~Record quarterly revenue driving strong bottom line results~
VANCOUVER, BC, April 26, 2018– TIMIA Capital Corporation (“TIMIA” or the “Company”) (TSX-V:TCA) today announced financial results for the first quarter ended February 28, 2018.
First Quarter 2018 Highlights include:
- Record revenue of $360,179, up 72% over the same period last year.
- Assets under management grew over 92% compared with the same period last year.
- A significant increase in net income to $83,106 compared with a net loss of $133,108 in the same period last year.
- Significant gain on investment in the quarter of $308,903.
- Adjusted EBITDA* of $71,607 compared with an Adjusted EBITDA of $4,138 for the same period last year.
- TIMIA’s loan investment portfolio (Loans receivable) increased 42% to $5,964,085 compared to $4,192,409 in the same period last year.
“We’re off to a strong start for 2018 with record revenue and a strong gain on investments,” said Mike Walkinshaw, CEO of TIMIA. “We have continued to invest in the hottest sector in technology, the software as a service or SaaS industry, and have invested in key growth companies who continually outpace the market. As a result of the positive performance of our underlying investments, and the increased level of M&A activity in the private software industry, we’ve seen early exits in our portfolio. These exits, while intermittent, have resulted in profitable gains on investments as our revenue and income grow with the overall portfolio.”
Detailed Financial Review
During the quarter ended February 28, 2018, the Company continued to grow its revenue-based financing (“RBF”) business by completing two new RBF investments as well as successfully exiting two of its existing investments. The Company’s revenue is principally interest income generated under the Company’s RBF model. Interest income in the quarter ended February 28, 2018 was a record $339,154 compared with $208,879 in the same period last year, an increase of 62%. As the Company makes new investments, the number of monthly payments derived from the portfolio grows.
Consulting income was $21,025 in the quarter ended February 28, 2018 compared to no consulting revenue in the same period last year, resulting in total revenue of $360,179. The chart below highlights the Company’s revenue growth since Q1 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. During the quarter ended February 28, 2018, 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, 2018 were $585,605 compared with $342,783 for the same period last year. The increase in expenses was primarily related to the increase in interest expense resulting from the issuance of convertible debentures and non-convertible debentures with warrants. The remaining expense increase reflects the Company’s investment in infrastructure and brand awareness to support future growth noted above.
Adjusted EBITDA increased $67,469 to $71,607 for the quarter ended February 28, 2018 compared with an Adjusted EBITDA of $4,138 for the same period last year. The increase in Adjusted EBITDA is largely due to the significant increase in interest income.
During the quarter ended February 28, 2018, the Company posted a net income of $83,106 compared with a net loss of $133,108 for the last fiscal quarter. The increase in net income is primarily due to an approximate 62% increase in interest income over the same period last year and the Company recognizing a gain on investments of $308,903. The gain on investments comprises a realized gain on the successful exit on iCompass Technologies Inc.
As at February 28, 2018, the Company’s cash balance was approximately $4.4 million and working capital was approximately $4.3 million.
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, and Rise 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, 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 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 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:
Vice President, Capital Markets & Communications
TIMIA Capital Corporation
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