TORONTO, March 13, 2019 – Chesswood Group Limited (“Chesswood” or “the Company”) (TSX: CHW), a North American commercial equipment finance provider for small and medium-sized businesses, today reported its results for the fourth quarter and year ended December 31, 2018.
“Once again we had an extremely busy year that culminated in our eighth successive year of record operating income and originations. If not for last year’s one-time $9.4 million tax recovery due to the U.S. Tax Cuts and Jobs Act, this year’s net earnings would also have been another record” said Barry Shafran, Chesswood’s President and CEO. “Our finance receivables exceeded $900 million for the first time, reflecting our annual originations record this year of $400 million, 16% ahead of last year’s originations” added Shafran.
“Our shareholders have relied on us for sustainable dividends for more than a decade. In 2018 we paid out $15.1 million in dividends, providing our shareholders with an annual yield of 7.65% based on our average share price in 2018 of $10.98. Just as importantly, the percentage of our free cash flow that we paid out in dividends was approximately 65% at the end of the fourth quarter” Shafran said.
This year’s results include in Operating Income the interest expense on $20 million of additional revolving debt that was used to retire the Company’s convertible debentures in early January 2018. Interest on the convertible debentures was not included in the calculation of Operating Income in prior years. The additional interest included in Operating Income in 2018 totaled approximately $900,000, or $225,000 a quarter.
(in CDN $000’s, except EPS)
|For the Three Months Ended
|For the Years Ended
|Earnings Per Share – basic(3)||$0.30||$0.76(3)||$1.28||$1.41(3)|
(1) – See “Non-GAAP Measures” below.
(2) – 2016 operating income includes $1.6 million of pre-tax income from Windset compared to $514K in 2017; while in Q4 of 2016, operating income includes $96K of pre-tax income from Windset compared to $193K in Q4 2017, as Windset winds down.
(3) – 2017 net income includes tax recovery of $9.4 million as a result of the revaluation of our U.S. subsidiaries’ net deferred tax liabilities due to the Tax Cuts and Jobs Act passed in December 2017.
Operating Income is not a recognized measure under International Financial Reporting Standards and does not have a standard meaning. Accordingly, this measure may not be comparable to similar measures presented by other issuers. Please refer to the Company’s Management Discussion and Analysis in Chesswood’s 2018 Annual Report for additional information concerning these measures and a reconciliation of these measures to the Company’s consolidated net income.
Through three wholly-owned subsidiaries in the U.S. and Canada, Chesswood Group Limited is North America’s only publicly-traded commercial equipment finance company focused on small and medium-sized businesses. Our Colorado-based Pawnee Leasing Corporation, founded in 1982, finances a highly diversified portfolio of commercial equipment leases and loans through relationships with over 600 independent brokers in the U.S. In Canada, Blue Chip Leasing Corporation has been originating and servicing commercial equipment leases and loans since 1996, and today operates through a nationwide network of more than 50 independent brokers. Located in Houston, Texas, Tandem Finance Inc. provides equipment financing to small and medium sized businesses in the U.S. through the equipment vendor channel. Based in Toronto, Canada, Chesswood’s shares trade on the Toronto Stock Exchange under the symbol CHW.
For more information contact:
Chesswood Group Limited
This press release contains forward-looking statements that involve a number of risks and uncertainties because they relate to events and depend on circumstances that will occur in the future. Many factors could cause actual results and developments to differ materially from those expressed or implied by these forward-looking statements. By its nature, this information is subject to inherent risks and uncertainties that may be general or specific and which give rise to the possibility that expectations, forecasts, predictions, projections or conclusions will not prove to be accurate, that assumptions may not be correct and that objectives, strategic goals and priorities will not be achieved. Additional information about the risks and uncertainties of the Company’s businesses and material factors or assumptions on which information contained in forward-looking statements is based is provided in its publicly filed documents, including the Company’s annual information form and management’s discussion and analysis of the financial condition and performance, which are available electronically through the System for Electronic Document Analysis and Retrieval at www.sedar.com.
NO STOCK EXCHANGE, SECURITIES COMMISSION OR OTHER REGULATORY AUTHORITY HAS APPROVED OR DISAPPROVED THE INFORMATION CONTAINED HEREIN.
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