Rifco Reports Fourth Quarter Results

·6 min read

Red Deer, Alberta--(Newsfile Corp. - June 17, 2021) - Rifco Inc. (TSXV: RFC) ("Rifco" or the "Company"), is pleased to announce its consolidated results for the fourth quarter and the year ended March 31, 2021.

Annual Highlights

  • Rifco reported year-to-date Adjusted Net Income before Taxes of $4.9M and $0.23 per share. This is 283% higher than the prior year. Adjusted Net Income before Taxes removes the effects of the non-cash change in provision for impairment and one-time strategic review expenses. Net income including these items and taxes, was $4.8M and $0.22 per share.

  • The annualized Credit Loss Rate for the period decreased by 265 basis points to 4.41% from 7.06% in the comparable quarter. The Company believes this is partially a product of the operational improvements it has made, and the strength of the custom credit model, originally implemented in fiscal 2018.

  • The year-to-date Credit Spread Rate improved 227 basis points over the comparable period from 10.42% to 12.69%. The Company believes the latest pricing model implemented alongside the custom credit model has contributed to improved Credit Spread.

  • The Delinquency Rate (over 30 days) remains at an exceptionally low level of 2.74%. This is a decrease of 281 basis points over the prior year end.

  • On November 27, 2020, Rifco declared a $0.35 per common share special dividend. The dividend was paid in cash on December 7, 2020 in the amount of $7.6M.

Fourth Quarter Highlights

  • On April 15, 2021, Rifco announced the appointment of Roger Saran as President and Chief Operating Officer of Rifco National Auto Finance and also announced collaboration with autologiQ Inc. on 'Easy Monthly Payments' TM (EMP) program.

  • Rifco reported quarterly Adjusted Net Income before Taxes of $1.1M and $0.05 per share. This compares favourably with the prior quarter's Adjusted Net Income before Taxes of $0.7M and $0.03 per share and the comparable quarter's Adjusted Net Income before Taxes of $0.7M and $0.03 per share. Adjusted Net Income before Taxes removes the effects of the non-cash change in provision for impairment and one-time strategic review expenses. Net income including these items and taxes, was $0.7M and $0.03 per share.

  • Originations in the current quarter were $20.6M, a 15.1% increase over the prior quarter's Originations of $17.9M.

While the Company is cautiously optimistic about recent and near-term results, the economic forecast in this COVID-19 environment is uncertain.

Annual Comparative Results

Statements of income

For the year ended March 31, 2021

For the year ended March 31, 2020

($,000's, except per share, % of average loan receivables)

Average loan receivables for the period

203,647

225,252

Financial revenue

34,818

17.10%

39,374

17.48%

Credit losses

8,989

4.41%

15,893

7.06%

Credit Spread

25,829

12.69%

23,481

10.42%

Financial expenses

9,692

4.76%

11,145

4.95%

Adjusted Net Financial Income before Operating Expenses

16,137

7.93%

12,337

5.47%

Adjusted Operating expenses

11,229

5.52%

11,057

4.92%

Adjusted Net Income (Loss) Before Taxes

4,908

2.41%

1,280

0.55%

Strategic review process

500

0.25%

(700)

(0.31%)

Decrease (increase) in provision for impairment

1,098

0.54%

(4,113)

(1.83%)

Net loss (loss) before tax

6,506

3.20%

(3,533)

(1.59%)

Income tax (expense) recovery

(1,716)

(0.84)%

651

0.29%

Net income (loss)

4,790

2.36%

(2,882)

(1.30%)

Weighted average number of outstanding shares

21,646

21,597

Fully diluted basis

21,646

21,597

Adjusted Net Income before Taxes per Common Share - basic

$ 0.226

$ 0.059

Diluted

$ 0.226

$ 0.059

Net income (loss) per common share - basic

$0.221

$(0.133)

Diluted

$0.221

$(0.133)

Quarterly Comparative Results

Statements of income

Current Quarter
3 Months Ended
March 31,
2021

Prior Quarter
3 Months Ended
December 31,
2020

Comparable Quarter
3 Months Ended
March 31,
2020

($,000's, except per share, % of average loan receivables)

Average loan receivables for the period

194,058

197,611

224,580

Financial revenue

8,240

16.98%

8,584

17.38%

9,744

17.35%

Credit losses

2,250

4.64%

2,145

4.34%

3,465

6.17%

Credit Spread

5,990

12.34%

6,439

13.04%

6,279

11.18%

Financial expenses

2,249

4.64%

2,325

4.71%

2,706

4.82%

Adjusted Net Financial Income before Operating Expenses

3,741

7.70%

4,114

8.33%

3,573

6.36%

Adjusted Operating Expenses

2,666

5.49%

3,403

6.89%

2,913

5.19%

Adjusted Net Income (Loss) before Taxes

1,075

2.21%

711

1.44%

660

1.17%

Strategic review process

-

0.00%

-

0.00%

(537)

(0.96%)

Increase in provision for impairment

(182)

(0.38%)

(503)

(1.02%)

(3,924)

(6.99%)

Net income (loss) before taxes

893

1.83%

208

0.42%

(3,801)

(6.78%)

Income tax (expense) recovery

(193)

(0.40%)

(31)

(0.06%)

771

1.37%

Net income (loss)

700

1.43%

177

0.36%

(3,030)

(5.41%)

Weighted average number of outstanding shares

21,750

21,612

21,597

Fully diluted basis

21,750

21,612

21,597

Adjusted Net Income before taxes per Common Share basic

$0.049

$0.033

$0.031

Diluted

$0.049

$0.033

$0.031

Net income (loss) per common share basic

$0.032

$0.008

$(0.140)

Diluted

$0.032

$0.008

$(0.140)

Rifco, today, filed its annual financial statements and management discussion and analysis for the year ended March 31, 2021. The previously released financial statements and the related management's discussion and analysis can be viewed at www.sedar.com or at www.rifco.net.

Non-IFRS Measures

Throughout this Press Release, management uses terms and ratios which do not have a standardized meaning under IFRS and are unlikely to be comparable to similar measures presented by other issuers. Specifically, management presents an Adjusted Net Income measure, along with related Adjusted sub-totals and ratios. These measures do not have any standardized meaning under IFRS and are therefore unlikely to be comparable to similar measures presented by other issuers. A full description of these measures can be found in the management discussion and analysis that accompany the financial statements for the period ended March 31, 2021.

About Rifco

Rifco National Auto Finance Corporation ("RNAF"), Rifco's sole, wholly owned, subsidiary operates with a purpose to help its clients obtain a safe and reliable vehicle by providing alternative finance solutions. RNAF currently distributes its alternative finance products indirectly through select automotive dealer partners.

Rifco is built on a foundation of trust, respect, empowerment, accountability and passion which are exhibited by each and every member of the Rifco team, as we collaboratively pursue our collective vision and do so in a manner that is consistent with our purpose.

The common shares of Rifco Inc. are traded on the TSX Venture Exchange under the symbol "RFC". There are 21.75 million shares (basic) outstanding.

CONTACT:
Rifco Inc.
Warren Van Orman
Vice President and Chief Financial Officer
Telephone: 1-403-314-1288 Ext 7007
Fax: 1-403-314-1132
Email: vanorman@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.

To view the source version of this press release, please visit https://www.newsfilecorp.com/release/87961

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