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Chesswood Anounces Results for Q2 2018

August 13, 2018 By Pawnee Leasing

Portfolio Growth of More Than $100 Million in First Six Months

TORONTO, August 13, 2018 – Chesswood Group Limited (“Chesswood” or “the Company”) (TSX: CHW), a North American commercial equipment finance provider for small and medium-sized businesses, today reported its second quarter results for the periods ended June 30, 2018.

Chesswood’s gross finance receivables grew to $804 million in the quarter driven by record second quarter originations of $114 million, a 31% increase from $87 million in the second quarter of last year. Net income also increased to $5.6 million from $3.7 million in the second quarter of 2017, and to $11.5 million in the first six months of this year compared to $8.4 million in the same period last year.

Between the adoption of IFRS 9 in 2018, the repayment of the Company’s convertible debentures in early January 2018 and the lower foreign exchange rates compared to last year, there are a number of meaningful adjustments required in order to compare the second quarter and six-month operating income(1) this year with the same periods in 2017. These adjustments are provided for in the chart below:

Financial Highlights
(in CDN $000’s)
June 30 2018 June 30 2017 June 30 2018 June 30 2017
Average FX Rate 1.2911 1.3449 1.2781 1.3343
Operating Income(1) $8,046 $9,290 $16,358 $17,339
IFRS 9 impact (a) 900 — 1197 —
Impact of exchange rate difference (b) 442 — 935 —
Interest expense on conv deb (c) — (325) — (650)
Normalized operating income $9,388 $8,965 $18,517 $16,689
  1. The provision for credit losses for the three and six months ended June 30, 2018 was calculated in accordance with IFRS 9. Prior period comparatives were prepared in accordance with IAS 39, and have not been restated. The Company’s provision for credit losses would have been $1.2 million lower in the six months ended June 30, 2018 if the same accounting guidelines used in the prior year had been used in 2018.
  2. U.S. dollar results for the six months ended June 30, 2018 were converted at an exchange rate of 1.2781, which was the average exchange rate for the period (2017 – 1.3343). This lower exchange rate compared to the same quarter in 2017 understates the improvement in our 2018 U.S. operating results compared to the same period in
    2017 by $935,000.
  3. Prior to redemption in January 2018, convertible debenture interest expense was not part of operating income whereas the interest expense on the funds used to repay the debentures (from the corporate credit facility) is deducted as an expense in calculating operating income in 2018.

“We continue to expand our business relationship with our customers. As we fund transactions from A to C in credit quality, we offer our broker-customers a one-stop shop for their funding needs,” said Barry Shafran, Chesswood’s President and CEO “and our customers have responded by embracing our programs along with our high service levels” added Shafran.

Financial Highlights
(in CDN $000’s, except EPS)

For the Three Months Ended

June 30th

For the Six Months Ended

June 30th

2018 2017 2018 2017
Average FX Rate 1.2911 1.3449 1.2781 1.3343
Net Income(2) $5,616 $3,749 $11,516 $8,445
Earnings Per Share – basic $0.31 $0.21 $0.64 $0.47

(1) – See “Non-GAAP Measures” below.

(2) – Provision for credit losses included in net income for 2018 is in accordance with IFRS 9. Prior period comparatives were prepared in accordance with IAS 39 and have not been restated.

Net income in the second quarter of 2017 was lowered by a non-cash loss of approximately $1.1 million on Chesswood’s holdings of shares of Dealnet Capital Corp.

Non-GAAP Measures

Operating Income is not a recognized measure under International Financial Reporting Standards and does not have a standard meaning. Accordingly, this measure may not be comparable to similar measures presented by other issuers. Please refer to the Company’s Management Discussion and Analysis in Chesswood’s 2017 Annual Report and 2018 Second Quarter Report for additional information concerning these measures and a reconciliation of these measures to the Company’s consolidated net income.

About Chesswood

Through two wholly-owned subsidiaries in the U.S. and Canada, Chesswood Group Limited is North America’s only publicly-traded commercial equipment finance company focused on small and medium-sized businesses. Our Colorado-based Pawnee Leasing Corporation, founded in 1982, finances a highly diversified portfolio of commercial equipment leases and loans through established relationships with over 600 independent brokers in U.S.. In Canada, Blue Chip Leasing Corporation has been originating and servicing commercial equipment leases and loans since 1996, and today operates through a nationwide network of more than 50 independent brokers. Based in Toronto, Canada, Chesswood’s shares trade on the Toronto Stock Exchange under the symbol CHW.

