Vancouver, British Columbia--(Newsfile Corp. - January 27, 2022) - Solution Financial Inc. (TSX: SFI) (OTCQX: SLNFF) (the "Company"), a leading provider of luxury automotive and yacht leasing in Canada, today announced its financial results for the year ending October 31, 2021.
Earnings Highlights for the Year End:
Net income for the year more than doubled to $907,166 and Adjusted net income(1) increased to $1,322,182.
Net revenue increased 43% over the prior year to $20,452,133.
Total lease and finance portfolio increased 10.3% to $27,788,693 over the prior year.
"We are very proud of our year end operating results which really demonstrate our ability to adapt to market conditions. Despite the general slow down in the number of new vehicle leasing opportunities caused by the COVID 19 induced semiconductor problem impacting the auto industry, we capitalized on the shortage of vehicles in the market by proactively selling older vehicles in our portfolio at a premium which helped contribute to an even more profitable year than 2020," began Bryan Pang, Solution's CEO. "Like everyone, we are hopeful that COVID 19 will get under control soon and we can get back to more normal operations in the auto industry. We have now completed our licensing and expansion into Ontario and are well positioned to capitalize on this expanded market opportunity, however, the timing of improved market conditions across Canada remains unclear. We wish all of our customers and investors a safe and successful 2022," concluded Bryan.
Financial Results
Solution is reporting net income of $907,166, or $0.011, per share for the year ending October 31, 2021. This compares to net income of $400,413 or $0.005 per share for the year ending October 31, 2020.
Adjusted net income, which is more reflective of actual cash earnings, for the year ending October 31, 2021, was $1,362,231(1) or $0.016 per share compared to $1,059,391 or $0.013 per share for the year ending October 31, 2020. Adjusted Net Income excludes the non-cash accretion expense related to the convertible debentures and right of use assets of $94,907, income tax provision of $244,000, share-based compensation expense of $73,625 and amortization expense of $42,533.
Solution's operating cash flow for the year ending October 31, 2021 decreased moderately from $6,925,539 to $6,248,917 during the year.
Lease Portfolio
At October 31, 2021, Solution had 342 vehicles in its lease portfolio, a net increase of 8 vehicles but amounting to $2,596,249 of value during the year as a result of the resale of a number of older vehicles in the Company's lease portfolio to bring the total lease portfolio to $27.8 million.
At October 31, 2021 the average remaining lease term for the portfolio was 1.8 years, weighted by net book value for each vehicle. At October 31, 2021, Solutions' 342 leases were generating annualized gross rental and lease revenue of approximately $8.2 million.
About Solution
Solution Financial commenced operations in 2004 and specializes in sourcing and leasing luxury and exotic vehicles, yachts and other high value assets. Solution works with a select group of luxury automotive and marine dealerships providing lending solutions to clients who prefer more flexible leasing options than those traditionally offered by banks and other lease providers. Typical customers include new immigrants, business owners and international students who tend to upgrade their vehicles more frequently than traditional lease agreements allow. Solution Financial provides a unique leasing experience whereby it partners with its clients to help source limited edition and difficult to acquire vehicles as well as providing white glove services to clients for insuring, maintaining, upgrading, and reselling their vehicles.
Note 1- Non-IFRS Financial Metrics
Solution provides all financial information in accordance with International Financial Reporting Standards ("IFRS"). To supplement our consolidated financial statements presented in accordance with IFRS, we are also providing with this press release, certain non-IFRS financial measures, including Adjusted Net Income. In calculating these non-IFRS financial measures, we have excluded certain transactions that are not necessarily indicative of our ongoing operations or do not impact cash flows. These measures are not recognized measures under IFRS and do not have a standardized meaning prescribed by IFRS and are therefore unlikely to be comparable to similar measures presented by other issuers. These measures should not be considered in isolation nor as a substitute for analysis of our financial information reported under IFRS.
This press release contains "forward-looking information" as defined under applicable Canadian securities laws. This information includes, but is not limited to, statements concerning our objectives, our strategies to achieve those objectives, as well as statements made with respect to management's beliefs, plans, estimates, projections and intentions, and similar statements concerning anticipated future events, results, circumstances, performance or expectations that are not historical facts. Forward-looking information generally can be identified by the use of forward-looking terminology such as "outlook", "objective", "may", "will", "expect", "intend", "estimate", "anticipate", "believe", "should", "plans" or "continue", or similar expressions suggesting future outcomes or events. Such forward-looking information reflects management's current beliefs and is based on information currently available to management. Although forward-looking information contained in this press release is based upon what management believes are reasonable assumptions, there can be no assurance that actual results will be consistent with this forward-looking information. Certain statements included in this press release may be considered a "financial outlook" for purposes of applicable Canadian securities laws, and as such the financial outlook may not be appropriate for purposes other than this press release.
The forward-looking information contained in this press release is made as of the date of this press release and should not be relied upon as representing Solution's views as of any date subsequent to the date of this press release. Except as required by applicable law, management and Solution's Board of Directors undertake no obligation to publicly update or revise any forward-looking information, whether as a result of new information, future events or otherwise.
For further information please contact Sean Hodgins at (778) 318-1514.
ON BEHALF OF THE BOARD
(signed) "Bryan Pang" Brian Pang President, CEO and Director
Neither TSX nor its Regulation Services Provider (as that term is defined in the policies of the Exchange) accepts responsibility for the adequacy or accuracy of this release.
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