Axis Reports Q3 2024 Financial Results & Updates on Strategic Review Process
15 Mai 2024 - 2:00PM
Business Wire
Axis Auto Finance Inc. (“Axis” or the “Company”) (TSX: AXIS), a
financial technology company changing the way Canadians purchase
and finance used vehicles, today announced financial results for
the third quarter of fiscal 2024 ending March 31, 2024, and
provides a Strategic Review update.
Q3 2024 Financial
Highlights
- Total originations of $21.2 million, consisting of $4.5 million
in automotive originations and $16.7 million in equipment
originations;
- Revenues of $9.7 million in the quarter, unchanged from prior
year;
- Adjusted loss(1) of ($1.4) million as compared to
Adjusted loss(1) of ($3.9) million in prior year; and
- Net loss of ($2.1) million, as compared to a net loss of ($4.7)
million in the third quarter of fiscal 2023.
For the quarter ending March 31, 2024, auto loan originations
were $4.5 million, down from $32.4 million in auto loan
originations in the third quarter of 2023, as credit and
underwriting parameters continued to be tightened. The $4.5 million
in third quarter automotive loan originations were entirely owned
and on balance sheet, as Axis did not originate any near prime
volumes managed for Westlake Financial Services
(“Westlake”). In comparison, the Company recorded $16.7
million Westlake volumes originated in the same quarter of fiscal
2023.
Equipment finance origination volumes in the quarter were $16.7
million, a 21.9% decline from $21.3 million in the comparable
quarter of 2023. Third quarter originations consisted of $5.6
million owned and on balance sheet, with $11.1 million being
brokered for third parties or originated for syndication
partners.
Revenues for the quarter were $9.7 million, unchanged from the
third quarter of prior year. Automotive annualized realized credit
loss rate(2) for the quarter was 16.05%, an increase from
15.38% during the same quarter of the prior year, while equipment
finance annualized realized credit loss rate(2) for the
quarter as 2.87%, an increase from nil in the prior year.
Adjusted loss(1) for the quarter was ($1.4) million, or
($0.012) per share, as compared to Adjusted loss of ($3.9) million
or ($0.032) per share for the third quarter of 2023. The Company
recorded a Net loss for the quarter of ($2.1) million or ($0.017)
per share, as compared to net loss of ($4.7) million or ($0.039)
per share in the third quarter of 2023.
Axis Reconciliation(3) of Net Income (Loss) to Adjusted Earnings (Loss) –
Third Quarter
Q3
2024
Q3
2023
Net income / (loss), as
reported
(2,080,159)
(4,714,593)
Adjustments:
Non-cash interest
302,056
341,046
Depreciation
258,699
175,201
Amortization
133,190
167,001
Acquisitions and integration
-
8,823
Stock based compensation
53,444
161,354
IFRS-16 lease expense
(58,536)
(74,395)
Adjusted Earnings (Loss)
(1,391,306)
(3,935,563)
Axis Reconciliation(3) of Net Income (Loss) to Adjusted Earnings (Loss) –
Year to Date
YTD
31-Mar-2024
YTD
31-Mar-2023
Net Income (Loss), as reported in
financial statements
(5,377,339)
(6,090,886)
Adjustments:
Non-cash interest
803,143
930,394
Depreciation
601,577
575,535
Amortization
431,279
523,326
Acquisitions and integration
280,673
31,697
Stock-based compensation
111,630
437,121
IFRS-16 lease expense
(207,533)
(252,430)
Adjusted Earnings (Loss)
(3,356,570)
(3,845,243)
Strategic Review Update
The Company has entered into non-binding letters of intent with
two separate, unrelated parties for potential sales of the auto
finance and equipment finance businesses. The counterparties are in
the process of completing their due diligence. Axis management hope
to be in position to enter into definitive agreements in respect to
the auto finance and equipment finance business by the fiscal year
ended June 30, 2024.
There can be no assurances that either or both of the
transactions will be completed or that any successful transaction
will result from the strategic process. The company will provide
further updates on the process as developments warrant.
About Axis Auto Finance
Axis is a fintech lender providing alternative used vehicle
financing options to non-prime borrowers. Axis loans are offered
through over 3,000 automotive dealers nationwide. Approximately 30%
of Canadians (Source: Equifax) that have credit scores in the
non-prime range. All Axis auto loans report to the credit bureau,
resulting in over 70% of customers seeing a significant improvement
of their credit scores. Further information on the Company can be
found at
https://www.axisfinancegroup.com/investors-press-releases/.
(1) Adjusted loss is a non-IFRS measure as defined in the
Company’s MD&A, which is published on Sedar. Refer to pages 5
and 6 of the MD&A, that is incorporated by reference.
(2) Annualized realized credit loss rate is a non-IFRS measure
as defined in the Company’s MD&A which is published on Sedar.
Refer to pages 5 and 6 of the MD&A, that is incorporated by
reference.
(3) The reconciliation from Net Income (Loss) to Adjusted
Earnings (Loss) for the current quarter and for the full fiscal
year is shown on page 17 of the Company’s MD&A, which includes
the basis for adjustments.
Non-IFRS Measures
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. Non-IFRS measures are not standardized
financial measures under the financial reporting framework used to
prepare the financial statements of the Company to which the
non-IFRS measures relate and might not be comparable to similar
financial measures disclosed by other issuers.
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.
A full description of these measures can be found in the Management
Discussion & Analysis that accompanies the financial statements
for the corresponding period, which is published on Sedar.
The TSX Exchange has neither approved nor disapproved the
contents of this press release. Neither the Exchange nor its
Regulation Services Provider (as that term is defined in the
policies of the Exchange) accepts responsibility for the adequacy
or accuracy of this release.
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version on businesswire.com: https://www.businesswire.com/news/home/20240515663021/en/
Axis Auto Finance Inc. Todd Hudson CEO (416) 633-5626
ir@axisautofinance.com
Axis Auto Finance (TSX:AXIS)
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