Cervus Financial Group Inc. Announces Financial Results for the Year Ended September 30, 2005.TORONTO Toronto (tərŏn`tō), city (1998 est pop. 2,400,000), provincial capital, S Ont., Canada, on Lake Ontario. Toronto is the largest city in Canada and since the 1970s has been one of the fastest-changing cities in North America, experiencing -- "Mortgage Assets increased to $645 million" Cervus Cervus a genus of true deer in the family Cervidae. Includes C. canadensis (wapiti), C. elaphus (red deer) and C. elaphus nannodes (tule elk). Financial Group Inc. ("Cervus"), (TSX TSX Toronto Stock Exchange (TSE before April, 2002) TSX Transfer from Stack Pointer to Index TSX True Space Extension :CFG CFG Configuration (File Name Extension) CFG Control Flow Graph CFG Context-Free Grammar CFG Club for Growth CFG Cienfuegos, Cuba (city/airport code) CFG Critical Friends Groups ), is a financial services The examples and perspective in this article or section may not represent a worldwide view of the subject. Please [ improve this article] or discuss the issue on the talk page. company dedicated to providing mortgages to selected mortgage broker firms. The Company is pleased announce results of operations for the year ended September September: see month. 30, 2005 with revenues of $8.4 million and residential mortgage originations of $654.2 million. Total Administered Assets increased to $645 million. Highlights for the year ended September 30, 2005: - Increased Total Administered Assets to $645 million compared to $2 million as at September 30, 2004. - The Company has future mortgage commitments of $218.1 million, compared to $11.3 million at September 30, 2004. - Completed whole loan sales, totalling $648.8 million, to Canadian Canadian (kənā`dēən), river, 906 mi (1,458 km) long, rising in NE New Mexico. and flowing E across N Texas and central Oklahoma into the Arkansas River in E Oklahoma. financial institutions under existing sales and servicing agreements compared to nil in the previous year. - The Company completed the sale of mortgages into a securitization Securitization The process of creating a financial instrument by combining other financial assets and then marketing them to investors. Notes: Mortgage backed securities are a perfect example of securitization. May also be spelled as "securitisation. conduit conduit /con·du·it/ (kon´doo-it) channel. ileal conduit the surgical anastomosis of the ureters to one end of a detached segment of ileum, the other end being used to form a stoma on the channel. - The Company launched an automated au·to·mate v. au·to·mat·ed, au·to·mat·ing, au·to·mates v.tr. 1. To convert to automatic operation: automate a factory. 2. mortgage approval system, with a fully insured mortgage commitment issued in under three minutes "Three Minutes" is the 46th episode of Lost. It is the twenty-second episode of the second season. The episode was directed by Stephen Williams, and written by Edward Kitsis and Adam Horowitz. It first aired on May 17, 2006 on ABC. from submission of the mortgage application by the mortgage professional. - Commenced trading on the Toronto Stock Exchange Toronto Stock Exchange (TSE) Canada's largest stock exchange, trading approximately 1,200 company stocks and 33 options. on Monday Monday: see week. April 11, 2005 under the trading symbol Trading symbol See: Ticker symbol "CFG". - Launched a multi-tiered mortgage partners program and further penetrated the mortgage broker market. Cervus delayed the release of the annual financial statement statements while it determined the appropriate treatment of whole loan sales completed during the year. The Company has concluded its determination that the sales can be recorded as true sales as at September 30, 2005. However, as part of this determination, the Company determined that it is necessary to restate re·state tr.v. re·stat·ed, re·stat·ing, re·states To state again or in a new form. See Synonyms at repeat. re·state previously filed quarterly financial statements as sales to a counterparty Counterparty The other participant, including intermediaries, in a swap or contract. did not comply with the evidential ev·i·den·tial adj. Law Of, providing, or constituting evidence: evidential material. ev documentation requirements of the accounting rules. The effect on the loss for the prior quarters in question is not significant, but the principle is important. The prior quarter's restatements will not affect the results of the annual financial statements.
Cervus Financial Group Inc.
Consolidated Balance Sheets
September 30, 2005
September September
30, 2005 30, 2004
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ASSETS
CURRENT
Cash $ 3,890,362 $ 2,296,206
Restricted cash (Note 9) 1,500,000 2,500,000
Residential mortgages (Note 8) 4,448,436 2,085,867
Accounts receivable 1,866,587 -
Sales tax receivable 30,524 -
Prepaid expenses 385,544 364,188
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12,121,453 7,246,261
OTHER ASSETS 444,363 22,019
SECURITIZATION - RETAINED INTEREST
(Note 7) 553,139 -
CAPITAL ASSETS (Note 18) 2,863,254 1,037,356
INTANGIBLE ASSETS (Note 6) 3,557,976 3,461,133
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$ 19,540,185 $ 11,766,769
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LIABILITIES
CURRENT
Accounts payable and accrued expenses $ 8,655,126 $ 1,353,807
Sales tax payable 39,606 134,443
Warehouse credit facility
(Note 3, 9 and 19(b)) - 2,450,000
Other liabilities 48,490 -
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8,743,222 3,938,250
TRAILER COMMISSIONS 1,401,161 6,351
FUTURE SERVICING LIABILITY (Note 7) 48,960 -
LEASE INDUCEMENT 177,540 -
LEASE OBLIGATIONS 7,376 -
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10,378,259 3,944,601
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SHAREHOLDERS' EQUITY
COMMON SHARES (Note 11) 19,574,420 9,993,955
CONTRIBUTED SURPLUS (Note 11) 1,034,635 301,163
DEFICIT (11,447,129) (2,472,950)
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9,161,926 7,822,168
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$ 19,540,185 $ 11,766,769
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Cervus Financial Group Inc.
