CALGARY,
AB, May 15, 2024 /CNW/ - Crown Capital
Partners Inc. ("Crown" or the "Corporation") (TSX: CRWN) today
announced its financial results for the three months ended
March 31, 2024. Crown's complete
financial statements and management's discussion and analysis are
available on SEDAR at www.sedarplus.ca.
Q1 2024 Financial & Operating Highlights
- Crown recognized a net loss of $(0.6)
million ($0.11 loss per basic
share) in Q1 2024 compared to a net loss of $(0.7) million ($0.13 loss per basic share) in Q1 2023.
- Distribution services revenue of $8.2
million in Q1 2024 compared with $8.2
million in Q4 2023. This segment reported a net loss before
income taxes of $(0.5) million (Q4
2023 – $(1.2) million), inclusive of
depreciation and amortization expense totaling $1.5 million (Q4 2023 - $1.5 million), with the net loss attributable to
start-up costs in respect of certain facilities of Go Direct Global
that are in various stages of achieving scale. Capacity utilization
was 52% at March 31, 2024 compared
with 42% at December 31, 2023.
- Network services revenue in Q1 2024 was $6.7 million, compared with $5.4 million in Q4 2023, with the increase due
primarily to non-recurring hardware sales from Galaxy Broadband
Communications in the first quarter. This segment reported a net
loss before income taxes of $(0.03)
million (Q4 2023 – $(0.7
million), inclusive of depreciation and amortization expense
totaling $0.9 million (Q4 2023 -
$1.3 million) and accrued
restructuring costs of $nil (Q4 2023 – $0.5
million).
- Revenue from the Real Estate segment was $1.6 million in Q1 2024 (Q4 2023 - $1.4 million) with the quarter-over-quarter
increase attributable to property management contracts added during
Q1 2024. This segment recorded net income before income taxes of
$0.7 million (Q4 2023 - $0.3 million), inclusive of depreciation and
amortization expense of $0.2 million
(Q4 2023 - $0.2 million).
- The Distributed Power segment recorded revenues of $0.8 million in Q1 2024 (Q4 2023 - $0.5 million) with the increase primarily
relating to growth in merchant power revenue. This segment reported
net income before income taxes of $0.003
million (Q4 2023 – $(2.7)
million net loss before income taxes) inclusive of asset
impairment charges totaling $nil (Q4 2023 - $6.1 million).
- In Q1 2024, the Specialty Finance segment recognized earnings
of $2.2 million (Q4 2023 –
$0.5 million) in relation to its
investment in Crown Partners Fund, including $1.2 million in respect of its limited
partnership interest and $1.0 million
in respect of its general partnership interest in the fund. The
quarter-over-quarter improvement is primarily due to the
recognition of larger unrealized gains during the first quarter of
2024.
- Total equity at quarter-end decreased to $37.5 million, from $38.2
million at the end of 2023, due to a net loss attributable
to shareholders of $0.6 million.
Total equity per share decreased to $6.72 per basic share from $6.84 per basic share as at December 31, 2023.
- Since September 30, 2023, Crown
has not satisfied certain financial covenant clauses of its credit
agreement with its bank. Accordingly, the bank is contractually
entitled to request immediate repayment of the outstanding loan in
the amount of $24.6 million and the
outstanding balance is presented as a current liability as at
March 31, 2024. The Corporation's
bank has not requested early repayment of the loan. Management is
currently in discussions with lenders regarding replacing its
current credit facility and multiple financing options are being
considered; however, there is no assurance that such arrangements
will become available.
- In Q1 2024, Crown's subsidiary, Community Network Partners,
received the grant funding related to the completion of its first
fibre network segment under the Province of Ontario's Accelerated High-Speed Internet
Program. Construction and testing of the second segment under
this program is expected to be completed in Q3 2024 with receipt of
the related grant funding expected in Q4 2024.
"From an operational perspective, Q1 was a good quarter for the
Company as we achieved meaningful progress in all our operating
divisions. We're expecting progress to continue this year,
particularly in our Network Services segment, which is being driven
by our contracts to develop new fibre optic networks, and in our
Distribution Services segment, where we are increasing capacity
utilization. We are also actively working to generate liquidity
from our portfolio of assets to reduce debt, presently focused on
our bank debt as well as the debentures due at the end of 2024,"
added Mr. Johnson.
