XS Financial Reports 2023 Fourth Quarter and Full Year Results
XS Financial Inc. reports its financial results for Q4/23 and full year 2023, showcasing a 54% YoY increase in annual revenue to $11.7 million and a 142% YoY improvement in net distributable earnings to $0.4 million. Despite challenges with a customer potentially rejecting leases, the company remains optimistic about industry growth in 2024.
- Record annual revenue of $11.7 million and net distributable earnings of $0.4 million in 2023.
- 54% YoY increase in annual revenue and 142% YoY improvement in net distributable earnings.
- Challenges with a customer potentially rejecting leases affecting 3.9% of total lease receivables.
- Positive outlook for industry growth in the second half of 2024.
- Customer challenges may impact lease receivables.
- Potential industry slowdown affecting growth rates.
- Non-cash losses related to changes in fair value impacting financial results.
Company Generates Record Annual Revenue of
LOS ANGELES, CA / ACCESSWIRE / April 26, 2024 / XS Financial Inc. ("XS Financial", "XSF" or the "Company") (CSE:XSF)(OTCQB:XSHLF), a specialty finance company providing CAPEX and equipment financing solutions to cannabis companies in the United States, reports its financial results today for the fourth quarter end and year ended December 31, 2023. All amounts are expressed in U.S. dollars unless indicated otherwise.
Q4/23 and Full Year 2023 Financial Highlights
54% YoY increase in annual revenue to$11.7 million in FY23 from$7.6 million in FY22;14% YoY increase in Q4 revenue to$2.9 million in Q4/23 from$2.5 million in Q4/22;142% YoY improvement in net distributable earnings to$0.4 million in FY23 from$(0.9) million in FY22;- XSF has become aware that its customer Green Peak/Skymint, whose assets were previously put in receivership in 2023, may reject its leases with the Company. The lease receivables associated with this customer represent
3.9% of our total lease receivables as of 12/31/23.
Post-Year-End Portfolio and Corporate Highlights:
| Q1/23 | Q2/23 | Q3/23 | Q4/23 | As of 04/26/2024 | ||||||||||||||||
# of Customers | 16 | 16 | 16 | 16 | 16 | |||||||||||||||
# of Active Leases | 185 | 206 | 222 | 228 | 234 | |||||||||||||||
Active Leases Since Inception | $ | 111.4mm | $ | 117.3mm | $ | 127.0mm | $ | 127.9mm | $ | 129.4mm | ||||||||||
Average Lease Size by Customer | $ | 7.0mm | $ | 7.3mm | $ | 7.9mm | $ | 8.0mm | $ | 8.1mm | ||||||||||
Monthly Recurring Payments | $ | 2.8mm | $ | 3.2mm | $ | 3.2mm | $ | 3.3mm | ||||||||||||
Gross Lease Receivables | $ | 111.8mm | $ | 111.5mm | $ | 113.1mm | $ | 104.6mm | $ | 93.2mm | ||||||||||
David Kivitz, CEO of XS Financial commented: "2023 was a transitional year for XS Financial. We had continued revenue growth and operational performance and generated positive net distributable earnings for the year. In 2023 and the first four months of 2024, we witnessed a slowdown in our industry and, as a result, have not experienced the rate of growth from prior years. We expect a pickup in the second half of 2024, as certain state markets expand from medical to adult use."
Summary Financial Results - Three Months and Fiscal Year Ending December 31st, 2023
The following table sets forth selected financial information for the periods indicated that was derived from our audited financial statements.
