Alaris Equity Partners Income Trust (
"Alaris" or
the
"Trust") (TSX: AD.UN) is pleased to announce a
follow-on investment of US$65.0 million (the
“BCC
Contribution”) into Body Contour Centers LLC
(
“BCC”), doing business as Sono Bello. Following
the BCC Contribution, Alaris has invested US$156.0 million and is
collecting US$21.2 million in annualized distributions from BCC.
The US$65.0 million BCC Contribution was made in
exchange for preferred equity carrying an initial annualized
distribution of US$8.5 million, with the first reset to occur on
January 1, 2023. Proceeds from the BCC Contribution were used by
BCC to acquire the only licensee of the Sono Bello brand with 12
locations throughout the eastern United States and Texas.
Subsequent to the BCC Contribution and based on
proforma capital structure, the Earnings Coverage Ratio(1) remains
in excess of 2.0x. The Run Rate Payout Ratio(2) remains in the
range of 60% to 65%.
ABOUT ALARIS:
Alaris, through its subsidiaries, provides
alternative financing to private companies
("Partners") in exchange for distributions,
dividends and interest (“Distributions”) with the
principal objective of generating stable and predictable cash flows
for dividend payments to its unitholders. Distributions from the
Partners are adjusted each year based on the percentage change 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.
NON-GAAP and Other Financial
Measures:
The terms Earnings Coverage Ratio, Run Rate
Payout Ratio and EBITDA (collectively the “Non-GAAP and
Other Financial Measures”) are financial measures used in
this news release that are not standard measures under
International Financial Reporting Standards
(“IFRS”). The Trust’s of calculating Earnings
Coverage Ratio, Run Rate Payout Ratio and EBITDA may differ than
from methods used by other issuers. Therefore, the Partners’
Earnings Coverage Ratio and the Trust’s Run Rate Payout Ratio and
EBITDA amounts may not be comparable to similar measures used by
other issuers.
(1) “Earning Coverage Ratio”
is financial measure that refers to the EBITDA of a Partner divided
by such Partner’s sum of debt servicing (interest and principal),
unfunded capital expenditures and distributions to Alaris.
Management believes that the earnings coverage ratio is a useful
metric in assessing our Partners’ continued ability to make their
contracted distributions.
(2) “Run Rate Payout
Ratio” is a Non-GAAP financial ratio that refers to Alaris’ total
distribution per unit expected to be paid over the next twelve
months divided by the free cash flow per unit. Run Rate Payout
Ratio is a useful metric for Alaris to track and to outline as it
provides a summary of the percentage of the free cash flow that can
be used to either repay senior debt during the next twelve months
and/or be used for additional investment purposes.
(3) “EBITDA” is a
Non-GAAP financial measure and refers to earnings determined in
accordance with IFRS, before depreciation and amortization,
interest expense (finance costs) and income tax expense. EBITDA is
used by management and many investors to determine the ability of
an issuer or a Partner to generate cash from operations. Management
believes EBITDA is a useful supplemental measure from which to
determine Partner’s ability to generate cash available for
servicing its loans and borrowings, income taxes and distributions
to unitholders.
FORWARD LOOKING STATEMENTS
This news release contains forward-looking
statements, including forward-looking statements within the meaning
of "safe harbor" provisions under applicable securities laws
(“forward-looking statements”). Statements other than statements of
historical fact contained in this news release may be
forward-looking statements, including, without limitation,
management's expectations, intentions and beliefs concerning: the
financial impact of the BCC Contribution including the impact on
Run Rate Payout Ratio; the amounts of the BCC Distributions and
adjustments. Many of these statements can be identified by words
such as "believe", "expects", "will", "intends", "projects",
"anticipates", "estimates", "continues" or similar words or the
negative thereof. Any forward-looking statements herein which
constitute a financial outlook or future-oriented financial
information (including the impact on Run Rate Payout Ratio) were
approved by management as of the date hereof and have been included
to provide an understanding of 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 24 months and how that
will affect Alaris’ business and that of its Partners (including,
without limitation, the ongoing impact of COVID-19) 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 continue to
stabilize from the economic downturn created by COVID-19 and will
not be detrimentally impacted over the next 12 months; interest
rates will not rise in a material way over the next 12 months; that
those Alaris Partners previously affected by COVID-19 will not see
a detrimental impact from COVID-19 over the next 12 months;
following a recovery from the COVID-19 impact, the businesses of
the majority of our Partners will continue to grow; the businesses
of new Partners and those of existing partners will perform in line
with Alaris’ expectations and diligence; 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 the Canadian and U.S. dollar trading pair will remain
in a range of approximately plus or minus 15% of the current rate
over the next 6 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 as well as prevailing economic conditions at the
time of such determinations.
