Record Portfolio Growth and Income Before Taxes
TORONTO, May 8, 2018 – 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 first quarter ended March 31, 2018.
The Company generated record quarterly Income before tax, along with strong operating earnings of $8.3 million, compared to $8.0 million last year. Chesswood generated these record Canadian dollar results even though the U.S. exchange rate during the quarter (1.26:1) was significantly lower than in the first quarter of 2017 (1.32:1). The effect of the weaker U.S. dollar on operating income for the quarter was $490,000. Chesswood’s finance receivables grew to $750 million in the quarter, driven by record quarterly originations of $94 million, a 19% increase from $79 million in the first quarter of last year.
“Our first quarter results not only reflect record portfolio growth and excellent operating income but they also reflect an improvement in our U.S. delinquency markers that was better than expected,” said Barry Shafran, Chesswood’s President and CEO. “We continue to look with optimism on the business climate and activity, especially in the U.S., following the recent lowering of tax rates, the easing of regulations and the very low unemployment numbers,” added Shafran.
(in CDN $000’s, except EPS )
|For the Three Months
Ended March 31,
Adjusted Operating Income(1)
Increase (decrease) in Allowance
Mark-to-market Swaps/Caps Expense (Gain)
|Income before Taxes||$4,639||$8,427|
|Earnings Per Share – basic||$0.17||$0.33|
(1) See “Non-GAAP Measures” below.
While our financial results were negatively impacted by these two non-cash items this quarter, we’re pleased that our operating earnings before this effect and before the expenses from Tandem increased over the first quarter of last year” said Barry Shafran, Chesswood’s President and CEO. “We have chosen to remain focused on risk levels in our traditional business at this time in the business cycle while launching our new efforts in the vendor-channel of equipment finance, in the U.S. Tandem is the first provider of funding to this market that can truly offer its vendor partners proven in-house expertise in approving, funding and administering transactions in all credit tiers. This value proposition is attractive to current and prospective equipment vendor customers and is a competitive advantage that we intend to take advantage of” said Shafran.
Operating Income is not a recognized measure under International Financial Reporting Standards and does not have standard meanings. 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 2017 Annual Report and 2018 First Quarter Report for additional information concerning this measure and a reconciliation of this measure 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.
— 30 —
3801 Automation Way
Fort Collins, Colorado 80525