| For the three months ended | For the year ended | |||||||||||||||
| December 31 | December 31 | |||||||||||||||
| 2023 | 2022 | 2023 | 2022 | |||||||||||||
Financing income | $ | 2,902,604 | $ | 2,541,008 | $ | 11,675,203 | $ | 7,567,473 | ||||||||
Operating expenses | $ | 816,579 | $ | 1,728,200 | $ | 5,830,758 | $ | 5,630,156 | ||||||||
Other expenses (income) | $ | 1,940,257 | $ | (614,810 | ) | $ | 12,351,464 | $ | 8,242,805 | |||||||
Net (loss) income | $ | 145,768 | $ | 1,427,618 | $ | (6,507,019 | ) | $ | (6,305,488 | ) | ||||||
Income (loss) per share - basic | $ | 0.00 | $ | 0.01 | $ | (0.06 | ) | $ | (0.06 | ) | ||||||
Weighted average shares outstanding - basic | 103,885,041 | 103,885,041 | 103,885,041 | 103,885,041 | ||||||||||||
Revenues for the three months ended December 31, 2023, were
Operating expenses for the quarter decreased
Other expense for the three months ended December 31, 2023, was
Net income for the quarter was
Earnings Per Share ("EPS")
| Q3/22 | Q4/22 | Q1/23 | Q2/23 | Q3/23 | Q4/23 | |||||||||||||||||||
Earnings (Loss) Per Share | $ | (0.03 | ) | $ | 0.01 | $ | (0.02 | ) | $ | (0.02 | ) | $ | (0.03 | ) | $ | 0.00 |
Net Distributable Earnings
After adjusting for non-cash items, including unrealized loss in fair value change of investments, accretion expense, and change in fair value of derivative liabilities and stock-based compensation, the Company reported net distributable earnings of
Summary of Net Distributable Earnings - Fiscal Year 2023 compared to Fiscal Year 2022
| FY 2023 | FY 2022 | |||||||
Operating Income | $ | 5,844,445 | $ | 1,937,317 | ||||
Add: Depreciation Expense | $ | 15,447 | $ | 17,131 | ||||
Add: Noncash Equity Compensation | $ | 1,927,853 | $ | 1,966,075 | ||||
Less: Interest Expense | $ | (7,387,979 | ) | $ | (4,866,565 | ) | ||
Net Distributable Earnings | $ | 399,766 | $ | (946,042 | ) | |||
XS Financials' complete annual financial statements and management's discussion and analysis for the fourth quarter ended December 31st, 2023, will be filed under the Company's profile on www.sedar.com, and will also be available on XS Financial's corporate website at www.xsfinancial.com/investors
About XS Financial
Founded in 2017, XS Financial specializes in providing CAPEX financing solutions to cannabis companies in the United States, including cultivators, processors, manufacturers, and testing laboratories. In addition, XSF has partnered with over 250 original equipment manufacturers (OEM) through its network of Preferred Vendor partnerships. This powerful dynamic provides an end-to-end solution for customers which results in recurring revenues, strong profit margins, and a proven business model for XSF stakeholders. The Company's subordinate voting shares are traded on the Canadian Securities Exchange under the symbol "XSF". For more information, visit: www.xsfinancial.com.
For inquiries please contact:
| David Kivitz Chief Executive Officer | Antony Radbod Chief Operating Officer |
| Tel: 1-310-683-2336 | |
| Email: ir@xsfinancial.com | |
Non-IFRS Financial Measures
This press release includes references to certain non-IFRS financial measures. These non-IFRS measures do not have any standardized meanings prescribed by International Financial Reporting Standards (IFRS) as issued by the International Accounting Standards Board (IASB) and are therefore unlikely to be comparable to similar measures presented by other companies. Accordingly, they should not be considered in isolation, in addition to, not as a substitute for or superior to, measures of financial performance prepared in accordance with IFRS.
Forward-Looking Information
This press release contains "forward-looking information" and may also contain statements that may constitute "forward-looking statements", collectively "forward-looking information", within the meaning of applicable Canadian securities legislation. Such forward-looking information is not representative of historical facts or information or current condition, but instead represent the beliefs and expectations regarding future events about the business and the industry and markets in which XS Financial operates, as well as plans or objectives of management, many of which, by their nature, are inherently uncertain. Generally, such forward-looking information can be identified by the use of terminology such as "plans", "expects" or "does not expect", "is expected", "budget", "scheduled", "estimates", "forecasts", "intends", "anticipates" or "does not anticipate", or "believes", or variations of such words and phrases or may contain statements that certain actions, events or results "may", "could", "would", "might" or "will be taken", "will continue", "will occur" or "will be achieved". Forward-looking information contained herein may include but is not limited to, any additional leasing opportunities and the ability to capitalize on such and the timing thereof. Forward-looking information is not a guarantee of future performance and involve risks, uncertainties and assumptions which are difficult to predict. Accordingly, readers should not place undue reliance on forward-looking information, which are qualified in their entirety by this cautionary statement. XS Financial Inc., does not undertake any obligation to release publicly any revisions for updating any voluntary forward-looking information, except as required by applicable securities law.
Neither the Canadian Securities Exchange nor its Regulation Services Provider accepts responsibility for the adequacy or accuracy of this release.
SOURCE: XS Financial
View the original press release on accesswire.com
FAQ
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