Q2 2025 Alaris Equity Partners Income Trust Earnings Call

Speaker #2: Thank ou for standing by and welcome to the Alaris second quarter 2025 earnings release conference call. At this time, all participants are in listen-only mode.

Speaker #2: 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 *11 on your telephone.

Speaker #2: If your question has been answered and you'd like to remove yourself from the queue, simply press *11 again. As a reminder, today's program is being recorded.

Speaker #2: And now, I'd like to introduce your host for today's program, Amanda Frazer, Chief Financial Officer. Please go ahead.

Speaker #3: Thank you, Jonathan. Good morning, everyone, and thank you for joining us today to discuss our Q2 results. I'm joined on the call today by Stephen King, our President and CEO.

Speaker #3: Before we begin, I'd like to remind everyone that all financial figures discussed are in Canadian dollars, unless otherwise indicated. Please note that some comments made during this call may include forward-looking statements.

Speaker #3: These statements are based on current assumptions and involve risks and uncertainties. So, actual results may differ materially. For more detailed information on the factors, assumptions, and risks involved, please refer to our press release last issued last night.

Speaker #3: And the management discussion and analysis under the headings forward-looking statements and risk factors, available on CDAR at cdar.plus.com and on our website. We will also be referencing certain non-IFRS financial measures, which may be presented differently than similar measures by other companies, additional information and reconciliations related to these measures can be found in the press release and MDA.

Speaker #3: With those preliminaries covered, let's turn to the highlights. Our second quarter reflected solid operational performance across most of our partner portfolio. Continued growth in our run-rate revenue and ongoing capital deployment.

Speaker #3: Despite the noise from a stronger Canadian dollar, let's start with the highlights. The net book value per unit was $2,357 at quarter-end, down 77 cents from Q1.

Speaker #3: We saw 59 cents per unit in earnings growth, offset by 98 cents per unit in unrealized foreign exchange loss from the Canadian dollar's 4.5% appreciation against the US dollar, along with our quarterly distribution 34 cents per unit.

Speaker #3: Revenue and operating income grew approximately 21% year-over-year to $34.5 million, driven by strong performance from nine partners. This resulted in a $25.5 million net unrealized fair value gain, which was offset by the impact of a $14.6 million write-down at FMP, following the loss of certain key contracts due to changes in U.S. federal procurement policies.

Speaker #3: Along with an expected deferral of distributions, run-rate revenue reached 183 million, up 12.5% from last year, and up from 178 million last quarter. Year-to-date, we've deployed about 154 million into our portfolio, including a 21.5 million US follow-on preferred equity investment in the shipyard, bringing our total shipyard investment to 108.5 million US.

Speaker #3: We also issued 92 million in convertible debentures, using the proceeds to strengthen the portfolio and fund growth. Through our NCIB program, we repurchased and canceled 133,600 units in Q2, bringing the year-to-date total to 352,500 units and adding approximately 4 cents per unit to book value.

Speaker #3: Turning to our portfolio health, our portfolio showed solid operational strength this quarter. The majority of partners delivered year-over-year revenue and EBITDA growth, highlighting the quality of our investments and driving fair value increases across nine of our partners, supporting improved revenue and operating income.

Speaker #3: Our weighted average earnings coverage ratio remains healthy at approximately 1.5 times, with 13 out of 20 of our partners maintaining no debt or less than one-time senior debt to EBITDA.

Speaker #3: Overall, the portfolio fundamentals remain robust, positioning us well for stable returns in future opportunities. On the financial side, earnings and comprehensive income for the quarter were a loss of 17.9 million, compared a gain of 31.7 million last year.

Speaker #3: Almost entirely due to the $44.8 million unrealized foreign exchange loss from marking our US dollar portfolio to the quarter-end exchange rate. Net distributable cash flow was $17.9 million, down from $26.3 million in Q2 2024, mainly due to the timing of cash tax payments and transaction costs.

Speaker #3: Looking ahead, we expect Q3 partner revenue of approximately 56.9 million, up from Q2 due to expected incremental common distributions from select partners. Our run-rate payout ratio remains in the 60 to 65 percent range, based on our current revenue expenses and capital structure.

Speaker #3: And on that note, I'll turn it over to Stephen for his comments.

Speaker #4: Great. Thanks, Amanda. Interesting. When going through our portfolio with our monitoring team over the last few weeks, I'm not sure there's been a period in our 20-plus year history where our companies have had such explosive results.

