Welcome!

News Feed Item

Element Delivers $0.14 of Free Operating Cash Flow EPS in Q2 on $4.1 Billion of Earning Assets

-- After Tax Adjusted Operating EPS of $0.11 in line with consensus

TORONTO, ONTARIO -- (Marketwired) -- 08/12/14 -- Element Financial Corporation (TSX: EFN) ("Element" or the "Company"), one of North America's leading equipment finance companies, today reported financial results for the three-month and six-month periods ending June 30, 2014 with organic originations of $0.8 billion contributing to a 7.9 percent increase in the Company's total earning assets to $4.1 billion as at June 30, 2014 versus $3.8 billion as at March 31, 2014.

Free operating cash EPS was $0.14 for the three-month period and $0.27 for the six month period ending June 30, 2014. Based partly on the continued growth of the Company's book of railcar assets combined with the growing book of earning assets, the Company is not expected to pay cash taxes for the next twenty years. After tax adjusted operating income per share was $0.11 for the three-month period and $0.21 for the six-month period ending June 30, 2014 in line with the consensus of analyst estimates.

"Organic origination volumes were strong across each of our four business verticals in Q2 setting Element up to exceed the $3.9 billion pre-PHH origination target that we had established for 2014," said Steven Hudson, Element's Chairman and CEO. "Trinity industries recently affirmed that US$1 billion of rail car leases are expected to flow to Element in 2014 and we are aiming to exceed this target," added Mr. Hudson.

While Element's Aviation and Rail verticals have predictable annual origination volumes, these can be subject to less predictable quarter to quarter variances. The Aviation order book tends to see the strongest closings in the fourth quarter accounting for up to 40 percent of annual volumes. Rail originations, which flow to Element in large aggregated transactions, to a lesser extent can also affected by some seasonality.

The Company's US Commercial & Vendor Finance unit reported new originations of $213.3 million for the three month period ending June 30, 2014 versus $160.5 million originated in the preceding quarter. Originations from Element's Canadian Commercial & Vendor platform were $158.4 million versus $141.0 million in the previous quarter. Aviation Finance reported originations of $149.4 million in Q2, including $32.4 million of a $100 million facility approved for CargoJet during the period, versus originations of $96.2 million in the preceding quarter. Element's Fleet Management unit reported originations of $138.2 million in Q2 versus $113.4 million in the preceding quarter. The Railcar Finance vertical, which reported $131.2 million of new railcar leases in Q1 in addition to the acquisition of a US$396 million portfolio of existing railcar leases from Trinity Industries, contributed $133.2 million of new railcar leases in Q2. Organic originations, excluding acquisitions, from all four verticals for the period amounted to $793 million in Q2 for a 23 percent increase over the $642 million of organic originations in the previous period.

Financial revenue for the three-month period ending June 30, 2014 was $75.1 million or 7.91 percent of average earning assets versus $66.5 million in the previous quarter or 7.90 percent of average earning assets. Interest expense was $23.0 million for the three-month period ending June 30, 2014 or 2.42 percent of average earning assets versus $21.5 million in the previous quarter or 2.55 percent of average earning assets. Net financial income for the three-month period ending June 30, 2014 was $52.1 million for the quarter versus $45.0 million in the preceding quarter.

The Company's adjusted operating expense ratio continued to decline during Q2 to 2.19 percent of average earning assets versus 2.22 percent in the preceding quarter and is on track to achieve the post PHH integration target ratio of 2.0 percent by the end of 2014.

The Company's allowance for credit losses was $11.8 million or 0.37 percent of finance receivables as at June 30, 2014 versus $11.1 million or 0.40 percent as at March 31, 2014 resulting from slightly lower write-offs during the quarter on larger earning assets base. Delinquencies remained constant during the quarter at 0.40 percent of total finance receivables as at June 30, 2014 compared to 0.40 percent as at March 31, 2014.

At the end of the period, the Company had total available sources of capital of $2.52 billion versus $1.37 billion at the end of the preceding period as a result of the expansion of the Company's senior revolving credit facility which added $800 million in additional availability and the Company's US revolving secured borrowing facility which was increased by $350 million to accommodate the growing origination in the US Commercial and Vendor business. The Company's average financial tangible leverage ratio was 1.79:1 as at June 30, 2014 compared to 1:80 at March 31, 2014. Subsequent to the end of the quarter, on closing the acquisition of PHH Arval and the financing associated with this acquisition, Element's financial tangible leverage increased to 3.57:1 resulting from the higher debt advance rate on those specific assets and is expected to reach 4.0:1 by the end of 2014.

"The Company has reinforced its capital structure and negotiated improved terms to its senior revolving credit facility that enable Element to gain access to longer-term and lower-cost rated debt market facilities," noted Mr. Hudson. "Work is well-advanced in discussions with our rating agencies and we expect to be actionable in these rated debt markets by the fourth quarter of this year," added Mr. Hudson.

