Seventh Consecutive Year of Record
Operating Income and Portfolio Size
Strong
4th Quarter Results
TORONTO, March 12, 2018 /CNW/ - Chesswood Group Limited
("Chesswood" or "the Company") (TSX: CHW), a North American
commercial equipment finance provider for small and medium-sized
businesses, today reported its results for the fourth quarter and
year ended December 31, 2017.
The Company generated operating earnings of $8.0 million in the quarter and $32.1 million for the year, compared to
$6.0 million and $30.3 million respectively, last year. The
results for the prior year included $1.1
million of greater operating earnings from Windset Capital,
which has been wound down in 2017.
"Chesswood once again enjoyed a record year by most financial
measures including originations, total portfolio size, finance
margin and operating income," said Barry
Shafran, Chesswood's President and CEO. "Our gross finance
receivables reached almost $700
million at year-end, and while our net income was also a
record at $25.4 million. Our fourth
quarter operating earnings of $8.0
million were $2.0 million over
last year's fourth quarter results and were helped significantly by
our very effective collections efforts. Our fourth quarter
and annual net income benefited from a $9.4
million one-time recovery of deferred taxes as a result of
the reduction in the U.S. corporate income tax rates from the Tax
Cuts and Jobs Act," added Shafran.
Chesswood will benefit directly from the new lower U.S.
corporate income tax rates in 2018 as our largest subsidiary,
Pawnee Leasing Corporation, is a U.S. taxpayer. The Company
estimates that based on 2017 taxable income, the 13% lower U.S.
corporate tax rate would have generated an increase in net income
of approximately $3.0 million.
Financial
Highlights
|
For the Three
Months Ended
|
|
For the Years
Ended
|
(in CDN $000's,
except EPS)
|
December
31,
|
|
December
31,
|
|
2017
|
2016
|
|
2017
|
2016
|
|
|
|
|
|
|
Operating
Income(1)(2)
|
$8,018
|
$5,979
|
|
$32,075
|
$30,310
|
|
|
|
|
|
|
Net
Income(2)
|
$13,798(3)
|
$5,103(2)
|
|
$25,431(3)
|
$24,278(2)(4)
|
|
|
|
|
|
|
Adjusted
EBITDA(1)(2)
|
$8,010
|
$6,097
|
|
$31,860
|
$31,031
|
|
|
|
|
|
|
Earnings Per Share -
basic
|
$0.76(3)
|
$0.28
|
|
$1.41(3)
|
$1.36(4)
|
(1)
|
-
|
See "Non-GAAP
Measures" below
|
(2)
|
-
|
2016 operating income
includes $1.6 million of pre-tax income from Windset compared to
$514K in 2017; while in Q4 of 2016, operating income includes $96K
of pre-tax income from Windset compared to $193K in Q4 2017, as
Windset winds down
|
(3)
|
-
|
2017 net income
includes tax recovery of $9.4 million as a result of the
revaluation of our U.S. subsidiaries' net deferred tax
liabilities due to the Tax Cuts and Jobs Act passed in December
2017
|
(4)
|
-
|
2016 net income
includes $6.7 million gain on the sale of EcoHome
Financial
|
Non-GAAP Measures
Adjusted EBITDA and Operating Income are not recognized measures
under International Financial Reporting Standards and do not have
standard meanings. Accordingly, these measures may not be
comparable to similar measures presented by other issuers. Please
refer to the Company's Management Discussion and Analysis in
Chesswood's 2017 Annual Report for additional information
concerning these measures and a reconciliation of these measures to
the Company's consolidated net income.
About Chesswood
Through two wholly-owned subsidiaries in the U.S. and
Canada, Chesswood Group Limited is
North America's only
publicly-traded commercial equipment finance company focused on
small and medium-sized businesses. Our Colorado-based Pawnee Leasing Corporation,
founded in 1982, finances a highly diversified portfolio of
commercial equipment leases and loans through established
relationships with over 600 independent brokers in 48 U.S. states.
In Canada, Blue Chip Leasing
Corporation has been originating and servicing commercial equipment
leases and loans since 1996, and today operates through a
nationwide network of more than 50 independent brokers. Based in
Toronto, Canada, Chesswood's
shares trade on the Toronto Stock Exchange under the symbol
CHW.
Learn more at www.chesswoodgroup.com, www.PawneeLeasing.com and
www.BlueChipLeasing.com.
This press release contains forward-looking statements that
involve a number of risks and uncertainties because they relate to
events and depend on circumstances that will occur in the future.
Many factors could cause actual results and developments to differ
materially from those expressed or implied by these forward-looking
statements. By its nature, this information is subject to inherent
risks and uncertainties that may be general or specific and which
give rise to the possibility that expectations, forecasts,
predictions, projections or conclusions will not prove to be
accurate, that assumptions may not be correct and that objectives,
strategic goals and priorities will not be achieved. Additional
information about the risks and uncertainties of the Company's
businesses and material factors or assumptions on which information
contained in forward-looking statements is based is provided in its
publicly filed documents, including the Company's annual
information form and management's discussion and analysis of the
financial condition and performance, which are available
electronically through the System for Electronic Document Analysis
and Retrieval at www.sedar.com.
NO STOCK EXCHANGE, SECURITIES COMMISSION OR OTHER REGULATORY
AUTHORITY HAS APPROVED OR DISAPPROVED THE INFORMATION CONTAINED
HEREIN.
SOURCE Chesswood Group Limited