~ Record annual revenue and asset growth top previous years’ results~
VANCOUVER, BC, March 15, 2019 – TIMIA Capital Corporation (“TIMIA” or the “Company”) (TSX-V:TCA) today announced financial results for the fourth quarter and year ended November 30, 2018.
2018 Annual Highlights include:
- Record revenue of $1,738,239, up 67% over prior year.
- Included in total revenue, interest income from investments increased 58% to $1,521,999 compared with last year.
- Total assets grew over 61% to $14.6 million compared with the prior year. Cash balance, as part of assets, was $3,749,949 compared with $713,792 as at November 30, 2017.
- A significant increase in net income resulted in a net income of $18,838 compared with a net loss of $197,620 in the prior year.
- Gain on investments was up $1,194,175 to $1,582,906 for the year ended November 30, 2018 compared with a $367,827 gain on investments in the prior year.
- Adjusted EBITDA* increased 539% or $1,087,860 to $1,335,573 compared with an Adjusted EBITDA of $247,713 for the prior year.
- Net earnings per share were breakeven compared with a $0.01 loss per share in the prior year.
- TIMIA’s loan investment portfolio (Loans receivable) increased 37% to $9,680,390 compared to $7,075,608 in the prior year period.
Fourth Quarter 2018 Highlights Include:
- Record quarterly revenue of $501,129, up 60% compared to the same period last year.
- TIMIA put a $2,000,000 revenue financing facility in place for FormHero Inc. with an initial disbursement of $1,000,000.
- TIMIA provided Aprio Inc. with a $1,000,000 facility with an initial advance of $400,000.
- TIMIA invested an additional $500,000 in Paltech Solutions dba 7Geese Inc. for a total investment of $1,5000,000 after the company met key milestone.
- TIMIA expanded to the US providing a USD $2,500,000 financing arrangement with Texas-based software company, RealSavvy, Inc. and a first disbursement of USD $1,000,000.
- TIMIA closed $1,000,000 in non-dilutive capital with a co-investment from Manitou Investment Management Ltd.
- Adjusted EBITDA loss of $100,347 compared with an Adjusted EBITDA of $16,533 for the prior year period.
“For the second year in a row, we achieved record growth in revenue and assets under management and have reshaped our business for 2019,” said Mike Walkinshaw, CEO of TIMIA. “Our pipeline of software as a service or SaaS companies increased significantly as the number of new transactions more than doubled in 2018 in comparison to 2017. We enjoyed working with some great entrepreneurs in 2018 and look forward to helping support the growth of more SaaS companies in 2019.”
Detailed Financial Review
During the year ended November 30, 2018, the Company continued to grow its revenue-financing (“RF”) business by completing eleven RF investments as well as successfully exiting four investments from its loan portfolio and another from its equity portfolio. The Company’s revenue is primarily interest income generated under the Company’s RF model. Interest income in the year ended November 30, 2018 was a record $1,521,999 compared to $960,545 in the prior fiscal year.
The 58% increase in interest income is driven from two sources:
- As the Company makes new investments, the number of monthly payments derived from the portfolio grows.
- Under the RF structure, as the revenue of the underlying portfolio grows, the investees make larger blended interest and principal payments to the Company.
Income from transaction and other fees was $216,240 in the year ended November 30, 2018 compared to $80,350 in the prior fiscal year, resulting in a record total revenue of $1,738,239.
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 in their growth plans. Furthermore, management expects the payment amounts to increase over time as both new and follow-on investments are made and as payments increase from the underlying portfolio. During the year ended November 30, 2018, TIMIA benefited from increased payments (combined principal and interest) as a result of the strong revenue growth of its underlying portfolio. At the same time, the Company increased its investments in infrastructure, including key staff and brand awareness.
Total expenses for the year ended November 30, 2018 were $2,873,167 compared with $1,604,823 for the prior year. The increase in expenses was primarily related to the increase in interest expense ($791,893 of the $2,873,167) resulting from the issuance of debentures with warrants. The remaining expense increase reflects the Company’s investment in infrastructure, public market and brand awareness.
Adjusted EBITDA increased 1,087,860 to $1,335,573 for the year ended November 30, 2018 compared with an Adjusted EBITDA of $247,713 for the prior year. The increase in Adjusted EBITDA is primarily due to the significant increase in interest income.
During the year ended November 30, 2018, the Company posted net earnings of $18,838 compared with a net loss of $197,620 for the last fiscal year. The increase in net income is primarily due to an approximate 58% increase in interest income over the last fiscal year and the Company recognizing a gain on investments of $1,582,906. The gain on investments comprises recognized gains from the successful exits of Rise People Inc., iCompass Technologies Inc., QuickMobile Inc., Beanworks Solutions Inc., and Mazza Innovation Ltd.
As at November 30, 2018, the Company’s cash balance was $3,749,949 and working capital was $3,614,268 compared to $713,792 and $1,160,034 respectively as at November 30, 2017. Subsequent to year end, the Company increased cash resources by over $8.7 million by establishing and funding a Limited Partnership.
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 growing stream of profitable cash flow, 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 Rise People Inc., iCompass Technologies Inc., QuickMobile Inc., Beanworks Solutions Inc. delivering periodic gains manifesting in profitable quarters in the near term. At the same time, TIMIA is focused on investing in new and exciting opportunities to support longer term profitability.
*Non-GAAP Measures and Other Financial Measures
In managing our business and assessing our financial performance, we supplement the information provided by the financial statements presented in accordance with GAAP 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; 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 and 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 growth capital to technology companies in exchange for payments based on monthly revenue. This alternative financing option complements both debt and equity financing, while allowing entrepreneurs and existing stakeholders to retain ownership and control of their business. TIMIA’s singular focus is the fast growing, global, business-to-business Software-as-a-Service (or SaaS) segment. We align ourselves with entrepreneurial management teams growing their sales from $1 million to $10 million in Annual Recurring Revenue. 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.
Disclaimer for Forward-Looking Information
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 as to payment amounts in portfolio companies increasing and the growing stream of profitable cash flow as TIMIA’s asset base grows. 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, the regulated nature of the industry in which the Company operates, intense competition in all aspects of business, reliance on limited management resources, general economic risks, new laws and regulations, risk of litigation, and volatility of the price of the Company’s common shares. 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.