Good day, and thank you for standing by. Welcome to the first quarter 2024 Alaris Earnings Conference Call. At this time, all participants are on listen-only mode. After the speaker's presentation, there will be a question and answer session. To ask a question during the session, you'll need to press star one one on your telephone. You will then hear an automated message advising your hand is raised. To withdraw your question, please press star one one again. Please be advised that today's conference is being recorded. I would now like to hand the conference over to your first speaker today, Amanda Frazer, Chief Financial Officer. Please go ahead. Thank you, Marvin. We appreciate everyone taking the time to join us this morning as we present our Q1 results, and I'm joined on this call by Steve King, President and Chief Executive Officer of Alaris. Before we begin, I'd 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, and forward-looking information is based upon a number of important factors and assumptions, and 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 under the headings Forward-Looking Statements and Risk Factors, copies of which are available on SEDAR at sedarplus.com, as well as our website. Non-IFRS data is also presented and may differ from the way that other companies present this data. As with the forward-looking statements, please refer to last night's press release and our MD&A for more clarification regarding the non-IFRS measures. As discussed last quarter with the evolution of Alaris investment model over the last few years, beginning with the introduction of common equity and continuing to evolve with the expansion of SPV investments. In Q1, Alaris determined it had met the requirements of an investment entity under IFRS 10. As a result of this prescribed change, Alaris no longer consolidates in its investment entity subsidiaries into its financial results. These entities, which are now referred to as acquisition entities in our financial statements, include Alaris Equity Partners USA, the subsidiary which holds Alaris's US investments, as well as Alaris Equity Partners, Inc, which holds Alaris's Canadian investments, in addition to the senior credit facility and convertible debentures. These entities are now reflected in the trust balance sheet as corporate investments and are held at fair value. While this method of accounting has had a pervasive effect on the financial statements on the face of the statements, and IFRS requires that this change in accounting is made prospectively, and as a result, prior periods are not restated. So note disclosures surrounding corporate investments have been located in note three, have been updated to contain as many details as possible with regards to the acquisition entities results. And the MD&A has been crafted in a way that, to the extent possible, information is presented alongside its prior quarter comparatives. Accordingly, users of the interim reporting should exercise caution in reviewing, considering, and drawing conclusions from period-to-period comparison and changes. Direct comparisons between dates or across periods may be inappropriate or not meaningful if they're not considered carefully and in context. Aside from this accounting change, Q1 was a fairly standard quarter for Alaris. Net book value increased by CAD 0.54 per unit in the quarter to CAD 21.66, which continues to be a record for Alaris, driven by earnings, less the CAD 0.34 per unit dividend paid in the quarter. Alaris's partner distribution and transaction fee revenue of CAD 39.3 million was in line with previous guidance of CAD 39.2 million, despite Heritage Restoration deferring distributions for 2024 and ahead of Q1... Sorry, and revenue was ahead of Q1 2023's result of CAD 36.7 million. Adjusted EBITDA, which adjusts to put Q1 2024 on the same comparative basis as Q1 2023, as well as removing one-time items such as the deconsolidation gain as a result of this change in accounting and the legal costs related to Sandbox in Q1 of 2023, was CAD 39.1 million per unit, or CAD 0.86, which represents an increase of approximately 28% as compared to Q1 2023, of CAD 0.67 per unit. The actual payout ratio for the quarter was 66% in Q1, driven by Alaris' net distributable cash flow of CAD 0.51 per unit. Subsequent to the quarter, Brown & Settle redeemed Alaris' investment for gross proceeds of $71.5 million, resulting in total return on the Brown & Settle investment of $30.8 million, representing an unlevered IRR of 15% and a multiple of capital invested of 1.5x. Alaris expects to use the incremental borrowing capacity under the, under its credit facility as a result of the redemption of Brown & Settle to repay Alaris' convertible debentures at their maturity date in June of 2024. Alaris currently has CAD 305 million of capacity available on the credit facility to fund both future transactions and the convertible debenture repayment. Our portfolio updates include continued weighted average of approximately 1.5x, with 11 out of 20 partners continuing to be above this threshold. With regards to partner performance, Sono Bello continues to see growth in the first quarter as they execute on their development and expansion plans. Organic growth through the quarter saw Sono Bello add five locations for a total of 103 centers. Their fair value increased by $2.8 million in the quarter. Edgewater's results in 2023 and sustained growth expectations for 2024 have impacted future reset expectations, with positive impacts to future cash flow expected, and fair value has increased by $2.4 million in the quarter. Fleet continues to grow with another record year expected for their fiscal year ending June of 2024. This continued performance has resulted in an increase in fair value, $2.3 million. LMS's results to begin 2024 have been a significant improvement over the prior year, resulting in the rebound in ECR to above two times. With these