Mr. Todd Hudson reports

AXIS REPORTS Q3 FISCAL 2023 FINANCIAL RESULTS

Axis Auto Finance Inc. has released its financial results for the third quarter of fiscal 2023, ending March 31, 2023.

Q3 2023 financial highlights

• Auto loan portfolio of $266.1-million, up 28 per cent year over year;
• Equipment finance portfolio of $58.8-million, up 315 per cent year over year;
• Total owned and managed finance receivables of $324.9-million, up 46 per cent year over year;
• Revenues were $9.7-million in the quarter, a decrease of 1.9 per cent year over year;
• Adjusted loss of ($3.9-million) and net loss of ($4.7-million). The composition of adjusted earnings (loss) has been amended and further details are contained within.

For the quarter ending March 31, 2023, auto loan originations were $32.4-million, consisting of $15.8-million owned and on balance sheet, while $16.6-million were volumes managed for Westlake Financial Services. Axis's total owned and managed auto portfolio reached a record $266.1-million, consisting of $150.6-million of on balance sheet assets and $115.5-million in Westlake managed assets.

Equipment finance origination volumes in the quarter were $21.3-million, consisting of $9.7-million owned and on balance sheet, with $11.6-million being brokered for third parties or originated for syndication partners. In aggregate, the Axis on balance sheet portfolio increased 37 per cent year over year, to a record $201.6-million.

Revenues for the quarter were $9.7-million, a decrease of 1.9 per cent year over year.

Annualized realized credit loss rate for the quarter was 15.38 per cent, up from 8.84 per cent during the same period in prior year, while the company concluded the quarter with reportable delinquency of 5.95 per cent.

Adjusted loss for the quarter was ($3.9-million), or (3.2 cents) per share, as compared with adjusted earnings of $1.0-million or 0.8 cent per share for the comparable quarter of 2022. The company recorded a net loss for the quarter of ($4.7-million) or (3.9 cents) per share, as compared with net income of $300,000 or 0.2 cent per share in the third quarter of 2022.

Filing of corrective disclosures

Further to a continuous disclosure review by the Ontario Securities Commission (OSC) of the company's management discussion and analysis for fiscal 2022 and Q2 2023 (fiscal 2022 and Q2 2023 MD&A) and related earnings releases, certain corrective disclosures have been completed in the current quarters Q3 2023 MD&A, as well as in the company's earnings releases going forward. Corrective disclosures relate to:

• Adjusted earnings (loss);
• Adjusted earnings (loss) per share;
• Adjusted equity;
• Reconciliation between net income (loss) and adjusted earnings (loss) for all prior periods as referenced in the company's management discussion and analysis (MD&A) and in the earnings release;
• Addressing prominence concerns of the OSC, pertaining to MD&A and earnings releases.

More specifically, during the quarter ending March 31, 2023, Axis restated the previously reported adjusted earnings (loss) for fiscal 2021, fiscal 2022 and the first two quarters of fiscal 2023, as reported in the company's MD&A. Previously reported adjusted earnings (loss) included an adjustment which sought to normalize the provision for credit losses expense, pursuant to IFRS-9, with actual credit losses incurred.

In a continuing effort to improve non-IFRS disclosures, the change was made to no longer include this adjustment as part of the computation in arriving at adjusted earnings (loss). A full reconciliation of the previously reported adjusted earnings (loss) to the restated adjusted earnings (loss) is summarized on page 14 of the company's MD&A for the quarter ending March 31, 2023. Furthermore, the company will no longer be reporting adjusted equity, which previously included an adjustment to book value for the after-tax effect of the allowance for credit losses.

These corrective disclosures and improvements have been made at the request of OSC staff in connection with a continuous disclosure review and in order to comply with NI 52-112.

About Axis Auto Finance Inc.

Axis is a financial technology company changing the way Canadians buy and finance used vehicles. Through its direct-to-consumer portal, DriveAxis.ca, customers can choose their next used vehicle, arrange financing, and get the car delivered to their home. In addition, the company continues to grow B2B (business-to-business) non-prime auto loan originations by delivering innovative technology solutions and superior service to its dealer partner network. All Axis auto loans report to Equifax, resulting in over 70 per cent of customers seeing a significant improvement of their credit scores.