XS Financial Reports Third Quarter 2020 Financial Results
Rhea-AI Summary
XS Financial reported a strong performance in Q3 2020, with revenues soaring 482% to $3,858,329 year-over-year, driven by new leases and equipment sales. Monthly recurring revenue increased by 187% to $164,076, leading to a positive adjusted EBITDA of $44,910. Despite a net loss of $819,926, the company improved gross profit, which reached $76,053. Post-quarter highlights include $10 million in leasing agreements with prominent cannabis operators and a $2 million credit facility enhancing financial flexibility.
Positive
- 482% revenue growth year-over-year to $3,858,329.
- Positive adjusted EBITDA of $44,910.
- 187% increase in monthly recurring revenue to $164,076.
- Gross profit of $76,053 compared to a loss of $55,163 in Q3 2019.
- Secured $2 million revolving credit facility for enhanced liquidity.
- Entered into $10 million in leasing agreements with major cannabis operators.
Negative
- Net loss of $819,926 compared to net income of $1,805,944 in Q3 2019.
- Working capital decreased to $348,839 from $1,802,038 year-over-year.
News Market Reaction – XSHLF
On the day this news was published, XSHLF gained 34.99%, reflecting a significant positive market reaction.
Data tracked by StockTitan Argus on the day of publication.
Strong revenue growth and positive adjusted EBITDA underscore solid third quarter
LOS ANGELES, CA / ACCESSWIRE / November 30, 2020 / XS Financial Inc. ("XS Financial", "XSF" or the "Company") (CSE:XSF) (OTCQB:XSHLF), a specialty finance company providing equipment leasing solutions to cannabis and hemp companies in the United States, is pleased to announce results for the quarter ended September 30, 2020 ("Q3/20") and for the nine-month period ended September 30, 2020 ("YTD/20"). All amounts are expressed in U.S. dollars unless indicated otherwise.
Q3/20 Highlights
- Revenue grew to
$3,858,329 from$663,468 in Q3/19, an increase of482% year over year - Monthly recurring revenue grew to
$164,076 from$57,250 in Q3/19, a187% increase year over year - Gross profit was
$76,053 versus a gross loss of$55,163 in the previous year - Adjusted EBITDA1 for the quarter was
$44,910 - Adjusted net loss[1] for the quarter was
$266,509 , or nil per share, demonstrating the 5th consecutive quarter of improving operational results - 4 new leases signed during the quarter totaling
$2,764,451 of new leasing receivables - Total gross receivables from active leases of
$3,844,293 at the end of Q3/20 - Strong balance sheet at quarter-end with
$1.56M M of unencumbered cash and marketable securities
Post-Quarter Highlights:
- Entered into a
$5 million leasing agreement with Skymint Brands f/k/a Greenpeak Innovations (Michigan's leading vertically integrated cannabis operator), as announced on October 13, 2020 - Entered into a
$5 million leasing agreement with a large, publicly traded multi-state operator focused on the Nevada and Massachusetts markets, as announced on November 2, 2020 - Improved financial flexibility with the closing of a
$2 million senior secured revolving credit facility with an FDIC insured bank, as previously announced on November 23, 2020 - As of November 30, 2020, the Company has funded
$6,064,977 into 14 active lease schedules, which generate$200,000 of monthly recurring revenue and a weighted gross unleveraged IRR of24.0% , while maintaining a conservative57.6% portfolio lease-to-value - Total gross receivables from active leases of
$7,568,920 , as of November 30, 2020
David Kivitz, CEO of XS Financial commented: "Our third-quarter results were highlighted by strong revenue growth and a swing to positive adjusted EBITDA. We made significant progress on several fronts, including signing 4 new leases during the quarter, which brings our total deployed capital to
Building on this momentum, we also entered into two new leases post-quarter end with leading cannabis operators in their respective markets. Additionally, the company secured a revolving credit facility with favorable pricing and terms from an FDIC insured bank, which strengthens our ability to fund additional equipment leases, with new and existing customers."
