WesternOne Equity Income Fund Reports Significant Growth in 2012 Q2 Results

Aug 09, 2012, 09:15 ET from WesternOne Equity Income Fund

VANCOUVER, Aug. 9, 2012 /PRNewswire/ - WesternOne Equity Income Fund ("WesternOne") (Toronto Stock Exchange: WEQ.UN, WEQ.DB.B and WEQ.DB.C) today announced the release of its financial results for the three and six months ended June 30, 2012.

The results, consisting of WesternOne's interim financial statements for the three and six months ended June 30, 2012 and Management's Discussion and Analysis ("MD&A") dated August 9, 2012, are available on SEDAR (www.sedar.com).

2012 Q2 financial highlights and recent events:

  • Significant growth in consolidated revenue (197%), gross profit (169%) and adjusted EBITDA(1) (178%) compared to Q2 2011 due to organic growth in WesternOne Rentals & Sales ("WRS") and additional earnings from Britco.

  • Growth translated to solid operating cash flow, up 163% compared to Q2 2011 (before working capital changes).

  • Consolidated payout percentage(2) for Q2 was 49.5%, significantly improved from 94.9% in Q2 2011. Payout percentage for the six months ended June 30, 2012 was 38.0%, compared to 65.1% a year ago.

  • WRS generated year-over-year organic growth of 15.0% for revenue and 63.0% for adjusted EBITDA for Q2. The robust construction and film production segments in Western Canada has led to higher fleet utilization and rental rates and opportunities for fleet expansion.

  • Britco contributed revenue of $43.0 million and adjusted EBITDA of $7.2 million for Q2 due to strong manufacturing activity in the workforce accommodations sector. Compared to $6.8 million of revenue and $1.4 million of adjusted EBITDA for the month of June 2011 after WesternOne's acquisition of the business on June 1, 2011, the increase in revenue and adjusted EBITDA was due to (i) the full quarter of operation in Q2 2012 and (ii) increased production output through accelerated growth in manufacturing workforce and recent geographical expansions into Edmonton, Alberta and Waco, Texas.

  • On July 18, WesternOne announced that its board of trustees had approved a proposed transaction providing for the reorganization of WesternOne into a corporate structure (the "Conversion"). Completion of the Conversion is subject to conditions including regulatory approvals and approval from unitholders. Further details of the Conversion are available in WesternOne's information circular dated July 30, 2012, which is available on SEDAR (www.sedar.com).

"We are delighted with the strong growth in our operating results for Q2 and year-to-date," said Mr. Darren Latoski, Chief Executive Officer. "WesternOne stands to benefit from continuous capital investments in the construction and infrastructure and resource sectors. We will continue to capitalize on this positive economic trend through executing disciplined growth initiatives."

Summary Financial Overview       For the three months ended       For the six months ended
(unaudited)       June 30,       June 30,
($ in millions except unit amounts)       2012       2011       % Change       2012       2011       % Change
Revenue     $    57.4     $   19.3       197.4%     $     109.3     $     36.3       201.5%
Gross Profit       16.1       6.0       168.6%       33.6       12.4       171.7%
Adjusted EBITDA (1)       12.0       4.3       178.1%       24.8       10.1       146.8%
Distributable Cash Generated (1)     $        6.0     $         2.5       143.3%     $       15.4     $       7.0       120.8%
Distributions Declared       3.0       2.4       26.8%       5.9       4.6       28.9%
Distributable Cash per Unit (3)       0.3048       0.1596               0.7963       0.4667        
Distributions Declared per Unit       0.1500       0.1500               0.3000       0.3000        
Payout Percentage (2)       49.5%       94.9%               38.0%       65.1%        

(1)     "Adjusted EBITDA" and "Distributable Cash" are not recognized measures under IFRS and do not have a standardized meaning prescribed by IFRS. "Adjusted EBITDA" refers to earnings before interest, income taxes, depreciation, amortization, gain/loss on financial derivatives relating to changes in the fair market value of the fixed interest rate swap, business acquisition and Conversion costs, debenture issuance costs, gain/loss on debentures relating to changes in their fair values, gain/loss on Unit issuances relating to conversion of debentures, gain/loss on WesternOne 's exchangeable units relating to changes in their fair values, unit based compensation, distribution to unitholders, foreign exchange gains/losses, and write-down of fleet assets, intangible assets and goodwill. "Distributable Cash" refers to cash available for distribution to the unitholders by WesternOne. For further description of Adjusted EBITDA and Distributable Cash refer to "Non-IFRS Measures" in the MD&A dated August 9, 2012.
(2)     Amounts calculated using distributable cash and distributions declared for the related period, not on per Unit amounts. Calculated as distribution declared divided by distributable cash generated.
(3)     Calculated based on basic weighted average number of units.

