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
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September 30, December 31,
2009 2008
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(unaudited) (audited)
Assets
Finance receivables $111,507,669 $108,016,961
Allowance for credit losses (12,400,000) (12,190,000)
Dealer reserve (4,461,555) (2,454,715)
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Finance receivables - net 94,646,114 93,372,246
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Cash 702,701 29,162
Other assets 611,330 633,178
Equipment 391,544 456,841
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1,705,575 1,119,181
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$ 96,351,689 $ 94,491,427
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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
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72,044,535 74,269,271
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Unitholders' Equity
Unitholders' capital 29,635,129 29,583,463
Deficit (5,327,975) (9,361,307)
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24,307,154 20,222,156
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$ 96,351,689 $ 94,491,427
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Carfinco Income Fund
Consolidated Statements of Earnings (Loss), Comprehensive Income and
Deficit
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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
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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)
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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)
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Earnings (loss)
per fund unit
Basic and
diluted $ 0.09 $ 0.03 $ 0.20 $ (0.06)
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Carfinco Income Fund
Consolidated Statements of Cash Flows
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Three months ended Sept. 30 Nine months ended Sept. 30
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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
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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)
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End of period $ 702,701 $ 28,045 $ 702,701 $ 28,045
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Supplemental cash
flow information:
Interest paid $ 950,021 $ 1,176,778 $ 2,999,943 $ 3,304,049
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%SEDAR: 00019164E
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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