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Patient. Permanent. Founders Advantage. Corporate Presentation TSX-V: FCF July 2020

Investor Presentation Web July - advantagecapital.ca€¦ · Companies, in June 2017 Analyst Coverage Portfolio Companies Capital Partner US$32.0mm (C$45.4 million (3)) Outstanding

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Page 1: Investor Presentation Web July - advantagecapital.ca€¦ · Companies, in June 2017 Analyst Coverage Portfolio Companies Capital Partner US$32.0mm (C$45.4 million (3)) Outstanding

Patient. Permanent. Founders Advantage.Corporate Presentation

TSX-V: FCF July 2020

Page 2: Investor Presentation Web July - advantagecapital.ca€¦ · Companies, in June 2017 Analyst Coverage Portfolio Companies Capital Partner US$32.0mm (C$45.4 million (3)) Outstanding

Who we are...Founders Advantage Capital Corp. (“FAC”) is an investment company whose purpose is to grow shareholder value by acquiring controlling interests in, and partnering with, successful / premium owner-operated companies with defensive attributes and strong free cash flow generation. We are patient capital with no defined investment horizon.

Why invest in us…We have partnered with three exceptional business owners operating in the middle-market across Canada. The owner-operators we target are interested in a partial liquidity event, while maintaining cultural and operational control of the business they built. Our capital is permanent in nature, with no predefined investment horizon, which appeals to business owners who are excited about their future growth prospects. The FAC advantage offers business owners compelling incentives based on achieving free cash flow growth hurdles, which creates strong alignment between all stakeholders.

FOUNDERS ADVANTAGE CAPITAL CORP.

2

Page 3: Investor Presentation Web July - advantagecapital.ca€¦ · Companies, in June 2017 Analyst Coverage Portfolio Companies Capital Partner US$32.0mm (C$45.4 million (3)) Outstanding

Raveel Afzaal

Noel Atkinson

Gary Ho

FA CAPITAL SNAPSHOT

3

Ticker Symbol: TSX-V FCF

Share Price (July 10, 2020) $1.04

Shares Outstanding (Basic) 38.1mm

Market Capitalization $39.6mm

Net Debt (Cash)(1) $43.6mm

Enterprise Value $83.2mm

2019A Proportionate Share of Investee Adjusted EBITDA(2) $21.5mm

Insider Ownership ~60%

Closed term credit facility with Sagard Holdings, a member of the Power Corporation Group of

Companies, in June 2017

Analyst Coverage

Capital PartnerPortfolio Companies

US$32.0mm (C$45.4 million(3)) OutstandingCommitted 5-year Senior Facility

June 2022 Maturity

Summary Capitalization

(1) Based on corporate net debt (gross of debt issuance costs) as at March 31, 2020; does not include investee balances. US$32.0mm outstanding debt at $1.4187 CAD/USD as at March 31, 2020.

(2) Proportionate Share of Investee Adjusted EBITDA (PSI Adjusted EBITDA) is a non-IFRS performance measure that does not have a standardized meaning. Please see the “Non-IFRS Measures” section of this document for additional information. Excludes discontinued operations.

(3) $1.4187 CAD/USD as at March 31, 2020.

Page 4: Investor Presentation Web July - advantagecapital.ca€¦ · Companies, in June 2017 Analyst Coverage Portfolio Companies Capital Partner US$32.0mm (C$45.4 million (3)) Outstanding

4

A GROWING, WELL-DIVERSIFIED PORTFOLIO

Acquisition of 60% Interest of

June 3, 2016

Canada’s largest mortgage

brokerage with ~40% market share,

originating ~$40 billion in funded

volumes per year

Acquisition of 60% Interest of

December 20, 2016

Acquisition of 52% Interest of

March 1, 2017

Leader in Western Canada’s fitness industry with 14

facilities, 25+ year track record and

~95,000 members

One of North America’s largest

designers and suppliers of two-way

radio accessories

Premium owner-operated companies with ~50 years of combined operating history

Selling shareholders retain meaningful stake (~43% retained

interest on average)

~$35.0mm Consolidated Annual Adjusted EBITDA(1) with strong

free cash flow generation

(1) Consolidated Adjusted EBITDA is a non-IFRS performance measure that does not have a standardized meaning. Please see the “Non-IFRS Measures” section of this document for additional information. Excludes discontinued operations. For the period ended December 31, 2019.

