August 26, 2005 18:55 ET

RIFCO Reports First Quarter Results

RED DEER, ALBERTA--(CCNMatthews - Aug. 26, 2005) - RIFCO Inc. (TSX VENTURE:RFC) today reported its financial and operating results which can be viewed on www.sedar.com for the three months ended June 30, 2005.

RIFCO continues to enjoy a strong liquidity position. At June 30, 2005 the Company had $175k in cash, $4.5M in available bank and warehouse lines, and $14.2M available in its securitization facility.

During the quarter, the Company successfully placed a tranche of loans with its securitization facility for $1M. This was the second tranche placed with the facility.

The Company is not able to report substantial progress toward the eight 'specific objectives' laid out in the 2005 annual report. Loan origination growth, revenue growth and managed receivable growth has continued to be adversely affected by the temporary liquidity constraints experienced in Q4 of last year. These constraints have now been lifted.

Bill Graham, President & CEO commented "With these liquidity constraints removed, we remain confident that the Company is on track to achieve the stated annual objectives. These objectives were set with the expectation that the reported results for the first quarter would be marginal. Improved incremental progress will be seen in the second quarter with strong progress reported in the second half of the fiscal year."

Total managed assets, including financed receivables and receivables held by the securitization trust, increased to $9.3M from $5.2M a year ago. Loan originations dropped to $2.1M from 2.5M in Q4 but represent an increase over Q1 of the prior year's originations of $1.8M.

The Company saw quarterly revenue increase 31% to $703K from $535K in the prior year. The Company showed a net loss of $109K up from $34K same period in the prior year. Quarterly revenue for the Company is dramatically affected by the amount of loans sold to the securitization trust. In Q4, a $5M tranche of loans were sold to the trust versus only $1M in loans for Q1. Revenue was $1,820K in the quarter ending March 31, 2005 due to the large securitization.

In the first quarter, RIFCO successfully attracted two strong additions to its senior management ranks. These additions are crucial to the achieving the Company's aggressive growth goals.

First, Doug Decksheimer joined RIFCO as Vice President of Marketing. Prior to joining RIFCO, Mr. Decksheimer served in a number of executive roles at Comco Manufacturing, a leading supplier of software and control solutions to domestic and international agricultural industries. Mr. Decksheimer has successfully launched international sales efforts into four countries including China. Mr. Decksheimer will be a key architect in RIFCO's dramatic growth strategy over the coming quarters.

Secondly, Monte Coates joined RIFCO as Vice-President of Operations. Prior to joining RIFCO, Mr. Coates served in a number of executive roles at Wells Fargo Financial (Trans Canada Credit Corp.). In the last ten years he worked from the TCCC branch level in Alberta to a Vice President in Toronto. His team was responsible for the initial development and introduction of Trans Canada Credit's auto finance program in Alberta and the development of relationships with franchise and independent auto dealers. Mr. Coates' role includes refining RIFCO's credit and collection processes and contributing to product development of additional non-prime financial products.

About RIFCO Inc

RIFCO Inc. (TSXV: RFC) operates through its wholly owned subsidiary Repair Industry Finance Corporation. RIFCO is a specialty consumer finance corporation with a current focus on the automotive aftermarket industry. RIFCO provides Automotive & Commercial Repair Financing, and Vehicle Purchase Financing ("Convenient Payment Plan") to mid-market/non-prime motorists through a growing network of licensed repair facilities and select used vehicle retailers. RIFCO's customers benefit by being able to convert major repair or purchase costs into affordable monthly payments.

RIFCO is committed to continuing growth. Key strategies for achieving this growth include the expansion of its network, ever-increasing leverage of this network, excellence in credit and collections processes, and exceptional service to its network members and its customers.

The common shares of RIFCO INC. are traded on the TSX Venture Exchange under the symbol "RFC". RIFCO INC. has 13.95 million shares issued and outstanding.

NOTE: RFC would like to remind shareholders and interested parties that regular commentary on the Company's activities is available by registering for the Free Insight Newsletter, issued electronically by of The Howard Group, www.howardgroupinc.com.

The TSX Venture Exchange does not accept responsibility for the adequacy or accuracy of this release.

Contact Information

  • RIFCO Inc.
    Lance A. Kadatz
    Vice President and Chief Financial Officer
    1-888-303-2181 (FAX)
    Email: kadatz@rifco.net
    Website: www.rifco.net
    The Howard Group Inc.
    Grant Howard
    The Howard Group Inc.
    David Gordon
    The Howard Group Inc.
    Peter Weichler
    1-888-237-8387 (FAX)
    Email: info@howardgroupinc.com
    Website: www.howardgroupinc.com