Vancouver, British Columbia–(Newsfile Corp. – June 14, 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 second quarter ending April 30, 2022.
Earnings Highlights for the Quarter:
- Revenues for the quarter increased moderately to $5,610,046 compared to $5,581,297 during the prior comparative quarter.
- Net income remained relatively consistent at $203,054 compared to $199,695 during the prior comparative quarter.
- Adjusted net income(1) increased to $263,690 from $239,094, an increase of 9% over the prior comparative quarter.
- Total lease portfolio decreased to $26,025,284 compared to $27,663,008 during the prior quarter.
“Business remained very consistent through our second quarter of 2022,” began Bryan Pang, Solution’s CEO. “The demand for luxury cars remains high in all our serviced markets with the continued shortage of new vehicle releases being an ongoing challenge across the luxury auto industry. We remain focused on supporting our existing dealerships and capitalizing on resale opportunities which contributed to our year-over-year revenue growth. We were happy with the increased revenue; however, unit volumes were expectedly below normal in comparison to prior years and will likely remain this way until the semiconductor and supply chain issues impacting luxury automobile manufacturers are resolved. Capitalizing on this slow down, we enhanced our lease administration system with several new reporting capabilities and formally rolled out revisions to our lease agreements to further strengthen the Company’s security interests in its lease asset portfolio. These measures are all intended to strengthen the Company’s ability to obtain banking and debt facilities for future leasing opportunities. We will continue to focus on operating profitably while preparing to meet and support the growing demand in the luxury car industry in Canada,” concluded Bryan.
Solution is reporting net income of $203,054, or $0.002, per share for the quarter ending April 30, 2022. This compares to net income of $199,695 or $0.002 per share for the quarter ending April 30, 2021.
Adjusted net income, which is more reflective of actual cash earnings, for the quarter ending April 30, 2022, was $275,827(1) or $0.003 per share compared to $239,094 or $0.003 per share for the quarter ending April 30, 2021. Adjusted Net Income excludes the non-cash accretion expense related to the convertible debentures and right-of-use assets of $15,636, income tax provision of $45,000 and amortization expense of $12,137.
Solution’s operating cash flow for the quarter ending April 30, 2022 decreased moderately to $2,042,659 compared to $2,589,176 during the first quarter of 2021.
At April 30, 2022, Solution had 320 vehicles in its lease portfolio, a net decrease of 6 vehicles to bring the total lease portfolio to $26 million.
At April 30, 2022, the average remaining lease term for the portfolio was 1.9 years, weighted by net book value for each vehicle. At April 30, 2022, Solutions’ 320 leases were generating annualized leasing revenues of approximately $7.5 million.
Solution Financial Inc. was founded in 2004 and is headquartered in Richmond, British Columbia, Canada. Solution specializes in sourcing and leasing luxury and ultra luxury vehicles, yachts, and other limited-edition assets that tend to hold their value over time. The company pioneered an innovative leasing program that has helped make Metro Vancouver the luxury car capital of North America. Solution utilizes a unique leasing model that contains elements of both a rental and loan agreement that gives consumers more flexibility to upgrade or downgrade their vehicles more quickly than traditional automobile leases. This leasing alternative has proven extremely popular with affluent immigrants, international students, and business owners who may have limited credit histories in Canada or prefer more flexible vehicle ownership options.
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.
Cautionary Statement Regarding Forward- Looking Statements
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“
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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