Summary Financial Results
For the three months ended | For the nine months ended | |||
September 30 | September 30 | |||
2020 | 2019 | 2020 | 2019 | |
Revenue | ||||
Cost of sales | ||||
Gross profit (loss) | ||||
Operating expenses | ||||
Other expense (income) | ||||
Income tax expense | - | - | - | |
Net (loss) income | ||||
Adjusted net (loss) income | ||||
(Loss) income per share - basic | ||||
Adjusted net (loss) per share - basic | nil | |||
Weighted average shares outstanding - basic | 54,589,706 | 36,295,096 | 52,563,488 | 33,974,504 |
Results of Operations
Revenue for Q3/20 was
Cost of sales for Q3/20 was
Gross profit for Q3/20 was
Operating expenses for Q3/20 were
The Company realized a net loss of
Liquidity and Capital Resources
The Company's liquidity needs are primarily to finance growth initiatives, including equipment acquisition, leasing activities, debt services, and for general corporate purposes.
At the end of Q3/20, the Company had working capital of
The Company's liquidity was significantly boosted post-quarter end through the collection of lease receivables, and the receipt of a new
The Company's unaudited interim condensed Financial Statements ("FS") and Management Discussion & Analysis ("MDA") will be filed under the Company's profile on www.sedar.com, and will also be available on XS Financial's corporate website at www.xsfinancial.com.
About XS Financial
Founded in 2017, XSF specializes in providing equipment leasing solutions in the United States to owner/operators of cannabis and hemp companies. In addition, XSF provides a full range of consulting services including equipment selection and procurement, through its network of preferred vendor partnerships with original equipment manufacturers and equipment distributors. This powerful dynamic provides an end-to-end solution for customers which results in recurring revenues, strong profit margins, and a proven business model for XSF stakeholders. The Company's common shares are traded on the Canadian Securities Exchange under the symbol "XSF" and in the United States on the OTCQB under the symbol " XSHLF." For more information, visit: www.xsfinancial.com.
For inquiries please contact:
XS Financial Inc. David Kivitz Antony Radbod 310.683.2336 |
Forward-Looking Information
This press release contains "forward-looking information" and may also contain statements that may constitute "forward-looking statements", collectively "forward-looking information", within the meaning of applicable Canadian securities legislation. Such forward-looking information is not representative of historical facts or information or current condition, but instead represent the beliefs and expectations regarding future events about the business and the industry and markets in which XS Financial operates, as well as plans or objectives of management, many of which, by their nature, are inherently uncertain. Generally, such forward-looking information can be identified by the use of terminology such as "plans", "expects" or "does not expect", "is expected", "budget", "scheduled", "estimates", "forecasts", "intends", "anticipates" or "does not anticipate", or "believes", or variations of such words and phrases or may contain statements that certain actions, events or results "may", "could", "would", "might" or "will be taken", "will continue", "will occur" or "will be achieved". Forward-looking information contained herein may include but is not limited to, any additional leasing opportunities and the ability to capitalize on such and the timing thereof. Forward-looking information is not a guarantee of future performance and involve risks, uncertainties and assumptions which are difficult to predict. Accordingly, readers should not place undue reliance on forward-looking information, which are qualified in their entirety by this cautionary statement. XS Financial Inc., does not undertake any obligation to release publicly any revisions for updating any voluntary forward-looking information, except as required by applicable securities law.
Neither the Canadian Securities Exchange nor its Regulation Services Provider accepts responsibility for the adequacy or accuracy of this release.
[1] Adjusted EBITDA and Adjusted Net Loss are non-IFRS financial performance measure with no standardized meaning under IFRS. Adjusted Net Loss is calculated as Net Loss per IFRS adjusted for marked-to-market adjustments in the Company's investments, non-cash accretion expense, gains/losses associated with non-recurring equipment sales, non-cash equity incentives, depreciation and unrealized foreign exchange gains/losses
SOURCE: XS Financial Inc.
View source version on accesswire.com:
https://www.accesswire.com/618723/XS-Financial-Reports-Third-Quarter-2020-Financial-Results
FAQ
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