TORONTO--(BUSINESS WIRE)--Axis Auto Finance Inc. ("Axis" or the "Company") (TSX: AXIS), a financial technology company changing the way Canadians purchase and finance used vehicles, today announced financial results for the third quarter of fiscal 2024 ending March 31, 2024, and provides a Strategic Review update.
Q3 2024 Financial Highlights
- Total originations of $21.2 million, consisting of $4.5 million in automotive originations and $16.7 million in equipment originations;
- Revenues of $9.7 million in the quarter, unchanged from prior year;
- Adjusted loss(1) of ($1.4) million as compared to Adjusted loss(1) of ($3.9) million in prior year; and
- Net loss of ($2.1) million, as compared to a net loss of ($4.7) million in the third quarter of fiscal 2023.
For the quarter ending March 31, 2024, auto loan originations were $4.5 million, down from $32.4 million in auto loan originations in the third quarter of 2023, as credit and underwriting parameters continued to be tightened. The $4.5 million in third quarter automotive loan originations were entirely owned and on balance sheet, as Axis did not originate any near prime volumes managed for Westlake Financial Services ("Westlake"). In comparison, the Company recorded $16.7 million Westlake volumes originated in the same quarter of fiscal 2023.
Equipment finance origination volumes in the quarter were $16.7 million, a 21.9% decline from $21.3 million in the comparable quarter of 2023. Third quarter originations consisted of $5.6 million owned and on balance sheet, with $11.1 million being brokered for third parties or originated for syndication partners.
Revenues for the quarter were $9.7 million, unchanged from the third quarter of prior year. Automotive annualized realized credit loss rate(2) for the quarter was 16.05%, an increase from 15.38% during the same quarter of the prior year, while equipment finance annualized realized credit loss rate(2) for the quarter as 2.87%, an increase from nil in the prior year.
Adjusted loss(1) for the quarter was ($1.4) million, or ($0.012) per share, as compared to Adjusted loss of ($3.9) million or ($0.032) per share for the third quarter of 2023. The Company recorded a Net loss for the quarter of ($2.1) million or ($0.017) per share, as compared to net loss of ($4.7) million or ($0.039) per share in the third quarter of 2023.
Axis Reconciliation(3) of Net Income (Loss) to Adjusted Earnings (Loss) - Third Quarter
Q3 2024 | Q3 2023 | |
Net income / (loss), as reported | (2,080,159) | (4,714,593) |
Adjustments: | ||
Non-cash interest | 302,056 | 341,046 |
Depreciation | 258,699 | 175,201 |
Amortization | 133,190 | 167,001 |
Acquisitions and integration | - | 8,823 |
Stock based compensation | 53,444 | 161,354 |
IFRS-16 lease expense | (58,536) | (74,395) |
Adjusted Earnings (Loss) | (1,391,306) | (3,935,563) |
Axis Reconciliation(3) of Net Income (Loss) to Adjusted Earnings (Loss) - Year to Date
YTD 31-Mar-2024 | YTD 31-Mar-2023 | |
Net Income (Loss), as reported in financial statements | (5,377,339) | (6,090,886) |
Adjustments: | ||
Non-cash interest | 803,143 | 930,394 |
Depreciation | 601,577 | 575,535 |
Amortization | 431,279 | 523,326 |
Acquisitions and integration | 280,673 | 31,697 |
Stock-based compensation | 111,630 | 437,121 |
IFRS-16 lease expense | (207,533) | (252,430) |
Adjusted Earnings (Loss) | (3,356,570) | (3,845,243) |
Strategic Review Update
The Company has entered into non-binding letters of intent with two separate, unrelated parties for potential sales of the auto finance and equipment finance businesses. The counterparties are in the process of completing their due diligence. Axis management hope to be in position to enter into definitive agreements in respect to the auto finance and equipment finance business by the fiscal year ended June 30, 2024.
There can be no assurances that either or both of the transactions will be completed or that any successful transaction will result from the strategic process. The company will provide further updates on the process as developments warrant.
About Axis Auto Finance
Axis is a fintech lender providing alternative used vehicle financing options to non-prime borrowers. Axis loans are offered through over 3,000 automotive dealers nationwide. Approximately 30% of Canadians (Source: Equifax) that have credit scores in the non-prime range. All Axis auto loans report to the credit bureau, resulting in over 70% of customers seeing a significant improvement of their credit scores. Further information on the Company can be found at https://www.axisfinancegroup.com/investors-press-releases/.
(1) Adjusted loss is a non-IFRS measure as defined in the Company's MD&A, which is published on Sedar. Refer to pages 5 and 6 of the MD&A, that is incorporated by reference.
(2) Annualized realized credit loss rate is a non-IFRS measure as defined in the Company's MD&A which is published on Sedar. Refer to pages 5 and 6 of the MD&A, that is incorporated by reference.
(3) The reconciliation from Net Income (Loss) to Adjusted Earnings (Loss) for the current quarter and for the full fiscal year is shown on page 17 of the Company's MD&A, which includes the basis for adjustments.
Non-IFRS Measures
The Company's audited consolidated financial statements have been prepared in accordance with International Financial Reporting Standards ("IFRS") as issued by the International Accounting Standards Board ("IASB") and the accounting policies we adopted in accordance with IFRS. Non-IFRS measures are not standardized financial measures under the financial reporting framework used to prepare the financial statements of the Company to which the non-IFRS measures relate and might not be comparable to similar financial measures disclosed by other issuers.
The Company believes that certain Non-IFRS Measures can be useful to investors because they provide a means by which investors can evaluate the Company's underlying key drivers and operating performance of the business, exclusive of certain adjustments and activities that investors may consider to be unrelated to the underlying economic performance of the business of a given period. A full description of these measures can be found in the Management Discussion & Analysis that accompanies the financial statements for the corresponding period, which is published on Sedar.
The TSX Exchange has neither approved nor disapproved the contents of this press release. Neither the Exchange nor its Regulation Services Provider (as that term is defined in the policies of the Exchange) accepts responsibility for the adequacy or accuracy of this release.
Contacts
Axis Auto Finance Inc.
Todd Hudson
CEO
(416) 633-5626
ir@axisautofinance.com
