Hello, and welcome to Alaris Q1 2022 earnings release conference call. At this time, all participants are in a listen-only mode. After the speaker presentation, there will be a question-and-answer session. To ask a question during this session, you will need to press star one on your telephone. If you require any further assistance, please press star zero. It is now my pleasure to introduce Chief Financial Officer, Amanda Frazer. Thank you, Andrew. Good morning, ladies and gentlemen, and welcome to the Alaris Equity Partners conference call and webcast to discuss the financial results for the three months ended March 31st, 2022. I'm Amanda Frazer, Chief Financial Officer of Alaris, and I'm joined on this call by Steve King, President and Chief Executive Officer. After a short presentation from Steve and I, there will be a question-and-answer session. The lines will be placed on mute until then to avoid background noise. Before I begin, I would like to remind our listeners that all amounts given are in Canadian dollars, unless otherwise noted. Listeners are cautioned that comments made today may contain forward-looking information. This forward-looking information is based upon a number of important factors and assumptions, and as a result, actual results could differ materially. Additional information concerning the underlying factors, assumptions and risks is available in last night's press release and our MD&A for the period under the headings forward-looking statements and risk factors, copies of which are available on SEDAR at sedar.com, as well as our website. non-IFRS data is also presented and may differ from the way other companies present such data. As with the forward-looking statements, please refer to last night's press release and our MD&A for the period for more clarification regarding non-IFRS measures. I appreciate everyone taking the time to join us this morning. We are excited to present our Q1 results. I'll begin with a brief summary of the Q1 highlights. Q1 revenue of CAD 39.6 million and cash from operations prior to changes in working capital of CAD 35.4 million were increases of 23% and 40%, respectively, as compared to the prior period. Both were boosted by higher than expected common dividends from FNC, Amur and D&M. The additional investments throughout 2021 and follow-on in 2022, and the approximate 2.4% positive reset realized on the portfolio. We deployed a further $65 million in the quarter to BCC. The follow-on preferred equity contribution attracts an $8.5 million annual distribution. We are happy to report that, though it took much longer than anticipated, we received proceeds of $67.1 million from the redemption of Kimco subsequent to Q1. This represents all contractually owed distributions outstanding of $13.7 million, the full value of our preferred investment and exit premium on our units for a total of $35.7 million, a negotiated share of the common equity proceeds of $9 million. Only $7.9 million have been recorded until the release of the additional proceeds from escrow. Full payment of all promissory notes of $9.8 million. This represents an unlevered IRR of over 13% on the combined preferred equity and debt. This was an excellent result for a challenged partner and demonstrates some lessons learned on previous files. Our monitoring team identified challenges, and we brought in a third party to help with an investigation. We moved quickly to remove management and brought in our own group to address the identified issues. We waited patiently for the distributions to return to contracted levels while never foregoing unpaid amounts. We stayed involved with new management throughout the process, and when the opportunity to realize this return presented itself, we strongly encouraged management to redeem our position. The net impact from the receipt of $67.1 from Kimco and the redeployment into BCC is incremental revenue on that capital of $2.9 million annually, a 51% increase over the annual cash paid from Kimco. Q1 is generally a quiet quarter for our fair value adjustments, given the proximity to the year-end audit. Our only fair value adjustment was to recognize a CAD 9.9 million or CAD 0.22 per unit gain resulting from the Kimco transaction. As discussed at year-end, in the quarter, we completed a CAD 65 million bought deal offering of senior unsecured debentures that was used to reduce our senior debt outstanding. We currently have CAD 137 million of capacity available for deployment. Our portfolio continues to perform extremely well, with the weighted average ECR continuing to be over 1.75x. 14 of our 18 partners have an ECR over 1.5, and 10 of those are over 2x. Brown & Settle's ECR moved into the 1.2-1.5 range with the reporting of their March results, and we expect full payments of all outstanding deferred distributions, $2.2 million, in the coming weeks. Overall, we're extremely pleased with the continued performance of our partners. Our outlook calls for CAD 38.9 million of revenue in Q2, excluding the CAD 17.2 million from Kimco, or a