Callidus Capital Reports Strong Second Quarter Results and Announces Dividend Policy

Note: All amounts in Canadian dollars unless otherwise indicated.

Second Quarter 2015 Highlights

  • Earnings per share (diluted) of $0.36, an increase of 16% from $0.31 last quarter.
  • ROE was 15.2%, an increase from 13.6% in the previous quarter.
  • Gross loans receivable before derecognition of $1,044 million at June 30, 2015, up $138 million, or 15%, from previous quarter and up $507 million, or 94% from same quarter last year.
  • Average loan portfolio outstanding was $928 million, an increase of $64 million or 7% from the previous quarter and up $426 million or 85% from the same quarter last year.
  • Gross yield for the quarter was 18.8%, an increase from 17.9% in the previous quarter.
  • Total revenue of $39 million for the quarter, up $4 million, or 12% from previous quarter and up $16 million, or 71% from same quarter last year.
  • Net income was $18.4 million for the quarter, up $2.4 million, or 15% from $16.0 million in previous quarter.
  • Credit quality continues to be very strong as evidenced by an annualized provision rate of 1.2% for the second quarter.
  • As at June 30, 2015, the estimated collateral value coverage on net loans receivable was approximately 145% with a range between 100% and 776% on an individual loan basis. Furthermore, watchlist loans had an estimated collateral value coverage of 119% and non-watchlist loans had an estimated collateral value coverage of 153%.

Dividend Policy

  • The board of directors today adopted a dividend policy pursuant to which the Company intends to declare and pay quarterly cash dividends to holders of its outstanding common shares of record as of the close of business on the last business day of each calendar quarter. The quarterly dividend is initially set at $0.175 per common share ($0.70 per annum). The first dividend to be paid is for the quarter ending September 30, 2015.
  • The board of directors has also approved the implementation of a dividend reinvestment plan pursuant to which eligible shareholders may elect to automatically reinvest their cash dividends payable in respect of the common shares to acquire additional common shares. Precise terms of the dividend reinvestment plan will be announced once the plan is finalized.

TORONTO, Aug. 6, 2015 /CNW/ - Callidus Capital Corporation ("Callidus" or the "Company") (TSX: CBL), reported strong loan portfolio and revenue growth and improved earnings in the second quarter of 2015.  Callidus, which provides flexible and innovative asset-based loans, primarily to growth and distressed or troubled companies, today reported its financial results for the second quarter ended June 30, 2015, and provided an update on the current state of its business.

Newton Glassman, Executive Chairman and Chief Executive Officer of Callidus said, "Management believes that the Company has matured to its next stage – generating enough cash to support both continued loan portfolio growth and a dividend. The Company has been growing faster than estimated at the time of the Initial Public Offering exceeding our initial projections allowing us to initiate a dividend which the company expects will grow over time. With the introduction of the dividend, we remain committed to growth and intend to get back to the original rate of doubling the book every 2-3 years. This is particularly valuable at this time given the robustness of the deal pipeline."

"The introduction of a dividend, our continued focus on growth, Callidus' ability to deal with both formal (i.e. court) and informal (i.e. out of court) restructurings as a normal part of its business model combined with a targeted 1.5% - 2.0% provisioning is a strong vote of confidence by both Management and the Board in the performance of the business" added David Reese, President and COO of Callidus.

Current state of the business, as at August 5, 2015:

  • Gross loans receivable before derecognition stood at $1.11 billion.
  • The pipeline of potential new loans stands at approximately $932 million.
  • Signed back term sheets of approximately $400 million, up $192 million, or approximately 93%, from what was reported last quarter.
  • Catalyst Fund V now has US$889 million of capital commitments and expects to close on another US$400 million in the coming weeks, all of which have received the necessary approvals, and ultimately reach its "hard cap" of US$1.5 billion. Fund V availability would increase to approximately $390 million, of which $300 million could be used to acquire loan participation interests. In addition, we continue to work to expand our credit facilities in order to meet anticipated funding requirements for future loan growth.
  • Total debt (net of cash and cash equivalents) of $549 million, or 50% of gross loans receivable.
  • The Company realized on one of its watchlist loans in line with its $9 million provision.
  • Approximately 1.5 million shares (approximately 60% of the 2.6 million shares under the program) were acquired into treasury and cancelled under the normal course issuer bid.
  • Our headcount now stands at 31, an increase of 6 to support our continued growth.

