Rifco Reports Record Third Quarter Results - San Diego, California News Station - KFMB Channel 8 - cbs8.com

Rifco Reports Record Third Quarter Results

Posted: Updated:

Red Deer, Alberta. February 10, 2014; Rifco Inc. (TSXV: RFC) is pleased to announce record results for its wholly owned subsidiary Rifco National Auto Finance for the quarter ended December 31, 2013 with the following milestones being achieved.

-Record EPS of $0.080

-Record Revenues of $7.69M in the quarter

-Record Finance Receivables of $179.09M

-Record low Average Interest Expense of 5.03% in the quarter

-Record Net Income of $1.67M

-Record nine month Originations of $86.20M

Rifco reported earnings per share in the quarter of $0.080, a 31% increase from the $0.061 reported in the comparable quarter. The Company’s EPS for the first nine months has reached $0.223, a 41% increase over the comparable nine month period.

Revenue was $7.69M, a 20% increase over $6.42M for the comparable quarter. Rifco reported net income of $1.67M, an improvement of 36% from $1.23M in the comparative quarter.

The Company posted originations of $25.28M up from $23.20M, a 9% increase from the comparable quarter. For the nine months period ended, the Company has posted record originations of $86.20M, an increase of 28% over the comparable period.

Originations contributed to a 30% growth rate in finance receivables to $179.09M from $137.64M in the comparable quarter.

The average interest expense has decreased to 5.03% in the current quarter when compared to 6.16% in the same quarter of the prior year. The Company is benefiting from lower cost of funding from its bank line and securitization facilities.

The loan delinquency rate increased to 3.63% compared to 3.27% in the same quarter of the prior year but decreased from 4.00% in the preceding quarter. The average (12 month rolling) credit loss rate increased in the quarter to 3.17% from 3.02% in the prior quarter. The year to date credit loss rate is currently 3.25%.

The annualized ROE for the quarter was 44%. Shareholders equity has increased by 77% and total assets have grown by 28% over the comparable quarter. These favorable trends, if continued, demonstrate the ability of Rifco to sustain its growth.

Rifco’s operating expenses increased to $1.76M from $1.66M in the prior quarter. Increases in the quarter were allocated to wages and benefits for an increased staff count and dealer marketing events.

Loan originations reduced from $29.22M in the prior quarter, a 13% decrease. Loan volume in the quarter was adversely affected by an aggressive competitive environment, harsh weather conditions in many regions and typical seasonality.

Rifco intends to maintain the integrity of its credit underwriting. Rifco is focusing on enhancing its competitive service advantage through improved ease of funding, dealer reward programs, and improved payment option plans for individual loans.

Rifco currently has less than a 5% share of the national non-traditional auto finance market. Rifco is actively growing its sales force and has increased the rate that new dealer partners are being enrolled. Rifco expects to grow its market share in the coming years.

Historically, the fourth quarter is a strong loan origination period. Management remains optimistic that its loan origination target of $120M is achievable.

The Company has undertaken a number of infrastructure and expansion projects this year. Processes and systems have been evaluated in order to ensure that they can be scaled up in order to support loan originations of $500M per year. The infrastructure upgrades will drive improvements in operating expenses and benefit efficiency ratios.

Rifco third quarter comparative results

The Company is reporting earnings growth on increasing finance receivables, lower interest rates, acceptable loan losses, and stable operating expenses.


