Mass Financial Corp. Reports Results for the Year Ended 2009
- Book Value Increases to $9.72 Per Common Share -
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<p><span class="xn-location">HONG KONG</span>, <span class="xn-chron">June 1</span> /CNW/ -- Mass Financial Corp. ("MFC") (<span class="xn-location">Vienna</span> Stock Exchange symbol: MASS) today reported its financial results for the year ended <span class="xn-chron">December 31, 2009</span>. All figures are in U.S. dollars and earnings per share amounts are on a diluted basis.</p>
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<p>For the year ended <span class="xn-chron">December 31, 2009</span>, MFC reported total revenues of <span class="xn-money">$406.4 million</span> with net income attributable to our shareholders of <span class="xn-money">$75.2 million</span> or <span class="xn-money">$2.70</span> per share, compared to total revenues of <span class="xn-money">$598.8 million</span> with net income of <span class="xn-money">$23.3 million</span> or <span class="xn-money">$0.91</span> per share for the year of 2008.</p>
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<p>At <span class="xn-chron">December 31, 2009</span>, MFC had <span class="xn-money">$346.8 million</span> in cash and securities, its current ratio was 2.14, and the long-term debt-to-shareholders' equity ratio was 0.28. Equity per common share increased to <span class="xn-money">$9.72</span> (<span class="xn-money">$10.55</span> a share before our adjustment for our stock dividend paid in December 2009). For 2009 MFC's net income represented a 65% return on equity as compared to S&P 500's return of 26%.</p>
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<p>MFC's book value per share as of <span class="xn-chron">December 31, 2009</span> has increased by 300% from our first full year in 2006. We believe this is the best measurement of our results and performance and that a price earnings multiple is not relevant measurement of MFC's performance.</p>
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MFC's book value per share as of December 31, for the dates
indicted is set out below
2009 2008 2007 2006 2005
---- ---- ---- ---- ----
$9.72 $5.71 $4.39 $2.43 Nil
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<p> </p>
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Note: 2006 to 2008 amounts are adjusted for the effect of our
stock dividend paid in December 2009
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<p>Our revenues for the year ended <span class="xn-chron">December 31, 2009</span> declined from 2008, primarily due to reducing our risk exposure by scaling back our commodity and trade finance business in countries we deemed higher-risk. We also reduced our product lines and customer base to reflect global macro economic conditions.</p>
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<p><span class="xn-person">President Michael Smith</span> commented, "We are not pleased with our overall performance in 2009. Progress on certain projects proved elusive and we believe we are capable of better execution. We remain focused on preserving our capital and liquidity. MFC is healthier, as we are not currently operating with a belief that our markets will return to prior levels in the short-term.</p>
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<p>In <span class="xn-chron">December 2009</span> we issued a stock dividend to shareholders of one new common share for each 11 shares owned."</p>
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<p><span class="xn-person">Mr. Smith</span> continued, "Our strategy demands constant review and attention to ensure MFC reflects our commitment to building shareholder value. This year, we are determined to:</p>
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-- Become more disciplined and focused more specific business lines
-- Create value in areas where we have specialized knowledge
-- Direct more energy and effort to the Asian markets
-- Seek greater asset exposure in Asia
-- Complete another listing for our common shares
-- Increase the number and industry experience of our directors."