improvements, we expect LMS to begin catch-up payments on their deferred distributions in the later half of the year. And based on an actual growth in our reset metric of gross profit of 13.9% rather than 12% expected at year-end, and the early results for 2024, there was a further increase in our value of LMS during the quarter of CAD 1.1 million, in addition to CAD 4.3 million, which increased last quarter. Ohana continues to execute on its growth plans. The impact of this growth and anticipated increase in cash flows has resulted in an increase of $1.1 million in the valuation of our preferred equity. This week, Planet Fitness corporate announced pricing increase for the system, increasing pricing from $10-$15 per month. This change will drive an increase in earnings over time as incremental members at this new pricing build in the membership base. Alaris has brought in a professional management team to facilitate a management transition within Heritage due to the expedited retirement of the CEO. The company is also navigating margin decreases on certain projects, and to provide cash flow flexibility to the business during this period, Heritage has deferred our distribution for the quarter and is expected to defer their distribution for 2024. Other less significant impacts to fair value in the quarter were driven by GWM, Shipyard, Accscient, and Carey. Of our 20 partners, 11 have either no debt or less than 1x debt as compared to EBITDA in the business, and our outlook calls for CAD 39.3 million of revenue in Q2 and a 12-month run rate of CAD 157.7 million, with no changes to our G&A expectations from year-end of CAD 16.5 million. On that note, I'll turn it over to Steve for his comments. Great. Thanks, Amanda. Thanks, everybody, for tuning in. Obviously, coming so close to our year-end report from six weeks ago, our first quarter delivered little in terms of surprises, but that's exactly what we try and deliver consistently and have so for many years. The value of our portfolio on a per-share basis continues to consistently climb, delivering the steady cash yield that we've been known for, as well as building some very valuable equity value at the same time. One of the notes that I'll make on the change in accounting policy is that it actually does have some practical advantages for us on a day-to-day basis. One of the problems that we've had in the past is being a little bit hamstrung if a deal required more control, more equity participation than around 40% or as deemed by KPMG. Their financials would have to have been consolidated into ours, which is a non-starter, both for the private companies that we invest in as well as ourselves. Under this new accounting method, that's no longer an issue. And if a company has an opportunity that we've already invested in, where we can invest more capital and take more control because it's a great investment opportunity, we can now do so. If a company goes under default and we need to step in and take control, we can now do so without fearing the complexities of consolidation. So actual practical value for us, as well as coming into line with, with what other companies in our industry do. Subsequent to quarter end, Alaris added our 20th current partner to our portfolio in Cresa LLC. Cresa is one of the top commercial real estate advisory firms in the world, with offices in 35 different markets. Cresa's really created a wonderful niche in advising only tenants and retaining impartiality in their advice to their clients. Our $20 million US investment, it will be all used for growth capital as the company's identified several acquisition targets, and we expect this to be a very active partnership for us in the future, even past this initial investment with follow-ons. On that topic, we have two more follow-on investments that will be made in the very near term that put us right on track to deploy more capital than we did in the previous year, which was our target. Last week, myself and our business development team attended the ACG DealMAX conference, basically known as the Super Bowl of the private equity industry. Hundreds of investment bankers, hundreds of private equity firms all getting together to discuss transactions. And universally, the advisors in attendance agreed that the 18-month lull that the industry has experienced in deal flow is about to end. As interest rates rose and PE firms struggled with borrowing costs and availability, many companies decided to wait to raise money until times were better. Lulls like that can only last for so long before these companies need to transact, and it appears that many are now preparing to go to the market. The list of companies that have been, that have now given mandates to advisors and are preparing to go to market in the second half of this year is very encouraging. With interest rates still high and debt markets still constrained, Alaris is in an excellent position to capitalize on this deal flow. Our mix of less expensive preferred equity, along with flexible common, resonates with entrepreneurs and their advisors and differentiates us in the market. Our third-party capital initiative is also going very well, and we expect to have another transaction closed in the coming months to increase our capital under management and our earning potential without needing to raise money on our own balance sheet. Our reputation in the industry is becoming much better known because of these transactions, which will help us greatly in future initiatives, whether that's more single asset special purpose vehicles or sidecar blind pool funds to increase the speed of our growth and increase our return on equity. So, Marvin, happy to throw it open to questions from the floor now. Thank you. At this time, we'll conduct a question and answer session. As a reminder, to ask a question, you'll need to press star one one on your telephone and wait for your name to be announced. To withdraw