Vancouver, British Columbia--(Newsfile Corp. - March 31, 2020) - Solution Financial Inc. (TSXV: SFI) (the"Company") a leading provider of luxury automotive and yacht leasing in western Canada, today announced its financial results for the first quarter ending January 31, 2020.
Earnings Highlights for the Quarter:
- Net income increased to $76,399 and Adjusted net income(1) increased to $310,354.
- Net revenue increased 38% over the prior year quarter to $2,986,445.
- Total lease and finance portfolio grew 9% to $24,089,464 over the prior quarter
- Quarterly dividend on common shares of $0.001 per share or roughly 1.4% returns at the Company's current share trading price of $0.35 per share.
"We completed our fifth consecutive profitable quarter and completed our expansion into Alberta," began Bryan Pang, CEO.
"We expect profitability to continue but unfortunately with the outbreak of COVID-19 we expect business to be much slower and have implemented a work from home policy across our organization in accordance with government requirements. We expect to be able to manage this crisis better than most as our leasing portfolio is mostly comprised of clientele who are leasing for flexible upgrades rather than financial need. We are actively supporting our dealer transactions and lease-end renewals and sales remotely. We do not have a lot of overhead costs, including owning our principle office locations and our compensation structure has a large variable component. We have a relatively small team and we're well positioned to maintain operations for considerable time if need be. In the meantime, we are continuing to focus on investor awareness and preparation for a growth financing to support further expansion opportunities when the markets return to normal," continued Bryan.
"To help out we recently made a matching donation of up to $5,000 to COVID-19Care.ca, a GoFundMe campaign setup in Western Canada to support delivery and companion care services for our elderly and at-risk neighbours. We wish our investor and dealer networks well and hope for a quick solution during these challenging times," concluded Bryan Pang.
Financial Results
Solution is reporting a net income of $76,399, or $0.001, per share for the quarter ending January 31, 2020. This compares to a net income of $9,224 or $0.000 per share for the quarter ending January 31, 2019.
Adjusted net income for the quarter ending January 31, 2020 was $241,854(1) or $0.004 per share compared to $124,450 or $0.001 per share for the quarter ending January 31, 2019. Adjusted Net Income excludes the non-cash accretion expense related to the convertible debentures of $52,205, share-based compensation expense of $37,294 for stock compensation, deferred income tax provision of $68,500 and amortization expense of $7,456.
Our operating cash flow for the quarter ended January 31, 2020 increased to $1,520,329, compared to $1,068,333 for the quarter ended October 31, 2019.
Lease Portfolio
At January 31, 2020, Solution had 319 vehicles in our In-House lease portfolio, a net increase of 10 vehicles and $2.06 million during the quarter to bring the total lease portfolio to $24 million.
At January 31, 2020, the average remaining lease term for the portfolio remained at 1.90 years, weighted by net book value for each vehicle. At January 31, 2020, Solutions' 319 leases were generating annualized rental revenue of approximately $5.34 million, a 10.67% increase during the quarter.
About Solution
Solution Financial commenced operations in 2004 and specializes in sourcing and leasing luxury and exotic vehicles, yachts and other high value assets. Solution works with a select group of automotive and marine dealerships providing lending solutions to clients who cannot obtain leasing terms with traditional Canadian financial institutions or other lenders. Typical customers include new immigrants, business owners and international students. Solution Financial provides a unique leasing experience whereby it partners with its clients to help them navigate the challenges of acquiring, insuring, maintaining and upgrading vehicles and luxury assets in Canada.
Note 1- Non-IFRS Financial Metrics
Solution provides all financial information in accordance with International Financial Reporting Standards ("IFRS"). To supplement our consolidated financial statements presented in accordance with IFRS, we are also providing with this press release, certain non-IFRS financial measures, including Adjusted Net Income. In calculating these non-IFRS financial measures, we have excluded certain transactions that are not necessarily indicative of our ongoing operations or do not impact cash flows.
Cautionary Statement Regarding Forward- Looking Statements
This press release contains "forward-looking information" as defined under applicable Canadian securities laws. This information includes, but is not limited to, statements concerning our objectives, our strategies to achieve those objectives, as well as statements made with respect to management's beliefs, plans, estimates, projections and intentions, and similar statements concerning anticipated future events, results, circumstances, performance or expectations that are not historical facts. Forward-looking information generally can be identified by the use of forward-looking terminology such as "outlook", "objective", "may", "will", "expect", "intend", "estimate", "anticipate", "believe", "should", "plans" or "continue", or similar expressions suggesting future outcomes or events. Such forward-looking information reflects management's current beliefs and is based on information currently available to management. Although forward-looking information contained in this press release is based upon what management believes are reasonable assumptions, there can be no assurance that actual results will be consistent with this forward-looking information. Certain statements included in this press release may be considered a "financial outlook" for purposes of applicable Canadian securities laws, and as such the financial outlook may not be appropriate for purposes other than this press release.
The forward-looking information contained in this press release is made as of the date of this press release and should not be relied upon as representing Solution's views as of any date subsequent to the date of this press release. Except as required by applicable law, management and Solution's Board of Directors undertake no obligation to publicly update or revise any forward-looking information, whether as a result of new information, future events or otherwise.
For further information please contact Sean Hodgins at (778) 318-1514.
ON BEHALF OF THE BOARD
(signed) "Bryan Pang"
Brian Pang
President, CEO and Director
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