TORONTO, Feb. 24 /CNW/ - Accord Financial Corp. (TSX - ACD), a leading North American provider of factoring and other asset-based financial services to businesses today announced its financial results for the fourth quarter and year ended December 31, 2008. The financial figures presented in this release are reported in Canadian dollars and have been prepared in accordance with Canadian generally accepted accounting principles.
-------------------------------------------------------------------------
SUMMARY OF FINANCIAL RESULTS
----------------------------
Three Months Ended Year Ended
December 31 December 31
2008 2007 2008 2007
---- ---- ---- ----
Factoring
volume (millions) $ 429 $ 376 $ 1,596 $ 1,497
Revenue $ 6,753,267 $ 7,770,561 $28,059,765 $28,345,999
Net earnings $ 461,810 $ 2,059,228 $ 5,041,161 $ 6,286,965
Earnings per share
Basic $ 0.05 $ 0.22 $ 0.53 $ 0.66
Diluted $ 0.05 $ 0.22 $ 0.53 $ 0.66
Weighted average
number of shares
Basic 9,453,548 9,471,727 9,490,837 9,463,231
Diluted 9,469,603 9,574,470 9,530,932 9,575,387
-------------------------------------------------------------------------
Net earnings for 2008 declined by 20% to $5,041,000 compared to last year's $6,287,000, while diluted earnings per share decreased to 53 cents compared to 66 cents last year. The Company's return on average shareholders' equity was 11.7% in 2008 compared to 16.0% in 2007. Net earnings declined as a result of a significantly higher provision for credit and loan losses, although higher G&A expense and lower revenue contributed somewhat to the decline.
Factoring volume in 2008 rose by 7% to a record $1,596 million compared to $1,497 million in 2007. Revenue declined by 1% to $28,060,000 in 2008 compared with $28,346,000 last year. Revenue decreased despite the rise in volume as factoring commissions declined due to reduced factoring yields, in part as a result of lower interest rates.
Commenting on 2008's results, Ken Hitzig, the Company's President, noted that "2008 turned out to be a year of severe economic challenges and these certainly had an impact on Accord. The Company's earnings for the first nine months of 2008 were actually ahead of the same period the previous year, but we were unable to maintain our momentum and the quality of our portfolio deteriorated by year-end necessitating write-offs and higher allowances for losses".
Net earnings for the fourth quarter of 2008 declined to $462,000 compared to $2,059,000 last year as a result of a higher provision for credit and loan losses and lower revenue. Diluted earnings per share decreased to 5 cents compared to 22 cents in the fourth quarter of 2007.
Factoring volume in the fourth quarter rose by 14% to a record $429 million compared with $376 million last year. Revenue, however, declined by 13% to $6,753,000 compared to $7,771,000 due to lower factoring yields, which were particularly impacted by substantially lower interest rates in the latest quarter.
Mr. Hitzig added "Many larger industry players are having trouble securing funding and many smaller finance companies have exited the industry. Accord, with its substantial capital and borrowing capacity, is in an ideal position to capitalize on the market opportunities presented at this time".
%SEDAR: 00001979E