Solution Financial Reports Q3 2021 Financial Results
Vancouver, British Columbia--(Newsfile Corp. - September 14, 2021) - Solution Financial Inc. (TSX: SFI) (the "Company") a leading provider of luxury automotive and yacht leasing in Canada, today announced its financial results for the third quarter ending July 31, 2021.
Earnings Highlights for the Quarter:
- Net income increased to $406,455 and Adjusted net income(1) increased to $531,092.
- Net revenue increased 58% over the prior year quarter to $6,228,929.
- Total lease and finance portfolio decreased 3.5% to $22,647,562 over the prior quarter.
- Quarterly dividend on common shares of $0.001 per share or roughly 1% returns at the Company's current share trading price of $0.45 per share.
"Our Q3 earnings are a strong indication of the pent-up demand for luxury vehicles in the market after such a long hiatus due to COVID. This summer we saw a significant increase in leasing transactions and end of lease vehicle sales remained extremely strong due to the continued shortage of microprocessors impacting the release of new luxury vehicles into the market. After quarter end, our August was the busiest month since before COVID began with over $3.2 million of new leases added to our in-house portfolio," began Bryan Pang, Solution's CEO. We're also very excited to graduate to the TSX Exchange and we look forward to connecting with more investors interested in better understanding our expansion plans and our unique approach to luxury asset ownership which is so very suitable to our current societal and economic times. This timing overlaps well with the roll out of our luxury and ultra-luxury LeaseClub programs in Ontario designed to help Ontario luxury dealerships sell more vehicles and help consumers better manage their cash flows and vehicle use options compared to alternative leasing or ownership options," concluded Bryan.
Solution is reporting net income of $492,455, or $0.005, per share for the quarter ending July 31, 2021. This compares to net income of $235,222 or $0.003 per share for the quarter ending July 31, 2020.
Adjusted net income, which is more reflective of actual cash earnings, for the quarter ending July 31, 2021 was $531,092(1) or $0.006 per share compared to $301,084 or $0.004 per share for the quarter ending July 31, 2020. Adjusted Net Income excludes the non-cash accretion expense related to the convertible debentures and right of use assets of $28,148, share-based compensation expense of $288 and amortization expense of $10,201.
Solution's operating cash flow for the nine months ended July 31, 2021 decreased moderately to $4,214,474, compared to $4,667,047 for the quarter ended July 31, 2020.
At July 31, 2021, Solution had 290 vehicles in the In House lease portfolio, a net decrease of 3 vehicles and $795,428 during the quarter to bring the total lease portfolio to $22.6 million.
At July 31, 2021, the average remaining lease term for the portfolio was 1.7 years, weighted by net book value for each vehicle. At July 31, 2021, Solutions' 290 leases were generating annualized gross rental and lease revenue of approximately $5.9 million, which remained consistent with the prior 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 luxury 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. These measures are not recognized measures under IFRS and do not have a standardized meaning prescribed by IFRS and are therefore unlikely to be comparable to similar measures presented by other issuers. These measures should not be considered in isolation nor as a substitute for analysis of our financial information reported under IFRS.
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 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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