Good day, and thank you for standing by. Welcome to the Alaris Q1 2025 earnings conference call. At this time, all participants are on a listen-only mode. After the speaker's presentation, there will be a question and answer session. To ask a question during the session, you will need to press star 11 on your telephone. You will then hear an automated message advising that your hand is raised. To withdraw your question, please press star 11 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, Tanya. Thanks, everyone, for joining us this morning. Here with me is Steve King, President and Chief Executive Officer. Before we begin, I'd like to remind our listeners that all amounts given are in CAD 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 therefore 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 other companies present such data. As with the forward-looking statements, please refer to last night's press release and our MD&A for more clarification regarding these non-IFRS measures. Now, for the Q1 results, net book value increased by $0.12 per unit to $24.34. This increase was driven by $0.50 per unit of earnings offset by a $0.34 per unit distribution to shareholders. Partner distributions and transaction fee revenue of CAD 43.7 million was ahead of our previous guidance of CAD 42.5 million and 13% higher than Q1 of 2024. The guidance beat was driven by higher-than-expected foreign exchange rates and common distributions. As compared to the prior year, the increase was driven by the new and follow-on investments made over the last 12 months and an overall 4% increase in preferred distributions due to the reset metric. Net distributable cash flow for the quarter increased by 19.1% to CAD 30.4 million or CAD 0.67 per unit from CAD 25.5 million or CAD 0.56 per unit in the same period of 2024. In addition to the CAD 0.34 per unit dividend as part of the NCIB, approximately 219,000 units were repurchased and canceled for an average price of CAD 1,960. Inclusive of the NCIB repurchases, the actual payout ratio for the quarter was 59%. With regards to partner updates, as a result of a recent third-party equity transaction entered into by Shipyard, the multiple of earnings used in our fair value calculation was adjusted to reflect this recent market data. The business, driven in part by their acquisition of Baldwin Moretine in 2024, has increased in size as well as expanded their service offerings and their customer base. This adjustment increased fair value of the common equity by $8.3 million. Sono Bello has been impacted by softening in consumer discretionary spending as well as continued higher customer acquisition costs. Given the current market uncertainty and recent trends, we have adjusted the forecast earnings for 2025 as well as the exit timeline reflected in our fair value model. The impact of these adjustments was a decline in fair value of $13.7 million. For Luhana, growth in memberships at Meshur Clubs as well as the membership ramp at their new locations has increased both revenue and EBITDA, resulting in a fair value increase of $5.9 million. Subsequent to the quarter end, FMP was notified of the suspension of certain key contracts, primarily due to significant reductions in U.S. federal spending and the cancellation of numerous government contracts. The suspension is expected to have a material adverse impact on FMP's near-term financial performance and outlook. As a result, we do not expect them to maintain distribution payments for the remainder of the year. FMP's management is actively evaluating mitigation strategies, and we continue to assess the impact on the company's fair value based on its long-term business outlook. Despite the recent loss, FMP is expected to achieve positive EBITDA and cash flow on a pro forma basis, and the company's lack of debt is expected to support its recovery. Despite the adjustment to below one for FMP, the portfolio has maintained its weighted average ECR of approximately 1.5 times, with 10 of 20 partners continuing to be above this threshold. Of our 20 partners, 12 either have no or less than one turn of debt as compared to EBITDA. Based on our current evaluation of the portfolio, no other companies have significant risks as a result of the changes in U.S. procurement policies or the U.S. tariffs. While Edgewater's business does have exposure to government contracts, this area has not been a primary target of DOGE, and they have not seen any negative impact to the business or their related contracts. Our current outlook calls for CAD 41.4 million of revenue in Q2. After reflecting the expected deferral of the FMP distribution, our 12-month outlook for revenue is now CAD 178 million and includes CAD 19.1 million in expected common distributions. We anticipate this change to take our payout ratio up just slightly to between 60-65%. As a result of the accounting standards requirement to revalue the US acquisition entity at the quarter-end foreign exchange rate, the portfolio is subject to swings caused by unrealized foreign exchange gains and losses. During the quarter, book value was impacted by a foreign exchange loss of CAD 0.11 per unit as compared to a gain of CAD 1.35 per unit in Q4 2024. This sharp decline in the Canadian dollar over the course of Q4 and its offsetting recovery to date in 2025 is expected to create unrealized fair value losses, which will impact net book value. In its source currency, we expect continued portfolio performance and net book value growth from the U.S. acquisition entity, but our anticipating volatility in the U.S.