Flow Capital Announces Q1 2023 Financial Results

(MENAFN- GlobeNewsWire - Nasdaq) TORONTO, May 26, 2023 (GLOBE NEWSWIRE) -- Flow Capital Corp. (TSXV:FW) (“Flow Capital” and“Company”), a leading provider of flexible growth capital and alternative debt solutions, announces its unaudited financial and operating results for the quarter ending March 31, 2023 (“Q1 2023”). Financial references are in Canadian dollars unless otherwise specified.

Q 1 202 3 Highlights

• Royalty and Loan revenue of $1.69 million, down 4.2% year over year.
• Recurring Revenue1 of $1.51 million in Q1, up 5.6% quarter over quarter.
• Adjusted Recurring Free Cash Flow2 of approx. $299,000 in Q1; and $964,000 over the past four-quarters.
• Total assets of approximately $59.2 million compared to $46.8 million at Q1 2022.
• Cash of over $10 million compared to $4.6 million at Q1 2022.
• Book Value of $1.23 per share; up 50% over the past four-quarters.

“While our revenues were down slightly year over year, they were in line with our expectations. Slower than expected capital deployment combined with several early repayments has led to flat revenue growth.” said Alex Baluta, CEO of Flow Capital.“However, our balance sheet remains very strong with over $10M in cash, and we continue to generate positive cash flow from recurring operations”.

Flow Capital continues to focus its efforts on originating and investing in high growth companies looking to fuel expansion without the excessive and expensive dilution of equity, or restrictive covenants of conventional debt. With over thirty million small and medium sized business in the United States and Canada, and tens of millions of others in Flow Capital's addressable geographies and sectors, there is a large market of potential investment opportunities.

“In spite of the slow capital deployment, we continue to see a very strong pipeline in terms of quality of opportunities. The equity market volatility is generating a marked increase in demand for the type of creative and flexible capital provided by Flow. In fact, our qualified deal pipeline was at record levels in Q1 and we expect that several of the deals already in late stage due diligence, should close over the coming weeks”, said Alex Baluta, CEO of Flow Capital.

RESULTS OF OPERATIONS

			Three-months ended March 31 , 202 3	Three-months ended March 31 , 202 2
Recurring Royalty and Loan Revenue(1)			$	1,509,437	$	1,645,282
Royalty and Loan Revenue			$	1,691,481	$	1,765,374
Total Revenues per IFRS			$	1,747,126	$	3,868,286
Net income			$	345,450	$	2,349,942
Adjusted Recurring Free Cash Flow			$	298,756	$	518,826
Basic Earnings per share				0.0111		0.0752
Diluted Earnings per share				0.0105		0.0744
Book Value per outstanding share(2)			$	1.2335	$	0.8235
Weighted basic average number of shares outstanding				31,204,227		31,240,077
Weighted diluted average number of shares outstanding				32,766,042		31,602,332

(1) Excludes loan amortization revenue and one time payments.
(2) Calculated by taking Total Shareholders' Equity as reported on the Statements of Financial Position over the number of outstanding shares.

Detailed Financial results are available on our website at or on .

Revenues

Total revenue for the three-month period ended March 31, 2023, was $1,747,126 compared to $3,868,286 in the three-month period ended March 31, 2022. Loan interest and royalty payment income for the three-month period ended March 31, 2023, was $1,691,481 representing a 4.2 % decrease from the $1,765,374, earned in the three-month period ended March 31, 2022.

Of the $1,691,481 loan interest and royalty payment income earned during the three-month period ended March 31, 2023, $103,666 was contributed by interest earned from new investments acquired in the last twelve months, $1,422,673 from loan interest and royalty payment income from the existing portfolio, and $165,142 on account of loan amortization adjustments.

Income from changes in value of financial assets for the three-month period ended March 31, 2023, was $(19,089) compared to $2,100,805 for the three-month period ended March 31, 2022.

Operating Expense

Total operating expenses for the three-month period ended March 31, 2023, were $807,073 (2022 - $760,289). The increase is primarily due to higher professional fees compared to the previous corresponding periods.

Profit After Taxes

Profit after taxes for the three-month period ended March 31, 2023, were $ 345,450 (2022 - $2,349,942). The movements in the profit after taxes was primarily on account of stable loan interest and royalty payment income and favourable foreign exchange impacts, offset by fewer buyouts, fair value movements, and marginally higher operating costs, compared to the corresponding periods in the previous year.

Assets

	As at March 31 , 202 3	As at December 3 1 , 202 2
Cash and Cash Equivalents	$	10,045,381	$	9,560,610
Investments	$	40,968,160	$	40,809,400
Total assets	$	59,162,658	$	58,682,422

Portfolio Update

	Three-months ended March 31 , 202 3	Three-months ended March 31 , 202 2
Number of active company investments		15		16
Number of new company investments in period		-		-
Total capital deployed during the period	$	-	$	680,768
Carrying value of investments, at the end of period	$	40,968,160	$	41,868,722

Conference Call Details

Flow Capital will host a conference call to discuss these results at 9:00 a.m. Eastern Time, on Monday, May 29, 2023. Participants should call +1 (888) 886-7786 or +1 (416) 764-8658 and ask an operator for the Flow Capital earnings call, Conference ID 16372857. Please dial in 10 minutes prior to the call to secure a line. A replay will be available shortly after the call. To access the replay, please dial +1 (416) 764-8692 or +1 (877) 674-7070 and enter passcode 372857#. The replay recording will be available until 11:59 p.m. Eastern Time, June 12, 2023.

An audio recording of the conference call will be also available on the investors' page of Flow Capital's website at .

About Flow Capital

Flow Capital Corp. is a diversified alternative asset investor and advisor, specializing in providing minimally dilutive capital to emerging growth businesses. To apply for financing, visit .

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