 --------------------------------------------------------------------------------------------------
 |Statements of income                                |          |          |          |          |
 |------------------------------------------------------------------------------------------------|
 |For the period ended December 31                                                                |
 |($, 000's, except share count and per share)                                                    |
 |------------------------------------------------------------------------------------------------|
 |                                                    |Three months ended   |                     |
 |                                                    |                     |Nine months ended    |
 |------------------------------------------------------------------------------------------------|
 |                                                    |2013      |2012      |2013      |2012      |
 |------------------------------------------------------------------------------------------------|
 |Financial revenue                                   |          |          |          |          |
 |------------------------------------------------------------------------------------------------|
 |Interest income                                     |7,567     |6,325     |21,861    |17,390    |
 |------------------------------------------------------------------------------------------------|
 |Administration and other fees                       |127       |92        |366       |252       |
 |------------------------------------------------------------------------------------------------|
 |                                                    |7,694     |6,417     |22,227    |17,642    |
 |------------------------------------------------------------------------------------------------|
 |Financial expenses                                  |          |          |          |          |
 |------------------------------------------------------------------------------------------------|
 |Interest expenses                                   |2,107     |2,098     |6,288     |5,941     |
 |------------------------------------------------------------------------------------------------|
 |                                                    |          |          |          |          |
 |------------------------------------------------------------------------------------------------|
 |Net financial income before provision for impairment|5,587     |4,319     |15,939    |11,701    |
 |------------------------------------------------------------------------------------------------|
 |                                                    |          |          |          |          |
 |------------------------------------------------------------------------------------------------|
 |Provision for impairment and credit losses          |1,513     |1,169     |4,619     |3,380     |
 |------------------------------------------------------------------------------------------------|
 |Net financial income before operating expenses      |4,074     |3,150     |11,320    |8,321     |
 |------------------------------------------------------------------------------------------------|
 |                                                    |          |          |          |          |
 |------------------------------------------------------------------------------------------------|
 |Operating expenses                                  |1,761     |1,491     |4,963     |3,955     |
 |------------------------------------------------------------------------------------------------|
 |                                                    |          |          |          |          |
 |------------------------------------------------------------------------------------------------|
 |Income before taxes                                 |2,313     |1,659     |6,357     |4,366     |
 |------------------------------------------------------------------------------------------------|
 |Income tax expense                                  |641       |430       |1,711     |1,174     |
 |------------------------------------------------------------------------------------------------|
 |Net income                                          |1,672     |1,229     |4,646     |3,192     |
 |------------------------------------------------------------------------------------------------|
 |Weighted average number                             |20,950,817|20,254,309|          |          |
 |of outstanding shares at                            |          |          |20,878,426|20,195,648|
 |period end                                          |          |          |          |          |
 |------------------------------------------------------------------------------------------------|
 |Fully Diluted Basis                                 |21,697,034|21,198,379|21,593,420|21,059,763|
 |------------------------------------------------------------------------------------------------|
 |Net earnings per common share basic                 |$0.080    |$0.061    |$0.223    |$0.158    |
 |diluted                                             |$0.077    |$0.058    |$0.215    |$0.152    |
 |                                                    |          |          |          |          |
 --------------------------------------------------------------------------------------------------

Rifco has been granting non-traditional loans in the automotive sector for over 11 years and has granted over $425M in loans to date. The Company’s underwriting and operational systems have delivered solid credit performance throughout the full economic cycle.

In order to fund its loan originations, the Company used the $95M bank syndication facility and its $8.5M Unsecured Debentures. In addition, the Company has access to $120M through four securitization facilities. The Company’s credit facilities have remaining capacity of $86M at quarter end. The Company securitized two tranches of loans totaling $5.02M in loan principal during the quarter.

On January 20, 2014, the Company signed an amended agreement with Mountain View Credit Union (MVCU) to increase its securitization facility from $20M to $50M, which replaces the agreement signed on June 25, 2010. The amended securitization facility will include three additional Alberta credit unions, with MVCU acting as the syndication lead.

On January 22, 2014, the Company announced that it has not renewed its Bank West securitization facility. As per the master agreement signed on August 31, 2009, Rifco will continue to administer the $14.3M auto loan portfolio. The portfolio balance will naturally reduce as borrower payments are made over the coming years.

On January 29, 2014, the Company was able to increase its syndicated secured revolving credit facility with Wells Fargo Corporation of Canada and ATB Corporate Financial Services from $95M to $100M.


 -----------------------------------------------------------------------------
 |Q3 Financial Highlights:             |   |      |                          |
 |---------------------------------------------------------------------------|
 |                                     |             |                     | |
 |---------------------------------------------------------------------------|
 |($,000's except ratios and per share)|Q3-14  |Q3-13   |                  | |
 |---------------------------------------------------------------------------|
 |                                     |       |        |                  | |
 |---------------------------------------------------------------------------|
 |Revenue                              |7,694  |6,417   |Increased 20%     | |
 |---------------------------------------------------------------------------|
 |Net Income                           |1,672  |1,229   |Increased 36%     | |
 |---------------------------------------------------------------------------|
 |Operating Expenses                   |1,761  |1,491   |Increased 18%     | |
 |---------------------------------------------------------------------------|
 |Loan Originations                    |25,277 |23,180  |Increased 9%      | |
 |---------------------------------------------------------------------------|
 |Finance Receivables                  |179,093|137,644 |Increased 30%     | |
 |---------------------------------------------------------------------------|
 |Credit Losses                        |1,568  |978     |Increased by $590K| |
 |---------------------------------------------------------------------------|
 |Average Interest Expense             |5.03%  |6.16%   |Decreased         | |
 |                                     |       |        |(Improved)        | |
 |---------------------------------------------------------------------------|
 |Operating Expense Ratio              |4.03%  |4.50%   |Decreased         | |
 |                                     |       |        |(Improved)        | |
 |---------------------------------------------------------------------------|
 |Delinquency Ratio                    |3.63%  |3.27%   |Increased         | |
 |                                     |       |        |(Worsened)        | |
 |---------------------------------------------------------------------------|
 |Average (rolling 12                  |       |        |Increased         | |
 |month) Credit Loss                   |3.17%  |2.58%   |(Worsened)        | |
 |Rate                                 |       |        |                  | |
 |---------------------------------------------------------------------------|
 |Basic EPS                            |$0.080 |$0.061  |Increased 31%     | |
 -----------------------------------------------------------------------------