-Canadian exchange rates will cause some noise in our financial reporting in the coming quarters. On a similar note, in April, the senior credit facility was amended to convert the facility from CAD 500 million to $450 million. This change allows for easier management of the facility by removing the FX impact of the recently rising and falling exchange rates on outstanding draws, as well as providing incremental capacity of approximately $95 million or CAD 130 million. We currently have $290 million drawn on the facility, leaving $160 million of undrawn capacity. On that note, I will turn it over to Steve for his comments. Great. Thanks, Amanda. Obviously, the key metrics for our company continue to be very strong in Q1: payout ratio below 60%, including the capital spent on share buybacks. Strong overall portfolio health with weighted average ratio is still at 1.5, even taking FMP into effect. And growth in distributable cash of 19% year over year. Very strong numbers. Our defensive strategy, as well as a diversified portfolio, very little debt in our operating companies, the required service nature of the industries that we're in, and the highly aligned owner-operator model continues to shield us from a volatile economic environment. Within that strong portfolio, there were two areas of softness that I'll highlight, the first being Body Contours who operate in the cosmetic surgery industry. BCC has experienced a soft consumer market over the last several months that has impacted both their rate of revenue growth and their margins. The company is extremely well run and are operating well above industry metrics, but the current soft market will likely create a delay in the eventual exit because of a measured reduction in new location and product offering growth. Eventual value is very much still intact but likely pushed out a year, which is why the present value calculation resulted in a decline. As discussed on our last call, FMP in Washington was the one company in our portfolio that had risk of DOGE cuts. After feeling like they had weathered the storm, the company was hit by these cuts literally just a couple of days ago. It's far too early to speculate on the quantum and timing of replacing those lost contracts, but all of these following facts give us significant optimism for a full recovery. The company is exceptionally well run with industry-leading professionals and a decades-long track record. FMP has zero debt and has cash on the balance sheet that will give them ample time to pick up new work. At current revenue levels, the company is still profitable and has a solid platform to build off of. DOGE cuts are also creating opportunities for FMP with affected government contractors that need the exact human capital expertise that FMP provides to navigate through this volatile period. Letting go of an extraneous staff while retaining the right people is right in FMP's core competency, and they've already put out large bids on contracts that would go a long way to building back their book of business. History has also shown that cuts of this magnitude are typically followed by smaller amounts being added back by the government as they realize that some of the things that they cut are actually needed. Also, I would say that the beauty of our model is that while the hit to FMP is short-term and not material, it is everything to the people that own and operate FMP. Needless to say, they are on it. Just as we did with BCC, Ohana, and LMS when those businesses were hit with temporary external shocks, Alaris will do the right things by FMP and preserve long-term value by giving them the flexibility that's needed. We have full confidence that this asset will have a full recovery. Extremely important to note that the weighted average coverage ratio and our corporate payout ratio include the impacts of FMP's situation. Because of the well-diversified nature of our business, there is very little impact on our overall portfolio and particularly on our dividend stream. On the positive side, the benefit of the current environment is really a plethora of opportunities for Alaris in high-quality assets. Just as was the case coming out of COVID, our structured equity, which does not dilute business owners as much as traditional private equity, becomes highly sought after. Acquisition opportunities for our partners become more available, and potential new deals are plentiful. We have bids outstanding that involve just Alaris as principal and also bids that include third-party capital co-investing with us. Tanya, I'll turn it over to you for any questions that there may be. Thank you. As a reminder, to ask a question, press star 11 on your telephone and wait for your name to be