Accord Announces Second Quarter and First Half Earnings, Record Quarterly Revenue and Average Funds Employed and Announces Regular Quarterly Dividend


TORONTO, July 31, 2019 /CNW/ - Accord Financial Corp. (TSX – ACD) today released its financial results for the three and six months ended June 30, 2019.  The financial figures presented in this release are reported in Canadian dollars and have been prepared in accordance with International Financial Reporting Standards.

SUMMARY OF FINANCIAL RESULTS

 

Three Months Ended June 30

  Six Months Ended June 30

 

2019

2018

2019

2018

 

$

$

$

$

Average funds employed (millions)

388

255

367

242

Revenue (000's)

13,991

10,823

26,579

20,856

Earnings before income tax (000's)

2,912

2,592

4,848

4,000

Net earnings attributable to shareholders (000's)

2,222

2,363

3,865

3,580

Adjusted net earnings (000's) (note)

2,397

2,674

4,213

4,115

Earnings per common share (basic and diluted)

0.26

0.28

0.46

0.43

Adjusted earnings per common share (basic and diluted)

0.28

0.32

0.50

0.50

Book value per share (June 30)

   

$ 10.70

$ 9.68


Revenue increased by 29% to a quarterly record $13,991,000 in the second quarter compared to $10,823,000 last year mainly as a result of higher funds employed. Average funds employed were 52% higher at $388 million in the current quarter compared to $255 million last year. Funds employed at June 30, 2019 were $382 million.

Net earnings attributable to shareholders ("shareholders' net earnings") declined by $141,000 to $2,222,000 in the second quarter of 2019 compared to the $2,363,000 earned last year. Shareholders' net earnings declined mainly as a result of a higher income tax expense. Earnings per common share ("EPS") were 26 cents compared to 28 cents last year. Adjusted net earnings declined to $2,397,000 from the $2,674,000 earned in the second quarter of 2018. Adjusted EPS decreased to 28 cents compared to 32 cents in last year's second quarter.

Revenue rose 27% to a half year record $26,579,000 in 2019 compared to $20,856,000 last year mainly as a result of higher funds employed. Average funds employed in the first half of 2019 were 52% higher at $367 million.

Shareholders' net earnings in the first half of 2019 increased by $285,000 or 8% to $3,865,000 compared to $3,580,000 in 2018. Shareholders' net earnings rose mainly as a result of higher net revenue (revenue less interest expense) and a lower provision for losses.  EPS increased by 7% to 46 cents compared to 43 cents last year. Adjusted net earnings increased by $98,000 to $4,213,000 compared to the $4,115,000 earned in the first half of 2018. Adjusted EPS were 50 cents in the first half of 2019, the same as in 2018.

Commenting on 2019's results, the Company's President and CEO, Mr. Simon Hitzig, stated: "The second quarter marked the tenth straight quarter of growth in the Company's loan portfolio. On a year-over-year basis revenue and earnings before income tax increased in both the quarter and year-to-date periods. First half earnings per share of 46 cents helped boost book value per share to a record quarterly high of $10.70." 

Mr. Hitzig further added "To fund further growth, the Company is pleased to report that, after exercising the accordion feature in its credit facility, its banking syndicate approved a $75 million increase in its bank line. This amendment is expected to close shortly taking our bank credit limit to $367 million."

The Company's Board of Directors today declared a regular quarterly dividend of 9 cents per common share, payable September 3, 2019 to shareholders of record August 15, 2019.

About Accord Financial Corp.
Accord Financial Corp., founded in 1978, is one of North America's leading independent finance companies. Serving clients throughout the United States and Canada, Accord's flexible finance programs cover the full spectrum of asset-based lending, from receivables and inventory finance, to equipment and trade finance, to film and media finance. For 41 years, Accord has helped businesses manage their cash flows and maximize financial opportunities – keeping business liquid.

Note: Non-IFRS measures

The Company's financial statements have been prepared in accordance with IFRS. The Company uses a number of other financial measures to monitor its performance and believes that these measures may be useful to investors in evaluating the Company's operating performance and financial position. These measures may not have standardized meanings or computations as prescribed by IFRS that would ensure consistency between companies using these measures and are, therefore, considered to be non-IFRS measures. The non-IFRS measures presented in this press release are as follows:

1) Adjusted net earnings and adjusted EPS. The Company derives these measures from amounts presented in its IFRS prepared financial statements. Adjusted net earnings comprise shareholders' net earnings before stock-based compensation, business acquisition expenses (transaction costs and amortization of intangible assets) and restructuring expenses. Adjusted EPS (basic and diluted) is adjusted net earnings divided by the weighted average number of common shares outstanding (basic and diluted) in the period. Management believes adjusted net earnings is a more appropriate measure of operating performance as it excludes items which do not relate to ongoing operating activities. The following table provides a reconciliation of the Company's net earnings to adjusted net earnings:

 

  Three Months Ended June 30

   Six Months Ended June 30

 

2019

2018

2019

2018

 

$'000

$'000

$'000

$'000

Shareholders' net earnings:

2,222

2,363

3,865

3,580

Adjustments, net of tax:

       

Stock-based compensation

42

113

84

134

Business acquisition expenses

133

198

264

401

Adjusted net earnings

2,397

2,674

4,213

4,115


2) Book value per share – book value is shareholders' equity and is the same as the net asset value (calculated as total assets minus total liabilities) of the Company less non-controlling interests. Book value per share is the book value divided by the number of common shares outstanding as of a particular date.

3) Funds employed are the Company's finance receivables and loans, an IFRS measure. Average funds employed are the average finance receivables and loans calculated over a particular period.

SOURCE Accord Financial Corp.

For further information: please visit www.accordfinancial.com or contact: Stuart Adair, Senior Vice President, Chief Financial Officer, Accord Financial Corp., 602 - 40 Eglinton Avenue East, Toronto, ON M4P 3A2, (416) 961-0304 Ext. 207, sadair@accordfinancial.com


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