TORONTO, Aug. 14, 2014 /CNW/ - Callidus Capital
Corporation ("Callidus" or the "Company") (TSX: CBL), a provider of
flexible and innovative asset-based loans, announced today an
update on the current status of its business and provided its 2014
second quarter financial results, for the three and six-month
period ended June 30,
20141.
We continue to see exciting growth and opportunities in each of
our targeted strategic growth areas. Demand remains robust for our
core products in our key markets of Canada and the US, as we continue to complete
transactions in both of these important markets. This is evident in
the sequential growth of our loan portfolio, which is discussed in
further detail below. As previously disclosed, we hired two
originators, Steve Parker, a
seasoned ABL lender in Seattle
Washington to cover the Pacific coast, British Columbia, and Alberta and Sylvain
Raymond, a seasoned corporate finance professional, based in
Montreal to cover the Quebec and Eastern Canadian markets. We
anticipate Steve and Sylvain to accelerate growth in these markets
in the coming quarters. Additionally, we are pleased to report
growth in the deployment of Callidus Lite as an expansionary loan
product. Year-to-date, we have successfully closed two Callidus
Lite loans representing $16 million
in commitments. We also continue to closely monitor the market for
portfolio acquisitions and will pursue these acquisitions
opportunistically. In the event that Catalyst Fund IV wishes to
sell its $50 million participation
interest in the loan portfolio, the participation agreement
provides the Company the option to acquire all or part of the
interest in the loan portfolio at par plus accrued interest and
fees. Callidus expects to complete the acquisition of all of the
participation interest before year-end which would eliminate
accounting for derecognition.
In addition to pursuing these strategic growth initiatives, in
preparation for future growth, we have added capacity to the
underwriting and portfolio management, finance, and collateral
monitoring groups. We have also hired a senior IT professional to
enhance the development and maintenance of our proprietary systems.
Further, we are actively in discussions with certain field
examination candidates to internalize this client service function.
We will keep you appraised as we continue to make progress on these
and other initiatives.
We note that the IPO was successfully completed during the
quarter ended June 30, 2014 that is
being reported today and consequently includes financial
information on a capital structure that was replaced on the IPO. We
will include additional non-GAAP financial measures that are
customary for financial services companies in upcoming quarters as
the financial results from the previous capital structure no longer
impact the periods reported.
Current state of the business, as at August 13, 20142:
- Gross loans receivable of $605
million, with an aggregate committed amount of $755 million
- Pipeline of potential new loans totalling approximately
$500 million, for which we have
signed back term sheets that we are pursuing of approximately
$175 million, recognizing that not
all of these potential loans will close
- Cash position of $55 million plus
undrawn availability of approximately $73
million, which at 40% leverage would support an additional
$213 million of loans
outstanding
- Total debt of $195 million, or
32% of gross loans receivable, which we could increase to
approximately 44% based on the estimated undrawn availability noted
previously
- Management estimates net income of approximately $57 million after derecognition, had the
consolidated weighted average Gross Loans Receivable of
approximately $605 million been
outstanding for a full year 3
From June 30, 2014 to August 13, 2014, one new loan representing
US$72.5 million in commitments was
extended and a $2 million loan was
repaid. Additionally, $6 million in
net repayments was received from existing borrowers.
As at August 13, 2014, there were
26 loan commitments, the largest of which was a US$75 million commitment, and the smallest of
which was a $3.5 million commitment.
The average loan amount funded was $23
million.
Additionally, on August 1, 2014,
the Company filed a preliminary shelf prospectus with a number of
the regulatory authorities in each of the provinces and territories
of Canada for the issuance of up
to $600 million in common shares. The
Company continues to explore financing sources including but not
limited to both the private and public capital markets to ensure
adequate and diversified funding sources. These sources include
seeking increased availability from Callidus' existing lenders and
from Catalyst Funds. Catalyst Funds have approved making facilities
available and the Callidus board has approved these Catalyst Fund
facilities in principle, subject to complying with applicable
related party regulatory requirements.
