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Difference Capital Reports Second Quarter 2015 Results

Written on August 11th, 2015

TORONTO, CANADA – August 11, 2015 – Difference Capital Financial Inc. (“DCF” or the “Company”) (TSX:DCF) (TSX:DCF.DB), today reports its unaudited financial results for the quarter ended June 30, 2015.

Q2 2015 Key Comments

  • The Company completed the acquisition (the “Internalization Acquisition”) of Difference Capital Inc. (“DCI”) and terminated its management agreement with Difference Capital Management Inc. (“DCM”). All DCI and DCM employees have become employed directly by DCF.
  • Net asset value per share decreased to $1.72 from $1.86 at March 31, 2015, based on a loss of $5.2 million for the quarter, including a one-time charge of $2.4 million relating to the Internalization Acquisition.
  • Cash on hand at the end of June 30, 2015 was $22.3 million.

“The acquisition of our private external manager should significantly streamline operations and add value to the Company through enhanced cost control and a simplified management structure,” said Henry Kneis, Chief Executive Officer of DCF.

“We remain cautiously optimistic on the prospects for our investment portfolio this year based on a strong technology IPO and M&A market as well as the progress being made by several of our portfolio companies,” commented Tom Astle, Chief Investment Officer of DCF.

 (figures are in $’000 except per share amounts and shares outstanding)   Q2 2015Q1 2015Q2 2014  
Net realized gain (loss) on investments and marketable securities$346($8,350)$1,015
Net unrealized gain (loss) on investments and marketable securities(1,925)14,161(11,217)
Other income7091,3461,848
Total expenses(4,361)(3,661)(4,641)
Net income (loss)(5,231)3,496(12,995)
Basic and fully diluted earnings per share($0.14)$0.09($0.33)
Total assets$107,692$113,678$157,125
Total liabilities45,69846,10752,255
Net asset value61,99467,571104,870
Shares outstanding35,940,93436,328,93438,856,234
Net asset value per share$1.72$1.86$2.70
Share price$0.82$0.93 $1.74


Second Quarter Financial Results

Net loss for the quarter ended June 30, 2015 was $5.2 million, or $0.14 per share, compared to a net loss of $13.0 million, or $0.33 per share, for the quarter ended June 30, 2014 and a net income of $3.5 million, or $0.09 per share, for the quarter ended March 31, 2015.

For the three months ended June 30, 2015, the Company generated $0.3 million of net realized gains, which resulted primarily from sales of publicly listed securities. During the same period last year, net realized gains on investments and marketable securities were $1.0 million.

The Company recorded $1.9 million of unrealized loss on investments and marketable securities for the three months ended June 30, 2015, primarily due to marked-to-market losses of publicly listed securities and an unrealized foreign exchange loss on foreign investments. For the three months ended June 30, 2014, the Company recorded $11.2 million of net unrealized loss on investments and marketable securities.

Other income decreased from $1.8 million for the three months ended June 30, 2014 to $0.7 million for the three months ended June 30, 2015. The decrease in other income was primarily due to lower interest and dividend income totaling $0.6 million, down from $1.6 million in the same period of 2014, due to a smaller portfolio of convertible debentures and debentures.

Total expenses during the quarter ended June 30, 2015 were $4.4 million compared to $4.6 million for the quarter ended June 30, 2014. Included in total expenses during the quarter was $2.4 million of acquisition costs related to the Internalization Acquisition. This cost was partially offset by the reversal of $0.9 million of accrued performance fees.

Please refer to the section regarding forward-looking statements which form an integral part of this release. The unaudited financial statements and management discussion and analysis for June 30, 2015 are available on the Company’s website at http://www.differencecapital.com and on SEDAR at http://www.sedar.com.

About Difference Capital Financial Inc.

Difference Capital Financial Inc. invests in and advises growth companies. We leverage our capital market expertise to help unlock value in technology, media and healthcare companies as they approach important milestones in their business lifecycle. Difference Capital Financial Inc.’s common shares and convertible debentures are traded on the Toronto Stock Exchange under the symbols “DCF” and “DCF.DB,” respectively.

Caution Regarding Forward-Looking Statements

Certain statements contained in this press release may be deemed “forward-looking statements.” Forward-looking statements are statements that are not historical facts and are generally, but not always, identified by the words “expects,” “plans,” “anticipates,” “believes,” “intends,” “estimates,” “projects,” “potential,” “scheduled,” and similar expressions, or that events or conditions “will,” “would,” “may,” “could” or “should” occur. Although DCF believes that the expectations reflected in those forward-looking statements are reasonable, no assurance can be given that these expectations will prove to be correct and such forward-looking statements included in this press release should not be unduly relied upon. These statements speak only as of the date of this press release. DCF undertakes no obligation to publicly update or revise any forward looking statements, whether as a result of new information, future events or otherwise, other than as required by applicable law.

Contact InformationHenry Kneis
Chief Executive Officer
(416) 649-5090
http://www.differencecapital.com
 

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