Terra Firma Capital Corporation (TSX VENTURE:TII) ("Terra Firma" or the
"Company"), a real estate finance company, today announced that net income for
the three months ended March 31, 2012 increased by $277,000 to $253,000, or
$0.01 per basic and diluted share, from a net loss of $24,000, or ($0.00) per
basic and diluted share in the comparative period in 2011. Interest income grew
442% to $966,000 in 2012 from $178,000 in 2011. All amounts are stated in
Canadian dollars.
The substantial growth in Terra Firma's revenues and net income for the three
months ended March 31, 2012 as compared to the year earlier period was driven
primarily by a substantial increase in mortgage and loan investments originated
and funded over the past twelve months. The Company's loan portfolio increased
to $25.3 million (with a weighted average effective interest rate of 19.3%) as
at March 31, 2012 versus $16.7 million and $2.2 million as at December 31, 2011
and March 31, 2011, respectively.
Interest expense was higher for the three months ended March 31, 2012 as
compared to the year earlier period, as a result of the issuance of $10.1
million of 3-year, 7% convertible debentures and an increase in the syndicated
portion of the Company's loan portfolio to $8.9 million as at March 31, 2012
from $4.8 million and $0.85 million as at December 31 2011 and March 31, 2011,
respectively. These funding sources were used to leverage the Company's
shareholders' equity to fuel the growth of its loan portfolio and increase the
return on its net investment, while limiting its overall portfolio risk profile.
"We are very pleased with our 2012 first quarter results," commented Mr. Y. Dov
Meyer, Terra Firma's CEO and President. "They reflect the momentum we have
created in the marketplace and our ability to originate accretive real estate
lending transactions, increasing our stature as an alternative lender."
"We believe we will continue to grow our loan portfolio, revenue and earnings
through the balance of 2012" concluded Mr. Meyer.
2012 First Quarter Operational Highlights:
-- During the three months ended March 31, 2012 Terra Firma completed three
new loan investments totaling $8.6 million on projects slated to develop
approximately 1,000 low rise residential units, the majority within
Toronto. These investments were funded from the Company's internal cash
resources and the syndication of a prior funded loan, which realized
cash proceeds of an additional $4.1 million.
-- In March of 2012 Terra Firma completed an equity investment in a 94 unit
mid-rise condominium development located in Toronto.
The Company's Management's Discussion & Analysis and Financial Statements as at
and for the quarter ended March 31, 2012 have been filed and are available on
SEDAR (www.sedar.com).
About Terra Firma
Terra Firma is a full service, publicly traded real estate finance company that
provides customized equity and debt solutions to the real estate industry. Our
focus is to arrange and provide financing with flexible terms to property owners
looking to improve or add to their existing real estate assets but who may be
limited by conventional bank financing, as well as to invest in quality
commercial and residential developments by proven real estate developers. Terra
Firma offers a full spectrum of real estate financing under the guidance of
strict corporate governance, clarity and transparency. Terra Firma is managed by
Counsel Asset Management, L.P., a wholly owned subsidiary of Counsel Corporation
(TSX:CXS). Counsel Corporation owned approximately 20.2% of the outstanding
common shares of Terra Firma as at March 31, 2012. For further information
please visit Terra Firma's website at www.terrafirmacapital.ca.
About Counsel Corporation
Counsel Corporation (TSX:CXS) is a financial services company that operates
through its individually branded businesses in residential mortgage lending,
distressed and surplus capital asset transactions, real estate finance and
private equity investment. For further information, please visit Counsel's
website at www.counselcorp.com.
This Press Release contains forward-looking statements with respect matters
concerning the business, operations, strategy and financial performance of Terra
Firma. These statements generally can be identified by use of forward looking
word such as "may", "will", "expects", "estimates", "anticipates", "intends",
"believe" or "could" or the negative thereof or similar variations. The future
business, operations and performance of Terra Firma could differ materially from
those expressed or implied by such statements. Such forward-looking statements
are qualified in their entirety by the inherent risks and uncertainties
surrounding future expectations. Forward-looking statements are based on a
number of assumptions which may prove to be incorrect. Additional, important
factors that could cause actual results to differ materially from expectations
include, among other things, general economic and market factors, local real
estate conditions, competition, changes in government regulation, dependence on
tenants' financial conditions, interest rates, the availability of equity and
debt financing, environmental and tax related matters, and reliance on key
personnel. There can be no assurances that forward-looking statements will prove
to be accurate, as actual results and future events could differ materially from
those anticipated in such statements. Accordingly, readers should not place
undue reliance on forward-looking statements. The cautionary statements qualify
all forward-looking statements attributable to Terra Firma and persons acting on
its behalf. Unless otherwise stated, all forward looking statements speak only
as of the date of this Press Release and Terra Firma has no obligation to update
such statements except as required by law.
Terra Firma Capital Corporation
Condensed Statements of Operations
For the three months ended March 31, 2012 and 2011
(Unaudited)
2012 2011
$ $
---------- ---------------
---------- ---------------
Revenue
Interest 966,287 178,201
Earnings from joint ventures 19,451 158,490
---------- ---------------
---------- ---------------
985,738 336,691
---------- ---------------
---------- ---------------
Expense
General and administrative expense 127,718 47,207
Stock based compensation 30,357 252,390
Interest expense 483,095 41,048
---------- ---------------
641,169 340,645
---------- ---------------
Income (loss) before income taxes 344,569 (3,954)
Income tax provision 91,352 19,414
---------- ---------------
Income (loss) from continuing operations 253,217 (23,368)
Loss from discontinued operations - (318)
---------- ---------------
Net income (loss) 253,217 (23,686)
---------- ---------------
---------- ---------------
Basic and diluted earnings (loss) per share
Continuing operations 0.01 0.00
Discontinued operations 0.00 0.00
---------- --------------
0.01 0.00
---------- ---------------
---------- ---------------
Weighted average number of common shares
outstanding - basic and diluted 30,495,000 18,556,333
The notes contained in the Company's interim financial statements are an
integral part of these condensed statements.
Terra Firma Capital Corporation
Condensed Statements of Financial Position
As at March 31, 2012 and December 31, 2011
(Unaudited)
March 31, December 31,
2012 2011
$ $
---------- ---------------
Assets
Cash and cash equivalents 3,900,515 8,662,505
Interest and sundry receivables 1,257,963 752,402
Prepaid expenses and deposits 16,979 7,365
Loan and mortgage investments 25,346,513 16,724,774
Interests in joint ventures 1,086,323 1,073,319
Portfolio investment 950,000 -
---------- ---------------
32,558,293 27,220,365
---------- ---------------
---------- ---------------
Liabilities
Accounts payable and accrued liabilities 1,593,610 682,186
Provision for discontinued operations 221,638 251,864
Unearned revenue 82,398 52,624
Income taxes payable 172,593 82,169
Deferred income taxes 11,188 10,260
Loans and mortgages payable 8,876,689 4,832,267
Debentures payable 10,069,477 10,061,869
---------- ---------------
21,027,593 15,973,239
Shareholders' equity 11,530,700 11,247,126
---------- ---------------
32,558,293 27,220,365
---------- ---------------
---------- ---------------
The notes contained in the Company's interim financial statements are an
integral part of these condensed statements.
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