May 27, 2020 – Toronto, Ontario – Axis Auto Finance Inc. (“Axis” or the “Company”), (TSXV: AXIS) Canada’s fastest growing publicly-traded sub-prime automotive finance company, today announced financial results for its fiscal third quarter ending March 31, 2020.
HIGHLIGHTS
From the onset of the pandemic and the government mandated measures to combat the spread of the virus, Axis has supported borrowers through payment accommodations and/or deferrals. To date, 12.5% of active customer accounts have been impacted. The frequency of payment deferral requests declined significantly by the end of April.
- Record quarterly revenues of $10.0 million, a 34% increase over Q3 2019;
- Record quarterly originations of $29.7 million, a 109% increase year-over-year;
- Record gross finance receivables of $126.7 million, up from $114.7 million in fiscal 2019; and
- Adjusted earnings1 of $1.2 million for Q3 2020.
Total originations for the third quarter of fiscal 2020 were $29.7 million of which $22.9 million were on balance sheet and $6.8 million were Westlake managed volumes. On balance sheet originations increased by 61% year-over-year, despite the COVID-19 related slowdown in March.
The increase in originations in each of the three fiscal quarters to date, has contributed to the growth in gross finance receivables, which increased from $114.7 million at June 30, 2019 to $126.7 million at the end of the third quarter of fiscal 2020.
Third quarter revenues were a record $10.0 million, a 34% increase from $7.5 million for the third quarter of fiscal 2019. The increase in revenue is the result of portfolio growth, maintaining strong portfolio yields on newly originated finance receivables, and lower drag on revenue from the portfolios that were acquired in 2018.
Portfolio yields in the third quarter 2020 remained strong at 31.9%, down slightly from second quarter yields of 32.6%. Annualized credit losses rose from 9.41% in fiscal 2019 to 10.31% in the third quarter of fiscal 2020.
Adjusted earnings for Q3 2020 was $1.2 million, compared to ($2.0) million in Q3 2019 and ($0.5) million for fiscal 2019.
Net income (loss) for Q3 2020 was ($0.7) million or ($0.007) per share, as compared to ($1.7) million or ($0.018) per share in Q3 2019. Total shareholders’ equity (book value) of the Company was $33.4 million at the end of the third quarter of fiscal 2020, or $0.35 per share. Adjusted equity was $41.8 million, or $0.43 per share.
À Propos d’Axis Auto Finance
Axis Auto Finance is a leading Canadian provider of alternative used vehicle financing options servicing roughly 30% of Canadians (Source: Equifax) that have credit scores in the non-prime range. 100% of all Axis auto loans report to the credit bureau, resulting in a significant improvement of the credit scores for the overwhelming majority of clients. These clients use Axis as a stepping-stone in their credit rebuilding journey and we are proud to be improving the lives of these Canadians. Supported by state-of-the-art, in-house developed risk analytics, Axis continues to be Canada’s fastest-growing publicly traded auto-financing company. Further information on the Company can be found at here.
1 In order to track the performance of its finance receivable portfolio in a given period without the volatility associated with estimates and assumptions, Axis introduced a non-IFRS measure called Adjusted Earnings. This measure, now included in the MD&A, is equal to the net income (loss) for the period, adjusted for (i) non-cash expense items (as identified in the Statement of Cash Flows) (ii) actual credit losses incurred (iii) non-recurring one time transaction and integration costs (iv) occupancy related lease costs not included in general and administrative expenses and (v) specified expenses which were entirely recognized in a given quarter but for which the benefit was derived over more than a given quarter. For further information on Axis non-IFRS measures, please see the Management’s Discussion and Analysis for the corresponding period.
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Axis Auto Finance Inc.
Ilja Troitschanski
President
(416) 633-5626
info@axisautofinance.com