Vancouver, British Columbia--(Newsfile Corp. - June 29, 2021) - Solution Financial Inc. (TSXV: SFI) (the "Company"), a leading provider of luxury automotive and yacht leasing in Canada, today announced its financial results for the second quarter ending April 30, 2021.
Earnings Highlights for the Quarter:
- Net income increased to $199,695 and Adjusted net income(1) increased to $239,094.
- Net revenue increased 103% over the prior year quarter to $5,581,297.
- Total lease and finance portfolio decreased 4% to $23,442,990 over the prior quarter.
- Quarterly dividend on common shares of $0.001 per share or roughly 0.9% returns at the Company's current share trading price of $0.45 per share.
"Our Q2 earnings remained consistent with expectations and we're proud to celebrate our tenth profitable quarter," began Bryan Pang, Solution's CEO. "Remaining profitable through COVID was an important validation of our business model and we are excited about the improving return to work and post-secondary schools opening for in person classes next fall. The automotive business remains much slower than pre-COVID for new automobile releases due to the limited availability of certain automotive components (microprocessors), but we have seen record second-hand vehicle sales as a result, that has been very good for our business. Our top line sales increased significantly by selling certain vehicles at a premium due to the vehicle shortage, although this has resulted in a decrease in our total in house portfolio. The recent expansion into Ontario and when new vehicle sales catches up to demand, we are well positioned to target our next major milestone of growing our lease portfolio up over $30M," concluded Bryan.
Financial Results
Solution is reporting net income of $199,695, or $0.002, per share for the quarter ending April 30, 2021. This compares to a net income of $39,595 or $0.001 per share for the quarter ending April 30, 2020.
Adjusted net income for the quarter ending April 30, 2021 was $239,094(1) or $0.003 per share compared to $220,997 or $0.003 per share for the quarter ending April 30, 2020. Adjusted Net Income excludes the non-cash accretion expense related to the convertible debentures and right of use assets of $13,160, share-based compensation expense of $827 and amortization expense of $11,164.
Solution's operating cash flow for the six months ended April 30, 2021 decreased moderately to $2,589,176, compared to $2,832,011 for the quarter ended April 30, 2020.
Lease Portfolio
At April 30, 2021, Solution had 293 vehicles in the In House lease portfolio, a net decease of 8 vehicles and $1.1 million during the quarter to bring the total lease portfolio to $23.4 million.
At April 30, 2021, the average remaining lease term for the portfolio was 1.6 years, weighted by net book value for each vehicle. At April 30, 2021, Solutions' 293 leases were generating annualized rental revenue of approximately $5.9 million, a 3.01% decrease 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. 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"
Brian 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.
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