TORONTO, March 10, 2021 /CNW/ - Accord Financial Corp.
(TSX: ACD) today released its financial results for the fourth
quarter and year ended December 31,
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
|
|
Three
Months Ended Dec. 31
|
Year Ended Dec. 31
|
|
2020
|
2019
|
2020
|
2019
|
|
$
|
$
|
$
|
$
|
Average funds
employed (millions)
|
360
|
395
|
347
|
378
|
Revenue
(000's)
|
12,903
|
14,297
|
48,501
|
56,175
|
Net earnings
(loss) attributable to shareholders (000's)
|
1,384
|
(658)
|
417
|
6,444
|
Adjusted net
earnings (loss) (000's) (note)
|
2,095
|
(2,136)
|
2,032
|
4,939
|
Earnings (loss)
per common share (basic and diluted)
|
0.16
|
(0.08)
|
0.05
|
0.76
|
Adjusted earnings
(loss) per common share
(basic and diluted)
|
0.24
|
(0.25)
|
0.24
|
0.58
|
Book value per
share (December 31)
|
|
|
$
10.50
|
$
10.77
|
"After several years of strategic change and top line growth,
Accord's profit was sideswiped by the economic downturn caused by
the Covid-19 pandemic. Our financial strength allowed us to battle
the enormous headwinds shoulder to shoulder with our clients –
supporting many with innovative solutions and much-needed capital."
said President and CEO Simon
Hitzig.
The Covid-19 induced economic turmoil slowed new business
originations, which, combined with lower borrowings from many of
the Company's existing clients, caused average funds employed to
decline to $347 million in 2020 from
$378 million last year. Average
yields also declined, reflecting lower interest rates generally in
The United States and Canada. These factors combined to drive
revenue down to $48,501,000 in 2020
from $56,175,000 in 2019.
As growth picked up in the fourth quarter, net earnings
attributable to shareholders ("shareholders' net earnings") turned
positive for the year, finishing 2020 at $417,000 compared with $6,444,000 in 2019. Lower revenue and an
increased provision for losses were the main drivers of the decline
in net earnings. Earnings Per Common Share ("EPS") were
$0.05 compared to $0.76 last year. Adjusted net earnings were
$2,032,000 in 2020 compared to
$4,939,000 in 2019. Adjusted EPS
declined to $0.24 compared to
$0.58 in the previous year. Book
value per share was $10.50 at
year-end.
After reaching a low point for the year in early summer, funds
employed grew over the second half. Average funds employed grew
from $327 million in the third
quarter to $360 million in the fourth
quarter, with revenue keeping pace with portfolio growth. Compared
to the fourth quarter of 2019, however, revenue declined by 10% to
$12,903,000 from $14,297,000.
Fourth quarter performance made progress towards recapturing the
Company's pre-Covid earnings momentum. Shareholders' net earnings
were $1,384,000 compared to a net
loss of $658,000 in the fourth
quarter last year. Net earnings improved mainly due to a reduced
provision for losses. EPS was 16
cents compared to a Loss Per Common Share ("LPS") of
8 cents last year. Adjusted net
earnings were $2,095,000 in the
fourth quarter compared to an adjusted net loss of $2,136,000 in the same period last year. Adjusted
EPS was 24 cents compared to an
adjusted LPS of 25 cents in last
year's fourth quarter.
Commenting further on 2020's results, Mr. Hitzig stated: "The
long round trip, from peak to trough, and back to our previous
growth path, left us with little to show for our efforts. Given the
extreme economic disruption, we take some solace in the fact that
the Company finished the year with a small profit, extending our
streak of annual profits to thirty-nine years. I'm proud of the
support we provided to our clients, and confident we are positioned
to deliver stronger results for our shareholders in 2021."
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. For 43 years, Accord
has helped businesses manage their cash flows and maximize
financial opportunities.
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:
|
Three
Months Ended Dec. 31
|
Year Ended Dec. 31
|
|
2020
|
2019
|
2020
|
2019
|
|
$'000
|
$'000
|
$'000
|
$'000
|
Shareholders' net
earnings:
|
1,384
|
(658)
|
417
|
6,444
|
Adjustments, net of
tax:
|
|
|
|
|
Restructuring
expenses
|
657
|
-
|
1,395
|
-
|
Business acquisition
expenses
|
54
|
(1,222)
|
220
|
(1,381)
|
Stock-based
compensation
|
-
|
(256)
|
-
|
(124)
|
Adjusted net
earnings
|
2,095
|
(2,136)
|
2,032
|
4,939
|
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.