Learn more at www.chesswoodgroup.com, www.PawneeLeasing.com and www.BlueChipLeasing.com.

For more information contact:
Barry Shafran
Chesswood Group Limited
416-386-3099
bshafran@chesswoodgroup.com

This press release contains forward-looking statements that involve a number of risks and uncertainties because they relate to events and depend on circumstances that will occur in the future. Many factors could cause actual results and developments to differ materially from those expressed or implied by these forward-looking statements. By its nature, this information is subject to inherent risks and uncertainties that may be general or specific and which give rise to the possibility that expectations, forecasts, predictions, projections or conclusions will not prove to be accurate, that assumptions may not be correct and that objectives, strategic goals and priorities will not be achieved. Additional information about the risks and uncertainties of the Company’s businesses and material factors or assumptions on which information contained in forward-looking statements is based is provided in its publicly filed documents, including the Company’s annual information form and management’s discussion and analysis of the financial condition and performance, which are available electronically through the System for Electronic Document Analysis and Retrieval at www.sedar.com.

NO STOCK EXCHANGE, SECURITIES COMMISSION OR OTHER REGULATORY AUTHORITY HAS APPROVED OR DISAPPROVED THE INFORMATION CONTAINED HEREIN.

-30-

Filed Under: News

CHESSWOOD ANNOUNCES FINANCIAL RESULTS FOR Q1 2018

May 9, 2018 By Pawnee Leasing

Record Portfolio Growth and Income Before Taxes

TORONTO, May 8, 2018 – Chesswood Group Limited (“Chesswood” or “the Company”) (TSX: CHW), a North American commercial equipment finance provider for small and medium-sized businesses, today reported its results for the first quarter ended March 31, 2018.

The Company generated record quarterly Income before tax, along with strong operating earnings of $8.3 million, compared to $8.0 million last year. Chesswood generated these record Canadian dollar results even though the U.S. exchange rate during the quarter (1.26:1) was significantly lower than in the first quarter of 2017 (1.32:1). The effect of the weaker U.S. dollar on operating income for the quarter was $490,000. Chesswood’s finance receivables grew to $750 million in the quarter, driven by record quarterly originations of $94 million, a 19% increase from $79 million in the first quarter of last year.

“Our first quarter results not only reflect record portfolio growth and excellent operating income but they also reflect an improvement in our U.S. delinquency markers that was better than expected,” said Barry Shafran, Chesswood’s President and CEO. “We continue to look with optimism on the business climate and activity, especially in the U.S., following the recent lowering of tax rates, the easing of regulations and the very low unemployment numbers,” added Shafran..

 

Financial Highlights
(in CDN $000’s, except EPS )
For the Three Months
Ended March 31,
2018 2017
Operating Income(1)(2) $8,339 $8,049
Net Income(2) $5,900 $4,696
Earnings Per Share – basic $0.33 $0.26

(1) See “Non-GAAP Measures” below.
(2) Provision for credit losses included in net income for Q1 2018 is in accordance with IFRS 9. Prior period comparatives were prepared in accordance with IAS 39 and have not been restated.

Non-GAAP Measures

Operating Income is not a recognized measure under International Financial Reporting Standards and does not have standard meanings. Accordingly, this measure may not be comparable to similar measures presented by other issuers. Please refer to the Company’s Management Discussion and Analysis in Chesswood’s 2017 Annual Report and 2018 First Quarter Report for additional information concerning this measure and a reconciliation of this measure to the Company’s consolidated net income.

About Chesswood

Through two wholly-owned subsidiaries in the U.S. and Canada, Chesswood Group Limited is North America’s only publicly-traded commercial equipment finance company focused on small and medium-sized businesses. Our Colorado-based Pawnee Leasing Corporation, founded in 1982, finances a highly diversified portfolio of commercial equipment leases and loans through established relationships with over 600 independent brokers in 48 U.S. states. In Canada, Blue Chip Leasing Corporation has been originating and servicing commercial equipment leases and loans since 1996, and today operates through a nationwide network of more than 50 independent brokers. Based in Toronto, Canada, Chesswood’s shares trade on the Toronto Stock Exchange under the symbol CHW.