Page 5: Investor Presentation Web July - advantagecapital.ca€¦ · Companies, in June 2017 Analyst Coverage Portfolio Companies Capital Partner US$32.0mm (C$45.4 million (3)) Outstanding

Add on vertical acquisitions at DLC

Explore new Club16 locations

Develop new products at Impact

5

Executing on Strategic Priorities

1 2 3Strengthen Foundation

Grow the Base Businesses

Explore Investee

Opportunities Significant effort to reduce

corporate overhead costs from >$4.0mm to ~$2.0mm; meaningful increase to free cash flow

Pay down debt from excess cash flow

Focus capital and human resources on existing base businesses to create a stronger platform for stable free cash flow growth

Margin improvement programs at each investee

DLC to continue adding mortgage brokers

Club16 continues to focus on converting smaller She’sFit! locations into larger Club16’s

Impact focused on new product development with potential large end-users

Focus on growing long-term shareholder value

Page 6: Investor Presentation Web July - advantagecapital.ca€¦ · Companies, in June 2017 Analyst Coverage Portfolio Companies Capital Partner US$32.0mm (C$45.4 million (3)) Outstanding

6

EXPERIENCED LEADERSHIP TEAM

James BellPresident & CEO

Robin BurpeeChief Financial Officer

Peter McRae President & CEO of Freedom International Brokerage Company (1994–2015) Member of the Audit Committee, Corporate Governance Committee and Compensation Committee

Board of DirectorsManagement Team

Amar S. LeekhaSenior Vice President

J.R. Kingsley Ward Managing Partner & Chairman of VRG Capital Corp. Chair of FA Capital’s Corporate Governance Committee and member of the Compensation Committee

Dennis Sykora Independent Director with >25 years of experience as a senior corporate executive, lawyer and CA Chair of FA Capital’s Audit Committee

Anthony Lacavera Founder & current Chairman of Globalive Group Founder, Chairman & CEO of Wind Mobile from 2008–2015

Gary Mauris Co-Founder & CEO of Dominion Lending Centres Serial entrepreneur having sold two prior companies to the public market

James Bell Securities and corporate lawyer with ~20 years of experience Prior to joining FAC, 10 years in private practice and 6 years as General Counsel for a public trust

company

Ron Gratton, Chairman of the Board Manages McCaig Family Office Chair of FA Capital’s Corporate Compensation Committee, and member of the Audit and Governance

Committees

Chris Kayat Co-Founder & Executive VP of Dominion Lending Centres

Management team and board has significant experience across several industries

Page 7: Investor Presentation Web July - advantagecapital.ca€¦ · Companies, in June 2017 Analyst Coverage Portfolio Companies Capital Partner US$32.0mm (C$45.4 million (3)) Outstanding

Segment Investees Year Purchased

Ownership Interest

2019 Adjusted EBITDA(1)

($mm)

IFRS16 Lease

Payments ($mm)

Implied Sector

Multiple(2)

Implied Enterprise

Value ($mm)(3)

Net Investee Debt

(Dec 31, 2019)($mm)

Estimated Equity Value

($mm)(3)

Implied FAC Equity value

($mm)(3)

DLC 2016 60% $21.6 $0.2 ~10.0x $214.0 $7.7 $206.3 $123.8

Club16 2016 60% $11.0 $4.3 ~6.75x $45.2 $9.2 $36.0 $21.6

Impact 2017 52% $4.8 $0.1 ~6.25x $29.4 ($0.6) $30.0 $15.6

TOTAL: $37.4 $4.6 $288.6 $16.3 $272.3 $161.0

$43.6$117.4$3.08

Management Estimated FAC Equity Value

COMPELLING LONG-TERM VALUE PROPOSITION

7

(1) Please see the “Non-IFRS Measures” section of this document for additional information. As at December 31, 2019.(2) DLC implied sector multiple based on Q4 2018 third party offer (previously disclosed). Remaining implied sector multiples based on multiple paid by FAC. Please see Disclaimer section of this document.(3) Implied Enterprise Value derived from YTD 2019 Adjusted EBITDA less IFRS16 lease payments as at December 31, 2019; Estimated Equity value derived from Implied Enterprise Value less Net Debt;

Implied FAC Equity value derived from Estimated Equity value and FAC ownership interest. (4) Gross of debt issuance costs. Net of cash. Excludes future debt repayments. As at March 31, 2020. US$32.0mm outstanding debt at $1.4187 CAD/USD as at March 31, 2020.(5) Management estimated FAC equity value/share is calculated using the number of shares outstanding as at March 31, 2020.

