~Company continues strong growth generating record quarterly revenue with 80% year-over-year growth and 110% year-over-year growth in total assets~
VANCOUVER, BC, April 22, 2020 – TIMIA Capital Corporation (“TIMIA” or the “Company”) (TSX-V:TCA / OTC: TIMCF) today announced financial results for the first quarter ended February 29, 2020.
First Quarter 2020 Highlights include:
- Record revenue of $1,024,188, up 80% over the same period last year.
- Posted record interest income from investments of $939,701, included in total revenue, an increase of 84% compared with the same period last year.
- Total assets increased 105% to $30.0 million as at February 29, 2020 compared to the same time period last year. Cash balance, as part of assets, was $6.8 million compared to $4.7 million as at November 30, 2019.
- Reported net income of $444,144 compared with a net loss of $255,480 for the same period last year. Included in the net income is a gain on sale
- TIMIA’s loan investment portfolio (loans receivable) increased by 71% to $21,644,460 in comparison to the same period last year.
“The Company posted another record quarter of revenue and our financial position has never been stronger,” said Mike Walkinshaw, CEO of TIMIA Capital Corporation. “During this period of uncertainty, we are confident in our abilities and our fintech platform to navigate ahead successfully. We have the right capital structure in place and will continue to be vigilant with new and previous investments in select SaaS companies.”
Detailed Financial Review
During the quarter ended February 29, 2020, the Company continued to grow its revenue-financing (“RF”) business by completing three investments and distributing growth capital of US$1,500,000 to an American company and $900,000 follow-on investments to two Canadian companies.
The Company’s revenue is primarily interest income generated under the Company’s RF model. As the Company makes new investments, the amount of monthly payments derived from the portfolio grows. Interest income in the three months ended February 29, 2020 was $939,701 compared to $510,330 in the same period last year, a 84% increase. Income from transaction and other fees was $84,487 in the three months ended February 29, 2020 compared to $60,233 in the same period last year. Total revenue for the three months ended February 29, 2020 increased 80% to $1,024,188 compared to $570,563 for the three months ended February 29, 2019.
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 for the quarter ended February 29, 2020 were $1,189,484 compared with $712,406 for the same period last year. The change reflects an increase in interest expense from the Company’s successful closing of a lender financing facility, an increase in the expected credit loss provision, increased legal costs associated with underwriting plus the timing of compensation expenses occurring in the current period with no comparative expense in the prior period.
During the quarter ended February 29, 2020, the Company posted net income of $444,144 compared with a net loss of $255,480 in the same period last year. The year-over-year improvement is primarily due to the continued growth in size of the portfolio and resulting revenue increase and $516,009 recognized as gains on investments due from two successful exits of its loan portfolio investments.
As at February 29, 2020, the Company’s cash balance was approximately $6.8 million and working capital was approximately $3.9 million, compared with approximately $4.7 million and $4.6 million, respectively, as of November 30, 2019. The funds raised by the private placement of debentures, the limited partnership, co-investment agreements, access to the Company’s lender financing facility, and cash generated from the underlying portfolio are expected to provide the Company with enough funds to operate and grow the business into 2021.
This news release is qualified in its entirety by the Company’s condensed interim financial statements for the three months ended February 29, 2020 and February 28, 2019 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.
TIMIA is providing an update with respect to the impact from the COVID-19 virus outbreak on its current operations. To date, there have been no known cases of COVID-19 at any of TIMIA’s offices.
Management believes that recurring revenue software companies offer security and stability. The Company utilizes a proprietary credit scoring process that focuses on high customer retention rates as well as a well-diversified customer base. These two factors, along with other key attributes such as size and cash runway, are structured to provide downward protection in an uncertain economic environment. Many of our portfolio companies have been agile in this environment, including in many instances transitioning employees to work remotely. At this time, none of the Company’s investments are in arrears. However, it may be several months before the full effect of the economic slowdown is felt in the portfolio. Management is in the process of reviewing revised and updated forecasts for each of the portfolio companies and are working with them to determine the best way to support them through the crisis. Management has decided to increase the size of our capital reserves thereby reducing our allocation to new deals.
Fortunately, TIMIA employees are able to work from home and maintain close contact and relationships with current portfolio companies and new and exciting SaaS investment opportunities.
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 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 deployed capital generating future returns and the expectation that the funds raised by the private placement of debentures, the limited partnership, co-investment agreements and cash generated from the underlying portfolio will provide the Company with enough funds to operate and grow the business into 2021. 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.