Learn more at, visit www.ChesswoodGroup.com , www.PawneeLeasing.com and www.BlueChipLeasing.com.

For more information contact:
Barry Shafran
Chesswood Group Limited
416-386-3099
bshafran@chesswoodgroup.com

This press release contains forward-looking statements that involve a number of risks and uncertainties because they relate to events and depend on circumstances that will occur in the future. Many factors could cause actual results and developments to differ materially from those expressed or implied by these forwardlooking statements. By its nature, this information is subject to inherent risks and uncertainties that may be general or specific and which give rise to the possibility that expectations, forecasts, predictions, projections or conclusions will not prove to be accurate, that assumptions may not be correct and that objectives, strategic goals and priorities will not be achieved. Additional information about the risks and uncertainties of the Company’s businesses and material factors or assumptions on which information contained in forwardlooking statements is based is provided in its publicly filed documents, including the Company’s annual information form and management’s discussion and analysis of the financial condition and performance,which are available electronically through the System for Electronic Document Analysis and Retrieval at www.sedar.com.

NO STOCK EXCHANGE, SECURITIES COMMISSION OR OTHER REGULATORY AUTHORITY HAS APPROVED OR DISAPPROVED THE INFORMATION CONTAINED HEREIN.

— 30 —

Filed Under: News

CHESSWOOD ANNOUNCES FINANCIAL RESULTS FOR 2017

March 14, 2018 By Pawnee Leasing

Seventh Consecutive Year of Record Operating Income and Portfolio Size

Strong 4th Quarter Results

TORONTO, March 12, 2018 – Chesswood Group Limited (“Chesswood” or “the Company”) (TSX: CHW), a North American commercial equipment finance provider for small and medium-sized businesses, today reported its results for the fourth quarter and year ended December 31, 2017.

The Company generated operating earnings of $8.0 million in the quarter and $32.1 million for the year, compared to $6.0 million and $30.3 million respectively, last year. The results for the prior year included $1.1 million of greater operating earnings from Windset Capital, which has been wound down in 2017.

“Chesswood once again enjoyed a record year by most financial measures including originations, total portfolio size, finance margin and operating income,” said Barry Shafran, Chesswood’s President and CEO. “Our gross finance receivables reached almost $700 million at year-end, and while our net income was also a record at $25.4 million. Our fourth quarter operating earnings of $8.0 million were $2.0 million over last year’s fourth quarter results and were helped significantly by our very effective collections efforts. Our fourth quarter and annual net income benefited from a $9.4 million one-time recovery of deferred taxes as a result of the reduction in the U.S. corporate income tax rates from the Tax Cuts and Jobs Act,” added Shafran.

Chesswood will benefit directly from the new lower U.S. corporate income tax rates in 2018 as our largest subsidiary, Pawnee Leasing Corporation, is a U.S. taxpayer. The Company estimates that based on 2017 taxable income, the 13% lower U.S. corporate tax rate would have generated an increase in net income of approximately $3.0 million.

Financial Highlights

(in CDN $000’s, except EPS)

For the Three Months Ended December 31 For the Years Ended December 31
2017 2016 2017 2016
Operating Income(1)(2) $8,018 $5,979 $32,075 $30,310
Net Income(2) $13,798(3) $5,103(2) $25,431(3) $24,278(4)(2)
Adjusted EBITDA(1)(2) $8,010 $6,097 $31,860 $31,031
Earnings Per Share – basic $0.76(3) $0.28 $1.41(3) $1.36(4)

(1) – See “Non-GAAP Measures” below.

(2) – 2016 operating income includes $1.6 million of pre-tax income from Windset compared to $514K in 2017; while in Q4 of 2016, operating income  includes $96K of pre-tax income from Windset compared to $193K in Q4 2017, as Windset winds down.

(3) – 2017 net income includes tax recovery of $9.4 million as a result of the revaluation of our U.S. subsidiaries’ net deferred tax liabilities due to the Tax Cuts and Jobs Act passed in December 2017.

(4) – 2016 net income includes $6.7 million gain on the sale of EcoHome Financial.

