Axis Auto Finance Inc. (“Axis” or the “Company”) (TSX: AXIS), a financial technology company changing the way Canadians purchase and finance used vehicles, today announced financial results for the second quarter of fiscal 2024 ending December 31, 2023.
Q2 2024 Financial Highlights
- Total originations of $36.4 million, consisting of $8.2 million in automotive originations and $28.2 million in equipment originations;
- Revenues of $11.1 million in the quarter, a 4.1% increase year-over-year;
- Adjusted loss(1)of ($0.5) million as compared to Adjusted earnings of $0.3 million in prior year; and
- Net loss of ($1.0) million, as compared to a net loss of ($0.5) million in the second quarter of fiscal 2023.
For the quarter ending December 31, 2023, auto loan originations were $8.2 million, down from $35.7 million in auto loan originations in the second quarter of 2023, as credit and underwriting parameters were tightened. The $8.2 million in second quarter automotive loan originations were entirely owned and on balance sheet, as Axis did not originate any near prime volumes managed for Westlake Financial Services (“Westlake”).
Equipment finance origination volumes in the quarter were $28.2 million, a 3.4% increase from $27.3 million in the comparable quarter of 2023. Second quarter originations consisted of $13.4 million owned and on balance sheet, with $14.8 million being brokered for third parties or originated for syndication partners.
Revenues for the quarter were $11.1 million, an increase of 4.1% from the second quarter of prior year. Automotive annualized realized credit loss rate(2) for the quarter was 13.24%, an increase from 8.03% during the same quarter of the prior year.
Adjusted loss(1) for the quarter was ($0.5) million, or ($0.004) per share, as compared to Adjusted earnings of $0.3 million or $0.003 per share for the second quarter of 2023. The Company recorded a Net loss for the quarter of ($1.0) million or ($0.008) per share, as compared to net loss of ($0.5) million or ($0.004) per share in the second quarter of 2023.
Axis Reconciliation(3) of Net Income (Loss) to Adjusted Earnings (Loss) – Second Quarter
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Q2 2024
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Q2 2023
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|
Net Income (Loss), as reported in financial statements
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(970,178)
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|
(467,949)
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|
Adjustments:
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|
|
|
|
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Non-cash interest
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262,031
|
|
332,860
|
|
Depreciation
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162,230
|
|
200,479
|
|
Amortization
|
|
148,300
|
|
178,666
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|
Acquisitions and integration
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|
18,289
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|
-
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|
Stock-based compensation
|
|
(10,541)
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|
184,883
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|
IFRS-16 lease expense
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(72,947)
|
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(88,946)
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Adjusted Earnings (Loss)
|
|
(462,816)
|
|
339,993
|
Axis Reconciliation(3) of Net Income (Loss) to Adjusted Earnings (Loss) – Year to Date
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YTD
31-Dec-2023
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YTD
31-Dec-2022
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Net Income (Loss), as reported in financial statements
|
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(3,297,179)
|
|
(1,376,296)
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|
Adjustments:
|
|
|
|
|
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Non-cash interest
|
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501,086
|
|
589,349
|
|
Depreciation
|
|
342,878
|
|
400,334
|
|
Amortization
|
|
298,089
|
|
356,326
|
|
Acquisitions and integration
|
|
280,673
|
|
22,874
|
|
Stock-based compensation
|
|
58,186
|
|
275,767
|
|
IFRS-16 lease expense
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|
(148,997)
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|
(178,034)
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Adjusted Earnings (Loss)
|
|
(1,965,264)
|
|
90,320
|
About Axis Auto Finance
Axis is a fintech lender providing alternative used vehicle financing options to non-prime borrowers. Axis loans are offered through over 3,000 automotive dealers nationwide. Approximately 30% of Canadians (Source: Equifax) that have credit scores in the non-prime range. All Axis auto loans report to the credit bureau, resulting in over 70% of customers seeing a significant improvement of their credit scores. Further information on the Company can be found at https://www.axisfinancegroup.com/investors-press-releases/.
(1)Adjusted loss is a non-IFRS measure as defined in the Company’s MD&A, which is published on Sedar. Refer to pages 5 and 6 of the MD&A, that is incorporated by reference.
(2)Annualized realized credit loss rate is a non-IFRS measure as defined in the Company’s MD&A which is published on Sedar. Refer to pages 5 and 6 of the MD&A, that is incorporated by reference.
(3)The reconciliation from Net Income (Loss) to Adjusted Earnings (Loss) for the current quarter and for the full fiscal year is shown on page 15 of the Company’s MD&A, which includes the basis for adjustments.
Non-IFRS Measures
The Company’s audited consolidated financial statements have been prepared in accordance with International Financial Reporting Standards (“IFRS”) as issued by the International Accounting Standards Board (“IASB”) and the accounting policies we adopted in accordance with IFRS. Non-IFRS measures are not standardized financial measures under the financial reporting framework used to prepare the financial statements of the Company to which the non-IFRS measures relate and might not be comparable to similar financial measures disclosed by other issuers.
The Company believes that certain Non-IFRS Measures can be useful to investors because they provide a means by which investors can evaluate the Company’s underlying key drivers and operating performance of the business, exclusive of certain adjustments and activities that investors may consider to be unrelated to the underlying economic performance of the business of a given period. A full description of these measures can be found in the Management Discussion & Analysis that accompanies the financial statements for the corresponding period, which is published on Sedar.
The TSX Exchange has neither approved nor disapproved the contents of this press release. Neither the Exchange nor its Regulation Services Provider (as that term is defined in the policies of the Exchange) accepts responsibility for the adequacy or accuracy of this release.
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