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<p><span class="xn-person">Mr. Smith</span> concluded, "Our main objective remains simply to do good business. Our liquidity allows us to take advantage of emerging opportunities. These are interesting times for business opportunity, but we must maintain our financial discipline. Now is the time to focus on projects in our areas of our special knowledge while carefully assessing the risks.</p>
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<p>Our goal for 2010 and 2011 will be to leverage our foundation of resources and strategic network of operating businesses to pursue international growth opportunities. We will continue to manage our business for the long term."</p>
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<p>Shareholders are encouraged to read the entire Annual Report, which is available on the Company's website for a greater understanding of MFC.</p>
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About the Company:
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<p>Mass Financial Corp's merchant banking business encompasses a broad spectrum of activities related to the integrated combination of banking, trading of commodities and natural resources, financing of commercial trade, and proprietary investing. To obtain further information, please visit our website at <a href="http://www.massfinancialcorp.com">http://www.massfinancialcorp.com</a></p>
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Disclaimer for Forward-Looking Information
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<p>Certain statements in this news release are forward-looking statements, which reflect our management's expectations regarding our future growth, results of operations, performance, and business prospects and opportunities. Forward-looking statements consist of statements that are not purely historical, including any statements regarding beliefs, plans, expectations or intentions regarding the future. Such statements are subject to risks and uncertainties that may cause actual results, performance or developments to differ materially from those contained in the statements. No assurance can be given that any of the events anticipated by the forward-looking statements will occur or, if they do occur, what benefits we will obtain from them. These forward-looking statements reflect management's current views, are based on certain assumptions, and speak only as of <span class="xn-chron">December 31, 2009</span>. These assumptions, which include management's current expectations, estimates and assumptions about certain projects and the markets we operate in, the global economic environment, interest rates, exchange rates and our ability to attract and retain customers and to manage the company's assets and operating costs, may prove to be incorrect. Important factors and risks that might cause our actual results to differ materially from the results contemplated by these forward-looking statements, including those that are contained in the section titled "Risk Factors," are included in our annual report for 2009 and investors are urged to read them in there entirety. Investors are also cautioned not to place undue reliance on these forward-looking statements. No forward-looking statement is a guarantee of future results. We disclaim any intention or obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.</p>
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North America Contact: Rene Randall
Telephone: 1 (604) 408 8538 Email: [email protected]
-FINANCIAL TABLES FOLLOW-
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MASS FINANCIAL CORP.
CONSOLIDATED BALANCE SHEETS
December 31, 2009 and 2008
(U.S. Dollars in Thousands)
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2009 2008
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<p>ASSETS</p>
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<p>Current Assets</p>
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Cash and cash
equivalents $329,554 $201,622
Securities 17,196 4,493
Restricted cash 2,466 16,054
Loan receivables 111 1,357
Trade and other
receivables 19,778 30,315
Inventories 46,197 20,075
Properties for sale 13,616 13,374
Tax receivables 3,138 2,237
Prepaid and other 5,211 6,934
----- -----
Total current assets 437,267 296,461
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<p>Non-current Assets</p>
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Restricted cash 29 28
Securities 5,880 9,150
Securities,
restricted 9,357 9,357
Receivables - 286
Property, plant and
equipment 5,460 2,806
Investment property 41,290 39,744
Goodwill 5,657 4,513
Deferred tax assets 3,317 2,149
Equity method
investments 4,074 5,421
----- -----
Total non-current
assets 75,064 73,454
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<p> </p>
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$512,331 $369,915
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<p> </p>
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MASS FINANCIAL CORP.
CONSOLIDATED BALANCE SHEETS (cont'd)
December 31, 2009 and 2008
(U.S. Dollars in Thousands)
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2009 2008
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<p>LIABILITIES</p>
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<p>Current Liabilities</p>
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Financial liabilities, short-
term bank loans $141,016 $65,067
Trade and other payables and
accrued expenses 45,714 39,040
Accrued dividend on preferred
shares - 9,265
Provisions 959 487
Income tax liabilities 933 1,134
Long-term debt, current portion 16,071 2,770
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Total current liabilities 204,693 117,763
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<p>Long-term liabilities</p>
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Long-term debt, less current
portion 58,097 52,634
Financial liabilities 9,357 9,357
Deferred tax liabilities 1,367 1,030
Due to prior owner and former
subsidiaries - 71,506
Note payable 1,672 -
Other non-current liabilities 25,829 91
------ ---
Total long-term liabilities 96,322 134,618
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<p> Total Liabilities 301,015 252,381</p>
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<p>EQUITY</p>
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Shareholders' equity
Common stock, net 46,132 18,090
Equity component of convertible
debt 800 1,000
Other reserves (3,073) (11,656)
Retained earnings 166,461 108,576
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Total shareholders' equity 210,320 116,010
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Non-controlling interests 996 1,524
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Total Equity 211,316 117,534
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$512,331 $369,915
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MASS FINANCIAL CORP.