At the end of the period, the Company had 189.5 million common shares outstanding as well as 4.6 million preferred Series A shares, 5.1 million preferred Series C shares and 5.0 million preferred Series E shares outstanding.

Unaudited Interim Statements and MD&A

Element's unaudited interim financial statements and related management discussion and analysis as at and for the three-month and six-month periods ended June 30, 2014 have been filed on SEDAR (www.sedar.com).

Conference Call

A conference call to discuss the results with analysts will be held on Wednesday, August 13, 2014 at 8:00 a.m. ET. The conference call can be accessed by dialing the following numbers:

North America Toll-Free: 1-866-696-5910 passcode 8764790

Local & International: 1-416-340-2217 passcode 8764790

The call will be recorded and can be accessed until August 27, 2014 by dialing 905-694-9451 or 1-800-408-3053 and entering the pass code 9173123.

Non-IFRS Measures

The Company's unaudited condensed consolidated financial statements have been prepared in accordance with International Financial Reporting Standards ("IFRS") as issued by the International Accounting Standards Board ("IASB") and accounting policies adopted are in accordance with IFRS.

The Company believes that certain Non-IFRS Measures can be useful to investors because they provide a means by which investors can evaluate the Company's underlying key drivers and operating performance of the business, exclusive of certain adjustments and activities that investors may consider to be unrelated to the underlying economic performance of the business of a given period. Throughout this Press Release, management used a number of terms and ratios which do not have a standardized meaning under IFRS and are unlikely to be comparable to similar measures presented by other organizations. A full description of these measures can be found in the Management Discussion and Analysis that accompanies the financial statements for the quarter ended June 30, 2014.

The following table provide a reconciliation of non-IFRS to IFRS measures related to the Company:



                                 As at and for the        As at and for the
                                three months ended        six months ended
----------------------------------------------------------------------------
$ thousands (except
 % and per share            June 30, March 31,  June 30,  June 30,  June 30,
 amounts)                       2014      2014      2013      2014      2013
----------------------------------------------------------------------------

Reported and
 adjusted income
 measures
Net income (loss)       A    11,128    15,836   (13,882)   26,964    (9,197)
Adjustments:
  Share-based
   compensation               3,661     4,194     2,818     7,855     4,270
  Amortization of
   intangible
   assets from
   acquisitions                 835     1,026       343     1,861       682
  Integration costs               -         -     5,000         -     8,000
  Transaction costs          13,107         -    20,500    13,107    20,500
  Provision
   (recovery) of
   income taxes               2,603     5,246      (282)    7,849     2,285
----------------------------------------------------------------------------
Adjusted operating
 income                 B    31,334    26,302    14,497    57,636    26,540
Provision for taxes
 applicable to
 adjusted operating
 income                      (6,279)   (5,647)   (4,046)  (11,926)   (7,445)
----------------------------------------------------------------------------
After-tax adjusted
 operating income   D=B-C    25,055    20,655    10,451    45,710    19,095
----------------------------------------------------------------------------
Selected cash flow
 amounts
Free operating cash
 flow                   B    31,334    26,302    14,497    57,636    26,540
----------------------------------------------------------------------------
Selected statement
 of financial
 position amounts                 -
Finance
 receivables,
 before allowance
 for credit losses
 (1)                    E 3,164,453 2,996,601 2,174,650 3,164,453 2,174,650
Allowance for
 credit losses          F    11,767    11,086    10,973    11,767    10,973
----------------------------------------------------------------------------
Finance
 receivables, net
 (1)                G=E-F 3,152,686 2,985,515 2,163,677 3,152,686 2,163,677
Equipment under
 operating leases
 (1)                    H   909,783   813,480         -   909,783         -
----------------------------------------------------------------------------
Total earning
 assets             I=G+H 4,062,469 3,798,995 2,163,677 4,062,469 2,163,677
  Average earning
   assets, net          J 3,795,053 3,365,598 1,546,145 3,578,232 1,471,585
----------------------------------------------------------------------------
Goodwill and
 intangible assets      K   182,804   180,674   182,673   182,804   182,673
----------------------------------------------------------------------------
Accounts payable
 and accrued
 liabilities            L   103,976   112,590    80,917   103,976    80,917
----------------------------------------------------------------------------
Secured borrowings      M 2,356,990 2,467,016 1,539,011 2,356,990 1,539,011
Unsecured
 convertible
 debentures             N   299,264         -         -   299,264         -
----------------------------------------------------------------------------
Total debt              O 2,656,254 2,467,016 1,539,011 2,656,254 1,539,011
----------------------------------------------------------------------------
  Average debt          P 2,509,655 2,182,433 1,093,655 2,346,948 1,089,666
----------------------------------------------------------------------------
Total shareholders'
 equity                 Q 1,726,331 1,610,781   879,560 1,726,331   879,560
Preferred shares        R   357,243   235,142         -   357,243         -
----------------------------------------------------------------------------
Common
 shareholders'
 equity             S=Q-R 1,369,088 1,375,639   879,560 1,369,088   879,560
  Average common
   shareholders'
   equity               T 1,371,122 1,356,019   635,079 1,366,362   548,494
  Average total
   shareholders'
   equity               U 1,622,345 1,504,591   635,079 1,563,793   548,494
----------------------------------------------------------------------------

