Mr. Todd Hudson reports

AXIS REPORTS Q4 AND 2023 FISCAL YEAR FINANCIAL RESULTS

Axis Auto Finance Inc. has released financial results for the fourth quarter and the 2023 fiscal year.

Q4 2023 financial highlights:

• Total originations of $62.5-million, consisting of $30.3-million in automotive originations and $32.3-million in equipment originations;
• Revenues of $10.1-million in the quarter, a 2-per-cent decline year over year;
• Goodwill impairment expense of $17.8-million versus nil in prior year;
• Adjusted loss of ($1.4-million) as compared with adjusted earnings of $1.1-million in prior year;
• Net loss of ($20.1-million), down from net income of $300,000 in the fourth quarter of 2022.

For the quarter ended June 30, 2023, auto loan originations were $30.3-million, down from $48.2-million in auto loan originations in the fourth quarter of 2022, as credit and underwriting limits were tightened. The $30.3-million in fourth quarter originations consisted of $17.8-million owned and on balance sheet while $12.5-million were volumes managed for Westlake Financial Services.

Equipment finance origination volumes in the quarter were $32.2-million, up 3 per cent from $31.4-million in the comparable quarter of 2022. Fourth quarter originations consisted of $13.3-million owned and on balance sheet, with $18.9-million being brokered for third parties or originated for syndication partners.

Revenues for the quarter were $10.1-million, a decrease of 2.0 per cent from the fourth quarter of prior year. Automotive annualized realized credit loss rate for the quarter was 12.90 per cent, up from 7.64 per cent during the same quarter of the prior year. Axis incurred a non-cash, goodwill impairment expense of $17.8-million in the fourth quarter related to its automotive cash generating unit, as compared with nil in the comparable quarter of prior year.

Adjusted loss for the quarter was ($1.4-million), or (1.1 cents) per share, as compared with adjusted earnings of $1.1-million or 0.9 cent per share for the fourth quarter of 2022. The company recorded a net loss for the quarter of ($20.1-million) or (16.5 cents) per share, as compared with net income of $300,000 or 0.2 cent per share in the fourth quarter of 2022.

Fiscal 2023 financial highlights:

• Total fiscal 2023 originations of $253.4-million, consisting of $142.9-million in automotive originations and $110.5-million in equipment originations;
• Total owned and managed finance receivables of $334.5-million, consisting of $262.6-million in auto and $71.9-million in equipment;
• Revenues of $40.6-million in fiscal 2023, an increase of 1.0 per cent from prior year;
• Goodwill impairment expense of $17.8-million versus nil in prior year;
• Adjusted loss of ($5.2-million), as compared with adjusted earnings of $4.7-million in fiscal 2022;
• Net loss of ($26.2-million), down from net income of $1.5-million in prior year.

For the fiscal year ended June 30, 2023, auto loan originations were $142.9-million, consisting of $74.2-million owned and on balance sheet, while $68.7-million were volumes managed for Westlake Financial Services. This represented a 7-per-cent reduction from $154.0-million in total originations in fiscal 2022.

Axis Auto's total owned and managed auto portfolio reached $262.6-million, a 15-per-cent year-over-year increase from $229.3-million in prior year. The auto portfolio at June 30, 2023, consisted of $146.5-million of on balance sheet assets and $116.1-million in Westlake managed assets.

Equipment finance origination volumes in fiscal 2023 were $110.5-million, consisting of $49.1-million owned and on balance sheet, with $61.4-million being brokered for third parties or originated for syndication partners. Fiscal 2023 equipment originations of $110.5-million represented an 8-per-cent year-over-year increase from $102.2-million in fiscal 2022.

Axis Auto's total owned and managed equipment portfolio peaked at $71.9-million as of June 30, 2023, an increase from $21.1-million a year earlier. In aggregate, the Axis Auto's total automotive and equipment on balance sheet and managed assets peaked at $334.5-million as at June 30, 2023, a 34-per-cent year-over-year increase from $250.4-million.

Revenues for the year were $40.6-million, an increase of 1.0 per cent year over year. Automotive annualized realized credit loss rate for fiscal 2023 was 11.13 per cent, up from 7.89 per cent during fiscal 2022, while the company concluded the year with reportable delinquency of 5.17 per cent.

Adjusted loss for fiscal 2023 was ($5.2-million), or (4.3 cents) per share, as compared with adjusted earnings of $4.7-million or 4.1 cents per share for fiscal 2022. The company recorded a net loss in fiscal 2023 of ($26.2-million) or (21.5 cents) per share, as compared with net income of $1.5-million or 1.3 cents per share in fiscal 2022.

About Axis Auto Finance Inc.

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