All amounts are stated in Canadian dollars.
Terra Firma Capital Corporation (TSX VENTURE:TII) ("Terra Firma" or the
"Company"), a real estate finance company, today announced that income from
continuing operations for the nine months ended September 30, 2012 increased by
334% to $755,605, or $0.02 per basic and diluted share, from $174,019, or $0.01
per basic and diluted share in the comparative period in 2011. Interest income
grew 441% to $3,258,720 year to date in 2012 from $602,241 in the year earlier
period.
Income from continuing operations for the three months ended September 30, 2012
grew by 181% to $290,154, or $0.01 per basic and diluted share, from $103,160,
or $0.01 per basic and diluted share in the comparative period in 2011. Interest
income grew 399% to $1,234,250 for the last quarter in 2012 from $247,125 in the
year earlier period.
The substantial growth in Terra Firma's revenues and income from continuing
operations for the three and nine months ended September 30, 2012 as compared to
the year earlier periods 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 $32.1 million (with a weighted average
effective interest rate of 20.2%) as at September 30, 2012 versus $16.7 million
and $14.2 million as at December 31, 2011 and September 30, 2011, respectively.
Interest expense was higher for the three and nine months ended September 30,
2012 as compared to the year earlier periods, as a result of the issuance of
$10.1 million of 3-year, 7% convertible debentures in September of 2011 and an
increase in the syndicated portion of the Company's loan portfolio to $14.0
million as at September 30, 2012 from $4.8 million and $0.85 million as at
December 31 2011 and September 30, 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 third quarter and year to date results,"
commented Mr. Y. Dov Meyer, Terra Firma's CEO and President. "We continue to
forge new and strengthen existing relationships with experienced real estate
owners and complementary co-lenders - the drivers of growth, sustainability and
quality of our loan portfolio."
"We are well positioned to continue the origination of quality real estate
lending transactions and growth in revenue and earnings in the final quarter of
2012 and beyond," said Mr. Meyer.
2012 Third Quarter Operational Highlights:
-- During the three months ended September 30, 2012 Terra Firma completed
two new loan investments totaling $5.7 million on projects in Toronto
and Ottawa. These investments were funded through the repayment of loans
at maturity providing net proceeds of $1.7, from the Company's
syndication in the quarter providing cash proceeds of $2.1 and cash on
hand.
-- On September 20, 2012 the Company's Manager exercised its right and
notified the Company of its intention to terminate its Management
Agreement effective the close of business on December 31, 2012.
The Company's Management's Discussion & Analysis and Financial Statements as at
and for the three and nine months ended September 30, 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 September 30, 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 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 and nine months ended September 30, 2012 and 2011
(Unaudited)
Three months ended Nine months ended
September 30, September 30,
2012 2011 2012 2011
$ $ $ $
---------------------- ----------------------
Revenue
Interest 1,234,250 247,125 3,258,720 602,241
Earnings from joint ventures 19,567 18,746 58,500 199,410
---------------------- ----------------------
1,253,817 265,871 3,317,221 801,651
---------------------- ----------------------
Expense
General and administrative
expense 143,338 52,870 404,187 151,498
Stock based compensation 41,803 - 201,471 252,390
Interest expense 669,461 52,841 1,643,083 136,744
---------------------- ----------------------
854,602 105,711 2,248,741 540,632
---------------------- ----------------------
Income before income taxes 399,215 160,160 1,068,480 261,019
Income tax provision 109,061 57,000 312,875 87,000
---------------------- ----------------------
Income from continuing
operations 290,154 103,160 755,605 174,019
Loss from discontinued
operations - (194,299) - (194,770)
---------------------- ----------------------
Net income (loss) and
comprehensive income (loss) 290,154 (91,139) 755,605 (20,751)
---------------------- ----------------------
---------------------- ----------------------
Basic and diluted earnings
(loss) per share:
Continuing operations 0.01 0.01 0.02 0.01
Discontinued operations 0.00 (0.01) 0.00 (0.01)
---------------------- ----------------------
0.01 0.00 0.02 0.00
---------------------- ----------------------
---------------------- ----------------------
Weighted average number of
common shares outstanding -
basic and diluted 30,495,000 18,795,000 30,495,000 18,716,319
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 September 30, 2012 and December 31, 2011
(Unaudited)
September 30, December 31,
2012 2011
$ $
--------------- ---------------
Assets
Cash and cash equivalents 322,153 8,662,505
Interest and sundry receivables 815,268 752,402
Prepaid expenses and deposits 13,960 7,365
Loan and mortgage investments 32,096,902 16,724,774
Interests in joint ventures 3,812,721 1,073,319
Portfolio investment 950,000 -
--------------- ---------------
38,011,004 27,220,365
--------------- ---------------
--------------- ---------------
Liabilities
Accounts payable and accrued liabilities 1,082,556 682,186
Provision for discontinued operations 161,184 251,864
Unearned revenue 115,359 52,624
Income taxes payable 309,513 82,169
Deferred income taxes 13,627 10,260
Loans and mortgages payable 14,039,362 4,832,267
Debentures payable 10,085,201 10,061,869
--------------- ---------------
25,806,802 15,973,239
Shareholders' equity 12,204,202 11,247,126
--------------- ---------------
38,011,004 27,220,365
--------------- ---------------
--------------- ---------------
The notes contained in the Company's interim financial statements are an
integral part of these condensed statements.
FOR FURTHER INFORMATION PLEASE CONTACT:
Terra Firma Capital Corporation
Y. Dov Meyer
President & CEO
416.866.8986
ydmeyer@tfcc.ca
www.terrafirmacapital.ca
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