Teranet Reports Record Year-End Results for 2007

    Delivers Solid Growth in Core Business and Other Value-Added Services


    -  Distributable Cash(*) of $167.6 million or $1.08 per unit
    -  Record revenue of $253.7 million, an increase of 6.1%
    -  Adjusted EBITDA(*) up 14.8% to $183.6 million
    -  Other value-added services revenue grows 16%
    -  Payout ratio of 70% for the year and 70% since inception of the

    TORONTO, March 12 /CNW/ - Teranet Income Fund (TSX: TF.UN) today
announced its fourth quarter and year-end results for the period ended
December 31, 2007.
    "In our first full fiscal year as an income trust, Teranet has
successfully delivered on our commitments to investors at the time of our
initial public offering, steadily building our business, growing Adjusted
EBITDA(*) and Distributable Cash(*) and increasing our monthly cash distributions
to Unitholders," said Aris Kaplanis, President and Chief Executive Officer of
Teranet Inc. "Teranet continues to benefit from a very stable business model,
with continued organic growth in our core business and a solid platform to
drive new initiatives. We have delivered progress in our growth strategy, and
we have the financial flexibility to further execute that strategy in 2008."
    The Fund began operations on June 16, 2006. Therefore, the results for
the Fund for the year ended December 31, 2007 are compared to the combined
operating results of Teranet Inc. for the period January 1 to June 15, 2006,
and the Fund for the period June 16 to December 31, 2006.
    Total revenue for the fourth quarter was $63.3 million, an increase of
10.4% from $57.3 million in the same period in 2006. The growth is mainly
attributable to a rise in real estate activity and an increase in the parcel
base in the Electronic Land Registration System (ELRS), in addition to higher
revenue from other value-added services. Revenue from other value-added
services for the quarter rose 12% to $7.5 million, reflecting continued strong
market adoption. For the year, total revenue grew 6.1% to $253.7 million,
including other value-added services growth of 16%.
    Teranet's automated parcel base grew 6.2% over the prior year to
5.18 million properties, representing 94.1% of the estimated provincial parcel
base, up from 4.88 million properties and 90.3% of the provincial parcel base
a year earlier. Registration volumes for the quarter were 516,481, an increase
of 13.3% from 2006, while search volumes grew by 5.0% to 612,917 transactions.
For the full year period, registration volumes rose 5.1% to 2,017,387 while
search volumes rose 4.7% to 2,577,115.
    Total operating expenses before amortization, other income, interest
expense and income taxes for the fourth quarter of 2007 were $19.6 million,
down 14.1% from 2006 due to lower compensation costs and partially offset by
higher expenses incurred for new business initiatives. Operating expenses for
the year were $70.1 million, down 15.2% from 2006 combined results. The year
ended December 31, 2006 included $3.5 million in transaction costs that were
incurred in connection with the creation of the Fund. Excluding this item,
other operating costs decreased by 11.4% year-over-year, primarily as a result
of cost reduction and cost containment initiatives, lower compensation related
costs, and a number of expenditures incurred in 2006 that did not recur in
2007. Partially offsetting these cost reductions were increased public
reporting costs and expenses associated with new business initiatives.
    Adjusted EBITDA for the fourth quarter of 2007 rose 26.5% to
$43.7 million, compared to $34.5 million in the prior year, while the Adjusted
EBITDA margin percentage improved to 69% from 60%. Both improvements are
primarily the result of higher revenue and successful cost reduction and cost
containment initiatives. For the full year period, Adjusted EBITDA was
$183.6 million, an increase of 14.8% from $159.9 million in the prior year,
and margin percentages improved to 72% from 67%, primarily due to the same
reasons as for the quarter.
    Distributable Cash for the fourth quarter of 2007 grew 32.7% to
$39.2 million or $0.25 per unit, up from $29.6 million or $0.19 per unit in
the same quarter last year due primarily to higher revenues and successful
cost containment and cost reduction initiatives. Distributions declared were
$29.8 million or $0.1925 per unit, resulting in a payout ratio of 76% for the
quarter. For the full year period, Distributable Cash was $167.6 million or
$1.08 per unit, and distributions declared were $117.0 million or $0.76 per
unit, for a payout ratio of 70%.
    Teranet continues to make investments in its future with total fourth
quarter capital expenditures of $9.6 million, consisting of deferred ELRS
implementation costs of $8.1 million and maintenance capital expenditures of
$1.5 million. Maintenance capital expenditures in the fourth quarter increased
by $131 thousand compared to the prior year primarily due to timing of
expenditures, while deferred ELRS implementation costs increased by
$2.7 million primarily as a result of higher compensation and related costs.
For the full year period, total capital expenditures were $36.0 million,
consisting of $31.9 million in deferred ELRS implementation costs and
$4.1 million in maintenance capital expenditures. This compares to $31.0
million in total capital expenditures in 2006.
    Teranet's cash position at December 31, 2007 was $224.2 million, of which
$95.1 million was restricted in nature.
    Subsequent to year-end, Teranet made three announcements indicating
progress in its growth strategy. In February 2008, Teranet completed the
acquisition of Do Process Software Ltd., a leading provider of workflow
software for lawyers. The tuck-in acquisition is an excellent strategic fit
that gives Teranet the opportunity to increase its offering across Canada,
broaden its services to the legal community and extend its customer base into
different practices of law.
    In February 2008, Teranet announced a contract with the City of Toronto
to collect the new Municipal Land Transfer Tax on their behalf. On February 1,
2008, Teranet's Teraview(R) software began to calculate and collect the
Municipal Land Transfer Tax for the City of Toronto. Teranet is also
processing rebates for eligible home buyers.
    Also in February, Teranet announced a contract in the healthcare sector,
extending its early initiatives in this high potential market. Agfa HealthCare
chose Teranet to provide hosting services for 33 hospitals across Ontario.
Teranet already provides network management, disaster recovery and online
payment services for a variety of hospitals in the province. This project is
consistent with Teranet's strategy in the healthcare sector of steadily
building brand awareness and focusing on partnerships with established
healthcare leaders.