Speaker #4: And that may surprise some people. It's not like the economy is that buoyant in the U.S. But we have, not just a few, but many companies that are up more than 20% year-over-year, and they're in their earnings.

Speaker #4: So, while our press are capped, typically at 7 or 8 percent a year growth, the thing that's exciting for that is that it really magnifies the returns on the common equity, which we have on most of our investments now.

Speaker #4: So, a really tremendous quarter for our portfolio. I'll touch on a few key companies that people will have questions about, starting with FMP.

Speaker #4: obviously, we discussed this last, last quarter. they had, some significant contracts, canceled and diminished, because of the DOGE process, in the US. the nice ing is, many of those contracts have actually come back, not in full form, but, they've been added to since, since, we spoke last quarter.

Speaker #4: So, the company is feeling much better. They definitely have hit a trough and are working their way back out of that. As a result, they didn't need to defer as much of our distributions as expected.

Speaker #4: They're in a strong cash position. And starting in January, we'll start with a new distribution program for FMP that mirrors their recovery.

Speaker #4: keeping in mind, this is a company with, with no debt, no CapEx. And, a world-class management team. we're very confident there. BCC. Sonobello, had their most profitable quarter in their company's history, for the quarter ending June 30th.

Speaker #4: GLP-1 patients, which, anybody that reads the paper or watches TV knows is, is a booming industry. those patient patients need not just lipo, but also skin tightening at the end of their, GLP-1 journey.

Speaker #4: And this has led to a record, dollars per procedure, performance, for the June quarter. And, and that's, that's very much, a long-term trend. Fleet, you'll e, came down, this year.

Speaker #4: Fleet can be a lumpy business with, kind of large batches of trucks, contracts coming in and out of, of backlog. so that's, not unexpected for a like them.

Speaker #4: but their backlog, indicates, solid growth, moving forward. So, again, no, no issues there. From an outlook, standpoint, I would say it's, it's a very buoyant, deal flow market for us.

Speaker #4: We did walk away from a couple of deals in the quarter, which gave us some expenses from them without the deployment, which is always unfortunate, but part of the business.

Speaker #4: but we also do have, several deals, in process. So, we weren't afraid to walk away and, and have, significant, deployment opportunities. So, overall, a very good environment for us.

Speaker #4: You know, noise from the currency this quarter, we expect that to reverse a little bit in the coming quarter, as everybody can follow.

Speaker #4: So, hopefully, people are smart enough to, h, to X that out when they, when they look at our results. So, Jonathan, we're, h, happy to open it up for questions.

Speaker #5: Certainly. And as a reminder, ladies and gentlemen, if you have a question, please press *11 on your telephone. Our first question comes from the line.

Speaker #5: Gary Ho from Desjardins, Capital Markets. Your question, please.

Speaker #6: Great. thanks. maybe for Steve, you, you just mentioned, Sonobello. and the record quarter, this quarter. So it unds like there were location ads, and you talked about the increased dollar per procedure.

Speaker #6: I know last quarter you pushed out the monetization expectation, the timeframe. So with a stronger quarter now, does that change your views at all?

Speaker #4: We've been, we've been pretty tight on, on 2028. but, you ow, it's between us and, and, and, and, you know, the majority shareholder of, of BCC.

Speaker #4: As well as Brookfield, our partner on that deal. So, it always comes down to any kind of exit opportunity, trying to maximize your value.

Speaker #4: So you never, this far ahead, say, "Okay, it's going be on this date or anything like that." But, 2028 is, is still when we, h, we, when we are kind loosely targeting.

Speaker #6: Okay. And then, second question, this feels like there's some of your portfolio partners have a path for greater maybe tuck-in opportunities. Such , the shipyard, you know, is that the case?

Speaker #6: And what, what are others that you see could require some follow-on capital deployment? And is that something that you can pursue more closely looking out?

Speaker #4: Yeah. Cresa is a, is a company that, is, is acquisitive. And, is working on, on things. PEC, one of our newer partners, who's the, electrical contractor, out of Boston, they, they will be acquisitive as well.

Speaker #4: we actually have, I, I would say, probably six to eight, of our current, partners that, that are acquisitive. And keep our, keep our guys, hopping and, , give us great, deployment options.

Speaker #4: So within our portfolio.

Speaker #6: And, and maybe, related to that, in the back half of this year, can ou talk about capital deployment opportunities, whether it's follow-on, such as these, or and/or, new partners that you're looking ?