Total Corporate Net Debt(4)

Management Estimated FAC Equity Value/ Share(5)

• FAC has built a diversified portfolio of defensive mid-market Canadian companies, which have all experienced EBITDA growth since FAC’s initial majority investment and record Adjusted EBITDA in 2019

• Notwithstanding this growth, there has been a continued divergence between the public equity value and management estimated equity value of the investee companies

• Managements near-term focus is to continue executing on organic growth opportunities for our investee companies; figures below excludes growth from 2020, onwards

Page 8: Investor Presentation Web July - advantagecapital.ca€¦ · Companies, in June 2017 Analyst Coverage Portfolio Companies Capital Partner US$32.0mm (C$45.4 million (3)) Outstanding

8

SUMMARY POINTS

• Premium mid-market companies with operations across Canada and the US

• History of stability across market cycles and free cash flow growth

• De-risked portfolio via diversification

Defensive and Diversified Businesses

• Unique access to investments in premium owner-operated companies

• Model highly incents business owners to continue growing their business

• Ensures alignment across stakeholder groups

Access to High

Quality Cash Flow Streams

• Unique structure provides a competitive advantage to partner with premium companies and highly engaged management teams

• Portfolio approach produces a diverse stream of cash flows

Creating Shareholder

Value

Unique access to premium private companies with strong growth and cash flow

Page 9: Investor Presentation Web July - advantagecapital.ca€¦ · Companies, in June 2017 Analyst Coverage Portfolio Companies Capital Partner US$32.0mm (C$45.4 million (3)) Outstanding

PORTFOLIO COMPANY PROFILES

Page 10: Investor Presentation Web July - advantagecapital.ca€¦ · Companies, in June 2017 Analyst Coverage Portfolio Companies Capital Partner US$32.0mm (C$45.4 million (3)) Outstanding

35.81 

40.1 

 25.00 27.00 29.00 31.00 33.00 35.00 37.00 39.00 41.00 43.00 45.00

2016 2019

443 

515 

 200

 300

 400

 500

 600

2016 2019

5,237 

5,627 

 4,000

 4,500

 5,000

 5,500

 6,000

2016 2019

$9.5

$16.4

$16.3

$19.8

$21.1

$26.9

$33.8

$38.8 $40.1

$44.8

35%

49% 45%49% 48%

2010 2011 2012 2013 2014 2015 2016 2017(3) 2018 2019(4)$0.0

$5.0

$10.0

$15.0

$20.0

$25.0

$30.0

$35.0

$40.0

$45.0

$50.0

$17.5$21.6

Top Lenders Include:

Dominion Lending Centres (“DLC”) is Canada’s largest mortgage brokerage with ~$40 billion in annual funded mortgages

• #1 market share with additional consolidation opportunities

DLC generates the majority of revenue from:

• Royalty fees on mortgage revenue from >5,600 mortgage brokers across > 500 franchises

• Connectivity fees from lenders and suppliers

• Fin-tech subsidiary, Newton Connectivity Systems

Four primary brands:

DOMINION LENDING CENTRES BUSINESS OVERVIEW

10

Business Snapshot

(1) Normalized Adjusted EBITDA & Adjusted EBITDA margin figures; 2017A Adjusted EBITDA margin based on $17.5mm EBITDA; 2019A Adjusted EBITDA margin based on $21.6mm EBITDA.(2) DLC reported a 2017A Adjusted EBITDA of $16.3 mm including $1.2mm in non-reoccurring NCS restructuring charges. Please see the “Non-IFRS Measures” section of this document for

additional information.(3) Based on TTM EBITDA of $14.6 million at the time of the DLC acquisition, which closed June 3, 2016.(4) DLC reported a YTD December 31, 2019 Adjusted EBITDA of $21.1 mm including $0.5mm in non-reoccurring loss on a settlement of a contract dispute with a third-party provider. Please see the

“Non-IFRS Measures” section of this document for additional information.