Consolidated Statements of
Operations and Deficit
September 30, 2005
For the period
For the Year from January 16,
ended 2004 to
September September
30, 2005 30, 2004
INTEREST INCOME (Note 4) $ 3,628,412 $ 28,480
INTEREST EXPENSE (Note 4) (3,164,276) (957)
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NET INTEREST INCOME 464,136 27,523
GAIN ON SALE OF LOANS (Note 4) 7,406,884 -
FEES AND OTHER INCOME 521,239 -
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8,392,259 27,523
BROKER COMMISSIONS (6,704,281) -
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1,687,978 27,523
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OPERATING EXPENSES
Human resources 4,913,531 1,617,842
Business processing 1,703,493 246,807
Selling, general and administration 1,746,295 441,772
Governance and public markets 1,328,418 923,661
Premises 348,469 113,728
Amortization 784,130 20,562
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10,824,336 3,364,372
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LOSS BEFORE INCOME TAXES 9,136,358 3,336,849
Future income tax benefit (Note 14) (162,179) (1,100,739)
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NET LOSS FOR THE PERIOD $ 8,974,179 $ 2,236,110
DEFICIT - BEGINNING OF PERIOD 2,472,950 -
NET LIABILITIES ACQUIRED (Note 5) - 236,840
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DEFICIT - END OF PERIOD $ 11,447,129 $ 2,472,950
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- -
NET LOSS PER COMMON SHARE
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Basic and diluted (Note 11(f)) $ 0.22 $ 0.11
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Cervus Financial Group Inc.
Consolidated Statements of Cash Flows
September 30, 2005
For the period
For the Year from January 16,
ended 2004 to
September September
30, 2005 30, 2004
NET INFLOW (OUTFLOW) OF CASH RELATED
TO THE FOLLOWING ACTIVITIES
OPERATING
Net loss for the period $ (8,974,179) $ (2,236,110)
Items not affecting cash
Amortization of capital assets 405,371 20,562
Amortization of intangibles 378,759 -
Provision for servicing liability - 115
Future income tax benefit (162,179) (1,100,739)
Stock option expense 212,280 -
Lease inducement (24,939) -
Loan securitizations -
gain on sale of loans (54,179) -
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(8,219,066) (3,316,172)
Net changes in non-cash working
capital balance
Prepaid expenses (21,356) (312,166)
Residential mortgages (2,362,569) (2,085,867)
Accounts receivable (1,866,587) -
Other assets (422,344) (22,019)
Accounts payable and accrued expenses 7,559,319 1,064,830
Sales tax payable (125,361) 134,443
Proceeds from credit
facility borrowings (2,450,000) 2,450,000
Trailer commissions 1,394,810 6,351
Securitization - retained interest (450,000) -
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(6,963,154) (2,080,600)
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INVESTING
Lease inducement 245,160 -
Cash collateral - restricted cash 1,000,000 (2,500,000)
Acquisition of capital assets (2,214,757) (1,057,918)
Acquisition of intangible assets (26,600) (413,684)
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(996,197) (3,971,602)
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FINANCING
Proceeds from issuance of
common shares 10,000,000 9,108,508
Proceeds from exercise of
common share warrants 330,000 -
Common share issue costs (773,166) (760,100)
Repayment of obligations
under capital leases (3,327) -
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9,553,507 8,348,408
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NET INCREASE (DECREASE) IN CASH
FOR THE PERIOD 1,594,156 2,296,206
CASH, BEGINNING OF PERIOD 2,296,206 -
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CASH, END OF PERIOD $ 3,890,362 $ 2,296,206
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$ -
CASH IS REPRESENTED BY:
Cash in bank $ 3,890,362 $ 2,028,479
Cash held in trust - 267,727
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$ 3,890,362 $ 2,296,206
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Please see www.sedar.com for the following information: the
accompanying notes which are integral to these consolidated
financial statements, and Management's Discussion & Analysis.
