TORONTO, May 15, 2018 – Trez Capital Senior Mortgage Investment Corporation (TSX: TZS) (the "Company") today released its financial results for the quarter ended March 31, 2018. The financial statements and MD&A can be found at www.sedar.com or www.trezcapitalseniormic.com.
Financial Highlights & Business Update
On June 16, 2016 the shareholders of the Company approved the orderly wind-up of the Company (“Orderly Wind-Up”). As such, the financial results reflect the ongoing reduction in the size of the portfolio as capital is returned to shareholders.
Towards the objective of an Orderly Wind-Up, principal repayments or sold mortgages were $7.0 million for the quarter ($6.0 million for the comparable period in 2017). All mortgages that have been sold have been done at par value. During the quarter, the Company paid no return of capital distributions. In addition no shares were repurchased in the quarter.
For the three months ended March 31, 2018 income from operations totaled $0.2 million compared to income from operations of $0.4 million in the same period in 2017. Net income in the period was equal to income from operations. Basic and diluted income per share was $0.02 compared to $0.05 in the same period in 2017. Revenue declined by $0.3 million compared to the same period in 2017. The decrease was attributable to reduced mortgage interest of $0.3 million. This reduction resulted from a gradual decrease in the mortgage portfolio as a result of total cessation in mortgage funding activity as part of the Orderly Wind-Up of the Company.
At March 31, 2018, the Company had two mortgages remaining to be liquidated, down from four as at December 31, 2017. The remaining two mortgages totaling $14.5 million are set to mature post December 31, 2018.
Regular Monthly & Special Distributions
In Quarter 3 of 2017, the Board made a decision to suspend regular monthly distributions until further notice. This decision was premised on a review of the last remaining mortgages and cash requirements. One of the two remaining mortgages is shared with an external senior loan-sharing partner. Given the limited amount of principal and interest payments expected in the future, the company intends to maintain its current cash levels until the senior position is fully repaid by the borrower. The Board anticipates making further special distributions as the two remaining mortgages in the portfolio mature or are sold, subject to reasonable expected operating expenditures and repayment of the senior loan participant.
Forward Looking Statements
Certain statements in this news release about the Company, and its business, operations, investments and strategies, and financial performance and condition may constitute forward-looking information, future oriented financial information, or financial outlooks (collectively, “forward looking statements”). The forward-looking statements are stated as of the date of this news release and are based on estimates and assumptions made by Trez Capital Fund Management LP (“Trez”) in light of its experience and perception of historical trends, current conditions and expected future developments, as well as other factors that Trez believes are appropriate and reasonable in the circumstances. There can be no assurance that such forward-looking statements will prove to be accurate, as actual results, performance and future events could differ materially from those anticipated in such statements. Past performance is not an indication of future returns, and there can be no guarantee that targeted returns or yields can be achieved. Trez refers you to the Company’s public disclosure for information regarding these forward-looking statements, including the assumptions made in preparing forward-looking statements and management’s expectations, and the risk factors that could cause the Company’s actual results, yield, levels of activity, performance or achievements or future events or developments to differ materially from those expressed or implied by the forward-looking statements. Such public disclosure is available on SEDAR and at the request of Trez. This news release does not represent an offer or solicitation to sell securities of the Company.
About the Company
The Company holds a portfolio of mortgages in Canada. Trez Capital Fund Management Limited Partnership is the manager of and portfolio advisor to the Company. On June 16, 2016 the Shareholders of the Company approved the orderly wind-up of the Company. Under the orderly wind-up plan the Company will distribute the net proceeds through special distributions, the repurchase of shares pursuant to the normal course issuer bid, or otherwise.
For further information:
Chief Executive Officer & Chief Financial Officer
Tel: (604) 630-0775