Speaker #4: Yeah. We expect a healthy dose of both. So, you know, as I mentioned, you never count your chickens because, you know, we’ve got very tight investment standards.

Speaker #4: And, and aren't afraid walk away. And we've done that many times. In the last several years, including twice just in the last quarter. So, you know, you never, never, it's never closed until it's closed.

Speaker #4: But, we've got several, several new deals and, and several, follow-on deals that we expect to close in, in the second half.

Speaker #6: Okay. Great. Those are my questions. ank you.

Speaker #4: Thanks, Gary.

Speaker #5: Thank you. And our next question comes from the line. Of David Pierce from Raymond James. Your question, please.

Speaker #7: Morning, guys.

Speaker #4: Hey, morning.

Speaker #7: Just going back. Just, just going back

Speaker #5: Yeah.

Speaker #7: to Sonobello. Do you, do you see our declining slightly from last quarter? I know, I know this was a record quarter for EBITDA. Now, I know the ECR is, is based off LTM figures.

Speaker #7: So, it's not one-to-one, but if you could share any insights on the decline in ECR this quarter. And assuming EBITDA is trending the right way, is it fair to assume that that moves higher again over the coming quarters?

Speaker #8: We don't just look at the timeline; slightly last quarter, we saw some softness in the market for SonoBello in Q1. This was not just for that, but also for pushing out their new breast augmentation program and rolling that out, which we saw taking a bit longer.

Speaker #8: So we had pushed sort of the timing out about a year, Q1. We're probably going to shorten it in, near term. you know, we'll see, continue to see how, how they roll out that new program.

Speaker #8: I don't know, Steve, if you want to add.

Speaker #4: Yeah. And on the ECR, David, ECR calculation includes CapEx. So sometimes you'll get a, you ow, a, a lumpy CapEx spend, in a quarter that will, h, that will affect the ECR, which, you ow, and that, that includes some, you know, growth CapEx too.

Speaker #4: So, so yeah, that would likely be the reason there.

Speaker #7: Okay. Thank you. And, and, and just when I think about the balance sheet, like, when you look at leverage internally, are ou viewing as on a consolidated basis, you know, including the convert, or, you know, just on a senior debt basis?

Speaker #7: Given that, what do the covenant factors in? And then maybe following on from that, could you talk about your current balance sheet capacity for new investments over the next 12 months based on your current outlook, and maybe assuming no redemptions in the folio?

Speaker #8: So, the leverage ratio that we report for each of the partners is that the question on how, what that includes?

Speaker #7: No, it's your own. Sorry, sorry, Amanda. It's your own, balance sheet. Like, just following the convert deal in, in, in May, I, I'm, 'm just trying to get a sense around how much, how much capacity you have for new investments and just how you actually think leverage internally.

Speaker #8: Yes, we have $200 million of room on the current credit facility.

Speaker #7: Yes.

Speaker #8: US. That's available to us. In addition, you ow, we could go back to the convert market to the extent that, you know, deployment exceeded that value.

Speaker #8: You know, we also always have the possibility of redemptions. As we look 12 months out, that can also be an additional source of capital.

Speaker #8: So, you know, between all of those avenues, I think that we're well positioned to meet the requirements of the pipeline that we see ahead of us.

Speaker #4: Yeah, and I’m pretty happy right here, David. Having $200 million of capacity is a good place for us. It’s a comfortable place.

Speaker #4: I don't want to have our debt too low, to be quite honest, because we will get redemptions. We haven't seen that many over the last five years.

Speaker #4: But if you look at our, kind , timeline as a company, started common equity, investments along with our preps about six years ago. And, so, you know, using a, kind of, a typical six-year hold, we've had, you know, over our 21-year history, we're going start to see some of those, companies, come to the market over the next, kind of, 12 to 36 months.

Speaker #4: so I don't want to have our debt too low. I want to make sure that, h, we've got an efficient, you know, use of capital and, and cost of capital.

Speaker #4: So, you know, that's something we monitor all the time. And, you know, 's a bit of a 12-ring circus, where you've got, you know, a lot of deployment opportunities and a, and 20 companies in our portfolio that, you know, that, at any given time, could be making plans to, to sell.

Speaker #4: So, that's kind of the, the juggling act that we, that we try and have with our balance sheet. And right now, I think it's in a, kind , a perfect place.

Speaker #7: And, and maybe if I could squeeze one more in. Obviously, it's early days with FMP in terms of, you know, obviously, they've had to manage through the DOGE impact.