Non-GAAP Measures

Adjusted EBITDA and Operating Income are not recognized measures under International Financial Reporting Standards and do not have standard meanings. Accordingly, these measures may not be comparable to similar measures presented by other issuers. Please refer to the Company’s Management Discussion and Analysis in Chesswood’s 2017 Annual Report for additional information concerning these measures and a reconciliation of these measures to the Company’s consolidated net income.

About Chesswood Group Limited

Through two wholly-owned subsidiaries in the U.S. and Canada, Chesswood Group Limited is North America’s only publicly-traded commercial equipment finance company focused on small and medium-sized businesses. Our Colorado-based Pawnee Leasing Corporation, founded in 1982, finances a highly diversified portfolio of commercial equipment leases and loans through established relationships with over 600 independent brokers in the lower 48 states. In Canada, our subsidiary Blue Chip Leasing Corporation has been originating and servicing commercial equipment leases and loans since 1996, and today operates through a nationwide network of more than 50 independent brokers.

Based in Toronto, Canada, Chesswood’s shares trade on the TSX under the symbol CHW (convertible debentures: CHW.DB).

To learn more about Chesswood Group Limited, visit www.ChesswoodGroup.com.
The separate websites of Chesswood Group Limited’s operating businesses are at www.PawneeLeasing.com and www.BlueChipLeasing.com

For more information contact:
Barry Shafran
Chesswood Group Limited
416-386-3099
bshafran@chesswoodgroup.com

This press release contains forward-looking statements that involve a number of risks and uncertainties because they relate to events and depend on circumstances that will occur in the future. Many factors could cause actual results and developments to differ materially from those expressed or implied by these forward-looking statements.

NO STOCK EXCHANGE, SECURITIES COMMISSION OR OTHER REGULATORY AUTHORITY HAS APPROVED OR DISAPPROVED THE INFORMATION CONTAINED HEREIN.

— 30 —

 

Filed Under: News

CHESSWOOD GROUP ANNOUNCES ITS THREE AND NINE MONTH RESULTS

November 9, 2017 By Pawnee Leasing

PORTFOLIO APPROACHES $650 MILLION WITH SIGNIFICANT INCREASES IN PRIME AND NEAR PRIME PORTFOLIOS

TORONTO, November 8, 2017 – Chesswood Group Limited (“Chesswood” or “the Company”) (TSX: CHW), a North American commercial equipment finance provider for small and medium-sized businesses, today reported its results for the third quarter and nine-months ended September 30, 2017.

The Company generated operating earnings of $6.7 million in the quarter and $24.1 million for the nine-month period, compared to $7.2 million and $24.3 million respectively, last year. The results for the third quarter and nine-months of the prior year included greater operating earnings of $346,000 and $1.2 million respectively from Windset Capital, which has been wound down in 2017.

“Our originations generated another quarter of excellent growth for Chesswood’s finance receivables which have grown to almost $650 million,” said Barry Shafran, Chesswood’s President and CEO. “The seasonal rise in delinquencies and charge-offs that we experienced in the back half of the past few years was mirrored again in this quarter. We added $2.4 million to our non-cash portfolio reserve and provision for credit losses this quarter, compared to $1.7 million in the third quarter of 2016, while our portfolio is approximately $140 million larger than one year ago,” said Shafran.

”The increase in the reserve was driven primarily by a rise in delinquency in our highest-risk product, which is returning to normal performance levels following the immediate post crisis years in which we enjoyed unprecedented credit quality due to the contraction of credit. While we continue to generate strong risk-adjusted yields and returns from this segment of our business, we have tightened our underwriting and do not expect any near-term growth from this portion of our portfolio,” said Shafran. “This is the same approach we took in past cycles and is an appropriate risk-management step in the face of what we consider to be overly aggressive competitive behavior in this market segment. This normal effect from a change in the cycle underscores our strategic considerations in moving to further diversify our product offerings’ risk profiles by significantly growing our prime and near-prime portfolios,” added Shafran.

