RED DEER, AB, Aug. 28 /CNW/ - RIFCO Inc. (TSX.V-RFC) today announced that
it has filed its unaudited financial statements for the quarter ended June 30,
2007, and related management's discussion and analysis with the regulatory
authorities. Copies can be obtained from SEDAR at www.sedar.com or on the
Company's website at www.rifco.net .
In the first fiscal quarter ending on June 30, 2007, the Company reported
a net loss of $83K compared to a net profit of $158K in the same quarter of
the prior year. Revenue in the quarter was $1.5M unchanged from the same
period in the prior year. Loan originations were up 21.6% to $5.64M over Q1 in
the prior year. Managed loans grew to $23.5M an increase of 50.6% from $15.6M
on June 30, 2006.
RIFCO is reporting a net loss for the first time in six quarters on lower
securitization revenue and higher than projected prepayment costs and loan
Lower amounts of loan securitizations resulted in over $1 million in
growth of on-book assets. These on-book assets will generate interest revenue
and are available for securitization in future periods.
In the last month of the quarter, the company received extraordinary
prepayments of securitized loans. RIFCO's loans may be repaid at the
borrower's option at any time without penalty. This extraordinary prepayment
in the period triggered a larger than normal prepayment expense to the
company. A cyclical increase in available credit in the Canadian market
contributes to early prepayments.
Loan losses were also above target for the period. The bulk of these
losses came in the last month of the quarter. Subsequent to the period end,
vehicles pledged as security for a significant amount of written off loans
were successfully recovered. It was expected that these vehicles would have
been recovered during the period. Net sales proceeds of these vehicles will be
realized when sold.
Delinquency levels are slightly above our expectations. However, the
company is confident that credit quality remains within our targets and that
significant recoveries will be experienced in the next quarter.
Larger than typical net recoveries should have a positive impact on the
results in the second quarter. Management remains confident that it can reach
this year's growth & revenue targets and despite this quarter's loss, progress
on most key metrics has been demonstrated.
- Loan Originations up 21.6% to $5.64M year-over-year (YOY)
- On Book Loans up 66% to $8.8M (YOY)
- Revenue stable at $1.5M (YOY)
- Managed Loans up 50.6% to $23.5M (YOY)
- Average Cost of Borrowing reduced by 0.10% to 8.09% (YOY)
- Funding Costs reduced to 6.26% from 6.91% (YOY)
- Operating Expense Ratio reduced by 3.80% to 9.61% (YOY)
- Delinquency Ratio increased by 1.55% to 3.58% (YOY)
- Average Loan Loss Rate reduced from 5.83% to 5.33% (YOY)
- Net Income reduced to ($83K) from $158K (YOY)
- Book value per share has increased to $0.33 from $0.26 (YOY)
- EPS was $0.00 from $0.01 (YOY)
- RIFCO obtained a $2M letter of credit to facilitate the release of
retained interest funds and reduce overall borrowing costs
- Secured a second annual securitization facility for $30 million
from Community Credit Union
- Renewed the Securcor Trust annual securitization facility for
$30 million up from $20 million with improved rates and terms
- Commenced internal use of RIFCO's new loan origination web based
software platform designed by White Clarke North America a leading
loan origination solutions company
- Formed a joint venture called RIFCO Rescue to offer roadside
assistance underwritten and administered by Road Canada and
offered through the RIFCO network and independent vehicle registry
agents in Alberta
RIFCO is pleased with the progress that has been made on many fronts.
Despite the results in this quarter, the company is confident that credit
quality remains within targets and that loan performance will continue to
compare favorably to industry peers.
We continue to reduce the cost of capital while increasing the amount
available. Improvements in operational efficiency continue to result from
increasing loan balances and infrastructure enhancements.
Management's expectations are high and we continue to seek even stronger
growth levels while maintaining good credit quality.
About RIFCO Inc
RIFCO Inc. operates through its wholly owned subsidiary Repair Industry
Finance Corporation. RIFCO is a specialty consumer finance corporation
currently providing motorists with non-prime Auto Purchase Financing and
mid-market Automotive & Commercial Repair Financing. RIFCO has a growing
network of new & used vehicle dealers and licensed repair facilities operating
in all provinces except Saskatchewan and Quebec.
The common shares of RIFCO INC. are traded on the TSX Venture Exchange
under the symbol "RFC". RIFCO Inc. has 19.23 million shares outstanding.
The TSX Venture Exchange does not accept responsibility for the adequacy
or accuracy of this release
For further information:
For further information: RIFCO INC., Lance A. Kadatz, Vice President and
Chief Financial Officer, Telephone: (403) 314-1214 Ext 111, Fax: (403)
314-1132, Email: email@example.com, Website: www.rifco.net