Speaker #7: But at least, my initial thoughts are the business is, is probably performing better than expected, given what happened. You know, it interesting. You, you, you pointed to distributions coming back in, in January; obviously, that, you know, you've been king with them in the background.

Speaker #7: Is it too early to give, you know, any estimate around, like, the ential size of that? Or will that sort of be, be dependent on how the business performs in the interim?

Speaker #8: So, so we currently have, 1.2 million Canadian reflected in our outlook for next 12 months. that's sort of a baseline low estimate. You know, we think that they've troughed during this quarter, September is fiscal year-end for the federal government.

Speaker #8: So, you know, we're hoping to get some more information as that, you know, as we get through that period, as far as, you know, contracts and spending, outlook for the coming year.

Speaker #8: But we think that, you know, from the information we have right now, that $1.2 million Canadian is a fairly conservative estimate that will, you know, there are some opportunities that might get higher.

Speaker #8: But we thought that was the safest place to put a stick in the ground at this time.

Speaker #7: Thank you. That's helpful. I will, pass the line.

Speaker #4: Thanks, David.

Speaker #5: Thank you. And as a reminder, ladies and gentlemen, if you have any questions at this time, please press *11 on your telephone. Our next question comes from the line of Nathan Poe from National Bank Financial.

Speaker #5: Your question, please.

Speaker #9: Good morning, guys.

Speaker #4: Morning.

Speaker #9: A lot of my questions have already been answered. So, I guess we'll start off with some housekeeping. Just checking in on the $25 million on NCIB spending this year.

Speaker #9: how are we feeling about that, given Q2 seems just a bit a touch muted versus Q1?

Speaker #8: Yeah. So we're targeting really a 75 percent payout ratio including the NCIB. And we hit that for the quarter. So with some of the timing of the, the tax payments, higher transaction costs, the, the level that we spent during the quarter sort of brought right to that 75 percent mark.

Speaker #8: so also with FMP, you know, just delaying some distributions, that also sort of fed into that number. So really our get for the year is sort of that 75 percent mark as opposed the 25 million.

Speaker #9: Gotcha. That's helpful. And I noticed a commentary on the seasonality of common dividends. Can you give some color on how ou see that seasonality going forward, especially as you're Q3 revenue guideposts strongly lifted by, such dividends?

Speaker #8: So fleet, does pay a, a healthy dividend that, you know, last year I think that was about 14 million Canadian. They pay their dividend following their June year-end.

Speaker #8: They have a fiscal June year-end, and then post-audit, they generally declare their year-end distribution. The timing of that really does sway the overall, you know, our $20 million estimate of annual common distributions is, you know, very heavily weighted to that one payment, which generally happens in Q3.

Speaker #8: The other peak, I am, much lower peak, I let's throw out, I don't know, $4 million comes in Q1. So, as a lot of our other companies are, you know, going through their fiscal year-ends, doing the same process around audit and declaring their year-end dividends and distributions from the common shareholders.

Speaker #8: So, we also see a bit of a bump up, with higher common in Q1. Q2 and Q4 are generally lower. I think this quarter we had $2 million.

Speaker #8: yeah. So I don't know if that gives you color. The other three quarters are a little harder. But Q3 is generally about 50 percent of that common, estimate for the year.

Speaker #9: Gotcha. So it's just in particular Q3 and Q1, more so than something else.

Speaker #8: Yeah, then Q2 and Q4, depending on timing. I mean, it’s hard to predict, and it’s driven by, you know, the different shareholders and how well the business has done.

Speaker #8: And how comfortable they are with their cash balances and how, you know, when they decide to declare that. But that's how it's played out the last couple years, generally.

Speaker #9: Okay. Thank you. That's very helpful. And moving on to the actual partners. Commentary on SonoBello seemed inflect very positively over the last quarter.

Speaker #9: What's driving that, other than the rollout of the GLP-1 related procedures? Is there anything else behind that?

Speaker #4: they continue to add, new locations. probably at a slightly slower pace than they, did a couple years ago. just kind of, with a nod to kind of the softer consumer spending market.

Speaker #4: But, consumer sentiment in the States has, has improved quite a bit over the last few months. So that's a positive there. But, really it was, dollars per procedure that was, that was responsible for the, for the, the beat of their budget.

Speaker #4: And their record quarter, right? And it's not just the GLP-1s; they've added some other products as well. So they've got just a wonderful management team that has been so proactive in adding new procedures.