your question, please press star one one again. Please stand by while we compile the Q&A roster. Our first question comes from the line of Nik Priebe of CIBC Capital Markets. Your line is now open. Okay, thanks. I'll just start with a question on Heritage. Can you just expand a bit on the nature of setbacks that they had experienced there? And just what the plan is to restore profitability to a level that would exceed the preferred distribution going forward? Sure. Yeah, we've had a really unfortunate and unexpected situation in Heritage. Unfortunately, the majority equity owner and CEO has fallen quite ill and has had to step away very suddenly. So, we have brought in a professional management team to step in on an interim basis. They've done a great job of really kind of solidifying what's going on there in terms of their back office and reporting. The next step is to really buttress the senior management team. We've got a good second level of managers there, but we need a leader. And so that's something that we're working on very closely with the company and really have taken control of that situation. And, it's still a very good business. We think there's, you know, absolutely something to save there and continue on with. And we think it's gonna be a very attractive situation for someone coming in, because there's a fair bit of equity that we can grant somebody new from the past CEO's position. So, we're still very positive on that one. It'll take us a few months to work through it, but we expect to be back to where we were, which is a really solid, steady business as it has been for over 30 years fairly shortly. Okay. And then, maybe on a more positive note, the ECR at LMS has recovered quite sharply, now above two times. What sort of top-line growth trends is that business experiencing? I'm just wondering as it relates to the future reset, given the uncapped nature of that investment. Yeah, if you remember, Nik, the main problem with LMS over the last two years was not on the revenue side, it was on their margin side, as steel prices went crazy post-COVID, and they had to work through that high-priced inventory. O ur reset on this one is on gross profit, not on revenue, and so that was the issue there with our resets and with their earnings. So, that problem, as we expected, worked its way through. We got a nice, almost 14% increase this past year, and we expect probably at least as much this year, if not more so. T hat's based on just more of a normalized gross profit as opposed to huge revenue growth. Got it. Okay, that's helpful. That's it for me for now. I'll pass the line. Thank you. Great. Thank you. One moment for our next question. Again, as a reminder, to ask a question, you will need to press star one one on your telephone. Our next question comes from the line of Gary Ho of Desjardins. Your line is now open. Thanks. Good morning. Steve, just on maybe Planet Fitness, just following up on that, yesterday's announcement to increase base membership fee from 10 to 15. Probably gradual, but what are you hearing from your Planet Fitness partner there? I think in the past, you've also talked about potential follow-on opportunities, as they consolidate other franchisees. Maybe just give us an update on that. Yeah, obviously hugely positive, for our... You know, that's our second largest investment in our portfolio, and, this is something that we've expected for some time. But to be honest, Gary, I'm not sure I expected the $15. I thought they'd go to something like $12.99. So what it's gonna mean in the short term is you're gonna probably have almost nobody canceling their memberships, 'cause you're gonna get grandfathered in at, at $10 a month, and the $15 doesn't start for a couple of months. So I think you're gonna see a rush of new members join in the next two months at $10. So then after that, it'll take a few years to really work through, the membership, 'cause obviously the $15 will just be for new members. But in every fitness chain, you do get some pretty good churn on your members. So, we think over the next few years, that's gonna add, you know, I can't remember what the- 10%-15%, I believe. Yeah, 10%-15%. So, you know, we're looking at, you know, $6 million-$10 million of additional EBITDA in our system. So a really significant positive development for us. And, you know, we've got a great management team there. And, yes, they're, you know, Ohana is definitely a partner that we're looking at doing more with. And, we think there's good acquisition opportunities out there, where there's smaller club owners that you know, with the cost of building and maintaining clubs having increased over the last few years, borrowing costs being so much higher now than they used to be, we think there's small acquisitions to be done here. And, we've got a lot of white space. We have 78 clubs today. We've got identified growth of another 55 on top of that, just within our current areas, and so that will be the goal of our acquisition strategy with Ohana, is to increase that white space. We're also looking at with corporate head office smaller box concepts that will take the 55 and increase that from there, where we can put a little bit more density into our areas. The one thing about having a lot more density is that more people buy the Black Card memberships, which give you reciprocal rights to every gym. Right now, we have about 65% of our members with Black Cards, which is $25 a month, as opposed to the $10, now $15 on the regular membership. The more density you have, the more likely someone is to buy the Black Card. So, lots of really good stuff going on with Ohana, and, yeah, it certainly is just a wonderful investment for us. Great. That's a great update. Maybe just to follow on to that, maybe for Amanda. So when I think about what's built into your DCF for Ohana, how should we think about those positives coming in through your modeling, and when should