announced. To withdraw your question, please press star 11 again. One moment while we compile our Q&A roster. Our first question will be coming from Gary Ho of Desjardins Capital Markets. Your line is open, Gary. Hey, good morning, guys. Maybe it's just the first question on, let's go back to FMP here. So interesting to hear that even without the government contract, the company is still EBITDA and free cash flow positive. Sorry if I missed that. I think there's still no debt in the company. Maybe can you talk about and elaborate what other works that they can get on? Yeah. At the end of the day, when we had a big conversation with the owners of FMP the day after they got the news, I mentioned that this is the kind of fork in the road where you're forced into decisions that five years from now you'll look back and say, "You know what? This is probably the best thing that ever happened to our company." Because they've had more work than they could handle just from government agencies over the last several years, they've never diversified into other areas. This is going to force that. The easiest one right off the bat, as I mentioned, are government contractors in Washington that most of them have been hit even harder than what FMP has. All of those people are going through their rosters of staff, laying people off, making sure that who they lay off does not cut into muscle in their companies and just gets rid of fat. That is exactly what FMP does. They have some large contracts that have already come up through this process, and that is going to help them diversify as they build that out and also build back out the government contracts as well. They will be just fine. They are going to make a full recovery. As I mentioned, just like we did with BCC and Ohana in COVID, with LMS coming out of COVID, when you have some external shocks that a really good management team could not have foreseen, you want to be a good partner because the value is still there. It's still a great company, and they will be back in a very short period of time. Perfect. That makes sense. Second question I have, it sounds like there was an increase to your credit facility. I think you mentioned the dry powder already, but just wondering if you can comment on the capital deployment pipeline that you have currently, the size, and it sounds like it's still mostly in the US. Yes. Yeah. Everything in our pipeline is US at this time. We have probably more in our pipeline now than is normal. A huge amount of acquisition opportunities for our partners. I think we have five or six that are working on acquisitions that would need our assistance in that. We have a good roster of potential new deals that are in process as well. We do expect a very busy second half. Okay. And then just lastly, maybe just going back to BCC, there was that fair value write-down. Maybe can you walk us through kind of pushing out the potential monetization date and also the higher acquisition costs that they're seeing within the business? Yeah. It really is. It's been an interesting year for BCC. The acceleration of GLP-1 weight loss drugs has been an interesting thing to monitor for the company. This company is very heavy into data analytics and has broken things down and is extremely well managed. I would have to say too that Brookfield has been a very supportive and constructive partner with us on BCC. It now is very evident that the GLP-1s have not been a material negative drag. In fact, there's probably a slight positive from them in terms of bringing people into the liposuction market after they've lost a large amount of weight. It's also introduced a new service offering of skin tightening, which didn't really exist before, but now with so many people having lost enormous amounts of weight, that's now a pretty large market, which didn't exist even two years ago. What is really evident is the consumer discretionary spending in the U.S. has been in a recession for a number of months, probably a full year. That has been what has made their acquisition costs higher and revenue, I would call it stagnant. CareCredit is one of the companies that provides credit to healthcare patients in the U.S. They're the biggest one, including Sono Bello patients. Comments from them anecdotally are that all of their client companies that they provide third-party financing for, the whole industry, including even things as easy as med spas, are down around 20%. BCC is not down 20%. Just their growth rate has been paused. We are feeling very good about where we stand and gaining market share during this period of time, but it is there. The consumer spending is definitely down, and it will come back. The only thing that it really impacts in terms of our value of that investment is the timing, as you pointed out. It's probably going to be a year later, probably 2028. Things like expanding the breast augmentation division, we've kind of put that not on hold, but just slowed that down. On the flip side, we have skin tightening coming in, which wasn't expected. Still a wonderful company, highly, highly profitable, under-levered. I don't have any change in my exit valuation