Speaker #4: So, you know, the skin tightening, the, the breast augmentation, I won't go through all of them. But, but yeah, it's, it, it's a, it's a high-growth story.

Speaker #4: And, you know, certainly, a very, very well-managed company.

Speaker #9: Gotcha. I appreciate that color. And just one last one. So circling back on that consumer sentiment and, with the recent passing of the one big beautiful bill act, we've noticed through other channels that, business sentiment, it might be improving based on that.

Speaker #9: In your experience, have you noticed any changes in tone or outlook within your partners?

Speaker #4: Not really. The one company on our folio that we're watching closely is LMS out of Vancouver. They're the largest installer of rebar in Western Canada and also have operations in California.

Speaker #4: And the steel tariffs that Carney has put in for Canada, and the quotas for imported steel, could be a longer-term issue there.

Speaker #4: They've, they've bought most of their inventory that they need to for their current projects. But, going forward, you know, those, those tariffs and higher, costs on steel will have to be passed on to their customers.

Speaker #4: And that's in their contracts, that does get passed on. However, over the long term, do people stop building buildings in Western Canada because of the cost of steel?

Speaker #4: And so, I know there are many lobby groups talking to the Canadian government about this. They're trying to protect the Ontario steel industry. In the meantime, there's really no steel producers in Western Canada for Western Canadian construction companies to get steel from; all of it typically gets imported from Asian countries.

Speaker #4: So, they're likely going to hurt the development industry in Western Canada. So we'll see what happens there. That's something that we're keeping an eye on.

Speaker #4: But, other than that, very little impact from the big, beautiful bill or tariffs within our portfolio.

Speaker #8: And I'd just add that the one positive to Alaris, as opposed to the partners from the big beautiful bill, is it does move the interest deductibility back to EBITDA from EBIT.

Speaker #8: So, that will be beneficial for us with regards to our future taxes.

Speaker #9: Great color. Thank you very much. I'll turn it over.

Speaker #5: Thank you. And our next question comes from the line of Trevor Reynolds from Acumen Capital. Your question, please.

Speaker #10: Hey, guys. just a couple quick questions here. I was wondering if you could ide, an update on, on Heritage and where that sits today.

Speaker #4: Yeah, Heritage has had a nice rebound, actually. They've been cash flow positive since March, and we've been putting a lot of work into Heritage. This includes one of our former partners who now works for Alaris full-time as a consultant—a kind of roving consultant to any of our companies that need help.

Speaker #4: He's been spending a lot of time with Heritage. We think we've got the management team sorted out there. They've improved their bidding process on new work considerably.

Speaker #4: That was the big problem, a couple years ago was, was bidding, at what ended up being negative gross margins, on, on new, new work.

Speaker #4: that's all sorted out, we've a good backlog with really strong margins. And, so yeah, we're, we're, cautiously optimistic there. I think we're on a ice path, no debt.

Speaker #4: And, and now profitable. So, now it's just going to take time to get the company into, a position where, you ow, we either we either decide to put it on the market and, and sell it, or, or if we just want to hold it long term.

Speaker #4: But, either way, we're, we're control of that company. And, things have progressed quite nicely.

Speaker #9: Okay. Great. And, Sonobello, elected to, to pick their payments again this quarter. Just wondering if, if that's the expectation moving forward, or, maybe any, any, info you can provide on that.

Speaker #4: Yeah. They've indicated that they will pay all cash in the next quarter. So we'll see how things continue. They're an extremely conservative company.

Speaker #4: they have, a very large cash position. But, you know, if they like to have that and, and, use the pick, kind , accordingly. So, yeah, they, they do expect to, pay all cash in Q3.

Speaker #9: Great. And then, I ink last one here, just on, on FMP, the, the contracts that are coming back, are those through the government, or are those, they're finding, finding new contracts, outside of those, those government, ones that they, they had previously?

Speaker #4: These e, these are government contracts. So, you know, just as a, kind of, anecdotal example, you know, some of the contracts were, you know, taken down instead , seven consultants, in, in the department.

Speaker #4: They took it down to one. And then, a couple months later, they said, "Geez, you know, there's still work that actually needs to be done here." And they added back, you know, two or three people.

Speaker #4: So, you know, you've seen contracts that either fully went away or almost fully went away, bringing people back in. And that seems to be continuing, where, you know, obviously, the current regime needed some big press clippings at the start.

Speaker #4: But, there's, there's work that actually does need to be done. And, and I ink, a lot companies that had things canceled on them are, are seeing that.

