~Company reports 106% increase in total revenue on a year over year basis~
VANCOUVER, BC, July 22, 2021 – TIMIA Capital Corporation (“TIMIA” or the “Company”) (TSX-V:TCA / OTC: TIMCF) today announced financial results for the second quarter ended May 31, 2021.
Second Quarter 2021 Highlights include:
- Total revenue increased 106% to $1.8 million from $891,186 in the same period last year. Total revenue includes income from settlements of $516,009 in the current period;
Interest income from investments increased 33% to $1.2 million compared to $869,793 in the same period last year;
- Net income increased $123,423 to $602,034 compared to $478,611 in the same period last year;
- Net and comprehensive loss was $407,229 compared to a comprehensive income of $478,611 for the same period last year due to the unrealized foreign currency translation loss on its consolidated US $ Limited Partnership;
- TIMIA’s loan portfolio (loan receivable) decreased from $27.3 million to $25.5 million in the last three months due to two successful exits in the quarter ended May 31, 2021;
- Reported total assets of $39.5 million as at May 31, 2021 compared to $41.9 million as at November 30, 2020. Cash balance, as part of assets, was $11.4 million compared to $12.9 million as at November 30, 2020; and
- Through the Company’s normal course issuer bid, the Company purchased 443,500 shares during the second quarter.
“The Company continues to deliver good results, posting near record revenue for the second quarter,” said Mike Walkinshaw, CEO of TIMIA Capital Corporation. “Our origination platform continues to show its value of originating successful software companies as we distribute growth capital into new and follow-on investments. Our interest income is growing plus we recorded two exits during the second quarter adding to the revenue from settlement of loans. Our marketing team is actively pursuing Canadian and U.S. opportunities through our fintech platform to expand our influence with leading recurring revenue software companies.”
Detailed Financial Review
During the quarter ended May 31, 2021, the Company continued to grow its revenue by distributing growth capital of $4.3 million in new and follow-on investments and exiting from loans totalling $5.1 million.
The Company’s revenue is primarily interest income. As the Company makes new investments, the amount of monthly payments derived from the portfolio grows. Interest income in the three months ended May 31, 2021 was $1.2 million compared to $869,793 in the same period last year, a 33% increase. Combined income from the settlement of loans and transaction and other fees was $682,514 in the three months ended May 31, 2021 compared to $21,393 in the same period last year. The increase in transaction and other fees reflects an increase in total number of new transactions and income from successful exits made during the quarter. Total revenue for the three months ended May 31, 2021 increased 106% to $1.8 million compared to $891,186 for the three months ended May 31, 2020.
TIMIA continues to build the value and size of its portfolio by making new investments and follow-on investments in existing portfolio companies, and actively assisting portfolio companies with their growth plans. At the same time, the Company is investing to support its future growth and the continued development of its fintech platform. Total expenses, including interest expense, for the quarter ended May 31, 2021 were $929,907 compared with $813,794 for the same period last year. The change reflects a decrease in interest expense, share-based payments, and expected credit loss provision, offset by increases in accounting and legal, administrative, management, and director fees, regulatory, investor relations and communications costs, office, travel, systems, and miscellaneous expenses, year over year.
US dollar denominated investments and subsidiaries are required to be converted to Canadian dollars quarterly at the then prevailing quarter end exchange rates. At the start of the Company’s fiscal year, December 1, 2020, the US dollar was trading at 1.30 Canadian Dollars, by the end of the second quarter the US dollar had fallen to 1.21 Canadian dollars. This drop in foreign currency adversely impacts income in several ways including the recognition of unrealised losses on US denominated assets owned directly by TIMIA, and also through the reduction in carried interest income earned by the Company in its capacity as manager of the limited partnerships.
During the quarter ended May 31, 2021, the Company posted net income of $602,034 compared with net income of $478,611 in the same period last year. The year-over-year improvement of $123,423 is primarily due to the continued growth in size of the portfolio and the resulting interest income increase plus the impact of loan exits, offset by the negative impact of a $441,073 foreign exchange loss in quarter ended May 31, 2021 compared with a $354,219 foreign exchange gain reported in 2020.
