Alaris Equity Partners Income Trust Trust Units Reg S 3c7 · TSX:AD.UN
Alaris Equity Partners Income Trust Trust Units Reg S 3c7 — Alaris Royalty — Investor Presentation (May 2017)
29 slides from Alaris Equity Partners Income Trust Trust Units Reg S 3c7's investor presentation, May 2017
Slide 1: Corporate Presentation May 2017
May 2017 C O R P O R AT E P R E S E N TAT I O N Title
Slide 2: Forward Looking Statements
FORWARD LOOKING STATEMENTS Alaris’ communications often include written or oral statements which contain forward-looking information. Statements other than statements of historical fact contained in this corporate presentation may be forward-looking statements under applicable securities legislation
Slide 3: U.S. Investor Disclosure
U.S. INVESTOR DISCLOSURE The securities of Alaris Royalty Corp. have not been and will not be registered under the U.S. Investment Company Act of 1940, as amended (the “US Investment Company Act”) and Alaris Royalty Corp. is relying on the exemption from registration under the US Investment Company
Slide 4: Corporate Profile
CORPORATE PROFILE Corporate Summary Revenue (3 months ended Mar. 31, 2017) $20.9 million Monthly Dividend $0.135 per share ($1.62 annually) Annualized Returns since listing date (Nov 2008) 18% (297% total return) Number of Employees 14 Market Summary Ticker Symbol: TSX: AD Average Daily Volume (6 mo
Slide 5: Defining the Corporation
DEFINING THE CORPORATION Alaris’ long term goal is to create the optimal dividend stream available for investors. Alaris provides capital to private businesses using an innovative structure that fills a niche in the private capital markets. 5
Slide 6: Benefits to Shareholders
BENEFITS TO SHAREHOLDERS Five Pillars to the Optimal Dividend Low Volatility Visibility Diversification Liquidity Growth of Cash Flows of Cash Flows of Revenue Streams for Shareholders in Cash Flow Per Share Alaris’ preferred Alaris adjusts its Currently have 16 Average daily Historic organi
Slide 7: Benefits to Business Owners
BENEFITS TO BUSINESS OWNERS Non-Voting Preferred Equity Allows the entrepreneur to continue to run their successful businesses with minimal interference by Alaris Long-Term Capital Partner Alaris does not require an exit This allows the entrepreneur to focus on long-term goals rather than shor
Slide 8: Alaris' Ideal Partner Criteria
ALARIS’ IDEAL PARTNER CRITERIA Required services or products in mature industries Old Economy Business Businesses with a risk of obsolescence or a declining asset base are not a good fit Alaris looks at historical free cash flow to predict sustainability of its Track Record of Free Cash distri
Slide 9: Returns from Exits to Date
RETURNS FROM EXITS TO DATE Number of Years Capital Distributions Exit Capital Total % total $millions CAD Invested Invested Received Received Return Return IRR % LifeMark 11.3 $ (67.5) $ 51.8 $ 123.4 $ 107.7 159% 29% MediChair 6.8 (6.5) 6.4 10.0 9.9 152% 23% Quetico 3.0 (26.9) 13.3 30.7 17.1 63% 22%
Slide 10: Partner Revenue Summary
PARTNER REVENUE SUMMARY % organic change in organic revenue (1) Summary of Partner Distributions: % of 5.50% (contractual per annum $000s CAD) Distribution total 5.00% Partners Paying Distributions Monthly Agility $ 4,068 4% ccComm 798 1% DNT 14,803 15% End of the Roll 1,230 1% 2.90% 2.60% Federal R
Slide 11: Diversification
DIVERSIFICATION • Alaris has approximately 70% of its fair value of investments in US based companies • Of the 30% of fair value of investments in Canadian companies, 7% of the companies generate the majority of their revenue in Western Canada, 15% to Eastern Canada and 8% internationally • Alaris h
Slide 12: Cash Flow from Current Investments
CASH FLOW FROM CURRENT INVESTMENTS Financial Summary (millions CAD$) Run-Rate Figure 1 to the left displays the estimated run-rate Annualized data Run-Rate $ per financial information needed to calculate the run-rate Figure 1 Gross $ share payout ratio as of May 8, 2017. Revenue (USDCAD$1.3200) $85.
