~ Record annual revenue and asset growth highlight strong finish to 2017~
VANCOUVER, BC, March 28, 2018– TIMIA Capital Corporation (“TIMIA” or the “Company”) (TSX-V:TCA) today announced financial results for the fourth quarter and year ended November 30, 2017.
2017 Annual Highlights include:
- Record revenue of $1,040,895, up 69% over prior year.
- Assets under management grew over 80% compared with the prior year.
- A significant increase in net income resulted in a reduced net loss of $197,620 compared with a net loss of $424, 951 in the prior year.
- Gain on investments was $367,827 compared with a $12,285 gain on investments in the prior year.
- Adjusted EBITDA* increased $180,919 to $138,852 compared with an Adjusted EBITDA loss of $42,067 for the prior year period.
- Net loss per share of $0.01 compared with a $0.02 loss per share in the prior year
- Loans receivable increased 62% to $6,832,962 compared to $4,218,498 in the prior year period.
Fourth Quarter 2017 Highlights Include:
- Record quarterly revenue of $312,171, up 48% compared to the same period last year.
- Adjusted EBITDA loss of $17,588 compared with an Adjusted EBITDA loss of $21,367 for the prior year period.
“We’ve achieved record growth in revenue and assets under management and see continued growth in 2018,” said Mike Walkinshaw, CEO of TIMIA. “Our investments in the private software as a service or SaaS industry have provided strong topline results and a strengthening bottom line. Alongside this growth, we’ve been investing in the Company’s infrastructure and marketing campaigns to support TIMIA’s continued growth into new markets. Supporting our asset growth through non-dilutive capital, we’re leveraging our co-investment or participation financing model and utilizing the power of blockchain technology to help expand our investor reach.”
“2017 was a great building year for TIMIA. 2018 will be about increasing our presence in new markets outside of BC and outside Canada. With six current investments under management, TIMIA has $10.4 million committed and is continuously seeking new and exciting investments in the SaaS industry. I look forward to keeping the public informed as events and milestones unfold.”
Detailed Financial Review
During the year ended November 30, 2017, the Company continued to grow its Revenue-based financing (“RBF”) business by completing three RBF investments as well as successfully exiting one of its first RBF investments. The Company’s revenue is primarily interest income generated under the Company’s RBF model. Interest income in the year ended November 30, 2017 was a record $960,545 compared to $594,491 in the prior fiscal year.
The 62% 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 RBF structure, as the revenue of the underlying portfolio grows, the investees make larger blended interest and principal payments to the Company.
Consulting income was $80,350 in the year ended November 30, 2017 compared to $20,000 in the prior fiscal year, resulting in total revenue of $1,040,895
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. During the year ended November 30, 2017, TIMIA benefitted 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, 2017 were $1,604,823 compared with $1,051,486 for the prior year. The increase in expenses was primarily related to the increase in interest expense resulting from the issuance of convertible debentures and debentures with warrants. The remaining expense increase reflects the Company’s investment in infrastructure and brand awareness.
Adjusted EBITDA increased $180,919 to $138,852 for the year ended November 30, 2017 compared with an Adjusted EBITDA loss of $42,067 for the prior year period. The increase in Adjusted EBITDA is primarily due to the significant increase in interest income.
During the year ended November 30, 2017, the Company posted a net loss of $197,620 compared with a net loss of $424,951 for the last fiscal year. The increase in net income is primarily due to an approximate 62% increase in interest income over the last fiscal year and the Company recognizing a gain on investments of $367,827. The gain on investments comprises a realized gain of $35,310 on disposition of an investment and $332,517 from the increased value of TIMIA’s equity stake in Moj.io.
As at November 30, 2017, the Company’s cash balance was $713,792 and working capital was $1,160,034. Subsequent to year end, the Company increased cash resources by over $3 million by exiting two portfolio investments.
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 Lambda, iCompass, and Rise 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 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
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 continued growth in 2018 and the Company’s intention to increase its presence in new markets. 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.