Non-IFRS and IFRS Key Annualized Operating Ratios and per Share Information:



----------------------------------------------------------------------------
                                                     As at and for the
                                                    three months ended
----------------------------------------------------------------------------
                                                June 30, March 31,  June 30,
$ thousands (except % and per share amounts)        2014      2014      2013
----------------------------------------------------------------------------
Free operating cashflow per share
 (basic) (1)                           (B-Y)/W $   0.14  $   0.13  $   0.11
After-tax adjusted operating
 income per share (basic)              (D-Y)/W $   0.11  $   0.10  $   0.08
----------------------------------------------------------------------------
Key annualized operating ratios
Financial leverage ratio                 (O)/Q     1.54      1.53      1.75
Tangible leverage ratio            (O+L)/(Q-K)     1.79      1.80      2.32
Average financial leverage ratio           P/U     1.55      1.45      1.72
Allowance for credit losses as a
 percentage of finance receivables         F/E     0.37%     0.37%     0.50%
Adjusted operating income on
 average common shareholders'
 equity                                (B-Y)/T     7.90%     7.04%     9.13%
Adjusted operating income on
 average earning assets                    B/J     3.30%     3.13%     3.75%
After-tax adjusted operating
 income on average common
 shareholders' equity                  (D-Y)/T     6.07%     5.37%     6.58%
After-tax adjusted operating
 income on average earning assets          D/J     2.64%     2.45%     2.70%
Per share information
Number of shares outstanding
 (including special warrants)                V  189,503   189,503   155,116
Weighted average number of shares
 outstanding (basic)                         W  189,503   189,215   129,362
Weighted average number of shares
 outstanding (diluted)                       X  194,808   194,114   129,362
Cumulative preferred share
 dividends during the period                 Y $  4,254  $  2,442  $      -
Net income (loss) per share
 (basic)                               (A-Y)/W $   0.04  $   0.07  $  (0.11)
Net income (loss) per share
 (diluted)                             (A-Y)/X $   0.04  $   0.07  $  (0.11)
Book value per share                       S/V $   7.22  $   7.26  $   5.67
----------------------------------------------------------------------------
(1) Prior period free operating cashflow per share (basic) has been restated
 for the change in definition applied in the current period.


----------------------------------------------------------------------------
                                                     As at and for the
                                                     six months ended
----------------------------------------------------------------------------
$ thousands (except % and per share amounts)    June 30, 2014  June 30, 2013
----------------------------------------------------------------------------
Free operating cashflow per share
 (basic) (1)                           (B-Y)/W   $      0.27    $      0.22
After-tax adjusted operating
 income per share (basic)              (D-Y)/W   $      0.21    $      0.16
----------------------------------------------------------------------------
Key annualized operating ratios
Financial leverage ratio                 (O)/Q          1.54           1.75
Tangible leverage ratio            (O+L)/(Q-K)          1.79           2.32
Average financial leverage ratio           P/U          1.50           1.99
Allowance for credit losses as a
 percentage of finance receivables         F/E          0.37%          0.50%
Adjusted operating income on
 average common shareholders'
 equity                                (B-Y)/T          7.46%          9.68%
Adjusted operating income on
 average earning assets                    B/J          3.22%          3.61%
After-tax adjusted operating
 income on average common
 shareholders' equity                  (D-Y)/T          5.71%          6.96%
After-tax adjusted operating
 income on average earning assets          D/J          2.55%          2.60%
Per share information
Number of shares outstanding
 (including special warrants)                V       189,503        155,116
Weighted average number of shares
 outstanding (basic)                         W       189,360        118,597
Weighted average number of shares
 outstanding (diluted)                       X       194,698        118,597
Cumulative preferred share
 dividends during the period                 Y   $     6,696    $         -
Net income (loss) per share
 (basic)                               (A-Y)/W   $      0.11    $     (0.08)
Net income (loss) per share
 (diluted)                             (A-Y)/X   $      0.10    $     (0.08)
Book value per share                       S/V   $      7.22    $      5.67
----------------------------------------------------------------------------
(1) Prior period free operating cashflow per share (basic) has been restated
 for the change in definition applied in the current period.