As at May 31, 2021, the Company’s cash balance was $11.4 million and working capital was $12.1 million, compared with $12.9 million and $11.1 million, respectively, as of November 30, 2020.
This news release is qualified in its entirety by the Company’s condensed interim financial statements for the three and six months ended May 31, 2021 and May 31, 2020 and the associated Management’s Discussion & Analysis respecting the same periods, which can be downloaded from the Company’s profile on SEDAR at http://www.sedar.com.
About TIMIA Capital Corporation
TIMIA Capital Corporation has developed a proprietary loan origination platform that services private market, high-yield loan opportunities, thereby earning recurring fees and a share of the profit. While focusing on the fast growing, global, business-to-business Software-as-a-Service (or SaaS) segment, TIMIA’s automated loan origination system is applicable to multiple technology sectors, it creates scalable and profitable growth for TIMIA’s stakeholders. For more information about TIMIA Capital Corporation, please visit www.timiacapital.com
For more information, please contact:
Vice President, Capital Markets & Communications
Mike Walkinshaw, CEO
TIMIA Capital Corporation
Neither the 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 news release.
Certain information and statements in this news release contain and constitute forward-looking information or forward-looking statements as defined under applicable securities laws (collectively, “forward-looking statements”). Forward-looking statements normally contain words like ‘believe’, ‘expect’, ‘anticipate’, ‘plan’, ‘intend’, ‘continue’, ‘estimate’, ‘may’, ‘will’, ‘should’, ‘ongoing’ and similar expressions, and within this news release include any statements (express or implied) respecting the growth of the Company’s interest income and profitability and other statements about growing the Company’s business. Forward-looking statements are not guarantees of future performance, actions, or developments and are based on expectations, assumptions and other factors that management currently believes are relevant, reasonable and appropriate in the circumstances, including, without limitation, the following assumptions: that the Company and its investee companies are able to meet their respective future objectives and priorities, assumptions concerning general economic growth, the Company being able to obtain financing on acceptable terms, the Company’s ability to attract and retain skilled staff, the absence of unforeseen changes in the legislative and regulatory framework for the Company, the COVID-19 pandemic not having a material impact on the Company’s operations, the products and technology offered by the Company’s competitors and the Company’s ability to protect intellectual proprietary rights . Although management believes that the forward-looking statements are reasonable, actual results could be substantially different due to the risks and uncertainties associated with and inherent to Timia’s business. Material risks and uncertainties applicable to the forward-looking statements set out herein include, but are not limited to, worldwide pandemics, such as the recent outbreak of the novel coronavirus COVID-19, may adversely impact multiple aspects of the Company’s business; the Company having insufficient financial resources to achieve its objectives; uncertainty as to the Company’s ability to raise additional funding; availability of further investments that are appropriate for the Company on terms that it finds acceptable or at all; successful completion of exits from investments on terms that constitute a gain when no such exits are currently anticipated; intense competition in all aspects of business; reliance on limited management resources; the Company’s dependence upon certain key personnel and their loss could adversely affect the Company’s ability to achieve its business objectives; general economic risks; new laws and regulations, risk of litigation, the Company may not achieve its publicly announced business objectives according to schedule, or at all; the Company’s success depending upon its ability to protect its intellectual property and its proprietary technology; the price of the Company’s shares may be subject to fluctuation in the future based on market conditions; the Company’s success depends on its ability to effectively manage growth; and significant disruptions of information technology systems or security breaches could adversely affect the Company’s business. Although Timia has attempted to identify factors that may cause actual actions, events or results to differ materially from those disclosed in the forward-looking statements, there may be other factors that cause actions, events or results not to be as anticipated, predicted, estimated or intended. Also, many of the factors are beyond the control of Timia. Accordingly, readers should not place undue reliance on forward-looking statements. Timia undertakes no obligation to reissue or update any forward-looking statements as a result of new information or events after the date hereof except as may be required by law. All forward-looking statements contained in this news release are qualified by this cautionary statement.