Carfinco Announces Record Revenue and Net Earnings for Third Quarter 2009
Carfinco Income Fund
TSX: CFN.UN
We are pleased to report that Carfinco has successfully achieved a number of financial milestones during the third quarter of 2009. The Fund recorded the highest finance receivables, revenue, and net earnings and also matched its highest earnings per unit in its history.
Beginning as early as Q4 2007, and through to Q1 2009 Carfinco endured what we, and many others, refer to as the "perfect storm." There were unprecedented meltdowns in the credit market and automotive industry, fuel prices were at an all time high, auction values on used vehicles were at historical lows and the unemployment rate in
The Fund has emerged from this period stronger than ever. During the third quarter of 2009 revenues were a record
Our balance sheet continues to be strong with an allowance for credit losses of
Loan originations for the third quarter were
As of
For the first nine months of 2009 revenues were
During the third quarter the Board of Trustees reinstated monthly cash distributions to Unitholders, announcing a 1.5 cent distribution per unit to Unitholders for August. Subsequently, 1.5 cent monthly distributions were also announced for the months of September and October.
We remain cautiously optimistic for continued steady improvement in our business throughout the balance of the year and confident in the effort, expertise, and dedication of our employees.
About Carfinco Income Fund
Carfinco focuses on providing consumer vehicle loans to borrowers unable to obtain financing through traditional lending sources. A network of select independent and franchise dealerships offer Carfinco's payment plan to their customers who must, along with the vehicle, meet Carfinco's underwriting guidelines. The units of the Fund trade on The
Caution Regarding Forward-Looking Statements - This news release contains certain forward-looking statements, including statements regarding the business and anticipated financial performance of the Fund. These statements are subject to a number of risks and uncertainties. Actual results may differ materially from results contemplated by the forward-looking statements. When relying on forward-looking statements to make decisions, investors and others should carefully consider the foregoing factors and other uncertainties and should not place undue reliance on such forward-looking statements.
Carfinco Income Fund Consolidated Balance Sheets ------------------------------------------------------------------------- September 30, December 31, 2009 2008 ------------- ------------- (unaudited) (audited) Assets Finance receivables $111,507,669 $108,016,961 Allowance for credit losses (12,400,000) (12,190,000) Dealer reserve (4,461,555) (2,454,715) ------------- ------------- Finance receivables - net 94,646,114 93,372,246 ------------- ------------- Cash 702,701 29,162 Other assets 611,330 633,178 Equipment 391,544 456,841 ------------- ------------- 1,705,575 1,119,181 ------------- ------------- $ 96,351,689 $ 94,491,427 ------------- ------------- ------------- ------------- ------------------------------------------------------------------------- Liabilities Bank credit facility $ 66,054,052 $ 67,878,411 Accounts payable and accrued liabilities 857,793 502,989 Deferred dealer obligation 1,711,879 1,604,385 Derivatives 1,277,811 1,983,486 Long term debt 2,143,000 2,300,000 ------------- ------------- 72,044,535 74,269,271 ------------- ------------- Unitholders' Equity Unitholders' capital 29,635,129 29,583,463 Deficit (5,327,975) (9,361,307) ------------- ------------- 24,307,154 20,222,156 ------------- ------------- $ 96,351,689 $ 94,491,427 ------------- ------------- ------------- ------------- ------------------------------------------------------------------------- Carfinco Income Fund Consolidated Statements of Earnings (Loss), Comprehensive Income and Deficit ------------------------------------------------------------------------- Three months ended Sept. 30 Nine months ended Sept. 30 ---------------------------- --------------------------- 2009 2008 2009 2008 (unaudited) (unaudited) (unaudited) (unaudited) ------------- ------------- ------------- ------------- Financial revenue Interest $ 8,004,958 $ 7,840,568 $ 23,199,783 $ 22,364,330 Administration fees 596,311 497,071 1,570,842 1,477,109 ------------- ------------- ------------- ------------- 8,601,269 8,337,639 24,770,625 23,841,439 Financial expense Interest 1,012,678 1,255,588 3,212,465 3,511,238 ------------- ------------- ------------- ------------- Net financial income before provision for credit losses 7,588,591 7,082,051 21,558,160 20,330,201 Provision for credit losses 3,073,993 3,824,534 10,075,004 14,161,226 ------------- ------------- ------------- ------------- Net financial income before