TORONTO, Aug. 14 /CNW/ - Chesswood Income Fund (the "Fund") (TSX:CHW.UN)
announced today its results for the second quarter of 2007, ended
June 30th, 2007. As the Fund commenced operations on May 10, 2006, comparative
information is only for a 52-day period and has not been presented in this
"While we continue to see a pattern of competitive behavior in the U.S.
which we feel is unsustainable, Chesswood's profitability, while reduced by
the current industry cycle, is still robust," said Barry Shafran, CEO of the
Newer competitors of Pawnee Leasing Corporation (the Fund's U.S.
equipment finance company), many of whom are seeking growth in a new segment
given little growth in their traditional markets, provide lessees with more
financing choices than in the past, and at rates that do not reflect the risk
profile of the market. At the same time, credit quality has decreased, amid a
softening in some segments of the U.S. economy.
"Credit and pricing discipline are rewarded in these circumstances,
despite the effect on shorter-term originations that this type of climate can
create. Chasing volume in this environment is risky. In the past, those that
chased the volume generated short-term profits in the origination stage that
were ultimately offset by much greater losses due to elevated defaults" added
The Fund's Canadian businesses posted results in the quarter that are
consistent with the prior year.
Financial Highlights For The Fund
(in CDN $000's, except Per Unit Amounts)
Three Mths Ended Six Mths Ended
June 30, 2007 June 30, 2007
Revenues $ 23,008 $ 44,090
Adjusted EBITDA $ 3,244 $ 6,410
Distributable Cash $ 2,321 $ 4,779
Distributions(1) $ 2,292 $ 4,740
Distributions Per Unit $ 0.2874 $ 0.5748
Distributions Per Unit Per Month $ 0.0958 $ 0.0958
Net Income before Non-controlling Interest $ 4,751 $ 6,609
(1) - includes dividends on 1,478,537 Class B and C shares of Chesswood
US Acquisition Co. Ltd. and distributions on 7,040,558 Fund units.
Extension of Convertible Debentures
The Fund also announces the extension of its $3.5 million convertible
debentures, originally due on August 10, 2007, to August 10, 2008, with no
changes to the rate of 9% per annum, or convertibility options of the holder
or the Fund. The extension does provide however for an interest premium to the
debenture holders of a maximum of 3%, should the debentures be repaid by the
Fund, prior to February 10, 2008.
Non GAAP Measures
References to Adjusted EBITDA and Distributable Cash are not recognized
measures under Canadian GAAP and do not have standard meanings under Canadian
GAAP. Accordingly, these measures may not be comparable to similar measures
presented by other issuers.
Please refer to Chesswood's Management Discussion and Analysis for the
period ended June 30, 2007 for additional information concerning these
measures and a reconciliation of these measures to the Fund's consolidated net
income for the period.
About Chesswood Income Fund
The Fund is a financial services trust with operating businesses in both
Canada and the U.S.
For more information visit www.ChesswoodFund.com.
This press release contains forward-looking statements that involve a
number of risks and uncertainties because they relate to events and depend on
circumstances that will occur in the future. Many factors could cause actual
results and developments to differ materially from those expressed or implied
by these forward-looking statements.
NO STOCK EXCHANGE, SECURITIES COMMISSION OR OTHER REGULATORY AUTHORITY
HAS APPROVED OR DISAPPROVED THE INFORMATION CONTAINED HEREIN.
For further information:
For further information: Barry Shafran, Chesswood Income Fund, (416)
386-3099, email@example.com; Catharine Marion (media only),
Environics Communications Inc., (416) 969-2809, firstname.lastname@example.org