WesternOne Equity Income Fund Reports Solid Growth in 2012 Q3 Results

Nov 14, 2012, 09:25 ET from WesternOne Equity Income Fund

VANCOUVER, Nov. 14, 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 nine months ended September 30, 2012.

The results, consisting of WesternOne's interim financial statements for the three and nine months ended September 30, 2012 and Management's Discussion and Analysis ("MD&A") dated November 14, 2012, are available on SEDAR (www.sedar.com).

2012 Q3 financial highlights and recent events:

  • Solid year-over-year growth in consolidated revenue (59%), gross profit (57%) and adjusted EBITDA(1) (72%).

  • WesternOne's Britco division achieved growth in revenue and adjusted EBITDA of 88% and 127%, respectively, compared to Q3 last year due to strong manufacturing activity in the workforce accommodation and infrastructure sectors. In response to the demand Britco increased its production output through accelerating growth in manufacturing workforce at its four plants in Agassiz and Penticton in BC, Edmonton in Alberta and Waco in Texas.

  • WesternOne Rentals & Sales recorded organic growth in revenue and adjusted EBITDA of 8% and 17%, respectively, as the construction and infrastructure industry in BC and Alberta continued to fuel demand for rental equipment and related services in the region. The strong demand resulted in high rental fleet utilization and increase in related service revenues.

  • Growth translated to solid operating cash flow, up 76% compared to Q3 2011 (before working capital changes).

  • Consolidated payout percentage(2) for Q3 was 49.8%, compared to 70.8% in Q3 2011. Payout percentage for the nine months ended September 30, 2012 was 41.4%, compared to 67.0% a year ago.

  • In August 2012, WesternOne Rentals & Sales launched two new branches in Prince George and Kelowna, BC. Management continues to leverage their in-house expertise in construction heating and fuel solutions to provide quality rental equipment and reliable services to the construction and infrastructure sectors of newly identified strategic markets.

  • At the special unitholder's meeting on September 5, 2012, the unitholders of WesternOne adopted the special resolution approving the previously announced plan of arrangement under Section 192 of the Canada Business Corporations Act to convert WesternOne's income trust structure to a publicly traded corporation named WesternOne Inc. (the "Conversion").  On September 6, 2012, WesternOne obtained the final order from the Supreme Court of British Columbia approving the Conversion and the Conversion is expected to become effective on December 31, 2012. Under the Conversion, Unitholders will receive, on a tax-deferred basis, one common share of WesternOne Inc. for each Unit held.

"The solid growth that WesternOne has achieved in the third quarter reflects our ability to execute growth in key strategic areas in the construction and infrastructure services sectors," said Mr. Darren Latoski, Chief Executive Officer. "Wrating results and will continue to identify and execute services to the construction and infrase will continue to identify and execute disciplined growth initiatives in conjunction with ongoing assessments of the domestic and global economic environment."

Summary Financial Overview     For the three months ended
September 30,
    For the nine months ended
September 30,
($ in millions except unit amounts)     2012 2011 % Change     2012 2011 % Change
Revenue     $   54.0 $  33.9 59.3%     $    163.3 $    70.2 132.6%
Gross Profit     16.9 10.7 57.9%     50.5 23.1 118.6%
Adjusted EBITDA (1)     11.6 6.7 73.1%     36.4 16.8 116.7%
Distributable Cash Generated (1)     $       6.3 $        3.6 75.0%     $      21.7 $      10.6 104.7%
Distributions Declared     3.1 2.6 19.2%     9.0 7.1 26.8%
Distributable Cash per Unit (3)     0.3046 0.2138       1.0966 0.6786  
Distributions Declared per Unit     0.1500 0.1500       0.4500 0.4500  
Payout Percentage (2)     49.8% 70.8%       41.4% 67.0%  


(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 November 14, 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 Wednesday, November 14, 2012, to review the financial results and corporate developments for the three and nine months ended September 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 November 14, 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 November 21, 2012. Please enter the Replay ID number 51884340 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 organic business expansions and 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 and completion 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 November 14, 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