| EQNX::TICKER_START (TSX:AD.UN),(TSX:AD-UN), EQNX::TICKER_END NOT FOR DISTRIBUTION IN THE UNITED STATES. FAILURE TO COMPLY WITH THIS RESTRICTION MAY CONSTITUTE A VIOLATION OF UNITED STATES SECURITIES LAW. Alaris Equity Partners Income Trust (together, as applicable, with its subsidiaries, "Alaris" or the "Trust") is pleased to announce its results for the three months ended March 31, 2022. The results are prepared in accordance with International Accounting Standard 34. All amounts below are in Canadian dollars unless otherwise noted. Highlights: "We are pleased to be reporting first quarter revenue exceeding guidance, as well as the prior year, as a result of the record deployment over the last year and a half and the follow-on investment to BCC during the quarter. The redemption of Kimco was also extremely positive for Alaris as it increases our capacity for capital deployment in the remainder of the year as well as crystallizes a positive return and provides an excellent example demonstrating Alaris' ability to patiently work through difficult times with a Partner company and to still provide a positive result to our unitholders as well as the Partner company's employees," said Steve King, President and CEO. Per Unit Results Three months ended Period ending March 31 2022 2021 % Change Revenue $0.88 $0.79 +11.4 % EBITDA (Note 1) $0.91 $0.84 +8.3 % Cash from operating, prior to changes in working capital $0.78 $0.62 +25.8 % Distributions declared $0.33 $0.31 +6.5 % Basic earnings $0.61 $0.56 +8.9 % Fully diluted earnings $0.59 $0.54 +9.3 % Weighted average basic units (000's) 45,161 40,803 For the three months ended March 31, 2022, revenue per unit increased by 11.4% compared to the same period in 2021 primarily as a result of new investments during 2021 in Falcon Master Holdings LLC ("FNC"), Brown & Settle Investments, LLC and a subsidiary thereof (collectively, "Brown & Settle"), 3E, LLC ("3E") and Vehicle Leasing Holdings, LLC ("D&M"). There were also incremental Distributions from current Partners as a result of follow-on investments to BCC and Fleet Advantage, LLC ("Fleet"), as well as full Distributions from PF Growth Partners, LLC ("PFGP") in Q1 2022 as they were paying partial Distributions in Q1 2021 as a result of the impact of COVID-19. The overall positive reset of approximately 2.4% also contributed to the increase in revenue per unit. These were partially offset by the redemption of Federal Resources Supply Company and its subsidiaries ("FED") in Q4 2021. As cash from operating, prior to changes in working capital, excludes primarily all non-cash items in the Trust's consolidated statement of comprehensive income, the cash from operating, prior to changes in working capital per unit and the changes from period to period is an important tool to use to summarize the ability for Alaris to generate cash. The per unit increase in Q1 2022 of 25.8% was a result of the increase in revenue per unit discussed above as well as a reduction in current taxes and cash taxes paid as compared to in Q1 2021. Earnings per unit improved by 8.9% in the three months ended March 31, 2022 as compared to in Q1 2021, which is also the result of the improvement in revenue per unit along with relatively consistent expenses in each period. Outlook The Trust deployed approximately $82.3 million in the three months ended March 31, 2022, consistent with Alaris' acquisition of investments in its condensed consolidated interim statement of cash flows. This deployment, along with $357.8 million in the year ended December 31, 2021, has contributed to Alaris' revenue in Q1 2022 of $39.6 million, slightly ahead of the expected $38.6 million. Total revenue for the quarter was higher than guidance due to revenue generated from a follow-on investment in BCC in March 2022 and incremental common Distributions from FNC, Amur Financial Group Inc. ("Amur") and D&M. As outlined below, the outlook for the next twelve months remains positive with Run Rate Revenue expected to be approximately $154.8 million. This includes current contracted amounts, an additional US$2.4 million from PFGP related to deferred Distributions during COVID-19 and an estimated $3.6 million of common dividends. This Run Rate Revenue of $154.8 million excludes a n additional US$13.7 million of Distributions from Kimco as part of their redemption subsequent to March 31, 2022. These additional Distributions were deferred from prior years and will be recorded as revenue in Q2 2022. Inclusive of these additional Distributions from Kimco, Alaris expects total revenue from its Partners in Q2 2022 of approximately $56.1 million. The Run Rate Cash Flow table below outlines the Trust's expectation for revenue, general and administrative expenses, interest expense, tax expense and distributions to unitholders for the next twelve months. The Run Rate Cash Flow outlines the net cash from operating activities, net of distributions paid, that Alaris is expecting to have after the next twelve months. This measure is comparable to net cash from operating activities less distributions paid, as outlined in Alaris' consolidated statements of cash flows. Annual general and administrative expenses are currently estimated at $15.0 million and include all public company costs. The Trust's Run Rate Payout Ratio is expected to be within a range of 60% and 65% when including Run Rate Revenue , overhead expenses and its existing capital structure. The table below sets out our estimated Run Rate Cash Flow alongside the after-tax impact of positive net deployment and the impact of every $0.01 change in the USD to CAD exch ange rate. Run Rate Cash Flow ($ thousands except per unit) Amount ($) $ / Unit Revenue $154,800 $3.42 General and administrative expenses (15,000 ) (0.33 ) Interest and taxes (46,000 ) (1.02 ) Net cash from operating activities $93,800 $2.07 Distributions paid (59,700 ) (1.32 ) Run Rate Cash Flow $34,100 $0.75 Other considerations (after taxes and interest): New investments Every $50 million deployed @ 14% +3,375 +0.07 USD to CAD Every $0.01 change of USD to CAD +/- 900 +/- 0.02 The senior debt facility was drawn to $332.8 million at March 31, 2022 in the Trust's statement of financial position. The annual interest rate on that debt, inclusive of standby charges on available capacity, was approximately 5.0% for the three months ended March 31, 2022. Subsequent to March 31, 