CALGARY, Alberta, Nov. 05, 2025 (GLOBE NEWSWIRE) -- Alaris Equity Partners ("Alaris" or the "Trust") today reported its financial results for the three and nine months ended September 30, 2025, highlighting continued strength across its Partner portfolio and steady cash flow generation. All amounts are in Canadian dollars unless otherwise noted.
Highlights
Record Net Book Value: Net book value of $25.10 is a record high for Alaris, representing a 10% increase over Q3 2024 and a 6% increase from Q2 2025. The increase from Q2 2025 was driven by record high quarterly earnings of $1.90 per unit, reflecting a $0.41 per unit recovery from a strengthening U.S. dollar, offset by the declaration of a $0.34 distribution.
Revenue & Operating Income up 8%: Total revenue and operating income increased 8% over Q3 2024, driven by a $47.9 million net unrealized gain on investments, representing a 45% increase in unrealized gains compared to Q3 2024.
Partner Revenue Ahead of Guidance: The Trust and its Acquisition Entities earned $58.1 million in total Partner revenue, 2% above guidance, including $57.4 million in distributions and $0.7 million in third-party fees. Despite this positive variance to expectations, total Partner revenue decreased 12.3% compared to Q3 2024, primarily reflecting the variability of common distributions and the impact of an unusually high level of common distributions in Q3 2024.
Net Distributable Cash Flow: Alaris Net Distributable Cash Flow per unit decreased 26% in Q3 and 14% year-to-date, reflecting the variability of common distributions, timing of cash tax payments and increased transaction costs, while underlying Partner cash flows remained stable.
Active Capital Deployment: Since the end of Q2 2025, Alaris deployed an incremental $73.8 million in capital, bringing total year to date investments to $228 million across both new and existing Partners, further expanding long-term revenue commitments.
Distribution Growth: Subsequent to quarter-end, the quarterly distribution was increased by 9% to $0.37 per unit (annualized $1.48), reflecting confidence in the durability of Partner cash flows. Proforma the increase in the distribution, Alaris' payout ratio increases from 54% to approximately 59%.
Capital Returned to Unitholders: Alaris repurchased and cancelled 112,500 units during the quarter under its normal course issuer bid, bringing year-to-day repurchases to 465,000 at an average cost of $18.87. These repurchases which were completed below book value, added ~$0.06 per unit year to date.
Continued Financial Discipline within Alaris' Partner Portfolio: Alaris' Partners maintained a weighted average Earnings Coverage Ratio of 1.5x with 14 of 21 Partners above 1.5x. Notably, 14 Partners carry no debt or less than 1.0x Senior Debt to EBITDA, underscoring portfolio strength and conservative balance sheets.
"Our third-quarter results highlight the continued strength and stability of our portfolio," commented Steve King, President and CEO. "Broad-based Partner performance and active capital deployment drove solid earnings growth, fair-value gains, and an increase in net book value per share during the third quarter.
We remain focused on generating sustainable value through continued execution of our differentiated investment model, providing Alaris with a diversified and growing cashflow stream and solid long-term growth opportunities. As we look ahead, we're confident that the combination of strong Partner fundamentals, embedded portfolio growth, and our positive capital deployment outlook, positions Alaris well for continued success", concluded Mr. King.
Results of operations
Three months ended September 30
Nine months ended September 30
$ thousands except per unit amounts
2025
2024
% Change
2025
2024
% Change
Change in Net book value (4) per unit
$
1.53
$
0.79
$
0.88
$
1.68
Net book value (4) per unit
$
25.10
$
22.80
+10.1%
$
25.10
$
22.80
+10.1%
Total Partner distribution revenue (9)
$
57,371
$
65,396
-12.3%
$
142,114
$
145,743
-2.5%
Total revenue and operating income
$
74,946
$
69,514
+7.8%
$
145,791
$
128,323
+13.6%
Cash from / (used in) operations, prior to changes in working capital
$
16,817
$
10,791
+55.8%
$
(26,511
)
$
45,605
-158.1%
Alaris net distributable cashflow (1)
$
37,380
$
50,462
-25.9%
$
85,413
$
99,697
-14.3%
Payout Ratio (5)
41.4%
30.7%
+32.3%
54.4%
46.5%
+14.9%
Annualized distribution yield on preferred capital invested (2)
12.4%
12.9%
-50pts
12.6%
12.8%
-20pts
Total return on capital invested (10)
6.6%
7.0%
-40pts
13.3%
13.8%
-50pts
New invested capital
$
45,686
$
48,474
-5.8%
$
199,318
$
125,878
+58.3%
Net book value (4) per unit increased by 10.1% from Q3 2024. During the quarter, change in Net book value (4) per unit of $1.53 to $25.10 per unit at September 30, 2025, is reflective of $1.90 per unit in earnings and comprehensive income, partially offset by $0.34 per unit in distributions to unitholders. For the nine-month period, Net book value (4) per unit rose $0.88, driven by $2.79 per unit of earnings from operations, offset by a foreign exchange loss of $0.69 per unit and $1.02 per unit of quarterly distributions during the year. Through the NCIB, the Trust repurchased and cancelled 465,000 units during 2025; as these were completed below book value, they added approximately $0.06 per unit to overall book value
Preferred Partner distribution revenue increased for both the three- and nine-month periods ended September 30, 2025, reflecting continued strength and expansion of the portfolio. Growth was driven by new investments in Berg, PEC, and McCoy, as well as additional capital deployments to Shipyard and Cresa. These contributions more than offset the temporary impact of FMP's deferred distributions in Q2 2025.
