Vancouver, British Columbia--(Newsfile Corp. - March 15, 2024) - Solution Financial Inc. (TSX: SFI) (the "Company") a leading provider of luxury and ultra luxury asset leasing in Canada, today announced its financial results for the first quarter ending January 31, 2024.
Earnings Highlights for the Quarter:
- Net income for the quarter was $21,171 compared to a net loss of $328,781 in the comparative quarter in 2023.
- Adjusted net income(1) increased to $112,604 compared to $77,272 in the comparative quarter.
- Revenue decreased to $3,087,791 compared to $5,105,308 in the comparative quarter.
- Total leasing portfolio decreased 4.4% to $24,459,091 during the quarter.
Operational Highlights for the Quarter:
- Finalized a new auto leasing program with partner dealerships rolling out in Q2 2024, aimed at supporting local consumers where recent increases in interest rates from existing lenders have made Solution's unique approach to leasing far more attractive to customers beyond the new immigrant and international student markets.
- In January 2024, the Company initiated a new luxury Corporate Leasing program aimed at providing guidance on optimizing and understanding executive auto leasing programs, with an emphasis on the newly increased CRA leasing allowances, corporate executive incentive strategies and personal usage considerations.
Bryan Pang, CEO added, "Our first quarter has been a period of strategic adaptation and proactive initiative, particularly in light of the challenges posed by tightening consumer lending impacting the Canadian auto market. These include rising interest rates and stringent lending criteria, which are now notably impacting local customers, including those with strong credit ratings. Historically, Solution Financial has primarily served new immigrants and international students. However, the current economic climate, combined with our robust balance sheet and exceptionally competitive interest rates, positions us uniquely to appeal to a broader, more traditional leasing consumers with high credit ratings."
"With this expanded market focus, we have been actively collaborating with our partner dealerships to introduce innovative programs," continued Bryan. "These are designed to leverage the growing opportunity presented by the changing market dynamics. We are optimistic that these initiatives will not only support our dealership partners in boosting vehicle sales but also drive significant growth for Solution Financial. We're enthusiastic about the potential of these new programs to generate strong returns and further our commitment to providing best-in-class leasing solutions."
Financial Results
Solution is reporting net income of $21,171 or $0.0002, per share for the quarter ending January 31, 2024. This compares to a net loss of $328,781 or $0.004 per share for the quarter ending January 31, 2023.
Adjusted net income, which is more reflective of actual cash earnings, for the quarter ending January 31, 2024, was $112,604(1) or $0.001 per share compared to $77,272 or $0.001 per share for the quarter ending January 31, 2023. Adjusted Net Income excludes the non-cash accretion expense related to the convertible debentures and right of use assets of $32,436, income tax provision of $8,100, amortization of $21,615, and provision for credit losses of $29,282.
Lease Portfolio
At January 31, 2024, Solution had 297 vehicles in its lease portfolio, a net decrease of 13 vehicles over the quarter to bring the total lease portfolio to $24.5 million.
At January 31, 2024 the average remaining lease term for the portfolio was 1.7 years, weighted by net book value for each vehicle. At January 31, 2024, Solutions' 297 leases were generating annualized gross rental and lease cash flows of approximately $6.5 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 luxury automotive and marine dealerships providing lending solutions to clients who prefer more flexible leasing options than those traditionally offered by banks and other lease providers. Typical customers include new immigrants, business owners and international students who tend to upgrade their vehicles more frequently than traditional lease agreements allow. Solution Financial provides a unique leasing experience whereby it partners with its clients to help source limited edition and difficult to acquire vehicles as well as providing white glove services to clients for insuring, maintaining, upgrading, and reselling their vehicles.
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. 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. These measures are not recognized measures under IFRS and do not have a standardized meaning prescribed by IFRS and are therefore unlikely to be comparable to similar measures presented by other issuers. These measures should not be considered in isolation nor as a substitute for analysis of our financial information reported under IFRS.
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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SOURCE: Solution Financial Inc.