2022, the proceeds from the Kimco redemption in April 2022 of $67.1 million were used to repay senior debt. Following this repayment, the total drawn as of the date of this release is approximately $263 million, with the capacity to draw up to an additional $137 million based on covenants and credit terms. The Condensed Consolidated Interim Statements of Financial Position, Condensed Consolidated Interim Statements of Comprehensive Income, and Condensed Consolidated Interim Statements 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.alarisequitypartners.com. Earnings Release Date and Conference Call Details Alaris management will host a conference call at 9am MT (11am ET), Friday, May 6, 2022 to discuss the financial results and outlook for the Trust. Participants in North America can access the conference call by dialing toll free 1-866-475-5449. Alternatively, to listen to this event online, please click the webcast link and follow the prompts given: Q1 Webcast. 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 instant replay for a week. You can access the replay by dialing toll free 1-855-859-2056 and entering the Conference ID: 5881757. The webcast will be archived and is available for replay by using the same link as above or by finding the link we'll have stored under the "Investor" section - "Presentation and Events", on our website at www.alarisequitypartners.com. An updated corporate presentation will be posted to the Trust's website within 24 hours at www.alarisequitypartners.com. About the Trust: Alaris, through its subsidiaries, provides alternative financing to private companies ("Partners") in exchange for distributions, dividends or interest (collectively, "Distributions") with the principal objective of generating stable and predictable cash flows for distribution payments to its unitholders. 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. Non-GAAP and Other Financial Measures The terms EBITDA, Actual Payout Ratio, Run Rate Revenue, Run Rate Payout Ratio, Earnings Coverage Ratio, Run Rate Cash Flow and Per Unit amounts (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 method of calculating EBITDA, Actual Payout Ratio, Run Rate Revenue, Run Rate Payout Ratio, Earnings Coverage Ratio, Run Rate Cash Flow and Per Unit amounts may differ from the methods used by other issuers. Therefore, the Trust's EBITDA, Actual Payout Ratio, Run Rate Revenue, Run Rate Payout Ratio, Earnings Coverage Ratio, Run Rate Cash Flow and Per Unit amounts may not be comparable to similar measures presented by other issuers. (1) "EBITDA" and "EBITDA per unit" are Non-GAAP financial measures and refer to earnings determined in accordance with IFRS, before depreciation and amortization, interest expense (finance costs) and income tax expense and the same amount divided by weighted average basic units outstanding. EBITDA and EBITDA per unit are used by management and many investors to determine the ability of an issuer to generate cash from operations, aside from still including fluctuations due to changes in exchange rates and changes in the Trust's investments at fair value. Management believes EBITDA and EBITDA per unit are useful supplemental measures from which to determine the Trust's ability to generate cash available for servicing its loans and borrowings, income taxes and distributions to unitholders. Refer to the reconciliation of EBITDA and calculation of EBITDA per unit in the table below. Three months ended March 31 $ thousands except per unit amounts 2022 2021 % Change Earnings $27,405 $22,646 +21.0 % Depreciation and amortization 53 75 -29.3 % Finance costs 6,466 5,621 +15.0 % Total income tax expense 7,287 5,771 +26.3 % EBITDA $41,211 $34,113 +20.8 % Weighted average basic units (000's) 45,161 40,803 EBITDA per unit $0.91 $0.84 +8.3 % (2) "Actual Payout Ratio" is a supplementary financial measure and refers to Alaris' total distributions paid during the period (annually or quarterly) divided by the actual net cash from operating activities Alaris generated for the period. It represents the net cash from operating activities after distributions paid to unitholders available for either repayments of senior debt and/or to be used in investing activities. (3) "Run Rate Revenue" is a supplementary financial measure and refers to Alaris' total revenue expected to be generated over the next twelve months based on contracted distributions from current Partners as well as an estimate for common dividends or distributions based on past practices, where applicable. Run Rate Revenue is a useful metric as it provides an expectation for the amount of revenue Alaris can expect to generate in the next twelve months based on information known. (4) "Run Rate Payout Ratio" is a Non-GAAP financial ratio that refers to Alaris' distributions per unit expected to be paid over the next twelve months divided by the net cash from operating activities per unit calculated in the Run Rate Cash Flow table. 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 net cash from operating activities that can be used to either repay senior debt during the next twelve months and/or be used for additional investment purposes. Run Rate Payout Ratio is comparable to Actual Payout Ratio as defined above. (5) "Earnings Coverage Ratio ("ECR")" is a supplementary financial measure and 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 the earnings coverage ratio is a useful metric in assessing our partners continued ability to make their contracted distributions. (6) "Run Rate Cash Flow" is a Non-GAAP financial measure and outlines the net cash from operating activities, net of distributions paid, that Alaris is expecting to have after the next twelve months. This measure is comparable to net cash from operating activities less distributions paid, as outlined in Alaris' consolidated statements of cash flows. (7) "Per Unit" values, other than earnings per unit, refer to the related financial statement caption as defined under IFRS or related term as defined herein, divided by the weighted average basic units outstanding for the period. The terms EBITDA, Actual Payout Ratio, Run Rate Revenue, Run Rate Payout Ratio, Earnings Coverage Ratio, Run Rate Cash Flow and Per Unit amounts should only be used in conjunction with the Trust's annual audited financial statements, complete versions of which available on SEDAR at www.sedar.com. |