- Sale of Impact Mobile increases tangible net worth to
$36 million
- Balance sheet supports a portfolio of more than
$350 million with liquidity for the
foreseeable future
TORONTO, Aug. 20, 2018 /CNW/ - Dealnet Capital
Corp. ("Dealnet" or the "Company") (TSX VENTURE: DLS), reported
today its financial results for the three-month and six-month
periods ending June 30, 2018. All
results are reported under International Financial Reporting
Standards ("IFRS") and in Canadian dollars, unless otherwise
specified. With the sale of Impact Mobile on July 6, 2018, the results of operations
attributable to Impact Mobile have been segregated from the ongoing
continuing business and presented as discontinued operations.
Including the income from discontinued operations, the net loss
for the three-month period was $51
thousand ($0.00 per share)
versus a net loss of $3.1 million
($0.01 per share) for the same period
last year. For the three-month period ending June 30, 2018, the Company reported a loss from
continuing operations of $1.4 million
versus a loss of $4.0 million for the
same period last year.
Adjusting the loss from continuing operations of $1.4 million for the $823
thousand in net finance costs attributable to the
$12 million of senior secured
debentures which were redeemed subsequent to the end of the period,
the adjusted loss from continuing operations was approximately
$569 thousand inclusive of
approximately $237 thousand of
non-cash expenses.
"The sale of Impact Mobile in early July marked a critical
inflection point for the turnaround of Dealnet Capital," said
Brent Houlden, Dealnet's President
and Chief Executive Officer. "This transaction gives Dealnet the
opportunity to fund our operations through 2019 and beyond,
allowing us to strategically focus on improving the profitability
and growth of our consumer finance business. The future is
bright." added Mr. Houlden.
Today, the Company reached an agreement to cancel 1,473,336
common shares to settle various outstanding amounts related to the
January 2017 portfolio acquisition.
The Board of Directors has also cancelled the Company's short-term
incentive plan and 2018 bonuses will be set at the discretion of
the Board.
Q2 2018 Financial Highlights
Portfolio Growth
As at June 30, 2018, Dealnet's
portfolio of finance receivables increased to $174.3 million with 33,579 financing contracts in
place up from $172.9 million and
33,165 contracts as at March 31,
2018.
Gross Profit
For the three-month period ending June
30, 2018, the Company reported gross profit from continuing
operations of $3.0 million, an
increase of 11 percent from the $2.7
million reported in the previous three-month period and an
increase of 20 percent from the $2.5
million reported in the same period last
year.
Operating Expenses
Consolidated operating expenses from continuing operations
decreased 31 percent to $4.4 million
for the three-month period ending June 30,
2018 versus $6.3 million
reported in the previous three-month period and a decrease of 33
percent from the $6.5 million
reported for the same period last year.
Key Performance Indicators
The following table summarizes some of the Key Performance
Indicators that the Company uses to measure the achievement of its
business plan objectives:
|
|
|
|
|
Q2
2018
|
Q1
2018
|
Q2
2017
|
|
|
|
|
Finance
Receivables
|
$174M
|
$173M
|
$170M
|
Organic
Originations
|
$9.5M
|
$9.3M
|
$8.9M
|
Average Yield on
Earning Assets
|
8.8%
|
8.9%
|
8.6%
|
Weighted Average
Interest Expense
|
4.6%
|
4.5%
|
5.0%
|
Net Interest
Margin
|
48%
|
49%
|
42%
|
Engagement Gross
Margin
|
36%
|
18%
|
27%
|
Securitizations
|
$8.5M
|
$17.5M
|
$3.9M
|
Corporate Tangible
Leverage
|
11.8
|
11.9
|
7.4
|
Tangible Net
Worth
|
$15.3M
|
$15.1M
|
$23.5M
|
Adjusted Corporate
Tangible Leverage1
|
4.7
|
11.9
|
7.4
|
Adjusted Tangible
Net Worth1
|
$36.0M
|
$15.1M
|
$23.5M
|
|
|
1
-
|
Q2 2018 adjusted for
the estimated gain of $21 million from July 6, 2018 sale of Impact
Mobile which will be recorded in Q3 2018.
|
The financial statements for the three-month and six-month
periods ending June 30, 2018 together
with management's discussion and analysis of these results have
been filed on SEDAR and are available on the Company's website at
www.dealnetcapital.com.
The Company will host a conference call to discuss these results
on August 21, 2018 commencing at
10:00 A.M. Eastern Time.
Conference Call Details:
Date:
|
Tuesday August 21,
2018
|
Time:
|
10:00 A.M. Eastern
Time
|
|
|
Dial-in
Number:
|
Local /
International: 416-764-8688
|
|
North American Toll
Free: 1-888-390-0546
|
|
|
Conference
ID:
|
74883807
|
|
|
Replay
Number:
|
Local /
International: 416-764-8677
|
|
North American Toll
Free: 1-888-390-0541
|
|
Replay Passcode :
883907#
|
|
|
Website:
|
To view the press
release or any additional financial information, please visit the
Investor Relations section of the Dealnet website at:
http://www.dealnetcapital.com/investors/
|
About Dealnet Capital Corp.
Dealnet is a specialty finance company servicing the
$20 billion home improvement finance
market through both dealer-based and direct homeowner-based
originations of secured finance assets (equipment leases and
loans). The company earns net finance income over the term of these
assets and from fee income derived from the transaction support
services that it provides to its dealer network. The Company also
uses its engagement platform to provide customer support services
on a contract basis to third-party institutions.
For additional information please visit www.sedar.com.
Neither the TSX Venture Exchange nor its Regulation Services
Provider (as that term is defined in policies of the TSX Venture
Exchange) accepts responsibility for the adequacy or accuracy of
this release.
Forward-looking Statements
This news release contains certain "forward-looking information"
within the meaning of applicable securities law. Forward looking
information is frequently characterized by words such as "plan",
"expect", "project", "intend", "believe", "anticipate", "estimate",
"may", "will", "would", "potential", "proposed" and other similar
words, or statements that certain events or conditions "may" or
"will" occur. These statements are only predictions.
Forward-looking information is based on the opinions and estimates
of management at the date the information is provided and is
subject to a variety of risks and uncertainties and other factors
that could cause actual events or results to differ materially from
those projected in the forward-looking information. For a
description of the risks and uncertainties facing the Company and
its business and affairs, readers should refer to the Company's
Management's Discussion and Analysis. The Company undertakes no
obligation to update forward-looking information if circumstances
or management's estimates or opinions should change, unless
required by law. The reader is cautioned not to place undue
reliance on forward-looking information.
SOURCE Dealnet Capital Corp.