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
Trust 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
ongoing impact of COVID-19 on the Trust and its Partners (including
which, if any, Partners may experience a slowdown or closure of its
business); the ability of our Partners and, correspondingly, Alaris
to meet performance expectations for 2022 and beyond as a result of
COVID-19 or otherwise; any change in the senior lenders under the
Facility’s outlook for Alaris’ business; management's ability to
assess and mitigate the ongoing impacts of COVID-19; the dependence
of Alaris on the Partners; reliance on key personnel; general
economic conditions, including the ongoing impact of COVID-19 on
the Canadian, U.S. and global economies; failure to complete or
realize the anticipated benefit of Alaris’ financing arrangements
with the Partners; a failure of the Trust or any Partners 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’
Distributions; a change in the unaudited information provided to
the Trust; a failure of a Partner (or Partners) to realize on their
anticipated growth strategies; a failure to achieve resolutions for
outstanding issues, including payment of any deferred
Distributions, with Partners on terms materially in line with
management’s expectations or at all; 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
Trust’s Management Discussion and Analysis and Annual Information
Form for the year ended December 31, 2020, which are filed under
the Trust’s profile at www.sedar.com and on its website at
www.alarisequitypartners.com.
This news release contains future-oriented
financial information and financial outlook information
(collectively, "FOFI") about increases to the Trust's net operating
cash per flow per unit and liquidity, each of which are subject to
the same assumptions, risk factors, limitations, and qualifications
as set forth above. Readers are cautioned that the assumptions used
in the preparation of such information, although considered
reasonable at the time of preparation, may prove to be imprecise
and, as such, undue reliance should not be placed on FOFI and
forward-looking statements. Alaris' actual results, performance or
achievement could differ materially from those expressed in, or
implied by, these forward-looking statements and FOFI, or if any of
them do so, what benefits the Trust will derive therefrom. The
Trust has included the forward-looking statements and FOFI in order
to provide readers with a more complete perspective on Alaris’
future operations and such information may not be appropriate for
other purposes. Alaris disclaims any intention or obligation to
update or revise any forward-looking statements, whether as a
result of new information, future events or otherwise, except as
required by law.
Readers are cautioned not to place undue
reliance on any forward-looking information contained in this news
release as a number of factors could cause actual future results,
conditions, actions or events to differ materially from the
targets, expectations, estimates or intentions expressed in the
forward-looking statements. 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 assumptions
reflected in the forward-looking statements contained herein are
reasonable, there can be no assurance that such expectations will
prove to be correct.
The forward-looking statements contained herein
are expressly qualified in their entirety by this cautionary
statement. The forward-looking statements included in this news
release are made as of the date of this news release and Alaris
does not undertake or assume any obligation to update or revise
such statements to reflect new events or circumstances except as
expressly required by applicable securities legislation.
Neither the TSX nor its Regulation
Services Provider (as that term is defined in the policies of the
TSX) accepts responsibility for the adequacy or accuracy of this
release.
For further information please
contact:
Investor Relations
ir@alarisequity.comP: (403) 260-1457Alaris
Equity Partners Income TrustSuite 250, 333 24th Avenue S.W.Calgary,
Alberta T2S 3E6www.alarisequitypartners.com
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