Q1-2024 Summary
- Q1-2024 funded volumes of
$11.2 billion , representing a 14% increase as compared to 2023; - Q1-2024 revenue of
$13.7 million , representing a 17% increase compared to 2023; - Q1-2024 adjusted EBITDA of
$5.0 million as compared to$2.6 million in Q1-2023; - The Corporation’s Q1-2024 net income increased to
$2.6 million from net loss of$47 thousand in Q1-2023, primarily from higher income from operations from increased funded volume and lower non-cash finance expense on the Preferred Share Liability; - The Corporation declared a quarterly dividend of
$0.03 per class A common share (“Common Share”), resulting in a dividend payment of$1.4 million in Q1-2024; and - Subsequent to Q1-2024, on
April 25, 2024 , the Corporation disposed of its interest in Impact for proceeds of$3.7 million . The proceeds from sale were applied against the Junior Credit Facility.
Selected Consolidated Financial Summary:
Below is the summary of our financial results for the three months ended
Three months ended | |||||
(in thousands, except per share and KPIs) | 2024 | 2023 | Change | ||
Revenues | $ | 13,636 | $ | 11,638 | 17% |
Income from operations | 3,468 | 1,330 | 161% | ||
Adjusted EBITDA (1) | 4,996 | 2,639 | 89% | ||
Adjusted EBITDA margin | 37% | 23% | 14% | ||
Free cash flow attributable to common shareholders (1) | 650 | (1,369) | NMF(3) | ||
Net income (loss) (2) | 2,631 | (47) | NMF(3) | ||
Adjusted net income (1) | 1,439 | 198 | 627% | ||
Diluted earnings per Common Share (2) | 0.05 | - | NMF(3) | ||
Adjusted diluted earnings per Common Share (1) | 0.03 | - | NMF(3) | ||
Dividends declared per share | $ | 0.03 | $ | 0.03 | - |
Key Performance Indicators (“KPIs”) | |||||
Funded mortgage volumes (4) | 11.2 | 9.8 | 14% | ||
Number of franchises (5) | 512 | 539 | (5%) | ||
Number of brokers (5) | 8,170 | 7,856 | 4% | ||
% of funded mortgage volumes submitted through Velocity (6) | 68% | 60% | 8% |
(1) | Please see the Non-IFRS Financial Performance Measures section of accompanying MD&A for additional information. |
(2) | Net income for the three months ended |
(3) | The percentage change is not a meaningful figure. |
(4) | Funded mortgage volumes are presented in billions and are a key performance indicator that allows us to measure performance against our operating strategy. |
(5) | The number of franchises and brokers are as at the respective period end date (not in thousands). |
(6) | Representing the percentage of the DLC Group’s funded mortgage volumes that were submitted through Velocity. |
During the three months ended
As the Corporation’s operating expenses are largely fixed in nature and are not necessarily proportionate to changes in revenues, changes in the Corporation’s revenues have a more pronounced impact on adjusted income, adjusted EBITDA, and adjusted EBITDA margins. As such, these metrics have increased with higher revenues during the three months ended
Income from operations increased from higher revenues and lower operating expenses during the three months ended
Net income increased during the three months ended
The Corporation recognized a non-cash impairment loss of
Free cash flow increased during the three months ended
Non-IFRS Financial Performance Measures
Management presents certain non-IFRS financial performance measures which we use as supplemental indicators of our operating performance. These non-IFRS measures do not have any standardized meaning, and therefore are unlikely to be comparable to the calculation of similar measures used by other companies and should not be considered in isolation or as a substitute for measures of performance prepared in accordance with IFRS. Non-IFRS measures are defined and reconciled to the most directly-comparable IFRS measure. Non-IFRS financial performance measures include adjusted EBITDA, adjusted net income, adjusted earnings per share, and free cash flow. Please see the Non-IFRS Financial Performance Measures section of the Corporation’s MD&A dated
The following table reconciles adjusted EBITDA from income before income tax, which is the most directly-comparable measure calculated in accordance with IFRS:
Three months ended | ||||
(in thousands) | 2024 | 2023 | ||
(Loss) income before income tax | $ | 3,214 | $ | 186 |
Add back: | ||||
Depreciation and amortization | 939 | 964 | ||
Finance expense | 764 | 678 | ||
Finance (recovery) expense on the Preferred Share liability | (154) | 890 | ||
4,763 | 2,718 | |||
Adjustments: | ||||
Share-based payments recovery | - | (96) | ||
Promissory note income | (31) | (37) | ||
Foreign exchange loss | 16 | 13 | ||
Loss on contract settlement | 10 | 44 | ||
Non-cash impairment of equity-accounted investment | 236 | - | ||
Other expense (income) (1) | 2 | (3) | ||
Adjusted EBITDA (2) | $ | 4,996 | $ | 2,639 |
(1) | Other expense (income) for the three months ended |
(2) | Amortization of franchise rights and relationships of |
The following table reconciles free cash flow from cash flow from operating activities, which is the most directly-comparable measure calculated in accordance with IFRS:
Three months ended | |||||
(in thousands) | 2024 | 2023 | |||
Cash flow from operating activities | $ | 5,087 | $ | (935) | |
Changes in non-cash working capital and other non-cash items | (569) | 3,409 | |||