operating expenses 4,514,598 3,257,517 11,483,156 6,168,975 ------------- ------------- ------------- ------------- Operating expenses General and administrative 2,475,160 2,330,486 7,316,797 7,060,934 (Gain) loss on derivatives (195,777) 203,749 (705,675) 443,548 Amortization of equipment 49,366 33,534 138,685 91,938 ------------- ------------- ------------- ------------- 2,328,749 2,567,769 6,749,807 7,596,420 ------------- ------------- ------------- ------------- Net earnings (loss) and comprehensive income (loss) $ 2,185,849 $ 689,748 $ 4,733,349 $ (1,427,445) ------------- ------------- ------------- ------------- ------------- ------------- ------------- ------------- ------------------------------------------------------------------------- Deficit, beginning of period $ (6,813,807) $ (9,490,937) $ (9,361,307) $ (5,483,698) Net earnings (loss) 2,185,849 689,748 4,733,349 (1,427,445) Cash distributions on fund unit equity (700,017) - (700,017) (1,890,046) ------------- ------------- ------------- ------------- Deficit, end of period $ (5,327,975) $ (8,801,189) $ (5,327,975) $ (8,801,189) ------------- ------------- ------------- ------------- ------------- ------------- ------------- ------------- ------------------------------------------------------------------------- Earnings (loss) per fund unit Basic and diluted $ 0.09 $ 0.03 $ 0.20 $ (0.06) ------------- ------------- ------------- ------------- ------------- ------------- ------------- ------------- ------------------------------------------------------------------------- Carfinco Income Fund Consolidated Statements of Cash Flows ------------------------------------------------------------------------- Three months ended Sept. 30 Nine months ended Sept. 30 ---------------------------- --------------------------- 2009 2008 2009 2008 (unaudited) (unaudited) (unaudited) (unaudited) ------------- ------------- ------------- ------------- Increase (decrease) in cash Operating Net earnings (loss) $ 2,185,849 $ 689,748 $ 4,733,349 $ (1,427,445) Adjustments to reconcile net earnings (loss) to net cash from operations: Provision for credit losses 3,073,993 3,824,534 10,075,004 14,161,226 Amortization of equipment 49,366 33,534 138,685 91,938 Accrued interest 42,614 (136,038) 242,181 (254,492) Deferred dealer obligation 450,000 400,000 1,350,000 925,000 Derivatives (195,777) 203,749 (705,675) 443,548 Accounts payable and accrued liabilities 170,152 (18,562) 354,804 (1,024,747) Other assets (138,805) (74,126) 21,848 (34,722) ------------- ------------- ------------- ------------- 5,637,392 4,922,839 16,210,196 12,880,306 ------------- ------------- ------------- ------------- Investing Funds advanced on finance receivables (14,618,829) (15,483,653) (40,180,097) (52,597,899) Principal collections on finance receivables 10,962,560 11,088,423 31,701,296 32,438,042 Change in finance receivable reserves and transaction costs (1,237,022) (1,439,053) (4,354,758) (4,434,363) Purchase of equipment (20,609) (90,535) (73,388) (171,429) ------------- ------------- ------------- ------------- (4,913,900) (5,924,818) (12,906,947) (24,765,649) ------------- ------------- ------------- ------------- Financing Advances on bank credit facility 1,821,994 2,934,146 3,775,641 18,317,654 Repayments on bank credit facility (1,300,000) (2,500,000) (5,600,000) (6,700,000) Issuance of long term debt - 500,000 - 2,300,000 Repayments on long term debt - - (157,000) - Repayments on unit purchase financing - - 51,666 51,666 Fund unit cash distributions (700,017) - (700,017) (1,890,046) ------------- ------------- ------------- ------------- (178,023) 934,146 (2,629,710) 12,079,274 ------------- ------------- ------------- ------------- Net increase (decrease) in cash 545,469 (67,833) 673,539 193,931 Cash Beginning of period 157,232 95,878 29,162 (165,886) ------------- ------------- ------------- ------------- End of period $ 702,701 $ 28,045 $ 702,701 $ 28,045 ------------- ------------- ------------- ------------- ------------- ------------- ------------- ------------- ------------------------------------------------------------------------- Supplemental cash flow information: Interest paid $ 950,021 $ 1,176,778 $ 2,999,943 $ 3,304,049 ------------- ------------- ------------- ------------- ------------- ------------- ------------- ------------- -------------------------------------------------------------------------
%SEDAR: 00019164E
For further information: For further information: Mr. Tracy A. Graf, CEO & Trustee of Carfinco Income Fund, Telephone: 1-888-486-4356, Facsimile: 1-888-486-7456, E-mail: [email protected]; OR The Howard Group Inc., Jeff Walker, Bob Beaty, Investor Relations, Telephone: 1-888-221-0915, Telephone: (403) 221-0915, E-mail: [email protected], Website: www.howardgroupinc.com
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