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Dealnet Reports Q2 2018 Financial Results

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Dealnet Reports Q2 2018 Financial Results

Canada NewsWire

  • Sale of Impact Mobile increases tangible net worth to $36 million
  • Balance sheet supports a portfolio of more than $350 million with liquidity for the foreseeable future

TORONTO, Aug. 20, 2018 /CNW/ - Dealnet Capital Corp. ("Dealnet" or the "Company") (TSX:DLS), reported today its financial results for the three-month and six-month periods ending June 30, 2018. All results are reported under International Financial Reporting Standards ("IFRS") and in Canadian dollars, unless otherwise specified. With the sale of Impact Mobile on July 6, 2018, the results of operations attributable to Impact Mobile have been segregated from the ongoing continuing business and presented as discontinued operations.

Including the income from discontinued operations, the net loss for the three-month period was $51 thousand ($0.00 per share) versus a net loss of $3.1 million ($0.01 per share) for the same period last year. For the three-month period ending June 30, 2018, the Company reported a loss from continuing operations of $1.4 million versus a loss of $4.0 million for the same period last year.  

Adjusting the loss from continuing operations of $1.4 million for the $823 thousand in net finance costs attributable to the $12 million of senior secured debentures which were redeemed subsequent to the end of the period, the adjusted loss from continuing operations was approximately $569 thousand inclusive of approximately $237 thousand of non-cash expenses.

"The sale of Impact Mobile in early July marked a critical inflection point for the turnaround of Dealnet Capital," said Brent Houlden, Dealnet's President and Chief Executive Officer. "This transaction gives Dealnet the opportunity to fund our operations through 2019 and beyond, allowing us to strategically focus on improving the profitability and growth of our consumer finance business. The future is bright." added Mr. Houlden.

Today, the Company reached an agreement to cancel 1,473,336 common shares to settle various outstanding amounts related to the January 2017 portfolio acquisition. The Board of Directors has also cancelled the Company's short-term incentive plan and 2018 bonuses will be set at the discretion of the Board.

Q2 2018 Financial Highlights

Portfolio Growth

As at June 30, 2018, Dealnet's portfolio of finance receivables increased to $174.3 million with 33,579 financing contracts in place up from $172.9 million and 33,165 contracts as at March 31, 2018.

Gross Profit

For the three-month period ending June 30, 2018, the Company reported gross profit from continuing operations of $3.0 million, an increase of 11 percent from the $2.7 million reported in the previous three-month period and an increase of 20 percent from the $2.5 million reported in the same period last year.                                                                                                  

Operating Expenses

Consolidated operating expenses from continuing operations decreased 31 percent to $4.4 million for the three-month period ending June 30, 2018 versus $6.3 million reported in the previous three-month period and a decrease of 33 percent from the $6.5 million reported for the same period last year.

Key Performance Indicators

The following table summarizes some of the Key Performance Indicators that the Company uses to measure the achievement of its business plan objectives:






Q2 2018

Q1 2018

Q2 2017





Finance Receivables

$174M

$173M

$170M

Organic Originations

$9.5M

$9.3M

$8.9M

Average Yield on Earning Assets

8.8%

8.9%

8.6%

Weighted Average Interest Expense

4.6%

4.5%

5.0%

Net Interest Margin

48%

49%

42%

Engagement Gross Margin

36%

18%

27%

Securitizations

$8.5M

$17.5M

$3.9M

Corporate Tangible Leverage

11.8

11.9

7.4

Tangible Net Worth

$15.3M

$15.1M

$23.5M

Adjusted Corporate Tangible Leverage1

4.7

11.9

7.4

Adjusted Tangible Net Worth1

$36.0M

$15.1M

$23.5M



1 -

Q2 2018 adjusted for the estimated gain of $21 million from July 6, 2018 sale of Impact Mobile which will be recorded in Q3 2018.

 

The financial statements for the three-month and six-month periods ending June 30, 2018 together with management's discussion and analysis of these results have been filed on SEDAR and are available on the Company's website at www.dealnetcapital.com.

The Company will host a conference call to discuss these results on August 21, 2018 commencing at 10:00 A.M. Eastern Time.

Conference Call Details:

Date: 

Tuesday August 21, 2018

Time:

10:00 A.M. Eastern Time



Dial-in Number:

Local / International: 416-764-8688


North American Toll Free: 1-888-390-0546



Conference ID:

74883807



Replay Number:

Local / International: 416-764-8677


North American Toll Free: 1-888-390-0541


Replay Passcode : 883907#



Website: 

To view the press release or any additional financial information, please visit the Investor Relations section of the Dealnet website at: http://www.dealnetcapital.com/investors/

 

About Dealnet Capital Corp.

Dealnet is a specialty finance company servicing the $20 billion home improvement finance market through both dealer-based and direct homeowner-based originations of secured finance assets (equipment leases and loans). The company earns net finance income over the term of these assets and from fee income derived from the transaction support services that it provides to its dealer network. The Company also uses its engagement platform to provide customer support services on a contract basis to third-party institutions.

For additional information please visit www.sedar.com.

Neither the TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.

Forward-looking Statements

This news release contains certain "forward-looking information" within the meaning of applicable securities law. Forward looking information is frequently characterized by words such as "plan", "expect", "project", "intend", "believe", "anticipate", "estimate", "may", "will", "would", "potential", "proposed" and other similar words, or statements that certain events or conditions "may" or "will" occur. These statements are only predictions. Forward-looking information is based on the opinions and estimates of management at the date the information is provided and is subject to a variety of risks and uncertainties and other factors that could cause actual events or results to differ materially from those projected in the forward-looking information. For a description of the risks and uncertainties facing the Company and its business and affairs, readers should refer to the Company's Management's Discussion and Analysis. The Company undertakes no obligation to update forward-looking information if circumstances or management's estimates or opinions should change, unless required by law. The reader is cautioned not to place undue reliance on forward-looking information.

SOURCE Dealnet Capital Corp.

View original content: http://www.newswire.ca/en/releases/archive/August2018/20/c4697.html

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