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 released its financial results
for the three and nine months ended September 30, 2013.
THIRD QUARTER 2013 HIGHLIGHTS:
-- Total revenue is $2.2 million, an increase of $892,000 or 70%, compared
to the same period last year.
-- Total assets increased by 49% to $67.6 million from $45.4 million at
September 30, 2012.
"I am pleased to announce that our net income has increased by 46% for the
quarter ending September 30, 2013 compared to the same period last year,"
commented Y. Dov Meyer, President and Chief Executive Officer. "Our growth in
revenue and loan and Mortgage investments over the last year is reflective of
our continued focus on establishing our brand in the marketplace and due to the
recent changes in Terra Firma; our performance is expected to remain strong. We
have successfully completed the internalization of management and our growth in
revenue has more than offset the incremental cost of the internalization. I
welcome Mr. John Kaplan as our new Chairman of the Board and am confident that
together with him we will further enhance Terra Firma's profitability and
presence in the market," he further said.
Results of operations - three months ended September 30, 2013
Net income in the third quarter ended September 30, 2013 was $423,000 or $0.01
per basic and diluted share, compared to $290,000, or $0.01 per basic and
diluted share, in the third quarter ended September 30, 2012. General and
administrative expenses for the third quarter ended September 30, 2013 increased
to $353,000, compared to $143,000 for the third quarter ended September 30,
2012.
Interest and fee income for the third quarter ended September 30, 2013
aggregated $2.1 million, an increase of 67% over the $1.2 million in the same
period in the previous year, and an increase of 12% over the $1.8 million in the
second quarter ended June 30, 2013.
Interest expense for the third quarter ended September 30, 2013 was $1.1
million, compared to $682,000 for the comparative period last year and in line
with $1.2 million for the second quarter ended June 30, 2013. This represents
the growth of our business and the increase in syndication capital to fund the
investment activities.
The company's loan and mortgage investments increased from $32.0 million at
December 31, 2012 to $45 million at September 30, 2013, an increase of 41%. The
weighted average effective interest rate in the mortgage investment portfolio at
September 30, 2013 was 19.5% compared to 19.9% at December 31, 2012.
Subsequent Event
On October 9, 2013, Mr. John Kaplan, indirectly, through a wholly owned
subsidiary acquired 6,158,376 Shares of the Company in block trade to bring his
ownership in the Company to 19.99% of the issued and outstanding Shares of the
Company. Concurrently, Mr. Allan Silber, the Company's chairman and Director Mr.
Morris Perlis have resigned from the Company's Board of Directors and John
Kaplan was appointed Director and Chairman.
The Company's Management's Discussion & Analysis and Financial Statements as at
and for the three and nine months ended September 30, 2013 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. For further information
please visit Terra Firma's website at www.terrafirmacapital.ca.
The TSXV has neither approved nor disapproved the contents of this press
release. The TSXV does not accept responsibility for the adequacy or accuracy of
this press release.
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
Consolidated Statements of Income and Comprehensive Income
For the three and nine months ended September 30, 2013 and 2012
(Unaudited)
---------------------------------------------------------------------------
Three months ended Nine months ended
----------------------- -----------------------
September September September September
30, 2013 30, 2012 30, 2013 30, 2012
---------------------------------------------------------------------------
Revenue
Interest and fees earned $ 2,063,541 $ 1,234,251 $ 5,489,936 $ 3,258,720
Rental income 113,262 49,607 335,916 148,845
---------------------------------------------------------------------------
2,176,803 1,283,858 5,825,852 3,407,565
Expenses
Property operating costs 182,784 17,512 251,637 52,563
General and
administrative expenses 353,130 143,385 1,093,216 404,348
Share based compensation 9,512 41,803 41,857 201,471
Interest expense 1,061,686 681,942 3,156,270 1,680,703
---------------------------------------------------------------------------
1,607,112 884,642 4,542,980 2,339,085
Income before income taxes 569,691 399,216 1,282,872 1,068,480
Income tax provision 146,792 109,061 331,071 312,875
---------------------------------------------------------------------------
Net income and
comprehensive income $ 422,899 $ 290,155 $ 951,801 $ 755,605
---------------------------------------------------------------------------
Earnings per share - basic
and diluted $ 0.01 $ 0.01 $ 0.03 $ 0.02
---------------------------------------------------------------------------
Terra Firma Capital Corporation
Consolidated Statements of Financial Position
As at September 30, 2013 and December 31, 2012
(Unaudited)
---------------------------------------------------------------------------
September 30, December 31,
2013 2012
---------------------------------------------------------------------------
Assets
Cash and cash equivalents $ 2,315,933 $ 3,223,291
Restricted cash 10,396,708 -
Amounts receivable and prepaid expenses 1,221,359 2,396,180
Loan and mortgage investments 45,123,781 31,996,731
Investment properties 7,622,930 7,834,576
Portfolio investment 950,000 950,000
---------------------------------------------------------------------------
Total assets $ 67,630,711 $ 46,400,778
---------------------------------------------------------------------------
Liabilities
Accounts payable and accrued liabilities $ 1,122,288 $ 1,192,616
Advance deposits from investors 9,790,593 -
Provision for discontinued operations 352,972 445,957
Unearned income 176,748 16,965
Income taxes payable - 474,297
Deferred income taxes 16,496 15,602
Loans and mortgages payable 32,285,157 21,406,070
Convertible debentures 10,116,853 10,093,325
---------------------------------------------------------------------------
Total liabilities 53,861,107 33,644,832
---------------------------------------------------------------------------
Shareholders' Equity
Share capital $ 10,782,995 $ 10,757,405
Contributed surplus 609,406 573,139
Retained earnings 2,377,203 1,425,402
---------------------------------------------------------------------------
Total shareholders' equity 13,769,604 12,755,946
---------------------------------------------------------------------------
---------------------------------------------------------------------------
Total liabilities and Shareholders' Equity $ 67,630,711 $ 46,400,778
---------------------------------------------------------------------------
FOR FURTHER INFORMATION PLEASE CONTACT:
Terra Firma Capital Corporation
Dov Meyer
President and Chief Executive Officer
416.866.8986
ydmeyer@tfcc.ca
Terra Firma Capital Corporation
Mano Thiyagarajah
Chief Financial Officer
416.866.3168
mthiyagarajah@tfcc.ca
www.tfcc.ca
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