ECN Capital Reports US$0.07 in Adjusted Earnings per Common Share in Q3-2018
Announces Sale of Railcar Assets
$50+ million of EBITDA in the quarter
TORONTO, Nov. 12, 2018 (GLOBE NEWSWIRE) -- ECN Capital Corp. (TSX: ECN) (“ECN Capital” or the “Company”) today reported financial results for the three-month period ending September 30, 2018. Readers should note that as of January 1, 2018, the Company changed its presentation and functional currency from Canadian dollars to U.S. dollars.
For the three-month period ending September 30, 2018, ECN Capital reported Adjusted Net Income applicable to common shareholders of $21.3 million or $0.07 per share (basic) versus $13.4 million or $0.04 per share (basic) for the previous three-month period ending June 30, 2018 and $12.8 million or $0.03 per share (basic) for the same period last year.
Book Value per Common Share as at September 30, 2018 was $3.47 versus $3.63 as at the end of the previous three-month period and $3.62 for the same period last year.
Originations for the three-month period ending September 30, 2018 were $509.0 million versus $505.2 million in the previous three-month period and $90.7 million for the same period last year.
Total Earning Assets Managed and Advised as at September 30, 2018 were $28.8 billion, versus $28.2 billion as at June 30, 2018.
EBITDA, net of provision for credit losses, for the three-month period ending September 30, 2018 was $50.9 million versus $36.6 million for the previous three-month period and $34.4 million for the same period last year.
Operating Expenses for the three-month period ending September 30, 2018 were $34.7 million versus $25.0 million reported for the previous three-month period ending June 30, 2018 and $8.5 million for the same period last year.
Net Income (loss) for the three-month period ending September 30, 2018 was ($57.5) million versus $2.6 million for the previous three-month period and ($40.6) million for the same period last year.
“With our transition to a business services company serving banks and financial institutions largely complete, I am excited to have a $50 million EBITDA quarter,” said Steven Hudson, CEO of ECN Capital Corp. “Further, we now expect 97% of our Q4 2018 adjusted operating income before tax to come from our new businesses.”
Additional Rail Sale
ECN Capital also announced today that it has entered into a definitive agreement to sell the remaining railcar assets to GATX Corporation for proceeds of approximately $229 million. The Company recorded a total after-tax loss of $38.5 million in the third quarter of 2018 on this sale. The transaction is expected to close in the fourth quarter of 2018.
Combined with the earlier railcar assets sold on October 17, 2018, ECN recorded a total after-tax loss of approximately $67.2 million in the third quarter of 2018 for these two transactions, reflecting a combined 0.90x book value of assets (together, the “2018 Railcar Dispositions”).
“The 2018 Railcar Dispositions were completed on an accelerated basis to execute the wind-down of our legacy rail assets,” said Jim Nikopoulos, ECN Capital’s President. “These transactions have resulted in the sale of substantially all of our rail portfolio and will release approximately $140 million in equity capital for deployment. Including these transactions, ECN’s total legacy assets have been reduced from approximately $5 billion at year-end 2016 to approximately $450 million, while preserving book value through the process.”
The Company’s Board of Directors has authorized and declared a quarterly dividend of $0.01 per outstanding common share of ECN Capital for the third quarter of 2018. The dividend will be paid on January 15, 2019 to shareholders of record at the close of business on December 31, 2018. These dividends are designated to be eligible dividends for purposes of section 89(1) of the Income Tax Act (Canada).
The Company’s Board of Directors declared the following dividends on ECN Capital’s preferred shares:
-- A quarterly dividend of $0.40625 per outstanding Cumulative 5-Year Rate Reset Preferred Share, Series A (TSX: ECN.PR.A) payable on December 31, 2018 to shareholders of record on the close of business on December 17, 2018. These dividends are designated to be eligible dividends for purposes of section 89 (1) of the Income Tax Act (Canada). -- A quarterly dividend of $0.390625 per outstanding Cumulative 5-Year Rate Reset Preferred Share, Series C (TSX: ECN.PR.C) payable on December 31, 2018 to shareholders of record on the close of business on December 17, 2018. These dividends are designated to be eligible dividends for purposes of section 89 (1) of the Income Tax Act (Canada).
