All amounts are stated in Canadian dollars.
Terra Firma Capital Corporation (TSX VENTURE:TII) ("Terra Firma" or the
"Company"), a real estate finance company, today released its financial results
for the three months and year ended December 31, 2012.
2012 HIGHLIGHTS:
-- Total revenue is $5.5 million, an increase of $3.9 million or 260%,
compared to the last year.
-- Net income and comprehensive income is $1.3 million, an increase of
$964,658 or 336%, compared to last year.
-- Total assets increased by 57% to $46.4 million from $29.5 million.
"We have made significant strides in 2012 and we will continue to prudently
build on this and expand the Company's presence in the market," commented Dov
Meyer, President and Chief Executive Officer. "There are still significant
investment opportunities in the market, but we will continue to be prudent in
our approach to selection of new investments."
Results of operations - year ended December 31, 2012
Income from continuing operations for the year ended December 31, 2012 increased
by 209% to $1.5 million, or $0.05 per basic and diluted share, from $480,164, or
$0.03 per basic and diluted share in the previous year.
For the year ended December 31, 2012, interest and fees income grew 281% to $5.2
million compared to $1.4 million in the previous year.
The significant growth in Terra Firma's revenues and income from continuing
operations for the year ended December 31, 2012 as compared to the year earlier
periods was primarily due to increase in loan and mortgage investments
originations. The Company's loan portfolio increased to $32.0 million with a
weighted average effective interest rate of 19.9%, at December 31, 2012 compared
to $16.7 million with a weighted average effective interest rate of 19.3% at
December 31, 2011.
Interest expense for the year ended December 31, 2012 was $2.6 million compared
to $457,719 for the year ended December 31, 2011, primarily due to increase in
the syndicated portion of the Company's loan and mortgage investments, which
increased from $43.8 million at December 31, 2011 to $17.0 million at December
31, 2012 and the issuance of $10.1 million of 3-year, 7% convertible debentures
in September 2011. These funding leveraged the Company's shareholders' equity
and fueled the growth in loan and mortgage investments, while reducing its
overall portfolio risk profile.
Net Income for the year ended December 31, 2012 was $1.3 million, an increase of
$964,658 or 336% compared to previous year.
Results of operations - fourth quarter ended December 31, 2012
Income from continuing operations for the three months ended December 31, 2012
was $728,689, an increase of $422,544 or 138% compared to the same period in
previous year.
Interest and fees earned for the three months ended December 31, 2012 was $1.9
million compared to $749,883 for the comparable period last year. The increase
in interest and fees earned was primarily due to the growth in the Company's
loan and mortgage investments with higher weighted average effective interest
rate.
Net income for the three months ended December 31, 2012 was $496,376, an
increase of $188,303 or 61% from net income of $308,073 in the same period in
the previous year.
Termination of Management Agreement
Terra Firma was formerly managed by Counsel Asset Management, L.P., a wholly
owned subsidiary of Counsel Corporation (TSX:CXS). Counsel Corporation owned
6,168,333 or approximately 20.2% of the outstanding common shares of Terra Firma
as at December 31, 2012. On December 31, 2012, Counsel Asset Management L.P.
ended its management of Terra Firma and on January 1, 2013, Counsel distributed
its entire holding of Terra Firma shares as a dividend to its shareholders.
Following the termination of the management agreement, the Company's overall
strategy remains unchanged and management believes that the Company will be
better positioned to deliver on its strategy and objectives with a new manager
or alternatively, internalizing the management structure. Management is
evaluating both options, among others.
The Company's Management's Discussion & Analysis and Financial Statements as at
and for the year ended December 31, 2012 have been filed and are available on
SEDAR (www.sedar.com).
About Terra Firma
Terra Firma is a full service, publicly traded real estate finance company that
provides customized equity and debt solutions to the real estate industry. Our
focus is to arrange and provide financing with flexible terms to property owners
looking to improve or add to their existing real estate assets but who may be
limited by conventional bank financing, as well as to invest in quality
commercial and residential developments by proven real estate developers. Terra
Firma offers a full spectrum of real estate financing under the guidance of
strict corporate governance, clarity and transparency. For further information
please visit Terra Firma's website at www.terrafirmacapital.ca.
