TORONTO, Nov. 1, 2016 /CNW/ - Accord
Financial Corp. (TSX – ACD) today released its financial results
for the three and nine months ended September 30, 2016. The financial figures
presented in this release are reported in Canadian dollars and have
been prepared in accordance with International Financial Reporting
Standards.
SUMMARY OF
FINANCIAL RESULTS
|
|
|
Three Months
Ended Sept. 30
|
Nine Months Ended
Sept. 30
|
|
2016
|
2015
|
2016
|
2015
|
|
$
|
$
|
$
|
$
|
Average funds
employed (millions)
|
151
|
156
|
148
|
151
|
Revenue
(000's)
|
7,032
|
8,521
|
20,800
|
23,737
|
Net earnings
(000's)
|
1,265
|
2,524
|
4,357
|
5,965
|
Adjusted net
earnings (000's) (see note below)
|
1,923
|
2,551
|
5,313
|
6,300
|
Earnings per
common share (basic and diluted)
|
0.15
|
0.30
|
0.52
|
0.72
|
Adjusted earnings
per common share (basic and diluted)
|
0.23
|
0.31
|
0.64
|
0.76
|
Book value per
share (Sept. 30)
|
|
|
$
8.83
|
$
8.38
|
|
|
|
|
|
Net earnings for the third quarter of 2016 declined to
$1,265,000 compared to $2,524,000 last year. Net earnings decreased
mainly as a result of lower revenue and a $738,000 restructuring expense related to
employee and office space reductions. Earnings per share ("EPS")
declined to 15 cents compared to
30 cents last year. Adjusted net
earnings, comprising net earnings before stock-based compensation,
amortization of intangibles and restructuring expenses, totalled
$1,923,000 in the third quarter of
2016, 25% below the $2,551,000 earned
in the third quarter of 2015. Adjusted EPS decreased to
23 cents compared to 31 cents in last year's third quarter.
Revenue declined to $7,032,000 in
the current quarter compared to $8,521,000 last year. Compared to the third
quarter of 2015, revenue decreased mainly as a result of lower
average funds employed and yields thereon, as well as decreased
receivables management fees.
Net earnings in the first nine months of 2016 decreased to
$4,357,000 compared with $5,965,000 in the first nine months of 2015 as a
result of lower revenue and, to a lesser extent, the above noted
restructuring expense. EPS declined to 52
cents compared to 72 cents
last year. Adjusted net earnings decreased to $5,313,000 in the first nine months of 2016
compared to $6,300,000 last year.
Adjusted EPS declined to 64 cents
compared to 76 cents last year.
Revenue declined to $20,800,000 in
the first nine months of 2016 compared to $23,737,000 last year for the above noted
reasons.
Commenting on the third quarter and first nine months results,
Mr. Tom Henderson, the Company's
President and CEO, stated: "In addition to the decline in revenue
for reasons noted above, results for the third quarter were also
impacted by two events: the cost of right-sizing some of our
Canadian operations; and expenses incurred to launch our new
factoring division in Chicago.
Combined, these costs amounted to approximately $874,000 in the third quarter."
Mr. Henderson further added: "Our Canadian equipment lending
business, headquartered in Vancouver, is experiencing exciting growth as
a result of new product introductions in the last twelve
months. Also, as noted, our U.S. lending business opened a
new division in Chicago in August
to serve smaller U.S. borrowers who need working capital supported
by their accounts receivable. I am pleased to say that
business activity has recently improved and at September 30, 2016 our total funds employed were
a record high $162
million. We are cautiously optimistic for the future."
The Company's Board of Directors today declared a quarterly
dividend of $0.09 per common share,
payable December 1, 2016 to
shareholders of record November 15,
2016.
About Accord Financial Corp.
Accord Financial Corp. is a leading North American finance company
providing distinctive working capital solutions to companies from
coast to coast. Accord's flexible finance programs cover the full
spectrum of asset-based lending, from factoring and inventory
finance, to equipment leasing and trade finance. For 38 years,
Accord has helped businesses 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 that these
measures may be useful to investors in evaluating the Company's
ongoing 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. The non-IFRS measures presented in this press release are
as follows:
1) Adjusted net earnings and adjusted EPS. The Company derives
these measures from amounts presented in its IFRS prepared
financial statements. Adjusted net earnings comprise net earnings
before stock-based compensation, business acquisition expenses
(namely, transaction and integration costs and amortization of
intangibles) and restructuring expenses. Adjusted EPS is adjusted
net earnings divided by the weighted average number of common
shares outstanding in the period. Management believes adjusted net
earnings is a more appropriate measure of ongoing 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:
|
Three Months Ended Sept. 30
|
Nine
Months Ended Sept. 30
|
|
2016
|
2015
|
2016
|
2015
|
(in
thousands)
|
$'000
|
$'000
|
$'000
|
$'000
|
Net earnings
reported
|
1,265
|
2,524
|
4,357
|
5,965
|
Adjustments, net of
tax:
|
|
|
|
|
|
Stock-based
compensation
|
34
|
(79)
|
145
|
18
|
|
Business acquisition
expenses
|
94
|
106
|
281
|
317
|
|
Restructuring
expenses
|
530
|
–
|
530
|
–
|
Adjusted net
earnings
|
1,923
|
2,551
|
5,313
|
6,300
|
2) Book value per share – book value is the net asset value of
the Company calculated as total assets minus total liabilities and,
by definition, is the same as total equity. Book value per share is
the net asset value divided by the number of common shares
outstanding as of a particular date.
3) Funds employed are the Company's finance receivables and
loans, an IFRS measure. Average funds employed are the average
finance receivables and loans calculated over a particular
period.
SOURCE Accord Financial Corp.