we see maybe the fair value bumps come in? Is it more gradual this year and then ramping up 2025 and so forth? Yeah, they'll be more gradual. With regards to the pref piece of that investment, you know, we still have fairly modest expectations for reset, and we'll let those come in as they fall through. You know, that pricing increases are expected to be gradual over time, as well as the growth. You know, the new clubs do create a bit of a drag to start, and then they quickly become cash flow positive. But, while the bank adjusts out that negative drag, we do not, and that's why you see them with a bit of a lower ECR. On the common side, we have adjusted their organic growth into our model for their valuation, but, I mean, the incremental acquisition activity would be something that then we'd build in over time as they, you know, find prospects that they move on and close. Okay, great. And then maybe second question, Steve, maybe back to you on the deployment pipeline. I think I heard you say there's maybe two more follow-ons. I just wanna confirm that that's on top of the Shipyard and D&M that you might have. Maybe just can you share kinda if that is correct, and maybe the potential size? Yeah. We've got... As you know, in several of our deals, we've had kind of multi tranches built into our original deal. So we've got one company that's hit their targets that we should have just a small follow-on with, and then another of our partners that we're working on on a decent size acquisition with that will require some of our funding. So those two things are- Incremental. Yeah, they're on the front burner, not the back burner, so you can expect those fairly shortly. Okay, and those will be separate then from the third-party capital that you also just mentioned, too, right? That's correct. Yeah. Yeah. Okay. Got it. Okay, no, those are my questions. Thanks. Thanks, Eric. Thank you. I'm showing no further questions at this time. I'll now like to turn it back to Steve King for closing remarks. Great. Thank you, Marvin, and, thank you, everybody, for... Oh, looks like we got another question in there, Marvin, if you wanna take that. Okay. Our next question comes from the line of Zachary Evershed of National Bank Financial. Your line is now open. Hey, Zach. So on the Cresa investment, do you think there's any chance they'd allow common equity, or is that something that they're opposed to? So, Cresa is a fairly acquisitive group, and they also have a really widespread shareholder base. So they use their common equity very regularly for both comp and for acquisitions, and we just felt the complexity of that with the dilution that that causes, it was a little too murky for us to be a common equity partner. So, we just stayed with a preferred investment at this time. Not to say that we couldn't add some common in the future, but, deals are complicated and tricky in the best of times, and that just added to it. So we took it out to start this relationship, and, for the time being, we're just gonna stay with the preferred. Gotcha. So really no read-through on your willingness to continue pursuing the common equity strategy? I would say the vast, vast majority of every investment of all the investments we make will include common. Thank you. And then flipping back to Heritage for a moment, could this be a situation where Alaris might take direct control? Or if you're unable to find a professional manager, would that be something that you'd look to divest ultimately? Yep. Yeah, for sure. That's, as I was mentioning about this accounting change, that's one of the real advantages. So right now, we own about 40% of the common, and the owner that has now departed owns the other 60%. So we've got that 60% to play with as it relates to our own interest, as well as, you know, bringing in somebody new. So, you know, it's a, it's a huge opportunity for somebody to come in and take over this, and, and if that means it's us, and we just find a professional manager and, and send them with a lot of equity, that's, that's great, because, you know, you're in a situation like this, you'd be buying from a low, and we think there's a really clear path there to getting back to stability, so, and creating some significant value. Thank you very much. I'll turn it over. Great. Thank you. One moment for next question. Our next question comes from the line of Trevor Reynolds of Acumen Capital. Your line is now open. Hey, guys, just a quick one on the common side of things. I think you're guiding to, I think I saw, like, CAD 10.5 million of common distributions this year. Do you guys have any clarity on the timing, or where those are coming from? Any insight would be helpful. The majority of it is back-end weighted. Usually Q3, we start to see a pickup. You know, Fleet has a June 30th year-end, so they generally will finish off their audit and, you know, finalize their numbers for the year before considering doing a common distribution. So we do expect that to fall probably within October timeframe. The other common is sort of, I mean, primarily could fall into Q4. I would say Fleet would be the main, the main contributor to our common dividend expectations for the year. Yeah. Okay, great. That's, that's helpful. Thank you. Yeah. Thank you. I'm showing no further questions at this time. I would now like to turn it back to Steve King for closing remarks. Okay. Thanks again, everybody. You know, kind of a noisy quarter from an accounting point of view, a very quiet quarter from the actual operations front. So, thank you very much for your questions. There's gonna be a lot more questions from people as they go through our financials in detail. I would strongly encourage you to call Amanda, and not me, with any questions you have about that. But, thank you very much. We'll talk to you next quarter. Thank you for your participation in today's conference. This does conclude the program. You may now disconnect.