    2008 Outlook

    Teranet's management team is optimistic about opportunities for 2008. As
the exclusive provider of electronic land registrations and searches in
Ontario, the Fund has excellent market stability. The base on which the Fund
earns a substantial portion of its revenue is expected to grow as the Company
continues to automate properties in Ontario, thereby increasing the automated
parcel base. At the same time, the Company expects to benefit from organic
growth in the parcel base.
    Management estimates that approximately 35% to 45% of the Fund's revenue
is tied directly to real estate purchase and sale activity. That activity is
expected to be healthy, but may not sustain the particularly strong rate we
saw in 2007. A downturn and/or recession in the U.S. economy will undoubtedly
affect aspects of Ontario's economy, and we are prepared to see a decreased
pace of economic growth in Ontario. However, there appears to be a solid
foundation for our housing market. We believe the price and sales growth in
Ontario's real estate have been driven by strong market fundamentals, not by
the type of speculation or lending practices that characterized the U.S.
situation. The subprime mortgage problems in the U.S. have not spilled over
into the Canadian housing market. The fundamentals supporting the real estate
market in Ontario continue to include high employment rates, historically low
interest rates and net positive immigration.
    Management believes that the performance of the Fund is on track to meet
ongoing requirements for working capital and capital expenditures and to
sustain monthly distributions to Unitholders. Management also believes it will
achieve its objective of growing Distributable Cash for 2008.
    Teranet's management's discussion and analysis and consolidated financial
statements and accompanying notes are available on the company's web site at
www.teranet.ca or on www.sedar.com.

    Selected Financial Highlights
    (in thousands of dollars except Adjusted EBITDA margin percentages, per
    unit amounts, payout ratio, volume, parcel base and registration activity
    rate data)

                             THREE-MONTH            YEAR ENDED    PERIOD FROM
                             PERIOD ENDED           DECEMBER 31    JUNE 16 TO
                             DECEMBER 31           (2007 AUDITED, DECEMBER 31
                             (UNAUDITED)          2006 UNAUDITED)   (AUDITED)
                          2007(1)    2006(1)    2007(2)    2006(3)    2006(2)

    Revenue            $  63,277  $  57,328  $ 253,681  $ 239,000  $ 134,459
    Operating expenses $  19,594  $  22,800  $  70,075  $  82,616  $  41,012
    Adjusted EBITDA    $  43,683  $  34,528  $ 183,606  $ 159,908  $  93,447
    Adjusted EBITDA
     margin %                 69%        60%        72%        67%        70%

    Distributable Cash $  39,249  $  29,584  $ 167,641          -  $  88,327
    Distributable Cash
     per unit          $  0.2532  $  0.1909  $  1.0817          -  $  0.5699
     declared          $  29,834  $  29,059  $ 117,013          -  $  62,645
     declared per unit $  0.1925  $  0.1875  $  0.7550          -  $  0.4042
    Payout ratio              76%        98%        70%         -         71%

     volumes             516,481    455,698  2,017,387  1,920,301  1,087,797
    Search volumes       612,917    583,915  2,577,115  2,460,989  1,330,230

    Parcel Base as
     at December 31:        2007       2006       2007       2006       2006
     (Automated)       5,180,408  4,876,691  5,180,408  4,876,691  4,876,691
    Automated %             94.1%      90.3%      94.1%      90.3%      90.3%

     Activity Rate(4)
     Automated and
     Registrations)        0.398      0.372      0.395      0.396        N/A
     Activity Rate(4)      0.402      0.377      0.401      0.408        N/A

    (1) These amounts are derived from the Fund's internally prepared interim
        unaudited consolidated financial statements dated December 31, 2007
        and December 31, 2006.
    (2) These amounts are derived from the Fund's audited consolidated
        financial statements dated December 31, 2007 and December 31, 2006.
    (3) These amounts include results for the Company for the period from
        January 1, 2006 to June 15, 2006 and results from the Fund for the
        period from June 16, 2006 to December 31, 2006. Results for all
        periods prior to June 16, 2006 are based on results as presented in
        internally prepared financial statements for the Company. The Fund's
        results for the period from June 16, 2006 to December 31, 2006 are
        included in the combined results for the 12-month period ended
        December 31, 2006 and certain comparative figures have been
        reclassified to conform to the current year's presentation.
    (4) Quarterly estimated provincial and Teranet Registration Activity
        Rates are annualized rates.

