TORONTO, CANADA – May 14, 2014 – Difference Capital Financial Inc. (“DCF”) (TSX:DCF) (TSX:DCF.DB), today reported its financial results for the quarter ended March 31, 2014.
* reflected post 10 for 1 share consolidation
Q1 2014 Operational Highlights
- The Company’s investment and marketable securities portfolios increased to $152.7million from $140.9 million at December 31, 2013.
- Unrealized gain on investments in marketable securities of $1.2 million was driven by appreciation of investments such as SHOP.CA
- Recorded a realized gain of $2.7 million on the conversion of Enterprise Group Inc. debentures and sale of common shares during the quarter.
- Continued to build portfolio of growth oriented private and special situation public companies with a new US$1.0 million investment in Cardiac Dimension Pty Ltd. subsequent to quarter end as well as extending its holding in Benev Capital Inc.
“Within the quarter our team made excellent progress executing on our stated goal; strategically deploying our capital in the form of quality investments which have made a positive impact on our portfolio of assets.” said Michael Wekerle, CEO of Difference Capital. “While in recent weeks the public markets may have taken a pause, the core fundamentals of our investment thesis remains solidly intact, as proven in the positive growth in our current quarter results.”
First Quarter Financial Results
Net income for the quarter ended March 31, 2014 was $2.9 million, or $0.07 per share compared to a net income of $0.9 million, or $0.03 per share for the quarter ended March 31, 2013 and a net loss of $20.2 million, or $0.52 per share for the quarter ended December 31, 2013.
The Company realized a $3.1 million gain on dispositions of investments and marketable securities during the quarter ended March 31, 2014 compared with $1.5 million in realized gain in the first quarter of 2013 and a realized loss of $0.7 million in the last quarter of 2013. The realized gain during the quarter was primarily attributed to a $2.7 million gain on the conversion of Enterprise Group Inc. debentures and subsequent disposition of its common shares.
The Company recorded $1.2 million of net change in unrealized appreciation on investments and marketable securities during the first quarter of 2014, compared to a net change in unrealized depreciation of $0.6 million in the first quarter of 2013. The unrealized appreciation during the quarter was primarily due to an appreciation of investment in SHOP.CA of $1.2 million as well as unrealized foreign exchange gain on foreign investments of $1.3 million.
Other income for the quarter ended March 31, 2014 increased to $2.0 million compared to $1.1 million during the same period in 2013. Included in other income were interest and dividend income from the investment portfolio totaling $1.7 million, up from $0.8 million in the same period of 2013. Also included in other income was the 40% revenue participation in Difference Capital Management’s advisory revenue business of $0.3 million, compared to $0.3 million in the first quarter of 2013.
Total expenses during the quarter ended March 31, 2014 were $3.3 million compared $1.1 million for the quarter ended March 31, 2013 and $3.8 million for the quarter ended December 31, 2013. The year over year increase in total expenses was primarily due to increased management fees from higher Net Asset Value ($0.8 million compared to $0.4 million in 2013), and financing costs associated with the issuance of convertible debentures in July 2013 ($1.4 million compared to nil in the first quarter of 2013).
Please refer to the section regarding forward-looking statements which form an integral part of this release. These results, along with the audited financial statements and the company’s MD&A, are available on the company’s website at http://www.differencecapital.com and on SEDAR at http://www.sedar.com.
DCF will host a conference call Thursday, May 15, 2014, at 9:00 AM ET to discuss its results. Michael Wekerle, CEO, Neil Johnson, President and Henry Kneis, CFO will host the call. All interested parties can join the call by dialling (647) 427-7450 or (888) 231-8191. Please dial in 5-10 minutes prior to the call to secure a line. A live audio webcast of the conference call will also be available at http://www.differencecapital.com. Please connect at least 15 minutes prior to the conference call to ensure adequate time for any software download that may be required to join the webcast.
About Difference Capital Financial Inc.
Difference Capital Financial Inc. invests in and advises growth companies. We leverage our capital market expertise to help unlock the value in technology, media and healthcare companies as they approach important milestones in their business lifecycle. Difference Capital Financial Inc. is traded under the Toronto Stock Exchange under the symbol “DCF”.
Caution Regarding Forward-Looking Statements
Included in this press release are matters that constitute “forward-looking” information. Such forward-looking statements may be identified by words such as “plans”, “proposes”, “estimates”, “intends”, “expects”, “believes”, “may” or words of a similar nature. There can be no assurance that such statements will prove to be accurate. Actual results and future events could differ materially from such statements. Factors that could cause actual results to differ materially include among others, equity market regulatory risks, risk inherent in foreign operations and competition. These factors are largely outside the control of the Company. All subsequent forward-looking statements attributable to the Company or its agents are expressly qualified in their entirety by these cautionary comments. The Company expressly disclaims any intent or obligation to update publicly forward-looking information, whether as a result of new information, future events or otherwise.
Difference Capital Financial Inc.:
416 649 5088
(416) 815-0700 ext. 253