TORONTO, August 8, 2016 – Chesswood Group Limited (the “Company” or “Chesswood”)
(TSX: CHW) announced today its intention to restate and refile its condensed consolidated
interim financial statements and related management’s discussion and analysis for the three
months ended March 31, 2016, to reflect the understatement of taxes payable related to the
recent sale of EcoHome Financial (“EcoHome”). It is expected that the restated financial
statements will be filed this week.
On February 18, 2016, the Company sold EcoHome for approximately $35.0 million and
reported a gain on sale of $8.9 million, net of income taxes of $1.2 million. The Company
has identified an understatement of tax expense recognized on this transaction in income
from discontinued operations of $2.09 million and a corresponding understatement of its net
tax liability in that amount. The restatement does not affect income from continuing
operations, adjusted EBITDA or free cash flow, which remain unchanged. The error is a
result of not properly reflecting Chesswood’s reduced tax cost base of EcoHome resulting
from the tax rollover amount elected by the entity from which EcoHome was purchased in
the first quarter of 2015.
Barry Shafran, Chesswood’s President and CEO stated ”While this is a result of an unusual
item in discontinued operations, we regret that we did not identify this issue earlier.”
The key items which will reflect adjustments in the restated financial statements are:
|(in CDN $000’s, except EPS )||For the Three Months
Ended March 31, 2016
|Income from continuing operations||$2,966||$2,966|
|Income from discontinued operations||$9,231||$7,141|
|Basic earnings per share from discontinued operations||$0.52||$0.40|
|Basic earnings per share||$0.69||$0.57|
|Diluted earnings per share from discontinued operations||$0.51||$0.39|
|Diluted earnings per share||$0.67||$0.55|
About Chesswood Group Limited
The Company operates primarily in the financial services industry with operating businesses
in both Canada and the U.S.
To learn more about Chesswood, visit www.ChesswoodGroup.com
— 30 —
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.
NO STOCK EXCHANGE, SECURITIES COMMISSION OR OTHER REGULATORY AUTHORITY HAS APPROVED OR DISAPPROVED THE INFORMATION CONTAINED HEREIN.
3801 Automation Way
Fort Collins, Colorado 80525