    Conference Call & Webcast

    Teranet will hold a conference call and live audio webcast on Wednesday,
March 12, 2008 at 10 a.m. (ET) to discuss the Fund's financial results for the
period ended December 31, 2007.
    To participate in the teleconference, please dial 416-644-3415 or
1-800-733-7560. To access the live audio webcast, please visit Teranet's web
site at www.teranet.ca.
    The call will be archived on the web site as a webcast and a podcast. A
replay of the conference call will be available until end of day on Wednesday,
March 19, 2008. To access the replay, please dial 416-640-1917 or
1-877-289-8525 and enter the passcode 21263408 followed by the number sign.

    About Teranet Income Fund and Teranet

    Teranet Income Fund is an unincorporated, open-ended trust established
under the laws of Ontario by way of a declaration of trust. The Fund was
created to indirectly acquire all of the outstanding shares of Teranet Inc.
The units of the Fund trade on the Toronto Stock Exchange under the symbol
    Teranet is a leading provider of integrated land-based information
products and services. Teranet operates in Ontario and provides access to the
Ontario Electronic Land Registration System ("ELRS") through its proprietary
Teraview(R) application. This product enables customers to conduct electronic
registrations as well as title and writ searches relating to real property.
Teranet has the exclusive right to access the data in and operate the ELRS and
the Writs of Execution database, and create and market value-added products
and services in connection with the ELRS and writs until March 31, 2017. These
licences extend on a non-exclusive basis in perpetuity for the ELRS and until
2047 for writs. Teranet has leveraged its core capabilities to create
electronic service offerings in complementary information and e-commerce

    (*) Non-GAAP Measures

    This discussion also makes reference to EBITDA, Adjusted EBITDA and
Distributable Cash to assist in assessing the Fund's financial performance.
EBITDA, Adjusted EBITDA and Distributable Cash, however, are not recognized
earnings measures under generally accepted accounting principles in Canada
(GAAP) and do not have standardized meanings prescribed by GAAP. Therefore,
EBITDA, Adjusted EBITDA and Distributable Cash may not be comparable to
similar measures presented by other issuers. References to EBITDA are to
earnings from operations before interest, income taxes, depreciation,
amortization and other non-operating income and expenses. References to
Adjusted EBITDA are to earnings from operations before interest, income taxes,
depreciation, amortization, other non-operating income and expenses and
non-recurring items. References to Distributable Cash are to cash flow from
operating activities adjusted for items listed in the reconciliation provided
in the Management's Discussion and Analysis of Financial Condition and Results
of Operations. Distributable Cash is not intended to be representative of cash
flow or results of operations determined in accordance with GAAP. As the Fund
intends to pay in equal monthly distribution amounts on an ongoing basis,
management believes that EBITDA, Adjusted EBITDA and Distributable Cash are
important measures in evaluating its performance.

    Forward-Looking Statements

    This news release contains statements that, other than statements of
historical fact, may be forward-looking statements about the objectives,
financial condition and results of operations of the Fund. These statements
are forward-looking and reflect management's current views and are based on
certain assumptions and expectations as of March 11, 2008. Actual results
could be materially different from expectations if known or unknown risks
affect the business, or if estimates or assumptions turn out to be inaccurate.
No forward-looking statement is a guarantee of future results. Investors are
cautioned not to place undue reliance on such forward-looking statements.
Forward-looking statements do not take into account the effect that
transactions or non-recurring items announced or occurring after the
statements are made may have on the business. Teranet disclaims any intention
or obligation to update any forward-looking statement even if new information
becomes available, as a result of future events or for any other reason,
except as required by law. These statements are subject to a number of risks
described in the Risk Factors section of the MD&A, which is available at
www.sedar.com. Risk Factors may cause actual results to differ materially from
those contained in forward-looking statements.

For further information:

For further information: Bonnie Foster, Vice President Corporate
Communications, (416) 643-1095, bonnie.foster@teranet.ca; Tanis Robinson,
Manager, Investor Relations, (416) 643-1096, tanis.robinson@teranet.ca,
www.teranet.ca; 1 Adelaide Street East, Suite 600, Toronto, Ontario, M5C 2V9,
Canada, Phone (416) 360-8783, www.teranet.ca

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