TORONTO, May 29, 2018 /CNW/ - Axis Auto Finance Inc. ("Axis" or the "Company"), (TSXV: AXIS) Canada's fastest growing publicly-traded sub-prime automotive finance company, today announced financial results for the third fiscal quarter ended March 31, 2018.
During Q3 2018, Axis acquired 100% of the issued and outstanding securities of Cars on Credit Financial Inc. ("COCF"), a competing non-prime auto finance lender. Financial results for Q3 2018 include the results of both the COCF and Axis business lines, while comparative Q3 2017 and prior years do not include the results from COCF.
Closing of the acquisition of COCF, which has more than doubled Axis' finance receivables, expanded the dealer base into Atlantic Canada, and diversified the product offering to include loans;
Net finance receivables balance of $58.3 million at the end of the quarter compared to $20.0 million as of March 31, 2017;
Record revenues of $3.5 million for the quarter compared to $1.8 million in the third quarter of fiscal 2017;
Continuing to maintain strong portfolio yields in excess of 38% for the quarter;
Annualized loss rates at 7.48%, down from 8.03% for the comparable period of fiscal 2017; and
Adjusted Earnings1 of $0.5 million for the quarter compared to $0.3 million in Q3 2017.
Revenues of $3.5 million for the quarter increased 89% from the revenues of $1.8 million for the comparative period in fiscal 2017, consistent with organic portfolio growth and revenues generated from the COCF loan portfolio. On an annualized basis, the Company's full year revenue run-rate is $16.5 million, compared to actual 2017 fiscal year revenues of $6.8 million.
The annualized loss rate for the quarter was 7.48%, well within management's expectation of a loss rate that can fluctuate between 5 - 10%. The current quarter's loss rate of 7.48% was a noted improvement when compared to the Q3 2017 annualized loss rate of 8.03%.
The average portfolio yield was 38.26% down slightly from 39.06% for Q3 2017 and consistent with the management objective to maintain the average yield on its finance receivables portfolio above 30%.
Net finance receivables at the end of the quarter were $58.3 million, an increase of 191% from $20.0 million at March 31, 2017.
Net income before M&A transaction costs and income taxes for the quarter was $0.2 million, in line with Q3 2017 net income before transaction costs and income taxes of $0.2 million.
Net loss after M&A transaction costs and income taxes for the quarter was ($0.4) million, or ($0.005) per share, down from net income of $0.01 million in Q3 2017, or $0.0001 per share.
Adjusted Earnings1 for the quarter was $0.5 million compared to $0.3 million in Q3 2017, and total $1.4 million on a year to date basis through three quarters of fiscal 2018. On an annual run-rate basis, Adjusted Earnings are $1.9 million, an increase from $0.9 million for the 2017 fiscal year.
1 In order to track the performance of its Finance receivable portfolio in a given period without the volatility associated with estimates and assumptions, Axis introduced a non-IFRS measure called Adjusted Earnings. This measure now, included in the MD&A, is calculated as the net income (loss) for the quarter, adjusted for (i) non-cash expense items (ii) actual credit losses incurred (iii) non-recurring one time M&A transaction costs and (iv) specified expenses which were entirely recognized in a given quarter but for which the benefit was derived over more than a given quarter.
About Axis Auto Finance
Axis provides non-standard financing options targeting roughly 30% of Canadians (Source: Equifax) that do not qualify for traditional bank-type financing for their used vehicle purchase. Through personalized service and a commitment to building strong, long-lasting relationships with dealer partners, Axis continues to be one of Canada's fastest-growing auto-financing companies.
The TSX Venture Exchange has neither approved nor disapproved the contents of this press release. Neither the Exchange nor its Regulation Services Provider (as that term is defined in the policies of the Exchange) accepts responsibility for the adequacy or accuracy of this release.
Certain information in this press release may constitute forward-looking information. This information is based on current expectations that are subject to significant risks and uncertainties that are difficult to predict. Actual results might differ materially from results suggested in any forward-looking statements. The Company assumes no obligation to update the forward-looking statements, or to update the reasons why actual results could differ from those reflected in the forward looking-statements unless and until required by securities laws applicable to the Company. Additional information identifying risks and uncertainties is contained in the Company's filings with the Canadian securities regulators, available at www.sedar.com.
SOURCE Axis Auto Finance Inc.
For further information: Axis Auto Finance Inc., Ilja Troitschanski, President, (416) 633-5626, [email protected]