Q1 2024 Financial Results Summary
|
Selected
Quarterly Information
|
|
|
|
AS AT AND FOR THE THREE
MONTHS ENDED MAR. 31
(THOUSANDS, EXCEPT PER SHARE AND NUMBER OF COMMON
SHARES)
|
2024
|
|
2023
|
|
Revenue:
|
|
|
|
|
Distribution services
revenue
|
$
8,209
|
|
$
8,357
|
|
Network services
revenue
|
6,719
|
|
7,273
|
|
Fees and other
income
|
2,011
|
|
883
|
|
Distributed power
interest revenue
|
183
|
|
542
|
|
Merchant power
revenue
|
604
|
|
-
|
|
Total
revenue
|
17,726
|
|
17,055
|
|
Share of earnings of
Crown Partners Fund
|
2,227
|
|
1,350
|
|
Net loss attributable
to Shareholders
|
(604)
|
|
(712)
|
|
Comprehensive loss
attributable to Shareholders
|
(684)
|
|
(712)
|
|
Total assets
|
174,619
|
|
172,763
|
|
Total equity
|
37,544
|
|
49,943
|
|
Per share:
|
|
|
|
|
- Net loss to
Shareholders - basic
|
$
(0.11)
|
|
$
(0.13)
|
|
- Net loss to
Shareholders - diluted
|
(0.11)
|
|
(0.13)
|
|
- Total equity per
share - basic
|
6.72
|
|
8.85
|
|
Number of common
shares:
|
|
|
|
|
- Outstanding at end of
period
|
5,588,646
|
|
5,640,546
|
|
- Weighted average
outstanding - basic
|
5,588,646
|
|
5,642,524
|
|
- Weighted average
outstanding - diluted
|
5,588,646
|
|
5,642,524
|
About Crown Capital Partners (TSX:CRWN)
Founded in
2000 within Crown Life Insurance Company, Crown Capital Partners is
a capital partner to entrepreneurs and growth businesses mainly
operating in the telecommunications infrastructure, distribution
services, and distributed power markets. We focus on growth
industries that require a specialized capital partner, and we aim
to create long-term value by acting as both a direct investor in
operating businesses serving these markets and as a manager of
investment funds for institutional partners. For additional
information, please visit crowncapital.ca.
FORWARD-LOOKING STATEMENTS
This news release
contains certain "forward looking statements" and certain "forward
looking information" as defined under applicable Canadian and U.S.
securities laws. Forward-looking statements can generally be
identified by the use of forward-looking terminology such as "may",
"will", "expect", "intend", "estimate", "anticipate", "believe",
"continue", "plans" or similar terminology. Forward-looking
statements in this news release include, but are not limited to,
statements, management's beliefs, expectations or intentions
regarding the distribution services market, the network services
market and the general economy, Crown's business plans and
strategy, including anticipated investment dispositions and capital
deployments and the timing thereof, anticipated refinancing
activity and Crown's future earnings. Forward-looking statements
are based on forecasts of future results, estimates of amounts not
yet determinable and assumptions that while believed by management
to be reasonable, are inherently subject to significant business,
economic and competitive uncertainties and contingencies.
Forward-looking statements are subject to various risks and
uncertainties concerning the specific factors identified in the
Crown's periodic filings with Canadian securities regulators.
See Crown's most recent annual
information form for a detailed discussion of the risk factors
affecting Crown. In addition, Crown's dividend policy will be
reviewed from time to time in the context of the Corporation's
earnings, financial requirements for its operations, and other
relevant factors and the declaration of a dividend will always be
at the discretion of the board of directors of the Corporation.
Crown undertakes no obligation to update forward-looking
information except as required by applicable law. Such
forward-looking information represents management's best judgment
based on information currently available. No forward-looking
statement can be guaranteed and actual future results may vary
materially. Accordingly, readers are advised not to place undue
reliance on forward-looking statements or information.
SOURCE Crown Capital Partners Inc.