expectations for BCC. Perfect. Okay. Always appreciate your comments, Steve. That's it for me. Thanks, Gary. Our next question will be coming from Jeff Fenwick of Cormark Securities. Your line is open, Jeff. Hi. Good morning, everybody. Steve, I wanted to follow up on Sono Bello there. One of the other points that was stated was they exercised the PIK option on their payments, I think, for the quarter. Can you just remind us on the terms around that? Is it just a portion they can pay PIK? Is it all? What are the expectations going forward there on that? Yeah. It is a portion of the payment. A lot of our picks are deferrals, cash deferrals, and we collect the cash at a later point in time. It is a bit different for BCC. They truly are paying in kind, so we are being issued incremental equity. It is increasing our investment, and it immediately increases the cash pay for the next quarter. That is reflected in revenue, and then it does go through into our investment in BCC. They do not expect, I think they can pick up to 50% of them. I think so. Yep. Yeah. We do not expect them to use that for long. It is a very conservative management team. They actually have a large cash position on their balance sheet. In an environment like this, they like to use all the levers that are at their disposal and act with ultimate caution. It does, at the end of the day, increase our expected returns on this investment by them using the pick because we are getting more equity units issued to us. Okay. That's helpful. Thanks. I guess back to FMP, probably challenging to come up with a fair value on that particular investment at this point in time. Doesn't sound like you're expecting it to be too greatly impaired, but again, how do you sort of handicap that? What are you going to look at under your accounting model when you go to approach that for the end of this coming quarter? Yeah. Our current fair value model has been based on a multiple of cash flow, which obviously we're probably shifting that to more of a DCF model. Part of that shift is really building out what that outlook looks like. That's really what management is focused on right now. What contracts are in the near-term backlog that will not be affected? What are the opportunities for new things to bid? As we work through the next few weeks, we'll be building out sort of what does the remainder of the year look like? Going forward, how do we think that will play out so that we can sort of come up with that valuation? It's not zero. There's EBITDA and cash flow to the business, so there is value here. It's just a matter it was very difficult to put a range together without this information and having it happen so recently. The management team is obviously focused on more immediate concerns within the business than sitting down with us to sort of build out that forward-looking model for the next couple of years. Yeah. We do know that they have some large bids already out there for these government contractors. By the time we report our next quarter, I'm hoping we have some results on some of those bids, and that'll really help Amanda and her team kind of formulate that valuation. Okay. Maybe from a tax perspective, under your investment structure that you operate now, when you experience a fair value loss like that, what's the impact to cash taxes? Is it deductible or just wondering because it'll matter from a free cash flow or distributable cash perspective? Yeah. Because it's an unrealized loss, it doesn't create any current tax impact. Where that impacts is really in our deferred tax number. As we have increases in fair value, you'll see that deferred tax number push up. As we have declines in fair value, it just turns around some of that deferred tax liability. Okay. Great. Then you did a little bit of share buyback in the quarter there, Steve. What's the thinking? It sounds like you've got quite a full pipeline, so I can't imagine that buybacks are a priority for you. Is this just sort of absorbing? I guess if there's some share-based comp out there and you want to sort of counterbalance that, or what's the thinking on that front? Yeah. I mean, we'd like to buy back as much as possible, obviously, when we're trading below book value. You're right. I mean, we have some really great investment opportunities out there that have high IRRs attached to them. But so does our current portfolio, which if you can buy our current portfolio at below book value, you're going to win. The dollar values that we've attributed to our NCIB are not ones that are going to move the needle on our deployment spending. If we're looking to spend CAD 200 million over the next year, spending an extra CAD 5-10 million on NCIB is not really going to change much. We'll continue to do that. I think we've spent CAD 5 or 6 million to date this year, and the last batch was at CAD 1,750-ish. We think that was a heck of a buy, and we'll continue to do so. Okay. Great. Thanks for that. I'll get back, and thank you. Great. As a reminder, to ask a question, please press star 11 and wait for your name to be announced. One moment for our next question. Our next question will be coming from