Revenues, Adjusted EBITDA & EBITDA Margins(1)(2)

In C$ millions

Number of Brokers & Franchises & Funded Volumes

BROKERS FRANCHISEES FUNDED VOLUMES (C$ billions)

+10% EBITDA CAGR under FAC’s ownership(3)

Page 11: Investor Presentation Web July - advantagecapital.ca€¦ · Companies, in June 2017 Analyst Coverage Portfolio Companies Capital Partner US$32.0mm (C$45.4 million (3)) Outstanding

NEWTON CONNECTIVITYSYSTEMS ECOSYSTEM

11Note: This ecosystem is for illustrative purposes and does not include an exhaustive list of all Newton relationships and partnerships

Denotes Newton asset

Third-Party Loan Origination

System

Mortgage Brokers

Third-Party Point of Sale

Third-PartySuppliers

EnterpriseLenders

Newton offers a comprehensive suite of services that connect borrowers, mortgage brokers, lenders, and third-party service providers

Page 12: Investor Presentation Web July - advantagecapital.ca€¦ · Companies, in June 2017 Analyst Coverage Portfolio Companies Capital Partner US$32.0mm (C$45.4 million (3)) Outstanding

DLC acquired a 70% interest in Newton Connectivity Systems (“Newton”, previously Marlborough Stirling Canada) in December 2016; Newton is one of two approved software platforms connecting Canadian lenders and mortgage brokers• DLC’s unique strategic position enables them to increase Newton’s market share by cross selling Newton’s platform to DLC

brokers

DOMINION LENDING CENTRES TRANSACTION OVERVIEW

12

(1) Purchase price was satisfied with a cash payment of ~$59.8mm and the issuance of 4,761,905 common shares at an ascribed price of $2.625/share; share price at close (June 3, 2016) was $5.60/share, resulting in $26.7mm in share consideration at the time of closing.

Transaction Structure

Why is DLC a Fit for FA Capital? Consistent growth over its life with a 3 year Revenue

and EBITDA CAGR of 12% and 19%, respectively

Highly diversified revenue stream with >300 brokers and 350 offices across the country

High free cash flow conversion with minimal capex

Industry leading brand with #1 market share

DLC’s investment in Newton, one of two broker/lender connectivity platforms in Canada, make DLC a technology leader in the mortgage broker industry

Ownership Interest Capital Invested Distribution

Threshold Distributions to FAC

Above ThresholdForm of

Consideration Closing Date

60% $72.3mm(1) $14.6mm 30% Cash and Shares June, 2016

Follow-on Investment

DLC is a stable, cash flow generating market leader in an expanding industry and has the installed base and platform to grow

(2) As measured by D+H Expert system and excludes lenders who do not use D+H Expert. Based on January 1, 2019 to December 31, 2019.

Regional Market Share(2)

Page 13: Investor Presentation Web July - advantagecapital.ca€¦ · Companies, in June 2017 Analyst Coverage Portfolio Companies Capital Partner US$32.0mm (C$45.4 million (3)) Outstanding

13

CLUB16 BUSINESS OVERVIEWBusiness Snapshot Club16 owns and operates two fitness brands with 14

locations in the Lower Mainland area• Club16 Trevor Linden Fitness Clubs – 11 locations• She’s FIT! Health Clubs – 3 locations

Established brand with ~95,000 memberships Differentiated offering by focusing on top of the line

equipment and low-cost month-to-month membership fees without contracts

Track record of 1-2 clubs opening annually, with each new club profitable within 12 months

Club Locations

Club16 opens location in Central City and Surrey

2007/08

Women’s Only Fitness opens first location in Surrey (25+ year track record)

She’s FIT! opens in Metrotown

2011

First Club16 opens in Coquitlam, followed by second location in South Burnaby

2012

Club16 opens in Downtown Vancouver

2013 2014

Club16 opens in Maple Ridge

2015 2016

Club16 opens in Abbotsford Club16 opens in North

Vancouver Central City Club16 completes

expansion

Club16 opens in Newton

2010

Timeline

1991

Women’s Only Fitness converts to She’s FIT!; new locations in Langley, White Rock and Delta

Co-Location of Club16 and She’s FIT!