CONSOLIDATED STATEMENTS OF INCOME
For the Years Ended December 31, 2009 and 2008
(U.S. Dollars in Thousands, Except per Share Amounts)
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2009 2008
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Revenues from sales, services and
other $402,786 $594,545
Share of the results of associates
and joint ventures 3,619 4,263
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Total revenues 406,405 598,808
Expenses
Cost of sales 273,793 494,391
General and administrative 30,631 28,216
Interest 13,350 15,464
Dividend on preferred shares
classified as liabilities - 3,744
Other 7,108 8,267
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324,882 550,082
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<p>Operating profit 81,523 48,726</p>
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Other items:
Currency transaction loss (6,148) (18,151)
Goodwill impairment - (5,235)
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Profit before income taxes 75,375 25,340
Recovery of income taxes 43 1,272
--- -----
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Net income
$75,418 $26,612
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Attributable to:
Shareholders of Mass Financial Corp. $75,179 $23,288
Non-controlling interests 239 3,324
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$75,418 $26,612
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Earnings per share
- basic $3.69 $1.20
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- diluted $2.70 $0.91
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Number of weighted average shares
outstanding, basic 20,353,302 19,468,454
Number of weighted average shares
outstanding, diluted 28,089,650 25,977,458
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MASS FINANCIAL CORP.
FINANCIAL HIGHLIGHTS
(U.S. Dollars in Thousands except per Share Data and Ratios)
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December 31,
2009 2008 2007 2006 2005(5)
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Cash $329,554 $201,622 $183,903 $99,078 $26,185
Securities 17,196 4,493 45,984 36,787 2,880
Current Assets 437,267 296,461 315,256 195,462 82,599
Total Assets 512,331 369,915 355,576 230,437 109,255
Current Liabilities 204,693 117,763 143,324 91,280 39,421
Working Capital 232,574 178,698 171,932 104,182 43,178
Current Ratio 2.14 2.52 2.20 2.14 2.10
Long-Term Debt, less
current portion 58,097 52,634 28,068 4,710 869
Long-Term Debt-to-
Equity Ratio 0.28 0.45 0.34 0.10(3) - (3)
Debt - Preferred Shares - 71,506 91,956 77,976 67,058(1)
Total Liabilities 301,015 252,381 272,859 183,491 107,348
Shareholders' Equity 210,320 116,010 81,583 45,131 1(2)
Return on Shareholders'
Equity 65% 29% 107.4% - (3) - (3)
Equity Per Common Share 9.72 5.71(4) 4.39(4) 2.43(4) - (3)
Dividend (in stock) 9% - - - -
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(1) Opening balance of 2005, preferred shares are denominated in
Canadian dollars.
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(2) The net assets acquired in 2005 were wholly paid for through the
issuance of debt in the form of preferred shares. An independent
valuation of the common shares at the time of our spin-off was in
the range of $0.50 to $0.76 per share, or approximately US$9 million
in aggregate. At that time the valuation treated the common shares
as having a warrant value on the future capital that may be made
earned on the preferred shares in excess of their stated dividend.
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(3) 2006 was the first year of common shareholders' equity as there
was no equity attributable to such shares as of December 31, 2005.
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(4) Adjusted for the effect of the stock dividend declared in
December 2009.
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(5) Unaudited.
For further information: North America Contact: Rene Randall, +1-604-408-8538, [email protected], for Mass Financial Corp. Web Site: http://www.massfinancialcorp.com
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