Speaker #9: Great. And actually, just squeezing one more. I guess just on the redemption front, given the strength that some of these companies are having, like, I know you guys had kind of bumped out the targets on some of the redemptions previously.

Speaker #9: Is it, do you have any sense? Like, is, is anything moving? more near-term, based on the strength?

Speaker #4: I wouldn't say near-term. I think it would be tough, you know, being in August now. I think it would be tough to see things close before year-end.

Speaker #4: But, I think in, in the first half of '26, we'll, we'll probably see, see one or two redemptions there. And those would be ones that, I would very much welcome because they'll show some, some really significant, common equity gains, in addition to, great returns on our press.

Speaker #4: And, allow us to, you know, pay down debt, redeploy capital very profitably since so much of the, the, h, the income will come from the common equity side of it, which we're not ally being, you know, valued for in the, in the market today.

Speaker #4: So, those are, those are things that I think are going to be at catalysts for our stock.

Speaker #9: Great. Thanks for taking my questions.

Speaker #4: Yep.

Speaker #5: Thank you. And our next question comes from the line of Jeff Fenwick from Cormac Securities. Your question, please.

Speaker #11: Hi. morning, everyone. Steve, maybe one more, one more partner, update maybe here on, on Ohana. Could you give us a bit of an update there?

Speaker #11: It looks like they had to step up on their ECR, and top line and EBITDA numbers seem to be trending higher. I know they had initiatives underway that looked like they were going to boost the performance this year.

Speaker #11: But what's the update there?

Speaker #4: Yeah. Things are, continuing to go extremely well at, Ohana. Couldn't be a more stable system. It's why so many private equity firms, have tried to or do own, plan a fitness, systems, in their portfolio.

Speaker #4: the price increase has worked extremely well. So that is kind of filtering through as, as new people join. And, and, so we're eing a nice uptick in, in year-over-year EBITDA.

Speaker #4: They are looking at an acquisition right now as well. They've got excess capacity on their debt facility, so we probably won't need to put any more money in.

Speaker #4: But, certainly, it would increase our expected returns as a large common equity holder when they do exit. So, yeah, things are going extremely well at Ohana.

Speaker #11: Great. That's great to hear. maybe one question for Amanda. I noticed it changed the approach to, how you calculate your free cash flow or your distributable cash flow this quarter.

Speaker #11: Maybe just a bit of color about why you made the change. And does it net out to the same bottom-line result, or are you maybe going to be a little higher or lower versus the prior presentation?

Speaker #8: so the main shift was just how we present the working capital versus cash. And, to better align with how that distributable cash flow, flows into the payout ratio.

Speaker #8: Previously, the payout ratio was on a cash basis. The distributable cash flow had a bit of working capital. And just to better align that and be able to present it, and have one rule directly into another is why we aligned the presentation.

Speaker #8: It does shift things a little bit. For instance, in the old presentation, the cash flow impact of, say, our bonus payment to staff, which gets paid out in March, was hitting in Q1 of 2025 under this new presentation.

Speaker #8: You know, without contemplating the working capital, it, and cash taxes, those will be sort of in the periods, paid. If that makes sense.

Speaker #11: Okay. And then just on, on the numbers you provided there, it does look like the payout ratio was, relatively high in the second quarter.

Speaker #11: I think you called it, maybe it was higher cash taxes. And I know you had some, some added transaction, related fees in there. anything else that was at play?

Speaker #11: And, and can we expect those cash taxes then to, to dip down, in subsequent quarters?

Speaker #8: Yeah. I think we had about $7 million of cash taxes sort of in the portfolio entities. Some of that was a catch-up for 2024.

Speaker #8: As we filed our Canadian returns, so there was a bit of a, from a cash basis, some extra payments that went out, from that standpoint.

Speaker #8: So I think we'll dip down to sort of more normal level. Also in Q1, we had a, a refund to come back. So that also on a cash basis, for Q1, created a little noise in the distributable cash flow as well.

Speaker #11: Okay. Great. That's all I had. Thank you. Thank you.

Speaker #5: Thank you. This does conclude the question-and-answer session of today's program. I'd like to hand the program back to Stephen King for any further remarks.

Speaker #4: Great. Thanks, Jonathan. And thanks, everybody, for, for tuning in. , such great questions. Looking forward , next quarter already, obviously with a, with a ter, better FX, outcome than, what we had this quarter.

Speaker #4: But, hopefully, continued portfolio strength and deployment. So, thanks again.