She’s FIT! Location

2017

Club16 expanded its Coquitlam location and converted its She’s Fit White Rock location into Club16

Chuck Lawson (President & CEO) is the recipient of the 2018 Fitness Industry Council of Canada award

2018

She’s FIT! White Rock converted to Club16

2019

Club16 opens in Tsawwassen

Club16 converted its She’s Fit Langley location into Club16

Page 14: Investor Presentation Web July - advantagecapital.ca€¦ · Companies, in June 2017 Analyst Coverage Portfolio Companies Capital Partner US$32.0mm (C$45.4 million (3)) Outstanding

14

STRATEGIC CAPITAL INVESTMENTSClub Expansions Capital projects expected to drive additional growth in

member count and EBITDA

Initiatives focused on:

• Converting She’sFit! Locations to Club16’s

• Opening new locations in underserved markets

• Launching personal training across all clubs

Proven model that management has executed over the last 25+ years

Since December 20, 2016 Club16 has:

• Invested >$4mm on expansion projects

• Invested >$2mm on new clubs

• Member growth >28,000

Tsawwassen and Langley clubs are built in suburban areas situated near major shopping centers with significant foot traffic

Tsawwassen

New Club LocationsSouth Surrey Coquitlam

TsawwassenLangley

Typical Club Structure

Number of Clubs 11 (co-located with She’s FIT!) 3 (standalone)

Average Club Size 22,000 sq. ft. 10,000 sq. ft.

Average Members / Club 7,800 3,500

Membership Cost $8 - $13 bi-weekly

Other Services Personal Training, Group Training, Meal Planning, Bike Rentals and Tanning

Page 15: Investor Presentation Web July - advantagecapital.ca€¦ · Companies, in June 2017 Analyst Coverage Portfolio Companies Capital Partner US$32.0mm (C$45.4 million (3)) Outstanding

23.8  24.5 

26.5 

30.3 

6.4  6.3  6.1 

11.0 26.8%25.6%

22.9%

36.5%

0

4

8

 ‐

 5.0

 10.0

 15.0

 20.0

 25.0

 30.0

 35.0

2016 2017 2018 2019

78,316 81,019 

84,370 

95,219 

72,000

82,000

92,000

2016 2017 2018 2019

15

CLUB16 TRANSACTION OVERVIEW

Transaction Structure

Why is Club16 a Fit for FA Capital? Significant membership growth with ~64,000 as at

March 2015 to currently ~95,000 (~10.4% CAGR)

Established brand with >10 year track record; Proven operators with >25 years experience

Diverse base of cash flows from 14 locations in Vancouver and the Lower Mainland; significant room to continue to grow

Ownership Interest Capital Invested Distribution

Threshold Distributions to FAC

Above ThresholdForm of

Consideration Closing Date

60% $22.0mm $5.85mm 30% Cash December, 2016

Club16 is an established and stable business that provides strong free cash flow generation with a quick payback on additional expansions and build-outs

(1) 2016 and 2019 revenues and adjusted EBITDA are shown December 31, 2016 and December 31, 2019, respectively.(2) Number of members are at the respective December 31 balance sheet date and are shown in whole numbers(3) 2019 Adjusted EBITDA increased on the adoption of IFRS 16 – Leases. Pursuant to the new accounting standard, $4.3 million of lease payments previously recognized

as rent expense are now reflected as $3.8 million of depreciation expense and $2.2 million of interest expense in the year ended December 31, 2019. Please see the “Accounting Policies” section of this document for additional information.

Revenues, Adjusted EBITDA & EBITDA Margins(1)

In C$ millions

Number of Members(2)

3

Page 16: Investor Presentation Web July - advantagecapital.ca€¦ · Companies, in June 2017 Analyst Coverage Portfolio Companies Capital Partner US$32.0mm (C$45.4 million (3)) Outstanding

IMPACT RADIO ACCESSORIESBUSINESS OVERVIEW

16

Business Snapshot

Impact Radio Accessories (“Impact”) is one of the largest designers and suppliers of two-way radio accessories in North America

Founded in 2002

Over 800 customers with strong retention history

Reputable customer base

Product Lines

Silver Series Gold Series Platinum Series

Entry level, for budget conscious customers with a 6-month warranty

Mid-priced, affordable and

quality product with a 2-year warranty

Premium line with an industry leading 3-year

warranty

Select Clients

Select End Users

Surveillance kits Chargers

Speaker Mics Headsets

Page 17: Investor Presentation Web July - advantagecapital.ca€¦ · Companies, in June 2017 Analyst Coverage Portfolio Companies Capital Partner US$32.0mm (C$45.4 million (3)) Outstanding

IMPACT RADIO ACCESSORIESTRANSACTION OVERVIEW

17

Why is Impact a Fit for FA Capital?