 ------------------------------------------------------------------------
 |            |Sequential Quarters:|           |                      | |
 |----------------------------------------------------------------------|
 |            |                    |           |                      | |
 |----------------------------------------------------------------------|
 |            |($,000's except     |Q3-14  |Q2-14  |                  | |
 |            |ratios and per      |       |       |                  | |
 |            |share)              |       |       |                  | |
 |----------------------------------------------------------------------|
 |            |                    |       |       |                  | |
 |----------------------------------------------------------------------|
 |Revenue                          |7,694  |7,539  |Increased 2%      | |
 |----------------------------------------------------------------------|
 |Net Income                       |1,672  |1,407  |Increased 19%     | |
 |----------------------------------------------------------------------|
 |Operating Expenses               |1,761  |1,662  |Increased 6%      | |
 |----------------------------------------------------------------------|
 |Loan Originations                |25,277 |29,224 |Decreased by 13%  | |
 |----------------------------------------------------------------------|
 |Finance Receivables              |179,093|173,000|Increased 4%      | |
 |----------------------------------------------------------------------|
 |Credit Losses                    |1,568  |1,365  |Increased by $203K| |
 |----------------------------------------------------------------------|
 |Average Interest Expense         |5.03%  |5.24%  |Decreased         | |
 |                                 |       |       |(Improved)        | |
 |----------------------------------------------------------------------|
 |Operating Expense Ratio          |4.03%  |3.97%  |Increased         | |
 |                                 |       |       |(Worsened)        | |
 |----------------------------------------------------------------------|
 |Delinquency Ratio                |3.63%  |4.00%  |Decreased         | |
 |                                 |       |       |(Improved)        | |
 |----------------------------------------------------------------------|
 |Average                          |       |3.02%  |Increased         | |
 |(rolling                         |3.17%  |       |(Worsened)        | |
 |12 month)                        |       |       |                  | |
 |Credit                           |       |       |                  | |
 |Loss Rate                        |       |       |                  | |
 |----------------------------------------------------------------------|
 |Basic EPS                        |$0.080 |$0.067 |Increased 19%     | |
 ------------------------------------------------------------------------

Key Year-to-Date Performance Measurement

Please note the Company results as reported against the specific objectives released in our annual objectives press release on June 13, 2013.

  1. 1.Achieve record Loan Originations of over $120 million

Loan Originations for the first nine months are $86.20M, a new record. Progress to target 72%.

  1. 2.Achieve record Finance Receivables of over $192 million

Finance Receivables for the first nine months grew to $179.09M from $147.53M, a new record. Progress to target 71%.

  1. 3.Achieve record revenue of over $30 million

Revenue for the first nine month totalled $22.23M, a new record. Progress to target 74%.

  1. 4.Achieve an annualized write off rate below 3.25%

Year to date Annualized Credit Loss Rate of 3.25%. On target

  1. 5.Achieve record earnings per share of $0.300.

Earnings per share for the first nine months are $0.223, a new record. Progress to target 74%.

About Rifco

Rifco Inc. operates through its wholly owned subsidiary Rifco National Auto Finance Corporation in order to provide automobile loans through its dealership network across Canada.

Rifco National Auto Finance provides consumers with financing options on new and used vehicles. Rifco specializes in building long-term partnerships with dealers by investing time in personalized services through dedicated account representatives. Rifco’s quick credit decisions, common sense lending, and expedited funding processes give its dealers better financing options and more closed deals. Rifco’s most successful partnerships result in graduated recognition programs for its loyal dealerships.

Rifco is committed to continuing growth. Key strategies for achieving this growth include the expansion of its automobile dealer base, excellence in credit and collections processes.

The common shares of Rifco Inc. are traded on the TSX Venture Exchange under the symbol "RFC". There are 20.95 million shares (basic) outstanding and 22.21 million (fully diluted) shares.

CONTACT:

Rifco Inc.

Lance A. Kadatz

Vice President and Chief Financial Officer

Telephone: 1-403-314-1288 Ext 7007

Fax: 1-403-314-1132

Email: kadatz@rifco.net

Website: www.rifco.net

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

ReleaseID: 411727

Powered by WorldNow
All content © Copyright 2000 - 2014 WorldNow and Midwest Television, Inc. All Rights Reserved.
For more information on this site, please read our Privacy Policy and Terms of Service.