TORONTO — May 26, 2023 — Flow Capital Corp. (TSXV:FW) (“Flow Capital” and “Company”), a leading provider of flexible growth capital and alternative debt solutions, announces its unaudited financial and operating results for the quarter ending March 31, 2023 (“Q1 2023”). Financial references are in Canadian dollars unless otherwise specified.
Q1 2023 Highlights
(1) Excludes loan amortization revenue and one-time payments. [2] Adjusted recurring free cash flow is an internally defined, non-IFRS measure calculated as recurring revenues from interest and royalties, less recurring operating expenses less interest expense.
“While our revenues were down slightly year over year, they were in line with our expectations. Slower than expected capital deployment combined with several early repayments has led to flat revenue growth.” said Alex Baluta, CEO of Flow Capital. “However, our balance sheet remains very strong with over $10M in cash, and we continue to generate positive cash flow from recurring operations”.
Flow Capital continues to focus its efforts on originating and investing in high growth companies looking to fuel expansion without the excessive and expensive dilution of equity, or restrictive covenants of conventional debt. With over thirty million small and medium sized business in the United States and Canada, and tens of millions of others in Flow Capital’s addressable geographies and sectors, there is a large market of potential investment opportunities.
“In spite of the slow capital deployment, we continue to see a very strong pipeline in terms of quality of opportunities. The equity market volatility is generating a marked increase in demand for the type of creative and flexible capital provided by Flow. In fact, our qualified deal pipeline was at record levels in Q1 and we expect that several of the deals already in late stage due diligence, should close over the coming weeks”, said Alex Baluta, CEO of Flow Capital.
Detailed Financial results are available on our website at www.flowcap.com or on www.sedar.com.
Revenues
Total revenue for the three-month period ended March 31, 2023, was $1,747,126 compared to $3,868,286 in the three-month period ended March 31, 2022. Loan interest and royalty payment income for the three-month period ended March 31, 2023, was $1,691,481 representing a 4.2 % decrease from the $1,765,374, earned in the three-month period ended March 31, 2022.
Of the $1,691,481 loan interest and royalty payment income earned during the three-month period ended March 31, 2023, $103,666 was contributed by interest earned from new investments acquired in the last twelve months, $1,422,673 from loan interest and royalty payment income from the existing portfolio, and $165,142 on account of loan amortization adjustments.
Income from changes in value of financial assets for the three-month period ended March 31, 2023, was $(19,089) compared to $2,100,805 for the three-month period ended March 31, 2022.
Operating Expense
Total operating expenses for the three-month period ended March 31, 2023, were $807,073 (2022 – $760,289). The increase is primarily due to higher professional fees compared to the previous corresponding periods.
Profit After Taxes
Profit after taxes for the three-month period ended March 31, 2023, were $ 345,450 (2022 – $2,349,942). The movements in the profit after taxes was primarily on account of stable loan interest and royalty payment income and favourable foreign exchange impacts, offset by fewer buyouts, fair value movements, and marginally higher operating costs, compared to the corresponding periods in the previous year.
Conference Call Details
Flow Capital will host a conference call to discuss these results at 9:00 a.m. Eastern Time, on Monday, May 29, 2023. Participants should call +1 (888) 886-7786 or +1 (416) 764-8658 and ask an operator for the Flow Capital earnings call, Conference ID 16372857. Please dial in 10 minutes prior to the call to secure a line. A replay will be available shortly after the call. To access the replay, please dial +1 (416) 764-8692 or +1 (877) 674-7070 and enter passcode 372857#. The replay recording will be available until 11:59 p.m. Eastern Time, June 12, 2023.
An audio recording of the conference call will be also available on the investors’ page of Flow Capital’s website at www.flowcap.com/investor-relations/2023
About Flow Capital
Flow Capital Corp. is a diversified alternative asset investor and advisor, specializing in providing minimally dilutive capital to emerging growth businesses. To apply for financing, visit www.flowcap.com.
For further information, please contact:
Flow Capital Corp.
Alex Baluta
Chief Executive Officer
1 Adelaide Street East, Suite 3002,
PO Box 171, Toronto, Ontario M5C 2V9
Certain statements herein may be “forward-looking” statements that involve known and unknown risks, uncertainties and other factors that may cause the actual results, performance or achievements of Flow or the industry to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements. Forward looking statements involve significant risks and uncertainties, should not be read as guarantees of future performance or results, and will not necessarily be accurate indications of whether such results will be achieved. A number of factors could cause actual results to vary significantly from the results discussed in the forward-looking statements. These forward-looking statements reflect current assumptions and expectations regarding future events and operating performance and are made as of the date hereof and Flow assumes no obligation, except as required by law, to update any forward-looking statements to reflect new events or circumstances.
