For Immediate Release
Ameritrans Capital Corporation
For more information Contact:
Michael Feinsod
(212) 355-2449
Ameritrans Capital Corporation Announces June 30, 2009 Financial Results
New York, N.Y., September 29, 2009 – Ameritrans Capital Corporation (NASDAQ: AMTC, AMTCP) today reported financial results for its fourth quarter and year ended June 30, 2009.
Financial Highlights
| | | | | | | | |
| Q4-2009 | Q4-2008 | FY 2009 | FY 2008 |
| Total | Per Share | Total | Per Share | Total | Per Share | Total | Per Share |
Investment Income | $258,742 | $ 0.08 | $1,424,281 | $0.42 | $3,344,324 | $0.99 | $6,260,277 | $1.84 |
Net Investment loss | $(1,265,330) | $(0.37) | $(201,011) | $(0.06) | $(2,939,960) | $(0.87) | $ (46,250) | $(0.01) |
Net decrease in net assets from operations | $(2,906,900) | $(0.85) | $(311,876) | $(0.09) | $(5,462,453) | $(1.61) | $ (535,571) | $(0.16) |
Net decrease in net assets available to common shareholders | $(2,906,900) | $(0.85) | $(396,251) | $(0.12) | $(5,715,578) | $(1.68) | $(875,071) | $(0.26) |
Total fair value of investments:
June 30, 2009: $26.4 million
June 30, 2008: $59.6 million
Net assets value per common share:
June 30, 2009: $3.40
June 30, 2008: $5.06
Stockholders' equity:
June 30, 2009: $15.1 million
June 30, 2008: $20.8 million
Number of portfolio company investments:
June 30, 2009: 78
June 30, 2008: 381
OPERATING RESULTS
For the fiscal year ended June 30, 2009 Ameritrans Capital Corporation (the “Company”) reported a decrease in net assets from operations available to common shareholders of $5,715,578, or a decrease of $1.68 per outstanding share of Common Stock. This compares with the fiscal year ended June 30, 2008 where the Company reported a decrease in net assets from operations available to common shareholders of $875,071 or $0.26 per share.
For the quarter ended June 30, 2009, Ameritrans Capital reported a net investment loss of $1,265,330 or approximately $0.37 per share. Net investment loss for the fourth quarter of Fiscal 2008 was $201,011 or approximately $0.06 per share. Net investment income can vary substantially from period to period for various
factors, including the recognition of realized gains and losses and unrealized appreciation and depreciation. As a result, quarterly comparisons of net income may not be meaningful.
For the fiscal year ended June 30, 2009 the Company reported a decrease in net assets from operations of $5,462,453, or a decrease of $1.61 per outstanding share of Common Stock. The factors contributing to this decrease were: an operating loss of $2,939,960, an unrealized write-down of $1,095,408 in the Company’s life settlement portfolio, a $604,693 realized loss on an investment in a sanitary ware distributor, a $339,371 realized loss on the sale of the Company’s taxicab medallion loan portfolio, a $250,000 reduction in the value of the fair value of a loan, a $195,000 reduction in the value of a loan due to the subsequent sale of the foreclosed property, a $95,000 reduction in the value of an LLC equity investment in a condominium conversion construction project, an approximate $94,000 write off of collateral previously acquired, and a total of approximately $455,000 of losses associated with fair value adjustments in othe r portfolio investments. Offsetting these amounts were increases to the fair value of the Company’s corporate loan portfolio of approximately $185,000 and other miscellaneous increases of $420,000 to reflect realize values for assets acquired and certain other fair value adjustments.
As of June 30, 2009, total assets were approximately $28.2 million, stockholders' equity was approximately $15.1 million and net asset value per share was $3.40.
