Stack Capital Group Inc. Reports Q3-2022 Financial Results

Book Value per Share of $11.75 as at September 30, 2022

TORONTO, Nov. 10, 2022 (GLOBE NEWSWIRE) -- Stack Capital Group Inc., (“Stack Capital” or the “Company”) (TSX: STCK and STCK.WT) today announced its financial results for the three and nine months ended September 30, 2022. Stack Capital reports all amounts in Canadian Dollars unless otherwise stated.

Company Commentary (as at September 30, 2022):

  • Book Value per Share of the Company was $11.75, as compared with $11.25 as at September 30, 2021, a 4% increase.

  • The Company’s cash position was $43.2 million, or $4.68 per share.

  • To date, the Company has completed seven investments valued at $65.3 million or $7.08 per share

“We continue to diligently evaluate companies to add to our portfolio that we believe are market leaders with strong growth potential,” said Jeff Parks, CEO of Stack Capital. “Given current market conditions, having 40% of our Book Value in cash is extremely beneficial and will enable us to opportunistically invest in attractive businesses that continue to grow in this economic environment. Scarcity of capital has resulted in better investment terms on recent deals that we have explored, with added benefits relating to downside protection. Overall, we remain excited for the future prospects of our existing portfolio companies.”

Q3-2022 Highlights

  • As at September 30, 2022, the Book Value of the Company was $108.4 million, and the Book Value per Share was $11.75. A detailed summary of Book Value per Share is as follows:

Breakdown of Book Value per Share as at September 30, 2022: 
Cash$        4.68 
Investment – Varo Money, Inc.                     0.39 
Investment – FNEX Ventures LLC – Series 103 (SpaceX)                    1.03 
Investment – Bolt Financial, Inc.                    1.37 
Investment – Prove Identity Inc.                     1.13 
Investment – Hopper Inc. 0.90 
Investment – Newfront Insurance, Inc. 1.20 
Investment – Omio 1.05 
Net other assets                   (0.01)
Book Value per Share$        11.75 
  • In September 2022, Stack Capital invested an additional US$2.13 million in Prove Identity, Inc. (“Prove”), through a combination of cash and the Company’s common shares (issued at $11.80, its Book Value per Share at the time). As a result of this investment at a favourable share price, the Company revised the common share fair value of the Prove common shares resulting in a deferred gain on this investment of $1.02 million.

  • During Q3 2022, Stack Capital adjusted the valuation of Bolt Financial, Inc. (“Bolt”) to its cost basis and liquidation preference. This resulted in an unrealized loss for the quarter of $3.74 million on the Statements of Income (Loss). The Bolt investment remains in a profit position of $3.95 million from inception, including foreign exchange, as at quarter end.

  • Subsequent to the period, Hopper Inc. raised US$96 million from Capital One at an undisclosed valuation, further extending their existing partnership. The impact to the valuation of the Company’s investment in Hopper could not be reflected as of the date of the Q3-2022 financial statements.

About Stack Capital

Stack Capital is an investment holding company and its business objective is to invest in equity, debt and/or other securities of growth-to-late-stage private businesses. Through Stack Capital, shareholders have the opportunity to gain exposure to a diversified private investment portfolio; participate in the private market; and have liquidity due to the listing of the Common Shares and Warrants on the TSX. At the same time, the public structure also allows the Company to focus its efforts on maximizing long-term performance through a portfolio of high growth businesses, which are not widely available to most Canadian investors. SC Partners Ltd. (the “Manager”) has taken the initiative in creating the Company and acts as the Company's administrator and is responsible to source and advise with respect to all investments for the Company.

For more information, please visit our website at or contact:
Brian Viveiros
VP, Corporate Development and Investor Relations

Non-IFRS Financial Measures

This press release may make reference to the following financial measures which are not recognized under International Financial Reporting Standards (“IFRS”), and which do not have a standard meaning prescribed by IFRS:

  • Book Value - the aggregate fair value of the assets of the Company on the referenced date, less the aggregate carrying value of the liabilities, excluding any deferred taxes if applicable, of the Company; and
  • Book Value per Share (BVPS) - the Book Value on the referenced day divided by the aggregate number of Common Shares that are outstanding on such day.

The Company’s Book Value per Share is a measure of the performance of the Company as a whole. The Company’s method of determining this financial measure may differ from other issuers’ methods and, accordingly, this amount may not be comparable to measures used by other issuers. This financial measure is not a performance measure as defined under IFRS and should not be considered either in isolation of, or as a substitute for, net earnings per share prepared in accordance with IFRS.

Cautionary Note Regarding Forward-Looking Information

This press release contains forward-looking information. Such forward-looking statements or information are provided for the purpose of providing information about management’s current expectations and plans relating to the future. Readers are cautioned that reliance on such information may not be appropriate for other purposes. Any such forward-looking information may be identified by words such as “proposed”, “expects”, “intends”, “may”, “will”, and similar expressions. Forward-looking information contained or referred to in this press release includes, but may not be limited to, the exit conditions of the TSX Sandbox; and the business of Stack Capital and the risks associated therewith, including those identified in the Annual Information Filing under the heading “Risk Factors”.

Forward-looking statements or information are based on a number of factors and assumptions which have been used to develop such statements and information, but which may prove to be incorrect. Although Stack Capital believes that the expectations reflected in such forward-looking statements or information are reasonable, undue reliance should not be placed on forward-looking statements because Stack Capital can give no assurance that such expectations will prove to be correct. Factors that could cause actual results to differ materially from those described in such forward-looking information include, but are not limited to, the ability to capitalize on investment opportunities. The forward-looking information in this press release reflects the current expectations, assumptions and/or beliefs of Stack Capital based on information currently available to Stack Capital.

Any forward-looking information speaks only as of the date on which it is made and, except as may be required by applicable securities laws, Stack Capital disclaims any intent or obligation to update any forward-looking information, whether as a result of new information, future events, or results or otherwise. The forward-looking statements or information contained in this press release are expressly qualified by this cautionary statement.