_______________________________________
1 Amounts expressed are before derecognition, unless
otherwise indicated. For further information about derecognition as
it relates to the Company's initial public offering, please refer
to the final prospectus filed with the various securities
regulatory authorities through Canada on April 15,
2014 ("Final Prospectus").
2 Pro-forma a transaction that closed and was
funded August 14, 2014.
3 Calculated on a consistent basis as described in
Management's Discussion and Analysis for the period ended
June 30, 2014 ("MD&A").
Highlights from the second quarter, relative to the first
quarter:
- Gross loans receivable increased 29% to $537 million as at June
30, 2014
- Average gross loans receivable of $502
million for the quarter, an increase of 24%
- Gross yield of 20.8% up from 20.4%
- Adjusted EBITDA margin maintained at 79.4%
During the current quarter, 7 new loans totalling $120 million in commitments were extended and one
$15 million loan was fully repaid.
Additionally, $36 million in net
funding was advanced to existing borrowers.
Financial Highlights
|
|
|
|
Three months ended June 30
|
Six months ended June 30
|
($ 000s)
|
2014
|
2013
|
2014
|
2013
|
|
|
|
|
|
Average loan
portfolio outstanding
|
$501,849
|
$236,218
|
$453,550
|
$214,729
|
Total
revenue
|
$22,974
|
$12,002
|
$43,670
|
$21,521
|
Gross
yield
|
20.8%
|
20.3%
|
20.6%
|
20.0%
|
|
|
|
|
|
Adjusted EBITDA
(1)
|
$18,245
|
$9,021
|
$34,677
|
$15,940
|
Adjusted EBITDA
margin
|
79.4%
|
75.2%
|
79.4%
|
74.1%
|
Notes:
|
|
(1)
|
Please see definition
of Adjusted EBITDA under the heading "Description of Non-IFRS
Measures" in the MD&A. These financial measures are not
recognized measures under IFRS and do not have a standardized
meaning prescribed by IFRS. Therefore, they may not be comparable
to similar measures used by other issuers.
|
|
|
Second quarter of 2014
During the current quarter, total revenue increased almost
$11 million from the same period in
the prior year, as a result of (i) a $266
million increase in the Average Loan Portfolio Outstanding
to $502 million in the current
quarter, and (ii) a 0.5% increase in the gross yield to 20.8% in
the current quarter.
Adjusted EBITDA increased to $18
million from $9 million in the
same period last year, and Adjusted EBITDA margin increased to
79.4% from 75.2% as the Company benefitted from operating leverage
in the business as a result of growth in the loan portfolio.
Year-to-date June 30,
2014
Year-to-date, total revenue increased approximately $22 million from the same period in the prior
year, as a result of (i) a $239
million increase in the Average Loan Portfolio Outstanding
to $454 million year-to-date, and
(ii) a 0.6% increase in the gross yield to 20.6% year-to-date.
Adjusted EBITDA increased to $35
million from $16 million in
the same period last year, and Adjusted EBITDA margin increased to
79.4% from 74.1% as noted above, the Company benefitted from
operating leverage in the business as a result of growth in the
loan portfolio.
About Callidus Capital Corporation
Established in 2003, Callidus Capital Corporation is a Canadian
company that specializes in innovative and creative financing
solutions for companies that are unable to obtain adequate
financing from conventional lending institutions. Unlike
conventional lending institutions who demand a long list of
covenants and make credit decisions based on cash flow and
projections, Callidus credit facilities have few, if any, covenants
and are based on the value of the company's assets, its enterprise
value and borrowing needs. Callidus employs a proprietary system of
monitoring collateral and exercising control over the cash inflow
and outflows of each borrower, enabling Callidus to very
effectively manage any risk of loss.
Forward-Looking Statements
Certain statements made herein contain forward-looking
information. Although Callidus believes these statements to be
reasonable, the assumptions upon which they are based may prove to
be incorrect. Furthermore, the forward-looking statements contained
in this press release are made as at the date of this press release
and Callidus does not undertake any obligation to update publicly
or to revise any of the included forward-looking statements,
whether as a result of new information, future events or otherwise,
except as may be required by applicable securities laws.
SOURCE Callidus Capital Corporation