Financial Highlights




Three Months Ended

Three Months Ended





Y/Y

Q/Q

($ 000s)

Jun 30, 2015

Jun 30, 2014

Mar 31, 2015

Change

 Change

Average loan portfolio outstanding (1)

$928,172

501,849

864,324

85%

7%

Total revenue (after derecognition)

39,329

22,974

35,091

71%

12%

Gross yield (1)

18.8%

20.8%

17.9%



Net interest margin(1)

13.5%

13.3%

12.7%



Net income

18,390

7,646

15,989

141%

15%

Earnings per share (diluted)

$0.36

$0.18

$0.31

100%

16%

ROE

15.2%

8.1%

13.6%



Notes:


(1)

Refer to "Description of Non-IFRS Measures" in the MD&A. These financial measures are not
recognized measures under IFRS and do not have a standardized meaning prescribed by IFRS.
Therefore, they may not be comparable to similar measures used by other issuers.

 

Highlights of the second quarter, relative to the last quarter:

  • In April 2015, the Company increased the amount of its existing Revolving Credit Facility by US$37.5 million to US$300 million in the aggregate. All other terms remain substantially unchanged.
  • During the second quarter, 981,016 shares were acquired into treasury and cancelled under the normal course issuer bid.
  • Provision for loan losses for the current quarter was $3.2 million of which a $3.0 million recovery was recognized related to the Catalyst guarantee. The provision of $3.2 million for the current quarter amounts to an annualized rate of approximately 1.2% on a gross loans receivable balance of $1,044 million.
  • In the quarter, four new loans representing $113 million in total credit facilities were extended. In addition to these new loans, $115 million in net funding was provided to existing borrowers.
  • Our gross yield was 20.2% on our core product and 14.1% on Callidus Lite.

About Callidus Capital Corporation

Established in 2003, Callidus Capital Corporation is a Canadian company that specializes in innovative and creative financing solutions for companies that are unable to obtain adequate financing from conventional lending institutions. Unlike conventional lending institutions who demand a long list of covenants and make credit decisions based on cash flow and projections, Callidus credit facilities have few, if any, covenants and are based on the value of the company's assets, its enterprise value and borrowing needs. Callidus employs a proprietary system of monitoring collateral and exercising control over the cash inflow and outflows of each borrower, enabling Callidus to very effectively manage any risk of loss.

Forward-Looking Statements

Certain statements made herein contain forward-looking information. Although Callidus believes these statements to be reasonable, the assumptions upon which they are based may prove to be incorrect. Furthermore, the forward-looking statements contained in this press release are made as at the date of this press release and Callidus does not undertake any obligation to update publicly or to revise any of the included forward-looking statements, whether as a result of new information, future events or otherwise, except as may be required by applicable securities laws.

Conference call

Callidus will host a conference call to discuss Q2 2015 results on August 7th, 2015 at 8:00 a.m. Eastern Time.  The dial in number for the call is (647) 427-7450 or (888) 231-8191 (reference number: 91960960). A taped replay of the call will be available until August 14, 2015 at (416) 849-0833 or (855) 859-2056 (reference number: 91960960).

SOURCE Callidus Capital Corporation

For further information: David Reese, President and Chief Operating Officer, (416) 945-3016, dreese@calliduscapital.ca; Jean Lépine, Director, Investor Relations, (416) 945-3023, jlepine@calliduscapital.ca, www.calliduscapital.ca


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