TORONTO, ON--(Marketwired - August 09, 2017) - Difference Capital Financial Inc. ("DCF" or the "Company") (
Q2 2017 Highlights
- Net gain on investments and marketable securities were $0.5 million during the quarter mainly due to mark to market gains on our publically traded positions, offset in part by unrealized foreign exchange loss on U.S. investments.
- The portfolio produced a gross gain (before operating costs) of $1.1 million, despite absorbing $0.6 million of foreign exchange loss.
- After expenses, net asset value per common share decreased on June 30, 2017 to $7.73 from $7.77 at March 31, 2017.
- As of June 30, 2017, cash on hand was $5.8 million plus the Company held $9.7 million of public securities and distribution receivables.
| (figures are in $000 except per share amounts and shares outstanding) | Q2 2017 | Q1 2017 | Q2 2016 |
| Net gain (loss) on investments and marketable securities | 471 | 432 | 4,927 |
| Other income | 631 | 316 | 465 |
| TotalPortfolio Contribution | 1,102 | 748 | 5,392 |
| Total expenses | (1,437) | (1,533) | (1,768) |
| Net income (loss) | (335) | (785) | 3,624 |
| Earnings (loss) per share | (0.06) | (0.13) | 0.60 |
| Total assets | 74,321 | 74,355 | 90,561 |
| Total liabilities | 29,224 | 28,819 | 31,788 |
| Net asset value | 45,097 | 45,536 | 58,773 |
| Shares outstanding | 5,835 | 5,859 | 5,872 |
| Net asset value(1) per share | 7.73 | 7.77 | 10.00 |
| Share price | 4.15 | 4.05 | 5.10 |
Second Quarter Financial Results
Net loss for the quarter ended June 30, 2017 was $0.3 million, or $0.06 per share, compared to a net gain of $3.6 million, or $0.62 per share, for the year ago quarter ended June 30, 2016 and a net loss of $0.8 million, or $0.13 per share, for the previous quarter ended March 31, 2017.
During the three months ended June 30, 2017, the Company recorded a total portfolio return of $1.1 million consisting of $0.5 million of portfolio gains and $0.6 million of portfolio income. This contribution was net of foreign exchange losses of $0.6 million. Also during the quarter, the Company sold its remaining stake in WorldGaming for $1.5 million in net cash.
Total expenses during the quarter ended June 30, 2017 were $1.4 million compared to $1.8 million for the quarter ended June 30, 2016. The significant components of expenses were as follows:
- Compensation expense for the three months ended June 30, 2017 was $0.3 million compared to $0.6 million during the same period in 2016.
- Financing costs were $0.8 million compared to $0.9 million during the same period in 2016.
The Company also announces that Michael Wekerle is appointed to the position of Executive Chairman, subject to an employment agreement to be determined by the Governance, Compensation & Nominating Committee, whose three members are all independent of the Company. Mr. Wekerle is Co-Founder of DCF and its largest shareholder, with direct and indirect ownership of approximately 46% of the Company's outstanding common shares.
In his new role as Executive Chairman, Mr. Wekerle will leave the management of the firm and day-to-day operations to Mr. Kneis, but will be taking a hands-on approach to investment decisions within the portfolio. Such activities may include a tactical or opportunistic trading approach to certain investments, expected to be of shorter term in nature than those typically held in the portfolio since late 2012.
"With the support of the investment team, I plan to add value to the portfolio through tactical investments in small and micro capitalization public companies -- a market niche that represents my core expertise, developed over my 30+ year career in the capital markets," Michael Wekerle says.
Please refer to the section regarding forward-looking statements which form an integral part of this release. These results, along with the audited financial statements and the Company's MD&A, are available on the Company's website at www.differencecapital.com and on SEDAR at www.sedar.com.
About Difference Capital Financial Inc.
Difference Capital Financial Inc. invests in and advises growth companies. We leverage our capital market expertise to help unlock value in technology, media and healthcare companies as they approach important milestones in their business lifecycle.
Caution Regarding Forward-Looking Statements
Certain statements contained in this press release may be deemed "forward-looking statements." Forward-looking statements are statements that are not historical facts and are generally, but not always, identified by the words "expects," "plans," "anticipates," "believes," "intends," "estimates," "projects," "potential," "scheduled," and similar expressions, or that events or conditions "will," "would," "may," "could" or "should" occur. Although DCF believes that the expectations reflected in those forward-looking statements are reasonable, no assurance can be given that these expectations will prove to be correct and such forward-looking statements included in this press release should not be unduly relied upon. These statements speak only as of the date of this press release. DCF undertakes no obligation to publicly update or revise any forward looking statements, whether as a result of new information, future events or otherwise, other than as required by applicable law.
1 Net asset value ("NAV") is a non-IFRS financial measure and is calculated by subtracting the aggregate fair value of the liabilities of the Company from the aggregate fair value of its assets. Net asset value per share is calculated by dividing NAV by the number of common shares outstanding as at the measurement date. The term net asset value per share does not have any standardized meaning according to IFRS and therefore may not be comparable to similar measures presented by other companies.
Contact Information:
Henry Kneis
Chief Executive Officer
(416) 649-5090
www.differencecapital.com