The following table shows the Company’s portfolio by security type at June 30, 2009 and June 30, 2008:
| | | | | | |
| | | | | | |
| June 30, 2009 | June 30, 2008 |
Security Type | Cost | Fair Value | % (1) | Cost | Fair Value | % (1) |
Medallion Loans | $ 362,611 | $ 356,700 | 1.3% | $ 29,609,325 | $ 29,870,342 | 50.0% |
Commercial Loans | 12,094,430 | 11,293,132 | 42.8% | 14,244,545 | 13,833,085 | 23.3% |
Corporate Loans | 12,007,939 | 12,193,255 | 46.2% | 11,578,846 | 11,507,970 | 19.3% |
Life Settlement Contracts | 2,859,489 | 1,764,081 | 6.7% | 2,842,458 | 2,842,458 | 4.8% |
Equity Securities | 1,444,927 | 802,300 | 3.0% | 2,156,008 | 1,544,432 | 2.6% |
Total | $ 28,769,396 | $ 26,409,468 | 100.0% | $ 60,431,182 | $ 59,598,287 | 100.0% |
(1) Represents percentage of total portfolio at fair value.
The fair value of the Company’s investments at June 30, 2009 was approximately $26.4 million. These portfolio investments (which exclude cash and cash equivalents) were comprised of approximately 46.2% in Corporate Loans (100% of which were first lien), 42.8% in Commercial Loans (approximately 78% of which are secured by real estate), approximately 6.7% in Life Settlement Contracts, approximately 3.0% in Equity Securities, and approximately 1.3% in taxicab medallion loans. As of June 30, 2009, the weighted average yield of debt and income producing securities at fair value was approximately 7.8% and approximately 97% of the Company's assets were in floating rate debt securities.
Michael Feinsod, CEO and President of Ameritrans, stated "We had anticipated Fiscal 2009 would be a transformation year for the Company as we moved out of the taxicab medallion loan business and scaled up our portfolio of Corporate Loans. While we were able to successfully close the sale of our medallion portfolio and pay down substantially all of our bank debt to date, due to the credit market difficulties over the past year, the Company has been unable to secure additional debt financing to grow its investment portfolio. During the year, we pursued various capital raising opportunities, but were unable to put any financing in place. In December, 2008, our SBIC subsidiary submitted an application for additional SBA guaranteed debentures. Over the past months, we have had significant communications with SBA. As of today however, SBA has not made a formal determination regarding Elk’s debenture applicati on. Based upon our continued discussions, we remain cautiously optimistic that Elk’s request for additional debentures will be approved.
Our portfolio quality deteriorated over the year with loans on non accrual status increasing to $3,249,070 as of June 30, 2009, as compared to $175,008 as of June 30, 2008. Since the end of the fiscal year, we have worked with our borrowers to maximize and protect the value of our portfolio. We believe our portfolio remains well positioned with significant weightings in widely diversified industries. Although we experienced our most significant quarter of net unrealized depreciation mostly resulting from marking our assets lower to reflect fair value, we experienced only one new non-accruing loan during the fourth quarter."
"While Fiscal 2009 was challenging, we remain focused on strengthening our balance sheet and liquidity, managing and reducing our cost structure and aggressively managing credit quality in our Commercial and Corporate Loan portfolios and opportunistically exploring initiatives to enhance shareholder value.” Mr. Feinsod added.
LIQUIDITY AND CAPITAL RESOURCES
As of June 30, 2009, Ameritrans Capital had $885,434 in cash and cash equivalents and $370,000 in total bank debt outstanding. The Company also had $12 million of SBA guaranteed debentures outstanding, and an application pending for additional debentures.
PREFERRED DIVIDEND
On July 28, 2009, the Board of Directors announced that the Company decided not to pay the dividend of $0.28125 per share on its Preferred Stock for the period April 1, 2009 through June 30, 2009. The dividend on the Preferred Stock for the period April 1, 2009 through June 30, 2009 will remain in arrears and will be paid to shareholders, when and as declared by the Board of Directors of the Company.
ABOUT AMERITRANS CAPITAL CORPORATION
Ameritrans Capital Corporation is an internally managed, closed-end investment company that has elected to be regulated as a business development company ("BDC") under the Investment Company Act of 1940, as amended. Ameritrans originates, structures and manages a portfolio of secured business loans and selected equity investments. Ameritrans' wholly owned subsidiary Elk Associates Funding Corporation is licensed by the United States Small Business Administration as a Small Business Investment Company (SBIC). The Company maintains its offices at 747 Third Avenue, 4th Floor, New York, NY 10017.
