In a media release on 5.12.2022 at 4:20 PM ET, Toronto, Canada based ECN Capital Corp – parent company to Florida based Triad Financial Services – provided the following financial performance results. Additional information with MHProNews analysis and commentary in brief follows.
ECN Capital Reports US$0.06 in Adjusted Net Income per Common Share in Q1-2022
TORONTO, May 12, 2022 (GLOBE NEWSWIRE) — ECN Capital Corp. (TSX: ECN) (“ECN Capital” or the “Company”) today reported financial results for the three-month period ended March 31, 2022.
For the three-month period ended March 31, 2022, ECN Capital reported Adjusted net income applicable to common shareholders from continuing operations of $14.3 million or $0.06 per share (basic) versus $13.8 million or $0.06 per share (basic) for the previous three-month period and $4.7 million or $0.02 per share (basic) for the same period last year.
“I am extremely pleased with the growth and resilience of our businesses in Q1”, said Steven Hudson, CEO of ECN Capital Corp. “Triad, Source One and KG together produced ahead of plan results driving adjusted operating earnings of $0.06, ahead of our guidance from investor day of $0.04 – $0.05 and putting us well on track to meet or exceed our full year 2022 guidance. I want to congratulate all our team members for producing fantastic results.”
Mr. Hudson continued, “ECN’s businesses are well positioned in this environment to continue to deliver results. Triad is the leader in affordable housing financing solutions, with manufactured housing relative affordability only improving, we expect demand to continue to be robust. Source One has demonstrated tremendous momentum thus far and combined with ECN’s expansion plans driving incremental opportunity is in great shape for continued operating and credit outperformance. KG is well positioned in the market with new products like CCIM continuing to drive growth in 2022. Finally, our portfolio credit performance remains strong making us a partner of choice for our funding partners”
Originations for the three-month period ended March 31, 2022 were $398.0 million including $111.3 million of originations at Source One, versus $299.6 million in the previous three-month period and $182.2 million for the same period last year.
Total Earning Assets Managed and Advisory as at March 31, 2022 were $31.3 billion versus $31.3 billion as at December 31, 2021 and $29.7 billion at March 31, 2021.
Adjusted EBITDA for the three-month period ended March 31, 2022 was $27.5 million versus $28.8 million for the previous three-month period and $16.0 million for the same period last year.
Operating Expenses for the three-month period ended March 31, 2022 were $32.4 million versus $40.7 million for the previous three-month period and $26.6 million for the same period last year.
Net Income attributable to common shareholders for the three-month period ended March 31, 2022 was $4.3 million versus $913.3 million for the previous three-month period and $5.9 million for the same period last year.
Dividends Declared
The Company’s Board of Directors has authorized and declared a quarterly dividend of $0.01 per outstanding common share to be paid on June 30, 2022 to shareholders of record at the close of business on June 15, 2022. These dividends are designated to be eligible dividends for purposes of section 89(1) of the Income Tax Act (Canada).
The Company’s Board of Directors has authorized and declared a quarterly dividend of $0.390625 per outstanding Cumulative 5-Year Rate Reset Preferred Share, Series C (TSX: ECN.PR.C) to be paid on June 30, 2022 to shareholders of record on the close of business on June 15, 2022. These dividends are designated to be eligible dividends for purposes of section 89(1) of the Income Tax Act (Canada).
Webcast
The Company will host its analyst briefing to discuss these results commencing at 5:30 PM (ET) on Thursday, May 12, 2022. … ##
ECN Capital (TSE:ECN) shareholders are still up 321% over 5 years despite pulling back 9.3% in the past week
When we invest, we’re generally looking for stocks that outperform the market average. And in our experience, buying the right stocks can give your wealth a significant boost. For example, the ECN Capital Corp. (TSE:ECN) share price is up 51% in the last 5 years, clearly besting the market return of around 29% (ignoring dividends). On the other hand, the more recent gains haven’t been so impressive, with shareholders gaining just 76% , including dividends .
While the stock has fallen 9.3% this week, it’s worth focusing on the longer term and seeing if the stocks historical returns have been driven by the underlying fundamentals.
Given that ECN Capital didn’t make a profit in the last twelve months, we’ll focus on revenue growth to form a quick view of its business development. Shareholders of unprofitable companies usually expect strong revenue growth. As you can imagine, fast revenue growth, when maintained, often leads to fast profit growth.
