could cause future results to vary.|
|(2) Represents the impact on cash flow from a full year distribution being paid by SCR.|
|(3) Represents the impact on cash flow from a full year distribution being paid by Kimco|
The senior debt facility was drawn to $140.4 million at September 30, 2016 and was reduced by $22 million subsequent to period end, leaving the Corporation with approximately $100 million of availability based on current covenants. The annual interest rate on that debt was approximately 4.95% at September 30, 2016 and remains at that level today.
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.
Conference Call Details
Alaris management will host a conference call at 9am MST (11am EST), Wednesday, November 9, 2016 to discuss the financial results for the three and nine months ended September 30, 2016 and the outlook for the Corporation. Participants can access the conference call by dialing toll free 1-866-223-7781 (or 1-416-340-2216). Alternatively, to listen to this event online, please enter http://www.gowebcasting.com/7984 in to your web browser and follow the prompts given. Please connect to the call or log into the webcast at least 10 minutes prior to the beginning of the event.
For those unable to participate in the conference call at the scheduled time, it will be archived for replay until 11:59pm EST November 16, 2016. You can access the replay by dialing toll free 1-800-408-3053 (or 1-905-694-9451) and entering the passcode 1169148. The webcast will be archived for 90 days and is available for replay by using the same link as above or by clicking on the link we'll have stored under the "Investor" section. "Presentation and Events", on our website. An updated corporate presentation will also be posted to this section of Alaris' website within 24 hours.
About the Corporation
Alaris provides alternative financing to private companies ("Partners") in exchange for royalties or distributions with the principal objective of generating stable and predictable cash flows for dividend payments to its shareholders. 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 the owner's common equity position.
The terms EBITDA, Normalized EBITDA, and Payout Ratio are financial measures used in this news release that are not standard measures under International Financial Reporting Standards ("IFRS"). The Corporation's method of calculating EBITDA, Normalized EBITDA, and Payout ratio may differ from the methods used by other issuers. Therefore, the Corporation's EBITDA, Normalized EBITDA and Payout Ratio may not be comparable to similar measures presented by other issuers.
Payout Ratio: Payout ratio refers to Alaris' total dividend per share paid over a period, divided by the net cash from operating activities per share generated over the same period. The payout ratio is sometimes referred to as "run-rate payout ratio". The "run-rate" payout ratio calculation is based on the dividend expected to be paid over the next twelve months divided by the net cash from operating activities expected over the same twelve months. In this case, net cash from operating activities is based on revenue less operating expenses, interest and taxes expected to be collected and paid over that same twelve month period. No accrual of revenue is included in the payout ratio or "run-rate" payout ratio calculations.
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.
Normalized EBITDA refers to EBITDA excluding items that are non-recurring in nature and is calculated by adjusting for non-recurring expenses and gains to EBITDA. Management deems non-recurring items to be unusual and/or infrequent items that the Corporation incurs outside of its common day-to-day operations. For the period ended September 30, 2016, the gain on the redemption of the LifeMark, Solowave and Killick units (in 2015), the impairment of the KMH units, the write off of the interest on the KMH promissory note, one-time penalties and fees related to the CRA GST audit and the unrealized foreign exchange gains and losses are considered by management to be non-recurring charges. Adjusting for these non-recurring items allows management to assess EBITDA from ongoing operations.
The terms EBITDA and Normalized 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.
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 future financial position or results of the Corporation, business strategy, and plans and objectives of or involving the Corporation 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 in 2016, the revenues/contractual distributions to be received by Alaris in 2016 (annually and quarterly, and over the next 12 months), its general and administrative expenses in 2016 and on an annual basis, the cash requirements of the Corporation in 2016 and over the next 12 months, the collection of deferred and/or accrued distributions, the repurchase of the MAHC units, and the impact of resolving issues with KMH, Kimco, SCR and Group SM. To the extent any forward-looking statements herein constitute a financial outlook, 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 12 months and how that will affect Alaris' business and that of its 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 over the coming year, that interest rates will not rise in a material way over the next 12 to 24 months, that the Partners will continue to make distributions to Alaris as and when required, Alaris will achieve the benefits of any concessions or relief measures provided to any Partners, certain Partners that are not currently paying Alaris will restart Distributions in part or in full, that the businesses of the Partners will continue to grow, that the Corporation will experience positive resets to its annual royalties and distributions from certain of its Partners in 2017, more private companies will require access to alternative sources of capital, 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 remain stable and that the Canadian and U.S. dollar trading pair will remain in a range of approximately plus or minus 10% over the next 12 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.
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 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 Partners; reliance on key personnel; general economic conditions; 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 in a timely fashion, or at all; a change in the ability of the Partners to continue to pay Alaris' preferred distributions; a change in the unaudited information provided to the Corporation; 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 the Corporation's Management Discussion and Analysis for the year ended December 31, 2015, which is filed under the Corporation's profile at www.sedar.com and on its website at www.alarisroyalty.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)
|Cash and cash equivalents||$ 67,822,062||$ 20,990,702|
|Income tax receivable||4,174,899||3,528,509|
|Trade and other receivables||20,780,517||10,577,985|
|Investment tax credit receivable||2,290,000||3,796,888|
|Promissory note receivable||18,187,500||11,750,000|
|Promissory note receivable||7,234,945||7,234,945|
|Investments at fair value||664,319,940||704,109,367|
|Investment tax credit receivable||3,901,677||4,716,919|
|Total Assets||$ 813,797,104||$ 788,210,445|
|Accounts payable and accrued liabilities||$ 3,378,244||$ 2,138,132|
|Foreign exchange contracts||354,893||5,345,488|
|Income tax payable||-||1,841,634|
|Deferred income taxes||19,809,608||19,490,794|
|Loans and borrowings||140,471,553||77,447,075|
|Total Liabilities||$ 168,919,665||$ 111,163,992|
|Share capital||$ 617,892,818||$ 617,626,773|
|Fair value reserve||(23,936,119)||1,874,903|
|Total Equity||$ 621,726,990||$ 677,046,453|
|Total Liabilities and Equity||$ 790,646,655||$ 788,210,445|
Alaris Royalty Corp.
