Solution Financial Reports Q3 2022 Financial Results

Calgary, Alberta–(Newsfile Corp. – September 13, 2022) – Financial Solution Inc. (TSX: SFI) (OTCQX: SLNFF) (there “Company), one of Canada’s leading luxury automobile and yacht charter providers, today announced its financial results for the third quarter ending July 31, 2022.

Highlights of quarterly results:

  • Margins increased 36% from 26% in the prior year quarter, with revenue driven primarily by high-margin leasing versus lower-margin vehicle sales.

  • Net earnings were $376,928 compared to $406,455 in the prior year quarter

  • Adjusted net income(1) was $526,797, down slightly from $557,545 in the comparative quarter.

  • The total lease portfolio increased to $27,317,077 compared to $26,025,286 in the previous quarter.

“This quarter really showed the resilience of our business model as we remained focused on our core rental services despite the ongoing economic challenges,” said Bryan Pang, CEO of Solution. “In 2021, we capitalized on vehicle resale opportunities caused by the supply chain impact on the luxury automotive sector, while this past quarter we have been more focused on helping to our network of luxury dealerships to finance vehicle sales despite generally slower sales volumes.Our recently announced $15 million financing facility with ATB Financial is a significant milestone, giving us access to more resources to support more dealers in our existing and expanding markets. Our goals remain focused on growth in the luxury market using a disciplined approach that has been proven over the past 18 years – delivering market competitive rates at good customers, focusing on leasing the right vehicles, backed by good warranties, and proactively supporting customers and caring for them. shareholders well beyond the initial fundraising event. Revenues may remain lower during these economic downturns, but we remain committed to focusing on profitable operations and building long-term shareholder value,” concluded Bryan.

Solution reports net earnings of $376,928 or $0.004 per share for the quarter ending July 31, 2022. This compares to net earnings of $406,455 or $0.005 per share for the quarter ending July 31, 2021.

Adjusted net income, which is more reflective of actual cash earnings, for the quarter ending July 31, 2022 was $526,797(1) or $0.006 per share compared to $531,092 or $0.006 per share for the quarter ending July 31, 2021. Adjusted net income excludes non-cash accretion expense related to convertible debentures and right-of-use assets of $55,807, the provision for income taxes of $80,000 and amortization expense of $14,062.

Solution’s operating cash flow for the nine months ending July 31, 2022 decreased to $126,863 (net of operating lease asset disposals) compared to $3,109,803 in the comparative quarter of 2021. With the increase in prime interest rates over the past few months, the Company used excess cash to repay the operating line of financing to minimize interest expense.

Rental portfolio

As of July 31, 2022, Solution had 323 vehicles in its rental portfolio, a net decrease of 3 vehicles to bring the total rental portfolio to $27 million.

As of July 31, 2022, the average residual term of the leases in the portfolio is 1.9 years, weighted by the net book value of each vehicle. As of July 31, 2022, Solutions’ 323 leases generated annualized gross rental and lease revenues of approximately $7.5 million.

About the Solution

Solution Financial Inc. was founded in 2004 and is headquartered in Richmond, BC and Calgary, Alberta. Solution specializes in sourcing and leasing luxury and ultra luxury vehicles, yachts and other limited edition assets that tend to retain their value over time. The company launched an innovative rental program that has helped make Metro Vancouver the luxury car capital of North America. The solution uses a streamlined leasing model specializing in assets with limited supply and high resale value. This rental alternative has proven extremely popular with affluent immigrants, international students, and business owners who may have limited credit history in Canada or who prefer more flexible vehicle ownership options.

Note 1 – Non-IFRS financial indicators

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 flow. These measures are not recognized measures under IFRS and do not have any standardized meaning prescribed by IFRS and therefore are unlikely to be comparable to similar measures presented by other issuers. These measures should not be considered in isolation or as a substitute for analyzing our financial information reported in accordance with IFRS.

Caution Regarding Forward-Looking Statements

This press release contains “forward-looking information” as defined by applicable Canadian securities laws. Such information includes, but is not limited to, statements regarding our objectives, our strategies for achieving those objectives, as well as statements regarding management’s beliefs, plans, estimates, projections and intentions, and similar statements regarding events anticipated futures, results, circumstances, performances or expectations that are not historical facts. Forward-looking information can generally be identified by the use of forward-looking terminology such as “outlook”, “objective”, “may”, “should”, “expect”, “intend”, ” estimates”, “anticipates”, “believes”, “should”, “plans” or “continues”, or similar expressions suggesting future results or events. This forward-looking information reflects management’s current beliefs and is based on information currently available to management. Although the forward-looking information contained in this press release is based on what management believes to be reasonable assumptions, there can be no assurance that actual results will be consistent with such forward-looking information. Certain statements included in this press release may be considered “financial outlook” for purposes of applicable Canadian securities laws and, as such, the financial outlook may not be appropriate for purposes other than this release. Press.

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 to represent the opinions of Solution as of any date subsequent to the date of this press release. Except as required by applicable law, Solution’s management and 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 more information, please contact Sean Hodgins at (778) 318-1514.

ON BEHALF OF COUNCIL

(sign) “Bryan Pan
Brian Pan
President, CEO and Director

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To view the source version of this press release, please visit https://www.newsfilecorp.com/release/137060

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