RIFCO Marks Record-Setting Third Quarter
Canadian auto finance company RIFCO recently announced record financial results for the third quarter ending Dec. 31, 2010, including record revenue, record net income, record loan originations, record managed assets, record low interest costs, record book value per share and a record of $90 million in available credit facilities. The company also noted that it is experiencing the best efficiency and operating expense ratios in its history.
Net income in the first three quarters of the year reached $1.74 million, up from $546,000 in the prior year. This translates to a 219-percent increase and basic and diluted earnings per share of $0.09 versus $0.03 over the comparable period. RIFCO’s net income in the first nine-month period is the highest in RIFCO’s history.
Loan originations in the third quarter increased to $12.43 million from $10.56 million in the prior quarter, a quarter-over-quarter increase of 17.7 percent, and an increase of 47.0 percent from the $8.46 million in the prior year. The increase in loan originations resulted in managed finance receivables growth to $69.15 million from $55.65 million in the prior year, a 24.3-percent growth rate.
The company noted that its positive dealer relationships are generating high (loans booked versus applications received) close rates. This is a key metric for the company and supports the strong gains being made in efficiency ratios, according to officials.
Net income for the quarter was $727,156, a 110-percent increase from the $347,090 reported in the third quarter of the prior year. This has resulted in basic and diluted earnings per share of $0.04 in the quarter, up from $0.02 in the comparable quarter.
Revenue in the quarter grew to $4.62 million, a 26-percent increase from $3.67 million reported in Q3 of the prior year. The 3Q revenue was also a 4.8-percent increase over the record revenue of $4.41 million reported in the prior quarter. In the quarter, operating expenses decreased by 12.1 percent over the prior quarter. The company repaid $435,000 in unsecured debentures at term maturity from working capital during the quarter.
RIFCO has been granting non-traditional loans in the automotive sector since 2002 and has granted more than $175 million in loans to date. The company had predicted that its underwriting and operational systems would hold up throughout all economic cycles. The economic environment over the last two years has acted as a real life "stress test" for these credit assumptions, and the company noted that while granting and collecting loans in this period was more challenging than in prior years, the credit results have validated the model. RIFCO is now experiencing improvements in all key metrics.
In addition to the company’s successful third-quarter results, RIFCO was recently ranked 48th by size on Alberta Venture magazine’s “Stockwatch — Top 50” ranking of TSX Venture listed companies by market capitalization.
RIFCO was ranked as the 13th best performing stock with a total return of 86.67 percent. RIFCO was also ranked as the 11th best performing stock over the last five years with a total return of 40 percent.