Conference Call

Darren Latoski, CEO, Carlos Yam, CFO and Geoff Shorten, COO, of WesternOne Equity GP Inc. will host a conference call at 4:30pm (Eastern time) or 1:30pm (Pacific time), on Thursday, August 9, 2012, to review the financial results and corporate developments for the three and six months ended June 30, 2012.

To participate in this conference call, please dial one of the following numbers approximately 10 minutes prior to the commencement of the call, and ask to join the WesternOne conference call.

Dial in numbers:        Toll Free ..........................................         1-888-231-8191
        International or Local Toronto..........         1-647-427-7450

Conference Call Replay

If you cannot participate on August 9, 2012, a replay of the conference call will be available by dialing one of the following replay numbers. You will be able to dial in and listen to the conference two hours after the meeting end time, and the replay will be available until August 16, 2012. Please enter the Replay ID number 97379705 followed by the # key.

Replay Dial-In:        Toll Free..............................................       1-855-859-2056
        International or Local Toronto.............       1-416-849-0833

Forward-looking Information

Certain statements in this press release may constitute "forward-looking" information that involves known and unknown risks, uncertainties and other factors, and it may cause actual results, performance or achievements or industry results, to be materially different from any future results, performance or achievements or industry results expressed or implied by such forward-looking information. Forward-looking information is identified by the use of terms and phrases such as "anticipate", "believe", "could", "estimate", "expect", "intend", "may", "plan", "predict", "project", "will", "would", and similar terms and phrases, including references to assumptions. Such information includes, without limitation, statements with respect to: the enhancement of WesternOne's product and service offering and customer base derived from acquisitions completed by WesternOne or its subsidiaries, the growth prospects in sectors where WesternOne's businesses are conducted, market expansions under WesternOne's current and future strategies, the benefits that may accrue to WesternOne and its unitholders as a result of such market expansions, completion of the Conversion and approvals of the Conversion. Actual events or results may differ materially.

Forward-looking information contained in this press release is based on certain key expectations and assumptions made by WesternOne, including, without limitation, expectations and assumptions respecting: WesternOne's ability to obtain requisite consents or approvals related to the Conversion and the ability to realize the anticipated benefits of the Conversion, the outlook of WesternOne's business and the economy in Western Canada and the US, the supply and demand for WesternOne's products and services and management's assessment of future plans and operations. Although the forward-looking information contained in this press release is based upon what the WesternOne's management believes to be reasonable assumptions, WesternOne cannot assure investors that actual results will be consistent with such information. Forward-looking information reflects current expectations of management regarding future events and operating performance as of the date of this press release. Such information involves significant risks and uncertainties, should not be read as guarantees of future performance or results, and will not necessarily be accurate indications of whether or not such results will be achieved. A number of factors could cause actual results to differ materially from the results discussed in the forward-looking information, and a description of these factors can be found under "Risk Factors" in WesternOne's Annual Information Form dated March 29, 2012 and Management's Discussion and Analysis dated August 9, 2012, which are available on SEDAR (www.sedar.com).

The forward-looking information contained herein is expressly qualified in its entirety by this cautionary statement. Forward-looking information reflects management's current beliefs and is based on information currently available to WesternOne. The forward-looking information is made as of the date of this press release and WesternOne assumes no obligation to update or revise such information to reflect new events or circumstances, except as may be required by applicable law.

About WesternOne

WesternOne seeks to acquire and grow businesses in the construction and infrastructure services sectors in order to generate stable and growing distributions to its unitholders as well as to achieve overall capital appreciation.

Additional Information

Additional information relating to WesternOne, including WesternOne's Annual Information Form and other public filings, is available on SEDAR at www.sedar.com or on WesternOne's website at www.weq.ca.

Trading Symbols

Toronto Stock Exchange: WEQ.UN, WEQ.DB.B and WEQ.DB.C


SOURCE WesternOne Equity Income Fund