Terra Firma Capital Corporation
TSX VENTURE : TII

Terra Firma Capital Corporation

August 21, 2014 09:20 ET

Terra Firma Capital Corporation Reports Results for the Second Quarter Ended June 30, 2014

All amounts are stated in Canadian dollars

TORONTO, ONTARIO--(Marketwired - Aug. 21, 2014) -

198% INCREASE IN NET INCOME COMPARED TO Q2 2013

48% TOTAL REVENUE GROWTH YEAR OVER YEAR

43% GROWTH IN LOANS AND MORTGAGE INVESTMENTS

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 and six months ended June 30, 2014.

SECOND QUARTER 2014 HIGHLIGHTS:

  • Total revenue is $2.9 million, an increase of $933,000 or 48%, compared to the same period last year.
  • Net income and comprehensive income in the second quarter is $786,000, an increase of $522,000 or 198%, compared to the second quarter of 2013.
  • Basic earnings per share in the second quarter were $0.03, compared to basic earnings per share of $0.01 for the same quarter in the prior year, an increase of 200% over last year.
  • Loan and mortgage investments increased by 43% or $18.3 million from $42.9 million at June 30, 2013 to $61.3 million at June 30, 2014.

"The growth of our loan portfolio, increase in total revenue and significant growth in net income year-over-year, reflect our success in penetrating the market, matching capital to fund our commitments and ability to achieve strong profitability. Our financial results for the first half of the year demonstrate our continued commitment to building a loan portfolio to enhance our earnings and shareholder value", commented Y. Dov Meyer, President and Chief Executive Officer. "Our loan originations and commitments are consistently growing and our pipeline of transactions going into Q3 is well diversified. We are on track for a record breaking year." he further said.

Results of operations - three months ended June 30, 2014

Net income in the second quarter ended June 30, 2014 was $786,000 or $0.03 per basic share and $0.02 per diluted share, compared to $264,000, or $0.01 per basic and diluted share, in the second quarter ended June 30, 2013.

Interest and fee income for the second quarter ended June 30, 2014 aggregated $2.8 million, an increase of 54% over the $1.8 million in the same period in the previous year, and an increase of 8% over $2.6 million in the first quarter ended March 31, 2014.

Interest expense for the second quarter ended June 30, 2014 was $1.5 million, compared to $1.2 million for the comparative period last year and $1.5 million for the first quarter ended March 31, 2014, representing the growth of our business and the increase in loan syndications to fund the investment activities.

The company's loan and mortgage investments increased from $55.3 million at December 31, 2013 to $61.3 million at June 30, 2014, an increase of 11%. The average interest rate in the mortgage portfolio at June 30, 2014 was 18.8% compared to 18.6% at December 31, 2013.

The Company's Management's Discussion & Analysis and Financial Statements as at and for the three months ended March 31, 2014 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.tfcc.ca.

The TSXV has neither approved nor disapproved the contents of this press release. The TSXV does not accept responsibility for the adequacy or accuracy of this press release.

This Press Release contains forwardlooking 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 forwardlooking statements are qualified in their entirety by the inherent risks and uncertainties surrounding future expectations. Forwardlooking 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 forwardlooking 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 forwardlooking statements. The cautionary statements qualify all forwardlooking 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 and six months ended June 30, 2014 and 2013
(Unaudited)
Three months ended Six months ended
June 30,
2014
June 30,
2013
June 30,
2014
June 30,
2013
Revenue
Interest and fees $ 2,841,816 $ 1,840,180 $ 5,462,356 $ 3,426,395
Rental 47,319 115,558 162,756 222,654
2,889,135 1,955,738 5,625,112 3,649,049
Expenses
Property operating costs 15,225 21,238 57,301 68,853
General and administrative 529,678 372,923 884,195 740,086
Share based compensation 423,994 32,345 436,602 32,345
Interest 1,451,536 1,157,172 2,930,455 2,094,584
Gain on conversion of interest in joint operation (487,000 ) - (487,000 ) -
1,933,433 1,583,678 3,821,553 2,935,868
Income from operations before income taxes 955,702 372,060 1,803,559 713,181
Income taxes 321,563 108,503 551,211 184,279
Income from continuing operations 634,139 263,557 1,252,348 528,902
Income from discontinued operations 151,644 - 151,644 -
Net income and comprehensive income $ 785,783 $ 263,557 $ 1,403,992 $ 528,902
Earnings per share
Basic $ 0.03 $ 0.01 $ 0.05 $ 0.02
Diluted $ 0.02 $ 0.01 $ 0.04 $ 0.02
Terra Firma Capital Corporation
Consolidated Statements of Financial Position
As at June 30, 2014 and December 31, 2013
June 30,
2014
December 31,
2013
Assets
Cash and cash equivalents $ 5,285,223 $ 7,721,115
Funds held in trust 199,059 383,526
Amounts receivable and prepaid expenses 2,256,149 1,661,352
Loan and mortgage investments 61,266,320 55,278,303
Investment properties 1,915,336 7,671,452
Portfolio investments 3,148,234 954,073
Deferred income tax asset 31,818 -
Total assets $ 74,102,139 $ 73,669,821
Liabilities
Accounts payable and accrued liabilities $ 2,168,940 $ 1,366,708
Provision for discontinued operations 27,500 321,490
Unearned income 298,077 472,924
Income taxes payable 274,494 82,375
Deferred income tax liability - 6,348
Loans and mortgages payable 44,907,558 46,569,921
Convertible debentures 10,141,697 10,125,074
Total liabilities 57,818,266 58,944,840
Shareholders' Equity
Share capital $ 10,834,175 $ 10,795,790
Contributed surplus 720,477 603,962
Retained earnings 4,529,221 3,125,229
Total shareholders' equity 16,083,873 14,524,981
Non-controlling interest 200,000 200,000
Total liabilities and Shareholders' Equity $ 74,102,139 $ 73,669,821

Contact Information

  • Terra Firma Capital Corporation
    Y. Dov Meyer
    President and Chief Executive Officer
    416.792.4709
    ydmeyer@tfcc.ca

    Ali Mahdavi
    Managing Partner
    Spinnaker Capital Markets Inc.
    416.962.3300
    am@spinnakercmi.com