PRESS RELEASE

Accord Announces Strong Third Quarter and First Nine Months Earnings.
Record Quarterly Revenue and Book Value Per Share.
Announces Regular Quarterly Dividend.

Toronto – October 30, 2019: Accord Financial Corp. (TSX – ACD) today released its financial results for the three and nine months ended September 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 Sept. 30

Nine Months Ended Sept. 30


2019

2018

2019

2018


$

$

$

$

Average funds employed (millions)

383

283

373

256

Revenue (000’s)

15,299

13,120

41,878

33,976

Earnings before income tax (000’s)

4,063

3,105

8,911

7,104

Net earnings attributable to shareholders (000’s)

3,237

2,616

7,102

6,195

Adjusted net earnings (000’s) (note)

2,862

2,842

7,075

6,957

Earnings per common share (basic and diluted)

0.38

0.31

0.84

0.75

Adjusted earnings per common share (basic and diluted)

0.34

0.34

0.84

0.84

Book value per share (September 30)



$ 11.07

$ 9.82


Revenue increased by 17% to a quarterly record $15,299,000 in the third quarter compared to $13,120,000 last year as a result of higher funds employed. Average funds employed were 35% higher at $383 million in the current quarter compared to $283 million last year. Funds employed at September 30, 2019 were $385 million.

Net earnings attributable to shareholders (“shareholders’ net earnings”) rose by 24% or $621,000 to $3,237,000 in the third quarter of 2019 compared to the $2,616,000 earned last year. Shareholders’ net earnings rose as a result of a higher net revenue (revenue less interest expense), a lower provision for losses and reduced business acquisition expenses. Earnings per common share (“EPS”) were 38 cents compared to 31 cents last year. Adjusted net earnings increased to $2,862,000 from the $2,842,000 earned in the third quarter of 2018. Adjusted EPS remained unchanged at 34 cents in the current quarter compared to last year.

Revenue rose by 23% to a nine months record $41,878,000 in 2019 compared to $33,976,000 last year mainly as a result of higher funds employed. Average funds employed in the first nine months of 2019 increased by 46% to $373 million.

Shareholders’ net earnings in the first nine months of 2019 increased by 15% or $907,000 to $7,102,000 compared to $6,195,000 in 2018. Shareholders’ net earnings rose for reasons noted above. EPS increased by 12% to 84 cents compared to 75 cents last year. Adjusted net earnings increased by $118,000 to $7,075,000 compared to the $6,957,000 earned in the first nine months of 2018. Adjusted EPS remained unchanged at 84 cents in the first nine months of 2019 compared to last year.

Commenting on 2019’s results, the Company’s President and CEO, Mr. Simon Hitzig, stated: “Accord’s growth path continued through the third quarter, with the loan portfolio, revenue and net earnings showing strong year-over-year growth. First nine months earnings per share of 84 cents drove book value per share to a record high of $11.07. During the quarter, Accord’s financial position was strengthened by exercising the accordion feature in its bank facility, which increased the Company’s facility by $75 million to $367 million. In addition, Concentra Bank invested $5 million in a private convertible debenture issue as part of an exciting strategic alliance. Accord’s capacity for portfolio growth has never been stronger.”

The Company’s Board of Directors today declared a regular quarterly dividend of 9 cents per common share, payable December 2, 2019 to shareholders of record November 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, including: factoring, inventory finance, equipment finance, trade finance and film/media finance. For 41 years, Accord has simplified access to capital, helping businesses seize opportunity and drive success.

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


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 Sept. 30

Nine Months Ended Sept. 30


2019

2018

2019

2018


$’000

$’000

$’000

$’000

Shareholders’ net earnings:

3,237

2,616

7,102

6,195

Adjustments, net of tax:





Stock-based compensation

48

34

132

169

Business acquisition expenses

(423)

192

(159)

593

Adjusted net earnings

2,862

2,842

7,075

6,957


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.

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