Mr. Bryan Pang reports

SOLUTION FINANCIAL REPORTS Q2 2024 FINANCIAL RESULTS

Solution Financial Inc. today released its financial results for the second quarter ending April 30, 2024.

Earnings highlights for the quarter:

• Revenues were $2.3-million compared with $3.5-million in the comparative quarter.
• Net loss for the quarter was $29,046 compared with net income of $37,826 in the comparative quarter of 2023.
• Adjusted net income decreased to $28,856 compared with $136,707 during the comparative quarter.
• Total leasing portfolio increased 10 per cent to $26.8-million during the quarter.

Operational highlights for the quarter:

• The company's recently introduced local leasing program contributed to lease origination volumes growing 76 per cent over the first quarter of the year (39 per cent over the comparative quarter) to $6.5-million. Lease originations are early indicators of longer-term lease revenue.
• The company completed several enhancements to its proprietary lease quoting system with the goal of providing the fastest, most efficient lease quoting capabilities in the market.

"Our second quarter saw a significant increase in lease originations, driven primarily by the successful rollout of our new local market leasing program," began Bryan Pang, chief executive officer. "Despite the general slowdown in new luxury vehicle sales, our recent debt finance restructuring has empowered us to offer a highly competitive leasing package to our network of dealerships. The tightening credit markets have impacted many competitors, creating an excellent opportunity for us to expand our lease offerings. We're enthusiastic about filling this growing market gap with our unique approach to leasing, which has helped us weather market challenges in the past, including in 2008. Leasing is more than just offering the most competitive pricing; our success lies in balancing customer credit considerations with a keen focus on the resale and remarketing potential of the underlying leased assets. This comprehensive approach derisks our strategy for long-term success under any circumstances, despite having to tighten the belt while market conditions are a bit tougher.

"Additionally, while the high end and luxury markets have faced a slowdown, the ultraluxury market has continued to perform well. The recent reduction in the prime lending rate in Canada is a positive indicator, suggesting that we may have reached the bottom of a challenging market period. We are enthusiastic that the recent increase in volumes, coupled with the stabilization and easing of interest rate pressures, positions Solution Financial back on a path of expansion and profitable growth," concluded Mr. Pang.

Financial results

Solution is reporting a net loss of $29,046 or 0.03 cent, per share for the quarter ending April 30, 2024. This compares with net income of $37,826 or 0.04 cent per share for the quarter ending April 30, 2023.

Adjusted net income, which is more reflective of actual cash earnings, for the quarter ending April 30, 2024, was $28,856 or 0.03 cent per share compared with $136,707 or 0.02 cent per share for the quarter ending April 30, 2023. Adjusted net income excludes the non-cash accretion expense related to the convertible debentures and right of use assets of $35,103, income tax recovery of $10,900, amortization of $24,613, and provisions for credit losses of $9,086.

Lease portfolio

At April 30, 2024, Solution had 316 vehicles in its lease portfolio, a net increase of 19 vehicles over the quarter to bring the total lease portfolio to $26.8-million.

At April 30, 2024, the average remaining lease term for the portfolio was 1.7 years, weighted by net book value for each vehicle. At Jan. 31, 2024, Solutions' 316 leases were generating annualized gross rental and lease cash flows of approximately $7.5-million.

About Solution Financial Inc.

Solution Financial was incorporated in 2004 and specializes in sourcing and leasing luxury and exotic vehicles, yachts and other high-value assets. Solution works with a select group of automotive and marine dealerships providing lending solutions to clients who cannot obtain leasing terms with traditional Canadian financial institutions or other subprime lenders. Typical customers include new immigrants, business owners and international students. Solution Financial provides a unique leasing experience, whereby it partners with its clients to help them navigate the challenges of acquiring, insuring, maintaining and upgrading vehicles and luxury assets more frequently than most leasing companies.

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