About "Customer for Life" The Cervus "Customer for Life" model enables the mortgage professional to retain the relationship with the borrower as a customer throughout the life of the mortgage. The compensation model also creates a continued revenue stream in the form of trailer fees Trailer Fee A fee that a mutual fund manager pays to a salesperson who sells the fund to investors. Notes: The trailer fee pays the salesperson for providing the investor with ongoing investment advice and services. , a one time origination fee A charge imposed by a lending institution or a bank for the service of processing a loan. For example, a bank might charge an individual who has applied for a student loan an origination fee of one percent for processing the application and granting the loan. and a renewal fee every time the customer renews with Cervus. This creates income security for the mortgage professional allowing a long-term Long-term Three or more years. In the context of accounting, more than 1 year. long-term 1. Of or relating to a gain or loss in the value of a security that has been held over a specific length of time. Compare short-term. relationship to be developed with the borrower. This long-term relationship subsequently gets passed along to the institutional investor Institutional Investor A non-bank person or organization that trades securities in large enough share quantities or dollar amounts that they qualify for preferential treatment and lower commissions. of the mortgage security, creating a higher yield long-term investment cash flow stream. The Cervus "Customer for Life" model creates profitable relationships for the borrowers, mortgage professionals, institutional investors and for Cervus. About Cervus Cervus Financial Group Inc. is a Canadian financial services company created as an industry initiative with leading mortgage broker companies and fixed income investment banks The following is a list of investment banks Financial conglomerates Large financial-services conglomerates combine commercial banking and investment banking, and sometimes insurance. to become a high-yield Adj. 1. high-yield - yielding a large amount of agricultural or industrial production fruitful - productive or conducive to producing in abundance; "be fruitful and multiply" residential mortgage producer and the largest mortgage broker lender of conventional insured and insurable in·sure v. in·sured, in·sur·ing, in·sures v.tr. 1. a. To provide or arrange insurance for: a company that insures homeowners and businesses. b. mortgages in Canada Canada (kăn`ədə), independent nation (2001 pop. 30,007,094), 3,851,787 sq mi (9,976,128 sq km), N North America. Canada occupies all of North America N of the United States (and E of Alaska) except for Greenland and the French islands of . Our new and innovative business model demonstrates contracted asset accumulation of $22.5 billion in mortgages over five to seven years by fusing In electrophotography, making the toner adhere permanently to the paper. Heat fusing melts the toner, which is pressed into the paper. Cold fusing presses the toner into the paper without applying any heat. Flash fusing melts the toner with light, and no heat or pressure is used. industry ownership, technology, service delivery and long term recurring re·cur intr.v. re·curred, re·cur·ring, re·curs 1. To happen, come up, or show up again or repeatedly. 2. To return to one's attention or memory. 3. To return in thought or discourse. revenue for the mortgage brokers. Cervus works on the basis of a "Customer for Life" model, where the borrower is the client of the mortgage broker and Cervus is effectively the "Back Office - Servicer" between borrowers and investors. Cervus has assembled as·sem·ble v. as·sem·bled, as·sem·bling, as·sem·bles v.tr. 1. To bring or call together into a group or whole: assembled the jury. 2. an experienced management team and board of directors who are knowledgeable in banking, financial services and related businesses. Cervus is focused on funding and servicing insurable conventional and high ratio insured residential mortgages originated through mortgage brokers. Cervus is currently licensed under Ontario Ontario, city, United States Ontario, city (1990 pop. 133,179), San Bernardino co., S Calif., near Los Angeles, in a region of vineyards; inc. 1891. , Quebec Quebec, city, Canada Quebec, Fr. Québec, city (1991 pop. 167,517), provincial capital, S Que., Canada, at the confluence of the St. Lawrence and St. Charles rivers. , British Columbia British Columbia, province (2001 pop. 3,907,738), 366,255 sq mi (948,600 sq km), including 6,976 sq mi (18,068 sq km) of water surface, W Canada. Geography and Alberta Alberta (ălbûr`tə), province (2001 pop. 2,974,807), 255,285 sq mi (661,188 sq km), including 6,485 sq mi (16,796 sq km) of water surface, W Canada. mortgage broker/lender legislation and is seeking similar regulatory approvals in other Canadian Provinces Noun 1. Canadian province - Canada is divided into 12 provinces for administrative purposes province, state - the territory occupied by one of the constituent administrative districts of a nation; "his state is in the deep south" as required. Cervus's head office and Ontario operations centre is located in Toronto, with additional sales offices in Vancouver, Calgary and in Montreal. Cervus Financial Group Inc. conducts all lending operations through its wholly-owned subsidiary, Cervus Financial Corp. Forward-looking (safe harbour) statement Statements made in this news release that relate to future plans, events or performances are forward-looking statements forward-looking statement A projected financial statement based on management expectations. A forward-looking statement involves risks with regard to the accuracy of assumptions underlying the projections. . Any statement containing words such as "believes," plans," "expects" or "intends" and other statements which are not historical facts contained in this release are forward-looking, and these statements involve risks and uncertainties and are based on current expectations. Consequently, actual results could differ materially from the expectations expressed in these forward-looking statements. Additional information about Cervus is available on SEDAR SEDAR System for Electronic Document Analysis and Retrieval SEDAR Southeast Data, Assessment, and Review (www.sedar.com). The TSX does not accept responsibility for the adequacy or accurac y of this release. Cervus Financial Group Inc. (TSX:CFG) |
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