Common dividend income fluctuates from quarter to quarter, reflecting the variability inherent in Partners' cash flow management and capital allocation decisions. In Q3 2025, Fleet distributed a US $10.3 million common dividend, which was down from US$14.7 million in Q3 2024. In Q3, 2024 Ohana paid a common distribution of $5.0 million, which was not repeated in 2025. The reduced payouts in Q3 2025, by Fleet and Ohana reflect reinvestment to support future growth and changes in capital allocation priorities. Overall, Alaris' distribution mix continues to demonstrate a healthy balance between predictable preferred income and the ability to participate in common distributions, consistent with Alaris' focus on stable cash generation with embedded growth potential.
Total revenue and operating income increased 7.8% and 13.6%, respectively, over Q3 2024, driven by a $47.9 million net unrealized gain on Partner investments—a 45.2% increase in unrealized gains compared to Q3 2024—highlighting strong partner performance across nine investments.
Cash from operations prior to changes in working capital increased 55.8% in Q3 supported by higher management and advisory fees and increased interest and dividend income from the Acquisition Entities. Year to date, cash used in operations was largely attributable to the contribution of the proceeds from the $92 million convertible debenture issuance completed during the year, to the Acquisition Entities. The funds were used for the repayment of senior debt. While the transaction reduced operating cash flow in the short term, it strengthened the portfolio balance sheet by lowering senior leverage.
Alaris net distributable cash flow (1) decreased by 25.9% and 14.3% for the three- and nine-month periods ended September 30, 2025, respectively, versus 2024. These decreases primarily reflect the variability of common Partner distribution revenue and the impact of an unusually high level of common distributions in Q3 2024, timing of cash tax payments and heightened transactional activity. Underlying portfolio performance remains consistent with expectations.
The annualized distribution yield on preferred capital invested (2) remained strong at approximately 12%, consistent with prior periods and reflective of the stability and predictability of Alaris' preferred equity structures.
Total return on invested capital (10), which combines realized (cash) and unrealized (non-cash) returns, was 6.6% in Q3 2025 compared to 7.0% in Q3 2024, reflecting both strong recurring cash flows and improved valuations this quarter. Year to date Total return on invested capital (10) of 13.3% reflects strong portfolio performance despite select partners facing industry related challenges.
The Payout Ratio (5) increased to 41.4% from 30.7% for the quarter and 54.4% year to date from 46.5%, reflecting the reduction in distributable cashflow. Both the Q3 2025 and year-to-date Payout Ratios, remain below Alaris' target range of 65% - 70%. During the year, the Trust also repurchased and cancelled 465,000 units under its NCIB at an average price of $18.87 per unit, totaling $8.9 million. Including these repurchases, the Payout Ratio (5) on a cash-disbursement basis was 61%. Alaris generated free cash flow after distributions of $21.9 million in the quarter and $38.9 million year to date, maintaining flexibility for debt repayment and reinvestment.
Portfolio fundamentals remain strong, with a weighted average Partner coverage ratio of 1.5x. During the quarter, Alaris deployed $45.7 million of new capital. For the nine-months ended September 30, 2025 Alaris invested $199.3 million, demonstrating continued activity across both new and existing investments.
Outlook
Looking ahead, total Partner revenue for Q4 2025 is expected to be approximately $43.5 million, consistent with normal seasonal patterns in distribution timing and the pacing of investment activity. Actual results may vary with common distribution timing.
During Q3 2025, Alaris invested US$32.2 million, comprising a US$27.0 million initial investment in McCoy and a US$5.2 million follow-on investment in Carey. Subsequent to the quarter end, Alaris deployed an additional US$20.5 million in Cresa, bringing total year-to-date capital invested to approximately $228 million. These new investments are fully reflected in the Run Rate Revenue (6) estimate for the next twelve months of approximately $184 million, which includes an estimated $13.5 million of common Distributions, based on current contracts and assumptions as at the date of this release.
The Run Rate Cash Flow (7) table below outlines the Trust and its Acquisition Entities' combined expectations for the next twelve months. This forward-looking supplementary financial measure illustrates net cash from operating activities, less the distributions paid, providing a view of expected cash generation capacity over the period. The Trust's method of calculating this measure may differ from the methods used by other issuers.
Run rate general and administrative expenses are currently estimated at $19.5 million inclusive of all public company costs incurred by the Trust and its Acquisition Entities. Distributions paid reflect a 9% increase to $1.48 from $1.34 in the prior quarter's outlook. Based on current revenue and expense assumptions, the Run Rate Payout Ratio (8) is expected to range between 65% and 70%, reflecting Alaris' balanced approach to sustaining distributions while supporting reinvestment within its existing capital structure.
The Run Rate Payout Ratio (8) does not include potential new investments. Alaris expects to maintain net positive capital deployment, supported by continued demand for its flexible capital solutions within the private markets. The table below also sets out the after-tax impact of positive net investments, the impact of every 1% increase in Secure Overnight Financing Rate ("SOFR") based on current outstanding USD debt and the impact of every $0.01 change in the USD/CAD exchange rate.
Run Rate Cash Flow ($ thousands except per unit)
Amount ($)
$ / Unit
Run Rate Revenue, Partner Distribution revenue
$
184,000
$
4.06
