NOT FOR DISSEMINATION IN THE UNITED STATES OR DISTRIBUTION TO U.S. NEWS WIRE SERVICESTORONTO, Aug. 06, 2020 (GLOBE NEWSWIRE) — FAX Capital Corp. (FAX Capital or the Company) (TSX: FXC and FXC.WT) today announced its results for the second quarter of 2020.
Operating Highlights:Deployed $27.8 million of capital during the quarter into four public company investments: $4.9 million into Hamilton Thorne Ltd. (TSXV:HTL), $7.2 million into Information Services Corp. (TSX:ISV), $2.0 million into Points International Ltd. (TSX:PTS) (Nasdaq:PCOM) and $13.7 million into People Corporation (TSXV:PEO), a new investment initiated in the quarter.Book value of $4.25 per subordinate voting share and multiple voting share (collectively, the shares), an increase of 2.9% from March 31, 2020, with performance driven by unrealized gains recognized on each of its public company investments.Held a cash balance at the end of the quarter available to be invested of $122.9 million, or $2.86 per share.“While COVID-19 has had a severe impact on the economy, during this time of uncertainty FAX remains in strong financial health with undeployed cash of approximately $123 million,” said Blair Driscoll, the Company’s Chief Executive Officer. “In March and April, following the steep equity market declines, we took advantage of increased market volatility to aggressively accumulate positions and execute new portfolio investments at attractive prices. The pace of investments has slowed since May due to the V-shaped market recovery, as we remain disciplined in our approach to capital allocation. We continue to assess a significant pipeline of potential public and private investments, and will remain patient in capturing the investment opportunities that will undoubtedly arise as a result of this pandemic.” Results for the Three and Six Months Ended June 30, 2020The Company’s book value per share increased 2.9% from $4.13 per share at March 31, 2020 to $4.25 per share as at June 30, 2020. The 2.9% increase is primarily attributed to the Company incurring an unrealized gain on its investments of $5.6 million in the three months ended June 30, 2020. Net income for the quarter ended June 30, 2020 was $5.1 million, compared to a net loss of $692.1 thousand in the quarter ended June 30, 2019.The Company’s book value per share decreased 2.1% from $4.34 per share at December 31, 2019 to $4.25 per share as at June 30, 2020. The 2.1% decrease is primarily attributed to the Company incurring an unrealized loss on its investments of $3.5 million in the six months ended June 30, 2020, driven by the sharp decline in equity markets in March, 2020. The company’s outperformance in the period relative to the overall Canadian equity markets is largely attributed to the significant portion of the Company’s investable assets held in cash during this period.Net loss for the six months ended June 30, 2020 was $4.1 million, compared to a net loss of $749.0 thousand in the comparative period last year.Additional commentary on FAX Capital’s investment activity can be found in the Company’s Management’s Discussion & Analysis for the quarter year ended June 30, 2020, available under the Company’s profile at www.sedar.com and on the Company’s website at www.faxcapitalcorp.com.Other Information Further information about FAX Capital, including FAX Capital’s Condensed Interim Financial Statements and Management’s Discussion & Analysis for the six months ended June 30, 2020, is available under the Company’s profile at www.sedar.com and www.faxcapitalcorp.com. Supplemental materials in respect of the Company’s second quarter 2020 can be accessed on the Company’s website.About FAX Capital Corp.The Company is an investment holding company with a business objective to maximize its intrinsic value on a per share basis over the long-term by seeking to achieve superior investment performance commensurate with reasonable risk. The Company intends to invest in equity, debt and/or hybrid securities of high-quality businesses. The Company initially intends to invest in approximately 10 to 15 high-quality small cap public and private businesses located primarily in Canada and, to a lesser extent, the United States.For additional information please contact:Investor Relations
Sophia Tang, Investor Relations
Telephone: (416) 860-6108
Email: IR@faxcapitalcorp.com
Website: www.faxcapitalcorp.comMedia Relations
Tim Foran
Telephone: (416) 986-8515
Email: tim.foran@loderockadvisors.comCautionary Statement Regarding Use of Non-IFRS Accounting MeasuresThis press release makes reference to the Company’s book value per share as a measure of the performance of the Company as a whole. Book value per share is measured by dividing shareholders’ equity of the Company at the date of the statement of financial position by the number of common shares outstanding at that date. The Company’s method of determining this amount may differ from other companies’ methods and, accordingly, this amount may not be comparable to measures used by other companies. This amount is not a performance measure as defined under International Financial Reporting Standards (IFRS) and should not be considered either in isolation of, or as a substitute for, net earnings prepared in accordance with IFRS.Cautionary Note Regarding Forward-Looking InformationThis press release contains forward-looking information. Such forward-looking information or statements (FLS) are provided for the purpose of providing information about management’s current expectations and plans relating to the future. Readers are cautioned that reliance on such information may not be appropriate for other purposes. Any such FLS may be identified by words such as “proposed”, “expects”, “intends”, “may”, “will”, and similar expressions. FLS contained or referred to in this press release includes, but is not limited to, the future or expected performance of the Company’s portfolio companies; the Company’s continuing investment thesis in respect of such portfolio companies; the Company’s investment approach, objectives and strategy, including investment selection and pace of continued investment; the structuring of its investments and its plans to manage its investments; and the Company’s financial performance.FLS involves known and unknown risks, uncertainties and other factors that may cause actual results or events to differ materially from those anticipated in such forward-looking information. The Company believes that the expectations reflected in the FLS are reasonable but no assurance can be given that these expectations will prove to be correct. Some of the risks and other factors which could cause results to differ materially from those expressed in FLS contained in this press release include, but are not limited to: the continued impact of COVID-19 on targeted investments, the economy and markets generally, reliance on the performance of underlying assets; key employees; potential lack of investment diversification; trading price of the Subordinate Voting Shares and Founder Warrants relative to book value; significant ownership by Fax Investments Inc. may adversely affect the market price of the Subordinate Voting Shares; investments in private issuers; illiquid assets; financial market fluctuations and deterioration of political conditions; foreign security risk; competition and technology risks; credit risk; tax risks; regulatory changes; and other risks and factors referenced in this press release including under “Risk and Uncertainties”. Additional risks and uncertainties are described in the Company’s annual information form which is available on SEDAR at www.sedar.com and on the Company’s website at www.faxcapitalcorp.com.Any FLS speaks only as of the date on which it is made and, except as may be required by applicable securities laws, the Company disclaims any intent or obligation to update any FLS, whether as a result of new information, future events or results or otherwise. The FLS contained in this press release are expressly qualified by this cautionary statement. For more information on the Company, please review the Company’s continuous disclosure filings that are available at www.sedar.com.No securities regulatory authority has either approved or disapproved of the contents of this news release. The Toronto Stock Exchange accepts no responsibility for the adequacy or accuracy of this release.
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