FAX CAPITAL CORP. REPORTS SECOND QUARTER 2020 RESULTS

 
NOT FOR DISSEMINATION IN THE UNITED STATES OR DISTRIBUTION TO U.S. NEWS WIRE SERVICES
FOR IMMEDIATE RELEASE

August 6, 2020, Toronto, Ontario - 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, 2020


The 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: This email address is being protected from spambots. You need JavaScript enabled to view it.
Website: www.faxcapitalcorp.com

Media Relations
Tim Foran
Telephone: (416) 986-8515
Email: This email address is being protected from spambots. You need JavaScript enabled to view it.