Axis Auto Finance Inc. (“Axis” or the “Company”) (TSX: AXIS), a
rapidly growing financial technology company changing the way
Canadians purchase and finance used vehicles, today announced
financial results for the fourth quarter and the 2023 fiscal
year.
Q4 2023 Financial
Highlights
- Total originations of $62.5 million, consisting of $30.3
million in automotive originations and $32.3 million in equipment
originations;
- Revenues of $10.1 million in the quarter, a 2% decline
year-over-year;
- Goodwill impairment expense of $17.8 million vs nil in prior
year;
- Adjusted loss(1) of ($1.4) million as compared to
Adjusted Earnings of $1.1 million in prior year; and
- Net loss of ($20.1) million, down from net income of $0.3
million in the fourth quarter of 2022.
For the quarter ending June 30, 2023, auto loan originations
were $30.3 million, down from $48.2 million in auto loan
originations in the fourth quarter of 2022, as credit and
underwriting parameters were tightened. The $30.3 million in fourth
quarter originations consisted of $17.8 million owned and on
balance sheet, while $12.5 million were volumes managed for
Westlake Financial Services (“Westlake”).
Equipment finance origination volumes in the quarter were $32.2
million, up 3% from $31.4 in the comparable quarter of 2022. Fourth
quarter originations consisted of $13.3 million owned and on
balance sheet, with $18.9 million being brokered for third parties
or originated for syndication partners.
Revenues for the quarter were $10.1 million, a decrease of 2.0%
from the fourth quarter of prior year. Automotive annualized
realized credit loss rate(2) for the quarter was 12.90%, up
from 7.64% during the same quarter of the prior year. Axis incurred
a non-cash, goodwill impairment expense of $17.8 million in the
fourth quarter related to its automotive cash generating unit
(“CGU”), as compared to nil in the comparable quarter of
prior year.
Adjusted loss(1) for the quarter was ($1.4) million, or
($0.011) per share, as compared to Adjusted earnings of $1.1
million or $0.009 per share for the fourth quarter of 2022. The
Company recorded a Net loss for the quarter of ($20.1) million or
($0.165) per share, as compared to net income of $0.3 million or
$0.002 per share in the fourth quarter of 2022.
Fiscal 2023 Financial
Highlights
- Total fiscal 2023 originations of $253.4 million, consisting of
$142.9 million in automotive originations and $110.5 million in
equipment originations;
- Total owned and managed finance receivables of $334.5 million,
consisting of $262.6 million in auto and $71.9 million in
equipment;
- Revenues of $40.6 million in fiscal 2023, an increase of 1.0%
from prior year;
- Goodwill impairment expense of $17.8 million vs nil in prior
year;
- Adjusted loss(1) of ($5.2) million, as compared to
Adjusted Earnings(1) of $4.7 million in fiscal 2022;
and
- Net loss of ($26.2) million, down from Net income of $1.5
million in prior year.
For the fiscal year ended June 30, 2023, auto loan originations
were $142.9 million, consisting of $74.2 million owned and on
balance sheet, while $68.7 million were volumes managed for
Westlake Financial Services (“Westlake”). This represented a
7% reduction from $154.0 million in total originations in fiscal
2022.
Axis’ total owned and managed auto portfolio reached $262.6
million, a 15% year over year increase from $229.3 million in prior
year. The auto portfolio at June 30, 2023 consisted of $146.5
million of on balance sheet assets and $116.1 million in Westlake
managed assets.
Equipment finance origination volumes in fiscal 2023 were $110.5
million, consisting of $49.1 million owned and on balance sheet,
with $61.4 million being brokered for third parties or originated
for syndication partners. Fiscal 2023 equipment originations of
$110.5 million represented a 8% year over year increase from $102.2
million in fiscal 2022.
Axis’s total owned and managed equipment portfolio peaked at
$71.9 million as of June 30, 2023, an increase from $21.1 million a
year earlier. In aggregate, the Axis’ total automotive and
equipment on balance sheet and managed assets peaked at $334.5
million as at June 30, 2023, a 34% year over year increase from
$250.4 million.
Revenues for the year were $40.6 million, an increase of 1.0%
year-over-year. Automotive annualized realized credit loss
rate(2) for fiscal 2023 was 11.13%, up from 7.89% during
fiscal 2022, while the Company concluded the year with reportable
delinquency of 5.17%.
Adjusted loss(1) for fiscal 2023 was ($5.2) million, or
($0.043) per share, as compared to Adjusted earnings of $4.7
million or $0.041 per share for fiscal 2022. The Company recorded a
Net loss in fiscal 2023 of ($26.2) million or ($0.215) per share,
as compared to net income of $1.5 million or $0.013 per share in
fiscal 2022.
Axis
Reconciliation(3) of Net Income (Loss)
to Adjusted Earnings (Loss) – Fourth Quarter
Q4
2023
Q4
2022
Net Income (Loss), as reported in
financial statements
(20,091,194)
313,372
Adjustments:
Non-cash interest
288,243
401,809
Depreciation
241,965
202,104
Amortization
171,978
161,484
Acquisitions and integration
34,239
20,000
Stock-based compensation
214,987
119,536
IFRS-16 lease expense
(75,225)
(88,119)
Goodwill impairment expense
17,810,702
-
Adjusted Earnings (Loss)
(1,404,305)
1,130,186
Axis
Reconciliation(3) of Net Income (Loss)
to Adjusted Earnings (Loss) - Fiscal Year
FY
2023
FY
2022
Net Income (Loss), as reported in
financial statements
(26,182,080)
1,484,860
Adjustments:
Non-cash interest
1,218,637
1,580,944
Depreciation
817,500
196,622
Amortization
695,304
153,904
Acquisitions and integration
65,936
27,260
Stock-based compensation
652,108
66,720
IFRS-16 lease expense
(327,655)
(87,152)
Goodwill impairment expense
17,810,702
-
Adjusted Earnings (Loss)
(5,249,548)
4,653,107
About Axis Auto Finance
Axis is a financial technology company changing the way
Canadians buy and finance used vehicles. Through our
direct-to-consumer portal, DriveAxis.ca, customers can choose their
next used vehicle, arrange financing, and get the car delivered to
their home. In addition, the company continues to grow B2B
non-prime auto loan originations by delivering innovative
technology solutions and superior service to its Dealer Partner
Network. All Axis auto loans report to Equifax, 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/20230915494958/en/
Axis Auto Finance Inc. Todd Hudson CEO (416) 633-5626
ir@axisautofinance.com
Axis Auto Finance (TSX:AXIS)
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