/NOT FOR DISTRIBUTION TO U.S. NEWSWIRE SERVICES OR FOR DISTRIBUTION IN THE UNITED STATES/
TORONTO, Aug. 4 /CNW/ - Tricon Capital Group Inc. (TSX: TCN) ("Tricon" or the "Company") today announced its results for the second quarter ended June 30, 2010. Financial Statements and Management's Discussion and Analysis are available on the Tricon web site at www.triconcapital.com and have been filed on SEDAR. Results are prepared in accordance with International Financial Reporting Standards ("IFRS") and presented in Canadian dollars rounded to the nearest thousand, unless otherwise noted.
- Initial Public Offering (IPO) completed on May 20, 2010, raising
gross proceeds of approximately $69 million; 18,240,871 common shares
outstanding at June 30, 2010.
- Additional investments were made in U.S. distressed fund Tricon IX
and Canadian fund Tricon X during the quarter. Tricon expects to
commence fundraising for a successor Canadian fund by the end of 2010
and a successor U.S. fund by Q1 2011.
- Adjusted EBITDA of $1,379,000 was stable compared to same period last
- Dividends in the aggregate annual amount of $0.24 per share are to be
declared and paid quarterly commencing the quarter ending September
30, 2010. The dividend yield based on the August 3rd, 2010 price of
$5.50 per share is 4.4%.
"Tricon achieved a significant milestone in the second quarter with the completion of our IPO. Our ability to successfully complete the offering despite a volatile and challenging market demonstrated the strength and resilience of our business model," said David Berman, Chairman and Chief Executive Officer. "Our financial results for the quarter are consistent with our expectations. We continue to see attractive investment opportunities in both Canada and the U.S. and we expect to be in the market raising a new Canadian fund later this year and a new U.S. fund early next year. The outlook for our business is extremely positive and we look forward to initiating dividend payments to our shareholders."
Financial and Fund Updates
Revenue of $3,087,000 for the second quarter of 2010 increased by $178,000 compared to the same period last year primarily as a result of higher Performance Fees earned from the completion of two Canadian syndicated investments. This increase was partially offset by lower Contractual Management Fees which were negatively impacted by foreign exchange losses and slightly lower Assets Under Management (AUM).
Adjusted EBITDA of $1,379,000 for the quarter accounts for non-recurring items related to the IPO and discretionary management bonuses and compensation payments; in addition to non-recurring expenses related to the IPO, the nominal decrease of $95,000 from the prior year quarter reflects the successful realization of fund investments, which in turn resulted in slightly lower Assets Under Management and related management fees.
The Company has provided Adjusted EBITDA and Adjusted Net Income figures as a result of several non-recurring and non-cash items including a significant LTIP-related expense. Under IFRS the Company is required to estimate amounts payable pursuant to the Company's Long-Term Incentive Plan based on the estimated fair value of assets within each fund managed by the Company at each reporting period. This has resulted in an expense during the period of $5,838,000. This requirement to accrue potential LTIP payments to employees of $5,838,000, without recognizing the related income that would be earned by the Company to make those payments, resulted in a loss for the period. LTIP payments are made if and when the corresponding performance fees are earned in the future.
AUM as at June 30, 2010, amounted to $978,532,000, a decrease of $20,703,000 from the prior quarter, primarily as a result of distributions made to TCC VI limited partners and to investors in certain Canadian syndicated investments.
During the second quarter, we continued to seek suitable investments for the uncommitted capital in distressed United States fund Tricon IX and Canadian dedicated fund Tricon X and approved commitments to investments of US$60,600,000 and $12,500,000, respectively. In addition to pursuing opportunities in our existing markets, we entered the South Florida market to capitalize on distressed opportunities in the residential sector, thereby increasing our geographic coverage in the U.S. to five major markets or regions. After taking into account the new investments made in Q2 2010 as well as fund reserves and contingencies, remaining fund capital to be invested is US$78,191,000 for Tricon IX and $19,946,000 for Tricon X. We anticipate that Tricon X will be fully invested by the end of 2010, while Tricon IX should be fully invested by the first quarter of 2011. Fundraising activity for a new Canadian fund should commence in the fourth quarter of this year, with marketing for a new US fund commencing in the first quarter of 2011.
Selected Financial Summary
Three Months Ended Six Months Ended
June 30 June 30
2010 2009 2010 2009
Management 978,532,000 1,002,069,000
Revenue 3,087,000 2,909,000 6,315,000 5,740,000
Adjusted EBITDA 1,379,000 1,474,000 3,057,000 3,078,000
(Loss) (1) (9,287,000) (92,000) (9,090,000) 91,000
Income 266,000 713,000 1,270,000 1,629,000
Net Income (Loss)
- Per Share (0.82) (0.01) (0.95) 0.02
Income - Per
Share 0.02 0.09 0.13 0.21
(1) Net Income includes several Non-Recurring items, including a
significant LTIP accrual as mandated by IFRS. Please see MD&A for
Conference Call and Webcast
Management will host a conference call at 10 a.m. ET on August 4, 2010, to discuss the results. Please call 416-644-3419 or 1-866-250-4877. The conference call will also be accessible via webcast at www.triconcapital.com (go to Investor Information - Events). A replay of the conference call will be available until midnight August 11, 2010. To access the replay, call 416-640-1917 or 1-877-289-8525, followed by passcode 4331172 followed by the number sign.
This press release may contain forward-looking statements relating to expected future events and financial and operating results and projections of the Company, including statements regarding future plans, objectives or economic performance that involve risks and uncertainties. Forward-looking information and statements are based on management's expectations, intentions and assumptions. If unknown risks arise, or if any of the assumptions underlying the forward-looking statements prove incorrect, actual results may differ materially from management expectations as projected in such forward-looking statements. Examples of such risks include, but are not limited to, the risks disclosed in the Company's final prospectus dated May 14, 2010, as available at www.sedar.com and the risks described in the Company's continuous disclosure materials from time-to-time. The Company disclaims any intention or obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, unless required by applicable law.
Tricon measures the success of its business by employing several key performance indicators which are not recognized under IFRS, including AUM, EBITDA, Adjusted Base EBITDA, Adjusted EBITDA and Adjusted Net Income. These indicators should not be considered an alternative to IFRS financial measures such as net income. Non-IFRS financial measures do not have standardized definitions prescribed by IFRS and are therefore unlikely to be comparable with other issuers or companies. Refer to our Management & Discussion Analysis for a reconciliation of the Non-IFRS measures to the closest comparable IFRS measures.
About Tricon Capital Group Inc.
Founded in 1988, Tricon is one of North America's pre-eminent asset managers focused on the residential real estate development industry with approximately $1 billion of assets under management. Tricon participates in the development of residential properties in Canada and the United States by acting as the manager of limited partnerships that provide financing, typically in the form of participating loans, to developers, with a specific focus on residential land development, single-family homebuilding, multi-family construction and retail developed in conjunction with residential projects. Since inception, Tricon has invested in approximately 140 transactions for development projects valued at $8.5 billion. More information about Tricon is available at www.triconcapital.com.
SOURCE Tricon Capital Group
For further information: For further information: June Alikhan, Chief Financial Officer, Tel: 416-928-4116, Email: firstname.lastname@example.org; Gary Berman, President, Tel: 416-928-4122, Email: email@example.com