Montfort Capital Announces Third Quarter 2022 Financial Results
~Montfort delivers record Q3 revenue and record net comprehensive income;
completes acquisition of Langhaus Financial after quarter end~
VANCOUVER, BC, Nov. 29, 2022 /CNW/ - Montfort Capital Corporation ("Montfort" or the "Company") (TSXV: MONT) (OTCQB: MONTF), a leading alternative lender utilizing focused strategies, experienced management teams and advanced technology, is pleased to report consolidated interim financial results for the third quarter ended September 30, 2022. All figures are reported in Canadian dollars unless otherwise noted.
Third Quarter 2022 Highlights
For the three months ended September 30, 2022, the Company had the following highlights:
- Record revenue of $7.9 million, an increase of $6.5 million or 463% from $1.4 million in the three months ended August 31, 2021,
- Interest income from investments was $5.7 million, an increase of $4.4 million or 360% from $1.2 million in the prior comparable period,
- Net income increased 67% to $0.5 million from $0.3 million in the third quarter 2021,
- Total assets of $302 million as at September 30, 2022 compared to $125 million at December 31, 2021. Cash balance, as part of assets, for the third quarter was $5.5 million compared to $9.3 million as at December 31, 2021, and
- Montfort's consolidated loan investment portfolio (loans receivable) increased to $240.3 million in the third quarter 2022 compared to $106.9 million as of December 31, 2021.
On a comprehensive basis:
- Reported record consolidated net comprehensive income of $2.6 million for the three months ended September 30, 2022, compared to consolidated net comprehensive income of $1.2 million for the three months ending August 31, 2021.
Brightpath Capital acquisition:
- On August 15, 2022, the Company acquired Brightpath Capital Corporation, and its related entities and limited partnerships (together "Brightpath"). Brightpath is one of Canada's leading private providers of residential mortgages focused on Ontario and British Columbia.
"Our growth trajectory continues with another quarter of record revenue and record comprehensive net income," said Mike Walkinshaw, CEO of Montfort Capital Corporation. "During the third quarter we announced the completion of our Brightpath Capital acquisition, one of Canada's leading private providers of residential mortgages, and more recently, after the quarter end, the Langhaus Financial acquisition, a leading provider of insurance policy backed loans, which together has increased our total assets by $150 million. The acquisitions of Brightpath and Langhaus adds to our financial strength and provides diversification across the private credit sector as we look for additional growth opportunities into 2023."
Detailed Financial Review
The Company utilizes a proprietary loan origination platform to originate, underwrite and service private-market, high-yield loan opportunities through its operating divisions, TIMIA Capital a technology lending platform that offers revenue-based investment to fast growing, business-to-business Software-as-a-Service (or SaaS) businesses in North America; Pivot Financial, which specializes in asset-backed private credit targeting mid-market borrowers in Canada; and Brightpath Capital, one of Canada's leading private providers of residential mortgages.
During the third quarter ended September 30, 2022, Montfort benefited from increased payments (combined principal and interest) as a result of the continued revenue growth of TIMIA's and Pivot's underlying portfolio and the acquisition of Brightpath in the third quarter of 2022.
Total consolidated revenue for the three months ended September 30, 2022 increased $6.5 million or 463% to a record $7.9 million from $1.4 million in the three months ended August 31, 2021. Total consolidated revenue for the period included interest income of $5.7 million compared to $1.2 million in the three months ended August 31, 2021, and performance fee income of $0.1 million compared to nil in the three months ended August 31, 2021.
Total expenses for the 3 months ended September 30, 2022, were $7.2 million compared with $1.0 million for the prior year. The majority of the increase in total expenses is due the Brightpath acquisition, which resulted in increased headcount expense, increased interest expense related to Brightpath Capital loans payable, and an amortization expense of $0.7 million as a result of accelerated amortization due to the acquisition.