Zachary Evershed of National Bank Financial. Your line is open, Zachary. Good morning, everyone. Thanks for taking my questions. Morning, Zach. Could you give us an update on your expectations for LMS given the steel tariffs at play? Yeah. LMS right now are unaffected. They get their steel from actually various countries. They're quite well diversified, none from the U.S. other than for their own U.S. operations. There is some risk that Canada might impose some tariffs on steel being imported from Asian countries and, well, all other foreign countries. There is language in their contracts that all of that gets passed on to their customers, so they will not be affected on current contracts. The only risk longer term would be if real estate developers just find it too expensive and mothball projects. Right now, no impact. Still a huge backlog of business and high margins. They're doing extremely well, as you've seen in the numbers. That is something that we and obviously management are keeping an eye on. Gotcha. Thanks. And then we had FMP talked about LMS steel tariffs, BCC evaluating GLP-1 risks. Any other kind of tail risks to partners that could have an outsized impact? A lot of people have been asking about Edgewater, our nuclear engineering company out of Tennessee. They have several hundred nuclear engineers that work for mostly Department of Defense and Department of Energy in the U.S. Those areas at this date have been unaffected. In fact, they have the biggest backlog of bids outstanding in those two areas that they have ever had. There is an acknowledgment by the Trump government on the increase in spending on DOD. The nice thing about that business is whether you are dismantling nuclear arms or expanding them, it requires just as much work from nuclear engineers. I think it is fairly obvious as well that the use of nuclear energy for the DOE is expanding as well. Wonderful company. They are one of the ones that are looking at an acquisition right now. They are a high-growth company for us, and we have not seen anything negative from them at all, just positive. Thank you very much. I'll turn it over. Great. Thank you. Our next question will be coming from Trevor Reynolds of Acumen Capital. Your line is open, Trevor. Morning. I was just wondering if there's any update on where Heritage is at. Heritage has made some very good improvements, actually. They've worked through all of the negative margin contracts from the last two years that were entered into. Our management team that we brought in has really improved the back office and bidding kind of processes. Yeah, we see some good improvements there. Still work to do, but yeah, they've got a good building backlog, and we expect that one to start showing some good progress throughout this year. We're quite pleased there. Is there any expectations around them returning to distributions? Probably not within the year. They're in the heart of their busy season coming out of spring and going into summer. They have a lot of capital investing into working capital. They're in the process of bringing on a new bank and revolver to sort of fund that ebb and flow of working capital. We'll see them invest in working capital back onto the balance sheet from the effects of last year. We'd probably look to see a return to distributions sometime in 2026. Great. Just to clarify on FMP, have they officially cut distributions or just maybe just kind of how best to model that out? Yeah. We cut them. Just like during COVID, when a shock like this happens, there's no point in trying to drain cash out of a company. We're going to want to preserve long-term value and keep working capital on their balance sheet so they can actually grow out of this. Yeah, we told them to stop paying us, and we'll pick that back up when they've replaced those contracts and are ready. Exact same thing we did with Sono Bello, with Ohana, and with LMS. All of those companies have repaid every single penny that we deferred, and we expect the exact same with FMP. I mean, that is the beauty of what we've built here is that over time, you're going to have some of these external shocks. We've got a really well-diversified portfolio. We're managing over CAD 2.3 billion of capital here. Having a small company like FMP go through this really is not a material event for us. As I mentioned to somebody yesterday, we get so much mileage out of situations like this where we're bidding on five, six new companies at any given time. I'm going to have every single one of them call Aaron at FMP to talk about how Alaris was when it hit the fan and how we were as partners. This to us will have more value than what anybody knows. Great. Thanks for taking my questions. Okay. Thanks, Trevor. I am showing no further questions at this time. I would now like to hand the call back to Steve for closing remarks. Great. Thanks, Tanya. Thanks, everybody, for tuning in. As always, if there's any follow-up questions for myself or Amanda, please give us a call anytime. Until then, we'll talk to you in July. Thank you for your participation in today's conference. This does conclude the program. You may now disconnect.