Selected Financial Information and Financial Ratios

The following table summarizes key financial data to be read in conjunction with the unaudited interim condensed consolidated financial statements of the Company as at and for three months ended June 30, 2014, March 31, 2014 and June 30, 2013. Such financial statements are prepared in accordance with IFRS and are reported in Canadian dollars.



                                             As at and for the
                                            three months ended
----------------------------------------------------------------------------
(in $000's for stated values,
 except ratios and per share    June 30, 2014 March 31, 2014   June 30, 2013
 amounts)                                   $              $               $
----------------------------------------------------------------------------
----------------------------------------------------------------------------
After tax adjusted operating
 income (loss) per share
 (basic)                                 0.11           0.10           0.08
----------------------------------------------------------------------------
----------------------------------------------------------------------------
Free operating cash flows per
 share (basic)                           0.14           0.13           0.11
----------------------------------------------------------------------------
----------------------------------------------------------------------------
Financial revenue                      75,077         66,500         33,960
----------------------------------------------------------------------------
Adjusted operating income              31,334         26,302         14,497
----------------------------------------------------------------------------
After tax adjusted operating
 income                                25,055         20,655         10,451
----------------------------------------------------------------------------
Income/(loss) before taxes             13,731         21,082        (14,164)
----------------------------------------------------------------------------
Net income/(loss)                      11,128         15,836        (13,882)
----------------------------------------------------------------------------
----------------------------------------------------------------------------
Total assets                        5,483,252      4,234,963      2,533,370
----------------------------------------------------------------------------
----------------------------------------------------------------------------
Finance receivables, net            3,152,686      2,985,515      2,163,677
Equipment under operating
 leases                               909,783        813,480              -
----------------------------------------------------------------------------
Total earning assets                4,062,469      3,798,995      2,163,677
----------------------------------------------------------------------------
----------------------------------------------------------------------------
New originations                      792,603      1,084,014        397,896
Loan acquisitions                           -              -        488,692
----------------------------------------------------------------------------
----------------------------------------------------------------------------
Secured borrowings                  2,356,990      2,467,016      1,539,011
Convertible debentures                299,264              -              -
----------------------------------------------------------------------------
Total debt                          2,656,254      2,467,016      1,539,011
----------------------------------------------------------------------------
----------------------------------------------------------------------------
Average finance receivables         2,993,305      2,811,352      1,546,145
Average equipment under
 operating leases                     801,748        554,246              -
----------------------------------------------------------------------------
Average earning assets              3,795,053      3,365,598      1,546,145
----------------------------------------------------------------------------
----------------------------------------------------------------------------
Average debt outstanding            2,509,655      2,182,433      1,093,655
----------------------------------------------------------------------------
----------------------------------------------------------------------------
Number of shares outstanding
 (including special warrants)         189,503    189,502.737    155,115.941
Weighted average number of
 shares outstanding (including
 special warrants)                    189,503    189,214.813    129,362.171
Weighted average number of
 shares outstanding (diluted)         194,808    194,113.733    129,362.171
Total shareholders' equity          1,726,331      1,610,781        879,560
Average common shareholders'
 equity                             1,371,122      1,356,019        635,079
----------------------------------------------------------------------------
----------------------------------------------------------------------------
Net income (loss) per share
 (basic)                                 0.04           0.07          (0.11)
Net income (loss) per share
 (diluted)                               0.04           0.07          (0.11)
----------------------------------------------------------------------------
----------------------------------------------------------------------------