During the three months ended September 30, 2022, the Company posted net income of $0.5 million compared with $0.3 million for the three months ended August 31, 2021. Net Income (loss) attributable to common shareholders and non-controlling interests were ($0.3 million) and $0.9 million, respectively, for the three months ended September 30, 2022 versus ($0.2 million) and $0.6 million, respectively, reported for the three months ended August 31, 2021. Net loss attributable to the common shareholders of ($0.3 million) was impacted by acquisition costs of $0.3 million and $0.4 of accelerated amortization of intangible assets eliminated with the recent acquisition.
As posted in the Company's management discussion and analysis ("MD&A") for the three months ended September 30, 2022, please see the table below reflecting the progression of the attribution of income (loss) between the shareholders of the Company and non-controlling interests over the last eight quarters.
As at September 30, 2022, the Company's cash balance was $5.5 million and working capital was
Negative $11.1 million compared to $9.3 million and $1.8 million respectively as at December 31, 2021.
Subsequent Event:
On October 3, 2022 Montfort announced the acquisition of 78% of Langhaus Financial Partners Inc. ("Langhaus"). Langhaus is the parent company of Langhaus Financial Corporation ("LFC"), Canada's largest independent provider of insurance policy backed loans, with a specific focus on high-net-worth individuals and entrepreneurs. The Langhaus acquisition was previously announced on May 12, 2022. The total common share valuation of Langhaus is $12 million and the board, management and vendors of Langhaus are at arm's length to the Company. Langhaus Financial is the leading non-bank provider of insurance policy-backed lending solutions to high-net-worth individuals and entrepreneurs throughout Canada.
This news release is qualified in its entirety by the Company's financial statements for the three months ended September 30, 2022 and for the three months ended August 31, 2021, and the associated Management's Discussion & Analysis respecting the same periods, which can be downloaded from the Company's profile on SEDAR at http://www.sedar.com.
Montfort manages a diversified family of specialized private credit brands that utilize focused strategies and experienced management teams combined with advanced technology to improve fee related performance. Montfort facilitates transparency for all of its investors through public company reporting. For further information, please visit www.montfortcapital.com.
Neither the TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this news release.
Certain information and statements in this news release contain and constitute forward-looking information or forward-looking statements as defined under applicable securities laws (collectively, "forward-looking statements"). Forward-looking statements normally contain words like 'believe', 'expect', 'anticipate', 'plan', 'intend', 'continue', 'estimate', 'may', 'will', 'should', 'ongoing' and similar expressions, and within this news release include any statements (express or implied) respecting the future growth of the Company and the Company's future financial performance.
Forward-looking statements are not guarantees of future performance, actions, or developments and are based on expectations, assumptions and other factors that management currently believes are relevant, reasonable and appropriate in the circumstances, including, without limitation, the assumption that the Company and its investee companies are able to meet their respective future objectives and priorities and assumptions concerning general economic growth and the absence of unforeseen changes in the legislative and regulatory framework for the Company.
Although management believes that the forward-looking statements are reasonable, actual results could be substantially different due to the risks and uncertainties associated with and inherent to Montfort's business. Material risks and uncertainties applicable to the forward-looking statements set out herein include but are not limited to: intense competition in all aspects of business; reliance on limited management resources; general economic risks; new laws and regulations and risk of litigation. Although Montfort has attempted to identify factors that may cause actual actions, events or results to differ materially from those disclosed in the forward-looking statements, there may be other factors that cause actions, events or results not to be as anticipated, predicted, estimated or intended. Also, many of the factors are beyond the control of Montfort. Accordingly, readers should not place undue reliance on forward-looking statements. Montfort undertakes no obligation to reissue or update any forward-looking statements as a result of new information or events after the date hereof except as may be required by law. All forward-looking statements contained in this news release are qualified by this cautionary statement.
SOURCE Montfort Capital Corp.
Tim McNulty / Darren Seed, Incite Capital Markets; Mike Walkinshaw, CEO, Montfort Capital Corporation, (604) 398-8839, [email protected]
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