total revenue in the quarter of CAD 56.1 million. The expected 12-month run rate is CAD 154.8 million before Kimco. I'll turn it over to Steve now for his thoughts. Great. Thanks, Amanda, and thanks everybody for tuning in. Obviously, we continue to track the growth trajectory that we've been on for the last several quarters now. For a low volatility cash flow company that pays an attractive dividend yield, being able to produce an increase in operating cash flow by almost 26% on a per unit basis is an exceptional number. Events such as the Kimco redemption and the reinvestment into BCC that Amanda just discussed have set the stage for continued solid results for the rest of the year. Despite record levels of capital deployment over the last 18 months, our balance sheet is in excellent shape, ample room for growth, full proceeds from Kimco. Two different public capital raises in the last year have allowed us to take advantage of our position in the North American private equity industry and provide access to a much sought-after asset class that the vast majority of investors would never have access to other than through Alaris. Looking forward, it's difficult to predict how the various market forces are gonna play out, between the lasting impact of the pandemic to the impacts of the Russian invasion on Ukraine, general supply chain issues, and the growing threat of inflation and interest rate increases. We're in the midst of a very volatile world, obviously. Given the nature of our partners' businesses, being largely required service businesses, our exposure to these forces are actually quite limited. The Earnings Coverage Ratio of our partners remain at historical highs, and they also are quite under-levered, so the risk of interest rate increases for our partners is quite minimal. We also feel very comfortable that, given our dividend payout ratio is in the low sixties, we're generating a meaningful amount of free cash flow to help fund our ongoing growth, and we will not be beholden to a very volatile capital market. The one place that we're seeing an impact is on the number of quality companies that are going out to the market to access private equity capital. We've noticed a noticeable decrease in the number of opportunities being presented to us by the advisory network over the last two months. With that being said, as a niche player in the broader private equity industry, we've always found unique opportunities to deploy our capital in any scenario. We're uniquely suited to withstand an inflationary environment as well, given that our cash distributions we receive from our partners go up with the revenue that they achieve on an annual basis. In an inflationary environment, those resets should elevate, giving our company a higher growth rate. Higher interest rates actually help us quite a bit in our capital deployment program as well because it's less attractive to use traditional private equity options that have high levels of debt involved. We have not seen a meaningful decrease in the valuations in the private markets as of yet, despite the decline in the public markets. This is largely due, in my opinion, to the massive amount of undeployed capital that still remains in the private markets. We'll continue to be cautious in our growth and stay vigilant to our investment criteria as we work our way through this volatile time. We will only do transactions where we feel that the partner company can successfully navigate all of the risk factors that we see before us. Thank you very much for your time, and Andrew will open it up to any questions. Thank you. As a reminder, to ask a question, you will need to press star one on your telephone. If your question has been answered or you wish to remove yourself from the queue, please press the pound key. Our first question comes from the line of Jeff Fenwick with Cormark Securities. Hi. Good morning, guys. Morning, Jeff. Steve, I thought maybe we just check in on a couple of the partners there. I mean, the BCC investment that you made just recently, you know, now makes that your largest partner by a pretty wide margin. Can you maybe just speak to that business in the context of sort of potential cyclical pressures that are there? I mean, I think of that as being a consumer discretionary type of business. What is your comfort level around the dynamics of the BCC business? Yeah. It's significant, Jeff. When we first invested in BCC just over four years ago, that was one of our main areas of diligence. If you look back at that industry, even in 2008, 2009 crash, there was really a very small decline in that industry. They are kind of specialists in liposuction. They don't do some of the larger ticket type of plastic surgery that may be a little bit more discretionary. Yeah, they have been full systems go really ever since they got shut down from COVID. They've through a couple of acquisitions and just tremendous growth. They've actually tripled their earnings over the last three years. It's been a huge success story. It's, you know, a