AXIS Axis Auto Finance Inc

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 fourth quarter and the 2024 fiscal year.

Q4 2024 Financial Highlights

• Total originations of $16.2 million, consisting of $4.3 million in automotive originations and $11.9 million in equipment originations;
• Revenues of $8.1 million in the quarter, a 19% decline year over year;
• Write off of deferred tax assets, resulting in an income tax charge of $10.8 million in the quarter;
• Adjusted loss(1) of ($16.9) million as compared to Adjusted loss(1) of ($1.4) million in prior year; and
• Net loss of ($17.7) million, as compared to a net loss of ($20.1) million in the fourth quarter of fiscal 2023.

For the quarter ending June 30, 2024, auto loan originations were $4.3 million, down from $30.3 million in auto loan originations in the fourth quarter of 2023, as credit and underwriting parameters continued to be tightened. The $4.3 million in fourth 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, of the $30.3 million of total originations in Q4 2023, the Company recorded $12.5 million Westlake volumes.

Equipment finance origination volumes in the quarter were $11.9 million, a 63% decline from $32.2 million in the comparable quarter of 2023. Fourth quarter originations were entirely brokered for third parties or originated for syndication partners.

Revenues for the quarter were $8.1 million, a 19% decline from the fourth quarter of prior year. Automotive annualized realized credit loss rate(2) for the quarter was 19.59%, an increase from 12.90% during the same quarter of the prior year, while equipment finance annualized realized credit loss rate(2) for the quarter was 6.13%, an increase from nil in the prior year.

Adjusted loss(1) for the quarter was ($16.9) million, or ($0.139) per share, as compared to Adjusted loss of ($1.4) million or ($0.011) per share for the fourth quarter of 2023. The Company recorded a Net loss for the quarter of ($17.7) million or ($0.147) per share, as compared to net loss of ($20.1) million or ($0.165) per share in the fourth quarter of 2023.

Fiscal 2024 Financial Highlights

• Total fiscal 2024 originations of $109.5 million, consisting of $28.1 million in automotive originations and $81.4 million in equipment originations;
• Total owned and managed finance receivables of $192.1 million, consisting of $104.0 million in auto and $88.1 million in equipment;
• Revenues of $38.8 million in fiscal 2024, a decline of 4.3% from prior year;
• Write off deferred tax balances, resulting in a charge of $9.0 million in fiscal 2024;
• Adjusted loss(1) of ($20.2) million, as compared to Adjusted loss(1) of ($5.2) million in fiscal 2023; and
• Net loss of ($23.1) million, down from Net loss of ($26.2) million in prior year.

For the fiscal year ended June 30, 2024, auto loan originations were $28.1 million, all of which were on balance sheet originations. This represented a 62% reduction from $74.2 million in on balance sheet auto loan originations in fiscal 2023.

Equipment finance origination volumes in fiscal 2024 were $81.4 million, consisting of $29.9 million in owned and on balance sheet, with $51.5 million being brokered for third parties or originated for syndication partners. Fiscal 2024 equipment originations of $81.4 million represented a 26% year over year decrease from $110.5 million in fiscal 2023.

Axis’s total owned and managed equipment portfolio as of June 30, 2024 were $88.1 million, an increase from $71.8 million a year earlier. In aggregate, the Axis’ total automotive and equipment on balance sheet and managed assets were $192.1 million as at June 30, 2024, a 42% year over year decrease from $334.5 million.

Revenues for the year were $38.8 million, a decline of 4.3% year-over-year. Automotive annualized realized credit loss rate(2) for fiscal 2024 was 15.18%, up from 11.13% during fiscal 2023, while equipment finance annualized realized credit loss rate(2) for fiscal 2024 was 2.35%, up from nil in the prior year. Company concluded the year with reportable delinquency of 11.15%, up from 5.17% a year earlier.

Adjusted loss(1) for fiscal 2024 was ($20.2) million, or ($0.167) per share, as compared to Adjusted loss of ($5.2) million or ($0.043) per share for fiscal 2023. The Company recorded a Net loss in fiscal 2024 of ($23.1) million or ($0.191) per share, as compared to Net loss of ($26.2) million or ($0.215) per share in fiscal 2023.

Axis Reconciliation(3) of Net Income (Loss) to Adjusted Earnings (Loss) – Fourth Quarter

 

Q4 2024

 

Q4 2023

Net income / (loss), as reported

 

(17,783,553)

 

(20,091,194)

Adjustments:

 

 

 

 

Non-cash interest

 

342,782

 

288,243

Depreciation

 

88,557

 

241,965

Amortization

 

411,596

 

171,978

Acquisitions and integration

 

11,820

 

34,239

Stock based compensation

 

22,149

 

214,987

IFRS-16 lease expense

 

(30,513)

 

(75,225)

Goodwill impairment

 

-

 

17,810,702

 

   

Adjusted Earnings (Loss)

 

(16,937,162)

 

(1,404,305)

Axis Reconciliation(3) of Net Income (Loss) to Adjusted Earnings (Loss) – Fiscal Year

 

FY 2024

 

FY 2023

Net Income (Loss), as reported in financial statements

 

(23,160,892)

 

(26,182,080)

Adjustments:

 

 

 

 

Non-cash interest

 

1,145,923

 

1,218,637

Depreciation

 

690,134

 

817,500

Amortization

 

842,875

 

695,304

Acquisitions and integration

 

292,493

 

65,936

Stock-based compensation

 

133,779

 

652,108

IFRS-16 lease expense

 

(238,046)

 

(327,655)

Goodwill impairment

 

-

 

17,810,702

     

Adjusted Earnings (Loss)

 

(20,293,734)

 

(5,249,548)

About Axis Auto Finance

Axis is a fintech lender providing alternative used vehicle financing options to non-prime borrowers. Axis loans are offered through automotive dealers to 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 4 and 5 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 4 and 5 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 18 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.

View source version on businesswire.com: https://www.businesswire.com/news/home/20240927733066/en/

Axis Auto Finance Inc. Todd Hudson CEO (416) 633-5626 ir@axisautofinance.com