This Press Release contains forward-looking statements with respect matters
concerning the business, operations, strategy and financial performance of Terra
Firma. These statements generally can be identified by use of forward looking
word such as "may", "will", "expects", "estimates", "anticipates", "intends",
"believe" or "could" or the negative thereof or similar variations. The future
business, operations and performance of Terra Firma could differ materially from
those expressed or implied by such statements. Such forward-looking statements
are qualified in their entirety by the inherent risks and uncertainties
surrounding future expectations. Forward-looking statements are based on a
number of assumptions which may prove to be incorrect. Additional, important
factors that could cause actual results to differ materially from expectations
include, among other things, general economic and market factors, local real
estate conditions, competition, changes in government regulation, dependence on
tenants' financial conditions, interest rates, the availability of equity and
debt financing, environmental and tax related matters, and reliance on key
personnel. There can be no assurances that forward-looking statements will prove
to be accurate, as actual results and future events could differ materially from
those anticipated in such statements. Accordingly, readers should not place
undue reliance on forward-looking statements. The cautionary statements qualify
all forward-looking statements attributable to Terra Firma and persons acting on
its behalf. Unless otherwise stated, all forward looking statements speak only
as of the date of this Press Release and Terra Firma has no obligation to update
such statements except as required by law.
Terra Firma Capital Corporation
Consolidated Statements of Income and Comprehensive Income
For the three months and year ended December 31, 2012
(Unaudited)
----------------------------------------------------------------------------
----------------------------------------------------------------------------
Three months ended Year ended
-------------------------------------------------------
December 31, December 31, December 31, December 31,
2012 2011 2012 2011
----------------------------------------------------------------------------
Revenue
Interest and fees
earned $ 1,897,945 $ 749,883 $ 5,156,665 $ 1,352,124
Rental income 195,113 55,305 343,958 174,195
----------------------------------------------------------------------------
2,093,058 805,188 5,500,623 1,526,319
Expenses
Property operating
costs 76,623 17,834 129,186 55,901
General and
administrative
expenses 134,629 93,829 538,978 245,327
Share based
compensation 15,369 32,608 216,840 284,998
Interest expense 888,303 294,562 2,569,006 457,719
----------------------------------------------------------------------------
1,114,924 438,833 3,454,010 1,043,945
Fair value adjustment
of investment
properties - 50,000 - 195,000
----------------------------------------------------------------------------
Income from
continuing
operations before
income taxes 978,134 416,355 2,046,613 677,374
Income tax provision 249,445 110,210 562,320 197,210
----------------------------------------------------------------------------
Income from
continuing
operations 728,689 306,145 1,484,293 480,164
Income (loss) from
discontinued
operations (232,313) 1,928 (232,313) (192,842)
----------------------------------------------------------------------------
Net income and
comprehensive income $ 496,376 $ 308,073 $ 1,251,980 $ 287,322
----------------------------------------------------------------------------
----------------------------------------------------------------------------
Basic and diluted
earnings (loss) per
share
Continuing
operations $ 0.02 $ 0.01 $ 0.05 $ 0.03
Discontinued
operations (0.01) - (0.01) (0.01)
----------------------------------------------------------------------------
$ 0.01 $ 0.01 $ 0.04 $ 0.02
----------------------------------------------------------------------------
----------------------------------------------------------------------------
Terra Firma Capital Corporation
Consolidated Statements of Financial Position
As at December 31, 2012 and 2011
(Unaudited)
----------------------------------------------------------------------------
----------------------------------------------------------------------------
2012 2011
----------------------------------------------------------------------------
Assets
Cash and cash equivalents $ 3,223,291 $ 8,771,557
Amounts receivable and prepaid expenses 2,396,180 805,412
Loan and mortgage investments 31,996,731 16,724,774
Investment properties 7,834,576 3,234,658
Portfolio investment 950,000 -
----------------------------------------------------------------------------
Total assets $ 46,400,778 $ 29,536,401
----------------------------------------------------------------------------
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Liabilities
Accounts payable and accrued liabilities $ 1,192,616 $ 1,052,582
Provision for discontinued operations 445,957 251,864
Unearned income 16,965 52,624
Income taxes payable 474,297 82,169
Deferred income taxes 15,602 10,260
Loans and mortgages payable 21,406,070 6,777,907
Convertible debentures 10,093,325 10,061,869
----------------------------------------------------------------------------
Total liabilities 33,644,832 18,289,275
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Shareholders' Equity
Share capital $ 10,757,405 $ 10,687,105
Contributed surplus 573,139 386,599
Retained earnings 1,425,402 173,422
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Total shareholders' equity 12,755,946 11,247,126
----------------------------------------------------------------------------
----------------------------------------------------------------------------
Total liabilities and Shareholders' Equity $ 46,400,778 $ 29,536,401
----------------------------------------------------------------------------
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FOR FURTHER INFORMATION PLEASE CONTACT:
Terra Firma Capital Corporation
Dov Meyer
President and Chief Executive Officer
416.866.8986
ydmeyer@tfcc.ca
Terra Firma Capital Corporation
Mano Thiyagarajah
Chief Financial Officer
416.866.3168
mthiyagarajah@tfcc.ca
www.terrafirmacapital.ca
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