Premium mid-market company founded in 2002 with 15+ years of excellent operating history

Significant free cash flow generation with limited capex and no debt

Strong brand recognition with distributers and end-users

Transaction StructureOwnership

Interest Capital Invested Distribution Threshold

Distributions to FAC Above Threshold

Form of Consideration Closing Date

52% $12.5mm $2.96mm 35% Cash March, 2017

IMPACT boasts an extensive reputable end-user base and 15+ year track record

Revenues, Adjusted EBITDA & EBITDA Margins(1)

In C$ millions

(1) 2017 and 2019 revenues and adjusted EBITDA are shown December 31, 2017 and December 31, 2019, respectively.

$11.7 $11.1 

$13.2 

$15.2 

$3.9 $3.1 

$4.0 $4.8 

33%

28%30%

31%

10%

15%

20%

25%

30%

35%

40%

0.0

2.0

4.0

6.0

8.0

10.0

12.0

14.0

16.0

2016 2017 2018 2019

Page 18: Investor Presentation Web July - advantagecapital.ca€¦ · Companies, in June 2017 Analyst Coverage Portfolio Companies Capital Partner US$32.0mm (C$45.4 million (3)) Outstanding

18

DISCLAIMERTHIS PRESENTATION IS BEING SUPPLIED TO YOU SOLELY FOR YOUR INFORMATION AND MAY NOT BE REPRODUCED, FURTHER DISTRIBUTED OR PUBLISHED IN WHOLE OR IN PART BYANY OTHER PERSON. THIS PRESENTATION DOES NOT CONSTITUTE OR FORM PART OF ANY OFFER FOR SALE OR SOLICITATION OF ANY OFFER TO BUY ANY SECURITIES NOR SHALL ITOR ANY PART OF OR FORM THE BASIS OF OR BE RELIED ON IN CONNECTION WITH ANY CONTRACT OR COMMITMENT TO PURCHASE SECURITIES.

The information contained in this presentation is provided as at the date of this presentation, may be in summary form and is not purported to be complete. No representation or warranty, express or implied,is made or given by or on behalf of the Founders Advantage Capital Corp. (“FAC” or the “Company) or any of its employees, officers, directors, advisers, representatives, agents or affiliates as to theaccuracy, completeness or fairness of the information contained in this presentation. None of the Company its employees, officers, directors, advisers, representatives, agents or affiliates, shall have anyliability whatsoever (in negligence or otherwise, whether direct or indirect, in contract, tort or otherwise) for any loss howsoever arising from any use of this presentation or its contents or otherwise arising inconnection with this presentation.

No Other Authorized Statements or Representations: Readers are cautioned that no director, officer, employee, agent, affiliate or representation of the Company is authorized or permitted to make anywritten or verbal representation or statement concerning the business or activities of the Company, except as set out in this presentation. The Company expressly disclaims any written or verbal statement inaddition to or contrary to anything contained in this presentation, and cautions readers that they are not entitled to reply on any written or verbal statement made by any person to the contrary.

Disclaimer Regarding Compelling Long-term Value Proposition: The Compelling Long-term Value Proposition Slide includes management’s estimate of an expected EV/EBITDA multiple for eachinvestee and includes management’s estimate of possible sale proceeds. The EV/EBITDA multiples for each asset can change based on market factors and the actual multiple obtained may be significantlylower or higher than those set out in this presentation. The information regarding the Compelling Long-term Value Proposition is intended to assist shareholders to better understand FAC’s business butshould not be considered a valuation of FAC’s assets or an assurance of future value of FAC’s assets. Investors are encouraged to seek independent advice with respect to properly valuing FAC’s assetsand should not place undue reliance on management’s estimates.

Non-IFRS Measures: Adjusted EBITDA for both our corporate head office and investees is defined as earnings before finance expense, taxes, depreciation, amortization, and any unusual, non-core, or one-time items. The Corporation considers its core operating activities to be the management of its operating subsidiaries, and related services. Costs related to strategic initiatives such as business acquisitions,integration of newly acquire businesses and restructuring are considered non-core. PSI Adjusted EBITDA comprise the adjusted EBITDA attributable to shareholders without considering FAC corporatecosts. Readers are cautioned that Adjusted EBITDA and PSI Adjusted EBITDA should not be construed as a substitute or an alternative to applicable generally accepted accounting principle measures asdetermined in accordance with IFRS. Please see FAC’s MD&A for a reconciliation of Non-IFRS measures.