FORWARD-LOOKING STATEMENTS
Statements included herein or on the webcast/conference call may constitute "forward-looking statements," which relate to future events or our future performance or financial condition. These statements are not guarantees of future performance, condition or results and involve a number of risks and uncertainties. Actual results and condition may differ materially from those in the forward-looking statements as a result of a number of factors, including those described from time to time in our filings with the Securities and Exchange Commission. Ameritrans Capital Corporation undertakes no duty to update any forward-looking statements made herein or on the webcast/conference call.
AVAILABLE INFORMATION
Ameritrans Capital Corporation's filings with the Securities and Exchange Commission, press releases, earnings releases and other financial information are available on its website atwww.ameritranscapital.com.
AMERITRANS CAPITAL CORPORATION AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS (Continued)
June 30, 2009 and 2008
| | |
| 2009 | 2008 |
| | |
Assets (Note 6) | | |
| | |
Investments at fair value (cost of $28,769,396 and
$60,431,182, respectively): | | |
Non-controlled/non-affiliated investments | $ 25,080,451 | $ 56,782,716 |
Non-controlled affiliated investments | 711,000 | 1,424,264 |
Controlled affiliated investments | 618,017 | 1,391,307 |
| | |
Net investments at fair value | 26,409,468 | 59,598,287 |
| | |
Cash and cash equivalents | 885,434 | 665,893 |
Accrued interest receivable | 540,213 | 602,956 |
Assets acquired in satisfaction of loans | 28,325 | 38,250 |
Furniture, equipment and leasehold improvements, net | 130,217 | 156,125 |
Deferred loan costs, net | 146,096 | 186,760 |
Prepaid expenses and other assets | 146,403 | 733,197 |
| | |
Total assets | $ 28,286,156 | $ 61,981,468 |
(Continued)
AMERITRANS CAPITAL CORPORATION AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS (Continued)
June 30, 2009 and 2008
| | |
| 2009 | 2008 |
Liabilities and Stockholders’ Equity | | |
| | |
Liabilities: | | |
Debentures payable to SBA | $ 12,000,000 | $ 12,000,000 |
Notes payable, banks | 370,000 | 28,095,697 |
Note payable – related party | - | 100,000 |
Accrued expenses and other liabilities | 562,149 | 640,576 |
Accrued interest payable | 210,165 | 262,528 |
Dividends payable | - | 84,375 |
|
| |
Total liabilities | $ 13,142,314 | $ 41,183,176 |
| | |
Commitments and contingencies (Notes 12 and 13) | | |
| | |
Stockholders’ equity: | | |
Preferred stock 9,500,000 shares authorized, none issued or outstanding | - | - |
9-3/8% cumulative participating redeemable preferred stock $.01 par value, $12.00 face value, 500,000 shares authorized; 300,000 shares issued and outstanding | 3,600,000 | 3,600,000 |
Common stock, $.0001 par value; 45,000,000 shares authorized, 3,405,583 shares issued; 3,395,583 shares outstanding | 341 | 341 |
Deferred compensation (Note 15) | (29,166) | (40,921) |
Stock options outstanding (Note 15) | 191,040 | 141,668 |
Additional paid-in capital | 21,139,504 | 21,139,504 |
Losses and distributions in excess of earnings | (7,327,949) | (2,895,992) |
Net unrealized depreciation on investments | (2,359,928) | (1,076,308) |
Total | 15,213,842 | 20,868,292 |
Less: Treasury stock, at cost, 10,000 shares of common stock | (70,000) | (70,000) |
| | |
Total stockholders’ equity | 15,143,842 | 20,798,292 |
| | |
Total liabilities and stockholders’ equity | $ 28,286,156 | $ 61,981,468 |
|
| |
Net asset value per common share | $ 3.40 | $ 5.06 |
