TORONTO, March 1, 2018 /CNW/ - Accord Financial Corp.
(TSX – ACD) today released its financial results for the fourth
quarter and year ended December 31,
2017. 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 Dec.
31
|
Year Ended Dec. 31
|
|
2017
|
2016
|
2017
|
2016
|
|
$
|
$
|
$
|
$
|
Average funds employed
(millions)
|
226
|
157
|
181
|
150
|
Revenue (000's)
|
9,935
|
7,722
|
31,409
|
28,523
|
Net earnings attributable to shareholders
(000's)
|
2,433
|
2,210
|
6,010
|
6,566
|
Adjusted net earnings (000's)
(note)
|
2,903
|
2,362
|
7,005
|
7,675
|
Earnings per common share (basic and
diluted)
|
0.29
|
0.27
|
0.72
|
0.79
|
Adjusted earnings
per common share (basic and diluted)
|
0.35
|
0.28
|
0.84
|
0.92
|
Book value per share (December
31)
|
|
|
$
9.20
|
$
9.11
|
The Company reported record year-over-year growth in funds
employed and year-end funds employed were a record high. The fourth
quarter also saw record revenue. "It is terrific to hit new
milestones as we complete our fortieth year," said CEO Tom Henderson.
Revenue rose by 10% to $31,409,000
this year compared to $28,523,000
last year as a result of higher funds employed. Revenue totaling
$1,860,000 is included for BondIt
Media Capital ("BondIt") and Accord CapX ("CapX") from their
acquisition dates.
Net earnings attributable to shareholders ("shareholders' net
earnings") in 2017 declined to $6,010,000 compared with $6,566,000 in 2016 mainly as a result of higher
provision for losses, interest expense and business acquisition
expenses. The provision for losses of $2,898,000 (2016: $963,000) was adversely impacted by a charge-off
for one impaired loan totaling $2,021,000. In addition, as the Company increased
its allowance for losses to support the rise in its funds employed,
the non-cash reserves expense rose by $708,000 to $550,000 (2016: recovery $158,000). Earnings per common share ("EPS")
declined to $0.72 compared to
$0.79 last year. Adjusted net
earnings decreased to $7,005,000 in
2017 compared to $7,675,000 in 2016.
Adjusted EPS declined to $0.84
compared to $0.92 the previous year.
Book value per share was a record $9.20 at year-end.
Revenue rose 29% to a record $9,935,000 in the fourth quarter of 2017 compared
to $7,722,000 last year, including
revenue from BondIt and CapX totaling $1,253,000.
Shareholders' net earnings for the fourth quarter of 2017
increased by 10% to $2,433,000
compared to $2,210,000 in 2016. Net
earnings rose mainly as a result of a higher revenue. EPS
increased to 29 cents compared to
27 cents last year. Adjusted net
earnings were $2,903,000 compared to
the $2,362,000 earned in the fourth
quarter of 2016. Adjusted EPS rose 25% to 35
cents compared to the 28 cents
earned in last year's fourth quarter.
Commenting on 2017's results, the Company's President and CEO,
Mr. Tom Henderson, stated: "Our
funds employed rose to $220 million
at December 31, 2017, up 58% from a
year ago. I'm pleased to say this increase occurred across all
lending units, including contributions from BondIt and CapX,
Accord's great new companies. Although our financial results in
2017 were impacted by one significant charge-off, they were
otherwise very satisfying and are starting to respond to this
growth. Revenue was a quarterly record $9.9
million in the fourth quarter, while adjusted net earnings
rose 25% to 35 cents." Commenting
further, Mr. Henderson added, "During the second half of 2017, I am
very pleased to say we completed the previously announced
acquisitions of U.S. based BondIt and CapX. I am excited and
flattered that these companies chose to join the Accord family. Run
by talented and entrepreneurial executives, these companies will be
transformational to Accord and in due course we will see their
impact on the Company's financial results."
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, to film and media finance. For
40 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
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
shareholders' net earnings before stock-based compensation,
business acquisition expenses (transaction and integration costs
and amortization of intangible assets) 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 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 Dec. 31
|
Year
Ended Dec. 31
|
|
2017
|
2016
|
2017
|
2016
|
|
$'000
|
$'000
|
$'000
|
$'000
|
Shareholders' net
earnings:
|
2,433
|
2,210
|
6,010
|
6,566
|
Adjustments, net of
tax:
|
|
|
|
|
|
Stock-based
compensation
|
45
|
43
|
188
|
189
|
|
Business acquisition
expenses
|
413
|
94
|
685
|
375
|
|
Restructuring
expenses
|
12
|
15
|
122
|
545
|
Adjusted net
earnings
|
2,903
|
2,362
|
7,005
|
7,675
|
2) Book value per share – book value is shareholders' equity and
is the same as the net asset value (calculated as total assets
minus total liabilities) of the Company less non-controlling
interests. Book value per share is the book 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.