TORONTO, May 5, 2021 /CNW/ - Accord Financial Corp.
(TSX: ACD) today released its financial results for the
quarter ended March 31,
2021. 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
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Three Months Ended
March 31
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2021
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2020
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$
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$
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Average funds
employed (millions)
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358
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362
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Revenue
(000's)
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13,480
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12,015
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Net earnings
(loss) attributable to shareholders (000's)
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2,585
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(5,876)
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Adjusted net
earnings (loss) (000's) (note)
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2,683
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(5,414)
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Earnings (loss)
per common share (basic and diluted)
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0.30
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(0.69)
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Adjusted earnings
(loss) per common share (basic and diluted)
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0.31
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(0.63)
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Book value per
share (Mar. 31)
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$
10.70
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$
10.27
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Net earnings attributable to shareholders ("shareholders' net
earnings") in the first quarter of 2021 was a strong $2,585,000 compared to the Covid-19 impacted
shareholders' net loss of $5,876,000
in the same period last year. The increase in shareholders' net
earnings mainly reflects a combination of higher revenue and a
substantially lower provision for credit and loan
losses. While average funds employed remained steady
year-over-year, improving yields helped push revenue up by
$1,465,000, or 12%, to $13,480,000 in 2021 compared to $12,015,000 last year. The current quarter also
saw a recovery of credit and loan losses of $0.9 million as the economy, and the Company's
client base, has shown significant improvement.
The provision for credit and loan losses in the first
quarter of 2020 was $8.8 million;
this incorporated the Company's estimate of potential losses from
the economic fallout of Covid-19.
Earnings per common share ("EPS") were 30
cents compared to a loss per common share ("LPS") of
69 cents in the first quarter of
2020. Adjusted net earnings were $2,683,000 compared to an adjusted net loss of
$5,414,000 in the first quarter of
2020. Adjusted EPS were 31 cents
compared to an adjusted LPS of 63
cents in last year's first quarter. Average funds employed
in the first quarter of 2021 were $358
million slightly below the $362
million last year.
Commenting on the results, Mr. Simon
Hitzig, CEO, noted: "With revenue up 12% over the same
quarter last year, bottom-line financial performance began to
reflect the earnings power we can deliver as the economic cycle
gathers steam. In fact, Accord's thirty
cents of earnings per share reflected the strongest first
quarter in our history. Solid earnings in the quarter were
reflective of a shift in product mix towards higher yielding
segments, including our Canadian small business division and
US-based media finance division – both positioned squarely at the
center of key trends. In Canada,
we're enjoying the successful launch of AccordExpress, our unique
solution designed to bridge small businesses through to the
economic recovery, while, in the U.S., BondIt Media Capital is
perfectly positioned to finance the long-term secular growth of
video on demand."
Continuing, Mr. Hitzig added: "During the quarter, Accord also
reduced our overall allowance for loan losses to a position more
reflective of economic reopening and near-term economic stability.
The allowance now stands at $5.7
million, down from $7.4
million at the end of the first quarter of 2020 (with a
similar size portfolio). These are the kinds of markets in which we
earn our stripes. With the deepest and most experienced management
team we've ever had, and a streamlined platform designed for
growth, Accord is positioned to perform as the economy
rebuilds."
The Company's Board of Directors recently declared a quarterly
dividend of $0.05 per common share,
payable June 1, 2021 to shareholders
of record at the close of business May 14,
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)
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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 March 31
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2021
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2020
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$'000
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$'000
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Shareholders' net
earnings (loss)
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2,585
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(5,876)
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Adjustments, net of
tax:
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Restructuring
expenses
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47
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407
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Business
acquisition expenses
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51
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55
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Adjusted net earnings
(loss)
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2,683
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(5,414)
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2)
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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.
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3)
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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.
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SOURCE Accord Financial Corp.