Accounting Policies: On January 1, 2019, the Company adopted IFRS 16. The new standard is a significant change for the way the Company accounts for its buildings, gym locations, office spaces andvehicles. Under the new standard, right-of-use assets and lease liabilities are recognized for operating leases. Rental costs previously captured under general and administrative expense shifted todepreciation and amortization and interest expense under the new standard, which increased adjusted EBITDA. While the change in standard increased adjusted EBITDA, it did not change the cash flowsassociated with the lease.

Forward-Looking Information: Certain statements in this document constitute forward-looking information under applicable securities legislation. Forward-looking information typically contains statementswith words such as “anticipate,” “believe,” “estimate,” “will,” “expect,” “plan,” “intend,” or similar words suggesting future outcomes or an outlook. Forward-looking information in this document includes, but isnot limited to, the 2019 outlook, FAC head office achieving a reduction in Corporate overhead expenses, the investee distributions to FA Capital and corporate free cash flow.

Such forward-looking information is necessarily based on a number of estimates and assumptions, including material estimates and assumptions, related to the factors identified below that, while consideredreasonable by the Company as at the date of this presentation in light of management’s experience and perception of current conditions and expected developments, are inherently subject to significantbusiness, economic and competitive uncertainties and contingencies. Known and unknown factors could cause actual results to differ materially from those projected in the forward-looking statements andundue reliance should not be placed on such statements and information. Such factors include, but are not limited to, changes in taxes and capital; increased operating, general and administrative, and othercosts; changes in interest rates; general business, economic and market conditions; our ability to obtain the required capital to finance our investment strategy and meet our commitments and financialobligations; our ability to source additional investee entities and to negotiate acceptable acquisition terms; our ability to obtain services and personnel in a timely manner and at an acceptable cost to carry outour activities; DLC’s ability to maintain its existing number of franchisees and add additional franchisees; changes in purchase multiples for our assets; changes in Canadian mortgage lending and mortgagebrokerage laws; material decreases in the aggregate Canadian mortgage lending business; changes in the fees paid for mortgage brokerage services in Canada; changes in the regulatory framework for theCanadian housing sector; demand for DLC, Club16 and Impact products remaining consistent with historical demand; our ability to realize the expected benefits of the DLC, Club16 and Impact transactions;our ability to generate sufficient cash flow from investees to meet current and future commitments and obligations; the uncertainty of estimates and projections relating to future revenue, taxes, costs andexpenses; changes in, or in the interpretation of, laws, regulations or policies; the outcome of existing and potential lawsuits, regulatory actions, audits and assessments; and other risks and uncertaintiesdescribed elsewhere in this document and in our other filings with Canadian securities authorities.

Many of these uncertainties and contingencies can affect our actual results and could cause actual results to differ materially from those expressed or implied in any forward-looking statements made by, oron behalf of, us. Readers are cautioned that forward-looking statements are not guarantees of future performance. All forward-looking statements made in this presentation are qualified by these cautionarystatements. The foregoing list of risks is not exhaustive. For more information relating to risks, see the Risk Factors section in our annual MD&A and the risk factors identified in our Annual Information Form.The forward-looking information contained in this document is made as of the date hereof and, except as required by applicable securities laws, we undertake no obligation to update publicly or revise anyforward-looking statements or information, whether as a result of new information, future events or otherwise.

Page 19: Investor Presentation Web July - advantagecapital.ca€¦ · Companies, in June 2017 Analyst Coverage Portfolio Companies Capital Partner US$32.0mm (C$45.4 million (3)) Outstanding

19

James BellPresident & CEOFounders Advantage Capital Corporation Tel: (403) 455-2218Email: [email protected]

CONTACT US

Amar S. LeekhaSenior Vice PresidentFounders Advantage Capital CorporationTel: (403) 455-6671Email: [email protected]

Head Office: Suite 400, 2207 4th St. SWCalgary, Alberta, T2S 1X1www.advantagecapital.ca

TSX-V: FCF

Robin BurpeeChief Financial OfficerFounders Advantage Capital Corporation Tel: (403) 455-9670Email: [email protected]