                                             As at and for the
                                             six months ended
----------------------------------------------------------------------------
(in $000's for stated values,
 except ratios and per share           June 30, 2014           June 30, 2013
 amounts)                                          $                       $
----------------------------------------------------------------------------
----------------------------------------------------------------------------
After tax adjusted operating
 income (loss) per share
 (basic)                                        0.21                   0.16
----------------------------------------------------------------------------
----------------------------------------------------------------------------
Free operating cash flows per
 share (basic)                                  0.27                   0.22
----------------------------------------------------------------------------
----------------------------------------------------------------------------
Financial revenue                            141,577                 65,798
----------------------------------------------------------------------------
Adjusted operating income                     57,636                 26,540
----------------------------------------------------------------------------
After tax adjusted operating
 income                                       45,710                 19,095
----------------------------------------------------------------------------
Income/(loss) before taxes                    34,813                 (6,912)
----------------------------------------------------------------------------
Net income/(loss)                             26,964                 (9,197)
----------------------------------------------------------------------------
----------------------------------------------------------------------------
Total assets                               5,483,252              2,533,370
----------------------------------------------------------------------------
----------------------------------------------------------------------------
Finance receivables, net                   3,152,686              2,163,677
Equipment under operating
 leases                                      909,783                      -
----------------------------------------------------------------------------
Total earning assets                       4,062,469              2,163,677
----------------------------------------------------------------------------
----------------------------------------------------------------------------
New originations                           1,876,617                694,147
Loan acquisitions                                  -                572,735
----------------------------------------------------------------------------
----------------------------------------------------------------------------
Secured borrowings                         2,356,990              1,539,011
Convertible debentures                       299,264                      -
----------------------------------------------------------------------------
Total debt                                 2,656,254              1,539,011
----------------------------------------------------------------------------
----------------------------------------------------------------------------
Average finance receivables                2,899,728              1,471,585
Average equipment under
 operating leases                            678,504                      -
----------------------------------------------------------------------------
Average earning assets                     3,578,232              1,471,585
----------------------------------------------------------------------------
----------------------------------------------------------------------------
Average debt outstanding                   2,346,948              1,089,666
----------------------------------------------------------------------------
----------------------------------------------------------------------------
Number of shares outstanding
 (including special warrants)                189,503            155,115.941
Weighted average number of
 shares outstanding (including
 special warrants)                           189,360            118,596.525
Weighted average number of
 shares outstanding (diluted)                194,698            118,596.525
Total shareholders' equity                 1,726,331                879,560
Average common shareholders'
 equity                                    1,366,362                548,494
----------------------------------------------------------------------------
----------------------------------------------------------------------------
Net income (loss) per share
 (basic)                                        0.11                  (0.08)
Net income (loss) per share
 (diluted)                                      0.10                  (0.08)
----------------------------------------------------------------------------
----------------------------------------------------------------------------

The following table summarizes key operating ratios to be read in conjunction with the unaudited interim condensed consolidated financial statements of the Company as at and for the three months ended:



                                    As at and for the      As at and for the
                                three-month periods ended  six months ended
----------------------------------------------------------------------------
                               June 30, March 31, June 30, June 30, June 30,
                                   2014      2014     2013     2014     2013
----------------------------------------------------------------------------
Ratios
Financial leverage ratio (2)      1.54      1.53     1.75     1.54     1.75

Tangible leverage ratio (3)       1.79      1.80     2.32     1.79     2.32

Average financial leverage
 ratio                            1.55      1.45     1.72     1.50     1.99

Allowance for credit losses as
 a percentage of finance
 receivables                      0.37%     0.37%    0.50%    0.37%    0.50%

Annualized credit loss
 provision as a percentage of
 average finance receivables      0.52%     0.43%    0.28%    0.47%    0.36%

Portfolio average remaining
 life (in months, excluding
 equipment under operating
 leases)                          27.3      28.8     22.6     27.3     22.6

Adjusted operating income on
 average common shareholders'
 equity                           7.90%     7.04%    9.13%    7.46%    9.68%

Adjusted operating income on
 average earning assets           3.30%     3.13%    3.75%    3.22%    3.61%

After-tax adjusted operating
 income on average common
 shareholders' equity             6.07%     5.37%    6.58%    5.71%    6.96%

After-tax adjusted operating
 income on average earning
 assets                           2.64%     2.45%    2.70%    2.55%    2.60%

Book value per share           $  7.22  $   7.26  $  5.67  $  7.22  $  5.67
----------------------------------------------------------------------------
(1) All are ratios presented on an annualized basis.
(2) Financial leverage ratio is computed as total debt (the sum of secured
 borrowings and extendible convertible debentures) divided by total
 shareholders equity.
(3) Tangible leverage ratio is computed as the sum of secured borrowings,
 convertible debentures and accounts payable and accrued liabilities,
 divided by shareholders equity less goodwill and intangible assets.

Results of Operations - For the three months ended June 30, 2014, March 31, 2014 and June 30, 2013 and six months ended June 30, 2014 and June 30, 2013

The following table sets forth a summary of the Company's results of operations for the three months ended June 30, 2014, March 31, 2014 and June 30, 2013 and six months ended June 30, 2014 and June 30, 2013:



