Date: May 11, 2006
Source: Market Wire
BFI Canada Income Fund (the "Fund")(TSX:BFC.UN) today announced its financial results for the three months ended March 31, 2006. The Fund's 2006 financial results include a full quarter contribution from IESI Corporation ("IESI") which was acquired by the Fund on January 21, 2005. Accordingly, the comparable three month period ended March 31, 2005 excludes IESI's financial results for the period from January 1 to January 20, 2005.
Management's Commentary
"The Fund opened 2006 with a strong financial performance as a result of solid organic growth contributions and the consolidation of IESI for the full three months ended March 31, 2006," said Keith Carrigan, Vice Chairman and Chief Executive Officer. "We're encouraged by this performance, which features 32.4% growth in revenue, 26.1% growth in EBITDA(A), 26.5% increase in free cash flow available for distribution(B) and a 19.9% increase in aggregate distributions declared compared to our first quarter a year ago."
"For the first quarter of 2006, the Fund's payout ratio was 90.8% (87.1% cumulative), compared to 95.8% a year ago (91.0% excluding distributions on weighted average subscription receipts - 89.1% cumulative). The Fund targets an annual payout ratio of less than 90.0%, but due to the impact of seasonality, coupled with timing differences in maintenance capital expenditures, the payout ratio is traditionally higher in the first quarter than for the year as a whole."
"Excluding fuel surcharges, our Canadian operations produced organic revenue growth of 15.9% over last year, while our US operations, excluding fuel surcharges and acquisitions, delivered organic growth of 15.4%. Most of our organic growth was achieved through the effective implementation of our market-focused strategies, as well as the improvements we've realized from our best practice exchange over the past year. Additionally, the rates of internal organic growth partially reflect the unusually mild winter we had - which allowed for the acceptance of higher waste volumes at our landfills compared to the first quarter of 2005 and resulted in one of the Fund's landfills accepting waste volumes which if continued at a similar rate would exceed its annual permitted volume. The estimated additional EBITDA(A) recognized during the first quarter of 2006 related to this landfill's accelerated acceptance of waste volumes is approximately $0.85 million."
Looking Forward
The Fund's financial goal is to grow free cash flow available for distribution(B). Looking forward, management will continue to focus on driving organic revenue growth, EBITDA(A) and return on assets in support of this goal, while managing costs, reinvesting capital and employing its ongoing acquisition strategy. With respect to all of 2006, the Fund expects its maintenance capital and landfill expenditures to approximate $19 million to $21 million for its Canadian segment and U.S. $27 million to U.S. $29 million for its U.S. segments. In the first quarter of 2006, total maintenance capital and landfill expenditures totalled $9.7 million.
"At this point, economic and market conditions are supportive of ongoing improvements within our business and we are focused on achieving all of our financial goals," said Mr. Carrigan. "We have opportunities for growth and we will pursue these opportunities vigorously through our market-focused strategies and our ongoing acquisition program."
Other Highlights for the Three Months Ended March 31, 2006
(in thousands of Canadian dollars, unless otherwise stated)
Effective February 10, 2006, BFI Canada Holdings Inc. ("Holdings") entered into a Fourth Amended and Restated Credit Agreement. The amended and restated credit agreement increases the total available credit under the facility, subject to lender consent, from $80,000 to $120,000 and matures, subject to one year extensions, on June 30, 2010. Borrowing rates under the Fourth Amended and Restated Credit Agreement are more favourable than the predecessor credit agreement.
IESI amended its Amended and Restated Revolving Credit and Term Loan Agreement, effective March 10, 2006. The amendments increased the total available credit under the facility, subject to lender consent, from U.S. $500,000 to U.S. $550,000 and borrowing rates under the amended credit agreement are more favourable than the predecessor credit agreement.
IESI completed one "tuck-in" acquisition for aggregate cash consideration, including contingent consideration, totalling approximately $2,600.
More information: www.bficanada.com.
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