For the last half decade, ECN Capital can boast revenue growth at a rate of 26% per year. That’s well above most pre-profit companies. It’s good to see that the stock has 9%, but not entirely surprising given revenue shows strong growth. If you think there could be more growth to come, now might be the time to take a close look at ECN Capital. Opportunity lies where the market hasn’t fully priced growth in the underlying business.
The image below shows how earnings and revenue have tracked over time (if you click on the image you can see greater detail).
It’s probably worth noting we’ve seen significant insider buying in the last quarter, which we consider a positive. On the other hand, we think the revenue and earnings trends are much more meaningful measures of the business. If you are thinking of buying or selling ECN Capital stock, you should check out this freereport showing analyst profit forecasts.
What About Dividends?
As well as measuring the share price return, investors should also consider the total shareholder return (TSR). The TSR is a return calculation that accounts for the value of cash dividends (assuming that any dividend received was reinvested) and the calculated value of any discounted capital raisings and spin-offs. It’s fair to say that the TSR gives a more complete picture for stocks that pay a dividend. We note that for ECN Capital the TSR over the last 5 years was 321%, which is better than the share price return mentioned above. And there’s no prize for guessing that the dividend payments largely explain the divergence!
A Different Perspective
It’s nice to see that ECN Capital shareholders have received a total shareholder return of 76% over the last year. And that does include the dividend. That gain is better than the annual TSR over five years, which is 33%. Therefore it seems like sentiment around the company has been positive lately. In the best case scenario, this may hint at some real business momentum, implying that now could be a great time to delve deeper. It’s always interesting to track share price performance over the longer term. … ##
Additional Information, MHProNews Analysis and Commentary in Brief
When MHProNews editorially observes that the Manufactured Housing Institute (MHI) and several of MHI’s state association affiliates include ‘white hat’ members, a reasonable case can be made that Triad Financial Services (TFS), subsidiary of ECN Capital, is among those ‘white hat’ brands. That doesn’t mean that questions should be pressed – such as why Triad has not yet pressed to create a pro-growth, pro-consumer post-production alternative to problem-plagued MHI.
That said, Triad during the Don Glisson Jr. era at MHI clearly seemed to want to bridge the gap between MHI and the Manufactured Housing Association for Regulatory Reform (MHARR). Glisson gave blogger George F. Allen a break at a time when Allen was arguably persona non grata among several MHI staffers. The backlash that occurred reportedly contributed to Glisson walking away from his chairman’s role at the time at MHI. Nathan Smith magically stepped into the role, and the rest is history.
Glisson and Triad have reportedly made several efforts to get, for example, the Duty to Serve (DTS) program with the Government Sponsored Enterprises (GSEs) of Fannie Mae and Freddie Mac into practical motion. That arguably cuts against the apparent Berkshire Hathaway interests in keeping DTS from occurring at all, or if it does ever happen as Congress envisioned, that it would be kept marginal and largely irrelevant at best.
The flashback videos that follow illustrate how Glisson-led Triad promoted the broader industry’s interests, which included those of scores of independent retailers, communities, and producers.
Part 1
Part 2
Part 3
Where Triad goes in the days ahead under the ECN umbrella with respect to manufactured housing industry politics is unclear. But what is far more obvious in hindsight – as these videos reflect – is that Triad has been a ‘team player’ for the industry at large, and in some sense, with manufactured housing industry independents and consumers in particular. For more on flashback interviews with Don Glisson Jr that recalls significant facts on how manufactured housing arrived at this point in time, click here. ##
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Our son has grown quite a bit since this 12.2019 photo. All on Capitol Hill were welcoming and interested in our manufactured housing industry related concerns. But Congressman Al Green’s office was tremendous in their hospitality. Our son’s hand is on a package that included the Constitution of the United States, bottled water, and other goodies.
Tony earned a journalism scholarship and earned numerous awards in history and in manufactured housing.
For example, he earned the prestigious Lottinville Award in history from the University of Oklahoma, where he studied history and business management. He’s a managing member and co-founder of LifeStyle Factory Homes, LLC, the parent company to MHProNews, and MHLivingNews.com.
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