                                         For the                For the
                                   three-month periods     six month periods
                                          ended                  ended
----------------------------------------------------------------------------
                               June 30, March 31, June 30, June 30, June 30,
(in 000's for stated values,       2014      2014     2013     2014     2013
 except per unit amounts)             $         $        $        $        $
----------------------------------------------------------------------------
Net Financial Income
Interest income                  51,547    48,545  29,564   100,092  56,437
Rental revenue, net (1)          14,501    10,174       -    24,675       -
----------------------------------------------------------------------------
Total interest income and
 rental revenue, net             66,048    58,719  29,564   124,767  56,437
Interest expense                 22,985    21,533   9,212    44,518  18,255
----------------------------------------------------------------------------
Net interest income and rental
 revenue, net before provision
 for credit losses               43,063    37,186  20,352    80,249  38,182
Provision for credit losses       3,868     2,958   1,099     6,826   2,670
----------------------------------------------------------------------------
Net interest income and rental
 revenue, net                    39,195    34,228  19,253    73,423  35,512
Other revenue items              12,897    10,739   5,495    23,636  12,031
----------------------------------------------------------------------------
Net financial income             52,092    44,967  24,748    97,059  47,543
Operating Expenses
Salaries, wages and benefits     12,564    12,567   7,994    25,131  15,156
General and administration
 expenses                         8,194     6,098   2,257    14,292   5,847
Share-based compensation          3,661     4,194   2,818     7,855   4,270
----------------------------------------------------------------------------
                                 24,419    22,859  13,069    47,278  25,273
----------------------------------------------------------------------------
Business acquisition costs
Amortization of intangibles
 from acquisition                   835     1,026     343     1,861     682
Integration costs                     -         -   5,000         -   8,000
Transaction costs                13,107         -  20,500    13,107  20,500
----------------------------------------------------------------------------
                                 13,942     1,026  25,843    14,968  29,182
----------------------------------------------------------------------------
Net income/(loss) before taxes   13,731    21,082 (14,164)   34,813  (6,912)
Tax expense/(recovery)            2,603     5,246    (282)    7,849   2,285
----------------------------------------------------------------------------
Net income/(loss) for the
 period                          11,128    15,836 (13,882)   26,964  (9,197)
----------------------------------------------------------------------------
----------------------------------------------------------------------------

Net income/(loss) per share
 (basic)                           0.04      0.07   (0.11)     0.11   (0.08)
Net income/(loss) per share
 (diluted)                         0.04      0.07   (0.11)     0.10   (0.08)
----------------------------------------------------------------------------
----------------------------------------------------------------------------
(1) Rental revenue, net is represents rental income earned on equipment
 under operating leases, less depreciation.

Overall Performance Highlights

The Company's earning assets, consisting of the Company's Finance receivables and Equipment under operating leases, have grown substantially during the period to June 30, 2014 to $4,062.5 million from $3,002.3 million reported at December 31, 2013. The growth over December 31, 2013 is primarily due to the combined effect of the total new originations for the year in the amount of $1,876.6 million, helped by the large contribution of the Trinity vendor program, net of repayments, syndication activities, amortization of equipment under operating leases and changes in foreign exchange rates of $816.4 million.

The Company is reporting a net income of $11.1 million for the three months ended June 30, 2014, compared to $(13.9) million in the comparative period ended June 30, 2013, and $15.8 million in the immediately preceding quarter ended March 31, 2014. Net income for the six month period ended June 30, 2014 was $27.0 million, compared to $(9.2) million for the comparative six month period ended June 30, 2013. Basic net income per share was $0.04 for the three-months ended June 30, 2014, compared to $(0.11) for the comparative period ended June 30, 2013 and $0.07 for the immediately preceding quarter ended March 31, 2014. Basic net income per share for the six month period ended June 30, 2014 was $0.11 versus $(0.08) for the comparative six month period ended June 30, 2013. The improved results over the comparative periods are due to the timing of business acquisition costs which do not relate to maintaining operating activities and were incurred in the previous quarter but not in the current quarter.

As indicated previously, management believes that adjusted operating income is the most appropriate operating measure of the Company's performance as it excludes non-cash items related to share-based compensation and business acquisition costs which do not relate to maintaining operating activities. For the three months ended June 30, 2014, the Company is reporting adjusted operating income of $31.3 million and after-tax adjusted operating income per share of $0.11, compared to $14.5 million in adjusted operating income or $0.08 in after tax operating income per share for the comparative three months ended June 30, 2013, and compared to $26.3 million in adjusted operating income or $0.10 in after tax operating income per share for the immediately preceding quarter ended March 31, 2014. For the six month period ended June 30, 2014, the Company is reporting adjusted operating income of $57.6 million and after-tax adjusted operating income per share of $0.21, compared to $26.5 million and $0.16 per share in the comparative six month period ended June 30, 2013.

As indicated previously, Management also believes that Free Operating Cash Flows and Free Operating Cash Flows per Share as described in the Non-IFRS Measures section of this MD&A are a key statistics to properly assess the operating performances of the Company to mostly reflect the substantial value being created by the very long deferral of cash income taxes and the investment value produced by that deferral. So, while the Company is reporting after-tax adjusted operating income per share of $0.11 and $0.21 for the three and six months ended June 30, 2014, free operating cash flows per share reaches $0.14 and $0.27 per share, respectively.

