Solution Financial Reports Year End 2019 Results
Vancouver, British Columbia--(Newsfile Corp. - February 25, 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 fourth quarter and year ending October 31, 2019.
Earnings Highlights for the Year End
- Net income increased to $181,948 and Adjusted net income(1) increased to $630,355.
- Net revenue increased 40% over the prior year to $8,861,678.
- Total lease and finance portfolio grew 74% to $22,031,383.
- Initiated 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 finished the year well ahead of our 2019 goal of building our in-house portfolio to over $20 million said Bryan Pang, Solution's CEO. "In addition, our adjusted net income increased to $630,355, an increase of over 80% compared to the prior year. We continue to focus on steady growth and increased profitability in 2020. In December we opened our Calgary, Alberta office and increased our leasing credit line to $10 million which will provide additional financing room to grow our lease portfolio. We also announced our normal course issuer bid program to support our shareholders market trading activities. We remain very bullish on the leasing market segment that we support. We expect to grow our lease portfolio to over $30 million in 2020 and exceed $1 million in Adjusted net income."
"According to the Government of Canada's new "International Education Strategy (2019 - 2024)", international students in Canada contributed an estimated $21.6 billion to Canada's GDP in 2018. As a result, Canada allocated $147.9 million in 2019 over the next five years to continue to support these programs and we are enthusiastic that Canada will remain a popular country for international students looking to gain new skills through study and work abroad opportunities. We are one of very few leasing companies who specialize in supporting this market," concluded Bryan Pang.
Solution is reporting a net income of $181,948, or $0.002, per share for they year ending October 31, 2019. This compares to a net loss of $1,917,707 or $0.031 per share for the year ending October 31, 2018.
Adjusted net income for the year ending October 31, 2019 was $630,355(1) or $0.008 per share compared to $345,528 or $0.006 per share for 2018. Adjusted Net Income excludes the non-cash accretion expense related to convertible debentures of $169,483, share-based compensation expense of $98,805 for stock compensation, income tax provision of $148,000 and amortization expense of $32,119.
Our operating cash flow for the year ended October 31, 2019 increased to $5,334,398 compared to $3,747,189 for the year ended October 31, 2018.
At October 31, 2019, Solution had 286 vehicles on operating leases, a net increase of 20 vehicles and $2.72 million during the quarter to bring the total operating lease portfolio to $21.3 million.
To view an enhanced version of Figure 1, please visit:
At October 31, 2019, the average remaining lease term for the portfolio remained at 2.08 years, weighted by net book value for each vehicle. At October 31, 2019, Solutions' 286 leases were generating annualized rental revenue of approximately $4.83 million, a 12.26% increase during the quarter.
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.
No securities of the Company (including, for greater certainty, the Shares issued to the former Solution shareholder, on conversion of the Subscription Receipts or pursuant to the Non-Brokered Placement) have been or will be registered under the United States Securities Act of 1933, as amended (the "U.S. Securities Act"), or the securities laws of any state, district or commonwealth of the United States (as defined in Regulation S under the U.S. Securities Act). Accordingly, these securities may not be offered or sold, directly or indirectly, within the United States or to or for the account or benefit of any "U.S. Person" (as defined in Regulation S under the U.S. Securities Act), absent an exemption from the registration requirements of the U.S. Securities Act and applicable state securities laws. This news release does not constitute an offer to sell or a solicitation of an offer to buy any of the securities described in this news release in the United States or any jurisdiction where such offer or sale would be unlawful, or for the account or benefit of any U.S. Person or person within the United States.
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"
President, CEO and Director
Neither TSX Venture 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.
This news release does not constitute an offer to sell or a solicitation of an offer to sell any of the securities in the United States. The securities have not been and will not be registered under the United States Securities Act of 1933, as amended (the "U.S. Securities Act") or any state securities laws and may not be offered or sold within the United States or to U.S. Persons unless registered under the U.S. Securities Act and applicable state securities laws or an exemption from such registration is available.
NOT FOR DISTRIBUTION TO U.S. NEWSWIRE SERVICES OR FOR DISSEMINATION IN THE UNITED STATES
To view the source version of this press release, please visit https://www.newsfilecorp.com/release/52784