company with a very high coverage ratio even after our new deployment into them. They don't have any debt on their balance sheet, so it's certainly one of our safest investments. Okay. This latest investment, it sounded like it was opportunistic. This was, I guess an external partner that was a sort of like a franchise relationship, or what was the background of this transaction that made it attractive for them? All of their stores are corporate stores. It's not a franchise system, but they did have one licensee that had licensed their brand from them and had grown it to about 14 locations. They had a right of first refusal on that company. The doctor that started it was looking to exit. They exercised that ROFR and bought it. It was extremely accretive for BCC because as a licensee, it didn't trade at a very high multiple because BCC had full control over whether that license was renewed. It didn't command the kind of multiple that BCC would. It's very attractive deal for them, and they couldn't have been happier to use our capital for something like that. Great. That's great color. Maybe one other one here on Planet Fitness. Certainly, I think some pretty positive commentary about people getting back to the gym and activity picking up at Planet Fitness. I guess they're now making those catch-up payments, I assume that just sort of run rate. I think the plan was that to pay you back over several years the amounts owed. Any thought there that there might be a window where they might choose to accelerate those payments if the business is doing really well? They could. They're waiting on something that could accelerate that, in terms of a rebate from the U.S. government, that could allow us to get a lump sum. You know, in general, we're not in a rush. The company has so many great growth opportunities. We don't want to make them capital constrained just by trying to catch up on our deferred distributions, which we know we're gonna get. The company's you know in excess of 2019 levels now, pre-COVID. All of their metrics are excellent. Great. Maybe one more of the metrics you referred to here is your operating cash flow before working capital. Just a question on that one, because the CFO pre-working capital, it adds back the finance expense on the income statement, but you don't deduct back out the actual cash interest paid. I don't know if that's a question for Amanda or not, you know, why would you not deduct that from that CFO metric? What we were trying to replace with this metric was our normalized EBITDA. Changes in the non-GAAP measures don't allow us to remove from EBITDA things that occur every quarter. You know, we wanted to remove the unrealized gains, some of the other items. Really, we chose to put that above the interest line really to track something as close to normalized EBITDA as we could. Okay. That's helpful. Previously, what we were disclosing as normalized EBITDA. Perfect. Thanks. Okay, that's great. Thanks for the answers there. I'll get back in the queue. Okay. Thanks, Jeff. Thank you. Once again, ladies and gentlemen, if you have a question, please press star one on your telephone. Our next question comes from the line of Zachary Evershed with National Bank Financial. Morning, everyone. Congrats on the quarter. Thanks, Zach. With Sett and Kimco out the door, are there any other partners giving signs of a redemption in the near future? There could be. It's interesting because it's something that quite frankly, I would be quite comfortable with in this environment with the cost of our capital going up, especially on the debt side. You know, having a combination of free cash flow, some recycling of capital through redemptions, and the room on our credit line. I like the fact that I don't think we're gonna be in any need to go to the market in the foreseeable future. There's a couple of situations where we have some common equity in addition to our pref, where we could crystallize some significant gains, and I would very much welcome that. We do have the opportunity set in front of us to redeploy that capital. I'm not worried about, you know, having declines in our revenue or increases in our payout ratio or anything like that. It's really just kinda balancing one financing method versus the other. Like I said, you know, crystallizing some gains, especially on some of our common equity positions, would be, I think, a nice thing for us in this year. Nothing imminent at all, but there are a couple of companies in our portfolio that we're having discussions with about that. So yeah, certainly not anything in the next few months, but we'll see after that. That's helpful. Thanks. On that opportunity set, what's the rough split between new and follow-on investments in the pipeline? Yeah, we've got both. As I mentioned, you know, the number of deals being shown to us has gone down, which is not surprising. If you're a really successful profitable company that isn't desperate, now would not be the time that you would choose to go to the market. You know, it's not surprising