Cash provided from operations excluding changes in non-cash working capital and other non-cash items | 4,518 | 2,474 | |||
Adjustments: | |||||
Distributions from equity-accounted investees | 185 | - | |||
Maintenance CAPEX | (3,133) | (4,156) | |||
Lease payments | (112) | (158) | |||
Loss on contract settlement | 10 | 44 | |||
Other non-cash items (1) | (13) | (3) | |||
1,455 | (1,799) | ||||
Free cash flow attributable to Preferred Shareholders (2) | (805) | 430 | |||
Free cash flow attributable to common shareholders | $ | 650 | $ | (1,369) |
(1) | Other non-cash items for the three months ended |
(2) | Free cash flow attributable to the Preferred Shareholders is determined based on free cash flow of the Core Business Operations (as defined in the Preferred Shares section of accompanying MD&A). |
The following table reconciles adjusted net income from net income, which is the most directly-comparable measure calculated in accordance with IFRS:
Three months ended | |||||
(in thousands) | 2024 | 2023 | |||
Net income (loss) | $ | 2,631 | $ | (47) | |
Adjustments: | |||||
Foreign exchange loss | 16 | 13 | |||
Finance (recovery) expense on the Preferred Share liability (1) | (154) | 890 | |||
Non-cash impairment of equity-accounted investment | 236 | - | |||
Loss on contract settlement | 10 | 44 | |||
Promissory note interest income | (31) | (37) | |||
Other expense (income) (2) | 2 | (3) | |||
Income tax effects of adjusting items | (3) | (1) | |||
2,707 | 859 | ||||
Income attributable to Preferred Shareholders (3) | (1,268) | (661) | |||
Adjusted net income | 1,439 | 198 | |||
Adjusted net income attributable to common shareholders | 1,435 | 188 | |||
Adjusted net income attributable to non-controlling interest | 4 | 10 | |||
Diluted adjusted earnings per Common Share | $ | 0.03 | $ | - |
(1) | The Preferred Share liability is revalued at the end of each reporting period to reflect our most recent outlook and forecast. Refer to the Preferred Shares section of the accompanying MD&A. |
(2) | Other expense (income) for the three months ended |
(3) | Adjusted net income attributable to the Preferred Shareholders is determined based on adjusted net income of the Core Business Operations (as defined in the Preferred Shares section of accompanying MD&A). |
Forward-Looking Information
Certain statements in this document constitute forward-looking information under applicable securities legislation. Forward-looking information typically contains statements with words such as “anticipate,” “believe,” “estimate,” “will,” “expect,” “plan,” or similar words suggesting future outcomes or outlooks. Forward-looking information in this document includes, but is not limited to: our anticipation of further recovery in our mortgage volumes, revenues, and margins as we expect the market to stabilize over the next 12-18 months.
Such forward-looking information is based on many estimates and assumptions, including material estimates and assumptions, related to the following factors below that, while considered reasonable by the Corporation as at the date of this press release considering management’s experience and perception of current conditions and expected developments, are inherently subject to significant business, economic and competitive uncertainties and contingencies. Known and unknown factors could cause actual results to differ materially from those projected in the forward-looking statements. Such factors include, but are not limited to:
- Changes in interest rates;
- The DLC Group’s ability to maintain its existing number of franchisees and add additional franchisees;
- Changes in overall demand for Canadian real estate (via factors such as immigration);
- Changes in overall supply for Canadian real estate (via factors such as new housing-start levels);
- At what period in time the Canadian real estate market stabilizes;
- Changes in Canadian mortgage lending and mortgage brokerage laws and regulations;
- Changes in the Canadian mortgage lending marketplace;
- Changes in the fees paid for mortgage brokerage services in
Canada ; and - Demand for the Corporation’s products remaining consistent with historical demand.
Many of these uncertainties and contingencies may affect our actual results and could cause actual results to differ materially from those expressed or implied in any forward-looking statements made by, or on behalf of, us. Readers are cautioned that forward-looking statements are not guarantees of future performance. All forward-looking statements made in this document are qualified by these cautionary statements. The foregoing list of risks is not exhaustive. The forward-looking information contained in this document is made as of the date hereof and, except as required by applicable securities laws, we undertake no obligation to update publicly or revise any forward-looking statements or information, whether because of new information, future events or otherwise.
About
Contact information for the Corporation is as follows:
EVP, Corporate and Chief Legal Officer 403-560-0821 jbell@dlcg.ca | President 647-403-7320 eddy@dlc.ca | |
NEITHER THE TSX EXCHANGE NOR ITS REGULATION SERVICES PROVIDER (AS THAT TERM IS DEFINED IN THE POLICIES OF THE TSX EXCHANGE) ACCEPTS RESPONSIBILITY FOR THE ADEQUACY OR ACCURACY OF THIS RELEASE.
Source:
2024 GlobeNewswire, Inc., source