~TIMIA's acquisition and related market expansion helps drive record revenue and net income~
VANCOUVER, BC, April 20, 2022 /CNW/ - TIMIA Capital Corporation ("TIMIA" or the "Company") (TSXV: TCA) (OTC: TIMCF) today announced financial results for the fourth quarter and year ended December 31, 2021. In September 2021 the Company acquired Pivot Financial ("Pivot"), a Canadian-based private lender focused on creative financing solutions for the small and medium business market.
Fourth Quarter 2021
For the four months ended December 31, 2021, compared to the three months ended November 30, 2020, the Company had the following highlights:
- Record revenue of $5.1 million, an increase of 190% or $3.3 million compared to the three months ended November 30, 2020,
- Interest income from investments of $4.0 million, an increase of 300% or $3.0 million, compared to the three months ended November 30, 2020. This increase reflects the acquisition of Pivot,
- Record net income of $1.4 million, an increase of 119%, or $0.8 million, compared to the prior year period. Net income, excluding one-time acquisition costs, was $1.6 million,
- Income from transaction and other fees increased from $0.1 million to $0.5 million, reflecting the acquisition of Pivot.
Fiscal Year 2021
For the thirteen months ended December 31, 2021, compared to the twelve months ended November 30, 2020, the Company had the following highlights:
- Record revenue of $9.7 million, an increase of 60% or $3.6 million, compared to the twelve months ended November 30, 2020,
- Interest income from investments increased 87%, or $3.6 million, to $7.6 million for the thirteen-month period. This increase is primarily driven by the acquisition of Pivot,
- Income from transaction and other fees increased 214%, or $0.6 million, to $0.9 million for the thirteen-month period ending due to the acquisition of Pivot,
- Income from settlements of loans was $1.0 million, compared to $1.7 million reflecting less portfolio exits in the current period compared to prior year,
- Net income increased 28%, or $0.5 million, to $2.4 million compared to $1.9 million in the prior year. Net income, excluding one-time acquisition costs of $272,136, was $2.7 million,
- Total loans receivable increased $78.9 million to $106.1 million from $27.2 million at November 30, 2020 due to growth and the loan portfolio acquired in the Pivot acquisition,
- Total assets increased by 198% to $124.9 million at December 31, 2021 compared to $41.9 million at November 30, 2020. This increase was largely driven by the acquisition of Pivot which contributed total loans receivable of $66.0 million on the date of acquisition.
"2021 was a transformative year for TIMIA with the acquisition of Pivot Financial and the continued robust growth in our technology lending business," said Mike Walkinshaw, CEO of TIMIA. "We delivered record revenue and record net income and more than doubled our assets under management during the year. The Company also delivered positive net income attributable to common shareholders in the fourth quarter for the first time. Although we are entering an increasing interest rate environment the outlook for our markets continues to be very positive and we expect the growth trends to continue. Moving forward we are focused on identifying additional opportunities to leverage our scalable fintech loan origination platform."
Detailed Financial Review
The Company utilizes a proprietary loan origination platform to originate, underwrite and service private-market, high-yield loan opportunities through two operating divisions: TIMIA Capital technology lending which offers revenue-based investment to fast growing, business-to-business Software-as-a-Service (or SaaS) businesses in North America, and Pivot Financial which specializes in asset-based private credit targeting mid-market borrowers in Canada.
TIMIA Capital technology loan portfolio includes 29 unique deals with an aggregate facility size of $72.4 million. Current disbursements extended under those facilities total $37.8 million. Pivot's term loan portfolio has 13 unique deals with an aggregate loans receivable of $60.8 million. The most significant investment is a loan due from a related party in the amount of $43.3 million. Pivot's factored finance facilities portfolio includes 18 finance facilities with total disbursements of $4.1 million.
During fiscal 2021, the Company has noted an increase in both equity financings and merger and acquisitions activity. This has impacted both the existing portfolio in terms of loan buyouts and financings, as well as loan originations via increased competition in the marketplace.
Total consolidated revenue for the thirteen months ended December 31, 2021, increased $3.6 million or 60% from $6.1 million to $9.7 million.
Interest income for the 13 months ended December 31, 2021, was a record $7.6 million compared to $4.1 million in the prior 12 months ended November 30, 2020; income from transaction and other fees was $0.9 million in the year ended December 31, 2021 compared to $0.3 million in the prior fiscal year, resulting in a record total revenue of $9.7 million. Income from the settlement of loans and performance fee income was $1.2 million down from $1.7 million in the prior year.
During the fiscal year ended December 31, 2021, TIMIA benefited from increased payments (combined principal and interest) as a result of the strong revenue growth of its underlying portfolio. At the same time, the Company increased its investments in infrastructure, including key staff and brand awareness, along with the acquisition of Pivot in the fourth quarter.
