TerraVest announces 2012 third quarter financial results and strong year to date results

VEGREVILLE, AB, Nov. 6, 2012 /CNW/ - TerraVest Capital Inc. (TSX: TVK) announced today the third quarter results for TerraVest Income Fund (the "Fund").

All references to "TerraVest" or the "Corporation" in this press release include TerraVest Capital Inc., the successor to the Fund following the conversion of the Fund from an income trust to a corporate entity (please see "Corporate Conversion" for further discussion), together with the Fund and its subsidiaries, as applicable, including the operations controlled and consolidated by them, unless otherwise indicated.

Corporate Conversion
Subsequent to the end of the quarter, TerraVest announced that effective October 31, 2012 it had completed the previously announced conversion of the Fund to a corporation called TerraVest Capital Inc. (the "Corporation") pursuant to a plan of arrangement (the "Arrangement") under the Business Corporations Act (Alberta).  The Arrangement was approved by a special resolution in writing of the unitholders of the Fund holding not less than 66 2/3% of the issued and outstanding Units of the Fund and is binding on all unitholders of the Fund.  Pursuant to the Arrangement, each unitholder of the Fund received one common share of the Corporation for each Unit held. After giving effect to the Arrangement there are 12,529,403 common shares of the Corporation issued and outstanding.  The new trading symbol for the Corporation's common shares is TVK on the Toronto Stock Exchange.

Effective on the closing of the Arrangement and related transactions, the Corporation now owns the subsidiaries that operate the businesses that were held and operated by the Fund and its subsidiaries prior to the Arrangement.  As part of the Arrangement, the Fund was wound-up and dissolved, all of the assets of the Fund were transferred to the Corporation and the Corporation assumed all of the existing liabilities of the Fund.  The Trustees and Officers of the Fund prior to the Arrangement are now the Directors and Officers of the Corporation.

FINANCIAL INFORMATION
All amounts in this news release are stated in thousands of Canadian dollars, except per Unit data.
For the three and nine months ended September 30, 2012, TerraVest reported:

     
FINANCIAL PERFORMANCE Three months ended
September 30
Nine months ended
September 30
    2012   2011   2012   2011
Sales $ 17,088 $ 20,019 $ 53,617 $ 53,447
EBITDA   3,585   3,953   10,728   8,076
Income from continuing operations   1,907   2,090   6,235   3,500
Income (loss) from discontinued operations   -   665   -   (1,059)
Income and comprehensive income for the period   1,907   2,755   6,235   2,441
Free cash flow   3,798   3,888   7,659   10,527
Income per Unit, continuing operations, basic and diluted $ 0.12 $ 0.11 $ 0.34 $ 0.18
Income (loss) per Unit, discontinued operations, basic and diluted   -   0.02   -   (0.06)
Income per Unit, basic and diluted $ 0.12 $ 0.13 $ 0.34 $ 0.12
FINANCIAL POSITION   September 30, 2012   December 31, 2011
Working capital $ 6,146 $ 14,102
Property, plant and equipment   33,304   33,527
Total assets   79,677   94,929
Long-term debt (current and non-current)   5,012   55
Unitholders' equity   47,700   61,796

EBITDA, Free Cash Flow and Working Capital are not defined measures under International Financial Reporting Standards ("IFRS") and are therefore defined below.  TerraVest's definitions may differ from those of other issuers and therefore may not be comparable to measures used by them.

EBITDA: is defined as income from continuing operations before financial expenses, income taxes, depreciation and amortization, impairment charges and changes in fair values of derivative instruments. EBITDA should not be used as an exclusive measure of cash flow since it does not account for the impact of working capital changes, capital expenditures, debt changes and other sources and uses of cash which are disclosed in the condensed consolidated statement of cash flows. Management uses EBITDA as part of its assessment of TerraVest's operating performance. There is no directly comparable IFRS measure for EBITDA.