The Company will host its analyst briefing to discuss these results commencing at 5:30 PM (ET) on Monday November 12, 2018. The call can be accessed as follows:
Webcast http://services.choruscall.ca/links/ecncapitalcorp20181112.html North America 1-800-319-8560 Toll-free dial in International http://services.choruscall.ca/public/accessnumbers.html Passcode 47234# Presentation slides http://ecncapitalcorp.com/investors/presentations
The webcast will be available until December 12, 2018. A recording of the conference call may also be accessed until February 12, 2019 by dialing 1-800-319-6413 and entering the passcode 2725#.
The Company’s audited consolidated financial statements have been prepared in accordance with International Financial Reporting Standards (“IFRS”) as issued by the International Accounting Standards Board (“IASB”) and the accounting policies we adopted in accordance with IFRS.
The Company believes that certain Non-IFRS Measures can be useful to investors because they provide a means by which investors can evaluate the Company’s underlying key drivers and operating performance of the business, exclusive of certain adjustments and activities that investors may consider to be unrelated to the underlying economic performance of the business of a given period. Throughout this Press Release, management used a number of terms and ratios which do not have a standardized meaning under IFRS and are unlikely to be comparable to similar measures presented by other organizations. A full description of these measures can be found in the Management Discussion & Analysis that accompanies the financial statements for the year ended December 31, 2017.
ECN Capital’s management discussion and analysis as at and for the three-month period ended June 30, 2018 has been filed on SEDAR (www.sedar.com) and is available under the investor section of the Company’s website (www.ecnapitalcorp.com).
About ECN Capital Corp.
With managed and advised assets of more than US$29 billion, ECN Capital Corp. (TSX: ECN) is a leading provider of prime credit portfolios to more than ninety US financial institutions. ECN Capital originates, manages and advises on prime credit assets offering unsecured and secured consumer portfolio solutions as well as credit card portfolios. These services are offered through three operating businesses: Service Finance, Triad Financial Services and The Kessler Group.
John Wimsatt 647-649-4634 email@example.com
This release includes forward-looking statements regarding ECN Capital and its business. Such statements are based on the current expectations and views of future events of ECN Capital’s management. In some cases the forward-looking statements can be identified by words or phrases such as “may”, “will”, “expect”, “plan”, “anticipate”, “intend”, “potential”, “estimate”, “believe” or the negative of these terms, or other similar expressions intended to identify forward-looking statements. Forward-looking statements in this press release include those relating to the future financial and operating performance of ECN Capital, the strategic advantages, business plans and future opportunities of ECN Capital and the ability of ECN Capital to access adequate funding sources, identify and execute on acquisition opportunities and transition to an asset management business. The forward-looking events and circumstances discussed in this release may not occur and could differ materially as a result of known and unknown risk factors and uncertainties affecting ECN Capital, including risks regarding the equipment finance industry, economic factors, and many other factors beyond the control of ECN Capital. No forward-looking statement can be guaranteed. Forward-looking statements and information by their nature are based on assumptions and involve known and unknown risks, uncertainties and other factors which may cause our actual results, performance or achievements, or industry results, to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statement or information. Accordingly, readers should not place undue reliance on any forward-looking statements or information. A discussion of the material risks and assumptions associated with this outlook can be found in ECN Capital’s September 30, 2018 MD&A and Alternate AIF Disclosure Document dated March 19, 2018 which has been filed on SEDAR and can be accessed at www.sedar.com. Accordingly, readers should not place undue reliance on any forward-looking statements or information. Except as required by applicable securities laws, forward-looking statements speak only as of the date on which they are made and ECN Capital does not undertake any obligation to publicly update or revise any forward-looking statement, whether as a result of new information, future events, or otherwise.