Consolidated Financial Position

The following table sets forth a summary of the Company's consolidated financial position as of the dates presented:


                                                                       As at
----------------------------------------------------------------------------
                                          June 30,   March 31,  December 31,
(in 000's for stated values, except           2014        2014          2013
 per unit amounts)                               $           $             $
----------------------------------------------------------------------------

Cash                                        35,727      42,093        12,401
Restricted cash                            141,035     102,066       103,550
Cash held in escrow                        929,834           -             -
Finance receivables                      3,152,686   2,985,515     2,763,228
Equipment under operating leases           909,783     813,480       239,055
Derivative financial instruments               525       1,129             -
Deferred tax assets                         29,761      31,729        28,231
Non-portfolio assets                       283,901     258,951       308,188
----------------------------------------------------------------------------
Total assets                             5,483,252   4,234,963     3,454,653
----------------------------------------------------------------------------
----------------------------------------------------------------------------

Accounts payable and accrued
 liabilities                               103,976     113,254        80,917
Subscription receipts escrow liability     929,834           -             -
Secured borrowings                       2,356,990   2,467,016     1,893,910
Convertible debentures                     299,264           -             -
Derivative financial instruments            37,437       7,747         3,014
Deferred tax liabilities                    29,420      36,165        30,156
----------------------------------------------------------------------------
Total liabilities                        3,756,921   2,624,182     2,007,997
Shareholders' equity                     1,726,331   1,610,781     1,446,656
----------------------------------------------------------------------------
Total liabilities and shareholders'
 equity                                  5,483,252   4,234,963     3,454,653
----------------------------------------------------------------------------
----------------------------------------------------------------------------

About Element Financial Corporation

With total assets in excess of $10 billion, Element Financial Corporation is one of North America's leading equipment finance companies. Element operates across North America in four verticals of the equipment finance market - Commercial & Vendor Finance, Aviation Finance, Railcar Finance and Fleet Management.

This release includes forward-looking statements regarding Element and its business. Such statements are based on the current expectations and views of future events of Element's management. In some cases the forward-looking statements can be identified by words or phrases such as "may", "will", "expect", "plan", "anticipate", "intend", "potential", "estimate", "believe" or the negative of these terms, or other similar expressions intended to identify forward-looking statements, including, among others, statements regarding new originations in the current quarter, the anticipated pipeline of prospective transactions, and proposed purchases of portfolios of finance assets. The forward-looking events and circumstances discussed in this release may not occur and could differ materially as a result of known and unknown risk factors and uncertainties affecting Element, including risks regarding the equipment finance industry, economic factors, risks related to completion of the proposed purchases of portfolios of finance assets, and many other factors beyond the control of Element. No forward-looking statement can be guaranteed. Forward-looking statements and information by their nature are based on assumptions and involve known and unknown risks, uncertainties and other factors which may cause our actual results, performance or achievements, or industry results, to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statement or information. Accordingly, readers should not place undue reliance on any forward-looking statements or information. A discussion of the material risks and assumptions associated with this outlook can be found in Element's 2013 MD&A, and 2013 Annual Information Form, all of which have been filed on SEDAR and can be accessed at www.sedar.com. Accordingly, readers should not place undue reliance on any forward-looking statements or information. Except as required by applicable securities laws, forward-looking statements speak only as of the date on which they are made and Element undertakes no obligation to publicly update or revise any forward-looking statement, whether as a result of new information, future events, or otherwise.

More Stories By Marketwired .

Copyright © 2009 Marketwired. All rights reserved. All the news releases provided by Marketwired are copyrighted. Any forms of copying other than an individual user's personal reference without express written permission is prohibited. Further distribution of these materials is strictly forbidden, including but not limited to, posting, emailing, faxing, archiving in a public database, redistributing via a computer network or in a printed form.

