VANCOUVER, Aug. 13, 2018 - Parkit Enterprise Inc. ("Parkit" or the "Company") (TSXV: PKT; OTCQX: PKTEF) announces that one of the single purpose entities held by OP Holdings JV LLC (the "Joint Venture") has sold Terra Park, its parking facility located in Jacksonville, Florida. Terra Park was bought by the Joint Venture in 2015 for US$6.4 million (consisting of an equity investment of US $2.4 million), and was sold for US $6.83 million plus an additional sum of US $750,000 paid in equal monthly installments over one year. When including the income received from the property over the period the investment was held, the sale represents an estimated levered IRR of approximately 24% to the Joint Venture.
The sale of this asset is positive for Parkit because the Company believes it accelerates the cash flows that the Company should receive from the Joint Venture. Parkit understands that all of the net proceeds from the sale of Terra Park are to be used to satisfy the 15% preferred return of the majority member, OP Holdings JV Member LLC, an affiliate of Oz Real Estate, bringing Parkit closer to fulfilling the majority member's 15% IRR hurdle and thus accelerates the timing of future cash flows to be received by Parkit.
Parkit Enterprise Inc. is engaged in the acquisition, optimization and asset management of income producing parking facilities across the United States. The Company's shares are listed on TSX-V (Symbol: PKT) and on the OTCQX (Symbol: PKTEF).
Neither TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.
Certain statements in this release are forward-looking statements. Forward-looking statements consist of statements that are not purely historical, including any statements regarding beliefs, plans, expectations or intentions regarding the future. Forward-looking statements in this Press Release include those concerning the Company's anticipation that the sale of Terra Park represents an estimated levered IRR of approximately 24% to the Joint Venture, the belief that it will accelerate cash flows to the Company from the Joint Venture and the projected use of the net proceeds from the sale. Such statements are subject to risks and uncertainties that may cause actual results, performance or developments to differ materially from those contained in the statements. No assurance can be given that any of the events anticipated by the forward-looking statements will occur or, if they do occur, what benefits the Company will obtain from them, if any.
NON-GAAP FINANCIAL MEASURES
This release contains a non-GAAP financial measure. The definition and calculation of this non-GAAP financial measure may differ from the definitions and methodologies used by other companies and, accordingly, may not be comparable. The non-GAAP financial measure referred to below should not be considered an alternative to net income as an indication of our performance. In addition, this non-GAAP financial measure does not represent cash generated from operating activities in accordance with GAAP and therefore should not be considered as an alternative measure of liquidity or as indicative of cash available to fund cash needs.
Levered Internal Rate of Return ("IRR") is calculated as the internal rate of return on the Joint Venture's equity investment in the property considering the timing and amounts of capital contributions paid, and all distributions received. Management believes that the levered IRR achieved during the period a property is owned by the Joint Venture is useful because it is one indication of the gross value created by the Joint Venture's acquisition, management and ultimate sale of a property, before the impact of Joint Venture's overhead and taxes. However, leveraged IRR is not a substitute for net income as a measure of our performance.
The levered IRR achieved on the property as cited in this release should not be viewed as an indication of the gross value created with respect to other properties owned by the Joint Venture, and the Company does not represent that the Joint Venture will achieve similar levered IRRs upon the disposition of other properties. The levered IRR cited in this press release is from the perspective of the Joint Venture, in which the Company has an economic interest.
Under GAAP, the Company recognizes its investment in the Joint Venture using the equity method whereby the carrying value of the investment is adjusted for the Company's share of the profit and loss of the Joint Venture, and decreased for any distributions received by the Joint Venture. All amounts reported by the Company from the Joint Venture are translated into Canadian dollars. The gain on the disposition of the property will have an impact on the amount reported by the Company for its share of the GAAP net profit from the Joint Venture. However, under the terms of the Joint Venture agreement, the Company does not expect to receive any capital distributions at this time from the Joint Venture arising from this property disposition.
For further information please contact:
Chief Executive Officer
Tel. (604) 424-8700