Accord Reports Record Funds Employed And Record First Quarter Factoring Volume And Announces First Quarter 2014 Earnings

TORONTO, May 7, 2014 /CNW/ - Accord Financial Corp. (TSX - ACD) today released its financial results for the quarter ended March 31, 2014. The financial figures presented in this release are reported in Canadian dollars and have been prepared in accordance with International Financial Reporting Standards.

Net earnings declined by $449,063 or 36% to $796,965 in the first quarter of 2014 compared to the $1,246,028 earned in the first quarter of 2013. Net earnings declined as a result of an increase in general and administrative expenses ("G&A"), a higher provision for credit and loan losses, increased interest expense, and business acquisition costs related to the acquisition of Varion Capital Corp. ("Varion") on January 31, 2014. Earnings per common share ("EPS") decreased to 10 cents compared to 15 cents last year.

Adjusted net earnings totaled $1,234,659 in the first quarter of 2014, 2% below the $1,265,939 earned in the first quarter of 2013. Adjusted EPS were 15 cents, the same as in last year's first quarter.

Factoring volume increased by 15% or $68 million to a first quarter record $516 million in the current quarter compared to $448 million last year. Funds employed increased 26% to a record high $137 million at March 31, 2014 compared to $109 million one year ago. Revenue rose by 11% to $6,616,225 in the current quarter compared to $5,947,217 last year. Revenue increased on higher funds employed and factoring volume.

Commenting on the first quarter's results, Mr. Tom Henderson, the Company's President and CEO, noted: "The highlight of the first quarter was the acquisition of Varion, a Vancouver-based leasing company founded in 2004. This strategic acquisition strengthens our ability to serve the Canadian marketplace by providing more financing options to companies in need of capital.  Varion fits seamlessly into the Accord family, with its similar risk/reward profile and our mutual dedication to quality loan portfolios. The record level of funds employed at March 31, record first quarter factoring volume and increase in revenue clearly show a satisfying pick up in business activity versus the year ago period. We also had record high equity at March 31, 2014. In spite of the improved top line performance, we recorded lower earnings.  A number of non-operating expense categories led to a decrease in net earnings; stock-based compensation expense rose substantially, while business acquisition costs related to the Varion acquisition were incurred. Further, there was an increase in the provision for losses that mainly resulted from an increase in our reserves expense, as higher allowances for losses were set up to cover a $28 million rise in funds employed in the quarter."

As noted in the Company's press release of April 23, 2014, a regular quarterly dividend of $0.08 per share has been declared payable June 2, 2014 to shareholders of record at the close of business May 15, 2014.

About Accord Financial Corp.

Accord Financial Corp. is a leading North American provider of asset-based financial services, including factoring, lease financing, trade finance, credit guarantees and collection services.  For over 35 years, Accord has helped businesses across Canada and the U.S. manage their cash flows and maximize financial opportunities - keeping business liquid.

Note: Non-IFRS measures

The Company's financial statements have been prepared in accordance with IFRS. The Company uses a number of other financial measures to monitor its performance and believes these measures may be useful to investors in evaluating the Company's operating performance and financial position. These measures may not have standardized meanings or computations as prescribed by IFRS that would ensure consistency between companies using these measures and are, therefore, considered to be non-IFRS measures.

Adjusted net earnings and adjusted earnings per common share ("EPS") are non-IFRS measures used in this press release. The Company derives these measures from amounts presented in its IFRS prepared financial statements. Adjusted net earnings comprise net earnings before non-operating stock-based compensation and business acquisition expenses (namely, transaction and integration costs and amortization of intangibles). Adjusted EPS is adjusted net earnings divided by the weighted average number of common shares outstanding in the quarter. Management believes adjusted net earnings is a more appropriate measure of operating performance as it excludes items which do not relate to ongoing operating activities. The following table provides a reconciliation of the Company's net earnings to adjusted net earnings:

SOURCE Accord Financial Corp.