Carfinco Income earns $1.54-million in Q2

2006-08-03 18:28 ET – News Release

Mr. Tracy Graf reports

CARFINCO ANNOUNCES 2006 SECOND QUARTER RESULTS

Carfinco Income Fund is providing its results for the second quarter of 2006.

Highlights:

* net earnings increase 10.8 per cent to $1.5-million;
* annualized return on unitholder equity is 54.2 per cent for the quarter;
* loan originations increase 36.6 per cent to $15.3-million;
* 11th consecutive quarter of increased total earnings and earnings per unit; and
* monthly cash distribution to unitholders increases twice during 2006 — an increase to 2.5 cents in April and to 2.6 cents in July.

“Carfinco’s excellent second quarter results are a reflection of the sound strategic planning that has created conditions for ongoing expansion and growth,” said Tracy Graf, president and chief executive officer of Carfinco. “We were very pleased to post these positive results that management believes are indicative of Carfinco’s prospects in the growing non-prime vehicle-lending market.”

Earnings per unit for the second quarter of 2006 were 8.4 cents, compared with six cents for the second quarter of 2005 and 7.5 cents for the first quarter of 2006. This represents the 11th consecutive quarter that total earnings and earnings per unit have increased. In addition, the annualized return on unitholder equity for the second quarter of 2006 is 54.2 per cent.

Loan originations were strong during the second quarter at $15.3-million, a year-over-year increase of 23.4 per cent from $12.4-million for the second quarter of 2005, and a 36.6-per-cent increase from the loan originations of $11.2-million for the first quarter of 2006.

Carfinco’s key financial areas posted respectable increases in the second quarter. Finance receivables were $68.7-million, a year-over-year increase of 28.8 per cent from $53.3-million for the second quarter of 2005, and a solid improvement from $62.9-million in the first quarter of 2006. Total revenue stood at $5.3-million, a 33.1-per-cent increase from $4.0-million in recorded revenue for the second quarter of 2005, and an increase over first quarter 2006 revenue of $4.8-million. Correspondingly, Carfinco’s net earnings rose to $1.5-million in the quarter, increasing 42.8 per cent from $1.1-million posted in the first quarter of 2005. Net earnings were also above the $1.4-million stated for the first quarter of 2006.

These strong financial results were accompanied by two announced increases in monthly cash distributions to unitholders to date in fiscal 2006. In April, Carfinco announced that distributions would rise to 2.5 cents per trust unit, followed in July with the news that distributions would increase to 2.6 cents. This equates to a 31.2-cent annualized run rate, bringing the total year-to-date cash distribution per unit, as at July 31, to 17.3 cents.

In addition to posting impressive numbers, a series of significant corporate developments occurred at Carfinco since the beginning of the second quarter.

In late July, an agreement was announced to offer Carfinco’s vehicle-financing services through DealerAccess, an on-line lending portal. This partnership, once operational, will complement a similar agreement with on-line portal Curomax in extending Carfinco’s services to more automotive dealerships than ever and result in increased applications submitted to the fund for vehicle financing.

Also in July, Saskatchewan became the ninth province in which Carfinco operates, following approval by the provincial government to provide loans to vehicle purchasers in that province. The first loans have already been extended to customers in Saskatchewan.

Finally, Carfinco’s home on the Internet was redesigned and launched on July 31, 2006, delivering improved access to information for customers, dealers and investors.

“Momentum is clearly on our side as we head into the final half of 2006,” said Mr. Graf. “With a profitable business operating in nine provinces, strategic partnerships with lending portals and a talented group of employees, we believe Carfinco is well positioned to continue to prosper in the non-prime vehicle-purchase market.”