~Record quarterly revenue and 218% increase in loan investment portfolio highlight growth and results from investments in infrastructure; TIMIA retains IR Support with Incite Capital Markets~
VANCOUVER, BC, April 26, 2019 – TIMIA Capital Corporation (“TIMIA” or the “Company”) (TSX-V:TCA) today announced financial results for the first quarter ended February 28, 2019.
First Quarter 2019 Highlights include:
- Record revenue of $570,563 up 58% over the same period last year.
- Assets under management grew 26% to $14,617,521 compared with the same period last year.
- Adjusted EBITDA* of $111,154 compared with an Adjusted EBITDA of $359,135 for the same period last year. The latter reflecting the gain on investment in Q1 of 2018.
- TIMIA’s loan investment portfolio (Loans receivable) increased 218% to $13,026,861 compared to $5,964,085 in the same period last year.
- A net loss of $0.01 per share or $255,480 compared with a net income of $133,108 in the same period last year. Similar to Adjusted EBITDA results, Q1 2018 results reflect the gain on investment during the quarter.
“Our investments in infrastructure and deal generation continue to pay off with record revenue and 218% increase in loan book,” said Mike Walkinshaw, CEO of TIMIA. “We’re seeing an increase in private credit opportunities in the software space as the fintech marketplace evolves and drives more capital towards exciting SaaS companies.”
“We’ve recently increased our assets under management by 55% through a non-dilutive limited partnership structure that allows us to scale up and increase revenue by putting more capital to work. We have cash on our balance sheet and expect to put it to work in the near term for SaaS companies currently in our backlog of funding opportunities.”
Detailed Financial Review
During the quarter ended February 28, 2019, the Company continued to grow its revenue financing (“RF”) business by completing US$3,000,000 and CDN$2,000,000 of new loan facilities. The Company’s revenue is principally interest income generated under the Company’s RF model. Interest income in the quarter ended February 28, 2019 was a record $510,330 compared with $339,154 in the same period last year, an increase of 50%. As the Company makes new investments, the number of monthly payments derived from the portfolio grows. Income from transaction and other fees was $60,233 in the three months ended February 28, 2019 compared to $21,025 in the same period last year. Total revenue for the three months ended February 28, 2019 increased 58%, to $570,563 compared to $360,179 for the three months ended February 28, 2018. The chart below highlights the Company’s revenue growth since Q1 of 2015.
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. During the quarter ended February 28, 2019, TIMIA benefited from increased payments (combined principal and interest) as a result of the revenue growth of its underlying portfolio. At the same time, the Company is investing to support future growth.
Total expenses for the quarter ended February 28, 2019 were $712,406 compared with $585,605 for the same period last year. The increase in expenses was primarily related to increases in deal generation and related communications, accounting and legal, and investor relations. The remaining expense increase reflects the Company’s investment in infrastructure and brand awareness to support future growth noted above.
Adjusted EBITDA for the quarter ended February 28, 2018 is $111,154 compared with an Adjusted EBITDA of $359,135 for the same period last year. The change in Adjusted EBITDA primarily reflects the gain on investments in Q1 2018 compared with Q1 2019 without these gains on investments.
During the quarter ended February 28, 2019, the Company posted a net loss of $255,480 compared with a net income of $83,106 for the last fiscal quarter. The change in results are primarily due to the Company recognizing a gain on investments of $308,903 in Q1 2018 comprising a realized gain on the successful exit on iCompass Technologies Inc.
As at February 28, 2019, the Company’s cash balance was approximately $670,105 and working capital was approximately $668,871.
TIMIA Retains Incite Capital Markets
To ensure regulatory compliance with TSX-V policy 3.4 related to Investor Relations Activities, TIMIA announces the engagement of Incite Capital Markets Inc. (“Incite”) for Investor Relations and related services. Certain principals and executives of Incite own approximately 6% of TIMIA’s outstanding shares. Incite’s President, Darren Seed, is an employee of TIMIA and holds the position of Vice President, Capital Markets & Communications. The initial term of Incite’s engagement is six months. No consideration is payable to Incite under the terms of the engagement as all compensation will be paid directly to Incite’s service providers on the terms and in the amounts agreed between the Company and each individual service provider.
Incite Capital Markets is an independent, innovative and trusted capital markets advisory corporation. Built on a proven track record of over 20 years experience helping companies achieve the best results possible, Incite provides expertise in capital markets, corporate communications, and investor and media relations. In addition to strategic insights, Incite invests in small to mid-size technology companies. This unique and specialized synergy where corporate finance and communications meet, is an advantage for any company looking to elevate their profile.
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 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 months ended February 28, 2019 and 2018 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 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 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
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 as to putting capital to work in the near term for SaaS companies, TIMIA continuing to build the value and size of its portfolio and growing cashflow. 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.