~Company delivers record quarterly revenue and earnings~
VANCOUVER, BC, July 19, 2018 – TIMIA Capital Corporation (“TIMIA” or the “Company”) (TSX-V:TCA) today announced financial results for the second quarter ended May 31, 2018.
Second Quarter 2018 Highlights include:
- Record revenue of $476,940, up 78% over the same period last year.
- Record net income of $769,371 or $0.02 per share compared with a net loss of $104,462 or $0.00 per share in the same period last year.
- Total Assets grew over 93% compared with the same period last year including $4.9 million in cash as at May 31, 2018.
- Significant gain on investment of $1,036,104 as a result of a successful exit.
- Adjusted EBITDA* of $974,275 compared with an Adjusted EBITDA of $103,028 for the same period last year.
- TIMIA’s loan investment portfolio (Loans receivable) increased 31% to $6,073,948 compared to $4,633,561 in the same period last year.
“It’s an exciting time at TIMIA with record revenue and earnings,” said Mike Walkinshaw, CEO of TIMIA. “Our balance sheet is in a strong position as a result of recent portfolio exits, providing a solid foundation to grow our investment portfolio and related income. We’re evaluating an extensive list of investment candidates and expect to put more capital to work shortly.”
Detailed Financial Review
During the quarter ended May 31, 2018, the Company continued to grow its revenue-based financing (“RBF”) business by completing two new investments as well as successfully exiting an existing investment. The Company’s revenue is principally interest income generated under the Company’s RBF model. Interest income in the quarter ended May 31, 2018 was a record $428,940 compared with $228,246 in the same period last year, an increase of 88%. As TIMIA makes new investments, the number of monthly payments derived from the portfolio grows. Consulting revenue was $48,000 in the quarter ended May 31, 2018 compared to $40,000 consulting revenue in the same period last year, resulting in total revenue of $476,940. The increase in total revenue, compared to the same period last year, is primarily due to the increase in scale and improved performance of TIMIA’s portfolio of investments.
The chart below highlights the Company’s revenue growth since Q2 of 2016.
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 the portfolio companies with their growth plans. At the same time, the Company is investing to support its future growth.
Total expenses for the quarter ended May 31, 2018 were $704,677 compared with $372,691 for the same period last year. the Company invested in the business to build a scalable investment platform and attract key personnel, with the following key items being highlighted:
- Administrative, management and directors’ wages and fees has increased due to a team headcount increase as the organization scales,
- Office, promotion and miscellaneous has increased as the Company invests in its deal origination engine and its public market activities, and
- the interest expense is associated with the issuance of convertible debentures and debentures with warrants. Interest expense and share-based payments were higher in the three and six months ended May 31, 2018 because the Company had issued further debentures with warrants to fund additional investments in comparison to the previous year.
Adjusted EBITDA increased $871,247 to $974,275 for the quarter ended May 31, 2018 compared with an Adjusted EBITDA of $103,028 for the same period last year. The increase in Adjusted EBITDA is largely due to the significant gain on investment recognized on the QuickMobile exit.
During the quarter ended May 31, 2018, the Company posted a net income of $769,371 compared with a net loss of $104,462 in the same period last year. The increase in net income is primarily due to the Company recognizing a gain on investments of $1,036,104 on the successful exit of QuickMobile Inc.
As at May 31, 2018, the Company’s cash balance was approximately $4.9 million and working capital was approximately $4.8 million compared with $713,792 and $1,160,034 respectively, as of November 30, 2017.
TIMIA’s business model is delivering two distinct returns that help drive shareholder value:
- High yield interest income, as a result of the successful performance of TIMIA’s underlying investments, delivers a stream of profitable cash flow that has been growing, as TIMIA’s asset base grows.
- TIMIA is investing in high-quality companies in an active industry. As a result, we’ve seen successful early exits in investee companies such as Lambda, iCompass, Rise, and QuickMobile delivering periodic gains manifesting in profitable quarters. At the same time, TIMIA is focused on investing in new and exciting opportunities to support longer term profitability.
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, 2018 and 2017 and the associated Management’s Discussion & Analysis respecting the same period, which can be downloaded from the Company’s profile on SEDAR at http://www.sedar.com.
*Non-GAAP Measures and Other Financial Measures
In managing our business and assessing our financial performance, we supplement the information provided by the GAAP-based financial statements with metrics and non-GAAP financial measures which are utilized by our management to evaluate our performance. Although we believe these measures are widely used in the specialty finance industry, some may not be defined by us in precisely the same way as by other companies in the specialty finance industry, so there may not be reliable ways to compare us to other companies. Adjusted EBITDA represents net loss and comprehensive loss from continuing operations (the most directly comparable GAAP measure) excluding amounts for: income tax expense; interest expense; depreciation and amortization; non-cash revenue; non-cash gains; equity-based compensation; and all other non-cash expenses. We believe Adjusted EBITDA is a helpful measure because it allows us to evaluate our performance by removing from our operating results items that do not relate to our core operating performance. Adjusted EBITDA is not a measure of financial performance under GAAP and should not be considered in isolation or as a substitute for net loss and comprehensive loss from continuing operations, the most directly comparable GAAP financial measure. Adjusted EBITDA is not defined in the same manner by all companies and may not be comparable to other similarly titled measures of other companies unless the definition is the same.
About TIMIA Capital Corporation
TIMIA Capital Corporation is a specialty finance company that provides revenue financing to technology companies in exchange for a stream of payments based on revenue. The alternative financing option complements both debt and equity financing, while allowing entrepreneurs to retain control of their business. TIMIA’s target market is the fast-growing business-to-business software as a service (or SaaS) segment. TIMIA is managed by a seasoned investment team with a track record of originating and managing debt and equity investments, as well as monitoring and compliance.
For more information about TIMIA Capital Corporation, please visit www.timiacapital.com
For more information, please contact:
Mike Walkinshaw, CEO
Vice President, Capital Markets & Communications
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 expectations regarding putting more capital to work shortly. 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 and the absence of unforeseen changes in the legislative and regulatory framework for the Company. 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, the Company having insufficient financial resources to achieve its objectives; 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; general economic risks; new laws and regulations and risk of litigation. 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.