Free Cash Flow: is defined as cash flow from operating activities from continuing operations less net capital expenditures from continuing operations. Free cash flow is a useful measure in that it provides management and investors an indication of TerraVest's capacity to generate discretionary cash flows from operations. Free cash flow should not be an exclusive measure of cash flow since it does not necessarily reflect the cash flow in the period available for management to use at its discretion, which may be affected by other sources and non-discretionary uses of cash such as scheduled debt repayments. There is no directly comparable IFRS measure for free cash flow.

Working Capital: is calculated by subtracting current liabilities from current assets. Management uses working capital as a measure for assessing overall liquidity. There is no directly comparable IFRS measure.

During the quarter TerraVest also closed the previously announced substantial issuer bid ("SIB") under which it acquired 7,191,063 Units of TerraVest for $2.75 from Unitholders and subsequently cancelled them. The total cost to acquire the Units was $19,775 plus $170 for costs of the SIB, or $19,945. The proceeds to acquire these Units and pay the costs of the SIB came from internally generated cash resources and additional borrowings.

Additional information can be found in TerraVest's condensed consolidated financial statements and MD&A which are available on SEDAR at www.sedar.com.

Caution Regarding Forward-Looking Statements
This news release contains forward-looking statements.  All statements other than statements of historical fact contained in this news release are forward-looking statements, including, without limitation, statements regarding our strategic direction and evaluation of the portfolio businesses and TerraVest as a whole, and other plans and objectives of or involving TerraVest. Readers can identify many of these statements by looking for words such as "expects" and "will" and similar words or the negative thereof. Although management believes that the expectations represented in such forward-looking statements are reasonable, there can be no assurance that such expectations will prove to be correct.

By their nature, forward-looking statements require us to make assumptions and, accordingly, forward looking statements are subject to inherent risks and uncertainties. There is significant risk that the forward-looking statements will not prove to be accurate. We caution readers of this news release not to place undue reliance on our forward-looking statements because a number of factors may cause actual future circumstances, results, conditions, actions or events to differ materially from the plans, expectations, estimates or intentions expressed in the forward-looking statements and the assumptions underlying the forward-looking statements. 

Assumptions and analysis about the performance of TerraVest as a whole and its portfolio businesses, the markets in which the portfolio businesses compete and the prospects and values of the portfolio businesses are considered in setting the business plan for TerraVest, in evaluating and forecasting tax horizon, capital investments, outlook for operations, financial position, results and cash flow, other plans and objectives and in making related forward-looking statements. Such assumptions include, without limitation, the current tax regime in Canada remaining unchanged and the performance of the continuing portfolio businesses of the fund not differing materially from historic performance. Should any of these factors or assumptions vary, actual results may differ materially from the forward-looking statements.

The information set forth under "Risk Factors" in the annual information form of TerraVest dated March 5, 2012 and under "Risk Factors" in the MD&A of TerraVest for the period ended September 30, 2012, identifies risk factors that could affect the operating results and performance of TerraVest and its portfolio businesses and the values of the portfolio businesses and TerraVest as a whole. We caution that the lists of factors discussed in such information is not exhaustive and that, when relying on forward-looking statements to make decisions with respect to TerraVest, investors and others should carefully consider the factors discussed, as well as other uncertainties and potential events, and the inherent risks and uncertainties of forward-looking statements.  The forward-looking statements herein are made based on the assumption that TerraVest will not be affected by such risks, but that, if TerraVest is affected by such risks, the forward-looking statements may become inaccurate.

The forward-looking statements contained herein are expressly qualified in their entirety by this cautionary statement.  The forward-looking statements included in this news release are made as of the date of this news release.  Except as required by applicable securities laws, TerraVest does not undertake to update such forward-looking statements.

 

 

SOURCE: TerraVest Income Fund

For further information:

Dale Laniuk
TerraVest Capital Inc.
Chief Executive Officer
(780) 632 -7774
laniuk@rjvgas.com

OR

Paul A. Casey, CA
TerraVest Capital Inc.
Chief Financial Officer
(780) 632-2040
pcasey@terravestindustries.com