Total expenses for the 13 months ended December 31, 2021, were $6.7 million compared with $4.1 million for the prior year. The majority of the increase in expenses reflect TIMIA's acquisition of Pivot as well as investment in infrastructure.
During the thirteen months ended December 31, 2021, the Company posted comprehensive income of $2.0 million compared with comprehensive income of $1.4 million for the last fiscal year. The year over year change is due to the increase in foreign currency translation adjustment.
As posted in the Company's MD&A, please see the table below reflecting the progression of the attribution of income (loss) between the shareholders of the Company and non-controlling interests over the last eight quarters.
As at December 31, 2021, the Company's cash balance was $9.3 million and working capital was $1.9 million compared to $12.9 million and $11.1 million respectively as at November 30, 2020.
In preparing the Company's consolidated financial statements for the 13 months ended December 31, 2021, the Company identified that its non-controlling interests in LP I and LP II do not meet the requirements under IFRS to be classified within equity because of the limited lives of the partnerships. As a result, the Company has improved presentation by reclassifying non-controlling interests to liabilities from equity. This reclassification does not affect net income (loss) or earnings per share.
NCIB
The Company also reports, pursuant to the Normal Course Issuer Bid announced February 24, 2021, for the purchase of up to 3.3 million common shares, it has cancelled an aggregate 1,309,000 commons shares (1,273,500 common shares in fiscal 2021) purchased through the facilities of the TSX Venture Exchange and alternative trading systems at a weighted average price of $0.29 for a total consideration of $357,921.
This news release is qualified in its entirety by the Company's audited financial statements for the four and thirteen months ended December 31, 2021, and for the three and twelve months ended November 30, 2020, and the associated Management's Discussion & Analysis respecting the same periods, which can be downloaded from the Company's profile on SEDAR at http://www.sedar.com.
About TIMIA Capital Corporation
The Company utilizes a proprietary loan origination platform to originate, underwrite and service private-market, high-yield loan opportunities through two operating divisions: TIMIA Capital which offers revenue-based investment to fast growing, business-to-business Software-as-a-Service (or SaaS) businesses in North America, and Pivot Financial which specializes in asset-based private credit targeting mid-market borrowers in Canada. The Corporation deploys funds on behalf of limited partnerships, institutions, retail investors, high net worth individuals, its management team and shareholders.
For more information about TIMIA and SaaS lending, please visit www.timiacapital.com.
For more information about specialized private credit and Pivot please visit: www.pivotfinancial.com.
Neither the 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 news release.
Forward-Looking Information
Certain information and statements in this news release contain and constitute forward-looking information or forward-looking statements as defined under applicable securities laws (collectively, "forward-looking statements"). Forward-looking statements normally contain words like 'believe', 'expect', 'anticipate', 'plan', 'intend', 'continue', 'estimate', 'may', 'will', 'should', 'ongoing' and similar expressions, and within this news release include any statements (express or implied) respecting the Company's shareholders standing to benefit over the long term, the interest rate environment, expected growth trends, greater anticipated funding opportunities, and expectations as to payment amounts increasing over time as both new and follow-on investments are made and as payments increase from the underlying portfolio.
Forward-looking statements are not guarantees of future performance, actions, or developments and are based on expectations, assumptions and other factors that management currently believes are relevant, reasonable and appropriate in the circumstances, including, without limitation, the following assumptions: that the Company and its investee companies are able to meet their respective future objectives and priorities, assumptions concerning general economic growth and the absence of unforeseen changes in the legislative and regulatory framework for the Company. Although management believes that the forward-looking statements are reasonable, actual results could be substantially different due to the risks and uncertainties associated with and inherent to Timia's business. Material risks and uncertainties applicable to the forward-looking statements set out herein include, but are not limited to, the Company having insufficient financial resources to achieve its objectives; availability of further investments that are appropriate for the Company on terms that it finds acceptable or at all; successful completion of exits from investments on terms that constitute a gain when no such exits are currently anticipated; intense competition in all aspects of business; reliance on limited management resources; general economic risks; new laws and regulations and risk of litigation. Although Timia has attempted to identify factors that may cause actual actions, events or results to differ materially from those disclosed in the forward-looking statements, there may be other factors that cause actions, events or results not to be as anticipated, predicted, estimated or intended. Also, many of the factors are beyond the control of Timia. Accordingly, readers should not place undue reliance on forward-looking statements. Timia undertakes no obligation to reissue or update any forward-looking statements as a result of new information or events after the date hereof except as may be required by law. All forward-looking statements contained in this news release are qualified by this cautionary statement.
SOURCE TIMIA Capital Corp.
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