TORONTO, Oct. 28, 2020 /CNW/ - Accord Financial Corp.
(TSX: ACD) today released its financial results for the three and
nine months ended September 30,
2020. 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
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|
|
|
|
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Three Months Ended
Sept. 30
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Nine Months Ended
Sept. 30
|
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2020
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2019
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2020
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2019
|
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$
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$
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$
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$
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Average funds
employed (millions)
|
327
|
383
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343
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373
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Revenue
(000's)
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12,312
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15,299
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35,598
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41,878
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Earnings (loss)
before income tax (000's)
|
(120)
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4,063
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(5,209)
|
8,911
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Net earnings
(loss) attributable to shareholders (000's)
|
566
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3,237
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(968)
|
7,102
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Adjusted net
earnings (loss) (000's) (note)
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621
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2,862
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(63)
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7,075
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Earnings (loss)
per common share (basic and diluted)
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0.07
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0.38
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(0.11)
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0.84
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Adjusted earnings
(loss) per common share (basic and diluted)
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0.07
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0.34
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(0.01)
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0.84
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Book value per
share (September 30)
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|
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$10.56
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$11.07
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The economic downturn driven by Covid-19 put a damper on new
business originations, which, combined with lower borrowings from
many of the Company's existing clients, caused average funds
employed to decline to $327 million
in the current quarter compared to $383
million last year. At the same time, average yields have
also declined, reflecting lower interest rates in the United States and Canada. The smaller portfolio and lower yields
resulted in third quarter revenue of $12,312,000 compared to $15,299,000 last year. The challenging
environment, for specific clients and the economy overall, also
caused the Company to record a higher provision for losses. These
factors led to third quarter net earnings attributable to
shareholders ("shareholders' net earnings") of $566,000 compared to $3,237,000 earned last year. Earnings per common
share ("EPS") were 7 cents compared
to 38 cents last year. Adjusted net
earnings decreased to $621,000 from
the $2,862,000 earned in the third
quarter of 2019. Adjusted EPS was 7
cents in the current quarter compared to 34 cents last year.
While the third quarter delivered modest earnings, the results
for the first nine months of 2020 are still in negative territory.
Revenue for the nine months ended September
30, 2020 declined to $35,598,000 compared to $41,878,000 last year. Shareholders' net loss in
the first nine months was $968,000
compared to net earnings of $7,102,000 in 2019. Shareholders' net earnings
declined mainly for the reasons noted above. Loss per share ("LPS")
was 11 cents compared to EPS of
84 cents last year. Adjusted net loss
was $63,000 compared to adjusted net
earnings of $7,075,000 earned in the
first nine months of 2019. Adjusted LPS was 1 cent in the first nine months of 2020 compared
to EPS of 84 cents last year.
Funds employed grew during the third quarter, up from
$317 million at June 30 to close at $348
million on September 30.
Commenting on the results, the Company's President and CEO, Mr.
Simon Hitzig, stated: "As expected,
our cautious approach over the last six months has led to a modest
decline in funds employed and revenue. And while we're pleased with
the performance of our lease and loan portfolios, until we have
more clarity around the economic recovery, we continue to carry a
substantial allowance for losses on the balance sheet."
Mr. Hitzig added "I'm pleased to report that we're seeing "green
shoots" of renewed growth taking root all around Accord. Every
office is now driving increased new business activity, and the
portfolios are beginning to grow again. Accord's total funds
employed notched a 10% increase during the quarter, reaching
$348 million by the end of the third
quarter. As portfolio growth has resumed, the trend in earnings has
also taken a positive turn. We're now clearly on the road back to
portfolio growth and earnings recovery."
The Company's Board of Directors today declared a regular
quarterly dividend of 5 cents per
common share, payable December 1,
2020 to shareholders of record November 13, 2020.
About Accord Financial Corp.
Accord Financial is
North America's most dynamic
commercial finance company providing fast, versatile financing
solutions for companies in transition including factoring,
inventory finance, equipment leasing, trade finance and film/media
finance. By leveraging our unique combination of financial
strength, deep experience and independent thinking, we craft
winning financial solutions for small and medium-sized businesses,
simply delivered, so our clients can thrive.
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 (basic
and diluted) is adjusted net earnings divided by the weighted
average number of common shares outstanding (basic and diluted) 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:
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Three Months Ended
Sept. 30
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Nine Months Ended
Sept. 30
|
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2020
|
2019
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2020
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2019
|
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$'000
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$'000
|
$'000
|
$'000
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Shareholders' net
earnings (loss):
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566
|
3,237
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(968)
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7,102
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Adjustments, net of
tax:
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|
|
|
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Restructuring
expenses
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-
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-
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739
|
-
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Business acquisition
expenses
|
55
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(423)
|
166
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(159)
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Stock-based
compensation
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-
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48
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-
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132
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Adjusted net earnings
(loss)
|
621
|
2,862
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(63)
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7,075
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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.