Financial Highlights

(in CDN $000’s, except EPS)

For the Three Months Ended September 30 For the Nine Months Ended September 30
2017 2016 2017 2016
Operating Income(1)(2) $6,718 $7,220 $24,057 $24,331
Non-Cash Items – Gains (Loses)(1)(3) ($1,191) $374 ($4,052) ($3,942)
Net Income(2) $3,188 $5,083 $11,633 $19,175(4)(2)
Adjusted EBITDA(1)(2) $6,669 $7,166 $23,851 $24,932
Earnings Per Share – basic $0.18 $0.29 $0.65 $1.08(4)

(1) – See “Non-GAAP Measures” below.

(2) – YTD 2016 Operating Income includes $1.5 million of pre-tax income from Windset compared to $320K in YTD 2017 while in Q3 of 2016 Operating Income includes $478K of pre-tax income from Windset compared to $132K in Q3 2017, as Windset winds down.

(3) – Non-cash mark-to-market losses on swaps, investments, debentures and non-cash FX and intangible amortization.

(4) – 2016 net income includes $6.7 million gain on the sale of EcoHome Financial.

Non-GAAP Measures

Adjusted EBITDA and Operating Income are not recognized measures under International Financial Reporting Standards and do not have standard meanings. Accordingly, these measures may not be comparable to similar measures presented by other issuers. Please refer to the Company’s Management Discussion and Analysis in Chesswood’s 2016 Annual Report and 2017 Third Quarter Report for additional information concerning these measures and a reconciliation of these measures to the Company’s consolidated net income.

About Chesswood Group Limited

Through two wholly-owned subsidiaries in the U.S. and Canada, Chesswood Group Limited is North America’s only publicly-traded commercial equipment finance company focused on small and medium-sized businesses. Our Colorado-based Pawnee Leasing Corporation, founded in 1982, finances a highly diversified portfolio of commercial equipment leases and loans through established relationships with over 600 independent brokers in the lower 48 states. In Canada, our subsidiary Blue Chip Leasing Corporation has been originating and servicing commercial equipment leases and loans since 1996, and today operates through a nationwide network of more than 50 independent brokers.

Based in Toronto, Canada, Chesswood’s shares trade on the TSX under the symbol CHW (convertible debentures: CHW.DB).

To learn more about Chesswood Group Limited, visit www.ChesswoodGroup.com.
The separate websites of Chesswood Group Limited’s operating businesses are at www.PawneeLeasing.com and www.BlueChipLeasing.com

— 30 —

Contact:
Barry Shafran
Chesswood Group Limited
416-386-3099
bshafran@chesswoodgroup.com

This press release contains forward-looking statements that involve a number of risks and uncertainties because they relate to events and depend on circumstances that will occur in the future. Many factors could cause actual results and developments to differ materially from those expressed or implied by these forward-looking statements.

NO STOCK EXCHANGE, SECURITIES COMMISSION OR OTHER REGULATORY AUTHORITY HAS APPROVED OR DISAPPROVED THE INFORMATION CONTAINED HEREIN.

 

Filed Under: News

CLFP Presents Cindy Spurdle Award to Pawnee Leasing’s Schonfeld

October 27, 2017 By Pawnee Leasing

The Certified Lease & Finance Professional (CLFP) Foundation presented the 2017 Cindy Spurdle Award of Excellence to Brian Schonfeld at the NEFA Fall Funding Symposium in Atlanta. The award was created to acknowledge the CLFP who has contributed the most to the industry and best represents the CLFP ideals for the year.

Schonfeld is currently the manager of information systems and analytics at Pawnee Leasing and served five years on the CLFP board including one year as president in 2015.

Reid Raykovich, CLFP executive director, said, “Brian was on the board for several years and was the go-to person for every project. He assisted in every foundation initiative and never complained about the workload. Even after serving the board, he worked on the exam rewrite, sharing his time and knowledge and has never received the proper recognition. He is the true embodiment of a CLFP and is very deserving of this award.”

Upon receipt of the award, Schonfeld added, “I am humbled and grateful to be selected by my fellow CLFPs to be this year’s recipient of the Cindy Spurdle Award of Excellence. The CLFP community is truly some of the best and brightest our industry has to offer, and to not only be included among them but recognized as well is a great honor. I would be remiss if I did not thank those with whom I worked closely with during my tenure on the board of directors, and I hope in some small way I was able to help the foundation grow and mature to its present form.”

Filed Under: News

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