Q2 Financial Results Outpace Prior Year Twelve Month Trailing Free Cash Flow less Maintenance Capital Expenditures Payout Ratio Strengthens to 58%
WINNIPEG, MB, Aug. 12, 2021 /CNW/ - Exchange Income Corporation (TSX: EIF) ("EIC" or the "Corporation") a diversified, acquisition-oriented company focused on opportunities in the aviation, aerospace and manufacturing sectors, reported its financial results for the three and six month period ended June 30, 2021. All amounts are in Canadian currency.
Q2 Financial Highlights
- Generated Revenue of $322 million, an increase of $78 million or 32% compared to Q2 2020
- Earned Consolidated EBITDA of $81 million, representing growth of $19 million or 31% compared to Q2 2020
- Produced Adjusted Net Earnings of $20 million or $0.53 per share, an improvement of $14 million or 250% over Q2 2020
- Free Cash Flow less Maintenance Capital Expenditures was $37 million, rising by $11 million or 44% from Q2 2020
- Trailing Twelve Month Free Cash Flow less Maintenance Capital Expenditures payout ratio improved to 58% from 76% in Q2 2020
- Completed a bought deal financing of common shares that provided gross proceeds of $88 million, inclusive of the over-allotment exercised by the underwriters
Highlights Subsequent to Quarter End
- Acquired Carson Air Ltd., the primary provider of fixed wing air ambulance services in British Columbia, for $61 million
- Acquired Macfab Manufacturing Inc., a precision manufacturing company in Ontario that is closely aligned with Ben Machine's operations, for $11 million
- Closed a $144 million bought deal offering of convertible debentures, including the exercise of the over-allotment by the underwriters
- Provided notice of the Corporation's intent to call the 7 year 5.25% convertible debentures that are due on June 30, 2023
- Extended the maturity of the Corporation's credit facility to August 2025
CEO Commentary
Mike Pyle, CEO of EIC, commented, "The second quarter of 2021 marks the first time that the comparative quarter was also a quarter that was fully impacted by the pandemic. As we move forward, I am struck by how well our businesses and people have adapted to the conditions imposed by the pandemic. All of our key metrics, including Revenue, EBITDA and Adjusted Net Earnings, have improved by more than 30% compared to the previous year and are trending towards those of Q2 2019. I would like to note one specific achievement of which I am very pleased. Our Trailing Twelve Month Free Cash Flow less Maintenance Capital Expenditures payout ratio has fallen below 60% and, at 58%, is getting close to the Q4 2019 figure. But these achievements really only tell half the story. While our dedicated subsidiary management focused on the execution of their plans in the current period, our leadership teams also remained keenly attentive to the future, growing the business through acquisition and taking advantage of opportunities in the capital markets to lay the financial foundation for years to come."
Mr. Pyle added, "EIC prides itself on its strong, liquid balance sheet that has always allowed it to be opportunistic and we have capitalized on a number of such opportunities during the second quarter and subsequent to it. Backed by more than 15 years of rock-solid financial performance, our stakeholders strongly supported two separate public market offerings. First, we generated gross proceeds of $88 million though a fully-subscribed share offering in the second quarter. We followed this up early in the third quarter with a new issue of Convertible Debentures that generated gross proceeds of $144 million, which will be used to redeem the Convertible Debentures that expire in June, 2023. We further leveraged our financial strength by extending our $1.3 billion syndicated term debt facility through to August 2025."
"With this financial support firmly in place, we have identified a number of acquisition prospects and have begun to complete these transactions," said Adam Terwin, EIC's Chief Corporate Development Officer. "In early July, we announced the acquisition of Carson Air, British Columbia's preeminent medevac provider, for a purchase price of $61 million. In August, we closed the acquisition of Macfab Manufacturing for a purchase price of $11 million. Macfab's business is closely related to Ben Machine's operations and will add capacity and efficiency. Additionally, we presently have entered into Letters of Intent to acquire two additional companies for aggregate consideration of $42 million. With the completion of these acquisitions, we will have deployed approximately $114 million in accretive acquisitions in 2021."
https://www.newswire.ca/news-releases/exchange-income-corporation-demonstrates-adaptability-and-resilience-as-q2-financial-results-outpace-prior-year-811654017.html