Vancouver, British Columbia--(Newsfile Corp. - January 18, 2021) -Solution Financial Inc. (TSXV: SFI) (the "Company") a leading provider of luxury automotive and yacht leasing in western Canada, today announced its financial results for the fourth quarter and year ending October 31, 2020.
Earnings Highlights for the Year End:
- Net income increased to a record $400,413 and Adjusted net income(1) increased to a record $1,059,391 since going public.
- Net revenue increased 48% over the prior year to a record $14,299,070.
- Total lease and finance portfolio grew 14.35% to $25,192,444 over the prior year.
"Our fourth quarter of 2020 saw monthly leasing and sales averaging approximately $2.8M per month and despite the drop in the number of international students returning to Canadian Universities in September, our volume of new immigrant and business owner leasing remained strong," began Bryan Pang, the Company's CEO. "For the last couple of months, we focused on expanding our leasing program into Ontario and are excited about the potential to serve what we see as the biggest market opportunity for our unique leasing product offering in Canada. To support this expansion, we are currently marketing a 5% convertible debenture that is convertible into common share at $0.50. We kept our conversion price at $0.50 per share because we want to maximize the potential for our investors to convert to equity and fully leverage the potential of our growing lease portfolio," concluded Bryan.
Financial Results
Solution is reporting a net income of $400,413, or $0.005, per share for the year ending October 31, 2020. This compares to a net income of $181,948 or $0.002 per share for the year ending October 31, 2019.
Adjusted net income for the year ending October 31, 2020 was $1,059,391(1) or $0.013 per share compared to $630,355 or $0.008 per share for the year ending October 31, 2019. Adjusted Net Income excludes the non-cash accretion interest expense related to the convertible debentures of $178,883, share-based compensation expense of $51,351 for stock compensation, income tax provision of $390,335 and amortization expense of $38,409.
Our operating cash flow for the year ended October 31, 2020 increased to $6,925,539 compared to $5,334,398 for the year ended October 31, 2019.
Lease Portfolio
At October 31, 2020 Solution had 334 vehicles in our In House lease portfolio with an average remaining lease term of 20.1 months, weighted by the net book value for each vehicle. At October 31, 2020, Solutions' leases were generating annualized rental revenue of approximately $6.35 million.
About Solution
Solution Financial commenced operations in 2004 and specializes in sourcing and leasing luxury and exotic vehicles, yachts and other high value assets. Solution works with a select group of automotive and marine dealerships providing lending solutions to clients who cannot obtain leasing terms with traditional Canadian financial institutions or other lenders. Typical customers include new immigrants, business owners and international students. Solution Financial provides a unique leasing experience whereby it partners with its clients to help them navigate the challenges of acquiring, insuring, maintaining and upgrading vehicles and luxury assets in Canada.
Note 1- Non-IFRS Financial Metrics
Solution provides all financial information in accordance with International Financial Reporting Standards ("IFRS"). To supplement our consolidated financial statements presented in accordance with IFRS, we are also providing with this press release, certain non-IFRS financial measures, including Adjusted Net Income to help investors better quantify our cash earnings. In calculating these non-IFRS financial measures, we have excluded certain transactions that are not necessarily indicative of our ongoing operations or do not impact cash flows.
Cautionary Statement Regarding Forward- Looking Statements
This press release contains "forward-looking information" as defined under applicable Canadian securities laws. This information includes, but is not limited to, statements concerning our objectives, our strategies to achieve those objectives, as well as statements made with respect to management's beliefs, plans, estimates, projections and intentions, and similar statements concerning anticipated future events, results, circumstances, performance or expectations that are not historical facts. Forward-looking information generally can be identified by the use of forward-looking terminology such as "outlook", "objective", "may", "will", "expect", "intend", "estimate", "anticipate", "believe", "should", "plans" or "continue", or similar expressions suggesting future outcomes or events. Such forward-looking information reflects management's current beliefs and is based on information currently available to management. Although forward-looking information contained in this press release is based upon what management believes are reasonable assumptions, there can be no assurance that actual results will be consistent with this forward-looking information. Certain statements included in this press release may be considered a "financial outlook" for purposes of applicable Canadian securities laws, and as such the financial outlook may not be appropriate for purposes other than this press release.
The forward-looking information contained in this press release is made as of the date of this press release and should not be relied upon as representing Solution's views as of any date subsequent to the date of this press release. Except as required by applicable law, management and Solution's Board of Directors undertake no obligation to publicly update or revise any forward-looking information, whether as a result of new information, future events or otherwise.
For further information please contact Sean Hodgins at (778) 318-1514.
ON BEHALF OF THE BOARD
(signed) "Bryan Pang"
Brian Pang
President, CEO and Director
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