Slide 13: Investment History
INVESTMENT HISTORY Capital Deployed since 2011 $173 $178 $108 $90 $108 $77 2011 2012 2013 2014 2015 2016 Since Inception • Invested over $900 million in 23 Partner’s – 49 tranches of financing • Collected $350 million of distributions • $272 million of repurchases by 6 Partners • $120 million - aver
Slide 14: Balance Sheet
BALANCE SHEET Summary of Balance Sheet and Covenants • Alaris currently has approximately $103 million Millions CAD$ May available to it to invest ($76.9m current capacity and Figure 1 2017 $25.9m of additional capacity from credit for additional TTM EBITDA for debt covenant $78.0 EBITDA generated b
Slide 15: Dividend History and Sustainability
DIVIDEND HISTORY AND SUSTAINABILITY • Current dividend per share of $0.135 per month ($1.62 annual) • Alaris has paid over 100 consecutive monthly dividends since Nov 2008 totaling more than $11.00 per share and $275 million gross. • 10 consecutive dividend increases totaling 93% gross increase. • 5
Slide 16: Scalable Model
SCALABLE MODEL • Alaris’ unique structure, which gives it protections that allow for a non-controlling investment, allows it to be a monitor of its Partners, not an operator. • For the addition of every 5 new (net) Partners, Alaris would likely have to add 1 employee to the monitoring team. Alaris’
Slide 17: Recent Financial Results
RECENT FINANCIAL RESULTS Three months ended March 31, 2017 vs same period 2016: • -15.9% decrease in revenue from Partners to $20.4 million • -14.2% decrease in Normalized EBITDA to $18.1 million • 6.5% increase in net cash from operating activities to $15.0 million • 1.3% increase in dividends paid
Slide 18: Historic Financial Summary
HISTORIC FINANCIAL SUMMARY (millions CAD$) 2012A 2013A 2014A 2015A 2016A Revenue $ 32.10 $ 52.70 $ 69.30 $ 82.80 $ 100.04 % change 45% 64% 31% 19% 21% SG&A $ 4.10 $ 5.00 $ 7.70 $ 7.90 $ 9.17 % change 21% 22% 54% 3% 16% Normalized EBITDA $ 26.10 $ 43.90 $ 57.40 $ 71.40 $ 87.20 % change 40% 68% 31% 24
Slide 19: Track Record of Per Share Growth
TRACK RECORD OF PER SHARE GROWTH 5 year CAGR 17% 5 year CAGR 20% 5 year CAGR 19% 5 year CAGR 10% $2.75 $2.44 $2.40 $2.28 $2.10 $2.02 $1.97 $1.87 $1.65 $1.65 $1.64 $1.63 $1.62 $1.57 $1.53 $1.48 $1.36 $1.26 $1.25 $1.18 Partner revenue Normalized EBITDA Net cash from ops Dividend 2012 2013 2014 2015 20
Slide 20: Scorecard – Accretion via New Revenue Streams
SCORECARD – ACCRETION VIA NEW REVENUE STREAMS ALARIS SHARE PRICE (based on new Canadian deals) $ 27.00 $ 25.00 $ 23.00 $ 21.00 $ 19.00 $ 17.00 $10MM $ 1.82 $ 1.81 $ 1.80 $ 1.79 $ 1.77 $ 1.76 NEW ROYALTY $8MM $ 1.79 $ 1.79 $ 1.78 $ 1.77 $ 1.76 $ 1.74 REVENUE $6MM $ 1.76 $ 1.76 $ 1.75 $ 1.74 $ 1.74 $
Slide 21: Corporate Information
CORPORATE INFORMATION BOARD OF DIRECTORS COMMITTEES AUDITORS KPMG, LLP Jack C. Lee, Chairman Audit Mitch Shier, Director Corporate Governance and Compensation BANKING Bank of Montreal (co-lead) SYNDICATE HSBC Bank Canada (co-lead) Mary Ritchie, Director Audit Chair John Budreski, Director Corporate
Slide 22: Appendices
APPENDICES 22
Slide 23: Appendix A: Summary of Partners
APPENDIX A: SUMMARY OF PARTNERS Industry Healthcare: Industrials: Consumer Industrials: Business/ Physiotherapy Civil Construction Discretionary: Distributor of Professional Services Services Discount Flooring Products to Federal Services: and Local Agencies Commercial Janitorial and Hospitality Ser
Slide 24: Appendix A: Summary of Partners (cont)
APPENDIX A: SUMMARY OF PARTNERS (CONT) CCCOMM Industry Healthcare: Business/ Industrials: Business/ Consumer Cardiovascular Professional Rebar Fabrication & Professional Discretionary: Diagnostic Imaging Services: Installation Services: Sprint mobile retailer Centers Laboratory Testing IT Consulting
Slide 25: Appendix A: Summary of Partners (cont)
APPENDIX A: SUMMARY OF PARTNERS (CONT) PF GROWTH PARTNERS Industry Consumer Business/ Professional Business/ Professional Industrials: Healthcare: discretionary: Services: Services: Mining Services Behavioral and Health and Fitness Apparel Design, Full Service Marketing Mental Health Clubs Engineeri
Slide 26: Appendix A: Summary of Partners (cont)
APPENDIX A: SUMMARY OF PARTNERS (CONT) Industry Business/Professional Services: Engineering and Construction Services Total Alaris Capital $40,500 Injected ($000’s) (3 tranches) Use of Proceeds Recapitalization Annualized $6,380 Distribution to Alaris ($000’s) (1) Annual Reset Metric Percentage chan
Slide 27: Appendix B: Offering History
APPENDIX B: OFFERING HISTORY The following table summaries the equity offerings Alaris has completed since its public listing in November 2008. Shares Gross Price on Date of Issued Proceeds Date Closing Announcement Issue Price (000's) ($000's) Closed Date 30-Sep-09 $ 6.00 2,300 $ 13,800 22-Oct-09 $
Slide 28: Non-IFRS Measures
NON-IFRS MEASURES The terms EBITDA, Normalized EBITDA and Payout Ratio are financial measures used in this presentation hat are not standard measures under International Financial Reporting Standards (“IFRS”). The Corporation’s method of calculating EBITDA, Normalized EBITDA and Payout Ratio may dif
Slide 29: Head Office
HEAD OFFICE Suite 250, 333 24th Avenue SW Calgary, Alberta T2S 3E6 Phone: 403.228.0873 Fax: 403.228.0906 Website: www.alarisroyalty.com