TORONTO,
May 7, 2014 /CNW/ - Accord Financial
Corp. (TSX - ACD) today released its financial results for the
quarter ended March 31, 2014. The
financial figures presented in this release are reported in
Canadian dollars and have been prepared in accordance with
International Financial Reporting Standards.
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SUMMARY OF FINANCIAL RESULTS |
Three Months
Ended March 31 |
|
|
2014 |
|
2013 |
Factoring volume (millions) |
$ |
516 |
$ |
448 |
Revenue |
$ |
6,616,225 |
$ |
5,947,217 |
Net earnings |
$ |
796,965 |
$ |
1,246,028 |
Adjusted net earnings (note) |
$ |
1,234,659 |
$ |
1,265,939 |
Earnings per common share (basic and
diluted) |
$ |
0.10 |
$ |
0.15 |
Adjusted earnings per common share (basic and
diluted) |
$ |
0.15 |
$ |
0.15 |
Basic and diluted weighted
average
number of shares outstanding |
|
8,279,902 |
|
8,221,498 |
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Net earnings declined by $449,063 or 36% to $796,965 in the first quarter of 2014 compared to
the $1,246,028 earned in the first
quarter of 2013. Net earnings declined as a result of an increase
in general and administrative expenses ("G&A"), a higher
provision for credit and loan losses, increased interest expense,
and business acquisition costs related to the acquisition of Varion
Capital Corp. ("Varion") on January 31,
2014. Earnings per common share ("EPS") decreased to
10 cents compared to 15 cents last year.
Adjusted net earnings totaled $1,234,659 in the first quarter of 2014, 2% below
the $1,265,939 earned in the first
quarter of 2013. Adjusted EPS were 15
cents, the same as in last year's first quarter.
Factoring volume increased by 15% or
$68 million to a first quarter record
$516 million in the current quarter
compared to $448 million last year.
Funds employed increased 26% to a record high $137 million at March 31,
2014 compared to $109 million
one year ago. Revenue rose by 11% to $6,616,225 in the current quarter compared to
$5,947,217 last year. Revenue
increased on higher funds employed and factoring volume.
Commenting on the first quarter's results, Mr.
Tom Henderson, the Company's
President and CEO, noted: "The highlight of the first quarter was
the acquisition of Varion, a Vancouver-based leasing company founded in
2004. This strategic acquisition strengthens our ability to serve
the Canadian marketplace by providing more financing options to
companies in need of capital. Varion fits seamlessly into the
Accord family, with its similar risk/reward profile and our mutual
dedication to quality loan portfolios. The record level of funds
employed at March 31, record first
quarter factoring volume and increase in revenue clearly show a
satisfying pick up in business activity versus the year ago period.
We also had record high equity at March 31,
2014. In spite of the improved top line performance, we
recorded lower earnings. A number of non-operating expense
categories led to a decrease in net earnings; stock-based
compensation expense rose substantially, while business acquisition
costs related to the Varion acquisition were incurred. Further,
there was an increase in the provision for losses that mainly
resulted from an increase in our reserves expense, as higher
allowances for losses were set up to cover a $28 million rise in funds employed in the
quarter."
As noted in the Company's press release of
April 23, 2014, a regular quarterly
dividend of $0.08 per share has been
declared payable June 2, 2014 to
shareholders of record at the close of business May 15, 2014.
About Accord Financial Corp.
Accord Financial Corp. is a leading North
American provider of asset-based financial services, including
factoring, lease financing, trade finance, credit guarantees and
collection services. For over 35 years, Accord has helped
businesses across Canada and the
U.S. manage their cash flows and maximize financial opportunities -
keeping business liquid.
Note: Non-IFRS measures
The Company's financial statements have been prepared in
accordance with IFRS. The Company uses a number of other financial
measures to monitor its performance and believes these measures may
be useful to investors in evaluating the Company's operating
performance and financial position. These measures may not have
standardized meanings or computations as prescribed by IFRS that
would ensure consistency between companies using these measures and
are, therefore, considered to be non-IFRS measures.
Adjusted net earnings and adjusted earnings per common share
("EPS") are non-IFRS measures used in this press release. The
Company derives these measures from amounts presented in its IFRS
prepared financial statements. Adjusted net earnings comprise net
earnings before non-operating stock-based compensation and business
acquisition expenses (namely, transaction and integration costs and
amortization of intangibles). Adjusted EPS is adjusted net
earnings divided by the weighted average number of common shares
outstanding in the quarter. Management believes adjusted net
earnings is a more appropriate measure of operating performance as
it excludes items which do not relate to ongoing operating
activities. The following table provides a reconciliation of the
Company's net earnings to adjusted net earnings:
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Three Months Ended March 31 |
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2014 |
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2013 |
Net earnings |
|
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|
$ |
796,965 |
|
|
$ |
1,246,028 |
Adjustments, net of tax: |
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|
|
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|
|
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Stock-based compensation |
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289,296 |
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|
19,911 |
|
Business acquisition expenses |
|
|
|
|
|
|
148,398 |
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|
- |
Adjusted net earnings |
|
|
|
|
|
$ |
1,234,659 |
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$ |
1,265,939
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SOURCE Accord Financial Corp.