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Red Deer, Alberta--(Newsfile Corp. - November 24, 2021) - Rifco Inc. (TSXV: RFC) ("Rifco" or the "Company"), is pleased to announce its consolidated second quarter results for the period ended September 30, 2021.
Second Quarter Highlights
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On October 27, 2021, Rifco announced that it had entered into an arrangement agreement with Chesswood Group Limited (Chesswood) pursuant to which Chesswood will acquire all of the issued and outstanding common shares of Rifco by way of a statutory plan of arrangement under the Business Corporations Act (Alberta). Under the terms of the Agreement, each Rifco shareholder will receive consideration of $1.28 for each Rifco Share held, to be satisfied either in cash or Chesswood common shares.
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Rifco reported quarterly Adjusted Net Income before Taxes of $2.1M and $0.10 per share. Adjusted Net Income before Taxes removes the effects of the non-cash change in provision for impairment and one-time strategic review expenses. Net income including these items and taxes, was $2.1M and $0.10 per share.
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The quarterly Credit Spread Rate improved 16 basis points over the previous period from 13.32% to 13.48%. The Company believes that despite the impacts of COVID-19, the recent improvements in operations and current pricing model implemented alongside the custom credit model has contributed to improved Credit Spread.
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Originations in the quarter of $34.5M are a 206% increase over the same quarter last year. Originations also increased 9% from the $31.8M in the prior quarter. Originations are on track for a full recovery from those seen immediately following the pandemic outbreak.
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The Delinquency Rate (over 30 days) is at an exceptionally low level of 3.08%. Government support programs for those impacted by COVID-19 had an impact on the Company's Delinquency Rate. Loan modification and payment deferral programs implemented in response were mostly concluded by July 2020.
While the Company is cautiously optimistic about recent and near-term results, the economic forecast in this COVID-19 environment is uncertain.
Rifco Quarterly Comparative Results
| Statements of income | Current Quarter | Prior Quarter | Comparable Quarter | |||
| ($,000's, except per share, % of average loan receivables) | | | | | | |
| Average loan receivables for the period | 206,212 | 195,667 | 204,689 | |||
| Financial revenue | 9,033 | 17.52% | 8,450 | 17.27% | 8,947 | 17.48% |
| Credit losses | 2,084 | 4.04% | 1,929 | 3.95% | 1,660 | 3.24% |
| Credit Spread | 6,949 | 13.48% | 6,521 | 13.32% | 7,287 | 14.24% |
| Financial expenses | 2,243 | 4.35% | 2,201 | 4.50% | 2,458 | 4.80% |
| Adjusted Net Financial Income before Operating Expenses | 4,706 | 9.13% | 4,320 | 8.82% | 4,829 | 9.44% |
| Adjusted Operating Expenses | 2,641 | 5.13% | 2,497 | 5.10% | 2,534 | 4.95% |
| Adjusted Net Income before Taxes | 2,065 | 4.00% | 1,823 | 3.72% | 2,295 | 4.49% |
| Strategic review process | - | 0.00% | - | 0.00% | 18 | 0.04% |
| Decrease (increase) in provision for impairment | 724 | 1.40% | 1,138 | 2.33% | 439 | 0.86% |
| Net income before taxes | 2,789 | 5.40% | 2,961 | 6.05% | 2,752 | 5.39% |
| Income tax expense | (681) | (1.32%) | (674) | (1.38%) | (649) | (1.27%) |
| Net income | 2,108 | 4.08% | 2,287 | 4.67% | 2,103 | 4.12% |
| Weighted average number of outstanding shares at period end | 21,750 | 21,750 | 21,597 | |||
| Fully diluted basis | 21,758 | 21,750 | 21,597 | |||
| Adjusted Net Income before taxes per Common Share basic | $0.095 | $0.084 | $0.106 | |||
| Net income (loss) per common share basic | $0.097 | $0.105 | $0.097 | |||
Rifco, today, filed its quarterly financial statements and management discussion and analysis for the period ended September 30, 2021. The previously released financial statements and the related management's discussion and analysis can be viewed at www.sedar.com or at www.rifco.net.