Condensed consolidated statement of comprehensive income / (loss) (unaudited)
For the three and nine months ended September 30
|Three months ended September 30||Nine months ended September 30|
|Royalties and distributions||$ 22,867,234||$ 22,824,948||$ 71,647,755||$ 59,178,710|
|Interest and other||427,137||201,379||1,126,095||677,975|
|Gain on partner redemption||1,588,747||-||20,176,754||2,792,457|
|Realized gain/(loss) on foreign||308,091||(1,297,300)||(1,754,239)||(2,389,206)|
|Unrealized gain/(loss) on foreign exchange contracts||596,829||(2,646,919)||4,990,595||(3,263,885)|
|Total Other income / (loss)||2,493,667||(3,944,219)||23,413,110||(2,860,634)|
|Salaries and benefits||623,132||510,339||2,760,925||2,316,018|
|Corporate and office||428,219||636,835||2,639,463||2,238,042|
|Legal and accounting fees||540,982||609,256||1,837,072||1,518,193|
|Non-cash stock-based compensation||1,026,196||191,610||3,897,824||2,646,387|
|Bad debt expense||-||3,570,277||853,122||3,570,277|
|Impairment of preferred units||-||20,460,000||7,000,000||20,460,000|
|Depreciation and amortization||69,337||63,693||207,518||140,515|
|Earnings / (loss) from operations||23,100,172||(6,959,902)||76,991,036||24,106,619|
|Unrealized foreign exchange loss/(gain)||(1,476,958)||(16,684,292)||13,343,726||(25,946,115)|
|Earnings before taxes||23,053,939||8,853,031||59,248,480||47,700,447|
|Current income tax expense||4,646,558||2,542,484||5,593,102||5,984,185|
|Deferred income tax expense / (recovery)||1,381,430||(155,705)||8,746,534||4,405,056|
|Total income tax expense||6,027,988||2,386,779||14,339,636||10,389,241|
|Other comprehensive income|
|Transfer on redemption of Investments at Fair Value||(8,712,747)||5,460,000||(27,399,056)||2,667,543|
|Net change in fair value of Investments at Fair Value||(3,168,540)||-||(3,833,225)||2,176,700|
|Tax effect of items in other comprehensive income||529,565||(69,383)||5,421,259||(1,172,189)|
|Foreign currency translation differences||422,539||9,538,953||(11,038,447)||14,953,564|
|Other comprehensive income / (loss) for the period, net of income tax||(10,929,183)||14,929,570||(36,849,469)||18,625,618|
|Total comprehensive income for the period||6,096,768||21,395,822||8,059,375||55,936,824|
|Earnings per share|
|Basic earnings per share||$0.47||$0.18||$1.24||$1.12|
|Fully diluted earnings per share||$0.46||$0.18||$1.22||$1.10|
|Weighted average shares outstanding|
Alaris Royalty Corp.
Condensed consolidated statement of cash flows (unaudited)
For the nine months ended September 30
|Cash flows from operating activities|
|Earnings from the year||$||44,908,844||$||37,311,206|
|Deferred income tax expense||8,746,534||4,405,056|
|Depreciation and amortization||207,518||140,515|
|Bad debt expense||853,122||3,570,277|
|Impairment of preferred units||7,000,000||20,460,000|
|Gain on partner redemption||(20,176,754)||(2,792,457)|
|Unrealized (gain) / loss on foreign exchange contracts||(4,990,595)||3,263,885|
|Unrealized foreign exchange (gain) / loss||13,343,726||(25,946,115)|
|Non-cash stock-based compensation||3,897,824||2,646,387|
|- trade and other receivables||(11,055,654)||(2,988,422)|
|- income tax receivable||(646,390)||-|
|- prepayments and deposits||418,936||(61,437)|
|- trade and other payables||(601,522)||3,296,871|
|Cash generated from operating activities||46,304,419||45,658,053|
|Net cash from operating activities||$||41,905,589||$||43,305,766|
|Cash flows from investing activities|
|Acquisition of equipment||$||(43,101)||$||(740,878)|
|Acquisition of preferred units||(83,644,331)||(153,815,710)|
|Proceeds from partner redemptions, reduction of interest||82,996,400||44,300,000|
|Promissory notes issued||(6,750,000)||(4,964,850)|
|Promissory notes repaid||312,500||3,265,000|
|Net cash used in investing activities||$||(7,128,532)||$ (111,956,438)|
|Cash flows from financing activities|
|New share capital, net of share issue costs||$||-||$ 109,637,852|
|Proceeds from exercise of options||-||1,205,035|
|Repayment of debt||(35,455,076)||157,000,000|
|Proceeds from debt||99,656,500||(150,800,000)|
|Deposits with CRA||(4,163,787)||(10,591,094)|
|Net cash from in financing activities||$||15,915,921||$||68,444,082|
|Net increase in cash and cash equivalents||$||50,692,979||$||(206,590)|
|Impact of foreign exchange on cash balances||(3,861,619)||1,315,188|
|Cash and cash equivalents, Beginning of period||20,990,702||13,483,524|
|Cash and cash equivalents, End of period||$||67,822,062||$||14,592,122|
Vice President, Investments and Investor Relations
Alaris Royalty Corp.
Chief Financial Officer
Alaris Royalty Corp.
President & CEO
Alaris Royalty Corp.