CALGARY, ALBERTA--(Marketwire - June 1, 2011) - Alaris Royalty Corp. ("Alaris" or the "Corporation") (TSX:AD) today announced its results for the three months ended March 31, 2011. The results are the Corporation's first prepared under International Financial Reporting Standards ("IFRS").
Total dividends paid for the three months ended March 31, 2011 equaled $0.255 per share ($4,267,452 in aggregate).
Revenues for the three months ended March 31, 2011 were as expected at $5.6 million compared to $4.2 million in the prior year period. The increase of 34% was due to the addition of two new private company partners, KMH Limited Partnership ("KMH") in May 2010 and Solowave Design Limited Partnership ("Solowave") in December 2010. KMH added $0.22 million and Solowave added $1.25 million of revenue in the quarter.
For the three months ended March 31, 2011, the Corporation recorded net income of $2.8 million and EBITDA of $4.5 million compared to net income of $1.9 million and EBITDA of $3.2 million in the prior year period. The increase in net income and EBITDA from the previous quarter is as a result of receiving a full quarter of revenues from KMH and Solowave with expenses of the Corporation remaining consistent quarter over quarter.
|Reconciliation of Net Income to EBITDA (thousands)||3 months ending|
March 31, 2011
|3 months ending|
March 31, 2010
|Adjustments to Net Income:|
|Deferred income tax expense||1,209||782|
"We're pleased to provide our first quarter of financial statements under IFRS. While there were a number of changes to the balance sheet (including estimates of the fair value of preferred partnership units held by the Corporation and differences in calculating deferred income tax balances), the simplicity of our quarterly operating results means our financial statements continue to be simple ones to follow and understand." said Darren Driscoll, CFO, Alaris Royalty Corp. "We continue to see positive results out of each of our partner companies in 2011 and look for continued overall organic growth to add to our strategy of adding new Partners".
Alaris' agreements with the its partner companies ("Private Company Partners" or "Partners") provide for payments estimated to provide the Corporation approximately $19.0 million in 2011 without any assumptions around the reinvestment of the proceeds from the recently announced transaction (the "Transaction") involving LifeMark Health Limited Partnership ("LifeMark") that reduced Alaris' interest in LifeMark at a significant gain. Management expects to reinvest all of the proceeds from the Transaction in 2011 and will provide updated revenue figures as new partnerships are entered into. In the next quarter, current Partner agreements call for approximately $5.2 million of revenues for Alaris. The Corporation's general and administrative expenses are estimated to be $625,000 per quarter, including all public company costs. Alaris' senior debt facility is drawn to $26.2 million and the interest rate on that debt was 6.5% at March 31, 2011.
The Condensed 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.
The term EBITDA is a financial measure used in this news release that is not a standard measure under 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.
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 and business prospects and opportunities of the Corporation and the Private Company Partners, the general economy, 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 financial and operating performance of the Private Company Partners in 2011, the revenues to be received by Alaris and its general and administrative expenses in its upcoming fiscal quarters, and management's expectations and intentions concerning the use of the proceeds from the Transaction.
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 2011and 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 2011, 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 Alaris will experience positive resets to its annual distributions from its Private Company Partners in 2011, that the Transaction will close , 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 considered 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, 2010, 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||January 1|
|Cash and cash equivalents||$||2,158,026||$||1,816,868||$||3,826,000|
|Trade and other receivables||182,835||688,514||2,470|
|Preferred LP Units||5||184,710,000||182,907,000||122,286,000|
|Investment tax credit receivable||6||10,922,393||10,922,393||11,030,007|
|Deferred income taxes||6||16,824,472||18,158,192||22,454,167|
|Loans and borrowings||9||2,183,333||-||9,350,000|
|Loans and borrowings||9||24,016,667||29,200,000||19,700,000|
|Accumulated other comprehensive income||23,869,635||22,350,157||9,766,188|
|Total Liabilities and Equity||$||227,898,832||$||227,802,738||$||172,846,743|
|Alaris Royalty Corp.|
|Condensed consolidated statement of comprehensive income (unaudited)|
|For the three months ended March 31|
|Royalties and distributions||5||$||5,635,319||$||4,192,862|
|Interest and other||-||1,160|
|Salaries and benefits||223,337||218,212|
|Corporate and office||277,140||211,069|
|Legal and accounting fees||113,049||103,739|
|Non-cash stock-based compensation||10||513,065||449,148|
|Depreciation and amortization||47,171||47,130|
|Earnings from operations||4,461,557||3,164,724|
|Earnings before taxes||4,042,157||2,681,073|
|Deferred income tax expense||6||1,116,653||782,407|
|Other comprehensive income|
|Net change in fair value of available-for-sale financial assets||5||1,736,546||-|
|Tax impact of change in fair value||(217,068||)||-|
|Other comprehensive income for the period, net of income tax||1,519,478||-|
|Total comprehensive income for the period||$||4,444,982||$||1,898,666|
|Earnings per share|
|Basic earnings per share||$||0.17||$||0.16|
|Fully diluted earnings per share||$||0.17||$||0.16|
|Weighted average shares outstanding|
|Alaris Royalty Corp.|
|Condensed consolidated statement of cash flows (unaudited)|
|For the three months ended March 31|
|Cash flows from operating activities|
|Earnings from the period||$||2,925,504||$||1,898,666|
|Deferred income taxes||6||1,116,653||782,407|
|Depreciation and amortization||7||47,171||47,130|
|Non-cash stock based compensation||10||513,065||449,148|
|-trade and other receivables||505,679||(155,714||)|
|-trade and other payables||(1,114,034||)||(591,673||)|
|Cash generated from operating activities||4,579,081||2,879,078|
|Net cash from operating activities||$||4,159,681||$||2,395,427|
|Cash flows from investing activities|
|Acquisition of equipment||(4,150||)||-|
|Acquisition of Preferred LP Units||(66,455||)||(50,000||)|
|Net cash used in investing activities||$||(70,605||)||$||(50,000||)|
|Cash flows from financing activities|
|Proceeds from exercise of warrants||8||3,580,500||2,216,625|
|Repayment of Senior debt||9||(3,000,000||)||(950,000||)|
|Payments in lieu of dividends on RSUs||10||(60,966||)||(50,213||)|
|Net cash used in financing activities||$||(3,747,918||)||$||(1,204,630||)|
|Net increase in cash and cash equivalents||341,158||1,140,797|
|Cash and cash equivalents, Beginning of period||1,816,868||3,826,000|
|Cash and cash equivalents, End of period||$||2,158,026||$||4,966,797|