Latest Stories
It's easy to assume that your app will run on a fast and reliable network. The reality for your app's users, though, is often a slow, unreliable network with spotty coverage. What happens when the network doesn't work, or when the device is in airplane mode? You get unhappy, frustrated users. An offline-first app is an app that works, without error, when there is no network connection.
Data-as-a-Service is the complete package for the transformation of raw data into meaningful data assets and the delivery of those data assets. In her session at 18th Cloud Expo, Lakshmi Randall, an industry expert, analyst and strategist, will address: What is DaaS (Data-as-a-Service)? Challenges addressed by DaaS Vendors that are enabling DaaS Architecture options for DaaS
One of the bewildering things about DevOps is integrating the massive toolchain including the dozens of new tools that seem to crop up every year. Part of DevOps is Continuous Delivery and having a complex toolchain can add additional integration and setup to your developer environment. In his session at @DevOpsSummit at 18th Cloud Expo, Miko Matsumura, Chief Marketing Officer of Gradle Inc., will discuss which tools to use in a developer stack, how to provision the toolchain to minimize onboa...
SYS-CON Events announced today that Catchpoint Systems, Inc., a provider of innovative web and infrastructure monitoring solutions, has been named “Silver Sponsor” of SYS-CON's DevOps Summit at 18th Cloud Expo New York, which will take place June 7-9, 2016, at the Javits Center in New York City, NY. Catchpoint is a leading Digital Performance Analytics company that provides unparalleled insight into customer-critical services to help consistently deliver an amazing customer experience. Designed...
With the proliferation of both SQL and NoSQL databases, organizations can now target specific fit-for-purpose database tools for their different application needs regarding scalability, ease of use, ACID support, etc. Platform as a Service offerings make this even easier now, enabling developers to roll out their own database infrastructure in minutes with minimal management overhead. However, this same amount of flexibility also comes with the challenges of picking the right tool, on the right ...
CIOs and those charged with running IT Operations are challenged to deliver secure, audited, and reliable compute environments for the applications and data for the business. Behind the scenes these tasks are often accomplished by following onerous time-consuming processes and often the management of these environments and processes will be outsourced to multiple IT service providers. In addition, the division of work is often siloed into traditional "towers" that are not well integrated for cro...
SYS-CON Events announced today that FalconStor Software® Inc., a 15-year innovator of software-defined storage solutions, will exhibit at SYS-CON's 18th International Cloud Expo®, which will take place on June 7-9, 2016, at the Javits Center in New York City, NY. FalconStor Software®, Inc. (NASDAQ: FALC) is a leading software-defined storage company offering a converged, hardware-agnostic, software-defined storage and data services platform. Its flagship solution FreeStor®, utilizes a horizonta...
With an estimated 50 billion devices connected to the Internet by 2020, several industries will begin to expand their capabilities for retaining end point data at the edge to better utilize the range of data types and sheer volume of M2M data generated by the Internet of Things. In his session at @ThingsExpo, Don DeLoach, CEO and President of Infobright, will discuss the infrastructures businesses will need to implement to handle this explosion of data by providing specific use cases for filte...
SYS-CON Events announced today that Avere Systems, a leading provider of enterprise storage for the hybrid cloud, will exhibit at SYS-CON's 18th International Cloud Expo®, which will take place on June 7-9, 2016, at the Javits Center in New York City, NY. Avere delivers a more modern architectural approach to storage that doesn’t require the overprovisioning of storage capacity to achieve performance, overspending on expensive storage media for inactive data or the overbuilding of data centers ...
SYS-CON Events announced today that Pythian, a global IT services company specializing in helping companies adopt disruptive technologies to optimize revenue-generating systems, has been named “Bronze Sponsor” of SYS-CON's 18th Cloud Expo, which will take place on June 7-9, 2015 at the Javits Center in New York, New York. Founded in 1997, Pythian is a global IT services company that helps companies compete by adopting disruptive technologies such as cloud, Big Data, advanced analytics, and DevO...
SYS-CON Events announced today that Commvault, a global leader in enterprise data protection and information management, has been named “Bronze Sponsor” of SYS-CON's 18th International Cloud Expo, which will take place on June 7–9, 2016, at the Javits Center in New York City, NY, and the 19th International Cloud Expo, which will take place on November 1–3, 2016, at the Santa Clara Convention Center in Santa Clara, CA. Commvault is a leading provider of data protection and information management...
SYS-CON Events announced today that Interoute, owner-operator of one of Europe's largest networks and a global cloud services platform, has been named “Bronze Sponsor” of SYS-CON's 18th Cloud Expo, which will take place on June 7-9, 2015 at the Javits Center in New York, New York. Interoute is the owner-operator of one of Europe's largest networks and a global cloud services platform which encompasses 12 data centers, 14 virtual data centers and 31 colocation centers, with connections to 195 ad...
The Quantified Economy represents the total global addressable market (TAM) for IoT that, according to a recent IDC report, will grow to an unprecedented $1.3 trillion by 2019. With this the third wave of the Internet-global proliferation of connected devices, appliances and sensors is poised to take off in 2016. In his session at @ThingsExpo, David McLauchlan, CEO and co-founder of Buddy Platform, will discuss how the ability to access and analyze the massive volume of streaming data from mil...
SYS-CON Events announced today that Alert Logic, Inc., the leading provider of Security-as-a-Service solutions for the cloud, will exhibit at SYS-CON's 18th International Cloud Expo®, which will take place on June 7-9, 2016, at the Javits Center in New York City, NY. Alert Logic, Inc., provides Security-as-a-Service for on-premises, cloud, and hybrid infrastructures, delivering deep security insight and continuous protection for customers at a lower cost than traditional security solutions. Ful...
SYS-CON Events announced today that Column Technologies will exhibit at SYS-CON's @DevOpsSummit at Cloud Expo, which will take place on June 7-9, 2016, at the Javits Center in New York City, NY. Established in 1998, Column Technologies is a global technology solutions provider with over 400 employees, headquartered in the United States with offices in Canada, India, and the United Kingdom. Column Technologies provides “Best of Breed” technology solutions that automate the key DevOps principal...