that we're seeing a little bit of a decrease in the kind of companies that we're looking for. Like I said, we're kind of a niche investor and so I think what you can expect is maybe the average deal size to be a little smaller as some of the big companies just wait it out. Some of the kind of more niche-y, smaller type investments are still gonna be there for us. That's typically the way it's worked. You know, even going through 2008, 2009, that's what we saw as well, although that was obviously a much bigger impact than this one. We also do have several follow-on opportunities with our current partners as well. I'm still confident in our ability to deploy capital this year, but it could be slightly slower than what it's been for the last 18 months. Gotcha. In terms of your leverage comfort, do you like the balance sheet where it currently stands, or would you like to take it a bit higher for efficiency? I think that where it currently stands is probably a good place to be. You know, there's a lot of interest restrictions and some new, maybe limiting factors for deducting interest within Canada. I think that we're probably in the best place to take advantage of the tax deductibility of the interest on this debt. Without growing larger, I think that we're probably, you know, sitting in a good spot. The other thing I would mention too is we're feeling pretty good, having, you know, a decent amount of our debt in fixed public debentures that we did over the last few years. We don't have a huge sensitivity to the increasing interest rates. Great color, guys. Thanks. I'll turn it over. Great. Thank you. Thank you. Our next question comes from the line of Trevor Reynolds with Acumen Capital. Morning, guys. Hi, Trevor. Just on the LMS, that is one that you highlighted as being previously kinda subject to commodity price risk and inflation. Just wondering where that one sits. Yeah. The steel market continues to be just the Wild West. It has gone up dramatically, even since we spoke five weeks ago on our last quarter call. The difficult position for LMS and their customers is that, you know, if you're, say, you're building a condo building, you're a condo developer, you know, and you had a bid from LMS that the rebar was gonna cost, you know, X dollars, that rebar triples in price, but you've pre-sold all of your condo units to finance the development. You know, you've built in a set margin based on what you thought the cost base was. It's very difficult to pass on some of that volatility immediately for projects that are already underway. The good news for LMS is that they've been able to negotiate cost escalation clauses into their new contracts, and that's. They've been doing this for about 30 years, and that's the first time that customers have agreed to basically take the risk on steel price increases going forward. Long term, I think it's actually gonna be a very good thing for their business model that they've now been able to have that as the standard contract. They've probably got about six months where they're gonna have to chew through some very low to no margin business, because of not being able to pass it on in the very short term. Long term, we don't have any concerns. Very strong company, strong demand. We've got, you know, probably a six-month period here before those new types of contracts kick in, and they can get back to kind of more regular margins. Expect to maybe see a negative revision on that one in 2023? It's gonna be close. I don't think it's gonna be anything significant. There won't be like the decline we had from them last year. You know, we're not expecting any gains from it, that's for sure. I don't think it'll be as bad as last year. Okay, great. Just one more just on the Edgewater. Maybe you can just provide an update on the Edgewater. That's obviously the only one with ECR kinda in the 1-1.2 range. Maybe just an update on that. Yeah. Edgewater actually has improved over the last couple of months, and we're actually very optimistic about their continued recovery. A lot of the Department of Energy sites that they are at have fully reopened. One of the nice things there is with the Russia-Ukraine war, a lot of the budgets for Department of Defense and Energy have been increased dramatically. Things that usually take a lot of time have been streamlined and put through by the Democrats very quickly. They're seeing good gains actually in their pipeline and workload. Perfect. Those are my questions. Thanks. Great. Thanks very much. Thank you. I'm showing no further questions. With that, I'll turn the call back over to CEO Steve King for any closing remarks. Thank you very much, everybody. I know there is only a few weeks since our Q4, so it wasn't a whole lot to talk about. You know, we're just ecstatic with how our portfolio is behaving and kind of where we sit in the market. We look forward to reporting another good quarter in Q2. Thanks very much. Ladies and gentlemen, this concludes today's conference call. Thank you for participating, and you may now disconnect.